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EPI (Holdings) LtdENEGEX LIMITED ABN 28 160 818 986 CORPORATE DIRECTORY CONTENTS Chairman’s Review……………………………..……1 Directors’ Report ...................................... 2 Remuneration Report ............................. 10 Corporate Governance ............................ 12 Directors’ Declaration ............................ 14 Statement of Profit or Loss and Other Comprehensive Income ................ 15 Statement of Financial Position .............. 16 Statement of Changes in Equity ............. 17 Statement of Cash Flows ........................ 18 Notes to the Financial Statements .......... 19 Audit Report ........................................... 34 Auditor’s Independence Declaration ...... 37 Shareholder and Other Information ........ 38 E.G Albers (Chairman) R.L. Clark A.P. Armitage COMPANY SECRETARY R.J. Wright Registered Office and Principal Administration Office 108 Marlborough Street, Bentleigh East Victoria 3165, Australia Telephone: Facsimile: Email: Website: +61 (0)3 8610 4713 +61 (0)3 8610 4799 www.enegex.com.au admin@enegex.com.au Auditor Grant Thornton Audit Pty Ltd Collins Square, Tower 5 727 Collins Street Melbourne, Victoria 3008 Australia 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 ASX Code: ENX Ordinary Shares Incorporated in the State of Victoria 17 October 2012 ENEGEX LIMITED ABN 28 160 818 986 CHAIRMAN’S REVIEW Enegex Limited (“Enegex”) is a resources company with its focus being to seek opportunities that may be created by new technologies and techniques in energy generation, transmission and storage, with a particular emphasis on the natural resources required to advance those new technologies. In recent months, Enegex investigated and identified exploration opportunities in the South-West Terrane of Western Australia, which is emerging as a substantial mineral province. Enegex has secured a tenement application position covering more than 3,500km2. Enegex believes the exploration licence applications offer the opportunity for the discovery of a wide range of minerals. Following the grant of exploration licences, Enegex intends to conduct exploration activities with a multi-commodity approach, with the immediate focus being on magmatic Ni-Cu-PGE deposits, porphyry Cu-Au deposits and Au deposits. It will also be vigilant regarding the potential for pegmatite Li-Ta-Sn deposits and ion absorption REE deposits. Enegex is also continuing to progress its applications for two exploration licenses in the eastern margin of the East Kimberley Basin of Western Australia targeting Vanadium, Cobalt-Nickel, PGE and Fluorite mineralisation. I thank my co-directors for their support during the year and welcome to our register new shareholders resulting form our recent share placement. E.G. Albers Chairman 17 September 2020 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 (“Enegex”, “the Company” or “the Group”) for the year ended 30 June 2020. PRINCIPAL ACTIVITY The principal activity of the company during the financial year ended 30 June 2020 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 2020 of $202,987 (2019: $307,079). SIGNIFICANT CHANGES IN STATE OF AFFAIRS Other than outlined in this report 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 highly dependent on success in the permit areas in which the company holds an interest. REVIEW OF FINANCIAL POSITION At 30 June 2020, the company had a working capital (current assets less current liabilities) deficit of $69,085 (2019: Surplus $133,902). 2 New Initiative in an Emerging Province of the South West Terrane During the year, Enegex initiated a major exploration play in the South West Terrane, Western Australia, which it expanded with further exploration licence applications in August 2020, to cover an area of over 3,550km2. ENEGEX LIMITED ABN 28 160 818 986 REVIEW OF OPERATIONS South West Terrane Initiative • 100% interest in 4 projects areas comprising 20 tenement applications over 3,550km2 • Proximal to Perth with very good infrastructure • Located on uplifted margin of Yilgarn Block • Laterite and residual and transported soils obscure the Archean bedrock geology • Julimar Complex (26km long) completely hidden beneath laterite profile 4 Located proximal to Perth, the South West Terrane is an emerging mineral province of importance following the recent discovery of palladium and nickel mineralisation by Chalice Gold Mines Limited at its Julimar Project and Caraval Minerals Ltd’s Caraval copper deposit. Based on regional geophysical and geological data, Enegex’s northern exploration licence applications are interpreted to contain mafic and ultramafic igneous intrusions considered to be similar to the Julimar intrusion hosting the high-grade Ni-Cu-PGE mineralization discovered by Chalice to the south. 3 ENEGEX LIMITED ABN 28 160 818 986 Historically, the Greenhills project area has received very little exploration for any mineral commodity. Previous exploration has been focussed on bauxite and kaolin, and to a lesser extent, copper and gold. Previous geological mapping identified the presence of small ultramafic intrusions and mafic rocks (amphibolite, mafic gneiss, mafic granulite, hornblendite) of uncertain geological affinities. Regional laterite sampling programmes by the Geological Survey of Western Australia and Amira during the 1990’s revealed the presence of anomalous Ni, Cu, Cr, Zn and Au which identifies the project area as being of exploration interest. It is, for example, the closest regional laterite Au-Cu anomaly to the Boddington laterite Au-Cu anomaly. 4 ENEGEX LIMITED ABN 28 160 818 986 The geology of the South West Terrane is a complex mix of Archean high-grade metamorphic gneisses and highly radioactive granites with widespread enclaves of greenstone and dismembered layered mafic and ultramafic intrusions. Proterozoic tectonic events, mainly evident from mafic dyke swarms, have also impacted the terrane. In general, the Archaean bedrock geology is not well known as it is blanketed by laterite soil profiles and transported sands. The Julimar and Caraval deposit discoveries, together with an improved geological and geophysical understanding of the South West Terrane, are changing perceptions regarding the prospectivity of the South West Terrane: • The Julimar Ni-PGE-Cu deposit discovery, made by Challis Gold Mines, is associated with a magnetic layered gabbroic complex. Similar gabbroic bodies with similar magnetic features, such as Yarawindah Brook and Coates Siding, are also attracting increased exploration attention, as are various ultramafic bodies in the terrane. • The discovery by Caravel Minerals Ltd of the Caraval Cu deposits (366 million tonnes at 0.35% Cu1), hosted by granite, has attracted increased exploration attention for ancient porphyry Cu-Au deposits in the terrane. • The giant Boddington gold deposit, generally considered to be a porphyry Au-(Cu-Mo-Bi- W) deposit, is associated with a late-stage diorite intrusion. • The Greenbushes lithium mine, hosted by granitic pegmatite, has been a long-lived mining operation for lithium, tantalum and tin and is recognized as the world’s largest commercial lithium resource. • The South West Terrane has long been recognized as one of the world’s premier bauxite mining provinces. Enegex believes that the combination of the presence of wide-spread highly radioactive granitoids and a deeply weathered laterite profile covering large areas of the South West Terrane is also an attractive environment for the discovery of ion adsorption REE deposits. In summary, the South West Terrane contains large mines and mineral resources in a favourable geographical location endowed with excellent infrastructure (including a proposed REE processing plant). However, it remains little explored, especially for magmatic Ni-Cu-PGE, porphyry Cu-Au-Mo and Au deposits. Enegex’s new project areas contain interpreted Archaean gneisses and granites and numerous pronounced and subtle magnetic anomalies interpreted to be a combination of greenstone enclaves and mafic and ultramafic intrusions. The Miamoon project area is dominated by a regolith of transported sand and residual laterite overlying a number of unexplained magnetic anomalies which attract comparisons to the Julimar magnetic anomaly. The Walebing and Miling project areas, while dominated by a regolith of transported sand and residual laterite, contain outcropping ultramafic and mafic rocks. 1 Combined Indicated and Inferred Mineral Resources, Source: Caravel Minerals announcement 3 February 2019 https://caravelminerals.com.au/wp-content/uploads/2019/02/2019-02-13-Major-Increase-in-Caravel-Copper-Resource.pdf 5 ENEGEX LIMITED ABN 28 160 818 986 Although the South West Terrane contains a prestigious suite of mineral resources and mines, it has been subject to limited exploration. The tenement package acquired by Enegex has received little exploration attention from previous explorers. Bindi Bindi Ni target Yarawindah Ni-PGE-Cu Julimar Ni-PGE-Cu Caravel Cu Resource 366Mt at 0.35% Cu 6 ENEGEX LIMITED ABN 28 160 818 986 Kimberley Basin Exploration Licences Enegex has applied for two exploration license applications in the eastern margin of the Kimberley Basin of Western Australia covering an area of rocks identified as prospective for vanadium, cobalt-nickel, PGE and fluorite mineralisation. The geology of the tenements has been mapped as “Hart Dolerite”, a regionally extensive Proterozoic mafic sill complex which was historically overlooked as a potential nickel target. Previous exploration in the area has been limited to gold and diamonds. Enegex has identified recent advances in geological understanding that have altered perceptions regarding the prospectivity of the Hart Dolerite: • Mapping and exploration of the Speewah Dome, immediately to the north of the Enegex tenement areas, has revealed the Hart Dolerite to be a differentiated layered intrusion (Intrusive Suite) and that the most prospective part of the Intrusive Suite is the Disseminated Magnetite Gabbro unit which hosts the Speewah Dome Vanadium Deposit (adjacent to the Enegex application area). The presence of disseminated gold- and copper- bearing sulphides in the upper magnetite-rich parts of the Intrusive Suite indicates potential for reef-type PGE mineralization. • Regolith sampling by the Geological Survey of Western Australia (GSWA) identified coincident nickel-cobalt anomalies associated with the Hart Dolerite which provides encouragement to explore the intrusion for these metals. 7 ENEGEX LIMITED ABN 28 160 818 986 In the Speewah area the Hart Dolerite was subject to a late-stage epithermal event with carbonate and fluorite overprinting the dolerite. Fluoride is currently being investigated as a potential replacement for lithium in batteries. Limited previous exploration has not determined which portions of the differentiated magmatic sequence of the Intrusive Suite are exposed in the Enegex application areas. Thus, following grant of the exploration licenses, Enegex intends to assess the magmatic stratigraphy of the Intrusive Suite and explore primarily for nickel, copper, cobalt, PGE, gold and fluorite. Both tenements are proceeding through the Native Title Tribunal process. 8 ENEGEX LIMITED ABN 28 160 818 986 DIRECTORS The directors in office during the entire financial year and to the date of this report were: 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, resource exploration and investment. 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 20 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. COMPANY SECRETARY RJ Wright B Bus, CPA – appointed 17 October 2012 Mr Wright is a senior financial professional with over 30 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. 9 ENEGEX LIMITED ABN 28 160 818 986 BOARD AND COMMITTEE MEETINGS There were no formal board and committee meetings held during the year. All matters that required formal Board resolutions were dealt with via written circular resolutions. The directors met and corresponded at numerous times throughout the financial year to discuss the Group’s affairs. The board undertakes all audit committee functions SHARE CAPITAL ORDINARY SHARES No shares were issued during the year to 30 June 2020. On 20 August 2020 the company completed a share placement, issuing 20,000,000 ordinary shares and raising $440,000 before costs and issuing. 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 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 (2019: $Nil). There is no performance related remuneration for directors. Directors’ remuneration paid covers all board activities including serving on committees. 10 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. Short Term Year Direct ors Fees $ - - - - - - - - RL Clark EG Albers 2020 2019 2020 2019 AP Armitage 2020 2019 2020 2019 TOTAL Other Fees $ - - - - - - - - Post Employment Super annuation $ - - - - - - - - Total Equity Settled Options $ - - - - - - - - $ - - - - - - - - Options as percentage of Total - - - - - - - - There were no shares or options issues to directors as part of compensation during the year ended 30 June 2020. Directors’ interests in shares The number of shares in the company held during by each director, including their related parties, is set out below: Directors Held at 1 July 2019 Net Change Other Held At 30 June 2020 EG Albers RL Clark AP Armitage 32,904,849 75,000 - _________ 32,979,849 ========= - - - __________ - ========= 32,904,849 75,000 - __________ 32,979,849 ========= End of Remuneration Report 11 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 industry best practice. 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 On 7 August 2020 the group applied for six additional exploration permits in the South West Terrane, Western Australia, an emerging new Nickle-Copper-Cobalt-PGE province. On 20 August 2020 the company completed a share placement raising $440,000 before costs. On 27 August 2020 the company announced a 1 for 3 pro-rate non-renounceable rights issue to raise up to approximately $737,998. PROCEEDINGS ON BEHALF OF THE COMPANY There are no proceedings on behalf of the company. 12 ENEGEX LIMITED ABN 28 160 818 986 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 37 and forms part of this Directors’ Report for the year ended 30 June 2020. No fees were paid to the auditor for non-audit services. Signed in accordance with a resolution of the directors. R.L. Clark Director Melbourne, 17 September 2020 13 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 2020 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 10 to 11 of the Directors’ Report, (as part of the audited Remuneration Report), for the year ended 30 June 2020, 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: R.L. Clark Director Melbourne, 17 September 2020 14 ENEGEX LIMITED ABN 28 160 818 986 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020 Interest income Interest costs Expenses Loss before income tax expense Income tax expense Loss for the year Items that will not be reclassified subsequently to profit or loss Changes in financial assets at fair value through other comprehensive income Total comprehensive income for the year Basic loss per share (cent per share) Diluted loss per share (cent per share) NOTE 2020 $ 2 3 289 (534) (202,742) (202,987) (202,987) - ________ (202,987) ________ 2019 $ 3,433 - (310,512) (307,079) (307,079) - ________ (307,079) ________ (4,813) ________ (207,800) ________ (3,370) ________ (310,449) ________ cents cents 15 15 (0.252) (0.381) (0.252) (0.381) The above Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the accompanying notes. 15 ENEGEX LIMITED ABN 28 160 818 986 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2020 CURRENT ASSETS Cash and cash equivalents Trade and other receivables Prepayments TOTAL CURRENT ASSETS NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Interest bearing liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY NOTE 2020 $ 2019 $ 4 5 6 7 8 9 10 50,138 5,797 139,688 ________ 139,914 2,809 30,056 ________ 195,623 ________ 172,779 ________ 19,735 24,548 ________ ________ 19,735 24,548 ________ ________ 215,358 ________ 197,327 ________ 134,136 130,572 ________ 38,877 - ________ 264,708 ________ 38,877 ________ (49,350) ======== 158,450 ======== 1,366,891 (1,399) (1,414,842) ________ (49,350) ======== 1,366,891 3,414 (1,211,855) ________ 158,450 ======== The above Statement of Financial Position is to be read in conjunction with the accompanying notes. 16 ENEGEX LIMITED ABN 28 160 818 986 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020 Issued capital Accumulated losses $ $ Financial assets at fair value through other comprehensive income $ Total Equity $ 1,366,891 (1,211,855) 3,414 158,450 - - - (202,987) - (202,987) - (4,813) (4,813) (202,987) (4,813) (207,800) 1,366,891 (1,414,842) (1,399) (49,350) 1,366,891 (904,776) 6,784 468,899 - - - (307,079) - (307,079) - (3,370) (3,370) (307,079) (3,370) (310,449) 1,366,891 (1,211,855) 3,414 158,450 At 1 July 2019 Loss for the year Revaluation of financial asset (net of tax) Total income for the year comprehensive At 30 June 2020 At 1 July 2018 Loss for the year Revaluation of financial asset (net of tax) Total comprehensive income for the year At 30 June 2019 The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes. 17 ENEGEX LIMITED ABN 28 160 818 986 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020 NOTE 2020 $ 2019 $ CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers Interest received Net cash outflow in operating activities (i) CASH FLOWS FROM INVESTING ACTIVITIES Payments to suppliers - exploration Net cash outflow from investing activities CASH FLOWS FROM FINANCING ACITVIITIES Proceeds from borrowings Net Cost inflow from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year CASH AND CASH EQUIVALENTS AT YEAR END 4 (i) RECONCILIATION OF LOSS TO NET CASH OUTFLOW IN OPERATING ACTIVITIES Loss after income tax Exploration expensed Impairment of asset Changes in Assets and Liabilities: Increase in payables Decrease in receivables Net cash outflow from operating activities (202,987) 29,636 - 100,727 (2,988) ________ (75,612) ======= (76,265) 653 ________ (75,612) ________ (99,256) 4,060 ________ (95,196) ________ (120,164) (51,942) ________ ________ (120,164) ______ (51,942) ______ 106,000 ______ 106,000 - _________ - (89,776) 139,914 ________ 50,138 ======= (147,138) 287,052 ________ 139,914 ======= (307,079) 5,315 201,820 4,997 (249) ________ (95,196) ======= The above Statement of Cash Flows is to be read in conjunction with the accompanying notes. 18 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES Enegex Limited (“Enegex” or “the company” or “the group”) is a for-profit company incorporated and domiciled in Australia with its registered office and principal place of business located at 108 Marlborough Street, Bentleigh East, Victoria 3165. The consolidated financial report of the company for the year ended 30 June 2020 comprises the company and its subsidiaries (together referred to as the “consolidated entity” or “the group”) and the consolidated entity’s interest in joint operations. Financial information for Enegex Limited as an individual entity is included in Note 18. The financial report was authorised by the directors for issue on 17 September 2020. The principal activity of the company during the year was natural resources exploration, evaluation and investment. (a) Statement of compliance The consolidated 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 consolidated 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(m). The accounting policies set out below have been applied consistently to all periods presented in the financial report. 19 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 Going concern For the year ended 30 June 2020 the Group incurred a net cash outflow from operating and investing activities of $195,776 (2019: $147,138) and a net loss after tax of $202,742 (2019: $307,079). As at 30 June 2020, the Group has negative working capital of $69,085 (2019: positive $148,231) and a net asset deficiency of $49,350 (2019 net asset surplus $158,450). The financial report has been prepared on a going concern basis. The Group raised $440,000 (before costs) in a share placement completed in August 2020. Directors expect that the Group will raise approximately $737,000 from a rights issue announced 27 August 2020 to enable it to continue to meet its debts, if and when they fall due, for at least 12 months from the signing of the annual financial report. New and revised accounting standards applicable for the first time to the current reporting period The company has adopted all new and revised Australian Accounting Standards and Interpretations that became effective for the first time and are relevant to the company. The adoption of the new and revised Australian Accounting Standards and Interpretations, including AASB 16 leases, has had no impact on the company’s accounting policies or the amounts reported during the current year. (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. ii. 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 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. The tests contained in AASB6.20 are applied to determine whether exploration and evaluation assets are assessed for impairment: 1) the exploration and evaluation tenure right has expired or are expected to expire in the near future, and is not expected to be renewed. 2) substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned. 3) 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. 4) 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. 20 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued) 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. (d) Trade and other receivables and contract assets The company makes uses of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the company uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses using a provision matrix. (e) 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. (f) Impairment of assets The carrying amounts of the company’s assets are reviewed at each reporting date to determine whether there are indicators of impairment. 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. (g) 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. (h) 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. 21 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued) (i) 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. (j) Interest Revenue Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset. (k) 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. 22 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued) (k) Income tax (continued) 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. (l) 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. (m) 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. Other than as disclosed in these notes 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. 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). 23 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued) (m) Accounting estimates and judgements (continued) Per Note 1(c) and 1(f) 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. (n) 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 (o) 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. 24 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (continued) (p) 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. (q) 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 2019. 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. 25 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 2 EXPENSES Audit and other related fees Consultants fees Licence Fees Impairment of exploration asset Office costs Stock exchange and registry costs Other expenses NOTE 3 INCOME TAX BENEFIT Components of income tax benefit Current tax benefit 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% (2019: 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 NOTE 4 CASH AND CASH EQUIVALENTS Cash at bank and on hand 26 NOTE 2020 $ 2019 $ 27,637 15,959 18,979 - 70,011 20,979 49,177 ________ 202,742 ======= (60,896) 60,896 ________ - ======= (202,987) ======= (60,896) 26,650 1,603 - 201,820 22,717 20,878 36,844 ________ 310,512 ======= (92,194) 92,194 ________ - ======= (307,079) ======= (92,124) _______ (60,986) _______ (92,124) 60,896 ________ - ======= 92,124 ________ - ======= 1,590,274 17,399 ________ 1,607,673 ======= 1,268,715 11,221 ________ 1,279,936 ======= 50,138 ===== 139,914 ====== ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 2020 $ 2019 $ NOTE 5 TRADE & OTHER RECEIVABLES Other receivables 5,797 2,809 ________ ________ 2,809 ====== 5,797 ======= The carrying amount of all receivables is equal to their fair value as they are short term. None of the receivables have a loss allowance as there aren’t any expected shortfalls in contractual cash flows. The maximum credit risk for the company is the gross value of all receivables. All receivables are non-interest bearing. NOTE 6 PREPAYMENTS Prepaid tenement rent 139,688 30,056 ________ ________ 30,056 ======= ======= 139,688 The company applied for twelve exploration tenements in May 2020. The company now has fourteen applications in progress. If the tenements are granted rent paid on application will cover rent required on the first year of exploration in all tenements. As at 30 June 2020 and to the date of signing the report the tenements have not been granted. If the tenements are not granted the rent paid on application is fully refundable. NOTE 7 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME Investments in listed equities Balance at beginning of year Net revaluation increment Balance at end of year NOTE 8 TRADE AND OTHER PAYABLES payables Other expenses Director-related entities – other payables (Note 12) accrued and 27,917 24,548 (3,369) (4,813) ________ ________ 19,735 24,548 ======= ======= 28,507 19,344 105,629 19,533 ________ ________ 38,877 ======= ======= 134,136 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 13. 27 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 9 INTEREST BEARING LIABILITIES Line of credit facility - ======= ======= The line of credit facility is from Australis Finance Pty Ltd which has an interest rate of 7% p.a. Australis Finance Pty Ltd is a director-related entity (note 12). 130,572 NOTE 10 ISSUED CAPITAL Issued Capital Ordinary shares fully paid Ordinary Shares Movements during the year Balance at beginning of year Shares issued: costs of issue Balance at end of year 2020 Shares 80,499,737 2020 $ 1,366,891 2019 Shares 80,499,737 2019 $ 1,366,891 80,499,737 - 80,499,737 1,366,891 - 1,366,891 80,499,737 - 80,499,737 1,366,891 - 1,366,891 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 11 KEY MANAGEMENT PERSONNEL Non-executive Directors EG Albers AP Armitage Executive Director RL Clark 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. 28 ENEGEX LIMITED ABN 28 160 818 986 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 Post Employment Equity Settled Total Year 2020 2019 TOTAL Director Fees $ Other Fees $ Superannuation $ - - - - - - Options $ - - $ - - NOTE 12 RELATED PARTY TRANSACTIONS The consolidated financial statements of the Group include: Name 2020 Interest 2019 Interest Country of Incorporation Ellendale South Pty Ltd 100% 100% Diamandia Pty Ltd 100% 100% Australia Australia During the year services were provided under normal commercial terms and conditions by director-related entities as disclosed below together with amounts payable as at 30 June 2020. Entity Related director Service Samika Pty Ltd RL Clark Consulting services Exoil Pty Ltd Natural Resources Group Pty Ltd Octanex Limited EG Albers Accounting and EG Albers Office services EG Albers Management of exploration tenements administrative support Amounts paid 2019 2020 $ $ 2,480 70,011 24,970 744 5,000 - Payable at 30/06/20 $ - 75,417 - 30/06/19 $ 1,215 7,069 744 27,465 21,755 30,212 10,505 102,476 49,949 105,629 19,533 Director – related borrowings During the year the Company borrowed $130,572 (2019: $nil) (note 9) against a line of credit facility from Australis Finance Pty Ltd, with interest rate of 7% p.a. Australis Finance Pty Ltd is a director-related entity of EG Albers. 29 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 13 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. Fair value The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. AASB 13 requires disclosure of fair value measurements by level of the fair value hierarchy, as follows: 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 (i.e. as prices) or indirectly (i.e. derived from prices) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). The consolidated entity’s financial assets measured and recognised at fair value at 30 June 2020 and 30 June 2019 on a recurring basis are as follows: 30 June 2020 Assets Listed securities 30 June 2019 Assets Listed securities Level 1 Level 2 Level 3 $ $ $ Total $ 19,735 - - 19,735 Level 1 Level 2 Level 3 $ $ $ Total $ 24,548 - - 24,548 30 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 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 $351 (2019: $979) Liquidity risk 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 consolidated entity is exposed to foreign currency risk arising from purchases of goods and services that are denominated in a currency other than the Australian dollar functional currency. Data processing by overseas suppliers are usually denominated in US dollars. To this extent, the consolidated entity is exposed to exchange rate fluctuations between the Australian and US dollar. At 30 June 2020 the consolidated entity has no foreign currency exposure (2019: $nil). 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. 31 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 14 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. NOTE 15 LOSS PER SHARE The loss and weighted average number of ordinary shares used in the calculation of basic and dilutive loss per share is as follows: Net Loss for the year The weighted average number of ordinary shares Total basic and dilutive loss per share (cents) NOTE 16 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 2020 $ (202,742) 80,499,737 __________ (0.252) __________ 2019 $ (307,079) 80,499,737 __________ (0.381) __________ 26,637 - ______ 26,637 ====== 26,650 - ______ 26,650 ====== 32 ENEGEX LIMITED ABN 28 160 818 986 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 NOTE 17 EVENTS SINCE BALANCE DATE On 7 August 2020 the group applied for six additional exploration permits in the South West Terrane, Western Australia, an emerging new Nickle-Copper-Cobalt-PGE province. On 20 August 2020 the company completed a share placement raising $440,000 before costs. On 27 August 2020 the company announced a 1 for 3 pro-rate non-renounceable rights issue to raise up to approximately $737,998. NOTE 18 PARENT ENTITY INFORMATION The following details information related to the parent entity, Enegex Limited at 30 June 2020. The information presented here has been prepared using consistent accounting policies as presented in Note 1, except for the use of the cost method for investment in subsidiary companies by the parent. Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities 2020 $ 55,934 140,520 196,454 237,745 - 237,745 2019 $ 142,723 59,987 202,710 38,544 - 38,544 Contributed equity Financial assets at fair value through other comprehensive income reserve Accumulated losses Total equity 1,366,891 (1,399) 1,366,891 3,414 (1,406,783) (41,291) (1,206,139) 164,166 Loss for the year Other comprehensive income for the year Total comprehensive income for the year (200,644) (4,813) (205,457) (301,363) (3,370) (304,733) No dividends were paid by the parent entity in 2020 (2019: Nil). 33 Collins Square, Tower 5 727 Collins Street Melbourne Victoria 3008 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 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) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020, 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, and notes to the consolidated financial statements, including a summary of significant accounting policies, and the Directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a giving a true and fair view of the Group’s financial position as at 30 June 2020 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 Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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. For the year ended 30 June 2020 we have determined there are no key audit matters to communicate in our report. Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 www.grantthornton.com.au ‘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. 34 Information other than the financial report and auditor’s report thereon The Directors are responsible for the other information. The other information comprises the information included in the Group’s annual report for the year ended 30 June 2020, 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/Group’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/Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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/ar1_2020.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 10 to 11 of the Directors’ report for the year ended 30 June 2020. In our opinion, the Remuneration Report of Enegex Limited, for the year ended 30 June 2020 complies with section 300A of the Corporations Act 2001. 35 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 B L Taylor Partner – Audit & Assurance Melbourne, 17 September 2020 36 Collins Square, Tower 5 727 Collins Street Melbourne Victoria 3008 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 2020, 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 B L Taylor Partner – Audit & Assurance Melbourne, 17 September 2020 Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 www.grantthornton.com.au ‘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. 37 ENEGEX LIMITED ABN 28 160 818 986 Additional Information (unaudited) As at 16 September 2020 Enegex holds the following interests in Mineral Tenements: 100% 100% Enegex interest Tenement Western Australia (Kimberley Region) E 80/5354 E 80/5355 Western Australia (South-West Terrane) E 70/5439 E 70/5440 E 70/5441 E 70/5442 E 70/5446 E 70/5459 E 70/5457 E 70/5458 E 70/5460 E 70/5463 E 70/5444 E 70/5445 E 70/5566 E 70/5567 E 70/5568 E 70/5569 E 70/5570 E 70/5571 E 70/5580 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% First Right of Refusal First Right of Refusal 100% 100% 100% 100% 100% 100% 100% Tenement status Application Application Application Application Application Application Application Application Application Application Application Application Application Application Application Application Application Application Application Application Application Shareholder Information (compiled as at 16 September 2020) 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 203 292 184 367 66 1,112 65,229 890,477 1,446,298 11,808,065 66,289,668 80,499,737 870 holders held less than a marketable parcel of ordinary shares. There is no current on-market buy-back. 38 ENEGEX LIMITED ABN 28 160 818 986 SUBSTANTIAL SHAREHOLDERS As disclosed in notices given to the Company. Name of Substantial ShareholderInterest in Number of Shares % of Shares Beneficial and non-beneficial Albers Group Ross Di Bartolo 31,135,517 10,201,611 30.98 10.15 THE 20 LARGEST HOLDERS OF ORDINARY SHARE Holder Name MR ERNEST GEOFFREY ALBERS MR ROSS DI BARTOLO AURALANDIA PTY LTD GASCORP AUSTRALIA PTY LTD SACROSANCT PTY LTD AUSTRALIS FINANCE PTY LTD CITICORP NOMINEES PTY LIMITED BULL EQUITIES PTY LTD MR IANAKI SEMERDZIEV TRE PTY LTD ICM INVESTMENTS PTY LTD MR ERNEST GEOFFREY ALBERS SMALL BUSINESS FINANCE PTY LIMITED ALBERS FOUNDATION PTY LTD OCEAN MIST PTY LTD ALBERS CUSTODIAN COMPANY PTY LTD MS YIFAN XIE MR OWEN HUNTER WALDRON MR XING WANG LI 500 CUSTODIAN PTY LTD Total Holding 13,443,600 8,415,126 5,000,000 4,750,000 2,273,886 1,871,078 1,709,199 1,450,000 1,407,000 1,345,942 1,311,233 1,246,867 1,218,985 1,125,000 1,000,000 987,906 900,799 800,000 779,999 765,000 51,801,620 % 13.38% 8.37% 4.98% 4.73% 2.26% 1.86% 1.70% 1.44% 1.40% 1.34% 1.30% 1.24% 1.21% 1.12% 1.00% 0.98% 0.90% 0.80% 0.78% 0.76% 51.54% 39
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