Star Phoenix Group Ltd
and Controlled Entities
Annual Report 2021
for the year ended
30 June 2021
ABN: 88 002 522 009
An electronic version of this report is available on the Company’s website
www.starphoenixgroup.com
Star Phoenix Group Ltd
Annual report ended 30 June 2021
1
Contents
Directors’ Report ............................................................................................................................. 3
Operational Review ........................................................................................................................ 6
Remuneration Report (Audited) ................................................................................................. 10
Auditor’s Independence Declaration ........................................................................................ 18
Consolidated Statement of Profit or Loss and other Comprehensive Income as at 30 June
2021………………………………………………………………………………………………………….19
Consolidated Statement of Financial Position as at 30 June 2021 ......................................... 20
Consolidated Statement of Changes in Equity as at 30 June 2021 ....................................... 21
Consolidated Statement of Cash Flows as at 30 June 2021 .................................................... 22
Notes to Consolidated Financial Statements ............................................................................ 23
Directors’ Declaration .................................................................................................................. 57
Independent Audit Report to the Members .............................................................................. 58
Additional Information .................................................................................................................. 61
Corporate Directory ..................................................................................................................... 63
Star Phoenix Group Ltd
Annual report ended 30 June 2021
2
Directors’ Report
The Directors of Star Phoenix Group Ltd (“SPG” or “the Company”) and the entities it
controls (together, the “Group”) present the financial report for the year ended 30 June
2021.
Directors
The names and details of the Company’s directors in office during the financial year and
until the date of this report are as follows. The directors were in office during the entire
period unless otherwise stated.
Name
Mr Zhiwei Gu
Mr Lubing Liu
Dr Mu Luo
Dr YuFeng Meng
Position
Executive Chairman
Executive Director, Chief Operating Officer
Non-Executive Director
Non-Executive Director (Ceased to be a director on 11
December 2020 as per the results of the votes on 2020
AGM)
Mr Zhiwei Gu: Executive Chairman
Qualifications:
Interest in shares and options:
LL.B, LL.M., MSc
5,489,793 ordinary shares
Directorships held in other
listed entities during the past
three years
None
Mr Gu is an experienced corporate lawyer, who has worked with numerous companies
seeking listings on various international stock markets, including the Toronto Stock
Exchange and the Hong Kong Stock Exchange. He is currently a partner of Dentons, one
of the largest global law firms. Mr Gu has participated in several venture capital and
private equity investment cases by various funds such as London Asia Fund, Warburg
Pincus, Korea Development Bank, China Venture Investment Co., and China Cinda
AMC. During his time with China National Gold Group Corp., Mr Gu was in charge of
mineral resources merger and acquisition activities. Mr Gu holds an LLB from Jilin
University in China, an LLM from Northeast University in China, and Master of Applied
Finance from Macquarie University in Australia. Mr Gu is a qualified lawyer and securities
practitioner in China.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
3
Mr Lubing Liu: Executive Director, Chief Operating Officer and Joint Company Secretary
Qualifications:
BSc
Interest in shares and options:
1,726,077 ordinary shares
Directorships held in other
listed entities during the past
three years
None
Mr Lubing Liu has 25 years of global experience in petroleum exploration, development,
production, joint venture operations and new ventures. Prior to joining the Company, Mr
Liu held various subsurface leader roles, including Chief Reservoir Engineer with Melbana
Energy Limited, Vice President of Exploration and Petroleum Technology with Sinopec
East Puffin Pty Ltd, and principal petroleum engineering leader roles with other
international exploration and production and energy service companies including
ConocoPhillips, CNOOC, Woodside, RPS and LR. Mr Liu is experienced in petroleum
engineering and has extensive IOR/EOR (waterflood inclusive) and gas cycling
experience having worked at the Xijiang24-3/30-2/24-1 oilfields, Liuhua 11-1 oilfield and
Penglai oilfield in China, the Chinguetti oilfield in Mauritania, Block 95 in Peru, Goodwyn
gas field, Thylacine & Geographe gas field and Longtom gas field in Australia. Mr Liu
holds a BSc in Petroleum Engineering from the Southwest Petroleum University, China. He
is a Member of the Society of Petroleum Engineers.
Dr Mu Luo: Non-Executive Director
Qualifications:
BSc, MSc, PhD
Interest in shares and options:
None
Directorships held in other
listed entities during the past
three years
None
Dr Luo is a senior oil and gas professional with over 35 years' experience working for leading
international E&P and oilfield services companies. He has worked on various giant
conventional and unconventional projects across all levels from research to operations.
He is currently a principal development geophysicist to Inpex Corporation, leading a multi-
billion Ichthys LNG project in Australia. Prior to that, he held principal roles with Sinopec Oil
and Gas, PGS, Japan Petroleum Exploration Company Limited, and Japan Oil, Gas and
Metals National Corporation. Dr Luo holds a PhD in Exploration Geophysics from the Curtin
University, Australia; MSc in Geophysics from the University of Queensland, Australia; and
BSc in Geophysics from the Petroleum University of China. He is a member of the Australian
Society of Exploration Geophysicists, the European Association of Geoscientists and
Engineers, and the Society of Exploration Geophysicists.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
4
Dr YuFeng Meng: Non-Executive Director (appointed 14 April 2020)
Qualifications:
BA, MBA, PhD
Interest in shares and options:
None
Directorships held in other
listed entities during the past
three years
None
Dr Meng’s career spans over 30 years across the USA, Australia, Hong Kong and China,
where she held various leadership, management and consulting roles in different sectors
including education, aircraft tyre logistics, waste management, real estate, equity
investment, banking and Free Trade Zone management and marketing. Dr Meng has
experience in the public sector, project management, and finance (particularly in the
Build-Operate-Transfer or Build-Own-Operate-Transfer project financing). More recently,
she organised numerous government trade delegations to promote bilateral business co-
operation between China and Australia. Dr Meng holds a PhD in Business Administration
from InterAmerican University and an MBA in Business Administration from Southern
California University. Dr Meng is a nominee of a shareholder, Beijing Sibo Investment
Management LP.
Company Secretary
The following persons held the position of company secretary during the financial year:
• Ms Evgenia Bezruchko (Resigned on 27 August 2021)
• Mr Lubing Liu (appointed 1 April 2020)
Ms Evgenia Bezruchko: Joint Company Secretary
BSc, MSc, MBA
Qualifications:
Interest in shares and options:
434,326 ordinary shares
Directorships held in other
listed entities during the past
three years
None
Ms Evgenia Bezruchko has 10 years experience in corporate development and capital
markets in natural resources sector. Prior to joining SPG in 2012, Evgenia worked in
corporate broking and equity sales for an independent merchant bank Brandon Hill
Capital (formerly Fox-Davies Capital Limited), covering a wide range of listed and private
oil & gas and mining companies. Evgenia holds a BSc in Pharmacology from the
University of Bristol, an MSc in Finance from the University of Westminster and an MBA from
the American InterContinental University.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
5
Results of operations
The Company’s loss for the year to 30 June 2021 was US$6,086,099 (FY2020: profit of
US$47,491,852). Loss for the year from continuing operations was US$1,863,582 (FY2020:
US$5,249,819 loss) and Loss for the year from discontinued operations was (US$4,831,074)
(FY2020: profit of US$53,191,671).
Dividends
No dividend was paid or declared by the Company during the year and up to the date
of this report.
Corporate structure
Star Phoenix Group Ltd is a company limited by shares, which is incorporated and
domiciled in Australia.
Nature of operations and principal activities
The principal activity of the Group during the financial year was oilfield services.
The Company's key focus remains on securing new opportunities to provide future growth
and value for the Company and its shareholders. Over the last year, the Company has
considered, reviewed and evaluated numerous projects and investment opportunities with
a view of securing attractive targets.
The Company is pleased to report that it is currently in advanced discussions on a selected
number of investment and joint venture opportunities and is focusing its efforts to progress
to the next stage. The Board believes these new opportunities would offer shareholders
exposure to significant plays in the energy sector and looks forward to sharing the details of
these potentially value enhancing opportunities should they progress to binding deals.
Operational Review
LandOcean litigation
The Company is claiming various sums that it believes are due to it from
LandOcean Energy Services Co. Ltd ("LandOcean") currently estimated above US$10
million. Despite its efforts, the Company was not able to reach an acceptable agreement
with LandOcean in relation to the outstanding sums. As a result, the Company and its
legal advisers have commenced preparation for arbitration proceedings against
LandOcean in the London Court of International Arbitration to recover the sums.
Later of this financial year, the company has started arbitration proceedings against
LandOcean.
Oilfield services
Following the sale, in the prior year, of the upstream business (RRTL) which was by far the
largest client of RRDSL, and given the continued challenging industry conditions, the
Company completed an organizational restructure of RRDSL in order to substantially
reduce overheads and the ongoing costs of the Group.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
6
The Company has also been actively marketing the rigs and equipment. As a result, the
Company sold four production rigs for a total sum of US$0.2 million. The Company
continues the sale process of the remaining four production and four drilling rigs.
The Company is also considering its options with regards to its interests in Indonesia.
Major Shareholding Notification
One of the Company's shareholders Thesolia Ltd which previously held 23,561,326
ordinary shares (15.62% shareholding) has completed an off-market sale of all of its shares
to another investor, Preceding Max Ltd (the "Investor"). As a result, the Investor will now
hold 23,561,326 ordinary shares (15.62% shareholding). There will be no change to the
capital structure of the Company following this change. The Investor was not a related
party to the Company.
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the Group during the
financial year, other than as set out in this report.
A special general meeting
A special general Meeting was held on 25 September 2020 after the Company received
two separate requests from two separate Shareholders, each of which holds at least 5% of
the votes that may be cast at a general meeting of the Company. The general meeting
was held to consider the following resolutions:
1. Removal of Director - Dr. YuFeng Meng;
2. Election of Director - Dr. Yang Chong Yi;
3. Election of Director - Mr. Paul Norris;
4. Election of Director - Mr. Omar C.S. Stanford IV;
5. Election of Director - Mr. Li Jun;
6. Removal of Director - Mr. Zhiwei (Kerry) Gu; and
7. Removal of Director - Mr. Lubing Liu.
The Company called, arranged and held the Meeting to consider all the resolutions
proposed pursuant to these requests and in accordance with the provisions of section
249D(5) of the Corporations Act. Following the Extraordinary General Meeting, only one
of the resolutions relating to the removal of Dr YuFeng Meng as a Director was duly
passed.
In accordance with the results of the votes on AGM, Dr YuFeng Meng ceased to be a
Non-Independent Non-Executive Director, effective 11 December 2020. Dr Meng’s
appointment was made pursuant to Beijing Sibo Investment Management LP ("Sibo")
contractual right to appoint up to three Non-Executive Directors to the Board of the
Company above 10% shareholding.
Likely developments and expected results of operations
The Company continues its search of new attractive acquisition opportunities to provide
future growth and value for the Company and its shareholders. The Company is also
seeking to complete the sale of its rigs and equipment in Trinidad to provide additional
cashflow and strengthen the Company’s financial position.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
7
Events after the reporting date
Arbitration commences against LandOcean
On 14 July 2021, the Company announced that its legal advisers Dentons UK and Middle
East LLP have now filed an arbitration request in the London Court of International
Arbitration, which officially marks commencement of arbitration proceedings against
LandOcean.
Pursuant to the Request, the Group is claiming various sums from LandOcean currently
estimated in excess of US$8.4 million. There are additional claims of US$1.8 million that fall
outside of the Request, and the Company is exploring options of bringing these claims
separately in the courts of Trinidad and Tobago. These sums are owed to the Group by
LandOcean pursuant to the sale and purchase agreement of Range Resources Trinidad
Limited. In accordance with the Australian Accounting Standards these amounts have not
been recognised in the financial statements as contingent assets.
Management changes
On 27 August 2021, the company announced that the Directors made a decision to
implement changes to the management team. As a result, a mutual agreement was
reached for Mr Theo Eleftheriades, the Chief Financial Officer and Ms Evgenia Bezruchko,
the Group Corporate Development Manager and Joint Company Secretary to cease their
employment in their current roles. The Board of Directors have approved the non-Board
appointment of Mr Harry Liu as Chief Financial Officer. All of the management changes
came into effect on 1 September 2021.
Director’s Salaries and payments
On 07 September 2021, the company announced that the Board of Directors has approved
delaying all directors' salaries and payments from 1 September 2021 subject to further
review at the beginning of 2022 in accordance with the cash position of the Company at
that particular time.
This has been taken as a cash conservation measure to preserve the Company's cash
reserves whilst it seeks the collection of the monies owed to it by LandOcean, as updated
in the Company's announcement of 14 July 2021.
Environmental regulations and performance
The Group’s operations are not regulated by any significant environmental regulation
under a law of the Commonwealth or of a state or territory.
The Directors have considered compliance with the National Greenhouse and Energy
Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and
energy use. The directors have assessed that there are no current reporting requirements,
but may be required to do so in the future.
Share options
As at 30 June 2021, the Company had no unissued ordinary shares of Star Phoenix under
option. During the year ended 30 June 2021 no ordinary shares of the Company were
issued on the exercise of options (2020: nil).
Star Phoenix Group Ltd
Annual report ended 30 June 2021
8
Indemnifying directors and officers
In accordance with the constitution, except where prohibited by the Corporations Act
2001, every director, principal executive officer and secretary of the Company shall be
indemnified out of the property of the Company against any liability incurred by him/her
in his/her capacity as director, principal executive officer or secretary of the Company or
any related corporation in respect of any act or omission whatsoever and howsoever
occurring or in defending any proceedings whether civil or criminal.
During the financial year, the Company has paid premiums of US$12,431 to insure the
Directors and Officers against certain liabilities arising out of the conduct of acting as an
officer of the Company. Under the terms and conditions of the insurance contract, the
nature of liabilities insured against and the premium paid cannot be disclosed.
Meetings of Directors
During the financial year, eight meetings of the board of directors were held.
Attendances by each director during the year were as follows:
Director
Zhiwei Gu
Lubing Liu
Mu Luo
YuFeng Meng (ceased to be a director on 11
December 2020)
Board Meetings
Eligible to attend
8
8
8
5
Attended
8
8
8
3
Proceedings on behalf of the company
No person has applied for leave of Court to bring proceedings on behalf of the Company
or to intervene in any proceedings to which the Company is a party for the purpose of
taking responsibility on behalf of the Company for all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
Corporate governance
In recognising the need for the highest standards of corporate behaviour and
accountability, the Board has adhered to the principles of sound corporate governance.
The Board of the Company and its subsidiaries are committed to achieving and
demonstrating robust corporate governance practices which are appropriate for the
Group’s size and stage of development and which facilitate the long-term performance
and sustainability of the Company as well as protecting and enhancing the interests of its
shareholders and other stakeholders.
During the year, the Directors adopted the UK's QCA Corporate Governance Code for
Small and Mid-Size Quoted Companies (the "QCA Code"), in replacement of the ASX's
Corporate Governance Council's Corporate Governance Principles and
Recommendations 3rd Edition, as the basis for its corporate governance. The Corporate
Governance Statement and Corporate Governance Plan are available on the
Company's website www.starphoenixgroup.com.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
9
Non-audit services
The total value of non-audit services provided by a related practice of BDO Audit (WA)
Pty Ltd in respect to the Company’s tax compliance is US$36,338 (2020: US$29,910).
The board of directors has considered the position and is satisfied that the provision of the
non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The directors are satisfied that the provision of
non-audit services by the auditor did not compromise the auditor independence
requirements of the Corporations Act 2001 for the following reasons:
1. all non-audit services have been reviewed by the Board to ensure they do not
impact the impartiality and objectivity of the auditor; and
2. none of the services undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants.
Remuneration Report (Audited)
Remuneration policy
The remuneration policy of Star Phoenix Group has been designed to align director and
executive objectives with shareholder and business objectives by providing a fixed
remuneration component and offering specific long-term incentives based on key
performance areas affecting the Group’s financial results. The Board of Star Phoenix
Group Limited believes the remuneration policy to be appropriate and effective in its
ability to attract and retain the best executives and directors to run and manage the
Group, as well as create alignment of goals between directors, executives and
shareholders.
The Board’s policy for determining the nature and amount of remuneration for Board
members and senior executives of the Company is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and
other senior executives, was developed and approved by the Board.
Non-executive directors, executive directors and senior executives receive a base salary
(which is based on factors such as length of service and experience), which is calculated
on a total cost basis and includes any FBT charges related to employee benefits including
motor vehicles, as well as employer contributions to superannuation funds where
applicable.
Executive and non-executive directors can be employed by the Company on a
consultancy basis on Board approval, with remuneration and terms stipulated in individual
consultancy agreements.
The Company does not currently have a Remuneration Committee. In its absence, the full
Board is responsible for the determination of the remuneration of Directors and senior
executives and ensuring that such remuneration is appropriate and not excessive. Where
considered necessary, the Board may engage a remuneration consultant to assist with
setting and reviewing the Company’s executive and non-executive remuneration policies
to ensure the Company attracts and retains executives and Directors who will create
value for shareholders. As the Company grows in size, it is planned that the Company will
Star Phoenix Group Ltd
Annual report ended 30 June 2021
10
establish a separate remuneration committee with its own remuneration committee
charter. No remuneration consultant has been used during the year.
The Board is also responsible for evaluating the performance of Directors and the senior
executives. It is envisaged that once the Company is of a sufficient size to establish a
Nomination Committee, that committee will be responsible for arranging the
performance evaluation of the Board, its committees, and individual Directors on behalf
of the Board. This evaluation will be based on specific criteria, including the business
performance of the Company and its subsidiaries, whether strategic objectives are being
achieved and the development of management and personnel. A formal performance
evaluation was not undertaken during the financial year; however the Company intends
to undertake such review during the following financial year.
All remuneration paid to directors and executives is valued at the cost to the Company
and expensed. Shares given to directors and executives are valued as the difference
between the market price of those shares and the amount paid by the director or
executive. Unlisted options are valued using the Black-Scholes methodology.
The Board policy is to remunerate non-executive directors at market rates for comparable
companies taking into consideration time, commitment, and level of responsibility. Fees
for non-executive directors are not linked to the performance of the Group. The directors
are not required to hold any shares in the Company under the Constitution of the
Company; however, to align directors’ interests with shareholder interests, the directors
are encouraged to hold shares in the Company.
Under the Company’s share trading policy, all employees and directors of the Company
and its related companies are prohibited from trading in the Company’s shares or other
securities if they are in possession of inside information.
The Board believes that it has implemented suitable practices and procedures that are
appropriate for an organisation of this size and maturity.
Cash preservation initiative
On November 2020, the company announced that the Executive Directors and senior
management of the Company have agreed to accept ordinary shares in the Company
("Shares") in lieu of the accrued salaries in order to preserve cash resources of the
Company during the current economic environment created by the impact of COVID-19
pandemic. This cash preservation initiative is resulted in total cash saving of US$201,652 to
the Company, and further align the interests of the Directors and key managers with the
interests of shareholders.
ISSUE OF SHARES TO DIRECTORS
Further to its shareholder approval received at the Annual General Meeting held on 11
December 2020, the Company issued 7,195,036 ordinary shares of the Company to
Executive Directors (the "Shares") on 4 January 2021 in lieu of the accrued salaries in order
to preserve cash resources of the Company during the current economic environment
created by the impact of COVID-19 pandemic.
These Shares were issued at a price of 1.68 pence on the day. A volume weighted average
price of Shares over the 30 trading days immediately preceding the date of issue was used
to extinguish the liability. The details of the issued Shares are as follows:
Star Phoenix Group Ltd
Annual report ended 30 June 2021
11
1. Mr Zhiwei Gu, Executive Chairman, was issued 5,468,959 Shares, for a subscription
value of US$125,000. Following this issue, Mr Gu's total holding in the Company's
shares will be 5,489,793 shares, representing 3.64% of the enlarged issued share
capital; and
2. Mr Lubing Liu, Executive Director and Chief Operating Officer, was issued 1,726,077
Shares, for a subscription value of US$39,452. Following this issue, Mr Liu's total
holding in the Company's shares will be 1,726,077 shares, representing 1.14% of the
enlarged issued share capital.
The Shares are subject to trading restrictions of 12 months from the date of issue. Full details
relating to the issue of Shares are available in the Notice of Meeting published on 13
November 2020.
Company performance, shareholder wealth and directors and
executive’s remuneration
No relationship exists between shareholder wealth, director and executive remuneration
and Company performance.
Key Management Personnel
Name
Position
Appointed/Resigned
Mr Zhiwei Gu
Executive Chairman
Appointed on 10 December 2018
Mr Lubing Liu
Executive Director, Chief
Operating Officer and Joint
Company Secretary
Appointed as an Executive
Director on 1 March 2018 and as
Joint Company Secretary 01 April
2020
Dr Mu Luo
Non-Executive Director
Dr YuFeng Meng
Non-Executive Director
Appointed 11 January 2019
Appointed 14 April 2020 and
Ceased 11 December 2020
Details of remuneration
The remuneration for the Key Management Personnel of the Group during the year was
as follows:
Short Term Benefits
2021
Cash
salary &
fees
Currency
US$
Directors & Officers
One-off
payment
Termination
benefits
US$
US$
Post-
employment
benefits
Super
annuation /
pensions
US$
Other
Fees (iv)
Total
US$
US$
Star Phoenix Group Ltd
Annual report ended 30 June 2021
12
Mr Gu (i)
Mr L Liu (ii)
Dr Luo
Dr Meng (iii)
Total
254,251
199,463
55,222
-
508,936
-
-
-
-
-
-
-
-
-
-
-
29,397
-
-
29,397
125,000
39,452
-
-
164,452
379,251
268,312
55,222
-
702,785
(i) Fees paid to Mr Gu comprised US$254,251 received in his capacity as Executive Chairman, and
5,468,959 ordinary shares, for a subscription value of US$125,000, were issued to him for additional
consulting work. During the year, no incentives were in place for Mr Gu.
(ii) Fees paid to Mr L Liu comprised US$29,397 superannuation contributions (part of the contributions
was for prior year) and salary of US$199,463 in his capacity as Chief Operating Officer and Trinidad
General Manager. Mr Liu was issued 1,726,077 shares, for a subscription value of US$39,452, for his
consulting work. During the year, no incentives were in place for Mr Liu.
(iii) Dr Meng did not receive any remuneration in the year.
(iv) Other fees were directors fees settled with the issue of shares. Please see notes above.
Short Term Benefits
2020
Cash
salary &
fees
Currency
US$
Directors & Officers
Mr Gu (i)
Mr L Liu (ii)
Dr Luo
Ms Wang (iv)
Dr Meng (iii)
Total
385,416
207,229
52,500
1,546
-
646,691
One-off
payment
Termination
benefits
US$
US$
531,250
222,255
-
-
-
753,505
-
-
-
-
-
-
Post-
employment
benefits
Super
annuation /
pensions
US$
Share
based
payments
Options
Total
US$
US$
-
29,054
-
-
-
29,054
-
-
-
-
-
-
916,666
458,538
52,500
1,546
-
1,429,250
(i) Fees paid to Mr Gu comprised US$30,000 received in his capacity as Executive Chairman,
US$25,000 in his role as Executive Director and US$330,416 for additional consulting work, as well as
one-off payments of US$531,250. Consulting fees were paid to Kegrace Consulting Limited, a
company owned by Mr Gu.
(ii) Fees paid to Mr L Liu comprised US$29,054 superannuation contributions, US$222,255 one-off
payments and salary of US$207,229 in his capacity as Chief Operating Officer and Trinidad General
Manager.
(iii) Dr Meng was appointed 14 April 2020. Dr Meng did not receive any remuneration in the year
(iv)Ms Wang resigned 22 July 2019
Equity instrument disclosures relating to Key Management
Personnel
Share-based payments (year ended 30 June 2021)
Star Phoenix Group Ltd
Annual report ended 30 June 2021
13
No options were issued to key management personnel. All existing options expired in the
financial year and there has not been an expense reversal.
Fully paid share holdings
The numbers of shares in the Company held during the financial year or at time of
resignation by Key Management Personnel of the Company, including their personally
related parties, are set out below.
2021
Mr Gu
Mr L Liu
Dr Luo
Dr Meng
Total:
Balance at
the start of
the year
20,834
-
-
-
20,834
Granted as
Compensation
Other
Changes
-
-
-
-
-
5,468,959
1,726,077
-
-
7,195,036
Balance at
the end of
the year
5,489,793
1,726,077
-
-
7,215,870
Balance
held
indirectly
-
-
-
-
-
Options held by Key Management Personnel
The numbers of options in the company held during the financial year or at time of
resignation by Key Management Personnel of the Company, including their personally
related parties, are set out below:
2021
Mr Gu
Mr L Liu
Dr Luo
Dr Meng
Total:
Balance at
the start of
the year
30,000,000
-
-
-
30,000,000
Granted as
Compensation
Other
Changes
-
-
-
-
-
(30,000,000)
-
-
-
(30,000,000)
Balance at
the end of
the year
-
-
-
-
-
Vested and
exercisable
-
-
-
-
-
Loans to Key Management Personnel
There were no loans made to directors of SPG and other Key Management Personnel of
the Group, including their personally related parties during the 2020 or 2021 financial
years.
Employment contracts of Directors and other Key Management
Personnel
On appointment, Executive Directors and Other Key Management Personnel enter into
an employment contract with the Company (or another company within the Group). This
contract sets out their duties, remuneration and other terms of employment. These
contracts may be terminated by either the Company or the employee as detailed below.
All non-executive directors are eligible to receive consulting fees for services provided to
the Company over and above the services expected from a non-executive director.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
14
Mr Zhiwei Gu as Executive Chairman
Executive Chairman contract (commenced 10 December 2018)
Contract date:
Base Payment:
Superannuation:
Notice period:
10 December 2018 to 29 February 2020
US$55,000 per annum
No superannuation entitlement
3 months
Payment in lieu of notice at Company option for
termination without cause
Termination benefits:
Consulting services:
Mr Gu provided additional executive and consulting
services over and above services rendered to the
Company at a rate of US$16,250 per month
Mr Zhiwei Gu as Executive Chairman
Executive Chairman contract
Contract start date:
Base Payment:
Superannuation:
Notice period:
Termination benefits:
Consulting services:
1 March 2020
US$55,000 per annum
No superannuation entitlement
6 months
Payment in lieu of notice at Company option for
termination without cause
Mr Gu provided additional executive and consulting
services over and above services rendered to the
Company at a rate of US$26,667 per month
Mr Lubing Liu as Chief Operating Officer, Trinidad General Manager and Executive
Director
Chief Operating Officer and Trinidad General Manger contract
Contract date:
Base Payment:
Superannuation:
Notice period:
Termination benefits:
1 March 2018 to 23 December 2019
US$140,110 per annum
10% of base
3 months
3 months’ salary
Mr Lubing Liu as Chief Operating Officer, Trinidad General Manager, Executive Director
and Joint Company Secretary (appointed as Joint Company Secretary on 1 April 2020)
Chief Operating Officer and Trinidad General Manager contract
Contract start date:
Base Payment:
Superannuation:
Notice period:
24 December 2019
US$236,712 per annum
US$22,488 per annum
6 months
Payment in lieu of notice at Company option for termination
without cause
Termination benefits:
Dr Mu Luo as Non-Executive Director (appointed 11 January 2019)
Non-Executive Director contract
Contract start date:
Base Payment:
11January 2019 (amended on 1 August 2019)
US$25,000 per annum (US$50,000 from 1 August 2019)
Star Phoenix Group Ltd
Annual report ended 30 June 2021
15
Superannuation:
Termination benefits:
No superannuation entitlement
None
Dr YuFeng Meng as Non-Executive Director (appointed 14 April 2020 and ceased on 11
December 2020)
Non-Executive Director, no remuneration
Contract start date:
Base Payment:
Superannuation:
Termination benefits:
N/A
N/A
N/A
N/A
Additional information
The earnings of the consolidated entity for the five years to 30 June 2021 are summarised
below:
Revenue
EBITDA
EBIT
(Loss)/profit
after income
tax
2021
$'000
99
(1,443)
(6,413)
2020
$'000
8,539
(19,073)
(20,542)
2019
$'000
12,357
(39,044)
(43,002)
2018
$'000
13,059
(6,000)
(10,951)
2017
$'000
8,435
(7,900)
(14,189)
(6,086)
47,942
(49,461)
(17,530)
(54,363)
The factors that are considered to affect total shareholders return ('TSR') are summarised
below:
Share price
at financial
year end
(US$)
Basic
earnings per
share (US$)
2021
$'000
2020
$'000
2019
$'000
2018
$'000
2017
$'000
0.0187
0.02
0.0004
0.002
0.004
(0.040)
0.397
(0.552)
(0.231)
(0.699)
Voting and comments made at the company’s 2020 Annual General
Meeting
Star Phoenix Group Ltd received 99.7% of “yes” votes on its remuneration report for the
2020 financial year. The Board believes that this reflects the conservative remuneration
practices of the company.
This is the end of the audited remuneration report.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
16
Auditor’s Independence Declaration
The auditor’s independence declaration, as required under Section 307C of the
Corporations Act 2001, for the year ended 30 June 2021 has been received and can be
found on the following page.
This report is signed in accordance with a resolution of the Board of Directors.
Zhiwei Gu: Chairman
22 December 2021
Star Phoenix Group Ltd
Annual report ended 30 June 2021
17
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF STAR PHOENIX
GROUP LTD
As lead auditor of Star Phoenix Group Ltd for the year ended 30 June 2021, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Star Phoenix Group Ltd and the entities it controlled during the period.
Ashleigh Woodley
Director
BDO Audit (WA) Pty Ltd
Perth
22 December 2021
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of
BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are
members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of
independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Consolidated Statement of Profit or Loss and
other Comprehensive Income for the year
ended 30 June 2021
The below consolidated statement of profit or loss and other comprehensive income should be
read in conjunction with the accompanying notes.
Revenue from continuing operations
Operating expenses
Depreciation, depletion and amortisation
Cost of sales
Gross loss
Other income and expenses from continuing operations
3
4b
3
4c
4d
Other income
Finance Income/(costs)
Foreign exchange gain
General and administration expenses
Impairment of assets
Loss before income tax expense from continuing
operations
Income tax credit/(expense)
Loss after income tax expense from continuing
operations
Gain/(loss) from discontinued operations, net of
tax
(Loss)/profit for the year attributable to equity
holders of Star Phoenix Group Limited
Other comprehensive income
Note
3
2021 (US$)
-
Consolidated
2020 (US$)
-
-
-
-
-
87,899
4,602
6,226
-
-
-
-
-
(2,810,225)
-
(1,809,084)
(3,930,281)
(153,225)
(14,336)
(1,863,582)
(6,754,842)
-
1,505,023
(1,863,582)
(5,249,819)
6
(4,222,517)
53,191,671
(6,086,099)
47,941,852
19c
11,322
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Other comprehensive (loss)/income for year, net
of tax
Total comprehensive (loss)/profit attributable to
equity holders of Star Phoenix Group Limited
Loss per share from continuing operations attributable to the ordinary equity holders of the Company:
Basic and diluted (loss) per share (cents per
share)
Earnings/(Loss) per share from attributable to the ordinary equity holders of the Company:
Basic and diluted earnings/(loss) per share (cents
per share)
(6,074,777)
48,518,529
576,677
576,677
(0.193)
(0.012)
(0.040)
11,322
0.397
9a
9a
Star Phoenix Group Ltd
Annual report ended 30 June 2021
19
Consolidated Statement of Financial Position
as at 30 June 2021
The below consolidated statement of financial position should be read in conjunction with the
accompanying notes.
Note
Consolidated
2021 (US$)
2020 (US$)
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Assets of disposal group classified as held for sale
Total current assets
Non-Current Assets
Right of use asset
Property, plant and equipment
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Liabilities directly associated with assets classified as
held for sale
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Total non-current liabilities
Total liabilities
Net assets/(liabilities)
Equity
Contributed equity
Reserves
Accumulated losses
Total equity/deficit
10
11
7a
12
14
15
7b
17
15
18
19
1,911,072
103,864
4,249,038
6,263,974
3,164,752
2,248,359
7,922,861
13,335,972
63,333
83,624
183,333
100,349
146,957
6,410,933
283,682
13,619,654
3,563,659
450,653
5,796,048
9,810,360
-
-
9,810,360
3,688,347
1,154,300
5,991,944
10,834,591
296,245
296,245
11,130,836
(3,399,429)
2,488,818
388,570,504
23,400,370
(415,370,303)
(3,399,429)
388,383,974
23,389,048
(409,284,204)
2,488,818
Star Phoenix Group Ltd
Annual report ended 30 June 2021
20
Consolidated Statement of Changes in
Equity for the year ended 30 June 2021
The below consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
Contributed
equity
Accumulated
losses
Note
Foreign
currency
translation
reserve
Share-based
payment
reserve
Option
premium
reserve
Non-
controlling
interests
Total equity
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
386,726,067
(457,226,056) 7,432,461
8,316,464
12,057,362 -
(42,693,702)
Balance at 1 July
2019
Other comprehensive
income
Loss attributable to
members of the
company
Gain/(Loss) from
discontinued
operations
Total comprehensive
loss for the year
19
Realisation of FCTR on
disposal of foreign
operation
Non-controlling
interests
Balance at 30 June
2020
Balance at 1 July
2020
Exchange difference
on translation of
foreign operations
Loss from continuing
operations of the
company
Profit/(loss) from
discontinued
operations
Total comprehensive
loss for the year
-
-
-
-
-
576,677
(5,249,819)
53,191,671
-
-
47,941,852
576,677
-
-
-
-
-
Transactions with owners in their capacity as owners:
Issue of share capital 18
1,657,907
-
-
-
-
-
-
(4,993,916) -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
576,677
(5,249,819)
53,191,671
48,518,529
1,657,907
(4,993,916)
-
388,383,974
(409,284,204) 3,015,222
8,316,464
12,057,362 -
2,488,818
388,383,974
(409,284,204) 3,015,222
8,316,464
12,057,362 -
2,488,818
-
-
-
-
-
11,322
(1,863,582)
(4,222,517)
-
-
(6,086,099)
11,322
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,322
(1,863,582)
(4,222,517)
(6,074,777)
186,530
Transactions with owners in their capacity as owners:
Issue of share capital 18
186,530
-
-
Balance at 30 June
2021
388,570,504
(415,370,303) 3,026,544
8,316,464
12,057,362 -
(3,399,429)
Star Phoenix Group Ltd
Annual report ended 30 June 2021
21
Consolidated Statement of Cash Flows for
the year ended 30 June 2021
The below consolidated statement of cashflows should be read in conjunction with the
accompanying notes.
Cash flows from operating activities
Receipts from customers
Other Receipts
Payments to suppliers and employees
Income taxes (paid)/received
Payment for exploration expenditure
Note
Consolidated
2021 (US$)
2020 (US$)
218,088
72,763
(1,841,025)
(90,795)
(175,448)
8,425,563
(3,892)
(9,485,806)
(248,673)
-
Net cash outflow from operating activities
22
(1,816,417)
(1,312,808)
Cash flows from investing activities
Payment for property, plant & equipment
Proceeds from disposal of property, plant and
equipment
Net cash inflow/(outflow) on disposal of subsidiary
Net cash inflow from investing activities
Cash flows from financing activities
Receipts from share issue
Interest and other finance income
Provision of short-term loan
Payments for principal element of leases
Proceeds received from related company
Net cash inflow from financing activities
-
330,065
-
330,065
-
191
-
-
277,328
277,519
(146,862)
40,507
1,666,481
1,560,126
1,657,907
(334,985)
(280,000)
-
1,042,922
Net (decrease)/increase in cash and cash
equivalents
Net foreign exchange differences
Cash and cash equivalents at beginning of
financial year
Cash and cash equivalents at end of financial year 10
(1,208,833)
1,290,240
(44,847)
26,691
3,164,752
1,847,821
1,911,072
3,164,752
Star Phoenix Group Ltd
Annual report ended 30 June 2021
22
Notes to Consolidated Financial Statements
Note 1: Significant accounting policies
These financial statements are general purpose financial statements that have been
prepared in accordance with Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001. Star Phoenix Group Ltd is a for-profit
entity for the purpose of preparing the financial statements.
The financial statements cover the Group consisting of Star Phoenix Group Ltd and its
controlled entities. Financial information for Star Phoenix Group Ltd as an individual entity
is disclosed in Note 25. Star Phoenix Group Ltd is a listed public company, incorporated
and domiciled in Australia.
The following is a summary of the material accounting policies adopted by the Group in
the preparation of the financial statements. The accounting policies have been
consistently applied, unless otherwise stated. The financial report was authorised for issue
by the Directors on 21 December 2021.
Basis of preparation
Historical cost convention
The financial statements have been prepared under the historical cost convention,
except for, where applicable, the revaluation of financial assets and liabilities at fair value
through profit or loss, financial assets at fair value through other comprehensive income,
certain classes of property, plant and equipment.
Compliance with IFRS
The financial statements of Star Phoenix Group Ltd also comply with International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB). The financial statements were approved by the Board of Directors on 21
December 2021.
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured
using the currency of the primary economic environment in which the entity operates (the
“Functional Currency”). The consolidated financial statements are presented in United
States Dollars (USD), which is Star Phoenix Group Ltd’s functional and presentation
currency.
Going concern
This report has been prepared on the going concern basis, which contemplates the
continuity of normal business activity and the realisation of assets and settlement of
liabilities in the normal course of business.
For the year ended 30 June 2021 the Group recorded a loss of US$6,086,099 (2020: a profit
of US$47,941,852), had net cash outflows of US$1,208,834 (2020: cash inflows of
US$1,290,240) and had a cash balance of US$1,911,072 (2020: cash balance of
US$3,164,752).
Star Phoenix Group Ltd
Annual report ended 30 June 2021
23
The ability of the Group to continue as a going concern is dependent on securing
additional funding through the issue of shares and/or debt to fund its activities as well as
favourable outcomes being reached with the relevant taxation authorities.
These conditions indicate a material uncertainty that may cast a significant doubt about
the Group’s ability to continue as a going concern and, therefore, it may be unable to
realise its assets and discharge its liabilities in the normal course of business.
The Company is currently seeking other opportunities to expand its operations in other
geographic locations and a successful investment in a new project can be used to raise
additional capital and subsequently generate positive cash flows. The Company is also
focusing on managing its existing cash reserves.
Management believe there are sufficient funds to meet the Group’s working capital
requirements as at the date of this report. The Company is currently seeking other
opportunities to further expand its operations in other geographic locations.
Should the Company not be able to continue as a going concern, it may be required to
realise its assets and discharge its liabilities other than in the ordinary course of business,
and at amounts that differ from those stated in the financial statements. The financial
report does not include any adjustments relating to the recoverability and classification of
recorded asset amounts or liabilities that might be necessary should the Company not
continue as a going concern.
(a) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all
subsidiaries of Star Phoenix Group Ltd (“Parent Entity” or “Company”) as at 30 June 2021
and the results of all subsidiaries for the year then ended. Star Phoenix Group Ltd and its
subsidiaries together are referred to as the “Group”.
Subsidiaries are all those entities (including special purpose entities) over which the Group
has control. The Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its investment with the entity and has the ability to affect those
returns through its power to direct the activities of the entity.
Where controlled entities have entered or left the Group during the year, their operating
results have been included/excluded from the date control was obtained or until the
date control ceased. A list of controlled entities is contained in Note 13 to the financial
statements. All controlled entities have a 30 June financial year-end.
All inter-company balances and transactions between entities in the Group, including any
unrealised profits or losses have been eliminated on consolidation. Accounting policies of
subsidiaries have been changed where necessary to ensure consistencies with those
policies applied by the Group.
Associates are all entities over which the Group has significant influence but not control or
joint control, generally accompanying a shareholding of between 20-50% of the voting
rights. Investments in associates are accounted for in the consolidated financial
statements using the equity method of accounting, after initially being recognised at cost.
(b) Income tax
The charge for current income tax expense is based on the profit for the year adjusted for
any non-assessable or disallowed items. It is calculated using tax rates that have been
enacted or are substantively enacted by the reporting date within each jurisdiction.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
24
Deferred tax is accounted for using the liability method in respect of temporary
differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements. No deferred income tax will be recognised from the
initial recognition of an asset or liability, excluding a business combination, where there is
no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled. Deferred tax is credited in profit or loss except
where it relates to items that may be credited directly to equity, in which case the
deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax
profits will be available against which deductible temporary differences can be utilised.
Deferred tax liabilities and assets are not recognised for temporary differences between
the carrying amount and tax bases of investments in foreign operations where the
company is able to control the timing of the reversal of the temporary differences and it is
probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to
offset current tax assets and liabilities and when the deferred tax balances relate to the
same taxation authority. Current tax assets and liabilities are offset where the entity has a
legally enforceable right to offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates
to items recognised in other comprehensive income or directly in equity. In this case, the
tax is also recognised in other comprehensive income or directly in equity, respectively.
The amount of benefits brought to account or which may be realised in the future is
based on the assumption that no adverse change will occur in income taxation legislation
and the anticipation that the Group will derive sufficient future assessable income to
enable the benefit to be realised and comply with the conditions of deductibility imposed
by the law.
(c) Property, plant and equipment
Owned assets
Plant and equipment are measured on the historical cost basis less accumulated
depreciation and impairment losses.
The cost of fixed assets constructed within the Group includes the cost of materials, direct
labour, borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. All
other repairs and maintenance are charged to profit or loss during the financial period in
which they are incurred.
Depreciation
The depreciable amount of all fixed assets including capitalised lease assets is
depreciated on a straight-line basis over their useful lives to the Group commencing from
the time the asset is held ready for use. Leasehold improvements are depreciated over
Star Phoenix Group Ltd
Annual report ended 30 June 2021
25
the shorter of either the unexpired period of the lease or the estimated useful lives of the
improvements.
The depreciation rates used for each class of depreciable asset are:
Class of fixed Asset
Plant & equipment
Production equipment
Motor vehicles, furniture & fixtures
Leasehold improvements
Depreciation Rate
11.25% - 33%
10 - 20%
25 - 33%
10 - 12.50%
The residual values of the assets and their useful lives are reviewed and adjusted if
appropriate at each reporting date.
The carrying amount of plant and equipment is reviewed annually by the directors to
ensure it is not in excess of the recoverable amount from these assets. The recoverable
amount is assessed on the basis of the expected net cash flows which will be received
from the employment of the assets and subsequent disposal. The expected net cash flows
have been discounted to their present values in determining recoverable amounts.
The carrying amount of the asset is written down to its recoverable amount if its carrying
amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying
amount. These gains or losses are included in profit or loss. When revalued assets are sold,
amounts included in the revaluation reserve relating to that asset are transferred to
accumulated losses.
(d) Exploration and evaluation expenditure and the recognition of assets
Acquisition costs for exploration and evaluation projects are accumulated in respect of
each identifiable area of interest. These costs are only carried forward to the extent that
they are expected to be recouped through the successful development of the area or
where activities in the area have not yet reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in
the year in which the decision to abandon the area is made.
A regular review is undertaken of each area of interest to determine the appropriateness
of continuing to carry forward costs in relation to that area of interest.
The recoverability of the carrying amount of the exploration and evaluation assets is
dependent on the successful development and commercial exploitation, or alternatively,
sale of the respective areas of interest.
The carrying values of expenditures carried forward are reviewed for impairment at each
reporting date when the facts, events or changes in circumstances indicate that the
carrying value may be impaired.
Accumulated expenditures are written off to profit or loss to the extent to which they are
considered to be impaired.
The group applies AASB 6 Exploration and Evaluation of Mineral Resources which is
equivalent to IFRS 6. The carrying value of exploration and evaluation expenditure is
historical cost less impairment.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
26
(e) Financial instruments
The Group’s financial instruments include cash and cash equivalents and trade and other
receivables.
A financial asset shall be measured at amortised cost if it is held within a business model
whose objective is to hold assets in order to collect contractual cash flows which arise on
specified dates and that are solely principal and interest.
A debt investment shall be measured at fair value through other comprehensive income if
it is held within a business model whose objective is to both hold assets in order to collect
contractual cash flows which arise on specified dates that are solely principal and interest
as well as selling the asset on the basis of its fair value.
All other financial assets are classified and measured at fair value through profit or loss
unless the entity makes an irrevocable election on initial recognition to present gains and
losses on equity instruments (that are not held-for-trading or contingent consideration
recognised in a business combination) in other comprehensive income ('OCI').
Despite these requirements, a financial asset may be irrevocably designated as measured
at fair value through profit or loss to reduce the effect of, or eliminate, an accounting
mismatch. For financial liabilities designated at fair value through profit or loss, the
standard requires the portion of the change in fair value that relates to the entity's own
credit risk to be presented in OCI (unless it would create an accounting mismatch).
Simpler hedge accounting requirements are intended to more closely align the
accounting treatment with the risk management activities of the entity. Impairment
requirements use an 'expected credit loss' ('ECL') model to recognise an allowance.
Impairment is measured using a 12-month ECL method unless the credit risk on a financial
instrument has increased significantly since initial recognition in which case the lifetime
ECL method is adopted. For receivables, a simplified approach to measuring expected
credit losses using a lifetime expected loss allowance is available.
(f) Foreign currency transactions and balances
Functional and presentation currency
The functional currency of each entity within the Group is determined using the currency
of the primary economic environment in which that entity operates.
Transaction and balances
Foreign currency transactions are translated into the functional currency using the
exchange rates prevailing at the date of the transaction. Foreign currency monetary
items are translated at the year-end exchange rate. Non-monetary items measured at
historical cost continue to be carried at the exchange rate at the date of the transaction.
Non-monetary items measured at fair value are reported at the exchange rate at the
date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised
in profit or loss
Exchange differences arising on the translation of non-monetary items are recognised
directly in equity to the extent that the gain or loss is directly recognised in equity;
otherwise the exchange difference is recognised in profit or loss.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
27
(h) Provisions
Provisions for legal claims, service warranties and make good obligations are recognised
when the Group has a present legal or constructive obligation as a result of past events, it
is probable that an outflow of resources will be required to settle the obligation and the
amount has been reliably estimated. Provisions are not recognised for future operating
losses.
Where there are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as a whole. A
provision is recognised even if the likelihood of an outflow with respect to any one item
included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the
expenditure required to settle the present obligation at the reporting date. The discount
rate used to determine the present value reflects the current market assessments of the
time value of money and the risk specific to the liability. The increase in the provision due
to the passage of time is recognised as interest expense.
(i) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other
short-term highly liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to insignificant risk of
changes in value, and bank overdrafts. Bank overdrafts are shown within short-term
borrowings in current liabilities on the statement of financial position.
(j) Trade receivables
Trade receivables are initially recognised at fair value and subsequently measured at
amortised cost using the effective interest method, less any allowance for expected
credit losses. Trade receivables are generally due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected
credit losses, which uses a lifetime expected loss allowance. To measure the expected
credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected
credit losses.
(k) Revenue recognition
Revenue is recognised at an amount that reflects the consideration to which the
consolidated entity is expected to be entitled in exchange for transferring goods or
services to a customer. For each contract with a customer, the Group identifies the
contract with a customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates of variable
consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of
each distinct good or service to be delivered; and recognises revenue when or as each
performance obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised.
Revenue from a contract to provide services is recognised over time as the services are
rendered based on either a fixed price or an hourly rate.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
28
Revenue from the sale of oil and gas and related products was recognised when the
Group had transferred to the buyer control of the product. In the case of oil, this usually
occurs at the time of lifting. Other revenue is recognised when control has passed.
(l) 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 Australian Tax Office. In these
circumstances the GST is recognised as part of the cost of acquisition of the asset or as
part of an item of the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the consolidated statement of cash flows on a gross basis,
except for the GST component of investing and financing activities, which are disclosed
as operating cash flows.
(m) Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to
conform to changes in presentation for the current financial year.
(n) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition
and measurement for disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded
derivatives, and trading and available-for-sale securities) is based on quoted market
prices at the reporting date. The quoted market price used for financial assets held by
the Group is the current bid price.
The fair value of financial instruments that are not traded in an active market (for example
over-the-counter derivatives) is determined using valuation techniques. The Group uses a
variety of methods and makes assumptions that are based on market conditions existing
at each reporting date.
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 follows at the current market interest rate that is available to the Group
for similar financial instruments.
(o) Investments in associates
Investments in associates are accounted for using the equity method of accounting in the
consolidated financial statements.
Under the equity method, the investment in the associate is carried in the consolidated
statement of financial position at cost plus post-acquisition changes in the Group’s share
of net assets of the associate.
After application of the equity method, the Group determines whether it is necessary to
recognise any additional impairment loss with respect to the Group’s net investment in
the associate.
The Group's share of the associate post-acquisition profits or losses is recognised in the
statement of profit or loss and other comprehensive income. The cumulative post-
Star Phoenix Group Ltd
Annual report ended 30 June 2021
29
acquisition movements are adjusted against the carrying amount of the investment.
When the Group's share of losses in the associate equals or exceeds its interest in the
associate, including any unsecured long-term receivables and loans, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of
the associate.
The reporting dates of the associate and the Group are identical and the associate’s
accounting policies conform to those used by the Group for like transactions and events
in similar circumstances.
(p) Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to
the end of financial year which are unpaid. The amounts are unsecured and are usually
paid within 30 days of recognition unless alternative terms are agreed.
(q) Dividends
Provision is made for the amount of any dividend declared, being appropriately
authorised and no longer at the discretion of the entity, on or before the end of the
financial year but not distributed at reporting date.
(r) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of new shares or options are shown in equity as a deduction, net of tax, from the
proceeds.
(s) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to equity
holders of the Company, excluding any costs of servicing equity other than ordinary
shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings
per share to take into account the after income tax effect of interest and other financing
costs associated with dilutive potential ordinary shares.
(t) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting to the
chief operating decision maker. The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating segments, has been
identified as the Chief Executive Officer.
(u) Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be impaired. Other assets are tested
Star Phoenix Group Ltd
Annual report ended 30 June 2021
30
for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which they
are separately identifiable cash inflows which are largely independent of the cash inflows
from other assets or groups of assets (cash-generating units). Non-financial assets other
than goodwill that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
(v) Share-based payments
The fair value of options granted is recognised as an expense with a corresponding
increase in equity. The total amount to be expensed is determined by reference to the
fair value of the options granted, which includes any market performance conditions and
the impact of any non-vesting conditions but excludes the impact of any service and
non-market performance vesting conditions.
(w) Employee benefits
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits are recognised in
current liabilities in respect of employees’ services up to the reporting date and are
measured at the amounts expected to be paid when the liabilities are settled.
Long service benefit
The liability for long service benefit is recognised in current and non-current liabilities,
depending on the unconditional right to defer settlement of the liability for at least 12
months after the reporting date. The liability is measured as the present value of
expected future payments to be made in respect of services provided by employees up
to the reporting date using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods
of service.
(x) Leases
Except for short-term leases and leases of low-value assets, right-of-use assets and
corresponding lease liabilities are recognised in the statement of financial position.
Straight-line operating lease expense recognition is replaced with a depreciation charge
for the right-of-use assets (included in operating costs) and an interest expense on the
recognised lease liabilities (included in finance costs). In the earlier periods of the lease,
the expenses associated with the lease under AASB 16 will be higher when compared to
lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax,
Depreciation and Amortisation) results improve as the operating expense is now replaced
by interest expense and depreciation in profit or loss. For classification within the
statement of cash flows, the interest portion is disclosed in operating activities and the
principal portion of the lease payments are separately disclosed in financing activities.
(y) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration
received, net of transaction costs. They are subsequently measured at amortised cost
using the effective interest method.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
31
Where there is an unconditional right to defer settlement of the liability for at least 12
months after the reporting date, the loans or borrowings are classified as non-current.
(z) Inventories
Inventories include consumable supplies and maintenance spares and are valued at the
lower of cost and net realisable value. Cost is determined on a weighted average basis
and includes direct costs and an appropriate portion of fixed and variable production
overheads where applicable. Inventories determined to be obsolete or damaged are
written down to net realisable value, being the estimated selling price less selling costs.
The directors evaluate estimates and judgements incorporated into the financial
statements based on historical knowledge and best available current information.
Estimates assume a reasonable expectation of future events and are based on current
trends and economic data, obtained both externally and within the Group. Areas
involving a higher degree of judgement or complexity, or areas where estimations and
assumptions are significant to the financial statements are disclosed here.
(aa) Non-current assets classified as held for sale and discontinued operations
Non-current assets are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. They are
measured at the lower of their carrying amount and fair value less costs to sell. For non-
current assets to be classified as held for sale, they must be available for immediate sale in
their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-
current assets to fair value less costs to sell. A gain is recognised for any subsequent
increases in fair value less costs to sell of a non-current asset, but not in excess of any
cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for
sale. Interest and other expenses attributable to the liabilities of assets held for sale
continue to be recognised.
Non-current assets classified as held for sale are presented separately on the face of the
consolidated statement of financial position, in current assets. The liabilities of disposal
groups classified as held for sale are presented separately on the face of the statement of
financial position, in current liabilities.
Discontinued operations
A discontinued operation is a component of the Group’s business, the operations and
cash flows of which can be clearly distinguished from the rest of the Group and which:
represents a separate major line of business or geographical area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business
or geographical are of operations; and
is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when the
operation meets the criteria to be classified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative
consolidated statement of profit or loss and other comprehensive income is re-presented
as if the operation had been discontinued from the start of the comparative year.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
32
(bb) Right-of-use asset
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use
asset is measured at cost, which comprises the initial amount of the lease liability,
adjusted for, as applicable, any lease payments made at or before the commencement
date net of any lease incentives received, any initial direct costs incurred, and, except
where included in the cost of inventories, an estimate of costs expected to be incurred for
dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the
lease or the estimated useful life of the asset, whichever is the shorter. Where the Group
expects to obtain ownership of the leased asset at the end of the lease term, the
depreciation is over its estimated useful life. Right-of use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
Note 2: Significant estimates and judgements
Impairment of rigs and related equipment
The Company sold four production rigs for a total gain of US$83,543. The Company
continues the sale process of the remaining four production and four drilling rigs.
Impairment was calculated on an individual rig basis base on best information available.
The recoverable amount of these assets was estimated based on an indicative
conditional offer received minus any significant costs involved in selling of the assets.
For the rest of workover/swabbing rigs, based on rigs sold to date the evidence suggests
that a lower impairment percentage should apply. However, Management is of the opinion
that given that negotiations for those are still at a premature stage, the same impairment
percentage should apply.
Classification of assets held for sale
In accordance with AASB 5 Assets held for sale and discontinued operations, an entity shall
classify a non-current assets as held for sale if its carrying amount will be recovered
principally through a sale transaction rather than through continuing use. For this to be the
case, the asset must be available for immediate sale in its present condition and that the
sale must be highly probable. AASB 5 notes that the sale should be expected to qualify as
a completed sale within 12 months from the date of classification.
Management note that the sales process has extended beyond the 12 months as a result
of the impact of COVID-19 and the travel restrictions imposed by various governments
meaning that potential vendors have not been able to physically inspect the relevant
assets and that as a result the sales process has lasted longer than 12 months.
Management have judged that the impact of COVID-19 meets the criteria noted in AASB
5 regarding delays caused by events or circumstances beyond management’s control and
that they remain committed to completing the sales process as soon as practicable.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-
19) pandemic has had, or may have, on the Group based on known information. This
consideration extends to the nature of services offered, customers, supply chain, staffing
and geographic regions in which the Group operates. Other than as addressed in specific
notes, there does not currently appear to be either any significant impact upon the
financial statements or any significant uncertainties with respect to events or conditions
Star Phoenix Group Ltd
Annual report ended 30 June 2021
33
which may impact the consolidated entity unfavourably as at the reporting date or
subsequently as a result of the Coronavirus (COVID-19) pandemic.
Accounting for Strait Oil & Gas Limited
Range owns 65% of the issued share capital of Strait Oil & Gas Limited (“SOG”). This is
achieved by interest through a 45% shareholding held by Range itself plus a 20%
shareholding through its full ownership of Georgian Oil Pty Ltd. Despite owning a majority
of the issued share capital, management do not view this as control and the principal
rationale for that view is as follows:
1. Range has no appointed directors of SOG so exercises no effective control over
the company. The sole director of SOG is a different corporate entity;
2. All shareholders must agree to any termination of the management agreement
which governs the role of the appointed director;
3. The Articles of Association of SOG are silent on the ability of shareholders to
appoint directors. To appoint a director, management believe that the articles
would need to be amended. To amend the articles requires a special resolution
which needs 75% votes (Range only controls 65%) and management do not
believe they would get support from the other shareholders to do this;
In practice all decision making and corporate activities require consent of all the
shareholders resulting in Range have no demonstrable control over SOG.
ll previous costs incurred by Range in relation to SOG have been impaired and the
Company will continue to expense any ongoing expenses which are incurred.
Note 3: Revenue
From discontinued operations
Revenue from services to third parties
recognised over time
Note
Consolidated
2021 (US$)
2020 (US$)
129,928
1,320,785
Total revenue from discontinued operations
129,928
1,320,785
Other income from continuing operations
Foreign exchange gain
Government grant
Other income
Total other income
Other income from discontinued operations
Other income
Total other income from discontinued
operations
6,226
72,763
15,136
87,899
-
-
-
-
450,089
1,158,624
450,089
1,158,624
Revenue from third party services and sale of oil is solely generated in the Republic of
Trinidad and Tobago.
Government grant relates to “cash flow boost” which is a support from the Australian
government to eligible entities during the period associated with COVID-19.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
34
Other income from continuing operations relates to gain on settlement of employee
liabilities.
Other income from discontinued operations relates to gain from disposal of assets and oil
field services.
Note 4: Expenses
Note
Consolidated
2021 (US$)
2020 (US$)
a: Cost of sales – continuing operations
Costs of operations
Depreciation and amortisation
Total cost of sales from continuing
operations
a: Cost of sales – discontinued operations
Costs of production
Staff Costs
Depreciation and amortisation
Impairment of Receivables
Impairment of Rigs and related equipment
Total cost of sales from discontinued
operations
5
-
-
-
-
-
-
45,794
254,598
-
1,615,572
3,437,053
2,209,161
-
368,069
-
15,671,514
5,353,017
18,248,744
b: Finance costs – continuing operations
Foreign exchange loss /(Gain)
Interest (income)/expense
Interest on convertible note
Total finance costs from continuing
operations
b: Finance (income)/costs – discontinued operations
Interest expense
Foreign exchange (gain)/loss
Total finance (income)/costs from
discontinued operations
-
(4,602)
-
(4,602)
-
275,309
275,309
c: General and administration expenses – continuing operations
Directors’ and officers’ fees and benefits
702,785
Legal fees
102,872
Business development, financial and other
consulting fees
361,066
(44,605)
2,854,830
-
2,810,225
-
-
-
1,429,250
361,042
1,336,145
246,028
557,816
Listing fees
Other expenses
Total general and administration expenses
from continuing operations
d: Asset values written down- continuing operations
Impairment of assets
Total Assets written down
11
146,216
496,145
1,809,084
3,930,281
153,225
153,225
14,336
14,336
Star Phoenix Group Ltd
Annual report ended 30 June 2021
35
Note 5: Impairment of non-current assets held for sale
During the year ended 30 June 2021, there has been a continued deterioration in the
operating and economic performance of the Group, which created an impairment
indicator of the assets included in this amount. The Directors have undertaken an
impairment assessment as at 30 June 2021 and have estimated the recoverable amount
of these assets based on sales prices achieved for four specific rigs. As a result, an
impairment of US$3,437,053 was recorded in relation to the rigs and related equipment.
Refer to Impairment of rigs and related equipment in Note 4 and note 7a.
Note 6: Discontinued operations
In the prior year financial statements, discontinued operations presented related only the
results of Range Resources Trinidad Limited (“RRTL”) following the disposal of that entity on
31 March 2020. In the current reporting period, the company has classified its remaining
business in Trinidad as discontinued. Therefore, the first table below presents the
information relating only to RRTL as presented in the 2020 financial report. The second
table presents the financial information for the remainder of the group’s operations in
Trinidad.
The financial performance and cash flows of RRTL is shown below.
Note
Revenue from sale of oil
Operating expenses
Royalities
Staff costs
Repairs and maintenance
Utilities
Administrative expenses
Impairment reversal/(expense)
Finance income/(expense)
Loss on disposal of assets
Land fees
Withholding tax charge
Gain on disposal of subsidiary (RRTL)
Taxation (charge)/benefits
Gain from discontinued operations
Net cash (outflow)/inflow from operating
activities
Net cash outflow from investing activities
Net cash inflow from financing activities
Net cash (decrease)/increase in cash
generated by the subsidiary
Consolidated
2021 (US$)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2020 (US$)
7,217,906
(656,528)
(2,629,896)
(302,941)
(140,537)
(314,962)
(580,794)
51,320,529
360,115
(206,927)
(525,647)
(3,107,646)
36,087,762
(15,254,197)
71,266,237
2,219,789
1,666,481
-
3,886,270
Star Phoenix Group Ltd
Annual report ended 30 June 2021
36
The financial performance and cash flows of the remaining Trinidad operations are shown
below.
Note
3
4a
4a
Revenue from third party services
Other income
Operating expenses
Depreciation, depletion and amortisation
Staff costs
Administrative expenses
Insurance expense
Impairment of Rigs and related equipment 7a
Impairment of Receivables
Finance income/(expense)
Legal fees
Gain from disposal of assets
Taxation benefit
Loss from discontinued operations
Net cash (outflow)/inflow from operating
activities
Net cash Inflow/(outflow) from investing
activities
Net cash inflow from financing activities
Net cash (decrease)/increase in cash
generated by the subsidiary
Consolidated
2021 (US$)
129,928
450,089
(45,794)
-
(254,598)
(86,052)
(57,990)
(3,437,053)
(1,615,572)
275,309
(272,884)
83,543
608,557
2020 (US$)
1,320,785
1,158,624
(2,209,161)
(368,069)
-
(357,347)
-
(15,671,514)
-
(1,947,884)
-
-
-
(4,222,517)
(18,074,566)
(746,051)
1,997,667
154,617
(2,455,944)
277,328
-
(314,106)
(458,277)
Current period discontinued operations relate to Range Resources Drilling Service Ltd.
Gain/(loss) from discontinued operations, net of tax
Gain/(loss) from RRTL
Gain/(loss) from RRDSL
Total Gain/(loss) from discontinued operations,
net of tax
-
(4,222,517)
71,266,237
(18,074,566)
(4,222,517)
53,191,671
Note 7a: Assets of disposal group classified as held for sale
Current assets
Rigs and related inventory
Property, plant and equipment
Total current assets
Total held for sale assets
Note
Consolidated
2021 (US$)
2020 (US$)
3,635,878
613,160
4,249,038
4,249,038
7,211,928
710,933
7,922,861
7,922,861
Star Phoenix Group Ltd
Annual report ended 30 June 2021
37
Disposal of rigs and related inventory held by Range Resources Drilling
Services
The Company has also been actively marketing the rigs and equipment. As a result, the
Company sold production rigs for a total gain of US$83,543. The Company continues the
sale process of the remaining four production and four drilling rigs.
During the period, the rigs were impaired by US$3,437,053 (2020: US$15,671,514).
Note 7b: Liabilities directly associated with assets classified as
held for sale
Current liabilities
Trade and other payables
Deferred tax liabilities
Accrued expenditure
Total current liabilities
Total held for sale liabilities
Note
Consolidated
2021 (US$)
2020 (US$)
-
450,653
-
450,653
450,653
-
1,154,300
-
1,154,300
1,154,300
Note 8: Auditor’s remuneration
Note
Consolidated
2021 (US$)
2020 (US$)
Remuneration of the auditor of the Parent Entity for:
Auditing or reviewing the financial report
by BDO Audit (WA) Pty Ltd
Non-audit services provided by a related
entity of BDO Audit (WA) Pty Ltd in respect
to Parent Entity’s tax compliance
Total remuneration for the Parent Entity
Remuneration of the auditors of the subsidiaries
Auditing or reviewing the financial report
by MHA Macintyre Hudson
Auditing or reviewing the financial report
by BDO Barbados
Auditing or reviewing the financial report
by BDO Trinidad
Total remuneration for the subsidiaries
80,750
74,000
36,338
29,910
117,088
103,910
9,072
7,500
11,142
27,714
9,072
7,500
32,985
49,557
Star Phoenix Group Ltd
Annual report ended 30 June 2021
38
Note 9: Earnings/(Loss) per share
Note
Consolidated
2021 (US$)
2020 (US$)
n/a
(0.012)
(0.028)
(0.040)
a: Basic loss per share
Loss per share from continuing operations
attributable to the ordinary equity holders
of the company
Loss per share attributable to the ordinary
equity holders of the company
Loss per share from discontinued
operations attributable to the ordinary
equity holders of the company
b: Diluted loss per share
Loss per share from continuing operations
attributable to the ordinary equity holders
of the company
Loss per share attributable to the ordinary
equity holders of the company
Loss per share from discontinued
operations attributable to the ordinary
equity holders of the company
c: Reconciliation of gain/(loss) used in calculating earnings per share
Basic/ Diluted loss per share
Loss from continuing operations
attributable to the ordinary equity holders
of the company
Gain/(loss) attributable to the ordinary
equity holders of the company
Loss from discontinued operations
attributable to the ordinary equity holders
of the company
d: Weighted average number of shares used as the denominator
Weighted average number of ordinary
shares used as the denominator in
calculating basic EPS
146,267,513
(1,863,582)
(6,086,099)
(4,222,517)
n/a
n/a
(0.193)
0.397
0.590
n/a
n/a
n/a
(23,324,385)
47,941,852
71,266,237
120,700,101
Note 10: Cash and cash equivalents
Cash at bank and on hand
Risk exposure
Note
Consolidated
2021 (US$)
1,911,072
2020 (US$)
3,164,752
Star Phoenix Group Ltd
Annual report ended 30 June 2021
39
Information about the Group’s exposure to credit risk, foreign exchange risk and price risk
is provided in Note 26.
Note 11: Trade and other receivables
Current
Trade receivables (i)
Taxes receivable
Other receivables (ii)
Prepayments
Other taxes receivable
Other assets
Total trade and other receivables
Note
Consolidated
2021 (US$)
2020 (US$)
-
39,342
13,182
20,847
30,493
-
103,864
1,124,429
70,049
784,572
20,864
111,945
136,500
2,248,359
(i) Trade receivables are generally due for settlement within 30 days. They are presented as current
assets unless collection is not expected for more than 12 months after the reporting date.
(ii) Other receivables in prior year relates to the Beach Marcelle performance bond which was left in
place after 31 March 2020. The balance was fully impaired in the current period.
The consolidated entity has increased its monitoring of debt recovery as there is an
increased probability of customers delaying payment, due to the Coronavirus (COVID-19)
pandemic. An impairment of US$1,752,072 has been recognised in the year to 30 June 2021
(30 June 2020: Nil), of which, $153,225 (30 June 2020: Nil) relates to continuing operations
and $1,598,847 (30 June 2020: Nil) relates to non-continuing operations.
Fair value approximates the carrying value of trade and other receivables at 30 June 2021
and 30 June 2020.
Risk exposure
Information about the Group’s exposure to credit risk, foreign exchange risk and price risk
is provided in Note 26.
Allowance for expected credit losses
The consolidated entity has recognised a loss in profit or loss in respect of the expected
credit losses for the year ended 30 June 2021 as described above.
Note 12: Right-of-Use Asset
Non-current
Right-of-use asset
Total trade and other receivables
Note
Consolidated
2021 (US$)
2020 (US$)
63,333
63,333
183,333
183,333
Star Phoenix Group Ltd
Annual report ended 30 June 2021
40
The amount relates to the office lease in Beijing, People’s Republic of China, expiring on
31 August 2021. Amortisation of US$120,000 was recognised in the Income Statement with
regards to the asset.
Note 13: Controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the
following subsidiaries in accordance with accounting policy described in Note 1(a).
Controlled Entities Consolidated
Country of
Incorporation
Percentage Owned (%)
30 June 2021 30 June 2020
Subsidiaries of Star Phoenix Group Limited:
Range Resources (Barbados) Limited
SOCA Petroleum Limited
Barbados
Barbados
Range Resources Drilling Services Limited
Trinidad
West Indies Exploration Company Limited Trinidad
Range Resources Trinidad Limited
(disposed of)
Range Resources West Coast Limited
Trinidad
Trinidad
Range Resources (Barbados) GY Limited
Barbados
Range Resources GY Shallow Limited
Range Resources GY Deep Limited
Trinidad
Trinidad
100
100
100
100
-
100
100
100
100
Star Phoenix Group UK Limited
United Kingdom 100
Range Resources HK Limited
Hong Kong
PT Hengtai Weiye Oil and Gas
PT Jasmine Oil and Gas Services
PT Lubuk Kawai Raya (i)
PT Aceh Timur Kawai Energi (i)
Georgian Oil Pty Ltd
Shanghai AusQuality International Trading
Co. Ltd
Junior Star Tec Limited
Indonesia
Indonesia
Indonesia
Indonesia
Australia
China
100
60
60
46.8
42.1
100
100
100
100
100
100
100
100
100
100
100
100
100
60
60
46.8
42.1
100
100
(i)
(ii)
China
Indirect control of these entities was obtained with the acquisition of 60% of the share
capital in PT Hengtai Weiye Oil and Gas
In the subsidiaries, only Star Phoenix Group Uk Limited and the Chinese entities are
continuing entities. The rest of the entities are discontinued.
100
100
Star Phoenix Group Ltd
Annual report ended 30 June 2021
41
Note 14: Property, Plant & Equipment
Consolidated
Production
equipment
and access
roads
Gathering
station and
field office
Leasehold
improvement
Motor vehicle,
furniture,
fixtures &
fittings
Total
US$
US$
US$
US$
US$
22,297,641
-
(344,590)
(15,453,686)
(263,537)
(6,177,809)
32,178
Year ended 30 June 2020
Opening net book
amount
Foreign currency
movement
Additions
Disposals
Impairment
Depreciation
charge
Classified as held
for sale
Closing net book
amount
At 30 June 2020
Cost
Accumulated
depreciation
Net book amount -
-
2,072,722
(2,072,722)
-
Year ended 30 June 2021
Opening net book
amount
Depreciation
charge
Closing net book
amount
At 30 June 2021
Cost
-
-
2,072,722
Accumulated
depreciation
(2,072,722)
Net book amount -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
712,063
23,009,704
(1,130)
31,048
114,685
-
114,685
(344,590)
(15,453,686)
(14,335)
(368,069)
710,934
(6,888,743)
100,349
100,349
323,402
2,396,124
(237,389)
(2,295,775)
100,349
100,349
100,349
100,349
(16,725)
(16,725)
83,624
83,624
323,402
2,396,124
(239,778)
(2,312,500)
83,624
83,624
Star Phoenix Group Ltd
Annual report ended 30 June 2021
42
Note 15: Trade and other payables
a: Current
Trade payables
Sundry payables and accrued expenses (i)
Other payables (ii)
Total
b: Non-Current
Other payables – interest bearing
Other payables – non-interest bearing
Total
(i)
(ii)
Note
Consolidated
2021 (US$)
2020 (US$)
304,455
155,268
3,103,936
3,563,659
-
-
3,563,659
222,789
313,784
3,151,774
3,688,347
-
296,245
3,984,592
Amount mainly relates to accrued expenditure from operations in Trinidad.
Amount relates to withholding taxes payable as a result of debt eliminations. The group has
made a significant estimate that an amount of withholding tax may be payable in Australia
and Trinidad. The group is intending to apply for private rulings in both jurisdictions, the
outcome of which may materially change the liability balance.
Note 16: Deferred taxes
Other
Accrued
interest
Total
Deferred tax asset US$ US$
Movements: Year ended 30 June 2021
Opening balance
Charged/(credited) - to profit or loss
Closing net book amount (i)
55,706
(55,706)
-
56,241
(25,748)
30,493
111,947
(81,454)
30,493
(i)
Deferred tax asset is included in the asset held for sale (note 7a)
Fair value
uplift on
business
combination
Accelerated
depreciation
Total
Deferred tax liability US$ US$ US$
Movements: Year ended 30 June 2020
Opening balance
Foreign currency movement
Transferred on disposal of subsidiary
Charged/(credited) - to profit or loss
30,046,205
-
(29,582,812)
(463,393)
10,044,127
58,610
(4,136,714)
(4,811,723)
1,154,300
40,090,332
58,610
(33,719,526)
(5,275,116)
1,154,300
Closing net book amount
Movements: Year ended 30 June 2021
Opening balance
Foreign currency movement
-
-
-
1,154,300
-
1,154,300
-
Star Phoenix Group Ltd
Annual report ended 30 June 2021
43
Fair value
uplift on
business
combination
Accelerated
depreciation
Total
Charged/(credited) - to profit or loss
Closing net book amount (i)
-
-
(i) Deferred tax liability is included in liabilities directly associated with assets held for sale
(note 7b)
(703,647)
450,653
(703,647)
450,653
Note 17: Provisions
Employee service benefits
Provision (i)
Total
Note
Consolidated
2021 (US$)
-
5,796,048
5,796,048
2020 (US$)
195,896
5,796,048
5,991,944
(i) Provision relates to an estimate of the potential land taxes that may be payable by the
Company on expired exploration licences in Trinidad. The determination of provisions
involves management judgements about the probability of outcomes of future events
and estimates on timing and amount of expected future cash flows.
The amount and timing of settlement in respect of land taxes are uncertain and
dependent on factors that are not within management control as payment dates are
uncertain
Note 18: Contributed equity
Note
Consolidated
2021 (US$)
2020 (US$)
150,876,970 (2020: 141,367,955) fully paid
ordinary shares
Share issue costs
Total contributed equity
409,614,904
409,428,374
(21,044,400)
388,570,504
(21,044,400)
388,383,974
2021 No.
2021 (US$)
2020 No.
2020 (US$)
Consolidated
a: Fully paid ordinary shares
At the beginning of
reporting period
Shares issued to directors
during year
Consolidation
Shares issued during year
Total contributed equity
141,367,955
409,428,374 10,243,998,615
407,770,469
9,509,015
186,530
1,536,599,792
999,176
-
-
150,876,970
(11,662,791,778)
23,561,326
409,614,904 141,367,955
-
658,729
409,428,374
At the date of this report, the Company’s issued capital comprises 150,876,970 ordinary
fully paid shares.
Ordinary shares entitle the holder to participate in dividends and the proceeds on
winding up of the Company in proportion to the number of and amounts paid on the
shares held.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
44
On a show of hands every holder of ordinary shares present at a meeting of the
Company, in person or by proxy, is entitled to one vote and upon a poll each share is
entitled to one vote.
On 4 January 2021, the Group announced to issue 7,195,036 shares to directors. During the
year, the Group also issued announced a subscription of 2,313,979 new ordinary shares to
management.
b: Options
At the beginning of reporting period
Options expired
Options exercised during year
Total options
Consolidated
2021 No.
2020 No.
-
-
-
-
404,643,137
(404,643,137)
-
-
The holders of these options did not have any rights under the options to participate in
any share issues of the company.
During the year ended 30 June 2021, no ordinary shares of Star Phoenix Group were issued
on the exercise of options (2020: nil).
Note 19: Reserves
a: Share-based payment reserve
Balance 1 July 2020
Share based payment expenses
Balance 30 June 2021
Note
Consolidated
2021 (US$)
2020 (US$)
8,316,464
-
8,316,464
8,316,464
-
8,316,464
The share-based payment reserve records items recognised as expenses on the fair
valuation of shares and options issued as remuneration to employees, directors and
consultants. For the year ended 30 June 2021 the amount was nil reflecting the fact that
all options vested during the year.
b: Option premium reserve
Balance 1 July 2020
Fair value movement of exercised options that
were originally classified as a derivative liability
Balance 30 June 2021
Note
Consolidated
2021 (US$)
2020 (US$)
12,057,362
12,057,362
-
-
12,057,362
12,057,362
The option premium reserve is used to recognise the grant date fair value of options.
c: Foreign currency translation reserve
Balance 1 July 2020
Note
Consolidated
2021 (US$)
2020 (US$)
3,015,222
7,432,461
Star Phoenix Group Ltd
Annual report ended 30 June 2021
45
Currency translation differences arising during
the year
Currency translation differences arising due to
disposal of subsidiary
Balance 30 June 2021
Note
Consolidated
2021 (US$)
2020 (US$)
11,322
576,677
-
(4,993,916)
3,026,544
3,015,222
The foreign currency translation reserve is used to record exchange differences arising
from the translation balances of foreign subsidiaries.
Total reserves at 30 June 2021
23,400,370
23,389,048
Note 20: Contingent liabilities and contingent assets
The Directors are not aware of any contingent liabilities or contingent assets as at 30 June
2021.
Note 21: Segment reporting
30 June 2021
Segment revenue
Total segment revenue
Intersegment revenue
Revenue from external
customers
Other income
Segment result
Depreciation
Interest Income/(expense)
Other segment
income/(expenses)
Impairment of Receivables
Impairment of Rigs and related
equipment
Gain on disposal
Profit/(Loss) before income tax
Income tax
Profit/(Loss) after income tax
Segment assets
Segment assets
Total assets
Segment liabilities
Segment liabilities
Total liabilities
Trinidad –
Oil & Gas
Production
US$
Trinidad –
Oilfield
Services
US$
Indonesia
US$
Unallocated
US$
Total
US$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
580,017
-
129,928
450,089
-
226,839
(805,348)
(1,479,072)
(3,437,053)
83,543
(4,831,074)
608,557
(4,222,517)
4,586,856
4,586,856
9,676,636
9,676,636
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
98,728
-
-
678,745
-
129,928
98,728
548,817
(16,725)
(222,236)
(16,725)
4,603
(1,586,849)
(2,392,197)
(136,500)
(1,615,572)
-
-
(1,863,582)
-
(1,863,582)
(3,437,053)
83,543
(6,694,656)
608,557
(6,086,099)
1,824,078
1,824,078
6,410,934
6,410,934
133,724
133,724
9,810,360
9,810,360
Star Phoenix Group Ltd
Annual report ended 30 June 2021
46
30 June 2021
30 June 2020
Total segment revenue
Intersegment revenue
Revenue from external
customers
Other income
Segment result
Depreciation
Interest income/(expense)
Other segment expenses
Impairment reversal
Withholding tax
Gain on disposal
Profit/(Loss) before income tax
Income tax
Profit/(Loss) after income tax
Segment assets
Segment assets
Total assets
Segment liabilities
Segment liabilities
Total liabilities
(i) Unallocated assets
Segment assets
Cash
Other
Total segment assets
Trinidad –
Oil & Gas
Production
US$
Trinidad –
Oil & Gas
Production
US$
7,217,906
-
Trinidad –
Oilfield
Services
US$
Trinidad –
Oilfield
Services
US$
3,279,275
(1,958,490)
7,217,906
1,320,785
-
1,158,624
(353,734)
(1,903,279)
(18,413,616)
-
-
-
(18,191,220)
-
360,115
(5,358,232)
51,320,529
(3,107,646)
36,087,762
86,520,434
(15,254,197) 1,505,023
71,266,237
(16,686,197)
-
-
-
-
10,859,099
10,859,099
10,210,766
10,210,766
Indonesia
US$
Unallocated
US$
Total
US$
Indonesia
US$
Unallocated
US$
Total
US$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(14,336)
(2,854,830)
(3,769,022)
-
-
-
(6,638,188)
-
(6,638,188)
10,497,181
(1,958,490)
8,538,691
1,158,624
(368,070)
(4,397,994)
(27,540,529)
51,320,529
(3,107,646)
36,087,762
61,982,708
(13,749,174)
47,941,852
2,760,555
2,760,555
13,619,654
13,619,654
920,070
920,070
11,130,836
11,130,836
30 June 2021
US$
30 June 2020
US$
1,668,255
155,823
1,824,078
2,473,884
286,671
2,760,555
Segment result – all other segments
Directors’ and officers’ fees and benefits
Finance costs
Other general and administration expenses
Total unallocated segment expenses
Note
Consolidated
2021 (US$)
2020 (US$)
702,785
6,840
1,378,474
2,088,099
1,429,250
2,854,830
2,354,108
6,638,188
Star Phoenix Group Ltd
Annual report ended 30 June 2021
47
Accounting policies
AASB 8 requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision
maker in order to allocate resources to the segment and to assess its performance. The
chief operating decision maker is the Executive Chairman and through this role the Board
of Directors.
Information regarding these segments is presented above. The accounting policies of the
reportable segments are the same as those of the Group. Segment information is
prepared in conformity with the accounting policies of the entity as disclosed in Note 1.
Segment revenues and expenses are those directly attributable to the segments and
include any joint revenue and expenses where a reasonable basis of allocation exists.
Segment assets include all assets used by a segment and consist principally of cash,
receivables, plant and equipment, exploration expenditure capitalised and development
assets net of accumulated depreciation and amortisation. While most such assets can be
directly attributed to individual segments, the carrying amount of certain assets used
jointly by two or more segments is allocated to the segments on a reasonable basis.
Segment disclosures do not include deferred income taxes.
Note 22 Cash flow information
Note
Consolidated
2021 (US$)
2020 (US$)
16,725
201,654
(6,086,099)
(15,136)
120,000
Reconciliation of cash flow from operations with loss after income tax
Gain/(loss) after income tax
Non-cash flows in profit
Depreciation, depletion and amortisation
Share based payment- consultants and
employees
Impairment of non-current assets
Impairment reversal
Gain on disposal of subsidiary
Foreign exchange (gain)/loss
Impairments recognised on held for sale
assets
Decrease in other current assets
(Increase)/decrease in trade and other
receivables
Decrease in deferred tax asset
Increase/(decrease) in trade and other
payables
Increase/(Decrease) in deferred tax
liabilities
increase/(Decrease) in provisions
Items reclassified as investing activities on
gain on disposal of subsidiary
Net cash outflow (from)/to operations
(1,816,417)
1,867,165
3,437,053
(703,647)
(420,933)
(195,896)
(44,846)
7,543
Star Phoenix Group Ltd
Annual report ended 30 June 2021
47,941,852
464,736
-
-
(51,320,529)
(30,385,017)
26,691
16,250,238
-
(1,271,752)
15,254,197
4,404,590
(4,569,660)
(128,846)
2,020,692
(1,312,808)
48
Note 23: Share based payments
Employee option plan
No options were issued to key management personnel. All options expired during the prior
year as vesting conditions were not met.
Expenses recognised in the profit or loss
During the year, no share-based payments were recognised in profit/loss statement.
(2020: Nil).
Note 24: Related party transactions
(a) Parent entity
The ultimate Parent Entity and ultimate Australian Parent Entity within the Group is Star
Phoenix Group Ltd.
(b) Subsidiaries
Interests in subsidiaries are set out in Note 13.
(c) Transactions with Key Management Personnel
The following transactions occurred during the year with Key Management Personnel or
their related parties:
Consulting fees paid or payable to Kaiyuan Guosen
Management Consulting Limited, a company owned by Mr Gu
Consulting fees paid or payable to Ten Faye Limited, a
company owned by Mr L Liu
2021
US$
2020
US$
379,251
330,416
35,833
42,255
One payment of CNY210,937 was outstanding for Mr Gu at the year end and was paid
July 2021 (2020: Nil)
Mr Gu incurred company costs through his personal account relating to the establishment
of new subsidiaries within the Group. On 20 October 2020, RMB 67,896 was transferred to
Mr Gu as reimbursement of these costs.
d: Key Management Personnel compensation
Short–term benefits
One-off payments
508,936
-
646,691
753,505
Note
Consolidated
2021 (US$)
2020 (US$)
Star Phoenix Group Ltd
Annual report ended 30 June 2021
49
Post-employment benefits
Issue Shares to directors
Total
Note
Consolidated
2021 (US$)
2020 (US$)
29,397
164,452
702,785
29,054
-
1,429,250
Note 25: Parent entity information
The following details information related to the Parent Entity Star Phoenix Group Limited, at
30 June 2021. The information presented here has been prepared in accordance using
consistent accounting policies as presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Accumulated losses
Reserves
Total equity
Note
Consolidated
2021 (US$)
2020 (US$)
1,648,398
146,957
1,795,355
133,724
-
133,724
2,473,884
5,668,315
8,142,199
2,330,478
3,322,903
5,653,381
388,570,480
(411,246,995)
24,338,146
1,661,631
388,383,974
(409,139,032)
23,243,876
2,488,818
Loss for the year from continuing operations
Profit for the year for discontinued operations
Total comprehensive loss for the year
(2,107,963)
-
(2,107,963)
(5,858,309)
70,230,658
64,372,349
No contingent liabilities were recognised as disclosed in Note 20.
Note 26: Financial risk management
The Group has exposure to the following risks from their use of financial instruments:
Credit risk
Market risk
Liquidity risk
This note presents information about the Group’s exposure to each of the above risks, their
objectives, policies and processes for measuring and managing risk, and the
management of capital. Further quantitative disclosures are included throughout these
financial statements. The Board of Directors has overall responsibility for the establishment
and oversight of the risk management framework.
Risk management policies are established to identify and analyse the risks faced by the
Group, to set appropriate risk limits and controls, and to monitor risks and adherence to
limits. Risk management policies and systems are reviewed to reflect changes in market
Star Phoenix Group Ltd
Annual report ended 30 June 2021
50
conditions and the Group’s activities. The Group, through training and management
standards and procedures, aims to develop a disciplined and constructive control
environment in which all consultants and agents understand their roles and obligations.
Credit risk
Credit risk is the risk of financial loss to the Group if counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s
receivables and cash held at financial institutions.
Credit risk is managed on a group basis. Individual risk limits are set based on internal or
external ratings in accordance with limits set by the board.
The credit quality of financial assets that are neither past due or impaired can be assessed
by reference to external credit ratings (if available) or to historical information about
counterparty default rates.
Note
Consolidated
2021 (US$)
2020 (US$)
Cash at bank, restricted deposits and short-term bank deposits (S&P ratings)
AAA -
AA-
A+
BBB+
BBB-
Not rated
Total
1,648,398
19,857
-
242,817
-
-
1,911,072
10
1,489,291
984,593
-
690,868
-
-
3,164,752
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit
exposure. The Group’s maximum exposure to credit risk at the reporting date was:
Note
Consolidated
2021 (US$)
2020 (US$)
Trade and other receivables – non-current (i)
Trade and other receivables – current (i)
Cash and cash equivalents
Total
11
10
-
103,864
1,911,072
2,014,936
-
2,248,359
3,164,752
5,413,111
(i) Counterparties without an external credit rating.
Loans and receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of
each debtor. No collateral was held in relation to these receivables.
Impairment losses
Star Phoenix Group Ltd
Annual report ended 30 June 2021
51
Following the sale of Range Resources Trinidad Limited (which held interests in the
upstream assets in Trinidad) to LandOcean Energy Services Co Ltd (LandOcean), certain
sums remain due and payable to the Group.
During this financial year, the Board made the decision to fully impair the
receivable from LandOcean and the performance bond receivable to adhere to
accounting standards given the situation and age of the balances, resulting to an
impairment of US$1,722,462. No further payments have been received to date.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as
they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
The Group uses activity-based costing to cost its activities, which assists in monitoring cash
flow requirements and optimising its cash return on investments. Typically, the Group
ensures that it has sufficient cash on demand to meet expected operational expenses for
a period of 12 months; this excludes the potential impact of extreme circumstances that
cannot reasonably be predicted, such as natural disasters.
Group 2021
Carrying
amount
Contractual
cash flows
Within one
year
1-2 years
2-5 years
Financial liabilities at amortised cost
Trade and other
payables
Total
3,563,659
3,563,659
3,563,659
3,563,659
3,563,659
3,563,659
-
-
-
-
Group 2020
Carrying
amount
Contractual
cash flows
Within one
year
1-2 years
2-5 years
Financial liabilities at amortised cost
Trade and other
payables
Total
3,984,592
3,984,592
3,984,592
3,984,592
3,688,347
296,245
3,688,347
296,245
-
-
Market risk
Market risk is the risk that changes in market prices, such as interest rates and equity prices
will affect the Group’s income or the value of its holdings of available for sale assets. The
objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimising the return.
Foreign exchange risk
Star Phoenix Group Ltd
Annual report ended 30 June 2021
52
The Group operates internationally and is exposed to foreign exchange risk arising from
various currency exposures, primarily with respect to the US dollar, AU dollar, TT Dollar,
British pound and Chinese Renminbi. Foreign exchange risk arises from future commercial
transactions and recognised assets and liabilities denominated in a currency that is not
the entity’s functional currency. The risk is measured using sensitivity analysis and cash
flow forecasting.
The Group’s treasury risk management policy is to closely monitor exchange rate
fluctuations. To date, the Group has not sought to hedge its exposure to fluctuations in
exchange rates, however this policy will be reviewed on an ongoing basis.
The Group’s exposure to foreign currency risk at the reporting date was as follows:
Cash
Amount payable to other
entities
Total
2021 AUD
2020 AUD
2021 GBP
2020 GBP
45,090
143,230
91,056
1,030,708
(20,800)
(63,702)
(11,250)
(19,970)
24,290
79,528
79,806
1,010,738
Consolidated
Cash
Amount payable to other
entities
Total
2021 TTD
2020 TTD
2021 RMB
2020 RMB
1,636,585
3,765,720
8,449,697
984,593
(184,564)
(597,861)
-
-
1,452,021
3,167,859
8,449,697
984,593
Consolidated
Sensitivity
Based upon the amounts above, had the US dollar strengthened by 10% with all other
variables held constant, there would not have been a material impact on the profit and
equity of the Group. A 10% weakening of the US dollar against the above currencies at 30
June would have had an equal but opposite effect, on the basis that all other variables
remain constant.
Interest rate risk
There is no material interest rate risk exposure in the Group.
Fair values versus carrying amounts
The fair value of financial assets and liabilities, together with the carrying amounts shown
in the statement of financial position, are as follows:
Group
Trade and other
receivables
Cash and cash
equivalents
30 June 2021
US$
Carrying amount
Fair value
30 June 2020
US$
Carrying
amount
Fair
value
103,864
103,864
2,248,359
2,248,359
1,911,072
1,911,072
3,164,752
3,164,752
Star Phoenix Group Ltd
Annual report ended 30 June 2021
53
Trade and other
payables
Total
(3,563,659)
(3,563,659)
(3,984,592)
(3,984,592)
(1,548,723)
(1,548,723)
1,428,519
1,428,519
The basis for determining fair value is disclosed in Note 1(n).
Other price risks
The Group is not exposed to any other price risks.
Capital management
The entity’s objectives when managing capital is to safeguard its ability to continue as a
going concern, so that it can continue to provide returns for shareholders and to maintain
an optimal capital structure to reduce the cost of capital.
The Group is working on identifying new projects in the energy and resources spectrum.
The capital structure of the group consists of cash and cash equivalents and equity
attributable to equity holders of the Company, comprising issued capital, reserves and
accumulated losses as disclosed in Notes 18 and 19 respectively. None of the entities
within the group are subject to externally imposed capital requirements.
Gearing ratio
The Board reviews the capital structure on an annual basis. As a part of this review the
Board considers the cost of capital and the risks associated with each class of capital.
Financial assets
Cash and cash equivalents
Financial liabilities
Trade and other payables
Net debt
Equity
Net debt to equity ratio
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables – current
Total
Financial liabilities
Trade and other payables - non-current
Trade and other payables – current
Total
Consolidated
2021 (US$)
2020 (US$)
1,911,072
3,164,752
(3,563,659)
(3,984,592)
(3,563,659)
(3,984,592)
(3,399,429)
2,488,818
N/A
125.9%
Consolidated
2021 (US$)
2020 (US$)
Note
10
15
Note
10
11
1,911,072
103,864
2,014,936
15
-
3,563,659
3,563,659
3,164,752
2,248,359
5,413,111
296,245
3,688,347
3,984,592
Star Phoenix Group Ltd
Annual report ended 30 June 2021
54
The carrying amount reflected above represents the Group’s maximum exposure to credit
risk for such loans and receivables.
(a) Fair value hierarchy
AASB 13 requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
(a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1),
(b) Inputs other than quoted prices included within level 1 that are observable for the
asset or liability, either directly or indirectly (level 2), and
(c) Inputs for the asset or liability that are not based on observable market data
(unobservable inputs (level 3).
The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy
levels as at the end of the end of the reporting period. There were no transfers between
the levels of the fair value hierarchy during the year ended 30 June 2021.
(b) Fair values of other financial instruments
The Group has financial instruments which are measured at amortised cost in the
consolidated statement of financial position.
Due to their short-term nature, the carrying amounts of the current receivables, current
payables, current borrowings, and current other financial liabilities is assumed to
approximate their fair value.
Note 27: Events after the reporting date
Arbitration commences against LandOcean
On 14 July 2021, the Company announced that its legal advisers Dentons UK and Middle
East LLP have now filed an arbitration request in the London Court of International
Arbitration, which officially marks commencement of arbitration proceedings against
LandOcean.
Pursuant to the Request, the Group is claiming various sums from LandOcean currently
estimated in excess of US$8.4 million. There are additional claims of US$1.8 million that fall
outside of the Request, and the Company is exploring options of bringing these claims
separately in the courts of Trinidad and Tobago. These sums are owed to the Group by
LandOcean pursuant to the sale and purchase agreement of Range Resources Trinidad
Limited. In accordance with the standards these amounts have not been recognised in the
financial statements as contingent assets.
Management changes
On 27 August 2021, the company announced that the Directors made a decision to
implement changes to the management team. As a result, a mutual agreement was
reached for Mr Theo Eleftheriades, the Chief Financial Officer and Ms Evgenia Bezruchko,
the Group Corporate Development Manager and Joint Company Secretary to cease their
employment in their current roles. The Board of Directors have approved the non-Board
appointment of Mr Harry Liu as Chief Financial Officer. All of the management changes will
come into effect on 1 September 2021.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
55
Director’s Salaries and payments
On 07 September 2021, the company announced that the Board of Directors has approved
delaying all directors' salaries and payments from 1 September 2021 subject to further
review at the beginning of 2022 in accordance with the cash position of the Company at
that particular time.
This has been taken as a cash conservation measure to preserve the Company's cash
reserves whilst it seeks the collection of the monies owed to it by LandOcean, as updated
in the Company's announcement of 14 July 2021.
Director funding of cash swap arrangement
On 20 August 2021, RMB 600,000 was transferred by Shanghai AusQuality International
Trading Co. Ltd to Mr Gu under a cash swap arrangement under which he then provided
SPG with USD funding. This funding was disclosed to and approved by the board.
Strait Oil & Gas Limited
On 29 November 2021, SPG took control of Strait Oil & Gas limited. SPG UK Limited was
appointed as director and Mr Lubing Liu was elected as company secretary of the entity.
Note 28: New accounting Standards and interpretations
Australian accounting Standards/amendments released but not yet effective: 30
June 2021 year end
There are no other standards that are not yet effective and that would be expected to
have a material impact on Star Phoenix Group in the current or future period and on
foreseeable future transactions.
Note 29: Company details
The registered office of the company is:
c/o Edwards Mac Scovell, Level 1, 8 St Georges Terrace, Perth WA 6000
Telephone: +61 8 6205 3012
The principal place of business is:
c/o Edwards Mac Scovell, Level 1, 8 St Georges Terrace, Perth WA 6000
Telephone: +61 8 6205 3012
Star Phoenix Group Ltd
Annual report ended 30 June 2021
56
Directors’ Declaration
The directors of the company declare that:
•
•
•
The financial statements, comprising the consolidated statement of profit or loss
and other comprehensive income, consolidated statement of financial position,
consolidated statement of cash flows, consolidated statement of changes in
equity, accompanying notes, are in accordance with the Corporations Act 2001
and:
• comply with Accounting Standards and the Corporations Regulations 2001
and other mandatory professional reporting requirements; and
• give 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.
The company has included in the notes to the financial statements an explicit and
unreserved statement of compliance with International Financial Reporting
Standards.
In the directors’ opinion, there are reasonable grounds to believe that the
company will be able to pay its debts as and when they become due and
payable.
The directors have been given the declarations by the chief executive officer 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:
Zhiwei Gu
Chairman
22 December 2021
Star Phoenix Group Ltd
Annual report ended 30 June 2021
57
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Star Phoenix Group Ltd
Report on the Audit of the Financial Report
Disclaimer of opinion
We were engaged to audit the financial report of Star Phoenix Group Ltd (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, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, and notes to the financial report, including a summary of significant accounting policies
and the directors’ declaration.
We do not express an opinion on the accompanying financial report of the Group. Because of the
significance of the matters described in the Basis for disclaimer of opinion section of our report, we
have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit
opinion on this financial report.
Basis for disclaimer of opinion
We have been unable to obtain sufficient appropriate audit evidence on the books and records of the
consolidated entity. Specifically, we have been unable to satisfy ourselves on the following areas:
i.
As disclosed in Note 5 of the financial statements, the Group’s current assets as at 30 June
2021 include an amount classified as assets held for sale. During the year ended 30 June
2021, there has been a continued deterioration in the operating and economic performance
of the Group, which created an impairment indicator of the assets included in this amount.
The Directors have undertaken an impairment assessment as at
30 June 2021 and have estimated the recoverable amount of these assets based on sales
price achieved for four specific rigs. This resulted in an impairment expense being
recognised in the current year.
The valuation methodology used to arrive at the recoverable amount was not in accordance
with the requirements of Australian Accounting Standards, and we were unable to perform
alternative procedures to determine whether any adjustments to the carrying value of the
property plant and equipment, rigs and related inventory included in assets held for sale as
at 30 June 2021 were necessary.
Our audit opinion for the year ended 30 June 2020 was also modified with respect to this
matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are
members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
ii.
As disclosed in note 15 of the financial statements, the Group’s current liabilities as at 30
June 2021 include an amount in respect of potential withholding tax liabilities due on
overseas interest payments from loans which were settled in the financial year ended 30
June 2020. During the current year, management undertook a review of the withholding
tax amounts and as at the date of this report this reassessment is incomplete as
information is required from an external source. Due to the timing of the audit, we have
been unable to obtain sufficient appropriate audit evidence to confirm the completeness
and accuracy of the withholding tax liability within the statement of financial position as at
30 June 2021 and 30 June 2020 or of the related expense in the statement of profit or loss
and other comprehensive income for the 30 June 2020 year end.
As a result of the matters stated above, we were unable to determine whether any adjustments might
have been found necessary in respect of the elements making up the consolidated statement of
financial position, consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and disclosure thereto.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group 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 has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our responsibility is to conduct an audit of the financial report in accordance with Australian Auditing
Standards and to issue an auditor’s report. However, because of the matter described in the Basis for
disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit
evidence to provide a basis for an audit opinion on the financial report.
We are independent of the Group in accordance with 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 (including Independence Standards) (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.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 10 to 16 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Star Phoenix Group Ltd, 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.
BDO Audit (WA) Pty Ltd
Ashleigh Woodley
Director
Perth, 22 December 2021
Additional Information
Top 20 shareholders
The 20 largest shareholders of the Company as at 31 August 2021 are listed below:
Rank Shareholder
Number of shares
Percentage
held (%)
1.
2.
3.
4
5.
6.
7.
8.
9.
Beijing Sibo Investment Management
24,476,210
Preceding Max Ltd
Landocean Energy Services
Sramek Biodynamics Holdings
23,561,326
17,390,770
15,365,998
Interactive investor services Nominees Limited 10,586,972
Abraham Limited
7,123,776
Barclays Direct Investing Nominees Limited
5,489,937
Mr Zhiwei Gu
5,489,793
Interactive Investor Services Nominees Limited 4,759,339
10.
HSDL Nominees Limited
2,744,087
11.
Hargreaves Lansdown (Nominees)Limited
2,675,016
12.
Pershing Nominees Limited
2,074,501
13.
HSDL Nominees Limited
1,754,090
14.
Hargreaves Lansdown (Nominees)
Limited
15. Mr Lubing Liu
16.
Hargreaves Landsdown (Nominees) Limited
1,727,605
1,726,077
1,534,245
17.
HSBC Client Holdings Nominee (UK) Limited
1,339,867
18.
Interactive Brokers LLC
933,573
19.
20.
Total
Vidacos Nominees Limited
826,609
Lawshare Nominees Limited
785,095
132,364,886
16.22%
15.62&
11.53%
10.18%
7.02%
4.72%
3.64%
3.64%
3.15%
1.82%
1.77%
1.38%
1.16%
1.15%
1.14%
1.02%
0.89%
0.62%
0.55%
0.52%
Star Phoenix Group Ltd
Annual report ended 30 June 2021
61
Substantial shareholders
An extract of the Company’s register of substantial shareholders (being those
shareholders who held 5% or more of the issued capital on 31 August 2021) is below:
Rank
Shareholder
Number of shares
Percentage
held (%)
1.
2.
3.
4.
5.
Beijing Sibo Investment
Management
Preceding Max Ltd
24,476,210
23,561,326
Landocean Energy Services
17,390,770
Sramek Biodynamics Holdings
15,365,998
Interactive investor services
Nominees Limited
10,586,972
16.22%
15.62%
11.53%
10.18%
7.02%
Distribution of equity securities
The number of shareholders by size of holding is set out below (31 August 2021):
Size of holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of holders
2,202
563
150
219
59
3,193
Number of shares
641,108
1,367,809
1,173,686
5,753,334
141,941,033
150,876,970
Tenement schedule
The tenement schedule for the Group as at 30 June 2021 is tabulated below:
Tenement Reference
Perlak1
Location
Indonesia
Percentage held (%)
23
Operator
PT Aceh Timur
Kawai Energi
Notes:
1. The Company’s indirect interest in the Perlak field is held through its 60%
shareholding in Hengtai, which holds a 78% interest in Lukar which in turn holds a
49% interest in PT Aceh Timur Kawai Energi.
Star Phoenix Group Ltd
Annual report ended 30 June 2021
62
Corporate Directory
s
r
t
o
c
e
r
i
D
Mr Zhiwei Gu
Executive Chairman
Mr Lubing Liu
Executive Director, COO, Joint Company Secretary
Dr Mu Luo
Non-Executive Director
Company Secretary Mr Lubing Liu
Registered office &
principal place of
business
c/o Edwards Mac Scovell, Level 1, 8 St Georges Terrace
Perth WA 6000, Australia
Telephone: +61 8 6245 0222
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace, Perth WA 6000
Telephone: +61 3 9415 4000
Computershare Investor Services plc
PO Box 82, The Pavilions, Bridgwater Road, Bristol, UK BS99 6ZZ
Telephone: +44 370 702 0000
BDO Audit (WA) Pty Ltd, 38 Station Street;
Subiaco WA 6008, Australia
Star Phoenix shares are listed on Alternative Investment Market of
the London Stock Exchange (AIM code: STA)
Australia
www.starphoenixgroup.com
Share Registry
(Australia)
Share Registry
(United Kingdom)
Auditor
Stock Exchange
Listing
Country of
Incorporation
Website
Star Phoenix Group Ltd
Annual report ended 30 June 2021
63