2019
Annual Report
Australian Pacific Coal
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
i
iii
v
xi
2
5
14
16
17
18
19
20
56
57
62
73
76
Annual Report
Australian Pacific Coal Limited
TOC
Year Ending 30 June 2019
ABN 49 089 206 986
CHIEF EXECUTIVE OFFICER’S REPORT
Focused on developing Dartbrook Mine and the recommencement of operations.
The largest, under-developed thermal coal asset in New South Wales.
During the 2019 financial year, the Company planned to advance the Dartbrook Coal Mine to operational
production.
In February 2018 Australian Pacific Coal submitted a Section 75W modification (DA 231-7-2000 MOD7) to
existing approvals to facilitate recommencement of underground mining operations at the Dartbrook Coal Mine.
This MOD7 proposed bord and pillar mining of the Kayuga coal seam (as an alternative to the approved longwall
mining activities), changes to the method of transferring coal to the train loadout facility and a 5 year extension to
the period of approval until 5 December 2027, with all current approvals to remain in place.
The 2019 financial year saw the Company continue to progress the MOD7 application process with the NSW
Department of Planning and Environment. The Department put the MOD7 proposal on public exhibition in late
June 2018 and invited community comment. In parallel with the Department’s assessment the Company
conducted meetings with various stakeholder groups on its development plans and the net economic benefits for
the wider community.
Following final submissions and the consultative process, in January 2019 the NSW Department of Planning and
Environment referred the application to the Independent Planning Commission (IPC) for determination.
Importantly, in referring the application to the IPC, the department concluded “that the impacts of the modification
are acceptable and the proposal is approvable, subject to the proposed recommended conditions of consent”.
After a seven-month review process, the IPC on 9 August 2019 publicly issued their determination refusing the
requested 5 year extension to the mining permits but approving alternate mining and coal haulage processes.
The Company is disappointed that the IPC did not approve the additional 5 years of mine life. It has been
previously understood and acknowledged by the IPC that the extension was an imperative to justify the very
significant capital expenditure involved in recommissioning the mine.
In parallel with the MOD7 application, the Company had entered into and was advancing a binding agreement to
partner with Stella Natural Resources (SNR) for the potential recommencement of an underground operation at
Dartbrook. The SNR transaction (announced in August 2018) provided an opportunity to advance Dartbrook into
coal production.
The agreement with SNR was subject to certain conditions precedent which were not satisfied by SNR despite
the passage of almost 12 months and notwithstanding numerous extensions and offers to assist where possible.
As a result, the Company terminated the agreement with SNR effective 4 July, 2019.
Since taking ownership of the Dartbrook Coal Mine in May 2017, the Company has been committed to the
recommencement of mining. The Company has held numerous community consultative committee meetings,
supported local groups and communities through sponsorship initiatives, and invested considerable management
time with our site-based team and consultants in addition to undertaking detailed technical assessments of options
to recommence mining.
The Company recognises the potential of Dartbrook, to both shareholders and the local community.
Looking forward, the Company is weighing all the options including an Appeal of the August IPC determination.
There is currently a great deal of public commentary and public funded advertisements around the IPC and its
numerous decisions including the one impacting the Dartbrook Project. Directors and officers have not been sitting
on their hands – we have been proactive, engaged and forthright but to date we have no progress to report. An
Appeal, and we are still within time, is an expensive convoluted process. Notwithstanding, the board is exploring
the realities of recommencing mining and the possibility of seeking amendment to current approvals. The board
and management remain as focused and determined as ever and continue to have the ongoing support of our
cornerstone investor Trepang.
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page i
Chief Executive Officer’s Report
CHIEF EXECUTIVE OFFICER’S REPORT
to ensure confidence
On October 19 it was announced that the State’s Independent Planning Commission (IPC) will be put under the
spotlight
impartiality of decision-making on major
projects. Planning and Public Spaces Minister Rob Stokes said a two-month review of the IPC will be conducted
by NSW Commissioner for Productivity Peter Achterstraat AM who will make recommendations to Government
about the IPC’s purpose and structure.
the speed, quality and
in
The Company is continuing to actively assess its options as to the next steps for recommencement of operations
at the Dartbrook Mine.
I would like to take this opportunity to thank our financiers and shareholders for your continued support. I would
also like to acknowledge the dedication and efforts of the Company’s Board members and management team
throughout the year, and thank all our staff, consultants and contractors for their diligent efforts.
John J Robinson
Chairman and Chief Executive Officer
25 October 2019
Note 1: Compliance Statement
Marketable Reserves Note
The Dartbrook Marketable Coal Reserve of 370Mt is derived from a run of mine Coal Reserve of 470 Mt estimated in accordance with JORC 2012 with a
predicted overall yield of 78%. The 370Mt Marketable Coal Reserve is included in the 2,534 Mt Coal Resource (588Mt Measured, 850 Mt Indicated, 1,097Mt
Inferred).
The Company confirms that it is not aware of any new information or data that materially affects the information included in the announcement and that all
material assumptions and technical parameters underpinning the estimates in the announcement continue to apply and have not materially changed.
Competent Persons Statement - Resources
The information in this report relating to Coal Resources for the Dartbrook Project was announced on 27 June 2017, titled “Dartbrook Coal Resource Estimate
2.5 Billion Tonnes” and is based on information compiled by Lynne Banwell, a Principal Consultant of Collective Experience Pty Limited and Associate
Consultant of GPPH & Associates. Structure modelling was carried out by Rebecca Jackson and Monica Davis of Palaris; coal quality modelling, structure
model audit and resource estimations were carried out by Lynne Banwell. Lynne Banwell is a qualified geologist (BSc (Hons) University of Sydney, 1980) with
30 years’ experience in coal geology and over 20 years’ experience in resource evaluation. Lynne is a Member of the Australasian Institute of Mining and
Metallurgy and has experience in this style of mineralisation and qualifies as a Competent Person under the JORC code. This Resource Statement has been
prepared under the guidelines of the December 2012 edition of the Australian Code for Reporting of Mineral Resources and Ore Reserves (The JORC Code).
Neither Lynne Banwell nor GPPH & Associates has any material interest or entitlement, direct or indirect, in the securities of Australian Pacific Coal or any
companies associated with Australian Pacific Coal Limited.
Lynne Barnwell consents to the release of this report.
Competent Persons Statement - Reserves
The information in this report relating to Coal Reserves for the Dartbrook Project was announced on 28 March 2018, titled “Dartbrook Coal Reserve Estimate”
and is based on information compiled by Ernst Brian Baumhammer, a Principal Consultant of GPPH & Associates. The Reserve estimations were carried out
under the supervision and review of Brian Baumhammer. Brian Baumhammer is a qualified mining engineer (BE (Hons) University of Sydney, 1984) with 33
years’ experience in mining, 24 years’ experience in coal mining and over 15 years’ experience in reserve estimation. Brian Baumhammer is a Member of the
Australasian Institute of Mining and Metallurgy and has experience in this style of mineralisation and qualifies as a Competent Person under the JORC code.
This Reserve Statement has been prepared under the guidelines of the December 2012 edition of the Australian Code for Reporting of Mineral Resources and
Ore Reserves (The JORC Code). Neither Brian Baumhammer nor GPPH & Associates has any material interest or entitlement, direct or indirect, in the
securities of Australian Pacific Coal Ltd or any companies associated with Australian Pacific Coal Limited.
Brian Baumhammer consents to the release of this report.
The information is extracted from the report entitled “Dartbrook Coal Reserve Estimate” created on 28 March 2018 and is available to view on www.aqc.ltd.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 announcement
and, in the case of estimates of Coal Resources or Coal 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.
Page ii
Chief Executive Officer’s Report
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
INFORMATION ON AUSTRALIAN PACIFIC COAL
Australian Pacific Coal Limited (‘AQC’) is an ASX-listed junior coal company focused on acquiring and developing
thermal and metallurgical coal prospects. AQC listed on the Australian Stock Exchange in 1999 and currently has
approximately 1,056 shareholders. .
AQC completed the acquisition of the Dartbrook coal mine in the Hunter Valley, NSW, on 29 May 2017.
In August 2019 AQC received limited approval from the Independent Planning Commission (IPC) of its application
to modify the existing consent for the Dartbrook Coal Mine in order to recommence underground mining (MOD7).
The approval was a significant milestone for the project. Disappointingly the IPC determination rejected the AQC
application for a 5 year extension to the current mining approvals through till December 2027. This extension is a
key element in derisking the restart of mining at Dartbrook.
Looking forward, the Company is weighing all the options including an Appeal of the August IPC determination.
There is currently a great deal of public commentary and public funded advertisements around the IPC and its
numerous decisions including the one impacting the Dartbrook Project. Directors and officers have not been sitting
on their hands – we have been proactive, engaged and forthright but to date we have no progress to report. An
Appeal, and we are still within time, is an expensive convoluted process. Notwithstanding, the board is exploring
the realities of recommencing mining and the possibility of seeking amendment to current approvals. The board
and management remain as focused and determined as ever and continue to have the ongoing support of our
cornerstone investor Trepang.
to ensure confidence
On October 19 it was announced that the State’s Independent Planning Commission (IPC) will be put under the
spotlight
impartiality of decision-making on major
projects. Planning and Public Spaces Minister Rob Stokes said a two-month review of the IPC will be conducted
by NSW Commissioner for Productivity Peter Achterstraat AM who will make recommendations to Government
about the IPC’s purpose and structure.
the speed, quality and
in
The Company is continuing to actively assess its options as to the next steps for recommencement of operations
at the Dartbrook Mine.
AQC also holds coal exploration tenements located in Queensland's Bowen, Galilee, Surat and Clarence-Moreton
basins and an industrial minerals project in central western Queensland. Options are currently being assessed
for these assets.
AQC’s long term strategic focus is to identify valuable resource investment opportunities. In addition to its
Dartbrook asset, the Company will continue to take advantage of low entry cost resource investment opportunities
that it identifies.
BOARD OF DIRECTORS
Mr John Robinson B. Acc, MAICD
Executive Chairman and Chief Executive Officer
Mr John Robinson 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 gained
a Bachelor of Accounting from the Charles Darwin University.
Director since 30th of October 2015
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page iii
Information on Australian Pacific Coal
INFORMATION ON AUSTRALIAN PACIFIC COAL
BOARD OF DIRECTORS continued
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
The Hon. Shane Stone has a strong commercial and legal background and considerable experience in dealing
with Commonwealth and State governments. The Hon Stone has at various times acted as an independent
director to various public and private companies in Australia and UK. 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.
Mr Bruce Munro B Eng (Hons) UNSW
Non-executive Director
Mr Munro has a strong management and operational background and considerable experience with over 40 years’
experience as an engineer and manager with major construction and mining contractors in a number of countries
including Australia, Asia, India and southern Africa. From 2011 until his retirement in 2015 Mr Munro was the
Managing Director of Thiess Pty Ltd, which during this period had around 20,000 employees and annual revenues
up to A$7 billion. Mr Munro has been involved as a contractor in the development and/or operation of numerous
mines for clients such as BHP, Glencore, Rio Tinto, BP, Peabody, Bumi Resources, Inco, Wesfarmers, Vale and
Fortescue. During his career, he served as a Director on a number of industry bodies, international business
councils and diversity groups.
Director since 19 May 2017.
KEY COMPANY DATA (as at 30 September 2019)
Listing:
Australian Securities Exchange (ASX:AQC) – Listed in 1999
Shares on Issue:
50,484,810 AQC ORD
(1,056 shareholders)
Options:
Nil.
Market Capitalisation:
$6.6 million
Quarterly Share Price Activity1:
September 2019
June 2019
March 2019
December 2018
September 2018
High
$0.510
$0.595
$0.780
$0.900
$1.095
Low
$0.130
$0.460
$0.500
$0.575
$0.650
Close
$0.130
$0.520
$0.570
$0.750
$0.745
Page iv
Information on Australian Pacific Coal
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
REVIEW OF OPERATIONS
DARTBROOK COAL MINE
Australian Pacific Coal completed the 100% acquisition of the Dartbrook mine in May 2017. The mine is located
in the Hunter Valley coal region of NSW, approximately 4km west of Aberdeen and 10km north-west of
Muswellbrook (and 250km north of Sydney). The mine includes substantial existing infrastructure with access to
a skilled workforce and the support industries utilised by major mining companies in the region, including rail and
port facilities.. The mine contains an estimated marketable resource of 2.5 billion tonnes of high quality thermal
coal. The current marketable reserve estimate is 370 million tonne. Previous underground operations have mined
approximately 30 million tonnes of ROM coal from the Wynn and Kayuga seams.
Since completing the acquisition, the Company has undertaken a range of activities to assess various
development options for Dartbrook:
• Completion of the Open Cut Pre-Feasibility Study (OC PFS)1
• Completion of a Coal Reserve2 estimate
•
In February 2018 submission of an application and supporting environmental assessment materials to
recommence limited B&P underground mining (MOD7);
• During September 2018 completion of an environmental-focused drilling program to provide enhanced
environmental monitoring to the Company and community stakeholder groups; and
• Progressed a development partnering opportunity with Stella Natural Resources (SNR) for the potential
recommencement of underground mining at Dartbrook.
Post balance date, the Company announced on 2 July 2019 that notwithstanding numerous extensions and offers
by the Company to assist where possible, certain conditions precedent under the Share Sale Agreement (SSA)
with Stella Natural Resources (SNR) had not been satisfied by SNR and, as a result, the SSA was terminated.
1 Refer ASX announcement titled “Dartbrook Open Cut Pre-Feasibility Study Completed” dated 28 March 2018
2 Refer ASX announcement titled “Dartbrook Coal Reserve Estimate” dated 28 March 2018 and Additional Information section of this report
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page v
Review of Operations
REVIEW OF OPERATIONS
Regional Mining Operations and Projects
Page vi
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
REVIEW OF OPERATIONS
Strategic Development Partnership – Stella Natural Resources
On 6 August 2018, the Company announced it had signed a binding agreement to partner with Stella Natural
Resources (SNR) as equal-share participants in the Dartbrook Joint Venture to recommence sustainable
underground operations.
Under the agreement SNR had agreed to pay AUD$20 million to the Company (Purchase Price) for a 50% interest
in AQC Investments 2 Pty Ltd, the entity which holds the Company’s interest in the Dartbrook Mine, including
freehold land, infrastructure and mining tenements. The DJV had also agreed to provide an AUD$10 million loan
to AQC (Loan) to pay out the existing Anglo American secured loan.
The transaction with SNR was subject to certain conditions precedent, including SNR securing funding for the
Purchase Price and Loan, FIRB, NSW State Government and other third party consents and approvals (including
existing financiers releasing their security over the Dartbrook Mine assets), limited confirmatory financial diligence,
and agreement on a fully funded development plan to recommence underground mining.
Post balance date, the Company announced that certain conditions precedent under the agreement had not been
satisfied by SNR and, as a result, the Company terminated the agreement.
The Company has been in discussions with other potential development partners in relation to their interest in
recommencing underground mining at Dartbrook. The Company is considering a range of options to optimise
returns for all shareholders.
Application to Modify Mining Approval (MOD7)
In March 2018 the Company announced it had lodged an application to modify the existing mining approval to
recommence underground mining operations at the Dartbrook Coal Mine. The modification (MOD 7) proposed
bord and pillar mining of the Kayuga coal seam (as an alternative to the approved longwall mining activities) and
changes to the method of transferring coal to the train loadout facility. The modification also sought to extend the
period of approval by 5 years (until 5 December 2027).
The MOD 7 environmental assessment, along with other supporting documentation, was submitted and accepted
for adequacy in June 2018 with public exhibition of the application closing in July 2018. Prior to and throughout
the public exhibition period, the Company conducted meetings with various stakeholder groups on its
development plans and net economic benefits for the wider community, including both respective councils and
representatives on the Dartbrook Mine community consultative committee.
The Company completed its responses to submissions and applications with the NSW Department of Planning
and Environment who then finalised their report and provided a positive submission to the Independent Planning
Commission (IPC) in January 2019. The IPC convened a public meeting on 9 April 2019 as a requirement of the
approval process.
Subsequent to the end of the reporting period, the IPC provided approval in relation to some elements of the
Company’s application to modify consent for the Dartbrook Coal Mine. The approval is considered a significant
milestone for the recommencement of mining at Dartbrook although a key element of MOD7 was not approved,
being the application for an additional five years of mine life.
The Company has previously stated, and the IPC had acknowledged the proposed five-year extension of the
approval period was required to justify the capital expenditure involved in recommissioning the mine.
Looking forward, the Company is weighing all the options including an Appeal of the August IPC determination.
There is currently a great deal of public commentary and public funded advertisements around the IPC and its
numerous decisions including the one impacting the Dartbrook Project. Directors and officers have not been sitting
on their hands – we have been proactive, engaged and forthright but to date we have no progress to report. An
Appeal, and we are still within time, is an expensive convoluted process. Notwithstanding, the board is exploring
the realities of recommencing mining and the possibility of seeking amendment to current approvals. The board
and management remain as focused and determined as ever and continue to have the ongoing support of our
cornerstone investor Trepang.
On October 19 it was announced that the State’s Independent Planning Commission (IPC) will be put under the
spotlight to ensure confidence in the speed, quality and impartiality of decision-making on major projects.
Planning and Public Spaces Minister Rob Stokes said a two-month review of the IPC will be conducted by NSW
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page vii
Review of Operations
REVIEW OF OPERATIONS
Commissioner for Productivity Peter Achterstraat AM who will make recommendations to Government about the
IPC’s purpose and structure.
The Company is continuing to actively assess its options as to the next steps for recommencement of operations
at the Dartbrook Mine.
Open Cut Coal Reserve
The Company previously announced an Open Cut Coal Reserve for the Dartbrook Mine on 28 March 2018. The
Reserve has been estimated for the area within the Dartbrook Mine leases. This Coal Reserve is included within
the Coal Resource3 of 2,534 Mt (comprised of Measured 588 Mt, Indicated 850 Mt, Inferred 1,097 Mt) announced
to the ASX 27 June 2017.
The Coal Reserve estimate (JORC, 2012 Edition) has the following quantities:
Table 1 - Reserve Area
Mineable ROM
Reserves
ROM Probable
Marketable Product
Total (Mt)
572
470
370
Note: the totals in this table and those below are rounded to reflect the accuracy of the estimate.
Table 2 - Reserve Area by Lease
Lease
ROM tonnes (Mt)
Marketable tonnes (Mt)
Probable
Proven
Probable
Proven
EL 4574
A 256
ML 1497
CL 386
ML 1456
ML 1381
Total
-
32
168
266
3
1
470
-
-
-
-
-
-
-
-
24
134
215
3
-
370
-
-
-
-
-
-
-
Note: Totals rounded to nearest 10 Mt
The Competent Person has classified the entire Reserve as a Probable Reserve as presently Dartbrook does
not hold any open cut mining leases.
The mine plan underpinning the Coal Reserve (Reserve Mine Plan) considers the full area of the Dartbrook Mine
leases. The Reserve Mine Plan mines 572 Mt run of mine (ROM) coal with 470 Mt, or 82%, classified as a ROM
Coal Reserve, at a strip ratio of 4.2 to 1 (bcm waste to ROM tonne coal).
The OC PFS mine plan mines 226 Mt ROM coal with 190 Mt, or 84%, classified as a ROM Coal Reserve. Based
on the modelled processing yield applied by the Competent Person and rounding, this equates to a Marketable
Reserve of 140 Mt. This reflects the capacity of the proposed 10 Mtpa pit operating for 25 years, at a strip ratio of
4.0 to 1. Beyond the OC PFS mining pit, the Coal Reserve extends to the south, west and north of the OC PFS
mining pit. The OC PFS mine plan is a subset of the Reserve Mine Plan.
3 Refer Additional Information section of this report for the Competent Person Statement
Page viii
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
REVIEW OF OPERATIONS
OTHER PROJECTS
In Queensland, the Company holds interests in various EPC and MDL tenure in the Bowen, Surat and Galilee
Basins. Additionally, the Company has joint venture agreements on tenements with Blackwood Resources.
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 Company will continue to assess potential
development or divestment opportunities in relation to these assets.
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page ix
Review of Operations
REVIEW OF OPERATIONS
Project Summary
EPC
Name
Status
Area
(km2)
Location
Target Coal
Coal Type
COORORAH PROJECT
EPC 1859
Dingo
Granted
10
Around Dingo 50km E of
Blackwater
Rangal and
Burngrove
Thermal & PCI
MOUNT HILLALONG
PROJECT
EPC 1645
EPC 1773
EPC 1867
Mount Hess Granted
20
20km SE of Glenden
Kemmis
Creek
Granted
Mount Hess
West
Granted
6
6
32km SE of Glenden
Fort Cooper
Coking & Thermal
16km SE of Glenden
EPC
Name
Status
Area (km2)
Location
Target
Coal Type
BLACKWOOD
JOINT VENTURE
EPC 1955
Bungaban Creek
Granted
122
60km N of Miles
EPC 1987
Quondong
Granted
112
40km N of Miles
Walloon coal
measures
Taroom coal
measures
Thermal
Thermal
The Company’s 100% owned subsidiary Mining Investments One Pty Ltd holds a 10% interest in each of the
Blackwood Resources Pty Ltd JV tenements.
Name
Status
Area (km2)
Location
Target
Type
MATUAN DOWNS
BENTONITE
PROJECT
ML 70360
Mantuan
Granted
3
78km S of Alpha
Bentonite
3m bentonite
The Mantuan Downs project remains in care & maintenance. The Company is assessing various options with
respect to disposal or further development of the asset.
Page x
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Financial Report - 30 June 2019
xi
Australian Pacific Coal Limited
Corporate directory
30 June 2019
Directors
Mr John J Robinson (Executive Director)
The Hon Shane Stone
Mr Bruce Munro
Company secretary
Mr Andrew Roach
Registered office and
Principal place of business
Level 36, 71 Eagle Street
Brisbane QLD 4000
Share register
Auditor
Solicitors
Bankers
Link Market Services
Level 21
10 Eagle Street
Brisbane QLD 4000
Phone: 1300 554 474 or +61 7 3320 2200
www.linkmarketsevices.com.au
Hall Chadwick, Chartered Accountants
Level 40
2 Park Street
Sydney NSW 2000
HopgoodGanim Lawyers
Level 8
Waterfront Place
1 Eagle Street
Brisbane QLD 4000
National Australia Bank
Level 23
100 Creek Street
Brisbane QLD 4000
Stock exchange listing
Australian Pacific Coal Limited shares are listed on the Australian Securities Exchange
(ASX code: AQC)
Website
www.aqcltd.com
1
Australian Pacific Coal Limited
Directors' report
30 June 2019
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 2019.
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:
Mr John J Robinson
The Hon. Shane Stone
Mr Bruce Munro
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of exploration, development
and production activities at the consolidated entity’s mining tenements situated in Queensland and New South Wales,
Australia.
Dividends
No dividends were declared or paid for the financial year ended 30 June 2019.
Review of operations
The loss for the consolidated entity after providing for income tax and non-controlling interest amounted to $13,230,706 (30
June 2018: loss of $15,866,814). The accounting loss is largely driven by care and maintenance holding costs associated
with the Dartbrook Coal Mine (Dartbrook Mine) and corporate expenses incurred during the year including the interest
expense incurred on debt instruments.
Underground modification to recommence operations
On 1 March 2018, Australian Pacific Coal Ltd announced it had lodged an application to modify the existing mining
approval to recommence the underground mining operations at the Dartbrook Coal Mine in New South Wales.
The modification proposes bord and pillar mining of the Kayuga coal seam (as an alternative to the approved longwall
mining activities) and changes to the method of transferring coal to the train loadout facility. The modification seeks to
extend the period of approval by 5 years (until 5 December 2027) and provide an additional method of mining and coal
clearance for the mine.
The Company submitted the environmental assessment, along with other supporting documentation in June 2018. The
period for public display and submissions closed in July 2018. The NSW Department of Planning and Environment
finalised its report in January 2019 and provided its recommendation to the Independent Planning Commission (IPC) that
the modification is approvable.
The IPC convened a public meeting on 9 April 2019 as a requirement of the approval process. The Company provided the
IPC with various supplementary information since the public meeting. The IPC determined the modification after balance
date, refer to Matters Subsequent to the end of the financial year.
Dartbrook Development Partnership
On 6 August 2018, the Company announced it had signed a binding agreement with Stella Natural Resources (SNR) to
form an equal share joint venture for the Dartbrook Mine (the Dartbrook Joint Venture, or DJV). Under the terms of the
agreement, SNR would pay AUD 20 million to the Company (Purchase Price) for a 50% interest in AQC Investments 2 Pty
Ltd, the entity which holds the Company’s interest in the Dartbrook Mine, including freehold land, infrastructure and mining
tenements. The DJV would also provide an AUD 10 million loan to the Company (Loan) to pay out the existing Anglo
American secured loan. The transaction agreement was terminated shortly after balance date. Refer to Matters
subsequent to year end disclosure.
The consolidated entity continued to undertake modest exploration and evaluation activities on its tenements located in
Queensland, Australia. During the year the consolidated entity completed the divestment of certain Queensland exploration
projects in return for the issue of ordinary shares in a new coal-based ASX-listed entity.
2
Australian Pacific Coal Limited
Directors' report
30 June 2019
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
Update on Dartbrook Development Partner
On 2 July 2019, the Company announced that certain conditions under the Share Sale Agreement (SSA) with SNR were not
satisfied by SNR by 1 July 2019 (the cut-off date for satisfaction of those conditions) and the SSA was terminated by AQC
effective on 4 July 2019.
Partial Divestment of Investment Holding
On 18 July 2019, the Company announced the sale of a portion of its shareholding in Bowen Coking Coal Limited (ASX:BCB).
A total of 35.3 million shares were sold at $0.045 per share, providing the Company with a cash inflow of $1.589 million.
Modification 7 Update
On 13 August 2019, the Company announced it had received approval from the Independent Planning Commission (IPC) in
relation to some elements of its application to modify the consent for the Dartbrook Coal Mine (DA 231-7-2000, MOD 7). The
IPC did not approve the request for an additional five years of mine life. Notwithstanding, the approval is a significant
milestone for Dartbrook as it provides a platform to recommence mining operations.
Following the approval, the Company will work with the respective government departments to contemporise a range of
management plans and a plan of operations for the mine.
No other matter or circumstance has arisen since 30 June 2019 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 and development activities on its existing projects and to acquire
further suitable projects for exploration as opportunities arise. The primary focus of the consolidated entity is on the
development and approvals for the Dartbrook Coal Mine in New South Wales.
Environmental regulation
The consolidated entity is subject to, and is compliant with, all aspects of environmental regulation in its exploration and
mining activities. The directors believe that the Company is in compliance with all environmental laws.
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 of these assessments. 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.
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 previously implemented systems and processes for the collection
and calculation of data.
Further information on the reporting and results of the application of the above Acts to the Company’s activities can be found
on the consolidated entity's website.
3
Australian Pacific Coal Limited
Directors' report
30 June 2019
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Mr John Robinson
Managing Director and Chief Executive Officer
Appointed Chairman on 31 May 2018
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 their Australian operations. Director of Australian Pacific Coal Limited
since 30 October 2015 and appointed as Managing Director in July 2016. Mr Robinson
was appointed as Chairman effective 31 May 2018.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
21,061,667
Interests in shares:
Interests in options:
None
None
Contractual rights to shares:
Name:
Title:
Experience and expertise:
The Hon. 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. Formerly
Deputy Chairman UK listed Impellam plc, Chairman of ASX listed Regalpoint
Resources Limited and 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. Appointed as
a Director of Australian Pacific Coal Limited on 2 August 2016. Mr Stone was appointed
as Chairman of the Audit Committee on 12 June 2018.
None
Other current directorships
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:
Chairman of the Audit Committee (appointed 12 June 2018)
72,000
None
None
4
Australian Pacific Coal Limited
Directors' report
30 June 2019
Name:
Title:
Qualifications
Experience and expertise:
Mr Bruce Munro
Non-executive Director
B Eng (Honours) UNSW
Mr Munro has a strong management and operational background and considerable
experience with over 40 years’ experience as an engineer and manager with major
construction and mining contractors in a number of countries including Australia, Asia,
India and southern Africa. From 2011 until his retirement in 2015 Mr Munro was the
Managing Director of Thiess Pty Ltd, which during this period had around 20,000
employees and annual revenues up to A$7 billion. Mr Munro has been involved as a
contractor in the development and/or operation of numerous mines for clients such as
BHP, Glencore, Rio Tinto, BP, Peabody, Bumi Resources, Inco, Wesfarmers, Vale and
Fortescue. During his career, he served as a Director on a number of industry bodies,
international business councils and diversity groups.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
100,000
Interests in shares:
None
Interests in options:
Contractual rights to shares:
None
'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 Andrew Roach B Econ, B Comm, CA, AGIA ACIS, Grad Dip App Fin, was appointed Company Secretary on 2 August
2017. Mr Roach has more than 10 years' experience in the resource and financial service sectors. Mr Roach was the Chief
Financial Officer and Company Secretary for Stanmore Coal Limited, during which time he played a key role delivering the
acquisition and financing of the Isaac Plains Coal Mine through to recommencement of operations. Prior to his 5 years with
Stanmore Coal, Mr Roach worked within the corporate finance and assurance divisions of PwC.
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 2019, and the number of meetings attended by each director were:
Full board
Audit and Risk Committee
Attended
Held
Attended
Held
Mr John J Robinson
The Hon. Shane Stone
Mr Bruce Munro
12
11
12
12
12
12
-
2
-
-
2
-
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.
5
Australian Pacific Coal Limited
Directors' report
30 June 2019
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 has 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
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.
Non-executive directors do not receive share options or other incentives.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the General Meeting held on 30 October 2015 where the shareholders
approved a maximum annual aggregate remuneration of $500,000.
Non-executive directors are also entitled to consulting fees to the extent that they provide services in excess of those
typically provided as a non-executive director of the Company.
6
Australian Pacific Coal Limited
Directors' report
30 June 2019
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 Board is currently reviewing the company’s short-term and long-term incentive arrangements for executive directors,
non-executive directors and employees and consultants to ensure the appropriate alignment of interests of all stakeholders
and to reward the achievement of pre-specified Key Performance Indicators.
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, advised by a remuneration consultant, is developing a revised Group incentive program. When complete, it is
proposed that this incentive program and ancillary arrangements to implement the same will be put to shareholders for their
approval. Further detail on the proposed incentive arrangements and their alignment with key outcomes for all shareholders
of the Company will be provided in the accompanying notice of meeting.
Voting and comments made at the company's 2018 Annual General Meeting ('AGM')
At the 2017 AGM, shareholders voted to support the adoption of the remuneration report for the year ended 30 June 2018.
The company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors of Australian Pacific Coal
Limited:
● 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), Chairman (appointed 31 May 2018)
● The Hon Shane Stone – Non-executive Director (appointed 2 August 2016)
● Mr Bruce Munro – Non-executive Director (appointed 19 May 2017)
And the following persons:
● Andrew Roach - Company Secretary and Chief Financial Officer
7
Australian Pacific Coal Limited
Directors' report
30 June 2019
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
and fees
$
Cash
bonus
$
Termination
Super-
annuation
$
$
Long service Equity-settled Equity-settled
shares
$
options
$
leave
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
8,676
20,926
20,531
50,133
-
-
-
-
-
-
-
-
-
-
-
-
100,000
100,000
-
520,926
-
-
393,481
1,114,407
* John Robinson elected to defer a portion of his salary during FY19. The deferred component of $148,270 (not paid in cash) is recorded as an accrual.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary
annuation
$
$
Long service Equity-settled Equity-settled
shares
$
options
$
leave
$
Total
$
2019
Non-Executive
Directors:
Shane Stone
Bruce Munro
100,000
91,324
Executive Directors:
John J Robinson
500,000
Other Key
Management
Personnel:
Andrew Roach
372,950
1,064,274
2018
Non-Executive
Directors:
Shane Stone
Bruce Munro
Peter Ziegler
100,000
91,324
479,167
Executive Directors:
John J Robinson
487,820
Other Key
Management
Personnel:
Andrew Roach
Kevin Mischewski
59,878
219,249
1,437,438
-
-
-
-
-
-
-
-
-
-
-
-
8,676
-
20,049
137,500
-
137,500
5,012
18,904
52,641
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
100,000
479,167
-
507,869
202,390
238,153
1,627,579
-
-
* Peter Ziegler retired as Chairman of the Company on 31 May 2018
** Kevin Mischewski resigned as Chief Financial Officer and Company Secretary on 2 August 2017
*** Andrew Roach was appointed Chief Financial Officer and Company Secretary on 2 August 2017
8
Australian Pacific Coal Limited
Directors' report
30 June 2019
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Shane Stone
Bruce Munro
Peter Ziegler
Executive Directors:
John J Robinson
Paul Byrne
Other Key Management
Personnel:
Andrew Roach
Kevin Mischewski
Fixed remuneration
2018
2019
At risk - STI
At risk - LTI
2019
2018
2019
2018
100%
100%
N/A
100%
N/A
100%
100%
100%
100%
100%
100%
N/A
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
There was no cash bonus paid/payable or forfeited for the year ended 30 June 2019.
9
Australian Pacific Coal Limited
Directors' report
30 June 2019
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:
Terms of Agreement
Details:
John Robinson
Managing Director and Chief Executive Officer;
Chairman (appointed 31 May 2018)
30 October 2015
Ongoing appointment, subject to termination rights noted below.
Base salary for the year ending 30 June 2019 of $500,000 including superannuation to
be indexed for inflation on 1 January of each year commencing on 1 January 2018, 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.
During the year Mr Robinson elected to defer a portion of his base salary. The
deferred element of his base salary has been accrued and will be paid at a future
milestone to be agreed by the Board.
Andrew Roach
Company Secretary and Chief Financial Officer
2 August 2017
Ongoing appointment, subject to termination rights noted below.
Base salary for the year ending 30 June 2019 of $350,000 plus superannuation to be
indexed for inflation on the 1 January of each year commencing on 1 January 2018,
and to be reviewed by the Board in light of any increases in the market for similar
positions held. Mr Roach 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 Roach may give 3 months’ notice of
termination. The company may terminate the arrangements without cause by giving 6
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.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct
10
Australian Pacific Coal Limited
Directors' report
30 June 2019
Options
There were no options over ordinary shared issued as remuneration to directors or other key management personnel in the
year ending 30 June 2019.
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:
Ordinary shares
John Robinson
Shane Stone
Bruce Munro
Andrew Roach
Balance at Received
as part of
the start of
the year
remuneration Additions
Disposals*/
Other**
Balance at
the end of
the year
21,061,667
72,000
100,000
-
21,233,667
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,061,667
72,000
100,000
-
21,233,667
Option holding
There were no options over ordinary shares in the company held during the financial year by any director and other members
of key management personnel of the consolidated entity, including their personally related parties.
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 or convertible note
Unissued ordinary shares of Australian Pacific Coal Limited under option or convertible note at the date of this report are as
follows:
Issue date
Maturity date & Face Value
price
Exercise
Number
under option
or convertible
note
18 April 2017 (Mr John Robinson Snr)
18 April 2017 (Mr Nick Paspaley)
25 May 2017 (Trepang Services Pty Ltd)
29 Nov 2018 (Trepang Services Pty Ltd)
1 February 2021 - $10 million
1 February 2021 - $10 million
1 February 2021 - $15 million
1 February 2021 - $7 million
$0.80 12,500,000
$0.80 12,500,000
$0.80 18,750,000
8,750,000
$0.80
Each of the convertible notes attract capitalised interest of 10% (compounding monthly). Upon conversion, accrued interest
may be paid, at the consolidated entity’s election, either via cash or settlement in shares based on the 5 day trailing volume
weighted average price.
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.
11
Australian Pacific Coal Limited
Directors' report
30 June 2019
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 27 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.
●
The following fees were paid or payable to Hall Chadwick Melbourne for non-audit services provided during the year ended
30 June 2019:
Taxation services
$
$11,100
$11,100
Officers of the company who are former partners of Hall Chadwick Chartered Accountants
There are no officers of the company who are former partners of Hall Chadwick Chartered Accountants.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest dollar.
12
Australian Pacific Coal Limited
Directors' report
30 June 2019
cle Listed Exploration and Mining Limited
tors' report
ne 2017
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
Hall Chadwick 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
___________________________
John Robinson
Executive Chairman
18 August 2019
Brisbane
13
AUSTRALIAN PACIFIC COAL LIMITED
AND CONTROLLED ENTITIES
ABN 49 089 206 986
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF AUSTRALIAN PACIFIC COAL LIMITED AND
CONTROLLED ENTITIES
In accordance with section 307C of the Corporations Act 2001, I am pleased to
provide the following declaration of independence to the directors of Australian Pacific
Coal Limited and controlled entities. As the lead audit partner for the audit of the
financial report of Australian Pacific Coal Limited and controlled entities for the year
ended 30 June 2019, I declare that, to the best of my knowledge and belief, there
have been no contraventions of:
(i)
the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Hall Chadwick
Sydney NSW 2000
SANDEEP KUMAR
Partner
Date: 18 August 2019
14
SYDNEY · PENRITH · MELBOURNE · BRISBANE · PERTH · DARWIN
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
Australian Pacific Coal Limited
Contents
30 June 2019
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
Shareholder information
General information
16
17
18
19
20
56
57
62
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 36, 71 Eagle Street
Brisbane QLD 4000
Principal place of business
Level 36, 71 Eagle 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 18 August 2019. The
directors have the power to amend and reissue the financial statements.
15
Australian Pacific Coal Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2019
Revenue
Other income
Expenses
Employee benefits expense
Depreciation and amortisation expense
Impairment of capitalised exploration and evaluation
Exploration and evaluation expense
Unrealised loss on financial assets
Provision remeasurement
Administration and consulting expenses
Finance costs
Loss before income tax expense from continuing operations
Income tax expense
Other comprehensive income
Other comprehensive income for the year, net of tax
Consolidated
Note
2019
$
2018
$
4
5
6
6
7
144,740
887,218
2,032,967
-
(1,323,315)
(1,242,872)
(77,243)
(45,793)
-
500,000
(7,057,768)
(6,163,422)
(2,158,337)
(1,186,913)
(74,014)
(22,415)
(489,130)
295,001
(8,152,430)
(4,965,794)
(13,230,706) (15,866,814)
-
-
-
-
Total comprehensive income for the year
(13,230,706) (15,866,814)
Earnings per share for profit attributable to the owners of Australian Pacific
Coal Limited
Basic earnings per share
Diluted earnings per share
33
33
(26.5)
(26.5)
(32.2)
(32.2)
Cents
Cents
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
Australian Pacific Coal Limited
Statement of financial position
As at 30 June 2019
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Exploration and evaluation
Financial assets
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained profits
Total equity
Consolidated
Note
2019
$
2018
$
8
9
10
11
12
13
15
16
17
18
20
19
20
395,626
181,511
760,561
1,337,698
2,376,591
293,800
725,826
3,396,217
43,811,646
5,620,000
8,461,943
2,717,391
9,275,025
69,886,005
45,046,544
5,620,000
6,752,709
760,870
9,275,025
67,455,148
71,223,703
70,851,365
2,688,629
14,612,774
22,591
17,323,994
7,718,145
50,886,205
15,853
58,620,203
54,458,873
19,550,000
74,008,873
59,620
20,050,000
20,109,620
91,332,867
78,729,823
(20,109,164)
(7,878,458)
21
60,487,791
(80,596,955)
59,487,791
(67,366,249)
(20,109,164)
(7,878,458)
The above statement of financial position should be read in conjunction with the accompanying notes
17
Australian Pacific Coal Limited
Statement of changes in equity
For the year ended 30 June 2019
Consolidated
Balance at 1 July 2017
Loss after income tax expense for the year
Other comprehensive income for the year,
net of tax
Issued
capital
$
Retained
profits
$
Total equity
$
59,487,791 (51,499,435)
7,988,356
- (15,866,814) (15,866,814)
-
-
-
Total comprehensive income for the year
-
(15,866,814)
(15,866,814)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction
costs
-
-
-
Balance at 30 June 2018
59,487,791 (67,366,249)
(7,878,458)
Consolidated
Balance at 1 July 2018
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Issued
capital
$
Retained
profits
$
Total equity
$
59,487,791 (67,366,249)
(7,878,458)
- (13,230,706) (13,230,706)
-
-
-
Total comprehensive income for the year
-
(13,230,706)
(13,230,706)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
1,000,000
-
1,000,000
Balance at 30 June 2019
60,487,791 (80,596,955) (20,109,164)
The above statement of changes in equity should be read in conjunction with the accompanying notes
18
Australian Pacific Coal Limited
Statement of cash flows
For the year ended 30 June 2019
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Net interest received / (paid)
Net cash from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation
Proceeds from sale of property, plant and equipment
Proceeds from release of security deposits
Proceeds from working capital adjustment post-acquisition
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
Consolidated
Note
2019
$
2018
$
83,058
(9,502,745)
900,417
(11,245,869)
(9,419,687)
7,614
(10,345,452)
35,195
32
(9,412,073)
(10,310,257)
(7,974)
(1,789,475)
(1,279,049)
(4,398,639)
-
-
-
1,765
295,001
348,495
(1,797,449)
(5,032,427)
1,000,000
9,272,888
-
(1,044,331)
-
6,134,887
-
(699,337)
9,228,557
5,435,550
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
(1,980,965)
2,662,033
(9,907,134)
12,569,167
Cash and cash equivalents at the end of the financial year
8
681,068
2,662,033
The above statement of cash flows should be read in conjunction with the accompanying notes
19
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
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 or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended 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
The consolidated entity has incurred a net loss of $13,230,706 for the year ended 30 June 2019 and has a deficiency in net
assets of $20,109,164 as at 30 June 2019.
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 and borrowings from related and not related parties to support existing projects including development of
the 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 2019 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'.
20
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 1. Significant accounting policies (continued)
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
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.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
21
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 1. Significant accounting policies (continued)
Revenue recognition
The Group has applied AASB 15: Revenue from Contracts with Customers. The major components of revenue are
recognised as follows:
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.
Rent
Rent revenue from investment properties is recognised on a straight-line basis over the lease term. Lease incentives granted
are recognised as part of the rental revenue. Contingent rentals are recognised as income in the period when earned.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
●
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.
22
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 1. Significant accounting policies (continued)
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.
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 include 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. 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.
A simple approach is followed in relation to trade receivables, as the loss allowance is measured at lifetime expected credit
loss.
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) Ore and other metals 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.
23
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 1. Significant accounting policies (continued)
Initial application of AASB 9: Financial Instruments
The Group has adopted AASB 9: Financial Instruments with an initial application date of 1 July 2018.
Considering the initial application of AASB 9 during the period, financial statement line items have been affected for the
current and prior periods.
Impairment
As per AASB 9, an expected credit loss model is applied, not an incurred credit loss model as per the previous Standard
applicable (AASB 139). To reflect changes in credit risk, this expected credit loss model requires the Group to account for
expected credit loss since initial recognition.
A simple approach is followed in relation to trade receivables, as the loss allowance is measured at lifetime expected credit
loss.
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.
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 - 8 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.
24
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 1. Significant accounting policies (continued)
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.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in
the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or
period.
Water licences
The Company acquired various water licences associated with the Dartbrook Coal Mine through the acquisition of the mine
in May 2017. The water licences were valued at fair market value via the final purchase price accounting for the business
combination. The licences continue to be held in good standing and are renewable at the Company’s election, subject to
ongoing compliance with regulatory requirements of each licence. Subsequent period reporting is on a cost basis.
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.
25
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 1. Significant accounting policies (continued)
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 at 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.
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 is 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.
26
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 1. Significant accounting policies (continued)
The cost of equity-settled transactions is 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 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.
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.
27
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 1. Significant accounting policies (continued)
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.
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.
28
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 1. Significant accounting policies (continued)
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 Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest dollar.
New and Amended Accounting Policies Adopted by the Group
Initial application of AASB 15 : Revenue from Contract with Customers
The Group has adopted AASB 15 : Revenue from Contract with Customers with a date of initial application of 1 July 2018.
The change in the accounting policy has not resulted in any impact to the group.
Initial application of AASB 9 : Financial Instruments
The Group has adopted AASB 9 : Financial Instruments with an initial application date of 1 July 2018. The financial assets
are continued to be measured at fair value through profit and loss. The change in accounting policy has not resulted in any
impact to the Group.
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 2019. 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.
AASB 16 Leases
The Group has elected not to early-adopt AASB 16. However the Group has conducted a preliminary assessment of the
impact of this new Standard and has assessed that its adoption will not have a material impact in the 2020 financial year.
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.
29
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Provision for impairment of receivables
A simple approach is followed in relation to trade receivables, as the loss allowance is measured at lifetime expected credit
loss.
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, copper and other metals in process, ore on leach pads
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, the number contained
metal ounces based on assay data, and the estimated recovery percentage based on the expected processing method.
Stockpile tonnages are verified by periodic surveys.
Although the quantity of recoverable metal is reconciled by comparing the grades of the ore to the quantities of metals actually
recovered (metallurgical balancing), the nature of the process inherently limits the ability to precisely monitor recoverability
levels. As a result, the metallurgical balancing process is constantly monitored and the engineering estimates are refined
based on actual results over time.
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.
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.
It is reasonably possible that the underlying metal price assumption may change which may then impact the estimated life
of mine determinant and may then require a material adjustment to the carrying value of mining plant and equipment, mining
infrastructure and mining development assets. Furthermore, the expected future cash flows used to determine the value-in-
use of these assets are inherently uncertain and could materially change over time. They are significantly affected by a
number of factors including reserves and production estimates, together with economic factors such as metal spot prices,
discount rates, estimates of costs to produce reserves and future capital expenditure.
30
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required
in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary
course of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for
anticipated tax audit issues based on the consolidated entity's current understanding of the tax law. Where the final tax
outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
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.
Employee benefits provision
As discussed in note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting
date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases
through promotion and inflation have been taken into account.
Lease make good provision
A provision has been made for the present value of anticipated costs for future restoration of leased premises. The provision
includes future cost estimates associated with closure of the premises. The calculation of this provision requires assumptions
such as application of closure dates and cost estimates. The provision recognised for each site is periodically reviewed and
updated based on the facts and circumstances available at the time. Changes to the estimated future costs for sites are
recognised in the statement of financial position by adjusting the asset and the provision. Reductions in the provision that
exceed the carrying amount of the asset will be recognised in profit or loss.
Rehabilitation provision
A provision has been 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.
Vendor royalty provision
A provision has been made for the present value of the anticipated production royalty payable to the vendors of the Dartbrook
Mine. The net present value adopted is lower than the full nominal amount of the vendor royalty to reflect, amongst other
things, the risk and probability associated with recommencing mining operations and the consequential time value of the
royalty payment stream. Accordingly, the vendor royalty in excess of the recognised net present value amount is a contingent
liability, with remeasurement likely to occur once development approvals are obtained and the directors resolve to progress
toward construction and operation. The consolidated entity will review the measurement of the provision each annual
reporting period to reflect the then-current probability weighted estimate of incurring royalty payments to the vendors.
31
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Business combinations
The acquisition method is used to account for business combinations. The fair value of assets acquired, liabilities and
contingent liabilities are measured by the consolidated entity taking into consideration all acquisition costs at the reporting
date. Fair value adjustments on the finalisation of the business combination accounting is retrospective, where applicable,
to the period the combination occurred and may have an impact on the assets and liabilities, depreciation and amortisation
reported.
Note 3. Operating segments
Identification of reportable operating segments
The consolidated entity is organised into two operating segments, being bentonite mining and exploration and evaluation.
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 in determining the allocation of
resources.
The CODM reviews net profit or loss before tax and total assets of each operating segment. The accounting policies adopted
for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on a monthly basis.
Types of products and services
The principal products and services of this operating segment are the bentonite mining operations and exploration and
evaluation activities in Australia. The bentonite operations are currently under care and maintenance with no production or
external sales recorded for the year ended 30 June 2019.
Major customers
During the year ended 30 June 2019 there were no external sales made from operations (2018: Nil).
Financial information
Net loss from continuing
operations before tax
2019
$
2018
$
Total Assets
2019
$
2018
$
Exploration & Evaluation
Bentonite mining
Corporate
4,450,567
40,744
8,739,395
6,636,621 70,476,408 67,116,800
115,690
3,618,875
33,875
9,196,318
107,081
640,215
13,230,706 15,866,814 71,223,704 70,851,365
Note 4. Revenue
Other revenue
Interest
Rent
Other revenue – sale of scrap metal
Total Revenue
32
Consolidated
2019
$
2018
$
7,687
137,053
-
144,740
35,195
381,141
470,882
887,218
144,740
887,218
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 5. Other income
Water recharge from rental properties
Unrealised gain on financial assets
Other income
Note 6. Expenses
Loss before income tax includes the following specific expenses:
Depreciation
Land and buildings
Plant and equipment
Total depreciation
Finance costs
Interest and finance charges paid/payable
Finance costs expensed
Rental expense relating to operating leases
Minimum lease payments
Superannuation expense
Defined contribution superannuation expense
Consolidated
2019
$
2018
$
76,446
1,956,521
2,032,967
-
-
-
Consolidated
2019
$
2018
$
158,097
1,084,775
80,284
1,106,629
1,242,872
1,186,913
6,163,422
4,965,794
6,163,422
4,965,794
235,091
295,139
65,022
87,451
33
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
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 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Depreciation and amortisation
Entertainment expense
Other non-allowable items
Write downs to recoverable amounts
Other allowable items
Consolidated
2019
$
2018
$
(13,230,706) (15,866,814)
-
-
(13,230,706) (15,866,814)
(3,638,445)
(4,760,044)
341,790
1,056
3,048,100
-
(2,248,530)
-
2,963
1,720,798
168,944
(624,723)
(2,495,530)
(3,492,062)
Tax losses and temporary differences not brought to account
2,495,530
3,492,062
Income tax expense
-
-
Note 8. Current assets - cash and cash equivalents
Current:
Cash at bank and on hand
Consolidated
2019
$
2018
$
395,626
395,626
2,376,591
2,376,591
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
Deposit as security for rental bonds and equipment leases (Note 16)
Balance as per statement of cash flows
395,626
285,442
2,376,591
285,442
681,068
2,662,033
34
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 9. Current assets - trade and other receivables
Trade and other receivables
Less: Provision for impairment of receivables
Note 10. Current assets - other
Prepayments
Consolidated
2019
$
2018
$
237,663
-
293,800
-
237,663
293,800
Consolidated
2019
$
2018
$
760,561
725,826
760,561
725,826
35
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 11. 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
2019
$
2018
$
38,202,079 38,199,555
(134,703)
37,909,279 38,064,852
(292,800)
170,929
(170,929)
-
170,929
(117,420)
53,509
8,155,589
(2,253,222)
5,902,367
8,150,139
(1,221,956)
6,928,183
43,811,646 45,046,544
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Land and
buildings
$
Leasehold
improvements
$
Plant and
equipment
$
Total
$
Balance at 1 July 2017
Additions
Remeasurement of assets acquired under
business combinations
Disposals
Depreciation expense
37,188,081
983,464
39,423
111,703
8,275,409
183,882
45,502,913
1,279,049
(26,409)
-
(80,284)
-
(403,215)
(429,624)
-
(97,617)
(118,881)
(1,009,012)
(118,881)
(1,186,913)
Balance at 30 June 2018
38,064,852
53,509
6,928,183
45,046,544
Additions
Depreciation expense
2,524
(158,097)
-
(53,509)
5,450
(1,031,266)
7,974
(1,242,872)
Balance at 30 June 2019
37,909,279
-
5,902,367
43,811,646
Refer to Note 23 for further information on fair value measurement.
36
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 12. Non-current assets - intangibles
Dartbrook water licenses
Consolidated
2019
$
2018
$
5,620,000
5,620,000
Water licences were initially measured at cost on acquisition. Subsequent period reporting is on the basis of cost less any
impairment as water licenses have been deemed to have an indefinite life.
Note 13. Non-current assets - exploration and evaluation
Exploration and evaluation - at cost
Consolidated
2019
$
2018
$
8,461,943
6,752,709
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 2017
Additions
Tenements surrendered
Balance at 30 June 2018
Additions
Tenements surrendered
Balance at 30 June 2019
Exploration
and
evaluation
$
Total
$
3,673,084
4,398,639
1,319,014
3,673,084
4,398,639
1,319,014
6,752,709
1,789,475
80,241
6,752,709
1,789,475
80,241
8,461,943
8,461,943
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest These costs
are only carried forward to the extent that they are expected to be recouped through the successful development of the
area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of
economically recoverable resources and active or significant operations in relation to the area are continuing.
Where the minimum expenditure on some tenements have not been met in the current period, rent continues to be paid
and various tenement renewals are in progress. This process and potential delays with respect to the renewals are not
considered to be significant or material to warrant impairment of the tenement assets.
37
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 14. 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
Dartbrook Mine Acquisition
Tax assets not brought to account
Consolidated
2019
$
2018
$
3,035,040
1,852,515
16,449,917 13,954,387
523,984
329,086
523,984
331,086
(20,340,126) (16,659,972)
Deferred tax asset
-
-
Note 15. Non-current assets – financial assets
Investments – Bowen Coking Coal
Note 16. Non-current assets - other
Cash on deposit for rental bonds and bank facilities
Security deposits
Note 17. Current liabilities - trade and other payables
Trade and other payables
Accrued interest – convertible securities and loans
Refer to Note 22 for further information on financial instruments.
38
Consolidated
2019
$
2018
$
2,717,391
760,870
2,717,391
760,870
Consolidated
2019
$
2018
$
285,442
8,989,583
285,442
8,989,583
9,275,025
9,275,025
Consolidated
2019
$
2018
$
710,798
2,041,192
1,977,831
5,676,953
2,688,629
7,718,145
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 18. Current liabilities - borrowings
Bank loans
Convertible securities
Secured loan
Insurance premium funding
Unsecured Loan – Trepang Services Pty Ltd
Unsecured Loan – SNR Mineral Assets Pty Ltd
Interest bearing liabilities
Consolidated
2019
$
2018
$
30,814
35,395
- 37,532,802
5,000,000
-
618,008
693,912
-
3,500,000
2,688,048
-
7,700,000
7,700,000
14,612,774 50,886,205
a)
b)
c)
d)
e)
a) Refer to Note 19. Convertible securities have been reclassified as a Non-Current Liability following shareholder approval
obtained 29 November 2018
b) Refer to Note 19. Secured Loan has been reclassified as a Convertible Security Non-Current Liability following shareholder
approval obtained 29 November 2018.
c) During the financial year, Trepang Services Pty Ltd has contributed further capital to the Company by way of an
unsecured loan bearing 10% interest, capitalised on a monthly basis. Total accrued interest relating to the loan as at
balance date is $198,400.
d) On 6 August 2018, the Company signed binding documentation with SNR Mineral Assets Pty Ltd (SNR) in relation to a
proposed joint venture arrangement at the Dartbrook Coal Mine. As part of those arrangements, SNR contributed to
various holding costs of the mine by way of an unsecured, interest free loan to be repaid via the financing of the mine at
financial close. As at balance date the total amount paid by SNR to meet holding costs is classified as an unsecured, non-
interest bearing current liability.
e) On 29 May 2017, the consolidated entity announced it has agreed terms with Anglo American Metallurgical Coal Assets
Pty Ltd for the provision of a loan for $7,700,000, secured against certain assets of the consolidated entity for a term of
three years with at a 10% interest rate. The loan was conditional upon, amongst other things, approval from shareholders
of the consolidated entity at a general meeting relating to financial assistance provisions. The loan was deemed to be a
current liability at balance date, prior to the shareholder vote, given the default provisions in the loan agreement that may
have been triggered if approval was not received. Approval from shareholders was received at a general meeting held 11
August 2017. Total accrued interest relating to the loan as at balance date is $1,779,431.
Refer to Note 22 for further information on financial instruments.
39
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 19. Non-current liabilities - borrowings
Bank loans
Convertible securities
Consolidated
2019
$
2018
$
a)
28,806
54,430,067
59,620
-
54,458,873
59,620
a) The Convertible securities balance is comprised of following instruments:
i.
ii.
iii.
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 2021. The number of ordinary shares to be issued is calculated as the conversion amount divided by
the conversion price ($0.80), but subject to adjustments for reconstructions of equity. The revised terms of the notes
were approved by shareholders on 29 November 2019.
On 1 March 2017 the consolidated entered into the Trepang Convertible Loan Deed, to conditionally secure an
additional $15,000,000 in funding to assist in completing the acquisition of 100% of the Dartbrook Joint Venture.
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 2021. The number of
ordinary shares to be issued is calculated as the conversion amount divided by the conversion price ($0.80), but
subject to adjustments for reconstructions of equity. The revised terms of the notes were approved by shareholders
on 29 November 2019.
On 29 November 2018, shareholders of the Company approved the issuance of a new convertible note to Trepang
Services Pty Ltd with a face value of $7,000,000. 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 2021. The number of ordinary shares to be issued is calculated as the conversion amount
divided by the conversion price ($0.80), but subject to adjustments for reconstructions of equity.
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
Loan – Trepang Services Pty Ltd
Convertible securities
Loan – Anglo American
Consolidated
2019
$
2018
$
59,620
693,912
-
54,430,067
7,700,000
95,015
618,008
5,000,000
37,532,802
7,700,000
62,883,599
50,945,825
40
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 19. Non-current liabilities – borrowings (continued)
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.
The convertible securities, issued to Mr Robinson Snr, Mr Paspaley and Trepang Services Pty Ltd, share in the same
security package as the loan from Trepang Service Pty Ltd.
Shareholders of the consolidated entity approved, at the extraordinary general meeting on 11 August 2017, the granting of
first ranking security to Anglo American Metallurgical Coal Assets Pty Ltd in respect of the $7.7 million vendor loan
provided on completion of the Dartbrook acquisition. The convertible note holders, is subordinated to the secured loan from
Anglo American Metallurgical Coal Assets Pty Ltd.
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
2019
$
2018
$
205,000
-
205,000
205,000
-
205,000
59,620
59,620
95,015
95,015
145,380
-
145,380
109,985
-
109,985
41
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 20. Provisions
Current:
Employee Entitlements
Non-Current:
Rehabilitation provision
Vendor Royalty provision
Reconciliation of movements:
Employee Entitlements
Opening balance
Additions – Leave accrued
Depletion – Leave taken
Closing
Vendor Royalty provision
Opening balance
Remeasurement
Depletion – rehabilitation activities completed or reassessed
Closing
Consolidated
Note
2019
$
2018
$
22,591
22,591
15,853
15,853
28
8,950,000
10,600,000
19,550,000
8,950,000
11,100,000
20,050,000
15,853
8,959
(2,221)
22,591
12,342
36,315
(32,804)
15,853
11,100,000
(500,000)
-
10,600,000
9,245,001
-
(295,001)
8,950,000
Rehabilitation
The provision for rehabilitation closure costs relate to a present assessment to reinstate disturbed areas in accordance with
the Dartbrook mining consent. Provision has been made to rehabilitate all areas of disturbance including surface
infrastructure, buildings, underground mine workings and underground entries, using internal and external expert
assessment of each aspect to calculate an anticipated cash outflow discounted to a net present value. At each reporting date
the rehabilitation provision is re-measured in line with the then-current level of disturbance, cost estimates and other key
inputs. The amount of provision relating to rehabilitation of areas is recognised in profit or loss as incurred.
The Dartbrook mine was acquired under care and maintenance remained in that state through the financial year ended 30
June 2019. The consolidated entity has provided cash of $8,950,000 to the NSW government, as required under relevant
laws and assessed by the relevant NSW government department. The consolidated entity will continue to assess the
available and efficient rehabilitation options in parallel with potential development options for the mine.
Vendor Royalty
On 7 June 2016 the consolidated entity announced it had reached agreement with the minority joint venture partner at
Dartbrook to acquire the minority partner’s stake, thereby taking the Company’s ownership of Dartbrook to 100%. A
combined contingent royalty arrangement was agreed with the vendors on the following terms:
•
An aggregate royalty to the vendors at a rate of A$3.00 per tonne of coal sold or otherwise disposed of and A$0.25
per tonne of any third-party coal processed through the Dartbrook infrastructure, capped at A$30 million with
indexation to apply to the rate and the cap.
42
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 20: Provisions (continued)
At present the Dartbrook Mine is permitted to operate as an underground mine by longwall mining method. The vendor
royalty is contingent on the Company achieving future development milestones which may or may not occur. The Company
had assessed the acquisition of Dartbrook Mine and, through the work undertaken by the expert, assessed a discounted net
present value associated with the obligation to pay the vendor royalty of $11.1 million, which had been recognised as a Non-
Current Liability. Given the strategic intent of the Company and the Modification 7 application to progress the mine via
underground methods, the directors have reviewed the net present liability and remeasured the liability based on an
assumed bord & pillar production profile. The liability has been assessed at $10.6 million with the net movement ($0.5
million gain) recorded in the Statement of profit or loss.
The maximum amount payable under the product-based royalty remains capped at $30 million with indexation to apply to
the cap. The net present value adopted is lower than the full nominal amount to reflect, amongst other things, the risk and
time value of the royalty payment stream. Accordingly, the vendor royalty in excess of the recognised net present value
amount is a contingent liability.
43
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 21. Equity - issued capital
Ordinary shares - fully paid
50,484,810
49,234,810
60,522,291
59,522,291
Consolidated
2019
Shares
2018
Shares
2019
$
2018
$
Movements in ordinary share capital
Details
Balance
Share consolidation (1:100)
Total for the year
Balance 30 June 2018
(i) Share Issue
Balance 30 June 2019
Date
No of shares
Issue price
$
30/06/2017
4,923,434,264
59,487,791
08/12/2017
(4,874,199,457)
-
30/06/2018
29/10/2018
49,234,810
1,250,000
50,484,810
59,487,791
1,000,000
60,487,791
(i) 1,250,000 shares issued at $0.80 per share
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
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.
44
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 21: Equity – issued capital (continued)
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 2018 Annual Report.
Note 22. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price
risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of
the consolidated entity. The consolidated entity uses different methods to measure different types of risk to which it is
exposed. These methods include sensitivity analysis in the case of interest rate and other price risks, ageing analysis for
credit risk.
Risk management is carried out by the Chief Financial Officer ('CFO') 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. The CFO identifies, evaluates and hedges financial risks within the consolidated entity's
operating units. The CFO reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The consolidated entity is not currently exposed to foreign currency risk.
Price risk
The consolidated entity is not currently exposed to price risk.
Interest rate risk
The consolidated entity's main interest rate risk arises from long-term borrowings or convertible securities. Borrowings
obtained at variable rates expose the consolidated entity to interest rate risk. Borrowings obtained at fixed rates expose the
consolidated entity to fair value risk.
The consolidated entity's convertible securities (face value $42,000,000) attract a fixed interest rate of 10% per annum, with
interest either capitalised or settled by way of issue of ordinary shares, at the consolidated entity’s election. The consolidated
entity also holds a vendor loan for $7,700,000 at a fixed rate of 10% per annum and a variable bank loan for motor vehicles
for $205,000. An official increase/decrease in interest rates of 100 (2018: 100) basis points for all interest-bearing items
would have an adverse/favourable effect on profit before tax of $499,050 (2018: $425,328) 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.
45
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 22: Financial instruments (continued)
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
2019
$
2018
$
145,380
-
145,380
109,985
-
109,985
The bank loan facility may be drawn at any time and has an average maturity of 1 ½ years (2018: 2.5 years), subject to the
terms of the loan.
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 - 2019
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - fixed rate
Bank loans
Other loans
Secured loans
Convertible notes payable
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
$
-
710,798
-
5.04%
5.68%
10.00%
10.00%
30,814
693,912
7,700,000
-
9,135,524
28,806
-
-
44,532,802
44,561,608
-
-
-
-
-
-
-
-
-
-
-
-
710,798
59,620
693,912
7,700,000
44,532,802
53,697,132
46
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 22: Financial instruments (continued)
Weighted
average
interest rate
%
Consolidated - 2018
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - fixed rate
Bank loans
Other loans
Secured loans
Convertible notes payable
Total non-derivatives
-
2,041,192
-
5.04%
5.68%
35,395
618,008
10.00% 12,700,000
10.00% 37,532,802
52,927,397
59,620
-
-
-
59,620
-
-
-
-
-
-
-
2,041,192
-
95,015
618,008
-
- 12,700,000
- 37,532,802
- 52,987,017
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.
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 - 2019
Assets
Non-current assets – financial assets
Ordinary shares
Total assets
Consolidated - 2018
Assets
Non-current assets – financial assets
Ordinary shares
Total assets
Level 1
$
Total
$
-
2,717,391
2,717,391
-
2,717,391
2,717,391
Level 1
$
Total
$
-
760,870
760,870
-
760,870
760,870
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.
47
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 23. Fair value measurement (continued)
These financial assets are represented by the company’s holding of 54,347,826 ordinary shares in Bowen Coking Coal
Limited (ASX: BCB) as at balance date.
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.
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
2019
$
2018
$
1,064,272
50,133
-
-
1,574,938
52,641
-
-
1,114,407
1,627,579
During the financial year the following fees were paid or payable for services provided by Hall Chadwick Chartered
Accountants, the auditor of the company, its network firms and unrelated firms:
Audit services – Hall Chadwick Chartered Accountants
Audit or review of the financial statements
Other services – Hall Chadwick Chartered Accountants
Preparation of the tax return
Consolidated
2019
$
2018
$
102,567
147,149
11,100
15,517
113,667
162,666
48
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 26. Contingent liabilities
Vendor Royalty
On 7 June 2016 the consolidated entity announced it had reached agreement with the minority joint venture partner at
Dartbrook to acquire the minority partner’s stake, thereby taking the Company’s ownership of Dartbrook to 100%. A
combined contingent royalty arrangement was agreed with the vendors on the following terms:
• An aggregate royalty to the vendors at a rate of A$3.00 per tonne of coal sold or otherwise disposed of and A$0.25
per tonne of any third-party coal processed through the Dartbrook infrastructure, capped at A$30 million with
indexation to apply to the rate and the cap.
At balance date the Dartbrook Mine is permitted to operate as an underground mine by longwall mining method. The
vendor royalty is contingent on the Company achieving future development milestones which may or may not occur. The
Company had assessed the acquisition of Dartbrook Mine and, through the work undertaken by the expert, assessed a
discounted net present value associated with the obligation to pay the vendor royalty of $11.1 million, which had been
recognised as a Non-Current Liability. Given the strategic intent of the Company and the Modification 7 application to
progress the mine via underground methods, the directors have reviewed the net present liability and remeasured the
liability based on an assumed bord & pillar production profile. The liability has been assessed at $10.6 million with the net
movement ($0.5 million gain) recorded in the P&L. The maximum amount payable under the product-based royalty
remains capped at $30 million with indexation to apply to the cap.
The net present value adopted is lower than the full nominal amount to reflect, amongst other things, the risk and time
value of the royalty payment stream. Accordingly, the vendor royalty in excess of the recognised net present value amount
is a contingent liability, with remeasurement likely to occur once development approvals are obtained and the directors
resolve to progress toward construction and operation.
Royalty for Existing Financiers
On 27 September 2018, entity announced it had agreed revised terms with Mr Nicholas Paspaley, Mr John Robinson (Snr)
and Trepang (collectively, the Existing Financiers) in relation to their existing financing arrangements with AQC. These
amendments were approved by shareholders in November 2018 and included two potential royalties payable to the
Existing Financiers:
•
•
In the instance where the proposed joint venture transaction with SNR is completed, the Existing Financiers will
receive a $2.00 per product tonne royalty for coal produced and sold by the joint venture, based on the Company’s
interest in the joint venture.
In the instance where the proposed joint venture transaction with SNR does not complete, the Existing Financiers
will receive a $2.50 per product tonne royalty for all coal produced and sold at Dartbrook.
At present the Dartbrook Mine is permitted to operate as an underground mine by longwall mining method. The potential
royalties payable to the Existing Financiers become payable after the vendor royalty is full discharged. Post balance date
the proposed joint venture transaction with SNR was terminated and therefore this proposed royalty mechanism is no
longer applicable. Refer to Note 32.
Bank Guarantees
The consolidated entity has given bank guarantees as at 30 June 2019 of $80,442 (2018: $80,442) to its landlord.
49
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 27. Commitments
cle Listed
ne 2017
to the financial statements
Exploration and evaluating 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
2019
$
2018
$
350,000
908,000
-
1,258,000
162,000
1,258,000
-
1,420,000
22,199
-
148,499
11,019
22,199
159,518
Operating lease commitments include contracted amounts for offices and plant and equipment under non-cancellable
operating leases expiring within one year 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.
50
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 28. Related party transactions (continued)
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current convertible securities (payable):
Mr John Robinson (Snr)
Mr Nick Paspaley
Trepang Services Pty Ltd
Current secured loans (payable):
Trepang Services Pty Ltd
Current unsecured loans (payable):
Trepang Services Pty Ltd
Consolidated
2019
$
2018
$
11,226,401 11,226,401
11,226,401 11,226,401
22,000,000 15,000,000
-
5,000,000
3,500,000
-
The terms of convertible securities issued to Mr Robinson (Snr), Mr Paspaley and Trepang Services Pty Ltd are set out in
Note 19.
The Company has received funding support from Trepang Services Pty Ltd by way of an unsecured loan. The terms of the
loan are set out at Note 18.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
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
Loss after income tax
Total comprehensive income
Parent
2019
$
2018
$
(7,876,866)
(8,379,740)
(7,876,866)
(8,379,740)
51
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 29. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share based payment reserve
Retained profits
Total equity
Parent
2019
$
2018
$
531,715
2,986,513
51,803,288 49,081,329
4,015,248 49,081,329
58,474,123 48,840,638
60,487,791 59,487,791
-
-
(67,158,625) (59,247,100)
(6,670,834)
240,691
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 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2019.
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.
52
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
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:
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2018
2019
%
%
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%
Name
AQC Investments 1 Pty Ltd
AQC Investments 2 Pty Ltd
Area Coal Pty Ltd
AQC Services Pty Ltd*
AQC Dartbrook Pty Ltd
AQC Dartbrook Management Pty Ltd
Dartbrook Coal (Sales) Pty Ltd
Ipoh Pacific Resources Pty Ltd
Felix St Pty Ltd
IPR Operations Pty Ltd
Mining Investments One Pty Ltd
* previously called Mining Investments Six Pty Ltd
Note 31. Events after the reporting period
Update on Dartbrook Development Partner
On 2 July 2019, the Company announced that certain conditions under the Share Sale Agreement (SSA) with SNR were not
satisfied by SNR by 1 July 2019 (the cut-off date for satisfaction of those conditions) and the SSA was terminated by AQC
effective on 4 July 2019.
Partial Divestment of Investment Holding
On 18 July 2019, the Company announced the sale of a portion of its shareholding in Bowen Coking Coal Limited (ASX:BCB).
A total of 35.3 million shares were sold at $0.045 per share, providing the Company with a cash inflow of $1.589 million.
Modification 7 Update
On 13 August 2019, the Company announced it had received approval from the Independent Planning Commission (IPC) in
relation to some elements of its application to modify the consent for the Dartbrook Coal Mine (DA 231-7-2000, MOD 7). The
IPC did not approve the request for an additional five years of mine life. Notwithstanding, the approval is a significant
milestone for Dartbrook as it provides a platform to recommence mining operations.
Following the approval, the Company will work with the respective government departments to contemporise a range of
management plans and a plan of operations for the mine.
No other matter or circumstance has arisen since 30 June 2019 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.
53
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
Note 32. Reconciliation of profit after income tax to net cash from operating activities
Loss after income tax expense for the year
(13,230,706) (15,866,814)
Consolidated
2019
$
2018
$
Adjustments for:
Depreciation and amortisation
Impairment of exploration & evaluation
Loss on disposal of tenements
Unrealised (gain) / loss on financial assets
Accrued finance costs
Loss on disposal of motor vehicle
Business combination working capital adjustment
Remeasurement of provision
Change in operating assets and liabilities:
Increase / (decrease) in trade and other receivables
Increase / (decrease) 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
1,242,872
80,241
-
(1,956,521)
6,138,515
-
-
(500,000)
1,186,913
-
74,014
489,130
4,965,794
117,116
81,130
(295,001)
112,289
(34,735)
(1,264,028)
(52,123)
(345,463)
(664,953)
(9,412,073) (10,310,257)
Consolidated
2019
$
2018
$
(13,230,706) (15,866,814)
-
-
Profit after income tax attributable to the owners of Australian Pacific Coal Limited
(13,230,706) (15,866,814)
Basic earnings per share
Diluted earnings per share
Earnings per share for profit
Profit after income tax
Non-controlling interest
Cents
Cents
(26.5)
(26.5)
(32.2)
(32.2)
Consolidated
2019
$
2018
$
(13,230,706) (15,866,814)
-
-
Profit after income tax attributable to the owners of Australian Pacific Coal Limited used in
calculating diluted earnings per share
(13,230,706)
(15,866,814)
Basic earnings per share
Diluted earnings per share
Cents
Cents
(26.5)
(26.5)
(32.2)
(32.2)
54
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
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
49,933,440
49,234,810
-
-
-
-
Weighted average number of ordinary shares used in calculating diluted earnings per share
49,933,440
49,234,810
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
During the financial year ended 30 June 2019 there were no share-based payments made to directors, executives or other
personnel.
55
Australian Pacific Coal Limited
Directors' declaration
30 June 2019
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 2019 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
___________________________
John Robinson
Executive Chairman
18 August 2019
Brisbane
56
AUSTRALIAN PACIFIC COAL LIMITED
AND CONTROLLED ENTITIES
ABN 49 089 206 986
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AUSTRALIAN PACIFIC COAL
LIMITED
REPORT ON THE AUDIT OF CONSOLIDATED FINANCIAL STATEMENTS
Report on the Financial Report
Opinion
We have audited the financial report of Australian Pacific Coal Limited and Controlled Entities
(the Group), which comprises the consolidated statement of financial position as at 30 June
2019, the consolidated statement of profit and loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for
the year then ended, and notes to the consolidated financial statements, including a summary of
significant accounting policies and other explanatory information, and the directors’ declaration.
In our opinion the accompanying financial report of Australian Pacific Coal Limited and
Controlled Entities is in accordance with the Corporations Act 2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June
2019 and of its financial performance for the year then ended; and
complying with Australian Accounting Standards and
Regulations 2001; and
the Corporations
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards
require that we comply with relevant ethical requirements relating to audit engagements and plan
and perform the audit to obtain reasonable assurance about whether the financial report is free
from material misstatement. Our responsibilities under those standards are further described in
the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110: Code of Ethics for Professional Accountants (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of the company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial report, which indicates that the company incurred
a net loss of $13,230,706 during the year ended 30 June 2019 and, as of that date; the
company's total liabilities exceeded its total assets by $20,109,164. As stated in Note 1 these
conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty
exists that may cast significant doubt about the company’s ability to continue as a going
concern and therefore, the company may be unable to realise its assets and discharge its
liabilities in the normal course of business and at the amounts stated in the financial report.
Our opinion is not modified in respect of this matter.
57
SYDNEY · PENRITH · MELBOURNE · BRISBANE · PERTH · DARWIN
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
AUSTRALIAN PACIFIC COAL LIMITED
AND CONTROLLED ENTITIES
ABN 49 089 206 986
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AUSTRALIAN PACIFIC COAL LIMITED
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report for the year ended 30 June 2019. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter
How Our Audit Addressed the Key Audit Matter
Recognition and measurement of vendor
royalty provisions
Refer to Note 21 ‘Provisions’ and Note 2 ‘Critical
accounting judgements, estimates and assumptions’
vendor royalty
The Group has vendor royalty provisions of $10,600,000
at 30 June 2019. The calculation of these provisions
requires judgment in estimating the future production, the
timing as to when the future production will be incurred
and the determination of an appropriate rate to discount
the future costs to net present value.
in
the consolidated statement of
We focused on this area due to significance of the
balance
financial
position relative to net assets, and the significant
judgments and assumptions involved in the recognition
and measurement of this obligation.
Our Procedures included, amongst others:
• We evaluated
the
legal and/or constructive
obligations with respect to the vendor royalty
provisions for the Dartbrook operations and the
associated estimates.
• We assessed the accuracy of the calculations
and the appropriateness of the discount rates.
• We assessed
the adequacy of group's
disclosures in relation to provisions.
Key Audit Matter
How Our Audit Addressed the Key Audit Matter
Exploration and evaluation expenditure
Refer to Note 14 ‘Exploration and Evaluation’
At 30 June 2019, the Consolidated Entity had capitalised
exploration assets of $8,461,944. The Group’s
accounting policy in respect of exploration and evaluation
assets is outlined in Note 1.
This is a key audit matter because the carrying value of
the assets are material to the financial statements and
the significant judgements applied in determining whether
an indicator of impairment exists in relation to capitalised
exploration and expenditure assets in accordance with
Australian Accounting Standard AASB 6 Exploration for
and Evaluation of Mineral Resources.
Our Procedures included, amongst others:
• We confirmed the existence and tenure of the
exploration assets
the Group has a
in which
contracted interest by obtaining confirmation of title
from the relevant government agency.
•
In assessing whether an indicator of impairment
exists in relation to the Group’s exploration assets in
accordance with AASB 6 – Exploration for and
Evaluation of Mineral Resources, we:
o examined the minutes of the Group’s board
the Group’s
from
meetings and updates
exploration partners;
o discussed with management the Group’s ability
and intention to undertake further exploration
activities; and
o
tenements
reviewed any
surrendered ensuring
expensed as required.
that have been
these have been
• We tested a sample of additions of capitalised
exploration expenditure to supporting documentation.
58
AUSTRALIAN PACIFIC COAL LIMITED
AND CONTROLLED ENTITIES
ABN 49 089 206 986
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AUSTRALIAN PACIFIC COAL LIMITED
Key Audit Matter
How Our Audit Addressed the Key Audit Matter
Property, Plant and Equipment
Refer to Note 12 ‘Property, Plant and Equipment’
The group has $43,811,645 of property, plant and
equipment at 30 June 2019. Included in the carrying
value is land and buildings amounting to $37,909,279.
We focused on this matter as a key audit matter as land
and buildings is the most significant asset of the group.
Our procedures included amongst others:
• Assessed the Group’s analysis for indicators of
including views of managements
impairment,
valuation specialists. This included consideration of
whether any movements in the valuation drivers
indicated potential impairment by comparing them to
historical results in addition to economic and industry
forecasts.
• We assessed the adequacy of group's disclosures in
relation to the carrying value of property, plant &
equipment.
Key Audit Matter
How Our Audit Addressed the Key Audit Matter
Borrowings
Refer to Note 19 ‘Current - Borrowings’ and Note 20
‘Non-Current - Borrowings’
The Group has $14,612,774 of current borrowings and
$54,458,875 of non-current borrowings as at 30 June
2019.
This is considered to be a key area of audit focus due to
its materiality to the financial report.
Our Procedures included, amongst others:
• We have reviewed the loan documentation
including the terms of the convertible notes and
secured loans and evaluated the accounting
treatment adopted by management in accounting
for the borrowings.
• We recalculated the interest in relation to the
borrowings and ensured it has been accurately
recognised.
• We assessed the adequacy of the Group’s
disclosures in respect of borrowings.
59
AUSTRALIAN PACIFIC COAL LIMITED
AND CONTROLLED ENTITIES
ABN 49 089 206 986
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AUSTRALIAN PACIFIC COAL LIMITED
Information Other Than The Financial Report And Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2019, but does not include the financial report and our auditor’s report
thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible
for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional skepticism throughout the audit. We also:
–
–
–
–
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
60
AUSTRALIAN PACIFIC COAL LIMITED
AND CONTROLLED ENTITIES
ABN 49 089 206 986
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AUSTRALIAN PACIFIC COAL LIMITED
–
–
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the remuneration report included in pages 5 to 10 of the directors’ report for the year ended
30 June 2019.
In our opinion, the remuneration report of Australian Pacific Coal Limited, for the year ended 30 June 2019,
complies with 300A of the Corporations Act 2001.
Responsibilities
The directors of the company are responsible for the preparation and presentation of the remuneration report
in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.
Hall Chadwick
Sydney NSW 2000
SANDEEP KUMAR
Partner
Date: 18 August 2019
61
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 25 October 2019.
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)
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.
for
is ultimately accountable
The Board
the
performance of the Company and provides 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 reporting
systems,
frameworks, governance
issues, and 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
Management is responsible for implementing Board
strategy, day-to-day operational aspects, and
ensuring that all risks and performance issues are
brought the Board’s 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 of a
director.
their consideration about
information
for
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 62
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
1.3: A listed entity should have a written
agreement with each director and senior
executive setting out the terms of their
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
The terms of the appointment of a non-executive
director, executive directors and senior executives
are agreed upon and set out in writing at the time of
appointment.
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
formalised policy
to adopt
limited opportunity
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 (Cth) 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 its own evaluation of the skills, performance
and remuneration of existing Directors from time to
time. Individual Directors may recommend changes to
the composition of the Board.
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
A performance evaluation of the CEO/Managing
Director and the CFO/Company Secretary was not
undertaken during the reporting period given the
status of the company and its business operations.
Page 63
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
CORPORATE GOVERNANCE STATEMENT
undertaken in the reporting period in accordance
with that process.
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 separate nomination
committee. The Board as a whole 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.
industry
experience
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
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 in accordance with the Company’s
short and long term objectives and therefore deliver
value to shareholders.
as well
All Board members are expected to demonstrate the
following attributes:
Board Member Attributes
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 64
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
Leadership
Ethics and
integrity
Represents the Company
positively amongst stakeholders
and external parties; decisively
acts ensuring that all pertinent
facts are considered; leads
others to action; proactive
solution seeker.
Awareness of social,
professional and legal
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.
Experienced director that is
familiar with the mechanisms,
controls and channels to deliver
effective governance and
manage risks.
Corporate
governance
Details of the Board of directors, their appointment
dated, length of service and independence status is
as follows:
Mr John Robinson (Executive Chairman and Chief
Executive Officer): Appointed 30 October 2015,
served 3 years, Non-independent Executive.
The Hon. Shane Stone: Appointed 1 August 2016,
served 3 years, Independent Non-executive.
Mr Bruce Munro: Appointed 19 May 2017, served 2
year, Independent Non-executive.
The board consists of three directors. Two of those
directors, The Hon. Shane Stone and Mr Bruce Munro
are considered independent.
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.
Page 65
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
CORPORATE GOVERNANCE STATEMENT
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
professional development opportunities for
directors to develop and maintain the skills and
knowledge needed to perform their role as
directors effectively.
The Chair, Mr John Robinson, is considered non-
independent and is also the CEO. Given the size and
status of the Company, the Board considers this to be
reasonable as the majority of the Board remains
independent.
New directors undertake an
induction program
coordinated by the Company Secretary that briefs
and informs the director on all relevant aspects of the
Company’s operations and background. Directors are
encouraged
to undertake director development
programs to ensure that directors can enhance their
skills and remain abreast of important developments.
Principle 3 – Act ethically and responsibly
A listed entity should act ethically and responsibly
3.1: A listed entity should:
a) have a code of conduct for its directors, senior
executives and employees; and
b) disclose that code or a summary of it.
The Company Code of Conduct Policy and Ethics
Policy endeavours to foster a culture requiring that
directors and officers act with the utmost integrity,
objectivity and in compliance with the spirit of the law
and Company policies.
Principle 4 – Safeguard integrity in corporate reporting
A listed entity should have formal and rigorous processes that independently verify and safeguard the
integrity of its corporate reporting.
4.1 - The board of a listed entity should:
a) have an audit committee which:
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
ii.
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 Board has established an Audit Committee.
The Audit Committee, up until the resignation of Mr
Roach, consisted of The Hon. Shane Stone
(Independent Non-Executive Director) and Mr
Andrew Roach
(former CFO and Company
Secretary).
Details of the qualifications and experience of the
director members of the Committee is detailed in the
“Information on directors” section of the Directors’
report.
The Chairman of the Audit Committee, The Hon.
Shane Stone,
the board as an
independent director, is financially literate and has the
relevant qualifications and experience.
represents
The Company considers that due to the size, nature
and level of complexity of the Company, the Audit
Committee is appropriate despite not meeting the
strict compliance requirements of Principle 4.1.
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 66
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
the external auditor and the rotation of the audit
engagement partner.
the
integrity of
responsibility
the
for
Ultimate
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’ report.
For the financial year ended 30 June 2019 and the
half-year ended 31 December 2018, 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.
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
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.
Page 67
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
CORPORATE GOVERNANCE STATEMENT
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 relating to
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.
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 68
Corporate Governance Statement
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 regulations; 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, in
relation to material announcements, and respond to
shareholder enquiries on an ad hoc basis. Material
communications are dispatched to investors either via
email, surface mail, and/or via market announcement.
facilitate and
To
to encourage participation at
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
information directly
through
letters, email and other forms of communications;
to shareholders
• 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.
Page 69
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
CORPORATE GOVERNANCE STATEMENT
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.
to
are
encouraged
The Company engages its share registry to manage
the majority of communications with shareholders.
Shareholders
receive
correspondence from the Company electronically,
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
The Company has not established a separate 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 as a whole
therefore performs the function of such a committee
which includes the setting of corporate governance
policy and exercising due care and skill in assessing
risk, developing strategies to mitigate such 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
regulatory and compliance
obligations of the Company are satisfied.
that all
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 an informal review of
the Company’s risk management framework during
the reporting period.
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 70
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
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)
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.
The Company does not have a dedicated internal
audit function. The responsibility for risk management
and internal controls lies with both the CEO and CFO
who continually monitor the Company’s internal and
external risk 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.
Refer to the Company’s Annual Report for disclosures
relating to 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.
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.
The Company has not established a separate
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 as
a whole therefore performs the function of such a
committee which includes setting the Company’s
remuneration structure, determining eligibilities in
relation to incentive schemes, assessing performance
and
remuneration of senior management and
determining the remuneration and incentives of the
Board, CEO and CFO. The Board may obtain external
advice from independent consultants in determining
the Company’s remuneration practices, including
remuneration levels, where considered appropriate.
The board has not implemented any share incentive
arrangements to date, this may be reviewed upon
commencement of operations.
Non-executive directors’ remuneration is fee based
with non-executive directors not eligible to participate
in the Company’s incentive schemes. The level of
remuneration
time
commitments and responsibilities of the position.
anticipated
reflects
the
Page 71
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
CORPORATE GOVERNANCE STATEMENT
The Board considers the procedures, policies and key
performance
the
performance of key executives and directors. Any
equity based executive remuneration may be made in
by
accordance with
shareholders and developed over time.
indicators used
to measure
thresholds
approved
framework and
Full discussion of the Company’s remuneration
remuneration
philosophy and
received by directors and executives in the current
financial year is contained in the Remuneration
Report section of the Directors’ Report. Further
remuneration
details of
procedures can be found in the Remuneration
Committee Charter.
the structure of
the
8.3: A listed entity which has an equity-based
remuneration scheme should:
a) have a policy on whether participants are
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
Where a director or other senior executive uses
derivatives or other hedging arrangements over
vested securities of the Company, this will be
disclosed. There is no equity based renumeration
scheme available to officers or directors at the date of
reporting.
Annual Report
Year Ending 30 June 2019
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 72
Corporate Governance Statement
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this report is as follows.
This information is current as at 30 September 2019.
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 – 50,000
50,001 – 100,000
100,001 – and over
Total
331
367
134
161
25
38
152,384
955,438
1,051,987
3,452,005
1,829,846
43,043,150
1,056
50,484,810
b.
The number of shareholdings held in less than a marketable parcel of 500 shares (closing price $0.13
on 30 September 2019) is 615 and they hold 730,989 shares.
c.
The names of the substantial holders in the company as at 30 September 2019 are:
Substantial Holder
Trepang Services Pty Ltd
Jet Arm Limited
Mr Bugua Wang
d.
Voting Rights
Number
of shares
19,770,000
5,000,000
4,860,319
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.
Page 73
Australian Pacific Coal Limited
ASX Additional Information
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
e.
20 Largest Shareholders — Ordinary Shares
Name
ASX ADDITIONAL INFORMATION
Number of Ordinary
Fully Paid Shares
Held
% Held of
Issued
Ordinary
Capital
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
TREPANG SERVICES PTY LTD
19,770,000
39.16
JET ARM LIMITED
MR BUGUO WANG
HALIKOS PTY LTD
ALLSTATE ASSET CORPORATION P/L
CITICORP NOMINEES PTY LIMITED
MR NICHOLAS THEODORE JAMES PASPALEY
MR MARK ALAN ROWE & MRS CHRISTINE LEE ROWE
MIBRO (NT) PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
SAMBOR TRADING PTY LTD
COOROY ROCK PTY LTD
MR DONALD EDGAR HOAR
SHEMARIAH PTY LTD
SHEMARIAH PTY LTD
MICK LANG PTY LTD
FOLEY SUPER PTY LTD
MRS REBECCA SUE
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
TANUS FISHERIES PTY LTD
5,000,000
4,860,319
1,923,080
1,829,034
1,472,093
1,291,667
433,290
430,000
371,125
345,592
322,215
312,500
301,135
300,692
270,000
265,635
258,045
257,402
255,000
9.90
9.63
3.81
3.62
2.92
2.56
0.86
0.85
0.74
0.68
0.64
0.62
0.60
0.60
0.53
0.53
0.51
0.51
0.51
40,268,824
79.76
f.
Unlisted options
Nil
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).
Annual Report
Australian Pacific Coal Limited
Page 74
Year Ending 30 June 2019
ABN 49 089 206 986
ASX Additional Information
ASX ADDITIONAL INFORMATION
Disclosure Relating to Coal Resource & Reserves
Marketable Reserves Note
The Dartbrook Marketable Coal Reserve of 370Mt is derived from a run of mine Coal Reserve of 470 Mt estimated in
accordance with JORC 2012 with a predicted overall yield of 78%. The 370Mt Marketable Coal Reserve is included in the
2,534 Mt Coal Resource (588Mt Measured, 850 Mt Indicated, 1,097Mt Inferred).
The Company confirms that it is not aware of any new information or data that materially affects the information included in
the announcement and that all material assumptions and technical parameters underpinning the estimates in the
announcement continue to apply and have not materially changed.
Competent Persons Statement - Resources
The information in this report relating to Coal Resources for the Dartbrook Project was announced on 27 June 2017, titled
“Dartbrook Coal Resource Estimate 2.5 Billion Tonnes” and is based on information compiled by Lynne Banwell, a Principal
Consultant of Collective Experience Pty Limited and Associate Consultant of GPPH & Associates. Structure modelling was
carried out by Rebecca Jackson and Monica Davis of Palaris; coal quality modelling, structure model audit and resource
estimations were carried out by Lynne Banwell. Lynne Banwell is a qualified geologist (BSc (Hons) University of Sydney, 1980)
with 30 years’ experience in coal geology and over 20 years’ experience in resource evaluation. Lynne is a Member of the
Australasian Institute of Mining and Metallurgy and has experience in this style of mineralisation and qualifies as a Competent
Person under the JORC code. This Resource Statement has been prepared under the guidelines of the December 2012
edition of the Australian Code for Reporting of Mineral Resources and Ore Reserves (The JORC Code). Neither Lynne Banwell
nor GPPH & Associates has any material interest or entitlement, direct or indirect, in the securities of Australian Pacific Coal
or any companies associated with Australian Pacific Coal Limited.
Lynne Barnwell consents to the release of this report.
Competent Persons Statement - Reserves
The information in this report relating to Coal Reserves for the Dartbrook Project was announced on 28 March 2018, titled
“Dartbrook Coal Reserve Estimate” and is based on information compiled by Ernst Brian Baumhammer, a Principal Consultant
of GPPH & Associates. The Reserve estimations were carried out under the supervision and review of Brian Baumhammer.
Brian Baumhammer is a qualified mining engineer (BE (Hons) University of Sydney, 1984) with 33 years’ experience in mining,
24 years’ experience in coal mining and over 15 years’ experience in reserve estimation. Brian Baumhammer is a Member of
the Australasian Institute of Mining and Metallurgy and has experience in this style of mineralisation and qualifies as a
Competent Person under the JORC code. This Reserve Statement has been prepared under the guidelines of the December
2012 edition of the Australian Code for Reporting of Mineral Resources and Ore Reserves (The JORC Code). Neither Brian
Baumhammer nor GPPH & Associates has any material interest or entitlement, direct or indirect, in the securities of Australian
Pacific Coal Ltd or any companies associated with Australian Pacific Coal Limited.
Brian Baumhammer consents to the release of this report.
The information is extracted from the report entitled “Dartbrook Coal Reserve Estimate” created on 28 March 2018 and is
available to view on www.aqc.ltd.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 announcement and, in the case of estimates of Coal Resources or Coal
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.
Page 75
Australian Pacific Coal Limited
ASX Additional Information
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2019
DIRECTORS
Mr John James Robinson (Executive Chairman and Chief Executive Officer)
CORPORATE DIRECTORY
The Hon. Shane Leslie Stone
Mr Bruce Munro
COMPANY SECRETARY
Mr Craig McPherson
LAWYERS
HopgoodGanim Lawyers
Level 8, Waterfront Place
1 Eagle Street
Brisbane QLD 4000
AUDITORS
Hall Chadwick, Chartered Accountants
Level 14, 41 Collins Street
Melbourne VIC 3004
BANKERS
National Australia Bank Limited
100 Creek Street
Brisbane QLD 4000
SHARE REGISTRY
Link Market Services Limited
Level 21, 10 Eagle Street
Brisbane QLD 4000
Phone: 1300 554 474
www.linkmarketservices.com.au
REGISTERED OFFICE
Australian Pacific Coal Limited
Level 15/344 Queen Street
Brisbane QLD 4000
Phone: +61 7 3221 0679
Fax: +61 7 3229 9323
www.aqcltd.com
Annual Report
Australian Pacific Coal Limited
Year Ending 30 June 2019
ABN 49 089 206 986
Page 76
Corporate Directory
Brisbane QLD 4000
T: 07 3221 0679
www.aqcltd.com