Great Northern Minerals Limited
Annual Report 2015

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GREENPOWER ENERGY LIMITED [ABN 22 000 002 111] 116th ANNUAL REPORT 2015 GREENPOWER ENERGY LIMITED GREENPOWER’S STRATEGIC INTENT Greenpower’s strategic intent is to become a significant Australian producer of energy and chemicals from environmentally friendly low emission coal liquefaction. IMPORTANT INFORMATION 1. Definitions Certain abbreviations and other defined terms are used throughout this Report. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are provided through the Report. All amounts of money are stated in Australian dollars unless otherwise specified. 2. Display on website This Annual Report will be posted on the Company’s website at www.greenpowerenergy.com.au 3. Cautionary Statement This Report may contain forward looking statements that are subject to risk factors associated with amongst other things, the economic and business circumstances occurring from time to time in the locations, and business sectors in which Greenpower may operate. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ from those currently projected. GREENPOWER ENERGY LIMITED CORPORATE DIRECTORY DIRECTORS: PRINCIPAL PLACE OF BUSINESS Alan Flavelle (Chairman) Gerard King (Executive) Ronald McCullough (Non-Executive) Takanao (Tony) Mitsui (Non-Executive) 1st Floor, 46 Ord Street West Perth WA 6005 COMPANY SECRETARY: AUDITORS: Matthew Suttling P.O. Box 1061 William Buck Audit (WA) Pty Ltd Level 3, 15 Labouchere Road Newport Beach NSW 2106 Australia South Perth WA 6151 Australia Phone: +61425215349 Phone: +61 8 6436 2888 E-mail: matt@greenpower.com.au REGISTERED OFFICE: SHARE REGISTRY: 1st Floor, 46 Ord Street West Perth WA 6005 Phone: +61-2 9286 5555 Fax: +61-2 9286 5599 Computershare Investor Services Pty Limited 452 Johnston Street Yarra Falls VIC 3067 Australia Phone: +61-3-9415 5023 Fax: + 1300 137 341 BANKERS SOLICITORS: Commonwealth Bank of Australia Price Sierakowski Lawyers 48 Martin Place Sydney NSW 2000 Level 24, 44 St Georges Terrace Perth WA 6000 Australia TheunissenTrollip Lawyers Level 31, RBS Tower 88 Phillip Street Sydney 2000 POSTAL ADDRESS WEBSITE: PO Box 1664 Fremantle WA 6959 www.greenpowerenergy.com.au GREENPOWER ENERGY LIMITED 2015 REPORT FROM THE BOARD MANAGEMENT The Company’s executive team – Executive Chairman Alan Flavelle, Managing Director Gerry King have managed all of the company’s business activity with able support from Non Executive Directors Ron McCullough and Tony Mitsui, CFO/Secretary Matt Suttling together with external consultants John Watts, John Karajas, Gordon Thomson, and Marty Gorbarty. Our officers’ individual backgrounds and qualifications are included elsewhere in the Annual Report. Altogether, management is represented by four directors, the secretary and four consultants – which includes three geologists, two engineers, a fuel scientist, an accountant and a lawyer – who, in aggregate have, hundreds of years of experience in companies engaged in coal, oil and gas exploration and production. GREENPOWER’S PURPOSE: Greenpower was initially incorporated as Gunnedah Colliery Company Limited, mining coal at Gunnedah, NSW, in 1899 (becoming ‘Gunnedah Coal Company Ltd’ in 1985) and stopped mining coal when it sold the mine in 1997. Greenpower has, since 2008, as its mission to become a producer of environmentally friendly energy and chemicals, principally by applying environmentally neutral coal liquefaction technology to lignite coal. PRINCIPAL ACTIVITIES COAL TO LIQUIDS: In the year under review we have consolidated our position in the coal conversion space. Extending back five years we have accumulated considerable experience in evaluating coal conversion technologies-of all sorts. Many of the technologies convert coal to “synthetic hydrocarbons” but at considerable coast to the environment. Most of these processes require additional hydrogen as an input. We have given serious attention to five processes all currently under development—all in North America. Four of the processes are classified as DCTL [direct coal to liquids]. The fifth does not fit into the “direct” or “indirect” category and for the year under review this process has received most of our attention. This process is called OHD [Oxidative Hydrothermal Dissolution]. Basically OHD, under controlled conditions and with the addition of oxygen oxidises the coal. The process breaks down the material to form an aggregate of water soluble, low molecular weight organic compounds. [see Figure1] For VBC [Victorian Brown Coal] the process completely uses the carbonaceous material—on a DAF [Dry, Ash-Free] basis the yield is 106%. [the “extra” percentage comes from the added oxygen]. Our development partner has constructed an engineering scale processing system [Figure2] which has a nominal capacity of 10kg/hr. This system comprises a process unit, reverse osmosis units, an esterification system and a vacuum distillation unit. This system works well and can routinely convert VBC into chemicals and now forms the basis for the design of a pilot plant [PP]. Conceptual design work for a 20 tonne/day PP is underway. The work, funded by GPP, is being carried out by Thermaquatica and Impact Technology Development. The PP will comprise: A] Automated input systems for VBC slurry and oxygen. B] A processing unit which will perform the same function as the PDU but at larger scale. C] Reverse Osmosis [RO] units to strip out most of the water from the OHD liquor. D] Selective distillation units for product isolation. E] The initial separation process will focus on separating out chemicals 6&10 and 14&17 [See figure 3] which are precursor chemicals for making degradable plastic. F] The remaining chemicals will be subjected to an esterification process to enable production of fuels. Much of the above is a “work in progress” and is maturing into coherent knowledge areas. OHD is in our view superior on a number of counts to any of the “next gen “processes which have been evaluated by us. 1] Conversion of carbon is complete and very little CO/CO2 is produced. 2] The resultant liquor is benign and in fact we have under way at Monash University a programme which will develop ways of using the OHD liquor as an agricultural biostimulant. This work is being supported by a commonwealth government research grant. 3] Pre-processing moisture reduction is not necessary and for VBC this is a big operational plus. We continue to monitor development progress for two other Greenfield conversion processes. [For the statistically minded all five of the identified “promising processes” originate from basic research carried out in the United States]. Figure 1 Figure 2 EP447 In the year under review and as announced by us on 2 June 2015 we completed the sale of our 50% interest in EP447 having received the full cash consideration of $850,000 plus retained in a 1.5% production royalty interest. Latrobe Valley Victoria Resources EL4500, EL4877 and EL5227 cover lignite occurrences to the west of Moe Township. Previous exploration by other companies has shown substantial lignite tonnages in a discrete basin covered by EL4500 and EL4877 (western part). A small part of this basin is located within EL5210 a tenement owned by outside parties. A second basin located to the west of this is covered entirely by EL5227. The tenements have the potential to integrate and support the potential Coal to Liquids technology the Group is co-developing. Greenpower Energy Limited ABN 22 000 002 111 Consolidated Annual Report For the Year Ended 30 June 2015 Greenpower Energy Limited ABN 22 000 002 111 For the Year Ended 30 June 2015 CONTENTS Directors' Report Consolidated Financial Statements Auditor's Independence Declaration Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Directors' Declaration Independent Audit Report ASX Additional Information Page 1 14 15 16 17 18 19 20 45 46 48 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Your directors present their report on the Company and its controlled entities for the financial year ended 30 June 2015. Information on directors The names of each person who has been a director during the year and to the date of this report are: Alan Flavelle Qualifications Experience BSc, FAIMM, MSPE 1958-1968: Alan was employed by the Bureau of Mineral Resources [a federal government agency] as a geophysicist and worked in all states of Australia, New Guinea, Canada and the USA. 1969-70: He was employed by West Australian Petroleum, a Perth based affiliate of Chevron as an exploration expert in oil exploration activities in Western Australia. 1971-1980: He became the senior partner in the Layton Group, at that time the largest earth science consulting group based in Australia, and worked on projects in Australia, New Guinea, Philippines, Malaysia, Thailand, Taiwan, Japan, India, USA and Argentina. 1981-present: Alan has worked as an independent consultant, resource developer and adviser to companies at the technical director level including jobs like: Coalbed Methane: Alan became involved in coal seam natural gas (CSG) development in 1984 when he visited USA on a fact finding mission. From 1985-1990 he worked on CSG developments in Queensland and was instrumental in introducing Mitsubishi Gas and Chemical to CSG technology. The company then took over the Queensland assets. From 1991-2000 he investigated a number of CSG development opportunities in Vietnam, South Korea, South Africa, and Japan as well as Australia. From 2001 to the present he has directed a major investigation for CSG opportunities in Europe and Central Asia. Several projects which have been acquired in France and Italy. A second major project aimed at identifying CSG opportunities in Western Australia was started in 2003 and is ongoing. 3,130,160 Ordinary Shares Chairman - Executive Director Nil Interest in shares and options Special responsibilities Other directorships in listed entities held in the previous three years 1 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Information on directors continued Gerard King Qualifications Experience Interest in shares and options Special responsibilities Other current directorships in listed entities LLB After graduating in law (LLB) from the University of Western Australia in 1963, Gerard commenced articles with (Sir) John Lavan (Lavan & Walsh) in Perth, being admitted as a solicitor in 1965, into the law firm partnership in 1966, and became its senior partner in 1978. Under Gerard, Lavan & Walsh eventually became Phillips Fox, Perth in 1985. Throughout his career, Gerard has practised in the legal areas of commercial property, banking/finance, revenue/tax, corporate compliance, and mining law. He taught mortgage and other debt security drafting at UWA law school for 5 years, joined the Taxation Institute of Australia, and the Australian Mining and Petroleum Lawyers Association and gave papers on revenue, strata title, prospectuses, document drafting and other topics. Gerard served on the Law Society of WA Council, and its committees. He was involved in the management of his law firm from 1968 to 1991, and attended two law firm management courses at the University of New England. Gerard has been a company director of Australasian Shopping Centres Property Trust, 1977 to 1980, Australian Mining Investments Ltd., 1983 to 2002, as well as other public companies, and is currently Chairman of Astron Limited, since 1985. He was Chairman of WA St. John Ambulance Service Board 1987 to 1996, and is currently WA State St. John Council Chairman. 28,977,516 Ordinary Shares Executive Director Gerard King is a Director of Astron Limited since 5 November 1985 2 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Information on directors continued Ronald McCullough Qualifications Experience Interest in shares and options Special responsibilities Other current directorships in listed entities M.B.A., B.E. (Hons), FAustIMM Ronald Hugh McCullough is an Honours graduate in Engineering from the University of Western Australia. He also completed a Master of Business Administration at UWA. Subsequently, Ron has been involved in civil engineering design, and the construction of various major engineering works in Western Australia, including water supply dams, major water reticulation and suburban infrastructure projects. Ron has extensive mining experience, including bauxite and coal mining. Ron has investigated the development of a private power station and the exploitation of coal bed methane deposits in the Gunnedah basin on NSW. While involved with the Maitland Main Collieries, which held an authorisation to develop a large coal deposit at Glennies Creek, near Singleton in the Hunter Valley, NSW Ron managed all necessary environmental impact studies, authority compliance requirements, mine construction and operation feasibility studies and then obtained a mining lease for the deposit. Ron became involved in the sand mining industry in Western Australia with the development, in 1994, and management until 2005 of a silica sand mining and exporting operation at Albany in Western Australia, on behalf of Japanese corporations. 2,487,741 Ordinary Shares Non Executive Director. Nil 3 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Information on directors continued Takanao ‘Tony’ Mitsui Qualifications Experience Interest in shares and options Special responsibilities Other current directorships in listed entities B.Ec MBA In April 1965, Tony joined Tomen Corporation, (then called Toyo Menka Kaisha, one of the large, multi-faceted Japanese Trading Houses) in the Steel Department in the Osaka Head Office. From 1968 to 1971 he worked in the Metals and Minerals Department of Toyo Menka. In 1971 he was posted to Toyo Menka’s Sydney office, returning to Tokyo in 1973, to join the Coal Department. In 1977 he was posted to the Vancouver, Canada office of Toyo Menka. In 1981, Tony returned to Tokyo to head the Thermal Coal Section. In 1985 he was appointed General Manager, Metals and Minerals for Tomen Australia. In 1990, he moved to General Manager Coal and Iron Ore Department, Tokyo Head Office of Tomen Corporation. In 1995 he returned to Australia as Managing Director of Tomen Australia. In 2001 he returned to Tokyo as a Corporate Auditor in the Tomen Head Office. In April 2006, Tomen Corporation merged with Toyota Tsusho, the trading arm of Toyota. Tony remains an adviser to Toyota Tsusho in Tokyo. 120,000 Ordinary Shares Non Executive Director. Nil Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. 4 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Principal Activities continued Principal Activities The principal activities of the Group during the financial year related principally to the development of its Coal to Liquid project while maintaining core exploration licences with the potential to supply feedstock and integrate with the Coal to Liquid project. The principal activities of the company during the financial year relating to these were: Victoria: • The group continues to hold three Mineral exploration licenses in the Gippsland Basin (Latrobe Valley), namely EL 4500 “Korumburra” and EL 5227 “Athlone” both held in the name of subsidiary Greenpower Natural Gas Pty Ltd and EL 4877 “Mirboo” held in the name of subsidiary Sawells Pty Ltd each of which have the potential to provide feedstock to the Group’s coal to liquid projects. • Continued the progression of its objective to develop its Coal to Liquid process which converts Latrobe Valley lignite into refinable crude oil and other products, in an environmentally acceptable way i.e. with no or very low carbon dioxide emissions. • In November 2013 Greenpower signed an agreement with US-Thermaquatica Inc., to jointly test and develop the Oxidative Hydrothermal Dissolution (OHD) process for the conversion of coals to liquids. The arrangement allows Greenpower to receive an exclusive license to develop and apply the OHD process on a commercial scale within Australia and New Zealand in exchange for contributing USD $2m towards research on extraction of the products form the OHD liquid. OHD is a novel and environmentally friendly technology for the conversion of coal and other solid organic material into low molecular weight, water soluble products. Many of the initial products are potentially useful for producing polymers as well as other hydrocarbon based products. The process works by taking the initial macromolecular solid material such as coal and causing a reaction with small amounts of oxygen in high temperature, high pressure water. Testing of samples of Victorian Brown Coal shipped to Thermaquatica’s laboratory has continued during the year and the Company has made contracted payments of $USD 276,000 (2014: $US1,050,000) to Thermaquatica towards their research and development programme including the acquisition of capital equipment for output testing. • Greenpower has been developing potential markets for the output which have significant potential. Subsequent to the year-end Monash University is commencing a test program researching the benefits of some of the output for agricultural purposes which is an exciting development and jointly funded by a Commonwealth Research Grant of $50,000. • Greenpower is monetarising the technology and working towards the funding of a pilot plant in Victoria which is being designed by US specialists, a number of funding models are being investigated. South Australia: • PEL 145, PELA 146 - The South Australian areas have now been surrendered as they did not fit the Company’s present business intentions. Western Australia: • On 2 June 2015 Greenpower was pleased to announce the completed sale of Greenpower’s wholly owned subsidiary GCC Methane Pty Ltd (GCCM) which held EP 447 for $850,000 and a 1.5% well head royalty agreement. 5 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Corporate: • Greenpower is focused on reviewing a number of funding opportunities and ensuring corporate costs are not excessive. • The disposal of GCCM supported the Group’s principle activities and provided ongoing funding for the OHD project in Australia and the USA. • Greenpower received a Research and Development refund on its project expenditures for 2014 and has an application pending to include its research and development in the USA for future claims. • Gerard King, managing Director has continued to support the Group with a loan of $420,000 as at 30 June 2015. No significant change in the nature of these activities occurred during the year. Coal Resources The Group recognizes the following coal resources in its tenement areas. There have been no material changes in the resources from those reported in 2014, and no changes in the resource classification during the period. Table 1 Coal Resources Tenement Resource Tonnes Ash MHC EL 4500 EL 4877 EL5227 Inferred Inferred Inferred Mt 306 131 136 % 7.5 5.0 12.2 % 63.5 63.0 63.3 Volatile Matter SE Mj/Kg 49.4 50.1 42.7 23.0 23.7 21.2 Notes to Table 1 The estimates of coal reserves and resources were prepared by Resolve Geo Pty Ltd and have been reviewed by Mr Keith Whitehouse of Australian Exploration Field Services. Mr Whitehouse is principal of Australian Exploration Field Services and has over 25 years of experience in the measurement and estimation of mineral resources and is a qualified person as defined under the ASX listing rule 5.22. The Resource on EL 4500 was reported to the exchange on 30 January 2012 and was prepared by Neil Biggs of Resolve Geo Pty Ltd and complied with JORC 2004 edition. There has been no material change in the resource since it was first reported. The Resource on EL 4877 was reported to the exchange on 14 August 2012 and was subsequently updated on 6 December 2012 to reflect an increase in tonnage as the result of further drilling. There was no alteration in the coal quality parameters. The original resource statement and the update was prepared by Neil Biggs of Resolve Geo Pty Ltd and complied with JORC 2004 edition. There has been no material change in the resource since it was updated in 2012. The Resource on EL 5227 was reported to the exchange on 16 April 2012 and was prepared by Neil Biggs of Resolve Geo Pty Ltd and complied with JORC 2004 edition. There has been no material change in the resource since it was first reported. The coal quality parameters Ash, Volatile Matter and Specific Energy are reported on a dried basis, Moisture (MHC) is reported on an as received basis. All quality parameters are considered to be correct within the context of the Brown Coal industry. 6 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Competent Person Statement The information in this report that relates to Inferred Resources is based on information compiled by Keith Whitehouse who is a Member of The Australasian Institute of Mining and Metallurgy and a Chartered Professional (Geology). Mr. Whitehouse has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Whitehouse consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Governance Arrangements Greenpower Energy seeks to ensure the reporting of Mineral Resources and Ore Reserves is in accordance with Industry best practice and Listing Rules. All current Mineral Resources and Ore Reserves have been compiled by independent consultants recognised for their expertise in the estimation of coal resources and reserves. The Estimates have been reviewed by an independent consultant considered to be a Competent Person under the JORC Code 2012 to ensure that the resource reports comply with the listing rules. Matter Subsequent to the end of the Financial Year Subsequent to the year end of the Group: No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in future financial years. Likely Developments and Expected Results from Operations The Company expects to maintain the present status and level of operations. Non-Audit Services There were no non-audit services during the year (2014: Nil). Auditors Independence Declaration The lead auditors’ independence declaration for the year ended 30 June 2015 has been received and can be found on page 14 of the financial report. The auditor William Buck Audit (WA) Pty Ltd continues in office in accordance with Section 327 of the Corporations Act 2001. Environmental Regulations The Group's operations to date are not regulated by any significant environmental regulation under the law of the Commonwealth or of a state or territory. The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report on annual greenhouse gas emissions and energy use. For the measurement period 1 July 2014 to 30 June 2015 the directors have assessed that there are no current reporting requirements, but may be required to do so in the future. Dividends Paid or Declared No dividends were paid or declared since the start of the financial year. 7 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Company Secretary Mr Matthew Suttling, B.Ec CA was appointed Company Secretary of Greenpower Energy Limited on 1 May 2007. He is a Chartered Accountant. His experience is broad based including clients ranging from multinationals to listed public companies, audit, other business financial and taxation services. He is currently in Public Practice. Dividends Paid or Declared No dividends were paid or declared since the start of the financial year. Business Review Operating Results The loss after providing for income tax amounted to $701,717 (2014: $1,726,517). The 2015 loss included reduced commitments on the OHD Coal to Liquid ('CTL') project where the Group’s policy is to expense exploration and initial expenditures. Administration costs were consistent with the prior year and would not be anticipated to increase in 2016. The significant expenditures during the year were the license payments on the OHD CTL project $349,432 (2014: $1,137,567) which reflects the Group’s strategy to developing a clean and efficient CTL technology that will integrate with the inferred resources held within the Group’s Victorian tenements. Development of the CTL projects is ongoing specifically to identify potential markets and working towards completion of feasibility studies to enable the Group to consider a pilot plant in Victoria. The Group has engaged specialists to provide independent guidance as to the strengths of the CTL processes and technology. During the year the disposal of GCCM resulted in a gross payment to Greenpower of $850,000 which will be utilised for ongoing development of the OHD process. The Directors are committed to carefully utilising current resources, reviewing potentially markets for output, partners and other funding initiatives. Meetings of Directors During the financial year, 9 meetings of directors were held. Attendances by each director during the year were as follows: Mr Alan Flavelle Mr Gerard King Mr Ronald McCullough Mr Takanao Mitsui Directors' Meetings Eligible to attend Number attended 9 9 9 9 9 9 9 9 8 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Remuneration Report (AUDITED) The key management personnel of the Group consisted of the following directors and other persons: ● Alan Flavelle - Executive Chairman ● Gerard King - Executive Director ● Ronald McCullough – Non-Executive Director ● Takanao Mitsui – Non-Executive Director ● Matthew Suttling – CFO/Company Secretary The information provided in this remuneration report has been audited as required by Section 308(3C) of the Corporation Act 2001. This report details the nature and amount of remuneration for each director of Greenpower Energy Limited, and for the executives of the Group. Service Agreements Currently Greenpower Energy Limited does not have any service agreements in place with key management personnel. Use of Remuneration Consultants During the year the Directors did not utilise the services of remuneration consultants in determining the amount of remuneration for each Director and Executive. Voting and Comments Made at the Company’s 2014 Annual General Meeting The Company received 91.23% of votes (after eliminating excluded votes) approving the 2014 remuneration report. The company did not receive any specific feedback at the AGM or throughout the year on its remuneration practices. Share-Based Compensation No Options over shares in Greenpower Energy Limited were granted during the year in accordance with the Company Employee Share Option Plan ("ESOP"). The ESOP is designed to provide long-term incentives for executives to deliver long-term shareholder returns. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits. No ordinary shares in the company were provided as a result of the exercise of remuneration options to any director of Greenpower Energy Limited or other key management personnel of the group. Additional information No performance based bonuses have been paid to key management personnel during the financial year. It is the intent of the board to include performance bonuses as part of remuneration packages when mine production commences. For non executive Directors the aggregate pool limit approved by shareholders as Directors Fees is $100,000 as approved at the 2009 Annual General Meeting. 9 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Details of Remuneration Details of remuneration of the directors and key management personnel of the group are set out below: 2015 Short-term benefits Share-based payments Total Post employment benefits Alan Flavelle Gerard King Ronald McCullough Takanao Mitsui Matthew Suttling 2014 Alan Flavelle Gerard King Ronald McCullough Takanao Mitsui John Watts # Matthew Sutlting Cash salary $ Cash profit share $ Cash Bonus $ Non-cash Benefits $ Superannuation $ Equity $ Options $ 131,808 60,000 - - 50,000 241,808 - - - - - - - - - - - - - - - - - - 12,192 - - - - 12,192 - - - - - - $ 144,000 60,000 - - 50,000 254,000 - - - - - - Short-term benefits Post employment benefits Share-based payments Total Cash salary $ Cash profit share $ Cash Bonus $ Non-cash Benefits $ Superannuation $ Equity $ Options $ $ 131,808 60,000 - - 57,273 50,000 299,081 - - - - - - - - - - - - - - - - - - - - - 12,192 - - - - - 12,192 - - - - - - - - - - - - - - 144,000 60,000 - - 57,273 50,000 311,273 # John Watts resigned 31 March 2014 The following table provides employment details of persons who were, during the financial year, members of key management personnel of the Group. The table also illustrates the proportion of remuneration that was fixed and at risk. Directors Alan Flavelle Gerard King Ronald McCullough Takanao Mitsui KMP Matthew Suttling Fixed Remuneration % At Risk Long Term Remuneration % 100 100 100 100 100 - - - - - 10 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Remuneration Policy As the Group develops it will be implementing the following remuneration guidelines. The remuneration policy of Greenpower Energy Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the Group's financial results. The board of Greenpower Energy Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Group, as well as create goal congruence between directors, executives and shareholders. The board's policy for determining the nature and amount or remuneration for the board members and senior executives of the Group is as follows: (cid:120) (cid:120) (cid:120) (cid:120) (cid:120) (cid:120) The remuneration policy, setting the terms and conditions for the executive directors and other senior executives was developed by the board. All executives receive a base salary (which is based on factors such as length of service and experience) and superannuation where applicable. The board reviews executive packages annually by reference to the Group’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries. The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract and retain the highest calibre of executives and reward them for performance that results in long term growth in shareholder wealth. Executives will also be entitled to participate in future employee share and option arrangements. The executive directors and executives receive a superannuation guarantee contribution required by the government, which is currently 9.5%, and do not receive any other retirement benefits. Some towards individuals may choose superannuation. to sacrifice part of increase payments their salary to All remuneration paid to directors and executives is valued at the cost to the Group and expensed. Shares given to directors and executives are valued as the difference between the market price of those shares and the amount paid by the director or executive. Options are valued using appropriate methodologies. The board policy is to remunerate non executive directors at market rates for comparable companies for time, commitment and responsibilities. The board determines payments to the non executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. No such advice was obtained during the year. Fees for non executive directors are not linked to the performance of the Group. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company and are able to participate in the employee option plan. Other transactions with Key Management Personnel During the year a Director Gerard King loaned the Group $420,000 to meet its short term Coal to Liquid project commitments and working capital. The loan was made on commercial terms and unpaid at year end. Interest is payable by the Group currently at 5.75% being the underlying bank loan rate. The loan is repayable on demand. 11 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Key Management Personnel Shareholdings The number of ordinary shares in Greenpower Energy Limited held by each key management person of the Group during the financial year is as follows: Balance at beginning of year On exercise of options Net Change Other * Balance at end of year 30 June 2015 Directors Alan Flavelle Gerard King Ronald McCullough Takanao Mitsui Other KMP Matthew Suttling 3,130,160 28,977,516 2,487,741 120,000 83,910 34,799,327 - - - - - - - 3,130,160 - 28,977,516 2,487,741 - 120,000 - - 83,910 - 34,799,327 Performance-based Remuneration The Group currently has no performance based remuneration component built into director and executive remuneration packages due to the stage of the Group’s development, no link between remuneration and financial performance currently exists. The table below sets out summary information about the Group’s earnings and movement in share price for the five years to 30 June 2015: Revenue Net loss before tax Net loss after tax benefit Share Price at end of year (cents) Basic and diluted loss per share 2015 $ 31,042 2014 $ 21,982 2013 $ 2012 $ 2011 $ 244,963 396,073 (806,434) (1,726,517) (1,121,806) (1,296,759) (5,729,034) (701,717) (1,726,517) (1,212,490) (1,516,481) (5,433,629) 7 (8.57) 2 (1.87) 1 (1.46) 1 (0.76) 4 (2.09) 181,053 Long Term Benefits and Termination Benefits The Group’s Employee Share and Option Plan aligns remuneration with at risk long term benefits. The Group has no long term benefits payable or termination benefits due. Additional statutory disclosures This section sets out the additional disclosures required under the Corporations Act 2001. Options Share options do not carry any voting rights and can be exercised once granted until their expiry date. No options were granted or vested or exercised during the year. End of Audited Remuneration Report 12 Greenpower Energy Limited ABN 22 000 002 111 Directors' Report 30 June 2015 Indemnifying Officers or Auditors No indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of the Group. Options Unissued shares under option At the date of this report, the unissued ordinary shares of Greenpower Energy Limited under option are as follows: Matthew Suttling John Watts Stephen Menzies Opening Balance On exercise of options Expired Closing Balance 300,000 200,000 200,000 700,000 - - - - 150,000 100,000 - 150,000 100,000 200,000 250,000 450,000 No Options were issued during the year, 250,000 options expired in August 2015. No options have been granted to the directors or KMP since the end of the financial year. Options granted under the original ESOP carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share. The exercise price of options is based on the price at grant date. No options were exercised during the year. Auditors’ Independence Declaration The lead auditors’ independence declaration for the year ended 30 June 2015 has been received and can be found on page 14 of the financial report. Directors’ declaration regarding IFRS compliance statement The Directors’ declare that these annual financial statements have been prepared in compliance with International Financial Reporting Standards. Proceedings on Behalf of Company No person has applied for leave of Court under s237 of the Corporations Act 2001 to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the period. Sign off details Signed in accordance with a resolution of the Board of Directors: Director: ................................................................................................................................................ Gerard King Dated this 18th day of September 2015 13 Greenpower Energy Limited ABN 22 000 002 111 Consolidated Income Statement For the Year Ended 30 June 2015 Other income Interest revenue Occupancy costs Administrative costs Exploration and Tenement costs Finance costs Depreciation and amortisation Profit (loss) before income tax Income tax (expense)/benefit Loss after income tax Loss attributable to owners of Greenpower Energy Limited Loss per share: Basic earnings per share (cents) Diluted earnings per share (cents) Note 4 5 6 6 2015 $ 22,124 8,918 (12,210) (405,173) (407,765) (11,190) (1,138) 2014 $ 8,402 13,580 (12,000) (403,286) (1,326,010) (4,141) (3,062) (806,434) 104,717 (1,726,517) - (701,717) (1,726,517) (701,717) (1,726,517) (0.76) (0.76) (1.87) (1.87) The above consolidated income statement should be read in conjunction with the accompanying notes. 15 Greenpower Energy Limited ABN 22 000 002 111 Consolidated Statement of Comprehensive Income For the Year Ended 30 June 2015 Net loss for the year Other comprehensive income: Items that may be reclassified to profit or loss Net (loss)/gain on revaluation of financial assets Other comprehensive income for the year, net of tax Total comprehensive loss for the year Total comprehensive loss attributable to: Owners of Greenpower Energy Limited 2015 $ 2014 $ (701,717) (1,726,517) (296,075) 670,904 (296,075) 670,904 (977,792) (1,055,613) (977,792) (1,055,613) (977,792) (1,055,613) The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. 16 Greenpower Energy Limited ABN 22 000 002 111 Consolidated Statement of Financial Position As at 30 June 2015 ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables Non-current assets held for sale TOTAL CURRENT ASSETS NON-CURRENT ASSETS Available for sale assets Property, plant and equipment Intangible assets Exploration and evaluation assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves Accumulated losses TOTAL EQUITY Note 2015 $ 2014 $ 7 8 9 10 11 12 14 864,780 118,314 - 384,063 41,594 800,000 983,094 1,225,657 321,322 1,731 136 1,324,439 617,397 2,056 949 1,325,477 1,647,628 1,945,879 2,630,722 3,171,536 15 545,355 88,377 545,355 88,377 - - 545,355 88,377 2,085,367 3,083,159 16 17 18 63,398,286 63,398,286 10,967,222 11,263,297 (72,280,141) (71,578,424) 2,085,367 3,083,159 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. 17 Greenpower Energy Limited ABN 22 000 002 111 Consolidated Statement of Changes in Equity For the Year Ended 30 June 2015 2015 Balance at 1 July 2014 Loss for the year Revaluation Total comprehensive income for the year Contributed Equity $ Accumulated Losses $ Capital Profits Reserve $ Option Reserve $ Financial Assets Reserve $ Total $ 63,398,286 (71,578,424) 10,314,793 - - (701,717) - - - 277,600 - - 670,904 - (296,075) 3,083,159 (701,717) (296,075) - (701,717) - - (296,075) (997,792) Balance at 30 June 2015 63,398,286 (72,280,141) 10,314,793 277,600 374,829 2,085,367 2014 Balance at 1 July 2013 Loss for the year Revaluation Total comprehensive income for the year Contributed Equity $ Accumulated Losses $ Capital Profits Reserve $ Option Reserve $ Financial Assets Reserve $ Total $ 63,398,286 (69,851,907) 10,314,793 - - (1,726,517) - - - 277,600 - - - - 670,904 4,138,772 (1,726,517) 670,904 - (1,726,517) - - 670,904 (1,055,613) Balance at 30 June 2014 63,398,286 (71,578,424) 10,314,793 277,600 670,904 3,083,159 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 18 Greenpower Energy Limited ABN 22 000 002 111 Consolidated Statement of Cash Flows For the Year Ended 30 June 2015 CASH FLOWS FROM OPERATING ACTIVITIES: Payments to suppliers and employees Interest received Finance costs Net cash provided by (used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from disposal of investments Proceeds from return of capital on available for sale assets Net cash used by investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Loan proceeds from related parties Net cash used by financing activities Net increase (decrease) in cash and cash equivalents held Cash and cash equivalents at beginning of year Cash and cash equivalents at end of financial year Note 2015 $ 2014 $ (796,078) 8,730 (1,935) (1,826,701) 13,580 (4,141) 19(a) (789,283) (1,817,262) 850,000 - - 1,353,275 850,000 1,353,275 21(d) 420,000 420,000 - - 480,717 384,063 (463,987) 848,050 7 864,780 384,063 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 19 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 1 Corporate Information The financial report of Greenpower Energy Limited for the year ended 30 June 2015 was authorised for issue in accordance with a resolution of the Directors on 18 September 2015 and covers Greenpower Energy Limited as an individual entity as well as the consolidated entity consisting of Greenpower Energy Limited and its subsidiaries as required by the Corporations Act 2001. The financial report is presented in the Australian currency. Greenpower Energy Limited is a for profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. 2 Summary of Significant Accounting Policies (a) Basis of Preparation The financial report is a general purpose financial statement that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. The financial statements and notes comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below and have been consistently applied unless otherwise stated. The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. (b) Principles of Consolidation Subsidiaries The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2015. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable. Subsidiaries are accounted for in the Parent entity financial statements at cost. A list of subsidiary entities is contained in Note 13 to the financial statements. All subsidiaries entities have a 30 June financial year end. 20 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 2 Summary of Significant Accounting Policies continued (c) Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the Directors. The Directors are responsible for allocating resources and assessing the performance of the operating segments. (d) Revenue and Other Income Revenue is recognised at the fair value of the consideration received or receivable. 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. Dividends received are accounted for when received. (e) Income Tax The income tax expense for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for all temporary differences, between carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases, at the tax rates expected to apply when the assets are recovered or liabilities settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. Exceptions are made for certain temporary differences arising on initial recognition of an asset or a liability if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit. Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries, associates and interests in joint ventures where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Greenpower Energy Limited and its wholly owned subsidiaries have implemented the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated financial statements. Current and deferred tax is recognised in profit or loss except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity. 21 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 2 Summary of Significant Accounting Policies continued (f) Impairment of Assets At each reporting date the Group assesses whether there is any indication that individual assets are impaired. Where impairment indicators exist, the recoverable amount is determined and impairment losses are recognised in the income statement where the asset's carrying value exceeds its recoverable amount. The 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 the recoverable amount for an individual asset, recoverable amount is determined for the cash generating unit to which the asset belongs. (g) Cash and Cash Equivalents For the purposes of the Statement of Cash Flows, cash and cash equivalents includes cash on hand and at bank, deposits held at call with financial institutions, other short term, highly liquid investments with maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and bank overdrafts. (h) Property, Plant and Equipment Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the asset. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and subsequent disposal. The expected net cash flows have not been discounted to their present values in determining recoverable amounts. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset's useful life to the Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements. Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. 22 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 2 Summary of Significant Accounting Policies continued (i) Intangibles Intangible assets being website development is recorded at cost, it has a finite life and is carried at cost less any accumulated amortisation and impairment losses. It has an estimated useful life of between one and three years. It is assessed annually for impairment. Amortisation is based on the cost of an asset less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. (j) Exploration and Evaluation Assets Exploration and evaluation expenditure is generally written off in the year incurred, except for acquisition of exploration properties which is capitalised and carried forward. When production commences, any accumulated costs for the relevant area of interest which have been capitalised and carried forward will be amortised over the life of the area according to the rate of depletion of the economically recoverable resources. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to the area of interest. The carrying value of any capitalised expenditure is assessed by the Directors each year to determine if any provision should be made for the impairment of the carrying value. The appropriateness of the Group’s ability to recover these capitalised costs has been assessed at year end and the Directors are satisfied that the value is recoverable. The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at an overall level whenever facts and circumstances suggest that the carrying amount of the assets may exceed recoverable amount. An impairment exists when the carrying amount of the assets exceed the estimated recoverable amount. The assets are then written down to their recoverable amount. Any impairment losses are recognised in the income statement. 23 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 2 Summary of Significant Accounting Policies continued (k) Investments and Available for Sale Assets All investments and available for sale assets are initially stated at cost, being the fair value of consideration given plus acquisition costs. Purchases and sales of investments are recognised on trade date which is the date on which the Group commits to purchase or sell the asset. Accounting policies for each category of investments and available for sale assets subsequent to initial recognition are set out below. Available-for-sale Financial Assets financial assets, comprising principally marketable equity securities, are Available-for-sale non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the reporting date. Investments are designated as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term. Impairment testing is performed annually. After initial recognition, available-for-sale investments are measured at fair value. Gains or losses are recognised in other comprehensive income and presented as a separate component of equity until the investment is sold, collected or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in profit or loss. Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. (l) Fair Values 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 reporting date. The quoted market price for financial assets is the current bid price. The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short term nature. (m) Trade and Other Payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the year end and which are unpaid. These amounts are unsecured and have 30-90 day payment terms. 24 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 2 Summary of Significant Accounting Policies continued (n) Provisions Provisions for legal claims, service warranties and make good obligations are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Where the effect of the time value of money is material, 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. (o) Contributed Equity Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares are shown as a deduction from the equity proceeds, net of any income tax benefit. Costs directly attributable to the issue of new shares associated with the acquisition of a business are included as part of the purchase consideration. (p) Earnings per Share Basic Earnings per Share Basic earnings per share is calculated by dividing the profit attributable to owners of Greenpower Energy Limited 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) Goods and Services Tax (GST) Revenues and expenses are recognised net of GST except where GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, 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. 25 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 2 Summary of Significant Accounting Policies continued (r) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (s) New Accounting Standards for Application in Future Periods The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the year ended 30 June 2015. As a result of this review the Group have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Group’s accounting policies. (t) New and Amended Accounting Policies Adopted by the Group The Group has adopted all of the new and revised pronouncements which became mandatory for annual reporting periods beginning on or after 1 July 2014. In adopting these new and revised pronouncements, the Group has determined that there has been no material impact on the Group’s reported position or performance. (u) Going Concern For the year ended 30 June 2015 the group recorded a consolidated loss of $701,717 (2014: $1,726,517) and at that date the net operating cash out flows were $789,283. The company had net current assets of $437,739. These conditions indicate a material uncertainly that may cast significant doubt about the Group’s ability to continue as a going concern, however notwithstanding this the accounts have been prepared on a going concern basis. The directors have assessed the Group’s operating and research costs along with future commitments for tenement exploration costs in order to establish the future funding requirements for the Group. As at 30 June 2015 the group has cash of $864,780 as well as shares held in an ASX listed entity with a value of $321,322. The group anticipates that the ongoing support of related parties is sufficient to satisfy its obligations. To this end, and as disclosed in Note 15 and 21(d), an amount of $420,000 owing to Gerard King (Director) will not be called on for repayment for a period of at least 12 months from the date of this report unless the group has the ability to make such a repayment. A further loan facility of $30,000 on the same terms remains available to the Group and is undrawn at the date of this report. The Group see significant potential in the ongoing development of its Coal to Liquid project particularly when combined with the Groups’ Victorian exploration tenements inferred resources available for feedstock of the Coal to Liquid project. In the event that the above mentioned strategies cannot be implemented successfully then the going concern basis of accounting may not be appropriate with the result that the group may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different from that stated in the financial report. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. 26 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 2 Summary of Significant Accounting Policies continued (v) Critical accounting estimates and judgements The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and based on current trends and economic data, obtained both externally and from within the Group. Key estimates - income taxes The Group has not recognised deferred tax assets relating to carried forward tax losses as utilisation of the tax losses also depends on the ability of the group to satisfy certain tests at the time the losses are recouped. Due to the recent capital raising of the parent entity, there are some concerns that the entity may fail to satisfy the continuity of ownership test and therefore has to rely on the same business test. The probably of future profit and utilisation of income tax losses will be reliant on the successful development of the group’s intellectual property. Key judgments - exploration and evaluation assets The Group has not capitalised expenditure relating to exploration and evaluation during the year however has carried forward the initial cost of certain Exploration Licenses where it is considered likely to be recoverable or where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. While there are certain areas of interest from which no reserves have been extracted, the directors are of the continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet concluded. Such capitalised expenditure is carried at the end of the reporting period at $1,324,439. Key judgments - available-for-sale investments The Group maintains a portfolio of securities with a carrying value of $321,322 at the end of the reporting period. Certain individual investments have declined in value and impairment adjustments have been brought to account against the financial assets reserve. 3 Auditors' Remuneration Remuneration of the auditor of the parent entity for: - Audit or review - BDO (Audit) WA Pty Ltd - Audit or review - William Buck Audit (WA) Pty Ltd - Total remuneration for audit services 4 Other Income - Gain on disposal of available for sale investments - Grants received 2015 $ 2014 $ - 24,050 24,050 35,800 - 35,800 2015 $ 30,526 - 30,526 2014 $ - 8,402 8,402 27 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 5 Income Tax Expense (a) The major components of tax expense (income) comprise: Deferred tax expense Other deferred tax 2015 $ 2014 $ - - - - (b) The prima facie tax benefit/(expense) from the loss before income tax is reconciled to the income tax as follows: Prima facie tax benefit on loss from ordinary activities before income tax at 30% (2014: 30%) - the Group Add/Less tax effect of: - losses not brought to account - Research & development refund received Income tax attributable to parent entity (c) Unrecognised temporary differences Deferred Tax Assets (at 30%) Losses not brought to account 2015 $ 2014 $ (210,515) (517,955) (210,515) (517,955) 210,515 104,717 104,717 517,955 - - 2015 $ 2014 $ 15,859 1,329,756 19,436 1,260,154 Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Availability of losses is subject to passing the required tests under the ITAA 1997/1936. 28 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 6 Earnings per Share (a) Reconciliation of Earnings used to calculate Earnings per share Loss Loss used to calculate basic and diluted EPS (b) Weighted average number of ordinary shares (diluted): 2015 $ 701,717 2014 $ 1,726,517 701,717 1,726,517 2015 2014 Weighted average number of ordinary shares outstanding during the year number used in calculating basic EPS and dilutive EPS 92,465,787 92,465,787 92,465,787 92,465,787 Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the Parent Company as the numerator (ie no adjustments to profit were necessary in 2015 or 2014). The weighted average number of ordinary shares has been utilised in the calculation of basic and diluted earnings per share. 7 Cash and Cash Equivalents Cash at bank Short-term bank deposits Reconciliation of Cash Cash at the end of the financial year as shown in the Statement of Cash Flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents Note 7(a) 2015 $ 715,660 149,120 2014 $ 223,760 160,303 864,780 384,063 2015 $ 2014 $ 864,780 384,063 864,780 384,063 The effective interest rate on short-term bank deposits was 2.4% (2014: 2.3%); these deposits are at call. (a) Short term deposit Short term deposits are held as a security for various bank guarantees. 29 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 8 Trade and Other Receivables CURRENT Other receivables (a) Other Receivables Note 2015 $ 2014 $ 8(a) 118,315 41,594 118,315 41,594 Other receivables represent receivables due from the Australian Taxation Office and other amounts which are not impaired and will be receivable. 9 Non-Current Assets – Held for Sale CURRENT Exploration permits (a) Exploration permits Note 9(a) 2015 $ 2014 $ - - 800,000 800,000 The settlement on the sale of its interest in EP 447 was completed in June 2015. 10 Available-for-Sale Financial Assets Available-for-Sale Financial Assets Comprise: Listed investments shares in listed corporations Total available for sale assets at fair value 2015 $ 2014 $ 321,322 617,397 321,322 617,397 Available for sale assets comprise of investments in the ordinary issued capital of various entities. There are no fixed returns or fixed maturity date attached to these investments. Fair Value Listed investments have been valued at the quoted market bid price at the end of the reporting period. At 30 June 2015 and 30 June 2014, the aggregate fair values and carrying amounts of financial assets and financial liabilities approximate their carrying amounts. Available-for-sale financial instruments are recognised in the statement of financial position of the Group according to the hierarchy stipulated in AASB 13. 30 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 10 Available-for-Sale Financial Assets continued Available-for-sale financial assets ASX Listed equity shares – Level 1 (a) Reconciliation of Available-for-Sale Financial Assets Opening Balance Return of capital Net (loss)/gain on revaluation of financial assets 11 Property, Plant and Equipment PLANT AND EQUIPMENT Office equipment At cost Accumulated depreciation Total office equipment Total plant and equipment Total property, plant and equipment (a) Movements in Carrying Amounts 2015 $ 2014 $ 321,322 617,397 321,322 617,397 2015 $ 617,397 - (296,075) 2014 $ 1,299,767 (1,343,274) 670,904 321,322 617,397 2015 $ 2014 $ 5,796 (4,065) 1,731 1,731 1,731 5,796 (3,740) 2,056 2,056 2,056 Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year: Balance at 30 June 2015 Balance at the beginning of year Additions Depreciation expense Balance at 30 June 2015 Balance at 30 June 2014 Balance at the beginning of year Additions Depreciation expense Balance at 30 June 2014 Office Equipment $ 2,056 - (325) 1,731 3,103 - (1,047) 2,056 31 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 12 Intangible Assets Other intangible assets Cost Accumulated amortisation and impairment Net carrying value Total Intangibles (a) Movements in Carrying Amounts Year ended 30 June 2015 Opening balance Additions Amortisation Closing value at 30 June 2015 Year ended 30 June 2014 Opening balance Additions Amortisation Closing value at 30 June 2014 (b) Intangible Assets Note 12(b) 2015 $ 2014 $ 13,249 (12,114) 13,249 (12,300) 136 136 949 949 Other intangible assets - Website $ 949 - (813) 136 2,963 - (2,014) 949 Intangible assets are represented by capitalised costs of the Group’s website development. 13 Controlled Entities Principal Activity Country of incorporation Percentage Owned 2015 Percentage Owned 2014 Subsidiaries of parent entity: GCC Asset Holdings Pty Ltd GCC Methane Pty Ltd Greenpower Natural Gas Pty Ltd Sawells Pty Ltd Chimney Springs Pty Ltd Greenpower Latrobe CTL Pty Ltd Investment Disposed Coal Exploration VIC Coal Exploration VIC Non trading Non trading Australia Australia Australia Australia Australia Australia 100 - 100 100 100 100 100 100 100 100 100 100 32 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 14 Exploration and Evaluation Assets NON-CURRENT Exploration permits Movements in Other Assets Year ended 30 June 2015 Opening balance Transfer to held for sale Impairment of Tenements Balance at 30 June 2015 Year ended 30 June 2014 Opening balance Transfer to held for sale Impairment of Tenements Balance at 30 June 2014 Exploration permits Current permits as at 30 June 2015: - Victoria - EL4500, EL 4877 and EL 5227 Note 2015 $ 2014 $ 1,324,439 1,325,477 Exploration permits $ Total $ - 1,325,477 2,125,477 - - (1,038) 9 1,324,439 2,125,477 2,125,477 2,125,477 - (800,000) - - 1,325,477 2,125,477 Ultimate realisation of the value of the above tenements is dependent upon successful exploitation or sale. The Group determined that the South Australian areas SAP145 and SAPELA 146 did not fit the Company’s business intentions and were relinquished during the period. The Group’s interest in the Western Australian EP 447 was disposed for $850,000 plus a well head royalty in June 2015. 15 Trade and Other Payables CURRENT Trade payables Other payables Related party loans 2015 $ 2014 $ 35,284 90,071 420,000 45,029 43,348 - 545,355 88,377 21(d) 33 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 16 Issued Capital 92,465,787 (2014: 92,465,787) Ordinary Shares 2015 $ 2014 $ 63,398,286 63,398,286 63,398,286 63,398,286 The Company has no authorised share capital or par value in respect of its issued shares. Movements in ordinary share capital Year ended 30 June 2015 At the beginning of year Shares issued during the year Cost of listing shares Balance at 30 June 2015 Year ended 30 June 2014 At the beginning of year Shares issued during the year Cost of listing shares Balance at 30 June 2014 No. of shares $ 92,465,787 - - 92,465,787 63,398,286 - - 63,398,286 92,465,787 - - 63,398,286 - - 92,465,787 63,398,286 Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At the shareholders meetings, each ordinary share is entitled to one vote when a poll is called; otherwise each shareholder has one vote on a show of hands. Capital Risk Management The Group's and the parent entity's objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may pay dividends to shareholders, return capital to shareholders, issue new shares or sell assets. During 2015, the Group's strategy, which was unchanged from 2014, was to maintain minimum borrowings outside of trade and other payables. During the year a loan on commercial terms from a Director was received. 34 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 16 Issued Capital continued Total payables Less: cash and cash equivalents Net debt Total equity Total capital 17 Reserves Capital Realisation Reserve Share Based Payments Reserve Available For Sale Asset Reserve Capital Realisation Reserve Opening balance Share Based Payments Reserve Opening balance Available For Sale Asset Reserve Opening balance Fair value adjustment Income statement Deferred tax in income statement Deferred tax in statement of financial position Total reserves Capital Realisation Reserve The capital realisation reserve records revaluation of capital. 2015 $ 2014 $ 545,355 (864,780) 88,377 (384,063) (319,425) 2,085,367 (295,686) 3,083,160 1,765,942 2,787,474 2015 $ 2014 $ 10,314,793 10,314,793 277,600 670,904 277,600 374,829 10,967,222 11,263,297 2015 $ 2014 $ 10,314,793 10,314,793 10,314,793 10,314,793 277,600 277,600 277,600 277,600 670,904 (296,075) - - - - 670,904 - - - 374,829 670,904 10,967,222 11,263,297 35 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 17 Reserves continued Share Based Payments Reserve The share based payments reserve records items recognised as expenses on valuation of employee share options. Share options are issued for nil consideration. The exercise price of the share options is determined by the Directors in their absolute discretion and set out in the Offer provided that the exercise price is not less than the average Market Price on ASX on the five trading days prior to the day the Directors resolve to grant the Options. Any options that are not exercised by fifth anniversary of their grant date will lapse. Upon exercise, these options will be settled in ordinary fully paid shares of the Company. The Options can be exercised in whole or part at any time up to and including the Expiry Date by lodging and Option Exercise Notice accompanied by the payment of the exercise Price. Summary of options granted under the Long Term Incentive Plan The following table illustrates the number and the weighted average exercise price (WAEP) of and movements in shares options under the long term incentive plan: Outstanding at the beginning of the year Granted during the year Vested during the year Lapsed/cancelled during the year Forfeited during the year Outstanding at the year end Exercisable at the year end 2015 Number 2015 WAEP 2014 Number 2014 WAEP 700,000 - - - - 700,000 700,000 0.05 - - - - .05 .05 700,000 - - - - 700,000 700,000 .05 - - - - .05 .05 Weighted average remaining contractual life of share options The weighted average remaining contractual life for the share options outstanding as at 30 June 2015 is 0.68 years (2014: 1.68 years). Range of exercise price of share options The exercise price for options outstanding at the end of the year is .05 to .051 (2014: .05 to .051) cents. Weighted average fair value of share options The weighted average fair value of options granted during the year is nil (2014: Nil). Share option valuation The fair value of the equity-settled share options granted under the LTIP is estimated at the date of grant using a Black Scholes model, which takes into account factors including the options exercise price, the volatility of the underlying share price, the risk-free interest rate, the market price of the underlying shares at grant date, historical and expected dividends and the expected life of the option. 36 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 17 Reserves continued Available For Sale Asset Reserve The financial assets reserve recognises movements in fair value of available for sale financial assets. 18 Accumulated Losses Accumulated losses Opening balance Net loss for the period Total 19 Cash Flow Information 2015 $ 2014 $ (71,578,424) (69,851,907) (1,726,517) (1,008,459) (72,586,883) (71,578,424) (a) Reconciliation of Cash Flow from Operations with Loss after Income Tax Net loss for the year Cash flows excluded from loss attributable to operating activities Non-cash flows in loss Amortisation Depreciation Loss on impairment of tenement Income tax benefit Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries Decrease/(Increase) in receivables Increase/(Decrease) in trade payables and accruals Increase/(Decrease) in deferred taxes Net cash (outflow) from operating activities 2015 $ 2014 $ (701,717) (1,726,517) 813 325 1,038 (104,727) 2,014 1,047 - - (21,990) 36,975 - 28,594 (122,400) - (789,283) (1,817,262) 37 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 20 Capital Commitments Capital Expenditure Commitments Capital expenditure commitments contracted for: Exploration Permits Coal to Liquids Payable: - not later than 12 months - between 12 months and 5 years 21 Related Party Transactions 2015 $ 2014 $ 163,950 769,333 474,250 901,379 933,283 1,375,629 820,933 112,350 1,211,679 163,950 933,283 1,375,629 (a) Parent entity The ultimate parent entity within the Group is Greenpower Energy Limited. (b) Subsidiaries Interests in subsidiaries are set out in note 13. (c) Compensation The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below: Short-term employee benefits Post-employment benefits Long-term benefits Share-based payments 2015 $ 249,081 12,192 - - 2014 $ 249,081 12,192 - - 261,273 261,273 (d) Transactions and balances with related parties All transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. During the year a Director Gerard King loaned the Group $420,000 to meet its short term CTL and working capital commitments. The loan was made on commercial terms and outstanding as at 30 June 2015. The current interest rate payable by the Group on the loan is at 5.75% being the underlying bank loan rate. 38 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 22 Financial Risk Management (a) Financial Risks The main risks the Group is exposed to through its financial instruments are interest rate risk and liquidity risk. The Group manages liquidity risk by prudent monitoring of expenditure in line with available funds. (b) Net Fair Values Fair Value Measurement The Group’s fair values of financial instruments are categorised by the following levels: (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) inputs other than quoted prices included within level 1 that are observable for the asset or (b) liability, either directly (as prices) or indirectly (derived from prices) (level 2), and inputs for the asset or liability that are not based on observable market data (c) (unobservable inputs) (level 3). (c) Foreign Currency Risk The group is exposed to fluctuations in foreign currencies with respect to its obligations under its agreement to fund the development of the Coal to Liquids technology in the USA. Refer note 20. (d) Credit Risk The Group has no significant concentrations of credit risk other than cash at bank which is held with the Commonwealth Bank of Australia and Westpac Bank both AA- rated Australian banks. The maximum exposure to credit risk at reporting date is the carrying amount (net of provision of doubtful debts) of those assets as disclosed in the statement of financial position and notes to the financial statements. As the Group does not presently have any debtors, lending, significant stock levels or any other credit risk, a formal credit risk management policy is not maintained. 39 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 22 Financial Risk Management continued (e) Liquidity risk Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet commitments associated with financial instruments (e.g. borrowing repayments). The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate unutilised borrowing facilities are maintained. Maturity analysis Year ended 30 June 2015 Trade and other payables Year ended 30 June 2014 Trade and other payables (f) Price Risk Carrying Amount $ Contractual Cash flows $ < 6 months $ 6- 12 months $ 1- 5 years $ > 5 years $ Total $ 545,355 545,355 125,355 420,000 545,355 545,355 125,355 420,000 88,377 88,377 88,377 88,377 88,377 88,377 - - - - - - - - - - 545,355 545,355 88,377 88,377 The Group is exposed to equity securities price risk. This arises from investments held by the Group and classified on the statement of financial position as available-for-sale. To manage its price risk arising from investments in equity securities, the Group regularly reviews the holdings and maintains a portfolio which the Directors believe has strong core values. The Group’s equity investments are publicly traded and are listed on the ASX. The maximum exposure to price risk from an income statement perspective at reporting date is the carrying amount of the investments. Financial Assets + 20% 2015 $ 64,264 2014 $ - 20% 2015 $ 2014 $ 123,479 (64,264) (123,479) 64,264 123,479 (64,264) (123,479) 40 f o j y t i r o a m e h t y b e r e h w y t i r u c e s f o n o i t i s o p i g n d i r r e v o n a i i g n n a t n a m e i l i h w s e t a r t s e r e t n i l e b a l i a v a g n i r o t i n o m y b k s i r e t a r t s e r e t n i s t i s e g a n a m p u o r G e h T d e t i i m L y g r e n E r e w o p n e e r G s t n e m e t a t S l a i i c n a n F d e t a d i l o s n o C e h t o t s e t o N 5 1 0 2 e n u J 0 3 d e d n E r a e Y e h t r o F 1 1 1 2 0 0 0 0 0 2 2 N B A d e u n i t n o c t n e m e g a n a M k s R i l a i c n a n F i 2 2 k s i R e t a R t s e r e t n I ) g ( 4 1 0 2 $ 5 1 0 2 $ 4 1 0 2 $ 5 1 0 2 $ 4 1 0 2 $ 5 1 0 2 $ 4 1 0 2 $ 5 1 0 2 $ 4 1 0 2 % 5 1 0 2 % l a t o T g n i r a e B t s e r e t n i - n o N r a e Y 1 n h t i i w g n i r u t a M e t a R t s e r e t n I g n i t a o F l e t a R t s e r e t n I e v i t c e f f E e g a r e v A d e t h g i e W : s t e s s A i l a c n a n F i : w o e b l l s e b a t e h t n i t u o t e s s i s d o i r e p y t i r u t a m y b e t a r t s e r e t n i e g a r e v a i d e t h g e w e v i t c e f f e e h t d n a k s i r e t a r t s e r e t n i o t e r u s o p x e ' s p u o r G e h T . s t n u o c c a k n a b d e t a r - A A n i l d e h e r a l s t n e a v u q e i h s a c d n a h s a c 4 9 5 , 1 4 3 6 0 , 4 8 3 7 5 6 , 5 2 4 7 7 3 , 8 8 7 7 3 , 8 8 0 8 7 , 4 6 8 5 1 3 , 8 1 1 5 9 0 , 3 8 9 5 5 3 , 5 4 5 5 5 3 , 5 4 5 - 4 9 5 , 1 4 4 9 5 , 1 4 7 7 3 , 8 8 7 7 3 , 8 8 5 1 3 , 8 1 1 - - - - 5 1 3 , 8 1 1 3 0 3 , 0 6 1 0 2 1 , 9 4 1 0 6 7 , 3 2 2 0 6 6 , 5 1 7 5 5 3 , 5 2 1 5 5 3 , 5 2 1 - - - - - - 0 0 0 , 0 2 4 0 0 0 , 0 2 4 - - - 3 0 3 , 0 6 1 0 2 1 , 9 4 1 0 6 7 , 3 2 2 0 6 6 , 5 1 7 4 . 2 - 5 . 1 l s t n e a v u q e i h s a c d n a h s a C l s e b a v e c e R i 5 7 . 5 l s e b a y a p y r d n u s d n a e d a r T s e i t i l i b a i L l a i c n a n F i l a t o T s i s y l a n a y t i v i t i s n e S s t e s s A l a i c n a n F i l a t o T : s e i t i l i b a i L l i a c n a n F i 1 4 4 1 0 2 $ ) 0 2 9 , 1 ( ) 0 2 9 , 1 ( ) s t n o p i 5 1 0 2 $ ) 8 7 5 , 3 ( ) 8 7 5 , 3 ( 4 1 0 2 $ 0 2 9 , 1 0 2 9 , 1 ) s t n o p i 5 1 0 2 $ 8 7 5 , 3 8 7 5 , 3 s i s a b 0 5 ( % 5 . - s i s a b 0 5 ( % 5 . + k n a b t a h s a C . s e c n a a b l h s a c e t a r t s e r e t n i l e b a i r a v m o r f s t s o c t s e r e t n i r e w o l / r e h g h o t i e u d t i f o r p n i s t n e m e v o m e h t w o h s l s e b a t i g n w o l l o f e h T Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 23 Segment Reporting The Group operates predominantly in one business and geographical segment being Exploration activities throughout Australia. This information has been presented for the benefit of readers of the financial statements rather than to comply with any specific accounting standards. 24 Parent entity The following information has been extracted from the books and records of the parent, Greenpower Energy Limited and has been prepared in accordance with Accounting Standards. The financial information for the parent entity, Greenpower Energy Limited has been prepared on the same basis as the consolidated financial statements except as disclosed below. Investments in subsidiaries Investments in subsidiaries, are accounted for at cost in the financial statements of the parent entity. Consolidated Statement of Financial Position Assets Current assets Non-current assets Total Assets Liabilities Current liabilities Total Liabilities Equity Issued capital Accumulated losses Capital Realisation Reserve Share Based Payments Reserve Total Equity Consolidated Income Statement Total loss for the year Total comprehensive loss 2015 $ 2014 $ 887,299 1,743,423 331,932 2,927,982 2,630,722 3,259,914 545,355 88,377 545,355 88,377 63,398,286 63,398,286 (71,905,312) (70,819,142) 10,314,793 10,314,793 277,600 277,600 2,085,367 3,171,537 (1,360,256) (1,903,022) (1,360,256) (1,903,022) Guarantees entered into by the parent entity in relation to the debts of its subsidiaries Pursuant to Class Order 98/1418 Greenpower Energy Limited and its wholly owned subsidiaries (refer note 13) entered into a deed of cross guarantee. The effect to the deed is that Greenpower has guaranteed to pay any deficiency in the event of winding up of any controlled entity or if they do not meet their obligations under the terms of any debt subject to the guarantee. The controlled entities have given a similar guarantee in the event that Greenpower is wound up or if it does not meet its obligations under the terms of any debt subject to the guarantee. 42 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 24 Parent entity continued Contingent liabilities of the parent entity. The Directors are not aware of any contingent liabilities at reporting date. Contractual commitments by the parent entity. Capital expenditure commitments contracted for: Coal to Liquids payable not later than 12 months 25 Events After the Reporting Date Subsequent to the year end of the Group: 2015 $ 2014 $ 769,333 901,379 769,333 901,379 No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the company, the results of those operations, or the state of affairs of the company in future financial year. 26 Contingent Liabilities The Directors are not aware of any contingent liabilities at reporting date. 27 Sale of Subsidiary On 18 April 2015 GPP announced that the option for Eneabba Gas Limited to acquire GPP’s 100% owned subsidiary GCC Methane Pty Ltd (“GCC”) had been exercised, and settled on 1 June 2015. GCC Methane Pty Ltd holds a 50% interest in EP 447, Perth Basin Western Australia. Consideration/terms of sale: - $30,000 deposit received 9 March 2015 - $820,000 balance of cash consideration received 2 June 2015 - Royalty Deed to give effect to a royalty right to 1.5% of the GCC’s net petroleum production from EP 447 Gain on Sale: The transaction resulted in a profit of $30,526 being proceeds less the underlying value of GCC’s EP 447 and other transaction costs, there is no tax payable on the disposal due to carried forward losses. 43 Greenpower Energy Limited ABN 22 000 002 111 Notes to the Consolidated Financial Statements For the Year Ended 30 June 2015 28 Company Details Registered office The registered office of the company is: Greenpower Energy Limited 1st Floor, 46 Ord Street West Perth WA 6005 Principal place of business The principal place of business is: Greenpower Energy Limited 1st Floor, 46 Ord Street West Perth WA 6005 44 Greenpower Energy Limited ABN 22 000 002 111 Directors' Declaration The directors of the company declare that: 1. the financial statements and notes, as set out on pages 15 to 44, are in accordance with the Corporations Act 2001 and: a. comply with Corporations Regulations 2001 and other mandatory professional reporting requirements, Accounting Standards, which, as stated in accounting policy note 2 to the financial statements, constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and b. give a true and fair view of the financial position as at 30 June 2015 and of the performance for the year ended on that date of the consolidated group. 2. the Chief Executive Officer and Chief Finance Officer have each declared that as required by Section 295A: a. the financial records of the company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001; b. the financial statements and notes for the financial year comply with the Accounting Standards; and c. the financial statements and notes for the financial year give a true and fair view. 3. 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. This declaration is made in accordance with a resolution of the Board of Directors. Director .................................................................. Dated 18 September 2015 45 Greenpower Energy Limited ASX Additional Information For the Year Ended 30 June 2015 ASX Additional Information Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below. This information is effective as at 18 September 2015. Voting Rights Ordinary Shares On a show of hands, every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Options No voting rights. Distribution of Equity Security Holders Holding 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,000 and over There were 1,598 holders of less than a marketable parcel of ordinary shares. 20 Largest Optionholders Mr Matthew Suttling Mr John Watts Mr Stephen Menzies Unissued Equity Securities Options issued 700,000. Holders Number of Shares 880 300 193 254 57 175,724 895,319 1,644,953 8,186,865 81,562,926 1,684 92,465,787 Options Number held % of issued options 300,000 200,000 200,000 700,000 42.86 28.57 28.57 100.00 48 Greenpower Energy Limited ASX Additional Information For the Year Ended 30 June 2015 20 Largest Shareholders Pandora Nominees Pty Ltd C N Mcdonald Pty Ltd Astron Limited Mr Alan John Flavelle Mr Frederic Bernd Rappaport Lempip Nominees Pty Ltd Narlack Pty Ltd Leibler Superannuation Nominees Pty Ltd Ms Jane Marian Walker Yalloak Pty Ltd Mr Ronald Mccullough & Mrs Shirley Mccullough Iris Sydney Holdings Pty Ltd Manasota Pty Ltd Mr Michael Bruce Smith + Mrs Kay Smith Greenearth Energy Limited Mr Christopher Hosking + Mrs Marcia Hosking Mrs Aily Lamb Mr Simon Andrew Peters + Mrs Emma Frances Vogel Mt Geok Khim Goh Alert Empire Pty Ltd Securities exchange The Company is listed on the Australian Securities Exchange. Ordinary shares Number held % of issued shares 28,977,516 10,000,000 9,513,018 3,060,160 3,000,000 2,960,670 2,960,670 1,972,947 1,750,000 1,732,030 1,340,000 1,109,148 1,000,000 1,000,000 785,100 750,000 633,683 628,614 500,000 440,000 74,113,556 31.34 10.81 10.29 3.31 3.24 3.20 3.20 2.13 1.89 1.87 1.45 1.20 1.08 1.08 0.85 0.81 0.69 0.68 0.54 0.48 80.14 49

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