Form 6-K Mission NewEnergy Ltd For: Jun 30
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE
13a-16 OR 15d-16 OF THE SECURITIES EXCHANGE ACT OF
1934
For the month of September 2018
Commission
File Number: 001-35022
Mission NewEnergy Limited
(Translation
of registrant’s name into English)
Unit B9, 431 Roberts Rd
Subiaco, Western Australia 6008
Australia
(Address
of principal executive office)
Indicate by check
mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form
20-F √
Form 40-F
Indicate by check
mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
Indicate by check
mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Indicate by check
mark whether by furnishing the information contained in this Form,
the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934.
Yes
No √
If
“Yes” is marked, indicate below the file number
assigned to the registrant in connection with Rule
12g3-2(b):
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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Mission NewEnergy Limited
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By: /s/
Guy Burnett
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Name:
Guy Burnett
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Title: Chief
Financial Officer and Company Secretary
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Date:
September 21, 2018
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EXHIBIT INDEX
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Exhibit
Number
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Description
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99.1
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Annual
Financial Report
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Mission
New Energy Limited
Financial
Report for the Year Ended
30 June
2018
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DIRECTORS
REPORT
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3
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1
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Directors
Details
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5
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2
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Meetings
of Directors
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5
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3
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Insurance
Premium Paid for Directors and Officers
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5
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4
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Unissued
Shares Under Option
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5
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5
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Remuneration
Report (Audited)
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5
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6
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Principal
Activities
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10
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7
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Operating
and Financial Review
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10
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8
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Review
of Operations
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10
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9
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Financial
Position
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10
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10
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Dividends
Paid or Recommended
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10
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11
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Events
Subsequent to Reporting Date
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10
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12
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Significant
Changes in State of Affairs
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10
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13
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Likely
Developments and expected results of operations
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10
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14
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Proceedings
on Behalf of the Company
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10
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15
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Non
Audit Services
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10
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16
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Environmental
Regulations
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10
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17
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The
Lead Auditor’s Independence Declaration
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10
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AUDITORS
INDEPENDENCE DECLARATION
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11
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FINANCIAL
STATEMENTS TABLE OF CONTENTS
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12
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DIRECTORS’
REPORT
Your
Directors present their report on the Company and its controlled
entities for the year ended 30 June 2018.
The
name of Directors’ in office at any time during or since the
end of the year are:
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Dato’ Nathan Mahalingam
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Executive
Chairman (w.e.f. 14 June 2017) and Group Chief Executive Officer
(Executive)
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Qualifications
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Bachelor
of Economics (Hons.) (University of Malaya) and MBA (Murdoch
University, Western Australia).
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Experience
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Mr
Mahalingam has over 25 years of management experience in banking
and finance, heavy industries and infrastructure development. He
has successfully implemented numerous start-up manufacturing
operations in Malaysia during his tenure of service with a large
Malaysian conglomerate. Between 1995 and 2000, he served as project
director in the Westport Group, developers of one of Malaysia's
largest privatised port and transhipment facility.
Board
member since incorporation of the Company (17 November
2005).
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Interests
in shares and options
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5,612,956
ordinary shares1
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Special
Responsibilities
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Executive
Chairman, Managing Director/Group Chief Executive Officer of the
company.
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Former
Directorships in listed entities over the last 3 years
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Nil
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1 Held personally and indirectly through Mission
Equities Sdn Bhd, a company that Dato’ Mahalingam has a 34%
interest in.
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Mr Guy Burnett
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Chief
Financial Officer (Executive) and Company Secretary.
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Qualifications
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Member
of the Institute of Chartered Accountants Australia
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Experience
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Mr
Burnett, a Chartered Accountant, has been a Finance Professional in
several large corporations. After finishing as a CA trainee and
Audit manager, Mr Burnett joined Umgeni Water, a large corporatised
water utility in South Africa, as its Financial Accountant. He was
promoted to the position of Financial Controller in mid 1999. He
left Umgeni in 2004 to migrate to Western Australia with his
family.
Prior
to joining the Company Mr Burnett was Manager: Corporate Accounting
& Tax with Western Power. Prior to this Mr Burnett worked as
Acting Financial Accountant for Water Corporation and served as a
Manager with KPMG where he played a key role in assisting KPMG's
clients in rolling out their IFRS accounting implementations. Mr
Burnett has also served on the Board of the Sorrento Surf Life
Saving Club.
Board
member since 6 April 2009.
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Interests
in shares and options
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5,112,001
ordinary shares2
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Former
Directorships in listed entities over the last 3 years
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Nil
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Mr James Garton
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Executive
Director – Corporate Finance
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Qualifications
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Bachelor
of Business Administration - Finance, Bachelor of Science –
Economics and Master of Applied Finance
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Experience
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Mr.
Garton has over 20 years experience in corporate finance, working
in investment banking. Prior to his current role, James was has
been Head of Corporate Finance and Mergers and Acquisitions for
Mission since 2008. Mr. Garton joined Mission NewEnergy from U.S.
investment bank, FBR Capital Markets, where he was Vice President,
Investment Banking. Prior to FBR Capital Markets, he worked in
corporate finance and equity capital markets in
Australian.
Board
member since 1 July 2014.
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Interests
in shares and options
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5,112,051
ordinary shares3
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Special
Responsibilities
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Nil
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Former
Directorships in listed entities over the last 3 years
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Nil
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2 Held personally and indirectly through Mkhambathi
Trust, a trust that Mr Burnett is a beneficiary
of.
3 Held personally and indirectly through Yacht Bay
Trust, a trust that Mr Garton is a beneficiary
of.
During
the financial year, 4 meetings of Directors were held.
Attendance
by each Director during the year were as follows:
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Committee
Meetings
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Directors’
Meetings
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Audit & Risk
Management
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Nomination &
Remuneration Committee
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Directors’
Meetings
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Committee
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A
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B
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A
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B
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A
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B
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Dato’ Nathan
Mahalingam
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4
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4
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2
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2
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-
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-
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Mr Guy
Burnett
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4
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4
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2
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2
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-
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-
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Mr James
Garton
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4
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4
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2
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2
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-
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-
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A -
Number eligible to attend
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B -
Number attended
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The
Company has paid an insurance premium in respect of a contract
insuring each of the Directors of the Company named earlier in this
report and the executive officers of the Company against
liabilities and expenses, to the extent permitted by law, arising
from claims made against them in their capacity as Directors and
officers of the Company, other than conduct involving a willful
breach of duty in relation to the Company. Due to confidentiality
clauses contained in the insurance policy the Limit of Liability
and Premium paid has not been disclosed.
There
are no unissued ordinary shares of Mission NewEnergy Ltd under
option at the date of this report.
This
report details the nature and amount of remuneration for each
Director of Mission NewEnergy Limited and for the key management
personnel. As discussed below in this Directors report, the Group
is desirous to undertake a reverse takeover of another operating
business. Hence, in order to preserve funds, the Directors agreed
to take no fees or salary with effect 30 November 2016, therefore
the remuneration policy below is largely relevant under normal
operating conditions.
The
remuneration policy of Mission NewEnergy Limited is
twofold:
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To create a
remuneration structure that will allow Mission NewEnergy to
attract, reward and retain qualified Executives and Non-Executive
Directors who will lead Mission NewEnergy in achieving its
strategic objectives,
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To provide and
motivate the Executives and Non-Executive Directors with a balanced
and competitive remuneration.
The
specific objectives of the Executive Remuneration Policy are as
follows:
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To motivate
executive management to manage and lead the business successfully
and to drive strong long-term organisational growth in line with
the Group’s strategy and business objectives,
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To drive successful
organisational performance by incorporating an annual performance
incentive and establish longer-term performance
objectives,
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To further drive
longer-term organisational performance through an equity-based
reward structure,
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To make sure that
there is transparency and fairness in executive remuneration policy
and practices,
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To deliver a
balanced solution addressing all elements of total pay [base-pay,
incentive pay (cash and equity) and benefits],
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To make sure
appropriate superannuation arrangements are in place for
executives, and
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To contribute to
appropriate attraction and retention strategies for
executives.
The
specific objectives of the Non-Executive Director remuneration
policy are as follows:
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To attract and
retain appropriately qualified and experienced
Directors,
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To remunerate
Directors fairly having regard to their responsibilities, including
providing leadership and guidance to management,
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To build
sustainable shareholder value by encouraging a longer-term
strategic perspective, by not linking fees to the results of the
Mission NewEnergy Group of Companies,
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The Non-Executive
Directors do not receive performance based pay, and
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The maximum annual
aggregate Director’s fee pool limit is $500,000 and was
approved by shareholders at a general meeting on 19 October
2009.
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Base
fees (excluding superannuation)
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1
July 2017 to 30 June 2018
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1
July 2016 to 30 June 2017
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Chairman
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NIL
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$22,917
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Deputy
chairman
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NIL
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$14,583
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Non-executive Board
member
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NIL
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$14,583
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Chairman of the
Audit and Risk Committee
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NIL
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NIL
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Chairman of the
Nomination and Remuneration Committee
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NIL
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NIL
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The
Board of Mission NewEnergy Limited believes that the remuneration
policy to be appropriate and effective in its ability to attract
and retain the best executives and Directors to run and manage the
Group, as well as create goal congruence between Directors,
executives and shareholders.
The
Board’s policy for determining the nature and amount of
remuneration for board members and senior executives of the Group
is as follows:
Remuneration Governance
The
remuneration policy, setting the terms and conditions for the
Executive Directors and other senior executives, was developed by
the Nomination and Remuneration Committee and approved by the
Board.
All
executives are entitled to receive a base salary (which is based on
factors such as length of service and experience), superannuation,
fringe benefits, options and performance incentives.
During
the current financial year no salaries or Directors fees were taken
and hence there was no annual review of executive or Director
packages.
Historically,
the Directors and executives received a superannuation guarantee
contribution (or equivalent) required by the relevant government
authority and do not receive any other retirement
benefits.
All
remuneration paid historically to Directors and executives was
valued at the cost to the Company and expensed. Shares given to
Directors and executives were valued as the difference between the
market price of those shares and the amount paid by the Director or
executive.
In
considering the Group’s performance and benefits for
shareholder wealth, the Board have regard to the following indices
in respect of the current financial year and the previous four
financial years:
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2018
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2017
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2016
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2015
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2014
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Revenue
($000)
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2
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8
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42
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7,271
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9,684
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PBIT
before discontinued operations ($000)
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(202)
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(4,551)
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(2,218)
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4,187
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(609)
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Profit/(loss)
after income tax - owners ($000)
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(202)
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(4,551)
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(2,328)
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28,357
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(1,077)
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Basic
earnings/(loss) per share – owners ($)
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(0.005)
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(0.11)
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(0.06)
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0.91
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(0.08)
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Dividends
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-
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-
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-
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-
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-
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Share
price ($)
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0.0364
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0.036
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0.034
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0.04
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0.01
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Current
executive remuneration does not have a performance element
included.
The
Board policy is to remunerate Non-Executive Directors at market
rates for time, commitment and responsibilities. The Nomination and
Remuneration Committee determines payments to the Non-Executive
Directors and reviews their remuneration annually, based on market
practice, duties and accountability. Independent external advice
was not sought during the financial year. The maximum aggregate
amount of fees that can be paid to non-executive Directors is
subject to approval by shareholders at an Annual General Meeting
and is allocated to each non-executive Director based on
responsibility, which include the Chairman of the Board, Chairman
of the Audit and Risk Committee and Chairman of the Nomination and
Remuneration Committee. Fees for non-executive Directors are not
linked to the performance of the Group.
Key Management Personnel
The
Company has defined the following classes of people as key
management personnel:
●
Executive
Directors
Details of remuneration for the year ended June 2018
The
remuneration for the key management personnel of the group during
the year was as follows:
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2018
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Salary
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Non-cash Benefits,
including net annual leave
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Long
term Bonus
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Share based
payments
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Post
Employment Super Contribution
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Total
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$
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$
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$
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$
|
$
|
$
|
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Dato’ Nathan
Mahalingam
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-
|
-
|
-
|
-
|
-
|
-
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Mr. Guy
Burnett
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-
|
-
|
-
|
-
|
-
|
-
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Mr. James
Garton
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-
|
-
|
-
|
-
|
-
|
-
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TOTAL
KEY MANAGEMENT PERSONNEL5
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-
|
-
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-
|
-
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-
|
-
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2017
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Salary
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Non-cash Benefits,
including net annual leave
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Long
term Bonus
|
Share based
payments
|
Post
Employment Super Contribution
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Total
|
|
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$
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$
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$
|
$
|
$
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$
|
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Non-Executive
Directors
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|
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Datuk Zain
Yusuf6
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22,916
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-
|
-
|
-
|
-
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22,916
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Admiral (Ret) Tan
Sri Anwar7
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14,583
|
-
|
-
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-
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139
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14,722
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Mohd
Azlan8
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14,583
|
-
|
-
|
-
|
139
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14,722
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Total
Non-executive Directors
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52,082
|
-
|
-
|
-
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278
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52,360
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Dato’ Nathan
Mahalingam
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104,167
|
-
|
-
|
-
|
-
|
104,167
|
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Mr. Guy
Burnett
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87,948
|
4,353
|
-
|
-
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8,709
|
101,010
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Mr. James
Garton
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83,333
|
-
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-
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-
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7,917
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91,250
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TOTAL
KEY MANAGEMENT PERSONNEL
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327,530
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4,353
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-
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-
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16,904
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348,787
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Employment contracts of Directors and senior
executives
The
Directors and senior executives do not have current employment
agreements. With effect 30 November 2016, the Directors agreed to
not draw fees or accrue a salary until the financial position of
the Group supports such fees or salary. There is also no agreement
by Mission NewEnergy Ltd to pay any pre-determined amounts in the
event of termination and the Directors and senior executives have
agreed they will not call on their annual leave entitlements until
the group has a clear ability to pay.
Ordinary shares held by key management personnel
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Balance
01/07/2017
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Acquired/Issued
pursuant to retention plan
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Disposed
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Balance
30/06/2018
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Dato’ Nathan
Mahalingam9
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5,612,956
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-
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-
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5,612,956
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|
Guy
Burnett10
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5,112,001
|
-
|
-
|
5,112,001
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James
Garton11
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5,112,051
|
-
|
-
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5,112,051
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Total
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15,837,008
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-
|
-
|
15,837,008
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No
remuneration consultants were used during the current or previous
financial year.
There
were no loans to or from key management personnel during the
reporting periods.
Voting and comments made at the company’s 2017 Annual General
Meeting
Mission
NewEnergy Ltd received more than 99% of “yes” votes on
its remuneration report for the 2017 financial year. The Company
did not receive any specific feedback at the AGM on its
remuneration report.
End of Audited Remuneration report.
9 Held personally and indirectly through Mission
Equities Sdn Bhd, a company that Dato’ Mahalingam has a 34%
interest in.
10 Held personally and indirectly through Mkhambathi
Trust, a trust that Mr Burnett is a beneficiary
of.
11 Held personally and indirectly through Yacht Bay
Trust, a trust that Mr Garton is a beneficiary
of.
The
principal activities of the Group during the financial year
were:
●
100% share in M2
Capital Sdn Bhd (A Malaysian registered company) with a 20 % share
in a 250,000 tpa Biodiesel Plant in Malaysia, with a carrying value
of NIL. The asset is in care and maintenance;
●
Intention to
undertake a Reverse Take Over (RTO) as the
Company believes that it is a good candidate to undertake a RTO
with an entity that meets the ASX compliance rules and continues to
work with potential entities to complete a RTO. The planned RTO
with Aus Group signed on 5 December 2016 and was terminated on 19
January 2018 because they had been unable to fulfill the conditions
precedent to complete the transaction;
●
Other than the
intention to undertake the Reverse Take Over, there were no other
significant changes in the nature of the principal activities
during the financial year.
Other
income for the Group amounted to $1,524 (2017: $7,777). Net cash
used in operating activities was $189,859 (2017: $978,724 used).
The net loss of the Group amounted to $202,114 loss (2017:
$4,550,604 loss).
Corporate
On 5
December 2016, the Company announced that it had entered into a
Heads of Agreement to acquire the business operations of the AUS
Group, a leading manufacturer of building materials products in
Australia. The shares traded on the Australian Securities Exchange
(ASX) were placed into voluntary suspension at that time. This
transaction was anticipated to be completed via a reverse takeover,
commonly known as a RTO and required AUS Group to complete a number
of transaction condition precedents, including completing a pre-RTO
funding round to meet immediate growth working capital
requirements. On 19 January 2018 the Company terminated the
agreement with AUS Group because they had been unable to fulfill
the conditions precedent to complete the transaction.
The
Company believes that it is a good candidate to undertake an RTO
with an entity that meets the ASX compliance rules and continues to
work with potential entities to complete a RTO.
Biodiesel feedstock Segment
The
Group owns 100% of M2 Capital Sdn Bhd, a Malaysian subsidiary,
which owns a 20% stake in FGV Green Energy Sdn Bhd (FGVGE), a
refinery joint venture company. The joint venture partners are
Felda Global Ventures Holdings Berhad, the world’s largest
palm oil producer, and Benefuels, a US based company with a ground
breaking disruptive and patented technology process that allows
refineries to be operated using substantially lower cost feedstock.
This asset is carried at a NIL value by the Group as the project
has stalled.
Capital Markets and Funding
There
have been no Capital Market matters undertaken during the current
financial year.
The
Group realised an operating loss for the year ended 30 June 2018 of
$202,114 loss (2017: $4,550,604 loss), with net cash used in
operating activities of $189,859 (2017: $978,724 used). At
reporting date, the current assets less current liability deficit
was $4,926 (surplus of 2017: $192,768) and a net asset deficit of
$4,926 (2017: $194,516 net assets).
No
dividends have been paid or declared for payment.
Other
than the matters mentioned in Section 8 above, there have been no
significant subsequent events up until the date of signing this
Financial Report.
There
have been no significant changes to the state of affairs up to the
date of signing this Financial Report.
The
Company is focused on maximising stakeholder value by continuing to
look at other opportunities and projects and continues to work with
potential entities to complete a RTO. It is likely that the
existing 20% share of the refinery joint venture will be divested
on successful completion of a RTO.
No
person has applied for leave of Court to bring proceedings on
behalf of the Company or intervene in any proceedings to which the
Company is a party for the purpose of taking responsibility on
behalf of the Company for all or any part of those proceedings. The
Company was not a party to any such proceedings during the
year.
The
Board of Directors, in accordance with advice from the audit and
risk committee, is satisfied that the services disclosed below did
not compromise the external auditor’s independence for the
following reasons:
●
All non-audit
services are reviewed and approved by the audit and risk committee
prior to commencement to ensure they do not adversely affect the
integrity and objectivity of the auditor, and
●
The nature of the
services provided does not compromise the general principles
relating to auditor independence in accordance with APES 110: Code
of Ethics for professional Accountants set by the Accounting
Professional and Ethics Standards Board.
The
Group’s auditors have not provided other assurance or
non-assurance services during the year. Refer to Note 22 for
details of amounts paid to the Group’s auditors during the
year.
Mission
NewEnergy Ltd operations are not subject to any particular or
significant environmental regulation under a law of the
Commonwealth or of a State or Territory in Australia.
The
lead auditor’s independence declaration, in accordance with
S307C of the Corporations Act 2001 for the year ended 30 June 2018
has been received and can be found on page 15 of the
Directors’ Report.
Signed
in accordance with a resolution of the Board of
Directors.
Dato’ Nathan Mahalingam
Executive Chairman and Group Chief Executive Officer
Date: 21 September 2018
 |
Tel:
+61 8 6382 4600
Fax:
+61 8 6382 4601
www.bdo.com.au
|
38
Station Street
Subiaco,
WA 6008
PO
Box 700 West Perth WA 6872
Australia
|
DECLARATION
OF INDEPENDENCE OF WAYNE BASFORD TO THE DIRECTORS OF MISSION
NEWENERGY LIMITED
As lead auditor of
Mission NewEnergy Limited for the year ended 30 June 2018, I
declare that, to the best of my knowledge and belief, there have
been:
1.
No contraventions
of the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
2.
No contraventions
of any applicable code of professional conduct in relation to the
audit.
This declaration is
in respect of Mission NewEnergy Limited and the entity it
controlled during the period.
Wayne
Basford
Director
BDO
Audit (WA) Pty Ltd
Perth, 21 September
2018
BDO
Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national
association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by
guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional
Standards Legislation, other than for the acts or omissions of
financial services licensees.
|
CONSOLIDATED
STATEMENT OF PROFIT OR LOSS
|
13
|
|
|
CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
|
15
|
|
|
CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
|
16
|
|
|
CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
|
18
|
|
|
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
19
|
|
|
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
20
|
|
|
HOW
NUMBERS ARE CALCULATED
|
20
|
|
|
1
|
Nature
of operations and general information
|
20
|
|
2
|
Basis
of preparation
|
20
|
|
3
|
New,
revised or amending Accounting Standards and Interpretations
adopted
|
22
|
|
4
|
New
Accounting Standards and Interpretations not yet mandatory or early
adopted
|
22
|
|
5
|
Segment
reporting
|
22
|
|
6
|
Expenses
|
23
|
|
7
|
Income
Tax
|
24
|
|
8
|
Earnings
per share
|
25
|
|
9
|
Cash
and cash equivalents
|
26
|
|
10
|
Trade
and Other Receivables
|
26
|
|
11
|
Trade
and Other Payables
|
27
|
|
12
|
Provisions
|
27
|
|
13
|
Issued
Capital
|
27
|
|
14
|
Cash
Flow Information
|
28
|
|
GROUP
STRUCTURE
|
29
|
|
|
15
|
Investments
in subsidiaries, unconsolidated entities and
associates
|
29
|
|
RISK
|
30
|
|
|
16
|
Critical
Accounting Estimates and Judgments
|
30
|
|
17
|
Financial
Instruments and Financial Risk Management
|
31
|
|
18
|
Capital
Management
|
34
|
|
UNRECOGNISED
ITEMS
|
35
|
|
|
19
|
Capital
and Leasing Commitments
|
35
|
|
20
|
Contingent
Liabilities and Contingent Assets
|
35
|
|
21
|
Events
occurring after the reporting period
|
35
|
|
OTHER
INFORMATION
|
36
|
|
|
22
|
Remuneration
of Auditors
|
36
|
|
23
|
Related
Parties
|
36
|
|
24
|
Parent
entity information
|
36
|
|
25
|
Company
Details
|
37
|
|
26
|
Authorisation
of financial statements
|
37
|
|
Directors
declaration
|
38
|
|
|
Independent
Audit Report tomembers of Mission NewEnergy Ltd
|
39
|
|
FOR THE YEAR ENDED 30 JUNE 2018
|
|
Note
|
2018
|
2017
|
|
|
|
$
|
$
|
|
Other
income
|
|
1,524
|
7,777
|
|
Total
revenue and other income
|
|
1,524
|
7,777
|
|
Director and
Employee benefits expense
|
6a
|
-
|
(467,220)
|
|
Net foreign
exchange (losses)/gains
|
|
(4,095)
|
(10,874)
|
|
Consultants’
expenses
|
|
(6,663)
|
(13,017)
|
|
Regulatory
expenses
|
|
(56,029)
|
(40,228)
|
|
Travel
expenses
|
|
(1,990)
|
(66,488)
|
|
Rental
expenses
|
|
(9,288)
|
(11,986)
|
|
Other
expenses
|
6b
|
(121,090)
|
(298,617)
|
|
Depreciation and
amortisation expenses
|
|
(1,898)
|
(487)
|
|
Impairment of
investment in associate
|
16
|
-
|
(3,608,038)
|
|
Finance
Costs
|
|
(2,450)
|
-
|
|
(Loss)
before income tax
|
|
(201,979)
|
(4,509,178)
|
|
Income tax
expense
|
7
|
(135)
|
(3,252)
|
|
(Loss)
before associate accounted loss
|
|
(202,114)
|
(4,512,430)
|
|
Share of net (loss)
of associate accounted for using the equity method
|
15
|
-
|
(38,174)
|
|
(Loss)
for the year after tax
|
|
(202,114)
|
(4,550,604)
|
|
(Loss) attributable
to:
|
|
|
|
|
Owners of Mission
NewEnergy Ltd
|
|
(202,114)
|
(4,550,604)
|
|
Non-controlling
interests
|
|
-
|
-
|
|
|
|
(202,114)
|
(4,550,604)
|
|
|
|
||
|
CONSOLIDATED
STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 30 JUNE 2018
Contd.
|
|
||
|
Earnings per share
from continuing operations
attributable to the
ordinary equity holders of the parent:
|
|
|
|
|
Basic (loss) per
share (dollars)
|
8
|
(0.005)
|
(0.11)
|
|
Diluted (loss) per
share (dollars)
|
8
|
(0.005)
|
(0.11)
|
|
Earnings per share
from profits attributable to the
ordinary equity
holders of the parent:
|
|
|
|
|
Basic (loss) per
share (dollars)
|
8
|
(0.005)
|
(0.11)
|
|
Diluted (loss) per
share (dollars)
|
8
|
(0.005)
|
(0.11)
|
The
above Consolidated Statement of Profit or Loss should be read in
conjunction with the accompanying notes.
FOR THE YEAR ENDED 30 JUNE 2018
|
|
2018
$
|
2017
$
|
|
(Loss)
for the year
|
(202,114)
|
(4,550,604)
|
|
Other
comprehensive income
|
|
|
|
Items that may be
realised through profit or loss:
|
|
|
|
Exchange
differences on translating foreign operations
|
2,672
|
(20,146)
|
|
Other
comprehensive (loss)/income for the period net of tax
|
2,672
|
(20,146)
|
|
Total
comprehensive loss for the year
|
(199,442)
|
(4,570,750)
|
|
Attributable to
non-controlling equity interests
|
-
|
-
|
|
Attributable
to owners of the parent
|
(199,442)
|
(4,570,750)
|
|
Comprehensive
(loss) from Continuing Operations
|
(199,442)
|
(4,570,750)
|
The
above Consolidated Statement of Comprehensive Income should be read
in conjunction with the accompanying notes.
AS AT 30 JUNE 2018
|
|
Note
|
2018
|
2017
|
|
|
|
$
|
$
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
9
|
195,601
|
387,840
|
|
Trade and other
receivables
|
10
|
-
|
6,134
|
|
Other
assets
|
|
4,078
|
3,751
|
|
Total current
assets
|
|
199,679
|
397,725
|
|
|
|
|
|
|
Non-Current
Assets
|
|
|
|
|
Property, plant and
equipment
|
|
-
|
1,748
|
|
Total non-current
assets
|
|
-
|
1,748
|
|
Total
Assets
|
|
199,679
|
399,473
|
|
Current
Liabilities
|
|
|
|
|
Trade and other
payables
|
11
|
20,720
|
21,072
|
|
Short-term
provisions
|
12
|
183,885
|
183,885
|
|
Total
current liabilities
|
|
204,605
|
204,957
|
|
Net
(Liabilities)/Assets
|
|
(4,926)
|
194,516
|
|
CONSOLIDATED
STATEMENT OF FINANCIAL POSITION Contd.
|
|||
|
|
Note
|
2018
|
2017
|
|
|
|
$
|
$
|
|
Equity
|
|
|
|
|
Issued
capital
|
13
|
523,197
|
523,197
|
|
Reserves
|
|
1,187,325
|
1,184,653
|
|
Accumulated
losses
|
|
(1,715,448)
|
(1,513,334)
|
|
Total Equity /
(Deficit)
|
|
(4,926)
|
194,516
|
The
above Consolidated Statement of Financial Position should be read
in conjunction with the accompanying notes.
|
|
Ordinary
Share Capital
|
Retained
Earnings/ (losses)
|
Share
Based Payments Reserve
|
Foreign
Currency Translation Reserve
|
Total
|
|
|
$
|
$
|
$
|
$
|
$
|
|
Balance
as at 30 June 2016
|
523,197
|
3,037,270
|
150,000
|
1,054,799
|
4,765,266
|
|
Loss after income
tax expense for the year
|
-
|
(4,550,604)
|
-
|
-
|
(4,550,604)
|
|
Other Comprehensive
loss for the period
|
-
|
-
|
-
|
(20,146)
|
(20,146)
|
|
Total
Comprehensive Loss
|
|
(4,550,604)
|
|
(20,146)
|
(4,570,750)
|
|
Transactions
with owners in their capacity as owners
|
-
|
-
|
-
|
-
|
-
|
|
Balance
as at 30 June 2017
|
523,197
|
(1,513,334)
|
150,000
|
1,034,653
|
194,516
|
|
Loss after income
tax expense for the year
|
-
|
(202,114)
|
-
|
-
|
(202,114)
|
|
Other Comprehensive
income for the period
|
-
|
-
|
-
|
2,672
|
2,672
|
|
Total
Comprehensive Income/(Loss)
|
-
|
(202,114)
|
-
|
2,672
|
(189,590)
|
|
Transactions with owners in their capacity as owners
|
-
|
-
|
-
|
-
|
-
|
|
Balance
as at 30 June 2018
|
523,197
|
(1,715,448)
|
150,000
|
1,037,325
|
(4,926)
|
‘The
above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes
FOR THE YEAR ENDED 30 JUNE 2018
|
|
Note
|
2018
$
|
2017
$
|
|
Cash
Flows From Operating Activities
|
|
|
|
|
Payments to
suppliers and employees
|
|
(191,255)
|
(983,190)
|
|
Interest
received
|
|
1,524
|
7,718
|
|
Income tax
paid
|
|
(128)
|
(3,252)
|
|
Net cash (used in)
operating activities
|
14
|
(189,859)
|
(978,724)
|
|
|
|
|
|
|
Cash
Flows From Investing Activities
|
|
|
|
|
Retention
released
|
|
-
|
1,056,870
|
|
Payable associated
with retention released
|
|
-
|
(1,056,870)
|
|
Net cash provided
from investing activities
|
|
-
|
-
|
|
|
|
|
|
|
Cash
Flows From Financing Activities
|
|
|
|
|
Net cash (used) by
financing activities
|
|
-
|
-
|
|
Net
(Decrease) In Cash And Cash Equivalents
|
|
(189,859)
|
(978,724)
|
|
Cash and cash
equivalents at beginning of the financial year
|
|
387,840
|
1,400,538
|
|
Effects of exchange
rate fluctuations of cash held in foreign currencies
|
|
(2,380)
|
(33,974)
|
|
Cash
And Cash Equivalents At End Of Financial Year
|
9
|
195,601
|
387,840
|
The
above Consolidated Statement of Cash Flows should be read in
conjunction with the accompanying notes.
This
section provides additional information about those individual line
items in the financial statements that the Directors consider most
relevant in the context of the operations of the entity,
including:
(a)
information and accounting policies that are relevant for an
understanding of the items recognised in the financial statements.
Accounting policies specific to an item of disclosure are included
with that disclosure in these Financial Statements,
(b)
analysis and sub-totals, including segment
information,
(c)
information about estimates and judgements made in relation to
particular items.
Mission
NewEnergy Limited is a company domiciled in Australia (ACN: 117 065
719) and:
●
listed on the ASX
(MBT). Currently the shares on the ASX are in voluntary
suspension;
●
continues to work
with potential entities to complete a RTO;
●
that has a 20%
interest in an Associate owning a 250,000 tpa (approx. 75 million
gallon p.a.) biodiesel refinery, located in Malaysia. The 20%
interest investment is carried at NIL value as the project has
stalled due to an inability of the biodiesel refinery operating
entity to secure ongoing offtake sales contracts.
Statement of compliance
The
financial report is a general purpose financial report which has
been prepared in accordance with Australian Accounting Standards
(AASB’s) (including Australian interpretations) issued by the
Australian Accounting Standards Board (AASB) and the Corporations
Act 2001. The consolidated financial report of the Group complies
with International Financial Reporting Standards (IFRSs) and
Interpretations issued by the International Accounting Standards
Board (IASB). Mission NewEnergy Limited is a for-profit entity for
the purpose of preparing the financial statements.
These
accounting policies have been consistently applied by each entity
in the Group and are consistent with those of the previous
year.
Basis of measurement
The
financial report has been prepared on an accruals basis and is
based on historical costs. All amounts shown are in Australian
dollars ($A) unless otherwise stated.
Significant matters
Going concern
The Group incurred a net operating loss for the year ended
30 June 2018 of $202,114 loss (2017: $4,550,604 loss) and incurred
net cash outflows from operating activities of $189,859 (2017:
$978,724 used). At 30 June 2018 the Group had net a working
capital deficit of $4,926 (2017 : 192,768 surplus). At 19 September
2018 the Group had a cash balance of $125,636 and payable
liabilities of around $11,758 (excluding leave liability of
$183,885, which the employees have agreed not to pay down unless
the Group has sufficient cash resources to pay). The Group currently has no source of
income and the cash balance is expected to be exhausted within 10
months based on the 2018/19 forecast profile prepared by
management, unless the Group is able to secure a further source of
funding.
The ability of the Group to continue as a going concern is
dependent in the short term on completion of an RTO, securing an
advance of funds from a potential RTO candidate or generation of
cash from an equity placement.
These
conditions indicate a material uncertainty that cast a 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.
Management
believe there are sufficient funds to meet the Group’s
working capital requirements as at the date of this report, and
that there are reasonable grounds to believe that the Group will
continue as a going concern as a result of a combination of the
following reasons:
●
the Group has
received confirmation from its employees and Directors that they
have forgone all salary entitlements since 1 December 2016 and will
not call on their annual leave entitlements until the Group has a
clear ability to pay; and
●
management expects
the Group will be able to secure funding from completion of a RTO
or an alternative source.
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 adjustment relating to the
recoverability and classification of recorded assets or liabilities
that might be necessary should the entity note continue as a going
concern.
Carrying value of investment in associate
The
Group owns 100% of M2 Capital Sdn Bhd, a Malaysian subsidiary,
which owns a 20% stake in FGV Green Energy Sdn Bhd (FGVGE), a
refinery joint venture company (see note 15). This project has
stalled.
The
Group’s investment in associate which is fully impaired
(2017: fully impaired), please refer to note 15 and 16 for further
information.
Goods and Services Tax (GST)
Revenues,
expenses and assets are recognised net of the amount of GST, except
where the amount of GST incurred is not recoverable from the
Australian Tax Office. In these circumstances the GST is recognised
as part of the cost of acquisition of the asset or as part of an
item of the expense. Receivables and payables in the statement of
financial position are shown inclusive of GST
Functional and Presentation currency
The
consolidated financial statements are presented in Australian
Dollars. The functional currencies of the operating units are as
follows:
●
Malaysian
investments (20% investment in Associate) - Malaysian
Ringgit
●
Other –
Australian Dollar.
The
Board of Directors approved this financial report on 21 September
2018.
The
Group has adopted all of the new, revised or amending Accounting
Standards and Interpretations issued by the AASB that are mandatory
for the current reporting period. The adoption of these Accounting
Standards and Interpretations did not have a material impact on the
financial performance or position of the consolidated
entity.
Any
new, revised or amending Accounting Standards or Interpretations
that are not yet mandatory have not been early
adopted.
Australian
Accounting Standards and Interpretations that have recently been
issued or amended but are not yet mandatory, have not been early
adopted by the consolidated entity for period ended 30 June 2018.
The consolidated entity's assessment of the impact of these new or
amended Accounting Standards and Interpretations, most relevant to
the consolidated entity, are set out below.
AASB 9 Financial Instruments
These amendments must be applied for financial years commencing on
or after 1 January 2018. Therefore application date for the Company
will be 1 July 2018.
AASB 9
addresses the classification, measurement and de-recognition of
financial assets and financial liabilities, it also sets out new
rules for hedge accounting. There will be no impact on the
Company’s classification or measurement for financial assets
and financial liabilities, currently the Group holds no financial
instruments that would it would have paid the amortised cost for.
The new hedging rules align hedge accounting more closely with the
Company’s risk management practices. As a general rule it
will be easier to apply hedge accounting going forward. The new
standard also introduces expanded disclosure requirements and
changes in presentation. Currently the Group does not enter into
derivative contracts.
AASB 15 Revenue from Contracts with Customers
These amendments must be applied for annual reporting
periods beginning on or after 1 January 2018. Therefore application
date for the Company will be 1 July 2018.
An entity will recognise revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in
exchange for those goods or services. This means that our Associate
once in production, will only recognize revenue when control of
goods or services is transferred, rather than on transfer of risks
and rewards as is currently the case under IAS 18
Revenue.
AASB 16 Leases
AASB 16 eliminates the operating and finance lease classifications
for lessees currently accounted for under AASB 117 Leases. It
instead requires an entity to bring most leases onto its statement
of financial position in a similar way to how existing finance
leases are treated under AASB 117. An entity will be required to
recognise a lease liability and a right of use asset in its
statement of financial position for most leases.
There are some optional exemptions for leases with a period of 12
months or less and for low value leases. The application date of
this standard is for annual reporting periods beginning on or after
1 January 2019. Due to the recent release of this standard, the
group has not yet made a detailed assessment of the impact of this
standard.
It is not expected that there will be any material impact on the
financial statements when these amendments are
adopted.
|
Segment
Report – 2018
|
Malaysia
|
Australia
|
Total
|
|
|
2018
$
|
2018
$
|
2018
$
|
|
Revenue
|
|
|
|
|
Interest
received
|
-
|
1,524
|
1,524
|
|
Total
segment revenue
|
-
|
1,524
|
1,524
|
|
Depreciation and
amortisation
|
(1,898)
|
-
|
(1,898)
|
|
Finance
costs
|
-
|
(2,450)
|
(2,450)
|
|
Impairment of
investment in associate
|
-
|
-
|
-
|
|
Other
expenses
|
(31,490)
|
(167,665)
|
(199,155)
|
|
Segment result
before tax
|
(33,388)
|
(168,591)
|
(201,979)
|
|
Income tax
expense
|
(135)
|
-
|
(135)
|
|
Net
(loss) for the year
|
|
|
(202,114)
|
|
|
|
|
|
|
Non-current Segment
assets
|
-
|
-
|
-
|
|
Total Segment
assets
|
9,844
|
189,835
|
199,679
|
|
Segment
liabilities
|
(340)
|
(204,265)
|
(204,605)
|
|
|
|
|
|
|
Segment
Report – 2017
|
Malaysia
|
Australia
|
Total
|
|
|
2017
$
|
2017
$
|
2017
$
|
|
Revenue
|
|
|
|
|
Interest
received
|
2,744
|
5,028
|
7,772
|
|
Other
income
|
-
|
5
|
5
|
|
Total
segment revenue
|
2,744
|
5,033
|
7,777
|
|
Employee benefits
expense
|
(70,590)
|
(34,679)
|
(105,269)
|
|
Executive Directors
benefits expense
|
(15,991)
|
(293,600)
|
(309,591)
|
|
Non-Executive
Directors benefits expenses
|
-
|
(52,360)
|
(52,360)
|
|
Depreciation and
amortisation
|
(487)
|
-
|
(487)
|
|
Impairment of
investment in associate
|
(3,608,038)
|
-
|
(3,608,038)
|
|
Other
expenses
|
(169,139)
|
(272,071)
|
(441,210)
|
|
Share of net loss
of associate accounted for using the equity method
|
(38,174)
|
-
|
(38,174)
|
|
Segment result
before tax
|
(3,899,675)
|
(647,677)
|
(4,547,352)
|
|
Income tax
expense
|
(3,252)
|
-
|
(3,252)
|
|
Net
(loss) for the year
|
|
|
(4,550,604)
|
|
|
|
|
|
|
Non-current Segment
assets
|
1,748
|
-
|
1,748
|
|
Total Segment
assets
|
40,499
|
358,974
|
399,473
|
|
Segment
liabilities
|
(3,864)
|
(201,093)
|
(204,957)
|
|
|
|
|
|
|
Accounting Policies: Segment reporting
The
Group Chief Executive Officer is the Chief operating decision
maker. The reportable segments presented are in line with the
segmental information reported during the financial year to the
Group Chief Executive Officer.
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, inventories, intangibles and property, plant and
equipment, net of allowances and accumulated depreciation and
amortisation. Segment liabilities consist principally of payables,
employee benefits, accrued expenses and borrowings. Segment assets
and liabilities do not include deferred income taxes. Segments
exclude discontinued operations.
Intersegment Transfers: There are no intersegment
transfers.
Business and Geographical Segments: The Group had one key
business segment, being biodiesel, which is located in
Malaysia.
|
|
|
2018
$
|
2017
$
|
|
6a) Director and
Employee benefits expense
|
|
|
|
Wages and
Salaries
|
-
|
450,318
|
|
Contribution to
defined contribution plans
|
-
|
16,902
|
|
|
-
|
467,220
|
|
6b) Other
expenses:
|
|
|
|
Audit
fees
|
26,816
|
46,748
|
|
Computer
maintenance & consumables
|
-
|
592
|
|
Communication
expenses
|
7,976
|
14,725
|
|
Insurance
costs
|
58,192
|
78,004
|
|
Legal
fees
|
14,787
|
52,508
|
|
Due diligence
costs
|
-
|
73,145
|
|
Other
administrative costs
|
13,319
|
32,895
|
|
Total
|
121,090
|
298,617
|
|
|
2018
$
|
2017
$
|
|
a. The components
of tax expense comprise
|
|
|
|
Current
tax
|
(135)
|
(3,252)
|
|
Deferred
tax
|
-
|
-
|
|
|
(135)
|
(3,252)
|
|
b. The prima facie
tax on the (loss) from ordinary activities before income tax is
reconciled to the income tax as follows:
|
|
|
|
Accounting (loss)
before tax
|
(201,979)
|
(4,509,178)
|
|
Prima facie tax
(benefit on (loss) from ordinary activities before income tax at
27.5%
|
(55,544)
|
(1,352,753)
|
|
Adjusted
for:
|
|
|
|
Tax effect
of:
|
|
|
|
● losses not brought
to account
|
55,409
|
1,349,501
|
|
|
(135)
|
(3,252)
|
|
Add:
|
|
|
|
Over provision for
income tax in prior year
|
-
|
-
|
|
Income tax
attributable to entity
|
(135)
|
(3,252)
|
|
|
|
|
|
The applicable
weighted average effective current tax rate is as
follows:
|
0%
|
0%
|
Deferred
tax assets on temporary differences and losses are not recognised
because it is not probable that future taxable profit will be
available against which the unused tax losses can be used and may
be subject to continuity of ownership and business
test.
At both
period ends the Group has not recognised any current or deferred
tax liabilities or assets.
Deferred
tax assets on losses to a value of $2.9 million (2017: $2.8
million) to date are not brought to account due to not being
probable of being recovered. In addition, deferred tax assets for
deductible temporary differences of A$3.1 million (2017: A$3.1
million).
|
Accounting Policy: Income Tax
The
charge for current income tax expense is based on the profit/(loss)
for the year adjusted for any non-assessable or disallowed items.
It is calculated using the tax rates that have been enacted or are
substantially enacted by the reporting date.
Deferred
tax is accounted for using the balance sheet liability method in
respect of temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial
statements. No deferred income tax will be recognised from the
initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable
profit or loss.
Deferred
tax is calculated at the tax rates that are expected to apply to
the period when the asset is realised or liability is settled.
Deferred tax is credited in the Statement of profit or loss, except
where it relates to items that may be credited directly to equity,
in which case the deferred tax is adjusted directly against
equity.
Deferred
income tax assets are recognised to the extent that it is probable
that future tax profits will be available against which deductible
temporary differences can be utilised.
The
amount of benefits brought to account or which may be realised in
the future is based on the assumption that no adverse change will
occur in income taxation legislation and the anticipation that the
Group will derive sufficient future assessable income to enable the
benefit to be realised and comply with the conditions of
deductibility imposed by the law.
|
|
a. Reconciliation
of earnings to profit or loss
|
|
|
|
Earnings used in
calculation of both ordinary and dilutive EPS
|
(202,114)
|
(4,550,604)
|
|
b. Earnings
used in calculation of both ordinary and dilutive EPS for ongoing
operations
|
(202,114)
|
(4,550,604)
|
|
c. Weighted average
number of ordinary shares outstanding during the year used in
calculating basic EPS
|
40,870,275
|
40,870,275
|
|
Effect
of:
|
|
|
|
Weighted average
number of ordinary shares outstanding during the year used in
calculating dilutive EPS
|
40,870,275
|
40,870,275
|
|
Accounting policy: Earnings per share
Basic
earnings per share are calculated by dividing the profit
attributable to owners of the company, excluding costs of servicing
equity other than ordinary shares, by the weighted average number
of ordinary shares outstanding during the financial
year.
Diluted
earnings per share adjusts the figures used in the determination of
basic earnings per share to take into account the after tax effect
of interest and other financing costs associated with the dilutive
potential ordinary shares, and the weighted average number of
additional ordinary shares that would have been outstanding
assuming the conversion of all dilutive potential ordinary
shares.
|
|
|
2018
$
|
2017
$
|
|
Cash at bank and in
hand
|
102,705
|
147,673
|
|
Short-term bank
deposits
|
92,896
|
240,167
|
|
|
195,601
|
387,840
|
See
note 17, Financial Instruments, for information on risk exposures
for cash and cash equivalents.
|
Accounting policy: Cash and Cash Equivalents
Cash
and cash equivalents include cash on hand, deposits held at call
with banks, other short-term highly liquid investments with
original maturities of 3 months or less.
|
|
|
2018
$
|
2017
$
|
|
CURRENT
|
|
|
|
Other
receivables
|
-
|
6,134
|
|
TOTAL
|
-
|
6,134
|
At each
reporting date, the Board assesses the likely timing of
recoverability of receivables and bases this assessment on a number
of assumptions and estimates. Please refer to note 17 for a
discussion around credit risk, provisioning and age analysis of
financial assets.
|
CURRENT
|
2018
$
|
2017
$
|
|
Unsecured
liabilities:
|
|
|
|
Trade
payables
|
9,730
|
82
|
|
Sundry payables and
accrued expenses
|
10,990
|
20,990
|
|
|
20,720
|
21,072
|
|
CURRENT
|
|
|
|
Provision
for leave
|
183,885
|
183,885
|
|
|
183,885
|
183,885
|
|
The
group has received confirmation from its employees and Directors
that they will not call on their annual leave entitlements until
the group has a clear ability to pay.
|
||
|
Fully
paid ordinary shares (Issued and authorised)
|
||||
|
|
2018
Number
|
2018
$
|
2017
Number
|
2017
$
|
|
At the beginning of
reporting period
|
40,870,275
|
523,197
|
40,870,275
|
523,197
|
|
Ordinary shares
issued
|
-
|
-
|
-
|
-
|
|
At
reporting date
|
40,870,275
|
523,197
|
40,870,275
|
523,197
|
Ordinary
shares participate in dividends and the proceeds on winding up of
the parent entity in proportion to the number of shares held. At
shareholder meetings each ordinary share is entitled to one vote
when a poll is called, otherwise each shareholder has one vote on a
show of hands.
There
were no warrants, performance rights or options in existence at
reporting date.
|
Accounting policy: Contributed equity
Ordinary
shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
|
|
Reconciliation
of Cash Flow from Operations with (Loss) after Income
Tax
|
2018
$
|
2017
$
|
|
(Loss) after income
tax
|
(202,114)
|
(4,550,604)
|
|
Non
cash flows in profit / (loss)
|
|
|
|
Depreciation of
plant and equipment – continued operations
|
1,898
|
487
|
|
Share of net
loss/(profit) of associate
|
-
|
38,174
|
|
Provision for
employee benefits
|
-
|
(2,826)
|
|
Other non cash
adjustments
|
-
|
4,436
|
|
Impairment of
associate
|
-
|
3,608,038
|
|
Net
cash (used in) operating activities before change in assets and
liabilities
|
(200,216)
|
(902,295)
|
|
|
|
|
|
Change in assets
and liabilities
|
|
|
|
Decrease in
receivables
|
-
|
1,091
|
|
(Increase) /
decrease in other assets
|
6,471
|
(4,691)
|
|
(Increase) in
creditors and accruals
|
(377)
|
(87,870)
|
|
Foreign Currency
Adjustments
|
4,263
|
15,041
|
|
|
10,357
|
(76,429)
|
|
|
|
|
|
Cash
(used in) operations
|
(189,859)
|
(978,724)
|
There
were no non-cash investing activities during the reported
periods.
Cash
flows are presented in the statement of cash flows on a gross
basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash
flows.
This
section provides information which will help users understand how
the group structure affects the financial position and performance
of the group as a whole. In particular, there is information
about:
●
changes to the structure that occurred during the year as a result
of business combinations and the disposal of a discontinued
operation
●
transactions with non-controlling interests and interests in joint
ventures.
A list
of subsidiaries is provided in note 15. This note also discloses
details about the group’s equity accounted
investments.
(a)
Subsidiaries
The
Group’s subsidiaries at 30 June 2018 are set out below.
Unless otherwise stated, they have share capital consisting solely
of ordinary shares that are held directly by the Group, and the
proportion of ownership interests held equals the voting rights
held by the Group. The country of incorporation or registration is
also their principal place of business.
|
|
|
Percentage
Owned (%)
|
Ownership
interest held by non-controlling interests
|
|
||
|
|
Country
of Incorporation
|
2018
|
2017
|
2018
|
2017
|
Principal
activities
|
|
A.
Controlled Entities Consolidated
|
|
|
|
|
|
|
|
Parent
Entity:
|
|
|
|
|
|
|
|
Mission NewEnergy
Limited
|
Australia
|
|
|
|
|
|
|
Subsidiaries
of Mission NewEnergy Limited:
|
|
|
|
|
|
|
|
Mission Biofuels
Sdn Bhd
|
Malaysia
|
100
|
100
|
-
|
-
|
Administrative
entity
|
|
M2 Capital Sdn
Bhd
|
Malaysia
|
100
|
100
|
-
|
-
|
Holds 20% of FGV
Green Energy SB
|
|
B.
Associates
|
|
|
|
|
|
|
|
Felda Green Energy
Sdn Bhd
|
Malaysia
|
20
|
20
|
80
|
80
|
Biodiesel
refining
|
Set out
below is the associate of the group as at 30 June 2018. The entity
listed below has share capital consisting solely of ordinary
shares, which are held directly by the group. The country of
incorporation or registration is also their principal place of
business, and the proportion of ownership interest is the same as
the proportion of voting rights held.
|
Name of entity
|
Country of Incorporation
|
Percentage Owned (%)
|
Nature of relationship
|
Measurement method
|
Carrying amount ($)
|
||
|
2018
|
2017
|
2018
|
2017
|
||||
|
FGV
Green Energy Sdn Bhd
|
Malaysia
|
20
|
20
|
Associate
|
Equity
method
|
-
|
-
|
|
Summarised statement of comprehensive income
|
FGV Green Energy Sdn Bhd
|
|
|
2018
|
2017
|
|
|
(Loss)/Profit
from operations
|
(194,886)
|
(354,842)
|
|
The
Groups share of (Loss)/profit from operations
|
-
|
(38,174)
|
|
Summarised statement of financial position
|
FGV Green Energy Sdn Bhd
|
|
|
2018
|
2017
|
|
|
Cash
and cash equivalents
|
16,496
|
74,158
|
|
Other
current assets
|
85,209
|
230,602
|
|
Non-current
assets
|
37,852,240
|
33,125,295
|
|
Current
liabilities
|
(21,967,251)
|
(18,775,207)
|
|
Non-current
financial liabilities
|
-
|
-
|
|
Net
Assets
|
15,986,694
|
14,654,848
|
|
Accounting policy: Principles of Consolidation
The
consolidated financial statements comprise the financial statements
of Mission NewEnergy Limited and its subsidiaries, as defined in
Accounting Standard AASB 127 ‘Consolidated and Separate
Financial Statements’. These include Mission Biofuels Sdn Bhd
and M2 Capital Sdn Bhd. A list of controlled and associate entities
with details of acquisitions and disposals is contained in this
note. All controlled entities have a 30 June financial year-end.
The Associate company has a 31 December year end.
All
inter-company balances and transactions between entities in the
Consolidated Group, including any unrealised profits or losses,
have been eliminated on consolidation. Accounting policies of
subsidiaries have been changed where necessary to ensure
consistency with the policies applied by the parent
entity.
Where
controlled entities have entered or left the Consolidated Group
during the year, their operating results have been
included/excluded from the date control was obtained or until the
date control ceased.
Non-controlling
interests in the equity and results of the entities that are
controlled are shown as a separate item in the consolidated
financial report.
Foreign Currency Transactions and Balances
Functional
and presentation currency
The
functional currency of each of the Group’s entities is
measured using the currency of the primary economic environment in
which that entity operates. The consolidated financial statements
are presented in Australian dollars which is the parent
entity’s functional and presentation currency.
Transaction
and balances
Foreign
currency transactions are translated into functional currency using
the exchange rates prevailing at the date of the transaction.
Foreign currency monetary items are translated at the year-end
exchange rate. Non-monetary items measured at historical cost
continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were
determined.
Exchange
differences arising on the translation of monetary items are
recognised in the Statement of profit or loss, except where
deferred in equity as a qualifying cash flow or net investment
hedge.
Exchange
differences arising on the translation of non-monetary items are
recognised directly in equity to the extent that the gain or loss
is directly recognised in equity, otherwise the exchange difference
is recognised in the Statement of Profit or Loss.
Group
companies
The
financial results and position of foreign operations whose
functional currency is different from the Group’s
presentation currency are translated as follows:
● assets and
liabilities are translated at year-end exchange rates prevailing at
that reporting date;
● income and expenses
are translated at average exchange rates for the period where this
is not materially different from the rate at the date of the
transaction; and
● retained earnings
are translated at the exchange rates prevailing at the date of the
transaction.
Exchange
differences arising on translation of foreign operations are
transferred directly to the Group’s foreign currency
translation reserve in the statement of financial position. These
differences are recognised in the Statement of Profit or Loss in
the period in which the operation is disposed.
|
This
section of the notes discusses the groups exposure to various risks
and shows how these could affect the Groups financial position and
performance.
The
preparation of annual financial reports requires the Board to make
judgements, estimates and assumptions that affect the application
of accounting policies and the reported amounts of assets and
liabilities, income and expenses. The Board evaluates estimates and
judgments incorporated into the financial report based on
historical knowledge and best available current information.
Estimates assume a reasonable expectation of future events and are
based on current trends and economic data, obtained both externally
and within the Group. Actual results may differ from these
estimates.
Except
as described below, in preparing this consolidated financial
report, the significant judgements made by management in applying
the Group’s accounting policies and the key sources of
estimation uncertainty were the same as those that were applied to
the consolidated financial report as at end for the year ended 30
June 2018. During the twelve months ended 30 June 2018 management
reviewed its estimates in respect of:
Impairment of assets
The
Group assesses impairment of assets at each reporting date by
evaluating conditions specific to the Group that may lead to
impairment. Where an impairment trigger exists, the recoverable
amount of the asset is determined.
Investments in subsidiaries
Investments
held by the parent entity, Mission NewEnergy Limited, are reviewed
for impairment if there is any indication that the carrying amount
may not be recoverable. The recoverable amount is assessed by
reference to the higher of ‘value in use’ (being the
net present value of expected future cash flows of the relevant
cash generating unit) and ‘fair value less costs to
sell’.
In line
with the impairment of the carrying value of assets in the
subsidiaries, the parent entity has impaired the value of all
subsidiaries to zero. This accounting adjustment has no impact on
the cash flows or the Consolidated Financial Statements of the
Group. Refer to note 24: Parent Information for further
details.
Investments in associates/Non-Current Assets held for
sale
The
Group owns 100% of M2 Capital Sdn Bhd, a Malaysian subsidiary,
which owns a 20% stake in FGV Green Energy Sdn Bhd (FGVGE), a
refinery joint venture company. Investments in associates held by
the parent entity, Mission NewEnergy Limited, are reviewed for
impairment if there is any indication that the carrying amount may
not be recoverable.
During
the prior financial year the Group announced an intention to
undertake a Reverse Take Over (refer to the Director’ Report
for further details). Under the RTO arrangement the Group was
required to dispose of the shares held in the Associate Joint
Venture Company. The accounting standards require assets held for
sale to be separately disclosed on statement of financial position
with the value of the investment into the joint venture company to
be accounted for at the lower of carrying value or fair value less
costs to sell.
In assessing the carrying value of the investment, the following
factors were considered by the Directors:
o
Mission
does not hold a refining asset, however it holds a 20% share in the
refining JV,
o
This
refining JV is not a listed publically traded entity with a readily
determinable share price, nor is there a ready market to sell the
20% holding,
o
Mission
does not have the voting or management rights to force any actions
on the JV company, (be that to commence refurbishment, sell the
asset as a going concern or for sell for scrap value),
o
Should
the JV company require further equity funding to undertake the
refurbishment the group has insufficient current cash proceeds to
protect its equity position and hence our shareholding position
would likely be diluted.
Given that the Group had entered into this agreement in December
2016 which required the sale of its 100% stake in M2 Capital, which
owns the 20% stake in the JV company and the delays being
experienced with the project, management has been unsuccessful to
date in disposing of the investment, however continues to actively
seek buyers. Accordingly the Directors deemed it prudent to impair
the carrying value of the investment to NIL during the prior
financial year. Should the Group sell the refinery an impairment
reversal is expected to be recognised in the financial records of
the Group. As the project remains stalled at 30 June 2018, the
carrying value is retained at NIL.
|
|
2018
|
2017
|
|
|
$
|
$
|
|
Impairment of
investment in associate
|
-
|
3,608,038
|
|
|
-
|
3,608,038
|
Financial
Risk Management
The
Group has a financial risk management policy in place and the
financial risks are overseen by the Board. The Group’s
financial instruments consist mainly of deposits with banks, other
financial assets and accounts payable.
The
principal risks the Group is exposed to through its financial
instruments are interest rate risk, foreign currency risk,
liquidity risk and credit risk.
The
Group does not have any financial assets carried at fair value
therefore no further disclosure in relation to the fair value
hierarchy is presented. In addition the group does not have any
financial instruments that are subject to recurring or
non-recurring fair value measurements.
As at
30 June 2018 and 30 June 2017 the group held the following
financial instruments:
|
|
2018
$
|
2017
$
|
|
Financial
assets
|
|
|
|
Cash and cash
equivalents
|
195,601
|
387,840
|
|
Receivables
(Current)
|
-
|
6,134
|
|
Financial
liabilities
|
|
|
|
Trade and other
payables
|
20,720
|
21,072
|
The
fair value of cash and cash equivalents, other financial assets,
receivables, trade and other payables and current loans are
short-term instruments in nature whose carrying value is equivalent
to fair value.
Interest rate risk
Interest
rate risk is managed with floating rate deposits.
Group sensitivity
At 30
June 2018, if interest rates had changed by -/+ 25 basis points,
with all other variables held constant, the following financial
impacts would have been recorded by the Group;
●
Effect on post tax
profit – A$NIL lower/higher (2017: A$ Nil
lower/higher)
●
Equity would have
been – A$NIL lower/higher (2017: A$ Nil
lower/higher)
Foreign currency risk
The
Group holds its 20% share of the refinery through a number of
international subsidiaries and is thus exposed to fluctuations in
foreign currencies, arising from the foreign currencies held in its
bank accounts, and the translation of results from the
international subsidiaries. The foreign exchange exposures are
primarily to the Malaysian Ringgit and the US dollar.
Foreign
currency risks arising from commitments in foreign currencies are
managed by holding cash in that currency. Foreign currency
translation risk is not hedged, with translation differences being
reflected in the foreign currency translation reserve.
Group sensitivity
At 30
June 2018, if foreign currencies had changed by -/+ 10%, with all
other variables held constant, the following financial impacts
would have been recorded by the Group;
Effect
on cash and cash equivalent – A$11,238 lower / A$9,194 higher
(2017: A$6,229 lower/ A$ 18,624 higher)
Profit
and Loss would have been – A$11,238 lower / A$9,194 higher
(2017: A$6,229 lower/ A$ 18,624 higher)
Hedging of Foreign Currency Risk
At
financial report date the Group had no forward exchange contracts
in place.
Credit risk
The
following table sets out the credit quality of financial
assets:
|
|
2018
$
|
2017
$
|
|
Cash and Cash
Equivalents
|
|
|
|
Counterparties with external credit rating (Standard and
Poors)
|
|
|
|
A-1+
(Australian)
|
189,836
|
358,974
|
|
P-2
(Malaysia)
|
5,765
|
28,866
|
|
|
195,601
|
387,840
|
|
Receivables
|
|
|
|
Counterparties without external credit rating
|
|
|
|
Group
1
|
-
|
6,134
|
Commodity Risk
As there was no inventory held as at 30 June 2018, the Group has no
direct exposure to market prices of input costs into the
production of biodiesel.
Liquidity risk
|
|
|
|
Weighted
Average Interest Rate
|
|
|
|
2018
|
2017
|
2018
|
2017
|
|
|
$
|
|
$%
|
%
|
|
Financial Assets:
|
|
|
|
|
|
Cash
and cash equivalents
|
195,601
|
387,840
|
1.02
|
1.28
|
|
Loans
and Receivables
|
-
|
6,134
|
-
|
-
|
|
|
195,601
|
393,974
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
204,605
|
204,957
|
|
|
The
Group manages liquidity risk by monitoring forecast cash flows and
ensuring that adequate cash is maintained to meet known
liabilities. The Group has no current source of income and has
negotiated with key management personnel to not take salaries or
Directors fees.
|
Accounting policy: Financial Instruments
Recognition
Financial
instruments are initially measured at fair value on trade date,
which includes transaction costs (except where the instrument is
classified as ‘fair value through profit or loss’ in
which case transaction costs are expensed to profit or loss
immediately), when the related contractual rights or obligations
exist. Subsequent to initial recognition these instruments are
measured as set out below.
|
Management
controls the capital of the Group in order to maintain an
appropriate debt to equity ratio, provide the shareholders with
adequate returns and ensure that the Group can fund its operations
and continue as a going concern. Due to the stage that the business
is in, managements approach would be to fund the business with
equity where required. Management reviews historic and forecast
cash flows on a regular basis in order to determine funding
needs.
The
Group has no debt and capital includes ordinary share capital,
supported by financial assets.
This
section of the notes provides information about items that are not
recognised in the financial statements as they do not (yet) satisfy
the recognition criteria.
The
group has no operating lease or capital expenditure
commitments.
The
Group is not aware of any contingent liabilities or contingent
assets as at 30 June 2018.
There
have been no significant subsequent events up until the date of
signing this Financial Report.
This
section of the notes includes other information that must be
disclosed to comply with the accounting standards and other
pronouncements, but that is not immediately related to individual
line items in the financial statements.
|
|
2018
$
|
2017
$
|
|
Audit
services
|
|
|
|
Remuneration of the
auditor of the parent entity for:
|
|
|
|
● auditing or
reviewing the financial reports – BDO Audit (WA) Pty
Ltd
|
26,816
|
36,837
|
During
the period a subsidiary in the Group leased a portion of office
space from a company owned by the Chief Executive Officer at a cost
of around A$650 per month. The lease is on a month to month
basis.
There
were no other transactions with related parties during the period
other than with subsidiaries which were 100% wholly
owned.
Key
management personnel compensation
|
|
2018
$
|
2017
$
|
|
Short-term employee
benefits
|
-
|
331,883
|
|
Post-employment
benefits
|
-
|
16,904
|
|
|
-
|
348,787
|
Detailed
remuneration disclosures are provided in the remuneration report on
pages 5 to 11.
|
|
2018
|
2017
|
|
Information
relating to Mission NewEnergy Limited:
|
$
|
$
|
|
Current
assets
|
189,835
|
358,974
|
|
Non-current
assets
|
-
|
-
|
|
Total
assets
|
189,835
|
358,974
|
|
Current
liabilities
|
(204,265)
|
(201,093)
|
|
Total
liabilities
|
(204,265)
|
(201,093)
|
|
Net asset surplus /
(deficit)
|
(14,430)
|
157,881
|
|
Issued
capital
|
418,635
|
418,635
|
|
Opening Retained
Profit / (Loss)
|
(410,755)
|
3,957,431
|
|
Share based
payments reserve
|
150,000
|
150,000
|
|
Total
shareholders’ equity/deficit
|
(157,880)
|
(4,526,066)
|
|
(Loss) of the
parent entity during the year
|
(172,310)
|
(4,368,185)
|
|
Total
shareholders’ equity deficit/(surplus)
|
14,430
|
(157,881)
|
|
|
2018
$
|
2017
$
|
|
Details of any
contingent liabilities of the parent entity
|
-
|
-
|
|
Details of any
contractual commitments by the parent entity for the acquisition of
property, plant or equipment.
|
-
|
-
|
The
parent entity is not aware of any other contingent liabilities or
contingent assets as at 30 June 2018.
The
registered office of the company is: Mission NewEnergy Limited,
Unit B9, 431 Roberts Road, Subiaco, WA 6008,
Australia.
The principal places of business are:
|
Australia
|
Mission NewEnergy LimitedHead Office Unit B9, 431 Roberts
Rd, Subiaco, Western Australia, 6008, Australia.
|
|
Malaysia
|
Mission Biofuels Sdn Bhd
M2 Capital Sdn Bhd
No 5E
Nadayu 28 Dagang
Jalan
PJS 11/7
Bandar
Sunway
47500
Subang Jaya
Selangor,
Malaysia
|
The
consolidated financial statements for the year ended 30 June 2018
(including comparatives) were approved by the Board of Directors on
21 September 2018.
Dato’ Nathan Mahalingam
Director
Mission
NewEnergy Limited and Controlled Entities
(ABN 63
117 065 719)
1.
In the opinion of
the Directors of Mission NewEnergy Limited (the
company):
a.
The consolidated
financial statements and notes are in accordance with the
Corporations Act 2001, including:
I.
giving a true and
fair view of the financial position of the Group as at 30 June
2018;
II.
and of it’s
performance, for the financial year ended on that date,
and
III.
complying with
Australian Accounting Standards (including Australian Accounting
Interpretations) and the Corporations Regulations 2001;
and
IV.
The financial
report also complies with International Financial Reporting
Standards and other mandatory professional reporting requirements
as disclosed in note 2.
b.
there are
reasonable grounds to believe that Mission NewEnergy Ltd will be
able to pay its debts as and when they become due and
payable
2.
The Directors have
been given the declarations required by section 295A of the
Corporations Act 2001 from the Group Chief Executive Officer and
Chief Finance Officer for the financial year ended 30 June
2018.
This
declaration is made in accordance with a resolution of the Board of
Directors.
Dato’ Nathan Mahalingam
Executive Chairman and Group Chief Executive Officer
Dated: 21 September 2018
|
|
Tel:
+61 8 6382 4600
Fax:
+61 8 6382 4601
www.bdo.com.au
|
38
Station Street
Subiaco,
WA 6008
PO
Box 700 West Perth WA 6872
Australia
|
INDEPENDENT AUDITOR'S REPORT
To the members of Mission NewEnergy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Mission NewEnergy Limited
(the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial
position as at 30 June 2018, the
consolidated statement of profit or loss, the consolidated
statement of comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of
cash flows for the year then
ended, and notes to the financial report, including a summary of
significant accounting policies and
the directors’ declaration.
In our opinion the accompanying financial report of the Group, is
in accordance with the Corporations Act
2001, including:
(i) Giving a true and fair view of the Group’s financial
position as at 30 June 2018 and of its financial
performance for the year ended on that date; and
(ii) Complying with Australian Accounting Standards and the
Corporations Regulations 2001.
Basis for
opinion
We conducted our audit in accordance with Australian Auditing
Standards. Our responsibilities under those
standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Group in
accordance with the Corporations Act
2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board’s APES
110 Code of Ethics for Professional Accountants (the Code) that are
relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the
Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if
given to the directors as at the time
of this auditor’s report. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for
our opinion.
Material uncertainty related to
going concern
We draw attention to Note 2 in the financial report which describes
the events and/or conditions which give
rise to the existence of a material uncertainty that may cast
significant doubt about the Group’s ability
to continue as a going concern and therefore the Group may be
unable to realise its assets and discharge
its liabilities in the normal course of business.
Our
opinion is not modified in respect of this matter.
BDO Audit
(WA) Pty Ltd ABN 79 112 284 787 is a member of a national
association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an
Australian company limited by guarantee. BDO Audit (WA) Pty
Ltd and BDO Australia Ltd are members of BDO International Ltd, a
UK company limited by guarantee, and form part
of the international BDO network of independent member firms.
Liability limited by a scheme approved under Professional Standards
Legislation other than for the
acts or omissions of financial services
licensees
Key audit
matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our
audit of the financial report of the current period. These matters
were addressed in the context of our
audit of the financial report as a whole, and in forming our
opinion thereon, and we do not provide a
separate opinion on these matters. In addition to the matter
described in the Material uncertainty related
to going concern section, we have determined the matters described
below to be the key audit
matters to be communicated in our report.
Valuation of Investment in Associate
|
Key
audit matter
|
How
the matter was addressed in our audit
|
|
As disclosed in Note 16, the carrying amount of the
investment in associate asset held for sale remains at
nil
at 30 June 2018.
Given the complexity and judgmental estimates used in
determining the recoverable amount of the asset, we
consider this area to be a key audit matter.
|
Our procedures included, but were not limited to:
● Evaluating the Group’s assumptions and
estimates
used to determine the recoverable
amount of the asset;
● Obtaining an update from management regarding
progress
of the sale of the Group’s 20% interest in
the associate;
● Discussing with management the current status
and
activities of the refinery project;
● Reviewing the financial report of the associate to
confirm
no development of the project; and
● Assessing the completeness and adequacy of the
disclosures
made in note 16 to the financial report.
|
Other
information
The directors are responsible for the other information. The other
information comprises the information
contained in directors’ report for the year ended 30 June
2018, but does not include the financial
report and our auditor’s report thereon, which we obtained
prior to the date of this auditor’s report,
and the annual report, which is expected to be made available to us
after that date.
Our opinion on the financial report does not cover the other
information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial report, our
responsibility is to read the other information identified
above and, in doing so, consider whether the other information is
materially inconsistent with
the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed on the other information
that we obtained prior to the date of
this auditor’s report, we conclude that there is a material
misstatement of this other information, we
are required to report that fact. We have nothing to report in this
regard.
When we read the annual report, if we conclude that there is a
material misstatement therein, we are required
to communicate the matter to the directors and will request that it
is corrected. If it is not corrected,
we will seek to have the matter appropriately brought to the
attention of users for whom our
report is prepared.
Responsibilities of the directors
for the Financial Report
The directors of the Company are responsible for the preparation of
the financial report that gives a true
and fair view in accordance with Australian Accounting Standards
and the Corporations Act 2001 and
for such internal control as the directors determine is necessary
to enable the preparation of the financial
report that gives a true and fair view and is free from material
misstatement, whether due to fraud
or error.
In preparing the financial report, the directors are responsible
for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to
going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations,
or has no realistic alternative but to do so.
Auditor’s responsibilities
for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the
financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will
always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if,
individually or in the aggregate, they could reasonably be expected
to influence the economic decisions
of users taken on the basis of this financial report.
A
further description of our responsibilities for the audit of the
financial report is located at the Auditing and Assurance Standards Board website
(http://www.auasb.gov.au/Home.aspx)
at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s
report.
Report
on the Remuneration Report
Opinion
on the Remuneration Report
We have audited the Remuneration Report included in pages 5 to 11
of the directors’ report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of Echo Resources Limited,
for the year ended 30 June 2018, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation
and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is
to express an opinion on the Remuneration Report, based on our
audit conducted in accordance with Australian
Auditing Standards.
BDO Audit (WA) Pty
Ltd
Wayne
Basford
Director
Perth,
21 September 2018
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