Annual Report
Australian Pacific Coal Limited
Year Ending 30 June 2023
ABN 49 089 206 986
AUSTRALIAN PACIFIC COAL LIMITED
ABN 49 089 206 986
ANNUAL REPORT – 30 JUNE 2023
Annual Report
Australian Pacific Coal Limited
TOC
Year Ending 30 June 2023
ABN 49 089 206 986
TABLE OF CONTENTS
Chairman and CEO’s Report
i
Information on Australian Pacific Coal
v
Review of Operations
vii
Annual Financial Report
xi
- Directors’ Report
2
- Remuneration Report
7
- Auditor’s Independence Declaration
12
- Statement of Profit or Loss and Other Comprehensive Income
14
- Statement of Financial Position
15
- Statement of Changes in Equity
16
- Statement of Cash Flows
17
- Notes to the Financial Statements
18
- Directors’ Declaration
46
- Independent Audit Report
47
Corporate Governance Statement
51
ASX Additional Information
62
Corporate Directory
64
CHAIRMAN AND CEO’S REPORT
Page i
Australian Pacific Coal Limited
Annual Report
Executive Chairman’s Report
ABN 49 089 206 986
Year Ending 30 June 2023
Dear Shareholders,
The 2022-23 financial year (FY23) saw Australian Pacific Coal (ASX: AQC) make great strides towards restarting
underground coal mining activity at the Dartbrook mine, located in the Hunter Valley, NSW.
The Board made a number of key operational, corporate and financial decisions that enhanced the Company’s
ability to progress the delivery of the project successfully, increased potential future shareholder returns, and
substantially de-risked the project.
Dartbrook is an exciting project that has a number of unique characteristics:
•
Fast to market, low-cost restart project
•
Infrastructure network in place
•
High quality coal specifications
•
Excellent location
•
High margin potential that offers material free cash flow generation
•
Fully permitted (MOD 7) with high value development approval extension potential
•
Positive market outlook for thermal and met coal products
Taken together, these characteristics generated significant corporate and investor interest in the Company and
the Dartbrook Project as we entered FY23.
Strong interest in AQC and the Dartbrook Project
During the first quarter of FY23, AQC evaluated a number of competing proposals in relation to the development
of the Dartbrook mine. These included proposals to purchase the mine, acquire the Company outright, and the
establishment of operating joint ventures. After careful consideration, and following discussions with the
Company’s major shareholder and creditor Trepang, in September 2022 the Board decided that the more prudent
option was to recapitalise the Company’s balance sheet, retain ownership of the mine, and repay all debt.
Accordingly, in September 2022 AQC launched a fully underwritten pro-rata renounceable entitlement offer to
raise $100 million. This introduced a number of new shareholders, including domestic institutions and
sophisticated investors.
The Company also engaged with Trepang, Tetra Resources and M Resources in relation to forming a Strategic
Partnership to jointly manage and operate the Dartbrook Project through the restart and production phases of the
asset’s life. The Strategic Partnership, announced in September 2022, would necessitate a joint venture operating
model with the following equity structure:
•
AQC 50%
•
M Resources 20%
•
Tetra Resources 20% and
•
Trepang 10%.
The entitlement offer was completed successfully in October 2022 and funds were used to repay the outstanding
debt of $70.5 million to Trepang, with the remainder retained for working capital requirements.
Derisking is key to mine restart
With a stronger, debt-free balance sheet and a pathway to restarting operations, AQC focused on de-risking the
project, which was critical to the restart schedule and the project’s ability to attract third party debt funding of
approximately $100 - $120 million for restart capex and working capital. The project is in a fortunate position in
that surface infrastructure, with a current replacement value in excess of $350 million, is in place and in good
condition.
The primary task for the operations team was the dewatering of the Hunter Tunnel, which passes under the New
England Highway linking the underground mining operations with the Coal Handling and Processing Plant (CHPP)
at the surface. The 4 km tunnel was originally estimated to contain approximately 57 megalitres of water but
ultimately more than 70 megalitres of water was removed safely without incident.
CHAIRMAN AND CEO’S REPORT
Annual Report
Australian Pacific Coal Limited
Page ii
Year Ending 30 June 2023
ABN 49 089 206 986
Executive Chairman’s Report
Other remediation and refurbishment work continued according to schedule, including the re-establishment of the
ventilation circuit and ongoing work to re-support the roof and ribs of the Hunter Tunnel. The redesign of the tunnel
conveyor system was completed, and preparations made to install the new conveyor structure in the inter-seam
drift. The CHPP is in good condition with minor refurbishment work required prior to the restart of mining
operations.
These activities have, to date, been fully funded by AQC via a loan to the Dartbrook Joint Venture. At 30 June
2023, AQC had provided loans totalling approximately $15 million to the Dartbrook Joint Venture and this was
essential to keeping the project on track while third party debt funding was being negotiated. Total loans had
continued to increase to fund restart operations up to the date of this report.
The Mine Operator, Tetra Resources, continued to optimise the Mine Plan in the second half of FY23 to improve
yields and coal quality product and to provide additional flexibility with regard to timing of equipment procurement
and staffing. The JV will conduct mining operations using Bord and Pillar methods, initially focusing on the Kayuga
seam. Production is planned to ramp up gradually towards steady state rates of 2 - 3 Mtpa ROM with expected
yields of 75% - 80%+, generating peak sales volumes in 2027 of 2.3 Mtpa. In addition, a leading mine consultant
was engaged to assist with reviewing all historical borehole data logs specifically to review interburden ash levels
and continue to work on the ply-by-ply analysis.
At the end of FY23, approximately 60 people had been engaged to complete the re-support and dewatering
activities and additional tasks including re-establishing the bath-house, workshops and offices. The workforce will
increase in line with the ramp up of the production profile to approximately 200 people when the mine is fully
operational.
The Health and Safety of all personnel is a core value and the development of the site Safety and Health
Management System (SHMS) was completed during FY23 and will be revised as the project progresses towards
first coal. Emergency plans were prepared, updated and implemented along with underground communication
systems and first response procedures. There were no recordable injuries or incidents during FY23.
Environmental monitoring was continually updated in line with the recommissioning program. A total of six
Environmental Management Plans were approved by the Department of Planning and Environment (DPE) as the
mine transitioned from care and maintenance activities to construction and mining. There were no reportable
environmental incidents in FY23.
In addition, the Rehabilitation Management Plan and the Forward Work Plan, which provides for the
recommencement of mining activities, were approved during FY23. Community consultation continued throughout
FY23 with the Dartbrook Community Consultation Committee.
Board and Management renewal
Towards the end of calendar year 2022, AQC commenced a process of Board and Management renewal. In
November 2022 Mr Mike Ryan and Ms Ayten Saridas were appointed Non-Executive Directors, and Mr Craig
McPherson resigned as a Non-Executive Director and remaining as Company Secretary. Mr Jeff Beatty (Tetra
Resources) and Mr Nick Johansen were appointed Shareholder Nominee Directors by Trepang.
The CEO and Executive Chairman, Mr David Conry, resigned in January 2023 and Ms Ayten Saridas was
appointed Interim CEO and Director. Mr Mike Ryan assumed the role of Interim Chairman. Mr Tony Lalor resigned
as a Director of the Company effective in March 2023.
Improved outcome for shareholders
In May 2023, after a period of sustained negotiations, AQC announced that it had agreed new terms and executed
a restructured Joint Venture Agreement (JVA) for the operation of the Dartbrook mine. The Strategic Partnership
announced in September 2022 was restructured and simplified which increased AQC’s direct working interest in
the project from 50% to 80% and its net economic interest increased from 50% to 70%.
The key terms of the revised JVA are:
•
AQC retained the majority direct working interest which increased from 50% to 80%.
CHAIRMAN AND CEO’S REPORT
Page iii
Australian Pacific Coal Limited
Annual Report
Executive Chairman’s Report
ABN 49 089 206 986
Year Ending 30 June 2023
•
Tetra remained a direct JV participant with a 20% working interest and remained the mine Manager and
Operator.
•
Subject to shareholder and ASX approval, Trepang will no longer have a direct working interest in the JV.
Instead, Trepang will provide land and water access to Dartbrook through a long-term lease equivalent
to a 10% economic interest, with a minimum payment of $5 million per annum, which will be an operating
cost of the JV.
•
M Resources will receive a 10% indirect economic interest in the JV through AQC (therefore reducing
AQC’s effective economic interest from 80% to 70%).
•
M Resources will no longer be the coal marketing agent but will be retained to provide ongoing Technical
Services advice on marketing and operations to AQC.
The revised JVA represents a significant positive outcome for all AQC shareholders and its simplified structure
will make administration and operation of the asset a less complex undertaking.
Third party funding makes good progress
AQC estimates the total restart cost for the Dartbrook mine at $120 million, of which the Company has already
funded approximately $25 million (to the date of this report) on a reimbursable basis. A further $75 million is
needed to achieve first coal with an additional $20 million to $25 million required for working capital purposes.
The funds provided by AQC to the Dartbrook JV have enabled the project to be substantially de-risked through
continued funding of early works, particularly the dewatering of the Hunter Tunnel, and a revised Mine Plan. This
allowed restart operations to continue and minimised slippages to the schedule.
Due to its material near-term production growth and free cash flow potential, the Dartbrook project has attracted
significant international interest from a range of potential lenders. AQC has led the process and substantially
widened the outreach for potential debt providers and attracted multiple parties to ensure funding is secured on
competitive terms. Continued de-risking of the project has been a key factor to achieving acceptable terms in a
challenging economic environment where funding for thermal coal projects continues to be restricted. AQC is
working closely with its advisors to progress these financing solutions.
To ensure continuation of the remediation work at Dartbrook, in July 2023 AQC agreed binding terms with its
major shareholder, Trepang, for a loan of $3 million for additional working capital while negotiations with potential
lenders for the balance of the restart capex funding are finalised. Details of the loan arrangements can be found
on page 3 of this Annual Report. As Trepang is a related party, the transaction is subject to shareholder approval
which will be proposed at the Company’s next AGM in November 2023.
AQC has been in advanced negotiations with several parties for the provision of debt funding for restart capex
and working capital. Several parties are in the advanced stages of the process and have commenced or
completed due diligence and inspected the Dartbrook mine. Subsequently, in mid-August 2023, the Company
received a non-binding Letter of Intent for up to US$50 million (approximately A$75 million) from a leading global
commodities trader.
At the end of August 2023, AQC launched an equity raising for up to $12 million via a Placement and Accelerated
Non-Renounceable Entitlement Offer (ANREO). The Placement and Institutional Component of the ANREO were
completed successfully with subscriptions for approximately $10 million committed in aggregate. The Retail
Component of the ANREO, which closes on 2 October 2023, could potentially raise up to an additional $2 million.
Proceeds from the Placement and ANREO will be used to provide additional working capital and fund ongoing
works at the Dartbrook mine while the Company finalises financing negotiations for the Dartbrook restart. Details
of the capital raising can be found on page 3 of this Annual Report.
Well positioned for growth in 2024
AQC and Dartbrook have made significant progress in FY23. In just under eight months, the Company has fully
de-watered the Hunter Tunnel, restructured the JVA, improved estimated yields and product quality via a new
Mine Plan, and reclaimed a higher working interest in the Dartbrook Project for AQC shareholders.
At the time of publication, thermal coal prices have rallied and this is an opportune time to bring a new source of
high quality NEWC specification coal into the export market.
CHAIRMAN AND CEO’S REPORT
Annual Report
Australian Pacific Coal Limited
Page iv
Year Ending 30 June 2023
ABN 49 089 206 986
Executive Chairman’s Report
We are on track to commence mining operations in Q4 2023 and anticipate first coal sales/shipments in Q1 2024.
AQC and our JV partner, Tetra Resources, remain focused on the successful restart of the Dartbrook Mine. Once
production is underway, we will begin preparations for MOD 8 approvals which, if granted, will extend the mining
permit for a further six years out to 2033 to align with the expiry of the coal lease and mining lease.
We would like to take this opportunity to thank AQC’s current and previous Directors for their commitment and
stewardship during a very challenging period over the past year, which has seen the Company deal with a range
of complex issues while keeping the project moving forward and achieving all major milestones.
Most importantly, we would like to acknowledge the significant support of our shareholders who share with us a
vision of making this low cost, fast to market restart project a reality.
Mr Mike Ryan
Ms Ayten Saridas
Director and Interim Chairman
Director and Interim Chief Executive Officer
28 September 2023
INFORMATION ON AUSTRALIAN PACIFIC COAL
Page v
Australian Pacific Coal Limited
Annual Report
Information on Australian Pacific Coal
ABN 49 089 206 986
Year Ending 30 June 2023
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 1,300
shareholders.
BOARD OF DIRECTORS
Mr Mike Ryan
Interim Chairman and Non-executive Director 1
Mr Ryan is a highly accomplished executive and director with background in domestic and international capital
markets. He has managerial and operational experience across a range of industries primarily focused on
turnaround and growth. Mike’s accomplished career has included roles as an Executive Director of Goldman
Sachs JBWere, Morgan Stanley and Citibank. He was also previously Managing Director of CIMB and Head of
Equities at Shaw and Partners.
1 Mr Ryan was appointed as a director on 25 November 2022.
Ms Ayten Saridas
Interim Chief Executive Officer and Director 2
Ms Saridas is a finance executive with over 30 years of international experience across a broad range of industries
including oil and gas, mining, retail, infrastructure, property, and financial services. Ms Saridas has an established
reputation in the financial markets and has held CFO and executive roles with Coronado Global Resources,
Santos Limited, AWE Limited and Woolworths amongst other ASX listed companies.
2 Ms Saridas was appointed as a director on 25 November 2022.
Mr Nick Johansen
Non-executive Director 3
Mr Johansen is a solicitor with extensive mining experience, ranging from junior exploration to production, across
a range of commodities. Nick has expertise in transactions, resources regulation, native title and environmental
law. Nick completed his Graduate Diploma of Legal Practice at Australian National University. In addition, he holds
a BA in economics from the University of Adelaide.
3 Mr Johansen was appointed as a director on 9 January 2023.
Mr Jeff Beatty
Non-executive Director 4
Mr Beatty is a mining professional with extensive experience in both coal and metalliferous, open cut and
underground mining operations, including mine development and exploration and civil construction activities in
Australia and in international environments. Jeff holds qualifications in mine management, occupational health
and safety and business management and has previously held executive management roles at Carabella
Resources, Vale Global Coal and AMCI Australia.
4 Mr Beatty was appointed as a director on 9 January 2023.
INFORMATION ON AUSTRALIAN PACIFIC COAL
Annual Report
Australian Pacific Coal Limited
Page vi
Year Ending 30 June 2023
ABN 49 089 206 986
Information on Australian Pacific Coal
KEY COMPANY DATA (as at 11 September 2023)
Listing:
Australian Securities Exchange (ASX:AQC)
Shares on Issue:
437,841,326 AQC ORD
(1,306 shareholders)
Options:
Nil
Performance Rights
Nil
Quarterly Share Price Activity1:
High
Low
Close
30 June 2023
$0.13
$0.125
$0.13
31 March 2023
$0.13
$0.115
$0.13
31 December 2022
$0.22
$0.21
$0.215
30 September 2022
$0.41
$0.36
$0.40
1 Represent share price activity on the last trading day of the relevant quarter.
REVIEW OF OPERATIONS
Page vii
Australian Pacific Coal Limited
Annual Report
Review of Operations
ABN 49 089 206 986
Year Ending 30 June 2023
DARTBROOK COAL MINE
Dartbrook Mine is located approximately 10 kilometres (km) north-west of Muswellbrook and 4.5 km south-west
of the village of Aberdeen in New South Wales (NSW) (see Figure 1). Dartbrook operated as an underground
longwall coal mine from 1993 until December 2006, when it was placed in care and maintenance by the previous
owner, Anglo Coal (Dartbrook Management) Pty Ltd (ACDM). The mine was acquired by Australian Pacific Coal
(AQC) (ASX-AQC) in 2016 and the mine has remained in care and maintenance.
Dartbrook Mine is an unincorporated Joint Venture (Dartbrook Joint Venture) between Australian Pacific Coal and
Tetra Resources Pty Ltd Tetra Dartbrook (Tetra). Dartbrook Operations Pty Ltd will be the appointed operating
management company, and the Mine Operator under Section 5 of the Work Health and Safety (Mines and
Petroleum Sites) Regulation 2022 (NSW).
Dartbrook is managed in accordance with Development Consent DA 231-7-2000 (Development Consent) granted
on 28 August 2001 under the Environmental Planning and Assessment Act 1979 (EP&A Act). DA 231-7-2000
originally allowed for underground longwall mining and associated surface activities to be carried out until 5
December 2022.
In February 2018, AQC lodged an application to modify DA 231-07-2000 (MOD7) to provide further operational
options for Dartbrook (in addition to those already approved) including the recommencement of mining via bord
and pillar methodology within the Kayuga Seam and to extend the approval period under DA 231-07-2000 by 5
years (i.e. to 5 December 2027). DA 231-07-2000 (MOD7) was determined by the NSW Independent Planning
Commission (IPCN) on 9 August 2019.
The IPCN approved the proposed recommencement of mining activities but not the proposed five-year extension
to the consent approval period. Without the extension to operate under DA 231-07-2000 for a further five years
it was impractical to recommence mining at Dartbrook. In November 2019, an appeal was lodged against the
IPCN determination of MOD7 in the NSW Land and Environment Court.
The MOD7 application was the subject of a conciliation conference conducted pursuant to Section 34 of the Land
and Environment Court Act 1979 (LEC Act). AQC entered into a Section 34 agreement with the Minister for
Planning and Public Spaces on 21 December 2021 with the approval granted on 11 March 2022. This agreement
gave effect to MOD7 and extended the approved duration of mining operations until 5 December 2027.
Operations at Dartbrook are proposed to commence from 4th quarter 2023. Recommencement will involve a re-
establishment period of up to 6 months followed by a ramp up of production to produce an initial target of
approximately 3 million tonnes per annum (Mtpa) of Run of Mine (ROM) coal.
During this reporting period, key milestone achieved are:
•
Dewatering of the Hunter Tunnel completed with approximately 70 megalitres of water removed.
•
Ventilation circuit and monitoring systems re-established, restored underground communication
network and emergency services and equipment.
•
Removal of all old conveyor infrastructure and ancillary equipment from the underground to the
surface for scrap reconciliation and preparation of road networks.
•
Re-supporing of roof and ribs, bolting and mesh construction and shot-creteing including construction
of drainage, pumping and water management.
•
Redesign of the tunnel conveyor system complete and preparations underway to install new conveyor
structure in the inter-seam drift.
•
Refurbishment of the Coal Handling & Processing Plant (CHPP) and above ground infrastructure
continued.
REVIEW OF OPERATIONS
Annual Report
Australian Pacific Coal Limited
Page viii
Year Ending 30 June 2023
ABN 49 089 206 986
Review of Operations
•
Approximately 60 people have been engaged to complete the re-support and dewatering activities
and additional tasks including re-establishing the bath-house, workshops and offices.
•
Identified all equipment necessary for the commencement of mining activities including the
recruitment of staff and coal mine workers.
•
All environmental approvals in place to transit from Care & Maintenance to Mine Operations.
•
Continued to optimise the Mine Plan to improve yields, coal quality and product including mine
schedules and designs.
•
Dartbrook Community Consulative Committee met quarterly and continued to provide active and
positive communcations to neighbours and stakeholders effectively.
•
The development and implementation of the site Safety and Health Management System with the
Broad Brush Risk Register developed identifing catastrophic safety events, detailed risk assessments
conducted with management plans and critical control register developed and documented.
•
Developed detailed Project Re-Start Schedule which is continually revised and active.
•
Zero environmental reportable incidences and zero Lost Time and Disabling injuries reported..
Figure 1 Regional Locality
REVIEW OF OPERATIONS
Page ix
Australian Pacific Coal Limited
Annual Report
Review of Operations
ABN 49 089 206 986
Year Ending 30 June 2023
On the 28 October 2022, (2022 No649), the NSW Government under the Environment Planning and Assessment
Act 1979, implemented a State Environmental Planning Policy (SEPP) Resources and Energy Amendment
(Dartbrook Mine) 2022 to prohibit open cut mining on the land, being defined as the Authority 256 boundary. Refer
to Figure 1 Highlighted Dartbrook area.
In addition, all the Dartbrook mining tenure was renewed from pending status to all current and approved with the
mining leases extended to 2043 (ML 1456 & 1497) and 2033 (ML 1381), refer to (Table 1 - Tenure Summary
Table). This is a considerable milestone as the project has now achieved tenure security and with this success
will be highly valued and considered when the application for a further extension of the current Development
Consent conditions (MOD 8) for an additional 6 years is prepared and processed. This will be a priority once
production is underway and the approval will be assessed by the Department of Planning & Environment.
The Dartbrook mine is in a safe and operational readiness state with a professional workforce ready to transit into
production.
REVIEW OF OPERATIONS
Annual Report
Australian Pacific Coal Limited
Page x
Year Ending 30 June 2023
ABN 49 089 206 986
Review of Operations
OTHER PROJECTS
In Queensland, the Company holds interests in the 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
Expiry Date
Interest Held
Dartbrook Project, Hunter Valley NSW
AUTH 256
AUTH 256
Granted
16/12/2025
100%
EL 4574
EL 4574
Granted
13/08/2024
100%
EL 4575
EL 4575
Granted
13/08/2027
100%
EL 5525
EL 5525
Granted
22/09/2027
100%
CL 386
CL 386
Granted
19/12/2033
100%
ML 1381
ML 1381
Granted
19/12/2033
100%
ML 1456
ML 1456
Granted
27/09/2043
100%
ML 1497
ML 1497
Granted
5/12/2043
100%
Matuan Downs Bentonite Project, Alpha
Mantuan
ML 70360
Granted
31 /03/2033
100%
Table 1 Tenure Summary Table
Name
Number
Status
Interest Held
Blackwood Joint Venture, Miles QLD
Bungaban Creek
EPC 1955
Granted
10% #
Quondong
EPC 1987
Granted
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 xi
Australian Pacific Coal Limited
ABN 49 089 206 986
Annual Financial Report - 30 June 2023
Australian Pacific Coal Limited
Directors' report
30 June 2023
2
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 2023.
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:
Current Directors
Mr Mike Ryan (Appointed 25 November 2022)
Ms Ayten Saridas (Appointed 25 November 2022)
Mr Nicholas Johansen (Appointed 9 January 2023)
Mr Jeff Beatty (Appointed 9 January 2023)
Former Directors
Mr Tony Lalor (Resigned 3 March 2023)
Mr David Conry AM (Resigned 16 January 2023)
Mr Craig McPherson (Resigned 25 November 2022)
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 New South Wales, Australia.
Dividends
No dividends were declared or paid for the financial year ended 30 June 2023.
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 $12,517,633 (30
June 2022: loss of $11,496,349).
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.
Likely developments and expected results of operations
The consolidated entity intends to continue its 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.
Australian Pacific Coal Limited
Directors' report
30 June 2023
3
Matters subsequent to the end of the financial year
The following matters or events have occurred subsequent to the end of the reporting period:
•
On 14 July 2023, the Company announced that it had received a loan for $3 million from its major shareholder,
Trepang Services, to provide for additional working capital while negotiations with potential lenders for the balance
of the restart capex funding are finalised. The Company is also advancing discussions for the potential sale of an
AQC-owned parcel of land to Trepang. The loan plus interest will be repaid within 12 months or when third party
funding is secured.
•
On 17 August 2023, the Company announced that it had received a non-binding letter of intent from Trafigura Pte
Ltd for up to US$50 million (approximately $75 million) in debt funding to enable the restart of Dartbrook underground
coal mine.
•
On 31 August 2023, the Company announced a capital raising of up to $12 million via a $4 million Institutional
Placement (the “Placement”) and a 1 for 4.75 Accelerated Non-Renounceable Entitlement Offer (“ANREO”) at an
offer price of $0.11 per new share issued (“New Shares”). Settlement of the New Shares to be issued as part of the
Institutional Component and the Placement occurred on 6 September 2023. The Retail Component opened on 6
September 2023 and is expected to close at 5.00pm (Sydney time) on 2 October 2023.
No other matter or circumstance has arisen since 30 June 2023 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.
Information on directors
Name:
Mr Mike Ryan
Title:
Non-Executive Director and Acting Chairman from 16 January 2023
Qualifications
Bachelor of Agriculture (Rural Valuation / Production and Management)
Experience and expertise:
Mr Ryan is a highly accomplished executive and director with background in
domestic and international capital markets. He has board, managerial and
operational experience across a range of industries primarily focused on turnaround
and growth. Mike’s accomplished career has included roles as an Executive Director
of Goldman Sachs JBWere, Morgan Stanley and Citibank. He was also previously
Managing Director of CIMB and Head of Equities at Shaw and Partners.
Director of Australian Pacific Coal Limited since 25 November 2022.
Other current directorships
East 33 Limited
Former directorships (last 3 years):
None
Interests in shares:
None
Interests in options:
None
Interests in performance rights:
None
Australian Pacific Coal Limited
Directors' report
30 June 2023
4
Name:
Ms Ayten Saridas
Title:
Director and Acting Chief Executive Officer from 16 January 2023
Qualifications:
Masters of Applied Finance, Bachelor of Commerce, Fellow CPA
Experience and expertise:
Ms Saridas is a finance executive with over 30 years of international experience
across a broad range of industries including oil and gas, mining, retail, infrastructure,
property, and financial services. Ms Saridas has an established reputation in the
financial markets and has held CFO and executive roles with Coronado Global
Resources, Santos Limited, AWE Limited and Woolworths amongst other ASX listed
companies.
Director of Australian Pacific Coal Limited since 25 November 2022.
Other current directorships:
Parkway Corporation Limited
Former directorships (last 3 years):
None
Interests in shares:
None
Interests in options:
None
Interests in performance rights:
None
Name:
Mr Nick Johansen
Title:
Non-Executive Director
Qualifications:
Bachelor or Economics; Bachelor of Law
Experience and expertise:
Mr Johansen is a solicitor with extensive mining experience, ranging from junior
exploration to production, across a range of commodities. Nick has expertise in
transactions, resources regulation, native title and environmental law. Nick
completed his Graduate Diploma of Legal Practice at Australian National University.
In addition, he holds a BA in economics from the University of Adelaide.
Director of Australian Pacific Coal Limited since 9 January 2023.
Other current directorships:
Paterson Resources Limited (non-executive); Orcoda Limited (non-executive)
Former directorships (last 3 years):
None
Interests in shares:
None
Interests in options:
None
Interests in performance rights:
None
Name:
Mr Jeff Beatty
Title:
Non-Executive Director
Qualifications:
None
Experience and expertise:
Mr Beatty is a mining professional with extensive experience in both coal and
metalliferous, open cut and underground mining operations, including mine
development and exploration and civil construction activities in Australia and in
international environments. Jeff holds qualifications in mine management,
occupational health and safety and business management and has previously held
executive management roles at Carabella Resources, Vale Global Coal and AMCI
Australia.
Director of Australian Pacific Coal Limited since 9 January 2023.
Other current directorships:
None
Former directorships (last 3 years):
None
Interests in shares:
None
Interests in options:
None
Interests in performance rights:
None
Name
Mr David Conry
Mr Conry was appointed as a Director of Australian Pacific Coal Limited on 2 April
2020. Mr Conry resigned from the Company effective 16 January 2023.
Mr Tony Lalor
Mr Lalor was appointed as a Director of Australian Pacific Coal Limited on 2
November 2020. Mr Lalor resigned from the Company effective 3 March 2023.
Australian Pacific Coal Limited
Directors' report
30 June 2023
5
Mr Craig McPherson
Mr McPherson was appointed as a Director of Australian Pacific Coal Limited on 6
December 2021. Mr McPherson resigned as a Director effective 25 November 2022.
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Company secretary
Mr Craig McPherson was appointed Company Secretary on 23 August 2019.
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 2023, and the number of meetings attended by each director were:
Full board
Attended
Held
Mr Mike Ryan
33
33
Ms Ayten Saridas
33
33
Mr Nick Johansen
30
30
Mr Jeff Beatty
30
30
Mr David Conry
10
10
Ms Tony Lalor
13
13
Mr Craig McPherson
5
5
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.
Australian Pacific Coal Limited
Directors' report
30 June 2023
6
The Board has structured an executive remuneration framework that is market competitive and complementary to the reward
strategy of the consolidated entity.
The reward framework is designed to align executive reward to shareholders' interests. The Board has considered that it
should seek to enhance shareholders' interests by:
● having economic profit as a core component of plan design
● focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key financial and non-financial drivers of
value
● attracting and retaining high calibre executives
Additionally, the reward framework seeks to enhance executives' interests by:
● rewarding capability and experience
● reflecting competitive reward for contribution to growth in shareholder wealth
● providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive director’s remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. 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.
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.
Australian Pacific Coal Limited
Directors' report
30 June 2023
7
During the prior year the Board implemented an incentive program for executive directors, non-executive directors and
employees and consultants.
Voting and comments made at the company's 2022 Annual General Meeting ('AGM')
At the 2022 AGM, shareholders voted to not support the adoption of the remuneration report for the year ended 30 June
2022. 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:
●
Mike Ryan - Non-Executive Director (appointed 25 November 2023) and Acting Chairman from 16 January 2023
●
Ayten Saridas - Director (appointed 25 November 2023) and Acting Chief Executive Officer from 16 January 2023
●
Nicholas Johansen – Non-executive Director (appointed 9 January 2023).
●
Jeff Beatty – Non-executive Director (appointed 9 January 2023)
●
David Conry – Chairman and Chief Executive Officer (resigned 16 January 2023)
●
Tony Lalor – Non-executive Director (resigned 3 March 2023)
●
Craig McPherson – Non-executive Director (resigned 25 November 2022)
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
Cash
Termination
Super-
Long service Equity-settled Equity-settled
and fees
bonus
annuation
leave
shares
options
Total
2023
$
$
$
$
$
$
$
$
Non-Executive
Directors:
Mike Ryan
28,235
-
-
2,965
-
-
- 31,200
Nicholas Johansen
24,043
-
-
-
-
- 24,043
Jeff Beatty
21,758
-
-
2,285
-
-
- 24,043
Tony Lalor
35,083 150,000
-
-
-
-
- 185,083
Craig McPherson
21,667
-
-
-
-
-
- 21,667
Executive Directors:
Ayten Saridas
212,056
-
-
-
-
-
- 212,056
David Conry
300,639 150,000
-
-
-
-
- 450,639
-
643,481 300,000
-
5,250
-
-
-
948,731
1.
Craig McPherson resigned 25 November 2022
2.
Mike Ryan appointed 25 November 2022
3.
Ayten Saridas appointed 25 November 2022
4.
Nicholas Johansen appointed 9 January 2023
5.
Jeff Beatty appointed 9 January 2023
6.
David Conry AM resigned 16 January 2023
7.
Tony Lalor resigned 3 March 2023
Australian Pacific Coal Limited
Directors' report
30 June 2023
8
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-based payments
Cash salary
Cash
Termination
Super-
Long service Equity-settled Equity-settled
and fees
bonus
annuation
leave
shares
options
Total
2022
$
$
$
$
$
$
$
$
Non-Executive
Directors:
Tony Lalor
51,996
-
-
-
-
124,125
-
176,121
Mark Jagla
18,939
-
-
1,894
-
-
-
20,833
Craig McPherson
30,333
-
-
-
-
-
-
30,333
Executive Directors:
David Conry
379,985
200,000
-
-
-
165,500
-
745,485
481,253
200,000
-
1,894
-
289,625
-
972,772
1.
Mark Jagla resigned 6 December 2021
2.
Craig McPherson was appointed 6 December 2021
3.
Mark Jagla was appointed 23 September 2020
4.
Tony Lalor was appointed 2 November 2020
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk - STI
At risk - LTI
Name
2023
2022
2023
2022
2023
2022
Non-Executive Directors:
Mike Ryan
100%
-
-
-
-
-
Nicholas Johansen
100%
-
-
-
-
-
Jeff Beatty
100%
-
-
-
-
-
Tony Lalor
100%
30%
-
-
-
70%
Craig McPherson
100%
100%
-
-
-
-
Mark Jagla
-
100%
-
-
-
-
Executive Directors:
Ayten Saridas
100%
-
-
-
-
-
David Conry
100%
51%
-
27%
-
22%
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
Ayten Saridas
Title
Acting Chief Executive Officer
Term of agreement
Ongoing appointment, subject to termination rights noted below.
Details
Base salary of $400,000 per annum plus director fee of $52,000 per year. Ms Saridas
or her nominee is eligible to receive any forms of equity type compensation as
reasonably determined by the Board from time to time. 1 months’ notice of intention to
resign and the Company may terminate the agreement by giving 1 months’ notice.
Name
David Conry (1 July 2022 until resignation on 16 January 2023)
Title
Chairman and Chief Executive Officer
Term of agreement
Ongoing appointment, subject to termination rights noted below.
Details
Base salary of $350,000 plus a motor vehicle allowance of $30,000 per year. Mr Conry
or his nominee was eligible to receive any forms of equity type compensation as
reasonably determined by the Board from time to time. 3 months’ notice of intention to
resign and the Company may terminate the agreement by giving 3 months’ notice.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Australian Pacific Coal Limited
Directors' report
30 June 2023
9
Options
There were no options over ordinary shared issued as remuneration to directors or other key management personnel in the
year ended 30 June 2023.
Performance Rights
The terms and conditions of each grant of performance right over ordinary shares affecting remuneration of directors and
other key management personnel in the previous financial year are as follows:
Number of
performance
rights granted
Grant date
Expiry date
Exercise price
Fair Value per
performance
rights at grant
date
David Conry
500,000
27.08.2021
27.08.2024
$Nil
$0.164
David Conry
500,000
27.08.2021
27.08.2026
$Nil
$0.167
Tony Lalor
375,000
27.08.2021
27.08.2024
$Nil
$0.164
Tony Lalor
375,000
27.08.2021
27.08.2026
$Nil
$0.167
Values of performance rights over ordinary shares granted exercised and lapsed for directors and other key management
personnel as part of compensation during the year ended 30 June 2023 are set out below:
Value of performance
rights granted during the
year
Value of performance
rights vested during the
year
Value of performance
rights lapsed during the
year
David Conry
-
$165,500
-
Tony Lalor
-
$124,125
-
No performance rights have been granted to Key Management Personnel since the end of the financial year.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
Received
Balance at
the start of
as part of
Disposals/
the end of
the year
remuneration
Additions
Other
the year
Ordinary shares
Mike Ryan
-
-
-
-
-
Ayten Saridas
-
-
-
-
-
Nicholas Johansen
-
-
-
-
-
Jeff Beatty
-
-
-
-
Tony Lalor 1
-
750,000
-
-
750,000
David Conry 1
-
1,000,000
-
-
1,000,000
Craig McPherson 1
-
750,000
-
-
750,000
1.
Represents shareholding at date of resignation as director
Australian Pacific Coal Limited
Directors' report
30 June 2023
10
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.
Performance Rights Held by Key Management Personnel
Details of Performance Rights held directly, indirectly or beneficially by key management personnel during the year ended 30
June 2023 were as follows:
Balance at 1
July 2022
Granted as
Compensation
Vested
Lapsed
Balance at
30 June
2023
Total Vested 30
June 2023
Mike Ryan
-
-
-
-
-
-
Ayten Saridas
-
-
-
-
-
-
Nicholas Johansen
-
-
-
-
-
-
Jeff Beatty
-
-
-
-
-
-
David Conry
1,000,000
-
1,000,000
-
-
-
Tony Lalor
750,000
-
750,000
-
-
-
Craig McPherson
750,000
-
750,000
-
-
-
Other transactions with key management personnel and their related parties
From 1 July 2022 until resignation as a Director, the Group paid MH Private Pty Ltd, an entity associated with Mr McPherson,
$217,500 for financial, corporate secretarial and bookkeeping services.
From 1 July 2022 until resignation as a Director the Group paid Mills Oakley, a law firm of which Mr Lalor is a Partner, $686,695
for legal services.
From appointment as a Director until 30 June 2023, the Group paid Whiterock Resources Pty Ltd, an entity associated with
Mr Beatty, $237,299 for services connected with the Dartbrook Joint Venture. At reporting date there was an amount of
$26,414 was outstanding and payable to Whiterock Resources Pty Ltd.
There were no other transactions with key management personnel and their related parties during the financial year other than
those transactions disclosed within this annual financial report.
This concludes the remuneration report, which has been audited.
Shares under option, performance rights or convertible note
There are no unissued ordinary shares of Australian Pacific Coal Limited under option or convertible note at the date of this
report.
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 21 to the financial statements.
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.
Australian Pacific Coal Limited
Directors' report
30 June 2023
11
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 21 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 2023:
$
Taxation services
15,437
15,437
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
___________________________
Mike Ryan
Chairman
28 September 2023
Brisbane
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
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 2023, 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
STEWART THOMPSON
Partner
Date: 28 September 2023
12
Australian Pacific Coal Limited
Directors' report
30 June 2023
13
Statement of profit or loss and other comprehensive income
14
Statement of financial position
15
Statement of changes in equity
16
Statement of cash flows
17
Notes to the financial statements
18
Directors' declaration
46
Independent auditor's report to the members of Australian Pacific Coal Limited
47
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 1, 371 Queen Street
Stair Street
Brisbane QLD 4000
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 28 September 2023. The
directors have the power to amend and reissue the financial statements.
Australian Pacific Coal Limited
Statement of profit or loss and other comprehensive income
As at 30 June 2023
Consolidated
Note
2023
2022
$
$
The above statement of financial position should be read in conjunction with the accompanying notes
14
Revenue
4
319,715
55,288
Expenses
Employee benefits expense
(1,644,548)
(1,386,768)
Depreciation and amortisation expense
5
(1,029,053)
(1,011,851)
Exploration and evaluation expense
(2,114,251)
(43,869)
Share-based payments
-
(413,750)
Administration and consulting expenses
(2,506,207)
(1,528,046)
Finance costs
5
(5,543,289)
(7,167,353)
Loss before income tax expense from continuing operations
(12,517,633)
(11,496,349)
Income tax expense
6
-
-
Other comprehensive income
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year
(12,517,633)
(11,496,349)
Earnings per share for profit attributable to the owners of Australian
Pacific Coal Limited
Cents
Cents
Basic earnings per share
29
(5.23)
(22.70)
Diluted earnings per share
29
(5.23)
(22.70)
Australian Pacific Coal Limited
Statement of financial position
As at 30 June 2023
Consolidated
Note
2023
2022
$
$
The above statement of financial position should be read in conjunction with the accompanying notes
15
Assets
Current assets
Cash and cash equivalents
7
3,681,525
338,558
Trade and other receivables
8
340,301
417,930
Loans receivable
9
16,022,782
-
Other
10
397,333
123,062
Total current assets
20,441,941
879,550
Non-current assets
Property, plant and equipment
11
2,751,401
3,741,304
Exploration and evaluation
12
5,894,592
5,720,170
Other
14
8,998,233
8,998,733
Total non-current assets
17,644,226
18,460,207
Total assets
38,086,167
19,339,757
Liabilities
Current liabilities
Trade and other payables
15
4,497,454
10,114,56
Borrowings
16
-
57,462,280
Total current liabilities
4,497,454
67,576,84
Non-current liabilities
Provisions
17
20,041,000
19,550,000
Total non-current liabilities
20,041,000
19,550,000
Total liabilities
24,538,454
87,126,844
Net assets
13,547,713
(67,787,087)
Equity
Issued capital
18
154,753,974
60,487,791
Reserves
-
413,750
Retained profits
(141,206,261)
(128,688,628)
Total equity
13,547,713
(67,787,087)
Australian Pacific Coal Limited
Statement of changes in equity
For the year ended 30 June 2023
The above statement of changes in equity should be read in conjunction with the accompanying notes
16
Issued
capital
Reserves
Retained
profits
Total equity
Consolidated
$
$
$
Balance at 1 July 2021
60,487,791
-
(117,192,279)
(56,704,488)
Loss after income tax expense for the half-year
-
-
(11,496,349)
(11,496,349)
Other comprehensive income for the half-year, net of
tax
-
-
-
-
Total comprehensive income for the half-year
-
-
(11,496,349)
(11,496,349)
Transactions with owners in their capacity as owners:
Share based payments
-
413,750
-
413,750
Contributions of equity, net of transaction costs
-
-
-
-
Contributions of equity, transfers from reserves
-
-
-
-
Balance at 30 June 2022
60,487,791
413,750
(128,688,628)
(67,787,087)
Issued
capital
Reserves
Retained
profits
Total equity
Consolidated
$
$
$
$
Balance at 1 July 2022
60,487,791
413,750
(128,688,628)
(67,787,087)
Loss after income tax expense for the year
-
-
(12,517,633)
(12,517,633)
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive income for the year
-
-
(12,517,633)
(12,517,633)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
93,852,433
-
-
93,852,433
Contributions of equity, transfers from reserves
413,750
(413,750)
-
-
Balance at 30 June 2023
154,753,974
-
(141,206,261)
13,547,713
Australian Pacific Coal Limited
Statement of cash flows
For the year ended 30 June 2023
Consolidated
Note
2023
2022
$
$
The above statement of cash flows should be read in conjunction with the accompanying notes
17
Cash flows from operating activities
Receipts from customers
-
55,224
Payments to suppliers and employees
(5,920,500)
(2,914,909)
Net interest received / (paid)
40,009
(2,859,685)
(5,055)
Net cash from operating activities
28a
(5,880,491)
(2,864,740)
Cash flows from investing activities
Payments for property, plant and equipment
(109,150)
(32,358)
Proceeds from sale of property plant & equipment
-
17,082
Refund of security bond
500
-
Payments for exploration and evaluation
(174,422)
(284,928)
Loan advances
(13,845,903)
-
Net cash used in investing activities
(14,128,975)
(300,204)
Cash flows from financing activities
Contributions of equity, net of transaction costs
28b
23,352,433
-
Proceeds from borrowings
-
3,109,677
Repayment of borrowings
-
(118,311)
Net cash used in financing activities
23,352,433
2,991,366
Net increase/(decrease) in cash and cash equivalents
3,342,967
(173,578)
Cash and cash equivalents at the beginning of the financial
year
363,558
537,136
Cash and cash equivalents at the end of the financial year
7
3,706,525
363,558
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
18
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 $12,517,633 for the year ended 30 June 2023.
On 31 August 2023, the Company announced a capital raising of up to $12 million via a $4 million Institutional Placement
(the “Placement”) and a 1 for 4.75 Accelerated Non-Renounceable Entitlement Offer (“ANREO”) at an offer price of $0.11
per new share issued (“New Shares”). Settlement of the New Shares to be issued as part of the Institutional Component
and the Placement occurred on 6 September 2023. The Retail Component opened on 6 September 2023 and is expected
to close at 5.00pm (Sydney time) on 2 October 2023.
This financial report has been prepared on a going concern basis as the Directors consider that the company and the
consolidated entity will be able to realise its assets and settle its liabilities in the normal course of business and at amounts
stated in the financial report. The continuation of the company and the consolidated entity as a going concern is dependent
on their ability to achieve the following objectives:
●
Capital 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.
●
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 25.
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 2023 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'.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
19
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity.
Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit
balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Australian Pacific Coal Limited’s functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange
rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences
are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
20
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
21
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
10-20%
Leasehold improvements
2.5%
Plant and equipment
10-33%
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
22
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.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
23
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement
of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an
equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance
cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders
equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured
in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated
future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of
any other vesting conditions.
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
24
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
●
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether that market condition has been met, provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
25
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the consolidated
entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest
in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount
is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Australian Pacific Coal Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 1. Significant accounting policies (continued)
26
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 2023.
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.
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 and forward-looking
information that is available. The allowance for expected credit losses, as disclosed in note 8, is calculated based on the
information available at the time of preparation. The actual credit losses in future years may be higher or lower.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 2. Critical accounting judgements, estimates and assumptions (continued)
27
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. Costs incurred in or
benefits of the productive process are accumulated as stockpiles, copper and other metals in process, ore on leach pads
and product inventory. Net realisable value tests are performed at least annually and represent the estimated future sales
price of the product based on prevailing metal prices, less estimated costs to complete production and bring the product to
sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number contained
metal ounces based on assay data, and the estimated recovery percentage based on the expected processing method.
Stockpile tonnages are verified by periodic surveys.
Although the quantity of recoverable metal is reconciled by comparing the grades of the ore to the quantities of metals actually
recovered (metallurgical balancing), the nature of the process inherently limits the ability to precisely monitor recoverability
levels. As a result, the metallurgical balancing process is constantly monitored and the engineering estimates are refined
based on actual results over time.
Fair value measurement hierarchy
The consolidated entity is required to classify all assets and liabilities, measured at fair value, using a three level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices
(unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;
and Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant
to fair value and therefore which category the asset or liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on unobservable
inputs.
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of
technical innovations or some other event. The depreciation and amortisation charge will increase where the useful lives are
less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will
be written off or written down.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may
lead to impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value
less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and assumptions.
It is reasonably possible that the underlying metal price assumption may change which may then impact the estimated life
of mine determinant and may then require a material adjustment to the carrying value of mining plant and equipment, mining
infrastructure and mining development assets. Furthermore, the expected future cash flows used to determine the value-in-
use of these assets are inherently uncertain and could materially change over time. They are significantly affected by a
number of factors including reserves and production estimates, together with economic factors such as metal spot prices,
discount rates, estimates of costs to produce reserves and future capital expenditure.
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 2. Critical accounting judgements, estimates and assumptions (continued)
28
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 2. Critical accounting judgements, estimates and assumptions (continued)
29
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
30
Note 3. Operating segments
Identification of reportable operating segments
The consolidated entity is currently organised into one operating segments based on resource category: 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 determining the
allocation of resources. There is no aggregation of operating segments.
The CODM reviews segment receipts and expenditure for each operating segment at each board meeting. The accounting
policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
Types of products and services
The principal products and services of each of these operating segments are as follows:
Exploration and evaluation
The exploration and evaluation segment seeks to identify and develop prospective resource
areas, secure tenure over the relevant tenements and manage the exploration and evaluation
process.
Corporate
The corporate segment supports all exploration and evaluation activities.
Financial information
Net loss from continuing
operations before tax
Total Assets
2023
2022
2023
2022
$
$
$
$
Exploration & Evaluation
4,069,736
1,486,024
34,746,329
18,916,836
Corporate
8,447,897
10,010,325
3,339,838
422,923
12,517,633
11,496,349
38,086,167
19,339,759
Note 4. Revenue
Consolidated
2023
2022
$
$
Other revenue
Interest
319,715
64
Rent
-
55,224
319,715
55,288
Total Revenue
319,715
55,288
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
31
Note 5. Expenses
Consolidated
2023
2022
$
$
Loss before income tax includes the following specific expenses:
Depreciation
1,029,053
1,011,851
Finance costs
Interest and finance charges paid/payable
5,543,289
7,167,353
Finance costs expensed
5,543,289
7,167,353
Note 6. Income tax expense
Consolidated
2023
2022
$
$
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense from continuing operations
(12,517,630) (11,496,349)
Profit before income tax expense from discontinued operations
(12,517,630) (11,496,349)
Tax at the statutory tax rate of 30%
(3,755,289)
(2,874,087)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Depreciation and amortisation
308,716
252,963
Entertainment expense
695
153
Other non-allowable items
2,066,222
9,323,904
Other allowable items
(12,641,176)
(7,575,257)
(14,020,832)
(872,324)
Tax losses and temporary differences not brought to account
14,020,832
872,324
Income tax expense
-
-
Note 7. Current assets - cash and cash equivalents
Consolidated
2023
2022
$
$
Current:
Cash at bank and on hand
3,681,525
338,558
3,681,525
338,558
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
3,681,525
338,558
Deposit as security for rental bonds and equipment leases (Note 18)
25,000
25,000
Balance as per statement of cash flows
3,706,525
363,558
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2020
32
Note 8. Current assets - trade and other receivables
Consolidated
2023
2022
$
$
Trade and other receivables
340,301
417,930
Less: Allowance for expected credit loss
-
-
340,301
417,930
Note 9. Loans receivable
Consolidated
2023
2022
$
$
Advances for Dartbrook Coal Project
16,022,782
-
16,022,782
-
During the year the consolidated entity provided early restart funding to advance development of the Dartbrook Coal Project.
The consolidated entity anticipates these funds will be repaid from upon receipt of development funding to advance the
Dartbrook Coal Project. Under the joint venture agreement interest is payable at the greater of 8% or the equivalent to the
restart funding achieved for funding the restart of the Dartbrook Project. The loan receivable includes both amounts paid and
payable by the Group at end of reporting period.
Note 10. Current assets - other
Consolidated
2023
2022
$
$
Security bond
16,400
-
Accrued Interest
279,706
-
Prepayments
101,227
123,062
397,333
123,062
Note 11. Non-current assets - property, plant and equipment
Consolidated
2023
2022
$
$
Land and buildings - at cost
850,786
850,786
Less: Accumulated depreciation
(139,134)
(133,335)
711,652
717,451
Leasehold improvements - at cost
180,216
180,217
Less: Accumulated depreciation
(171,826)
(171,594)
8,391
8,623
Plant and equipment - at cost
8,302,290
8,263,141
Less: Accumulated depreciation
(6,270,932)
(5,247,911)
2,031,358
3,015,230
2,751,401
3,741,304
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
33
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Land and
Leasehold
Plant and
buildings
improvements
equipment
Total
Consolidated
$
$
$
$
Balance at 1 July 2021
723,320
8,855
4,005,706
4,737,881
Additions
-
-
32,356
32,356
Disposals
-
-
(17,082)
(17,082)
Impairment
-
-
-
-
Available for Sale
-
-
-
-
Depreciation expense
(5,869)
(232)
(1,005,750)
(1,011,851)
Balance at 30 June 2022
717,451
8,623
3,015,230
3,741,304
Additions
-
-
109,150
109,150
Disposals
-
-
-
-
Impairment
-
-
(70,000)
(70,000)
Available for Sale
-
-
-
-
Depreciation expense
(5,799)
(232)
(1,023,022)
(1,029,053)
Balance at 30 June 2023
711,652
8,391
2,031,358
2,751,401
Refer to Note 21 for further information on fair value measurement.
Note 12. Non-current assets - exploration and evaluation
Consolidated
2023
2022
$
$
Exploration and evaluation - at cost
5,894,592
5,720,170
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Exploration
and
evaluation
Total
Consolidated
$
$
Balance at 1 July 2021
5,435,244
5,435,244
Additions
284,927
284,927
Balance at 30 June 2022
5,720,170
5,720,170
Additions
174,422
174,422
Balance at 30 June 2023
5,894,592
5,894,592
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 12. Non-current assets - exploration and evaluation (continued)
34
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.
Note 13. Non-current assets - deferred tax
Consolidated
2023
2022
$
$
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss
403,246
8,853,077
Tax losses – operating losses
32,529,214
15,694,902
Tax losses – capital losses
571,618
-
Dartbrook Mine Acquisition
7,765,641
62,225,341
Tax assets not brought to account
(41,269,719) (30,773,320)
Deferred tax asset
-
-
Note 14. Non-current assets - other
Consolidated
2023
2022
$
$
Cash on deposit for rental bonds and bank facilities
25,000
25,000
Security deposits
8,973,733
8,973,733
8,998,733
8,998,733
Note 15. Current liabilities - trade and other payables
Consolidated
2023
2022
$
$
Trade and other payables
4,497,454
2,781,970
Accrued interest – loans
-
7,332,594
4,497,454
10,114,564
Refer to Note 19 for further information on financial instruments.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
35
Note 16. Current liabilities - borrowings
Consolidated
2023
2022
$
$
Convertible securities
a)
-
48,152,603
Insurance premium funding
-
Unsecured Loan – Trepang Services Pty Ltd
b)
-
1,609,677
Interest bearing liabilities
c)
-
7,700,000
-
57,462,280
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 which was partially repaid in the prior period and with the remaining fully repaid
including accrued interest in the current period (Balance owing at 30 June 2022: $20,897,182).
ii.
Total accrued interest relating to convertible securities was repaid in full during the period (Balance owing at 30 June
2022: $27,255,421).
b) During the prior financial year, Trepang Services Pty Ltd contributed loan funds of $1,609,677 to the Company by way of
an unsecured loan. The balance outstanding including accrued interest was fully repaid in the current period.
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 consolidated entity repaid
the full amount outstanding including accrued interest in the current period.
Total secured liabilities
The total secured liabilities (current and non-current) are as follows:
Consolidated
2023
2022
$
$
Convertible securities
-
48,152,603
Loan – Trepang Services Pty Ltd
-
7,700,000
-
55,852,603
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
36
Note 17. Provisions
Consolidated
2023
2022
Note
$
$
Non-Current:
Rehabilitation provision
9,441,000
8,950,000
Vendor Royalty provision
24
10,600,000
10,600,000
20,041,000
19,550,000
Reconciliation of movements:
Vendor Royalty provision
Opening balance
10,600,000
10,600,000
Remeasurement
-
-
Depletion – rehabilitation activities completed or reassessed
-
-
Closing
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 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. An assessment of the security deposit required under the Mining
Act 1992 by a delegate of the Secretary of the NSW Department of Regional NSW (the Department) was completed during
the year. The reason for this assessment is to secure funding for the fulfilment of rehabilitation obligations in relation to the
Dartbrook Mine. The Assessed Deposit was determined to be $9,391,000.00 with an additional $491,000 as additional
security to be provided to the NSW government.
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 reliant on the Company achieving future development milestones which may or may not occur. 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. The liability has been assessed at $10.6 million.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
37
Note 18. Equity - issued capital
Consolidated
2023
2022
2023
2022
Shares
Shares
$
$
Ordinary shares - fully paid
347,310,953
50,484,810
154,753,974
60,487,791
Details
Date
Shares
$
Balance
1 July 2022
50,484,810
60,487,791
Conversion of performance shares
23 September 2022
2,500,000
413,750
Share issue – underwritten rights issue
10 October 2022
294,326,143
100,070,889
Share issue costs
(6,218,456)
Balance
30 June 2023
347,310,953
154,753,974
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
38
Note 19. 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 is not currently exposed to interest rate risk.
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
Note 19: Financial instruments (continued)
39
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.
Weighted
average
interest rate 1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
Consolidated - 2023
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade and other payables
-
4,497,452
-
-
-
4,497,452
Weighted
average
interest rate 1 year or less
Between 1
and 2 years
Between 2
and 5 years
Over 5
years
Remaining
contractual
maturities
Consolidated - 2022
%
$
$
$
$
$
Non-derivatives
Non-interest bearing
Trade and other payables
-
2,781,970
-
-
-
2,781,970
Interest-bearing - fixed rate
Secured loans *
10.00%
7,700,000
-
-
-
7,700,000
Unsecured loans *
10.00%
1,609,677
-
-
-
1,609,677
Convertible notes payable *
10.00%
20,897,182
-
-
-
20,897,182
Total non-derivatives
32,988,829
-
-
-
32,988,829
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 20. 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:
Consolidated
2023
2022
$
$
Short-term employee benefits
975,146
681,253
Share-based payments
-
289,625
Post-employment benefits
5,250
1,894
980,396
972,772
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
40
Note 21. Remuneration of auditors
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:
Consolidated
2023
2022
$
$
Audit services – Hall Chadwick Chartered Accountants
Audit or review of the financial statements
102,500
91,500
Other services – Hall Chadwick Chartered Accountants
Preparation of the tax return
15,437
38,400
117,937
129,900
Note 22. 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 reliant on the Company achieving future development milestones which may or may not occur. 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. The liability has been assessed at $10.6 million (refer Note 17).
The net present value adopted is based on the consolidated entities 80% interest in the Dartbrook joint venture on the basis
that the project is bought into production under the current arrangements. Should this not occur, the liability recognised may
be lower than it would be on a 100% basis. The additional amount represents a contingent liability, with remeasurement
likely to occur under appropriate circumstances.
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 Financiers) in relation to their previous financing arrangements with AQC. These amendments
were approved by shareholders in November 2018 and included the following potential royalties payable to the Financiers:
•
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 Financiers become payable after the vendor royalty is full discharged.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2019
41
Note 23. Contingent asset
On 27 September 2022, the consolidated entity announced that it had agreed and signed a terms sheet for a deal to re-
commission the Dartbrook Coal Project alongside Trepang Services Pty Ltd; M Resources Pty Ltd and Tetra Resources Pty
Ltd (Joint Venture). On 1 May 2023, the consolidated entity announced that the term sheet signed in September 2022 had
been renegotiated and a new Joint Venture would see AQC increase its direct working interest in the project from 50% to 80%
and its net economic interest increase from 50% to 70%.
Amongst other matters contemplated, the agreements provide for the consolidated entity to be reimbursed certain costs from
the Joint Venture out of future development funding obtained.
The reimbursement is contingent on formal formation of the Joint Venture and receipt of future development funding.
At reporting date the consolidated entity has determined that the quantum of costs to be potentially reimbursed up to 30 June
2023 of approximately $2.384m.
Note 24. Related party transactions
Parent entity
Australian Pacific Coal Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 26.
Key management personnel
Disclosures relating to key management personnel are set out in Note 20 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:
Consolidated
2023
2022
$
$
Current convertible securities (payable):
Mr John Robinson (Snr)
-
10,448,591
Mr Nick Paspaley
-
10,448,591
Current secured loans (payable):
Trepang Services Pty Ltd
-
7,700,000
Current unsecured loans (payable):
Trepang Services Pty Ltd
-
1,609,677
All funds advanced and owing at 30 June 2022 were repaid during the current financial year.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
42
Note 25. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2023
2022
$
$
Loss after income tax
(7,837,692)
(6,918,713)
Total comprehensive income
(7,837,692)
(6,918,713)
Statement of financial position
Parent
2023
2022
$
$
Total current assets
3,246,213
417,134
Total assets
10,705,040
23,265,876
Total current liabilities
403,540
52,662,002
Total liabilities
403,540
52,662,002
Equity
Issued capital
154,753,971
60,487,791
Share based payment reserve
Retained profits
(141,206,258)
(89,883,924)
Total equity
13,547,713
(29,396,133)
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 2023 other than disclosed at note 22.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2023.
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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
43
Note 26. Interests in subsidiaries and joint arrangements
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:
Ownership interest
Principal place of business /
2023
2022
Name
Country of incorporation
%
%
AQC Investments 1 Pty Ltd
Australia
100.00%
100.00%
AQC Investments 2 Pty Ltd
Australia
100.00%
100.00%
Area Coal Pty Ltd
Australia
100.00%
100.00%
AQC Services Pty Ltd
Australia
100.00%
100.00%
AQC Dartbrook Pty Ltd
Australia
100.00%
100.00%
AQC Dartbrook Management Pty Ltd
Australia
100.00%
100.00%
Dartbrook Coal (Sales) Pty Ltd
Australia
100.00%
100.00%
Ipoh Pacific Resources Pty Ltd
Australia
100.00%
100.00%
Felix St Pty Ltd
Australia
100.00%
100.00%
IPR Operations Pty Ltd
Australia
100.00%
100.00%
Mining Investments One Pty Ltd
Australia
100.00%
100.00%
Joint Arrangements
The consolidated entity holds an 80% interest in the Dartbrook Joint Arrangement, an arrangement structured as a
strategic partnership with the consolidated entity and other parties. The primary purpose of the joint arrangement is to
facilitate exploration, mining and sale of coal from the Dartbrook project.
Note 27. Events after the reporting period
The following matters or events have occurred subsequent to the end of the reporting period:
•
On 14 July 2023, the Company announced that it had received a loan for $3 million from its major shareholder,
Trepang Services, to provide for additional working capital while negotiations with potential lenders for the balance
of the restart capex funding are finalised. The Company is also advancing discussions for the potential sale of an
AQC-owned parcel of land to Trepang. The loan plus interest will be repaid within 12 months or when third party
funding is secured.
•
On 17 August 2023, the Company announced that it had received a non-binding letter of intent from Trafigura Pte
Ltd for up to US$50 million (approximately $75 million) in debt funding to enable the restart of Dartbrook underground
coal mine.
•
On 31 August 2023, the Company announced a capital raising of up to $12 million via a $4 million Institutional
Placement (the “Placement”) and a 1 for 4.75 Accelerated Non-Renounceable Entitlement Offer (“ANREO”) at an
offer price of $0.11 per new share issued (“New Shares”). Settlement of the New Shares to be issued as part of the
Institutional Component and the Placement occurred on 6 September 2023. The Retail Component opened on 6
September 2023 and is expected to close at 5.00pm (Sydney time) on 2 October 2023.
No other matter or circumstance has arisen since 30 June 2023 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.
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
44
Note 28. Reconciliation of profit after income tax to net cash from operating activities
Consolidated
2023
2022
$
$
(a) Reconciliation of cash flows from operating activities
Loss after income tax expense for the year
(12,517,633)
(11,496,349)
Adjustments for:
Depreciation and amortisation
1,029,053
1,011,851
Increase in provisions
491,000
-
Share-based payments
-
413,750
Accrued finance costs
5,705,126
7,152,413
Available for sale assets
-
(100,000)
Change in operating assets and liabilities:
Increase / (decrease) in trade and other receivables
77,629
(351,540)
Increase / (decrease) in prepayments and accruals
(274,271)
(12,446)
(Increase) / decrease in trade and other payables
(391,395)
417,578
Net cash from operating activities
(5,880,491)
(2,864,740)
(b) Reconciliation of net cash flows from financing activities
Contributions of equity, net of transaction costs
93,852,433
-
Repayment of borrowings
(70,500,000)
-
Net cash from financing activities
23,352,433
-
Note 29. Earnings per share
Consolidated
2023
2022
$
$
Earnings per share for profit from continuing operations
Profit after income tax
(12,517,633) (11,496,349)
Profit after income tax attributable to the owners of Australian Pacific Coal Limited
(12,517,633) (11,496,349)
Cents
Cents
Basic earnings per share
(5.23)
(22.7)
Diluted earnings per share
(5.23)
(22.7)
Number
Number
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating basic earnings per share
239,443,783
50,484,810
Adjustments for calculation of diluted earnings per share:
Options over ordinary shares
-
-
Convertible notes
-
-
Weighted average number of ordinary shares used in calculating diluted earnings per share
239,443,783
50,484,810
Australian Pacific Coal Limited
Notes to the financial statements
30 June 2023
45
Note 30. Share-based payments
Share-based payment expense recognised during the year:
2023
2022
$
$
Share-based payment expense recognised during the period:
Performance rights issued to a directors and management
-
413,750
-
413,750
Notes for the above table, relating to the year ended 30 June 2023
1. 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.
Australian Pacific Coal Limited
Directors' declaration
30 June 2023
46
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 2023 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
___________________________
Mike Ryan
Chairman
28 September 2023
Brisbane
47
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
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 2023, 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)
giving a true and fair view of the Group’s financial position as at 30 June 2023
and of its financial performance for the year then ended; and
(b)
complying with Australian Accounting Standards and the Corporations
Regulations 2001; and
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 $12,517,633 during the year ended 30 June 2023. 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.
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 2023. 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 2023, the Consolidated Entity had capitalised
exploration
assets
of
$5,720,170.
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 in which the Group has a
contracted interest by obtaining a confirmation of the
titles.
•
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
meetings and updates from the Group’s
exploration partners;
o discussed with management the Group’s ability
and intention to undertake further exploration
activities; and
o reviewed any tenements that have been
surrendered
ensuring
these
have
been
expensed as required.
•
We tested a sample of additions of capitalised
exploration expenditure to supporting documentation.
Key Audit Matter
How Our Audit Addressed the Key Audit Matter
Recognition and measurement of vendor
royalty provisions
Refer to Note 17 ‘Provisions’ and Note 2 ‘Critical
accounting judgements, estimates and assumptions’
vendor royalty
The Group has vendor royalty provisions of $10,600,000
at 30 June 2023. The calculation of these provisions
requires judgment in estimating the future production, the
timing as to when the future production will be incurred
and the determination of an appropriate rate to discount
the future costs to net present value.
We focused on this area due to significance of the
balance in the consolidated statement of financial
position relative to net assets, and the significant
judgments and assumptions involved in the recognition
and measurement of this obligation.
Our Procedures included, amongst others:
•
We evaluated the legal and/or constructive
obligations with respect to the vendor royalty
provisions for the Dartbrook operations and the
associated estimates.
•
We assessed the accuracy of the calculations
and the appropriateness of the discount rates.
•
We assessed the adequacy of the Group’s
disclosures in respect of borrowings.
48
AUSTRALIAN PACIFIC COAL LIMITED
AND CONTROLLED ENTITIES
ABN 49 089 206 986
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AUSTRALIAN PACIFIC COAL LIMITED
Information Other Than The Financial Report And Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2023, but does not include the financial report and our auditor’s report
thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do
so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional skepticism throughout the audit. We also:
–
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control
–
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
–
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
–
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as
a going concern.
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
–
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
–
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the remuneration report included in pages 5 to 10 of the directors’ report for the year ended
30 June 2023.
In our opinion, the remuneration report of Australian Pacific Coal Limited, for the year ended 30 June 2023,
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
STEWART THOMPSON
Partner
CORPORATE GOVERNANCE STATEMENT
Page 51
Australian Pacific Coal Limited
Annual Report
Corporate Governance Statement
ABN 49 089 206 986
Year Ending 30 June 2023
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 28 September 2023.
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
b) those matters expressly reserved to the board
and those delegated to management.
A formal board charter has not been established given
the size of the Company’s Board and management.
The Board is ultimately accountable for 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
overseeing
all
corporate
reporting
systems,
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.
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.
CORPORATE GOVERNANCE STATEMENT
Annual Report
Australian Pacific Coal Limited
Page 52
Year Ending 30 June 2023
ABN 49 089 206 986
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.
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.
The Company provides relevant information to
shareholders for their consideration about the
attributes of candidates together with whether the
Board supports the appointment or re-election of 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.
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.
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.
The Company Secretary reports directly to the Board
through the Chairman and is accessible to all
directors.
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.
the measurable objectives set for that
period to achieve gender diversity;
ii.
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 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 four directors and
one company secretary one of which was female.
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.
CORPORATE GOVERNANCE STATEMENT
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Australian Pacific Coal Limited
Annual Report
Corporate Governance Statement
ABN 49 089 206 986
Year Ending 30 June 2023
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.
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
time
to
time.
Individual
Directors
may
recommend changes to the composition of the Board.
Until such time as the Company expands to justify an
expansion of Board members, the Board is of the
current opinion that such performance evaluation is
suitable for the Company.
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.
The Board reviews the performance of senior
executives periodically.
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
ii.
is chaired by an independent director,
and disclose:
iii. the charter of the committee;
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 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.
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
responsible
for
assessing
the
necessary
competencies of the Board members to add value to
the Company, reviewing Board succession plans and
evaluating the Board’s performance.
CORPORATE GOVERNANCE STATEMENT
Annual Report
Australian Pacific Coal Limited
Page 54
Year Ending 30 June 2023
ABN 49 089 206 986
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.
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
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.
Ethics and
integrity
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.
Corporate
governance
Experienced director that is
familiar with the mechanisms,
controls and channels to deliver
effective governance and
manage risks.
2.3: A listed entity should disclose:
a) the names of the directors considered by the
board to be independent directors;
b) if a director has an interest, position, association
or relationship of the type described in Box 2.3
Details of the Board of directors, their appointment
dated, length of service and independence status is
set out from page 3 to 4 of the Annual Report.
CORPORATE GOVERNANCE STATEMENT
Page 55
Australian Pacific Coal Limited
Annual Report
Corporate Governance Statement
ABN 49 089 206 986
Year Ending 30 June 2023
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
c) the length of service of each director.
2.4: A majority of the board of a listed entity should
be independent directors.
The board consists of four directors, two of whom are
considered independent.
Given the size and status of the Company and its
operational status, the Board considered this to be
appropriate.
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.
The current Chair, Mr Mike Ryan, is considered an
independent director. Mr Ryan does not perform the
role of CEO.
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.
New directors undertake an induction program
coordinated by the Company Secretary that briefs
and informs the director on all relevant aspects of the
Company’s operations and background. Directors are
encouraged to undertake director development
programs to ensure that directors can enhance their
skills and remain abreast of important developments,
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.
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
the
Company’s
commitment
to
compliance with these standards.
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 code of conduct has not been established
given the size of the Company’s Board and
management.
CORPORATE GOVERNANCE STATEMENT
Annual Report
Australian Pacific Coal Limited
Page 56
Year Ending 30 June 2023
ABN 49 089 206 986
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
policy; and
b) 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.
4.1 - The board of a listed entity should:
a) have an audit committee which:
i.
has at least three members, all of whom are
non-executive directors and a majority of
whom are independent directors; and
ii.
is chaired by an independent director, who
is not the chair of the board, and disclose:
iii. the charter of the committee;
iv. the relevant qualifications and experience of
the members of the committee; and
v. in relation to each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
b) if it does not have an audit committee, disclose
that fact and the processes it employs that
independently verify and safeguard the integrity
of its corporate reporting, including the
processes for the appointment and removal of
the external auditor and the rotation of the audit
engagement partner.
The Board has established an Audit Committee.
The Audit Committee consists of Mike Ryan, Ayten
Saridas and Jeff Beatty.
Details of the qualifications and experience of the
director members of the Committee are detailed in the
“Information on directors” section of the Directors’
report.
The Company considers that due to the size, nature
and level of complexity of the Company, the Audit
Committee is appropriate despite not meeting the
strict compliance requirements of Principle 4.1.
Ultimate responsibility for the integrity of the
Company’s financial reporting rests with the board
and the current composition of the Audit Committee
ensures that the Board has processes in place to
raise issues that are ordinarily considered by the Audit
Committee.
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.
For the financial year ended 30 June 2023 the
Company’s CEO and CFO provided the Board with
the required declarations.
CORPORATE GOVERNANCE STATEMENT
Page 57
Australian Pacific Coal Limited
Annual Report
Corporate Governance Statement
ABN 49 089 206 986
Year Ending 30 June 2023
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.
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.
5.2: A listed entity should ensure that its board
receives copies of all material market
announcements promptly after they have been
made.
Given the current size of the Board and management,
the Company aims to ensure 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.
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’s ensures that any presentations to
investors or analysts are released to the ASX Markets
Platform ahead of presentation.
CORPORATE GOVERNANCE STATEMENT
Annual Report
Australian Pacific Coal Limited
Page 58
Year Ending 30 June 2023
ABN 49 089 206 986
Corporate Governance Statement
Principle 6 – Respect the rights of security holders
A listed entity should respect the rights of its security holders by providing them with appropriate information
and facilities to allow them to exercise those rights effectively.
6.1: A listed entity should provide information about
itself and its governance to investors via its website.
The Company maintains information in relation to
governance
documents,
directors
and
senior
executives, annual report, ASX announcements and
contact details on the Company’s website.
The Company is committed to:
•
Communicating effectively with its shareholders
and ensuring that it is easy for shareholders to
communicate with the Company;
•
Complying
with
its
continuous
disclosure
obligations applicable to the ASX listing rules and
other regulations; and
•
Ensuring that the shareholders and other
stakeholders are provided with timely and full
information about the Company’s activities.
6.2: A listed entity should have an investor relations
program
that
facilitate
effective
two-way
communication with investors.
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.
6.3: A listed entity should disclose how it facilitates
and encourages participation at meetings of security
holders
To facilitate and 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 to shareholders through
letters, email and other forms of communications;
•
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.
CORPORATE GOVERNANCE STATEMENT
Page 59
Australian Pacific Coal Limited
Annual Report
Corporate Governance Statement
ABN 49 089 206 986
Year Ending 30 June 2023
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.
The Company engages its share registry to manage
the majority of communications with shareholders.
Shareholders
are
encouraged
to
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,
each of which:
i.
has at least three members, a majority of
whom are independent directors; and
ii.
is chaired by an independent director, and
disclose:
iii. the charter of the committee;
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
The Board has established a Risk Committee.
The Committee consists of Mike Ryan, Ayten Saridas
and Jeff Beatty.
Details of the qualifications and experience of the
director members of the Committee are detailed in the
“Information on directors” section of the Directors’
report.
The Company considers that due to the size, nature
and level of complexity of the Company, the Risk
Committee is appropriate despite not meeting the
strict compliance requirements of Principle 7.1.
Ultimate responsibility for establishing a sound risk
management framework rests with the board and the
current composition of the Risk Committee ensures
that the Board has processes in place to raise issues
that are ordinarily considered by the Risk Committee.
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
Board
is responsible for reviewing 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.
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
b) 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.
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.
CORPORATE GOVERNANCE STATEMENT
Annual Report
Australian Pacific Coal Limited
Page 60
Year Ending 30 June 2023
ABN 49 089 206 986
Corporate Governance Statement
7.4: A listed entity should disclose whether it has any
material exposure to economic, environmental and
social sustainability risks and, if it does, how it
manages or intends to manage those risks.
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:
i.
has at least three members, a majority of
whom are independent directors; and
ii.
is chaired by an independent director, and
disclose:
iii. the charter of the committee;
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
Board
has
established
a
Remuneration
Committee.
The Committee consists of Mike Ryan and Nick
Johansen.
Details of the qualifications and experience of the
director members of the Committee are detailed in the
“Information on directors” section of the Directors’
report.
The Company considers that due to the size, nature
and level of complexity of the Company, the
Remuneration Committee is appropriate despite not
meeting the strict compliance requirements of
Principle 8.1.
Ultimate responsibility for setting and maintaining
remuneration sufficient to attract and retain high
quality personnel rests with the board. The current
composition of the Remuneration Committee ensures
that the Board has processes in place to raise issues
that are ordinarily considered by the Remuneration
Committee
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.
The Board considers the procedures, policies and key
performance indicators used to measure the
performance of key executives and directors. Any
equity based executive remuneration may be made in
accordance
with
thresholds
approved
by
shareholders and developed over time.
Full discussion of the Company’s remuneration
philosophy
and
framework
and
remuneration
received by directors and executives in the current
financial year is contained in the Remuneration
Report section of the Directors’ Report.
CORPORATE GOVERNANCE STATEMENT
Page 61
Australian Pacific Coal Limited
Annual Report
Corporate Governance Statement
ABN 49 089 206 986
Year Ending 30 June 2023
8.3: A listed entity which has an equity-based
remuneration scheme should:
a) have a policy on whether participants are
permitted to enter into transactions (whether
through the use of derivatives or otherwise)
which limit the economic risk of participating in
the scheme; and
b) disclose that policy or a summary of it
Where a director or other senior executive uses
derivatives or other hedging arrangements over
vested securities of the Company, this will be
disclosed. There was no equity based renumeration
during the reporting period.
ASX ADDITIONAL INFORMATION
Annual Report
Australian Pacific Coal Limited
Page 62
Year Ending 30 June 2023
ABN 49 089 206 986
ASX Additional Information
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere in this report is as follows.
This information is current as 11 September 2023.
1.
Shareholding
a.
Distribution of Shareholders – Ordinary Securities
Number
Number
Category (size of holding)
of holders
of shares held
1 – 1,000
288
116,503
1,001 – 5,000
377
1,046,440
5,001 – 10,000
181
1,432,964
10,001 – 50,000
266
6,342,585
50,001 – 100,000
68
5,146,106
100,001 – and over
125
423,756,728
Total
1,305
437,841,326
b.
The number of shareholdings held in less than a marketable parcel of 500 shares (closing price on 11
September 2023) is 603 and they hold 863,310 shares.
c.
The names of the substantial holders in the company as at 11 September 2022 are:
Number
Substantial Holder
of shares
Trepang Services Pty Ltd
162,301,828
Regal Funds Management Pty Ltd
41,983,432
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.
ASX ADDITIONAL INFORMATION
Page 63
Australian Pacific Coal Limited
Annual Report
ASX Additional Information
ABN 49 089 206 986
Year Ending 30 June 2023
e.
20 Largest Shareholders — Ordinary Shares
Name
Number of Ordinary
Fully Paid Shares
Held
% Held of
Issued
Ordinary
Capital
1.
TREPANG SERVICES PTY LTD
162,301,828
37.07
2.
CITICORP NOMINEES PTY LIMITED
31,938,032
7.29
3.
SAMBOR TRADING PTY LTD
27,800,000
6.35
4.
MR BUGUO WANG
17,038,286
3.89
5.
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
16,226,172
3.71
5.
LATIMORE FAMILY PTY LTD
16,226,172
3.71
5.
L1 CAPITAL PTY LTD
16,226,172
3.71
6.
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
10,476,499
2.39
7.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
9,680,385
2.21
8.
MR NICHOLAS THEODORE JAMES PASPALEY
8,822,085
2.01
9.
WARBONT NOMINEES PTY LTD
8,084,026
1.85
10.
BART SUPERANNUATION PTY LIMITED
7,895,543
1.80
11.
UBS NOMINEES PTY LTD
7,642,876
1.75
12.
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
7,380,453
1.69
13.
BUTTONWOOD NOMINEES PTY LTD
5,860,951
1.34
14.
JET ARM LIMITED
5,000,000
1.14
15.
NORFOLK ENCHANTS PTY LTD
4,462,197
1.02
16.
ZERRIN INVESTMENTS PTY LTD
3,600,000
0.82
17.
MR JOHN LAWRENCE MCINTYRE
3,500,000
0.80
18.
FAMA INVESTMENTS PTY LTD
3,454,545
0.79
19.
KITARA INVESTMENTS PTY LTD
3,245,234
0.74
20.
GLADIATOR SECURITIES PTY LIMITED
2,045,456
0.47
378,906,912
86.54
f.
Unlisted options
Nil
2.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Stock
Exchange Limited (ASX Code: AQC).
Competent Persons Statement
All exploration results, mineral resources and reserves 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, 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.
CORPORATE DIRECTORY
Annual Report
Australian Pacific Coal Limited
Page 64
Year Ending 30 June 2023
ABN 49 089 206 986
Corporate Directory
DIRECTORS
Mr Mike Ryan, Non-Executive Director and Interim Chairman
Ms Ayten Saridas, Director and Interim Chief Executive Officer
Mr Nick Johansen, Non-Executive Director
Mr Jeff Beatty, Non-Executive Director
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 1/371 Queen Street
Brisbane QLD 4000
Phone: +61 7 3221 0679
Fax: +61 7 3229 9323
www.aqcltd.com