National HealthCare Corporation Annual Report 2012

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FY2012 Annual Report · National HealthCare Corporation

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New Hope Corporation Limited and Controlled Entities

Financial Summary

Total revenue

Profit before tax

Income tax expense

Profit after tax

Profit\(Loss) attributable to minority interests

Net profit attributable to NHCL members

2012

$000

2011

$000

2010

$000

2009

$000

767,525

662,404

744,982

700,785

198,819

(31,694)

167,125

(1)

167,126

719,097

(215,998)

503,099

(135)

503,234

244,583

(60,751)

183,832

2,772,114

(821,722)

1,950,392

183,832

1,950,392

Profit after tax from continuing operations

167,125

503,099

183,832

1,950,392

Total assets employed

Shareholders' funds

2,459,419

2,252,916

2,749,248

2,367,383

2,652,498

2,339,525

3,743,342

2,748,498

Dividends paid during the financial year

215,871

197,180

679,650

131,809

2012

2011

2010

2009

Weighted average shares on issue

830,335,876

830,127,809

825,292,601

811,614,188

Net profit attributable to NHCL members as a % of shareholders' funds

7.42%

21.26%

7.86%

70.96%

Earnings per share (cents)

Earnings per share (cents) from continuing operations

Normal dividends per share (cents)

Special dividends per share (cents)

20.1

11.00

20.00

60.6

10.25

15.00

22.3

9.50

14.00

240.3

9.25

72.75

Net tangible asset backing per share (cents)

268.80

278.55

281.79

335.58

New Hope Corporation Limited and Controlled Entities

Financial Summary

Total revenue

Profit before tax
Income tax expense
Profit after tax

Profit\(Loss) attributable to minority interests
Net profit attributable to NHCL members

2012
$000

2011
$000

2010
$000

2009
$000

767,525

662,404

744,982

700,785

198,819
(31,694)
167,125

(1)
167,126

719,097
(215,998)
503,099

(135)
503,234

244,583
(60,751)
183,832

2,772,114
(821,722)
1,950,392

183,832

1,950,392

Profit after tax from continuing operations

167,125

503,099

183,832

1,950,392

Total assets employed
Shareholders' funds

2,459,419
2,252,916

2,749,248
2,367,383

2,652,498
2,339,525

3,743,342
2,748,498

Dividends paid during the financial year

215,871

197,180

679,650

131,809

2012

2011

2010

2009

Weighted average shares on issue
Net profit attributable to NHCL members as a % of shareholders' funds

830,335,876
7.42%

830,127,809
21.26%

825,292,601
7.86%

811,614,188
70.96%

Earnings per share (cents)
Earnings per share (cents) from continuing operations

Normal dividends per share (cents)
Special dividends per share (cents)

20.1
20.1

11.00
20.00

60.6
60.6

10.25
15.00

22.3
22.3

9.50
14.00

240.3
240.3

9.25
72.75

Net tangible asset backing per share (cents)

268.80

278.55

281.79

335.58

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Your Directors present their report on the consolidated entity consisting of New Hope Corporation Limited and the entities it controlled at the end
of, or during, the year ended 31 July 2012.

Directors
The following persons were Directors of New Hope Corporation Limited during the whole of the financial year and up to the date of this report:

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr W.H. Grant
Mr R.C. Neale
Mr D.C. Williamson (ceased to be a director on 11 July 2012).

Consolidated results

Revenue from operations

2012
$000

2011
$000

%
Change

767,525

662,404

+ 15.9%

Profit before income tax (before non recurring items)*
Gain on sale of Arrow Energy before income tax (refer to Note 6)
Gain on sale of New Lenton Joint Venture before income tax (refer to Note 6)
Impairment of available for sale investments (refer to Note 7)
Impairment of goodwill (refer to Note 7)
Profit before income tax (after non recurring items)

Profit from ordinary activities after income tax (before non recurring items)*
Gain on sale of Arrow Energy after income tax
Gain on sale of New Lenton Joint Venture after income tax
Impairment of available for sale investments
Impairment of goodwill
Tax benefit from DTL recognised on acquisition
Profit from ordinary activities after income tax (after non recurring items)
Non-controlling interests
Profit attributable to New Hope Shareholders

Basic earnings per share (cents) (before non recurring items)*
Gain on sale of Arrow Energy
Gain on sale of New Lenton Joint Venture
Impairment of available for sale investments
Impairment of goodwill
Tax benefit from DTL recognised on acquisition
Basic earnings per share (cents) (after non recurring items)

238,010

-
-
(5,804)
(33,387)
198,819

171,080

-
-
(5,804)
(33,387)
35,236
167,125
(1)
167,126

20.6
-
-
(0.7)
(4.0)
4.2
20.1

208,696
466,192
57,740
(13,531)
-

719,097

146,947
329,355
40,328
(13,531)
-
-

503,099
(135)
503,234

17.7
39.7
4.8
(1.6)
-
-
60.6

+ 14.0%

- 72.4%

+ 16.4%

- 66.8%

+ 16.5%

- 66.8%

* The profit before non recurring items and the earnings per share before non recurring items contained within this Directors' Report have not been
reviewed in accordance with Australian Auditing Standards.

Principal activities
The principal continuing activities of the consolidated entity and associated companies consisted of:

h
h

Coal mining - exploration, development, production, processing, associated transport infrastructure and ancillary activities
Investments

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Dividends
Dividends paid to members during the financial year were:

h A final ordinary dividend for the year ended 31 July 2011 of 5.0 cents per share paid on 8 November 2011
h A special dividend for the year ended 31 July 2011 of 15.0 cents per share paid on 8 November 2011
h An interim ordinary dividend for the year ended 31 July 2012 of 6.0 cents per share paid on 2 May 2012

$000
41,512
124,534
49,825

In addition to the above dividends, since the end of the financial year, the Directors have declared a final ordinary dividend of 5.0 cents per share,
and a special dividend of 20.0 cents per share. Both of these dividends are fully franked, to be paid on 6 November 2012 out of retained profits at
31 July 2012, the record date for such dividend to be 24 October 2012. This will provide shareholders of New Hope with total dividends for the year
of 31.0 cents per share (6.0 cents interim) compared with total dividends for the 2011 year of 25.25 cents per share, including a special dividend of
15.0 cents per share.

Review of operations
New Hope Corporation Limited (New Hope) has reported a net profit after tax before non-recurring items for the year ending 31 July 2012 of $171.1
million. This included $113.1 million from coal and logistics operations and $58.0 million from investments. The corresponding performance in
2011 was a net profit of $146.9 million ($83.6 million from coal and logistics operations and $63.3 million from investments). The 2012
performance represented a 16% increase over that achieved in 2011.

Net profit after tax for the year ending 31 July 2012 was $167.1 million including non-recurring items. This compares to the 2011 result of $503.1
million and represents a reduction of 67%. The 2011 result included after tax gains totalling $369.7 million from the sale of interests in Arrow
Energy and the Lenton project.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Basic earnings per share before non-recurring items for 2012 were 20.6 cents compared to 17.7 cents earned in the previous corresponding period
(including non-recurring items 20.1 and 60.6 respectively).

Dividends
Dividends paid to members during the financial year were:

Directors have declared a final dividend of 5.0 cents per share (2011 - 5.0 cents per share) and a special dividend of 20.0 cents per share (2011 -
15.0 cents per share). Both of these dividends are fully franked and payable on 6 November 2012 to shareholders registered as at 22 October
h A final ordinary dividend for the year ended 31 July 2011 of 5.0 cents per share paid on 8 November 2011
h A special dividend for the year ended 31 July 2011 of 15.0 cents per share paid on 8 November 2011
2012.
h An interim ordinary dividend for the year ended 31 July 2012 of 6.0 cents per share paid on 2 May 2012

$000
41,512
124,534
49,825

Compared to the previous corresponding period, the 2012 full year result was impacted by:

h
h
h
h
h

Increased clean coal production (up 11%)
Increased total sales (up 11%)
Increased operating costs, predominantly offsite (up 4%)
Increased USD coal prices offset by higher AUD:USD exchange rate
No major operational impact from rain or flooding as was the case in 2011.

Mining Operations
Total clean coal production from New Hope’s operations in 2012 was a record 6.29 million tonnes. This was 11% higher than the flood impacted
performance in 2011. Rain impacts at all operations in 2012 were minimal. On site operating costs were well controlled being less than 0.5%
above that of 2011.

Total sales for 2012 were at a record level of 6.25 million tonnes (5.83 million tonnes export and 0.42 million tonnes domestic). This compared to
5.65 million tonnes in 2011. Delivery of coal to CS Energy’s Swanbank power station concluded in May 2012. This coal has been placed in the
export market.

New Acland Mine
The New Acland open cut mine produced 5.09 million tonnes of product coal in 2012. This was 12% above that achieved in 2011 and represented
an excellent recovery from the flood events of that year.

Key activities undertaken in 2012 have included:

h
h
h
h
h
h
h

Compared to the previous corresponding period, the 2012 full year result was impacted by:

Increased levels of overburden removal and ROM coal production through improved availability of key equipment.
Record Coal Handling and Preparation Plant performance at over 8000 operating hours per year.
Completion of a new Environmental Dam allowing development of the mine into Centre Pit.
Satisfactory negotiation of a new 3 year Enterprise Bargaining Agreement.
Rehabilitation of over 64 hectares of land in addition to the 190 hectares already completed and returned to cattle grazing.
Increased clean coal production (up 11%)
Completion of Stage 1 Cattle Trials which indicate improved productivity on rehabilitated land.
Increased total sales (up 11%)
Introduction of “Life Rules” to enhance mine site safety performance.
Increased operating costs, predominantly offsite (up 4%)
Increased USD coal prices offset by higher AUD:USD exchange rate
No major operational impact from rain or flooding as was the case in 2011.

h
h
h
h
h

Total sales for 2012 were at a record level of 6.25 million tonnes (5.83 million tonnes export and 0.42 million tonnes domestic). This compared to

5.65 million tonnes in 2011. Delivery of coal to CS Energy’s Swanbank power station concluded in May 2012. This coal has been placed in the

above that of 2011.

export market.

New Acland Mine

The New Acland open cut mine produced 5.09 million tonnes of product coal in 2012. This was 12% above that achieved in 2011 and represented

an excellent recovery from the flood events of that year.

Key activities undertaken in 2012 have included:

Increased levels of overburden removal and ROM coal production through improved availability of key equipment.

Record Coal Handling and Preparation Plant performance at over 8000 operating hours per year.

Completion of a new Environmental Dam allowing development of the mine into Centre Pit.

Satisfactory negotiation of a new 3 year Enterprise Bargaining Agreement.

Rehabilitation of over 64 hectares of land in addition to the 190 hectares already completed and returned to cattle grazing.

Completion of Stage 1 Cattle Trials which indicate improved productivity on rehabilitated land.

Introduction of “Life Rules” to enhance mine site safety performance.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

West Moreton Mines
The West Moreton operations comprising Jeebropilly and New Oakleigh open cut mines produced 1.20 million tonnes of product coal in 2012
(Jeebropilly 0.85 million tonnes and Oakleigh 0.35 million tonnes). This compared to 1.10 million tonnes in 2011, a 9% increase.

Key activities at the West Moreton operations in 2012 have included:

Further development of the Washplant Pit at Jeebropilly. Current curtailment of mining in 7186 Pit due to a rain induced geotechnical
failure.
Final development of the West Pit at New Oakleigh. New Hope has recently announced that mining at New Oakleigh will conclude in
January 2013 due to resource depletion. Plans are well underway to commence rehabilitation of the site.
Introduction of a vehicle proximity detection system for major mobile mining fleet.

Queensland Bulk Handling
QBH, New Hope’s 100% owned coal export terminal located at the Port of Brisbane, exported a record 8.67 million tonnes on 120 vessels
during 2012. This represented a 33% increase over the 6.52 million tonnes on 88 vessels exported in a rain impacted 2011. QBH continues
to be an essentially demurrage free port.

Key activities in 2012 included:

h
h
h

Further upgrade of electrical systems, train unloader and ship loader.
Successful negotiation of a 4 year Enterprise Bargaining Agreement.
Commencement of discussions to further expand QBH capacity.

New Hope Exploration
New Hope continues an active exploration program utilising three New Hope drilling rigs plus contract rigs as required. The exploration focus
during 2012 has been on resource definition in the Bowen Basin (Lenton) and Surat Basin (MDL244 for the continuation of New Acland Mine).
Exploration on the mineral tenures has been focused on the eastern edge of the Mount Isa block.

The exploration programs consisted of seismic survey, aeromagnetic survey, gravity survey in addition to drilling. The drilling program
consisted of 397 open holes and 152 core holes totalling 69,929 metres (2011 - drilling total 25,408 metres).

The programs undertaken were very successful in improving the resource base of New Hope Group. New Hope announced in August that
JORC compliant resources have increased by 64% to 2,511 million tonnes, while reserves have increased by 38% to 753 million tonnes. The
increases relate predominantly to the inclusion of the newly acquired Northern Energy deposits as well as the identification of additional
resources at Lenton as tabled below.

Deposit
New Acland
Jandowae
West Moreton
Lenton (1)
Bee Creek
Elimatta
Yamala (2)
Maryborough (Colton)
Ashford (3)
Total

Status
Mine
Exploration
Mine
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration

Coal Resources (million tonnes)
(Coal resources are inclusive of the reserves reported below)

Inferred
8
38
11
472
104
50
187
60
5
935

Indicated
438
119
72
146

101
23
16
8
923

Measured
411

46
75

108
13

0
653

Total
857
157
129
693
104
259
223
76
13
2,511

Notes:
(1) Figures shown are 100% of total resources. New Hope share is 90%.
(2)
Figures shown are 100% of total resources. New Hope share is 83%.
Figures shown are 100% of total resources. New Hope share is 50%.

(3)

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Deposit
New Acland (1)
Lenton (2)
Elimatta
Maryborough (Colton)
Total

Status
Mine
Exploration
Exploration
Exploration

Coal Resources (million tonnes)
Proved
309
21
114

Probable
185
31
77
15
308

Total
494
52
191
15
752

444

Notes:
(1)

Current uncertainty surrounding the State Government’s intended application of Strategic Cropping Legislation and / or statutory land use
planning may cast some doubt over whether all of the reported Acland reserves are capable of being mined. This may result in a reduction
in the quoted reserves for Acland of between zero and 23.9%.
(2)

Figures shown are 100% of total resources. New Hope share is 90%

For the full ASX Coal Reserves and Resources Statement please refer to our website.

Details of the 2012 exploration program are as follows:

Lenton (EPC 766, EPC 865 and ML 70337)
Exploration throughout the period focused on coal quality, infill drilling and fault delineation. A total of 112 holes were drilled comprising of 101
open holes and 11 core holes for a total of 22,700 metres and 188 metres respectively. A further 8 kilometres of 2D seismic survey was
undertaken to better define the Burton Thrust in the region.

Coal quality analysis was undertaken to better understand both the Rangal coals and Fort Cooper Coal measures that are present within the Open
Cut footprint. Pilot scale coke oven testing was successfully carried out on both the Vermont and Burton Rider seams. The Lenton geological
model was updated in February 2012.

New Acland (MDL 244, ML 50216)
While wet weather had a minor impact on drilling on the Darling Downs, 237 open holes and 58 core holes were drilled during the year totalling
29,511 metres (2011 - drilling total 6,482 metres). This allowed better resource definition for the New Acland Mine continuation. The introduction
of Strategic Cropping Land and Urban Restricted Areas has influenced New Hope Exploration to reassess the holding of some tenure on the
Darling Downs. The New Acland geological model was updated in February 2012.

Maryborough (EPC 923)
Wet weather (1,718 millimetres of rain) combined with the low topographic relief and poor drainage of the Maryborough area had major impacts on
drilling in the Maryborough Basin. Forty four open holes and 68 core holes were drilled during the year totalling 13,040 metres. Exploration
throughout the period focused on geotechnical, coal quality and large diameter core for coke oven testing and coal preparation plant design.

Churchyard Creek (EPC 1876)
The 2012 program consisted of 15 open holes and 28 kilometres of 2D seismic survey. The geological data collected confirms the presence of
several coal seams, however the structural complexity and sparse data allow for several potential geological interpretations. Currently none of
these models indicate the tenure to be economically viable at this time.

Mineral Tenures
New Hope currently has four mineral exploration permits granted and a further two under application. New Hope Exploration continues to
investigate other prospective open ground for new tenure.

EPM 18582 Yanko (Granted): A programme of five drill holes is planned based on a 50 square kilometre gravity survey completed in 2011.
Cultural heritage clearance for this work is in progress and drilling is expected to commence later this calendar year.
EPM 18589 Moonamarra (Granted): A 350 point gravity survey has been completed covering 150 square kilometres. Based on these
results a five hole drilling programme is planned and drilling is expected to commence later this calendar year.
EPM 18592 Sherwood (Granted): A review of previous exploration has been completed. A gravity survey of 267 points covering 200 square
kilometres is planned for September 2012. A drilling program is anticipated for the 2013 field season if results are favourable.
EPM 18581 Courtenay (Granted): A review of previous exploration has been completed. A gravity survey of 217 points covering 45 square
kilometres has been planned for September 2012. A drilling program is anticipated for the 2013 field season if results are favourable.
EPM 19508 Courtenay West: Grant pending and is expected in calendar year 2012. Courtenay West is a small extension to Courtenay
(EPM18581).
EPM 19342 Laura: Grant pending and is expected in calendar year 2012.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Pastoral Operations
The New Acland Pastoral Company continues to play an important role supplementing mining operations at Acland. Major activities include cattle
grazing as well as grain and pasture growing. New Acland Pastoral plays a key role in the enhanced rehabilitation of previously mined land at
Acland.

Key activities in 2012 included:

Sale of 2,138 and purchase of 2,336 head of stock during the year. At year end 1,996 head of stock were grazing on 3,752 hectares of
land.
Sale of 2,129 tonnes of grain occurred during the year. At year end 586 hectares of land was under cultivation.

An assessment of the commercial productivity of rehabilitated mining land was undertaken during the past year by a recognised third party
agricultural expert, Outcross Pty Ltd. This assessment involved monitoring the weight gain performance of cattle on a rehabilitated area of the
mine site in comparison to a control site that had not been disturbed by mining activity. Further third party supervised trials will be undertaken
during the 2013 financial year in order to verify the viability of rehabilitated land and optimise rehabilitation practice.

Development Projects
New Hope continues to develop a solid portfolio of coal projects. These include the brownfield project at New Acland and greenfield projects at
Lenton, Colton and Elimatta. Project development continues to be hampered by State Government requirements and uncertainty of legislative
changes possibly to be introduced by the new Queensland Government. The current status of these projects is discussed below:

New Acland Continuation Plan
Project work has included studies on a revised mine plan, coal preparation and handling plant and mine site infrastructure.

the
The introduction of Statutory Regional Planning by the new Queensland State Government has impacted the process and timing of
Supplementary EIS for the New Acland Continuation Plan. Significant dialogue has been undertaken with all key stakeholders regarding a revised
development plan.

Lenton
In addition to the further exploration program (discussed under Exploration) work on Lenton has included further understanding both coal and coke
quality, mine planning (including geotechnical considerations), submission of the EPBC referral, preparation of the EIS Terms of Reference and EIS
baseline studies (for MLA 70456).

Colton
Exploration and project development work on the Colton open cut coking coal project has continued during 2012. The Environmental Management
Plan has been submitted with assessment awaiting clarification on the applicability of the Queensland Biodiversity Offset Policy. This policy is
currently under review by the new State Government. Infrastructure and coal preparation plant design is well advanced.

Elimatta
During 2012 work on the Elimatta Project including reworking the mine plan increasing JORC Reserves by 19% to 191 million tonnes (see JORC
Statement), continued studies on the infrastructure corridor for the Environmental Impact Statement, negotiations with infrastructure suppliers and
landowners. The EIS is planned for submission by the end of 2012.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Carbon Conversion Projects
The Coal to Liquids (CTL) research and development activities have continued with success. The manufacture of the indirect 1 tonne per hour CTL
“Proof of Concept” (POC) plant is well advanced with the pyrolysis gasifiers on site at the Jeebropilly mine location. The prime purpose of this
process is to produce diesel and jet fuel as well as minor electricity generation. As anticipated, the scale up from 25kg per hour to 1 tonne per hour
has encountered some difficulties. The issues with the gasifiers have been resolved, with good performance during the pre-commissioning trials.

The liquefaction process scale up design encountered some difficulties requiring some modifications involving additional equipment with long lead
times necessitating some project delay. All parts of the process should be shipped to Jeebropilly by year end, subject to supplier performance.
Some electrical plant modifications will be needed to meet Australian standards.

Progress with the direct coal liquefaction process continues with the commissioning of the 1 tonne per day POC plant underway in the USA. This
process generates products suitable for high strength plastics and pharmaceutical industries. A high grade synthetic metallurgical grade coke is
produced as a valuable by product of the process. Diesel production from the liquids will be evaluated over the next six months.

The performance of these technologies is dependent on the individual coal types used which also impacts the product types and project yields.
Ultimately these factors will influence the commercialisation of the technologies. To date the technology developments remain on budget despite
some delay.

Outlook
New Hope’s mining operations ran at record levels in 2012. New Acland has demonstrated its capability in running at design capacity and is well
placed to achieve similar levels in 2013. Production from West Moreton in 2013 will be similar to that achieved in 2012, with the closure of New
Oakleigh in January 2013 offset by increased production from Jeebropilly.

QR National continues to perform rail services at or above contract levels.

The port facility at QBH also ran at record levels in 2012 and has the capacity and demonstrated monthly performance to handle up to 10 million
tonnes in 2013.

All New Hope budgeted 2013 production is contracted under multi-year long term contracts. The current market is however under significant
negative pricing pressure which is seen as a normal cyclical supply/demand feature of the industry. New Hope is well placed to ride out this phase
of the cycle being a comparative low cost producer.

New Hope is currently reviewing its suite of development projects in light of current and predicted coal prices and exchange rates.
noted that New Hope’s large cash reserves of $1.5 billion allows for development of these projects when economic conditions improve.

It should be

New Hope continues to review the industry for further acquisition opportunities which are becoming more prevalent in the current depressed
market.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

JORC Declaration
The estimates of coal resources herein (except for Ashford and Maryborough) have been prepared in accordance with the guidelines of the “Australian Code for Reporting of
Exploration Results, Mineral Resources and Ore Resources – The JORC Code:. These resources are inclusive of the reserves reported in the reserves statement. The work has been
undertaken internally and externally and reviewed by Mr Phillip Bryant, Project Manager – Lenton NHC and Member of AusIMM (no. 210566). Mr Bryant 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
2004 Edition of the JORC Code. Mr Bryant consents to the inclusion in this report of the matter based on this information in the form and context in which it appears.

JORC Declaration – Ashford Resources
The estimates of coal resources for Ashford have been prepared in accordance with the guidelines of the “Australian Code for Reporting of Exploration Results, Mineral Resources
and Ore Resources – The JORC Code”. These resources are inclusive of the reserves reported in the reserves statement. The work has been undertaken internally and externally and
reviewed by Mr Mark Benson, Senior Geologist NEC and Member of AusIMM (no. 309403). Mr Benson 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 2004 Edition of the JORC Code. Mr Benson
consents to the inclusion in this report of the matter based on this information in the form and context in which it appears.

JORC Declaration – Maryborough (Colton) Resources
The estimates of coal resources for Maryborough have been prepared in accordance with the guidelines of the “Australian Code for Reporting of Exploration Results, Mineral
Resources and Ore Resources – The JORC Code”. These resources are inclusive of the reserves reported in the reserves statement. The work has been undertaken externally and
reviewed by Mr Lyndon Pass of Encompass Mining and Member of AusIMM (no. 208403). Mr Pass 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 2004 Edition of the JORC Code. Mr Pass consents to the
inclusion in this report of the matter based on this information in the form and context in which it appears.

JORC Declaration – Coal Reserves
The information in this Coal Reserves Statement that relates to coal reserves (except for Elimatta and Maryborough) is based on information compiled by Dr Warren Seib, who is a
Fellow of AusIMM and a full time employee of the company. Dr Seib 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 2004 Edition of the JORC Code. Dr Seib consents to the inclusion in the report of the
matters based on his information in the form and context in which it appears.

JORC Declaration – Maryborough (Colton) Coal Reserves
The information in this Coal Reserves Statement that relates to coal reserves for Maryborough (Colton) is based on information compiled by Mr Fred Parker, who is a Member of
AusIMM and a full time employee of Runge. Mr Parker 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 2004 Edition of the JORC Code. Mr Parker consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears.

JORC Declaration – Elimatta Coal Reserves
The information in this Coal Reserves Statement that relates to coal reserves for Elimatta is based on information compiled by Mr Jeff Jamieson, who is a Fellow of AusIMM and a self-
employed consultant and a Member of The Minserve Group Pty Ltd. Mr Jamieson 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 2004 Edition of the JORC Code. Dr Jamieson consents to the inclusion in
the report of the matters based on his information in the form and context in which it appears.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Insurance of officers
In accordance with the provisions of the Corporations Act, New Hope Corporation Limited has a Directors' and Officers' Liability policy covering
Directors and Officers of the parent company and its controlled entities. The insurance policy prohibits disclosure of the nature of the liability
insured against and the amount of the premium.

Proceedings on behalf of the Corporation
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Corporation, or
to intervene in any proceedings to which the Corporation is a party, for the purpose of taking responsibility on behalf of the Corporation for all or
part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Corporation with leave of the Court under section 237 of the Corporations Act
2001 .

Significant changes in the state of affairs
Except as disclosed in the review of operations, there has not arisen any item, transaction or event of a material and unusual nature likely, in the
opinion of the Directors of the parent entity, to affect substantially the operations or results of the consolidated entity in subsequent financial years.

Matters subsequent to the end of financial year
Since the end of the financial year no matters or circumstances not referred to elsewhere in this report have arisen that have or will significantly
affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent
financial years.

Likely developments and expected results of operations
The activities of the continuing operations in the consolidated entity in the next financial year are expected to be similar to those of the financial
year just ended.

The consolidated entity will continue to pursue a policy of increasing its strength in its major business sectors including the development and
operation of additional mineral resource projects in Australia and is regularly reviewing potential new opportunities.

The Company will disclose further information on likely developments in the operations of the consolidated entity and the expected results of
operations as appropriate. However, Directors are mindful that premature release of information may be prejudicial to the best interests of the
Company and its shareholders.

Environmental compliance
The majority of the Company’s operations are regulated by the Queensland Department of Environment and Heritage Protection. Environmental
management of coal mining operations and exploration tenements is regulated under Queensland’s Environmental Protection Act 1994 while
the Queensland Bulk Handling (QBH) coal export port facility and Jondaryan rail loading facility are regulated under the Sustainable Planning Act
2009 .

During the 2012 financial year, the Company experienced one environmental incident involving a non compliant discharge of stormwater from the
QBH site. The Company promptly developed a number of corrective actions in response to the incident while maintaining regular consultation with
the regulator. The Company received a "Warning Notice" from the Queensland Department of Environment and Heritage Protection in relation to
the incident.

The Company’s operational sites submit reports during September each year under the National Pollutant Inventory program.

For the purposes of National Greenhouse and Energy Reporting and the Energy Efficiency Opportunities program the Company reports as part of
the corporate group of Washington H Soul Pattinson.

The Company continued to implement its Environmental Management System (EMS) in accordance with ISO14001 during the 2012 financial year.
The EMS assists the Company to improve its environmental performance by increasing environmental awareness, optimising operational control,
monitoring compliance and facilitating continuous improvement.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Information on Directors

Mr R.D. MILLNER (Non executive Chairman)

Experience

Mr Millner is Chairman of the Company's holding Company, Washington H. Soul Pattinson and Company Limited. Mr Millner joined the Board
of New Hope Corporation in 1995 and was appointed Chairman in 1998.

Other current Directorships

Washington H. Soul Pattinson and Company Limited
TPG Telecom Limited
Brickworks Limited (including Bristile Limited)
BKI Investment Company Limited (incl PSI Limited)
Australian Pharmaceutical Industries Limited
Milton Corporation Limited

Appointed 1984
Appointed 2000
Appointed 1997
Appointed 2003
Appointed 2000
Appointed 1998

Former Directorships in last 3 years
Choiseul Investments Limited
Souls Private Equity Limited
Northern Energy Corporation Limited

Special responsibilities

Chairman of the Board.

Interests in shares and options

Appointed 1995 Resigned 2010
Appointed 2004 Resigned 2012
Appointed 2011 Resigned 2012

3,681,962 ordinary shares in New Hope Corporation Limited
Nil options or rights over ordinary shares in New Hope Corporation Limited

Mr P.R. ROBINSON - BCom (Non executive Director)

Experience
Mr Robinson is Executive Director of Washington H. Soul Pattinson and Company Limited. He commenced with Washington H. Soul Pattinson
and Company Limited in 1978 and was appointed as a Director in 1984. He joined the Board of New Hope Corporation in 1997.

Other current Directorships

Washington H. Soul Pattinson and Company Limited
Clover Corporation Limited
Australian Pharmaceutical Industries Limited

Appointed 1984
Appointed 1997
Appointed 2000

Former Directorships in last 3 years

KH Foods Limited
Northern Energy Corporation Limited

Appointed 2008 Resigned 2009
Appointed 2011 Resigned 2012

Special responsibilities

Member of the Remuneration and Nomination Committee.

Interests in shares and options

109,234 ordinary shares in New Hope Corporation Limited
Nil options or rights over ordinary shares in New Hope Corporation Limited

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Information on Directors (continued)

Mr D.J. FAIRFULL - BCom, ACIS, CPA, ASIA (Non executive Director)

Experience

Mr Fairfull has extensive experience in finance, investment and merchant banking. He was appointed to the New Hope Corporation Board in
1997.

Other current Directorships

Washington H. Soul Pattinson and Company Limited
Souls Private Equity Limited
Shinewing Hall Chadwick National Association
Drill Torque Limited

Appointed 1997
Appointed 2004
Appointed 2009
Appointed 2011

Former Directorships in last 3 years

KH Foods Limited
Northern Energy Corporation Limited

Special responsibilities

Appointed 2008 Resigned 2009
Appointed 2011 Resigned 2012

Member and Acting Chairman of the Audit Committee, and a member of the Remuneration and Nomination Committee.

Interests in shares and options

11,000 ordinary shares in New Hope Corporation Limited
Nil options or rights over ordinary shares in New Hope Corporation Limited

Mr D.C. WILLIAMSON - BCom, FCA, MAICD (Non executive Director)

Experience

Mr Williamson ceased to be a Director of the Company on 11 July 2012. Mr Williamson was registered as a Chartered Accountant for
approximately 30 years and was principal of his own firm, Williamson Chaseling Pty Ltd.

Former Directorships in last 3 years

Australian Health & Nutrition Association Limited
Dart Energy Limited
Northern Energy Corporation Limited
Drill Torque Limited
Arrow Energy Limited

Appointed 2001 Ceased 2012
Appointed 2010 Ceased 2012
Appointed 2011 Ceased 2012
Appointed 2011 Ceased 2012
Appointed 2006 Resigned 2010

Special responsibilities

Chairman of the Audit Committee between 1 August 2011 and 11 July 2012.

Interests in shares and options

20,000 ordinary shares in New Hope Corporation Limited
Nil options or rights over ordinary shares in New Hope Corporation Limited

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Information on Directors (continued)

Mr W.H. GRANT - FAICD, Assoc. Diploma in Local Government (Non executive Director)

Experience

Mr Grant has over 35 years experience in project management, corporate and fiscal governance, local government administration and
strategic planning. He was the CEO of the South Bank Corporation in Brisbane from 1997 to 2005, and prior to that he was the General
Manager/CEO of the Newcastle City Council from 1992 to 1997. He joined the Board of New Hope Corporation in 2006.

Other current Directorships

Brisbane Development Association
Brisbane Airport Corporation
Queensland Performing Arts Centre Trust (QPAC)
Northern Energy Corporation Limited

Former Directorships in last 3 years

Appointed 2006
Appointed 2007
Appointed 2006
Appointed 2011

Urban Land Development Authority
Life Without Barriers
Williams Hall Chadwick Chartered Accountants and Business Advisors

Appointed 2007 Resigned 2009
Appointed 2002 Resigned 2011
Appointed 2009 Resigned 2011

Special responsibilities

Chairman of the Remuneration and Nomination Committee, and a member of the Audit Committee.

Interests in shares and options

30,000 ordinary shares in New Hope Corporation Limited
Nil options or rights over ordinary shares in New Hope Corporation Limited

Mr R.C. NEALE - BSc.(Hons) MAICD, MAIMM, (Managing Director)

Experience

Mr Neale has more than 40 years experience in the mining and exploration industries covering coal, base metals, gold, synthetic fuels, bulk
materials shipping, and power generation. He joined New Hope in 1996 as General Manager, and has been Chief Executive Officer since
2005. He was appointed to the board in November 2008.

Appointed 2005
Appointed 2005
Appointed 2006
Appointed 2009
Appointed 2010
Appointed 2009
Appointed 2011
Appointed 2011

Other current Directorships
Australian Coal Association
Australian Coal Research Limited
Australian Coal Association Low Emissions Technologies Ltd
Planet Gas Limited
WestSide Corporation Limited
Queensland Resources Council
Northern Energy Corporation Limited
Bridgeport Energy Limited

Former Directorships in last 3 years

Nil

Special responsibilities

Managing Director and Chief Executive Officer.

Interests in shares and options

2,171,425 ordinary shares in New Hope Corporation Limited
262,783 rights over ordinary shares in New Hope Corporation Limited

Company Secretary

The Company Secretary is Mr Matthew Busch who was appointed to the position on 16 March 2009. Mr Busch has a Bachelor of Business
from Queensland University of Technology and is a member of CPA Australia. He has more than 15 years of experience in the coal industry
and holds the dual role of Financial Controller and Company Secretary.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Remuneration report

The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

a. Remuneration Policies and Principles

The performance of the group depends upon the quality of its Directors and executives.
appropriately qualified and experienced Directors and executives.

It is the Company’s objective to attract and retain

The Remuneration and Nomination Committee is responsible for reviewing and setting the remuneration packages for Directors and executives
on an annual basis. The Remuneration and Nomination Committee engages independent consultants, utilises data from independent surveys
and reviews other market information and reports to ensure that remuneration is consistent with current industry practices. The Remuneration
and Nomination Committee also sets the Chief Executive Officer’s package at that time. The Chief Executive Officer reports to the Committee
on executive performance and remuneration arrangements.

The structure of non-executive Director and senior executive remuneration is separate and distinct.

Non-executive Director remuneration
It is intended that remuneration paid to non-executive Directors reflects the demands and responsibilities of Directors. Non-Executive Directors
fees are reviewed annually after taking into consideration the Company’s performance, market rates and level of responsibility.

Non-executive Directors receive a fixed fee that is paid within an aggregate limit as approved by the shareholders from time to time. The
current maximum aggregate is set at $1,000,000 (2011 - $1,000,000) per annum.

Executive remuneration
The Company aims to ensure that remuneration packages properly reflect the person's duties, experience and responsibilities and are aligned
so that management is rewarded in creating value for shareholders. Remuneration of senior executives is reviewed annually after taking into
consideration the Company’s performance, market rates and level of responsibility.

Executive remuneration may comprise a mix of base remuneration, short term incentives (STIs), long term incentives (LTIs) and retention
payments. The detail of each component is as follows:

Base remuneration
It comprises a cash salary,
Base remuneration for senior executives is fixed annually by the Remuneration and Nomination Committee.
superannuation, and other non-cash benefits such as a company vehicle. Executives may elect to take a vehicle allowance in lieu of a
company vehicle and may salary sacrifice a portion of their cash salary into superannuation or other benefits.

Short Term Incentives
STIs are designed to motivate and reward senior executives to achieve the short term goals of the Company as set by the board.

STIs are not provided for in senior executive employment contracts. The Remuneration and Nomination Committee sets the maximum STI
payable to each senior executive at the start of the relevant period having due regard to each executives role, responsibility and contribution to
achieving the Company’s goals. STIs are offered at the absolute discretion of the Remuneration and Nomination Committee.

At the end of each period the Remuneration and Nomination Committee will award executives a percentage of their maximum allowable STI
having regard to the performance of the executive and the Company during the period.

STIs are paid in the form of a cash bonus, with 50% payable immediately and 50% being deferred for 12 months. Payment of the deferred
component is conditional upon the executive remaining an employee of the company until the vesting date.

Long Term Incentives
LTI are designed to motivate and reward senior executives to achieve the strategic goals set by the board, align shareholder and executive
objectives, and to retain the services of senior executives.

LTIs are not provided for in senior executive employment contracts. The Remuneration and Nomination Committee sets the maximum value of
the LTI payable to each senior executive at the start of the relevant period having due regard to the each executives role, responsibility and
contribution to achieving the Company’s strategic goals. LTIs are offered at the absolute discretion of the Remuneration and Nomination
Committee.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Remuneration report (continued)
a. Remuneration Policies and Principles (continued)

At the end of each period the Remuneration and Nomination Committee will award executives a percentage of their maximum allowable LTI
having regard to the performance of the executive and the Company during the period.

LTIs may be paid in the form of Share Options or Performance Rights at the discretion of the Remuneration and Nomination Committee. The
value of an executive’s LTI is converted into Share Options or Performance Rights by reference to the 5 day volume weighted average share
price of the company over the 5 days immediately preceding issue, and the terms of the equity instrument issued.

Performance Rights and Share Options are issued subject to a service condition. Performance Rights and Share Options vest in equal
annual tranches over the period of the service condition. Upon satisfaction of the service conditions Performance Rights automatically convert
to ordinary shares, and Share Options will vest and be convertible into ordinary shares at the discretion of the employee for a period of up to 2
years from the vesting date.

Retention Payments
Retention payments are not provided for in senior executive employment contracts. The Remuneration and Nomination Committee may offer
Retention Payments to senior executives during periods of unusual corporate activity where there exists a material risk of increased staff
turnover. The recipients, quantum, timing and delivery of the retention payments are directly linked to the underlying event that has elicited
the need for the retention payment.

b. CEO Remuneration

CEO employment contract
Remuneration and other terms of employment for Mr Neale are governed by an individual employment contract. The agreement is of no fixed
term. The contract outlines the components of remuneration paid to Mr Neale but does not prescribe how remuneration levels are modified
from year to year.

The agreement with the Mr Neale provides for a cash salary, superannuation and a fully maintained motor vehicle. The CEO may elect to
take a vehicle allowance in lieu of a company vehicle and may salary sacrifice a portion of their cash salary into superannuation or other
benefits. The contract provides that Mr Neale is eligible to participate in the Company's STI and LTI programme at the sole discretion of the
Remuneration and Nomination Committee.

Either party may terminate the agreement by giving the other party 2 months notice.

The contract provides for the payment of a separation allowance upon retirement or if the contract is terminated by the Company. The
separation allowance is for a sum of $200,000 (indexed annually at CPI from the employment commencement date in 1996).

The Company may terminate the agreement without notice at any time for cause. No payment in lieu of notice, nor any payment in respect of
STI or LTI is payable under the agreement in this circumstance.

Deferred award of outstanding LTI entitlements
At the Company’s Annual General Meeting in November 2011, shareholders approved the issue of Performance Rights to Mr Neale in
respect of outstanding LTI performance payments relating to the 2008, 2009 and 2010 years. The payments had previously been deferred
pending finalisation of the Employee Performance Rights Share Plan which governs the administration of the Performance Rights and
subsequent approval of the issue of the Performance Rights at the Annual General Meeting.

Performance Rights issued to the CEO will automatically convert to ordinary shares in the company upon the satisfaction of a service
condition. However, given the deferral noted above, the Remuneration and Nomination committee elected to align the service condition and
vesting dates with the dates that would have prevailed had the Performance Rights been issued in the ordinary course.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Remuneration report (continued)
b. CEO Remuneration (continued)

The deferral of the Performance Right issue and re-alignment of vesting conditions has had an effect on the quantum of Share Based
Payment Expense recognised in this year’s remuneration report, and is summarised as follows:

Performance
Period to which LTI
relates

Date Performance
Rights Issued

Number of
Performance
Rights Issued

Vesting Date in the
Ordinary Course

Amended Vesting
Date

Impact on 2012
Share Based
Payment Expense
$

2008
2008
2008
2008
2009
2009
2009
2009
2010
2010
2010
2010
2011
2011
2011

September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
Pending approval at
the 2012 Annual
General Meeting

30,775
30,775
30,775
30,775
24,601
24,601
24,601
24,601
24,398
24,398
24,398
24,398
36,537
36,537
36,538

1 August 2009
1 August 2010
1 August 2011
1 August 2012
1 August 2010
1 August 2011
1 August 2012
1 August 2013
1 August 2011
1 August 2012
1 August 2013
1 August 2014
1 August 2012
1 August 2013
1 August 2014

1 January 2012
1 January 2012
1 January 2012
No change
1 January 2012
1 January 2012
No change
No change
1 January 2012
No change
No change
No change
1 December 2012
No change
No change

159,107
159,107
159,107
159,107
127,187
127,187
127,187
57,812
126,138
126,138
57,335
37,099
146,635
87,981
54,990
1,712,117

Retention Payment offered in 2012
During the 2012 financial year the company announced that the Board of Directors had received a number of preliminary and incomplete
proposals from third parties in relation to potential change of control transactions. As a result of this interest, the Board decided it was
appropriate to undertake a formal sale process to determine whether a proposal for New Hope was available at a price, and on terms, that
were in the best interests of all shareholders.

In order to prevent the loss of key executive personnel during the offer period the Board offered a retention payment to Mr Neale equating
to approximately 60% of his base remuneration. The terms of the Retention Payment stipulated that payment would trigger at the earliest
of:

h
h
h
h

Mr Neale being retrenched before 31 July 2012; or
at the time of the transaction completion date plus 90 days; or
at the time of the Company withdrawing from the formal sale process plus 90 days; or
31 July 2012.

On 1 March 2012 the company announced that the formal sale process had been concluded. Mr Neale was subsequently paid the
Retention Payment in June 2012, being still employed by the Company 90 days from the conclusion of the sale process.

The Retention Payment to Mr Neale has been classified as a Cash Bonus in the Remuneration Note for 2012 and is aggregated with other
cash bonuses paid in accordance with normal STI entitlements.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Remuneration report (continued)
c.
Executive Remuneration
Executive employment contracts
The agreements with the senior executives provide for a cash salary, superannuation and a fully maintained motor vehicle. Executives
may elect
their cash salary into
superannuation or other benefits.

to take a vehicle allowance in lieu of a company vehicle and may salary sacrifice a portion of

Contracts with executives may be terminated by either party giving notice as specified in their contract of employment. The contract with
Mr Denney contracts require 2 months notice, the contract with Mr Stephan requires 10 weeks notice, and the contract with Mr Busch
requires one months notice

The contracts with Mr Denney and Mr Stephan include provision for a separation payment in the event of their termination as a result of a
takeover or merger of the Company. The allowances are for less than one year’s remuneration.

The Company may terminate the agreements without notice at any time for cause. No payment in lieu of notice, nor any payment in
respect of STI or LTI is payable under the agreement in this circumstance.

Retention Payments offered in 2012
During the 2012 financial year the company announced that the Board of Directors had received a number of preliminary and incomplete
proposals from third parties in relation to potential change of control transactions. As a result of this interest, the Board decided it was
appropriate to undertake a formal sale process to determine whether a proposal for New Hope was available at a price, and on terms, that
were in the best interests of all shareholders.

In order to prevent the loss of key executive personnel during the offer period the Board offered a retention payment to certain senior
executives (including Messrs Denney, Stephan and Busch) equating to approximately 60% of their base remuneration. The terms of the
Retention Payment stipulated that payment would trigger at the earliest of:

h
h
h
h

The executive being retrenched before 31 July 2012; or
at the time of the transaction completion date plus 90 days; or
at the time of the Company withdrawing from the formal sale process plus 90 days; or
31 July 2012.

On 1 March 2012 the company announced that the formal sale process had been concluded. Executives were subsequently paid the
Retention Payment in June 2012, being still employed by the Company 90 days from the conclusion of the sale process.

The Retention Payment to Messrs Denney, Stephan and Busch has been classified as a Cash Bonus in the Remuneration Note for 2012
and is aggregated with other cash bonuses paid in accordance with normal STI entitlements.

Details of Remuneration
Details of remuneration of Directors and the key management personnel of New Hope Corporation Limited are set out below. The key
management personnel include the Directors and the following executives:

Mr R.C. Neale, Managing Director and Chief Executive Officer
Mr B.D. Denney, Chief Operations Officer (appointed 2 November 2010)
Mr S.O. Stephan, Chief Financial Officer
Mr M.J. Busch, Financial Controller and Company Secretary

Comparatives are also disclosed for the 2011 year for:

Mr M.L. Bailey, Chief Operations Officer (resigned 10 September 2010)
Mr C.C. Hopkins, General Manager - Marketing
Mr C.W. Easton, General Manager - Business Improvement
Mr J.R. Randell, General Manager – Acland
Mr P. Stringer, General Manager - West Moreton
Mr K. Palfrey, General Manager – Projects
Mr B.J. Garland, General Manager - Resource Development (resigned 30 September 2010)

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Remuneration report (continued)
d.

Details of Remuneration (continued)

Short-term employee benefits
Cash
bonus
$

Cash salary
and fees
$

Non cash
benefits
$

Long-
term
benefits

Post
employment
benefits

Super-
annuation
$

LSL
$

Share
based
payments

Termination Options

Benefits
$

and Rights
$

Total
$

Performance
related
%

2012
Non-Executive Directors

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson
Mr W.H. Grant

Executive Directors
Mr R.C. Neale

Key Management Personnel

Mr B.D. Denney
Mr S.O. Stephan
Mr M.J. Busch

276,334
126,667
126,667
151,667
141,667

-
-
-
-
-

15,833
11,400
11,400
13,650
12,750

1,340,213

1,368,000

47,169

24,074

15,833

568,124
564,801
374,055

450,875
557,000
321,750

18,948
2,398
21,487

-
-
6,747

15,833
15,833
15,833

Total Remuneration - 2012

3,670,195

2,697,625

90,002

30,821

128,365

239,250
108,750
108,750
133,750
123,750

-
-
-
-
-

15,247
9,788
9,788
9,788
9,788

1,057,108

675,000

31,034

19,905

15,247

-
-
-
-
-

-
-
-

-
-
-
-
-

292,167
138,067
138,067
165,317
154,417

0%
0%
0%
0%
0%

1,712,117

4,507,406

68%

88,331
235,659
115,502

1,142,111
1,375,691
855,374

47%
58%
51%

2,151,609

8,768,617

-
-
-
-
-

254,497
118,538
118,538
143,538
133,538

0%
0%
0%
0%
0%

1,798,294

38%

391,751
96,436
484,712
262,555
282,747
250,717
323,578
257,094
304,049
87,200

-
-

112,500
50,500
115,000
40,000
123,000
109,000
114,000

12,147
10,784
3,183
18,129
25,139
16,859
27,029
23,857
-
7,525

-
-
-
5,334
4,789
-
-
-
-
-

11,399
2,474
15,247
15,247
15,247
15,247
15,247
15,247
15,247
3,800

-
33,122
-
-
-
-
-
-
-
33,116

-
14,252
-
-
-
-
-
-
-
9,501

415,297
157,068
615,642
351,765
442,922
322,823
488,854
405,198
433,296
141,142

0%
9%
18%
14%
26%
12%
25%
27%
26%
7%

Total Remuneration - 2011

4,512,197

1,339,000

175,686

30,028

194,048

66,238

23,753

6,340,950

2011
Non-Executive Directors

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson
Mr W.H. Grant

Executive Directors
Mr R.C. Neale

Key Management Personnel

Mr B.D. Denney
Mr M.L. Bailey
Mr S.O. Stephan
Mr M.J. Busch
Mr C.C. Hopkins
Mr C.W. Easton
Mr J.R. Randell
Mr P. Stringer
Mr K. Palfrey
Mr B.J. Garland

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Remuneration report (continued)
e.

Information in respect of share based compensation
Share based compensation – options
Options are granted under the New Hope Corporation Limited Employee Share Option Plan (Option Plan). Membership of the Option Plan
is open to those senior employees and those Directors of New Hope Corporation Limited, its subsidiaries and associated bodies corporate
whom the Directors believe have a significant role to play in the continued development of the Group's activities.

Options are granted for no consideration. Options are granted for a five year period and vest after the third anniversary of the date of grant.

The assessed fair value at grant date of options granted to the individuals is allocated equally over the period from grant date to vesting
date and the amount is included in the remuneration tables above. Fair values at grant date are independently determined using a monte
carlo option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant
date and the expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the
option.

The terms and conditions of each grant of options affecting remuneration of key management personnel in the previous, this or future
reporting periods and the associated pricing model inputs are as follows:

Date vested

Grant Date

13 August 2007

and exercisable Expiry date
14 August 2010 12 August 2012

Exercise
price

$2.104

Price at
grant date

Expected
volatility

Expected
dividend yield

Risk free
interest rate

Value per
option at
grant date

$2.220

44.00%

4.02%

6.04%

$0.745

Share options granted to Directors and key management personnel
Details of unlisted management options over ordinary shares in the Company as at 31 July 2012, provided as remuneration to each
Director of New Hope Corporation Limited and each of the key management personnel of the Group are set out below. When exercisable,
each option is convertible into one ordinary share in New Hope Corporation Limited. Further information on the options is set out in note 30
to the financial statements.

Number of options granted
during the year

Number of options vested
during the year

Number of ordinary shares
issued on the exercise of
options during the year

Amount paid per share

($)

2012

2011

2012

2011

2012

2011

2012

2011

Key Management Personnel
Mr M.L. Bailey
Mr B.J. Garland

-
-

1,500,000
1,000,000

-
-

1,500,000
1,000,000

-
-

2.10
2.10

No options have been issued to R.D. Millner, P.R. Robinson, D.J. Fairfull, D.C. Williamson or W.H. Grant.

There were no unlisted ordinary shares of New Hope Corporation Limited under option at the date of this report.

Share based compensation – rights
Rights are granted under the New Hope Corporation Limited Employee Performance Share Rights Plan (Rights Plan). Membership of the
Rights Plan is open to those senior employees and those Directors of New Hope Corporation Limited, its subsidiaries and associated
bodies corporate whom the Directors believe have a significant role to play in the continued development of the Group’s activities.

Rights will be granted for no consideration. Rights to be granted in accordance with the Rights Plan will be allotted at the sole discretion of
the Directors of the Company and in accordance with the Group’s reward and retention strategy. Rights will vest and automatically convert
to ordinary shares in the company following the satisfaction of the relevant service conditions. Service conditions applicable to each issue
of Rights are determined by the board at the time of grant.

The assessed fair value at grant date of Rights granted to the individuals is allocated equally over the period from grant date to vesting date
and the amount will be included in the remuneration of the executive. Fair values at grant date are determined by reference to the relevant
volume weighted average price as determined by the Directors.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Remuneration report (continued)
e.

Information in respect of share based compensation (continued)
The terms and conditions of each grant of rights affecting remuneration of key management personnel in the previous, this or future reporting
periods and the associated pricing model inputs are as follows:

Performance Period to
which LTI relates

Grant Date

Vesting Date

Value of a
Right at Grant
Date

2008
2008
2009
2009
2009
2010
2010
2010
2010
2011
2011
2011
2011
2011

January 2012
August 2012
January 2012
August 2012
August 2013
January 2012
August 2012
August 2013
August 2014
August 2012

October 2011
October 2011
October 2011
October 2011
October 2011
October 2011
October 2011
October 2011
October 2011
December 2011
December 2011 December 2012
December 2011
December 2011
December 2011

August 2013
August 2014
August 2015

$5.17
$5.17
$5.17
$5.17
$5.17
$5.17
$5.17
$5.17
$5.17
$6.02
$6.02
$6.02
$6.02
$6.02

Share Rights granted to Directors and key management personnel
Details of Rights over ordinary shares in the Company as at 31 July 2012, provided as remuneration to each Director of New Hope Corporation
Limited and each of the key management personnel of the Group are set out below. Upon satisfaction of the performance conditions each right
will automatically vest and convert into one ordinary share in New Hope Corporation Limited. Further information on the Rights is set out in
note 30 to the financial statements.

Number of rights granted during
the year

Number of rights vested during
the year

Number of ordinary shares
issued on the vesting of rights
during the year

2012

2011

2012

2011

2012

2011

Directors
Mr R.C. Neale

Key Management Personnel
Mr B.D. Denney
Mr S.O. Stephan
Mr M.J. Busch

428,708

32,040
73,888
36,100

-
-
-

165,925

-
10,040
5,020

-
-
-

165,925

-
10,040
5,020

-
-
-

No Rights have been issued to R.D. Millner, P.R. Robinson, D.J. Fairfull, D.C. Williamson or W.H. Grant.

There were 274,470 rights issued over ordinary shares of New Hope Corporation Limited at the date of this report.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Remuneration report (continued)
f.

Additional information
Other information relating to equity based compensation

A
Remuneration
consisting of
options

B
Value at
grant date
$

C
Value at
exercise date
$

D
Value at
lapse date
$

E
Total of
columns B-D
$

38%
8%
17%
14%

2,309,591
192,818
410,670
200,254

924,883

-
55,964
27,982

-
-
-
-

3,234,474
192,818
466,634
228,236

Name

Mr R.C. Neale
Mr B.D. Denney
Mr S.O. Stephan
Mr M.J. Busch

A = The percentage of the value of remuneration consisting of rights, based on the value of rights expensed during the current year.
B = The value at grant date calculated in accordance with AASB2 Share Based Payment of rights granted during the year as part of remuneration.
C = The value at exercise date of the rights that were granted as part of remuneration and were exercised during the year, being the intrinsic value of the
rights at that date.
D = The value at lapse date of the rights that were granted as part of remuneration and that lapsed during the year.

Consequences of performance on shareholder wealth
The Company's performance is not only impacted by market factors, but also by employee performance. The financial performance for the last
five years is shown below.

Net profit attributable to shareholders (A$000's)
Profit after tax from continuing operations (A$000's)
Dividends paid during the year (cents / share)
Share price as at 31 July ($ / share)
Shareholders funds (A$000's)

Year ended 31 July

2012
167,126
167,125
26.00
4.07
2,252,916

2011
503,234
503,099
23.75
5.37
2,367,383

2010
183,832
183,832
82.25
4.71
2,339,525

2009
1,950,392
1,950,392
16.25
5.34
2,748,498

2008
90,684
90,684
7.75
4.69
827,607

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Shares issued on the vesting of rights
Since the end of the financial year 115,281 rights have been granted and converted to ordinary shares in the company.

Loans to directors and executives
There were no loans to directors and executives granted during the reporting period, nor were there any outstanding loans as at balance date.

Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and
experience with the Company are important.

Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for non-audit services provided during the year are set out below.

The Board of Directors has considered the position, and in accordance with the advice received from the audit committee, is satisfied that the
provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 .
The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence
requirements of the Corporations Act 2001 for the following reasons:

the types of non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the
auditor;
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional
Accountants .

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-
related audit firms (refer note 32):

Audit Services

PricewaterhouseCoopers Australian firm for audit and review of financial reports and
other audit work under the Corporations Act 2001
Non PricewaterhouseCoopers audit firms for the audit or review of financial reports of
any entity in the Group

Total remuneration for audit services

Non-audit services

PricewaterhouseCoopers Australian firm:
Transaction tax & advisory services
General advisory services
Tax compliance services
Tax compliance services - MRRT
Research and development compliance services

Non PricewaterhouseCoopers firms:

Taxation services
Total remuneration for non-audit services

Total auditors remuneration

Consolidated

2012

2011

279,232

302,447

279,232

10,000
312,447

908,441
266,971
217,272
419,498
282,984

429,509
100,611
315,726

208,777

2,095,166

6,130
1,060,753

2,374,398

1,373,200

Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 23.

Rounding of amounts
The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the
"rounding off" of amounts in the Directors' report. Amounts in the Directors' report have been rounded off in accordance with that Class Order to
the nearest thousand dollars, or in certain cases, to the nearest dollar.

New Hope Corporation Limited and Controlled Entities

Directors Report - 31st July 2012

Meetings of Directors
The following table sets out the number of meetings of the Company's Directors held during the year ended 31 July 2012 and the number of
meetings attended by each Director:

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson
Mr W.H. Grant
Mr R.C. Neale

Full meetings
of Directors

Held
17
17
17
16
17
17

Attended
17
16
16
16
16
16

Audit Committee

Held

Attended

Remuneration and
Nomination Committee
Attended

Held

3
3
3

1
1

Signed at Sydney this 17th day of September 2012 in accordance with a resolution of Directors.

R.D. Millner
Director

D.J. Fairfull
Director

Auditor's Independence Declaration

As lead auditor for the audit of New Hope Corporation Limited for the year ended 31 July 2012, I declare
that, to the best of my knowledge and belief, there have been:

(a)

no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and

(b)

no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of New Hope Corporation Limited and the entities it controlled during the
period.

Simon Neill
Partner
PricewaterhouseCoopers

Sydney
17 September 2012

PricewaterhouseCoopers, ABN 52 780 433 757
Riverside Centre, 123 Eagle Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Liability limited by a scheme approved under Professional Standards Legislation

New Hope Corporation Limited

Corporate Governance Statement

This Corporate Governance Statement has been summarised into sections in line with the eight core corporate governance principles as specified
in the Australian Securities Exchange (ASX) Corporate Governance Council's revised Corporate Governance Principles and Recommendations.

Foundations for management and oversight
The Board is ultimately responsible for the operations, management and performance of the Company.
In discharging this responsibility, the Board
delegates to senior management, whose role is to manage the Company in accordance with the directions and policies set by the Board. The
Board monitors the activities of senior management in the performance of their delegated duties.

It is the responsibility of the Board to determine policies, practices, management and the operations of the Company and to ensure that the
Company is compliant with statutory, legal and other regulatory obligations. Details of these policies can be accessed through the Company
Secretary.

Responsibilities of the Board include the following:
h
h

Determining corporate strategies, policies and guidelines for the successful performance of the Company in the present and the future;
Monitoring the Company's overall performance and financial results, adopting annual budgets and approving New Hope Corporation Limited's
financial statements;
Accountability to shareholders;
Ensuring that risk management procedures and compliance and control systems are in place and operating effectively;
Monitoring the performance and conduct of senior management and ensuring adequate succession plans are in place; and
Ensuring the Company continually builds an honest and ethical culture.

h
h
h
h

The performance of non-executive Directors is reviewed by the Remuneration and Nomination Committee with any unsatisfactory performance
referred to the remainder of the Board. This review was undertaken during the year.

The efficiency, effectiveness and operations of the Board are continuously subjected to informal monitoring by the Remuneration and Nomination
Committee and the Board as a whole.

The performance of senior management was reviewed by the Remuneration and Nomination Committee during the year in accordance with its
established procedures.

Board structure
At the date of this report the Board consists of 4 non-executive Directors and one executive Director. Details of the Directors of the Company, their
experience, expertise, qualifications, and attendance at meetings are set out in the Directors' Report.

Key elements of the Board composition include:
h
h
h
h
h

In accordance with the Company's Constitution, the Board should comprise no less than 3 or more than 10 Directors.
The Chairman of the Board is a non-executive Director.
The non-executive Chairman and Chief Executive Officer roles are separate.
The Board comprises a mix of Directors from different backgrounds with complementary skills and experience.
The size of the Board and membership represents an appropriate balance between Directors with experience and knowledge of the Group and
Directors with an external perspective.

The Company has not strictly complied with ASX Best Practice Recommendations in that not all of the non-executive Directors are independent.
Mr Robert Millner (Chairman of Directors), Mr Peter Robinson and Mr David Fairfull are Directors of New Hope Corporation Limited's major
shareholder, Washington H. Soul Pattinson and Company Limited. Mr David Williamson and Mr William Grant are considered independent.

Whilst all the non-executive Directors cannot be considered "independent" in accordance with the ASX Best Practice Recommendations, all
Directors are expected to bring their independent views and judgement to the Board and, in accordance with the Corporations Act 2001, must
inform the Board if they have any interest that could conflict with those of the Company. Where the Board considers that a significant conflict
exists, it may exercise its discretion to determine whether the Director concerned may be present at the meeting while the item is considered. Also,
the Board considers that due to the extensive experience and knowledge that these Directors have of the business, it would be contrary to
shareholders' best interests if the Directors were precluded from holding the position of Director on these grounds.

New Hope Corporation Limited

Corporate Governance Statement

In the discharge of their duties and responsibilities, the Directors individually (as well as the Board) have the right to seek independent
professional advice at the Company's expense. However, for advice to individual Directors, prior approval of the Chairman is required, which is
not to be unreasonably withheld.

The Remuneration and Nomination Committee consists of non-executive Directors who periodically review the membership and performance of
the Board having regard to the Company's particular needs, both present and future. These periodic reviews are conducted at least annually or
more frequently if deemed appropriate.

The Board sets goals and objectives for the Board, its Committees and Directors. Performance is measured against these goals and objectives in
such manner deemed appropriate by the Board. The performance of the Board and its Committees was reviewed during the year in accordance
with established procedures.

Directors are initially appointed by the full Board, subject to election by shareholders at the next Annual General Meeting. Under the Constitution,
one third of the Board (excluding any Managing Director) retire from office each year and if eligible submit themselves for re-election by
shareholders at the Annual General Meeting.

Ethical and responsible decision making
The Company has an established Code of Conduct dealing with matters of integrity and ethical standards. The code is designed to comply with
the legal and other obligations of legitimate stakeholders and other interested parties and to foster a culture of compliance. All Directors,
executives and employees are expected to abide by the code of conduct and specific policies in place, and to bring to the attention of senior
management or the Board instances of unethical practices. The code and policies cover:

h
h
h
h
h
h
h
h

Professional conduct;
Ethical standards;
Standards of workplace behaviour and equal opportunity;
Relationships with customers, suppliers and competitors;
Confidentiality and continuous disclosure;
Anti-discrimination and harassment;
Trading in Company securities; and
The environment.

The Company's diversity policy is contained in the Code of Conduct , the Equal Employment Opportunity Policy, and the Recruitment and
Selection Policy. Through these principles based documents the Company aims to foster a workplace where employees feel that they are a
valued member of the organisation; that they are treated fairly and that inappropriate behaviour does not take place. The company is also
committed to ensuring that employees and all other individuals involved in its operations are provided with equal opportunity in all aspects of
recruitment, selection and employment.

It is the Company’s policy that when recruiting and selecting staff that the best person for the position is chosen in each case. This is achieved by
basing selection decisions on the merit principle whereby individuals shall be selected based on their capability to meet the requirements of the
position and who have the right position related attributes. Unlawful discrimination of either a positive or negative bias (including gender) is not
tolerated.

The Company is an equal opportunity employer and is committed to ensuring that all applicants for selection (employees, Officers and Directors)
are not unlawfully discriminated against. The Company seeks to attract and retain employees across a broad experience base relevant to the
individuals to reach their full potential, whilst
Company. The Company aims to remunerate people fairly and provide opportunities for all
understanding the need to be flexible to each individual’s personal circumstances.

New Hope Corporation Limited

Corporate Governance Statement

The Company believes that the most appropriate measurable objectives in addressing gender diversity will deliver outcomes that are
aligned to the principles outlined above. The following table outlines the Company’s measurable objectives in achieving diversity.

Measurable Objective

Progress Achieved

Develop a culture that embraces diversity
that is supported by corporate policy.

Policies are in place and readily available to all employees at all times. Policies are
formally communicated to employees during their induction and periodic formal refresher
training is also conducted.

The Company’s recruitment processes
and documents ensure the Company
appeals to, and targets, a diverse pool of
potential employees.

Formal recruitment procedures are in place that necessitates the involvement of
the
Human Resources Department in all stages of the recruitment process which ensures that
corporate policy is adhered to and that the recruitment and selection process is free from
unlawful bias.

procedures
and
the delivery of a
tolerant and accommodating

Ensure
policies,
guidelines support
flexible,
work environment.

Through various policies and guidelines (Education Assistance, Training and Development,
Leave, Parental Leave, Salary Packaging, Flexibility and Wellbeing) the Company has
acknowledged the need for, and provides opportunities for employees to achieve, flexibility
in their work environment.

A commitment
to pay equity whereby
remuneration is set based on the market
based
individual’s
qualifications and experience.

each

data

and

The company has also successfully implemented a unique “Tuckshop Roster”. This roster
runs from 9am to 3pm and provides employees the opportunity to work in the mining
industry operating heavy machinery whilst the permanent operators take scheduled breaks.
This roster has been particularly appealing to parents with school age children.

location. This is further

Remuneration is initially set (and reviewed at least annually) by reference to independent
market data which accounts for both the skills required for the role, the industry, and
employment
linked to each employee’s qualifications and
experience. Procedures dictate that the Human Resources Department are involved in all
steps of the remuneration setting process, including the final executive review and annual
“norming” process which ensures that all employees are remunerated fairly, reasonably and
without fear of undue bias.

The following table shows the proportion of women employed by the Company.

Role

Directors *
Senior executives
Total employees

Number of women

Number of men

Total employees

Female percentage

0
2
69

5
12
532

5
14
601

0%
14%
11%

* On 7 September 2012 the Company announced that Ms Sue Palmer had been appointed to the position of non-executive Director
and Chairperson of the Audit Committee.

Integrity in financial reporting
New Hope Corporation Limited has an established Audit Committee, which has its own charter outlining the committee's function,
composition, authority, responsibilities and reporting. The current members of the Audit Committee are non-executive Directors Mr W.H.
Grant and Mr D.J. Fairfull (Acting Chairman). The Company's non-executive Chairman Mr R.D. Millner is not a member of the Audit
Committee. The non-executive Chairman and other Directors, Chief Executive Officer, Chief Financial Officer, Company Secretary and the
internal auditor may attend Audit Committee meetings by invitation.

On 7 September 2012 the Company announced that Ms Sue Palmer would assume the role of non-executive Director and Audit Committee
Chairperson with effect from 1 November 2012. Ms Palmer’s appointment follows the sad passing of Mr David Williamson (independent
non-executive Director and Audit Committee Chairperson) in July 2012.

New Hope Corporation Limited

Corporate Governance Statement

During the period from July 2012 to 1 November 2012 the Company notes that it has not complied with the best practice recommendations
in that the Audit Committee:

h
h
h

Did not consist of a majority of independent Directors;
Did not have at least three members; and
The acting Chairperson was not an independent Director.

Despite these non-compliances, the Company believes that the integrity of the Audit Committee and the governance of the Company have
been fully maintained at all times.

Further details of the Directors' qualifications, terms of office, and attendance at audit committee meetings are set out in the Directors' report
on pages 10 to 12 and 22.

The external auditors (PricewaterhouseCoopers) are requested by the Audit Committee to attend the appropriate meetings to report on the
results of their review and audit for the half year and full year respectively.

The external and internal auditors both have direct access to the Audit Committee if required.

The function of the Audit Committee is to assist the Board in fulfilling its statutory and fiduciary responsibilities relating to:
h
h

The external reporting of financial information, including the selection and application of accounting policies;
The independence and effectiveness of the external auditors. The Audit Committee regularly evaluates the performance of its external
auditors, considers the appropriateness of the external audit engagement partners including their rotation, and considers the need and
timing for putting the external audit role out to tender;
The effectiveness of internal control processes and management information systems;
Compliance with the Corporations Act, ASX Listing Rules and any other applicable requirements; and
The application and adequacy of risk management systems within the Company.

h
h
h

The Chief Executive Officer and Chief Financial Officer are required to state in writing to the Board, by submission to the Audit Committee,
that the Company's financial statements present a true and fair view, in all material respects, of the Company's financial position and
operational results and that they are in accordance with relevant accounting standards.

Timely and balanced disclosure
The Company has a Continuous Disclosure Policy to ensure compliance with the ASX Listing Rules and Corporations Act continuous
disclosure requirements. The policy requires timely disclosure through the ASX company announcement platform of information concerning
the Company that a reasonable person would expect to have a material effect on the price or value of the Company's securities. The Board
is responsible for determining disclosure obligations and the Company Secretary is the nominated Continuous Disclosure Officer for the
Company.

Respect the rights of shareholders
The Board is committed to ensuring that shareholders, the stock market and other interested parties are fully informed of all material matters
affecting the Company. The dissemination of information is mainly achieved as follows:
h
h
h

An annual report is available to be distributed to shareholders in October each year and is placed on the Company's website;
Where possible, significant information is posted on the Company's internet website as soon as it is disclosed to the market; and
The external auditor is requested to attend the Annual General Meeting to answer shareholders' questions about the conduct of their
audit and the content of the auditor's report.

Risk recognition and management
The Company is committed to identifying and managing areas of significant business risk to protect shareholders, employees, earnings and
the environment. The framework to achieve this objective is promulgated in the Company's Risk Management policy. The Risk Management
and Internal Audit function within the Company is responsible for the oversight and monitoring of performance of the policy. Arrangements
in place, as set out in the company's Risk Management policy, include:
h
Regular detailed financial, budgetary and management reporting;
h
Procedures to manage financial, operational, strategic, market, and regulatory risks;
h
Established organisational structures, procedures and policies dealing with the areas of health and safety, environmental
industrial relations and legal and regulatory matters;
Comprehensive insurance and risk management programs;
Procedures requiring Board approval for all borrowings and capital expenditure beyond minor levels; and
Where applicable, the utilisation of specialised staff and external advisors.

h
h
h

issues,

New Hope Corporation Limited

Corporate Governance Statement

The Chief Executive Officer and Chief Financial Officer are required to state in writing to the Board, by submission to the audit committee, that the
risk management and internal control compliance systems implemented by the Board are operating efficiently and effectively and that the directors
declaration given under section 259A Corporations Act 2001 (Cth) is founded on a sound system of risk management and control. The required
statement has been received from the Chief Executive Officer and Chief Financial Officer relative to the year of income.

Remunerate fairly and responsibly
The Remuneration and Nomination Committee consists of non-executive Directors who are responsible for reviewing and setting remuneration and
other terms of employment for non-executive Directors. Details of the attendance at meetings of the Remuneration and Nomination Committee is
included on page 22 of the Directors' report.

Non executive Directors' fees are reviewed annually after taking into consideration the Company's performance, market rates and level of
responsibility. The aggregate amount of fees which may be paid to non-executive Directors is subject to the approval of shareholders at the Annual
General Meeting and is currently set at $1,000,000 (2011 - $1,000,000) per annum.

Remuneration of senior executives is reviewed annually by the Remuneration and Nomination Committee, taking into consideration the Company's
performance, market rates and levels of responsibility.

Further information of Directors' and executives' remuneration is set out in the Directors Report and in the Notes to the Financial Statements.

The Company’s Share Trading Policy has been disclosed to the market via the ASX Company Announcement Platform. The policy provides that:
h
Trading is prohibited when Directors and employees are in possession of price sensitive information which is not available to the public;
h
Trading is prohibited during the period of four weeks prior to the announcement of the Company’s half year and full year results;
h
The Company has established the following share trading windows each for a period of 6 weeks commencing from:

o The release of the Company's annual result to the Australian Securities Exchange;
o The release of the Company's half yearly result to the Australian Securities Exchange;
o The date of the Annual General Meeting; and
o The release of a prospectus;

At times other than those referred to above, Directors and employees may trade after seeking approval from the Chairman of the Board, or in
his absence, the Managing Director of New Hope Corporation Limited.

New Hope Corporation Limited

Annual Financial Report
for the year ended 31st July 2012

Contents

Financial Report

Statement of Comprehensive Income
Balance Sheet
Statement of Changes in Equity
Cash Flow Statement
Notes to the financial statements
Directors' declaration

Independent audit report to the members

Page

30
31
32
33
34
77
78

The financial report is the consolidated financial statements of the consolidated entity consisting of New Hope Corporation Limited and its
subsidiaries. The financial report is presented in the Australian currency.

New Hope Corporation Limited is a company limited by shares on the Australian Securities Exchange (ASX). The Company is incorporated
and domiciled in Australia, and its registered office and principal place of business is:

New Hope Corporation Limited
3/22 Magnolia Drive
BROOKWATER QLD 4300

A description of the nature of the consolidated entity's operations and its principal activities is included in the Directors' report on pages 2 to
9, which is not part of this financial report.

The financial report was authorised for issue by the Directors on 17 September 2012. The Company has the power to amend and reissue
the financial report.

Through the use of the internet, the Company has ensured that corporate reporting is timely, complete and available globally at minimum
cost to the Company. All financial reports and other announcements to the ASX are available on the Investor Relations pages of the
website: www.newhopecoal.com.au.

New Hope Corporation Limited and Controlled Entities

Statement of Comprehensive Income
for the year ended 31st July 2012

Revenue from continuing operations
Other income

Expenses

Cost of sales
Marketing and transportation
Administration
Other expenses
Impairment of assets
Share of net profit / (loss) of associates
Profit before income tax

Income tax expense

Profit after income tax for the year

Profit attributable to:

New Hope Shareholders
Non-controlling interests

Other comprehensive income

Changes to the fair value of cash flow hedges, net of tax
Transfer to the P&L - cashflow hedges, net of tax
Changes to the fair value of available for sale financial assets, net of tax
Transfer to the P&L - available for sale financial assets, net of tax
Other comprehensive income for the year, net of tax

Total comprehensive income for the year

Total comprehensive income attributable to:

New Hope Shareholders
Non-controlling interests

Notes

5
6

7
38

27
27
27
27

2012
$000

2011
$000

767,525
149
767,674

(355,901)
(140,932)
(26,101)
(6,083)
(39,191)
(647)
198,819

(31,694)

167,125

167,126
(1)
167,125

10,708
(17,934)
(11,242)
-
(18,468)

148,657

148,658
(1)
148,657

662,404
524,127
1,186,531

(304,003)
(127,356)
(17,464)
(4,633)
(13,531)
(447)
719,097

(215,998)

503,099

503,234
(135)
503,099

39,526
(30,190)
(17,712)
(312,804)
(321,180)

181,919

182,054
(135)
181,919

Earnings per share for profit attributed to ordinary equity holders of the Company

Basic earnings per share (cents / share)
Diluted earnings per share (cents / share)

34
34

20.1
20.1

60.6
60.6

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

New Hope Corporation Limited and Controlled Entities

Balance Sheet
as at 31st July 2012

Current assets

Cash and cash equivalents
Receivables
Inventories
Held to maturity investments
Derivative financial instruments
Other

Total current assets

Non-current assets
Receivables
Investments accounted for using the equity method
Available for sale financial assets
Derivative financial instruments
Property, plant and equipment
Exploration and evaluation assets
Intangible assets

Total non-current assets
Total assets

Current liabilities

Accounts payable
Current tax liabilities
Provisions

Total current liabilities

Non-current liabilities

Deferred tax liabilities
Provisions

Total non-current liabilities
Total liabilities
Net assets

Equity

Contributed equity
Reserves
Retained profits
Capital and reserves attributable to New Hope Shareholders
Non-controlling interests

Total equity

Notes

2012
$000

2011
$000

10
11
12
13
35
14

15
38
16
35
17
18
20

23
25

26
27(a)
27(b)

70,990
17,124
59,560
1,446,975
20,393
299
1,615,341

9,208
32,530
73,140
9,971
659,202
39,228
20,799
844,078
2,459,419

40,460
18,490
28,845
87,795

82,917
35,791
118,708
206,503
2,252,916

92,509
50,570
2,109,104
2,252,183
733
2,252,916

75,149
110,962
63,408
1,599,552
31,880
2,802
1,883,753

5,440
31,825
92,389
8,807
664,201
8,085
54,748
865,495
2,749,248

51,639
166,270
19,254
237,163

122,566
22,136
144,702
381,865
2,367,383

91,500
73,851
2,157,849
2,323,200
44,183
2,367,383

The above balance sheet should be read in conjunction with the accompanying notes.

New Hope Corporation Limited and Controlled Entities

Statement of Changes in Equity
for the year ended 31st July 2012

Contributed
Equity

Reserves

Retained
Earnings

Non-controlling
Interests

Notes

$000

Total

$000

Balance at 1 August 2010

84,226

403,504

1,851,795

2,339,525

Profit for the year
Other comprehensive income
Total comprehensive income for the year

-
-
-

503,234

(321,180)
(321,180)

503,234

(135)
-
(135)

503,099
(321,180)
181,919

Transactions with owners in their capacity as owners

Contributions of equity, net of transaction costs
Dividends provided for or paid
Special dividend paid
Transfer from share based payment reserve to equity
Net movement in share based payment reserve
Elimination on acquisition of subsidiary
Non controlling interests on acquisition of subsidiary

Balance at 31 July 2011

Profit for the year
Other comprehensive income
Total comprehensive income for the year

Transactions with owners in their capacity as owners

Dividends provided for or paid
Special dividend paid
Transfer from share based payment reserve to equity
Net movement in share based payment reserve
Premium paid on acquisition of non-controlling interest
Acquisition of non-controlling interests
Share of non-controlling interests equity contributions

26
9
9
27
27
27

9
9
27
27
27
37

5,260
-
-
2,014
-
-
-
7,274

-
-
-
(2,014)
25
(6,484)
-
(8,473)

-
(80,948)
(116,232)

-
-
-
-

(197,180)

-
-
-
-
-
-
44,318
44,318

5,260
(80,948)
(116,232)

-
25
(6,484)
44,318
(154,061)

91,500

73,851

2,157,849

44,183

2,367,383

-
-
-

-
(18,468)
(18,468)

167,126

(1)
-
(1)

167,125
(18,468)
148,657

-
-
1,009
-
-
-
-
1,009

-
-
(1,009)
2,225
(6,029)
-
-
(4,813)

(91,337)
(124,534)

-
-
-
-
-

(215,871)

-
-
-
-
-
(44,177)
728
(43,449)

(91,337)
(124,534)

-
2,225
(6,029)
(44,177)
728
(263,124)

Balance at 31 July 2012

92,509

50,570

2,109,104

733

2,252,916

The above statement of changes in equity should be read in conjunction with the accompanying notes.

New Hope Corporation Limited and Controlled Entities

Cash Flow Statement
for the year ended 31st July 2012

Cash flows from operating activities

Receipts from customers inclusive of GST
Payments to suppliers and employees inclusive of GST

Income taxes paid
Net cash inflow / (outflow) from operating activities

Cash flows from investing activities

Payments for property, plant and equipment
Payments for exploration and evaluation activities
Payments for purchase of subsidiary, net of cash acquired
Payments for available for sale financial assets
Payments for investments in associates
Refunds of / (payments for) security and bond guarantees
Proceeds from / (payments for) held to maturity investments
Proceeds from sale of property, plant and equipment
Proceeds from sale of investment
Interest received
Net cash inflow / (outflow) from investing activities

Cash flows from financing activities
Proceeds from issue of equity
Payments for purchase of non-controlling interest, net of cash acquired
Dividends paid
Net cash inflow / (outflow) from financing activities

Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the financial year

Notes

2012
$000

2011
$000

718,050
(466,509)
251,541

(208,516)
43,025

(39,045)
(31,143)
-
(5,305)
(2,008)
864
137,486
58,748
-

101,741
221,338

1,736
(50,207)
(215,871)
(264,342)

21
75,149
(4,180)
70,990

569,090
(439,705)
129,385

(66,652)
62,733

(49,305)
(5,355)
(171,960)
(33,492)
(29,813)
(2,293)
(270,000)
252
576,211
94,005
108,250

5,260
-

(197,180)
(191,920)

(20,937)
103,608
(7,522)
75,149

The above cash flow statement should be read in conjunction with the accompanying notes.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated. The financial report covers New Hope Corporation Limited and its
subsidiaries as the consolidated entity.

Basis of preparation of accounts
This general purpose financial
pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001.

report has been prepared in accordance with Australian Accounting Standards, other authoritative

(i) Compliance with International Financial Reporting Standards (IFRS)
The consolidated financial statements of the New Hope Corporation Limited Group also comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).

(ii) Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available for sale
financial assets and derivative instruments carried at fair value.

(iii) Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates.
It also requires management to exercise its
judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial statements, are disclosed in note 3.

Principles of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of New Hope Corporation Limited ("Company" or
"parent entity") as at 31st July 2012 and the results of all subsidiaries for the year then ended. New Hope Corporation Limited and its
subsidiaries together are referred to in this financial report as the Group or the consolidated entity.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating
policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that
control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group (note 1(h)).

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are
also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement of
comprehensive income, statement of changes in equity and balance sheet respectively.

(ii) Associates
Associates are all entities over which the group has significant influence but not control or joint control, generally accompanying a shareholding
Investments in associates are accounted for using the equity method of accounting, after initially
of between 20% and 50% of the voting rights.
being recognised at cost. The Group's investment in associates includes goodwill (net of any accumulated impairment loss) identified on
acquisition (refer to note 38).

The Group's share of its associates' post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition other
comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. Dividends receivable from associates are recognised as reduction in the carrying amount of the investment.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Principles of consolidation (continued)
(ii) Associates (continued)
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term
receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies
of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

As the group only has significant influence, it is unable to obtain reliable information at year end on a timely basis. The results of associates are
equity-accounted from their most recent audited annual financial statements or unaudited interim financial statements, all within three months of
the year end of the group. Adjustments are made to the associates’ financial results for material transactions and events in the intervening
period.

(iii) Joint Ventures
The proportionate interests in the assets, liabilities and expenses of a joint venture activity have been incorporated in the financial statements
under the appropriate headings. Details of the joint venture are set out in note 39.

Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief
operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been
identified as comprising of the Board, Chief Executive Officer (CEO), Chief Operating Officer (COO) and Chief Financial Officer (CFO).

Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment
in which the entity operates ("the functional currency"). The consolidated financial statements are presented in Australian dollars, which is New
Hope Corporation Limited's functional and presentation currency.

(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as
qualifying cash flow hedges and qualifying net investment hedges.

Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value
gain or loss. Translation differences on non-monetary items, such as equities classified as available for sale financial assets, are included in the
fair value reserve in equity.

(iii) Group companies
The results and financial position of all of the Group entities that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
h
h

assets and liabilities for each balance sheet presented are translated at the closing rates at the date of that balance sheet;
income and expenses for each income statement and statement of comprehensive income are translated at average exchange rates
(unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the dates of the transactions); and
h
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net
in foreign entities, are recognised in other
comprehensive income. When a foreign operation is sold, a proportionate share of such exchange differences is reclassified to profit or loss as
part of the gain or loss on sale where applicable.

investment

Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade
allowances, rebates and amounts collected on behalf of third parties.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition (continued)
The Group recognises revenue where the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to
the entity and specific criteria have been met for each of the Group's activities as described below. The Group bases its estimates on historical
results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenue is recognised
for the major business activities as follows:
h

Coal sales revenue is recognised at the time the risks and benefits of ownership have been transferred to the customer in accordance with
the sales terms. For export sales this is normally at the time of loading the shipment, and for domestic sales this is generally at the time the
coal is delivered to the customer.
Service fee income and management fee income is recognised as the services are performed.
Interest income is recognised as it accrues using the effective interest method.
Rental income is recognised on a straight line basis over the lease term.
Dividend income is taken into profit when the right to receive payment is established. This applies even if they are paid out of pre-
acquisition profits. However, the investment may need to be tested for impairment as a consequence (note 1(i)).

h
h
h
h

Income tax
The income tax expense or revenue for the period is the tax payable on the current period'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, and to unused tax
losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in
the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.

Deferred tax assets are recognised for the deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in
controlled entities where the company is able to control the timing of the reversal of the temporary difference and it is probable that the
differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or
directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Investment allowances
Companies within the Group may be entitled to claim special tax deductions for investments in qualifying assets (investment allowances). The
Group accounts for such allowances as tax credits, which means that the allowance reduces income tax payable and current tax expense. A
deferred tax asset is recognised for unclaimed tax credits that are carried forward as deferred tax assets.

Tax consolidation legislation
New Hope Corporation Limited and its wholly owned Australian controlled entities implemented the tax consolidation legislation as of 1 August
2003.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income tax (continued)
The head entity, New Hope Corporation Limited, and the controlled entities in the tax consolidation Group account for their own current and
deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidation Group continues to be a stand alone tax
payer in its own right.

In addition to its own current and deferred tax amounts, the Company also recognises the current tax liabilities (or assets) and the deferred tax
assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated Group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or
payable to other entities in the Group. Details about the tax funding agreement are disclosed in note 8.

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a
contribution to (or distribution from) wholly-owned tax consolidated entities.

Exploration and evaluation expenditure
Exploration, evaluation and relevant acquisition costs are accumulated separately for each area of interest. They comprise acquisition costs,
direct exploration and evaluation costs and an appropriate portion of related overhead expenditure. Costs are carried forward only if they relate
to an area of interest for which rights of tenure are current and such costs are expected to be recouped through successful development and
exploitation or from sale of the area.

Exploration and evaluation expenditure which does not satisfy these criteria is written off.

Business combinations
The acquisition method of accounting is used to account for all business combinations regardless of whether equity instruments or other assets
are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities
incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration
arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured at
fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree
either at fair value or at the non-controlling interest's proportionate share of the acquiree's net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any
previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill.
If those amounts are
less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the
difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the
date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which similar borrowings could be
obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial
remeasured to fair value with changes in fair value recognised in profit or loss.

liability. Amounts classified as a financial

liability are subsequently

Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more
frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less cost to
sell and its value in use. For the purposes of assessing impairment under value in use testing, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-
generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other short-term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value, excluding funds on
deposit for which there is no short term identified use in the operating cashflows of the Group.

Trade receivables
Trade receivables are recognised initially at fair value and subsequently at amortised cost, less provision for doubtful debts. Trade receivables
are due for settlement no more than thirty days from the date of recognition.

Collectability of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the
carrying amount directly. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the
Group will not be able to collect all of the amounts due according to the original terms of receivables. The amount of the provision is the
difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.

The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade receivable for which an impairment
allowance has been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against other expenses in profit or loss.

Inventories
Coal stocks are valued at the lower of cost and net realisable value in the normal course of business. Cost comprises direct materials, direct
labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating
capacity.

Inventories of consumable supplies and spare parts expected to be used in production are valued at cost.

Work in progress is stated at the lower of cost and net realisable value.

Non-current assets held for sale and discontinued operations
Non-current assets (or disposal Groups) are classified as held for sale and stated at the lower of their carrying amount and fair value less cost
to sell if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.

An impairment loss is recognised for any initial or subsequent write down of the asset (or disposal Group) to fair value less cost to sell. A gain
is recognised for any subsequent increases in fair value less cost to sell of an asset (or disposal Group), but not in excess of any cumulative
impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal
Group) is recognised at the date of derecognition.

Assets (including those that are part of a disposal Group) are not depreciated or amortised while they are classified as held for sale.

Assets classified as held for sale and the assets of a disposal Group classified as held for sale are presented separately from other assets in
the balance sheet.

A discontinued operation is a component of the entity that has been disposed of, or is classified as held for sale and that represents a separate
major line of the business or geographical area of operations, is part of a single coordinated plan to dispose of such a line of the business or
area of operations, or a subsidiary acquired exclusively with the view to resale. The results of discontinued operations are presented separately
in the income statement.

Investments and other financial assets
The Group classifies its financial assets in the following categories:

Available for sale financial assets

(i)
Available for sale financial assets, comprising principally marketable securities, are non-derivatives that are either designated in this category or
not classified in any other category. They are included in non-current assets unless management intends to dispose of the investment within 12
months of the balance sheet date.

Available for sale financial assets are initially recognised at fair value. Unrealised gains and losses arising from changes in the fair value of non-
monetary securities classified as available for sale are recognised in equity in the available for sale investments revaluation reserve. When
securities classified as available for sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as
gains and losses from investment securities.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Investments and other financial assets (continued)
(ii) Held to maturity investments
Held to maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group's
management has the positive intention and ability to hold to maturity. Held to maturity investments are carried at amortised cost using the
effective interest method.

(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They
are initially recognised at fair value, and subsequently at amortised cost less provisions for doubtful debts. They are included in current assets,
except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets. Loans and
receivables are included in trade and other receivables (note 11) and receivables (note 15) in the balance sheet.

Impairment
The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is
impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial recognition of the asset (a "loss event") and that loss event (or
In the
events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is
considered an indicator that the assets are impaired.

(i) Assets classified as available for sale
If there is objective evidence of impairment for available for sale financial assets, the cumulative loss, measured as the difference between the
acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is removed
from equity and recognised in profit or loss.

Impairment losses on equity instruments that were recognised in profit or loss are not reversed through profit or loss in a subsequent period.

Derivatives - Forward foreign exchange contracts
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair
value at each reporting date. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being hedged. The Group designates derivatives as hedges of highly probable forecast
transactions (cash flow hedges).

The Group documents at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk
management objectives and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge
inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly
effective in offsetting changes in fair values or cash flows of hedged items.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in the hedging
reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect profit or loss (for instance
when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged, results in the recognition of a non-
financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity
and included in the measurement of the initial cost or carrying amount of the asset or liability.

When a hedging instrument expires, is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative
gain or loss in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss.
When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to
profit or loss.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement for disclosure purposes.

The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using
valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each
balance date. The fair value of forward exchange contracts is determined using forward exchange market rates at the balance sheet date.

The carrying value less the estimated credit adjustments of trade receivables and payables is assumed to approximate their fair values due to
their short term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows
at the current market interest rate that is available to the Group for similar financial instruments.

Property, plant and equipment
Property, plant and equipment, excluding investment property, is stated at historical cost less applicable depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on
qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

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 Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to profit or loss during the financial period in which it is incurred.

Depreciation is calculated so as to write off the cost of each item of property, plant and equipment during its expected economic life to the
consolidated entity. Each item's useful life has due regard both to its own physical life limitations and to present assessments of economically
recoverable resources of the mine property at which the item is located. Estimates of residual values and remaining useful lives are made on
an annual basis. Straight line method is predominately used. The expected useful life of plant and equipment is 4 to 20 years, buildings is 25 to
40 years and motor vehicles is 4 years. Land is not depreciated.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its recoverable
amount (note 1(i)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss.

Mine properties, mine development costs, mining reserves and mining leases
Development expenditure incurred by the consolidated entity is accumulated separately for each area of interest in which economically
recoverable mineral resources have been identified to the satisfaction of the Directors. Direct development expenditure, pre-operating mine
start-up costs and an appropriate portion of related overhead expenditures are capitalised as mine development costs up until the relevant mine
is in commercial production.

Mining reserves, leases and mine development costs are amortised over the estimated productive life of each applicable mine on either a unit
of production basis or years of operation basis, as appropriate. Amortisation commences when a mine commences commercial production.

The cost of acquiring mineral reserves and mineral resources are capitalised on the statement of financial position as incurred.

IT development and software

Intangible assets
(i)
Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that will contribute to future period
financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Costs capitalised are external
direct costs of materials and services. Amortisation is calculated on a straight line basis over periods generally ranging from 3 to 5 years.

(ii) Goodwill
is measured as described in note 1(h). Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on
Goodwill
acquisitions of associates is included in investments in associates. Goodwill
is tested for impairment
annually, and is carried at cost less accumulated impairment losses. Gains or losses on the disposal of an entity include the carrying amount of
goodwill relating to the entity sold.

is not amortised.

Instead, goodwill

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or
Groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to
operating segments (note 4).

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid.
The amounts are unsecured and usually paid within forty five days of recognition.

Borrowing costs
Borrowing costs incurred for the construction of a qualifying asset are capitalised during the period of time that is required to complete and
prepare the asset for its intended use or sale. Other borrowing costs are recognised as expenses in the period in which they are incurred.

Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and vesting sick leave expected to be settled within twelve
months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to
the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability of annual
leave and accumulating sick leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are
presented as payables.

(ii) Other long-term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be settled within twelve months after the end of the period in which
the employees render the related service is recognised in the provision for employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Share-based payments
Share-based compensation benefits are provided to employees via the New Hope Corporation Limited Employee Share Option Plan and the
New Hope Corporation Ltd Employee Performance Rights Share Plan. Information relating to these schemes is set out in note 36.

The fair value of options granted under the New Hope Corporation Limited Employee Share Option Plan and the New Hope Corporation Ltd
Employee Performance Rights Share Plan is recognised as an employee benefit expense with a corresponding increase in equity. The fair
value is measured at grant date and recognised over the period during which the employee becomes unconditionally entitled to the options or
rights. Options and rights are exercisable by current employees during the nominated vesting period or by Directors' consent. Detailed vesting
conditions are set out in the Directors' report.

The fair value of rights at grant date is calculated as the number of rights offered at the share price at offer date. The fair value of options at
grant date is independently determined using a monte carlo option pricing model that takes into account the exercise price, the term of the
option, the vesting criteria, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The fair value of the options granted is adjusted to reflect the market vesting condition, but excludes the impact of any non-market vesting
conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable.
At each reporting date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit
expense recognised each period takes into account the most recent estimate. The impact of the revision to the original estimates, is
recognised in profit or loss with a corresponding adjustment to equity.

Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction net of tax, from the proceeds. The amounts of any capital returns are applied against contributed equity.

Dividends
Provision is made for the amount of any dividend declared on or before the end of the financial year but not distributed at balance date.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Rounding of amounts
The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investment Commission, relating to the
"rounding off" of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance with that Class
Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any costs of servicing
equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the year, adjusted for bonus element
in ordinary shares issued during the year.

(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax
effect of interest and other financial costs associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

aa.

Restoration, rehabilitation and environmental expenditure
Provisions are raised for restoration, rehabilitation and environmental expenditure as soon as an obligation exists, with the cost being charged
to profit or loss in respect of ongoing rehabilitation. Where the obligation relates to decommissioning of assets and restoring the sites on which
they are located, the costs are carried forward in the value of the asset and amortised over its useful life.

Provisions are measured at the present value of expected future cash outflows with future cash outflows reassessed on a regular basis. The
present value is determined using an appropriate discount rate. The obligations include profiling, stabilisation and revegetation of the
completed area, with cost estimates based on current statutory requirements and current technology.

ab.

Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the
taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or
payable to, the taxation authority is included with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST component of cash flows arising from investing or financing activities which are
recoverable from, or payable to the taxation authority, are presented as operating cash flows.

Leases
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as
operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income
statement on a straight line basis over the period of the lease.

New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 31 July 2012 reporting periods. The
Group’s assessment of the impact of these new standards and interpretations is set out below. The group does not expect to adopt the new
standards before their operative date. They would therefore be first applied in the financial statements for the annual reporting period ending
31 July 2014.

(i)

AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7
Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective for annual reporting periods beginning
on or after 1 January 2013)
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities.
The standard is not applicable until 1 January 2013 but is available for early adoption. There will be no impact on the group's accounting
for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated as at fair value through
profit or loss and the group does not have any such liabilities. The derecognition rules have been transferred from AASB 139 Financial
Instruments: Recognition and Measurement and have not been changed. The group has not yet decided when to adopt AASB 9.

ac.

ad.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

ad.

New accounting standards and interpretations (continued)
(ii) AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities and revised

AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and Joint Ventures (effective 1 January 2013)
In August 2011, the AASB issued a suite of five new and amended standards which address the accounting for joint arrangements,
consolidated financial statements and associated disclosures.

AASB 10 replaces all of the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial Statements ,
and Interpretation 12 Consolidation – Special Purpose Entities . The core principle that a consolidated entity presents a parent and its
subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of consolidation. However, the standard
introduces a single definition of control that applies to all entities.
It focuses on the need to have both power and rights or exposure to
variable returns before control is present. Power is the current ability to direct the activities that significantly influence returns. Returns
must vary and can be positive, negative or both. There is also new guidance on participating and protective rights and on agent/principal
relationships. While the group does not expect the new standard to have a significant impact on its composition, it has yet to perform a
detailed analysis of the new guidance in the context of its various investees that may or may not be controlled under the new rules.

AASB 11 introduces a principles based approach to accounting for joint arrangements. The focus is no longer on the legal structure of
joint arrangements, but rather on how rights and obligations are shared by the parties to the joint arrangement. Based on the assessment
of rights and obligations, a joint arrangement will be classified as either a joint operation or joint venture. Joint ventures are accounted for
using the equity method, and the choice to proportionately consolidate will no longer be permitted. Parties to a joint operation will account
their share of revenues, expenses, assets and liabilities in much the same way as under the previous standard. AASB 11 also provides
guidance for parties that participate in joint arrangements but do not share joint control. The group is currently assessing the full impact
upon adopting this standard.

AASB 12 sets out the required disclosures for entities reporting under the two new standards, AASB 10 and AASB 11, and replaces the
disclosure requirements currently found in AASB 128. Application of this standard by the group will not affect any of the amounts
recognised in the financial statements, but will impact the type of information disclosed in relation to the group's investments.

AASB 127 is renamed Separate Financial Statements and is now a standard dealing solely with separate financial statements.
Application of this standard by the group and parent entity will not affect any of the amounts recognised in the financial statements, but
may impact the type of information disclosed in relation to the parent's investments in the separate parent entity financial statements.

(iii) AASB 13 Fair Value Measurement (effective 1 January 2013)

AASB 13 was released in September 2011. AASB 13 explains how to measure fair value and aims to enhance fair value disclosures.
The group has yet to determine which, if any, of its current measurement techniques will have to change as a result of the new guidance.
It is therefore not possible to state the impact, if any, of the new rules on any of the amounts recognised in the financial statements.
However, application of the new standard will impact the type of information disclosed in the notes to the financial statements. The group
does not intend to adopt the new standard before its operative date, which means that it would be first applied in the annual reporting
period ending 30 June 2014.

(iv) Int 20 Accounting for stripping costs and AASB 2011-12 (effective 1 January 2013)

Production phase stripping costs will be attributed to an identifiable component of an ore body and amortised over the useful life of the
identified component. On transition, existing production phase stripping costs will be written off to retained earnings if they cannot be
attributed to an identifiable component of an ore body. Entities will no longer be able to amortise production phase stripping costs over
the life of mine. Entities may need to make significant changes to processes, procedures and systems in order for the accounting to
mirror the mining activity. Entities will need to directly attribute its carried forward stripping cost to components of ore bodies to avoid a
write-off on adoption of the interpretation. The group is currently assessing the full impact upon adopting this standard.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

ae. Parent entity financial information

The financial information for the parent entity, New Hope Corporation Limited, disclosed in note 41 has been prepared on the same basis as
the consolidated financial statements, except as set out below.

Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, subsidiaries and joint ventures are accounted for at cost in the financial report of New Hope Corporation Limited.
Dividends received from subsidiaries are recognised in the parent entity’s income statement rather than being deducted from the carrying
amount of these investments.

Tax consolidation legislation
New Hope Corporation Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1
July 2002. The head entity, New Hope Corporation Limited, and the controlled entities in the tax consolidated group continue to account for
their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be
a stand alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, New Hope Corporation Limited also
recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed
from controlled entities in the tax consolidated group.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate New Hope Corporation
Limited for any current tax payable assumed and are compensated by New Hope Corporation Limited for any current tax receivable and
deferred tax assets relating to unused tax losses or unused tax credits that are transferred to New Hope Corporation Limited under the tax
consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial
statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is
issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to
assist with its obligations to pay tax instalments.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts receivable from
or payable to other entities in the group. Any difference between the amounts assumed and amounts receivable or payable under the tax
funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

af. Comparative Figures

When required, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

2. FINANCIAL RISK MANAGEMENT
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, price risk and interest rate risk), credit risk and
liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the financial performance of the Group. The Group uses derivative financial instruments such as foreign exchange contracts to
hedge certain risk exposures. Derivatives are used exclusively for hedging purposes, i.e. not as trading or other speculative instruments. The
Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of
interest rate, foreign exchange and other price risks and aging analysis for credit risk.

Risk management is carried out in accordance with written policies approved by the Board of Directors. These written policies cover specific
areas, such as mitigating foreign exchange, interest rate and credit risks, use of forward exchange contracts and investment of excess liquidity.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

2. FINANCIAL RISK MANAGEMENT (continued)
The Group holds the following financial instruments:

Financial assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Available for sale financial assets
Held to maturity investments
Other financial assets

Financial liabilities
Trade and other payables

2012
$000

2011
$000

70,990
26,332
30,364
73,140
1,446,975
299
1,648,100

75,149
116,402
40,687
92,389
1,599,552
303
1,924,482

40,460
40,460

51,639
51,639

Market risk
(i) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is
not the entity's functional currency. The Group is exposed to foreign exchange risk arising from currency exposures to the US dollar.

Forward contracts are used to manage foreign exchange risk. Senior management is responsible for managing exposures in each foreign
currency by using external forward currency contracts. Contracts are designated as cash flow hedges. External foreign exchange contracts are
designated at Group level as hedges of foreign exchange risk on specific future transactions.

The Group's risk management policy is to hedge up to 65% of anticipated transactions (export coal sales) in US dollars for the subsequent year,
up to 57% of anticipated revenue beyond a year but less than two years and up to 50% for revenue beyond two years but less than three years.
All hedges of projected export coal sales qualify as "highly probable" forecast transactions for hedge accounting purposes.

The Group's exposure to foreign currency risk at the reporting date was as follows:

Cash and cash equivalents
Trade receivables
Forward exchange contracts - sell foreign currency (cash flow hedges)
Trade payables

2012
USD
$000

37,590
-

275,000
750

2011
USD
$000

17,265
37,306
309,000
1,500

Group sensitivity
Based on the trade receivables, cash and trade payables held at 31 July 2012, had the Australian dollar weakened/strengthened by 10%
against the US dollar with all other variables held constant, the Group's post-tax profit for the year would have increased/(decreased) by
(2011 - $3,981,000/($3,257,000)), mainly as a result of foreign exchange gains/losses on translation of US dollar
$2,833,000/($2,318,000)
receivables and cash balances as detailed in the above table. The Group's equity as at balance date would have increased/(decreased) by the
same amounts.

Based on the forward exchange contracts held at 31 July 2012, had the Australian dollar weakened/strengthened by 10% against the US dollar
with all other variables held constant,
(2011 -
$25,644,000/($28,209,000)). There is no effect on post-tax profits. Equity in 2012 is less sensitive to movements in the Australian dollar / USD
exchange rates than in 2011 because of the decreased value of forward exchange contracts in 2012.

the Group's equity would have increased/(decreased) by $23,751,000/($26,126,000)

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

2. FINANCIAL RISK MANAGEMENT (continued)
a.

Market risk (continued)
(ii) Price risk
The Group is exposed to equity securities price risk arising from certain investments held by the Group and classified on the balance sheet as
available for sale.

The majority of the Group's equity investments are publicly traded and are included in the All Ordinaries Index. The table below summarises
the impact of increases/decreases in the index on the Group's equity as at balance date. The analysis is based on the assumption that the
equity index had increased/decreased by 10% with all other variables held constant and all the Group's equity instruments moved according to
the historical correlation with the index.

Index

All Ordinaries - 10% increase
All Ordinaries - 10% decrease

Impact on post-tax profit

2012
$000
-
(2,295)

2011
$000
-
(2,443)

Impact on equity
2012
$000
5,335
(3,041)

2011
$000
9,936
(7,493)

The price risk for unlisted securities is immaterial in terms of the possible impact on total equity.
sensitivity analysis.

It has therefore not been included in the

During the current year, an equity security has been transferred from level 1 to level 2 as this is a better representation of the fair value of the
equity security.

(iii) Fair value interest rate risk
Refer to (e) below.

Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with
banks and financial institutions, as well as credit exposure to export and domestic customers, including outstanding receivables and committed
transactions. The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales of products and
services are made to customers with an appropriate credit history. The majority of customers, both export and domestic have long term
relationships with the Group and sales are secured with long term supply contracts. Sales are secured by letters of credit when deemed
appropriate. Derivative counterparties, held to maturity investments and cash transactions are limited to financial institutions with a rating of at
least BBB. The Group has policies that limit the maximum amount of credit exposure to any one financial institution.

Credit risk further arises in relation to financial guarantees given to certain parties (see note 22). Such guarantees are only provided in
exceptional circumstances and are subject to specific board approval.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to historical
counterparty default rates. The table below summarises the assets which are subject to credit risk.

information about

Trade receivables
Cash at bank and short term bank deposits
Held to maturity investments
Derivative financial instruments

2012
$000
17,124
70,990
1,446,975
30,364

2011
$000
110,962
75,149
1,599,552
40,687

Liquidity risk
Prudent liquidity risk management is adopted through maintaining sufficient cash and marketable securities, the ability to borrow funds from
credit providers and to close-out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows
and matching the maturity profiles of financial assets and liabilities. Surplus funds are generally only invested in instruments that are tradeable
in highly liquid markets.

(i) Financing arrangements
The Group has no current need of external funding lines.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

2. FINANCIAL RISK MANAGEMENT (continued)
d. Maturity of financial liabilities

Non-derivative financial liabilities of the Group all mature within one year. The maturity groupings of derivative financial instruments are detailed
in note 35.

Cash flow and fair value interest rate risk
The Group currently has significant interest-bearing assets which are placed with reputable investment counterparties for up to 12 months. The
company has a treasury investment policy approved by the Board which stipulates the maximum dollar exposure to each financial institution,
and the maximum percentage of funds that can be invested with an individual institution. Significant changes in market interest rates may have
an effect on the Group's income and operating cash flows. The Group manages its cash flow interest rate risk by placing excess funds in term
deposits and other fixed interest bearing assets. Refer to note 13 for details.

Based on the deposits held at balance date, the sensitivity to a 1% increase or decrease in interest rates would increase/(decrease) after tax
profit by $10,968,000 (2011 - $12,300,000).

As the Group has no significant borrowings, its income statement and operating cash flows are substantially independent of changes in market
interest lending rates.

f. Fair value measurements

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement
hierarchy:
a.
b.

quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly
(derived from prices) (level 2), and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

The following table presents the group's assets measured and recognised at fair value at 31 July 2012 and 31 July 2011.

2012

Assets
Derivatives used for hedging
Available for sale financial assets

Equity securities

Total assets

2011

Assets
Derivatives used for hedging
Available for sale financial assets

Equity securities

Total assets

Level 1
$000

Level 2
$000

Level 3
$000

Total
$000

30,364

26,659
26,659

46,481
76,845

-
-

73,140
103,504

Level 1
$000

Level 2
$000

Level 3
$000

Total
$000

40,687

92,392
92,392

-
40,687

-
-

92,392
133,079

The fair value of financial instruments traded in active markets (such as available for sale securities) is based on quoted market prices at the
reporting date. The quoted market price used for financial assets held by the Group is the last sale price.

During the current year, an equity security has been transferred from level 1 to level 2 as the quoted market price has not been deemed to
represent fair value.

The fair value of forward exchange contracts is determined using forward exchange market rates at the reporting date.

The carrying value less impairment provisions of trade receivables and payables are assumed to approximate their fair values due to their short
term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the
current market interest rate that is available to the Group for similar financial instruments.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future
events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal actual
results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.

(i) Rehabilitation
The Group makes estimates about the future cost of rehabilitating tenements which are currently disturbed, based on legislative requirements
and current costs. Cost estimates take into account past experience and expectations of future events that are expected to alter past
experiences. Any changes to legislative requirements could have a significant impact on the expenditure required to restore these areas.

(ii) Determination of coal reserves and coal resources
The Group estimates its coal reserves and coal resources based on information compiled by Competent Persons as defined in accordance with
the Australasian Code for Reporting of Mineral Resources and Ore Reserves of December 2004 (the “JORC code”). Reserves determined in
this way are used in the calculation of depreciation, amortisation and impairment charges, the assessment of mine lives and for forecasting the
timing of the payment of decommissioning and restoration costs.

(iii) Mineral Resource Rent Tax (MRRT)
During the year, as a result of the MRRT legislation that was substantively enacted on 19 March 2012 and that is effective from 1 July 2012,
additional and offsetting deferred tax balances have been recognised. Judgement is required in assessing whether deferred tax assets and
deferred tax liabilities arising from MRRT are recognised on the balance sheet.

Deferred tax assets are recognised only when it is considered probable that they will be recovered. Recoverability is dependent on the
generation of sufficient future taxable profits. Assumptions about the generation of future taxable profits depend on management’s estimates of
future cash flows. These in turn depend on estimates of future sales volumes, operating costs, capital expenditure and government royalties'
payable.

Judgements are also required about the application of the MRRT tax legislation for example in relation to the hypothetical valuation point.

The judgements and assumptions made by management 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. 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 charge to the income statement.

Critical judgements in applying the entity's accounting policies
(i) Exploration and development expenditure
During the year the entity capitalised various items of expenditure to the mine development and exploration expenditure asset account. The
relevant items of expenditure were deemed to be part of the capital cost of developing future mining operations, which would then be amortised
over the useful life of the mine. The key judgement applied in considering whether the costs should be capitalised, is that costs are expected to
be recovered through either successful development or sale of the relevant mining interest.

(ii) Impairment of available for sale financial assets
In the 2012 financial statements, the Group made a significant judgement about the impairment of a number of its available for sale financial
assets.

The Group follows the guidance of AASB 139 Financial Instruments: Recognition and Measurement
financial asset is impaired. This determination requires significant judgement.
factors, the duration and extent to which the fair value of an investment is less than its cost.

to determine when an available for sale
In making this judgement, the Group evaluates, among other

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

4. FINANCIAL REPORTING SEGMENTS
a.

Description of segments
The Group has three reportable segments, namely Coal mining (including exploration, development, production and processing), Marketing
and logistics (transport infrastructure and marketing activities) and Treasury and investments (including cash, held to maturity investments and
available for sale financial assets).

Operating segments have been determined based on the analysis provided in the reports reviewed by the Board, CEO, COO and CFO (being
the Chief Operating Decision Maker, “CODM”). The reportable segments reflect how performance is measured, and decisions regarding
allocations of resources are made by the CODM.

Other immaterial coal mining and related operations that do not meet the quantitative thresholds requiring separate disclosure in AASB 8
Operating Segments have been combined with the current coal mining operations.

Segment information is presented on the same basis as that used for internal reporting purposes. Sales between segments are carried out at
arm’s length and are eliminated on consolidation.

For the year ended 31 July 2012, new segments have been identified, resulting in the segment data for 31 July 2011 being restated to reflect
these new segments.

b. Segment information

Year ended 31 July 2012

Total segment revenue
Inter-segment revenue
Total segment revenue - external customers

Reportable segment profit before income tax
Total segment profit before income tax includes:

Interest revenue
Depreciation and amortisation
Share of net profit / (loss) of associate

Reportable segment assets
Total segment assets includes:

Investments accounted for using the equity method
Additions to non-current assets

Year ended 31 July 2011

Total segment revenue
Inter-segment revenue
Total segment revenue - external customers

Reportable segment profit before income tax
Total segment profit before income tax includes:

Interest revenue
Depreciation and amortisation
Share of net profit / (loss) of associate

Reportable segment assets
Total segment assets includes:

Investments accounted for using the equity method
Additions to non-current assets

Notes

Coal mining
$000

Marketing &
Logistics

$000

Treasury &
Investments
$000

Total
$000

5
7
38

385,734
(381,597)
4,137

91,935

-
35,008
-

676,691

62,084

-
9,036
-

86,697
-
86,697

83,991

86,650
-
(647)

1,149,122
(381,597)
767,525

238,010

86,650
44,044
(647)

634,659

201,125

1,623,635

2,459,419

-
61,551

-
8,444

32,530
-

32,530
69,995

337,398
(335,096)
2,302

91,897

-
33,032
-

559,645

100,457

559,645

23,356

-
6,489
-

100,457

93,443

100,457

-
(447)

997,500
(335,096)
662,404

208,696

100,457
39,521
(447)

698,576

251,757

1,798,915

2,749,248

254,175

-
19,048

31,825
-

31,825
273,223

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

4. FINANCIAL REPORTING SEGMENTS (continued)
b.

Segment information (continued)

Reconciliation of reportable segment profit and loss

Total profit for reportable segments
Non regular items

Gain of sale of Arrow Energy Limited Investment
Gain on sale of New Lenton Joint Venture
Impairment of available for sale investments
Impairment of goodwill
Consolidated profit before income tax

Other segment information
(i) Segment revenue

Total segment revenue

Japan
Taiwan / China
Chile
Hawaii
Australia

Investment income - Australia

2012
$000

2011
$000

238,010

208,696

-
-
(5,804)
(33,387)
198,819

218,443
390,250
13,432
-
58,703
680,828
86,697
767,525

466,192
57,740
(13,531)
-

719,097

192,613
287,748
17,860
2,163
61,563
561,947
100,457
662,404

Included within revenue for the marketing and logistics segment are customers that represent more than 10 per cent of the Group's total
revenue. For the year ended 31 July 2012, one customer contributed $353,001,000 in sales revenue (2011 - $202,153,00) whilst another
customer contributed $193,095,000 in sales revenue (2011 - $156,786,000).

Sales between segments are carried out at arm's length and are eliminated on consolidation. The revenue reported from external parties is
measured in a manner consistent with that in the income statement.

(ii) Segment assets
The amounts provided to the CODM with respect to total assets are measured in a manner consistent with that of the financial statements.
These assets are allocated based on the operations of the segment. All non-current assets are located in Australia.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

5. REVENUE

From continuing operations
Sales revenue

Sale of goods
Services

Other revenue

Property rent
Interest
Sundry revenue

6. OTHER INCOME

From continuing operations

Gain on sale of non-current assets (i) (ii)

Significant items in Other Income include:
(i)
(ii) Gain on sale of New Lenton Joint Venture

Gain of sale of Arrow Energy Limited Investment

7. EXPENSES

Profit before income tax includes the following specific expenses:
Foreign exchange gains and losses
Net foreign exchange losses

Depreciation
Buildings
Plant and equipment

Amortisation

Mining reserves and mine development
Software

Other charges against assets
Bad and doubtful debts
Impairment of available for sale investments
Impairment of goodwill

Exploration costs expensed

Defined contribution superannuation expense

Employee benefits expensed

Operating lease costs expensed

2012
$000

2011
$000

650,318
25,286
675,604

778
86,650
4,493
767,525

537,412
21,008
558,420

768
100,457
2,759
662,404

149

524,127

-
-
-

466,192
57,740
523,932

4,180

7,522

420
36,142
36,562

6,408
1,074
7,482

-
5,804
33,387
39,191

291
32,245
32,536

6,024
961
6,985

29
13,531
-
13,560

11,338

16,294

6,118

5,354

98,004

79,431

3,556

3,106

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

8. INCOME TAX EXPENSE

a. Tax consolidation legislation
New Hope Corporation Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1
August 2003. The accounting policy in relation to this legislation is set out in note 1(f).

On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the
opinion of the Directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, New Hope
Corporation Limited.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate New Hope Corporation
Limited for any current tax payable assumed and are compensated by New Hope Corporation Limited for any tax receivable and deferred tax
assets relating to unused tax losses or unused tax credits that are transferred to New Hope Corporation Limited under the tax consolidation
legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities financial statements.

The amounts receivable / payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is
issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to
assist with its obligations to pay tax instalments. The funding amounts are recognised as current intercompany receivables or payables.

2012
$000

63,897
(29,134)
(3,069)
31,694

2011
$000

208,850
9,351
(2,203)
215,998

(9,331)
(19,803)
(29,134)

(1,864)
11,215
9,351

198,819

719,097

59,646

215,729

75
365
11,757
1,094
72,937

(3,069)
(38,174)
31,694

3,097
7,418
10,515

(3,020)
7
4,059
1,426
218,201

(2,203)
-

215,998

(4,001)
142,168
138,167

Income Tax Expense
Current tax
Deferred tax
Under / (over) provided in prior years

Deferred income tax expense / (revenue) included in income tax expense
comprises:

Decrease / (increase) in deferred tax assets (note 19)
(Decrease) / increase in deferred tax liabilities (note 23)

Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax

Income tax calculated at 30% (2011 - 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:

Net capital gains
Share based payment expense
Impairment expense
Sundry items

Under / (over) provided in prior year
Tax consolidation benefit
Income tax expense

d. Tax expense relating to items of other comprehensive income

Cash flow hedges (note 27(a))
Available for sale financial assets (note 27(a))

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

2012
$000

2011
$000

9. DIVIDENDS - New Hope Corporation Limited

a. Ordinary dividend paid

2010 final dividend of 4.50 cents per share - 100% franked at a tax rate of 30% (paid on 9 Nov 2010)
2010 special dividend of 14.00 cents per share - 100% franked at a tax rate of 30% (paid on 9 Nov 2010)
2011 interim dividend of 5.25 cents per share - 100% franked at a tax rate of 30% (paid on 4 May 2011)
2011 final dividend of 5.00 cents per share - 100% franked at a tax rate of 30% (paid on 8 Nov 2011)
2011 special dividend of 15.00 cents per share - 100% franked at a tax rate of 30% (paid on 8 Nov 2011)
2012 interim dividend of 6.00 cents per share - 100% franked at a tax rate of 30% (paid on 2 May 2012)
Total dividends paid

-
-
-
41,512
124,534
49,825
215,871

37,361
116,232
43,587
-
-
-

197,180

b. Proposed dividends
In addition to the above dividends, since the end of the financial year, the Directors have declared a final dividend of 5.0 cents and a special
dividend of 20.0 cents per fully paid share, (2011 - 5.0 cents per share and 15.0 cents per share respectively). Both dividends are fully franked
based on tax paid at 30%. The aggregate amount of the proposed dividend expected to be paid on 6 November 2012 but not recognised as a
liability at year end is $207,631,704 (2011 - $166,046,110).

c. Franked dividends
The franked portions of the final dividends recommended after 31 July 2012 will be franked out of existing franking credits or out of franking
credits arising from the payment of income tax in the year ending 31 July 2012.

2012
$000

2011
$000

Franking credits available for subsequent financial years based on a tax rate of 30% (2011 - 30%)

632,772

664,461

The above amounts represent the balances of the franking accounts as at the end of the financial year, adjusted for franking credits that will
arise from the payment of provision for income tax, franking debits that will arise from the payment of dividends recognised as a liability at the
reporting date and franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.

The impact on the franking account of the dividend recommended by the Directors since year end, but not recognised as a liability at year end,
will be a reduction in the franking account of $88,985,016 (2011 - $71,162,618).

d. Dividend reinvestment plans
There were no dividend reinvestment plans in operation at any time during or since the end of the financial year.

10. CURRENT ASSETS - Cash and cash equivalents

Cash at bank and on hand

2012
$000

70,990
70,990

2011
$000

75,149
75,149

a. Cash at bank and on hand
Cash at bank and on hand includes deposits for which there is a short term identified use in the operating cashflows of the group, and attracts
interest at rates between 0% and 3.7% (2011 - 0% to 5.1%).

b. Risk exposure
Information about the Group's exposure to foreign exchange risk and credit risk is detailed in note 2.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

11. CURRENT ASSETS - Receivables

Trade receivables
Provision for impairment of receivables (a)

Other receivables (c)
Prepayments

Impaired trade receivables
Nominal value of impaired receivables
Provision for impairment

Movements in the provision for impairment of receivables

Carrying amount at beginning of year
Provision for impairment recognised during year
Receivables written off during year as uncollectible

2012
$000

4,017
-
4,017

10,104
3,003
17,124

-
-

-
-
-
-

2011
$000

30,741
-
30,741

75,813
4,408
110,962

-
-

48
3
(51)
-

b. Past due but not impaired
As of 31 July 2012, no trade receivables were past due but not impaired. These relate to customers who have no recent history of default.

c. Other receivables
These amounts relate to long service leave payments recoverable from the Coal Mining Industry Long Service Leave Fund, diesel fuel rebates
receivable and GST refunds receivable.
In the prior year, $58,040,000 was included in other receivables for the sale of a 10% interest in the
Lenton Project and formation of the Lenton Joint Venture. None of these receivables are impaired or past due but not impaired.

d. Foreign exchange and interest rate risk
Information about the Group's exposure to foreign currency risk and interest rate risk in relation to trade and other receivables is provided in
note 2.

e. Fair value and credit risk
Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.

Information about the Group's exposure to fair value and credit risk in relation to trade and other receivables is provided in note 2.

12. CURRENT ASSETS - Inventories

Coal stocks at cost
Raw materials and stores at cost

Inventory expense

a.
Inventories recognised as an expense during the year ended 31 July 2012 amounted to $239,961,000 (2011
- $218,524,000).

13. CURRENT ASSETS - Held to maturity investments

Term Deposits

The term deposits are held to their maturity of less than one year and carry a weighted average fixed interest
rate of 5.10% (2011 - 5.94%). Due to their short-term nature their carrying value is assumed to approximate
their fair value. Information about the Group's exposure to credit risk is disclosed in note 2.

39,924
19,636
59,560

45,228
18,180
63,408

1,446,975
1,446,975

1,599,552
1,599,552

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

14. CURRENT ASSETS - Other

Security deposits
Securities subscription

The subscription for securities relates to payments made in relation to Northern Energy Corporation Limited's
required subscription for preference shares to be issued as part of the project financing for the development
of stage 1 of the Wiggins Island Port Development Project. The securities were issued on financial close for
stage 1.

During the current financial year, financial close has occurred and the securities have been issued. The
securities have been disclosed as non-current other receivables (note 15).

15. NON-CURRENT ASSETS - Receivables

Prepayments
Other receivables

Interest rate risk

a.
In both the current and prior year all non-current receivables are non-interest bearing.

b. Fair value of receivables
The fair value of receivables approximates their carrying amounts. None of the non-current receivables are
impaired or past due but not impaired.

16. NON-CURRENT ASSETS - Available for sale financial assets

Listed securities

Equity securities

Unlisted securities
Equity securities

An impairment expense of $5,804,000 (2011 - $13,531,000) has been recognised on listed equity securities
held and is included in other expenses at note 7.

17. NON-CURRENT ASSETS - Property, plant and equipment

Land and buildings - non-mining

Freehold land at cost
Buildings at cost
Accumulated depreciation

Total land and buildings - non-mining

Land and buildings - held for mining

Freehold land at cost
Buildings at cost
Accumulated depreciation

Total land and buildings - held for mining

Plant and equipment

Plant and equipment at cost
Accumulated depreciation

2012
$000

299
-
299

2011
$000

303
2,499
2,802

1,759
7,449
9,208

2,275
3,165
5,440

73,137

92,386

3
73,140

3
92,389

1,049
8,957
(838)
8,119
9,168

127,770
5,620
(874)
4,746
132,516

1,049
8,069
(574)
7,495
8,544

110,804
5,574
(718)
4,856
115,660

478,725
(217,010)
261,715

450,279
(184,298)
265,981

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

17. NON-CURRENT ASSETS - Property, plant and equipment (continued)

Motor vehicles

Motor vehicles at cost
Accumulated depreciation

Mining reserves and leases

Mining reserves and leases at cost
Accumulated amortisation

Mine properties, mine development

Mine properties, mine development at cost
Accumulated amortisation

Plant and equipment under construction

Total Property, plant and equipment

Reconciliations
Land and buildings - non-mining

Carrying amount at beginning of year
Depreciation
Transfers in / (out)
Carrying amount at end of year

Land and buildings - held for mining

Carrying amount at beginning of year
Additions
Depreciation
Transfers in / (out)
Carrying amount at end of year

Plant and equipment

Carrying amount at beginning of year
Additions
Disposals
Depreciation
Transfers in / (out)
Carrying amount at end of year

Motor vehicles

Carrying amount at beginning of year
Additions
Disposals
Depreciation
Transfers in / (out)
Carrying amount at end of year

2012
$000

2011
$000

5,717
(2,951)
2,766

5,255
(2,602)
2,653

228,297
(7,379)
220,918

228,297
(7,017)
221,280

59,286
(42,923)
16,363

59,286
(36,877)
22,409

15,756

27,674

659,202

664,201

8,544
(264)
888
9,168

115,660
16,966
(156)
46
132,516

265,981
89
(27)
(34,992)
30,664
261,715

2,653
53
(342)
(1,150)
1,552
2,766

6,263
(181)
2,462
8,544

107,275
8,108
(110)
387
115,660

245,062
38
(16)
(31,185)
52,082
265,981

3,100
42
(145)
(1,060)
716
2,653

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

17. NON-CURRENT ASSETS - Property, plant and equipment (continued)

2012
$000

2011
$000

Reconciliations (continued)
Mining reserves and leases

Carrying amount at beginning of year
Additions
Amortisation
Carrying amount at end of year

Mine properties and mine development

Carrying amount at beginning of year
Amortisation
Carrying amount at end of year

Plant and equipment under construction
Carrying amount at beginning of year
Additions
Transfers in / (out)
Carrying amount at end of year

18. NON-CURRENT ASSETS - Exploration and evaluation

Exploration and evaluation at cost

Reconciliation

Carrying amount at beginning of year
Additions
Disposals
Carrying amount at end of year

19. NON-CURRENT ASSETS - Deferred tax assets

The balance comprises temporary differences attributed to :
Amounts recognised in profit and loss

Accrued expenses
Employee benefits
Mine site rehabilitation provision
Other

Set-off of deferred tax liabilities pursuant to set-off provisions (note 23)
Net deferred tax assets

Movements

Carrying amount at beginning of year
Credited / (charged) to the income statement (note 8(b))
Carrying amount at end of year

Deferred tax assets to be recovered after more than 12 months
Deferred tax assets to be recovered within 12 months

221,280

-
(362)
220,918

22,409
(6,046)
16,363

27,674
21,744
(33,662)
15,756

39,228
39,228

8,085
31,143
-
39,228

90
6,047
11,408
5,091
22,636
(22,636)
-

13,305
9,331
22,636

21,942
694
22,636

3,113
218,484
(317)
221,280

28,116
(5,707)
22,409

45,094
41,196
(58,616)
27,674

8,085
8,085

3,030
5,355
(300)
8,085

89
4,835
5,945
2,436
13,305
(13,305)
-

11,441
1,864
13,305

12,733
572
13,305

Following the substantive enactment of the Minerals Resource Rent Tax (MRRT) on 19 March 2012, the
group has had a market value uplift to the tax base of the starting base assets relating to mining. Based on
New Hope's MRRT Implementation Project and current guidance from the ATO, the amount of unrecognised
deferred tax asset is $529.0 million.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

20. NON-CURRENT ASSETS - Intangibles

Software

Software at cost (i)
Accumulated amortisation

Goodwill

Goodwill at cost

Total Intangibles

Reconciliation
Software (i)

Carrying amount at beginning of year
Disposals
Transfers in / (out)
Amortisation (ii)
Carrying amount at end of year

(i) Software includes capitalised development costs, being an intangible asset.
(ii) Amortisation is included in cost of sales in profit or loss.

Goodwill

Carrying amount at beginning of year
Acquisition of subsidiary
Impairment expense (i)
Carrying amount at end of year

2012
$000

2011
$000

10,246
(7,314)
2,932

17,867
17,867
20,799

3,494
-
512
(1,074)
2,932

9,818
(6,324)
3,494

51,254
51,254
54,748

1,488
(2)
2,969
(961)
3,494

51,254
-
(33,387)
17,867

5,596
45,658
-
51,254

(i) Impairment relates to goodwill previously recognised on the acquisition of Northern Energy Corporation Limited (refer to note 37).

Brought forward goodwill relates to the acquisition of a subsidiary from an independent third party in an arms length transaction. The
increase in goodwill in the prior year relates to the acquisition of Northern Energy Corporation Limited (NEC) in an arm's length transaction.
The recoverable amount of the cash generating units (being the mining tenements in NEC) are determined based on value in use
calculations. These calculations use post-tax cash flow projections based on constant annual coal production over the life of the mines (12-
30 years) discounted using a post-tax real discount rate, coal prices of US$85-US$145 per tonne and a AUD/USD exchange rate of $0.80.
The equivalent pre-tax discount rate is 10%. These assumptions are consistent with external sources of information.

21. CURRENT LIABILITIES - Accounts payable

Trade payables and accruals

2012
$000

40,460
40,460

2011
$000

51,639
51,639

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

22. CURRENT LIABILITIES - Financing Arrangements

a. Financing arrangements
Unrestricted access was available at balance date to the following lines of credit:
Total facilities

Other facilities (i)

Used at balance date
Other facilities

Unused at balance date
Other facilities

(i)

Other facilities are only in relation to bank guarantees, are unsecured, for no fixed term and bear variable
rates.

b. Guarantees
The parent entity has given unsecured guarantees in respect of:

(i) Mining restoration and rehabilitation

The liability has been recognised by the consolidated entity in relation to its rehabilitation obligations.
See notes 24, 25 and 1(aa).

2012
$000

2011
$000

85,317
85,317

61,635
61,635

23,682
23,682

55,000
55,000

37,578
37,578

17,422
17,422

37,474

23,526

(ii) Statutory body suppliers

24,161

14,052

No liability was recognised by the consolidated entity in relation to these guarantees as no losses are
foreseen on these contingent liabilities.

23. NON-CURRENT LIABILITIES - Deferred tax liabilities

The balance comprises temporary differences attributed to:
Amounts recognised in profit and loss

Other accounts receivable
Inventories
Capitalised exploration
Property plant and equipment
Mine reserves
Other

Amounts recognised relating to deferred tax liabilities from acquisition of subsidiary

Mine reserves
Other

Amounts recognised directly in other comprehensive income

Cash flow hedges
Property plant and equipment
Available for sale financial assets

Total deferred tax liabilities

Set-off of deferred tax assets pursuant to set-off provisions (note 19)
Net deferred tax liabilities

7,257
5,170
4,542
14,401
730
96
32,196

65,545
(8,563)
56,982

9,109
7,160
106
16,375

14,223
4,979
-
14,220
839
17,738
51,999

65,545
(8,563)
56,982

12,206
7,160
7,524
26,890

105,553

135,871

(22,636)
82,917

(13,305)
122,566

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

23. NON-CURRENT LIABILITIES - Deferred tax liabilities (continued)

Carrying amount at beginning of year
Charged / (credited) to the income statement (note 8(b))
Charged / (credited) to other comprehensive income (note 8(d))
Amounts recognised on acquisition of subsidiary
Carrying amount at end of year

Deferred tax liabilities to be settled after more than 12 months
Deferred tax liabilities to be settled within 12 months

24. CURRENT LIABILITIES - Provisions

Employee benefits (c)
Mining restoration and rehabilitation (note 1(aa))

a. Mining restoration and rehabilitation

Current
Non-current

Movements

Carrying amount at beginning of year
Additional provision recognised
Carrying amount at end of year

2012
$000

2011
$000

135,871
(19,803)
(10,515)
-

105,553

93,126
12,427
105,553

22,830
6,015
28,845

6,015
32,012
38,027

19,818
18,209
38,027

205,841
11,215
(138,167)
56,982
135,871

116,669
19,202
135,871

17,331
1,923
19,254

1,923
17,895
19,818

19,752
66
19,818

b. Amounts not expected to be settled within the next 12 months

Long service leave obligations expected to be settled after 12 months

4,931

2,712

The current provision for employee benefits includes accrued annual leave, vested sick leave and long service leave for all unconditional
settlements where employees have completed the required period of service and also those where employees are entitled to pro-rata
payment in certain circumstances. The entire amount is presented as current, since the group does not have an unconditional right to defer
settlement. However, based on past experience, the Group does not expect all employees to take the full amount of accrued long service
leave or require payment within the next 12 months.

25. NON-CURRENT LIABILITIES - Provisions

Employee benefits
Mining restoration and rehabilitation (note 1(aa))

2012
$000

3,779
32,012
35,791

2011
$000

4,241
17,895
22,136

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

26. CONTRIBUTED EQUITY
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of
and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is
entitled to one vote, and upon a poll each share is entitled to one vote. As at 31 July 2012 there were nil (2011 - nil) options (management
and shareholder) over ordinary shares in the company.

Ordinary shares have no par value and the company does not have a limited amount of authorised capital.

Options
Information relating to the New Hope Corporation Employee Share Option Plan (ESOP or management options), including details of options
issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out in note 36.

Rights
Information relating to the New Hope Corporation Employee Performance Rights Share Plan, including details of rights granted, vested and
lapsed during the financial year and rights outstanding at the end of the financial year, is set out in note 36.

d. Share Capital

Issued and paid up capital

Movements in share capital

Date

1 August 2010

16 August 2010
31 July 2011

Details

Opening Balance

Exercise of management options
Transfer of ESOP reserve to Equity

2012
No. of shares

2012
2011
$000 No. of shares

2011
$000

830,411,534

92,509

830,230,549

91,500

Number of
Shares
827,730,549

Issue
Price

2,500,000

$2.1040

31 July 2011

Balance

830,230,549

1 January 2012
31 July 2012

Vesting of performance rights
Transfer from SBP reserve to Equity (note 27(a))

180,985

$0.0000

31 July 2012

Balance

830,411,534

$000
84,226

5,260
2,014

91,500

-
1,009

92,509

Capital risk management
The Group's objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares, or source debt to fund growth projects.

27. RESERVES
a. Reserves

Capital profits
Available-for-sale investments revaluation
Property, plant and equipment revaluation
Hedging
Share-based payments
Premium paid on non-controlling interest acquisition

2012
$000

2011
$000

1,343
5,373
27,412
21,255
1,216
(6,029)
50,570

1,343
16,615
27,412
28,481
-
-
73,851

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

Note

2012
$000

2011
$000

27. RESERVES (continued)
a. Reserves (continued)
Movements
Capital profits

Carrying amount at beginning of year
Carrying amount at end of year

Available for sale investments revaluation
Carrying amount at beginning of year
Revaluation - gross
Revaluation - deferred tax
Transfer to profit or loss, impairment expense
Transfer to profit or loss, sale of Arrow Energy Limited - gross
Transfer to profit or loss, sale of Arrow Energy Limited - deferred tax
Elimination on acquisition of subsidiary - Northern Energy Corporation Limited
Carrying amount at end of year

Property, plant and equipment revaluation
Carrying amount at beginning of year
Carrying amount at end of year

Hedging

Carrying amount at beginning of year
Transfer to net profit - gross
Transfer to net profit - deferred tax
Revaluation - gross
Revaluation - deferred tax
Carrying amount at end of year

Share-based payment

Carrying amount at beginning of year
Share based payment expense
Transfer to contributed equity
Carrying amount at end of year

Premium paid on non-controlling interest acquisition

Carrying amount at beginning of year
Acquisition of subsidiary - Northern Energy Corporation Limited
Carrying amount at end of year

8(d)

6
8(d)

8(d)

30(c)
26(d)

1,343
1,343

16,615
(18,660)
7,418
-
-
-
-
5,373

353,615
(20,023)
2,311
13,531
(466,192)
139,857
(6,484)
16,615

27,412
27,412

28,481
(25,620)
7,686
15,297
(4,589)
21,255

-
2,225
(1,009)
1,216

-
(6,029)
(6,029)

19,145
(43,129)
12,939
56,466
(16,940)
28,481

1,989
25
(2,014)
-

-
-
-

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

27. RESERVES (continued)
a. Reserves (continued)
Nature and purpose of reserves
Capital profits

This reserve represents amounts allocated from retained profits that were profits of a capital nature.

Available for sale investments revaluation

Changes in the fair value of investments classified as available for sale financial assets are taken to this reserve, as described in note 1(n).
Amounts are recognised in profit and loss when the associated assets are sold or impaired.

Property, plant and equipment revaluation

This reserve represents the revaluation arising on the fair value uplift of property, plant and equipment on the initial holding of Queensland
Bulk Handling Pty Ltd further to the acquisition of the remaining 50% of this company.

Hedging

The hedging reserve is used to record the gains and losses on a hedging instrument in a cash flow hedge that are recognised directly in
equity, as described in note 1(o). Amounts are recognised in profit and loss when the associated hedged transaction affects profit and loss.

Share based payment reserve

The share based payment reserve is used to recognise the fair value of options and rights issued, but not yet exercised.

Premium paid on non-controlling interest acquisition

The premium paid on non-controlling interest acquisition is used to recognise any excess paid on the acquisition of a non-controlling
interest in a subsidiary.

b. Retained profits

Carrying amount at beginning of year
Net profit after income tax
Dividends paid (note 9)
Carrying amount at end of year

28. CONTINGENT LIABILITIES

Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the
accounts, are as follows:

Controlled entities
The bankers of the consolidated entity have issued undertakings and guarantees to the Department of
Natural Resources and Mines, Statutory Power Authorities and various other entities.

The bankers of the consolidated entity have issued undertakings and guarantees in relation to stages 1
and 2 of the Wiggins Island Coal Export Terminal expansion project and expansion of rail facilities.

No losses are anticipated in respect of any of the above contingent liabilities.

29. COMMITMENTS

a. Capital commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:

Property plant and equipment

Within one year
Later than one year but not later than five years
Later than five years

2012
$000

2011
$000

2,157,849
167,126
(215,871)
2,109,104

1,851,795
503,234
(197,180)
2,157,849

14,857

15,017

10,317

11,892

7,334
-
-
7,334

13,263
-
-
13,263

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

29. COMMITMENTS (continued)

b. Lease commitments: Group as lessee
(i) Non-cancellable operating leases

The Group leases port facilities under non-cancellable operating leases expiring within one to fifteen
years. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of
the leases are renegotiated.

Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as
follows:

Within one year
Later than one year but not later than five years
Later than five years

2012
$000

2011
$000

3,095
14,491
52,141
69,727

3,268
14,029
57,795
75,092

30. KEY MANAGEMENT PERSONNEL DISCLOSURES

a. Directors
The following persons were Directors of New Hope Corporation Limited during the financial year:

Chairman - non-executive

Mr R.D. Millner

Non executive Directors

Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson (ceased to be a Director on 11 July 2012)
Mr W.H. Grant

Executive Directors
Mr R.C. Neale

Chief Executive Officer and Managing Director

b. Other key management personnel
The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly,
during the financial year:

Name
Mr S.O. Stephan
Mr B.D. Denney
Mr M. J. Busch

Position
Chief Financial Officer
Chief Operations Officer
Financial Controller and Company Secretary

c. Key management personnel compensation

Short-term employee benefits
Long-term employee benefits
Post employment benefits
Termination benefits
Share based payment

Employer

New Hope Corporation Limited
New Hope Corporation Limited
New Hope Corporation Limited

2012
$
6,457,823
30,821
128,365

2,151,608
8,768,617

2011
$
6,026,883
30,028
194,048
66,238
23,753
6,340,950

Detailed remuneration disclosures can be found in sections (a) to (f) of the remuneration report on pages 13 to 20.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

30. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

d. Equity instrument disclosures relating to key management personnel
(i)

Options and rights provided as remuneration and shares issued on exercise of such options and rights
Details of options and rights provided as remuneration and shares issued on the exercise of such options and rights, together with the terms
and conditions, can be found in section (d) of the remuneration report on pages 13 to 20.

(ii)

Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each Director of New Hope Corporation
Limited and other key management personnel of the Group, including their personally related entities are as follows:

Directors of New Hope Corporation Ltd - 2012

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson
Mr W.H. Grant
Mr R.C. Neale

Opening
balance

-
-
-
-
-
-

Other key management personnel of the Group - 2012
-
-
-

Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch

Directors of New Hope Corporation Ltd - 2011

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson
Mr W.H. Grant
Mr R.C. Neale

-
-
-
-
-
-

Other key management personnel of the Group - 2011

Mr M.L. Bailey
Mr S.O. Stephan
Mr B.J. Garland
Mr D. Brown-Kenyon
Mr C.C. Hopkins
Mr C.W. Easton
Mr B.D. Denney
Mr M.J. Busch
Mr J.R. Randell
Mr P. Stringer
Mr K. Palfrey

1,500,000

1,000,000

-
-
-
-
-
-
-
-

Movements during the year
Purchased /
(Sold)

Granted

Exercised

Closing
balance

Vested &
exercisable

-
-
-
-
-
-

-
-
-

-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-

-
-
-

-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-

-
-
-

-
-

-
-
-

(1,500,000)

(1,000,000)

-
-
-
-
-
-
-
-

-
-
-
-
-
-

-
-
-

-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-

-
-
-

-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

30. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

d. Equity instrument disclosures relating to key management personnel (continued)
(iii)

Rights holdings
The numbers of rights over ordinary shares in the Company held during the financial year by each Director of New Hope Corporation
Limited and other key management personnel of the Group, including their personally related entities are as follows:

Directors of New Hope Corporation Ltd - 2012

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson
Mr W.H. Grant
Mr R.C. Neale

Opening
balance

-
-
-
-
-
-

Other key management personnel of the Group - 2012
-
-
-

Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch

Directors of New Hope Corporation Ltd - 2011

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson
Mr W.H. Grant
Mr R.C. Neale

-
-
-
-
-
-

Other key management personnel of the Group - 2011
-
-
-
-
-
-
-
-
-
-
-

Mr M.L. Bailey
Mr S.O. Stephan
Mr B.J. Garland
Mr D. Brown-Kenyon
Mr C.C. Hopkins
Mr C.W. Easton
Mr B.D. Denney
Mr M.J. Busch
Mr J.R. Randell
Mr P. Stringer
Mr K. Palfrey

Movements during the year
Purchased /
(Sold)

Granted

Exercised

Closing
balance

Vested &
exercisable

-
-
-
-
-

428,708

73,888
32,040
36,100

-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-

-
-
-

-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-

(165,925)

262,783

(10,040)
-
(5,020)

63,848
32,040
31,080

-
-

-
-
-

-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-

-
-
-
-
-
-

-
-
-

-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-
-

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

30. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

d.
(iv)

Equity instrument disclosures relating to key management personnel (continued)
Share holdings
The number of shares in the company held during the financial year by each Director of New Hope Corporation Limited and other key
management personnel of the Group, including their personally related parties, is set out below. There were no shares granted during the
reporting period as compensation.

Movements during the year

Received
from rights or
options
exercised

Directors of New Hope Corporation Ltd - 2012

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson
Mr W.H. Grant
Mr R.C. Neale

Other key management personnel of the Group - 2012

Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch

Directors of New Hope Corporation Ltd - 2011

Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr D.C. Williamson
Mr W.H. Grant
Mr R.C. Neale

Other key management personnel - 2011

Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch
Mr M.L. Bailey
Mr B.J. Garland
Mr C.C. Hopkins
Mr C.W. Easton
Mr J.R. Randell
Mr P. Stringer
Mr K. Palfrey

Opening
balance

Purchased /
(sold)

3,670,573
109,234
11,000
20,000
30,000
2,005,500

-
-

650,000

3,620,573
109,234
11,000
20,000
20,000
2,005,500

-
-

675,000

-
-
37,230
1,000,000

-
-
-

11,389
-
-
-
-
-

-
-
-

50,000
-
-
-
10,000
-

-
-
(25,000)
(885,000)
(1,000,000)

(166,921)

-
-
-

-
-
-
-
-

165,925

10,040
-
5,020

-
-
-
-
-
-

-
-
-

1,500,000
1,000,000

-
-
-
-
-

Other

Closing
balance

-
-
-
-
-
-

-
-
-

-
-
-
-
-
-

-
-
-
-
-
-
-
-
-
-

3,681,962
109,234
11,000
20,000
30,000
2,171,425

10,040
-

655,020

3,670,573
109,234
11,000
20,000
30,000
2,005,500

-
-

650,000
615,000

-
37,230
833,079

-
-
-

e. Other transactions of key management personnel

Mr D.J. Fairfull is a Director of New Hope Corporation Limited. Mr Fairfull also had an interest in Pitt Capital Partners Limited which acted
as Financial Advisor to the Company for various corporate transactions during the 2012 and 2011 financial years. All transactions are at
prices similar to those with other customers.

Mr K.P. Standish is a Director of certain subsidiaries of New Hope Corporation Limited. Mr Standish is a partner in the firm Campbell
Standish Partners Solicitors which has provided legal services to New Hope Corporation Limited and its subsidiaries for several years. All
transactions are at prices similar to those with other customers.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

30. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

e. Other transactions of key management personnel (continued)

Aggregate amounts of each of the above types of transactions with key management personnel were as follows:

Legal advice
Financial advice fees paid

f. Loans to key management personnel

No loans have been made available to the key management personnel of the Group.

31. RELATED PARTY TRANSACTIONS

a. Parent entities

2012
$
984,556
1,120,870

2011
$
895,561
2,126,424

The parent entity within the Group is New Hope Corporation Limited. The ultimate Australian parent entity and controlling entity is
Washington H. Soul Pattinson & Company Limited (WHSP) which at 31st July 2012 owned 59.69% (2011 - 59.71%) of the issued ordinary
shares of New Hope Corporation Limited.

b. Key management personnel

Disclosures relating to key management personnel are set out in note 30.

c. Transactions with related parties

Other transactions
Dividends paid to ultimate Australian controlling entity (WHSP)

2012
$

2011
$

128,881,069

117,727,899

Outstanding balances arising from sales / purchases of goods and services
No provision for impairment of receivables has been raised to any outstanding balances. An impairment expense of $nil (2011 - $nil) has
been recognised in the books of the parent entity in respect of amounts owing from subsidiaries. This has no effect on the Group result.

e. Terms and conditions

Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.

32. REMUNERATION OF AUDITORS

During the year the following fees were paid or payable for services provided by the auditor of the parent
entity, its related practices and non-related audit firms:

a. Audit services

Total remuneration for audit services

b. Other services

PricewaterhouseCoopers Australian firm
Transaction tax & advisory services
General advisory services
Tax compliance services
Tax compliance services - MRRT
Research and development compliance services

Non PricewaterhouseCoopers firms

Taxation services
Total remuneration for other services

Total auditors' remuneration

2012
$

2011
$

279,232

302,447

279,232

10,000

312,447

908,441
266,971
217,272
419,498
282,984

429,509
100,611
315,726

208,777

2,095,166

6,130
1,060,753

2,374,398

1,373,200

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

33. RECONCILIATION OF NET CASH INFLOW / (OUTFLOW)

FROM OPERATING ACTIVITIES TO PROFIT AFTER INCOME TAX

Profit after income tax

Depreciation and amortisation
Non-cash employee benefit expense - share based payments
Impairment costs of available for sale assets
Impairment costs of goodwill
Net foreign exchange (gain) / loss
Net (profit) / loss on sale of non-current assets
Investment interest income
Income taxes paid
Income tax expense in accounts
Share of (profits) / losses of associates
Changes in operating assets and liabilities
(Increase) / decrease in debtors
Increase / (decrease) in creditors
(Increase) / decrease in other receivables
(Increase) / decrease in other assets
(Increase) / decrease in inventories
Increase / (decrease) in provisions and employee entitlements
(Increase) / decrease in prepayments
Net cash provided by operating activities

34. EARNINGS PER SHARE

Basic earnings per share from continuing operations attributable to ordinary equity holders of
the Company
Diluted earnings per share from continuing operations attributable to ordinary equity holders of
the Company

2012
$000

2011
$000

167,125
44,044
1,216
5,804
33,387
4,180
(149)
(86,650)
(208,516)
31,694
647

36,144
(4,696)
(7,906)
1,186
3,848
22,752
(1,085)
43,025

503,099
39,521
25
13,531
-
7,522
(524,127)
(100,457)
(66,652)
215,998
447

(665)
(6,111)
(1,670)
(2,519)
(18,293)
3,917
(834)
62,733

Earnings per share (cents)
2011

2012

20.1

60.6

Basic and Diluted

2012
$000

2011
$000

c. Reconciliation of adjusted profits

Profit from continuing operations attributable to the ordinary equity holders of the Company

167,126

503,234

d. Weighted average number of shares used as the denominator

Weighted average number of ordinary shares (basic)

Rights

Weighted average number of ordinary shares (diluted)

Consolidated
2012

2011

830,335,876
349,853
830,685,729

830,127,809

Rights granted to employees are considered to be potential ordinary shares and have been included in the determination of diluted earnings
per share to the extent to which they are dilutive. The rights have not been included in the determination of basic earnings per share.
Details relating to the rights are set out in note 36.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

35. DERIVATIVE FINANCIAL INSTRUMENTS

CURRENT ASSETS

Forward foreign exchange contracts

NON-CURRENT ASSETS

Forward foreign exchange contracts

2012
$000

2011
$000

20,393

31,880

9,971

8,807

Instruments used by the Group
New Hope Corporation Limited and certain of its controlled entities are parties to derivative financial instruments in the normal course of
business in order to hedge exposure to fluctuations in foreign exchange rates. These instruments are used in accordance with the Group's
financial risk management policies (refer to note 2).

The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly in equity. When
the cash flows occur, the Group reclassifies the gain or loss into the income statement.

At balance date these contracts were assets with fair value of $30,364,000 (2011 - $40,687,000).

At balance date the details of outstanding contracts are (Australian Dollar equivalents):

Sell US Dollars

Maturity
0 to 6 months
6 to 12 months
1 to 2 years
2 to 5 years

b. Credit risk exposures

Buy Australian Dollars
2011
$000
112,572
182,283
39,519
-

2012
$000
106,225
83,397
29,483
84,568
303,673

334,374

Average exchange rate

2012

2011

0.93198
0.91130
0.91579
0.86321

0.95050
0.94359
0.75913
-

Credit risk also arises from the potential failure of counterparties to meet their obligations under the respective contracts at maturity. A
material exposure arises from forward exchange contracts and the consolidated entity is exposed to loss in the event that counterparties fail
to deliver the contracted amount. At balance date $303,673,000 (2011 - $334,374,000) was receivable (AUD equivalents).

36. SHARE-BASED PAYMENTS

Options and rights are granted under the New Hope Corporation Ltd Employee Share Option Plan and the New Hope Corporation Ltd
Employee Performance Rights Share Plan. Membership of the Plans is open to those senior employees and those Directors of New Hope
Corporation Limited, its subsidiaries and associated bodies corporate whom the Directors believe have a significant role to play in the continued
development of the Group's activities.

Performance rights and share options are issued subject to a service condition. Performance rights and share options vest in equal annual
tranches over the period of the service condition. Upon satisfaction of the service conditions, performance rights automatically convert to
ordinary shares and share options will vest and be convertible into ordinary shares at the discretion of the employee for a period of up to two
years from the vesting date.

Rights are granted for no consideration. Rights will vest and automatically convert to ordinary shares in the company following the satisfaction
of the relevant service conditions. Service conditions applicable to each issue of rights are determined by the board at the time of grant. Total
expense arising from rights issued under the employee performance share rights plan during the financial year was $2,225,000 (2011 - $nil).

Options are granted for no consideration. Options are granted for a 5 year period, and vest after the third anniversary of the date of grant.
Total expense arising from options issued under the employee share option plan during the financial year was $nil (2011 - $25,000).

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

36. SHARE-BASED PAYMENTS (continued)

Rights
Set out below are the summaries of rights granted under the plan:

Grant date

Vesting Date

2012

27 Oct 2011
27 Oct 2011
27 Oct 2011
27 Oct 2011
17 Dec 2011
17 Dec 2011
17 Dec 2011
17 Dec 2011
17 Dec 2011

Total

1 Jan 2012
1 Aug 2012
1 Aug 2013
1 Aug 2014
1 Aug 2012
1 Dec 2012
1 Aug 2013
1 Aug 2014
1 Aug 2015

Weighted average exercise price

2011

No rights were granted during 2011

Total

Value of
Right at
Grant Date

Balance at
beginning of
the year
Number

Granted
during the
year
Number

Vested
during the
year
Number

Expired
during the
year
Number

Balance at
the end of
the year
Number

$5.170
$5.170
$5.170
$5.170
$6.020
$6.020
$6.020
$6.020
$6.020

-
-
-
-
-
-
-
-
-

180,985
94,834
64,059
39,458
20,447
36,537
56,984
56,985
20,447

(180,985)

-
-
-
-
-
-
-
-

570,736

(180,985)

5.4551

5.1700

-
-
-
-
-
-
-
-
-

-
94,834
64,059
39,458
20,447
36,537
56,984
56,985
20,447

389,751

5.5874

The weighted average share price at the date of exercise of rights vested during the 2012 year was $5.57 (2011 - $nil). The weighted average
remaining contractual life of share rights outstanding at the end of the period was 1.7 years (2011 - 0.0 years).

Options
Set out below are the summaries of options granted under the plan:

Grant date

Expiry date

Exercise
Price

Balance at
beginning of
the year
Number

Granted
during the
year
Number

Exercised
during the
year
Number

Expired
during the
year
Number

Balance at
the end of
the year
Number

Exercisable
at the end of
the year
Number

2012

No options were granted during 2012

Total

2011

13 Aug 2007 12 Aug 2012

$2.104

2,500,000

Total

Weighted average exercise price

2,500,000

2.1040

(2,500,000)

2.1040

The weighted average share price at the date of exercise of options exercised during the 2012 year was $nil (2011 - $4.79).

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

36. SHARE-BASED PAYMENTS (continued)

For the rights granted during the current year, the fair value at grant date is calculated as the number of rights offered at the five day volume
weighted average share price at offer date. For the prior year's options the fair value is independently determined using a monte carlo option
pricing model. The inputs and assumptions for the grant made during prior period is as follows:

Grant date

Expiry date

13 Aug 2007

12 Aug 2012

Exercise Price
$2.104

Share price
at grant date
$2.220

Expected
volatility
44.0%

Expected
dividend
yield
4.0%

Risk free
interest rate
6.0%

Assessed fair
value at grant
date

$0.745

Expected volatility was estimated using the weekly (continuously-compounded) returns to New Hope Corporation Limited since its listing in
2003. There are no market related vesting conditions. Expenses arising from share based payment transactions are included in other
expenses in the Statement of Comprehensive Income.

37. TRANSACTIONS WITH NON-CONTROLLING INTERESTS

On 11 November 2011 Northern Energy Corporation Limited (Northern Energy) became 100% owned by New Hope Corporation Limited (New
Hope), with the remaining interest of 19.17% purchased for $50,207,000. The acquisition was recognised by the Group as a decrease in non-
controlling interests of $44,177,000 and a decrease in equity reserves attributable to the owners of the parent of $6,029,000.

As a result of 100% ownership being attained, Northern Energy became part of the New Hope tax consolidated group.

Upon joining the tax consolidated group, Northern Energy tax bases were reset which resulted in a reduction of $38,348,000 in the deferred tax
position. This indicator of impairment led to a reassessment of the carrying value of Goodwill and a subsequent impairment charge of
$33,387,000.

The overall impact on the Group profit after income tax was an increase of $4,961,000. This amount is primarily attributable to the recognition
of prior period losses that have become usable upon Northern Energy joining the New Hope tax consolidated group.

38. INVESTMENTS IN ASSOCIATES

a. Movements in carrying amounts

Carrying amount at the beginning of the financial year
Additions
Share of profits after income tax
Carrying amount at the end of the financial year

b. Summarised financial information of associates

2012
$000

31,825
1,352
(647)
32,530

2011
$000

-
32,272
(447)
31,825

The Group's share of the results of its principal associates and its aggregated assets and liabilities are as follows:

2012
Quantex Energy Inc.
Quantex Research Corporation
Bridgeport Energy Limited

2011
Quantex Energy Inc.
Quantex Research Corporation
Bridgeport Energy Limited

Ownership
Interest %

25
25
36

25
25
35

Company's share of:

Assets

Liabilities

Revenues

$000

Profit / (Loss)
after income tax
$000

524
2,918
12,691
16,133

531
2,813
10,293
13,637

1,624
(4)
662
2,282

700
(4)
599
1,295

-
-
2,325
2,325

163
1
2,188
2,352

(955)
(86)
394
(647)

(185)
(244)
(18)
(447)

Quantex Energy Inc. and Quantex Research Corporation's unaudited financial statements as at 30 June 2012 (2011 - 31 July 2011) have
been used to account for the Group's investment. Bridgeport Energy Limited's unaudited financial statements as at 30 April 2012 (2011 -
30 June 2011) have been used to account for the Group's investment.
It has been deemed impractical to use financial statements of
Quantex Energy Inc., Quantex Research Corporation and Bridgeport Energy Limited as at 31 July 2012 (2011 - 31 July 2011).

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

39. INTERESTS IN JOINT VENTURES

a. Lenton Joint Venture

A subsidiary of New Hope Corporation Limited has entered into a joint venture to develop the Lenton project. The subsidiary has a 90%
participating interest in this joint venture and is entitled to 90% of the output of the Lenton project. The group's interests employed in the
joint venture are included in the balance sheet, in accordance with the accounting policy described in note 1(b).

b. Taroom-Yamala Joint Venture

In March 2006, Northern Energy Corporation Limited, entered into a joint venture in relation to its Yamala (EPC927) project on the following
terms:

An external company will earn a 30% Joint Venture interest in the Yamala project (EPC927) through sole funding a three-stage $5.30 million
exploration and evaluation programme designed to take the project from its current status as an exploration target to completion of a
bankable feasibility study for establishment of a mine within the tenement. On completion of the funding of the $5.30 million farm-in, the
external company will have the option to acquire a further 19% joint venture interest for $6.65 million. As at 31 July 2012 the first two stages
had been completed by funding of $3.00 million and had earned a 17% interest in the project. At 31 July 2012 $nil is carried as exploration
expenditure in relation to EPC927.

c. Ashford Joint Venture

In February 2005, Northern Energy Corporation Limited (Northern Energy), entered into a joint venture in relation to the Ashford project.
This project allows for the exploration and evaluation, and if warranted, development and exploitation of the tenements and all of the
minerals within the tenements. Northern Energy acquired a 50% participating interest in the tenements with an option to acquire a further
25% participating interest in the tenements by sole funding certain expenditure.

40. EVENTS OCCURRING AFTER BALANCE SHEET DATE

Bridgeport Energy Limited Takeover Offer
On the 26 July 2012, New Hope Corporation Limited (New Hope) announced that, through one of its subsidiaries, it intended to make an off
market takeover bid for all the shares it did not currently hold in Bridgeport Energy Limited (Bridgeport). The offer was for $0.41 cash per
Bridgeport share equivalent to $45.49 million. Subsequent to year end, New Hope has acquired 100% of the equity in Bridgeport.

Bridgeport Energy Limited's unaudited management accounts as at 31 July 2012 reported the following assets and liabilities:

Estimated consideration payable
Fair Value of previous interest in acquiree

Cash
Receivables
Inventory
Plant and equipment
Oil producing assets
Accounts payable
Provisions
Net assets acquired

Difference on acquisition (net asset fair value adjustment, identifiable intangibles, goodwill, etc.)

$000
45,488
18,876
64,364

2,101
1,009
87
1,020
27,897
(969)
(1,651)
29,494

34,870

Acquisition related costs of $385,000 are included in other expenses in profit and loss and in operating cash flows in the statement of cash
flows.

As at 31 July 2012, the initial acquisition accounting is incomplete and the above amounts are only provisional. The business combination
accounting will be finalised during the 2013 financial year.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

41. PARENT ENTITY FINANCIAL INFORMATION

a. Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:

Balance Sheet

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Shareholders' equity
Issued capital
Reserves

Share-based payments

Retained earnings

Profit for the year

Total comprehensive income

b. Guarantees entered into by parent entity

Bank guarantees issued in relation to rehabilitation and utility obligations

2012
$000

2011
$000

1,963,160

1,997,129

13,932

14,221

1,977,092

2,011,350

229,613

6,164

463,040

13,368

235,777

476,408

92,509

91,500

1,216
1,647,590
1,741,315

1,443,442
1,534,942

375,019

51,568

375,019

51,568

37,474
37,474

23,526
23,526

The parent entity has given unsecured guarantees in respect of mining restoration and rehabilitation. The liability has been recognised
by the parent entity in relation to its rehabilitation obligations. See notes 24, 25 and 1(aa).

Further guarantees are provided in respect of statutory body suppliers with no liability being recognised by the parent entity as no losses
are foreseen on these contingent liabilities.

c. Contingent liabilities of the parent entity

Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the accounts, are as follows:

No losses are anticipated in respect of any of the above contingent liabilities.

For information about guarantees given by the parent entity, please see above.

2012
$000

2011
$000

14,857

15,017

d. Contractual commitments for the acquisition of property, plant and equipment

As at 31 July 2012, the parent entity had contractual commitments for the acquisition of property, plant or equipment totalling $74,000
(2011 - $nil). These commitments are not recognised as liabilities as the relevant assets have not yet been received.

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

42. DEED OF CROSS GUARANTEE

During 2012, a number of entities within the group entered into a deed of cross guarantee. New Hope Corporation Limited, Jeebropilly
Collieries Pty Ltd, Acland Pastoral Co. Pty Ltd, New Oakleigh Coal Pty Ltd, New Acland Coal Pty Ltd, New Lenton Coal Pty Ltd, Andrew
Wright Holdings Pty Ltd, Arkdale Pty Ltd and Queensland Bulk Handling Pty Ltd are parties to a deed of cross guarantee under which each
company guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from the requirement
to prepare a financial report and directors' report under Class Order 98/1418 (as amended) issued by the Australian Securities and
Investments Commission.

As the deed was only entered into during the current financial year, no comparatives have been presented.

Consolidated statement of comprehensive income

a.
The above companies represent a "closed group" for the purposes of the Class Order, and as there are no other parties to the deed of cross
guarantee that are controlled by New Hope Corporation Limited, they also represent the "extended closed group".

Set out below is the consolidated statement of comprehensive income for the year ended 31 July 2012 for the closed group consisting of
New Hope Corporation Limited, Jeebropilly Collieries Pty Ltd, Acland Pastoral Co. Pty Ltd, New Oakleigh Coal Pty Ltd, New Acland Coal Pty
Ltd, New Lenton Coal Pty Ltd, Andrew Wright Holdings Pty Ltd, Arkdale Pty Ltd and Queensland Bulk Handling Pty Ltd.

Revenue from continuing operations
Other income

Expenses

Cost of sales
Marketing and transportation
Administration
Other expenses
Profit before income tax

Income tax expense

Profit after income tax for the year

Other comprehensive income

Changes in the fair value of cash flow hedges, net of tax
Changes to the fair value of cash flow hedges, net of tax
Net transfer to profit and loss
Transfer to the P&L - Cashflow Hedges, net of tax
Other comprehensive income for the year, net of tax

Total comprehensive income for the year

2012
$000

739,883
151
740,034

(335,587)
(140,846)
(26,101)
(1)
237,499
(64,616)
172,883

10,708
(17,934)
(7,226)
165,657

New Hope Corporation Limited and Controlled Entities

Notes to the financial statements
for the year ended 31st July 2012

42. DEED OF CROSS GUARANTEE (continued)

Consolidated balance sheet

b.
Set out below is a consolidated balance sheet as at 31 July 2012 of the closed group consisting of New Hope Corporation Limited,
Jeebropilly Collieries Pty Ltd, Acland Pastoral Co. Pty Ltd, New Oakleigh Coal Pty Ltd, New Acland Coal Pty Ltd, New Lenton Coal Pty Ltd,
Andrew Wright Holdings Pty Ltd, Arkdale Pty Ltd and Queensland Bulk Handling Pty Ltd.

2012
$000

69,025
218,913
59,560
1,435,961
20,392
116
1,803,967

4,181
248,183
9,971
370,715
17,148
8,525
658,723
2,462,690

58,952
54,345
27,592
140,889

23,699
32,246
55,945
196,834
2,265,856

88,413
58,941
2,118,502
2,265,856

Current assets

Cash and cash equivalents
Trade and other receivables
Inventories
Held to maturity investments
Derivative financial instruments
Other

Total current assets

Non-current assets
Receivables
Other financial assets
Derivative financial instruments
Property, plant and equipment
Exploration and evaluation assets
Intangible assets

Total non-current assets
Total assets

Current liabilities

Trade and other payables
Current tax liabilities
Provisions

Total current liabilities

Non-current liabilities

Deferred tax liabilities
Provisions

Total non-current liabilities
Total liabilities
Net assets

Equity

Contributed equity
Reserves
Retained earnings
Total equity

New Hope Corporation Limited and Controlled Entities

Directors Declaration

In the Directors' opinion:

the financial statements and notes set out on pages 29 to 76 are in accordance with the Corporations Act 2001 , including:

(i)

(ii)

complying with Accounting Standards ,
requirements; and

the Corporations Regulations 2001 and other mandatory professional

reporting

giving a true and fair view of the consolidated entity's financial position as at 31 July 2012 and of their performance, for the
financial year ended on that date; and

there are reasonable grounds to believe that the Company will be able to pay its debts, as and when they become due and payable; and

Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board.

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 made in accordance with a resolution of the Directors.

R.D. Millner
Director

D.J. Fairfull
Director

Sydney
17 September 2012

Independent auditor’s report to the members of New Hope
Corporation Limited

Report on the financial report

We have audited the accompanying financial report of New Hope Corporation Limited (the company), which
comprises the balance sheet as at 31 July 2012, and the statement of comprehensive income, statement of
changes in equity and cashflow statement for the year ended on that date, a summary of significant
accounting policies, other explanatory notes and the directors’ declaration for the New Hope Corporation
Limited Group (the consolidated entity). The consolidated entity comprises the company and the entities it
controlled at the year's end or from time to time during the financial year.

Directors’ responsibility 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
is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in
accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial
statements comply with International Financial Reporting Standards.

Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit
in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation
of the financial report 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 entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the financial report.

Our procedures include reading the other information in the Annual Report to determine whether it contains
any material inconsistencies with the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinions.

Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001.

PricewaterhouseCoopers, ABN 52 780 433 757
Riverside Centre, 123 Eagle Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Liability limited by a scheme approved under Professional Standards Legislation

Auditor's opinion
In our opinion:

(a)

the financial report of New Hope Corporation Limited is in accordance with the Corporations Act 2001 ,
including:

(i)

(ii)

giving a true and fair view of the consolidated entity’s financial position as at 31 July 2012 and of its
performance for the year ended on that date; and

complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001 ; and

(b)

the financial report and notes also comply with International Financial Reporting Standards as
disclosed in Note 1.

Report on the Remuneration Report
We have audited the remuneration report included in pages 13 to 20 of the directors’ report for the year ended
31 July 2012. The directors of the company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to
express an opinion on the remuneration report, based on our audit conducted in accordance with Australian
Auditing Standards.

Auditor's opinion
In our opinion, the remuneration report of New Hope Corporation Limited for the year ended 31 July 2012,
complies with section 300A of the Corporations Act 2001.

PricewaterhouseCoopers

Simon Neill
Partner

Sydney
17 September 2012

Liability limited by a scheme approved under Professional Standards Legislation

New Hope Corporation Limited

Shareholder Information as at 14 September 2012

As at 14 September 2012 there were 9,823 holders of ordinary shares in the Company.

Voting entitlement is one vote per fully paid ordinary share.

Distribution of equity securities

1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over

Number of
shareholders
2,450
3,857
2,164
1,264
88
9,823

Fully paid
ordinary
shares
1,335,585
11,377,407
15,237,356
31,242,955
771,333,512
830,526,815

Number of
rights holders
4

Ordinary
rights
274,470

-
-
-
-

274,470

Holding less than a marketable parcel

375

17,780

The names of substantial shareholders as disclosed in substantial shareholder notices received by the Company:

Shareholder
Washington H Soul Pattinson And Company Limited
Mitsubishi Materials Corporation
Perpetual Limited and subsidiaries

20 largest shareholders as disclosed on the share register as at 14 September 2012

Farjoy Pty Ltd

J P Morgan Nominees Australia Limited

1 Washington H Soul Pattinson And Company Limited
2 Mitsubishi Materials Corporation
3
4 RBC Investor Services Australia Nominees Pty Limited (Pi Pooled A/C)
5 Domer Mining Co Pty Limited
6 National Nominees Limited
7
8 BKI Investment Company Limited
9 HSBC Custody Nominees (Australia) Limited
10 JP Morgan Nominees Australia Limited (Cash Income A/C)
11 Citicorp Nominees Pty Limited
12 Taiheiyo Kouhatsu Inc
13 Pacific Custodians Pty Limited (New Hope Employee S/P A/C)
14 BNP Paribas Noms Pty Ltd (Master Cust DRP)
15 UBS Nominees Pty Ltd
16 RBC Investor Services Australia Nominees Pty Limited (PIIC A/C)
17 J S Millner Holdings Pty Limited
18 RBC Investor Services Australia Nominees Pty Limited (Piselect A/C)
19 Milton Corporation Limited
20 Dixson Trust Pty Limited

Number
of shares
495,696,418
91,490,000
67,674,630

495,696,418
93,240,000
27,148,649
26,766,997
22,000,000
20,295,028
15,500,000
14,760,452
5,841,985
5,368,175
4,951,963
4,054,000
3,750,000
2,683,110
2,437,850
2,155,794
2,009,197
1,857,947
1,290,107
1,225,596
753,033,268

%
59.68%
11.02%
8.15%

59.68%
11.23%
3.27%
3.22%
2.65%
2.44%
1.87%
1.78%
0.70%
0.65%
0.60%
0.49%
0.45%
0.32%
0.29%
0.26%
0.24%
0.22%
0.16%
0.15%
90.67%

Unquoted equity securities

Rights issued under the New Hope Corporation Limited Employee
Performance Rights Share Plan to take up ordinary shares

Number on
issue

Number of
holders

274,470