DIGITALX LIMITED — Interim / Quarterly Report 2014

Feb 25, 2014

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LIMITED

A.B.N. 59 009 575 035

ASX Appendix 4D & Financial Report for the Half-Year Ended

31 December 2013

Macro Energy Limited Directors’ Report For the half-year ended 31 December 2013

	Page
Results for announcement to market	1
Directors’ report	2
Auditor’s independence declaration	3
Independent auditor’s review report	4
Condensed consolidated statement of profit or loss and other	6
comprehensive income
Condensed consolidated statement of financial position	7
Condensed consolidated statement of changes in equity	8
Condensed consolidated statement of cash flows	9
Notes to the consolidated financial statements	10
Directors’ declaration	16
Other appendix 4D information	17

Macro Energy Limited Directors’ Report For the half-year ended 31 December 2013

Current reporting period: half-year ended 31 December 2013 and previous reporting period: half-year ended 31 December 2012

Results A$	Results A$	Results A$
Revenues - - to - Loss from ordinary activities after tax attributable to members Down 86.88% to 441,179 Net Loss for the period attributable to members Down 86.88% to 441,179
Dividends (distributions)	Amount per security	Franked amount per security
Current period Interim dividend declared Final dividend paid	- -	- -
Previous corresponding period Interim dividend declared Special dividend paid Final dividend paid	- - -	- - -
Record date for determining entitlements to the dividend,	N/A
A brief explanation of revenue, net profit and dividends has been detailed in the enclosed Directors’ report, Statement of comprehensive income, Statement of financial position, Statement of cash flows and Notes to financial statements.

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Macro Energy Limited Directors’ Report For the half-year ended 31 December 2013

Directors' Report

The directors of Macro Energy Limited (“Company” “Macro”) submit herewith the financial report of the consolidated entity for the half-year ended 31 December 2013. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows:

Directors

The names of Directors who held office during or since the end of the half-year and until the date of this report are noted below. Directors were in office for this entire period unless otherwise stated.

Mr. Brett Lawrence Mr. Mark Freeman Mr. Scott Jones

Results

The consolidated loss for the half year was $441,179 (2012: $3,363,003).

Review of Operations

Macro has been actively seeking and reviewing high quality investment opportunities that are capable of generating significant growth and value for the Company.

Corporate

As approved by shareholders, the Company changed its name to Macro Energy Limited from Verus Investments Limited on 18 July 2013.

The Company completed a partially underwritten and pro-rata renounceable entitlement issue on 12 September 2013, raising $2,611,292 before costs.

The shareholders resolved to re-elect Mr Scott Jones as a Director at the Annual General Meeting held on 28 November 2013.

Auditor’s Independence Declaration

Section 307C of the Corporations Act 2001 requires our auditors, Deloitte to provide the directors of the company with an independence declaration in relation to the review of the half-year financial report. This independence declaration is set out on page 3 and forms part of this Directors’ Report for the half-year ended 31 December 2013.

Signed in accordance with a resolution of Directors made pursuant to s.306(3) of the Corporations Act 2001 .

On behalf of the Board of Directors,

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Brett Lawrence Managing Director Perth, 25 February 2014

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Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au

The Board of Directors Macro Energy Ltd Level 7, 1008 Hay Street PERTH WA 6000

25 February 2014

Dear Board Members

Auditor’s Independence Declaration to Macro Energy Limited

In accordance with section 307C of the Corporations Act 2001 , I am pleased to provide the following declaration of independence to the directors of Macro Energy Limited.

As lead audit partner for the review of the financial statements of Macro Energy Limited for the half year ended 31 December 2013, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• (ii) any applicable code of professional conduct in relation to the review.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Chris Nicoloff Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

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Deloitte Touche Tohmatsu ABN 74 490 121 060

Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia

Tel: +61 8 9365 7000 Fax: +61 8 9365 7001 www.deloitte.com.au

Independent Auditor’s Review Report to the Members of Macro Energy Limited

We have reviewed the accompanying half-year financial report of Macro Energy Limited, which comprises the condensed statement of financial position as at 31 December 2013, and the condensed statement of profit or loss and other comprehensive income, the condensed statement of cash flows and the condensed statement of changes in equity for the half-year ended on that date, selected explanatory notes and, the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the end of the half-year or from time to time during the half-year as set out on pages 5 to 15.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Macro Energy Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Auditor’s Independence Declaration

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of Macro Energy Limited, would be in the same terms if given to the directors as at the time of this auditor’s review report.

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu Limited

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Macro Energy Limited is not in accordance with the Corporations Act 2001 , including:

• (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2013 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

DELOITTE TOUCHE TOHMATSU

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Chris Nicoloff Partner Chartered Accountants Perth, 25 February 2014

Macro Energy Limited

Condensed consolidated statement of profit or loss and other comprehensive income for the half-year ended 31 December 2013

Notes Continuing operations Profit on sale of assets 2 Investment income Employee benefits expense Corporate & administration expenses Foreign exchange gain/(loss) Restoration Provision Impairment – exploration and evaluation assets 2 Depreciation Loss before income tax 2 Income tax expense Loss for the period Other comprehensive (loss)/ income Items that may be reclassified subsequently to profit or Loss Exchange differences arising on translation of foreign operations Total Comprehensive loss for the period Earnings per share From continuing operations Basic loss - cents per share Diluted loss - cents per share	Half-year 31 December 2013 $ 31 December 2012 $ - 390,488 28,833 4,018 (48,679) - (452,244) (409,161) 12,455 (9,277) 19,157 14,259 - (3,353,193) (701) (137)
	(441,179) (3,363,003) - -
	(441,179) (3,363,003) (864) (40,154)
	(442,043) (3,403,157)
	Cents Cents (0.31) (8.00) (0.31) (8.00)

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes

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Macro Energy Limited Condensed consolidated statement of financial position as at 31 December 2013

Notes ASSETS Current assets Cash and cash equivalents Trade & other receivables Total current assets Non-current assets Prepayments Exploration & Evaluation Assets 3 Oil & Gas Properties 4 Plant & Equipment Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Restoration Provision Total current liabilities Total liabilities NET ASSETS EQUITY Contributed equity Reserves Accumulated losses Total equity	31 December 2013 $ 30 June 2013 $
	3,319,105 1,420,650 234,786 21,796
	3,553,891 1,442,446
	100,088 97,122 - - - - 2,912 3,615
	103,000 100,737
	3,656,891 1,543,183
	97,932 97,504 117,165 113,692
	215,097 211,196
	215,097 211,196
	3,441,794 1,331,987
	29,011,690 26,508,519 1,539,057 1,491,242 (27,108,953) (26,667,774)
	3,441,794 1,331,987

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

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Macro Energy Limited

Condensed consolidated statement of changes in equity for the half-year ended 31 December 2013

Notes	Issued Capital	Reserves Foreign Currency Translation Equity Settled Other Equity Settled Reserve Option Premium Accumulated Loss Total
	$	$ $ $ $ $ $
	25,090,385 -	(474,817) - 1,198,998 777,834 (22,898,334) 3694,066 - - - - (3,363,003) (3,363,003) (40,154) - - - (40,154)
	-	(40,154) - - - (3,360,029) (3,400,183)
	1,016,625 (79,114)	- - - - - 1,016,625 - - - - - (79,114)
	26,027,896	(514,971) 1,198,998 777,834 (26,261,335) 1,228,422
	26,508,519 -	(492,749) - 1,198,998 784,993 (26,667,774) 1,331,987 - - - - (441,179) (441,179) (864) - - - (864)
	-	(864) - - - (441,179) (442,043)
	2,611,292 (108,121)	- - - 48,679 - 2,659,971 - - - - - (108,121)

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

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Macro Energy Limited

Condensed consolidated statement of cash flows for the half-year ended 31 December 2013

Note Cash flows from operating activities Interest received Payments to suppliers and employees Net cash used in operating activities Cash flows from investing activities Payments for production (Payment) / proceeds from bonds Payments for exploration and evaluation expenditure Proceeds on sale of assets Net cash (used in) / provided by investing activities Cash flows from financing activities Proceeds from issues of equity securities Payments for share issue costs Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the half-year Effects of exchange rate changes on the balance of cash held in foreign currencies Cash and cash equivalents at the end of the half-year	**Half-year **
	31 December 2013 $ 31 December 2012 $
	28,833 4,019 (454,557) (441,520)
	(425,724) (437,501)
	- (64,825) (219,992) 7,380 - (185,511) - 416,435
	(219,992) 173,479
	2,611,292 1,016,625 (80,072) (59,114)
	2,531,220 957,511
	1,885,504 693,489 1,420,650 525,505 12,951 (13,516)
	3,319,105 1,205,477

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

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Macro Energy Limited Notes to the Condensed consolidated financial statements for the half-year ended 31 December 2013

1. Significant accounting policies

Statement of compliance

The half-year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134: Interim Financial Reporting . Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half-year report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent financial report.

Basis of preparation

The condensed consolidated financial statements have been prepared on the basis of historical cost except for the revaluation of certain non-current assets and financial instruments. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The accounting policies and methods of computation adopted in the preparation of the half-year financial report are consistent with those disclosed in the Company’s 2013 annual financial report for the financial year ended 30 June 2013, except for the necessity to enhance the accounting policy with respect to the impact of the Standards and Interpretations described below. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

New or Revised Standards and Interpretations

The Consolidated Entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and are effective for the current financial reporting period, being the half year ended 31 December 2013.

The following new and revised Standards and Interpretations have been adopted in the current financial reporting period that are relevant to the Consolidated Entity:

• AASB 10 ‘Consolidated Financial Statements’ and AASB 2011-7 ‘Amendments to Australian Accounting Standards arising from the consolidation and Joint Arrangements standards’

• AASB 13 ‘Fair Value Measurement’ and AASB 2011-8 ‘Amendments to Australian Accounting Standards arising from AASB 13’

The adoption of the above standards have not had any material impact on the reported figures.

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Macro Energy Limited Notes to Condensed consolidated financial statements for the half-year ended 31 December 2013

Going concern

The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The consolidated entity has incurred a loss for the half year after tax of $441,179 and experienced operating cash outflows of $425,724. As at 31 December 2013 the consolidated entity has total current assets of $3,553,891 which includes $3,319,105 in cash and cash equivalents.

The directors believe that it is appropriate to prepare the financial statements on the going concern basis for the following reasons:

• (i) The Company has in place processes aimed at minimising all discretionary expenditures going forward;

• (ii) The Company believes that it has the capacity to raise new equity to invest in the ongoing development of its prospective oil and gas interests based upon the indicative results achieved to date on each of the projects;

• (iii) The Company is not committed to future drilling and well completion costs, beyond the commitments disclosed in note 9 to these accounts, as such that the Company will only expend future amounts if they have sufficient cash to meet the cost; and

• (iv) Management has reviewed the cash flow forecasts for a period of 12 months from date of approval of this half-year report, and noted that the consolidated entity has sufficient cash resources to continue as a going concern.

The Directors have reviewed the consolidated entity’s overall position and outlook in respect of the matters identified above and are of the opinion that the use of the going concern basis is appropriate in the circumstances.

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Macro Energy Limited Notes to Condensed consolidated financial statements for the half-year ended 31 December 2013

2. Loss before income tax expense The following revenue and expense items are relevant in explaining the financial performance for the half-year: Sale of Assets Bullseye Sale Less : Expenses Net Income Chorbane Sale Less : Expenses Net Income Total Sale of Assets Impairment – oil and gas asset 3. Exploration and Evaluation Assets Exploration and evaluation – at cost Movement for the half year Opening balance Additions Impairment of capitalised expenditure Translation movement differences Transfer to asset available for sale Carrying amount at the end of period	2. Loss before income tax expense The following revenue and expense items are relevant in explaining the financial performance for the half-year: Sale of Assets Bullseye Sale Less : Expenses Net Income Chorbane Sale Less : Expenses Net Income Total Sale of Assets Impairment – oil and gas asset 3. Exploration and Evaluation Assets Exploration and evaluation – at cost Movement for the half year Opening balance Additions Impairment of capitalised expenditure Translation movement differences Transfer to asset available for sale Carrying amount at the end of period	Half-year 31 December 2013 $ 31 December 2012 $ - 127,798 - (15,563)
		- 112,235
		- 498,413 - (220,160)
		- 278,253
		- 390,488 - (3,353,193)
		Consolidated 31 December 2013 $ 30 June 2013 $ - -
		- 3,331,131 - 125,842 - (3,401,829) - (55,144)
		- -
		- -

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Macro Energy Limited Notes to Condensed consolidated financial statements for the half-year ended 31 December 2013

4. Oil and Gas Properties

Consolidated

			31 December	30 June
			2013	2013
			$	$
Oil and Gas Properties at cost			-	-
Movement for the half-year
Carrying amount at beginning of half-year			-	15,909
Transfer to Prepayments				-
Sales (i)			-	(15,752)
Amortisation				-
Translation movement differences			-	(157)
Carrying amount at end of	period		-	-
(i) In August 2012 the company divested its interest		in Bullseye
5. Contributed Equity
	Consolidated		Consolidated
	31 December	30 June	31 December	30 June
	2013	2013	2013	2013
	No.	No.	$	$
Balance brought forward
at the beginning of the
period	72,535,888	1,885,158,563	26,508,519	25,090,385
Shares issued during the
period	145,071,776	1,451,892,422	2,611,292	1,321,312
Capital Raising Costs			(108,121)	(105,991)
Balance before
consolidation	217,607,664	3,337,050,985	29,011,690	26,305,706
Balance after
consolidation	-	66,741,238	-	26,305,706
Share placements	-	5,794,650	-	202,813
Balance at the end of
period	217,607,664	72,535,888	29,011,690	26,508,519

6. Segment information

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Macro Energy Limited Notes to Condensed consolidated financial statements for the half-year ended 31 December 2013

(a) Description of segments

AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

Following adoption of AASB 8, the identification of the Group’s reportable segments has not changed. During the half year the Macro’s operating segments were located in the USA.

(b) Segment information provided to the Board

Information regarding these segments is presented below. The accounting policies of the reportable segments are the same as the Group’s accounting policies.

	Revenue	Segment Profit(Loss)
	Half-year ended 31 December 2013 $ 31 December 2012 $	Half-year ended 31 December 2013 $ 31 December 2012 $
Continuing operations Oil and Gas Activities – USA Oil and Gas Activities – Africa Interest income Sale of Assets Other income Corporate and administration costs Loss before tax	- - - -	- (3,319,764) - (224,120)
	- -	- (3,543,884) - 4,018 - 591,479 - - - (414,615)
		- (3,363,002)

Group Assets by reportable operating segment	Group Assets by reportable operating segment
Oil and Gas Activities - USA Total segment assets Unallocated assets Total assets	31 December 2013 $ 30 June 2013 $ 108,202 114,369 108,202 114,369 3,548,689 1,428,814 3,656,891 1,543,183

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Macro Energy Limited Notes to Condensed consolidated financial statements for the half-year ended 31 December 2013

7. Issues, repurchases and repayments of equity securities

During the half-year, the company issued 145,071,776 ordinary shares at 3.5c each to raise $2,611,292 before cost.

8. Key management personnel

Remuneration arrangements of key management personnel are disclosed in the annual financial report.

9. Contingencies and commitments

At the date of this report, the Directors were not aware of any contingent liabilities or other capital commitments that are of a material nature.

10. Fair value of financial instruments

Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis (but fair value disclosures are required)

The directors consider that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values.

11 . Subsequent events

No other matter or circumstance has arisen since the end of the half-year reporting period which has not been dealt with in the financial statements that has significantly affected or may significantly effect:

• (i) the investments of the Group (ii) the results of those investments; or

• (iii) the state of affairs of the Group.

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Macro Energy Limited Directors’ Declaration 31 December 2013

Directors’ Declaration

The directors declare that:

• a) in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and

• b) In the directors’ opinion, the attached financial statements and the notes thereto are in accordance with the Corporations Act 2001 , including compliance with the accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity.

Signed in accordance with a resolution of the directors made pursuant to s.303(5) of the Corporations Act 2001 .

On behalf of the Directors,

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Brett Lawrence Managing Director

Perth, 25 February 2014

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Macro Energy Limited ABN 59 009 575 035 Other information required to be given to ASX under listing rule 4.2A.3

Net tangible assets per security	Current period	Previous corresponding Period
Net tangible assets per security	2.45 cents	2.00 cents

Details of entities over which control has been gained or lost during the period

Name of entity	Date of gain or loss of control	Contribution to reporting entity’s loss

Details of associates and joint venture entities

Name of entity	Percentage of ownership interest held at end of period	Percentage of ownership interest held at end of period	Aggregate share of net profit (loss) contributed to the reporting entity	Aggregate share of net profit (loss) contributed to the reporting entity
	Current period	Previous corresponding period	Current period $A	Previous corresponding period $A
Total	-	-	-	-

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