Annual Report
2021
Octanex Limited
ASX:OXX
1
CORPORATE DIRECTORY
Directors
Mr Geoffrey Albers
Chairman
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
Level 1, 10 Yarra Street, South Yarra
Victoria, 3141, Australia
Telephone:
+61 (03) 8610 4702
Facsimile:
+61 (03) 8610 4799
E-mail:
admin@octanex.com.au
Website: www.octanex.com.au
Auditor
Grant Thornton Audit Pty Ltd
Collins Square, Tower 5
727 Collins Street
Melbourne, Victoria 3008 Australia
Share Registry
Automic Pty Ltd
Level 3, 50 Holt Street
Surry Hills, NSW 2010, Australia
Telephone: 1300 288 664 (within Australia)
Telephone: +61 (2) 9698 5414 (outside
Australia)
Website: www.automic.com.au
Stock Exchange
ASX Limited
Level 4, North Tower, Rialto
525 Collins Street
Melbourne, Victoria 3000 Australia
ASX Code: OXX
Incorporated in Victoria on 13 March 1980
Corporate Directory…………………...…..1
Chairman’s Letter………………….………2
Review of Operations….....…………........4
Tenement Schedule….....……..……........7
Competent Person Declaration ......….....7
Auditor’s Independence Declaration........8
Directors’ Report………………………......9
Corporate Governance ......................... 11
Remuneration Report ............................ 12
Directors’ Declaration ............................ 15
Audit Report .......................................... 16
Statement of Profit or Loss and Other
Comprehensive Income ........................ 19
Statement of Financial Position………...20
Statement of Changes in Equity ........... 21
Statement of Cash Flows………….…….23
Notes to the Financial Statements….….24
Shareholder Information…………….…..45
2
CHAIRMAN’S LETTER
The past 12 months have seen a redirection of
our Company away from its traditional
offshore petroleum exploration activities into
exploration for gold and base metals in
Australia.
The weight of negative sentiment about
carbon-based fuels, as evidenced by the push
for an accelerated phase-out of carbon
emissions, has seen the withdrawal of some
of the largest international oil and gas
producers
from
advancement
of
their
traditional oil and gas exploration and
development activities. We have seen the
outright disposal of oil and gas interests and
divisions among the biggest of the world's
petroleum majors. All of this has encouraged
us to find a new rationale for our existence as
a company.
The high-risk offshore petroleum exploration
scene in Australia has been decimated, not
only by the change in sentiment about carbon
emissions, but also by the advancement of
energy forms and energy usage to embrace
renewables and de-carbonisation generally.
The rise and rise of renewable energy sources
(solar, wind and hydro), coupled with
advances in energy storage technology (both
privately
and
commercially)
has
been
unrelenting. It's hard to imagine any oil major
presently having the risk tolerance to
undertake a 15 - 20 year plan to explore, prove
up and develop a new petroleum field from a
grass roots start.
We saw a possible future for Octanex with
gold and minerals, based on our view of gold
as a store of value in inflationary times and on
minerals as a result of the innovative forms of
energy storage, transmission and usage being
developed which require minerals of many
types, for which much of Western Australia is
highly prospective.
We were invited by prospector, Mr Chris
Reindler, to fund a concept he had formulated
for the possibility of gold and base metals
accumulations in an area around the Sefton
lineament, east of Laverton, in the far Eastern
Gold Fields of Western Australia.
The largely unexplored but covered nature of
the Sefton region as part of the prospective
Yilgarn Craton encouraged us to join with Mr
Reindler and to make applications for an
extensive tenement position covering 2,585
km2. The region shows evidence of both gold
and base metals. During the year in review,
five tenements totalling 2,105km2 were
granted as part of that joint effort.
During the Sefton tenement application phase
we set about building our team, accumulating
historic geological data and contracted to have
regional geophysical data re-processed to
assist with targeting and prioritising areas for
initial field work.
We have now undertaken several wide-
spaced geochemical lag sampling expeditions
through
which
we
have
validated
our
exploration concepts and successfully defined
gold and gold-pathfinder anomalies for follow-
up testing, as reviewed in the Operations
Review contained in this Annual Report.
Our strategy is one of exploration to discover,
prove and develop resources in our own right.
At least for the foreseeable future there is a
depth of funding for junior companies in
Australia. That funding not only includes
corporate funding by shareholders but, in the
case of Western Australia, that government
provides grants to incentivise exploration
drilling. I can see no reason why our Company
should not be able to carry a project from
exploration to discovery and from there to
proof of resource, through to development and
into production.
3
On behalf of the Board, I thank our
shareholders for their support and financial
contribution which has allowed Octanex to be
in the satisfactory position of having an
extensive
portfolio
of
lightly
explored
prospectively
high-impact
acreage
surrounded by significant producing gold
mines to the west, east and south of our
acreage.
E.G. Albers
Chairman
Octanex Limited
29th September 2021
4
Review of Operations
.
Sefton Gold Project
Octanex earning 80%
Octanex’s flagship Sefton Gold Project is
located in the Great Victoria Desert between
the Laverton and Yamarna Greenstone Belts,
in the Eastern Goldfields province of Western
Australia. It is comprised of five granted
licences covering approximately 2,105km2 as
well as a further 480km2 under application.
This prospective package of ground has had
very little modern exploration.
The company believes there is potential for the
discovery of a major gold resource proximal to
major structures traversing its Sefton Project
area. The Sefton lineament is the most well-
known major fault zone traversing the Sefton
Project area. There is also exploration potential
for nickel-copper sulphides and nickel-copper
laterite associated with ultramafic enclaves.
Although the focus is gold, the company
maintains a multicommodity approach to its
exploration. Octanex’s near-term objective is to
identify areas of anomalous geochemistry to
generate targets for potential drill testing.
Figure 1. Sefton and Hope Campbell Project Locations
The company believes there is potential for the
discovery of a major gold resource proximal to
major structures traversing its Sefton Project
area. The Sefton lineament is the most well-
known major fault zone traversing the Sefton
Project area. There is also exploration potential
for nickel-copper sulphides and nickel-copper
laterite associated with ultramafic enclaves.
Although the focus is gold, the company
maintains a multicommodity approach to its
exploration.
Gruyere
Tropicana
Sunrise
Dam
Granny
Smith
Octanex’s near-term objective is to identify
areas of anomalous geochemistry to generate
targets for potential drill testing.
During the year, wide-spaced geochemical lag
sampling was carried out across some of the
project area as part of a staged exploration
program. The sampling successfully defined
kilometric-scale
gold
and
gold-pathfinder
anomalies for follow-up bedrock testing via
aircore/RAB drilling.
Figure 2. Octanex’s staged geochemical sampling program has identified kilometric-scale gold anomalism
5
Hope Campbell Project
100% Octanex
During the year Octanex made application
for an area to the southeast of its Sefton
Project. Comprised of three exploration
licence applications covering 1,356km2,
this area is now named the ‘Hope Campbell
Project’. Many of the structures, interpreted
from regional magnetics, that run through
the Sefton Project area appear to continue
into the Hope Campbell Project area.
Figure 3 Sefton Project and Hope Campbell
Project tenements on a regional magnetic base,
showing major structures.
Ascalon Gas, Bonaparte Basin
100% Octanex
The Ascalon gas accumulation is located
mostly within exploration permit WA-407-P
in which Octanex has a 100% interest.
Ascalon has an aerial extent of 320km2, 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.
Figure 4. Ascalon proximity to gas infrastructure
1 True Vertical Depth
Proximity to existing infrastructure and gas
resources presents opportunities for the
future development of Ascalon options.
Located in shallow water (68m), 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 ends in February 2022. The year 6
work program comprises geotechnical
studies to inform the design of an appraisal
well.
6
Tenement Schedule
As at 27 September 2021
Tenement
Octanex interest
Tenement status
Size Km2
Offshore Western Australia (Bonaparte Basin)
WA-407-P
100%
Granted
4,918.00
Western Australia (Mount Margaret District)
Sefton Project
E 38/3416
65% and up to 80%
Granted
541.21
E 38/3417
65% and up to 80%
Granted
602.2
E 38/3418
65% and up to 80%
Granted
575.52
E 38/3432
65% and up to 80%
Granted
120.14
E 38/3433
65% and up to 80%
Granted
267.30
E 38/3643
65% and up to 80
Application
481.15
E38/3644
65% and up to 80
Application
E38/3645
65% and up to 80
Application
E 38/3515
65% and up to 80%
Application
Hope Campbell Project
E 38/3626
100%
Application
465.55
E 39/2240
100%
Application
599.65
E 39/2241
100%
Application
290.72
Competent Person Declaration
The information in this report that relates to Exploration Results at the Sefton Project is extracted
from the ASX announcement titled “Sefton Project Exploration Update” released on 27 April
2021 and “Sefton Lag Sampling Confirms Gold Mineralisation” released on 12 August 2021.
All ASX Announcements are available at www.octanex.com.au
The Company confirms that it is not aware of any new information or data that materially affects
the information included in the original market announcement. The company confirms that the
form and context in which the Competent Person’s findings are presented have not been
materially modified from the original market announcement.
7
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
To the Directors of Octanex Limited
Auditor’s Independence Declaration
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 2021, I declare that, to the best of my knowledge and belief, there have been:
b
a
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
T S Jackman
Partner – Audit & Assurance
Melbourne, 29 September 2021
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.
Collins Square, Tower 5
727 Collins Street
Melbourne Victoria 3008
8
Directors’ Report
Directors
Mr Geoff Albers LL.B, FAICD
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.
Mr Willis is a director of New Zealand Energy
Corp, a company with New Zealand operations
and listed on the TSX Venture exchange.
9
Mr Robert Wright B Bus, CPA
Company Secretary
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 $300,198 (2020: loss of
$5,264,733).
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
None for the year and to the date of signing this
report.
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
Since the end of the financial year there has
been no significant event.
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.
Share Capital
Ordinary Shares
The Company’s share capital consists of
257,823,840 ordinary fully paid shares (2020:
242,823,840).
In May 2021 the Company raised $750,000,
before
costs,
through
a
placement
to
Professional and Sophisticated investors to
advance exploration on the Company’s projects,
particularly
its
Sefton
Gold
Project.
The
Placement comprised the issue of 15,000,000
fully paid ordinary shares at $0.05 (5 cents) per
share and the grant of 7,500,000 unlisted options,
exercisable at $0.075 (7.5 cents) on or before 30
April 2023.
Trustee Stock Scheme
On 27 November 2020, the members of Octanex
voted to cancel the trustee stock scheme shares
(2020: 29,889,107).
Unlisted Options
Unlisted Options
2021
2020
Balance at
beginning of year
-
7,170,000
Options Granted
11,500,000
-
Options expired
-
(7,170,000)
Balance at end of
year
11,500,000
-
10
In November 4,000,000 options (exercisable at
$0.0195 (1.95 cents) on or before 27 November
2023 were granted to a director, Rae Clark.
In May 2021 as part of the above-mentioned
placement, 7,500,000 unlisted options were
issued, exercisable at $0.075 (7.5 cents) on or
before 30 April 2023.
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 Executive
Director. All Directors have unrestricted access to
Company records
and information and receive
detailed financial
and operational reports.
The Board is currently comprised of three Non-
Executive Directors and one Executive Director.
In accordance with the Company’s Constitution
and the ASX Listing Rules, the Directors (other
than the Executive Director) 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.
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 2021.
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 2021
11
Remuneration Report
This Remuneration Report for the year ended 30 June 2021 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
2021 for the purpose of this Remuneration Report:
Executive Director
RL Clark
Executive Director
Non-executive Directors
EG Albers
Chairman
JMD Willis
Director
KK How
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 (2020: $nil). Total director remuneration (exclusive
of consulting fees which are included at note 16) of $104,643 was paid and payable during the year
(2020: $230,181).
There is no performance related remuneration for directors. Remuneration paid to directors covers all
board activities, including serving on committees.
12
Remuneration Report (continued)
Apart from a retirement benefit for the chairman and statutory leave for RL Clark, the other directors do
not receive employee benefits such as annual leave and long service leave, but 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 relationship between remuneration and the company’s performance for
the last five years.
Components of directors’ compensation paid are disclosed below.
Short Term
Post Employment
Equity
Settled
Total
Directors
Fees
Salary
Super-
annuation
Retirement
Benefits Options(1)
$
$
$
$
$
$
EG Albers
2021
-
-
-
-
-
-
2020
-
-
-
-
-
-
JMD Willis
2021
-
-
-
-
-
-
2020
-
-
-
-
-
-
RL Clark
2021
-
55,542
5,268
-
43,833 104,643
2020
-
210,120
19,961
-
-
230,081
K How
2021
-
-
-
-
-
-
2020
-
-
-
-
-
-
TOTAL
2021
-
55,542
5,268
-
43,833 104,643
2020
-
210,120
19,961
-
-
230,081
(1) The whole value of options granted during the year has been disclosed as remuneration rather than
the amount vested.
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.
(1) Net change in shares for the year is all through on-market purchases.
Interests in fully paid ordinary shares
Interests in unlisted options
Balance
Net
Change
Balance
Held at
Issued
Held at
Vested and
exercisable
1/7/2020
30/6/2021
1/7/2020
30/6/202
1
30/6/2021
EG Albers(1)
152,373,074
3,062,500
155,435,574
-
-
-
-
RL Clark
57,551
-
57,551
-
4,000,000
-
4,000,000
KK How
100,000
-
100,000
-
-
-
-
JMD Willis
3,117,382
-
3,117,382
-
-
-
-
13
Remuneration Report (continued)
The Company granted 4,000,000 options over ordinary shares to a director during the financial year (2020:
Nil). All of the options granted in the current financial year have an employment condition and so vest
over that service condition.
The options granted during the year ended have been valued using the Black Scholes Option Valuation
The fair value of these share based payment (for accounting) at grant date was $43,833 (2020: $Nil). A
share based payment expense of $8,616 has been recognised for the year ended 30 June 2021 (2020:
$Nil).
End of Remuneration Report.
14
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)
comply with Australian Accounting Standards and the Corporations Regulations
2001; and
(b)
give a true and fair view of the consolidated entity’s financial position as at 30
June 2021 and of its performance for the year ended on that date.
(c)
the financial report also complies with International Financial Reporting Standards
as disclosed in Note 1(a).
2.
In the directors’ opinion, there are reasonable grounds to believe that the company will be
able to pay its debts as and when they become due and payable.
3.
The remuneration disclosures included in pages 12-14 of the directors’ report, (as part of
audited Remuneration Report), for the year ended 30 June 2021, comply with section 300A of
the Corporations Act 2001.
4.
The directors have been given the declarations by the executive director and chief financial
officer 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 2021
15
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
www.grantthornton.com.au
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 2021, 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 2021 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.
Material uncertainty related to going concern
We draw attention to Note 1(b) in the financial statements, which indicates that the Group incurred a net loss after tax of
$300,198 during the year ended 30 June 2021 and a net cash outflow from operating and investing activities of $481,418. As
stated in Note 1(b), these events or conditions, along with other matters as set forth in Note 1(b), indicate that a material
uncertainty exists that may cast doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
16
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Exploration and Evaluation Assets (Note 9)
At 30 June 2021 the carrying value of exploration and
evaluation assets was $5,314,686.
In accordance with 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.
The process undertaken by management to assess whether
there are any impairment triggers in each area of interest
involves an element of management judgement.
This area is a key audit matter due to the significant judgement
involved in determining the existence of impairment triggers.
Our procedures included, amongst others:
•
obtaining the management reconciliation of capitalised
exploration and evaluation expenditure and agreeing to
the general ledger;
•
reviewing management’s area of interest
considerations against AASB 6;
•
conducting a detailed review of management’s
assessment of trigger events prepared in accordance
with AASB 6 including;
o
tracing projects to statutory registers, exploration
licenses and third party confirmations to
determine whether a right of tenure existed;
o
enquiry of management regarding their intentions
to carry out exploration and evaluation activity in
the relevant exploration area, including review of
management’s budgeted expenditure;
o
understanding whether any data exists to
suggest that the carrying value of these
exploration and evaluation assets are unlikely to
be recovered through development or sale;
•
evaluating the competence, capabilities and objectivity
of management’s experts in the evaluation of potential
impairment triggers; and
•
assessing the appropriateness of the 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 2021, 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.
17
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors
either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
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/ar_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 14 of the Directors’ report for the year ended 30 June
2021.
In our opinion, the Remuneration Report of Octanex Limited, for the year ended 30 June 2021 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
T S Jackman
Partner – Audit & Assurance
Melbourne, 29 September 2021
18
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the Year Ended 30 June 2021
NOTE
2021
$
2020
$
Interest income
218
6,660
Other income
2
396,428
257,990
Expenses
3
(696,844)
(899,443)
Impairment of exploration assets
-
(4,629,940)
Loss before tax
(300,198)
(5,264,733)
Income tax benefit
4
-
-
Net Loss after tax
(300,198)
(5,264,733)
Items that will not be reclassified subsequently to profit or
loss
Changes in financial assets at fair value through other
comprehensive income
13
80,882
17,694
Income tax on items of comprehensive income
13
(24,264)
(5,308)
Other comprehensive income for the year net of tax
56,618
12,386
Total comprehensive income for the year
(243,580)
(5,252,347)
Basic loss per share (cents per share)
21
(0.123)
(2.168)
Diluted loss per share (cents per share)
21
(0.123)
(2.168)
The above Statement of Profit or Loss and Other Comprehensive Income is to be read in
conjunction with the accompanying notes.
19
Consolidated Statement of Financial Position at 30 June 2021
NOTE
2021
$
2020
$
CURRENT ASSETS
Cash and cash equivalents
5
700,033
481,358
Trade and other receivables
6
181,808
244,360
Prepayments
7
148,332
104,880
TOTAL CURRENT ASSETS
1,030,173
830,598
NON-CURRENT ASSETS
Financial assets at fair value through other
comprehensive income
8
-
30,082
Exploration and evaluation assets
9
5,314,686
4,925,108
TOTAL NON-CURRENT ASSETS
5,314,686
4,955,190
TOTAL ASSETS
6,344,859
5,785,788
CURRENT LIABILITIES
Trade and other payables
10
165,723
102,742
Provisions
11
191,552
160,591
TOTAL CURRENT LIABILITIES
357,275
263,333
TOTAL LIABILITIES
357,275
263,333
NET ASSETS
5,987,584
5,522,455
EQUITY
Issue capital
12
69,568,020
68,867,927
Reserves
13
(752,221)
220,108
Accumulated losses
(62,828,215)
(63,565,580)
TOTAL EQUITY
5,987,584
5,522,455
The above Statement of Financial Position is to be read in conjunction with the accompanying notes.
20
Consolidated Statement of Changes in Equity
Year Ended 30 June 2021
Contributed
equity
Accumulated
losses
Financial
assets at fair
value
through
other
comprehensi
ve income
Option
reserve
Total
$
$
$
$
$
CONSOLIDATED ENTITY
At 1 July 2020
68,867,927
(63,565,580)
(817,455)
1,037,563
5,522,455
Loss after tax
-
(300,198)
-
-
(300,198)
Other comprehensive income
Changes in fair value on financial assets at fair
value through other comprehensive income net of
tax
-
-
56,618
-
56,618
Total comprehensive income for the year
-
(300,198)
56,618
-
(243,580)
Issue of shares
750,000
-
-
-
750,000
Costs of issue
(49,907)
-
-
-
(49,907)
Grant of Options
-
-
-
8,616
8,616
Reclassification of expired options
-
1,037,563
-
(1,037,563)
-
At 30 June 2021
69,568,020
(62,828,215)
(760,837)
8,616
5,987,584
The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes.
21
Consolidated Statement of Changes in Equity
Year Ended 30 June 2020
Contributed
equity
Accumulated
losses
Financial
assets at fair
value through
other
comprehensive
income
Option
reserve
Total
$
$
$
$
$
CONSOLIDATED ENTITY
At 1 July 2019
68,867,927
(58,300,847)
(829,841)
1,037,563
10,774,802
Loss after tax
-
(5,264,733)
-
-
(5,264,733)
Other comprehensive income
Exchange differences of translation of foreign
operations net of tax
-
-
-
-
Foreign currency translation reserve realised on sale
of foreign subsidiaries
-
-
-
-
-
Changes in fair value on financial assets at fair value
through other comprehensive income net of tax
-
-
12,386
-
12,386
Total comprehensive income for the year
-
(5,264,733)
12,386
-
(5,252,347)
At 30 June 2020
68,867,927
(63,565,580)
(817,455)
1,037,563
5,522,455
22
Consolidated Statement of Cash Flows
Year Ended 30 June 2021
NOTE
2021
$
2020
$
CASH FLOWS FROM OPERATING ACTIVITIES
Administration fees received
371,299
84,403
Interest received
-
6,660
Payments to suppliers
(559,775)
(1,287,647)
Government Grants – Covid
119,500
60,000
Net cash outflow from operating activities
(i)
(68,976)
(1,136,584)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments to suppliers - exploration
(511,396)
(172,950)
Proceeds from sale of investment
98,954
-
Net cash outflow from investing activities
(412,442)
(172,950)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of share issue
750,000
-
Costs of issue
(49,907)
-
Net inflow from financing activities
700,093
-
Net increase / (decrease) in cash and cash equivalents
218,675
(1,309,534)
Exchange gains
-
-
Cash and cash equivalents at beginning of the year
481,358
1,790,892
CASH AND CASH EQUIVALENTS AT 30 JUNE
5
700,033
481,358
(i)
Reconciliation of Net Cash from Operating Activities with Loss after Income Tax
Loss after income tax
(300,198)
(5,264,733)
Non cash items:
Employee Provisions expense
30,961
28,933
Share based payment expense
8,616
-
Profit on sale of investments
(12,254)
-
Impairment of exploration assets
24
-
4,629,940
Changes in assets and liabilities:
Decrease in receivables
62,551
(240,538)
Exploration expensed
129,461
-
Increase in payables
11,887
(290,186)
Net Cash outflow from Operating Activities
(68,976)
(1,136,584)
The above Statement of Cash Flows is to be read in conjunction with the accompanying notes
23
Notes to the Financial Statements
30 June 2021
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 Level 1, 10 Yarra
Street,
South
Yarra,
Victoria
3141
The
consolidated financial report of the company for the
year ended 30 June 2021 comprises the company
and its subsidiaries (together referred to as the
“consolidated entity” or “the group”) and the
consolidated entity’s interest in joint operations.
Financial information for Octanex Limited as an
individual entity is included in Note 22. The
financial report was authorised by the directors for
issue on 29 September 2021.
(a) Statement of compliance
The consolidated financial report is a general
purpose financial report which has been prepared
in
accordance
with
Australian
Accounting
Standards,
including
the
Accounting
Interpretations issued by the Australian Accounting
Standards Board (‘AASB’) and the Corporations
Act 2001. The consolidated financial statements
and notes comply with International Financial
Reporting Standards and Interpretations issued by
the International Accounting Standards Board.
(b) Basis of preparation
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 and expenses. The estimates and
associated assumptions are based on historical
experience and various other factors that are
believed
to
be
reasonable
under
the
circumstances, the results of which form the basis
of making the judgements about carrying values of
assets and liabilities that are not readily apparent
from other sources. Actual results may differ from
these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the
revision affects only that period, or in the period of
the revision and future periods if the revision
affects
both
current
and
future
periods.
Judgements made by management in the
application of Australian Accounting Standards
that have a significant effect on the financial report
and estimates with a significant risk of material
adjustment in the next year are discussed in note
1(q). The accounting policies set out below have
been applied consistently to all periods presented
in the financial report.
Going concern
For the year ended 30 June 2021 the Group
incurred a net cash outflow from operating and
investing activities of $481,418 (2020: $1,309,534)
and a net loss after tax of $300,198 (2020:
$5,264,733). As at 30 June 2021, the Group has
positive working capital of $672,898 (2020:
$567,265).
Directors expect that the group will be able to
successfully raise sufficient funding to enable it to
continue as a going concern for at least 12 months
from the signing of annual financial report.
This financial report has been prepared on a going
concern basis which contemplates the continuity of
normal business activities and the realisation of
assets and settlement of liabilities in the ordinary
course of business. In the event that sufficient
funds are not raised to meet all of the Group's
commitments, debt and payables, the interest in
some or all of the Group's tenements may be
affected and all assets and liabilities may not be
realised at the amounts disclosed. No adjustments
have been made relating to the recoverability and
reclassification of recorded asset amounts and
classification of liabilities that might be necessary
should the Group not continue as a going concern,
24
Notes to the Financial Statements
30 JUNE 2021
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
particularly
the
write-down
of
capitalised
exploration expenditure should the exploration
permits be ultimately surrendered or cancelled.
Having assessed the potential uncertainties
relating to the Group’s ability to effectively fund
exploration activities and operating expenditures,
the Directors believe that the Group will continue
to operate as a going concern for the foreseeable
future. Therefore, the Directors consider it
appropriate to prepare the financial statements
on a going concern basis.
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.
Configuration or Customisation Costs in a Cloud
Computing Arrangement (IAS 38 Intangible
Assets)
During the financial year the International
Financial Reporting Interpretations Committee
IFRIC identified that various approaches to
customisation and configuration costs for cloud
computing
arrangements
were
utilised
by
companies depending on internal policy.
The Agenda Decision requires that management
capitalise those elements of expenditure that
meet the definition of an ‘Intangible Asset’ as
defined by AASB 138 Intangible Assets and
recognise any additional amounts as an expense
as the entity benefits from the expenditure –
either by applying AASB 138 or applying another
accounting standard.
The impact of this decision has not had a material
impact on the group’s financial statements.
(c) Principles of consolidation
The consolidated entity financial statements
consolidate those of the company and all of its
subsidiaries as at year end.
(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.
25
Notes to the Financial Statements
30 JUNE 2021
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(ii)
Investments in associates and joint
ventures
Associates are those entities over which the
consolidated entity is able to exert significant
influence but which are not subsidiaries. A joint
venture is an arrangement that 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 share of the output arising from the joint
operation, and its expenses (including its share of
any expenses incurred jointly). Any goodwill or fair
value 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 in associates and joint
ventures 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.
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 operated assets are brought
to account by 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.
(iv) Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and
losses or income and expenses arising 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.
26
Notes to the Financial Statements
30 JUNE 2021
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Taxes
Income Tax- Income taxes are accounted for
using the comprehensive balance sheet liability
method whereby:
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 incurred is not recoverable from
the taxation authority. In these circumstances,
the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated with the
amount of GST included. The net amount of GST
recoverable from, or payable to, the ATO is
included as a current asset or liability in the
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 liabilities in the separate 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 in the 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.
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$).
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 from
restating foreign currency denominated monetary
27
Notes to the Financial Statements
30 JUNE 2021
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 are recognised in
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.
(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 lifetime expected
credit losses. These are the expected shortfalls in
contractual cash flows, considering the potential
for default at any point during the life of the
financial instrument. In calculating, the company
uses its historical experience, external indicators
and forward-looking information to calculate the
expected credit losses using a provision matrix.
(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.
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 in OCI. There 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.
(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
28
Notes to the Financial Statements
30 JUNE 2021
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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
impairment
indicators
exist,
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.
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.
(o) 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.
the expenditures are expected to be
recouped through successful development
and exploitation of the area of interest, or
alternatively, by its sale or partial sale: or
ii.
activities in the area of interest have not at
the reporting date, reached a stage which
permits a reasonable assessment of the
existence or otherwise of economically
recoverable
reserves
and
active
and
significant operations in, or in relation to, the
area of interest are continuing.
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.
29
Notes to the Financial Statements
30 JUNE 2021
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
iii. exploration for and evaluation of mineral
resources in the specific area have not led to
the discovery of commercially viable quantities
of mineral resources and the entity has
decided to discontinue such activities in the
specific area.
iv. sufficient data exist to indicate that, although a
development in the specific area is likely to
proceed,
the
carrying
amount
of
the
exploration and evaluation asset is unlikely to
be
recovered
in
full
from
successful
development or by sale
Proceeds from the sale of exploration permits or
recoupment of exploration costs from farmin
arrangements are credited against exploration
costs previously capitalised. Any excess of the
proceeds overs costs recouped are accounted for
as a gain on disposal.
(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).
Per Note 1(p), management exercises judgement
as to the whether exploration expenditure is
assessed for impairment. 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 the capitalised
expenditure is unlikely to be 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 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.
(r) Revenue
Revenue is recognised at the fair value of
consideration received or receivable. Amounts
disclosed as revenue are net of returns, trade
allowances and duties and taxes paid. The
following specific recognition criteria must also be
met before revenue is recognised:
Interest
Revenue is recognised as interest accrues using
the effective interest method. The effective
interest method uses the effective interest rate
which is the rate that exactly discounts the
estimated future cash receipts over the expected
life of the financial asset.
(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
30
Notes to the Financial Statements
30 JUNE 2021
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
dividend yield and the risk free interest rate for the
term of the option.
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-market vesting conditions are included in
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 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
liability measurement as well as for sundry
disclosures.
Fair values for financial instruments traded in
active markets are based on quoted market prices
at reporting date. The quoted market price for
financial assets is the current bid price 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.
The carrying value less impairment provision of
trade receivables and payables are assumed to
approximate their fair values due to their short-
term nature. The fair value of financial liabilities for
disclosure purposes is estimated by discounting
the future contractual cash flows at the current
market interest rate that is available to the
company for similar financial instruments.
(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.
31
Notes to the Financial Statements
30 June 2021
Consolidated
NOTE
2021
$
2020
$
NOTE 2 OTHER INCOME
Government grants – Covid
119,500
60,000
Sundry income – director related
16(ii)
239,370
197,990
Profit from sale of shares
12,258
-
Other sundry income
25,300
-
Total income
396,428
257,990
NOTE 3 EXPENSES
Audit fees
18
28,042
32,137
Consulting
80,200
76,635
Management fees
25,940
25,000
Reporting, registry and stock exchange
22,975
20,725
Office expenses
72,154
105,150
Other expenses
125,317
144,672
Project costs
-
-
Salaries
342,216
495,124
Total expenses
696,844
899,443
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.
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.
Reconciliation between tax benefit and pre-tax loss
Loss before tax
(300,198)
(5,264,733)
Income tax benefit using statutory income tax rate of
30%
(90,059)
(1,579,420)
Tax effect of adjustment recognised in the period for:
Prospectus costs
2,994
-
Tax losses not brought to account
105,479
208,354
Non-assessable income
(20,999)
(18,000)
Other non–deductible expenses
2,585
1,389,066
Income tax benefit
-
-
32
Notes to the Financial Statements
30 June 2021
Consolidated
NOTE
2021
$
2020
$
NOTE 4 INCOME TAX (CONTINUED)
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
5,925,986
6,222,548
Temporary differences
(1,486,779)
(1,456,481)
4,439,207
4,766,067
Franking credit balance:
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
700,033
481,358
Cash and cash equivalents are subject to interest rate risk as they earn floating rates. In the year to 30
June 2021 the average floating rate for the consolidated entity was 0.01% (2020: 0.05%). Details of
interest rate risk and sensitivity can be found in Note 17. At 30 June 2021 all bank deposits are at call.
NOTE 6 TRADE AND OTHER RECEIVABLES
Current
Other receivables
56,507
12,607
Director-related entities - other receivables
16(ii)
125,301
231,753
181,808
244,360
The carrying amount of all receivables is equal to their fair value as they are short term. At 30 June 2021
no receivables are impaired or past due. All receivables are non-interest bearing.
NOTE 7 PREPAYMENTS
Prepaid tenement rent
148,332
104,880
Balance at start for year
104,880
-
Prepaid tenement rent for the year
139,914
104,880
Transfer to exploration and evaluation assets (Note 9)
(96,462)
-
Balance at end for year
148,332
104,880
As at 30 June 2021 the company has seven tenement applications (2020: 6 applications). Five tenements
were granted during the year ended 30 June 2021 (2020: Nil). If the tenements are granted rent paid on
application will cover rent required on the first year of exploration in all tenements. If the tenements are
not granted the rent paid on application is fully refundable.
33
Notes to the Financial Statements
30 June 2021
Consolidated
NOTE
2021
$
2020
$
NOTE 8 OTHER FINANCIAL ASSETS (NON-CURRENT)
Financial Assets at fair value through other comprehensive income
Investment in director-related equities
8(a)(b)
-
30,081
At cost:
Shares in controlled entities
8(c)
-
1
-
30,082
(a) Director-related Entities:
Enegex Limited
Principal activity is exploration (Note 16)
-
30,081
(b) Reconciliation of the carrying amount of Financial
Assets at fair value through other comprehensive
income
Balance at beginning of year
30,081
17,695
Net revaluation increment (decrement
(30,081)
12,386
-
30,081
Details of market price risk and sensitivity can be found
in Note 17.
(c) Shares in Controlled Entities
United Oil & Gas Pty Ltd
-
1
The consolidated entity did not consolidate United Oil & Gas Pty Ltd on the grounds that balances were
not considered material.
NOTE 9 EXPLORATION AND EVALUATION ASSETS
Carrying amount at beginning of year
4,925,108
9,382,098
Impairment of exploration assets
-
(4,629,940)
Transfer from prepaid tenement rent (Note 7)
96,462
-
Cost incurred during the year
293,116
172,950
Carrying amount at end of year
5,314,686
4,925,108
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 following table:
34
Notes to the Financial Statements
30 June 2021
Consolidated
NOTE
2021
$
2020
$
NOTE 9 EXPLORATION AND EVALUATION ASSETS (Continued)
Tenements E38/3416, E38/3417, E38/3418, E38/3432 and E38/3433 were applied for pursuant to an
agreement with Mr Christopher Reindler. Under the terms of that agreement Octanex has earned a 65%
interest and elected to earn an 80% interest by satisfying specific exploration expenditures.
NOTE 10 TRADE AND OTHER PAYABLES
Financial liabilities at amortised cost
Current
Trade creditors and accruals
74,907
49,684
Director-related entities - other payables
16
90,816
53,058
165,723
102,742
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 17.
NOTE 11 PROVISIONS
Current
Annual Leave
27,485
17,597
Directors’ retirement benefit (1)
82,125
82,125
Long service leave
81,942
60,869
191,552
160,591
(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 29 years of service EG Albers has provided to the company.
30/06/2021
30/06/2020
Notes
Exploration Permits
WA-407-P
WA-407-P Offshore oil and gas permit
E38/3417
-
Minerals tenement granted 19/5/21
E38/3418
-
Minerals tenement granted 19/5/21
E38/3416
-
Minerals tenement granted 11/1/21
E38/3432
-
Minerals tenement granted 11/1/21
E38/3433
-
Minerals tenement granted 11/1/21
35
Notes to the Financial Statements
30 June 2021
NOTE 12 CONTRIBUTED EQUITY
Issued Capital
2021
2020
2021
2020
Shares
Shares
$
$
Ordinary shares fully paid (a)
257,823,840
242,823,840
68,867,927
68,867,927
Ordinary shares issued pursuant to
trustee stock scheme(b)
-
29,889,107
-
-
Balance at end of year
257,823,840
272,712,947
68,867,927
68,867,927
(a) Ordinary shares fully paid
Balance at beginning of year
242,823,840
242,823,840
68,867,927
68,867,927
Placement issue
15,000,000
-
750,000
-
Issue costs
-
-
(49,907)
-
Balance at end of year
257,823,840
242,823,840
69,568,020
68,867,927
(b) Ordinary Shares Issued Pursuant to Trustee Stock Scheme
Balance at beginning of year
29,889,107
29,889,107
-
-
Trustee shares cancelled
(29,889,107)
-
-
-
Balance at end of year r
-
29,889,107
-
-
In May 2021 the Company raised $750,000, before costs, through a placement to Professional and
Sophisticated investors. The Placement comprised the issue of 15,000,000 fully paid ordinary shares at
$0.05 (5 cents) per share and the grant of 7,500,000 unlisted options, exercisable at $0.075 (7.5 cents)
on or before 30 April 2023.
On 27 November 2020, the members of Octanex voted to cancel the trustee stock scheme shares.
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.
Unlisted Options
2021
2020
Unlisted Options
Balance at beginning of year
-
7,170,000
Options granted
11,500,000
-
Options expired
-
(7,170,000)
Balance at end of year
11,500,000
-
4,000,000 options were granted to a director in the year ended 30 June 2021. (2020: Nil options). The
balance of options, 7,500,000, were granted to shareholders who participated in the placement in May
2021.
36
Notes to the Financial Statements
30 June 2021
NOTE 12 CONTRIBUTED EQUITY (Continued)
Shared Based Payment
On 27 November 2020 4,000,000 options were granted to director R Clark. The 4,000,000 options were
valued using the Binomial Option Valuation model and the following inputs:
Exercise price:
2.0 cents
Share price at approval date:
1.95 cents
Maximum option life
3.0 years
Expected volatility
87%
Risk free interest rate
0.27%
Expected volatility was based on the average volatility of a peer group of eleven companies within the
junior minerals exploration industry. The implied volatility of the eleven companies was in the range of
67% to 105%. The fair value of this share based payment (for accounting) at grant date was $43,883.
The options vest over the service condition so a share based payment expense with a corresponding
increase in equity of $8,616 has been recognised for the year ended 30 June 2021.
NOTE 13 RESERVES
Consolidated
Reserves
NOTE
2021
$
2020
$
Financial assets at fair value through other
comprehensive income reserve
(760,837)
(817,455)
Option reserve
8,616
1,037,563
Carrying amount at end of year
(752,221)
220,108
Financial assets at fair value through other
comprehensive income reserve
Balance at beginning of financial year
(817,455)
(829,841)
Changes in fair value on financial assets at fair value
through other comprehensive income
80,882
17,694
Income tax on other comprehensive income
(24,264)
(5,308)
(760,837)
(817,455)
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 17.
Option reserve
Balance at beginning of financial year
1,037,563
1,037,563
Reclassification of expired options to accumulated
losses
(1,037,563)
-
Share based payment expense
8,616
-
8,616
1,037,563
The options reserve relates to share options granted to a director.
37
Notes to the Financial Statements
30 June 2021
NOTE 14 EXPLORATION AND EVALUATION EXPENDITURE COMMITMENTS
Consolidated
NOTE
2021
$
2020
$
The consolidated entity’s minimum work and/or minimum expenditure requirements in exploration permits
held by the consolidated entity at reporting date:
Payable not later than one year
635,500
202,500
Payable later than one year but not later than four years
3,500,000
-
4,135,500
202,500
Estimated expenditure, arising from exploration work programmes which, may, subject to negotiation
and approval, be varied. They may also be satisfied by farmout, sale, relinquishment or surrender.
NOTE 15 KEY MANAGEMENT PERSONNEL
Executive Director
Non-Executive Directors
RL Clark
EG Albers
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 director of the company. A summary of the remuneration report is shown below.
Short Term
Post Employment
Equity
Settled
Total
Directors
Fees
Salary
Superannuation
Retirement
Benefits
Options
$
$
$
$
$
$
TOTAL
2021
-
55,542
5,268
-
43,833
104,643
2020
-
210,120
19,961
-
-
230,081
38
Notes to the Financial Statements
30 June 2021
NOTE 16 RELATED PARTY DISCLOSURES
The consolidated financial statements of the Group include:
Name
2021
Interest
2020
Interest
Country of
Incorporation
United Oil & Gas Pty Ltd
100%
100%
Australia
Goldsborough Pty Ltd (1)
-
100%
Australia
Octanex Bonaparte Pty Ltd
100%
100%
Australia
Braveheart Energy Pty Ltd
100%
100%
Australia
Octanex Cornea Pty Ltd
100%
100%
Australia
Winchester Resources Pty Ltd (2)
100%
100%
Australia
Winchester Exploration Pty Ltd
100%
100%
Australia
Octanex Operations Pty Ltd
100%
100%
Australia
Strata Resources Pty Ltd
100%
100%
Australia
Octanex Exmouth Pty Ltd
100%
100%
Australia
(1) Goldsborough Pty Ltd was sold to Bass Strait Group Pty Ltd, a director-related entity of EG Albers,
for consideration of $1.00 pursuant to a Share Sale Agreement effective 16 December 2020 (Note 23).
(2) Winchester Resources Pty Ltd changed its name from Octanex Winchester Pty Ltd on 19 May 2021.
Director-related Entities
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:
Amounts paid
Payable at
Entity
Related
director
Service
2021
$
2020
$
30/06/21
$
30/06/20
$
Exoil Pty Ltd
EG Albers
Office services and
amenities in
Melbourne
72,154 105,016
38,789
23,908
Natural Resources
Group Pty Ltd
EG Albers
Management and
project services
41,500
26,500
41,500
29,150
Enegex Limited
EG Albers /
RL Clark
Geological services
9,570
-
10,527
-
123,224 131,516
90,816
53,058
39
Notes to the Financial Statement
30 June 2021
NOTE 16 RELATED PARTY DISCLOSURES (Continued)
(ii)Providers of Services to Related Party
During the year accounting and office administration services were provided under normal commercial
terms and conditions as disclosed below:
Sundry Revenue
Receivable at
Entity
Related director
2021
$
2020
$
30/06/21
$
30/06/20
$
Enegex Limited
Exoil Pty Ltd
EG Albers/RL Clark
EG Albers
76,845
12,650
27,465
22,275
43,824
2,904
27,465
22,275
Cue Petroleum Pty Ltd
EG Albers
3,190
10,230
726
10,230
Peako Limited
EG Albers/RL Clark
147,045
138,020
77,847 138,020
239,370
197,990
125,301 231,753
NOTE
2021
$
2020
$
NOTE 17 FINANCIAL INSTRUMENTS
Categories of Financial Instruments
Financial Assets
Cash & cash equivalents
700,033
481,358
At fair value through other comprehensive income
-
30,082
Trade and other receivables
181,808
244,360
881,842
755,800
Financial Liabilities
Financial Liabilities at amortised cost
Trade and other payables
165,723
102,742
Recognition and derecognition
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.
40
Notes to the Financial Statements
30 June 2021
NOTE 17 FINANCIAL INSTRUMENTS (Continued)
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 2021 and 30
June 2020 on a recurring basis are as follows:
30 June 2021
Level 1
Level 2
Level 3
Total
$
$
$
$
Assets
Listed securities and debentures
-
-
-
-
Liabilities
Derivative financial liability
-
-
-
-
Net fair value
-
-
-
-
30 June 2020
Level 1
Level 2
Level 3
Total
$
$
$
$
Assets
Listed securities and debentures
30,082
-
-
30,082
Liabilities
Derivative financial liability
-
-
-
-
Net fair value
30,082
-
-
30,082
Credit risk
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations. At 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.
41
Notes to the Financial Statements
30 June 2021
NOTE 17 FINANCIAL INSTRUMENTS (Continued)
Sensitivity Analysis
At reporting date a 1% (100 basis point) increase/decrease in the interest rate would increase/decrease
the consolidated entity loss by $4,900 (2020: $3,370).
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 2021
Non-derivative Financial Liabilities
Trade and other payables
165,723
165,723
165,723
-
-
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
-
-
Foreign currency risk
The consolidated entity is exposed to foreign currency risk arising from purchases of goods and services
that are denominated in a currency other than the Australian dollar functional currency. To this extent,
the consolidated entity is exposed to exchange rate fluctuations between the Australian and US dollar.
At 30 June 2021 the consolidated entity has a foreign currency exposure by holding US dollars in bank
accounts totalling US$63 (2020: $63).
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.
2021
$
2020
$
Financial Assets at fair value through other comprehensive income
Investments in listed equities
Enegex Limited
-
30,082
42
Notes to the Financial Statements
30 June 2021
NOTE 17 FINANCIAL INSTRUMENTS (Continued)
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 $nil (2020: $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 18 AUDITOR’S REMUNERATION
2021
$
2020
$
Amounts received or due and receivable by:
Grant Thornton Audit Pty Ltd - Auditor of the
consolidated entity and company
28,042
32,137
NOTE 19 SEGMENT INFORMATION
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.
NOTE 20 EVENTS AFTER THE END OF THE REPORTING PERIOD
Since the end of the financial year there has been no significant event.
43
Notes to the Financial Statement
30 June 2021
NOTE 21 LOSS PER SHARE
The following reflects the income and share data used in the calculations of basic and diluted earnings
per share:
2021
$
2020
$
Net loss
(300,198)
(5,264,733)
Number of
Shares
Number of
Shares
Weighted average number of shares
245,043,018
242,823,840
Despite having options on issue, basic and dilutive loss per share are the same as there is a loss position
and to include options would be anti-dilutive.
NOTE 22 PARENT ENTITY INFORMATION
The following details information related to the parent entity, Octanex Limited at 30 June 2021. 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
881,841
725,714
Non-current assets
18,071,958
17,566,361
Total assets
18,953,799
18,292,075
Current liabilities
310,060
258,033
Non-current liabilities
13,081,991
13,013,048
Total liabilities
13,392,051
13,271,081
Contributed equity
69,568,020
68,867,927
Options reserve
8,616
1,037,563
Financial assets at fair value through other comprehensive
income reserve
(639,113)
(639,113)
Accumulated losses
(63,375,775)
(64,245,383)
Total equity
5,561,748
5,020,994
Loss for the year
(167,955)
(5,303,498)
Other comprehensive income for the year
-
-
Total comprehensive income for the year
(167,955)
(5,303,498)
No dividends were paid by the parent entity in 2021 (2020: Nil).
NOTE 23 CONTINGENT ASSET
Goldsborough Pty Ltd was sold to Bass Strait Group Pty Ltd, a director-related entity of EG Albers
pursuant to a Share Sale Agreement effective 16 December 2020. Under the terms of the Share Sale
Agreement, Octanex will be entitled to contingent consideration in the event that proceeds are received
by Goldsborough in connection with a royalty, calculated pursuant to a proceeds sharing formula.
44
ASX Additional Information as at 22 September 2021
(unaudited)
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report
is set out below.
Ordinary share capital
All issued fully paid ordinary shares carry one vote per share
Based on the price per security, number of holders with an unmarketable holding: 1,088
Distribution of holders
Holding Ranges
Holders
Total Units
%
1 - 1,000
179
55,095
0.02%
1,001 - 5,000
625
1,586,891
0.61%
5,001 - 10,000
158
1,255,581
0.49%
10,001 - 100,000
416
15,252,015
5.89%
Over 100,000
134
240,828,104
92.99%
Totals
1,512
258,977,686
100.00%
Twenty largest shareholders
Holder Name
Holding
%
Sabah International Petroleum Ltd
40,332,663
15.57%
Gascorp Australia Pty Ltd
35,200,014
13.59%
Mr Ernest Geoffrey Albers & Mrs Pamela Joy Albers
25,868,034
9.99%
Mr Ernest Geoffrey Albers
17,297,794
6.68%
Sacrosanct Pty Ltd
14,436,081
5.57%
Great Missenden Holdings Pty Ltd
12,946,004
5.00%
National Gas Australia Pty Ltd
7,200,000
2.78%
Great Australia Corporation Pty Ltd
6,291,000
2.43%
Bass Strait Group Pty Ltd
6,059,049
2.34%
Cue Petroleum Pty Ltd
5,763,357
2.23%
The Albers Companies Incorporated P/L
3,780,491
1.46%
Australis Finance Pty Ltd
3,773,188
1.46%
Mrs Ermione Rimpas
3,700,000
1.43%
Mrs Pamela Joy Albers
3,062,500
1.18%
Bond Street Custodians Limited
2,819,512
1.09%
Great Missenden Group Pty Ltd
2,765,060
1.07%
Albers Family Custodian Pty Ltd
2,542,875
0.98%
Seaquest Petroleum Pty Ltd
2,248,000
0.87%
Wilstermere Corporation Pty Ltd
2,106,500
0.81%
Ram Platinum Pty Ltd
2,000,000
0.77%
Total
200,192,122
77.30%
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
155,435,574
60.29
Sabah International Petroleum
40,332,663
15.57
45
Unlisted Options (exercisable at $0.075 on or before 30 April 2023).
Distribution of option holders
Holding Ranges
Holders
Total Units
%
1 - 1,000
-
-
-
1,001 - 5,000
-
-
-
5,001 - 10,000
-
-
-
10,001 - 100,000
10
1,000,000
13.33%
Over 100,000
18
6,500,000
86.67%
Totals
28
7,500,000
100.00%
Other Unlisted Option Holders
One holder holds 4,000,000 unlisted options (exercisable at $0.0195 on or before 27 November 2023).
46