ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2018
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
CORPORATE INFORMATION
Jupiter Energy Limited
ABN 65 084 918 481
Directors
Geoffrey Gander (Executive Chairman/Chief Executive Officer)
Baltabek Kuandykov (Non-Executive Director)
Scott Mison (Executive Director) (resigned 20 April 2018)
Alexey Kruzhkov (Non-Executive Director)
Alexander Kuzev (Non-Executive Director)
Phil Warren (Non-Executive Director) (appointed 20 April 2018)
Group Secretary
Scott Mison (resigned 20 April 2018)
Emma Wates (appointed 20 April 2018)
Registered Office & Principal Place of Business
945 Wellington Street
West Perth WA 6005
PO Box 1282
Western Australia 6872
Telephone
Email
Website
+61 8 9322 8222
info@jupiterenergy.com
www.jupiterenergy.com
Solicitors
Steinepreis Paganin
Level 4,
16 Milligan Street
Perth WA 6000
Auditors
Ernst & Young
11 Mounts Bay Road
Perth WA 6000
Bankers
National Australia Bank Ltd
UB13.03, 100 St Georges Terrace
Perth WA 6000
Share Registry
Computershare Investor Services Pty Ltd
Level 2, 45 St George’s Terrace
Perth WA 6000
Telephone
Facsimile
Website
1300 557 010 (only within Australia)
+61 8 9323 2000
+61 8 9323 2033
www.computershare.com
Stock Exchange Listing
Jupiter Energy Limited shares are listed on the
Australian Securities Exchange under the code “JPR”
and on the Kazakh Stock Exchange (KASE) under the
code “AU_JPRL”.
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
Contents of Financial Report
Chairman’s Letter ................................................................................................................................................ 1
Directors' Report ................................................................................................................................................. 2
Remuneration Report ....................................................................................................................................... 13
Auditor Independence Declaration ................................................................................................................... 22
Consolidated Jupiter Energy Limited Financial Statements
Consolidated Statement of Comprehensive Income .................................................................................... 24
Consolidated Statement of Financial Position ............................................................................................. 25
Consolidated Statement of Cash Flows ....................................................................................................... 26
Consolidated Statement of Changes in Equity ........................................................................................... 27
Notes to the Consolidated Financial Statements .............................................................................................. 28
Directors' Declaration ........................................................................................................................................ 57
Independent Audit Report to the members of Jupiter Energy Limited ............................................................... 58
ASX Additional Information................................................................................................................................ 60
Corporate Governance Policies......................................................................................................................... 62
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
CHAIRMAN’S LETTER
Dear Shareholder,
I am pleased to present the 2018 Annual Report for Jupiter Energy Limited (“Jupiter Energy” or “the Group”).
The past year has seen some significant progress for our Kazakh operations with a return to oil production, beginning
with well J-51 going back into production from late September 2017.
The beginning of the 2017/18 year saw the approval of a 3 year extension to Jupiter’s Exploration Licence held over
Block 31 and this licence now runs through to 29 December 2019. The Company also obtained approval of Trial
Production Licences for its Akkar East and West Zhetybai wells. Another major milestone was reached when the Group
was also able to get a positive resolution to the reserves dispute involving its Akkar North (East Block) territory.
Production for the period from late September 2017 to 30 June 2018 reached approximately 90,000 barrels and
revenues totaled almost $A3,000,000. With the J-58 well coming onto production in early September 2018 and the
drilling of the J-57 well schedule to take place during 4th Quarter 2018, production levels and associated revenues
should continue to increase and I hope the Company can soon reach the levels of 2014 when our revenues were
almost $A9,000,000 on production of 230,000 barrels.
The Board remains confident in the prospectivity of the Block 31 licence area and furthermore that the two new oilfields
that have already been discovered on our permit area can be commercially developed into significant producers.
I therefore look towards 2019 with renewed confidence and may I take this opportunity to thank all our employees and
shareholders for their continued support over the past twelve months and encourage shareholders to attend the Annual
General Meeting to be held in Perth on 12 November 2018.
Sincerely
Geoff Gander
Chairman/CEO
1
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT
Your Directors submit their report together with the financial statements for Jupiter Energy Limited (“Company”)
and its wholly owned subsidiaries (“Jupiter Energy” or “Group”) for the financial year ended 30 June 2018.
Jupiter Energy Limited is a company limited by shares that is incorporated and domiciled in Australia.
DIRECTORS
The names and details of the Group’s Directors in office during the financial year and until the date of this report
are as follows. Directors were in office for this entire period unless otherwise stated.
Names, qualifications experience and special responsibilities
Geoffrey Anthony Gander (55)
B.COM
Executive Chairman/CEO
Appointed 27 January 2005
Baltabek Kuandykov (70)
Non-Executive Director
Appointed 5 October 2010
Mr Gander graduated from the University of Western Australia in
1984 where he completed a Bachelor of Commerce Degree.
Mr Gander was involved in the identification and purchase of the
Block 31 licence in Kazakhstan and has driven the development of
the business there since 2007. He is currently responsible for the
overall Operational Leadership of the Company as well as Investor
Relations and Group Corporate Development.
Other Current Directorships of Listed Companies
Powerhouse Ventures Limited (ASX)
Former Directorships of Listed Companies in last three years
Zyber Holdings Limited (ASX)
Mr Kuandykov has considerable experience in the oil and gas
industry in the region, having served as President of Kazakhoil
(predecessor of the Kazakh State oil company KazMunaiGas). He
was also seconded by the Kazakh Government to work with
Chevron Overseas Petroleum on CIS projects. Mr Kuandykov also
has extensive government experience in Kazakhstan, having
served as Deputy Minister of Geology, Head of the Oil and Gas
Directorate at the Ministry of Geology, and was Deputy Minister of
Energy and Fuel Resources.
Other Current Directorships of Listed Companies
None
Former Directorships of Listed Companies in last three years
None
2
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
Scott Adrian Mison (42)
B.Bus, CA, ACSA
Executive Director
Appointed 31 January 2011
Resigned April 20 2018
Company Secretary
Appointed 29 May 2007
Resigned April 20 2018
Phil Warren (44)
B.Com., CA
Non-Executive Director
Appointed 20 April 2018
Alexey Kruzhkov (51)
Non-Executive Director
Appointed 29 August 2016
Mr Mison holds a Bachelor of Business degree, is a Member of the
Institute of Chartered Accountants in Australia and Chartered
Secretaries Australia.
Mr Mison has over 18 years' experience in finance and corporate
compliance within Australia, UK, Central Asia and USA.
He is also CFO / Company Secretary of Rift Valley Resources Ltd
and Interim CEO / Director of Longford Resources Ltd.
Mr Mison is also a board member of Rebound WA inc. (formerly
Wheelchair Sports WA Inc.) a not for profit organisation.
Other Current Directorships of Listed Companies:
Longford Resources Limited (ASX)
Former Directorships of Listed Companies in last three years:
1-Page Limited (ASX).
Mr Warren is a Chartered Accountant and has over 20 years
experience in finance and corporate roles in Australia and Europe.
He is Managing Director of a corporate advisory services firm and
has extensive experience in mergers and acquisitions, debt
financing, equity raisings and corporate governance.
Other Current Directorships of Listed Companies
Cassini Resources Limited, Rent.com.au Limited, Family Zone
Cyber Safety Limited
Former Directorships of Listed Companies in last three years
None
Mr Kruzhkov holds an Engineering Degree and an MBA and has
over 10 years’ experience working in the investment industry,
focusing primarily on organisations involved in Oil & Gas, Mining
and Real Estate. He has served as a Director on the Boards of
companies listed in Canada and Norway. He is a board member
and part of the of the executive team of Waterford Investment and
Finance Limited and resides in Cyprus. He holds British and
Russian citizenships.
Other Current Directorships of Listed Companies
None
Former Directorships of Listed Companies in last three years
None
3
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
Alexander Kuzev (53)
Non-Executive Director
Appointed 12 September 2017
Mr Kuzev is an oil industry professional with over 27 years of
experience.
Most of Alexander’s career has been spent working in the Former
Soviet Union (FSU) with much of that time responsible for the overall
management of field operations with a focus on production
sustainability, technology and field maintenance. He has worked
with a range of oil and gas companies including Schlumberger and
Gazprom Drilling.
Alexander brings an important technical skill set to the Jupiter
Energy Board as well as in country experience, having been
involved with various Kazakhstan based oil and gas operations
since the late 1990’s.
Other Current Directorships of Listed Companies
None
Former Directorships of Listed Companies in last three years
None
Interests in the shares and options of the Company and related bodies corporate
At the date of this report, the interests of the Directors in the shares of the Company are outlined below. The
Company does not have any options on issue as at the date of this report:
Director
G Gander
B Kuandykov
A Kruzhkov
A Kuzev
P Warren
Number of
ordinary shares
811,112
-
-
-
-
Each Director must disclose any changes via formal ASX and KASE announcement in accordance with regulatory
requirements. Any changes in Directors’ shareholdings are also confirmed at each Board meeting.
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the course of the financial year included:
Exploration for oil and gas in Kazakhstan: and
Appraisal, development and production of oil and gas properties in Kazakhstan.
4
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
FINANCIAL REVIEW
Operating Results
The consolidated loss for the year after income tax was $10,023,725 (2017: $8,076,857).
Review of Financial Condition
At the end of the 2018 financial year, cash resources were $408,241 (2017: $397,109). These accounts have been
prepared on a going concern basis, predicated on the Group’s ability to raise additional cash in order to finance its
proposed work program and general and administrative costs for the next 12 months. The Board is currently
progressing a number of financing options including an equity raising and/or the issue of debt finance.
Assets increased to $50,182,659 (2017: $49,200,046) and equity decreased to $(14,348,305) (2017: $3,584,203).
Funding and Capital Management:
As at 30 June 2018, the Group had 153,377,693 listed shares trading under the ASX ticker "JPR", and the KASE
ticker “AU_JPRL”. On 29 August 2017, the Company delisted from London’s Alternative Investment Market (AIM).
On July 28 2017, the Group was granted a range of approvals that positioned it to return to domestic production.
As a result, major shareholder and debtholder Waterford Petroleum Limited (“Waterford”) and debt holder
Midocean Holdings Limited (“Midocean”) (together “the Lenders”) agreed to provide up to a total of a further
US$5,000,000 (including accrued interest), in the amounts of up to US$4,900,000 and US$100,000, respectively
under a new Funding Agreement signed on 28 July 2017 (the “2017 Funding Agreement”).
The 2017 Funding Agreement saw the addition of one new condition when compared to earlier funding
agreements. This condition related to the payment of a bonus to the Lenders should all or part of the permit area
be sold during the term of the 2017 Funding Agreement.
A summary of the terms of the 2017 Funding Agreement is as follows:
Unsecured
Effective 31 July 2017
Repayable on 31 July 2019 (or such later date agreed by the parties in writing) (the “Repayment
Date”)
Interest rate of 15% pa
Interest will accrue and be repayable with principal
Lenders can elect to be repaid if there is a change of control in Jupiter Energy Limited or Jupiter
Energy Pte Ltd or there is a change in control in contract 2275 covering the Block 31 Licence
Bonus will be payable to the Lenders equivalent to 5% of the sale price of contract 2275 in the event
that the contract is assigned, transferred or sold to a 3rd party during the period of the facility
The bonus would equate to 5% of the value of the consideration received by the Company if Jupiter or Contract
2275 is assigned, transferred or sold to a third party prior to the Repayment Date and will be payable in cash,
shares or a combination of both, at the absolute discretion of the Lenders subject to all relevant Australian and
Kazakh regulatory bodies (if required), including pursuant to the ASX Listing Rules, KASE Listing Rules and the
Corporations Act.
5
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
The bonus amount payable to each of the Lenders will be calculated on the basis of the proportion of debt funding
provided by each as measured against the total funding provided under the 2017 Funding Agreement.
The 2017 Funding Agreement was established to fund the Group’s operations whilst it continues to finalise long
term funding arrangements for the development of its Block 31 licence area in Kazakhstan.
In terms of drawdowns, the Group still requests monthly drawdowns against the maximum US$5,000,000 amount
and the drawdowns are based on an agreed Operations budget, with the budget reflecting revenues and expenses
associated with the return to domestic production that took place during the 4th quarter of calendar 2017.
The Group is still reviewing its ongoing funding requirements to enable it to complete its approved 2017-2019 Work
Program and develop Block 31 to the stage where export oil sales are being achieved and further development of
the field is self-funding. In addition, the Group may look to take on additional exploration acreage. Funding options
may include the further issue of new equity, reserve based debt, convertible debt or a combination of these and
other funding instruments.
Once the appropriate funding has been secured, the further development of both the Akkar East and West Zhetybai
fields, and in particular the possibility of building the topside infrastructure on Akkar East including a processing
facility and gas separation plant, will be accelerated.
The Company continues to maintain its listing on the Australian Stock Exchange (ASX) and shareholders that have
wished to trade the Company’s Ordinary Shares after the Cancellation Date have been able to do so on the ASX.
OPERATING REVIEW
The financial year saw a return to oil production from the Akkar East oilfield during the 4th Quarter (28 September
2017) with production initially coming from the J-51 well, followed by the J-52 well in late October 2017 and well
19 beginning production in February 2018.
Production Report/Status of Well Licences:
Production – Akkar East (J-51, J-52, J-53 and Well 19):
During the financial year, oil was produced from the Akkar East J-51, J-52 and 19 wells under their respective Trial
Production Licences (TPL’s). These three wells are all located on the northern section of the permit and are part
of the Akkar East oilfield.
The J-53 well, which is also located on the Akkar East oilfield, was shut in for the entire financial year, awaiting
further remedial work before potentially coming back onto production. This work will be carried out when the
appropriate funding and approvals are in place.
A summary of the oil produced from the three Akkar East wells during the financial year, broken down by quarter,
is as follows:
6
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
Well Number
Production (1Q)
(bbls)
Production
(2Q) (bbls)
Production
(3Q) (bbls)
Production
(4Q) (bbls)
3,200
Nil
Nil
10,100
8,900
9,100
4,360
12,850
11,100
6,890
14,250
9,000
J-51
J-52
Well 19
ALL PRODUCING
WELLS
TOTAL bbls for
the 2017/18
Financial Year
24,550
36,000
29,200
89,750
Production – Akkar North [East Block] (J-50 well):
The Group advised shareholders on 28 November 2014 that the application to extend the TPL for well J-50 located
on the Akkar North (East Block) was being held by the Kazakh Committee of Geology pending resolution of the
allocation of reserves associated with the well.
The J-50 well has since been shut in since 29 December 2014 (the date at which the last Trial Production licence
expired).
The underlying issue delaying the TPL renewal was the demand by the Committee of Geology that Jupiter Energy
reach agreement with its neighbour MangistauMunaiGas (MMG) over the division of reserves associated with both
companies’ share of the Akkar North accumulation. Jupiter Energy was in dialogue with MMG on this issue for
some time but was unable to reach formal agreement with MMG with respect to the division of Akkar North reserves
or another form of commercial settlement of the matter.
After ongoing discussions, the Group announced on 28 April 2017 that it had been successful with its ownership
claim over these reserves and with this having been achieved the requisite applications for a Trial Production
Licence for the J-50 well have now been submitted for approval by the relevant Kazakh authorities.
The Company expects to recommence production from the J-50 during the 2018/19 Financial Year.
Status of West Zhetybai Wells (J-55, 58, 59):
J-58 and J-59 both had their respective 2017-2019 TPL’s approved during 2017.
On 1 September 2018, the J-58 well was put on production. The forward plan is for the J-59 well to be used to test
the potential of the shallow Jurassic horizon discovered during the drilling of the well, before being completed for
production from the T2B horizon. This work on the J-59 well is scheduled to occur before the end of calendar year
2018.
Further remedial work will need to be carried out on the J-55 well to determine if commercial production can be
established from this well and this work will require the requisite funding and separate approvals from the relevant
Kazakh authorities.
Drilling Report:
Workovers were carried out on the J-51, J-52 and 19 wells in order to return these wells to production.
7
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
No drilling activity took place during the year. The next well (J-57) is expected to spud in early October 2018. This
well is expected to be the final well drilled on the Akkar East oilfield before the Company is able to finalise its Final
Reserves Report for Akkar East. This is a critical step in being able to move the oilfield from domestic oil production
under its Exploration Licence to export oil production under its Commercial Licence.
Oil Production and Revenues:
There were approximately 90,000 barrels of oil produced during the year for revenues of $2,922,167
($US2,264,950). There was no oil produced in the previous reporting period. All oil produced during the year was
sold into the domestic market (as per the terms of the Block 31 Exploration Period Licence) to a local trader. Oil
was paid for on a prepayment basis and oil collected by the trader from the well head.
AIM Listing
The Company was originally dual listed on the AIM market of the London Stock Exchange in 2011 as a means of
accessing capital from the UK and European equity markets. During 2017, the Board reviewed the Company’s
AIM listing and concluded that the benefits of listing have not been realised, due to a range of reasons. Given the
Company's shareholder base is predominantly Australian, the relatively low volume of trading in shares on AIM
and the Company’s cash position, the Board concluded that the costs incurred in maintaining a secondary listing
on AIM, exceeded the benefits obtained from the listing. On this basis, the Board sought a cancellation of its
depository interests (“DIs”) over ordinary shares (“Ordinary Shares”) from trading on AIM (the “Cancellation”).
The Cancellation was not subject to shareholder approval however the Board discussed this issue with Jupiter’s
three major shareholders being Waterford Petroleum Limited, Arrow Business Limited and Central Asian Oil
Holdings Limited and each entity gave their unequivocal support in respect of the Cancellation. The last trading
day in DIs on AIM was be 25 August 2017 and Cancellation was effective from 29 August 2017 (the “Cancellation
Date”). Following the cancellation of admission of the Company's Ordinary Shares on AIM, the DIs which had been
trading on AIM were cancelled and holding statements were issued to the then current DI holders.
The Company continues to maintain its listing on the Australian Stock Exchange (ASX) and shareholders that have
wished to trade the Company’s Ordinary Shares after the Cancellation Date have been able to do so on the ASX.
Corporate Hiring:
As a result of a return to domestic oil production, the Group restaffed its Aktau operations and full time employees
increased from 10 people to 30 people during the year. A number of these new positions were filled by past
employees.
Board Additions and Changes:
On 12 September 2017 the Company announced the appointment of Alexander Kuzev to the Board.
Alexander Kuzev (52) is an oil industry professional with over 26 years of experience.
Alexander has brought an important technical skill set to the Jupiter Energy Board as well as in country experience,
having been involved with various Kazakhstan based oil and gas operations since the late 1990’s.
8
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
On 5 April 2018 the Company announced the resignation of Scott Mison as a Director, Chief Financial Officer
(CFO) and Company Secretary – effective from 20 April 2018.
On 19 April 2018 the Company announced the appointment of Phil Warren (44) as a Non Executive Director.
The Company also announced the appointment of Edward Meagher as CFO and Emma Wates as Company
Secretary and a change of the Company’s registered office address to 945 Wellington Street, West Perth, WA
6005. All appointments were effective 20 April 2018.
Annual General Meetings:
The 2017 AGM was held in Perth on 10 November 2017 and all Resolutions were passed. The 2018 AGM will be
held in Perth on 12 November 2018 and shareholders are encouraged to attend. A Notice of Meeting outlining
business to be covered at the 2018 AGM will be mailed to shareholders in early October 2018.
Directors Renumeration:
Directors have deferred their Directors’ Fees since February 2015 and continue to do so until such time that the
Group has an improved cashflow position.
Summary:
The 2017/18 Financial Year saw the Group make measured progress towards being able to return to full
operations. At the beginning of the year, the Company was granted a three year extension of its Exploration Licence
(to December 2019), gained approval to return its wells on the Akkar East and West Zhetybai fields to Trial
Production. During the year the Company also got confirmation from the Kazakh authorities that it was the legal
owner of the oil reserves that form part of the Akkar North (East Block) accumulation.
Domestic oil production recommenced late in 2017 and the Company was able to produce from the J-51, J-52 and
19 wells (all located on Akkar East) for the second half of the Financial Year, with production reaching
approximately 90,000 barrels for the year on revenues of $2,922,167 ($US2,264,950).
Major shareholder (Waterford Petroleum Limited) continues to be the cornerstone debt funder for the Company
with a further US$4,900,000 in debt funding provided to the Company in July 2018 with these monies funding
operations and enabling a return to domestic oil production.
Revenue from oil sales are now able to fund the Kazakh operation and the funding available through the 2017
Funding Agreement, signed in July 2017, should be able to support the corporate operations for the foreseeable
future.
Frustrations aside, since acquiring the exploration permit in 2008, independent reserve reports and evaluations
continue to confirm that Jupiter has now discovered two sizeable oilfields with significant reserves and resources.
In addition, oil production has moved from zero at the beginning of 2011 to over 230,000 barrels for calendar year
2014, with 2014 calendar year revenues reaching A$8,750,000 (US$7,568,000). It is hoped that with the return of
the J-58 well to production during October 2018 and the drilling of the J-57 well during the 4th quarter of 2018,
these past production and revenue levels will again be achieved in the coming 10 months.
9
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
The goal of developing Jupiter Energy into a full cycle E&P Group with a meaningful production profile and sizeable
2P reserves base remains the key objective for the Board and Management and the Group remains confident of
continuing to make progress towards achieving this goal during the period 2018-2019.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Except as otherwise set out in this report, the Directors are unaware of any significant changes in the state of
affairs or principal activities of the consolidated entity that occurred during the financial year.
SUBSEQUENT EVENTS
There are no material after balance dates events to report as at the date of this report.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Directors will continue to pursue oil and gas exploration and production opportunities in the Republic of
Kazakhstan.
As Jupiter Energy Limited is listed on the Australian Stock Exchange and the Kazakh Stock Exchange (KASE), it
is subject to the continuous disclosure requirements of the ASX Listing Rules and the KASE Rules for Companies
which require immediate disclosure to the market of information that is likely to have a material effect on the price
or value of Jupiter Energy Limited’s securities.
ENVIRONMENTAL REGULATION
The consolidated entity is committed to achieving the highest standards of environmental performance. Standards
set by the Government of Kazakhstan are comprehensive and highly regulated. The consolidated entity strives to
comply not only with all Kazakh government regulations, but also maintain worldwide industry standards.
To maintain these high standards the Group is committed to a locally developed environmental monitoring
program. This monitoring program will continue to expand as and when new regulations are implemented and
adopted in Kazakhstan.
HEALTH & SAFETY
The Group has developed a comprehensive Health and Safety policy for its operations in Kazakhstan and has the
appropriate personnel in place to monitor the performance of the Group with compliance under this policy. The
Group outsources many of its key drilling functions and as part of any contract entered into with third parties, a
commitment to Health & Safety and a demonstrated track record of success in this area is a key performance
indicator in terms of deciding on which companies will be contracted.
MEETINGS OF DIRECTORS
The number of meetings of the Directors held during the year and the number of meetings attended by each
Director was as follows:
10
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
Board of Directors
Number
attended
Number
eligible to
attend
5
5
3
5
2
4
5
5
3
5
2
5
Current Directors
G Gander
B Kuandykov
S Mison
A Kruzhkov
P Warren
A Kuzev
Due to the small number and geographical spread of the Directors, it was determined that the Board would
undertake all of the duties of properly constituted Audit & Compliance and Remuneration Committees.
COMPETENT PERSONS STATEMENT
General
Alexey Glebov, PhD, with over 33 years' oil & gas industry experience, is the qualified person who has reviewed
and approved the technical information contained in this report. Alexey PhD’s in technical science (1992) and
geology science (2006), an Honors Degree in Geology and Geophysics (1984) from Novosibirsk State University
and a Gold Medal (1985) from USSR Academy of Sciences. He is a member since 2001 of the European
Association of Geoscientists & Engineers (EAGE #M2001-097) and was made an Honorary Oilman in 2011 by the
Ministry of Energy of the Russian Federation. Alexey Glebov is qualified in accordance with ASX Listing Rule 5.41.
Kazakh State Approved Reserves
The information in this report which relates to the C1 and C2 Block 31 reserve estimations is based on information
compiled by Reservoir Evaluation Services LLP (“RES”), a Kazakh based oil & gas consulting Group that
specialises in oil & gas reserve estimations. RES has used the Kazakh Reserve classification system in
determining their estimations. RES has sufficient experience which is relevant to oil & gas reserve estimation and
to the specific permit in Kazakhstan to qualify as competent to verify the information pertaining to the C1 and C2
reserve estimations. RES has given and not withdrawn its written consent to the inclusion of the C1 and C2 reserve
estimations in the form and context in which they appear in this report. RES has no financial interest in the Group.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Group has entered into Deeds of Indemnity with the Directors, indemnifying them against certain liabilities and
costs to the extent permitted by law.
The Group has also agreed to pay a premium in respect of a contract insuring the Directors and Officers of the
Group against certain liabilities and costs to the extent permitted by law. Full details of the cover and premium are
not disclosed as the insurance policy prohibits the disclosure.
11
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Group has agreed to indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
AUDITOR INDEPENDENCE
The Directors received the declaration included on page 22 of this annual report from the auditor of Jupiter Energy
Limited.
NON-AUDIT SERVICES
There were no non-audit services provided by the entity’s auditors, Ernst & Young during the year.
UNISSUED SHARES UNDER OPTION
At the date of this report, there were no share options on issue and no shares were issued as a result of exercise
of options during the year.
ROUNDING OF AMOUNTS
The Company has applied the relief available to it in ASIC Legislative Instrument 2016/191, and accordingly certain
amounts included in this report and in the financial report have been rounded off to the nearest $1 (where rounding
is applicable), under the option available to the Company under ASIC Corporations.
12
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited)
This remuneration report outlines the Director and executive remuneration arrangements of the Group in accordance
with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, key
management personnel (KMP) of the Group are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether
executive or otherwise) of the Company.
For the purposes of this report, the term 'executive' encompasses the chief executive, senior executives, general
managers and secretaries of the Group.
DETAILS OF KEY MANAGEMENT PERSONNEL
Directors
Geoff Gander
Alexey Kruzhkov
Chairman / CEO (Executive)
Director (Non-Executive)
Baltabek Kuandykov
Director (Non-Executive)
Scott Mison
Director / CFO / Company Secretary (Executive) – resigned April 20 2018
Alexander Kuzev
Director (Non-Executive) - appointed on 12 September 2017
Phil Warren
Director (Non Executive) – appointed 20 April 2018
Remuneration Philosophy
The remuneration policy of the Group has been designed to align Directors and executives interests with the
shareholder and business objectives by providing a fixed remuneration component and offering long term incentives
based on a key performance area – with a focus to the material improvement in share price performance. The Board
of the Group believes the remuneration policy to be appropriate 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 of remuneration for Board members and senior executives
of the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives,
was developed by the Board after a review of similar listed and unlisted companies with activities in overseas
jurisdictions and taking into account the experience and skill set required to successfully develop operations in
these jurisdictions from early stage development. The Group does not have a remuneration committee. The Board
is of the opinion that due to the size of the Group, the functions performed by a Remuneration Committee can be
adequately handled by the full Board.
All executives receive a base salary (which is based on factors such as length of service and experience),
superannuation, fringe benefits and performance incentives.
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.
13
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
The executive Directors receive a superannuation guarantee contribution as required by the government which is
currently 9.5%, and do not receive any other retirement benefits. This contribution forms part of their total remuneration
package.
The remuneration paid to Directors and executives is valued at the cost to the Group and expensed.
REMUNERATION STRUCTURE
Non-Executive Director Remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
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. The maximum aggregate amount of fees that can be paid to non-executive Directors is subject to
approval by shareholders at the Annual General Meeting. Total remuneration for all non-executive Directors, is not to
exceed $350,000 per annum as approved by shareholders at the Annual General Meeting held on 15 November 2010.
Fees for non-executive Directors are not linked to performance of the Group. Non-executive Directors are also
encouraged to hold shares in the company.
Directors who are called upon to perform extra services beyond the director’s ordinary duties may be paid additional
fees for those services.
Executive Remuneration
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Group so as to:
reward executives for Group, business unit and individual performance;
align the interests of executives with those of shareholders;
ensure total remuneration is competitive by market standards.
link reward with the strategic goals and performance of the Group; and
14
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Structure
In determining the level and make-up of executive remuneration, the Board reviews remuneration packages provided
by similar listed and unlisted companies with activities in overseas jurisdictions and taking into account the experience
and skill set required to successfully develop operations in these jurisdictions from early stage development as well
as the salary levels of local workers in that jurisdiction. It is the Board’s policy that employment contracts are entered
into with the Chief Executive Officer and all key management personnel.
Fixed Remuneration
The fixed remuneration of executives is comprised of a base salary and superannuation. The fixed remuneration of
executives is reviewed annually.
Variable remuneration – Short Term Incentives (STI)
The Group operates a STI program for its Kazakh based employees, which is based on a cash bonus subject to the
attainment of clearly defined Branch and individual measures.
Actual STI payments awarded to each employee depends on the extent to which specific targets are met. The targets
consist of a number of key performance indicators (KPIs) covering financial and non-financial Branch and individual
measures of performance.
Directors are not eligible for participation in the STI program.
Variable Remuneration – Long Term Incentives (LTI)
Objective
The objectives of long term incentives are to:
align executives remuneration with the creation of shareholder wealth;
recognise the ability and efforts of the Directors, employees and consultants of the Group who have
contributed to the success of the Group and to provide them with rewards where deemed appropriate;
provide an incentive to the Directors, employees and consultants to achieve the long term objectives of the
Group and improve the performance of the Group; and
attract persons of experience and ability to employment with the Group and foster and promote loyalty
between the Group and its Directors, employees and consultants.
Structure
Long term incentives granted to Directors and senior executives are delivered either in the form of a defined bonus or
via the issue of Performance Rights, issued under the Performance Rights Plan. There were no performance rights
issued during the current financial year or prior financial year. There is a bonus that forms part of the CEO package
which is linked to the sale of the permit area.
15
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Group Performance
Due to the current embryonic stage of the Group’s growth it is not appropriate at this time to evaluate the Group’s
financial performance using generally accepted measures such as EBITDA and profitability; this assessment will be
developed over the next few years.
The following information provides a summary of Jupiter Energy’s financial performance for the last five years:
2018
$
2017
$
2016
$
2015
$
2014
$
Revenue
2,922,167
-
-
3,896,359
7,586,442
Loss before income tax
(10,023,725)
(8,076,857)
(10,474,870)
(10,982,261)
(2,547,271)
Earnings per share (cents)
Last share price at Balance Date
Market capitalization
(6.54)
0.041
6.3m
(5.27)
0.25
38.3m
(6.81)
0.25
38.3m
(7.16)
0.25
38.3m
(1.66)
0.40
61.4m
16
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Remuneration of Directors and Executives
Table 1: Remuneration for the year ended 30 June 2018
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash
salary and
Consulting
fees
Cash
bonus
$
$
Other
$
Super-
annuation
Performance
Rights
$
$
Remuneration
consisting of
Performance
Rights
Performance
related
%
%
-
-
Total
$
52,154
220,111
-
30,966
303,231
356,970
90,000
446,970
750,201
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
40,000
-
40,000
40,000
-
-
-
-
-
-
-
Name
Non-executive director
A Kruzhkov (a)
B Kuandykov (b)
P Warren (c)
A Kuzev (d)
52,154
220,111
-
30,966
Total non-executive director
303,231
Executive director
G Gander (e)
S Mison (f)
Total executives
Totals
316,970
90,000
406,970
710,201
*Directors fees from February 2015 have been deferred until such time that at least US$5,000,000 in new equity is raised or alternatively the
Group sells the Block 31 licence and receives the funds associated with that sale.
(a): Directors Fees of US$40,000 (A$52,154) have been deferred.
(b): Amount includes Non Executive Director fee of US$40,000 (A$52,154) and Consulting Fees of US$120,000 (A$167,957). Director fees of
US$40,000 (A$52,154) have been deferred. During the year, further consulting fees of A$258,414 (2016: A$40,599) were accrued and paid
under normal terms and conditions to Meridian Petroleum LLP, of which Mr. Kuandykov is a director, for the provision of geological services at
normal commercial rates.
(c) Appointed 20 April 2018. For the period since appointment and in accordance with the agreement between Grange Consulting Group Pty Ltd
(“Grange”) and the Group, the Group incurred $24,483 in corporate consulting fees and office rent charged by Grange. Of this amount, $8,283
was incurred by the Group for services provided by Mr. Warren who is a Director of Grange Consulting. This amount is not included in the
remuneration of Mr Warren and is not payable to Mr Warren.
(d): Appointed 12 September 2017. Directors Fees of US$40,000 (A$52,154) have been deferred.
(e): Directors Fees of A$40,000 have been deferred. During the year, consulting fees of $316,970 were accrued and paid under normal terms
and conditions to Symdean Pty Ltd, of which Mr Gander is a director for his role as CEO.
(f): Fees relate to CFO / Company Secretary (A$65,000) and Director Fees (A$25,000). The Directors fees of A$25,000 have been deferred.
17
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Table 2: Remuneration for the year ended 30 June 2017
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash
salary and
Consulting
fees
Cash
bonus
$
$
Other
$
Super-
annuation
Performance
Rights
$
$
Name
Non-executive director
A Beardsall (a)
B Kuandykov (b)
52,961*
211,805*
Total non-executive director
264,766
Executive director
G Gander (c)
S Mison (d)
Total executives
Totals
305,410*
108,000*
413,410
678,176
-
-
-
-
-
-
-
-
-
-
-
-
-
142,972
40,000
-
-
142,972
142,972
40,000
40,000
-
-
-
-
-
-
-
Remuneration
consisting of
Performance
Rights
Performance
related
%
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
52,961
211,805
264,766
488,382
108,000
596,382
861,148
* Directors fees from February 2015 have been deferred until such time that at least US$5,000,000 in new equity is raised or alternatively the
Group sells the Block 31 licence and receives the funds associated with that sale.
(a): Appointed 26 August 2016. Directors Fees of US$40,000 (A$52,961) have been deferred.
(b): Fees relate to Non Executive Director fee of US$40,000 (A$52,961) and Consulting Fees of US$120,000 (A$158,844). Director fees of
US$40,000 (A$52,961) have been deferred.
During the year, further consulting fees of A$222,084 (2016: A$40,599) were accrued and paid under normal terms and conditions to Meridian
Petroleum LLP, of which Mr. Kuandykov is a director, for the provision of geological services at normal commercial rates.
(c): Directors Fees of A$40,000 have been deferred. During the year, consulting fees of $189,000 (2016: $211,000) were accrued and paid
under normal terms and conditions to Symdean Pty Ltd, of which Mr Gander is a director for his role as CEO.
(d): Fees relate to CFO / Company Secretary (A$78,000) and Director Fees (A$30,000). The Directors fees of A$30,000 have been deferred.
Compensation Options: Granted and vested during the year ended 30 June 2018
During the 2018 and 2017 financial years, there were no options granted. No options, listed or unlisted, were exercised
during the year.
Performance Rights
During the 2018 and 2017 financial years, there were no performance rights granted.
18
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Shares issued on Exercise of Compensation Options
There were no shares issued on the exercise of compensation options during the financial years ended 30 June 2018
or 30 June 2017.
Compensation Performance Rights: Granted and vested during the year ended 30 June 2018
During the 2018 and 2017 year, there were no performance rights vested and no additional performance rights were
granted.
Shareholdings
The number of shares in the Company held by each Key Management Personnel of Jupiter Energy Limited during the
financial year, including their personally-related entities, is set out below:
2018
Directors
G Gander
A Kruzhkov
A Kuzev*
B Kuandykov
S Mison**
P Warren ***
Balance
1 July 2017
Granted as
Remuneration
On Exercise of
Options
Net Change
Other
Balance
30 June 2018
811,112
-
-
-
391,238
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(391,238)
-
811,112
-
-
-
-
-
* Mr Kuzev was appointed on 12 September 2017
** Mr Mison resigned 20 April 2018
** Mr Warren was appointed on 20 April 2018
2017
Directors
G Gander
B Kuandykov
A Kruzhkov
S Mison
Balance
1 July 2016
Granted as
Remuneration
On Exercise of
Options
Net Change
Other
Balance
30 June 2017
811,112
-
-
391,238
-
-
-
-
-
-
-
-
-
-
-
-
811,112
-
-
391,238
Performance Rights Holdings
There were no performance rights held by, granted to or exercised by Key Management Personnel during the financial
years ended 30 June 2018 or 30 June 2017.
Option Holdings
There were no options held by, granted to or exercised by Key Management Personnel during the financial years
ended 30 June 2018 or 30 June 2017.
19
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
DIRECTORS’ REPORT (continued)
REMUNERATION REPORT (Audited) (continued)
Service agreements
The Group has an Executive services agreement with its Executive Director and has non-executive appointment letters
outlining the policies and terms of appointment, including compensation, for each non-executive Director. These
represent the service agreements for all KMP’s of the group. The main provisions of the agreements in relation to
Directors holding management roles are set out below:
Geoff Gander, Executive Chairman (Effective – 8 September 2017)
Base Terms
This agreement was effective from 8 September 2017 and has no set term.
Base Salary of GBP200,000 (A$340,000) including Director Fees and the current Superannuation Levy of
9.5%.
Mr Gander will be paid a Bonus of $US350,000 or 0.5% (whichever is greater) of the value of the consideration
received by the Group if the Company or Contract 2275 is assigned, transferred or sold to a third party during
the term of the Agreement.
Director fees of A$3,333 per month (included in Base Salary figure above), deferred until such time that at
least US$5,000,000 in new equity is raised or alternatively the Group sells the Block 31 licence and receives
the funds associated with that sale.
The main provisions of the agreements in relation to non-executive Directors are set out below:
Baltabek Kuandykov, Non-Executive Director (Effective – 5 October 2010)
Mr Kuandykov is entitled to a base fee of US$ 40,000 per annum. Mr Kuandykov’s fees are deferred until such time
that at least US$5,000,000 in new equity is raised or alternatively the Group sells the Block 31 licence and receives
the funds associated with that sale. Mr Kuandykov will be reimbursed any expenses properly incurred concerning the
Group’s affairs. Mr Kuandykov has entered in to a management consulting agreement for which he is entitled to US$
10,000 per month for services to the Groups Kazakhstan operations. The appointment of Mr Kruzhkov as a non-
executive Director is otherwise on terms that are customary for an appointment of this nature.
Alexey Kruzhkov, Non-Executive Director (Effective – 18 June 2016)
Mr Kruzhkov is entitled to a base fee of US$ 40,000 per annum. Mr Kruzhkov’s fees are deferred until such time that
at least US$5,000,000 in new equity is raised or alternatively the Group sells the Block 31 licence and receives the
funds associated with that sale. Mr Kruzhkov will be reimbursed reasonable expenses incurred in performing his duties,
including the cost of attending Board Meetings, travel, accommodation and entertainment where agreed to by the
Board. The appointment of Mr Kruzhkov as a non-executive Director is otherwise on terms that are customary for an
appointment of this nature.
Alexander Kuzev, Non-Executive Director (Effective – 12 September 2017)
Mr Kuzev is entitled to a base fee of US$ 30,000 per annum. Mr Kuzev’s fees are deferred until such time that at least
US$5,000,000 in new equity is raised or alternatively the Group sells the Block 31 licence and receives the funds
associated with that sale. Mr Kuzev will be reimbursed reasonable expenses incurred in performing his duties,
including the cost of attending Board Meetings, travel, accommodation and entertainment where agreed to by the
Board. The appointment of Mr Kuzev as a non-executive Director is otherwise on terms that are customary for an
appointment of this nature.
20
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
Phil Warren, Non-Executive Director (Effective – 20 April 2018)
Mr Warren is paid a base fee of $nil and will be reimbursed reasonable expenses incurred in performing his duties,
including the cost of attending Board Meetings, travel, accommodation and entertainment where agreed to by the
Board. Mr Warren is the Managing Director of Grange Consulting Group Pty Ltd, with which the Group has entered in
to a corporate consulting agreement for corporate compliance and financial management services. The appointment
of Mr Warren as a non-executive Director is otherwise on terms that are customary for an appointment of this nature.
The termination provisions are as follows:
Contractor - initiated termination with reason or for
Contractor incapacitation
Notice period
Payment in lieu of
notice
1 month
12 months
Company - initiated termination without reason
12 months
12 months
Company – initiated termination for serious misconduct
None
None
Contractor – initiated termination without reason
12 months
12 months
Contractor – initiated termination with reason
30 days
12 months
Other Transactions with Key Management Personnel
Baltabek Kuandykov
Phil Warren
During the year, consulting fees of A$258,414 (2017: A$222,084) were
accrued and paid under normal terms and conditions to Meridian
Petroleum LLP, of which Mr. Kuandykov is a director, for the provision of
geological services at normal commercial rates.
During the year, consulting fees of A$24,483 (2017: A$Nil) were accrued
and paid under normal terms and conditions to Grange Consulting, of
which Mr. Warren is a director, for the provision of corporate consulting
services and office rent at normal commercial rates.
End of Remuneration Report (Audited)
This report has been made in accordance with a resolution of the Directors.
G A Gander
Director
Perth, Western Australia
28 September 2018
21
For personal use only
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of Jupiter Energy
Limited
As lead auditor for the audit of Jupiter Energy Limited for the financial year ended 30 June 2018, I
declare to the best of my knowledge and belief, there have been:
a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Jupiter Energy Limited and the entities it controlled during the financial
year.
Ernst & Young
Darryn Hall
Partner
Perth
28 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:DA:JUPITER:031
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
Financial Statements
FOR THE YEAR ENDED 30 JUNE 2018
23
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Revenue
Cost of sales
Gross profit
Foreign exchange gain / (loss)
General and administrative expenses
Operating loss
Finance income
Finance costs
Loss before tax
Income tax expense
Loss after income tax
Consolidated
Note
4
2018
$
2,922,167
(1,595,649)
1,326,518
(2,160,291)
(2,423,427)
(3,257,200)
18,925
17
(6,785,450)
(10,023,725)
2017
$
-
-
-
1,516,992
(2,965,210)
(1,448,218)
19,030
(6,647,669)
(8,076,857)
5
-
(10,023,725)
-
(8,076,857)
Other comprehensive (loss)/income to be reclassified to
profit or loss in subsequent periods net of tax
Foreign currency translation
Total comprehensive (loss)/income for the period
(740,377)
(10,764,102)
781,407
(7,295,450)
Earnings per share for loss attributable to the ordinary equity
holders of the Group:
Basic loss per share (cents)
Diluted loss per share (cents)
23
23
(6.54)
(6.54)
(5.27)
(5.27)
The consolidated statement of comprehensive income is to be read in conjunction with the notes of the financial statements
24
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Inventories
Total Current Assets
Non-Current Assets
Trade and other receivables
Oil and gas properties
Plant and equipment
Exploration and evaluation expenditure
Other financial assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Deferred Revenue
Total Current Liabilities
Non-current Liabilities
Provisions
Other financial liabilities
Total Non-Current Liabilities
Total Liabilities
Net Deficit
Equity
Contributed equity
Share based payment reserve
Foreign currency translation reserve
Accumulated losses
Total Equity / (Deficit)
Consolidated
Note
2018
$
2017
$
6
7
8
9
7
10
11
12
13
14
15
16
17
18
19
19
408,241
164,367
148,945
43,968
765,521
2,599,429
17,228,238
564,453
28,614,808
410,210
49,417,138
50,182,659
1,734,647
41,629
1,776,276
244,258
62,510,430
62,754,688
64,530,964
397,109
145,139
16,489
18,352
577,089
2,845,507
15,112,180
338,386
29,930,249
396,635
48,622,957
49,200,046
877,359
-
877,359
234,680
51,672,210
51,906,890
52,784,249
(14,348,305)
(3,584,203)
85,633,935
5,764,014
(26,262,620)
(79,483,634)
(14,348,305)
85,633,935
5,764,014
(25,522,243)
(69,459,909)
(3,584,203)
The consolidated statement of financial position is to be read in conjunction with the notes of the financial statements.
25
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Cash flow from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Net cash flows (used in) operating activities
Cash flows from investing activities
Payments for exploration and evaluation expenditure
Payments for property, plant and equipment
Net Cash flows (used in) investing activities
Cash flows from financing activities
Proceeds from unsecured loan
Net cash flows from financing activities
Net (decrease) in cash held
Effects of exchange rate changes
Cash at beginning of the year
Cash at end of the year
Note
Consolidated
2018
$
2017
$
3,209,873
(3,053,793)
18,925
175,005
-
(2,817,239)
19,030
(2,798,209)
25
(1,908,594)
(1,365)
(1,909,959)
(1,099,755)
(5,000)
(1,104,755)
1,773,172
1,773,172
38,218
(27,086)
397,109
408,241
3,626,893
3,626,893
(276,071)
9,734
663,446
397,109
6
The statement of cash flows is to be read in conjunction with the notes of the financial statements.
26
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Contributed
Equity
Share Based
Payment
Reserve
Note
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
$
$
CONSOLIDATED
As at 1 July 2016
Loss for the period
Other comprehensive loss
19
Total comprehensive loss
Transactions by owners recorded
directly in equity:
Share based payments
85,633,935
5,764,014 (26,303,650)
(61,383,052)
3,711,247
-
-
-
-
-
-
-
-
-
(8,076,857)
(8,076,857)
781,407
-
781,407
781,407
(8,076,857)
(7,295,450)
-
-
-
At 30 June 2017
85,633,935
5,764,014 (25,522,243)
(69,459,909)
(3,584,203)
As at 1 July 2017
Loss for the period
Other comprehensive loss
19
Total comprehensive loss
Transactions by owners recorded
directly in equity:
Share based payments
85,633,935
5,764,014 (25,522,243)
(69,459,909)
(3,584,203)
-
-
-
-
-
-
-
-
-
(10,023,725)
(10,023,725)
(740,377)
-
(740,377)
(740,377)
(10,023,725)
(10,764,102)
-
-
-
At 30 June 2018
85,633,935
5,764,014 (26,262,620)
(79,483,634)
(14,348,305)
The statements of changes in equity are to be read in conjunction with the notes of the financial statements.
27
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
1
CORPORATE INFORMATION
The financial report of Jupiter Energy Limited for the year ended 30 June 2018 was authorised for issue in accordance
with a resolution of the directors on 28 September 2018.
Jupiter Energy Limited is a Company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Stock Exchange and on the Kazakh Stock Exchange. Jupiter Energy Limited is a for profit entity.
The nature of the operations and principal activities of the Group are described in the Directors Report on pages 2 to 12
of this report.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board. The financial report has also been prepared on a historical cost basis except for certain
financial instruments measured at fair value. The financial report is presented in Australian dollars.
The amounts contained within this report have been rounded to nearest $1 (where rounding is applicable) under the option
available to the Company under ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument 2016/191.
Going Concern
The consolidated financial statements have been prepared on a going concern basis with the Directors of the opinion that
the Group can meet its obligations as and when they fall due.
As at 30 June 2018 The Group had a net liability position of $14,348,305. However, as at 30 June 2018, the Group had
available $US 4,161,746 ($A 5,629,475) under its two existing framework funding agreements (refer to note 17 for
additional detail).
Based on management forecasts, the Group has sufficient working capital, including its access to the funding noted above,
to maintain operations for a period of 12 months following the date of these financial statements. This is though dependent
on the Group being able to achieve oil production targets from both existing wells and new wells expecting to commence
trial production during the forecast period. However, for the Group to carry out its 2018-2019 Work Program and develop
Block 31 (which includes a requirement to drill two new wells) to the stage where export oil sales are being achieved and
further development of the field is self-funding, the group will need to secure additional funding. Further, as disclosed in
note 17, the 2017 funding agreement is repayable on 31 July 2019 or such later date agreed by the parties in writing.
Based on current forecasts, the Group will require additional funding or an extension of this repayment date if it is to meet
its obligations under the agreement.
Funding options may include the further issue of new equity, reserve based debt, convertible debt or a combination of
these and other funding instruments.
The Directors, after consultation with the major shareholders and debt providers, are confident of being able to raise the
required capital and extend repayment terms as required, but note that financing and extension has not been secured at
the date of this report. Should the Group not achieve the matters set out above, there is uncertainty whether the Group
would continue as a going concern and therefore whether it would realise its assets and extinguish its liabilities in the
normal course of business and at the amounts stated in the financial report. The financial report does not include
adjustments relating to the recoverability or classification of the recorded assets amounts nor to the amounts or
classification of liabilities that might be necessary should the Group not be able to continue as a going concern.
28
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Statement of compliance
The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards
Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
The new standards and amendments to standards that are mandatory for the first time in the financial year commenced
on 1 July 2017 do not affect any amounts recognised in the current or prior years, and are not likely to materially affect
amounts in future years. The Group has not elected to apply any pronouncements before their operative date in the
financial year ended 30 June 2018.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective
have not been adopted by the Group for the annual reporting period ending 30 June 2018. These are as follows:
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and
Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall
be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect
contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets
are to be classified and measured at fair value through profit or loss unless the Group makes an irrevocable election on
initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive
income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the
Group's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management activities
of the Group. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased
significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional
new disclosures. The Group will adopt this standard from 1 July 2018.
Whilst the Group continues to complete its assessment of AASB 9, it does not expect the new changes to have any material
impact on its recognition or measurement of financial assets or liabilities.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard provides a
single standard for revenue recognition. The core principle of the standard is that a Group will recognise revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Group
expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal
or implied) to be identified, together with the separate performance obligations within the contract; determine the
transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the
separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or
estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation
is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the
performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance
obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For
performance obligations satisfied over time, a Company would select an appropriate measure of progress to determine
how much revenue should be recognised as the performance obligation is satisfied.
29
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Statement of compliance (continued)
The Group will adopt this standard from 1 July 2018 and is continuing to assess the impact of its adoption. As the Group
is not responsible for transport of oil sold (i.e. sales occur at the wellhead), it is not likely that the new standard will result
in additional performance obligations being identified and therefore altering the revenue recognition. As a result, it is
expected that there will be no change to the recognition of sales revenue as a consequence of adopting this standard.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB
117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions,
a 'right-of-use' asset will be capitalised in the statement of financial position, measured as the present value of the
unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12
months or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting
policy choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as
incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease
incentives received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs.
Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included
in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier
periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will
be improved as the operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16.
For classification within the statement of cash flows, the lease payments will be separated into both a principal (financing
activities) and interest (either operating or financing activities) component. For lessor accounting, the standard does not
substantially change how a lessor accounts for leases. The Group will adopt this standard from 1 July 2019. As the Group
does not have any material lease agreements in place, it is not expected that this standard will have any impact.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of Jupiter Energy Limited and its subsidiaries (as
outlined in Note 27). Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group
controls an investee if and only if the Group has:
▪ Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee);
▪ Exposure, or rights, to variable returns from its involvement with the investee; and
▪ The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
▪ The contractual arrangement with the other vote holders of the investee;
▪ Rights arising from other contractual arrangements; and
▪ The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over
the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the
30
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Basis of consolidation (continued)
date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent
of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into
line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are eliminated on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If
the Group loses control over a subsidiary, it:
▪ De-recognises the assets (including goodwill) and liabilities of the subsidiary;
▪ De-recognises the carrying amount of any non-controlling interests;
▪ De-recognises the cumulative translation differences recorded in equity;
▪ Recognises the fair value of the consideration received;
▪ Recognises the fair value of any investment retained;
▪ Recognises any surplus or deficit in profit or loss; and
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as
appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.
(d) Significant accounting estimates and assumptions
Judgments
In the process of applying the Group’s accounting policies, management has made the following judgments, which have
the most significant effect on the amounts recognised in the consolidated financial statements:
Production start date
The group assesses each well to determine when the well moves into the production stage. This is when the well is
substantially completed and ready for intended use. The group considers various criteria in determining the production
start date, including but not limited to, results of well testing, the ability of the well to sustain ongoing production, installation
of the relevant well infrastructure and receiving the relevant regulatory approvals.
When the well moves into the production stage the capitalisation of certain development costs ceases and costs incurred
are expensed as a production cost. It also at this point when that the well commences depreciation. Any proceeds received
from oil sales prior to the production start date as part of any well testing, are capitalised to the asset.
Impairment of assets
At each reporting date, the Group reviews the carrying values of its assets to determine whether there is any indication
those assets have been impaired. The Group has determined that no such impairment indicators existed for the year ended
30 June 2018 or subsequently. In making this judgement, management have considered internal and external sources of
information including an assessment of operational performance as well as key modelling assumptions such as current
and forecast oil price, discount rates, market valuations for similar assets and the market capitalisation of the group.
31
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Significant accounting estimates and assumptions (continued)
Recognition of deferred tax assets
Judgement is required in determining whether deferred tax assets are recognised in the statement of financial
position. Deferred tax assets, including those arising from unutilised tax losses, require the Group to assess the likelihood
that the Group will generate sufficient taxable earnings in future periods, in order to utilise recognised deferred tax assets.
Judgment is also required in respect of the application of existing tax laws in each jurisdiction.
Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These
estimates of future taxable income are based on forecast cash flows from operations (which are impacted by production
and sales volumes oil prices, reserves, operating costs, closure and rehabilitation costs, capital expenditure, and other
capital management transactions). To the extent that future cash flows and taxable income differ significantly from
estimates, the ability of the Group to realise the net deferred tax assets recorded at the reporting date could be impacted.
In addition, future changes in tax laws in the jurisdictions in which the Group operates could limit the ability of the Group
to obtain tax deductions in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Group based its assumptions and estimates on parameters available when the
consolidated financial statements were prepared. Existing circumstances and assumptions about future developments,
however, may change due to market change or circumstances arising beyond the control of the Group. Such changes are
reflected in the assumptions when they occur.
Exploration and evaluation
The Group's accounting policy for exploration and evaluation is set out in note 2(f). The application of this policy necessarily
requires management to make certain judgements, estimates and assumptions as to future events and circumstances, in
particular the assessment of whether economic quantities of reserves may be found. Any such, estimates and assumptions
may change as new information becomes available. If, after having capitalised expenditure under the Group’s policy,
management concludes that the Group is unlikely to recover the expenditure by future exploitation or sale, then the relevant
capitalised amount will be written off to the profit and loss.
Provision for restoration
Costs of site restoration are provided over the life of the field and related facilities from when exploration commences and
are included in the costs of that stage. Site restoration costs include the dismantling and removal of plant, equipment and
building structures, waste removal, and rehabilitation of the site in accordance with clauses of the permits.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and
future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within
one year of abandoning the site.
32
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Significant accounting estimates and assumptions (continued)
Units of production depreciation of oil and gas properties
Oil and gas properties are depreciated using the units of production (UOP) method over total proved and probable
hydrocarbon reserves. This results in a depreciation/amortisation charge proportional to the depletion of the anticipated
remaining production from the field/well.
Each items’ life, which is assessed annually, has regard to both its physical life limitations and to present assessments of
economically recoverable reserves of the field at which the asset is located. These calculations require the use of estimates
and assumptions, including the amount of recoverable reserves. The calculation of the UOP rate of depreciation could be
impacted to the extent that actual production in the future is different from current forecast production based on total proved
and probable reserves. Changes to proved and probable reserves could arise due to changes in the factors or assumptions
used in estimating reserves, including:
-
The effect on proved and probable reserves of differences between actual commodity prices and commodity price
assumptions; or
- Unforeseen operational issues.
Changes are accounted for prospectively.
Recoverability of oil and gas properties
The Group assesses each asset or cash generating unit (CGU) (excluding goodwill, which is assessed annually regardless
of indicators) every reporting period to determine whether any indication of impairment exists. Where an indicator of
impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair
value less costs of disposal and value in use. These assessments require the use of estimates and assumptions such as
long-term oil prices (considering current and historical prices, price trends and related factors), discount rates, operating
costs, future capital requirements, decommissioning costs, exploration potential, reserves operating performance (which
includes production and sales volumes). These estimates and assumptions are subject to risk and uncertainty. Therefore,
there is a possibility that changes in circumstances will impact these projections, which may impact the recoverable amount
of assets and/or CGUs. Management has assessed Block 31 as being an individual CGU, which is the lowest level for
which cash inflows are largely independent.
Fair value measurement
-
Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length
transaction between knowledgeable and willing parties. Fair value is generally determined as the present value
of estimated future cash flows arising from the continued use of the assets, which includes estimates such as the
cost of future expansion plans and eventual disposal, using assumptions that an independent market participant
may take into account. Cash flows are discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.
(e) Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the part is
incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the plant
33
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e) Plant and equipment (continued)
and equipment as a replacement only if it is eligible for capitalisation. All other repairs and maintenance are recognised in
profit or loss as incurred.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Plant and equipment – over 3 to 10 years
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial year end.
Disposal
An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected
to be derived from its use or disposal on a prospective basis.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the profit or loss in the year the asset is derecognised.
(f) Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These costs
are only carried forward to the extent that they are expected to be recouped through the successful development of the
area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves. A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area of interest.
Unsuccessful exploration in the area of interest is expensed as incurred even if activities in this area of interest are
continuing. Accumulated costs in relation to an abandoned area are written off in full to profit or loss in the year in which
the decision to abandon the area is made.
When a discovered oil or gas field enters the development phase or an individual well is assessed as being in production
(once a trial production licence is granted) the accumulated exploration and evaluation expenditure is transferred to oil and
gas properties.
(g) Oil and gas properties
Oil and gas properties usually comprise single oil or gas fields being developed for future production or which are in the
production phase. Where several individual oil fields are to be produced through common facilities, the individual oil field
and the associated production facilities are managed and reported as a single oil and gas asset.
Assets in development
When the technical and commercial feasibility of an undeveloped oil or gas field has been demonstrated, the field enters
its development phase. The costs of oil and gas assets in the development phase are accounted for as tangible assets
and include past exploration and evaluation costs, development drilling and plant and equipment and any associated land
and buildings.
Producing assets
The costs of oil and gas assets in production are accounted for as tangible assets and include past exploration and
evaluation costs, pre-production development costs and the ongoing costs of continuing to develop reserves for production
and to expand or replace plant and equipment and any associated land and buildings. Producing assets are depreciated
over total proved and probable reserves on a unit of production basis.
34
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(h)
Impairment of assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets (excluding goodwill) to
determine whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs of disposal and value in use, is
compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed
to the profit or loss.
(i) Trade and other receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at amortised cost amount less an
allowance for any uncollectible amounts.
An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off
when identified.
(j) Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
(k)
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in
the ordinary course of business less the estimated costs of completion and any estimated selling costs.
Cost includes those costs incurred in bringing each component of inventory to its present location and condition.
(l) Trade and other payables
Trade payables and other payables are carried at amortised costs and due to their short-term nature are not discounted.
They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid
and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and
services. The amounts are unsecured and are usually paid within 30 days of recognition.
(m) Financial liabilities
Financial liabilities within the scope of AASB 139 are classified as financial liabilities at fair value through profit or loss,
loans and borrowings, or as derivatives, as appropriate. The Group determines the classification of its financial liabilities
at initial recognition.
All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, plus directly attributable
transaction costs and are either subsequently measured at amortised cost or fair value through profit or loss. The Group’s
financial liabilities include trade and other payables, loans and borrowings and derivative financial instruments.
35
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m) Financial liabilities (continued)
Derivative Financial Instruments
Derivatives are fair valued using appropriate valuation techniques. Such techniques may include using recent arm’s length
market transactions; reference to the current fair value of another instrument that is substantially the same; a discounted
cash flow analysis or other valuation techniques. Fair value movements are recognised in the profit or loss.
(n) Share-based payment transactions
Share-based compensation benefits are provided to directors and executives.
Performance Rights
The cost of Performance Rights are measured by reference to the fair value at the date at which they are granted. The fair
value is determined using a Monte Carlo methodology, which considers the incorporation of market based hurdles. Non-
market conditions are not factored into the fair value of the performance rights at grant date. Probability factors are
assigned to the vesting expense as to whether non market conditions will be met.
(o) Revenue recognition
Sales revenue
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and
revenue can be measured reliably. Revenue generated during the development stage of an asset, is offset against the
carrying value of the asset, rather than recognised in the profit or loss within the statement of comprehensive income.
Interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the
financial asset.
(p)
Income tax
The consolidated entity adopts the liability method of tax-effect accounting whereby the income tax expense is based on
the profit adjusted for any non-assessable or disallowed items.
Deferred tax is accounted for using the liability method in respect of temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting
or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is
settled. Deferred tax is credited in the income statement except where it relates to items that may be credited directly to
equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against
which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no
adverse change will occur in income taxation legislation and the anticipation that the consolidated entity will derive
sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility
imposed by the law.
36
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q) Other taxes
Revenues, expenses and assets are recognised net of the amount of GST or VAT except:
where the GST or VAT incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST or VAT is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
receivables and payables are stated with the amount of GST or VAT included.
The net amount of GST or VAT recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the balance sheet.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST or VAT 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 or VAT recoverable from, or payable to, the
taxation authority.
(r) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(s) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs
of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus
element.
(t) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the income statement net of any reimbursement.
37
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(t) Provisions (continued)
If 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.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Restoration
Costs of site restoration are provided over the life of the field or facility from when exploration commences and are included
in the costs of that stage. Site restoration costs include the dismantling and removal of plant, equipment and building
structures, waste removal, and rehabilitation of the site in accordance with clauses of the permits. Such costs have been
determined based on current legal requirements and technology. In calculating the provision the future estimated costs
are discounted to present value.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations and
future legislation. Accordingly the costs have been determined on the basis that the restoration will be completed within
one year of abandoning the site.
(u) Employee leave benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to
be settled wholly within 12 months of the reporting date are recognised in provisions in respect of employees' services up
to the reporting date. They are measured at the nominal amounts based on current wage and salary rates, and include
related on-costs. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at
the rates paid or payable.
(v) Foreign currency transactions and balances
(i) Functional and presentation currency
Both the functional and presentation currency of Jupiter Energy Limited and each of its Australian subsidiaries are
Australian dollars ($). The Singapore subsidiaries' functional currency is United States Dollars which is translated to the
presentation currency of the Group, being Australian dollars ($). The functional currency of the Branch of the Singapore
subsidiary is Tenge (see below for consolidated reporting).
(ii) Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate
of exchange ruling at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
(iii) Translation of Group Companies’ functional currency to presentation currency
The results of the Singapore subsidiaries are translated into Australian Dollars (presentation currency of the Group) as at
the date of each transaction. Assets and liabilities are translated at exchange rates prevailing at reporting date.
Exchange variations resulting from the translation are recognised in the foreign currency translation reserve in equity.
38
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(v) Foreign currency transactions and balances (continued)
On consolidation, exchange differences arising from the translation of the net investment in the Singapore subsidiaries
and its Branch are taken to the foreign currency translation reserve. If a Singapore subsidiary was sold, the proportionate
share of exchange differences would be reclassified to profit or loss
(w) Segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenue and
incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
whose operating results are regularly reviewed by the Board of Directors (the chief operating decision makers) to make
decisions about resources to be allocated to the segment and assess its performance and for which discrete financial
information is available. Management will also consider other factors in determining operating segments such as the
existence of a line manager and the level of segment information presented to the executive management team.
Operating segments are identified based on the information provided to the chief operating decision makers. Currently
the Group has only one operating segment, being the Group.
(x) Borrowing costs
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Where funds are borrowed specifically to finance a project, the amount capitalised represents the actual borrowing costs
incurred. Where surplus funds are available for a short term out of money borrowed specifically to finance a project, the
income generated from the temporary investment of amounts is also capitalised and deducted from the total capitalised
borrowing cost. Where the funds used to finance a project form part of general borrowings, the amount capitalised is
calculated using a weighted average of rates applicable to relevant general borrowings of the Group during the period.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Even though exploration and evaluation assets can be qualifying assets, they generally do not meet the probable economic
benefits test and also are rarely debt funded. Any related borrowing costs are therefore generally recognised in profit or
loss in the period they are incurred.
3
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group's principal financial instruments comprise receivables, borrowings, payables and cash.
Risk exposures and responses
The main purpose of these financial instruments is to provide finance for the Group’s operations. The Group has various other
financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The main
risks arising from the Group’s financial instruments are cash flow interest rate risk, liquidity risk, foreign currency risk and credit
risk.
Primary responsibility for identification and control of financial risks rests with the Board. The Board reviews the risks identified
below, including the setting of limits for trading in derivatives, hedging cover of foreign currency and interest rate risk, credit
allowances, and future cash flow forecast projections.
39
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
3
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Interest rate risk
The Group’s exposure to market risk for changes in interest rates is only on cash and cash equivalents. Other financial liabilities
in the form of Promissory notes carry fixed interest and are therefore not subject to interest rate risk.
At balance date, the Group had the following mix of financial assets and liabilities exposed to interest rate risk:
Financial Assets
Cash and cash equivalents
Net exposure
Consolidated
2018
$
2017
$
408,241
408,241
397,109
397,109
The following table summarises the sensitivity of the fair value of the financial instruments held at balance date, if interest rates
had moved, with all other variables held constant, pre-tax profit and equity would have been affected as follows:
Pre–tax gain / (loss) and equity
+1%
-1%
Foreign currency risk
Consolidated
2018
$
2017
$
4,082
(4,082)
3,971
(3,971)
The Group has transactional currency exposures. Such exposure arises from sales or purchases by an operating entity in
currencies other than the functional currency.
At balance date, the Group had the following exposure to United States Dollars (USD), Great Britain Pound (GBP) and Singapore
Dollars (SGD) foreign currency that is not designated in cash flow hedges:
40
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
3
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Financial Assets
Cash and cash equivalents
-
USD
-
-
SGD
GBP
Financial Liabilities
Other financial liabilities
Net exposure
Consolidated
2018
$
2017
$
311,732
-
7,921
319,653
289,924
1,859
681
292,464
(62,510,430)
(62,510,430)
(62,190,777)
(51,672,210)
(51,672,210)
(51,379,746)
The following table summarises the sensitivity of financial instruments held at balance date to movement in the exchange rate of
the Australian dollar to the United States Dollar, with all other variables held constant. The 5% sensitivity is based on reasonably
possible changes, over a financial year, using the observed range of actual historical rates for the preceding 5 periods.
Post – tax gain / (loss)
+5%
-5%
Credit risk
Consolidated
2018
$
2017
$
(3,109,935)
3,109,935
(2,544,166)
2, 544,166
Credit risk represents the loss that would be recognised if counterparties fail to perform as contracted.
Part of the Group's receivables balances are represented by VAT input tax credits and deposits held in trust in respect of
leases for office premises.
With respect to credit risk arising from the financial assets of the Group, which comprise cash and cash equivalents and trade
receivables, the Group’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the
carrying amount of these instruments.
There are no significant concentrations of credit risk within the Group.
Liquidity Risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through use of bank overdrafts,
promissory notes, finance leases and hire purchase contracts.
41
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
3
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
The contractual maturities of the Group’s financial assets and liabilities are shown in the table below. Undiscounted cash flows
for the respective years are presented. This excludes cash and cash equivalents and current trade and other receivables.
Financial Assets
Within one year
After one year but not more than five years
More than five years
Financial Liabilities
Within one year
After one year but not more than two years
More than two years
Net Exposure
Consolidated
2018
$
-
-
410,210
410,210
2017
$
-
-
396,635
396,635
(1,734,647)
(76,713,147)
-
(78,447,794)
(877,363)
-
(51,672,210)
(52,549,573)
(78,037,584)
(52,152,938)
Management and the Board monitor the Group’s liquidity on the basis of expected cash flow. The information that is prepared
by senior management and reviewed by the Board includes monthly and annual cash flow budgets.
Fair value
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level 1 – the fair value is calculated using quoted prices in active markets.
Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
All of the Group’s financial liabilities are carried at amortised cost, with the carrying value approximating the fair value.
42
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
4.
GENERAL AND ADMINISTRATIVE EXPENSES
Administration and compliance expenses
1,198164
1,663,575
Consolidated
2018
$
2017
$
Employee benefits
Superannuation
Consulting fees
Depreciation and amortisation expenses (1)
Directors Fees
Legal fees
Occupancy expenses
Total expenses
361,148
40,000
484,928
2,529
190,611
38,599
107,448
394,386
40,000
374,067
87,929
225,921
3,869
175,463
2,423,427
2,965,210
From February 2015 payment of director fees have been deferred until such time that at least US$5,000,000 in new equity is
raised or alternatively the Group sells the Block 31 licence and receives the funds associated with that sale.
(1) Depreciation and amortisation expenses associated with Kazakhstan operations are recorded in Cost of Sales rather
than General and administration expenses for the year ended 30 June 2018 following a return to production.
5.
TAXATION
Prima facie income tax on operating (loss) is reconciled to the income tax benefit provided in the financial statements as
follows:
Prima facie income tax benefit on operating (loss) at the Australian tax rate of
27.5% (2017: 30%)
Non-deductible expenditure:
- Effect of tax rates in foreign jurisdictions
-
Interest expense
Temporary differences and tax losses not bought to account as a deferred tax
asset
Income tax expense
Consolidated
2018
$
(2,756,524)
2017
$
(2,423,057)
(29,229)
1,868,649
917,104
-
(149,406)
1,994,301
578,162
-
43
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
5.
TAXATION (continued)
Deferred Income Tax
Deferred income tax at 30 June relates to the following:
Consolidated
Deferred tax liabilities
Deferred tax assets
Unrealised FX (gain) / loss
Exploration and Evaluation Assets
Revenue tax losses – Australia
Deferred tax assets not recognized
Deferred tax (income)/expense
Net deferred tax recognised in Balance Sheet
-
-
-
-
(375,314)
1,213,256
570,526
1,213,803
8,534,164
8,867,767
(9,372,106)
(10,652,096)
-
-
-
-
The Consolidated Group has tax losses of $31,033,324 (2017:$ 29,622,628) that are available indefinitely for offset against
future taxable profits of the companies in which the losses arose.
The potential deferred tax asset will only be realised if:
(a) The relevant Group derives future assessable income of a nature and an amount sufficient to enable the asset to be
realised, or the asset can be utilised by another Group in the consolidated entity in accordance with Division 170 of
the Income Tax Assessment Act 1997;
(b) The relevant Group and/or consolidated entity continues to comply with the conditions for deductibility imposed by the
Law; and
(c) No changes in tax legislation adversely affect the relevant Group and/or consolidated entity in realising the asset.
6.
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Consolidated
2018
$
408,241
408,241
2017
$
397,109
397,109
The bank accounts are at call and pay interest at a weighted average interest rate of 0.04% at 30 June 2018 (2017: 0.04%)
44
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
7.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Other debtors
Non-current
VAT receivable
Consolidated
2018
$
23,743
140,624
164,367
2017
$
-
145,139
145,139
2,599,429
2,845,507
The Group’s exposure to credit and currency risks is disclosed in Note 3. All of the non-current other debtor balance is VAT
receivable which will be offset against future taxes payable on oil revenue.
At 30 June 2018, the aging analysis of receivables is as follows:
2018
2017
Total
2,763,796
2,990,506
0 – 30
Days
164,367
145,139
31 – 60
days
61 - 90
days
-
-
-
-
90+
days
2,599,429
2,845,367
There are no receivables as at 30 June 2018 that are impaired (2017: nil)
8.
OTHER CURRENT ASSETS
Prepayment
Other
9.
INVENTORIES
Raw materials
Consolidated
2018
$
102,329
46,616
148,945
2017
$
16,489
-
16,489
43,968
43,968
18,352
18,352
45
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
10.
OIL AND GAS PROPERTIES
Oil and Gas Properties carried forward:
Oil and gas properties at cost
Depletion and impairment
Net Carrying Value
Movements during the year
Balance at beginning of year
Net exchange differences
Transfers from exploration and evaluation assets
Depletion Charge for the year
Balance at end of year
Consolidated
2018
$
19,113,153
(1,884,915)
17,228,238
15,112,180
(233,206)
2,453,341
(104,077)
2017
$
16,941,069
(1,828,889)
15,112,180
14,976,550
135,630
-
-
17,228,238
15,112,180
46
For personal use only
Consolidated
$
338,386
10,289
432,615
(4,077)
(171,580)
(41,180)
564,453
1,655,767
(1,091,314)
564,453
417,142
6,201
(3,233)
(87,929)
6,205
338,386
2,058,062
(1,719,676)
338,386
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
11.
PLANT AND EQUIPMENT
Year ended 30 June 2018
At 1 July 2017 net of accumulated depreciation
Additions
Transfers from exploration and evaluation assets
Disposals
Depreciation charge for the year
Net exchange differences
At 30 June 2018 net of accumulated depreciation
At 30 June 2018
Cost
Accumulated depreciation
Net carrying amount
At 1 July 2016 net of accumulated depreciation
Additions
Disposals
Depreciation charge for the year
Net exchange differences
At 30 June 2017 net of accumulated depreciation
At 30 June 2017
Cost
Accumulated depreciation
Net carrying amount
47
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
12.
EXPLORATION AND EVALUATION EXPENDITURE
Exploration expenditure carried forward:
Exploration and evaluation expenditure at cost
Movements during the year
Balance at beginning of year
Expenditure incurred during the year
Transferred to Oil and Gas Properties
Transferred to Property Plant and Equipment
Foreign exchange translation
Balance at end of year
Consolidated
2018
$
2017
$
28,614,808
29,930,249
29,930,249
1,908,594
(2,453,341)
(432,615)
(338,079)
28,614,808
28,215,402
1,099,755
-
-
615,092
29,930,249
Oil sales revenue capitalised into exploration and evaluation expenditure for the current and prior year was $nil.
13.
OTHER FINANCIAL ASSETS
Liquidation fund
410,210
410,210
396,635
396,635
The Group has a deposit for the purpose of a Liquidation fund in the amount of $410,210. The deposit is to be used for land
restoration when required. Under the laws of Kazakhstan, the deposit must be replenished in the amount of 1% of the annual
investments. The fair value approximates the carrying value.
14.
TRADE AND OTHER PAYABLES
Trade creditors
Accrued expenses
Trade payables are non-interest-bearing and are normally settled on 30-day terms.
1,193,464
541,183
1,734,647
451,161
426,198
877,359
48
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
15.
DEFERRED REVENUE
Deferred Revenue
Consolidated
2018
$
2017
$
41,629
-
The deferred revenue refers to amounts received in advance for oil sales. As at 30 June 2018, there is 125 tonnes of oil to be
delivered under the contract.
16.
PROVISIONS
Non – current
Provision for rehabilitation
244,258
244,258
234,680
234,680
The Group accrues provisions for the forthcoming costs of rehabilitation of the territory. On the basis of forecasts the cost of
rehabilitation of the oilfield would be $244,258 (2017: $234,680). The timing of rehabilitation is likely to depend on when the
field ceases to produce at economically viable rates which is currently estimated to be 2044 (2016: 2044). This will depend
upon future oil and gas prices, which are inherently uncertain. The underlying rehabilitation costs are denominated in Tenge
and in calculating the provision at 30 June 2018 a discount rate of 8.55% (2017: 8.58%) was used.
Movements in rehabilitation provision
Carrying amount at beginning of the year
Unwinding of discount rate
Foreign exchange translation
Re-measurement for changes in estimates1
Carrying amount at the end of year
2018
$
234,680
9,681
(6,059)
5,956
244,258
2017
$
154,442
8,803
2,408
69,027
234,680
1Due to a change in the discount rate and the expected timing of when the rehabilitation activities will be undertaken.
49
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
17.
OTHER FINANCIAL LIABILITIES
Non-Current
Promissory notes (unsecured) - Opening Balance
Drawdowns during the financial year
Interest accrued
Impact of foreign exchange
Promissory Notes (Unsecured) - Closing balance
Promissory Notes
Consolidated
2018
$
51,672,210
1,773,172
6,785,450
2,279,598
62,510,430
2017
$
42,936,226
3,626,893
6,647,669
(1,538,578)
51,672,210
During the year, the Group was granted a range of approvals that positioned it to return to domestic production. As a result,
major shareholder and debtholder Waterford Petroleum Limited (“Waterford”) and debt holder Midocean Holdings Limited
(“Midocean”) (together “the Lenders”) agreed to provide up to a total of a further US$5,000,000 (including accrued interest), in
the amounts of up to US$4,900,000 and US$100,000, respectively under a new Funding Agreement signed on 28 July 2017
(the “2017 Funding Agreement”).
The 2017 Funding Agreement is similar to the 2016 Funding Agreement with the addition of one new condition. This condition
relates to the payment of a bonus to the Lenders should all or part of the permit area be sold during the term of the 2017
Funding Agreement.
The key terms of the 2017 Funding Agreement are:
Unsecured
Effective 31 July 2017
Repayable on 31 July 2019 (or such later date agreed by the parties in writing) (the “Repayment Date”)
Lenders can elect to be repaid if there is a change of control in Jupiter Energy Limited or Jupiter Energy Pte Ltd or
Interest rate of 15% pa
Interest will accrue and be repayable with principal
there is a change in control in contract 2275 covering the Block 31 Licence
Bonus will be payable to the Lenders equivalent to 5% of the sale price of contract 2275 in the event that the
contract is assigned, transferred or sold to a 3rd party during the period of the facility. No Liability has been
recognized, as no sale agreement has been entered into. Interest rate of 15% pa
As at 30 June 2018, the Company had drawn down $US 1,506,771 ($A 2,038,656) (including accrued interest) under the 2017
$US 5,000,000 ($A 6,750,000) Funding Agreement with Waterford. This meant a further $US 3,493,229 ($A 4,726,327) was still
available under this funding agreement as at 30 June 2018.
In addition, the Group has access to a further $US 668,517 (A$ 903,148) under the 2016 Funding agreement. During the year,
all 2016 Funding agreement promissory note holders agreed to extend the repayment date on their notes from 1 July 2018 to 1
July 2020.
50
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
17.
OTHER FINANCIAL LIABILITIES (continued)
The key terms of the 2016 Funding Agreement are:
Unsecured
Effective 24 May 2016
Drawdowns will roll into a Promissory Note
Promissory Note is repayable on 1 July 2020
Lender can elect to be repaid if there is a change of control in Jupiter Energy Limited or Jupiter Energy Pte Ltd or
Interest rate of 15% pa
Interest will accrue and be repayable with principal
there is a change in control in contract 2275 covering the Block 31 Licence
There are no covenants associated with the Promissory notes to which the Group would have to comply.
18.
CONTRIBUTED EQUITY
Shares issued and fully paid
Ordinary shares (a)
(a) Movements in ordinary share capital:
Balance 30 June 2017
Balance 30 June 2018
Capital risk management
Consolidated
2018
$
2017
$
85,633,935
85,633,935
85,633,935
85,633,935
Number
2018
Number
2017
153,377,693
153,377,693
153,377,693
153,377,693
When managing capital, management’s objective is to ensure the entity continues as a going concern as well as to maintain
optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure
that ensures the lowest cost of capital available to the entity.
In order to maintain or adjust the capital structure, the entity may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares, enter into joint ventures or sell assets.
The entity does not have a defined share buy-back plan.
No dividends were paid in 2017 and none are expected to be paid in 2018.
The Group is not subject to any externally imposed capital requirements.
51
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
19.
RESERVES
At 30 June 2016
Share based payment
Foreign currency translation
At 30 June 2017
Share based payment
Foreign currency translation
At 30 June 2018
Foreign currency
translation
reserve
$
(26,303,650)
-
781,407
(25,522,243)
-
(740,377)
CONSOLIDATED
Share based
payments reserve
$
5,764,014
-
-
5,764,014
-
-
Total
$
(20,539,636)
-
781,407
(19,758,229)
-
(740,377)
(26,262,620)
5,764,014
(20,498,606)
Nature and purpose of reserves
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
Share based payments reserve
The share based payments plan reserve is used to record the value of equity benefits provided to eligible employees as
part of their remuneration. There have been no share based payments during the year ended 30 June 2018 (2017: none).
20.
KEY MANAGEMENT PERSONNEL AND RELATED PARTY DISCLOSURE
This note is to be read in conjunction with the Remuneration Report, which is included in the Directors Report on pages 13
to 21.
(a) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Other
Share-based payments
Consolidated
2018
$
710,201
40,000
-
-
2017
$
678,176
40,000
142,972
-
750,201
861,148
52
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
20.
KEY MANAGEMENT PERSONNEL AND RELATED PARTY DISCLOSURE (continued)
(b) Transactions between the Group and other related parties
Consultancy fees
During the year, consulting fees of $258,414 (2017: $222,084) were accrued and paid under normal terms and conditions to
Meridian Petroleum LLP, of which Mr. Kuandykov is a director, for the provision of geological services at normal commercial
rates.
During the year, consulting fees of $32,202 (2017: $Nil) were accrued and paid under normal terms and conditions to Grange
Consulting of which Mr Warren is a director.
As at 30 June 2018, the total deferred fees owing to each related party are as follows:
Geoff Gander
Baltabek Kuandykov
Alexey Kruzhkov
Alexander Kuzev
137,377
186,511
105,115
39,115
21.
COMMITMENTS FOR EXPENDITURE
Exploration Work Program Commitments
The Group has entered into a subsoil utilisation rights for petroleum exploration and extraction in Areas 1 and 2 in Mangistau
Oblast in accordance with Contract No. 2272 dated 29 December 2006 with the Ministry of Energy and Mineral Resources of the
Republic of Kazakhstan.
Exploration work program commitments contracted for (but not capitalised in the accounts) that are payable:
- not later than one year
- later than one year but not later than five years
2018
$
2017
$
-
-
-
-
-
-
53
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
22.
AUDITORS REMUNERATION
The auditor of Jupiter Energy Limited is Ernst & Young.
Amounts received or due and receivable by Ernst & Young (Australia) for:
-
auditing or reviewing the financial report
Amounts received or due and receivable by Ernst & Young (Kazakhstan) for:
-
auditing or reviewing the financial report
Amounts received or due and receivable by Ernst & Young (Singapore) for:
-
auditing or reviewing the financial report
84,618
84,618
27,000
27,000
11,500
11,500
83,000
83,000
27,400
27,400
11,500
11,500
Total paid to Ernst & Young
123,118
121,900
23.
EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share are calculated by dividing the profit / (loss) attributable to equity holders of the Group by the weighted
average number of ordinary shares outstanding during the period.
The following reflects the income and data used in the basic and diluted earnings per share computations:
Net loss attributable to ordinary equity holders of the
Parent from continuing operations
Weighted average number of ordinary shares for basic
and diluted earnings per share
Consolidated
2018
(10,023,725)
2017
(8,076,857)
Number of
shares
Number of
shares
153,377,693
153,377,693
There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and
the date of authorisation of these financial statements.
54
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
24.
SEGMENT REPORTING
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are used by the chief operating decision
makers in assessing performance and determining the allocation of resources.
The Group has identified that it has one operating segment being related to the activities in Kazakhstan, on the basis that the
operations in Australia relate to running the Corporate Head Office only.
All significant Oil and Gas and Exploration and evaluation expenditure are domiciled in Kazakhstan.
Accounting policies and inter-segment transactions
The accounting policies used by the Group in reporting segments internally are the same as those contained in Note 1 to the
accounts.
Interest revenue is derived in Australia. Non-current assets relate to capitalised exploration and evaluation expenditure and oil
and gas properties located in Kazakhstan.
25.
STATEMENT OF CASHFLOWS RECONCILIATION
(a) Reconciliation of operating (loss) after income tax to net cash (used in) operating activities
Operating (loss) after income tax:
Add/(less) non-cash items:
Depreciation / Depletion
Finance costs
Effect of foreign exchange translation
Changes in assets and liabilities:
Decrease (increase) in receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase in payables
Increase in deferred revenue
Increase in Provisions
Net cash flows from operating activities
Consolidated
2018
$
2017
$
(10,023,725)
(8,076,857)
275,657
6,785,450
2,279,598
226,850
(25,616)
(132,456)
737,981
41,629
9,637
175,005
2,529
6,647,669
(1,445,303)
(179,215)
(468)
50,971
122,227
0
80,238
(2,798,209)
For the purposes of the cash flow statement, cash includes cash on hand, at banks, and money market investments readily
convertible to cash on hand, net of outstanding bank overdrafts.
55
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
26.
EVENTS OCCURING AFTER THE BALANCE SHEET DATE
There have been no significant events occurring subsequent to 30 June 2018.
27.
INFORMATION ON PARENT ENTITY
Information relating to Jupiter Energy Limited:
(a)
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Retained earnings
Share based payment reserve
Total shareholders’ deficit
Profit or (loss) of the parent entity
Total comprehensive income / (loss) of the parent entity
Name of Entity
Jupiter Energy (Victoria) Pty Ltd
Jupiter Biofuels Pty Ltd
Jupiter Energy (Kazakhstan) Pty Ltd
Jupiter Energy Pte Ltd
Jupiter Energy (Services) Pte Ltd
Country of
incorporation
Australia
Australia
Australia
Singapore
Singapore
2018
$
49,284,269
49,291,614
(831,802)
(63,342,233)
85,633,935
(94,982,156)
5,764,014
(14,050,619)
(10,466,412)
(10,764,102)
2017
$
357,427
48,613,559
(525,556)
(52,197,766)
85,633,935
(94,982,152)
5,764,014
(3,584,203)
(7,831,450)
(7,295,450)
Equity Holding
2018
%
100
100
100
100
100
2017
%
100
100
100
100
100
(b) Details of any guarantees entered into by the parent entity in relation to the debts of its subsidiaries
There are no guarantees entered into by the parent entity.
(c) Details of any contingent liabilities of the parent entity
There are no contingent liabilities of the parent entity as at reporting date.
(d) Details of any contractual commitments by the parent entity
There are no contractual commitments by the parent entity
28.
CONTINGENT LIABILITIES
The Group has no contingent liabilities as at 30 June 2018 (30 June 2017: Nil)
56
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Directors’ Declaration
In accordance with a resolution of the directors of Jupiter Energy Limited, I state that:
1
In the opinion of the directors:
(a)
the financial statements and notes of Jupiter Energy Limited for the financial year ended 30 June 2018 are in
accordance with the Corporations Act 2001, including:
(i) Giving a true and fair view of its financial position as at 30 June 2018 and performance for the year
ended on that date.
(ii) Complying with Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001
The financial statements and notes also comply with International Financial Reporting Standards, as disclosed
in note 2(b)
Subject to the matter set out in Note 2(a) there are reasonable grounds to believe that the Group will be able
to pay its debts as and when they become due and payable.
(b)
(c)
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
3
On behalf of the Board
Geoff Gander
Executive Chairman
Perth, Western Australia
28 September 2018
57
For personal use only
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Jupiter Energy Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Jupiter Energy Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2018, the consolidated statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, notes to the financial statements,
including a summary of significant accounting policies, and the director’s declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2018
and of its consolidated financial performance for the year ended on that date; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the
Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(d) of the financial report, which describes the principal conditions that raise
doubt about the Group’s ability to continue as a going concern. These events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. In addition to the matter described in the Material uncertainty related to going
concern section of our report, we have determined the matter described below to be the key audit matter
to be communicated in our report. Our description of how our audit addressed the matter is provided in
that context.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:DA:JUPITER:032
For personal use only
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters, provide the basis for our audit opinion on the accompanying financial
report.
1. Carrying value of non-current assets
Why significant
How our audit addressed the key audit matter
At 30 June 2018, the Group had non-current assets
comprising its oil and gas properties of $17,228,238,
property, plant and equipment of $564,453 and
capitalised exploration and evaluation expenditure of
$28,614,808. These non-current assets are
considered one cash-generating unit (“CGU”) for
impairment testing purposes.
Australian Accounting Standards require the Group to
assess, throughout the reporting period, whether there
is any indication that an asset may be impaired. If any
such indication exists, the Group is required to
estimate the recoverable amount of the assets.
The Group has performed an impairment indicator
assessment, concluding no indicators of impairment
exist at 30 June 2018.
The Group operates in an industry with exposure to
fluctuations in commodity prices, foreign exchange
values and geological estimation of reserves, impacting
the Group’s revenues and operating cash flows.
Impairment assessments involve forecasts in these
areas, which are highly judgmental. Accordingly, this
was considered a key audit matter.
Disclosure regarding this matter can be found in Notes
10, 11 and 12 of the financial report.
We evaluated the Groups' assessment as to whether
there were indicators of impairment.
Ernst & Young Kazakhstan conducted audit procedures
over the operations in Kazakhstan. Jointly, our audit
procedures included the following:
► Assessed the Group’s consideration of potential
impairment triggers including forward commodity
price assumptions and current and historical
operational performance
► Considered the Group’s right to tenure in the
relevant producing and exploration areas, which
included obtaining and assessing supporting
documentation such as license agreements
► Considered the recoverability of the Group’s oil and
gas reserves and resources by agreeing to the
Group’s reserves and resource estimates to third
party reports and current year production. We also
assessed the qualification, competence and
objectivity of the third party expert used by the
Group
► Read the Group’s operational reports, minutes of
directors meeting and market announcements for
any indicators of impairment
► Discussed with operational management the
performance of the underlying assets and any
indications of underperformance, obsolescence,
significant future capital requirements or physical
damage to the assets
► Considered the relationship between the assets
carrying and the Group’s market capitalisation
► Considered the carrying value of the assets against
recent comparable transactions (expressed as a
dollar amount per barrel of oil reserve and
resource).
We also considered the adequacy of disclosure in Notes
10, 11 and 12 of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:DA:JUPITER:032
For personal use only
2. Promissory note facilities
Why significant
How our audit addressed the key audit matter
At 30 June 2018, as disclosed in Note 16, the Group
had a financial liability of $62,510,430 comprised of a
number of promissory note facilities.
The promissory notes are denominated in US dollars
and are converted to the Company’s functional
currency of Australian dollars at period end. Any
changes in the Australian dollar balance, due to
movements in the foreign exchange rates, is
recognised in the profit and loss as a foreign currency
gain or loss.
During the year the Group continued to draw down on
the available promissory note facilities to fund
operations and some terms, including repayment
deadlines were amended.
Accordingly, due to the significance of the balance, the
classification and measurement of promissory notes
was considered to be a key audit matter.
We evaluated the appropriateness of the measurement
and classification of amounts outstanding on the
Group’s promissory note facilities. Our audit
procedures included the following:
► Considered the changes to the terms and conditions
of each promissory note during the year and the
impact of the reported balances at year end and the
compliance with the requirements of Australian
Accounting Standards
► Assessed the measurement of foreign currency
gains or losses on promissory note balances
► Confirmed outstanding balances with the Issuer of
the promissory note facilities
► Considered whether the Group had the
unconditional right to defer repayment of the
promissory note facilities by more than 12 months
as at 30 June 2018
► We also considered the adequacy of disclosure in
Note 16 of the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s Annual Report for the year ended 30 June 2018, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:DA:JUPITER:032
For personal use only
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:DA:JUPITER:032
For personal use only
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on the audit of the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 9 to 14 of the directors' report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of Jupiter Energy Limited for the year ended 30 June 2018,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Ernst & Young
Darryn Hall
Partner
Perth
28 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
DH:DA:JUPITER:032
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
ASX OTHER INFORMATION
Additional information required by the ASX Listing Rules and not disclosed elsewhere in this Annual Report is as
follows.
1. Number of holders and voting rights of each class of securities
As at 19 September 2018 the Company has only one class of securities being fully paid ordinary shares
as outlined below.
Equity Class
Number of Holders
Total on issue
Fully paid ordinary shares (Shares)
1,351
153,377,693
All Shares carry one vote per Share. Each Shareholder is entitled to receive notice of and attend and vote at
general meetings of the Group. At a general meeting, every Shareholder present in person or by proxy,
representative or attorney will have one vote on a show of hands and on a poll, one vote for each share held.
2. Substantial Shareholders
Substantial Holder
Waterford Petroleum Limited
Arrow Business Limited
Central Asian Oil Holdings Ltd
3. Distribution of Shares as at 30 August 2018
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Total
Total holders
427
492
192
222
25
1,358
Number of Shares
% Total Shares
45,246,108
32,227,908
29,731,484
Units
161,188
1,290,611
1,408,794
6,028,967
144,488,133
153,377,693
29.5%
21.0%
19.4%
% of Issued Capital
0.11%
0.84%
0.92%
3.93%
94.20%
100.00%
There were 1,128 holders with less than a marketable parcel of Shares based on the closing share price of $0.044
per Share on 31 August 2018.
4. On-market buy back
There is no current on-market buy back program for the Company’s Shares and no Shares were purchased on-
market during the financial period.
5. Restricted Securities
There are no restricted securities or securities subject to voluntary escrow on issue.
60
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
ASX OTHER INFORMATION
6. Top 20 Shareholders as at 30 August 2018
Rank Name
Shares
% of Total
Shares
1.
2.
3.
4.
5.
6.
7.
8.
9.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
FISKE NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
GLENNBROWN PTY LTD
SECURE NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
10. MR GEOFFREY ANTHONY GANDER
11. MR ATHOL GEOFFREY JAMES
12.
GOLDEN BOUNTY LIMITED
13. MR JOHN NORMAN ACKLAND
14.
MR WARREN GILMOUR + MRS CATHERINE GILMOUR
15.
P H NOMINEES LIMITED
16. MR SCOTT MISON
17.
SOUTHAM INVESTMENTS 2003 PTY LTD
18. MR IAN SHERWOOD LOVE + MRS ANNE MARGARET LOVE
19.
DALY SF PTY LTD
20. WILLOWOOD CORPORATE NOMINEES
50,611,526
45,505,678
32,718,857
4,774,720
1,798,334
1,610,357
1,590,365
999,999
777,779
769,445
608,148
506,450
320,000
282,753
250,001
207,038
179,511
166,667
146,668
142,223
33.00
29.67
21.33
3.11
1.17
1.05
1.04
0.65
0.51
0.50
0.40
0.33
0.21
0.18
0.16
0.13
0.12
0.11
0.10
0.09
TOTAL
143,966,519
93.86
61
For personal use only
JUPITER ENERGY LIMITED – 2018 ANNUAL REPORT
CORPORATE GOVERNANCE POLICIES
In accordance with ASX Listing Rule 4.10.3 the Company’s corporate governance statement can be found at the following URL:
http://www.jupiterenergy.com.au/files/files/747_Corporate_Governance_Statement_-
Jupiter_30_June_2018.pdf
The Board of Directors is responsible for the corporate governance of the Company. The Board guides and monitors the business
and affairs of the Company on behalf of Shareholders by whom they are elected and to whom they are accountable.
This statement outlines the main corporate governance practices in place throughout the financial year, which comply with the
ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations with 2014 Amendments 3rd
edition unless otherwise stated.
62
For personal use only