ZIMI LIMITED - Annual Report 2016

WHL Energy Limited

ABN 25 113 326 524

ANNUAL REPORT

FOR THE FINANCIAL YEAR ENDED 30 June 2016

WHL ENERGY LIMITED and its controlled entities

Corporate Information Directors’ Report Auditor’s Independence Declaration Statement of Comprehensive Income Statement of Financial Position Statement of Cash Flows Statement of Changes in Equity Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report Corporate Governance Statement ASX Additional Information	Page
	3 4 17 18 19 20 21 22 56 57 59 60

WHL ENERGY LIMITED and its controlled entities

CORPORATE INFORMATION

ABN: 25 113 326 524

Directors:

Mr Gary Castledine – Non-Executive Chairman Mr Neville Bassett – Non-Executive Director Mr Faldi Ismail – Non-Executive Director

Company Secretary:

Mr Neville Bassett

Registered office:

Ground Floor, 22 Delhi Street, West Perth WA 6005

Principal place of business:

Ground Floor, 22 Delhi Street, West Perth WA 6005 Phone: +61 8 6500 0271 Fax: +61 8 9321 5212 Email: [email protected] Web: www.whlenergy.com

Postal Address:

PO Box 1042, West Perth WA 6872

Share registry:

Automic Registry Services Level 1, 7 Ventnor Avenue, West Perth WA 6005 Phone: 1300 288 664

Solicitors:

Steinepreis Paganin Level 4, 16 Milligan Street Perth WA 6000 Phone: +61 8 9321 4000 Fax: +61 8 9321 4333

Bankers:

Westpac Level 6, 109 St Georges Terrace, Perth WA 6000

Auditors:

HLB Mann Judd Level 4, 130 Stirling Street, Perth WA 6000

Securities Exchange Listing:

WHL Energy Ltd shares and selected options are listed on the Australian Securities Exchange (ASX: WHN, WHNO. WHNOA)

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Your Directors submit the annual financial report of the Consolidated Entity consisting of WHL Energy Limited and its controlled entities (“ the Group ”) for the financial year ended 30 June 2016. 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 financial year and until the date of this report are as follows. Directors were in office for this entire period unless otherwise stated.

Mr Gary Castledine

Non-Executive Chairman (Appointed 5 February 2016)

Experience and expertise

Mr Castledine has over 20 years’ experience in stockbroking and capital markets. He was previously a founding director and the Head of Corporate with a Perth, Western Australia based specialist boutique securities dealer and corporate advisory firm. Mr Castledine is currently specialising in corporate finance with boutique investment banking and corporate advisory firm Westar Capital Ltd. Mr Castledine’s experience has enabled him to gather an extensive suite of clients in a corporate advisory role which has seen him involved in many capital raisings and IPO’s across a spectrum of industries. He is currently a member of the Stockbrokers Association of Australia.

Other current directorships:

Non-executive Chairman of Vector Resources Ltd since 24 February 2009 Non-executive director of Laconia Resources Ltd since 8 May 2015 Non-executive director of The Gruden Group Limited since 20 August 2014

Former directorships in last 3 years:

Nil

Interests in WHL Energy Limited:

50,000,000 Ordinary shares

Mr Neville Bassett AM B.Bus FCA

Non-Executive Independent Director (Appointed 5 February 2016)

Experience and expertise

Mr Bassett is a Chartered Accountant operating his own corporate consulting business, specialising in the area of corporate, financial and management advisory services. Mr Bassett has been involved with numerous public company listings and capital raisings. His involvement in the corporate arena has also taken in mergers and acquisitions, and includes significant knowledge and exposure to the Australian financial markets. Mr Bassett has experience in matters pertaining to the Corporations Act, ASX listing requirements, corporate taxation and finance. He is a director or company secretary of a number of public and private companies.

Other current directorships:

Non-executive Chairman of Ram Resources Ltd since 22 March 2004 Non-executive director of Meteoric Resources NL since 29 November 2012 Non-executive director of Vector Resources Ltd since 22 April 2010 Non-executive director of Laconia Resources Ltd since 8 May 2015 Non-executive director of Pointerra Ltd since 30 June 2016

Former directorships in last 3 years:

Mamba Minerals Ltd (13 August 2010 – 13 August 2013) The Gruden Group Ltd (20 August 2014 – 13 May 2016)

Interests in WHL Energy Limited:

7,500,000 Ordinary shares 1,875,000 Listed Options (WHNO)

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Mr Faldi Ismail, B.Bus

Non-Executive Independent Director

Experience and expertise

Mr Ismail is an experienced corporate advisor who specialises in the restructure and recapitalisation of a wide range of ASX-listed companies. He has many years of investment banking experience and has advised on numerous cross border transactions including capital raisings, structuring of acquisitions and joint ventures overseas. Mr Ismail is also the founder and operator of Otsana Capital, a boutique advisory firm specialising in mergers & acquisitions, capital raisings and Initial Public Offerings. Other current directorships:

Other current directorships:

Asiamet Resources Limited (previously Kalimantan Gold Corporation Limited) (TSX.V: ARS) (Appointed 12 September 2009)

TV2U International Ltd (Previously Galicia Energy Corporation) (ASX:TV2) (Appointed 15 May 2015) Ookami Limited (previously Advanced Engine Components) (ASX:OOK) (Appointed 5 June 2015) Cre8tek Limited (ASX:CR8) – Appointed 28 October 2015

Former directorships in last 3 years:

Mareterram Limited (previously Style Limited) (ASX: MTM) (Appointed 3 May 2013 – Resigned 10 August 2015) BGD Corporation Limited (ASX: BDG) (Appointed 10 September 2013 – Resigned 6 April 2015) Emergent Resources Limited (ASX: EMG) (Appointed 31 May 2014 – Resigned 6 April 2016)

Interests in WHL Energy Limited:

350,000 Ordinary shares 20,000 Listed Options (WHNO)

Mr Doug Jendry was appointed as a Non-Executive Director on 17 November 2015 and resigned on 5 February 2016.

Mr Stuart Brown was appointed as Non-Executive Chairman on 17 September 2015 and resigned on 17 November 2015.

Mr Graham Durtanovich resigned as an Independent Non-Executive Director on 5 February 2016.

Company Secretary

Mr Neville Bassett (Appointed 12 May 2016)

Mr Neville Bassett also holds the position of Non-Executive Independent Director. His experience and expertise is noted above.

Mr Ian Hobson resigned as Company Secretary on 26 August 2015.

Mr Steven Wood was appointed as Company Secretary on 26 August 2015 and then resigned on 12 May 2016.

Directors’ interests in the shares options and performance rights of the Company and related bodies

corporate

The following relevant interests in the shares of the Company or a related body corporate were held by the Directors as at the date of this report.

as at the date of this report.
Directors	Shares	Listed options	Unlisted options and
			performance rights
	No.	No.	No.
Mr Neville Bassett	7,500,000	1,875,000	-
Mr Gary Castledine	50,000,000	-	-
Mr Faldi Ismail	350,000	20,000	-

Ordinary shares issued as a result of options and performance rights issued

No ordinary shares were issued by the Company during or since the end of the financial year as a result of the exercise of any options and/or performance rights.

Remuneration of key management personnel

Information about the remuneration of key management personnel is set out in the Remuneration Report of this Directors’ Report, on pages 9 to 15. The Remuneration Report details the remuneration arrangements for key management personnel (“ KMP ”) who are defined as those persons having authority and responsibility for planning,

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

directing and controlling the major activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

Unissued ordinary shares under option by KMP

At the date of this report, unissued ordinary shares of the Company held under option by the Directors and other members of KMP are detailed on the previous page.

Shares under option

At the date of this report unissued ordinary shares of the Company under option are:

Expiry date Listed options 30/11/2016 30/06/2018 Unlisted options 3/12/2017 31/7/2018	Exercise price $	Shares under option No.
	0.18 0.002 0.014 0.004	3,638,715 608,361,121
		611,999,836
		19,300,000 350,000,000
		369,300,000

Dividends

The Directors do not recommend the payment of a dividend in respect of the year ended 30 June 2016. No dividends have been paid or declared during the financial year.

Principal activities

The principal activities of the entities within the Group during the year were oil and gas exploration and the assessment of new investment opportunities. WHL Energy is an Australian based exploration company with projects within Australia and previously in the Republic of Seychelles. The Group’s asset portfolio is comprised of conventional oil and gas projects, focusing specifically on opportunities within offshore Australia.

Review of operations

During the 2016 financial year, the Group continued to progress the exploration of its existing projects and seek opportunities to grow its asset portfolio. This information outlined below has been previously released in announcements to the ASX during the financial period.

Australia, Victoria - VIC/P67 (La Bella) Permit (WHN: 100% Operator)

An application for an Above Work Program Variation and Suspension and Extension was made to the National Offshore Petroleum Titles Administrator (NOPTA) in May 2015 and was awarded on 19 August 2015. The above work program variation acknowledges the Simultaneous Inversion processing already completed and the requirement for PreSDM reprocessing, while the 12-month Suspension and Extension to Year 3 will provide time for completion of the PreSDM reprocessing, interpretation and well planning for drilling. Permit Year 3 will end on 3 August 2016 and the permit term will end on 3 August 2019. Subsequent to year-end the company has lodged a further 12 month Suspension and Extension Application for year 3 expenditure with NOPTA. The application remains under consideration.WHL has re-initiated discussions with a number of 3rd parties who may be interested in a potential farm-in to the VIC/P67 Permit and the La Bella gas discovery.

Seychelles (WHN: 25% Non-Operator) – Discontinued Operation

As advised to the ASX on 14 January 2016, in accordance with the provisions of the farm-out agreement between Ophir Seychelles (Areas 1, 2 and 3) Limited (“Ophir”), PetroQuest International Incorporated and WHL Energy Limited dated 4 March 2014 (“FOA”), Ophir elected to exercise its exit option thereunder.

In reference to the Deed of Novation, Amendment and Restatement Agreement dated 14 April 2014 between the Government of the Republic of Seychelles (the “Government”), PetroSeychelles Limited (“PetroSeychelles”), Petroquest International Incorporated (“PQI”) and Ophir (the “Petroleum Agreement”) relating to Blocks 5B/1, 5B/2 and 5B/3 (the “Blocks”), Ophir, in accordance with the terms of the Petroleum Agreement, has elected to exercise its exit option thereunder.

Under the terms of the Petroleum Agreement, the Blocks revert back to the Seychelles Government. PetroSeychelles have formally notified PQI that the Petroleum Agreement dated 14 April 2014 relating to Blocks 5B/1, 5B/2 and 5B/3 is terminated. The associated expenditure has been written off in full.

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

New Business Development

During the course of the year the company evaluated a number of new asset opportunities.

On 12 September 2016, the Company announced that it had signed a merger implementation agreement (“MIA”) with Quantify Technology Limited (“Quantify”) with a view to making separate off market takeover offers to acquire all of Quantify’s fully paid, ordinary shares ( Share Offer ) and main class of options ( Option Offer ) and to acquire all other Quantify securities by private agreement (“ Transaction ”).

The Share Offer will be subject to typical conditions precedent, including:

WHL Energy shareholders approve the resolutions necessary to give effect to the Transaction, including a change in nature and scale of activities for the purposes of ASX Listing Rule 11.1.3, a consolidation of WHL Energy’s securities on a 1:83 basis ( Consolidation ) and a change in name to Quantify Technology Holdings Limited;
a 90% minimum acceptance condition, which (at any time prior to WHL Energy receiving acceptances representing 80% of Quantify Shares) can only be waived with the consent of Quantify;
at least $3.5 million (with a maximum of $5 million) being raised through the issue of WHL Energy Shares at an issue price of $0.06 per WHL Energy Share (on a post Consolidation basis) under a prospectus ( Capital Raising );
ASX granting conditional approval for WHL Energy to be re-admitted to quotation on the ASX following completion of the Transaction;
no prescribed occurrence or material adverse change (as defined in the MIA) occurring in relation to Quantify;
no material acquisitions, disposals or new commitments being undertaken by Quantify;
WHL Energy becomes entitled to acquire all other Quantify securities on issue; and
other customary conditions as set out in the MIA, including no regulatory intervention which (among other things) restrains or prohibits the Share Offer.

The Share Offer will offer Quantify ordinary shareholders a sum of $22,200,000 to be satisfied, assuming 100% acceptance of the Share Offer, through the issue of a total of 250,000,000 WHL Energy Shares (calculated on a postConsolidation basis and a deemed issue price of $0.06 each) and 120,000,000 WHL Energy Performance Shares (calculated on a post-Consolidation basis) to be issued to each Quantify Ordinary Shareholder who accepts the Share Offer as follows:

1.0189 WHL Energy Shares (on a post-Share Consolidation basis) for each Quantify Ordinary Share held; and
0.4891 WHL Energy Performance Shares (on a post-Share Consolidation basis) for each Quantify Ordinary Share held. The WHL Energy Performance Shares vest and are convertible into WHL Energy Shares based on achievement of milestones as set out in Part A of Schedule 4 of the MIA.

The Option Offer consideration is, assuming 100% acceptance of the Option Offer and Quantify having a total of 61,150,000 Quantify Ordinary Options on issue on completion of the Transaction, a total of 62,604,402 WHL Energy Options (calculated on a post-Consolidation basis, exercisable at $0.075 each, expiring 30 September 2019) to be issued to each Quantify Ordinary Optionholder who accepts the WHL Energy Option Offer on the basis of 1.0238 WHL Energy Options (on a post-Share Consolidation basis) for each Quantify Ordinary Option held.

For further detail refer ASX Announcement dated 12 September 2016 .

Quantify is an Australian-based pioneer of ‘Truly Intelligent Buildings’ which provides the building blocks and products needed to enable strong market participation in the IoT space.

Quantify’s patented technology, the Q Device, is a unique device in the IoT market and has applications across energy management, real-time environmental monitoring, retirement living, Big Data Analytics and ultimately paving the way towards “Quantify Truly Intelligent Buildings”[TM] .

The Q Device is the result of more than 4 years’ research and development, with certified and tested prototypes completed.

With the Q Device’s production model undergoing testing, Quantify is targeting having the final product commercially launched in the second half of 2017, with first commercial contracts already signed and additional contracts subject to negotiation.

This proposed acquisition will provide Quantify with the funds to accelerate its roll- out strategy across Australia and the Asia Pacific region and progress plans for its entry into the United States, European, Middle East and African markets.

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Operating results for the year

The net loss after income tax of the Group for the year ended 30 June 2016 totalled $30,472,257 comprising net loss from continuing operations of $6,587,228 and net loss from discontinued operations of $23,885,029 (year ended 30 June 2015: loss $3,181,018). This is equivalent to a loss of 0.72 cents per share (year ended 30 June 2015: loss of 1.91 cents per share).

Net loss after tax from continuing operations Net loss after tax from discontinued operations Overall net loss after tax *Shareholder returns*	30 June 2016 $ 30 June 2015 $
	6,587,228 3,181,018 23,885,029 -
	30,472,257 3,181,018

The table below shows the financial performance against shareholder returns as measured by the closing share price at 30 June 2016:

Net loss after tax ($) Basic loss per share (cents) Closing period end share price (cents)	30,472,257 3,181,018 0.72 1.91
	0.001 0.6

Review of financial conditions

The net assets of the Group have decreased to $1,862,237 at 30 June 2016, mainly attributable to the write-off of all exploration expenses relating to continued operations of $3,691,525 and from discontinued operations of $23,885,029 (2015: Increased to $26,008,106).

The Group’s cash position at 30 June 2016 is $2,104,361 (30 June 2015: $1,230,069).

During the financial year, the Company:

Issued 2,451,848,858 ordinary shares pursuant to a non-renounceable rights issue, raising $2,511,246 before costs;
Issued 2,000,000,000 ordinary shares on the conversion of convertible notes with a face value of $2,000,000; and
Issued 921,660,000 ordinary shares by way of share based payments with a deemed value of $2,525,300

Significant changes in the state of affairs

Significant changes in the state of affairs of the Company during the financial year are detailed under Review of Operations.

In the opinion of directors, there were no other significant changes in the state of affairs of the Company that occurred during the financial year under review not otherwise disclosed in this report or in the financial report.

After balance date events

No matters or circumstances have arisen, after balance date, that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial periods, other than as outlined in the Review of operations.

Likely developments and expected results

Other than the matters included in this Directors Report or elsewhere in the Annual Financial Report, future developments, business strategies and prospects of the Company and the expected results of those operations have not been disclosed, as the Directors believe that their inclusion would most likely result in unreasonable prejudice to the Company.

Environmental legislation

The operations of the Company are subject to a range of statutory environmental regulations relating to oil and gas exploration in Australia and the Seychelles. There is legislation that governs the general requirements for managing environmental impact and specific environmental authorities with conditions for each area of operation.

The Board of Directors in its ongoing monitoring of compliance with environmental regulations has not become aware of any significant breach of the regulations governing the Company’s operations during the period covered by this report.

Corporate Governance Statement

In order to streamline the content of this Annual Report and pursuant to the disclosure options mandated by the Council, the Company has elected to publish its Corporate Governance Statement in compliance with ASX Listing Rule 4.10.3 on its website at www.whlenergy.com.au under the “ Corporate Governance ” tab.

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Remuneration Report (Audited)

This report outlines the remuneration arrangements in place for the KMP of the Group for the financial year ended 30 June 2016. The information provided in this Remuneration Report has been audited as required by Section 308(3C) of the Corporations Act 2001.

The Remuneration Report details the remuneration arrangements for KMP who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any director (whether executive or otherwise) of the Group.

Key management personnel Directors

Mr Gary Castledine Non-Executive Chairman Appointed 5 February 2016 Mr Neville Bassett Non-Executive Director Appointed 5 February 2016 Mr Faldi Ismail Non-Executive Director Appointed 2 June 2015 Mr Stuart Brown Non-Executive Chairman Appointed 2 June 2015 Resigned 17 November 2015 Mr Doug Jendry Non-Executive Director Appointed 17 November 2015 Resigned 5 February 2016 Mr Graham Durtanovich Non-Executive Director Appointed 2 June 2015 Resigned 5 February 2016

Senior Executives

Mr Matt Fittall Exploration Manager Appointed 6 June 2011 Resigned 31 July 2015

Remuneration philosophy

The performance of the Company depends upon the quality of the directors and executives. The philosophy of the Company in determining remuneration levels is to:

set competitive remuneration packages to attract and retain high calibre employees;
link executive rewards to shareholder value creation; and
establish appropriate, demanding performance hurdles for variable executive remuneration.

Remuneration committee

The Nomination and Remuneration Committee is responsible for determining and reviewing compensation arrangements for the Executive Directors. The remuneration for Non-Executive Directors is set out in the constitution of the Company and the aggregate remuneration of $400,000 per annum was approved in the annual general meeting held in November 2011.

The Nomination and Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of directors and executives on a periodic basis by reference to relevant employment market conditions with an overall objective of ensuring maximum stakeholder benefit for the retention of a high quality Board and executive team.

During the year under review there was not a separate Nomination and Remuneration committee. As such, the responsibilities that traditionally fall to the Nomination and Remuneration Committee were undertaken by the full Board.

Remuneration structure

In accordance with best practice Corporate Governance, the structure of Non-Executive Directors and Executive Directors remuneration (where applicable) is separate and distinct.

Non-Executive Director remuneration

The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

The Board considers advice from external stakeholders as well as the fees paid to Non-Executive Directors of comparable companies when undertaking the annual review process.

Each director receives a fee for being a director of the Company inclusive of additional fees paid for each Board committee on which a director sits.

The remuneration of Non-Executive Directors for the period ended 30 June 2016 is detailed within this report in the Table of Remuneration of Key Management Personnel.

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Senior Executive remuneration

Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive schemes).

Remuneration for the Executive Directors is subject to ongoing review by the Nomination and Remuneration Committee. Senior Executive remuneration is subject to review by the Board.

Fixed remuneration

Fixed remuneration is reviewed annually. The process consists of a review of relevant comparative remuneration both within the market and internally and, where appropriate, external advice on policies and practices. The Nomination and Remuneration Committee has access to external, independent advice where necessary.

Senior Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash and fringe benefits such as motor vehicles and other. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Company.

The fixed remuneration component of the KMP of the Company is detailed in the Remuneration of Key Management Personnel Table in this report.

Variable remuneration

The objective of the short term incentive programme is to link the achievement of the Company's operational targets with the remuneration received by the executives and senior management charged with meeting those targets. The total potential short term incentive available is set at a level so as to provide sufficient incentive to achieve the operational targets such that the cost to the Company is reasonable in the circumstances.

Actual payments granted depend on the extent to which specific operating targets are met. The aggregate of annual payments available for Senior Executives across the Company is subject to the approval of the Board. There was no variable remuneration granted during the year under review.

The Company makes long term incentive awards to Senior Executives in a manner that aligns this element of remuneration with the creation of shareholder wealth. The details of these awards are included in the employee share option plans.

Employment contracts

Non-Executive Directors

The Company has entered into terms of engagement with each non-executive director. The terms of their appointment were determined in accordance with the Company’s constitution and are subject to the provisions of the Constitution dealing with retirement, re-election and removal of directors of the Company.

The terms of the engagement provide that the Company will maintain an appropriate level of directors’ and officers’ insurance and provide access to the Company’s records in accordance with the terms of indemnity, insurance and access entered into between the Company and each Non-Executive Director.

The annualised remuneration payable to each of the non-executive directors is $42,000.

Executive Directors

At the date of this report there was no Executive Director and the Board have assumed this role.

Senior Executives

Mr Fittall was appointed as Exploration Manager under an executive employment agreement on 6 June 2011. In terms of a Deed of Separation entered into on 31 May 2015 Mr Fittall agreed to a payment of $112,499 in lieu of notice and forfeited 240,000 zero priced options. He was paid his termination entitlements during the year.

WHL ENERGY LIMITED

and its controlled entities

DIRECTORS’ REPORT

Remuneration of key management personnel for the year ended 30 June 2016

KMP			Short-term employee benefits	Short-term employee benefits		Post-employment benefits	Post-employment benefits		Equity		Total
		Salary & fees	Bonuses	Termination	Other	Super-	Other		Equity based			Performance
				benefits		annuation			payments			related
		$							$
			$	$	$	$	$				$	%
Directors
Mr Brown	2016	14,000	-	-	-		-	-		-	14,000	Nil
	2015	34,000	-	-	-	3,877		-		-	37,877	Nil
Mr Durtanovich	2016	24,500	-	-	-		-	-		-	24,500	Nil
	2015	-	-	-	-		-	-		-	-	Nil
Mr Ismail	2016	42,000	-	-	-		-	-		-	42,000	Nil
	2015	51,531	-	-	-	7,223		-		-	58,754	Nil
Mr Rowbottam	2016	-	-	33,621	-		-	-		-	33,621	Nil
	2015	318,320	-	101,962	8,293	18,783		-		-	447,358	Nil
Mr Schrull	2016	-	-	-	-		-	-		-	-	Nil
	2015	4,714	-	-	-		448	-		-	5,162	Nil
Mr Jendry	2016	7,817	-	-	-		-	-		-	7,817	Nil
	2015	-	-	-	-		-	-		-	-	Nil
Mr Bassett	2016	17,500	-	-	-		-	-		-	17,500	Nil
	2015	-	-	-	-		-	-		-	-	Nil
Mr Castledine	2016	17,500	-	-	-		-	-		-	17,500	Nil
	2015	-	-	-	-		-	-		-	-	Nil
Total Directors	2016	123,317	-	33,621	-		-	-		-	156,938	Nil
Remuneration	2015	408,565	-	101,962	8,293	30,331		-		-	549,151	Nil
Senior
Executives
Mr Fittall	2016	-	-	76,284	-		-	-		-	76,284	Nil
	2015	394,620	-	112,500	-	18,783		-		-	525,903	Nil
Total Senior
Executives	2016	-	-	76,284	-		-	-		-	76,284	Nil
Remuneration	2015	394,620	-	112,500	-	18,783		-		-	525,903	Nil

No performance rights/options were granted to KMP during the financial year or in existence at 30 June 2016.

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Equity-based compensation granted to KMP during the current financial year

There was no equity based compensation granted to KMP as part of their remuneration during the year other than the 15,000,000 fully paid ordinary shares issued to Mr Fittall as part of the separation agreement entered into during the year ended 30 June 2015.

Bonuses

KMP’s did not have a short term incentive component linked to defined performance measures as part of their remuneration for the year ended 30 June 2016.

Key Management personnel equity holdings

Fully paid ordinary shares of WHL Energy Limited held by KMP

The number of ordinary shares in WHL Energy Limited held during the financial year ended 30 June by KMP of the Group including their personally related parties, are set out below:

	Balance at	Received on	Balance on	Net change	Balance at end	Balance held
	beginning of	exercise of	appointment	other1	of year	nominally
	year	options
	No.	No.	No.	No.	No.	No.
30 June 2016
Directors
Mr Neville Bassett	-	-	-	7,500,000	7,500,000	7,500,000
Mr Gary Castledine	-	-	-	50,000,000	50,000,000	50,000,000
Mr Stuart Brown3	350,000	-	-	(350,000)	-	-
Mr Doug Jendry3	-	-	20,000,000	(20,000,000)	-	-
Mr Graham						-
Durtanovich3	-	-	-	-	-
Mr Faldi Ismail	350,000	-	-	-	350,000	350,000
Senior Executives
Mr Matt Fittall3	1,208,476	-	-	(1,208,476)	-	-
30 June 2015
Directors
Mr Stuart Brown	-	320,000	-	30,000	350,000	350,000
Mr Graham						-
Durtanovich	-	-	-	-	-
Mr Faldi Ismail	-	320,000	-	30,000	350,000	350,000
Mr Jeffrey Schrull2	-	-	-	-	-	-
Mr David Rowbottam2	490,909	720,000	-	(1,335,000)	-	-
Senior Executives
Mr Matt Fittall3	643,443	480,000	-	85,033	1,208,476	1,208,476

Net change other includes balances held at the time of appointment, balances at time of termination, forfeitures and transactions that do not involve the Company.
These KMP resigned during the year to 30 June 2015
These KMP resigned during the year to 30 June 2016

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Listed options of WHL Energy Limited

The number of listed options in WHL Energy Limited held during the financial year ended 30 June by each KMP of the Group, including their personally related parties are set out below:

	Balance at	Received on		Balance at	Net change	Balance at end	Balance held
	beginning of	exercise of		appointment	other1	of year	nominally
	year	options
	No.	No.		No.	No.	No.	No.
30 June 2016
Directors
Mr Neville Bassett	-		-	-	1,875,000	1,875,000	1,875,000
Mr Gary Castledine	-		-	-	-	-	-
Mr Stuart Brown3	20,000		-	-	(20,000)	-	-
Mr Doug Jendry3	-		-	2,500,000	(2,500,000)	-	-
Mr Graham
Durtanovich3	-		-	-	-	-	-
Mr Faldi Ismail	20,000		-	-	-	20,000	20,000
Senior Executives
Mr Matt Fittall3	56,688		-	-	(56,688)	-	-
30 June 2015
Directors
Mr Stuart Brown	-		-	-	20,000	20,000	20,000
Mr Graham							-
Durtanovich	-		-	-	-	-
Mr Faldi Ismail	-		-	-	20,000	20,000	20,000
Mr Jeffrey Schrull2	-		-	-	-	-	-
Mr David							-
Rowbottam2	-		-	-	(66,666)	-
Senior Executives
Mr Matt Fittall3	140,861		-	-	(84,173)	56,688	56,688

Net change other includes balances held at the time of appointment, balances at time of termination, forfeitures and transactions that do not involve the Company.
These KMP resigned during the year to 30 June 2015
These KMP resigned during the year to 30 June 2016.

All equity transactions with KMP other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the Company would have adopted if dealing at arm's length.

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Unlisted options of WHL Energy Limited

The unlisted options over ordinary shares in the WHL Energy Limited held during the financial year ended 30 June by KMP of the Group, including their personally related parties, is set out below.

						Vested	as at end of the year	as at end of the year
	Balance at	Granted as	Options	Net change	Balance at	Total	Exercisable	Not
	beginning of	remuneration	exercised	other1	end of year			exercisable
	year
	No.	No.	No.	No.	No.	No.	No.	No.
30 June 2016
There was nothingto report in respect of this			year
30 June 2015
Directors
Mr Stuart Brown	-	-	-	-	-	-	-	-
Mr Graham	-	-	-	-	-	-	-
Durtanovich								-
Mr Faldi Ismail	-	-	-	-	-	-	-	-
Mr David	-	-	-	-	-	-	-
Rowbottam2								-
Mr Jeffrey Schrull2	-	-	-	-	-	-	-	-
Senior Executives
Mr Matt Fittall3	720,000	-	(480,000)	(240,000)	-	-	-	-

Net change other includes balances held at the time of appointment, balances at time of termination, forfeitures and transactions that do not involve the Company.
These KMP resigned during the year to 30 June 2015.
These KMP resigned during the year to 30 June 2016.

During the financial year, no options (2015: 480,000) were exercised by KMP.

Performance Rights of WHL Energy Limited

The unlisted performance rights over ordinary shares in WHL Energy Limited held during the financial year ended 30 June by KMP of the Group including their personally related parties, is set out below. All performance rights were forfeited during the 2015 year as a result of resignation or voluntary forfeiture by KMP.

							Vested at balance date	Vested at balance date
	Balance at	Granted as	Options	Net change	Balance at	Total		Exercisable	Not
	beginning of	remune-	exercised	other1	end of year			exercisable
	year	ration
	No.	No.	No.	No.	No.	No.		No.	No.
30 June 2016
Performance rights no longer		exist
30 June 2015
Directors
Mr Stuart Brown	800,000	-	(320,000)	(480,000)	-		-	-	-
Mr Graham
Durtanovich	-	-	-	-	-		-	-	-
Mr Faldi Ismail	800,000	-	(320,000)	(480,000)	-		-	-	-
Mr David Rowbottam2	1,400,000	-	(720,000)	(680,000)	-		-	-	-
Mr Jeffrey
Schrull2	-	-	-	-	-		-	-	-

Net change other includes balances held at the time of appointment, balances at time of termination, forfeitures and transactions that do not involve the Company.
These KMP resigned during the year ended 30 June 2015.

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Key management personnel

The following table provides the total amount of transactions that were entered into with key management personnel for the relevant financial year.

Transactions with related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Key management personnel		Fees to related	Amounts		Amounts	Amounts
		parties	owed by		owed to	owed to
			related		KMP	related parties
			parties
		$	$		$	$
Mr GaryCastledine	2016	17,500		-	-	3,850
Mr Neville Bassett	2016	17,500		-	-	3,850
Mr Faldi Ismail	2016	42,000		-	-	-
Mr Stuart Brown	2016	14,000		-	-	-
	2015	9,500		-	-	-
Mr DougJendry	2016	7,817		-	-	-
Mr Graham Durtanovich	2016	24,500		-	2,736	-
Mr David Rowbottam	2016	-		-	-	-
	2015	-		-	101,963	-
Mr Matt Fittall	2016	-		-	-	-
	2015	-		-	112,500	-

Other than ongoing director remuneration, there were no other transactions with KMP during the year ended 30 June 2016.

At balance date the amounts owing to KMP constituted accrued but unpaid director fees. Amounts owing at 30 June 2015 related to part of the deeds of settlements entered into on 31 May 2015.

End of Remuneration Report.

Directors’ meetings

The number of meetings of directors (including meetings of committees of directors) held during the year and the numbers of meetings attended by each director were as follows:

	Eligible to attend	Board meetings
	No.	No.
Meetings held	5	5
Meetings attended
Mr Faldi Ismail	5	5
Mr Stuart Brown – resigned 17.11.2015	2	2
Mr Graham Durtanovich – resigned 5.2.2016	3	3
Mr Doug Jendry – appointed 17.11.2015, resigned 5.2.2016	1	2
Mr Neville Bassett – appointed 5.2.2016	2	2
Mr Gary Castledine – appointed 5.2.2016	2	2

Proceedings on behalf of the Company

No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the company is a party, for the purposes of taking responsibility on behalf of the Company for all or part of the proceedings. No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section 237 of the Corporations Act 2001.

Indemnification and insurance of Directors and Officers

The Company has agreed to indemnify all the directors of the Company for any liabilities to another person (other than the Company or related body corporate) that may arise from their position as directors of the Company and its controlled entities, except where the liability arises out of conduct involving a lack of good faith.

During the financial year the Company paid a premium of $19,778 in respect of a contract insuring the directors and officers of the Company and its controlled entities against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability.

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Auditor independence and non-audit services

Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the directors of the Company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is set out on page 17 and forms part of this directors’ report for the year ended 30 June 2016.

Non-Audit services

Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 22 to the financial statements. The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The Directors are of the opinion that the services do not compromise the auditor’s independence as all non-audit services have been reviewed to ensure that they do not impact the integrity and objectivity of the auditor and none of the services undermine the general principles relating to auditor independence, as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board.

Signed in accordance with a resolution of the Directors.

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Gary Castledine Non-Executive Chairman Perth, 30 September 2016

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the consolidated financial report of WHL Energy Limited for the year ended 30 June 2016, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) any applicable code of professional conduct in relation to the audit.

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Perth, Western Australia M R W Ohm 30 September 2016 Partner

==> picture [17 x 14] intentionally omitted <==

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of

International, a worldwide organisation of accounting firms and business advisers.

WHL ENERGY LIMITED

and its controlled entities

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016

Notes	Consolidated Consolidated 2016 $ 2015 $
Revenue 2 Operating expenses 3 Finance costs 3 Loss before income tax Income tax 4 Loss for the year after income tax Loss from discontinued operations 6 Loss for the year after tax from all operations Other comprehensive income Items that may be reclassified subsequently to profit and loss: Exchange differences on translating foreign operations Other comprehensive income/(loss) Total comprehensive loss for the year Loss attributable to: Owners of parent Total comprehensive loss for the year Basic Loss per share Loss from continuing operations Loss from discontinued operations Total 7 Diluted Loss per share Loss from continuing operations Loss from discontinued operations Total 7	43,896 1,071,067 (5,496,258) (2,711,229) (1,134,866) (1,540,856)
	(6,587,228) (3,181,018) - -
	(6,587,228) (3,181,018)

	(23,885,029) -

	(30,472,257) (3,181,018)
	(221,327) 2,959,940
	(221,327) 2,959,940
	(30,693,584) (221,078)
	(30,693,584) (221,078)
	(30,693,584) (221,078)

	Cents Cents
	0.16 1.91 0.56 -
	0.72 1.91
	0.16 1.91 0.56 - 0.72 1.91

The accompanying notes form part of these financial statements

WHL ENERGY LIMITED and its controlled entities

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016

Notes	Consolidated Consolidated 2016 $ 2015 $
Current assets Cash and cash equivalents 8 Trade and other receivables 9 Total current assets Non-current assets Plant and equipment 10 Deferred exploration expenditure 11 Total non-current assets Total assets Current liabilities Trade and other payables 12 Borrowings 13 Current tax liabilities 4 Provisions 14 Total current liabilities Total liabilities Net assets Equity Issued capital 15 Reserves Accumulated losses 17 Total equity	2,104,361 1,230,069 51,512 355,833
	2,155,873 1,585,902
	- 146,426 - 27,757,099
	- 27,903,525
	2,155,873 29,489,427
	293,636 1,084,602 - 2,009,367 - 303,376 - 83,976
	293,636 3,481,321
	293,636 3,481,321
	1,862,237 26,008,106
	67,907,710 63,178,063 7,082,852 5,486,111 (73,128,325) (42,656,068)
	1,862,237 26,008,106

The accompanying notes form part of these financial statements

WHL ENERGY LIMITED

and its controlled entities

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016

Notes	Consolidated Consolidated 2016 $ 2015 $
Cash flows from operating activities Receipts from operating activities Payments to suppliers and employees Cash (used in) operations before interest Interest paid Net cash used in operating activities 8 Cash flows from investing activities Payment for exploration expenditure Interest received Net cash used in investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Proceeds from issue of shares Payments for issue costs Net cash (used in)/provided by finance activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Effect of exchange rate fluctuations on cash held Cash and cash equivalents at end of year	35,129 239,748 (682,137) (670,354)
	(647,008) (430,606) (3,059) (182,484)
	(650,067) (613,090)
	(129,998) (1,656,149) 17,105 26,883
	(112,893) (1,629,266)
	- 2,500,000 (181,000) (4,170,633) 2,511,246 645,930 (314,220) (62,585)
	2,016,026 (1,087,288)
	1,253,066 (3,329,644) 1,230,069 3,833,381 (378,774) 726,332
	2,104,361 1,230,069

The accompanying notes form part of these financial statements

WHL ENERGY LIMITED

and its controlled entities

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016

Consolidated	Issued Capital Accumulated Losses Foreign Currency Translation Reserve Equity Based Payment Reserve Option Reserve Total $ $ $ $ $ $
Balance at 1 July 2014 Loss for the year Other comprehensive income Total comprehensive loss for the year Equity issued for options and performance rights exercised Equity issued during the year Equity issued for services Equity issue costs Lapsed options transferred to accumulated losses Balance at 30 June 2015 Balance at 1 July 2015 Loss for the year Other comprehensive income Total comprehensive loss for the year Equity issued during the year Options issued Equity issue costs Balance at 30 June 2016	62,118,536 (42,938,030) 990,485 2,042,277 3,326,386 25,539,654 - (3,181,018) - - - (3,181,018) - - 2,959,940 - - 2,959,940
	- (3,181,018) 2,959,940 - - (221,078) 467,310 - - (467,200) - 110 548,619 - - - 97,203 645,822 106,181 - - - - 106,181 (62,583) - - - - (62,583) - 3,462,980 - (136,594) (3,326,386) -
	63,178,063 (42,656,068) 3,950,425 1,438,483 97,203 26,008,106
	63,178,063 (42,656,068) 3,950,425 1,438,483 97,203 26,008,106 - (30,472,257) - - - (30,472,257) - - (221,327) - - (221,327)
	- (30,472,257) (221,327) - - (30,693,584) 6,856,556 - - - - 6,856,556 - - - 1,818,068 1,818,068 (2,126,909) - - - - (2,126,909)
	67,907,710 (73,128,325) 3,729,098 1,438,483 1,915,271 1,862,237

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other requirements of the law.

The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. The financial statements are for the consolidated entity consisting of WHL Energy Limited and its subsidiaries.

The financial report has also been prepared on a historical cost basis except for financial instruments that are measured at fair values at the end of each reporting period as set out in the accounting policies. Historical cost is based on the fair values of the consideration given in exchange for assets.

The financial report is presented in Australian dollars, which is the Company’s functional currency unless otherwise stated for the purposes of preparing the consolidated financial report. The Company is a for-profit entity.

The Company is a listed public company, incorporated in Australia and operating in Australia and previously in the Republic of Seychelles. The entity’s principal activities are oil and gas exploration.

(b) Application of new and revised Accounting Standards

There are a number of new Accounting standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Company and have not been applied in preparing these financial statements. The Company does not plan to adopt these standards early.

These standards are not expected to have a material impact on the Company in the current or future reporting periods.

(c) Statement of compliance

The financial report was authorised for issue on 30 September 2016.

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (“AIFRS”). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (“IFRS”).

(d) Basis of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of WHL Energy Limited (“ the Company ” or “ Parent Entity ”) as at 30 June 2016 and the results of all subsidiaries for the year then ended. WHL Energy Limited and its subsidiaries are referred to in this financial report as the Group or the Consolidated Entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the Parent Entity, using consistent accounting policies.

Subsidiaries are fully consolidated from the date on which control is transferred to the Company and cease to be consolidated from the date on which control is transferred out of the Company. Control exists where the Company has; power over the investee, is exposed or has rights to variable returns from its involvement with the investee and has the ability to use its power to affect its returns. The Company reassess whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the control elements.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power.

Income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the noncontrolling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non- controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and 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. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable AASBs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 139, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

(e) Going concern

The financial statements have been prepared on a going concern basis which contemplates the continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business.

(f) Critical accounting judgements and key sources of estimation uncertainty In the application of the Group’s accounting policies the Directors of the Company are required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in which the estimate is revised if it affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the critical judgements and estimation that the Directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements.

Equity-based payment transactions

The Group measures the cost of any equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using Black and Scholes.

The Group measures the cost of cash-settled equity-based payments at fair value at the grant date using the market value, Black and Scholes model and a binomial model depending on the terms and conditions upon which the instruments were granted, as discussed in Note 18.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Exploration and evaluation costs carried forward

The recoverability of the carrying amount of exploration and evaluation costs carried forward has been reviewed by the Directors. In conducting the review, the recoverable amount has been assessed by reference to the higher of “fair value less costs to sell” and “value in use”. The exploration and evaluation of the mineral resources has not reached a stage at which there is sufficient information to estimate future cash flows for determining value in use.

The Directors have decided that until there is sufficient data to determine technical feasibility and commercial viability, the exploration asset will be impaired to the full extent of its carrying value.

Classification of converting loan

A financial liability can be classified as equity if the substance of the transaction is equity but it must fall within the scope and definitions as defined in AASB 132. The ECP recapitalisation proposal was entered into for the sole intention of providing equity to the Company. However, the Company did not meet the ASX Listing capacity rules to issue the quantum of equity required under the proposal and a converting loan was entered into subject to shareholders’ approval. Despite the substance of the transaction, the terms of converting loan did not meet all the requirements of AASB 132 to be classified as equity. The Converting loan was disclosed as a liability at 30 June 2015 (see Note 13).

Fair value measurements

Some of the Group's assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in Note 19.

Going concern

Taxation

The calculation of the taxation liability remains to be confirmed by the relevant taxation authorities.

(g) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of the Company.

(h) Foreign currency translation

Both the functional and presentation currency of the Company and its Australian subsidiaries is Australian dollars. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance date.

All exchange differences in the consolidated financial report are taken to profit or loss with the exception of differences on foreign currency borrowings that provide a hedge against a net investment in a foreign entity. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss. Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

As at the balance date the assets and liabilities of these subsidiaries are translated into the presentation currency of the Company at the rate of exchange ruling at the balance date and their statements of comprehensive income are translated at the average exchange rate for the year.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The exchange differences arising on the translation are taken directly to a separate component of equity, being recognised in the foreign currency translation reserve.

On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in profit or loss.

(i) Revenue recognition

Revenue is measured at fair value of the consideration received or receivable. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific criteria must also be met before revenue is recognised:

Rendering of services

Revenue from time and material contracts is recognised at the contractual rates as labour hours are delivered and indirect expenses are incurred.

Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

Premium income

Premium income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Premium income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

(j) Borrowing costs

Borrowing costs are capitalised when they are directly attributable to the acquisition, construction or production of qualifying assets where the borrowing cost is added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale. In respect of exploration and evaluation, borrowing costs are capitalised as part of the cost of the related asset only when at the reporting date, the exploration and evaluation activities have reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and it is probable that they will result in the entity obtaining future economic benefits.

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

(k) Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Operating lease payments are recognised as an expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(l) Income tax

The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company’s subsidiaries and associates operate and generate taxable income. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the consolidated financial statements. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance date.

Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:

when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.

Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

(m) Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(n) Impairment of assets

The Directors assess at each balance date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease).

An assessment is also made at each balance date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s 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. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

(o) Cash and cash equivalents

Cash comprises cash at bank and in hand.

For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above.

(p) Trade and other receivables

Trade and other receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method, less any allowance for impairment. Trade and other receivables are generally due for settlement within periods ranging from 15 days to 30 days.

Impairment of trade and other receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original contractual terms.

Factors considered by the Group in making this determination include known significant financial difficulties of the debtor, review of financial information and significant delinquency in making contractual payments to the Group. The impairment allowance is set equal to the difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the original effective interest rate. Where receivables are shortterm discounting is not applied in determining the allowance.

The amount of the impairment loss is recognised in the statement of comprehensive income within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of comprehensive income.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(q) Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (“ FVTPL ”), ‘held-to-maturity’ investments, ‘available-for-sale’ financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

 Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.

 Financial assets at FVTPL

Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL. A financial asset is classified as held for trading if:

it has been acquired principally for the purpose of selling it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:
such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management and information about the grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and AASB 139 ‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘other gains and losses’ line item. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the effect of discounting is immaterial. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 Impairment of financial assets

The Company assesses at each balance date whether a financial asset or group of financial assets other than those at FVTPL is impaired. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For financial assets that are carried at cost if there is objective evidence that an impairment loss has been incurred, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods. The amount of the loss is recognised in profit or loss.

For financial assets that are carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment. For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Financial liabilities

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’.

 Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL. A financial liability is classified as held for trading if:

it has been incurred principally for the purpose of repurchasing it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and AASB 139 ‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses’ line item.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 Other financial liabilities

Other financial liabilities, including borrowings and trade and other payables, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

 Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

 Derivative financial instruments

Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

(r) Interest in a jointly controlled operation

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

When a group entity undertakes its activities under joint operations, the Group as a joint operator recognises in relation to its interest in a joint operation:

its assets, including its share of any assets held jointly;
its liabilities, including its share of any liabilities incurred jointly;
its revenue from the sale of its share of the output arising from the joint operation;
its share of the revenue from the sale of the output by the joint operation; and
its expenses, including its share of any expenses incurred jointly.

The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in accordance with the AASBs applicable to the particular assets, liabilities, revenues and expenses.

When a group entity transacts with a joint operation in which a group entity is a joint operator (such as a sale or contribution of assets), the Group is considered to be conducting the transaction with the other parties to the joint operation, and gains and losses resulting from the transactions are recognised in the Group's consolidated financial statements only to the extent of other parties' interests in the joint operation. The Group has certain contractual arrangements with other ventures to engage in joint venture activities that do not give rise to a jointly controlled entity. These arrangements involve the joint ownership of assets dedicated to the purposes of the joint venture. The assets are used to derive benefits for the ventures.

The interests of the Parent Entity and Group in the unincorporated joint ventures are brought to account by recognising in the financial statements under the Group’s proportionate share of joint venture revenues expenses, assets and liabilities.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(s) Plant and equipment

Items of plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. The residual value, useful life and depreciation method applied to an asset are reassessed at least annually.

Where parts of an item of plant and equipment have different useful lives, they are accounted for as separate items of plant and equipment.

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:

Plant and equipment – over 3 to 15 years.

The assets' residual values, useful lives and amortisation methods are reviewed and adjusted, if appropriate, at each financial year end.

Impairment

The carrying values of plant and equipment are reviewed for impairment at each balance date, with the recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the statement of comprehensive income, unless an asset has previously been re-valued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through profit or loss.

The recoverable amount of assets is the greater of their net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Derecognition and disposal

An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

(t) Exploration and evaluation

Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in which they are incurred where the following conditions are satisfied:

the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
the exploration and evaluation expenditures are expected to be recouped through successful development and exploration of the area of interest, or alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the balance date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to, the areas of interest are continuing.

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortised assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to operational activities in a particular area of interest.

Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any).

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.

Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is reclassified to development.

(u) Trade and other payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables are presented as current liabilities unless payment is not due within 12 months.

(v) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

Provisions are measured at the present value or management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability.

When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(w) Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

The fair value of the liability portion of a convertible note is determined using a market interest rate for an equivalent non-convertible note. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the note. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in shareholders’ equity, net of income tax effects.

Borrowings are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

(x) Employee benefits

Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months of the balance date are recognised in other payables in respect of employees’ services up to the balance date. They are measured at the amounts expected to be paid when the liabilities are settled.

Termination benefit

A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(y) Equity-based payment transactions Equity settled transactions

Share-based payments made to employees and others that grant rights over the shares of the Company are accounted for as equity-settled share-based payment transactions when the rights over the shares are granted. As the Company does not require reimbursement for the cost of the grant, amounts relating to the grant are deemed a contribution by the Company in its capacity as owner.

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value is determined by an internal valuation using Black and Scholes, Binomial models or market value. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of WHL Energy Limited (market conditions) if applicable

The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of nontransferability, exercise restrictions, and behavioural considerations.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of equity instruments that will eventually vest.

There are currently no equity instruments on issue under the one ESOP (approved at a General meeting on 31 May 2011) which provides benefits to directors, senior executives and employees.

The cumulative expense recognised for equity-settled transactions at each balance date until vesting date reflects:  the extent to which the vesting period has expired; and
the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(z) Issued capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a new business are not included in the cost of acquisition as part of the purchase consideration.

(aa) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the financial year.

Contingently issuable shares are treated as outstanding and included in the calculation from the date when all the necessary conditions are satisfied.

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

Potential ordinary shares are treated as dilutive when and only when their conversion into ordinary shares would decrease earnings per share or increase loss per share from continuing operations.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(bb) Parent Entity financial information

The financial information for the Parent Entity, WHL Energy Limited, disclosed in Note 21 has been prepared on the same basis as the consolidated financial statements, except as set out below.

Investments in subsidiaries, associates and joint venture entities

Investments in subsidiaries are accounted for at cost in the financial statements of WHL Energy Limited.

NOTE 2: REVENUE

NOTE 2: REVENUE
Revenue from operations: Interest income Premium fee income Other Overhead recovery Unrealised foreign exchange gain Realised exchange gain	Consolidated Consolidated 2016 $ 2015 $
	17,105 26,883 - 180,976 26,791 - - 58,772 - 585,141 - 219,295
	43,896 1,071,067

NOTE 3: OPERATING EXPENSES

Expenses and losses from operations: Depreciation Loss on disposal Depreciation and amortisation Employee benefit Equity based payments Wages and salaries Other Total employee benefits Other expenses Accounting, audit and compliance Consultants Exploration expenditures and write-offs Fair value adjustments Foreign exchange losses General and administrative expenses Impairment Legal expenses Occupancy costs Travel and accommodation Total other expenses Total Operating expenses Finance costs Establishment fees Interest Premium fees Total finance costs	Consolidated Consolidated 2016 $ 2015 $
	14,015 40,758 132,321 -
	146,336 40,758
	435,000 - 210,430 1,017,456 - 97,625
	645,430 1,115,081
	355,250 226,108 176,748 169,650 3,691,547 221,785 - 237,359 227 44,904 192,812 160,481 - 23,110 60,007 185,118 227,901 263,105 - 23,770
	4,704,492 1,555,390
	5,496,258 2,711,229
	- 1,037,330 1,134,866 12,484 - 491,042
	1,134,866 1,540,856

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 4: INCOME TAX EXPENSE

NOTE 4: INCOME TAX EXPENSE
Numerical reconciliation between tax expense and pre-tax net loss: Loss before tax Income tax using the domestic corporation tax rate 28.5% Increase/(decrease) in income tax expense due to: Non-deductible expenses Other deferred tax assets and tax liabilities not recognised Tax assets relating to losses not recognised Income tax expense Deferred tax assets have not been recognised in respect of the following: Taxable temporary differences (net) Tax losses Net deferred tax assets	Consolidated Consolidated 2016 $ 2015 $

	30,472,257 3,181,018
	(9,141,677) (954,305) 2,240,339 149,645 7,013,551 (346,195) (112,212) 1,150,856
	- -
	(588,805) (931,270) 8,111,085 2,466,989
	7,522,280 1,535,719

The taxable temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilise the benefits from.

Current tax liabilities Other	Consolidated Consolidated 2016 $ 2015 $
	- 303,376

The current income tax liability was attributable to the US subsidiary PetroQuest International Inc. at 30 June 2015. The Company has received advice during the year ended 30 June 2016 that this amount was not due and payable.

NOTE 5: SEGMENT REPORTING

The operating segments have been 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.

Information reported to the Group’s chief operating decision maker for the purpose of resource allocation and assessment of performance focused on operating oil and gas exploration, and the corporate administration entity.

The segment information for the corporate entity focused on the administration costs and the minimisation thereof as assessment of performance. The exploration activities were reviewed as a whole and the assessment of performance focused on exploration expenditure and cost minimisation. The monthly operating entity’s performance was assessed based on cash flow information. A consolidated position was not used to assess the performance of the operating segments. This information prepared in the tables below reconciles to the Annual Financial Statements for the year.

There are no accounting policy differences between the reportable segments.

Information regarding the Group’s reportable segments is presented below.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 5: SEGMENT REPORTING (CONTINUED)

The following table present revenue and profit information and certain asset and liability information regarding business segments for the year ended 30 June 2016:

	Continuing Operations Discontinued Operation Total
Year ended 30 June 2016 Revenue Interest received Other revenue Total segment revenue Operating expenses Segment net operating loss Segment assets Segment liabilities	Oil and Gas Exploration Australia $ Corporate Entity $ Oil and Gas Exploration Seychelles $ $
	- 17,105 - 17,105 - 26,791 - 26,791
	- 43,896 - 43,896
	(3,691,546) (2,939,578) (23,885,029) (30,516,153)
	(3,691,546) (2,895,682) (23,885,029) (30,472,257)
	- 2,155,873 - 2,155,873 - (148,155) (145,481) (293,636)

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 5: SEGMENT REPORTING (CONTINUED)

The following table presents revenue and profit information and certain asset and liability information regarding business segments for the year ended 30 June 2015.

Year ended 30 June 2015 Revenue Interest received Other revenue Total segment revenue Operating expenses Segment net operating loss before taxation Taxation Segment net operating loss Segment assets Cash and cash equivalents Other receivables Loans subsidiaries Investment subsidiaries Deferred exploration expenditure Plant and equipment Total segment assets Segment liabilities Trade and other payables Borrowings Provisions Tax liability Deferred revenue Loan from parent entity Total segment liabilities	Oil and Gas Exploration Australia $ Oil and Gas Exploration Seychelles $ Corporate Entity $ Consolidation Entry $ Total $
	- - 26,883 - 26,883 524,689 850,673 1,937,820 (2,268,998) 1,044,184
	524,689 850,673 1,964,703 (2,268,998) 1,071,067
	(1,560,790) (65,646) (2,691,295) 65,646 (4,252,085)
	(1,036,101) 785,027 (726,592) (2,203,352) (3,181,018)
	- - - - -
	(1,036,101) 785,027 (726,592) (2,203,352) (3,181,018)
	- - 1,230,069 - 1,230,069 - - 355,833 - 355,833 - - 22,308,535 (22,308,535) - - - 10,962,208 (10,962,208) - 3,580,054 17,299,665 - 6,877,380 27,757,099 - - 146,426 - 146,426
	3,580,054 17,299,665 35,003,071 (26,393,363) 29,489,427
	34,685 211,870 838,047 - 1,084,602 - - 2,009,367 - 2,009,367 - - 83,976 - 83,976 - 303,376 - - 303,376 - - - - - - 22,308,535 - (22,308,535) -
	34,685 22,823,781 2,931,390 (22,308,535) 3,481,321

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 5: SEGMENT REPORTING (CONTINUED)

Segment net operating loss after tax reconciliation to the statement of comprehensive income

Segment net operating loss after tax reconciliation to the statement of comprehensive income	Segment net operating loss after tax reconciliation to the statement of comprehensive income	f comprehensive income
Consolidated Consolidated 2016 $ 2015 $ Reconciliation of segment net operating loss after tax to net loss before tax: Segment net operating loss after tax (30,693,584) (221,078) Income tax - - Translation differences on translating foreign operations 221,327 (2,959,940) Total operating loss per the statement of comprehensive income (30,472,257) (3,181,018) Segment assets reconciliation to the statement of financial position		Consolidated Consolidated
		2016 $ 2015 $
		(30,472,257) (3,181,018)

Cash and cash equivalents Other receivables Plant and equipment Deferred exploration expenditure Total assets per the statement of financial position	Consolidated Consolidated 2016 $ 2015 $
	2,104,361 1,230,069 51,512 355,833 - 146,426 - 27,757,099
	2,155,873 29,489,427

Segment liabilities reconciliation to the statement of financial position

Segment liabilities include trade and other payables and debt. The Group has a centralised finance function that is responsible for raising debt and capital for the entire operations. Each entity or business uses this central function to invest excess cash or obtain funding for its operations.

Reconciliation of segment operating liabilities to the statement of financial position

Trade and other payables Borrowings Provisions Tax liability Total liabilities per the statement of financial position	Consolidated Consolidated 2016 $ 2015 $
	293,636 1,084,602 - 2,009,367 - 83,976 - 303,376
	293,636 3,481,321

NOTE 6: DISCONTINUED OPERATION

On 14 January 2016, the Group lost title to its Seychelles interest as blocks reverted to the Seychelles government (refer Note 1). The project is accounted for as a discontinued operation as it constitutes a separate major geographical area or operation.

Financial information relating to the discontinued operation to the date of discontinuance is set out below:

Financial performance and cash flow information

The financial performance presented is for the year ended 30 June 2016.

Financial performance from discontinued operation Exploration written off Income tax benefit Loss for the year from discontinued operations Loss attributable to owners of the parent relates to: Loss from discontinued operations	30 June 2016 30 June 2015 $ $ (24,191,173) (1,565,478) 306,144 - (23,885,029) (1,565,478) (23,885,029) (1,565,478) (23,885,029) (1,565,478)

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 7: EARNINGS PER SHARE

Basic Loss per share Loss from continuing operations Loss from discontinued operations Total basic loss per share Diluted Loss per share Loss from continuing operations Loss from discontinued operations Total diluted loss per share Diluted earnings per share There is no dilution of shares due to options as the potential ordinary shares are not dilutive and are therefore not included in the calculation of diluted loss per share. Basic earnings per share The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows: Loss for the year Weighted average number of ordinary shares for the purposes of basic earnings per share.	Consolidated Consolidated 2016 2015
	Cents per share Cents per share
	0.16 1.91 0.56 -
	0.72 1.91
	0.16 1.91 0.56 -
	0.72 1.91

	$ $

	(30,472,257) (3,181,018)

	Number Number
	4,261,241,621 166,615,262

NOTE 8: CASH AND CASH EQUIVALENTS

Cash at bank and on hand Short-term deposits Total cash and cash equivalents	Consolidated Consolidated 2016 $ 2015 $ 116,578 1,117,649 1,987,783 112,420 2,104,361 1,230,069

Cash at bank earns interest at floating rates on daily deposit rates.

Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

Reconciliation to cash flow statement

For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand at bank and investments in money market instruments, net of outstanding bank overdrafts.

Cash and cash equivalents as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 8: CASH AND CASH EQUIVALENTS (CONTINUED)

Reconciliation of loss for the year to net cash flows used in operating activities

Loss from operations Items classified as investing/financing activities Interest received Exploration expenditure Non-cash items Depreciation Loss on disposal Unrealised foreign exchange (gain)/loss Disposal of property, plant and equipment Impairment of exploration assets Discontinued operations written-off Equity based payments Interest on Convertible Notes Change in assets and liabilities Receivables Trade and other payables affecting operating activities Tax liability Provisions Net cash used in operating activities		Consolidated Consolidated 2016 $ 2015 $
		(30,472,257) (3,181,014) (17,105) (26,883) 129,998 - 14,015 40,758 132,321 - 693,145 (759,536) - 2,019 3,688,392 23,110 24,191,174 - 548,382 106,181 1,134,866 - 304,320 3,564,901 (609,966) (382,626) (303,376) - (83,976) -
		(650,067) (613,090)

During the current year, the Group entered into the following non-cash investing and financing activities which are not reflected in the consolidated statement of cash flows:

Share based payments were made in respect of borrowing expenses, consulting fees and employee termination entitlements of $2,685,300 (Refer Note 18).

NOTE 9: TRADE AND OTHER RECEIVABLES

GST recoverable Other receivables Advanced financing costs Prepaid expenses Total trade and other receivables	Consolidated Consolidated 2016 $ 2015 $
	20,953 12,745 17,486 909 - 291,176 13,073 51,003
	51,512 355,833

Advanced financing cost

In the previous year on 2 June 2015, the Company entered into an agreement with Energy Capital Partners Pty Ltd (“‘ECP”) to facilitate the recapitalisation of the Company subject to shareholders’ approval on 31 July 2015, refer Note 13. Under the terms of this agreement ECP was entitled to 15% of the convertible note funds and 6% to third party AFSL holders introduced by ECP. In addition, ECP received 20,000,000 shares with an ultimate assessed value of $0.008 each on completion of the Financing.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 9: TRADE AND OTHER RECEIVABLES (CONTINUED)

There are no related party receivables.

Ageing receivables Ageing of past due but not impaired 30 – 60 days 60 – 90 days 90 – 120 days 120 and over	Consolidated Consolidated 2016 $ 2015 $
	51,512 355,833 - - - - - -
	51,512 355,833

In determining the recoverability of receivables, the Group considers any changes in the credit quality of the receivables from the date credit were initially granted up to the balance date. The Directors believe that there is no provision required for impairment.

NOTE 10: PLANT AND EQUIPMENT

NOTE 10: PLANT AND EQUIPMENT
Opening balance, net of accumulated depreciation and impairment Disposals Depreciation charge for the year Loss on disposal Closing balance, net of accumulated depreciation and impairment Cost or fair value Accumulated depreciation and impairment Net carrying amount	Consolidated Consolidated 2016 $ 2015 $
	146,426 189,203 (90) (2,019) (14,015) (40,458) (132,321) -
	- 146,426
	- 365,524 - (219,098)
	- 146,426

During the year, all plant and equipment was disposed of.

NOTE 11: DEFERRED EXPLORATION EXPENDITURE

Costs carried forward in respect of: Exploration and evaluation phase – at cost Balance at beginning of year Expenditure incurred Impairment and explorations costs written off Foreign currency exchange differences Balance at end of financial year	Consolidated Consolidated 2016 $ 2015 $
	27,757,099 23,057,576 3,155 1,673,819 (27,760,254) (23,110) - 3,048,814
	- 27,757,099

Ultimate recoupment of this expenditure is dependent upon the Group’s right to tenure of the area of interest and the discovery of commercially viable oil and gas reserves, their successful development and exploitation, or alternatively, the sale of the respective areas of interest at an amount at least equal to book value.

The carrying value of all deferred exploration expenditure was written off in full during the year (2015 impairment expense: $23,110). The Company has maintained title over VIC/P67 as detailed overleaf.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 11: DEFERRED EXPLORATION EXPENDITURE (CONTINUED)

Interest in petroleum	tenements
Tenure description	Location	Operator	Expiry date	2016	2015
				Interest	Interest
				%	%
VIC/P67	VIC Australia	WHL Energy Limited	04/05/2018	100	100

Seychelles

As announced on 14 January 2016, Ophir Seychelles (Areas 1, 2, and 3) Limited has elected to execute its exit option under the farm-out agreement and the Deed of Novation, Amendment and Restatement Agreements between the Government of the Republic of the Seychelles and various parties including WHL. Under the terms of the Petroleum Agreement, the blocks have reverted back to the Seychelles government.

The capitalised exploration costs have been written off as discontinued operations (Note 6).

NOTE 12: TRADE AND OTHER PAYABLES

NOTE 12: TRADE AND OTHER PAYABLES
Trade and other payables	Consolidated Consolidated 2016 $ 2015 $
	293,636 1,084,602

Trade payables are non-interest bearing and are normally settled on 30-day terms. For terms and conditions relating to related party payables, refer Note 24.

Information regarding the interest rate, foreign exchange and liquidity risk exposure is set out in Note 19.

NOTE 13: BORROWINGS

On 2 June 2015, the Company entered into an agreement with Energy Capital Partners Pty Ltd to facilitate the recapitalisation of the Company subject to shareholders’ approval given on 31 July 2015.

The recapitalisation proposal involved facilitation of subscriptions for convertible notes to raise a total of $2,000,000. The Convertible Notes matured on 31 July 2015 and interest was payable at a rate of 10% per annum, accruing on a daily basis and compounding monthly, payable in full by cash on the Maturity Date.

In addition to the first ranking charge associated with the extinguished loan, the Convertible Notes were secured by a second ranking charge over all of the Company’s present and subsequently acquired property under the terms of a general security deed entered into by the Company and ECP as trustee for the Convertible Note holders. The ECP charge was extinguished when the Convertible Notes were converted into Shares.

Secured Borrowings

Secured Borrowings
Financing Facility Convertible Note Secured borrowings	Consolidated Consolidated 2016 $ 2015 $
	- - - 2,009,367
	- 2,009,367

The recapitalisation proposal involved facilitation of subscriptions for convertible notes to raise a total of $2,000,000. Interest on each Convertible Note was payable at a rate of 10% per annum, accruing on a daily basis and compounding monthly, payable in full by cash on the Maturity Date. The Convertible Notes matured and were converted on 31 July 2015.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 13: BORROWINGS (CONTINUED)

Facility Facility used at balance date Facility unused at balance date Total Facility	Consolidated Consolidated 2016 $ 2015 $
	- 2,000,000 - -
	- 2,000,000

Assets pledged as security Non-Current Deferred exploration expenditure Total non-current assets Total assets pledged as security	Consolidated Consolidated 2016 $ 2015 $
	- 27,903,525
	- 27,903,525

	- 27,903,525

Fair value of the Group’s borrowings is set out in Note 19.

NOTE 14: PROVISIONS

Employee benefits Balance at beginning of year Arising during the year Utilised Balance at end of financial year	Consolidated Consolidated 2016 2015 $ $
	83,976 97,805 - 96,090 (83,976) (109,919)
	- 83,976

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 15: ISSUED CAPITAL

Ordinary shares issued and fully paid	Consolidated Consolidated 2016 2016 2015 2015 No. $ No. $
	5,564,983,246 67,907,710 171,469,094 63,178,063

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

Movement in ordinary shares on issue

ovement in ordinary shares on issue
Balance at beginning of financial year Issue of shares: Options exercised on 1 July Performance rights exercised on 1 July Equity issues pursuant to Controlled Placement Facility Equity issued pursuant to Rights Issue Options exercised Consolidation of shares 26 November 2014 Equity issued pursuant to a financing facility arrangement post consolidation Options exercised Conversion of convertible note Equity issued for services on financing arrangement Share based payments Rights Issue Allotment and shortfall allotment Share issue costs Balance at end of financial year	2016 2016 2015 2015 No. $ No. $
	171,469,094 63,178,063 1,596,836,414 62,118,536 - - 6,800,000 240,000 - - 13,600,000 227,200 - - 7,011,970 100,000 - - 54,582,148 448,619 - - 2,750 110 - - (1,510,950,349) - - - 3,586,161 106,181 4,964 10 - - 2,000,000,000 2,000,000 - - 20,000,000 160,000 - - 921,660,000 2,525,300 - - 2,451,848,858 2,511,246 - - - (2,466,909) - (62,583)
	5,564,983,246 67,907,710 171,469,094 63,178,063

NOTE 16: RESERVES

Nature and purpose of reserves:

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It was also used to record the effect of hedging net investments in foreign operations.

Equity based payments reserve

This reserve is used to record the value of equity benefits provided to:

employees and directors as part of their remuneration, refer to Note 18;
as part of the consideration to acquire controlled subsidiaries; and
as part consideration for services.

Option reserve

The option reserve is used to record options issued and exercisable on a 1:1 basis for ordinary shares of the Company. The option reserve can be transferred to equity on exercise of options. Refer to Note 16 for details of the movement in the listed options during the year.

Share options granted under the Company’s employee share option plan

The Company has an ESOP under which options to subscribe for the Company’s shares have been granted to certain executives and other employees. All options previously granted were either exercised, lapsed or voluntarily forfeited during the year ended 30 June 2015. There were no options under ESOP, over ordinary shares of the Company at 30 June 2016.

Share options granted under the Company’s ESOP carry no right to dividends and no voting rights. Further details of the ESOP are provided in Note 18.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 16: RESERVES (CONTINUED)

Performance rights on issue

During the year ended 30 June 2015, all existing performance rights were either exercised, lapsed or were voluntarily forfeited. There were no performance rights over ordinary shares of the Company during the year ended and as at 30 June 2016.

Listed options on issue

Exercisable at $0.18 by 30.11.2016 Exercisable at $0.002 by 30.6.2018 Total listed options	Consolidated Consolidated 2016 2016 2015 2015 No. $ No. $
	3,638,715 97,203 3,638,715 97,203
	608,361,121 608,366 - -
	611,999,836 705,569 3,638,715 97,203

Unlisted options on issue

Unlisted options on issue
Consolidated Consolidated 2016 2016 2015 2015 No. $ No. $ Exercisable at $0.014 by 3.12.2017 19,300,000 - 19,300,000 - Exercisable at $0.004 by 31.7.2018 350,000,000 1,209,702 - - Total unlisted options 369,300,000 1,209,702 19,300,000 - Total options issued 372,938,715 1,915,271 22,938,715 97,203 Movement in listed options during the year	Consolidated Consolidated 2016 2016 2015 2015 No. $ No. $
	19,300,000 - 19,300,000 - 350,000,000 1,209,702 - -
	369,300,000 1,209,702 19,300,000 -

	372,938,715 1,915,271 22,938,715 97,203
Balance at beginning of financial year Issue of options Options exercised Options lapsed Consolidation of options 26 November 2014 Balance at end of financial year	2016 2016 2015 2015 No. $ No. $
	3,638,715 97,203 401,734,157 3,326,386 608,361,121 608,366 36,388,023 97,203 - - (2,750) - - - (401,731,407) (3,326,386) - - (32,749,308) -
	611,999,836 705,569 3,638,715 97,203

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 16: RESERVES (CONTINUED)

Movement inunlisted options during the	year	year
2016 No. 2016 $ 2015 No. 2015 $ Outstanding at the beginning of the year 19,300,000 - 203,200,000 - Exercised 1 July 2014 - - (6,800,000) - Consolidation 26 November 2014 - - (176,760,000) - Granted during the year 350,000,000 1,209,702 - - Forfeited/ lapsed during the year - - (340,000) - Expired during the year - - - - Balance at the end of the financial year 369,300,000 1,209,702 19,300,000 - Exercisable at the end of the year 369,300,000 19,300,000 The weighted average remaining contractual life for the share options outstanding at 30 June 2016 is 748 days (2015 887 days). The exercise price for options outstanding at the end of the year ranges between $0.002 and $0.18 (2015 $0.14). NOTE 17: ACCUMULATED LOSSES Movements in accumulated losses were as follows:	2016 No. 2016 $		2015 No. 2015 $
	19,300,000 - - - - - 350,000,000 1,209,702 - - - -		203,200,000 - (6,800,000) - (176,760,000) - - - (340,000) - - -
	369,300,000 1,209,702		19,300,000 -
Balance at beginning of financial year Net loss for the year Transfer of lapsed options from option reserve Balance at end of financial year		Consolidated Consolidated 2016 2015 $ $
		42,656,068 42,938,030 30,472,257 3,181,018 - (3,462,980)
		73,128,325 42,656,068

The weighted average remaining contractual life for the share options outstanding at 30 June 2016 is 748 days (2015: 887 days). The exercise price for options outstanding at the end of the year ranges between $0.002 and $0.18 (2015: $0.14).

NOTE 18: EQUITY BASED PAYMENTS

Employee share option plan

The Group believes that the way to encourage employees is to align their interests with those of shareholders. There is currently an ESOP approved by shareholders, which provides benefits to directors, senior executives and employees. At 30 June 2016 no incentives were under issue of the ESOP.

The following incentives are provided for under the ESOP. Each share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither right to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

Retention Incentive

As part of the policy to retain staff, other than directors and senior executives, options are available to be issued under the ESOP. Vesting of the options issued to employees will occur in accordance with milestones prescribed with the various options issued.

Performance Incentive

As part of the policy to retain executive directors and senior executives, options are available to be issued under the ESOP. Vesting of any options issued to executive directors and senior executives will occur in accordance with the milestones prescribed with the options issued.

During the year no options were granted under the WHL Energy Limited ESOP plan.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 18: EQUITY BASED PAYMENTS (CONTINUED)

Equity based payments for services

Options

During the year, 350,000,000 options were issued to ECP following shareholder approval as part of the fees for the recapitalisation at a deemed issue price of $Nil. (Refer Note 13)

No options were issued as equity based payments in 2015.

During the year the following shares was issued pursuant to the recapitalisation proposal (Refer Note 13):

On 2 July 2015, 20,000,000 ordinary shares at a deemed issue price of $0.008 per share as part of the fees paid to ECP;
On 31 July 2015 following shareholder approval, 170,000,000 ordinary shares issued to Robert Richter at a deemed issue price of $0.007;
On 31 July 2015 following shareholder approval, 17,160,000 ordinary shares issued to Churchill Services for services provided in respect of company secretarial fees at a deemed issue price of $0.005 per share;
On 31 July 2015 following shareholder approval, 20,000,000 ordinary shares issued to PAC Partners Pty Ltd for services provided in respect of corporate advisory and management fees at a deemed issue price of $0.005 per share; and
On 31 July 2015 following shareholder approval, 15,000,000 ordinary shares issued to Mr Fittall as part settlement of his deed of separation; and
On 19 November 2015, 680,000,000 ordinary shares were issued in respect of a placement fee as a deemed issue price of $0.001.
On 29 June 2016, 19,500,000 ordinary shares were issued as part consideration for final fees payable to Quattro Capital.

Fair value of shares granted during the year

The fair value of the shares granted as equity based payments was determined by the listed market price at the measurement date. No dividends or other features were incorporated into the fair value measurement.

NOTE 19: FINANCIAL INSTRUMENTS

Capital risk management

The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or sell assets.

The Group’s overall strategy remains unchanged from 2015.

None of the Group’s entities are subject to externally imposed capital requirements.

Categories of financial instruments

Financial assets Loans and receivables Cash and cash equivalents Financial liabilities Trade and other payables	Consolidated Consolidated 2016 $ 2015 $
	38,439 12,745 2,104,361 1,230,069 293,636 3,397,345

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 19: FINANCIAL INSTRUMENTS (CONTINUED)

Financial risk management objectives

The Group is exposed to market risk (including currency risk and fair value interest rate risk), credit risk, liquidity risk and cash flow interest rate risk.

Exposure limits are reviewed by management on a continuous basis. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Market risk

The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and fair value interest rate risk.

There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk from the previous period.

Foreign currency risk management

The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts where applicable.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the balance date in Australian dollars are as follows:

balance date in Australian dollars are as	follows:
US dollars GBP	Liabilities Liabilities Assets Assets 2016 $ 2015 $ 2016 $ 2015 $
	145,482 515,246 71,937 53,636 - 23,154 - -

The Group is exposed to US Dollar (USD currency fluctuations).

The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian dollar against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where the denomination of the loan is in a currency other than the currency of the lender or the borrower. A positive number indicates an increase in profit or loss and other equity where the Australian Dollar strengthens against the respective currency. For a weakening of the Australian Dollar against the respective currency there would be an equal and opposite impact on the profit and other equity and the balances below would be negative.

Profit or loss Otherequity	USD USD GBP GBP Consolidated Consolidated Consolidated Consolidated 2016 $ 2015 $ 2016 $ 2015 $
	9,036 (35,482) - (2,105) (9,036) 35,482 - 2,105

Forward foreign exchange contracts

It is the policy of the Group to enter into forward foreign exchange contracts to only cover specific foreign currency payments. During the current year no forward exchange contracts were entered into and there were no forward foreign currency contracts outstanding as at balance date.

At balance date, the aggregate amount of unrealised losses under forward foreign exchange contracts charged to the statement of comprehensive income is the exposure on these anticipated future transactions, which is $Nil (2015: $Nil).

Interest rate risk management

The Group is subject to interest rate exposure through its cash and cash equivalents. The Group’s convertible note borrowing was converted to equity during the year. Consequently, the Group is not exposed to interest rate risk on borrowings.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 19: FINANCIAL INSTRUMENTS (CONTINUED)

Interest rate risk sensitivity analysis

The sensitivity analysis below has been determined based on the exposure to interest rates at the balance date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the possible change in interest rates.

At balance date, if interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group’s profit or loss will be impacted as follows:

the Group’s profit or loss will be impacted as follows:
Profit or Loss Equity	Consolidated Consolidated 2016 $ 2015 $
	10,159 731 10,159 731

The Group’s exposure to interest rate risk is minimal and is only attributable to exposure to interest rates on its variable rate deposits.

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is reviewed and approved by managers on a continuous basis.

The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses, represents the Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 19: FINANCIAL INSTRUMENTS (CONTINUED)

The following table details the Group’s expected maturity for its non-derivative financial liabilities. These have been drawn up based on undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Group anticipates that the cash flow will occur in a different period.

30 June 2016 Financial assets Non-interest bearing Variable interest rate instruments Fixed interest rate instruments Financial Liabilities Non-interest bearing Fixed interest rate instruments 30 June 2015 Financial assets Non-interest bearing Variable interest rate instruments Fixed interest rate instruments Financial Liabilities Non-interest bearing Fixed interest rate instruments	Weighted average effective interest rate %	Less than 1 month 1 – 3 months 3 months – 1 year 1-5 years Total $ $ $ $ $
	1.031 - 1.08 2.77 9.08	72,520 - - - 72,520 2,031,841 - - - 2,031,841 - - - - -
		2,104,361 - - - 2,104,361
		293,636 - - - 293,636 - - - - -
		293,636 - - - 292,636
		67,089 - - - 67,089 1,063,305 - - - 1,063,305 112,420 - - - 112,420
		1,242,814 - - - 1,242,814
		1,084,602 - - - 1,084,602 2,312,743 - - - 2,312,743
		3,397,345 - - - 3,397,345

NOTE 20: COMMITMENTS AND CONTINGENCIES

Work programme commitments

The Group has obligations to carry out certain work programme commitments on exploration in tenement areas. The work programmes are not defined in terms of annual commitments but in terms of periods which include more than one financial year. These obligations may be varied from time to time and are expected to be fulfilled in the normal course of operation of the Group. Expenditures are contingent upon successful raising of the required capital and/or farm-in partner arrangements and failure to make these expenditures may result in the forfeiture of the associated project rights or a reduction in working interest revenue until a multiple of capital costs are earned.

Commitments contracted for at balance date but not recognised as liabilities are as follows:

Within one year After one year but not more than five years Total work programme commitments	Consolidated Consolidated 2016 $ 2015 $
	54,300,000 1,070,538 26,000,000 53,947,545
	80,300,000 55,018,083

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 20: COMMITMENTS AND CONTINGENCIES (CONTINUED)

The capital commitment is based on the Group’s current equity interests. Included in the expenditure after one year but more than five is $26,000,000 which becomes guaranteed on the commencement of the fourth year permit on a year by year basis.

Capital expenditure commitments

The Company has no capital expenditure commitments at 30 June 2016 (2015: Nil)

Other expenditure commitments

The Group does not have any operating leases as at 30 June 2016.

Commitments contracted for at the balance date but not recognised as liabilities are as follows:

Within one year After one year but not more than five years Longer than five years Total other expenditure commitments	Consolidated Consolidated 2016 $ 2015 $
	- 274,653 - 29,749 - -
	- 304,402

Operating lease arrangements included in other expenditure commitments Payments recognised as an expense

Consolidated Consolidated 2016 $ 2015 $ Minimum lease payments - 269,854 Total operating lease payments - 269,854 Non-cancellable operating lease commitments included in other expenditure commitments	Consolidated Consolidated 2016 $ 2015 $
	- 269,854
	- 269,854
Within one year After one year but not more than five years Longer than five years Total operating lease commitments	Consolidated Consolidated 2016 $ 2015 $
	- 263,215 - 29,749 - -
	- 292,964

Securities granted over assets

Consequential to the conversion of the Convertible Note during the year, the Company has no encumbered assets.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 21: PARENT ENTITY DISCLOSURE

Financial position Assets Current assets Non-current assets Total assets Liabilities Current liabilities Total liabilities Net Assets Equity Issued capital Option reserves Equity based payment reserve Retained earnings Total equity	2016 $ 2015 $
	2,155,692 1,585,602 - 25,829,995
	2,155,692 27,415,597
	148,155 2,966,075
	148,155 2,966,075
	2,007,537 24,449,522
	67,888,210 63,178,063 1,915,271 97,203 1,438,483 1,438,483 (69,234,427) (40,264,227)
	2,007,537 24,449,522

Financial performance Loss for the year Other comprehensive income Total comprehensive income	2016 $ 2015 $
	(28,989,700) (1,759,879) - -
	(28,989,700) (1,759,879)

NOTE 22: AUDITOR’S REMUNERATION

The auditor of WHL Energy Limited is HLB Mann Judd.

The auditor of WHL Energy Limited is HLB Mann Judd.
	Consolidated	Consolidated
	2016	2015
	$	$
Amounts received or due and receivable by HLB Mann Judd for:
An audit or review of the financial report of the entity and any other entity in
the Group	78,500	49,000
Tax compliance	18,000	16,805
	96,500	65,805

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 23: DIRECTORS AND SENIOR EXECUTIVES DISCLOSURES

Details of key management personnel

Directors

Mr Gary Castledine Non-Executive Chairman – Appointed 5 February 2016 Mr Neville Bassett Non-Executive Director – Appointed 5 February 2016 Mr Stuart Brown Non-Executive Director – Appointed 6 December 2013

Mr Doug Jendry Mr Graham Durtanovich Mr Faldi Ismail

Non-Executive Chairman – Appointed 2 June 2015, Resigned 17 November 2015 Non-Executive Director – Appointed 17 November 2015, Resigned 5 February 2016 Non-Executive Director – Appointed 2 June 2015, Resigned 5 February 2016 Non-Executive Director – Appointed 24 September 2013

Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report.

The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.

Information regarding the individual directors’ and executives’ compensation is provided in the Remuneration Report as set out on page 11.

The aggregate compensation made to key management personnel of the Group is set out below:

	Consolidated Consolidated 2016 $ 2015 $
Short-term employee benefits Post-employee benefits Total	233,222 1,025,939 - 49,115
	233,222 1,075,054

The short term employee benefits include termination payments of $109,905 (2015: $214,462).

NOTE 24: RELATED PARTY TRANSACTIONS

Controlled entities

WHL Energy Limited is a public company, which was incorporated in Australia on 10 March 2005 and listed on the ASX on 10 September 2007.

The consolidated financial statements include the financial statements of WHL Energy Limited and its subsidiaries as outlined in Note 25.

WHL Energy Limited is the ultimate Australian parent entity and ultimate parent of the Group.

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

WHL ENERGY LIMITED

and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 24: RELATED PARTY TRANSACTIONS (CONTINUED)

Key management personnel

The following table provides the total amount of transactions that were entered into with key management personnel for the relevant financial year.

Transactions with related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Key management personnel		Fees to related	Amounts		Amounts	Amounts
		parties	owed by		owed to	owed to
			related		KMP	related parties
			parties
		$	$		$	$
Mr GaryCastledine	2016	17,500		-	-	3,850
Mr Neville Bassett	2016	17,500		-	-	3,850
Mr Faldi Ismail	2016	42,000		-	-	-
Mr Stuart Brown	2016	14,000		-	-	-
	2015	9,500		-	-	-
Mr DougJendry	2016	7,817		-	-	-
Mr Graham Durtanovich	2016	24,500		-	2,736	-
Mr David Rowbottam	2016	-		-	-	-
	2015	-		-	101,963	-
Mr Matt Fittall	2016	-		-	-	-
	2015	-		-	112,500	-

Other than ongoing director remuneration, there were no other transactions with KMP during the year ended 30 June 2016.

At balance date the amounts owing to KMP constituted accrued but unpaid director fees. Amounts owing at 30 June 2015 related to part of the deeds of settlements entered into on 31 May 2015.

NOTE 25: SUBSIDIARIES

Name	Country of	Equity Interest and	Equity Interest and
	Incorporation	voting power held by	voting power held by
		the Company	the Company
		2016	2015
		%	%
PetroQuest International Seychelles	Seychelles	100	100
Limited
PetroQuest International	USA	100	100
Incorporated
Indian Ocean Petroleum Holdings	Australia	100	100
Pty Limited (formerly Seyco Energy
Proprietary Limited)

Composition of the group

Information about the composition of the Group at the end of the reporting period is as follows:

Principal Activity	Country of	Country of	Number of wholly	Number of wholly
	Incorporation	operation	owned subsidiaries	owned subsidiaries
			2016	2015
Exploration	Australia	Australia	1	1

WHL ENERGY LIMITED and its controlled entities

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016

NOTE 26: EVENTS AFTER THE BALANCE DATE

On 12 September 2016, the Company announced that it had signed a merger implementation agreement (“MIA”) with Quantify Technology Limited (“Quantify”) with a view to making separate off market takeover offers to acquire all of Quantify’s fully paid, ordinary shares (Share Offer) and main class of options (Option Offer) and to acquire all other Quantify securities by private agreement (“Transaction”).

The Share Offer will be subject to typical conditions precedent, including:

WHL Energy shareholders approve the resolutions necessary to give effect to the Transaction, including a change in nature and scale of activities for the purposes of ASX Listing Rule 11.1.3, a consolidation of WHL Energy’s securities on a 1:83 basis (Consolidation) and a change in name to Quantify Technology Holdings Limited;
a 90% minimum acceptance condition, which (at any time prior to WHL Energy receiving acceptances representing 80% of Quantify Shares) can only be waived with the consent of Quantify;
at least $3.5 million (with a maximum of $5 million) being raised through the issue of WHL Energy Shares at an issue price of $0.06 per WHL Energy Share (on a post Consolidation basis) under a prospectus (Capital Raising);
ASX granting conditional approval for WHL Energy to be re-admitted to quotation on the ASX following completion of the Transaction;
no prescribed occurrence or material adverse change (as defined in the MIA) occurring in relation to Quantify;
no material acquisitions, disposals or new commitments being undertaken by Quantify;
WHL Energy becomes entitled to acquire all other Quantify securities on issue; and
other customary conditions as set out in the MIA, including no regulatory intervention which (among other things) restrains or prohibits the Share Offer.

1.0189 WHL Energy Shares (on a post-Share Consolidation basis) for each Quantify Ordinary Share held; and
0.4891 WHL Energy Performance Shares (on a post-Share Consolidation basis) for each Quantify Ordinary Share held. The WHL Energy Performance Shares vest and are convertible into WHL Energy Shares based on achievement of milestones as set out in Part A of Schedule 4 of the MIA.

Other than as set out above, there has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial periods.

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ DECLARATION

In the opinion of the directors of WHL Energy Limited (“the Company”):
a. the accompanying financial statements, notes and the additional disclosures are in accordance with the Corporations Act 2001 including:
- i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2016 and of its performance for the year then ended; and
- ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to the directors in accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2016.

This declaration is signed in accordance with a resolution of the Board of Directors.

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Gary Castledine

Non-Executive Chairman Perth, 30 September 2016

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INDEPENDENT AUDITOR’S REPORT

To the members of WHL Energy Limited

Report on the Financial Report

We have audited the accompanying financial report of WHL Energy Limited (“the company”), which comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the Group. The Group comprises the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility for the financial report

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

In Note 1(c), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements that the financial report complies with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

Our audit did not involve an analysis of the prudence of business decisions made by directors or

management.

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

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

HLB Mann Judd (WA Partnership) ABN 22 193 232 714 Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533. Email: [email protected]. Website: http://www.hlb.com.au Liability limited by a scheme approved under Professional Standards Legislation

HLB Mann Judd (WA Partnership) is a member of International, a worldwide organisation of accounting firms and business advisers.

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Auditor’s opinion

In our opinion:

(a) the financial report of WHL Energy Limited is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2016 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(c).

Report on the Remuneration Report

We have audited the remuneration report included in the directors’ report for the year ended 30 June 2016. The directors of the company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion

In our opinion the remuneration report of WHL Energy Limited for the year ended 30 June 2016 complies with section 300A of the Corporations Act 2001 .

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HLB Mann Judd Chartered Accountants

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M R W Ohm Partner

Perth, Western Australia 30 September 2016

WHL ENERGY LIMITED

and its controlled entities

CORPORATE GOVERNANCE

This statement is provided in compliance with the ASX Corporate Governance Council’s (the Council ) Corporate Governance Principles and Recommendations Third Edition (“ Principles and Recommendations ”).

The Company has resolved that for so long as it is admitted to the official lists of the ASX, it shall abide by the Principles and Recommendations, subject however to instances where the Board of Directors that a Council recommendation is not appropriate to its particular circumstances.

The Board encourages all key management personnel, other employees, contractors and other stakeholders to monitor compliance with this Corporate Governance manual and periodically, by liaising with the Board, management and staff, especially in relation to observable departures from the intent of these policies and with any ideas or suggestions for improvement. Suggestions for improvements or amendments can be made at any time by providing a written note to the chairman.

Website Disclosures

In order to streamline the content of this Annual Report and pursuant to the disclosure options mandated by the Council, the Company has elected to publish its Corporate Governance Statement in compliance with ASX Listing Rule 4.10.3 on its website at www.whnenergy.com.au under the “ Corporate Governance ” tab.

WHL ENERGY LIMITED

and its controlled entities

ASX ADDITIONAL INFORMATION

Additional information required by the ASX Limited Listing Rules not disclosed elsewhere in this Annual Report is set out below. The information is current as at 12 September 2016.

a) Twenty largest shareholders

(i) The names of the twenty largest holders of ordinary shares are:

ZERO NOMINEES PTY LTD GREYWOOD HOLDINGS PTY LTD JETMAX TRADING PTY LTD ZERRIN INVESTMENTS PTY LTD PETERLYN PTY LTD WESTVIEW INVVESTMENTS PTY LTD AH SUPER PTY LTD JETMAX ASSETS PTY LTD RICHSHAM NPMINEES PTY LTD ALLTIME NOMINEES PTY LTD CHELSEA INVESTMENTS (WA) PTY LTD MR RODNEY WELLSTEAD MR ASHLEY POLWART SCINTILLA STRATEGIC INVESTMENTS PTY LTD BONSTAN INVESTMENTS PTY LTD LAPJ NOMINEES PTY LTD MOLTONI SUPER PTY LTD MR KEITH BOWKER & MRS NYSSA BOWKER KOBIA HOLDINGS PTY LTD PULNER PTY LTD TOTAL Balance of Register Total Issued Capital	Number of shares % of ordinary shares 200,000,000 3.59 153,000,000 2.75 148,260,650 2.66 140,000,000 2.52 120,000,000 2.16 115,000,000 2.07 100,000,000 1.80 100,000,000 1.80 100,000,000 1.80 100,000,000 1.80 100,000,000 1.80 64,925,000 1.17 64,478,740 1.16 64,000,000 1.15 60,000,000 1.08 56,000,000 1.01 56,000,000 1.01 50,000,000 0.90 50,000,000 0.90 50,000,000 0.90
	1,891,664,390 34.03
	3,673,318,856 65.97
	5,564,983,246 100.00

WHL ENERGY LIMITED and its controlled entities

ASX ADDITIONAL INFORMATION

(ii) The names of the twenty largest holders of WHNO Listed Options ($0.18, 30/11/2016) are:

MR MARC-KENSON BROWN MR ANTHONY PLOSE MR JAN MARACH & MRS RENATA MARACH MR DO SHIK HONG & MRS CHUN SOOK HONG MR CARL DILENA HEADLAND CAPITAL PTY LIMITED NETWEALTH INVESTMENTS LIMITED MR DAVID PAUL ROWBOTTAM MR SIMON JOHN BOWN THOMPSON HORTICULTURAL SERVICES PTY LTD ALAN MATTHEW FITTALL & CARRIEJUNE FITTALL MR FRANK JAMES DEIGHTON & MRS CAROL DEIGHTON MR RICHARD KAIRUZ & MRS WADAD KAIRUZ SAUNDERS SUPER PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED MR LINLEY TEDDY NGAN KIT MISS KIMBERLEE MARI LIM & TAN SECURITIES PTE LTD (LIM & TAN CLIENT A/C) LIM & TAN SECURITIES PTE LTD (LIM & TAN SEC-NON CLIENTS A/C) YENISLEY HOLDINGS PTY LTD TOTAL Balance of Register Total WHNO	Number of options % of options 229,750 6.31 186,108 5.11 133,333 3.66 132,500 3.64 120,000 3.30 100,000 2.75 78,666 2.16 66,666 1.83 66,666 1.83 60,000 1.65 56,688 1.56 51,472 1.41 47,685 1.31 43,030 1.18 43,000 1.18 42,000 1.15 40,000 1.10 40,000 1.10 40,000 1.10 40,000 1.10
	1,617,564 44.43
	2,021,151 55.57
	3,638,715 100.00

(iii) The names of the twenty largest holders of WHNOA Listed Options ($0.002, 30/06/2018) are:

SUBURBAN HOLDINGS PTY LTD ZERO NOMINEES PTY LTD AH SUPER PTY LTD PETERLYN PTY LTD GREYWOOD HOLDINGS PTY LTD CHELSEA INVESTMENTS (WA) PTY LTD GOLDFIRE ENTERPRISES PTY LTD ZERRIN INVETSMENTS PTY LTD DALEXT PTY LTD NINGBO INWIT PTY LTD MR IAN PARKER & MRS CATRIONA PARKER TERMCO PTY LTD GUINA NOMINEES PTY LTD MR BRIAN BYASS CORNWALL DEVELOPMENT COPRORATION PTY LTD DRAGON GAS LIMITED MRS MICHELLE QUINSEE HAWKSCREST PTY LTD TT NICHOLS PTY LTD CUBED PROFESSIONAL NOMINEES PTY LTD TOTAL Balance of Register Total WHNOA	Number of options % of options 35,000,000 5.75 25,000,000 4.11 25,000,000 4.11 23,750,000 3.90 23,600,000 3.88 22,500,000 3.70 20,000,000 3.29 20,000,000 3.29 12,500,000 2.05 12,500,000 2.05 12,500,000 2.05 12,500,000 2.05 12,000,000 1.97 12,000,000 1.97 10,000,000 1.64 10,000,000 1.64 10,000,000 1.64 10,000,000 1.64 10,000,000 1.64 10,000,000 1.64
	328,850,000 54.01
	279,511,121 45.99
	608,361,121 100.00

WHL ENERGY LIMITED and its controlled entities

ASX ADDITIONAL INFORMATION

b) Distribution of equity securities

(i) Listed securities

As at 19 September 2016 there were 3,973 holders of ordinary voting shares, 494 WHNO option holders and 549 WHNOA option holders, distributed as follows:

	Ordinary	voting shares	WHNO	Options	WHNOA Options	WHNOA Options
	Number of	Number of	Number	Number of	Number	Number of
	holders	ordinary	of	options	of	options
		shares	holders		holders
1 to	96	64,984	146	81,372	88	46,589
1,000
1,001 to	688	2,256,237	223	557,950	189	507,517
5,000
5,001 to	815	6,784,658	57	431,044	68	497,853
10,000
10,001 to	1,504	48,058,388	63	1,766,658	77	2,246,725
100,000
100,001	869	5,507,818,979	5	801,691	127	605,062,437
and over
Total	3,972	5,564,983,246	494	3,638,715	549	608,361,121
Holdings	3,333	103,707,149	494	3,638,715	549	608,361,121
less than a
marketable
parcel

(ii) Unlisted securities

Unlisted Options

As at 19 September 2016 there were 18 holders of the WHNOPT1 unlisted options ($0.14, 03/12/2017) and 53 holders of the WHNOPT2 unlisted options ($0.004, 31/07/2018), distributed as follows:

f the WHNOPT2 unlisted options ($0.004, 31/07/2018), distributed as	follows:
Unlisted Options WHNOPT1 Number of holders Number of options	Unlisted Options WHNOPT2 Number of holders Number of options
1 to 1,000 - - 1,001 to 5,000 - - 5,001 to 10,000 3 28,300 10,001 to 100,000 5 188,000 100,001 and over 10 19,083,700 Total 18 19,300,000 Name of holders of greater than 20%	- - - - - - - - 53 350,000,000
	53 350,000,000
	% Held Number of options held
Name of holder of greater than 20% of WHNOPT1 Bergen Global Opportunity Fund V LLC Name of holder of greater than 20% of WHNOPT2 Energy Capital Partners Pty Ltd	50.78% 9,800,000 33.36% 116,750,000

WHL ENERGY LIMITED

and its controlled entities

ASX ADDITIONAL INFORMATION

c) There are no substantial shareholders of ordinary shares.

Class of shares and voting rights

The voting rights attached to ordinary shares, as set out in the Company’s Constitution, are that every member in person or by proxy, attorney or representative, shall have one vote on a show of hands and one vote for each share held on a poll.

A member holding partly paid shares is entitled to a fraction of a vote equivalent to the proportion which the amount paid up bears to the issue price for the share.

No other class of equity security carries any voting rights.

d) Home exchange

The Company is listed on the Australian Securities Exchange. The Home Exchange is Perth. The Company’s securities are not quoted on any other stock exchange.

e) Buy back

Nil.

f) Restricted securities

There were no securities restricted by the ASX at the date of this report or the year ended 30 June 2016.

WHL ENERGY LIMITED and its controlled entities

ASX ADDITIONAL INFORMATION

Interest in mining tenements Australian oil and gas interests

VIC/P67 - 100%

Hamilton (SJ54) Map Sheet

Block Number	Block Number	Block Number	Block Number	Block Number
2137 (part)	2138 (part)	2139 (part)	2209	2210
2211	2212	2281	2282	2283
2353	2354	2355	2356	2358
2425	2426	2427	2428	2429
2430	2497	2498	2499	2500
2501	5202	2571	2572	2573
2574	2575	2576	2577	2645
2646	2647	2648	2649	2718
2719	2720	2721	2791 (part)	2792 (part)
2793 (part)

AI assistant

ZIMI LIMITED — Annual Report 2016

66122_rns_2016-10-02_fd052294-80c5-4907-ade4-bde9bf838baf.pdf

WHL Energy Limited

ANNUAL REPORT

CONTENTS

CORPORATE INFORMATION

ABN: 25 113 326 524

Directors:

Company Secretary:

Registered office:

Principal place of business:

Postal Address:

Share registry:

Solicitors:

Bankers:

Auditors:

Securities Exchange Listing:

DIRECTORS’ REPORT

Directors

Mr Gary Castledine

Non-Executive Chairman (Appointed 5 February 2016)

Experience and expertise

Other current directorships:

Former directorships in last 3 years:

Interests in WHL Energy Limited:

Mr Neville Bassett AM B.Bus FCA

Non-Executive Independent Director (Appointed 5 February 2016)

Experience and expertise

Other current directorships:

Former directorships in last 3 years:

Interests in WHL Energy Limited:

DIRECTORS’ REPORT

Mr Faldi Ismail, B.Bus

Non-Executive Independent Director

Experience and expertise

Other current directorships:

Former directorships in last 3 years:

Interests in WHL Energy Limited:

Company Secretary

Mr Neville Bassett (Appointed 12 May 2016)

Directors’ interests in the shares options and performance rights of the Company and related bodies

corporate

Ordinary shares issued as a result of options and performance rights issued

Remuneration of key management personnel

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Unissued ordinary shares under option by KMP

Shares under option

Dividends

Principal activities

Review of operations

Australia, Victoria - VIC/P67 (La Bella) Permit (WHN: 100% Operator)

Seychelles (WHN: 25% Non-Operator) – Discontinued Operation

DIRECTORS’ REPORT

New Business Development

WHL ENERGY LIMITED and its controlled entities

DIRECTORS’ REPORT

Operating results for the year

Review of financial conditions

Significant changes in the state of affairs

After balance date events

Likely developments and expected results

Environmental legislation

Corporate Governance Statement

DIRECTORS’ REPORT

Remuneration Report (Audited)

Key management personnel Directors

Senior Executives

Remuneration philosophy

Remuneration committee

Remuneration structure

Non-Executive Director remuneration

DIRECTORS’ REPORT

Senior Executive remuneration

Fixed remuneration

Variable remuneration

Employment contracts

Non-Executive Directors

Executive Directors

ZIMI LIMITED Annual Report 2016