National HealthCare Corporation Annual Report 2017

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FY2017 Annual Report · National HealthCare Corporation

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2017
ANNUAL REPORT

CONTENTS

Key Highlights

Chairman’s Review

Operations Overview

Operating and Financial Review

Operations Coal

Operations Oil

Operations Pastoral

Exploration and Development Projects

New Hope Group Outlook

Sustainability Report

Financial Report

Directors’ Declaration

Independent Auditor’s Report to the Members
of New Hope Corporation Limited

Shareholder Information

104

NEW HOPE CORPORATION LIMITED AND CONTROLLED ENTITIES
CORPORATE DIRECTORY

DIRECTORS
Robert D. Millner
Chairman of Directors

Todd J. Barlow
Non Executive Director

William H. Grant
Non Executive Director

Thomas C. Millner
Non Executive Director

Sue J. Palmer
Non Executive Director

Ian M. Williams
Non Executive Director

MANAGING DIRECTOR
Shane O. Stephan

COMPANY SECRETARY
Janelle S. Moody

AUDITORS
Deloitte Touche Tohmatsu
Level 25, Riverside Centre
123 Eagle Street
BRISBANE QLD 4000

PRINCIPAL
ADMINISTRATION
& REGISTERED OFFICE
3/22 Magnolia Drive
BROOKWATER QLD 4300
Telephone: (07) 3418 0500
Facsimile: (07) 3418 0355

SHARE REGISTER
Computershare Investor
Services Pty Limited
117 Victoria Street
WEST END QLD 4101
Telephone: 1300 552 270
www.computershare.com

WEBSITE ADDRESS
www.newhopegroup.com.au

ASX Code: NHC

KEY
HIGHLIGHTS

SALEABLE COAL

TOTAL PRODUCTION

8.6Mt

▲30%

REVENUE
FROM OPERATIONS

$844.1M

▲59%

NPAT
(BEFORE
NON REGULAR ITEMS)

$128.7M

TOTAL COAL SALES

8.5Mt

▲23%

TOTAL DIVIDENDS

10 cents

▲150%

EBITDA

$283.1M

▲2,459%

▲248%

New Hope Corporation Limited and Controlled Entities | 2017 Annual Report

CHAIRMAN’S
REVIEW

Dear Shareholders,

The Company achieved significant improvements in financial
and safety performance during the past year. The timing
of the acquisition of the Company’s 40% interest in the
Bengalla Joint Venture on 1 March 2016, a few months
prior to the start of the recent improvement in coal prices,
has once again demonstrated your Company’s ability to
take an astute countercyclical approach to coal industry
investment. A disciplined approach to investing is a hallmark
of your Company.

Demand is expected to remain firm for the high quality
coal that New Hope Corporation Limited (New Hope, Company,
Corporation or parent entity) produces for our customer base
in Asia. Australia is not unique in having to solve the energy
trilemma of balancing environmental performance, energy
security and affordability. High Efficiency Low Emission (HELE)
coal fuelled power stations are being built throughout Asia
and other parts of the world as part of their long term energy
solution. Australia needs to now get on with developing
and implementing its national energy policy. It will be critical
for the future competitiveness of our nation and the jobs
that rely upon it that we do not sacrifice our historical
advantage of affordable energy for industry.

NET PROFIT
AFTER TAX

(BEFORE NON
REGULAR ITEMS)

$128.7M

REVENUE FROM
OPERATIONS

$844.1M

New Hope’s overall production totalled 8.6 million tonnes of saleable coal during FY2017,
an increase of 30% on FY2016’s total production of 6.6 million tonnes. Total coal sales
for FY2017 were 8.5 million tonnes, well above the 6.9 million tonnes sold in FY2016.
Directors approved a final dividend of 6 cents per share taking total dividends per share
for the year to 10 cents, up 150% on the four cents paid in 2016.

Financial Performance

New Hope has reported a net profit after tax (NPAT) and before non regular items
of $128.7 million for the year ended 31 July 2017, which is up substantially on the
2016 result of $5.0 million. After non regular items the Company reported a NPAT
of $140.6 million for the year ended 31 July 2017.

Revenue from operations totalled $844.1 million up 59% from the 2016 financial year.
Cash generation remained strong with Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA) of $283.1 million, up 248% on the prior year. The Company
produced a positive cash operating surplus of $313.0 million (before interest and tax).

Total non regular items after tax resulted in a net increase to the group’s after tax profit
of $11.9 million. The recovery of prior period below rail access charges totalled a positive
$13.9 million post tax whilst an impairment of available for sale shares in IGas had
a negative impact of $2.0 million post tax.

EBITDA

$283.1M

Bridgeport Energy Limited (Bridgeport) oil production increased 61% on FY2016
to 308,959 barrels (bbl) due principally due to the acquisition of Kenmore Bodalla
and associated fields. Bridgeport revenues were $18.7 million up 78% on last year
and an EBITDA of $1.1 million was realised on an average oil sales prices of $65/bbl.

Highlights

Concurrently with our much improved financial performance it is pleasing to report
a significant improvement in the overall safety performance of New Hope’s operations
with the New Acland Mine total recordable injury frequency rate (TRIFR) of 3 being
down from 11 in 2016 whilst at West Moreton operations the TRIFR of 4 for the year

GROUP
TRIFR
5

(down from 15 in 2016)

Industry average is 15.

was a substantial improvement on the rate of 35 reported in 2016. Queensland Bulk
Handling Pty Ltd (QBH), the operator of the coal terminal at the Port of Brisbane (POB),
achieved a safety milestone of 5 years Lost Time Injury (LTI) free during the year. These
improvements in safety performance statistics vindicate the investment made by the
Board and management in safety programs and systems including our behavioural
safety based program, “I Safe We Safe”. The Company remains committed to the ongoing
investment in programs which are focused on ensuring the reliability of our critical safety
controls and education programs which assist our valued employees in making safe and
healthy decisions in all aspects of their lives.

The Company has continued to progress applications necessary to secure approvals for
the New Acland Stage 3 project (NAC03). Approval was obtained during the year from the
Federal Government under the Environmental Protection and Biodiversity Conservation
Act 1999. During May 2017 the Queensland Land Court recommended that the Mining
Leases (ML) and associated Environmental Authority (EA) amendment for NAC03 not
be granted. The Company has decided to commence Judicial Review proceedings of this
decision in the Queensland Supreme Court. The Queensland Minister for Natural Resources
and Mines and the Chief Executive of the Queensland Department of the Environment
and Heritage Protection (DEHP) are the final decision makers. These approvals and an
Associated Water Licence (AWL) will be required for the project to proceed. New Hope
remains committed to delivering the NAC03 project and will actively progress this project
through the final stages of approval. We look forward to the Queensland Government’s
timely and favourable decision regarding the future of this operation.

The Colton project received its ML during FY2017 and recently the New Lenton Joint
Venture announced it had reached agreement to acquire the infrastructure of the adjacent
Burton Mine. Burton is immediately to the south of New Lenton and access to this
infrastructure will facilitate New Lenton’s development. Development options for these
two projects will be evaluated over the course of the 2018 financial year. The Company
will also progress the pre‑feasibility studies into the development of its significant
resource holdings in the North Surat.

Conclusion

Unlike many of our competitors, New Hope is committed to the supply of high quality
thermal coal to our valued customers in the growing energy market of Asia over the long
term. The results achieved this past year validate the decisions taken during the recent
cyclical price downturn to maintain our globally competitive corporate capabilities in
resource and project development. The ownership of the Australian thermal coal industry
is becoming more concentrated and this fact is being noticed by those responsible for
the sustainable supply of reliable and cost effective base load power into Asia. New Hope,
as an independent majority‑Australian owned producer of high quality coal, has the balance
sheet, coal resource, and the business system capabilities to take advantage of these
growing markets.

I would like 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 producing an excellent financial and operational result and congratulate them on their
success. Finally I would like to thank you, the shareholders, for your continued support.

R D Millner

Chairman

New Hope Corporation Limited and Controlled Entities | SustainabilityNew Hope Corporation Limited and Controlled Entities | 2017 Annual Report34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWOPERATIONS
OVERVIEW

QLD

Churchyard Creek

Yamala

New Lenton
Bee Creek

Colton

North Surat

New Acland

C A E

Brisbane

West Moreton

Ashford

NSW

Bengalla

NEW LENTON

EXPLORATION &
DEVELOPMENT

LOCATION: Bowen Basin, Queensland
PRODUCT: Coking/PCI (pulverised coal injection)/thermal coal
MINING METHOD: Open cut
DEVELOPMENT STATUS: Environmental Impact Statement (EIS)
commenced

COLTON

EXPLORATION &
DEVELOPMENT

LOCATION: Near Maryborough, Queensland
PRODUCT: Coking coal
MINING METHOD: Open cut
DEVELOPMENT STATUS: ML applications approved 3 May 2017

T
A
R
U
S
H
T
R
O
N

ELIMATTA

EXPLORATION &
DEVELOPMENT

COLLINGWOOD

EXPLORATION &
DEVELOPMENT

TAROOM

WOORI

EXPLORATION &
DEVELOPMENT

The North Surat Project Pre‑Feasibility Study progressed to
advance the opportunities identified in the concept study.
The Elimatta ML application is nearing completion with the
final statutory requirements in progress.

QUEENSLAND
BULK HANDLING

PORT MANAGEMENT

QBH is a separate venture located at the POB. It is a multi‑user facility

with the capacity to export 10 million tonnes per annum (mtpa) of coal

and is Brisbane’s leading coal export terminal. It has an international

reputation as one of the nation’s most reliable, efficient and quality

OPERATIONS COAL

OPERATIONS AGRICULTURE

OPERATIONS PORT MANAGEMENT

EXPLORATION & DEVELOPMENT

assured facilities.

NEW ACLAND

COAL

COAL
PRODUCTION

4.6Mt

LOCATION: North‑west of Oakey, Queensland
OPERATIONS: 2002 to present
PRODUCT: Thermal coal
MINING METHOD: Open cut, multi‑thin‑seam mining

N
O
T
E
R
O
M
T
S
E
W

JEEBROPILLY

COAL

COAL
PRODUCTION

0.6Mt

LOCATION: Amberley, Queensland
OPERATIONS: 1982 to present
PRODUCT: Thermal coal
MINING METHOD: Open cut, multi‑thin‑seam mining

NEW OAKLEIGH

REHABILITATION

LOCATION: Rosewood, Queensland
OPERATIONS: 1992 to 2013
PRODUCT: Thermal coal
CURRENT ACTIVITIES: Rehabilitation
New Oakleigh West site is completed and under maintenance regime until

relinquishment of MLs.

CHUWAR

REHABILITATION

Major rehabilitation activities of the Chuwar site was completed in 2017.
The area will now be under a maintenance regime until the MLs are able
to be relinquished.

BENGALLA

COAL

COAL
PRODUCTION

3.4Mt

LOCATION: Sydney basin, New South Wales
OPERATIONS: 1996 to 2039
PRODUCT: Thermal coal
MINING METHOD: Open cut
Bengalla Mine is a joint venture (Wesfarmers 40%, New Hope 40%,

Mitsui 10% and Taipower 10%).

New Hope Corporation Limited and Controlled Entities | 2017 Annual Report

Compared to the previous corresponding period, the 2017 full year result benefited from:

•

Increased production and sales due to the inclusion of Bengalla for the full year;

Increased coal prices in both USD and AUD terms; and

• A non regular recovery of prior period below rail access charges.

NPAT
(BEFORE NON
REGULAR ITEMS)

$128.7M

▲ 2,459% from 2016

NPAT
(AFTER NON
REGULAR ITEMS)

$140.6M

▲ 362% from 2016

FROM COAL MINING,
MARKETING AND
LOGISTIC OPERATIONS

$133.1M

FROM
OIL OPERATIONS

– $4.4M

FROM COAL MINING,
MARKETING AND
LOGISTIC OPERATIONS

$145.0M

FROM
OIL OPERATIONS

– $4.4M

During the year the Company generated a strong cash operating surplus of $313.0 million
(before interest and tax).

Before non regular items, basic earnings for 2017 were 15.4 cents per share, compared
to 0.6 cents per share in 2016. After non regular items, basic earnings per share were
16.9 cents per share for 2017 against losses of 6.5 cents in 2016.

BASIC EARNINGS
PER SHARE
(BEFORE NON
REGULAR ITEMS)

15.4 cents

BASIC EARNINGS
PER SHARE
(AFTER NON
REGULAR ITEMS)

16.9 cents

Directors have declared a final dividend of 6.0 cents per share (2016 – 2.0 cents per
share). This dividend is fully franked and payable on 7 November 2017 to shareholders
registered as at 24 October 2017.

New Hope Corporation Limited and Controlled Entities | 2017 Annual Report

NEW ACLAND

COAL
PRODUCTION

4.6Mt

NEW ACLAND

TRIFR
3

(down from 11 in 2016)

Coal production for the year was 8.6 million tonnes compared to 6.6 million tonnes produced in
2016. Bengalla contributed 3.4 million tonnes during the year and the Queensland mining operations
produced 5.2 million tonnes which was comparable to 2016 production.

Coal sales for 2017 totalled 8.5 million tonnes (including 3.4 million tonnes from Bengalla) which
was well above the 6.9 million tonnes sold in 2016.

NEW ACLAND MINE

New Acland Mine produced 4.6 million tonnes of product coal in 2017. This was consistent with 2016
production. Following damage to the QBH ship loader caused in November 2016 by a severe storm
event, high coal stock levels were built up throughout the logistics chain. These high stock levels have
resulted in production having to be curtailed at times to ensure that approved stock limits were not
breached.

New Acland continued to experience improved safety performance achieving a 12 month TRIFR of 3,
down from 11 in 2016. This places New Acland Mine amongst the best of its peers and compares
to an industry average TRIFR of 15.

New Acland was a finalist in three categories of the Darling Downs regional finals of the annual
Queensland Training Awards. New Acland and Jeebropilly Mine were joint winners of the Health
Program Award at the Queensland Mining Health and Safety Conference, with both sites also
nominated as finalists for the Safety Innovation Award.

New Acland’s key achievements in 2017 include:

•

The installation and commissioning of a Fleet Monitoring System;

Lower seams and additional blocks of economic coal added to the mine plan which extends
the Stage 2 mine life;

Identification of a number of other resource areas that, if economic, may further prolong Stage 2
operations. These areas will be fully evaluated during the 2018 financial year;

Completion of the installation and commencement of the operation of a natural gas fueled rear
dump truck and refueling facility in partnership with the equipment manufacturer Mine Energy
Solutions. This project is the first operational trial of this technology in a mining environment;

Completion of the second phase of the sound attenuation project on major mobile plant to reduce
noise output;

Installation of a pilot scale Reflux Classifier in the coal handling preparation plant which has
the potential to increase coal recovery in the fines circuit of the plant;

Trialling X‑ray sorting technology to separate waste from coal;

Continued community engagement and the allocation of funds to local community projects; and

• Hosting numerous site tours for community, business and industry groups, as well as
representatives from educational, environmental and agricultural organisations.

NEW ACLAND STAGE 3 DEVELOPMENT
The project has been successfully progressed in a number of areas during the last 12 months. Notably
the Company has received Environment Protection and Biodiversity Conservation Act 1999 approvals
from the Federal Government. The Company has continued to progress the applications for a ML,
EA amendment and AWL and provided further information to relevant parties in support of these
approval processes.

On the 31st May the Queensland Land Court handed down its findings in respect to the Company’s
Mining Lease Application for NAC03, recommending that the EA and MLs for NAC03 not be granted.
After careful consideration of the recommendation the Company has initiated a Judicial Review of
the findings. It is anticipated the Judicial Review will be heard in the Supreme Court during the first
of quarter 2018. Further detail regarding the NAC03 approval process is included in note 10 to the
Financial Statements.

WEST MORETON

COAL
PRODUCTION

0.6Mt

WEST MORETON

TRIFR
4

(down from 35 in 2016)

WEST MORETON OPERATIONS

West Moreton operations (comprising Jeebropilly Mine and rehabilitation sites at New Oakleigh and
Chuwar), produced 0.6 million tonnes of product coal in 2017 which was in line with 2016 production.

West Moreton’s key achievements in 2017 include:

•

A significant reduction in total recordable incidents as a result of the training and development,
and health and wellness programs;

Full year TRIFR of 4 compared to 35 in 2016;

Improvements in coal markets during the year which have enabled additional reserves to be
added to the Jeebropilly mine plan. Coal production at Jeebropilly is now expected to continue
until 2019; and

Completion of major rehabilitation activities of the New Oakleigh West and Chuwar sites. These
areas will now be under a maintenance regime until the mining leases are able to be relinquished.

QBH

EXPORTED
COAL

6.9Mt

BENGALLA

COAL
PRODUCTION

3.4Mt

BENGALLA

TRIFR
5

QUEENSLAND BULK HANDLING

QBH, New Hope Corporation’s 100% owned coal terminal at the POB, exported 6.9 million tonnes
of coal on 88 vessels. This result was similar to last year. QBH remains essentially a demurrage
free port.

QBH’s key achievements in 2017 include:

•

5 years LTI free safety milestone;

Continuation of engineering and other studies required for upgrades of existing infrastructure
and to allow for future expansion potential;

Continuation of business improvement programs aimed at reducing costs and improving
operational efficiencies with several key stages completed;

Renegotiation of leases with the POB to ensure QBH has long term lease certainty and the ability
to expand its operations should market conditions demand; and

• During November 2016, QBH suffered damage to the shiploader and stacker following a severe
weather event. Both of these units are now operating at their designed capacity and several
preventative actions have been developed to reduce the likelihood of similar outcomes from
future severe weather events.

BENGALLA JOINT VENTURE

Bengalla Mine (100% basis) produced 8.5 million tonnes of coal in 2017. This was the first full year
of production since New Hope acquired its 40% interest in March 2016. The Bengalla Joint Venture
is operated by Bengalla Mining Company Pty Ltd (BMC).

Bengalla’s key achievements in 2017 include:

•

A TRIFR of 5;

Excavation of over 50 million bank cubic meters of material;

Instigation of a productivity improvement program with significant gains made in a number
of operational areas;

Commissioning of an additional digging unit to meet increased overburden requirements; and

Completion of the Dry Creek diversion project.

In April 2017, BMC commenced proceedings in the Land and Environment Court of New South Wales
against MACH Energy Australia Pty Ltd (MACH). BMC is seeking an order from the court restraining
MACH from carrying out any further development for the Mount Pleasant Project prior to MACH
satisfying the terms of its Development Consent. A date for the hearing has not yet been set
as at 27 September 2017.

BRIDGEPORT

OIL PRODUCTION

308,959

bbls

SALES REVENUE

$18.7M

▲ 78% from 2016

EBITDA

$1.1M

BRIDGEPORT

Annual oil production totalled 308,959 barrels (bbls), a 61% increase on the previous full year
of 191,993 bbls, principally due to the October 2016 acquisition of Kenmore Bodalla and associated
fields but also due to improved production performance at other principal assets. In five years
Bridgeport has become the fourth largest producer in the Cooper Basin.

Sales revenue for the year was $18.7 million against $10.5 million for the prior year, an improvement
of 78%. Bridgeport posted an EBITDA of $1.1 million. Realised oil sales prices averaged $65/bbl
against the previous year of $57/bbl.

Key activities during 2017 included:

•

Establishment of a production hub at the Kenmore oil field and progression of non‑hub assets
to not normally manned operations;

Four Cuisinier non‑operated wells completed and stimulated adding net 70 barrels of oil per day
(bopd) to production;

• Drilling and casing of four development wells increasing production at the Utopia field by 100 bopd;

•

26 workovers across all producing assets which increased net production by 170 bopd;

Progression of the technical feasibility of an enhanced oil recovery project for the Moonie field
in the Surat Basin.

Bridgeport now manages over 140 wells across its ten operated production assets and is one of the
most active operators in the Cooper Basin producing approximately 1,000 bopd.

BRIDGEPORT ENERGY GROUP PRODUCTION AND REVENUE

)
s
l
b
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(

N
O
I
T
C
U
D
O
R
P

350,000

300,000

250,000

200,000

150,000

100,000

50,000

20,000

15,000

10,000

5,000

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0
0
0
’
$
A
(
E
U
N
E
V
E
R

2010

2011

2012

2013

2014

2015

2016

2017

Key

PRODUCTION

REVENUE

OPERATIONS
PASTORAL

PASTORAL OPERATIONS
Acland Pastoral Company Pty Ltd (Acland Pastoral) continued to grow a breeding herd throughout the
year with sales of 1,088 head and purchases of 666 head resulting in total herd size of 2,932 at year
end. The cropping operation continued with silage production to support the breeding operation.

Another 100 hectares (ha) of rehabilitation was fenced from the New Acland Mine ML and handed
to pastoral operations for production and grazing activities. A further 15 kilometres of fencing was
completed through the year as part of the water and wire capital project. This combined with the
commencement of a long term weed and pest control program will boost grazing capacity for the
Company with over 456ha of box thorn and pear sprayed and mulched during the year. Consolidation
of ‘leases’ within the Acland Pastoral holdings will see an increase in land availability in future
financial years.

The cattle grazing trial continued with a review of the overall strategy to be completed at the end
of the 2018 financial year.

TOTAL
COAL RESOURCES

2,477Mt

During the year a review of all coal and mineral tenures was undertaken to ensure the portfolio
remained aligned with the corporate strategy. This resulted in some relinquishments of tenure where
there was no indication of economically viable resources or there were no foreseeable opportunities
to develop the projects. All of the relinquished tenements were carried at nil carrying value. An active
exploration program utilising the Company’s own drill rigs was advanced during the past year.
Exploration activities during 2017 focused on resource definition in and around the New Acland Mine
and NACO3 area.

During the year 21,033 meters and 249 holes were drilled. This drilling focused on finalisation of the
water bore monitoring program at New Acland Mine and better delineation of the coal structure and
quality in the current and future mining areas.

The exploration team incurred no recordable injuries during the year and is currently over three years
LTI free.

The current group Resources and Reserves are tabled below.

DEPOSIT

STATUS

INFERRED

INDICATED

MEASURED

2017 TOTAL

2016 TOTAL

COAL RESOURCES (MILLION TONNES)
(COAL RESOURCES ARE INCLUSIVE OF THE RESERVES REPORTED BELOW)

New Acland 1,2 Mine
Bengalla 1,3
Lenton 1,4
Yamala 1,5

Mine

Exploration

Colton
Elimatta 1
Collingwood 1

Taroom

Woori
Ashford 6

Total

Exploration

Notes on resources:

208

187

126

–

852

189

104

105

139

149

–

790

303

‑

108

158

–

835

515

187

380

240

286

276

433

–

424

186

380

240

286

276

433

2,477

2,398

1 Denotes the Resource estimations that have been reviewed against and follow the 2012 JORC Code. All other

Resource estimations will be reviewed against and then follow the 2012 JORC Code in due course.

2 Resources have mainly increased due to substantial drilling across the tenures combined with a reduction in basalt

thickness along the basalt edges.

3 Figures shown are 100% of total resources. New Hope share is 40%. The Resource is exclusive of area covered by

Reserves.

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

5 Figures shown are 100% of total resources. New Hope share is 70%.

6 Figures shown are 100% of total resources. New Hope share is 50%

JORC DECLARATION – COAL RESOURCES
The estimates of coal resources herein have been prepared in accordance with the guidelines of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserve – 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 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 relevant JORC Code. Mr Tyrrell consents to the inclusion in this report of the matter
based on this information in the form and context in which it appears.

COAL RESERVES (MILLION TONNES)

RECOVERABLE RESERVES

MARKETABLE RESERVES5

DEPOSIT

STATUS

PROBABLE

PROVED

TOTAL
2017

TOTAL
2016 PROBABLE

PROVED

TOTAL
2017

TOTAL
COAL RESERVES

804Mt

New Acland 1 Mine
Lenton 2

Exploration

Elimatta
Colton 3
Bengalla 4

Total

Exploration

Mine

Notes on Reserves:

125

265

106

283

–

137

521

390

125

243

804

399

125

253

823

143

211

–

223

320

1 37Mt of Recoverable Reserves are located in the Far East deposit which could be influenced by strategic cropping

land legislation.

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

3 The financial model is based off a mine plan that has 85% of the scheduled tonnes at a Resource classification of

Inferred status or lower.

4 Figures shown are 100% of total Reserves. New Hope share is 40%. The JORC report did not identify the Marketable

Reserves.

5 Marketable Reserves are based on modelled washplant yields based off reconciled data for the operating mines, or

simulated product yields for the exploration areas.

na not available.

JORC DECLARATION – COAL RESERVES
The information in this Coal Reserves Statement that relates to coal reserves for New Acland,
Lenton, Colton and Elimatta is based on information compiled by Mr Brett Domrow, who is a Member
of AusIMM. Mr Domrow is a full time employee of the Company. The information in this Coal Reserves
Statement that relates to coal reserves for Bengalla is based on information compiled by Tony
O’Connell, who is a Member of the AusIMM. Mr O’Connell is a consultant working with Optimal Mining
Solutions Pty Ltd. Mr Domrow and Mr O’Connell have sufficient experience which is relevant to the style
of mineralisation and type of deposit under consideration and to the activity which they are undertaking
to qualify as a Competent Person as defined in the relevant ‘Australasian Code for Reporting Exploration
Results, Mineral Resources and Ore Reserves’. Mr Domrow and Mr O’Connell consent to the inclusion
in the report of the matters based on their information in the form and context in which it appears.

Details of the 2017 exploration program and development projects including approvals are as follows:

NEW ACLAND
The drilling program consisted of 28 water monitoring bore holes, 144 open holes and 77 core
holes totalling 21,033 meters. This allowed improved resource definition for the current operation
and the NAC03 project. A gravity survey was completed to assist with basalt delineation and reduce
drilling requirements.

A further relinquishment program of non‑prospective tenure across the Darling Downs and the West
Moreton Regions has commenced.

BENGALLA
Work continued on the geological model. The structural component of the geological model
is complete and the quality component is underway. Calculation of fugitive emissions and JORC
reporting was completed during the year.

COAL EXPLORATION

COLTON
Exploration focused on coal seam correlation across the deposit. On completion of the coal seam
correlation work the area will be remodelled and geostatistics will be undertaken to provide the
necessary data for reporting under the 2012 JORC Code.

A Land Court determination was handed down on 17 November 2016, recommending the grant
of Colton’s MLs. MLs were granted on 30 April 2017, including the associated EA. With all primary
approvals now in place, the Company is now in a position to study options around development
timing and methodology with a view to making a final investment decision.

NORTH SURAT
The North Surat Project Pre‑Feasibility Study progressed to advance the opportunities identified
in the concept study. The Elimatta ML application is nearing completion with the final statutory
requirements in progress.

NEW LENTON
There has been no drilling or on‑site exploration work completed at New Lenton over the last financial
year. Work efforts have involved refining the mine schedule to develop more detailed plans around
the sequencing of the deposit. The focus for New Lenton has been securing an AWL and Federal
Environment Protection and Biodiversity Conservation Act 1999 referral for the existing ML. This has
involved on‑site groundwater monitoring, as well as ecology studies.

Subsequent to year end, the Lenton Joint Venture has entered into a conditional agreement to acquire
certain assets of the Burton Mine in central Queensland which is adjacent to the New Lenton project.
The purchase will include $14 million cash consideration and the assumption of a rehabilitation
liability associated with the assets to be acquired, which include four mining tenements and related
site infrastructure. The transaction is conditional on a number of regulatory and other requirements
with completion expected to take place early 2018.

BEE CREEK
Work was focused on land access ahead of the 2018 2‑D seismic exploration program. This survey
will target the Rangal Coal Measures sub‑cropping on the western edge of the Hail Creek Syncline.

OIL EXPLORATION – COOPER BASIN
Key oil exploration activities for the 2017 year included:

•

Granting Potential Commercial Areas (PCAs) over high‑graded sections of Barcoo and Barcoo
Junction Blocks;

Preparations to lodge a PCA application over retained area of ATP 794 following successful drilling
results at the Obelix‑1 exploration well;

Successful application for three new exploration tenements in the Cooper Basin proximal
to existing production centres; and

Farm‑out of 50% of the PEL 630 tenement in South Australia to Beach Energy on favourable
terms.

PEL 630 – (50% owned – Beach operated) two exploration wells were drilled in the western block
of this tenement following farm‑out of 50% interest in the permit to Beach Energy. Both wells were
dry at the primary Namur target, however, hydrocarbon shows were encountered at the deeper
Birkhead level in the first well. The joint venture is planning to drill two wells targeting natural gas
in the eastern block of PEL 630 in the first half of 2018.

Barcoo and Barcoo Junction (88% and 65%) – one exploration well was drilled in this tenement
south of the Jundah township. The well encountered potentially moveable oil in the lower Birkhead‑
Hutton clastic section and potential wet gas in the shallower Toolebuc Shale section. The well was
extensively logged and then cased and suspended for further evaluation. The core part of the ATP 794
tenement is being progressed to a PCA application to reserve tenure.

NEW HOPE GROUP
OUTLOOK

During the past year the decision to acquire a 40% interest in the Bengalla Coal Mine in the Hunter
Valley of New South Wales was confirmed by the combination of the mine producing close to
expectations and the coal price improving significantly. New Hope’s 40% share of Bengalla resulted
in an additional 3.4 million tonnes of sales for the past year during a period of strong thermal
coal prices. It is anticipated that both mine safety and production performance will continue to
improve over the course of the 2018 financial year as the results of current productivity and safety
improvement initiatives are realised.

Queensland operations at New Acland and Jeebropilly produced 5.2 million tonnes for the year and
this level of production is expected to continue during the current financial year. Sales performance
for the year of 5.1 million tonnes was impacted by logistical delays caused by an incident at the QBH
ship loader which occurred during November/December 2016. Sales during the current financial
year would be expected to match production. Both Queensland operations won industry recognition
through awards for their training and health and wellness programs during the year and safety
performance improved across all operations. The QBH and Exploration teams continued to extend
their record of lost time injury free high productivity operation.

During May 2017 the Queensland Land Court recommended that the ML and associated EA
amendment for NAC03 not be granted. The Company has decided to commence Judicial Review
proceedings of this decision in the Queensland Supreme Court. The Queensland Minister for Natural
Resources and Mines and the Chief Executive of the Queensland DEHP are the final decision makers.
They will consider all relevant matters in making their decisions regarding the grant of the MLs and
EA amendment. These approvals and an AWL will be required for the project to proceed.

New Acland Mine employs several hundred people and many more people are employed by south east
Queensland businesses which rely on New Acland to supply their energy needs. New Hope remains
committed to delivering the NAC03 project and will actively progress this project through the final
stages of approval. We look forward to the Queensland Government’s timely and favourable decision
regarding the future of this operation.

New Hope has a suite of undeveloped open cut coal projects including the New Lenton, Colton
and North Surat projects. Colton received its ML during the past financial year. It is expected that
significant progress will occur during the next financial year in progressing these projects closer
towards production. New Hope continues to evaluate open cut thermal and metallurgical coal
acquisition opportunities as the Company has the people, technical experience and Balance Sheet
capability to expand production under management over the next few years.

Bridgeport increased its production significantly during the past year and achieved a positive EBITDA
during a period of challenging oil prices. Bridgeport has many growth options including the potential
for an enhanced oil recovery project at the Moonie oil field and the potential to explore for gas
within existing tenements.

Newcastle benchmark spot thermal coal prices have recently exceeded US$100 per tonne however
forward markets are indicating that this level of pricing is not likely to be sustained. Actions taken
by the Chinese government in managing domestic coal supply is having a positive impact upon
Chinese domestic thermal coal prices. These prices are influential throughout Asia. Demand for high
quality Australian thermal coal into Asian markets continues to grow. Major thermal coal markets
of Japan, Taiwan, Korea and China continue to build new HELE coal fired power plants as part of their
electricity supply. A new wave of HELE coal fired power plants are planned or under construction
in southern Asia. Indonesia’s ability to continue to grow exports will decline as more of its coal
production is retained for domestic use.

As ownership of the thermal coal industry in Australia continues to be rationalised, end users
are becoming concerned about concentration of supply. New Hope, as an independent Australian
controlled coal producer, has a growth strategy aligned to service the growing needs of electricity
producers in the growth markets of Asia.

New Hope Corporation Limited and Controlled Entities | 2017 Annual Report

At New Hope, we view the importance of conducting
business in a sustainable manner as crucial to
maintaining our social license to operate and ability
to generate strong financial returns. As a partner in the
communities in which we operate we are committed
to investing in local and regional communities,
minimising impacts to the natural environment and
promoting the health and wellbeing of our people.

Aligned with our business strategy and values, we strive to drive sustainability by:

• Reinforcing our Core Values driven approach aligned to Integrity, Respect,

Accountability, Safety, Resilience and Success; across our business, our operations
and through our active procurement decisions;

• Proactively engaging with our communities and traditional owners to identify,

understand and respond to risks and opportunities;

• Delivering sustainable value through innovation across all aspects of our operations;

• Minimising the environmental and social impacts of our operations, managing and

protecting biodiversity and where possible promoting conservation; and

• Supporting our employees to be their healthiest and happiest selves.

Stakeholder Engagement
As a large employer and procurer of services in regional areas across Australia, we
recognise that our activities interplay with a wide, and often diverse range of interests
for surrounding stakeholder groups. Facilitating open and frequent engagement with
our key stakeholder groups continues to be a core part of our business practices. We
work with local landholders, communities, traditional owners, governments, regulators
and other stakeholders to ensure communities are supported, and that concerns are
proactively heard and consistently responded to.

Our focus on stakeholder engagement is further reinforced by requirements imposed
by the Coordinator General in relation to our proposed NAC03 project to develop six
monthly Social Impact Management Reports.

Across each stakeholder group, we have identified modes and frequency of engagement to
ensure continued engagement; and plan to be proactive across these key areas of interest.

Community Investment
Having operated across regional areas of Australia in excess of 65 years, we are acutely
aware of the importance of giving back and strengthening the communities in which we
operate. We understand that while the life of our operations may be finite, we have the
potential to positively impact the surrounding communities both in the short and long term.

Over recent years, we have undergone a process to review our strategy towards
community investment. While we continue to support local community groups and
charities, our strategy has become increasingly focused on aligning our community
partnerships with our core skills and capabilities as a mining company. We recognise that
local communities stand to benefit from learning from our leading Safety, Health and
Wellbeing practices and technical mining expertise.

CASE
STUDY

RENEWED PARTNERSHIP WITH LIFEFLIGHT

We are a longstanding supporter of unlocking opportunities to give back to the
community. Where possible, we invest in supporting the skills, competencies and abilities
of the community.

In partnership with LifeFlight, we sought to improve medical services and outcomes
in rural areas. Our long term partnership with LifeFlight continues to fund emergency
aeromedical services for the Darling Downs community and this year a new two‑year
‘Rural Safety Project’ is delivering rural safety education workshops to local landholders.
Leveraging the teaching and mentorship of our specialists, the project enables the
sustainable transfer of skills in areas such as machinery and equipment safety and basic
medical first response techniques. Future workshops will focus on working safely with
animals and nature; dealing with stress and difficult times; personal and family safety;
vehicle safety and safety for rural youth.

INDUSTRY SKILLS PROGRAM

To ensure we have a local community that is strengthened in the long term with the right
people and right skills, we are continuing to deliver our industry skills program to schools.

In partnership with the Queensland Minerals and Energy Academy, the program assists
students who may be interested in science, technology, engineering and mathematics
(STEM) to break into careers like mechanics, engineering and environmental science. The
program is currently being delivered at Oakey State High School, where our employees
speak to students about their careers, engendering awareness of the variety of STEM
related careers available in their local areas. With a long term focus, the aim is to increase
understanding, awareness and ultimately, to add local talent on our growing projects.

New Hope Corporation Limited and Controlled Entities | 2017 Annual Report

CASE
STUDY

Toowoomba

COMMUNITY INVESTMENT FUND

In addition to New Hope’s Community Sponsorship and Donation Program, the Community
Investment Fund assists community groups and organisations develop positive community
outcomes. Community groups and organisations within the Toowoomba region are eligible
to apply for grants of $10,000 or more under the Fund. Funding decisions are informed by
recommendations from a diverse group of local representatives, including landholders,
health professionals, Indigenous leaders, environmental professionals, educators, local
businesses and farmers.

Commitment to Local Procurement
To support the delivery of our services, we focus on working with local suppliers to
maximise socio‑economic benefits and deliver social returns back to the community.
Our local procurement policies support suppliers close to our operations. New Hope
representatives also engage with prospective local suppliers at community events
and information sessions. We recently hosted an information session at the New Hope
Information Centre in Oakey to share developments and plans across our projects. In this
way, we are able to build a sustainable value chain that has the greatest positive impact.

We have a preferred supplier network which is used directly by the business. It is also
utilised by contractors in sourcing labour and suppliers.

Through contractual arrangements with suppliers of goods and services the Company aims
to ensure that all suppliers adhere to New Hope’s high standards, which are articulated
in New Hope’s Code of Conduct and other key corporate governance policies.

Our People
Our employees are key to our success. We strive to create an environment where
employees have a sense of purpose and the opportunity to reach their aspirations. A key
part of this is engendering a culture that reflects our Core Values of Integrity, Respect,
Accountability, Safety, Resilience and Success; and promoting training and development,
diversity and inclusion, as well as safety and wellbeing.

We recognise that career development is a critical motivator of work. We grow talent
by educating and training employees across different aspects of work. This has involved
providing employees with the opportunity to complete best practice education and
training through a combination of face to face, practical and e‑learning approaches. This
year, we have provided real life scenario training at the mine sites utilising equipment that
employees use every day in their work. This has equipped employees with tangible skills
which can be applied both inside and outside of work.

CASE
STUDY

CASE STUDY: SILVER SPONSOR OF THE QUEENSLAND RESOURCES
COUNCIL WOMEN IN MINING AND RESOURCES QUEENSLAND
MENTORING PROGRAM

As a Silver Sponsor of the Queensland Resources Council Women in Mining and Resources
Queensland Mentoring Program, seven of New Hope’s Senior Leaders have volunteered and
been nominated as Mentors in the 2017 program, which presents a great opportunity for
leaders to share their wealth of experience in working in the mining industry.

CERTIFICATE 3 IN SURFACE MINE OPERATIONS

New Hope invests heavily in skills development training programs. Over the past two years
nearly 200 people employed in our Coal Operations have attained, or are working toward,
a Certificate 3 in Surface Mine Extraction. This is significant commitment but New Hope
recognises that highly trained and skilled employees are safe and productive. We view
skills development and training as an investment that is returned many times over.

Our skills development initiatives have been recognised by the Queensland State
Government with New Acland Mine being named as finalists in the State Training Awards
(Darling Downs South West region) in three different award categories:

• Vocational Student of the Year

• VET Teacher or Trainer of the Year

• Large Employer of the Year.

Our Jeebropilly Mine was named 2017 Medium Employer of the Year for the
Metropolitan region.

LIVE WELL,
WORK WELL

77.5%

of employees
think the
program works

Safe Operations and Healthy Workforce
We strive to ensure that our people are fit for work and remain free from work‑related
injury and illness. Our aim is to create a culture where employees feel supported to
be their healthiest and happiest selves. We developed the Live Well, Work Well health and
wellness program to better people’s health and wellbeing – a program which is driven
by our employees and sponsored by management.

In line with this, we are actively working with our people around the three pillars of
person, environment and practices. Some examples of these pillars in action are outlined
below:

• Person – monthly health promotion and instruction sessions are delivered at Toolbox
talks. Each element of the program is delivered by different health and wellness
professionals including physiotherapists, financial planners, psychologists and dieticians.

• Environment – provision of high tables and exercise bikes at crib huts for machine
operators to be able to stand and/or exercise while they have their crib breaks.

• Practices – prestart stretch and activate sessions. The sessions are led by stretch

leaders from each crew who have been trained to lead the sessions by a physiotherapist.

Our annual health program survey at New Acland Mine demonstrated that 77.5% of
employees thought that the program had made a positive change to their health.

Ongoing Success in Health and Wellness ‑ Outstanding results have been recognised
at a State, National and industry level including:

• 2015 Queensland Safe Work and Return to Work Award.

• 2016 Australian Mines and Metals Association Health and Wellbeing Award.

• 2017 Queensland Mining Industry Health and Safety Conference Best Health

Program Award.

Protecting the Environment
New Hope is committed to managing our impacts on the natural environment through
environmentally responsible and effective business practices.

Key environmental issues across our operations include:

• Water management

– ⎯ New Acland Mine has minimised its impact on the groundwater system by,
in 2009, building a 47 kilometre pipeline to receive recycled water from
Toowoomba’s Wetalla Waste Water Treatment facility for its operations.
This agreement for the supply of recycled water now supports mining activity,
with only a minimal reliance on bore water for ablution purposes (drinking water,
showers etc.).

– ⎯ Variable frequency pumps are being used in the coal preparation plant to control

water consumption in a more efficient and proactive manner.

– ⎯ Over the FY2017 period, a number of water pipelines across the site were replaced

with larger diameter pipes to further improve water efficiency.

• Energy consumption and emissions

– ⎯ In accordance with the National Greenhouse and Energy Reporting legislation,

we report on emissions, energy consumption and energy production to the Clean
Energy Regulator.

– ⎯ New Hope continually identifies opportunities to reduce both energy usage and

emissions intensity across operations.

– ⎯ Key initiatives undertaken during FY2017 include the trial of the dual fueled rear
dump truck at New Acland, which aims to reduce diesel particulate matter (DPM)
and emissions by greater than 60%. Based on initial results from the trial, duty
cycle of the gas operation has averaged above 65% representing the equivalent in
DPM and emission reduction.

– ⎯ Transparent annual reporting under the National Pollutant Inventory reporting

legislation.

• Air quality and noise

– ⎯ New Acland undertakes continuous air quality monitoring at its rail loadout facility

near Jondaryan and publishes the results on a monthly basis on its website.

– ⎯ Installation of noise attenuation on mobile fleet to reduce sound power levels

emitted by machines.

– ⎯ Proactive air quality monitoring at sites located at QBH on its port facility’s

boundary and between its port facility and the suburb of Wynnum North. Results
are published online.

– ⎯ New Acland Mine has installed electric horns on machinery and is trialling an
upgraded state‑of‑the‑art muffler system on trucks with the aim of further
reducing noise.

• Land management and biodiversity

– ⎯ New Hope is committed to the rehabilitation of disturbed land with progressive
rehabilitation occurring right behind the mining activities at New Acland Mine.

– ⎯ Acland Pastoral was established in 2006 as a farming, grazing and land
management enterprise based at New Acland Mine. Acland Pastoral has
landholdings of approximately 11,000 ha around New Acland Mine on which it
runs approximately 3,000 head of cattle. Acland Pastoral also conducts various
cropping projects on land around the mine, some of which are irrigated using
recycled water from the Toowoomba Wetalla Waste Water Treatment facility.
Acland Pastoral is an active member of Agforce.

– ⎯ For several years New Hope has conducted a weed management program across
its Acland Pastoral land surrounding New Acland Mine. This program has involved
an innovative mechanical mulching technique to effectively remove woody weeds
such as tree pear and box thorn. The pulp left behind by the mechanical mulcher
is fed on by Acland Pastoral cattle. To date approximately 527 ha of weed infested
land has been treated.

– ⎯ Over the last three to four years New Acland initiated a tree planting program

aimed at linking wildlife habitat, promoting conservation of biodiversity in riparian
areas and screen planting to minimise visual impacts on neighbouring landholders.

• Tailings

– ⎯ All tailings storage facilities are subject to an annual inspections regime conducted

by a Registered Professional Engineer of Queensland (RPEQ).

– ⎯ Management plans are in place to ensure all risks are appropriately managed,

including the appropriateness of key controls in place.

– ⎯ As part of the management plans, quarterly inspections are conducted over

tailings storage facilities.

– ⎯ Proactive management of legacy hazardous waste in decommissioned cells.

CASE
STUDY

HIGH DENSITY COMPRESSED NATURAL GAS TRUCK

This trial is an example of the innovation that can be implemented at mines to reduce
the emissions, vibrations and noise levels stemming from vehicle usage.

Developed by Mine Energy Solutions, the New Acland Mine is currently trialling a high
density compressed natural gas truck. The truck uses sequential gas injection for the
conversion of high horsepower diesel engines from 100% diesel to dual fuel operation,
using natural gas as the dominant fuel. This has resulted in significant cost savings,
as well as reductions in vibration and noise levels compared to standard mining industry
trucks. Notably, the new technology has been developed to support a full work shift
of up to 12 hours, minimising the impact the trial could have on the mine’s productivity.
The truck has been onsite at New Acland since early August 2016 and was fully
operational as at December 2016. A natural gas refueling station has also been installed
at New Acland Mine to support the 18 month trial.

REPURPOSING SORTING TECHNOLOGY TO STREAMLINE PROCESSES

New Acland Mine is currently testing a streamlined way for sorting and processing coal
in a sorting unit in Melbourne at a Steinert Australia testing facility. New Acland is the
first ever Australian coal mine to trial this technology. If proved to be successful, the
technology could potentially be brought to New Acland Mine next year.

Using X‑ray and high pressure air jets to eject reject material from raw coal before it
enters the washplant, the technology enables raw coal to be ‘sorted’ before it enters
the washplant. Commonly used to process mineral ore, we repurposed the sorting
technology to apply to our coal processing plant. By sending coal through the sorter first,
the washplant would be doing less work getting rid of reject, and more work processing
product coal. This will mean higher quality raw coal through the washplant, which in turn
means higher yield.

CASE
STUDY

NEW ACLAND CATTLE GRAZING TRIALS

Acland Pastoral is currently in its fifth year of scientific grazing trials looking at livestock
production performance on rehabilitated land. The trial includes livestock, pasture
and soil monitoring and focuses on measuring the productivity, economic viability and
sustainability of beef production on previously mined land.

This industry leading work is conducted in partnership with independent agricultural
consultants Outcross Agri‑Services, the University of Southern Queensland’s National
Centre for Engineering in Agriculture Sustainable Soils unit (USQ), pasture specialists
EcoRich Grazing and supported by expert veterinarian and statistician advice. Results
to date have shown that, on average, performance from cattle grazing the rehabilitated
pastures was comparable or exceeded the performance of the control (unmined) site with
an average gain of 0.7kg/day and producing 103kg beef per hectare. Data and results from
the trial are being used to improve the way in which New Hope conducts rehabilitation.
As a result of information provided by the trials about root zone activity, and the ability
of pasture species to send roots down into fissure and cracks in the interburden, New
Hope rehabilitation processes now recognise that the interburden layer below the
topsoil can also play an important role in supporting plant growth post mining activity.
As a consequence, prior to the deposition of topsoil, the surface of the interburden
layer is now ripped with machinery to provide the rock fracturing and fissures that can
be exploited by plant root systems. The ability to support deeper root systems in turn
assists pasture plant species to be more tolerant of dry conditions, and to therefore
provide better pasture performance in drier times. In addition, the detailed data gathered
by the trials is assisting Acland Pastoral to determine optimum grazing regimes for
rehabilitated grazing lands, including rotation times and rest periods.

New Hope Corporation Limited and Controlled Entities | 2017 Annual Report

2016
$000

2015
$000

2014
$000

Total revenue

844,077

531,459

505,781

548,959

Profit before tax (before non regular items)

Profit after tax (before non regular items)

Profit/(loss) before tax

Tax benefit/(expense)

Profit/(loss) after tax

184,335

128,713

202,213

(61,594)

140,619

6,116

5,029

(74,112)

20,432

(53,680)

71,578

51,749

(24,709)

2,888

(21,821)

53,665

41,490

71,047

(12,598)

58,449

Loss attributable to minority interests

(1)

Net profit/(loss) attributable to NHCL members

140,620

(53,679)

(21,820)

58,450

Total assets employed

Shareholders' funds

2,181,645

1,853,428

2,018,549

1,750,412

2,075,158

1,852,625

2,185,842

1,973,859

Dividends paid during the financial year

49,864

66,484

78,944

132,928

Weighted average shares on issue

831,067,979

831,050,306

830,999,449

830,836,913

2017

2016

2015

2014

Net profit/(loss) attributable to NHCL members
(as a % of shareholders' funds)

Earnings per share before non regulars (cents)

Earnings/(loss) per share (cents)

Normal dividends per share (cents)

Special dividends per share (cents)

7.6%

15.4

16.9

10.0

–

-3.1%

-1.2%

3.0%

0.6

(6.5)

4.0

–

6.2

(2.6)

6.5

3.5

5.0

7.0

8.0

3.5

Net tangible asset backing per share (cents)

215.9

203.5

220.6

234.6

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

Mr R.D. Millner
Mr T.J. Barlow
Mr W.H. Grant
Mr T.C. Millner
Ms S.J. Palmer
Mr I.M. Williams
Mr S.O. Stephan

CONSOLIDATED RESULTS

Revenue from operations

Profit before income tax (before non regular items) 1

Recovery of prior period below rail access charge

Impairment of available for sale financial assets

Land access compensation

Acquisition costs expensed

Impairment of oil producing assets

Impairment of oil exploration assets

Profit/(loss) before income tax (after non regular items)

Profit after income tax (before non regular items) 1

Recovery of prior period below rail access charge

Impairment of available for sale financial assets

Land access compensation

Acquisition costs expensed

Impairment of oil producing assets

Impairment of oil exploration assets

Petroleum resource rent tax (derecognition due to recoverability)

Profit/(loss) after income tax (after non regular items)

Non-controlling interests

2017
$000

2016
$000

844,077

531,459

184,335

19,908

(2,030)

–

202,213

128,713

13,936

(2,030)

–

140,619

(1)

6,116

–

(4,978)

5,000

(52,104)

(15,029)

(13,117)

(74,112)

5,029

–

(4,978)

5,000

(36,473)

(10,520)

(8,388)

(3,350)

(53,680)

(1)

Profit/(loss) attributable to New Hope Shareholders

140,620

(53,679)

Basic earnings per share (cents) (before non regular items) 1

Recovery of prior period below rail access charge

Impairment of available for sale financial assets

Land access compensation

Acquisition costs expensed

Impairment of oil producing assets

Impairment of oil exploration assets

Petroleum resource rent tax (derecognition due to recoverability)

Basic earnings/(loss) per share (cents) (after non regular items)

15.4

1.7

(0.2)

–

16.9

0.6

–

(0.6)

0.6

(4.4)

(1.3)

(1.0)

(0.4)

(6.5)

%
CHANGE

' 59%

' 2,914%

' 373%

' 2,459%

' 362%

' 2,467%

' 360%

1 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.

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEW34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWDirectors’ reportfor the year ended 31 July 2017New Hope Corporation Limited and Controlled Entities | 2017 Annual ReportPRINCIPAL ACTIVITIES
The principal activities of the New Hope Corporation Limited and controlled entities (the Group) consisted of:

•

Coal mining – exploration, development, production and processing in Queensland and New South Wales;

• Marketing and logistics;

•

Agriculture;

• Oil and gas – exploration, development, production and processing; and

•

Investments.

Dividends paid to members during the financial year were:

A final dividend for the year ended 31 July 2016 of 2.0 cents per share paid on 1 November 2016

An interim dividend for the year ended 31 July 2017 of 4.0 cents per share paid on 3 May 2017

$000

16,621

33,243

In addition to the above dividends, since the end of the financial year, the Directors have declared a final dividend of 6.0 cents per share.
This dividend is fully franked, to be paid on 7 November 2017 out of retained profits at 31 July 2017 with the record date for such
dividend to be 24 October 2017. This will provide shareholders of New Hope with total dividends for the year of 10.0 cents per share
(4.0 cents interim) compared with total dividends for the 2016 year of 4.0 cents per share.

OPERATING AND FINANCIAL REVIEW
A review of the Group’s operations during the year and the results of those operations is set on pages 6 to 15 of this Annual Report.
These pages also deal with the Group’s operations, financial position and prospects for future financial years.

RISK MANAGEMENT
The operations of the Company span a number of industries and geographical locations, all of which are subject to specific risks.

The Company has a robust and well documented risk management framework which is overseen by the Board of Directors and embedded
into all levels of the organisation. The framework assists the organisation to identify, classify, document, manage and report on the risks
facing the Company. Each identified risk is tracked in a risk register and allocated to an accountable individual who is discharged with
managing and reporting on the risk. Maintenance of the risk register has been delegated to the Risk Manager and Internal Auditor.

The perceived likelihood and potential consequence of each risk are used to determine the risk level, which in turn determines the actions
required to manage the risk and reporting obligations. The risk management framework requires that all significant risks have a specific
documented action plan, and that updates are provided to the Board of Directors on a periodic basis.

A summary of the significant risks facing the entity include the following:

SAFETY
The nature of the Company’s operations comes with an inherent risk of accidents which have the potential to cause harm to individuals.
These risks are proactively managed using comprehensive safety management systems as well as a continual focus on a strong safety
culture.

SOCIAL LICENSE
A number of stakeholders have an interest in the impact our operations have on the surrounding environment and the communities in
which we operate. In addition, the Company is subject to stringent regulation and reporting obligations spanning multiple government
jurisdictions and departments.

Failure to adequately acknowledge and address the interests of these stakeholders could negatively impact the operations of the
Company and potentially result in an inability to secure, maintain or renew the regulatory approvals required to continue the operations
of the Company. The Company engages appropriately qualified experts to both manage the underlying risks and to engage proactively
with stakeholder groups. The Company also utilises a variety of systems to manage and report upon the Company’s performance against
those obligations.

NAC03 APPROVALS
The Company is currently in the process of securing approvals for the NACO3 expansion. Timing of these approvals is critical to ensure
operations continue beyond Stage 2 as reserves on the existing lease are depleted.

Directors’ reportfor the year ended 31 July 2017PROJECT DEVELOPMENT
The Company is actively pursuing growth through both developments of existing assets and the acquisition of complimentary assets.
Such activities will ultimately require the deployment of significant capital. To ensure that capital is deployed in an optimal manner, the
Company undertakes rigorous and well document due diligence using a mix of internal and external subject matter experts prior to making
any investment decisions. All significant project development and acquisition transactions require approval from the Board of Directors.

BENGALLA JOINT VENTURE
The Bengalla Mine faces many of the same risks as the New Acland and Jeebropilly mining operations. Bengalla Mine management
is charged with discharging these duties day to day but the Company provides oversight and governance via participation in the Bengalla
Joint Venture management committee and by monitoring operational performance.

FAILURE OF INFRASTRUCTURE
The Company is highly dependent upon the availability and effectiveness of key infrastructure in order to produce and bring products
to market. The Company undertakes timely and effective preventative maintenance as well as regular third party inspections of key
infrastructure to minimise the risk of unforeseen failure.

MARKET FORCES
The Group’s activities expose it to a variety of financial risks including but not limited to commodity price risk and foreign currency 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.

INSURANCE OF OFFICERS
In accordance with the provisions of the Corporations Act 2001, the Company 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 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.

CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance statement can be accessed on New Hope Corporation website at: www.newhopegroup.com.au/
content/investors/corporate-governance

O
V
E
R
V
I
E
W

R
E
V
I
E
W

B
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S
I
N
E
S
S

C
O
R
P
O
R
A
T
E

N
F
O
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M
A
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I
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N

R
E
P
O
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T

F
I
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A
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C
I
A
L

O
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H
E
R

N
F
O
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M
A
T
I
O
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WORK PLACE COMPLIANCE
The Company has complied with the Workplace Gender Equality Act 2012 and has lodged its report with the Workplace Gender Equality
Agency. The report can be accessed on the New Hope Corporation website at:
www.newhopegroup.com.au/content/investors/corporate-governance

ENVIRONMENTAL COMPLIANCE
During the 2017 financial year, the Group has not been prosecuted for any breach of environmental laws.

ENVIRONMENTAL PERFORMANCE
The majority of the Company’s operations which include coal mining operations and exploration tenements, the Jondaryan rail loadout
facility, the QBH coal export port facility and oil and gas operations are in Queensland.

The key pieces of environmental legislation are the Queensland: the Environmental Protection Act 1994, the Water Act 2000 and the
Nature Conservation Act 1992 as well as the Commonwealth Environmental Protection and Biodiversity Conservation Act 1999.

The Company’s operations have proactively undertaken initiatives to improve their environmental performance.

ENVIRONMENTAL SYSTEMS
During the 2017 financial year the Group adhered to its Environmental policy aligned with the requirements of the ISO 14001 standard
and the Group’s operations have continued improvement of the Environmental Management System (EMS). The EMS enables the Company
to effectively manage 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 the Company reports as part of the corporate group of Washington H. Soul
Pattinson and Company Limited (WHSP).

Directors’ reportfor the year ended 31 July 2017INFORMATION ON DIRECTORS

MR R.D. MILLNER (NON-EXECUTIVE CHAIRMAN)

EXPERIENCE
Mr Millner is Chairman of the Company’s holding company, Washington H. Soul Pattinson and Company Limited. Mr Millner joined
the Board of New Hope Corporation Limited on 1 December 1995 and was appointed Chairman in 1998.

OTHER CURRENT LISTED DIRECTORSHIPS

Washington H. Soul Pattinson and Company Limited

Apex Healthcare Berhad

Australian Pharmaceutical Industries Limited

BKI Investment Company Limited

Brickworks Limited

Milton Corporation Limited

TPG Telecom Limited

FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS
Nil

SPECIAL RESPONSIBILITIES
Chairman of the Board

Appointed 1984

Appointed 2000

Appointed 2003

Appointed 1997

Appointed 1998

Appointed 2000

Chairman since 1998

Chairman since 2003

Chairman since 1999

Chairman since 2002

INTERESTS IN SHARES AND OPTIONS
3,925,829 ordinary shares in New Hope Corporation Limited

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

MR T.J. BARLOW – BBUS, LLB (NON-EXECUTIVE DIRECTOR)

EXPERIENCE
Mr Barlow joined the Board of New Hope Corporation Limited on 22 April 2015. He is the Managing Director of Washington H. Soul
Pattinson and Company Limited. Prior to that role Mr Barlow was the Managing Director of Pitt Capital Partners for eight years.
He has extensive experience in corporate finance across a range of industries.

OTHER CURRENT LISTED DIRECTORSHIPS
Washington H. Soul Pattinson and Company Limited

TPI Enterprises Limited

FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS
PM Capital Asian Opportunities Fund Limited

Appointed 2015

Resigned 2017

SPECIAL RESPONSIBILITIES
Chair of the Nomination Committee and Member of the Remuneration Committee and Audit Committee

INTERESTS IN SHARES AND OPTIONS
19,900 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 joined the Board of New Hope Corporation Limited on 25 May 2006. Mr Grant was the CEO of South Bank
Corporation in Brisbane from 1997 to 2005 and General Manager/CEO of the Newcastle City Council from 1992 to 1997. He retired
as Chairman of Brisbane Airport Corporation in May 2017 after almost 10 years.

OTHER CURRENT LISTED DIRECTORSHIPS
Nil

FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS
Nil

SPECIAL RESPONSIBILITIES
Chairman of the Remuneration Committee and Member of the Nomination Committee and Audit Committee

INTERESTS IN SHARES AND OPTIONS
30,000 ordinary shares in New Hope Corporation Limited

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

MR T.C. MILLNER (NON-EXECUTIVE DIRECTOR)

EXPERIENCE
Mr Millner joined the Board of New Hope Corporation Limited on 16 December 2015. He is Director and Co-Portfolio Manager of Contact
Asset Management Limited, manager of Listed Investment Companies BKI Investments Company Limited (BKI.ASX) and URB Investments
Limited (URB.ASX). He is also a non-executive Director of Washington H. Soul Pattinson and Company Limited. Mr Millner’s experience
includes 15 years of experience within the financial services industry, including: 13 years’ experience in active portfolio management
of Australian equities, 8 years’ experience as a CEO of Australian publicly listed company BKI and 6 years’ experience as a Company
Director of Australian publicly listed companies.

OTHER CURRENT LISTED DIRECTORSHIPS
Washington H. Soul Pattinson and Company Limited

FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS
PM Capital Global Opportunities Fund Limited

Appointed 2011

Resigned 2017

SPECIAL RESPONSIBILITIES
Nil

INTERESTS IN SHARES AND OPTIONS
3,774,368 ordinary shares in New Hope Corporation Limited

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

Directors’ reportfor the year ended 31 July 2017MS S.J. PALMER – BCOM, CA, FAICD (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 current knowledge to the New Hope board in all aspects of accounting, finance, financial reporting, risk management and corporate
governance. Her most recent executive role was as Chief Financial Officer and Executive Director with Thiess Pty Ltd. Ms Palmer was
appointed to the New Hope Corporation Limited Board on 1 November 2012.

OTHER CURRENT LISTED DIRECTORSHIPS
Charter Hall Retail REIT

RCR Tomlinson Ltd

Qube Holdings Ltd

FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS
Nil

SPECIAL RESPONSIBILITIES
Chair of the Audit Committee

Appointed 2015

Appointed 2014

Appointed 1 September 2017

INTERESTS IN SHARES AND OPTIONS
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 LISTED DIRECTORSHIPS
Nil

FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS
Nil

SPECIAL RESPONSIBILITIES
Member of the Remuneration Committee and Member of Nomination Committee

INTERESTS IN SHARES AND OPTIONS
38,087 ordinary shares in New Hope Corporation Limited

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

MR S.O. STEPHAN – BBUS (DIST), MBA (AGSM), MAUSIMM, MAICD (MANAGING DIRECTOR)

EXPERIENCE
Mr Stephan has over 30 years experience in the coal mining industry including senior line management roles, experience as a District
Inspector of Mines in Queensland and as a member of the Coal Industry Health and Safety Advisory Council. He has also held executive
roles in the corporate finance division of an investment bank. He commenced with New Hope as Chief Financial Officer in 2009. He was
appointed Managing Director on 20 November 2014.

OTHER CURRENT LISTED DIRECTORSHIPS
Nil

FORMER LISTED DIRECTORSHIPS IN LAST 3 YEARS
Nil

SPECIAL RESPONSIBILITIES
Managing Director

Appointed 2014

INTERESTS IN SHARES AND OPTIONS
311,291 ordinary shares in New Hope Corporation Limited

454,082 performance rights over ordinary shares in New Hope Corporation Limited

COMPANY SECRETARY
Ms Janelle Moody was appointed to the role of Company Secretary on 31 May 2016. Ms Moody has extensive legal experience, specifically
in the area of corporate and commercial matters in the mining industry. Prior to joining New Hope Corporation Limited, Ms Moody was
running her own legal practice, and has previously been a Partner in the law firm McCullough Robertson.

Directors’ reportfor the year ended 31 July 2017REMUNERATION REPORT
The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001.

A. REMUNERATION GOVERNANCE
The performance of the Group depends upon the quality of its Directors and Executives. It is the Company’s objective to attract and retain
appropriately qualified and experienced Directors and Executives.

The Remuneration Committee comprises Messrs Grant (Chair), Barlow and Williams. The Remuneration Committee is responsible
for reviewing and setting the remuneration packages for Directors and Executives on an annual basis. The Remuneration Committee
engages independent consultants, utilises data from independent surveys and reviews other market information and reports to ensure
that remuneration is consistent with current industry practices. The Corporate Governance Statement provides further information
on this Committee.

B. KEY MANAGEMENT PERSONNEL

NAME

POSITIONS HELD

Mr R.D. Millner

Mr T.J. Barlow

Mr W.H. Grant

Mr T.C. Millner

Ms S.J. Palmer

Mr I.M. Williams

Mr S.O. Stephan

Mr A.L. Boyd

Mr M.J. Busch

Chairman and Non-executive Director.

Non-executive Director. Chairman of the Nomination Committee.

Independent Non-executive Director. Chairman of the Remuneration Committee.

Non-executive Director.

Independent Non-executive Director. Chairman of the Audit Committee.

Independent Non-executive Director.

Managing Director.

Chief Operating Officer.

Chief Financial Officer.

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

Executive remuneration comprises a mix of base remuneration, short term incentives (STIs) and long term incentives (LTIs). Target
remuneration mix (based on the entitlement to 100% of the available STIs and LTIs which is at risk and subject to performance hurdles)
for the year ended 31 July 2017 is:

TARGET REMUNERATION MIX

CEO

COO

CFO

62%

66%

19%

17%

20%

40%

60%

80%

100%

Base remuneration

STI

LTI

The detail of each component is as follows:

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

SHORT TERM INCENTIVES
STIs are designed to motivate and reward senior executives to achieve the short term goals of the Company as set by the Board.

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 performance of the executive and the Company during the period. The Key Performance Indicators (KPI) set by the Remuneration
Committee and their respective weightings for the 2017 financial year are detailed below.

SHORT TERM INCENTIVES KPI’s

Attributable to Company performance

Group Profit, Sales and Investment Performance

Group Compliance – Safety, Environment and Risk Management

Group Production Cost, Project Development and M&A Activities

Attributable to Individual performance

WEIGHTING

50%

30%

10%

50%

The Remuneration Committee has determined that the portion of STIs awarded for the year ended 31 July 2017 and payable after year
end are:

Shane O. Stephan

Andrew L. Boyd

Matthew J. Busch

80%

70%

67%

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 LTIs 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 LTIs
is converted into Performance Rights by reference to the 5 day volume weighted average share price of the Company over the 5 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.

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 KPIs set by the Remuneration Committee and their respective
weightings relevant for the 2017 financial year are detailed below.

LONG TERM INCENTIVES KPI’s

Shareholder Value

Strategic Plan delivery

WEIGHTING

75%

25%

Directors’ reportfor the year ended 31 July 2017The 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

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.

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.

YEAR ENDED 31 JULY

2017

2016

2015

2014

2013

Net profit/(loss) attributable to shareholders

Profit/(loss) after tax

Net profit after tax before non regular items

Earnings/(loss) per share

Dividends paid during the year

Share price as at 31 July

Shareholders’ funds

A$000’s

cents/share

$/share

A$000’s

140,620

140,619

128,713

16.9

6.0

1.60

(53,679)

(53,680)

5,029

(6.5)

8.0

1.60

(21,820)

(21,821)

51,749

(2.6)

9.5

1.91

58,450

58,449

41,490

7.0

16.0

3.00

74,129

74,128

124,955

8.9

31.0

3.76

1,853,428

1,750,412

1,852,625

1,973,859

2,016,456

E. 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 (2016 – $1,750,000) per annum.

F. VOTING MADE AT THE COMPANY’S 2016 ANNUAL GENERAL MEETING
The Company received 99% “yes” votes on its remuneration report for the 2016 financial year.

Non-executive Directors

Mr R.D. Millner

Mr T.J. Barlow

Mr W.H. Grant

Mr T.C. Millner

Ms S.J. Palmer

Mr I.M. Williams

Executive Directors

Mr S.O. Stephan

Key Management Personnel

Mr A.L. Boyd

Mr M.J. Busch

2016

Non-executive Directors

Mr R.D. Millner

Mr T.J. Barlow
Mr D.J. Fairfull 1
Mr W.H. Grant

Mr T.C. Millner

Ms S.J. Palmer

Mr I.M. Williams

Total Non-executive Directors

Executive Directors

Mr S.O. Stephan

Key Management Personnel
Mr B.D. Denney 2
Mr A. L. Boyd 3

Mr M.J. Busch

REMUNERATION REPORT (CONTINUED)

G. DETAILS OF REMUNERATION
Details of remuneration of Directors and the key management personnel (KMP) of the Company are set out below for the current and
previous financial years.

SHORT-TERM EMPLOYEE BENEFITS

CASH SALARY
AND FEES
$

NON CASH
BENEFITS 4
$

LONG-TERM
BENEFITS

POST EMPLOYMENT BENEFITS

SHARE-BASED
PAYMENTS

LSL
$

SUPER-
ANNUATION
$

TERMINATION
BENEFITS
$

RIGHTS
$

TOTAL
$

Total Non-executive Directors

1,008,000

293,000

135,000

150,000

135,000

160,000

135,000

–

19,615

12,825

14,250

12,825

15,200

12,825

87,540

1,239,240

118,811

31,115

19,724

Total Key Management Personnel

1,167,961

Total Remuneration – 2017

3,415,201

166,848

622,252

545,709

4,534

43,503

48,037

2,035

9,670

11,705

42,820

19,612

39,224

146,488

–

312,615

147,825

164,250

147,825

175,200

147,825

1,095,540

203,943

1,612,833

25,035

78,832

673,468

697,326

103,867

1,370,794

307,810

4,079,167

SHORT-TERM EMPLOYEE BENEFITS

CASH SALARY
AND FEES
$

NON CASH
BENEFITS 4
$

LONG-TERM
BENEFITS

POST EMPLOYMENT BENEFITS

SHARE-BASED
PAYMENTS

LSL
$

SUPER-
ANNUATION
$

TERMINATION
BENEFITS
$

RIGHTS
$

TOTAL
$

293,000

135,000

41,250

150,000

84,620

160,000

135,000

998,870

–

19,308

12,825

5,344

14,250

8,039

15,200

12,825

87,791

1,247,833

9,740

11,520

19,385

–

312,308

147,825

46,594

164,250

92,659

175,200

147,825

1,086,661

127,574

1,416,052

312,686

389,709

546,028

9,930

38,728

(990)

47,668

57,408

10,682

22,327

9,796

42,805

54,325

7,111

14,370

19,305

40,786

147,962

136,316

(66,010)

–

61,686

410,715

465,134

635,825

136,316

(4,324)

1,511,674

123,250

4,014,387

Total Key Management Personnel

1,248,423

Total Remuneration – 2016

3,495,126

1 Mr D.J. Fairfull retired as a Director on 19 November 2015.

2 Mr. B.D. Denney resigned as Chief Operating Officer (COO) on 18 December 2015. The negative share based payments amount reflects Rights forfeited.

3 Mr. A.L. Boyd was appointed as Chief Operating Officer on 21 December 2015.

4 Non Cash Benefits include movements in annual leave provisions.

Directors’ reportfor the year ended 31 July 2017The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:

NAME

Mr S.O. Stephan

Mr A. L. Boyd

Mr M.J. Busch

FIXED REMUNERATION

AT RISK – STIs

AT RISK – LTIs

2017

87%

96%

89%

2016

91%

100%

90%

2017

2016

2017

13%

11%

2016

10%

Since the long-term incentives 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.

H. 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

BASE REMUNERATION
INCLUDING SUPERANNUATION 2

TERMINATION PAYMENTS 3

Mr S.O. Stephan

No fixed term

$1,300,000

6 months’ base remuneration

6 months' notice period

Mr A.L. Boyd

No fixed term

$650,000

3 months’ base remuneration

Mr M.J. Busch

No fixed term

$600,000

3 months’ base remuneration

3 months' notice period

1 This notice applies equally to either party.

2 Base remuneration quoted is for the year ended 31 July 2017; 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).

I. DETAILS OF SHARE BASED COMPENSATION

RIGHTS
Rights are granted under the New Hope Corporation Limited Employee Performance Rights Share 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. The fair value of the rights is determined based on the market
price of shares at the grant date, with an adjustment made to take into account the vesting period, expected dividends during that period
that will not be received by the participants and the probability that the performance conditions will be met.

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

PERFORMANCE PERIOD TO WHICH LTIs RELATES

GRANT DATE

VESTING DATE

2012

2014 – 2016

2015 – 2018

2016 – 2019

December 2012

December 2014

November 2015

December 2016

August 2016

August 2017

August 2018

August 2019

VALUE OF A RIGHT
AT GRANT DATE
($)

4.08

1.58

0.96

1.08

0.80

Rights granted under the plan carry no dividend or voting rights.

Details of Rights over ordinary shares in the Company as at 31 July 2017, 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 in future periods has been determined as the amount of the grant date fair value of the right that is yet to be expensed.

NAME

GRANT
DATE

VESTING DATE

NUMBER
GRANTED

VALUE PER
SHARE

NUMBER
VESTED

VESTED
%

NUMBER
FORFEITED

FORFEITED
%

Mr S.O. Stephan December 2012

November 2015

August 2016
August 2017 1

11,210

134,228

November 2015

August 2018

204,082

December 2016

August 2019

250,000

Mr A.L. Boyd

December 2016

August 2019

124,497

Mr M.J. Busch

December 2012

December 2014

August 2016
August 2017 1

November 2015

August 2018

December 2016

August 2019

8,408

50,336

76,531

93,750

4.08

0.96

1.08

0.80

4.08

1.58

1.08

0.80

11,210

100%

–

8,408

100%

–

1 The rights vesting in August 2017 do not have a maximum value at 31 July as they vest in August 2017.

The fair value of the rights is determined based on the market price of the Company’s shares at the grant date.

MAXIMUM
VALUE IN
FUTURE
PERIODS

–

80,375

150,816

75,104

–

30,141

56,556

J. EQUITY INSTRUMENTS HELD BY KEY MANAGEMENT PERSONNEL
The tables below show the number of rights and shares in the Company that were held during the financial year by KMPs 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 S.O. Stephan

Mr A. L. Boyd

Mr M.J. Busch

SHARE HOLDINGS

NAME

Mr R.D. Millner

Mr T.J. Barlow

Mr W.H. Grant

Mr T.C. Millner

Ms S.J. Palmer

Mr I.M. Williams

Mr S.O. Stephan

Mr A.L. Boyd

Mr M.J. Busch

BALANCE AT
THE START
OF THE YEAR

349,520

–

135,275

GRANTED AS
REMUNERATION

VESTED

BALANCE AT THE
END OF THE YEAR

250,000

124,497

93,750

(11,210)

–

(8,408)

588,310

124,497

220,617

UNVESTED

588,310

124,497

220,617

BALANCE AT
THE START
OF THE YEAR

3,781,962

–

30,000

3,774,368

15,000

38,087

241,021

15,438

711,324

PURCHASED/
(SOLD)

143,867

19,900

–

RECEIVED ON
THE VESTING
OF RIGHTS

BALANCE AT THE
END OF THE YEAR

–

11,210

–

8,408

3,925,829

19,900

30,000

3,774,368

15,000

38,087

252,231

15,438

719,732

Directors’ reportfor the year ended 31 July 2017SHARES ISSUED ON THE VESTING OF RIGHTS
Since the end of the financial year 81,208 rights have vested and will be 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
Deloitte Touche Tohmatsu has acted as auditor for the Group for the entire 2017 year. 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.

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 30):

Audit services

Audit and review of financial reports and other audit work under the Corporations Act 2001:

Deloitte Touche Tohmatsu (Australian firm)

Total remuneration for audit services

Other services

Deloitte Touche Tohmatsu (Australian firm)

Audit of joint operations

Accounting advisory services

Ernst & Young (2016: PricewaterhouseCoopers) (Australian firm)

Audit of joint operations

Total remuneration for non-audit services

Total auditor remuneration

CONSOLIDATED

2017
$

2016
$

371,500

433,000

24,000

–

42,000

66,000

437,500

24,000

33,000

18,000

75,000

508,000

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 41.

The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued by the
Australian Securities and Investments Commission (ASIC), relating to the “rounding off” of amounts in the Directors’ report. Amounts in
the Directors’ report have been rounded off in accordance with that ASIC Instrument to the nearest thousand dollars, or in certain cases,
to the nearest dollar.

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEW34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWDirectors’ reportfor the year ended 31 July 2017New Hope Corporation Limited and Controlled Entities | 2017 Annual ReportMEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company’s Directors held during the year ended 31 July 2017 and the number
of meetings attended by each Director:

Mr R.D. Millner

Mr T.J Barlow

Mr W.H. Grant

Mr T.C. Millner

Ms S.J. Palmer

Mr I.M. Williams

Mr S.O. Stephan

FULL MEETINGS

AUDIT COMMITTEE

REMUNERATION

NOMINATION

HELD

ATTENDED

HELD

ATTENDED

HELD

ATTENDED

HELD

ATTENDED

–

Signed at Sydney this 18th day of September 2017 in accordance with a resolution of Directors.

R.D. Millner
Director

S.J. Palmer
Director

Directors’ reportfor the year ended 31 July 2017Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060

Riverside Centre
Level 25
123 Eagle Street
GPO Box 1463
Brisbane QLD 4001 Australia

DX 115
Tel: +61 (0) 7 3308 7000
Fax: +61 (0) 7 3308 7001
www.deloitte.com.au

D
D
e
e
l
l
o
o
i
i
t
t
t
t
e
e

T
T
o
o
u
u
c
c
h
h

The Board of Directors

New Hope Corporation Limited

3 / 22 Magnolia Drive

Brookwater QLD 4300

18 September 2017

Dear Board Members

Independence Declaration

In accordance with section 307C of the Corporations Act 2001 , I am pleased to provide the following declaration of
independence to the directors of New Hope Corporation Limited.

As lead audit partner for the audit of the financial report of New Hope Corporation Limited for the financial year ended 31
July 2017, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i)

(ii)

the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

any applicable code of professional conduct in relation to the audit.

Yours sincerely,

DELOITTE TOUCHE TOHMATSU

Richard Wanstall
Partner

Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEW34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWAuditor’s Independence Declarationfor the year ended 31 July 2017New Hope Corporation Limited and Controlled Entities | 2017 Annual ReportCONTENTS

Statement of Comprehensive Income
Balance Sheet
Statement of Changes in Equity
Cash Flow Statement
Results for the year

1.
2.
3.
4.
5.
6.

Financial reporting segments
Revenue
Other income and expenses
Income taxes
Cash flow information
Earnings per share

Operating assets and liabilities

Receivables
Accounts payable
Inventories

7.
8.
9.
10. Property, plant and equipment
11.
12. Exploration and evaluation
13. Provisions

Intangibles

Capital

Lease liabilities

14. Cash and cash equivalents
15. Available for sale financial assets
16.
17. Derivative financial instruments
18. Dividends
19. Equity

Risk
20.

Financial risk management

Group structure

21. Business combination
22.

Interests in other entities

Unrecognised items

23. Contingent liabilities
24. Commitments
25. Subsequent events

Other

26. Related party transactions
27. Share based payments
28. Parent entity financial information
29. Deed of Cross Guarantee
30. Remuneration of Auditors
31. Other accounting policies

Directors’ declaration
Independent audit report to the members of New Hope Corporation Limited
Glossary
Tenements
Shareholder Information

PAGE

49
51
52
53
56
57

58
59
59
60
65
66
67

68
69
70
71
72
73

80
81

82
83
83

84
86
87
88
90
90

104

The Company 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 25 to 40,
which is not part of this financial report. The financial report was authorised
for issue by the Directors on 18 September 2017. 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/content/investors

Notes to the Financial Statementsfor the year ended 31 July 2017Revenue from operations

Other income

Expenses

Cost of sales

Marketing and transportation

Administration

Other expenses

Acquisition costs expensed

Impairment of assets

Profit/(loss) before income tax

Petroleum resource rent tax expense

Income tax benefit/(expense)

Profit/(loss) after income tax for the year

Profit/(loss) attributable to:

New Hope Shareholders

Non-controlling interests

Other comprehensive income/(loss)

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

Exchange differences on translation of foreign operation

Changes to the fair value of available for sale financial assets, net of tax

Transfer to profit and loss – available for sale financial assets, net of tax

Other comprehensive income/(loss) for the year, net of tax

Total comprehensive income/(loss) for the year

Total comprehensive income/(loss) attributable to:

New Hope Shareholders

Non-controlling interests

NOTES

3(a)

3(b)

4(a)

19(f)

2017
$000

844,077

23,378

867,455

(476,855)

(168,766)

(9,669)

(7,922)

–

(2,030)

202,213

–

(61,594)

140,619

2016
$000

531,459

4,846

536,305

(353,196)

(150,278)

(8,152)

(13,563)

(52,104)

(33,124)

(74,112)

(3,574)

24,006

(53,680)

140,620

(53,679)

(1)

140,619

(53,680)

17,509

(6,404)

187

644

–

11,936

152,555

2,455

15,294

(258)

–

355

17,846

(35,834)

152,556

(35,833)

(1)

152,555

(35,834)

Earnings per share for profit/(loss) attributed to ordinary equity holders
of the Company

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

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

16.9

(6.5)

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

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWStatement of Comprehensive Incomefor the year ended 31 July 2017New Hope Corporation Limited and Controlled Entities | 2017 Annual ReportNOTES

2017
$000

2016
$000

4(d)

4(e)

236,885

71,567

62,394

13,024

18,075

91,162

83,370

53,518

1,486

2,313

401,945

231,849

1,297

1,977

1,200

3,364

1,324,637

1,340,415

59,220

392,569

1,779,700

2,181,645

59,673

382,048

1,786,700

2,018,549

65,289

2,356

43,632

64,604

2,272

45,733

111,277

112,609

10,232

101,867

104,841

216,940

328,217

12,588

51,575

91,365

155,528

268,137

1,853,428

1,750,412

19(f)

19(g)

95,772

36,518

1,721,118

1,853,408

95,692

24,353

1,630,362

1,750,407

1,853,428

1,750,412

Current assets

Cash and cash equivalents

Receivables

Inventories

Current tax assets

Derivative financial instruments

Total current assets

Non-current assets

Receivables

Available for sale financial assets

Property, plant and equipment

Intangible assets

Exploration and evaluation assets

Total non-current assets

Total assets

Current liabilities

Accounts payable

Lease liabilities

Provisions

Total current liabilities

Non-current liabilities

Lease liabilities

Deferred tax liabilities

Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Contributed equity

Reserves

Retained profits

Capital and reserves attributable to New Hope Shareholders

Non-controlling interests

Total equity

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

Balance Sheetas at 31 July 2017

CONTRIBUTED
EQUITY
$000

NOTES

RESERVES
$000

RETAINED
EARNINGS
$000

NON-
CONTROLLING
INTERESTS
$000

Balance at 1 August 2016

Profit/(loss) for the year

Other comprehensive income

Total comprehensive income/(loss)

Transactions with owners in their
capacity as owners

Dividends provided for or paid

Transfer from share based payment
reserve to equity

Net movement in share based
payment reserve

Share of non-controlling interests
equity contributions

95,692

24,353

1,630,362

–

140,620

11,936

–

140,620

–

(49,864)

(80)

309

–

229

–

(49,864)

19(f)

Balance at 31 July 2017

95,772

36,518

1,721,118

Balance at 1 August 2015

Loss for the year

Other comprehensive income

Total comprehensive income/(loss)

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

95,444

6,632

1,750,525

–

248

–

248

–

(53,679)

17,846

–

(53,679)

–

(248)

123

–

(125)

(37,397)

(29,087)

–

(66,484)

19(f)

(1)

–

(1)

–

(1)

–

(1)

–

(18)

TOTAL
$000

1,750,412

140,619

11,936

152,555

(49,864)

–

309

(49,539)

1,853,428

1,852,625

(53,680)

17,846

(35,834)

(37,397)

(29,087)

–

123

(18)

(66,379)

Balance at 31 July 2016

95,692

24,353

1,630,362

1,750,412

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

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWStatement of Changes in Equityfor the year ended 31 July 2017New Hope Corporation Limited and Controlled Entities | 2017 Annual ReportCash flows from operating activities

Receipts from customers inclusive of GST

Payments to suppliers and employees inclusive of GST

Acquisition costs expensed

Interest paid

Income taxes paid

Net cash inflow from operating activities

Cash flows from investing activities

Payments for property, plant and equipment

Payments for intangibles

Payments for exploration and evaluation assets

Refunds from/(payments for) acquisition of business – Bengalla

Payments for acquisition of business – other

Net proceeds from held to maturity investments

Proceeds from sale of property, plant and equipment

Interest received

Refunds of security and bond guarantees

Dividends received

Net cash inflow/(outflow) from investing activities

Cash flows from financing activities

Repayment of finance leases

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.

NOTES

2017
$000

2016
$000

914,625

532,081

(601,621)

(470,896)

313,004

61,185

–

(903)

(27,570)

284,531

(52,104)

(249)

(2,104)

6,728

(70,451)

(1,831)

(12,492)

(66,257)

(38)

(17,774)

1,669

(846,048)

(800)

116

2,573

2,050

(3,482)

1,032,412

822

25,363

–

(79,101)

125,007

(2,272)

(49,864)

(52,136)

153,294

91,162

(7,571)

(985)

(66,484)

(67,469)

64,266

24,789

2,107

236,885

91,162

Cash Flow Statementfor the year ended 31 July 2017The 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.

BASIS OF PREPARATION
This financial report is a general purpose financial report which:

• Has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian

Accounting Standards Board (AASB), Australian Accounting Interpretations and the Corporations Act 2001.

•

Complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
For the purposes of preparing the consolidated Financial Statements, the Company is a for profit entity.

Adopts policies which are consistent with those of the previous financial year and corresponding interim reporting period.

• Has been prepared under the historical cost convention, as modified by the revaluation of available for sale financial assets, derivative

instruments carried at fair value, agricultural assets carried at fair value and inventory carried at net realisable value.

• Has been prepared on a going concern and accruals basis.

• Does not adopt any Accounting Standards and Interpretations that have been issued or amended but are not yet effective (such

as AASB 15 Revenue from Contracts with Customers and AASB 9 Financial Instruments (December 2010) as amended by 2013-9).
Refer to note 31 for more information on this and other accounting policies.

•

Is for a company which is of a kind referred to in ASIC Corporations Instrument 2016/191, issued by ASIC, relating to the “rounding
off” of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance with that
Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.

•

Presents comparative information that has been reclassified where appropriate to enhance comparability.

BASIS OF CONSOLIDATION

(I) SUBSIDIARIES
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 31 July 2017 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.

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 Statement of Comprehensive
Income, Statement of Changes in Equity and Balance Sheet respectively.

(II) JOINT ARRANGEMENTS
For information on Joint Arrangements refer to note 22.

OTHER ACCOUNTING POLICIES
Significant and other accounting policies relevant to gaining an understanding of the financial statements have been grouped with the
relevant notes to the financial statements.

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWNotes to the Financial Statementsfor the year ended 31 July 2017New Hope Corporation Limited and Controlled Entities | 2017 Annual ReportKEY JUDGEMENTS AND ESTIMATES
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement 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
within the following notes:

Note 4

Note 10

Note 11

Note 12

Note 13

Note 15

Note 21

Note 22

Deferred Tax Assets

Impairment assessment

Estimation of coal and oil reserves and resources

New Acland Stage 3 approvals

Impairment of oil producing assets

Goodwill impairment assessments

Exploration and evaluation expenditure

Impairment of oil exploration assets

Provisions – rehabilitation

Impairment of available for sale financial assets

Acquisition fair value

Classification of joint arrangements

PAGE

Notes to the Financial Statementsfor the year ended 31 July 20171. FINANCIAL REPORTING SEGMENTS

ACCOUNTING POLICY
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker
(CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been
identified as comprising the Board, Managing Director (MD), COO and Chief Financial Officer (CFO).

A. DESCRIPTION OF SEGMENTS
The Group has three reportable segments, namely Coal mining in Queensland (including mining related exploration, development,
production, processing, transportation, port operations and marketing), Coal mining in New South Wales (including mining production,
processing, transportation and marketing) and Oil and gas (including oil and gas related exploration, development, production
and processing).

Operating segments have been determined based on the analysis provided in the reports reviewed by the Board, MD, COO and CFO
(being the 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 Queensland coal mining operations. Segment information is presented
on the same basis as that used for internal reporting purposes.

B. SEGMENT INFORMATION

Year ended 31 July 2017

Revenue from external customers

EBITDA

Interest expense

Depreciation and amortisation

Profit/(loss) before tax and non regular items
Non regular items before tax' 1

Profit/(loss) before tax after non regular items

Income tax benefit/(expense)

Profit/(loss) after tax after non regular items

Total segment profit before tax includes:

Interest revenue

Reportable segment assets

Total segment assets includes:

Additions to non-current assets

COAL MINING
QLD
$000

COAL MINING
NSW
$000

NOTES

OIL AND
GAS
$000

TOTAL
$000

502,825

322,570

18,682

844,077

135,249

146,771

1,098

283,118

(903)

(49,863)

84,483

17,878

102,361

(31,925)

70,436

–

(40,794)

105,977

–

105,977

(31,401)

74,576

–

(7,223)

(6,125)

–

(6,125)

1,732

(4,393)

(903)

(97,880)

184,335

17,878

202,213

(61,594)

140,619

1,957

122

2,089

1,047,392

1,017,059

117,194

2,181,645

48,080

13,867

31,907

93,854

1 'Non regular items for the year ended 31 July 2017 relate to the recovery of rail charges due to an adjustment to the Queensland Rail tariffs by the QCA. The QCA
issued a final decision that required a reduction in below rail access charges applicable from 1 July 2013 with amounts relating to prior periods refunded and
recognised as other income of $19.9 million. There were also impairment losses of $2.0 million related to available for sale assets.

Year ended 31 July 2016

Revenue from external customers

EBITDA

Interest expense

Depreciation and amortisation

Profit/(loss) before tax and non regular items
Non regular items before tax 1
Profit/(loss) before tax after non regular items

Income tax benefit/(expense)

Petroleum resource rent tax expense

Profit/(loss) after tax after non regular items

COAL MINING
QLD
$000

COAL MINING
NSW
$000

NOTES

OIL AND
GAS
$000

TOTAL
$000

423,526

97,411

10,522

531,459

61,900

(248)

(54,523)

7,129

7,151

(1,475)

–

5,676

21,271

(1,901)

81,270

(1)

(16,234)

5,036

(51,862)

(46,826)

13,975

–

(32,851)

–

(4,148)

(6,049)

(28,388)

(34,437)

11,506

(3,574)

(26,505)

(249)

(74,905)

6,116

(80,228)

(74,112)

24,006

(3,574)

(53,680)

Total segment profit/(loss) before income tax includes:

Interest revenue

17,814

17,862

Reportable segment assets

Total segment assets includes:

Additions to non-current assets

1,022,780

907,347

88,422

2,018,549

82,745

877,467

26,839

987,051

The prior period segment note has been restated due to the change in reporting in the current period to enhance comparability.

1 Non regular items relate to land access compensation income, impairment charges for oil producing and exploration assets, derecognition of petroleum
resource rent tax, impairment of available for sale financial assets and acquisition costs expensed in relation to business combinations during the year.

C. OTHER SEGMENT INFORMATION

(I) SEGMENT REVENUE

Total segment revenue by geographical location

Japan

Taiwan/China

Chile

Korea/Indonesia

Other

Australia

2017
$000

2016
$000

308,940

310,898

27,062

17,052

113,715

66,410

844,077

208,261

205,371

12,331

9,104

24,650

71,742

531,459

Included within revenue for the Coal mining QLD segment is one customer that represents more than 10% of the Group’s total revenue.
For the year ended 31 July 2017, one customer contributed $224,430,000 (2016 – $182,520,000) in sales revenue.

(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.

Notes to the Financial Statementsfor the year ended 31 July 20172. REVENUE

ACCOUNTING POLICY – 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.

Sales revenue

Sale of goods

Services

Other revenue

Property rent

Interest

Sundry revenue

2017
$000

2016
$000

824,570

12,831

837,401

1,207

2,089

3,380

486,220

22,358

508,578

1,048

17,862

3,971

844,077

531,459

A. OTHER INCOME

Recovery of prior period below rail access charge

Insurance recovery

Gain/(loss) on sale of property, plant and equipment

Land access compensation

B. BREAKDOWN OF EXPENSES

Profit/(loss) before income tax includes the following specific expenses:

Foreign exchange gains and losses

Net foreign exchange (gains)/losses

Depreciation

Buildings

Plant and equipment

Amortisation

Mining reserves, leases and mine development

Oil producing assets

Software

Mining information

Water rights

Other charges against assets

Impairment of available for sale investments (IGas Plc and Planet Gas Limited)

Impairment of oil producing assets (Bridgeport)

Impairment of oil exploration assets (Bridgeport)

Doubtful debt expense' 1

Acquisition costs expensed

Exploration costs expensed' 2

Employee benefits expensed

Superannuation expensed 3

Operating lease costs expensed

1 Doubtful debt expense is included in Other expenses.

2 Exploration costs expensed includes Employee benefits expensed.

3 Superannuation expensed is included in Employee benefits expensed.

NOTES

2017
$000

19,908

2,000

1,470

–

23,378

2016
$000

–

(154)

5,000

4,846

7,571

(2,107)

954

53,911

54,865

33,962

6,769

626

1,396

262

752

50,238

50,990

18,600

3,593

1,027

585

110

43,015

23,915

2,030

–

2,030

–

4,978

15,029

13,117

33,124

6,377

52,104

14,735

13,820

126,414

100,782

8,534

7,131

12,644

7,186

Notes to the Financial Statementsfor the year ended 31 July 20174. INCOME TAXES

ACCOUNTING POLICY
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income, based on the relevant
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 jurisdictions where the company’s subsidiaries and associates operate and generate taxable income.

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.

TAX CONSOLIDATION LEGISLATION
New Hope Corporation Limited and its wholly owned Australian controlled entities are subject to tax consolidation legislation.
All entities within the group are party to both Tax Sharing and Funding Agreements (TSA and TFA). The TSA, in the opinion of the
Directors, limits the joint and several liability of each entity in the case of default by New Hope Corporation Limited. The TFA provides
the basis to account for compensation for tax related items transferred between the subsidiaries and the head entity of the group.
The head entity, New Hope Corporation Limited, and the controlled entities in the tax consolidated 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 TFAs with the tax consolidated entities are recognised as amounts receivable from or payable
to other entities in the Group. Any difference between the amounts assumed and amounts receivable or payable under the TFA are
recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

PETROLEUM RESOURCE RENT TAX (PRRT)
The Group accounts for current and deferred tax arising from PRRT in accordance with the requirements in relation to income
tax as detailed above. New Hope Corporation Limited, as head company of the income tax consolidated group, has made a PRRT
consolidation election and as such the Group currently includes three PRRT consolidated groups at 31 July 2017 (three at 31 July
2016). The Group has accounted for its PRRT tax balances in accordance with the stand-alone taxpayer method in alignment with
its TFA.

INCOME TAX EXPENSE

Income tax – Current tax expense

Income tax – Adjustments for current tax of prior periods

Income tax – Deferred tax expense/(benefit)

Petroleum resource rent tax – Deferred tax expense

Effective tax rate

Effective tax rate (excluding PRRT)

NOTES

2017
$000

14,065

1,966

45,563

–

61,594

30.5%

2016
$000

–

(4,179)

(19,827)

3,574

(20,432)

27.6%

32.4%

B. NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLE

Profit/(loss) before income tax

Income tax calculated at 30% (2016 – 30%)

Tax effect of amounts which are not deductible (taxable) in calculating taxable income:

Income tax on petroleum resource rent tax

Impairment of available for sale financial assets

Sundry items

(Over)/under provided in prior year

Effect of previously unrecognised capital losses

Petroleum resource rent tax expense

Income tax expense/(benefit)

NOTES

2017
$000

202,213

60,664

–

609

2016
$000

(74,112)

(22,234)

(1,072)

1,493

101

61,324

(21,712)

695

(425)

–

(794)

(1,500)

3,574

61,594

(20,432)

C. TAX EXPENSE RELATING TO ITEMS OF OTHER COMPREHENSIVE INCOME

Cash flow hedges

19(f)

(4,760)

(7,606)

D. RECONCILIATION OF INCOME TAX PAYABLE/(RECEIVABLE)

Profit/(loss) before income tax

Income tax calculated at 30% (2016 – 30%)

Tax effected adjustments to taxable income:

Non temporary differences

Non assessable income

Impairment of available for sale financial assets

Other non temporary items

Temporary differences:

Other assessable/(deductible) amounts

Tax losses utilised

Taxable income at 30% (2016 – 30%)

Tax losses generated

Current tax liability

Less: Tax instalments paid

Tax refundable

202,213

60,664

(74,112)

(22,234)

(425)

609

(37,218)

(9,616)

14,065

–

14,065

(27,089)

(13,024)

(1,500)

1,493

101

13,575

–

(8,565)

–

(1,486)

Notes to the Financial Statementsfor the year ended 31 July 2017E. DEFERRED TAX BALANCES

ACCOUNTING POLICY
Deferred tax assets are recognised for the deductible temporary differences and unused tax losses only when it is probable that
future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are
not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where
the company is able to control the timing of the reversal of the temporary difference and it is probable that the differences will not
reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority.

NET BALANCE AT
1 AUGUST
$'000

RECOGNISED IN
PROFIT OR LOSS
$'000

RECOGNISED
IN OCI
$'000

ACQUIRED
IN BUSINESS
COMBINATION
$'000

NET
$'000

DEFERRED TAX
ASSETS
$'000

DEFERRED TAX
LIABILITIES
$'000

2017

Rehabilitation provision

29,651

(1,125)

Property, plant and
equipment

Capitalised exploration

Cash flow hedges

Inventories

Other receivables

Accrued expenses

Employee benefits

Other

Revenue tax losses

Capital losses

(9,662)

(91,937)

(694)

(6,619)

1,219

639

11,481

(3,934)

16,781

1,500

(32,306)

(1,328)

–

117

(1,910)

774

(182)

(9,616)

–

(4,729)

–

(51,575)

(45,563)

(4,729)

3,761

32,287

–

(3,761)

–

(45,729)

(93,265)

(5,423)

(6,502)

(691)

652

12,255

(4,116)

7,165

1,500

(101,867)

–

652

12,255

–

7,165

1,500

53,859

(45,729)

(93,265)

(5,423)

(6,502)

(691)

–

(4,116)

–

(155,726)

2016

Rehabilitation provision

18,736

2,009

Property, plant and
equipment

Capitalised exploration

Arising on PRRT

Cash flow hedges

Inventories

Other receivables

Accrued expenses

Employee benefits

Other

Revenue tax losses

Capital losses

(6,809)

(89,400)

3,574

6,912

(6,933)

(382)

704

8,854

(3,757)

8,216

(60,186)

7,333

(2,537)

(3,574)

–

314

2,270

(178)

791

(177)

8,565

1,401

16,217

–

(7,606)

–

(7,606)

8,906

29,651

–

(10,186)

–

(669)

113

1,836

–

(9,662)

(91,937)

–

(694)

(6,619)

1,219

639

11,481

(3,934)

16,781

1,500

(51,575)

–

639

11,481

–

16,781

1,500

60,052

(9,662)

(91,937)

–

(694)

(6,619)

1,219

–

(3,934)

–

(111,627)

F. UNRECOGNISED DEFERRED TAX ASSETS

Deferred tax assets have not been recognised in respect of the following items:

Tax losses (capital)

PRRT (net of income tax)

Temporary differences associated with available for sale financial assets

NOTES

2017
$000

2016
$000

9,124

143,166

8,133

160,423

9,549

57,702

7,717

74,968

SIGNIFICANT JUDGEMENTS AND ESTIMATES
The deferred taxation benefits will only be obtained if assessable income is derived of a nature and of an amount sufficient to enable
the benefit from the deductions to be realised, conditions for deductibility imposed by the law are complied with and no changes
in tax legislation adversely affect the realisation of the benefit from the deductions.

The recognised deferred tax assets include carried forward transferred losses from previous acquisitions (2016 included Group
revenue losses). The deferred tax assets will be recoverable against future taxable income based on the current forecasts for the
Group. Key judgements and estimates underpinning these forecasts are the estimated cash flows and reserves and resources
detailed in note 10. Revenue tax losses do not expire and are deemed to have low risk of denial of utilisation.

Capital tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items
because it is uncertain when future capital gains will be available against which the Group can utilise the benefits from these assets.

RECONCILIATION OF NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES TO PROFIT AFTER
INCOME TAX

Profit/(loss) after income tax

Depreciation and amortisation

Non-cash employee benefit expense – share based payments

Impairment of available for sale financial assets

Impairment of oil producing assets

Impairment of oil exploration assets

Net foreign exchange (gain)/loss

Net (profit)/loss on sale of non-current assets

Interest income

Income taxes paid

Income tax expense/(benefit)

Changes in operating assets and liabilities

(Increase)/decrease in receivables

(Increase)/decrease in other receivables

(Increase)/decrease in inventories

(Increase)/decrease in prepayments

Increase/(decrease) in payables

Increase/(decrease) in provisions and employee entitlements

Net cash provided by operating activities

NOTES

19(f)

3(b)

4(a)

2017
$000

140,619

97,880

309

2,030

–

7,571

(463)

(2,089)

(27,570)

61,594

5,301

(2,960)

(8,876)

(701)

9,084

2,802

284,531

2016
$000

(53,680)

74,905

123

4,978

15,029

13,117

(2,107)

154

(17,549)

(2,104)

(20,432)

(20,729)

(2,954)

16,559

(475)

2,748

(855)

6,728

* The above net movement excludes the increase associated with the acquisition of the Bengalla joint operation interest.

Non-cash investing and financing activities

Acquisition of plant and equipment by means of finance leases

–

15,845

Notes to the Financial Statementsfor the year ended 31 July 20176. EARNINGS PER SHARE

ACCOUNTING POLICY

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.

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.

Basic earnings/(loss) per share attributable to ordinary equity holders
of the Company
Diluted earnings/(loss) per share attributable to ordinary equity holders
of the Company

C. Reconciliation of adjusted profits

EARNINGS PER SHARE (CENTS)

2017
$000

16.9

2016
$000

(6.5)

BASIC AND DILUTED

2017
$000

2016
$000

Profit/(loss) attributable to the ordinary equity holders of the Company

140,620

(53,679)

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)

BASIC AND DILUTED

2017
$000

2016
$000

831,067,979

831,050,306

732,721

438,136

831,800,700

831,488,442

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 27.

ACCOUNTING POLICY
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 forty five days from the date of recognition.

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.

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.

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 doubtful debts) 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 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 the Statement of
Comprehensive Income.

Current

Trade receivables (a)

Less: Provision for doubtful debts

Other receivables (b)

Prepayments

Non-current

Other receivables

2017
$000

2016
$000

39,502

–

26,601

5,464

71,567

1,297

60,659

(6,377)

24,209

4,763

83,254

1,200

A. RECOVERABLE RECEIVABLE
As of 31 July 2017, trade receivables past due but not impaired were nil (2016 – $14,251,000). An agreed settlement to recover the full
balance not impaired at 31 July 2016 was achieved in September 2016.

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, Goods and Services Tax (GST) refunds receivable and security deposits. 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 20.

D. FAIR VALUE AND CREDIT RISK
Due to the short term nature of current receivables, their carrying value is assumed to approximate their fair value. The fair value
of non-current receivables approximates their carrying amounts. Information about the Group’s exposure to fair value and credit risk
in relation to trade and other receivables is provided in note 20.

Notes to the Financial Statementsfor the year ended 31 July 20178. ACCOUNTS PAYABLE

ACCOUNTING POLICY
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.

Trade payables and accruals

INVENTORIES

2017
$000

2016
$000

65,289

64,604

ACCOUNTING POLICY
Coal stocks are valued at the lower of cost and net realisable value in the normal course of business. Cost comprises the weighted
average costs of 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.

Self-generating and regenerating assets are valued at fair value less costs to sell. Inventories of consumable supplies and spare parts
expected to be used in production are valued at weighted average cost.

Coal stocks

Self-generating and regenerating assets

Raw materials and stores at cost

2017
$000

36,073

2,948

23,373

62,394

2016
$000

26,818

2,076

24,624

53,518

INVENTORY EXPENSE

A.
Coal stocks recognised as an expense during the year ended 31 July 2017 amounted to $578,491,000 (2016 – $457,575,000).

ACCOUNTING POLICY
Property, plant and equipment 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 subsequent costs are expensed to the Statement of Comprehensive Income during the financial period in which
they are incurred.

Depreciation is calculated so as to write off the cost of each item of property, plant and equipment over 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. An annual review of the appropriateness of the method of depreciation is also undertaken
noting the straight line method was predominately used in the 2017 year. The expected useful life of plant and equipment is 4 to 20
years, buildings is 25 to 40 years and motor vehicles is 4 to 8 years. Land is not depreciated.

An asset’s carrying amount is immediately written down to its recoverable amount if the asset’s carrying amount is greater
than its recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement
of Comprehensive Income.

MINE PROPERTIES, DEVELOPMENT COSTS, RESERVES AND LEASES AND OIL PRODUCING ASSETS
Development expenditure incurred by the consolidated entity is accumulated separately for each area of interest in which
economically recoverable resources have been identified to the satisfaction of the Directors. Direct development expenditure,
pre-operating start-up costs and an appropriate portion of related overhead expenditures are capitalised as development costs
up until the relevant area of interest is ready for use. The cost of acquiring reserves and resources are capitalised in the Balance
Sheet as incurred.

Mining reserves, leases and 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 an area of interest is ready
for use.

Oil development assets are amortised on a unit of production basis. The method uses the actual costs of the asset to date plus
all its projected future development costs. Amortisation commences when an area of interest is ready for use.

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 operations will maintain a consistent stripping ratio at the component level and as such no overburden in
advance should be recognised. In the 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 future economic benefits (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.

IMPAIRMENT
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 dispose (FVLCD) 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 (CGUs).
The Company assesses annually for any indicator of a reversal of a previous impairment.

Notes to the Financial Statementsfor the year ended 31 July 2017SIGNIFICANT JUDGEMENTS AND ESTIMATES – IMPAIRMENT OF ASSETS

IMPAIRMENT ASSESSMENT

(A)
All property, plant and equipment allocated to CGU’s containing goodwill must be tested for impairment at the CGU level
on an annual basis. Other property, plant and equipment assets must also be tested for impairment when impairment indicators
are identified.

Judgement is involved in assessing whether there are indicators of impairment of property, plant and equipment including in relation
to the impact of events or changes in circumstances. For coal mining and oil production assets, key judgements include external factors
such as forecast commodity prices and foreign exchange rates. Judgement is also required in relation to the estimation of coal and oil
reserves and resources (refer (B) below for further information in relation to the estimation of coal reserves and resources).

Where the recoverable amounts of the Group’s CGU’s are tested for impairment using analyses of discounted cash flows, the
resulting valuations are also sensitive to changes in estimates of long-term commodity prices, production timing and recovery rates,
exchange rates, operating costs, reserve and resource estimates, closure costs and discount rates. Estimates in respect of the timing
of project expansions and the cost to complete asset construction are also critical to determining the recoverable amounts for CGU
(refer (C) below in relation to specific considerations related to NACO3 approvals).

(B) ESTIMATION OF COAL AND OIL RESERVES AND RESOURCES
The Group estimates its coal reserves and resources based on information compiled by Competent Persons as defined in accordance
with the JORC Code, which is produced by the Australasian Joint Ore Reserves Committee.

The estimation of reserves and resources requires judgement to interpret available geological data and then to select an appropriate
mining method and establish an extraction schedule. It also requires assumptions about future commodity prices, exchange
rates, production costs, recovery rates and discount rates and, in some instances, the renewal of mining licences. There are many
uncertainties in the estimation process and assumptions that are valid at the time of estimation may change significantly when new
information becomes available.

Changes in coal reserves could have an impact on: the calculation of depreciation, amortisation and impairment charges; the timing
of the payment of closedown and restoration costs; and the recovery of deferred tax assets. Changes in coal resources could have
an impact on the recoverability of Exploration and evaluation costs capitalised (refer note 12).

(C) NEW ACLAND STAGE 3 APPROVALS
In recent years the process to secure mining tenements has become more complex and time consuming, and this has been
evident in the NAC03 approvals process. As a result, there are a number of uncertainties associated with the approvals timeline
and conditionality of the NAC03 project. The Company considers that approvals for the NAC03 project will be secured and have
prepared these financial statements on that basis. Any significant delay in the approvals process has the potential to delay the
commencement of NAC03 operations and has been assessed to be an indicator of impairment in the year ended 31 July 2017.

The financial statements have been prepared on the basis that approvals are granted within a reasonable time period, and
as a result, there is no significant impact on the value recoverable from the project and therefore the QLD coal mining CGU
at 31 July 2017. The Company has undertaken a thorough assessment regarding impairment as required under AASB 136
for the year ended 31 July 2017.

The Company carefully considered the potential impact that recent developments in the legal and regulatory environment or the
possibility of further delays in the approvals process would have on future cash flows. Having due regard to all relevant information,
the Company has concluded that none of these matters, either individually or in aggregate, result in the recoverable amount for the
CGU being below its carrying value.

The carrying value of the CGU’s assets is set out below:

Property, plant and equipment

Land and buildings – mining

Plant and equipment

Mining reserves, leases and development assets

Plant under construction

Intangibles

Software

Exploration and evaluation

Exploration and evaluation at cost

Total carrying value

NOTES

$000

47,697

123,849

8,513

55,571

1,487

35,816

272,933

SIGNIFICANT JUDGEMENTS AND ESTIMATES – IMPAIRMENT OF ASSETS (CONTINUED)

CONSIDERATIONS IN RESPECT OF CHANGES TO THE LEGAL AND REGULATORY ENVIRONMENT

The approval under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999 for the NAC03 project
was received in January 2017 which provides positive outcomes to the project.

The Queensland Government made amendments to the Water Act 2000 and the Mineral Resources Act 1989 in late 2016 which
now requires the NAC03 project to apply for and be granted an AWL. While this is a new approval requirement, it is largely covering
matters already dealt with as part of the existing ML, EA and EPBC approval processes and updated modelling is being undertaken
to address issues previously identified by the regulators and during the recent Land Court proceedings. As such, the Company is
confident that an AWL will be secured and the only relevant impact of this new legislation is the time required to secure the AWL.

The Land Court hearing was completed during the year with recommendations to the State Minister for Natural Resources and Mines
(the Minister) and the DEHP being made on 31 May 2017. The recommendations were for the Minister to not grant the ML and for the
DEHP to not grant the amendment to the existing EA. Both the MLs and the EA are required for the project to proceed.

While the Land Court considered many matters, the only matters identified by the Court as leading to the negative recommendations
were the perceived impacts that the NAC03 project may have on groundwater and night time noise limits with close neighbours.
The Company considers that these issues can be appropriately addressed and managed and will not ultimately result in a failure
to obtain the ML and EA approvals.

The Land Court recommendation is a non-binding recommendation and is not determinative to the outcome of the approval process.
In considering whether to grant the MLs and EA amendment, the Minister and the DEHP are required to consider a number of relevant
factors including the recommendations of the Land Court. The Company is working with the regulators to address the concerns
raised by the Land Court and that will enable the approval of the ML and EA. The AWL application referred to above will also deal
with the groundwater issues.

In addition, the Company through its wholly-owned subsidiary New Acland Coal Pty Ltd has commenced a Judicial Review process
in respect to the Land Court recommendations. The Judicial Review seeks to address a number of concerns that the Company has
about the Land Court process and resultant recommendations. If successful, the Judicial Review process may result in the Land Court
changing its findings in respect of groundwater and night time noise concerns and ultimately recommending grant of the ML and EA.

The Company has assessed that, despite the changes to the legal and regulatory environment, the NAC03 approvals will ultimately
be received. However, it is acknowledged that the changes to the legal and regulatory environment could result in delays in securing
the necessary project approvals and these are discussed separately below.

CONSIDERATIONS IN RESPECT OF APPROVAL TIMING

At the time of preparing these financial statements, the Minister has extended the time to make an interim decision relevant to the
grant of the ML and EA until 31 January 2018. This does not stop the Minister electing to make the decision earlier or agreeing to
extend this date. There is no fixed timing associated with the Minister making a final decision on the grant of the ML but once the
Minister makes the interim decision referred to above, the DEHP only has 10 business days to make a decision on the EA amendment.

Stage 2 operations at New Acland can continue to operate until all economically recoverable coal has been mined from within
the Stage 2 lease boundary. The Queensland coal mining CGU has take or pay agreements for rail, port and water supply. The rail
agreement is generally aligned to the recovery of Stage 2 coal while the port and water agreements have a longer term however
is not of an amount which for any foreseeable approval delay would constitute a material impact on value.

The saleable product is exposed to minimal risk of decline in quality and value over time. The Queensland coal mining operations
maintain a cost competitive structure within the mining industry with quality products available for export and domestic sale and
this will not be materially influenced by any delay in securing project approvals.

Notes to the Financial Statementsfor the year ended 31 July 2017SIGNIFICANT JUDGEMENTS AND ESTIMATES – IMPAIRMENT OF ASSETS (CONTINUED)

The fair value discounted cash flow models prepared for the CGU have confirmed the recoverable amount exceeds the carrying value.
Having due regard to the above factors and the reasonably foreseeable time required to secure project approvals the Company
considers the basis on which the financial statements have been prepared and assets recognised is appropriate. The models included
the typical input assumptions and sensitivities for a coal mining company and were expanded to include a sensitivity analysis for
a number of possible approval timelines. The key assumptions underpinning the models and sensitivity analysis are outlined below:

Extension of approvals timeline

Sensitivity analysis included adjusting the commencement of Stage 3 operations at Acland to reflect a range of possible approval
scenarios. The scenarios assume that project approvals will be received in 2018 in the earliest instance, or in 2022 at the
latest instance.

ii) Weighted Average Cost of Capital

A range of WACC sensitivities were considered between the ranges of 9%–11%.

iii) Coal pricing assumptions

In considering the commodity price assumptions the Company had regard to observable market forward curves, consensus market
data, reports from reputable industry analysts, as well of the expertise of the Company’s senior executive team. The base case
assumptions utilised a thermal coal price of between US$65–120 per tonne (nominal basis). These estimates were within the range
of prices supported by the externally sourced data.

iv) Foreign exchange

In considering the AUD:USD foreign exchange assumptions the Company had regard to observable market forward curves, consensus
market data, reports from reputable financial institutions, as well of the expertise of the Company’s senior executive team. The
AUD:USD foreign exchange rates assumptions were between 0.73 – 0.75. These estimates are within the range supported by
externally sourced data.

As a result of the impairment assessment undertaken there are no impairments required in relation to the assets of the QLD mining
operations CGU for the year ended 31 July 2017.

SIGNIFICANT JUDGEMENTS AND ESTIMATES – IMPAIRMENT OIL PRODUCING ASSETS
In the prior year it was determined that the recoverable amount of oil producing assets was $7.2 million, resulting in an impairment
of $15 million. In the current financial year there are no indicators of impairment or reversal of impairment in relation to these assets.

LAND AND
BUILDINGS
MINING
$000

LAND AND
BUILDINGS
NON-MINING
$000

PLANT AND
EQUIPMENT
$000

MINING
RESERVES
AND LEASES
$000

MINE AND
PORT DEVEL-
OPMENT
$000

OIL
PRODUCING
ASSETS
$000

PLANT
UNDER CON-
STRUCTION
$000

NOTES

TOTAL
$000

Year ended 31 July 2017

Balance at 1 August 2016

Additions

Rehabilitation movements

Other acquisition

Transfers in/(out)

Transfers to Exploration
and evaluation

Transfers to Intangibles

Disposal of assets

Depreciation/amortisation

171,453

1,282

–

(361)

(604)

9,402

403,027

624,302

33,542

–

21,259

–

8,313

–

(1,320)

–

(350)

(53,911)

(25,557)

Balance at 31 July 2017

171,838

9,052

377,368

598,745

Year ended 31 July 2016

Balance at 1 August 2015

157,060

9,608

244,701

1,680

Additions

Rehabilitation movements

Bengalla acquisition

Other acquisition

Transfers in/(out)

Transfers to Exploration
and evaluation

Transfers to Intangibles

Disposal of assets

Impairment of assets

Depreciation/amortisation

577

–

14,926

(101)

–

(762)

–

(305)

156,956

633,267

39,700

–

237

231

11,739

–

(68)

–

299

303

–

(530)

–

Balance at 31 July 2016

171,453

9,402

403,027

624,302

FINANCE LEASES

(447)

(50,238)

(10,717)

44,672

13,819

763

(2,099)

(1,373)

–

16,137

–

13,337

1,673

1,299

–

(8,405)

39,938

(6,769)

66,658

54,017 1,340,415

33,311

–

(26,191)

–

(99)

–

70,434

(3,472)

13,337

–

1,299

(99)

(1,681)

(95,596)

61,038 1,324,637

17,948

5,284

(1,093)

17,932

47,344

6,865

(2,588)

23,772

37,332

–

502,113

90,067

(3,378)

–

6,451

829,532

–

11,483

–

11,778

1,354

189

(13,412)

–

(7,883)

33,542

–

(15,029)

(3,593)

44,672

–

(126)

–

(529)

(126)

(830)

(15,029)

(73,183)

54,017 1,340,415

ACCOUNTING POLICY
Plant and equipment includes the following amounts where the Group is a lessee under a finance lease (refer to note 16 for
further details).

2017
$000

2016
$000

15,845

(4,042)

11,803

15,845

(1,346)

14,499

Leasehold equipment

Cost

Accumulated depreciation

Notes to the Financial Statementsfor the year ended 31 July 201711. INTANGIBLES

ACCOUNTING POLICY

IT DEVELOPMENT AND SOFTWARE
Costs incurred in IT development and developing software 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.

WATER RIGHTS AND MINING INFORMATION
The Group benefits from water rights associated with its mining operations through the efficient and cost effective operation of
the mine. These rights are amortised on a straight line basis over the life of the mine. The value of exploration, pre-feasibility and
feasibility costs necessary for regulatory, reporting and internal control purposes have been recognised as a mining information
intangible asset. The total value is amortised over the estimated life of the mine.

GOODWILL
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in
investments in associates. Goodwill is not amortised. Goodwill 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. Goodwill is allocated to CGUs for
the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the
business combination in which the goodwill arose.

IMPAIRMENT
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. Refer to note 10 for
details of impairment testing. Goodwill impairments are not reversible.

NOTES

$000

Year ended 31 July 2017

Balance at 1 August 2016

Additions

Transfers in/(out)

Amortisation charge

Balance at 31 July 2017

Year ended 31 July 2016

Balance at 1 August 2015

Additions

Acquisition of business – Bengalla

Transfers in/(out)

Amortisation charge

Balance at 31 July 2016

17,866

6,450

34,315

1,042

1,732

(626)

2,247

–

17,866

1,865

17,866

126

(1,027)

1,042

–

17,866

–

(262)

6,188

–

6,560

–

(110)

6,450

–

(1,396)

32,919

–

34,900

–

(585)

34,315

59,673

1,732

(2,284)

59,220

19,731

41,500

126

(1,722)

59,673

CRITICAL ESTIMATE – GOODWILL IMPAIRMENT ASSESSMENT
Goodwill cost relates to the acquisition of QBH ($5,596,000) and Northern Energy Corporation Limited (NEC) ($12,271,000).

The recoverable amount of the CGU to which NEC goodwill is attributable has been based on FVLCD using a comparable resource
transaction multiple multiplied by the resources attributable to this CGU. 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.
Observable transactions included in the assessment of an appropriate multiple are comparable transactions in the last four years for
Australian coal exploration projects with the same coal type as the CGU’s assets. The estimation of the resources used to determine
the recoverable amount requires judgement and assumptions as detailed in note 10.

The recoverable amount of the QBH CGU has been based on value in use calculations using a discounted cashflow model. The future
cashflows have been discounted using a post tax rate of 9% (31 July 2016: 10%).

ACCOUNTING POLICY
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. At the time that a decision is taken to
develop an area with proven technical feasibility and commercial viability the costs will cease to be capitalised as exploration and
evaluation assets and existing assets will be transferred to property, plant and equipment.

Exploration and evaluation expenditure which do not satisfy these criteria are expensed.

CRITICAL JUDGEMENTS IN APPLYING THE ENTITY’S ACCOUNTING POLICY

EXPLORATION AND EVALUATION EXPENDITURE
During the year the entity capitalised various items of expenditure to the exploration expenditure asset. The relevant items of
expenditure were deemed to be part of the capital cost of developing future mining and oil operations, which will subsequently
be amortised over the life of the mine or oil field. 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 area.

Exploration and evaluation at cost

Exploration and evaluation – mining reserves acquired

Reconciliation

Balance at 1 August

Additions

Movements in rehabilitation

Impairment of assets

Transfers in/(out)

Balance at 31 July

NOTES

2017
$000

135,137

257,432

392,569

382,048

12,492

(672)

–

(1,299)

392,569

2016
$000

124,616

257,432

382,048

377,121

17,254

260

(13,117)

530

382,048

CRITICAL ESTIMATE – IMPAIRMENT OIL EXPLORATION ASSETS
In the prior year, there were two oil exploration tenements which were identified for a full relinquishment with management
having no intention to further explore or develop the resource. As such a full impairment was recognised for the carrying value
of $8,998,000. In addition, there were two further Victorian oil exploration tenures which are subject to government moratorium
until at least 2020. With the uncertainty of future exploitation of these tenures a full impairment of $4,119,000 was recognised.
There have been no indicators of a reversal of impairment in the current year.

Notes to the Financial Statementsfor the year ended 31 July 201713. PROVISIONS

ACCOUNTING POLICY

SHORT-TERM EMPLOYEE BENEFIT OBLIGATIONS
Liabilities for wages and salaries, including non-monetary benefits, annual leave and vesting sick leave expected to be settled within
12 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. These 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.

OTHER LONG-TERM EMPLOYEE BENEFIT OBLIGATIONS
The liability for long service leave and annual leave which is not expected to be settled within 12 months of balance date
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. 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 a high quality corporate bonds rate with terms to maturity and currency that match,
as closely as possible, the estimated future cash outflows.

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 the Statement of Comprehensive Income 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.

2017

Current

Non-current

2016

Current

Non-current

A. EMPLOYEE BENEFITS

EMPLOYEE
BENEFITS
$000

REHABILITATION
$000

35,145

5,706

40,851

34,160

5,269

39,429

8,487

99,135

107,622

11,573

86,096

97,669

TOTAL
$000

43,632

104,841

148,473

45,733

91,365

137,098

2017
$000

2016
$000

Current long service leave obligations expected to be settled after 12 months

10,612

10,478

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.

B. MINING RESTORATION AND REHABILITATION

Movements

Balance at 1 August

Provision capitalised/(written down)

Provision credited to profit and loss

Provision arising on acquisition

Charged to profit and loss – unwinding of discount

Balance at 31 July

2017
$000

2016
$000

97,669

(4,144)

(1,475)

12,537

3,035

107,622

61,193

(3,118)

(578)

37,982

2,190

97,669

SIGNIFICANT ESTIMATE – DETERMINATION OF RESERVES ESTIMATES AND REHABILITATION COSTS
Provision is made for rehabilitation, restoration and environmental costs when the obligation arises, based on the net present value
of estimated future costs. The ultimate cost of rehabilitation and restoration is uncertain, and management uses its judgement and
experience to provide for these costs over the life of the operations.

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.

The estimation of reserves and resources are also a key judgement that affects the timing of the payment of closedown and
restoration costs as detailed in note 10.

14. CASH AND CASH EQUIVALENTS

ACCOUNTING POLICY
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.

Cash at bank and on hand

2017
$000

2016
$000

236,885

91,162

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 1.5% (2016 – 0% to 1.9%).

B. RISK EXPOSURE
Information about the Group’s exposure to foreign exchange risk and credit risk is detailed in note 20.

Notes to the Financial Statementsfor the year ended 31 July 201715. AVAILABLE FOR SALE FINANCIAL ASSETS

ACCOUNTING POLICY
Available for sale financial assets, comprising principally non-derivative marketable securities are included in non-current assets
unless management intends to dispose of the investment within 12 months of the balance date.

Available for sale financial assets are initially recognised at fair value. Unrealised gains and losses arising from changes in fair value
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 Statement of Comprehensive Income as gains and losses
from investment securities.

At the end of each reporting period, the Group assesses whether there is objective evidence that a financial asset or group of
financial assets is impaired. Such assets are impaired and impairment losses are incurred only if there is objective evidence of
impairment as a result of one or more events occurring after the initial recognition of the asset (a “loss event”) and that loss event
has a negative 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 may be impaired.

If there is objective evidence of impairment, 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 the Statement of Comprehensive
Income), is recognised in the Statement of Comprehensive Income. Impairment losses are not reversed through the Statement
of Comprehensive Income in a subsequent period.

Listed equity securities

Unlisted equity securities

2017
$000

1,974

1,977

2016
$000

3,361

3,364

During the year equity securities held were impaired by $2,030,000 (2016 – $4,622,000). In the prior year, in addition to the impairment,
$356,000 was transferred from reserves to the Statement of Comprehensive Income.

SIGNIFICANT JUDGEMENTS IN APPLYING THE ACCOUNTING POLICY
In the 2017 financial statements, the Group made a significant judgement about the impairment of one of its available for sale
financial assets. As a result of a prolonged decline in the fair value of the security it was considered to be impaired and a loss
recognised in Statement of Comprehensive Income.

ACCOUNTING POLICY
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower,
the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other
short-term and long-term payables.

The property, plant and equipment acquired under finance leases is depreciated over the asset’s useful life or (if there is no
reasonable certainty that the group will obtain ownership at the end of the lease term), over the shorter of the asset’s useful life and
the lease term.

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
Statement of Comprehensive Income on a straight line basis over the term of the lease.

A. SECURED – FINANCE LEASE LIABILITIES
The Group leases various plant and equipment with a carrying amount of $11,803,000 (2016: $14,499,000) under finance leases expiring
within three to four years. Refer to note 10 for further detail on these assets.

Commitments in relation to finance lease are payable as follows:

Within one year

Later than one year but not later than five years

Minimum lease payments

Future finance charges

Total lease liability

The present value of finance lease liabilities is as follows:

Within one year

Later than one year but not later than five years

Minimum lease payments

2017
$000

2016
$000

2,767

10,876

13,643

(1,055)

12,588

2,356

10,232

12,588

2,767

13,653

16,420

(1,560)

14,860

2,272

12,588

14,860

SECURED LIABILITY
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the
event of default. No other assets are pledged as security for borrowings.

RISK EXPOSURES
Details of the Group’s exposure to risks arising from current and non-current borrowings are set out in note 20.

Notes to the Financial Statementsfor the year ended 31 July 201717. DERIVATIVE FINANCIAL INSTRUMENTS

ACCOUNTING POLICY

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).

At the inception of the transaction, the Group documents 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 a cash flow hedge is recognised in
the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Statement of Comprehensive
Income.

Amounts accumulated in equity are recycled in the Statement of Comprehensive Income 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 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 the Statement of Comprehensive Income. When a forecast transaction is no longer expected to occur, the cumulative
gain or loss that was reported in equity is immediately reclassified to the Statement of Comprehensive Income.

Current assets

Forward foreign exchange contracts

2017
$000

2016
$000

18,075

2,313

INSTRUMENTS USED BY THE GROUP

A.
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.

At balance date these contracts represented an asset with a fair value of $18,075,000 (2016 – $2,313,000). At balance date the details
of outstanding contracts are:

Maturity

0 to 6 months

6 to 12 months

SELL US DOLLARS

BUY AUSTRALIAN DOLLARS

AVERAGE EXCHANGE RATE

2017
$000

2016
$000

2017
$000

2016
$000

221,183

–

221,183

7,297

21,831

29,128

0.73243

0.00000

0.68520

0.68709

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 $221,183,000 (2016 – $29,128,000) was receivable
(AUD equivalents).

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

A. ORDINARY DIVIDEND PAID

2015 final dividend at 2.50 cents per share – 100% franked (tax rate – 30%) (paid on 3 Nov 2015)

2015 special dividend at 3.50 cents per share – 100% franked (tax rate – 30%) (paid on 3 Nov 2015)

2016 interim dividend at 2.00 cents per share – 100% franked (tax rate – 30%) (paid on 3 May 2016)

2016 final dividend at 2.00 cents per share – 100% franked (tax rate – 30%) (paid on 1 Nov 2016)

2017 interim dividend at 4.00 cents per share – 100% franked (tax rate – 30%) (paid on 3 May 2017)

Total dividends paid

2017
$000

–

16,621

33,243

49,864

2016
$000

20,776

29,087

16,621

–

66,484

B. PROPOSED DIVIDENDS
In addition to the above dividends, since the end of the financial year, the Directors have declared a final dividend of 6.0 cents
(2016 – 2.0 cents per share). The dividend is fully franked based on tax paid at 30%. The proposed dividend expected to be paid
on 7 November 2017 but not recognised as a liability at year end is $49,869,000 (2016 – $16,621,000).

C. FRANKED DIVIDENDS
The franked portions of the final dividend recommended after 31 July 2017 will be franked out of existing franking credits.

Franking credits available for subsequent financial years based on a tax rate of 30% (2016 – 30%)

460,893

467,998

The above amounts represent the balances of the franking account as at the end of the financial year, adjusted for franking debits that
will arise from the payment/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 $21,372,000 (2016 – $7,123,000).

D. DIVIDEND REINVESTMENT PLANS
There were no dividend reinvestment plans in operation at any time during or since the end of the financial year.

Notes to the Financial Statementsfor the year ended 31 July 201719. EQUITY

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

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

B. RIGHTS
Information relating to the Rights Plan, including details of rights granted, vested and the amount lapsed during the financial year and
rights outstanding at the end of the financial year, is set out in note 27.

C. SHARE CAPITAL

Issued and paid up capital

831,070,344

95,772

831,050,726

95,692

2017
NO. OF SHARES

2017
$000

2016
NO. OF SHARES

2016
$000

D. MOVEMENTS IN SHARE CAPITAL

DATE

1 August 2015

4 August 2015

31 July 2016

1 August 2016

31 July 2017

1 SBP – Share based payment.

ISSUE PRICE

$000

DETAILS

Opening Balance

NUMBER OF
SHARES

830,999,449

Vesting of performance rights
Transfer from SBP1 reserve to equity

Balance

51,277

$0.0000

–

831,050,726

Vesting of performance rights

19,618

$0.0000

Transfer from SBP reserve to equity

Balance

–

831,070,344

95,444

–

248

95,692

–

95,772

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.

F. RESERVES

At 1 August 2016

Transfer to net profit – gross

Transfer to net profit – deferred tax

Currency translation – subsidiary

Revaluation – gross

Revaluation – deferred tax

Other comprehensive income

Transactions with owners in their
capacity as owners

NOTES

CAPITAL
PROFITS
$000

1,343

–

AVAILABLE
FOR SALE
ASSETS
$000

–

644

–

REVALUA-
TION
$000

27,412

–

HEDGING
$000

1,548

(9,148)

2,744

–

25,013

(7,504)

1,343

644

27,412

12,653

266

Share based payment expense

Transfer to contributed equity

19(d)

–

At 31 July 2017

1,343

644

27,412

12,653

309

(80)

495

At 1 August 2015

1,343

(355)

27,412

(16,201)

391

SHARE-
BASED
PAYMENT
$000

PREMIUM
PAID
ON NCI2
$000

FCTR1
$000

TOTAL
$000

266

(187)

(6,029)

24,353

–

187

–

(258)

–

(9,148)

2,744

187

25,657

(7,504)

(6,029)

36,289

–

309

(80)

(6,029)

36,518

(6,029)

6,632

–

22,203

(6,554)

(258)

3,507

(1,052)

391

(187)

(6,029)

24,478

–

27,412

21,848

(6,554)

–

3,507

(1,052)

1,548

–

27,412

1,548

123

(248)

266

–

123

(248)

(187)

(6,029)

24,353

Transfer to net profit – gross

Transfer to net profit – deferred tax

Currency translation – subsidiary

Revaluation – gross

Revaluation – deferred tax

Other comprehensive income

Transactions with owners in their
capacity as owners

Share based payment expense

Transfer to contributed equity

19(d)

At 31 July 2016

1 FCTR – Foreign currency translation reserve.

2 NCI – Non controlling interest.

–

1,343

–

1,343

355

–

Notes to the Financial Statementsfor the year ended 31 July 2017NATURE 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. Amounts are recognised
in the Statement of Comprehensive Income 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 QBH
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 17. Amounts are recognised in the Statement of Comprehensive Income when the associated hedged
transaction affects the 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. Fair values
at grant date are independently determined using the Black-Scholes options pricing model that takes into account the exercise price ,
the term of the option, the impact of dilution, the share price at grant date and expected volatility of the underlying share, the expected
dividend yield and risk free interest rate for the term of the option.

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.

Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income as described in
note 31 and accumulated in a separate reserve within equity. The cumulative amount is reclassified to the Statement of Comprehensive
Income when the net investment is disposed of.

G. RETAINED PROFITS

Carrying amount at beginning of year

Net profit/(loss) after income tax

Dividends paid

Carrying amount at end of year

NOTES

18(a)

2017
$000

2016
$000

1,630,362

1,750,525

140,620

(49,864)

(53,679)

(66,484)

1,721,118

1,630,362

ACCOUNTING POLICY
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:

AVAILABLE
FOR SALE
$000

HEDGING
DERIVATIVES
$000

AMORTISED
COST
$000

TOTAL
$000

–

1,977

–

1,977

–

3,364

–

3,364

–

18,075

–

2,313

236,885

67,400

–

236,885

67,400

1,977

18,075

304,285

324,337

91,162

78,607

–

91,162

78,607

3,364

2,313

169,769

175,446

–

12,588

65,289

77,877

14,860

64,604

79,464

12,588

65,289

77,877

14,860

64,604

79,464

Financial assets

2017

Cash and cash equivalents

Trade and other receivables

Available for sale financial assets

Derivative financial instruments

2016

Cash and cash equivalents

Trade and other receivables

Available for sale financial assets

Derivative financial instruments

Financial liabilities

2017

Lease liabilities

Trade and other payables

2016

Lease liabilities

Trade and other payables

Notes to the Financial Statementsfor the year ended 31 July 2017A. 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 forward currency contracts. Contracts are designated as cash flow hedges. Foreign exchange contracts are designated
at Group level as hedges of foreign exchange risk on specific future transactions.

The Group’s risk management policy is to hedge up to 65% of anticipated transactions (export coal sales) in USD 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

2017
$000

90,848

26,521

162,000

538

2016
$000

9,135

13,501

20,000

389

Group sensitivity
Based on the trade receivables, cash and trade payables held at 31 July 2017, 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 $11,377,000/($9,309,000) (2016 – $2,300,000/($1,882,000)), 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 2017, 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 $22,493,000/($18,400,000)
(2016 – $2,961,000/($2,419,000)). There is no effect on post-tax profits.

(II) PRICE RISK
The Group is exposed to equity securities price risk arising from certain investments held by the Group and classified on the Balance Sheet
as available for sale.

The majority of the Group’s equity investments are publicly traded. The table below summarises the impact of increases/decreases in the
financial instrument on the Group’s equity as at balance date. The analysis is based on the assumption that the equity instrument had
increased/decreased by 10% with all other variables held constant.

Index

All Ordinaries – 10% increase

All Ordinaries – 10% decrease

IMPACT ON POST-TAX PROFIT

IMPACT ON EQUITY

2017
$000

–

2016
$000

–

2017
$000

175

(175)

2016
$000

306

(306)

The price risk for unlisted securities is immaterial in terms of the possible impact on total equity. It has therefore not been included in the
sensitivity analysis.

(III) FAIR VALUE INTEREST RATE RISK
Refer to (e) below.

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 23). 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 information about
counterparty default rates. The table below summarises the assets which are subject to credit risk:

Trade receivables

Cash at bank and short term bank deposits

Derivative financial instruments

2017
$000

67,400

236,885

18,075

2016
$000

78,607

91,162

2,313

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.

FINANCING ARRANGEMENTS
The Group’s only significant external borrowings relate to finance leases detailed in note 16. The maturity of these finance leases are
shown in (d) below.

D. MATURITY OF FINANCIAL LIABILITIES
The maturity groupings of derivative financial instruments are detailed in note 17.

Trade and other payables (note 8) are normally settled within 45 days of recognition. The Group’s borrowings (note 16) comprise finance
leases payable over a period of four to five years. The finance lease are fixed rate leases with a weighted average interest rate of 3.57%.
The table below details the contractual maturities of finance lease liabilities:

0 TO 6 MONTHS
$000

6 TO 12 MONTHS
$000

1 TO 2 YEARS
$000

2 TO 5 YEARS
$000

TOTAL
$000

CARRYING
AMOUNT
$000

Finance leases

1,384

1,383

2,767

8,109

13,643

12,588

E. CASH FLOW AND FAIR VALUE INTEREST RATE RISK
The Group may, from time to time, have 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.

There were no deposits held at balance date.

Notes to the Financial Statementsfor the year ended 31 July 2017F. FAIR VALUE MEASUREMENTS

ACCOUNTING POLICY – 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 balance 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 assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes.

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

a. Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices)
or indirectly (derived from prices) (level 2); and

Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

The following table presents the Group’s assets measured and recognised at fair value as at 31 July 2017 and 31 July 2016.

2017

Assets

Derivatives used for hedging

Available for sale financial assets

Equity securities

Total assets

2016

Assets

Derivatives used for hedging

Available for sale financial assets

Equity securities

Total assets

LEVEL 1
$000

LEVEL 2
$000

LEVEL 3
$000

TOTAL
$000

–

18,075

1,977

–

18,075

–

2,313

3,364

–

2,313

–

18,075

1,977

20,052

2,313

3,364

5,677

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.

ACCOUNTING POLICY
The acquisition method of accounting is used to account for all business combinations regardless of whether equity instruments
or assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets
transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the
fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred.

Identifiable assets acquired, and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions,
measured at fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling
interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net
identifiable assets.

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

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to 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 liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.

A. SUMMARY OF ACQUISITION – JOINT OPERATION
On 1 March 2016, New Hope Corporation Limited’s wholly owned subsidiary, New Hope Bengalla Pty Ltd, acquired 40% of the assets and
liabilities of the Bengalla Joint Venture. The Bengalla Joint Venture is a coal mining and extraction operation producing thermal coal in the
Hunter Valley, New South Wales.

Details of the purchase consideration and the net assets acquired are as follows:

Purchase Consideration (refer B below)

Cash Paid – Current Year

Purchase price adjustment receivable

Total Purchase Consideration

The fair value of assets and liabilities recognised as a result of the acquisition are as follows:

Cash

Receivables

Inventories

Property, plant and equipment

Intangibles

Accounts payable and accruals

Provisions

Net assets acquired

B. PURCHASE CONSIDERATION

Outflow of cash to acquire subsidiary, net of cash acquired

Total cash consideration

Less: Balances acquired

Cash

Outflow of cash – investing activities

NOTES

2016
$000

850,796

(1,668)

849,128

4,748

15,079

12,464

829,532

41,500

(18,386)

(35,809)

849,128

NOTES

2016
$000

850,796

(4,748)

846,048

Notes to the Financial Statementsfor the year ended 31 July 2017It is noted that incidental costs of acquisition have been incurred of $51,863,000 (stamp duty $44,738,000, financial advice $6,388,000
and other costs of $737,000) and these cashflows are recognised as outflows from operating activities.

C. SUMMARY OF ACQUISITION – OIL PRODUCING ASSET BUSINESS
During the year ended 31 July 2017, the Group acquired a business constituting the Kenmore Bodalla oil producing and exploration fields.
This transaction constitutes a business combination. The Group acquired 100% of the interests in the Kenmore (PL32), Bodalla South
(PL 31) and Blackstump (PL 47) oil producing assets. The acquisition also included two joint ventures: ATP 269 (Coolum/Byrock) Joint
Venture (93.21%) and ATP 269 (Glenvale/Bargie) Joint Venture (93.9%).

The acquisition resulted in a cash outflow of $800,000 for the acquisition of oil producing assets of $13.3 million and the assumption
of rehabilitation related provisions of $12.5 million. There were $248,000 of acquisition costs expensed in relation to this acquisition
during the current year.

SIGNIFICANT JUDGEMENT AND ESTIMATE – ACQUISITION FAIR VALUE
The determination of the fair values of net identifiable assets acquired, and of any goodwill, involves significant judgement.
The allocation of fair value between intangible assets, and the tangible assets with which they are used, is also judgemental.
The Group engages third-party valuers to advise on the purchase price allocation for significant acquisitions.

22. INTERESTS IN OTHER ENTITIES

A. SUBSIDIARIES
Significant subsidiaries include New Hope Bengalla Pty Ltd, Bridgeport Energy Limited and NEC as well as companies identified in the Deed
of Cross Guarantee in note 29.

B. JOINT ARRANGEMENTS

ACCOUNTING POLICY
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.

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.

JOINT VENTURES
Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the consolidated Balance
Sheet.

(i) Bengalla Joint Venture
On 1 March 2016, a subsidiary of New Hope Corporation Limited acquired a 40% interest in the Bengalla thermal coal mine in New South
Wales. This joint operation is managed by BMC. BMC is owned proportionately by the Bengalla Joint Venture participants.

(ii) Lenton Joint Venture
A subsidiary of New Hope Corporation Limited has entered into a joint operation to develop the Lenton project. The subsidiary has a 90%
participating interest in this joint operation and is entitled to 90% of the output of the Lenton project. The Group’s interests employed
in the joint operations are included in the Balance Sheet, in accordance with the accounting policy described above.

(iii) Yamala Joint Venture
A subsidiary of New Hope Corporation Limited has entered into a joint operation to develop the Lenton project. The subsidiary has an 70%
participating interest in this joint operation and is entitled to 70% of the output of the Yamala project. The Group’s interests employed
in the joint operations are included in the Balance Sheet, in accordance with the accounting policy described above.

(iv) Cuisinier Joint Venture
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 and Wompi projects which undertake oil
exploration on ATP752. 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 above.

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWNotes to the Financial Statementsfor the year ended 31 July 2017New Hope Corporation Limited and Controlled Entities | 2017 Annual ReportCRITICAL JUDGEMENT – CLASSIFICATION OF JOINT ARRANGEMENTS AS A JOINT OPERATION
The Group assesses whether it has the power to direct the relevant activities of the investee by considering the rights it holds with
respect to the work programme and budget approval, investment decision approval, voting rights in joint operating committees and
changes to joint arrangement participant holdings. Where the Group has control, judgement is also required to assess whether the
arrangement is a joint operation or a joint venture.

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

2017
$000

2016
$000

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 stage 1
of the Wiggins Island Coal Export Terminal expansion project and expansion of rail facilities.

The Company's share of security provided by the bankers of the Benalla Joint Venture in respect
of bank guarantees provided to rail and port suppliers.

15,670

14,249

12,194

12,494

6,786

6,636

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

Lines of credit

Unrestricted access was available at balance date to the following lines of credit:

Guarantee facility – available

Guarantee facility – utilised

Unused at balance date

The parent entity has given unsecured guarantees in respect of:

Mining restoration and rehabilitation

The liability has been recognised by the Group in relation to its rehabilitation obligations.

Statutory body suppliers and financiers

140,000

139,225

775

135,000

118,411

16,589

111,360

91,667

34,651

33,380

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

Notes to the Financial Statementsfor the year ended 31 July 201724. 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

2017
$000

2016
$000

15,716

14,709

B. LEASE COMMITMENTS: GROUP AS LESSEE

NON-CANCELLABLE OPERATING LEASES
The Group leases port facilities and has a share in commitments for minimum lease payments relating to property, plant and equipment
under non-cancellable operating leases expiring within five to ten years. The leases have varying terms, escalation clauses and renewal
rights. On renewal, the terms of the leases are renegotiated. The Group also leases office space and small items of office equipment under
operating leases.

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

2017
$000

2016
$000

11,848

23,810

30,911

66,569

10,387

27,501

37,166

75,054

C. TAKE OR PAY COMMITMENTS
The Group has purchase obligations in relation to take or pay agreements which are legally binding and enforceable with rail, water
and port service providers in respect of operating sites. The Group is meeting all financial commitments associated with a take or pay
agreement with WICET despite not currently shipping coal through the terminal.

25. EVENTS OCCURRING AFTER THE REPORTING PERIOD
On 6 September 2017, New Hope Corporation Limited, through its interest in the Lenton Joint Venture, has entered into a conditional
agreement to acquire certain assets of the Burton mine in central Queensland. The Burton mine is adjacent to the Lenton project.
The purchase will include $14 million cash consideration and the assumption of a rehabilitation liability associated with the assets
to be acquired which include four mining tenements and related site infrastructure. The transaction is conditional on a number
of regulatory and other requirements with completion expected to take place early 2018.

Acquisition costs of $545,000 relating to this purchase have been capitalised as property, plant and equipment in the year ended
31 July 2017.

A. PARENT ENTITIES
The parent entity within the Group is New Hope Corporation Limited. The ultimate Australian parent entity and controlling entity is WHSP,
which at 31 July 2017 owned 59.65% (2016 – 59.65%) of the issued ordinary shares of New Hope Corporation Limited.

B. TRANSACTIONS WITH RELATED PARTIES

Reimbursement of travel related expenses paid to Australian controlling entity

Dividends paid to ultimate Australian controlling entity

2017
$

875

2016
$

3,098

29,741,785

39,655,713

C. OUTSTANDING BALANCES ARISING FROM SALES/PURCHASES OF GOODS AND SERVICES
No provision for impairment of receivables has been raised to any outstanding balances and no impairment expense has been recognised
in the books of the parent entity in respect of amounts owing from subsidiaries.

D. TERMS AND CONDITIONS
Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.

E. KEY MANAGEMENT PERSONNEL

(I) DIRECTORS
The following persons were Directors of New Hope Corporation Limited during the financial year:

Chairman – Non-executive

Mr R.D. Millner

Non-executive Directors

Mr T.J Barlow

Mr W.H. Grant

Mr T.C. Millner

Ms S.J. Palmer

Mr I.M. Williams

Executive Directors

Mr S.O. Stephan

(II) OTHER KEY MANAGEMENT PERSONNEL
The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, directly
or indirectly, during the financial year:

NAME

Mr S.O. Stephan

Mr A.L Boyd

Mr M.J. Busch

POSITION

EMPLOYER

Managing Director

New Hope Corporation Limited

Chief Operating Officer

New Hope Corporation Limited

Chief Financial Officer

New Hope Corporation Limited

Notes to the Financial Statementsfor the year ended 31 July 2017(III) KEY MANAGEMENT PERSONNEL COMPENSATION

Short-term employee benefits

Long-term employee benefits

Post employment benefits

Termination benefit

Share based payment

2017
$000

2016
$000

3,582,049

3,552,534

42,820

146,488

–

307,810

54,325

147,962

136,316

123,250

4,079,167

4,014,387

Detailed remuneration disclosures can be found in sections (A) to (J) of the Remuneration Report on pages 33 to 38.

F. OTHER TRANSACTIONS OF KEY MANAGEMENT PERSONNEL
Mr R.D. Millner, Mr T.C. Millner and T.J. Barlow are Directors of WHSP, the ultimate parent entity 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
2016 financial year. All transactions were on normal commercial terms.

Aggregate amounts of each of the above types of transactions with the above were as follows:

Financial advice

2017
$000

2016
$000

–

6,488,295

Directors are required to take all reasonable steps to manage actual, potential or perceived conflicts of interest. Directors are required
to consider and notify the Company of any potential or actual conflicts of interest and Related Party transactions. Directors do not
participate in any negotiations of transactions with related parties.

G. LOANS TO KEY MANAGEMENT PERSONNEL
No loans have been made available to the key management personnel of the Group.

ACCOUNTING POLICY
Share based compensation benefits are provided to employees via the New Hope Corporation Limited Employee Share Option Plan
and the Rights Plan.

The fair value of options granted under the New Hope Corporation Limited Employee Share Option Plan and Rights granted under
the Rights Plan are 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. Rights vest
at the nominated vesting date upon successful completion of applicable service and performance conditions. Detailed vesting
conditions are set out in the Directors’ Report.

The fair value of the rights is determined based on the market price of shares at the grant date, with an adjustment made to
take into account the vesting period, expected dividends during that period that will not be received by the participants and the
probability that the performance conditions will be met. The fair value of options at grant date is independently determined using a
Black Scholes 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.

Rights are granted under the Rights Plan. Membership of the 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 are granted for no consideration. Rights will vest and automatically convert to ordinary shares in the Company following the
satisfaction of the relevant service and performance conditions. Service and performance conditions applicable to each issue of rights are
determined by the Directors at the time of grant. Total expense arising from rights issued under the Rights Plan during the financial year
was $309,000 (2016 – $123,000).

Rights
Set out below are the summaries of rights granted under the plan:

As at 1 August

Granted during the year

Forfeited during the year

Vested during the year

As at 31 July

2017

2016

AVERAGE PRICE
PER SHARE

NUMBER OF
RIGHTS

AVERAGE PRICE
PER SHARE

NUMBER OF
RIGHTS

$2.112

$1.635

–

$1.540

$1.885

484,795

468,247

–

(19,618)

933,424

$2.696

$2.084

$1.875

$4.782

$2.112

216,334

414,841

(95,103)

(51,277)

484,795

The weighted average share price at the date of vesting of rights during the 2017 year was $1.60 (2016 – $1.91).

Share rights outstanding at the end of the year have the following expiry date and fair value at grant date:

GRANT DATE

17 Dec 2012

12 Dec 2014

20 Nov 2015

22 Dec 2016

Total

Weighted average remaining contractual life of rights outstanding at
end of period

VESTING DATE

VALUE OF RIGHT
AT GRANT DATE

1 Aug 2016

1 Aug 2017

1 Aug 2018

1 Aug 2019

$4.080

$1.581

$0.956

$1.083

$0.804

SHARE RIGHTS

2017

–

50,336

134,228

280,613

468,247

933,424

2016

19,618

50,336

134,228

280,613

–

484,795

1.3 years

1.5 years

Notes to the Financial Statementsfor the year ended 31 July 201728. PARENT ENTITY FINANCIAL INFORMATION

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

INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
Investments in subsidiaries, associates 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.

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/(loss) for the year

Total comprehensive income/(loss)

B. GUARANTEES ENTERED INTO BY PARENT ENTITY

Bank guarantees issued in relation to rehabilitation and utility obligations

2017
$000

2016
$000

405,674

1,173,107

1,578,781

172,305

1,388,053

1,560,358

345,814

2,637

348,451

282,443

1,700

284,143

95,772

95,692

495

1,134,062

1,230,329

266

1,180,257

1,276,215

3,670

(69,378)

3,670

(69,378)

146,011

125,047

The parent entity has given unsecured guarantees in respect of mining restoration and rehabilitation. The liability has been recognised
in the consolidated accounts of the parent entity in relation to its rehabilitation obligations however are not recognised in the parent
entity Balance Sheet. See notes 13 and 23.

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:

2017
$000

2016
$000

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 stage 1
of the Wiggins Island Coal Export Terminal expansion project and expansion of rail facilities.

The Company's share of security provided by the bankers of the Benalla Joint Venture in respect of
bank guarantees provided to rail and port suppliers.

127,030

105,916

12,194

12,494

6,786

6,636

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

D. CONTRACTUAL COMMITMENTS FOR THE ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT
As at 31 July 2017, the parent entity had contractual commitments for the acquisition of property, plant or equipment totalling nil
(2016 – nil).

29. DEED OF CROSS GUARANTEE
A number of entities within the Group have entered into a deed of cross guarantee. New Hope Corporation Limited, Jeebropilly Collieries
Pty Ltd, Acland Pastoral, New Oakleigh Coal Pty Ltd, New Acland Coal Pty Ltd, New Lenton Coal Pty Ltd, Andrew Wright Holdings Pty
Ltd, Arkdale Pty Ltd and QBH 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 ASIC.

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 2017 for the closed group:

Revenue from operations

Other income

Expenses

Cost of sales

Marketing and transportation

Administration

Debt forgiveness

Other expenses

Profit/(loss) before income tax

Income tax expense

Profit/(loss) 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/(loss) for the year

2017
$000

504,053

21,972

526,025

(274,961)

(126,806)

(7,569)

(2,509)

114,180

(34,744)

79,436

2016
$000

443,784

164

443,948

(283,149)

(131,302)

(6,118)

(97,862)

(6,377)

(80,860)

(5,022)

(85,882)

(4,031)

9,625

5,594

85,030

2,455

15,294

17,749

(68,133)

Notes to the Financial Statementsfor the year ended 31 July 2017B. CONSOLIDATED BALANCE SHEET
Set out below is a consolidated Balance Sheet as at 31 July 2017 of the closed group:

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Derivative financial instruments

Current tax assets

Total current assets

Non-current assets

Receivables

Other financial assets

Property, plant and equipment

Intangible assets

Exploration and evaluation assets

Deferred tax assets

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Lease liabilities

Current tax liabilities

Provisions

Total current liabilities

Non-current liabilities

Lease liabilities

Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Contributed equity

Reserves

Retained earnings

Total equity

2017
$000

2016
$000

215,492

153,326

48,587

10,200

11,598

58,737

138,142

43,843

1,029

439,203

241,751

906,009

248,506

391,345

7,726

55,473

3,777

1,104,999

248,506

399,570

6,510

50,766

15,393

1,612,836

2,052,039

1,825,744

2,067,495

59,977

2,356

39,279

101,612

10,232

47,992

58,224

93,778

2,272

18,203

40,295

154,548

12,588

44,498

57,086

159,836

211,634

1,892,203

1,855,861

91,676

44,105

1,756,422

1,892,203

91,596

37,457

1,726,808

1,855,861

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWNotes to the Financial Statementsfor the year ended 31 July 2017New Hope Corporation Limited and Controlled Entities | 2017 Annual Report30. REMUNERATION OF AUDITORS
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and
non-related audit firms:

A. AUDIT SERVICES

Audit and review of financial reports and other audit work under the Corporations Act 2001:

Deloitte Touche Tohmatsu (Australian firm)

Total remuneration for audit services

B. OTHER SERVICES

Deloitte Touche Tohmatsu (Australian firm)

Audit of joint ventures

Accounting advisory services

Ernst & Young (2016: PricewaterhouseCoopers) (Australian firm)

Audit of joint ventures

Total remuneration for other services

Total auditors' remuneration

31. OTHER ACCOUNTING POLICIES

A. FOREIGN CURRENCY TRANSLATION

2017
$000

2016
$000

371,500

433,000

24,000

–

42,000

66,000

437,500

24,000

33,000

18,000

75,000

508,000

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.

TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets
and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. They are
deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the
net investment in a foreign operation.

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.

GROUP COMPANIES
The results and financial position of all of foreign operations (none of which has the currency of a hyper-inflationary economy)
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 rate at the date of that Balance Sheet;

Income and expenses for each 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 investment in foreign entities, and of borrowings
and other financial instruments designated as hedges of such investments, are recognised in other comprehensive income. When
a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences
are reclassified to the Statement of Comprehensive Income, as part of the gain or loss on sale.

B. GOODS AND SERVICES TAX
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.

Notes to the Financial Statementsfor the year ended 31 July 2017Receivables 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.

C. BORROWINGS
Borrowings are initially recognised at fair value, net of any transactions costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
the Statement of Comprehensive Income over the term of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all
of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence
that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services
and amortised over the term of the facility to which it relates.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for
at least 12 months after the balance date.

BORROWING COSTS
Borrowing costs incurred for the construction of a qualifying asset are capitalised. Qualifying assets are assets that necessarily take
a substantial period of time to get ready for their intended use or sale. Other borrowing costs are recognised as expenses in the
period in which they are incurred.

D. NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP
A number of new and revised standards became effective for the first time to annual periods beginning on or after 1 August 2016. None
of these had a significant effect on the Group.

E. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
Certain new accounting standards and interpretations have been published that are not mandatory for 31 July 2017 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) AASB 15 Revenue from Contracts with Customers – AASB 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 AASB 118 Revenues,
AASB 111 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 undertaken a preliminary assessment of the new standard and does
not consider its revenue recognition will be significantly affected. 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 2019.

(ii) AASB 9 Financial Instruments – 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 completed a preliminary assessment and considers there will be minimal impact on its own
hedging arrangements however a detailed review of the new rules is pending. 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 2019.

(iii) AASB 16 Leases – replaces AASB 117 Leases and some lease-related Interpretations and requires that all leases to be accounted
for ‘on-balance sheet’ by lessees, other than short-term and low value asset leases. The standard provides new guidance on
the application of the definition of lease and on sale and lease back accounting. It largely retains the existing lessor accounting
requirements in AASB 117. It requires new and different disclosures about leases. The Group is yet to undertake a detailed assessment
of the impact of AASB 16 owing to the fact that the AASB will be first reported on at 31 July 2020.

(iv) IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses – The amendments provide clarification with respect to recognition

of particular types of deductible temporary differences and appropriate assumptions regarding future recoverable amounts with respect
to assets in making the assessment of recoverability. The amendments are effective for the annual reporting period ending 31 July 2018
however will not have a significant impact on the Group as the clarifications align with the approach currently adopted by the Group.

(v) IFRS 2 Classification and Measurement of Share-based Payment Transactions – The amendments provide clarification with respect

to accounting for cash-settled share based payment arrangements and withholding tax arrangements. The amendments are effective
for the annual reporting period ending 31 July 2019 however will not have a significant impact on the Group as it does not have share
based payments of this nature.

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.

a. the financial statements and notes set out on pages 42 to 91 are in accordance with the Corporations Act 2001, including:

(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting

requirements; and

(ii) giving a true and fair view of the consolidated entity’s financial position as at 31 July 2017 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

The Basis of preparation on page 47 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.

At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The nature of the
deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor payment in full of any debt
in accordance with the deed of cross guarantee. In the Directors’ opinion, there are reasonable grounds to believe that the Company and
the companies to which the ASIC Class Order applies, as detailed in note 29 to the financial statements will, as a group, be able to meet
any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee.

This declaration is made in accordance with a resolution of the Directors.

R.D. Millner
Director

Sydney
18 September 2017

S.J. Palmer
Director

Directors’ DeclarationDeloitte Touche Tohmatsu
ABN 74 490 121 060

Riverside Centre
Level 25
123 Eagle Street
Brisbane QLD 4000
GPO Box 1463
Brisbane QLD 4001 Australia

DX 115
Tel: +61 (0) 7 3308 7000
Fax: +61 (0) 7 3308 7001
www.deloitte.com.au

Independent Auditor’s Report
to the members of New Hope Corporation Limited

Report on the Audit of the Financial Report

We have audited the financial report of New Hope Corporation Limited (the “Company”) and its subsidiaries (the
the consolidated statement of
“Group”) which comprises the consolidated balance sheet as at 31 July 2017,
comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for
the year then ended, and notes to the financial statements, including a summary of significant accounting policies and
other explanatory information, and the directors’ declaration.

Opinion
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 ,
including:

(i) giving a true and fair view of the Group’s financial position as at 31 July 2017 and of its financial performance for
the year then ended; and

(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis of Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report for the current period. These matters were addressed in the context of our audit of the financial report
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWIndependent Auditor’s Reportto the Members of New Hope Corporation LimitedNew Hope Corporation Limited and Controlled Entities | 2017 Annual ReportKey Audit Matter

Carrying value of non-current assets

(refer notes 10, 11 and 12)

As at 30 July 2017 the Group has property, plant and
equipment of $1,325 million, exploration and
evaluation assets of $393 million and goodwill of $18
million which have been allocated across the Group’s
cash generating units (“CGUs”) and areas of interest.

All CGUs containing goodwill must be tested for
impairment on an annual basis. The determination of
the recoverable amount of assets, being the higher of
value-in-use and fair value less costs to dispose, also
requires judgement on the part of management in
both identifying and then valuing the relevant CGUs.

Recoverable amounts are assessed using either
discounted cash flow or commodity resource multiple
valuation techniques. These assessments are
dependent upon management’s view of key variables
and market conditions including future commodity
prices, the timing and approval of mining leases,
future capital and operating expenditure, appropriate
discount rates and comparable observable market
transactions.

As disclosed in note 10 to the financial statements, a
specific area of management judgement during the
year has been their assessment of the impact of the
changes to the legal environment and timelines
surrounding the New Acland Stage 3 mine lease
application on the recoverability of assets associated
with the New Acland project.

As well as considering indicators of impairment,
management must determine whether any indicators
of reversal of previous impairments are apparent for
assets other than goodwill.

How the scope of our audit responded to the Key
Audit Matter

Our procedures included, but were not limited to:



evaluating management’s assessment of impairment
indicators, as well as indicators of impairment
reversal, including the conclusions reached;

engaging our valuation specialists to assist with
assessing the reasonableness of management’s key
market related assumptions including future
commodity prices, foreign exchange rate forecasts,
discount rates and comparable transaction multiples.
This included benchmarking against external data;

evaluating that commodity resource multiples were
determined with reference to appropriate
comparable transactions taking into account the
timing of those transactions, subsequent market
changes, and the type of assets, their location, and
their proximity to infrastructure;

assessing the Group’s progress with obtaining
relevant mining leases, and, in relation to the
Group’s mining lease application for New Acland
Stage 3, evaluating management’s assessment of
the impact of the changes to the project’s legal
environment and timelines including:

obtaining an understanding of the potential
legal implications and outcomes of the
Queensland Land Court recommendation dated
31 May 2017 and the ongoing judicial review
process subsequently initiated by the Group;
assessing the Group’s sensitivity and scenario
analyses to determine whether the conclusions
are reasonable and supportable given the
status of the overall mine lease application
process and the Group’s legal advice;
evaluating the key assumptions within
management’s modelling for reasonableness
compared to historical actual performance and
market benchmarks including in relation to
prices, foreign exchange rates, production costs
and growth rates; and
verifying the mathematical accuracy of
management’s modelling.



assessing the appropriateness of the disclosures in
note 10, 11 and 12 to the financial statements.

Rehabilitation provision

Our procedures included, but were not limited to:

(refer note 13)

As at 30 July 2017 the Group has provisions for mining
restoration and rehabilitation of $108 million.

Management judgement is required in estimating the
quantum and timing of future costs, particularly given
the unique nature of each site, the long timescales
involved and the potential associated obligations. This
also requires management to determine an
appropriate rate to discount these future costs back to
their net present value.



evaluating the independence, competence and
objectivity of managements expert and
challenging the reasonableness of the
assumptions used to produce the cost estimates
prepared by management by verifying against
actual costs incurred;

validating the assumptions used to calculate the
discount rates and recalculating these rates;

confirming the existence of legal and/or
constructive obligations with respect to the
restoration and rehabilitation for each site;

assessing the appropriateness of the intended
method of restoration and rehabilitation and
associated cost estimate for each site; and

assessing the appropriateness of the disclosures
in note 13 to the financial statements.

Independent Auditor’s Reportto the Members of New Hope Corporation LimitedOther Information
The directors are responsible for the other information. The other information comprises the Financial Summary,
Directors’ Report and Shareholder Information which we obtained prior to the date of this auditor’s report, and also
includes the following information which will be included in the Group’s annual report (but does not include the
financial report and our auditor’s report thereon): Chairman’s Review, which is expected to be made available to us
after that date.

Our opinion on the financial report does not cover the other information and we do not and will not express any
form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we
have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.

When we read the Chairman’s Review, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the directors and use our professional judgement to determine the
appropriate action.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.

Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Group to cease to continue as a going concern.

•

Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.

Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 33 to 38 of the Directors’ report for the year ended 31
July 2017.

In our opinion the Remuneration Report of New Hope Corporation Limited for the year ended 31 July 2017,
complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

DELOITTE TOUCHE TOHMATSU

Richard Wanstall

Partner

Chartered Accountants

Sydney, 18 September 2017

Independent Auditor’s Reportto the Members of New Hope Corporation LimitedTERM

AASB

MEANING

Australian Auditing Standards Board

Acland Pastoral

Acland Pastoral Company Pty Ltd

ASIC

ASX

AUD

Australian Securities and Investment Commission

Australian Securities Exchange

Australian Dollar

Australian controlling entity Washington H. Soul Pattinson and Company Limited

ATP

AWL

bbl

BMC

bopd

bopm

Authority to Prospect

Associated Water Licence

Barrel – unit of volume for crude oil and petroleum products

Bengalla Mining Company Pty Ltd

Barrels of oil per day

Barrels of oil per month

Bridgeport

Bridgeport Energy Group

CEO

CFO

CGU

CODM

Company

Chief Executive Officer

Chief Financial Officer

Cash Generating Unit

Chief Operating Decision Maker

New Hope Corporation Limited

Consolidated entity

New Hope Corporation Limited and controlled entities

COO

Chief Operating Officer

Corporation

New Hope Corporation Limited

DEHP

DPM

EBITDA

EIS

EMS

EPC

EPM

FCTR

GKBA

Group

GST

HELE

IASB

IFRS

JORC

Department of Environment and Heritage Protection

Diesel Particulate Matter

Environmental Authority

Earnings Before Interest, Tax, Depreciation and Amortisation

Environmental Impact Statement

Environmental Management System

Exploration Permit – Coal

Exploration Permit – Mineral

Foreign Currency Translation Resource

Greater Kenmore and Bodalla Area

New Hope Corporation Limited and controlled entities

Goods and Services Tax

hectares

High Efficiency Low Emission

International Accounting Standards Board

International Financial Reporting Standards

Joint Ore Resources Committee

JORC Code

Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWGlossaryNew Hope Corporation Limited and Controlled Entities | 2017 Annual ReportTERM

KMP

KPI

LTI

LTIs

MACH

MDL

MLA

Mtpa

NAC03

NCI

NEC

MEANING

Key Management Personnel

Key Performance Indicators

Lost Time Injury

Long Term Incentives

million

MACH Energy Australia Pty Ltd

Managing Director

Mining Development Lease

Mining Lease

Mining Lease Application

million tonnes

Million tonnes per annum

New Acland Stage 3 Development

Non Controlling Interest

Northern Energy Corporation Ltd

New Hope

New Hope Corporation Limited

NHCL

NPAT

OCI

New Hope Corporation Limited

Net Profit After Tax

Other Comprehensive Income

parent entity

New Hope Corporation Limited

Potential Commercial Area

Petroleum Exploration Licence

Petroleum Facility Licence

Petroleum Lease

Port of Brisbane

Petroleum Resources Rent Tax

Queensland Bulk Handling

Queensland Competition Authority

Registered Professional Engineers of Queensland

Science, Technology, Engineering and Mathematics

Short Term Incentives

Tax Funding Agreements

Total Recordable Injury Frequency Rate

Tax Sharing Agreements

Total Shareholder Return

United States Dollar

Weighted Average Cost of Capital

Wiggins Island Coal Export Terminal

PCA

PEL

PFL

POB

PRRT

QBH

QCA

RPEQ

STEM

STIs

TFA

TRIFR

TSA

TSR

USD

WACC

WICET

GlossaryPROJECT NAME

TENEMENT '

BASIN

DESCRIPTION

Coal

Ashford

EL6234
EL6428

Surat Basin

The Ashford Coal Project is 50% owned by Laneway Resources Ltd
and 50% owned by Northern Energy Corporation Pty Ltd within
an area of the Ashford Coal Measures. It is the only commercial
operation mining the Ashford Seam (‘Ashford Colliery’).

Bee Creek

EPC777

Bowen Basin

Location: Bowen Basin, Queensland; Product: PCI (pulverised coal
injection)/Thermal coal; Exploration Status: Early exploration.

Childers

EPC1265

Maryborough Basin

Churchyard Creek

EPC1876

Bowen Basin

Clarence-West
Moreton Basin

Surat Basin

Chuwar

Collingwood

Colton

ML4659
ML4662
ML4667
ML4668

EPC1322
EPC640
MLA55011
MLA55012
MLA55015
MLA55016

EPC1082
EPC923
ML50273
ML50274
ML50280

EPC 1265 is centred approximately 3 kilometres east of the town
of Childers, Queensland. Taroom Coal Pty Ltd applied for the
tenure in March 2008, which was granted in September 2015,
with the intent to explore for coal. The tenure is located in close
proximity to the New Hope Colton Project.

The Churchyard Creek tenement is located approximately
45 kilometres north of the town of Blackwater in Central
Queensland. The primary focus of New Hope’s exploration
program is to evaluate the economic potential of EPC1876.

The Chuwar leases were operated from 1980 to 1984. In 2013
New Hope Collieries Pty Ltd, following extensive consultation
with the Department of Natural Resources and Mines and the
DEHP, commenced final rehabilitation of the site. A period of
rehabilitation monitoring and maintenance is being undertaken.

The Collingwood Project is located approximately 15 kilometres
north of the township of Wandoan, Queensland. The Group
acquired full ownership of the Collingwood Project in 2015.
The Surat Basin has been identified by New Hope as a strategic
investment opportunity.

Maryborough Basin

Location: Near Maryborough, Queensland; Product: Coking coal;
Mining method: Open cut; Development status: ML applications
approved 3 May 2017.

Culgowie

EPC1205

Surat Basin

EPC1205: Culgowie is located approximately 10 – 15 kilometres
north of the town of Wandoan. The tenure lies in the northern
Surat Basin of South East Queensland. New Hope considers
Culgowie to be a key component of the Elimatta Project for its
proximity to the Leichhardt Highway and the State Development
corridor for the Surat Basin Rail.

Elimatta

EPC1171
EPC1603
EPC650
MLA50254
MLA50270
MLA50271

Surat Basin

The Elimatta Project is located in the Western Downs Regional
Council area in Southern Queensland, approximately 45 kilometres
south-west of Taroom. The Elimatta Project is based on the
development of a thermal coal resource (JORC 2012 compliant)
of the Juandah Formation in the Surat Basin.

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWTenementsNew Hope Corporation Limited and Controlled Entities | 2017 Annual ReportPROJECT NAME

TENEMENT '

BASIN

DESCRIPTION

Inglewood

EPC970

Surat Basin

Jandowae

EPC760

Surat Basin

The town of Millmerran 25 kilometres to the north of EPC970:
Darling Downs. The EPC extends some 10 kilometres west and
50 kilometres south of the town. The primary focus of the Group’s
exploration program is to further evaluate the economic potential
of EPC970.

The tenement lies approximately 30 kilometres northwards
across the township of Jimbour. This tenure continues to be
explored for thermal coal deposits along with the wider Darling
Downs Project area.

Jeebropilly Collieries Pty Ltd owns and operates the Jeebropilly
Mine, which is located near Amberley, in the city of Ipswich in
South East Queensland. Mining has been conducted at Jeebropilly
since the late 1970s and the current project consists of 11 MLs
and one Petroleum Facility Licence (PFL). The project is a thin
seam open cut operation utilising truck and shovel methodology
to extract thermal coal, which is predominantly sold to the export
market. The project went into a care and maintenance period in
2007 and recommenced operations in 2008.

Clarence-West
Moreton Basin

Surat Basin

Location: North-west of Oakey, Queensland; Operations: 2002
to present; Product: Thermal Coal; Mining method: Open cut;
Production: 5.1Mtpa.

Bowen Basin

Location: Bowen Basin, Queensland; Product: Coking/PCI
(pulverised coal injection)/thermal coal; Mining method: Open
cut; Development status: EIS commenced.

Clarence-West
Moreton Basin

New Oakleigh Coal Pty Ltd, a wholly owned subsidiary within
the Group, is the holder of the seven MLs associated with the
New Oakleigh Coal Mine. The mine is located approximately
2 kilometres north west of the town of Rosewood, in south-east
Queensland. Last coal was extracted from the New Oakleigh Coal
Mine in December 2012. Progressive rehabilitation was carried
out during the mining operations and New Oakleigh Coal Pty Ltd
continues to rehabilitate the site.

Surat Basin

The Pittsworth Project is located in the Darling Downs region
of South-east Queensland. The primary focus of New Hope’s
exploration programme is to further evaluate the economic
potential of the Pittsworth Project tenures.

Jeebropilly

New Acland

New Lenton

New Oakleigh

Pittsworth

ML4677
ML4689
ML4690
ML4705
ML4710
ML4711
ML50082
ML50093
ML50132
ML50133
ML7186
PFL17

EPC1136
EPC762
EPC919
MDL244
ML50170
ML50216
MLA50232
MLA700002

EPC1675
EPC766
EPC865
ML70337
MLA70456

ML4568
ML4584
ML4675
ML4683
ML4698
ML4699
ML50175

EPC758
EPC761

100

TenementsPROJECT NAME

TENEMENT '

BASIN

DESCRIPTION

Taroom

MDL158
MDL275
MLA55006

Surat Basin

The Taroom Project and is located 9 kilometres east southeast
of the town of Taroom. The Taroom project is being assessed
as part of a programme of assets including Elimatta, Collingwood
and Woori.

Taroom East

EPC2207

Surat Basin

Woori

MDL187
MLA50274
MLA50248

Surat Basin

Yamala

EPC927
MDL3007

Bowen Basin

EPC2207 is located 13 kilometres south-east of Taroom, and
Taroom is located within the shire of Banana. EPC2207 is part
of the Taroom Project, which is one of four Group projects in the
North Surat Basin area.

The Group acquired full ownership of the North Surat Woori
Project in 2015. The Surat Basin has been identified by New Hope
as a strategic investment opportunity. The Group now holds
a resource of thermal coal through several deposits including
Taroom, Elimatta, Collingwood, and Woori.

The Yamala project is located approximately 35 kilometres east
of Emerald, and 6 kilometres west of the town of Comet. The
Project tenures lie in the central Bowen Basin, Queensland. The
primary focus of New Hope’s program for the Yamala Project is to
further evaluate its economic potential.

Hunter Valley

Location: Whittingham Coal Measures of the Hunter Coalfields;
Product: Thermal coal; Mining method: Open cut; Production
8.35Mtpa.

ML1728
ML1450
ML1729
ML1397
ML1469
ML1711

Bengalla

Minerals

Courtenay

EPM18581
EPM19508

Mount Isa Inlier

Dobi

EPM19863

Mount Isa Inlier

Laura

EPM19342

Laura Basin

Moonamarra

EPM18589

Mount Isa Inlier

The Courtenay tenement is deemed to have the potential to
host Iron Oxide Copper Gold (IOCG) and Broken Hill Type (BHT)
mineralised systems. The primary focus of the Group’s exploration
program is to further evaluate the economic potential of the
Courtenay Project. Further desktop studies will continue to feed
into a geological review.

The Dobi Project tenure is located 85 kilometres north, north-
east of Cloncurry. The primary focus of New Hope’s exploration
program is to further evaluate the economic potential of the
Courtenay Project. Further desktop studies will continue to feed
into a geological review.

The Laura Project tenure is located 50 kilometres north-east
of Laura in North Queensland. Previous exploration activities
have highlighted the potential for BHT zinc-lead-silver deposits.

The Moonamarra region is approximately 100 kilometres
east south-east of Cloncurry in northwest Queensland. The
Moonamarra tenement is known to be prospective for IOCG based
on historical exploration BHT mineralised systems are also a focus
for exploration.

101

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWTenementsNew Hope Corporation Limited and Controlled Entities | 2017 Annual ReportPROJECT NAME

TENEMENT '

BASIN

DESCRIPTION

Oil & Gas

Cuisinier

PL 303

Eromanga

Inland

PL 98

Eromanga

Utopia

PL 214

Eromanga

64 km' total – Bridgeport holds a 15% interest in the Cuisinier field
located on the northern flank of the Cooper Basin. The field is
operated by Santos and is producing net 6,000 barrels of oil per
month (bopm) to Bridgeport.

40 km' total – Bridgeport holds 100% interest and is the
operator of the Inland oil field. The field is currently producing at
4,400bopm.

220 km' total – PL 214 is located southeast of the township
of Eromanga in southwestern Queensland. The field presently
produces at 3,200bopm.

Bodalla South

PL 31

Eromanga

258 ' km' total – Bodalla South is producing at around 5,400bopm.

Kenmore

PL 32

Eromanga

258 ' km' total – Kenmore is producing at 7,000bopm.

Black Stump

PL 47

Eromanga

28' km' total – Black Stump is producing at 700bopm.

Marcoola/Coolum/
Byrock

PLs 482/483/484

Eromanga

30' km' total – These fields are producing at 30bopm.

Maslins

PEL 641

Eromanga

1,954 km total – Expect grant of tenement by end 2017.

Playford

PEL 630

Cooper-Eromanga

Barta

ATP 752

Eromanga

393 km' – This exploration tenement is located on the prospective
Western flank of the Cooper Basin and has potential for both oil
and gas.

626 km – This exploration block (Bridgeport 15%) is adjacent to
the Cuisinier oil field and newly-acquired seismic data will likely
identify some drilling candidates. Santos operates ATP 752.

Wompi

ATP 752

Cooper-Eromanga

474 km2 – Bridgeport holds a 17.5% non-operated interest in the
Wompi Block which is operated by Santos.

Coolum/Byrock

ATP 269

Eromanga

390 km' – This exploration tenement was acquired with the
Kenmore assets.

ATP 736
ATP 737
ATP 738

Cooper-Eromanga

6,400 km' – Bridgeport holds 20% of these exploration permits,
which are operated by Senex. Technical studies are now underway
to assess the oil and gas potential of these tenements that are
located in the northeast sector of the Cooper Basin.

Jackson/Watson

Naccowlah PLs

Eromanga

1,477 km – This production project is operated by Santos.
Bridgeport’s 2% holding netted 900bopm.

Bargie

PL 256

Eromanga

15 km' – Bridgeport holds 93.9% of this shut-in oil field.

Nubba/Yilgarn

PCA 155

Cooper-Eromanga

91 km' – Bridgeport holds 17.5% of this gas project.

Barcoo Block

ATP 2025
ATP 2026

Cooper-Eromanga

310 km'/1,643 km – Bridgeport operates and hold 65% of this
area, which is the subject of a PCA application.

102

TenementsPROJECT NAME

TENEMENT '

BASIN

DESCRIPTION

Barcoo Jcn Block

ATP 2026

Cooper-Eromanga

82 km' – Bridgeport operates and holds 88% of this block, which
is the subject of the PCA application.

Canaway

ATP 948

Cooper-Eromanga

2,007 km' – Technical studies are currently in progress to identify
areas of prospectivity and future work.

Naccowlah Block

ATP 1189

Eromanga

1,065 km' – Bridgeport holds 2% interest in exploration tenement
ATP 1189 that is located in the vicinity of the Jackson production
facility, operated by Santos.

Morney

ATP 2022

Cooper-Eromanga

441 km' – Adjacent to the Inland oil field, ATP 2022 will be granted
to Bridgeport in 2018.

Akama

ATP 2023

Cooper-Eromanga

434 km – This application area (adjacent to the Naccowlah project
area) will be granted to Bridgeport in 2018.

Olba

ATP 2024

Cooper-Eromanga

421 km – This application area (adjacent to the Naccowlah project
area) will be granted to Bridgeport in 2018.

PEP 150

Otway

3,253 km – Beach Energy and Bass Oil & Gas are withdrawing.
Bridgeport is likely to assume operatorship and increase its
interest holding to 50% at no cost.

Arkarua

PEP 151

Otway

Moonie

PL 1 (1)

Surat

864 km' – This exploration permit is located near the town of
Portland in southwest Victoria. No activity during the moratorium
on onshore exploration.

201 km' – PL 1, the first petroleum lease in Queensland, is located
in the eastern Surat Basin of southeast Queensland. The field is
producing at approximately 4,500bopm.

Cabawin

PL 1 (2)
PL 1 FO

Surat

1 km'/54 km'. This Bridgeport-operated oil field (54%) is currently
shut-in, but is being technically assessed for future work and
subsequent production.

Rookwood

ATP 608/PCA 156

Surat

Donga

ATP 805/PCA 161

Surat

229 km' – ATP 608 contains the Rookwood oil field, which
produced oil on extended test from the Boxvale member prior
to being shut-in by the prior operator.

153 km' – ATP 805 contains the Donga oil field, which produced
oil on test from the basal Moolayember Formation prior to being
shut-in by the previous operator.

PL 15

Surat

259 km – Bridgeport holds 25% of this non-producing petroleum
lease, which is operated by AGL Energy Limited.

103

34521OVERVIEWDIRECTORS’ REPORTFINANCIAL REPORTOTHER INFORMATIONBUSINESSREVIEWTenementsNew Hope Corporation Limited and Controlled Entities | 2017 Annual Report

Shareholder Information

As at 12 September 2017 there were 831,070,344 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

1,642

2,299

1,437

1,082

FULLY PAID
ORDINARY
SHARES

837,154

6,817,422

10,133,108

29,700,272

783,582,388

6,552

831,070,344

NUMBER OF
RIGHTS HOLDERS

ORDINARY
RIGHTS

–

748,860

Holding less than a marketable parcel

535

58,937

The names of substantial shareholders as disclosed in substantial shareholder notices received by the Company:

SHAREHOLDER

Washington H. Soul Pattinson and Company Limited

Perpetual Limited and subsidiaries

Mitsubishi Materials Corporation

20 largest shareholders as disclosed on the share register as at 12 September 2017.

SHAREHOLDER

Washington H. Soul Pattinson and Company Limited

Mitsubishi Materials Corporation

HSBC Custody Nominees (Australia) Limited

J P Morgan Nominees Australia Limited

UBS Nominees Pty Ltd

Farjoy Pty Ltd

Domer Mining Co Pty Limited

BKI Investment Company Limited

BNP Paribas Noms Pty Ltd (DRP)

Citicorp Nominees Pty Limited

Taiheiyo Kouhatsu Inc

Brazil Farming Pty Ltd

UBS Nominees Pty Ltd

J S Millner Holdings Pty Limited

National Nominees Limited

Milton Corporation Limited

Dixson Trust Pty Limited

BNP Paribas Nominees Pty Ltd (Agency Lending DRP A/C)

Robert Charles Neale

Mr Mark Harris

UNQUOTED EQUITY SECURITIES

Rights issued under the New Hope Corporation Limited Employee

Performance Rights Share Plan to take up ordinary shares

NUMBER
OF SHARES

495,696,418

104,361,882

91,490,000

NUMBER
OF SHARES

495,696,418

93,240,000

47,322,368

29,524,579

21,039,326

15,500,000

15,000,000

14,815,952

8,938,805

8,377,150

4,054,000

2,675,977

2,434,836

2,109,197

1,544,816

1,290,107

1,225,596

1,013,360

900,000

800,000

59.65%

12.56%

11.01%

59.65%

11.22%

5.69%

3.55%

2.53%

1.87%

1.80%

1.78%

1.08%

1.01%

0.49%

0.32%

0.29%

0.25%

0.19%

0.16%

0.15%

0.12%

0.11%

0.10%

767,502,487

92.36%

NUMBER
ON ISSUE

NUMBER
OF HOLDERS

748,860

104

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