30 JUNE 2020
ANNUAL
FINANCIAL
REPORT
Cokal Limited ACN 082 541 437
Annual Financial Report for the year ended 30 June 2020
For personal use only
Contents
Corporate Information
Chairman’s Letter to Shareholders
Review of Operations
Directors’ report
Auditor’s Independence Declaration to the Directors of Cokal Limited
Shareholder Information
Interests in Tenements and Projects
Consolidated Statement of Comprehensive Income for the year ended 30 June 2020
Consolidated Statement of Financial Position as at 30 June 2020
Consolidated Statement of Changes in Equity for the year ended 30 June 2020
Consolidated Statement of Cash Flows for the year ended 30 June 2020
Notes to the Consolidated Financial Statements for the year ended 30 June 2020
Declaration by Directors
Independent Auditor’s Report
Competent Person Statement
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The Total Coal Reserve estimate announced on 1st August 2017 is based on information compiled by Robert de Jongh who is
a Member of the Australasian Institute of Mining and Metallurgy and an employee of ASEAMCO Pty Ltd. Mr de Jongh is a
qualified mining engineer and has sufficient experience which is relevant to the style of mineralization and type of deposit
under consideration and to the activity which he is undertaking, to qualify as a Competent Person as defined in the 2012
Edition of the “Australasian Code for Reporting of Explorations Results, Mineral Resources and Ore Reserves.
The Total Coal Resource estimate was announced on 29 April 2016, titled “Updated JORC Resource Statement for BBM”. The
information in the report relating to Mineral Resources is based on information compiled by Yoga Suryanegara who is a
Member of the Australasian Institute of Mining and Metallurgy. Mr Suryanegara is a qualified geologist and has sufficient
experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which
he is undertaking, to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves”.
The Company confirms that it is not aware of any new information or data that materially affects the information included in
the announcement made on 29 April 2016 and that all material assumptions and technical parameters underpinning the
estimates in the announcement made on 29 April 2016 continue to apply and have not materially changed.
Corporate Information
DIRECTORS
Domenic Martino
Patrick Hanna
Karan Bangur
David (Allen) Delbridge
COMPANY SECRETARIES
Louisa Martino
Miranda Yuan
REGISTERED OFFICE AND PRINCIPAL
BUSINESS OFFICE
Level 5
56 Pitt Street
Sydney NSW 2000
Phone: + 61 2 8823 3179
COUNTRY OF INCORPORATION
Australia
SOLICITORS
Mills Oakley
Level 7,
151 Clarence Street
Sydney NSW 2000
Phone: + 61 2 8289 5800
SHARE REGISTRY
Advanced Share Registry Services
110 Stirling Highway
Nedlands WA 6009
Phone: +61 8 9389 8033
Fax: +61 8 9262 3723
AUDITORS
Hall Chadwick
Level 40, 2 Park Street
Sydney NSW 2000
STOCK EXCHANGE LISTING
Australian Securities Exchange Ltd
ASX Code: CKA
INTERNET ADDRESS
www.cokal.com.au
AUSTRALIAN BUSINESS NUMBER
ABN 55 082 541 437
COKAL LIMITED Annual Report 2020 | Page 1
For personal use only
Chairman’s Letter to Shareholders
Dear Shareholders,
This last year has seen the development of preparations for the commencement of coal production.
Operational achievements for the year include:
• Mining tenders conducted for BBM which are in the final stages of negotiation;
•
Identification of a 98km former logging road to bypass 165km of the Barito River. Access road
reconstruction is to commence shortly;
• Finalisation of a Coal Evacuation Strategy for BBM;
• Determination of the location of the Intermediate Stockpile (ISP) and barge loader which will be at
Bumban (Muara Lahung);
• 5 Year Mining Plan updated to reflect earlier mining of coking coal;
• Negotiations and finalisation of contract with HSM Marine to construct and operate shallow draft self-
propelled barges; and
• TBAR IUP for exploration licence extended.
On the financial front significant milestones were achieved, strengthening the Company’s financial health
and placing Cokal in a strong financial position to enable it to progress with the financing required for the
commencement of production. These milestones include:
• Completion of the conversion of the Platinum Loans (now held by Alpine Invest Holding Ltd) to a per
tonne coal production rate; and
• Conversion of the final vendor payment for BBM to a per tonne coal production rate.
These milestones, now achieved, allow the Company to complete the financing of construction of the BBM
coking coal mine.
I would like to take this opportunity to highlight the contribution of the team from Aahana. Since Aahana’s
investment we have almost completely replaced the local operational team to include seasoned and
experienced coal production personnel.
This team’s contribution not only enabled the above financial achievements, but have been instrumental in
the new operational plan, obtaining all necessary government approvals and negotiating successfully the
required contractor agreements to enable Cokal to move to production.
The Company now looks forward to the commencement of mining operations in this current financial year.
I thank my fellow Board members and management as well as our in-country teams for their ongoing efforts
and positive outcomes during the past year.
We thank you our shareholders for your on going support.
Domenic Martino
Chairman
COKAL LIMITED Annual Report 2020 | Page 2
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Review of Operations
Cokal Limited (ASX:CKA; Cokal or the Company) is an Australian listed company with the objective of becoming a
metallurgical coal producer with a global presence. Cokal has interests in four projects in Central Kalimantan, Indonesia,
each with known resources of metallurgical coal.
INDONESIAN COAL ASSETS
Cokal holds shares in the following Indonesian coal assets in Central Kalimantan, each with known resources of
metallurgical coal:
•
•
•
•
60% of the Bumi Barito Mineral (BBM) project located in Central Province, Kalimantan, Indonesia. The BBM
project area is 14,980ha;
75% of PT Tambang Benua Alam Raya (TBAR) which owns an exploration tenement covering an area of
approximately 18,850ha in Central Province, Kalimantan, Indonesia. This tenement is located adjacent to and
southeast of the BBM project;
60% of the Borneo Bara Prima (BBP) project located in Central Province, Kalimantan, Indonesia. The BBP
project area is approximately 13,050ha;
75% of the Anugerah Alam Katingan (AAK) project. This project is also located in Central Province,
Kalimantan, Indonesia and has an area of approximately 5,000ha. AAK is currently on ‘on-hold’ status by
Provincial Police Department (Polda Kalteng). The Police have investigated a dispute over the ownership of
AAK pre-dating Cokal’s interest in the Project. Cokal is an aggrieved party and will await the outcome of the
Police investigation.
BBM, TBAR, BBP and AAK are located adjacent to Indomet’s extensive coking coal tenements. The Company is currently
focussed on the development of the BBM Project.
Cokal Indonesian Coal Assets
COKAL LIMITED Annual Report 2020 | Page 3
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Review of Operations
Bumi Barito Mineral (BBM) Project
BBM’s permit covers an area of 14,980ha with multiple seams of high quality metallurgical coal. BBM has regulatory
approvals in place including:
• Mining Licence for 20 years with two further extensions of 10 years each
• Environmental approval for a mining rate of 6Mt per annum
• Port construction approval
• Forestry Permit to commence mining activity
• RKAB approval of annual plan.
The BBM Permit Area is dissected by the Barito River, which cuts through the tenement in a north-south trend. Almost
the entire IUP contains coal-bearing sediments with open cut mineable areas controlled by three major fault systems.
Coal analyses from more than 130 outcrops on the west side of the Barito River indicate that it contains premium quality
anthracite and PCI coals. This coal does not currently form part of stated BBM coal resources and provides significant
potential for future expansion of BBM resources.
BBM Permit Area
Updated rehabilitation plans and the work plan for 2019 (RKAB) were submitted during the year and approved by the
Government (Directorate General Minerals and Coal). The design of explosive storage facilities is being finalised as a
basis for obtaining the required blasting permit before the end of this year.
Approval is being sought to extend mining into the eastern part of Pit 2. An alternative to move directly to develop Pit
1 before extending Pit 2 is being considered.
The revised plan for stockpile location, settling pond area and dumping area was submitted to the Environmental Office
Agency of Central Kalimantan Province. Production and sales reports have been submitted as required. Quarterly
reports were submitted to the Ministry of Energy and Mineral Resources. A Business Registration Number (NIB) was
created to provide a one stop shop for government approvals for BBM. A Community Development and Empowerment
Master Plan is being prepared.
COKAL LIMITED Annual Report 2020 | Page 4
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Review of Operations
During the survey of mining areas in Pit 3 a disused logging road was identified. This runs 98km to Bumban to bypass
165km of the most difficult parts of the Upper Barito River. This is described later in this report.
No exploration activity, mining production or development was conducted by Cokal during the year.
The Five Year Mine Plan was updated to form the basis for mining contracts. In February 2020 Cokal called for tenders
from Tier 1 and Tier 2 contractors to:
• Remove overburden and inter-burden at its BBM mine
• Mine coal at BBM
• Transport coal from BBM mine to the Intermediate Stockpile (ISP) and barge loader at Bumban.
A shortlist of two potential contractors entered protracted negotiations which are nearing conclusion. A third
contractor is being considered to obtain the minimum cost of coal delivered to the barge loader at Bumban.
Coal Delivery to Market
A review of mine logistics resulted in a changed coal evacuation strategy for BBM.
Cokal will now haul product coal 103km on an all-weather road from BBM Pit 3 to an ISP and barge loader at Bumban
(Muara Lahung) to bypass the most difficult 165km of the Upper Barito River. A barging company, HSM Marine, will be
contracted to supply and operate shallow draft, self-propelled 3,000t barges which can operate in 2 to 2.5m deep water
to deliver coal to a point below Muara Teweh Bridge from where it will be transferred to 8,000t river barges for the
voyage down river to the mouth of the Barito River. From there coal will be transported to ships standing offshore using
conventional barges.
As per the current plan no land coal storage will be developed for BBM apart from stockpiles at the mine and at the
Bumban barge loader. Surges in coal delivery will be accommodated using moored barges in two locations: first just
downstream of the Muara Teweh bridge and second close to the mouth of the Barito River.
Tambang Benua Alam Raya (TBAR) Tenement
TBAR’s exploration authority covers an area of 18,850ha immediately adjacent to and south of Cokal's BBM tenement.
Outcrop mapping of four seams over 17km strike length indicates a substantial resource of high grade coking coal in this
deposit. It is believed these seams correlate to the B, C, D and J seams in BBM.
Extension of the IUP for exploration was received in February 2020. Over 80% of the tenement area is available for
exploration and mine development with 20% being protected forest. An exploration plan has been prepared to evaluate
the tenement’s resource and to delineate Resources and Reserves under the JORC code. This will enable submission of
an application for a Production and Operation IUP within two years. The Production and Operation IUP will be
equivalent to a mining licence.
No exploration activity or mining production was conducted at TBAR by Cokal during the year. However the access road
from BBM Pit 3 to Bumban passes through the TBAR licence area and in surveying this road several coal outcrops were
exposed which are thought to be the TBAR coking coal seams including J seam.
Keeping in consideration that Cokal’s priority is to commence mining operations in BBM, the Company applied for an
extension of the exploration permit for an additional year which was granted in February 2020. This extension will allow
us to concentrate our efforts on commencement of mining operations in BBM without losing any granted time period
for conducting exploration activities in TBAR. Such extension provides an additional 12-months to conduct exploration
activity in TBAR.
Borneo Bara Prima (BBP) Tenement
Cokal's BBP project covers 13,050ha in Murung Raya Regency, Central Kalimantan. BBP has been granted an Exploration
Forestry Permit (IPPKH) and has been confirmed on the Central Government’s Clean and Clear list. The IUP was
transferred to the Central Government where it now awaits approval to be upgraded to a mining license (Production
and Operation IUP).
COKAL LIMITED Annual Report 2020 | Page 5
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Review of Operations
A business license decree for operation foreign mining production (IUP OP PMA) from the Capital Investment
Coordination Board Centre (BKPM) was received in Q1 2019. Work plans and the budget (RKAB) 2019 have been
submitted to the government (Directorate General Minerals and Coal).
No exploration activity was conducted in BBP during the year.
Anugerah Alam Katingan (AAK) Tenement
Cokal's AAK project covers 5,000ha in Central Kalimantan. Applications for the Exploration Forestry Permit (IPPKH) and
Clean and Clear Certificates continue to be processed. Cokal continues to monitor the progress of the regulatory
upgrade approvals for AAK.
No exploration activity was conducted in AAK during the year.
FORMER LOGGING ROAD (BBM and TBAR)
Logging roads from BBM Pit 3 to Bumban port
During detailed surveying around BBM Pit 3 a disused 10 to 11m wide logging road was identified and traced to connect
to another logging road now in use to transport coal and timber to ports 165km down river from Cokal's previously
planned river port at Krajan. The disused logging road is 46km long to join the road now in use, which runs another
52km to the proposed ISP and barge loader at Bumban, total 98km. The 46km road is almost all within the license areas
for BBM and TBAR.
This 98km road bypasses 165km of the most difficult parts of the Upper Barito River to a point on the river now in
regular use for barge transport for most of the year using conventional barges. Using shallow draft barges from this
location Cokal will be able to transport coal to market throughout every month of the year. This is essential to meet
the demands of steel mill customers and to avoid deterioration of the coking properties of the coal when in stockpiles.
The base of the disused logging road is still in place although vegetation has intruded along the edges. The 52km road
now in use is in good condition for 30t trucks, the size intended to be used by Cokal.
COKAL LIMITED Annual Report 2020 | Page 6
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Review of Operations
Cokal's team conducted a detailed survey of the road to map and mark the complete route and to assess the
requirements to upgrade the road in terms of width and gradient for use by 30t trucks. A drone survey with
photographs was conducted on the 46km of the road to be reconstructed.
Cokal has established its right to use these roads and assessed the cost of a program to upgrade the now disused section
of the road. This has been adopted as the main logistics route to bring BBM and TBAR coal to market via a barge loader
at Bumban.
Disused logging road
Former logging road now being used as a haul road
COKAL LIMITED Annual Report 2020 | Page 7
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Review of Operations
Former logging road now being used as a haul road
The first 46km from BBM's Pit 3 will be reformed to 12m wide with 2m shoulders. Steep sections of the road will be cut
and filled as required to achieve a maximum 8% gradient for uphill loaded hauls, 10% on downhill loaded sections. It is
planned to haul coal in 30t trucks so relatively tight curves can still be accepted. The surface of the old road is still intact
and not severely rutted, indicating the road may be reformed into an all-weather road by using the existing gravel and
implementing careful drainage control. 49 new culverts will be required plus three bridges. Cokal will have exclusive
use of this section of the road.
Reconstruction of this section of the road will be in two stages: first to gain road access to Pit 3 and then to upgrade
the road to be suitable for coal haulage. Only when road access has been achieved can the mining equipment be brought
to site and mining commenced.
The second 52km of the road is already in use by logging and mining companies but traffic is not heavy. Cokal will share
the maintenance of this road with current users.
The logging company which built and previously used this road has been engaged to provide advice and facilitate social
acceptance of the road reconstruction. They will also provide the timber and technology to rebuild culverts and bridges.
Sources of gravel have been identified which can be used to maintain the road all weather capability throughout the
period of mining. An andesite deposit at the mid-point of the haul road has the potential to be a long term reliable
source of gravel.
BBM has secured an exclusive permit to use the haul road from Pit 3 to the 52km intersection.
COKAL LIMITED Annual Report 2020 | Page 8
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Review of Operations
COAL BENEFICIATION
Where the haul road crosses the outcrop of the J seam in TBAR it is intended to take advantage of the similarities in the
quality and characteristics of the J seam in BBM and TBAR.
When the access road development reaches the J seam outcrops a full scale comprehensive screening test will be
undertaken to confirm the extent to which the ash can be lowered by screening alone instead of screening and water
washing.
Most of the ash in run-of-mine (ROM) coal in the J seam occurs in two or three thin (50mm) mudstone bands which are
much harder than the friable vitrinite which comprises 90 to 92% of the coal. It is expected that the average 13% ROM
ash can be reduced to less than 7% ash by screening alone.
Bearing in mind the BBM exploration experience of washing coal cores at 1.6sg provided 85% yield at 5 to 6% ash, this
is not an unreasonable expectation.
Coal with 7% ash, combined with the high swelling index, low sulphur and ultra-low phosphorus, will be easily marketed
compared with most coking coals on the market.
The elimination of the need for water only jig washing will be a significant simplification of the processing of coking coal
from BBM and will enable it to be relocated as the mining operation advances to minimise ROM coal haul distances.
The coal processing plant will be constructed to enable the subsequent addition of a coal washing jig should it be
determined that it will be more economical to produce a lower (5 to 6%) ash product.
SHALLOW DRAFT BARGING
During the year a detailed Bathymetric Survey of 400km of the Barito River was completed jointly by Cokal and HSM
Marine. The area surveyed included the three shortlisted ISP and barge loading sites at Bumban and the bridge at Muara
Teweh. The detailed survey provided critical information required for infrastructure development associated with barge
loading and operation
This indicated that the site furthest downstream was preferred as a site for the barge loader when viewed from the
water side only. However this site will be subject to regular flooding, an important parameter to consider in the Upper
Barito River. A fourth site further upstream, not included in the bathymetric survey, looks favourable from the land
side. This is now being assessed. It is likely a further bathymetric survey will be required.
The bathymetric survey identified an acceptable navigation channel for shallow draft self-propelled barges from the
jetty sites being considered to below the Muara Teweh bridge, at which point the coal will be transferred into 8,000t
barges for the remainder of the voyage.
HSM has finalised its design of shallow draft 3,000t self-propelled barges to provide year round transport of coal to
below the Muara Teweh Bridge.
3,000t Self Propelled Shallow Draft Barge Schematic
COKAL LIMITED Annual Report 2020 | Page 9
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Review of Operations
The main design elements of these barges include:
• Deck mounted azimuth thrusters which rotate 3600 to propel and steer the barge;
• Bow thruster to assist directing the bow in the preferred navigation channel;
• Forward controls for optimum visibility and control;
• Operates fully loaded in 3m water depth, partly loaded in shallower water.
Self-Propelled Shallow Draft Barge
These 100m long barges will be able to rotate in a little over their length to be highly maneuverable. This will be valuable
in negotiating passage under bridges and tight bends in the navigable river channel.
HSM has designed a custom 8,000t floating transfer vessel to be moored at a point in the river just below the Muara
Teweh Bridge.
MINE OPERATIONS STAFF
Cokal/BBM has appointed the following senior mine operations staff in preparation for the imminent commencement
of mining operations at its BBM mine in Central Kalimantan. This team will integrate with existing staff to plan and
manage Cokal's BBM and other mines which will be operated mainly by contractors.
General Manager Mines: Masruri Yahya joined Cokal from PT Sriwijaya Bara Priharum where he was Operational and
Technical Director. Masruri has 31 years mining experience with 17 years high level management and 14 years’
experience in all aspects of mining including mine engineering, mine operations, SHE and Permitting. His distinguished
and varied career includes Chief Operating Officer for PT Darma Henwa Tbk, experience in USA and Indonesia with PT
BHP Coal Indonesia/PTArutmin Indonesia, including Senakin Mine, and as a Director at PT Saka Technology Indonesia.
He was Mine Manager/Kepala Teknik Tambang at PT Arutmin Indonesia's Asam-Asam mine in South Kalimantan where
he became Regional Mine Manager and Head of Mine Engineering to complete all infrastructure facilities at the mine
and port and then became Chief Operating Officer.
Senior Mining Engineer: Muhamad Arie Cahyono joined Cokal from PT Thiess Contractor Indonesia where he was
Senior Engineer Mine Plan Technical Service in Jakarta. Arie has 15 years mining experience including six years with PT
Gunung Bayan Resources Tbk where he worked in all aspects of the mining operation including validating geological
models, developing pit and dump designs and dewatering strategies and ensuring mining contractors adhered to the
company's mine plans. He is an expert user of mining and geological modeling software used by Cokal and is competent
to evaluate resources and reserves.
COKAL LIMITED Annual Report 2020 | Page 10
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Review of Operations
Senior Geologist: Luki Wilianto joined Cokal from PT Thiess Contractors Indonesia where he was the Senior Reconcile
Geologist. Luki has 15 years mining experience with extensive expertise in deposit modeling and resource calculations.
While with PT Wahana Baratama Mining in South Kalimantan, a member of the Bayan Resources group, he managed
the coal quality of mine production by contractors, created and maintained geological models, incorporated field data
into the model, estimated resources and reconciled reserves between model and actual. Luki is competent to evaluate
resources for Cokal.
Senior Civil Engineer: Loke Cherng Huei joined Cokal to guide its development and construction of facilities for BBM.
Loke has 33 years’ experience in construction, mining and project management. Most recently he has been a Director
of Desaria Plantations and General manager of Desria Properties in Malaysia.
Chief Surveyor: Andri Ferdinand joined Cokal from Desaria Sdn Bhd. He has over 14 years survey experience using
advanced technology and remote sensing software for post processing data. He also has community development and
public relations capability.
Senior Surveyor: Tee Kok Hui joined Cokal from Island and Partners Sdn Bhd. He has 41 years’ experience in many
aspects of the construction industry. For Cokal he is managing survey teams preparing the data for road, port and mine
design.
CEO Jim Coleman welcomed these experienced staff who joined the Cokal team and are preparing to embark on the
development of the BBM mine and the exploration of the TBAR deposit. This addition to our technical and operational
team provides the backbone Cokal needed to bring to fruition the development of the valuable assets it holds in Central
Kalimantan.
CORPORATE ACTIVITY
BT Bara Mineral Asri (BMA)
BMA has contributed US$2 million to Cokal to be repaid from the sale of coal when mining commences. This will be
paid at US$10/t for coal sales at US$100/t or greater and 10%/t for coal sold at less than US$100/t.
BMA indicated last year it will submit a revised proposal for cooperation but so far this has not been received.
Aahana Global Resources and Investment Pte Ltd (AGRI)
During the 2019 financial year Aahana Mineral Resources SDN BHD (AMR), an associate company of Aahana Global
Resources & Investment Pte Ltd (AGRI), completed the acquisition of a substantial shareholding in Cokal Limited.
AMR/AGRI is now the largest single shareholder in Cokal.
In April 2019 AGRI nominated its first director to be appointed to the Cokal Limited board as Mr. Karan Bangur. Mr.
Bangur is the CEO of Aahana Global Resources & Investment Pte Ltd and has over 10 years’ experience in the South East
Asian region in mining and resources companies. He is a most welcome and valuable addition to our team.
AGRI, under AMR, fully underwrote the Cokal Entitlement Offer to raise approximately AU$5.1 Million that completed
in August 2019. Further to this AGRI is proceeding with discussions with the Company to arrange a suitable financing
package for the immediate development of the BBM Coking Coal project.
AGRI appointed its second Board member to Cokal Limited, Mr David (Allen) Delbridge. Allen has a Bachelors degree in
Mining Engineering (University of NSW, Australia) with Honours and has over 30 years’ experience in the mining
industry. He is a member of PERHAPI and the AusIMM, and a recognised competent person under the KCMI code as
well as for JORC reserve statements for open cut coal.
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Review of Operations
Allen has international experience, working as an expatriate in Indonesia where he led a team of local employees and
gained significant site operations experience. He has been responsible for short term compliance and long-term
development and strategic planning across many different operations and minerals.
Allen’s coal mining experience adds to the Board’s technical and operational knowhow, and his Indonesian coal mining
experience strengthens the Company’s capability in operating in its key area of operations in Kalimantan. He has
provided valuable advice to the mining team.
Krakatau National Resources (Krakatau)
Meetings were held with senior management of Krakatau to discuss the future sale to them of both PCI coal and coking
coal. Krakatau indicated its PCI capable blast furnace will require 7,000 to 10,000t/month PCI coal.
They requested a 10kg sample of our PCI coal which was provided and analysed. Favourable comment was subsequently
received from Krakatau. Liaison is ongoing.
Krakatau is currently obtaining its PCI coal from Australia. If they take delivery of BBM PCI coal in the upper Barito River,
as they have done previously for others, Cokal may be able to negotiate an arrangement attractive for both parties.
Krakatau Steel has presented the opportunity to work together on their met coke plant as BBM provides them a
domestic and reliable source of raw material once operational. Discussions are ongoing.
Conversion of Balance of Platinum Debt to Royalty
During the year the Company consented to the assignment of its Blumont Loan and Northrock Loan (together the
“Platinum Loans”) to Alpine Invest Holdings Ltd. Cokal has agreed to the assignment on the following terms:
•
•
•
each of the Subsequent Conditions for the conversion of the Platinum Loans to a royalty is irrevocably satisfied
or otherwise waived, resulting in the debt being discharged;
the royalty/commission payable to Alpine will be the greater of:
o USD 10,000 per month; and
o USD 2.00 per tonne of coal sold by BBM and TBAR on a monthly basis; and
the maximum royalty payment of US$40million remains the same and will be payable through the first 20
million tonnes of coal produced and sold by both BBM and TBAR.
Short-Term Debt Facility
In May 2020 Cokal raised a short-term debt facility totalling US $300,000 from Aahana Minerals Resources SDN BHD.
The facility is unsecured and interest is calculated as Singapore Interbank Offered Rate (SIBOR) + 3% per annum. The
facility will be used to fund activities to commence initial road works preparations and for working capital. As at 30 June
2020, $ Nil amount of this facility has been utilised.
Entitlement Offer
In June 2019 the Company announced a fully underwritten non-renounceable entitlement offer of one (1) new share
for every eight (8) Cokal shares held at an issue price of AU$0.05 per new share to raise approximately AU$4.7 million
(US$3.0 million) before costs. At the closing date of the entitlement offer shareholders had taken up approximately
AU $1.7 million. The directors placed some of the shortfall with the remainder placed with the Company’s major
shareholder and underwriter, Aahana Global Resources & Investment Pte Ltd. The funding raised is being used towards
current operating costs, payment of regulatory dues, trade creditors, initial infrastructure development and upgrading
of existing facilities at the BBM mine site.
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Conversion of Vendor Payment to Royalty
As part of the Group’s acquisition of its interest in the BBM project, it was agreed that an amount of US$10.0 million would
be payable within 30 days of the issue of the Production/ Operations IUP (mining license granted under the Indonesian New
Mining Law). On 1 May 2013, the Production/Operations IUP was granted but the payment to the vendor was deferred
pending the issuance of the Forestry Production Permit (required to commence the construction and production). On 15
August 2015, Cokal received BBM’s Forestry Production Permit.
On 3 March 2016, the Group executed a variation letter with the vendor whereby the parties agreed the obligation for $10.0
million payment would be triggered when Cokal had sufficient funds for commencement of the construction/ development of
the BBM project.
During the year the Company entered into a further agreement with the vendor of BBM for vendor payments due on
commencement of production. It has now been agreed that an amount of US$10.5 million will be paid via:
1. US$200,000 within 30 days of signing the agreement;
2. During the first and second year of coal sales to a third party, monthly at a rate of US$2 per tonne of coal sold;
3. From the third year of coal sales to a third party, monthly at a rate of US$3 per tonne of coal sold.
Payments under items 2 and 3 are to total US$10.3 million.
Company Secretary
The Company appointed Ms Yuan Yuan (Miranda) as joint Company Secretary during the year.
COVID-19
Both Indonesian and Australian operations have responded to the COVID-19 virus pandemic. Staff and contractors have
been minimally impacted and operations continue as planned. There have been some delays with finalising contracts
due to travel restrictions, with analysis of contractor bids for mining operations and finalisation of the infrastructure
agreement with China Rail delayed.
The Company has a focus on the well-being of its staff, contractors and the broader community and has implemented
measures to ensure their well-being including; health screening and temperature monitoring, spatial distancing
protocols, a high level of hygiene, change in flow of staff to and from the local community, and the minimisation of staff
in the Jakarta and Sydney administrative offices.
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Directors' Report
Your Directors present their report for the year ended 30
June 2020.
The following persons were Directors of Cokal Limited
(“Group”, “consolidated entity” or “Cokal”) during the
financial year and up to the date of this report, unless
otherwise stated:
Domenic Martino, Non-Executive Chairman
(Appointed Director on 24 December 2010 and
Chairman on 27 January 2017)
B. Bus, FCPA
Mr. Martino, 64 is a Chartered Accountant and an
experienced director of ASX listed companies. Previously
CEO of Deloitte Touch Tohmatsu in Australia, he has
significant experience in the development of "micro-cap"
companies.
• Former CEO Deloitte Touche Tohmatsu Australia.
• Key player in the re-birth of a broad grouping of ASX
companies including Sydney Gas, Pan Asia, Clean
Global Energy, NuEnergy Capital.
• Strong reputation in China.
• Lengthy track record of operating
in Indonesia,
successfully closed key energy and resources deals
with key local players.
• Proven track record in capital raisings across a range of
markets.
During the past three years Domenic has also served as a
Director of the following ASX listed companies:
• PYX Resources Limited (appointed 3 August 2012,
resigned 31 January 2020)
Patrick Hanna, Non-Executive Director
(Appointed on 24 December 2010)
B. Applied Science (Geology), CPI, FAusIMM
Mr Hanna has over 40 years’ experience as a coal geologist
in the areas of exploration and evaluation including
planning, budgeting and managing drilling programs in
Australia and Indonesia, gained since graduating from the
University of New South Wales in 1976. Mr Hanna has
authored and co-authored numerous coal
industry
publications.
• Geologist, 67, over 40 years’ experience all in coal.
• Extensive experience in Indonesian coal.
• Exploration Manager for Riversdale Mining, principal
responsibility for discovery and documentation of new
coking coal basin in Mozambique.
• Ex-member of JORC committee.
• Principal Geologist SRK Australia for 6 years.
• Author of 19 technical publications.
• Reviewed and consulted on over 40 coal projects
globally.
During the past three years Patrick has not served as a
director of another listed company.
Karan Bangur, Non-Executive Director
(Appointed on 10 April 2019)
BCom
Mr Bangur, 35 has over a decade of experience in
operating mining and logistics projects in South East Asia.
He is well experienced and familiar with Indonesian mining
and general laws relating to on ground operations due to
Indonesia.
in several projects
his experience
in
Current ongoing and previous projects include:
• Operations of thermal coal mine in Tanah Grogot, East
Kalimantan in capacity of financier.
• Operating fleet of HEMM (Heavy Earth Moving
Equipment) in thermal coal mine project in Tarakan,
North Kalimantan in capacity of owner.
• He currently serves as Managing Director of Aahana
Global Resources & Investment Pte Ltd, which is
primarily an investment and holding Co incorporated
in Singapore 2008- Present.
• He serves as Director in Aahana Mineral Resources Sdn
Bhd, which is the single majority shareholder in Cokal
Ltd. 2019 - Present.
• Previous assignments involve evaluation and planning
of Iron Ore, Bauxite Ore and Graphite concentrate
recovery projects in Indonesia.
• Previous projects
logistics and port
include
development in Indonesia and other parts of SE Asia.
• Development and operating Iron Ore tenement in
Malaysia including HEMM fleet management and
rental services.
David (Allen) Delbridge, Non-Executive Director
(Appointed on 17 March 2020)
B.Mining Engineering, PERHAPI, AusIMM
Mr Delbridge has over 30 years’ experience in the mining
industry. He is a recognised competent person under the
KCMI code as well as for JORC reserve statement for open
cut coal. He has international experience, working for over
7 years as an expatriate in Indonesia. He has significant on-
site operations experience,
interactively providing
practical and technical direction and team leadership for
maintaining and improving mining operations at a senior
leadership level.
Current ongoing and previous projects include:
• Worked at Citic Pacific Mining on its Sino Iron Ore
project in Western Australia
• Worked at Jiujiang Mining Australia Pty Ltd on its Cairn
Hill project in South Australia
• Worked at Bayan Resources Group as Manager – Mine
Planning and Development in Jakarta with operational
sites in Kalimantan
COKAL LIMITED Annual Report 2020 | Page 14
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The following person was Chief Operating Officer of Cokal
Limited (“Group”, “consolidated entity” or “Cokal”) during
the financial year and up to the date of this report, unless
otherwise stated:
Gerhardus (Garry) Kielenstyn, Executive Director
(Appointed 27 January 2017, Resigned 21 August
2019)
Mr. Kielenstyn, 65 has been a member of the senior
management team in the capacity of Chief Operating
Officer since June 2016 and prior to that was Cokal’s
Indonesian Country Manager / President Director PT Cokal
(PT Cokal is a 100% owned subsidiary of Cokal) since May
2013.
Mr. Kielenstyn is an expatriate based in Kalimantan, he is
a veteran of the Indonesian mining and civil contracting
industries. His first Indonesian based role was in the 1974
and has been living and working in country since 1990. His
previous roles include:
• Project Manager and Area Manager with Petrosea one
of Indonesia’s biggest mining and civil contractors
• Construction Manager, Mining Manager, Operations
Manager, General Manager and Resident Manager for
well recognized Indonesian Mining Companies such as
PT PT Indo Muro Kencana / Straits Resources, PT Yuga
Eka Surya, PT Ganda Multi Energi and PT Baramulti
Sugih Sentosa.
Garry has a strong track record for bringing projects
through construction to production in remote parts of
Indonesia. Importantly he has a long and successful track
record in the Murung Raya regency where Cokal’s premier
Bumi Barito Mineral (BBM) project is located.
Mr James (Jim) Coleman is Chief executive Officer
whose details are below.
James (Jim) Coleman, Chief Executive Officer
(Appointed on 27 July 2018)
B. Eng (Hons, Mining), FAusIMM
Mr Coleman, 74 has a proven 51-year track record in
corporate management of operations for large successful
companies including Riversdale Mining, The Griffin Group,
The Electricity Trust of South Australia, Utah Development
Company and Rio Tinto.
He has led multi-faceted teams and consortia for large coal
projects in developing countries and also specialised in
deep mines in soft saturated strata. Mr Coleman was
responsible for the development of Thailand’s 14 million
tonnes per annum coal mine which feeds directly into
EGAT’s on-site power station in northern Thailand.
As a mining engineer, he has over 50 years’ experience in
open cut and underground mining specialising in mine
management, project development and operation using a
variety of equipment including extensive application of in-
pit crushing and conveying systems. He designed strategic
mine planning to optimise economic returns for various
coal operations. He was also responsible for the
integrated projects
in Australia,
development of
Mozambique, Thailand, The Philippines,
India and
throughout SE Asia. Mr Coleman has specific expertise in
application of selective mining systems for low ash high
quality coals to minimise dilution.
Jim possesses a high awareness in the application of
shallow river barging systems to transport coal from inland
projects over long distances. He participated in the
successful evaluation of 500 km shallow water barging on
the Zambezi River in Mozambique for the transportation
of coking coal from Riversdale’s Benga project to off-shore
mother vessels. This experience is in line with Cokal’s plans
to use shallow-river barging on the Barito River to deliver
the coking coal in good condition to the nearby Asian
market place.
Through the 1980s and 1990s, he owned and managed a
highly successful mining consulting business (Coleman and
Associates) employing some 40 mining professionals and
managing operations concurrently throughout Australia
and in five countries including Australian Government aid
funded projects in SE Asia.
The following persons were Company Secretaries of Cokal
Limited (“Group”, “consolidated entity” or “Cokal”) during
the financial year and up to the date of this report, unless
otherwise stated:
Louisa Martino (Youens), Joint Company Secretary
(Appointed on 9 August 2017)
BCom, CA
Ms Martino provides company secretarial and accounting
services to a number of listed entities through Indian
Ocean Capital.
Previously Ms Martino worked for a corporate finance
company, assisting with company compliance (ASIC and
ASX) and capital raisings. She also has experience working
for a government organisation
its Business
Development division where she performed reviews of
business opportunities and prepared business case
analysis for those seeking Government funding.
in
Prior to that, Ms Martino worked for a major accounting
firm in Perth, London and Sydney where she provided
corporate advisory services, predominantly on IPOs and
also performed due diligence reviews.
She has a Bachelor of Commerce from the University of
Western Australia, is a member of Chartered Accountants
Australia and New Zealand and a member of the Financial
Services Institute of Australasia (FINSIA).
Miranda Yuan, Joint Company Secretary
(Appointed 1 July 2020)
MFin, MCom, CPA
Ms Yuan provides comprehensive accounting services and
auditing assistance to a number of public and listed
companies through Indian Ocean Corporate. She has
experience in company secretarial work in a broad range
of ASX listed companies. She also has experience working
COKAL LIMITED Annual Report 2020 | Page 15
For personal use only
Directors' Report
as a Finance Analyst to provide corporate advisory services
for cross-border M&A, capital raisings, IPOs/RTOs and to
perform due diligence reviews.
Ms Yuan is an honours graduate in Finance from Aberdeen
University, she holds a Master degree of Commerce in
Finance from the University of New South of Wales and
Master degree of Professional Accounting from Charles
Sturt University. Ms Yuan is an Associate member of
Certified Practicing Accountant (CPA) Australia.
Interests in Shares and Options
At the date of this report, the interests of the Directors in
the shares of Cokal Limited are shown in the table below.
Domenic Martino
Patrick Hanna
Karan Bangur
David Delbridge
Ordinary Shares
Options
41,688,512
27,900,000
-
-
184,641,719
37,500,000
-
-
Principal Activities
The principal activities of the consolidated entity during
the financial year were focused on the identification and
development of coal within the highly prospective Central
Kalimantan coking coal basin in Indonesia.
Operating Results
For the year ended 30 June 2020, the loss for the
consolidated entity after providing for income tax was
US$2,573,822 (2019: US$1,855,717).
Dividends Paid or Recommended
There were no dividends paid or recommended during the
financial year.
Review of Operations
Detailed comments on operations and exploration
programs up to the date of this report are included
separately
in the Annual Report under Review of
Operations.
Review of Financial Condition
Capital Structure
At 30 June 2020, the consolidated entity had 923,382,313
ordinary shares and 96,000,000 unlisted options on issue.
Financial Position
The net assets of the consolidated entity have increased
by US$908,150 from US$7,946,720 at 30 June 2019 to
US$8,853,708 at 30 June 2020.
Treasury Policy
The consolidated entity does not have a formally
established treasury function. The Board is responsible for
managing the consolidated entity’s finance facilities.
Some goods and services purchased by the consolidated
entity, along with the payments made to the vendors of
the Kalimantan coal projects, are in foreign currencies (AU
dollars or Indonesian Rupiah).
The consolidated entity does not currently undertake
hedging of any kind.
to
Liquidity and Funding
The consolidated entity believes it has sufficient access to
funds
and
exploration/development activities, and to allow the
consolidated entity to take advantage of favourable
business opportunities, not specifically budgeted for, or to
fund unforeseen expenditure.
operations
finance
its
Significant Changes in the State of
Affairs
There have been no significant changes in the Group’s
state of affairs during the year ended 30 June 2020.
Significant Events after
Reporting Date
the
There have been no significant events after reporting
date.
Future Developments, Prospects
and Business Strategies
Likely developments in the operations of the consolidated
entity and the expected results of those operations in
subsequent financial years have been discussed where
appropriate in the Annual Report under Review of
Operations.
There are no further developments of which the Directors
are aware which could be expected to affect the results of
the consolidated entity’s operations
in subsequent
financial years.
COKAL LIMITED Annual Report 2020 | Page 16
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Directors' Report
Business Results
The prospects of the Group in developing its properties in
Indonesia may be affected by a number of factors. These
factors are similar to most exploration companies moving
through the exploration phase and attempting to get
projects into production. Some of these factors include:
•
Exploration - the results of the exploration activities
at the BBM project and the tenements in Central
Kalimantan may be such that the estimated resources
are insufficient to justify the financial viability of the
projects.
•
•
Regulatory and Sovereign - the Group operates in
Indonesia and deals with local regulatory authorities
in relation to the operation and development of its
properties. The Group may not achieve the required
they may be
local
significantly delayed enabling
it to commence
production.
regulatory approvals, or
Funding - the Group will require additional funding to
move from the exploration/development phase to
the production phase of the BBM project and the
tenements in Central Kalimantan. There is no
certainty that the Group will have access to available
financial resources sufficient to fund its capital costs
and/or operating costs at that time.
• Development - the Group is involved in developing
greenfield projects in Indonesia which could result in
capital costs and/or operating costs at levels which do
not justify the economic development of the project.
• Market - there are numerous factors involved with
early stage development of its properties such as the
BBM project, including variance in commodity price
and labour costs which can result in projects being
uneconomical.
in relation to
Environmental Issues
The consolidated entity is subject to environmental
regulation
its exploration activities.
Indonesia where the Group’s main project is located in the
principal laws are Act No.41 of 1999 regarding Forestry
(the Forestry Law), Act No.4 of 2009 regarding Minerals
and Coal Mining (the Mining Law) and Act No. 32 of 2009
regarding Environmental Protection and Management
(the Environment Law). There are no matters that have
arisen in relation to environmental issues up to the date
of this report.
Non-Audit Services
No non-audit services were provided by Cokal’s auditor,
Hall Chadwick during the financial year ended 30 June
2020 (2019: Nil).
Remuneration Report (Audited)
This remuneration report for the year ended 30 June 2020
outlines the remuneration arrangements of the Group in
accordance with the requirements of the Corporations Act
2001 (the Act) and its regulations. This information has
been audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration
arrangements for key management personnel (KMP) who
are defined as those persons having authority and
responsibility for planning, directing and controlling the
major activities of the Group, directly or indirectly,
including any director (whether executive or otherwise) of
the consolidated entity.
For the purposes of this report, the term “executive”
includes the Chief Executive Officer, directors and other
senior management executives of the Group.
Remuneration report approval at FY19 AGM
The remuneration report for the 2019 financial year
received positive shareholder support with proxy votes of
92.8% in favour (of shares voted).
Remuneration Policy
The performance of the consolidated entity depends upon
the quality of its directors and executives. To prosper, the
consolidated entity must attract, motivate, and retain
highly skilled directors and executives.
The Board does not presently have a Remuneration and
Nomination Committee. The directors consider that the
consolidated entity is not of a size, nor are its affairs of
such complexity, as to justify the formation of any other
special or separate committee at this time. All matters
which might be dealt with by such a committee are
reviewed by the directors meeting as a Board.
in carrying out the functions of the
The Board,
Remuneration and Nomination Committee, is responsible
for
the compensation
arrangements of senior executives and consultants.
reviewing and negotiating
in carrying out the functions of the
The Board,
Remuneration and Nomination Committee, assess the
appropriateness of
the nature and amount of
remuneration of such officers on a periodic basis by
reference to relevant employment market conditions with
the overall objective of ensuring maximum stakeholder
benefit from the retention of a high quality Board and
executive team. Such officers are given the opportunity to
receive their base remuneration in a variety of forms
including cash and fringe benefits. It is intended that the
manner of payments chosen will be optimal for the
recipient without creating undue cost for the consolidated
entity.
The consolidated entity aims to reward the Executive
Directors and senior management with a level and mix of
remuneration commensurate with their position and
responsibilities within the consolidated entity. The Board’s
policy is to align director and executive objectives with
shareholder and business objectives by providing a fixed
remuneration component and offering short and/or long-
term incentives as appropriate.
In accordance with best practice corporate governance,
the structure of non-executive directors, Executive
Directors and senior management remuneration
is
separate and distinct.
COKAL LIMITED Annual Report 2020 | Page 17
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Directors' Report
Non-executive Director Remuneration
The Board seeks to set aggregate remuneration at a level which provides the consolidated entity with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
The Constitution of Cokal Limited and the ASX Listing Rules specify that the non-executive directors are entitled to
remuneration as determined by the consolidated entity in a general meeting to be apportioned among them in such manner
as the Directors agree and, in default of agreement, equally. The aggregate remuneration currently determined by Cokal
Limited is AU$500,000 per annum. Additionally, non-executive directors will be entitled to be reimbursed for properly incurred
expenses.
If a non-executive director performs extra services, which in the opinion of the directors are outside the scope of the ordinary
duties of the director, the consolidated entity may remunerate that director by payment of a fixed sum determined by the
directors in addition to or instead of the remuneration referred to above. However, no payment can be made if the effect
would be to exceed the maximum aggregate amount payable to non-executive directors. A non-executive director is entitled
to be paid travel and other expenses properly incurred by them in attending directors’ or general meetings of Cokal Limited
or otherwise in connection with the business of the consolidated entity.
The remuneration of the non-executive directors for the year ending 30 June 2020 is detailed in this Remuneration Report.
reward Executives for consolidated entity and individual performance;
Executive Directors and Senior Management Remuneration
The consolidated entity aims to reward the Executive Directors and senior management with a level and mix of remuneration
commensurate with their position and responsibilities within the consolidated entity so as to:
•
• align the interests of executives with those of shareholders;
•
• ensure total remuneration is competitive by market standards.
The remuneration of the Executive Directors and senior management may from time to time be fixed by the Board. As noted
above, the Board’s policy is to align the Executive Directors and senior management objectives with shareholder and business
objectives by providing a fixed remuneration component and offering short and/or long-term incentives as appropriate.
link reward with the strategic goals and performance of the consolidated entity; and
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the position
and is competitive in the market. Short-term incentives may be provided in the form of performance bonuses. Fixed
remuneration and short-term incentives are reviewed annually by the Board, in carrying out the functions of the Remuneration
Committee, and the process consists of a review of Company-wide and individual performance, relevant comparative
remuneration in the market and internal, and where appropriate, external advice on policies and practices.
Senior management are given the opportunity to receive their fixed remuneration in a variety of forms including cash and
fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be
optimal for the recipient without creating undue cost for the consolidated entity.
Long-term incentives may be provided in the form of options and/or the issue of shares following the completion of
satisfactory time periods of service. The consolidated entity uses employee continuity of service and the future share price to
align comparative shareholder return and reward for executives.
The remuneration of the Executive Directors and senior management for the year ending 30 June 2020 is detailed in this
Remuneration Report.
Relationship between Remuneration and Consolidated Entity Performance
During the financial year, the consolidated entity has generated losses as its principal activity was exploration and
development within the Central Kalimantan coking coal basin in Indonesia.
The following table shows the performances of the consolidated entity for the last five years:
Year-end (30 June)
Share price (US$)
2020
0.04
Basic (loss) per share (US cents)
(0.28)
2019
0.03
(0.26)
2018
0.03
(1.18)
2017
0.04
(1.96)
2016
0.02
(6.07)
There were no dividends paid during the year.
As the consolidated entity was still in the exploration and development stage during the financial year, the link between
remuneration, consolidated entity performance and shareholder wealth is tenuous. Share prices are subject to the influence
of coal prices and market sentiment toward the sector, and as such increases or decreases may occur quite independent of
executive performance or remuneration.
Employment and Services Agreements
It is the Board’s policy that employment and/or services agreements are entered into with all Executive Directors, senior
management, and employees.
COKAL LIMITED Annual Report 2020 | Page 18
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Directors' Report
Agreements do not provide
for pre-determining
compensation values or method of payment. Rather the
amount of compensation is determined by the Board,
where applicable with the remuneration policy set out
above.
KMP are entitled to their statutory entitlements, where
applicable of accrued annual leave and long service leave
together with any superannuation on termination. No
other termination payments are payable.
Former Executive Director
Gerhardus Kielenstyn
Mr Kielynstyn was appointed to the role of Chief Operating
Officer (COO) effective 24th of June 2016 and Executive
Director on 27 January 2017. Mr Kielenstyn resigned on 21
August 2019.
Cokal Limited had an employment agreement with
Mr Gerhardus Kielenstyn for the position of Indonesian
Country Manager which commenced on 1 May 2013. Mr
Kielenstyn received an annual base salary up to
US$480,000, inclusive of benefits.
Mr Kielenstyn was eligible for an annual performance
bonus on the discretion of the CEO, as the Group is an
early stage entity.
The employment agreement was able to be terminated at
any time by the Company for Cause, being serious
misconduct or the happening of various events in respect
of Mr Kielenstyn’s conduct.
The agreement may be terminated with 4 months’ notice
or at any time with cause.
Details of Key Management Personnel (KMP)
(i) Directors
Domenic Martino, Chairman and Non-Executive
Director (appointed Non-Executive Director 24
December 2010, appointed Chairman on 27 January
2017)
Patrick Hanna, Non-Executive Director
(appointed 24 December 2010)
Gerhardus Kielenstyn, Executive Director -
Indonesia Country Manager (appointed 1 May 2013
– 23 June 2016, appointed COO 24th June 2016,
appointed director 27 January 2017, resigned 21
August 2019)
Karan Bangur, Non-Executive Director (appointed
10 April 2019)
David Delbridge, Non-Executive Director (appointed
17 March 2020)
(ii) Senior Management
James Coleman, Chief Executive Officer (appointed
27 July 2018)
Teuku Juliansyah, CFO (appointed 24 June 2016,
resigned 15 November 2018) and Joint Company
Secretary (appointed 1 September 2015, resigned
15 November 2018)
Senior Management
Chief Executive Officer
Mr James Coleman was appointed Chief Executive Officer
on 27th of July 2018. The Company has entered into an
agreement with Mr Coleman.
Remuneration Details
The following table of benefits and payments details, in
respect to the financial years ended 30 June 2020 and
2019, the component of remuneration for each key
management person of the consolidated entity:
Short-Term Benefits
Post-
Employment
Termination
Benefits
Share-based
payments
Total
2020
Salary &
Fees
Cash
Bonus
Other short
-term
benefits
Superannuation
US$
US$
US$
US$
US$
Equity-
settled
(options)
US$
Cash-settled
US$
US$
%
Remuneration
as equity
Directors
Domenic Martino
Patrick Hanna
Karan Bangur*
David Delbridge*^
53,171
24,169
113,814
26,854
Gerhardus Kielenstyn**
-
Total
218,008
Senior Management
James Coleman
Total
131,473
131,473
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,768
-
-
4,768
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
55,700
55,700
-
-
-
-
-
-
-
-
53,171
24,169
118,582
26,854
-
222,776
187,173
187,173
-
-
-
-
-
-
-
-
* In addition to director fees, Mr Bangur and Mr Delbridge receive fees for services provided to BBM which are included in the schedule
^ Appointed 17 March 2020
** Resigned on 21 August 2019
COKAL LIMITED Annual Report 2020 | Page 19
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Directors' Report
Short-Term Benefits
Post-
Employment
Termination
Benefits
Share-based
payments
Total
2019
Salary &
Fees
Cash
Bonus
Other short
-term
benefits
Superannuation
US$
US$
US$
US$
US$
Cash-settled
US$
US$
%
Remuneration
as equity
Directors
Domenic Martino
Patrick Hanna
Karan Bangur *^
Gerhardus Kielenstyn
Total
Senior Management
James Coleman ***
Teuku Juliansyah #
Total
77,760
71,280
30,043
209,630
388,713
165,000
70,305
235,305
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,349
-
2,349
15,674
-
45,683
-
15,674
45,683
55,700
-
-
-
-
-
-
-
-
77,760
71,280
32,392
253,764
435,196
0%
0%
0%
17%
11%
236,374
115,988
24%
0%
352,362
16%
Equity-
settled
(options)
US$
-
-
-
44,134
44,134
55,700
-
-
-
-
-
-
* In addition to director fees, Mr Bangur received fees for services provided to BBM which are included in the schedule
^ Appointed 10 April 2019
*** Appointed as Chief Executive Officer on 27 July 2018
# Resigned on 15 November 2018
Cash Bonuses, Performance-related Bonuses and Share-based Payments
KMP and other executives may be paid cash bonuses or performance-related bonuses. Remuneration options on issue during
the 2020 financial year to KMP were as follows:
Remun-
eration
type
Grant date
Vesting
date
Number
Exercise
Price
US$
Grant
value
(per
option)
US$
Percentage
vested /
paid during
year
Percentage
forfeited/
cancelled
during year
Percentage
remaining
as
unvested
%
%
%
Expiry date
Consolidated entity KMP
Gerhardus
Kielenstyn
Gerhardus
Kielenstyn
James
Coleman
James
Coleman
James
Coleman
James
Coleman
Options
22/12/2017
Note 1 1,000,000
0.09
0.02
Options
22/12/2017
Note 2 4,000,000
0.12
0.02
Options
20/12/2018
Note 3 3,000,000
0.03
0.01
Options
Options
Options
20/12/2018
20/12/2018
20/12/2018
Note 4 3,000,000
0.04
0.01
Note 5 3,000,000
0.05
0.01
Note 6 5,000,000
0.07
0.01
-
-
-
-
-
-
Note 1: vesting on production of 100,000 tonnes of coal
Note 2: vesting on achieving a consistent production rate for three months of 45,000 tonnes of coal per month
Note 3: vesting on achieving a consistent production rate for three months of 20,000 tonnes of coal per month
Note 4: vesting on achieving a consistent production rate for three months of 40,000 tonnes of coal per month
Note 5: vesting upon commencement of shallow river barging
Note 6: vesting upon first shipment of coking coal from BBM
-
-
-
-
-
-
100%
22/12/2020
100%
22/12/2020
100%
22/12/2021
100%
22/12/2021
100%
22/12/2021
100%
22/12/2021
COKAL LIMITED Annual Report 2020 | Page 20
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Options holdings
Details of option held and share-based payments to KMP and other executives awarded and vested/unvested during the year
ended 30 June 2020 and 30 June 2019 are detailed in the table below:
Balance
1 July 2019
Granted as
Remuneration
Exercise
of Options
Net Change
Other
Balance
30 June 2020
Total vested
at 30 June
2020
Total vested
and
exercisable at
30 June 2020
Total vested and
unexercisable at
30 June 2020
Directors
Domenic Martino
Karan Bangur
Patrick Hanna
David Delbridge#
Gerhardus Kielenstyn^
Senior Management
James Coleman
Total
-
37,500,000
-
-
5,000,000
14,000,000
56,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 37,500,000
-
-
-
-
5,000,000
-
-
37,500,000
-
-
-
-
37,500,000
-
-
-
- 14,000,000
- 56,500,000
-
37,500,000
-
37,500,000
-
-
-
-
-
-
-
Balance
1 July 2018
Granted as
Remuneration
Exercise
of Options
Net Change
Other
Balance
30 June 2019
Total vested
at 30 June
2019
Total vested
and
exercisable at
30 June 2019
Total vested and
unexercisable at
30 June 2019
Directors
Domenic Martino
Karan Bangur^^
Patrick Hanna
Gerhardus Kielenstyn
Senior Management
James Coleman *
Teuku Juliansyah **
Total
-
-
-
9,000,000
-
-
-
-
500,000
9,500,000
14,000,000
-
14,000,000
-
-
-
-
-
-
-
-
37,500,000
-
(4,000,000)
-
37,500,000
-
5,000,000
-
(500,000)
(33,000,000)
14,000,000
-
56,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
# Appointed 17 March 2020
^ Resigned on 21 August 2019
^^ Appointed 10 April 2019.
* Appointed as Chief Executive Officer on 27 July 2018
** Resigned 15 November 2018
The options were issued to the director and senior management of Cokal Limited to align comparative shareholder return and
reward for director and senior management.
All options issued by Cokal Limited entitle the holder to one ordinary share in Cokal Limited for each option exercised.
All options granted as part of remuneration were granted for nil consideration. Once vested, options can be exercised at any
time up to the expiry date.
The consolidated entity does not currently have a policy prohibiting directors and executives from entering into arrangements
to protect the value of unvested options. No directors or executives have entered into contracts to hedge their exposure to
options awarded as part of their remuneration package.
Shareholdings
Details of ordinary shares held directly, indirectly or beneficially by KMP and their related parties are as follows:
Directors
Domenic Martino
Patrick Hanna
Karan Bangur
David Delbridge #
Garry Kielenstyn
Senior Management
James Coleman
Total
Balance
1 July 2019
Granted as
Remuneration
On Exercise
of Options
Net Change
Other
Balance
30 June 2020 ●
37,120,001
25,800,000
148,125,000
-
-
1,245,031
212,290,032
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,568,511
2,100,000
36,516,719
-
-
41,688,512
27,900,000
184,641,719
-
-
3,273,814
46,459,044
4,518,845
258,749,076
COKAL LIMITED Annual Report 2020 | Page 21
For personal use only
Directors' Report
Directors
Domenic Martino
Patrick Hanna
Karan Bangur ^^
Garry Kielenstyn ^
Senior Management
James Coleman *
Teuku Juliansyah **
Total
Balance
1 July 2018
Granted as
Remuneration
On Exercise
of Options
Net Change
Other
Balance
30 June 2019 ●
37,120,001
25,800,000
-
-
-
-
62,920,001
-
-
-
-
1,245,031
-
1,245,031
-
-
-
-
-
-
-
-
-
148,125,000
-
37,120,001
25,800,000
148,125,000
-
-
-
1,245,031
-
148,125,000
212,290,032
# Appointed 17 March 2020
^ Resigned on 21 August 2019 * Appointed as Chief Executive Officer on 27 July 2018
** Resigned 15 November 2018
^^ Appointed 10 April 2019
● If position vacated during the year, as at resignation date
Transactions with KMP and their related entities
Mr Domenic Martino
• As at 30 June 2020 director fees totaling US$72,338 (2019: US$182,724) remain outstanding to Mr Martino.
• As at 30 June 2020, Mr Martino was owed US$NIL (2019: US$2,242) for expenses paid on the Company’s behalf. This
amount is repayable on demand and does not accrue interest.
• On 9 August 2017 the Company entered into an agreement with Indian Ocean Corporate Pty Ltd, a company of which Mr
Martino is a director, for company secretarial services at a cost of AU$4,000 (excl GST) per month. The services are based
on normal commercial terms and conditions. As at 30 June 2020, company secretarial fees of US$NIL (2019: US$Nil)
remain outstanding. In addition, during the 2020 financial year, Indian Ocean Corporate Pty Ltd has provided corporate
advisory services totaling US$35,447 (2019: US$69,731) and assistance with the preparation of reports, totaling
US$25,847 (2019: US$46,550). An amount of US$8,493 (2019: US$15,400) was outstanding as at 30 June 2020
Mr Patrick Hanna
• As at 30 June 2020 director fees totaling US$86,436 (2019: US$156,622) remain outstanding to Mr Hanna.
• As at 30 June 2020 a loan of AUD$108,500 (US$72,842) (2019: US$76,981) was owing to Mr Hanna by the Company. This
loan was for working capital purposes, is repayable on demand and does not accrue interest.
Mr Karan Bangur
• As at 30 June 2020 director fees totaling US$13,427 (2019: US$NIL) remain outstanding to Mr Bangur.
• During the year Aahana Mineral Resources SDN BHD, a related party of Mr Bangur, underwrote the August 2019 Rights
•
Issue for which it received US$239,933 in fees.
In May 2020 Cokal entered into a short-term debt facility totalling US$ 300,000 with Aahana Minerals Resources SDN
BHD. The facility is unsecured and interest is calculated as Singapore Interbank Offered Rate (SIBOR) + 3% per annum.
The facility will be used to fund activities to commence initial road works preparations and for working capital. As at 30
June 2020, $ Nil amount of this facility has been utilised.
Mr David Delbridge
• As at 30 June 2020 director fees totaling US$6,714 (2019: US$Nil) remain outstanding to Mr Delbridge.
Mr Gerhardus Kielenstyn
• As at 30 June 2020 loans of US$NIL (2019: US$83,041) were owing to Mr Kielenstyn by the Company. These loans are
repayable on demand and do not accrue interest.
Mr James Coleman
• As at 30 June 2020 remuneration totaling US$75,527 (2019: US$165,675) remains outstanding to Mr Coleman.
END OF REMUNERATION REPORT
COKAL LIMITED Annual Report 2020 | Page 22
For personal use only
Directors' Report
Directors’ Meetings
The number of meetings of Directors held during the year and the number of meetings attended by each Director was as
follows:
Board
Number of meetings
held while in office
Meetings
attended
Domenic Martino
Pat Hanna
Karan Bangur
David Delbridge
Garry Kielenstyn
4
4
4
-
-
4
4
4
-
-
Indemnification and Insurance of Directors, Officers and Auditor
Each of the current Directors and Secretaries of Cokal Limited have entered into a Deed with Cokal Limited whereby Cokal
Limited has provided certain contractual rights of access to books and records of Cokal Limited to those Directors and
Secretaries.
Cokal Limited has insured all of the Directors of the consolidated entity. The contract of insurance prohibits the disclosure of
the nature of the liabilities covered and amount of the premium paid. The Corporations Act does not require disclosure of the
information in these circumstances.
To the extent permitted by law, the Company has agreed to indemnify its auditors, Hall Chadwick Pty Ltd, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Hall Chadwick Pty Ltd during or since the financial year.
Options
At 30 June 2020, there were 96,000,000 unissued ordinary shares under options as follows:
•
•
•
•
•
•
•
•
•
1,000,000 unlisted options exercisable at AU$0.10 on or before 19 September 2020
1,000,000 unlisted options exercisable at AU$0.12 on or before 22 December 2020 (vesting on production of 100,000
tonnes of coal)
4,000,000 unlisted options exercisable at AU$0.15 on or before 22 December 2020 (vesting on achieving a consistent
production rate for three months of 45,000 tonnes of coal per month)
75,000,000 unlisted options exercisable at AU$0.016 on or before 16 February 2023 (vesting on all Platinum Loans being
released and discharged under the Debt Restructure Transaction). As part of the debt restructure, it was agreed that
37.5 million of these options will not be exercised
1,000,000 unlisted options exercisable at AU$0.045 on or before 20 December 2021
3,000,000 unlisted options exercisable at AU$0.045 on or before 20 December 2021 (vesting upon production of 20,000
tonnes per month of coal (including PCI) for three consecutive months)
3,000,000 unlisted options exercisable at AU$0.055 on or before 20 December 2021 (vesting upon production of 40,000
tonnes per month of coal (including PCI) for three consecutive months)
3,000,000 unlisted options exercisable at AU$0.07 on or before 20 December 2021 (vesting upon commencement of
shallow river barging)
5,000,000 unlisted options exercisable at AU$0.10 on or before 20 December 2021 (vesting upon first shipment of coking
coal from BBM)
No option holder has any right under the options to participate in any other share issue of Cokal Limited or any other entity.
Subsequent to year end, no ordinary shares in Cokal Limited were issued as a result of the exercise of options.
COKAL LIMITED Annual Report 2020 | Page 23
For personal use only
Corporate Governance
In recognising the need for the highest standards of
corporate behaviour and accountability, the directors of
Cokal Limited support and have adhered to the principles
of corporate governance. Cokal Limited’s Corporate
Governance Statement has been made publicly available
on the Company’s website at: www.cokal.com.au.
This report is signed in accordance with a resolution of the
directors.
Directors' Report
Proceedings on Behalf of the
Consolidated Entity
No person has applied for leave of Court to bring
proceedings on behalf of the consolidated entity or
intervene in any proceedings to which the consolidated
entity is a party for the purposes of taking responsibility
on behalf of the consolidated entity for all or any part of
those proceedings.
The consolidated entity was not a party to any such
proceedings during the year.
Auditor’s Independence
Declaration
The Auditor’s Independence Declaration forms part of the
Directors’ Report and can be found on page 25.
Cokal Limited
Domenic Martino
Chairman
Sydney, 30 September 2020
COKAL LIMITED Annual Report 2020 | Page 24
For personal use only COKAL LIMITED
ABN 55 082 541 437
AND CONTROLLED ENTITIES
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF COKAL LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Cokal Limited. As the lead audit partner
for the audit of the financial report of Cokal Limited for the year ended 30 June 2020, 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 (NSW)
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 30 September 2020
For personal use only
Shareholder Information
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current as at 4 September 2020
(a) Distribution of Ordinary Shares and Options
The number of holders, by size of holding, in each class of security is:
Ordinary shares
Number of holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
358
116
214
516
449
Number of
shares
256,510
332,030
1,936,920
21,229,682
899,627,171
Total
1,653
923,382,313
The number of shareholders holding less than a marketable parcel (a total of 10,204 ordinary shares) is 690 on a share price of
AU$0.049.
Unlisted options
Unlisted options
Unlisted options
Unlisted options
(AU$0.10 @ 19/9/2020)
(AU$0.12 @ 22/12/2020)
(AU$0.15 @ 22/12/2020)
(AU$0.045 @ 20/12/2021)
Unlisted options
(AU$0.016 @ 20/02/2023)
No. of
holders
No. of
options
No. of
holders
No. of
options
No. of
holder
No. of
options
No. of
holder
No. of
options
No. of
holders
No. of
options
-
-
-
-
1
1
-
-
-
-
1,000,000
1,000,000
-
-
-
-
1
1
-
-
-
-
1,000,000
1,000,000
-
-
-
-
1
1
-
-
-
-
4,000,000
4,000,000
-
-
-
-
1
1
-
-
-
-
1,000,000
1,000,000
-
-
-
-
4
4
-
-
-
-
75,000,000
75,000,000
Unlisted options
Unlisted options
Unlisted options
Unlisted options
(AU$0.045 @ 20/12/2021)
(AU$0.055 @ 20/12/2021)
(AU$0.07 @ 20/12/2021)
(AU$0.10 @ 20/12/2021)
Unlisted options
(AU$0.05 @ 17/08/2023)
No. of
holders
No. of
options
No. of
holders
No. of
options
No. of
holder
No. of
options
No. of
holders
No. of
options
No. of
holders
No. of
options
-
-
-
-
1
1
-
-
-
-
3,000,000
3,000,000
-
-
-
-
1
1
-
-
-
-
3,000,000
3,000,000
-
-
-
-
1
1
-
-
-
-
3,000,000
3,000,000
-
-
-
-
1
1
-
-
-
-
5,000,000
5,000,000
-
-
-
-
2
2
-
-
-
-
15,000,000
15,000,000
1 – 1,000
1,001 –
5,000
5,001 –
10,000
10,001 –
100,000
100,001 and
over
Total
1 – 1,000
1,001 –
5,000
5,001 –
10,000
10,001 –
100,000
100,001 and
over
Total
COKAL LIMITED Annual Report 2020 | Page 26
For personal use only
Shareholder Information
(b) Twenty Largest Holders
The names of the twenty largest holders, in each class of quoted security (ordinary shares) are:
1 CITICORP NOMINEES PTY LIMITED
2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3 BNP PARIBAS NOMINEES PTY LTD
4 BNP PARIBAS NOMS PTY LTD
5 PH CAPITAL PTY LTD
6
TEKNIKS PUBLICATIONS PTY LTD
7 BATMAN MANAGEMENT GROUP PTY LTD
8 MRS LAURA LYNCH
9 GEBRUN PTY LTD
10 HORVATH INVESTMENTS PTY LTD
11 XIN HUA PTY LTD
12 MS KWAI LAN CHIN
13 MR MICHAEL CHRISTOPHER HORVATH
14 MR VASILIOS VOTSARIS
15
TJ SMOCK & CO PTY LTD
16
JP MORGAN NOMINEES AUSTRALIA PTY LIMITED
17 RICHARD BULMAN CONSULTING PTY LTD
18
LANNE PTY LTD
19 AMBER CLOUD PTY LTD
20 MR CHEE TAN
Top 20
Total
(c) Option Holders
The names of holders holding 20% or more of options on issue:
Number of shares
% of total shares
225,890,320
24.46%
53,488,539
34,457,075
32,368,993
27,000,000
17,800,000
17,737,977
17,500,000
17,500,000
13,046,799
12,631,200
11,800,000
11,086,486
10,098,253
10,000,000
8,876,141
8,668,980
8,420,800
8,000,000
7,466,517
553,838,078
923,382,313
5.79%
3.73%
3.50%
2.92%
1.93%
1.92%
1.90%
1.90%
1.41%
1.37%
1.28%
1.20%
1.09%
1.08%
0.96%
0.94%
0.91%
0.87%
0.81%
59.97%
100.00%
Unlisted options
Unlisted options
Unlisted options
Unlisted options
(AU$0.10 @ 19/9/2020)
(AU$0.12 @ 22/12/2020)
(AU$0.15 @ 22/12/2020)
(AU$0.016 @ 22/12/2020)
No. of options
No. of options
No. of options
No. of options
HELBRAUN HOLDINGS PTY LTD
1,000,000
-
-
MR GERHARDUS KIELENSTYN
AAHANA MINERAL RESOURCES
SDN BHD
NORTHROCK FINANCIAL LLC
TOTAL
Total options in class
-
-
-
1,000,000
1,000,000
1,000,000
4,000,000
-
-
1,000,000
1,000,000
-
-
4,000,000
4,000,000
-
-
37,500,000
28,924,426
66,424,426
75,000,000
COKAL LIMITED Annual Report 2020 | Page 27
For personal use only
Shareholder Information
Unlisted options
(AU$0.045 @
20/12/2021)
Unlisted options
Unlisted options
Unlisted options
Unlisted options
(AU$0.045 @
22/12/2021)
(AU$0.055 @
20/12/2021)
(AU$0.07 @
20/12/2021)
(AU$0.10 @
22/12/2021)
No. of options
No. of options
No. of options
No. of options
No. of options
LIGHTGLOW ENTERPRISES PTY LTD
FARINA PTY LTD
TOTAL
Total options in class
1,000,000
-
-
-
-
-
3,000,000
3,000,000
3,000,000
5,000,000
1,000,000
1,000,000
3,000,000
3,000,000
3,000,000
5,000,000
3,000,000
3,000,000
3,000,000
5,000,000
(d) Substantial shareholders
Substantial shareholders as shown in substantial shareholder notices received by Cokal are:
Name of Shareholder:
Aahana Mineral Resources Sdn Bhd
Peter Anthony Lynch (estate) & Laura Anne Lynch
Ordinary Shares:
184,641,719
56,052,000
The Company notes that, as at 4 September 2020, the following shareholders hold substantial shareholdings (>= 5.0%) in Cokal:
Name of Shareholder:
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Ordinary
Shares:
225,890,320
57,734,227
% of total shares:
24.46%
6.27%
(e) Voting rights
All ordinary shares carry one vote per share without restriction.
Options do not carry voting rights.
(f) Restricted securities
The Group currently has no restricted securities on issue.
(g) On-market buy-back
There is not a current on-market buy-back in place.
(h) Business Objectives
The consolidated entity has used its cash and assets that are readily convertible to cash in a way consistent with its business
objectives.
COKAL LIMITED Annual Report 2020 | Page 28
For personal use only
Interests in Tenements and Projects
Cokal Limited had the following interests in projects as at 30 June 2020:
Indonesia
Project
Location
% Interest
PT Anugerah Alam Katingan (AAK)
PT Bumi Barito Mineral (BBM)
PT Borneo Bara Prima (BBP)
PT Tambang Benua Alam Raya (TBAR)
Kalimantan
Kalimantan
Kalimantan
Kalimantan
75%
60%
60%
75%
COKAL LIMITED Annual Report 2020 | Page 29
For personal use only
Consolidated Statement of Profit or Loss and
Other Comprehensive Income for the year
ended 30 June 2020
Revenue from coal sales
Revenue and other income
Employee benefits expense
Depreciation and amortisation expense
Arrangement fee
Production expenses
Finance costs
Legal expenses
Administration and consulting expenses
Licence fees
Write-off property, plant and equipment
Commission expense
Share based payment
Share based payment expense on amendment
of debt to royalty conversion agreement
Other expenses
Loss before income tax expense
Income tax expense
Loss for the period
Other comprehensive income
Items may be reclassified to profit or loss in
subsequent periods (net of tax):
Exchange translation differences
Total comprehensive loss for the period
Note
2
2
10
13
23(b)
23(b)
2020
US$
-
2019
US$
470,109
9,345,803
4,631,743
(934,733)
(1,468,388)
(255,901)
-
(356,086)
(23,756)
(26,535)
(82,657)
(111,386)
(454,867)
(36,450)
(34,557)
(308,969)
(827,175)
(582,262)
(1,549,658)
-
(1,162,166)
(9,261,535)
(50,700)
-
-
-
(1,003,561)
(119,148)
(226,704)
(2,573,822)
(1,855,717)
4
-
-
(2,573,822)
(1,855,717)
28,810
-
(2,545,012)
(1,855,717)
Earnings/(Loss) per share for the loss attributable to owners of Cokal Limited:
Loss per share (cents per share)
Diluted loss per share (cents per share)
6
6
Cents
(0.28)
(0.28)
Cents
(0.26)
(0.26)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
COKAL LIMITED Annual Report 2020 | Page 30
For personal use only Consolidated Statement of Financial Position as
at 30 June 2020
Current Assets
Cash and cash equivalents
Short term deposits
Other accounts receivable
Other current assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation assets
Right of use assets
Other non-current assets
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Accounts payable and others
Lease liabilities
Borrowings
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
7
7
8
12
10
11
14(a)
12
13
14(b)
15
14(b)
2020
US$
779,717
138,916
10,117
94,758
1,023,508
2019
US$
127,361
138,916
2,102
17,470
285,849
112,341
186,831
25,232,849
25,067,202
141,725
25,280
-
38,148
25,512,195
25,292,181
26,535,703
25,578,030
15,492,256
6,212,566
102,479
2,078,448
-
11,418,744
17,673,183
17,631,310
7,650
7,650
-
-
17,680,833
17,631,310
8,854,870
7,946,720
16
17
95,095,642
91,686,061
6,196,197
6,116,687
(92,436,969)
(89,856,028)
8,854,870
7,946,720
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
COKAL LIMITED Annual Report 2020 | Page 31
For personal use only
Consolidated Statement of Changes in Equity
for the year ended 30 June 2020
Issued
capital
US$
Reserves
Accumulated
losses
US$
US$
Total
US$
At 1 July 2019
91,686,061
6,116,687
(89,856,028)
7,946,720
Cumulative adjustments upon adoption of new accounting standard –
AASB 16
Balance at 1 July 2019 (restated)
-
-
(7,119)
(7,119)
91,686,061
6,116,687
(89,863,147)
7,939,601
Total comprehensive loss for the year
Loss for the year
Other comprehensive income
Transactions with owners in their capacity as owners
Issue of share capital, net of costs
Share based payments
Foreign exchange
At 30 June 2020
At 1 July 2018
Total comprehensive loss for the year
Loss for the year
Other comprehensive income
Transactions with owners in their capacity as owners
Issue of share capital
Share based payments
-
-
-
3,409,581
-
-
3,409,581
-
-
-
-
50,700
28,810
79,510
(2,573,822)
(2,573,822)
-
-
(2,573,822)
(2,573,822)
-
-
-
-
3,409,581
50,700
28,810
3,489,091
95,095,642
6,196,197
(92,436,969)
8,854,870
84,752,154
4,907,414
(80,789,063)
9,455,400
-
-
-
1,959,007
-
-
-
-
-
1,116,544
1,959,007
1,116,544
(1,855,717)
(1,855,717)
-
-
(1,855,717)
(1,855,717)
-
-
-
1,959,007
1,116,544
3,075,551
At 30 June 2019
91,686,061
6,116,687
(89,856,028)
7,946,720
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
COKAL LIMITED Annual Report 2020 | Page 32
For personal use only
Consolidated Statement of Cash Flows
for the year ended 30 June 2020
Cash Flows from Operating Activities
Receipt from customers
Payments to suppliers and employees
Interest received
Finance costs paid
Note
2020
US$
2019
US$
-
162,921
(1,890,439)
(3,027,126)
10,246
976
-
(114,040)
Net cash outflow from operating activities
22
(1,880,193)
(2,977,269)
Cash Flows from Investing Activities
Payments for property, plant and equipment
Payments for exploration and evaluation
expenditure
Net cash outflow from investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Payment of capital raising costs
Repayment of leases
Repayment of convertible note
Proceeds from borrowings
Repayment of borrowings
Net cash inflow from financing activities
Net increase in cash and cash equivalents
(53,145)
(2,843)
(165,647)
-
(218,792)
(2.843)
16
3,158,255
1,595,822
(239,933)
(166,983)
-
-
-
-
-
(186,251)
2,000,000
(317,600)
2,751,339
3,091,971
652,356
111,859
127,361
779,717
15,502
127,361
Cash and cash equivalents at beginning of year
7
Cash and cash equivalents at end of year
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
COKAL LIMITED Annual Report 2020 | Page 33
For personal use only Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 1: Summary of Significant Accounting Policies
(a) General information
The consolidated financial statements of Cokal Limited for the year ended 30 June 2020 were authorised for issue in
accordance with a resolution of the Directors dated 30 September 2020 and covers the consolidated entity (the “Group” or
“Cokal”) consisting of Cokal Limited (the “Company”) and its subsidiaries.
The financial statements are presented in United States Dollars (“US$” or “US$”).
Cokal Limited (the parent) is a company limited by shares, incorporated and domiciled in Australia, whose shares are publicly
traded on the Australian Securities Exchange.
The principal activities of the Group during the year were focused on the identification and development of coal within the
highly prospective Central Kalimantan coking coal basin in Indonesia.
(b) Basis of preparation
The financial statements are general purpose financial statements which have been prepared in accordance with Australian
Accounting Standards and the Corporations Act 2001.
The financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB).
The financial statements have been prepared on a historical cost basis.
(c) Going concern
At 30 June 2020, the Group’s current liabilities exceed the current assets by US$16,649,675 (30 June 2019: US$17,248,643).
This position is due to:
•
•
Commission payable (refer note 13) of US$9,261,535 being a current liability;
The classification of the Group’s liability with PT Bara Mineral Asri (BMA Group) (refer note 15) of $2,000,000 as a
current liability; and
The Group’s arrears of trade and other payables. A significant number of the Group’s creditors, including the directors,
are providing informal financial support to the entity.
•
On 22 July 2016, Cokal announced it had reached an agreement with Platinum Partners for the conversion of all outstanding
loans owing to them to production royalties. The royalties will be payable on 1% of the realised selling price of coal (FOB) from
the Bumi Barito Mineral Project (BBM) and PT Tambang Benua Alam Raya (TBAR) projects up to a maximum of US$40 million.
Under the arrangement, no minimum royalty is payable and the royalty is only payable as and when coal is mined and sold.
On 29 April 2017, the Group entered into a Royalty Deed with Platinum Partners (refer note 15) to convert all outstanding
loans owing to them to production royalties (this formalised the agreement on 22 July 2016) subject to certain conditions
precedent.
In May 2020 the Company consented to the assignment of the Platinum Partners debt to Alpine Holdings Limited on the basis
that the debt was discharged and new royalty /commission payment terms agreed.
The financial report has been prepared on a going concern basis which contemplates the continuity of normal business
activities and the realisation of assets and discharge of liabilities in the ordinary course of business. The ability of the Group
to continue to as a going concern is impacted by a number of matters including:
COKAL LIMITED Annual Report 2020 | Page 34
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(c) Going concern (Cont’d)
•
•
•
The continued financial support of management and directors who have provided short term loans to the Group and/or
have agreed to not require the Group to pay amounts owing to them until such time as cash flows are generated by the
BBM project or have otherwise agreed to have the amounts payable to them satisfied by way of a share issue (subject
to shareholder approval);
The continued willingness of creditors to extend payment terms to the Group until such time as cash flow are generated
by the BBM project; and
The successful raising of sufficient funding, through debt, equity or other arrangements (or a combination of
transactions) to progress the development of the larger BBM project, including meeting capital expenditure and
working capital requirements, until such time as the project is in production and its revenues from coal sales are
sufficient to meet its cash outflows.
Should these avenues be delayed or fail to materialize, the Group has some ability to scale back its activities to help the Group
to manage to meet its debts as and when they fall due in the short term. However, should the above matters not be
successfully resolved, the Group may not be able to continue as a going concern.
Importantly, the Group’s significant arrears of trade and other payables means it’s ability to continue as a going concern is
dependent on creditors, including management and the directors, extending payment terms, providing informal financial
support and not demanding payment of amounts owed to them in excess of the Group’s available funds at the time. At the
date of this report, no creditor or lender of the Group, including Platinum Partners, have made demands for payment.
The Directors are confident, given the current permitting and financing processes being undertaken and announced to the
market, that the Group will be successful in its endeavours to develop the larger BBM project. The directors believe that the
commencement of operations at the BBM project (and the forecast generating of operating cash inflows) in conjunction with
planned capital raisings will enable it to satisfy its working capital requirements (including its arrears of trade and other
payables). This being the case, the directors have a reasonable expectation that given the status of the current permitting and
financing processes, the Group’s creditors will continue to extend payment terms, provide informal financial support and not
demand payment of amounts owed to them in excess of the Group’s available funds. As a result, the financial report has been
prepared on a going concern basis.
The financial report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or to the amounts and classification of liabilities should the Group be unsuccessful in raising funds to enable it to
realise its assets and discharge its liabilities in the ordinary course of business.
(d) New accounting standards and interpretations
The Group has implemented one new Accounting Standard that is applicable for the current reporting period.
The Group had to change its accounting policies and make adjustments as a result of adopting AASB 16: Leases. The impact of the
adoption of the standard and the respective accounting policy is disclosed below.
(i) Leases
Initial application of AASB 16
The Group has adopted AASB 16: Leases retrospectively with the cumulative effect of initially applying AASB 16 recognised at 1 July
2019. In accordance with AASB 16, the comparatives for the 30 June 2019 reporting period have not been restated.
The Group has recognised a lease liability and right-of-use asset for all leases (with the exception of short-term and low-value leases)
recognised as operating leases under AASB 117: Leases where the Group is the lessee.
The lease liabilities are measured at the present value of the remaining lease payments. The Group's incremental borrowing rate as
at 1 July 2019 was used to discount the lease payments.
The right-of-use asset for manufacturing equipment was measured at its carrying amount as if AASB 16 had been applied since the
commencement date, but discounted using the Group's incremental borrowing rate per lease term as at 1 July 2019.
The right-of-use assets for the remaining leases were measured and recognised in the statement of financial position as at 1 July
2019 by taking into consideration the lease liability and prepaid and accrued lease payments previously recognised as at 1 January
2019 (that are related to the lease).
COKAL LIMITED Annual Report 2020 | Page 35
For personal use only
Notes to the Consolidated Financial
Statements for the year ended 30 June 2020
(d) New accounting standards and interpretations (Cont’d)
The following practical expedients have been used by the Group in applying AASB 16 for the first time:
•
•
•
•
•
for a portfolio of leases that have reasonably similar characteristics, a single discount rate has been applied;
leases that have a remaining lease term of less than 12 months as at 1 July 2019 have been accounted for in the
same way as short-term leases;
the use of hindsight to determine lease terms on contracts that have options to extend or terminate;
applying AASB 16 to leases previously identified as leases under AASB 117 and Interpretation 4: Determining
whether an arrangement contains a lease without reassessing whether they are, or contain, a lease at the date of
initial application; and
not applying AASB 16 to leases previously not identified as containing a lease under AASB 117 and Interpretation 4.
Adjustments recognised in the balance sheet as at 1 July 2019
The following summary indicates the adjustments and reclassifications of financial statement line item in the balance
sheet due to the implementation of AASB 16.
Carrying amount
under AASB 117
Adjustments
Carrying
amount under
AASB 16
US$
-
-
US$
213,041
(220,160)
US$
213,041
(220,160)
(89,856,028)
(7,119)
(89,863,147)
Right of use assets
Lease liabilities
Accumulated losses
Measurement of lease liabilities
Operating lease commitments disclosed as at 30 June 2019
Less: Discounted using the lessee’s incremental borrowing rate of at the date of initial
application
Add: Extension and renewal of lease term
Lease liabilities recognised as at 1 July 2019
US$
158,694
(17,478)
78,944
220,160
Measurement of right of use assets
The associated right of use assets for property leases were measured on a retrospective basis as if the new rules had always
been applied. Other right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of
any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 30 June 2019.
(ii) Changes in accounting policy and disclosures
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet
effective.
(iii) Accounting Standards and Interpretations issued but not yet effective
The Group has adopted all the mandatory new and amended Accounting Standards issued that are relevant to its
operations and effective for the current reporting period. There was no material impact on the financial report as a result
of the mandatory new and amended Accounting Standards adopted.
COKAL LIMITED Annual Report 2020 | Page 36
For personal use only Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(e) Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries at reporting date.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and
only if the Group has:
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
•
•
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts
and circumstances in assessing whether it has power over an investee, including:
•
•
•
The contractual arrangements with the other vote holders of the investee;
Rights arising from other contractual arrangements; and
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one
or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the period are included in the statement of comprehensive income from the date the Group
gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of
the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies. All intra-Group assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it:
• De-recognises the assets (including goodwill) and liabilities of the subsidiary;
• De-recognises the carrying amount of any non-controlling interests;
• De-recognises the cumulative translation differences recorded in equity;
•
•
•
•
Recognises the fair value of the consideration received;
Recognises the fair value of any investment retained;
Recognises any surplus or deficit in profit or loss; and
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as
appropriate, as would be required if the Group had directly disposed of the related assets or liabilities.
(f) Revenue recognition
Sale of coal
The Group has determined that revenue from the sale of coal is recorded when delivered to the customer (being the point at
which control passes to the customer). At this point, the Group has satisfied all its performance obligations under the sales
agreement with the customer. The revenue is recognised at 100% of the sale value, calculated based on the tonnes supplied
at the contracted price per tonne (adjusted for any known quality penalties).
Interest income
Interest revenue is recognised as interest accrues using the effective interest rate 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.
COKAL LIMITED Annual Report 2020 | Page 37
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(g) Income tax
The income tax expense for the year is the tax payable on the current year's taxable income based on the national income tax
rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
between the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for all temporary differences, between carrying amounts of assets and
liabilities for financial reporting purposes and their respective tax bases, at the tax rates expected to apply when the assets
are recovered or liabilities settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction.
Exceptions are made for certain temporary differences arising on initial recognition of an asset or a liability if they arose in a
transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or
taxable profit.
Deferred tax assets are only recognised for deductible temporary differences and unused tax losses if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of
investments in subsidiaries, associates and interests in joint ventures where the parent entity is able to control the timing of
the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances relating to amounts recognised directly in other comprehensive income and equity are also
recognised directly in other comprehensive income and equity, respectively.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
profitable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
Cokal Limited and its wholly-owned subsidiaries are in the process of implementing the tax consolidation legislation in
Australia. Cokal Limited will be the head entity in the tax consolidated Group. Once the tax consolidation is executed, these
entities will be taxed as a single entity and deferred tax assets and liabilities will be offset in these consolidated financial
statements.
(h) Impairment of non-financial assets other than goodwill
At the end of each reporting period the Group assesses whether there is any indication that individual assets other than
goodwill, are impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses are
recognised in profit or loss where the asset's carrying value exceeds its recoverable amount. Recoverable amount is the higher
of an asset's FVLCD and VIU. For the purpose of assessing VIU, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.
Where it is not possible to estimate the recoverable amount for an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Assets other than goodwill that have previously been impaired are tested for possible reversal of the impairment whenever
events or changes in circumstances indicate that the impairment may have reversed.
COKAL LIMITED Annual Report 2020 | Page 38
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(i) Cash and cash equivalents
For the purposes of the Statement of Cash Flows, cash and cash equivalents includes cash on hand and at bank, deposits held
at call with financial institutions, other short term, highly liquid investments with 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.
(j) Financial instruments
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Recognition and Initial Measurement of financial assets
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics
and the Group’s business model for managing them. The Group initially measures a financial asset at its fair value plus, in the
case of a financial asset not at fair value through profit or loss, transaction costs. In order for a financial asset to be classified
and measured at amortised cost it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’
on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate
cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the
financial assets, or both.
Subsequent Measurement of financial assets
Financial assets at amortised cost (debt instruments) is the most relevant to the Group. The Group measures financial assets
at amortised cost if both of the following conditions are met:
•
•
The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to
impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and
all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to
the contractual terms.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Group’s consolidated statement of financial position) when the rights to receive cash
flows from the asset have expired or the Group has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement;
and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
COKAL LIMITED Annual Report 2020 | Page 39
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Financial instruments (cont’d)
(j)
Financial liabilities
A financial liability is a contractual obligation to deliver cash or another financial asset or to exchange financial assets or
financial liabilities under unfavourable conditions.
Recognition and Initial Measurement of financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings or as payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables,
loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent Measurement of financial liabilities
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement
of profit or loss.
(k) Property, plant and equipment
Property, plant and equipment are measured at cost less depreciation and impairment losses.
The cost of property, plant and equipment constructed within the Group includes the cost of materials, direct labour,
borrowing costs and an appropriate portion of fixed and variable costs.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the consolidated entity and the cost of the item
can be measured reliably. All other repairs and maintenance are charged to profit or loss during the period in which they are
incurred.
Depreciation
The depreciable amount of property, plant and equipment is depreciated over their useful life to the Group commencing from
the time the asset is held ready for use.
The depreciation rates used for each class of assets are:
Class of Fixed Assets
Land
Computer Equipment
Furniture and Office Equipment
Motor Vehicles
Depreciation Rate
nil
33.3% straight line
10 – 33.3% straight line
20% straight line
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An item of property, plant and equipment is de-recognised upon disposal or when no further future economic benefits are
expected from its use or disposal.
Gains and losses on disposal are determined by comparing proceeds with the carrying amount. The gains and losses are
included in the statement of comprehensive income.
(l) Exploration, evaluation and development expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest.
Such expenditures comprise net direct costs and an appropriate portion of related overhead expenditure but do not include
overheads or administration expenditure not having a specific nexus with a particular area of interest. The exploration and
evaluation expenditure is only carried forward as exploration or evaluation assets 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 reserves and active or significant operations in
relation to the area are continuing.
COKAL LIMITED Annual Report 2020 | Page 40
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(l) Exploration, evaluation and development expenditure (cont’d)
When technical feasibility and commercial viability of extracting a Coal Resource have been demonstrated then any capitalised
exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to reclassification, capitalised
exploration and evaluation expense is assessed for impairment.
A regular review has been undertaken on each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest. Accumulated costs in relation to an abandoned area are written off/de-
recognised in full against profit in the period in which the decision to abandon the area is made.
Costs related to the acquisition of properties that contain Coal Resources are allocated separately to specific areas of interest.
These costs are capitalised until the viability of the area of interest is determined.
The stripping costs (the process of over burden removal) incurred before production commences (development stripping) are
capitalised as part of mine development expenditure and subsequently amortised.
The stripping costs incurred subsequent to commencement of production are referred to as production stripping. Production
stripping is generally considered to create two benefits, being either the production of inventory or improved access to the
coal to be mined in the future. Where the benefits are realised in the form of inventory produced in the period, the production
stripping costs are accounted for as part of the cost of producing those inventories. Where the benefits are realised in the
form of improved access to ore to be mined in the future, the costs are recognised as a non-current asset, referred to as a
‘stripping activity asset’, if the following criteria are met:
a) Future economic benefits (being improved access to the ore body) are probable;
b) The component of the ore body for which access will be improved can be accurately identified; and
c) The costs associated with the improved access can be reliably measured.
If all of the criteria are not met, the production stripping costs are charged to profit or loss as operating costs as they are
incurred. When production commences, the accumulated costs for the relevant area of interest (mine development and
acquired properties) will be amortised over the life of the area according to the rate of depletion of the economically
recoverable reserves using a units of production method.
Mine rehabilitation costs will be incurred by the Group either while operating, or at the end of the operating life of, the Group’s
facilities and mine properties. The Group assesses its mine rehabilitation provision at each reporting date. The Group
recognises a rehabilitation provision where it has a legal and constructive obligation as a result of past events, and it is probable
that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of obligation can
be made. The nature of these restoration activities includes: dismantling and removing structures; rehabilitating mines and
tailings dams; dismantling operating facilities; closing plant and waste sites; and restoring, reclaiming and revegetating
affected areas.
The obligation generally arises when the asset is installed or the ground/environment is disturbed at the mining operation’s
location. When the liability is initially recognised, the present value of the estimated costs is capitalised by increasing the
carrying amount of the related mining assets to the extent that it was incurred as a result of the development/construction of
the mine. Any rehabilitation obligations that arise through the production of inventory are recognised as part of the related
inventory item. Additional disturbances which arise due to further development /construction at the mine are recognised as
additions or charges to the corresponding assets and rehabilitation liability when they occur. Costs related to restoration of
site damage (subsequent to start of commercial production) that is created on an ongoing basis during production are
provided for at their net present values and recognised in profit or loss as extraction progresses.
Changes in the estimated timing of rehabilitation or changes to the estimated future costs are dealt with prospectively by
recognising an adjustment to the rehabilitation liability and a corresponding adjustment to the asset to which it relates, if the
initial estimate was originally recognised as part of an asset measured in accordance with AASB 116.
Any reduction in the rehabilitation liability and, therefore, any deduction from the asset to which it relates, may not exceed
the carrying amount of that asset. If it does, any excess over the carrying value is taken immediately to the statement of profit
or loss and other comprehensive income.
If the change in estimate results in an increase in the rehabilitation liability and, therefore, an addition to the carrying value
of the asset, the Group considers whether this is an indication of impairment of the asset as a whole, and if so, tests for
impairment. If, for mature mines, the estimate for the revised mine assets net of rehabilitation provisions exceeds the
recoverable value, then that portion of the increase is charged directly to expense.
Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current
market assessments and the risks specific to the liability. The periodic unwinding of the discount is recognised in the statement
of profit or loss and other comprehensive income as part of finance costs. For closed sites, changes to estimated
COKAL LIMITED Annual Report 2020 | Page 41
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(l) Exploration, evaluation and development expenditure (cont’d)
costs are recognised immediately in the statement of profit or loss and other comprehensive income.
The Group recognises neither the deferred tax asset in respect of the temporary difference on the decommissioning liability
nor the corresponding deferred tax liability in respect of the temporary difference on a decommissioning asset.
(m) Employee benefits
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be
settled within 12 months of the end of the reporting period are recognised in respect of employees' services rendered up to
the end of the reporting period and are measured at amounts expected to be paid when the liabilities are settled. Liabilities
for non-accumulating sick leave are recognised when leave is taken and measured at the actual rates paid or payable. In
determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy
vesting requirements.
(n) Provisions
Provisions for legal claims and make good obligations are recognised when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that that an outflow of economic resources will be required to settle the
obligation and the amount can be reliably estimated.
(o) Issued capital
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares or options are shown as a
deduction from the equity proceeds, net of any income tax benefit.
(p) Share-based payments
The Group provides benefits to employees (including directors) and suppliers (including financiers and consultants) in the form
of share-based payment transactions, whereby employees or suppliers render/provide services in exchange for shares or
options over shares (equity-settled transactions).
The fair value of options granted to employees is recognised as an employee benefit expense with a corresponding increase
in equity (share-based payment option reserve). The fair value of options granted to financiers is recognised as finance cost
with a corresponding increase in equity (share-based payment option reserve). Fair value of shares issued to employees and
consultants are recognised as employee benefits and consultancy expenses respectively with a corresponding increase in
share capital. The fair value is measured at grant date and recognised over the period during which the employees/suppliers
become unconditionally entitled to the options. Fair value is determined by an independent valuer using a Black-Scholes
option pricing model. In determining fair value, no account is taken of any performance conditions other than those related
to the share price of Cokal Limited (market conditions).
The cumulative expense recognised between grant date and vesting date is adjusted to reflect the directors’ best estimate of
the number of options that will ultimately vest because of internal conditions of the options, such as the employees having to
remain with the Group until vesting date, or such that employees are required to meet internal performance targets. There
are no conditions associated with the options issued to the financiers. No expense is recognised for options that do not
ultimately vest because internal conditions were not met. An expense is still recognised for options that do not ultimately vest
because a market condition was not met.
At each subsequent reporting date until vesting the cumulative charge to the statement of comprehensive income is the
product of:
- The grant date fair value of the award;
- The current best estimate of the number of awards that will vest, taking into account such factors as the likelihood of
employees turnover during the vesting period and the likelihood of non-market performance conditions being met; and
- The expired portion of the vesting period.
The charge to the statement of comprehensive income for the period is the cumulative amount as calculated above less the
amounts already charged in previous periods. There is a corresponding entry to equity.
Where the terms of options are modified, the expense continues to be recognised from grant date to vesting date as if the
terms had never been changed. In addition, at the date of the modification, a further expense is recognised for any increase
in fair value of the transaction as a result of the change.
Where options are cancelled, they are treated as if vesting occurred on cancellation and any unrecognised expenses are taken
immediately to profit or loss. However, if new options are substituted for the cancelled options and designated as a
replacement on grant date, the combined impact of the cancellation and replacement options are treated as if they were a
modification.
The dilution effect, if any, of outstanding options is reflected as additional share dilutions in the computation of diluted
earnings per share.
COKAL LIMITED Annual Report 2020 | Page 42
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(q) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) attributable to owners of Cokal Limited by the weighted
average number of ordinary shares outstanding during the period, adjusted for bonus elements in ordinary shares during the
period.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the amount used in determining basic
earnings per share by the after-tax effect of dividends and interest associated with dilutive potential ordinary shares. The
weighted average number of shares used is adjusted for the weighted average number of shares assumed to have been issued
for no consideration in relation to dilutive potential ordinary shares.
(r) GST
Revenues, expenses and assets are recognised net of GST except where GST incurred on a purchase of goods and services is
not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset
or as part of the expense item.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable
to, the taxation authority is included as part of receivables or payables in the statements of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
(s) Determination and presentation of operating segments
AASB 8 Operating segments requires a management approach under which segment information is presented on the same
basis as that used for internal reporting purposes. Operating segments are reported in a manner that is consistent with the
internal reporting to the chief operating decision maker (CODM), which has been identified as the Board of Directors.
Operating segments that meet the qualification criteria as prescribed by AASB 8 are reported separately. However, an
operating segment that does not meet the qualification criteria is still reported separately when information about the
segment would be useful to users of the financial statements.
Fair value measurement
(t)
The Group did not have any financial assets and liabilities measured at fair value at reporting date. Fair value is 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer
the liability takes place either:
•
•
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in
its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a
whole:
•
•
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable
COKAL LIMITED Annual Report 2020 | Page 43
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(t) Fair value measurement (cont’d)
•
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting period.
(u) Foreign currency translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the
date of transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange
ruling at the reporting date. The resulted gain or loss on retranslation is included in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate
as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using
the exchange rates at the date when the fair value was determined.
(v) Leases
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a right-of-use
asset and a corresponding lease liability is recognised by the Group where the Group is a lessee. However, all contracts that
are classified as short-term leases (ie a lease with a remaining lease term of 12 months or less) and leases of low-value assets
are recognised as an operating expense on a straight-line basis over the term of the lease.
Initially, the lease liability is measured at the present value of the lease payments still to be paid at commencement date. The
lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily determined, the Group
uses the incremental borrowing rate.
Lease payments included in the measurement of the lease liability are as follows:
•
•
•
•
•
•
fixed lease payments less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement
date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options, if lessee is reasonably certain to exercise the options; and
payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability as mentioned above, any lease payments
made at or before the commencement date, as well as any initial direct costs. The subsequent measurement of the right-of-use
assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the shortest. Where a lease
transfers ownership of the underlying asset, or the cost of the right-of-use asset reflects that the Group anticipates to exercise a
purchase option, the specific asset is depreciated over the useful life of the underlying asset.
(w) Parent entity financial information
The financial information for the parent entity, Cokal Limited, included in Note 20, has been prepared on the same basis as
the consolidated financial statements, except investments in subsidiaries and joint venture operations are accounted for at
cost, less provision for impairment.
(x) Current versus non-current classification
The Group presents assets and liabilities in the statement of financial position based on current/non-current classification.
An asset is current when it is either:
• Expected to be realised or intended to be sold or consumed in the normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within 12 months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after
the reporting period.
COKAL LIMITED Annual Report 2020 | Page 44
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(x) Current versus non-current classification (cont’d)
All other assets are classified as non-current.
A liability is current when either:
• It is expected to be settled in the 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.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
(y) Critical accounting estimates and judgments
Details of critical accounting estimates and judgements about the future made by management at the end of the reporting
period are set out below:
(i) Impairment of non-financial assets
The Group assesses each reporting period to determine whether any indication of impairment exists. Where an indicator
of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the
fair value less costs of disposal (FVLCD) and value in use (VIU). The assessments require the use of estimates and
assumptions such as long term coal prices (considering current and historical prices, price trends and related factors),
discount rates, operating costs, future capital requirements and decommissioning operating performance (which includes
production and sales volumes). These estimates and assumptions are subject to risks and uncertainty. Therefore, there is
a possibility that changes in circumstances will impact this project, which may impact the recoverable amount of the asset.
Fair value is 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. The Group considers any third party offers when forming a view on fair
value, or Enterprise Value (EV) that the market participants willing to pay for acquisition of the Group’s shares.
(ii) Exploration and evaluation assets
The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement to
determine whether future economic benefits are likely, from either exploration or sale, or whether activities have not yet
reached a stage which permits a reasonable assessment of the existence of technically feasible and commercially viable
reserves. The determination of reserves and resources is itself and estimation process that requires varying degrees of
uncertainty depending on how the resources are classified. These estimates directly impact when the Group defers
exploration and evaluation expenditure. The deferral policy requires management to make certain estimates and
assumptions about future events and circumstances, in particular, whether an economically viable extraction operation
can be established. Any such estimates and assumptions may change as new information becomes available. If, after
expenditure is capitalised, information becomes available suggesting that the recovery of the expenditure is unlikely, the
relevant capitalised amount is written off in profit or loss in the statement of comprehensive income in the period when
the new information becomes available.
At reporting date, certain tenements have reached a renewal date or will reach a renewal date in the next 12 months.
These tenements remain current until an official government expiry notice is issued. The directors are of the opinion that
while they are due for renewal, as no expiry notice has been received they remain current. If renewal is not forthcoming,
the amounts capitalised will likely be de-recognised.
(iii) Taxation
The Group’s accounting policy for taxation requires management’s judgement as to the types of arrangements considered
to be a tax on income in contrast to an operating cost. Judgement is also required in assessing whether deferred tax assets
and certain deferred tax liabilities are recognised on the balance sheet.
Deferred tax assets, including those arising from unrecouped tax losses, capital losses and temporary differences, are
recognised only where it is considered more likely than not that they will be recovered, which is dependent on the
generation of sufficient future taxable profits. Judgements are also required about the application of income tax
legislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes
in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities
recognised on the balance sheet and the amount of other tax losses and temporary differences not yet recognised. In
such circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require
adjustment, resulting in a corresponding credit or change to the income statement.
(iv) Share-based payments
The Group uses estimates to determine the fair value of equity instruments issued to directors, executives, employees and
suppliers. Further detail of estimates used in determining the value of share-based payments is included in Note 23.
COKAL LIMITED Annual Report 2020 | Page 45
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
(y) Critical accounting estimates and judgments (cont’d)
(v) Joint arrangements
Judgement is also required to classify a joint arrangement. Classifying the arrangement requires the Group to assess its
rights and obligations arising from the arrangement. Specifically, the Group considers:
The structure of the joint arrangement – whether its structured through a separate vehicle
•
• When the arrangement is structure through a separate vehicle, the Group also considers the rights and obligations
arising from:
-
The legal form of the separate vehicle;
-
The terms of the contractual arrangement; and
- Other facts and circumstances (when relevant).
This assessment often requires significant judgement, and a different conclusion on joint control and also whether the
arrangement is a joint operation or a joint venture, may materially impact the accounting.
Per agreement with subsidiary shareholders, the relevant activities including financing of certain entities’ are managed
and controlled by Cokal until the completion of Initial Work Program. The rights of other shareholders to receive returns
and obligations for expenditure are only established when they contribute their share of capital upon completion of the
Initial Work Program by Cokal. Given this, to date it has been determined that Cokal controls these entities and hence
currently consolidates them as subsidiaries. In future periods, however, the accounting treatment of these entities will be
required to be reassessed upon completion of Initial Work Program. This may lead to a change in accounting if it is then
determined that instead of controlling these entities, Cokal now only jointly controls these and they are joint
arrangements. Depending on whether these joint arrangements are classified as joint ventures or joint operations, this
may require either equity accounting (for a joint venture) or recognition of Cokal’s share of the assets, liabilities, income
and expenses of the arrangement (for a joint operation). Directors have not reassessed the impact at reporting date as the
Initial Work Program has not been completed at this date.
COKAL LIMITED Annual Report 2020 | Page 46
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 2: Revenue and Other Income
Revenue
- Sale of coal
Other income
- Interest income from external parties
- Gain on discharge and release of trade payables
- Gain on discharge and release of loan
Total other income
2020
US$
2019
US$
-
470,109
10,246
74,022
9,261,535
9,345,803
976
-
4,630,767
4,631,743
On 29 April 2017, the Group entered into a Royalty Deed with Platinum Partners to convert all outstanding loans owing to
them to production royalties (this formalised the agreement on 22 July 2016) subject to certain conditions precedent. In
November 2018, the Company entered into a further agreement with Platinum Partners, the effect of which confirmed
Cokal’s satisfaction with a number of the conditions precedent to the Royalty Deed and extended the date for meeting all
of the remaining conditions precedent (the “Subsequent Conditions”) under the Royalty Deed for conversion of two-thirds
of the Platinum Loans (being $9,261,535). In addition, under the agreement when Cokal cancels and reissues 37.5 million
options to Platinum Partners, one-third of the Group’s debt with Platinum Partners, being $4,630,767, is discharged and
released. The cancellation and reissue of the 37.5 million options occurred on 10 January 2019, at which time one-third
of the debt was discharged and released and a corresponding gain recognised in the Group’s statement of profit or loss
and other comprehensive income. During May 2020 the Company consented to the assignment of the Platinum Partners
loan to Alpine Invest Holdings Ltd (Alpine). It was agreed as a term of the consent to the assignment that immediately
upon transfer of the Platinum Partners loans to Alpine, that the loans are deemed released and Alpine discharges and
releases Cokal and each Cokal Group Company from their liability to make payment of the Platinum Partners loans totalling
$9,261,535 on the following terms:
•
•
•
•
each of the Subsequent Conditions is irrevocably satisfied or otherwise waived;
the royalty payable to Alpine under the Royalty Deed will be the greater of:
1. USD 10,000 per month; and
2. USD 2.00 per tonne of coal sold by BBM and TBAR on a monthly basis;
the maximum royalty payment of USD 40million payable under the Royalty Deed remains the same and will be
payable through the first 20 million tonnes of coal produced and sold by both BBM and TBAR; and
all other conditions stated in the Royalty Deed remain the same.
The Group previously recognised a share based payment expense for fair value (at grant date) of the 75 million options
granted to Platinum Partners as part consideration for the execution of the Royalty Deed. The Group has recorded a
further share based payment expense of $1,003,561 in respect of the incremental fair value of the 37.5 million new options
granted to Platinum Partners as part of the November 2018 amendment to the Royalty Deed. This expense is reported
separately in the statement of profit or loss and other comprehensive income for the year ended June 2019.
Note 3: Dividends and Franking Credits
There were no dividends paid or recommended during the financial year (30 June 2019: Nil).
There were no franking credits available to the shareholders of the Group (30 June 2019: Nil).
COKAL LIMITED Annual Report 2020 | Page 47
For personal use only
Notes to the Consolidated Financial
Statements for the year ended 30 June 2020
Note 4: Income tax
The prima facie income tax on the loss is reconciled to the income tax expense as follows:
Prima facie tax benefit at 27.5% (2019: 30%) on loss before
income tax
Add tax effect of:
- Not deductible expenses and impact of tax rate
differences
- Deferred tax asset not recognised
Income tax expense
Deferred tax assets
Deductible temporary differences
Carry forward tax losses
Deferred tax liabilities
Assessable temporary differences
Net deferred tax assets not recognised
2020
US$
2019
US$
(707,801)
(510,322)
707,801
510,322
-
-
-
-
-
12,436,402
-
9,940,760
-
-
12,436,402
9,940,760
There are no franking credits available to shareholders of Cokal Limited.
The carried forward tax losses and temporary differences not recognised as deferred tax assets as at 30 June 2020 were
US$45,223,281 (30 June 2019: US$36,148,760) and US$nil (30 June 2019:US$nil) respectively.
In order to recoup carried forward losses in future periods, either the Continuity of Ownership Test (COT) or Same Business
Test must be passed. The majority of losses are carried forward at 30 June 2020 under COT.
Deferred tax assets which have not been recognised as an asset, will only be obtained if:
(i)
the Group derives future assessable income of a nature and of an amount sufficient to enable the losses to be
realised;
(ii) the Group continues to comply with the conditions for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the Group in realising the losses
Note 5: Auditor’s Remuneration
Audit services
Amounts paid/payable for audit or review of the
financial statements for the Group
Ernst & Young - Australia
Ernst & Young - Indonesia
Hall Chadwick
2020
US$
2019
US$
-
-
100,000
100,000
131,318
7,090
-
138,408
COKAL LIMITED Annual Report 2020 | Page 48
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 6: Loss per Share
Loss attributable to owners of Cokal Limited used to calculate basic and
diluted loss per share (USD)
Options *
Weighted average number of ordinary shares used as the denominator in
calculating basic loss per share
Adjustments for calculation of diluted earnings per share:
-
Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in calculating diluted loss per share
Basic loss per share (US cents per share)
Diluted loss per share (US cents per share)
2020
2019
(2,573,822)
(1,855,717)
911,138,073
725,498,143
911,138,073
725,498,143
(0.28)
(0.28)
(0.26)
(0.26)
* Options are considered anti-dilutive as the Group is loss making.
Options could potentially dilute earnings per share in the future. Refer to Note 16 for details of option granted as at 30 June 2020.
Note 7: Cash and Cash Equivalents
Cash and bank balances
Cash and bank balances
Less: Short term deposits maturing after three
months and restricted bank balance classified
as investing activities**
Cash and cash equivalents
2020
US$
918,633
918,633
(138,916)
779,717
**Includes restricted deposits of US$138,916 (2019: US$138,916) which can be used only after TBAR production commences.
Note 8: Other Receivables
Current
Other receivables*
*No receivable balances are past due or impaired at reporting date.
2020
US$
10,117
10,117
2019
US$
266,277
266,277
(138,916)
127,361
2019
US$
2,102
2,102
COKAL LIMITED Annual Report 2020 | Page 49
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 9: Subsidiaries
a) Interest in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in Note 1.
Name of entity
Jack Doolan Capital Pty Ltd
Cokal Mozambique Pty Ltd
Cokal Holdings Pte. Ltd
Cokal-AAK Pte. Ltd
Cokal-AAM Pte. Ltd
Cokal-BBM Pte. Ltd
Cokal-BBP Pte. Ltd
Cokal Services Pte. Ltd
Cokal Karoo Pte. Ltd
Cokal Manda Pte. Ltd
Cokal-West Kalimantan Pte. Ltd
Cokal-BPR Pte. Ltd
Cokal-TBAR Pte. Ltd
Mining Logistics Pte. Ltd
Cokal-KED Pte. Ltd
Cokal Resources Limited
PT Cokal
PT Bumi Kalimantan Logistik (BKL)
PT Anugerah Alam Katingan^ (AAK)
PT Bumi Barito Mineral^ (BBM)
PT Borneo Bara Prima ^ (BBP)
PT Tambang Benua Alam Raya# (TBAR)
Cokal Karoo Limited#
Cokal Manda Limited#
Country of
Incorporation
Class of Shares
Australia
Australia
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Tanzania
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Tanzania
Tanzania
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Percentage Owned
(%)*
2020
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
60%
60%
75%
100%
100%
2019
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
60%
60%
75%
100%
100%
* the proportion of ownership interest is equal to the proportion of voting power held.
^ at reporting date, the capital of these companies represents only the contributions from Cokal. Per agreement, the right of non-controlling
shareholders’ receiving a return is established only when they contribute their share of capital upon completion of the Initial Work Programs for
each of the projects. At reporting date, the Initial Work Programs for these projects have not yet been completed and therefore there is no right to
a return for non-controlling interests.
# During the 2018 financial year, the Group terminated its joint operations with a private company, Tanzoz Resource Company Ltd. The Company
now owns 100% of the Tanzanian entities. The entities are dormant entities. All capitalised expenditures for these entities has been impaired to
$nil in prior periods. The fair value of the underlying assets, liabilities and contingent liabilities at the acquisition date and 30 June 2020 are $nil.
b) Financial information of subsidiaries
Financial information of subsidiaries that will have material non-controlling interests are provided below. The balances of non-
controlling interests are not currently material at 30 June 2020 and 30 June 2019 as the right of non-controlling shareholders’
receiving a return is established only when they contribute their share of capital upon completion of the Initial Work Programs
for each of the projects. At reporting date, the Initial Work Programs for these projects have not yet been completed and
therefore there is no right to a return for non-controlling interests.
COKAL LIMITED Annual Report 2020 | Page 50
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 10: Property, Plant and Equipment
Land
At cost
Computer equipment
At cost
Accumulated depreciation
Furniture and office equipment
At cost
Accumulated depreciation
Motor Vehicles
At cost
Accumulated depreciation
Capital WIP
At cost
Capital WIP written off
2020
US$
63,493
63,493
563,363
(553,851)
9,512
561,442
(526,263)
35,179
15,034
(10,877)
4,157
2019
US$
31,526
31,526
555,731
(551,903)
3,828
552,957
(401,480)
151,477
9,974
(9,974)
-
-
-
1,162,166
(1,162,166)
-
Total property, plant and equipment
112,341
186,831
(a) Movements in carrying amounts
2020
Balance at beginning of year
Additions
Disposals
Depreciation expense
Amount written off
Carrying amount at the end of the
year
2019
Balance at the beginning of the year
Additions
Disposals
Depreciation expense
Amount written off
Land
US$
31,526
31,967
-
-
-
63,493
Land
US$
31,526
-
-
-
-
Carrying amount at the end of the
year
31,526
Computer
equipment
US$
3,826
7,634
-
(1,948)
-
9,512
Computer
equipment
US$
1,104
2,843
-
(121)
-
3,826
Furniture and
office
equipment
US$
151,479
8,485
-
(124,785)
-
35,179
Furniture and
office
equipment
US$
234,015
-
-
(82,536)
-
151,479
Motor
Vehicles
US$
-
5,057
-
(900)
-
4,157
Motor
Vehicles
Capital WIP
US$
-
-
-
-
-
-
Total
US$
186,831
53,145
-
(127,633)
-
112,341
Capital WIP
Total
US$
US$
US$
-
-
-
-
-
-
1,162,166
1,428,811
-
-
-
2,843
-
(82,657)
(1,162,166)
(1,162,166)
-
186,831
COKAL LIMITED Annual Report 2020 | Page 51
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 11: Exploration and Evaluation Assets
Non-Current
Exploration and evaluation expenditure capitalised
- exploration and evaluation phases
2020
US$
2019
US$
25,232,849
25,067,202
Recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful development and commercial
exploitation of coal, or alternatively, sale of the respective areas of interest.
(a) Movements in carrying amounts
Balance at the beginning of the year
Site related expenses during the year
Carrying amount at the end of the year
25,067,202
165,647
25,232,849
25,067,202
-
25,067,202
Historically, the Group has determined the recoverable amount of the BBM project using the Fair Value Less Cost of Disposal (FVLCD)
methodology considering the Group as a single cash generating unit (consistent with the Group’s primary focus on the BBM project
and this being the only asset in respect of which E&E is carried forward). The FVLCD was determined using Enterprise Value (EV). EV
is implied by Cokal’s market capitalisation plus a control premium. The fair value measurement is categorised under Level 3 of the
fair value hierarchy (refer note 1 (t)).
At 30 June 2020, the Fair Value less Cost of Disposal (FVCLD) of the Group’s two areas of interest was measured with respect to the
Group’s market capitalisation. At that time, the Group’s market capitalisation exceeded the carrying amount of its net asset.
Given the presence of the two areas of interest, the FVLCD implied by the Group’s Enterprise Value did not provide a precise
evaluation of the FVLCD of the distinct areas of interest. This being the case, the Group also had reference to an Independent Study
of all of Cokal’s tenement interests prepared in accordance with the Valmin Code as at 30 June 2017 (released on 23 August 2017).
The Independent Study provided an estimate of value (in accordance with the Valmin Code) of BBM and TBAR. The Independent
Study estimated the value of BBM using a discounted cash flow method and assessed the value of TBAR with reference to a resource
multiple ($ per tonne of in-situ resource tonnes). The Valmin Code valuation is a proxy for FVLCD under AASB 136 and would be
categorised under Level 3 of the fair value hierarchy (refer note 1 (v)). Based on the combined impact of the EV assessment
and Independent Study the Group is satisfied no further impairment was required at 30 June 2020.
In addition, given the AASB 6 impairment indicator identified by the Group was associated with its intention and ability to spend
substantial amounts on the continued exploration and evaluation of the areas of interest, the Group’s continued funding issues (refer
note 1(c)) means there is no current indication previously recorded impairments in respect of both BBM and TBAR should be reversed.
Note 12: Other Assets
Current
Prepayments
Non-Current
Security deposits
2020
US$
2019
US$
94,758
17,470
25,280
38,148
COKAL LIMITED Annual Report 2020 | Page 52
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 13: Accounts Payable and Others
Current
Sundry payables and accrued expenses
Director fees owing
Employee benefits
Commission payable
2020
US$
6,017,235
178,916
34,570
9,261,535
15,492,256
2019
US$
5,799,869
348,020
64,677
-
6,212,566
Commission payable
Conversion of loans from Northrock and Wintercrest to royalties / commission payable
On July 2016, Cokal announced it had reached an agreement with Platinum Partners for the conversion of all outstanding
loans owing under the Wintercrest and Norfolk facilities to production royalties. The royalties will be payable on 1% of the
realised selling price of coal (FOB) from the Bumi Barito Mineral Project (BBM) and PT Tambang Benua Alam Raya (TBAR)
projects up to a maximum of US$40 million. Under the arrangement, no minimum royalty is payable and the royalty is only
payable as and when coal is mined and sold.
On 29 April 2017, the Group entered into a Royalty Deed with Wintercrest and Northrock (collectively the “Lenders”) to
convert all outstanding loans owing to them to production royalties. The Royalty Deed is subject to a number of substantive
conditions precedent. The conditions precedent include:
a) The completion of legal and commercial due diligence by the Lenders’;
b) Approval by Cokal’s shareholders;
c) The Lenders being provided security in the form of a first legal charge under a deed of charge, over all of Cokal’s interest in the
BBM and TBAR projects, in a form reasonably satisfactory to the Lenders, to protect the interest of the Lenders in the royalties;
d) Cokal evidencing to the satisfaction of the Lenders (in their sole discretion) it has completed a capital raising (debt, equity or a
combination) to support the production of at least 100 ktpa of coal;
e) Cokal evidencing to the satisfaction of the Lenders (in their sole discretion) that:
i. Cokal’s production is not less than 8500 tonnes per month for a period of six (6) consecutive months;
ii. Cokal’s production for three (3) months from the date of first production is not less than the monthly equivalent of
100ktpa;
provided the above three and six month period occur with 18 months of the Group satisfying the condition in (d) above; and
f) The Lenders have received and approved all financial budgets anticipated to meet the production targets in (d) and (e) above.
On 20 February 2018, the Company issued 75 million Options to the Platinum Entities with an expiry date of 20 February 2023
and an exercise price of 1.6 cents (Existing Platinum Options). Each Existing Platinum Option vested once all the Platinum
Loans were released and discharged.
In November 2018, Cokal concluded and executed an amended agreement with Northrock Financial LLC and Wintercrest
Advisors LLC (the Platinum Entities) in respect of loans outstanding totalling US$13.89 million (Platinum Loans). The agreement
confirmed Cokal’s satisfaction with or waiver of the conditions precedent (a) to (d) above and extended the date for meeting
all of the remaining conditions precedent, being (e) and (f) (the “Subsequent Conditions”) under the Royalty Deed for
conversion of two thirds of the Platinum Loans to 31 July 2020. In addition, the amended agreement provided that when Cokal
cancels and reissues 37.5 million options to Platinum Partners, one third of the of the Group’s debt with Platinum Partners is
discharged and released. The cancellation and reissue of the 37.5 million options occurred on 10 January 2019, at which time
one third of the debt was discharged and released.
During May 2020 the Company consented to the assignment of the Platinum Loans to Alpine Invest Holdings Ltd (Alpine). It
was agreed as a term of the consent to the assignment that immediately upon transfer of the Platinum Loans to Alpine, that
the loans are deemed released and Alpine discharges and releases Cokal and each Cokal Group Company from their liability
to make payment of the Platinum Loans totalling $9,261,535 on the following terms:
•
each of the Subsequent Conditions is irrevocably satisfied or otherwise waived;
•
the royalty payable to Alpine under the Royalty Deed will be the greater of:
1. USD 10,000 per month; and
2. USD 2.00 per tonne of coal sold by BBM and TBAR on a monthly basis;
COKAL LIMITED Annual Report 2020 | Page 53
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 13: Accounts Payable and Others (cont’d)
•
•
the maximum royalty payment of USD 40million payable under the Royalty Deed remains the same and will be payable
through the first 20 million tonnes of coal produced and sold by both BBM and TBAR; and
all other conditions stated in the Royalty Deed shall remain the same.
The fair value of the commission payable to Alpine has been determined using the extinguished value of borrowings with
Platinum Partners taking into consideration the performance risk associated with future production levels.
Note 14: Leases
a) Right of use assets – office and motor vehicles
Balance at 1 July 2019
Additions
Amortisation
b) Lease liabilities
Current
Non current
Note 15: Borrowings
Current
BMA Group loan
Loans payable to directors and employees #
Platinum Partners / Northrock facility
Blumont Group / Wintercrest facility
Total Borrowings
30 June
2020
US$
213,041
56,955
(128,268)
141,725
1 July
2019
US$
107,341
112,819
220,160
30 June
2020
US$
102,479
7,650
110,129
2020
US$
2019
US$
2,000,000
78,448
-
-
2,078,448
2,000,000
157,209
6,710,000
2,551,535
11,418,744
# These loans payable to directors and employees are non-interest bearing and repayable on demand.
BMA Group loan
On 21 September 2018, Cokal signed a Key Principles of Agreement with PT Bara Mineral Asri (BMA Group) to develop and
operate PCI and Coking Coal operations at the BBM Project. Cokal received US$2.0 million loan from BMA Group to secure the
transaction but the BMA Group failed to complete the other funding conditions set out in the Key Principles of Agreement and
has also failed to document the loan arrangement with the Group. Therefore, the Group has assessed the loan is repayable
on demand and has been disclosed at the face value of the amounts received. It has been agreed that the liability will be
repaid based on US$ 10 per tonne, if the coal price is greater than US$ 110 per tonne, or 10 % of the coal price if less than US$
110 per tonne.
Platinum Partners / Northrock Facility
Under terms of various short-term loan facility agreements and a bridging loan facility agreement dated August 2015, the
Group has borrowed a total of US$10.065 million from various subsidiaries of Platinum Partners. At 30 June 2020, the full
amount of the loan is due and payable to Northrock Financial LLC (“Northrock”), being a subsidiary of Platinum Partners.
COKAL LIMITED Annual Report 2020 | Page 54
For personal use only Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 15: Borrowings (cont’d)
Blumont Group / Wintercrest Facility
On 5 November 2013, the Group entered into a loan facility agreement with Blumont Group Limited (“Blumont”). Under this
facility, the Group had drawn down US$3.4 million (30 June 2017: US$3.4 million) (the amount owing as at 30 June includes
interest and fees). The loan was repayable on demand on the third (3rd) anniversary of the loan drawdown date, being 5
November 2016. On 7 April 2016, Wintercrest Advisors LLC (“Wintercrest”), a subsidiary of Platinum Partners, agreed to
Settlement Agreement with Blumont, pursuant to which the Blumont loan was assigned in full to Wintercrest. As a result,
Wintercrest replaced Blumont as the lender under its facility agreement.
Note 16: Issued Capital
(a) Ordinary shares
923,382,313 fully paid ordinary shares (30
June 2019: 816,842,159)
Movement in Issued Capital
At the beginning of the year
Amount received for issue of shares during the year
Share issue from capital raising, net of costs
Share issue on conversion of options
Share issue on conversion of convertible notes
Share issue on payment of creditors
Share issue on conversion of loan
At reporting date
Movement in Issue Capital
(a) Ordinary shares
At the beginning of the year
Shares issued during the year
Share issue from capital raising
Share issue on conversion of options
Share issue on conversion of convertible notes
Share issue on payment of creditors
Share issue on conversion of loan
At reporting date
-
-
-
-
-
-
-
-
-
-
2020
US$
2019
US$
95,084,966
91,686,061
2020
US$
91,686,061
2,918,322
-
-
491,259
-
95,095,642
2020
Number
2019
US$
84,752,154
1,172,628
423,194
164,970
185,048
13,167
91,686,061
2019
Number
816,842,159
713,699,792
94,812,055
-
-
11,728,099
-
923,382,313
51,265,000
37,500,000
7,591,796
6,245,031
540,540
816,842,159
COKAL LIMITED Annual Report 2020 | Page 55
For personal use only Notes to the Consolidated Financial
Statements for the year ended 30 June 2020
Note 16: Issued Capital (cont’d)
(b) Options
All options on issue at 30 June 2020 were as follows:
Number of options
Exercise price
US$
Expiry date
Employees:
Consultant
1,000,000
4,000,000
3,000,000
3,000,000
3,000,000
5,000,000
1,000,000
1,000,000
Platinum / Northrock
37,500,000
Aahana Mineral Resources SDN
37,500,000
96,000,000
0.08
0.10
0.03
0.04
0.05
0.07
0.07
0.03
0.01
0.01
22 December 2020
22 December 2020
20 December 2021
20 December 2021
20 December 2021
20 December 2021
19 September 2020
20 December 2021
20 February 2023
20 February 2023
(c) Capital Risk Management
Management controls the capital of the Group in order to provide capital growth to shareholders and ensure the Group can
fund its operations and continue as a going concern.
The Group capital comprises equity as shown in the Statement of Financial Position. There are no externally imposed capital
requirements other than shown in note 16.
Management effectively manages the Group capital by assessing the Group financial risks and adjusting its capital structure in
response to changes in these risks and the market. These responses include raising sufficient equity capital when required.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
Note 17: Reserves
Share based payments option reserve
Translation reserve
2020
US$
7,622,839
(1,426,642)
6,196,197
2019
US$
7,572,139
(1,455,455)
6,116,687
The option reserve records the value of options issued as part of capital raisings, and consultant services as well as expenses relating
to director, executive and employee share options.
During the year ended 30 June 2020, proportional expensing of options issued to the CEO, Mr James Coleman in December 2018
was recorded, totalling US $50,700. These options are as follows:
•
•
•
•
3,000,000 options with an exercise price of US$0.03 and expiry date of 20 December 2021, vesting on production of
20,000 tonnes per month of coal (including PCI) for three consecutive months;
3,000,000 options with an exercise price of US $0.04 and expiry date of 20 December 2021, vesting on production of
40,000 tonnes per month of coal (including PCI) for three consecutive months;
3,000,000 options with an exercise price of US $0.05 and expiry date of 20 December 2021, vesting upon
commencement of shallow river barging; and
5,000,000 options with an exercise price of US$0.07 and expiry date of 20 December 2021, vesting upon first shipment
of coking coal from BBM.
Translation reserve represents the net exchange differences arising from the translation as a result of foreign operations.
COKAL LIMITED Annual Report 2020 | Page 56
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 18: Parent Entity Information
The consolidated financial statements incorporate the assets, liabilities and results of the parent entity in accordance with
the accounting policy described in Note 1.
Parent Entity
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Share based payment reserve
Revaluation reserve
Accumulated losses
Total shareholder’s equity
Loss for the year
Total comprehensive loss for the year
2020
US$
216,607
20,086,511
20,303,118
11,440,451
43,696
11,484,147
8,818,971
95,095,642
7,622,839
(3,537,489)
(90,362,021)
8,818,971
(2,240,710)
(2,240,710)
2019
US$
119,407
18,753,089
18,753,089
10,581,376
721,952
11,303,327
7,571,748
91,686,061
7,572,136
(3,565,142)
(88,121,311)
7,571,748
(1,655,025)
(1,655,025)
Guarantees
The parent entity has set up wholly owned special purpose entities (SPEs) in Singapore to hold ownership interests in
Indonesia and Tanzania entities and provided an undertaking to financially support SPEs to meet their liabilities as and
when they fall due.
Contractual Commitments
There were no contractual commitments for the acquisition of property, plant and equipment entered into by the parent
entity at 30 June 2020 (2019 – nil).
Contingent liabilities
The parent entity has no contingent liabilities.
Capital commitments
The parent entity has no capital commitments.
Impairment assessment
At 30 June 2020, Cokal Limited, the parent entity, performed an impairment assessment of its investments in subsidiaries
and non-current receivables from subsidiaries. As a result of this assessment, the carrying amount of these assets was
impaired by US$1,500,000 (2019: US$4,000,000).
COKAL LIMITED Annual Report 2020 | Page 57
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 19: Commitments
Operating lease commitments
Future minimum rentals payable under non-cancellable operating leases
as at 30 June 2020 are as follows:
Payable
- not later than 12 months
- between 12 months and 5 years
- greater than 5 years
2020
US$
2019
US$
-
-
-
-
77,297
81,397
-
158,694
Note 20: Contingent Liabilities
The Group has a number of contingent liabilities in respect of deferred purchase consideration for the acquisition of its
mining and exploration tenements.
BBP Vendor Payment
At 30 June 2020, the Group’s contingent liabilities include US$7.95m (30 June 2019: US$7.95m) in respect of its PT Borneo
Bara Prima (BBP) tenement. The amount is payable on the achievement of certain milestones, including but not limited to
the establishment of certain JORC Inferred Coal Resources and the issuance of production operation IUPs (licences) and
production forestry permits.
BBM Vendor Payment
As part of the Group’s acquisition of its interest in the BBM project, it was agreed an amount of US$10.0 million would be
payable within 30 days of the issue of the Production/ Operations IUP (mining license granted under the Indonesian New
Mining Law). During the year the Company entered into an agreement with the vendor of BBM for these vendor payments
due on commencement of production. It has now been agreed that an amount of US$10.5 million will be paid via:
1. US$200,000 within 30 days of signing the agreement;
2. During the first and second year of coal sales to a third party, monthly at a rate of US$2 per tonne of coal sold;
3. From the third year of coal sales to a third party, monthly at a rate of US$3 per tonne of coal sold.
Payments under items 2 and 3 are to total US$10.3 million.
BMA Group loan
On 21 September 2018, Cokal signed a Key Principles of Agreement with PT Bara Mineral Asri (BMA Group) to develop and
operate PCI and Coking Coal operations at the BBM Project. Cokal received US$2.0 million loan from BMA Group to secure
the transaction but the BMA Group failed to complete the other funding conditions set out in the Key Principles of
Agreement and has also failed to document the loan arrangement with the Group. Therefore, the Group has assessed the
loan is repayable on demand and has been disclosed at the face value of the amounts received. It has been agreed that the
liability will be repaid based on US$ 10 per tonne, if the coal price is greater than US$ 110 per tonne, or 10 % of the coal
price if less than US$ 110 per tonne.
Alpine Invest Holdings Ltd Commitment
During May 2020 the Company consented to the assignment of the Platinum Loans to Alpine Invest Holdings Ltd (Alpine). It
was agreed as a term of the consent to the assignment that immediately upon transfer of the Platinum Loans to Alpine, that
the loans are deemed released and Alpine discharges and releases Cokal and each Cokal Group Company from their liability
to make payment of the Platinum Loans totalling $9,261,535 on the following terms:
•
each of the Subsequent Conditions is irrevocably satisfied or otherwise waived;
•
the royalty payable to Alpine under the Royalty Deed will be the greater of:
1. USD 10,000 per month; and
2. USD 2.00 per tonne of coal sold by BBM and TBAR on a monthly basis;
•
•
the maximum royalty payment of USD 40million payable under the Royalty Deed remains the same and will be
payable through the first 20 million tonnes of coal produced and sold by both BBM and TBAR; and
all other conditions stated in the Royalty Deed shall remain the same.
COKAL LIMITED Annual Report 2020 | Page 58
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 21: Operating Segments
Segment performance for the year ended 30 June 2020
Australia
Indonesia
Singapore
US$
US$
US$
Total
US$
Sale of coal
Other income
Interest revenue
Total segment income
Depreciation expenses
Amortisation expenses
Finance costs
Share based payments
Other expenses
Total segment expenses
9,335,557
7
9,335,564
36,855
9,240
46,276
50,700
7,633,007
7,776,076
-
49
49
90,778
119,028
(22,520)
-
1,956,261
2,143,547
-
10,190
10,190
-
-
-
-
-
-
9,335,557
10,246
9,345,803
127,633
128,268
23,756
50,700
9,589,268
9,919,625
Segment net profit /(loss) before tax
(440,514)
(2,143,498)
10,190
(2,573,822)
Segment assets and liabilities as at 30 June 2020
Property, plant and equipment
Exploration and evaluation assets
Other segment assets
Total segment assets
-
-
47,066
47,066
112,341
25,232,849
525,987
25,871,177
-
-
617,460
617,460
112,341
25,232,849
1,190,513
26,535,703
Total segment liabilities
10,358,624
7,300,174
22,035
17,680,833
Capital expenditure for the year ended 30 June 2020
Property, plant and equipment
Exploration and evaluation assets
-
-
53,143
165,647
Segment performance for the year ended 30 June 2019
Australia
Indonesia
Singapore
US$
US$
US$
Sale of coal
Revenue and Other income
Total segment income
Depreciation expenses
Finance costs
Share based payments
Write-off Capital WIP
Other expenses
Total segment expenses
Segment net profit /(loss) before tax
-
4,631,743
4,631,743
(65,772)
(3,429)
(1,003,561)
-
(1,250,568)
(2,323,330)
2,307,437
470,109
-
470,109
(16,885)
(33,021)
-
(1,162,169)
(3,411,469)
(4,623,544)
(4,152,459)
COKAL LIMITED Annual Report 2020 | Page 59
-
-
-
-
-
-
-
-
-
(10,695)
(10,695)
(10,695)
53,143
165,647
Total
US$
470,109
4,631,743
5,101,852
(82,657)
(36,450)
(1,003,561)
(1,162,169)
(4,672,732)
(6,957,569)
(1,855,717)
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 21: Operating Segments (cont’d)
Segment assets and liabilities as at 30 June 2019
Property, plant and equipment
Exploration and evaluation assets
Other segment assets
Total segment assets
Australia
Indonesia
Singapore
US$
US$
US$
Total
US$
106,134
80,697
-
25,067,202
(2,788)
326,785
103,346
25,474,684
-
-
-
-
186,831
25,067,202
323,997
25,578,030
Total segment liabilities
10,624,966
6,846,567
159,777
17,631,310
Capital expenditure for the year ended 30 June 2019
Property, plant and equipment
Exploration and evaluation assets
-
-
2,843
-
-
-
2,843
-
*Inter segment expense relating to the income is eliminated in Indonesia’s exploration and evaluation assets.
Note 22: Cashflow Information
(a) Reconciliation of loss after income tax to net cash flow used in operating activities
Note
2020
US$
2019
US$
Loss for the year
Non-cash items:
- Depreciation
- Amortisation
- Property, plant and equipment write-off
- Share options expensed **
- Gain on loan forgiveness
- Foreign exchange movement
Change in operating assets and liabilities:
- (Increase)/Decrease in accounts receivables
- Increase in other current assets
- Decrease in other non-current assets
- Increase in revenue in advance
- Decrease in convertible notes
- Increase in accounts payables
Net cash flow used in operating activities
10
10
(2,573,822)
(1,855,717)
127,633
128,268
-
50,700
82,657
-
1,162,166
1,116,544
2 & 15
(9,261,535)
(4,630,767)
28,810
-
(8,015)
(77,288)
12,868
-
-
21,032
(13,407)
-
(307,189)
(12,887)
9,692,188
1,460,299
(1,880,193)
(2,977,269)
** The Company issued shares and options in payment of the following (refer notes 16 and 23):
Share options expensed:
- Options issued on discharge and release of Platinum entity loans: US$ Nil (2019: US$1,003,561);
- Options issued as a bonus to the CEO US$ 50,700 (2019 issued to Executive Director: US$ 100,078); and
- Options issued to creditors: US$ Nil (2019: US$ 12,905).
Share issues in payment of expenses:
- Shares issued in payment of CEO’s salary US$152,800 (2019: US$ 28,686)
- Shares issued in payment of director fees owing: US$ 338,459 (2019: US$ 156,362);
- Shares issued on conversion of convertible notes: US$ Nil (2019: US$164,970); and
- Shares issued on conversion of loan: US$ NIL (2019: US$ 13,167).
COKAL LIMITED Annual Report 2020 | Page 60
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 23: Share-based Payments
The following share-based payment arrangements existed at 30 June 2020.
(a) Share-based payments to directors, executives, employees and suppliers
During the year ended 30 June 2020, Nil options were issued to directors and Nil options were issued to executives and
employees of the Group.
Options on issue to suppliers as at 30 June 2020 are as follows:
• On 20 February 2018, 75,000,000 options were issued to Northrock and Platinum Partners at US$0.01 expiring on 20
February 2023, vesting on conversion of debt to royalty
• On 19 September 2018, 1,000,000 options were issued to Helbraun Holdings Pty Ltd at US$0.07, expiring on
19 September 2020
• On 20 December 2018, 1,000,000 options were issued to Lightglow Enterprises Pty Ltd at US$0.03, expiring on
20 December 2021
• On 10 January 2019, 37,500,000 options were issued to Platinum entities at US$0.01, expiring 10 January 2023. These
were exercised during the 2019 financial year.
All options issued by Cokal Limited entitle the holder to one ordinary share in Cokal Limited for each option exercised. The
options were granted for nil consideration. Once vested, options can be exercised at any time up to the expiry date.
The range of exercise prices for options outstanding at 30 June 2020 was US$0.01 to US$0.10 (2019: US$0.01 to US$0.10)
and weighted average remaining contractual life of 2.31 years (30 June 2019: 3.29 years).
30 June 2020
No. of options Weighted average
No. of options
exercise price
30 June 2019
Weighted average
exercise price
Outstanding at beginning of period
96,000,000
Granted
Forfeited/Cancelled
Exercised
Expired
Outstanding at period-end
Exercisable at period-end
-
-
-
-
96,000,000
39,500,000
US$
0.02
-
-
-
-
0.02
0.01
140,800,000
52,500,000
-
37,500,000
59,800,000
96,000,000
2,000,000
US$
0.07
0.02
-
0.01
0.14
0.02
0.05
Shares issued on exercise of an option rank equally with all other ordinary shares then on issue.
(b) Recognised share based payment expenses
Expense arising from options issued on amendment of debt
to royalty conversion agreement
Expense arising from shares issued as salary expense
Expense arising from shares issued in payment of creditors
Expense recognised for options issued as bonus
Expense arising from options issued in payment of creditors
2020
US$
Effect on
Statement of
Comprehensive
Income
2019
US$
Effect on
Option
Reserve
Effect on
Statement of
Comprehensive
Income
-
1,003,561
1,003,561
-
-
50,700
-
-
-
100,078
12,905
28,686
156,362
100,078
12,905
-
1,116,544
1,301,592
Effect on
Option
Reserve
-
-
-
50,700
-
50,700
COKAL LIMITED Annual Report 2020 | Page 61
For personal use only
Notes to the Consolidated Financial
Statements for the year ended 30 June 2020
Note 24: Related Party Disclosure
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
(a) Parent entity
The parent entity and ultimate controlling entity is Cokal Limited, which is incorporated in Australia.
(b) Subsidiaries
Interests and transactions in subsidiaries are disclosed in Note 9.
(c) Key management personnel (KMP) compensation
The KMP compensation for the year ended are set out below:
Short-term employee benefits*
Post-employment benefits
Termination benefits
Share-based payments
2020
US$
349,481
4,768
-
55,700
409,949
2019
US$
624,018
18,023
45,683
100,078
787,802
* The terms of directors’ services are described below. Amounts included, but not paid as at year end are recorded under note 13.
Note 25: Financial Risk Management
(a) General objectives, policies and processes
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This
note describes the Group objectives, policies and processes for managing those risks and the methods used to measure
them. Further quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated
in this note. The Group’s financial instruments consist mainly of deposits with banks, accounts receivable, security deposits,
interest bearing loans and accounts payable.
The Board has overall responsibility for the determination of the Group’s financial risk management objectives and policies
and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes
that ensure the effective implementation of the objectives and policies to the Group’s finance function. The Group’s
financial risk management policies and objectives are therefore designed to minimise the potential impacts of these risks
on the results of the Group where such impacts may be material.
The overall objective of the Board is to set policies that seek to reduce financial risk as far as possible without unduly
affecting the Group’s competitiveness and flexibility. Further details regarding these policies are set out below.
(b) Credit risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation resulting in the
Group incurring a financial loss. This usually occurs when debtors fail to settle their obligations owing to the Group. The
Group’s objective is to minimise the risk of loss from credit risk exposure.
The Group’s maximum exposure to credit risk at the end of the reporting period, without taking into account the value
of any collateral or other security, in the event other parties fail to perform their obligations under financial instruments
in relation to each class of recognised financial asset at reporting date, is as follows:
COKAL LIMITED Annual Report 2020 | Page 62
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 25: Financial Risk Management (cont’d)
Cash and bank balances
Receivables
Security deposits
Total
Note
7
8
7
2020
US$
779,717
10,117
138,916
928,750
2019
US$
127,361
2,102
138,916
268,379
Credit risk is reviewed regularly by the Board and the Audit Committee.
The Group does not have any material credit risk exposure to any single debtor or Group of debtors under financial
instruments entered into by the Group. No receivables balances were past due or impaired at period end. The credit
quality of receivables that are neither past due nor impaired is good. Bank deposits are held with Macquarie Bank Limited,
National Australia Bank Limited and Australia and New Zealand Banking Corporation Limited.
(c) Liquidity Risk
Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet financial obligations as they fall due.
The objective of managing liquidity risk is to ensure, as far as possible, that the Group will always have sufficient liquidity to
meets its liabilities when they fall due, under both normal and stressed conditions
Liquidity risk is reviewed regularly by the Board and the Audit Committee. Regular financial updates are received by the Board,
including financial forecasts of expenditure. The Board maintains a standing item in its Board meetings relating to the Group’s
funding with discussion and updates of various options and progression of funding provided regularly.
Carrying
Amount
US$
Contractual
Cash flows
US$
<6 months
6 – 12 months
1 – 3 years
>3 years
US$
US$
US$
US$
MATURITY ANALYSIS– 30 June 2020
Financial Liabilities
-
-
-
-
-
-
-
Accounts payable
Leases
Borrowings
Total
15,492,256
110,129
2,078,448
17,680,833
15,492,256
110,129
2,078,448
17,680,833
6,230,721
59,036
78,448
6,368,205
9,261,535
43,443
2,000,000
11,304,978
-
7,650
-
7,650
Carrying Amount
US$
Contractual
Cash flows
US$
<6 months
6 – 12 months
1 – 3 years
>3 years
US$
US$
US$
US$
MATURITY ANALYSIS– 30 June 2019
Financial Liabilities
Accounts payable
Borrowings
Total
6,212,566
11,418,744
17,631,310
6,212,566
6,212,566
-
11,418,744
17,631,310
9,418,744
15,631,310
2,000,000
2,000,000 -
-
-
-
-
-
-
-
-
-
-
-
(d) Market Risk
Market risk arises from the use of interest bearing, tradable and foreign currency financial instruments. It is the risk that
the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest
rate risk), foreign exchange rates (currency risk) or other market factors (other price risk). The entity does not have any
material exposure to market risk other than as set out below.
(i) Interest rate risk
Interest rate risk arises principally from cash and cash equivalents. The objective of interest rate risk management is to
manage and control interest rate risk exposures within acceptable parameters while optimising the return.
Interest rate risk is managed with fixed rate debt. For further details on interest rate risk refer to the tables below:
COKAL LIMITED Annual Report 2020 | Page 63
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 25: Financial Risk Management (cont’d)
(i) Interest rate risk (cont’d)
2020
Floating interest rate
Fixed interest rate
Non-interest
bearing
Total carrying
amount
Weighted
average
effective
interest rate
Financial assets
Cash and bank balances
Receivables
Security deposits
Total financial assets
Financial liabilities
Accounts payable
Leases
Borrowings
Total financial liabilities
US$
779,717
-
-
779,717
-
-
-
-
US$
US$
US$
%
-
-
-
-
-
110,129
-
110,129
-
10,117
138,916
149,033
15,492,256
-
2,078,448
17,570,704
779,717
10,117
138,916
928,750
15,492,256
110,129
2,078,448
17,680,833
-
-
-
-
-
-
-
-
2019
Floating interest
rate
Fixed interest rate
Non-interest
bearing
Total carrying
amount
Financial assets
Cash and bank balances
Receivables
Security deposits
Total financial assets
Financial liabilities
Accounts payable
Borrowings
Total financial liabilities
US$
US$
US$
US$
127,361
-
-
127,361
-
-
-
-
-
-
-
-
-
-
-
2,102
138,916
141,018
127,361
2,102
138,916
268,379
6,212,566
11,418,744
17,631,310
6,212,566
11,418,744
17,631,310
Weighted
average
effective
interest rate
%
-
-
-
-
-
-
-
The Group has performed a sensitivity analysis relating to its exposure to interest rate risk. This sensitivity demonstrates
the effect on the current period results and equity which could result from a change in these risks.
At 30 June 2020 the effect on post tax profit and equity as a result of changes in the interest rate for floating interest rate
instruments, with all other variables held constant, would be as follows:
2020
Cash and cash equivalents
Total effect on post tax profit
2019
Cash and cash equivalents
Total effect on post tax profit
Carrying Amount
(interest bearing)
US$
Increase in interest rate
by 0.5%
US$
Decrease in interest
rate by 0.5%
US$
218,633
218,633
266,277
266,277
1,093
1,093
1,331
1,331
(1,093)
(1,093)
(1,331)
(1,331)
(ii) Currency risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due
to movement in foreign exchange rates of currencies in which the Group hold financial instruments which are other than
the US$ functional currency of the Group.
The Group is exposed to currency risk on its cash and cash equivalents held (in AUD and Indonesian Rupiah) in Indonesia
and Australia as well as on purchases made from suppliers in Indonesia and Australia.
COKAL LIMITED Annual Report 2020 | Page 64
For personal use only
Notes to the Consolidated Financial Statements
for the year ended 30 June 2020
Note 25: Financial Risk Management (cont’d)
(ii) Currency risk (cont’d)
The Group’s exposure to significant foreign currency risk and the effect on post tax profit as a result of changes in foreign
currency rates, with all other variables held constant, are as follows:
2020
Cash and bank balances
Accounts payable and others
Borrowings
Net exposure
Effect on post profit:
Increase by 10%
Decrease by 10%
2019
Cash and bank balances
Accounts payable and others
Borrowings
Net exposure
Effect on post tax profit:
Increase by 10%
Decrease by 10%
AUD
US$
(4,320)
967,296
78,448
SGD
US$
166,574
5,241,390
-
Indonesian
Rupiah
US$
617,463
22,035
-
1,041,424
5,407,964
639,498
104,142
(104,142)
(790)
1,323,000
157,209
1,479,419
147,942
(147,942)
540,796
(540,796)
-
319,339
-
63,950
(63,950)
128,151
4,570,227
-
319,339
4,698,378
31,934
(31,934)
469,838
(469,838)
Total
US$
779,717
6,230,721
78,448
7,088,886
708,889
(708,889)
127,361
6,212,566
157,209
6,497,136
649,714
(649,714)
COKAL LIMITED Annual Report 2020 | Page 65
For personal use only
Notes to the Consolidated Financial
Statements for the year ended 30 June 2020
Note 26: Significant Events after the Reporting Date
There have been no significant events after reporting date.
COKAL LIMITED Annual Report 2020 | Page 66
For personal use only
Declaration by Directors
The directors of the Group declare that:
1. The financial statements, comprising the statement of comprehensive income, statement of financial position, statement
of cash flows, statement of changes in equity, and accompanying notes, are in accordance with the Corporations Act 2001
and:
(a) comply with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) give a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date.
2. The Group has included in the note 1 to the financial statements and explicit and unreserved statement of compliance
with International Financial Reporting Standards.
3.
In the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
4. The remuneration disclosures included in pages 17 to 22 of the directors’ report (as part of audited Remuneration Report)
for the year ended 30 June 2020, comply with section 300A of the Corporations Act 2001.
5. The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is signed in accordance with a resolution of the directors.
Cokal Limited
Domenic Martino
Chairman
Sydney
30 September 2020
COKAL LIMITED Annual Report 2020 | Page 67
For personal use only
COKAL LIMITED
ABN 55 082 541 437
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
COKAL LIMITED
AND CONTROLLED ENTITIES
Opinion
We have audited the financial report of Cokal Limited and its controlled entities (the group), which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated
statement of profit or 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 the Cokal Limited and its controlled entities is in
accordance with the Corporations Act 2001, including:
(a)
(b)
giving a true and fair view of the group’s financial position as at 30 June 2020 and of its
performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis of 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 responsibility section of our report. We are independent of the Company in accordance
with 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Emphasis of Matter – Material Uncertainty Related to Going Concern
We draw attention to Note 1(c) in the financial report, which indicates that the group incurred a net
loss of $2,573,822 during the year ended 30 June 2020 and, as of that date, the group’s current
liabilities exceeded its current assets by $16,649,675. As stated in Note 1(c), these events or
conditions, along with other matters as set forth in Note 1(c) indicate the existence of a material
uncertainty that may cast significant doubt about the group’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
For personal use only
COKAL LIMITED
ABN 55 082 541 437
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
COKAL LIMITED
AND CONTROLLED ENTITIES
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 2020. 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
Carrying value of exploration and evaluation assets
Refer to Note 11 Exploration expenditure and Note 1(y) Critical accounting estimates and judgements
At 30 June 2020, the group had capitalised
exploration expenditure assets of $25,232,849.
The group’s accounting policy in respect of
exploration, evaluation and development
expenditure is outlined in Note 1(l).
significant
This is a key audit matter because the carrying
value of the assets are material to the financial
statements and
is
applied in determining whether an indicator of
impairment exists in relation to capitalised
exploration
in
accordance with AASB 6 “ Exploration for and
Evaluation of Mineral Resources”.
expenditure
judgement
assets
and
Our procedures included, amongst others:
• We assessed management's determination
that its exploration activities and status of
areas of interest has met the requirements
of AASB 6;
• We verified a sample of additions
capitalised exploration expenditure
supporting documentation;
to
to
•
In assessing whether an
indicator of
impairment exists in relation to the group’s
in
exploration and evaluation assets
accordance with AASB 6, we
−
−
−
−
reviewed the licenses for the rights to
explore expiring in the near future or are
not expected to be renewed;
examined the board meeting minutes
and ASX announcements along with
other internal and external information
directors’
gathered
expectation whether the carrying value
of exploration and evaluation assets is
likely to be recovered in full through
successful development or sale;
determine
to
the group’s
reviewed
flow
forecasts or planned budget and future
activity regarding the exploration and
evaluation assets; and
cash
discussed with management the group’s
ability and intention to undertake further
exploration activities;
• We also assessed the recoverability of
carrying value of exploration and evaluation
assets against the fair value less cost of
disposal implied from the company’s market
capitalisation plus a control premium; and
• We assessed the adequacy of the related
disclosures within the financial statements.
For personal use only
COKAL LIMITED
ABN 55 082 541 437
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
COKAL LIMITED
AND CONTROLLED ENTITIES
Key Audit Matter How Our Audit Addressed
the Key Audit Matter
Debt modification and restructuring
Refer to Note 13 Accounts Payable and others and Note 15 Borrowings
As disclosed in Note 13, the group consented to
the assignment of the Platinum Loans to Alpine
Invest Holdings Ltd to convert the carrying
value of borrowings into royalty payable based
on the conditions and repayment terms under
the Royalty Deed.
The directors assessed the fair value of royalty
payable using as a proxy the carrying value of
loan extinguished taking into consideration the
performance
future
production levels.
risk associated with
Due to the significance of the transaction and
accounting complexity
judgement
involved in accounting for the debt modification
this
and
transaction as a key audit matter.
restructuring, we have
identified
including
Our procedures included, amongst others:
• We obtained and reviewed the key terms
and conditions attached to the existing debt
and the restructure arrangements;
• We obtained an external confirmation to
validate the restructure arrangements;
• We evaluated management’s accounting
treatment in respect to the debt modification
and restructuring;
• We reviewed the estimated fair value of
royalty payable in exchange for the existing
borrowings and held discussions with
the necessary
management
adjustments required to determine the fair
value of royalty payable; and
to assess
• We assessed the adequacy of the related
disclosures within the financial statements.
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 2020 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.
For personal use only
COKAL LIMITED
ABN 55 082 541 437
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
COKAL LIMITED
AND CONTROLLED ENTITIES
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 Responsibility 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 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 Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism 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 director’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the group to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
For personal use only
COKAL LIMITED
ABN 55 082 541 437
AND CONTROLLED ENTITIES
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
COKAL LIMITED
AND CONTROLLED ENTITIES
- 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, amongst 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 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 17 to 22 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the remuneration report of Cokal Limited, for the year ended 30 June 2020, complies
with s 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 s 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 (NSW)
Level 40, 2 Park Street
Sydney NSW 2000
DREW TOWNSEND
Partner
Dated: 30 September 2020
For personal use only