MEC RESOURCES LIMITED — Annual Report 2020

Aug 30, 2020

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Appendix 4E Preliminary Final Report

Results for announcement to the market

Appendix 4E Preliminary Final Report Results for announcement to the market
Name of Entity	MEC Resources Limited
ABN	44 113 900 020
Reporting period	30 June 2020
Previous Corresponding Reporting Period	30 June 2019

	$A'000	$A'000
Revenues from ordinary activities (Loss) from ordinary activities after tax attributable to members Net (loss) for the period attributable to members	Down 98% to 2 Up 94% to (2,600) Up 94% to (2,600)
Dividends (distributions)	Amount per security	Franked amount per security
Final dividend Interim dividend	Nil	Nil
Previous corresponding period	N/A	N/A

NTA Backing

Net tangible asset backing per ordinary security

Current period	Previous
	corresponding
	Period
(1.23) cps	(2.33) cps

Commentary on Results

Another busy year for the Board of MEC dealing with legacy issues but the Board successfully raised approximately $1,000,000 in cash and settled its legal disputes with BPH, Grandbridge etc.

More recently, a subsidiary of Advent Energy Ltd, Asset Energy, has issued a writ against MEC on the basis of contra accounts that appeared in MEC’s Dec 2019 accounts.

MEC of course disputes the claim and will defend the writ in due course.

Much of the funds were used on administration and legal expenses as the Company deals with the proposed in-specie distribution.

Summary of ASX Announcements

• 22[nd] Jul 2019 MEC announces the placement of 160,000,000 of Shortfall Shares raising $800,000 in cash. 6[th] Aug 2019 Company announced placement of additions 43,660,640 Shortfall Shares issued for a combination of cash (23,300,000 Shares for $116,500) and in lieu of payment to Creditors (20,360,640 shares for a total of $101,803).

• 12[th] Aug 2019 The Board advised that it reached a settlement of the various legal disputes between MEC Resources and BPH Energy Limited, Grandbridge Limited, Trandcorp Pty Ltd and David Breeze.

• 14[th] Aug 2019 MEC announces placement of 21,019,960 shares for $105,100

• 18[th] Sept 2019 Mr Robert Marusco appointed as joint company secretary

• 22[nd] Nov 2019 Takeovers Panel Application received

• 16[th] Dec 2019 Takeovers Panel declines to make declaration but raised concerns

Contents

MEC Resources Ltd and its controlled entities

16[th] Jan 2020 MEC updated its investment mandate to include technology 11[th] Feb 2020 Mr Matthew Battrick resigned from Board Mr Douglas Verley joined the Board 3[rd] Aug 2020 Mr Michael Sandy resigns from the Board Messrs Tony Hamilton and Stephen Harrison join the Board of MEC

Statement of Profit and Loss and Other Comprehensive Income for the year ended 30 June 2020

MEC Resources Ltd and its controlled entities

Revenue Revenue from ordinary activities Other losses Other income Administration expenses Consulting and legal expenses Employee Benefits expense Interest expense Insurance expenditure Exploration expenditure write off Other expenses Traveling expense Loss before income tax Income tax expense Loss from continuing operations Profit and loss from Discontinued Operations Profit for the period Other Comprehensive Income Total Comprehensive loss for the period Loss attributable to non-controlling interest Loss attributable to members of the parent entity Total Comprehensive Loss attributable to non-controlling interest Total Comprehensive Loss attributable to parent Earnings Per Share - Basic and Diluted (cents per share)	Consolidated Group 30 June 2020 $ 30 June 2019 $ 2,455 107,131 (346,514) - 25,140 339,347 (93,457) (126,397) (416,105) (713,194) (162,857) (418,692) (655) (3,228) (3,636) (28,227) (62,365) (399,278) (74,818) (165,200) (11,104) (20,333)
	(1,143,916) (1,428,071) - -
	(1,143,916) (1,428,071) (1,456,523) -
	(2,600,429) (1,428,071)
	- -
	(2,600,429) (1,428,071)
	- (88,401)
	(2,600,429) (1,339,670)
	- -
	(2,600,429) (1,339,670)
	(0.40) (0.40)

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Statement of Financial Position as at 30 June 2020

MEC Resources Ltd and its controlled entities

Current Assets Cash and cash equivalents Trade receivables Financial assets Other current assets Total Current Assets Non-Current Assets Intangible assets Evaluation and exploration costs Financial Assets Property, plant & equipment Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Financial Liabilities Short-term provisions Total Current Liabilities Total Liabilities Net Assets Equity Issued capital Option Reserve Accumulated losses Total Equity Attributable to Owners Non-controlling Interest Total Equity	Consolidated Group
	30 June 2020 $ 30 June 2019 $
	438,110 350,634 - 63,968 - 563,147 2,164 18,615
	440,274 996,364
	- 22,674 - 10,562,578 8,198,551 84,275 3,435 4,154
	8,201,986 10,673,681
	8,642,259 11,670,045
	256,570 1,077,758 - 791,978 - 122,436
	256,570 1,992,172
	256,570 1,992,172
	8,385,689 9,677,873
	30,644,378 29,336,134 442,273 16,268,145 (22,700,963) (37,941,446)
	8,385,689 7,662,833 - 2,015,040
	8,385,689 9,677,873

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Statement of Changes in Equity as at 30 June 2020

MEC Resources Ltd and its controlled entities

Balance at 1 July 2018 Loss attributable to members of the consolidated entity Other comprehensive income Total comprehensive income Shares issued during the period Share based payments Balance at the year ended 30 June 2019 Balance at 1 July 2019 Loss attributable to continuing operations Other comprehensive income Total comprehensive income Shares issued during the period Capital raising costs Net movements on deconsolidation (i) Balance at the year ended 30 June 2020	Issued Capital $ Accumulated losses $ Option Reserve $ Contribution Reserve $ Total attributable to owners S Non- Controlling Interest $ Total Equity $
	28,784,989 (36,601,776) 531,466 15,736,679 8,451,358 2,103,441 10,554,799 - (1,339,670) - - (1,339,670) (88,401) (1,428,071) - - - - - - -
	- (1,339,670) - - (1,339,670) (88,401) (1,428,071) 553,095 - - - 553,095 - 553,095 (1,950) - - - (1,950) - (1,950)
	29,336,134 (37,941,446) 531,466 15,736,679 (7,662,833) 2,015,040 9,677,873
	29,336,134 (37,941,446) 531,466 15,736,679 7,662,833 2,015,040 9,677,873 - (1,143,916) - - (1,143,916) - (1,143,916) - - - - - - -
	- (1,143,916) - - (1,413,916) - (1,143,916) 1,375,644 - - - 1,375,644 - 1,375,644 (67,400) - - - (67,400) - (67,400) - 16,384,399 (89,193) (15,736,679) 558,527 (2,015,040) (1,456,513)
	30,644,378 (22,700,963) 442,273 - 8,385,689 - 8,385,689

(i) The net loss to the consolidated group on deconsolidating Advent Energy Ltd and its controlled entities was $1,456,513.

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Statement of Cash Flows for the year ended 30 June 2020

MEC Resources Ltd and its controlled entities

Cash Flows From Operating Activities Payments to suppliers and employees Research and Development incentives Interest received Net cash used in operating activities Cash Flows From Investing Activities Payment for PPE Repayment of loans from other entities Loans to other entities Deferred exploration costs Net cash used in investing activities Cash Flows From Financing Activities Proceeds from share issues Net cash used in financing activities Net increase/(decrease) in Cash Held Cash at the Beginning Of The Period Cash at The End Of The Period

Consolidated Group 30 June 2020 $ 30 June 2019 $ (719,023) (1,591,219) 65,140 556,126 2,455 9,112 (651,428) (1,025,981) - (3,647) 200,039 - (300,000) - - (44,098) (99,961) (47,745) 929,090 445,863 929,090 445,863 177,701 (627,863) 260,409 978,497 438,110 350,634

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Revenue and Expenses

Revenue Interest revenue Interest revenue: other entities Other gains and losses Loss on Legal Settlement Other income R&D claim Expenses Consulting and legal expenses Consulting Legal	Consolidated 30 June 2020 $ 30 June 2019 $
	2,455 9,110 - 98,019
	2,455 107,129
	(346,514) -
	(346,514) -
	Consolidated 30 June 2020 $ 30 June 2019 $ 25,140 339,347
	25,140 339,347
	203,906 343,413 212,199 369,782
	416,105 713,194

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Contributed Equity

Ordinary shares (i) Less: Capital Raising Costs	Consolidated 30 June 2020 $ 30 June 2019 $
	31,753,919 30,378,303 (1,109,540) (1,040,169)
	30,644,378 29,336,134

(i)Fully paid ordinary shares carry one vote per share and carry the right to dividends.

Movement in ordinary shares on issue As at 1 July 2019 Shortfall shares issued under non-renounceable entitlements issue – shortfall shares Shares issued as payment of consulting fees Shares issued as settlement of employment liabilities Balance as at 30 June 2020	Number $
	414,578,376 29,336,134 224,680,600 1,082,283 15,792,200 78,961 29,400,000 147,000
	684,451,176 30,644,378

Details of entities over which control has been gained or lost

On the 6[th] of August 2019 the board of MEC Resources announced that it had reached a settlement in relation to the various legal disputes between the company and BPH Energy Limited, Grandbridge Limited, Trandcorp Pty Ltd and David Breeze. As a part of the settlement the board of Advent Energy Ltd changed to consist of Stephen Kelemen, David Breeze, Steve James, Tony Huston and Tom Fontaine. MEC although at the time owning 53% of the shares in Advent Energy Ltd no longer control the activities of Advent therefore control was deemed to be lost with Advent Energy Ltd deconsolidated from MEC on the date of settlement.

Any other significant information

On 17[th] June 2020, Advent Energy Limited and Asset Energy Pty Ltd served Notices of Demand on MEC Resources which MEC disputes and on 27[th] August 2020, Advent served writs on MEC which MEC again disputes and will defend.

The amounts claimed pertain to contra accounts in MEC’s December 2019 half yearly report that resulted from the deconsolidation of its shareholding in Advent Energy Limited, which MEC owns approximately 49% of.

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Compliance Statement

1. This report has been prepared under accounting policies, which comply with accounting standards as defined in the Corporations Act or other standards acceptable to the ASX.

2. This report, and the accounts upon which the report is based (if separate), use the same accounting policies.

3. This report does give a true and fair view of the matters disclosed.

4. This report is based on accounts to which one of the following applies.

The accounts have been audited

The accounts are in the process of being audited or subject to review.

The accounts have been subject to review.

 The accounts have not yet been audited.

Sign here: ............................................................ Date: 31 August 2020 Director

Print name: Andrew Bald

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