5
TABLE OF CONTENTS
CEO’s Report
Information on Australian Pacific Coal
Review of Operations
Annual Financial Report
- Directors’ Report
- Remuneration Report
- Auditor’s Independence Declaration
- Statement of Profit or Loss and Other Comprehensive Income
- Statement of Financial Position
- Statement of Changes in Equity
- Statement of Cash Flows
- Notes to the Financial Statements
- Directors’ Declaration
- Independent Audit Report
Corporate Governance Statement
ASX Additional Information
Corporate Directory
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ii
iv
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14
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17
18
19
20
55
56
58
67
69
Annual Report
Australian Pacific Coal Limited
TOC
Year Ending 30 June 2015
ABN 49 089 206 986
CHIEF EXECUTIVE OFFICER’S REPORT
Bowen Basin explorer focused on
acquiring developing and value
adding metallurgical coal prospects.
The Company will be holding an Extraordinary General Meeting on 30 October 2015. Shareholders will then
have the opportunity to approve proposed investments from two cornerstone investors, Bentley Resources Pte
Ltd and Trepang Services Pty Ltd, as first announced on 29 July this year. Full details of the meeting and the
proposed placements have been sent to Shareholders. The Notice of Meeting was announced to the ASX on 24
September and can be found on our website at: http://www.aqcltd.com
This step is a significant milestone for the Company, subject to shareholder approval, securing an additional
$13.2 million from the placement. Alongside the recently completed Rights Issue, the funds raised will enable
the company to continue its exploration program and, if successful, to proceed to development of our coal
resources. In taking this step these cornerstone investors are demonstrating their confidence in the prospectivity
of our coal assets and the potential future of the company.
Your Board and I strongly support this transaction and consider it to be in the best interests of all shareholders
in securing the future of the company.
I would like to take this opportunity to thank you – our shareholders – for your ongoing support over the past 12
months and look forward to a prosperous future for the Company. I would also like to acknowledge the
dedication and efforts of the Board members and management throughout the year, and thank all our staff and
contractors for their diligent efforts.
Paul Byrne
Chief Executive Officer
29 October 2015
Annual Report
Australian Pacific Coal Limited
Page i
Year Ending 30 June 2015
ABN 49 089 206 986
Chief Executive Officer’s Report
INFORMATION ON AUSTRALIAN PACIFIC COAL
Australian Pacific Coal Limited (AQC) is an ASX-listed junior coal
explorer focused on the Bowen Basin, Queensland.
Through a series of acquisitions, AQC has positioned itself with both
metallurgical and
for
underground and open cut mining.
thermal coal projects potentially suited
located
AQC has a built a portfolio of strategic holdings of coal exploration
tenements
in Queensland's Bowen, Galilee, Surat and
Clarence-Moreton basins. The philosophy of AQC's management has
been to secure strategic tenure by identifying available tenements
close to operating mines or in areas with proven or potential in-ground
resources in regions suitable for short term development. The
Company’s projects are located close to the existing network of rail
and port infrastructure in the Bowen Basin.
The current focus of the company’s operations is to value add the coal
projects through evaluation of the resource potential of the projects
followed up with drilling as required to prove up the resource. Early
stage drilling has commenced on selected projects and will continue
through the coming year.
from
Following on
the value add process, AQC’s exploitation
opportunities for individual coal projects include development of the
project in its own right, farm-in, joint venture exploration, joint venture
development or outright sale.
AQC’s long term strategic focus is based on seeking out and identifying potentially lucrative resource
investment opportunities. The Company will continue to take advantage of low entry cost resource investment
opportunities that it identifies. Investing in these potentially lucrative resource plays is an important part of the
Board’s strategy to grow the Company.
BOARD OF DIRECTORS
Mr Peter Ziegler BCom (Hons), LLB (Hons), MFM, FCPA, CTA, ACA
Non-executive Chairman
Chairman of the Audit Committee
Mr. Ziegler is an experienced company director. He was a partner of one of the major international accounting
firms, specialising in taxation and corporate structuring. He is also a solicitor of the Supreme Court of Victoria.
Mr Ziegler is currently the principal of Ziegler Asset Partners, an asset management firm specialising in
investments in listed and unlisted equities and special opportunities. Director since 29 November 2005.
Mr Paul Byrne
Managing Director, Chief Executive Officer
Mr. Byrne joined the Company as Executive Director, following the acquisition of the Ipoh group of companies.
Mr. Byrne was a founder of the Ipoh group and has initiated environmental remediation projects in conjunction
with CSIRO, University of South Australia and the Queensland Department of Primary industries. He has also
been involved in the resources sector since 1985 in exploration and mining and has been a director of several
Australian public listed companies. Director since 29 November 2005.
Page ii
Australian Pacific Coal Limited
Information on Australian Pacific Coal
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2015
INFORMATION ON AUSTRALIAN PACIFIC COAL
BOARD OF DIRECTORS - continued
Mr Paul Ingram B.AppSc.(Geology), AusIMM
Non-executive Director
Mr Ingram is a geologist with over thirty five years of experience in mineral exploration and mine development.
Mr Ingram has been involved in several start-up public companies, mostly focussed in the Asian region. He has
extensive experience in corporate M&A, and has been focussed on coal projects in Asia and Australia for the
past nine years. Mr Ingram brings to the Board of AQC an extensive network of professional contacts, which,
combined with close ties to the Chinese resource industry, will be of significant benefit to the Group as an
emerging coal company in Queensland. Director since 17 March 2011.
Mr Ingram is currently a director of Consolidated Global Investments Limited, A-Cap Resources Ltd and Impact
Minerals Limited.
Mr Paul Ryan
Non-executive Director
Mr. Ryan is a businessman with over twenty years’ experience as owner and manager of large scale privately
held companies. He has been involved in operations management at the Manimbah gold mine, contract mining,
and transport and logistics operations. Mr Ryan brings to the Board of AQC an extensive network of
professional contacts which, combined with relevant industry experience, are of significant benefit to the Group
as an emerging coal company in Queensland. Director since 29 November 2012.
KEY COMPANY DATA
Listing:
Australian Securities Exchange (ASX:AQC) – Listed in 1999
Shares on Issue:
300,940,869 AQC ORD as at 30 June 2015
(approximately 1,650 shareholders)
Options:
Nil outstanding
Market Capitalisation:
$602 thousand as at 30 June 2015
Cash at bank:
$104,760 as at 30 June 2015
Quarterly Share Price Activity:
June 2015
March 2015
December 2014
September 2014
High
$0.005
$0.006
$0.020
$0.030
Low
$0.002
$0.004
$0.005
$0.015
Last
$0.002
$0.005
$0.007
$0.015
At the Company’s Annual General Meeting held on 24 November 2014 shareholders approved a one for five
share consolidation of all ordinary shares issued. Historical share prices for the periods prior to 26 November
2014 have been adjusted to reflect pricing calculated on a post consolidation basis.
Annual Report
Australian Pacific Coal Limited
Page iii
Year Ending 30 June 2015
ABN 49 089 206 986
Information on Australian Pacific Coal
REVIEW OF OPERATIONS
COAL EXPLORATION PROJECTS
Australian Pacific Coal Limited is an Australian public company focusing on acquiring and developing coking,
PCI and thermal coal deposits in Queensland. The Company has interests in 18 coal tenements comprising 1
granted mineral development licence, 16 granted coal exploration permits, and 1 coal exploration application
one of which is currently proceeding to grant.
The Company has a joint venture agreement in place with major miner Cuesta Coal.
Most of the coal tenements are in the Bowen Basin, a major source of supply of some of the world's best
metallurgical, PCI and thermal coal. The Company also has coal tenements in the Surat, Galilee and Clarence-
Moreton Basins. These basins contain large reserves of thermal coal and currently produce coal for export and
domestic use.
The Company’s coal tenements are close to rail and road infrastructure and some are down-dip or along strike
of operating coal mines or known coal resources.
The tenements have been largely grouped into project areas which target similar coal seams within a close
geographical proximity. AQC has an exploration priority on coking coal, and scoped underground targets with a
resource potential greater than 50 million tonnes and open cut targets with a resource potential greater than 5
million tonnes.
Short term evaluation and exploration is focused on the most prospective targets. Priority targets include:
MDL453 ‘Cooroorah’ in the Blackwater project. Potential for secondary shallower open cut coal in the
north.
EPC 1859 ‘Dingo’ in the Blackwater project – seams from Rangal Coal Measures intersected with
thicknesses up to 5m with potential for a washed, high yielding Ultra Low Volatile (ULV) PCI coal.
Requires further interpretation and drilling to potentially elevate to a resource.
EPC 2011 “South Clermont’ – targeting extension of the Clermont Basin south of the Clermont Coal
Mine with potential for thick open cut mineable coal seams.
EPC’s 1645, 1773, 1824 and 1867 “MT Hillalong” targeting the Rangal and Fort Cooper Coal Measures
in the northern Bowen Basin. The project offers prospectivity for proving underground resources of
metallurgical coal in the Rangals and open cut coal in the Fort Coopers.
Page iv
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2015
REVIEW OF OPERATIONS
Project Areas
The Company’s current exploration activities are focused on its 100% owned Blackwater projects.
Annual Report
Australian Pacific Coal Limited
Year Ending 30 June 2015
ABN 49 089 206 986
Page v
Review of Operations
REVIEW OF OPERATIONS
Blackwater (AQC 100%)
COOROORAH (MDL 453)
• Mineral Development Licence (MDL453) granted January 2014
• Targeting PCI and semi-soft coking coal
• Located near rail network and developed infrastructure
DINGO (EPC 1859)
• 30 km east of operating Blackwater and Curragh mines, targeting Rangal Coal Measures
• Initial drilling program completed in Q2 2014. Ultra Low Volatile PCI coal quality potential identified
• Located on rail network
CARLO CREEK (EPC 1995)
• Historical drill holes and seismic sections identified two potential coal target sequences
Page vi
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2015
REVIEW OF OPERATIONS
Cooroorah – MDL 453 (AQC 100%)
The target mineralisation is Late Permian Rangal Coal Measures coal within the Bowen Basin.
While coal is found in several seams within the Rangal Coal Measures, the project is targeting coal from the
Aries, Castor, Pollux and Pisces seams.
The four coal seams are located at a depth of between 180m and 520m, with no subcrops within the tenement.
Annual Report
Australian Pacific Coal Limited
Year Ending 30 June 2015
ABN 49 089 206 986
Page vii
Review of Operations
REVIEW OF OPERATIONS
Dingo – EPC 1859 (AQC 100%)
COAL QUALITY
Very Low Volatile
Low Ash
High Yield
PCI Product
Volatile Content % for PCI Coals
Page viii
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2015
South Clermont – EPC 2011 (AQC 100%)
REVIEW OF OPERATIONS
Proposed drilling of the South Clermont
target area aims to define an extension of
the Clermont Mine deposit with potential
for thick open cut mineable coal seams.
(Illustrated below.)
(Reference: N. September & R .Kirkwood, 2010. Clermont Coal Mine Project ,Selection of Tailings Paste Thickener, AusIMM –
Technical Meeting 17 February 2010, Sinclair Knight Merz)
Annual Report
Australian Pacific Coal Limited
Year Ending 30 June 2015
ABN 49 089 206 986
Page ix
Review of Operations
REVIEW OF OPERATIONS
Exploration & Joint Venture Agreements
Rio Tinto Exploration Pty Ltd – “Mt Hillalong”
EPC1824 is located in the heart of the Bowen Basin in close proximity to Rio Tinto’s existing Hail Creek mine
(see map below). Rio Tinto Exploration Pty Ltd has carried out exploration of the Mt Hillalong tenements in
accordance with an Exploration, Option and Joint Venture Agreement with the Company. Historical exploration
conducted for the CRA Coal Group identified outcropping coal in the northern part of EPC 1824.
Rio Tinto Exploration Pty Ltd held 100% interest in three of the Company’s Mt Hillalong tenements. Following
their termination of the Exploration, Option and Joint Venture Agreement with the Company, Rio Tinto
Exploration Pty Ltd are required to transfer all of their interests in the tenements to the AQC’s 100% owned
subsidiary Area Coal Pty Ltd. These tenements are now included within the Company’s Mt Hillalong project.
Note. This map does not display tenements held by other explorers.
MT HILLALONG TENEMENTS
EPC
Name
Holder
Status
Interest
Held
EPC 1824
Mount Hillalong
Area Coal Pty Ltd
Granted
100%
EPC 1645
Mount Hess
Area Coal Pty Ltd
Application
100%
EPC 1773
Kemmis Creek
Rio Tinto Exploration Pty Ltd
Granted
100%
EPC 1867
Mount Hess West
Rio Tinto Exploration Pty Ltd
Granted
100%
Location
6km E of
Glenden
20km SE
of
Glenden
32km SE
of
Glenden
16km SE
of
Glenden
Page x
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2015
REVIEW OF OPERATIONS
The Mount Hillalong project targets the Rangal and Fort Cooper Coal Measures in the northern Bowen Basin.
The project offers prospectivity for proving underground resources of metallurgical coal in the Rangals and open
cut coal in the Fort Coopers. The project has limited previous exploration. However, past work has shown
isolated drill hole intercepts within the tenements and geophysical surveys that defined good drilling targets as
the basis for further exploration by the company.
EPC 1824 comprises 15 sub-blocks (48 km2) centred on the Mount Hillalong homestead, 65 km North West of
Nebo in central Queensland. The Burton and Hail Creek coal mines are 14 km south and 18 km south-
southwest of Mt Hillalong, respectively. EPC 1824 was acquired by the Company to explore the underlying
Rangal Coal Measures for near surface coal resources.
Historical exploration conducted for the CRA Coal Group identified outcropping coal in the northern part of the
tenement. A coal target in the Rangals has been defined by historical seismic survey and indicated coal at
between 300 and 500m. A drilling program is being undertaken by RTX to further evaluate this target with the
aim to define a resource. Initial results have been summarised in the preceding pages.
The area is well served with infrastructure with major nearby coal mines located to the west, south and east.
The Hail Creek railway is 18 km to the southeast and provides access to Mackay’s export coal loading
terminals.
Rio Tinto Exploration (RTX) have provided the following report on the initial outcomes and progress of their
exploration program for AQC and Rio Tinto Exploration’s Mt Hillalong JV project EPC1824.
“Rio Tinto Exploration has completed its 2013 exploration program on the Hillalong Project (EPC1824). Two
open holes and three 2D seismic lines were completed during September 2013 to assess the potential for
Rangal Coal measures.
Drill results:
•
•
HILL0002 intersected 12m net coal between 320m and 460m depth from the Leichhardt, Vermont and
Girrah Seams.
HILL0003 intersected 11m net coal between 155m and 185m depth from the Leichhardt and Vermont
Seams.
Coal chip samples from the two holes have been submitted to the coal laboratories for petrography analysis and
reflectance (RoMax) determination.
Final processing and interpretation of the seismic data has not yet been completed, however it confirms Rangal
Coal Measures are present and continuous within EPC1824.”
THE MT HILLALONG EXPLORATION, OPTION AND JOINT VENTURE AGREEMENT
Rio Tinto Exploration Pty Ltd have terminated their Exploration, Option and Joint Venture Agreement with AQC
after the end of the reporting period. The process of transferring the Mt Hillalong tenements from Rio Tinto
Exploration Pty Ltd back to AQC’s 100% owned subsidiary Area Coal Pty Ltd is underway. AQC will continue
exploration and, if successful, the development of the project.
Annual Report
Australian Pacific Coal Limited
Year Ending 30 June 2015
ABN 49 089 206 986
Page xi
Review of Operations
REVIEW OF OPERATIONS
Exploration & Joint Venture Agreements
Blackwood Resources Pty Ltd (Cuesta Coal Limited)
Australian Pacific Coal Limited, through its 100% owned subsidiary Mining Investments One Pty Ltd, entered
into a Tenement Sale and Joint Venture Agreement with Blackwood Resources Pty Ltd (Blackwood) in April
2010. Under the terms of the agreement, Blackwood acquired a 90% interest in EPCs 1979, 1955, 1987 and
1957 for a total cash consideration of $500,000. Blackwood are required to expend at least the minimum
exploration commitment with the aim to prove up a coal resource and complete a feasibility study for the
project(s). AQC retains a 10% free carried interest up to bankable feasibility study stage. AQC will then have the
option to enter into a joint venture agreement with Blackwood Resources to further explore and develop the
tenements.
The joint venture tenements cover large areas over the Clarence-Moreton, Surat and Galilee Basin and are
prospective for shallow thermal coal.
Blackwood Resources Pty Ltd is a 100% owned subsidiary of Cuesta Coal Limited.
Page xii
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2015
REVIEW OF OPERATIONS
BLACKWOOD RESOURCES PTY LTD - TENEMENT SALE AND JOINT VENTURE AGREEMENT TENEMENTS
EPC
Name
Holder
Cuesta Coal
Project Area
Status
Interest
Held*
Location
EPC 1955
Bungaban Creek
Blackwood Resources Pty Ltd
East Wandoan
Granted
10%
EPC 1957
Laguna Creek
Blackwood Resources Pty Ltd
Eastern Galilee
Granted
10%
EPC 1979
Kingsthorpe
Blackwood Resources Pty Ltd
East Ackland
Granted
10%
EPC 1987
Quondong
Blackwood Resources Pty Ltd
East Wandoan
Granted
10%
100km N of
Miles
150km NW
of
Clermont
15km W of
Toowoomb
a
50km N of
Miles
*Note: Mining Investments One Pty Ltd has retained a 10% equity interest in each of the above tenements.
CUESTA COAL – EAST WANDOAN PROJECT
Over the period June-October 2011 Cuesta Coal carried out a 17 open hole, 3 Core hole programme in the
southern corner of EPC 1955 immediately to the north of the Bottle Tree Deposit (35Mt resource, EPC 813) held
by Cockatoo Coal. All holes were geophysically logged and Core samples sent away for analysis and an
Inferred JORC resource of 23.9Mt was announced by the company on 6th of February 2011. In March/April
2012 Cuesta completed 39 holes for a total of 59 holes drilled in the southern section of EPC 1955. The drilling
has resulted in the delineation of 44.6Mt (22.1Mt Indicated, 22.5Mt Inferred) of resource calculated in
accordance with JORC guidelines, and is now referred to as the Thorn Hill Deposit. Follow-up drilling at the
Thorn Hill Deposit will include step out drilling and large diameter coring to enable washability test work to be
conducted to identify washability recovery and saleable product. Follow-up drilling will focus on the south-east
corner and northern extensions of the deposit aimed to further increase the overall resource and understanding
of the coal quality. There is potential to increase this to 60Mt with additional drilling. The Company has
identified 4 other similar target areas which it will test in the next 12-18mth, priority targets will be identified
through ongoing geophysical and desktop studies. - See more at: http://www.cuestacoal.com.au/projects/east-
wandoan
CUESTA COAL – EASTERN GALILIEE PROJECT, KARURA TARGET AREA (EPC 1957)
In conjunction with the 2012 exploration activities in Yellow Jacket, a detailed desktop review of Cuesta’s 90%
owned EPC 1957 has confirmed a target area of up to 50km2 is present immediately south of the Adani
Carmichael Project rail corridor. Historical regional seismic lines have been investigated and they indicate
syncline structures present in both Yellow Jacket and Karura that have the potential to preserve the Permian
coal measures of the Betts Creek Beds east of the known sub crop. This has been proven in Yellow Jacket
through the drilling activities in 2011 and 2012. The syncline structures in Yellow Jacket match the gravity
survey conducted earlier this year. There are very similar geological properties in the Karura Target area as
there are in the Yellow Jacket Project, warrant further exploration to verify the presence of coal. It is anticipated
that a thirteen hole scout drilling campaign can test the presence of coal measures in the Karura Project area. -
See more at: http://www.cuestacoal.com.au/projects/eastern-galilee
Annual Report
Australian Pacific Coal Limited
Year Ending 30 June 2015
ABN 49 089 206 986
Page xiii
Review of Operations
REVIEW OF OPERATIONS
Granted Tenements
100% AQC
Exploration & Joint
Venture Agreements
• MDL 453 – Cooroorah
Blackwood Resources Pty Ltd (Note 1.)
• EPC 1566 – Bee Creek
• EPC 1955 – Bungaban Creek
• EPC 1859 – Dingo
• EPC 1957 – Laguna Creek
• EPC 1896 – Bottle Tree Creek
• EPC 1979 – Kingsthorpe
• EPC 1965 – Kanga Creek
• EPC 1987 – Quondong
• EPC 1996 – Churchyard Creek
• EPC 2011 – South Clermont
Rio Tinto Exploration Pty Ltd (Note 2.)
• EPC 2035* – Bee Creek
• EPC 1645* – Mount Hess
• EPC 2036* – Ripstone Creek
• EPC 1773 – Kemmis Creek
• EPC 2037 – Almoola
• EPC 1824 – Mount Hillalong
* Surrender in progress
• EPC 1867 – Mount Hess West
* Application Pending
1. Australian Pacific Coal Limited’s 100% owned subsidiary Mining Investments One Pty Ltd holds a 10%
interest in each of the Blackwood Resources Pty Ltd JV tenements.
2. As at the date of this Annual Report, Australian Pacific Coal Limited’s 100% owned subsidiary Area
Coal Pty Ltd holds a 100% interest in each of the Rio Tinto Exploration Pty Ltd tenements. Rio Tinto
Exploration Pty Ltd is in the process of transferring its holding in EPCs 1773 and 1867 back to Area
Coal Pty Ltd following termination of the Company’s Exploration, Option and Joint Venture Agreement
with Rio Tinto Exploration Pty Ltd. EPC 1824 and EPC 1645 (application) are directly held by Area Coal
Pty Ltd.
Page xiv
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2015
REVIEW OF OPERATIONS
INDUSTRIAL MINERALS PROJECTS
AQC owns one industrial minerals project in central/south western Queensland. The project forms part of AQC’s
former industrial minerals business and is no longer part of the company’s core business.
MANTUAN DOWNS BENTONITE
AQC’s Mantuan Downs calcium bentonite resource is located west of Springsure in Central Queensland.
The Mantuan Downs deposit comprises two main bentonite horizons that are essentially flat lying. The Upper
Bentonite Zone is the best developed, with an average cation exchange capacity (CEC) quality of 102
meq/100g. Near the centre of the deposit, the upper bentonite zone is 4-4.5m thick. The lower bentonite zone
similarly comprises good quality bentonite with an average CEC quality of around 90 meq/100g. This zone is
continuous throughout the deposit and is at least 2-4m thick.
The company has developed a number of products based on bentonite for industrial, livestock, agricultural, soil
improvement and composting applications. The project is currently on care and maintenance as new marketing
opportunities are being evaluated.
GRAFTON RANGE SODIUM BICARBONATE
The Company does not consider this project be a part of its core business, has not been able to realise
opportunities for divestment and has surrendered the tenements.
Mineral Exploration Tenements - 100% AQC
Bentonite (Mantuan Downs)
• ML 70360 – Mantuan Downs
Bentonite Based Technologies
AQC has developed calcium bentonite based technologies for the improvement of our environment. These
technologies include remediation of heavy metal contaminated soils, the removal of carcinogenic compounds
from high temperature smoke, the global licence for absorption of oil spills in water, increasing agricultural
productivity through bentonite blending for fertilizer, and the reduction of methane emissions in livestock.
The major market being targeted is excess fertilizer run-off from farming lands along the Queensland coast.
Generally positive results from field trials have enhanced the long term prospects for use of AQC’s calcium
bentonite in this application. Commercial considerations for primary producers in these regions mean that
changes to traditional farming practice are only likely to happen in response to Government pressure to fix this
problem.
Based on prior research which highlighted the benefit of bentonite in enhancing soils and composts, AQC also
focused on the agriculture sector end users in broad acre, high value market gardens, and feed lots. While
feedback from field trials has generally been positive, the reticence of primary producers to change long term
farming practice has slowed market take up.
Annual Report
Australian Pacific Coal Limited
Year Ending 30 June 2015
ABN 49 089 206 986
Page xv
Review of Operations
5
Australian Pacific Coal Limited
Corporate directory
30 June 2015
Directors
Peter Ziegler (Chairman)
Paul Byrne (Managing Director and Chief Executive Officer)
Paul Ingram
Paul Ryan
Company secretary & CFO
Kevin Mischewski
Registered office
Principal place of business
Share register
Auditor
Solicitors
Bankers
Level 7
10 Felix Street
Brisbane QLD 4000
Phone: +61 7 3221 0679
Level 7
10 Felix Street
Brisbane QLD 4000
Phone: +61 7 3221 0679
Link Market Services Limited
Level 15
324 Queen Street
Brisbane QLD 4000
Phone: 1300 554 474 or +61 2 8280 7111
www.linkmarketservices.comau
Sothertons LLP, Chartered Accountants
Level 6
468 St Kilda Road
Melbourne VIC 3004
HopgoodGanim lawyers
Level 8
Waterfront Place
1 Eagle Street
Brisbane QLD 4000
National Australia Bank Limited
100 Creek Street
Brisbane QLD 4000
Stock exchange listing
Australian Pacific Coal Limited shares are listed on the Australian Securities Exchange
(ASX code: AQC)
Website
www.aqcltd.com
1
Australian Pacific Coal Limited
Directors' report
30 June 2015
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'consolidated entity') consisting of Australian Pacific Coal Limited (referred to hereafter as the 'company' or 'parent entity')
and the entities it controlled at the end of, or during, the year ended 30 June 2015.
Directors
The following persons were directors of Australian Pacific Coal Limited during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Peter Ziegler
Paul Byrne
Paul Ingram
Paul Ryan
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of:
Evaluation of coal exploration tenements held in the Bowen, Surat and Galilee basins in Queensland, Australia.
Identifying exploration opportunities on selected coal tenements including exploration by way of joint venture
agreement.
Planning of exploration programs covering selected coal tenements.
Seeking opportunities for divestment or joint venture development of existing projects.
Reviewing other resource investment opportunities.
Dividends
No dividends of the Company or any entity of the Consolidated Entity have been paid or declared or recommended since
the end of the preceding year. The Directors do not recommend the payment of any dividend for the year ended 30 june
2015.
Review of operations
The loss for the consolidated entity after providing for income tax and non-controlling interest amounted to $1,922,562 (30
June 2014: $1,790,492).
During the course of 2015 the consolidated entity continued its review of first tier projects and planning for further exploration
of those projects. The consolidated entity has a number of prospective tenement areas within its holdings in the Blackwater
region. The main exploration projects identified are Coroorah, South Clermont and Dingo. Further drilling to improve the
resource status of these projects will be undertaken as funds become available.
The consolidated entity had entered into an Exploration, Option and Joint Venture Agreement with Rio Tinto Exploration Pty
Limited covering four of the consolidated entities’ Mt Hillalong tenements. Following expiry of their option under the
agreement, Rio Tinto Exploration Pty Limited provided their formal notice terminating thsi agreement on 25 August 2015. All
interests in the four Mt Hillalong tenements now revert to the consolidated entity. The Company will continue exploration of
the project as funds become available.
The consolidated entity holds a 10% free carried interest through to feasibility stage in four tenements that it transferred to
Blackwood Resources Pty Ltd. Blackwood is a subsidiary of Cuesta Coal Limited. Cuesta has secured funding to complete
its exploration program and is actively drilling the joint venture exploration tenements. Exploration of one of the four
Blackwood JV tenements, EPC 1979, is severely restricted following the passing of new legislation since the tenement was
last renewed. The legislation significantly increases Urban Restricted Areas overlapping the tenement. Blackwood
Resources Pty Ltd have advised the Company that they intend to surrender the tenement on its expiry.
A number of the consolidated entities lower ranked tenements fell due for renewal during the course of the financial year. An
evaluation of each such tenement was undertaken prior to the decision being made on their renewal. Tenements that were
considered to have limited prospectivity or exploitation opportunities were surrendered on expiry.
2
Australian Pacific Coal Limited
Directors' report
30 June 2015
Going Concern
The company has entered into Subscription Agreements with Bentley Resources Pte Ltd and Trepang Services Pty Ltd as
announced to the ASX on 27 August 2015. The agreements include provisions that subject to shareholder approval at a
general meeting to be held on 30 October 2015 the company will place 3.3 million fully paid ordinary shares to raise a total
of $13.2 million before costs. (Placement Resolutions) These funds have been received and are currently being held in
escrow with the company’s solicitors pending approval of the placements at the company’s general meeting. As a condition
precedent to the proposed placement the company is also undertaking a 1:1 non-renounceable rights issue (Rights Issue)
to raise up to $1.54 million before costs. The Rights Issue will open on 6 October 2015 with the new shares taken up under
the offer expected to be issued on 23 October 2015.
At the time of signing this report, the outcome of the Rights Issue and shareholder approval of the Placement Resolutions
are unknown. In making their assessment of the ability of the company to continue as a going concern, directors and
management have evaluated the likely outcome of both the Rights Issue and the Placement Resolutions. They have
concluded that while conditions for material uncertainty exist, which may cast significant doubt on the consolidated entity’s
ability to continue as a going concern, there is a reasonable expectation that the Rights Issue and the Placement
Resolutions will result in the company raising sufficient capital to enable it to contine as a going concern.
Should the anticipated capital raisings not generate the expected cash flows, the company may not be able to pay its debts
as and when they become due and payable and it may be required to realise assets and extinguish liabilities other than in
the ordinary course of business and at amounts different from those stated in the financial statements. This report does not
include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of
liabilities that might be necessary should the company and the consolidated entity not continue as going concerns.
Significant changes in the state of affairs
The following significant changes in the state of affairs of the consolidated entity occurred during the financial year:
Changes in capital structure:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
At the Company’s 2014 Annual General Meeting shareholders approved a 1 for 5 share consolidation to take effect
on 26 November 2014.
Prior to the consolidation, the Company issued 58,879,650 ordinary shares raising $188,414 before costs under its
September 2014 Share Purchase Plan, to provide funds for exploration and additional working capital.
Prior to the consolidation, the Company issued 50,000,000 ordinary shares to sophisticated and professional
investors, raising $150,000 before costs, to provide funds for exploration and additional working capital.
Prior to the consolidation, the Company issued 10,214,285 ordinary shares to geological consultants in lieu of
payments totalling $50,050 for services provided.
Prior to the consolidation 25,000,000 ordinary shares were issued on conversion of convertible securities having a
face value of $50,000.
Subsequent to the consolidation the Company issued 10,000,000 ordinary shares to sophisticated and
professional investors, raising $60,000 before costs, to provide funds for exploration and additional working capital.
Subsequent to the consolidation, the Company issued 17,942,331 ordinary shares to geological consultants in lieu
of payments totalling $104,775 for services provided.
Subsequent to the consolidation 60,000,001 ordinary shares were issued on conversion of convertible securities
having a face value of $190,000. . The face value of outstanding convertible securities at 30 June 2015 is $60,000
(2014: $175,000).
The total number of ordinary shares issued during the financial year, on a post consolidation basis, was 116,761,119
(2014: 51,640,374 (258,201,869 on a pre-consolidation basis))
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
3
Australian Pacific Coal Limited
Directors' report
30 June 2015
Matters subsequent to the end of the financial year
On 22 July 2015 the Company completed a placement of 54 million shares at 0.4 cents per share for a total cash
consideration of $216,000.
On 29 July 2015 the Company announced that it had executed a binding term sheet with two cornerstone investors,
Bentley Resources Pte Ltd and Trepang Services Pty Ltd to place 3.3 million fully paid ordinary shares at $0.004 per share
to raise a total of $13.2 million before costs. The proposed placements are subject to regulatory and shareholder approval.
The company also advised on 29 July 2015 that it will undertake a non-renounceable entitlements issue to raise up to 1.42
million before costs. Shareholders will be entitled to acquire one new ordinary share for every one ordinary share held at
the record date at an issue price of $0.004 per new share. Due to a subsequent issuance of shares the entitlements issue
has been increased to an amount up to $1.54 million before costs.
On 3 August 2015 the company issued 30 million shares on conversion of the remaining $60,000 of the outstanding
convertible security held by the Australian Special Opportunity Fund LP.
The notification period for the Exploration, Option and Joint Venture Agreement with Rio Tinto Exploration Pty Ltd expired
on 23 August 2015 and it formally terminated the Rio Tinto JV. Consequently Rio Tinto is obliged to return all of their
interests in the three tenements that had been transferred to it, including exploration data to the company’s 100% owned
subsidiary Area Coal Pty Ltd.
On 27 August 2015 the company announced that it had executed subscription agreements with Bentley Resources Pte Ltd
and Trepang Services Pty Ltd to place 3.3 million fully paid ordinary shares at $0.004 per share to raise a total of $13.2
million before costs. Pursuant to the agreement the funds to be raised have been deposited into an escrow account
operated by the company’s lawyers HopgoodGanim, for settlement of the placement in accordance with the terms of the
agreement.
On 9 September 2015 the company announced that it had entered into a convertible loan deed with Bentley Resources Pte
Ltd and Trepang Services who had agreed to the early release of $200,000 from the $13.2 million funds being held in
escrow in accordance with the terms of the Subscription Agreements and the proposed placements to Bentley and
Trepang.
On 24 September the company announced an Extraordinary General Meeting to be held on 30 October 2015
On 25 September 2015 the company released the Rights Issue Offer Document in accordance with the proposed
entitlements issue announced on 29 July 2015. The entitlement issue will be a non-renounceable rights issue to eligible
shareholders, on the basis of 1 new fully paid ordinary share for every 1 share held at an issue price of $0.004 per share
(New Share), to raise approximately $1,539,763.48 (before costs) (Rights Issue). Under the Rights Issue, 384,940,869 New
Shares will be offered.
Likely developments and expected results of operations
The consolidated entity intends to continue its exploration, development and production activities on its existing projects and
to acquire further suitable projects for exploration as opportunities arise.
Environmental regulation
The consolidated entity is subject to and is compliant with all aspects of environmental regulation of its exploration and mining
activities. The directors are not aware of any environmental law that is not being complied with.
The Group’s operations are subject to significant environmental regulations under the laws of the Commonwealth and
Queensland in respect of its Australian exploration activities. The Company is committed to undertaking all its operations in
an environmentally responsible manner. The Group’s projects in Queensland operate under granted Environmental
Authorities issued under the Environmental Protection Act 1994 (Qld).
The consolidated entity is not subject to the reporting requirements of the Energy Efficiency Opportunities Act 2006 in the
current financial year as its energy consumption was below the 0.5 petajoule registration threshold.
The consolidated entity is not subject to the reporting requirements of the National Greenhouse and Energy Reporting Act
2007.
4
Australian Pacific Coal Limited
Directors' report
30 June 2015
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Mr. Peter Ziegler
Non-Executive Chairman
B. Com (Hons), LL.B (Hons); MFM, FCPA, CTA, ACA
Mr. Ziegler is an experienced company director. He was a partner of one of the major
international accounting firms, specialising in taxation and corporate structuring. He is
also a solicitor of the Supreme Court of Victoria. Mr Ziegler is currently the principal of
Ziegler Asset Partners, an asset management firm specialising in investments in listed
and unlisted equities and special opportunities. Mr. Ziegler joined the Board of
Australian Pacific Coal Limited on 29 November 2005 and was elected Chairman on
29 November 2012.
Other current directorships:
Former directorships (last 3
years):
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Nil
Nil
Chairman of the Audit Committee
3,284,167
None
None
Name:
Title:
Experience and expertise:
Mr. Paul Byrne
Managing Director and Chief Executive Officer
Mr. Byrne joined the Company as Executive Director, following the acquisition of the
Ipoh group of companies. Mr. Byrne was a founder of the Ipoh group and has initiated
environmental remediation projects in conjunction with CSIRO, University of South
Australia and the Queensland Department of Primary industries. He has also been
involved in the resources sector since 1985 in exploration and mining and has been a
director of several Australian public listed companies. Mr. Byrne joined the Board of
Australian Pacific Coal Limited as Managing Director on 29 November 2005.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
22,667,304 ordinary shares
Interests in shares:
None
Interests in options:
None
Contractual rights to shares:
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Mr. Paul Ingram
Non-Executive Director
B.AppSc (Geology), AusIMM
Mr. Ingram is a geologist with over thirty five years of experience in mineral exploration
and mine development. Mr Ingram has been involved in several start-up public
companies, mostly focussed in the Asian region. He has extensive experience in
corporate M&A and has been focussed on coal projects in Asia and Australia for the
past eight years. Mr Ingram brings to the Board of AQC an extensive network of
professional contacts, which, combined with close ties to the Chinese resource
industry, will be of significant benefit to the Group as an emerging coal company in
Queensland. Mr. Ingram joined the Board of Australian Pacific Coal Limited as a Non-
Executive Director on 17 March 2011.
Consolidated Global Investments Limited (since September 2006)
A-Cap Resources Limited (since June 2009)
Impact Minerals Limited (since July 2009)
Former directorships (last 3 years): None
None
Special responsibilities:
1,150,000 ordinary shares
Interests in shares:
None
Interests in options:
None
Contractual rights to shares:
5
Australian Pacific Coal Limited
Directors' report
30 June 2015
Name:
Title:
Experience and expertise:
Mr. Paul Ryan
Non-Executive Director
Mr. Ryan is a businessman with over twenty years’ experience as owner and manager
of large scale privately held companies. He has been involved in operations
management at the Manimbah gold mine, contract mining, and transport and logistics
operations. Mr Ryan brings to the Board of AQC an extensive network of professional
contacts which, combined with relevant industry experience, are of significant benefit
to the Group as an emerging coal company in Queensland. Mr. Ryan joined the Board
of Australian Pacific Coal Limited as a Non-Executive Director on 29 November 2012.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
Contractual rights to shares:
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Mr. Kevin Mischewski B Buss (Acc), CA has held the role of Company Secretary since 30 June 2008, Joint Company
Secretary 29 February 2008 to 30 June 2008. Mr. Mischewski is a Chartered Accountant and Registered Tax Agent with
extensive commercial experience in senior financial and management accounting roles. Previous positions include Chief
Financial Officer, Company Secretary and Finance Director for large private manufacturing companies. He has extensive
experience with listed public company reporting and compliance requirements.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during the year
ended 30 June 2015, and the number of meetings attended by each director were:
Full board
Audit Committee
Attended
Held
Attended
Held
Mr. Peter Ziegler
Mr. Paul Byrne
Mr. Paul Ingram
Mr. Paul Ryan
11
11
8
11
11
11
11
11
2
-
-
-
2
-
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
6
Australian Pacific Coal Limited
Directors' report
30 June 2015
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
● Principles used to determine the nature and amount of remuneration
● Details of remuneration
● Service agreements
● Share-based compensation
● Additional information
● Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and conforms to the market best practice for the delivery of reward. The Board of
Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance practices:
● competitiveness and reasonableness
● acceptability to shareholders
● performance linkage / alignment of executive compensation
● transparency
The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The
performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy
is to attract, motivate and retain high performance and high quality personnel.
The Board of Director’s has structured an executive remuneration framework that is market competitive and complementary
to the reward strategy of the consolidated entity.
Alignment to shareholders' interests:
● has economic profit as a core component of plan design
● focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
● attracts and retains high calibre executives
Alignment to program participants' interests:
● rewards capability and experience
● reflects competitive reward for contribution to growth in shareholder wealth
● provides a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive directors and executive remunerations
are separate.
Non-executive directors remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors'
fees and payments are reviewed annually by the Board. The Board may, from time to time, receive advice from independent
remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line with the market.
The chairman's fees are determined independently to the fees of other non-executive directors based on comparative roles
in the external market. The chairman is not present at any discussions relating to the determination of his own remuneration.
Non-executive directors do not receive share options or other incentives.
ASX listing rules require the aggregate non-executive directors remuneration be determined periodically by a general
meeting. The most recent determination was at the Annual General Meeting held on 29 November 2005, where the
shareholders approved an aggregate remuneration of $250,000.
7
Australian Pacific Coal Limited
Directors' report
30 June 2015
Executive remuneration
The consolidated entity aims to reward executives with a level and mix of remuneration based on their position and
responsibility, which has both fixed and variable components.
The executive remuneration and reward framework has four components:
● base pay
● short-term performance incentives
● share-based payments
● other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Board, based on individual performance, the overall performance of the consolidated entity and comparable market
remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the consolidated entity and provides additional value to the
executive.
The short-term incentives ('STI') program is designed to align the targets of the business units with the targets of those
executives responsible for meeting those targets. Currently, key management personnel remuneration does not comprise of
any short-term incentive schemes or equity based remuneration.
The long-term incentives ('LTI') include long service leave and may include share-based payments. Currently, key
management personnel remuneration does not comprise of any long-term incentive schemes or equity based remuneration.
Consolidated entity performance and link to remuneration
The Board do not consider that there is a direct relationship between the remuneration policy of the company and company
performance. The Managing Director of the company is also a substantial shareholder and as such is sufficiently motivated
to improve company performance.
Use of remuneration consultants
During the financial year ended 30 June 2015, the consolidated entity did not engage remuneration consultants to review its
existing remuneration policies.
Voting and comments made at the company's 2014 Annual General Meeting ('AGM')
At the 2014 AGM, 96% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2014. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors of Australian Pacific Coal
Limited:
● Peter Ziegler - Non-Executive Chairman
● Paul Ingram - Non-Executive Director
● Paul Ryan - Non-Executive Director
● Paul Byrne - Managing Director and Chief Executive Officer
And the following persons:
● Kevin Mischewski - Company Secretary and Chief Financial Officer
8
Australian Pacific Coal Limited
Directors' report
30 June 2015
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
$
Consulting &
Contractor
Fees
$
Non-monetary
$
Super-
annuation
$
Long service
leave
$
Equity-settled
$
Total
$
60,000
36,000
36,000
208,800
-
-
36,000
206,400
-
168,000
214,300
629,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
268,800
-
-
-
242,400
-
-
214,300
797,500
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based
payments
Cash salary
and fees
$
Consulting &
Contractor
Fees
$
Non-monetary
$
Super-
annuation
$
Long service
leave
$
Equity-settled
$
Total
$
60,000
36,000
36,000
211,200
-
-
36,000
201,600
-
168,000
192,273
605,073
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
271,200
36,000
36,000
-
237,600
-
-
192,273
773,073
2015
Non-Executive
Directors:
Peter Ziegler
(Chairman) *
Paul Ingram *
Paul Ryan *
Executive
Directors:
Paul Byrne *
Other Key
Management
Personnel:
Kevin
Mischewski
2014
Non-Executive
Directors:
Peter Ziegler
(Chairman) *
Paul Ingram *
Paul Ryan *
Executive
Directors:
Paul Byrne *
Other Key
Management
Personnel:
Kevin
Mischewski
*
Commencing on 1 February 2013, directors agreed that they would defer the receipt of payment of their remuneration.
As at 30 June 2015 the amounts of directors’ fees and consulting fees unpaid and payable to each director were: Peter
Ziegler $583,216 (2014: $314,418); Paul Byrne $514,418 (2014: $272,018); Paul Ingram $87,000 (2014: $51,000) and
Paul Ryan $87,000 (2014: $51,000). These amounts are included in the above tables.
9
Australian Pacific Coal Limited
Directors' report
30 June 2015
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Peter Ziegler
Paul Ingram
Paul Ryan
Executive Directors:
Paul Byrne
Other Key Management
Personnel:
Kevin Mischewski
Fixed remuneration
2014
2015
At risk - STI
At risk - LTI
2015
2014
2015
2014
100%
100%
100%
100%
100%
100%
100%
100%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
-%
100%
100%
-%
-%
-%
-%
The proportion of the cash bonus paid/payable or forfeited is as follows:
Name
Executive Directors:
Paul Byrne
Other Key Management Personnel:
Kevin Mischewski
Cash bonus paid/payable
2015
2014
Cash bonus forfeited
2014
2015
-%
-%
-%
-%
-%
-%
-%
-%
Service agreements
The employment terms and conditions of key management personnel and Group executives are not currently formalised in
contracts of employment. Key management personnel contracts of employment are governed by applicable statutory
provisions which may set out minimum notice period prior to termination of their contract. Statutory and common law
termination provisions apply.
Terms of employment for employees of relevant group entities do not include termination provisions and do not provide an
executive contracted person with a minimum notice period prior to termination of contract. A contracted person deemed
employed on a permanent basis may terminate without notice. Statutory termination provisions apply. Termination payments
are not payable on resignation or under the circumstances of unsatisfactory performance.
Non-executive directors are engaged in accordance with the company’s Directors Terms of Engagement requiring no notice
to be given on termination. Statutory termination provisions apply. Termination payments are at the discretion of the Board.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
No shares were issued to directors and other key management personnel as part of compensation during the year ended 30
June 2015.
Options
No options were issued to directors and other key management personnel in this financial year as part of their remuneration.
10
Australian Pacific Coal Limited
Directors' report
30 June 2015
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at Received
as part of
the start of
the year *
remuneration Additions *
Disposals/
other
Balance at
the end of
the year
Ordinary shares
Peter Ziegler
Paul Ingram
Paul Ryan
Paul Byrne
Kevin Mischewski
2,346,667
1,150,000
-
18,862,583
300,000
22,659,250
-
-
-
-
-
-
937,500
-
-
3,804,721
-
4,742,221
-
3,284,167
-
1,150,000
-
-
- 22,667,304
-
300,000
- 27,401,471
*
At the Company's Annual General Meeting held on 24 November 2014 shareholders approved a one for five share
consolidation of all ordinary shares issued. The numbers of ordinary shares issued and equity securities ("Shares") shown
are stated on a post-consolidation basis. The number of Shares shown for any Shares issued prior to the share
consolidation have been adjusted to reflect the equivalent post consolidation number of Shares so issued.
Option holding
No director or other member of key management personnel of the consolidated entity, including their personally related
parties, held any options over ordinary shares of the company during the financial year.
Other transactions with key management personnel and their related parties
There were no other transactions with key management personnel and their related parties during the financial year.
This concludes the remuneration report, which has been audited.
11
Australian Pacific Coal Limited
Directors' report
30 June 2015
Shares under option
There were no unissued ordinary shares of Australian Pacific Coal Limited under option at the date of this report
There have been no unissued shares or interest under any option of any controlled entity within the consolidated entity during
or since the end of the reporting period.
No person entitled to exercise any options had or has any right by virtue of the option to participate in any share issue of the
company or of any other body corporate.
Shares issued on the exercise of options
No ordinary shares of Australian Pacific Coal Limited were issued during the year ended 30 June 2015 and up to the date of
this report on the exercise of options granted.
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the
company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
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 purpose of taking responsibility
on behalf of the company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 23 to the financial statements.
The directors are satisfied that the auditor (or another person or firm acting on the auditor's behalf), did not provide any non-
audit services during the financial year.
The directors are of the opinion that, as the auditor (or another person or firm acting on the auditor’s behalf) did not provide
any non-audit services, the services as disclosed in note 23 to the financial statements do not compromise the external
auditor's independence requirements of the Corporations Act 2001.
Officers of the company who are former partners of Sothertons L.L.P. Chartered Accountants
There are no officers of the company who are former partners of Sothertons L.L.P. Chartered Accountants.
Rounding of amounts
The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission,
relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Class Order to the nearest
dollar.
12
Australian Pacific Coal Limited
Directors' report
30 June 2015
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
the following page.
Auditor
Sothertons L.L.P. Chartered Accountants continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________
Peter Ziegler
Chairman
30 September 2015
Brisbane
13
Australian Pacific Coal Limited
Contents
30 June 2015
Contents
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report to the members of Australian Pacific Coal Limited
General information
16
17
18
19
20
55
56
The financial statements cover Australian Pacific Coal Limited as a consolidated entity consisting of Australian Pacific Coal
Limited and the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian
dollars, which is Australian Pacific Coal Limited's functional and presentation currency.
Australian Pacific Coal Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business are:
Registered office
Level 7
10 Felix Street
Brisbane QLD 4000
Principal place of business
Level 7
10 Felix Street
Brisbane QLD 4000
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 30 September 2015. The
directors have the power to amend and reissue the financial statements.
15
Australian Pacific Coal Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2015
Revenue from continuing operations
Sale of interest in tenements
Other income
Expenses
Raw materials and consumables used
Employee benefits expense
Depreciation and amortisation expense
Impairment of trade and other receivables
Impairment of exploration and evaluation
Impairment of other financial assets
Exploration and evaluation expense
Capitalised exploration expensed on sale of tenement
Capitalised exploration expensed on surrender of tenement
Administration and consulting expenses
Other expenses
Consolidated
Note
2015
$
2014
$
4
5
6,730
24,220
15,000
120,705
-
-
-
(215,201)
(30,659)
(109,170)
650
(74,000)
(49,848)
(30,700)
(424,335)
(1,128,452)
(3,282)
(20,757)
(211,183)
(48,350)
(181,950)
(71,171)
(26,000)
(36,878)
-
-
(1,218,042)
(381)
Profit before income tax expense from continuing operations
(1,922,562)
(1,790,492)
Income tax expense
7
-
-
Profit after income tax expense from continuing operations
(1,922,562)
(1,790,492)
Profit after income tax expense from discontinued operations
-
-
Profit after income tax expense for the year
(1,922,562)
(1,790,492)
Other comprehensive income
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit for the year is attributable to:
Owners of Australian Pacific Coal Limited
Total comprehensive income for the year is attributable to:
Owners of Australian Pacific Coal Limited
-
-
(1,922,562)
(1,790,492)
(1,922,562)
(1,790,492)
(1,922,562)
Cents
(1,790,492)
Cents
Earnings per share for profit from continuing operations attributable to the
owners of Australian Pacific Coal Limited
Basic earnings per share
Diluted earnings per share
33
33
(0.83)
(0.83)
(1.10)
(1.10)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
Australian Pacific Coal Limited
Statement of financial position
As at 30 June 2015
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Receivables
Available-for-sale financial assets
Property, plant and equipment
Exploration and evaluation
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained profits
Total equity
Consolidated
Note
2015
$
2014
$
8
9
10
11
12
13
14
16
101,201
17,389
28,180
146,770
451,226
102,589
27,867
581,682
70,773
-
137,169
2,440,667
67,083
2,715,692
129,063
74,000
185,448
2,741,917
84,583
3,215,011
2,862,462
3,796,693
17
18
1,672,936
60,000
1,732,936
1,307,581
175,000
1,482,581
1,732,936
1,482,581
1,129,526
2,314,112
19
37,695,544 36,957,568
(36,566,018) (34,643,456)
1,129,526
2,314,112
The above statement of financial position should be read in conjunction with the accompanying notes
17
Australian Pacific Coal Limited
Statement of changes in equity
For the year ended 30 June 2015
Consolidated
Issued
capital
$
Reserves
$
Retained
profits
$
Non-
controlling
interest
$
Total
equity
$
Balance at 1 July 2013
35,239,172
- (32,852,964)
-
2,386,208
-
-
-
-
(1,790,492)
-
(1,790,492)
-
-
-
-
-
(1,790,492)
-
(1,790,492)
Profit after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 19)
Balance at 30 June 2014
36,957,568
- (34,643,456)
1,718,396
-
-
-
-
1,718,396
2,314,112
Consolidated
Issued
capital
$
Reserves
$
Retained
profits
$
Non-
controlling
interest
$
Total
equity
$
Balance at 1 July 2014
36,957,568
- (34,643,456)
-
2,314,112
-
-
-
-
(1,922,562)
-
(1,922,562)
-
-
-
-
-
(1,922,562)
-
(1,922,562)
Profit after income tax expense for the year
Other comprehensive income for the year, net
of tax
Total comprehensive income for the year
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
(note 19)
Balance at 30 June 2015
37,695,544
- (36,566,018)
737,976
-
-
-
-
737,976
1,129,526
The above statement of changes in equity should be read in conjunction with the accompanying notes
18
Australian Pacific Coal Limited
Statement of cash flows
For the year ended 30 June 2015
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Net cash from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation
Proceeds from sale of property, plant and equipment
Proceeds from sale of exploration tenements
Proceeds from release of security deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Share issue transaction costs
Net cash (used in)/provided by financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
Consolidated
Note
2015
$
2014
$
31
4,800
(908,616)
2,864
(1,094,864)
(903,816)
6,730
(1,092,000)
16,556
(897,086)
1,075,444
(7,230)
(88,633)
142,273
15,000
17,500
(5,868)
(451,098)
-
-
-
78,910
(456,966)
398,415
125,000
(55,264)
1,550,250
-
(64,479)
468,151
1,485,771
(350,025)
451,226
(46,639)
497,865
101,201
451,226
The above statement of cash flows should be read in conjunction with the accompanying notes
19
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New, revised or amending Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the consolidated entity.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 2012-3 Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities
The consolidated entity has applied AASB 2012-3 from 1 July 2014. The amendments add application guidance to address
inconsistencies in the application of the offsetting criteria in AASB 132 'Financial Instruments: Presentation', by clarifying the
meaning of 'currently has a legally enforceable right of set-off'; and clarifies that some gross settlement systems may be
considered to be equivalent to net settlement.
AASB 2013-3 Amendments to AASB 136 - Recoverable Amount Disclosures for Non-Financial Assets
The consolidated entity has applied AASB 2013-3 from 1 July 2014. The disclosure requirements of AASB 136 'Impairment
of Assets' have been enhanced to require additional information about the fair value measurement when the recoverable
amount of impaired assets is based on fair value less costs of disposals. Additionally, if measured using a present value
technique, the discount rate is required to be disclosed.
AASB 2014-1 Amendments to Australian Accounting Standards (Parts A to C)
The consolidated entity has applied Parts A to C of AASB 2014-1 from 1 July 2014. These amendments affect the following
standards: AASB 2 'Share-based Payment': clarifies the definition of 'vesting condition' by separately defining a 'performance
condition' and a 'service condition' and amends the definition of 'market condition'; AASB 3 'Business Combinations': clarifies
that contingent consideration in a business combination is subsequently measured at fair value with changes in fair value
recognised in profit or loss irrespective of whether the contingent consideration is within the scope of AASB 9; AASB 8
'Operating Segments': amended to require disclosures of judgements made in applying the aggregation criteria and clarifies
that a reconciliation of the total reportable segment assets to the entity's assets is required only if segment assets are reported
regularly to the chief operating decision maker; AASB 13 'Fair Value Measurement': clarifies that the portfolio exemption
applies to the valuation of contracts within the scope of AASB 9 and AASB 139; AASB 116 'Property, Plant and Equipment'
and AASB 138 'Intangible Assets': clarifies that on revaluation, restatement of accumulated depreciation will not necessarily
be in the same proportion to the change in the gross carrying value of the asset; AASB 124 'Related Party Disclosures':
extends the definition of 'related party' to include a management entity that provides KMP services to the entity or its parent
and requires disclosure of the fees paid to the management entity; AASB 140 'Investment Property': clarifies that the
acquisition of an investment property may constitute a business combination.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of available-for-sale financial assets, financial assets and liabilities at fair value through profit or loss, investment
properties, certain classes of property, plant and equipment and derivative financial instruments.
20
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 2.
Going Concern
This financial report has been prepared on a going concern basis as the Directors consider that the company and the
consolidated entity will be able to realise its assets and settle its liabilities in the normal course of business and at amounts
stated in the financial report. The continuation of the company and the consolidated entity as a going concern is dependent
on their ability to achieve the following objectives:
Capital raising.
Development and exploitation of the coal tenements.
Realisation of surplus assets.
The company has entered into Subscription Agreements with Bentley Resources Pte Ltd and Trepang Services Pty Ltd as
announced to the ASX on 27 August 2015. The agreements include provisions that subject to shareholder approval at a
general meeting to be held on 30 October 2015 the company will place 3.3 million fully paid ordinary shares to raise a total
of $13.2 million before costs. (Placement Resolutions) These funds have been received and are currently being held in
escrow with the company’s solicitors pending approval of the placements at the company’s general meeting. As a condition
precedent to the proposed placement the company is also undertaking a 1:1 non-renounceable rights issue (Rights Issue)
to raise up to $1.54 million before costs. The Rights Issue will open on 6 October 2015 with the new shares taken up under
the offer expected to be issued on 23 October 2015.
At the time of signing this report, the outcome of the Rights Issue and shareholder approval of the Placement Resolutions
are unknown. In making their assessment of the ability of the company to continue as a going concern, directors and
management have evaluated the likely outcome of both the Rights Issue and the Placement Resolutions. They have
concluded that while conditions for material uncertainty exist, which may cast significant doubt on the consolidated entity’s
ability to continue as a going concern, there is a reasonable expectation that the Rights Issue and the Placement
Resolutions will result in the company raising sufficient capital to enable it to continue as a going concern.
Should the anticipated capital raisings not generate the expected cash flows, the company may not be able to pay its debts
as and when they become due and payable and it may be required to realise assets and extinguish liabilities other than in
the ordinary course of business and at amounts different from those stated in the financial statements. This report does not
include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of
liabilities that might be necessary should the company and the consolidated entity not continue as going concerns.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 28.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Australian Pacific Coal
Limited ('company' or 'parent entity') as at 30 June 2015 and the results of all subsidiaries for the year then ended. Australian
Pacific Coal Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
21
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity.
Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit
balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity and the revenue can
be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.
Sale of goods
Revenue from the sale of goods is recognised at the point of sale, which is where the customer has taken delivery of the
goods, the risks and rewards are transferred to the customer and there is a valid sales contract. Amounts disclosed as
revenue are net of sales returns and trade discounts.
Rendering of services
Rendering of services revenue is recognised by reference to the stage of completion of the contracts.
Stage of completion is measured by reference to the stage of completion for each contract. Where the contract outcome
cannot be reliably estimated, revenue is only recognised to the extent of the recoverable costs incurred to date.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
● When the deferred income tax asset or liability arises from the initial recognition of goodwill or 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 nor
taxable profits; or
● When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
22
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Australian Pacific Coal Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group
continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the 'separate
taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of the tax
consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a
contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Discontinued operations
A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as held for sale
and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan
to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The
results of discontinued operations are presented separately on the face of the statement of profit or loss and other
comprehensive income.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting
period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer
the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement
of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days.
23
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written
off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective
evidence that the consolidated entity will not be able to collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade
receivable may be impaired. The amount of the impairment allowance is the difference between the asset's carrying amount
and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to
short-term receivables are not discounted if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
Inventories
Inventories are stated at the lower of cost and net realisable value on a 'first in first out' basis. Cost comprises direct materials
and delivery costs, direct labour, import duties and other taxes, an appropriate proportion of variable and fixed overhead
expenditure based on normal operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity.
Costs of purchased inventory are determined after deducting rebates and discounts received or receivable.
The cost of mining stocks includes direct materials, direct labour, transportation costs and variable and fixed overhead osts
relating to mining activities.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement. Investments in joint ventures are accounted for using the equity method. Under the equity method,
the share of the profits or losses of the joint venture is recognised in profit or loss and the share of the movements in equity
is recognised in other comprehensive income. Investments in joint ventures are carried in the statement of financial position
at cost plus post-acquisition changes in the consolidated entity's share of net assets of the joint venture. Goodwill relating to
the joint venture is included in the carrying amount of the investment and is neither amortised nor individually tested for
impairment. Income earned from joint venture entities reduce the carrying amount of the investment.
Joint operations
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. The consolidated entity has recognised its share of
jointly held assets, liabilities, revenues and expenses of joint operations. These have been incorporated in the financial
statements under the appropriate classifications.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. They are subsequently measured at either
amortised cost or fair value depending on their classification. Classification is determined based on the purpose of the
acquisition and subsequent reclassification to other categories is restricted.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are either: i) held for trading, where they are acquired for the purpose of
selling in the short-term with an intention of making a profit; or ii) designated as such upon initial recognition, where they are
managed on a fair value basis or to eliminate or significantly reduce an accounting mismatch. Except for effective hedging
instruments, derivatives are also categorised as fair value through profit or loss. Fair value movements are recognised in
profit or loss.
24
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets, principally equity securities, that are either designated
as available-for-sale or not classified as any other category. After initial recognition, fair value movements are recognised in
other comprehensive income through the available-for-sale reserve in equity. Cumulative gain or loss previously reported in
the available-for-sale reserve is recognised in profit or loss when the asset is derecognised or impaired.
Impairment of financial assets
The consolidated entity assesses at the end of each reporting period whether there is any objective evidence that a financial
asset or group of financial assets is impaired. Objective evidence includes significant financial difficulty of the issuer or
obligor; a breach of contract such as default or delinquency in payments; the lender granting to a borrower concessions due
to economic or legal reasons that the lender would not otherwise do; it becomes probable that the borrower will enter
bankruptcy or other financial reorganisation; the disappearance of an active market for the financial asset; or observable
data indicating that there is a measurable decrease in estimated future cash flows.
The amount of the impairment allowance for financial assets carried at cost is the difference between the asset's carrying
amount and the present value of estimated future cash flows, discounted at the current market rate of return for similar
financial assets.
Available-for-sale financial assets are considered impaired when there has been a significant or prolonged decline in value
below initial cost. Subsequent increments in value are recognised in other comprehensive income through the available-for-
sale reserve.
Property, plant and equipment
Land and buildings are shown at fair value, based on periodic, at least every 3 years, valuations by external independent
valuers, less subsequent depreciation and impairment for buildings. The valuations are undertaken more frequently if there
is a material change in the fair value relative to the carrying amount. Any accumulated depreciation at the date of revaluation
is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the
asset. Increases in the carrying amounts arising on revaluation of land and buildings are credited in other comprehensive
income through to the revaluation surplus reserve in equity. Any revaluation decrements are initially taken in other
comprehensive income through to the revaluation surplus reserve to the extent of any previous revaluation surplus of the
same asset. Thereafter the decrements are taken to profit or loss.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Buildings
Leasehold improvements
Plant and equipment
Plant and equipment under lease
25 years
5 years
2 ½ to 10 years
5 to 8 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or
the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and
requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets
and the arrangement conveys a right to use the asset.
25
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the
risks and benefits incidental to the ownership of leased assets, and operating leases, under which the lessor effectively
retains substantially all such risks and benefits.
Finance leases are capitalised. A lease asset and liability are established at the fair value of the leased assets, or if lower,
the present value of minimum lease payments. Lease payments are allocated between the principal component of the lease
liability and the finance costs, so as to achieve a constant rate of interest on the remaining balance of the liability.
Leased assets acquired under a finance lease are depreciated over the asset's useful life or over the shorter of the asset's
useful life and the lease term if there is no reasonable certainty that the consolidated entity will obtain ownership at the end
of the lease term.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight-line basis
over the term of the lease.
Exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried
forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through
the successful development and exploitation of an area of interest, or by its sale; or exploration activities are continuing in
an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of
economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred
thereon is written off in the year in which the decision is made.
Mining assets
Capitalised mining development costs include expenditures incurred to develop new resource areas to define further
mineralisation in existing resources areas, to expand the capacity of a mine and to maintain production. Mining development
also includes costs transferred from exploration and evaluation phase once production commences in the area of interest.
Amortisation of mining development is computed by the units of production basis over the estimated proved and probable
reserves. Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can
be recovered in the future from known mineral deposits. These reserves are amortised from the date on which production
commences. The amortisation is calculated from recoverable proven and probable reserves and a predetermined percentage
of the recoverable measured, indicated and inferred resource. This percentage is reviewed annually.
Restoration costs expected to be incurred are provided for as part of development phase that give rise to the need for
restoration.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in
the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or
period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 10 years.
26
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement
of financial position, net of transaction costs.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months
of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
The consolidated entities obligations for short-term employee benefits are recognised as current trade and other payables
in the statement of financial position.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured as the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
27
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
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.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated
entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest
in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount
is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
28
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Australian Pacific Coal Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission,
relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Class Order to the nearest
dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2015. The consolidated
entity's assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
consolidated entity, are set out below.
29
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 1. Significant accounting policies (continued)
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard replaces all
previous versions of AASB 9 and completes the project to replace IAS 39 'Financial Instruments: Recognition and
Measurement'. AASB 9 introduces new classification and measurement models for financial assets. A financial asset shall
be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect
contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets
are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial
recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income
('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own
credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting
requirements are intended to more closely align the accounting treatment with the risk management activities of the entity.
New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be
measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since
initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The
consolidated entity will adopt this standard from 1 July 2018 but the impact of its adoption is yet to be assessed by the
consolidated entity.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2017. The standard provides a single
standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied)
to be identified, together with the separate performance obligations within the contract; determine the transaction price,
adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance
obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no
distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be
presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be
satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the
service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied
over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised
as the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial
position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's
performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to
understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and
any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated entity will adopt this
standard from 1 July 2017 but the impact of its adoption is yet to be assessed by the consolidated entity.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of
provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection rates
and specific knowledge of the individual debtors financial position.
30
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. Costs incurred in or
benefits of the extraction and production process are accumulated as stockpiles and product inventory. The level of the
provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that
affect inventory obsolescence.
Fair value measurement hierarchy
The consolidated entity is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices
(unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;
and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant
to fair value and therefore which category the asset or liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable
inputs.
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are
less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will
be written off or written down.
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment, whether
goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy
stated in note 1. The recoverable amounts of cash-generating units have been determined based on value-in-use
calculations. These calculations require the use of assumptions, including estimated discount rates based on the current
cost of capital and growth rates of the estimated future cash flows.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may
lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
Rehabilitation provision
Where material, a provision may be made for the present value of anticipated costs for future rehabilitation of land explored
or mined. The consolidated entity's mining and exploration activities are subject to various laws and regulations governing
the protection of the environment. The consolidated entity recognises management's best estimate for assets retirement
obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could
differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates
and discount rates could affect the carrying amount of this provision.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence commercial
production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources.
Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related
to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only
capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest.
Factors that could impact the future commercial production at the mine include the level of reserves and resources, future
technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the
extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which
this determination is made.
31
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 3. Operating segments
Identification of reportable operating segments
The consolidated entity is organised into two operating segments based on resource category: exploration and evaluation,
and bentonite mining. These operating segments are based on the internal reports that are reviewed and used by the Board
of Directors (who are identified as the Chief Operating Decision Makers (“CODM”)) in assessing performance and
determining the allocation of resources. There is no aggregation of operating segments.
The CODM reviews segment receipts and expenditure for each operating segment at each board meeting. The accounting
policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
Types of products and services by segment
The principal products and services of each of these operating segments are as follows:
Exploration and evaluation
The exploration and evaluation segment seeks to identify prospective resource areas,
secure tenure over the relevant tenements and manage the exploration and evaluation
process.
The bentonite mining segment mines bentonite for sale.
Bentonite Mining
Intersegment transactions
Intersegment transactions are made at market rates. Intersegment transactions are eliminated on consolidation.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable
that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are
eliminated on consolidation.
32
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 3. Operating segments (continued)
Operating segment information
Consolidated - 2015
Revenue
Sales to external customers
Interest revenue
Total sales revenue
Other revenue
Total revenue
Segment net profit from continuing
operations before tax
Net profit from continuing operations
before tax
Amounts included in segment result and
reviewed by the board:
- depreciation and amortisation
- impairment of exploration and evaluation
- impairment of loans receivable
- impairment of investments
- exploration and evaluation
- capitalised exploration expensed on
surrender of tenement
Assets
Segment assets
Included in segment assets are:
Cash and cash equivalents
Property, plant and equipment
Capitalised exploration and evaluation
Other assets
Total assets
Total assets includes:
Investments in associates
Acquisition of non-current assets
Liabilities
Segment liabilities
Total liabilities
Exploration
and
evaluation
$
Bentonite
Unallocated
Total
mining
$
$
$
$
15,000
8
15,008
-
15,008
-
1
1
120,705
120,706
-
6,721
6,721
-
6,721
(538,985)
69,681
(1,453,258)
-
1,350
-
74,000
17,434
17,628
(2,000)
-
-
32,414
13,031
109,170
-
-
424,335
-
-
-
-
2,440,667
51,340
-
130,883
-
18,377
101,201
6,336
-
113,708
-
153,135
-
-
-
6,950
210,511
3,298
1,519,127
15,000
6,730
21,730
120,705
142,435
(1,922,562)
(1,922,562)
30,659
(650)
109,170
74,000
49,848
424,335
102,201
137,169
2,440,667
183,425
2,862,462
-
160,085
1,732,936
1,732,936
33
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 3. Operating segments (continued)
Consolidated - 2014
Revenue
Sales to external customers
Interest revenue
Total sales revenue
Total revenue
Segment net profit from continuing
operations before tax
Net profit from continuing operations
before tax
Amounts included in segment result and
reviewed by the board:
- depreciation and amortisation
- impairment of exploration and evaluation
- impairment of loans receivable
- impairment of investments
Assets
Segment assets
Included in segment assets are:
Cash and cash equivalents
Property, plant and equipment
Capitalised exploration and evaluation
Available-for-sale financial assets
Other assets
Total assets
Total assets includes:
Investments in associates
Acquisition of non-current assets
Liabilities
Segment liabilities
Total liabilities
Exploration
and
evaluation
$
Bentonite
Unallocated
Total
mining
$
$
$
$
-
2
2
2
7,664
3
7,667
7,667
-
16,551
16,551
16,551
(104,776)
(88,169)
(1,597,547)
62,179
-
26,000
34,285
8,992
-
-
14,065
-
181,950
-
-
-
2,741,917
74,000
110,671
2,926,588
-
804,196
-
160,359
-
-
28,188
188,547
451,226
25,089
-
-
205,243
681,558
-
-
-
5,868
325,671
3,409
1,153,501
7,664
16,556
24,220
24,220
(1,790,492)
(1,790,492)
48,350
71,171
181,950
26,000
451,226
185,448
2,741,197
74,000
795,328
3,796,693
-
810,064
1,482,581
1,482,451
34
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 4. Revenue (continued)
Note 4. Revenue
From continuing operations
Sales revenue
Sale of bentonite
Other revenue
Interest
Revenue from continuing operations
Note 5. Other income
Net gain on disposal of property, plant and equipment
Other income
Note 6. Expenses
Profit before income tax from continuing operations includes the following specific expenses:
Cost of sales
Cost of sales
Depreciation
Land and buildings
Leasehold improvements
Plant and equipment
Total depreciation
35
Consolidated
2015
$
2014
$
-
-
7,664
7,664
6,730
6,730
16,556
16,556
6,730
24,220
Consolidated
2015
$
2014
$
120,705
120,705
-
-
Consolidated
2015
$
2014
$
-
20,757
5,957
6,066
18,636
5,957
772
41,621
30,659
48,350
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 6. Expenses (continued)
Rental expense relating to operating leases
Minimum lease payments
Superannuation expense
Defined contribution superannuation expense
Note 7. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit/(Loss) before income tax expense from continuing operations
Profit/(Loss) before income tax expense from discontinued operations
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Depreciation and amortisation
Other non-allowable items
Write downs to recoverable amounts
Other allowable items
Tax losses and temporary differences not brought to account
Income tax expense
Note 8. Current assets - cash and cash equivalents
Cash on hand
Cash at bank and on hand
Cash on deposit
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows as follows:
Balances as above
Balance as per statement of cash flows
36
Consolidated
2015
$
2014
$
133,967
127,514
4,170
3,529
Consolidated
2015
$
2014
$
(1,922,562)
-
(1,790,492)
-
(1,922,562)
(1,790,492)
(576,769)
(537,148)
9,198
129,073
55,146
(61,303)
(444,655)
14,505
2,875
83,736
(571,844)
(1,007,876)
444,655
1,007,876
-
-
Consolidated
2015
$
2014
$
51,201
50,000
401,226
50,000
101,201
451,226
101,201
451,226
101,201
451,226
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 9. Current assets - trade and other receivables
Trade receivables
Other receivables
Consolidated
2015
$
2014
$
-
17,389
4,800
97,789
17,389
102,589
Impairment of receivables
The consolidated entity has recognised a loss of $Nil (2014: $Nil) in profit or loss in respect of impairment of current
receivables for the year ended 30 June 2015.
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $Nil as at 30 June 2015
($Nil as at 30 June 2014).
The consolidated entity did not consider a credit risk on the aggregate balances after reviewing the credit terms of customers
based on recent collection practices.
Note 10. Current assets - other
Prepayments
Note 11. Non-current assets - receivables
Amounts receivable from related parties
-
-
-
-
loans to directors
loans to directors – provision for impairment
loans to key management personnel
loans to key management personnel – provision for impairment
Other receivables
Other receivables – provision for impairment
Consolidated
2015
$
2014
$
28,180
27,867
28,180
27,867
Consolidated
2015
$
2014
$
551,848
(545,118)
28,950
(28,350)
381,993
(318,550)
551,848
(484,548)
28,950
(22,950)
331,113
(275,350)
70,773
129,063
Impairment of receivables
The consolidated entity has recognised a loss of $109,170 (2014: $181,950) in profit or loss in respect of impairment of non-
current receivables for the year ended 30 June 2015. Non-current receivables are assessed for recoverability based on the
underlying terms of the contract. A provision for impairment is recognised when there is objective evidence that an individual
receivable is impaired. These impairment amounts have been included in the income statements.
37
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 11. Non-current assets - receivables (continued)
The ageing of the impaired receivables provided for above are as follows:
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Movements in the provision for impairment of receivables are as follows:
Opening balance
Additional provisions recognised
Closing balance
Consolidated
2015
$
2014
$
892,018
-
-
782,848
-
-
892,018
782,848
Consolidated
2015
$
2014
$
782,848
109,170
600,898
181,950
892,018
782,848
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $58,643 as at 30 June 2015
($7,763 as at 30 June 2014).
The consolidated entity did not consider a credit risk on the aggregate balances after reviewing the credit terms of customers
based on recent collection practices.
The ageing of the past due but not impaired receivables are as follows:
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Consolidated
2015
$
2014
$
58,643
-
-
7,763
-
-
58,643
7,763
38
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 12. Non-current assets - available-for-sale financial assets
Unlisted ordinary shares
Reconciliation
Reconciliation of the fair values at the beginning and end of the current financial year are set
out below:
Opening fair value
Less: Impairment
Closing fair value
Refer to note 21 for further information on fair value measurement.
Note 13. Non-current assets - property, plant and equipment
Land and buildings - at cost
Less: Accumulated depreciation
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
2015
$
2014
$
-
74,000
74,000
(74,000)
100,000
(26,000)
-
74,000
Consolidated
2015
$
2014
$
148,924
(36,248)
112,676
19,803
(19,803)
-
148,924
(30,291)
118,633
14,403
(13,737)
666
247,856
(223,363)
24,493
609,444
(543,295)
66,149
137,169
185,448
39
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 13. Non-current assets - property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2013
Additions
Disposals
Depreciation expense
Balance at 30 June 2014
Additions
Disposals
Depreciation expense
Balance at 30 June 2015
Land and
buildings
$
Leasehold
Plant and
improvements equipment
$
$
Plant
under lease
$
Total
$
124,590
-
-
(5,957)
118,633
-
-
(5,957)
112,676
1,438
-
-
(772)
666
5,400
-
(6,066)
102,283
5,868
(381)
(41,621)
66,149
1,550
(24,570)
(18,636)
-
24,493
-
-
-
-
-
-
-
-
228,311
5,868
(381)
(48,350)
185,448
6,950
(24,570)
(30,659)
137,169
Note 14. Non-current assets - exploration and evaluation
Exploration and evaluation - at cost
Consolidated
2015
$
2014
$
2,440,667
2,741,917
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2013
Additions
Impairment
Balance at 30 June 2014
Additions
Impairment
Disposals
Tenements surrendered
Balance at 30 June 2015
Exploration
and
evaluation
$
Total
$
2,008,892
804,196
(71,171)
2,008,892
804,196
(71,171)
2,741,917
153,135
650
(30,700)
(424,335)
2,741,917
153,135
650
(30,700)
(424,335)
2,440,667
2,440,667
40
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 15. Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss
Tax losses: operating losses
Tax losses: capital losses
Deferred tax assets not brought to account
Deferred tax asset
Consolidated
2015
$
2014
$
79,501
9,309,837
1,173,396
399,959
8,865,183
1,173,396
10,562,734 10,438,538
-
-
The benefit of deferred tax assets will only be realised if the conditions for deductibility set out in note 1 occur.
Note 16. Non-current assets - other
Consolidated
2015
$
2014
$
67,083
84,583
Consolidated
2015
$
2014
$
291,536
1,381,400
560,501
747,080
1,672,936
1,307,581
Consolidated
2015
$
2014
$
60,000
175,000
60,000
175,000
Security deposits
Note 17. Current liabilities - trade and other payables
Trade payables
Other payables
Refer to note 20 for further information on financial instruments.
Note 18. Current liabilities - borrowings
Convertible security
41
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 19. Equity - issued capital
Consolidated
2015
Shares
2014
Shares
2015
$
2014
$
Ordinary shares - fully paid
300,940,869 920,897,748 37,695,544 36,957,568
Movements in ordinary share capital
Details
Balance
Date
No of shares Issue price
$
01/07/2013
662,695,879
35,239,172
22/07/2013
Issue of shares for Share Purchase Plan
25/07/2013
Issue of shares for cash
02/07/2013
Issue of shares for services
Issue of shares for cash
27/08/2013
Issue of shares on conversion of convertible security 12/09/2013
16/09/2013
Issue of shares for services
18/09/2013
Issue of shares for cash
14/10/2013
Issue of shares for services
25/10/2013
Issue of shares for cash
26/11/2013
Issue of shares for cash
17/01/2014
Issue of shares for cash
19/02/2014
Issue of shares for cash
21/03/2014
Issue of shares for cash
22/04/2014
Issue of shares for cash
22/05/2014
Issue of shares for cash
20/06/2014
Issue of shares for cash
Issue of shares for services
20/06/2014
Share issue transaction costs, net of tax
Total for the year
Balance
30/06/2014
Issue of shares for cash
22/07/2014
Issue of shares for cash
21/08/2014
Issue of shares for services
18/09/2014
09/10/2014
Issue of shares for Share Purchase Plan
Issue of shares on conversion of convertible security 10/10/2014
Total pre-consolidation shares on issue
Total post-consolidation shares on issue
05/12/2014
Issue of shares for cash
Issue of shares for services
19/12/2014
Issue of shares on conversion of convertible security 21/01/2015
Issue of shares on conversion of convertible security 20/02/2015
13/03/2015
Issue of shares for services
Issue of shares on conversion of convertible security 11/05/2015
Issue of shares on conversion of convertible security 20/05/2015
Issue of shares for services
18/06/2015
Share issue transaction costs, net of tax
Total for the year
57,525,000
12,500,000
3,500,000
14,285,714
21,428,571
992,064
10,000,000
992,063
11,111,111
14,285,714
20,000,000
15,000,000
15,000,000
18,750,000
18,750,000
18,750,000
5,331,632
920,897,748
33,333,333
16,666,667
10,214,285
58,879,650
25,000,000
1,064,991,683
212,998,537
10,000,000
3,931,102
10,000,000
16,666,667
7,411,229
16,666,667
16,666,667
6,600,000
$0.010
$0.008
$0.009
$0.007
$0.007
$0.0126
$0.010
$0.0126
$0.009
$0.007
$0.005
$0.005
$0.005
$0.004
$0.004
$0.004
$0.0049
575,250
100,000
31,500
100,000
150,000
12,500
100,000
12,500
100,000
100,000
100,000
75,000
75,000
75,000
75,000
75,000
26,125
(64,479)
1,718,396
$0.003
$0.003
$0.0049
$0.0032
$0.002
36,957,568
100,000
50,000
50,050
188,415
50,000
$0.006
$0.0127
$0.004
$0.003
$0.0038
$0.003
$0.003
$0.004
60,000
49,925
40,000
50,000
28,450
50,000
50,000
26,400
(55,264)
737,976
Balance
30/06/2015
300,940,869
37,695,544
At the Company's Annual General Meeting held on 24 November 2014 shareholders approved a one for five share
consolidation of all ordinary shares issued. The numbers of ordinary shares issued and equity securities ("Shares") shown
from 24 November 2014 are stated on a post-consolidation basis.
42
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 19. Equity - issued capital (continued)
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the current company's share price at the time of the investment. The consolidated entity is not actively
pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to
maximise synergies.
The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all
capital risk management decisions. There have been no events of default on the financing arrangements during the financial
year.
The capital risk management policy remains unchanged from the 30 June 2014 Annual Report.
Note 20. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including price risk and interest rate
risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity.
The consolidated entity uses different methods to measure different types of risk to which it is exposed. These methods
include sensitivity analysis in the case of interest rate and other price risks, ageing analysis for credit.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the consolidated entity's
operating units. Finance reports to the Board on a monthly basis.
Market risk
Price risk
The consolidated entity is not currently exposed to price risk.
Interest rate risk
The consolidated entity's main interest rate risk arises from short-term bank deposits. Deposits held at variable rates expose
the consolidated entity to interest rate risk. Deposits held at fixed rates expose the consolidated entity to fair value risk. The
policy is to maintain 100% of short-term deposits in variable rate bank deposits.
43
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 20. Financial instruments (continued)
An official increase/decrease in interest rates of 100 (2014: 100) basis points would have an adverse/favourable effect on
profit before tax of $3,365 (2014: $4,438) per annum.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. Credit risk is managed through the maintenance of procedures (such procedures include the utilisation
of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and
monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that
customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing
receivables for impairment. Depending on the division within the Group, credit terms are generally 14 to 30 days from the
invoice date. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount,
net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements. The consolidated entity does not hold any collateral.
The consolidated entity has no significant concentration of credit risk with any single counterparty or group of counterparties.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
The consolidated entity has no available borrowing facilities at the reporting date.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2015
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Borrowings
Consolidated - 2014
Non-derivatives
Non-interest bearing
Trade payables
Other payables
Borrowings
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-%
-%
-%
291,536
1,381,400
60,000
-
-
-
-
-
-
-
-
-
-
-
-
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-%
-%
-%
560,501
747,080
175,000
1,482,581
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
44
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 20. Financial instruments (continued)
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 21. Fair value measurement
Fair value hierarchy
Fair value is measured or disclosed using a three level hierarchy, based on the lowest level of input that is significant to the
entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2015
Assets
Non-current assets - receivables
Ordinary shares available-for-sale
Total assets
Consolidated - 2014
Assets
Non-current assets - receivables
Ordinary shares available-for-sale
Total assets
Level 1
$
Level 2
$
Level 3
$
Total
$
70,773
-
70,773
-
-
-
Level 1
$
Level 2
$
Level 3
$
129,063
-
129,063
-
74,000
74,000
-
-
-
-
-
-
70,773
-
70,773
Total
$
129,063
74,000
74,000
Assets and liabilities held for sale are measured at fair value on a non-recurring basis.
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2 and level 3
The directors have determined that the fair values of the existing available-for-sale financial assets carried at cost and at
recoverable amount cannot be reliably measured. The directors have made an estimate of the fair value at the end of the
reporting period based on the reported financial results of the underlying investment. There is no active market for these
investments, and there is no present intention to dispose of these investments.
These available-for-sale financial assets are represented by the company’s holding of 1,000,000 ordinary shares in Scott
Creek Coal Limited. The shares were acquired on as part settlement for the sale of tenement EPC1548 on 2 April 2013 at
an acquisition cost of $100,000.
45
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 22. Key management personnel disclosures
Compensation
The aggregate compensation paid or payable to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Note 23. Remuneration of auditors
Consolidated
2015
$
2014
$
797,500
-
-
-
773,073
-
-
-
797,500
773,073
During the financial year the following fees were paid or payable for services provided by Sothertons L.L.P. Chartered
Accountants, the auditor of the company:
Audit services - Sothertons L.L.P. Chartered Accountants
Audit or review of the financial statements
Consolidated
2015
$
2014
$
60,995
60,995
60,995
60,995
Note 24. Contingent assets
Rio Tinto Exploration, Option and Joint Venture Agreement
Australian Pacific Coal Limited and its 100% owned subsidiary Area Coal Pty Ltd (“Area Coal”) entered into an Exploration,
Option and Joint Venture Agreement with Rio Tinto Exploration Pty Ltd (“Rio Tinto”) (“Rio Tinto JV”) executed on 22 August
2011. The Rio Tinto JV covered four of the Area Coal’s tenements, with key terms including:
Area Coal transfers three tenements (EPC 1645, EPC 1773 and EPC 1867) to Rio Tinto;
Rio Tinto makes an initial payment to the company of $2.3 million;
Area Coal retains ownership of (EPC 1824); and
Prior to the expiry of Rio Tinto’s commitment period under the Rio Tinto JV, Rio Tinto was able to exercise an option
to acquire a 75% interest in EPC 1824 for a specified sum. On exercise of the option the agreement then provided the
company with a number of additional options for the further sale to Rio Tinto of its remaining 25% or for continued
participation in a joint venture. If Rio Tinto does not exercise it their option, ownership of all the transferred tenements
reverts to Area Coal.
Rio Tinto’s commitment period expired on 23 August 2015 and it formally terminated the Rio Tinto JV. Consequently Rio
Tinto is obliged to return all of their interests in the three tenements that had been transferred to it, including exploration
data, to Area Coal. The company will continue the exploration of the Mt Hillalong project areas.
Note 25. Contingent liabilities
The company’s 100% owned subsidiary Felix St Pty Ltd has given a bank guarantee as at 30 June 2015 of $50,000 (2014:
$50,000) to its landlord. The bank guarantee expired on 1 August 2015.
46
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 26. Commitments
Exploration and evaluation expenditure commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
One to five years
More than five years
Consolidated
2015
$
2014
$
347,717
1,231,807
-
950,851
1,983,918
-
1,579,524
2,934,769
6,168
11,308
-
109,933
-
-
17,476
109,933
Operating lease commitments includes contracted amounts for various mining tenement leases, office premises and plant
and equipment under non-cancellable operating leases expiring within one to ten years with, in some cases, options to
extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
Note 27. Related party transactions
Parent entity
Australian Pacific Coal Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 29.
Key management personnel
Disclosures relating to key management personnel are set out in note 27 and the remuneration report in the directors' report.
Transactions with related parties
Other than key management personnel compensation disclosed in the Remuneration Report, there have been no
transactions between the consolidated entity and related parties.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current trade payables - for unpaid directors fees and consulting fees payable:
Peter Ziegler & Co Pty Ltd (director-related entity of Peter Ziegler)
Moray Holdings (Qld) Pty Ltd (director-related entity of Paul Byrne)
Paul Ingram
Paul Ryan
Loans to/from related parties
Consolidated
2015
$
2014
$
641,540
565,860
87,000
87,000
345,860
299,220
51,000
51,000
47
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 26. Related party transactions (continued)
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Non-current loans receivable:
Mr. Peter Ziegler
Mr. Paul Byrne
Mr. Paul Ingram
Mr. Kevin Mischewski
Consolidated
2015
$
2014
$
121,500
165,848
264,500
28,950
121,500
165,848
264,500
28,950
The company has previously issued ordinary shares to key management personnel in accordance with the Company’s
Officers, Executives, Consultants and Employee Share Plan. The terms of the plan enabled the company to fund the
purchase by way of limited-recourse loans repayable from future dividends or out of proceeds when the allotted shares are
sold. Collateral is held by way of security over the shares issued. The shares are subject to a trading lock preventing disposal
of the shares prior to the respective holders making suitable arrangements for repayment of any outstanding amounts
payable on the associated loans. Interest is not payable.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates unless otherwise stated.
Note 28. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Total comprehensive income
Parent
2015
$
2014
$
(1,354,837)
(1,792,023)
(1,354,837)
(1,792,023)
48
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 28. Parent entity information (continued)
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Revaluation surplus reserve
Available-for-sale reserve
Hedging reserve - cash flow hedges
Retained profits
Total equity
Parent
2015
$
2014
$
79,557
438,906
464,402
496,776
518,463
961,178
1,682,595
1,508,450
1,682,595
1,508,450
37,695,544 36,957,568
(38,859,676) (37,504,840)
(1,164,132)
(547,272)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity has not entered into any guarantees, in the current or previous financial year, in relation to the debts of its
subsidiaries.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2015 and 30 June 2014.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2015 and 30 June 2014.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except
for the following:
● Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
49
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 29. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries
in accordance with the accounting policy described in note 1:
Name
Area Coal Pty Ltd
Mining Investments One Pty Ltd
Mining Investments Two Pty Ltd
Mining Investments Three Pty Ltd
Mining Investments Four Pty Ltd
Mining Investments Six Pty Ltd
Ipoh Pacific Resources Pty Ltd
Kokstad Mining Pty Ltd
Felix St Pty Ltd
IPR Operations Pty Ltd
Ipoh Pacific Pty Ltd
Inter-Medteq Pty Ltd
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2014
2015
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries with non-
controlling interests in accordance with the accounting policy described in note 1:
Principal place of
business /
Country of
incorporation
Ownership
interest
2015
%
Principal activities
Ownership
interest
2014
%
Parent
Non-controlling interest
Ownership
interest
2014
%
Ownership
interest
2015
%
Australia
Dormant
50.00%
50.00%
50.00%
50.00%
Australia
Dormant
50.00%
50.00%
50.00%
50.00%
Name
Medteq Holdings
Pty Ltd *
Medteq Innovations
Pty Ltd **
*
The consolidated entity is required to make all of the financial and operating policy decisions of Medteq Holdings Pty Ltd.
The non-controlling interests of Medteq Holdings Pty Ltd are not material to the consolidated entity.
** The consolidated entity is required to make all of the financial and operating policy decisions of Medteq Innovations Pty
Ltd. The non-controlling interests of Medteq Innovations Pty Ltd are not material to the consolidated entity.
50
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 30. Events after the reporting period
On 22 July 2015 the Company completed a placement of 54 million shares at 0.4 cents per share for a total cash
consideration of $216,000.
On 29 July 2015 the Company announced that it had executed a binding term sheet with two cornerstone investors,
Bentley Resources Pte Ltd and Trepang Services Pty Ltd to place 3.3 million fully paid ordinary shares at $0.004 per share
to raise a total of $13.2 million before costs. The proposed placements are subject to regulatory and shareholder approval.
The company also advised on 29 July 2015 that it will undertake a non-renounceable entitlements issue to raise up to 1.42
million before costs. Shareholders will be entitled to acquire one new ordinary share for every one ordinary share held at
the record date at an issue price of $0.004 per new share. Due to a subsequent issuance of shares the entitlements issue
has been increased to an amount up to $1.54 million before costs.
On 3 August 2015 the company issued 30 million shares on conversion of the remaining $60,000 of the outstanding
convertible security held by the Australian Special Opportunity Fund LP.
The notification period for the Exploration, Option and Joint Venture Agreement with Rio Tinto Exploration Pty Ltd expired
on 23 August 2015 and it formally terminated the Rio Tinto JV. Consequently Rio Tinto is obliged to return all of their
interests in the three tenements that had been transferred to it, including exploration data to the company’s 100% owned
subsidiary Area Coal Pty Ltd.
On 27 August 2015 the company announced that it had executed subscription agreements with Bentley Resources Pte Ltd
and Trepang Services Pty Ltd to place 3.3 million fully paid ordinary shares at $0.004 per share to raise a total of $13.2
million before costs. Pursuant to the agreement the funds to be raised have been deposited into an escrow account
operated by the company’s lawyers HopgoodGanim, for settlement of the placement in accordance with the terms of the
agreement.
On 9 September 2015 the company announced that it had entered into a convertible loan deed with Bentley Resources Pte
Ltd and Trepang Services who had agreed to the early release of $200,000 from the $13.2 million funds being held in
escrow in accordance with the terms of the Subscription Agreements and the proposed placements to Bentley and
Trepang.
On 24 September the company announced an Extraordinary General Meeting to be held on 30 October 2015
On 25 September 2015 the company released the Rights Issue Offer Document in accordance with the proposed
entitlements issue announced on 29 July 2015. The entitlement issue will be a non-renounceable rights issue to eligible
shareholders, on the basis of 1 new fully paid ordinary share for every 1 share held at an issue price of $0.004 per share
(New Share), to raise approximately $1,539,763.48 (before costs) (Rights Issue). Under the Rights Issue, 384,940,869
New Shares will be offered.
51
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 31. Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
(1,922,562)
(1,790,942)
Consolidated
2015
$
2014
$
Adjustments for:
Sale of interest in tenements
Depreciation and amortisation
Impairment of non-current assets
Net gain on disposal of non-current assets
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease in inventories
Increase in prepayments
Decrease/(increase) in other operating assets
Increase/(decrease) in trade and other payables
(15,000)
30,659
528,385
(117,423)
143,490
-
(313)
-
455,678
-
48,350
279,291
381
(88,679)
-
-
626
475,249
Net cash from operating activities
(897,086)
(1,075,444)
Note 32. Non-cash investing and financing activities
Exploration and evaluation (i)
Shares issued as payment for Exploration and evaluation
Shares issued on conversion of convertible security
Consolidated
2015
$
2014
$
(104,612)
140,750
240,000
277,984
82,625
150,000
276,138
510,609
(i) The consolidated entity has engaged an exploration drilling contractor to provide exploration drilling services in exchange
for an equity interest in specified exploration tenements. The drilling partner must complete a specified quantum of drilling,
based on metres drilled, in order to secure their interest in the specified tenements. During the 2015 financial year, no
drilling was completed in accordance with the terms of the agreement. The estimated value of drilling as at 30 June 2014
has been adjusted to cost in the 2015 financial year. The accrued liability under the agreement as at 30 June 2015 is
$173,372 (2014: $277,984)
Note 33. Earnings per share
Earnings per share for profit from continuing operations
Profit after income tax
Non-controlling interest
Consolidated
2015
$
2014
$
(1,922,562)
-
(1,790,492)
-
Profit after income tax attributable to the owners of Australian Pacific Coal Limited
(1,922,562)
(1,790,492)
52
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 33. Earnings per share (continued)
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
231,673,229 162,140,959
Options over ordinary shares
Convertible notes
-
-
-
-
Weighted average number of ordinary shares used in calculating diluted earnings per share 231,673,229 162,140,959
Number
Number *
Basic earnings per share
Diluted earnings per share
Earnings per share for profit
Profit after income tax
Non-controlling interest
Profit after income tax attributable to the owners of Australian Pacific Coal Limited
Cents
Cents
(0.83)
(0.83)
(1.10)
(1.10)
Consolidated
2015
$
2014
$
(1,922,562)
-
(1,790,562)
-
(1,922,562)
Number
(1,790,562)
Number *
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
231,673,229 162,140,959
Options over ordinary shares
Convertible notes
-
-
-
-
Weighted average number of ordinary shares used in calculating diluted earnings per share 231,673,229 162,140,959
Basic earnings per share
Diluted earnings per share
Cents
Cents
(0.83)
(0.83)
(1.10)
(1.10)
*
At the Company's Annual General Meeting held on 24 November 2014 shareholders approved a one for five share
consolidation of all ordinary shares issued. The numbers of ordinary shares issued and equity securities ("Shares") shown
are stated on a post-consolidation basis. The number of Shares shown for any Shares issued prior to the share
consolidation and the calculated earnings per share amounts have been adjusted to reflect the equivalent post
consolidation number of Shares so issued.
Convertible notes are considered anti-dilutive as the consolidated entity is loss making. Convertible notes potentially dilute
earnings per share in the future.
Note 34. Share-based payments
53
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2015
Note 34. Share-based payments (continued)
The Company has issued fully paid ordinary shares to geological consultants, including placements in accordance with the
plan rules for The Australian Pacific Coal Limited Officers, Executives, Consultants and Employee Share Plan.
The shares were issued as full payment at the market rate for services provided by the consultants.
Details of share based payments are set out in the following table:
2015
Date of issue
18 September 2014
19 December 2014
13 March 2015
18 June 2015
Total
2014
Date of issue
2 August 2013
16 September 2013
14 October 2013
20 June 2014
Total
Amount payable for
services provided
$
50,050
49,925
28,450
26,400
154,825
Amount payable for
services provided
$
31,500
12,500
12,500
26,125
82,625
Number of shares issued*
Issue price*
(cents per share)
2,042,857
3,931,102
7,411,229
6,600,000
28,156,616
(10,214,285)
(0.49)
2.45
1.27
0.38
0.40
Number of shares issued*
Issue price*
(cents per share)
700,000
198,413
198,413
1,066,327
2,163,153
(3,500,000)
(992,064)
(992,063)
(5,331,632)
4.50
6.30
6.30
2.45
(0.90)
(1.26)
(1.26)
(0.49)
* At the Company's Annual General Meeting held on 24 November 2014 shareholders approved a one for five share
consolidation of all ordinary shares issued. The numbers of shares issued are stated on a post-consolidation basis.
The amounts shown in brackets for the number of shares issued and the issue price are the applicable pre-
consolidation amounts.
The amounts payable for services provided measure directly the fair value for the services provided. The total amount
payable, net of any applicable GST, is included in Non-current assets in Exploration and evaluation expenditure and has no
effect on the Company’s profit or loss for the financial year.
54
Australian Pacific Coal Limited
Directors' declaration
30 June 2015
In the directors' opinion:
● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
● the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
● the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at
30 June 2015 and of its performance for the financial year ended on that date; and
● there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________
Peter Ziegler
Chairman
30 September 2015
Brisbane
55
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Australian Pacific Coal Limited (“the Company”) is responsible for establishing the
corporate governance framework of the Group having regard to the ASX Corporate Governance Council
(“CGC”) Third Edition of the Corporate Governance Principles and Recommendations and published guidelines.
The Board guides and monitors the business and affairs of the Company on behalf of the shareholders.
The Board seeks, where appropriate to adopt without modification, the CGC recommendations. Where there
has been any variation from the CGC recommendations, it is because the Board believes the Company is not
as yet of size, nor are its financial affairs of such complexity, to justify some of these recommendations. The
Board is of the view that with the exception of the departures to the CGC Corporate Governance Principles and
Recommendations as are set out below, it otherwise complied with all of the CGC Corporate Governance
Principles and Recommendations. The company’s ASX Appendix 4G, which is a checklist cross-referencing the
ASX Principles and Recommendations to the relevant disclosures in either this statement or Annual Report, is
available on our website www.aqcltd.com.au. This statement has been approved by the company’s Board of
Director’s and is current as at 30 September 2015.
The following table summarises the Company’s compliance with the CGC recommendations and states whether
the Company has complied with each recommendation.
Recommendation
Summary of the Company’s Compliance
Principle 1 – Lay solid foundations for management and oversight
Companies should establish and disclose respective roles and responsibilities for Board and management
1.1: A listed entity should disclose:
a)
the respective roles and responsibilities of its
board and management; and
those matters expressly reserved to the board
and those delegated to management.
b)
for
is ultimately accountable
the
The Board
the company and provides
performance of
leadership and sets the strategic objectives of the
company. It appoints all senior executives and
assesses their performance on at least an annual
basis. It is responsible for overseeing all corporate
frameworks,
reporting
governance
stakeholder
communications. Decisions reserved for the Board
relate to those that have a fundamental impact on
the company, such as material acquisitions and
takeovers, dividends and buybacks, material profits
upgrades and downgrades, and significant closures.
remuneration
systems,
issues,
and
1.2: A listed entity should:
a) undertake appropriate checks before appointing
a person, or putting forward to security holders a
candidate for election, as a director; and
b) provide security holders with all material
information in its possession relevant to a
decision on whether or not to elect or re-elect a
director.
Management is responsible for implementing Board
strategy, day-to-day operational aspects, and
ensuring that all risks and performance issues are
brought the Boards attention. They must operate
within the risk and authorisation parameters set by
the Board.
The company undertakes relevant reference checks
prior to appointing a director, or putting that person
forward as a candidate to ensure that person is
competent, experienced, and would not be impaired
in any way from undertaking the duties of director.
to
The company provides relevant
shareholders
the
attributes of candidates together with whether the
Board supports the appointment or re-election.
their consideration about
information
for
1.3: A listed entity should have a written
agreement with each director and senior
The terms of the appointment of a non-executive
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Australian Pacific Coal Limited
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ABN 49 089 206 986 Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
executive setting out the terms of their
appointment.
director, executive directors and senior executives
are agreed upon and set out in writing at the time of
appointment.
1.4: The company secretary of a listed entity
should be accountable directly to the board,
through the chair, on all matters to do with the
proper functioning of the board.
1.5: A listed entity should:
a) have a diversity policy which includes
requirements for the board or a relevant
committee of the board to set measurable
objectives for achieving gender diversity and to
assess annually both the objectives and the
entity’s progress in achieving them;
b) disclose that policy or a summary of it; and
c) disclose as at the end of each reporting period
the measurable objectives for achieving gender
diversity set by the board or a relevant
committee of the board in accordance with the
entity’s diversity policy and its progress towards
achieving them, and either:
i.
the respective proportions of men and
women on the Board, in senior executive
positions and across the whole organisation
(including how the entity has defined “senior
executive” for these purposes); or
if the entity is a “relevant employer” under
the Workplace Gender Equality Act, the
entity’s most recent “Gender Equality
Indicators”, as defined in and published
under that Act
ii.
1.6: A listed entity should:
a) have and disclose a process for periodically
evaluating the performance of the Board, its
committees and individual directors; and
b) disclose, in relation to each reporting period,
whether a performance evaluation was
undertaken in the reporting period in accordance
with that process.
1.7: A listed entity should:
a) have and disclose a process for periodically
evaluating the performance of its senior
executives; and
b) disclose, in relation to each reporting period,
whether a performance evaluation was
undertaken in the reporting period in accordance
with that process.
The Company Secretary reports directly to the Board
through the Chairman and is accessible to all
directors.
The Company has not adopted a formal Diversity
Policy as it has a small number of employees and
has limited opportunity to adopt formalised policy
guidelines. The Board is committed to developing
diversity in its workplace to assist the Company to
meet its goals and objectives by providing an
environment whereby appointments, advancement
and opportunities are considered on a fair and
equitable basis. The Company is committed to
promoting a corporate culture which embraces
diversity when determining the composition of the
Board, senior management and employees.
The Company will ensure that recruitment and
selection decisions are based on the principle of
merit, skills and qualifications and regardless of age,
gender, nationality, cultural background or any other
factor not relevant to the position. Past skills and
experience in the mining and exploration industries
will be a key determinant in the selection process.
No entity within the consolidated entity is a ‘relevant
employer’ for the purposes of the Workplace Gender
Equality Act 2012 and therefore no Gender Equality
Indicators to be disclosed.
The company does not currently have a formal
process for evaluating the performance of the Board,
its committees or individual directors. The Board
conducts
the skills,
performance and remuneration of existing Directors
from
Individual Directors may
recommend changes to the composition of the
Board.
its own evaluation of
time.
time
to
Until such time as the company expands to justify an
expansion of Board members, the Board is of the
current opinion that such performance evaluation is
suitable for the company.
The Board reviews
executives periodically.
the performance of senior
No performance evaluation was undertaken during
the reporting period.
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Australian Pacific Coal Limited
Annual Report
Year Ending 30 June 2015
CORPORATE GOVERNANCE STATEMENT
Principle 2 – Structure the board to add value
A listed entity should have a board of an appropriate size, composition, skills and commitment to enable it to
discharge its duties effectively.
2.1: The board of a listed entity should:
a) have a nomination committee which:
i. has at least three members, a majority of
whom are independent directors; and
is chaired by an independent director,
ii.
and disclose:
iii.
iv. the members of the committee; and
v. as at the end of each reporting period, the
the charter of the committee;
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
b)
if it does not have a nomination committee,
disclose that fact and the processes it employs
to address board succession issues and to
ensure that the board has the appropriate
balance of skills, knowledge, experience,
independence and diversity to enable it to
discharge its duties and responsibilities
effectively.
2.2: A listed entity should have and disclose a
board skills matrix setting out the mix of skills and
diversity that the board currently has or is looking
to achieve in its membership.
The Company does not have a nomination
committee. The Board decides the selection of
members of the Board and makes recommendations
to shareholders for election of Directors. Each Board
member is responsible for assessing the necessary
competencies of the Board members to add value to
the Company, reviewing Board succession plans
and evaluating the Board’s performance.
The Board does not maintain a formal skills matrix
that sets out the mix of skills and diversity that the
Board aims to achieve in its membership. The
current Board members represent individuals that
have extensive industry experience as well as
professionals that bring to the Board their specific
skills in order for the company to achieve its
strategic, operational and compliance objectives.
Their suitability to the directorship has therefore
been determined primarily on the basis of their ability
to deliver outcomes
the
company’s short and longer term objectives and
therefore deliver value to shareholders.
in accordance with
All Board members are however expected to be able
to demonstrate the following attributes:
Board Member Attributes
Leadership
Represents the company
positively amongst stakeholders
and external parties; decisively
acts ensuring that all pertinent
facts considered; leads others to
action; proactive solution
seeker.
Ethics and
Awareness of social,
professional and legal
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Australian Pacific Coal Limited
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ABN 49 089 206 986 Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
integrity
responsibilities at individual,
company and community level;
ability to identify independence
conflicts; applies sound
professional judgement;
identifies when external counsel
should be sought; upholds
Board confidentiality; respectful
in every situation.
Communication Effective in working within
defined corporate
communications policies; makes
constructive and precise
contribution to the Board both
verbally and in written form; an
effective communicator with
executives.
Negotiation skills which
engender stakeholder support
for implementing Board
decisions.
Experienced director that is
familiar with the mechanisms,
controls and channels to deliver
effective governance and
manage risks
Negotiation
Corporate
governance
Details of the Board of directors, their appointment
dated, length of service as independence status is
as follows:
Mr Peter Ziegler
(Chairman): Appointed 29
November 2005, served 10 years, Independent Non-
executive.
Mr Paul Byrne (Managing Director): Appointed 29
November 2005, served 10 years, Not-independent
Executive, served 10 years.
Mr Paul Ingram: Appointed 17 March 2011, served 4
years, Independent Non-executive.
Mr Paul Ryan: Appointed 29 November 2012, served
3 years, Independent Non-executive.
The board consists of four directors. Three of those
directors, Mr Peter Ziegler (Chairman), Mr Paul
Ingram and Mr Paul Ryan are considered
independent.
is considered
The Chair, Mr Peter Ziegler,
independent. Mr Paul Byrne holds the position of
CEO.
New directors undertake an
induction program
2.3: A listed entity should disclose:
a)
the names of the directors considered by the
board to be independent directors;
if a director has an interest, position, association
or relationship of the type described in Box 2.3
but the board is of the opinion that it does not
compromise the independence of the director,
the nature of the interest, position, association or
relationship in question and an explanation of
why the board is of that opinion; and
the length of service of each director.
b)
c)
2.4: A majority of the board of a listed entity
should be independent directors.
2.5: The chair of the board of a listed entity should
be an independent director and, in particular,
should not be the same person as the CEO of the
entity.
2.6: A listed entity should have a program for
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Australian Pacific Coal Limited
Annual Report
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CORPORATE GOVERNANCE STATEMENT
inducting new directors and provide appropriate
professional development opportunities for
directors to develop and maintain the skills and
knowledge needed to perform their role as
directors effectively.
coordinated by the Company Secretary that briefs
and informs the director on all relevant aspects of
the company’s operations and background. Directors
are encouraged to undertake director development
programs to ensure that directors can enhance their
skills and remain abreast of important developments.
Principle 3 – Act ethically and responsibly
A listed entity should act ethically and responsibly
3.1: A listed entity should:
a) have a code of conduct for its directors, senior
executives and employees; and
b) disclose that code or a summary of it.
The Company Code of Conduct Policy and Ethics
Policy endeavours to foster a culture requiring that
directors and officers act with the utmost integrity,
objectivity and in compliance with the spirit of the law
and Company policies.
Principle 4 – Safeguard integrity in corporate reporting
A listed entity should have formal and rigorous processes that independently verify and safeguard the
integrity of its corporate reporting.
4.1 - The board of a listed entity should:
a) have an audit committee which:
ii.
i. has at least three members, all of whom are
non-executive directors and a majority of
whom are independent directors; and
is chaired by an independent director, who
is not the chair of the board, and disclose:
the charter of the committee;
iii.
iv. the relevant qualifications and experience of
v.
the members of the committee; and
in relation to each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
b)
if it does not have an audit committee, disclose
that fact and the processes it employs that
independently verify and safeguard the integrity
of its corporate reporting, including the
processes for the appointment and removal of
the external auditor and the rotation of the audit
engagement partner.
The Board has established an Audit Committee.
The Audit Committee consists of Mr Peter Ziegler
(Chairman) and Mr Kevin Mischewski (Company
Secretary).
Details of the qualifications and experience of the
members of the Committee is detailed in the
“Information on directors” section of the Directors’
report.
The Chairman Mr Peter Ziegler represents the board
as independent director, is financially literate and
has the relevant qualifications and experience.
The company considers that due to the size, nature
and level of complexity of the Company, sourcing
directors in strict compliance with Principle 4.1 would
defeat the purpose of a board audit committee for
focusing on
the company’s
financial reporting.
issues relevant
to
the
integrity of
responsibility
Ultimate
the
for
company’s financial reporting rests with the board
and the current composition of the Audit Committee
ensures that the Board has processes in place to
raise issues that are ordinarily considered by the
Audit Committee.
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Australian Pacific Coal Limited
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ABN 49 089 206 986 Corporate Governance Statement
The number of Committee meetings held and
attended by each member is disclosed in the
CORPORATE GOVERNANCE STATEMENT
4.2: The board of a listed entity should, before it
approves the entity’s financial statements for a
financial period, receive from its CEO and CFO a
declaration that, in their opinion, the financial records
of the entity have been properly maintained and that
the financial statements comply with the appropriate
accounting standards and give a true and fair view of
the financial position and performance of the entity
and that the opinion has been formed on the basis of
a sound system of risk management and internal
control which is operating effectively.
4.3: A listed entity that has an AGM should ensure
that its external auditor attends its AGM and is
available to answer questions from security holders
relevant to the audit.
Principle 5 – Make timely and balanced disclosure
“Meetings of directors” section of the Directors’
report.
For the financial year ended 30 June 2015 and the
half-year ended 31 December 2014, the company’s
CEO and CFO provided the Board with the required
declarations.
The audit engagement partner attends the AGM and
is available to answer shareholder questions from
shareholders relevant to the audit.
A listed entity should make timely and balanced disclosure of all matters concerning it that a reasonable
person would expect to have a material effect on the price or value of its securities.
5.1: A listed entity should
a) have a written policy for complying with its
continuous disclosure obligations under the
Listing Rules; and
b) disclose that policy or a summary of it.
The Company has written policies and procedures in
place to ensure compliance with ASX listing rule
disclosure requirements and accountability at a
senior executive level for that compliance. The
directors and senior management are made aware
of their disclosure requirements and obligations prior
to their engagement and regularly at Board and
Management meetings.
Where any such person is of any doubt as to
whether they possess information that could be
classified as market sensitive, they are required to
notify the Company Secretary immediately in the first
instance. The Company Secretary is required to
consult with the CEO in relation to matters brought to
his or her attention for potential announcement.
Generally, the CEO is ultimately responsible for
decisions
the making of market
announcements. The Board is required to authorise
announcements of significance to the company. No
member of the company shall disclose market
sensitive information to any person unless they have
received acknowledgement from the ASX that the
information has been released to the market.
relating
to
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Annual Report
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CORPORATE GOVERNANCE STATEMENT
Principle 6 – Respect the rights of security holders
A listed entity should respect the rights of its security holders by providing them with appropriate information
and facilities to allow them to exercise those rights effectively.
6.1: A listed entity should provide information about
itself and its governance to investors via its website.
The company maintains information in relation to
governance documents, directors and senior
executives, annual report, ASX announcements and
contact details on the company’s website.
The Company is committed to:
• Communicating effectively with its shareholders
and ensuring that it is easy for shareholders to
communicate with the Company;
• Complying with
its continuous disclosure
obligations applicable to the ASX listing rules
and other regulators; and
• Ensuring
that
the shareholders and other
stakeholders are provided with timely and full
information about the Company’s activities.
6.2: A listed entity should design and implement an
investor relations program to facilitate effective two-
way communication with investors.
6.3: A listed entity should disclose the policies and
processes it has in place to facilitate and encourage
participation at meetings of security holders
The company does not have a formal investor
relations program. The Board and Company
Secretary engage with investors at the AGM and
respond to shareholder enquiry on an ad hoc basis.
Material communications are dispatched to investors
either via email, surface mail, and/or via market
announcement.
facilitate and
to encourage participation at
To
meetings of shareholders, the Company ensures
that information is communicated to its shareholders
through:
• Posting information on the Company’s web site
at www.aqcltd.com
• The distribution of Notice of Meetings and other
through
of
to shareholders
other
forms
information directly
letters,
email
communications;
and
• Ensuring that auditors are invited to the Annual
General Meeting to consider questions regarding
the conduct of the audit and the preparation and
content of the auditor report; and
• Allowing shareholders
the opportunity at
meetings to discuss resolutions.
6.4: A listed entity should give security holders the
option to receive communications from, and send
communications to, the entity and its security registry
electronically.
The company engages its share registry to manage
the majority of communications with shareholders.
Shareholders
receive
correspondence from the company electronically,
encouraged
are
to
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ABN 49 089 206 986 Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
thereby facilitating a more effective, efficient and
environmentally friendly communication mechanism
with shareholders. Shareholders not already
receiving information electronically can elect to do so
through the share registry, Link Market Services
Limited
at
https://www.linkmarketservices.com.au/corporate/Inv
estorServices/Investor-Services.html.
Principle 7 – Recognise and manage risk
A listed entity should establish a sound risk management framework and periodically review the
effectiveness of that framework.
7.1: The board of a listed entity should:
a) have a committee or committees to oversee risk,
ii.
each of which:
i. has at least three members, a majority of
whom are independent directors; and
is chaired by an independent director, and
disclose:
the charter of the committee;
iii.
iv. the members of the committee; and
v. as at the end of each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
b)
if it does not have a risk committee or
committees that satisfy a) above, disclose that
fact and the processes it employs for overseeing
the entity’s risk management framework
7.2: The board or a committee of the board
should:
a) review the entity’s risk management framework
at least annually to satisfy itself that it continues
to be sound; and
b) disclose, in relation to each reporting period,
whether such a review has taken place
7.3: A listed entity should disclose:
a)
if it has an internal audit function, how the
function is structured and what role it performs;
or
if it does not have an internal audit function, that
fact and the processes it employs for evaluating
and continually improving the effectiveness of its
risk management and internal control processes.
b)
to mitigate such
The company does not maintain a Risk Committee
as it is considered that the current size of the Board
does not warrant the formal establishment of a
separate committee. The Board therefore performs
the function of such a committee which includes
setting of corporate governance policy and
exercising due care and skill in assessing risk,
developing strategies
risk,
monitoring the risk and the company’s effectiveness
in managing it. The company maintains internal
controls which assist in managing enterprise risk,
and these are reviewed as part of the scope of the
external audit, with the auditor providing the Board
with commentary on their effectiveness and the need
for any additional controls. The Managing Director
and CEO are responsible for monitoring operational
risk, ensuring all relevant insurances are in place,
and ensuring that all regulatory and compliance
obligations of the company are satisfied.
is
for
responsible
The Board
the
Company’s policy on risk management and risk
oversight. The Audit Committee also separately
assesses management of the Company’s risks and
makes recommendations to the Board.
reviewing
The Audit Committee conducted a review of the
Company’s risk management framework during the
reporting period.
for
company’s
responsibility
function. The
The company does not have a dedicated internal
audit
risk
management and internal controls lies with both the
Managing Director and CFO who continually monitor
risk
the
environment. Necessary action is taken to protect
the integrity of the company’s books and records
including by way of design and implementation of
internal controls, and
to ensure operational
efficiencies, mitigation of risks, and safeguard of
company assets.
external
internal
and
Page 67
Corporate Governance Statement ABN 49 089 206 986
Australian Pacific Coal Limited
Annual Report
Year Ending 30 June 2015
CORPORATE GOVERNANCE STATEMENT
7.4: A listed entity should disclose whether it has any
material exposure to economic, environmental and
social sustainability risks and, if it does, how it
manages or intends to manage those risks.
to
to
the company’s Annual Report
for
Refer
disclosures relating
the company’s material
business risks (including any material exposure to
economic, environmental or social sustainability
risks). Refer to commentary at Recommendations
7.1 and 7.2 for information on the company’s risk
management framework.
Principle 8 – Remunerate fairly and responsibly
A listed entity should pay director remuneration sufficient to attract and retain high quality directors and
design its executive remuneration to attract, retain and motivate high quality senior executives and to align
their interest with the creation of value for security holders.
8.1: The board of a listed entity should:
a) have a remuneration committee which:
ii.
i. has at least three members, a majority of
whom are independent directors; and
is chaired by an independent director, and
disclose:
the charter of the committee;
iii.
iv. the members of the committee; and
v. as at the end of each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
b)
if it does not have a remuneration committee,
disclose that fact and the processes it employs
for setting the level and composition of
remuneration for directors and senior executives
and ensuring that such remuneration is
appropriate and not excessive.
The company does not maintain a Remuneration
Committee as it is considered that the current size of
the Board does not warrant the formal establishment
of a separate committee. The Board therefore
performs the function of such a committee which
remuneration
includes setting
the company’s
incentive
to
structure, determining eligibilities
schemes, assessing performance and remuneration
of senior management and determining
the
remuneration and incentives of the Board, CEO and
Company Secretary. The Board may obtain external
advice from independent consultants in determining
the Company’s remuneration practices, including
remuneration levels, where considered appropriate.
8.2: A listed entity should separately disclose its
policies and practices regarding the remuneration of
non-executive directors and the remuneration of
executive directors and other senior executives.
Non-executive directors’ remuneration is generally
fee based. The level of remuneration reflects the
anticipated time commitments and responsibilities of
the position.
The Board considers the procedures, policies and
key performance indicators used to measure the
performance of key executives and directors. Any
equity based executive remuneration may be made
thresholds approved by
in accordance with
shareholders and developed over time.
framework and
Full discussion of the Company’s remuneration
philosophy and
remuneration
received by directors and executives in the current
financial year is contained in the Remuneration
Report section of the Directors’ Report. Further
details of
remuneration
procedures can be found in the Remuneration
Committee Charter.
the structure of
the
8.3: A listed entity which has an equity-based
Where a director or other senior executive uses
Annual Report
Year Ending 30 June 2015
Australian Pacific Coal Limited
Page 68
ABN 49 089 206 986 Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
remuneration scheme should:
a) have a policy on whether participants are
derivatives or other hedging arrangements over
vested securities of the company, this will be
disclosed.
permitted to enter into transactions (whether
through the use of derivatives or otherwise)
which limit the economic risk of participating in
the scheme; and
b) disclose that policy or a summary of it
Page 69
Corporate Governance Statement ABN 49 089 206 986
Australian Pacific Coal Limited
Annual Report
Year Ending 30 June 2015
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this report is as
follows. This information is current as at 30 September 2015.
1.
Shareholding
a.
Distribution of Shareholders – Ordinary Securities
Number
Number
Category (size of holding)
of holders
of shares held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Total
282
274
169
617
307
79,556
753,442
1,291,093
23,294,321
359,522,457
1,649
384,940,869
b.
The number of shareholdings held in less than a marketable parcel of 71,429 shares (closing price
$0.007 on 30 September 2015) is 1,261 and they hold 18,086,510 shares.
c.
The names of the substantial holders in the company as at 30 September 2015 are:
Substantial holder
The Australian Special Opportunities Fund, LP
Trepang Services Pty Ltd
Nathan Tinkler
Mr Paul James Byrne
Mr James Glen Foley
d.
Voting Rights
Number
of shares
57,054,377
54,000,000
54,000,000
22,667,304
14,467,300
The voting rights attached to each class of equity security are as follows:
Ordinary shares:
—
Each ordinary share is entitled to one vote when a poll is called, otherwise each member
present at a meeting or by proxy has one vote on a show of hands.
Page 67
Australian Pacific Coal Limited
ASX Additional Information
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2015
ASX ADDITIONAL INFORMATION
e.
20 Largest Shareholders — Ordinary Shares
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
BNP Paribas Nominees Pty Ltd
Trepang Services Pty Ltd
Mr Paul Byrne
BBY Nominees Limited
Mr Boutros Saad & Mrs Mariam Saad
Gordon Holdings (Qld) Pty Ltd
Shemariah Pty Ltd
Shemariah Pty Ltd
RJ Tinkler Investments Pty Ltd
Leslie Norma Tinker & Zelda Irene Tinkler
JVG Aust Pty Ltd
Bentley Resources Pte Ltd
13. Mr James Glen Foley & Mrs Karen Veronica Ruby Foley
14. Mr Peter Graham Wells
15.
Dr Elizabeth Anne Byrne Henderson
16. Mr Heath Barry Bourke
17. Moodycorp Pty Ltd
18. Muskrat Pty Ltd
19.
Alcom Constructions Pty Ltd
20. Moray Holdings (Qld) Pty Ltd
Number of Ordinary
Fully Paid Shares
Held
44,003,762
27,000,000
18,498,970
15,050,615
9,021,010
8,554,191
8,320,000
8,000,000
6,750,000
6,750,000
6,750,000
6,750,000
6,463,500
6,046,708
5,701,311
5,000,000
5,490,000
4,387,500
4,386,056
4,168,334
% Held of
Issued
Ordinary
Capital
11.43
7.01
4.81
3.91
2.34
2.22
2.16
2.08
1.75
1.75
1.75
1.75
1.68
1.57
1.48
1.30
1.43
1.14
1.14
1.08
207,091,957
53.78
2.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian
Stock Exchange Limited.
Annual Report
Australian Pacific Coal Limited
Page 68
Year Ending 30 June 2015
ABN 49 089 206 986
ASX Additional Information
CORPORATE DIRECTORY
DIRECTORS
Peter Alexander Ziegler (Chairman)
Paul James Byrne (Chief Executive Officer)
Paul Anthony Ingram
Paul Bradley Ryan
COMPANY SECRETARY
Kevin Mischewski
LAWYERS
HopgoodGanim Lawyers
Level 8, Waterfront Place
1 Eagle Street
Brisbane QLD 4000
AUDITORS
Sothertons L.L.P. Chartered Accountants
Level 6, 468 St Kilda Road
Melbourne VIC 3004
BANKERS
National Australia Bank Limited
100 Creek Street
Brisbane QLD 4000
SHARE REGISTRY
Link Market Services Limited
Level 15, 324 Queen Street
Brisbane QLD 4000
Phone: 1300 554 474 or
+61 2 8280 7111
www.linkmarketservices.com.au
REGISTERED OFFICE
Australian Pacific Coal Limited
Level 7, 10 Felix Street
Brisbane QLD 4000
Phone: +61 7 3221 0679
Fax: +61 7 3229 9323
www.aqcltd.com
Page 69
Corporate Directory
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2015