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JATENERGY LIMITED ANNUAL REPORT

ABN 31 122 826 242

FOR YEAR ENDED 30 JUNE 2014

JATENERGY LIMITED

ANNUAL REPORT FOR YEAR ENDED 30 JUNE 2014

CONTENTS

2

Directors’ Report 3

Auditor’s Independence Declaration 20

Corporate Governance 21

Financial Report 27

Directors’ Declaration 61

Independent Auditor’s Report to the Members of Jatenergy Limited 62

Shareholder Information 65

JATENERGY LIMITED


DIRECTORS’ REPORT

3

Your Directors present their report on the consolidated entity (referred to hereafter as “the Group”) consisting of

Jatenergy Limited (“Jatenergy” or the “Company”) and its controlled entities during the year ended 30 June 2014.

Directors

The following persons were Directors of Jatenergy Limited during the whole of the financial year and up to the date

of this report.

Xipeng Li, Non-Executive Director

Wilton Yao, Alternate Non-Executive Director for Mr Xipeng Li

Anthony Crimmins, Executive Chairman

Richard Pritchard, Non-Executive Director (resigned 26 November 2013)

Ian Gebbie – Non-Executive Director (appointed 5 December 2013)

Directors have been in office since the start of the year to the date of this report unless otherwise stated.

Principal activities

The principal activities of Jatenergy Limited are to develop conventional and renewable energy projects, with an

initial focus on exploration and production of coal from Indonesia and on producing crude oil from its Indonesian oil

seeds plantation.

Dividends paid or recommended

No dividends were paid or declared since the start of the period. No recommendation for payment of dividends has

been made (2013: $nil).

Company Investment Chart

Jatenergy is a both a renewable and conventional energy company operating in Indonesia and Australia. The

Company started out in the renewable sector commercialising second generation Biofuel crop called Jatropha in

Vietnam and Indonesia. The potential for this crop was uncertain and would reap return between 3-5 years after planting. It became increasing important for the Company to acquire conventional coal opportunities for short term

cash requirements and medium to long term exploratory but valuable coal tenements.

With the onslaught of oversupply and neutral demand for coal the price for this resource dropped significantly. The

value of coal and exploratory tenements became questionable. To move with the demand for technology for coal

conversion the Company has acquired two technologies for the upgrading of coal and the conversion of coal into

gas. In addition we have explored the opportunity of using recovery technology for mineral fines and waste stream

through a licence with TTG Resource Technologies.

JATENERGY LIMITED


DIRECTORS’ REPORT

4

Operations Report Jatenergy

Jong Kang (Wijaya Mulya)

The Jong Kang mining site was reactivated in November 2013.

Chapman Limited has a made an investment in return for 50% of

Jatenergy’s operating margin on the mine. Jatenergy has provided

capital to mobilise equipment onto site to bring the mine into

operation. The wet season in Kalimantan was particularly severe

leading to the mine area being flooded and the road to mine site

closed until the rain abated. Pumping of the mine site was required

to remove the 25,000 m3 (average 25 Olympic swimming pools) of

water up to 10 metres in depth. In April 2014 we managed to bring

bulldozers and earth moving equipment to site to prepare the roads

and remove the waste to unearth the coal located in our drill

program. We have commenced digging coal and stockpile on site

until a quantity of barge shipment is available.

Further drilling was carried out prior to re-mobilization which has identified further areas from which coal can be

economically extracted. Given the relatively small size of the resource a JORC compliant report has not been

produced as the cost would be prohibitive. Therefore no claims are made on the quantity, quality, or production

rates from the mine.

Operations:

20/01/14 - Jong Kang opened to commence draining of water

from mine pit after months of heavy weather,

clearing of over burden and further drilling for mine

excavation.

28/05/14 - Dry weather has allowed our operators to pump and

drain the existing mine pit to access previously

identified coal. Over the next four weeks excavators

will be smoothing road access and removing

overburden to excavate identified coal. Further

drilling of the site is occurring to map out future

opportunities in the area. 4/06/14 - Road being levelled to provide better and safer

access to the site. Work has begun to remove 1

metre of overburden to remove previously located

easy access coal, allowing us to provide immediate

product to barge.

June 2014 - Further excavation of overburden taken place and have now exposed the coal seam.

2/07/14 - Large area of coal seam has been exposed and overburden and stripping of the area is continuing.

Current Operations:

Final 2 metres of water has been pumped from the mine pit.

An excavator (ZX400) has been removing the remaining 3 metres of overburden

and relocating it to the pond.

Coal has been exposed and the excavator has commenced further digging to

widen the area of exposed coal. The ground must be stripped before further coal

is exposed. Area is size of a baseball field.

A Ripper D155 is now on site to cut through hard rock.

A small excavator is now sitting on the overburden in the pond to access coal

seam underneath.

The presidential elections were held on 9 July 2014 and this was a public holiday.

Ramadhan started at the end of June and had a disruptive effect on operations

but has been allowed for in the budget. Removing further Overburden

Wider Stripping of the Area

Exposing Coal Seam

JATENERGY LIMITED


DIRECTORS’ REPORT

5

The HBA dropped further in July but a selling price of ~$61 is still realistic.

There will be enough coal available to get a 5000 tonne barge out by the mid-late October.

PT Coal Soil Brik

This is a medium term company asset that has the potential to be a source of coal for proposed Power Stations in the

Katingan Regency. The Company has been seeking a private sale of PT Coal Soil Brik. A sale and purchase

agreement with PT Prakarsa Corporindo expired in January 2014 allowing Jatenergy to seek third party interest. The

Company continues to seek third party interest either through a direct sale or JV of the site.

In March 2014 Jatenergy entered into a Cooperation Agreement with Realm Resources who own a majority interest

in PT Katingan Ria which adjoins PT Coal Soil Brik in Central Kalimantan. The purpose of this is to maximize the

commercial synergies available in the exploitation of these resources particularly with regard to infrastructure and ESI

supply.

Proposed Power Station Development

Recent discussions have focussed on the potential to supply a 200Mw power station near the town of Kasongan in

Central Kalimantan. This is planned to be commissioned in 2016/7. The mine therefore has the potential to be

developed as a largely domestic supplier thereby largely eliminating the logistical costs associated with export.

Export of coal would still be considered if prices were to recover from their current three year low level.

Jatenergy and Realm continue to explore these opportunities for the Katingan coal asset site.

Proposed 2x100Mw

Power Station

Development

JATENERGY LIMITED


DIRECTORS’ REPORT

6

Atan BaraWith current low coal prices and the grade of coal from the Atan Bara mine site the board have decided to leave the potential mine in suspension and to downgrade the asset to nil value. Also loans provided to the mine

owner/operation have been written off as our Indonesian legal investigation has concluded that due to the financial

situation of the owner the returns of these funds would be difficult and problematic.

PT Jatoil Waterland

In June of 2010, Jatenergy formed a joint venture with another

established Jatropha oil producing company, Waterland Group, to

develop biofuel farms in Indonesia. They established a company in

Indonesia to pursue the venture, PT Jatoil Waterland (PTJW), which is

70% owned by Jatenergy.

Under agreement with the Department of Forestry in Indonesia PT

Jatoil Waterland acquired the rights to approximately 2,000 hectares

of Jatropha plantation in Central Java, all up to three years old that

also had an off�take agreement covering the total production from this plantation.

Production started in July 2010, under a profit share agreement, with

the sale of the first container load of 10 tonnes destined for the

aviation industry. This was followed in 2011 by an export of 200 tonnes of oil for use in Europe in the aviation industry

and for power generation and joint venture Company. PTJW have the rights for 25 years plus two five year

extensions to harvest biofuel crop within the area of the Department of Forestry Indonesia.

Over the past six months we have been informed by our operators PT Waterland International that production has

been suspended due to changing weather conditions generally over Indonesia. To maintain the profitability of the investment the Company has been seeking third party interest in JV the plantation. The investment would be used:

Jatropha Intercropping

JATENERGY LIMITED


DIRECTORS’ REPORT

7

1. To increase yield per hectare by growing Camelina alongside the currently existing Jatropha plants. 2. Pursuing greenfields acquisition to expand to the number of growing hectares.

The directors will be completing due diligence on current operations to determine the profitability of the current

Jatropha fields.

Financial result

The consolidated loss of the Group for the year after providing for income tax amounted to $3,040,654 (2013:

$2,213,417).

The 2014 loss is attributable to the following:

Employment benefits of $133,553 (2013: $237,763) Consultancy expenses of $340,095 (2013: $361,905)

Professional costs of $52,659 (2013: $170,044)

Impairment of assets of $2,351,975 (2013 $1,166,593)

Financial position

The consolidated statement of financial position at 30 June 2014 reflects cash at bank of $258,344 (2013:$708,772).

The net assets of the group have decreased from $4,908,841 at 30 June 2013 to $1,905,507 at 30 June 2014.

Significant changes in state of affairs

There have been no significant changes in the state of affairs of the Group during the financial year other than those

noted in the operations report.

PT Jatoil Waterland location

JATENERGY LIMITED


DIRECTORS’ REPORT

8

Matters subsequent to the end of the financial year On 2nd September Jat Energy Limited signed a converting loan agreement with Mr Zhou Xuan Feng. The converting

loan agreement provides $200,000 for Jat Energy. It can be converted into shares at the discretion of Jatenergy

directors and approval by Jatenergy shareholders at the AGM.

The value of conversion is 2 cents per share and attracts an interest rate of 5% per annum.

On 23 July 2014 Jat Energy Limited converted the loan of $100,000 made on 26 May 2014 at 2 cents per share.

On 28 July 2014 Jat Energy signed an agreement for the sale of PT Coal Soil Brik (CSB) and PT Barata Energy PT Graha

Kemang Sentosa.

No matters other than the above have arisen since 30 June 2014 that have significantly affected, or may significantly affect:

(i) the Company’s operations in future financial years; or

(ii) the results of those operations in future financial years; or

(iii) the Company’s state of affairs in future financial years.

Likely developments and expected results of operations

Additional comments on expected results of certain operations of the group are included in this annual report under

the review of operations and activities on pages 4-7.

Environmental regulations

The consolidated entity’s operations are not regulated by any significant environmental regulation under a law of

the Commonwealth or of a state or territory in Australia.

Loss per share

2014 2013

Cents Cents

Basic loss per share (3.0) (2.4)

Diluted loss per share (3.0) (2.4)

Information on directors

Anthony Crimmins EXECUTIVE CHAIRMAN - (APPOINTED 22 MAY 2012)

Anthony Crimmins has been actively involved in the business development of numerous start-up companies that

have been funded and listed on the Australian Securities Exchange. He was fundamental in identifying projects and

businesses that could be successfully listed, particularly in "breakthrough" businesses. He worked for 6 years as an

environmental engineer and business development manager in Asia, and has a level fluency in Mandarin and an

understanding of Asian business practices. He has also previously worked as a general manager, project manager

and in commercialisation of technology-based products and services.

Xipeng Li NON-EXECUTIVE DIRECTOR - APPOINTED 15 APRIL 2011)

Li Xipeng is an experienced executive and has served as a Director and Chief Executive Officer of Pinglin Expressway

Limited. He has also served as Chairman of Pinglin Expressway Limited since May 2003. Prior to that, Mr Li served as

Chairman of HSV, China since May 2001 and as Chairman of Henan Shengrun Real Estate Co Ltd, China, since May

2000. Mr Li graduated from Zhongnan University of Economics and Law and he earned his EMBA at Cheung Kong

Graduate School of Business.

JATENERGY LIMITED


DIRECTORS’ REPORT

9

Wilton Yao ALTERNATE NON-EXECUTIVE DIRECTOR FOR MR XIPENG LI – (APPOINTED 15 APRIL 2011)

Wilton Yao has been involved in business broking industry for more than 10 years and specialises in franchise

recruitment and development. He has worked with a number of franchise firms to develop franchise businesses for

both local and international markets. Mr Yao has also been involved in managing several retail and franchise

businesses for many years and has great experience and knowledge in management and marketing. Mr Yao has

strong connections with overseas investors, especially from mainland China and he has worked closely with

Australian Government organisations and local companies to promote successful investment projects for Chinese investors. He also provides consulting services to a number of ASX listed companies, focusing on project exploring

and seeking investment funds from overseas investors.

Ian GebbieNON-EXECUTIVE DIRECTOR–INDEPENDENT (APPOINTED 5 DECEMBER 2013)

Ian Gebbie is a director of Wentworth Global Capital Finance Pty Limited and has nearly 15 years of corporate advisory and accounting experience in Australia and the UK. Ian has an equity capital markets and mergers &

acquisitions background specialising in the provision of advisory services in relation to initial public offerings and

subsequent fundraising activities and acquisitions and divestments with a core focus on junior mining and exploration companies. He is also a Member of the Australian Institute of Chartered Accountants.

Information on company secretary

Graeme Hogan (BCom FCPA FCSA) COMPANY SECRETARY (PART-TIME) (APPOINTED 23 JULY 2012)

Graeme Hogan has worked in the resources industry for over 30 years. He has worked with companies in the

following commodities: iron ore, coal, industrial minerals and copper/gold. Graeme has over 20 years’ experience as

company secretary of both listed and unlisted companies. He is currently the Company Secretary of Bligh Mining

Limited (ASX Code BCH) and Chief Financial Officer of Atlantic Gold NL (ASX Code ATV).

Director and audit committee meetings

The number of meetings of the Company’s Board of Directors held during the year ended 30 June 2014 and the

numbers of meetings attended by each Director were:

meetingsof directors

A B

Anthony Crimmins 3 3

Richard Pritchard 0 0

Xipeng Li 1 3

Wilton Yao 3 3

Ian Gebbie 2 2

A Number of meetings attended

B Number of meetings held during the time the Director held office

JATENERGY LIMITED


DIRECTORS’ REPORT

10

Risk management The Company takes a proactive approach to risk management. Management, through the Chief Executive Officer,

is responsible for designing, implementing and reporting on the adequacy of the Company’s risk management and

internal control system. The risk management program is approved and monitored by the Board. Management

reports to the Board on the Company’s key risks and the extent to which it believes these risks are being managed.

This is performed on a six monthly basis or more frequently as required by the Board.

The Board is responsible for satisfying itself annually, or more frequently as required, that management has

developed and implemented a sound system of risk management and internal control.

The Company has developed a series of risks which the Company believes to be inherent in the business and industry

in which the Group operates. These include:

operating risk;

environmental risk;

branding and reputation risk;

legal, compliance and regulatory risk;

competitor and market risk;

intellectual property risk;

occupational health and safety risk; and

financing and adequacy of capital risk.

These risk areas are provided here to assist investors to understand better the nature of the risks faced by our Group

and the industry in which we operate. This is not necessarily an exhaustive list.

The Board received regular reports on progress in addressing and management of the key risks associated with the

Group’s business. The Board has the right to appoint external professional advisers to carryout regular investigations

into control mechanisms, and report their findings, including recommendations for improvement to controls,

processes and procedures to the Board.

A copy of the Company’s risk management policy is contained in Annexure 4 of the Company’s Corporate

Governance Statement, a copy of which is available on the Company’s website.

REMUNERATION REPORT

This report outlines the remuneration arrangements in place for Directors and key management personnel of the

Group for FY2014. The remuneration report is set out under the following main headings:

A. Principles used to determine the nature and amount of remuneration

B. Details of remuneration

C. Service agreements

D. Share-based compensation

E. Other Information

These disclosures have been audited, as required by section 308(3c) of the Corporations Act 2001.

Role of the remuneration committee

Currently the role of the Remuneration Committee is undertaken by the Board given the number of directors and the

nature of the Company. It is primarily responsible for making recommendations to the Board on:

non-executive director fees

executive remuneration (directors and other executives), and

the over-arching executive remuneration framework and incentive plan policies.

JATENERGY LIMITED


DIRECTORS’ REPORT

11

Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the

long-term interests of the Company. In doing this, the remuneration committee seeks advice from independent remuneration consultants.

The Corporate Governance Statement provides further information on the role of this committee.

A. Principles used to determine the nature and amount of remuneration

The performance of the Group depends on the quality of its Directors and executives.

To prosper, the Group must attract, motivate and retain highly skilled Directors and executives. To this end, the

Group embodies the following principles in its remuneration framework:

provide competitive rewards to attract high calibre executives;

link executive rewards to shareholder value;

ensure that a significant portion of executive remuneration is ‘at risk’, and therefore dependent on meeting

pre-determined performance benchmarks; and

establish appropriate performance hurdles in relation to variable executive remuneration.

The Board of Directors assesses the appropriateness of the nature and amount of remuneration of Directors and

senior managers on a periodic basis by reference to relevant employment market conditions with the overall

objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.

Remuneration structure

In accordance with the corporate governance principles and recommendation, the structure of Non-Executive

Director and senior manager remuneration is separate and distinct.

Non-executive director remuneration

Objective

The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and

retain Directors of the highest calibre, while incurring costs that are acceptable to shareholders.

Structure

Each Non-Executive Director receives a fixed fee for being a Director of the Group.

The constitution and the ASX Listing Rules specify that the maximum aggregate remuneration of Non-Executive

Directors shall be determined from time to time by a general meeting of shareholders. At the general meeting of

shareholders held on 27 November 2009, this maximum amount was set at $350,000 per annum. In 2014, the Group

paid Non-Executive Directors a total of $78,500 (2013: $133,636) including superannuation.

The amount of aggregate remuneration sought to be approved by shareholders and the fixed fees paid to Directors

are reviewed annually. The Board considers fees paid to Non-Executive Directors of comparable companies when

undertaking the annual review process.

Non-Executive Directors were also granted options on ordinary shares of Jatenergy Limited on the successful ASX

listing of the Company (formerly Jatoil Limited) in January 2007. The details of these options are set out in Sections B

and D below and Key Management Personnel Disclosure.

Executive remuneration

Objective

The Group aims to reward executives with a level and mix of remuneration commensurate with their position and

responsibilities within the Group and so as to:

JATENERGY LIMITED


DIRECTORS’ REPORT

12

reward executives for group and individual performance against targets set by reference to appropriate

benchmarks;

align the interests of executives with those of shareholders;

link reward with the strategic goals and performance of the Group; and

ensure total remuneration is competitive by market standards.

There are currently no full time executives of the Company and the remainder of this policy reflects the current

policy, however, when the financial situation of the Company changes in the future and full time executives are

appointed then this policy will be reviewed and updated to incorporate appropriate market conditions prevailing at

that time.

Structure

A policy of the Board is to establish employment or consulting contracts with the chairman, chief executive officer and other senior executives. At the time of this report there are consulting agreements, including Chris Flanagan the

operations manager for Indonesia.

Remuneration consists of fixed remuneration under an employment or consultancy agreement and long term equity-

based incentives that are subject to satisfaction of performance conditions. The equity-based incentives are

intended to retain key executives and reward performance against agreed performance objectives.

Fixed remuneration

The level of fixed remuneration is set so as to provide a base level of remuneration that is both appropriate to the

position and competitive in the market.

Fixed remuneration is reviewed annually by the Board and the process consists of a review of group-wide and

individual performance, relevant comparative remuneration in the market, and internal and (where appropriate)

external advice on policies and practices.

Senior managers are given the opportunity to receive their fixed (primary) remuneration in a variety of forms

including cash and expense payment plans, such that the manner of payment chosen is optimal for the recipient

without creating additional cost for the Group.

Remuneration Policy and Performance

The Company is in the early stages of its business plan following relisting on the Australian Securities Exchange (ASX)

on 12 April 2011. Accordingly the Company is currently reviewing the remuneration policies applicable to the CEO,

general manager and other senior personnel of the Company in relation to KPI’s and extent of remuneration which is

‘at risk’.

The review will assist the Company to better structure remuneration policies in accordance with current trends and

practices in corporate remuneration.

Voting and comments made at the Company’s last Annual General Meeting

The Company received a 100% of ‘yes’ votes on its Remuneration Report for the financial year ending 30 June 2013.

The Company did not receive any feedback on the Report during this meeting.

Relationship between remuneration policy and company performance

2014 2013 2012 2011

$ $ $ $

Revenue 572,421 132,192 464,505 97,392

Net loss (3,040,654) (2,213,427) (4,664,932) 13,166,075

Share price 0.018 0.022 0.037 0.077

JATENERGY LIMITED


DIRECTORS’ REPORT

13

The Company is currently reviewing its remuneration policies as indicated above.

B. Details of remuneration (audited)

Details of the remuneration of the Directors and other key management personnel (as defined in AASB 124 Related

Party Disclosures) of Jatenergy Limited are set out in the following tables. Key management personnel for the year

ended 30 June 2014 include the Executive Chairman and Operations Manager Indonesia. Chris Flanagan was a

contract which expired on 30 June 2014. There are currently no contracts in place for the Group.

Short Term Benefits

Post-Employment Benefits Share-Based Payments

Name Cash salary

and fees Cash bonus

Non-monetary

benefits Super-

annuation Retirement

benefits Long service

leave Options Total Perform-ance

related

2014 $ $ $ $ $ $ $ $ %

Non-executive directors

Xipeng Li - - - - - - - - -

Wilton Yao 1 58,500 - - - - - 58,500 -

Richard Pritchard2 18,000 - - - - - - 18,000 -

Ian Gebbie3 2,000 - - - - - - 2,000 -

Total non-executive directors 78,500 78,500

Executives

Anthony Crimmins 144,000 - - - - - - 144,000 -

Chris Flanagan 113,794 - - - - - - 113,794 -

Total executive directors & key management 257,794 - - - - - - 257,794 -

Total 336,294 - - - - - - 336,294 -

2013 $ $ $ $ $ $ $ $ %


Xipeng Li - - - - - - - - -

Wilton Yao 1 100,000 - - - - - - 100,000 -

Richard Pritchard2 33,636 - - - - - - 33,636 -

Total non-executive directors 133,636 - - - - - 133,636 -

Executives

Anthony Crimmins 134,000 - - - - - - 134,000 -

Chris Flanagan 175,415 - - - - - - 175,415 -

Total executive directors & key management 319,415 - - - - - - 319,415 -

Total 453,051 - - - - - - 453,051 -

1. Alternative for Xipeng Li

2. Richard Pritchard resigned 26 November 2013 3. Ian Gebbie appointed 5 December 2013

JATENERGY LIMITED


DIRECTORS’ REPORT

14

C. Service Agreements The chief executive officer and general manager are employed under a consulting and employment services

contract, respectively. The major provisions of the agreements relating to remuneration are set out below:

Name Terms of agreement Notice period

Tony Crimmins The contract is for $13,200

per month and expires 31

December 2014.

4 month notice period.

Chris Flanagan At 30 June 2014 Chris

Flanagan is paid $US2,500

per month. Renewed on a monthly basis.

On a monthly basis

D. Share-based compensation (audited)

Description of options/rights issued and remuneration

Details of the options granted as remuneration in prior years to key management personnel are shown below

Director and executive options

The following share based payments existed at 30 June 2014:

- 375,000 Director options issued to Phil Hodgson at a fair value of $15,000 approved at a General meeting of

shareholders on 17 November 2009. These options were granted for no consideration with an exercise price

of $0.20 exercisable any time prior to 31 December 2013. Each option entitles the holder to one share in the

Company. Options granted carry no dividend or voting rights. These shares expired on 31 December 2013.

Total share based payment expense incurred during the year was $nil (2013: $nil)

Consolidated Entity

2014 2013

No Of Options Weighted Average Exercise

Price$

No Of Options

WeightedAverage

Exercise Price $

Outstanding at the Beginning of the

year 375,000 0.20 500,000 0.22

Granted - - - -

Forfeited - - - -

Expired (375,000) 0.20 (125,000) 0.276

Outstanding at year end - - 375,000 0.20

Exercisable at year end - - 375,000 0.20

No options were granted as remuneration in the financial year ended 30 June 2014, or the year ended 30 June 2013.

Total share based expense incurred during the year was $nil (2013:nil)

E. Other Information

There were no loans to Directors or executives during or since the end of the year. Nil prior year

JATENERGY LIMITED


DIRECTORS’ REPORT

15

Share holdings of key management personnel and Directors

Balance at the start of the year

Received during the year on the exercise

of options

Other changes during the year

Balance at the end of the year

Directors and key management personnel of Jatenergy Limited ordinary shares No No No No

2014

Xipeng Li** 13,411,222 - - 13,411,222

Richard Pritchard 250,000 - (250,000) -

Anthony Crimmins 5,039,556 - 2,217,900 7,257,451

Wilton Yao - - - -

Chris Flanagan 575,000 - - 575,000

2013

Xipeng Li** 13,411,222 - - 13,411,222

Richard Pritchard 250,000 - - 250,000

Anthony Crimmins 5,039,556 - - 5,039,556

Wilton Yao - - -

Chris Flanagan - - 575,000 575,000

**Shares held indirectly

Options held by key management personnel

Balance at the start of the

year

Grantedduring the

year as compensation

Exercisedduring the

year

Other changes during the

year

Balance at the end of the

year

Vested and exercisable at the end of the

year

Name No. No. No. No. No. No.

2014

Directors of Jatenergy Limited

Anthony Crimmins 1,771,520 - - (1,711,520)1 - -

Xipeng Li 7,205,611 - - (7,205,611)1 - -

Wilton Yao - - - - - -

Richard Pritchard - - - - - -

Other key management personnel

Chris Flanagan - - - - - -

1. Options expired 31 March 2014. These were not issued as part of remuneration but as part of the individuals

shareholdings.

JATENERGY LIMITED


DIRECTORS’ REPORT

16

Balance at the start of the

year

Grantedduring the

year as compensation

Exercisedduring the

year

Other changes during the

year

Balance at the end of the

year

Vested and exercisable at the end of the

year

Name No. No. No. No. No. No.

2013

Directors of Jatenergy Limited

Anthony Crimmins 1,771,520 - - - 1,711,520 1,711,520

Xipeng Li 7,205,611 - - - 7,205,611 7,205,611

Wilton Yao - - - - - -

Richard Pritchard - - - - - -

Other key management personnel

Chris Flanagan - - - - - -

Options on issue

At the date of this report, there were no options on issue.

Option holders do not have any rights to participate in any issues of shares or other interests in the Company or any

other entity.

There have been no unissued shares or interests under option of any controlled entity within the Group during or since

reporting date.

During the year ended 30 June 2014, no ordinary shares of Jatenergy Limited were issued on the exercise of options

granted. No further shares have been issued since year end. No amounts are unpaid on any of the shares.

No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue

of any other body corporate.

END OF REMUNERATION REPORT

Insurance of officers and auditors

During the financial year, the Group paid premiums to insure the Directors and officers of the Group.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be

brought against the officers in their capacity of officers of the Group and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from

conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of

information to gain advantage for them or someone else or to cause detriment to the Company. It is not possible to

apportion the premium between amounts relating to the insurance against legal costs and those relating to other

liabilities. No insurance or indemnification has been given to the auditors.

JATENERGY LIMITED


DIRECTORS’ REPORT

17

Indemnification of officers and auditors The Group has entered into Deeds of Indemnity, Insurance and Access with each of the Directors and the Company

secretary. Each deed provides officers with the following:

a right to access certain Board papers of the Group during the period of their tenure and for a period of seven

years after that tenure ends;

subject to the Corporations Act an indemnity in respect of liability to persons other than the Group and its

related bodies corporate that they may incur while acting in their capacity as an officer of the Group or a

related body corporate, except where that liability involves a lack of good faith and for defending certain

legal proceedings; and

the requirement that the Group maintain appropriate Directors and officers insurance for the officer.

No liability has arisen under these indemnities as at the date of this report.

The Group has not, during or since the end of the financial year, except to the extent permitted by law, indemnified

or agreed to indemnify any current or former officer or auditor of the Group against a liability incurred as such by an

officer or auditor.

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations act 2001 for leave to bring proceedings on

behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking

responsibility on behalf of the Group for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section

237 of the Corporations Act 2001.

Environmental Issues

The group is not subject to any environmental laws in the Commonwealth or States or Territories of Australia.

Non-audit services

The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the

auditor’s expertise and experience with the Group and/or the Company are important.

Details of the amounts paid or payable to the auditor (Grant Thornton Audit Pty Limited) for audit and non-audit

services provided during the year are set out below.

The Board has considered the position and in accordance with the advice received from the audit committee is

satisfied that the provision of the non-audit service is compatible with the general standard of independence for

auditors imposed by the Corporations Act 2001.

The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not

compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

All non-audit services have been reviewed by the audit committee to ensure they do not impact the

impartiality and objectivity of the auditor.

None of the services undermine the general principles relating to auditor independence as set out in APES 110

Code of ethics for Professional Accountants.

JATENERGY LIMITED


DIRECTORS’ REPORT

18

During the year the following fees were paid or payable for services provided by the auditor of the group, its related

practices and non-related audit firms:

Consolidated Consolidated

2014 2013

$ $

(a) Assurance services

Audit services - Grant Thornton Audit Pty Limited

Audit of financial reports and other audit work under the Corporations Act

2001

43,682 37,019

Total remuneration for audit services 43,682 37,019

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the

context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm

is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and

are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its

Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

20

Level 17, 383 Kent Street

Sydney NSW 2000

Correspondence to:

Locked Bag Q800

QVB Post Office

Sydney NSW 1230

T +61 2 8297 2400

F +61 2 9299 4445

E [email protected]

W www.grantthornton.com.au

Auditor’s Independence Declaration

To the Directors of Jatenergy Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead

auditor for the audit of Jatenergy Limited for the year ended 30 June 2014, I declare that, to

the best of my knowledge and belief, there have been:

a no contraventions of the auditor independence requirements of the Corporations Act

2001 in relation to the audit; and

b no contraventions of any applicable code of professional conduct in relation to the

audit.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

A G Rigele

Partner - Audit & Assurance

Sydney, 30 September 2014

JATENERGY LIMITED


CORPORATE GOVERNANCE

21

The principal features of the Company’s Corporate Governance policies and practices are summarized below.

The Company has adopted a comprehensive system of control and accountability as the basis for the administration

of corporate governance.

The Board is responsible to Shareholders for the overall management of the Company’s business and affairs. The

Directors’ overriding objective is to increase Shareholder value within an appropriate framework which protects the

rights and interests of Shareholders and ensures the Company is properly managed.

The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true

spirit of corporate governance commensurate with the Company's needs. To the extent they are applicable, the

Company has adopted the Corporate Governance Principles (2nd edition) (“Principles”) as published by ASX

Corporate Governance Council (ASXCGC).

The Company’s corporate governance principles and policies are structured with reference to the ASXCGC’s

Corporate Governance Principles (2nd edition), which are as follows:

Recommendation 1 Lay solid foundations for management and oversight;

Recommendation 2 Structure the Board to add value;

Recommendation 3 Promote ethical and responsible decision making;

Recommendation 4 Safeguard integrity in financial reporting;

Recommendation 5 Make timely and balanced disclosures;

Recommendation 6 Respect the rights of shareholders;

Recommendation 7 Recognise and manage risk;

Recommendation 8 Remunerate fairly and responsibly;

In accordance with recommendations of the ASX, information published on the Company’s web site includes

charters of Board and its subcommittees, codes of conduct and other policies and procedures relating to the Board

and its responsibilities. A copy of the Company’s Corporate Governance Statement can be found on the

Company’s website www.jatenergy.com under the Corporate Governance Section.

The Board will consider on an ongoing basis its Corporate Governance procedures and whether they are sufficient

as the Company’s activities develop in size, nature and scope. Jatenergy Limited’s corporate governance practices

were in place for the year ending 30th June 2014 and other than outlined below the corporate governance practices

of Jatenergy Limited were compliant with the Council’s recommendations during the year. In May 2012, there was a

restructure of the Company with 2 independent directors and the CEO resigning and two new directors appointed. The company has no full-time staff in recognition of the current economic climate and the current strategy. This

situation may change in the future. As a result all management of the Company is under the direction of Mr Crimmins

and all Board subcommittees functions have been performed by the Board.

Board Structure

The directors in office at the date of this statement and their respective terms in office are as follows:

Name Position Term in Office Mr Li

Wilton Yao (alternate for Mr Li)

Non-Executive Director

Alternate Non-Executive Director for Mr Li

3.5 Years

3.5 Years Anthony Crimmins Executive Chairman 3.5 Years

Ian Gebbie Independent Non-Executive Director 0.5 Years

Mr Li has an indirect shareholding through Sheng Run Holdings Group (Australia) Pty Ltd which is the Company’s

largest shareholder with an ownership interest of 12.36% at 30 June 2014. Mr Crimmins is currently undertaking the

role of the CEO in the absence of a full time CEO and is therefore not considered independent.

Ian Gebbie is considered independent by virtue of the fact that each individual is not a member of management, is

not a substantial shareholder of the Company and is free of any business or other relationship that could materially

interfere with or could reasonably be perceived to materially interfere with – the independent exercise of their

judgment.

JATENERGY LIMITED



22

When assessing the independence of directors, the ASX recommendations refer to materiality thresholds throughout

the independence criteria, specifically in reference to evaluating what may constitute a material relationship.

The Board has adopted the following quantitative thresholds to be used as a guide when considering amounts in

context of determining the materiality of certain relationships:

(i) an amount which is equal to or greater than 10% of the appropriate base amount may be presumed to

be material unless there is evidence or convincing argument to the contrary;

(ii) an amount which is equal to or less than 5% of the appropriate base amount may be presumed not to be

material, unless there is evidence, or convincing argument to the contrary.

The Board consist of one independent director and three directors who are not independent, including the

Chairman. While this is not in accord with the ASXCGC principles, the directors believe it is currently appropriate given the current manner of the operations of the Company.

As part of discharging its obligations as directors of the Company, the Directors will, from time to time need to seek

independent professional advice at the expense of the Company. Accordingly, the Board has agreed that where

issues or matters arise in relation to the running of the Company, that in the opinion of the directors require

independent professional advice to assist in the decision making surrounding the resolution of these issues, the Board

may engage such professional advice providing it is on standard commercial terms for advice of its nature.

Please refer to pages 8-9 of the 2014 Annual Financial Report for the relevant skills and experience of each of the

directors.

Board Sub Committees

The Board has decided to not have sub Committees given the size and financial situation of the Company and all

functions of the former Board sub committees are performed by the Board effective from May 2012 Board

restructure.

The Board can confirm that it has received written assurance from the Executive Chairman who is acting as the Chief

Executive Officer (CEO) and the Chief Financial Officer (CFO) that to the best of his knowledge and belief, the

declaration provided by him in accordance with section 295A of the Corporations Act is founded on a sound system

of risk management and internal control and that the system is operating effectively and in relation to financial

reporting risks. The Board notes that due to its nature, internal control assurance from the CEO and CFO can only be reasonable rather than absolute. This is due to such factors as the need for judgement, the use of testing on a

sample basis, the inherent limitations in internal control and because much of the evidence available is persuasive rather than conclusive and therefore is not and cannot be designed to detect all weaknesses in control procedures.

Code of Conduct and Diversity

The Company has established a Code of Conduct and an Employee/Executive Share Trading Policy which is

contained in Annexure 2 and 3 respectively of the Company’s Corporate Governance Statement, a copy of which is

available on the Company’s website.

Jatenergy has not established a Diversity Policy due to the current situation in which it operates, however, the

Directors will review this situation regularly and when a full time CEO is appointed it is likely that a Diversity Policy will

be developed in line with ASXCGC principles.

Timely Disclosure

The Company’s Corporate Governance Statement contains the Company’s policy to ensure compliance with ASX

Listing Rules continuous disclosure obligations and the Company’s policy to ensure timely and effective shareholder

communication, including the encouragement for shareholders to participate at the Company’s Annual General

Meeting. A copy of the Company’s Corporate Governance Statement is available on the Company’s website.

JATENERGY LIMITED



23

Board and Senior Executive Performance Evaluation ASXCGC recommendation 2.5 requires the disclosure of the process for performance evaluation of the Board, its

committees and individual directors, and key executives. Currently the Company does not have a CEO and has no

full time staff. All consultants and contractors to the company had their contracts reviewed including agreed hours

to be worked since 30 June 2014.

OTHER INFORMATION

The Company’s corporate governance practices and policies are publicly available at the Company’s registered

office

Corporate Governance Policy Comment

Principle 1

Lay solid foundation for management and oversight Adopted

1.1 Formalise and disclose the functions reserved to the

Board and those delegated to management.

The Company’s Corporate Governance Polices

includes a Board Charter, which discloses the

specific responsibilities of the Board. However the

functions of management of the Company are

currently undertaken by the Board.

1.2 Disclose the process for evaluating the performance of

senior executives.

The Board will monitor the performance of senior

management including measuring actual

performance against planned performance.

1.3 Provide the information indicated in 'Guide to reporting

on Principle 1’.

The Company will provide details of any departures

from best practice recommendation Principle 1 in its

Annual Report.

Principle 2

Structure the Board to add value Adopted except for Recommendations 2.1,2.2, 2.3

and 2.4

2.1 A majority of the Board should be independent. The Company is not in compliance with this

recommendation as two of the Directors including

the Chairman are defined as not being

independent.

2.2 The chairperson should be an independent director. Given the Company does not have any CEO, the

current Chairman is undertaking the role of CEO

until a full time CEO is appointed and therefore, the

Company is not in compliance with this.

2.3 The roles of chairperson and chief executive officer should not be exercised by the same individual.

The Company is not in compliance with this recommendation as all functions of management

are undertaken by the Board due to the size of the

Company.

2.4 The Board should establish a nomination committee.

No formal nomination committee or procedures have been adopted as yet given the size of the

Company and the Board. The Board, as a whole,

will serve as a nomination committee.

Where necessary, the nomination committee seeks

advice of external advisers in connection with the

suitability of applicants for Board membership.

2.5 Disclose the process for evaluating the performance of The Board will conduct an annual performance

JATENERGY LIMITED



24


the Board, its committees and the individual directors. review of itself that compares the performance of

the Board with the requirements of the Board

Charter, critically reviews the mix of the Board and suggests and amendments to the Board Charter as

are deemed necessary or appropriate.

2.6 Provide the information indicated in 'Guide to reporting

on Principle 2’.

The Company will provide details of each director,

such as their skills, experience and expertise relevant

to their position, together with an explanation of

any departures from best practice

recommendations 2.1, 2.2, 2.3, 2.4 and 2.5 in its

annual reports.

Principle 3

Actively promote ethical and responsible decision-making Adopted except for recommendations 3.2 and 3.3.

3.1 Establish a code of conduct and disclose the code or a

summary of the code as to:

3.1.1 the practices necessary to maintain confidence in the

Company's integrity

3.1.2 the practices necessary to take into account their legal

obligations and reasonable expectations of their

stakeholders

3.1.3 the responsibility and accountability of individuals for

reporting or investigating reports of unethical practices.

The Company’s Corporate Governance Policies

include a Directors and Executive officers’ Code of

Conduct Policy, which provides a framework for

decisions and actions in relation to ethical conduct

in employment. Currently all those functions are

performed by the Board.

3.2 Establish a policy concerning diversity and disclose the

policy or a summary of that policy. The policy should

include requirements for the Board to establish

measurable objectives for achieving gender diversity for

the Board to assess annually both the objectives and

progress in achieving them.

Given the size of the Company & the fact it does

not have any full time employees at this current

time, the directors do not believe it appropriate to

establish a policy but this will be reviewed on a

regular basis by the Directors.

3.3 Disclose in each Annual Report the measurable

objectives for achieving gender diversity set by the

Board in accordance with the diversity policy and

progress towards achieving them.

As the Company does not have a diversity policy

presently, there are no measurable objectives for

achieving gender diversity.

3.4 Disclose in the annual report the proportion of women

employees in the whole organisation, women in senior

executive positions and women on the Board.

There are no women on the Board of the Company.

As the Company has no employees, there are no

women employed in the organisation or in senior

executive positions.

3.5 Provide the information indicated in 'Guide to Reporting

on Principle 3'.



Annual Report.

Principle 4

Safeguard integrity in financial reporting Adopted except for Recommendation 4.1

4.1 The Board should establish an audit committee. The Board considers that it is not of sufficient size at

this stage to require a separate audit committee.

JATENERGY LIMITED



25


Until the audit committee has been established, its

functions, roles and responsibilities will be

undertaken by the Board.

4.2 Structure the audit committee so that it consists of:

Only non-executive directors

A majority of independent directors

An independent chairperson who is not the

chairperson of the Board

At least three members.

The composition, roles and responsibilities of the

audit committee when it is established will be set

out in the Corporate Governance Plan.

4.3 The audit committee should have a formal operating

charter.

The Audit and Risk Committee will adopt a formal

Charter when established.

4.4 Provide the information indicated in the 'Guide to

reporting on Principle 4'.



Annual Report.

Principle 5

Promote timely and balanced disclosure Adopted

5.1 Establish written policies and procedures designed to

ensure compliance with ASX Listing Rule disclosure

requirements and to ensure accountability at a senior

management level for that compliance.

The Company has a Continuous Disclosure program

in place which is designed to ensure compliance

with the ASX Listing Rules requirements on disclosure

and to ensure accountability at a board level for

compliance and factual presentation of the

Company’s financial position.





Annual Report.

Principle 6

Respect the rights of shareholders Adopted

6.1 Design and disclose a communications policy to

promote effective communication with shareholders and

encourage effective participation at general meetings

and disclose the policy or a summary of the policy


includes a Shareholder Communications Policy

which aims to ensure that the shareholders are

informed of all material developments affecting the

Company’s state of affairs.





Annual Report.

Principle 7

Recognise and manage risk Adopted

7.1 The Board or appropriate Board committee should

establish policies on risk oversight and management.


includes a Risk Management Policy which aims to

ensure that all material business risks are identified

and mitigated.

JATENERGY LIMITED



26


The Board determines and identifies the Company’s

“risk profile” and is responsible for overseeing and

approving risk management strategies and policies, internal compliance and internal controls.

7.2 The Board should require management to design and

implement the risk management and internal control

system to manage the Company’s material business risks

and report to it on whether those risks are being

managed effectively. The Board should disclose that

management has reported to it as to the effectiveness of

the Company’s management of its material business

risks.

The Board has designed and implemented

continuous risk management and internal control

systems. Reports as requested are provided at

relevant times.

7.3 The Board should disclose whether it has received

assurance from the chief executive officer (or

equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with

section 295A of the Corporations Act is founded on a

sound risk management and internal control and that

the system is operating effectively in all material respects

in relation to the financial reporting risks.

The Board seeks, at the appropriate time, the

relevant assurances from the individuals appointed

to perform the roles of Chief Executive Officer and the Chief Financial Officer. Currently the assurances

are provided by the Chairman who performs the

functions of the Chief Executive Officer in the

absence of an appointed Chief Executive Officer

and an external consultant who prepares the

financial statements for the Company.





Annual Report.

Principle 8

Remunerate fairly and responsibly Adopted except for Recommendations 8.1and 8.2

8.1 The Board should establish a remuneration committee The Company’s remuneration committee comprises

the Board acting without the affected director

participating in the decision making process

8.2 The Remuneration Committee should be structured so that

it

Consists of a majority of independent directors;

Is chaired by an independent chair;

Has at least 3 members.

As noted in 8.1 the Company’s remuneration

committee comprises the Board acting without the

affected director participating in the decision

making process. The Board consist of 3 directors. It is

intended that when the company establishes a

Remuneration Committee it will comply with these

recommendations.

8.3 Clearly distinguish the structure of non-executive directors'

remuneration from that of executives

The Board will distinguish the structure of non

executive director’s remuneration from that of

executive directors and senior executives.

Relevantly, the Company’s Constitution provides

that the remuneration of non-executive Directors

will be not be more than the aggregate fixed sum

determined by a general meeting.

The Board is responsible for determining the

remuneration of the Managing Director and senior

executives (without the participation of the

affected director).

JATENERGY LIMITED


FINANCIAL REPORT

27

CONTENTS

Financial Report 28

Consolidated Statement of Profit or Loss and Other Comprehensive Income 29

Consolidated Statement of Financial Position 30

Consolidated Statement of Changes in Equity 31

Consolidated Statement of Cash Flows 32

Notes to the Financial Statements 33

Directors’ Declaration 61

Independent Auditor’s Report to the Members of Jatenergy Limited 62

Shareholder Information 65

JATENERGY LIMITED


FINANCIAL REPORT

28

This financial report covers the consolidated entity consisting of Jatenergy Limited and its subsidiaries.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern

the financial and operating policies, generally accompany a shareholding of more than one-half of the voting rights.

The existence and effect of potential voting rights that are currently exercisable or convertible are considered when

assessing whether the Group controls another entity.

The financial report is presented in Australian currency.

Jatenergy Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and

principal place of business is:

Level 6, Suite 8

55 Miller Street Pyrmont NSW 2009

The financial report was authorised for issue by the Directors on 30 September 2014. The Company has the power to

amend and reissue the financial report.

Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press

releases, financial reports and other information are available on our website: www.jatenergy.com.

JATENERGY LIMITED


CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2014

29

Consolidated Entity

2014 2013

Note $

Revenue 5 154,802 132,192

Other Income 5 417,619 -

Consultancy expenses (340,095) (361,905)

Insurance expense (45,773) (52,016)

Depreciation and amortisation expense 6 (12,334) (11,689)

Professional fees (52,659) (170,044)

Director’s fees (222,500) (267,636)

Employee benefits expense (133,553) (237,763)

Travel expenses (16,748) (90,312)

Occupancy expenses (121,088) (145,105)

Finance costs 6 (5,415) (13,770)

Foreign exchange gains (losses) (97,243) 283,788

Other expenses (125,026) (93,374)

Coal production costs (88,666) (19,190)

Impairment of assets 6 (2,351,975) (1,166,593)

Loss before income tax (3,040,654) (2,213,417)

Income tax expense 7 - -

Loss for the year (3,040,654) (2,213,417)

Other Comprehensive Income

Items that may be reclassified subsequently to profit or loss:

Exchange differences on translating foreign operations (62,680) (176,488)

Total comprehensive loss for the year (3,103,334) (2,389,905)

Loss attributable to:

- Members of parent entity (3,032,029) (2,170,661)

- Non-controlling interest (8,625) (42,756)

(3,040,654) (2,213,417)

Total comprehensive loss attributable to:

- Members of parent entity (3,094,709) (2,347,149)

- Non-controlling interest (8,625) (42,756)

(3,103,334) (2,389,905)

Loss per share for loss attributable to the ordinary equity holders of the company: Cents Cents

Basic loss per share 27 (3.0) (2.4)

Diluted loss per share 27 (3.0) (2.4)

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

JATENERGY LIMITED


CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2014

30

Consolidated Entity

2014 2013

Note $ $

Assets

Current assets

Cash and cash equivalents 8 258,344 708,772

Trade and other receivables 9 71,225 952,733

Assets held for sale 10 1,654,753 1,478,235

Total current assets 1,984,322 3,139,740

Non-current assets

Property, plant and equipment 11 7,016 22,162

Intangibles 12 265,743 1,871,386

Total non-current assets 272,759 1,893,548

Total assets 2,257,081 5,033,288

Liabilities

Current liabilities

Trade and other payables 13 251,574 124,447

Borrowing 15 100,000 -

Short term provisions 14 - -

Total current liabilities 351,574 124,447

Total liabilities 351,574 124,447

Net assets 1,905,507 4,908,841

Equity

Contributed equity 16 26,526,160 26,426,160

Non-controlling interest 954,328 962,953

Reserves 17(a) (252,270) 425,888

Accumulated losses 17(b) (25,322,711) (22,906,160)

Total equity 1,905,507 4,908,841

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

JATENERGY LIMITED


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2014

31

Contributed Equity

Non-Controlling

Interest

Reserves Accumulated Losses

Total

$ $ $ $ $

Balance at 1 July 2012 25,655,160 5,709 602,376 (20,735,499) 5,527,746

Loss for the year - (42,756) - (2,170,661) (2,213,417)

Foreign Currency Translation - - (176,488) - (176,488)

Total comprehensive income - (42,756) (176,488) (2,170,661) (2,389,905)

Issue of capital 771,000 1,000,000 - - 1,771,000

Transaction with owners 771,000 1,000,000 - - 1,771,000

Balance at 30 June 2013 26,426,160 962,953 425,888 (22,906,160) 4,908,841

Balance at 1 July 2013 26,426,160 962,953 425,888 (22,906,160) 4,908,841

Loss for the year - (8,625) - (3,032,029) (3,040,654)

Foreign Currency translation - - (62,680) - (64,881)

Total comprehensive income - (8,625) (62,680) (3,032,029) (3,103,334)

Issue of Capital 125,000 - - - 125,000

Transaction Cost (25,000) - - - (25,000)

Transaction with owners 100,000 - - - 100,000

Reserves released to retained

earnings

- - (615,478) 615,478 -

Balance at 30 June 2014 26,526,160 954,328 (252,270) (25,322,711) 1,905,507

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

JATENERGY LIMITED


STATEMENT OF CASH FLOWS For the year ended 30 June 2014

32

Consolidated Entity

2014 2013

Note $ $

Cash flows from operating activities

Receipts from customers 88,687 82,439

Payments to suppliers and employees (1,113,769) (1,340,132)

Interest received 15,758 22,480

Interest paid - (1,016)

Net cash outflow from operating activities 25 (1,009,324) (1,236,229)

Cash flows from investing activities

Sale of Assets 406,529 -

Deposits - (433,520)

Net cash inflow/(outflow) from investing activities 406,529 (433,520)

Cash flows from financing activities

Proceeds from convertible note 100,000 -

Proceeds from issues of shares 77,905 756,001

Transaction costs (25,000) -

Proceeds from issue of shares from non-controlling interest - 1,000,000

Net cash inflow from financing activities 152,905 1,756,001

Net (decrease)/increase in cash and cash equivalents (449,890) 86,252

Cash and cash equivalents at the beginning of the financial year 708,772 618,901

Effect of exchange on cash holdings in foreign currencies (538) 3,619

Cash and cash equivalents at end of year 8(a) 258,344 708,772

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

JATENERGY LIMITED


NOTES TO THE FINANCIAL STATEMENTS

33

1 Summary of significant accounting policies

Nature of operations

Jatenergy and subsidiaries’ (the Group) principal activities include to develop conventional and renewable energy

projects, with an initial focus on exploration and production of coal from Indonesia and on producing crude oil from

its Indonesian Oil Seeds plantation.

General information and statement of compliance

The consolidated general purpose financial statements of the Group have been prepared in accordance with the

requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative

pronouncements of the Australian Accounting Standards Board. Compliance with Australian Accounting Standards

results in full compliance with the International Financial Reporting Standards (IFRS) as issued by the International

Accounting Standards Board (IASB). Jatenergy Ltd is a for-profit entity for the purpose of preparing the financial

statements.

Jatenergy Ltd is the Group's ultimate parent company. Jatenergy Ltd is a public company incorporated and

domiciled in Australia. The address of its registered office and its principal place of business is Floor 6, Suite 8, 55 Miller

Street, Pyrmont, New South Wales 2009, Australia. The consolidated financial statements for the year ended 30 June

2013 (including comparatives) were approved and authorised for issue by the Board of Directors on xx September

2014.

(a) Principles of consolidation Subsidiaries

The consolidated financial statements consolidate the assets, liabilities and results those of Jatenergy Limited and all

of its subsidiaries as of 30 June 2014. Jatenergy Limited controls a subsidiary if it is exposed, or has rights, to variable

returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the

subsidiary. All subsidiaries have a reporting date of 30 June.

All transactions and balances between Group companies are eliminated on consolidation, including unrealised

gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are

reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts

reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with

the accounting policies adopted by the Group.

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised

from the effective date of acquisition, or up to the effective date of disposal, as applicable.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net

assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries

between the owners of the parent and the non-controlling interests based on their respective ownership interests.

(b) Going concern basis of accounting

The financial statements have been prepared on a going concern basis. The Group has incurred an operating loss

for the year of $3,040,654 (2013: $2,213,417) and negative cash flows from operating activities of $1,009,324(2013:

$1,236,229). The Directors are managing the Company’s cash flows carefully to meet its operational commitments.

The Directors intend to fund the company activities from future sales of tenements, licences an other non-core assets

and further capital raisings. Therefore the Directors consider that the going concern basis is appropriate. Should the

Group be unable to raise further funds or sell non core assets then there will be a material uncertainty over the

ongoing viability of the company.

JATENERGY LIMITED



34

(c) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating

decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing

performance of the operating segments, has been identified as the Board of Directors.

(d) Revenue and other income

Interest income is recognised on a time proportion basis using the effective interest method.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed from the buyer to the seller.

(e) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based

on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities

attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the

financial statements and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when

the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively

enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and

taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain

temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is

recognised in relation to these temporary differences if they arose in a transaction, other than a business

combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable

that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and

tax bases of investments in controlled entities where the group is able to control the timing of the reversal of the

temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly

in equity.

(f) Leases

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged

as expenses in the periods in which they are incurred.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the

life of the lease term.

(g) Business combinations

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by

the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets

transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset

or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.

The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of

whether they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets

acquired and liabilities assumed are generally measured at their acquisition-date fair values.

Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum

of (a) fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the

JATENERGY LIMITED



35

acquire, and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date

fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately.

(h) Impairment of non-financial assets

At the end of each reporting period, the Group assesses whether there is any indication that an asset may be

impaired. The assessment will include the consideration of external and internal sources of information including

dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition

profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying

value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of profit or

loss.

Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the

recoverable amount of the cash-generating unit to which the asset belongs.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

(i) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,

highly liquid investments with original maturities of three months or less that are readily convertible to known amounts

of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.

(j) Financial instruments Recognition and initial measurement

Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions

to the instrument. For financial assets, this is equivalent to the date that the Company commits itself to either the

purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs.

Classification and subsequent measurement

Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate

method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled,

between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine

fair value. In other circumstances, valuation techniques are adopted.

Amortised cost is calculated as:

(i) the amount at which the financial asset or financial liability is measured at initial recognition;

(ii) less principal repayments;

(iii) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised

and the maturity amount calculated using the effective interest method; and

(iv) less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is

equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction

costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the

contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.

Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential

recognition of an income or expense in profit or loss.

The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the

requirements of accounting standards specifically applicable to financial instruments.

JATENERGY LIMITED



36

(j) Financial instruments (cont) (i) Loans and receivables:

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, as they are expected to mature within 12 months after

the end of the reporting period.

(ii) Financial liabilities:

Non-derivative financial liabilities are subsequently measured at amortised cost.

Impairment

At the end of each reporting period, the Group assesses whether there is objective evidence that a financial

instrument has been impaired. Impairment losses are recognised in the statement of profit or loss.

De-recognition

Financial assets are de-recognised where the contractual rights to receipt of cash flows expires or the asset is

transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and

benefits associated with the asset. Financial liabilities are de-recognised where the related obligations are

discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or

transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or

liabilities assumed, is recognised in profit or loss.

(k) Property, plant and equipment

Property, plant and equipment are stated at historical cost less depreciation and impairment losses. Historical cost

includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only

when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the

item can be measured reliably. All other repairs and maintenance are charged to the statement of profit or loss

during the financial period in which they are incurred.

Depreciation on assets is calculated using the straight-line method to allocate their cost or revalued amounts, net of

their residual values, over their estimated useful lives.

The depreciation rates used for each class of depreciable assets are:

Furniture, fittings and office equipment 20-33%

Leasehold improvements 33%

The asset’s residual values and useful lives are reviewed and adjusted if appropriate, at each reporting date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is

greater than its estimated recoverable amount (note 1(h)).

Gains and losses on disposal are determined by comparing proceeds with carrying amount. These are included in

the statement of profit or loss.

(l) Assets Held for Sale

Non current assets are reclassified as held for sale when it is highly probable that a sale will take place, within 12

months of the financial year end date.

JATENERGY LIMITED



37

(m) Foreign currency translation (i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the

primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial

statements are presented in Australian dollars, which is Jatenergy Limited’s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the

dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and

from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies

are recognised in the statement of profit or loss, except when they are attributable to part of the next investment in foreign operation.

Translation differences on financial assets and liabilities carried at fair value are reported as part of the fair value gain

or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value

through profit or loss are recognised in statement of profit or loss as part of the fair value gain or loss. Translation

differences on non-monetary financial assets such as equities classified as available-for-sale financial assets are

included in the fair value reserve in other comprehensive income.

(iii) Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary

economy) that have a functional currency different from the presentation currency are translated into the

presentation currency as follows:

assets and liabilities for each statement of financial position presented are translated at the closing rate at the

date of that statement of financial position;

income and expenses for each statement of comprehensive income are translated at average exchange

rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the

transaction dates, in which case income and expenses are translated at the dates of the transactions); and

all resulting exchange differences are recognised as a separate component of in other comprehensive

income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of

borrowings and other financial instruments designated as hedges of such investments, are recognised in other

comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are

repaid, a proportionate share of such exchange differences are recognised in the statement of profit or loss, as part

of the gain or loss on sale where applicable.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of

the foreign entities and translated at the closing rate.

(n) Intangibles

Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an

intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial

recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated

impairment losses. Internally generated intangible assets, are not capitalised and expenditure is recognised in profit

or loss in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are

amortised over their useful life and tested for impairment whenever there is an indication that the intangible asset

may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of

consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the

amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense

JATENERGY LIMITED



38

(n) Intangibles on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function

of the intangible asset. The estimated useful life of the licence is 25 years.

Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-

generating unit level consistent with the methodology outlined for goodwill above. Such intangibles are not

amortised. The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine

whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from

indefinite to finite is accounted for as a change in an accounting estimate and is thus accounted for on a

prospective basis.

(o) Employee benefits Benefits

(i) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave

expected to be settled within 12 months of the reporting date are recognised in other payables in respect of

employees services up to the reporting date and are measured at the amounts expected to be paid when the

liabilities are settled.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and measured as the present

value of expected future payments to be made in respect of services provided by employees up to the reporting

date using the projected unit credit method. Consideration is given to expected future wage and salary levels,

experience of employee departures and periods of service. Expected future payments are discounted using market

yields at the reporting date on national government bonds with terms to maturity and currency that match, as

closely as possible, the estimated future cash outflows.

Share-based payments

Share-based compensation benefits are provided to Directors and executives. Information relating to these benefits

is set out in the Directors Report.

The fair value of options granted is recognised as a benefit expense with a corresponding increase in equity. The fair

value is measured at grant date and recognised over the period during which the Directors and executives become

unconditionally entitled to the options.

The fair value at grant date is determined using a Black-Sholes option pricing model that takes into account the

exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price

volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of

options that are expected to become exercisable. At each reporting date, the entity revises its estimate of the

number of options that are expected to become exercisable. The benefit expense recognised each period takes

into account the most recent estimate.

Upon the exercise of options, the balance of the share-based payments reserve relating to those options is

transferred to share capital and the proceeds received, net of any directly attributable transaction costs, and are

credited to share capital.

JATENERGY LIMITED



39

(p) Contributed equity Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of

tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the

acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

(q) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding

any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares

outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into

account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary

shares and the weighted average number of shares assumed to have been issued for no consideration in relation to

dilutive potential ordinary shares.

(r) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not

recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or

as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST

recoverable from, or payable to, the taxation authority is included with other receivables or payables in the

statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing

activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

(s) Investments in associates

Associate companies are companies in which the Group has significant influence through holding, directly or

indirectly, 20% or more of the voting power of the Company. Investments in associates are accounted for in the

financial statements by applying the equity method of accounting whereby the investment is initially recognised at

cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate

company. In addition the Group’s share of the profit or loss of the associate company is included in the Group’s

profit or loss.

(t) New accounting standards and Australian accounting interpretations

New and Amended Standards adopted by the Group The Group adopted the following Australian Accounting Standards, together with the relevant consequential

amendments arising from related Amending Standards, from the mandatory application date of 1 January 2013:

AASB 10: Consolidated Financial Statements;

AASB 12: Disclosure of Interests in Other Entities; and

AASB 127: Separate Financial Statements

AASB 10 provides a revised definition of ‘control’ and may result in an entity having to consolidate an investee that

was not previously consolidated and /or deconsolidate an investee that was consolidated under the previous

accounting announcements. These changes have no impact on the Group.

JATENERGY LIMITED



40

(t) New accounting standards and Australian accounting interpretations (cont)

New Accounting Standards for Application in Future Periods

The AASB has issued a number of new and amended Accounting Standards and Interpretations that have

mandatory application dates for future reporting periods, some of which are relevant to the Group. The Group has

decided not to early adopt any of the new and amended pronouncements. The Group’s assessment of the new

and amended pronouncements that are relevant to the Group but applicable in future reporting periods is set out

below:

AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting periods

commencing on or after 1 January 2018).

The standard will be applicable retrospectively (subject to comment on hedge accounting below) and includes revised requirements for the classification and measurement of financial instruments, revised

recognition and derecognition requirements for financial instruments and simplified requirements for hedge

accounting.

The key changes made to the Standard that may affect the Group on initial application included certain

simplifications to the classification of financial assets, simplifications to the accounting of embedded

derivatives, and the irrevocable election to recognize gains and losses on investments in equity instruments

that are not held for trading in other comprehensive income. AASB 9 also introduces a new model for

hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to

hedges of non-financial items. Should the entity elect to change its hedge policies in line with the new

hedge accounting requirements of AASB 9, the application of such accounting would be largely

prospective.

Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial

instruments, including hedging activity, it is impracticable at this stage to provide a reasonable estimate of

such impact.

AASB 2012-3: Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial

Liabilities (applicable for annual reporting periods commencing on or after 1 January 2014).

This Standard provides clarifying guidance relating to the offsetting of financial instruments, which is not

expected to impact the Group’s financial statements.

Interpretation 21: Levies (applicable for annual reporting periods commencing on or after 1 January 2014).

Interpretation 21 clarifies the circumstances under which a liability to pay a levy imposed by a government

should b recognized, and whether that liability should be recognise in full at a specific date or progressively

over a period of time. This Interpretation is not expected to significantly impact to Group’s financial

statements.

AASB 2013-3: Amendments to AASB 136-Recoverable Amount Disclosure for Non-Financial Assets (applicable

for annual reporting periods commencing on or after 1 January 2014).

This standard amends the disclosure requirements in AASB 136: Impairment of Assets pertaining to the use of

fair value in impairment assessment and is not expected to significantly impact the Group’s financial

statements.

AASB 2013-4: Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation

of Hedge Accounting (applicable for annual reporting periods commencing on or after 1 January 2014

AASB 2013-4 makes amendments to AASB 139: Financial instruments: Recognition and Measurement to

permit the continuation of hedge accounting in circumstances where a derivative, which has been

designated as a hedging instrument, is novated from one counterparty to a central counterparty as a

JATENERGY LIMITED



41

(t) New accounting standards and Australian accounting interpretations (cont) consequence of laws or regulations. This standard is not expected to significantly impact the Group’s financial statements.

AASB 2013-5: Amendments to Australian Accounting Standards – Investment Entities (applicable for annual

reporting periods commencing on or after 1 January 2014)

AASB 2013-5 amends AASB 10: Consolidated Financial Statements to define an ‘investment entity’ and

requires, with limited exceptions, that the subsidiaries of such entities be accounted for at fair value through

profit or loss in accordance with AASB 9 and not be consolidated. Additional disclosures are also required.

As neither the parent nor its subsidiaries meet the definition of an investment entity, this Standard is not

expected to significantly impact the Group’s financial statements.

IFRS 15: Revenue from Contracts with Customers

replaces IAS 18 Revenue, IAS 11 Construction Contracts and some revenue-related Interpretations

establishes a new control-based revenue recognition model

changes the basis for deciding whether revenue is to be recognised over time or at a point in time

provides new and more detailed guidance on specific topics (e.g., multiple element arrangements,

variable pricing, rights of return, warranties and licensing)

expands and improves disclosures about revenue

The Australian Accounting Standards Board (AASB) is expected to issue the equivalent Australian Standard

(AASB 15 Revenue from Contracts with Customers), along with a new Exposure Draft (ED) on income from

transactions of Not-for-Profit (NFP) entities by September 2014. The standard is effective for annual reporting

periods beginning on or after 1 January 2017. The entity has not yet assessed the full impact of this Standard.

(u) Variation from preliminary financial report

After the release of the Group’s preliminary report to the ASX, an impairment of term deposits receivable of

$636,136 was recognised as it was considered unlikely that the group will recover deposits in relation to Atan

Bara. There was also a reclassification of plantation Licence of $265,743 from property, plant and equipment

to intangible assets.

This has been reflected in the final results which show a consolidated loss of $3,040,653.

2 Financial risk management

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management

framework. The Group’s risk management policies are established to identify and analyse the risks faced by the

Group, to set appropriate risk limited and controls, and to monitor risks and adherence to limits. Risk management

policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.

The Group’s activities expose it to a limited number of financial risks as described below. The Group’s overall risk

management program seeks to minimise potential adverse effects on the financial performance of the Group. To

date, the Group has not had the need to utilise derivative financial instruments such as foreign exchange contracts

or interest rate swaps to manage any risk exposure identified. The Group holds the following financial instruments.

Consolidated Entity

2014 2013

Note $ $

Financial assets

Cash and cash equivalents 8 258,344 708,772

Trade and other receivables 9 71,228 952,733

Total 329,572 1,661,505

JATENERGY LIMITED



42

Financial liabilities

Borrowing 16 100,000 -

Trade and other payable 14 251,574 124,447

Total 351,574 124,447

Specific financial risk exposures and management

The main risks the Group is exposed to through its financial instruments are interest rate risk, foreign currency risk,

credit risk and liquidity risk.

(a) Interest rate risk

The Group’s main interest exposure arises from cash at bank and bank term deposits as at the reporting date, the

Group had the following cash profile.

Consolidated Entity

2014 2013

$ $

Cash at bank and in hand 24,468 193,115

Term deposit 233,876 515,657

Total 258,344 708,772

The Group’s main interest rate risk arises from cash and cash equivalents. The bank term deposit has an interest rate

which is fixed for the term of the investment and the bank accounts have a floating interest rate.

(b) Foreign exchange risk

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are

denominated in a currency that is not the entity’s functional currency. The risk is measured using cash flow

forecasting. The Groups exposure to foreign currency risk relates to investments in overseas entities which are

denominated in foreign currency with future investments dependent on achievement of milestones agreed.

The Group maintains a foreign currency (United States dollars) bank account in Australia to control currency risk. The

balance of this account at 30 June 2014 was USD$419 (2013: USD$65,603).

The Group operates internationally but are only exposed to minimal foreign exchange risk arising from various

currency exposures.

Foreign exchange risk arises from future commercial transactions denominated in a currency that is not the entity’s

functional currency. The risk is measured using sensitivity analysis and cash flow forecasting.

The Group maintains sufficient funds in this account to cover its foreign currency denominated investments for the

immediate future.

(c) Credit risk

Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, deposits and banks as well

credit exposure including outstanding receivables and committed transactions. For banks and financial institutions,

only independently rated parties with a minimum rating of ‘A’ are accepted. In respect of the group, credit risk

relates to loans with subsidiary and associated companies. In order to achieve stated corporate objectives, the

parent entity provides financial support to subsidiary and associated companies, but only to the level which the

JATENERGY LIMITED



43

2 Financial risk management (cont)

Board considers necessary to achieve these objectives and meets agreed conditions. Any loans to subsidiary and

associated companies considered to be unrecoverable have been provided for.

(d) Liquidity risk

The Group maintains sufficient liquidity by holding cash in readily accessible accounts. The Group manages liquidity

risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets

and liabilities. The Group has no access to borrowing facilities at the reporting date. The Group’s financial assets

$583,560 and financial liabilities $351,574 have a maturity within 12 months of 30 June 2014.

(e) Fair value

The carrying amount of financial assets and liabilities recorded in the financial statements represents their respective

net fair values unless otherwise noted, determined in accordance with the accounting policies disclosed in the

Statement of Accounting Policies.

(f) Sensitivity analysis

The following table illustrates a sensitivity to the Group’s exposure to changes in interest rates and exchange rates.

The table indicates the impact on how profit and equity values reported at reporting date would have been

affected by changes in the relevant risk variable that management considers to be reasonably possible. This

sensitivity assumes that the movement in a particular variable is independent of other variables.

Consolidated Entity

Profit Equity

$ $

Year ended 30 June 2014

+/-1% in interest rates +/-2,388 +/-2,388

+/-10% in $A/$US +/-1,294 +/-1,294

Year ended 30 June 2013

+/-1% in interest rates +/-7,088 +/-7,088

+/-10% in $A/$US +/-6,560 +/-6,560

3 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors,

including expectations of future events that may have a financial impact on the entity and that are believed to be

reasonable under the circumstances.

(a) Critical accounting estimates and assumptions The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by

definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of

causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are

discussed below.

(i) Estimated impairment of investment in associate

The Company review’s impairment of its investments in associates in accordance with the accounting policy stated

in note 1(h). Refer to note 11(d) for details of assumptions used.

(ii) Value allocation of intangibles

JATENERGY LIMITED



44

3 Critical accounting estimates and judgements (cont)

The Group determines whether intangibles with indefinite useful lives are impaired at least on an annual basis. This

requires an estimation of the recoverable amount of the cash-generating units, using a value in use discounted cash

flow methodology, to which the goodwill and intangibles with indefinite useful lives are allocated. See Note 12 for

further details.

(iii) Share based payments

The Company determines values for share options issued. Disclosure of these valuations can be found in the Directors

Report.

(iv) Impairment of receivables/deposits

Impairment of receivables occurs when the Group thinks it is unlikely that they will recover funds classified as

receivables/deposits.

(v) Carrying of asset for sale

The Group determined the carrying value of the asset held for sale based on a letter of offer received. (see note 10

for further details)

4 Segment information

The Company has identified its operating segment based on the internal reports that are reviewed and used by the

Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of

resources.

The Company is managed primarily on the basis of product category. The Company’s operating segments are

therefore determined on the same basis.

Reportable segments disclosed are based on aggregating operating segments where the segments are considered

to have similar economic characteristics and are also similar with respect to the following:

the products sold provided by the segment; the planting process;

the type or class of customer for the products;

the distribution method; and

external regulatory requirements.

The business segments and the geographic segments within which the Company operates are biofuel oilseeds and

coal mining in the Asia Pacific regions respectively. For reporting purposes, the entity operates predominantly in two

geographical areas, being Australia and Indonesia. The acquisition of Blackrock Resources Pty Ltd in April 2011

included mining tenements and contracts located in Indonesia.

(i) Segment performance

2014Coal

$Oilseeds

$Total

$

REVENUE

External Sales 39,825 79,674 119,499

Total Segment Revenue 39,825 79,674 119,499

Reconciliation of segment revenue to group revenue

Interest Revenue 15,758

Other revenue 437,164

Total Group Revenue 572,421

Segment net profit(loss) from continuing operations before

tax

(1,870,414)

(15,387)

(1,885,801)

JATENERGY LIMITED



45

5 Segment information (cont)

Amounts not included in segment result but reviewed by the

Board

- Corporate Expenses (1,152,939)

- Depreciation and amortisation (1,914)

Net (loss) from continuing operations (3,040,654)

2013Coal

$Oilseeds

$Total

$

REVENUE External Sales 89,781 - 89,781

Total Segment Revenue 89,781 - 89,781

Reconciliation of segment revenue to group revenue

Interest Revenue 22,480

Other revenue 19,931

Total Group Revenue 132,192

Segment net loss from continuing operations before tax (1,427,034) (24,438) (1,451,472)

Amounts not included in segment result but reviewed by the

Board

- Corporate Expenses (737,702)

- Depreciation and amortisation (4,144)

Net (loss) from continuing operations (2,213,417)

(ii) Segment assets

2014Coal

$Oilseeds

$Total

$

Segment Assets

Segment assets increases for the period

- Capital expenditure - - -

- Acquisitions - - -

- - -

Reconciliation of segment assets to group assets 1,496,722 280,297 1,777,019

Corporate assets 480,062

Total Group Assets 2,257,081

2013Coal

$Oilseeds

$Total

$

Segment Assets Segment assets increases for the period

- Capital expenditure

- Acquisitions

Reconciliation of segment assets to group assets 3,887,456 304,268 4,191,724

Corporate assets 861,673

Total Group Assets 5,033,397

(iii) Segment liabilities

2014Coal

$Oilseeds

$Total

$

Segment Liabilities

Reconciliation of segment liabilities to group liabilities 151,174 - 151,174

Corporate liabilities - - 200,400

Total Group Liabilities 351,574

JATENERGY LIMITED



46

4 Segment information (cont

2013Coal

$Oilseeds

$Total

$

Segment Liabilities

Reconciliation of segment liabilities to group liabilities - - -

Corporate liabilities - - 124,447

Total Group Liabilities 124,447

(iv) Revenue by geographic location

2014 $

2013$

Revenue, attributable to external customers is disclosed

below, based on the location of the external customer

Australia 57,722 42,411

Indonesia 514,699 89,781

Total Revenue 572,421 132,192

(v) Non-Current Assets by geographical location

2014 $

2013$

Australia 7,016 22,162

Indonesia 265,743 1,871,358

Total Assets 272,759 1,893,548

5 Revenue

Consolidated Entity

2014 2013

$ $

Revenue

Interest 15,758 22,480

Coal sales 15,474 89,781

Sale of jatropha oil 79,674 -

Consulting Fee 24,351 19,931

Other Revenue 19,545 -

Total Revenue 154,802 132,192

Other Income

Deposits forfeited 417,619 -

Total Other Income 417,619 -

JATENERGY LIMITED



47

6 Expenses

Consolidated Entity

2014 2013

$ $

Loss before income tax includes the following specific expenses:

Depreciation of plant and equipment 12,334 11,689

Finance costs 5,415 13,770

Foreign exchange (gains)/losses 97,243 (283,788)

Impairment - intangible assets 1,605,643 1,166,593

Impairment – deposits (other receivables) 746,327 -

Rental expense relating to operating lease 55,095 45,033

7 Income tax expense

Consolidated Entity

2014 2013

$ $

(a) Income tax expense

Current tax - -

Deferred tax - -

- -

(b) Numerical reconciliation of income tax expense to prima facie tax payable

Loss before income tax expense (3,040,654) (2,213,417)

Tax (benefits) at the Australian tax rate of 30% (912,196) (664,025)

Tax effect of amounts which are not deductible in calculating

taxable income:

Other non-allowable items -

Share-based payments -

Impairment 705,593 349,977

Adjusted income tax (206,603) (314,048)

Tax losses not brought to account 206,603

314,048

Income tax expense - -

JATENERGY LIMITED



48

7 Income tax expense (cont)

(c) Tax losses

Unused tax losses for the current year for which no deferred tax

asset has been recognised 688,677 1,046,827

Unused tax losses carried forward from prior years for which no

deferred tax asset has been recognised 8,068,707 7,021,880

Potential tax benefit at 30% 2,627,215 2,420,612

(d) Tax consolidation legislation

Jatenergy Limited has not formed a tax consolidated group.

8 Cash and cash equivalents

Consolidated Entity

2014 2013

$ $

Cash at bank and in hand 24,468 193,115

Term deposit 233,876 515,657

Total 258,344 708,772

(a) Reconciliation to cash at the end of the year

The above figures are reconciled to cash at the end of the financial year as shown in the statement of cash flow as

follows:

Consolidated Entity

2014 2013

$

Balances as above 258,344 708,772

Balances per statement of cash flows 258,344 708,772

(b) Cash

The cash in the investment account earns a floating interest rate of 3% (2013: 3%).

(c) Interest rate risk

The Group’s exposure to interest rate risk relates primarily to the cash balances in the investment account detailed above. The Group’s and the parent entity’s exposure to interest rate risk is discussed in note 2.

JATENERGY LIMITED



49

9 Trade and other receivables

Consolidated Entity

2014 2013

$ $

Other receivables 63,183 27,802

Deposits - 725,064

Advances 8,042 199,867

Total 71,225 952,733

(a) Effective interest rates and credit risk

There is no interest rate risk for the balance of trade and other receivables.

All amounts past due are considered impaired and provided against. All other receivables are within credit terms

and not considered impaired.

During the year deposits of $666,658 were impaired relating to Atan Bara as it was considered unlikely to be

received.

Also during the year $79,674 receivable from Waterland was also impaired as it will not be collected by the group.

10 Assets available for sale

Consolidated Entity

2014 2013

$ $

Deposits 176,518 -

Tenements 1,478,235 1,478,235

Total 1,654,753 1,478,235

On 17 July 2013 JAT Energy entered into a contract to sell assets that had previously been classified as intangible

assets – tenements. At 30 June 2013 these assets have been reclassified as assets held for sale as it is highly probable

that the asset will be sold, within 12 months of the year end. On 27 July 2014 Jat Energy accepted an offer to sell the

assets classified in 2012 as intangible assets-tenements. JAT has also reclassified deposits that will be recouped as

part of this sale. At 30 June 2014 these assets have been reclassified as held for sale as it is highly probable that will be sold within 12months of the year end. This is not considered a discontinued operation as no activity or

transactions have occurred since original purchase

10 Property, Plant and equipment

2014 2013 $ $

Furniture & fixtures

Cost 65,905 65,905 Accumulated Depreciation (58,889) (43,743)

7,016 22,162

JATENERGY LIMITED



50

11 Property, Plant and equipment (cont)

Movements in Carrying Amounts

Furniture and Fittings Total

Balance at 1 July 2013 22,162 22,162

Additions - -

Disposals - -

Depreciation (12,334) (12,334)

Balance at 30 June 2014 7,016 7,016

12 Intangibles

Licence Tenements Contracts Total

$ $ $ $

30 June 2014

Cost 265,743 - 4,366,330 4,632,073

Transferred to assets held for sale - - - -

Accumulated Impairment Losses - - (4,366,330) (4,366,330)

Net carrying amount 265,743 - - 265,743

30 June 2013

Cost 265,743 1,478,235 4,366,330 6,110,308

Transferred to assets held for sale - (1,478,235) - (1,478,235)

Accumulated Impairment Losses - - (2,760,687) (2,760,687)

Net carrying amount 265,743 - 1,605,643 1,871,386

Fair Value

Balance at 1 July 2013 265,743 - 1,605,643 1,871,386

Transferred to assets held for sale - - - -

Impairment - - (1,605,643) (1,605,643)

Balance at 30 June 2014 265,743 - - 265,743

Carrying amounts - - - -

At 1 July 2013 265,743 - 1,605,643 1,8171,386

At 30 June 2014 265,743 - - 265,743

The premium of $5,844,565 paid over the fair value of assets acquired has been allocated to two interests Blackrock

held at the time of acquisition; being a mining services contract and interest in mining tenement in Indonesia.

The mining services contract value was calculated based on net future cash flows generated from the contract. A total of $4,366,330 was allocated to this contract. At 30 June 2012, a re-assessment of the net future cashflows was

made and at 30 June 2013 a further reassessment was made. At 31 December 2013 it was considered unlikely that

JAT would realise the value of the mining contract as the mine it relates to is considered to have a remote chance of

reopening and as such this contract has been fully impaired

JATENERGY LIMITED



51

12 Intangibles (cont)

The key assumptions used in the valuation model for contracts are no longer valid and this intangible was fully

impaired during the year. An impairment expense of $1.6m (2013: $1.2m; 2012 $1.6m) was recognised in the current

year.

Licences are expected to be depreciated over the estimated useful life of 25 years once the first marketable yield of fruit has occurred. The plantation is carried at cost as there is no active market for Jatropha for which a fair value

can be determined.

13 Trade and other payables

Consolidated

2014 2013

$ $

Trade payables 252,270 124,447

Total 252,270 124,447

14 Provisions

Consolidated

2014 2013

$ $

Employee benefits - annual leave - -

Total - -

Provisions of Annual Leave

A provision has been recognised for employee benefits relating to annual leave for the year ended 30 June 2012.

The provision was released as the Group no longer has full time employees. The measurement and recognition

criteria relating to employee benefits have been included in Note 1 to this report.

15 Borrowings

Consolidated

2014 2013

$ $

Convertible Note 100,000 -

Total 100,000 -

The convertible note was issued in relation to the reopening of Jong Kang site and is convertible to shares at the companies discretion or repayable from proceeds from the residual share of profits from the Jong Kang mine. Post

year end the note was converted into share equity in the company.

JATENERGY LIMITED



52

16 Contributed equity

Consolidated Entity

2014 2013

Notes $ $

(a) Share capital

Ordinary Shares

103,568,568 (2012: 98,565,568) Fully paid shares (c) 26,526,160 26,426,160

Total Share Capital 26,526,160 26,426,160

(b) Other equity securities

Options

Restricted -

Unrestricted - 31,898,547

Directors – Unlisted - 375,000

Total options - 32,273,547

(c) Movements in ordinary share capital

2014 2013 2014 2013 $ $ Number Number

At the beginning of the reporting period 26,426,160 25,655,160 98,565,568 79,290,568

Share issues during the year:

12 September 2012 - 121,000 - 3,025,000

5 October 2012 - 60,000 - 1,500,000

30 October 2012 - 15,000 - 375,000

7 November 2012 - 500,000 - 12,500,000

6 December 2012 - 75,000 - 1,875,000

26 August 2013 100,000 - 5,000,000 -

Closing balance 26,526,160 26,426,160 103,565,568 98,565,568

(d) Ordinary shares

The Company does not have a limited amount of authorised capital.

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in

proportion to the number of and amounts paid on the shares held and do not have a par value.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one

vote, and upon a poll each share is entitled to one vote.

JATENERGY LIMITED



53

16 Contributed equity (cont)

(e) Movements in options

Listed Unlisted Total

Opening balance at 1 July 2013 31,898,547 375,000 32,273,547

Options issued during the period - - -

Expired (31,898,547) (375,000) (32,773,547)

Closing at 30 June 2014 - - --

(f) Options Information relating to Jatenergy Director and executive options, including details of options issued and outstanding,

is set out in the Directors Report.

An amount of $615,478 has been released from the share option reserve to retained earnings in the consolidated

statement of changes in equity as a result of the options expiring. This amount was previously recognised in

employee remuneration.

(g) Capital risk management

The Group’s and parent entity’s objectives when managing capital are to safeguard their ability to continue as a

going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and

to maintain an optimal capital structure to reduce the cost of capital. There were no changes in the Group’s

approach to capital management during the year. Neither the Company nor any of its subsidiaries are subject to

externally imposed capital requirements.

17 Reserves and accumulated losses

Consolidated Entity

2014 2013

$ $

(a) Reserves

Share-based payments reserve - 351,492

Options reserve - 264,083

Foreign currency translation reserve (252,270) (189,687)

(252,270) 425,888

Consolidated Entity

(b) Accumulated losses 2014 2013

Movements in accumulated losses were as follows: $ $

Balance 1 July 22,906,160 20,735,499

Net loss for the year 3,032,029 2,170,661

Released from reserves (615,478) -

Balance 30 June 25,322,711 22,906,160

JATENERGY LIMITED



54

17 Reserves and accumulated losses (cont)

(c) Nature and purpose of reserves

(i) Share-based payments reserve The share-based payments reserve is used to recognise the fair value of options granted but not exercised. An

amount of $351,492 has been released from the share option reserve to retained earnings in the consolidated

statement of changes in equity as a result of options expiring. This amount was previously recognised in employee

remuneration.

(ii) Options reserve

The options reserve is used to recognise the amounts received form the issue of listed options. An amount of $264,083

has been released from the share option reserve to retained earnings in the consolidated statement of changes in

equity as a result of options expiring. This amount was previously recognised in employee remuneration.

(iii) Foreign Currency translation reserve

The foreign currency translation reserves comprises of foreign currency translation differences arising on translation of

financial statements of the Groups foreign entities.

18 Key management personnel disclosures

(a) Directors and key management personnel

The following persons were Directors of Jatenergy Limited during the financial year.

Chairman - executive

Anthony Crimmins (appointed 22 May 2012)


Xipeng Li, Non-Executive Director (appointed 15 April 2011)

Wilton Yao, Alternate Non-Executive Director for Mr Xipeng Li (appointed 15 April 2011)

Richard Pritchard, Non-Executive Director (appointed 22 May 2012) (resigned 26 November 2013)

Ian Gebbie, Non Executive Director (appointed 5 December 2013)

Key management personnel

Chris Flanagan (Operational Manager)

(b) Other transactions with key management personnel

There were no other transactions with key management personnel during the financial year ended 30 June 2014 or

30 June 2013 otherwise noted in the remuneration report.

The chief executive officer and general manager are employed under a consulting and employment services

contract, respectively.

JATENERGY LIMITED



55

19 Remuneration of auditors

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its

related practices and a non-related audit firm.

Consolidated Entity

2014 2013

$ $

(a) Assurance services

Audit services

Grant Thornton Audit Pty Limited

Audit of financial reports and other audit work under the

Corporations Act 2001 43,682 37,019

Total remuneration for audit services 43,682 37,019

Other assurance services - -

Total remuneration for assurance services 43,682 37,019

Grant Thornton Audit Pty Limited was appointed as the Group’s auditors at the Annual General Meeting on 26

October 2007.

It is the Group’s policy to employ Grant Thornton on assignments additional to their statutory audit duties where

Grant Thornton’s expertise and experience with the Group are important, and where the engagement does not

compromise their independence. It is the Group’s policy to seek competitive tenders for all major consulting

projects.

20 Contingencies

(a) Contingent liabilities

The Group has a contingent liability in relation to the Jong Kang 2 operations. There is a profit share agreement

which stipulates that profit from Jong Kang 2 operations will be shared 30/70 between Jatenergy and Chapmans

until Chapmans receive their initial investment of $200,000. No liability has been raised in relation to this amount as it is

not expected to be payable within the foreseeable future.

At 30 June 2013 Jat Energy had a contingency regarding the first harvest of Jatropha oil which was to be used to

pay monies owing to landholders. As the revenue from this crop would be offset by the expense no asset or liability

was recorded.

(b) Contingent assets

The Group had no significant contingent assets at 30 June 2014. At 30 June 2013 Jat Energy had a contingency

regarding the first harvest of Jatropha oil which was to be used to pay monies owing to landholders. As the revenue

from this crop would be offset by the expense no asset or liability was recorded.

JATENERGY LIMITED



56

21 Commitments

(a) Operating lease commitments - group as lessee

Consolidated Entity

2014 2013

$ $

Commitments for minimum lease payments in relation to operating leases

contracted for the reporting date but not recognised as liabilities,

payable:

Within one year 16,709 -

Later than one year but not later than five years - -

Later than five years - -

- -

Representing:

Non-cancellable operating leases - -

- -

The lease is a rental lease over the Sydney premises of Jat Energy Limited.

22 Related party transactions

(a) Parent entity

Jatenergy Limited is the ultimate parent entity within the Group.

22 Related party transactions (Cont)

(b) Subsidiaries

Interests in the subsidiary are set out in note 23.

(c) Key management personnel

Disclosures relating to key management personnel are set out in the Director’s report.

(d) Amounts receivable or payable to related parties

There were no amounts receivable or payable to related parties for the year ended 30 June 2014 or the year ended

30 June 2013.

JATENERGY LIMITED



57

22 Related party transactions (cont)

(e) Transactions with related parties

The following transactions occurred with related parties:

Consolidated Entity

2014 2013

$ $

A company controlled by George Sims, a former director, paid rent to Jat

Energy during the period 9,000 --

A company controlled by Tony Crimmins, a director, paid rent to Jat

Energy during the period 10,545 -

A company controlled by Tony Crimmins, a director, received payment for

expenses incurred during the period - 7,834

A company controlled by Chris Flanagan, a key management personnel,

received payment for expenses incurred during the period - 23,736

A company controlled by Wilton Yao, a director, received payment for

expenses incurred during the period - 11,450

23 Controlled Entities

(a) Controlled Entities Consolidated

Subsidiaries of Jatenergy Limited Country of incorporation /

Place of Business Percentage Owned

(%)*

Percentage Owned by Non-Controlling

Interest (%)*

2014 2013 2014 2013

% % % %

Jatenergy Holdings Pte Ltd(~) Singapore - - - -

Jatenergy Indonesia Pte Ltd(^) Singapore 100 100 - -

Jatenergy Developments Pty

Limited(#)

Australia 75 75 25 25

PT Jatoil Waterland(^) Indonesia 70 70 30 30

Blackrock Resources Pty Ltd Australia 100 100 - -

Blackrock Energy Pte Ltd(x) Singapore 100 100 - -

PT Barata Energy Indonesia 100 100 - -

PT Coal Soil Brik Indonesia 80 80 20 20

* Percentage of voting power is in proportion to ownership

^ These entities are subsidiaries of Jatenergy Holdings Pte Ltd. x This entity is a subsidiary of Blackrock Resources Pty Ltd

~This entity was dissolved on 2 January 2013

#This entity was incorporated 24 September 2012

Material Non-Controlling Interests are in relation to Jat Energy Developments Pty Limited

JATENERGY LIMITED



58

23 Controlled Entities (Cont)

Significant balances of Jat Energy Developments Pty Limited (entity with a material non controlling interest) are as

follows:

Consolidated Entity

2014 2013

$ $

Loss for the year (18,944) 140,136

Current Assets 247,932 570,059

Non-current Assets 633,891 306,327

Total Asset 881,863 870,286

Current Liabilities 40,944 10,423

Non current Liabilities - -

Total Liabilities 40,944 10,423

Net Assets 840,919 859,863

24 Events occurring after the reporting date

On 2 September 2014 Jat Energy Limited signed a converting loan agreement with Mr Chou Xian Feng. The

converting loan agreement provides $200,000 to Jatenergy Limited. It can be converted at the discretion of

Jatenergys directors and approval by Jatenergy shareholders at a general meeting. The value of conversion is 2

cents per share and attracts an interest rate of 5% per annum.

On 23 July 2014 Jat Energy Limited converted the loan of $100,000 made on 26 May 2014 at 2 cents per share.

On 28 July 2014 Jat Energy Limited signed an agreement for the sale of PT Coal Soil Brik (CSB) and PT Barata Energy

with PT Graha Kemang Sentosa

No matters other than the above have arisen since 30 June 2014 that have significantly affected, or may significantly

affect:

(i) the Company’s operations in future financial years; or

(ii) the results of those operations in future financial years; or

(iii) the Company’s state of affairs in future financial years.

JATENERGY LIMITED



59

25 Reconciliation of loss after income tax to net cash outflow from operating activities

Consolidated Entity

2014 2013

$ $

Loss for the year (3,040,653) (2,213,417)

Depreciation and amortisation 12,334 11,730

Foreign exchange (gain)/loss 97,243 (283,790)

Income from investing activities (417,619) -

Non-cash items:

Impairment 2,351,974 1,166,593

Change in operating assets and liabilities:

(Increase)/decrease in trade and other receivables (125,875) 89,995

Decrease/(increase) in trade and other payables 113,272 (6,624)

Increase/ (decrease in provisions - (716)

Net cash (outflow) from operating activities (1,009,324) (1,236,229)

26 Loss per share

Consolidated Entity

2014 2013

cents cents

(a) Basic and diluted loss per share

Basic loss attributable to the ordinary equity holders of the Company (3.0) (2.4)

Diluted loss attributable to the ordinary equity holders of the Company (3.0) (2.4)

(b) Loss used in calculating basic and diluted loss per share

(3,040,654 )

(2,107,661)

(c) Weighted average number of shares used as the denominator

Weighted average number of ordinary shares used as the denominator

in calculating basic earnings per share.

102,784,746 92,159,472

Weighted average number of ordinary shares used as the denominator

in calculating diluted earnings per share.

102,784,746 92,159,472

(d) Information concerning the classification of securities

(i) Options

Options granted to executives and Directors are considered to be potential ordinary shares and have been included

in the determination of diluted earnings per share to the extent to which they are dilutive. In the year ended 30 June

2014, these options were in fact anti-dilutive, and consequently diluted EPS is the same as basis EPS. The options

have not been included in the determination of basic earnings per share.

JATENERGY LIMITED



60

27 Jatenergy Limited - Parent Company Information

Consolidated Entity

2014 2013

$ $

Parent Entity

Assets

Current assets 218,615 279,938

Non-current assets 7,016 8,551,476

Total assets 285,631 8,831,414

Liabilities

Current liabilities 643,102 328.921

Total liabilities 643,102 328,921

Equity

Issues capital 26,526,160 26,426,160

Retained earnings 26,943,631 (18,539,144)

Total equity (417,471) 7,887,016

Reserves

Share-based payments reserve - 615,477

Total reserves - 615,477

Financial performance

Loss for the year 9,030,192 (847,363)

Other comprehensive income -

Total comprehensive income 9,030,192 (847,363)

Guarantees in relation to the debts of subsidiaries

Guarantee provided under the deed of cross guarantee Nil Nil

Contingent liabilities

Non-cancellable operating lease - premises - -

Contractual commitments

Contractual capital commitments for the acquisition of property,

plant or equipment. Nil Nil

Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the

context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm

is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and

are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its

Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

62

Level 17, 383 Kent Street

Sydney NSW 2000

Correspondence to:

Locked Bag Q800

QVB Post Office

Sydney NSW 1230

T +61 2 8297 2400

F +61 2 9299 4445

E [email protected]

W www.grantthornton.com.au

Independent Auditor’s Report

To the Members of Jatenergy Limited

We have audited the accompanying financial report of Jatenergy Limited (the “Company”),

which comprises the consolidated statement of financial position as at 30 June 2014, the

consolidated statement of profit or loss and other comprehensive income, consolidated

statement of changes in equity and consolidated statement of cash flows for the year then

ended, notes comprising a summary of significant accounting policies and other explanatory

information and the directors’ declaration of the consolidated entity comprising the

Company and the entities it controlled at the year’s end or from time to time during the

financial year.

Directors’ responsibility 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. The Directors’ responsibility also includes 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. The Directors also state, in the notes to the financial report, in accordance with

Accounting Standard AASB 101 Presentation of Financial Statements, the financial

statements comply with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We

conducted our audit in accordance with Australian Auditing Standards. Those standards

require us to comply with relevant ethical requirements relating to audit engagements and

plan and perform the audit to obtain reasonable assurance whether the financial report is

free from material misstatement.

63

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial report. The procedures selected depend on the auditor’s

judgement, including the assessment of the risks of material misstatement of the financial

report, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the

Company’s preparation of the financial report that gives a true and fair view in order to

design audit procedures that are appropriate in the circumstances, but not for the purpose

of expressing an opinion on the effectiveness of the Company’s internal control. An audit

also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by the Directors, as well as evaluating the

overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the

Corporations Act 2001.

Auditor’s opinion

In our opinion the financial report of Jatenergy Limited is in accordance with the

Corporations Act 2001, including:

a. giving a true and fair view of the consolidated entity’s financial position as at 30 June

2014 and of its performance for the year ended on that date; and

b. complying with Australian Accounting Standards and the Corporations Regulations

2001; and

c. the financial report also complies with International Financial Reporting Standards as

disclosed in the notes to the financial statements.

Emphasis of matter

Without qualifying our opinion, we draw attention to Note 1 in the financial report which

indicates that the consolidated entity incurred a net loss of $3,040,654 and operating cash

outflows of $1,009,324 during the year ended 30 June 2014. Furthermore, the consolidated

entity is reliant on future sale of its assets, and additional equity funding. These conditions,

along with other matters as set forth in Note 1, indicate the existence of a material

uncertainty which may cast significant doubt about the consolidated entity’s ability to

continue as a going concern and therefore, the consolidated entity may be unable to realise

its assets and discharge its liabilities in the normal course of business, and at the amounts

stated in the financial report.

64

Report on the remuneration report

We have audited the remuneration report included in pages 10 to 16 of the directors’ report

for the year ended 30 June 2014. 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.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Jatenergy Limited for the year ended 30 June

2014, complies with section 300A of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

A G Rigele

Partner - Audit & Assurance

Sydney, 30 September 2014

JATENERGY LIMITED


SHAREHOLDER INFORMATION

65

Additional Information required by the ASX Limited listing rule and not disclosed elsewhere in this report are set out

below.

The shareholder information set out below was applicable as at 29 August 2014

(a) Distribution of equity securities

Analysis of a number of ordinary fully paid shareholders by size of holding:

Holders Units Percentage 1 - 1,000 30 14,990 0.01%

1,001 - 5,000 257 264,689 0.70%

5,001 - 10,000 119 883,938 0.81%

10,001 - 100,000 318 1,345,913 10.45%

100,001 - And over 131 95,556,058 88.02%

Total on Register 850 108,565,568 100.00%

Total Number of holders of less than a marketable parcel of ordinary shares: 448

(e) Substantial holders

The substantial shareholders of the Company are as follows:

Holder Name OrdinaryShares

HAJEK ADAM LESLIE + L G 15,485,827

SHENG RUN HLDGS GRP AUST 9,125,000

HAJEK SUPER PL 4,684,581

BOND STREET CUSTS LTD 4,312,885

SHENG RUN HLDGS GRP AUST 4,286,222

(f) Voting rights

The voting rights attaching to each class of equity securities are set out below:

(ii) Ordinary Shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll

each share shall have one vote.

(iii) Options

No voting rights.

(g) Equity security holdings

(iv) Ordinary Shares

Twenty largest quoted equity security holders.

JATENERGY LIMITED


SHAREHOLDER INFORMATION

66

The names of the 20 largest quoted equity security holders of quoted equity securities are listed below:

Spread & Top 20 Listings

Holder Name

Current

Units

Status % of Issued

1 HAJEK ADAM LESLIE + L G 15,485,827 14.26%

2 SHENG RUN HLDGS GRP AUST 9,125,000 8.41%

3 HAJEK SUPER PL 4,684,581 4.31%

4 BOND STREET CUSTS LTD 4,312,885 3.97%

5 SHENG RUN HLDGS GRP AUST 4,286,222 3.95%

6 LOZADA LOUIS 3,513,514 3.24%

7 BOND STREET CUSTS LTD 3,375,000 3.11%

8 RUN IT PL 3,011,771 2.77%

9 TOP CAT CONS SVCS PL 2,967,900 2.73%

10 CRIMMINS ANTHONY STEPHEN 2,622,017 2.42%

11 CRIMMINS ANTHONY STEPHEN 1,655,039 1.52%

12 CITICORP NOM PL 1,338,190 1.23%

13 MELDEJ PL 1,214,985 1.12%

14 CAMUGLIA JOSEPH + K 1,154,481 1.06%

15 JAT SHARE SCHEME PL 1,153,880 1.06%

16 XU XIAO PING 1,081,081 1.00%

17 SUN YONG MING 1,081,081 1.00%

18 HSBC CUSTODY NOM AUST LTD 1,051,277 0.97%

19 RLLD COOKE PL 1,048,000 0.97%

20 NATIONAL NOM LTD 944,121 0.87%

Total Top 20 Shareholders 65,106,852 59.97%

jatenergy limited annual report - wordpress.com · 6/30/2014 · initial focus on exploration and...

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