(Formerly known as Red Fork Energy Limited)
ANNUAL FINANCIAL REPORT
For the financial year ended
31 December 2015
CONTENTS
Corporate Directory
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Corporate Governance Statement
Consolidated Statement of Profit and 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 to the Members of Brookside Energy Limited
Additional Shareholders’ Information
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66
1
CORPORATE DIRECTORY
NON-EXECUTIVE CHAIRMAN
Michael Fry
MANAGING DIRECTOR
David Prentice
NON-EXECUTIVE DIRECTOR
Loren Jones
COMPANY SECRETARY
Loren Jones
REGISTERED OFFICE
C/- Cicero Corporate Services Pty Ltd
Suite 9, 330 Churchill Avenue
Subiaco WA 6008
POSTAL ADDRESS
PO Box 866
Subiaco WA 6904
PRINCIPAL PLACE OF BUSINESS
Suite 9, 330 Churchill Avenue
Subiaco, WA 6008
Tel: (08) 6489 1600
Fax: (08) 6489 1601
Email: info@brookside-energy.com.au
WEBSITE
www.brookside-energy.com.au
AUDITORS
Grant Thornton Audit Pty Ltd
Level 1, 10 Kings Park Road
WEST PERTH WA 6005
BANKERS
Commonwealth Bank of Australia
150 St Georges Terrace
Perth WA 6000
SHARE REGISTRY
Security Transfer Registrars Pty Ltd
770 Canning Highway
APPLECROSS WA 6153
Telephone: +61 8 9315 2333
Facsimile: +61 8 9315 2233
SECURITIES EXCHANGE LISTING
Australian Securities Exchange
Level 40, Central Park
152-158 St George's Terrace
Perth WA 6000
ASX CODE
BRK (Ordinary Shares)
BRKO (Options)
2
DIRECTORS’ REPORT
The Directors submit their report for the Company and its subsidiary (“the Group” or “Company”) for
the financial year ended 31 December 2015. In order to comply with the provisions of the
Corporations Act, the Directors report as follows:
DIRECTORS
The names and details of the Company’s Directors in office during the financial year and until the
date of this report are as follows. Directors were in office for the entire period unless otherwise
stated.
Board of Directors
Michael Fry
David Prentice
Loren Jones
Non-Executive Chairman
Managing Director
Non-Executive Director (appointed 5 June 2015)
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The Group’s principal activities during the year were the exploration and appraisal of, and
development and production of, oil and gas.
OPERATING RESULT
The after tax loss for the Group for the financial year ended to 31 December 2015 amounted to
$2.2m (2014: $211m).
DIVIDENDS
There were no dividends paid or recommended during or subsequent to the financial year ended 31
December 2015 (2014: Nil).
REVIEW OF OPERATIONS
On 1 April 2015, at a meeting of creditors of the Company, the creditors of the Company resolved
that the Company execute a deed of company arrangement (DOCA) between the Company, the
Administrators and Cicero Advisory Services Pty Ltd. The DOCA was subsequently executed on 2
April 2015. Under the terms of the DOCA, the Administrators were appointed as deed administrators
of the DOCA (Deed Administrators). The DOCA included a proposal for the reconstruction and
recapitalisation of the Company (Recapitalisation Proposal).
Completion of the DOCA was subject to a number of conditions, including obtaining necessary
shareholder approvals. On 8 June 205 the Company announced that all of the resolutions put to
shareholders at the General meeting held on 5 June 2015 were passed.
On the 9 June 2015 the Company lodged a Prospectus for the capital raising contemplated in the
Recapitalisation Proposal. On 1 July 2015 the Company announced that the Offers under this
Prospectus had closed oversubscribed with a total of $2,500,000 raised. A portion of the funds raised
under the Prospectus were used to settle obligations to creditors with claims against the Company
arising on or before 10 December 2014 under the DOCA. Upon completion of the Capital Raising
$400,000 was paid to the Deed Administrators who in turn paid $295,000 into the Creditors’ Trust and
$105,000 to Guggenheim Corporate Funding LLC (Guggenheim), resulting in the DOCA being
effectuated and the Company’s recapitalisation and reinstatement on the ASX. Consequently, the
Board of Directors regained control of the Company and has since used the funds raised to cover
the expenses of the Prospectus Offers and to provide ongoing working capital.
3
DIRECTORS’ REPORT
The DOCA as entered into on 1 April 2015 was wholly effectuated on 15 July 2015 in accordance
with clause 10.1 of the DOCA and section 445C of the Corporations Act 2001.
On 16 July 2015, the Company was advised that the Receivers and Managers appointed by
Guggenheim (as announced on 10 December 2014) retired from office by way of execution of a
Deed of Retirement effective as of 15 July 2015.
Control of the Company has reverted to the Board of Directors, effective 15 July 2015. The Company
was subsequently reinstated to official quotation on August 5, 2015.
On August 31, 2015 the Company lodged a Notice of Annual General Meeting (AGM) for a meeting
to be held on September 30, 2015. Resolutions put to the AGM included, the adoption of the
Remuneration Report, re-election of Director (Michael Fry), consolidation of capital, placement of
options and participation of related parties in the placement of options. On September 30, 2015 the
Company announced that all resolutions put to the meeting passed on a show of hands.
Subsequently, the consolidation of capital, which was achieved through the conversion of ten fully
paid ordinary shares into one fully paid ordinary share, was completed on 8 October 2015. Following
the consolidation the Company had a total of 350,000,303 fully paid ordinary shares on issue. The
Company also issued 175,000,000 unlisted options (Options) (exercisable at $0.02 per option with an
expiry date of December 31, 2018) on October 23, 2015.
On 7 October 2015, the company registered its wholly owned subsidiary BRK Oklahoma Holdings
LLC, an Oklahoma, USA, Limited Liability Company.
An ASX announcement was made on October 29, 2015 advising of the appointment of Cicero
Advisory Services (Cicero Advisory) as the Company’s Corporate Advisors. The Company is working
closely with Cicero Advisory to identify and review high growth strong cash flow generating
opportunities.
On 6 November 2015 the Company completed a placement of up to 49,999,697 shares at a price of
$0.012 per share, along with free attaching unquoted options (Options)(exercisable at $0.02 on or
before 31 December 2018) on a 1 for 4 basis, to raise approximately $600,000 before costs
(Placement). The issue of the Placement shares and the 12,499,924 attaching Options was
approved by Shareholders at a General Meeting held on 21 December 2015.
In addition, on December the 7th the Company (through its wholly owned subsidiary BRK Oklahoma
Holdings, LLC) made an investment in US focused energy start-up Black Mesa Production LLC (Black
Mesa). The investment in Black Mesa provides the Company with exposure to the US Energy Sector
at an opportune time in the commodity price cycle with a modest investment that will allow the
Company to pursue other initiatives in parallel.
During the year ended 31 December 2015 the Company continued to pursue its main business
undertaking of oil and gas exploration and production, looking to leverage off the experience of its
Directors and its extensive network of experienced consultants and service companies to identify
opportunities in the mid-continent region of the United States. The Company is applying a
disciplined portfolio approach to its review of potential acquisition opportunities. The Board is
committed to pursuing and developing strategies to build value per share that conserve capital and
provide the flexibility to consider any and all opportunities during this important initial growth phase.
Matters Subsequent to the End of the Financial Period
On 4 January 2016 the Company made its third scheduled contribution to Black Mesa Productions,
LLC (Black Mesa) being USD $159,000. To date the Company has sent contributions to Black Mesa
totalling USD $252,780. The next scheduled capital commitment of USD $144,000 is not due to be
paid until 1 July 2016.
4
DIRECTORS’ REPORT
On 13 January 2016 the Company sought to have their unlisted options quoted and received official
approval from the commencement of trading on Friday, 22 January 2016
On Tuesday the 29th of March 2016, the Company requested a trading halt pending the
announcement of an acquisition of oil and gas royalties in Blaine County Oklahoma by its wholly
owned subsidiary BRK Oklahoma Holdings, LLC (BRK Oklahoma) (Acquisition). The consideration for
the acquisition is expected to be approximately A$1.1M. It is anticipated that Cicero Advisory, the
Company’s Corporate Advisors, will be appointed to manage an offer, of 100,000,000 new fully paid
ordinary shares at $0.01 (with a one for two free attaching option, exercisable at $0.02 on or before
31 December 2018, subject to shareholder approval) to raise $1,000,000 before costs (Placement),
with the express purpose of funding this Acquisition.
The Directors are not aware of any other matter or circumstance that has arisen since 31 December
2015 which significantly affected, or may significantly affect, the operations of the Group, the results
of those operations, or the state of affairs of the Group, in future financial years.
ENVIRONMENTAL REGULATIONS
Brookside Energy is aware of its environmental obligations with regards to these activities and
ensured that it complied with all regulations. There have not been any known breaches of the
entity’s obligations under these environmental regulations during the year under review and up to
the date of this report.
INFORMATION ON DIRECTORS
Michael Fry
Non-Executive Chairman
Qualifications
B.Comm, F.Fin
Experience
Other
Directorships
Michael Fry holds a Bachelor of Commerce degree from the University of Western
Australia, is a Fellow of the Financial Services Institute of Australasia, and is a past
member of the ASX. Michael has extensive experience in capital markets and
corporate treasury management specialising in the identification of commodity,
currency and interest rate risk and the implementation of risk management
strategies.
Michael Fry is currently the non-executive chairman of ASX Listed Companies
Norwest Energy NL and Challenger Energy Limited.
Liberty Resources Limited – resigned 10 April 2012.
Killara Resources Limited – resigned 9 October 2012.
David Prentice Non-Executive Chairman
Qualifications Grad. Dip BA, MBA
Experience
Other
Directorships
David Prentice’s career includes more than 25 years’ experience in commercial
management and business development within the natural resources sector,
working for some of Australia’s leading resource companies. This has included
high-level commercial and operational roles with a number of listed and unlisted
resource companies.
David Prentice is currently the non-executive director Black Mesa Productions, LLC
Jameson Resources Limited – resigned 30 April 2014
Challenger Energy Limited - resigned 26 March 2012.
5
DIRECTORS’ REPORT
Loren Jones
Non-Executive Director
Qualifications
BSc (Psych), Cert IV FinSvcs (Bookkeeping)
Experience
Miss Loren Jones has worked in finance and administration roles with ASX listed
companies, stock broking and corporate advisory services for the past 10 years.
During this time she has gained invaluable experience in dealing with all aspects of
corporate governance and administration, specialising in initial public offerings
(IPO), private capital raising and backdoor listings.
Other
Directorships
Miss Jones is currently completing her Graduate Diploma of Applied Corporate
Governance with the Governance Institute of Australia.
Miss Jones is a Partner at and Company Secretary of corporate administration firm
Cicero Corporate Services Pty Ltd and holds the positions of Non-Executive
Director and Company Secretary at Fraser Range Metals Group Limited (ASX: FRN)
and Blaze International Limited (ASX: BLZ). She is also a Non-Executive Director of
Star Striker Limited (ASX: SRT) and Red Fox Capital Limited. Additionally, Miss Jones
currently serves as the Company Secretary of Wangle Technologies Limited (ASX:
WGL), Alcidion Group Limited (ASX: ALC) and Aphex Minerals Pty Ltd. Past Non-
Executive Director and/or Company Secretarial positions include ZipTel Limited
(ASX: ZIP), MMJ Phytotech Limited (ASX: MMJ) and Jernigan Commodities Limited.
Company Secretary
Loren Jones
Please refer to information above.
CORPORATE INFORMATION
Group Corporate Structure
Brookside Energy Limited is a public company incorporated and domiciled in Western Australia listed
on the Australian Securities Exchange (ASX Code: BRK) and wholly owned subsidiary, BRK Oklahoma
LLC, a Limited Liability Company incorporated and domiciled in Oklahoma, USA.
Employees
Brookside Energy Limited has no full time employees as at the date of this report.
Meetings of Directors
The number of Directors' meetings (including committees) held during the year for each director
who held office, and the number of meetings attended by each director are:
Director
Michael Fry
David Prentice
Loren Jones^
^ Appointed 5 June 2015
Options
Directors Meetings
Meetings Attended
Number Held and Eligible to
Attend
2
2
2
2
2
2
At the date of this report 187,499,924 options over ordinary shares in the Group were on issue and no
options were exercised during the year.
6
DIRECTORS’ REPORT
During the year ended 31 December 2015, options on issue are as detailed below.
Type
Date of Expiry
Exercise Price
Number on issue
Unlisted Options^
31 Dec 2018
$0.02
187,499,924
^ On 13 January 2016 the Company sought to have their unlisted options quoted and received official approval from the
commencement of trading on Friday, 22 January 2016.
Directors’ holdings of shares and performance rights during the financial period have been disclosed
in the Remuneration Report. Option holders do not have any right, by virtue of the option, to
participate in any share issue of the Company.
Performance Rights
There are nil performance rights on issue. During the year, 10,460,000 performance rights were
cancelled as they are no longer achievable or they have nil value.
INDEMNIFYING OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001,
every Officer, or agent of the Company shall be indemnified out of the property of the Company
against any liability incurred by him in his capacity as Officer, or agent of the Company or any
related corporation in respect of any act or omission whatsoever and howsoever occurring or in
defending any proceedings, whether civil or criminal.
The Company currently has a Directors’ and Officers’ liability insurance in place. A total premium of
A$14,300 was paid for cover period from 8 Sept 2015 to 8 Sept 2016. The liabilities insured are legal
costs that may be incurred in defending civil or criminal proceedings that may be brought against
the officers in their capacity as officers of the Company, and any other payments arising from
liabilities incurred by the officers in connection with such proceedings. This does not include such
liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use
by the officers of their position or of information to gain advantage for themselves or someone else
or to cause detriment to the Company.
Proceedings on Behalf of Company
No person has applied to the Court for leave to bring proceedings on behalf of the Company or to
intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or any part of those proceedings. The Company was
not a party to any such proceedings during the year.
Non-Audit Services
The Board of Directors is satisfied that the provision of non‐audit services during the reporting period
is compatible with the general standard of independence for auditors imposed by the Corporations
Act 2001. The Directors are satisfied that the services disclosed below did not compromise the
external auditor’s independence for the following reasons:
all non‐audit services are reviewed and approved by the Board prior to commencement to
ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to
auditor independence in accordance with APES 10: Code of Ethics for Professional
Accountants set by the Accounting Professional Ethics Standards Board.
No fees for non‐audit services were paid to the external auditors during the year ended 31
December 2015.
7
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, Grant Thornton, to provide the
Directors of the Company with an Independence Declaration in relation to the audit of the annual
report. This Independence Declaration is set out on page 15 and forms part of this Directors’ Report
for the year ended 31 December 2015.
8
REMUNERATION REPORT (Audited)
This Remuneration Report, which forms part of the directors’ report, sets out information about the
remuneration of Brookside Energy Limited’s Directors and its Key Management Personnel for the
financial year ended 31 December 2015.
A. INTRODUCTION
The information provided in this Remuneration Report has been audited as required by section 308
(3C) of the Corporations Act 2001. Information regarding the remuneration of Key Management
Personnel (“KMP”) is required by Corporations Regulations 2M.3.03. KMP are those individuals who
have the authority and responsibility for planning, directing and controlling the activities of the
Company and the Group
A.1 Brookside’s KMPs
Key Management Personnel for Brookside include the following Directors who were in office during
or since the end of the financial year:
Category
Name
Position
Appointment Date
Non-Executive Director
Michael Fry
Independent Chairman
20 April 2004
Non-Executive Director
Loren Jones
Non-Executive
5 June 2015
Executive Director
David Prentice
Managing Director
20 April 2004
A.2 Comments on Remuneration Report at Brookside’s most recent AGM
The Company received a 99.9% of “yes” votes on its Remuneration Report for the 2014 financial
year. The Company did not receive any specific feedback from shareholders at the 2014 Annual
General Meeting on its remuneration practices.
B. REMUNERATION POLICY DURING THE REPORTING PERIOD
The Brookside Board is committed to transparent disclosure of its remuneration strategy and this
report details the Company’s remuneration objectives, practices and outcomes for KMP, which
includes Directors and senior executives, for the period ended 31 December 2015. Any reference to
“executives” in this report refers to KMPs who are not Non-Executive Directors.
B.1 Remuneration Policy Framework
The key objective of Brookside’s remuneration policy is to be a key enabler for the Company in
achieving its strategic goal of continuing to build a successful oil and gas exploration and
production company. It has been designed to reward executives and employees fairly and
responsibly in accordance with the regional and international market in which the Company
operates, and to ensure that Brookside:
Provides competitive rewards that attract, retain and motivate executives and employees of
the highest calibre, who can successfully deliver, particularly as the Company moves through
the current phase of rapidly increased development and production;
Sets demanding levels of expected performance that have a clear linkage to an executive’s
remuneration;
Benchmarks remuneration against appropriate comparator peer groups to make the
Company competitive in a tight skilled human resources market, through an offering of both
short and long term incentives and competitive base salaries.;
Provides a level of remuneration structure to reflect each executive’s respective duties and
responsibilities;
Aligns executive incentive rewards with the creation of value for shareholders;
Complies with legal requirements and appropriate standards of governance.
9
REMUNERATION REPORT (Audited)
B.2 Policy for Executive Remuneration For Future Reporting Periods
Executive Remuneration consists of the following key elements:
Fixed remuneration or base salaries; and
Variable remuneration, being the “at risk” component related to performance comprising;
i)
ii)
Short Term Incentives (STI) ;
Long Term Incentive (LTI).
C. REMUNERATION COMPONENTS
C.1 Fixed Remuneration
Fixed remuneration was reviewed by the Remuneration and Nomination Committee in 2013 and
remained consistent for the 2014 reporting period with the recommendations made during the prior
year.
C.2 STI Plan for the 2015 Reporting Period
Due to the strategic review conducted during 2015, no STI plan was implemented for the 2015
reporting period.
C.3 Policy for and Components of Non-Executive Remuneration During the Reporting Period
Remuneration Policy
Non-Executive Director Fees
The overall level of annual Non-Executive Director fees was approved by shareholders in
accordance with the requirements of the Company’s Constitution and the Corporations Act. The
maximum aggregate Directors’ fees payable to all of the Company’s Non-Executive Directors is
$500,000 per annum. This aggregate amount was approved by shareholders at the 2012 Annual
General Meeting.
Equity Compensation
In accordance with Australian practice and shareholder preference, the Company’s current policy
is not to grant equity based compensation to Non-Executive Directors. Accordingly, no equity
components (LTI Rights) were offered to Non-Executive Directors in the reporting period to 31
December 2015.
Remuneration Structure
Non-Executive Directors receive a fixed remuneration of base fees plus statutory superannuation. In
addition, and in recognition of the higher workloads and extra responsibilities of participating on a
Board committee, if applicable, they also received a committee fee and chairing a committee also
warrants a higher fee. In addition to these fees, Non-Executive Directors are entitled to
reimbursement of reasonable travel, accommodation and other expenses incurred in attending
meetings of the Board, committee or shareholder meetings whilst engaged by Brookside. Non-
Executive Directors do not earn retirement benefits other than superannuation and are not entitled
to any compensation on termination of their directorships.
D. DETAILS OF REMUNERATION
During the year there were material changes to base salaries paid to Key Management Personnel as
a result of the reinstatement of Brookside Energy Limited (previously Red Fork Energy Limited).
Tables 2a and 2b below outline the remuneration of directors and Key Management Personnel for
the year ended 31 December 2014 and the year ended 31 December 2015:
Table 2a: Key Management Personnel Remuneration for the year ended 31 December 2015
10
REMUNERATION REPORT (Audited)
Primary
Post- employment
Base Salary
and Fees
$
Bonus
STI
$
Non-
Monetary
Benefits
$
Super-
annuation
Contributions
$
Termination
Payments
$
TOTAL
$
Percentage
Performance
Related
%
62,500
18,750
15,000
96,250
-
-
-
-
-
-
-
-
-
-
-
-
-
62,500
-
-
-
18,750
15,000
96,250
-
-
-
31 December 2015
Executive Directors
David Prentice
Non-Executive
Directors
Michael Fry
Loren Jones^
Total 31 Dec 2015
^ During the year ended 31 December 2015, Cicero Corporate Pty Ltd, an entity related to Miss Loren Jones, received $57,000
exclusive of GST for the provision of company secretarial and accounting work to the Company. Cicero has been engaged
to provide corporate services to the Group.
Table 2b: Key Management Personnel Remuneration for the year ended 31 December 2014
Primary
Post- employment
Base Salary
and Fees
$
Bonus
STI+
$
Non-
Monetary
Benefits
$
Super-
annuation
Contributions
$
Termination
Payments+
$
TOTAL
$
Percentage
Performance
Related
%
31 December 2014
Executive Directors
David Prentice
Non-Executive
Directors
Michael Fry
David Colwell^*
William Warnock^
Larry Edwards^
Executives
419,018
247,920
119,167
91,667
104,517
100,834
-
-
-
-
-
-
-
-
-
Kevin Humphrey
256,667
112,000
17,852
Chris Girouard
279,583
122,000
23,160
Lee Francis
256,667
85,427
17,037
18,245
194,114
879,297
16.0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
119,167
91,667
104,517
100,834
386,519
424,743
359,131
-
-
-
-
-
-
-
Total 31 Dec 2014
1,628,120
567,347
58,049
18,245
194,114
2,465,875
^ Resigned 10 December 2014
* Appointed 1 January 2014
+STI and Termination payments were not paid to the Key Management Personnel as a result of the DOCA proceedings other
than a required amount of $3,500 to Mr David Prentice.
E. SHARE-BASED REMUNERATION
Performance Rights Held by Key Management Personnel
(i)
The number of performance rights in the Group held during the transitional financial period by each
Director of Brookside Energy Limited and other Key Management Personnel, including their
personally related parties, are set out below:
31 December 2015
Balance at
01.01.15
Granted as
Remuneration
On
Conversion
of Rights
Cancelled
Balance at
31.12.15
Vested and
Convertible
11
REMUNERATION REPORT (Audited)
Directors
David Prentice
1,000,000
Michael Fry
Loren Jones^
-
-
Total 31 Dec 2015
1,000,000
^ Appointed 5 June 2015
-
-
-
-
-
-
-
-
(1,000,000)
-
-
(1,000,000)
-
-
-
-
-
-
-
-
31 December
2014
Balance at
01.01.14
Granted as
Remuneration
On
Conversion
of Rights
Cancelled
Balance at
31.12.14
Vested and
Convertible
Directors
David Prentice
1,000,000
Michael Fry
David Colwell^*
William Warnock^
Larry Edwards^
Executives
Kevin Humphrey
Chris Girouard
Lee Francis
-
-
-
-
1,570,000
1,570,000
380,000
Total 31 Dec 2014
4,520,000
^ Resigned 10 December 2014
* Appointed 1 January 2014
Key Terms of Performance Rights
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
-
-
-
-
-
-
-
-
1,570,000
190,000
1,570,000
190,000
380,000
-
4,520,000
1,380,000
The Performance Rights on issue at 31 December 2014 have been deemed nil value as the vesting
conditions are no longer achievable. As a result, all performance rights on issue were cancelled
during the year.
12
REMUNERATION REPORT (Audited)
Shares held by Key Management Personnel
(ii)
The number of shares in the Company held during year by each Director of Brookside Energy Limited
and other Key Management Personnel, including their personally related parties, are set out below.
There were no shares granted during the year as compensation.
31 December
2015
Balance at
1 Jan 2015
Shares
Issued
Performance
Rights Exercised
Other^
Balance at
31 Dec 2015
Directors
David Prentice
Michael Fry
Loren Jones*
3,747,441
1,894,774
-
Total 31 Dec 2015
5,642,215
-
-
-
-
-
-
-
-
(1,873,721)
(351,904)
-
1,873,720
1,542,870
-
(2,225,625)
3,416,590
^ Included is the capital consolidation as approved by shareholders by an ordinary resolution at the Company’s General
Meeting held on 5 June 2015 on a 1 for 2 basis.
* Appointed 5 June 2015
31 December
2014
Balance at
01.01.14
Shares
Issued
Performance
Rights Exercised
Other
Balance at
31.12.14
Directors
David Prentice
Michael Fry
David Colwell^*
William Warnock^
Larry Edwards^
Executives
Kevin Humphrey
Chris Girouard
Lee Francis
3,747,441
1,894,774
-
-
-
-
160,000
-
Total 31 Dec 2014
5,802,215
^ Resigned 10 December 2014
* Appointed 1 January 2014
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,747,441
1,894,774
-
-
-
-
160,000
-
5,802,215
Options Held By Key Management Personnel
(iii)
Options held by Key Management Personnel during the reporting period are as follows:
31 December
2015
Balance at
01.01.15
Shares
Issued
Performance
Rights Exercised
Other^
Balance at
31.12.15
Directors
David Prentice
Michael Fry
Loren Jones*
Total 31 Dec 2015
-
-
-
-
-
-
-
-
-
-
-
-
40,000,000
40,000,000
25,000,000
25,000,000
-
-
65,000,000
65,000,000
^ Options acquired for nil consideration during the year arise from participation in the Share Placement on 2 November 2015.
* Appointed 5 June 2015
No shares were issued on the exercise of options during the period.
13
REMUNERATION REPORT (Audited)
F. SERVICE AGREEMENTS
Director
Base Salary
Terms of the Agreement
Notice Period
$12,500 per month
Until termination
6 Months
David Prentice
CEO/Managing Director
Michael Fry
Non-Executive Chairman
$45,000 per annum
Loren Jones
Non-Executive Director
$30,000 per annum
$114,000 per annum for the
provision of company
secretarial and office support
Until termination in
accordance with the
Company’s Constitution
Until termination in
accordance with the
Company’s Constitution
Reasonable
notice
Reasonable
notice
Until Termination
6 months
This report is made in accordance with a resolution of the Directors.
David Prentice
Chief Executive Officer
01 April 2016
14
Auditor’s Independence Declaration
To the Directors of Brookside Energy Limited
Level 1
10 Kings Park Road
West Perth WA 6005
Correspondence to:
PO Box 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Brookside Energy Limited for the year ended 31 December 2015, I
declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the
audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M J Hillgrove
Partner - Audit & Assurance
Perth, 01 April 2016
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
CORPORATE GOVERNANCE
This Corporate Governance Statement report sets out information about the Corporate Governance
of Brookside Energy Limited for the financial year ended 31 December 2015.
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement is current as at 20 July 2015 and has been approved by the
Board of the Company on that date.
This Corporate Governance Statement discloses the extent to which the Company will follow the
recommendations set by the ASX Corporate Governance Council in its publication Corporate
Governance Principles and Recommendations (Recommendations). The Recommendations are not
mandatory, however the Recommendations that will not be followed have been identified and
reasons provided for not following them along with what (if any) alternative governance practices
the Company intends to adopt in lieu of the recommendation.
The Company has adopted a Corporate Governance Plan which provides the written terms of
reference for the Company’s corporate governance duties.
The Company’s Corporate Governance Plan
http://brookside-energy.com.au/.
is available on the Company’s website at
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Principle 1: Lay solid foundations for management and oversight
YES
Recommendation 1.1
A
listed entity should have and
disclose a charter which sets out the
respective roles and responsibilities of
the
and
Board,
management, and
includes a
description of those matters expressly
reserved to the Board and those
delegated to management.
the Chair
Recommendation 1.2
A listed entity should:
YES
(a) undertake appropriate checks
before appointing a person, or
security
to
putting
holders
for
candidate
election, as a Director; and
forward
a
(b) provide security holders with all
material information relevant to
a decision on whether or not to
elect or re-elect a Director.
The Company has adopted a Board Charter that sets out
the specific roles and responsibilities of the Board, the
Chair and management and includes a description of
those matters expressly reserved to the Board and those
delegated to management.
The Board Charter sets out the specific responsibilities of
the Board, requirements as to the Board’s composition,
the roles and responsibilities of the Chairman and
Company Secretary, the establishment, operation and
management of Board Committees, Directors’ access to
Company records and information, details of the Board’s
relationship with management, details of the Board’s
performance review and details of the Board’s disclosure
policy.
A copy of the Company’s Board Charter, which is part of
the Company’s Corporate Governance Plan, is available
on the Company’s website.
in
(a) The Company has guidelines for the appointment
and selection of
its Corporate
the Board
Governance Plan. The Company’s Nomination
Committee Charter (in the Company’s Corporate
Governance Plan)
the Nomination
Committee (or, in its absence, the Board) to ensure
appropriate checks (including checks in respect of
character, experience, education, criminal record
(as appropriate)) are
and bankruptcy history
undertaken before appointing a person, or putting
forward to security holders a candidate for election,
as a Director.
requires
(b) Under the Nomination Committee Charter, all
material information relevant to a decision on
whether or not to elect or re-elect a Director must
16
CORPORATE GOVERNANCE
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Recommendation 1.3
A listed entity should have a written
agreement with each Director and
senior executive setting out the terms
of their appointment.
YES
Recommendation 1.4
The company secretary of a listed
entity should be accountable directly
to the Board, through the Chair, on all
matters
the proper
functioning of the Board.
to do with
YES
be provided to security holders in the Notice of
Meeting containing the resolution to elect or re-
elect a Director.
The Company’s Nomination Committee Charter requires
the Nomination Committee (or, in its absence, the Board)
to ensure that each Director and senior executive is a
party to a written agreement with the Company which
sets out the terms of that Director’s or senior executive’s
appointment.
The Company has written agreements with each of its
Directors and senior executives.
The Board Charter outlines the roles, responsibility and
In
accountability of
accordance with
is
accountable directly to the Board, through the Chair, on
all matters to do with the proper functioning of the Board.
the Company Secretary
the Company
Secretary.
this,
Recommendation 1.5
A listed entity should:
(a)
PARTIALLY
(a) have a diversity policy which
includes
for the
requirements
Board or a relevant committee
of the Board to set measurable
objectives for achieving gender
diversity and to assess annually
both the objectives and the
entity’s progress
in achieving
them;
(b) disclose
that policy or a
summary or it; and
(c) disclose as at the end of each
reporting period:
(b)
(c)
(i)
achieving
the measurable objectives
for
gender
diversity set by the Board in
the
accordance
entity’s diversity policy and
its
towards
progress
achieving them; and
with
(ii) either:
-
-
the
respective
proportions of men and
women on the Board, in
executive
senior
positions and across the
organisation
whole
(including
the
defined
entity
for
“senior executive”
these purposes); or
how
has
the entity
is a
if
employer”
“relevant
the Workplace
under
Gender Equality Act,
the entity’s most recent
Equality
“Gender
The Company has adopted a Diversity Policy which
provides a framework for the Company to establish
and achieve measurable diversity objectives,
including in respect of gender diversity. The Diversity
Policy allows the Board to set measurable gender
diversity objectives, if considered appropriate, and
to assess annually both the objectives if any have
been set and the Company’s progress in achieving
them.
The Diversity Policy is available, as part of the
Corporate Governance Plan, on the Company’s
website.
(i)
The Board does not presently intend to set
objectives
measurable
because:
-
diversity
gender
-
the Board does not anticipate there will
be a need to appoint any new Directors
or senior executives due to limited nature
of the Company’s existing and proposed
activities and the Board’s view that the
existing Directors and senior executives
have sufficient skill and experience to
carry out the Company’s plans; and
if it becomes necessary to appoint any
new Directors or senior executives, the
Board considered the application of a
measurable gender diversity objective
requiring a specified proportion of women
on the Board and in senior executive roles
will, given the small size of the Company
and the Board, unduly limit the Company
from applying the Diversity Policy as a
whole and the Company’s policy of
appointing based on skills and merit: and
(ii)
the respective proportions of men and women
on the Board, in senior executive positions and
across the whole organisation (including how
the entity has defined “senior executive” for
17
CORPORATE GOVERNANCE
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Indicators”, as defined
in
the Workplace
Gender Equality Act.
these purposes) for each financial year will be
disclosed in the Company’s Annual Report .
Recommendation 1.6
A listed entity should:
(a)
YES
(a) have and disclose a process for
the
periodically
performance of the Board, its
committees
individual
Directors; and
evaluating
and
responsible
for evaluating
in the absence of a Nomination
The Board,
Committee,
the
is
performance of the Board, its committees and
individual Directors on an annual basis. It may do so
with the aid of an independent advisor. The process
for this is set out in the Company’s Corporate
Governance Plan, which
the
Company’s website.
is available on
(b) disclose,
in
relation to each
reporting period, whether a
performance evaluation was
undertaken
reporting
period in accordance with that
process.
the
in
Recommendation 1.7
A listed entity should:
(a)
YES
(a) have and disclose a process for
the
senior
evaluating
periodically
performance
executives; and
of
its
(b) disclose,
in
relation to each
reporting period, whether a
performance evaluation was
undertaken
reporting
period in accordance with that
process.
the
in
Principle 2: Structure the Board to add value
Recommendation 2.1
The Board of a listed entity should:
YES
(a) have a nomination committee
which:
(i) has at least three members,
a majority of whom are
independent Directors; and
(ii)
chaired
is
independent Director,
by
an
and disclose:
(iii)
charter
the
committee;
(iv) the members
committee; and
of
the
of
the
(b)
The Company’s Corporate Governance Plan
requires the Company to disclose whether or not
performance evaluations were conducted during
the relevant reporting period. The Company intends
to complete performance evaluations in respect of
the Board, its committees (if any) and individual
Directors for the each financial year in accordance
with the above process.
responsible
for evaluating
in the absence of a Nomination
The Board,
Committee
the
is
performance of the Company’s senior executives
on an annual basis. The Board, in the absence of a
for
Remuneration Committee
evaluating the remuneration of the Company’s
senior executives on an annual basis. A senior
these purposes, means Key
executive,
Management Personnel
the
(as defined
Corporations Act) other than a non-executive
Director.
responsible
for
in
is
(b)
The applicable processes for these evaluations can
be found in the Company’s Corporate Governance
Plan, which is available on the Company’s website.
The Company’s Corporate Governance Plan
requires the Company to disclose whether or not
performance evaluations were conducted during
the relevant reporting period. The Company intends
to complete performance evaluations in respect of
the senior executives for each financial year in
accordance with the applicable processes.
(a) The Company does not currently have a Nomination
Committee. The Company’s Nomination Committee
Charter provides for the creation of a Nomination
Committee (if it is considered it will benefit the
Company), with at least three members, a majority
of whom are independent Directors, and which
must be chaired by an independent Director.
(b) The Company does not have a Nomination
Committee as the Board considers the Company will
not currently benefit from
In
accordance with the Company’s Board Charter,
the Board carries out the duties that would ordinarily
be carried out by the Nomination Committee under
the Nomination Committee Charter, including the
following processes to address succession issues and
to ensure the Board has the appropriate balance of
its establishment.
18
CORPORATE GOVERNANCE
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
of
times
period,
(v) as at the end of each
the
reporting
the
number
committee met throughout
the
the
individual attendances of
the members at
those
meetings; or
period
and
(b)
if it does not have a nomination
committee, disclose that fact
and the processes it employs to
address Board succession issues
and to ensure that the Board
has the appropriate balance of
skills, experience, independence
and knowledge of the entity to
enable it to discharge its duties
and responsibilities effectively.
Recommendation 2.2
listed entity should have and
A
disclose a Board skill matrix setting out
the mix of skills and diversity that the
Board currently has or is looking to
achieve in its membership.
YES
Recommendation 2.3
A listed entity should disclose:
YES
(a) the names of
the Directors
considered by the Board to be
independent Directors;
(b) if a Director has an
Principles
association
interest,
position,
or
relationship of the type described
in Box 2.3 of the ASX Corporate
Governance
and
Recommendation (3rd Edition),
but the Board is of the opinion
that it does not compromise the
independence of the Director,
interest,
the nature of
position,
or
relationship in question and an
explanation of why the Board is of
that opinion; and
association
the
(c) the length of service of each
Director
skills, experience, independence and knowledge of
the entity to enable it to discharge its duties and
responsibilities effectively:
(i) devoting time at least annually to discuss Board
succession issues and updating the Company’s
Board skills matrix; and
(ii) all Board members being
involved
Company’s nomination process,
maximum extent permitted
Corporations Act and ASX Listing Rules.
to
under
in the
the
the
Plan),
the Nomination Committee Charter (in
the
Under
Company’s Corporate Governance
the
Nomination Committee (or, in its absence, the Board) is
required to prepare a Board skill matrix setting out the mix
of skills and diversity that the Board currently has (or is
looking to achieve) and to review this at least annually
against the Company’s Board skills matrix to ensure the
appropriate mix of skills and expertise is present to
facilitate successful strategic direction.
The Company has a Board skill matrix setting out the mix
of skills and diversity that the Board currently has or is
looking to achieve in its membership. A copy will be
made available in the Company’s next Annual Report.
The Board Charter requires the disclosure of each Board
member’s qualifications and expertise. Full details as to
each Director and senior executive’s relevant skills and
experience are available on the Company’s website.
(a) The Board Charter requires the disclosure of the
names of Directors considered by the Board to be
independent. The Company will disclose those
Directors it considers to be independent in its Annual
Report and on its ASX website. The Board considers
the following Directors are independent: Michael Fry
and Loren Jones.
(b) There are no independent Directors who fall into this
category. The Company will disclose in its Annual
Report and ASX website any instances where this
applies and an explanation of the Board’s opinion
why the relevant Director is still considered to be
independent.
(c)
The Company’s Annual Report will disclose the
length of service of each Director, as at the end of
each financial year.
19
CORPORATE GOVERNANCE
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Recommendation 2.4
A majority of the Board of a listed
independent
entity
Directors.
should
be
Recommendation 2.5
The Chair of the Board of a listed
entity should be an
independent
Director and, in particular, should not
be the same person as the CEO of
the entity.
Recommendation 2.6
A listed entity should have a program
for
inducting new Directors and
providing appropriate professional
development
for
continuing Directors to develop and
maintain the skills and knowledge
needed to perform their role as a
Director effectively.
opportunities
Principle 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should:
(a) have a code of conduct for its
Directors, senior executives and
employees; and
(b) disclose that code or a summary
of it.
YES
YES
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1
The Board of a listed entity should:
YES
(a) have an audit committee
which:
(i) has at least three members,
all of whom are non-
executive Directors and a
majority of whom are
independent Directors; and
(ii)
by
chaired
is
an
independent Director, who
is not
the
Board,
the Chair of
and disclose:
(iii)
charter
the
committee;
of
the
(iv) the
relevant qualifications
and experience of
the
members of the committee;
YES
The Company’s Board Charter requires that, where
practical,
should be
independent.
the majority of
the Board
The Board currently comprises a total of 3 directors, of
whom Michael Fry and Loren Jones are considered to be
independent. As
independent directors are
such,
currently an independent majority of the Board.
YES
The Board Charter provides that, where practical, the
Chair of the Board should be an independent Director
and should not be the CEO/Managing Director.
The Chair of the Company is an independent Director
and is the CEO/Managing Director.
In accordance with the Company’s Board Charter, the
Nominations Committee (or, in its absence, the Board) is
responsible for the approval and review of induction and
continuing professional development programs and
procedures
for Directors to ensure that they can
effectively discharge their responsibilities. The Company
Secretary is responsible for facilitating inductions and
professional development.
(a) The Company’s Corporate Code of Conduct
senior
the Company’s Directors,
applies
executives and employees.
to
(b) The Company’s Corporate Code of Conduct
(which forms part of the Company’s Corporate
Governance Plan) is available on the Company’s
website.
(a) The Company does not currently have an Audit and
Risk Committee.
The Company’s Corporate
Governance Plan contains an Audit and Risk
Committee Charter that provides for the creation of
an Audit and Risk Committee (if it is considered it will
benefit the Company), with at least three members,
a majority of whom must be independent Directors,
and which must be chaired by an independent
Director who is not the Chair.
(b) The Company does not have an Audit and Risk
Committee as the Board considers the Company
will not currently benefit from its establishment. In
accordance with the Company’s Board Charter,
the Board carries out the duties that would ordinarily
be carried out by the Audit and Risk Committee
under the Audit and Risk Committee Charter
including the following processes to independently
verify and safeguard the integrity of its financial
reporting,
the
appointment and removal of the external auditor
and the rotation of the audit engagement partner:
the processes
including
for
20
CORPORATE GOVERNANCE
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
(i)
the Board devotes time at annual Board
meetings to fulfilling the roles and responsibilities
associated with maintaining the Company’s
internal audit function and arrangements with
external auditors; and
(ii) all members of the Board are involved in the
Company’s audit function to ensure the proper
maintenance of the entity and the integrity of
all financial reporting.
YES
The Company’s Audit and Risk Committee Charter
requires the CEO and CFO (or, if none, the person(s)
fulfilling those functions) to provide a sign off on these
terms.
The Company intends to obtain a sign off on these terms
for each of its consolidated financial statements in each
financial year.
(b)
and
(v)
in relation to each reporting
period, the number of times
the
met
committee
throughout the period and
the individual attendances
of the members at those
meetings; or
if it does not have an audit
committee, disclose that fact
and the processes it employs
that independently verify and
safeguard the
its
financial reporting, including the
processes for the appointment
and removal of the external
auditor and the rotation of the
audit engagement partner.
integrity of
Recommendation 4.2
it approves
The Board of a listed entity should,
before
the entity’s
consolidated financial statements for
a financial period, receive from its
CEO and CFO a declaration that the
financial records of the entity have
been properly maintained and that
the consolidated financial statements
comply with
appropriate
accounting standards and give a true
and fair view of the financial position
and performance of the entity and
that the opinion has been formed on
the basis of a sound system of risk
internal control
management and
which is operating effectively.
the
Recommendation 4.3
that
A listed entity that has an AGM should
ensure
its external auditor
attends its AGM and is available to
answer questions from security holders
relevant to the audit.
YES
The Company’s Corporate Governance Plan provides
that the Board must ensure the Company’s external
auditor attends its AGM and is available to answer
questions from security holders relevant to the audit.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should:
YES
(a) have a written policy
for
complying with
its continuous
disclosure obligations under the
Listing Rules; and
(b) disclose
that policy or a
summary of it.
Principle 6: Respect the rights of security holders
(a) The Board Charter provides details of
In addition,
the
Company’s disclosure policy.
the
Corporate Governance Plan details the Company’s
disclosure requirements as required by the ASX
Listing Rules and other relevant legislation.
(b) The Corporate Governance
Plan, which
incorporates the Board Charter, is available on the
Company website.
Recommendation 6.1
A
listed entity
should provide
YES
Information about the Company and its governance is
available in the Corporate Governance Plan which can
21
CORPORATE GOVERNANCE
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
information about
governance
website.
to
itself and
investors via
its
its
be found on the Company’s website.
Recommendation 6.2
listed entity should design and
A
implement an
relations
program to facilitate effective two-
way communication with investors.
investor
Recommendation 6.3
A listed entity should disclose the
policies and processes it has in place
to
encourage
participation at meetings of security
holders.
facilitate
and
Recommendation 6.4
the option
A listed entity should give security
receive
holders
communications
send
communications to, the entity and its
security registry electronically.
from, and
to
YES
YES
YES
Principle 7: Recognise and manage risk
Recommendation 7.1
The Board of a listed entity should:
YES
(a) have
a
committees
each of which:
committee
to oversee
or
risk,
(i) has at least three members,
a majority of whom are
independent Directors; and
a
has
adopted
The Company
Shareholder
Communications Strategy which aims to promote and
facilitate effective
two-way communication with
investors. The Strategy outlines a range of ways in which
information is communicated to shareholders and is
available on the Company’s website as part of the
Company’s Corporate Governance Plan.
Shareholders are encouraged to participate at all
general meetings and AGMs of the Company. Upon the
despatch of any notice of meeting to Shareholders, the
Company Secretary shall send out material stating that
all Shareholders are encouraged to participate at the
meeting.
The Shareholder Communication Strategy provides that
security holders can register with the Company to
receive email notifications when an announcement is
made by the Company to the ASX, including the release
of the Annual Report, half yearly reports and quarterly
reports. Links are made available to the Company’s
website on which all information provided to the ASX is
immediately posted.
Shareholders queries should be referred to the Company
Secretary at first instance.
(a) The Company does not currently have an Audit and
Risk Committee.
The Company’s Corporate
Governance Plan contains an Audit and Risk
Committee Charter that provides for the creation of
an Audit and Risk Committee (if it is considered it will
benefit the Company), with at least three members,
a majority of whom must be independent Directors,
and which must be chaired by an independent
Director.
(ii)
chaired
is
independent Director,
by
an
(b) A copy of the Corporate Governance Plan is
and disclose:
(iii)
charter
the
committee;
(iv) the members
committee; and
of
the
of
the
(c)
of
times
period,
(v) as at the end of each
the
reporting
number
the
committee met throughout
the
the
individual attendances of
the members at
those
meetings; or
period
and
(b)
if
risk
it does not have a
committee or committees that
satisfy (a) above, disclose that
fact and the process it employs
available on the Company’s website.
The Company does not have an Audit and Risk
Committee as the Board consider the Company will
not currently benefit from
In
accordance with the Company’s Board Charter,
the Board carries out the duties that would ordinarily
be carried out by the Audit and Risk Committee
under the Audit and Risk Committee Charter
including the following processes to oversee the
entity’s risk management framework:
its establishment.
(i)
(ii)
the Board devotes time at quarterly Board
meetings to fulfilling the roles and responsibilities
associated with overseeing risk and maintaining
the entity’s risk management framework and
associated internal compliance and control
procedures; and
the Board has required management to design
and implement risk management and internal
control systems to manage the Company’s
22
CORPORATE GOVERNANCE
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
for overseeing the entity’s risk
management framework.
Recommendation 7.2
The Board or a committee of the
Board should:
YES
(a)
entity’s
risk
review
the
framework with
management
management at least annually
to satisfy itself that it continues to
be sound; and
(b) disclose
in
relation
to each
reporting period, whether such a
review has taken place.
Recommendation 7.3
A listed entity should disclose:
YES
(a)
(b)
it has an
if
function, how the function
structured and what
role
performs; or
internal audit
is
it
if it does not have an internal
audit function, that fact and the
it
processes
for
evaluating
continually
and
improving the effectiveness of its
risk management and internal
control processes.
employs
Recommendation 7.4
A listed entity should disclose whether
it has any material exposure
to
economic, environmental and social
sustainability risks and, if it does, how it
manages or intends to manage those
risks.
YES
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The Board of a listed entity should:
YES
(a) have a remuneration committee
which:
(i) has at least three members,
a majority of whom are
independent Directors; and
(ii)
chaired
is
independent Director,
by
an
and disclose:
risks and has
material business
required
management to report to it on whether those
risks are being managed effectively; and
the Chief Executive Officer reports to the Board
as to the effectiveness of the Company’s
management of its material business risks.
(iii)
(a) The Audit and Risk Committee Charter requires that
the Audit and Risk Committee (or, in its absence, the
Board) should, at least annually, satisfy itself that the
Company’s risk management framework continues
to be sound.
(b) The Company’s Corporate Governance Plan
requires the Company to disclose at least annually
whether such a review of the Company’s risk
management framework has taken place.
(a) The Audit and Risk Committee Charter provides for
the Audit and Risk Committee to monitor the need
for an internal audit function.
(b) The Company does not have an internal audit
function. The Audit and Risk Committee evaluates
and looks to continually approve the effectiveness
of the Company’s risk management and internal
control processes as set out in the duties and
responsibilities of the Audit and Risk Committee
Charter (contained in the Corporate Governance
Plan available on the Company’s website).
The Audit and Risk Committee Charter requires the Audit
and Risk Committee (or, in its absence, the Board) to
assist management determine whether the Company
has any material exposure to economic, environmental
and social sustainability risks and, if it does, how it
manages or intends to manage those risks.
to economic, environmental and
The Company’s Corporate Governance Plan requires the
it has any material
Company to disclose whether
exposure
social
sustainability risks and, if it does, how it manages or
intends to manage those risks. The Company will disclose
this information in its Annual Report and on its ASX
website as part of its continuous disclosure obligations.
(a) The Company does not currently have a
The Company’s
Remuneration Committee.
Corporate Governance
a
contains
Remuneration Committee Charter that provides for
the creation of a Remuneration Committee (if it is
considered it will benefit the Company), with at
least three members, a majority of whom must be
independent Directors, and which must be chaired
by an independent Director.
Plan
(b) The Company does not have a Remuneration
Committee as the Board considers the Company
23
CORPORATE GOVERNANCE
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
will not currently benefit from its establishment. In
accordance with the Company’s Board Charter,
the Board carries out the duties that would ordinarily
be carried out by the Remuneration Committee
under
the Remuneration Committee Charter
including the following processes to set the level
and composition of remuneration for Directors and
such
senior executives and ensuring
remuneration is appropriate and not excessive:
that
(i)
(ii)
(iii)
for Directors and
the Board devotes time at the annual Board
meeting to assess the level and composition of
senior
remuneration
executives;
the Company has not adopted any schemes
for retirement benefits;
the
total maximum
remuneration of non-
the
is
executive Directors
Constitution and subsequent variation is by
ordinary
in
general meeting; and
the shareholders
initially set by
resolution of
(iv) the determination of non-executive Directors’
remuneration within the maximum amount
fixed will be made by the Board having regard
to the inputs and value to the Company or the
respective contributions be each non-
executive Director.
YES
The Company’s Corporate Governance Plan requires the
Board to disclose its policies and practices regarding the
remuneration of Directors and senior executives, which is
disclosed on the Company’s website.
(iii)
charter
the
committee;
(iv) the members
committee; and
of
the
of
the
of
times
period,
(v) as at the end of each
the
reporting
the
number
committee met throughout
the
the
individual attendances of
the members at
those
meetings; or
period
and
(b)
not
fact and
have a
if
it does
committee,
remuneration
disclose
the
that
processes it employs for setting
the level and composition of
remuneration for Directors and
senior executives and ensuring
that
is
appropriate and not excessive.
remuneration
such
Recommendation 8.2
and
should
listed entity
separately
A
disclose
its policies and practices
regarding the remuneration of non-
executive
the
Directors
remuneration of executive Directors
and other senior executives and
ensure that the different roles and
non-executive
responsibilities
of
Directors compared
to executive
Directors and other senior executives
are
level and
in
composition of their remuneration.
reflected
the
Recommendation 8.3
A listed entity which has an equity-
based remuneration scheme should:
YES
(a) have a policy on whether
participants are permitted to
enter into transactions (whether
through the use of derivatives or
the
otherwise) which
economic risk of participating in
the scheme; and
limit
(b) disclose
that policy or a
summary of it.
(a) The Company does not have an equity based
remuneration scheme. The Company does not
have a policy on whether participants are
(whether
into
permitted
through the use of derivatives or otherwise) which
limit the economic risk of participating
in the
scheme.
transactions
to enter
24
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015
Interest revenue
Other revenue
Amortisation, depreciation, depletion and rehabilitation expense
Other expenses
Employee related expenses
Share based payments
Finance costs
Consultants fees
Compliance and registry expenses
Administrator expenses
GGH fixed charge reclaim
Writeoff of fixed assets
Writeoff of assets not collectable
Residual of administration writeoffs
Project expense
Options valuation expense
Gain/(loss) on foreign exchange movement
Loss before income tax expense
Income tax expense
Net loss for the year from continuing operations
Discontinued operations
Net loss for the year from discontinued operations
Net loss for the year
Other comprehensive income
Items that will be reclassified subsequently to profit and loss:
Foreign exchange gain/(loss) reclassified to profit and loss
Other comprehensive loss for the year net of taxes
Notes
For the year
ended
31 Dec 2015
$
For the year
ended
31 Dec 2014
$
2.A
2.A
2.B
2.C
22
2.D
7
3
7,424
22,269
18,451
-
-
(182,012)
(110,000)
-
-
(158,907)
(128,106)
-
-
(4,149)
(33,067)
387,191
(131,006)
(1,913,231)
(5,378)
(659,921)
(1,111,821)
6,690,615
(3,385)
(194,530)
(433,821)
(41,656)
(119,204)
-
-
-
-
-
2,598
(22,569,487)
(2,240,996)
(18,429,937)
-
-
(2,240,996)
(18,429,937)
-
(192,260,954)
(2,240,996)
(210,691,091)
-
-
(730,317)
(730,317)
Total comprehensive loss for the year
(2,240,996)
(211,421,408)
Earnings/(Loss) Per Share
Basic and diluted loss per share (cents)
16
(0.20)
(42.53)
The accompanying notes form part of these consolidated financial statements.
25
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Investments
Plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Notes
As at
31 Dec 2015
$
As at
31 Dec 2014
$
5
6
7
8
9
1,858,994
69,881
1,928,875
-
-
-
1,928,875
-
47,624
47,624
-
4,149
4,149
51,773
69,376
69,376
69,376
817,738
817,738
817,718
1,859,499
(765,965)
10
12
11
218,405,878
215,487,649
1,948,231
-
(218,494,610)
(216,253,614)
1,859,499
(765,965)
The accompanying notes form part of these consolidated financial statements.
26
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 30 JUNE 2015
Issued
Capital
Accumulated
Losses
Note
$
$
Share
Based
Payment
Reserve
$
Foreign
Currency
Translation
Reserve
$
Total
$
215,487,649
(51,306,644)
5,705,039
731,806
175,492,712
- (202,685,965)
-
32,383,835
- (170,302,130)
-
-
-
-
-
-
-
-
437,862,388
(5,705,039)
-
215,487,649 (216,253,614)
215,487,649 (216,253,614)
-
-
(2,240,996)
(2,240,996)
3,149,979
-
(231,750)
-
-
-
-
-
-
-
-
1,948,231
-
-
-
-
-
-
-
- (202,685,965)
(731,806)
(690)
(731,806)
(192,007)
-
-
-
-
-
-
-
-
-
-
-
-
-
30,567
-
-
(6,041)
1,205
(765,965)
(765,965)
(2,240,996)
(2,240,996)
3,149,979
1,948,231
(231,750)
1,859,499
BALANCE AT 1 JANUARY 2014
Loss for the period
Foreign exchange loss reclassified
to profit and loss from equity
reserve from prior period
Total comprehensive loss for the
period
Foreign exchange loss reclassified
to profit and loss from equity
reserve
Shares issued during the period
Capital raising costs
Expired and cancelled options
and performance rights
Recognition of share based
payments
BALANCE AT 31 DECEMBER 2014
BALANCE AT 1 JANUARY 2015
Loss for the period
Total comprehensive loss for the
period
Shares issued during the period
Options issued during the period
Capital raising costs
BALANCE AT 31 DECEMBER 2015
218,405,878 (218,494,610)
1,948,231
The accompanying notes form part of these consolidated financial statements.
27
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 30 JUNE 2015
For the year
ended
31 Dec 2015
$
For the year
ended
31 Dec 2014
$
Note
CASH FLOWS USED IN OPERATING ACTIVITIES
Receipts from sales
Payments to suppliers and employees
Interest received
Settlement of DOCA
NET CASH PROVIDED BY OPERATING ACTIVITIES
13.A
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for projects
Proceeds from sale of property, plant and equipment
Payments for exploration activities
Payments for development activities
Payments for property, plant and equipment
Payments for acquisition of oil and gas properties
NET CASH (USED IN) INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and options
Transaction costs on issue of shares
Proceeds from borrowings
Repayments of borrowings
Borrowing costs, including capitalised finance fees
NET CASH PROVIDED BY FINANCING ACTIVITIES
NET INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS
-
48,928,769
(185,359)
(31,032,777)
7,424
(737,892)
(915,827)
21,194
-
17,917,186
(131,006)
-
-
-
-
-
-
12,889,886
(2,733,718)
(45,902,697)
(2,856,322)
(6,716,373)
(131,006)
(45,319,224)
3,134,979
(231,750)
-
-
-
-
-
8,860,339
-
(19,854,467)
2,903,229
(10,994,128)
1,856,396
(38,396,166)
Cash at beginning of the period
Effect of exchange rates on cash
CASH AT END OF PERIOD
-
38,531,033
2,598
(134,867)
13.B
1,858,994
-
The accompanying notes form part of these consolidated financial statements.
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1.A Basis of preparation
The financial report includes the consolidated financial statements and notes of Brookside Energy
Limited (BRK) and its subsidiary, the “Group” or “Consolidated Group”.
The consolidated financial report is a general-purpose financial report, which has been prepared in
accordance with the Corporations Act 2001, Australian Accounting Standards and Interpretations,
and complies with other requirements of the law.
1.A.1 Functional and presentation currency
The consolidated financial statements are presented in Australian dollars (AUD$), which is the
Group’s presentation currency unless otherwise stated.
1.A.2 Accounting policies
The same accounting policies and methods of computation have been followed in this
consolidated financial report as were applied in the most recent annual financial statements,
except in relation to currency. Prior reporting periods have been reported in US dollars. This report
and its comparative data have been reported in Australian dollars.
1.A.3 Limitation of scope of comparative figures
On 8 December 2014, Clifford Rocke, Martin Madden and David Winterbottom of KordaMentha Pty
Ltd were appointed as Receivers and Managers (“R&M”) of certain assets of the Company under
the terms of the security provided to Guggenheim Corporate Funding LLC “Guggenheim”.
On 10 December 2014, Red Fork Energy Limited’s (Subject to Deed of Company Arrangement)
(Receivers and Managers Appointed) (to be renamed Brookside Energy Limited) securities were
suspended from quotation on the Australian Securities Exchange (ASX). On 10 December 2014, the
Directors of the Company resolved to place the Company in voluntary administration and
appointed Messrs Martin Jones, Darren Weaver and Benjamin Johnson of Ferrier Hodgson as joint
and several administrators of the Company.
To prepare the financial report as at 31 December 2014, the Directors obtained the financial records
of the Group using data extracted from the Group’s accounting system for the entire financial year.
However as a consequence of the receiver’s appointment, there may be source documentation
information that the current Directors have not been able to obtain for audit purposes.
Consequently, although the Directors have prepared the financial report as at 31 December 2014,
to the best of their knowledge based on the information made available to them, they are of the
opinion that it is not possible to state that this financial report has been prepared in accordance with
including Australian interpretations, other authoritative
the Australian Accounting Standards
pronouncements of the Australian Accounting Standard Board and the Corporations Act 2001, nor is
it possible to state this financial report gives a true and fair view of the Group’s financial position as
at 31 December 2014 and for the year then ended.
1.A.4 Going Concern
The Group incurred a loss of $2,240,996 for the year ended 31 December 2015. In addition the Group
has net current assets of $1,859,499. Cash and cash equivalents at the year-end amounted to $1.86
million.
29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
As disclosed in note 4 there is a potential for a tax liability to arise as a result of the finalisation of the
work required to prepare the 30 June 2015 income tax return for lodgement. However, the Directors,
from a preliminary review of the transactions, are of the view that the Group will not be in a tax
payable position and this will only be confirmed on the completion of the work and on lodgement of
the income tax returns.
If a potential tax liability arises, the Group will need to fund this liability and its ongoing investments
and working capital requirements. This uncertainty may cast doubt as to whether or not the Group
will be able to continue as a going concern and whether it will realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial statements.
Based upon the position as described above, the Group’s cash flow forecast indicates that the
Group will have sufficient cash flows to meet all commitments and working capital requirements for
a period of at least 12 months from the date of signing the financial report. Accordingly the Directors
are satisfied that the going concern basis of preparation is appropriate.
1.B
Adoption of new and revised standards
Effective date
(FY reporting
on or after 31
Dec 2015)
Likely impact
on initial
application
1 January 2018 When this
standard is first
adopted for the
year ending
31 December
2018, there will be
no material
impact on the
transactions and
balances
recognised in the
financial
statements.
New/revised
pronouncement
AASB 9 Financial
Instruments
(December
2014)
[Also refer to
AASB 2013-9
and
AASB 2014-1
below]
Nature of change
AASB 9 introduces new requirements for the classification
and measurement of financial assets and liabilities.
These requirements improve and simplify the approach
for classification and measurement of financial assets
compared with the requirements of AASB 139. The main
changes are:
a financial assets that are debt instruments will be
classified based on: (i) the objective of the entity’s
business model for managing the financial assets;
and (ii) the characteristics of the contractual cash
flows
b allows an irrevocable election on initial recognition to
present gains and losses on investments in equity
instruments that are not held for trading in other
comprehensive income (instead of in profit or loss).
Dividends in respect of these investments that are a
return on investment can be recognised in profit or
loss and there is no impairment or recycling on
disposal of the instrument
introduces a ‘fair value through other comprehensive
income’ measurement category for particular simple
debt instruments
c
d financial assets can be designated and measured at
fair value through profit or loss at initial recognition if
doing so eliminates or significantly reduces a
measurement or recognition inconsistency that would
arise from measuring assets or liabilities, or recognising
the gains and losses on them, on different bases
e where the fair value option is used for financial
liabilities the change in fair value is to be accounted
for as follows:
the change attributable to changes in credit risk
are presented in other comprehensive income
(OCI)
the remaining change is presented in profit or loss
30
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
New/revised
pronouncement
Nature of change
Effective date
(FY reporting
on or after 31
Dec 2015)
Likely impact
on initial
application
AASB 9 Financial
Instruments
(December
2014)
continued
AASB 14
Regulatory
Deferral
Accounts
AASB 15
Revenue from
Contracts with
Customers
If this approach creates or enlarges an accounting
mismatch in the profit or loss, the effect of the changes in
credit risk are also presented in profit or loss.
Otherwise, the following requirements have generally
been carried forward unchanged from AASB 139 into
AASB 9:
classification and measurement of financial
liabilities; and
derecognition requirements for financial assets
and liabilities.
AASB 9 requirements regarding hedge accounting
represent a substantial overhaul of hedge accounting
that enable entities to better reflect their risk
management activities in the financial statements.
Furthermore, AASB 9 introduces a new impairment model
based on expected credit losses. This model makes use
of more forward-looking information and applies to all
financial instruments that are subject to impairment
accounting.
AASB 14 permits first-time adopters of Australian
Accounting Standards who conduct rate-regulated
activities to continue to account for amounts related to
rate regulation in accordance with their previous GAAP.
Accordingly, an entity that applies AASB 14 may
continue to apply its previous GAAP accounting policies
for the recognition, measurement, impairment and
derecognition of its regulatory deferral account
balances. This exemption is not available to entities who
already apply Australian Accounting Standards.
AASB 15:
replaces AASB 118 Revenue, AASB 111 Construction
Contracts and some revenue-related Interpretations:
establishes a new revenue recognition model
changes the basis for deciding whether revenue is to
be recognised over time or at a point in time
provides new and more detailed guidance on
specific topics (e.g., multiple element arrangements,
variable pricing, rights of return, warranties and
licensing)
expands and improves disclosures about revenue
In the Australian context, AASB 15 will apply to contracts
of not-for-profit (NFP) entities that are exchange
transactions. AASB 1004 Contributions will continue to
apply to non-exchange transactions until the Income
from Transactions of NFP Entities Project is completed
(with an Exposure Draft inviting public comment on those
proposals targeted for issue in Q1 2015).
1 January 2016 When AASB 14
becomes
effective for the
first time for the
year ending 31
December 2016,
it will not have
any impact on
the entity.
1 January 2017 When this
Standard is first
adopted for the
year ending
31 December
2017, there will be
no material
impact on the
transactions and
balances
recognised in the
financial
statements.
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
New/revised
pronouncement
AASB 2014-1
Amendments to
Australian
Accounting
Standards (Part
D:
Consequential
Amendments
arising from
AASB 14)
AASB 2014-3
Amendments to
Australian
Accounting
Standards –
Accounting for
Acquisitions of
Interests in Joint
Operations
AASB 2014-4
Amendments to
Australian
Accounting
Standards –
Clarification of
Acceptable
Methods of
Depreciation
and
Amortisation
Nature of change
Part D of AASB 2014-1 makes consequential
amendments arising from the issuance of AASB 14.
The amendments to AASB 11 state that an acquirer of an
interest in a joint operation in which the activity of the
joint operation constitutes a ‘business’, as defined in
AASB 3 Business Combinations, should:
apply all of the principles on business combinations
accounting in AASB 3 and other Australian
Accounting Standards except principles that conflict
with the guidance of AASB 11. This requirement also
applies to the acquisition of additional interests in an
existing joint operation that results in the acquirer
retaining joint control of the joint operation (note that
this requirement applies to the additional interest only,
i.e., the existing interest is not remeasured) and to the
formation of a joint operation when an existing
business is contributed to the joint operation by one of
the parties that participate in the joint operation; and
provide disclosures for business combinations as
required by AASB 3 and other Australian Accounting
Standards.
The amendments to AASB 116 prohibit the use of a
revenue-based depreciation method for property, plant
and equipment. Additionally, the amendments provide
guidance in the application of the diminishing balance
method for property, plant and equipment.
The amendments to AASB 138 present a rebuttable
presumption that a revenue-based amortisation method
for intangible assets is inappropriate. This rebuttable
presumption can be overcome (i.e., a revenue-based
amortisation method might be appropriate) only in two
(2) limited circumstances:
i
the intangible asset is expressed as a measure of
revenue, for example when the predominant limiting
factor inherent in an intangible asset is the
achievement of a revenue threshold (for instance,
the right to operate a toll road could be based on a
fixed total amount of revenue to be generated from
cumulative tolls charged); or
ii when it can be demonstrated that revenue and the
consumption of the economic benefits of the
intangible asset are highly correlated.
Effective date
(FY reporting
on or after 31
Dec 2015)
Likely impact
on initial
application
1 January 2016 When these
amendments
become
effective for the
first time for the
year ending 31
December 2016,
they will not have
any impact on
the entity.
1 January 2016 When these
amendments are
first adopted for
the year ending
31 December
2016, there will be
no material
impact on the
transactions and
balances
recognised in the
financial
statements.
1 January 2016 When these
amendments are
first adopted for
the year ending
31 December
2016, there will be
no material
impact on the
transactions and
balances
recognised in the
financial
statements.
32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
New/revised
pronouncement
AASB 2014-5
Amendments to
Australian
Accounting
Standards
arising from
AASB 15
AASB 2014-6
Amendments to
Australian
Accounting
Standards –
Agriculture:
Bearer Plants
AASB 2014-7
Amendments to
Australian
Accounting
Standards
arising from
AASB 9
(December
2014)
AASB 2014-9
Amendments to
Australian
Accounting
Standards –
Equity Method
in Separate
Financial
Statements
Nature of change
AASB 2014-5 incorporates the consequential
amendments arising from the issuance of AASB 15.
AASB 2014-6 defines bearer plants and requires bearer
plants to be accounted for as property, plant and
equipment within the scope of AASB 116 Property, Plant
and Equipment instead of AASB 141 Agriculture.
Effective date
(FY reporting
on or after 31
Dec 2015)
Likely impact
on initial
application
1 January 2017 Refer to the
section on AASB
15 above.
1 January 2016 When these
amendments are
first adopted for
the year ending
31 December
2016, there will be
no material
impact on the
financial
statements.
AASB 2014-7 incorporates the consequential
amendments arising from the issuance of AASB 9.
1 January 2018 Refer to the
section on AASB 9
above.
The amendments introduce the equity method of
accounting as one of the options to account for an
entity’s investments in subsidiaries, joint ventures and
associates in the entity’s separate financial statements.
1 January 2016 When these
amendments are
first adopted for
the year ending
31 December
2016, there will be
no material
impact on the
financial
statements.
33
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
New/revised
pronouncement
AASB 2014-10
Amendments to
Australian
Accounting
Standards – Sale
or Contribution
of Assets
between an
Investor and its
Associate or
Joint Venture
AASB 2015-1
Amendments to
Australian
Accounting
Standards –
Annual
Improvements
to Australian
Accounting
Standards 2012-
2014 Cycle
Nature of change
The amendments address a current inconsistency
between AASB 10 Consolidated Financial Statements
and AASB 128 Investments in Associates and Joint
Ventures (2011).
The amendments clarify that, on a sale or contribution of
assets to a joint venture or associate or on a loss of
control when joint control or significant influence is
retained in a transaction involving an associate or a joint
venture, any gain or loss recognised will depend on
whether the assets or subsidiary constitute a business, as
defined in AASB 3 Business Combinations. Full gain or loss
is recognised when the assets or subsidiary constitute a
business, whereas gain or loss attributable to other
investors’ interests is recognised when the assets or
subsidiary do not constitute a business.
This amendment effectively introduces an exception to
the general requirement in AASB 10 to recognise full gain
or loss on the loss of control over a subsidiary. The
exception only applies to the loss of control over a
subsidiary that does not contain a business, if the loss of
control is the result of a transaction involving an
associate or a joint venture that is accounted for using
the equity method. Corresponding amendments have
also been made to AASB 128 (2011).
These amendments arise from the issuance of Annual
Improvements to IFRSs 2012-2014 Cycle in September
2014 by the IASB.
Among other improvements, the amendments clarify
that when an entity reclassifies an asset (or disposal
group) directly from being held for sale to being held for
distribution (or vice-versa), the accounting guidance in
paragraphs 27-29 of AASB 5 Non-current Assets Held for
Sale and Discontinued Operations does not apply. The
amendments also state that when an entity determines
that the asset (or disposal group) is no longer available
for immediate distribution or that the distribution is no
longer highly probable, it should cease held-for-
distribution accounting and apply the guidance in
paragraphs 27-29 of AASB 5.
Effective date
(FY reporting
on or after 31
Dec 2015)
Likely impact
on initial
application
1 January 2016 When these
amendments are
first adopted for
the year ending
31 December
2016, there will be
no material
impact on the
financial
statements.
1 January 2016 When these
amendments are
first adopted for
the year ending
31 December
2016, there will be
no material
impact on the
financial
statements.
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
Nature of change
The Standard makes amendments to AASB 101
Presentation of Financial Statements arising from the
IASB’s Disclosure Initiative project.
The amendments:
• clarify the materiality requirements in AASB 101,
including an emphasis on the potentially detrimental
effect of obscuring useful information with immaterial
information
• clarify that AASB 101’s specified line items in the
statement(s) of profit or loss and other comprehensive
income and the statement of financial position can be
disaggregated
• add requirements for how an entity should present
subtotals in the statement(s) of profit and loss and other
comprehensive income and the statement of financial
position
• clarify that entities have flexibility as to the order in
which they present the notes, but also emphasise that
understandability and comparability should be
considered by an entity when deciding that order
• remove potentially unhelpful guidance in AASB
The Standard completes the AASB’s project to remove
Australian guidance on materiality from Australian
Accounting Standards.
New/revised
pronouncement
AASB 2015-2
Amendments to
Australian
Accounting
Standards –
Disclosure
Initiative:
Amendments to
AASB 101
AASB 2015-3
Amendments to
Australian
Accounting
Standards
arising from the
Withdrawal of
AASB 1031
Materiality
Effective date
(FY reporting
on or after 31
Dec 2015)
Likely impact
on initial
application
1 January 2016 When these
amendments are
first adopted for
the year ending
31 December
2016, there will be
no material
impact on the
financial
statements.
1 July 2015 When this
Standard is first
adopted for the
year ending 31
December 2016,
there will be no
impact on the
financial
statements.
1.C Statement of compliance
The general purpose consolidated financial statements for the period ended 31 December 2015
were approved and authorised for issue on 01 April 2016.
The consolidated financial statements of the Company have been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board. Compliance with
Australian Accounting Standards results in full compliance with the International Financial Reporting
Standards (IRFS) as issued by the International Accounting Standards Board (IASB).
1.D Basis of preparation
The consolidated financial statements have been prepared on the basis of historical costs. Cost is
based on the fair values of the consideration given in exchange for assets. All amounts are
presented in Australian dollars, unless otherwise noted
The accounting policies and methods of computation adopted in the preparation of the half-year
financial report are consistent with those adopted and disclosed in the Group’s annual financial
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
report for the year ended 31 December 2015, except in relation to the matters disclosed below.
These accounting policies are consistent with Australian Accounting Standards and with
International Financial Reporting Standards.
1.E Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Brookside Energy Limited as at 31 December 2015 and the results its subsidiary for the year then
ended. Brookside Energy Limited and its subsidiary together are referred to in these consolidated
financial statements as the 'group'.
Subsidiaries are all those 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 de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence
of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A
change in ownership interest, without the loss of control, is accounted for as an equity transaction,
where the difference between the consideration transferred and the book value of the share of the
non-controlling interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement
of comprehensive income, statement of financial position and statement of changes in equity of the
Group. Losses incurred by the Group are attributed to the non-controlling interest in full, even if that
results in a deficit balance.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation
differences recognised in equity. The Group recognises the fair value of the consideration received
and the fair value of any investment retained together with any gain or loss in profit or loss.
1.F Income Tax
The income tax expense for the reporting period is the tax payable on the current financial year’s
taxable income based on the income tax rate adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and
their carrying amounts in the consolidated financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected
to apply when the assets are recovered or liabilities are settled, based on those tax rates which are
enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the
cumulative amounts of deductible and taxable temporary differences to measure the deferred tax
asset or liability. An exception is made for certain temporary differences arising from the initial
recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction, other than a business combination, that at the
time of the transaction did not affect either accounting profit or taxable profit or loss.
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only
if it is probable that future taxable amounts will be available to utilise those temporary differences
and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying
amount and tax bases of investments in controlled entities where the parent entity is able to control
the timing of the reversal of the temporary differences and it is probable that the differences will not
reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
1.G Trade and Other Payables
Trade payables and other accounts payable are recognised when the entity becomes obliged to
make future payments resulting from the purchase of goods and services. Amounts are unsecured
and are usually paid within 30 to 45 days of recognition.
1.H Cash and Cash Equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk
of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the
statement of financial position.
For the purpose of the Statement of Cash Flows, cash includes on hand and other funds held at call
net of bank overdrafts.
1.I Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount
of GST incurred is not recoverable from the Australian Tax Office (“ATO”). 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.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or
liability in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of
cash flows arising from investing and financing activities which are recoverable from, or payable to,
the ATO are classified as operating cash flows.
1.J Earnings Per Share
The Group presents basic earnings per share (“EPS”) data for its ordinary shares. Basic earnings per
share is calculated as net earnings attributable to members, adjusted to exclude costs of servicing
equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted
for any bonus element.
1.K Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at original
invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is
made when collection of the full amount is no longer probable. Bad debts are written off when
identified.
Receivables from related parties are recognised and carried at the nominal amount due.
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
1.L Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the
Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in
equity as a reduction of the share proceeds received.
1.M Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
entity and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised:
(i)
Interest revenue is recognised when control of the right to receive the interest payment.
1.N Employee Benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up
to the reporting date. These benefits include wages and salaries, annual leave, sick leave and long
service leave.
Liabilities arising in respect of wages and salaries, annual leave, sick leave and other employee
benefits expected to be settled wholly within twelve months of the reporting date are measured at
their undiscounted nominal amounts based on remuneration rates which are expected to be paid
when the liability is settled. Employee benefits that are expected to be settled later than one year
(including any annual leave entitlements which are not used within one year) are measured at the
present value of the estimated future cash flows.
Employee benefits expenses and revenues arise in respect of the following categories:
•
•
Employment expenses comprise wages and salary payments non-monetary benefits, annual
leave, sick leave and other leave benefits; and
other types of employee benefits are recognised against earnings on a net basis in their
respective categories.
1.O
Exploration and development expenditure
Exploration, evaluation and development expenditures incurred are capitalised in respect of each
identifiable area of interest. These costs are only capitalised to the extent that they are expected to
be recovered through the successful development of the area or where activities in the area have
not yet reached a stage that permits reasonable assessment of the existence of economically
recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year
in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are
amortised over the life of the area according to the rate of depletion of the economically
recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of
continuing to capitalise costs in relation to that area of interest.
Costs of site restoration are provided for over the life of the project from when exploration
commences and are included in the costs of that stage. Site restoration costs include the
dismantling and removal of mining plant, equipment and building structures, waste removal, and
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
rehabilitation of the site in accordance with local laws and regulations and clauses of the permits.
Such costs have been determined using estimates of future costs, current legal requirements and
technology on an undiscounted basis. Any changes in the estimates for the costs are accounted for
on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the
nature and extent of the restoration due to community expectations and future legislation.
Accordingly the costs have been determined on the basis that the restoration will be completed
within one year of abandoning the site.
1.P Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the
entity becomes a party to the contractual provisions of the instrument.
Financial instruments are initially measured at fair value plus transactions costs where the instrument
is not classified at fair value through profit or loss. Transaction costs related to instruments classified
at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments
are classified and measured as set out below.
Derecognition
Financial assets are derecognised when the contractual right to receipt of cash flows expires or the
asset is transferred to another party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised
when the related obligations are either discharged, cancelled or expire. The difference between
the carrying value of the financial liability extinguished or transferred to another party and the fair
value of the consideration paid, including the transfer of non-cash assets or liabilities assumed, is
recognised in profit or loss.
(i)
(ii)
Receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market and are subsequently measured at amortised cost using the
effective interest rate method.
Loans and borrowings are non-derivative financial liabilities and are initially recognised at the
fair value of the consideration received less directly attributable transaction costs. After initial
recognition, interest-bearing loans and borrowings are subsequently measured at amortised
cost using the effective interest rate method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as through the effective interest rate
amortisation process.
1.Q
Share-Based Payment Transactions
Equity settled transactions
The Group has a Performance Rights Plan which provides equity based awards to Key Management
Personnel and employees. The Remuneration Committee (or, in its absence, or if one has not yet
been established, the Board) approves the grant of such Performance Rights as incentives to attract
and maintain the long term commitment of executives to the Group.
The cost of the awards are measured by reference to the fair value of the equity instrument on the
grant date and they are amortised as an expense in profit or loss over the period in which the
performance and service conditions are fulfilled (vesting) period.
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects
(i)
the extent to which the vesting period has expired; and
(ii)
the Entity’s best estimate of the number of equity instruments that will ultimately vest.
No adjustment is made for the likelihood of market performance conditions being met as the effect
of these conditions is included in the determination of fair value at grant date. The profit or loss
charge or credit for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
only conditional upon a market condition.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new
award is substituted for the cancelled award and designated as a replacement award on the date
that it is granted, the cancelled and new award are treated as if they were a modification of the
original award, as described in the previous paragraph.
1.R
Significant accounting estimates, assumptions and judgements
The preparation of the consolidated financial statements requires the Group’s management to
make estimates and assumptions that affect the reported amounts of assets and liabilities. The
determination of estimates requires the exercise of judgment based on various assumptions and
other factors such as historical experience, current and expected economic conditions. Actual
results could differ from those estimates.
The more significant areas requiring the use of management estimates and assumptions relate to
impairment calculations, production assets and restoration provisions. Estimates and judgments are
continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
The estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of the assets and liabilities within the next financial year are discussed below.
Share-based Payments
The Group’s policy for stock based compensation is discussed in Note 1.Q. The application of this
policy requires the Directors to make certain estimates and assumptions as to future events and
circumstances relating to the stock’s vesting.
1.S
Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are
presented in Australian dollars, which is the parent entity’s functional currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at
the exchange rate at the date of the transaction. Non-monetary items measured at fair value are
reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss,
except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in
other comprehensive income to the extent that the underlying gain or loss is recognised in other
comprehensive income; otherwise the exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations, whose functional currency is different from
the Group’s presentation currency, are translated as follows:
•
•
•
assets and liabilities are translated at exchange rates prevailing at the end of the reporting
period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the
transaction.
Exchange differences arising on translation of foreign operations with functional currencies other
than Australian dollars are recognised in other comprehensive income and included in the foreign
currency translation reserve in the statement of financial position. These differences are recognised
in profit or loss in the period in which the operation is disposed of.
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
2.
REVENUES AND EXPENSES
2.A
Revenue
Other Revenue
Interest received
Other received
2.B Amortisation, depreciation and rehabilitation expense
Depreciation expense
2.C Other expenses
Administration expenses
Consultants’ fees
Compliance and share registry fees
Travel expenses
Occupancy expenses
Other expenses
2.D
Finance costs
Interest expense
Year ended
31 Dec 2015
$
Year ended
31 Dec 2014
$
7,424
22,269
29,693
-
-
5,542
52,160
-
90,914
-
33,395
182,012
18,451
-
18,451
5,378
5,378
15,359
194,530
433,821
463,184
89,624
91,754
1,288,272
-
-
3,385
3,385
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
3.
INCOME TAX EXPENSE
The components of tax expense comprise:
Current tax
Deferred tax
The prima facie tax benefit on loss from ordinary
activities before income tax is reconciled to the income
tax as follows:
Prima facie tax benefit on loss from ordinary activity
before income tax at 30% (31 December 2014: 30%)
Add tax effect of:
Discontinued operations
Foreign exchange
Other non-allowable items
Losses not recognised
Other deferred tax balances not recognised
Less tax effect of:
Equity based payments
Losses recognised not previously brought to account
Income tax expense
4.
DEFERRED TAX
4.A Unrecognised deferred tax assets
Carry forward revenue losses
Provisions and accruals
Capital raising
Other
Year ended
31 Dec 2015
$
Year ended
31 Dec 2014
$
-
-
-
-
-
-
(672,299)
(63,426,422)
-
-
664,947
120,812
-
113,460
-
113,460
-
58,037,922
6,764,697
457,680
446,193
97,168
2,007,185
2,377,238
-
-
2,407,357
7,032
35,361
1,294
2,451,044
2,286,544
119,616
-
2,769
2,408,929
The tax benefits of the above deferred tax assets will only be obtained if:
(a)
(b)
(c)
the company derives future assessable income of a nature and of an amount sufficient to
enable the benefits to be utilised;
the company continues to comply with the conditions for deductibility imposed by law; and
no changes in income tax legislation adversely affect the company in utilising the benefits.
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
4.
DEFERRED TAX (CONTINUED)
As a result of the completion of the DOCA during the financial year ended 31 December
2015 and the comparable incomplete accounts at 31 December 2014 (refer to Annual
Financial Report 31 December 2014), the resulting tax consequences from the disposal of the
US subsidiaries are yet to be quantified as the detailed work required is yet to be
undertaken. The Directors, from a preliminary review of the transactions, are of the view that
the group will not be in a tax payable position. However, this will only be confirmed on the
completion of the work and on lodgement of the income tax returns.
5. CASH AND CASH EQUIVALENTS
Cash at bank
Short Term Deposits
As at
31 Dec 2015
$
As at
31 Dec 2014
$
1,858,994
-
1,858,994
-
-
-
Cash at bank earns interest at floating rates based on a daily bank deposit rates and fixed
interest is earned on term deposits held for maturity between 1-3 months.
6.
TRADE & OTHER RECEIVABLES
Current
Other receivables
Prepayments
59,332
17,811
10,549
69,881
29,813
47,624
Terms and conditions relating to the above financial instruments:
(a) Other receivables are non-interest bearing and generally on 30 day terms
Ageing of past due but not impaired:
Current – 30 days
30 – 60 days
60 – 90 days
Over 90 days
Total
59,332
-
-
-
59,332
17,811
-
-
-
17,811
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
7.
INVESTMENTS
At cost
Accumulated depreciation and impairment
Movement in carrying amounts
Opening balance
Additions
Black Mesa Productions LLC
Impairment
Disposals – due to deconsolidation
Transfers
Depreciation charge for the period
Closing balance
7.
INVESTMENTS (CONTINUED)
As at
31 Dec 2015
$
As at
31 Dec 2014
$
-
-
-
-
-
131,006
(131,006)
-
-
-
-
-
-
-
232,360,288
36,879,777
-
(256,480,062)
(673,399)
(12,086,604)
-
On 1 November 2015, BRK Oklahoma Holdings LLC, a wholly owned subsidiary of the
Company, entered into an agreement investing in the United States focused energy start-up
Black Mesa Production, LLC. In accordance with the agreement the Company paid
$131,006 (US $93,780). As the investment is in its infancy, we cannot currently predict the
recoverability of the investment and therefore it has been impaired to nil.
Investment in Subsidiary
Subsidiary
BRK Oklahoma Holdings LLC^
2015
%
100
2014
%
-
2015
$
366
2014
$
-
^ On 7 October 2015, the company registered its wholly owned subsidiary BRK Oklahoma Holdings LLC, an
Oklahoma, USA, Limited Liability Company.
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
8.
PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Plant and equipment
Opening balance
Additions
Disposals
Depreciation charge for the period
9.
TRADE & OTHER PAYABLES
Current
Trade creditors (a)
Other creditors and accruals*
Employee accruals
*Aggregate amounts payable to related parties
included:
Directors and director-related entities
As at
31 Dec 2015
$
As at
31 Dec 2014
$
44,093
(44,093)
-
-
4,149
-
(4,149)
-
-
-
44,093
(39,944)
4,149
4,149
1,399,434
55,400
(1,358,004)
(92,681)
4,149
4,149
1,280
68,096
-
69,376
104,225
683,667
29,846
817,738
16,250
81,025
Terms and conditions
(a)
Trade creditors are non-interest bearing and are normally settled on 45 day terms.
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
10.
ISSUED CAPITAL
Issued and paid up capital
400,000,000 Ordinary shares
(31 December 2014: 388,551,719)
10.A Movements in issued capital
At the beginning of the period
Shares issued during the period:
- Prospectus
- Cicero borrowings conversion
- Placement @ $0.012
Share issue costs
At end of the period
10.B Movements in number of shares on issue
Fully paid
At the beginning of the period
Shares issued during the period:
- Consolidation of capital, 1 for 2 – June 2015
- Prospectus – 15 July 2015
- Conversion of Cicero borrowings
- Consolidation of capital, 1 for 10 – Oct 15
- Placement – 6 November 2015
At end of the period
As at
31 Dec 2015
$
As at
31 Dec 2014
$
218,405,878
215,487,649
215,487,649
215,487,649
2,499,979
50,000
600,000
(231,750)
218,405,878
-
-
-
-
215,487,649
Number
501,051,719
Number
501,051,719
(250,526,063)
2,499,979,704
749,494,640
(3,149,999,697)
49,999,697
400,000,000
-
-
-
-
-
501,051,719
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
10.
ISSUED CAPITAL (CONTINUED)
Terms and conditions of contributed equity
Ordinary shares
Ordinary shares have the right to receive dividends as declared and, in the event of the
winding up of the Company, to participate in the proceeds from the sale of all surplus assets
in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of
the Company.
10.C Options
At the end of the reporting period, 187,499,924 options over unissued shares were on issue at
the end of the reporting period.
Type
Options
Date of Expiry
Exercise Price
AUD
Number of Options
on Issue
31 Dec 2018
$0.02
187,499,924
10.C Options (Continued)
Movements in number of options on issue
Fully paid
At the beginning of the period
Shares issued during the period:
- Options placement – October 2015
- Placement - 6 November 2015 – free attaching
- Expired during the period
At end of the period
10.D Performance rights
As at
31 Dec 2015
$
As at
31 Dec 2014
$
Number
Number
-
3,517,666
175,000,000
12,499,924
-
187,499,924
-
(3,517,666)
-
During the year, 10,460,000 performance rights on issue were cancelled as they are no
longer achievable or they have nil value.
As at
31 Dec 2015
$
As at
31 Dec 2014
$
11. ACCUMULATED LOSSES
Balance at the beginning of the period
Net loss for the period
Transfer of expired and cancelled options and
performance rights from reserve
Balance at end of the period
(216,253,614)
(2,240,996)
(51,306,644)
(170,302,130)
-
437,862,388
(218,494,610)
(216,253,614)
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
12. RESERVES
Share based payment reserve
Option valuation reserve
Foreign currency translation reserve
12.A Share based payment reserve (i)
At beginning of the period
Performance rights lapsed
Balance at end of the period
As at
31 Dec 2015
$
As at
31 Dec 2014
$
-
1,948,231
-
1,948,231
-
-
-
-
-
-
-
5,705,039
(5,705,039)
-
(i)
The share based payment reserve is used to record the value of equity benefits
provided to the employees and directors as part of their remuneration.
12.B Option valuation reserve
At the beginning of the period
Options issued during the period:
- Options placement – October 2015^
- Placement - 6 November 2015 – free attaching
- Options cancelled/expired
At end of the period
-
5,696,844
1,948,231
-
-
1,948,231
-
(5,696,844)
-
-
^ Unlisted options exercised @ $0.02 expiring 31 December 2018 were issued for in consideration of
$0.0002 per option with a deemed value of $0.011 per option as determined by Black Scholes model
detailed below.
Unlisted Options
The fair value of the 175,000,000 (2014: nil) unlisted options granted during the year ended 31
December 2015 was determined using the following option pricing models and weighted
average inputs to the model:
Share price
Volatility
Risk free rate
$0.012
212%
1.82%
12.C Foreign currency reserve
At beginning of the period
Movement during the period
Balance at end of the period
-
-
-
731,806
(731,803)
-
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
13. CASH FLOW INFORMATION
13.A Reconciliation of net loss after tax to the net cash flows
from operations:
Net loss
Cash flows excluded from profit/loss attributable to
operating activities
Finance costs
Non-cash items
Amortisation, depreciation and rehabilitation expense
Share based payments
Unrealised foreign (gain)/losses
Disposal of subsidiaries
Provision for employee entitlements
Option valuation expense
Foreign currency translation
Settlement of DOCA
Acquisition costs included in investing
Changes in assets and liabilities
Increase/(decrease) in receivables and other assets
Decrease in payables and accruals
Net cash flows from / (used in) operating activities
13.B Reconciliation of cash:
Cash balances comprises
AUD accounts
USD accounts
As at
31 Dec 2015
$
As at
31 Dec 2014
$
(2,240,996)
(211,421,408)
-
3,384
-
50,000
-
-
-
1,913,231
(2,598)
4,149
131,006
5,378
(6,690,615)
32,034,683
199,699,141
73,604
-
-
-
-
(22,257)
(748,362)
(915,828)
4,785,151
(572,132)
17,917,186
1,442,161
416,833
1,858,944
-
-
-
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
14. KEY MANAGEMENT PERSONNEL DISCLOSURES
14.A Remuneration of Directors and Executives
Details of remuneration paid to Key Management Personnel have been disclosed in the
Directors’ Report.
Aggregate of remuneration paid to Key Management Personnel during the period as
follows:
Short term employee benefits
Post-employment benefits
Share-based payments
As at
31 Dec 2015
$
96,250
-
-
96,250
As at
31 Dec 2014
$
2,495,864
235,197
-
2,731,061
During the year ended 31 December 2015, Cicero Corporate Pty Ltd, an entity related to
Miss Loren Jones, received $57,000 exclusive of GST for the provision of company secretarial
and accounting work to the Group. Cicero has been engaged to provide corporate
services to the Company.
15. SEGMENT INFORMATION
Brookside Energy Limited operates predominantly in one industry being the oil and gas
industry in the USA.
Segment Information
Identification of reportable segments
The Company has identified its operating segments based on the internal reports that are
reviewed and used by the Board of Directors in assessing performance and determining the
allocation of resources.
The Company is managed primarily on the basis of its oil and gas in the USA and its
corporate activities. Operating segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the
segments are considered to have similar economic characteristics.
Types of reportable segments
(i)
(ii)
Oil and gas exploration: Segment assets, including acquisition cost of exploration
licenses and all expenses related to the projects in the USA are reported on in this
segment.
Corporate, including treasury, corporate and regulatory expenses arising from
operating an ASX listed entity. Segment assets, including cash and cash equivalents,
and investments in financial assets are reported in this segment.
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
15. SEGMENT INFORMATION (CONTINUED)
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision
maker with respect to operating segments are determined in accordance with accounting
policies that are consistent to those adopted in the annual financial statements of the
Group.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that
receives the majority of economic value from the asset. In the majority of instances,
segment assets are clearly identifiable on the basis of their nature and physical location.
Unless indicated otherwise in the segment assets note, deferred tax assets and intangible
assets have not been allocated to operating segments.
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of
the liability and the operations of the segment. Borrowings and tax liabilities are generally
considered to relate to the Company as a whole and are not allocated. Segment liabilities
include trade and other payables.
31 December 2015
(i) Segment performance
Segment revenue
Segment results
Included within segment result:
-
Interest Revenue
- Payment Black Mesa Project
- Option valuation expense
Segment assets
Segment liabilities
Corporate
$
Oil and Gas
& Other US
entities
$
Total
$
29,693
-
29,693
(2,109,624)
(131,372)
(2,240,996)
7,424
-
7,424
-
(131,006)
(131,006)
(1,913,231)
1,928,875
(69,376)
-
-
-
(1,913,231)
1,928,875
(69,376)
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
15. SEGMENT INFORMATION (CONTINUED)
31 December 2014
(i) Segment performance
Segment revenue
Segment results
Included within segment result:
- Depreciation
-
Interest Revenue
Corporate
$
Oil and Gas
& Other US
entities
$
Total
$
18,451
-
18,451
(18,429,937)
(192,260,954)
(210,691,091)
(5,378)
18,451
-
-
(5,378)
18,451
- Discontinued operations
-
(192,260,954)
(192,260,954)
Segment assets
Segment liabilities
51,773
(817,738)
-
-
51,773
(817,738)
As at
31 December
2015
$
As at
31 December
2014
$
16.
LOSS PER SHARE
The following reflects the income and share data used
in the calculation of basic and diluted loss per share:
Earnings used in calculation of basic and diluted
earnings per share
(2,240,996)
(211,421,408)
Weighted average number of ordinary shares on issue
used in the calculation of basic loss per share (i)
1,099,836,613
501,051,7193
(i)
Share options are not considered dilutive, as their impact would be to decrease the
net loss per share.
17. RELATED PARTY DISCLOSURE
Cicero Corporate Pty Ltd, an entity associated with Miss Loren Jones received $57,000 for
the provision of company secretarial services, office space and office support and
749,494,640 fully paid ordinary shares (pre-consolidation) at a deemed value of 50,000 upon
conversion of a financing loan. Refer Note 14 respecting Key Management Personnel
details. Refer Note 23 respecting Black Mesa Agreement details.
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
As at
31 December
2015
$
As at
31 December
2014
$
59,000
140,658
-
59,000
1,107
141,765
18. AUDITOR’S REMUNERATION
Amounts received or due and receivable by:
- Grant Thornton - audit at financial year end of the
Group
Other Services:
- Grant Thornton - taxation fees
19. FINANCIAL INSTRUMENTS
Financial risk management and risk policies
The Group’s activities expose it to a variety of financial risks: liquidity risk, market risk
(including fair value interest rate risk, currency risk and price risk) and credit risk.
The Group’s overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the
Group.
Risk management is carried out by the full Board of Directors. The Board identifies and
evaluates financial risks in close co-operation with management and provides written
principles for overall risk management.
The Board meets regularly to analyse and monitor the financial risks associated to the
business operations.
19.A
Interest rate risk
The Group is exposed to movements in market interest rates on interest bearing bank
accounts. The policy is to monitor the interest rate yield curve out to 120 days to ensure a
balance is maintained between the liquidity of cash assets and the interest rate return.
The Group has performed a sensitivity analysis relating to its exposure to interest rate risk at
balance date. This sensitivity analysis demonstrates the effect on the current period results
and equity which could result from a change in these risks.
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
19. FINANCIAL INSTRUMENTS (CONTINUED)
Interest Rate Sensitivity Analysis
At 31 December 2015, if interest rates had been 2% higher or lower than the prevailing rates
realised, with all other variables held constant, the effect on loss and equity as a result of
interest rates changes would be as follows:
31 December
2015
$
Net Change
31 December
2014
$
Net Change
Change in loss
Increase in interest rate by 2%:
AUD accounts
USD accounts
Decrease in interest rate by 2%:
AUD accounts
USD accounts
Change in equity
Increase in interest rate by 2%:
AUD accounts
USD accounts
Decrease in interest rate by 2%:
AUD accounts
USD accounts
(148)
-
(148)
148
-
148
(148)
-
(148)
148
-
148
-
-
-
-
-
-
-
-
-
-
-
-
The above interest rate sensitivity analysis has been performed on the assumption that all other
variables remain unchanged.
19.C Net fair values of financial assets and liabilities
The net fair value of cash and cash equivalent and non-interest bearing monetary financial
assets and financial liabilities of the entity approximate their carrying values due to their
short-term maturity.
The net fair value of other monetary financial assets and financial liabilities is based on
discounting future cash flows by the current interest rates for assets and liabilities with similar
risk profiles. The balances are not materially different from those disclosed in the statement
of financial position of the Group.
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
19. FINANCIAL INSTRUMENTS (CONTINUED)
19.D
credit risk exposure
The Group’s maximum exposure to credit risk at each balance date in relation to each class
of recognised financial assets is the carrying amount, net of any provision for doubtful debts,
of those assets as indicated in the statement of financial position.
There were no material external debtors at the year-end following the loss of control of the
subsidiary entity.
19.E
Liquidity risk management
The Group had no interest bearing liabilities at year end.
19.F Fair Value Measurement of Financial Instruments
Financial assets and financial liabilities measured at fair value in the statement of financial
position are grouped into three levels of the following fair value measurement hierarchy in
accordance with AASB 7 Financial Instruments:
Disclosures
•
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly or indirectly;
Level 3: unobservable inputs for the asset or liability.
The following table shows the levels within the hierarchy of financial assets and liabilities
measured at fair value on a recurring basis at 31 December 2015 and 31 December 2014:
31 December 2015
Level 1
$
Level 2
$
Level 3
$
Total
$
Financial assets
Cash and cash equivalents
Receivables
Total financial assets
Financial liabilities
Payables
Loans and borrowings
Total financial liabilities
-
-
59,332
59,332
(39,529)
-
(39,529)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,332
59,332
(39,529)
-
(39,529)
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
19. FINANCIAL INSTRUMENTS (CONTINUED)
31 December 2014
Level 1
$
Level 2
$
Level 3
$
Total
$
Financial assets
Cash and cash equivalents
Receivables
Total financial assets
Financial liabilities
Payables
Loans and borrowings
Total financial liabilities
-
17,811
17,811
(728,642)
-
(710,831)
-
-
-
-
-
-
-
-
-
-
-
-
-
17,811
17,811
(728,642)
-
(710,831)
20.
CONTINGENT ASSETS AND LIABILITIES
There are no contingent liabilities or contingent assets.
21. EMPLOYEE BENEFITS
65m options were issued during the reporting period and are held by the Key Management
Personnel as at the balance date. Refer to note 12.B for the terms of these options.
Performance Rights Plan
At the end of the year, there were nil performance rights on issue.
22. SHARE BASED PAYMENT PLANS
Recognised Employee Share-Based Payment Expenses
The equity-settled share-based payment expense recognised in the consolidated statement
of profit or loss and other comprehensive income for employee services have been
cancelled as the vesting terms are no longer achievable.
Year ended
Year ended
Dec 2015
$
Dec 2014
$
Total expenditure arising from employee and director
share-based payment transactions
-
(6,690,615)
Share Options
At 31 December 2015, nil share based payment options were on issue.
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
23. AGREEMENT WITH BLACK MESA PRODUCTIONS LLC
On 1 November 2015, BRK Oklahoma Holdings LLC, a wholly owned subsidiary of the
Company, entered into an agreement investing in the United States focused energy start-up
Black Mesa Production, LLC.
BRK Oklahoma and a Tulsa, Oklahoma based equity group (‘the Tulsa Equity Group”) have
executed an Operating Agreement with Black Mesa. Under this agreement, which is
effective 1 December, 2015, BRK Oklahoma will acquire 15% of Black Mesa and the Tulsa
Equity Group will acquire 35% (“the Equity Members”). The Black Mesa management team
will earn 50% equity in Black Mesa as Incentive Members.
The Equity Members have committed US$3.126 million (pro-rata in accordance with their
respective equity positions) in start-up capital to Black Mesa over three years. Black Mesa
will leverage its relationship with Brookside and the Tulsa Equity Group to support and
enhance its efforts to identify potential acquisition and development opportunities and to
provide capital for these initiatives as required.
In accordance with the agreement, as at 31 December 2015, the Company paid $131,006
(US$93,780) with a further US$844,020 over the next 3 years. As the investment is in its infancy,
we cannot currently predict the recoverability of the investment and therefore it has been
impaired to nil.
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
24. PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Reserves
Total equity
Financial performance
Loss for the period
Other comprehensive income
Total comprehensive income
Year Ended
Dec 2015
$
Year Ended
Dec 2014
$
1,928,875
-
1,928,875
47,624
4,149
51,773
69,376
69,376
817,738
817,738
218,405,878
(218,494,610)
1,948,231
1,859,499
215,487,649
(216,253,614)
-
(765,965)
(2,240,996)
-
(2,240,996)
(210,691,091)
(730,317)
(211,421,408)
24. PARENT ENTITY DISCLOSURES (CONTINUED)
Contingent liabilities
As at 31 December 2015 and 2014, the Company had no contingent liabilities.
Contractual Commitments
As at 31 December 2015 and 2014, the Company had no contractual commitments.
Guarantees entered into by parent entity
As at 31 December 2015 and 2014, the Company had not entered into any guarantees.
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
25. SUBSEQUENT EVENTS
On 4 January 2016 the Company made its third scheduled contribution to Black Mesa
Productions, LLC (Black Mesa) being USD $159,000. To date the Company has sent
contributions to Black Mesa totalling USD $252,780. The next scheduled capital commitment
of USD $144,000 is not due to be paid until 1 July 2016.
On 13 January 2016 the Company sought to have their unlisted options quoted and
received official approval from the commencement of trading on Friday, 22 January 2016
On Tuesday the 29th of March 2016, the Company requested a trading halt pending the
announcement of an acquisition of oil and gas royalties in Blaine County Oklahoma by its
wholly owned subsidiary BRK Oklahoma Holdings, LLC (BRK Oklahoma) (Acquisition). The
consideration for the acquisition is expected to be approximately A$1.1M. It is anticipated
that Cicero Advisory, the Company’s Corporate Advisors, will be appointed to manage an
offer, of 100,000,000 new fully paid ordinary shares at $0.01 (with a one for two free
attaching option, exercisable at $0.02 on or before 31 December 2018, subject to
shareholder approval) to raise $1,000,000 before costs (Placement), with the express
purpose of funding this Acquisition.
The Directors are not aware of any other matter or circumstance that has arisen since 31
December 2013 which significantly affected, or may significantly affect, the operations of
the Company, the results of those operations, or the state of affairs of the Group, in future
financial years.
As at
31 December
2015
$
As at
31 December
2014
$
26. COMMITMENTS FOR EXPENDITURE
Exploration Commitments
Within one year
After one year but not more than five years
More than five years
Capital Commitments – Black Mesa Productions LLC
Within one year^
After one year but not more than five years*
More than five years
^ Equivalent of USD303,000
* Equivalent of USD541,020
-
-
-
-
414,728
740,515
-
1,155,243
201
503
-
704
-
-
-
-
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
27. DISCONTINUED OPERATIONS
On 8 December 2014, Clifford Rocke, Martin Madden and David Winterbottom of
KordaMentha Pty Ltd were appointed as Receivers and Managers (“R&M”) of certain assets
of the Company under the terms of the security provided to Guggenheim Corporate
Funding LLC “Guggenheim”.
On 10 December 2014, Red Fork Energy Limited’s (renamed Brookside Energy Limited)
(Subject to Deed of Company Arrangement) (Receivers and Managers Appointed)
securities were suspended from quotation on the Australian Securities Exchange (ASX). On
10 December 2014, the Directors of the Company resolved to place the Company in
voluntary administration and appointed Messrs Martin Jones, Darren Weaver and Benjamin
Johnson of Ferrier Hodgson as joint and several administrators of the Company.
On 12 December 2014 the R&M were appointed over the Company. Following appointment
of the R&M and Administrators, the powers of the Company’s officers (including Directors)
were suspended and subject to the appointment of the R&M and Administrators who
assumed control of the Company’s business, property and affairs.
As a result Red Fork Energy Limited (renamed Brookside Energy Limited) disposed of the US
subsidiaries. Refer to the annual report for the year ended 31 December 2014 for details.
61
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors of Brookside Energy Limited (the ‘Group’):
a.
The consolidated financial statements and notes are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the entity’s financial position as at 31 December 2015
and of its performance for the year then ended; and
(ii) complying with Australian Accounting Standards , the Corporations Regulations
2001, professional reporting requirements and other mandatory requirements.
2.
3.
There are reasonable grounds to believe that the Group will be able to pay its debts as and
when they become due and payable.
the Directors have been given the declarations required by s.295A of the Corporations Act
2001.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for
and on behalf of the Directors by:
David Prentice
Chief Executive Officer
01 April 2016
62
Level 1
10 Kings Park Road
West Perth WA 6005
Correspondence to:
PO Box 570
West Perth WA 6872
T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Brookside Energy Limited
Report on the financial report
We have audited the accompanying financial report of Brookside Energy Limited (the
“Company”), which comprises the consolidated statement of financial position as at 31
December 2015, the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, notes comprising a summary of significant accounting
policies and other explanatory information and the directors’ declaration of the consolidated
entity comprising the Company and the entities it controlled at the year’s end or from time
to time during the financial year.
Directors’ responsibility 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. The Directors’ responsibility also includes such internal control as
the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error. The Directors also state, in the notes to the financial report, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
statements comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require us to comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.
In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view 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 Company’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the
overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our qualified audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.
Basis for qualified auditor’s opinion
A limitation in scope of our audit work exists for the reasons described below:
We have been unable to obtain sufficient appropriate audit evidence on some aspects of the
accounting of the consolidated entity due to the loss of control of the US subsidiary in 2014.
Specifically, we have been unable to satisfy ourselves on the following areas:
Comparative balances – due to the disclaimer of opinion issued on the financial report for
31 December 2014, we are unable to obtain evidence to support the comparative balances in
the 31 December 2015 financial statements.
Tax balances – as disclosed in note 4 to the financial statements, we have been unable to
obtain sufficient appropriate audit evidence to support the Directors’ assessment of the tax
position of the consolidated entity as required under AASB 112 Income Taxes. In the event
that the disclosed position is incorrect, there is potential for a tax payable position to arise.
Qualified Auditor’s opinion
In our opinion, except for the effects of such adjustments, if any, as might have been
determined to be necessary had we been able to satisfy ourselves as to matter giving rise to
the qualification:
a
the financial report of Brookside Energy Limited is in accordance with the
Corporations Act 2001, including:
i
ii
giving a true and fair view of the consolidated entity’s financial position as at 31
December 2015 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
b
the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.
Material uncertainty regarding continuation as going concern
Without further qualifying our opinion, we draw attention to Note 1.A.4 in the financial
report which indicates that the consolidated entity incurred an operating loss before tax for
the year ended 31 December 2015 of $2,240,996. These conditions, along with other
matters as set forth in Note 1.A.4, indicate the existence of a material uncertainty which may
cast significant doubt about the consolidated entity’s ability to continue as a going concern
and therefore, the consolidated entity may be unable to realise its assets and discharge its
liabilities in the normal course of business, and at the amounts stated in the financial report.
Report on the remuneration report
We have audited the remuneration report included in pages 9 to 14 of the Directors’ Report
for the year ended 31 December 2015. 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.
Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Brookside Energy Limited for the year ended 31
December 2015, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
M J Hillgrove
Partner - Audit & Assurance
Perth, 01 April 2016
ADDITIONAL SHAREHOLDERS’ INFORMATION
A. CORPORATE GOVERNANCE
A statement disclosing the extent to which the Company has followed the best practice
recommendations set by the ASX Corporate Governance Council during the reporting period is
detailed following the Director’s Report.
B. SHAREHOLDING
B.1 Substantial Shareholders
The names of the substantial shareholders listed on the Company’s register as at 28 March 2016:
Name
Jetmax Trading Pty Ltd
The Trust Company (Australia) Limited
Aspire West Pty Ltd
B.2 Unquoted Securities
Number of shares
25,000,000
20,333,333
20,000,000
At the date of this report there were 187,499,924 unquoted options over ordinary shares in the
Company were on issue and no options were exercised during the year. The unlisted options are
exercisable at $0.02 per option and have an expiry date of 31 December 2018.
On 13 January 2016 the Company sought to have these options quoted and received official
approval from the commencement of trading on Friday, 22 January 2016.
B.3 Number of holders in each class of equity securities and the voting rights attached
There are 1,987 holders of ordinary shares. Each shareholder is entitled to one vote per share held.
On a show of hands every shareholder of ordinary shares present at a meeting in person or by proxy,
is entitled to one vote, and upon a poll each share is entitled to one vote.
B.4 Distribution schedule of the number of holders in each class of equity security as at 28 March
2016.
By Class
1-1,000
1,001 - 5,000
5,001 – 10,000
10,001 - 100,000
100,001 and over
TOTALS
B.5 Marketable Parcel
Holders of
Ordinary Shares
Number of
Ordinary Shares
%
865
419
128
320
255
1,987
308,224
1,087,442
958,923
14,796,234
382,849,177
400,000,000
0.08%
0.27%
0.24%
3.70%
95.71%
100.00%
There are 1,536 shareholders with less than a marketable parcel.
B.6 Restricted Securities
The Company has no restricted securities at the current date.
66
ADDITIONAL SHAREHOLDERS’ INFORMATION
B.7 Twenty largest holders of each class of quoted equity security
Fully paid ordinary shares
The names of the twenty largest holders of fully paid ordinary shares, the number of securities each
holds and the percentage of share capital each holds (as at 28 March 2016) is as follows:
Name
Jetmax Trading Pty Ltd
The Trust Company (Australia) Limited
Aspire West Pty Ltd
Mr Richard Dongray & Mrs Joan Dongray
Pandora Perth Pty Ltd
Yea-Sayer Pty Ltd
Wimalex Pty Ltd
Delaro Holdings Pty Ltd
Lydian Enterprises Pty Ltd
Mrs Hilary Somerville Statham
Crying Rock Pty Ltd< Crying Rock A/C>
Didcal Pty Ltd
Ravenhill Investments Pty Ltd
Mr Jonathan Mark Wild
Citicorp Nominees Pty Limited
Mr Richard Hugo Hamersley
Labanc Pty Ltd
Five T Capital Pty Ltd
Mr Ben West Statham & Mrs Elle Statham
Netshare Nominees Pty Ltd
TOTAL
No. of Shares
25,000,000
20,333,333
20,000,000
15,000,000
12,500,000
10,000,000
10,000,000
10,000,000
10,000,000
9,833,333
8,000,000
8,000,000
6,500,000
6,300,000
5,614,571
5,500,000
5,192,096
5,000,000
5,000,000
5,000,000
%
6.25%
5.08%
5.00%
3.75%
3.13%
2.50%
2.50%
2.50%
2.50%
2.46%
2.00%
2.00%
1.63%
1.58%
1.40%
1.38%
1.30%
1.25%
1.25%
1.25%
202,773,333
50.71%
67
ADDITIONAL SHAREHOLDERS’ INFORMATION
Options
On 13 January 2016 the Company sought to have their unlisted options quoted and received official
approval from the commencement of trading on Friday, 22 January 2016.
Accordingly, the names of the twenty largest option holders, the number of options each holds and
the percentage of option capital each holds (as at 28 March 2016) is as follows:
Name
Mr David Prentice & Mrs Mirella Rosanna Prentice
The Twentieth Century Motor Company Pty Ltd
Mr Michael John Fry
Station Nominees Pty Ltd
Waterox Pty Ltd
Ravenhill Investments Pty Ltd
Ethan Allen Investments Pty Ltd
Mial Enterprises Pty Ltd
Mrs Hilary Somerville Statham & Mr Thomas Statham
Mr Ian Alisair Leete & Mrs Helen Leete
Rimoyne Pty Ltd
The Trust Company (Australia) Limited
Jetmax Trading Pty Ltd
Mrs Hilary Somerville Statham
Sacco Developments Australia Pty Limited
Mr Ashley Milne
Amazing Grace Holdings Pty Ltd
Mr Mark John Bahen & Mrs Margaret Patricia Bahen
Mr Elliott Wakefield
Mr Kerry Gilbert Parkin
TOTAL
No. of Options
%
40,000,000
21.33%
30,000,000
26,274,924
20,000,000
20,000,000
20,000,000
7,000,000
4,000,000
3,500,000
3,000,000
2,500,000
2,083,333
1,666,667
1,458,333
812,500
500,000
500,000
500,000
416,667
250,000
16.00%
14.01%
10.67%
10.67%
10.67%
3.73%
2.13%
1.87%
1.60%
1.33%
1.11%
0.89%
0.78%
0.43%
0.27%
0.27%
0.27%
0.22%
0.13%
184,462,424
98.38%
68