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16
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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iv
xii
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8
18
20
21
22
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24
62
63
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70
Annual Report
Australian Pacific Coal Limited
TOC
Year Ending 30 June 2016
ABN 49 089 206 986
CHIEF EXECUTIVE OFFICER’S REPORT
Focused on acquiring, developing and value
adding thermal and metallurgical coal prospects.
I am pleased to report that the Company has achieved a number of significant milestones over the financial
year. The company is on track to complete its acquisition of 100% of the Dartbrook Joint Venture (‘Dartbrook’)
On 30th October 2015 shareholders approved a $13.2 million capital raising, re-invigorating the Company. On
24th December 2015 the Company entered into a binding agreement to acquire Anglo American Plc’s 83.33%
interest in the Dartbrook Joint Venture (‘Dartbrook’). Subsequently, on 18th May 2016, Marubeni Coal Pty Ltd
exercised their right to ‘tag’ and sell their 16.67% interest in the Dartbrook Joint Venture to AQC. At completion
of the acquisition, AQC will own 100% of Dartbrook. Completion is expected to occur by January 2017.
The Company has paid deposits of $500,000 to Anglo and $100,000 to Marubeni. A further $24.5 million has
been placed into an escrow account to enable completion of the acquisition upon the remaining conditions
precedent being waived or satisfied. The Company has secured the funding necessary to purchase Marubeni
Coal Pty Ltd’s 16.67% interest in the Dartbrook Joint Venture. Finalisation of the outstanding funding necessary
for the completion of the Dartbrook acquisition is well advanced.
On 24th May 2016 the company announced a total Coal Resource Estimate at Dartbrook of 1.2 billion tonnes.
The Coal Resource Estimate comprises 466 million tonnes of Measured Resources, 449 million tonnes of
Indicated Resources and 294 million tonnes of Inferred Resources to a maximum depth of 350m.
While the Company’s primary focus has been on the Dartbrook acquisition it has also focused on the review of
its existing exploration tenements and potential for further development of the assets or their potential sale.
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.
John Robinson
Chief Executive Officer
31 October 2016
Compliance Statement
Dartbrook Coal Resource Estimate:
The information is extracted from the report entitled ‘Australian Pacific Coal Commissioned Coal Resource Estimate at
Dartbrook of 1.2 billion tonnes’ created on 24 May 2016 and is available to view on www.aqcltd.com.
The company confirms that it is not aware of any new information or data that materially affects the information included in
the original market announcements and, in the case of estimates of Mineral Resources or Ore Reserves, that all material
assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply
and have not materially changed. The company confirms that the form and context in which the Competent Person’s
findings are presented have not been materially modified from the original market announcement.
Annual Report
Australian Pacific Coal Limited
Page i
Year Ending 30 June 2016
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 acquiring developing
and value adding thermal and metallurgical coal prospects.
AQC is in the process of finalising its acquisition of the Dartbrook coal mine in the Hunter Valley, NSW. The
Company expects that the acquisition will be completed by January 2017.
AQC has a strategic holding of coal exploration tenements located in Queensland's Bowen, Galilee, Surat and
Clarence-Moreton basins. The continuing 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. Having identified prospective areas for further
exploration, the Company is now focused on exploiting the commercial value of these coal projects. Exploitation
opportunities include farm-in, joint venture exploration and joint venture development.
AQC owns a substantial industrial minerals project in central western Queensland. The project forms part of
AQC's former industrial minerals business and is no longer part of the Company's core business. Options are
currently being assessed to divest the asset.
AQC is an Australian public company with approximately 1,800 shareholders. AQC listed on the Australian
Stock Exchange in 1999. The Company has emerged as a strong participant in the junior mining and
exploration sector.
AQC’s long term strategic focus is based on seeking out and identifying potentially lucrative resource
investment opportunities. In addition to its Dartbrook acquisition, 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 (Queensland), FCPA, ACA, FTIA, CTA
Non-executive Chairman, Chairman of the Audit Committee
Mr Ziegler is an experienced company director, Solicitor and Chartered Accountant. He was Partner at the
major international accounting firm Ernst & Young, specialising in taxation and corporate structuring. Mr Ziegler
is a principal of Ziegler Asset Partners, an asset management company specialising in investments in listed
and unlisted equities and special opportunities. Mr. Ziegler graduated with Honours degrees in Commerce and
Law (1982 and 1983, respectively), together with a Master of Financial Management (1983), from the University
of Queensland.
Director since 29th of November 2005
Mr John Robinson B. Acc, MAICD
Mr John Robinson is a former Private Equity professional and has led numerous private equity acquisitions in
the property and retail sectors. Mr. Robinson has also extensive experience with the support services that the
mining and oil and gas sectors require in their Australian operations. He is Member of the Australian Institute of
Company Directors. Mr John Robinson Jnr gained a Bachelor of Accoucnting from the Charles Darwin
University.
Director since 30th of October 2015
Page ii
Australian Pacific Coal Limited
Information on Australian Pacific Coal
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
INFORMATION ON AUSTRALIAN PACIFIC COAL
BOARD OF DIRECTORS continued
Mr Paul Byrne
Executive Director
Mr Byrne joined the Company as an Executive Director, following the acquisition of the Ipoh group of
companies. Mr Byrne was a founder of the Ipoh group and initiated environmental remediation projects in
conjunction with CSIRO, University of South Australia and the Queensland Department of Primary industries.
He has been involved in the resources sector since 1985 in exploration and mining. He has extensive
experience in project generation.
Director since 29 November 2005.
The Hon. Shane Stone AC QC, PGDK, B.A (ANU), LL.B (Melbourne), Grad Dip Ed Admin (Adelaide), Dip
Teaching (Sturt), TPTC (Vic), FACE, FAIM, FAICD, F Fin
Non-executive Director
Mr Stone has a strong commercial and legal background and considerable experience in dealing with
Commonwealth and State governments. Mr Stone has at various times acted as an independent director to
various public and private companies. Currently Deputy Chairman UK listed Impellam plc, Chairman of ASX
listed Regalpoint Resources Limited and Chairman of Mayfair Limited (Anne Street Partners and QNV
Constructions). Former Chief Minister of the Northern Territory and Federal President of the Liberal Party of
Australia. Formerly a barrister he is a graduate of Australian National University, Sturt, Adelaide and Melbourne
Universities. He is a Fellow of the Australian Institute of Management, Australian College of Education and
Australian Institute of Company Directors. He was made a Companion of the Order of Australia in 2006. He has
also been conferred national awards from Indonesia and Malaysia. Director since 1 August 2016.
KEY COMPANY DATA (as at 30 September 2016)
Listing:
Australian Securities Exchange (ASX:AQC) – Listed in 1999
Shares on Issue:
4,330,934,264 AQC ORD
(approximately 1,800 shareholders)
Options:
87,500,000 unlisted options expiring 31 March 2016 exercise price $0.008.
Market Capitalisation:
$92.28 million
Cash at bank:
$27,593,279
Quarterly Share Price Activity:
September 2016
June 2016
March 2016
December 2015
High
$0.031
$0.020
$0.026
$0.028
Low
$0.017
$0.009
$0.011
$0.005
Last
$0.022
$0.017
$0.011
$0.020
Annual Report
Australian Pacific Coal Limited
Page iii
Year Ending 30 June 2016
ABN 49 089 206 986
Information on Australian Pacific Coal
REVIEW OF OPERATIONS
DARTBROOK COAL MINE
Australian Pacific Coal is in the final stages of its acquisition of the Dartbrook mine from Anglo American Plc. The
mine is located in the renowned coal region of the Hunter Valley, NSW, approximately 4km west of Aberdeen and
10km north-west of Muswellbrook. The Dartbrook site has access to world-class infrastructure, a skilled
workforce and the support industries utilised by major mining companies in the region to serve key customers in
Asia. The Dartbrook Project provides a rare opportunity into the tightly held Tier 1 thermal coal assets of the
Hunter Valley.
Page iv
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
REVIEW OF OPERATIONS
During the year the Company has maintained a strong focus on finalising the acquisition of the Dartbrook mine
and restarting production of the underground mine. The Dartbrook mine is currently on care and maintenance and
is known to have historically produced a high quality thermal coal. The coal mine assets, including a coal handling
and processing plant (‘CHPP’), have been well maintained and are in good condition. Also, existing on-site is a
train loan out (‘TLO’) and rail loop connecting to the Hunter Valley Coal Rail Network allowing ready coal
transportation
the
largest coal export operation in the
world.
to Newcastle,
to
investment
infrastructure
Dartbrook has existing CHPP and
enable
TLO
to
underground mining operations
recommence for up to 7mtpa run of
mine (‘ROM’). The initial circa $20m
capex
to recommence
underground operations (expenditure
primarily on conveyors) will allow up to
4.7 mtpa capacity. It is expected the
first ROM coal to be produced within 6
months of acquisition completion with
full production within 12 months.
The Dartbrook deposit is a shallow
lying, high quality, deposit consisting
of multiple thick and laterally extensive
seams. The deposit is subject to
relatively minor, well-mapped faults
and minor folding. In 2015 MineCraft Consulting on behalf of Anglo American Metallurgical Coal (AAMC), identified
future opportunities for underground mining in 3 seams – Kayuga, Piecefield and Wynn. The preferred option of
AQC is a bord and pillar mine start-up in the Kayuga and/or Piecefield seams, potentially transitioning in the
medium term to a larger mine. The target coal seams are expected to produce a thermal coal product comparing
favourably with the Newcastle Thermal Benchmark.
The short to medium term objective will be to undertake feasibility studies and initiate the required approval
process to expand the Dartbrook project to an open cut mining operation. This open cut mine development has
high potential to be a lowest cost quartile producer given known coal quality from previous underground
operations, a competitive services sector and highly skilled labour within the region. The application will seek
regulatory approvals for the development of an 8-10 mtpa open cut mining operation at Dartbrook commencing
with 5 mtpa. It is anticipated the approval will be obtained in year 3 of operations. The open cut operations will
target a minimum 50-year mine life.
Page v
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
REVIEW OF OPERATIONS
COAL EXPLORATION
In Queensland, Australian Pacific Coal hold interest in 6 EPC’s and one MDL in the Bowen Basin, 2 EPC’s in the
Surat Basin and one EPC in the Galilee Basin. The Mount Hillalong (EPC 1824), Dingo (EPC 1859), South
Clermont (EPC 2011) and Cooroorah (MDL 453) projects have been identified as the company’s most advanced.
AQC has joint venture agreements on three tenements with Blackwood Resources (a 100% owned subsidiary of
Cuesta Coal Ltd).
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.
Granted Tenements
100% AQC
Exploration & Joint
Venture Agreements
• MDL 453 – Cooroorah
Blackwood Resources Pty Ltd (Note 1.)
• EPC 1859 – Dingo
• EPC 1955 – Bungaban Creek
• EPC 1645 – Mount Hess
• EPC 1957 – Laguna Creek
• EPC 1773 – Kemmis Creek
• EPC 1987 – Quondong
• EPC 1824 – Mount Hillalon
• EPC 1867 – Mount Hess West
• EPC 2011 – South Clermont
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
Page vi
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
REVIEW OF OPERATIONS
Blackwater (AQC 100%)
Cooroorah (MDL 453)
Two separate focus areas, on either side of
the Jellinbah Fault zone.
The Target coal seams are expected to
produce a PCI product with a possible semi-
soft coking fraction.
Indicated Resource of 70Mt and Inferred
Resource of 55Mt.
Identified coal resource is at a moderate to
deep mining depth (180 -520m), but still
seen as appropriate for underground mining
methods.
Located near rail network and developed
infrastructure.
Dingo (EPC 1859)
The tenement contains coal seams from the
Permian age Rangal Coal Measures.
Coal quality suggests a low volatile high
yielding PCI product is possible, with a
possible secondary thermal fraction.
Potential Coal Target estimated between
19-33 Mt.
Located on rail network.
AQC is currently reviewing its opportunities for
the Blackwater project, either to further expand
the resource or to divest.
EPC
Name
Status
Area
(km2)
Location
Target Coal Coal Type
Depth
Potential
MDL 453 Cooroorah Granted 22
16km N of
Blackwater
Rangal and
Burngrove
Coking,
PCI &
Thermal
Burngrove to
120m, Rangal
250 to 500m
EPC 1859 Dingo
Granted 22
Around
Dingo 50km
E of
Blackwater
Rangal and
Burngrove
Thermal
& PCI
120 metres
Open cut potential, 4
seams 12m
thickness
Page vii
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
REVIEW OF OPERATIONS
Mt Hillalong (AQC 100%)
The Mount Hillalong project consists of 4
EPC’s - EPC1645, EPC1773, EPC1824 and
EPC 1867).
The Mount Hillalong project targets the
Rangal and Fort Cooper coal measures in
the northern Bowen Basin. This 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, isolated drill hole
intercepts within the tenements and
geophysical surveys have allowed the
definition of good drilling targets as the basis
for further exploration by the Company.
The Hail Creek railway is 18 km to the
southeast and provides access to Mackay's
export coal loading terminals.
EPC
Name
Status
Area
(km2)
Location
Target
Coal
Coal Type
Depth
Potential
EPC
1645
Mount
Hess
Granted 70
20km SE of
Glenden
EPC
1773
Kemmis
Creek
Granted 10
32km SE of
Glenden
Fort
Cooper
Coking &
Thermal
to
120m
EPC
1824
Mount
Hillalong
Granted 48
6km E of
Glenden
Rangal
Metallurgical &
Thermal
300 to
500m
EPC
1867
Mount
Hess West
Granted 13
16km SE of
Glenden
Test drilling required
4 holes with coal
intercepts 25 to 150m
depths. Open cut
potential
90Mt exploration target
defined by seismic and
nearby drilling
Page viii
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
REVIEW OF OPERATIONS
South Clermont (AQC 100%)
The South Clermont project comprises one
granted EPC (EPC 2011) over an area to
the south of Blair Athol coal mine, one of
the Bowen Basin's largest open cut coal
operations. The application area targets
extensions to the Blair Athol basin looking
for further shallow thermal coal truncated
from the main deposit.
No advanced (field) activities have been
completed to date.
Reprocessed gravity surveys have
shown gravity lows in the north and
eastern flank of the tenement, which
could indicate the presence of Permian
coal seams.
Historical drilling within and surrounding the
tenement totals 100 holes, but the coal
seams intersected have been considered to
be of limited prospectivity.
EPC
Name
Status
Area
(km2)
Location
Target Coal
Coal
Type
Depth
Potential
EPC
2011
South
Clermont
Granted 57
Adjacent to
Clermont
Blair Athol coal
measures
Thermal <200m
Geological target,
requires discovery
hole
Page ix
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
REVIEW OF OPERATIONS
Blackwood JV (AQC 10% free carried interest)
The Blackwood Resources Joint Venture consists
of three EPCs in joint venture with the unlisted
coal explorer, Blackwood Resources Pty Ltd. This
joint venture was created in April 2010, leaving
AQC with a 10% free carried interest up to
feasibility study stage. Under the terms of the joint
venture, Blackwood is 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 projects. Blackwood can
withdraw at any time and offer the projects back
to AQC at no cost.
The EPCs cover large areas over the Clarence-
Moreton, Surat and Galilee Basin that are
prospective for shallow thermal coal. Any enquiry
regarding the tenements should be directed to
Blackwood Resources as manager of the projects
EPC
Name
Status
Area
(km2)
Location
Target Coal
Coal
Type
Depth
Potential
EPC
1955
Bungaban
Creek
Granted 383
100km N of
Miles
Walloon coal
measures
Thermal
15 to
70m
2 drilled holes
intersecting 6.2m of
coal to 61m
EPC
1957
Laguna
Creek
Pending 382
150km NW
Clermont
Galilee Basin
Thermal <200m Drilling required
EPC
1987
Quondong
Pending 354
50km N of
Miles
Taroom coal
measures
Thermal <100m Drilling required
Page x
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
REVIEW OF OPERATIONS
Industrial Minerals (AQC 100%)
AQC owns an industrial minerals project in central western Queensland. The project forms part of AQC's former
industrial minerals business and is no longer part of the Company's core business. Options are currently being
assessed to divest this asset.
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.
EPC
Name
Status
Area
(km2)
Location Commodity
Depth
Mining & processing
ML
70360
Mantuan Granted
3
78km S
of Alpha
Bentonite
1-2m overburden,
0.5m weathered,
3m bentonite
Shallow open cut, on site
screening and bagging
operation
Page xi
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
20
16
Australian Pacific Coal Limited
Corporate directory
30 June 2016
Directors
Peter Ziegler (Chairman)
John J Robinson (Managing Director and Chief Executive Officer)
Paul Byrne
Shane Stone
Company secretary
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
Level 15
324 Queen Street
Brisbane QLD 4000
Phone: 1300 554 474 or +61 2 8280 7111
www.linkmarketservices.com.au
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
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.au
1
Australian Pacific Coal Limited
Directors' report
30 June 2016
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 2016.
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
John Robinson (appointed 30 October 2015)
Paul Byrne
Shane Stone (appointed 1 August 2016)
Nathan Tinker (appointed 30 October 2015, resigned 9 February 2016)
Paul Ingram (resigned 30 October 2015)
Paul Ryan (resigned 30 October 2015)
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of:
Progressing financing and due diligence matters required to enable completion of the acquisition of Dartbrook coal
mine.
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
2017.
Review of operations
The loss for the consolidated entity after providing for income tax and non-controlling interest amounted to $5,991,001 (30
June 2015: $1,922,562).
As at 30 June 2016, the consolidated entity had net assets of $11,115,272 (30 June 2015 $1,129,526)
2
Australian Pacific Coal Limited
Directors' report
30 June 2016
Dartbrook Acquisition
On 24 December 2015, the company entered into a binding agreement to acquire an 83.33% interest in the Dartbrook Joint
Venture (“Dartbrook”) through the purchase of all of the shares on issue in Anglo Coal (Dartbrook) Pty Ltd, a subsidiary of
Anglo American Plc. Subsequently, on 18 May 2016, Marubeni Coal Pty Ltd formally notified the company of its decision to
exercise its tag-along right for the sale of its 16.67% interest in the Dartbrook Joint Venture to the company.
Total consideration for the acquisition includes:
● a A$30 million cash payment; and
● a royalty over the consolidated entity’s share of coal from Dartbrook at a rate of A$3.00 per tonne of coal sold or otherwise
disposed of and A$0.30 per tonne of any third party coal processed through the Dartbrook infrastructure, but capped at
A$30 million (and subject to escalation in accordance with CPI).
In addition, the consolidated entity will be replacing approximately A$9.245 million in financial assurances in respect of the
Dartbrook mining tenements.
As at the date of this report, completion of the acquisition is subject to certain conditions precedent, including:
● Marubeni releasing Anglo from any further liability in respect of the Dartbrook Joint Venture, which it has agreed to do
on completion of the sale of its interest;
receipt of standard regulatory consents relating to tenement change of control conditions;
the company providing reasonable evidence of its ability to replace the financial assurances of approximately A$9.245
million referred to above. The company has agreed to pay a break fee of $500,000 if it is unable to satisfy this condition
(subject to all other conditions having been satisfied); and
in respect of the Marubeni acquisition, Foreign Investment Review Board approval, if applicable.
●
●
●
The company has paid deposits of $500,000 to Anglo and $100,000 to Marubeni. A further $24,500,000 has been paid into
an escrow account to enable completion of the acquisition upon the remaining conditions precedent being waived or satisfied.
The company announced on 27 April 2016 that cornerstone investor Trepang Services Pty Ltd has undertaken to provide
the necessary purchase consideration of $5 million by way of a secured, interest bearing, loan to the company for the
Marubeni acquisition. The loan has a three-year term and an interest rate of 10% per annum. The provision of the loan is
subject to the execution of a general security deed over all property of the Company and the receipt of all required waivers
to the grant of the security as required by the ASX Listing Rules.
During the half-year the company has also focused on the review of its existing exploration tenements and potential future
drilling programs to assess the likelihood of further development of the assets or their potential sale.
3
Australian Pacific Coal Limited
Directors' report
30 June 2016
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 - Non-renounceable rights issue:
During the half-year the company undertook 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 (Rights Issue or Offer). The
Rights Issue closed on 19 October 2015.
The company issued a total of 263,443,395 fully paid ordinary shares under the rights issue raising gross proceeds of
$1,053,773.58. This issue was in respect of entitlements, applications for additional shares by eligible shareholders and the
placement of shortfall shares.
Changes in capital structure - Cornerstone investors Bentley Resources Pte Ltd and Trepang Services Pty Ltd:
On 30 October 2015 Australian Pacific Coal Limited, following Shareholder approval at the company’s Extraordinary
General Meeting, completed each of the Share Subscription Agreements between the company and two cornerstone
investors, Bentley Resources Pte Ltd and Trepang Services Pty Ltd.
The company issued and allotted 1,650,000,000 fully paid ordinary shares at an issue price of $0.004 per share
(Subscription Shares) to each of Bentley (and its nominees) and Trepang to raise a total of $13,200,000 pursuant to the
Share Subscription Agreements and Converting Loan Deeds entered into with each party.
Changes in capital structure - Settlement of outstanding liabilities to directors:
Resolutions put to the company shareholders at the Extraordinary General Meeting of the company held on 30 October
2015 also contemplated the issue of shares to directors of the company for deferred fees and expenses and outstanding
director fees. Following approval of these resolutions by shareholders, the company issued and allotted the following:
● 125,460,000 ordinary shares to Peter Ziegler in lieu of deferred fees and expenses;
● 122,490,000 ordinary shares to Paul Byrne in lieu of deferred fees and expenses, (collectively the Deferred Fees Shares);
and
● 45,375,000 ordinary shares to Peter Ziegler in lieu of outstanding director fees;
● 27,225,000 ordinary shares to Paul Byrne in lieu of outstanding director fees;
● 24,750,000 ordinary shares to Paul Ingram in lieu of outstanding director fees; and
● 24,750,000 ordinary shares to Paul Ryan in lieu of outstanding director fees.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
No other matter or circumstance has arisen since 30 June 2016 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
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 and development 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 consolidated entity is subject to the reporting requirements of both the Energy Efficiency Opportunities Act 2006 and the
National Greenhouse and Energy Reporting Act 2007.
The Energy Efficiency Opportunities Act 2006 requires the consolidated entity to assess its energy usages, including the
identification, investigation and evaluation of energy saving opportunities, and to report publicly on the assessments
undertaken, including what action the consolidated entity intends to take as a result. Due to this Act, the consolidated entity
has registered with the Department of Resources, Energy and Tourism as a participant entity and reports the results from its
assessments.
4
Australian Pacific Coal Limited
Directors' report
30 June 2016
The National Greenhouse and Energy Reporting Act 2007 require the consolidated entity to report its annual greenhouse
gas emissions and energy use. The consolidated entity has implemented systems and processes for the collection and
calculation of this data.
Further information on the reporting and results of both the above Acts can be found on the consolidated entity's website.
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Mr Peter Ziegler
Non-executive Chairman
B. Com (Hons), LL.B (Hons); MFM (Qld), FCPA, FTIA, 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:
Nil
Former directorships (last 3 years): Nil
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
Chairman of the Audit Committee
189,903,334
None
None
Name:
Title:
Qualifications:
Experience and expertise:
Mr John Robinson
Managing Director and Chief Executive Officer
B. Acc
Mr Robinson gained a Bachelor of Accounting from the Charles Darwin University and
has led numerous private equity acquisitions in the property and retail sectors. He also
has extensive experience with the support services that the mining and oil and gas
sector require at Australian operations. Director since 30 October 2015 and was
promoted to Managing Director in July 2016.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
1,667,000,000
Interests in shares:
None
Interests in options:
None
Contractual rights to shares:
Name:
Title:
Experience and expertise:
Mr Paul Byrne
Executive Director
Mr Byrne 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. He has
initiated environmental remediation projects in conjunction with CSIRO, University of
South Australia and the Queensland Department of Primary industries. 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:
194,206,471
Interests in shares:
None
Interests in options:
None
Contractual rights to shares:
5
Australian Pacific Coal Limited
Directors' report
30 June 2016
Name:
Title:
Experience and expertise:
Other current directorships:
Mr. Shane Stone
Non-executive Director
AC QC, PGDK, B.A (ANU), LLB (Melbourne), Grad Dip Ed Admin (Adelaide), Dip
Teaching (Sturt), TPTC (Vic), FACE, FAIM, FAICD, F Fin
Mr Stone has a strong commercial and legal background and considerable
experience in dealing with Commonwealth and State governments. Mr Stone has at
various times acted as an independent director to various public and private
companies. Currently Deputy Chairman UK listed Impellam plc, Chairman of ASX
listed Regalpoint Resources Limited and Chairman of Mayfair Limited (Anne Street
Partners and QNV Constructions). Former Chief Minister of the Northern Territory and
Federal President of the Liberal Party of Australia. Formerly a barrister he is a
graduate of the Australian National University, Sturt, Adelaide and Melbourne
Universities. He is a Fellow of the Australian Institute of Management, Australian
College of Education and Australian Institute of Company Directors. He was made a
Companion of the Order of Australia in 2006. He has also been conferred national
awards from Indonesia and Malaysia. Director since 1 August 2016.
Chairman of Regalpoint Resources Limited (since 27 January 2010)
Executive Chairman of the APAC Group
Deputy Chairman and Independent Non-executive Director of Impellam Plc (UK)
(since 19 September 2011)
Former directorships (last 3 years): Chairman of Energex Limited (from 31 May 2012 to 20 March 2015)
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
None
6,500,000 ordinary shares
None
None
Name:
Title:
Experience and expertise:
Mr Nathan Tinkler (resigned on 9 February 2016)
Former Executive Director
Mr Tinkler has experience in the development of mining assets. He founded Aston
Resources Limited and was significantly involved in the development of Whitehaven
Coal Limited and the Middlemount Project.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
Not applicable as no longer a director
Interests in shares:
Not applicable as no longer a director
Interests in options:
Not applicable as no longer a director
Contractual rights to shares:
6
Australian Pacific Coal Limited
Directors' report
30 June 2016
Name:
Title:
Experience and expertise:
Other current directorships:
Paul Ingram (resigned on 30 October 2015)
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 eight years. Mr Ingram has an extensive network of professional contacts
combined with close ties to the Chinese resource industry. Mr. Ingram joined the Board
of Australian Pacific Coal Limited as a Non-executive Director on 17 March 2011.
A-Cap Resources Limited (since 1 June 2009)
Impact Minerals Limited (since 20 July 2009)
Former directorships (last 3 years): Consolidated Global Investments Limited (27 September 2006 to 1 September 2015)
Special responsibilities:
Interests in shares:
Interests in options:
Contractual rights to shares:
None
Not applicable as no longer a director
Not applicable as no longer a director
Not applicable as no longer a director
Name:
Title:
Experience and expertise:
Paul Ryan (resigned on 30 October 2015)
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 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:
Not applicable as no longer a director
Interests in shares:
Not applicable as no longer a director
Interests in options:
Not applicable as no longer a director
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 Bus (Acc), CA has held the role of Company Secretary since 30 June 2008 (excluding the period
from 30 October 2015 to 22 June 2016), 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.
Mr Shane Cranswick held the role of Company Secretary from 30 October 2015 to 22 June 2016.
7
Australian Pacific Coal Limited
Directors' report
30 June 2016
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 2016, and the number of meetings attended by each director were:
Full board
Audit and Risk Committee
Attended
Held
Attended
Held
Mr. Peter Ziegler
Mr John J Robinson
Mr Paul Byrne
Mr Paul Ingram
Mr Paul Ryan
Mr Nathan Tinkler
21
15
20
6
5
5
21
15
21
6
6
5
2
1
-
-
-
-
2
1
-
-
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
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 it is considered to conform 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 has structured an executive remuneration framework that is market competitive and complementary to the reward
strategy of the consolidated entity.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
● having economic profit as a core component of plan design
● focusing 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 financial and non-financial drivers of
value
● attracting and retaining high calibre executives
8
Australian Pacific Coal Limited
Directors' report
30 June 2016
Additionally, the reward framework seeks to enhance executives' interests by:
● rewarding capability and experience
● reflecting competitive reward for contribution to growth in shareholder wealth
● providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive director’s 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.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the General Meeting held on 30 October 2015, where the shareholders
approved a maximum annual aggregate remuneration of $500,000.
Executive remuneration
The consolidated entity aims to reward executives based on their position and responsibility, with a level and mix of
remuneration which has both fixed and variable components.
The executive remuneration and reward framework has four components:
● base pay and non-monetary benefits
● short-term performance incentives
● share-based payments
● other remuneration such as superannuation and long service leave
The combination of these components comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, is reviewed annually by the Board
and subject to individual contracts is based on individual and business unit 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 performance hurdles
of executives. STI incentives are granted to executives based on specific annual targets and key performance indicators
('KPI's') being achieved.
The long-term incentives ('LTI') include long service leave and share-based payments. Shares are awarded to executives
based on long-term incentive measures. These include increase in shareholders value relative to the entire market and the
increase compared to the consolidated entity's direct competitors. The Board is currently reviewing the company’s long-term
equity-linked performance incentives.
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of, and outcomes achieved for, the consolidated
entity together with bonus and incentive payments at the discretion of the Board.
The Board is of the opinion that continued improved results will be attributable in part to the adoption of performance based
compensation with this form of compensation likely to lead to increasing shareholder wealth in the coming years.
Voting and comments made at the company's 2015 Annual General Meeting ('AGM')
At the 2015 AGM, shareholders voted unanimously to support the adoption of the remuneration report for the year ended 30
June 2015. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
9
Australian Pacific Coal Limited
Directors' report
30 June 2016
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
● John Robinson – Non-executive Director (from 30 October 2015), Executive Director (from 9 March 2016), Chief
Executive Officer (from 13 April 2016), Managing Director (from 7 July 2016)
● Paul Byrne – Executive Director
● Nathan Tinkler – Managing Director and Chief Executive Officer (from 30 October 2015 to 9 February 2016)
● Paul Ingram – Non-executive Director (to 30 October 2015)
● Paul Ryan – Non-executive Director (to 30 October 2015)
And the following persons:
● Kevin Mischewski - Company Secretary and Chief Financial Officer
● Shane Cranswick – Company Secretary and Chief Financial Officer (from 30 October 2015 to 22 June 2016)
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
2016
Non-Executive
Directors:
Peter Ziegler
(Chairman)
Paul Ingram
Paul Ryan
260,011
12,000
12,000
-
-
-
Executive
Directors:
John J Robinson
Paul Byrne
Nathan Tinkler
122,748
216,009
140,619
-
-
200,000
Other Key
Management
Personnel:
Kevin Mischewski
Shane Cranswick
213,440
331,752
1,308,579
-
100,000
300,000
-
-
-
-
-
-
-
-
-
-
-
-
11,661
-
-
11,400
18,644
41,705
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
260,011
12,000
12,000
134,409
216,009
340,619
224,840
-
492,700
943,096
492,700 2,142,984
10
Australian Pacific Coal Limited
Directors' report
30 June 2016
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
shares
$
Equity-
settled
options
$
Total
$
2015
Non-Executive
Directors:
Peter Ziegler
(Chairman)
Paul Ingram
Paul Ryan
Executive
Directors:
Paul Byrne
Other Key
Management
Personnel:
Kevin Mischewski
268,800
36,000
36,000
242,400
214,300
797,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
268,800
36,000
36,000
-
242,400
-
-
214,300
797,500
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:
John J Robinson
Paul Byrne
Nathan Tinkler
Other Key Management
Personnel:
Kevin Mischewski
Shane Cranswick
Fixed remuneration
2015
2016
At risk - STI
At risk - LTI
2016
2015
2016
2015
100%
100%
100%
100%
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:
Nathan Tinkler
Other Key Management Personnel:
Shane Cranswick
Cash bonus paid/payable
2016
2015
Cash bonus forfeited
2015
2016
100%
100%
-
-
-
-
-
-
11
Australian Pacific Coal Limited
Directors' report
30 June 2016
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details
of these agreements are as follows:
Current agreements:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Peter Ziegler
Non-executive Chairman
30 October 2015
Ongoing appointment, subject to termination rights noted below.
Consultancy Agreement with Peter Ziegler & Co Pty Ltd an entity associated with Mr
Ziegler. Consultancy fees for the year ending 30 June 2017 of $250,000 to be indexed
for inflation on the 1 January of each year commencing on 1 January 2017, and to be
reviewed by the Board in light of any increases in the market for similar positions held.
To the extent that the company agrees that the consultant is to provide any additional
professional or executive services outside of Mr Ziegler’s role as non-executive
Chairman, these services will be remunerated on terms reasonably agreed from time
to time. Mr Ziegler or his nominee is eligible to receive any forms of equity type
compensation as reasonably determined by the Board from time to time. Death &
disability insurance will be provided and the consultant will be reimbursed for out of
pocket expenses as well as costs pertaining to relevant trade shows, seminars,
professional memberships, and Continuing Professional Development together with
incidental AQC related business expenditure. The consultant may give 3 months’ notice
of termination. The company may terminate the arrangements without cause by giving
12 months’ written notice or by making payment in lieu of such notice. Such payment
shall not be more than the maximum amount permitted by the Corporations Act on
termination in such circumstances, unless shareholder approval is obtained pursuant
to the Corporations Act.
John Robinson
Managing Director and Chief Executive Officer
30 October 2015
Ongoing appointment, subject to termination rights noted below.
Base salary for the year ending 30 June 2017 of $250,000 including superannuation to
be indexed for inflation on the 1 January of each year commencing on 1 January 2017,
and to be reviewed by the Board in light of any increases in the market for similar
positions held. Mr Robinson or his nominee is eligible to receive any forms of equity
type compensation as reasonably determined by the Board from time to time. Death &
disability insurance will be provided and the consultant will be reimbursed for out of
pocket expenses as well as costs pertaining to relevant trade shows, seminars,
professional memberships, and Continuing Professional Development together with
incidental AQC related business expenditure. The officer may give 3 months’ notice of
termination. The company may terminate the arrangements without cause by giving 12
months’ written notice or by making payment in lieu of such notice. Such payment shall
not be more than the maximum amount permitted by the Corporations Act on
termination in such circumstances, unless shareholder approval is obtained pursuant
to the Corporations Act.
Paul Byrne
Executive Director
30 October 2015
Ongoing appointment, subject to termination rights noted below.
Consultancy Agreement with Moray Holdings (Qld) Pty Ltd an entity associated with Mr
Byrne. Consultancy fees for the year ending 30 June 2017 of $200,000 to be indexed
for inflation on the 1 January of each year commencing on 1 January 2017, and to be
reviewed by the Board in light of any increases in the market for similar positions held.
Mr Byrne or his nominee is eligible to receive any forms of equity type compensation
as reasonably determined by the Board from time to time. Death & disability insurance
will be provided and the consultant will be reimbursed for out of pocket expenses as
12
Australian Pacific Coal Limited
Directors' report
30 June 2016
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Terminated agreements:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
well as costs pertaining to relevant trade shows, seminars, professional memberships,
and Continuing Professional Development together with incidental AQC related
business expenditure. The consultant may give 3 months’ notice of termination. The
company may terminate the arrangements without cause by giving 9 months’ written
notice or by making payment in lieu of such notice. Such payment shall not be more
than the maximum amount permitted by the Corporations Act on termination in such
circumstances, unless shareholder approval is obtained pursuant to the Corporations
Act.
Kevin Mischewski
Company Secretary and Chief Executive Officer
30 October 2015
Ongoing appointment, subject to termination rights noted below.
Base salary for the year ending 30 June 2017 of $180,000 plus superannuation to be
indexed for inflation on the 1 January of each year commencing on 1 January 2017,
and to be reviewed by the Board in light of any increases in the market for similar
positions held. Mr Mischewski or his nominee is eligible to receive any forms of equity
type compensation as reasonably determined by the Board from time to time. Death &
disability insurance will be provided and the employee will be reimbursed for out of
pocket expenses as well as costs pertaining to relevant trade shows, seminars,
professional memberships, and Continuing Professional Development together with
incidental AQC related business expenditure. Mr Mischewski may give 3 months’ notice
of termination. The company may terminate the arrangements without cause by giving
9 months’ written notice or by making payment in lieu of such notice. Such payment
shall not be more than the maximum amount permitted by the Corporations Act on
termination in such circumstances, unless shareholder approval is obtained pursuant
to the Corporations Act.
Nathan Tinkler
Managing Director and Chief Executive Officer
30 October 2015
The agreement was terminated on 9 February 2016 on Mr Tinkler’s resignation as a
director of the company.
Consultancy Agreement with Bentley Resources Australia Pty Ltd an entity associated
with Mr Tinkler, pursuant to which Mr Tinkler is to be provided to act as Chief Executive
Officer and Managing Director. Consultancy fees for the year ending 30 June 2017 of
$500,000 to be indexed for inflation on the 1 January of each year commencing on 1
January 2017, and to be reviewed by the Board in light of any increases in the market
for similar positions held. Mr Tinkler was paid a sign on bonus of $200,000. To the
extent that the company agrees that the consultant is to provide any additional
professional or executive services outside of Mr Tinkler’s role as Managing Director
and Chief Executive Officer, these services will be remunerated on terms reasonably
agreed from time to time. Mr Tinkler or his nominee is eligible to receive any forms of
equity type compensation as reasonably determined by the Board from time to time.
Death & disability insurance will be provided and the consultant will be reimbursed for
out of pocket expenses as well as costs pertaining to relevant trade shows, seminars,
professional memberships, and Continuing Professional Development together with
incidental AQC related business expenditure. The consultant may give 3 months’ notice
of termination. The company may terminate the arrangements without cause by giving
12 months’ written notice or by making payment in lieu of such notice. Such payment
shall not be more than the maximum amount permitted by the Corporations Act on
termination in such circumstances, unless shareholder approval is obtained pursuant
to the Corporations Act.
13
Australian Pacific Coal Limited
Directors' report
30 June 2016
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Shane Cranswick
Company Secretary and Chief Financial Officer
30 October 2015
The agreement was terminated on 22 June 2016.
Base salary for the year ending 30 June 2016 of $250,000 plus superannuation to be
indexed for inflation on the 1 January of each year commencing on 1 January 2017,
and to be reviewed by the Board in light of any increases in the market for similar
positions held. Mr Cranswick was paid a sign on bonus of $100,000. Mr Cranswick or
his nominee was eligible to receive any forms of equity type compensation as
reasonably determined by the Board from time to time. Death & disability insurance
was to be provided and the employee will be reimbursed for out of pocket expenses as
well as costs pertaining to relevant trade shows, seminars, professional memberships,
and Continuing Professional Development together with incidental AQC related
business expenditure. On termination of the agreement Mr Cranswick received 9
month’s payment in lieu of notice, limited to the maximum amount permitted by the
Corporations Act on termination in such circumstances, unless shareholder approval is
obtained pursuant to the Corporations Act.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are as follows:
Grant date
Vesting date and
exercisable date
Expiry date
Exercise price at grant date
Fair value
per option
3 November 2016
3 November 2016
31 March 2017
$0.008 0.4927 cents
Options granted carry no dividend or voting rights.
The number of options over ordinary shares granted to and vested by directors and other key management personnel as
part of compensation during the year ended 30 June 2016 are set out below:
Name
Shane Cranswick
Number of
options
granted
Number of
options
granted
Number of
options
vested
Number of
options
vested
during the
during the
during the
during the
year
2016
year
2015
year
2016
year
2015
100,000,000
- 100,000,000
-
Values of options over ordinary shares granted, exercised and lapsed for directors and other key management personnel as
part of compensation during the year ended 30 June 2016 are set out below:
Name
Shane Cranswick
Value of
options
granted
during the
Value of
options
exercised
during the
Value of
options
lapsed
during the
year
$
year
$
year
$
Remuneration
consisting of
options
for the
year
%
492,700
-
-
52.24%
14
Australian Pacific Coal Limited
Directors' report
30 June 2016
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
John Robinson
Paul Byrne
Nathan Tinkler *
Paul Ingram *
Paul Ryan *
Kevin Mischewski
Shane Cranswick *
3,284,167
-
22,667,304
-
1,150,000
-
300,000
-
27,401,471
- 189,903,334
- 186,619,167
- 1,677,000,000
- 1,677,000,000
1,000,000 194,206,471
- 172,539,167
-
- 1,677,000,000 1,677,000,000
-
1,150,000
-
-
-
-
-
-
300,000
-
-
-
-
-
-
-
- 3,713,158,334 1,679,150,000 2,061,409,805
*
Disposals/other represents disposals of shares during the period and the shares held at resignation date.
Option holding
The number of options over ordinary 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:
Options over ordinary shares
Shane Cranswick
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
- 100,000,000
- 100,000,000
-
-
- 100,000,000
- 100,000,000
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 other
than those transactions disclosed within this annual financial report.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Australian Pacific Coal Limited under option at the date of this report are as follows:
Grant date
3 November 2015
Expiry date
31 March 2017
Exercise
price
Number
under option
$0.008 100,000,000
No person entitled to exercise the 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.
15
Australian Pacific Coal Limited
Directors' report
30 June 2016
Shares issued on the exercise of options
The following ordinary shares of Australian Pacific Coal Limited were issued during the year ended 30 June 2016 and up to
the date of this report on the exercise of options granted:
Date options granted
3 November 2015
Exercise
price
Number of
shares issued
$0.008 12,500,000
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 25 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 25 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
● all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of
the auditor; and
● none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
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.
16
Australian Pacific Coal Limited
Directors' report
30 June 2016
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
immediately after this directors' report.
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 2016
Brisbane
17
18 Australian Pacific Coal Limited
Contents
30 June 2016
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
20
21
22
23
24
62
63
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 2016. The
directors have the power to amend and reissue the financial statements.
19
Australian Pacific Coal Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2016
Revenue from continuing operations
Sale of interest in tenements
Other income
Expenses
Cost of goods sold
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
Business combinations expense
Administration and consulting expenses
Finance costs
Profit before income tax expense from continuing operations
Income tax expense
Consolidated
Note
2016
$
2015
$
4
5
6
6
6
7
129,828
6,730
-
-
15,000
120,705
(1,699)
(1,449,277)
(30,769)
76,575
-
-
(59,723)
-
(539,050)
(615,174)
(2,654,375)
(847,340)
-
(215,201)
(30,659)
(109,170)
650
(74,000)
(49,848)
(30,700)
(424,335)
-
(1,128,452)
(3,282)
(5,991,001)
(1,922,562)
-
-
Profit after income tax expense from continuing operations
(5,991,001)
(1,922,562)
Profit after income tax expense from discontinued operations
-
-
Profit after income tax expense for the year
(5,991,001)
(1,922,562)
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
Total comprehensive income for the year is attributable to:
Owners of Australian Pacific Coal
-
-
(5,991,001)
(1,922,562)
(5,991,001)
(1,922,562)
(5,991,001)
(1,922,562)
Cents
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
(0.20)
(0.20)
(0.83)
(0.83)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
20
Australian Pacific Coal Limited
Statement of financial position
As at 30 June 2016
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Cash and cash equivalents
Receivables
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
Non-current liabilities
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits
Total equity
Consolidated
Note
2016
$
2015
$
8
9
10
28,821,692
48,615
1,226,832
30,097,139
101,201
17,389
28,180
146,770
8
11
13
14
16
285,442
103,105
346,994
1,970,793
52,083
2,758,417
-
70,773
137,169
2,440,667
67,083
2,715,692
32,855,556
2,862,462
17
18
1,350,976
20,295,965
21,646,941
1,672,936
60,000
1,732,936
19
93,343
93,343
-
-
21,740,284
1,732,936
11,115,272
1,129,526
20
21
53,179,591 37,695,544
-
(42,557,019) (36,566,018)
492,700
11,115,272
1,129,526
The above statement of financial position should be read in conjunction with the accompanying notes
21
Australian Pacific Coal Limited
Statement of changes in equity
For the year ended 30 June 2016
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 20)
Balance at 30 June 2015
37,695,544
- (36,566,018)
737,976
-
-
-
-
737,976
1,129,526
Consolidated
Issued
capital
$
Reserves
$
Retained
profits
$
Non-
controlling
interest
$
Total
equity
$
Balance at 1 July 2015
37,695,544
- (36,566,018)
-
1,129,526
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 20)
Share-based payments (note 21)
-
-
-
-
(5,991,001)
-
(5,991,001)
-
-
-
-
-
(5,991,001)
-
(5,991,001)
15,484,047
-
-
492,700
-
-
-
-
15,484,047
492,700
Balance at 30 June 2016
53,179,591
492,700 (42,557,019)
- 11,115,272
The above statement of changes in equity should be read in conjunction with the accompanying notes
22
Australian Pacific Coal Limited
Statement of cash flows
For the year ended 30 June 2016
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Borrowing costs
Consolidated
Note
2016
$
2015
$
4,250
(5,113,008)
4,800
(908,616)
(5,108,758)
125,964
(540)
(903,816)
6,730
-
Net cash from operating activities
32
(4,983,334)
(897,086)
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
Repayment of borrowings
Net cash used in financing activities
(240,594)
(69,176)
-
-
15,000
(7,230)
(88,633)
142,273
15,000
17,500
(294,770)
78,910
14,440,059
20,959,926
(525,927)
(590,021)
398,415
125,000
(55,264)
-
34,284,037
468,151
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
20,005,933
101,201
(350,025)
451,226
Cash and cash equivalents at the end of the financial year
8
29,107,134
101,201
The above statement of cash flows should be read in conjunction with the accompanying notes
23
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
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.
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.
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 to support existing projects including the acquisition of Dartbrook coal mine.
● Development and exploitation of its coal tenements.
Budgeted expenditure will allow the Company to meet tenement commitments on tenements which are not planned to
be relinquished. If tenement commitments are not met then the Company will seek a variation of required expenditure
from the relevant authority which, it is expected, will be granted.
● Realisation of surplus assets.
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 29.
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 2016 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.
24
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 1. Significant accounting policies (continued)
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.
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.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Australian Pacific Coal Limited's functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
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.
25
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 1. Significant accounting policies (continued)
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.
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 the
consolidated entity's 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.
26
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 1. Significant accounting policies (continued)
A liability is classified as current when: it is either expected to be settled in the consolidated entity's 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.
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.
Cost is determined on the following basis:
(a) Bentonite on hand is valued on an average total production cost method
(b) Ore stockpiles are valued at the average cost of mining and stockpiling the ore, including haulage
(c) A proportion of related depreciation and amortisation charge is included in the cost of inventory
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.
27
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 1. Significant accounting policies (continued)
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.
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 historical cost. On any revaluation, 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.
28
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 1. Significant accounting policies (continued)
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 - 10 years
5 - 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.
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 ore bodies to define further
mineralisation in existing ore bodies, 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.
29
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
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.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an
equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance
cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders
equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured
in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
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, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
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 corporate 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.
30
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 1. Significant accounting policies (continued)
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of
any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
● during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
● from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
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.
31
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 1. Significant accounting policies (continued)
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.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
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.
32
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
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 2016. 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.
33
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
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 2018. 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 2018 but the impact of its adoption is yet to be assessed by the consolidated entity.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. The standard replaces AASB
117 'Leases' and for lessees will eliminate the classifications of operating leases and finance leases. Subject to exceptions,
a 'right-of-use' asset will be capitalised in the statement of financial position, measured as the present value of the
unavoidable future lease payments to be made over the lease term. The exceptions relate to short-term leases of 12 months
or less and leases of low-value assets (such as personal computers and small office furniture) where an accounting policy
choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as incurred.
A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease incentives
received, initial direct costs incurred and an estimate of any future restoration, removal or dismantling costs. Straight-line
operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included in operating
costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods of the lease,
the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117.
However EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results will be improved as the operating
expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within the
statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest (either
operating or financing activities) component. For lessor accounting, the standard does not substantially change how a lessor
accounts for leases. The consolidated entity will adopt this standard from 1 July 2019 but the impact of its adoption is yet to
be assessed by the consolidated entity.
34
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
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.
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
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 debtor's financial position.
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 productive process are accumulated as stockpiles, minerals in process and product inventory. Net realisable
value tests are performed at least annually and represent the estimated future sales price of the product based on prevailing
metal prices, less estimated costs to complete production and bring the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, and the estimated
recovery percentage based on the expected processing method. Stockpile tonnages are verified by periodic surveys.
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.
35
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 2. Critical accounting judgements, estimates and assumptions (continued)
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.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
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.
Note 3. Operating segments
Identification of reportable operating segments
The consolidated entity is currently 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
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.
36
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 3. Operating segments (continued)
Operating segment information
Consolidated – 2016
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 loans receivable
- 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
mining
$
Unallocated
$
Total
$
-
2
2
-
2
3,864
-
3,864
-
3,864
-
125,963
125,963
-
125,963
3,864
125,965
129,829
-
129,829
567,516
45,015
5,378,470
5,991,001
5,991,001
30,769
(76,575)
59,723
539,050
-
-
1,970,793
33,849
2,004,642
- 29,107,134 29,107,134
346,994
227,297
1,970,793
-
1,378,553
1,430,635
30,712,984 32,855,556
119,697
-
18,233
137,930
-
-
-
-
-
220,961
-
220,961
14,242
3,280
21,722,762 21,740,284
21,740,284
37
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
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
mining
$
Unallocated
$
Total
$
15,000
8
15,008
-
15,008
-
1
1
120,705
120,706
-
6,721
6,721
-
6,721
15,000
6,730
21,730
120,705
142,435
(538,985)
69,681
(1,453,258)
(1,922,562)
(1,922,562)
-
1,350
-
74,000
17,434
17,628
(2,000)
-
-
32,414
13,031
109,170
-
-
30,659
(650)
109,170
74,000
49,848
424,335
-
-
424,335
-
-
2,440,667
51,340
2,492,007
-
153,135
-
130,833
-
18,377
149,210
101,201
6,336
-
113,708
221,245
102,201
137,169
2,440,667
183,425
2,862,462
-
-
-
6,950
-
160,085
210,511
3,298
1,519,127
1,732,936
1,732,936
38
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
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
Finance costs
Interest and finance charges paid/payable
Finance costs expensed
39
Consolidated
2016
$
2015
$
3,864
3,864
-
-
125,964
125,964
6,730
6,730
129,828
6,730
Consolidated
2016
$
2015
$
-
-
120,705
120,705
Consolidated
2016
$
2015
$
1,699
-
5,957
-
24,812
5,957
6,066
18,636
30,769
30,659
847,340
3,282
847,340
3,282
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 6. Expenses (continued)
Rental expense relating to operating leases
Minimum lease payments
Superannuation expense
Defined contribution superannuation expense
Share-based payments expense
Share-based payments expense
Note 7. Income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense from continuing operations
Profit 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
Consolidated
2016
$
2015
$
595,747
133,967
54,317
4,170
492,700
-
Consolidated
2016
$
2015
$
(5,991,001)
-
(1,922,562)
-
(5,991,001)
(1,922,562)
(1,797,301)
(576,769)
9,231
352,017
(22,973)
21,414
(1,437,612)
9,198
129,073
55,146
(61,303)
(444,655)
Tax losses and temporary differences not brought into account
1,437,612
444,655
Income tax expense
-
-
40
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 8. Cash and cash equivalents
Current:
Cash at bank and on hand
Cash on deposit
Non-current:
Cash on deposit
Consolidated
2016
$
2015
$
4,321,692
24,500,000
28,821,692
51,201
50,000
101,201
285,442
285,442
-
-
29,107,134
101,201
The non-current cash on deposit amount represents restricted term deposit facilities
provided as security for finance and bank guarantee facilities that company’s bankers have
provided to the consolidated entity.
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
29,107,134
101,201
29,107,134
101,201
Note 9. Current assets - trade and other receivables
Trade receivables
Other receivables
Less: Provision for impairment of receivables
Consolidated
2016
$
2015
$
-
63,015
(14,400)
-
17,389
-
48,615
17,389
Impairment of receivables
The consolidated entity has recognised a loss of $14,400 (2015: $Nil) in profit or loss in respect of impairment of current
receivables for the year ended 30 June 2016.
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
41
Consolidated
2016
$
2015
$
14,400
-
-
14,400
-
-
-
-
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 9. Current assets - trade and other receivables (continued)
Movements in the provision for impairment of receivables are as follows:
Opening balance
Additional provisions recognised
Closing balance
Consolidated
2016
$
2015
$
-
14,400
14,400
-
-
-
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $Nil as at 30 June 2016
($Nil as at 30 June 2015).
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
Security deposits
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
2016
$
2015
$
626,832
600,000
28,180
-
1,226,832
28,180
Consolidated
2016
$
2015
$
287,348
(247,143)
28,950
(23,850)
587,850
(530,050)
551,848
(545,118)
28,950
(28,350)
381,993
(318,550)
103,105
70,773
Impairment of receivables
The consolidated entity has recognised a gain of $90,975 (2015: $109,170 loss) in profit or loss in respect of impairment of
non-current receivables for the year ended 30 June 2016. 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.
42
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
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
2016
$
2015
$
801,043
-
-
892,018
-
-
801,043
892,018
Consolidated
2016
$
2015
$
892,018
(90,975)
782,848
109,170
801,043
892,018
Past due but not impaired
Customers with balances past due but without provision for impairment of receivables amount to $Nil as at 30 June 2016
($58,643 as at 30 June 2015).
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
2016
$
2015
$
-
-
-
-
58,643
-
-
58,643
43
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
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 and previous
financial year are set out below:
Opening fair value
Less: Impairment
Closing fair value
Refer to note 23 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
2016
$
2015
$
-
-
-
-
-
74,000
(74,000)
-
Consolidated
2016
$
2015
$
148,924
(42,205)
106,719
46,224
(19,803)
26,421
148,924
(36,248)
112,676
19,803
(19,803)
-
455,214
(241,360)
213,854
247,856
(223,363)
24,493
346,994
137,169
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 2014
Additions
Disposals
Depreciation expense
Balance at 30 June 2015
Additions
Depreciation expense
Balance at 30 June 2016
Land and
buildings
$
Leasehold
improvements Equipment
Plant and
$
$
Total
$
118,633
-
-
(5,957)
112,676
-
(5,957)
666
5,400
-
(6,066)
-
26,421
-
66,149
1,550
(24,570)
(18,636)
24,493
214,173
(24,812)
185,448
6,950
(24,570)
(30,659)
137,169
240,594
(30,769)
106,719
26,421
213,854
346,994
44
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 14. Non-current assets - exploration and evaluation
Exploration and evaluation - at cost
Consolidated
2016
$
2015
$
1,970,793
2,440,667
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 2014
Additions
Impairment
Disposals
Tenements surrendered
Balance at 30 June 2015
Additions
Tenements surrendered
Balance at 30 June 2016
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
Exploration
and
evaluation
$
Total
$
2,741,917
153,135
650
(30,700)
(424,335)
2,741,917
153,135
650
(30,700)
(424,335)
2,440,667
69,176
(539,050)
2,440,667
69,176
(539,050)
1,970,793
1,970,793
Consolidated
2016
$
2015
$
277,892
10,747,456
1,173,396
79,501
9,309,837
1,173,396
Deferred tax assets not brought to account
12,198,744 10,562,734
Deferred tax assets
-
-
The benefit of deferred tax assets will only be realised if the conditions for deductibility set out
in note 1 occur.
45
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 16. Non-current assets - other
Security deposits
Note 17. Current liabilities - trade and other payables
Trade payables
Accrued interest – convertible securities
Other payables
Refer to note 22 for further information on financial instruments.
Note 18. Current liabilities - borrowings
Bank loans
Convertible securities
Insurance premium funding
Consolidated
2016
$
2015
$
52,083
67,083
Consolidated
2016
$
2015
$
523,579
827,397
-
291,536
-
1,381,400
1,350,976
1,672,936
Consolidated
2016
$
2015
$
66,014
20,000,000
229,951
-
60,000
-
20,295,965
60,000
On 1 February 2016 the consolidated entity issued two convertible securities, with a face value of $10,000,000 each, for total
proceeds of $20,000,000. Interest is payable at a rate of 10.0% per annum based on the face value. The notes are convertible
into ordinary shares of the parent entity, at any time at the option of the holder, or repayable on 1 February 2017, with an
ability for the financier to request (and for the company to accept such request) to extend the maturity date by two further
periods of 1 year (with the last possible maturity date being 1 February 2019). The number of ordinary shares to be issued
is calculated as the conversion amount divided by the market price per share at the date of the issue of the convertible
securities ($0.015), but subject to adjustments for reconstructions of equity.
Total transactions costs were $Nil at the date of issue and unamortised transaction costs of $Nil (2015: $Nil) have been
offset against the convertible notes payable liability.
The convertible notes are currently unsecured with security terms to be put to shareholders for approval at a general
meeting of the company.
Refer to note 19 for further information on assets pledged as security and financing arrangements.
Refer to note 22 for further information on financial instruments.
46
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 19. Non-current liabilities - borrowings
Bank loans
Consolidated
2016
$
2015
$
93,343
93,343
-
-
Trepang Services Pty Ltd has undertaken to provide $5,000,000 by way of a secured, interest bearing, loan to the
consolidated entity for the purpose of providing the funding necessary to purchase Marubeni Coal Pty Ltd’s 16.67% interest
in the Dartbrook Joint Venture. The loan has a three-year term and an interest rate of 10% per annum. The provision of the
Loan is subject to the execution of a general security deed over all property of the Company and the receipt of all required
waivers to the grant of the security as required by the ASX Listing Rules. As at the date of this report the loan had not been
drawn.
Refer to note 22 for further information on financial instruments.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank loans
Insurance premium funding
Assets pledged as security
The bank loans are secured by a restricted short term deposit held by the bank.
The insurance premium funding is secured by the underlying insurance policy.
Financing arrangements
Access was available at the reporting date to the following lines of credit:
Total facilities
Bank loans
Loan – Trepang Services Pty Ltd
Used at the reporting date
Bank loans
Unused at the reporting date
Bank loans
Loan – Trepang Services Pty Ltd
Consolidated
2016
$
2015
$
159,357
229,951
389,308
Consolidated
2016
$
2015
$
205,000
5,000,000
5,205,000
159,357
159,357
45,643
5,000,000
5,045,643
-
-
-
-
-
-
-
-
-
-
-
The provision of the Loan – Trepang Services Pty Ltd is subject to the execution of a general security deed over all
property of the Company and the receipt of all required waivers to the grant of the security as required by the ASX Listing
Rules. As at the date of this report the loan had not been drawn.
47
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 20. Equity - issued capital
2016
Shares
Consolidated
2015
Shares
2016
$
2015
$
Ordinary shares - fully paid
4,318,434,264 300,940,869 53,179,591 37,695,544
Movements in ordinary share capital
Details
Balance
Date
No of shares Issue price
$
30/06/2014
920,897,748
36,957,568
22/07/2014
Issue of shares for cash
21/08/2014
Issue of shares for cash
18/09/2014
Issue of shares for services
Issue of shares for Share Purchase Plan
09/10/2014
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
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
$0.003
$0.003
$0.0049
$0.0032
$0.002
$0.006
$0.0127
$0.004
$0.003
$0.0038
$0.003
$0.003
$0.004
100,000
50,000
50,050
188,415
50,000
60,000
49,925
40,000
50,000
28,450
50,000
50,000
26,400
(55,264)
737,976
Balance
01/07/2015
300,940,869
37,695,544
Issue of shares for cash
22/07/2015
Issue of shares on conversion of convertible security 03/08/2015
23/10/2015
Issue of shares for cash
30/10/2015
Issue of shares for cash
30/10/2015
Issue of shares for services
08/12/2015
Issue of shares for cash
Issue of shares for services
08/12/2015
Share issue transaction costs, net of tax
Total for the year
54,000,000
30,000,000
206,014,645
3,300,000,000
370,050,000
50,000,000
7,428,750
216,000
$0.004
60,000
$0.002
$0.004
824,059
$0.004 13,200,000
1,480,200
$0.004
200,000
$0.004
29,715
$0.004
(525,927)
15,484,047
Balance
30/06/2016
4,318,434,264
53,179,591
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.
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.
48
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 20. Equity - issued capital (continued)
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.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
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 2015 Annual Report.
Note 21. Equity - reserves
Share based payments reserve
Consolidated
2016
$
2015
$
492,700
492,700
-
-
Share based payments reserve
The reserve is used to recognise increments and decrements in the fair value of share based payments.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2014
Balance at 30 June 2015
Options issued
Balance at 30 June 2016
Share based
payments
$
Total
$
-
-
492,700
492,700
-
-
492,700
492,700
49
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 22. 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 and ageing analysis for credit risk.
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.
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.
An official increase/decrease in interest rates 100 (2015: 100) basis points would have an adverse/favourable effect on profit
before tax of $54,398 (2015: $3,365) 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
Unused borrowing facilities at the reporting date:
Bank loans
Loan – Trepang Services Pty Ltd
Consolidated
2016
$
2015
$
45,643
5,000,000
5,045,643
-
-
-
The bank loan facility may be drawn at any time and has an average maturity of 2 ½ years (2015: Not applicable), subject to
the terms of the loan.
50
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 22. Financial instruments (continued)
The Loan from Trepang Services Pty Ltd is available to the consolidated entity for the purpose of providing the funding
necessary to purchase Marubeni Coal Pty Ltd’s 16.67% interest in the Dartbrook Joint Venture, subject to the execution of
a general security deed over all property of the Company and the receipt of all required waivers to the grant of the security
as required by the ASX Listing Rules. As at the date of this report the loan had not been drawn.
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 - 2016
Non-derivatives
Non-interest bearing
Trade payables
Interest-bearing - fixed rate
Bank loans
Other loans
Convertible notes payable
Total non-derivatives
Consolidated - 2015
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
$
-
523,579
-
-
-
523,579
5.04%
5.69%
72,534
232,142
10.00% 20,827,397
21,655,652
72,534
-
-
72,534
24,178
-
-
24,178
169,246
-
-
232,142
- 20,827,397
- 21,752,364
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
1,482,581
-
-
-
-
-
-
-
-
-
-
-
-
291,536
1,381,400
60,000
1,482,581
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
51
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 23. Fair value measurement
Fair value hierarchy
The following tables detail the consolidated entity's assets and liabilities, measured or disclosed 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
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2016
Assets
Non-current assets - receivables
Ordinary shares available-for-sale
Total assets
Consolidated - 2015
Assets
Non-current assets - receivables
Ordinary shares available-for-sale
Total assets
Level 1
$
Level 2
$
Level 3
$
Total
$
103,105
-
103,105
Level 1
$
Level 2
$
70,773
-
70,773
-
-
-
-
-
-
Level 3
$
-
-
-
-
-
-
103,105
-
103,105
Total
$
70,773
-
70,773
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. The directors have estimated the fair value of the shares as $Nil (2015: $Nil)
52
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 24. Key management personnel disclosures (continued)
Note 24. Key management personnel disclosures
Compensation
The aggregate compensation made 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 25. Remuneration of auditors
Consolidated
2016
$
2015
$
1,608,579
41,705
-
492,700
797,500
-
-
-
2,142,984
797,500
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
Other services – Sothertons L.L.P. Chartered Accountants
Preparation of the tax return
Consolidated
2016
$
2015
$
67,000
60,995
5,200
-
73,200
60,995
53
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 26. Contingent liabilities
Dartbrook Acquisition
On 24 December 2015, the company entered into a binding agreement to acquire an 83.33% interest in the Dartbrook Joint
Venture (“Dartbrook”) through the purchase of all of the shares on issue in Anglo Coal (Dartbrook) Pty Ltd, a subsidiary of
Anglo American Plc. Subsequently, on 18 May 2016, Marubeni Coal Pty Ltd formally notified the company of its decision to
exercise its tag-along right for the sale of its 16.67% interest in the Dartbrook Joint Venture to the company.
Total consideration for the acquisition includes:
● a A$30 million cash payment; and
● a royalty over the consolidated entity’s share of coal from Dartbrook at a rate of A$3.00 per tonne of coal sold or otherwise
disposed of and A$0.30 per tonne of any third party coal processed through the Dartbrook infrastructure, but capped at
A$30 million (and subject to escalation in accordance with CPI).
In addition, the consolidated entity will be replacing approximately A$9.245 million in financial assurances in respect of the
Dartbrook mining tenements.
As at the date of this report, completion of the acquisition is subject to certain conditions precedent, including:
● Marubeni releasing Anglo from any further liability in respect of the Dartbrook Joint Venture, which it has agreed to do
on completion of the sale of its interest;
receipt of standard regulatory consents relating to tenement change of control conditions;
the company providing reasonable evidence of its ability to replace the financial assurances of approximately A$9.245
million referred to above. The company has agreed to pay a break fee of $500,000 if it is unable to satisfy this condition
(subject to all other conditions having been satisfied); and
in respect of the Marubeni acquisition, Foreign Investment Review Board approval, if applicable.
●
●
●
The company has paid deposits of $500,000 to Anglo and $100,000 to Marubeni. A further $24,500,000 has been paid into
an escrow account to enable completion of the acquisition upon the remaining conditions precedent being waived or satisfied.
The company announced on 27 April 2016 that cornerstone investor Trepang Services Pty Ltd has undertaken to provide
the necessary purchase consideration of $5 million by way of a secured, interest bearing, loan to the company for the
Marubeni acquisition. The loan has a three-year term and an interest rate of 10% per annum. The provision of the loan is
subject to the execution of a general security deed over all property of the Company and the receipt of all required waivers
to the grant of the security as required by the ASX Listing Rules.
Bank Guarantees
The consolidated entity has given bank guarantees as at 30 June 2016 of $80,442 (2015: $50,000) to its landlord.
54
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 27. 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
The consolidated entity is required to meet minimum exploration and evaluation expenditure
commitments in accordance with the terms of the tenement grant documents. Any shortfall in
annual expenditure is planned to be made up in the following period with a view to avoiding
any penalties that the government may impose. At this stage no penalties for under-
expenditure have been or are expected to be incurred.
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
2016
$
2015
$
310,000
1,923,000
-
347,717
1,231,807
-
2,233,000
1,579,524
233,707
362,040
-
6,168
11,308
-
595,747
17,476
Operating lease commitments includes contracted amounts for offices 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 28. Related party transactions
Parent entity
Australian Pacific Coal Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 30.
Key management personnel
Disclosures relating to key management personnel are set out in note 24 and the remuneration report included in the
directors' report.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current payables:
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
55
Consolidated
2016
$
2015
$
-
-
-
-
641,540
565,860
87,000
87,000
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 28. Related party transactions (continued)
Current convertible securities:
Mr. John Robinson (Snr)
Mr. Nicholas Paspaley
Consolidated
2016
$
2015
$
10,000,000
10,000,000
-
-
The company has issued convertible securities to Messer’s Robinson and Paspaley. The terms of the convertible
securities are set out at note 18
Non-current borrowings:
Trepang Services Pty Ltd
Consolidated
2016
$
2015
$
-
-
The company has entered into a Loan Agreement with Trepang Services Pty Ltd. The amount of the loan facility is
$5,000,000. As at the reporting date the loan facility had not been drawn. The terms of the loan are set out at note 19.
Non-current loans receivable:
Mr. Peter Ziegler
Mr. Paul Byrne
Mr. Paul Ingram
Mr. Kevin Mischewski
Consolidated
2016
$
2015
$
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 29. 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
2016
$
2015
$
(5,385,120)
(1,354,837)
(5,385,120)
(1,354,837)
56
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 29. Parent entity information (continued)
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Equity
Issued capital
Share based payment reserve
Retained profits
Total equity
Parent
2016
$
2015
$
29,919,225
1,207,640
79,557
438,906
31,126,865
518,463
21,606,027
93,343
1,682,595
-
21,699,370
1,682,595
53,179,591 37,695,544
-
(44,244,796) (38,859,676)
492,700
9,427,495
(1,164,132)
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity has entered into a guarantee in connection with the consolidated entities purchase of the Dartbrook coal
mine.
The parent entity has not entered into any other 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 2016 and 30 June 2015.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2016 and 30 June 2015.
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.
57
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 30. 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
AQC Investments 1 Pty Ltd
AQC Investments 2 Pty Ltd
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
Ownership interest
2015
2016
%
%
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
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%
100.00%
100.00%
100.00%
100.00%
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary with non-
controlling interests in accordance with the accounting policy described in note 1:
Principal place of
business /
Country of
incorporation
Ownership
interest
2016
%
Principal activities
Ownership
interest
2015
%
Parent
Non-controlling interest
Ownership
interest
2015
%
Ownership
interest
2016
%
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.
Note 31. Events after the reporting period
Share Subscription Agreement - AMCI Investments Pty Ltd
The company has completed a binding Share Subscription Agreement whereby AMCI International AG’s Australian
subsidiary, AMCI Investments Pty Ltd, has agreed to subscribe for $10 million of new AQC shares. These shares are to be
issued at the higher of A$0.0145 per share and 75% of the Volume Weighted Average Price calculated over the 15 trading
days on which trades in the Company’s shares were recorded immediately before the date of completion. Conditions
precedent for completion of the share subscription are that the subscriber approves the mine plan formulated for the
undertaking of the Dartbrook underground mine, not to be unreasonably withheld. The approval of the mine plan includes
approval of the mining plan and executed mining contract. Completion is to occur by 22 November 2016 or such later date
as the parties agree in writing.
Exercise of Options
On 11 August 2016 the company issued 12,500,000 ordinary shares on the exercise of 12,500,000 options at an exercise
price of $0.008 per share. Total cash consideration received for the share issue was $100,000.
58
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 32. Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
(5,991,001)
(1,922,562)
Consolidated
2016
$
2015
$
Adjustments for:
Sale of interest in tenements
Depreciation and amortisation
Impairment of non-current assets
Net gain on disposal of non-current assets
Finance costs
Share-based payments
Change in operating assets and liabilities:
Increase in trade and other receivables
Increase in prepayments
Increase/(decrease) in trade and other payables
Net cash from operating activities
Note 33. Earnings per share
Earnings per share for profit from continuing operations
Profit after income tax
Non-controlling interest
-
30,769
539,050
-
19,403
492,700
(15,000)
30,659
528,385
(117,423)
-
-
(63,558)
(1,198,652)
1,187,955
143,490
(313)
455,678
(4,983,334)
(897,086)
Consolidated
2016
$
2015
$
(5,991,001)
-
(1,922,562)
-
Profit after income tax attributable to the owners of Australian Pacific Coal Limited
(5,991,001)
(1,922,562)
Basic earnings per share
Diluted earnings per share
Earnings per share for profit
Profit after income tax
Non-controlling interest
Cents
Cents
(0.20)
(0.20)
(0.83)
(0.83)
Consolidated
2016
$
2015
$
(5,991,001)
-
(1,922,562)
-
Profit after income tax attributable to the owners of Australian Pacific Coal Limited
(5,991,001)
(1,922,562)
Basic earnings per share
Diluted earnings per share
Cents
Cents
(0.20)
(0.20)
(0.83)
(0.83)
59
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 33. Earnings per share (continued)
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic earnings per
share
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
Convertible notes
Number
Number
2,999,057,725
231,673,229
-
-
-
-
Weighted average number of ordinary shares used in calculating diluted earnings per
share
2,999,057,725
231,673,229
*
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
Resolutions put to the company shareholders at the Extraordinary General Meeting of the company held on 30 October 2015
contemplated the issue of shares to directors of the company for deferred fees and expenses and outstanding director fees.
Following approval of those resolutions by shareholders the company issued and allotted the shares.
The company has issued fully paid ordinary shares to unrelated consultants as part payment for consultancy services
provided.
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:
2016
Date of issue
30 October 2015
8 December 2015
Total
2015
Date of issue
18 September 2014
19 December 2014
13 March 2015
18 June 2015
Total
Amount payable for
services provided
$
1,480,200
29,715
1,509,915
Amount payable for
services provided
$
50,050
49,925
28,450
26,400
154,825
Number of shares issued
Issue price
(cents per share)
370,050,000
7,428,750
377,478,750
0.40
0.40
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
60
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2016
Note 34. Share-based payments (continued)
* 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 amounts
payable, net of any applicable GST, have been expensed when incurred and have no further effect on the company’s profit
or loss for the financial year.
On 3 November 2015, 100,000,000 options were issued to the Chief Financial Officer, Mr Shane Cranswick, of the
consolidated entity. The options entitle the holder to the issue of one fully paid ordinary share in the capital of the company
upon exercise at an exercise price of 0.8 cents per share. They were issued for nil consideration and were granted as an
equity compensation component of the Executive Service Agreement as resolved by the board.
The company uses the Black-Scholes pricing model for pricing equity options to calculate the fair value for accounting
purposes of the options at grant date. Market value of the company’s shares is calculated as the Volume Weighted Average
Price (VWAP) for the 30 days on which the company’s shares were traded up to and including the date the options are
granted.
For the options granted, the valuation model inputs used to determine the fair value at the grant date, are as follows:
Grant date
Expiry date
Share price
at grant date
(VWAP)
Exercise price
Expected
volatility
Dividend
yield
Risk-free
interest rate
Fair value
at grant date
03/11/2015
31/03/2017
0.97 cents
0.80 cents
100.00%
0.00%
2.00% 0.4927 cents
There are no other unissued ordinary shares of Australian Pacific Coal Limited under option at the date of this report.
61
Australian Pacific Coal Limited
Directors' declaration
30 June 2016
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 2016 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 2016
Brisbane
62
8 15 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 2016.
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
Annual Report
Year Ending 30 June 2016
Australian Pacific Coal Limited
ABN 49 089 206 986
Corporate Governance Statement
Page 65
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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Annual Report
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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
Annual Report
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Australian Pacific Coal Limited
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Corporate Governance Statement
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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 11 years, Independent Non-
executive.
Mr John Robinson (Managing Director): Appointed
30 October 2015, served 1 year, Not-independent
Executive
Mr Paul Byrne: Appointed 29 November 2005,
served 11 years, Not-independent Executive.
Mr Shane Stone: Appointed 1 August 2016, served 2
months, Independent Non-executive.
The board consists of four directors. Two of those
directors, Mr Peter Ziegler (Chairman) and Mr Shane
Stone are considered independent.
The Chair, Mr Peter Ziegler,
is considered
independent. Mr John Robinson holds the position of
CEO.
New directors undertake an
induction program
coordinated by the Company Secretary that briefs
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
inducting new directors and provide appropriate
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Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
CORPORATE GOVERNANCE STATEMENT
professional development opportunities for
directors to develop and maintain the skills and
knowledge needed to perform their role as
directors effectively.
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
the company’s
focusing on
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.
The number of Committee meetings held and
attended by each member is disclosed in the
“Meetings of directors” section of the Directors’
Annual Report
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Australian Pacific Coal Limited
ABN 49 089 206 986
Corporate Governance Statement
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CORPORATE GOVERNANCE STATEMENT
report.
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
For the financial year ended 30 June 2016 and the
half-year ended 31 December 2015, 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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Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
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
Annual Report
Year Ending 30 June 2016
Australian Pacific Coal Limited
ABN 49 089 206 986
Corporate Governance Statement
Page 71
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
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Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
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 2016
Australian Pacific Coal Limited
ABN 49 089 206 986
Corporate Governance Statement
Page 73
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 74
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
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 2016.
ASX ADDITIONAL INFORMATION
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
278
261
162
700
492
76,059
723,036
1,230,870
29,602,036
4,299,302,263
1,893
4,330,934,264
b.
The number of shareholdings held in less than a marketable parcel of 22,727 shares (closing price
$0.022 on 30 September 2016) is 934 and they hold 5,949,162 shares.
c.
The names of the substantial holders in the company as at 30 September 2016 are:
Substantial Holder
Trepang Services Pty Ltd
Nathan Tinkler
d.
Voting Rights
Number
of shares
1,677,000,000
1,677,000,000
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.
Unlisted options:
—
Options do not entitle the holders to vote in respect of the option, nor participate in dividends,
when declared, until such time as the options are exercised and subsequently registered as
ordinary shares.
Annual Report
Australian Pacific Coal Limited
Page 75
Year Ending 30 June 2016
ABN 49 089 206 986
ASX Additional Information
ASX ADDITIONAL INFORMATION
e.
20 Largest Shareholders — Ordinary Shares
Name
Trepang Services Pty Ltd
Leslie Norman Tinkler & Zelda Irene Tinkler
Merrill Lynch (Australia) Nominees Pty Limited
Halikos Pty Ltd
JVG Aust Pty Ltd
Wellton Holdings Pty Ltd
Moray Holdings (Qld) Pty Ltd
Mr Nicholas Paspaley
Bentley Resources Pte Ltd
1.
2.
3.
4.
5.
6.
7.
8.
9.
10. Mibro (NT) Pty Ltd
11. Mr Paul James Byrne
12. Mr Boutros Saad & Mrs Mariam Saad
13.
14.
Shemariah Pty Ltd
JP Morgan Nominees (Australia) Pty Ltd
15. Gordon Holdings (Qld) Pty Ltd
16.
17.
Shemariah Pty Ltd
Hotel Interiors Pty Ltd
18. Mr James Glen Foley & Mrs Karen Veronica Ruby Foley
19. Moodycorp Pty Ltd
20. MW & KM Arnold Superannuation Pty Ltd
Number of Ordinary
Fully Paid Shares
Held
1,677,000,000
% Held of
Issued
Ordinary
Capital
38.72
720,833,333
16.64
372,348,076
192,307,962
189,442,038
186,903,334
158,051,668
129,166,667
63,500,000
43,000,000
36,154,803
23,042,020
18,065,000
17,197,889
17,108,383
17,000,000
15,235,179
13,463,500
11,180,000
10,359,916
8.60
4.44
4.37
4.32
3.65
2.98
1.47
0.99
0.83
0.53
0.42
0.40
0.40
0.39
0.35
0.31
0.26
0.24
3,911,359,768
90.31
f.
Unlisted options
Exercise price $0.008, Expiry 31 March 2017, Number of Holders 2.
Name
Black Swan Superannuation Pty Ltd
Black Swan Capital Pty Ltd
Total number of unlisted options on issue
Number
of Options
Held
43,750,000
43,750,000
87,500,000
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 (ASX Code: AQC).
Page 76
Australian Pacific Coal Limited
ASX Additional Information
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016
CORPORATE DIRECTORY
DIRECTORS
Peter Alexander Ziegler (Chairman)
John James Robinson (Chief Executive Officer)
Paul James Byrne
Shane Leslie Stone
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 77
Corporate Directory
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2016