AUSTRALIAN PACIFIC COAL LIMITED
ABN 49 089 206 986
ANNUAL REPORT – 30 JUNE 2021
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
TABLE OF CONTENTS
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
xii
2
5
12
14
15
16
17
18
49
50
55
66
68
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
TOC
INFORMATION ON AUSTRALIAN PACIFIC COAL
Australian Pacific Coal Limited (‘AQC’) is an ASX-listed company focused on acquiring and developing mineral
resource prospects. AQC listed on the Australian Stock Exchange in 1999 and currently has approximately 960
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.
In November 2019 AQC resolved to lodge an appeal against the determination made in August 2019 by the IPC,
acting as the delegate for the Minister of Planning, Infrastructure and Environment (MPIE), with respect to AQC’s
Modification 7 Submission. The appeal sought to have the decision amended, within the current NSW guidelines
for coal mining projects, to permit restart of the mining operations and to provide a reasonable time frame for the
mining to facilitate the necessary capital costs which will be incurred.
In November 2020 AQC reached agreement with the NSW Minister for Planning and Public Spaces in the Land
and Environment Court proceedings the Company has commenced about the determination of its application to
modify the development consent for the Dartbrook Coal Mine. The agreement can only becomes effective, and
the development consent only modified, once the Land and Environment Court disposed of the proceedings in
accordance with the agreement.
Subsequent to reching agreement, AQC has received a number of legal applications from the Hunter
Thoroughbred Breeders Association (HTBA) with such applications intending to potentially delay or prevent the
finalisation of the proceedings on the terms of the agreement that have been reached.
AQC continues to withstand the applications made by HTBA and is currently seeking that the Court disposes of
proceedings on the basis it will have the effect of extending the operation of the development consent for the
Dartbrook mine by 5 years.
The Company is continuing to actively assess all available options for AQC, the Dartbrook Project and
shareholders.
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 David Conry AM
Chairman and Chief Executive Officer1
Mr Conry is an experienced company director and senior executive, who has held or holds several board roles in
the private sector and also for all three levels of government. Mr Conry has private and executive interests in
investment, advisory services, mining and mine rehabilitation.
1 Mr David Conry AM was appointed as a director on 2 April 2020.
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
Page i
Information on Australian Pacific Coal
INFORMATION ON AUSTRALIAN PACIFIC COAL
BOARD OF DIRECTORS continued
Mr Tony Lalor Bachelor of Commerce, Bachelor of Laws
Non-executive Director2
Mr Lalor is a partner at a leading Australian law firm with over 20 years work experience. He practices in corporate
advisory with particular experience in mergers and acquisitions and equity capital market transactions.
2 Mr Tony Lalor was appointed as a director on 2 November 2020.
Mr Mark Jagla Bachelor of Applied Science (Building)
Non-executive Director3
Mr Jagla has qualifications in Bachelor of Applied Science (Building), University of Canberra. Mr Jagla holds
several board roles in the private sector and has extensive experience as a senior manager in the property and
construction
3 Mr Jagla was appointed as a Non-executive Director on 23 September 2020.
KEY COMPANY DATA (as at 20 September 2021)
Listing:
Australian Securities Exchange (ASX:AQC) – Listed in 1999
Shares on Issue:
50,484,810 AQC ORD
(966 shareholders)
Options:
Nil.
Market Capitalisation:
$9.8 million
Quarterly Share Price Activity1:
30 June 2021
31 March 2021
31 December 2020
30 September 2020
High
$0.180
$0.150
$0.175
$0.120
Low
$0.180
$0.145
$0.170
$0.110
Close
$0.180
$0.150
$0.170
$0.110
1 Represent share price activity on the last trading day of the relevant quarter.
Page ii
Information on Australian Pacific Coal
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
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;
During the year, the Company continued to advance the application to modify the existing mining approval to
recommence underground mining operations at the Dartbrook Coal Mine.
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 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
Page iii
Review of Operations
REVIEW OF OPERATIONS
Regional Mining Operations and Projects
Page iv
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
REVIEW OF OPERATIONS
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).
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.
In November 2019 AQC resolved to lodge an appeal against the determination made in August 2019 by the IPC,
acting as the delegate for the Minister of Planning, Infrastructure and Environment (MPIE), with respect to AQC’s
Modification 7 Submission. The appeal sought to have the decision amended, within the current NSW guidelines
for coal mining projects, to permit restart of the mining operations and to provide a reasonable time frame for the
mining to facilitate the necessary capital costs which will be incurred.
In November 2020 AQC reached agreement with the NSW Minister for Planning and Public Spaces in the Land
and Environment Court proceedings the Company has commenced about the determination of its application to
modify the development consent for the Dartbrook Coal Mine. The agreement can only becomes effective, and
the development consent only modified, once the Land and Environment Court disposed of the proceedings in
accordance with the agreement.
Subsequent to reching agreement, AQC has received a number of legal applications from the Hunter
Thoroughbred Breeders Association (HTBA) with such applications intending to potentially delay or prevent the
finalisation of the proceedings on the terms of the agreement that have been reached.
AQC continues to withstand the applications made by HTBA and is currently seeking that the Court disposes of
proceedings on the basis it will have the effect of extending the operation of the development consent for the
Dartbrook mine by 5 years.
The Company has previously stated the five-year extension of the approval period was required to justify the
capital expenditure involved in recommissioning the mine.
The Company is continuing to actively assess its options as to the next steps for the Dartbrook Mine.
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
Page v
Review of Operations
REVIEW OF OPERATIONS
OTHER PROJECTS
In Queensland, the Company holds interests in the Mount Hillalong Coal Project, Matuan Downs Bentonite
Project and a Joint Venture interest on tenements with Blackwood Resources. The Company will continue to
assess potential development or divestment opportunities in relation to these assets.
MINING TENEMENT SUMMARY
Name
Number
Status
Interest Held
Dartbrook Project, Hunter Valley NSW
AUTH 256
AUTH 256
EL 4574
EL 4575
EL 5525
CL 386
ML 1381
ML 1456
ML 1497
EL 4574
EL 4575
EL 5525
CL 386
ML 1381
ML 1456
ML 1497
Renewal Pending *
Renewal Pending *
Renewal Pending *
Renewal Pending *
Granted
Renewal Pending *
Renewal Pending *
Granted
Mount Hillalong Project, Glenden QLD
Mount Hess West
EPC 1867
Granted
Matuan Downs Bentonite Project, Alpha
Mantuan
ML 70360
Granted
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
* The Company has lodged renewal applications for certain Dartbrook Project Authorities,
EL’s and ML’s as noted above.
Name
Number
Status
Interest Held
Blackwood Joint Venture, Miles QLD
Bungaban Creek
Quondong
EPC 1955
EPC 1987
Granted
Granted
10% #
10% #
# The Company’s 100% owned subsidiary Mining Investments One Pty Ltd holds a 10% interest
in each of the following Blackwood Resources Pty Ltd JV tenements.
Page vi
Review of Operations
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Financial Report - 30 June 2021
Page xii
Australian Pacific Coal Limited
Directors' report
30 June 2021
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 2021.
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 David Conry AM (appointed 2 April 2020)
Mr Mark Jagla (appointed 23 September 2020)
Mr Tony Lalor (appointed 2 November 2020)
Ms Ainslie Maclean (appointed 18 November 2019, resigned 23 September 2020)
The Hon. Shane Stone AC (resigned 2 November 2020)
Principal activities
During the financial year the principal continuing activities of the consolidated entity consisted of exploration and development
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 2021.
Review of operations
The review of operations of the consolidated entity during the year is detailed in the review of operations commencing on
page 2 of this annual report and forms part of the directors’ report.
The loss for the consolidated entity after providing for income tax and non-controlling interest amounted to $23,697,496 (30
June 2020: loss of $12,897,828).
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.
2
Australian Pacific Coal Limited
Directors' report
30 June 2021
Matters subsequent to the end of the financial year
On 27 August 2021, the company announced that it had issued 2.500,000 performance rights under the company’s employee
incentive plan. 1,250,000 performance rights will convert into Shares on a one for one basis in the event the Company’s
share’s trade at a VWAP of at least $0.25 for a minimum of 10 consecutive trading days. The balance of 1,250,000
performance rights will convert into Shares on a one for one basis in the event the Company’s share’s trade at a VWAP of
at least $0.35 for a minimum of 10 consecutive trading days.
On 30 July 2021 at a General Meeting, Shareholders approved the Company to proceed with the sale of the Sale Property
(being land on which the Company’s Dartbrook coal mine is situated and associated water rights) to Trepang (or the Trepang
Associates) as set out in the notice of meeting dated 29 June 2021. On 7 September 2021, the company advised that
contracts had been exchanged accepting the offer approved by Shareholders at the General Meeting. Completion of the
transaction has yet to occur.
The company previously advised that it has entered into a revised agreement with the Minister for Planning and Public
Spaces under s34(3) of the Land and Environment Court Act 1979 about the 5 year extension of mining operations under
the development consent for the Dartbrook Coal Mine. The revised agreement does not change the conditions proposed
under the previous s34 agreement but addresses a potential jurisdictional issue arising from the judgment of the Court of
Appeal which removed the Hunter Thoroughbred Breeders Association (HTBA) as a party to the Land and Environment
Court proceedings. The Land and Environment Court has been asked to dispose of the proceedings in accordance with the
revised s34 agreement. Subjected to the end of the financial year, the Court has advised the parties that it considers there
is a further jurisdictional issue arising from proposed condition 2.3(c) (which prevents mining in the Piercefield seam during
the proposed 5 year extension period). The Company remains in discussions with the Minister’s representatives about
resolution of the jurisdictional issue.
During the reporting period the outbreak of what is known as the COVID-19 pandemic continued to spread, resulting in
significant volatility with worldwide economies as well as there being Government imposed social distancing guidelines.
Subsequent to the reporting period the COVID-19 pandemic has remained prevalent, and this may impact the results of
operations of the consolidated entity in future reporting periods. Given the stage of the pandemic, the company is not in a
position to reliably estimate this impact.
No other matter or circumstance has arisen since 30 June 2021 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 explore
other suitable opportunities as they arise.
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 2021
Information on directors
Name:
Title:
Experience and expertise:
Mr David Conry
Chairman and Chief Executive Officer
Mr Conry is an experienced company director and senior executive, who has held or
holds several board roles in the private sector and also for all three levels of
government. Director of Australian Pacific Coal Limited since 2 April 2020 and
appointed as Chief Executive Officer on 16 April 2020.
Other current directorships
None
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
Interests in performance rights:
1,000,000
Name:
Title:
Mr Tony Lalor
Non-Executive Director
Qualifications:
Experience and expertise:
Appointed as a Director on 2 November 2020
B.Com, LLB
Mr Lalor is a partner at a leading Australian law firm with over 20 years work
experience. He practices in corporate advisory with particular experience in mergers
and acquisitions and equity capital market transactions. Director of Australian Pacific
Coal Limited since 2 November 2020.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
Interests in options:
None
Interests in performance rights:
750,000
Name:
Title:
Qualifications:
Experience and expertise:
Mr Mark Jagla
Non-Executive Director
Appointed 23 September 2020
Bachelor of Applied Science (Building)
Mr Jagla has qualifications in Bachelor of Applied Science (Building), University of
Canberra. Mr Jagla holds several board roles in the private sector and has extensive
experience as a senior manager
the property and construction
industries. Director of Australian Pacific Coal Limited since 23 September 2020.
in
None
Other current directorships:
Former directorships (last 3 years): None
None
Special responsibilities:
None
Interests in shares:
None
Interests in options:
None
Interests in performance rights:
Name
Name
Ms Ainslie Maclean
Ms Maclean was appointed as a Director of Australian Pacific Coal Limited on 18
November 2019. Ms Maclean resigned from the Company effective 23 September
2020.
The Hon. Shane Stone
Mr Stone was appointed as a Director of Australian Pacific Coal Limited on 1 August
2016. Mr Stone resigned from the Company effective 2 November 2020.
'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.
4
Australian Pacific Coal Limited
Directors' report
30 June 2021
Company secretary
Mr Craig McPherson was appointed Company Secretary on 23 August 2019. Mr McPherson graduated with a Bachelor of
Commerce degree from the University of Queensland and is a member of Chartered Accountants Australia and New Zealand.
He has over twenty years of commercial and financial management experience and has held various roles with ASX and
TSX listed companies for in excess of ten years in Australia and overseas.
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 2021, and the number of meetings attended by each director were:
The Hon. Shane Stone
Mr David Conry
Ms Ainslie Maclean
Mr Tony Lalor
Mr Mark Jagla
Full board
Audit and Risk Committee
Attended
5
31
3
24
28
Held
7
31
3
24
28
Attended
-
-
-
-
-
Held
-
-
-
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Remuneration report (audited)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
● Principles used to determine the nature and amount of remuneration
● Details of remuneration
● Service agreements
● Share-based compensation
● Additional information
● Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity's executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of
reward. The Board of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward
governance practices:
● competitiveness and reasonableness
● acceptability to shareholders
● performance linkage / alignment of executive compensation
● transparency
The Board is responsible for determining and reviewing remuneration arrangements for its directors and executives. The
performance of the consolidated entity depends on the quality of its directors and executives. The remuneration philosophy
is to attract, motivate and retain high performance and high-quality personnel.
The Board has structured an executive remuneration framework that is market competitive and complementary to the reward
strategy of the consolidated entity.
5
Australian Pacific Coal Limited
Directors' report
30 June 2021
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. Board may, from time
to time, receive advice from independent remuneration consultants to ensure non-executive directors' fees and payments
are appropriate and in line with the market. The chairman's fees are determined independently to the fees of other non-
executive directors based on comparative roles in the external market. The chairman is not present at any discussions
relating to the determination of his own remuneration.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the General Meeting held on 30 October 2015 where the shareholders
approved a maximum annual aggregate remuneration of $500,000.
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.
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 regularly 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 periodically reviews 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 may be 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.
6
Australian Pacific Coal Limited
Directors' report
30 June 2021
Subsequent to year end the Board has implemented an incentive program for executive directors, non-executive directors
and employees and consultants. The incentive program and ancillary arrangements to implement the same were put to
shareholders for their approval in July 2021.
Voting and comments made at the company's 2020 Annual General Meeting ('AGM')
At the 2020 AGM, shareholders voted to support the adoption of the remuneration report for the year ended 30 June 2020.
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 during the year:
● The Hon Shane Stone – Non-executive Director (resigned 2 November 2020)
● David Conry – Chairman and Chief Executive Officer (appointed 2 April 2020)
● Ainslie Maclean – Non-executive Director (appointed 18 November 2019 and resigned 23 September 2020)
● Mr Mark Jagla – Non-executive Director (appointed 23 September 2020)
Mr Tony Lalor – Non-executive Director (appointed 2 November 2020)
●
• ●
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
$
2021
Non-Executive
Directors:
Shane Stone
Ainslie Maclean
Mark Jagla
Tony Lalor
Executive Directors:
David Conry
33,333
-
35,261
34,665
372,485
475,744
-
-
-
-
-
-
-
-
-
-
-
-
3,350
-
-
3,350
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
33,333
-
38,611
34,665
372,485
479,094
1. Ainslie Maclean resigned 23 September 2020
2. Shane Stone resigned 2 November 2020
3. Mark Jagla was appointed 23 September 2020
4. Tony Lalor was appointed 2 November 2020
7
Australian Pacific Coal Limited
Directors' report
30 June 2021
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
$
2020
Non-Executive
Directors:
Shane Stone
Ainslie Maclean
Bruce Munro
Executive Directors:
John J Robinson
David Conry
Other Key
Management
Personnel:
Andrew Roach
100,000
-
68,493
201,923
87,496
81,045
538,957
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,507
8,291
-
3,553
18,351
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
100,000
-
75,000
210,214
87,496
84,598
557,308
1. Bruce Munro resigned 31 March 2020
2. Ainslie Maclean was appointed on 18 November 2019
3.
4. Andrew Roach resigned 23 August 2019
John Robinson resigned 18 November 2019
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Shane Stone
Bruce Munro
Ainslie Maclean
Mark Jagla
Tony Lalor
Executive Directors:
John J Robinson
David Conry
Other Key Management
Personnel:
Andrew Roach
Fixed remuneration
2020
2021
At risk - STI
At risk - LTI
2021
2020
2021
2020
100%
-
-
100%
100%
100%
100%
-
-
-
-
100%
100%
100%
-
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
There was no cash bonus paid/payable or forfeited for the year ended 30 June 2021.
8
Australian Pacific Coal Limited
Directors' report
30 June 2021
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
Term of agreement
Details
David Conry
Chairman and Chief Executive Officer (appointed 2 April 2020)
Ongoing appointment, subject to termination rights noted below.
Base salary for the year ended 30 June 2021 of $350,000 plus a motor vehicle
allowance of $30,000 per year. Mr Conry or his nominee is eligible to receive any forms
of equity type compensation as reasonably determined by the Board from time to time.
The officer may give 3 months’ notice of intention to resign and the Company may
terminate the agreement by giving 3 months’ notice.
Mr Conry is also entitled to receive the following STI’s which remained at risk at 30
June 2021:
a. $100,000 bonus on the realisation of land sales exceeding $20 million exclusive
of GST payable within 60 days after settlement;
b. $100,000 bonus on the Appeal being upheld facilitating a start on the
underground Dartbrook mine; payable on realisation of the land sales within 60
days.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Options
There were no options over ordinary shared issued as remuneration to directors or other key management personnel in the
year ended 30 June 2021.
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
Shane Stone
Ainslie Maclean
David Conry
Tony Lalor
Mark Jagla
Balance at Received
as part of
the start of
the year
remuneration Additions
Disposals*/
Other**
Balance at
the end of
the year
101,525
2,630
-
- 1
- 1
104,155
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
101,525 2
2630 2
-
-
-
104,155
1. Represent shareholding at date of appointment
2. Represent shareholding at date of resignation
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.
9
Australian Pacific Coal Limited
Directors' report
30 June 2021
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)
30 November 2021 - $11.266 million
30 November 2021 - $11.266 million
30 November 2021 - $15 million
30 November 2021 - $7 million
$0.80 14,083,000
$0.80 14,083,000
$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.
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.
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 24 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 24 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 2021:
Taxation services
$
$10,606
$10,606
10
Australian Pacific Coal Limited
Directors' report
30 June 2021
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.
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
___________________________
David Conry AM
Chairman
29 October 2021
Brisbane
11
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 2021, 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: 29 October 2021
12
SYDNEY · PENRITH · MELBOURNE · BRISBANE · PERTH · DARWIN
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
Australian Pacific Coal Limited
Directors' report
30 June 2021
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
14
15
16
17
18
49
50
General information
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
Principal place of business
Level 15, 344 Queen Street
Brisbane QLD 4000
Stair Street
Kayuga NSW 2333
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 29 October 2021. The
directors have the power to amend and reissue the financial statements.
13
Australian Pacific Coal Limited
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2021
Revenue
Other income
Expenses
Employee benefits expense
Depreciation and amortisation expense
Impairment of capitalised exploration and evaluation
Exploration and evaluation expense
Fair value movement of financial assets
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
2021
$
2020
$
4
5
337,926
330,932
13,309
2,745,157
6
14
10
6
7
(496,621)
(1,151,625 )
(3,619,528 )
(69,558)
(5,503,899)
(4,905,891)
(8,301,609)
(672,317)
(1,165,173)
-
(51,920)
-
(6,785,757)
(7,298,750)
(23,697,496) (12,897,828)
-
-
-
-
Total comprehensive income for the year
(23,697,496) (12,897,828)
Earnings per share for profit attributable to the owners of Australian Pacific
Coal Limited
Basic earnings per share
Diluted earnings per share
32
32
(46.7)
(46.7)
(25.5)
(25.5)
Cents
Cents
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
14
Australian Pacific Coal Limited
Statement of financial position
As at 30 June 2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Available for sale asset
Other
Total current assets
Non-current assets
Property, plant and equipment
Intangibles
Exploration and evaluation
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Retained profits
Total equity
Consolidated
Note
2021
$
2020
$
8
9
10
11
12
13
14
16
512,136
66,388
33,694,192
110,616
34,383,332
602,777
68,440
-
84,853
756,070
4,737,881 42,737,432
5,620,000
8,882,799
9,103,036
19,171,856 66,343,267
-
5,435,242
8,998,733
53,555,188 67,099,337
17
18
19
7,788,815
5,912,730
82,920,861 74,635,875
7,724
-
90,709,676 80,556,329
19
19,550,000 19,550,000
19,550,000 19,550,000
110,259,676 100,106,329
(56,704,488) (33,006,992)
20
60,487,791 60,487,791
(117,192,279) (93,494,783)
(56,704,488) (33,006,992)
The above statement of financial position should be read in conjunction with the accompanying notes
15
Australian Pacific Coal Limited
Statement of changes in equity
For the year ended 30 June 2021
Consolidated
Balance at 1 July 2019
Loss after income tax expense for the year
Other comprehensive income for the year,
net of tax
Issued
capital
$
Retained
profits
$
Total equity
$
60,487,791 (80,596,955) (20,109,164)
- (12,897,828) (12,897,828)
-
-
-
Total comprehensive income for the year
- (12,897,828) (12,897,828)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction
costs
-
-
-
Balance at 30 June 2020
60,487,791 (93,494,783) (33,006,992)
Consolidated
Balance at 1 July 2020
Loss after income tax expense for the year
Other comprehensive income for the year, net
of tax
Issued
capital
$
Retained
profits
$
Total equity
$
60,487,791 (93,494,783) (33,006,992)
- (23,697,496) (23,697,496)
-
-
-
Total comprehensive income for the year
- (23,697,496) (23,697,496)
Transactions with owners in their capacity as
owners:
Contributions of equity, net of transaction costs
-
-
-
Balance at 30 June 2021
60,487,791 (117,192,279) (56,704,488)
The above statement of changes in equity should be read in conjunction with the accompanying notes
16
Australian Pacific Coal Limited
Statement of cash flows
For the year ended 30 June 2021
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
Proceeds from sale of property plant & equipment
Proceeds from sale of land
Payments for exploration and evaluation
Proceeds from sale of investments
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Net cash used in financing activities
Consolidated
Note
2021
$
2020
$
353,229
(5,624,612)
384,165
(4,884,445)
(5,271,383)
(2,337)
(4,500,280)
3,876
31
(5,273,720)
(4,496,404)
(93,252)
77,734
3,299,750
(171,971)
-
(20,959)
-
-
(420,856)
2,377,977
3,112,261
1,936,162
5,278,946
(3,296,081)
-
3,332,642
(737,738)
1,982,865
2,594,904
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
(178,594)
715,730
34,662
681,068
(1,980,965)
2,662,033
Cash and cash equivalents at the end of the financial year
8
537,136
715,730
681,068
The above statement of cash flows should be read in conjunction with the accompanying notes
17
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
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.
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 $23,697,496 for the year ended 30 June 2021 and has a deficiency in net
assets of $56,704,488 as at 30 June 2021.
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 amo unts
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 raisings, borrowings or joint ventures from related and non-related parties to support existing or new opportunities.
● Development, exploitation or advancement of existing or new opportunities.
● Continued support from financiers.
● Realisation of surplus assets.
Should the above not generate the expected cash flows, the company may not be able to pay its debts as and when they
become due and payable and it may be required to realise assets and extinguish liabilities other than in the ordinary course
of business and at amounts different from those stated in the financial statements. This report does not include any
adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that
might be necessary should the company and the consolidated entity not continue as going concerns.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in Note 28.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Australian Pacific Coal
Limited ('company' or 'parent entity') as at 30 June 2021 and the results of all subsidiaries for the year then ended. Australian
Pacific Coal Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
18
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity.
Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit
balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Australian Pacific Coal Limited’s functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
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.
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.
19
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
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.
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.
20
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
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.
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
Plant and equipment
15%
17%
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
21
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
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.
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.
22
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement
of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an
equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance
cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders
equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured
in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured 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.
23
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
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.
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.
24
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the company.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated
entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest
in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount
is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
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.
25
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 1. Significant accounting policies (continued)
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The company is of a kind referred to in 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 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.
New and Amended Standards and Interpretations for Future Periods
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 2021.
The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
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.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have,
on the consolidated entity based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Other than as
addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements
or any significant uncertainties with respect to events or conditions which may impact the consolidated entity unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
26
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-
Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting
estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
Provision for impairment of receivables
A simple approach is followed in relation to trade receivables, as the loss allowance is measured at lifetime expected credit
loss.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit
loss rate for each group. These assumptions include recent sales experience, historical collection rates, the impact of the
Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance for expected credit
losses, as disclosed in note 9, is calculated based on the information available at the time of preparation. The actual credit
losses in future years may be higher or lower.
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.
27
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 2. Critical accounting judgements, estimates and assumptions (continued)
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may
lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
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.
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.
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.
28
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 2. Critical accounting judgements, estimates and assumptions (continued)
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.
29
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
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 2021.
Major customers
During the year ended 30 June 2021 there were no external sales made from operations (2020: Nil).
Financial information
Net loss from continuing
operations before tax
2021
$
2020
$
Total Assets
2021
$
2020
$
Exploration & Evaluation
Bentonite mining
Corporate
14,248,284
113,086
9,336,126
6,977,630 52,977,949 66,338,140
98,162
663,035
38,538
5,881,660
18,233
559,006
23,697,496 12,897,828 53,555,188 67,099,337
Note 4. Revenue
Other revenue
Interest
Rent
Total Revenue
Note 5. Other income
Other revenue
Debt forgiveness – SNR Mineral Assets Pty Ltd
Other income
30
Consolidated
2021
$
2020
$
63
337,863
337,926
3,876
327,056
330,932
337,926
330,932
Consolidated
2021
$
2020
$
13,309
-
57,109
2,688,048
13,309
2,745,157
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
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
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
Other allowable items
Consolidated
2021
$
2020
$
146,870
1,004,755
158,288
1,006,885
1,151,625
1,165,173
8,301,609
7,298,750
8,301,609
7,298,750
133,741
36,666
4,629
28,835
Consolidated
2021
$
2020
$
(23,697,496) (12,897,828)
-
(23,697,496) (12,897,828)
(6,516,810)
(3,546,903)
316,696
-
10,637,648
(6,141,830)
319,608
-
6,060,079
(3,791,589)
(1,704,296)
(958,806)
Tax losses and temporary differences not brought to account
1,704,296
958,806
Income tax expense
-
-
31
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 8. Current assets - cash and cash equivalents
Current:
Cash at bank and on hand
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 18)
Balance as per statement of cash flows
Note 9. Current assets - trade and other receivables
Trade and other receivables
Less: Allowance for expected credit loss
Note 10. Available for sale assets
Available for sale assets
Consolidated
2021
$
2020
$
512,136
512,136
602,777
602,777
512,136
25,000
602,777
112,953
537,136
715,730
Consolidated
2021
$
2020
$
66,388
-
68,440
-
66,388
68,440
Consolidated
2021
$
2020
$
33,694,192
33,694,192
-
-
On 14 May 2021 the consolidated entity received an offer from its major shareholder and creditor Trepang Services Pty Ltd
(Trepang) to purchase certain real properties and water rights owned by the consolidated entity that underly the Dartbrook
coal mine. The offer was subject to approval by shareholders at a meeting which was held on 30 July 2021, where amongst
other things shareholders approved the sale of land and water rights owned by the consolidated entity to Trepang.
The consolidated entity has recorded an amount of $33,694,192 (being an amount net of anticipated realisation costs) as an
available for sale asset with such amount separately recognised.
Note 11. Current assets - other
Prepayments
Consolidated
2021
$
2020
$
110,616
84,853
110,616
84,853
32
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 12. 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
2021
$
2020
$
(127,468)
850,788 38,202,079
(454,050)
723,320 37,748,029
180,217
(171,362)
8,855
180,217
(171,130)
9,087
8,252,778
(4,247,072)
4,005,706
8,237,260
(3,256,944)
4,980,316
4,737,881 42,737,432
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 2019
Additions
Disposals
Depreciation expense
Balance at 30 June 2020
Additions
Disposals
Impairment
Available for Sale
Depreciation expense
Land and
buildings
$
Leasehold
improvements
$
Plant and
equipment
$
Total
$
37,909,279
-
-
(161,250)
37,748,029
-
(3,299,750)
(5,503,899)
(28,073,831)
(147,229)
-
9,288
-
(201)
5,902,367 43,811,646
90,959
-
(1,165,173)
81,671
-
(1,003,722)
9,087
-
-
-
-
(232)
4,980,316 42,737,432
93,252
93,252
(3,363,448)
(63,698)
-
(5,503,899)
- (28,073,831)
(1,151,625)
(1,004,164)
Balance at 30 June 2021
723,320
8,855
4,005,706
4,737,881
Refer to Note 22 for further information on fair value measurement.
33
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 13. Non-current assets - intangibles
Dartbrook water licenses
Consolidated
2021
$
2020
$
-
5,620,000
Water licences were initially measured at cost on acquisition. Subsequent to the end of the reporting period Shareholders
approved the sale of land and water rights owned by the consolidated entity to Trepang Services Pty Ltd. The consolidated
entity has recorded the water rights as an available for sale asset with such amount separately recognised. Refer Note 10
for further information.
Note 14. Non-current assets - exploration and evaluation
Exploration and evaluation - at cost
Consolidated
2021
$
2020
$
5,435,242
8,882,799
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 2019
Additions
Tenements surrendered
Balance at 30 June 2020
Additions
Impairments
Balance at 30 June 2021
Exploration
and
evaluation
$
Total
$
8,461,943
420,856
-
8,461,943
420,856
-
8,882,799
171,971
(3,619,528)
8,882,799
171,973
(3,619,528)
5,435,242
5,435,242
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.
During the reporting period, the consolidated entity assessed its capitalised exploration and evaluation expenditure in relation
to its Queensland coal assets for impairment and recorded an impairment loss of $668,208. The impairment follows the
consolidated entity’s intention with respect to future exploration expenditure at the projects.
In addition, during the reporting period the consolidated entity assessed its capitalised exploration and evaluation expenditure
in relation to its Dartbrook Project for impairment and recorded an impairment loss of $2,951,320. The impairment follows
the consolidated entity’s review of capitalised exploration expenditure applicable to future open cut coal mining operations
at the Dartbrook project where these costs have been impaired in full.
34
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 15. Non-current assets - deferred tax
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss
Tax losses – operating losses
Tax losses – capital losses
Dartbrook Mine Acquisition
Tax assets not brought to account
Consolidated
2021
$
2020
$
8,327,516
5,968,507
19,113,018 17,408,722
523,984
172,769
523,984
2,400,317
(30,364,835) (24,073,782)
Deferred tax asset
-
-
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 – loans
Refer to Note 21 for further information on financial instruments.
Consolidated
2021
$
2020
$
25,000
8,973,733
112,953
8,990,083
8,998,733
9,103,036
Consolidated
2021
$
2020
$
2,264,242
5,524,423
2,383,659
3,529,071
7,788,815
5,912,730
35
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 18. Current liabilities - borrowings
Bank loans
Convertible securities
Insurance premium funding
Unsecured Loan – Trepang Services Pty Ltd
Interest bearing liabilities
a)
b)
c)
Consolidated
2021
$
2020
$
-
22,494
66,443,979 60,145,935
93,446
6,674,000
7,700,000
118,311
8,658,571
7,700,000
82,920,861 74,635,875
a) The Convertible securities balance is comprised of following instruments:
i. 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. Subsequently on 13 April 2017, shareholders of the Company approved new
terms for the convertible notes including the capitalization of interest into new convertible securities resulting is a
new face value of $22,532,803. 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 2018.
ii. 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 2018.
iii. 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.
Total accrued interest relating to the above loans as at balance date of $21,911,176.
iv.
b) During the financial year, Trepang Services Pty Ltd has contributed further capital of $1,984,571 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 $1,657,191 (refer Note 17).
c) 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. On 28 April 2020 the consolidated entity announced that it had received notice from
Anglo that it had assigned to Trepang Services Pty Ltd all of its rights, title and interest in the loan. The term of the loan has
been varied to provide for a revised maturity date of 30 November 2021. Total accrued interest relating to the loan as at
balance date is $3,867,052 (refer Note 17).
Refer to Note 21 for further information on financial instruments.
36
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Bank loans
Insurance premium funding
Convertible securities
Loan – Trepang Services Pty Ltd
Consolidated
2021
$
2020
$
-
118,311
22,494
93,446
66,443,979 60,145,935
7,700,000
7,700,000
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.
74,262,290 67,961,875
The convertible securities are issued to Mr Robinson Snr, Mr Paspaley and Trepang Services Pty Ltd. The interests of the
convertible note holders is subordinated to the secured vendor loan of $7.7 million.
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. On 28 April 2020 the consolidated entity announced that it had
received notice from Anglo that it had assigned to Trepang Services Pty Ltd all of its rights, title and interest in the loan.
Financing arrangements
Access was available at the reporting date to the following lines of credit:
Total facilities
Bank loans
Used at the reporting date
Bank loans
Consolidated
2021
$
2020
$
25,000
25,000
25,000
25,000
13,038
13,038
22,494
22,494
37
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 19. 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
2021
$
2020
$
-
-
7,724
7,724
25
8,950,000
10,600,000
19,550,000
8,950,000
10,600,000
19,550,000
7,724
-
(7,724)
-
22,591
3,873
(18,740)
7,724
10,600,000
-
-
10,600,000
10,600,000
-
-
10,600,000
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 2021. 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.
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 in the prior financial year.
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.
38
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 20. Equity - issued capital
Consolidated
2021
Shares
2020
Shares
2021
$
2020
$
Ordinary shares - fully paid
50,484,810
50,484,810
60,487,791
60,487,791
Balance 30 June 2020
Balance 30 June 2021
50,484,810
50,484,810
60,487,791
60,487,791
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.
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.
39
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 21. 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 Executive Officer ('CEO') 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 CEO identifies, evaluates and hedges financial risks within the consolidated entity's
operating units. The CEO reports to the Board on a regular 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 $44,532,803) 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. An official increase/decrease in interest
rates of 100 (2020: 100) basis points for all interest-bearing items would have an adverse/favourable effect on profit before
tax of $52,232 (2020: $499,050) per annum.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. Credit risk is managed through the maintenance of procedures (such procedures include the utilisation
of systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and
monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that
customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing
receivables for impairment. Depending on the division within the Group, credit terms are generally 14 to 30 days from the
invoice date.
The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any
provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial
statements. The consolidated entity does not hold any collateral.
The consolidated entity has no significant concentration of credit risk with any single counterparty or group of counterparties.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
40
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 21: Financial instruments (continued)
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 - 2021
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - fixed rate
Bank loans
Other loans
Secured loans *
Unsecured 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
$
-
2,264,243
5.04%
-
5.68%
118,311
10.00%
7,700,000
8,658,571
10.00%
10.00% 44,532,803
63,273,928
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,264,243
-
-
-
118,311
-
7,700,000
8,658,571
-
- 44,532,803
- 63,273,928
* In addition, interest continues to accrue on amounts owing as outlined in Note 18.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - fixed rate
Bank loans
Other loans
Secured loans
Unsecured 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
$
-
2,383,659
22,494
5.04%
93,446
5.68%
7,700,000
10.00%
10.00%
6,674,000
10.00% 44,532,802
61,406,401
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,383,659
22,494
93,446
7,700,000
6,674,000
44,532,802
61,406,401
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.
41
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 22. 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 - 2021
Level 1
$
Total
$
Assets
Non-current assets – Exploration & Evaluation Impairment
Non-current assets – Land Impairment
Ordinary shares
Total assets
(3,619,528)
(5,403,899)
-
(9,123,427)
Consolidated - 2020
Assets
Non-current assets – financial assets
Ordinary shares
Total assets
Level 1
$
Total
$
-
-
-
-
-
-
-
-
-
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.
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.
42
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 23. 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
Note 24. Remuneration of auditors
Consolidated
2021
$
2020
$
475,744
3,350
538,957
18,351
479,094
557,308
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
2021
$
2020
$
89,750
116,136
10,606
3,080
100,356
119,216
43
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 25. 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.
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.
44
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 26. Commitments
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.
Note 27. Related party transactions
Parent entity
Australian Pacific Coal Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 29.
Consolidated
2021
$
2020
$
364,000
-
-
364,000
529,000
70,000
-
599,000
Key management personnel
Disclosures relating to key management personnel are set out in Note 23 and the remuneration report included in the
directors' report.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current 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
2021
$
2020
$
11,226,401 11,226,401
11,226,401 11,226,401
22,000,000 22,000,000
7,700,000
7,700,000
8,658,571
6,674,000
In addition, interest continues to accrue on the above amounts owing to related parties as set out in Note 18.
The terms of convertible securities issued to Mr Robinson (Snr), Mr Paspaley and Trepang Services Pty Ltd and the
secured loan from Trepang Services Pty Ltd are set out in Note 18
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.
45
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 28. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
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
2021
$
2020
$
(8,241,196)
(7,562,406)
(8,241,196)
(7,562,406)
Parent
2021
$
2020
$
548,113
650,085
54,758,888 53,883,987
55,325,131 68,120,211
77,236,308 68,120,211
60,487,791 60,487,791
-
(80,965,211) (74,724,015)
(22,477,420) (14,236,224)
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 2021.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021.
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.
46
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 29. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries
in accordance with the accounting policy described in Note 1:
Name
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
Principal place of business /
Country of incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2020
2021
%
%
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%
Note 30. Events after the reporting period
On 27 August 2021, the company announced that it had issued 2.500,000 performance rights under the company’s employee
incentive plan. 1,250,000 performance rights will convert into Shares on a one for one basis in the event the Company’s
share’s trade at a VWAP of at least $0.25 for a minimum of 10 consecutive trading days. The balance of 1,250,000
performance rights will convert into Shares on a one for one basis in the event the Company’s share’s trade at a VWAP of
at least $0.35 for a minimum of 10 consecutive trading days.
On 30 July 2021 at a General Meeting, Shareholders approved the Company to proceed with the sale of the Sale Property
(being land on which the Company’s Dartbrook coal mine is situated and associated water rights) to Trepang (or the Trepang
Associates) as set out in the notice of meeting dated 29 June 2021. On 7 September 2021, the company advised that
contracts had been exchanged accepting the offer approved by Shareholders at the General Meeting. Completion of the
transaction has yet to occur.
The company previously advised that it has entered into a revised agreement with the Minister for Planning and Public
Spaces under s34(3) of the Land and Environment Court Act 1979 about the 5 year extension of mining operations under
the development consent for the Dartbrook Coal Mine. The revised agreement does not change the conditions proposed
under the previous s34 agreement but addresses a potential jurisdictional issue arising from the judgment of the Court of
Appeal which removed the Hunter Thoroughbred Breeders Association (HTBA) as a party to the Land and Environment
Court proceedings. The Land and Environment Court has been asked to dispose of the proceedings in accordance with the
revised s34 agreement. Subjected to the end of the financial year, the Court has advised the parties that it considers there
is a further jurisdictional issue arising from proposed condition 2.3(c) (which prevents mining in the Piercefield seam during
the proposed 5 year extension period). The Company remains in discussions with the Minister’s representatives about
resolution of the jurisdictional issue.
During the reporting period the outbreak of what is known as the COVID-19 pandemic continued to spread, resulting in
significant volatility with worldwide economies as well as there being Government imposed social distancing guidelines.
Subsequent to the reporting period the COVID-19 pandemic has remained prevalent, and this may impact the results of
operations of the consolidated entity in future reporting periods. Given the stage of the pandemic, the company is not in a
position to reliably estimate this impact.
No other matter or circumstance has arisen since 30 June 2021 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.
47
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2021
Note 31. Reconciliation of profit after income tax to net cash from operating activities
Loss after income tax expense for the year
(23,697,496) (12,897,828)
Consolidated
2021
$
2020
$
Adjustments for:
Depreciation and amortisation
Impairment of exploration & evaluation
Impairment of Other Assets
Unrealised (gain) / loss on financial assets
Accrued finance costs
Debt forgiveness
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 32. Earnings per share
Earnings per share for profit from continuing operations
Profit after income tax
Non-controlling interest
1,151,622
3,619,528
5,503,899
-
8,299,216
-
1,165,173
-
339,414
7,261,108
(2,688,048)
18,402
(25,763 )
(143,128)
113,071
675,708
1,534,998
(5,273,720)
(4,496,404)
Consolidated
2021
$
2020
$
(23,697,496) (12,897,828)
-
Profit after income tax attributable to the owners of Australian Pacific Coal Limited
(23,697,496) (12,897,828)
Basic earnings per share
Diluted earnings per share
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
Cents
Cents
(46.7)
(46.7)
(25.8)
(25.8)
Number
Number
50,484,810
50,484,810
-
-
-
-
Weighted average number of ordinary shares used in calculating diluted earnings per share
50,484,810
50,484,810
Convertible notes are considered anti-dilutive as the consolidated entity is loss making. Convertible notes potentially dilute
earnings per share in the future.
Note 33. Share-based payments
During the financial year ended 30 June 2021 there were no share-based payments made to directors, executives or other
personnel.
48
Australian Pacific Coal Limited
Directors' declaration
30 June 2021
In the opinion of the directors of Australian Pacific Coal Limited (the Company)
●
●
●
●
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 2021 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
___________________________
David Conry AM
Chairman and Chief Executive Officer
29 October 2021
Brisbane
49
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 2021, 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 2021
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, 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 $23,697,496 during the year ended 30 June 2021 and, as of that date; the company's
total liabilities exceeded its total assets by $56,704,488. 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.
50
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 2021. 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
Exploration and evaluation expenditure
Refer to Note 13 ‘Exploration and Evaluation’
At 30 June 2021, the Consolidated Entity had capitalised
exploration assets of $5,435,242. 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.
Key Audit Matter
How Our Audit Addressed the Key Audit Matter
Current Assets held for sale
Refer to Note 10 ‘Current Assets Held for Sale’
The group has recognised Non current Assets held for
sale amounting to $33,694,192 and is comprised of land
and buildings and intangible assets which as is classified
current assets at 30 June 2021.
We focused on this matter as a key audit matter as this is
being sold to a related party which was approved for sale
by shareholders subsequent to year end and is the most
significant asset of the group.
Our procedures included amongst others:
• Assessed the Group’s carrying value of this asset to
determine the reasonableness of the amount and
whether appropriate impairment was recognised.
• We reviewed the management’s valuation of the
carrying value of the assets held for sale to determine
if the carrying value is recoverable and if the
transaction is on an arm’s length basis.
• We assessed the adequacy of group's disclosures in
relation to the carrying value of the non current assets
held for sale and the status of the transaction.
51
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
Borrowings
Refer to Note 18 ‘Current - Borrowings’
The Group has $82,920,861 of current borrowings as at
30 June 2021.
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 documentations
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.
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 2021, 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.
52
AUSTRALIAN PACIFIC COAL LIMITED
AND CONTROLLED ENTITIES
ABN 49 089 206 986
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AUSTRALIAN PACIFIC COAL LIMITED
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.
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.
53
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 Remuneration Report
We have audited the remuneration report included in pages 7to 9 of the directors’ report for the year ended 30
June 2021.
In our opinion, the remuneration report of Australian Pacific Coal Limited, for the year ended 30 June 2021,
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: 29 October 2021
54
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”)
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 29 October 2021.
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 clearly delineate the respective roles and responsibilities of its board and management
and regularly review their performance.
1.1: A listed entity should have a board charter
setting out:
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)
A formal board charter has not been established given
the size of the Company’s Board and management.
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 an annual basis. It is responsible for
systems,
overseeing all
remuneration 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.
corporate
reporting
Management is responsible for implementing Board
strategy, day-to-day operational aspects, and
ensuring that all risks and performance issues are
brought to the Board’s attention. They must operate
within the risk and authorisation parameters set by the
Board.
Page 55
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
CORPORATE GOVERNANCE STATEMENT
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.
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 and disclose a diversity policy;
b)
through its board or a committee of the board set
measurable objectives for achieving gender
diversity in the composition of its board, senior
executives and workforce generally; and
c) disclose in relation to each reporting period:
i.
ii.
the measurable objectives set for that
period to achieve gender diversity;
the entity’s progress towards achieving
those objectives; and
iii. 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
ii. 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
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
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 nor has it set measurable objectives for
achieving gender diversity as it has a small number of
directors and employees and has limited opportunity
and scope to adopt formalised policy guidelines or
measurable objectives.
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.
At reporting date, the Company had three directors
and one company secretary all of which were male.
During the year the board did however include one
female participation.
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.
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 56
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
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 evaluating the
performance of its senior executives at least
once every reporting period; and
b) disclose, in relation to each reporting period,
whether a performance evaluation was
undertaken in the reporting period in accordance
with that process.
Due to its size 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
Individual Directors may
recommend changes to the composition of the Board.
time.
time
to
Until such time as the Company expands to justify an
expansion of Board members, the Board is of the
current opinion that such performance evaluation is
suitable for the Company.
The Board reviews
executives periodically.
the performance of senior
No performance evaluation of the executives was
undertaken during the reporting period given the
status of the company, its business operations and
the composition of its executive.
Principle 2 – Structure the board to be effective and add value
A listed entity should be of an appropriate size and collectively have the skills, commitment and knowledge of
the entity and the industry in which it operates, to enable it to discharge its duties effectively and to add value.
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;
The Company does not have a separate nomination
committee. Given the size of the Board, 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
necessary
assessing
responsible
competencies of the Board members to add value to
the Company, reviewing Board succession plans and
evaluating the Board’s performance.
the
for
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.
Page 57
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
CORPORATE GOVERNANCE STATEMENT
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.
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
b)
The current Board members represent individuals
that have extensive experience as well as
professionals that bring to the Board their specific
skills in order for the Company to achieve its strategic,
operational and compliance objectives. Their
suitability to the directorship has therefore been
determined primarily on the basis of their ability to
deliver outcomes in accordance with the Company’s
short and long term objectives and therefore deliver
value to shareholders.
All Board members are expected to demonstrate the
following attributes:
Board Member Attributes
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:
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 58
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
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.
c)
2.4: A majority of the board of a listed entity
should be independent directors.
2.5: The chair of the board of a listed entity should
be an independent director and, in particular,
should not be the same person as the CEO of the
entity.
2.6: A listed entity should have a program for
inducting new directors and for periodically
reviewing whether there is a need for existing
directors to undertake professional development
to maintain the skills and knowledge needed to
perform their role as directors effectively.
Mr David Conry AM: Appointed 2 April 2020, served
more than 1 year, Independent Executive Director.
Mr Tony Lalor: Appointed 2 November 2020, served
less
Independent Non-Executive
Director.
than 1 year,
Mr Mark Jagla: Appointed 23 September 2020,
served 1 year, Non-independent Non-executive.
The board consists of three directors. Two of those
directors, Mr David Conry AM and Mr Tony Lalor are
considered independent.
The current Chair, Mr David Conry AM, is considered
an independent director however he also fulfills the
role of CEO.
Given the size and status of the Company and its
operational status, the Board considered this to be
appropriate.
induction program
New directors undertake an
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,
however no formal program of review has been
implemented given the status of the Company and its
operational status.
Principle 3 – Instil a culture of acting lawfully, ethically and responsibly
A listed entity should instil and continually reinforce a culture across the organisation of acting lawfully, ethically
and responsibly.
3.1: A listed entity should articulate and disclose
its values.
3.2: A listed entity should:
a) have and disclose a code of conduct for its
directors, senior executives and employees; and
b) ensure that the board or a committee of the
board is informed of any material breaches of
that code.
A formal value statement has not been established or
disclosed given the size of the Company’s Board and
management.
The Company is committed to conducting all of its
business activities fairly, honestly with a high level of
integrity, and in compliance with all applicable laws,
rules and regulations. The Board and management
are dedicated to high ethical standards and recognise
and support
to
compliance with these standards.
the Company’s commitment
A formal code of conduct has not been established
given
the Company’s Board and
management.
the size of
Page 59
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
CORPORATE GOVERNANCE STATEMENT
3.3: A listed entity should:
a) have and disclose a whistleblower policy; and
b) ensure that the board or a committee of the
board is informed of any material incidents
reported under that policy.
The Company’s Whistleblower Policy is available on
the Company’s website. Any material breaches of the
Whistleblower Protection Policy are to be reported in
accordance with this policy.
3.4: A listed entity should:
a) have and disclose an anti-bribery and corruption
b)
policy; and
ensure that the board or a committee of the
board is informed of any material breaches of
that code.
A formal anti-bribery and corruption policy has not
been established given the size of the Company’s
Board and management.
Principle 4 – Safeguard the integrity of corporate reports
A listed entity should have formal and rigorous processes that independently verify and safeguard the
integrity of its corporate reporting.
Given the current membership of the Board and the
size, organisational complexity and scope of
the same efficiencies of an audit
operations,
committee would not be derived from a formal
committee structure.
Responsibility for establishing and maintaining a
framework of internal control and setting appropriate
standards for the management of the Company rests
with the Board. The Board is also responsible for the
integrity of financial information in the financial
statements; audit, accounting and financial reporting
obligations; safeguarding the independence of the
external auditor; and financial risk management.
For the financial year ended 30 June 2021 the
Company’s CEO and CFO provided the Board with
the required declarations.
4.1 - The board of a listed entity should:
a) have an audit committee which:
ii.
i. has at least three members, all of whom are
non-executive directors and a majority of
whom are independent directors; and
is chaired by an independent director, who
is not the chair of the board, and disclose:
the charter of the committee;
iii.
iv. the relevant qualifications and experience of
v.
the members of the committee; and
in relation to each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
b)
if it does not have an audit committee, disclose
that fact and the processes it employs that
independently verify and safeguard the integrity
of its corporate reporting, including the
processes for the appointment and removal of
the external auditor and the rotation of the audit
engagement partner.
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.
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 60
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
4.3: A listed entity should disclose its process to verify
the integrity of any periodic corporate report it
releases to the market that is not audited or reviewed
by an external auditor.
Given the current size of the Board and management,
the Company ensures that the corporate reports it
releases are reviewed by the Board to ensure the
financial and technical content is accurate, balanced
and understandable.
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 have and disclose a
written policy for complying with its continuous
disclosure obligations under listing rule 3.1.
5.2: A listed entity should ensure that its board
receives copies of all material market
announcements promptly after they have been
made.
5.3: A listed entity that gives a new and
substantive investor or analyst presentation
should release a copy of the presentation
materials on the ASX Market Announcements
Platform ahead of the presentation.
The Company is committed to promoting investor
confidence and ensuring that shareholders and the
market are provided with timely and balanced
disclosure of all material matters concerning the
Company, as well as ensuring that all shareholders
have equal and timely access to externally available
information issued by the Company, and takes its
continuous disclosure obligations seriously.
Primary responsibility rests with the Chief Executive
Officer, while the Company Secretary is primarily
responsible for communications with the Exchange.
Whilst the Company does not have a formal policy,
the Company notifies
the ASX promptly of
information:
• concerning the Company, that a reasonable person
would expect to have a material effect on the price or
value of the Company’s securities; and
• that would, or would be likely to, influence persons
who commonly invest in securities in deciding
whether to acquire or dispose of the Company’s
securities.
Announcements are made in a timely manner, are
factual and do not omit material information in order
to avoid the emergence of a false market in the
Company’s securities.
Given the size of the Consolidated Entity, a formal
continuous disclosure policy has not been adopted.
Given the current size of the Board and management,
the Company aims
that all market
announcements are received prior to release to the
market, but if not they are promptly distributed at the
time of market announcement.
to ensure
Given the status of the Company’s operations, the
company has not recently provided an presentations
to investors or analysts.
Page 61
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
CORPORATE GOVERNANCE STATEMENT
The company will comply in the event there is a future
presentation to investors.
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 have an investor relations
program
two-way
that
communication with investors.
effective
facilitate
6.3: A listed entity should disclose how it facilitates
and encourages 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.
6.4: A listed entity should ensure that all substantive
resolutions at a meeting of security holders are
decided by a poll rather than by a show of hands.
The Company will ensure
that all substantive
resolutions at shareholders meetings are decided by
poll rather than a show of hands.
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 62
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
6.5: 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 CEO is responsible for
monitoring operational risk, ensuring all relevant
insurances are in place, and ensuring that all
regulatory and compliance obligations of
the
Company are satisfied.
is
for
reviewing
responsible
The Board
the
Company’s policy on risk management and risk
oversight. The Board did not conduct a formal review
of the Company’s risk management framework during
the reporting period due to the nature of the
operations during the year.
Page 63
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
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.
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 and executives. 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.
8.2: A listed entity should separately disclose its
policies and practices regarding the remuneration of
non-executive directors and the remuneration of
executive directors and other senior executives.
Non-executive directors’ remuneration is fee based
with the level of remuneration reflective of the
anticipated time commitments and responsibilities of
the position.
Annual Report
Year Ending 30 June 2021
Australian Pacific Coal Limited
ABN 49 089 206 986
Page 64
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
indicators used
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.
to measure
thresholds
approved
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.
framework and
Where a director or other senior executive uses
derivatives or other hedging arrangements over
vested securities of the Company, this will be
disclosed. There was no equity based renumeration
during the reporting period.
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
Page 65
Corporate Governance Statement
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
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 27 October 2021.
ASX ADDITIONAL INFORMATION
1.
Shareholding
a.
Distribution of Shareholders – Ordinary Securities
Number
Number
Category (size of holding)
of holders
of shares held
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 50,000
50,001 – 100,000
100,001 – and over
Total
307
330
115
147
30
37
966
127,487
879,972
900,986
3,053,492
2,129,783
43,393,090
50,484,810
b.
The number of shareholdings held in less than a marketable parcel of 500 shares (closing price on 27
October 2021) is 496 and they hold 453,333 shares.
c.
The names of the substantial holders in the company as at 27 October 2021 are:
Substantial Holder
Trepang Services Pty Ltd
Mr Buguo Wang
Jet Arm Limited
Number
of shares
21,061,667
5,180,000
5,000,000
d.
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares:
—
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present
at a meeting or by proxy has one vote on a show of hands.
Unlisted options:
—
Options do not entitle the holders to vote in respect of the option, nor participate in dividends,
when declared, until such time as the options are exercised and subsequently registered as
ordinary shares.
Annual Report
Australian Pacific Coal Limited
Page 66
Year Ending 30 June 2021
ABN 49 089 206 986
ASX Additional Information
ASX ADDITIONAL INFORMATION
e.
20 Largest Shareholders — Ordinary Shares
Name
TREPANG SERVICES PTY LTD
MR BUGUO WANG
JET ARM LIMITED
HALIKOS PTY LTD
ALLSTATE ASSET CORPORATION P/L
CITICORP NOMINEES PTY LIMITED
MR NICHOLAS THEODORE JAMES PASPALEY
SAMBOR TRADING PTY LTD
MR MARK ALAN ROWE & MRS CHRISTINE LEE ROWE
MIBRO (NT) PTY LTD
COOROY ROCK PTY LTD
MR DONALD EDGAR HOAR
SHEMARIAH PTY LTD
SHEMARIAH PTY LTD
MOODYCORP PTY LTD
MICK LANG PTY LTD
MRS REBECCA SUE
TANUS FISHERIES PTY LTD
MR PETER GRAHAM WELLS
MR BOUTROS SAAD & MRS MARIAM SAAD
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
f.
Unlisted options
Nil
g.
Performance Rights
Number of Ordinary
Fully Paid Shares
Held
% Held of
Issued
Ordinary
Capital
19,770,000
5,180,000
5,000,000
1,923,080
1,829,034
1,391,005
1,291,667
927,055
433,290
430,000
342,215
312,500
301,135
300,692
276,851
270,000
258,045
255,000
252,159
230,421
39.16
10.26
9.90
3.81
3.62
2.76
2.56
1.84
0.86
0.85
0.68
0.62
0.60
0.60
0.55
0.53
0.51
0.51
0.50
0.46
40,974,149
81.16
The company has issued 2.500,000 performance rights under the company’s employee incentive plan.
1,250,000 performance rights will convert into Shares on a one for one basis in the event the
Company’s share’s trade at a VWAP of at least $0.25 for a minimum of 10 consecutive trading days.
The balance of 1,250,000 performance rights will convert into Shares on a one for one basis in the
event the Company’s share’s trade at a VWAP of at least $0.35 for a minimum of 10 consecutive trading
days.
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).
Competent Persons Statement
All exploration results and mineral resources referred to in this Annual Report have previously been announced to the market by the Company
in accordance with the requirements of Chapter 5 of the ASX Listing Rules and the JORC Code 2012, including as to the requirements for a
statement from a Competent Person; and the relevant announcements have been referred to in the body of the Annual Report. The Company
confirms that it is not aware of any new information or data that materially affects that information.
Page 67
Australian Pacific Coal Limited
ASX Additional Information
ABN 49 089 206 986
Annual Report
Year Ending 30 June 2021
CORPORATE DIRECTORY
DIRECTORS
Mr David Conry AM
Mr Tony Lalor
Mr Mark Jagla
COMPANY SECRETARY
Mr Craig McPherson
AUDITORS
Hall Chadwick, Chartered Accountants
Level 14, 41 Collins Street
Melbourne VIC 3004
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 2021
ABN 49 089 206 986
Page 68
Corporate Directory