ENEGEX LIMITED
ABN 28 160 818 986
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2017
ENEGEX LIMITED
ABN 28 160 818 986
CORPORATE DIRECTORY
CONTENTS
E.G Albers (Chairman)
R.L. Clark
A.P. Armitage
COMPANY SECRETARY
R.J. Wright
Registered Office
and Principal Administration Office
Level 21, 500 Collins Street
Melbourne, Victoria 3000, Australia
Telephone:
Facsimile:
Email:
+61 (0)3 8610 4713
+61 (0)3 8610 4799
admin@enegex.com.au
Auditor
Grant Thornton Audit Pty Ltd
GPO Box 4736
Melbourne, Victoria 3001 Australia
Website:
www.enegex.com.au
Share Registry
Automic Pty Ltd
Level 3
50 Holt Street
Surry Hills, NSW 2010, Australia
Telephone: 1300 288 664 (within Australia)
Telephone: +61 (2) 9698 5414 (outside Australia)
Website: www.automic.com.au
Stock Exchange Listing
ASX Limited
Level 4, North Tower, Rialto
525 Collins Street
Melbourne, Victoria 3000 Australia
Chairman’s Review ............................................... 1
Directors’ Report .................................................. 2
Remuneration Report ............................................ 5
Directors’ Declaration ........................................... 8
Statement of Profit or Loss and
Other Comprehensive Income ............................... 9
Statement of Financial Position ........................... 10
Statement of Changes in Equity .......................... 11
Statement of Cash Flows ..................................... 12
Notes to the Financial Statements ....................... 13
Audit Report ...................................................... 25
Auditor’s Independence Declaration ................... 28
Corporate Governance ........................................ 29
Shareholder and Other Information ..................... 29
FORWARD LOOKING STATEMENTS
This Annual Financial Report includes certain
forward-looking statements that have been based on
current expectations about future acts, events and
circumstances. These forward-looking statements
are, however, subject to risks, uncertainties and
assumptions that could cause those acts, events and
the
circumstances
expectations described in such forward-looking
statements.
to differ materially
from
factors
include, among other
things,
These
commercial and other risks associated with the
meeting of objectives and other
investment
considerations, as well as other matters not yet
known to the company or not currently considered
material by the company.
ASX Code:
ENX
Ordinary Shares
RISK FACTORS
Incorporated in the State of Victoria
17 October 2012
Exploration for oil and gas is speculative, expensive
and subject to a wide range of risks. There can be no
assurance that any well drilled by the company will
result in the discovery of oil or gas, nor that any
discovery will prove to be commercially viable.
Individual investors should consider these matters in
light of their personal circumstances (including
financial and taxation affairs) and seek professional
advice from their accountant, lawyer or other
professional adviser as to the suitability of an
investment in the Company.
ENEGEX LIMITED
ABN 28 160 818 986
CHAIRMAN’S REVIEW
Dear Shareholders
Enegex is a natural resources company, incorporated in Australia, with its securities listed on the ASX. Its focus
is on energy in all its forms, with a particular emphasis to date on the oil and gas industry.
Enegex holds a 14.875% participating Interest in the Cornea Retention Lease WA-54R in which the Cornea
oilfield is situated.
The Cornea Retention Lease was granted following the significant new information gained from the Cornea–3
well in which Enegex’s predecessor company actively participated. The initial Cornea Retention Lease work
program was formulated to address the technical challenges to development of Cornea; with the first three years
of the Lease designed to support the quantification of drilling and produceability challenges.
Demonstrating Cornea’s ability to achieve threshold production was then seen as, and remains, the key barrier to
commercialisation of Cornea, and a production test well, designed to achieve such economic production was
identified as a key means of moving Cornea towards development. However, the reduced oil price environment
has impacted significantly on the required threshold production barrier.
As a result, the parameters of a Cornea development have changed considerably since the Retention Lease was
granted, as has the basis of design for a viable Cornea production well test. We now have a development concept
which is significantly simplified from the originally proposed high capex development. Integrated reservoir
modelling and facilities work has been commenced to support design of a production test well capable of
delivering threshold productivity using this development concept.
The Cornea Joint Venture has applied to the authorities to vary the conditions of WA-54-R to enable the work
programme to focus on achieving threshold production within the current oil price regime.
The Cornea JV is pursuing potential alliances to assist in the development of Cornea.
Enegex maintained extreme fiscal discipline during the year. Directors continue to forgo directors’ fees and all
other forms of corporate expenditure have been limited or reduced.
Enegex is open to other natural resource opportunities that may present. With oil prices continuing to languish,
we have considered other avenues where our future may lie. In particular, with advances being made in energy
storage, Enegex is seeking to become involved in innovations that are transforming the storage of energy. Our
involvement in energy storage and services may take a variety of forms including direct participation, joint
venture and equity investment.
Our initial initiatives are to investigate and to undertake corporate investment in the following areas:
•
•
•
Strategic energy storage minerals
Energy storage technologies
Alternative and renewable energy sources
I thank my co-directors for their support during the year.
E.G. Albers
Chairman
27 September 2017
1
ENEGEX LIMITED
ABN 28 160 818 986
DIRECTORS’ REPORT
The directors present their report on the results and state of affairs of Enegex Limited (the company or Enegex) for
the year ended 30 June 2017.
PRINCIPAL ACTIVITY
The principal activity of the company during the financial year ended 30 June 2017 was the exploration for
natural resources, unchanged since the incorporation of the Company.
FINANCIAL RESULTS FOR THE YEAR
The company recorded an operating loss after income tax for the year ended 30 June 2017 of $91,307 (2016:
$95,980).
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There have been no significant changes in the state of affairs during the financial year and to the date of this report.
DIVIDENDS
No dividend has been paid, provided or recommended during the financial year and to the date of this report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The likely developments in the company’s operations in future years and the expected result from those
operations are dependent on exploration success in the permit area in which the company holds an interest.
REVIEW OF FINANCIAL POSITION
At 30 June 2017, the company had a working capital (current assets less current liabilities) surplus of $402,564
(2016: $545,395).
REVIEW OF OPERATIONS
Corporate
During the year the Company maintained tight fiscal discipline.
Interest in WA-54-R Greater Cornea Fields
The company holds a 14.875% interest in the Cornea Joint Venture. The Cornea Joint Venture ownership is the
following:
Enegex Limited
Octanex Group. (ASX Code: OXX)
Cornea Resources Pty Ltd (Operator)
Others
14.875%
18.750%
13.100%
53.275%
The Greater Cornea Fields (being the Cornea, Focus and Sparkle Oil Fields and the Cornea North (Tear) Gas Field) are
located in the Browse Basin, offshore from Western Australia and held via a Retention Lease (WA-54-R).
2
ENEGEX LIMITED
ABN 28 160 818 986
Figure 1 - Greater Cornea Field Retention Lease Location Map
The Greater Cornea Fields present a large in place oil resource contained in a challenging reservoir. At the time the
Retention Lease was applied for and granted, production uncertainty was identified as the primary constraint to the
development of the Greater Cornea Fields. A successful production test well designed to demonstrate threshold
productivity for development initiation is required to commercialise Cornea.
Low Estimate
Best Estimate
High Estimate
Middle Albian B & C Sands
(P90)
Probabilistic Oil In-place (100% basis)
298.0
Recovery Factor (RF)
Contingent Oil Resources
Prospective Enegex Economic
Interest*
2
7.9
1.16
(P50)
411.7
7
28.8
4.28
(P10)
567.2
25
101.9
15.16
Units
mmbbl
%
mmbbl
mmbbl
* Based on Enegex’s 14.875% Participating Interest in WA-54-R.
Probabilistic In-place and Contingent Oil Resources for Cornea Central and South Fields (no development risk applied)
A production test well must be placed and constructed in the same manner as intended for field development in order to
prove up viable well construction methodologies and technologies, ensure representative threshold oil production is
achieved and control of gas and water ingress.
3
ENEGEX LIMITED
ABN 28 160 818 986
Given the favourable prevailing oil price when the Retention Lease was applied for and granted, numerous field
development concepts were then considered likely to be economic (subject to achieving threshold production volumes).
The current sustained low oil price environment presents a further significant challenge to the field’s commerciality,
having rendered as non-viable the field development concepts previously considered likely to be economic.
Reflecting the changed oil price environment, new development concept screening was undertaken during the year with
the objective of identifying a field development concept with the potential to be commercial at current oil prices
(US$50/Bbl). Following this screening, a field development concept predicated on the use of a Mobile Offshore
Production Unit (MOPU) with a subsea tank and single point mooring has been selected for further investigation. This
concept is significantly different to earlier concepts with significant cost reduction implications. Integrated reservoir
modelling and facilities work has been commenced to support design of a production test well capable of delivering
threshold productivity using this development concept.
The Cornea Joint Venture has applied to vary the conditions of WA-54-R to facilitate this work.
DIRECTORS
The directors in office during the entire financial year and to the date of this report were:
GA Menzies LL.B
Chairman - Appointed 17/10/12 – Resigned 11/4/17
EG Albers LLB, FAICD
Chairman since 12/4/17
Director since 1/10/15
Mr Albers has over 35 years’ experience as a director and administrator in corporate law, petroleum exploration and
resource sector investment. Mr Albers became involved in oil exploration in 1977 and has a track record of developing
significant oil and gas assets.
Mr Albers has interests in a number of companies active in the petroleum industry in Australia and Malaysia.
Mr Albers is also a director of the ASX listed companies Octanex Limited and Peako Limited.
RL Clark B.Bus (dist), CA, MAICD, AGIA, ACIS
Executive Director
Director since 12/10/15
Mrs Clark has more than 15 years’ experience focussed primarily on the natural resources sector. Her experience includes
business development, financial modelling and analysis, capital raising and mergers and acquisitions, as well as managing
joint venture partners, government, regulator and investor relations.
Mrs Clark is also a director of the ASX listed companies Octanex Limited and Peako Limited.
AP Armitage FCA FAICD
Non-Executive Director
Director since 11/4/17
Mr Armitage began his professional career with an international accounting firm. After qualification he was invited into
partnership of a national firm. Since the early 1980s he has been a director of a number of listed exploration companies in
both Australia and New Zealand. He is currently a Non-Executive director of ASX listed Strategic Energy Resources
Limited and Peako Limited.
4
ENEGEX LIMITED
ABN 28 160 818 986
COMPANY SECRETARY
RJ Wright B Bus, CPA – appointed 17 October 2012
Mr Wright is a senior financial professional with over 25 years commercial experience in the resource, energy and
manufacturing industries gained at various companies and locations, including 14 years at BHP. As well as carrying out
his secretarial duties for Enegex, he is the company’s Chief Financial Officer and the Company Secretary and CFO of the
ASX listed companies Octanex Limited and Peako Limited. Mr Wright is a member of CPA Australia.
BOARD AND COMMITTEE MEETINGS
The following table sets out the number of meetings held during the year and the number of meetings attended by
each director.
Board of Directors
Held
Attended
Audit Committee
Held
Attended
GA Menzies*
EG Albers
RL Clark
AP Armitage*
2
2
2
-
2
2
2
-
2
2
2
-
2
2
2
-
The board undertakes all audit committee functions.
* AP Armitage was appointed 11 April 2017. GA Menzies resigned 11 April 2017.
SHARE CAPITAL
ORDINARY SHARES
No shares were issued during the year and to the date of this report.
OPTIONS
No options were issued during the year and to the date of this report.
REMUNERATION REPORT
This report is audited.
Directors / Executives
Position Held
EG Albers
RL Clark
AP Armitage
Non-Executive Chairman
Executive Director
Non-Executive Director
AP Armitage was appointed 11 April 2017. GA Menzies resigned 11 April 2017.
During the year there were no employees or consultants to the company that meet the definition of key management
personnel, other than the directors.
Remuneration levels are reviewed annually.
Director Remuneration
During the year under review, directors were remunerated a total of $Nil (2016: $Nil).
There is no performance related remuneration for directors. Directors’ remuneration paid covers all board activities
including serving on committees.
5
ENEGEX LIMITED
ABN 28 160 818 986
REMUNERATION REPORT (Continued)
The directors do not receive employee benefits, including annual leave and long service leave, but remuneration may
include the grant of options (share based payments) over shares of the company so as to align directors’ interests
with that of the shareholders.
There is no direct relationship between remuneration of directors and the company’s performance since
incorporation.
Components of directors’ compensation are disclosed below.
Year
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
GA Menzies
EG Albers
RL Clark
AP Armitage
TOTAL
Short Term
Directors
Fees
$
Other
Fees
$
Post
Employment
Super-
annuation
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
Equity
Settled
Options
$
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
Options as
percentage of
Total
-
-
-
-
-
-
-
-
-
-
AP Armitage was appointed 11 April 2017. GA Menzies resigned 11 April 2017.
There were no shares or options issues to directors as part of compensation during the year ended 30 June 2017.
Ordinary Shares
The number of shares in the company held during by each director, including their related parties, is set out below:
Directors
GA Menzies
EG Albers
RL Clark
AP Armitage
Held at
1 July 2016
269,674
30,888,308
75,000
-
__________
31,232,982
=========
Rights
Issue
Options
Exercised
-
-
-
-
________
-
=======
-
-
-
-
________
-
=======
Net
Change
Other
(269,674) (i)
1,750,762
-
-
________
1,481,088
=======
Held at
30 June 2017
-
32,639,070
75,000
-
________
32,714,070
=========
(i) AP Armitage was appointed 11 April 2017. GA Menzies resigned 11 April 2017.
End of Remuneration Report
6
ENEGEX LIMITED
ABN 28 160 818 986
INDEMNIFICATION OF OFFICERS AND AUDITORS
During the financial year and to the date of this report, the company did not pay premiums in respect of contracts
insuring officers or auditors of the company against liabilities arising from their position of officers or auditor of the
company.
ENVIRONMENT, HEALTH AND SAFETY
The company has adopted an environmental, health and safety policy and conducts its operations in accordance with
the APPEA Code of Practice.
The company’s petroleum exploration activities are subject to environmental conditions specified in the Offshore
Petroleum and Greenhouse Gas Storage Act 2006, associated Regulations and Directions, as well as the
Environment Protection and Biodiversity Conservation Act 1999. There were no known contraventions of any
relevant environmental regulations by the company, its subsidiary or by the operator of any of the permits in which
an interest is held.
The company believes all injuries are avoidable and has policies and procedures to ensure employees and
contractors manage safety accordingly. The company monitors and evaluates its procedures. During the year there
were no known contraventions of health and safety by the company or reported health and safety incidents.
CORPORATE GOVERNANCE STATEMENT
A corporate governance statement reporting on Enegex’s governance framework, principles and practices is
provided on the Enegex website www.enegex.com.au.
WEBSITE
The company has a website that can be found at www.enegex.com.au where relevant company documents and
information are displayed.
EVENTS SINCE BALANCE DATE
There has been no significant after balance date event up to the date of signing this report.
PROCEEDINGS ON BEHALF OF THE COMPANY
There are no proceedings on behalf of the company.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
A copy of the Auditor’s Independence Declaration, as required under Section 307C of the Corporations Act
2001, is attached on page 28 and forms part of this Directors’ Report for the year ended 30 June 2017.
No fees were paid to the auditor for non-audit services.
Signed in accordance with a resolution of the directors.
RL Clark
Director
Melbourne, 27 September 2017
7
ENEGEX LIMITED
ABN 28 160 818 986
DIRECTORS’ DECLARATION
The directors of the company declare that:
1.
The financial statements, comprising the statement of profit or loss and other comprehensive income,
statement of financial position, statement of cash flows, statement of changes in equity, and accompanying
notes, are in accordance with the Corporations Act 2001 and
(a)
(b)
(c)
comply with Accounting Standards and the Corporations Regulations 2001;
give a true and fair view of the company’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
the financial statements and notes also comply with International Financial Reporting
Standards as disclosed in Note 1(a).
2.
3.
4.
In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable.
The remuneration disclosures included in pages 5 to 6 of the Directors’ Report, (as part of the audited
Remuneration Report), for the year ended 30 June 2017, comply with section 300A of the Corporations
Act 2001.
The directors have been given the declarations by the executive officer and the financial officer required
by section 295A of the Corporations Act.
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:
RL Clark
Director
Melbourne, 27 September 2017
8
ENEGEX LIMITED
ABN 28 160 818 986
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Revenue - interest received
Expenses
Loss before income tax expense
Income tax expense
Loss for the year
Other comprehensive income
Increase in fair value of available-for-sale financial asset
Total comprehensive income for the year
Basic loss per share (cent per share)
Diluted loss per share (cent per share)
NOTE
2017
$
2016
$
2
3
15
15
9,783
(101,090)
________
(91,307)
-
________
8,810
(104,790)
________
(95,980)
-
________
(91,307)
________
(95,980)
________
1,970
________
(89,337)
________
-
________
(95,980)
________
cents
cents
(0.113)
(0.178)
(0.113)
(0.178)
The above Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the
accompanying notes.
9
ENEGEX LIMITED
ABN 28 160 818 986
STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2017
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Available-for-sale financial assets
Exploration and evaluation assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
NOTE
4
5
6
7
8
9
2017
$
2016
$
431,664
3,757
________
609,011
8,776
________
435,421
________
617,787
________
23,104
121,920
________
-
89,580
________
145,024
________
89,580
________
580,445
________
707,367
________
32,857
________
72,392
________
32,857
________
72,392
________
32,857
________
72,392
________
547,588
========
634,975
=======
1,366,891
1,970
(821,273)
________
1,364,941
-
(729,966)
________
547,588
========
634,975
=======
The above Statement of Financial Position is to be read in conjunction with the accompanying notes.
10
ENEGEX LIMITED
ABN 28 160 818 986
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
At 1 July 2016
Cost of Issue (reversal)
Loss for the year
Revaluation of financial asset (net of tax)
Total comprehensive income for the year
Issued
capital
$
Accumul’d
losses
$
AFS
Reserve
$
Total
Equity
$
1,364,941
( 729,966)
-
634,975
1,950
-
-
1,950
-
( 91,307)
-
( 91,307)
-
-
1,970
1,970
-
( 91,307)
1,970
( 89,337)
At 30 June 2017
1,366,891
( 821,273)
1,970
547,588
At 1 July 2015
Transaction with owners in their capacity as
owners
1,096,907
( 633,986)
-
462,921
Issue of shares
Cost of issue
Loss for the year
321,998
-
-
321,998
( 53,964)
-
-
( 53,964)
-
( 95,980)
-
( 95,980)
Total comprehensive income for the year
-
( 95,980)
-
(95,980)
At 30 June 2016
1,364,941
( 729,966)
-
634,975
The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
11
ENEGEX LIMITED
ABN 28 160 818 986
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers
Interest received
NOTE
2017
$
2016
$
(111,966) (136,932)
9,553
________
10,293
________
Net cash outflow in operating activities
(i)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to suppliers - exploration
Payments for investments
Net cash outflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares
Costs of share issue
Net cash (outflow) / inflow from financing activities
Net (decrease) / increase) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
CASH AND CASH EQUIVALENTS AT YEAR END
4
(101,673)
________
(127,379)
________
(32,340)
(21,134)
________
(22,947)
-
________
(53,474)
________
(22,947)
________
-
(22,200)
________
321,998
(29,814)
________
(22,200)
________
292,184
________
(177,347)
609,011
________
431,664
=======
141,858
467,153
________
609,011
=======
(i) RECONCILIATION OF LOSS TO NET CASH OUTFLOW IN OPERATING ACTIVITIES
Loss after income tax
Changes in Assets and Liabilities:
Decrease in payables
Decrease / (increase) in receivables
Net cash outflow from operating activities
(91,307)
(95,980)
(15,385)
5,019
________
(101,673)
=======
(28,850)
(2,549)
________
(127,379)
=======
The above Statement of Cash Flows is to be read in conjunction with the accompanying notes.
12
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2017
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
Enegex Limited (“Enegex” or ‘the company”) is a for-profit company incorporated and domiciled in Australia with its
registered office and principal place of business located at Level 21, 500 Collins Street, Melbourne, Victoria 3000.
The financial report of the company for the year ended 30 June 2017 comprises the company and its interest in joint
operations.
The principal activity of the company during the year was exploration for petroleum in Australia and has remained
unchanged since incorporation.
The financial report was authorised for issue by the directors on 27 September 2017.
(a) Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian
Accounting Standards, including the Accounting Interpretations, issued by the Australian Accounting Standards Board
(‘AASB’) and the Corporations Act 2001. The financial report of the company complies with International Financial
Reporting Standards and interpretations adopted by the International Accounting Standards Board.
(b) Basis of preparation
The financial report is presented in Australian dollars which is the company’s functional currency and is prepared on
the accrual and historical cost basis.
The preparation of a financial report in conformity with Australian Accounting Standards requires management to
make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of Australian Accounting Standards that have a significant effect
on the financial report and estimates with a significant risk of material adjustment in the next year are discussed in
note 1(n).
The accounting policies set out below have been applied consistently to all periods presented in the financial report.
(c) Exploration and evaluation expenditure
Exploration and evaluation assets, including the costs of acquiring permits or licences, are capitalised as exploration
and evaluation assets on an area of interest basis. Exploration and evaluation assets are only recognised if the rights to
tenure of the area of interest are current and either:
(i) the expenditures are expected to be recouped through successful development and exploitation of the area of
interest, or alternatively, by its sale or partial sale: or
(ii) activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in,
or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if the facts and circumstances suggest that the carrying
amount of an exploration and evaluation asset may exceed its recoverable amount. One or more of the following facts
and circumstances indicate that an entity should test exploration and evaluation assets for impairment (the list is not
exhaustive):
(i) the exploration and evaluation tenure right has expired or are expected to expire in the near future, and is not
expected to be renewed.
13
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Exploration and evaluation expenditure (continued)
(ii) substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is
neither budgeted nor planned.
(iii) exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the
specific area.
(iv) sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by
sale.
Proceeds from the sale of exploration permits or recoupment of exploration costs from farmin arrangements are
credited against exploration costs previously capitalised. Any excess of the proceeds overs costs recouped are
accounted for as a gain on disposal.
Restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are provided
for as part of the cost of those activities. Costs are estimated on the basis of current legal requirements, anticipated
technology and future costs that have been discounted to their present value. Estimates of future costs are reassessed
at each reporting date.
(e) Trade and other receivables
Trade receivables are recognised at original invoice amounts less an allowance for uncollectible amounts and have
repayment terms between 30 and 90 days. Collectability of trade receivables is assessed on an ongoing basis. Debts
which are known to be uncollectible are written off. An allowance is made for doubtful debts where there is objective
evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in
payment) that the company will not be able to collect all amounts due according to the original terms.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and at call bank deposits. Bank overdrafts that are repayable on
demand and form an integral part of the company’s cash management are included as a component of cash and cash
equivalents for the purpose of the statement of cash flows.
(g) Impairment of assets
The carrying amounts of the company’s assets are reviewed at each statement of financial position date to determine
whether there are indicators of impairment. At each reporting date the company assesses whether there is any
indication that individual assets are impaired. Where impairment indicators exist, recoverable amount is determined
and impairment losses are recognised in profit or loss where the asset's carrying value exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount is determined for
the cash-generating unit to which the asset belongs.
(h) Share capital
Ordinary share capital is recognised at the fair value of the consideration received by the company. Transaction costs
arising on the issue of ordinary shares are recognised directly in equity as a reduction of the consideration received,
net of any related income tax benefit.
(i) Provisions
A provision is recognised in the statement of financial position when the company has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
14
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2016
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued)
(j) Trade and other payables
Trade, accruals and other payables are recorded initially at fair value and subsequently at amortised cost. Trade
payables are non-interest bearing and are normally settled on 60-day terms.
(k) Revenue
Revenue is recognised at the fair value of consideration received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances and duties and taxes paid. The following specific recognition criteria must also be met
before revenue is recognised:
Interest
Revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the
effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life
of the financial asset.
(l) Income tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in profit or
loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided using the statement of financial position liability method, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes.
The initial recognition of assets or liabilities that do not affect accounting nor taxable profit is not provided for in
determining deferred tax amounts. The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively
enacted at the statement of financial position date. A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against which the asset can be applied. Deferred tax assets are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
The Company recognises deferred tax assets arising from unused tax losses of the company to the extent that is
probable that future taxable profits of the company will be available against which the asset can be utilised.
(m) Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised
as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. 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. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the taxation authority.
(n) Accounting estimates and judgements
Management determine the development, selection and disclosure of the company’s critical accounting policies and
estimates and the application of these policies and estimates. There are no estimates and judgements that are
considered to have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year.
15
ENEGEX LIMITED
ABN 28 160 818 986
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Accounting estimates and judgements (continued)
The estimated amounts represent the higher end of possible future expenditure. Work requirements achieved by farm-
ins materially reduce the level of expenditure incurred by the company to comply with work program commitments.
Management has determined that realisation of the estimated deferred tax asset arising from tax losses and temporary
differences is not probable and has not brought to account the asset at balance date (Note 3).
Per Note 1(c) and 1(g) management exercise judgement as to the recoverability of exploration expenditure. Any
judgement may change as new information becomes available. If, after having capitalised exploration and evaluation
expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by future sale or
exploitation, then the relevant capitalised amount will be written off through profit or loss and other comprehensive
income.
Management have determined that there are no impairment indicators for the capitalised exploration and evaluation
expenditure relating to WA-54-R (note 7) relying upon and applying the tests contained in AASB 6.20, in particular
on the basis that the Cornea Joint Venture continues to undertake work to address Cornea’s key barriers to
commercialisation.The objective of the current work activities is to support design of a production test well to achieve
economic production. The Joint Venture has applied to the regulator to vary the conditions of the Retention Lease to
move the timing for a production test well from the current year (May 17-May 18) so that integrated reservoir
modelling and facilities work using the recently identified low-capex development concept can be completed in order
to design a production test well capable of delivering sufficient threshold productivity to demonstrate economic
viability for the development of the field.
(o) Joint Operations
Interest in joint operations is brought to account, by including in the respective classifications, the company’s share of
individual assets employed, liabilities, income and expenses incurred. Where the company is acquiring or disposing
of a joint operation interest the company’s share of joint operation assets is based on the contributions made to the
joint operation.
(p) Fair value
Fair values may be used for financial asset and liability measurement as well as for sundry disclosures. Fair values for
financial instruments traded in active markets are based on quoted market prices at statement of financial position
date. The quoted market price for financial assets is the current bid price and the quoted market price.
The fair value of financial instruments that are not traded in an active market are determined using valuation
techniques. Assumptions used are based on observable market prices and rates at balance date. Estimated discounted
cash flows are used to determine fair value of the remaining financial instruments.
The carrying value (less impairment provision of trade receivables and payables) are assumed to approximate their fair
values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available to the company for
similar financial instruments
(q) Foreign Currency Translation
The functional and presentation currency of the company is Australian dollars (A$).
Foreign currency transactions are translated into the functional currency using the exchange rates ruling at the date of
the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of
exchange ruling at the statement of financial position date. Foreign exchange gains and losses resulting from settling
foreign currency transactions, as well as from restating foreign currency denominated monetary assets and liabilities,
are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges or where they
relate to differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date
when fair value was determined.
16
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2017
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued)
(r) Earnings per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to members of Enegex, adjusted for the after-
tax effect of preference dividends on preference shares, if any, classified as equity, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares during the year.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings by the after-tax
effect of dividends and interest associated with dilutive potential ordinary shares. The weighted average number of
shares used is adjusted for the weighted average number of ordinary shares that would be issued on the conversion of
all the dilutive potential ordinary shares into ordinary shares.
(s) New and revised accounting standards issued not yet effective
The company has adopted all of the new and revised Accounting Standards issued by the Australian Accounting
Standards Board (AASB) that are relevant to its operations and effective for annual reporting periods beginning on 1
July 2016.
The Directors do not believe that new and revised standards issued by AASB (that are not as yet effective) will have
any material financial impact on the financial statements.
17
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2017
NOTE 2 EXPENSES
Audit and other related fees
Consultants fees
Office costs
Stock exchange and registry costs
Other expenses
NOTE
17
NOTE 3 INCOME TAX BENEFIT
Components of income tax benefit
Current tax benefit
Deferred tax relating to the origination and reversal of temporary differences
Deferred tax asset not brought to account
Income tax benefit
Reconciliation between tax benefit and pre-tax loss
Loss before tax
Income tax using statutory income tax rate of 30% (2016: 30%)
Tax benefit
Deferred tax asset not brought to account
Income tax benefit
Unrecognised deferred tax asset
The estimated deferred tax asset arising from tax losses and temporary differences
not brought to account at balance date as realisation of the benefit is not probable:
Tax losses carried forward
Temporary differences
2017
$
2016
$
25,000
12,275
25,652
21,264
16,899
________
24,660
7,378
26,176
26,878
19,698
________
101,090
=======
104,790
=======
(27,392)
-
27,392
________
-
=======
(91,307)
=======
(27,392)
________
(27,392)
27,392
________
-
=======
(28,794)
-
28,794
________
-
=======
(95,980)
=======
(28,794)
________
(28,794)
28,794
________
-
=======
950,960
(110,563)
________
840,397
=======
809,007
(79,050)
________
729,957
=======
18
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2017
NOTE 4 CASH AND CASH EQUIVALENTS
Cash at bank and on hand
2017
$
2016
$
431,664
________
431,664
=======
609,011
________
609,011
=======
Cash and cash equivalents are subject to interest rate risk as they earn floating rates. The bank deposit is at call in
2017.
NOTE 5 TRADE & OTHER RECEIVABLES
Other receivables
3,757
________
3,757
=======
8,776
________
8,776
=======
The carrying amount of all receivables is equal to their fair value as they are short term. None of the receivables are
impaired or past due. The maximum credit risk for the company is the gross value of all receivables. All receivables
are non-interest bearing.
NOTE 6 AVAILABLE-FOR-SALE FINANCIAL ASSETS
Investments in listed equities
Balance at beginning of year
Purchase of listed equities
Net revaluation increment
Balance at end of year
NOTE 7 EXPLORATION AND EVALUATION ASSETS
Balance at beginning of year
Expenditure for the year
Balance at end of year
-
21,134
1,970
________
23,104
=======
-
-
-
________
-
=======
89,580
32,340
________
121,920
=======
66,383
23,197
________
89,580
=======
Exploration and evaluation assets relate to the areas of interest in the exploration phase for petroleum retention lease
WA-54-R. (2016: WA-54-R).
WA-54-R is held through joint operations and details of interests held in the permits can be found in Note 10.
NOTE 8 TRADE AND OTHER PAYABLES
Other payables and accrued expenses
Director-related entities – other payables (Note 12)
14,746
18,111
21,186
51,206
________ ______
72,392
======
32,857
=======
Trade payables are current liabilities which result in their fair value being equal to the current carrying amount.
Information about the company’s exposure to foreign exchange risk in relation to other trade payables and accrued
expenses, including sensitivities to changes in foreign exchange rates, is provided in Note 14.
19
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2017
NOTE 9 ISSUED CAPITAL
Issued Capital
Ordinary shares fully paid
Ordinary Shares
Movements during the year
Balance at beginning of year
Shares issued:
- Per rights issue
- Costs of issue
Balance at end of year
* Partial reversal of 2016 cost
2017
Shares
2017
$
2016
Shares
2016
$
80,499,737
1,364,941
========= ========
80,499,737 1,364,941
========= ========
80,499,737
1,364,941
53,666,491 1,096,907
-
-
________
-
1,950*
________
26,833,246
-
321,998
(53,964)
________ ________
80,499,737
1,366,891
========= ========
80,499,737 1,364,941
========= ========
Ordinary Shares
Ordinary shares entitle the holder to receive dividends as declared and, in the event of winding up 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. The company does not have a limited authorised capital and issued shares have no par value.
Share Options
No options were on issue during the year and to the date of this report.
NOTE 10 INTEREST IN JOINT OPERATIONS
The company has an interest in the assets, liabilities and output of joint operations for the exploration and
development of petroleum in Australia. The company has taken up its share of joint operations transactions based on
the company’s contributions to the joint operations. Expenditure commitments in respect of the joint operations are
disclosed in Note 13. Details of the company’s interests in the joint operations are:
Cornea Joint Venture – WA-54-R
14.875%
-
14.875%
Assets and liabilities of the joint operations are included in the financial statements as follows:
Interest
30/6/2017
Interest
Interest
Acquired 30/6/2016
(Disposed)
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration costs
TOTAL ASSETS
20
2017
$
2016
$
1,372
1,119
________
2,491
9,846
197
________
10,043
121,920
________
124,411
=======
89,580
________
99,623
=======
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2017
2017
$
2016
$
NOTE 10 INTEREST IN JOINT OPERATIONS (Continued)
Assets and liabilities of the joint operations are included in the financial statements as follows:
CURRENT LIABILITIES
Trade and other payables
Trade and other payables – director related
TOTAL LIABILITIES
-
7,910
________
7,910
=======
367
9,580
________
9,947
=======
There are no contingent liabilities in any of the joint operations. Minimum work requirements in exploration permit
interests held in joint operations is estimated at reporting date and is shown at Note 13.
NOTE 11 KEY MANAGEMENT PERSONNEL
Non-executive Directors
EG Albers
AP Armitage
Executive Director
RL Clark
AP Armitage was appointed 11 April 2017. GA Menzies resigned 11 April 2017.
During the year the only persons that met the definition of key management personnel were the directors. The
company has no employees.
Fees paid to PA Armitage, EG Albers and RL Clark in their capacities as consultants or service providers to Enegex are
disclosed below in the Related Party Note 12. Fees paid to directors are summarised in the table below and detailed in the
Remuneration Report section of the Directors’ Report.
Individual compensation disclosures
Information regarding individual director’s compensation is provided in the Remuneration Report section of the
Directors’ Report. In summary form:
Short Term
Year
2017
2016
Directors
Fees
$
-
-
Other Fees
$
-
-
Post
Employment
Super-
annuation
$
-
-
Equity
Settled
Total
Options
$
-
-
$
-
-
TOTAL
NOTE 12 RELATED PARTY TRANSACTIONS
Director-related Entities
Companies in which an Enegex director controls or significantly influences, that provide services to the company or to
a joint operation in which the company has an interest.
(i) During the year services were provided under normal commercial terms and conditions by:
Gresham Management Pty Ltd (Gresham), a director-related entity of GA Menzies
Samika Pty Ltd (Samika), a director-related entity of RL Clark
Exoil Limited (Exoil), a director-related entity of EG Albers
Natural Resources Group (NRG), a director-related entity of EG Albers
21
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2017
NOTE 12 RELATED PARTY TRANSACTIONS (Continued)
Octanex Limited (Octanex), a director-related entity of EG Albers
Service Provided
2017
2016
Gresham
Samika
Exoil
NRG
Octanex
Management and consulting services to the Company
Consulting services to the Company
Office rental and services
Management of exploration tenements
Accounting and company secretarial services
$
-
14,274
28,020
10,064
9,456
$
13,809
5,065
20,727
8,925
11,365
The group holds an interest in a petroleum joint venture with certain director-related entities:
• As a participant of the Cornea Joint Venture with Cornea Petroleum Pty Ltd, Cornea Oil & Gas Pty Ltd,
Coldron Pty Ltd, Octanex Cornea Pty Ltd, Moby Oil & Gas Pty Ltd, Octanex Limited, Cornea Resources
Pty Ltd and Auralandia Pty Ltd, all director-related entities of EG Albers.
(ii) Amounts payable to related parties including those under joint venture arrangements:
Payables
Natural Resources Group Pty Ltd
Exoil Pty Ltd
Samika Pty Ltd
Octanex Limited
TOTAL LIABILITIES
2017
$
2016
$
7,066
6,480
181
4,384
________
18,111
=======
35,490
6,315
2,430
6,971
________
51,206
=======
NOTE 13 EXPLORATION AND EVALUATION PERMIT COMMITMENTS
Estimated expenditure to satisfy contractual and permit work obligations
Not later than 1 year
WA-54-R
Later than 1 year but not later than 3 years
WA-54-R
37,188 46,484
======
======
6,098,750 6,015,078
=======
=======
Estimated, arising from retention lease work programme which, may, subject to negotiation and approval, be varied.
They may also be satisfied by farmout, sale, relinquishment or surrender.
22
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2017
NOTE 14 FINANCIAL INSTRUMENTS
Purchases and sales of financial assets and financial liabilities are recognised on trade date; the date on which the
company commits to purchase or sell the financial assets or financial liabilities. Financial assets are derecognised
when the rights to receive cash flows from the financial assets have expired or have been transferred and the company
has transferred substantially all the risks and rewards of ownership.
Exposure to credit, interest rate, liquidity and currency risks arises in the normal course of the company’s business.
The company’s overall risk management approach is to identify the risks and implement safeguards which seek to
minimise potential adverse effects on the financial performance of the company.
Credit risk
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to
meet its contractual obligations. At balance date there were no significant concentrations of credit risk for the
company. The maximum exposure to credit risk of financial assets is represented by the carrying amounts of each
financial asset in the statement of financial position.
Interest rate risk
All financial liabilities and financial assets at floating rates expose the company to cash flow interest rate risk. The
company has no exposure to interest rate risk at balance date, other than in relation to cash and cash equivalents which
attract a floating interest rate. Details of cash and cash deposits can be found in Note 4. At balance date a 1% (100
basis point) increase/ decrease in the interest rate would improve / worsen the company’s post tax profit by $3,022
(2016: $4,264)
Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. Liquidity
risk is monitored to ensure sufficient monies are available to meet contractual obligations as and when they fall due.
All financial assets and liabilities have a maturity date of less than 12 months.
Foreign currency risk
The company is exposed to foreign currency risk arising on purchases that are denominated in a currency other than
the Australian dollar functional currency. The company incurs seismic, exploration and well costs in US dollars. The
risk is measured using sensitivity analysis and cash flow forecasting and monitored by management when seismic and
drilling programs are current. To this extent, the company is exposed to exchange rate fluctuations between the
Australian and US dollar.
As at 30 June 2017 the company has no US dollars in cash at bank.
Capital Management
When managing capital, directors’ objective is to ensure the entity continues as a going concern as well as to maintain
optimal returns to shareholders and benefits for other stakeholders.
It is the company’s plan that capital will be raised by any one or a combination of the following manners: placement of
shares to excluded offerees, pro-rata issue to shareholders, the exercise of outstanding options, and/or a further issue
of shares. Should these methods not be considered to be viable, or in the best interests of shareholders, then it would
be the company’s intention to meet its exploration obligations by either partial sale of its interests or farmout, the latter
course of action being part of its overall strategy.
The company is not subject to any externally imposed capital requirements.
23
ENEGEX LIMITED
ABN 28 160 818 986
NOTES TO THE FINANCIAL STATEMENTS
30 JUNE 2017
NOTE 15 SEGMENT INFORMATION
The company has adopted AASB 8 Operating Segments whereby segment information is presented using a
'management approach', i.e. segment information is provided on the same basis as information used for internal
reporting purposes by the board of directors
At regular intervals the board is provided management information at a company level for the company’s cash
position, the carrying values of exploration permits and a company cash forecast for the next twelve months of
operation.
On this basis, no segment information is included in these financial statements.
All interest received has been derived in Australia. All exploration and evaluation assets are held in Australia.
NOTE 16 LOSS PER SHARE
The following reflects the loss and share data used in
the calculation of basic and diluted loss per share:
Net Loss
The weighted average number of shares used for the purposes
of calculating diluted earnings per share reconciles to the
number used to calculated basic earnings per share as follows:
2017
$
(91,307)
2016
$
(95,980)
Weighted
Average
Number of
Shares
Weighted
Average
Number of
Shares
Basic and diluted loss per share
80,499,737
53,945,391
NOTE 17 AUDITOR’S REMUNERATION
Amounts received or due and receivable by the auditor
of the Company for:
Audit of the full year and review of the half year
financial reports
Other assurance services
2017
$
2016
$
25,000
-
______
25,000
======
24,660
-
______
24,660
======
NOTE 18 EVENTS SINCE BALANCE DATE
There are no significant after balance date events up to the signing of this report.
24
The Rialto, Level 30
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Melbourne Victoria 3000
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W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Enegex Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Enegex Limited (the “Company”), which comprises the
statement of financial position as at 30 June 2017, the statement of profit or loss and other
comprehensive income, statement of changes in equity and statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion, the accompanying financial report of Enegex Limited, is in accordance with the
Corporations Act 2001, including:
a Giving a true and fair view of the Company’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Company in accordance with
the independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the “Code”) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Exploration and Evaluation Assets – valuation
Note 7
At 30 June 2017 the carrying value of Exploration
and Evaluation Assets was $121,920.
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the company is
required to assess at each reporting date if there are
any triggers for impairment which may suggest the
carrying value is in excess of the recoverable value.
The process undertaken by management to assess
whether there are any impairment triggers in each
area of interest involves an element of management
judgement.
-
This area is a key audit matter due to the valuation of
exploration and evaluation assets being a significant
risk.
Our procedures included, amongst others:
Obtaining the management prepared reconciliation
of capitalised exploration and evaluation
expenditure and agreeing to the general ledger;
Conducting a detailed review of management’s
assessment of trigger events prepared in
accordance with AASB 6 including;
-
Tracing projects to statutory registers and
exploration licenses to determine whether a
right of tenure existed;
Enquiry of management regarding their
intentions to carry out exploration and
evaluation activity in the relevant exploration
area, including review of managements’
budgeted expenditure;
- Understanding whether any data exists to
suggest that the carrying value of these
exploration and evaluation assets are unlikely
to be recovered through development or sale;
and
Reviewing the appropriateness of the related
disclosures within the financial statements.
Information Other than the Financial Report and Auditor’s Report Thereon
The Directors are responsible for the other information. The other information comprises the
information included in the Company’s annual report for the year ended 30 June 2017, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard
Responsibilities of the Directors’ for the Financial Report
The Directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the Directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our
auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 5 to 6 of the directors’ report for the
year ended 30 June 2017.
In our opinion, the Remuneration Report of Enegex Limited, for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
A R J Nathanielsz
Partner - Audit & Assurance
Melbourne, 27 September 2017
The Rialto, Level 30
525 Collins St
Melbourne Victoria 3000
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF ENEGEX LIMITED
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor
for the audit of Enegex Limited for the year ended 30 June 2017, I declare that, to the best of my
knowledge and belief, there have been:
a
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
A R J Nathanielsz
Partner - Audit & Assurance
Melbourne, 27 September 2017
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.
ENEGEX LIMITED
ABN 28 160 818 986
CORPORATE GOVERNANCE
The Board is responsible for the strategic direction of the Company, the identification and implementation of
corporate policies and goals, and the monitoring of the business and affairs of the Company on behalf of its
shareholders.
The Board delegates responsibility for the day-to-day management of Enegex to the Chief Executive Officer. All
Directors have unrestricted access to Company records and information and receive detailed financial and operational
reports.
The Board is currently comprised of two Non- Executive Directors and one Executive Director. In accordance with
the Company’s Constitution and the ASX Listing Rules, the Directors (other than the Chief Executive Officer) are
subject to re-election by shareholders every three years.
The Board meets regularly throughout the year. Where appropriate, presentations are given to the Board from
management who may be questioned directly by Board members on technical, operational and commercial issues.
Details of the Company’s corporate governance practices are included in the Corporate Governance statement found
on the Company’s website.
SHAREHOLDER AND OTHER INFORMATION
COMPILED AS AT 25 SEPTEMBER 2017
VOTING RIGHTS
At meetings of members or classes of members:
(a)
each member entitled to vote may vote in person or by proxy, attorney or representative;
(b)
on a show of hands, every person present who is a member or a proxy, attorney or representative of a member
has one vote; and
(c)
on a poll, every person present who is a member or a proxy, attorney or representative of a member has:
(i)
(ii)
for each fully paid share held by him, or in respect of which he is appointed a proxy, attorney or
representative, one vote for the share;
for each partly paid share, only the fraction of one vote which the amount paid (not credited) on the
share bears to the total amounts paid and payable on the share (excluding amounts credited),
subject to any rights or restrictions attached to any shares or class or classes of shares.
DISTRIBUTION OF ORDINARY SHARES
Numbers of members by size of holding and the total number of shares on issue:
Ordinary Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
TOTAL ON ISSUE
No. of Holders
No. of Shares
200
314
212
430
72
1,228
63,804
957,522
1,663,273
14,125,019
63,690,119
80,499,737
920 holders held less than a marketable parcel of ordinary shares. There is no current on-market buy-back.
29
ENEGEX LIMITED
ABN 28 160 818 986
SHAREHOLDER AND OTHER INFORMATION (continued)
COMPILED AS AT 25 SEPTEMBER 2017
SUBSTANTIAL SHAREHOLDERS
As disclosed in notices given to the Company.
Name of Substantial Shareholder
Interest in Number of Shares
Beneficial and non-beneficial
Albers Group
Ross Di Bartolo
32,639,070
8,815,126
% of Shares
40.55
10.95
THE 20 LARGEST HOLDERS OF ORDINARY SHARES
Holder
Ordinary Shares
% of Total Issued
Mr Ernest Geoffrey Albers
Mr Ross Di Bartolo
Auralandia Pty Ltd
Gascorp Australia Pty Ltd
Sacrosanct Pty Ltd
Small Business Finance Pty Ltd
Australis Finance Pty Ltd
Strata Resources Pty Ltd
Mr Ianaki Semerdziev
TRE Pty Ltd
ICM Investments Pty Ltd
Peppercorn Hill Pty Ltd
Pillage Investments Pty Ltd
Albers Custodian Company Pty Ltd
Mr Harley Rexhep
Mr Vincenzo Brizzi & Mrs Rita Lucia Brizzi
500 Custodian Pty Ltd
EERC Australasia Pty Ltd
Appledore Custodians Limited
Relativity Pty Ltd
14,690,467
8,815,126
5,000,000
4,750,000
2,273,886
2,150,000
1,871,078
1,769,332
1,407,000
1,345,942
1,311,233
1,125,000
1,000,000
987,906
966,667
931,279
765,000
648,750
632,813
603,333
18.25%
10.95%
6.21%
5.90%
2.82%
2.67%
2.32%
2.20%
1.75%
1.67%
1.63%
1.40%
1.24%
1.23%
1.20%
1.16%
0.95%
0.81%
0.79%
0.75%
The 20 largest shareholders hold 53,044,812 shares representing 65.89% of the issued share capital.
30