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Star Phoenix Group (STA)

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Thursday 28 April, 2022

Star Phoenix Group

Half-Year Report Ended 31 December 2021

RNS Number : 7598J
Star Phoenix Group Ltd
28 April 2022
 

Star Phoenix Group Ltd

("Star Phoenix" or "the Company")

HALF-YEAR REPORT FOR THE 6 MONTHS ENDED 31 DECEMBER 2021

Star Phoenix, an AIM listed company (AIM: STA) focused on growth through attractive opportunities, today releases its unaudited half-year report for the 6 months ending 31 December 2021.

 

Contact Details

 

Star Phoenix Group Ltd

Lubing Liu (Company Secretary)

e.   [email protected]

t.     +44 (0)20 3865 8430

WH Ireland Limited (Nominated Adviser and Broker)

James Joyce / Ben Good

t.     +44 (0)20 7220 1666

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

About this Report

This unaudited half-year report is a summary of Star Phoenix Group Ltd ("Star Phoenix") operations, activities and financial position for the half-year ended 31 December 2021. It complies with Australian reporting requirements. Star Phoenix (ABN 88 002 522 009) is a company limited by shares and is incorporated and domiciled in Australia.

 

Unless otherwise stated in this report, all references to Star Phoenix, the Group, the Company, we, us and our, refer to its controlled entities as a whole. References to the half-year or period are to the half-year ended 31 December 2021. All dollar figures are expressed in United States currency unless otherwise stated.

Directors' Report

The Directors of Star Phoenix and the entities it controls (together, the "Group") present the financial report for the half-year ended 31 December 2021.

Directors

The persons who were Directors at any time during or since the end of the half-year are:

Name

Position

Mr Zhiwei (Kerry) Gu 

Executive Chairman

Mr Lubing Liu

Executive Director and Chief Operating Officer

Dr Mu (Robin) Luo

Non-Executive Director

 

The Directors were in office for the entire period unless otherwise stated.

Principal activities

During the half-year, the Company's main focus was on securing new attractive acquisition and investment opportunities to provide future growth and value for the Company and its shareholders. In addition, the Company's efforts were aimed at divesting rigs and equipment under Range Resources Drilling Services Limited and resolving matters in relation to its legacy assets and transactions.

Dividends

No dividends have been declared, provided for or paid in respect of the half-year ended 31 December 2021 (half-year ended 31 December 2020: Nil).

Financial position

The loss for the financial half-year ended 31 December 2021 amounted to US$124,732 (loss for half-year ended 31 December 2020: US$2,221,335).

At 31 December 2021, the Group had net liabilities of US$5,143,286 (30 June 2021: net liabilities of US$4,685,676) and cash of US$1,517,581 (30 June 2021: US$1,911,072).

Operational and Corporate Review

New acquisition opportunities

The Company's key focus remains on securing new attractive acquisition opportunities to provide future growth and value for the Company and its shareholders. During the previous 12 months, the Company had reviewed significant number of new projects and investment opportunities in the energy sector including renewable energy, in addition to oil & gas. Currently, a potential hydrogen opportunity is under a non-binding agreement and some other technical and commercial discussions are ongoing with several parties in relation to new projects in the energy sector. The Directors are confident that these discussions will eventuate in securing a new project for the Company on attractive terms as long as new funds are available.

Oilfield services business

During the half-year, the Company took necessary steps to further cut the ongoing costs of its oilfield services business in Trinidad ("Range Resources Drilling Services Limited" or "RRDSL") in light of the COVID-19 pandemic.

To provide additional cashflow and to strengthen the financial position, the Company achieved a dry lease agreement at a rate of approximately US$15,000 per month commencing July 2021 until March 2022 and also completed the sale of four smaller production rigs and equipment for a total sum of US$211,517.

Outstanding payable from LandOcean

On 14 July 2021, the Company announced that its legal advisers Dentons UK and Middle
East LLP have now filed an arbitration request in the London Court of International
Arbitration ("LCIA"), which officially marks commencement of arbitration proceedings against LandOcean.   The final court hearing is scheduled for May 2022 by LCIA and the decision of Stage 1 of the Arbitration will be most likely made by LCIA during the final court hearing if no other circumstances change in the following months.

During the half-year, the Group has been dealing with LandOcean with this case. At the time of this report, an agreement has not been reached between the parties.  Although the receivable amount was fully impaired, the Company remains confident that at least part of these sums will be recovered after the final court hearing in May 2022. 

COVID-19 impact

The impact of the COVID-19 pandemic is ongoing and it has impacted the Group financially. It is not practicable to estimate the potential impact as the situation is continuously developing and is dependent on measures imposed by the governments of different countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.

Termination of consultancy agreement

 

On 28 July 2021, the company advised that it has terminated the consultancy agreement with Fire Phoenix Ltd (the "Consultant"), by serving a 30-day written notice to the Consultant.

Full terms of the consultancy agreement were provided in the Company's announcement of 10 November 2020.

Management Changes

 

On 27 August 2021, the Company  announced that, pursuant to the Company's restructuring, the Directors made a decision to implement changes to the management team. As a result, a mutual agreement was reached for Mr Theo Eleftheriades, the Chief Financial Officer and Ms Evgenia Bezruchko, the Group Corporate Development Manager and Joint Company Secretary to cease their employment in their current roles.

 

The Board of Directors approved the non-Board appointment of Mr Harry Liu as Chief Financial Officer. All of the management changes came into effect on 1 September 2021.

 

Result of special general meeting

The Board is pleased to advise that following the General Meeting held on 10 December 2021, all of the resolutions relating to the proposed appointments of director nominees were lost, therefore the composition of the Board remains unchanged.

Events subsequent to reporting date

Oilfield services business

The Company engaged an independent specialist broker to assist with the sale of the remaining seven rigs and related equipment. Whilst the marketing campaign is currently underway (there being no guarantee that it will eventuate in sale agreements being reached), RRDSL has just completed a dry lease agreement of Rig 6 with a lessee and are discussing potential dry lease agreements with several parties for some of the rigs which the Directors expect will generate additional revenue for the Company in next 12 months.

Georgia litigation

The Company and Strait Oil and Gas Limited ("SOG"), a private company incorporated in Gibraltar, in which Star Phoenix holds a 65% interest had been working with their legal advisers (the "Advisers")on progressing an arbitration claim against the government of Georgia.

Further to the Company's announcements, negotiations with parties for securing funds to commence the  Georgia  litigation process are still in progress. However, progress in respect of the arbitration claim is taking longer than originally anticipated due to the disruption resulting from the COVID-19 pandemic. The Company continues to be advised by  Enyo Law LLP  in relation to this process.

 

 

 

Zhiwei Gu

Chairman

 

 

Dated this 28 day of April 2022

Consolidated Statement of Profit or Loss and Other Comprehensive Income

 

Note

Consolidated

6 months ended 31 December

2021 (US$)

6 months ended 31 December 2020 (US$)

(Restated)*

Revenue from continuing operations

 

-

-

 

 

 

 

 

 

 

 

Other income and expenses from continuing operations

Other income

3/4b

-

54,630

Net finance income/(costs)

3/4b

1,541

8,332

Foreign exchange (loss)/gain

3

(7,372)

251,528

General and administration expenses

4c

(585,637)

(1,307,664)

Impairment of current assets

4d

-

(1,722,462)

Loss before income tax expense from continuing operations

 

(591,468)

(2,715,636)

 

 

 

 

Income tax (expense)/credit

 

-

-

Loss after income tax from continuing operations

 

(591,468)

(2,715,636)

Gain from discontinued operations, net of tax

6

466,736

494,301

Loss for the period attributable to equity holders of Star Phoenix Group Ltd

 

(124,732)

(2,221,335)

 

 

 

 

Other comprehensive income

Items that may be reclassified to profit or loss

Exchange differences on translation of foreign operations

 

(332,878)

(121,313)

Other comprehensive (loss)/income for period, net of tax

 

(332,878)

(121,313)

Total comprehensive loss attributable to equity holders of Star Phoenix Group Ltd

 

(457,610)

(2,342,648)

 

 

 

 

Loss per share from continuing operations attributable to the ordinary equity holders of the Company

Basic loss per share

 

(0.004)

(0.02)

Diluted loss per share

 

N/A

N/A

Loss per share from discontinued operations attributable to the ordinary equity holders of the Company

Basic gain/(loss) per share

 

0.003

0.003

Diluted loss per share

 

N/A

N/A

 

*Refer to note 2a for detailed information on restatement of comparatives

 

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

Consolidated Statement of Financial Position

 

Note

Consolidated

 

31 December

2021

(US$)

30 June 2021

(Restated US$)* 

30 June 2020

(Restated

US $)*

Assets

 

Current assets

 

Cash and cash equivalents

 

1,517,581

1,911,072

3,164,752

Trade and other receivables

8

119,087

103,864

2,248,359

Assets  classified as held for sale

7a

4,193,706

4,249,038

7,922,861

Total current assets

 

5,830,374

6,263,974

13,335,972

 

 

 

 

 

Non-current assets

 

Right of use asset

 

-

63,333

183,333

Property, plant and equipment

9

75,262

83,624

100,349

Total non-current assets

 

75,262

146,957

283,682

Total assets

 

5,905,636

6,410,931

13,619,654

 

 

 

 

 

Liabilities

 

 

 

 

Current liabilities

 

Trade and other payables

10

4,803,720

4,849,906

4,791,791

Liabilities directly associated with assets classified as held for sale

7b

449,154

450,653

1,154,300

Provisions

11

5,796,048

5,796,048

5,991,944

Total current liabilities

 

11,048,922

11,096,607

11,938,035

 

 

 

 

 

Non-current liabilities

 

Trade and other payables

 

-

-

296,245

Total non-current liabilities

 

-

-

296,245

Total liabilities

 

11,048,922

11,096,607

11,234,280

 

 

 

 

 

Net (liabilities)/assets

 

(5,143,286)

(4,685,676)

1,385,374

 

 

 

 

 

Equity 

 

Contributed equity

12

388,570,504

388,570,504

388,383,974

Reserves

 

2,693,666

23,400,370

23,389,048

Accumulated losses

 

(396,407,456)

(416,656,550)

(410,387,648)

Total equity

 

(5,143,286)

(4,685,676)

1,385,374

 

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

 

*Refer to note 2a for detailed information on restatement of comparatives

 

 

 

Consolidated Statement of Changes in Equity

   

 

 

Contributed equity (US$)

Accumulated losses (US$)

Foreign currency translation reserve (US$)

Share-based payment reserve (US$)

Option premium reserve (US$)

Total equity (US$)

Balance at 1 July 2020-originally reported

 

388,383,974

(409,284,204)

3,015,222

8,316,464

12,057,362

2,488,818

Adjustment due to prior period error ( refer note 2a)

 

-

(1,103,444)

-

-

-

(1,103,444)

Balance at 1 July 2020-restated

 

388,383,974

(410,387,648)

3,015,222

8,316,464

12,057,362

1,385,374

Exchange difference on translation of foreign operations

 

-

-

(121,313)

-

-

(121,313)

Loss attributable to the members of the company

 

-

(2,715,636)

-

-

-

(2,715,636)

Profit from discontinued operations-originally reported

 

-

585,702

-

-

-

585,702

Adjustment due to prior period error ( refer note 2a)

 

-

(91,401)

-

-

-

(91,401)

Transactions with owners in their capacity as owners

 

 

 

 

Issue of share capital

 

37,200

-

-

-

-

37,200

Balance at 31 December 2020

 

388,421,174

(412,608,983)

2,893,909

8,316,464

12,057,362

(920,074)

 

 

 

 

 

 

 

 

 

Balance at 1 July 2021-originally reported

 

388,570,504

(415,370,303)

3,026,544

8,316,464

12,057,362

(3,399,429)

 

Adjustment due to prior period error ( refer note 2a)

 

-

(1,286,247)

-

-

-

(1,286,247)

 

Balance at 1 July 2021-restated

 

388,570,504

(416,656,550)

3,026,544

8,316,464

12,057,362

(4,685,676)

 

Exchange difference on translation of foreign operations

 

-

-

(332,878)

-

-

(332,878)

 

Loss from contiuing operations

 

-

(591,468)

-

-

-

(591,468)

 

Profit from discontinued operations

 

-

466,736

-

-

-

466,736

 

Transfer reserves to accumlated loss

 

-

20,373,826

-

(8,316,464)

(12,057,362)

-

 

Transactions with owners in their capacity as owners

 

Issue of share capital

 

-

-

-

-

-

-

 

Balance at 31 December 2021

 

388,570,504

(396,407,456)

2,693,666

-

-

(5,143,286)

 

                     

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Consolidated Statement of Cash Flows

 

Consolidated

6 months ended 31 December

2021 (US$)

6 months ended 31 December 2020 (US$)

Receipts from customers

130,524

119,862

Payments to suppliers and employees

(869,743)

(971,781)

Income taxes (paid)/received

(22,889)

(75,521)

Payments to related companies

(17,893)

(174,142)

Other receipts

32

54,630

Net cash outflow from operating activities

(779,969)

(1,046,952)

 

 

 

Proceeds from disposal of property, plant and equipment

211,517

248,585

Receipts from related companies

-

278,010

Net cash inflow/(outflow) from investing activities

211,517

526,595

 

 

 

Receipts from share issue

-

-

Interest (paid)/received and other finance costs received/(paid)

(1,584)

(993)

Net cash inflow/(outflow) from financing activities

(1,584)

(993)

 

 

 

Net decrease in cash and cash equivalents

(570,036)

(521,350)

Net foreign exchange differences

176,545

89,069

Cash and cash equivalents at beginning of period

1,911,072

3,164,752

Cash and cash equivalents at end of period

1,517,581

2,732,471

 

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Notes to Consolidated Financial Statements

Note 1: Significant accounting policies

These general purpose financial statements for the interim half-year reporting period ended 31 December 2021 have been prepared in accordance with Australian Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 'Interim Financial Reporting'.

 

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2021 and any public announcements made by the company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

 

The principal accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated.

 

New and 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. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.

Going concern

The Group's net loss after taxation attributable to the members of Star Phoenix Group Ltd for the period end to 31 December 2021 was US$124,732 (loss for half-year ended 31 December 2020: US$2,221,335). The Group also reports a net liability position of US$4,400,572 (30 June 2021: net liability of US$3,942,962) and cash of US$1,517,581 (30 June 2021: US$1,911,072).

 

These conditions indicate a material uncertainty that may cast significant doubt about the Group's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

 

The ability of the group to continue as a going concern is principally dependent upon:

-  The Group receiving funds from the disposal of the remaining assets classified as held for sale;

The Group's ability to raise additional funds through equity or debt financing;

-  The Group achieving a favourable outcome in regards to the Landocean Arbitration and/or being ableto negotiate a repayment plan with the tax authorities both in Australia and Trinidad in regards to settlement of the outstanding withholding tax balances.

 

The financial statements have been prepared on the basis that the group is a going concern, which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business.

 

The Directors believe that sufficient funds will be available to meet the Group's working capital requirements and to continue operations in the normal course of business as at the date of this report, due to the following factors:

-  Expecation to raise funds through the disposal of assets held for sale at period end;

-  The ability to raise additional capital through equity or debt financing;

-  Achieve a favourable outcome in relation to ongoing litigation for amounts the Group intends to recover from Land Ocean(also refer Note 14 Subsequent events) which will be used to settle the  witholding tax liabilities as disclosed in Note 10 Other liabilities $3,693,416 . Should the case outcome with Landocean be not in favour of the group, the Directors expect to be able to negotiate with the tax authorities both in Australia and Trinidad to a repayment plan to settle these liabilities.

 

In the event that the Company is not able to realise the above factors or secure additional funds and secure new projects, it casts significant doubt on the ability of the Group to continue as Going concern.

 

Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business and at amounts that differ from those stated in the financial statements.

 

The financial report does not include any adjustments relating to the amounts or classification of recorded assets or liabilities that might be necessary if the Group does not continue as a going concern.

 

Non-current assets classified as held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.  They are measured at the lower of their carrying amount and fair value less costs to sell.  For non-current assets to be classified as held for sale, they must be available for immediate sale in their present condition and their sale must be highly probable.

An impairment loss is recognised for any initial or subsequent write down of the non-current assets to fair value less costs to sell.  A gain is recognised for any subsequent increases in fair value less costs to sell of a non-current asset, but not in excess of any cumulative impairment loss previously recognised.

Non-current assets are not depreciated or amortised while they are classified as held for sale.  Interest and other expenses attributable to the liabilities of assets held for sale continue to be recognised.

Non-current assets classified as held for sale are presented separately on the face of the consolidated statement of financial position, in current assets.  The liabilities of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current liabilities.

 

Discontinued operations

A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

· represents a separate major line of business or geographical area of operations;

· is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; and

· is a subsidiary acquired exclusively with a view to re-sale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale.

When an operation is classified as a discontinued operation, the comparative consolidated statement of profit or loss and other comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative year.

 

Note 2: Significant estimates and judgements

Impairment of rigs and related inventory

At 31 December 2021, the Directors did not deem necessary to undertake an impairment assessment during the reporting period as per AASB 136 as no impairment indicators were noted. The basis of the recoverable value remains the same as at 30 June 21 and the Company continues the sale process of the remaining three production and five drilling rigs.

 

Deferred tax liability

The carrying value of the deferred tax liability is US$449,153 at 31 December 2021. In the event that the manner by which the carrying value of these assets is recovered differs from that which is assumed for the purpose of this estimation, the associated tax charges may be significantly less than this amount.

Recoverability of deferred tax assets

Deferred tax assets are recognised only if it is probable that future taxable amounts will be

available to utilise those temporary differences and losses. Management considers that currently it is not probable that future taxable profits will be available to utilise those temporary differences. Judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future profits.

Allowance for expected credit losses

The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for each group. These assumptions include recent experience and historical collection rates, the impact of the Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance for expected credit losses is calculated based on the information available at the time of preparation.

 

IFRIC 23 Uncertain tax position and tax-related contingency

Following the disposal of Range Resources Trinidad Limited and the settlement of liabilities in multiple jurisdictions which formed part of the consideration for the disposal, the group has estimated that these transactions may give rise to the possible payment of withholding tax and late payment penalties. The group considers it possible that a withholding tax liability of US$1,341,122 may be payable in Australia and withholding tax liability of US$3,095,008 payable in Trinidad. As at 31 December 2021, both amounts have been provided for in full. Also refer note 2a.

 

COVID-19 pandemic

The impact of the COVID-19 pandemic is ongoing and it has impacted the Group financially. It is not practicable to estimate the potential impact as the situation is continuously developing and is dependent on measures imposed by the governments of different countries, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.

Non-current assets classified as held for sale and discontinued operations

 

2022 and 2021: Rigs and related inventory

The Group has been marketing the rigs and equipment in the financial year, therefore all rigs and related equipment were classified as held for sale assets as it is highly probable that these assets will be sold within 12 months.

 

Note 2a: Restatement of comparatives

During the half year ended 31 December 2021, an error was discovered in the recognition of withholding tax payable relating to prior years. Detailed calculation were carried out in this period and  this resulted in an increase of $360,731 in the withholding tax liability for the year ended 30 June 2020, an increase of $182,803 in the withholding tax liability for the year ended 30 June 2021, an increase of $91,401 withholding tax expense for the half year ended 31 December 2020. The impact of the restatement is noted below

 

 

31 December 2020 (US$)

Reported

Correction of prior period error

31 December 2020 (US$)

Restated

 

 

 

 

Loss for the period attributable to equity holders of Star Phoenix Group Ltd

(2,129,934)

(91,401)

2,221,335

Total comprehensive loss for the period attributable to equity holders of Star Phoenix Group Ltd

(2,251,247)

(91,401)

2,342,648

 

 

 

 

 

 

30 June 2021 (US$)

Reported

Correction of prior period error

30 June 21 (US$)

Restated

 

 

 

 

Trade and other payable -(line item affected Other taxes payable)-Refer Note 10

3,563,659

1,286,247

4,849,906

Gain/(loss) from discontinued operations-net of tax

(4,222,517)

( 182,803)

(4,405,320)

 

 

 

 

 

 

30 June 2020 (US$)

Reported

Correction of prior period error

30 June 20 (US$)

Restated

 

 

 

 

Trade and other payable -(line item affected Other taxes payable)

3,688,347

1,103,444

4,791,791

Gain/(loss) from discontinued operations-net of tax

53,191,671

(1,103,444)

52,088,227

 

 

 

 

 

Earning per Share

31 December 2020 (US$)

Reported

31 December 2020 (US$)

Adjusted

 

 

 

 

 

Basic earning/(loss) per share

(0.02)

(0.02)

 

Diluted earning/(loss) per share

0.003

0.003

 

 

 

 

 

 

Note 3: Revenue

 

Note

Consolidated

31 December 2021 (US$)

31 December 2020 (US$)

From discontinued operations

Revenue from services to third parties recognised over time

6

125,336

410,108

Total revenue from discontinued operations

 

125,336

410,108

Other income from continuing operations

 

 

 

Foreign exchange gain (loss)

 

(7,372) 

251,528

 

 

 

 

Other income

 

-

54,630

Other income from continued operations

 

 

 

Finance income

4

1,541

8,332

Total revenue from continued operations

 

(5,831)

314,490

 

Revenue from third party services

 

Note 4: Expenses

 

Note

Consolidated

31 December 2021 (US$)

31 December 2020 (US$)

a: Cost of sales - continuing operations

Costs of operations

 

-

-

Depreciation and amortisation

 

-

-

Total cost of sales from continuing operations

 

-

-

a: Cost of sales - discontinued operations

 

 

 

Costs of production

6

(163,323)

(28,142)

Royalties

 

-

-

Staff costs

 

-

-

Depreciation and amortisation

 

-

-

Total cost of sales from discontinued operations

 

(163,323)

(28,142)

 

 

 

 

 

b: Finance costs/(income) - continuing operations

Fair value movement of derivative liability

 

-

-

Interest (income)/expense

 

(1,541)

(8,332)

Interest on convertible note

 

-

-

Total finance (income)/costs from continuing operations

 

(1,541)

(8,332)

b: Foreign exchange costs/(income) - discontinued operations

 

 

 

Other expenses

 

-

-

Foreign exchange (gain)/loss

 

(318,708)

(103,705)

Total foreign exchange costs/(income) from discontinued operations

 

(318,708)

(103,705)

c: General and administration expenses - continuing operations

Directors' and officers' fees and benefits

 

123,145

313,784

Legal fees

 

91,885

153,664

Business development, financial and other consulting fees

 

277,267

532,410

Listing fees

 

27,136

51,251

Other expenses

 

66,204

256,555

Total general and administration expenses from continuing operations

 

585,637

1,307,664

d: Asset values written down - continuing operations

Impairment of assets(i)

 

-

1,722,462

Total assets written down

 

-

1,722,462

 

(i)  Impairment

Following the sale of Range Resources Trinidad Limited (which held interests in the upstream assets in Trinidad) to LandOcean Energy Services Co Ltd (LandOcean), certain sums remain due and payable to the Group.

At 31 December 2020, the Board made the decision to fully impair the receivable from LandOcean to adhere to accounting standards given the situation and age of the balances, resulting to an impairment of US$1,722,462. No further payments have been received to date.

In the current year, the group's legal advisers Dentons UK and Middle East LLP have now filed an arbitration request in the London Court of International Arbitration against LandOcean. The group remains confident that part of these sums might be recovered.

 

Note 5: Contingent liabilities
There are no contingent liabilities as at 31 December 2021.

 

Note 6: Discontinued operations

The discontinued operations relate to Range Resources Drilling Services Ltd

 

Note

31 December 2021

31 December 2020

Revenue from third party services

3

125,336

410,108

Revenue from sale of oil

 

-

-

Operating expenses

4a

(163,323)

(28,142)

Royalties

 

-

-

Oil and gas properties depreciation, depletion and amortisation

 

-

-

Administrative expenses

 

-

-

Foreign exchnage gain

 

318,708

103,705

Gain from disposal of assets

 

240,890

100,031

Finance cost relating to Withholding tax liability

 

(54,875)

(91,401)

Gain from discontinued operations

 

466,736

494,301

 

Note 7a: Assets  classified as held for sale

 

Note

Consolidated

31 December 2021 (US$)

30 June 2021 (US$)

Non-current assets

Rigs and related inventory

 

3,530,811

3,635,878

Property, plant and equipment

 

662,895

613,160

Total non-current assets

 

4,193,706

4,249,038

Total held for sale assets

 

4,193,706

4,249,038

 

During the half year ended 31 December 2021, management have not carried out any assessment to determine the fair value less costs to sell for these assets. The Directors have determined the carrying amount of these assets approximates the fair value less costs to sell.

 

Note 7b: Liabilities directly associated with assets classified as held for sale

 

Note

Consolidated

31 December 2021 (US$)

30 June  2021(US$)

Current liabilities

Net deferred tax liabilities

 

449,154

450,653

Total current liabilities

 

449,154

450,653

Total held for sale liabilities

 

449,154

450,653

 

Note 8: Trade and other receivables

 

Note

Consolidated

31 December 2021 (US$)

30 June

2021 (US$)

Current

Trade receivables (i)

 

2,262

-

Taxes receivable

 

39,333

39,342

Other receivables

 

13,131

13,182

Prepayments

 

33,969

20,847

Other taxes receivable

 

30,392

30,493

Other assets (ii)

 

-

-

Total trade and other receivables

 

119,087

103,864

 

(i) Trade receivables are generally due for settlement within 30 days. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date. 

Fair value approximates the carrying value of trade and other receivables at 31 December 2021.

 

Note 9: Property, plant & equipment

Consolidated

Motor vehicle, furniture, fixtures & fittings (US$)

Total (US$)

At 31 December 2021

Cost

323,402

323,402

Accumulated depreciation

(248,140)

(248,140)

Net book amount

75,262

75,262

At 30 June 2021

Cost

323,402

323,402

Accumulated depreciation

(239,778)

(239,778)

Net book amount

83,624

83,624

 

Note 10: Trade and other payables

 

 

Consolidated

31 December 2021 (US$)

30 June

2021 (US$)

(Restated)

a: Current

Trade payables

 

269,570

304,455

Sundry payables and accrued expenses

 

98,020

155,268

Other tax payables (i)

 

4,436,130

4,390,183

Total current trade and other payables

 

4,803,720

4,849,906

b: Non-current

Trade payables

 

-

-

Total non-current trade and other payables

 

-

-

 

(i)  Amount relates to withholding taxes payable as a result of debt eliminations.

 

Note 11: Provisions

 

 

Consolidated

31 December 2021 (US$)

30 June

2021 (US$)

Provision (i)

 

5,796,048

5,796,048

Total non-current trade and other payables

 

5,796,048

5,896,048

 

(i) Provision relates to an estimate of the potential land taxes that may be payable by the Company on expired exploration licences in Trinidad.

 

Note 12: Contributed equity

 

 

Consolidated

31 December 2021 (US$)

30 June

2021 (US$)

150,876,970 fully paid ordinary shares (30 June 2021: 150,876,970)

 

409,614,908

409,614,904

Share issue costs

 

(21,044,404)

(21,044,400)

Total contributed equity

 

388,570,504

388,570,504

 

 

Consolidated

 

31 December 2021

Number

30 June

2021

Number

Fully Paid Ordinary Shares

At the beginning of reporting period

150,876,970

141,367,955

Shares issued during the period

 

9,509,015

 

 

 

 

 

 

Total contributed equity

150,876,970

150,876,970

 

 

 

Note 13: Segmental reporting

 

31 December 2021

 

Trinidad - Oilfield Services (US$)

Indonesia (US$)

Unallocated (US$)

Total (US$)

Segment revenue

Total revenue

 

684,934

-

1,541

686,475

Other income

 

 559,598

-

1,541

 561,139

Revenue from external customers

 

 125,336

-

-

 125,336

Segment result

 

 

 

 

 

Other segment expenses

 

  (218,198)

-

(593,009)

(811,207)

Profits/(loss) before income tax

 

  466,736

 

(591,468)

(124,732)

Profit/(loss) after income tax

 

  466,736

 

(591,468)

124,732

Segment assets

Total assets

 

4,673,744

-

1,231,892

5,905,636

Segment liabilities

 

 

 

 

 

Total liabilities

 

10,247,868

 

  58,339

10,306,207

 

 

 

 

 

 

 

31 December 2020- restated

 

Trinidad - Oilfield Services discontinued(US$)

Indonesia (US$)

Unallocated (US$)

Total (US$)

Segment revenue

Total revenue

 

613,844

-

314,490

928,334

Revenue from external customers

 

410,108

-

-

410,108

Other income

 

203,736

-

314,490

518,226

Segment result

Other segment (expenses)

 

(119,543)

-

(3,030,126)

(3,149,669)

Profit/(loss) before income tax

 

494,301

-

(2,715,636)

(2,221,335)

Profit/(loss) after income tax

 

494,301

-

(2,715,636)

(2,221,335)

 

 

 

 

 

 

 

 

 

 

 

30 June 2021

Restated

 

Trinidad - Oilfield Services US$

discontinued(US$)

Indonesia US$

Unallocated US$

Total US$

Segment assets

Total assets

 

4,586,856

-

1,824,076

6,410,931

Segment liabilities

Total liabilities

-

10,220,169

-

133,724

10,353,893

 

 

Segment revenues and expenses are those directly attributable to the segments and include any joint revenue and expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and consist principally of cash, receivables, plant and equipment. While most assets can be directly attributed to individual segments, the carrying amount of certain assets used jointly by two or more segments is allocated to the segments on a reasonable basis. Segment liabilities consist principally of payables, employee benefits, accrued expenses, provisions.

 

 

(i) Unallocated assets

 

31 December 2021

(US$)

30 June

2021

(US$)

 

Cash

1,147,672

1,668,255

Other

  84,220

155,821

Total unallocated assets

1,231,892

1,824,076

 

 

Note 14: Events after the reporting date

Annual general meeting

On 31 January 2022, the Board of the company advised that its Annual General Meeting ("AGM") was held earlier that day. The sole resolution proposed related to the re-election of Dr  Mu (Robin) Luo  as a director. The resolution was passed and therefore the composition of the Board remains unchanged.

Georgia litigation

The Company and Strait Oil and Gas Limited (SOG), a private company incorporated in Gibraltar, in which Star Phoenix holds a 65% interest had been working with their legal advisers on progressing an arbitration claim against the government of Georgia.

Further to the Company's announcements, negotiations with parties for securing funds to commence the  Georgia  litigation process are still in progress. However, progress in respect of the arbitration claim is taking longer than originally anticipated due to the disruption resulting from the COVID-19 pandemic. The Company continues to be advised by  Enyo Law LLP  in relation to this process.

LandOcean outstanding payment

On 14 July 2021, the Company announced that its legal advisers Dentons UK and Middle
East LLP have now filed an arbitration request in the London Court of International
Arbitration ("LCIA"), which officially marks commencement of arbitration proceedings against LandOcean.   The final court hearing is scheduled for May 2022 by LCIA and the decision of Stage 1 of the Arbitration will be most likely made by LCIA during the final court hearing if no other circumstances change in the following months.

As detailed in the Company's announcement on  7 September 2021 Star Phoenix  continues to pursue the monies owed to it by  LandOcean Energy Service Co. Limited . A court trial is scheduled by the  London Court of International Arbitration  in Q2 2022. At this point in time, the Directors remain confident that the Stage 1 claims will be recovered in this financial year, however there can be no guarantee that will be achieved. The cash preservation measures previously stated remain in place while this process is ongoing.

 

Directors' Declaration

The Directors of the company declare that:

 

The financial statements, comprising the consolidated statement of profit or loss and other comprehensive income, consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes in equity, accompanying notes, are in accordance with the Corporations Act 2001 and:

 

a)  comply with Accounting Standard AASB 134 Interim Financial Reporting, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

b)  give a true and fair view of the consolidated entity's financial position as at 31 December 2021 and of its performance for the half-year ended on that date.

In the Directors' opinion that subject to the matters disclosed in Note 1 there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:

 

 

Zhiwei Gu

Chairman

 

28 April 2022

Corporate Directory

Directors

Zhiwei Gu

Executive Chairman

Lubing Liu

Executive Director and COO

Mu Luo 

Non-Executive Director

 

Company Secretary

Lubing Liu

Registered office & principal place of business 

c/o Edwards Mac Scovell, Level 1, 8 St Georges Terrace

Perth WA 6000, Australia

Telephone: +61 8 6205 3012

Share Registry (Australia)

Computershare Investor Services Pty Ltd

Level 11, 172 St Georges Terrace, Perth WA 6000

Telephone: +61 3 9415 4000

Share Registry (United Kingdom)

Computershare Investor Services plc

PO Box 82, The Pavilions, Bridgwater Road, Bristol, UK BS99 6ZZ

Telephone: +44 370 702 0000

Auditor

BDO Audit (WA) Pty Ltd, 38 Station Street,

Subiaco WA 6008, Australia

Stock Exchange Listing

Star Phoenix Group Ltd shares are listed on the Alternative Investment Market (AIM) of the London Stock Exchange (AIM code: STA)

Country of Incorporation

Australia

Website

www.starphoenixgroup.com

 

 

 

 

 

 

 

 

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