TIDMSTA
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 MONTHSED 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 WH Ireland Limited (Nominated Adviser
Lubing Liu (Company Secretary) and Broker)
e. admin@starphoenixgroup.com James Joyce / Ben Good
t. +44 (0)20 3865 8430 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 6 months
31 December ended 31
December
2020 (US$)
2021 (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 30 June 2021 30 June 2020
2021 (Restated US$)* (Restated
(US$) 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 Accumulated Foreign Share-based Option Total equity
equity (US$) losses (US$) currency payment premium (US$)
translation reserve reserve
reserve (US$) (US$)
(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 6 months ended
31 December 31 December
2021 (US$) 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 $91,401 withholding tax expense
for the half year ended 31 December 2020. The impact of the
restatement is noted below
31 December Correction 31 December
2020 (US$) of prior 2020 (US$)
Reported period error Restated
------------------------------------ ------------ -------------- ------------
Loss for the period attributable
to equity holders of Star Phoenix
Group Ltd (2,129,934) (91,401) 2,221,335
------------------------------------ ------------ -------------- ------------
Total comprehensive loss for
the period attributable to equity
holders of Star Phoenix Group
Ltd (2,251,247) (91,401) 2,342,648
------------------------------------ ------------ -------------- ------------
30 June Correction 30 June 21
2021 (US$) of prior (US$)
Reported period error Restated
------------------------------------------- ------------ -------------- ------------
Trade and other payable -(line
item affected Other taxes payable)-Refer
Note 10 3,563,659 1,286,247 4,849,906
------------------------------------------- ------------ -------------- ------------
Gain/(loss) from discontinued
operations-net of tax (4,222,517) ( 182,803) (4,405,320)
------------------------------------------- ------------ -------------- ------------
30 June Correction 30 June 20
2020 (US$) of prior (US$)
Reported period error Restated
------------------------------------- ------------ -------------- -----------
Trade and other payable -(line
item affected Other taxes payable) 3,688,347 1,103,444 4,791,791
------------------------------------- ------------ -------------- -----------
Gain/(loss) from discontinued
operations-net of tax 53,191,671 (1,103,444) 52,088,227
------------------------------------- ------------ -------------- -----------
Earning per Share 31 December 31 December
2020 (US$) 2020 (US$)
Reported Adjusted
---------------------------------- ------------ ------------
Basic earning/(loss) per share (0.02) (0.02)
---------------------------------- ------------ ------------
Diluted earning/(loss) per share 0.003 0.003
---------------------------------- ------------ ------------
Note 3: Revenue
Note Consolidated
--------------------------------- ----- --------------------------
31 December 31 December
2021 (US$) 2020 (US$)
--------------------------------- ----- ------------ ------------
From discontinued operations
--------------------------------------------------------------------
Revenue from services to third
parties recognised over time 6 125,336 410,108
--------------------------------- ----- ------------ ------------
Total revenue from discontinued
operations 125,336 410,108
--------------------------------- ----- ------------ ------------
Other income from continuing
operations
--------------------------------- ----- ------------ ------------
Foreign exchange gain (loss) (7,372) 251,528
--------------------------------- ----- ------------ ------------
Other income - 54,630
--------------------------------- ----- ------------ ------------
Other income from continued
operations
--------------------------------- ----- ------------ ------------
Finance income 4 1,541 8,332
--------------------------------- ----- ------------ ------------
Total revenue from continued
operations (5,831) 314,490
--------------------------------- ----- ------------ ------------
Revenue from third party services is solely generated in the
Republic of Trinidad and Tobago.
Note 4: Expenses
Note Consolidated
--------------------------------------- ----- --------------------------
31 December 31 December
2021 (US$) 2020 (US$)
--------------------------------------- ----- ------------ ------------
a: Cost of sales - continuing operations
--------------------------------------------------------------------------
Costs of operations - -
--------------------------------------- ----- ------------ ------------
Depreciation and amortisation - -
--------------------------------------- ----- ------------ ------------
Total cost of sales from continuing - -
operations
--------------------------------------- ----- ------------ ------------
a: Cost of sales - discontinued
operations
--------------------------------------- ----- ------------ ------------
Costs of production 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$1,722,462. No further payments have been received
to date.
In the current year, the group's legal advisers Dentons UK and
Middle East LLP have now filed an arbitration request in the London
Court of International Arbitration against LandOcean. The group
remains confident that part of these sums might be recovered.
Note 5: Contingent liabilities
There are no contingent liabilities as at 31 December 2021.
Note 6: Discontinued operations
The discontinued operations relate to Range Resources Drilling
Services Ltd
Note 31 December 31 December
2021 2020
Revenue from third party services 3 125,336 410,108
----- ------------ ------------
Revenue from sale of oil - -
----- ------------ ------------
Operating expenses 4a (163,323) (28,142)
----- ------------ ------------
Royalties - -
----- ------------ ------------
Oil and gas properties depreciation, - -
depletion and amortisation
----- ------------ ------------
Administrative expenses - -
----- ------------ ------------
Foreign exchnage gain 318,708 103,705
----- ------------ ------------
Gain from disposal of assets 240,890 100,031
----- ------------ ------------
Finance cost relating to Withholding
tax liability (54,875) (91,401)
----- ------------ ------------
Gain from discontinued operations 466,736 494,301
----- ------------ ------------
Note 7a: Assets classified as held for sale
Note Consolidated
------------------------------- ------ ---------------------------
31 December 30 June 2021
2021 (US$) (US$)
------------------------------- ------ ------------ -------------
Non-current assets
Rigs and related inventory 3,530,811 3,635,878
------------ -------------
Property, plant and equipment 662,895 613,160
------------ -------------
Total non-current assets 4,193,706 4,249,038
------------ -------------
Total held for sale assets 4,193,706 4,249,038
------------ -------------
During the half year ended 31 December 2021, management have not
carried out any assessment to determine the fair value less costs
to sell for these assets. The Directors have determined the
carrying amount of these assets approximates the fair value less
costs to sell.
Note 7b: Liabilities directly associated with assets classified
as held for sale
Note Consolidated
--------------------------------- ------ --------------------------------
31 December 30 June 2021(US$)
2021 (US$)
--------------------------------- ------ ------------ ------------------
Current liabilities
Net deferred tax liabilities 449,154 450,653
------------ ------------------
Total current liabilities 449,154 450,653
------------ ------------------
Total held for sale liabilities 449,154 450,653
------------ ------------------
Note 8: Trade and other receivables
Note Consolidated
----------------------------------- ------ --------------------------
31 December 30 June
2021 (US$) 2021 (US$)
----------------------------------- ------ ------------ ------------
Current
-----------------------------------------------------------------------
Trade receivables (i) 2,262 -
----------------------------------- ------ ------------ ------------
Taxes receivable 39,333 39,342
------------------------------------------- ------------ ------------
Other receivables 13,131 13,182
------------------------------------------- ------------ ------------
Prepayments 33,969 20,847
------------------------------------------- ------------ ------------
Other taxes receivable 30,392 30,493
------------------------------------------- ------------ ------------
Other assets (ii) - -
----------------------------------- ------ ------------ ------------
Total trade and other receivables 119,087 103,864
------------------------------------------- ------------ ------------
(i) Trade receivables are generally due for settlement within 30
days. They are presented as current assets unless collection is not
expected for more than 12 months after the reporting date.
Fair value approximates the carrying value of trade and other
receivables at 31 December 2021.
Note 9: Property, plant & equipment
Consolidated Motor vehicle, furniture, Total (US$)
fixtures & fittings (US$)
------------------------- -------------------------- -----------
At 31 December 2021
------------------------------------------------------------------
Cost 323,402 323,402
------------------------- -------------------------- -----------
Accumulated depreciation (248,140) (248,140)
------------------------- -------------------------- -----------
Net book amount 75,262 75,262
------------------------- -------------------------- -----------
At 30 June 2021
------------------------------------------------------------------
Cost 323,402 323,402
------------------------- -------------------------- -----------
Accumulated depreciation (239,778) (239,778)
------------------------- -------------------------- -----------
Net book amount 83,624 83,624
------------------------- -------------------------- -----------
Note 10: Trade and other payables
Consolidated
--------------------------
31 December 30 June
2021 (US$)
2021 (US$)
(Restated)
------------ ------------
a: Current
----------------------------------------------------------------
Trade payables 269,570 304,455
------------------------------------ ------------ ------------
Sundry payables and accrued
expenses 98,020 155,268
------------------------------------ ------------ ------------
Other tax payables (i) 4,436,130 4,390,183
------------------------------------ ------------ ------------
Total current trade and other
payables 4,803,720 4,849,906
------------------------------------ ------------ ------------
b: Non-current
----------------------------------------------------------------
Trade payables - -
------------------------------------ ------------ ------------
Total non-current trade and - -
other payables
------------------------------------ ------------ ------------
(i) Amount relates to withholding taxes payable as a result of debt eliminations.
Note 11: Provisions
Consolidated
--------------------------
31 December 30 June
2021 (US$) 2021 (US$)
------------ ------------
Provision (i) 5,796,048 5,796,048
------------------------------ ------------ ------------
Total non-current trade and
other payables 5,796,048 5,896,048
------------------------------ ------------ ------------
(i) Provision relates to an estimate of the potential land taxes
that may be payable by the Company on expired exploration licences
in Trinidad.
Note 12: Contributed equity
Consolidated
---------------------------------------- ----------------------------
31 December 30 June
2021 (US$) 2021 (US$)
---------------------------------------- ------------- -------------
150,876,970 fully paid ordinary shares
(30 June 2021: 150,876,970) 409,614,908 409,614,904
----------------------------------------- ------------- -------------
Share issue costs (21,044,404) (21,044,400)
----------------------------------------- ------------- -------------
Total contributed equity 388,570,504 388,570,504
----------------------------------------- ------------- -------------
Consolidated
-------------------------------------- --------------------------
31 December 30 June
2021 2021
Number Number
-------------------------------------- ------------ ------------
Fully Paid Ordinary Shares
------------------------------------------------------------------
At the beginning of reporting period 150,876,970 141,367,955
-------------------------------------- ------------ ------------
Shares issued during the period 9,509,015
-------------------------------------- ------------ ------------
Total contributed equity 150,876,970 150,876,970
-------------------------------------- ------------ ------------
Note 13: Segmental reporting
31 December 2021 Trinidad - Oilfield Services Indonesia (US$) Unallocated (US$) Total (US$)
(US$)
-------------------------------
Segment revenue
--------------------------------------------------------------------------------------------------------------------
Total revenue 684,934 - 1,541 686,475
-------------------------------- ------------------------------ ---------------- ------------------ ------------
Other income 559,598 - 1,541 561,139
-------------------------------- ------------------------------ ---------------- ------------------ ------------
Revenue from external customers 125,336 - - 125,336
-------------------------------- ------------------------------ ---------------- ------------------ ------------
Segment result
------------------------------- ------------------------------ ---------------- ------------------ ------------
Other segment expenses (218,198) - (593,009) (811,207)
-------------------------------- ------------------------------ ---------------- ------------------ ------------
Profits/(loss) before income
tax 466,736 (591,468) (124,732)
-------------------------------- ------------------------------ ---------------- ------------------ ------------
Profit/(loss) after income tax 466,736 (591,468) 124,732
-------------------------------- ------------------------------ ---------------- ------------------ ------------
Segment assets
--------------------------------------------------------------------------------------------------------------------
Total assets 4,673,744 - 1,231,892 5,905,636
-------------------------------- ------------------------------ ---------------- ------------------ ------------
Segment liabilities
------------------------------- ------------------------------ ---------------- ------------------ ------------
Total liabilities 10,247,868 58,339 10,306,207
-------------------------------- ------------------------------ ---------------- ------------------ ------------
31 December 2020- restated Trinidad - Oilfield Services Indonesia (US$) Unallocated (US$) Total (US$)
discontinued(US$)
------------------------------ --- ----------------------------- ---------------- ------------------ ------------
Segment revenue
----------------------------------------------------------------------------------------------------------------------
Total revenue 613,844 - 314,490 928,334
----------------------------------- ----------------------------- ---------------- ------------------ ------------
Revenue from external customers 410,108 - - 410,108
----------------------------------- ----------------------------- ---------------- ------------------ ------------
Other income 203,736 - 314,490 518,226
----------------------------------- ----------------------------- ---------------- ------------------ ------------
Segment result
----------------------------------------------------------------------------------------------------------------------
Other segment (expenses) (119,543) - (3,030,126) (3,149,669)
----------------------------------- ----------------------------- ---------------- ------------------ ------------
Profit/(loss) before income tax 494,301 - (2,715,636) (2,221,335)
----------------------------------- ----------------------------- ---------------- ------------------ ------------
Profit/(loss) after income tax 494,301 - (2,715,636) (2,221,335)
----------------------------------- ----------------------------- ---------------- ------------------ ------------
30 June 2021 Trinidad - Oilfield Services Indonesia US$ Unallocated US$ Total US$
Restated US$
discontinued(US$)
------------------------------ --- ----------------------------- ---------------- ------------------ ------------
Segment assets
----------------------------------------------------------------------------------------------------------------------
Total assets 4,586,856 - 1,824,076 6,410,931
----------------------------------- ----------------------------- ---------------- ------------------ ------------
Segment liabilities
----------------------------------------------------------------------------------------------------------------------
Total liabilities - 10,220,169 - 133,724 10,353,893
------------------------------ --- ----------------------------- ---------------- ------------------ ------------
Segment revenues and expenses are those directly attributable to
the segments and include any joint revenue and expenses where a
reasonable basis of allocation exists. Segment assets include all
assets used by a segment and consist principally of cash,
receivables, plant and equipment. While most assets can be directly
attributed to individual segments, the carrying amount of certain
assets used jointly by two or more segments is allocated to the
segments on a reasonable basis. Segment liabilities consist
principally of payables, employee benefits, accrued expenses,
provisions.
(i) Unallocated assets
31 December 30 June
2021
(US$) 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 c/o Edwards Mac Scovell, Level 1, 8 St Georges
& principal place Terrace
of business Perth WA 6000, Australia
Telephone: +61 8 6205 3012
------------------------- -----------------------------------------------
Share Registry Computershare Investor Services Pty Ltd
(Australia) Level 11, 172 St Georges Terrace, Perth WA
6000
Telephone: +61 3 9415 4000
------------------------- -----------------------------------------------
Share Registry Computershare Investor Services plc
(United Kingdom) 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 Star Phoenix Group Ltd shares are listed on
Listing 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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END
IR GZGZDKRFGZZM
(END) Dow Jones Newswires
April 28, 2022 11:06 ET (15:06 GMT)
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