NEW HOPE
CORPORATION LIMITED
AND CONTROLLED ENTITIES
CORPORATE DIRECTORY
PRINCIPAL
ADMINISTRATION
& REGISTERED OFFICE
3/22 Magnolia Drive
BROOKWATER QLD 4300
Telephone: (07) 3418 0500
Facsimile: (07) 3418 0355
WEBSITE ADDRESS
www.newhopegroup.com.au
SHARE REGISTER
Computershare Investor
Services Pty Limited
117 Victoria Street
WEST END QLD 4101
Telephone: 1300 552 270
www.computershare.com
ASX Code: NHC
DIRECTORS
Robert D. Millner
Chairman of Directors
Peter R. Robinson
Non Executive Director
David J. Fairfull
Non Executive Director
William H. Grant
Non Executive Director
Sue J. Palmer
Non Executive Director
Ian M. Williams
Non Executive Director
CHIEF EXECUTIVE OFFICER
Shane O. Stephan
COMPANY SECRETARY
Justin W. Hogg
AUDITORS
PricewaterhouseCoopers
Level 15, Riverside Centre
123 Eagle Street
BRISBANE QLD 4000
CONTENTS
CHAIRMAN’S LETTER
FINANCIAL SUMMARY
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
CORPORATE GOVERNANCE STATEMENT
FINANCIAL REPORT
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT TO THE
MEMBERS OF NEW HOPE CORPORATION LIMITED
SHAREHOLDER INFORMATION
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CHAIRMAN’S REVIEW
New Hope Corporation Limited and Controlled Entities
Financial Summary
Dear Shareholders,
Despite the continued
challenging conditions for the
coal industry over the past 12
months, I am pleased to report
that New Hope Corporation has
achieved a respectable profit
for the financial year ended
31st July 2014. The company
is the stand out performer
against its Australian peers,
reporting in positive territory.
Financial Performance
Net profit after tax and non-
recurring items for the year
ended 31st July 2014 was
$58.4 million which included
$10.8 million from coal mining,
marketing and logistics
operations. This is a remarkable
feat in an environment where the
deflated coal price, coupled with
a stubbornly high Australian
dollar, has pushed other coal and
infrastructure businesses into the
red. Congratulations must go to
our management team for acting
decisively to meet the tough
market conditions by minimising
costs and maximising business
and operational efficiencies.
Productivity improvements
were achieved through a cost
structure review which resulted
in some difficult decisions
being taken, including making a
number of positions redundant
and the reduction in work hours
for production employees.
The review however, had no
impact on production at the
company’s operations with
production increasing 1.5%,
and sales of 6.0 million tonnes
being achieved, which equates
to the same period last year.
Diversification of our energy
interests has also ensured a solid
outcome for the Group. Our Oil
operations, through Bridgeport
Energy, achieved a profit of
$3.4 million, and a further
$44.3 million profit was achieved
through company investments.
New Hope maintains its enviable
record of dividend payment to
shareholders. Directors have
declared a final dividend of
2.0 cents per share (2013 –
5.0 cents per share) and a special
dividend of 3.5 cents per share
(2013 – 5.0 cents per share).
Both of these dividends are
fully franked and payable on
4 November 2014 to shareholders
registered as at 21 October 2014.
Significant milestones
Leadership and accountability
functions have now been combined
across both the New Acland and
West Moreton coal operations.
This has improved synergies
and streamlined costs to ensure
our coal operations function
at maximum efficiency.
During the year QBH, New Hope
Corporation’s 100% owned coal
terminal at the Port of Brisbane,
exported 7.86 million tonnes
of coal on 100 vessels despite
the difficult market conditions
imposed on QBH’s customer base.
Bridgeport continued to progress
organic growth in its exploration
and production portfolio.
Planning is underway for an
additional six development
wells during the year and
further growth is anticipated.
safety culture model of People,
Practices and Environment and
this has seen a 6.7% reduction in
Total Recordable Injury’s, a 15.4%
reduction in Lost Time Injury’s
and 50% reduction in High
Potential Incidents from 2012/13.
The revised New Acland Coal
Mine Stage 3 Project continues
to make good progress with
an Environmental Impact
Statement submitted to the
Queensland Office of the
Coordinator- General. We now
await the Coordinator-General’s
report and approval decision
expected late 2014. The New
Acland Mine has robust support
on the Darling Downs and the
revised Project would take the
life of the operation through
until 2029, delivering significant
economic and social benefits.
Sustainability
Our social licence to operate
is vital to our company’s
success. We understand that
our operations must work
hand in hand with our local
communities as a good neighbour
and a respected partner. This
is achieved through genuine
engagement, interaction and
support. Importantly, our
employees are also locals,
with more than 80% of our
people living and contributing
to the communities in the
vicinity of our operations.
As farmers, we also respect
the land on which we operate.
We know that we have
environmental impacts and work
tirelessly through our Acland
Pastoral Company to rehabilitate
the disturbed land and return
it to a condition as close as
possible from whence it came.
Our extensive rehabilitation
efforts at Acland and West
Moreton, and associated cattle
grazing trials, have drawn
wide interest and acclaim.
Our People
The safety of our people is
paramount and continues to be
our priority. We continue to
improve in the elements of the
This year the company
successfully transitioned its
leadership from long serving
Managing Director and CEO
Rob Neale. Incoming CEO
Shane Stephan and his new
executive team have brought
a renewed energy to the
management of the Group and I
have every confidence in their
combined experience to lead
New Hope into the next phase.
Outlook
With the outlook for coal prices
in the short term to remain
relatively flat, New Hope is
anticipating another tough
year ahead. Some assistance
may be provided if the forecast
for the Australian dollar
to stay consistently below
US$0.90, proves correct.
The current soft market,
combined with our strong
balance sheet, provides the
ability to take advantage of
acquisition opportunities
which support the long term
profitability of the company
and we are active in this space.
Concurrently we will continue to
develop our portfolio, ensuring
prudent expenditure continues
on exploration and approvals
work to allow new projects
to be brought on line when
market conditions improve.
Conclusion
I would like to take this
opportunity to thank my board
colleagues for their efforts
and commitment during the
year. I would also like to
thank the management and
staff of the company for their
hard work in a challenging
market and congratulate
them on their successes. And
finally I would like to thank
you, the shareholders, for
your continued support.
R D Millner
Chairman
2014
$000
2013
$000
2012
$000
2011
$000
Total revenue
548,959
652,097
767,525
662,404
Profit before tax
Income tax and petroleum resource rent tax expense
Profit after tax
Loss attributable to minority interests
Net profit attributable to NHCL members
71,047
(12,598)
58,449
(1)
58,450
121,984
(47,856)
74,128
(1)
74,129
198,819
(31,694)
167,125
(1)
167,126
719,097
(215,998)
503,099
(135)
503,234
Profit after tax from continuing operations
58,449
74,128
167,125
503,099
Total assets employed
Shareholders' funds
2,185,842
1,973,859
2,268,564
2,016,456
2,459,419
2,252,916
2,749,248
2,367,383
Dividends paid during the financial year
132,928
257,466
215,871
197,180
2014
2013
2012
2011
Weighted average shares on issue
Net profit attributable to NHCL members as a % of shareholders' funds
830,836,913
2.96%
830,551,140
3.68%
830,335,876
7.42%
830,127,809
21.26%
Earnings per share (cents)
Earnings per share (cents) from continuing operations
Normal dividends per share (cents)
Special dividends per share (cents)
7.0
7.0
8.00
3.50
8.9
8.9
11.00
5.00
20.1
20.1
11.00
20.00
60.6
60.6
10.25
15.00
Net tangible asset backing per share (cents)
234.55
239.66
268.80
278.55
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
DIRECTORS’ REPORT
31 JULY 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
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 2014. Throughout the report, the consolidated entity is referred to as the Group.
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:
Dividends
Dividends paid to members during the financial year were:
A final dividend for the year ended 31 July 2013 of 5.00 cents per share paid on 4 November 2013
A special dividend for the year ended 31 July 2013 of 5.00 cents per share paid on 4 November 2013
An interim ordinary dividend for the year ended 31 July 2014 of 6.0 cents per share paid on 5 May 2014
$000
41,536
41,536
49,856
Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr W.H. Grant
Ms S.J. Palmer
Mr I.M. Williams
Mr R.C. Neale was a Director until his retirement on 31 January 2014.
Consolidated results
Revenue from operations
Profit before income tax (before non regular items)*
Gain on sale of WICET Subscription
Gain on sale of Westside Corporation Limited
Gain on sale of Quantex
Impairment of investment in associate
Impairment of available for sale investments
Profit before income tax (after non regular items)
Profit from ordinary activities after income tax (before non regular items)*
Gain on sale of WICET Subscription
Gain on sale of Westside Corporation Limited
Gain on sale of Quantex
Impairment of investment in associate
Impairment of available for sale investments
Tax Benefit from DTL recognised on acquisition
Profit from ordinary activities after income tax (after non regular items)
Non-controlling interests
Profit attributable to New Hope Shareholders
Basic earnings per share (cents) (before non regular items)*
Gain on sale of WICET Subscription
Gain on sale of Westside Corporation Limited
Gain on sale of Quantex
Impairment of investment in associate
Impairment of available for sale investments
Basic earnings per share (cents) (after non regular items)
2014
$000
2013
$000
%
Change
548,959
652,097
- 15.8%
53,665
-
17,133
249
-
-
71,047
41,490
-
16,710
249
-
-
-
58,449
(1)
58,450
5.0
-
2.0
-
-
-
7.0
172,575
786
-
-
(13,286)
(38,091)
121,984
124,955
550
-
-
(13,286)
(38,091)
-
74,128
(1)
74,129
15.0
0.1
-
-
(1.6)
(4.6)
8.9
- 68.9%
- 41.8%
- 66.8%
- 21.2%
- 66.8%
- 21.5%
* The profit before non regular items and the earnings per share before non regular items contained within this Directors' Report have not been
audited in accordance with Australian Auditing Standards.
Principal activities
The principal continuing activities of the Group consisted of:
Investments.
Coal mining - exploration, development, production and processing;
Oil and gas - exploration, development, production and processing;
Marketing and logistics; and
In addition to the above dividends, since the end of the financial year, the Directors have declared a final ordinary dividend of 2.0 cents per share
and a special dividend of 3.5 cents per share. Both of these dividends are fully franked, to be paid on 4 November 2014 out of retained profits at
31 July 2014, the record date for such dividend to be 21 October 2014. This will provide shareholders of New Hope with total dividends for the year
of 11.5 cents per share (6.0 cents interim) compared with total dividends for the 2013 year of 16.00 cents per share, including a special dividend of
5.0 cents per share.
Review of operations
The Group has reported a net profit after tax and non regular items of $58.4 million for the year ended 31st July 2014. The result comprises $10.8
million from coal mining, marketing and logistics operations, $3.4 million from oil and gas operations and $44.3 million from treasury and
investments. The result is down 21.2% on the 2013 result of $74.1 million.
Before non regular items, basic earnings for 2014 were 5.0 cents per share, compared to 15.0 cents per share in 2013. After non regular items
basic earnings were 7.0 cents per share for 2014 against 8.9 cents in 2013.
Directors have declared a final dividend of 2.0 cents per share (2013 – 5.0 cents per share) and a special dividend of 3.5 cents per share (2013 –
5.0 cents per share). Both of these dividends are fully franked and payable on 4 November 2014 to shareholders registered as at 21 October
2014.
Compared to the previous corresponding period, the 2014 full year result was affected by:
Improved health and safety performance across all operations;
Lower revenues from continuing operations (down 15.8%), as a result of continued soft coal prices and a strong AUD;
Lower clean coal production (down 3.2%);
A non regular gain on the sale of Westside Corporation Limited; and
Impairments taken against unsuccessful oil exploration wells drilled during the year.
Mining operations
As anticipated, production for the year was down as a result of cessation of mining at New Oakleigh following the recovery of all economic coal
reserves in the previous financial year. Production for the year was 5.6 million tonnes compared to the 5.8 million tonnes produced during 2013.
Excluding the New Oakleigh mine, New Acland and Jeebropilly production was up a combined 1.5% on 2013 production.
Sales for 2014 were 6.0 million tonnes (inclusive of trade coal sales of 0.3 million tonnes), which equalled the 6.0 million tonnes sold in 2013
(inclusive of trade coal sales of 0.1 million tonnes).
New Acland Coal Mine
The New Acland open cut mine produced 4.9 million tonnes of product coal in 2014. This was an increase of 0.2 million tonnes compared to 2013.
Production for the majority of the year was capped by approved production and transportation limits.
Key activities undertaken in 2014 have included:
All full time and regular contractors attended i-Safe/We-Safe safety cultural change program.
A change to the mine plan allowed for additional product tonnes to be mined in 2014 with a reduction in total bcm movement and the cost per
clean coal tonne of 2.7%. This allowed the mine to shut down over Christmas.
Implementation of cost effectiveness initiatives including, change of operational structure in production and a reduction in work hours for 132
production employees.
Reduction in stockpile levels at Jondaryan to allay community concerns over perceived dust issues.
New Acland Community Reference Group continued providing further opportunities for community engagement and allocating funds through
the Community Infrastructure Fund to local community projects.
New Acland hosted numerous site visits by community, business and industry groups, as well as representatives from educational,
environmental and agricultural organisations.
New Acland Mine site has been granted EA approval to mine and transfer from site 5.2 million tonnes of product coal per year.
Further productivity improvement and cost reductions are underway including the trial of a Wirtgen 4200 Surface Miner.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014DIRECTORS’ REPORT - 31 JULY 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
West Moreton Mines
West Moreton operations, comprising Jeebropilly Mine plus New Oakleigh and Chuwar rehabilitation sites, produced 0.7 million tonnes of product
coal in 2014 against 1.1 million tonnes produced in 2013. The 2013 production comprised of 0.87 million tonnes from Jeebropilly and 0.27 million
tonnes from New Oakleigh.
Key activities at West Moreton in 2014 included:
Expansion of the i-Safe/We-Safe safety culture change program to major West Moreton contractor managers and supervisors.
A full organisational review that led to operational changes and reduction in workforce numbers.
A staff restructuring that combined leadership and accountability functions across both West Moreton and New Acland operations.
A review of all contractors and contracts to optimise cost with the service provided.
Completion of mine plan revisions that optimise the mine with current market conditions.
Continued rehabilitation of the New Oakleigh and Chuwar sites with further work to be undertaken in 2015.
Queensland Bulk Handling (QBH)
QBH, the Group's 100% owned coal terminal at the Port of Brisbane, exported 7.9 million tonnes of coal on 100 vessels. This result was down on
last year by approximately 0.86 million tonnes, predominantly caused by the closure of Peabody's Wilkie Creek mine and resultant reduction in
throughput. QBH remains essentially a demurrage free port.
Key activities at QBH in 2014 have included:
Twenty six months lost time injury free safety milestone achieved.
Commencement of engineering and other studies required for upgrades of existing infrastructure and to allow for future expansion potential.
Targeted business improvement programs aimed at reducing costs and improving operational efficiencies were commenced with several key
projects completed.
New Hope Exploration
The Group continues an active exploration program utilising two drilling rigs plus contract rigs as required. The exploration focus during 2014 has
continued with resource definition in the Bowen Basin (Lenton, Bee Creek and Yamala) and Surat Basin (MDL244 for the revised New Acland Coal
Mine Stage 3 Project) as well as Colton in the Maryborough Basin. Exploration on the mineral tenures has been focused on the eastern edge of
the Mount Isa block and the Laura Basin.
The exploration programs consisted of seismic, aeromagnetic, gravity, electro-magnetic and geochemical surveys in addition to drilling. The
drilling program consisted of 25 water monitoring bore holes, 153 open holes and 65 core holes, totalling 22,104 metres. The current group
Resources and Reserves are tabled below. These tables have not been updated since they were originally reported in July/August 2013.
Deposit
New Acland 1
Ownaview
West Moreton
3
Lenton
Bee Creek
Elimatta
Yamala
Maryborough
Ashford
5
4
2
Status
Mine
Exploration
Mine
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Inferred
2
38
11
524
104
50
187
60
5
981
Coal Resources (million tonnes)
(Coal resources are inclusive of the reserves reported below)
Measured
440
-
44
83
-
108
13
-
-
687
2013 Total
832
157
127
741
104
259
223
76
13
2,532
Indicated
390
119
72
134
-
101
23
16
8
864
2012 Total
857
157
129
693
104
259
223
76
13
2,511
Notes:
1 Mining has depleted 12 million tonnes from Measured Resource.
2 Mining has depleted 1 million tonnes from Measured Resource.
3 Figures shown are 100% of total resources. New Hope share is 90%.
4 Figures shown are 100% of total resources. New Hope share is 70%.
5 Figures shown are 100% of total resources. New Hope share is 50%.
Deposit
New Acland 1
Lenton 2
Elimatta
Maryborough (Colton)
Total
Status
Mine
Exploration
Exploration
Exploration
Notes:
1 Mining has depleted 12 million tonnes from Measured Reserves.
2 Figures shown are 100% of total resources. New Hope share is 90%.
Small differences are due to rounding.
Coal Reserves (million tonnes)
Probable
149
31
40
11
231
Proved
292
21
100
-
413
Total 2013
441
52
139
11
643
Total 2012
495
52
191
15
753
JORC Declaration - Coal Resources
The estimates of coal resources herein 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 reviewed by Mr Patrick Tyrrell who is a Member of AusIMM. Mr Tyrrell 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 Tyrrell consents to the inclusion in this
report of the matters 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 is based on information compiled by Mr Brett Domrow, who is a
Member of AusIMM. Mr Domrow is a full time employee of New Hope Corporation Limited. Mr Domrow has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a
Competent person as defined in the 2004 Edition of the "Australian Code for Reporting Exploration Results, Mineral Resources and Ore
Reserves". Mr Domrow consents to the inclusion in the report of the matters based on his information in the form and context in which it
appears.
Details of the 2014 exploration program are as follows:
Lenton (EPC 766, EPC 865, EPC1675 and ML 70337)
Exploration throughout the period focused on ground water studies across the project. A total of 17 water monitoring holes were undertaken to
better understand the hydrology of the area. Further drilling is planned to explore the shallow multiple seam repeat area adjacent to the
previous 3D seismic area.
New Acland (MDL 244, ML 50216 and EPC 919)
While wet weather had a minor impact on drilling, six water monitoring bore holes, 117 open holes and 39 core holes were drilled during the
year totalling 2,347 metres. This allowed improved resource definition for the revised New Acland Coal Mine Stage 3 Project.
Darling Downs (EPC’s 758, 759, 760, 761, 763, 918, 970, 1154 and 1158)
The uncertainty surrounding the State Government’s finalisation of Strategic Cropping Land and the Darling Downs Statutory Regional Plan
legislation has resulted in work programs on these tenures being minimised.
Maryborough (Colton) (EPC 923 and EPC 1082)
Exploration focused on ground water studies across the project. A near surface moisture monitoring survey included the installation of Vibrating
Water Piezometers (VWPs) and conversion of deeper exploration holes to monitoring piezometers. The development of seventeen water
monitoring holes was undertaken to better understand the hydrology of the area.
Bee Creek (EPC777)
The first round of site reconnaissance and cultural heritage surveys were conducted at Bee Creek in preparation for drilling activities. The 2014
campaign was designed to target the relatively shallow Rangal Coal Measures (Elphinstone and Hynds Seams). Drilling predominately targeted
the north of the lease on both the eastern and western limb of the Hail Creek Syncline.
Elimatta (EL6526)
The exploration program consisted of geotechnical boreholes drilled to facilitate planning of surface water management.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014DIRECTORS’ REPORT - 31 JULY 2014 New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
Yamala (EPC929 and MDLA 434)
The drilling program was designed to increase JORC classification to finalise the MDLA. The successful exploration program confirmed simple
Rangal geology with no basalt cover.
In the Northern area of the tenure, the seams were slightly deeper than anticipated while in the Southern
area seams were intercepted shallower than predicted. Finalisation of the JORC report will complete the MDLA.
Mineral Tenures:
Yanko and Sherwood (EPM 18582 and EPM 18592)
Drilling on the Yanko and Sherwood tenures were undertaken in tandem during the 2014 year. The drilling program was designed to test
magnetic anomalies across the tenures. Geophysical modelling of magnetics predicated a shallow basement. The drilling program was stopped
as the basement was substantially deeper than predicted with no evidence of mineralisation.
Moonamarra (EPM 18589)
The drilling program was designed to test both magnetic and gravity anomalies across the tenure. The four hole program was technically
successful encountering visible mineralisation in two of the four holes. Once the entire core from the program is analysed a review of the project
will be undertaken and a further exploration program designed.
Courtenay and Courtenay West (EPM 18581 and EPM 19581)
The tenement is located close to the Ernest Henry Mine. The drill program was based on existing gravity and geochemical surveys. The drill hole
program was technically successful encountering visible mineralisation in one of the two holes. Once the entire core from the program is
analysed a review of the project will be undertaken and a further exploration program designed.
Laura (EPM 19342)
The tenure was granted on 25 September 2013. The exploration program consisted of an aeromagnetic survey that was conducted to facilitate
more precise drill hole placement of the targets across the tenure. The survey data will facilitate the remodelling of the regional magnetics and a
drill program developed for drilling to commence in the 2015 dry season.
Pastoral Operations
A comprehensive five year plan has been developed for Acland Pastoral in conjunction with Resource Consulting Services Pty Ltd (RCS). RCS is
one of the leading consulting firms in the agriculture sector and have focused on regenerating the Australian agriculture landscape over the last
twenty five years. This plan is based on time controlled grazing and implementation has commenced.
Drought conditions in the region have limited the cropping activity. A pivot irrigation system has been commissioned to improve the consistency
and yields of the cropping activities.
Lenton
Exploration and project development work on the Lenton Coking Coal Project continued throughout 2013/14.
Development of the EIS progressed with the completion of Base Line studies and receipt of the Final Terms of Reference for MLA 70456. The
Impact modelling assessment component of the EIS is still to be completed.
Project work has included updating the geological model, revising the mine plan, mine site infrastructure locations and overall economic model.
Colton
Remaining exploration activities from the 2012-2013 programs were completed. Project development work on the Colton open cut coking coal
project continued during 2014. A revision to the Environmental Management Plan was submitted to the Department of Environment and Heritage
Protection in May. This included reporting required for the Queensland Biodiversity Offset Legislation.
Elimatta
Project development work on the Elimatta project has continued during 2014. The revised EIS (Supplementary EIS) was submitted during the year
and was accepted, after assessment by the Department of Environment and Heritage Protection. Work has commenced on an update to the
Environmental Management Plan for the project, which is planned for submission during 2015.
Carbon Conversion Projects
Work has continued on the Coal to Liquids Proof of Concept Plant at Jeebropilly with Gasification, Gas Clean-up and Intermediate Pressure units
all now commissioned. The only outstanding item left to commission is the Gas Generator which is planned to be finalised before the end of
September. The final component of the plant is the Liquefaction Module which has been designed but will not be constructed without further
approval premised upon the outcome of the Plant and Process audit, which is currently underway. This audit report is expected to be delivered by
the end of October 2014.
During the year, the decision was taken to separate from Quantex and to establish a wholly owned laboratory to develop and bench test various
coal/carbon conversion technologies. The separation from Quantex was finalised by the end of the first quarter 2014 and a premises in Pittsburgh
was secured. This building has now been fitted out as a testing laboratory and trials have commenced on developing the best process to employ in
this venture. Technical results to date have been encouraging with the expectation that the initial trials will be finalised by the end of 2014.
Bridgeport
Bridgeport continued to progress organic growth in its exploration and production portfolio and integrate the assets acquired from Arrow Energy
into its portfolio.
Acland Pastoral’s cattle herd has decreased in size from 2,460 to 1,894 head due to the dry conditions. During the year, 1,948 head were sold
and 1,335 head purchased.
During the year Bridgeport had no lost time injuries, moving lost time injury free months to thirty two and LTIFR dropped below the industry
average level of 8 which is a pleasing outcome considering the amount of work and activities undertaken in the field across Bridgeport.
Acland Pastoral has successfully continued the cattle trials on rehabilitated mine land with further analysis in the following areas:
Soil structure and water holding capacity;
Volume, diversity and quality of pastures; and
Various age of pastures.
The results of these trials are encouraging with all cattle gaining weight in spite of the dry conditions.
Development Projects
Approvals (mining and environmental) for the Group’s portfolio of coal projects continues to be progressed. These include the brownfield revised
New Acland Coal Mine Stage 3 Project and greenfield projects at Lenton, Colton and Elimatta. The current status of these projects is discussed
below.
New Acland
Development of the Environmental Impact Statement (EIS) progressed with the public comment period on the EIS concluded in March 2014. The
Group’s response to public and agency feedback on the EIS has been provided to the Coordinator-General for his consideration in preparation of
his decision and Evaluation Report.
Project front end engineering and design (FEED) studies on mine site infrastructure have been completed in preparation for construction activities
to start in 2016, subject to State and Federal approvals.
Development drilling was undertaken throughout the year in Bridgeport production assets with two new wells in the Utopia field (Bridgeport interest
60%) during the last quarter of 2013 and four new wells in the Cuisinier field (Bridgeport interest 15%) during the second quarter of 2014. One well
(Utopia 16 an appraisal well) was unsuccessful.
The small service rig owned by Bridgeport was kept busy on well maintenance and repair as well as completing and testing the new wells drilled in
operations during the year.
A substantial amount of exploration work was carried out on the Bridgeport portfolio with seismic surveys acquired in one of the Victorian
tenements and one of the Cooper Basin tenements which will provide data for future exploration drilling activities. Additionally five exploration wells
were drilled in four Cooper Basin tenements; two of which were plugged and abandoned and three which are suspended for future testing subject
to rig and equipment schedules.
Planning is under way for an additional six development wells during the year, four in the Cuisinier field and two in the operated fields.
In addition,
3D seismic is planned on the South Australian Cooper acreage and ongoing technical work to progress targets to drilling status across the portfolio.
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Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
Environmental compliance
During the 2014 financial year, the Group has not been prosecuted for any breach of environmental laws.
Environmental performance
The majority of the Group’s operations, which include coal mining operations and exploration tenements, the rail loading facilities, the QBH coal
export port facility and oil and gas operations, are in Queensland. The key piece of environmental legislation in Queensland is the Environmental
Protection Act 1994 (EP Act). The EP Act protects our environment with a focus on ecologically sustainable development.
The Group’s operations have proactively undertaken initiatives to improve their financial performance. An expanded monitoring program at QBH to
includes areas further from the QBH boundary, including within the suburb of Wynnum North and conducting rehabilitation trials at New Acland
give focus to environmental performance.
Environmental systems
During the 2014 financial year the Group’s operations have continued to make improvements to the Environmental Management System (EMS).
The EMS assists the Group to improve its environmental performance by increasing environmental awareness, optimising operational control,
monitoring compliance and facilitating continuous improvement.
Environmental reporting
The Group’s operational sites have submitted reports under the National Pollutant Inventory program.
For the purposes of National Greenhouse and Energy Reporting and the Energy Efficiency Opportunities program the Group reports as part of the
corporate group of Washington H. Soul Pattinson and Company Limited.
Bridgeport executed a number of landowner access agreements through the year including Cultural Heritage Management Agreements and
Landowner Access Agreement on new permits acquired through the period (for example in South Australia). Bridgeport operates all its permits
under an Environmental Management System prepared and issued in accordance with legislation. Each exploration (ATP) and production (PL)
permit is also operated in accordance with the Environmental Authorities issued at the time permits were or are awarded or transferred to the
entity. This includes regular produced water monitoring and ongoing remediation activities at all our sites.
Outlook
During the current year, the coal industry in Australia and internationally, has experienced significant challenges in remaining profitable. With the
outlook for coal prices in the short term to remain relatively flat, New Hope is anticipating another tough year ahead. Some improved revenues
may be seen if the Australian dollar were to soften against the US dollar during the 2015 financial year.
New Hope’s focus for 2015 remains on safe production and active management of risks to ensure ongoing cost effectiveness. The approval of the
Acland expansion is a key issue. Once approved, it will provide certainty for New Hope, our employees and the local community.
If the Acland
expansion is not approved, current reserves would be depleted during 2017 at current mining rates.
Operationally, group production for 2015 is anticipated to be similar to the 2014 year, with potential for modest increases at Acland. Rehabilitation
work currently underway at the West Moreton operations will continue during 2015.
Acquisition opportunities are being actively investigated by New Hope, with a focus on open cut operations. The current soft coal market,
combined with our strong balance sheet, provides the ability to take advantage of acquisition opportunities which support the long term profitability
of the Group. Concurrently we will continue to develop our portfolio, ensuring prudent expenditure continues on exploration and approvals work to
allow new projects to be brought on line when market conditions improve.
Insurance of officers
In accordance with the provisions of the Corporations Act 2001 , New Hope Corporation Limited (the Company or parent entity) has a Directors'
and Officers' Liability policy covering Directors and Officers of the Group. 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 Group 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.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014DIRECTORS’ REPORT - 31 JULY 2014 New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
Information on Directors
Mr R.D. MILLNER (Non-executive Chairman)
Experience
Information on Directors (continued)
Mr D.J. FAIRFULL - BCom, ACIS, CPA, ASIA (Non-executive Director)
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 Limited in 1995 and was appointed Chairman in 1998.
Mr Fairfull has extensive experience in finance, investment and merchant banking. He was appointed to the New Hope Corporation Limited
Board in 1997.
Other current Directorships
Washington H. Soul Pattinson and Company Limited
TPG Telecom Limited
Brickworks Limited (includes Bristile Limited)
BKI Investment Company Limited (includes PSI Limited)
Australian Pharmaceutical Industries Limited
Milton Corporation Limited (includes Choiseul Investments Limited)
Appointed 1984
Appointed 2000
Appointed 1997
Appointed 2003
Appointed 2000
Appointed 1998
Former Directorships in last 3 years
Souls Private Equity Limited
Northern Energy Corporation Limited
Special responsibilities
Chairman of the Board.
Interests in shares and options
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 Limited 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
Northern Energy Corporation Limited
Appointed 2011 Resigned 2012
Special responsibilities
Member of the Remuneration Committee and Nomination Committee.
Interests in shares and options
119,234 ordinary shares in New Hope Corporation Limited
Nil options or rights over ordinary shares in New Hope Corporation Limited
Other current Directorships
Washington H. Soul Pattinson and Company Limited
Souls Private Equity Limited
Shinewing Hall Chadwick National Association
Heritage Brands Limited
Former Directorships in last 3 years
Northern Energy Corporation Limited
Drill Torque Limited
Appointed 1997
Appointed 2004
Appointed 2009
Appointed 2008
Appointed 2011 Resigned 2012
Appointed 2011 Resigned 2013
Special responsibilities
Member of the Audit Committee and Remuneration 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 W.H. GRANT - OAM, FAICD, ALGA (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 Limited in 2006.
Other current Directorships
Brisbane Development Association
Brisbane Airport Corporation - Chairman
Northern Energy Corporation Limited
Bridgeport Energy Limited
Former Directorships in last 3 years
Appointed 2006
Appointed 2007
Appointed 2011
Appointed 2012
Queensland Performing Arts Centre Trust (QPAC)
Appointed 2006 Resigned 2013
Special responsibilities
Chairman of the Remuneration and Chairman of the 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
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014DIRECTORS’ REPORT - 31 JULY 2014 New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
Information on Directors (continued)
Ms S.J. PALMER - BCom (Non-executive Director)
Experience
Ms Palmer is a Chartered Accountant with over 30 years of extensive experience in the financial and resources fields. Ms Palmer brings a
financial reporting, risk management and corporate
current knowledge to the New Hope board in all aspects of accounting, finance,
governance. Ms Palmer was appointed to the New Hope Corporation Limited Board on 1 November 2012.
Information on Directors (continued)
Mr R.C. NEALE - BSc.(Hons) MAICD, MAIMM (retired as Managing Director)
Experience
Mr Neale retired on 31 January 2014. 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 Corporation Limited in 1996 as
2008.
General Manager, and has been Chief Executive Officer since 2005. He was appointed to the New Hope Corporation Limited Board in
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
Appointed 2005
Appointed 2005
Appointed 2006
Appointed 2009
Appointed 2010
Appointed 2009
Former Directorships in last 3 years
Bridgeport Energy Limited
Northern Energy Corporation Limited
Appointed 2011 Resigned 2014
Appointed 2011 Resigned 2014
Special responsibilities
Managing Director and Chief Executive Officer (retired).
Interests in shares and options upon retirement
2,591,159 ordinary shares in New Hope Corporation Limited
Nil rights over ordinary shares in New Hope Corporation Limited
Other current Directorships
RCR Tomlinson Ltd
Former Directorships in last 3 years
MSF Sugar
Thiess Pty Ltd
Special responsibilities
Chairman of the Audit Committee.
Interests in shares and options
Appointed 2014
Appointed 2008 Resigned 2012
Appointed 2011 Resigned 2014
15,000 ordinary shares in New Hope Corporation Limited
Nil options or rights over ordinary shares in New Hope Corporation Limited
Mr I.M. WILLIAMS - BEc, LLB (Non-executive Director)
Experience
As a legal and strategic adviser to International investors in the energy and resources sectors, Mr Williams has been involved in every aspect
of the Australian coal industry. Mr Williams was appointed to the New Hope Corporation Limited Board on 1 November 2012.
Other current Directorships
Australia Japan Business Cooperation Committee
Australia Korea Business Council
Appointed 2001
Appointed 2013
Former Directorships in last 3 years
Ashurst
Special responsibilities
Member of the Remuneration Committee.
Appointed 2011 Resigned 2014
Interests in shares and options
16,650 ordinary shares in New Hope Corporation Limited
Nil options or rights over ordinary shares in New Hope Corporation Limited
Company Secretary
Justin Hogg was appointed to the role of Company Secretary on 1 February 2014. Starting his career at Rio Tinto, Mr Hogg has held senior
finance positions in a broad range of industry sectors, including petroleum, financial services and aviation. He joined New Hope Corporation
Limited in 2011 in the position of Finance Manager. Mr Hogg is a member of CPA Australia and Governance Institute of Australia.
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Directors Report - 31st July 2014
Remuneration Report (continued)
b. Executive remuneration policy and framework (continued)
The detail of each component is as follows:
Base remuneration
It comprises a cash salary, superannuation and
Base remuneration for senior executives is fixed annually by the Remuneration Committee.
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.
Maximum allowable STIs are provided for in senior executive employment contracts and are paid in the form of an annual cash bonus. At the
end of each period the Remuneration Committee will award executives a percentage of their maximum allowable STIs having regard to the
the executive and the Company during the period. The Key Performance Indicators (KPIs) set by the Remuneration
performance of
Committee and their respective weightings are detailed below.
Short Term Incentives KPIs
Group Profit, Sales and Investment Performance
Group Compliance – Safety, Environment and Risk Management
Group Production Cost, Project Development and M&A Activities
Weighting
55%
25%
20%
Each of the Short Term Incentive KPIs is made up of qualitative and quantitative measures with the quantitative measures set annually by the
Remuneration Committee. Based on the achievements of the Company this year, the remuneration committee determined that executives had
achieved 52% of their maximum STI. In making this assessment, the committee considered the following factors:
An improvement to the overall safety performance at the Company during the year.
A net profit after tax before non regular items of $41.5m.
Sales, excluding trade sales, of 5.7 million tonnes.
Production of 5.6 million tonnes.
As part of the Remuneration Committee’s annual review process, the weighting for the Short Term Incentive KPIs have been modified slightly
for the 2015 financial year as detailed below.
Short Term Incentives KPIs - 2015 financial year
Group Profit, Sales and Investment Performance
Group Compliance – Safety, Environment and Risk Management
Group Production Cost, Project Development and M&A Activities
Weighting
60%
20%
20%
Long Term Incentives
LTIs 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.
Maximum allowable LTIs are provided for in senior executive employment contracts. At the end of each period the Remuneration 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 are paid in the form of Performance Rights at the discretion of the Remuneration Committee. The value of an executive’s LTI is converted
into Performance Rights by reference to the five day volume weighted average share price of the Company over the five days immediately
preceding issue. The Remuneration Committee has the discretion to select alternative equity instruments for the award of LTIs in the event
that Performance Rights do not align to the strategic goals set by the Remuneration Committee or Board.
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Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
Remuneration Report (continued)
b. Executive remuneration policy and framework (continued)
Performance Rights are issued subject to performance and service conditions. The service condition requires that the executive remain an
employee of the Company for the duration of the three year vesting period. The performance conditions attaching to the rights are measured
over three years. The Remuneration Committee will determine the percentage of rights that will vest based on the performance of the
executive and the Company during the three year period. The Key Performance Indicators (KPIs) set by the Remuneration Committee and
their respective weightings are detailed below.
Long Term Incentives KPIs
Shareholder Value
Project Development and M&A Activities
Strategic Plan (including Succession Planning and Stakeholder Management)
Weighting
50%
25%
25%
The Shareholder Value KPI compares the total shareholder return (TSR) of the Company against the ASX 200 TSR over the three year period.
The details of the amount of rights vesting, given the relative TSR performance, are detailed below:
% of 3 year Company TSR vs
ASX 200 TSR
< 100%
100%
105%
110%
115%
120%
> 125 %
% Vesting
0%
25%
30%
35%
40%
45%
50%
Subject to the employee satisfying the above service and performance conditions, a percentage of the Performance Rights will vest three years
after their grant date in accordance with the above table.
c.
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
Profit after tax from continuing operations
Dividends paid during the year
Share price as at 31 July
Shareholders' funds
A$000's
A$000's
cents/share
$/share
A$000's
Year ended 31 July
2014
58,450
58,449
16.00
3.00
1,973,859
2013
74,129
74,128
31.00
3.76
2,016,456
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
d.
Non-executive director remuneration policy
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 $1,750,000 (2013 - $1,750,000) per annum. There is no proposal to increase Directors’ Fees for the
2015 financial year.
e.
Voting made at the company’s 2013 Annual General Meeting
The Company received 98% “yes” votes on its remuneration report for the 2013 financial year.
Remuneration report (continued)
f.
Details of remuneration
Details of remuneration of Directors and the key management personnel of New Hope Corporation Limited are set out below for the current
and previous financial years.
Short-term employee benefits
Cash
bonus7
$
Cash salary
and fees
$
Non cash
benefits8
$
Long-term
benefits
Post
employment
benefits
Share based
payments
LSL
$
Super-
annuation
$
Termination
Benefits
$
Rights
$
Total
$
2014
Non-executive Directors
Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr W.H. Grant6
Ms S.J. Palmer5
Mr I.M. Williams
Total Non-executive Directors
Executive Directors
Mr R.C. Neale 1
Key Management Personnel
Mr S.O. Stephan 2
Mr B.D. Denney
Mr M.J. Busch 3
Total Key Management Personnel
293,000
135,000
135,000
150,000
160,000
135,000
1,008,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,836
12,516
12,516
13,906
14,833
12,516
84,123
-
-
-
-
-
-
-
-
-
-
-
-
-
-
310,836
147,516
147,516
163,906
174,833
147,516
1,092,123
702,688
285,000
96,936
13,123
8,887
176,315
421,744
1,704,693
905,621
592,280
456,003
1,953,904
433,175
340,813
201,863
975,851
114,269
24,555
83,535
222,359
65,376
1,838
47,005
114,219
18,074
18,027
18,873
54,974
-
-
-
-
107,571
87,605
67,055
262,231
1,644,086
1,065,118
874,334
3,583,538
Total Remuneration - 2014
3,664,592
1,260,851
319,295
127,342
147,984
176,315
683,975
6,380,354
2013
Non-executive Directors
Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr W.H. Grant6
Ms S.J. Palmer 4, 5
Mr I.M. Williams 4
Total Non-executive Directors
Executive Directors
Mr R.C. Neale
Key Management Personnel
Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch
Total Key Management Personnel
293,000
135,000
135,000
150,000
120,000
101,250
934,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
16,579
12,178
12,178
13,531
10,833
9,141
74,440
1,443,559
550,000
44,631
24,074
16,579
596,942
611,770
416,114
1,624,826
201,375
191,250
106,250
498,875
2,873
22,941
28,964
54,778
99,409
-
-
6,981
6,981
16,579
16,579
16,579
49,737
31,055
140,756
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
309,579
147,178
147,178
163,531
130,833
110,391
1,008,690
808,244
2,887,087
192,730
142,927
115,469
451,126
1,010,499
985,467
690,357
2,686,323
1,259,370
6,582,100
Total Remuneration - 2013
4,002,635
1,048,875
Mr M.J. Busch previously held the position of Financial Controller and Company Secretary and was promoted to the position of CFO from 1 February 2014.
1 Mr R.C. Neale retired from the position of Managing Director and CEO as of 31 January 2014.
2 Mr S.O. Stephan previously held the position of CFO and was promoted to the position of CEO from 1 February 2014.
3
4 Appointed 1 November 2012.
5 Chairman of the Audit and Risk Committee.
6 Chairman of the Remuneration Committee and Chairman of the Nominations Committee.
7 Cash Bonus for 2014 represents 2013 at risk STI and 2014 STI based on new STI KPI measures, both expensed in the 2014 financial year.
8 Non Cash Benefits include movements in annual leave provisions.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014DIRECTORS’ REPORT - 31 JULY 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
Remuneration report (continued)
f.
Details of remuneration (continued)
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Mr R.C. Neale
Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch
Fixed Remuneration
2014
2013
53%
58%
61%
67%
66%
60%
68%
69%
At Risk - STI
At Risk - LTI
2014
17%
26%
32%
23%
2013
28%
19%
15%
17%
2014
25%
7%
8%
8%
2013
19%
20%
19%
15%
Since the LTIs are provided exclusively by way of rights, the percentages disclosed reflect the value of remuneration consisting of rights, based
on the value of rights expensed during the year.
g.
Employment contracts
The agreements with the senior executives provide for a cash salary, superannuation and a fully maintained motor 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.
Name
Term of agreement and notice period 1
Mr R.C. Neale
Managing Director
and
Chief Executive Officer
(retired 31 January 2014)
Mr S.O. Stephan
Chief Executive Officer
(promoted from 1 February
2014)
4
Mr B.D. Denney
Chief Operating Officer
Mr M.J. Busch
Chief
Officer
Financial
(promoted from 1 February
2014)
No fixed term
2 months' notice period
No fixed term
6 months' notice period
No fixed term
3 months' notice period
No fixed term
3 months' notice period
Base remuneration including
Superannuation 2
$
1,500,000
Termination Payments 3
$200,000 index by CPI from
1996
$
1,300,000
6 months’ base remuneration
$
750,000
3 months’ base remuneration
$ 600,000
3 months’ base remuneration
1 This notice applies equally to either party.
2 Base remuneration quoted is for the year ended 30 June 2014; they are reviewed annually by the remuneration committee.
3
Base salary payable if the company terminates employees with notice, and without cause (e.g. for reasons other than unsatisfactory
performance).
The contract with Mr Denney includes provision for a separation payment in the event of his termination as a result of takeover or merger of
the Company. The allowance is for less than one year’s remuneration.
4
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Remuneration report (continued)
h.
Details of 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 performance and service conditions. Performance and 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.
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
October 2011
October 2011
October 2011
December 2011
December 2011
December 2011
December 2011
December 2012
November 2013
November 2013
December 2012
November 2013
December 2012
December 2012
August 2013
August 2013
August 2014
August 2012
August 2013
August 2014
August 2015
August 2013
December 2013
January 2014
August 2014
January 2015
August 2015
August 2016
Value of a Right at
Grant Date ($)
5.17
5.17
5.17
6.02
6.02
6.02
6.02
4.03
4.03
4.03
4.03
4.03
4.03
4.03
No rights were awarded for the 2013 financial year
2009
2010
2010
2011
2011
2011
2011
2012
2012
2012
2012
2012
2012
2012
2013
Rights granted under the plan carry no dividend or voting rights.
Deferred award of outstanding LTI entitlements to CEO
At the Company’s Annual General Meeting in November 2012, shareholders approved the issue of Performance Rights to Mr Neale in respect
of outstanding LTI performance payments relating to the 2011 financial year. The payments had been deferred pending shareholder approval
at the Annual General Meeting.
At the Company’s Annual General Meeting in November 2013, shareholders approved the issue of Performance Rights to Mr Neale in respect
of outstanding LTI performance payments relating to the 2012 financial year. The payments had been deferred pending shareholder approval
at the Annual General Meeting.
CEO Retirement
With the retirement of Mr Neale, the Board considered the outstanding contribution Mr Neale has made to the company during his tenure as
CEO and Managing Director and it was agreed that upon his retirement all outstanding performance rights would vest.
In addition, it was
agreed that Mr Neale’s STI entitlement for the 2012/13 financial year would be paid in one instalment on or before his retirement date of 31
January 2014.
18
19
19
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014DIRECTORS’ REPORT - 31 JULY 2014 New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
Remuneration report (continued)
h.
Details of share based compensation (continued)
The deferral of the Performance Right issue, re-alignment of vesting conditions and the vesting of Performance Rights on retirement has had
an effect on the quantum of Share Based Payment Expense recognised in the remuneration report, and is summarised as follows:
Remuneration report (continued)
h.
Details of share based compensation (continued)
Name
Grant Date
Vesting Date
Number
Granted
Value per
Share ($)
Number
Vested
Vested
Percentage
Number
Forfeited
Forfeited
Percentage
Maximum
value yet to
vest
Period to
which LTI
relates
Date Performance
Rights Issued
2008
2008
2008
2008
2009
2009
2009
2009
2010
2010
2010
2010
2011
2011
2011
2012
2012
2012
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
September 2011
November 2012
November 2012
November 2012
November 2013
November 2013
November 2013
Number of
Performance
Rights Issued
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
52,317
52,317
52,317
Vesting Date in the
Ordinary Course
Amended Vesting
Date
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 August 2013
1 August 2014
1 August 2015
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
31 January 2014
1 December 2012
No change
31 January 2014
1 December 2013
1 January 2014
31 January 2014
Impact on 2013
Share Based
Payment
Expense
($)
Impact on 2014
Share Based
Payment
Expense
($)
-
-
-
-
-
-
-
69,375
-
-
68,803
44,519
73,318
131,972
82,485
140,558
129,746
67,468
808,244
-
-
-
-
-
-
-
-
-
-
-
44,519
-
-
82,485
70,279
81,091
143,370
421,744
Details of Rights over ordinary shares in the Company as at 31 July 2014, 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 service and
performance conditions each right will automatically vest and convert into one ordinary share in New Hope Corporation Limited. The minimum
value of the rights yet to vest is nil, as the rights will be forfeited if the vesting conditions are not met. The maximum value of the rights yet to
vest has been determined as the amount of the grant date fair value of the right that is yet to be expensed.
Mr R.C. Neale
Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch
27 Oct 11
27 Oct 11
17 Dec 11
17 Dec 11
15 Nov 13
15 Nov 13
15 Nov 13
27 Oct 11
27 Oct 11
17 Dec 11
17 Dec 11
17 Dec 11
17 Dec 12
17 Dec 12
17 Dec 12
17 Dec 12
17 Dec 11
17 Dec 11
17 Dec 11
17 Dec 12
17 Dec 12
17 Dec 12
17 Dec 12
27 Oct 11
27 Oct 11
17 Dec 11
17 Dec 11
17 Dec 11
17 Dec 12
17 Dec 12
17 Dec 12
17 Dec 12
01 Aug 13
31 Jan-141
01 Aug 13
31 Jan-141
01 Dec 13
01 Jan 14
31 Jan-141
01 Aug 13
01 Aug 14
01 Aug 13
01 Aug 14
01 Aug 15
01 Aug 13
01 Aug 14
01 Aug 15
01 Aug 16
01 Aug 13
01 Aug 14
01 Aug 15
01 Aug 13
01 Aug 14
01 Aug 15
01 Aug 16
01 Aug 13
01 Aug 14
01 Aug 13
01 Aug 14
01 Aug 15
01 Aug 13
01 Aug 14
01 Aug 15
01 Aug 16
48,999 5.17
24,398 5.17
36,537 6.02
36,538 6.02
52,317 4.03
52,317 4.03
52,317 4.03
10,040 5.17
10,040 5.17
8,432 6.02
8,432 6.02
8,432 6.02
11,211 4.03
11,211 4.03
11,211 4.03
11,210 4.03
8,010 6.02
8,010 6.02
8,010 6.02
11,211 4.03
11,211 4.03
11,211 4.03
11,210 4.03
5,020 5.17
5,020 5.17
4,005 6.02
4,005 6.02
4,005 6.02
8,408 4.03
8,408 4.03
8,408 4.03
8,408 4.03
48,999
24,398
36,537
36,538
52,317
52,317
52,317
10,040
-
8,432
-
-
11,211
-
-
-
8,010
-
-
11,211
-
-
-
5,020
-
4,005
-
-
8,408
-
-
-
100%
100%
100%
100%
100%
100%
100%
100%
0%
100%
0%
0%
100%
0%
0%
0%
100%
0%
0%
100%
0%
0%
0%
100%
0%
100%
0%
0%
100%
0%
0%
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13,844
-
-
16,943
24,642
-
-
13,151
-
-
16,943
24,642
-
-
-
-
6,575
-
-
12,707
18,482
1 Rights for Mr R.C. Neale vested upon retirement as decided by the Board.
The fair value of the rights is determined based on the market price of the Company’s shares at the grant date.
i.
Equity instruments held by Key Management Personnel
The tables on the following page show the number of rights and shares in the Company that were held during the financial year by key
management personnel of the Group, including their close family members and entities related to them.
There were no shares granted during the reporting period as remuneration.
Rights holdings
Name
Mr R.C. Neale
Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch
Balance at
the start of
the year
303,423
90,219
68,873
55,687
Granted as
remuneration
Vested
-
-
-
-
(303,423)
(29,683)
(19,221)
(17,433)
Balance at
the end of
the year
-
60,536
49,652
38,254
Unvested
-
60,536
49,652
38,254
20
21
20
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014DIRECTORS’ REPORT - 31 JULY 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
Remuneration report (continued)
i.
Equity instruments held by Key Management Personnel
Share holdings
Name
Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr W.H. Grant
Ms S.J. Palmer
Mr I.M. Williams
Mr R.C. Neale
Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch
Balance at
the start of
the year
Purchased /
(sold)
Received on
the vesting of
rights
Other
changes
during the
year1
3,681,962
119,234
11,000
30,000
-
-
2,287,736
42,712
8,010
664,045
-
-
-
-
15,000
16,650
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
303,423
29,683
19,221
17,433
(2,591,159)
-
-
-
Balance at
the end of
the year
3,681,962
119,234
11,000
30,000
15,000
16,650
-
72,395
27,231
681,478
1 Other changes for Mr R.C. Neale represent balance of final holdings upon retirement.
j.
Other transactions with Key Management Personnel
Mr R.D. Millner and Mr P.R. Robinson are Directors of New Hope Corporation Limited and Pitt Capital Partners Limited. Pitt Capital Partners
Limited acted as financial advisor to the Group for various corporate transactions during the 2014 and 2013 financial years. All transactions
are at normal commercial terms.
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 normal commercial terms.
Aggregate amounts of each of the above types of transactions with key management personnel were as follows:
Legal advice
Financial advice
$
$
1,013,354
409,627
Shares issued on the vesting of rights
Since the end of the financial year 66,337 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 and advisory services
General advisory services
Tax compliance services
Tax compliance services - MRRT
Tax compliance services - PRRT
Research and development compliance services
Non PricewaterhouseCoopers firms:
Taxation services
Total remuneration for non-audit services
Total auditors remuneration
Consolidated
2014
2013
448,066
355,629
1,045
449,111
-
355,629
435,664
56,920
94,907
1,500
43,354
223,534
421,090
63,397
160,752
192,670
43,795
270,348
-
-
855,879
1,152,052
1,304,990
1,507,681
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 25.
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.
22
23
22
23
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014DIRECTORS’ REPORT - 31 JULY 2014
DIRECTORS’ REPORT - 31 JULY 2014
New Hope Corporation Limited and Controlled Entities
Directors Report - 31st July 2014
Meetings of Directors
The following table sets out the number of meetings of the Company's Directors held during the year ended 31 July 2014 and the number of
meetings attended by each Director:
Mr R.D. Millner
Mr P.R. Robinson
Mr D.J. Fairfull
Mr W.H. Grant
Ms S.J. Palmer
Mr I.M. Williams
Mr R.C. Neale (retired 31 January 2014)
Full meetings
of Directors
Held
14
14
14
14
14
14
7
Attended
13
14
14
13
13
14
6
Audit Committee
Held
-
-
3
3
3
-
-
Attended
-
-
3
2
3
-
-
Remuneration
Committee
Nomination
Committee
Held
-
2
-
2
-
2
-
Attended
-
2
-
2
-
2
-
Held
-
1
-
1
-
1
-
Attended
-
1
-
1
-
1
-
Signed at Sydney this 22nd day of September 2014 in accordance with a resolution of Directors.
R.D. Millner
Director
S.J. Palmer
Director
24
24
25
25
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 CORPORATE GOVERNANCE
STATEMENT
New Hope Corporation Limited
Corporate Governance Statement
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
the Corporate Governance Principles and
in the Australian Securities Exchange (ASX) Corporate Governance Council's 2nd Edition of
Recommendations .
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.
Foundations for management and oversight
In discharging this responsibility, the Board
The Board is ultimately responsible for the operations, management and performance of the Company.
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:
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.
The performance of Non-executive Directors is reviewed by the Remuneration 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 Committee,
Nomination Committee and the Board as a whole.
The performance of senior management was reviewed by the Remuneration Committee during the year in accordance with its established
procedures.
Board structure
At the date of this report the Board consists of six Non-executive Directors. 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:
The size of the Board and membership represents an appropriate balance between Directors with experience and knowledge of the Group and
In accordance with the Company's Constitution, the Board should comprise no less than three or more than ten 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.
Directors with an external perspective.
The Company has not strictly complied with ASX corporate governance principles in that the Board does not consist of a majority of independent
Non-executive Directors . Mr Robert Millner (Chairman), Mr Peter Robinson and Mr David Fairfull are Directors of New Hope Corporation Limited's
major shareholder, Washington H. Soul Pattinson and Company Limited. Ms Sue Palmer, Mr Ian Williams and Mr William Grant are considered
independent.
Whilst all the Non-executive Directors cannot be considered "independent" in accordance with the ASX corporate governance principles, 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.
The 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:
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 addresses diversity via 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.
26
27
27
26
27
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 New Hope Corporation Limited
Corporate Governance Statement
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.
Ensure policies, procedures and guidelines
support the delivery of a flexible, tolerant and
accommodating 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.
to
pay
A commitment
equity whereby
remuneration is set based on the market based
data and each individual’s qualifications and
experience.
This includes flexible working arrangements for new parents returning to work in the form of:
The ability to work from home;
The option to have non-standard working hours; and
The ability to work part-time for a period before returning to full time work.
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 location. This is further 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
1
5
71
6
43
495
7
48
566
14%
10%
13%
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 Ms S.J. Palmer (Chairperson),
Mr W.H. Grant and Mr D.J. Fairfull. 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, CEO, CFO, Company Secretary and the internal auditor may attend Audit Committee meetings by
invitation.
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 13 and 24.
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.
The function of the Audit Committee is to assist the Board in fulfilling its statutory and fiduciary responsibilities relating to:
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 2001 , ASX Listing Rules and any other applicable requirements; and
The application and adequacy of risk management systems within the Company.
The CEO and CFO 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 2001 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:
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:
Regular detailed financial, budgetary and management reporting;
Procedures to manage financial, operational, strategic, market, and regulatory risks;
Established organisational structures, procedures and policies dealing with the areas of health and safety, environmental issues, 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.
The CEO and CFO 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 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 Committee consists of Non-executive Directors who are responsible for reviewing and proposing remuneration and other
terms of employment for Non-executive Directors. Details of the attendance at meetings of the Remuneration Committee is included on page 24
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 $1,750,000 (2013 - $1,750,000) per annum.
28
29
29
28
29
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 New Hope Corporation Limited
Corporate Governance Statement
Remuneration of senior executives is reviewed annually by the Remuneration 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:
Trading is prohibited when Directors and employees are in possession of price sensitive information which is not available to the public;
Trading is prohibited during the period of four weeks prior to the announcement of the Company’s half year and full year results;;
The Company has established the following share trading windows each for a period of six weeks commencing from:
The release of the Company's annual result to the Australian Securities Exchange;
The release of the Company's half yearly result to the Australian Securities Exchange;
The date of the Annual General Meeting; and
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, two directors of New Hope Corporation Limited.
ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 31 JULY 2014
ANNUAL FINANCIAL REPORT
Annual Financial Report
FOR THE YEAR ENDED 31 JULY 2014
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Contents
Financial Report
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the financial statements
Directors' declaration
Independent audit report to the members
Page
32
33
34
35
36
76
77
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 22 September 2014. 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.newhopegroup.com.au.
30
31
30
31
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 JULY 2014
BALANCE SHEET AS AT 31 JULY 2014
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2014
Consolidated Statement of Comprehensive Income
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
BALANCE SHEET
AS AT 31 JULY 2014
Consolidated Balance Sheet
as at 31st July 2014
New Hope Corporation Limited and Controlled Entities
Revenue from continuing operations
Other income
Expenses
Cost of sales
Marketing and transportation
Administration
Other expenses
Impairment of assets
Share of net loss of associate
Profit before income tax
Petroleum resource rent tax benefit
Income tax expense
Profit after income tax for the year
Profit attributable to:
New Hope Shareholders
Non-controlling interests
Other comprehensive income
Items that may be reclassified to profit and loss:
Changes to the fair value of cash flow hedges, net of tax
Transfer to profit and loss for cash flow hedges, net of tax
Changes to the fair value of 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
37
8
8
27
27
27
2014
$000
2013
$000
548,959
17,484
566,443
(336,949)
(134,802)
(12,208)
(7,072)
(4,365)
-
71,047
7,317
(19,915)
58,449
652,097
4,328
656,425
(319,933)
(139,327)
(16,213)
(7,205)
(51,377)
(386)
121,984
1,509
(49,365)
74,128
58,450
(1)
58,449
74,129
(1)
74,128
14,477
13,958
4,046
32,481
90,930
90,931
(1)
90,930
(39,824)
(10,431)
(4,729)
(54,984)
19,144
19,145
(1)
19,144
Current assets
Cash and cash equivalents
Receivables
Inventories
Held to maturity investments
Held for sale financial assets
Current tax assets
Other
Total current assets
Non-current assets
Receivables
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
Derivative financial instruments
Provisions
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Provisions
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
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
7.0
7.0
8.9
8.9
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
Equity
Contributed equity
Reserves
Retained profits
Capital and reserves attributable to New Hope Shareholders
Non-controlling interests
Total equity
Notes
10
11
12
13
16(a)
14
15
16(b)
35
17
18
20
21
35
24
23
25
35
26
27(a)
27(b)
2014
$000
2013
$000
57,015
51,430
56,519
1,067,241
27,183
3,693
271
1,263,352
2,576
2,256
2,447
784,998
105,332
24,881
922,490
2,185,842
42,504
-
3,255
28,125
73,884
85,197
52,902
-
138,099
211,983
1,973,859
95,119
27,400
1,851,289
1,973,808
51
1,973,859
21,564
57,905
58,673
1,229,608
-
-
614
1,368,364
2,775
30,215
-
764,037
77,210
25,963
900,200
2,268,564
46,758
18,924
29,721
32,148
127,551
67,733
45,117
11,707
124,557
252,108
2,016,456
93,342
(3,988)
1,925,767
2,015,121
1,335
2,016,456
The above balance sheet should be read in conjunction with the accompanying notes.
32
33
32
33
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 JULY 2014
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 JULY 2014
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2014
Consolidated Statement of Changes in Equity
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 JULY 2014
Consolidated Cash Flow Statement
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes
2014
$000
2013
$000
Contributed
Equity
Notes
$000
Reserves
$000
Retained
Earnings
Non-controlling
Interests
$000
$000
Total
$000
Cash flows from operating activities
Receipts from customers inclusive of GST
Payments to suppliers and employees inclusive of GST
Balance at 1 August 2012
92,509
50,570
2,109,104
733
2,252,916
Income taxes paid
Net cash inflow from operating activities
33
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
Share of non-controlling interests equity contributions
Balance at 31 July 2013
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
Share of non-controlling interests equity contributions
9
9
27
27
9
9
27
27
-
-
-
-
-
833
-
-
833
-
(54,984)
(54,984)
74,129
-
74,129
-
-
(833)
1,259
-
426
(91,360)
(166,106)
-
-
-
(257,466)
(1)
-
(1)
-
-
-
-
603
603
74,128
(54,984)
19,144
(91,360)
(166,106)
-
1,259
603
(255,604)
93,342
(3,988)
1,925,767
1,335
2,016,456
-
-
-
-
-
1,777
-
-
1,777
-
32,481
32,481
-
-
(1,777)
684
-
(1,093)
58,450
-
58,450
(91,392)
(41,536)
-
-
-
(132,928)
(1)
-
(1)
58,449
32,481
90,930
-
-
-
-
(1,283)
(1,283)
(91,392)
(41,536)
-
684
(1,283)
(133,527)
Balance at 31 July 2014
95,119
27,400
1,851,289
51
1,973,859
The above statement of changes in equity should be read in conjunction with the accompanying notes.
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 held to maturity investments
Proceeds from sale of property, plant and equipment
Net proceeds from sale of non-current assets
Interest received on held to maturity investments
Net cash inflow from investing activities
Cash flows from financing activities
Joint venture partner contributions
Dividends paid
Net cash 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
The above cash flow statement should be read in conjunction with the accompanying notes.
520,558
(426,311)
94,247
(29,935)
64,312
(81,119)
(31,587)
-
(9,298)
-
344
160,793
504
23,000
42,479
105,116
560,422
(425,439)
134,983
(42,345)
92,638
(106,584)
(21,175)
(44,260)
-
(730)
(55)
216,901
936
5,813
61,060
111,906
108
(132,928)
(132,820)
601
(257,466)
(256,865)
36,608
21,564
(1,157)
57,015
(52,321)
70,990
2,895
21,564
10
34
35
35
34
35
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
NOTES TO THE FINANCIAL STATEMENTS
Notes to the financial statements
FOR THE YEAR ENDED 31 JULY 2014
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 and together are referred to as the Group or the consolidated entity in this financial report.
a.
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
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.
Comparative information has been reclassified where appropriate to enhance comparability.
(i) Compliance with International Financial Reporting Standards (IFRS)
The consolidated financial statements of the Group also comply with 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.
b.
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 31 July 2014 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities (including special purpose entities) over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are deconsolidated 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
of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity method of accounting, after initially
being recognised at cost.
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.
b.
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 Arrangements
Under AASB 11 Joint Arrangements ,
investments in joint arrangements are classified as either joint operations or joint ventures. The
classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. The
Group has both joint operations and joint ventures.
Joint Operations
The Group recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or
incurred assets, liabilities, revenues and expenses. These have been incorporated in the financial statements under the appropriate headings.
Details of the joint operations are set out in note 38.
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 ventures are set out in note 38.
c.
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).
d.
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.
36
37
37
36
37
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
d.
Foreign currency translation (continued)
(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:
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
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
e.
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.
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:
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.
Oil 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 oil sales this is normally when the oil 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)).
f.
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
It establishes provisions
positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation.
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.
f.
Income tax (continued)
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.
Tax consolidation legislation
New Hope Corporation Limited and its wholly owned Australian controlled entities implemented the tax consolidation legislation as of 1 August
2003.
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
If those amounts are
previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill.
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
g.
h.
38
39
39
38
39
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
i.
j.
k.
a.
36
b.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
New Hope Corporation Limited and Controlled Entities
Comparative information has been reclassified where appropriate to enhance comparability.
report has been prepared in accordance with Australian Accounting Standards, other authoritative
Notes to the financial statements
for the year ended 31st July 2014
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group (note 1(h)).
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.
(i) Compliance with International Financial Reporting Standards (IFRS)
The consolidated financial statements of the Group also comply with IFRS as issued by the International Accounting Standards Board (IASB).
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.
Basis of preparation of accounts
This general purpose financial
pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations and the Corporations Act 2001.
(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.
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.
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.
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 and together are referred to as the Group or the consolidated entity in this financial report.
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 31 July 2014 and the results of all subsidiaries for the year then ended.
(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.
(ii) Associates
Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding
of between 20% and 50% of the voting rights.
Investments in associates are accounted for using the equity method of accounting, after initially
being recognised at cost.
Subsidiaries are all those entities (including special purpose entities) over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
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.
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 cash flows 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.
l.
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 weighted average cost.
Work in progress is stated at the lower of cost and net realisable value.
m.
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.
n.
Available for sale financial assets
Investments and other financial assets
The Group classifies its financial assets in the following categories:
(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.
(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 14) 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
events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
In the
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.
(iv) Assets classified as available for sale
If there is objective evidence of impairment of 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.
o.
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.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o.
Derivatives - Forward foreign exchange contracts (continued)
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.
p.
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.
q.
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.
r.
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.
s.
t.
u.
v.
w.
Deferred stripping costs
The Group does not recognise any deferred stripping costs. Based on the nature of the Group's mining operations and the stripping ratio for
the components of its operations, the recognition criteria of a deferred stripping asset are not satisfied. Further, it is anticipated that the
In the
operations will maintain a consistent stripping ratio at the component level and as such no overburden in advance should be recognised.
event that a stripping campaign is undertaken in the future a deferred stripping asset will be recognised at that time and amortised in
accordance with the requirements of IFRIC 20. An asset will be recognised for stripping activity where the following criteria are met:
It is probable that the future economic benefit (improved access to the ore body) associated with the stripping activity will flow to the entity;
The entity can identify the component of the ore body for which access has been improved; and
The costs relating to the stripping activity associated with that component can be measured reliably.
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, or more frequently if events or changes in circumstances indicate that it might be impaired, 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).
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.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
w.
Employee benefits (continued)
(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.
deduction net of tax, from the proceeds. The amounts of any capital returns are applied against contributed equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
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.
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.
x.
y.
z.
aa.
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.
ab.
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.
ac.
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.
ad.
ae.
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 and amended standards adopted by the Group
The Group has applied the following standards and amendments for first time in their annual reporting period commencing 1 August 2013:
AASB 10 Consolidated Financial Statements , AASB 11 Joint Arrangements and AASB 2011-7 Amendments to Australian Accounting
Standards arising from the Consolidation and Joint Arrangements Standards ;
AASB 2012-10 Amendments to Australian Accounting Standards – Transition Guidance and other Amendments which
provides an exemption from the requirement to disclose the impact of the change in accounting policy on the current period;
AASB Interpretation 20 (IFRIC 20), Stripping Costs in the Production Phase of a Surface Mine;
AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 ;
AASB 119 Employee Benefits (September 2011) and AASB 2011-10 Amendments to Australian Accounting Standards arising from
AASB 119 (September 2011) ;
AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009–2011 Cycle ; and
AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial
Liabilities .
The adoption of AASB 10, AASB 11, AASB 13 and IFRIC 20 did not affect any of the amounts recognised in the current period or any prior
periods. The standards only affected the disclosures in the notes to the financial statements. The revised standard AASB 119 Employee
Benefits has changed the accounting for the group’s annual leave obligations. However, the impact of this change was not material.
af.
New accounting standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 July 2014 reporting periods and
have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations is set out
below.
(i)
IFRS 15 Revenue from Contracts with Customers - IFRS 15 outlines a single comprehensive model for entities to use in accounting
for revenue arising from contracts with customers.
It supersedes current revenue recognition guidance including IAS 18 Revenues,
IAS 11 Construction Contracts and related Interpretations. The core principle is that an entity recognises revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. This standard also allows costs associated with obtaining a contract to be capitalised and
amortised over the life of the new contract. The Group has not yet assessed how its own revenue recognition would be affected by the
new rule. The Group does not intend on adopting the new standard before its operative date, which means that it would be first
applied in the annual reporting period ending 31 July 2018.
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ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
af.
New accounting standards and interpretations not yet adopted (continued)
(ii)
AASB 9 Financial Instruments - AASB 9 addresses the classification, measurement and derecognition of financial assets and financial
liabilities. Since December 2013, it also sets out new rules for hedge accounting. 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 at fair value through
profit or loss and the Group does not have any such liabilities. The new hedging rules align hedge accounting more closely with the
Group's risk management practices. As a general rule, it will be easier to apply hedge accounting going forward. The new standard
also introduces expanded disclosure requirements and changes in presentation. The Group has not yet assessed how its own hedging
arrangements would be affected by the new rules and it has not yet decided whether to adopt any parts of AASB 9 early. The Group
does not intend on adopting the new standard before its operative date, which means that it would be first applied in the annual
reporting period ending 31 July 2018.
There are no other standards that are not yet effective and that are expected to have a material impact on the Group in the current or future
reporting periods and on foreseeable future transactions.
ag.
Parent entity financial information
The financial information for the parent entity, New Hope Corporation Limited, disclosed in note 39 has been prepared on the same basis as
the consolidated financial statements, except as set out below.
(i)
(ii)
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 August 2003. 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.
ah.
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.
The Group holds the following financial instruments:
Financial assets
2014
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
Held to maturity investments
Held for sale financial assets
Derivative financial instruments
Other financial assets
2013
Cash and cash equivalents
Trade and other receivables
Available for sale financial assets
Held to maturity investments
Other financial assets
Financial liabilities
2014
Trade and other payables
Derivative financial instruments
2013
Trade and other payables
Derivative financial instruments
Held for Sale
$000
Available for
Sale
$000
Derivatives
used for
hedging
$000
-
-
-
-
27,183
-
-
27,183
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,256
-
-
-
-
2,256
-
-
30,215
-
-
30,215
-
-
-
-
-
-
-
-
-
-
-
2,447
-
2,447
-
-
-
-
-
-
-
3,255
3,255
-
41,428
41,428
Financial
assets /
liabilities
amortised at
cost
$000
57,015
54,006
-
1,067,241
-
-
271
1,178,533
21,564
60,680
-
1,229,608
614
1,312,466
42,504
-
42,504
46,758
-
46,758
Total
$000
57,015
54,006
2,256
1,067,241
27,183
2,447
271
1,210,419
21,564
60,680
30,215
1,229,608
614
1,342,681
42,504
3,255
45,759
46,758
41,428
88,186
a.
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.
46
47
47
46
47
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
2. FINANCIAL RISK MANAGEMENT (continued)
a.
Market risk (continued)
(i) Foreign exchange risk (continued)
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
2014
USD
$000
26,596
13,203
168,000
12
2013
USD
$000
5,927
18,617
412,000
-
Group sensitivity
Based on the trade receivables, cash and trade payables held at 31 July 2014, 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
$3,321,000/($2,717,000) (2013 - $2,112,000/($1,728,000)), mainly as a result of foreign exchange gains/losses on translation of US dollar
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 2014, had the Australian dollar weakened/strengthened by 10% against the US
dollar with all other variables held constant, the Group's equity would have increased/(decreased) by $20,314,000/($16,569,000) (2013 -
$41,820,000/($46,003,000)). There is no effect on post-tax profits. Equity in 2014 is less sensitive to movements in the Australian
dollar/USD exchange rates than in 2013 due to the decreased value of forward exchange contracts in 2014.
2. FINANCIAL RISK MANAGEMENT (continued)
b.
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
2014
$000
51,430
57,015
1,067,241
2,447
2013
$000
57,905
21,564
1,229,608
-
c.
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.
(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 and held for sale.
(i) Financing arrangements
The Group has no current need of external funding lines.
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
2014
$000
-
(150)
2013
$000
-
(3,099)
Impact on equity
2014
$000
3,518
(3,368)
2013
$000
3,518
(420)
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
(iii) Fair value interest rate risk
Refer to (e) below.
d.
e.
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
Group 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 $7,394,000 (2013 - $9,225,000).
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.
48
49
49
48
49
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).
c.
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
2. FINANCIAL RISK MANAGEMENT (continued)
f.
Fair value measurements (continued)
The following table presents the group's assets measured and recognised at fair value as at 31 July 2014 and 31 July 2013.
2014
Assets
Derivatives used for hedging
Held for sale financial assets
Equity securities
Available for sale financial assets
Equity securities
Total assets
Liabilities
Derivatives used for hedging
Total liabilities
2013
Assets
Available for sale financial assets
Equity securities
Total assets
Liabilities
Derivatives used for hedging
Total liabilities
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
-
2,447
-
2,447
27,183
-
-
27,183
2,256
29,439
-
2,447
-
-
2,256
31,886
-
-
3,255
3,255
-
-
3,255
3,255
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
30,215
30,215
-
-
-
-
30,215
30,215
-
-
41,428
41,428
-
-
41,428
41,428
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.
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.
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 Group and that are believed to be reasonable under the circumstances.
a.
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.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
a.
Critical accounting estimates and assumptions (continued)
(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) Impairment
The Group considers annually whether there have been any indicators of impairment and then, if indicators exist, tests whether non-current
assets, including goodwill, have suffered any impairment, in accordance with the accounting policy stated in note 1(i). The recoverable amounts
of assets and cash generating units have been determined based on fair value less costs to sell and is estimated based on recent market
transaction information. These calculations require the use of assumptions. Refer to notes 16, 17, 18 and 20 for further details on the carrying
amounts of non-current assets subject to impairment testing.
(iv) Mineral Resource Rent Tax (MRRT)
The MRRT legislation, effective from 1 July 2012, has resulted in deferred tax balances were recognised. The MRRT has been repealed with
an effective date yet to be confirmed. 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.
(v) Petroleum Resource Rent Tax (PRRT)
As a result of the 100% acquisition of Bridgeport Energy Limited during 2013, the Group is subject to PRRT effective 1 July 2012 being the date
of the extension of the PRRT to onshore petroleum projects. The Group accounted for the current and deferred tax impact of PRRT in
accordance with the requirements outlined above in relation to income tax. As such, the Group has recorded current and deferred tax assets
and liabilities relating to PRRT at the prevailing PRRT rate at 31 July 2014 and 31 July 2013.
New Hope Corporation Limited, as head company of the income tax consolidated has made a PRRT consolidation election and as such the
Group currently includes two PRRT consolidated groups at 31 July 2014 and 31 July 2013. The Group has accounted for its PRRT tax
balances in accordance with the stand alone taxpayer method in alignment with its tax funding agreement.
b.
Critical judgements in applying the entity's accounting policies
(i) Exploration and evaluation 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 2013 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
50
51
51
50
51
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
4. FINANCIAL REPORTING SEGMENTS
a.
Description of segments
The Group has four reportable segments, namely Coal mining (including mining related exploration, development, production and processing),
Oil and gas (including oil and gas related 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.
b.
Segment information
Coal
mining Oil and gas
$000
$000
Marketing
and
logistics
$000
Treasury and
investments
$000
4,169
207,000
211,169
16,359
(172)
(45,818)
(29,631)
-
(29,631)
7,831
-
(21,800)
20
(172)
(45,818)
-
14,153
-
14,153
200
-
(2,440)
(2,240)
-
(2,240)
(1,662)
7,317
3,415
114
-
(2,440)
-
489,888
-
489,888
58,126
-
(11,577)
46,549
-
46,549
(13,965)
-
32,584
22
-
(11,577)
-
40,749
-
40,749
38,987
-
-
38,987
17,382
56,369
(12,119)
-
44,250
40,749
-
-
-
Total
$000
548,959
207,000
755,959
113,672
(172)
(59,835)
53,665
17,382
71,047
(19,915)
7,317
58,449
40,905
(172)
(59,835)
-
Notes
5
5
7
37
Year ended 31 July 2014
Revenue from external customers
Intersegment revenue
Total revenue
EBITDA
Interest expense
Depreciation and amortisation
Profit before tax (before non regular items)
Non regular items before tax
Profit before tax (after non regular items)
Less Income tax benefit/(expense)
Less Petroleum resource rent tax benefit
Profit after tax (after non regular items)
Total segment profit before tax includes:
Interest revenue
Interest expense
Depreciation and amortisation
Share of net loss of associate
Reportable segment assets
Total segment assets includes:
Additions to non-current assets
4. FINANCIAL REPORTING SEGMENTS (continued)
b.
Segment information (continued)
Year ended 31 July 2013
Revenue from external customers
Intersegment revenue
Total revenue
EBITDA
Interest expense
Depreciation and amortisation
Profit before tax (before non regular items)
Non regular items before tax
Profit before tax (after non regular items)
Less Income tax benefit/(expense)
Less Petroleum resource rent tax benefit
Profit after tax (after non regular items)
Total segment profit before income tax includes:
Interest revenue
Interest expense
Depreciation and amortisation
Share of net loss of associate
Reportable segment assets
Total segment assets includes:
Additions to non-current assets
Coal
mining Oil and gas
$000
$000
Marketing
and
logistics
$000
Treasury and
investments
$000
11,279
305,184
316,463
101,094
(13)
(37,871)
63,210
-
63,210
(15,865)
-
47,345
-
(13)
(37,871)
-
6,369
-
6,369
(581)
-
(1,293)
(1,874)
-
(1,874)
108
1,509
(257)
-
-
(1,293)
-
569,746
-
569,746
56,928
-
(9,334)
47,594
-
47,594
(14,278)
-
33,316
-
-
(9,334)
-
64,703
-
64,703
63,645
-
-
63,645
(50,591)
13,054
(19,330)
-
(6,276)
60,594
-
-
(386)
Notes
5
5
7
37
Total
$000
652,097
305,184
957,281
221,086
(13)
(48,498)
172,575
(50,591)
121,984
(49,365)
1,509
74,128
60,594
(13)
(48,498)
(386)
689,524
105,117
192,536
1,281,387
2,268,564
145,270
38,177
9,964
-
193,411
c.
Other segment information
(i) Segment revenue
Total segment revenue
Japan
Taiwan/China
Chile
Korea
Australia
2014
$000
2013
$000
177,430
252,676
14,034
5,943
58,127
508,210
40,749
548,959
195,088
316,195
4,390
5,995
65,726
587,394
64,703
652,097
714,639
163,817
180,874
1,126,512
2,185,842
Investment income - Australia
58,097
44,971
9,092
-
112,160
52
52
53
53
53
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 2014, one customer contributed $252,676,000 (2013 - $308,467,000) in sales revenue , whilst another
customer contributed $66,656,000 (2013 - $65,560,000) in sales revenue. A further customer in 2013 contributed $71,153,000 but was below
10 per cent of the Group's total revenue for the year ended 31 July 2014.
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.
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
2014
$000
2013
$000
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.
5. REVENUE
From continuing operations
Sales revenue
Sale of goods
Services
Other revenue
Property rent
Interest
Sundry revenue
6. OTHER INCOME
Gain on sale of Westside Corporation Limited
Gain on sale of Quantex
Gain on Bridgeport previously held interest
Gain on sale of WICET Subscription
Gain/(loss) on sale of property, plant and equipment
7. EXPENSES
Profit before income tax includes the following specific expenses:
Foreign exchange gains and losses
Net foreign exchange losses/(gains)
Depreciation
Buildings
Plant and equipment
Amortisation
Mining reserves and mine development
Software
Oil producing assets
Other charges against assets
Impairment of investment in associates
Impairment of available for sale investments
Impairment of oil producing and exploration assets
Exploration costs expensed
Employee benefits expensed
Operating lease costs expensed
478,138
25,766
503,904
800
40,905
3,350
548,959
17,133
249
-
-
102
17,484
560,211
26,092
586,303
750
60,594
4,450
652,097
-
-
4,109
786
(567)
4,328
1,157
(2,895)
557
52,166
52,723
3,499
1,625
1,988
7,112
-
-
4,365
4,365
413
40,716
41,129
5,033
1,285
1,051
7,369
13,286
38,091
-
51,377
18,195
13,419
93,571
96,624
4,377
4,171
b.
Income Tax Expense
Current tax
Deferred tax
Adjustments for current tax of prior periods
Petroleum resource rent tax benefit
Deferred income tax expense/(revenue) included in income tax expense
comprises:
(Increase)/decrease in deferred tax assets (note 19)
Increase/(decrease) in deferred tax liabilities (note 23)
c.
Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax
Income tax calculated at 30% (2013 - 30%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Foreign tax loss not recognised
Sale of Investments
Share based payment expense
Impairment expense
Income tax on Petroleum resource rent tax
Non-deductible expenses
Sundry items
Under/(over) provided in prior year
Petroleum resource rent tax 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))
2014
$000
7,241
12,595
79
(7,317)
12,598
2013
$000
48,593
6,587
(5,815)
(1,509)
47,856
(656)
5,934
5,278
1,135
3,943
5,078
71,047
121,984
21,314
36,595
292
(4,791)
(190)
-
2,195
158
351
19,329
586
(7,317)
12,598
(12,186)
-
(12,186)
164
-
131
15,413
453
-
(412)
52,344
(2,979)
(1,509)
47,856
21,537
105
21,642
55
55
54
54
55
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
9. DIVIDENDS - New Hope Corporation Limited
a. Ordinary dividend paid
2012 final dividend at 5.00 cents per share - 100% franked at a tax rate of 30% (paid on 6 Nov 2012)
2012 special dividend at 20.00 cents per share - 100% franked at a tax rate of 30% (paid on 6 Nov 2012)
2013 interim dividend at 6.0 cents per share - 100% franked at a tax rate of 30% (paid on 1 May 2013)
2013 final dividend at 5.00 cents per share - 100% franked at a tax rate of 30% (paid on 4 Nov 2013)
2013 special dividend at 5.00 cents per share - 100% franked at a tax rate of 30% (paid on 4 Nov 2013)
2014 interim dividend at 6.00 cents per share - 100% franked at a tax rate of 30% (paid on 5 May 2014)
Total dividends paid
2014
$000
2013
$000
-
-
-
41,536
41,536
49,856
132,928
41,526
166,106
49,834
-
-
-
257,466
b. Proposed dividends
In addition to the above dividends, since the end of the financial year, the Directors have declared a final dividend of 2.0 cents and a special
dividend of 3.5 cents per fully paid share, (2013 - 5.0 cents per share and 5.0 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 4 November 2014 but not recognised as a
liability at year end is $45,705,000 (2013 - $83,072,000).
c. Franked dividends
The franked portions of the final dividends recommended after 31 July 2014 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 2014.
2014
$000
2013
$000
Franking credits available for subsequent financial years based on a tax rate of 30% (2013 - 30%)
515,854
565,512
The above amounts represent the balances of the franking accounts as at the end of the financial year, adjusted for franking debits that will
arise from the refund of 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 $19,588,000 (2013 - $35,602,000).
d. Dividend reinvestment plans
There were no dividend reinvestment plans in operation at any time during or since the end of the financial year.
11. CURRENT ASSETS - Receivables
Trade receivables (a)
Other receivables (b)
Prepayments
2014
$000
29,515
18,357
3,558
51,430
2013
$000
35,801
16,072
6,032
57,905
a. Past due but not impaired
As of 31 July 2014, trade receivables were past due but not impaired was $nil. These relate to customers who have no recent history of
default.
b. 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. None of these receivables are impaired or past due but not impaired.
c. 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.
d. 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 2014 amounted to $225,616,000
(2013 - $240,732,000).
Write-downs of inventory to net realisable value recognised as an expense during the year amounted to
.
$585,000 (2013 - $nil)
30,160
26,359
56,519
34,308
24,365
58,673
10. CURRENT ASSETS - Cash and cash equivalents
Cash at bank and on hand
2014
$000
57,015
57,015
2013
$000
21,564
21,564
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 3.44% (2013 - 4.54%). Due to their short-term nature the carrying value is assumed to
approximate fair value. Information about the Group's exposure to credit risk is disclosed in note 2.
1,067,241
1,067,241
1,229,608
1,229,608
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 cash flows of the Group, and attracts
interest at rates between 0% and 2.65% (2013 - 0% to 2.75%).
14. CURRENT ASSETS - Other
Security deposits
b. Risk exposure
Information about the Group's exposure to foreign exchange risk and credit risk is detailed in note 2.
15. NON-CURRENT ASSETS - Receivables
Prepayments
Other receivables
56
56
57
271
271
729
1,847
2,576
614
614
1,244
1,531
2,775
57
57
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
15. NON-CURRENT ASSETS - Receivables (continued)
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. ASSETS - Available for sale and Held for sale financial assets
a. CURRENT ASSETS - Held for sale financial assets
Listed securities
Equity securities
It is noted that the Held for sale financial assets relate to the reclassification during the year of equity
securities held in Dart Energy Limited.
NON-CURRENT ASSETS - Available for sale financial assets
b.
Listed securities
Equity securities
Unlisted securities
Equity securities
There were no impairment expenses on equity securities held during the year (2013 - $38,091,000).
17. NON-CURRENT ASSETS - Property, plant and equipment
Land and buildings - non-mining
Freehold land at cost
Buildings at cost
Accumulated depreciation
Leasehold improvements
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
Motor vehicles
Motor vehicles at cost
Accumulated depreciation
2014
$000
2013
$000
17. NON-CURRENT ASSETS - Property, plant and equipment (continued)
Mining reserves and leases
Mining reserves and leases at cost
Accumulated amortisation
Mine properties, mine development
Mine properties, mine development at cost
Accumulated amortisation
27,183
27,183
-
-
Oil producing assets
Oil producing assets at cost
Accumulated amortisation
2,253
30,212
3
2,256
3
30,215
1,049
10,158
(1,754)
8,404
419
(200)
219
9,672
141,729
4,680
(779)
3,901
145,630
567,088
(295,646)
271,442
6,392
(4,197)
2,195
1,049
8,930
(1,099)
7,831
384
(80)
304
9,184
132,766
5,495
(997)
4,498
137,264
551,031
(251,801)
299,230
6,784
(3,765)
3,019
Plant and equipment under construction
Total Property, plant and equipment
Reconciliations
Land and buildings - non-mining
Carrying amount at beginning of year
Additions
Disposals
Depreciation
Transfers in/(out)
Carrying amount at end of year
Land and buildings - held for mining
Carrying amount at beginning of year
Additions
Disposals
Depreciation
Transfers in/(out)
Carrying amount at end of year
Plant and equipment
Carrying amount at beginning of year
Additions
Additions on acquisition of subsidiary
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
2014
$000
2013
$000
228,297
(8,180)
220,117
63,738
(50,655)
13,083
94,113
(3,039)
91,074
230,710
(7,713)
222,997
59,286
(47,623)
11,663
62,483
(1,051)
61,432
31,785
19,248
784,998
764,037
9,184
188
-
(431)
731
9,672
137,264
9,087
(12)
(126)
(583)
145,630
299,230
21,457
-
(70)
(50,952)
1,777
271,442
3,019
709
(340)
(1,214)
21
2,195
9,168
383
(40)
(340)
13
9,184
132,516
4,946
(165)
(73)
40
137,264
261,715
22,512
1,118
(880)
(39,432)
54,197
299,230
2,766
-
(160)
(1,284)
1,697
3,019
58
59
59
58
59
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
17. NON-CURRENT ASSETS - Property, plant and equipment (continued)
2014
$000
2013
$000
Reconciliations (continued)
Mining reserves and leases
Carrying amount at beginning of year
Additions
Amortisation
Transfers in/(out)
Carrying amount at end of year
Mine properties and mine development
Carrying amount at beginning of year
Additions
Amortisation
Transfers in/(out)
Carrying amount at end of year
Oil producing assets
Carrying amount at beginning of year
Additions
Additions on acquisition of subsidiary
Amortisation
Impairment of asset
Transfers in/(out)
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
Additions on acquisition of subsidiary
Impairment of asset
Transfers in/(out)
Carrying amount at end of year
222,997
-
(534)
(2,346)
220,117
11,663
2,039
(2,965)
2,346
13,083
61,432
32,429
-
(1,988)
(900)
101
91,074
19,248
16,482
(3,945)
31,785
105,332
105,332
77,210
29,769
-
(3,465)
1,818
105,332
`
220,918
2,412
(333)
-
222,997
16,363
-
(4,700)
-
11,663
-
14,971
47,512
(1,051)
-
-
61,432
15,756
61,575
(58,083)
19,248
77,210
77,210
39,228
21,175
16,807
-
-
77,210
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
Arising on Petroleum resource rent tax
Tax losses
Other
Amounts recognised directly in equity
Cash flow hedges
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))
(Credited)/charged to equity
Amounts recognised on acquisition of subsidiary
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
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
Additions
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.
60
60
61
2014
$000
2013
$000
904
8,562
15,788
2,614
9,321
221
37,410
916
9,634
13,545
-
9,563
3,096
36,754
242
12,428
(37,652)
-
(49,182)
-
49,182
656
(12,186)
-
37,652
27,186
10,466
37,652
12,853
(9,996)
2,857
22,024
22,024
24,881
3,939
463
80
(1,625)
2,857
31,199
(1,135)
12,428
6,690
49,182
44,208
4,974
49,182
12,538
(8,599)
3,939
22,024
22,024
25,963
2,932
156
2,136
(1,285)
3,939
61
61
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
20. NON-CURRENT ASSETS - Intangibles (continued)
Reconciliation (continued)
Goodwill (i)
Carrying amount at beginning of year
Acquisition of subsidiary
Carrying amount at end of year
2014
$000
2013
$000
22,024
-
22,024
17,867
4,157
22,024
(i) Brought forward goodwill relates to the acquisition of Queensland Bulk Handling Pty Ltd, Northern Energy Corporation Limited (NEC) and
Bridgeport Energy Limited.
The recoverable amount of the NEC cash generating units has been based on fair values less cost to sell. This assessment is determined
under Level 2 of the fair value hierarchy based on observable external market data for reserve and resource transaction multiples, rather than
quoted prices. The transaction multiples observed have included recent transactions only and included similar Australian coal exploration
projects, with respect of coal type to the NEC assets.
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
Arising on Petroleum resource rent tax
Other
Amounts recognised directly in other comprehensive income
Property, plant and equipment
Total deferred tax liabilities
42,504
42,504
46,758
46,758
Set-off of deferred tax assets pursuant to set-off provisions (note 19)
Net deferred tax liabilities
21. CURRENT LIABILITIES - Accounts payable
Trade payables and accruals
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(ab).
100,000
100,000
63,936
63,936
36,064
36,064
75,000
75,000
63,101
63,101
11,899
11,899
39,054
38,230
(ii) Statutory body suppliers
24,882
24,871
No liability was recognised by the consolidated entity in relation to these guarantees as no losses are
foreseen on these contingent liabilities.
Movements
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(ab))
Native title claim
a. Mining restoration and rehabilitation
Current
Non-current
Movements
Carrying amount at beginning of year
Additional provision recognised
Charged/(credited) to profit and loss - additional provisions recognised
Charged to profit and loss - unwinding of discount
Carrying amount at end of year
62
62
63
2014
$000
2013
$000
379
7,185
20,216
18,574
66,028
-
3,307
115,689
295
5,989
14,789
14,951
66,899
4,701
2,131
109,755
7,160
7,160
7,160
7,160
122,849
116,915
(37,652)
85,197
(49,182)
67,733
116,915
5,934
-
-
122,849
115,092
7,757
122,849
25,084
2,904
137
28,125
2,904
49,582
52,486
48,508
4,480
(2,295)
1,793
52,486
114,116
3,943
(9,215)
8,071
116,915
110,631
6,284
116,915
25,616
6,415
117
32,148
6,415
42,093
48,508
38,027
4,726
4,854
901
48,508
63
63
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
24. CURRENT LIABILITIES - Provisions (continued)
b. Amounts not expected to be settled within the next 12 months
Long service leave obligations expected to be settled after 12 months
2014
$000
2013
$000
6,414
6,619
c.
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(ab))
Native title claim
3,310
49,582
10
52,902
3,004
42,093
20
45,117
26. CONTRIBUTED EQUITY (continued)
e.
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.
Note
2014
$000
2013
$000
27. RESERVES
a. Reserves
Capital profits
Available for sale/Held for sale investments revaluation
Property, plant and equipment revaluation
Hedging
Share-based payment
Premium paid on non-controlling interest acquisition
a.
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.
Movements
Capital profits
Carrying amount at beginning of year
Carrying amount at end of year
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
Available for sale/Held for sale investments revaluation
b.
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.
c. Share Capital
Issued and paid up capital
d.
Movements in share capital
2014
No. of shares
2014
2013
$000 No. of shares
2013
$000
830,933,112
95,119
830,563,352
93,342
Date
Details
1 August 2012
Opening Balance
1 August 2012
1 December 2012
31 July 2013
Vesting of performance rights
Vesting of performance rights
Transfer from SBP reserve to Equity (note 27(a))
31 July 2013
Balance
1 August 2013
1 December 2013
1 January 2014
31 January 2014
31 July 2014
Vesting of performance rights
Vesting of performance rights
Vesting of performance rights
Vesting of performance rights
Transfer from SBP reserve to Equity (note 27(a))
31 July 2014
Balance
Issue
Price
$0.0000
$0.0000
$0.0000
$0.0000
$0.0000
$0.0000
Number of
Shares
830,411,534
115,281
36,537
830,563,352
151,873
52,317
52,317
113,253
830,933,112
$000
92,509
-
-
833
93,342
-
-
-
-
1,777
95,119
Carrying amount at beginning of year
Revaluation - gross
Revaluation - deferred tax
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
Carrying amount at end of year
64
64
65
1,343
4,690
27,412
(565)
549
(6,029)
27,400
1,343
1,343
644
4,046
-
4,690
1,343
644
27,412
(29,000)
1,642
(6,029)
(3,988)
1,343
1,343
5,373
(4,834)
105
644
27,412
27,412
27,412
27,412
(29,000)
19,940
(5,982)
20,681
(6,204)
(565)
1,642
684
(1,777)
549
(6,029)
(6,029)
21,255
(14,901)
4,470
(56,891)
17,067
(29,000)
1,216
1,259
(833)
1,642
(6,029)
(6,029)
65
65
8(d)
8(d)
8(d)
30(a)
26(d)
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
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
2014
$000
2013
$000
1,925,767
58,450
(132,928)
1,851,289
2,109,104
74,129
(257,466)
1,925,767
29. COMMITMENTS
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
30. KEY MANAGEMENT PERSONNEL DISCLOSURES
a. Directors
The following persons were Directors of New Hope Corporation Limited during the financial year:
2014
$000
2013
$000
4,249
18,554
48,847
71,650
3,497
15,508
48,012
67,017
Chairman - Non-executive
Mr R.D. Millner
Non-executive Directors
Mr P.R. Robinson
Mr D.J. Fairfull
Mr W.H. Grant
Ms S.J. Palmer
Mr I.M. Williams
Executive Directors
Mr R.C. Neale
Chief Executive Officer and Managing Director (retired 31 January 2014)
28. CONTINGENT LIABILITIES
Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the
accounts, are as follows:
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:
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.
14,832
14,822
10,049
10,049
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
10,014
-
-
10,014
9,885
-
-
9,885
Name
Mr S.O. Stephan
Mr B.D. Denney
Mr M.J. Busch
Position
Chief Executive Officer (promoted 1 February 2014)
Chief Operations Officer
Chief Financial Officer (promoted 1 February 2014)
c. Key management personnel compensation
Short-term employee benefits
Long-term employee benefits
Post employment benefits
Termination benefit
Share based payment
Employer
New Hope Corporation Limited
New Hope Corporation Limited
New Hope Corporation Limited
2014
$
2013
$
5,244,738
127,342
147,984
176,315
683,975
6,380,354
5,150,919
31,055
140,756
-
1,259,370
6,582,100
Detailed remuneration disclosures can be found in sections (a) to (j) of the remuneration report on pages 14 to 22.
66
67
67
66
67
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
30. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)
d. Other transactions of key management personnel
Mr R.D. Millner and Mr P.R. Robinson are Directors of New Hope Corporation Limited and Pitt Capital Partners Limited. Pitt Capital
Partners Limited acted as financial advisor to the Group for various corporate transactions during the 2014 and 2013 financial years. All
transactions are at normal commercial terms.
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:
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 normal commercial terms.
Aggregate amounts of each of the above types of transactions with key management personnel were as follows:
a. 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
Legal advice
Financial advice
e. Loans to key management personnel
No loans have been made available to the key management personnel of the Group.
2014
$
1,013,354
409,627
2013
$
900,885
579,871
31. RELATED PARTY TRANSACTIONS
a. Parent entities
The parent entity within the Group is New Hope Corporation Limited. The ultimate Australian parent entity and controlling entity is
Washington H. Soul Pattinson and Company Limited (WHSP) which at 31 July 2014 owned 59.66% (2013 - 59.68%) 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)
2014
$
2013
$
79,311,427
153,665,890
d.
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 (2013 - $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.
b. Other services
PricewaterhouseCoopers Australian firm
Transaction tax and advisory services
General advisory services
Tax compliance services
Tax compliance services - MRRT
Tax compliance services - PRRT
Research and development compliance services
Total remuneration for other services
Total auditors' remuneration
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 associates
Impairment costs of available for sale assets
Impairment costs of oil producing assets
Net foreign exchange (gain)/loss
Fair value adjustment on acquisition of subsidiary
Net profit on sale of held for sale assets
Net profit on sale of non-current assets
Investment interest income
Income taxes paid
Income tax expense in accounts
Share of 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
68
68
69
2014
$
2013
$
448,066
355,629
1,045
-
449,111
355,629
435,664
56,920
94,907
1,500
43,354
223,534
855,879
421,090
63,397
160,752
192,670
43,795
270,348
1,152,052
1,304,990
1,507,681
2014
$000
2013
$000
58,449
59,835
684
-
-
4,365
1,157
-
(17,382)
(102)
(40,905)
(29,935)
12,598
-
10,857
(6,143)
1,762
200
2,154
4,244
2,474
64,312
74,128
48,498
1,259
13,286
38,091
-
(2,895)
(4,109)
-
(219)
(60,594)
(42,345)
47,856
386
(33,739)
750
(3,385)
1,406
974
16,156
(2,866)
92,638
69
69
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
34. EARNINGS PER SHARE
a.
b.
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
c. Reconciliation of adjusted profits
Profit from continuing operations attributable to the ordinary equity
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)
Earnings per share (cents)
2013
2014
7.0
7.0
8.9
8.9
Basic and Diluted
2014
$000
2013
$000
58,450
74,129
Consolidated
2014
2013
830,836,913
244,641
831,081,554
830,551,140
326,839
830,877,979
e.
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.
35. DERIVATIVE FINANCIAL INSTRUMENTS
NON-CURRENT ASSETS
Forward foreign exchange contracts
CURRENT LIABILITIES
Forward foreign exchange contracts
NON-CURRENT LIABILITIES
Forward foreign exchange contracts
2014
$000
2013
$000
2,447
-
3,255
29,721
-
11,707
a.
Instruments used by the Group
New Hope Corporation Limited and certain 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 represented a liability with a fair value of $808,000 (2013 - liability with a fair value of $41,428,000).
At balance date the details of outstanding contracts are:
35. DERIVATIVE FINANCIAL INSTRUMENTS (continued)
b. Credit risk exposures
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 $182,170,000 (2013 - $427,815,000) was receivable (AUD equivalents).
36. SHARE-BASED PAYMENTS
Rights are granted under the New Hope Corporation Limited 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.
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 $684,000 (2013 -
$1,259,000).
Rights
Set out below are the summaries of rights granted under the plan:
As at 1 August
Granted during the year
Exercised during the year
As at 31 July
2014
2013
Average price
per share
Number of
rights
Average price
per share
Number of
rights
$4.774
-
$4.806
$4.694
518,202
-
(369,760)
148,442
$5.587
$4.030
$5.489
$4.774
389,751
280,269
(151,818)
518,202
The weighted average share price at the date of exercise of rights vested during the 2014 year was $3.56 (2013 - $4.02).
Share rights outstanding at the end of the year have the following expiry date and fair value at grant date:
Grant Date
27 Oct 2011
27 Oct 2011
17 Dec 2011
17 Dec 2011
17 Dec 2011
17 Dec 2012
17 Dec 2012
17 Dec 2012
17 Dec 2012
15 Nov 2013
15 Nov 2013
15 Nov 2013
Total
Vesting Date
Value of Right
at Grant Date
Share rights
2014
2013
1 Aug 2013
1 Aug 2014
1 Aug 2013
1 Aug 2014
1 Aug 2015
1 Aug 2013
1 Aug 2014
1 Aug 2015
1 Aug 2016
1 Dec 2013
1 Jan 2014
1 Jan 2015
$5.170
$5.170
$6.020
$6.020
$6.020
$4.030
$4.030
$4.030
$4.030
$4.030
$4.030
$4.030
-
15,060
-
20,447
20,447
-
30,830
30,830
30,828
-
-
-
148,442
64,059
39,458
56,984
56,985
20,447
30,830
30,830
30,830
30,828
52,317
52,317
52,317
518,202
Maturity
0 to 6 months
6 to 12 months
1 to 2 years
2 to 5 years
70
Buy Australian Dollars
Average exchange rate
Weighted average remaining contractual life of rights outstanding at end of period
0.8 years
0.9 years
2014
$000
93,974
42,242
45,954
-
182,170
2013
$000
129,884
121,122
130,854
45,955
427,815
2014
2013
0.95771
0.92325
0.84867
-
1.00090
0.98250
0.94760
0.84870
70
71
71
71
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
37. INVESTMENTS IN ASSOCIATES
a. Movements in carrying amounts
Carrying amount at the beginning of the financial year
Additions
Share of loss after income tax
Impairment
Transfer due to business combination
Carrying amount at the end of the financial year
38. INTERESTS IN JOINT VENTURES
a. Lenton Joint Venture
2014
$000
2013
$000
-
-
-
-
-
-
32,530
49,615
(386)
(13,286)
(68,473)
-
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. Yamala Joint Venture
In March 2007, a subsidiary of New Hope 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 $5.80 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 $5.80 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 2014, the
concept study for the establishment of a mine within the tenement had been completed along with the funding of the $5.80 million farm-in
and the external company had earned a 30% interest in the project. The external company is currently reviewing the option to acquire a
further 19% interest in the joint venture. At 31 July 2014, $nil is carried as exploration expenditure in relation to EPC927.
c. Utopia Joint Venture
A subsidiary of New Hope Corporation Limited has a 60% interest in the Utopia Joint Venture. The principal activity of this joint operation is
to extract oil from PL214 of which the subsidiary is entitled to 60% of the output. The joint venture also conducts oil exploration on ATP560
of which the subsidiary is entitled to 60% of the output. The Group’s interests in the joint operation are included in the balance sheet in
accordance with the accounting policy described in note 1(b).
d. Cuisinier Joint Venture
During the year, a subsidiary of New Hope Corporation Limited entered into a joint operation in relation to the Cuisinier project. The
principal activity of this joint operation is to extract oil from PL303. This project also includes the Barta project which conducts oil exploration
on ATP752 Barta and the Wompi project which conducts oil exploration on ATP752 Wompi. The subsidiary has a 15% participating interest
in the Cuisinier and Barta projects and 17.5% in the Wompi project and is entitled to 15% and 17.5% of the output respectively. The Group’s
interests in the joint operation are included in the balance sheet in accordance with the accounting policy described in note 1(b).
39. 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 payment
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
2014
$000
2013
$000
2,097,438
1,988,175
55,820
51,848
2,153,258
2,040,023
718,273
520,899
989
938
719,262
521,837
95,119
93,342
549
1,338,328
1,433,996
1,642
1,423,202
1,518,186
48,054
33,078
48,054
33,078
39,054
39,054
38,230
38,230
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(ab).
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:
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.
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.
2014
$000
2013
$000
14,832
14,822
d. Contractual commitments for the acquisition of property, plant and equipment
As at 31 July 2014, the parent entity had contractual commitments for the acquisition of property, plant or equipment totalling $3,000 (2013 -
$95,000). These commitments are not recognised as liabilities as the relevant assets have not yet been received.
72
73
73
72
73
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
New Hope Corporation Limited and Controlled Entities
New Hope Corporation Limited and Controlled Entities
Notes to the financial statements
for the year ended 31st July 2014
Notes to the financial statements
for the year ended 31st July 2014
40. 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.
a.
Consolidated statement of comprehensive income
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 2014 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
Items to be reclassified to profit and loss
Changes in the fair value of cash flow hedges, net of tax
Transfer to profit and loss for cash flow hedges, net of tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
2014
$000
2013
$000
548,695
114
548,809
(340,235)
(134,743)
(12,208)
-
61,623
(19,338)
42,285
610,852
-
610,852
(282,870)
(139,314)
(13,287)
-
175,381
(52,015)
123,366
14,477
13,958
28,435
70,720
(39,824)
(10,431)
(50,255)
73,111
40. DEED OF CROSS GUARANTEE (continued)
b.
Consolidated balance sheet
Set out below is a consolidated balance sheet as at 31 July 2014 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.
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Held to maturity investments
Other
Total current assets
Non-current assets
Receivables
Other financial assets
Derivative financial instruments
Property, plant and equipment
Exploration and evaluation assets
Deferred tax assets
Intangible assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Current tax liabilities
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Provisions
Derivative financial instruments
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2014
$000
2013
$000
50,244
355,031
56,393
1,066,922
62
1,528,652
2,576
248,183
2,447
381,994
40,540
32,351
8,204
716,295
2,244,947
108,169
40,641
26,733
3,255
178,798
44,916
-
44,916
223,714
2,021,233
91,023
36,453
1,893,757
2,021,233
18,746
331,158
58,604
1,228,995
106
1,637,609
2,775
248,183
-
405,809
29,295
38,752
9,411
734,225
2,371,834
123,102
54,258
28,434
29,721
235,515
41,853
11,707
53,560
289,075
2,082,759
89,246
9,112
1,984,401
2,082,759
41. EVENTS OCCURRING AFTER THE REPORTING PERIOD
On 9 May 2014, an acquisition of Dart Energy Limited was initiated by IGas Energy Plc via an Australian Scheme of Arrangement on a share
exchange basis. Prior to 31 July 2014, FIRB approval had been obtained and the scheme booklet released. Subsequent to 31 July 2014, a
shareholder vote of IGas Energy Plc shareholders and Dart Energy Limited shareholders has been undertaken in respect of approving this
Scheme of Arrangement at which the relevant voting thresholds were met for each. The disposal of the shares held by the Group in Dart
Energy Limited remains subject to final administrative approvals of the Scheme of Arrangement.
74
75
75
74
75
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW HOPE CORPORATION LIMITED
New Hope Corporation Limited and Controlled Entities
Directors Declaration
In the Directors' opinion:
a.
the financial statements and notes set out on pages 31 to 75 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 2014 and of their performance, for the
financial year ended on that date; and
b.
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
S.J. Palmer
Director
Sydney
22 September 2014
76
76
77
77
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NEW HOPE CORPORATION LIMITED
SHAREHOLDER INFORMATION AS AT 19 SEPTEMBER 2014
SHAREHOLDER INFORMATION
AS AT 19 SEPTEMBER 2014
New Hope Corporation Limited
Shareholder Information as at 19 September 2014
As at 19 September 2014 there were 8,566 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
2,140
3,264
1,933
1,142
87
8,566
Fully paid
ordinary
shares
1,103,103
9,611,702
13,703,590
27,742,634
778,838,420
830,999,449
Number of
rights holders
Ordinary
rights
-
-
-
-
3
3
-
-
-
82,105
-
82,105
Holding less than a marketable parcel
502
36,982
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 19 September 2014
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
7 BKI Investment Company Limited
8 HSBC Custody Nominees (Australia) Limited
9 Ubs Nominees Pty Ltd
10 Citicorp Nominees Pty Limited
11 National Nominees Limited
12 Taiheiyo Kouhatsu Inc
13 BNP Paribas Noms Pty Ltd (Drp)
14 BNP Paribas Nominees Pty Ltd (Agency Lending Drp A/C)
15 Robert Charles Neale
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 Ltd (Piselect A/C)
19 Milton Corporation Limited
20 Dixson Trust Pty Limited
Number
of shares
495,696,418
91,490,000
76,051,988
495,696,418
93,240,000
31,695,082
23,440,585
17,844,960
15,500,000
14,810,452
14,798,194
13,534,998
8,564,891
8,329,608
4,054,000
2,560,299
2,538,367
2,185,659
2,128,650
2,009,197
1,587,330
1,290,107
1,225,596
757,034,393
%
59.65%
11.01%
9.15%
59.65%
11.22%
3.81%
2.82%
2.15%
1.87%
1.78%
1.78%
1.63%
1.03%
1.00%
0.49%
0.31%
0.31%
0.26%
0.26%
0.24%
0.19%
0.16%
0.15%
91.11%
78
79
79
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
82,105
3
ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014ANNUAL REPORT & FINANCIAL STATEMENTS 2014