.
.
OCTANEX LIMITED
ABN 61 005 632 315
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2020
.
OCTANEX LIMITED
ABN 61 005 632 315
CORPORATE DIRECTORY
CONTENTS
Corporate Directory……………………..…2
Chairman’s Letter………………………….3
Operations Report…………...…………......4
Auditor’s Independence Declaration……....7
Directors’ Report…………………………...8
Corporate Governance .................................. 10
Remuneration Report ................................... 12
Directors’ Declaration .................................. 14
Audit Report ................................................. 15
Statement of Profit or Loss and Other
Comprehensive Income ................................ 18
Statement of Financial Position .................... 19
Statement of Changes in Equity ................... 20
Statement of Cash Flows .............................. 22
Notes to the Financial Statements ................ 23
Shareholder Information…………….…..…48
Directors
Mr Geoffrey Albers
Chairman & Chief Executive Officer
Ms Raewyn Clark
Executive Director
Datuk Kevin Kow How
Non-Executive Director
Mr James Willis
Independent Non-Executive Director
Company Secretary
Mr Robert Wright
Registered Office
108 Marlborough Street, Bentleigh East
Victoria, 3165, Australia
Telephone:
Facsimile:
E-mail:
+61 (03) 8610 4702
+61 (03) 8610 4799
admin@octanex.com.au
Auditor
Grant Thornton Audit Pty Ltd
Collins Square, Tower 5
727 Collins Street
Melbourne, Victoria 3008 Australia
Website:
www.octanex.com.au
Share Registry
Automic Pty Ltd
Level 3, 50 Holt Street
Surry Hills, NSW 2010, Australia
Telephone: 1300 288 664 (within Australia)
Telephone: +61 (2) 9698 5414 (outside Australia)
Website: www.automic.com.au
Stock Exchange
ASX Limited
Level 4, North Tower, Rialto
525 Collins Street
Melbourne, Victoria 3000 Australia
ASX Code: OXX
Incorporated in Victoria on 13 March 1980
Octanex Annual Report - Page | 2
OCTANEX LIMITED
ABN 61 005 632 315
Chairman’s Letter
Octanex has expanded its resource exploration strategy to include those metals and rare earth elements vital
to support the emergence of non-hydrocarbon energy sources, as well as to include precious metals. We are
entering a decarbonising world where strategic metals will play a huge part in transportation as well as
electricity generation and storage.
As a result, we have taken a decisive step with the application for a number of tenements in the Sefton region
of the Eastern Goldfields of Western Australia. Octanex’s Sefton Project comprises exploration licence
applications in an isolated and little-explored area with high-grade metamorphic granite and granite gneiss
terrane with small greenstone belts and enclaves. It is surrounded on three sides by emerging world class
gold camps. The project area is considered prospective for gold and nickel.
Octanex continued evaluation activities in relation to our 100% interest in the Ascalon gas field offshore
Western Australia, held via the exploration permit WA-407-P.
I extend my thanks to our staff and contractors. I thank my co-directors and shareholders for their ongoing
support of Octanex.
E.G.Albers
Chairman
16 October 2020
Octanex Annual Report - Page | 3
OCTANEX LIMITED
ABN 61 005 632 315
Operational Review
Assets and Activities Overview
Sefton Gold Project, Eastern Goldfields Superterrane
During the year Octanex expanded its strategy to include the objective of developing green-fields gold
exploration projects.
Octanex’s Sefton Gold Project comprises exploration licence applications in the largely unexplored Sefton
Lineament within the Burtville Terrane of the Eastern Goldfields Superterrane in Western Australia (Figure 1).
Figure 1 Sefton Project Applications (shown in blue)
Previous exploration in the application areas is limited and on-ground activity has consisted largely of part-
coverage geochemical surveys with little or no drilling. In some cases, significant soil anomalies from
historical work by past explorers have not been drill tested. Work undertaken by the Geoscience Australia and
Geological Survey of Western Australia in recent years provides Octanex with access to a large database that
includes full coverage aeromagnetic data; relatively recent geological mapping; gravity, seismic and
geochronology datasets and, in some cases, geochemical data.
Octanex’s Sefton Project area is an isolated and little-explored high-grade metamorphic granite and granite
gneiss terrane surrounded on three sides by emerging world class gold camps (refer Figure 2).
World class gold mines and deposits in the neighbouring regions include Sunrise Dam (10 Moz Au),
Wallaby (8 Moz Au) and Granny Smith (2.5 Moz Au) and a suite of other nearby deposits (with a combined
resources of 25 Moz Au) are present to the east in the Laverton greenstone belt. The 6 Moz granitoid-hosted
Gruyere deposit is located in the Dorothy Hills Belt (Yamarna greenstone belt) to the east, whilst the 7.5
Moz granite gneiss-hosted Tropicana deposit is located in the Albany-Fraser Province to the southeast.
Octanex Annual Report - Page | 4
OCTANEX LIMITED
ABN 61 005 632 315
Figure 2 Regional tectonic framework of the Burtville Terrane and its major resource projects
Octanex’s near-term objective is to identify priority structural targets for early drill and geochemical
evaluation. Although focussing principally on high calibre targets that could present opportunities for the
discovery of world class gold resources quickly and cheaply, the Company’s structural focus also creates
opportunity to synchronously locate shear-associated intrusions that could have potential for other commodity
elements including rare earth metals, niobium and tantalum.
Octanex completed geological reconnaissance in the region of the Sefton Project Area which has provided it
with greater understanding of the regolith and underlying Archean bedrock. The regolith is dominated by a
veneer of transported sands with lesser residual soils associated with silcrete-capped laterite breakaways.
Silcrete capping the laterite breakaways appears to be silicified soils of Tertiary age. Previously mapped
“Permian” sediments, capping a number of laterite breakaways in the region, show evidence of being fluvial
deposits younger than the underlying Tertiary saprolite and older than the overlying silcrete caprock.
Archean bedrock outcrop, largely confined to the laterite breakaways, consists mainly of deeply weathered
(saprolitic) granitoid and lesser fresh granitoids, granite gneiss and schistose (sheared) granitoid. Only one
outcrop of weathered mafic rock (dolerite or diorite of uncertain affinities) was identified. Evidence for
quartz veining is widespread with vein quartz covered scree plains evident in some areas of interpreted
regional faults/shears. The Sefton Lineament, one of the main targets, is under transported and residual soil
cover and its geology remains unknown.
Octanex Annual Report - Page | 5
OCTANEX LIMITED
ABN 61 005 632 315
Ascalon Gas, Bonaparte Basin
Octanex has a 100% interest in exploration permit WA-407-P which contains the Ascalon gas discovery. The
Ascalon accumulation has an aerial extent of 320 km2, a proven source/charge, trap, seal and a high
reservoir pressure (10,500 psi), which is 3,500 psi over normally pressured, but may be due to a much deeper
closing contour and greater gas in place.
Proximity to existing infrastructure and gas resources presents opportunities for the future development of
Ascalon options. Located in shallow water (68 m), wells can be drilled using a jack-up rig, while unmanned
wellhead platform development options indicate reduced CAPEX and OPEX potential.
Ascalon-1A, drilled in 1995 by Mobil, encountered 155m TVD1 gross section in the same Permian formation
as the Petrel and Tern Gas accumulations. However, approximately 60% of the shallower reservoir in
Ascalon-1A was not flow tested due to mechanical issues.
WA-407-P is in year 6 of its initial term, which commenced in February 2020 with the work program having
been
a
amended
program of geotechnical
studies designed to inform
a decision
to drill an
appraisal well.
to
Figure 3 Ascalon proximity to gas infrastructure
Year 6 of the initial term of WA-420-P, which was adjacent to WA-407-P, ended during the year. Taking
into account the relatively small proportion of the Ascalon accumulation located within the WA-420-P
tenement, the higher priority locations for an Ascalon appraisal well being situated in WA-407-P, and the
Commonwealth- Western Australia Joint Authority’s expectation that any renewal would include the drilling
of a well in the guaranteed term, Octanex decided not to apply to renew WA-420-P and the permit expired at
the end of year 6.
1 True Vertical Depth
Octanex Annual Report - Page | 6
Collins Square, Tower 5
727 Collins Street
Melbourne Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Octanex Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Octanex
Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
B L Taylor
Partner – Audit & Assurance
Melbourne, 29 September 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
OCTANEX LIMITED
ABN 61 005 632 315
Directors’ Report
Directors
Mr Geoff Albers LL.B, FAICD
Executive Chairman
Appointed 2 October 1984
Mr Albers has over thirty-five years oil and gas industry experience, having first became involved in oil
exploration in 1977. Mr Albers is a law graduate of the University of Melbourne and has had extensive
experience as a director and administrator in corporate law, petroleum exploration and resource sector
investment.
Mr Albers founded Octanex Limited and is a substantial shareholder in the company. He is also a director and
substantial shareholder in the ASX listed Peako Limited and Enegex Limited.
Ms Rae Clark
B.Bus(dist), CA, MAICD, AGIA, ACIS
Executive Director
Appointed 17 October 2014
Ms Clark has more than twenty years’ experience focussed primarily on the natural resource sector. She has
wide operational, commercial and project development knowledge and her experience includes business
development, financial modelling and analysis, capital raising and mergers and acquisitions, as well as
managing joint venture partners, government, regulator and investor relations.
Ms Clark was previously Commercial Manager of Octanex. Having commenced her career with Deloitte in
1997, Ms Clark has worked with oil and gas companies since 2005. She is also a Director of Peako Limited
and Enegex Limited.
Ms Clark holds a Bachelor of Business (with distinction), a Graduate Diploma (ICAA) and Graduate
Diploma in Applied Corporate Governance.
Datuk Kevin Kow How FCA
Non-Executive director
Appointed 18 December 2014
Datuk Kevin Kow How is a director of Sabah Development Bank. He is a member of the Malaysian Institute
of Accountants, the Malaysian Institute of Certified Public Accountants and a fellow member of the Institute of
Singapore Chartered Accountants and the Institute of Chartered Accountants in England & Wales. He was
made a partner of Ernst & Young (“EY”), Malaysia in 1984 and served as the partner-in-charge of EY’s offices
in Sabah and Sarawak. Later, from 1996 onwards, he was the partner-in-charge of EY’s practice in Sabah and
Labuan until his retirement at the end of 2003. He also serves as a Director of Cahya Mata Sarawak Berhad,
K&N Kenanga Holdings Berhad, Kenanga Investment Bank Berhad, Saham Sabah Berhad, Sarawak Cable
Berhad, M3nergy Berhad and several private limited companies.
Mr James Willis LL.M (Hons), Dip Acc
Independent Non-Executive Director
Appointed 18 August 2009
Previously an executive director of Octanex (2009-2011) Mr Willis is an upstream petroleum consultant who
has held governance positions with and consulted to various participants in the oil and gas exploration sector.
Mr Willis is a former partner in the leading New Zealand law firm of Bell Gully where his practice speciality
was in the upstream oil and gas area, particularly relating to issues concerning gas contracting and the
development of oil and gas reserves, joint ventures and upstream petroleum related acquisitions.
Octanex Annual Report - Page | 8
OCTANEX LIMITED
ABN 61 005 632 315
Mr Willis is a director of New Zealand Energy Corp, a company with New Zealand operations and listed on the
TSX Venture exchange.
Company Secretary
Mr Robert Wright B Bus, CPA
Mr Wright is a senior financial professional with over 30 years commercial experience in the resource,
energy and manufacturing industries gained at various companies and locations, including 14 years at BHP.
He is the Chief Financial Officer (CFO) and the Company Secretary of Octanex and CFO and company
secretary of the listed companies, Enegex Limited and Peako Limited. Mr Wright is a member of CPA
Australia.
Principal Activities
The principal activities of the consolidated entity during the year were exploration and development and
investment in the natural resources sector.
Financial Results
The net loss of the consolidated entity for the financial year was $5,264,733 (2019: loss of $4,264,324).
Dividends
No dividend was declared or paid during the year and to the date of this report.
Review of Operations
A review of the consolidated entity’s Operations during the financial year is provided in the Operational
Review.
Surrendered and expired interests
On 12 February 2020 WA-420-P expired.
Change in State of Affairs
Other than as described in these annual financial statements there have been no changes in the state of affairs
of the company.
Subsequent Events
In July 2020 Octanex made application for a further four exploration licence applications following geological
reconnaissance of its Sefton Gold Project. The area covered by the additional allocations largely overlaps
Octanex’ existing exploration licence application, with the new application boundaries providing logistical and
administrative advantages.
Future Developments
Future developments in the company’s operations and the expected result from those operations are
dependent on exploration and development success in the permit areas in which the group holds interests.
Directors’ Meetings
There were no formal board and committee meetings held during the year. All matters that required formal
Board resolutions were dealt with via written circular resolutions. The directors met and corresponded at
numerous times throughout the financial year to discuss the Group’s affairs. The board undertakes all audit
committee functions.
Octanex Annual Report - Page | 9
OCTANEX LIMITED
ABN 61 005 632 315
Share Capital
Ordinary Shares
The Company’s share capital consists of 242,823,840 ordinary fully paid shares (excluding 29,889,107
shares held by the Trustee of the Octanex Trustee Share Scheme).
Trustee Stock Scheme
As at 30 June 2020 and to the date of this report, 29,889,107 ordinary shares, previously issued to the Trustee
pursuant to the Scheme, remain unsold. The Trustee does not exercise voting rights in respect of the shares
held pursuant to the Scheme.
Unlisted Options
As at 30 June 2020 and to the date of this report, there are no options granted.
2020
2019
Unlisted Options
Balance at beginning of year 7,170,000 13,770,000
(7,170,000) (6,600,000)
Options expired
- 7,170,000
Balance at end of year
Indemnification of Directors and Officeholders
During the year and to the date of this report, the company did not pay premiums in respect of contracts
insuring officers or auditors of the company against liabilities arising from their position of officers or
auditor of the company.
The Company has entered into Deeds of Access and Indemnity with each of the Directors referred to in this
report who held office during the year indemnifying each against all liabilities incurred in their capacity as
directors of the Company to the full extent permitted by law.
Corporate Governance
The Board is responsible for the strategic
direction of the Company, the identification and implementation
of corporate policies and goals, and the monitoring of the business and affairs of the Company on behalf of
its shareholders.
The Board delegates responsibility for the day-to-day management of Octanex to the Chief Executive
Officer. All Directors have unrestricted access to Company records
and information and receive detailed
financial
and operational reports.
The Board is currently comprised of two Non- Executive Directors and two Executive Directors.
In accordance with the Company’s Constitution and the ASX Listing Rules, the Directors (other than the
Chief Executive Officer) are subject to re-election by shareholders every three years.
The Board meets regularly throughout the year. Where appropriate, presentations are given to the Board
from management who may be questioned directly by Board members on technical, operational and
commercial issues.
Details of the Company’s corporate governance practices are included in the Corporate Governance
statement found on the Company’s website.
Octanex Annual Report - Page | 10
OCTANEX LIMITED
ABN 61 005 632 315
Auditor independence and non–audit services
A copy of the auditor’s independence declaration, as required under Section 307C of the Corporations Act
2001, is attached and forms part of this Directors’ Report for the year ended 30 June 2020.
No fees were paid to the auditor for non-audit services.
This Directors’ Report is made in accordance with a resolution of the directors and forms part of the
financial statements.
On behalf of the Directors:
E.G. Albers
Director
29 September 2020
Octanex Annual Report - Page | 11
OCTANEX LIMITED
ABN 61 005 632 315
Remuneration Report
This Remuneration Report for the year ended 30 June 2020 outlines the key management personnel
remuneration arrangements of the Company in accordance with the requirements of the Corporations Act
2001 (Act) and its regulations. The disclosures in this Remuneration Report have been audited as required by
section 308(3C) of the Act.
Key Management Personnel
For the purpose of this report, Key Management Personnel (KMPs) of the Company are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities of the
Company directly or indirectly. The following have been identified as KMPs at 30 June 2020 for the purpose
of this Remuneration Report:
Executive Directors
EG Albers
RL Clark
Chairman & Chief Executive
Officer
Executive Director & Chief
Operating Officer
Non-executive Directors
JMD Willis
KK How
Director
Director
The board of directors is responsible for determining and reviewing compensation arrangements for the
directors and executives. The board assesses the appropriateness of the nature and amount of emoluments on
a periodic basis by reference to relevant employment market conditions, with the overall objective of
ensuring maximum stakeholder benefit from the retention of a high quality board and executives.
Remuneration levels for directors and executives of the company are competitively set to attract and retain
appropriately qualified and experienced directors and executives. The remuneration structures explained below
are designed to attract suitably qualified candidates, reward the achievement of strategic objectives and achieve
the broader outcome of creation of value for shareholders. The remuneration structure takes into account:
•
•
•
The capability and experience of the directors and executives;
The ability of directors and executives to control the entity’s performance; and
The requirement that directors apply a portion of their remuneration to the purchase of shares in the
company, at market price, so as to align the interests of directors with that of shareholders.
In accordance with the company’s constitution, directors’ non-executive remuneration was approved by
shareholders on 28 November 2014 at $250,000 per annum. During the year, non-executive director
remuneration of $nil was paid or payable (2019: $nil). Total director remuneration (exclusive of consulting
fees which are included at note 19) of $230,081 was paid and payable during the year (2019: $227,074).
Octanex Annual Report - Page | 12
OCTANEX LIMITED
ABN 61 005 632 315
There is no performance related remuneration for
directors. Remuneration paid to directors covers all
board activities, including serving on committees.
Apart from a retirement benefit for the chairman
and four weeks annual leave for RL Clark, the other
directors do not receive employee benefits such as
leave, but
long
annual
leave and
service
remuneration may include the grant of options over
shares of the company to align directors’ interests
with that of the shareholders. There is no direct
the
and
relationship between
company’s performance for the last five years.
remuneration
Components of directors’ compensation paid are
disclosed below.
Short Term
Post Employment
Directors Fees
Salary
$
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
210,120
207,374
-
-
210,120
207,374
Super-
annuation
$
-
-
-
-
19,961
19,700
-
-
19,961
19,700
Retirement
Benefits
$
-
-
-
-
-
-
-
-
-
-
Total
Equity
Settled
Options
$
$
-
-
-
-
-
-
-
-
- 230,081
- 227,074
-
-
-
-
- 230,081
- 227,074
EG Albers
JMD Willis
RL Clark
K How
TOTAL
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Interests in Equity Instruments
The disclosures relating to equity instruments of directors includes equity instruments of personally related
entities, being relatives and the spouses of relatives of the director and any entity under the joint or several
control or significant influence of the director. All equity transactions with directors, other than options granted
as remuneration, have been entered into under terms and conditions, applicable to all shareholders.
Interests in fully paid ordinary shares
Net Change
Balance
Balance
Interests in unlisted options
Held at
Expired
Held at
EG Albers(1)
RL Clark
KK How
JMD Willis
1/7/2019
152,373,074
57,551
100,000
3,117,382
30/6/2020
152,373,074
1/7/2019
-
57,551 4,300,000
880,000
100,000
3,117,382 1,750,000
-
-
-
-
-
(4,300,000)
(880,000)
(1,750,000)
30/6/2020
-
-
-
-
(1) Net change in shares for the year is all through on-market purchases.
End of Remuneration Report.
Vested and
exercisable
30/6/2020
-
-
-
-
Octanex Annual Report - Page | 13
OCTANEX LIMITED
ABN 61 005 632 315
Directors Declaration
The directors of the company declare that:
1.
The financial statements, comprising the statement of profit or loss and other comprehensive income,
statement of financial position, statement of cash flows, statement of changes in equity, and accompanying
notes, are in accordance with the Corporations Act 2001 and:
(a)
(b)
(c)
comply with Australian Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the consolidated entity’s financial position as at 30 June 2020
and of its performance for the year ended on that date.
the financial report also complies with International Financial Reporting Standards as
disclosed in Note 1(a).
In the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay
2.
its debts as and when they become due and payable.
The remuneration disclosures included in pages 12 to 13 of the directors’ report, (as part of audited
3.
Remuneration Report), for the year ended 30 June 2020, comply with section 300A of the Corporations Act
2001.
The directors have been given the declarations by the chief executive officer and chief financial officer
4.
required by section 295A.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on
behalf of the directors by:
E.G. Albers
Director
Melbourne
29 September 2020
Octanex Annual Report - Page | 14
Collins Square, Tower 5
727 Collins Street
Melbourne Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Octanex Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Octanex Limited (the Company) and its subsidiaries (the Group), which comprises
the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matter
How our audit addressed the key audit matter
Exploration and Evaluation Assets Valuation (Note 9 )
The tenements held by Octanex Limited and its subsidiaries
are in the exploration stage and exploration expenditure is
capitalised in accordance with Australian Accounting Standard
AASB 6 Exploration for and Evaluation of Mineral Resources.
The Group is required to assess at each reporting date if there
are any triggers for impairment which may suggest the
carrying value is in excess of the recoverable value. Any
impairment losses are then measured in accordance with
AASB 136 Impairment of Assets.
AASB 6 requires exploration and evaluation asset to be
assessed for impairment when there are indicators of
impairment. AASB 6 provides a list of indicators, however that
list is not exhaustive and therefore subjectivity is involved in
the assessment.
This area is a key audit matter as significant judgement is
required in determining whether the facts and circumstances
suggest that the carrying amount of an exploration and
evaluation asset may exceed its recoverable amount, and
then consequently in measuring any impairment loss.
Our procedures included, amongst others:
Obtaining the management prepared reconciliation of
capitalised exploration and evaluation expenditure and
agreeing to the general ledger;
Selecting a sample of capitalised exploration and
evaluation expenditure and obtaining documentation to
support the amount capitalised in line with AASB 6;
Critically reviewing management's assessment of
impairment indicators for the Group’s capitalised
exploration assets under AASB 6 by:
Assessing the period for the right to explore the
areas of interest have not expired or will not expire in
the near future without an expectation of renewal;
Enquiring of management regarding their intentions
to carry out exploration and evaluation activity in the
relevant exploration area, including review of
managements’ budgeted expenditure;
Understanding whether any data exists that indicates
the carrying value of exploration and evaluation
assets is unlikely to be recovered from successful
development or by sale; and
Considering any other available evidence of
impairment.
Assessing the accuracy of impairment recorded for the
year as it pertained to exploration interests; and
Reviewing related financial statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Company’s/Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Company/Group or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 12 to 13 of the Directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of Octanex Limited, for the year ended 30 June 2020 complies with section
300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
B L Taylor
Partner – Audit & Assurance
Melbourne, 29 September 2020
OCTANEX LIMITED
ABN 61 005 632 315
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Year Ended 30 June 2020
Interest income
Other income
Interest and finance costs
Expenses
NOTE
2
3
2020
$
6,660
2019
$
4,796
257,990
11,134,972
-
(631,760)
(899,443)
(1,481,458)
Impairment of exploration assets
9,24
(4,629,940)
(7,262,178)
Share of loss of Ophir Production Sdn Bhd
Impairment of advance to Ophir Production Sdn Bhd
-
-
(1,756,751)
(4,270,353)
Loss before tax
Income tax benefit
Net Loss after tax
(5,264,733)
(4,262,732)
4
-
(1,592)
(5,264,733)
(4,264,324)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operation
Income tax effect
Foreign currency translation reserve realised on sale of foreign
subsidiaries
Items that will not be reclassified subsequently to profit or loss
Changes in financial assets at fair value through other
comprehensive income
Income tax on items of comprehensive income
Other comprehensive income for the year net of tax
Total comprehensive income for the year
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
-
-
117,420
-
-
(1,286,141)
17,694
(5,308)
(5,308)
12,386
1,592
(1,172,437)
(5,252,347)
(5,436,761)
(2.168)
(2.168)
(1.756)
(1.756)
13
13
22
22
The above Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the
accompanying notes.
Octanex Annual Report - Page | 18
OCTANEX LIMITED
ABN 61 005 632 315
Consolidated Statement of Financial Position
As at 30 June 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Financial assets at fair value through other
comprehensive income
Exploration and evaluation assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issue capital
Reserves
Accumulated losses
TOTAL EQUITY
NOTE
5
6
7
8
9
10
11
12
13
2020
$
481,358
244,360
104,880
830,598
2019
$
1,790,892
108,702
-
1,899,594
30,082
17,696
4,925,108
9,382,098
4,955,190
9,399,794
5,785,788
11,299,388
102,742
160,591
263,333
392,928
131,658
524,586
263,333
524,586
5,522,455
10,774,802
68,867,927
68,867,927
220,108
207,722
(63,565,580)
(58,300,847)
5,522,455
10,774,802
The above Statement of Financial Position is to be read in conjunction with the accompanying notes.
Octanex Annual Report - Page | 19
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O
OCTANEX LIMITED
ABN 61 005 632 315
Consolidated Statement of Cash Flows
Year Ended 30 June 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Administration fees received
Interest received
Payments to suppliers
Government Grants – Covid
Net cash outflow from operating activities
NOTE
2020
$
2019
$
84,403
6,660
(1,287,647)
60,000
(1,136,584)
49,334
4,796
(897,075)
-
(842,945)
(i)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to suppliers - exploration
Proceeds from loan repayment by Ophir Production Sdn Bhd
Net cash (outflow) / inflow from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowing
Net outflow from financing activities
(172,950)
-
(172,950)
(228,991)
4,391,144
4,162,153
-
-
(2,924,092)
(2,924,092)
Net (decrease) / increase in cash and cash equivalents
Exchange gains
Cash and cash equivalents at beginning of the year
CASH AND CASH EQUIVALENTS AT 30 JUNE
5
(1,309,534)
-
1,790,892
481,358
395,116
63,931
1,331,845
1,790,892
(5,264,733)
(i) RECONCILIATION OF NET CASH FROM OPERATING ACTIVITIES WITH LOSS AFTER INCOME TAX
(4,264,324)
Loss after income tax
Non cash items:
Borrowing Costs
Exchange rate changes on the balances held in a foreign
currency
Employee Provisions expense
Extinguishment of Convertible Notes
Share of loss of Ophir Production Sdn Bhd
Impairment of exploration assets
Reversal of impairment of OPSB advance
Changes in assets and liabilities:
Decrease in receivables
Decrease in tax liabilities
Increase in payables
Net Cash outflow from Operating Activities
(228)
(9,726,131)
1,756,751
7,262,178
4,270,353
28,933
-
-
4,629,940
-
(240,538)
-
(290,186)
(1,136,584)
(83,447)
1,592
432,016
(842,945)
115,543
(607,248)
-
-
24
The above Statement of Cash Flows is to be read in conjunction with the accompanying notes
Octanex Annual Report - Page | 22
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Octanex Limited (“Octanex” or “the company”) is a
for-profit company incorporated and domiciled in
Australia with its registered office and principal place
of business located at 108 Marlborough Street,
Bentleigh East, Victoria 3165. The consolidated
financial report of the company for the year ended 30
its
June 2020 comprises
subsidiaries
the
(together
“consolidated entity” or “the group”) and the
consolidated entity’s interest in joint operations.
Financial information for Octanex Limited as an
individual entity is included in Note 23. The financial
report was authorised by the directors for issue on
29 September 2020.
the company and
referred
as
to
(a) Statement of compliance
financial report
The consolidated
is a general
purpose financial report which has been prepared in
accordance with Australian Accounting Standards,
including the Accounting Interpretations issued by
the Australian Accounting Standards Board (‘AASB’)
and the Corporations Act 2001. The consolidated
financial
statements and notes comply with
International Financial Reporting Standards and
Interpretations
International
Accounting Standards Board.
issued
the
by
underlying assumptions are reviewed on an ongoing
basis. Revisions
to accounting estimates are
recognised in the period in which the estimate is
revised if the revision affects only that period, or in
the period of the revision and future periods if the
revision affects both current and future periods.
Judgements made by management in the application
of Australian Accounting Standards that have a
significant effect on the financial report and estimates
with a significant risk of material adjustment in the
next year are discussed in note 1(q). The accounting
policies set out below have been applied consistently
to all periods presented in the financial report.
New and revised accounting standards applicable for
the first time to the current reporting period
The company has adopted all new and revised
Australian Accounting Standards and Interpretations
that became effective for the first time and are
relevant to the company. The adoption of the new
and revised Australian Accounting Standards and
Interpretations has had no impact on the company’s
accounting policies or the amounts reported during
the current year.
(b) Basis of preparation
(c) Principles of consolidation
The financial report is presented in Australian
dollars, which is the consolidated group’s functional
currency, rounded to the nearest dollar. It has been
prepared under the historical cost convention as
modified by the revaluation of the available for sale
investments at fair value.
The preparation of a financial report in conformity
with Australian Accounting Standards requires
management to make judgements, estimates and
assumptions that affect the application of policies and
reported amounts of assets and liabilities, income
The estimates and associated
and expenses.
assumptions are based on historical experience and
various other
factors that are believed to be
reasonable under the circumstances, the results of
which form the basis of making the judgements about
carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results
may differ from these estimates. The estimates and
consolidated
statements
The
consolidate those of the company and all of its
subsidiaries as at year end.
financial
entity
Octanex Annual Report - Page | 23
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(i) Subsidiaries
The company controls a subsidiary if it is exposed, or
has rights, to variable returns from its involvement
with the subsidiary and has the ability to affect those
returns through its power over the subsidiary. The
financial statements of the subsidiaries are prepared
for the same reporting period as the parent company
using consistent accounting policies.
The financial statements of subsidiaries are included
in the consolidated financial statements from the date
that control commences until the date that control
ceases. Investments in subsidiaries are carried at
their cost of acquisition in the parent entity note.
All transactions and balances between companies
within the consolidated entity are eliminated on
consolidation, including unrealised gains and losses
on transactions between group companies. Where
unrealised losses on intra-group asset sales are
reversed on consolidation, the underlying asset is
also tested for impairment from a consolidated entity
perspective.
Amounts reported in the financial
statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting
policies adopted by the consolidated entity. Profit or
loss and other comprehensive income of subsidiaries
acquired or disposed of during the year are
recognised from the effective date of acquisition, or
up to the effective date of disposal, as applicable.
(ii) Investments in associates and joint ventures
Associates are
consolidated entity
influence but which are not subsidiaries.
the
is able to exert significant
those entities over which
that
joint venture
is an arrangement
A
the
consolidated entity controls jointly with one or more
other investors, and over which the consolidated
entity has rights to a share of the arrangement’s net
assets rather than direct rights to underlying assets
and obligations for underlying liabilities. A joint
arrangement in which the consolidated entity has
direct rights to underlying assets and obligations for
underlying liabilities is classified as a joint operation.
Interests in joint operations are accounted for by
recognising the consolidated entity’s assets and
liabilities (including its share of any assets and
liabilities held jointly), its revenue from the sale of its
jointly). Any goodwill or
share of the output arising from the joint operation,
and its expenses (including its share of any expenses
fair value
incurred
adjustment attributable to the consolidated entity’s
share in the associate or joint venture is not
recognised separately and is included in the amount
recognised as investment. The carrying amount of the
investment
is
increased or decreased to recognise the consolidated
entity’s share of the profit or
loss and other
comprehensive income of the associate and joint
venture, adjusted where necessary
to ensure
consistency with the accounting policies of the
consolidated entity.
in associates and
joint ventures
When the consolidated entity’s share of
losses
exceeds its interest in the associate or joint venture
the entity discontinues recognising its share of
further losses. The interest in an associate or joint
venture is the carrying amount of the investment in
the associate or joint venture together with long-term
interests that in substance form part of the entity’s
net investment in the associate or joint venture.
Unrealised gains and losses on transactions between
the consolidated entity and its associates and joint
ventures are eliminated to the extent of the
consolidated entity’s interest in those entities. Where
unrealised losses are eliminated, the underlying asset
is also tested for impairment.
(iii) Joint operations
The interest of the company and of the consolidated
entity in unincorporated joint operations and joint
to account by
operated assets are brought
recognising in its financial statements the assets it
controls, the liabilities that it incurs, the expenses it
incurs and its share of income that it earns from the
sale of goods or services by the joint operation.
The financial statements of the unincorporated joint
operations and assets are prepared for the same
reporting period as the parent company using
consistent accounting policies.
Octanex Annual Report - Page | 24
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 June 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(iv) Transactions eliminated on consolidation
income and expenses arising
Intragroup balances and any unrealised gains and
losses or
from
intragroup transactions, are eliminated in preparing
the consolidated financial statements. Unrealised
gains arising from transactions with associates are
eliminated to the extent of the consolidated entity’s
interest in the entity with adjustments made to the
‘Investment in associates’ and ‘Share of associates’
net profit accounts. Unrealised losses are eliminated
in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment. Gains
and losses are recognised as the contributed assets
are consumed or sold by the associates or, if not
consumed or sold by the associate, when the
consolidated entity’s interest in such entities is
disposed of.
(d) Taxes
Income Tax
Income
taxes are accounted
comprehensive balance sheet
whereby:
for using
the
liability method
The tax consequences of recovering (settling) all
assets (liabilities) are reflected in the financial
statements;
Current and deferred tax is recognised as income or
expense except to the extent that the tax related to
equity items or to a business combination;
• A deferred tax asset is recognised to the extent
that it is probable that future taxable profit will
be available to realise the asset;
• Deferred tax asset and liabilities are measured
at the tax rates that are expected to apply to the
period where the asset is realised or the liability
settled.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of
the amount of GST, except where the amount of GST
from the taxation
incurred
is not recoverable
authority.
In these circumstances, the GST is
recognised as part of the cost of acquisition of the
asset or as part of the expense. Receivables and
payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable
to, the ATO is included as a current asset or liability
in the balance sheet. The GST components of cash
flows arising from investing and financing activities
which are recoverable from, or payable to, the ATO
are classified as operating cash flows. Commitments
and contingencies are disclosed net of the amount of
GST recoverable from, or payable to, the taxation
authority.
Tax Consolidation
The company and its wholly owned resident entities
are part of a
tax-consolidated group. As a
consequence, all members of the tax-consolidated
group are taxed as a single entity. The head entity
within the tax-consolidated group is Octanex Limited.
Current tax expense / income, deferred tax liabilities
and deferred tax assets arising from temporary
differences of the members of the tax-consolidated
group are recognised
in the separate financial
statements of the members of the tax-consolidated
group using the ‘separate taxpayer within group’
approach by reference to the carrying amounts of the
assets and
financial
statements of each entity and the tax values applying
under tax consolidation. Any current tax liabilities (or
assets) and deferred tax assets arising from unused
tax losses of the subsidiaries are assumed by the head
entity
tax-consolidated group and are
recognised by the Company as amounts payable
(receivable) to / (from) other entities in the tax-
consolidated group in conjunction with any tax
funding arrangement amounts..
in the separate
liabilities
the
in
The Company recognises deferred tax assets arising
from unused tax losses of the tax-consolidated group
to the extent that is probable that future taxable
profits of the tax-consolidated group will be available
against which the asset can be utilised. Any
subsequent period adjustments to deferred tax assets
arising from unused tax losses as a result of revised
assessments of the probability of recoverability is
recognised by the head entity only.
(e) Foreign Currency Translation
The functional and presentation currency of Octanex
Limited and its Australian subsidiaries is Australian
dollars (A$).
Octanex Annual Report - Page | 25
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 June 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
from restating
Foreign currency transactions are translated into the
functional currency using the exchange rates ruling
at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the
reporting date. Foreign exchange gains and losses
resulting from settling foreign currency transactions,
as well as
foreign currency
denominated monetary assets and liabilities, are
recognised in the Statement of Profit or Loss and
Other Comprehensive Income, except when they are
deferred in equity as qualifying cash flow hedges or
where they relate to differences on foreign currency
borrowings that provide a hedge against a net
investment in a foreign entity. Non-monetary items
measured at fair value in a foreign currency are
translated using the exchange rates at the date when
fair value was determined.
Group companies
On consolidation, the assets and liabilities of foreign
operations are translated into dollars at the rate of
exchange prevailing at the reporting date and their
Statements of Profit or Loss
and Other
Comprehensive Income are translated at exchange
rates prevailing at the dates of the transactions. The
exchange differences arising on translation for
consolidation
other
comprehensive income. On disposal of a foreign
operation, the component of other comprehensive
income relating to that particular foreign operation
is recognised in profit or loss.
recognised
are
in
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash balances
and at call bank deposits. Bank overdrafts that are
repayable on demand and form an integral part of
the company’s cash management are included as a
component of cash and cash equivalents for the
purpose of the cash flow statement.
(i) Payables
Trade, accruals and other payables are recorded
initially at fair value and subsequently at amortised
cost. Trade and other payables are non-interest
bearing and are normally settled on 60-day terms.
(k) Trade and other receivables and contract
assets
The company makes uses of a simplified approach in
accounting for trade and other receivables as well as
contract assets and records the loss allowance as
losses. These are the
lifetime expected credit
expected shortfalls
flows,
considering the potential for default at any point
during the life of the financial instrument. In
its historical
calculating,
experience, external indicators and forward-looking
information to calculate the expected credit losses
using a provision matrix.
in contractual cash
company uses
the
(l)
Equity investments
All equity investments are measured at fair value.
Equity investments that are held for trading are
measured at fair value through profit or loss. For all
other equity investments, the group can make an
irrevocable election at initial recognition of each
investment to recognise changes in fair value
through other comprehensive income (“OCI”) rather
than profit or loss. At initial recognition, the group
measures a financial asset at its fair value plus, in
the case of a financial asset not at fair value through
profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset.
Octanex Annual Report - Page | 26
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 June 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Transaction costs of financial assets carried at fair
value through profit or loss are expensed as profit or
loss. The group subsequently measures all equity
investments at fair value. The directors have elected
to present fair value gains and losses on equity
investments
is no subsequent
reclassification of fair value gains and losses to profit
or loss. Dividends from such investments continue to
be recognised in profit or loss as other revenue when
the group’s right to receive payments is established
and as long as they represent a return on investment.
in OCI. There
(m) Share capital
Ordinary share capital is recognised at the fair value
of the consideration received by the company.
Transactions costs arising on the issue of ordinary
shares are recognised directly
in equity as a
reduction of the consideration received, net of any
income tax benefit. Ordinary shares are classified as
equity.
Costs directly attributable to the issue of new shares
or options are shown as a deduction from the equity
proceeds, net of any income tax benefit. Costs directly
attributable to the issue of new shares or options
associated with the acquisition of a business are
included as part of the purchase consideration
(n) Impairment
At each reporting date the Group assesses whether
there is any indication that individual assets are
impaired. Where
indicators exist,
impairment
recoverable amount is determined and impairment
losses are recognised in the profit or loss where the
asset's carrying value exceeds
its recoverable
amount.
(i) Calculation of recoverable amount
Recoverable amount is the greater of fair value less
costs to sell and value in use. It is determined for an
individual asset, unless the asset’s value in use cannot
be estimated to be close to its fair value less costs to
sell and it does not generate cash inflows that are
largely independent of those from other groups or
assets, in which case, the recoverable amount is
determined for the class of assets to which the asset
belongs.
(ii) Reversals of impairment
Impairment losses are reversed when there is an
indication that the impairment loss may no longer
exist and there has been a change in the estimate
used to determine the recoverable amount.
An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the
carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment
loss had been recognised.
(o) Restoration, rehabilitation and environment
expenditure
Restoration, rehabilitation and environmental costs
necessitated by exploration and evaluation activities
are provided for as part of the cost of those activities.
Costs are estimated on the basis of current legal
requirements, anticipated technology and future
costs that have been discounted to their present
value. Estimates of future costs are reassessed at
each reporting date.
(p) Exploration and evaluation assets
Exploration and evaluation assets, including the costs
of acquiring permits or licences, are capitalised as
exploration and evaluation assets on an area of
interest basis. Exploration and evaluation assets are
only recognised if the rights to tenure of the area of
interest are current and either:
i.
ii.
the expenditures are expected to be recouped
and
through
exploitation of
interest, or
alternatively, by its sale or partial sale: or
the area of
development
successful
activities in the area of interest have not at the
reporting date, reached a stage which permits a
reasonable assessment of the existence or
otherwise of economically recoverable reserves
and active and significant operations in, or in
relation to, the area of interest are continuing.
Octanex Annual Report - Page | 27
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The tests contained in AASB6.20 are applied to
determine whether exploration and evaluation
assets are assessed for impairment:
i. the exploration and evaluation tenure right has
expired or are expected to expire in the near
future, and is not expected to be renewed.
ii. substantive expenditure on further exploration
for and evaluation of mineral resources in the
specific area is neither budgeted nor planned.
iii. exploration
for and evaluation of mineral
resources in the specific area have not led to the
discovery of commercially viable quantities of
mineral resources and the entity has decided to
discontinue such activities in the specific area.
iv. sufficient data exist to indicate that, although a
development in the specific area is likely to
proceed, the carrying amount of the exploration
and evaluation asset is unlikely to be recovered
in full from successful development or by sale
Proceeds from the sale of exploration permits or
recoupment of exploration costs
farmin
arrangements are credited against exploration costs
previously capitalised. Any excess of the proceeds
overs costs recouped are accounted for as a gain on
disposal.
from
Farmouts in the exploration and evaluation phase
The group does not record any expenditure made by
the farminee on its account. It also does not
recognise any gain or loss on its exploration and
evaluation farmout arrangements, but redesignates
any costs previously capitalised in relation to the
whole interest as relating to the partial interest
retained. Any additional cash consideration received
directly from the farminee is credited against costs
previously capitalised in relation to the whole
interest, with any excess accounted for as a gain on
disposal.
(q) Accounting estimates and judgements
Management determine the development, selection
and disclosure of the company’s critical accounting
policies and estimates and the application of these
policies and estimates.
Other than as disclosed in these notes, there are no
estimates and judgements that are considered to
have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year. There is,
however, a risk that actual expenditure to achieve
minimum work obligations could differ
from
estimates disclosed in the notes to the financial
statements (see Note 14).
Work requirements achieved by farm-ins materially
reduce the level of expenditure incurred by the
company
program
to
commitments.
comply with work
Per Note 1(p), management exercises judgement as
to the recoverability of exploration expenditure. Any
judgment may change as new information becomes
available. If, after having capitalised exploration and
evaluation expenditure, management concludes,
once activities in the area of interest have reached a
stage which permits a reasonable assessment of
technical feasibility and commercial viability, that
is unlikely to be
the capitalised expenditure
recovered by future sale or exploitation, then the
relevant capitalised amount will be written off
through the statement of profit or loss and other
comprehensive income.
The consolidated entity is subject to income taxes in
numerous jurisdictions. The determination of the
consolidated entity's provision for current income
tax as well as deferred tax assets and liabilities
involves significant judgements and estimates on
certain matters and transactions, for which the
ultimate outcome may be uncertain. If the final
outcome differs from the consolidated entity's
estimates, such differences will impact the current
and deferred income tax assets and liabilities in the
period in which such determination is made.
Octanex Annual Report - Page | 28
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
statement of profit or loss and other comprehensive
income with a corresponding adjustment to equity.
(t) Fair value
Fair values may be used for financial asset and
for sundry
liability measurement as well as
disclosures.
Fair values for financial instruments traded in active
markets are based on quoted market prices at
reporting date. The quoted market price for financial
assets is the current bid price and the quoted market
price. The fair value of financial instruments that are
not traded in an active market are determined using
valuation techniques. Assumptions used are based on
observable market prices and rates at reporting date.
Estimated discounted cash
flows are used to
determine fair value of the remaining financial
instruments.
are
assumed
and payables
The carrying value less impairment provision of trade
to
receivables
approximate their fair values due to their short-term
nature. The fair value of financial liabilities for
disclosure purposes is estimated by discounting the
future contractual cash flows at the current market
interest rate that is available to the company for
similar financial instruments.
(r) Revenue
the
is recognised at
Revenue
fair value of
consideration received or receivable. Amounts
disclosed as revenue are net of returns, trade
allowances and duties and taxes paid. The following
specific recognition criteria must also be met before
revenue is recognised:
(s) Share-based payment transactions
Equity settled transactions
The fair value of options granted are recognised as an
expense with a corresponding increase in equity. The
fair value is measured at grant date and recognised
over the period during which the grantee become
unconditionally entitled to the options. The fair value
at grant date is independently determined using an
option pricing model that takes into account the
exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected
price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the
term of the option.
Equity settled transactions
The fair value of options granted are recognised as an
expense with a corresponding increase in equity. The
fair value is measured at grant date and recognised
over the period during which the grantee become
unconditionally entitled to the options.
is
independently
The fair value at grant date
determined using an option pricing model that takes
into account the exercise price, the term of the
option, the impact of dilution, the share price at grant
date and expected price volatility of the underlying
share, the expected dividend yield and the risk free
interest rate for the term of the option.
vesting
The fair value of the options granted is adjusted to
reflect market vesting conditions, but excludes the
impact of any non-market vesting conditions (for
example, profitability and sales growth targets). Non-
in
conditions
market
assumptions about the number of options that are
expected to become exercisable. At each reporting
date, the entity revises its estimate of the number of
options that are expected to become exercisable. The
expense recognised each period takes into account
the most recent estimate. The impact of the revision
to original estimates, if any, is recognised in the
included
are
Octanex Annual Report - Page | 29
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(v) Earnings per Share
Basic earnings per share
Basic earnings per share is calculated by dividing
the profit attributable to members of Octanex by the
weighted average number of ordinary shares
outstanding during the financial year, adjusted for
bonus elements in ordinary shares during the year.
In calculating the weighted average number of
ordinary shares outstanding, the partly paid shares
are accounted for on a pro-rata basis according to
the amount of call outstanding in relation thereto.
Diluted earnings per share
Earnings used to calculate diluted earnings per
share are calculated by adjusting the basic earnings
by the after-tax effect of dividends and interest
associated with dilutive potential ordinary shares.
The weighted average number of shares used is
adjusted for the weighted average number of
ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary
shares into ordinary shares.
(w) New and revised accounting standards
issued not yet effective
The Directors do not believe that new and revised
standards issued by AASB (that are not as yet
effective), will have any material financial impact on
the financial statements.
Octanex Annual Report - Page | 30
NOTE
17(ii)
19
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 2 OTHER INCOME
Government grants - Covid
Sundry income – director related
Foreign currency translation reserve realised on sale of
foreign subsidiary
Extinguishment of Convertible Notes
Total income
NOTE 3 EXPENSES
Audit fees
Consulting
Foreign exchange loss
Management fees
Reporting, registry and stock exchange
Office expenses
Other expenses
Project costs
Salaries
Total expenses
NOTE 4 INCOME TAX
Components of income tax benefit
Current tax expense
Current period
Deferred tax expense
Origination and reversal of temporary differences
Total
Tax losses do not expire under current tax legislation.
2020
$
60,000
197,990
2019
$
-
122,700
-
1,286,141
-
257,990
9,726,131
11,134,972
32,137
76,635
-
25,000
20,725
105,150
144,672
-
495,124
899,443
45,647
9,531
561,531
40,000
28,115
199,472
112,034
(3,156)
488,284
1,481,458
-
-
-
1,592
-
1,592
Deferred tax assets have not been recognised in respect of tax losses because there is presently no
expectation of future taxable profit against which the Group could utilise such benefits.
Octanex Annual Report - Page | 31
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 4 INCOME TAX (CONTINUED)
Reconciliation between tax benefit and pre-tax loss
Loss before tax
Income tax benefit using statutory income tax rate of 30%
Tax effect of adjustment recognised in the period for:
Prospectus costs
Tax losses not brought to account
Non-assessable income
Equity accounted loss – non deductible
Impairment of OPSB advance – non deductible
Other non–deductible expenses
Income tax benefit
Unrecognised deferred tax asset
The estimated deferred tax asset arising from tax losses and
temporary differences not brought to account at balance date
as realisation of the benefit is not probable:
Tax losses carried forward
Temporary differences
Franking credit balance:
NOTE
2020
$
2019
$
(5,264,733)
(1,579,420)
(4,262,732)
(1,278,820)
-
208,354
(18,000)
-
-
1,389,066
-
(3,005)
2,216,557
(3,421,806)
524,025
1,796,292
168,349
1,592
6,222,548
(1,456,481)
4,766,067
5,937,726
(2,765,278)
3,172,448
Franking account balance as at end of year
1,741,532
1,741,532
NOTE 5 CASH AND CASH EQUIVALENTS
Cash at bank and on hand
481,358
1,790,892
Cash and cash equivalents are subject to interest rate risk as they earn floating rates. In the year to 30
June 2020 the average floating rate for the consolidated entity was 0.05% (2019: 1.2%). Details of
interest rate risk and sensitivity can be found in Note 18. At 30 June 2020 all bank deposits are at call.
NOTE 6 TRADE AND OTHER RECEIVABLES
Current
Other receivables
Director-related entities - other receivables
17(ii)
12,607
231,753
244,360
15,012
93,690
108,702
The carrying amount of all receivables is equal to their fair value as they are short term. At 30 June 2020 no
receivables are impaired or past due. All receivables are non-interest bearing.
Octanex Annual Report - Page | 32
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 7 PREPAYMENTS
NOTE
Consolidated
2020
$
2019
$
Prepaid tenement rent
104,880
-
The Group applied for six exploration tenements in the Eastern Goldfields Superterrane in Western Australia
during the year. If the tenements are granted rent paid on application will cover rent required on the first year of
exploration in all tenements. As at 30 June 2020 and to the date of signing the report the tenements have not
been granted. If the tenements are not granted the rent paid on application is fully refundable.
In July 2020 Octanex made application for a further four exploration licence applications following geological
reconnaissance of its Sefton Gold Project (Note 21). The area covered by the additional allocations largely
overlaps Octanex’ existing exploration licence application, with the new application boundaries providing
logistical and administrative advantages.
NOTE 8 OTHER FINANCIAL ASSETS (NON-CURRENT)
Financial Assets at fair value through other comprehensive income
Investment in director-related equities
At cost:
Shares in controlled entities
8(a)(b)
8(c)
(a) Director-related Entities:
Enegex Limited
Principal activity is oil and gas exploration (Note 16)
(b) Reconciliation of the carrying amount of Financial
Assets at fair value through other comprehensive income
Balance at beginning of year
Net revaluation increment (decrement)
Details of market price risk and sensitivity can be found in Note 18.
(c) Shares in Controlled Entities
United Oil & Gas Pty Ltd
30,081
1
30,082
17,695
1
17,695
30,081
17,695
17,695
12,386
30,081
23,003
(5,308)
17,695
1
1
United Oil & Gas Pty Ltd, a company incorporated in Australia, is owned 50% by Octanex and 50% by a fully
owned subsidiary of Octanex, Strata Resources Pty Ltd.
The consolidated entity did not consolidate United Oil & Gas Pty Ltd on the grounds that balances were not
considered material.
Octanex Annual Report - Page | 33
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 9 EXPLORATION AND EVALUATION ASSETS
Carrying amount at beginning of year
Impairment of exploration assets
Cost incurred during the year
Carrying amount at end of year
NOTE
24
Consolidated
2020
$
2019
$
9,382,098
(4,629,940)
172,950
4,925,108
16,399,197
(7,262,178)
245,079
9,382,098
Ultimate recovery of exploration and evaluation assets is dependent upon exploration success and/or the
company maintaining appropriate funding to support continued exploration activities. Exploration and
evaluation assets relate to the areas of interest in the exploration and evaluation phase for petroleum
exploration permits as shown in the table below:
30/06/2020 30/06/2019 Notes
Exploration Permits
WA-407-P
-
WA-407-P Held by wholly-owned subsidiary, Octanex Bonaparte Pty Ltd
WA-420-P
Held by wholly-owned subsidiary, Octanex Bonaparte Pty Ltd
NOTE 10 TRADE AND OTHER PAYABLES
Financial liabilities at amortised cost
Current
Trade creditors and accruals
Director-related entities - other payables
17
49,684
53,058
102,742
57,348
335,580
392,928
Trade and other payables are current liabilities of which the fair value is equal to the current carrying amount.
Information about the company’s exposure to foreign exchange risk in relation to trade payables, including
sensitivities to changes in foreign exchange rates, is provided in Note 18.
Octanex Annual Report - Page | 34
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 11 PROVISIONS
Current
Annual Leave
Directors’ retirement benefit (1)
Long service leave
NOTE
Consolidated
2020
$
2019
$
17,597
82,125
60,869
160,591
8,906
82,125
40,627
131,658
(1) On the 29th October 1997 a Deed of Appointment was signed by EG Albers. The Deed detailed terms of
continuation of his appointment as chairman of Octanex Limited. Amongst other things, it provides for a
payment of a retirement benefit to EG Albers as chairman. A deed of variation was signed 16 August 2016, and
effective 30 June 2016, that varied the terms of calculation of the Retirement Benefit under the original Deed.
The amount reflects the 28 years of service EG Albers has provided to the company.
Octanex Annual Report - Page | 35
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 12 CONTRIBUTED EQUITY
Issued Capital
Ordinary shares fully paid (a)
Ordinary shares issued pursuant to trustee
stock scheme(b)
Balance at end of year
2020
Shares
242,823,840
29,889,107
2019
Shares
242,823,840
29,889,107
2020
$
68,867,927
-
2019
$
68,867,927
-
272,712,947
272,712,947
68,867,927
68,867,927
(a) Ordinary shares fully paid
Balance at beginning of year
Trustee shares sold
Issue costs
Balance at end of year
242,823,840
-
-
242,823,840
242,823,840
-
-
242,823,840
68,867,927
-
-
68,867,927
68,867,927
-
-
68,867,927
(b) Ordinary Shares Issued Pursuant to Trustee Stock Scheme
Balance at beginning of year
Trustee shares sold
Balance at end of year
29,889,107
-
29,889,107
29,889,107
-
29,889,107
-
-
-
-
-
-
In November 2015, the members of Octanex voted to extend the existing trustee stock scheme by five years to 30
November 2020.
The company has unlimited authorised capital with no par value.
Terms and Conditions of Contributed Equity
Ordinary shares confer on the holder the right to receive dividends as declared and, in the event of winding up
the company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of
(irrespective of the amounts paid up on) shares held. Ordinary shares entitle their holder to one vote, either in
person or by proxy, at a meeting of the company.
Octanex Annual Report - Page | 36
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 12 CONTRIBUTED EQUITY (CONTINUED)
Trustee Stock Scheme
Octanex is party to a Trustee Stock Scheme, pursuant to which ordinary shares ranking equally with other
ordinary shares on issue were issued to a trustee. When those shares are sold by the trustee the net proceeds
are paid to the Company by way of subscription moneys. The trustee does not exercise voting rights in respect of
shares held pursuant to the scheme.
Unlisted Options - (Share Based Payment)
Nil.
Unlisted Options
Balance at beginning of year
Options expired / cancelled
Balance at end of year
NOTE 13 RESERVES
Financial assets at fair value through other comprehensive
income reserve
Option reserve
value
Financial assets at
fair
comprehensive income reserve
Balance at beginning of financial year
Changes in fair value on financial assets at fair value
through other comprehensive income
Income tax on other comprehensive income
through other
2020
Options
2019
Options
7,170,000
(7,170,000)
-
13,770,000
(6,600,000)
7,170,000
NOTE
Consolidated
2020
$
2019
$
(817,455)
(829,841)
1,037,563
1,037,563
220,108
207,722
(829,841)
17,694
(826,125)
(5,308)
(5,308)
(817,455)
1,592
(829,841)
The financial assets at fair value through other comprehensive income reserve represents the changes in fair
value on the group’s equity instruments including realised gains or losses on those investments. Further
information on the investments is set out in Notes 8 and 18.
Octanex Annual Report - Page | 37
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 13 RESERVES (CONTINUED)
Option reserve
Balance at beginning of financial year
Share based payment expense
NOTE
Consolidated
2020
$
2019
$
1,037,563
-
1,037,563
1,037,563
-
1,037,563
The options reserve relates to share options granted to the company secretary, the directors and individuals.
NOTE 14 EXPLORATION AND EVALUATION EXPENDITURE COMMITMENTS
The consolidated entity share of minimum work requirements in exploration permit and retention lease
interests held by the consolidated entity or in joint operations is estimated at reporting date:
Payable not later than one year
Payable later than one year but not later than three years
202,500
-
202,500
99,400
-
99,400
Estimated expenditure, arising from retention lease work programme which, may, subject to negotiation and
approval, be varied. They may also be satisfied by farmout, sale, relinquishment or surrender.
NOTE 15 INTEREST IN UNINCORPORATED JOINT OPERATIONS
The consolidated entity has an interest in the assets, liabilities and output of joint operations for the exploration
and development of petroleum in Australia. The consolidated entity has taken up its share of joint operations
transactions based on its contributions to the joint operations. The consolidated entity’s interests in the joint
operations:
Joint Operation
Cornea
Permit expired 5 May 2019.
2020
Interest
-
2019
Interest
18.75%
Permits
WA-54-R
Octanex Annual Report - Page | 38
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE
Consolidated
2020
$
2019
$
NOTE 15 INTEREST IN UNINCORPORATED JOINT OPERATIONS (CONTINUED)
Assets and liabilities of the joint operations are included in the financial statements as follows:
CURRENT ASSETS
Cash and cash equivalents
Receivables
NON-CURRENT ASSETS
Exploration and evaluation assets
CURRENT LIABILITIES
Payables
Payables – director-related entity
-
-
-
-
-
5,887
1,408
-
4,269
1,741
9
10
10, 16
There are no contingent liabilities in any of the joint operations.
NOTE 16 KEY MANAGEMENT PERSONNEL
Executive Directors Non-Executive Directors
EG Albers
RL Clark
KK How
JMD Willis
Individual compensation disclosures
Information regarding individual director’s compensation is provided in the remuneration report section of the
directors’ report. There are no employees who meet the definition of key management personnel other than the
executive directors of the company. A summary of the remuneration report is shown below.
Short Term
Post Employment
Equity Settled
Total
Directors
Fees
$
-
Salary Superannuation
$
210,120
-
207,737
$
19,961
19,700
TOTAL
2020
2019
Retirement
Benefits
$
-
-
Options
$
-
-
$
230,081
227,437
Octanex Annual Report - Page | 39
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 17 RELATED PARTY DISCLOSURES
The consolidated financial statements of the Group include:
Name
United Oil & Gas Pty Ltd
Goldsborough Pty Ltd
Octanex Bonaparte Pty Ltd
Braveheart Energy Pty Ltd
Octanex Cornea Pty Ltd
Octanex Winchester Pty Ltd
Winchester Exploration Pty Ltd
Octanex Operations Pty Ltd
Strata Resources Pty Ltd
Octanex Exmouth Pty Ltd
Director-related Entities
2020
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2019
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Companies in which an Octanex director controls or significantly influences, that provide services to the group or
to a joint operation in which the group has an interest, or that also hold an interest in those joint operations or in
which the group holds an investment.
(i)Providers of Services by Related Party
During the year services and/or facilities were provided under normal commercial terms and conditions by
director-related entities as disclosed below together with amounts payable to related parties including those
under joint operation arrangements:
Entity
Exoil Pty Ltd
Service
Related
director
EG Albers Office services and amenities
in
Melbourne
Payable at
Amounts paid
2019
2020
$
$
105,016 199,723 23,908
30/06/20
$
30/06/19
$
56,542
Natural Resources
Group Pty Ltd
Samika Pty Ltd
EG Albers Management and project services
26,500 33,938 29,150
279,038
RL Clark
Management of retention lease
-
-
131,516 235,256 53,058
1,595
-
335,580
Octanex Annual Report - Page | 40
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 17 RELATED PARTY DISCLOSURES (Continued)
(ii)Providers of Services to Related Party
During the year accounting services were provided under normal commercial terms and conditions as disclosed
below:
Entity
Related director
Enegex Limited
Exoil Pty Ltd
Cornea Resources Pty Ltd
Cue Petroleum Pty Ltd
Peako Limited
EG Albers
EG Albers
EG Albers
EG Albers
EG Albers
(iii) Investments in director-related companies
Receivables
Sundry Revenue
30/06/20
2019
2020
$
$
$
30,211
21,475
27,465
11,990
20,625
22,275
-
1,885
-
3,410
18,865
10,230
138,020 59,850 186,142
197,990 122,700 231,753
30/06/19
$
10,225
8,580
1,885
10,285
62,715
93,690
At 30 June 2020, the company carried an investment in an ASX listed company Enegex Limited, (Note 8), which is
a director-related entity of EG Albers.
Octanex Annual Report - Page | 41
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 18 FINANCIAL INSTRUMENTS
Categories of Financial Instruments
Financial Assets
Cash & cash equivalents
At fair value through other comprehensive income
Trade and other receivables – current ex prepayments
Financial Liabilities
Financial Liabilities at amortised cost
Trade and other payables
Recognition and derecognition
NOTE
2020
$
2019
$
481,358
30,082
244,360
755,800
1,790,892
17,696
108,892
1,917,480
102,742
392,928
Purchases and sales of financial assets and financial liabilities are recognised on trade date which is the date on
which the consolidated entity commits to purchase or sell the financial assets or financial liabilities. Financial
assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the group has transferred substantially all the risks and rewards of ownership. Exposure to
credit, interest rate, liquidity, foreign currency, market price and currency risks arises in the normal course of
the consolidated entity’s business. The consolidated entity’s overall risk management approach is to identify the
risks and implement safeguards which seek to minimise potential adverse effects on the financial performance of
the consolidated entity’s business.
The board of directors are responsible for monitoring and managing the financial risks of the consolidated entity.
Fair value
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or
for disclosure purposes.
AASB 13 requires disclosure of fair value measurements by level of the fair value hierarchy, as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The consolidated entity’s financial assets measured and recognised at fair value at 30 June 2020 and 30 June
2019 on a recurring basis are as follows:
Octanex Annual Report - Page | 42
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 18 FINANCIAL INSTRUMENT (Continued)
30 June 2020
Assets
Listed securities and debentures
Liabilities
Derivative financial liability
Net fair value
30 June 2019
Assets
Listed securities and debentures
Liabilities
Derivative financial liability
Net fair value
Credit risk
Level 1
$
30,082
-
30,082
Level 1
$
17,696
-
17,696
Level 2
$
Level 3
$
Total
$
-
-
-
-
-
-
30,082
-
30,082
Level 2
$
Level 3
$
Total
$
-
-
-
-
17,696
-
-
-
17,696
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails
to meet its contractual obligations. At the reporting date there were is no credit risk as the consolidated entity
has no trade sales or trade receivables.
Interest rate risk
All financial liabilities and financial assets at floating rates expose the company to cash flow interest rate risk The
consolidated entity has no exposure to interest rate risk at reporting date, other than in relation to cash and cash
equivalents which attract an interest rate. Convertible notes are at a fixed rate of interest.
Sensitivity Analysis
At reporting date a 1% (100 basis point) increase/decrease in the interest rate would increase/decrease the
consolidated entity loss by $3,370 (2019: $9,323).
Octanex Annual Report - Page | 43
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 18 FINANCIAL INSTRUMENTS (Continued)
Liquidity risk
Liquidity risk is monitored to ensure sufficient monies are available to meet contractual obligations as and when
they fall due.
The following are the contractual maturities of the financial liabilities, including interest payments. Contractual
amounts have not been discounted.
Consolidated
Carrying
Amount
$
Contractual
cash flows
$
0-12
months
$
1-2
years
$
2-10
years
$
30 June 2020
Non-derivative Financial Liabilities
Trade and other payables
102,742
102,742
102,742
-
Consolidated
Carrying
Amount
$
Contractual
cash flows
$
0-12
months
$
1-2 years
$
2-10
years
$
30 June 2019
Non-derivative
Liabilities
Trade and other payables
Financial
Foreign currency risk
392,928
392,928
392,928
-
-
-
The consolidated entity is exposed to foreign currency risk arising from purchases of goods and services that are
denominated in a currency other than the Australian dollar functional currency. Seismic and well drillings costs
are usually denominated in US dollars. To this extent, the consolidated entity is exposed to exchange rate
fluctuations between the Australian and US dollar. At 30 June 2020 the consolidated entity has a foreign currency
exposure by holding US dollars in bank accounts totalling US$63 (2019: $63).
Octanex Annual Report - Page | 44
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 18 FINANCIAL INSTRUMENTS (Continued)
Equity price risks
Equity price risk applies at fair value through other comprehensive income investments. The investments are
subject to movements in prices of the investment markets.
Financial Assets at fair value through other comprehensive income
Investments in listed equities
Enegex Limited
2020
$
2019
$
30,082
17,696
The consolidated entity and company investments in listed equities are listed on the Australian Securities
Exchange. A 10% increase / decrease at the reporting date in closing share price of each share held would have
increased/decreased consolidated equity by $3,008 (2019: $1,770). There would have been no effect on profit.
Capital Management
When managing capital, the directors’ objective is to ensure the entity continues as a going concern as well as to
maintain optimal returns to shareholders and benefits for other stakeholders.
It is the company’s plan that capital, as and when required, further, will be raised by any one or a combination of
the following manners: placement of shares to excluded offerees, pro-rata issue to shareholders, the exercise of
outstanding options, and/or a further issue of shares. Should these methods not be considered to be viable, or in
the best interests of shareholders, then it would be the consolidated entity’s intention to meet its exploration
obligations by either partial sale of its interests or farmout.
No company in the consolidated entity is subject to any externally imposed capital requirements.
NOTE 19 AUDITOR’S REMUNERATION
Amounts received or due and receivable by:
Grant Thornton Audit Pty Ltd - Auditor of the
consolidated entity and company
NOTE 20 SEGMENT INFORMATION
2020
$
2019
$
32,137
45,647
Under AASB 8 Operating Segments, segment information is presented using a 'management approach', i.e.
segment information is provided on the same basis as information used for internal reporting purposes by the
board of directors
At regular intervals the board is provided management information at a group level for the group’s cash position,
the carrying values of exploration permits and a group cash forecast for the next twelve months of operation. On
this basis, no segment information is included in these financial statements.
All interest received has been derived in Australia. All exploration and evaluation assets are held in Australia.
Octanex Annual Report - Page | 45
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 21 EVENTS AFTER THE END OF THE REPORTING PERIOD
In July 2020 Octanex made application for a further four exploration licence applications following geological
reconnaissance in the Eastern Goldfields Superterrane in Western Australia. The area covered by the additional
allocations largely overlaps Octanex’ existing exploration licence applications (Note 7), with the new
application boundaries providing logistical and administrative advantages.
NOTE 22 LOSS PER SHARE
The following reflects the income and share data used in the calculations of basic and diluted earnings per share:
Net loss
Weighted average number of shares
2020
$
2019
$
(5,264,733)
(4,262,732)
Number of
Shares
242,823,840
Number of
Shares
242,823,840
NOTE 23 PARENT ENTITY INFORMATION
The following details information related to the parent entity, Octanex Limited at 30 June 2020. The information
presented here has been prepared using consistent accounting policies as presented in Note 1, except for the use
of the cost method for investment in subsidiary companies by the parent.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Options reserve
Financial assets at fair value through other comprehensive income
reserve
Accumulated losses
Total equity
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
No dividends were paid by the parent entity in 2020 (2019: Nil).
725,714
17,566,361
18,292,075
258,033
13,013,048
13,271,081
68,867,927
1,037,563
(639,113)
1,896,283
21,958,213
23,854,496
516,564
13,013,440
13,530,004
68,867,927
1,037,563
(639,113)
(64,245,383)
5,020,994
(58,941,885)
10,324,492
(5,303,498)
(4,723,819)
-
-
(5,303,498)
(4,723,819)
Octanex Annual Report - Page | 46
OCTANEX LIMITED
ABN 61 005 632 315
Notes to the Financial Statement
30 JUNE 2020
NOTE 24 IMPAIRMENT OF EXPLORATION AND EVALUATION ASSET
On 12 February 2020 WA-420-P was not renewed and so expired on that date. Capitalised exploration and
evaluation costs of $4,629,940 were written off.
Octanex Annual Report - Page | 47
OCTANEX LIMITED
ABN 61 005 632 315
Shareholder Information (compiled as at 15 October 2020)
Ordinary share capital
As at 15 October 2020 the company had on issue the following shares:
Fully Paid Ordinary Shares
272,712,947 held by 1,344 holders
All issued fully paid ordinary shares
carry one vote per share
Trustee Shares
29,889,107 held by Doravale Enterprises Pty Ltd (the
Trustee)2
Other than in extremely limited circumstances, the Trustee
has bound itself by the deed of covenant entered into in
association with the Scheme not to vote at the meetings of
members of Octanex.
Options
As at 15 October 2020 the company had no options on issue.
Distribution of holders
Holding Ranges
Holders
Total Units
% Issued
Share Capital
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Over 100,000
Totals
* Based on the price per security, number of holders with an unmarketable holding: 1,138
53,556
1,593,287
1,050,210
10,954,910
259,060,984
272,712,947
171
628
133
317
100
1,344
0.02%
0.58%
0.39%
4.02%
94.99%
100.00%
Substantial shareholders
Substantial shareholders as disclosed in substantial shareholding notices given to the Company are as follows:
Shareholder
Interest in voting
rights
%
of Voting Rights
The Albers Group
Sabah International Petroleum
155,019,083
40,332,663
56.84
14.79
2 These ordinary shares were issued to the Trustee on trust for sale in accordance with a scheme of arrangement
approved by the Supreme Court of Victoria on 17 November 2010 in Matter SCI 210 04962 (the Scheme). As
previously advised to the ASX and to members, those shares are ordinary shares held on trust for sale by the trustee on
the basis that the net proceeds of sale will present the subsection moneys thereof. The shares may be sold as fully paid
up or as partly paid up. Until sold, by the terms of the Scheme, the Trustee will not participate in dividends or
distributions are to the account of the members of Octanex pro rata their respective shareholdings.
Octanex Annual Report - Page | 48
OCTANEX LIMITED
ABN 61 005 632 315
Twenty largest shareholders as at 15 October 2020*
Holder
Number of shares
Sabah International Petroleum Ltd
Gascorp Australia Pty Ltd
Mr Ernest Geoffrey Albers & Mrs Pamela Joy Albers
Mr Ernest Geoffrey Albers
Sacrosanct Pty Ltd
Great Missenden Holdings Pty Ltd
National Gas Australia Pty Ltd
Great Australia Corporation Pty Ltd
Bass Strait Group Pty Ltd
Cue Petroleum Pty Ltd
The Albers Companies Incorporated Pty Ltd
Australis Finance Pty Ltd
Fugro Exploration Pty Ltd
Mrs Pamela Joy Albers
Miller Anderson Pty Ltd
Bond Street Custodians Limited
Great Missenden Group Pty Ltd
Albers Family Custodian Pty Ltd
Seaquest Petroleum Pty Ltd
Wilstermere Corporation Pty Ltd
Total Top 20
* Excluding 29,889,107 Trustee Shares held by Doravale Enterprise Pty Ltd
40,332,663
35,200,014
25,868,034
17,297,794
14,436,081
12,946,004
7,200,000
6,291,000
6,059,049
5,763,357
3,780,491
3,773,188
3,691,721
3,062,500
3,000,000
2,819,512
2,765,060
2,542,875
2,248,000
2,106,500
201,183,843
% of Fully
Paid Shares
14.79%
12.91%
9.49%
6.34%
5.29%
4.75%
2.64%
2.31%
2.22%
2.11%
1.39%
1.38%
1.35%
1.12%
1.10%
1.03%
1.01%
0.93%
0.82%
0.77%
73.77%
Mineral and Petroleum Tenements held/applied for at 30 June 2020
Tenement
Octanex
interest
Tenement status
Offshore Western Australia (Bonaparte Basin)
WA-407-P
100%
Granted
Western Australia (Mount Margaret District)
E 38/3416
Up to 80% Application
E 38/3417
Up to 80% Application
E 38/3418
Up to 80% Application
E 38/3431
Up to 80% Application
E 38/3432
Up to 80% Application
E 38/3433
Up to 80% Application
Octanex Annual Report - Page | 49
OCTANEX LIMITED
ABN 61 005 632 315
Tenements acquired during the year and their location
Tenement
Octanex
interest
Tenement status
Western Australia (Mount Margaret District)
E 38/3416
Up to 80% Application
E 38/3417
Up to 80% Application
E 38/3418
Up to 80% Application
E 38/3431
Up to 80% Application
E 38/3432
Up to 80% Application
E 38/3433
Up to 80% Application
Tenements disposed of during the quarter and their location
Tenement
Octanex
interest
Tenement status
Offshore Western Australia (Bonaparte Basin)
WA-420-P
100%
Expired
Beneficial percentage interests held in farm-in or farm-out agreements at 30 June 2020:
Octanex’s Mount Margaret District tenements have been applied for pursuant to an agreement with Mr
Christopher Reindler. Under the terms of the agreement Octanex has the right to a 65% interest or an
80% interest by satisfying specific exploration expenditures.
Octanex Annual Report - Page | 50