2014 - listed companyloyzenergy.listedcompany.com/misc/ar2014.pdf · 2014 dear shareholders, i am...

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CONTENT01 Corporate Profile02 Letter to Shareholders05 Corporate Calendar06 Operations Review10 Concession Overview13 Sustainability Report15 Financial Highlights16 Board of Directors18 Management Team19 Corporate Information20 Qualified Person’s Reports21 Financial Content

Although Loyz is a relatively young player in the upstream sector, we have already demonstrated that we have the vision, the drive and the technical expertise to successfully execute our agenda, marking fresh breakthroughs in growth every year.

In less than five years, we successfully secured a well-balanced portfolio of producing and exploration assets. We have never lost our focus on drawing cash flow from our wells, and our latest acquisition in Thailand has begun to deliver returns. Our ability to gauge and manage risks, to marshal every resource at hand, as we choose our concessions and execute our projects, will see us mark new turning points as we ramp up production of existing assets and seek out other promising acquisitions that will broaden our earnings stream.

MARKINGGROWTH

This annual report has been prepared by the Company and its contents have been reviewed by the Company’s sponsor (the “Sponsor”), Canaccord Genuity Singapore Pte Ltd, for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (“SGX-ST”). The Sponsor has not independently verified the contents of this annual report.

This annual report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this annual report, including the correctness of any of the statements or opinions made or reports contained in this annual report.

The contact person for the Sponsor is Mr Alex Tan, CEO, Canaccord Genuity Singapore Pte Ltd at 77 Robinson Road #21-02 Singapore 068896, telephone (+65) 6854 6160.

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Singapore-grown Loyz Energy Limited (Loyz or the Company or the Group) is fast establishing itself as an independent exploration and production (E&P) energy company in the Asia-Pacific.

Loyz is working to build a balanced portfolio of prime, producing oil and gas concessions, which will generate a steady earnings stream to gird up its balance sheet, as well as exploration assets that will drive long-term growth. In addition, Loyz will seek drilling partnerships to reduce risks at the exploration and development stages.

The Group has begun to acquire producing assets. In April, it purchased a 20% stake in three producing concessions in Thailand. It intends to selectively add more such assets, as the ensuing cashflows will enable Loyz to step up the pace of development at its concessions in the US and the Asia-Pacific.

Within its balanced portfolio, Loyz, through its wholly-owned subsidiary, Loyz Oil Pte Ltd, also owns two petroleum exploration permits (PEPs) – one for New Zealand’s Taranaki Basin and the other for an area off the coast of Victoria in Australia – and a petroleum service contract for Area 14 in the East Palawan Basin, off the Philippines.

CORPORATEPROFILE

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Dear Shareholders,

I am pleased to report that Loyz took a stride forward towards becoming a reputable independent upstream energy company in the Asia-Pacific when we acquired our first oil producing concessions in Thailand - the key earnings driver for the financial year ended 30 June 2014 (FY2014).

Last year also saw us rationalise our investment in the US by taking a direct 20% stake in Fram Exploration ASA (Fram) in June 2014. This replaces the previous exploration-and -production agreement we had with Fram, who owns onshore concessions in the resource rich regions of North Dakota and Colorado, US, which cover approximately 60,000 acres (243 sq km).

These steps to capture growth opportunities for the Group were well supported by investors and financial institutions.

Our Performance in FY2014

Backed by maiden sales of crude oil from the recently acquired 20%-owned Thailand concessions, the Group stepped into the black in the fourth quarter of FY2014 (4QFY2014), posting an EBITDAX (earnings before interest, taxation, depreciation, amortisation and exploratory expenses) of S$5.8 million and a net profit attributable to owners of the parent of S$0.8 million. Revenue for 4QFY2014 increased to S$8.6 million from S$1.3 million in 4QFY2013.

For FY2014, the Group’s turnover surged to S$20.7 million due largely to the sale of crude oil from the Thailand concessions and drilling revenue in the United States. However, higher administrative and other expenses as well as finance costs arising from the expansion of the Group’s operations dampened our profitability and we incurred a net loss of S$4.7 million in FY2014.

Marking Growth in Our Operations

The earnings breakthrough we achieved in 4QFY2014 affirms that we are on the right track of attaining our goal of growing a steady income stream from the sale of hydrocarbons.

Over the short to medium term, we will mark our growth by stepping up production, especially at our Thailand concessions, and acquiring strategic producing assets in good fiscal regimes to boost our cashflows and recurrent income stream.

While we have achieved first oil in the US producing at about 50 barrels of oil per day (bopd) in December 2013, our three onshore concessions in Thailand account for the bulk of the Group’s production, delivering about 4,400 bopd (100% share). We are cautiously optimistic that we will be able to lift the production from Thailand to 5,000 bopd in the coming months. Barring any unforeseen circumstances, we expect our operational cashflow or EBITDAX to remain positive.

Even as we take steps to ramp up production and improve cashflows, we will also continue to review our concessions portfolio to ensure the best use of our resources. In this respect, we entered a binding memorandum of understanding with Enso Oil & Gas Limited, a Hong Kong-based oil and gas company, which has proposed to invest in our 51.8%-owned subsidiary, Interlink Petroleum Limited.

Marking Growth with Our Board

To spearhead our growth plans, the Group is pleased to welcome Mr Lien Jown Jing Vincent, a respected veteran in the financial industry as Loyz’s Non-Executive Chairman. Mr Lien brings with him more than two decades of experience in banking and other areas, with particular expertise in corporate finance and capital management as well as intimate knowledge

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LETTER TOSHAREHOLDERS

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of markets in Hong Kong, the People’s Republic of China and across South-east Asia. Mr Lien has been working closely with our management team since November 2013.

We would also like to welcome Mr Simon Lockett, a renowned upstream energy industry veteran, who joined us recently as an adviser to the board of directors (Board) of Loyz. Previously the chief executive officer of Premier Oil Plc (Premier), a leading oil and gas exploration and production company listed on the London Stock Exchange, Mr Lockett was instrumental in boosting Premier’s production, reserves and resources as well as operating cash flows during his tenure. With his extensive experience and network in the industry, we believe Mr Lockett’s contribution as an adviser will be invaluable as we chart our next development phase.

Acknowledgments and Appreciation

On behalf of the Board, I would like to thank Mr Sim Siang Choon, who retired as Chairman and Non-Executive Director of the Group, as well as Mr Kwan Weng Kwong, who stepped down as Non-Executive Director of Loyz, for their unwavering devotion and invaluable contributions to the Group.

I would also like to take this opportunity to commend our management and staff for their dedication and commitment to the Group.

To our shareholders and business partners, thank you for your long-standing faith in our ability to deliver growth and become an established oil and gas producer. I look forward to your continued support in the current financial year as the Group progresses to achieve its next mark.

Mr Adrian LeeManaging Director

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Even as we take steps to ramp

up production and improve

cashflows, we will also continue

to review our concessions

portfolio to ensure the best use

of our resources.

“”

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GROWING RETURNS

Having reaped returns from maiden sales of crude oil at our Thailand concessions, we will ramp up production there and add new strategic producing assets to grow our recurrent income.

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July • Acquired 60% interest comprising 1,200 ordinary shares in Zenith Oil and Gas Limited (Zenith) from Leo Energy Ltd.

• Alloted and issued 15,000,000 shares to Venstar Investments Ltd and Venstar Investments II Ltd at S$0.40 per share.

August • Appointed Canaccord Genuity Singapore Pte. Ltd. as Loyz’s new continuing sponsor.

• Drilled and cased two wells in North Dakota; conducting flow testing on the wells. Spuds first well in Colorado.

September • Inked a US$5 million revolving loan facility with The Hongkong and Shanghai Banking Corporation Limited.

October • Completed a S$17.5 million private placement of 50,000,000 shares in the capital of the Company at S$0.35 per share.

• Drawn first oil in North Dakota and Colorado during the first leg of a well-drilling campaign under the landmark participation-and-exploration agreement that Loyz inked with Fram Exploration ASA (Fram) in 2012.

November • Appointed Mr Lien Jown Jing Vincent, a respected veteran of the financial industry, as Loyz’s new Non-Executive Chairman. At the same time, Mr Sim Siang Choon retired as Chairman and Non-Executive Director and Mr Kwan Weng Kwong stepped down as Non-Executive Director of the Group.

• Received approval from the government of New Zealand to delay the drilling of an appraisal well under the Petroleum Exploration Permit No. 38479.

December • First oil drilling revenue from the Group’s US asset in North Dakota which reaches a stable early production rate of 50-60 barrels of oil per day (bopd).

CORPORATE CALENDAR

February • Completed the purchase of a 49% interest in Loyz Rex Drilling Services, LLC from Rex US Ventures LLC for US$4.5 million.

• Incorporated a wholly-owned subsidiary, Loyz Oil Thailand Pte. Ltd., in Singapore.

April • Incorporated a wholly-owned subsidiary, Loyz Oil Malaysia Sdn Bhd, in Malaysia.

• Completed the US$65 million acquisition of three onshore oil-producing concessions in Thailand’s Phetchabun Basin (SW1, L44/43 and L33/43), which are producing at a combined rate of around 3,000 bopd; the Group gained a 20% interest in the three onshore concessions.

May • Acquired the remaining 40% interest comprising 800 shares in Zenith from Leo Energy Ltd; Zenith became a wholly-owned subsidiary of Loyz.

June • Renamed the Group’s wholly-owned subsidiary, Zenith to Loyz Oil HK Limited.

• Entered into a binding memorandum of understanding with Enso Oil & Gas Limited (Enso), a Hong Kong-based oil and gas company, in relation to Enso’s proposed investment in the Group’s 51.8%-owned Interlink Petroleum Limited (IPL) and the recommendation of suitable exploration and production assets in the Irkutsk region of Russia.

• Completed the acquisition of 20% of the issued and paid-up share capital of Fram.

August • Received shareholders’ approval for (1) the issue of 22,222,222 free and detachable warrants to OCBC in two tranches – the first tranche of 11,111,111 warrants is exercisable from 30 April 2015, and the second tranche of 11,111,111 warrants, from 30 April 2016, with each warrant carrying the right to subscribe for 1 fully paid new share at an exercise price of S$0.45 per new share; and (2) the allotment and issuance of up to 50,000,000 new shares in the capital of Loyz to Jit Sun Investments Pte Ltd at an issue price of S$0.30 per new share, for full or partial repayment of the S$15 million convertible loan.

• Appointed Mr Simon Lockett, an upstream energy industry veteran, as non-executive adviser to the board of directors of Loyz.

2013 2014

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Overview of FY2014

The financial year ended 30 June 2014 (FY2014) represented yet another crucial juncture for Loyz Energy Limited as our efforts to ramp up oil production saw a breakthrough that significantly improved our fourth quarter earnings.

Our perseverance and diligence in delivering favourable returns also gained us strong support from institutional and high net worth investors as well as financial institutions. Based on the progress made in FY2014, we believe we are on the right track to achieve accelerated growth, advancing our efforts to become a reputable upstream energy company in the Asia-Pacific.

Revenue, EBITDAX

The Group ended FY2014 on a high note as it stepped into the black in the fourth quarter (4Q FY2014) with S$5.8 million in EBITDAX (earnings before interest, taxation, depreciation, amortisation and exploratory expenses) and S$0.8 million in net profit attributable to owners of the parent, after having generated revenue of S$8.6 million.

This performance was driven mainly by maiden sales of 75,281 barrels of crude oil (3 months sales) from the Group’s 20% share of the three concessions in Thailand, which were acquired in April 2014. This strong contribution enabled Loyz to achieve S$3.7 million in net cash generated from operating activities for 4Q FY2014, against S$0.3 million previously.

For FY2014, the Group reported revenue of S$20.7 million, far outpacing the S$1.3 million seen in FY2013. The surge in revenue was due mainly to the sale of crude oil from Loyz’s Thailand concessions and drilling revenue from the United States. However, higher administrative and other expenses arising from the expansion of Loyz’s operations eroded overall profitability. As a result, the Group posted a net loss attributable to owners of the parent of S$4.7 million for FY2014.

75,281 Barrels of crude oil

S$20.7m Revenue

S$3.7m Net cash generated

from operating activities for 4Q FY2014

OPERATIONS REVIEW

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Balance Sheet

The Group continues to seek out assets that will enhance its portfolio by generating a steady earnings stream and driving long-term growth. In line with this strategy, we invested US$65 million to take up a 20% stake in our first producing concessions, located in Thailand, in April 2014. The striking results achieved in 4Q FY2014 demonstrate the acuity of this move.

For FY2014, the Group’s total assets doubled to S$250.6 million, thanks to the three Thailand concessions – SW1, L44/43 and L33/43 – as well as its recent investment in Fram Exploration ASA (Fram), which owns concessions in the resource-rich plains of Colorado and North Dakota, US.

The Group ended the year with shareholders’ funds of S$86.1 million, an increase of 23% over the S$69.9 million in net equity posted as at 30 June 2013.

Support from Investors and Financial Institutions

As we continued to pursue our goal of becoming a compelling player in the exploration and production (E&P) segment, our efforts were bolstered by the extensive investor support we received. The issue of 50 million new ordinary shares in FY2014 was mainly taken up by institutional and high net worth investors, which raised net proceeds of S$17.5 million.

Staunch support from the banks was also pivotal to our expansion plans. As at 30 June 2014, the Group’s total bank borrowings stood at S$71.2 million, a substantial portion of which was used to finance the acquisition of the Thailand concessions.

20% Stake in first producing concessions in Thailand

S$250.6m Total assets

S$86.1m Shareholders’ funds

OPERATIONS REVIEW

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Concessions Update – Thailand, US and India

We are very encouraged by the quality and output of our oil-producing concessions in Thailand, the key earnings driver for the Group in FY2014. From an initial production rate of approximately 1,200 -1,400 barrels of oil per day (bopd), the three concessions are currently producing at approximately 4,400 bopd (100% share). Barring any unforeseen circumstances, based on the field development plans of the operators, ECO Orient Energy (Thailand) Ltd and ECO Orient Resources (Thailand) Ltd, we expect the production rate to increase to approximately 5,000 bopd within the next few months. The fields will be further developed to ramp up production over the next few years as more wells are drilled and completed.

After reviewing ways to utilise its resources more effectively, the Group entered into two separate agreements for its Indian and US concessions.

For India, Loyz signed a binding memorandum of understanding (MOU) with Enso Oil & Gas Limited in June 2014 in relation to Enso’s proposal to invest in the Group’s 51.8%-owned subsidiary, Interlink Petroleum Limited (IPL). Enso, a Hong Kong-based oil and gas (O&G) company, will in turn recommend suitable E&P assets for IPL to acquire in the Irkutsk region of Russia. IPL currently owns two onshore O&G concessions in Gujarat.

For the US, the Group acquired a 20% stake in Fram for US$41.4 million pursuant to which, Loyz terminated its previous participation-and-exploration agreement (2012) with Fram. As a shareholder of Fram, Loyz is better able to align its interests with Fram’s and exploit opportunities to share expertise and resources.

Marking Growth

Our next phase of growth promises to be an exciting one, as we continue to develop existing assets and add strategic producing assets in stable fiscal regimes that will take us ever closer to the goals we have set.

4,400 Barrels of oil per day

from 1,200 - 1,400

20%Stake in Fram

OPERATIONS REVIEW

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GROWING PORTFOLIO

Today, we own assets in Asia, the US and Australasia. We plan to further

grow our portfolio by acquiring more yield accretive producing

assets from countries with favourable fiscal regimes, which will contain the political risk to our earnings stream,

with our focus locked on Asia-Pacific.

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CONCESSION OVERVIEW

Co

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Thailand – Phetchabun Basin

India – Cambay Basin

North Dakota – Williston Basin

Colorado

The Philippines – Area 14

Australia – Torquay Sub-basin

New Zealand – Taranaki Basin

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CONCESSION OVERVIEW

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US – Colorado & North Dakota

Loyz now owns a 20% interest in Fram Exploration ASA (Fram), whose exploration and production concessions are located in the resource-rich plains of Colorado and North Dakota, US.

The Group achieved first oil production in the US at the end of 2013, with the Schlak 3 well located in North Dakota’s Williston Basin reaching a stable early production of 50-60 bopd. Two exploration wells have since been drilled in Williston Basin, one of which was identified as a potential producer. At Colorado’s Whitewater area, testing work is still ongoing in the Mansur 33-1-N and Mansur 33-1-L wells.

Thailand – Phetchabun Basin

The Phetchabun Basin is a highly prolific onshore basin located about 300km north of Bangkok, Thailand. Loyz holds a 20% interest each in three producing concessions – SW1, L44/43 and L33/43, which lie within the basin.

The Group, together with its partners, Carnavon Thailand Limited, a subsidiary of an ASX-listed exploration and production company, as well as ECO Orient Energy (Thailand) Ltd and ECO Orient Resources (Thailand) Ltd, have put in place a drilling programme for 15 wells for these concessions.

Loyz expects five to several new wells to be drilled in the coming months which should significantly increase daily production. Approximately half of the planned wells will be drilled at the L33/43 concession, based on the interpretation of the latest 3D seismic data gathered. The remaining wells will be drilled at the neighbouring L44/43 concession using the existing 3D seismic data. New 3D seismic data with respect to the L44/43 concession will also be acquired in late 2014.

Currently, these concessions are producing at a combined rate of around 4,400 barrels of oil per day (bopd). Barring any unforeseen circumstances, the Group expects production to rise to 5,000 bopd within the next few months.

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oncessio

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New Zealand – Taranaki Basin

Loyz owns 100% interest in PEP 38479, a 411 sq km area within the Awakino section of the basin located at New Zealand’s North Island.

Through the ongoing interpretation of new and reprocessed 3D seismic data covering an area of about 300 sq km, the Group has been able to identify several potential drilling locations in FY2014. A detailed study including cost estimate for the drilling of a well in 2015 has been completed and the Group has commenced the work programme for the well.

The Philippines – Area 14

Loyz won the bid for Area 14, located in East Palawan Basin off the shores of the Philippines in 2013. Upon receiving the final and formal award for this concession, the Group will work with the authorities to finalise and execute the petroleum service contract for Area 14.

Currently, no QPR has been prepared for this concession as it is in early stage of exploration.

India – Cambay Basin

The Group owns two onshore Indian concessions through its Bombay-listed subsidiary, Interlink Petroleum Limited (IPL). The 51.8%-owned subsidiary has production-sharing contracts with the Indian government for both the Baola and Modhera fields, where tests are still being carried out to identify prospective oil and gas properties. These fields are located in the highly prospective Cambay Basin of Gujarat state.

Australia – Torquay Sub-Basin

The Group holds a 70% working interest in VIC/P62, a petroleum exploration permit (PEP) which allows it to explore off the coast of Victoria.

During the year, Loyz completed the processing and interpretation of the 3D seismic data covering an area of 245 sq km. As a result, additional working interest was earned under the farm-in agreement with Trident Energy Limited. The Group applied to the Australian authorities for a five-year extension to the permit so that it can conduct further geological and geophysical studies and drill a well by end of 2017.

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SUSTAINABILITY REPORT

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As a young and growing upstream energy company, Loyz is continually reviewing and improving its corporate sustainability policies to protect the environment and our people, as well as contributing back to the societies within the areas of its operations. Our Group’s Health, Safety and Environmental Policies are as follows:

Health & Safety Policy:

We commit to providing a safe work place, preventing injuries, and protecting of our assets through the following:

• Ensure health and safety practices are communicated and implemented across all areas of our operations and offices.

• Educate and train staff and subcontractors on hazard identification, mitigation, and safe working practices as detailed in our corporate guidelines.

• Provide the tools and resources to our staff and subcontractors to augment our policies and procedures.

• Ensure our staff and subcontractors understand and accept they have an individual responsibility for their own safety and the safety of others.

• Commitment by our senior management to promote the safety culture from the top down.

• Ensure tracking, monitoring, and reviewing of our safety performance

• Ensure health and safety compliance with applicable legal and other regulatory requirements.

• Annual review of our policies to capture industry and corporate changes.

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SUSTAINABILITY REPORT

Environmental Policy:

We endeavor to reduce and lessen our corporate impact on the environment through the following:

• Conducting an Environmental Impact Assessment (EIA) prior to commencement of any development activity.

• Assessing energy efficiency at every level of our operations, with the objective of minimizing energy consumption and emissions of greenhouse gases.

• Ensure tracking, monitoring, and review of our environmental impact.

• Implementation of a strict asset maintenance regime to eliminate spills and other contamination.

• Educate and train our staff and subcontractors on our environmental policy and goals.

• Meet or exceed the required environmental or regulatory legislation during our operational and development activities.

• Implementation of office recycling, repurposing, and upcycling.

• Support creative design concepts for our development activities that utilize alternate fuels, reduce flaring, and minimize facility size.

During the year, Loyz kicked off the drilling programme for our asset located within the Awakino section of the Taranaki Basin in New Zealand's North Island. From the start of this programme, we took time and effort to educate the local community about our business, safety practices, and environmental initiatives which aim to minimise the impact of our operations on the surroundings. We have also been engaging the community and the relevant conservation authorities in constructive discussions and have established a good and open working relationship with them. This is an example of Loyz’s commitment to engage in sustainable development in all jurisdictions we operate in.

At Loyz, we believe that a successful corporation is founded not only on its business achievements, but also on the role it plays in the community and in conserving the environment. Moving forward, we will work towards securing certification and accreditation of certain components of our sustainability polices such as i) the health and safety of our employees, ii) the protection of our stakeholders and iii) the protection of the environment as well as achieving ISO and OHAS certification for our Group.

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FINANCIALHIGHLIGHTS

Financial Hig

hlights

Income Statement (S$’000)4QFY2014

(Apr-Jun’14)4QFY2013

(Apr-Jun’13)FY2014

(Jul’13-Jun’14)FY2013

(Jul’12-Jun’13)

Revenue 8,580 1,267 20,711 1,267

Gross profit 6,360 1,267 4,344 1,267

Net profit/(loss) 737 (1,293) (4,741) (2,662)

Balance Sheet (S$’000)As at 30 June 2014 As at 30 June 2013

Non-current assets(3) 233,679 111,798

Current assets 16,896 9,830

Non-current liabilities 95,443 27,912

Current liabilities 65,872 20,609

Equity attributable to owners of the parent 86,083 69,916

NAV per share (S¢) 20.93 20.95

Notes:The summary financial statements represented reflect the continuing operations of the oil and gas business. The discontinued operations comprised the sanitary hardware business held under Sim Siang Choon Hardware (S) Pte Ltd, was divested on 31 March 2013. (1) Earnings before interest, taxation, depreciation, amortisation and exploratory expenses.(2) Computed based on profit/(loss) after taxation over weighted average number of shares.(3) Included oil and gas properties, exploration, evaluation and development assets as well as intangible assets (FY2014: S$176.5m; FY2013:

S$72.9m)

Revenue

S$8.6m[4QFY2013: S$1.3m]

Net working interest production

75,281barrels[4QFY2013: Nil]

Earnings per share(2)

S¢0.20[4QFY2013: (S¢0.39)]

EBITDAX(1)

S$5.8m[4QFY2013: S$0.2m]

Net cashflow from operations

S$3.7m[4QFY2013: S$0.3m]

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Mr Lien Jown Jing VincentNon-Executive Chairman & Independent Director

Mr Lien joined the Board in November 2013. A veteran of the financial industry, he has more than two decades of experience in banking and other areas, with particular expertise in corporate finance and capital management as well as intimate knowledge of markets in Hong Kong, the People’s Republic of China and across South-east Asia.

Currently, Mr Lien is also a director at various oil and gas (O&G) and energy companies, including UP Energy Development Group Limited (listed on the mainboard of Hong Kong Exchanges & Clearing), an international energy investment group and Primeline Energy Holdings Inc. (an upstream O&G company listed on Canada’s TSX Venture Exchange).

Previously, he served as an advisory board member of Yorkville Advisors LLP in the US and was the managing director of ABN AMRO Bank for Southeast Asia from 2007 to 2008. Mr Lien has a bachelor in business administration from the University of New Brunswick in Canada.

Mr Lee Chye Cheng AdrianManaging Director

Appointed in May 2011, Mr Lee is in charge of the Group’s overall business. His rich multidisciplinary experience in the corporate sector has been garnered from industries that span energy, financial services, property and hospitality. He serves on the board of other listed companies such as Interlink Petroleum Limited, Select Group Limited and Raimon Land Plc. Mr Lee holds a bachelor in finance from the University of Strathclyde, Glasgow.

Mr Chan Eng YewNon-Executive Director

Mr Chan joined the Board in July 2011. He is currently the chief executive officer of TRIYARDS Holdings Limited, which provides offshore vessel fabrication and engineering solutions for the O&G industry. With more than eight years of experience in commercial and corporate banking, he spearheaded the public listing of his previous employer, EOC Ltd, in Oslo, while helming the company as its chief financial officer. He also assisted in the listing of EOC’s parent company, Ezra Holdings Limited, in Singapore. Previously, he had held senior management positions at United Overseas Bank. Mr Chan holds a master in business administration from the University of Louisville in Kentucky, a master in applied finance from Macquarie University in Australia and a bachelor in commerce (banking & finance) from Murdoch University in Australia.

BOARD OFDIRECTORS

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Mr Teo Choon Kow @ William TeoIndependent Director

Mr Teo was appointed to the Board in July 2008. Between 1996 and 2004, he was vice-president of Walden International Investment Group, a venture capital firm based in Silicon Valley, and was responsible for its investments in Asia. Previously, he had served with Coopers & Lybrand as senior manager in its corporate finance department. He had also worked in the risk management, internal audit and loan departments of leading local banks.

Mr Teo is also an independent director of See Hup Seng Holdings Ltd, PSL Holdings Ltd and Wee Hur Holdings Ltd, as well as a director of Fral Pte Ltd and Ascendant Technologies Pte Ltd. He has a master in management from the Asian Institute of Management in the Philippines. He is a Fellow of the Association of Chartered Certified Accountants and a Member of the Institute of Singapore Chartered Accountants.

Mr Chia Yong WhattIndependent Director

Mr Chia is the Independent Director and was appointed to the Board in 2008. He has more than 23 years of legal experience both as an advocate and solicitor and as corporate counsel. He is currently GM-Legal at the Singapore offices of Mermaid Marine Australia Limited - a leading marine services company listed on the Australian Stock Exchange; which operates a range of modern offshore vessels providing marine solutions, supply bases, shipyards and ship repair facilities as well as specialist marine logistics solutions to the offshore oil and gas industry.

Mr Chia has considerable experience in contracts, corporate and cross-border transactions, dispute resolution, regulatory compliance, construction and real estate. He holds a Bachelor of Laws (Honours) from the National University of Singapore.”

Mr Simon LockettNon-Executive Adviser to the Board of Directors

Mr Lockett was appointed as an adviser to the Board of Loyz in August 2014. He recently stepped down as chief executive officer of Premier Oil Plc (Premier), a leading O&G exploration and production company listed on the London Stock Exchange. He joined Premier in 1994 and became chief executive officer in 2005. Whilst in charge, Mr Lockett was able to significantly boost production, which grew from 37 thousand barrels of oil equivalent per day (mboepd) in 2004 to 58.2 mboepd in 2013. Proven and probable reserves and contingent resources have grown from 210 million barrels of oil equivalents (mmboe) to 773 mmboe, while operating cashflows have risen by 580%, from £119 million in 2005 to £808 million in 2012. During this period, Premier’s share price increased by more than 140%, outperforming the FTSE 250 Index. Mr Lockett holds a master in business administration from the Manchester Business School, United Kingdom.

BOARD OFDIRECTORS

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Dr Bruce MorrisChief Technical Officer Vice President Subsurface

Dr Morris joined the Group in July 2011. As both a field- and office-based geologist, geophysicist and exploration manager, he has amassed more than 20 years of professional exploration experience across the globe, including in New Zealand, Australia, Papua New Guinea, China, Thailand, India, Cuba and the Antarctica. At Loyz, he utilises his wide-ranging technical expertise and network of contacts to generate prospects and evaluate new opportunities.

He earned his PhD in geology and geochemistry from Victoria University of Wellington in New Zealand, where he later lectured in geology. He served at New Zealand Oil & Gas, Indo-Pacific Energy (now Austral Pacific Energy) and Pacific Tiger Energy as a geologist and geophysicist before setting up his own business as an oil exploration consultant.

He has been a member of the American Association of Petroleum Geologists for 30 years and is a member of the South East Asia Petroleum Exploration Society (Seapex) as well.

Mr Jeffrey PangChief Financial Officer Vice President Finance

Mr Pang joined the Group in July 2011, and he is in charge of the Group’s finance, accounting, tax, compliance and reporting matters. Before joining Loyz, he was financial controller of a private investment group involved in sectors such as O&G, property and food & beverages. He also held a senior finance role at an automotive group and served as an external auditor at Deloitte & Touche LLP. Mr Pang, who has more than a decade of audit and commercial experience, is a Fellow of the Association of Chartered Certified Accountants and a member of the Institute of Singapore Chartered Accountants.

Mr Stephane BigardBusiness Development Director Vice President New Ventures

Mr Bigard, who joined Loyz in January 2014, has been tasked with identifying new market opportunities or partnerships, and growing the Group’s portfolio in line with the Company’s strategy. He brings with him 14 years of experience in the upstream industry, garnered in areas as diverse as engineering, operations, project management, finance and new business. While serving as a project manager at Hess Corporation in Malaysia from 2010 to 2013, he played a key role in developing its long-term position there.

Mr Bigard started his career with Total S.A. as a process and field production engineer, and later managed a deep offshore development in Africa before becoming a petroleum analyst in Paris. He earned a master in science (petroleum engineering and project development) at the IFP School in Paris and a multidisciplinary engineering degree specialising in chemicals at the École Centrale.

Mr Andre KingBusiness Development Director Vice President Operations

Since joining the Group in February 2014, Mr King has been involved with identifying new market opportunities or partnerships within the US and Southeast Asia. Recently he has been re-designated to the position of Vice President of Operations to manage the Group’s petroleum assets. During his 18 years in the O&G industry, he has played a key role in the successful execution of a broad range of onshore and offshore projects around the world, skilfully managing many governed by production-sharing arrangements. He is well-versed in handling commercial negotiations and working with regulators to expedite project delivery.

At Hess Corporation, where he spent seven years, Mr King served as offshore installation/hook-up manager at one of its Indonesian facilities before moving to Malaysia to become conversion manager for its gas processing Floating Production, Storage and Offloading (FPSO) project. He holds degrees in mechanical engineering from Texas A&M University.

MANAGEMENT TEAM

Manag

ement Team

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Board of Directors

Lien Jown Jing Vincent

Lee Chye Cheng Adrian

Chan Eng Yew (Zeng Rongyao)

Teo Choon Kow @ William Teo

Chia Yong Whatt

Secretary

Yap Peck Khim

Registered Office

15 Hoe Chiang Road #19-01 Tower FifteenSingapore 089316Tel: (65) 6521 9048Fax: (65) 6225 4945Website: www.loyzenergy.com

Share Registrar

M & C Services Private Limited112 Robinson Road #05-01Singapore 068902Tel: (65) 6228 0505Fax: (65) 6225 1452

CORPORATEINFORMATION

Auditors

BDO LLPPublic Accountants andChartered Accountants21 Merchant Road#05-01Singapore 058267

Partner-In-Charge

Leong Hon Mun Peter(Appointed since the financial year ended 30 June 2010)

Continuing Sponsor

Canaccord Genuity Singapore Pte. Ltd.77 Robinson Road#21-02Singapore 068896

Principal Bankers

Development Bank of Singapore

Oversea-Chinese Banking Corporation Limited

The Hongkong and Shanghai Banking Corporation Limited

Co

rpo

rate Inform

ation

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Loyz’s Reserves and Resources as at 30 June 2014:

CategoryGross Attributable to Licences Net Attributable to Loyz Remarks

(MMbbl/Bcf) (MMbbl/Bcf)

Reserves

Oil

1P 22.85 3.99 Thailand and US

2P 50.00 9.22

3P 108.99 20.80

Natural Gas

1P – – –

2P – – –

3P – – –

Natural Gas Liquids

1P – – –

2P – – –

3P – – –

Contingent Resources*

Oil

1C 0.76 0.13 US, NZ and India (excluding Baola)

2C 2.37 0.38

3C 5.38 0.76

Natural Gas

1C 9.00 0.90 NZ

2C 26.00 2.60

3C 57.00 5.70

Natural Gas

1P – – –

2P – – –

3P – – –

Prospective Resources

Oil

Low Estimate 7.30 5.00 NZ and India

Best Estimate 40.00 27.70

High Estimate 95.00 63.70

Natural Gas

Low Estimate 136.20 98.10 Australia, NZ and India

Best Estimate 1,019.50 730.90

High Estimate 2,254.90 1,614.30

* Contingent resources for Baola are awaiting Indian government approval and are not included in this table

Legend: 1P: Proved 2P: Proved + Probable 3P: Proved + Probable + Possible MMbl: Millions of barrels Bcf: Billions of cubic feet

QUALIFIED PERSON'SREPORTS

Qualified

Person’s R

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FINANCIAL CONTENT22 Corporate Governance Statement

34 Report Of The Directors

41 Statement By Directors

42 Independent Auditors’ Report to the Members of Loyz Energy Limited

43 Statements of Financial Position

45 Consolidated Statement of Comprehensive Income

47 Statements of Changes In Equity

50 Consolidated Statement of Cash Flows

52 Notes to the Financial Statements

Shareholdings Statistics

Notice of Annual General Meeting

Proxy Form

Please refer to the CD for further details on exploration and mining development in relation to the Philippines, India, Australia, New Zealand, US and Thailand oil and gas assets. The attached CD contains the following documents:

1. Qualified person’s report dated 30 September 2013

2. Appendix I – independent qualified person’s report prepared by Roger Adams Petroleum Consultants for the oil and gas assets in India, New Zealand, Australia and the Philippines, which report is dated 30 September 2014

3. Appendix II – independent qualified person’s report prepared by Chapman Petroleum Engineering Ltd for the oil and gas assets in Thailand, which report is dated 1 January 2014

Loyz has also made reference to the independent qualified person’s report prepared by OPK Resources GmbH for the oil and gas assets in the US, which report is dated 31 August 2013. The independent qualified person’s report was issued as part of the offer document for Rex International Holdings Ltd dated 22 July 2013 pursuant to its initial public offering of shares and is available at the SGX website.

QUALIFIED PERSON’SREPORTS

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FINANCIAL CONTENT22 Corporate Governance Statement

34 Report Of The Directors

41 Statement By Directors

42 Independent Auditors’ Report to the Members of Loyz Energy Limited

43 Statements of Financial Position

45 Consolidated Statement of Comprehensive Income

47 Statements of Changes In Equity

50 Consolidated Statement of Cash Flows

52 Notes to the Financial Statements

117 Shareholdings Statistics

119 Notice of Annual General Meeting

Proxy Form

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The Company is committed to ensure high standards of corporate governance for the protection of shareholders’ interests and to promote investors confidence. The board of directors of the Company (“Board”) confirms that for the financial year ended 30 June 2014 (“FY2014”), the Company has, as far as practicable, generally adhered towards the compliance of the recommendations in the Code of Corporate Governance 2012 (“CG Code”).

This report outlines corporate governance practices adopted by the Company.

BOARD MATTERS

Principle 1: Board’s Conduct of its Affairs

Apart from the statutory duties, the Board’s responsibilities include the following:

• Settingoverallbusinessdirectionandprovideguidanceoncorporatestrategicplans.• Monitoringfinancialperformanceincludingreviewandapprovalofinterimandannualfinancialreport.• ReviewingtheadequacyandintegrityoftheCompany’sinternalcontrols,riskmanagementsystems,financialreporting

systemsandmonitoringtheperformanceoftheGroupandtheCompany’smanagement(“Management”).• Monitoringandapprovingmajorfunding,investment,acquisitions,disposalsanddivestmentproposals.• Reviewinginterestedpersontransactions.

TheBoardissupportedbytheauditcommittee(“AC”),thenominatingcommittee(“NC”),theremunerationcommittee(“RC”)andtheriskmanagementcommittee(“RMC”).ThemembersaredrawnfromthemembersoftheBoardandeachoftheseBoard committees (“Board Committees”) operates under the delegated authority from the Board.

The Board meets regularly and whenever deemed necessary and appropriate. Telephonic attendance is allowed under the Company’s articles of association (“Articles”). The attendance of each director of the Company (“Director”) at every Board and Board Committee meetings held during FY2014 is set out below:

Board of Directors

Audit Committee

Nominating Committee

Remuneration Committee

Risk Management Committee

No. of meetings held: 4 4 1 1 1

Attendance:

Lien Jown Jing Vincent(1) 3 2 – – –

Lee Chye Cheng, Adrian 4 – 1 – –

Teo Choon Kow @ William Teo 4 4 1 1 1

Chia Yong Whatt 3 3 1 1 1

ChanEngYew(ZengRongyao) 4 4 – 1 1

SimSiangChoon(2) 1 – – – –

Kwan Weng Kwong(3) 2 – – – –

Notes:

(1) Lien Jown Jing Vincent was appointed as a Director and Chairman of the Board on 6 November 2013. He was appointed asamemberoftheAC,theNCandtheRCon14November2013.

(2) SimSiangChoonresignedasaDirectoron6November2013.(3) Kwan Weng Kwong resigned as a Director on 20 November 2013.

The Company does not have a formal training programme for its Directors. All Directors are updated on an on-going basis by way of circulars or via Board and Board Committee meetings on matters relating to the changes to relevant laws, regulations and accounting standards so as to enable them to properly discharge their duties as Board or Board Committee members.

Allmaterial transactions require theBoard’sapproval.Material transactionsarethosewhichdonotordinarily fallwithin thenormal day-to-day operations of the Company.

CORPORATE GOVERNANCE STATEMENT

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AllDirectors are required todisclose their interests in theCompany including any interestedperson transactionswith theCompany.

Principle 2: Board Composition and Balance

The Board comprises the following members:

Lien Jown Jing Vincent Chairman and Independent DirectorLeeChyeCheng,Adrian ManagingDirectorTeo Choon Kow @ William Teo Independent Director Chia Yong Whatt Independent DirectorChanEngYew(ZengRongyao) Non-ExecutiveDirector

The Company endeavors to maintain a strong and independent element on the Board with the Independent Directors who makesupmorethanone-thirdoftheBoard.

MembershipontheBoardandBoardCommitteesarecarefullyconstitutedtoensureequitabledistributionofresponsibilitiesandappropriatecombinationofskillsandexperience,aswellasbalanceofpowerandindependence.

The NC reviews the size and composition of the Board and Board Committees on an annual basis. The Board is of the view that thecurrentBoardsizeisappropriateandsufficientforeffectivedecision-making.TakingintoaccountthecurrentscopeandnatureoftheoperationsoftheGroup,theBoardhastheappropriaterequisitemixofexpertiseandexperience,andcollectivelypossessesthenecessarycorecompetenciesforeffectivefunctioningandinformeddecision-making.EachDirectorhasbeenappointedbasedonthestrengthofhiscaliber,experienceandstatureandisexpectedtobringavaluablerangeofexperienceandexpertisetocontributetothedevelopmentoftheGroup’sstrategiesandtheperformanceofitsbusiness.

The NC is of the view that the Independent Directors are independent. The Independent Directors have confirmed that they do not have any relationship with the Company, its related corporations, its 10% shareholders or its officers that could interfere, orbereasonablyperceivedtointerfere,withtheexerciseofthedirector’sindependentbusinessjudgmentwithaviewtothebest interests of the Company.

Principle3:ChairmanandChiefExecutiveOfficer

TheChairmanisMrLienJownJingVincentwhoisanIndependentDirector.MrLienis,amongstotherthings,responsibleforleadingtheBoardtoensureitseffectivenessonallaspectsofitsrole,ensurethatadequatetimeisavailablefordiscussionforall agenda items and promote a culture of openness and debate at the Board.

TheManagingDirectorisMrLeeChyeCheng,Adrianwhoisresponsiblefortheday-to-dayoperationsoftheGroupaswellastheexerciseofcontroloverthequality,quantityandtimelinessofinformationflowbetweentheBoardandtheManagement.

TheAC reviews allmajordecisionsmadeby theChairmanand theManagingDirector. TheBoardbelieves that there areadequate safeguards against an uneven concentration of power and authority in a single individual and that there is anappropriate balance of power within the Board.

Principle4:BoardMembership

TheNCcomprisesthreeIndependentDirectorsandoneExecutiveDirectorasfollows:

Teo Choon Kow @ William Teo (Chairman)Lien Jown Jing VincentChia Yong WhattLee Chye Cheng, Adrian


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The Chairman of the NC is an Independent Director. The NC is established for the purpose of ensuring that there is a formal and transparent process for all Board appointments. It has adopted written terms of reference defining its membership, administrationandduties.TheNCreviewsandmakesrecommendationsonallnominationsforappointmentstotheBoardandon all re-nomination/re-election. The NC met once during FY2014. All Board members attended the meeting and the Company Secretarywaspresentatthemeetingtorecordtheproceedings.

Candidates will be considered and evaluated by the NC, inter-alia, the competency, time commitment and experience inmeeting the needs of the Company. The NC will then recommend the candidates to be approved and appointed by the Board. TheCompanySecretarywillensurethatallappointmentsareproperlymadeandregulatoryobligationsaremet.

All the Directors had declared their board representations. When a Director has multiple board representation, the NC will considerwhether theDirector isable toadequatelycarryouthis/herdutiesasaDirectorof theCompany, taking intoconsideration the Director’s number of listed company board representations and other principal commitments. The Board doesnotseeanyreasontosetthemaximumnumberoflistedboardrepresentationsthataDirectormayholdasalltheDirectorsareabletodevotetotheCompany’saffairsinlightoftheircommitments.TheBoardwillreviewthemaximumnumberofboardrepresentation when the need arises.

The election of aDirector is held annually and in accordancewith theCompany’s Articles.One-third of theDirectors arerequiredtoretirefromofficeateachannualgeneralmeeting(“AGM”).Inaddition,allDirectorsarerequiredtoretirefromofficeby rotation at least once every three years.

There-electionofeachDirectorisvotedonseparateresolutionduringtheAGMoftheCompany.Toassistshareholdersintheirdecision, sufficient information such as personal profile, meeting attendance and the shareholdings of each Director standing for re-election are furnished in the annual report.

AttheforthcomingAGM,theNChadnominatedandrecommendedandtheBoardagreedthatMrChiaYongWhatt,MrChanEngYew (ZengRongyao)andMrLienJownJingVincentwill retirepursuant to theCompany’sArticles.Allof them,beingeligible for re-election, have offered themselves for re-election. Each member of the NC abstains from voting on any resolutions andmakinganyrecommendationand/orparticipatinginrespectofmattersinwhichhehasaninterest.

The NC has reviewed the independence of each Director for FY2014. The NC would review and nominate the most suitable candidate to the Board when a vacancy arises under any circumstances or where it is considered that the Board would benefit from the servicesof anewdirectorwithparticular skills.TheNC, in consultationwith theBoard,determines the selectioncriteriaandselectscandidateswiththeappropriateexpertiseandexperiencefortheposition.TheNCthennominatesthemostsuitable candidate to the Board.

PARTICULARSOFDIRECTORSPURSUANTTOTHECGCODE

Name of Director Board appointment Date of first appointment

Date of last re- appointment

Directorship/ Chairmanship in other listed companies and principal commitments (present and held over preceding 3 years)

Lien Jown Jing Vincent Non-Executive 06/11/2013 NA(1) Present:Director: Wah Hin & Company Maritime&PortAuthorityofSingapore

Non-ExecutiveDirector: UPEnergyDevelopmentGroupLimited Primeline Energy Holdings Inc

IndependentNon-ExecutiveDirector: Viva China Holdings Limited CT Environmental Group Limited

Principal commitment: Nil


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Name of Director Board appointment Date of first appointment

Date of last re- appointment

Directorship/ Chairmanship in other listed companies and principal commitments (present and held over preceding 3 years)

Lee Chye Cheng, Adrian

Executive 11/01/2011 31/10/2013(2) Present:Independent Director: SelectGroupLimited


Teo Choon Kow @ William Teo

Non-Executive 23/07/2008 30/10/2013 Present:Independent Director: SeeHupSengLimited

Wee Hur Holdings Ltd PSLHoldingsLtd


Chia Yong Whatt Non-Executive 20/08/2008 31/10/2011 Present: Nil

Past:Independent Director: ChinaCGame,Inc.(formerlyknownas

China Architectural Engineering, Inc.) (DelistedonNasdaqinApril2012)

Principal commitment: GM-LegalatSingaporeofficesofMermaidMarineAustraliaLimited

Chan Eng Yew (Zeng Rongyao)

Non-Executive 22/07/2011 31/10/2011 Present:ExecutiveDirector: Triyards Holdings Limited


Notes:

(1) LienJownJingVincentwasappointedasaDirectoron6November2013.HewillretireattheforthcomingAGMandbeing eligible, has offered himself for re-election.

(2) LeeChyeCheng,AdrianwasappointedasaManagingDirectoron31March2013andhence,willnotbesubject toretirement as a Director.

Principle 5: Board Performance

The NC is responsible for assessing the effectiveness of the Board as a whole and where appropriate, for assessing the contribution of each individual Director.

The evaluation of the Board is performed annually by having all members to complete a questionnaire individually. Theassessment parameters such as director’s attendance and participation in and outside meetings, the quality of director’sinvolution and industry andbusiness knowledgemadeby thedirectorwill enable an all roundedevaluation, covering thevarious aspects of an effective Board.

The NC considers that the multiple board representations held presently by some of the Directors do not impede their performance in carrying out their duties to the Company and in fact, enhances the performance of the Board as it broadens the experienceandknowledgeoftheBoard.


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Principle 6: Access to Information

TheBoardandBoardCommitteesarefurnishedwithadequateandaccurateinformationpriortoanymeetingsoastofacilitatethe Directors in the proper and effective discharge of their duties. Board papers are prepared for each Board and Board Committee meetings and are normally circulated in advance of each meeting. The Board papers include sufficient information fromtheManagementonfinancial,businessandcorporateissuestoenabletheDirectorstobeproperlybriefedonissuestobeconsidered at the Board and Board Committee meetings. Information about the Company and the Group are freely available toeachBoardmember.TheManagementwillsupplyanyadditionalinformationthattheBoardrequires.TheManagementandtheseniorexecutiveofficersoftheCompanyandtheGroupareinvitedbytheBoardtoattendtheBoardmeetingstopresenttheirproposalsortoansweranyquestionsthatBoardmembersmayhave.

Incarryingouttheirdutiesasdirectors,allDirectorshavefullaccesstoandmaycommunicatedirectlywiththeManagement,theCompanySecretary,the internalandexternalauditorsonallmatterswhenevertheydeemnecessary.TheManagementprovides the Directors with regular updates on the operational and financial performance of the Group, and also responds to regularquestionsfromtheBoardorindividualDirectorsinatimelymanner.

TheCompanySecretaryprovidescorporatesecretarialsupporttotheBoardandensuresadherencetoBoardproceduresandthe relevant rules and regulations which are applicable to the Company.

TheBoardmay seek independent professional advice as andwhen necessary (at theCompany’s expense) to enable it todischarge its responsibilities effectively.

REMUNERATION MATTERS

Principle7:ProceduresforDevelopingRemunerationPolicies

TheRCcomprisesthreeIndependentDirectorsandoneNon-ExecutiveDirectorasfollows:

Chia Yong Whatt (Chairman)Lien Jown Jing VincentTeo Choon Kow @ William TeoChanEngYew(ZengRongyao)

TheChairmanoftheRCisanIndependentDirector.TheRCisestablishedforthepurposeofensuringthatthereisaformalandtransparentprocedureforfixingtheremunerationpackagesoftheDirectorsandkeyexecutivesoftheCompany(“KeyExecutives”).Ithasadoptedwrittentermsofreferencedefiningitsmembership,administrationandduties.TheRCmeetswhennecessarytorecommendandadvisetheBoardontheremunerationofExecutiveDirectors,seniorexecutivesandemployeeswhoarerelatedtotheDirectors.TheRChasaccesstoexpertadviceinsideand/oroutsidetheCompany.

No Director is involved in deciding his own remuneration.

Principle8:LevelandMixofRemuneration

TheCompany’s remuneration policy is to provide compensation packages appropriate to attract, retain andmotivate theDirectorsandKeyExecutivesneededtoruntheCompanysuccessfully.

TheremunerationoftheExecutiveDirectorisbasedonhisserviceagreementforaninitialperiodofthreeyearsandthereafterforsuchperiodastheBoardmaydecide.TheBoardreviewstheremunerationpackageoftheExecutiveDirectorbasedontherecommendationoftheRC.

TheNon-ExecutiveDirectors(includingIndependentDirectors)arepaidafixeddirector’sfeefortheireffortsandtimespent,responsibilitiesandcontributiontotheBoard,subjecttoapprovalbyshareholdersattheAGM.TheRCreportstotheBoardand met once in FY2014.

AllNCmembersattendedthemeetingandtheCompanySecretarywaspresentatthemeetingtorecordtheproceedings.


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ThelongtermincentiveschemesoftheCompanyaretheLoyzEnergyPerformanceSharePlanandtheLoyzEnergyEmployeeShareOptionScheme.TheRCisresponsiblefortheadministrationoftheLoyzEnergyPerformanceSharePlanandtheLoyzEnergyEmployeeShareOptionSchemeinaccordancewiththerulesofbothschemes.Informationanddetailsoftheshareoptions and/or share awards granted are disclosed in the financial statements.

Principle9:DisclosureonRemuneration

TheCGCoderecommendsthedisclosureoftheremunerationofDirectors,ChiefExecutiveOfficer(“CEO”)andatleasttheGroup’stop5KeyExecutives(whoarenotalsoDirectorsortheCEO).

The Company is of the opinion that it is not in the best interest of the Company to disclose the total remuneration of each Directorindollarterms,giventhesensitivityofremunerationmattersandthecompetitivenessoftheindustryforkeytalent.

TheremunerationoftheDirectorsforFY2014inbandsofS$250,000isasfollows:

Remuneration bandDirectors’

feeBase salary Bonus CPF Allowance

Share options and

awards Total% % % % % % %

S$250,000 to S$499,999

Lee Chye Cheng, Adrian – 89 – 4 – 7 100

S$0 to S$249,999

Lien Jown Jing Vincent(1) 100 – – – – – 100

Teo Choon Kow @ William Teo 100 – – – – – 100

Chia Yong Whatt 100 – – – – – 100

ChanEngYew(ZengRongyao) 100 – – – – – 100

Note:

(1) Lien Jown Jing Vincent was appointed as a Director on 6 November 2013.

Top5KeyExecutives

Asstatedabove,theCGCoderecommendsthedisclosureoftheremunerationofDirectors,CEOandattheleasttheGroup’stop5KeyExecutives(whoarenotalsoDirectorsortheCEO).

The Company is of the opinion that it is not in the best interest of the Company to disclose the names of the Company’s top 5 KeyExecutivesandthetotalremunerationofeachKeyExecutiveindollarterms,giventhesensitivityofremunerationmattersandthecompetitivenessoftheindustryforkeytalent.

Theremunerationofthetop5KeyExecutivesforFY2014inbandsofS$250,000isasfollows:

Remuneration bandBase salary Bonus CPF Allowance

Share options and

awards Total% % % % % %

S$250,000 to S$499,999

No.ofexecutives:4 81 2 1 12 4 100

S$0 to S$249,999

No.ofexecutive:1 95 – 5 – – 100

ThetotalaggregateremunerationpaidtotheGroup’stop5KeyExecutivesduringFY2014wasS$1.5million.


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TheCompanydoesnothaveanyemployeewhoisanimmediatefamilymemberofaDirectorortheCEOforFY2014.

The breakdown of performance conditionswhich links to remuneration paid to the ExecutiveDirector and the top 5 KeyExecutivesarenotdisclosedinthiscorporategovernancesectionduetoconfidentiality.

ACCOUNTABILITY AND AUDIT

Principle 10: Accountability

The Board is accountable to the shareholders and always aims to present a balanced and understandable assessment of the Company’s and the Group’s financial position and prospects to shareholders on a timely basis. The Company releases the Group’soperatingperformanceandfinancialresultsonaquarterlyandfull-yearbasisandotherpricesensitiveinformationviaSGXNETinanefforttoprovideshareholderswithabalancedandaccurateassessmentoftheGroup’sperformance,financialposition and prospects.

Financial results are reviewed by the AC before it is recommended for adoption by the Board. The financial result announcement isreviewedcarefullyduringtheBoardandtheACmeetingsbeforebeingreleased.Ifrequired,theGroup’sexternalauditors’view will be sought. The Board ensures that all relevant regulatory compliances and updates will be highlighted from time to timetoensureadequatecomplianceswiththeregulatoryrequirements.

Principle11:RiskManagementandInternalControls

TheBoardacknowledgesthatitisresponsibleformaintainingasoundsystemofinternalcontrolstosafeguardshareholders’interest and maintain accountability of its assets. While no cost-effective internal control system can provide absolute assurance against loss or misstatement, the Company’s internal controls and systems have been designed to provide reasonable assurance thatassetsaresafeguarded,operationalcontrolsareinplace,businessrisksaresuitablyreduced,properaccountingrecordsaremaintained and financial information used within the business and for publication are reasonable and accurate.

During FY2014, the Company’s external and internal auditors conducted their annual review of the effectiveness of theCompany’s material internal controls, including financial, operational, compliance and information technology controls as well asriskmanagementpolicyandthesewerereportedtotheAC.TheAC,onbehalfoftheBoard,alsoreviewedtheeffectivenessoftheGroup’ssystemofinternalcontrolsinlightofkeybusinessandfinancialrisksaffectingitsbusiness.

BasedontheinternalcontrolsestablishedandmaintainedbytheGroup,workperformedbytheinternalandexternalauditors,andreviewsperformedbytheManagement,theBoardwiththeconcurrenceoftheACaresatisfiedthattheinternalcontrolsinplaceintheGroupareadequatetoaddressrisksrelatingtofinancial,operational,complianceandinformationtechnologymatters.TheBoard,togetherwiththeACandtheManagement,willcontinuetoenhanceandimprovetheexistinginternalcontrolframeworktoidentifyandmitigatetheserisks.

TheBoardhasalsoreceivedassurancefromtheManagingDirectorandtheChiefFinancialOfficerthatthefinancialrecordshave been properly maintained and the financial statements give a true and fair view of the Group’s operations and finances, andregardingtheeffectivenessoftheGroup’sriskmanagementandinternalcontrolsystems.

TheCompanyhassetuptheRMCwhichcomprisestwoIndependentDirectorsandoneNon-ExecutiveDirectorasfollows:

Chia Yong Whatt (Chairman)Teo Choon Kow @ William TeoChanEngYew(ZengRongyao)

TheChairmanoftheRMCisanIndependentDirector.

Theoverallobjectiveof theRMC is toadvise theBoardon theGroup’soverall risk toleranceandstrategybyundertakingperiodicenvironmentalscanstogaugeanypossibleimpactontheriskprofileoftheGroup.TheRMCseekstoassisttheBoardindischargingitsresponsibilityintheriskgovernanceoftheCompany.


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Principle 12: Audit Committee

TheACcomprisesthreeIndependentDirectorsandoneNon-ExecutiveDirectorasfollows:

Teo Choon Kow @ William Teo (Chairman)Lien Jown Jing VincentChia Yong WhattChanEngYew(ZengRongyao)

Allmembersof theACareNon-ExecutiveDirectors.TheChairman,MrTeoChoonKow@WilliamTeo,MrLienJownJingVincentandMrChiaYongWhattareIndependentDirectors.MrTeoChoonKow@WilliamTeohasmanyyearsofexperienceinfinancialservices.Hepossessestheappropriateaccountingandrelatedfinancialmanagementexperienceandexpertise.MrChiaYongWhattisaqualifiedlawyerwithmanyyearsofexperienceasanadvocateandsolicitorwithsubstantialexperienceincorporatetransactions,constructionlitigationandrealestate.MrChanEngYew(ZengRongyao)hadassistedinthelistingofacompanyinSingaporeandNorway.HewasrecentlyappointedastheCEOofacompanylistedintheSingaporeExchangeSecuritiesTradingLimited(“SGX-ST”).Assuch,heisfamiliarwithcorporategovernanceanddisclosures.MrLienJownJingVincentsitsontheboardsofvarious listedcompaniesandhasmanyyearofexperience inbanking,corporatefinanceandcapital management. Therefore, the Board is of the opinion that the members of the AC have sufficient financial and corporate managementexperienceandexpertiseindischargingtheirduties.

The role of the AC is to assist the Board in discharging its responsibility to safeguard the assets of the Group, ensuring the maintenance of adequate accounting record procedures and processes and to develop andmaintain effective systems ofinternalandriskcontrols.

TheoverallobjectiveoftheACistoensurethattheManagementhascreatedandmaintainedaneffectivesystemofinternalcontrolandthattheManagementdoesnotoverridetheestablishedsystemofinternalcontrols.

The functions of the AC include:

• Reviewwiththeexternalauditorstheexternalauditplan;

• ReviewwiththeexternalauditorstheirevaluationoftheCompany’internalaccountingcontrols,andtheirreportonthefinancialstatementsandtheassistancegivenbytheCompany’sofficerstothem;

• Reviewwiththeinternalauditorsthescopeandresultsoftheinternalauditprocedures;

• ReviewthefinancialstatementsoftheGroupandtheCompanypriortotheirsubmissiontotheBoardforadoption;

• Reviewtheinterestedpersontransactions(asdefinedinChapter9oftheListingManualSectionB:RulesofCatalistoftheSGX-ST(“CatalistRules“));and

• Make recommendations to theBoardon the appointment, re-appointment and removal of the external auditor, andapprovingtheremunerationandtermsofengagementoftheexternalauditor.

Indischargingtheaboveduties,theAChasconfirmedthatithasfullaccessandco-operationfromtheManagementandwasgiven reasonable resources to enable it to perform its functions properly.

TheACmetfourtimesduringFY2014.AllACmembersattendedmostofthemeetingsandtheCompanySecretarywaspresentat most of the meetings to record the proceedings.

The AC has full authority to investigate any matter when alerted on issues of internal controls, suspected fraud or irregularity. It hasfullaccesstoandcooperationoftheManagementandfulldiscretiontoinviteanystafftoattenditsmeetings.

Statutoryaudit reviewand the implementationof theCompany’smaterial internalcontrolsare reviewedby theCompany’sexternalauditors,BDOLLP,totheextentsetoutintheirauditplan.Anymaterialnon-complianceandinternalcontrolweaknessesnotedduringtheiraudit,andtheexternalauditors’recommendationstoaddresssuchnon-complianceandweaknesses,willbereportedtotheAC.Anymaterialnon-compliancesandinternalcontrolweaknesseswillbefollowedupbytheManagementaspartoftheManagement’sroleinthereviewoftheCompany’sinternalcontrolsystems.Theexternalauditorshaveunrestrictedaccess to the AC.


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TheAChasreviewedtheoverallscopeoftheexternalauditsandmetwiththeCompany’sexternalauditorstodiscusstheresultsoftheirrespectiveexaminationsandtheirevaluationoftheCompany’ssystemofinternalaccountingcontrols.TheAChasmetwiththeexternalauditorsseparatelywithoutthepresenceoftheManagementtoreviewanyareaofauditconcern.

TheAChasalsoreviewedtheresultsoftheauditwork,thecosteffectivenessoftheauditandtheindependenceandobjectivityoftheexternalauditors.DuringFY2014,theAChasreviewedtheindependenceoftheexternalauditorsincludingthevolumeofnon-auditservicesperformedbytheexternalauditorsfortheGroupandwassatisfiedthatsuchnon-auditservicesrenderedwouldnotaffecttheindependenceoftheexternalauditors.Ananalysisoffeespaidinrespectofauditandnon-auditservicesprovidedbybreakdownforthepasttwoyearsisdisclosedinNote31tothefinancialstatements.

TheCompany’sexternalauditorsalsobriefedtheAConthechangesinthefinancialreportingstandardsthatwilltakeeffectduringthefinancialyearandalso the followingyear.Thisensures that theAC iskeptabreastwith thechanges infinancialreporting standards which have a direct impact on the Group’s financial statements.

TheGrouphasappointedtheaffiliatedfirmsofitsexternalauditors,BDOLLP,tobetheauditorsforitsoverseassubsidiaries.The Board and the AC are satisfied that the appointment would not compromise the standard and effectiveness of the audit of theGroup.Accordingly,theCompanyhascompliedwithRule712andRule716oftheCatalistRules.

TheAChasrecommendedtotheBoardthere-appointmentofBDOLLPastheGroup’sexternalauditorandtheBoardhasacceptedtheAC’srecommendationandthere-appointmentwillbetabledintheforthcomingAGM.

In line with the CG Code, the Company has implemented a whistle blowing policy and has incorporated it into the Company’s internal control procedures. The whistle blowing policy will provide a well-defined and accessible channels in the Group through which the employees may raise concerns about improper conduct within the Group. The AC will review arrangements by which employees may raise in good faith and in confidence, without fear of reprisals, concerns about possible improprieties infinancialreportingorothermatters.TheAC’sobjectivesofsuchapolicyaretoensurethatarrangementsareinplaceforindependent investigation of suchmatters and for appropriate follow-up action.Multiple employees’ briefings have beenconductedtoupdateandexplaintheCompany’swhistleblowingpoliciesadoptedbytheCompany.

Principle 13: Internal Audit

The Company has outsourced its internal audit function for the purposes of reviewing the effectiveness of its internal controls and systems. The internal auditors report directly to the Chairman of the AC. The functions of the internal auditors include the review of the effectiveness of the Company’s material internal controls, including financial, operational and compliance controls andriskmanagement.

The internal auditors have unfettered access to all the Company’s documents, records, properties and personnel, including access to the AC. The internal auditors discuss and agree on the annual internal audit plan with the AC at the beginning of eachfinancialyear.Subsequentinternalauditfindingsandcorrespondingmanagementresponsestoaddressthesefindingsarereported at the meetings of the AC.

The internal auditors have carried out its functions according to the standards set by nationally or internationally recognized professionalbodiesincludingtheStandardsfortheProfessionalPracticeofInternalAuditingsetbyTheInstituteofInternalAuditors.

Principle14:Shareholderrights

TheGrouptreatsallshareholdersfairlyandequitablybydisclosingmaterialinformationthroughtheSGX-STinaccordancewiththeCorporateDisclosurePolicyoftheSGX-ST.TheGrouphadtakenstepstoensurethatallmaterialinformation,includingchangesintheCompanyoritsbusinessthatwouldlikelytohavematerialimpactonthepriceorvalueoftheCompany’sshares,aredisclosedonanaccurateandtimelybasistoallshareholdersviaSGXNET.

Shareholdersare informedofallgeneralmeetings throughnoticesandcircularssent toall shareholders.Thesenoticesarepublished in the daily local newspapers. The Group encourages active participation from all shareholders at general meetings. Directors,includingtheChairmanoftheBoardCommittees,arealsopresentatthesegeneralmeetingstoaddressquestionsfrom the shareholders.


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Principle15:CommunicationwithShareholders

TheCompanydoesnotpracticeselectivedisclosure.Allshareholdersareequallyandtimelyinformedofallmajordevelopmentsthat affect the Group. The Company is committed to disclosing as much relevant information as is possible, in a timely, fair and transparent manner, to its shareholders.

Information is communicated to shareholders through:

• SGXNETannouncements• Annualreportsandcirculars• NoticeofAGMandEGM

Price sensitive information is first publicly released, either before the Company meets with any group of investors or analysts orsimultaneouslywithsuchmeetings.ResultsandannualreportsareannouncedorissuedwithintheperiodprescribedbytheSGX-STandareavailableontheCompany’swebsite.ThereleaseofsuchtimelyandrelevantinformationiscrucialtogoodcorporategovernanceandenablesshareholderstomakeinformeddecisionsinrespectoftheirinvestmentsintheCompany.

Shareholdersaregiventherighttovoteontheresolutionsatgeneralmeetings.Eachitemofspecialbusinessincludedinthenoticeofthemeetingisaccompanied,whereappropriate,byanexplanationfortheproposedresolution.TheresultsofallgeneralmeetingsoftheCompanywillbenotifiedandreleasedthroughSGXNETafterthemeetings.Proxyformissentwiththe notice of general meeting to all shareholders so that those shareholders who are unable to attend the general meeting in personcanappointaproxyorproxiestoattendandvoteontheirbehalf.TheArticlesoftheCompanyallowmembersoftheCompanytoappointanyproxiestoattendandvoteontheirbehalf.

Thereareseparateresolutionsatgeneralmeetingsoneachsubstantiallyseparateissue.AtAGMs,shareholdersareinvitedtoraisequestionsonanymattersthatneedclarificationandappropriateresponsesaregiven.ThemembersoftheAC,theNC,theRCandtheexternalauditorsarepresentatallgeneralmeetingstoaddressanyqueriesfromshareholders.

ThereceptionaftertheAGMprovidesanopportunityforshareholderstoinformallycommunicatetheirviewsandexpectationsto the Company.

TheGroupdoes not have a concrete dividendpolicy at present. The form, frequency and amount of dividends declaredeachyearwilltakeintoconsiderationtheGroup’sprofitgrowth,cashposition,positivecashflowgeneratedfromoperations,projectedcapitalrequirementsforbusinessgrowthandotherfactorsastheBoarddeemappropriate.

Principle 16: Conduct of shareholder meetings

TheGroupencouragesfullparticipationoftheshareholdersattheAGMtoensureahighlevelofaccountabilityandidentificationwith the Group’s direction, strategy and goals. To facilitate and encourage such participation, Directors are present and available to addressquestions atgeneralmeetings. In addition, theexternal auditors are alsopresent to address the shareholders’queriesontheconductofauditandthepreparationandcontentoftheindependentauditreport.

DEALINGS IN SECURITIES

TheCompanyhasadoptedpoliciesinlinewiththerequirementsofRule1204(19)oftheCatalistRulesondealingsinsecuritiesof the Company.

TheDirectors,theManagementandtheofficersoftheCompanyarenotpermittedtodealintheCompany’sshares:

a) onshort-termconsiderations;

b) duringtheperiodscommencingtwoweeksbeforetheannouncementoftheCompany’sfinancialresultsforeachofthefirstthreequartersofitsfinancialyearoronemonthbeforetheannouncementoftheCompany’sfullyearresults,andendingonthedateofannouncementoftherelevantresults;and/or

(c) when they are in possession of unpublished price-sensitive information on the Company.


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RemindersaresentviaemailtoremindallDirectorsandemployees.TheCompanyhasconductedstaffbriefingtoexplaintheCompany’s policy on this matter.

INTERESTED PERSON TRANSACTIONS

The Group has not obtained a general mandate from shareholders for interested person transactions.

AllinterestedpersontransactionsaresubjecttoreviewbytheACtoensurethattheyareonanarm’slengthbasis.

TheCompanyhasputinplaceaninternalproceduretotrackinterestedpersontransactionsoftheGroupandtoensurethatsuch transactions are reported to the AC on a timely manner.

TherewerenointerestedpersontransactionsofmorethanS$100,000enteredintoduringFY2014.

NON-SPONSORShIP FEE

ThecontinuingsponsoroftheCompanyisCanaccordGenuitySingaporePte.Ltd.whowasappointedsince27August2013.

There was no non-sponsorship fee paid in FY2014.

MATERIAL CONTRACTS

TheCompanyhasenteredintoaconvertibleloanagreementofuptoS$15millionataninterestrateof5%perannum(“Loan”)withJitSunInvestmentsPteLtd,thecontrollingshareholderoftheCompany.Asat30June2014,S$6.5millionhasbeendrawndown.TheLoanisunsecuredandrepayableonJitSuninvestmentsPteLtd’sdemand.Savefortheaforementioned,therewerenomaterialcontractsenteredintobytheCompanyoranyofitssubsidiariesinvolvingtheinterestsoftheManagingDirectororany of its Directors or controlling shareholders subsisting as at the end of FY2014.

USE OF PROCEEDS

Use of net proceeds

Net proceeds utilized in the announcement dated

14 February 2014 (S$ million)

Net proceeds utilized as at 30 June 2014

(S$ million)

Placement of 50,000,000 new shares at S$0.35 per share in October 2013

Explorationandevaluation 8.4 14.8

Generalworkingcapital(1) 1.6 2.7

Total 10.0 17.5

Note:

(1) Generalworkingcapitalcomprisesoperatingexpensesandfinancecosts.

Theproceedsfromtheabove-mentionedfundraisingexercisehavebeenfullyutilizedasat30June2014.

RISk MANAGEMENT POLICIES AND PROCESSES

PoliticalRisksandExposure

TheGroupisexposedtopoliticalrisksandgovernmentinitiatives,policiesandregulationstowardstheoilandgasindustrywhichmayaffectthelevelofoilandgasactivitiesintheregionstheGroupoperatesorseekstooperatein.Inordertolowerthepotentialexposure,theManagementreviewsopportunitiesfromawidegeographicarea.TheGroupendeavorstolowerrisksbyfocusingonstablepoliticalenvironments.


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ExplorationandDevelopmentRisks

TheGroupisexposedtotheexplorationanddevelopmentrisksinnatetotheoilandgasindustry.Eachopportunityisreviewedby a technical team taking into account production history, availability of data, interpretation of data and track record ofpreviousinitiativesbyotherventures.Further,theManagementhasaccess,throughacooperationagreement,totheproprietarytechnologiesofRexOil&GasLimited(“Rex”)whereRex’sspecificinterpretationcapabilitiesareappliedtoreduceexplorationrisksandcosts.

RelianceonThirdPartyProviders

TheManagement constantly evaluates resources against ongoing and developing workload in the worldwide endeavors.Throughafinebalancebetweenretainingcorecompetenciesinaleanin-houseteamandselectiveoutsourcingofexperiencedconsulting resources from the industryworldwide, theGroup isable to remainflexibleanddynamicwhile retainingglobalknowledgeassets.Thishelps tomanage the riskof retainingorganizational capabilitywhilekeeping internal teamsizesatreasonablenumbersandmanageablecosts.TheManagementworkverycloselywiththeselectedpartnersandserviceproviderstoensuretimelyandqualityexecutionofprojectsglobally.


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The Directors of the Company present their report to the members together with the audited financial statements of the Group for the financial year ended 30 June 2014, the statement of financial position of the Company as at 30 June 2014 and the statementofchangesinequityoftheCompanyforthefinancialyearended30June2014.

1. Directors

The Directors of the Company in office at the date of this report are:

Lien Jown Jing Vincent (Chairman and Independent Director, appointed on 6 November 2013)LeeChyeChengAdrian (ManagingDirector)ChanEngYew(ZengRongyao) (Non-ExecutiveDirector)Teo Choon Kow @ William Teo (Independent Director)Chia Yong Whatt (Independent Director)

2. Arrangements to enable Directors to acquire shares or debentures

NeitherattheendofnoratanytimeduringthefinancialyearwastheCompanyapartytoanyarrangementwhoseobjectistoenabletheDirectorsoftheCompanytoacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporate,exceptasdisclosedinparagraphs3,5and6ofthisreport.

3. Directors’ interests in shares or debentures

AccordingtotheregisterofDirectors’shareholdingskeptbytheCompanyforthepurposesofSection164oftheSingaporeCompanies Act, Chapter 50 (the “Act”), none of the Directors of the Company holding office at the end of the financial yearhadanyinterestinthesharesordebenturesoftheCompanyanditsrelatedcorporationsexceptasdetailedbelow:

Share options to subscribefor shares of no par value

Share awards to subscribefor shares of no par value

Balance at1 July 2013

Balance at 30 June 2014

Balance at1 July 2013

Balance at30 June 2014

Company

Lien Jown Jing Vincent – 200,000 – –

Lee Chye Cheng Adrian 1,200,000 1,200,000 50,000 –

ChanEngYew(ZengRongyao) 120,000 270,000 – –

Teo Choon Kow @ William Teo 120,000 270,000 – –

Chia Yong Whatt 120,000 270,000 – –

InaccordancewiththecontinuinglistingrequirementsoftheSingaporeExchangeSecuritiesTradingLimited(“SGX-ST”),the Directors of the Company state that, according to the register of Directors’ shareholdings, the Directors’ interests as at 21 July 2014 in the shares of the Company have not changed from those disclosed as at 30 June 2014.

4. Directors’ contractual benefits

Sincetheendofthepreviousfinancialyear,noDirectorhasreceivedorbecomeentitledtoreceiveabenefitwhichisrequiredtobedisclosedunderSection201(8)oftheAct,byreasonofacontractmadebytheCompanyorarelatedcorporation with the Director or with a firm of which he is a member, or with a company in which he has a substantial financialinterest,exceptasdisclosedinthefinancialstatements.

REPORT OF THE DIRECTORS

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5. Share options

LoyzEnergyEmployeeShareOptionScheme

TheLoyzEnergyEmployeeShareOptionScheme(the“ESOS”)wasapprovedbythemembersoftheCompanyatanextraordinarygeneralmeetingheldon30November2012whichprovides for thegrantof incentiveshareoptions toemployeesanddirectors.TheESOSisadministeredbyacommittee(“Committee”)whosemembersare:

• ChanEngYew(ZengRongyao) (Non-ExecutiveDirector)• TeoChoonKow@WilliamTeo (IndependentDirector)• ChiaYongWhatt (IndependentDirector)

UndertheESOS,thetotalnumberofsharesinrespectofwhichtheCommitteemaygrantoptionsonanydate,whenadded to the number of shares issued and issuable or delivered and deliverable in respect of (a) all options granted under theESOS,and(b)allawards,sharesandoptionsgrantedunderanyothershareoption,share incentive,performanceshareor restrictedshareplan implementedby theCompanyand for the timebeing in force,shallnotexceedfifteenpercent(15.0%)ofthenumberofallissuedshares(excludingtreasuryshares,asdefinedintheAct)onthedayprecedingthatdate.TheESOSallowstheissueofoptionswithasubscriptionpriceatadiscountofupto20%ofthemarketprice,or its nominal value, whichever is higher.

Anoptionmaybeexercisedinwholeorinpart,afterthesecondanniversaryofthedateofgrantofthatoptionbutbeforethe fifth anniversary of the date of grant of that option in the case where options are granted at a discount, or after the first anniversary of the date of grant of that option in the case where options are not granted at a discount.

The lapsing of options is provided for upon the occurrence of certain events, which includes:

(a) theterminationofthegrantee’semployment;(b) misconductonthepartofthegranteeasdeterminedbytheCommittee;(c) bankruptcyofthegrantee;(d) thecompanybywhichthegranteeisemployedceasingtobeacompanywithintheGroup;and(e) the winding-up of the Company (voluntary or otherwise).

ActivitiesundertheESOS:

The outstanding number of options at the end of the financial year was:

Exercise price Grant date Exercise periodNumber of options as at 30 June 2014

$0.4200 18 December 2012 18 December 2013 to 18 December 2017 1,280,000

$0.4258 16 January 2013 16 January 2014 to 16 January 2018 1,200,000

$0.4200 24October2013 24October2014to24October2018 16,310,000



$0.4200 11 February 2014 11 February 2015 to 11 February 2019 650,000

27,640,000


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5. Share options (Continued)

ActivitiesundertheESOS:(Continued)

Thetablebelowsummarisesthenumberofoptionsthatwereoutstanding,theirweightedaverageexercisepriceasattheend of the financial year as well as the movements during the financial year.

2014Number of

options $

At 1 July 2,980,000 0.4223

Granted 25,530,000 0.4200

Cancelled (870,000) 0.4200

At 30 June 27,640,000 0.4202

2013Number of

options $

At 1 July – –

Granted 3,080,000 0.4223

Cancelled (100,000) 0.4223

At 30 June 2,980,000 0.4223

The following table summarises information about Directors’ share options outstanding as at 30 June 2014:

Participants

Number of shares

comprised in options granted during financial

year under review

Aggregate number

of shares comprised in options

granted since commencement of ESOS to end of financial year

under review

Aggregate number


exercised since commencement of ESOS to end of financial year

under review

Aggregate number


outstanding as at end of

financial year under review

Directors of the Company

Lien Jown Jing Vincent 200,000 200,000 – 200,000(a)

Lee Chye Cheng Adrian – 1,200,000 – 1,200,000(b)

ChanEngYew(ZengRongyao) 150,000 270,000 – 270,000(a)

Teo Choon Kow @ William Teo 150,000 270,000 – 270,000(a)

Chia Yong Whatt 150,000 270,000 – 270,000(a)

Total 650,000 2,210,000 – 2,210,000

(a) Exercisepriceof$0.4200.Exercisablebetweentheperiodsfrom18December2013to11February2019.(b) Exercisepriceof$0.4258.Exercisablefrom16January2014to16January2018.

Noparticipanthas received5%ormoreof the totalnumberof theoptionsavailableunder theESOSexcept for theabovementioned Directors.


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5. Share options (Continued)


Exceptasdisclosedabove,therewerenooptionsgrantedto(a)controllingshareholdersandIndependentDirectorsofthe Company, (b) associates of the controlling shareholders and (c) Independent Directors of its subsidiaries, from the commencementoftheESOSuptotheendofthefinancialyear.

Therewerenooptionbeingexercisedduringthefinancialyear.

Therewerenosharesissuedduringthefinancialyearbyvirtueoftheexerciseofoptionstotakeupunissuedsharesofthe Company or its subsidiaries.

TherewerenounissuedsharesunderoptionintheCompanyoritssubsidiariesasattheendofthefinancialyearexceptfor those disclosed above.

6. Share awards

LoyzEnergyPerformanceSharePlan

TheLoyzEnergyPerformanceSharePlan(the“PSP”)wasapprovedbythemembersoftheCompanyatanextraordinarygeneral meeting held on 30 November 2013 which provides for the grant of incentive share awards to employees and directors.ThePSPisadministeredbyacommittee(“Committee”)whosemembersare:

• ChanEngYew(ZengRongyao) (Non-ExecutiveDirector)• TeoChoonKow@WilliamTeo (IndependentDirector)• ChiaYongWhatt (IndependentDirector)

UnderthePSP,thetotalnumberofsharesinrespectofwhichtheCommitteemaygrantawardsonanydate,whenaddedto the number of shares issued and issuable or delivered and deliverable in respect of (a) all awards granted under the PSP,and (b)allawards,sharesandoptionsgrantedunderanyothershareoption,share incentive,performanceshareorrestrictedshareplanimplementedbytheCompanyandforthetimebeinginforce,shallnotexceedfifteenpercent(15.0%)ofthenumberofallissuedshares(excludingtreasuryshares,asdefinedintheAct)onthedayprecedingthatdate.In relation to each performance-related awards, the release of awards is based on the sole discretion of the Committee. The Committee reviews the performance conditions in respect of the awards and determines whether these have been satisfied. The Company shall release to the grantee the share awards on the vesting period in case where awards are not performance-related.

The lapsing of the awards is provided for upon the occurrence of certain events, which includes:

(a) theterminationofthegrantee’semployment;(b) non-executivedirectorceasingtobeadirectoroftheGroup;(c) thebankruptcyofthegrantee;(d) thedeathofthegrantee;(e) thebreachbythegranteeofanytermsontheawards;and(f) the misconduct of the grantee as determined by the Committee in its discretion.

ActivitiesunderthePSP:

The outstanding number of awards at the end of the financial year was:

Market price on the date of grant Grant date Exercise period

Number of awards as at 30 June 2014



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6. Share awards (Continued)

ActivitiesunderthePSP:(Continued)

The table below summarises the number of awards that were outstanding as at the end of the reporting period as well as the movements during the financial year.

2014Number of

awards $

At 1 July 240,000 0.4000

Granted 2,070,000 0.3947

Exercised (240,000) 0.4000

Cancelled (100,000) 0.3947

At 30 June 1,970,000 0.3947

2013Number of

awards $

At 1 July – –

Granted 240,000 0.4000

At 30 June 240,000 0.4000

The following table summarises information about Director’s share awards outstanding as at 30 June 2014:

Participants

Number of shares

comprised in awards granted during financial

year under review

Aggregate number

of shares comprised in awards

granted since commencement

of PSP to end of financial year

under review

Aggregate number


exercised since commencement

of PSP to end of financial year

under review

Aggregate number


outstanding as at end of

financial year under review

Director of the Company

Lee Chye Cheng Adrian – 50,000 (50,000) –

Noparticipanthasreceived5%ormoreofthetotalnumberoftheawardsavailableunderthePSP.

Exceptasdisclosedabove,therewerenoawardsgrantedto(a)controllingshareholdersandIndependentDirectorsofthe Company, (b) associates of the controlling shareholders and (c) Independent Directors of its subsidiaries, from the commencementofthePSPtotheendofthefinancialyear.


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7. Audit committee

The members of the Audit Committee during the financial year and at the date of this report are:

Teo Choon Kow @ William Teo (Chairman)Lien Jown Jing Vincent ChanEngYew(ZengRongyao)Chia Yong Whatt

TheAuditCommitteecarriesoutitsfunctionsinaccordancewithSection201B(5)oftheActandtheCodeofCorporateGovernance including the following:

(i) reviewstheauditplansandresultsoftheexternalandinternalaudits;

(ii) reviewstheGroup’sfinancialandoperatingresultsandaccountingpolicies;

(iii) reviews the financial statements of the Company and the consolidated financial statements of the Group before their submissiontotheDirectorsoftheCompanyandtheexternalauditors’reportonthosefinancialstatements;

(iv) reviewsthequarterly,half-yearlyandannualannouncementsontheresultsandfinancialpositionoftheCompanyandoftheGroup;

(v) ensurestheco-operationandassistancegivenbythemanagementtoexternalauditors;

(vi) makesrecommendationstotheBoardontheappointmentofexternalandinternalauditors;and

(vii) reviewstheInterestedPersonTransactionsasdefinedinChapter9oftheRulesofCatalistofSGX-STasisrequiredbySGX-STandensuresthatthetransactionswereonnormalcommercialtermsandnotprejudicialtotheinterestsof the members of the Company.

TheAuditCommitteeconfirmedthatithasundertakenareviewofallnon-auditservicesprovidedbytheexternalauditorstotheGroupandnotedthattherewerenonon-auditservicesprovidedbytheexternalauditorsthatwouldaffecttheindependenceoftheexternalauditors.

TheAuditCommitteehasfullaccesstoandco-operationofthemanagementandhasbeengiventheresourcesrequiredforittodischargeitsfunctionproperly.ItalsohasfulldiscretiontoinviteanyDirectorandexecutiveofficertoattenditsmeetings.TheexternalauditorshaveunrestrictedaccesstotheAuditCommittee.

BasedontheinternalcontrolsestablishedandmaintainedbytheGroup,workperformedbytheinternalandexternalauditors, and reviews performed by management, various Board Committees and the Board, the Audit Committee and theBoardareoftheopinionthattheGroup’sinternalcontrols,addressingfinancial,operationalandcompliancerisks,wereadequateasat30June2014.

TheAuditCommitteehasrecommendedtotheBoardofDirectorsthenominationofBDOLLPforre-appointmentasexternalauditorsoftheCompanyattheforthcomingAnnualGeneralMeeting.


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8. Auditors

Theauditors,BDOLLP,haveexpressedtheirwillingnesstoacceptre-appointment.

9. Additional disclosures requirements of the Listing Manual of the Singapore Exchange Securities Trading Limited

The Company has appointed BDO LLP as the Company’s auditor to audit the financial statements of the Group.Accordingly,Rule712oftheListingManualSectionB:RulesofCatalistoftheSingaporeExchangeSecuritiesTradingLimited has been complied with.

The auditors of the subsidiaries of the Company are disclosed in Note 8 to the financial statements. In the opinion of the BoardofDirectorsandAuditCommittee,Rule715and716oftheListingManualSectionB:RulesoftheCatalistofSGX-SThavebeencompliedwith.

OnbehalfoftheBoardofDirectors

Lee Chye Cheng Adrian Teo Choon kow @ William TeoDirector Director

Singapore26September2014


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In the opinion of the Board of Directors,

(a) the accompanying financial statements comprising the statements of financial position of the Group and of the Company asat30June2014,theconsolidatedstatementofcomprehensiveincome,consolidatedstatementofchangesinequityandconsolidatedstatementofcashflows,andstatementofchangesinequityoftheCompanytogetherwiththenotesthereon are properly drawn up in accordancewith the provisions of the SingaporeCompaniesAct, Chapter 50 andSingaporeFinancialReportingStandardssoastogiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasat30June2014andoftheresults,changesinequityandcashflowsoftheGroupandchangesinequityoftheCompanyforthefinancialyearendedonthatdate;and

(b) at the date of this statement, there are reasonable grounds to believe that, with the continuing financial support from its substantial shareholder, the Company will be able to pay its debts as and when they fall due.

OnbehalfoftheBoardofDirectors

Lee Chye Cheng Adrian Teo Choon kow @ William TeoDirector Director


STATEMENT BY DIRECTORS

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Report on the financial statements

We have audited the accompanying financial statements of Loyz Energy Limited (the “Company”) and its subsidiaries (the “Group”) which comprise the statements of financial position of the Group and of the Company as at 30 June 2014, the consolidatedstatementofcomprehensive income,statementsofchanges inequityof theGroupandof theCompanyandconsolidatedstatementofcashflowsforthefinancialyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformationassetoutonpages43to116.

Management’s responsibility for the financial statements

Managementisresponsibleforthepreparationoffinancialstatementsthatgiveatrueandfairviewinaccordancewiththeprovisionsof theSingaporeCompaniesAct,Chapter50 (the“Act”) andSingaporeFinancialReportingStandards, and fordevising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguardedagainst loss fromunauthoriseduseordisposition; and transactions areproperly authorisedand that they arerecorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditors’ responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our audit inaccordancewithSingaporeStandardsonAuditing.Those standards require thatwe complywithethical requirements andplan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures thatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the accompanying financial statements of the Group and the statement of financial position and statement of changesinequityoftheCompanyareproperlydrawnupinaccordancewiththeprovisionsoftheActandSingaporeFinancialReportingStandardssoastogiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasat30June2014andoftheresults,changesinequityandcashflowsoftheGroupandchangesinequityoftheCompanyforthefinancialyear ended on that date.

Report on other legal and regulatory requirements

Inouropinion, theaccountingandother records requiredby theAct tobekeptby theCompanyandby thesubsidiariesincorporatedinSingaporeofwhichwearetheauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.

BDO LLPPublic Accountants andChartered Accountants


INDEPENDENT AUDITORS'REPORTTo the members of Loyz Energy Limited

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Group Company

Note 2014 2013 2014 2013$’000 $’000 $’000 $’000

ASSETS

Non-current assets

Exploration,evaluationanddevelopmentassets 5 38,779 38,135 – –

Oilandgasproperties 6 70,540 – – –

Otherproperty,plantandequipment 7 2,047 35,208 – –

Investments in subsidiaries 8 – – 41,882 39,564

Available-for-sale financial asset 9 51,609 – – –

Intangible assets 10 67,177 34,811 – –

Otherreceivables 11 – – 69,969 30,821

Prepayments 13 3,527 3,644 – –

Total non-current assets 233,679 111,798 111,851 70,385

Current assets

Inventories 14 3,569 328 – –

Trade and other receivables 11 3,528 3,296 – 16

Otherassets 15 1,181 114 – –

Prepayments 13 190 380 48 –

Cashandcashequivalents 16 8,428 5,712 1,125 2,398

Total current assets 16,896 9,830 1,173 2,414

Total assets 250,575 121,628 113,024 72,799

EQUITY AND LIABILITIES

Equity

Ordinaryshares 17 95,882 68,014 95,882 68,014

Convertible preference shares 18 – 4,388 – –

Reserves 19 1,384 (1,284) 2,603 265

(Accumulatedlosses)/Retainedearnings (11,183) (1,202) 4,520 4,345

Equityattributabletoownersoftheparent 86,083 69,916 103,005 72,624

Non-controlling interests 3,177 3,191 – –

Total equity 89,260 73,107 103,005 72,624

The accompanying notes form an integral part of these financial statements.

STATEMENTS OF FINANCIAL POSITIONAs at 30 June 2014

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Group Company

Note 2014 2013 2014 2013$’000 $’000 $’000 $’000

Non-current liabilities

Bankborrowings 20 29,616 27,692 – –

Finance lease payables 21 47 75 – –

Provision for restoration costs 22 56 65 – –

Otherpayable 23 34,111 – – –

Deferredtaxliabilities 24 31,613 80 – –

Total non-current liabilities 95,443 27,912 – –

Current liabilities

Convertible preference shares 18 – 1,500 – –

Currentincometaxpayable 1,850 – – –

Trade and other payables 23 22,425 2,656 10,019 175

Bankborrowings 20 41,566 6,713 – –

Finance lease payables 21 27 27 – –

Otherliabilities 25 4 9,713 – –

Total current liabilities 65,872 20,609 10,019 175

Total liabilities 161,315 48,521 10,019 175

Total equity and liabilities 250,575 121,628 113,024 72,799


STATEMENTS OF FINANCIAL POSITIONAs at 30 June 2014

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the financial year ended 30 June 2014

Note 2014 2013$’000 $’000

Continuing operations

Revenue 26 20,711 1,267

Cost of sales (16,367) –

Gross profit 4,344 1,267

Other items of income

Interest income 33 56

Otherincome 27 6,955 2,007

Other items of expense

Distribution costs (8) (3)

Administrativeexpenses (7,698) (3,786)

Finance costs 28 (1,096) (124)

Otherexpenses (4,291) (1,999)

Othercharges 29 – (421)

Lossbeforeincometaxfromcontinuingoperations (1,761) (3,003)

Incometaxexpense 30 (2,980) (85)

Loss for the financial year from continuing operations (4,741) (3,088)

Discontinued operations

Profit for the financial year from discontinued operations 8 – 426

Loss for the financial year 31 (4,741) (2,662)

Other comprehensive income:

Items that may be reclassified subsequently to profit or loss

Exchangedifferencesontranslationofforeignoperations 670 (968)

Incometaxrelatingtoitemsthatwillormaybereclassified – –

Othercomprehensiveincomeforthefinancialyear,netoftax 670 (968)

Total comprehensive income for the financial year (4,071) (3,630)

Loss attributable to owners of the parent

- continuing operations (3,670) (2,934)

- discontinued operations 8 – 426

(3,670) (2,508)

Non-controlling interests

- continuing operations (1,071) (154)

(4,741) (2,662)


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Note 2014 2013$’000 $’000

Total comprehensive income attributable to:

Ownersoftheparent

- continuing operations (3,340) (3,471)

- discontinued operations 8 – 426

(3,340) (3,045)

Non-controlling interests

- continuing operations (731) (585)

Total comprehensive income for the financial year (4,071) (3,630)

Loss per share from continuing operations 32

- Basic (cents) (0.95) (0.92)

- Diluted (cents) (0.95) (0.92)


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the financial year ended 30 June 2014

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No

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––

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1721

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21,8

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21,8

93

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exercised

17,1

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––

–1,

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1996

–(9

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––

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30 J

une

2014

95,8

82–

2,60

3(1

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)(1

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789

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STATEMENTS OF CHANGES IN EQUITYFor the financial year ended 30 June 2014

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No

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42,2

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51,3

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47

Loss

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––

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(2,5

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(2,5

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(154

)(2

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–(5

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(431

)(9

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com

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–(5

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(585

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––

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19,5

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19,5

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17,1

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––

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1932

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30 J

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68,0

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Company NoteOrdinary

shares

Shareoption/

awardreserve

(Accumulated losses)/

Retained earnings

Total equity

$’000 $’000 $’000 $’000

Balance at 1 July 2013 68,014 265 4,345 72,624

Profit for the financial year – – 139 139

Total comprehensive income for the financial year – – 139 139

Contribution by and distributions to owners of the parent

Issue of shares 17 21,893 – – 21,893

Convertiblepreferencesharesexercised 17,18 5,879 – – 5,879

Shareoptionsexercised 19 96 (96) – –

Shareoptionscancelled 19 – (118) 36 (82)

Grant of share options to employees 19 – 2,552 – 2,552

Total transactions with owners of the parent 27,868 2,338 36 30,242

Balance at 30 June 2014 95,882 2,603 4,520 103,005

Balance at 1 July 2012 42,229 71 (1,786) 40,514

Profit for the financial year – – 6,131 6,131

Total comprehensive income for the financial year – – 6,131 6,131

Contribution by and distributions to owners of the parent

Issue of shares 17 19,576 – – 19,576

Convertiblepreferencesharesexercised 17,18 5,887 – – 5,887

Shareoptionsexercised 19 322 (54) – 268

Shareoptionscancelled 19 – (17) – (17)

Grant of share options to employees 19 – 265 – 265

Total transactions with owners of the parent 25,785 194 – 25,979

Balance at 30 June 2013 68,014 265 4,345 72,624



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Note 2014 2013$’000 $’000

Operating activities


Profitbeforeincometaxfromdiscontinuedoperations 8 – 433

Lossbeforeincometax (1,761) (2,570)

Adjustmentsfor:

Amortisation of intangible assets 3 1

Amortisation of deferred revenue – (821)

Depletion of oil and gas properties 910 –

Depreciationofplantandequipment 1,967 471

Writebackofallowancefordoubtfulnon-tradereceivables – (1,751)

Loss on disposal of a subsidiary – 347

Gainondisposalofplantandequipment (703) (114)

Waiver of loan by a non-controlling interest of a subsidiary (5,879) –

Share-basedpaymentexpenses 2,552 265

Reversalofshareoptions (82) –

Interestexpense 1,096 129

Interest income (33) (64)

Operatingcashflowsbeforeworkingcapitalchanges (1,930) (4,107)

Workingcapitalchanges:

Inventories 150 1,169

Trade and other receivables (2,128) (3,417)

Otherassets (84) 75

Prepayments 236 (312)

Trade and other payables 604 1,900

Otherliabilities (3,830) 5,100

Cash (used in)/generated from operations (6,982) 408

Interest received 33 64

Incometaxpaid (188) (26)

Net cash (used in)/from operating activities (7,137) 446


CONSOLIDATED STATEMENT OF CASH FLOWSFor the financial year ended 30 June 2014

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Note 2014 2013$’000 $’000

Investing activities

AcquisitionofinterestinThailandoperations,netofcashacquired 12.3 (38,122) –

Additions to oil and gas properties (1,560) –

Net proceeds from disposal of a subsidiary 8 – 5,426

Otherliabilities – 298

Otherreceivables – 2,000

Proceedsfromdisposalofotherplantandequipment 11 119

Purchaseofotherplantandequipment (2,138) (29,700)

Purchaseofexploration,evaluationanddevelopmentassets (3,468) (19,812)

Purchase of intangible assets (3,617) (2)

Purchase of available-for-sale financial asset 9 (5,047) –

Prepaymentforpre-explorationdata – (1,219)

Net cash used in investing activities (53,941) (42,890)

Financing activities

Interest paid (961) (84)

Proceedsfrombankborrowings 47,008 22,576

Net proceeds from issue of ordinary shares 17,474 19,576

Repaymentofloanreceivedfromadirector – (1,700)

Repaymentoffinanceleasepayables (28) (110)

Repaymentofborrowings (9,742) (25)

Proceedsfromexerciseofshareoptions – 268

Decrease/(increase) in cash pledge 1,432 (458)

Acquisitionofnon-controllinginterest 8 (1,255) –

Advances and short-term loans 11,110 –

Net cash from financing activities 65,038 40,043

Netchangeincashandcashequivalents 3,960 (2,401)

Foreigncurrencytranslationadjustments (349) (9)

Cashandcashequivalentsatbeginningoffinancialyear 3,563 5,973

Cashandcashequivalentsatendoffinancialyear 16 7,174 3,563


CONSOLIDATED STATEMENT OF CASH FLOWSFor the financial year ended 30 June 2014

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Thesenotesformanintegralpartofandshouldbereadinconjunctionwiththefinancialstatements.

1. General corporate information

LoyzEnergy Limited (the“Company”) is apublic limited company, incorporatedanddomiciled inSingaporewith itsprincipalplaceofbusinessandregisteredofficeat15HoeChiangRoad,TowerFifteen,Singapore089316.TheCompany’sregistrationnumberis199905693M.

The principal activities of the Company are those of investment holding and provision of management services to its subsidiaries.

The principal activities of the subsidiaries are set out in Note 8 to the financial statements.

Thestatementoffinancialpositionasat30June2014andstatementof changes inequityof theCompanyand theconsolidated financial statements of the Company and its subsidiaries (the “Group”) for the financial year ended 30 June 2014wereauthorisedforissueinaccordancewithaDirectors’resolutiondated26September2014.

2. Summary of significant accounting policies

2.1 Basis of preparation of financial statements

ThefinancialstatementshavebeenpreparedinaccordancewiththeprovisionsoftheSingaporeCompaniesAct,Chapter50andSingaporeFinancialReportingStandards (“FRS”).Thefinancial statementshavebeenpreparedunderthehistoricalcostconvention,exceptasdisclosedintheaccountingpoliciesbelowandonagoingconcernbasis as disclosed in Note 4 to the financial statements.

ThefinancialstatementsareexpressedinSingaporedollarandroundedtothenearestthousand,unlessotherwisestated.

Thepreparationoffinancial statements inconformitywithFRSrequires themanagement toexercise judgementintheprocessofapplyingtheGroup’sandtheCompany’saccountingpoliciesandrequirestheuseofaccountingestimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period, and the reported amounts of revenue and expensesduringthefinancialyear.Althoughtheseestimatesarebasedonthemanagement’sbestknowledgeofhistoricalexperienceandotherfactors,includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances, actual results may ultimately differ from those estimates. The estimates and underlying assumptions arereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedinthefinancialyearinwhichthe estimate is revised if the revision affects only that financial year, or in the financial year of the revision and future financial years if the revision affects both current and future financial years.

Criticalaccountingjudgementsandkeysourcesofestimationuncertaintyusedthataresignificanttothefinancialstatements are disclosed in Note 3 to the financial statements.

Duringthefinancialyear,theGroupandtheCompanyadoptedtheneworrevisedFRSandInterpretationsofFRS(“INTFRS”)thatarerelevanttotheiroperationsandeffectiveforthecurrentfinancialyear.ChangestotheGroup’sandtheCompany’saccountingpolicieshavebeenmadeasrequiredinaccordancewiththerelevanttransitionalprovisionsintherespectiveFRSandINTFRS.TheadoptionoftheneworrevisedFRSandINTFRSdidnotresultin any substantial changes to the Group’s and the Company’s accounting policies and has no material effect on the amountsreportedforthecurrentandpriorfinancialyears,exceptasdiscussedbelow.

FRS 113 Fair Value Measurement

FRS113providesasinglesourceofguidanceon fairvaluemeasurementand fairvaluedisclosure requirementswhen fair valuemeasurementand/ordisclosure is requiredbyotherFRSs. It alsoprovidesa common fair valuedefinitionandhierarchyapplicabletothefairvaluemeasurementofassets, liabilities,andanentity’sownequityinstruments within its scope.

NOTES TO THEFINANCIAL STATEMENTSFor the financial year ended 30 June 2014

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2. Summary of significant accounting policies (Continued)

2.1 Basis of preparation of financial statements (Continued)

FRS 113 Fair Value Measurement (Continued)

TheadoptionofFRS113doesnothaveanymaterialimpactonanyoftheGroup’sandtheCompany’sfairvaluemeasurements, therefore there has been no material impact on the financial position or financial performance of theGroupandtheCompany.TheGroupandtheCompanyhaveincludedtheadditionalrequireddisclosuresinthefinancialstatements.Inlinewiththetransitionalrequirements,FRS113hasbeenadoptedprospectivelyfrom1July2013andthereforecomparativeinformationhasnotbeenpresentedforthenewdisclosurerequirements.

Amendments to FRS 36 - Recoverable Amount Disclosures for Non-financial Assets

TheconsequentialamendmentsofFRS113includeamendmentstoFRS36thatrequirethedisclosureofinformationabouttherecoverableamountofanyCGUforwhichthecarryingamountofgoodwillorintangibleassetswithanindefinite useful life is significant compared to the total carrying amount of goodwill or intangible assets with an indefiniteusefullife.Asthiswasanunintendedconsequence,amendmentstoFRS36,effectiveforannualperiodsbeginningonorafter1January2014,wasissuedtoremovethisrequirementandinsteadrequiredisclosureaboutrecoverable amount only when there is a significant impairment or reversal of an impairment, as well as additional disclosure when recoverable amount is based on fair value less costs of disposal.

TheGrouphasearlyadoptedtheamendmentstoFRS36from1July2013,andreflectedtherelevantamendeddisclosurerequirementsinthesefinancialstatements.ThereisnoimpactontheGroup’sfinancialpositionorfinancialperformance.

FRS and INT FRS issued but not yet effective

As at the date of the authorisation of these financial statements, the Group and the Company have not adopted the followingFRSandINTFRSthathavebeenissuedbutnotyeteffective:

Effective date (Annual periods beginning on or

after)

FRS19 :AmendmentstoFRS19–DefinedBenefitPlans:EmployeeContributions 1 July 2014

FRS27 :SeparateFinancialStatements(Revised) 1 January 2014

:AmendmentstoFRS27–InvestmentEntities 1 January 2014

FRS28 :InvestmentsinAssociatesandJointVentures(Revised) 1 January 2014

FRS32 :AmendmentstoFRS32–OffsettingFinancialAssetsandFinancial Liabilities

1 January 2014

FRS39 :AmendmentstoFRS39–NovationofDerivativesandContinuationof Hedge Accounting

1 January 2014

FRS110 :ConsolidatedFinancialStatements 1 January 2014


FRS111 : Joint Arrangements 1 January 2014

FRS112 :DisclosureofInterestsinOtherEntities 1 January 2014


FRS114 :RegulatoryDeferralAccounts 1 January 2016

INTFRS121 : Levies 1 January 2014

ImprovementstoFRSs(2014) 1 July 2014


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2.1 Basis of preparation of financial statements (Continued)

FRS and INT FRS issued but not yet effective (Continued)

Consequentialamendmentswerealsomadetovariousstandardsasaresultoftheseneworrevisedstandards.

TheGroupandtheCompanyexpectthattheadoptionoftheaboveFRSandINTFRS,ifapplicable,willhavenomaterialimpactonthefinancialstatementsintheperiodofinitialadoption,exceptasdiscussedbelow.

FRS 110 Consolidated Financial Statements and FRS 27 Separate Financial Statements

FRS110replacesthecontrolassessmentcriteriaandconsolidationrequirementscurrentlyinFRS27andINTFRS12Consolidation–SpecialPurposeEntities.FRS110definestheprincipleofcontrolandestablishescontrolasthebasisofdeterminingwhichentitiesareconsolidatedintheconsolidatedfinancialstatements.FRS27remainsasastandardapplicableonlytoseparatefinancialstatements.OnadoptionofFRS110,managementwillberequiredtoexercisemorejudgementthanunderthecurrentrequirementsofFRS27inordertodeterminewhichentitiesarecontrolledbytheGroup.Thesechangeswilltakeeffectinthefinancialyearbeginningon1July2014withfullretrospective application.

The Group is currently evaluating the effect and anticipates that no material impact to the financial position and financial performance of the Group on initial adoption of the standard in the financial year beginning on 1 July 2014.

FRS 111 Joint Arrangements and FRS 28 Investments in Associates and Joint Ventures

FRS111supersedesFRS31,InterestinJointVentures,andINTFRS13,JointlyControlledEntities–Non-MonetaryContributionsbyVentures.FRS111classifiesajointarrangementaseitherajointoperationorajointventurebasedontheparties’rightsandobligationsunderthearrangement.UnderFRS111alljointventuresmustbeaccountedforundertheequitymethod,asdescribedintherevisedFRS28,withproportionateconsolidationprohibited.Thesechangeswilltakeeffectfromthefinancialyearbeginningon1July2014withfullretrospectiveapplication.

The Group is currently evaluating the effect and anticipates that no material impact to the financial position and financial performance of the Group on the initial adoption of the standard in the financial year beginning on 1 July 2014.

FRS 112 Disclosure of Interests in Other Entities

FRS112isanewandcomprehensivestandardondisclosurerequirementsforallformsofinterestinotherentities.Itrequiresanentitytoprovidemoreextensivedisclosuresregardingthenatureofanyrisksassociatedwithitsinterestsinsubsidiaries,associates,jointarrangementsandunconsolidatedstructureentities.Asthisisadisclosurestandard,there will be no impact on the financial position or financial performance of the Group on initial adoption of the standard in the financial year beginning on 1 July 2014.

2.2 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries made up to the end of the financial year. The financial statements of the subsidiaries are prepared for the same reporting date as that of the parent company.

Accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group to ensure consistency.

SubsidiariesareconsolidatedfromthedateonwhichcontrolistransferredtotheGroupuptotheeffectivedateonwhich that control ceases. In preparing the consolidated financial statements, inter-company transactions, balances andunrealisedgainsontransactionsbetweengroupcompaniesareeliminated.Unrealisedlossesarealsoeliminatedunless the transaction provides evidence of an impairment loss of the asset transferred.


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2.2 Basis of consolidation (Continued)

Non-controlling interests in subsidiaries relate to the equity in subsidiaries which is not attributable directly orindirectly to the owners of the parent. They are shown separately in the statements of comprehensive income, financialpositionandchangesinequity.

Non-controllinginterestsinsubsidiariesareidentifiedseparatelyfromtheGroup’sequitytherein.Non-controllinginterestsintheacquireemaybeinitiallymeasuredeitheratfairvalueoratthenon-controllinginterests’proportionateshareof the fairvalueof theacquiree’s identifiablenetassets.Thechoiceofmeasurementbasis ismadeonanacquisition-by-acquisitionbasis.Subsequenttoacquisition,thecarryingamountofnon-controllinginterestsistheamountofthoseinterestsatinitialrecognitionplusthenon-controllinginterests’shareofsubsequentchangesinequity.Totalcomprehensiveincomeisattributedtonon-controllinginterestsevenifthisresultsinthenon-controllinginterests having a deficit balance.

ChangesintheGroup’sinterest inasubsidiarythatdonotresult inalossofcontrolareaccountedforasequitytransactions.ThecarryingamountsoftheGroup’sinterestsandthenon-controllinginterestsareadjustedtoreflectthe changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controllinginterestsareadjustedandthefairvalueoftheconsiderationpaidorreceivedisrecogniseddirectlyinequityandattributedtoownersoftheparent.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilitieswere disposed of. The fair value of any investments retained in theformersubsidiaryatthedatewhencontrolislostisregardedasthefairvalueoninitialrecognitionforsubsequentaccountingunderFRS39Financial Instruments:RecognitionandMeasurementor,whenapplicable, thecostoninitialrecognitionofaninvestmentinanassociateorjointlycontrolledentity.

2.3 Business combinations

Theacquisitionofsubsidiariesorinterestsinjointlycontrolledoperationsthatconstituteabusinessisaccountedforusingtheacquisitionmethod.Theconsiderationtransferredfortheacquisitionismeasuredattheaggregateofthefairvalues,atthedateofexchange,ofassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissuedbytheGroupinexchangeforcontroloftheacquiree.Acquisition-relatedcostsarerecognisedinprofitorlossasincurred. Consideration also includes the fair value of any contingent considerations.

Theacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesthatmeettheconditionsforrecognitionunderFRS103BusinessCombinationsarerecognisedattheirfairvaluesattheacquisitiondate,exceptfornon-currentassets(ordisposalgroups)thatareclassifiedasheld-for-saleinaccordancewithFRS105Non-CurrentAssetsHeldforSaleandDiscontinuedOperations,whicharerecognisedandmeasuredatthelowerofcostandfairvaluelesscosts to sell.

Whereabusinesscombinationisachievedinstages,theGroup’spreviouslyheldinterestsintheacquiredentityareremeasuredtofairvalueattheacquisitiondate(i.e.thedatetheGroupattainscontrol)andtheresultinggainorloss,ifany,isrecognisedinprofitorloss.Amountsarisingfrominterestsintheacquireepriortotheacquisitiondatethat have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.


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2.3 Business combinations (Continued)

Theacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesthatmeettheconditionsforrecognitionunderFRS103arerecognisedattheirfairvaluesattheacquisitiondate,exceptthat:

• deferredtaxassetsorliabilitiesandliabilitiesorassetsrelatedtoemployeebenefitarrangementsarerecognisedandmeasuredinaccordancewithFRS12Income TaxesandFRS19Employee Benefitsrespectively;

• liabilitiesorequityinstrumentsrelatedtothereplacementbytheGroupofanacquiree’sshare-basedpaymentawardsaremeasuredinaccordancewithFRS102Share-based Payment; and

• assets(ordisposalgroups)thatareclassifiedasheldforsaleinaccordancewithFRS105Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that standard.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Thoseprovisionalamountsareadjustedduringthemeasurementperiod(seebelow),oradditionalassetsorliabilitiesarerecognised,toreflectnewinformationobtainedaboutfactsandcircumstancesthatexistedasoftheacquisitiondatethat,ifknown,wouldhaveaffectedtheamountsrecognisedasofthatdate.

The measurement period is the period from the date of acquisition to the date the Group obtains completeinformationaboutfactsandcircumstancesthatexistedasoftheacquisitiondate,andissubjecttoamaximumofone year.

Goodwillarisingonacquisitionisrecognisedasanassetattheacquisitiondateandinitiallymeasuredatcost,beingtheexcessofthesumoftheconsiderationtransferred,theamountofanynon-controllinginterestintheacquireeandthefairvalueoftheacquirerpreviouslyheldequityinterest(ifany)intheentityovernetacquisition-datefairvalueamountsoftheidentifiableassetsacquiredandtheliabilitiesassumed.

If,afterreassessment,theGroup’sinterestinthenetfairvalueoftheacquiree’sidentifiablenetassetsexceedsthesumoftheconsiderationtransferred,theamountofanynon-controllinginterestintheacquireeandthefairvalueoftheacquirer’spreviouslyheldequityinterestintheacquiree(ifany),theexcessisrecognisedimmediatelyinprofitor loss as a bargain purchase gain.

2.4 Oil and gas properties and other property, plant and equipment

Oilandgaspropertiesandotherproperty,plantandequipmentareinitiallyrecordedatcost.Subsequenttoinitialrecognition,property,plantandequipmentarestatedatcostlessaccumulateddepreciationandimpairmentlosses,if any.

Thecostofanassetincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheasset.Dismantlement,removal or restoration costs are included as part of the cost of the asset if the obligation for dismantlement, removal orrestorationisincurredasaconsequenceofacquiringorusingtheasset.

Subsequentexpenditurerelatingtotheassetthathasalreadybeenrecognisedisaddedtothecarryingamountoftheassetwhenitisprobablethatthefutureeconomicbenefits,inexcessofthestandardofperformanceoftheassetbeforetheexpenditurewasmade,willflowtotheGroupandtheCompany,andthecostcanbereliablymeasured.Othersubsequentexpenditureisrecognisedasanexpenseduringthefinancialyearinwhichitisincurred.

Anitemofoilandgaspropertiesandotherproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Anygainorlossonderecognitionoftheassetisincluded in profit or loss in the financial year the asset is derecognised.


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2.4 Oil and gas properties and other property, plant and equipment (Continued)

Oilandgaspropertiesaredepreciatedonaunit-of-productionmethodbyreferencetotheratioofproductionintheperiod and the related commercial reserve of the field. Freehold land is not depreciated.Other property, plant and equipment are depreciated using the straight-linemethod to allocate the depreciable amounts over their estimated useful lives as follows:

Leasehold land 5 yearsLeasehold building 61 yearsDrilling rigs 20 yearsPlant,machineryandequipment- Plant and machinery 21 years-Otherequipment 2–5yearsFurniture and fittings- Furniture and fittings 15 years-Otherfurnitureandfittings 3-5yearsMotorvehicles 5-10years

Depreciationrelatingtoproperty,plantandequipmentattributabledirectlytoactivitiesforexploration,evaluationanddevelopmentofoilandgasarecapitalisedaspartofexploration,evaluationanddevelopmentassets.

The residual values, estimated useful lives and depreciation method are reviewed at each financial year-end to ensure that the residual values, period of depreciation and depreciation method are consistent with previous estimates and expectedpatternofconsumptionofthefutureeconomicbenefitsembodiedintheitemsofoilandgaspropertiesandotherproperty,plantandequipment.

2.5 Exploration, evaluation and development (“E,E&D”) assets

2.5.1Explorationandevaluationcosts(“E&E”)

Explorationandevaluationactivityinvolvesthesearchforoilandgasresources,thedeterminationoftechnicalfeasibility and the assessment of the commercial viability of an identified resource. Costs incurred before theGrouphasobtainedthelegalrightstoexploreanareaarerecognisedinprofitorloss.Explorationandevaluation costs are capitalised in respect of each area of interest for which the rights to tenure are current and where:

i. theexplorationandevaluationcostsareexpectedtoberecoupedthroughsuccessfuldevelopmentandexploitationoftheareaofinterest;oralternatively,byitssale;or

ii. explorationandevaluationactivities intheareaof interesthavenotreachedastagewhichpermitsareasonableassessmentoftheexistenceorotherwiseofeconomicallyrecoverablereserves,andactiveand significant operations in, or in relation to, the areas of interest are continuing.

Explorationandevaluationassetscomprisescoststhataredirectlyattributableto:researchingandanalysingexistingexplorationdata,gatheringexplorationdata throughtopographical,geochemicalandgeophysicalstudies,exploratorydrilling,trenchingandsampling,determiningandexaminingthevolumeandgradeoftheresource,examiningandtestingextractionandtreatmentmethods,surveyingtransportationandinfrastructurerequirements, compiling pre-feasibility and feasibility studies and/or gaining access to areas of interestincluding occupancy and relocation compensation.

General andadministrative costs areallocated to, and included in, the costof explorationandevaluationassetonlytotheextentthatthosecostscanberelateddirectlytooperationalactivitiesintheareaofinteresttowhichtheexplorationandevaluationassetrelates.Inallothercases,thesecostsareexpensedasincurred.


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2.5 Exploration, evaluation and development (“E,E&D”) assets (Continued)

2.5.1Explorationandevaluationcosts(“E&E”)(Continued)

Explorationandevaluationassetsaretransferredtodevelopmentcosts,acomponentofE,E&Dassets,whenthetechnicalfeasibilityandcommercialviabilityofextractingtheresourcearedemonstrableandsanctionedby management.

Explorationandevaluationassetsareassessedforimpairmentwhenfactsandcircumstancessuggestthatthecarryingamountofanexplorationandevaluationassetmayexceeditsrecoverableamount.Whereapotentialimpairmentisindicated,assessmentisperformedforeachareaofinterestinconjunctionwiththegroupofoperatingassets(representingacash-generatingunit)towhichtheexplorationandevaluationisattributable.Totheextentthatcapitalisedexplorationandevaluationisnotexpectedtoberecovered,itischargedtoprofitor loss.

2.5.2 Development costs

Development costs are incurred within an area of interest as a component of a commercial development phase only upon its commitment to a commercial development.

Expenditure on the construction, installation or completion of infrastructure facilities such as platforms,pipelines and the drilling of development wells, including unsuccessful development on delineation wells, is capitalised within E,E&D assets.

Amortisation is not charged on costs carried in respect of areas of interest in the development phase until production commences. When production commences, carried forward exploration, evaluation anddevelopment costs are transferred to oil and gas properties.

Development costs are reviewed for impairment in accordance with the Group’s accounting policy on impairment of non-financial assets as set out in Note 2.9 to these financial statements.

2.6 Intangible assets

Goodwill

Goodwill arising on the acquisition of a subsidiary or interests in jointly controlled operations that constituteabusiness represents theexcessof thecostofacquisitionover theGroup’s interest in thenet fair valueof theidentifiableassets,liabilitiesandcontingentliabilitiesoftheacquireerecognisedatthedateofacquisition.Goodwillis initiallyrecognisedasanassetatcostandissubsequentlymeasuredatcostlessanyaccumulatedimpairmentlosses.

Forthepurposeofimpairmenttesting,goodwillisallocatedtoeachoftheGroup’scash-generatingunitsexpectedto benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are testedforimpairmentannually,ormorefrequentlywhenthereisanindicationthattheunitmaybeimpaired.Iftherecoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwillisnotreversedinasubsequentperiod.

When goodwill relates to a cash-generating unit but has not been allocated to that unit, the unit is tested for impairment, whenever there is an indication that the unit may be impaired, by comparing the unit’s carrying amount, excludinganygoodwill,with its recoverableamount. Impairment loss, ifany, isallocated to reduce thecarryingamount of the assets of the unit: first, to reduce the carrying amount of any goodwill allocated to the cash-generating unit;andthen,totheotherassetsoftheunitprorataonthebasisofthecarryingamountofeachassetintheunit.


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2.6 Intangible assets (Continued)

Goodwill (Continued)

Ondisposalofasubsidiaryor interest in jointlycontrolledoperationsthatconstituteabusiness,theattributableamount of goodwill is included in the determination of gain or loss on disposal.

Other intangible assets

Intangible assets acquired separately aremeasured initially at cost. The cost of intangible assets acquired in abusinesscombinationistheirfairvalueasatdateofacquisition.Followinginitialrecognition,intangibleassetsarecarried at cost less any accumulated amortisation and any accumulated impairment losses.

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

Intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed 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 are reviewed at least at each financialyear-end.Changesintheexpectedusefullifeortheexpectedpatternofconsumptionoffutureeconomicbenefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, andaretreatedaschangesinaccountingestimates.Theamortisationexpenseonintangibleassetswithfiniteusefullives is recognised in profit or loss or capitalised as E&E assets, where applicable.

Intangibleassetswith indefiniteuseful lives are tested for impairment annuallyormore frequently if theeventsor changes in circumstances indicate that the carrying amount may be impaired either individually or at the cash-generatingunitlevel.Suchintangibleassetsarenotamortised.Theusefullifeofanintangibleassetwithanindefiniteuseful life is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured at the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit and loss when the asset is derecognised.

The following are the other intangible assets:

(i) Software

Softwareisstatedatcostlessaccumulatedamortisationandimpairmentlosses,ifany.Thecostisamortisedusing the straight-line method over the estimated useful life of 5 years.

(ii) Acquiredpre-explorationdata

Acquiredpre-explorationdatahasindefiniteusefullifeastheGrouphasacontractualrighttotheexclusiveuseof the asset indefinitely and in perpetuity.

(iii) Overridingroyaltyinterest

Overridingroyaltyinterestisestimatedtohaveindefiniteusefullifeastheexplorationperiodoftheconcessioncannot be reliably estimated.


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2.7 Subsidiaries

SubsidiariesareentitiesoverwhichtheGrouphaspowertogovernthefinancialandoperatingpolicies,generallyaccompanyinga shareholdingofmore thanonehalf of the voting rights. TheexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhethertheGroupcontrolsanother entity.

Investments in subsidiaries are accounted for at cost less accumulated impairment losses, if any, in the Company’s statement of financial position.

2.8 Joint venture

Ajointventureisacontractualarrangementwherebytwoormorepartiesundertakeaneconomicactivitythatissubjecttocontrol,wherethestrategicfinancialandoperatingdecisionsrelatingtotheactivityrequiretheunanimousconsent of the parties sharing control.

Jointly controlled operation/Arrangements similar to a jointly controlled operation

AjointlycontrolledoperationinvolvestheuseofassetsandotherresourcesoftheGroupandotherventurersratherthan the establishment of a corporation, partnership or other entity.

TotheextentthatanarrangementprovidestheGroupwithrightstotheassetsandobligationsforliabilitiesrelatingtothearrangement,regardlessthattheGrouphasnojointcontrol,thearrangementisaccountedforasajointlycontrolled operation.

TheGrouprecognisesinitsfinancialstatementsinrelationtoitsinterestinajointlycontrolledoperation/arrangementssimilartoajointlycontrolledoperation,

• itsassets,includingitsshareofanyassetsheldjointly;• itsliabilities,includingitsshareofanyliabilitiesincurredjointly;• itsrevenuefromthesaleofitsshareoftheoutputarisingfromthejointlycontrolledoperation/arrangements

similartoajointlycontrolledoperation;• itsexpenses,includingitsshareofanyexpensesincurredjointly.

TheGroupaccountsfortheassets,liabilities,revenuesandexpensesrelatingtoitsinterestinajointlycontrolledoperation/arrangements similar to a jointly controlled operation in accordance with the accounting policiesapplicabletotheparticularassets,liabilities,revenuesandexpenses.

When theGroup acquires interests in a jointly controlledoperation/arrangements similar to a jointly controlledoperationthatconstituteabusiness, theacquisition isaccountedfor inaccordancewiththeGroup’saccountingpolicy on business combinations as set out in Note 2.3 to these financial statements, and any goodwill arising on the business combination is accounted for in accordance with the Group’s accounting policy on goodwill as set out in Note 2.6 to these financial statements.

2.9 Impairment of non-financial assets except E&E assets and goodwill

The carrying amounts of non-financial assets are reviewed at the end of each reporting period to determine whether there is any indication of impairment loss and whenever events or changes in circumstances indicate that the carrying amountmaynotberecoverable. Ifanysuch indicationexists,orwhenannual impairmenttestingforanasset isrequired,theasset’srecoverableamountisestimated.


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2.9 Impairment of non-financial assets except E&E assets and goodwill (Continued)

An impairment loss is recognisedwhenever thecarryingamountofanassetor itscash-generatingunitexceedsitsrecoverableamount.Acash-generatingunit isthesmallest identifiableassetgroupthatgeneratescashflowsthat largely are independent from other assets and groups of assets. Impairment loss is recognised in profit or loss, unless it reverses a previous revaluation, credited to other comprehensive income, in which case it is charged to other comprehensive income up to the amount of any previous revaluation.

The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to sell and its value inuse.Recoverableamountisdeterminedforindividualasset,unlesstheassetdoesnotgeneratecashinflowsthatare largely independent of those from other assets or groups of assets. If this is the case, the recoverable amount is determined for the cash-generating unit to which the assets belong. The fair value less costs to sell is the amount obtainablefromthesaleofanassetorcash-generatingunitinanarm’slengthtransactionbetweenknowledgeable,willingparties,lesscostsofdisposal.Valueinuseisthepresentvalueofestimatedfuturecashflowsexpectedtobederivedfromthecontinuinguseofanassetandfromitsdisposalattheendofitsusefullife,discountedatpre-taxratethatreflectscurrentmarketassessmentofthetimevalueofmoneyandtherisksspecifictotheassetorcash-generatingunitforwhichthefuturecashflowestimateshavenotbeenadjusted.

An assessment is made at the end of each reporting period as to whether there is any indication that an impairment lossrecognisedinpriorperiodsforanassetmaynolongerexistormayhavedecreased.Ifsuchindicationexists,therecoverable amount is estimated. An impairment loss recognised in prior periods is reversed only if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. An impairment loss is reversedonlytotheextentthattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined, netofdepreciationor amortisation, if no impairment loss hasbeen recognised.Reversalsofimpairment loss are recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversalinexcessofimpairmentlossrecognisedinprofitorlossinpriorperiodsistreatedasarevaluationincrease.Aftersuchareversal,thedepreciationoramortisationisadjustedinfutureperiodstoallocatetheasset’srevisedcarrying amount, less any residual value, on a systematic basis over its remaining useful life.

2.10 Financial assets

The Group and the Company classify their financial assets as loans and receivables and available-for-sale financial assets.Theclassificationdependsonthepurposeofwhichtheassetsareacquired.Themanagementdeterminesthe classification of the financial assets at initial recognition and re-evaluates this designation at the end of the reporting period, where allowed and appropriate.

(i) Loans and receivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepayments thatarenotquotedinanactivemarket.Loansandreceivablesareclassifiedwithin“tradeandotherreceivables”excludingdeferreddrillingcosts,“otherassets”and“cashandcashequivalents”onthestatementsoffinancialposition.

(ii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either designated as available-for-sale or are not classified in any of the other categories. They are included in non-current assets unless the management intends to dispose of the asset within 12 months after the end of the reporting period.

Recognition and derecognition

Financial assets are recognised on the statements of financial position when, and only when, the Group and the Company become parties to the contractual provisions of the financial instruments.


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2.10 Financial assets (Continued)

Recognition and derecognition (continued)

Regularwaypurchasesandsalesoffinancialassetsarerecognisedontrade-date,thedateonwhichtheGroupandthe Company commit to purchase or sell the asset.

FinancialassetsarederecognisedwhentherightstoreceivecashflowsfromthefinancialassetshaveexpiredorhavebeentransferredandtheGroupandtheCompanyhavetransferredsubstantiallyallrisksandrewardsofownership.

On derecognition of a financial asset, the difference between the carrying amount and the net considerationproceeds is recognised in profit or loss.

Initial and subsequent measurement

Financial assets are initially recognised at fair value plus in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

After initial recognition, loans and receivables are carried at amortised cost using the effective interest method, less impairment loss, if any.

Afterinitialrecognition,investmentsinequityinstrumentsclassifiedasavailable-for-salefinancialassetsthathavenoactivemarketpricesandwhosefairvaluecannotbereliablymeasuredarecarriedatcostlessimpairmentloss.

The effective interest method is a method of calculating the amortised cost of a financial instrument and allocating the interest incomeorexpenseover the relevantperiod.Theeffective interest rateexactlydiscountsestimatedfuture cash receipts or payments (including all fees on points paid or received that form an integral part of the effectiveinterestrate,transactioncostsandotherpremiumsordiscounts)throughtheexpectedlifeofthefinancialinstrument, or where appropriate, a shorter period, to the net carrying amount of the financial instrument. Income andexpensearerecognisedonaneffectiveinterestbasisfordebtinstrumentsotherthanthosefinancialinstrumentsat fair value through profit or loss.

Impairment

TheGroupandtheCompanyassessattheendofeachreportingperiodwhetherthereisobjectiveevidencethatafinancial asset or a group of financial assets is impaired.

(i) Loans and receivables

Anallowanceforimpairmentlossofloansandreceivablesisrecognisedwhenthereisobjectiveevidencethatthe Group and the Company will not be able to collect all amounts due according to the original terms of the receivables. The amount of allowance is the difference between the asset’s carrying amount and the present valueofestimatedfuturecashflows,discountedattheoriginaleffectiveinterestrate.Thecarryingamountofthe asset is reduced through the use of an allowance account. The amount of the loss is recognised in profit or loss.

If, inasubsequentperiod, theamountof the impairment lossdecreasesand thedecreasecanbe relatedobjectively to an event occurring after the impairment loss was recognised, the previously recognisedimpairmentlossisreversedeitherdirectlyorbyadjustinganallowanceaccount.Anysubsequentreversalofanimpairmentlossisrecognisedinprofitorloss,totheextentthatthecarryingamountoftheassetdoesnotexceeditsamortisedcostatthereversaldate.


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2.10 Financial assets (Continued)

Impairment (Continued)

(ii) Available-for-sale financial assets

Significantorprolongeddeclinesinthefairvalueofdebtorequitysecuritybelowitscost,significantfinancialdifficulties of the issuer or obligor and thedisappearanceof an active tradingmarket for the security areconsiderationstodeterminewhetherthereisobjectiveevidencethattheavailable-for-salefinancialassetisimpaired.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognisedinequityistransferredfromequitytoprofitorloss.Reversalsofimpairmentlossesinrespectofequityinstrumentsarenotrecognisedinprofitorloss.Reversalsofimpairmentlossondebtinstrumentsarerecognisedinprofitorlossiftheincreaseinfairvalueofthedebtinstrumentcanbeobjectivelyrelatedtoanevent occurring after the impairment loss was recognised in profit or loss.

2.11 Cash and cash equivalents

Cashandcashequivalentscomprisecashonhand,cashanddepositswithbanksandfinancial institutions.Cashandcashequivalentsareshort-termhighlyliquidinvestmentsthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangeinvalue.Forthepurposeoftheconsolidatedstatementofcashflows,cashandcashequivalentscomprisecashonhand,cashatbankandfixeddepositsnetoffixeddepositspledgedandbankoverdraft.

2.12 Inventories

Inventories are stated at the lower of cost and net realisable value.

Storesandconsumables

Cost is determined on a “first-in, first-out” basis and includes all costs of purchase and other costs incurred in bringing the inventories to their present location and condition.

2.13 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it ismorelikelythannotthatanoutflowofresourceswillberequiredtosettletheobligationandtheamounthasbeenreliably estimated. Provisions are not recognised for future operating losses.

Provision for restoration costs

The Group recognises its obligations for the future removal and site restoration of oil and gas facilities, wells, pipelinesandrelatedassetsinaccordancewiththeprovisionsofitsexplorationpermitsorinlinewiththeapplicableregulations.

Initial estimated costs for dismantlement and site restoration of oil and gas assets are to be recognised as part of acquisitioncostsoftheoilandgasassets,whichwillsubsequentlybedepreciatedaspartoftheacquisitioncostsof the asset.

In the most instances, the removal of these assets will occur many years in the future. The provision for restoration costs is thebestestimateof thepresent valueof the futureexpenditures required toundertake the restorationobligationat the reportingdate,basedon thecurrent legal requirements.Theestimateof future removalcoststherefore requiresmanagement tomake judgements regarding the timingof removal, theextentof restorationactivitiesrequiredandfutureremovaltechnologies.


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2.14 Financial liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

Financial liabilities are classified as at fair value through profit or loss if the financial liability is either held for trading or it is designated as such upon initial recognition. The Group and the Company have not designated any financial liabilities as at fair value through profit or loss upon initial recognition.

The accounting policies adopted for other financial liabilities are set out below:

(i) Trade and other payables

Trade and other payables are recognised initially at cost which represents the fair value of the consideration to be paid in the future, less transaction cost, for goods received or services rendered, whether or not billed totheGroupandtheCompany,andaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.

(ii) Bankborrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Bank borrowings aresubsequently stated at amortised cost using the effective interest method. Any difference between theproceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

Borrowings which are due to be settled within 12 months after the end of the reporting period are presented as current borrowings even though the original term was for a period longer than 12 months and an agreement to refinance or to reschedule payments on a long-term basis is completed after the end of the reporting period andbeforethefinancialstatementsareauthorisedforissue.Otherborrowingsduetobesettledmorethan12 months after the end of the reporting period are presented as non-current borrowings in the statements of financial position.

(iii) Convertible preference shares

When convertible preference shares are issued, the liability component and the equity component areseparately presented on the statements of financial position. Convertible preference shares are classified as a liability if these are redeemable on a specific date or at the option of the preference shareholder, or if dividend payments arenotdiscretionary.The liability component is recognisedat its fair valueand is subsequentlycarried at amortised cost until the liability is extinguishedon conversionor redemptionof thepreferenceshares.Dividendsthereonarerecognisedasinterestexpenseinprofitorlossasaccrued.

The remainder of the proceeds of the preference shares is allocated to the conversion option (equitycomponent),whichispresentedinequity,netofthedeferredtaxeffect.Thecarryingamountoftheconversionoptionisnotchangedinsubsequentperiods.Whenaconversionoptionisexercised,thecarryingamountoftheconversionoptionwillbetakentosharecapital.

Recognition and derecognition

Financial liabilities are recognised on the statements of financial position when, and only when, the Group and the Company become parties to the contractual provisions of the financial instruments.

Financialliabilitiesarederecognisedwhenthecontractualobligationhasbeendischargedorcancelledorexpired.Onderecognitionofafinancialliability,thedifferencebetweenthecarryingamountandtheconsiderationpaidisrecognised in profit or loss.


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2.14 Financial liabilities (Continued)

Recognition and derecognition (Continued)

Whenanexistingfinancial liability is replacedbyanother fromthesame lenderonsubstantiallydifferent terms,or the termsof anexisting liability are substantiallymodified, suchanexchangeormodification is treatedasaderecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.15 Equity instruments

Anequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsofanentityafterdeductingallof its liabilities.

Ordinarysharesareclassifiedasequityandrecognisedatthefairvalueoftheconsiderationreceived.

Preferencesharesareclassifiedasequityifthesearenon-redeemable,orredeemableonlyattheissuer’soption,andanydividendsarediscretionary.Dividendsthereonarerecognisedasdistributionswithintheequityuponapprovalby the issuer’s shareholders.

Incrementalcostsdirectlyattributabletotheissuanceofnewequityinstrumentsareshowninequityasadeductionfrom the proceeds.

2.16 Revenue recognition

Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivableforthesaleofgoodsorservicesrenderedintheordinarycourseofbusiness.Revenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheentityandtherevenuecanbereliablymeasured.Revenue ispresented,netof rebates,discountsandsalesrelatedtaxes.

Revenue fromoil andgas sales and sales of goods is recogniseduponpassageof title to the customerwhichgenerally coincides with their delivery and acceptance.

Revenuefrommobilisationofdrillingrigspertaintoone-timemobilisationfeewhichisrecognisedasrevenueuponsigning of the drilling contract as agreed between the parties.

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

2.17 Employee benefits

Defined contribution plan

Contributionstodefinedcontributionplansarerecognisedasexpensesinprofitorlossinthesamefinancialyearasthe employment that gives rise to the contributions.

Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. An accrual is made for estimated liability for unutilised annual leave as a result of services rendered by employees up to the end of the reporting period.


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2.18 Leases

When the Group and the Company are the lessees of finance leases

LeasesinwhichtheGroupandtheCompanyassumesubstantiallytherisksandrewardsofownershipareclassifiedas finance leases.

Uponinitialrecognition,plantandequipmentacquiredthroughfinanceleasesarecapitalisedattheloweroftheirfair values and the present values of the minimum lease payments. Any initial direct costs are also added to the amount capitalised.

Subsequenttoinitialrecognition,theassetisaccountedforinaccordancewiththeaccountingpolicyapplicabletothat asset. Lease payments are apportioned between finance charge and reduction of the lease liability. The finance charge is allocated to each period during the lease term so as to achieve a constant periodic rate of interest on the remaining balance of the finance lease liability. Finance charge is recognised in profit or loss.

When the Group and the Company are the lessees of operating leases

Leasesofassetsinwhichasignificantportionoftherisksandrewardsofownershipareretainedbythelessorareclassified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the period of the lease.

Whenanoperatingleaseisterminatedbeforetheleaseperiodhasexpired,anypaymentrequiredtobemadetothelessorbywayofpenaltyisrecognisedasanexpenseinthefinancialyearinwhichterminationtakesplace.

2.19 Borrowing costs

Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,areaddedtothecost of those assets, until such time as the assets are substantially ready for their intended use or sale. Borrowing costs on general borrowings are capitalised by applying a capitalisation rate to construction or development expendituresthatarefinancedbygeneralborrowings.Investmentincomeearnedonthetemporaryinvestmentofspecificborrowingspendingtheirexpenditureonqualifyingassetsisdeductedfromtheborrowingcostseligiblefor capitalisation.

All other borrowing costs are recognised in profit or loss in the financial year in which they are incurred.

2.20 Taxes

Incometaxexpenseforthefinancialyearcomprisescurrentanddeferredtaxes.Incometaxexpenseisrecognisedinprofitorlossexcepttotheextentthatitrelatestoabusinesscombination,oritemsrecogniseddirectlyinequityor in other comprehensive income.

Current income tax

Currentincometaxistheexpectedtaxpayableonthetaxableincomeforthefinancialyear,usingtaxratesenactedorsubstantivelyenactedbytheendofthereportingperiod,andanyadjustmenttoincometaxpayableinrespectof previous financial years.

Deferred tax

Deferredtaxisprovided,usingtheliabilitymethod,fortemporarydifferencesattheendofthereportingperiodwhenthetaxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.Deferredtaxismeasuredusingthetaxratesexpectedtobeappliedtothetemporarydifferenceswhentheyarerealisedorsettled,basedontaxratesenactedorsubstantivelyenactedbytheendofthereportingperiod.


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2.20 Taxes (Continued)

Deferred tax (Continued)

Deferredtaxassetsarerecognisedonlytotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichthetemporarydifferencescanbeutilised.Deferredtaxassetsarereviewedattheendofeachreportingperiodandreducedtotheextentthatitisnolongerprobablethattherelatedtaxbenefitwillberealised.

Unrecogniseddeferredtaxassetsarereassessedattheendofeachreportingperiodandarerecognisedtotheextentthatithasbecomeprobablethatfuturetaxableprofitswillbeavailableagainstwhichthetemporarydifferencescanbe utilised.

Deferredtaxrelatingto itemsrecognisedoutsideprofitor loss is recognisedoutsideprofitor loss.Deferredtaxitems are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equityanddeferredtaxarisingfromabusinesscombinationisadjustedagainstgoodwillonacquisition.

Deferredtaxassetsandliabilitiesareoffsetifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandthedeferredtaxesrelatetothesametaxauthorityandwherethereisintentiontosettlethecurrenttaxassetsandliabilitiesonanetbasis.

Deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,exceptwherethetimingofthereversalofthetemporarydifferencecanbecontrolledbytheGroupanditisprobablethat the temporary difference will not reverse in the foreseeable future.

Royalty tax

Inadditiontocorporatetaxes,theGroup’sconsolidatedfinancialstatementsalsoincludedandrecognisedastaxesonincome,othertypeoftaxesonnetincomewhicharecalculatedbasedonoilandgasproduction.

RoyaltytaxisaccountedforunderFRS12whentheyhavethecharacteristicsofanincometax.Thisisconsideredtobethecasewhentheyareimposedundergovernmenttaxauthorityandtheamountpayableisbasedontaxableincome–ratherthanbasedonphysicalquantityproducedorasapercentageofrevenue–afteradjustmentfortemporarydifferences.Forsucharrangements,currentanddeferredtaxisprovidedonthesamebasisasdescribedaboveforotherformsoftaxation.Obligationsarisingfromroyaltyarrangementsandothertypesoftaxesthatdonot satisfy these criteria are recognised as current provisions and included in cost of sales.

2.21 Foreign currencies

Items included in the individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”).

The consolidated financial statements of the Group and the statement of financial position and statement of changes inequityoftheCompanyarepresentedinSingaporedollar,whichisthefunctionalcurrencyoftheCompanyandthepresentation currency for the consolidated financial statements.

In preparing the financial statements, transactions in currencies other than the entity’s functional currency (“foreign currencies”)arerecordedattheratesofexchangeprevailingonthedateofthetransaction.Attheendofeachreporting period, monetary items denominated in foreign currencies are re-translated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are re-translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.


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2.21 Foreign currencies (Continued)

Exchange differences arising on the settlement ofmonetary items and on re-translating ofmonetary items arerecognisedinprofitorlossforthefinancialyear.Exchangedifferencesarisingonthere-translationofnon-monetaryitemscarriedatfairvaluearerecognisedinprofitorlossforthefinancialyearexceptfordifferencesarisingonthere-translation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income.Forsuchnon-monetary items,anyexchangecomponentof thatgainor loss isalsorecognised inothercomprehensive income.

For the purpose of presenting consolidated financial statements, the results and financial positions of the Group’s entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assetsandliabilitiesaretranslatedattheclosingrateattheendofthereportingperiod;

(ii) incomeandexpensesaretranslatedataverageexchangerateforthefinancialyear(unlessthisaverageisnotareasonableapproximationofthecumulativeeffectoftheratesprevailingonthetransactionsdates,inwhichcase,incomeandexpensesaretranslatedusingtheexchangeratesatthedatesofthetransactions);and

(iii) all resulting foreign currency exchange differences are recognised in other comprehensive income andpresentedintheforeigncurrencytranslationaccountinequity.

2.22 Share-based payments

TheGroupoperatesanequity-settledshare-basedcompensationplanforitsemployees.

Equity-settled share-basedpayments aremeasured at fair value of the equity instruments (excluding the effectofnon-marketbasedvestingconditions)atthedateofgrant.Thefairvaluedeterminedatthegrantdateoftheequity-settledshare-basedpayments isexpensedonastraight-linebasisover thevestingperiod,basedon theGroup’sestimateofthenumberofequityinstrumentsthatwilleventuallyvestandadjustedfortheeffectofnon-marketbasedvestingconditionssuchasprofitabilityandsalesgrowthtargets.Non-marketvestingconditionsareincludedinassumptionsaboutthenumberofoptionsthatareexpectedtobecomeexercisable.Attheendofeachreportingperiod,theGrouprevisestheestimateofthenumberofequityinstrumentsexpectedtovest.Theimpactof the revision of the original estimates, if any, is recognised over the remaining vesting period with a corresponding adjustmenttotheshareoptionreserve.

Fairvalue ismeasuredusingtheTrinomialoptionpricingmodel.Theexpected lifeused in themodelhasbeenadjusted,basedontheexternalindependentvaluers’bestestimate,fortheeffectsofnon-transferability,exerciserestrictions and behavioural considerations. At each reporting period a revision is made to the number of options thatareexpectedtobecomeexercisable. Itrecognisestheimpactoftherevisionoforiginalestimates, ifany, inprofitor loss,withacorrespondingadjustment toequity.Theproceeds receivednetofanydirectlyattributabletransactioncostsarecredited tosharecapitalwhen theoptionsareexercised.Cancellationsofgrantsofequityinstruments during the vesting period (other than a grant cancelled by forfeiture when the vesting conditions are not satisfied) are accounted for as an acceleration of vesting, therefore any amount unrecognised that would otherwise have been charged is recognised immediately in profit or loss.

2.23 Segment reporting

Operatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessingperformanceoftheoperatingsegments,hasbeenidentifiedasthegroupofexecutivedirectorswhomakestrategicdecisions.


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2.24 Discontinued operations

A discontinued operation is a component of an entity that either has been disposed of, or is classified as held-for-sale, and

(i) representsaseparatemajorlineofbusinessorgeographicalareaofoperations;(ii) ispartofasingleco-ordinatedplantodisposeofaseparatemajorlineorgeographicalareaofoperations;or(iii) isasubsidiaryacquiredexclusivelywithaviewtoresale.

3. Critical accounting judgements and key sources of estimation uncertainty

3.1 Critical judgements made in applying the Group’s and the Company’s accounting policies

In the process of applying the Group’s and the Company’s accounting policies, the management is of the opinion thattherearenocriticaljudgementsinvolvedthathaveasignificanteffectontheamountsrecognisedinthefinancialstatementsexceptasdiscussedbelow.

(i) Determination of functional currency

The Group measures foreign currency transactions in the respective functional currencies of the Company and itssubsidiaries.IndeterminingthefunctionalcurrenciesoftheentitiesintheGroup,judgementisrequiredtodeterminethecurrencythatmainlyinfluencessalespricesforgoodsandservicesandofthecountrywhosecompetitive forces and regulations mainly determines the sales prices of its goods and services. Consideration is also given to the currency of the cost of operations in determining the functional currency of Group entities that which have not generated revenues. The functional currencies of the entities in the Group are determined based on management’s assessment of the economic environment in which the entities operate and the entities’ process of determining sales prices and cost of operations.

(ii) Hydrocarbon reserve and resource estimates

Oilandgasproductionpropertiesaredepreciatedonaunit-of-productionmethodbyreferencetotheratioofproduction in the period and the related commercial reserve of the field. The Group estimates its commercial reservesbasedon information compiledbyappropriatelyqualifiedpersons relating to thegeological andtechnicaldataonthesize,depth,shapeandgradeofthehydrocarbonbodyandsuitableproductiontechniquesand recovery rates. Commercial reserves are determined using estimates of oil and gas in place, recovery factors and future oil prices. Future development costs are estimated using assumptions as to number of wells requiredtoproducethecommercialreserves,thecostofsuchwellsandassociatedproductionfacilities,andother capital costs.

As the economic assumptions used may change and as additional geological information is obtained during theoperationofafield,estimatesofrecoverablereservesmaychange.SuchchangesmayimpacttheGroup’sreported financial position and results, which include:

- the carrying value of exploration, evaluation and development assets, oil and gas properties, otherproperty,plantandequipment,available-for-salefinancialasset,andgoodwillmaybeaffectedduetochangesinestimatedfuturecashflows;and

- depreciation charges in profit or loss may change where such changes are determined using the units of production method, or where the useful life of the related assets change.


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3. Critical accounting judgements and key sources of estimation uncertainty (Continued)

3.1 Critical judgements made in applying the Group’s and the Company’s accounting policies (Continued)

(iii) Recoverabilityofdevelopmentassetsandoilandgasproperties

The Group assesses each asset or cash-generating unit (excluding goodwill, which is assessed annuallyregardlessofindicators)ateachreportingperiodtodeterminewhetheranyindicationofimpairmentexists.Where an indicator of impairment exists, a formal estimate of the recoverable amount ismade, which isconsideredtobethehigheroffairvaluelesscoststosellandvalueinuse.Theseassessmentsrequiretheuse of estimates and assumptions such as long-term oil prices (considering current and historical prices, price trends and related factors), discount rates, operating costs, future capital requirements, decommissioningcosts, exploration potential, reserves and operating performance (which includes production and salesvolumes).Theseestimatesandassumptionsaresubjecttoriskanduncertainty.Therefore,thereisapossibilitythat changes in circumstanceswill impact theseprojections,whichmay impact the recoverableamountofassets and/or cash-generating units.

Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transactionbetweenknowledgeableandwillingparties.Fairvalue fordevelopmentassetsandoilandgasproperties is generally determined as the present value of estimated future cash flows arising from thecontinueduseoftheassets,whichincludesestimatessuchasthecostoffutureexpansionplansandeventualdisposal,usingassumptionsthatan independentmarketparticipantmaytake intoaccount.Cashflowsarediscountedtotheirpresentvalueusingadiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyaretherisksspecifictotheasset/cash-generatingunit.

(iv) Capitalisationandimpairmentofexplorationandevaluationassets

Explorationandevaluationcostsarecapitalised in the statementsoffinancialposition, in respectofareasof interestforwhichtherightsoftenurearecurrentandwheresuchcostsareexpectedtoberecoupedorexplorationand/orevaluationactivitiesintheareahavenotyetreachedastagewhichpermitsareasonableassessmentoftheexistenceofeconomicallyrecoverablereserves.Thecarryingvalueofassetswithineachareaofinterestarereviewedregularlytakingintoconsiderationtheavailablefactsandcircumstances,andtotheextenttowhichcapitalisedvalueexceedsitsrecoverablevalue,theexcessisprovidedfororwrittenoffinthe financial year in which this is determined.

(v) Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis and as and when there is an indicationthatgoodwillmaybeimpaired.Thisdeterminationrequiressignificantjudgement.Wheneverthereis an indication that the cash-generating units to which the goodwill was allocated may be impaired, the cash-generatingunitsaretestedforimpairmentbycomparingtheircarryingamounts,excludinganygoodwill,withtheir recoverable amounts.

(vi) Impairment of indefinite-lived intangible assets

The Group determines whether the indefinite-lived intangible assets are impaired on an annual basis, irrespective of whether there is any indication of impairment. In addition, the Group reviews the useful life of the intangible assets on an annual basis to determine whether events and circumstances continue to support anindefiniteusefullifeassessmentfortheasset.Theserequiresignificantjudgement.Theintangibleassetsaretested for impairment by comparing their respective carrying amounts with the recoverable amounts.


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3.1 Critical judgements made in applying the Group’s and the Company’s accounting policies (Continued)

(vii) Impairment of investments in subsidiaries and financial assets

TheGroupandtheCompanyfollowtheguidanceofFRS36andFRS39indeterminingwhetheraninvestmentinsubsidiaryorafinancialassetisimpaired.Thisdeterminationrequiressignificantjudgement.TheGroupandtheCompanyevaluate,amongotherfactors,thedurationandextenttowhichthefairvalueofaninvestmentorafinancialassetislessthanitscostandthefinancialhealthofandnear-termbusinessoutlookforthefinancialasset, including factors such as industry and sector performance, changes in technology and operational and financingcashflows.

(viii) Provision for restoration costs

Restorationcostsarenormalconsequenceofoilextractionandthemajorityifthisexpenditureisincurredatthe end of a well’s life or an area of interest. In determining an appropriate level of provision, consideration is giventotheexpectedfuturecoststobeincurred,thetimingoftheseexpectedfuturecosts(largelydependentonthelifeofthewells),andtheexpectedusefullifeoftheareasofinterestandthewells.Therestorationcostsareuncertainandmayvaryinresponsetomanyfactors,includingchangestotherelevantlegalrequirementsand theemergenceofnew restoration techniquesorexperienceatotherwells.Asa result, thedifferencebetweenactualandestimatesmaybematerialandtherecouldbesignificantadjustmentstotheprovisionestablished which would affect future financial results.

(ix) Employeeshareoptions

TheGroupmeasuresthecostofequity-settledtransactionswithemployeesbyreferencetothefairvalueoftheequityinstrumentsatthedateatwhichtheyaregranted.Estimatingfairvalueforshare-basedpaymenttransactionsrequiresdeterminingthemostappropriatevaluationmodel,whichisdependentonthetermsandconditionsofthegrant.Thisestimatealsorequiresdeterminingthemostappropriateinputstothevaluationmodelincludingexpectedlifeoftheshareoption,volatilityanddividendyieldandmakingassumptionsaboutthem. The assumptions and model for estimating fair value for share-based payment transactions are set out in Note 19 to the financial statements.

3.2 key sources of estimation uncertainty

Thekeyassumptionsconcerningthefuture,andotherkeysourcesofestimationuncertaintyasattheendofthereportingperiod,thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitiesandthereportedamountsofrevenueandexpenseswithinthenextfinancialyear,arediscussedbelow.

(i) Unitsofproductiondepreciationofoilandgasproperties

Oilandgaspropertiesaredepreciatedonaunit-of-productionmethodbyreferencetotheratioofproductionin the period and the related commercial reserve of the field. This results in a depreciation charge proportional to the depletion of the anticipated remaining production from the field.


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3.2 key sources of estimation uncertainty (Continued)

(i) Unitsofproductiondepreciationofoilandgasproperties(Continued)

The life of each item, which is assessed at least annually, has regard to both its physical life limitations and to present assessments of economically recoverable reserves of the field at which the asset is located. These calculationsrequiretheuseofestimatesandassumptions,includingtheamountofrecoverablereservesandestimatesoffuturecapitalexpenditure.Thecalculationoftheunitsofproductionrateofdepreciationcouldbe impactedtotheextentthatactualproduction inthefuture isdifferent fromcurrent forecastproductionbased on total proved and probable developed and undeveloped reserves, or future capital assumptions used in estimating reserves, including:

- the effect on proved reserves of differences between actual commodity prices and commodity price assumptions;or

- unforeseen operational issues.

Changes are accounted for prospectively.

ThecarryingamountoftheGroup’soilandgaspropertiesasat30June2014was$70,540,000(2013:$Nil).

(ii) Incometaxes

TheGroupandtheCompanyrecognisedliabilitiesforexpectedincometaxliabilitiesbasedontheestimatesofincometaxpayable.Therearecertaintransactionsandcomputationsforwhichtheultimatetaxdeterminationis uncertain during the ordinary course of business. Where the actual liability arising from these issues differs fromtheseestimates,suchdifferenceswillhaveanimpactonincometaxanddeferredtaxprovisionsinthefinancialyearwhensuchdetermination ismade.Thecarryingamountsof theGroup’sdeferredtax liabilityandcurrent income taxpayableasat30June2014wereapproximately$31,613,000 (2013:$80,000)and$1,850,000(2013:$Nil)respectively.

4. Going concern

As at 30 June 2014, theGroup’s current liabilities exceeded its current assets by approximately $48,976,000 (2013:$10,779,000)andtheGroupincurrednetlossofapproximately$4,741,000(2013:$2,662,000)forthefinancialyearended30June2014.Inaddition,theGrouphadnegativecashflowsfromoperatingactivitiesforthefinancialyearthenendedamountingtoapproximately$7,137,000.

Notwithstanding the above, the Directors of the Company are of the opinion that the Group is able to meet its obligations as and when they fall due having regard to the following:

(i) TheDirectorshavecarriedoutadetailedreviewofthecashflowforecastoftheGroupforthenineteenmonthsending 31 January 2016 covering the estimated period of the Group’s drilling programme. Based on such forecast, theDirectorshaveestimatedthatadequateliquidityexiststofinancetheworkingcapitalrequirementsoftheGroupforthenextfinancialyear.Inpreparingthecashflowforecasts,theDirectorshaveconsideredtheoperatingcashrequirementsof theGroupaswellasotherkey factors, including theabilityof theGroup togeneratesufficientrevenueorobtainadditionalfundingtosatisfytheGroup’sfutureworkingcapitalrequirements,whichmayimpacttheoperationsoftheGroupduringthenextnineteenmonths.TheDirectorsareoftheopinionthattheassumptionswhichareincludedinthecashflowforecastarereasonable;and


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4. Going concern (Continued)

(ii) TheCompanyhasreceivedanundertakingfromitssubstantialshareholder,JitSunInvestmentsPteLtd,tocontinueto provide the Group with financial support as is necessary to enable the Group to continue as a going concern and supportitsoperatingandinvestingactivitiesforthenextnineteenmonths.

TheconsolidatedfinancialstatementsoftheGroupdonotincludeanyadjustmentsrelatingtotherecoverabilityofreported asset amount or the amounts and classifications of liabilities that might result if the going concern basis were found to be inappropriate.

5. Exploration, evaluation and development assets

Exploration and evaluation

assetsDevelopment

costs Total$’000 $’000 $’000

Group

Balance at 1 July 2013 17,363 20,772 38,135

Additions 1,114 2,940 4,054

De-recognition – (4,268) (4,268)

Currencytranslationadjustment 1,371 (513) 858

Balance at 30 June 2014 19,848 18,931 38,779

Balance at 1 July 2012 17,612 – 17,612

Additions 17,244 5,487 22,731

Transfer to development costs (16,442) 16,442 –

Currencytranslationadjustment (1,051) (1,157) (2,208)

Balance at 30 June 2013 17,363 20,772 38,135

On6August2012,LoyzNZVenturesLimited(“LoyzNZ”)entered intoaFarm-inAgreement (“Agreement”)withSTPEnergyPteLtd(“STP”)fortheacquisitionofcertainparticipatinginterestsheldbySTPinrespectofpermit,PEP38479,grantedbytheNewZealandGovernmentandexpireson23September2016.Thepermitincorporatescertainmilestonesforaspectsoftheexplorationofthepermitareaincludingthedrillingofanappraisalwellby24December2013,failingwhich the permit would need to be surrendered.

LoyzNZhadmadeanapplication to theNewZealandGovernment foraChangeofConditions (“COC”)allowinganextensionoftimeforthedrillingofthewell.TheCOCwasapprovedduringthefinancialyearwhereanextensionwasgrantedandtheappraisalwellisnowrequiredtobedrilledbyJune2015.


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5. Exploration, evaluation and development assets (Continued)

During the financial year, the Group’s non-cash additions to E,E&D assets include the following:

Group

2014 2013$’000 $’000

Borrowing costs 397 41

Depreciationofplantandequipment 63 34

Amortisation of software 46 48

Foreignexchangeloss 80 873

Reversalofprovisionforrestorationcosts – (27)

6. Oil and gas properties

Group

2014 2013$’000 $’000

Cost

As at beginning of financial year – –

AcquisitionofinterestintheThailandoperations(Note12.3) 69,749 –

Additions 2,567 –

Currencytranslationadjustment (877) –

As at end of financial year 71,439 –

Accumulated depletion

As at beginning of financial year – –

Depletion for the financial year 910 –

Currencytranslationadjustment (11) –

As at end of financial year 899 –

Carrying amount

As at end of financial year 70,540 –

TheGroup’soilandgaspropertiesincludecapitalisedborrowingcostsamountingto$1,007,000(2013:$Nil)arisingfromtheamortisationofdeferredconsiderationandbankloansborrowedspecificallyforthepurposeoftheacquisitionof20%participatinginterestinpetroleumconcessions(Note20.3)wherebyexplorationworksanddrillingofnewdevelopmentwells are ongoing. The rate used to determine the amount of borrowing cost eligible for capitalisation was 4.5% (2013: $Nil),whichapproximatestheeffectiveinterestrateofthespecificborrowing.


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7. Other property, plant and equipment

GroupFreehold

land

Leasehold land andbuilding

Plant,machinery

andequipment

Furnitureand

fittingsMotor

vehiclesDrilling

rigs Total$’000 $’000 $’000 $’000 $’000 $’000 $’000

Cost

Balance at 1 July 2013 – 103 314 156 274 34,877 35,724

Additions 59 1 68 7 214 1,789 2,138

AcquisitionofinterestintheThailand operations (Note 12.3) 1,084 34 305 12 – – 1,435

Disposal – – (3) – (24) (36,504) (36,531)

Currencytranslationadjustment (14) (4) (18) (1) (3) (162) (202)

Balance at 30 June 2014 1,129 134 666 174 461 – 2,564

Accumulated depreciation

Balance at 1 July 2013 – 4 97 144 74 197 516

Depreciation for the financial year – 3 126 18 75 1,808 2,030

Disposal – – (1) – (12) (2,003) (2,016)

Currencytranslationadjustment – (1) (8) (1) (1) (2) (13)

Balance at 30 June 2014 – 6 214 161 136 – 517

Carrying amount

Balance at 30 June 2014 1,129 128 452 13 325 – 2,047

Cost

Balance at 1 July 2012 – 90 1,256 1,149 1,728 – 4,223

Additions – – 224 3 295 34,066 34,588

Disposal – – (10) (6) (323) – (339)

Disposal of subsidiary (Note 8) – – (1,153) (992) (1,459) – (3,604)

Currencytranslationadjustment – 13 (3) 2 33 811 856

Balance at 30 June 2013 – 103 314 156 274 34,877 35,724

Accumulated depreciation

Balance at 1 July 2012 – – 1,011 1,046 1,289 – 3,346

Depreciation for the financial year – 2 108 70 135 190 505

Disposal – – (2) (1) (305) – (308)

Disposal of subsidiary (Note 8) – – (1,025) (991) (1,079) – (3,095)

Currencytranslationadjustment – 2 5 20 34 7 68

Balance at 30 June 2013 – 4 97 144 74 197 516

Carrying amount

Balance at 30 June 2013 – 99 217 12 200 34,680 35,208


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7. Other property, plant and equipment (Continued)

Asat30June2014,theGroup’smotorvehicleswithcarryingamountofapproximately$100,083(2013:$138,000)werepurchased under finance lease agreements as disclosed in Note 21 to the financial statements.

TheGroup’splant andequipmentwith an aggregate carryingamountof approximately $64,000 (2013: $34,737,000)asat30June2014werepledgedasasecurityforthebankloanasdisclosedinNote20.1tothefinancialstatements.ThroughthefinanceleasearrangementwithFramExplorationASAasdisclosedinNote9,thedrillingrigsaredeemedto be disposed. The title of the drilling rigs remains with the Group and continues to be pledged until full settlement of thebankloan.

Duringthefinancialyear,theGroup’sadditionstootherproperty,plantandequipmentwerefinancedasfollows:

Group

2014 2013$’000 $’000

Cashpaymentstoacquireotherproperty,plantandequipment 2,138 29,700

Contributionbynon-controllinginterestfortheacquisitionofdrillingrigs – 4,636

Reclassificationfromdepositpaidinpriorfinancialyear – 107

Acquiredunderfinanceleaseagreements – 145

Totaladditionstootherproperty,plantandequipment 2,138 34,588

8. Investments in subsidiaries

Company

2014 2013$’000 $’000

Unquotedequityshares,atcost 39,564 39,564

Capital contribution in the form of share options issued to employees of a subsidiary 2,318 –

41,882 39,564

Particulars of subsidiaries:

Name of subsidiary(Country of incorporation)

Effective equity interest held by the Group Principal activities

2014 2013% %

LoyzOilPte.Ltd.(1)

(Singapore)100 100 Explorationandproductionofoil

and gas and investment holding

InterlinkPetroleumLimited(2)

(India)51.8 51.8 Explorationandproductionofoil


Loyz NZ Ventures Limited(3)

(New Zealand)51 51 Explorationandproductionof

oil and gas

LoyzOilAustraliaPtyLtd(4)

(Australia)100 100 Explorationandproductionofoil


LoyzOilPhilippinesPte.Ltd.(5)

(Singapore)100 100 Dormant

LoyzOilNewZealandLtd(5)

(New Zealand)100 100 Dormant


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8. Investments in subsidiaries (Continued)

Name of subsidiary(Country of incorporation)

Effective equity interest held by the Group Principal activities

2014 2013% %

LoyzOilHKLimited(5)

(Hong Kong)100 – Dormant

LoyzOilMalaysiaSdnBhd(5)

(Malaysia)100 – Dormant

LoyzOilThailandPte.Ltd.(1)

(Singapore)100 – Explorationandproductionofoiland

gas and investment holding

LoyzUSAHoldingsLLC(5)

(UnitedStatesofAmerica)100 100 Investment holding

LoyzRexDrillingServicesLLC(4)

(UnitedStatesofAmerica)100 51 Explorationandproductionofoiland

gas and provision of drilling andrelated oil field support services

Loyz America Inc.(4)

(UnitedStatesofAmerica)100 100 Explorationandproductionofoiland

gas and investment holding

Notes:(1) AuditedbyBDOLLP,Singapore.(2) AuditedbyMZSK&Associates,CharteredAccountants,amemberfirmofBDOInternational,forconsolidationpurpose.(3) AuditedbyBDOTauranga,NewZealand.(4) AuditedbyBDOLLP,Singapore,forconsolidationpurpose.(5) Notrequiredtobeauditedasthesubsidiaryisdormantduringthefinancialyear.

Acquisition of subsidiary

On9July2013,LoyzOilPte.Ltd. (“LoyzOil”)acquired1,200ordinary sharesofLoyzOilHKLimited (“LoyzHK”),acompanyincorporatedinHongKongandformerlyknownasZenithOil&GasLimited,representing60%equityinterest,forcashconsiderationofUS$1,200.ThecarryingamountoftheacquirednetidentifiableassetsofLoyzHKasatdateofacquisitionwasUS$700.Intheopinionofthemanagement,thecarryingamountsapproximatetheirfairvaluesasatdateofacquisition.

On29May2014,LoyzOilacquiredanadditional800ordinarysharesofLoyzHK,representingtheremaining40%equityinterest,forcashconsiderationofUS$800.LoyzHKremainsdormantsincedateofacquisition.

Incorporation of subsidiaries

(i) On26February2014,LoyzOilincorporatedLoyzOilThailandPte.Ltd.(“LoyzThailand”),witharegisteredsharecapitalof$10,000.

(ii) On17April2014,LoyzOilandLoyzHKincorporatedLoyzOilMalaysiaSdnBhd(“LoyzMalaysia”),withanissuedandfully-paid-upsharecapitalofRM400,000($154,000equivalent).

Acquisition of non-controlling interest

On7February2014,LoyzUSAHoldingsLLC(“LoyzUSA”),completedtheacquisitionof49%equityinterestinLoyzRexDrillingServicesLLC(“LoyzRex”)fromitsnon-controllinginterestforatotalconsiderationofUS$4,500,000($5,665,000equivalent)whichwassatisfiedby:

(i) cashofUS$1,000,000($1,255,000equivalent);and

(ii) issuanceof12,260,217newordinarysharesoftheCompanyamountingtoUS$3,500,000($4,410,000equivalent).


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Acquisition of non-controlling interest (Continued)

Asaresultofthisacquisition,LoyzRexbecameawholly-ownedsubsidiaryofLoyzUSA.ThecarryingamountofthenetliabilitiesofLoyzRexandtheadditional interestacquiredwasUS$1,138,000($1,391,000equivalent)andUS$558,000($682,000equivalent)respectively.Thedifferencebetweentheconsiderationandthecarryingamountoftheadditionalinterestacquiredwasrecognisedinretainedearnings.Thepartiesalsoagreedthattheshareholders’loanduetothenon-controllinginterestinthebooksofLoyzRexamountingtoUS$4,657,000($5,879,000equivalent)asatthecompletiondate will be waived by the shareholder and there will be no further claims thereafter (Note 27).

Binding Memorandum of Understanding with Enso Oil & Gas Limited

On20June2014,theCompanyenteredintoabindingmemorandumofunderstanding(the“MOU”)withEnsoOil&GasLimited(“Enso”)inrelationtoEnso’sproposedinvestmentintheCompany’s51.8%-ownedsubsidiary,InterlinkPetroleumLimited (“Interlink”), and the recommendation of suitable exploration and production assets in the Irkutsk region ofRussiabyEnsotobeacquiredbyInterlink.TheMOUisvalidforaperiodof60daysfromthedateoftheMOUandunlessextendedbymutualconsentbyallparties.Asattheendofthereportingperiod,nodefinitiveagreementhasbeensignedbetween the parties.

Disposal of subsidiary and discontinued operations

On1April2013,theCompanydisposedtheentireequityinterestinSimSiangChoonHardware(S)PteLtd(“SSCH”)toMr.SimSiangChoon,anindividualshareholder,forcashconsiderationof$9,000,000.

As the Group’s Bathroom, Kitchen and Project segments arise solely from SSCH operations, these segments werepresented as “Discontinuedoperations” upon thedisposal of SSCH in accordancewith FRS105Non-current Assets Held for Sale and Discontinued operations.SSCHresultswerepresentedseparately in theconsolidatedstatementofcomprehensive income as “Profit for the financial year from discontinued operations”.

TherelevantcontributionsfromSSCHtotheGroupwere:

Consolidated statement of comprehensive income

Group2013

$’000

Revenue 11,709Cost of sales (6,029)Gross profit 5,680

Other items of incomeInterest income 8Otherincome 973

Other items of expenseDistribution costs (240)Administrativeexpenses (2,310)Finance costs (5)Otherexpenses (3,326)Othercharges (1) (347)Profitbeforeincometax 433Incometaxexpense (7)Profit for the financial year from discontinued operations 426Profit attributable to owners of the parent 426Total comprehensive income attributable to owners of the parent 426

(1) OtherchargesrefertothelossondisposalofSSCH.


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Consolidatedstatementofcashflows

Group2013

$’000

Operatingactivities 1,159

Investing activities (202)

Finance activities 52

Netcashinflows 1,009

Earnings per share

Group2013

$’000

Earnings per share from discontinued operations attributable to owners of the parent

- Basic (cents) 0.13

- Diluted (cents) 0.13

Weighted average number of ordinary shares during the financial year applicable to basic earnings per share from discontinued operations (’000) 317,767

Dilutive share awards (’000) 240

Dilutive convertible preference shares (’000) 15,000

Weighted average number of ordinary shares during the financial year applicable to diluted earnings per share from discontinued operations (’000) 333,007

The basic and diluted earnings per share from discontinued operations are calculated by dividing the profit for the financial year from discontinued operations attributable to owners of the parent by the weighted average number of ordinary shares for basic earnings per share computation and weighted average number of ordinary shares for diluted earnings per share computation respectively.


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TheeffectsofthedisposalofSSCHonthecashflowswereasfollows:

Group2013

$’000

Property,plantandequipment 509

Inventories 7,510

Trade and other receivables 915

Otherassets 148

Prepayments 45

Cashandbankbalances 3,574

Trade and other payables (1,820)

Finance lease payable (133)

Otherliabilities (1,337)

Currentincometaxpayable (47)

Shareoptions (17)

Loss on disposal (347)

Disposal price 9,000

Less:Cashandbankbalances (3,574)

Cashflowsondisposal,netofcashdisposed 5,426

9. Available-for-sale financial asset

Group

2014 2013$’000 $’000

Unquotedequitysecuritiesatcost 51,609 –

On30June2014,theGroupcompletedtheacquisitionof20%equityinterestinFramExplorationASA(“Fram”)foranaggregateconsiderationofUS$41,400,000($51,609,000equivalent)whichwassatisfiedasfollows:

(i) US$6,500,000($8,042,000equivalent)bywayofaset-offofLoyzUSA’sobligationtopayforthenewFramsharesagainstFram’spromissorynoteissuedtoLoyzUSA;

(ii) US$27,900,000($34,780,000equivalent)bywayofleaseoftheGroup’sdrillingrigs(Note7)andcalloptiononthoserigs;

(iii) US$4,000,000($5,047,000equivalent)bywayofcash;and(iv) US$3,000,000($3,740,000equivalent)bywayofissueof11,301,000newordinarysharesoftheCompany. UnderthetermsoftheleaseagreementwithFram,Framwill leasethe2drillingrigsfor5yearsandhasanoptiontopurchasetherigsatUS$1after900daysfromthedateofthetransaction.ThelegaltitleoftherigsremainswiththeGroupuntiltheoptiontopurchaseisexercisedbyFram.

TheGrouphasassesseditsinvolvementinFramandconcludedthatithasnosignificantinfluenceasitcannotparticipatein Fram’s financial and operating decisions.

ThefairvalueoftheGroup’s investment inunquotedequity investmentthat iscarriedatcosthasnotbeendisclosedbecauseitisnotpracticabletodeterminethefairvalueduetothelackofquotedmarketpricesandtheassumptionsusedin valuation models to value this instrument cannot be reliably measured.

ThecurrentprofileoftheGroup’savailable-for-salefinancialassetasattheendofthereportingperiodisUnitedStatesdollar.


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10. Intangible assets

Group Goodwill

Acquired pre- exploration

data Software

Overriding royalty

interest Total$’000 $’000 $’000 $’000 $’000

Cost

Balance at 1 July 2013 34,029 623 242 – 34,894

Additions 29,038 117 19 3,598 32,772

Currencytranslationadjustment (352) – (4) – (356)

Balance at 30 June 2014 62,715 740 257 3,598 67,310

Accumulated amortisation

Balance at 1 July 2013 – – 83 – 83

Amortisation – – 49 – 49

Currencytranslationadjustment – – 1 – 1

Balance at 30 June 2014 – – 133 – 133

Carrying amount

Balance at 30 June 2014 62,715 740 124 3,598 67,177

Cost

Balance at 1 July 2012 34,029 623 256 – 34,908

Additions – – 2 – 2

Currencytranslationadjustment – – (16) – (16)

Balance at 30 June 2013 34,029 623 242 – 34,894

Accumulated amortisation

Balance at 1 July 2012 – – 37 – 37

Amortisation – – 49 – 49

Currencytranslationadjustment – – (3) – (3)

Balance at 30 June 2013 – – 83 – 83

Carrying amount

Balance at 30 June 2013 34,029 623 159 – 34,811

Theacquiredpre-explorationdatarefertotheproprietarytechnologiesreportsreceivedfromathirdparty(Note13).Forimpairmenttestingpurpose,theacquiredpre-explorationdataisallocatedtoLoyzOilasthecash-generatingunit.

Amortisationexpenseamountingtoapproximately$46,000(2013:$48,000)wasincludedinE,E&DassetsasdisclosedinNote5tothefinancialstatementsandtheremainingbalancewasincludedin“administrativeexpenses”lineiteminprofit or loss.

Duringthefinancialyear,theGroupacquiredandwasassigned28.5%overridingroyaltyinterestinPetroleumExplorationPermit38479forcashconsiderationofUS$2,850,000($3,598,000equivalent)fromarelatedparty,acompanyownedbyakeymanagementpersonneloftheGroup.TheoverridingroyaltyinterestentitlestheGrouprightstotheproportionateinterest in the gross production of oil and gas from the permit area. The overriding royalty interest has been allocated to Loyz NZ as the cash-generating unit for impairment testing purpose.


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10. Intangible assets (Continued)

Goodwill

GoodwillarisingonacquisitionofLoyzOil, Interlinkand theThailandoperations (Note12.3) isattributablemainly tothe potential for the recognition of or the access to additional reserves and the synergies expected to be achievedfromintegratingthe investees intotheGroup’sexistingbusiness.Noneof thegoodwill recognised isexpectedtobedeductibleforincometaxpurposes.

Impairment testing of goodwill

GoodwillisallocatedtothefollowingCGUsforimpairmenttesting:

• LoyzOil• Interlink• Thailandoperations

ThecarryingamountofgoodwillallocatedtoeachCGUisasfollows:

2014 2013$’000 $’000

LoyzOil 28,130 28,130

Interlink 5,899 5,899

Thailand operations (Note 12.3) 28,686 –

62,715 34,029

The recoverable amount of the Group’s goodwill has been determined based on value-in-use calculations or independent valuationreports,whereapplicable,fortheassetsownedbyrespectiveCGUsusingmanagement-approveddiscountedcashflowprojectionscoveringaperiodof7–21years,atpre-taxdiscountrateof5-15%andforecastedannualproductionvolume. The forecasted growth rate beyond periods ranging from 3rd to 5th years is 2% (2013: 2.5%).

ManagementhasassessedthatalongerperiodforthefinancialforecastoftheaboveCGUsareappropriateconsideringthe long-term development plans for the fields and the terms of the respective permits.

The value-in-use calculations are most sensitive to the following assumptions:

• Productionvolumes;• Discountrate;and• Crudeoilandgasprices.

Estimatedproductionvolumesarebasedondetaileddataforthefieldsandtakingintoaccountthedevelopmentplansfor the fields agreed by management as part of the long-term planning process.

ThediscountraterepresentsthecurrentmarketassessmentoftheriskspecifictotheCGU,regardingthetimevalueofmoneyandindividualrisksofunderlyingassetswhichhavenotbeenincorporatedinthecashflowestimates.ThediscountratecalculationisbasedonthespecificcircumstancesoftheCGUsandderivedwithreferencetotheweightedaveragecostofcapital(WACC)oftheCGUs,adjustedfortherisksspecifictotheCGUs.

Crude oil and gas prices are based on publicly available forecast commodity prices and are adjusted for quality,transportation fees, and regional price differences.

ManagementbelievesnoreasonablypossiblechangeinanyofthekeyassumptionswouldcausethecarryingamountoftheCGUandrelatedgoodwilltoexceedtheirrecoverableamount.


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11. Trade and other receivables

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

Current

Trade receivables

- third party 3,071 – – –

Otherreceivables

- third parties 457 562 – –

- related company – 3 – 3

- subsidiaries – – – 13

3,528 565 – 16

Deferred drilling costs – 2,731 – –

3,528 3,296 – 16

Non-current

Otherreceivables

- subsidiaries – – 69,969 30,821

3,528 3,296 69,969 30,837

The trade amounts due from a third party are unsecured, interest-free and repayable within the normal credit terms of 30 days (2013: Nil).

The non-trade receivables from third parties are unsecured, interest-free and repayable on demand.

Thenon-tradereceivablesfromrelatedcompanyareunsecured,interest-freeandrepayableondemandandexpectedtobe settled in cash.

Thenon-tradeamountduefromsubsidiariesrepresentloanstosubsidiarieswhichareunsecuredandhavenofixedtermofrepayment.Theloansbearaninterestrateof2.8%(2013:2.8%)perannumandisexpectedtobesettledincash.Itisnotpracticabletodeterminethefairvalueoftheseloansasat30June2014asthereisnofixedtermofrepayment.

Deferred drilling costs in the previous financial year relate to drilling costs incurred on each well which were charged to profit or loss when drilling operation was completed in the current financial year.

TheGroup’stradeandotherreceivablesamountingtoapproximately$249,000(2013:$160,000)issubjecttoafloatingchargeassecurityforthebankingfacilitiesassetoutinNote20.1tothefinancialstatements.

Movementsinallowanceforcurrentotherreceivableswereasfollows:

Group and Company

2014 2013$’000 $’000

Balance at beginning of financial year – 1,751

Write-backofallowanceduringthefinancialyear – (1,751)

Balance at end of financial year – –

Inthepreviousfinancialyear,theGrouprecoveredtheotherreceivableof$2,000,000pertainingtoarefundabledepositpaidbytheCompanytoacquire100%equityinterestinathirdparty.Accordingly,awritebackoftherelatedallowancefordoubtfulreceivablesof$1,751,000wasrecognisedinprofitorlossunder“otherincome”lineitem.


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11. Trade and other receivables (Continued)

Tradeandotherreceivables,excludingdeferreddrillingcosts,aredenominatedinthefollowingcurrencies:

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

Singaporedollar – 19 27,943 16,475

UnitedStatesdollar 249 167 1,278 13

Thai baht 3,166 – – –

Australian dollar – 3 36,591 10,901

New Zealand dollar 109 306 4,157 3,448

Indian rupee 4 70 – –

3,528 565 69,969 30,837

12. Interest in jointly controlled operations/arrangements similar to jointly controlled operations

12.1 Interest in jointly controlled operation with Trident

On26November2011,LoyzOilAustraliaPtyLtd(“LoyzAustralia”)enteredintoafarm-inagreementwithTridentEnergyLimited(“Trident”)inrelationtotheacquisitionofPetroleumExplorationPermitVIC/P62(the“Permit”)overAreaV04-2intheVictorianAdjacentArea,Australia(the“PermitArea”)grantedtoitbytheCommonwealth-VictoriaOffshorePetroleumJointAuthority.

Pursuant to the farm-in agreement, Loyz Australia shall have:

(i) 20%interestuponpaymentofA$650,000andsubjecttogovernmentapprovalofthetransferofinterest;(ii) Further31%interestuponcompletionofthe3DSeismicProgram;and(iii) Further19%uponissuanceofthe3DSeismicInterpretationReport.

As at 30 June 2013, the Group held 51% interest in the Permit.

Duringthefinancialyear,theGroupobtainedadditional19%interestinthePermitafterissuanceofthe3DSeismicInterpretationReport.Accordingly,theGroupheld70%interestinthejointventureasat30June2014.

Pursuant to theminimum requirements approved by VictoriaOffshore Petroleum Joint Venture Authority, LoyzAustraliahasanobligationtocompletethe175sqkm3DSeismicacquisition,processingandinterpretationbeforetheexpirationofthePermit(i.e.10July2019).

TheLoyz-TridentjointlycontrolledoperationisauditedbyGrantThorntonAustralia.

12.2 Interest in jointly controlled operation with Rex and Fram

Inpriorfinancialyear,LoyzOilenteredintoaParticipationandExplorationAgreement(“PEA”)withRexOil&GasLtd(“Rex”)andFramExplorationASA(“Fram”).UnderthePEA,LoyzandRexshall:

(i) providetwoonshoredrillingrigsforuseintheoperations;and(ii) drill80wellsinresource-richplainsofColoradoandNorthDakotaatthecommittedtotalestimateddrilling

cost of US$40,000,000 in consideration for 40%guaranteed net revenue interest in eachwell drilled andcompletedtobedividedequallybetweenLoyzOilandRex.LoyzOilandRexeachhastheoptiontoconverttheirrespectivenetrevenueinterestinthewellsinto13%workinginterestinalloftheareasofmutualinterest,Fram leases and Fram assets as agreed under the PEA.


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12. Interest in jointly controlled operations/arrangements similar to jointly controlled operations (Continued)

12.2 Interest in jointly controlled operation with Rex and Fram (Continued)

Asat30June2013, LoyzOil andRex, throughLoyzRexDrillingServicesLLC,a company incorporatedby thetwopartiesforthepurposeofthejointlycontrolledoperation,hadprovided2onshoredrillingrigs(Note7)andincurreddrilling costs amounting to approximately $2,731,000whichweredeferredpending completionof thedrilling operations (Note 11).

Followingthecompletionoftheacquisitionof20%equityinterestinFramon30June2014(Note9),thePEAwasterminated.

12.3 Interest in the Thailand operations

On30April2014,LoyzThaihascompletedtheacquisitionof20%participatinginterestinPetroleumConcessionsNos. 1/2527/24, 3/2546/60 and 5/2546/62 located about 300 km north of Bangkok, Thailand (the “Thailandoperations”) from Carnarvon Thailand Limited (“CVN”). The management has assessed that, considering the voting procedureprescribedintheInternationalOperatingAgreements(“IOA”)withtheoperatorandCVN,LoyzThaidoesnothavejointcontrolintheThailandoperations.PursuanttothetermsoftheIOA,theGroupwillsharetherightsandinterests;theobligations,liabilitiesandexpensesincurredbytheoperator,inaccordancetoitsparticipatinginterest,andaccordingly,itisanarrangementsimilartoajointlycontrolledoperation.

TheGroupacquiredtheinterestintheThailandoperationsinordertoimproveitsfinancialresultsandcashflowsastheThailandoperationsareprofitablewithoilreserves.Inaddition,theacquisitionisinlinewiththeGroup’sstrategyofaddingprimeassetstoitsexistingportfolio.

Theaggregateconsiderationfortheacquisition,includingfuturefinancechargesforthedeferredconsiderationasdisclosedbelow,wasUS$65,000,000($82,023,000equivalent)whichwas/willbesatisfiedasfollows:

(i) cashpaymentofUS$33,000,000($41,642,000equivalent);and(ii) deferred consideration of US$32,000,000 ($40,381,000 equivalent) (Note 23) payable annually starting 30

November2015foranamountequalto12%oftheconcessionrevenueforthefinancialyear,notexceedingUS$10,000,000foranygivenpaymentyear.Thebalancewasmeasuredatitspresentvalueatinitialrecognitionandsubsequentlycarriedatamortisedcost.

ThecarryingamountsoftheacquiredidentifiableassetsandliabilitiesoftheThailandoperationsasatthedateofacquisitionwere:

Group2014

$’000

Oilandgasproperties 69,749

Otherproperty,plantandequipment 1,435

Inventories 3,391

Trade and other receivables 2,103

Otherassets 983

Prepayments 46

Cashandcashequivalents 3,520

Deferredtaxliability (30,636)

Currentincometaxpayable (366)

Trade and other payables (3,480)

Netidentifiableassetsacquired 46,745


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12. Interest in jointly controlled operations/arrangements similar to jointly controlled operations (Continued)

12.3 Interest in the Thailand operations (Continued)

The independent valuation of the Thailand operations for the purpose of accounting for the business combination isinprogressandexpectedtobecompletedsubsequenttotheauthorisationofthesefinancialstatements.Inviewthatthefairvaluesasatacquisitiondatearenotavailablependingthecompletionofthevaluation,thecarryingamountsasatacquisitiondatehavebeenusedasprovisionalamountsinthemeasurementofidentifiableassetsacquiredandliabilitiesassumed.

Theeffectsoftheacquisitiononthecashflowswereasfollows:

Group2014

$’000

Netidentifiableassetsacquired(asabove) 46,745

Goodwill (Note 10) 29,038

Purchase consideration 75,783

Less:

Present value of deferred consideration 34,141

Cashandcashequivalentsacquired 3,520

Cashoutflowsonacquisition,netofcashacquired 38,122

Present value of deferred consideration (as above) 34,141

Add future finance charges 6,240

Total deferred consideration 40,381

From the date of acquisition, the Thailand operations generated revenue of $8,658,000 and net profit ofapproximately$3,032,000,whichhavebeenincludedintheGroup’sprofitorlossforthecurrentfinancialyear.TheThailand operations are audited by Crowe Horwath Perth, Australia.

ItisimpracticabletodisclosetheGroup’srevenueandprofitsaftertaxifthecombinationhadtakenplaceatthebeginning of the financial year, as the financial information is not readily available to the Group, who has no control norjointcontrolovertheThailandoperations.

ThefollowingamountsrepresentstheassetscontrolledandliabilitiesandtheexpensesincurredbytheGroupthatwere included in the Group’s financial statements:

Group

2014 2013$’000 $’000

Assets and Liabilities

Non-current assets 77,558 7,861

Current assets 14,360 9

Non-current liabilities (32,872) –

Current liabilities (4,083) (6)

Profit or loss

Income 8,709 –

Expenses (5,695) (75)


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13. Prepayments

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

Current 190 380 48 –

Non-current 3,527 3,644 – –

3,717 4,024 48 –

TheGroup’sprepaymentsclassifiedasnon-currentassetsasat30June2014amountingtoapproximately$3,527,000(US$2,881,000) (2013: $3,644,000 (US$2,976,000)) represent prepayments in relation to the proposed co-operationbetweenLoyzOilandathirdpartytoutilisecertainproprietarytechnologiesofthelattertoobtaininformationonthepossible presence of hydrocarbon reserves in selected areas.

14. Inventories

Group

2014 2013$’000 $’000

Storesandconsumables 3,552 328

Crude oil 17 –

3,569 328

15. Other assets

Group

2014 2013$’000 $’000

Deposits to secure purchase of goods 112 34

Deposits to secure services 311 80

Reservationdeposits 758 –

1,181 114

ReservationdepositsrepresentsthedepositspaidtotheDepartmentofMineralFuelsofThailandtosecuretheexplorationoperations in Thailand.

Otherassetsaredenominatedinthefollowingcurrencies:

Group

2014 2013$’000 $’000

Singaporedollar 21 25

Thai baht 923 –

Malaysiaringgit 6 –

UnitedStatesdollar 4 –

Indian rupee 227 89

1,181 114


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16. Cash and cash equivalents

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

Cashatbanks 8,390 4,924 1,125 2,398

Fixeddeposits 38 788 – –

8,428 5,712 1,125 2,398

Fixeddepositshaveanaveragematurityof11months(2013:10months)fromtheendofthereportingperiodwiththeeffective interest rates ranging from 9.15% to 9.25% (2013: 9.15% to 9.25%) per annum.

Cashandcashequivalentsperconsolidatedstatementofcashflowscomprisethefollowing:

Group

2014 2013$’000 $’000

Cashandcashequivalentsperconsolidatedstatementoffinancialposition 8,428 5,712

Cash restricted in use* (717) (2,149)

Bankoverdraft(Note20) (537) –

Cashandcashequivalentsperconsolidatedstatementofcashflows 7,174 3,563

(*)Thisisforbankbalanceheldbybankerstosecurecertaincreditfacilitiesgrantedtocertainsubsidiaries.

Cashandcashequivalentsaredenominatedinthefollowingcurrencies:

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

Singaporedollar 635 1,669 480 1,375

Australian dollar 42 31 – –

UnitedStatesdollar 741 3,182 645 1,023


New Zealand dollar 1 – – –

Thai Baht 6,931 – – –

8,428 5,712 1,125 2,398


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17. Ordinary shares

Group and Company

2014 2013Numberof shares $’000

Numberof shares $’000

Issued and fully paid:

At beginning of financial year 333,780,910 68,014 266,520,910 42,229

Issue of shares(1) 62,260,217 21,910 51,160,000 20,167

Redeemableexchangeablepreferencesharesexercised(2) 15,000,000 5,888 15,000,000 6,000

Shareawardsexercised(3) 240,000 96 1,100,000 322

Shareissueexpense – (26) – (704)

At end of financial year 411,281,127 95,882 333,780,910 68,014

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares have no par value and carry one vote per share without restriction.

(1) On24October2013,theCompanyallottedandissued50,000,000newordinarysharesatanissuepriceof$0.35per new share by way of a placement.

On7February2014,theCompanyallottedandissuedatotal12,260,217newordinarysharesattheexercisepriceof$0.3597aspartoftheconsiderationtoacquirethe49%interestsinLoyzRexDrillingServices,LLC(Note8).

(2) On25July2013,VenstarInvestmentsLtdandVenstarInvestmentsIILtdconvertedatotalof6,000,000preferencesharesinto15,000,000newordinarysharesattheexercisepriceof$0.40inrelationtotheexchangeofthesecondtrancheredeemableexchangeablepreferencesharesasdisclosedinNote18tothefinancialstatements.

(3) On18December2013,theCompanyallottedandissuedanaggregateof240,000ordinarysharesinthecapitaloftheCompanyatanissuepriceof$0.40perNewShare,pursuanttotheexerciseofawardsgrantedunderthePSP.

Thesenewlyissuedsharesrankpari passuinallrespectswiththeexistingordinaryshares.

18. Convertible preference shares

On25July2011,pursuant to theSubscriptionAgreemententered intoby theCompanyand its subsidiary,LoyzOil,withVenstarInvestmentsLtdandVenstarInvestmentsIILtd(the“Subscribers”),LoyzOilissued12millionredeemableexchangeablepreferencesharestotheSubscribersforaggregateproceedsof$12,000,000.

PursuanttotheSubscriptionAgreement,eachholderofthepreferencesharesshallhavetherighttoexchange50%ofthepreferencesharesheld intoordinarysharesoftheCompanyattheExchangePriceof$0.40(“ExchangePrice”)attheFirstTrancheMaturityPeriod,andfurther50%ofthepreferencesharesattheExchangePriceattheSecondTrancheMaturityPeriod.

Ifsuchholderdoesnotexerciseitsrighttoexchangethepreferencesharesasdiscussedabove,itmaycalluponLoyzOiltoredeemthepreferencesharesattheredemptionpriceof$0.25(“PutOption”).

IntheeventthattheholderdoesnotexercisethePutOption,thepreferencesharesnotredeemedbyLoyzOilshallbeexchangedintoordinarysharesoftheCompanyattheExchangePrice.

As at 30 June 2014, 6,000,000 (2013: 6,000,000) convertible preference shares had been converted into 15,000,000 (2013: 15,000,000) ordinary shares of the Company.


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18. Convertible preference shares (Continued)

The convertible preference shares were accounted for by Group as follows:

Group

2014 2013Number of preference

shares $’000

Number of preference

shares $’000

Equity


Preferencesharesexercised (4,500,000) (4,388) (4,500,000) (4,387)

At end of financial year – – 4,500,000 4,388

Liabilities


Preferencesharesexercised (1,500,000) (1,500) (1,500,000) (1,500)

At end of financial year – – 1,500,000 1,500

TosecuretheperformanceoftheobligationsowedbytheCompanyanditssubsidiary,LoyzOil,totheSubscribersundertheSubscriptionAgreement,theCompanyhasagreedtopledgealloftheordinarysharesinrespectoftheentireissuedsharecapitalofLoyzOilinfavouroftheSubscribers.

AsthesharesofLoyzOilarepledgedassecurity,itsnettangibleassetsisconsideredpledgedassecurityatGrouplevel.

Asat30June2014,thepledgeontheordinarysharesofLoyzOilwasdischargedfollowingthefullconversionoftheconvertible preference shares.

19. Reserves

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

Shareoption/awardreserve 2,603 265 2,603 265

Foreign currency translation account (1,219) (1,549) – –

1,384 (1,284) 2,603 265

Share option reserve

LoyzEnergyEmployeeShareOptionScheme(the“ESOS”)

The Company has a share options scheme which provides for the grant of incentive share options to employees and Directors of the Company.

UndertheESOS,thetotalnumberofshares inrespectofwhichthecommitteemaygrantoptionsonanydate,whenadded to the number of shares issued and issuable or delivered and deliverable in respect of (a) all options granted under theESOS,and(b)allawards,sharesandoptionsgrantedunderanyothershareoption,share incentive,performanceshareor restrictedshareplan implementedby theCompanyand for the timebeing in force,shallnotexceedfifteenpercent(15.0%)ofthenumberofallissuedshares(excludingtreasuryshares,asdefinedintheAct)onthedayprecedingthatdate.TheESOSallowstheissueofoptionswithasubscriptionpriceatadiscountofupto20%ofthemarketprice,or its nominal value, whichever is higher.


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19. Reserves (Continued)

Share option reserve (Continued)

LoyzEnergyEmployeeShareOptionScheme(the“ESOS”)(Continued)

Anoptionmaybeexercisedinwholeorinpart,afterthesecondanniversaryofthedateofgrantofthatoptionbutbeforethe fifth anniversary of the date of grant of that option in the case where options are granted at a discount, or after the first anniversary of the date of grant of that option in the case where options are not granted at a discount. The lapsing of options is provided for upon the occurrence of certain events, which includes:

(a) theterminationofthegrantee’semployment;(b) misconductonthepartofthegranteeasdeterminedbytheCommittee;(c) bankruptcyofthegrantee;(d) thecompanybywhichthegranteeisemployedceasingtobeacompanywithintheGroup;and(e) the winding-up of the Company (voluntary or otherwise).

ActivitiesundertheESOS:

The outstanding number of options at the end of the reporting period was:

Exercise price Grant date Exercise period

Number of options as at 30 June

2014

Number of options as at 30 June

2013

$0.4200 18 December 2012 18 December 2013 to 18 December 2017 1,280,000 1,780,000

$0.4258 16 January 2013 16 January 2014 to 16 January 2018 1,200,000 1,200,000

$0.4200 24October2013(a) 24October2014to24October2018 16,310,000 –

$0.4200 24October2013(b) 24October2015to24October2018 4,200,000 –

$0.4200 24October2013(c) 24October2016to24October2018 4,000,000 –

$0.4200 11 February 2014 11 February 2015 to 11 February 2019 650,000 –

27,640,000 2,980,000

Thetablebelowsummarisesthenumberofoptionsthatwereoutstanding,theirweightedaverageexercisepriceasattheend of the reporting period as well as the movements during the financial year.

2014 2013

Number ofoptions

Weighted average exercise

price $

Number ofoptions

Weighted average exercise

price $

Outstandingat1July 2,980,000 0.4223 – –

Granted 25,530,000 0.4200 3,080,000 0.4223

Cancelled (870,000) 0.4200 (100,000) 0.4223

Outstandingat30June 27,640,000 0.4202 2,980,000 0.4223

Exercisableat30June 2,480,000 0.4223 – –

The share options outstanding as at the end of the reporting period have a weighted average remaining contractual life of 4 (2013: 5) years.

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Share option reserve (Continued)


Theweightedaveragefairvalueofoptionsgrantedduringthefinancialyearwas$0.1310(2013:$0.1429).Theestimateof the fair value of each option issued on grant date was based on the Trinomial pricing model option. In order to approximatetheexpectationsthatwouldbereflectedinacurrentmarketornegotiatedexchangepricefortheseoptions,the calculation takes into consideration factors like behavioral considerations and non-transferability of the optionsgranted.

The Trinomial option pricing model uses the following assumptions:

24 October 2013(c)

24 October 2013(b)

24 October 2013(a) / 11

February 2014

16 January2013

18 December

2012

Weightedaverageshareprice($) 0.42 0.42 0.42 0.42 0.40

Weightedaverageexerciseprice($) 0.42 0.42 0.42 0.4258 0.42

Dividendyieldexpected 0% 0% 0% 0% 0%

Risk-freeannualinterestrates 0.587% 0.522% 0.457% 0.253% 0.293%

Expectedvolatility 53% 51% 42% 55% 53%

Expectedlife 4 years 3.5 years 3 years 3 years 3 years

ExpectedvolatilitywasdeterminedbycalculatingthehistoricalvolatilityoftheCompany’ssharepriceoveraperiodsimilartotheexpectedlivesoftheoption.Theexpectedlivesusedinthemodelhavebeenadjusted,basedonmanagementbest’sestimates,fortheeffectsofnon-transferability,exerciserestrictionsandbehaviouralconsiderations.

Share awards reserve

LoyzEnergyPerformanceSharePlan

The Company has a performance share plan which provides for the grant of incentive share awards to employees and directors.

UnderthePSP,thetotalnumberofsharesinrespectofwhichthecommitteemaygrantawardsonanydate,whenaddedto the number of shares issued and issuable or delivered and deliverable in respect of (a) all awards granted under the PSP,and(b)allawards,sharesandoptionsgrantedunderanyothershareoption,shareincentive,performanceshareorrestrictedshareplanimplementedbytheCompanyandforthetimebeinginforce,shallnotexceed15%ofthenumberofallissuedshares(excludingtreasuryshares,asdefinedintheAct)onthedayprecedingthatdate.Inrelationtoeachperformance-related awards, the release of awards is based on the sole discretion of the Committee. The Committee reviews the performance conditions in respect of the awards and determines whether these have been satisfied. The Company shall release to the grantee the share awards on the vesting period in case where awards are not performance-related.

The lapsing of the awards is provided for upon the occurrence of certain events, which includes:

(i) theterminationofthegrantee’semployment;(ii) Non-executivedirectorceasingtobeadirectoroftheGroup;(iii) thebankruptcyofthegrantee;(iv) thedeathofthegrantee;(v) thebreachbythegranteeofanytermsontheawards;and(vi) the misconduct of the grantee as determined by the Committee in its discretion.

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Share awards reserve (Continued)

ActivitiesunderthePSP:

The outstanding number of awards at the end of the reporting period was:

Market price on the date of grant Grant date Exercise period

Number of awards as

at 30 June 2014

Number of awards as

at 30 June 2013

$0.3947 24October2013 24October2014to24October2018 1,970,000 –

$0.4000 18 December 2012 18 December 2013 to 18 December 2017 – 240,000

1,970,000 240,000

The table below summarises the number of awards that were outstanding as at the end of the reporting period as well as the movements during the financial year.

2014 2013Number of

awards $Number of

awards $

At 1 July 240,000 0.4000 – –

Granted 2,070,000 0.3947 240,000 0.4000

Exercised (240,000) 0.4000 – –

Cancelled (100,000) 0.3947 – –

At 30 June 1,970,000 0.3947 240,000 0.4000

Foreign currency translation account

The foreign currency translation account comprises foreign exchange differences arising from the translation of thefinancial statements of foreign operations whose functional currency is different from that of the Group’s presentation currency and is not distributable.

20. Bank borrowings

Group

2014 2013$’000 $’000

Current

Secured

-BankloanI 19,297 5,451

-BankloanII 6,802 1,262

-BankloanIII 14,608 –

-BankloanIV 322 –

-Bankoverdraft 537 –

41,566 6,713


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20. Bank borrowings (Continued)

Group

2014 2013$’000 $’000

Non-current

Secured

-BankloanI – 17,596

-BankloanII 4,335 10,096

-BankloanIII 25,281 –

29,616 27,692

71,182 34,405

20.1 Bank loan I

Inprioryear,theGroupobtainedabankloanamountingtoapproximatelyUS$18,200,000($23,073,000equivalent)tofinancetheacquisitionofthedrillingrigs(Note7).ThebankloanbearsinterestattheadjustedLIBORfortheapplicable interest period plus the applicable margin and is repayable in 24 monthly instalments starting one month afterthedrawdowndate(i.e.7May2013).Duringtheyear,theGrouphasrestructuredtheloan,whereonlyinterestwillbeservicedonamonthlybasis.Theprincipalbalanceshallberepaiduponsuccessfulfundraisingexerciseornolaterthan10May2015,whicheverisearlier.

The average effective interest rate was 3.402% to 3.443% (2013: 3.443% - 3.448%) per annum.

Thebankloanissecuredby:

(i) LoyzRex’splantandequipmentincludingthetwodrillingrigs(Note7);(ii) thecashandcashequivalentsamountingtoUS$71,000($89,000equivalent)(Note16);(iii) afloatingchargeontradeandotherreceivablesamountingtoUS$200,000($249,000equivalent)(Note11);(iv) allrights,title,benefitsandinterestinandtothecontractsenteredbyLoyzRexfreefromanysecurity;and(v) corporateguaranteefromtheCompanyforuptoUS$18,200,000.

20.2 Bank loan II

Inthepreviousfinancialyear,Interlinkobtainedthefollowingbankloansforworkingcapitalpurposes:

(i) US$8,000,000 ($9,772,000 equivalent). It is repayable in 8 equal quarterly instalments starting from thebeginning of the 39th month from the date of first disbursement with final maturity of 5 years from each disbursementtranche;and

(ii) US$1,000,000 ($1,183,000 equivalent). It is repayable in 8 equal quarterly instalments starting from thebeginning of the 27th month from the date of the utilisation of the loan with final maturity of 4 years from each disbursement tranche.

InterestischargedattheUSDInter-bankOfferedRatefortheapplicableinterestperiodplustheapplicablemargin.The average effective interest rate was 2.9833% to 3.2731% (2013: 3.263% to 4.718%) per annum.

The bank loans are secured by a fixed deposit of US$4,500,000 provided by Jit Sun Investments Pte Ltd, thesubstantialshareholderoftheCompany.TheremainingUS$4,500,000issecuredbyacorporateguaranteefromJit Sun InvestmentsPte Ltd.The loan facility requires Interlink toadhere to theagreedfinancial covenants andundertakings.


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20. Bank borrowings (Continued)

20.2 Bank loan II (Continued)

During the financial year, the Group commenced negotiation with the bank for refinancing of the loan, andsubsequenttotheyearend,theloanwasrestructuredasfollows:

(i) Partialrepaymentofloandue,amountingtoUS$4,500,000,ismade;(ii) Balanceof the remaining loan, amounting toUS$4,500,000, is repayable in 12equalmonthly instalments

startingfromthebeginningofthe13thmonthfromthedateofthestartoftherefinancing;(iii) BearsinterestattheadjustedLIBORfortheapplicableinterestperiodplustheapplicablemarginof2.5%per

annum;and(iv) SecuredbycorporateguaranteebytheCompany.

Financecostsincurredinrelationtothebankloansofapproximately$397,000(2013:$41,000)arisingfromfinancingspecificallyenteredintoforexplorationactivitieswerecapitalisedasE&Eassetsduringthefinancialyearasdisclosedin Note 5 to the financial statements.

20.3 Bank loan III

On30April2014,theGroupobtainedabankloanfromOversea-ChineseBankingCorporationLimited(“OCBCBank”)amountingtoUS$32,000,000($39,889,000equivalent),tofinancetheacquisitionofinterestintheThailandoperations(Note12.3).ThebankloanbearsinterestattheadjustedSIBORfortheapplicableinterestperiodplustheapplicablemarginof4%perannum.Partoftheloan,amountingtoUS$8,900,000,isrepayable3monthsafterthedrawdowndate (i.e.30April2014)and thebalanceof the remaining loan,amounting toUS$23,100,000, isrepayablein21quarterlyinstalmentsstarting6monthsafterthedrawdowndate(i.e.30April2014).Theaverageeffective interest rate was 4.31% per annum.

TheloanissecuredbypledgesofsharesinLoyzThai,LoyzOil’scashbalancesintheaccountsmaintainedwithandasdesignatedbyOCBCBank,allearningsandothercash-flowofLoyzThai,aswellascorporateguaranteebytheCompany,LoyzThaiandthesubstantialshareholderoftheCompany,JitSunInvestmentsPteLtd.

20.4 Bank loan IV

On 26 March 2014, Interlink obtained a loan facility from a financial institution, amounting to INR30,000,000($644,000 equivalent). As at 30 June 2014, Interlink drew down INR15,000,000 ($322,000 equivalent) from thefacilityforthefinancingofworkingcapital.Theloanbearsinterestat14.25%perannumandisunsecured.Theloanis repayable in 1 year after the drawn down date.

20.5 Bank overdraft

As at 30 June 2014, Interlink Petroleum Limited, a subsidiary of the Company, drew down approximatelyINR25,900,000 ($537,000 equivalent) from anoverdraft facility enteredwith YESBank Limited. Theoverdraft issupported by a standby letter of credit and bears interest at 12.5% (2013: Nil%) per annum.

Thefairvaluesofthebankborrowingsapproximatethecarryingamount.

Bankborrowingsaredenominatedinthefollowingcurrencies:

Group

2014 2013$’000 $’000

UnitedStatesdollar 70,323 34,405

Indian rupee 859 –

71,182 34,405


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21. Finance lease payables

Minimum lease

payments

Future financecharges

Presentvalue of

minimumlease

paymentsGroup $’000 $’000 $’000

2014

Within one financial year 29 (2) 27

After one financial year but within five financial years 49 (2) 47

78 (4) 74

2013

Within one financial year 30 (3) 27

After one financial year but within five financial years 79 (4) 75

109 (7) 102

The finance lease term is 5 years (2013: 5 years). The weighted average effective interest rate was 1.88% (2013: 1.88%) per annum.

Interestrateisfixedatthecontractdate,andthusexposestheGrouptofairvalueinterestraterisk.Theleaseisonafixedrepayment basis and no arrangements have been entered into for contingent rental payments.

The finance lease payables are secured on the motor vehicles purchased under finance lease arrangements (Note 7).

ThefinanceleasepayablesaredenominatedinSingaporedollar.

22. Provision for restoration costs

Group

2014 2013$’000 $’000

Provision for restoration costs 118 107

Deposit in site restoration fund (62) (42)

56 65

Movementsinprovisionforrestorationcostswereasfollows:

Group

2014 2013$’000 $’000

Balance at beginning of financial year 107 114

Provision made during the financial year 14 –

Currencytranslationadjustment (3) (7)

Balance at end of financial year 118 107

TheGroup’s site restorationobligation results fromoneof thesubsidiaries, Interlink’s interests inBaolaandModherafields.


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22. Provision for restoration costs (Continued)

Pursuant to the termsof theProductionSharingContracts entered intoby Interlinkwith theGovernmentof India inrespectofBaolaandModherafields,InterlinkisrequiredtorestorethecontractareaattheendofthecontractperiodbeforehandingovertheareabacktotheGovernmentandforthispurpose,InterlinkhastocreateaSiteRestorationFundandfunditregularlyafterassessingthefundrequiredforrestoration.

Asat30June2014,InterlinkrecognisedaprovisionforrestorationcostsamountingtoINR5,700,000($118,000equivalent)(2013: INR5,000,000 ($114,000equivalent)).Theprovision represents thepresentvalueof restorationcostswhichareexpectedtobeincurreduptotheendoftheminingpermitforBaolaandModherafieldsusingadiscountrateof8.5%.

PursuanttotheSiteRestorationFundScheme1999approvedbytheGovernmentofIndia,InterlinkdepositedINR3,000,000($62,000equivalent)(2013:INR2,000,000($42,000equivalent))inthefundmaintainedintheStateBankofIndiaasattheend of the reporting period.

23. Trade and other payables

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

Current

Trade payables

- third parties 3,381 131 – –

Non-trade payables

- third parties 7,137 1,524 1,635 –

- substantial shareholder of the Company 6,501 – 4,987 –

- individual shareholder of the Company 3,000 – 3,000 –

Accruedoperatingexpenses 2,406 1,001 397 175

22,425 2,656 10,019 175

Non-current

Otherpayable-thirdparty 34,111 – – –

56,536 2,656 10,019 175

The trade amounts due to third parties are unsecured, non-interest bearing and are on 30 to 60 days (2013: 30 to 60 days) credit term.

The Group’s and the Company’s current non-trade payables to third parties, amounting to $1,633,000 (2013: $Nil),representloanswhichbearinterestat10%perannum,areunsecuredandrepayableinOctober2014.

The Group’s current non-trade payables to third parties, amounting to $3,740,000 (2013: $Nil), relates to the partconsideration for theacquisitionof20%equity interest inFramwhichwillbe satisfiedby issuanceof theCompany’sordinary shares (Note 9).

TheGroup’scurrentnon-tradepayablestothirdparties,amountingto$1,764,000(2013:$Nil),relatestoadvancesreceivedby theThailand jointly controlledoperations from theotherparties to theThailandoperationswhich are unsecured,interest-free and repayable on demand.

The Group’s and the Company’s current non-trade amount due to a substantial shareholder of the Company amounting to$6,501,000(2013:$Nil)and$4,987,000(2013:$Nil)respectively,representloanswhichbearinterestat5%perannum,are unsecured and repayable on demand.


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23. Trade and other payables (Continued)

The Group’s and the Company’s current non-trade amount due to an individual shareholder of the Company, amounting to$3,000,000(2013:$Nil),representsaloanwhichbearsinterestat10%perannum,unsecuredandrepayableinOctober2014.

TheGroup’snon-currentnon-tradepayabletoathirdpartyrepresentsthedeferredconsiderationfortheacquisitionofparticipatinginterestsintheThailandoperations(Note12.3),whichisdiscountedat4.5%,unsecuredandexpectedtoberepaid within 5 years. The fair value of the non-current non-trade payable as at the end of the reporting period amounted to$40,381,000(2013:$Nil).

Trade and other payables are denominated in the following currencies:

Group Company2014

$’0002013

$’0002014

$’0002013

$’000

Singaporedollar 6,332 249 4,409 175

Australian dollar 9 6 – –

Thai Baht 3,522 – – –


UnitedStatesdollar 46,306 1,995 5,610 –

Others 167 107 – –

56,536 2,656 10,019 175

24. Deferred tax liabilities

Group

2014 2013$’000 $’000

Balance at beginning of financial year 80 –

Acquisitionofinterestinjointlycontrolledoperations(Note12.3) 30,636 –

Charged to profit or loss 1,278 83

Currency realignment (381) (3)

Balance at end of financial year 31,613 80

Thedeferredtaxliabilitiesareattributabletothefollowingtemporarydifferencescomputedatthestatutoryincometaxrateintherelevantjurisdictions.

Group2014

$’0002013

$’000

Exploration,evaluationanddevelopmentassets 32 80

Oilandgasproperties 31,581 –

31,613 80


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25. Other liabilities

Group2014

$’0002013

$’000

Current

Securitydeposit 4 5

Deferred drilling revenue – 5,072

Otherpayable–non-controllinginterest – 4,636

4 9,713

Deferred drilling revenue in prior financial year relates to drilling revenue charged on each well which are deferred until drilling is completed. All drilling operations have been completed during the year.

Non-tradeamountduetonon-controllinginterestinprioryearrepresentedloansamountingtoUS$3,657,000($4,636,000equivalent)whichwereinterest-freeandrepayableondemand.

26. Revenue

Group

2014 2013$’000 $’000


Drilling revenue 12,053 –

Saleofcrudeoil 8,658 –

Gas sales – 28

Mobilisationfee – 1,239

20,711 1,267


Salesofgoods – 11,658

Otherincome – 51

– 11,709

Total 20,711 12,976

27. Other income

Group

2014 2013$’000 $’000


Gainondisposalofplantandequipment 703 –

Waiver of loan by a non-controlling interest of a subsidiary 5,879 –

Write-backofallowancefordoubtfulnon-tradereceivables – 1,751

Foreignexchangegain,net 72 –

Otherincome 301 256

6,955 2,007


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27. Other income (Continued)

Group

2014 2013$’000 $’000


Amortisation of deferred revenue – 821

Foreignexchangegain,net – 152

– 973

Total 6,955 2,980

28. Finance costs

Group

2014 2013$’000 $’000


Interestexpenseon:

- Bankloans 1,096 124


Interestexpenseon:

- Finance lease payables – 5

Total 1,096 129

29. Other charges

Group

2014 2013$’000 $’000


Foreignexchangeloss,net – 411

Others – 10

– 421


LossondisposalofSSCH – 347

Total – 768


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30. Income tax expense

Group

2014 2013$’000 $’000

Loss for the financial year


Currentincometax

- Currenttaxcharge 1,704 –

- (Over)/underprovisioninpriorfinancialyear (2) 2

Deferredtax

- current financial year 1,278 83

2,980 85


Currentincometax

- under provision in prior financial year – 7

Totalincometaxexpenserecognisedinprofitorloss 2,980 92

Other comprehensive income

Group

Before-tax amount

Tax expense

Net-of-tax amount

$’000 $’000 $’000

2014

Deferredtaxexpenserelatingtoothercomprehensiveincome

- Exchangedifferenceontranslationofforeignoperations 670 – 670

2013

Deferredtaxexpenserelatingtoothercomprehensiveincome

- Exchangedifferenceontranslationofforeignoperations 968 – 968

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30. Income tax expense (Continued)

Reconciliation of effective income tax rate

Group

2014 2013$’000 $’000


Profitbeforeincometaxfromdiscontinuedoperations – 433

Lossbeforeincometax (1,761) (2,570)

IncometaxexpenseatSingaporestatutorytaxrateof17% (299) (437)

Effectsofdifferentincometaxratesinothercountries 1,541 (93)

Taxeffectofexpensesnotdeductibleforincometaxpurposes 1,446 624

Deferredtaxassetnotrecognised 527 482

Taxeffectofincomenotsubjecttoincometax (243) (498)

(Over)/Underprovisionofcurrentincometaxinpriorfinancialyear (2) 2

Otheritems 10 12

2,980 92

Unrecognised deferred tax assets

Themovementsofunrecogniseddeferredtaxassetsareasfollows:

Group

2014 2013$’000 $’000

Balance at beginning of financial year 1,066 584

Amount not recognised during financial year 527 482

Balance at end of financial year 1,593 1,066

Theunrecogniseddeferredtaxassetsareattributabletothefollowingtemporarydifferences:

Group

2014 2013$’000 $’000

Unutilisedtaxlosses 1,591 1,064

Property,plantandequipment 10 10

Others (8) (8)

1,593 1,066

Asat30June2014,theGrouphadunutilisedtaxlossesofapproximately$6,194,000(2013:$4,682,000)availableforset-offagainstfuturetaxableprofitssubjecttotheagreementbythetaxauthoritiesandcompliancewithprovisionsofthetaxlegislationsoftherespectivecountriesinwhichtheGroupoperates.Theunutlisedtaxlossescanbecarriedforwardindefinitely,exceptforanamountof$1,772,000,whichwillexpirein2033.

Theabovedeferred taxassetshavenotbeen recognisedas it is uncertain that therewillbe sufficient future taxableprofitstorealisethesefuturebenefits.Accordingly,thesedeferredtaxassetshavenotbeenrecognisedinthefinancialstatementspco of the Group in accordance with the accounting policy in Note 2.20 to the financial statements.

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31. Loss for the financial year

In addition to the charges and credits disclosed elsewhere in the notes to the financial statements, the above includes the following charges:

Group

Continuingoperations

Discontinued operations Total

2014 2013 2014 2013 2014 2013$’000 $’000 $’000 $’000 $’000 $’000

Cost of sales

Cost of inventories recognised as expense – – – 5,888 – 5,888

Depletion of oil and gas properties 910 – – – 910 –

Depreciation of plant and equipment 281 – – – 281 –

Thailand Petroleum royalties 483 – – – 483 –

Distribution costs

Advertisements 8 3 – 120 8 123

Administrative expenses

Audit fees

- Auditors of the Company 98 78 – 25 98 103

-Otherauditors 24 21 – – 24 21

Non-audit fees

- Auditors of the Company 13 2 – – 13 2

- Otherauditors - 8 – – – 8

Directors’ fees 239 151 – – 239 151

Share-basedpaymentexpenses,net 2,470 265 – – 2,470 265

Employeebenefitsexpenses

- Salaries,bonusesandshort-term benefits 3,647 2,172 – 1,832 3,647 4,004

- Employer’s contribution to defined contribution plan 81 82 – 204 81 286

Other expenses

Depreciation of plant and equipment 1,686 328 – 143 1,686 471

Operatingleases-rentalofpremises 266 141 – 2,416 266 2,557

Legal and professional fees 784 1,029 – 4 784 1,033

Theaboveemployeebenefitsexpensesincludedirectors’remunerationasshowninNote33tothefinancialstatements.

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32. Loss per share from continuing operations

Basic loss per share

Basic loss per share from continuing operations is calculated by dividing the loss for the financial year from continuing operations,netoftax,attributabletoownersoftheCompanybytheweightedaveragenumberofordinarysharesduringthe financial year.

Group

2014 2013$’000 $’000

Loss for the financial year from continuing operations attributable to owners of the parent($’000) (3,670) (2,934)

Weighted average number of ordinary shares during the financial year applicable to basic loss per share (’000) 386,868 317,767

Loss per share

Basic and diluted (cents) (0.95) (0.92)

Diluted loss per share from continuing operations is the same as the basic loss per share because the potential ordinary shares to be converted are anti-dilutive as the effect of the shares conversion would be to decrease the loss per share.

Shareawardsof1,970,000(2013:240,000)andshareoptionsof27,640,000(2013:2,980,000)grantedtoemployeesundertheexistingperformanceshareplanhavenotbeenincludedinthecalculationofdilutedearningspersharebecausetheyare anti-dilutive.

33. Significant related party transactions

For the purposes of these financial statements, parties are considered to be related to the Group and the Company if the GroupandtheCompanyhavetheability,directlyorindirectly,tocontrolthepartyorexercisesignificantinfluenceoverthepartyinmakingfinancialandoperatingdecisions,orviceversa,orwheretheGroupandtheCompanyandthepartyaresubjecttocommoncontrolorcommonsignificantinfluence.Relatedpartiesmaybeindividualsorotherentities.

In addition to the information disclosed elsewhere in the financial statements, the following were significant related party transactions between the Group or the Company with related parties at terms and rates agreed between the parties:

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

With subsidiaries

Interest income – – 749 120

Payments made on behalf of – – 17,889 –

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33. Significant related party transactions (Continued)

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

With the substantial shareholder

Operatinglease-rentalofpremises – 36 – 36

Payments made on behalf of 37 21 – 21

Payments made on behalf by 47 43 – 43

Loan from substantial shareholder 6,486 – 4,987 –

Interestexpense 20 6 16 –

With an individual shareholder

ProceedsfromdisposalofSSCH(Note8) – 9,000 – 9,000

Repaymentofloans – 1,700 – 1,700

With a related party

Acquisitionofintangibleassets 3,598 – – –

Key management personnel remuneration

TheremunerationofDirectorsandotherkeymanagementpersonnelduringthefinancialyearwasasfollows:

Group

2014 2013$’000 $’000

Directors’ fees 239 151

Short-termbenefits 1,690 732

Share-basedpayments 1,910 265

Post-employment benefits 38 52

3,877 1,200

Analysed into:

- Compensation of Directors of the Company 627 900

- CompensationofDirectorsofthesubsidiariesandotherkeymanagementpersonnel 3,250 300

3,877 1,200

The remuneration of Directors is determined by the remuneration committee having regard to the performance of individualsandmarkettrends.

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34. Operating lease commitments

The Group as a lessee

Group

2014 2013$’000 $’000

Operatingleasesincludedinprofitorloss:

- minimum lease payments 266 141

The Group leases office premises under non-cancellable operating leases. The leases have varying terms and renewal rights.

As at the end of the reporting period, there were operating lease commitments for rental payable for office premises (2013:officepremisesandretailoutlets)insubsequentaccountingperiodsasfollows:

Group

2014 2013$’000 $’000

Within one year 72 48

After one year but within five years 46 12

118 60

Theaboveoperatingleasecommitmentsarebasedonexistingrates.Theleaseagreementsprovideaperiodicrevisionof such rates in the future.

35. Capital commitments

Jointly controlled operations’ commitments

Group

2014 2013$’000 $’000

Shareofcapitalcommitmentsofjointlycontrolledoperations

Within one year 273 –

Exploration expenditure commitments

DuetothenatureoftheGroup’soperationsinexploringandevaluatingareasofinterestitisnecessarytoincurexpenditureinordertoretaintheGroup’spresentpermitinterests.Expenditurecommitmentsonexplorationpermitscanbereducedbyselectiverelinquishmentofexplorationtenure,bytherenegotiationofexpenditurecommitments,orbyfarmingoutportions of the Group’s participating interests.

Explorationexpenditurecommitmentsforecastbutnotprovidedforinthefinancialstatementsareasfollows:

Group

2014 2013$’000 $’000

Within one year 64,822 12,677

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35. Capital commitments (Continued)

Capital expenditure commitments

Group

2014 2013$’000 $’000

Acquisitionofpre-explorationdata 1,893 1,902

Asat30June2014,theGrouphasacapitalcommitmentamountingtoapproximately$1,893,000(US$1,500,000)(2013:$1,902,000(US$1,500,000))inrelationtotheproposedco-operationbetweenLoyzOilandathirdpartyasdisclosedinNote 13 to the financial statements.

36. Segment information

Managementhasdeterminedtheoperatingsegmentsbasedonthereportsreviewedbythechiefoperatingdecisionmaker.AsegmentisadistinguishablecomponentoftheGroupthatisengagedeitherinprovidingproductsorservices(business segment), or in providing products or services within a particular economic environment (geographical segment), whichissubjecttorisksandrewardsthataredifferentfromthoseofothersegments.

Managementmonitors theoperating results of the segments separately for thepurposesofmakingdecisions aboutresourcestobeallocatedandofassessingperformance.Segmentperformanceisevaluatedbasedonoperatingprofitorloss which is similar to the accounting profit or loss.

IncometaxesaremanagedbythemanagementoftheGroup.

The accounting policies of the operating segments are the same as those described in the summary of significant accountingpolicies.There isnoasymmetricalallocationtoreportablesegments.Managementevaluatesperformanceonthebasisofprofitorlossfromoperationbeforetaxexpensenotincludingnon-recurringgainsandlossesandforeignexchangegainsorlosses.

There is no change from prior periods in the measurement methods used to determine reported segment profit or loss.

Segmentresults,assetsandliabilitiesincludeitemsdirectlyattributabletoasegmentaswellasthosethatcanbeallocatedonareasonablebasis.Unallocateditemsmainlycomprisecorporateassets,liabilitiesandexpenses.

Segmentassetsconsistprimarilyofexploration,evaluationanddevelopmentassets,oilandgasproperties,otherproperty,plantandequipment,available-for-salefinancialassets, receivablesandcashandcashequivalents.Segment liabilitiescompriseoperatingliabilitiesandtaxliabilities.

Inthecurrentfinancialyear, theGrouphasonlyonebusinesssegmentwhich is theOilandgassegment,comprisingexploration,developmentandproductionactivitiesanddrillingactivities.

Inthepreviousfinancialyear,inadditiontoOilandgassegment,theGroupwasalsoengagedinthefollowingbusinesssegments which were discontinued as a result of the disposal of a subsidiary (Note 8):

(i) Bathroom – Sanitaryware,showerscreens,tapsandhandshowers,bathsandspas,vanity tops, bathroom cabinets and bathroom accessories.

(ii) Kitchenandothers – Kitchencabinetsystems,kitchensinksandappliancesproduct.

(iii) Project – Supplyofsanitarywarestoconstructioncontracts.

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36. Segment information (Continued)

36.1 Analysis by business segments

2014Oil and gas

$’000

Revenue

Externalrevenue 20,711

Results

Segmentresults (7,653)

Interest income 33

Otherincome 6,955

Interestexpense (1,096)

Operatingloss (1,761)

Incometaxexpense (2,980)

Loss for the financial year (4,741)

Significant non-cash items

Depletion of oil and gas properties 910

Depreciationofotherproperty,plantandequipment 1,967

Gainondisposalofplantandequipment (703)

Share-basedpaymentexpenses,net 2,470

Waiver of loan by non-controlling interest of a subsidiary (5,879)

Assets and liabilities

Segmentassets 250,575

Segmentliabilities 161,315


Continuingoperation

2013 Bathroomkitchen and

others Projects Oil and gas Unallocated Consolidated$’000 $’000 $’000 $’000 $’000 $’000

Revenue

Externalrevenue 7,477 2,868 1,136 1,267 228 12,976

Results

Segmentresults 4,024 1,106 461 (4,942) (6,134) (5,485)

Interest income – – – 56 8 64

Otherincome – – – 256 2,724 2,980

Interestexpense – – – (124) (5) (129)

Operatingprofit/(loss) 4,024 1,106 461 (4,754) (3,407) (2,570)

Incometaxexpense – – – (85) (7) (92)

Loss for the financial year (2,662)

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36. Segment information (Continued)

36.1 Analysis by business segments (Continued)


Continuingoperation

2013 Bathroomkitchen and

others Projects Oil and gas Unallocated Consolidated$’000 $’000 $’000 $’000 $’000 $’000

Significant non-cash items

Amortisation of deferred revenue – – – – (821) (821)

Depreciation of plant and equipment – – – 182 289 471

Gain on disposal of plant andequipment – – – – (114) (114)

Share-basedpaymentexpenses,net – – – 265 – 265

Write-backofallowancefor doubtful non-trade receivables – – – – (1,751) (1,751)

Assets and liabilities

Segmentassets – – – 121,628 – 121,628

Segmentliabilities – – – 48,521 – 48,521

36.2 Analysis by geographical segments

Revenue Non-current assets Capital expenditure

2014 2013 2014 2013 2014 2013$’000 $’000 $’000 $’000 $’000 $’000

Singapore

- continuing operations – – 8,146 4,437 3,805 1,240

- discontinued operations – 11,709 – – – 296

UnitedStates 12,053 1,239 3,525 40,996 – 36,860

Australia – – 12,708 11,940 669 5,592

New Zealand – – 31,798 30,081 445 9,695

Thailand 8,658 – 100,695 – 72,893 –

India – 28 25,198 24,344 861 1,832

20,711 12,976 182,070 111,798 78,673 55,515

Information about major customer

TheGroup identifiesamajorcustomerasonewhocontributes to10%ormoreof the total revenue.For thecurrentfinancialyear,totalrevenueweregeneratedfromtwocustomersonly.Therewasnomajorcustomerinpriorfinancialyear.

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37. Financial instruments, financial risks and capital management

TheGroup’sactivitiesexposeittocreditrisks,marketrisks(includingforeigncurrencyrisksandinterestratesrisks)andliquidityrisk.TheGroup’soverallriskmanagementstrategyseekstominimiseadverseeffectsfromthevolatilityoffinancialmarketsontheGroup’sfinancialperformance.

TheBoardofDirectorsoftheCompanyisresponsibleforsettingtheobjectivesandunderlyingprinciplesoffinancialriskmanagementfortheGroup.TheGroup’smanagementthenestablishesthedetailedpoliciessuchasriskidentificationandmeasurement,exposurelimitsandhedgingstrategies,inaccordancewiththeobjectivesandunderlyingprinciplesapproved by the Board of Directors.

There has been no change to theGroup’s exposure to these financial risks or themanner inwhich itmanages andmeasurestherisk.Ifnecessary,marketriskexposuresaremeasuredusingsensitivityanalysisindicatedbelow.

37.1 Credit risks

Credit risk refers to the risk thatcounterpartywilldefaulton itscontractualobligations resulting ina loss to theGroup. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateralwhereappropriate,asameansofmitigatingtheriskoffinanciallossfromdefaults.TheGroupperformsongoingcreditevaluationofitscounterparties’financialconditionandgenerallydoesnotrequirecollateral.

TheGrouphassignificantcreditexposurearisingfromitstradereceivablesamountingto$3,071,000(2013:$Nil)as at the end of the reporting period which is due from a single customer. The Company has significant credit exposurearisingfromthenon-tradeamountsduefromsubsidiariesamountingtoapproximately$69,969,000(2013:$30,821,000)asattheendofthereportingperiod.Themanagementisoftheopinionthatthesereceivablesarefully recoverable.

The carrying amount of financial assets recorded in the financial statements, grossed up for any allowances for losses, represents theGroup’smaximumexposure tocredit risk.TheGroupand theCompanydonotholdanycollateral.The Group’s and the Company’s classes of financial assets are available-for-sale financial asset, cash and cashequivalents,tradeandotherreceivablesexcludingdeferreddrillingcosts,andotherassets.

Trade receivables thatareneitherpastduenor impairedare substantiallycompanieswithgoodcollection trackrecord with the Group.

As at the end of the reporting period, the Group’s trade receivables are not past due nor impaired.

37.2 Market risks

Foreign currency risks

TheGroupincursforeigncurrencyriskontransactionsandbalancesthataredenominatedincurrenciesotherthanits functional currency.The currencygiving rise to this risk isprimarilyUnitedStatesdollar.Exposure to foreigncurrencyriskismonitoredonanon-goingbasistoensurethatthenetexposureisatanacceptablelevel.

TheGroupmonitorsitsforeigncurrencyexchangeriskscloselyandmaintainsfundsinvariouscurrenciestominimisecurrencyexposuredue to timingdifferencesbetweensalesandpurchases.Currency translation riskariseswhencommercial transactions, recognised assets and liabilities and net investment in foreign operations are denominated in the currency that is not the entity’s functional currency.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period were as follows:

Group

Assets Liabilities

2014 2013 2014 2013

$’000 $’000 $’000 $’000

UnitedStatesdollar 652 1,034 56,636 11,357

Thai Baht 11,021 – 3,522 –

11,673 1,034 60,158 11,357

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37. Financial instruments, financial risks and capital management (Continued)

37.2 Market risks (Continued)

Foreign currency sensitivity analysis

TheGroup’sexposuretoforeigncurrencyriskismainlyUnitedStatesdollarandThaiBaht.

Thefollowingtabledetailsthesensitivitytoa5%increaseanddecreaseinUnitedStatesdollarandThaiBahtagainstSingaporedollar.Thesensitivityanalysisassumesan instantaneous5%change intheforeigncurrencyexchangerates from the end of the reporting period, with all other variables held constant.

GroupProfit or loss

2014 2013$’000 $’000

United States dollar

StrengthenedagainstSingaporedollar (2,799) (516)

WeakenedagainstSingaporedollar 2,799 516

Thai baht

StrengthenedagainstSingaporedollar 375 –

WeakenedagainstSingaporedollar (375) –

Interest rate risk

TheGroup’sexposuretomarketriskforchangesininterestratesrelatesprimarilytofixeddeposits,bankborrowingsand finance lease payables as shown in Notes 16, 20 and 21 to the financial statements respectively.

The Group’s results are affected by changes in interest rates due to the impact of such changes on interest income andexpensesfrombankdepositsandbankloanswhichareatfloatinginterestrates.ItistheGroup’spolicytoobtainquotesfrombankstoensurethatthemostfavourableratesaremadeavailabletotheGroup.

If the interest rate increasesordecreasesby0.5% (2013:0.5%), theGroup’sequitywilldecreaseor increasebyapproximately$217,100(2013:$66,900),arisingmainlyasaresultofhigherorlowerinterestonfloatingratesforbankloans.TheinterestexpensefromthebankloanIisrecognisedasanexpenseunder“Financecosts”lineitemintheconsolidatedstatementofcomprehensiveincome.TheinterestexpenseonthebankloanIIandbankloanIIIarecapitalisedaspartofexploration,evaluationanddevelopmentassets(Note5)andoilandgasproperties(Note6) respectively.

37.3 Liquidity risk

Liquidity risk refers to the risk in which theGroup encounters difficulties inmeeting its short-term obligations.Liquidityrisksaremanagedbymatchingthepaymentandreceiptcycle.

TheGroupactivelymanagesitsoperatingcashflowssoastofinancetheGroup’soperations.Aspartofitsoverallprudent liquiditymanagement, theGroupminimises liquidity riskbyensuringavailabilityof funding throughanadequateamountofcommittedcreditfacilitiesfromfinancialinstitutionsandcontinuingfinancialsupportfromitssubstantialshareholder,JitSunInvestmentsPteLtd,andmaintainssufficientlevelofcashtomeetitsworkingcapitalrequirements.

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37.3 Liquidity risk (Continued)

The following table details the Group’s and the Company’s remaining contractual maturity for their non-derivative financialinstruments.ThetablehasbeendrawnupbasedonundiscountedcashflowsoffinancialinstrumentsbasedontheearlierofthecontractualdateorwhentheGroupandtheCompanyareexpectedtoreceiveorpay.

Contractual maturity analysis

Within one financial year

After one financial year

but within five financial

years Total$’000 $’000 $’000

Group

2014

Financial assets

Available-for-sale financial asset – 51,609 51,609

Trade and other receivables 3,528 – 3,528

Otherassets 1,181 – 1,181

Cashandcashequivalents 8,428 – 8,428

Total undiscounted financial assets 13,137 51,609 64,746

Financial liabilities

Trade and other payables 22,884 40,381 63,265

Bankborrowings 43,876 32,684 76,560

Finance lease payables 29 49 78

Otherliabilities 4 – 4

Total undiscounted financial liabilities 66,793 73,114 139,907

Total undiscounted net financial liabilities (53,656) (21,505) (75,161)

2013

Financial assets

Trade and other receivables 565 – 565

Otherassets 114 – 114


Total undiscounted financial assets 6,391 – 6,391


Convertible preference shares 1,500 – 1,500

Trade and other payables 2,656 – 2,656

Bankborrowings 7,780 28,286 36,066

Finance lease payables 30 79 109

Otherliabilities 4,641 – 4,641

Total undiscounted financial liabilities 16,607 28,365 44,972

Total undiscounted net financial liabilities (10,216) (28,365) (38,581)

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Contractual maturity analysis (Continued)

Within one financial year

After onefinancial year

but within five financial

years Total$’000 $’000 $’000

Company

2014

Financial assets

Trade and other receivables – 69,969 69,969




Trade and other payables, representing total undiscounted financial liabilities 10,403 – 10,403

Total undiscounted net financial (liabilities)/assets (9,278) 69,969 60,691

2013

Financial assets

Trade and other receivables 16 30,821 30,837




Trade and other payables, representing total undiscounted financial liabilities 175 – 175

Total undiscounted net financial assets 2,239 30,821 33,060

TheGroup’soperationsarefinancedmainlythroughequity,retainedearnings,financeleaseandbankborrowings.Adequatelinesofcreditsaremaintainedtoensurethenecessaryliquidityisavailablewhenrequired.

The repayment terms and the interest rates, where applicable, have been disclosed in the respective notes to the financial statements.

TheCompanyhasgivencorporateguaranteestocertainbanksinconnectionwithloansgrantedbythebankstothesubsidiarieswithcarryingamountasat30June2014of$70,323,000(2013:$34,405,000)(Note20).ThecarryingamountoftheloansrepresentsthemaximumamountoftheguaranteethattheCompanywouldbecalledupontopay.Intheopinionofthemanagement,nomateriallossesareexpectedtoarisefromthesecorporateguarantees.

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Contractual maturity analysis (Continued)

ThetablebelowshowsthecontractualmaturityoftheCompany’sfinancialguarantees.Themaximumamountofthefinancial guarantee contracts are allocated to the earliest period in which the guarantee could be called.

One year or less

2014 2013$’000 $’000

Company

Financial guarantees 70,323,000 34,405,000

37.4 Capital management policies and objectives

The Group manages its capital to ensure that the Group is able to continue as going concern and to maintain an optimalcapitalstructuresoastomaximiseshareholders’value.

The management constantly reviews the capital structure to ensure the Group is able to service any debt obligations basedonitsoperatingcashflows.TheGroup’sandtheCompany’soverallstrategyremainsunchangedfrom2013.

The management monitors capital based on gearing ratio. The gearing ratio is calculated as net debt divided byequity attributable toownersof theparentplusnetdebt. TheGroupand theCompany includeswithinnetdebt, tradeandotherpayables,finance leasepayables,other liabilities,convertiblepreferencesharesandbankborrowings lesscashandcashequivalents.Equityattributable toownersof theparentconsistsofsharecapital,reserves and retained earnings.

Group Company

2014 2013 2014 2013$’000 $’000 $’000 $’000

Trade and other payables 56,536 2,656 10,019 175

Finance lease payables 74 102 – –

Convertible preference shares – 1,500 – –

Otherliabilities 4 9,713 – –

Bankborrowings 71,182 34,405 – –

Less:Cashandcashequivalents (8,428) (5,712) (1,125) (2,398)

Net debt/(cash) 119,368 42,664 8,894 (2,223)

Equityattributabletoownersoftheparent 86,083 69,916 103,005 72,624

Total capital 205,451 112,580 111,899 70,401

Gearing ratio 58.10% 37.90% 7.95% NM

NM-notmeaningfulasthecashandcashequivalentsishigherthantotalliabilities.

Asat30June2014and2013,theGroupandtheCompanyareincompliancewithallexternally-imposedcapitalrequirements.

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37.5 Fair value of financial assets and financial liabilities

The fair values of financial assets and financial liabilities are determined as follows:

• the fairvaluesoffinancialassetsandfinancial liabilitieswithstandard termsandconditionsand tradedonactiveliquidmarketsaredeterminedwithreferencetoquotedmarketprices;and

• thefairvaluesofotherfinancialassetsandfinancialliabilities(excludingderivativeinstruments)aredeterminedinaccordancewithgenerallyacceptedpricingmodelsbasedondiscountedcashflowanalysis.

Fair value hierarchy

TheGroupandtheCompanyclassifyfairvaluemeasurementsusingafairvaluehierarchythatreflectsthesignificanceoftheinputsusedinmakingthemeasurements.Thefairvaluehierarchyhasthefollowinglevels:

• Level1- quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

• Level2- inputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices);and

• Level3- inputsfortheassetorliabilitythatarenotbasedonobservablemarketdata(unobservableinputs).

Fair value of financial instruments that are not carried at fair value

ThecarryingamountsoftheGroup’sandtheCompany’scurrentfinancialassetsandfinancialliabilitiesapproximatetheir respective fair values due to the relatively short-term maturity of these financial instruments.

The fair values of financial assets that are not carried at fair value in relation to available-for sale financial asset and non-current other receivables are disclosed in Notes 9 and 11 to the financial statements respectively and are carried atcostbecauseit isnotpracticabletodeterminethefairvalueduetothelackofquotedmarketpricesorfixedrepayment term and the assumptions used in valuation models to value this instrument cannot be reliably measured (Level 3 of fair value hierarchy).

The fairvaluesof theGroup’snon-currentfinancial liabilities thatarenotcarriedat fairvalue in relationtobankborrowings, finance lease payables and other payable are disclosed in Notes 20, 21 and 23 respectively to the financialstatementswhichhavebeendeterminedusingdiscountedcashflowpricingmodelsandareconsideredlevel3fairvaluemeasurements.SignificantinputstothevaluationincludeadjustmentstothediscountrateforcreditriskassociatedwiththeGroup.

37.6 Categories of financial instruments

The following table sets out the financial instruments as at the end of the reporting period:

Group Company

2014 2013 2014 2013$ $ $ $

Financial assets

Loans and receivables 13,137 6,391 71,094 33,219

Available-for-sale financial asset 51,609 – – –

64,746 6,391 71,094 33,219


Otherfinancialliabilities,atamortisedcost 127,852 43,304 10,019 175

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38. Events after the reporting period

38.1 Allotment and issue of ordinary shares to Fram Exploration ASA

On11July2014,theCompanyallottedandissued11,301,000ordinarysharestoFramaspartconsiderationfortheacquisitionof20%equity interest inFram(Note9).Asaresultoftheissue,theCompany’s issuedandpaid-upsharecapital increasedfrom$95,882,000comprising411,281,127ordinarysharesto$99,631,000comprising422,582,127 ordinary shares.

38.2 Financing arrangements

i. On1July2014,theCompanyenteredintoaloanagreementwithathirdparty,AdvanceCapitalPartnersPteLtdasthelender,inwhichtheCompanyloanedanamountof$4,000,000fromtheLenderatinterestof5%p.a.subjecttocertaintermsandconditions,andrepayableaftersixmonthsfromthedateofthedisbursementoftheloan(“MaturityDate”).TheloanisrepayableincashorthroughtheissueandallotmentoftheCompany’sordinarysharesatanissuepricepershareequivalentto90%oftheovernightvolumeweightedaveragepricepersharetradedontheSGX-STontheMaturityDate.

AsannouncedbytheCompanyon19September2014,theCompanyhadon10September2014beenserveda writ of summons issued by Advance Capital Partners Pte Ltd (the “Plaintiff”) claiming that the Company hadfailedtorepaytothePlaintiffaloaninthesumof$4,000,000undertheloanarrangementbetweentheCompany and the Plaintiff. The Company has sought legal advice in respect of the Plaintiff’s alleged claim and considers the said claim to be without merit. The Company intends to vigorously defend the Plaintiff’s allegedclaim.ThewritisnotexpectedtohaveanymaterialimpactonthefinancialpositionoftheGroupforthe financial year ending 30 June 2015.

AsfurtherannouncedbytheCompanyon19September2014,theCompanyhad,on19September2014,filedanapplicationtostrikeoutthewritofsummonsfiledbythePlaintiffonthebasisthatthePlaintiff’swritof summons (i) discloses no reasonable cause of action, (ii) is scandalous, frivolous or vexatious, (iii) mayprejudice,embarrassordelaythefairtrialoftheaction,and/or(iv)isotherwiseanabuseoftheprocessofthecourt.TheCompany’sapplicationisfixedforhearingon8October2014.

ii. Pursuant to the loan agreement with Oversea-Chinese Banking Corporation Limited (“OCBC”) dated 29April2014,theCompanyenteredintoasubscriptionagreementwithOCBCon7August2014inwhichtheCompanyhasagreedtoissue22,222,222freeanddetachablewarrantstoOCBCintwotranches.Eachwarrantcarriestherighttosubscribeforonefully-paidnewordinaryshareinthecapitaloftheCompanyattheexercisepriceof$0.45perwarrantshare.Asatthedateofthesefinancialstatements,nowarranthasbeenexercised.

iii. On 7August 2014, theCompany entered into a supplemental agreement to amend the loan agreementwith Jit Sun Investments Pte Ltd, the substantial shareholder of the Company, pursuant to which Jit SunInvestmentsPteLtdhastherighttorequesttheCompanyfromtimetotimetoallotandissuesuchnumberofordinarysharesintheissuedsharecapitaloftheCompanytoJitSunInvestmentPteLtdatanissuepriceof$0.30,forfullorpartialrepaymentoftheoutstandingconvertibleloan.Subsequenttothefinancialyear,theGroupobtainedadditionalloanofUS$4,500,000(S$5,610,000equivalent).Asatthedateofthesefinancialstatements,therewasnoconversionofloanintoequity.

iv. On18August2014,theCompanyenteredintoafacilityagreementwithDBSBankLtd,fortermloaninanamountuptoUS$4,500,000andarevolvingloanfacilityofUS$1,000,000tobeusedforrepaymentofloanonbehalfofasubsidiary(Note20.2)andfortheworkingcapitalpurposesofasubsidiary.

38.3 Change in functional and presentation currency

With effect from 1 July 2014, the Company and certain subsidiaries changed their functional currency from their respectivelocalcurrenciestotheUnitedStatesdollarsduetoachangeincircumstancesintheprimaryeconomicenvironments in which the entities operate.

Following the above change in functional currency of the Group entities, the Group changed its presentation currencyfromSingaporedollarstoUnitedStatesdollars.

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SHAREHOLDINGS STATISTICSAs at 18 September 2014

Share Capital

Issuedandfullypaid : S$74,727,787.91Number of shares : 422,582,127Classofshares : OrdinarysharesVotingrights : OnevotepershareTreasury shares : Nil

Distribution of shareholdings

No. of Size of shareholdings shareholders % No. of shares %

1 - 999 6 0.30 1,298 0.00

1,000 – 10,000 1,214 60.85 3,368,400 0.80

10,001 – 1,000,000 737 36.94 68,377,000 16.18

1,000,001 and above 38 1.91 350,835,429 83.02

1,995 100.00 422,582,127 100.00

Shareholding held by the public

BasedontheinformationavailabletotheCompanyasat18September2014,approximately 52.94% of the issued ordinary sharesoftheCompanyisheldbythepublicand,therefore,Rule723oftheListingManualSectionB:RulesofCatalistoftheSingaporeExchangeSecuritiesTradingLimitediscompliedwith.

Twenty largest shareholders

No. Name of shareholderNumber of

shares held Percentage

1 HSBC(Singapore)NomineesPteLtd 69,064,000 16.34

2 SimSiangChoon 46,996,000 11.12

3 CitibankNomineesSingaporePteLtd 41,073,000 9.72

4 UOBKayHianPteLtd 20,250,000 4.79

5 JitSunInvestmentsPteLtd 18,927,273 4.48

6 Venstar Investments II Ltd 17,500,000 4.14

7 UnitedOverseasBankNomineesPteLtd 14,770,000 3.50

8 Venstar Investments Ltd 12,500,000 2.96

9 DBNominees(S)PteLtd 11,500,000 2.72

10 AdarashKumarChranjiLalAmarnath 11,313,610 2.68

11 CIMBSecurities(Singapore)PteLtd 8,604,000 2.04

12 RexInternationalHoldingLimited 8,500,000 2.01

13 GohLipMing 5,454,000 1.29

14 KwanLinSiew 5,245,000 1.24

15 GaySoonWatt 5,096,000 1.21

16 AngSinLiu 5,000,000 1.18

17 BankofSingaporeNomineesPteLtd 4,400,000 1.04

18 OCBCSecuritiesPrivateLtd 4,257,000 1.01

19 MaybankKimEngSecuritiesPteLtd 4,157,000 0.98

20 JimmySeahTingPing 3,010,000 0.71

20 Kwan Weng Kwong 3,010,000 0.71

320,626,883 75.87

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SHAREHOLDINGS STATISTICSAs at 18 September 2014

Substantial shareholders

No. Name of shareholdersDirect interestNo. of shares

% of shares

Deemed interestNo. of shares

% of shares

1. SimSiangChoon 46,996,000 11.12 6,590,000 (a) 1.56

2. KwanLinSiew 5,245,000 1.24 50,006,000 (b) 11.83

3. JitSunInvestmentsPteLtd 18,927,273 4.48 93,300,000 (c) 22.08

4. LionelLeeChyeTek – – 112,227,273 (d) 26.56

5. VenstarCapitalManagementPteLtd – – 30,000,000 (e) 7.10

Notes:

(a) MrSimSiangChoonisthespouseofMdmKwanLinSiewandisaccordinglydeemedinterestedinalltheordinarysharesheldbyMdmKwanLinSiew(5,245,000ordinaryshares)andthoseofhisson,MrSimPohKip(1,345,000ordinaryshares).

(b) MdmKwanLinSiewisthespouseofMrSimSiangChoonandisaccordinglydeemedinterestedinalltheordinarysharesheldbyMrSimSiangChoon(46,996,000ordinaryshares)andthoseofherbrother,MrKwanWengKwong(3,010,000ordinary shares).

(c) JitSunInvestmentsPteLtd’sdeemedinterestedinthe93,300,000ordinarysharesheldinthefollowingmanner:

(i) 60,000,000ordinarysharesunderHSBC(Singapore)NomineesPteLtd;and (ii) 13,000,000ordinarysharesunderUnitedOverseasBankNominees(Pte)Ltd. (iii) 20,300,000ordinarysharesunderCitibankNomineesSingaporePteLtd.

(d) MrLeeChyeTekLionelisthesoleshareholderofJitSunInvestmentsPteLtdandisaccordinglydeemedinterestedinallthe112,227,273ordinarysharesheldbyJitSunInvestmentsPteLtd.

(e) VenstarCapitalManagementPteLtdisthefundmanagerofVenstarInvestmentsLtdandVenstarInvestmentsIILtdandis accordingly deemed interested in the ordinary shares held by Venstar Investments Ltd (12,500,000 ordinary shares) and Venstar Investments II Ltd (17,500,000 ordinary shares).

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NOTICE OF ANNUAL GENERAL MEETING

LOYZ ENERGY LIMITEDRegistrationNo.199905693M(IncorporatedinSingapore)

NOTICE IS hEREBY GIVEN that the2014annualgeneralmeeting (“AGM”)of theCompanywillbeheldonThursday,30October2014atKlapsons,TheBoutiqueHotel–Eighteen,1&2atLevel18,15HoeChiangRoad,TowerFifteen,Singapore089316 at 11.00 a.m. to transact the following businesses:

AGENDA

ORDINARY BUSINESS

1. To receive and consider the audited financial statements of the Company and the reports of the Directors and Auditors for the financial year ended 30 June 2014 (“FY2014)”.

Resolution1

2. To re-elect the following Directors retiring pursuant to the Company’s articles of association (“Article”):

a) MrChiaYongWhatt(Article107) Resolution2

MrChiaYongWhattshall,uponre-electionasDirectoroftheCompany,remainasChairmanoftheRiskManagementCommitteeandtheRemunerationCommitteeandamemberoftheAuditCommitteeandtheNominatingCommittee.MrChiaYongWhattshallbeconsideredindependentforthepurposeofRule704(7)of theListingManualSectionB:RulesofCatalist (“CatalistRules”)of theSingaporeExchangeSecuritiesTradingLimited(“SGX-ST”).

b) MrChanEngYew(ZengRongyao)(Article107)

MrChanEngYew (ZengRongyao)shall,upon re-electionasDirectorof theCompany, remainasamemberoftheAuditCommittee,theRemunerationCommitteeandtheRiskManagementCommittee.

c) MrLienJownJingVincent(Article117)

MrLienJownJingVincentshall,uponre-electionasDirectoroftheCompany,remainasamemberoftheAuditCommittee,theRemunerationCommitteeandtheNominatingCommittee.MrLienJownJingVincentshallbeconsideredindependentforthepurposeofRule704(7)oftheCatalistRules.

[SeeExplanatoryNote(i)]

Resolution3

Resolution4

3. ToapprovetheDirectors’feesofS$239,000forFY2014. Resolution5

4. Tore-appointMessrsBDOLLPastheCompany’sauditorsfortheensuingyearandtoauthorisetheDirectorstofixtheirremuneration.

Resolution6

SPECIAL BUSINESS

To consider and, if thought fit, to pass the following resolution as ordinary resolution, with or without amendments:

5. Authority to allot and issue shares

“PursuanttoSection161oftheSingaporeCompaniesAct,Cap.50.andsubjecttoRule806oftheCatalistRules,authoritybeand isherebygiven to theDirectorsof theCompany (“Directors”) toallotand issueshares and/or convertible securities in the capital of the Company (whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit provided that:

Resolution7

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(i) the aggregate number of shares and/or convertible securities to be issued pursuant to this resolution mustnotbemorethan100percent(100%)ofthetotalnumberofissuedsharesexcludingtreasuryshares of the Company (as calculated in accordance with sub-paragraph below), of which the aggregate numberofsharesand/orconvertiblesecuritiestobeissuedotherthanonaproratabasistoexistingshareholders of the Company must not be more than fifty per cent (50%) of the total number of issued sharesexcludingtreasurysharesoftheCompany(ascalculatedinaccordancewithsub-paragraph(ii)below);

(ii) (subject to suchmanner of calculations asmay be prescribed by the SGX-ST), for the purpose ofdetermining the aggregate number of shares that may be issued under sub-paragraph (i) above, the totalnumberofissuedsharesexcludingtreasurysharesshallbebasedonthetotalnumberofissuedsharesexcludingtreasurysharesoftheCompanyatthetimethisresolutionispassedafteradjustingfor:

(a) newsharesarisingfromtheconversionorexerciseofanyconvertiblesecurities;

(b) new shares arising from exercising share options or vesting of share awards outstanding orsubsisting at the time of the passing of the resolution approving the mandate, provided the optionsorawardsweregrantedincompliancewithPartVIIIofChapter8oftheCatalistRules;and

(c) anysubsequentbonusissue,consolidationorsub-divisionofshares;and

(iii) unless revoked or varied by the Company in a general meeting, the authority conferred by thisresolutionshallcontinueinforceuntiltheconclusionofthenextannualgeneralmeetingorthedatebywhichthenextannualgeneralmeetingoftheCompanyisrequiredbylawtobeheld,whicheveristhe earlier.”

[SeeExplanatoryNote(ii)]

6. Authority to grant options and allot and issue shares under the Loyz Energy Employee Share Option Scheme

“ThatpursuanttoSection161oftheSingaporeCompaniesAct,Cap50.,authoritybeandisherebygivento the Directors to offer and grant options in accordance with the provisions of the Loyz Energy Employee ShareOptionScheme(the“Scheme”)andtoallotandissuefromtimetotimesuchnumberofsharesinthecapitaloftheCompanyasmayberequiredtobeissuedpursuanttotheexerciseoftheoptionsundertheScheme(includingbutnotlimitedtoallotmentandissuanceofsharesinthecapitaloftheCompanyatanytime, whether during the continuance of such authority or thereafter, pursuant to options made or granted by the Company whether granted during the subsistence of this authority or otherwise) provided always thattheaggregatenumberofsharestobeissuedpursuanttotheSchemewhenaggregatedtogetherwithsharesissuedand/orissuableinrespectofalloptionsgrantedundertheScheme,allotherexistingshareschemesorshareplansoftheCompanyforthetimebeingshallnotexceed15%ofthetotalnumberofissuedsharesof theCompanyexcluding treasuryshares fromtimeto timeand thatsuchauthorityshall,unlessrevokedorvariedbytheCompanyinageneralmeeting,continueinforceuntiltheconclusionofthenextannualgeneralmeetingorthedatebywhichthenextannualgeneralmeetingisrequiredbylawtobeheld, whichever is earlier.”

SeeExplanatoryNote(iii)]

Resolution8

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7. Authority to grant awards and allot and issue shares under the Loyz Energy Performance Share Plan

“ThatpursuanttoSection161oftheSingaporeCompaniesAct,Cap50.,theDirectorsbeandareherebyauthorisedtograntawardsinaccordancewiththeprovisionsoftheLoyzEnergyPerformanceSharePlan(the “Plan”) and to allot and issue from time to time such number of shares in the capital of the Company as mayberequiredtobeissuedpursuanttotheawardsgrantedunderthePlan(includingbutnotlimitedtoallotment and issuance of shares in the capital of the Company at any time, whether during the continuance of such authority or thereafter, pursuant to award made or granted by the Company whether granted during the subsistence of this authority or otherwise) provided always that the aggregate number of shares to be issued pursuant to the Plan when aggregated together with shares issued and/or issuable in respect of all awardsgrantedunder thePlan, allotherexisting share schemesor shareplansof theCompany for thetimebeingshallnotexceed15%ofthetotalnumberofissuedsharesoftheCompanyexcludingtreasurysharesfromtimetotimeandthatsuchauthorityshall,unlessrevokedorvariedbytheCompanyinageneralmeeting,continueinforceuntiltheconclusionofthenextannualgeneralmeetingorthedatebywhichthenextannualgeneralmeetingisrequiredbylawtobeheld,whicheverisearlier.”

[SeeExplanatoryNote(iv)]

Resolution9

8. And to transact any other business which may be properly transacted at an annual general meeting.

BYORDEROFTHEBOARD

YapPeckKhimCompanySecretaryDate:15October2014

ExplanatoryNotes:

(i) ThekeyinformationofMrChiaYongWhatt,MrChanEngYew(ZengRongyao)andMrLienJownJingVincentcanbefound in the annual report.

Thereareno relationships including immediate family relationshipsbetweenMrChiaYongWhatt,MrLienJownJingVincent and the other Directors, the Company or its 10% shareholders.

(ii) The ordinary resolution proposed in item 5, if passed, will empower the Directors from the date of the above annual generalmeetinguntilthedateofthenextannualgeneralmeeting,toallotandissuesharesand/orconvertiblesecuritiesin the Company. The number of shares and convertible securities, which the Directors may allot and issue under this resolutionshallnotexceed100%oftheCompany’stotalnumberofissuedsharesexcludingtreasurysharesatthetimeofpassing this resolution. For allotment and issuance of shares and/or convertible securities other than on a pro-rata basis to all shareholders of the Company, the aggregate number of shares and convertible securities to be allotted and issued shallnotexceed50%oftheCompany’stotalnumberofissuedsharesexcludingtreasuryshares.Thisauthoritywill,unlesspreviouslyrevokedorvariedatageneralmeeting,expireatthenextannualgeneralmeeting.

(iii) The ordinary resolution proposed in item 6, if passed, will empower the Directors to offer and grant options under the SchemeandtoallotandissuesharesupontheexerciseofsuchoptionsinaccordancewiththeScheme.

(iv) The ordinary resolution proposed in item 7 above, if passed, will empower the Directors to grant awards under the Plan and to allot and issue shares in accordance with the Plan.


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Notes:

(a) AmemberoftheCompanyentitledtoattendandvoteattheaboveAGMisentitledtoappointaproxybutnotmorethantwoproxiestoattendandvoteinhis/herbehalf.AproxyneednotbeamemberoftheCompany.

(b) AmemberoftheCompanywhichisacorporationisentitledtoappointitsauthorisedrepresentativeorproxytovoteonits behalf.

(c) TheinstrumentappointingaproxyorproxiesmustbelodgedattheregisteredofficeoftheCompanyat15HoeChiangRoad,#19-01TowerFifteen,Singapore089316notlessthan48hoursbeforethetimeappointedfortheAGM.


PROXY FORM

I/We_____________________________________________________________________________________________________ (Name)

of______________________________________________________________________________________________________(Address)

being a member(s) of Loyz Energy Limited (the “Company”), hereby appoint:

Name NRIC/PassportNo. ProportionofShareholdings

No.ofShares %

Address

and/or (delete as approporiate)

Name NRIC/PassportNo. ProportionofShareholdings

No.ofShares %

Address

Orfailingtheperson,oreitherorboththepersonsreferredtoabove,theChairmanoftheannualgeneralmeeting(“AGM”),as*my/our*proxy/proxiestovotefor*me/uson*my/ourbehalfatthe2014AGMoftheCompanytobeheldonThursday,30October2014atKlapsons,TheBoutiqueHotel–Eighteen,1&2atLevel18,15HoeChiangRoad,TowerFifteen,Singapore089316at11.00a.m.andatanyadjournmentthereof.I/Wedirectmy/ourproxy/proxiestovotefororagainsttheresolutionsassetoutinthenoticeofAGM.IfnospecificdirectionastovotingisgivenorintheeventofanyothermatterarisingattheAGMandatanyadjournmentthereof,my/ourproxy/proxieswillvoteorabstainfromvotingathis/theirdiscretion.Theauthorityhereinincludestherighttodemandortojoinindemandingapollandtovoteonapoll.

Pleaseindicateyourvote“For”or“Against”withan“X”withintheboxprovided)

No. Resolutions For Against

1 Directors’andAuditors’ReportsandAuditedFinancialStatementsforFY2014

2 Tore-electMrChiaYongWhattasDirector

3 Tore-electMrChanEngYew(ZengRongyao)asDirector

4 Tore-electMrLienJownJingVincentasDirector

5 To approve Directors’ fees for FY2014

6 Tore-appointMessrsBDOLLPastheCompany’sauditorsandauthorisetheDirectorstofixtheirremuneration

7 Authority to allot and issue shares

8 Authority to grant options and allot and issue shares under the Loyz Energy EmployeeShareOptionScheme

9 Authority to grant awards and allot and issue shares under the Loyz Energy PerformanceSharePlan

Signedthis________dayof_______________________2014

SignatureorCommonSealofShareholder(s)/CommonSealofCorporateShareholder

IMPORTANT

ForinvestorswhohaveusedtheirCPFmoniestobuyLOYZENERGYLIMITEDshares,thisannualreportisforwardedtothemattherequestoftheirCPFApprovedNomineesandissentsolelyFORINFORMATIONONLY.

ThisProxyFormisnotvalidforusebyCPFinvestorsandshallbeineffectiveforallintentsandpurposesifused or purported to be used by them.

CPF investorswhowish toattend theannualgeneralmeeting (“AGM”)asanobservermust submit theirrequeststhroughtheirCPFApprovedNomineeswithinthetimeframespecified.Iftheyalsowishtovote,they must submit their voting instructions to their CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.

Personal Data Privacy

Bysubmittinganinstrumentappointingaproxy(ies)and/orrepresentative(s),thememberaccepts and agrees tothepersonaldataprivacytermssetoutinthenoticeofAGMdated15October2014.

TotalnumberofSharesin: No.ofShares

(a) CDPRegister

(b) RegisterofMembers

Notes :

1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (asdefined inSection130Aof theCompaniesAct,Cap.50ofSingapore),youshould insert thatnumberofshares.IfyouhavesharesregisteredinyournameintheRegisterofMembers,youshouldinsertthatnumberofshares.IfyouhavesharesenteredagainstyournameintheDepositoryRegisterandsharesregisteredinyournameintheRegisterofMembers,youshouldinserttheaggregatenumberofsharesenteredagainstyournameintheDepositoryRegisterandregisteredinyournameintheRegisterofMembers.Ifnonumberisinserted,theinstrumentappointingaproxyorproxiesshall be deemed to relate to all the shares held by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxiestoattendandvoteonhis/herstead.AproxyneednotbeamemberoftheCompany.

3. Whereamemberappointstwoproxies,theappointmentsshallbetreatedasanalternativetothefirstnamedunlesshe/shespecifiestheproportionofhis/hershareholding(expressedasapercentageofthewhole)toberepresentedbyeachproxy.

4. Completionandreturnof this instrumentappointingaproxyshallnotprecludeamember fromattendingandvotingattheAGM.AnyappointmentofaproxyorproxiesshallbedeemedtoberevokedifamemberattendstheAGMinperson, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrumentofproxytotheAGM.

5. The instrumentappointingaproxyorproxiesmustbedepositedat the registeredofficeof theCompanyat15HoeChiangRoad,#19-01TowerFifteen,Singapore089316,notlessthan48hoursbeforethetimeappointedfortheAGM.

6. Theinstrumentappointingaproxyorproxiesmustbeunderthehandoftheappointororofhisattorneydulyauthorisedinwriting.Wheretheinstrumentappointingaproxyorproxiesisexecutedbyacorporation,itmustbeexecutedeitherunderitssealorunderthehandofanofficerorattorneydulyauthorised.Wheretheinstrumentappointingaproxyorproxiesisexecutedbyanattorneyonbehalfoftheappointer,theletterorpowerofattorneyoradulycertifiedtruecopythereof must be lodged with the instrument.

7. A corporation which is a member of the Company may authorise by resolution of its directors or other governing body suchpersonasitthinksfittoactasitsrepresentativeattheAGM,inaccordancewithSection179oftheCompaniesAct,Cap.50ofSingapore.

8. TheCompany shall be entitled to reject the instrument appointing aproxyor proxies if it is incomplete, improperlycompleted or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrumentappointingaproxyorproxies. Inaddition, in thecaseof sharesentered in theDepositoryRegister,theCompanymayrejectanyinstrumentappointingaproxyorproxieslodgedifsuchmembersarenotshowntohavesharesenteredagainsttheirnamesintheDepositoryRegisterasat48hoursbeforethetimeappointedforholdingtheAGMascertifiedbyTheCentralDepository(Pte)LimitedtotheCompany.

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15 Hoe Chiang Road#19-01 Tower Fifteen

Singapore 089316Tel: (65) 6521 9048Fax: (65) 6225 4945

Website: www.loyzenergy.comInvestors and Media: [email protected]

2014 - listed companyloyzenergy.listedcompany.com/misc/ar2014.pdf · 2014 dear shareholders, i am...

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