Strategic Energy Resources Limited
ABN 14 051 212 429
Annual Report - 30 June 2020
For personal use only
Strategic Energy Resources Limited
Contents
30 June 2020
Corporate directory
Chairman Letter
Directors' report
Auditor's independence declaration
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Strategic Energy Resources Limited
Shareholder information
2
3
5
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15
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43
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Strategic Energy Resources Limited
Corporate directory
30 June 2020
Directors
Mr Stuart Rechner (Executive Chairman)
Mr Harvey Kaplan (Non-Executive Director)
Dr David DeTata (Non-Executive Director)
Company secretary
Ms Melanie Leydin
Notice of annual general meeting
The Company will hold its annual general meeting of shareholders on 18 November
2020.
Registered office
Principal place of business
Share register
Auditor
Level 4, 100 Albert Road
South Melbourne, VIC 3205
Ph: (03) 9692 7222
Fax: (03) 9077 9233
Level 4, 100 Albert Road
South Melbourne, VIC 3205
Ph: (03) 9692 7222
Fax: (03) 9077 9233
Link Market Services Limited
Tower 4, 727 Collins Street
Docklands, VIC 3008
Ph: 1300 554 474
Grant Thornton Audit Pty Ltd
Collins Square, Tower 5
727 Collins Street
Melbourne, VIC 3008
Stock exchange listing
Strategic Energy Resources Limited securities are listed on the Australian Securities
Exchange (ASX code: SER)
Website
www.strategicenergy.com.au
Corporate Governance Statement
Corporate governance statements are available in Group's website. Please refer to
https://www.strategicenergy.com.au/corporate-governance/
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Strategic Energy Resources Limited
Chairman Letter
30 June 2020
REVIEW OF OPERATIONS FY2019-20
This financial year saw SER move from project generation to exploration success. In late 2019 we hit high-grade gold at Saxby
in northwest Queensland. Not only did drillhole SXDD020 intersect 6m @ 12g/t Au, it proved there is a significant high-grade
gold system at Saxby that demands further exploration. SER has secured the ground surrounding Saxby.
In the East Tennant Iron Oxide Copper-Gold (IOCG) province, SER won key ground in a fiercely competed tender process.
We have moved quickly to commission a detailed ground gravity survey over our three tenements in this emerging exploration
hotspot. In the coming months the National Drilling Initiative stratigraphic drill campaign will drill multiple holes close to SER’s
ground to map the regional geology, structural architecture and mineral systems in this underexplored province.
At our South Australia IOCG projects in the Olympic Copper-Gold Province, SER completed a gravity survey at Billa Kalina
and joint venture partner Fortescue Metals Group (FMG) completed an airborne magnetic / radiometric survey at Myall Creek.
In Heavy Mineral Sands, SER advanced planning to upgrade the resource at our Ambergate Heavy Mineral Sands project
based on results from an internal techno-economic analysis.
SER is well funded to advance our exploration programs with a recent capital raising of $2m and the sale of the Uley Graphite
royalty for $500,000.
Figure 1: SER Project Locations
SER’s strategy of counter-cyclical project generation followed by cutting-edge technical exploration is poised for success.
We generated our projects at low cost when these commodities were unfashionable; now market conditions for our targets
have improved dramatically. SER has already generated a significant pipeline of additional exciting projects ready for
exploration, joint venture or sale just as the market booms. We look forward to sharing details with shareholders in the near
future.
In line with our strategy, SER is one of the very few junior explorer members of the Mineral Exploration Cooperative
Research Centre (MinEx CRC), the world’s largest mineral exploration collaboration of major mining companies, research
organisations and Geological Surveys of Australia. MinEx CRC is developing new exploration tools and techniques and
opening new exploration frontiers to discover the next generation of mineral deposits for Australia.
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Strategic Energy Resources Limited
Chairman Letter
30 June 2020
The SER team are major shareholders of the Company alongside you. We thank all shareholders for their continued support
and look forward to an exciting year ahead.
Sincerely
Stuart Rechner
Executive Chairman
STATEMENT OF MINERAL RESOURCES
SER publicly reports Exploration Results and Mineral Resource estimates in accordance with the ASX Listing Rules and the
requirements and guidelines of the 2012 edition of the Australasian Code for Reporting Exploration Results, Mineral
Resources and Ore Reserves – the JORC Code.
SER’s governance for public reporting of Exploration Results and Mineral Resource estimates includes important assurance
measures. All reports are signed-off by appropriate JORC Competent Persons with JORC Code Table 1 Checklists as
required. Exploration Results and Mineral Resource estimates are also peer reviewed (either by SER technical staff or suitably
qualified external consultants) before Board approval and ASX release.
Table 1: SER Statement of Mineral Resources at 30 June 2020 (no changes since 30 June 2019)
Ambergate Heavy Mineral Sands Mineral Resource estimate
Low grade HM
Inferred
cut-off
(%)
3.0
HM (%)
(Mt)
11.2
5.1
Slimes (%)
Total HM (kt)
13.6
569
The Ambergate Mineral Resource estimate is calculated with a low grade Heavy Mineral cut-off of 3% and Slimes cut off of <22%. The heavy mineral assemblage at Ambergate includes: 73% ilmenite (average
TiO2 content of 58.7%), 12% leucoxene, 12% zircon, 0.6% monazite and 2% other minerals. The Ambergate mineral resource was produced by an independent Mineral Resource Estimation Study conducted
by SRK Consulting who have no beneficial interest in the outcome of the technical assessment.
COMPETENT PERSON STATEMENTS
The information in this report that relates to Exploration Results and overall Annual Report Compilation is based on information compiled by Mr Stuart Rechner
BSc (Geology) MAIG MAusIMM, a Member of Australian Institute of Geoscientists and the Australasian Institute of Mining and Metallurgy. Mr Rechner is a
Director and shareholder of Strategic Energy Resources Ltd. Mr Rechner has sufficient experience which is relevant to the styles of mineralisation and types
of deposits under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Rechner consents to the inclusion in this report of the matters based
on his information in the form and context in which it appears.
The information in this statement that relates to the Mineral Resource Estimates is based on work conducted by David Slater of SRK Consulting (Australasia)
Pty Ltd. David Slater takes responsibility for the Mineral Resource Estimate. David Slater is a Member of The Australian Institute of Mining and Metallurgy
(AusIMM) and a member of the Australian Institute of Geologists (AIG) and has sufficient experience that is relevant to the style of mineralisation and type of
deposit under consideration, and to the activities undertaken, to qualify as Competent Person in terms of the Australian Code for the Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code, 2012 edition). David Slater consents to the inclusion of such information in this report in the
form and context in which it appears.
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Strategic Energy Resources Limited
Directors' report
30 June 2020
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Consolidated Entity') consisting of Strategic Energy Resources Limited (referred to hereafter as the 'Company' or 'parent
entity') and the entities it controlled at the end of, or during, the year ended 30 June 2020.
Directors
The following persons were Directors of Strategic Energy Resources Limited during the whole of the financial year and up to
the date of this report, unless otherwise stated:
Mr Stuart Rechner (Executive Chairman)
Mr Harvey Kaplan (Non-Executive Director)
Dr David DeTata (Non-Executive Director)
Principal activities
During the financial year the principal continuing activities of the Consolidated Entity consisted of exploration for minerals in
Australia.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Financial Results
The loss for the Consolidated Entity after providing for income tax amounted to $425,684 (30 June 2019: $694,845).
Operating expenses for the year $553,431 (2019: $719,629). Corporate expenses amounted to $220,243 (2019: $265,440)
resulting from continuing operations. Employee benefit expenses amounted to $144,485 (2019: $146,062). A total of
20,000,000 unlisted options were issued to Directors during the year (2019: Nil) and the Consolidated Entity recognised
share based payment expenses of $62,263 (2019: Nil).
The net assets of the Consolidated Entity increased by $678,087 to $2,546,376 (2019: $1,868,292) as at 30 June 2020. The
movements during the period was largely due to the capital raised during the year amounting to $1,066,508 (net of transaction
costs) and losses from operations amounting to $425,684. Working capital, being current assets less current liabilities,
decreased by $95,027 to $901,219 (2019: $996,246). The Consolidated Entity had a net cash outflows from operating
activities for the period of $412,753 (2019: $572,995).
The review of operations preceding this report outlines the exploration activities and corporate matters for the year.
Significant changes in the state of affairs
On 5 July 2019, the Company issued 50,000,000 fully paid ordinary shares (Shares) to investors at an issue price of $0.006
(0.6 cents) per Share and raised $300,000.
On 12 December 2019, the Company issued 20,000,000 options to Director for no consideration with fair value of $0.0031
with expiry date of 12 December 2022.
On 4 June 2020, the Company issued 237,500,000 fully paid ordinary shares (Shares) to investors at an issue price of
$0.0034 (0.34 cents) per Share and raised $807,500.
There were no other significant changes in the state of affairs of the Consolidated Entity during the financial year.
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Strategic Energy Resources Limited
Directors' report
30 June 2020
Matters subsequent to the end of the financial year
On 16 June 2020, the Consolidated Entity entered into a Royalty Sale and Purchase Agreement to sell its 1.5% Gross
Revenue Royalty on production from the Uley Graphite Project in South Australia to Vox Royalty Australia Pty Ltd (Vox
Australia), a wholly owned subsidiary of Vox Royalty Corp (TSXV:VOX) (Vox Royalty) for total consideration of $500,000.
The consideration comprises $80,000 cash, $200,000 in Vox Royalty shares upon satisfaction of certain completion
conditions and $220,000 in Vox Royalty shares upon commercial production at Uley.
The Consolidated Entity satisfied the completion conditions on 20 July 2020 and received the $80,000 cash consideration
and $200,000 in Vox Royalty shares.
On 12 August 2020 the Company issued 412,500,000 ordinary shares at an issue price of $0.0034 per share, raising
$1,402,500, before costs. Further, the Company issued 2,000,000 options to employees at $0.01 with expiry date of 12
December 2022.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the
Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial
years.
Likely developments and expected results of operations
The Consolidated Entity will continue to pursue its objective of maximising value of its investments held in exploration assets
through continued exploration of areas of interest and sale of interests in permits held.
The Consolidated Entity's focus for the coming periods will be on advancing its exploration projects and reviewing additional
potential exploration project acquisitions.
Environmental regulation
The Consolidated Entity holds participating interests in a number of exploration tenements. The various authorities granting
such tenements require the tenement holder to comply with the terms of the grant of the tenement and all directions given to
it under those terms of the tenement. To the best of the Directors' knowledge, the Consolidated Entity has adequate systems
in place to ensure compliance with the requirements of all environmental legislation described above and are not aware of
any breach of those requirements during the financial year and up to the date of the Directors' report.
Information on Directors
Name:
Title:
Experience and expertise:
Mr Stuart Rechner
Executive Chairman
Mr Rechner BSc LLB MAIG MAusIMM GAICD is an experienced company director and
geologist with degrees in both geology and law. He is a member of the Australian
Institute of Geoscientists, the Australasian Institute of Mining and Metallurgy and the
Australian Institute of Company Directors. For over ten years Mr Rechner was an
Australian diplomat responsible for the resources sector with postings to Beijing and
Jakarta.
Kingston Resources Limited (ASX: KSN)
Other current directorships:
Former directorships (last 3 years): Kalia Limited (ASX: KLH) - Resigned 28 September 2017
Interests in shares:
Interests in options:
30,000,000 fully paid ordinary shares
22,500,000 unlisted options exercisable at $0.01 (1 cent) per option on or before the
28 November 2020
10,000,000 unlisted options exercisable at $0.01 (1 cent) per option on or before the
12 December 2022.
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Strategic Energy Resources Limited
Directors' report
30 June 2020
Name:
Title:
Experience and expertise:
Mr Harvey Kaplan
Non-Executive Director
Mr Kaplan has spent the last 15 years at Macquarie Bank as an Associate Director in
the Private Wealth Division where he has assisted in numerous corporate transactions
and capital raisings involving listed companies. Mr Kaplan is a qualified lawyer and has
worked as a corporate solicitor for both Phillips Fox and Mallesons Stephen Jacques.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in options:
10,000,000 fully paid ordinary shares
20,000,000 unlisted options exercisable at $0.01 (1 cent) per option on or before the
28 November 2020
2,000,000 unlisted options exercisable at $0.01 (1 cent) per option on or before the 12
December 2022.
Name:
Title:
Experience and expertise:
Dr David DeTata
Non-Executive Director
Dr DeTata is an experienced scientific professional and public company director with
over 14 years’ experience in scientific research and investigations. Dr DeTata holds a
Doctor of Philosophy in energetic materials analysis and Master of Business
Administration from the University of Western Australia.
None
Other current directorships:
Former directorships (last 3 years): Kalia Limited (ASX: KLH) - Resigned 26 October 2017
Interests in shares:
Interests in options:
25,000,000 fully paid ordinary shares
20,000,000 unlisted options exercisable at $0.01 (1 cent) per option on or before the
28 November 2020
8,000,000 unlisted options exercisable at $0.01 (1 cent) per option on or before the 12
December 2022.
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships in all
other types of entities, unless otherwise stated.
'Former directorships (in the last 3 years)' quoted above are directorships held in the last 3 years for ASX listed entities only
and excludes directorships in all other types of entities, unless otherwise stated.
Company secretary - Ms Melanie Leydin
Ms Leydin has 25 years’ experience in the accounting profession including 13 years in the Corporate Secretarial profession
and is a company secretary and finance officer for a number of entities listed on the Australian Securities Exchange. She is
a Chartered Accountant and a Registered Company Auditor. Since February 2000, Ms Leydin has been the principal of
Leydin Freyer. The practice provides outsourced company secretarial and accounting services to public and private
companies specialising in ASX listed entities.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2020, and
the number of meetings attended by each Director were:
Mr S Rechner
Mr H Kaplan
Mr D DeTata
*
There are no sub-committees.
Full Board* Full Board
Attended
Held
4
4
4
4
4
4
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant
committee.
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Strategic Energy Resources Limited
Directors' report
30 June 2020
Remuneration report (audited)
The remuneration report, which has been audited, outlines the Director and executive remuneration arrangements for the
Consolidated Entity and the Company, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Consolidated Entity's and company's executive reward framework is to ensure reward for performance
is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of
strategic objectives and the creation of value for shareholders, and conforms with market best practice for delivery of reward.
The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders'
performance linkage / alignment of executive compensation
transparency
The Board is responsible for determining and reviewing remuneration arrangements for its Directors and Executives. The
performance of the Consolidated Entity and company depends on the quality of its Directors and Executives. The
remuneration philosophy is to attract, motivate and retain high performance and high-quality personnel.
In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive Director
remuneration is separate.
Non-executive Directors remuneration
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of, the
Directors. Non-executive Directors' fees and payments are reviewed annually by the Board.
For additional duties in assisting management beyond the normal time commitments of Non-Executive Directors, Non-
Executive Directors are paid a per diem rate, with the amounts approved by other Directors.
ASX Listing rules requires that the aggregate Non-Executive Directors remuneration shall be determining periodically by a
general meeting. The most recent determination was at the Annual General Meeting held on 25 November 2009, where the
shareholders approved an aggregate remuneration of $300,000. No amendments have been made to the available Non-
Executive Director remuneration pool since that date.
Executive remuneration
The Consolidated Entity and Company aims to reward executives with a level and mix of remuneration based on their position
and responsibility, which is both fixed and variable.
The executive remuneration and reward framework has two components:
●
●
base pay and non-monetary benefits
share-based payments
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board, based on individual and business unit performance, the overall performance of the Consolidated Entity and
comparable market remunerations.
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Strategic Energy Resources Limited
Directors' report
30 June 2020
The long-term incentives ('LTI') includes share-based payments.
Consolidated Entity performance and link to remuneration
The remuneration of the Directors and executives are not directly linked to the performance, share price or earnings of the
Consolidated Entity.
Non-executive Directors and executives were granted 20,000,000 options over shares during the financial year (2019: Nil).
The recipients of options are responsible for growing the entity and increasing shareholders' value. The options provide an
incentive to the recipients to remain with the Consolidated Entity and to continue to enhance the shareholders' value.
Voting and comments made at the Company's 25 November 2019 Annual General Meeting ('AGM')
The Company received 98.71% of 'for' votes in relation to its remuneration report for the year ended 30 June 2019. The
Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the Consolidated Entity are set out in the following tables.
The key management personnel of the Consolidated Entity consisted of the following Directors of Strategic Energy
Resources Limited:
●
●
●
Mr S Rechner (Executive Chairman)
Mr H Kaplan (Non-Executive Director)
Dr D DeTata (Non-Executive Director)
2020
Non-Executive Directors:
Mr D DeTata**
Mr H Kaplan
Executive Directors:
Mr S Rechner*
Short-term
benefits
Post-
employment
benefits
Share-based
payments
Cash salary
and fees
$
Super-
annuation
$
Equity
(options)-
settled
$
Total
$
75,615
40,000
7,184
3,800
24,905
6,226
107,704
50,026
290,000
405,615
4,750
15,734
31,132
62,263
325,882
483,612
*
**
Included in cash salary and fees are $54,750 of directors fees (including superannuation) and $240,000 for geological
services provided by Diplomatic Exploration Pty Ltd (an entity associated with Mr Stuart Rechner). Geological services
provided include personnel, vehicles, field equipment and specialised software.
Included in cash salary and fees are $39,000 of consulting fees (including superannuation).
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Strategic Energy Resources Limited
Directors' report
30 June 2020
2019
Non-Executive Directors:
Mr D DeTata**
Mr H Kaplan
Executive Directors:
Mr S Rechner*
Short-term
benefits
Post-
employment
benefits
Share-based
payments
Cash salary
and fees
$
Super-
annuation
$
Equity
(options)-
settled
$
Total
$
72,210
39,333
6,860
3,737
284,833
396,376
4,639
15,236
-
-
-
-
79,070
43,070
289,472
411,612
*
**
Included in cash salary and fees are $53,472 of directors fees (including superannuation) and $236,000 for geological
services provided by Diplomatic Exploration Pty Ltd (an entity associated with Mr Stuart Rechner). Geological services
provided include personnel, vehicles, field equipment and specialised software.
Included in cash salary and fees are $36,000 of consulting fees (including superannuation).
Name
Non-Executive Directors:
David DeTata
Harvey Kaplan
Executive Directors:
Stuart Rechner
Fixed remuneration
2019
2020
At risk - LTI
2020
2019
77%
88%
100%
100%
23%
12%
90%
100%
10%
-
-
-
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Name:
Title:
Agreement commenced:
Details:
Mr Stuart Rechner
Geological Consultant
1 March 2016
Mr Rechner is contracted to provide geological and technical services to Strategic
Energy Resources Limited, and is remunerated on a daily rate. The Company may
terminate the agreement by giving one (1) months' notice in writing. Mr Rechner can
terminate the agreement by giving one (1) months' notice.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to Directors and other key management personnel as part of compensation during the year
ended 30 June 2020 (2019: Nil).
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Directors' report
30 June 2020
Options
Shareholder approval date
Vesting date and
exercisable date
Expiry date
Exercise price at grant date
Fair value
per option
27 November 2017
25 November 2019
27 November 2017
17 December 2019
28 November 2020
12 December 2022
$0.01
$0.01
$0.005
$0.003
A total of 20,000,000 unlisted options were issued to Directors and Key Management Personal during the year (2019: Nil).
Options issued during the financial year have been valued using the black scholes method and the Consolidated Entity
recognised share based payment expenses of $62,263 (2019: Nil). The options issued to Directors during the financial year
did not have any service or performance conditions attached and vested immediately. Options granted carry no dividend or
voting rights.
The number of options over ordinary shares granted to and vested by directors and other key management personnel as
part of compensation during the year ended 30 June 2020 are set out below:
Name
Stuart Rechner
Harvey Kaplan
David DeTata
Number of
Number of
Number of
Number of
options
granted
options
granted
options
vested
options
vested
during the
during the
during the
during the
year
2020
year
2019
year
2020
year
2019
10,000,000
2,000,000
8,000,000
-
-
-
10,000,000
2,000,000
8,000,000
-
-
-
Additional information
The earnings of the Consolidated Entity for the five years to 30 June 2020 are summarised below:
2020
$
2019
$
2018
$
2017
$
2016
$
Interest income / sundry revenue
Profit/(loss) before income tax
Profit/(loss) after income tax
68,556
(484,867)
(484,867)
24,784
(694,845)
(694,845)
40,177
(766,260)
(766,260)
4,194
(514,637)
(514,637)
62,257
(5,547,426)
(5,547,426)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Basic earnings/(loss) per share (cents per
share)
0.005
0.006
0.004
0.005
0.014
(0.050)
(0.078)
(0.098)
(0.145)
(1.591)
2020
2019
2018
2017
2016
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Directors' report
30 June 2020
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key management
personnel of the Consolidated Entity, including their personally related parties, is set out below:
Balance at Received
as part of
the start of
the year
remuneration Additions
Disposals/
other
Balance at
the end of
the year
Ordinary shares
Mr S Rechner
Dr D DeTata
20,000,000
15,000,000
35,000,000
-
-
-
2,000,000
-
2,000,000
-
-
-
22,000,000
15,000,000
37,000,000
Option holding
The number of options over ordinary shares in the Company held during the financial year by each Director and other
members of key management personnel of the Consolidated Entity, including their personally related parties, is set out below:
Options over ordinary shares
Mr S Rechner
Mr H Kaplan
Dr D DeTata
Balance at
the start of
the year
Granted as
compensation
22,500,000
20,000,000
20,000,000
62,500,000
10,000,000
2,000,000
8,000,000
20,000,000
Balance at
the end of
Exercised
Expired
the year
-
-
-
-
-
-
-
-
32,500,000
22,000,000
28,000,000
82,500,000
Loans from key management personnel and their related parties
During the year Directors advanced loans (all Directors participating) to the Company for working capital purposes which
were due to be repaid on or before 31 December 2020. The Loans were unsecured and did not bear any interest. The
outstanding directors loans as at 30 June 2020 were $8,500 and were repaid in full after the year end.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Strategic Energy Resources Limited under option at the date of this report are as follows:
Grant date
27 November 2017
17 December 2019
Expiry date
28 November 2020
12 December 2022
Exercise
price
Number
under option
$0.01
$0.01
62,500,000
22,000,000
84,500,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
Company.
Shares issued on the exercise of options
There were no ordinary shares of Strategic Energy Resources Limited issued on the exercise of options during the year
ended 30 June 2020 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the directors of the Company for costs incurred, in their capacity as a director, for which they
may be held personally liable, except where there is a lack of good faith.
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Strategic Energy Resources Limited
Directors' report
30 June 2020
During the financial year, the Company paid a premium in respect of a contract to insure the directors of the Company against
a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature
of liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave 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 part of those proceedings.
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Officers of the Company who are former partners of Grant Thornton Audit Pty Ltd
There are no officers of the Company who are former partners of Grant Thornton Audit Pty Ltd.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this Directors' report.
Auditor
Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
Rounding of amounts
Strategic Energy Resources Limited is a type of Company that is referred to in ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial
report have been rounded to the nearest dollar.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Stuart Rechner
Executive Chairman
18 August 2020
Melbourne
13
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Collins Square
727 Collins Street
GPO Box 4736
Melbourne VIC 3008
T +61 3 8320 2222
Auditor’s Independence Declaration
To the Directors of Strategic Energy Resources Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Strategic
Energy Resources Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have
been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
B A Mackenzie
Partner – Audit & Assurance
Melbourne, 18 August 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556
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In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556
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For personal use only Strategic Energy Resources Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Other income
Interest income
Expenses
Employee benefits expense
Corporate expenses
Exploration expenditure written off
Tenement due diligence and other exploration expenses
Share based payments
Other expenses
Loss before income tax expense
Income tax expense
Consolidated
Note
2020
$
2019
$
5
120,263
-
7,484
24,784
10
27
(144,485)
(220,243)
-
(83,575)
(62,263)
(42,865)
(146,062)
(265,440)
(105,522)
(142,800)
-
(59,805)
(425,684)
(694,845)
6
-
-
Loss after income tax expense for the year attributable to the owners of
Strategic Energy Resources Limited
(425,684)
(694,845)
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Gain on the revaluation of financial assets at fair value through other comprehensive
income, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of
Strategic Energy Resources Limited
(25,000)
36,545
(25,000)
36,545
(450,684)
(658,300)
Cents
Cents
Basic loss earnings per share
Diluted loss earnings per share
26
26
(0.044)
(0.044)
(0.078)
(0.078)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
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Strategic Energy Resources Limited
Statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Other receivables
Prepayments
Total current assets
Non-current assets
Financial assets at fair value through other comprehensive income
Property, plant and equipment
Exploration and evaluation
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Short term borrowings
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
Note
2020
$
2019
$
7
8
9
10
11
12
945,246
70,879
29,476
1,045,601
1,054,254
16,685
17,445
1,088,384
-
3,680
1,619,745
21,735
1,645,160
41,667
6,133
800,677
23,569
872,046
2,690,761
1,960,430
135,882
8,500
144,382
92,138
-
92,138
144,382
92,138
2,546,379
1,868,292
13
14
32,661,027 31,594,519
(23,565,766)
(6,160,461)
352,911
(30,467,559)
2,546,379
1,868,292
The above statement of financial position should be read in conjunction with the accompanying notes
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Strategic Energy Resources Limited
Statement of changes in equity
For the year ended 30 June 2020
Consolidated
Balance at 1 July 2018
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 13)
De-recognition of fair value through other comprehensive
income reserve upon sale
Lapse of options
Contributed Accumulated
equity
$
losses
$
Reserves
$
Total equity
$
31,294,519
(5,745,919)
(23,322,008)
2,226,592
-
-
-
(694,845)
-
-
36,545
(694,845)
36,545
(694,845)
36,545
(658,300)
300,000
-
-
300,000
-
-
44,878
235,425
(44,878)
(235,425)
-
-
Balance at 30 June 2019
31,594,519
(6,160,461)
(23,565,766)
1,868,292
Consolidated
Balance at 1 July 2019
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 13)
Share-based payments (note 27)
De-recognition of fair value through other comprehensive
income reserve upon sale
De-recognition of demerger reserve upon sale
Contributed Accumulated
equity
$
losses
$
Reserves
$
Total equity
$
31,594,519
(6,160,461)
(23,565,766)
1,868,292
-
-
-
(425,684)
-
-
(25,000)
(425,684)
(25,000)
(425,684)
(25,000)
(450,684)
1,066,508
-
-
-
-
62,263
1,066,508
62,263
-
-
(33,333)
33,333
(23,848,081) 23,848,081
-
-
Balance at 30 June 2020
32,661,027
(30,467,559)
352,911
2,546,379
The above statement of changes in equity should be read in conjunction with the accompanying notes
17
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Strategic Energy Resources Limited
Statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Payments to suppliers and employees (inclusive of GST)
Interest received
COVID-19-related government grants
Receipt of R&D tax refund
Consolidated
Note
2020
$
2019
$
(481,471)
7,646
51,483
9,589
(597,091)
24,096
-
-
Net cash used in operating activities
25
(412,753)
(572,995)
Cash flows from investing activities
Payments for financial assets at fair value through other comprehensive income
Payments for property, plant and equipment
Payments for exploration and evaluation
Payments for security deposits
Payments for term deposit
Proceeds from term deposit
Proceeds from sale of investment
9
10
9
-
-
(796,096)
(1,000)
(20,000)
23,569
16,667
(50,000)
(7,359)
(329,589)
-
-
-
48,778
(776,860)
(338,170)
13
1,107,500
(35,395)
8,500
300,000
-
-
1,080,605
300,000
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Cost of capital raising
Proceeds from borrowings
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
(109,008)
1,054,254
(611,165)
1,665,419
Cash and cash equivalents at the end of the financial year
7
945,246
1,054,254
*Cash flows used in exploration and evaluation are presented under operating activities in ASX Quarterly Appendix 5B, as
prescribed in the document. The Company adopted the revised ASX prescribed Appendix 5B during the year, which became
effective from 1 January 2020. However, at the time of adoption not all the past information were reinstated, which resulted
in a difference between the cash flows used in exploration and evaluation in the financial statements and Appendix 5B.
Amounts presented as investing activities in the financial statements and Appendix 5B from March 2020 quarter are
consistent with the Consolidated Entity’s accounting policies for exploration and evaluation expenses.
The above statement of cash flows should be read in conjunction with the accompanying notes
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Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 1. General information
The financial statements cover Strategic Energy Resources Limited as a Consolidated Entity consisting of Strategic Energy
Resources Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in
Australian dollars, which is Strategic Energy Resources Limited's functional and presentation currency.
Strategic Energy Resources Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
Level 4, 100 Albert Road
South Melbourne, VIC 3205
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 18 August 2020. The
Directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective
notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the
Consolidated Entity.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Consolidated Entity:
AASB 16 Leases
The Consolidated Entity has adopted AASB 16 from 1 July 2019. The standard replaced AASB 117 'Leases' and for lessees
eliminates the classifications of operating leases and finance 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
is separately disclosed in financing activities.
On transition, the Consolidated Entity had a low value lease and applying the optional exemptions permitted by AASB 16,
no right-of-use assets and corresponding lease liabilities are recognised.
19
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Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Interpretation 23 Uncertainty over Income Tax Treatments
Interpretation 23 requires the assessment of whether the effect of uncertainty over income tax treatments should be included
in the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates. The
Interpretation outlines the requirements to determine whether an entity considers uncertain tax treatments separately, the
assumptions an entity makes about the examination of tax treatments by taxation authorities, how an entity determines
taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates and how an entity considers changes
in facts and circumstances.
The Consolidated Entity has adopted Interpretation 23 from 1 July 2019, based on an assessment of whether it is ‘probable’
that a taxation authority will accept an uncertain tax treatment. This assessment takes into account that for certain
jurisdictions in which the company operates, a local tax authority may seek to open a company’s books as far back as
inception of the company. Where it is probable, the company has determined tax balances consistently with the tax treatment
used or planned to be used in its income tax filings. Where the company has determined that it is not probable that the
taxation authority will accept an uncertain tax treatment, the most likely amount or the expected value has been used in
determining taxable balances (depending on which method is expected to better predict the resolution of the uncertainty).
There has been no impact from the adoption of Interpretation 23 in this reporting period.
Other accounting pronouncements which have become effective from 1 July 2019 and have therefore been adopted have
not had a significant impact on the Consolidated Entity’s financial results or position.
20
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Going concern
The financial report has been prepared on the going concern basis, which assumes continuity of normal business activities
and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The working capital position as at 30 June 2020 of the Consolidated Entity results in an excess of current assets over current
liabilities of $901,219 (30 June 2019: $996,246). The Consolidated Entity made a loss after tax of $425,684 during the
financial year (2019 loss: $694,845) and had net operating cash outflows of $412,753 (30 June 2019: $572,995). The cash
balances, including term deposits, as at 30 June 2020 was $945,246 (2019: $1,054,254). The continuing viability of the
Consolidated Entity and its ability to continue as a going concern is dependent upon the Consolidated Entity being successful
in its continuing efforts in exploration projects and accessing additional sources of capital to meet the commitments within
one year from the date of signing the financial report.
In assessing the appropriateness of the going concern assumption, the directors have considered the following:
-On 4 June 2020, the Company issued 237,500,000 fully paid ordinary shares (Shares) to investors at an issue price of
$0.0034 (0.34 cents) per Share and raised $807,500.
- As explained in note 24, the Consolidated Entity satisfied the completion conditions on Uley Graphite Project royalty sale
on 20 July 2020 and received the $80,000 cash consideration and $200,000 in Vox Royalty shares with deferred
consideration of $200,000 in Vox shares upon completion of certain commercial Uley production.
- On 12 August 2020 the Company issued 412,500,000 ordinary shares at an issue price of $0.0034 (0.34 cents) per share,
raising $1,402,500, before costs.
The Consolidated Entity is involved in exploration for minerals in Australia. To meet these funding requirements as and when
they fall due the Consolidated Entity may take appropriate steps, including a combination of:
- Raising additional capital through the Company's existing placement capacity
- Subject to negotiation and approval, minimum work requirements may be varied or suspended, and/or permits may be
surrendered or cancelled; and
- Meeting its obligations by farm-out of the Consolidated Entity’s exploration interests.
This financial report has been prepared on a going concern basis which contemplates the continuity of normal business
activities and the realisation of assets and settlement of liabilities in the ordinary course of business. Should the Consolidated
Entity be unable to obtain the funding as described above, there is a material uncertainty as to whether the Consolidated
Entity will be able to continue as a going concern, and therefore, whether it will be required to realise its assets and extinguish
its liabilities other than in the normal course of business and at amounts different from those stated in the financial report.
The financial report does not include any adjustment relating to the recoverability and classification of recorded asset
amounts nor to the amounts and classification of liabilities that may be necessary should the Consolidated Entity be unable
to continue as a going concern. Having assessed the potential uncertainties relating to the Consolidated Entity’s ability to
effectively fund exploration activities and operating expenditures, the Directors believe that the Consolidated Entity will
continue to operate as a going concern for the foreseeable future. Therefore, the Directors consider it appropriate to prepare
the financial statements on a going concern basis.
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic,
which continues to spread globally as well as in Australia. The spread of COVID-19 has caused significant volatility in
Australian and international markets. There is significant uncertainty around the breadth and duration of business disruptions
related to COVID-19 and therefore the Company has taken precautionary measures by temporarily closing the Company’s
office and having arranged the employees to work remotely, as well as curtailing travel. Management believes that this will
allow efforts to continue the feasibility studies and permitting activities. At the date of this report, the impact of these measures
is not expected to significantly impact the completion of the current work being undertaken. However, as the circumstances
continue to evolve, there may be disruptions to the future work timelines if employees, consultants or their respective families
are personally impacted by COVID-19 or if travel and other operational restrictions are not lifted.
Rounding of amounts
Strategic Energy Resources Limited is a type of Company that is referred to in ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial
report have been rounded to the nearest dollar.
21
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Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
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, investment properties, certain classes of property, plant and equipment and derivative financial
instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Consolidated Entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Consolidated Entity only.
Supplementary information about the parent entity is disclosed in note 21.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Strategic Energy Resources
Limited ('Company' or 'parent entity') as at 30 June 2020 and the results of all subsidiaries for the year then ended. Strategic
Energy Resources Limited and its subsidiaries together are referred to in these financial statements as the 'Consolidated
Entity'. A list of subsidiaries is included in note 22. Reporting period and accounting policies of all the subsidiaries are
consistent with the Company.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls an entity
when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Consolidated Entity. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Consolidated Entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
Consolidated Entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Consolidated Entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
22
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Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
A liability is classified as current when: it is either expected to be settled in the Consolidated Entity's normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Joint operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the arrangement. The Consolidated Entity has recognised its share of
jointly held assets, liabilities, revenues and expenses of joint operations. These have been incorporated in the financial
statements under the appropriate classifications.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at
either amortised cost or fair value depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Consolidated Entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it's carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business
model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial
asset represent contractual cash flows that are solely payments of principal and interest.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the Consolidated Entity
intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the Consolidated Entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk
has increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is
recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss
allowance reduces the asset's carrying value with a corresponding expense through profit or loss.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
23
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Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Interest income
Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Consolidated Entity for the annual reporting period ended 30 June 2020. The
Consolidated Entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
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 Consolidated Entity based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the Consolidated Entity 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 which may impact the Consolidated Entity unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Share-based payment transactions
The Consolidated Entity measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Fair value measurement hierarchy
The Consolidated Entity is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices
(unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;
and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant
to fair value and therefore which category the asset or liability is placed in can be subjective.
Income tax
The Consolidated Entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required
in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. The Consolidated Entity recognises liabilities for
anticipated tax audit issues based on the Consolidated Entity's current understanding of the tax law. Where the final tax
outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Consolidated Entity considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
24
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Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the Consolidated Entity will commence commercial
production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources.
Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related
to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only
capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest.
Factors that could impact the future commercial production at the mine include the level of reserves and resources, future
technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the
extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which
this determination is made.
Note 4. Operating segments
During the current financial year the Consolidated Entity operated in one segment being an explorer of base precious metals.
AASB 8 requires operating segments to be identified on the basis of internal reports about the components of the
Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the
segment and to assess its performance. In the current year the board reviews the Consolidated Entity as one operating
segment being mineral exploration within Australia.
Revenue and assets by geographical area
All assets and liabilities and operations are based in Australia.
Accounting policy for operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Note 5. Other income
COVID-19-related government grants
R&D tax refund received
Other income
Consolidated
2020
$
2019
$
110,674
9,589
120,263
-
-
-
Other income
COVID-19-related government grants represent the job keeper and cash flow boost payments received from Federal
Government in response to ongoing novel coronavirus (COVID-19) pandemic. Government grants are recognised in the
financial statements at expected values or actual cash received when there is a reasonable assurance that the Consolidated
Entity will comply with the requirements and that the grant will be received. The Consolidated Entity has recognised its share
of revenues, expenses and expenses reimbursements of joint operations, which give rise to job keeper payments, within
exploration assets in the financial statements.
25
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 6. Income tax
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Share-based payments
Other permanent differences
Impairment of exploration assets
Non assessable income
Non-deductible R&D expenditure
Income tax losses carried forward not taken up as a benefit
Income tax expense
Consolidated
2020
$
2019
$
(425,684)
(694,845)
(117,063)
(191,082)
17,122
27
-
25,485
6,062
-
173
(90,637)
-
-
(68,367)
68,367
(281,546)
281,546
-
-
Consolidated
2020
$
2019
$
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 26% (2019: 27.5%)
28,200,127 27,304,857
7,332,033
7,508,836
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses
can only be utilised in the future if the continuity of ownership test is passed or, failing that, the same business test is passed.
The taxation benefits of tax losses and temporary difference not brought to account will only be obtained if:
(i) the Consolidated Entity derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deductions for the losses to be realised;
(ii) the Consolidated Entity continues to comply with the conditions for deductibility imposed by law; and
(iii) no change in tax legislation adversely affects the Consolidated Entity in realising the benefits from deducting the losses.
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Tax losses (revenue losses)
Temporary differences
Tax losses (capital losses)
Total deferred tax assets not recognised
Consolidated
2020
$
2019
$
7,332,033
(380,765)
2,431,113
7,508,836
(145,791)
1,341,288
9,382,381
8,704,333
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
26
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 6. Income tax (continued)
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
●
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Note 7. Current assets - cash and cash equivalents
Cash at bank
Consolidated
2020
$
2019
$
945,246
1,054,254
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, 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 an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
Note 8. Current assets - Other receivables
Other receivables
GST receivable
Consolidated
2020
$
2019
$
59,564
11,315
1,843
14,842
70,879
16,685
Other receivables include job keeper and cash flow boost payments receivable from Federal Government in response to
ongoing novel coronavirus (COVID-19) pandemic. These amounts are expected to be received between July to October
2020.
Due to the short term nature of the receivables, their carrying value is assumed to be approximately their fair value. No
collateral or security is held. The Consolidated Entity has financial risk management policies in place to ensure that all
receivable are received within the credit time frame.
27
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 8. Current assets - Other receivables (continued)
Accounting policy for trade and other receivables
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Impairment
Allowances for impairment are recognised using an 'expected credit loss' ('ECL') model. 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.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Note 9. Non-current assets - Financial assets at fair value through other comprehensive income
Investment in Pepinnini Lithium Limited
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous
financial year are set out below:
Opening fair value
Transfer of investments in Emperor Energy Limited
Revaluation increments
Disposal of investment in Emperor Energy Limited
Revaluations increments of investments in Quantum Graphite Limited
Disposal of investments in Quantum Graphite Limited
Additions - Investment in Pepinnini Lithium Limited
Revaluation decrements of Pepinnini Lithium Limited
Disposal of investment in Pepinnini Lithium Limited
Closing fair value
Consolidated
2020
$
2019
$
-
41,667
Consolidated
2020
$
2019
$
41,667
-
-
-
-
-
-
(25,000)
(16,667)
-
3,900
1,300
(5,200)
43,578
(43,578)
50,000
(8,333)
-
-
41,667
28
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 9. Non-current assets - Financial assets at fair value through other comprehensive income
(continued)
Investment in Pepinnini Lithium Limited
On 4 March 2019, the Consolidated Entity acquired 16,666,667 fully paid ordinary shares in Pepinnini Lithium Limited (ASX:
PNN) at $0.003. The Consolidated Entity disposed these investments during March 2020 for a cash consideration of $16,667.
Ionic Industries Limited (Ionic)
The Consolidated Entity holds 87,155,625 shares in Ionic Industries Limited (an unlisted company) which have been valued
at $Nil in accordance AASB 13, using Level 3 of the fair value hierarchy- inputs for the asset or liability that are not based on
observable market data (unobservable inputs) as the investment cannot be reliably measured. Ionic completed capital
raisings during the year, however it is not considered significant enough to create a liquidity event nor referenced to any
independent valuation of the intellectual property held by Ionic. As such, the Directors have not placed a value on this
investment until such time as the shares in Ionic can be valued through reference to a liquidity transaction of Ionic or a listing
on the ASX or equivalent.
Gasfields Limited (ASX:GFS)
The Consolidated Entity currently holds 20,000,000 fully paid ordinary shares in Gasfields Limited (ASX:GFS), which have
been valued at $Ni. During the year the ASX delisted GFS from the ASX and therefore management has continued to carry
the investment at Nil value.
Impairment of financial assets
The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the Consolidated Entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk
has increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
Note 10. Non-current assets - exploration and evaluation
Exploration and evaluation - at cost
Consolidated
2020
$
2019
$
1,619,745
800,677
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2018
Expenditure during the year
Exploration expenditure written off
Balance at 30 June 2019
Expenditure during the year
Balance at 30 June 2020
29
Exploration
$
576,610
329,589
(105,522)
800,677
819,068
1,619,745
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 10. Non-current assets - exploration and evaluation (continued)
The exploration and evaluation assets relate to the following areas of interest.
Area of interest
Tenement number
commitments
%
%
Fulfilled Expenditure
Interest
owned
2020
Interest
owned
2019
Myall Creek - South Australia EL6140 (Farm-In Agreement with FMG) Yes
EL5898 (Farm-In Agreement with FMG) Yes
Roopena - South Australia
Yes
EPM15398
Saxby - Queensland
Yes
E70/4793
Ambergate - Western
Australia
Ambergate West - Western
Australia
Billa Kalina - South Australia
East Tennant - Northern
Territory
Saxby North - Queensland
EL6335
EL32109
Yes
Yes
EPM27378
E70/5012
Yes
Yes
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
The recoverability of the carrying amounts of the exploration and evaluation expenditure is dependent on the successful
development and commercial exploitation, or alternatively the sale, of the respective areas of interest. A review of the
Consolidated Entity's exploration licenses was undertaken during the financial year and based on the review management
identified no impairment indicators. Further information on operating activities and development are included in the directors
report.
Accounting policy for exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried
forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through
the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in
an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of
economically recoverable reserves. Where a project or an area of interest has been abandoned or other indicators of
impairment exist, the expenditure incurred thereon is written off in the year in which the decision is made or the impairment
event occurred.
Note 11. Non-current assets - other non-current assets
Security deposits
Other deposits
Consolidated
2020
$
2019
$
1,735
20,000
-
23,569
21,735
23,569
Other deposits represent a term deposit of $20,000 lodged as security over a credit card facility.
Accounting policy for financial assets
Allowances for impairment are recognised using an 'expected credit loss' ('ECL') model. 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.
30
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 12. Current liabilities - trade and other payables
Trade payables
Other payables
Consolidated
2020
$
2019
$
98,280
37,602
66,378
25,760
135,882
92,138
Refer to note 16 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Note 13. Equity - issued capital
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
Ordinary shares - fully paid
1,187,500,000
900,000,000 32,661,027 31,594,519
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Issue of fully paid ordinary shares
Issue of fully paid ordinary shares
Balance
Issue of fully paid ordinary shares
Issue of fully paid ordinary shares
Capital raising costs
1 July 2018
14 August 2018
7 December 2018
30 June 2019
5 July 2019
9 June 2020
840,000,000
44,000,000
16,000,000
900,000,000
50,000,000
237,500,000
-
31,294,519
220,000
80,000
$0.005
$0.005
$0.0060
$0.0034
-
31,594,519
300,000
807,500
(40,992)
Balance
30 June 2020
1,187,500,000
32,661,027
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Capital risk management
The Consolidated Entity's objectives when managing capital are to safeguard its ability to continue as a going concern, so
that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure
to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
31
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 13. Equity - issued capital (continued)
In order to maintain or adjust the capital structure, the Consolidated Entity may, issue new shares or sell assets to reduce
debt.
The Consolidated Entity would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the Company's current share price at the time of the investment.
The entity does not have a defined share buy-back plan.
There is no current intention to incur debt funding on behalf of the Company as on-going exploration expenditure will be
funded via equity or joint ventures with other companies.
The Consolidated Entity is not subject to any externally imposed capital requirements.
Management reviews management accounts on a monthly basis and reviews actual expenditure against budget on a
quarterly basis.
The capital risk management policy remains unchanged from the 30 June 2019 Annual Report.
Accounting policy for issued capital
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.
Note 14. Equity - reserves
Financial assets at fair value through other comprehensive income reserve
Options reserve
Demerger Reserve
Consolidated
2020
$
2019
$
-
352,911
-
(8,333)
290,648
(23,848,081)
352,911
(23,565,766)
Financial assets at fair value through other comprehensive income reserve
The reserve is used to recognise increments and decrements in the fair value of financial assets at fair value through other
comprehensive income.
Options reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their
remuneration, and other parties as part of their compensation for services.
Demerger reserve
This reserve is used to recognise the in-specie distribution to shareholders as a result of the demerger of Quantum Graphite
Limited (ASX: QGL) on 27 April 2012. As the residual investments in QGL were all disposed in full, the demerger reserve
balance was transferred to accumulated losses in full.
32
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 14. Equity - reserves (continued)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Option
Demerger
reserve
$
reserve
$
Financial
assets at fair
value through
other
comprehensiv
e income
reserve
$
Total
$
Balance at 1 July 2018
Revaluation - gross
De-recognition of asset revaluation reserve surplus upon sale
Lapse of options
Revaluation decrements on financial assets at fair value
through other comprehensive income
526,073
-
-
(235,425)
(23,848,081)
-
-
-
-
44,878
(44,878)
-
(23,322,008)
44,878
(44,878)
(235,425)
-
-
(8,333)
(8,333)
Balance at 30 June 2019
De-recognition of reserve upon sale
Share-based payments
Revaluation decrements on financial assets at fair value
through other comprehensive income
De-recognition of asset revaluation reserve surplus upon sale
Balance at 30 June 2020
Note 15. Equity - dividends
290,648
(23,848,081)
- 23,848,081
-
62,263
-
-
352,911
-
-
-
(8,333)
(23,565,766)
- 23,848,081
62,263
-
(25,000)
33,333
(25,000)
33,333
-
352,911
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 16. Financial instruments
Financial risk management objectives
The Consolidated Entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price
risk and interest rate risk), credit risk and liquidity risk. The Consolidated Entity's overall risk management program focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the Consolidated Entity. The Consolidated Entity uses different methods to measure different types of risk to which it is
exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks,
ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Consolidated Entity and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Consolidated Entity's
operating units. Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Consolidated Entity is not exposed to foreign currency risk.
Foreign exchange risk may arise from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
33
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 16. Financial instruments (continued)
Price risk
The Consolidated Entity is exposed to price risk in relation to the shares that it owned in other listed entities at 30 June 2019
(2020: Nil).
Consolidated - 2019
Shares in Listed Entities
Average price increase
Effect on
equity $
% change
Average price decrease
Effect on
equity $
% change
5%
20,833
5%
(20,833)
Interest rate risk
The Consolidated Entity is not exposed to significant interest rate risk as deposits are held with established banks with
interest rates that are in line with the RBA and other bank rates. The Consolidated Entity doesn't have any interest bearing
liabilities.
As at the reporting date, the Consolidated Entity had the following variable interest rates:
Consolidated
2020
2019
Weighted
average
interest rate
%
Weighted
average
interest rate
%
Balance
$
Balance
$
Cash at bank and in hand
0.05%
945,246
1.34%
1,054,254
Net exposure to cash flow interest rate risk
945,246
1,054,254
Below is a sensitivity analysis of interest rates at a rate of 50 basis points on cash at bank for the 2019 financial year. The
impact would not be material on bank balances held at 30 June 2020. The percentage change is based on expected volatility
of interest rates using market data and analysis forecasts.
Consolidated - 2019
Basis points
change
profit before
tax $
Effect on
equity $
Basis points
change
profit before
tax $
Effect on
equity $
Basis points increase
Effect on
Basis points decrease
Effect on
Cash at bank
50
5,217
5,217
50
(5,217)
(5,217)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Consolidated Entity. The Consolidated Entity has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The Consolidated Entity obtains guarantees where appropriate to
mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to
the financial statements. The Consolidated Entity does not hold any collateral.
The Consolidated Entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade
receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are
considered representative across all customers of the Consolidated Entity based on recent sales experience, historical
collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
34
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 16. Financial instruments (continued)
Liquidity risk
Vigilant liquidity risk management requires the Consolidated Entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Consolidated Entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the Consolidated Entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Other loans
Total non-derivatives
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade and other payables
Total non-derivatives
Weighted
average
interest rate
%
Remaining
contractual
maturities
$
1 year or less
$
-
-
135,882
8,500
144,382
135,882
8,500
144,382
Weighted
average
interest rate
%
Remaining
contractual
maturities
$
1 year or less
$
-
92,138
92,138
92,138
92,138
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 17. Key management personnel disclosures
Directors
The following persons were Directors of Strategic Energy Resources Limited during the financial year:
Mr S Rechner (Executive Chairman)
Mr H Kaplan (Non-Executive Director)
Dr D DeTata (Non-Executive Director)
35
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 17. Key management personnel disclosures (continued)
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Consolidated
Entity is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Note 18. Remuneration of auditors
Consolidated
2020
$
2019
$
405,615
15,734
62,263
396,376
15,236
-
483,612
411,612
During the financial year the following fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd, the
auditor of the Company:
Audit services - Grant Thornton Audit Pty Ltd
Audit or review of the financial statements
Note 19. Commitments
Exploration Commitments
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
Consolidated
2020
$
2019
$
33,500
33,500
Consolidated
2020
$
2019
$
353,642
1,640,358
400,878
84,311
1,994,000
485,189
The commitments above represent the minimum spending required for each areas of interest owned by the Consolidated
Entity and exclude formed-out exploration interests, which are not managed by the Consolidated Entity. Refer note 10 to the
financial statements for further information on areas of interest owned by the Consolidated Entity.
In order to maintain current rights to tenure to exploration and mining tenements, the Consolidated Entity has the above
exploration expenditure requirements up until expiry of leases. These obligations, which may be varied from time to time and
which are subject to renegotiation upon expiry of the lease are not provided for in the financial report and are payable.
Within the mineral industry it is common practice for companies to farm-out, transfer or sell a portion of their exploration
rights to third parties or to relinquish some exploration and mining tenements altogether, and as a result obligations will be
significantly reduced or extinguished altogether. The farm-in partners also expended funds on the permits during the year
which can result in work programs for certain years being met.
36
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 20. Related party transactions
Parent entity
Strategic Energy Resources Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 22.
Joint operations
Interests in joint operations are set out in note 23.
Key management personnel
Disclosures relating to key management personnel are set out in note 17 and the remuneration report included in the
Directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Payment for geological services*
Consolidated
2020
$
2019
$
240,000
236,000
*
During the year the Company made payments to Diplomatic Exploration Pty Ltd, a related entity of Mr Stuart Rechner.
The entity provided exploration services to the Company and the Consolidated Entity throughout the year.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables:
Trade and other payables to directors
Consolidated
2020
$
2019
$
32,507
-
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Current borrowings:
Loan from directors
Consolidated
2020
$
2019
$
8,500
-
During the year Directors advanced loans (all Directors participating) to the Company for working capital purposes which
were due to be repaid on or before 31 December 2020. The Loans were unsecured and did not bear any interest. The
outstanding directors loans as at 30 June 2020 were $8,500 and were repaid in full after the year end.
Terms and conditions
All transactions with related parties are entered into on normal commercial terms and conditions.
37
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 21. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Financial assets at fair value through other comprehensive income reserve
Options reserve
Accumulated losses
Total equity
Parent
2020
$
2019
$
(425,684)
(694,842)
(425,684)
(694,842)
Parent
2020
$
2019
$
1,045,601
1,088,373
2,690,761
1,960,434
144,382
92,138
144,382
92,138
32,661,027 31,594,520
(8,333)
-
290,648
352,911
(30,008,539)
(30,467,559)
2,546,379
1,868,296
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 2020 and 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 2020 and 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 2020 and 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Consolidated Entity, as disclosed in note 2,
except for the following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as revenue by the parent entity and its receipt may be an indicator
of an impairment of the investment.
38
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 22. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 2:
Name
Strategic Nickel Pty Ltd
Strategic Sands Pty Ltd
Principal place of business /
Country of incorporation
Australia
Australia
Ownership interest
2019
2020
%
%
100%
100%
100%
100%
Note 23. Farm-outs in the exploration and evaluation phase
The Consolidated Entity had interests in unincorporated joint operations at 30 June 2020 as follows;
Name
Principal place of business /
Country of incorporation
Myall Creek (EL6140) - South Australia
Roopena (EL5898) - South Australia
Australia
Australia
Ownership interest
2019
2020
%
%
100.00%
100.00%
100.00%
100.00%
Myall Creek Project – on 21 June 2019, the Company entered in to a farm-out agreement with FMG Resources Pty Ltd, a
subsidiary of Fortescue Metals Group Limited (ASX: FMG), for drilling at Myall Creek (EL6140 and EL5898). FMG will be the
operator during the period and committed to spend $1.5m on exploration over 5 years, including a minimum of 1500m of
drilling at Myall Creek to earn an 80% interest in the project.
The Consolidated Entity does not record any expenditure made by the farmee on its accounts. It does not recognise any
gains or losses on its exploration and evaluation farm-out arrangements, but redesignates any costs previously capitalised
in relation to the whole interest as relating to the partial interest retained. Any cash consideration received directly from the
farmee credited against the cost previously capitalised in relation to the whole interest with any excess accounted by the
farmor as a gain on disposal.
Note 24. Events after the reporting period
On 16 June 2020, the Consolidated Entity entered into a Royalty Sale and Purchase Agreement to sell its 1.5% Gross
Revenue Royalty on production from the Uley Graphite Project in South Australia to Vox Royalty Australia Pty Ltd (Vox
Australia), a wholly owned subsidiary of Vox Royalty Corp (TSXV:VOX) (Vox Royalty) for total consideration of $500,000.
The consideration comprises $80,000 cash, $200,000 in Vox Royalty shares upon satisfaction of certain completion
conditions and $220,000 in Vox Royalty shares upon commercial production at Uley.
The Consolidated Entity satisfied the completion conditions on 20 July 2020 and received the $80,000 cash consideration
and $200,000 in Vox Royalty shares.
On 12 August 2020 the Company issued 412,500,000 ordinary shares at an issue price of $0.0034 per share, raising
$1,402,500, before costs. Further, the Company issued 2,000,000 options to employees at $0.01 with expiry date of 12
December 2022.
No other matter or circumstance has arisen since 30 June 2020 that has significantly affected, or may significantly affect the
Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial
years.
39
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 25. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Exploration costs written off
Change in operating assets and liabilities:
Increase in other receivables
Increase in prepayments
Increase in trade and other payables
Net cash used in operating activities
Note 26. Loss per share
Consolidated
2020
$
2019
$
(425,684)
(694,845)
2,453
62,263
-
1,226
-
105,522
(54,929)
(12,031)
15,175
(5,532)
(6,703)
27,337
(412,753)
(572,995)
Consolidated
2020
$
2019
$
Loss after income tax attributable to the owners of Strategic Energy Resources Limited
(425,684)
(694,845)
Weighted average number of ordinary shares used in calculating basic earnings per share
963,729,508
887,561,644
Weighted average number of ordinary shares used in calculating diluted earnings per share
963,729,508
887,561,644
Number
Number
Basic loss earnings per share
Diluted loss earnings per share
Diluted loss per share
Cents
Cents
(0.044)
(0.044)
(0.078)
(0.078)
The options held by option holders have not been included in the weighted average number of ordinary shares for the
purposes of calculating diluted EPS as they do not meet the requirements for inclusion in AASB 133 “Earnings per Share”.
The options are non-dilutive as the Consolidated Entity has generated a loss for the year.
As at 30 June 2020, the Consolidated Entity had 85,500,000 (2019: 62,500,000) unlisted options on issue, which are
exercisable at $0.01 (1 cent) per option expiring on or before 28 November 2020 and 12 December 2022. These options
have not been included in the above calculation as explained above.
Accounting policy for earnings per share
Basic loss per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Strategic Energy Resources Limited,
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 financial year.
40
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 26. Loss per share (continued)
Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Note 27. Share-based payments
Set out below are summaries of options granted under the plan:
2020
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Forfeited
27/11/2017
17/12/2019
28/11/2020
12/12/2022
$0.01
$0.01
62,500,000
-
62,500,000
-
20,000,000
20,000,000
-
-
-
Balance at
the end of
the year
-
-
-
62,500,000
20,000,000
82,500,000
Weighted average exercise price
$0.0100
$0.0100
$0.0000
$0.0000
$0.0100
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Forfeited
Balance at
the end of
the year
04/05/2016
27/11/2017
30/04/2019
28/11/2020
$0.0232
$0.01
21,500,000
62,500,000
84,000,000
-
-
-
-
-
-
(21,500,000)
-
(21,500,000)
-
62,500,000
62,500,000
Weighted average exercise price
$0.013
$0.00
$0.00
$0.0232
$0.01
A total of 20,000,000 unlisted options were issued to Directors and Key Management Personal during the year (2019:Nil).
Options issued during the financial year have been valued using the black scholes method and the Consolidated Entity
recognised share based payment expenses of $62,263 (2019: Nil).
Set out below are the options exercisable at the end of the financial year:
Grant date
Expiry date
27/11/2017
17/12/2019
28/11/2020
12/12/2022
2020
2019
Number
Number
62,500,000
20,000,000
62,500,000
-
82,500,000
62,500,000
For the options granted during 2018 and current financial year, the Consolidated Entity used a Black-Scholes valuation
model, with the following inputs used to determine the fair value at grant date:
Grant date
Expiry date
Share price Exercise
at grant date
price
Expected
volatility
Risk-free
Fair value
interest rate at grant date
27/11/2017
17/01/2019
28/11/2020
12/12/2022
$0.007
$0.005
$0.01
$0.01
122.00%
126.00%
1.83%
0.70%
$0.005
$0.003
A total of 20,000,000 (2019: Nil) options were granted to Directors during financial year, all of which vested immediately. The
total share based payment expenses of $62,263 (2019: Nil) was recognised during financial year.
41
For personal use only
Strategic Energy Resources Limited
Notes to the financial statements
30 June 2020
Note 27. Share-based payments (continued)
Accounting policy for share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the Consolidated Entity receives the services that entitle the employees to receive payment. No account is taken of
any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
●
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Consolidated Entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Consolidated Entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
42
For personal use only
Strategic Energy Resources Limited
Directors' declaration
30 June 2020
In the Directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Consolidated Entity's financial position as
at 30 June 2020 and of its performance for the financial year ended on that date; and
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 required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Stuart Rechner
Executive Chairman
18 August 2020
Melbourne
43
For personal use only
Grant Thornton Audit Pty Ltd
Level 22 Tower 5
Collins Square
727 Collins Street
GPO Box 4736
Melbourne VIC 3008
T +61 3 8320 2222
Independent Auditor’s Report
To the Members of Strategic Energy Resources Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Strategic Energy Resources Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement
of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary
of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements, which indicates that the Group incurred a net loss of $484,867 during
the year ended 30 June 2020, and had a net operating cash outflows of $412,753. As stated in Note 2, these events or
conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists that may cast doubt on the
Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556
389 ‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory
services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a
member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and
each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to
clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or
omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN
41 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional
Standards Legislation.
www.grantthornton.com.au
For personal use only
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the
matters described below to be the key audit matters to be communicated in our report.
Key audit matter
How our audit addressed the key audit matter
Exploration and evaluation assets – Note 10
At 30 June 2020 the carrying value of exploration and
evaluation assets was $1,619,745. During the year
management did not recognise an impairment loss on these
assets.
In accordance with AASB 6 Exploration for and Evaluation of
Mineral Resources, the Group is required to assess at each
reporting date if there are any triggers for impairment which
may suggest the carrying value is in excess of the recoverable
value.
The process undertaken by management to assess whether
there are any impairment triggers in each area of interest
involves an element of management judgement.
This area is a key audit matter due to the significant
judgement involved in determining the existence of
impairment triggers.
Our procedures included, amongst others:
obtaining the management reconciliation of capitalised
exploration and evaluation expenditure and agreeing to
the general ledger;
reviewing management’s area of interest
considerations against AASB 6;
conducting a detailed review of management’s
assessment of trigger events prepared in accordance
with AASB 6 including;
o
o
o
tracing projects to statutory registers, exploration
licenses and third party confirmations to
determine whether a right of tenure existed;
enquiry of management regarding their intentions
to carry out exploration and evaluation activity in
the relevant exploration area, including review of
management’s budgeted expenditure;
understanding whether any data exists to
suggest that the carrying value of these
exploration and evaluation assets are unlikely to
be recovered through development or sale;
assessing managements evaluation of potential
impairment triggers; and
assessing the appropriateness of the related financial
statement disclosures.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
For personal use only Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Strategic Energy Resources Limited, for the year ended 30 June 2020
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
B A Mackenzie
Partner – Audit & Assurance
Melbourne, 18 August 2020
For personal use only Strategic Energy Resources Limited
Shareholder information
30 June 2020
The shareholder information set out below was applicable as at 17 August 2020.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Number
of holders
of ordinary
shares
Total
units
6,956
59,649
424,876
26,361,265
84
18
51
439
853 1,573,147,254
%
0.00
0.00
0.03
1.65
98.32
Number
of holders
of unlisted
options
Total
units
-
-
-
-
-
-
-
-
6 84,500,000
%
-
-
-
-
100.00
1,436 1,600,000,000 100.00
6 84,500,000
100.00
Holding less than a marketable parcel
408
-
-
-
-
-
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
Number held
shares
issued
147,058,823
90,000,000
88,823,530
79,411,765
72,433,380
64,011,734
40,000,000
36,764,706
33,823,529
30,000,000
30,000,000
28,348,647
25,000,000
21,900,000
14,421,664
13,449,610
15,692,626
12,376,709
11,354,100
10,611,110
9.19
5.63
5.55
4.96
4.53
4.00
2.50
2.30
2.11
1.88
1.88
1.77
1.56
1.37
0.90
0.84
0.98
0.77
0.71
0.66
865,481,933
54.09
Abadi Investments Pty Ltd
Pillage Investments Pty Ltd
E R C Australasia Pty Ltd
Newpuzzle Holdings Pty Ltd
1215 Capital Pty Ltd
Omen Pty Ltd
Mr Nicolas Terranova
National Nominees Limited
Mr Zhongming Hong
Kslcorp Pty Ltd
Osmium Holdings Pty Ltd
Hongmen Pty Ltd
George Wa Pty Ltd
Mr Mark Anthony Broglio
J P Morgan Nominees Australia Pty Limited
Mr Michael Francis O'Brien
Spiceme Capital Pty Ltd
BNP Paribas Nominees Pty Ltd
MS CHUNYAN NIU
Mr Walid Khnaizer
47
For personal use only
Strategic Energy Resources Limited
Shareholder information
30 June 2020
Unquoted equity securities
Options over ordinary shares issued
Osmium Holdings Pty Ltd
Harshell Investments Pty Ltd
George WA Pty Ltd and David DeTata
Substantial holders
Substantial holders in the Company are set out below:
Datt Group
Anthony Rechner
Zhongming Hong and associated entities
Graeme Kirk
Number
on issue
Number
of holders
84,500,000
6
Options over
Number held % of total
options
32,500,000
22,000,000
28,000,000
38.46
26.04
31.14
Ordinary shares
% of total
Number held
shares
issued
183,823,529
155,835,264
141,583,941
120,000,000
11.49
9.74
8.85
7.50
Director Nomination
The Company will hold its Annual General Meeting of shareholders on 18 November 2020. The Company also advises that
in accordance with ASX Listing Rule 14.5 and the Company’s constitution the Closing Date for receipt of nominations for the
position of Director is Wednesday, 30 September 2020. Any nominations must be received in writing no later than 5.00pm
(Melbourne time) on this date at the Company’s Registered Office.
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Unlisted options
The unlisted options on issue do not carry any voting rights.
Tenements
Description
Myall Creek - South Australia
Roopena - South Australia
Saxby - Queensland
Ambergate - Western Australia
Ambergate West - Western Australia
Billa Kalina - South Australia
East Tennant - Northern Territory
Saxby North - Queensland
Tenement number
EL6140 (Farm-In Agreement with FMG)
EL5898 (Farm-In Agreement with FMG)
EPM15398
E70/4793
E70/5012
EL6335
EL32109
EPM27378
48
Interest
owned %
100
100
100
100
100
100
100
100
For personal use only