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2020 ANNUAL REPORT
Contents
Operations Review
2020 Snapshot
Chairman’s review
Financial review
Operations overview
Operations review
Tax contribution report
Financial summary
Directors’ Report
Remuneration report
Auditor’s Independence Declaration
Financial Report
Financial Statements
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report to the members of New Hope Corporation Limited
Other Information
Shareholder information
Glossary
Tenements
Directors
Robert D. Millner Chairman of Directors
Todd J. Barlow Non Executive Director
William H. Grant OAM Non Executive Director
Jacqueline E. McGill AO Non Executive Director
Thomas C. Millner Non Executive Director
Ian M. Williams Non Executive Director
Company Officers
Reinhold H. Schmidt Chief Executive Officer
Robert J. Bishop Acting Chief Financial Officer
Janelle S. Moody Company Secretary
Auditors
Deloitte Touche Tohmatsu
Level 23, Riverside Centre
123 Eagle Street
Brisbane QLD 4000
ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS
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Principal Administration
& Registered Office
Level 16, 175 Eagle Street
Brisbane QLD 4000
Telephone: (07) 3418 0500
Facsimile: (07) 3418 0355
Website
www.newhopegroup.com.au
Share Register
Computershare Investor Services Pty Limited
Level 1, 200 Mary Street
Brisbane QLD 4000
Telephone: 1300 552 270
Website: www.computershare.com
ASX CODE: NHC
... New Hope Group is a diverse Australian
energy company with operations in
coal mining, exploration, port operation,
oil and agriculture. We strive to energise
our people, communities and customers.
2020 Snapshot
Financials
EBITDA 1
(before non regular items)
PROFIT BEFORE
INCOME TAX 2
(before non regular items)
EARNINGS
PER SHARE
(before non regular items)
$290M
$120M
44%
69%
10¢
69%
Operations
TOTAL
TONNES SOLD
11.5M
6%
CASH GENERATED
FROM OPS 3
(before interest, tax
and acquisition costs)
PROFIT AFTER
INCOME TAX 2
(before non regular items)
$298M
42%
$84M
69%
Customer
profile
Total segment revenue
by geographical location ($M)
Japan
China
Taiwan
Chile
Korea
Vietnam
India
Other 4
Australia
447
127
80
26
69
10
27
168
128
1 Earnings before interest, tax, depreciation and amortisation is not defined by IFRS and is a non statutory measure.
This non-IFRS information has not been audited by Deloitte.
2 Net profit before and after tax and before non regular items is a non-statutory measure used by management as a
primary measure to assess the financial performance and excludes non regular income and expenses incurred by the Group.
A reconciliation of non regular items can be found on page 21 of the Directors Report. This non-IFRS information has not
been audited by Deloitte.
3 The Operating cashflow surplus for 2020 is before interest and tax (2019: before acquisition costs, interest and tax).
4 Other revenue from customer contracts relates to third party customer contracts with undisclosed geographical information.
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Community
DONATIONS AND
SPONSORSHIP 5
$1.6M
Long standing
customers
Top 4 customer relationships by
FY2020 by contracted tonnage
Customer 1
29 years
Customer 2
Customer 3
Customer 4
20 years
20 years
19 years
Environment
WATER RECYCLED 5
LAND REHABILITATED 5
TOTAL ENERGY USE 6
2,157ML
248HA
4,370,425GJ
Our people
NUMBER OF
EMPLOYEES 5
TOTAL NUMBER OF INJURY
FREQUENCY RATE 5
873
2.97
5 Refer to our Sustainability report for more information.
6 The scope 1 and 2 GHG emissions and energy consumption data have been reported on an operational control basis. We report our scope 1 and 2 GHG
emissions and energy consumption data with a one year lag due to the timing of the annual scope 1 and 2 GHG emissions and energy consumption
data, which is due for submission to the Clean Energy Regulator on 31 October 2020. Our FY2020 data will therefore be disclosed in our FY2021
Sustainability Report.
3
New Hope Group 2020 Annual Report
Chairman’s review
The Company is well
positioned to pull
through the current
market malaise.
Dear Shareholders,
I am pleased to provide you with the Company’s Annual
Report for the 2020 financial year.
The 2020 financial year has been like no other year in
the Company’s history and has presented the Board and
management with a number of challenges. The Company
has weathered many coal pricing cycles in its long history,
but never one driven by such a unique set of circumstances;
a pandemic and increasing tension with Australia’s major
trading partner.
The Company performed solidly in the first half of
the 2020 financial year from a financial perspective,
recognising a profit before tax and non-regular items
of $123.5 million, however the second half result was
greatly affected by the COVID-19 pandemic with a
full year profit before tax and non regular items of
$119.5 million. Despite production at New Acland
decreasing over the year, overall New Hope’s saleable
coal production increased by 4% from the 2019
financial year, to 11.3 million tonnes.
Newcastle Coal prices were resilient until March but fell
around 33% or A$36 per tonne for the period March to July
2020 driven by weakening demand and a weakening US
dollar. Australian producers have been more disadvantaged
in local currency terms than our seaborne competitors as
investors looked to the relative safety of the Australian dollar
as the pandemic and events in the United States unfolded.
As I write we are beginning to see some signs on the supply
and demand sides that should help to stabilise coal prices.
In response to lower coal prices the Company has paid
careful attention to expenditure going forward with
non-essential capital spend postponed, and a refocus
on cost management. The Bengalla and New Acland
(at full production) mines are excellent assets, low on
the cost curve and producing high quality thermal coal in
demand in Asian markets. With assets like these in close
proximity to markets, the Company is well positioned to
pull through the current market malaise.
One major headwind for the Company is the continued
reluctance of the Queensland Government to approve
the New Acland Stage 3 project, despite overwhelming
community support, and the economic damage being
wrought on the State by COVID-19. New Hope first
applied for Stage 3 approvals in 2007 and has been locked
in the process by anti-coal activist groups since then.
Unfortunately, it is the wider Queensland economy that
suffers the economic and social cost of this indecision.
The New Acland mine uses contracting companies from
across the State to supplement the local permanent
workforce. The vast majority of the permanent workforce
lives and spends locally. There are no fly-in fly-out
employees. In addition to mining job losses, when coal
production stops at New Acland, train and rail maintenance
crews will be out of work. The laboratory analysing the
coal will need less staff (up to 20 people less), the Port
of Brisbane will have 70 less vessels calling each year
affecting the local maritime industry – pilots, stevedores,
ship chandlers, lines boat crews, tugs, draft surveyors
and the list goes on. As a consequence, the Group were
forced to make 173 employees and contractors redundant
from the mine, head office and the port, with a further
25 redundancies announced to come in October 2020.
Stage 3 is a shovel ready project able to provide good
long-term jobs for Queenslanders which currently boasts
the highest unemployment rate in Australia at 8.8%. It
requires approvals which the State Labor Government is
in a position to grant despite ongoing legal challenges.
After 38 years of operation in the Ipswich coal fields,
the Company ceased production at the Jeebropilly mine
on 20 December 2019, effectively ending coal mining in
the Ipswich region. Coal has been mined continuously in
the Ipswich region since 1857 and New Hope has operated
in the region since 1952. Since 1981 New Hope’s Ipswich
mines produced 38 million tonnes of coal, providing
income and prosperity for hundreds of families in the area.
The focus is now on rehabilitation of the mine sites and post
mine land use in the area. The final landform is close to being
established at Jeebropilly and is in the process of being
4
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seeded, whilst the Oakleigh West mine, which produced
its last coal in 2013, currently has cattle grazing on the
rehabilitated land.
COVID-19 presented some operational challenges to the
business, limiting the movement of labour and materials
required to keep operations running. It also required
changed work practices to protect the ongoing health
and wellbeing of team members and to help minimise the
threat of COVID-19 entering a New Hope site. As a whole,
the Australian mining industry has been very proactive,
measured and responsible in its response to COVID-19
recognising its key role in supporting the Australian economy
and jobs during and after COVID-19, and also maintaining
security of supply to its customers over this time.
The Company’s safety performance over the year was also
pleasing, considering the challenges of keeping the team
focused on safe production during COVID-19 and the
ramp-down of production at Jeebropilly and New Acland
Stage 2. The Company’s total recordable injury frequency
rate is currently just below three per million exposure hours,
the best safety performance in the Company’s history.
Bengalla remains globally a stand-out asset with long
dated approvals, quality product and a very low cost of
production. The Company has benefited from its first full
year at 80% ownership and is working hard to make further
improvements in mining operations and in the surrounding
community. The agricultural land management strategy
implemented for some time by New Hope at New Acland
has been extended to land surrounding the Bengalla mine.
Bengalla Agricultural Company Pty Ltd (BAC) has been
busy making improvements including rejuvenation of
cultivation paddocks, general property clean-up, and resting
of previously overgrazed pastures. They also donated
350 round hay bales to local farmers for drought relief.
Once again, during a period of low pricing in the coal business,
we see activists take the opportunity to predict the end of
the industry, pushing for their preferred solution of renewables
which, at this time, cannot economically or practically displace
fossil fuels. According to the 2020 BP Statistical Review,
in 2019 coal consumption declined, but still accounted for
27% of primary energy supply. Despite considerable growth,
renewables accounted for just 5% of supply. In electricity
generation, coal’s share decreased but still accounted for
36%, well above the next most popular fuel which was gas
at 23%. Renewables grew from 9% of electricity generation
in 2018 to 10% in 2019. Coal’s decline in 2019 was not just
due to an increase in renewables, but also to the increasing
competitiveness of gas in the fuel mix. Coal use declined
strongly in the US and Western Europe but was largely offset
by increases in Asia. The International Energy Agency’s World
Energy Outlook 2019 Current Policies Scenario has steam
coal use increasing significantly from current levels through
to 2040, whilst the Stated Policies scenario has steam coal
use staying relatively flat through to 2040, with over 80%
of steam coal demand being in the Asia Pacific region.
Looking forward, COVID-19 will continue to affect energy
demand in the Company’s markets and alter the balance
of the energy mix. New Hope will continue to monitor
developments and fine-tune its strategy accordingly.
As we move into the 2021 financial year we have seen
change in the senior leadership group at New Hope.
In July 2020 the Chief Financial Officer Matthew Busch
tendered his resignation after over 23 years of service
to the Company. I would like to thank Matthew for his
service over this period and wish him well for the future.
I would like to thank retiring Chief Executive Officer (CEO)
and Managing Director (MD) Mr Shane Stephan for his
valuable contribution to the Company. Shane has had a long
career in the coal industry, commencing as a cadet mine
manager in the Ipswich coal fields in 1981 and ending as CEO
and MD of New Hope Corporation Limited, where he oversaw
significant growth in the business. Over his 11 year tenure
with New Hope Shane has been a positive influence on culture
and performance, and I wish him well in his retirement.
New Hope welcomes Reinhold Schmidt to the role of Chief
Executive Officer. Reinhold brings with him more than
20 years’ of experience in the mining industry in Australia
and abroad, and joins a talented management team who
will continue to drive performance for the Company while
navigating through a challenging period of lower coal prices.
Mr Bill Grant has announced his intention to retire with effect
from the end of the Annual General Meeting on 17 November
2020. I would like to thank Bill for his significant contribution
and service to the Company throughout his 14 year tenure
as a Non Executive Director and also roles as Chairman
of Bridgeport Energy Limited, Chairman of the Human
Resources and Remuneration Committee and a member
of the Audit and Risk Committee.
In June 2020, we welcomed Ms Jacqueline McGill AO to
the Board. Jacqueline is a highly accomplished director with
broad strategic and deep operational leadership across a
range of sectors including the mining industry. She will take
over as Chair of the Human Resources and Remuneration
Committee upon Bill’s retirement.
I would like to thank the management and staff of the
Company for their continued efforts over what has been
a challenging twelve months, particularly the team at
New Acland who have been managing the ramp-down of
production of Stage 2 and the resulting redundancies. I thank
my Board colleagues for their diligence and finally I would like
to thank our shareholders for their ongoing support.
R.D. Millner
Chairman
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New Hope Group 2020 Annual ReportDirectors’ ReportFinancial ReportOther InformationOperations Review
Financial review
The Company reported net profit before tax and non regular items 1 of $119.5
million for the year ended 31 July 2020. The result is 69% lower than the 2019
result of $384.3 million. The contribution of the operating segments to the
net profit before tax and non regular items was $137.5 million (2019: $391.7
million) as well as Treasury as a reconciling item being a net loss of $18.0
million (2019: $7.4 million excluding non regular items) as per below graph.
OPERATING SEGMENTS – NET PROFIT BEFORE TAX AND NON REGULAR ITEMS 1
$m
250.0
200.0
150.0
100.0
50.0
0.0
(50.0)
239.1
162.0
171.9
10.2
(19.3)
(18.0)
(7.4)
(34.7)
2020
2019
2020
2019
2020
2019
2020
2019
Coal Mining NSW
Coal Mining QLD
Other
Treasury
After non regular items the Company reported a net loss
after tax of $156.8 million for the year ended 31 July 2020,
a reduction from the 2019 profit of $210.7 million.
During the year the Company generated strong cash
operating surplus 2 of $297.8 million which is a decrease
of 42% on the 2019 result of $509.8 million.
Basic earnings per share before non regular items 3,
is 10.0 cents per share for 2020, compared to 32.3 cents
per share in 2019. After non regular items, basic loss per
share is 18.9 cents for 2020 against basic earnings per
share of 25.3 cents in 2019.
Compared to the previous corresponding period,
the 2020 full year result benefited from:
Increased production and sales driven by the full
year interest of 80% in the Bengalla Joint Venture;
A lower AUD:USD exchange rate; and
Non regular items including reduction in Jeebropilly
rehabilitation provision and recovery of prior year
rail costs.
Offset by:
Lower US$ revenues due to market index pricing conditions;
Increased cost of sales as the Acland Mine nears
the end of the Stage 2 life; and
Non regular items including impairment of coal
production and exploration assets, impairment
of goodwill and impairment of oil producing and
exploration assets, New Acland ramp down costs,
redundancies and ERP implementation costs.
1 Net profit before tax and non regular items is a non-statutory measure used by management as a primary measure to assess the financial performance and
excludes non regular income and expenses incurred by the Group. A reconciliation of non regular items can be found on page 21 of the Directors Report.
This non-IFRS information has not been audited by Deloitte.
2 The Operating cashflow surplus for 2020 is before interest and tax (2019: before acquisition costs, interest and tax).
3 Basic earnings before non regular items is a non-statutory measure used by management to assess the financial performance and excludes non regular
income and expenses incurred by the Group during the financial year. This non-IFRS information has not been audited by Deloitte.
6
ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 7
New Hope Group 2020 Annual Report Operations overview
Coal & Rehabilitation
New Acland
West Moreton
JEEBROPILLY
Location
Amberley, Queensland
Operations
1982 to 2019
Product
Thermal coal
Mining method
Open cut,
multi-thin-seam mining
NEW OAKLEIGH
Location
Rosewood, Queensland
CHUWAR
Location
Ipswich, Queensland
Location
North-west of Oakey,
Queensland
Operations
2002 to present
Product
Thermal coal
Mining method
Open cut,
multi-thin-seam mining
Bengalla
Location
Hunter Valley,
New South Wales
Operations
1996 to 2039
Product
Thermal coal
Mining method
Open cut
Bengalla Mine is a joint
venture (New Hope 80%,
and Taipower 20%).
QLD
E
Lenton/Burton
E
Churchyard Creek
E
Yamala
North Surat
E
EAC
New Acland
P
Brisbane
C
West Moreton
NSW
C A
Bengalla
C
E
P
A
Operations Coal
Exploration & Development
Operations Port Facility
Operations Agriculture
8
ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Exploration & Development
Port Facility
North Surat
Location
South West Queensland
(near Taroom and Wandoan)
Project areas
Elimatta, Taroom,
Collingwood and Woori
Product
Thermal coal
Mining method
Open cut
Lenton
Project name
Lenton Joint Venture
Location
Bowen Basin, Queensland
Project areas
Burton Mine and
Lenton Project
Product
Coking/thermal coal
Mining method
Open cut
Lenton is a joint venture
project (New Hope 90%,
Formosa Plastics Group 10%).
Queensland Bulk Handling
Queensland Bulk Handling Pty Ltd (QBH) is a
separate venture located at the Port of Brisbane.
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 assured facilities.
Agriculture
Acland Pastoral
Twelve hundred strong cattle breeding and
cropping operation that owns 10,000ha of land
on and around New Acland. There are 1500ha
of dryland cropping in use and 132ha of irrigated
land supplied with recycled water. Acland Pastoral
Co. Pty Ltd (APC) continues to undertake cattle
grazing on the rehabilitated mined land at New
Acland and New Oakleigh, demonstrating the
capacity for mining and agriculture to coexist.
Bengalla Agricultural
Significant work has been undertaken over the
past 18 months to re-establish infrastructure and
renovate the property consisting of 450ha for
grazing cattle, 235ha for dryland cropping and
an additional 165ha of irrigated cropping area.
Bengalla Agricultural Company Pty Ltd (BAC)
has produced substantial summer and winter crops
and is currently backgrounding 500 weaner steers
making use of the quality feed on offer.
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New Hope Group 2020 Annual ReportDirectors’ ReportFinancial ReportOther InformationOperations Review Operations review
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The Company produced 11.3 million tonnes of saleable coal in 2020
which is a 4% increase on 2019. New Hope’s share of the Bengalla
mine was 8.3 million tonnes while New Acland and Jeebropilly
produced a combined 3.0 million tonnes of saleable coal.
Response to COVID-19
Throughout the COVID-19 pandemic the Company has made responsible and measured decisions to
protect the ongoing health and wellbeing of team members and to help minimise the threat of COVID-19
entering a New Hope site. COVID-19 Safety Plans have been implemented to promote personal hygiene,
equipment hygiene, physical distancing and mental health, in addition to providing training on COVID-19
infection control.
To date, the Group has had no cases of COVID-19 at any of its sites and the disruption and increased
cost associated with COVID-19 related management measures has been minimal.
The recent outbreaks across southern states has seen renewed efforts across the Company to ensure
complacency does not become an issue. All employees receive regular updates from the CEO advising of
travel restrictions where necessary. Standard COVID-19 measures continue to be practiced across all sites.
The Queensland Government decision to close the border with NSW is expected to disrupt certain
activities of the business including exploration, oil production and the Bengalla dragline shutdown.
Plans have been implemented to mitigate the impact of the border closures.
The Company will continue to adhere to government advice, including strict quarantine measures for
staff who have returned from overseas or have been in contact with someone who has a confirmed
case of COVID-19.
10
ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Coal operations
Bengalla Joint Venture
The Bengalla Mine (100% basis) produced 10.3 million tonnes
to the year end 31 July 2020. This is another record for the
business. Recent weather resulting in port closures and a train
derailment close to the port meant the site lost some sales from
July into August.
Bengalla also had a record performance from a health and
safety perspective with just one recordable injury for the year
and a year to date TRIFR (Total Recordable Injury Frequency
Rate) of 0.58 per million exposure hours at the end of June
2020. In relation to the 2018 Fatality of Quinton Moore,
Bengalla continued to support Quinton’s family and crews on
site and continues to cooperate with authorities undertaking
their investigations. The Resources Regulator has confirmed
it will not be taking any further investigative or enforcement
action against Bengalla Mining Company Pty Limited (BMC)
regarding the fatality, and they now consider the matter
closed. Since the incident, Bengalla has made the decision
to insource it’s tyre management operations.
The site commenced a scheduled major mid-life shutdown
of the dragline at the end of July. This shutdown is planned
to last for 80 days and involves a significant amount of
mechanical, electrical and structural repairs and upgrades to
the machine. The dragline accounts for around 20% of total
waste material movement at Bengalla and the shutdown will
have a minor impact on coal flow in the first half of the 2021
financial year.
There has been a strong cost and business improvement
focus across the business for the year. In a tough thermal
coal market, Bengalla continues to make a positive margin
and generate a strong profit for the Bengalla Joint Venture.
FIVE YEAR SALEABLE PRODUCTION PERFORMANCE
mt
10.5
9.0
7.5
6.0
4.5
3.0
1.5
–
2015
2016
2017
2018
2019
2020
BMC 100%
Company Share
Bengalla exploration
The drilling program consisted of 56 open holes and 15 core
holes, with a total of 14,640 metres drilled. The focus of this
work has been reserve definition, gas testing and geotechnical
hazard delineation, down dip of the existing operations.
Bengalla:
2020 KEY
ACHIEVEMENTS
Record production
of 10.3 million tonnes
(100% basis);
Best safety performance on
record with one injury and
TRIFR of 0.58 per million
exposure hours;
Successful implementation
of the Guardvant (Fatigue
Monitoring) and Safemine
(Proximity Detection) systems,
significantly reducing critical
risk in our business;
A strong focus on cost
management. This included
the big data work in liaison
with Hitachi to improve
the underlying operating
performance;
Successfully managed a
northern end-wall geotechnical
issue and recovered to plan;
Continued strong engagement
with the local community
despite COVID-19; and
Progressed the renovation
of Bengalla homestead.
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New Hope Group 2020 Annual ReportDirectors’ ReportFinancial ReportOther InformationOperations Review Coal operations
New Acland:
2020 KEY
ACHIEVEMENTS
Improvement in reportable
incidents rate of TRIFR
of 8.3 per million
exposure hours;
Centre Pit nearing completion;
Continued to win coal from
old underground workings;
In pit tailing rehabilitation
progressing; and
Overall rehabilitation progress
on target with 80 hectares
seeded and a further
30 hectares of oats planted
in the past 12 months.
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New Acland Coal Mine
New Acland produced 2.8 million tonnes of coal for the 2020
financial year, down 32% year on year due to the Queensland
Government’s failure to approve Stage 3, resulting in the
halving of the workforce on site in October 2019. Over the
past 12 months the business has completed the first phase
of the wind down in which 150 personnel left the business.
New Acland Stage 3 (NAC03) development
The Queensland Court of Appeal rejected the appeal of the
Oakey Coal Action Alliance (OCAA) in relation to the May
2018 Judicial Review findings of the Queensland Supreme
Court. New Hope Group was successful on all points with the
Court of Appeal finding an apprehension of bias against the
Company by the original Land Court member.
Subsequently OCAA sought special leave to appeal the orders
of the Court of Appeal and on 5 June 2020 were granted leave
to appeal by the High Court. The High Court hearing will take
place on 6 October 2020.
The Supreme Court of Queensland adjourned an application
to wind up OCAA until after the High Court appeal is heard.
The Court stated in the judgement, “The respondent (OCAA)
owes a substantial debt to the applicant New Acland Coal
Pty Ltd and appears to be insolvent.”
The High Court appeal does not challenge findings on
groundwater or any other environmental issue that is relevant
to any decision being made by Government.
The action is nothing more than an attempt to delay final
decisions on Stage 3 with no regard whatsoever for the
impacts on the real locals. The Company is asking the Premier
and her Government to address the concerns of the vast
majority of locals; the ones who live, work, raise their children
and shop in the local area.
The Queensland Government has all information before it to
make the necessary decisions. There are no impediments to the
Queensland Government granting the project’s Mining Leases
(ML), an AWL and other secondary approvals it requires before
mining activity can commence.
New Acland exploration
The drilling program consisted of three new bores, with a total
of 286 metres drilled, complimenting the 78 bores already in
the project’s comprehensive groundwater monitoring network.
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ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS
West Moreton
The Jeebropilly Mine produced 0.2 million tonnes of saleable coal
in the 2020 financial year. This volume was in line with budgeted
performance and now operations have completed, it represents
the cessation of active mining in the Ipswich Coal Fields.
Rehabilitation activities at both the Jeebropilly and New
Oakleigh sites has continued over the course of the year
including the capping of tailings areas and further works
required to achieve final landform.
Given the location of our West Moreton sites within the
South East Queensland urban footprint, the Company is
investigating alternative land uses for mined areas and
unmined landholdings. Significant growth in Ipswich
over the past decade means these landholdings are well
located with respect to existing infrastructure and demand.
Rehabilitation of the former mined areas to high value
post-mining land-uses, such as industrial or residential
development, has the potential to add significant value to
the underlying landholdings.
Key activities at West Moreton in 2020 included:
Successful implementation of the ‘Finishing Well’ program;
Rehabilitation work continued with more than
110 hectares seeded;
Jeebropilly Coal Handling and Preparation Plant
demolished safely and under budget cost;
Donation of land to Rosewood School for their
agriculture program;
Partnered the McGrath Foundation to paint a dozer
pink and raise funds for breast care nurses; and
315,000 bank cubic metres (BCM) of material moved
into the Normanton Pit void at Oakleigh East.
Queensland Bulk Handling
QBH exported 5.1 million tonnes of coal for the 2020
financial year. This is a 24% decrease year on year mainly
due to reduced output from New Acland mine associated
with delays in approvals.
Key activities at QBH in 2020 included:
Eight years Lost Time Injury (LTI) free safety
milestone achieved;
Restructure of current operations following the loss of
20% of the workforce through redundancies;
Realised opportunities to meet short-term additional
stockpile demand from current customers; and
Completed first stage of reclaimer refurbishment project.
Lenton Joint Venture
Work continued on progressing the relevant approvals
to facilitate the revised mine plan for the Lenton Project.
The exploration and coal quality program improved
Resource definition and supported the updated JORC Coal
Resource estimates for Taroom and Woori. The completion
of the PFS and coal washability program at Taroom
supported the JORC Reserve over the Taroom Project.
Elimatta Mining Leases ML50254, ML50270 and ML50271
were granted by the Queensland Government on 1 June 2020.
Colton Project
On 17 October 2018, the Directors of the Company’s
subsidiaries, Northern Energy Corporation Limited
(NEC) and Colton Coal Pty Ltd (Colton Coal), placed the
entities into voluntary administration. The companies
were subsequently placed into liquidation by creditors
at a meeting on 26 July 2019.
In 2019, there were proceedings in the Supreme Court
of New South Wales between the Company, certain of
its subsidiaries, Wiggins Island Coal Export Terminal Pty
Ltd (WICET), NEC and Colton Coal in which WICET, NEC
and Colton Coal contended that the Company and certain
subsidiaries had guaranteed the debts of NEC and Colton
Coal under a Deed of Cross Guarantee (DOCG) in an
amount of approximately $155.0 million. On 12 July 2019,
the Supreme Court of New South Wales found in favour
of the Company and concluded that it had not guaranteed
the debts of NEC and Colton Coal under the DOCG. On
20 December 2019, the New South Wales Court of Appeal
dismissed (with costs) an appeal by WICET, NEC and Colton
Coal of the Supreme Court’s decision. On 12 June 2020,
the High Court of Australia dismissed (with costs) WICET,
NEC and Colton Coal’s applications for special leave to
appeal the New South Wales Court of Appeal decision.
The Liquidators have continued their investigations into NEC
and Colton to determine whether there are potential claims
that exist against the Company or the former directors of NEC
and Colton, including whether NEC and Colton were trading
whilst insolvent. The Liquidators allege that the value of the
potential claims that may be available to NEC and Colton,
subject to the Liquidators obtaining funding and conducting
further investigations, may be in the range of $150.2 million
to $168.3 million. No proceedings have been commenced
with respect to these potential claims. The Group denies
the alleged potential claims.
Coal Development and Exploration
The Company continued an active exploration program
throughout the 2020 financial year utilising the Company’s
drill rigs, with the field crews celebrating 40 years of
exploration operations and continuing an impressive safety
record, standing at six years LTI free. During the year 109
holes were drilled, for a total 22,221 metres.
16 open holes were drilled on greenfield exploration
tenements, with eight holes at Culgowie and eight holes
Taroom East for a total 1,172 metres.
North Surat Project
Bee Creek
The Pre-Feasibility Study (PFS) for the North Surat Project
consisting of Elimatta, Taroom, Collingwood and Woori
was completed during the 2020 financial year. On ground
exploration and coal quality and washability program at
Taroom was completed, new geological models were
developed internally for both the Taroom and Woori projects.
The Bee Creek field program targeted the Rangal Coal
Measures completion with 17 open holes and two core
holes, for a total of 4,278 metres drilled. A field geophysical
(electromagnetic) survey complemented the drilling, focused
on identifying potential areas amenable to open cut mining.
13
New Hope Group 2020 Annual ReportDirectors’ ReportFinancial ReportOther InformationOperations Review Pastoral operations
APC operations received below average rainfall for the
first half of the 2020 financial year and a supplementary
feeding regime was implemented for the breeder herd, with
over 1,000 weaners produced. Winter cropping was also
impacted by the drought, however 400 tonnes of dryland
barley hay and 200 tonnes of irrigated barley and oats was
harvested. Above average rain in the second half of the
financial year saw 4,600 tonnes of sorghum silage harvested
and the planting of 800 hectares of barley and oats.
Following the acquisition of a controlling interest in Bengalla,
New Hope’s land management experience is being applied
to the management of agricultural land surrounding the
Bengalla operation, through the Company’s subsidiary
BAC. At BAC, significant capital upgrades were completed,
including cattle yards, fencing of paddocks, lateral and pivot
irrigator installation, and refurbishment of existing irrigators
and reticulation networks.
Irrigated crops produced 2,700 large hay bales, a further 350
bales were donated for local drought relief. Over 300 hectares
of oats and pasture has been planted in recent months.
Cattle grazing trials have been initiated at New Oakleigh
with the introduction 113 heifers to the western
rehabilitation area.
Key pastoral activities in the 2020 financial year included:
Establishment of BAC;
Significant capital improvements at BAC;
Grazing trial commenced at New Oakleigh; and
Significant donations of hay to local farmers, schools
and community groups to help with drought relief.
14
ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Oil operations
Bridgeport Energy Limited
Oil production for Bridgeport Energy Limited (Bridgeport) was
352,027 barrels in the 2020 financial year, an 8% decrease
on 2019 volumes principally because of natural production
decline and underperformance of two new development wells.
Bridgeport operations had no LTIs for the sixth year in a row and
the TRIFR was below 12 per million exposure hours worked.
Revenue for the year was $24.6 million, down substantially
on the prior year of $33.9 million due to the oil price drop
as the COVID-19 pandemic took effect on oil demand in
the second half of the reporting period. Bridgeport took
appropriate measures from the fourth quarter to reduce
costs by seeking reduced fees from a majority of suppliers,
eliminating all third-party contractor work from the office,
retrenching some staff and moving to a nine day fortnight
with remaining office staff.
All major capital expenditure for operated projects was
curtailed, and the forward budget accommodates essential
work or joint venture activities only, down 60% on prior years.
l
a
r
o
t
s
a
P
d
n
a
l
c
A
Bridgeport:
2020 KEY
ACHIEVEMENTS
Drilled three development wells
on schedule and budget, two
successful and on production;
Completed 15 well workovers
on schedule and budget;
Successfully farmed-in to
ATP2021 and PRL211 both
operated by Vintage;
Commenced negotiation
with Carbon Transport and
Storage Company on a CO2
gas supply contract from
a Millmerran-based post
combustion capture plant for
the Moonie oil field Carbon
Capture Utilisation & Storage
(CCUS) project;
Bridgeport continued to de-risk
the exploration portfolio with
completion of the farmout of
some of the 100% held equity
in tenements ATPs 2023, 2024,
2025, 2026, 736, 737 and
738 in the Cooper Basin, while
retaining operatorship of 2023
and 2024. Five of the seven
tenements are now operated by
Origin Energy, whereas ATPs
2023/2024 are near the Jackson
Naccowlah production project
in which Bridgeport holds a 2%
working interest;
Announcement of the
future lifting of the drilling
moratorium onshore in the
Otway Basin Victoria will lead
to a resumption of exploration
activities at PEP 150 and PEP
151 in 2021; and
Grant to Bridgeport of offshore
Victoria state waters tenement
VIC/P007191(V).
15
New Hope Group 2020 Annual ReportDirectors’ ReportFinancial ReportOther InformationOperations Review
Coal resources
DEPOSIT
New Acland 1
Bengalla 2
Burton 3
Lenton 4
Yamala 5
Elimatta
Collingwood
Taroom
Woori
Total
STATUS
Mine
Mine
Mine
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
COAL RESOURCES AS AT 31 MAY 2020 (MILLION TONNES)
(COAL RESOURCES ARE INCLUSIVE OF THE RESERVES REPORTED BELOW)
INFERRED
INDICATED
MEASURED
2020 TOTAL
2019 TOTAL
16
16
8
208
184
73
94
122
42
763
193
176
11
104
39
105
139
338
67
290
201
13
68
14
108
43
–
–
499
393
32
380
237
286
276
460
109
497
411
32
380
237
286
276
433
84
1,172
737
2,672
2,636
Notes on Resources:
1 New Hope Group Share is 100%.
2 New Hope Group Share is 80%. The Resource number includes
74 Mt of Underground Resource.
3 New Hope Group share is 90%.
4 New Hope Group share is 90%.
5 New Hope Group share is 70%.
All Coal Resource estimates are prepared and reported in accordance with the 2012 JORC Code.
Coal reserves
STATUS
Mine
Exploration
Exploration
Mine
Exploration
DEPOSIT
New Acland 1
Lenton 2
Elimatta
Bengalla 3
Taroom
Total
Notes on Reserves:
COAL RESERVES AS AT 31 MAY 2020 (MILLION TONNES)
RECOVERABLE RESERVES
MARKETABLE RESERVES 4
PROBABLE
PROVED
TOTAL 2020
TOTAL 2019
PROBABLE
PROVED
TOTAL 2020
121
12
26
45
207
411
249
23
93
163
–
528
370
35
119
208
207
939
370
35
125
218
–
748
66
7
16
34
130
253
136
14
64
131
–
345
202
21
80
165
130
598
1 240Mt of Recoverable Reserves require additional approvals beyond Acland Stage 3.
2 Figures shown are 100% of total Reserves. New Hope share is 90%.
3 Figures shown are 100% of total Reserves. New Hope share is 80%.
4 Marketable Reserves are based on modelled washplant yields, and for operating mines have been correlated to reconciled data.
The Coal Resources and Reserves are as at 31 May 2020. The Company is not aware of any events occurring up to the reporting
date of 31 July 2020 which will impact the reserves and resources as reported. Please see the New Hope Group website for
the Coal Resource and Coal Reserve release including Table 1 details for all Coal Reserves and Resources dated 22 September
2020. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been
materially modified from the original publication.
Information in this report that relates to Coal Resources and Coal Reserves is based on and accurately reflects reports prepared
by the Competent Person as follows:
Coal Resources – Mr Sean Dixon, who is a full time employee of the Company;
Coal Reserves – Mr Brett Domrow, who is a full time employee of the Company.
The above coal reserves and resources are the subject of a separate ASX announcement dated 22 September 2020.
16
ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Oil reserves and resources
RESERVES (NET)
Oil barrels (Mboe)
RESOURCES (NET)
Oil barrels (Mboe)
Notes:
2020
1P
2P
2019
1P
1,336
4,386
3,218
2P
5,731
1C
2C
1C
2C
7,910
12,675
6,664
11,263
1 Mboe = thousand barrels of oil equivalent. A conversion from gas volume to oil equivalent (at 6,000 scf/barrel of oil) was based on a standard
industry metric.
2 Petroleum reserves have been prepared using principally deterministic methods, supported by field reservoir modelling where available.
3 Contingent resources (2C) have been estimated using a combination of deterministic assessments and probabilistic volumetric assessments.
4 Bridgeport aggregates reserves (1P and 2P) and contingent resources (2C) using arithmetic summation.
5 The economic assumptions used to evaluate each project are commercially sensitive. Reserves have been assessed as economic using discounted cash flow
methods in compliance with PRMS guideline. Costs have been estimated using actual costs and reasonable estimates of forecast future costs. Oil prices
have been forecast using reasonable estimates of future prices.
6 The reference points are at each field where crude oil is sold into a road tanker, except for North Surat where the reference point is Caltex in Brisbane
and for Cuisinier and Naccowlah where the reference point is at the Moomba plant inlet.
7 Reserves reported include fuel consumed in operations at each field; totalling 117 1P and 562 2P Mbbls.
8 In accordance with the SPE-PRMS guidelines, only committed infill wells or similar projects are captured as 2P reserves.
9 As per SPE-PRMS guidelines, 2C resources include; uncommitted infill drilling opportunities, discoveries that are contingent on development and enhanced
recovery projects such as waterflood or CO2 miscible sweep.
The above oil reserves and resources are the subject of a separate ASX announcement dated 22 September 2020.
New Hope Group outlook
Bengalla begins the 2021 financial year nearing the completion of the dragline major mid-life shutdown.
Total production for the coming year is expected to remain at record levels through continued operational
improvements. Bengalla’s positioning low on the cost curve will anchor the Company’s resilience during
this global economic downturn.
Queensland operations will continue to ramp down production volumes in the year ahead with Acland
production constrained to mining remnant coal from Stage 2 operations in the absence of receiving Stage
3 approvals. The Company remains focused on securing all necessary approvals for New Acland Stage 3 to
ensure continuity of operations and employment for the remaining workforce and contractors, along with
QBH and broader community who rely upon the operation to support their families. Jeebropilly mine ceased
operations in December 2019 once all economically viable coal had been extracted. Activities in West Moreton
are now focused on final rehabilitation and optimising the value from the land portfolio.
Work will continue on the Company’s development assets at Burton, Lenton and the North Surat, with the
Burton coking coal project being the most prospective short-term development opportunity. Final approvals will
continue to be sought for the Lenton project, with further planning ongoing for the North Surat group of projects.
Coal market fundamentals have deteriorated due to impacts of COVID-19 which has made for a challenging
start to the year ahead. The short-term outlook for thermal coal demand is dependent on post pandemic
economic and industrial recovery in our region. The mid to long-term outlook remains healthy as the need for
industrial and domestic electricity generation remains strong based on future growth in Asia, New Hope's key
export market.
With a suite of low cost, quality assets and strong balance sheet, the Company remains well positioned to
endure the current global economic downturn and retain its position as one of Australia’s leading coal producers.
17
New Hope Group 2020 Annual ReportDirectors’ ReportFinancial ReportOther InformationOperations Review The Group is pleased to present its Tax Contribution Report for the financial year ended 31 July 2020. The Group considers
that this disclosure as a ‘large’ business under the Voluntary Tax Transparency Code assists stakeholders in understanding
its position as a responsible corporate taxpayer and is a key part of its social and economic responsibility.
Our guiding principle in relation to taxation is to pay the right amount of tax at the appropriate time. We will comply with all
tax obligations and engage in a constructive manner with the tax authorities.
Our business model and operations
The success of the Group’s diversification in combination with its reputation for hard work and sensible management has seen
the business grow to be an ASX 200 listed corporation from its regionally based history and having just under 900 people under
management across its operations in Queensland and New South Wales. Our continued growth is founded on a long-term
commitment to our employees, alongside a proactive approach to environment, community and social responsibility.
As outlined in the Sustainability Report, to be released later in the year, the Group’s core values underpin the execution of the
strategic vision and guide the decisions we make and the actions we take on a day to day basis. These principles are critical
to the successful management of our tax affairs.
Key tax points
New Hope Group’s Effective Tax Rate for 2020 is 30.5% (2019: 31.6%).
Corporate Tax for 2020 is $8.0 million (2019: $86.8 million).
Tax and Government contributions in 2020 is $124.8 million (2019: $254.6 million).
Tax policy and governance
Approach to tax
Our approach to tax is aligned with our Code of Conduct and our long-term business strategy.
New Hope acts to pay the right amount of tax, in the right place, at the right time.
We comply with our legal obligations for tax, we file our tax returns on time with full disclosure of all relevant matters,
and pay our taxes on time.
The Group has a low risk threshold in respect of taxation matters.
The Group’s approach to tax compliance, governance and risk is focussed on people. A flat management structure and
clear understanding of responsibilities by those involved in managing the tax affairs of the Group is key to successful tax
management for the Group.
Tax governance
The Group’s tax affairs are overseen by the Board of Directors who approve the overall tax strategy and appetite for tax related
risk. Executive management are responsible for ensuring that resources are capable of accurately and effectively discharging
all tax related obligations in line with the overall tax strategy. The executive team employs a number of finance personnel with
relevant experience and engages external consultants when appropriate. The governance is managed within the Group’s
broader governance processes and our Corporate Governance Statement can be found at: www.newhopegroup.com.au/
content/investors/corporate-governance.
We act in accordance with the Code of Conduct and our decisions are guided by the Core Values. These cultural principles,
combined with the overall tax strategy and internal guidelines together provide a strong foundation for doing the right thing.
Tax strategy
The key points in New Hope’s tax strategy are:
Effectively manage risk by application our approach to tax listed above;
Observe all applicable laws, rules, regulations and disclosure requirements;
Apply diligent professional care and judgment to arrive at well-supported conclusions;
Develop and foster good working relationships with tax authorities, government bodies and other relevant parties; and
Seek expert advice on any positions where tax law is unclear or subject to interpretation and ensure positions ultimately
adopted are supportable and well documented.
18
Tax contribution reportENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Numerical reconciliation of accounting (loss)/profit to income tax
(benefit)/expense
YEAR ENDED
(Loss)/profit before income tax
Income tax calculated at 30%
Tax Effect of amounts not deductible in calculating taxable income
– Impairment of goodwill
– Non-deductible amounts from discontinued operations
– Other deductible amounts
– Sundry items
(Over)/Under provision provided in prior year
Income tax (benefit)/expense
– Effective Tax Rate
2020
$000
(225,551)
(67,665)
2019
$000
307,990
92,397
3,681
–
–
18
(4,802)
(68,768)
30.5%
–
66
4,493
256
126
97,338
31.6%
Reconciliation of income tax (benefit)/expense to tax (refundable)/payable
(Loss)/profit before income tax
Income tax calculated at 30%
Tax effected adjustments to taxable income:
– Impairment of goodwill
– Other non-temporary items
Temporary differences:
– Non-deductible impairment expense
– Other deductible amounts
– Tax losses utilised
Current tax liability
Tax refund 2019
– Tax instalments paid
Tax (refundable)/payable
REVENUE TAX LOSSES RECONCILIATION
Opening Tax Losses Revenue
– Group losses – under/over
– Transferred losses utilised
Closing Tax Losses
Tax contributions summary
TAX CONTRIBUTIONS SUMMARY
Corporate Tax
Corporate Tax – 2019 (refund)/2018 payable 1
Mining Royalties 2
Oil Royalties
Employee Taxes Withheld
Fringe Benefits Tax
Payroll Tax
Transfer Duty – Business Combination
Other Taxes, Rates and Levies
Total Tax Contributions
(225,551)
(67,665)
307,990
92,397
3,681
18
–
322
100,308
(28,339)
–
8,003
(77)
(23,705)
(15,779)
–
–
–
–
8,003
(3,015)
57,985
1,448
44,837
1,040
7,262
–
11,756
129,316
–
(4,757)
(1,182)
86,780
–
(80,963)
5,817
1,182
(40)
(1,142)
–
86,780
924
62,065
2,031
40,297
1,654
7,476
42,327
11,062
254,616
1 Amounts relate to current tax of prior periods resulting in additional tax (refundable)/payable. Prior year comparative restated to include this amount.
2 Mining Royalties includes amounts paid to third party landholders in line with State legislation requirements.
19
Tax contribution reportNew Hope Group 2020 Annual ReportDirectors’ ReportFinancial ReportOther InformationOperations Review 2020
$000
2019
$000
RESTATED 1
2018
$000
2017
$000
Total revenue
1,083,918
1,306,429
1,078,439
844,077
Earnings before interest, tax, depreciation and amortisation
(before non regular items) 2
289,754
517,061
465,484
283,118
Profit before tax (before non regular items) 2
Profit after tax (before non regular items) 2
119,504
83,943
384,287
268,487
373,207
261,245
184,335
128,713
(Loss)/profit from continuing operations before tax
Tax benefit/(expense) from continuing operations
(Loss)/profit from continuing operations after tax
(Loss)/profit before tax
Tax benefit/(expense)
(Loss)/profit after tax
(225,551)
68,768
(156,783)
(225,551)
68,768
(156,783)
307,770
(97,338)
210,432
307,990
(97,338)
210,652
267,613
(80,284)
187,329
213,812
(64,314)
149,498
202,213
(61,594)
140,619
202,213
(61,594)
140,619
Loss attributable to minority interests
–
–
–
(1)
Net (loss)/profit attributable to NHCL 3 members
(156,783)
210,652
149,498
140,620
Total assets employed
Shareholders’ funds
2,545,636
2,801,413
2,338,367
2,181,645
1,725,380
1,961,012
1,888,400
1,853,428
Dividends paid during the financial year
124,756
133,002
99,738
49,864
Weighted average shares on issue
831,681,768
831,261,875
831,141,985
831,067,979
2020
2019
2018
2017
Net (loss)/profit attributable to NHCL members
(as a % of shareholders’ funds)
(9.1%)
10.7%
7.9%
7.6%
Basic earnings per share before non regular items (cents) 2
(Loss)/earnings per share (cents)
Normal dividends per share (cents)
10.0
(18.9)
6.0
32.3
25.3
17.0
31.5
18.0
14.0
15.4
16.9
10.0
Net tangible asset backing per share (cents)
197.8
224.3
220.2
215.9
1 Figures for the 2018 financial year were restated in 2019 to present the impacts of discontinued operations in the 2019 financial year.
2 Earnings before interest, tax, depreciation and amortisation (before non regular items), profit before tax (before non regular items), profit after tax (before
non regular items) and the earnings per share before non regular items are not defined by IFRS and are non statutory measures. This non-IFRS information
has not been audited by Deloitte.
3 New Hope Corporation Limited.
20
Financial summaryENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Directors
The following persons were Directors of New Hope Corporation Limited during the whole of the financial year and up to the date
of this report:
Mr R.D. Millner
Mr T.J. Barlow
Mr W.H. Grant
Mr T.C. Millner
Consolidated results
Mr I.M. Williams
Mr S.O. Stephan was a Director until his resignation on 31 August 2020
Ms S.J. Palmer was a Director until her resignation on 25 November 2019
Ms. J.E. McGill was appointed Director on 22 June 2020
Revenue from operations
Earnings before interest, tax, depreciation and amortisation
(before non regular items) 1
Profit before income tax (before non regular items) 2
Recovery of prior period rail costs
Jeebropilly rehabilitation
New Acland ramp down costs
QLD operations redundancies
Liquidation related expenses
Enterprise Resource Planning (ERP) system implementation costs
Impairment of QLD coal mining assets
Impairment of goodwill
Impairment of coal exploration and evaluation assets
Impairment of oil producing and exploration assets
Acquisition costs expensed
Establishment costs on guarantee facility
Insurance proceeds from shiploader
Gain on discontinued operation
(Loss)/profit before income tax (after non regular items) 3
Profit after income tax (before non regular items) 2
Recovery of prior period rail costs
Jeebropilly rehabilitation
New Acland ramp down costs
QLD operations redundancies
Liquidation related expenses
ERP system implementation costs
Impairment of QLD coal mining assets
Impairment of goodwill
Impairment of coal exploration and evaluation assets
Impairment of oil producing and exploration assets
Acquisition costs expensed
Establishment costs on guarantee facility
Insurance proceeds from shiploader
Gain on discontinued operation
(Loss)/profit after income tax (after non regular items)
(Loss)/profit attributable to New Hope Shareholders
2020
$000
2019
$000
1,083,918
1,306,429
289,754
119,504
1,937
9,463
(13,324)
(7,103)
14,058
(3,454)
(110,783)
(12,271)
(157,197)
(66,381)
–
–
–
–
(225,551)
83,943
1,356
6,624
(9,327)
(4,972)
14,334
(2,417)
(77,548)
(12,271)
(110,038)
(46,467)
–
–
–
–
(156,783)
(156,783)
517,061
384,287
–
–
–
(5,116)
(21,675)
–
–
–
–
–
(47,729)
(4,367)
2,370
220
307,990
268,487
–
–
–
(3,581)
(19,666)
–
–
–
–
–
(33,410)
(3,057)
1,659
220
210,652
210,652
%
CHANGE
-17%
-44%
-69%
-173%
-69%
-174%
1 Earnings before interest, tax, depreciation and amortisation is not defined by IFRS and is a non statutory measure. This non-IFRS information has not been
audited by Deloitte.
2 Profit before income tax (before non regular items) and profit after income tax (before non regular items) are not defined by IFRS and are non statutory
measures. This non-IFRS information has not been audited by Deloitte.
3 (Loss)/profit before income tax and after non regular items reconciles to the Statement of Comprehensive Income. The comparative figure includes an adjustment
for the prior year profit from discontinued operations before tax as per note 24 of the financial statements.
21
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Consolidated results
Basic earnings per share (cents) (before non regular items) 1
Recovery of prior period rail costs
Jeebropilly rehabilitation
New Acland ramp down costs
QLD operations redundancies
Liquidation related expenses
ERP implementation costs
Impairment of QLD coal mining assets
Impairment of coal exploration and evaluation assets
Impairment of oil producing and exploration assets
Impairment of goodwill
Acquisition costs expensed
Establishment costs on guarantee facility
Insurance proceeds from shiploader
Gain on discontinued operation
%
CHANGE
-69%
2020
CENTS
10.0
0.2
0.8
(1.1)
(0.6)
1.7
(0.3)
(9.3)
(13.2)
(5.6)
(1.5)
–
–
–
–
2019
CENTS
32.3
–
–
–
(0.4)
(2.4)
–
–
–
–
–
(4.0)
(0.4)
0.2
–
Basic (loss)/earnings per share (cents) (after non regular items)
(18.9)
25.3
-175%
1 Basis earnings per share (before non regular items) is not defined by IFRS and is a non-statutory measures. This non-IFRS information has not been audited
by Deloitte.
Principal activities
The principal activities of New Hope Corporation Limited and its controlled entities (New Hope, the Company or the Group)
consisted of:
Coal exploration and project development in Queensland;
Coal extraction, processing, marketing and logistics in Queensland and New South Wales;
Agriculture; and
Oil and gas – exploration, development, production and processing.
Dividends paid to members during the financial year were:
A final dividend for the year ended 31 July 2019 of 9.0 cents per share paid on 5 November 2019
An interim dividend for the year ended 31 July 2020 of 6.0 cents per share paid on 5 May 2020
$000
74,854
49,902
The Company is focused on investment in key capital programs (major mid-life shut of the dragline at Bengalla) to underpin the
future of its operations and ensure sustainable long-term shareholder returns. In order to fund this investment and in light of the
difficult global economic conditions as a result of COVID-19, the Directors will not be declaring a final dividend. Total dividends
paid to shareholders of New Hope for the year were 6.0 cents per share, being interim dividend payments, compared with total
dividends for the 2019 year of 17.0 cents per share.
The Company remains focused on health and safety with a decrease in recordable injuries and high potential incidents, achieving
marked improvements from the last year on these metrics. Sites continue to ensure that safety initiatives (lead indicators) are
part of the health and safety management system, which supports hazard identification and implementation of effective controls
such as personal risk management (PRM) tools and safety interactions.
22
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 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 17 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 Manager
Risk Management and Internal Audit.
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:
RISK CATEGORY
POTENTIAL RISKS
POTENTIAL OPPORTUNITIES
APPLICATION TO NEW HOPE
Safety
The nature of the Company’s
operations comes with an
inherent risk of accidents which
have the potential to cause harm
to individuals.
Social licence
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.
New Hope seeks to continuously
reduce the frequency of harmful
incidents. Key performance
indicators are designed to
measure safety performance
and targets are set to prevent
harm and promote wellbeing.
Performance in relation to
those measures and targets
is monitored at all levels of the
organisation up to and including
the Board of Directors.
New Hope has developed
valuable and longstanding
relationships with all key
stakeholder groups and is
well respected in the areas
that we operate. Many of
these stakeholder groups
independently advocate on
behalf of the Company which
is a critical component in
developing relationships in
new areas of operation or with
emerging stakeholder groups.
These risks are proactively
managed using comprehensive
safety management systems
as well as a continual focus
on a strong safety culture.
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.
23
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Risk management (continued)
RISK CATEGORY
POTENTIAL RISKS
POTENTIAL OPPORTUNITIES
APPLICATION TO NEW HOPE
The Company has engaged
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.
Detailed impairment
assessments for the assets
have been undertaken as
detailed in note 13 to the
financial statements.
Strategies have been adopted
to extend the life of Stage 2
to ensure supplier and customer
commitments are appropriately
managed while approvals
continue to be pursued.
The Company is actively
pursuing growth through
both development 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 documented
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.
The Company engages with the
Bengalla management team on
an ongoing basis with the aim
to identify, monitor, mitigate
and actively manage risks, not
only unique to Bengalla, but also
risks common to New Acland
and Jeebropilly.
NAC03 approval
There is a risk that approvals
for the NAC03 expansion are
not obtained. These approvals
are critical to ensure operations
continue beyond Stage 2 as
reserves on the existing lease
are depleted.
Obtaining the necessary
approvals for the NAC03 project
will secure employment for the
existing workforce, provide
continuing economic stimulus to
the local community and deliver
value to shareholders.
Risks associated with prolonged
approval delays or an inability
to secure project approvals
include but are not limited to the
potential impairment of asset
values, take or pay commitments
exceeding project requirements
or the potential loss of key
long-term customers.
Project development
The Company’s ongoing
economic sustainability is
dependent on successful
identification and development
of projects. Failure to do
so effectively will limit the
businesses’ longevity.
New Hope actively seeks to
identify potential opportunities
that offer the prospect of
building shareholder value.
New Hope also acknowledges
that sustainable long-term value
creation can only be achieved
by respecting and delivering
positive outcomes for the
broader stakeholder community.
Bengalla Joint Venture From 1 December 2018,
the Company has assumed
a more active role in the direct
management of day to day
activities for the Bengalla Mine.
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 with the Company providing
oversight and governance via
participation in the Bengalla
Joint Venture management
committee and by monitoring
operational performance.
Knowledge gained from risk
identification and management
at one or more mines, including
successful and unsuccessful
approaches to mitigating and
managing those risks can be
shared across management
teams, thereby improving
the groups overall risk
management strategy.
24
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS RISK CATEGORY
POTENTIAL RISKS
POTENTIAL OPPORTUNITIES
APPLICATION TO NEW HOPE
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.
Market forces
The Group’s activities expose
it to a variety of financial risks
including but not limited to
commodity price risk, foreign
currency risk and interest
rate risk.
Monitoring and early
identification of potential failures
will improve productivity and
performance outcomes for the
Company. There is ongoing
effort to identify opportunities
and adopt processes that will
reduce infrastructure failure,
or reduce the cost to the
Company in the event that
a failure does occur.
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.
The Company also actively
participates in a comprehensive
insurance program to ensure
assets are insured for
appropriate value.
Opportunities exist to refine the
existing policies for commodity
price hedging and foreign
exchange hedging such as
investigating the use of different
hedging instruments or the
level of cover that is taken. The
Company also has the ability to
consider active management of
any interest rate and commodity
price exposures.
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 to hedge
risk exposures associated with
fluctuations in foreign exchange
rates and has commenced an
initial trial program to assess the
appropriateness of coal price
commodity hedging.
Climate change
RISK CATEGORY
POTENTIAL RISKS
POTENTIAL OPPORTUNITIES
APPLICATION TO NEW HOPE
Policy risk
Domestic and
international policy
actions around climate
change continue
to evolve.
Changes in government
regulations in Australia which
restrict the use of coal, or the
use of land for coal mining, could
impact the ability of the Group to
develop new coal projects, or to
extend the life of existing projects.
The introduction of new and/or
more stringent carbon pricing
mechanisms, both within
Australia as well as key coal
importing countries, may reduce
the cost competitiveness of coal
as an energy source.
Changes in government policy
relating to either coal consumption
or energy generation in large
Asian economies such as China,
Japan and India could impact the
longer term outlook for global
coal demand.
Global political disputes or policy
positions may restrict the ability
to export or import coal from
certain ports or through certain
shipping channels.
Changes in government
policy which increase the
cost of land rehabilitation
requirements and bring
forward the timing of various
rehabilitation obligations.
As the global economy
transitions towards lower
emission energy sources, it is
likely there will be an ongoing
demand for high quality thermal
coal to supply High Efficiency
Low Emissions (HELE) coal
fired power stations in order to
generate affordable base load
power. The Group’s high quality
thermal coal reserves are ideally
placed to meet that demand.
New Hope’s Bengalla Mine has
existing approvals that extend
to 2039, enabling New Hope
to avoid potentially lengthy and
costly mine extension approvals.
New Hope has long standing
experience with undertaking
progressive rehabilitation at its
sites in Queensland. There is
an opportunity to leverage this
expertise across the Group’s
other operations to effectively
manage any changes to
rehabilitation obligations.
Ongoing demand for the
Group’s high quality thermal
coal is anticipated to underpin
the Group’s revenues in the
short to medium term.
Changes in the longer term
global coal demand outlook
could have an impact on the
Group’s future coal revenues
and the recoverability
of undeveloped coal
reserve assets.
The financial impact of any
future policy changes will
depend on the nature and
timing of those changes.
Note 10 Property, Plant
and Equipment, Note 12
Exploration and Evaluation
and Note 14 Provisions have
identified specific financial risks
associated with policy risk.
The Group will continue to
proactively monitor the policy
environment both domestically
and internationally and take
appropriate steps to manage,
maximise opportunities and
mitigate risks associated with
policy changes.
25
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Climate change (continued)
RISK CATEGORY
POTENTIAL RISKS
POTENTIAL OPPORTUNITIES
APPLICATION TO NEW HOPE
The group could incur increased
costs associated with defending
legal claims related to coal
mining operations or when
seeking project approvals.
Land rehabilitation
requirements, both from
a timing and cost perspective,
may increase. Refer to Policy
Risk discussion.
The Group has a strong,
long standing reputation for
operating in a responsible and
respectful way. This includes
the support of the communities
in which we operate, and
an excellent track record of
regulatory compliance. This
strong reputation will enable
the Group to distinguish itself
as an “operator of choice” for
both current and future projects.
The recoverability of
undeveloped coal reserve
assets will be underpinned
by the ability of the Group to
secure and maintain necessary
project approvals.
Note 13 of the financial
statements specifically
considers the assessment of
impairment for the QLD mining
CGU which has been triggered
by indicators of impairment
arising from the delays in
securing necessary approvals
for the mine extension.
Legal risk
Increased litigation
from shareholders,
insurers and activist
organisations against
governments and
companies, either
seeking compensation
for damages caused
to them because
of climate change
impacts or to force
greater action on
climate change.
Technology risk
Technological
improvements or
innovations that
support the transition
to a lower-carbon
economy will affect
the competitiveness of
certain organisations,
their production and
distribution costs, and
ultimately the demand
for their products
and services from
end users.
Demand for coal could be
impacted if future improvements
in the efficiency, affordability,
and reliability of alternative
energy sources and battery
storage solutions occur at
a faster pace than similar
improvements in the thermal
coal industry.
The continued development
of HELE coal fired power
stations (and other clean coal
technology) underpin the
demand for the Group’s high
quality thermal coal assets.
Additional details of these
technologies and opportunities
will be considered in the Group’s
Sustainability Report to be
released later this year.
The timing of technology
development and deployment
is a key uncertainty in assessing
the financial implications of
technology risk.
The financial implications of
technology risk, as they relate
to coal demand, are similar to
those noted above for policy
risk.
There is an opportunity for
the Group to leverage its
existing innovative capabilities
to derive further cost
efficiencies from emerging
developments in energy-
efficient mining equipment.
The Group will continue
to monitor developments
that have application to the
mining and broader energy
industries and invest in new
technologies where they
deliver an acceptable return
on investment.
The Group will continue to work
closely with its key customers
to ensure it is well positioned
to meet the demand for high
quality thermal coal.
The Group will proactively
monitor the market environment
and take appropriate steps
to manage the impact of any
shifts in supply and demand for
thermal coal.
There is an opportunity for
the Group to leverage the
anticipated sustained demand
for high quality thermal coal
as part of a diversified energy
portfolio. The role of the Group’s
high quality thermal coal and
its position in the market will
be outlined further in the
Sustainability Report to be
released later this year.
Pressure from external
stakeholders could see some
producers exit the thermal
coal industry with a resultant
reduction in supply and
increase in pricing for remaining
industry participants.
Market risk
Markets could be
affected by the
transition to a lower
carbon global economy
through shifts in
supply and demand for
certain commodities,
products, and services
as climate-related
risks and opportunities
are increasingly taken
into account.
Demand for thermal coal
could be impacted if alternative
energy sources become more
competitive and reliable,
relative to thermal coal
as an energy source.
The number and mix of market
participants could lead to
increased volatility in the supply
and pricing of thermal coal.
26
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS RISK CATEGORY
POTENTIAL RISKS
POTENTIAL OPPORTUNITIES
APPLICATION TO NEW HOPE
Reputation risk
Customers, suppliers
and other stakeholders
have begun including
climate related
considerations into
their decision making
process around which
businesses they will
engage with.
Pricing for financing and key
services such as insurance may
increase if the pool of parties
prepared to partner with the
thermal coal industry reduces
significantly.
Increased regulatory
compliance costs.
The ability to attract and retain
a suitably skilled workforce
could be impacted by employee
perceptions about what it
means to work in the coal
mining industry.
The Group may see an increase
in specific costs such as
interest expense and insurance
premiums as well as increasing
workforce related costs.
The Group will work to manage
the impact of these potential
cost increases through the
ongoing implementation
of operational efficiency
initiatives including through
the deployment of emerging
technological solutions and the
consideration of non-traditional
markets for access to financing
and key services such
as insurance.
New Hope has a long and
enviable reputation for being
a respectful and trustworthy
operator. The Company has
formed strong relationships
with the communities in which
we operate, our employees,
suppliers, customers, and
regulatory bodies with many
of these relationships spanning
multiple decades. The continuity
of these relationships are
underpinned by a strong
corporate culture which
acknowledges that long-term
success can only be achieved
by respecting the views of our
key stakeholders. New Hope
has the ability to leverage and
grow this support base so as
to differentiate the Company
from its peers and be seen
as an “Operator of Choice”.
Physical risk
Climate change
modelling suggests that
climate change has the
potential to increase
the frequency and
intensity of extreme
weather events as well
as longer term shifts
in climate patterns.
An increase in the intensity and
frequency of extreme weather
events may have the potential
to damage infrastructure
and interrupt mining and
port operations.
An increase in temperatures
could impact the health and
safety workplace requirements
for employees as per the
relevant Occupational Health
and Safety regulations.
Sustained increase in
temperatures as well as
intensity and duration of
droughts, may have a longer
term impact on operational
reliability or longevity of
mining equipment.
The Group’s key operations
are located in geographic
areas which are not areas of
high risk in relation to extreme
weather events such as
cyclones or flooding. This may
give the Group competitive
advantage relative to other
market participants.
While direct risks associated
with lost production time or
increased costs due to weather
are considered to be a low
possibility and low consequence
they continue to be pro-actively
managed through the
Company’s standard risk
management process.
New Hope’s existing New
Acland Mine utilises recycled
waste water from the Wetalla
Waste Water treatment facility.
This provides the Company with
a competitive advantage for this
site, which could be potentially
duplicated and leveraged
at other locations.
The most significant of these
risks would be a loss of key
infrastructure for a prolonged
period, which is actively
managed with a dedicated
risk action plan.
27
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Insurance of officers
In accordance with the provisions of the Corporations Act 2001, New Hope Corporation Limited (the Company, Corporation
or parent entity) has a Directors’ and Officers’ Liability policy covering Directors and Officers of the Group. The insurance policy
prohibits disclosure of the nature of the liability insured against and the amount of the premium.
Proceedings on behalf of the Corporation
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Corporation, or to intervene in any proceedings to which the Corporation is a party, for the purpose of taking responsibility
on behalf of the Corporation for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
Significant changes in the state of affairs
The coal mining industry has a history of cyclical pricing based on global coal indices creating more and less favourable
conditions. The current global economic conditions driven primarily by the COVID-19 pandemic have created less favourable
conditions. Other than this and matters outlined 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 the financial year
No events have occurred since 31 July 2020, which would require disclosure in the financial report.
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 the New Hope Corporation website at:
www.newhopegroup.com.au/content/investors/corporate-governance.
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.
28
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Sustainability
The Board maintains direct oversight of climate-related risks and opportunities through its corporate risk management processes
and is assisted in this by the Audit and Risk Committee. Responsibility is delegated to Management for the identification and
ongoing management of the opportunities and risks of climate change.
The Group recognises that there is a shift in the market in respect of primary energy sources from coal to lower-carbon
alternatives and that there are opportunities and risks associated with this change. The Group acknowledges the increasing
interest from various stakeholders and the need for increased transparency of climate related opportunities and risks to the
business in the medium to long-term.
The Group have developed a framework for guiding its strategy and disclosure regarding the sustainability of its operations
including managing potential risks posed by changes to the external environment from a physical, policy, legal, market
demand, reputational and technological perspective and has considered the Taskforce on Climate-related Financial Disclosures
(TCFD) Recommendations as part of establishing its strategy and framework. A review of peer disclosures and a stakeholder
engagement program was undertaken in the 2020 financial year to guide material topics for sustainability disclosures.
The Group will release further information in a separate Sustainability Report later this year.
Environmental compliance
During the 2020 financial year, the Group did not receive any Penalty Infringement Notices and was not prosecuted for any
breach of environmental laws.
Environmental performance
The Company’s businesses include coal mining operations and exploration activities in Queensland and New South Wales
(NSW), the QBH coal export port facility and oil and gas operations and exploration activities in Queensland.
The key pieces of Queensland environmental legislation are the Environmental Protection Act 1994, the Water Act 2000,
and the Nature Conservation Act 1992. Principal environmental legislation in NSW includes the Environmental Planning
and Assessment Act 1979, Protection of the Environment Operations Act 1997 and the Water Management Act 2000.
The main Commonwealth environmental legislation is the Environment Protection and Biodiversity Conservation
Act 1999, which operates across Australian states and territories in the interests of the protection of matters of national
environmental significance.
The Group’s operations continue to undertake proactive initiatives to improve their environmental performance.
The New Acland Operations implemented noise and air quality management systems that uses predictive forecasting and
real-time monitoring data to guide the day to day planning of mining operations and the implementation of both proactive
and reactive mitigation measures to manage noise and air quality impacts.
During the year the Bengalla operations commenced the High Density Woody Vegetation Plan to enhance existing rehabilitated
areas and rehabilitate new areas. 17,000 trees were planted over 12.8Ha. The implementation of this plan will continue to 2024.
Environmental systems
During the reporting period the Group began a three year process to develop and implement a combined Health, Safety and
Environmental (HSE) Management System. This system will enable the Group’s operations to effectively manage their HSE
performance by understanding and mitigating risk, complying with legal responsibilities, monitoring and auditing HSE processes
and operational controls 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 with the Bengalla Mine reporting through the operator currently
Bengalla Mining Company Pty Ltd.
29
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Information on Directors
MR R.D. MILLNER (NON-EXECUTIVE CHAIRMAN)
Experience
Mr Millner is Chairman of the Company’s holding company, Washington H. Soul Pattinson and Company Limited. Mr Millner
joined the Board of New Hope Corporation Limited on 1 December 1995 and was appointed Chairman in 1998. He has
extensive experience in the investment industry.
Other current listed Directorships
Washington H. Soul Pattinson and Company Limited
Appointed 1984
Chairman since 1998
Former listed Directorships in last three years
Hunter Hall Global Value Limited
Appointed as an interim Director April 2017
Resigned June 2017
Apex Healthcare Berhad
Appointed 2000
BKI Investment Company Limited
Appointed 2003
Chairman since 2003
Brickworks Limited
Appointed 1997
Chairman since 1999
Milton Corporation Limited
Appointed 1998
Chairman since 2002
TPG Telecom Limited
Appointed 2000
TUAS Limited
Appointed 30 June 2020
Australian Pharmaceutical Industries Limited
Appointed 2000
Resigned 9 July 2020
Special responsibilities
Chairman of the Board
Interests in shares and options
4,177,774 ordinary shares in New Hope Corporation Limited
(comprising 204,559 shares directly held and 3,973,215
shares held through family related interests)
Nil options or rights over ordinary shares in New Hope
Corporation Limited
MR T.J. BARLOW – BBUS, LLB (HONS) (NON-EXECUTIVE DIRECTOR)
Experience
Mr Barlow joined the Board of New Hope Corporation Limited on 22 April 2015. He has been the Managing Director
of Washington H. Soul Pattinson and Company Limited (WHSP) since 2015 after joining as Chief Executive Officer in 2014.
He was previously the Managing Director of Pitt Capital Partners Limited for five years. Mr Barlow has extensive experience
in mergers and acquisitions, equity capital markets and investing and has been responsible for a number of WHSP’s investments
since joining the WHSP Group in 2004. His career has spanned positions in law and investment banking in Sydney and Hong
Kong. Mr Barlow has a Bachelor of Business and Bachelor of Laws (Honours) from the University of Technology, Sydney.
Other current listed Directorships
Washington H. Soul Pattinson and Company Limited
Appointed 2015
Palla Pharma Limited
Appointed 2015
Former listed Directorships in last three years
PM Capital Asian Opportunities Fund Limited
Appointed 2015
Resigned 2017
Special responsibilities
Chair of the Nomination Committee, Member of the Human
Resources and Remuneration Committee and Member of the
Audit and Risk 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
30
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 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 Chief
Executive Officer of South Bank Corporation in Brisbane from 1997 to 2005 and General Manager/Chief Executive Officer of the
Newcastle City Council from 1992 to 1997. He retired as Chairman of Brisbane Airport Corporation in 2017 after almost 10 years.
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
Other current listed Directorships
Nil
Former listed Directorships in last three years
Nil
Special responsibilities
Chair of the Human Resources and Remuneration
Committee, Chair of the Bridgeport Energy Limited Board,
Member of the Nomination Committee and Member of
the Audit and Risk Committee
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. He is also a Non-Executive Director of Washington H. Soul Pattinson and Company Limited
(SOL:ASX). Mr Millner’s experience includes 18 years within the financial services industry, including 16 years in active
portfolio management of Australian equities; nine years’ as a Chief Executive Officer of an Australian publicly listed company,
BKI Investment Company Limited (BKI:ASX); and nine years as a Director of Australian publicly listed companies.
Mr Millner has a Bachelor of Industrial Design degree and a Graduate Diploma in Applied Finance. He is a Fellow of the Financial
Services Institute of Australasia and a Graduate of the Australian Institute of Company Directors.
Other current listed Directorships
Washington H. Soul Pattinson and Company Limited
Appointed 2011
Former listed Directorships in last three years
Nil
Interests in shares and options
3,994,368 ordinary shares in New Hope Corporation Limited
(comprising 21,153 directly held shares and 3,973,215 shares
held through family related interests)
Nil options or rights over ordinary shares in New Hope
Corporation Limited
Special responsibilities
Nil
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 over the last 25 years. 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 three years
Nil
Special responsibilities
Acting Chair of the Audit and Risk Committee, Member of the
Human Resources and Remuneration Committee, Member
of Nomination Committee and Non-Executive Director
New Hope Japan KK
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
31
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Information on Directors (continued)
MS JACQUELINE MCGILL AO – BSC, MBA, GAICD (NON-EXECUTIVE DIRECTOR)
Experience
Ms Jacqueline McGill AO was appointed as a Non-Executive Director of the Company on 22 June 2020. Jacqueline is a highly
accomplished Executive and Non-Executive Director with broad strategic and deep operational leadership across a range
of sectors.
She is Chair of TAFE South Australia, Member of South Australian Premier’s Economic Advisory Council, Director of Royal
Automobile Association of South Australia and Non-Executive Director at South Australian Art Gallery. She has previously
held Non-Executive Director roles with a range of logistics and infrastructure organisations, and she was Vice President of the
South Australian Chamber of Mines and Energy. During her executive career she held senior leadership roles with BHP including
leadership of BHP Mitsui Coal and Olympic Dam Corporation.
Other current listed Directorships
Nil
Former listed Directorships in last three years
Nil
Special responsibilities
Member of the Audit and Risk Committee and Member
of the Human Resources and Remuneration Committee.
Interests in shares and options
Nil 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 (MANAGING DIRECTOR UNTIL 31 AUGUST 2020)
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 Chief Executive Officer on 1 February 2014 and Managing Director on 20 November 2014.
Shane retired on 31 August 2020.
Other current listed Directorships
Nil
Former listed Directorships in last three years
Nil
Special responsibilities
Chief Executive Officer, appointed 1 February 2014 and retired
31 August 2020, Managing Director, Appointed 20 November
2014 and retired 31 August 2020.
Interests in shares and options
921,234 ordinary shares in New Hope Corporation Limited
(comprising 896,234 held directly and 25,000 ordinary shares
held by Family related interests)
Nil options or rights over ordinary shares in New Hope
Corporation Limited
32
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS MS S.J. PALMER – BCOM, CA, FAICD (NON-EXECUTIVE DIRECTOR UNTIL 25 NOVEMBER 2019)
Experience
Ms Palmer is a Chartered Accountant with over 30 years’ experience in the financial and resources fields. Her expertise extends
to all aspects of accounting, finance, financial reporting, risk management and corporate governance. Sue was formerly Chief
Financial Officer and Executive Director with Thiess Pty Ltd. Ms Palmer was appointed as a Non-Executive Director to the
New Hope Corporation Limited Board on 1 November 2012 and resigned on 25 November 2019.
Other current listed Directorships
Charter Hall Retail REIT
Appointed 2015
Qube Holdings Ltd
Appointed 2017
Former listed Directorships in last three years
RCR Tomlinson Ltd
Special responsibilities
Former Chair of the Audit and Risk Committee
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
Company Secretary
MS J. S. MOODY – B.BUS (DIST.), LLB (HONS), GRAD. DIP. LEGAL PRACTICE, GAICD, FGIA
Ms Janelle Moody was appointed Company Secretary and Joint Venture Manager on 31 May 2016. She was appointed General
Counsel on 1 May 2018 and Executive General Manager Legal on 1 January 2019.
Ms Moody has extensive legal experience and has specialised in the area of corporate and commercial matters for the resources
industry for over 20 years. Prior to joining New Hope Corporation Limited, Janelle was running her own legal practice, and has
previously been a Partner in the law firm McCullough Robertson. She leads the Company’s in-house legal team and continues
in her role as Company Secretary and Joint Venture Manager for the Company’s interests in the Bengalla Joint Venture, Lenton
Joint Venture and Yamala Joint Venture. She holds a Bachelor of Business – Accountancy (Distinction), a Bachelor of Laws
(Honours) and a Graduate Diploma in Legal Practice. Janelle is a Graduate of the Australian Institute of Company Directors
and a Fellow of the Governance Institute of Australia.
33
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Letter from the Chair of the Human Resources
and Remuneration Committee
Dear Shareholders,
On behalf of the Board of Directors, the Human Resources and Remuneration Committee (HRRC) is pleased to present the
Remuneration Report for the financial year ended 31 July 2020. The report outlines the nature and amount of remuneration
for New Hope Corporation Limited’s (New Hope or the Company) Non-Executive Directors, Executive Director and other
Key Management Personnel (collectively the KMP).
During the 2020 financial year the Committee has reviewed the Company’s remuneration policies, practices and disclosure
in the interests of all stakeholders. We recognise that executive remuneration is a key focus for investors. We have continued
to improve our disclosures in this year’s Remuneration Report to improve transparency in how we determine executive
remuneration outcomes, in particular the variable pay components. This report provides shareholders with insights into the
remuneration governance, policies, procedures and practices being applied, so that informed judgements can be made in relation
to the Remuneration Report at the upcoming Annual General Meeting (AGM).
The Company’s objective in the design of its executive remuneration policy is to attract, motivate and retain a talented executive
team to lead the business and deliver long-term performance goals. As New Hope approaches the milestone of being in
business for seventy years, the Board and executive have refreshed the Company’s Vision, Purpose and Values to enable our
business to prosper in an ever-changing world.
The Company’s performance over the past 12 months can best be described as a year of two distinct halves. Whilst the
Company achieved good financial performance in the first half, the second half financial performance was negatively impacted
by a materially lower AUD coal price. The COVID-19 global pandemic induced shutdowns disrupted demand for electricity and
therefore demand for thermal coal in our key markets in Asia. During the second half year the Company responded to these
unprecedented challenges quickly through the introduction of systematic control measures at our production sites and was
thereby able to reliably continue supplying our customers.
While the targets set in 2019 could not anticipate the impact of the global pandemic, the Board has actively considered the
exercise of its discretion in relation to remuneration outcomes in these uncertain times. The Board and Executive has reviewed
the variable pay framework and determined to forgo short-term incentive payments to the Executive for this financial year which
would normally have been paid during October 2020. In addition, the Board and Executive has introduced a temporary reduction
of 10% in remuneration and hours in relation to the Executive and corporate office effective 1 July 2020 for a period of three
to six months. A review was also undertaken of the workforce requirements resulting in a 12.5% reduction in corporate office
employees. The Board believes these decisions are reasonable and appropriate for all stakeholders.
Director’s fees were reviewed during 2020 and no increases were made effective 1 January 2020. Furthermore, the Directors
fees were reduced effective 1 July 2020 in response to the general economic climate and resulting impact on the Company’s
financial performance for this financial year. The membership of the Board also changed during the year with Ms Sue Palmer
resigning from her position as an Independent Non-Executive Director after more than seven years of service. The Board is
pleased to welcome Ms Jacqueline McGill to the Company as an Independent Non-Executive Director who joined the Board from
22 June 2020. Ms McGill has extensive experience as an Executive and Non-Executive Director. She was awarded an Order of
Australia (AO) in 2020 for distinguished service to the minerals and mining sector and to gender equality and workplace diversity.
Changes to the fixed remuneration increases for the Executive KMP (including the Chief Executive Officer and Managing
Director) occurred during the financial year 2020, with an increase of 2.98% which took effect from 1 January 2020. During
May 2020 the Company announced the retirement of Chief Executive Officer and Managing Director, Shane Stephan effective
31 August 2020 after 11 years with New Hope. Reinhold Schmidt commenced with the Company on 3 August 2020 and
was officially appointed CEO from 1 September 2020 after a period of transition. His appointment followed the completion
of a comprehensive selection process undertaken with the assistance of an independent executive search firm.
The Board intends to introduce a new short-term incentive policy for the upcoming 2021 year and will continue to consider what
further improvements to remuneration governance, policies, procedures and practices could be made. Future Remuneration
Reports will provide updates ensuring that remuneration continues to evolve in line with prevailing market conditions, relevant
best practice and evolving stakeholder expectations. Given the financial results for the 2020 year, the Board is satisfied there
is an appropriate link between Company performance and KMP remuneration. The Board is confident that the Company’s
remuneration policies continue to support its financial and strategic goals.
The Board is committed to transparency, welcomes feedback in relation to this report and is committed to engaging with all
stakeholders on these matters. The Committee trust that you find this report informative and we look forward to receiving your
support for the resolution approving this report at the 2020 AGM.
W.H. Grant
Chair of the Human Resources and Remuneration Committee
34
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Remuneration report
The information provided in the remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.
Persons addressed and scope of the remuneration report
The Remuneration Report sets out the remuneration information of the Company’s KMP in accordance with section 300A
of the Corporations Act 2001 and associated regulations. KMP are those persons who, directly or indirectly, have authority
and responsibility for planning, directing and controlling the major activities of the Company.
The names and positions held by the Company’s KMPs in office at any time during the financial year are outlined below:
NAME
POSITIONS HELD
COMMENCEMENT DATE
Directors
Mr R.D. Millner
Non-Executive Director
Chair
Mr T.J. Barlow
Non-Executive Director
Mr W.H. Grant
Independent Non-Executive Director
Chair of the Nomination Committee
Chair of the Human Resources and Remuneration Committee
Ms J.E. McGill
Mr T.C. Millner
Chair of Controlled Subsidiary
Independent Non-Executive Director
Non-Executive Director
Ms S.J. Palmer 1
Independent Non-Executive Director
Mr I.M. Williams
Independent Non-Executive Director
Chair of the Audit and Risk Committee
Acting Chair of the Audit and Risk Committee
Non-Executive Director of Controlled Subsidiary
Executive KMP
Mr S.O. Stephan 2
Mr A.L. Boyd
Mr M.J. Busch 3
Managing Director (MD)
Chief Executive Officer (CEO)
Chief Operating Officer (COO)
Chief Financial Officer (CFO)
Mr B.C. Armitage
Chief Development Officer (CDO)
1 Ms S.J. Palmer ceased as a Director on 25 November 2019.
1-Dec-95
27-Nov-98
22-Apr-15
25-May-06
15-Nov-07
17-Mar-14
22-Jun-20
16-Dec-15
1-Nov-12
1-Nov-12
25-Nov-19
02-Sep-19
20-Nov-14
19-Dec-15
1-Feb-14
1-Feb-19
2 Mr S.O. Stephan employment ceased on 31 August 2020. Mr R.H. Schmidt has been appointed as the new CEO effective 1 September 2020.
3 Mr M.J. Busch’s employment ceases on 12 October 2020. An acting CFO, Mr R.J. Bishop has been appointed for an interim period from 20 July 2020
to 31 January 2021 and will be a KMP from 1 August 2020.
35
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Remuneration report (continued)
Remuneration governance
The performance of the Company depends upon the quality of its Directors and Executives. It is our objective to attract and
retain appropriately qualified and experienced Directors and Executives.
The Board maintains overall responsibility for the remuneration of the KMP and is responsible for ensuring the structures
are competitive and aligned with the longer-term interests of the Company and shareholders. While the Board maintains
overall responsibility and approval for the KMP remuneration, it delegates oversight to the HRRC to review, report and make
recommendations to the Board in relation to remuneration.
The HRRC has a formal Charter and comprises Mr Grant (Chair), Mr Barlow and Mr Williams and meet four times a year
to discuss and review remuneration and people related matters. Specifically, the HRRC is responsible for reviewing and setting
the remuneration framework, policies and arrangements for Directors and Executives on an annual basis. Further information
regarding the HRRC’s Charter including role, membership requirements and responsibilities can be viewed on the Company’s
website www.newhopegroup.com.au.
To ensure that remuneration is consistent with current industry practices the HRRC seeks and considers advice from a wide
range of sources including:
Shareholders;
External remuneration consultants;
Other experts and independent consultants;
Management; and
Independent surveys and reviews, other market information and reports.
No remuneration recommendations were received in the 2020 financial year as defined by the Corporations Act 2001.
Securities trading policy
The Trading in Company Securities Policy applies to all Directors, employees, contractors and consultants of the Group.
The Policy sets out the guidelines for dealing in any type of Company Securities and summarises the law relating to insider
trading which applies to everyone. Additional restrictions and obligations apply to Restricted Personnel who are:
KMPs;
Any member of the Executive Leadership Team;
Any employee or consultant of the Group who works in the Finance team, the Legal team, or the Corporate Development team;
Any employee or consultant of the Group designated by the Chair of the Board or the Chief Executive Officer of the Company
as a person to whom the policy applies and who has been notified of that designation by the Company Secretary;
Any executive assistant to any of the above; and
Spouses, minor children and any companies or trusts that any of the above people control or have an interest in.
Under the policy trading is prohibited by Restricted Personnel unless:
During a “trading window” determined by the Board from time to time which is generally six weeks from the day after
the announcement of the Company’s half year and full year results; or
With the relevant approval required by the Policy.
Trading is prohibited:
At any time while being in the possession of price sensitive information that is not generally available; and
For short-term or speculative gain.
KMPs must notify the Company Secretary of their trading within 24 hours after the transaction. Personnel are prohibited
from entering into margin loans or products which operate to limit the financial risk associated with holding the securities
(e.g. hedging arrangements).
36
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Employment contracts
The agreements with the Executive KMP detail the individual terms and conditions of employment applying to the Executive
KMP. They provide for a cash salary, superannuation and motor vehicle allowance, details of which are provided elsewhere
in this report. Executive KMP may elect to salary sacrifice a portion of their cash salary into superannuation or other benefits.
The details of key employment terms are detailed below.
NAME
Mr S.O. Stephan
Mr A.L. Boyd
Mr M.J. Busch
Mr B.C. Armitage
TERM OF AGREEMENT
AND NOTICE PERIOD 1
BASE REMUNERATION PLUS
SUPERANNUATION 2
TERMINATION
PAYMENTS 3
No fixed term.
6 months’ notice period.
No fixed term.
3 months’ notice period.
No fixed term.
3 months’ notice period.
No fixed term.
3 months’ notice period.
$1,500,000
6 months’ base remuneration
$851,160
3 months’ base remuneration
$652,740
3 months’ base remuneration
$616,000
3 months’ base remuneration
1 This notice applies equally to all parties.
2 Fixed remuneration quoted is current as at 31 July 2020; they are reviewed annually by the HRRC.
3 Base salary payable if the Company terminates the above employees with notice, and without cause (e.g. for reasons other than unsatisfactory
performance) as defined in their employment contracts. In the event of summary termination, it is without notice or payment in lieu.
Remuneration structure – Non-Executive Directors
Remuneration of Non-Executive Directors is determined by the Board with reference to market rates for comparable companies
and reflective of the responsibilities and commitment required of the Director. In recognition of the unprecedented events
of COVID-19 and the impacts on the Company, the Board determined to reduce the fees payable to Non-Executive Directors
effective 1 July 2020. As such the table below lists the changes to the fees against the previous period. Shareholders have the
opportunity to provide feedback to the Company in respect of remuneration of Non-Executive Directors each year via their
consideration of the Remuneration Report at the Company’s AGM.
Non-Executive Directors are paid within an aggregate fee limit which is approved by shareholders. The current limit is $1,750,000
and was approved by shareholders on 15 November 2012. In the 2020 financial year, the aggregate amount expended for
Non-Executive Directors remuneration was at 81% of this limit, which increased slightly on previous year due to Directors fees
in relation to Controlled Subsidiaries. The Board will not seek an increase to the aggregate fee pool limit at the 2020 AGM.
Non-Executive Directors are paid a fixed annual fee (inclusive of superannuation where relevant). The fees payable
to Non-Executive Directors in financial year 2020 are inclusive of superannuation and did not increase from the previous year.
Non-Executive Directors receive fees only and do not participate in any performance-related incentive awards. Non-Executive
Directors do not receive retirement benefits.
Non-Executive Director fees currently consist of base fees for the Chair and Non-Executive Directors and fees for the Chairs
of the Human Resources and Remuneration Committee and Audit and Risk Committee. The Board intends to introduce fees
for committee members of these two committees for the upcoming 2021 year. The payment of committee fees recognises
the additional time commitment required by Non-Executive Directors who serve on Board committees. Effective 1 July 2020,
the applicable fees will be as follows:
37
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Remuneration report (continued)
Remuneration structure – Non-Executive Directors (continued)
APPOINTMENT
Chair
Non-Executive Directors
Chair of the Human Resources and Remuneration Committee
Chair of the Audit and Risk Committee
Chair of Controlled Subsidiary
Non-Executive Director of Controlled Subsidiary
Member of the Human Resources and Remuneration Committee
Member of the Audit and Risk Committee
PREVIOUS FEES
PAYABLE
$
FEES PAYABLE
1 JULY 2020
$
328,364
155,308
17,256
54,750
47,141
32,850
–
–
240,900
142,350
17,256
54,750
47,141
32,850
10,950
10,950
Non-Executive Directors may trade and hold equity investments in the Company in accordance with the Trading in Company
Securities Policy which is available from the Company website. Non-Executive Directors are eligible to participate in the
Company’s equity plans, however at present Non-Executive Directors do not receive shares, share options or any performance
related incentives as part of their fees from the Company.
When required to travel for Board meetings the Directors seek to minimise company travel costs and utilise video conferencing
technology on occasion. Furthermore, Board meetings are often scheduled to coincide with Company events and tours of the
mine sites which provide the Board with the opportunity to engage with employees and the Operations.
Remuneration structure – Executive KMP
Remuneration of the Company’s Executive KMP is underpinned by the Company’s Vision and Core Values.
Our Vision: Energising our People, Communities and Customers.
Our Purpose: To deliver long-term shareholder value through responsible investment, marketing and asset management.
OUR CORE VALUES
INTEGRITY
RESPECT
ACCOUNTABILITY
WELLBEING
RESILIENCE
COLLABORATION
We are ethical,
honest and can
be trusted to do
the right thing
We listen and
treat others as
we expect to be
treated
We are
empowered and
accountable for
our actions
We all seek to
prevent harm,
promote safety
and enhance
health
We are
adaptable and
see opportunity
in change
We work
together and
focus on the
best outcome
THE COMPANY’S REMUNERATION OBJECTIVES
Attract quality Directors
and Executives
Deliver the Group’s
short-term objectives
Deliver sustainable
and long-term
shareholder value
Aligned to the Company’s
Vision, Purpose and
Core Values
38
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS The following table summarises the Company’s policy regarding Executive KMP remuneration and how it is intended to be
structured, benchmarked and adjusted in response to changes in the circumstances of the Company, its business strategy and
in line with good governance:
TOTAL FIXED REMUNERATION (TFR)
SHORT‑TERM INCENTIVE (STI)
LONG‑TERM INCENTIVE (LTI)
EXECUTIVE KMP REMUNERATION COMPONENTS
Purpose
To attract, motivate and retain
Executive KMP with the
appropriate skills and capabilities
in order to deliver our Vision and
Purpose in accordance with our
Core Values.
Create a strong link between
performance and reward over
the short to medium-term.
Focus the attention of the
Executive KMP on delivering
against short-term goals
that underpin the success
of the Company.
Create a strong link between
performance and reward over
the long-term. Encourage
sustainable, long-term
value creation through
equity ownership.
Align the long-term interests
of shareholders with the
Executive KMP who have a key
role in influencing the creation
of long-term value.
Link to
performance
Motivation to drive a strong
and positive culture and deliver
on the business strategy.
Strategic annual objectives
embedded in each Executive
KMP’s personalised scorecard
of KPIs.
Performance hurdles are set by
the Board over three year periods
to deliver sustained security
holder value.
Performance
measures
Individual accountabilities for
each Executive KMP position
that support the execution
of the business strategy.
The Executive KMP receive
a fixed amount which is
recommended annually by the
HRRC and set by the Board.
Individual Executive KMP
performance indicators are
based upon the short-term
requirements of the role and
needs of the Company.
Company performance
indicators including group
financials, production, sales,
culture, sustainability, safety
and individual objectives
that underpin the short-term
success of the Company.
Delivery
Competitive market based fixed
remuneration comprising of
base salary, superannuation
and other non-cash benefits
(e.g. company vehicle).
Cash bonus payable upon
the Executive KMP achieving
required performance hurdles
in a sustainable manner for the
relevant financial year.
The maximum STI entitlement
payable to each Executive KMP
is currently between 30% and
37% of their TFR (depending
on the role).
Long-term Company
performance is measured by
the relative shareholder return
achieved by the Company over
a three year period against the
ASX 200.
Individual Executive KMP
performance indicators are based
upon the long-term requirements
of the role and needs of
the Company.
Performance Rights which
convert to ordinary shares
upon the satisfaction of the
Executive KMP meeting
required performance hurdles
in a sustainable manner
and satisfying the requisite
service conditions.
The maximum LTI entitlement
payable to each Executive KMP
is currently between 30% and
37% of their TFR (depending
on the role).
Market
positioning
Internal relativities and external market factors are considered when calculating the TFR, STI and LTI
for each role. Remuneration is managed within a range so as to allow for the recognition of individual
differences such as the calibre of the incumbent and the competency with which they fulfil a role.
The Company typically targets remuneration levels at the median of the relevant market so as to create
a strong incentive to achieve objectives.
All components of remuneration are structured with reference to market practices and the circumstances
of the Company at the time.
39
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Remuneration report (continued)
Remuneration structure – Executive KMP (continued)
The following diagram sets out the maximum remuneration mix for the Executive KMP.
CEO
COO
CFO
CDO
$1,500,000
$851,160
$652,740
$616,000
$555,000
$555,000
$297,906
$297,906
$195,822
$195,822
$197,120
$197,120
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Maximum Potential
TFR
STI
LTI
Fixed remuneration
TFR for Executive KMPs is recommended annually by the HRRC and set by the Board. It comprises a cash salary,
superannuation, and other non-cash benefits (e.g. a vehicle allowance). Our fixed remuneration strategy is to pay at market
competitive rates to attract and retain talent.
Remuneration levels are set based on role size, scope and leadership accountability and managed within a range so as to allow
for the recognition of individual differences such as the calibre, skills, experience and qualifications of the incumbent and the
competency with which they fulfil a role. In reviewing the fixed remuneration levels we benchmark externally against comparable
roles in similar ASX companies in the resources industry.
Short-term incentives
The Company’s STI policy may be summarised as follows:
Executive KMPs are offered STI entitlements as part of their remuneration package in order to:
– Motivate Executive KMPs to achieve the short-term objectives linked to Company success;
– Create a strong link between performance and reward;
– Ensure behaviour which it aligned to and demonstrates the Company’s Core Values;
– Share Company success with the Executive KMPs that contribute to it; and
– Create a component of the employment cost that is responsive to short to medium-term changes in the circumstances
of the Company.
Non-Executive Directors do not currently receive STI entitlements;
STI entitlements are measured against the performance of the Company and the Executive KMPs across a given financial
year; and
STI payments are outcome focused and based upon both the performance of the individual and broader executive team
in delivering successful outcomes for the Company.
The Company intends to introduce a new STI policy for the year commencing 1 August 2020. The new policy will further
reinforce the link between performance and reward by enhancing alignment between Company, business unit and individual
performance and STI award. This new policy will continue to support the connection between pay and performance that
supports discretionary effort and assists with attracting, motivating and retaining talent.
40
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Long-term incentives
The Company’s LTI policy may be summarised as follows:
Executive KMPs are offered LTI entitlements as part of their remuneration package in order to:
– Motivate Executive KMPs to achieve objectives linked to shareholder value creation over the long-term;
– Create a strong link between performance and reward over the long-term;
– Align the interests of shareholders and the Executive KMPs that have a key role in influencing the creation of long-term value;
– Retain the services of Executive KMPs over time; and
– Create a good behaviour link that will extend beyond cessation of employment and create a disincentive to take actions that
are not deemed to be in the long-term interests of shareholders.
Non-Executive Directors do not currently receive LTI entitlements;
LTI entitlements are measured against the performance of the Company and the Executive KMPs across a window of three
consecutive financial years; and
LTI entitlements also require an Executive KMP to remain an employee of the Company for twelve months beyond the three
year performance window in order to be eligible to receive any LTI benefit (aggregate four year deferral period).
Variable Executive remuneration – short-term incentives
ASPECT
PLAN, OFFERS AND COMMENTS
Form of award
Cash bonus entitlement.
Performance period
The Company’s financial year (12 months).
Maximum entitlements
The maximum STI entitlement payable to each Executive KMP is currently between 30% and
37% of their TFR (depending on the role).
Award determination
and payment
Calculations are performed following the end of the Performance Period. STI award is determined
following a review of performance over the year against both individual and company KPIs
as assessed by the CEO and the Board.
Awards will generally be paid in cash in the month of October following the end of the
Performance Period.
Gate
Individual performance levels must meet or exceed expectations to be eligible for STI. Company
performance is assessed in the areas of Group Profit, Group Sales and Group Costs.
Cessation of employment
during a period
Generally, all STI entitlements will be forfeited in the event that cessation of employment occurs
prior to the payment of the award. The Board retains absolute discretion to award some or all
of the STI entitlement to an Executive KMP.
Key performance
indicators (KPIs) criteria
and weighting
The chart below indicates the weightings of KPIs applicable to the STI entitlements for the 2020
financial year. The Company component is assessed against Group Profit, Group Sales and Group
Costs. The individual performance criteria includes safety, operational, project and strategic KPIs
which are assessed in addition to the demonstration of the Company’s Core Values and behaviours.
SHORT-TERM KPIs
30% Group Profit
10% Group Sales
10% Group Costs
50% Attributable to individual performance
criteria associated with the role
41
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report
Remuneration report (continued)
Variable Executive remuneration – long-term incentives
ASPECT
PLAN RULES, INVITATIONS AND COMMENTS
Form of award
Deferred equity entitlement.
Form of equity
Performance Rights which will convert to Ordinary Shares upon the satisfaction of both
performance and service related vesting conditions. The number of LTIP Performance Rights are
calculated utilising five day VWAP up to and including the 1 August. Rights carry no entitlement
to voting or dividends prior to converting to Ordinary Shares.
Maximum entitlement
The maximum LTI entitlement payable to each Executive KMP is currently between 30% and
37% of their TFR (depending on the role).
Performance period
The performance measures are tested at the end of the three year performance period to
determine the number of rights that vest. For the entitlements relating to the 2020 financial year,
the Performance Period is from 1 August 2019 to 31 July 2022.
Additional service period
The Executive KMP must remain an employee of the Company for 12 months beyond the
Performance Period in order to be eligible to receive any LTI benefit. For the entitlements relating
to the 2020 financial year, the Service Period is from 1 August 2019 to 31 July 2023.
Cessation of employment
during the performance
or service period
Generally, all LTI entitlements will be forfeited in the event that cessation of employment occurs
prior to the completion of the Performance or Service Period. Any unexercised Performance
Rights lapse upon termination. The Board in its absolute discretion may allow Performance
Rights to vest in the circumstances where a participant dies, Total or Permanent Disability occurs
or retirement after the age of 55 years.
Retesting
Retesting is a provision in incentive plans that allows performance against pre-defined targets
to be assessed again at some time (or times) after the initial assessment. There is no retesting
applicable to LTI entitlements.
Award determination
and issue of shares
All vesting conditions must be satisfied in order for the Performance Rights to be converted
to Ordinary Shares. The Board ultimately decides what percentage of LTI will be awarded based
on the performance criteria. Performance Rights that are not converted to Ordinary Shares will
lapse. The LTI entitlements for the 2020 financial year include two separate performance criteria
described below:
Long-term Company performance is measured by the total shareholder return achieved by the
Company over a three year period relative to the ASX 200 Net Total Return index (in the table
on page 43) (75% weighting of Performance Rights) and;
Individual Executive KMP performance indicators based upon the Company’s strategic plan, the
needs of the Company and the requirements of the role (25% weighting of Performance Rights).
Gate
Individuals must meet or exceed expectations to be eligible for any LTI award.
42
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS LONG-TERM INCENTIVES KPIs
75% Attributable to Shareholder Value
25% Attributable to the delivery of strategic plan
(individual performance criteria associated with the role)
The Total Shareholder Return (TSR) vesting scale appears as follows:
% OF 3 YEAR COMPANY TSR VS ASX
% VESTING
< 100%
100%
105%
110%
115%
120%
> 125%
0%
25%
35%
45%
55%
65%
75%
At the commencement of a new performance year, the Executive KMP are issued with Performance Rights to the value of their
maximum potential earnings related to their individual role (for example MD 37% of TFR). Over the next three years, both the
individual performance of the Executive KMP (25% weighting) and the Company performance (75% weighting) are assessed
to determine what overall percentage of the original Performance Rights issued will be eligible to vest to the Executive KMP.
In addition to the three years performance condition the Executive KMP is also required to complete an additional 12 months
service condition before the approved Performance Rights will vest to the Executive KMP (aggregate four year deferral period).
Voting at the Company’s 2019 Annual General Meeting
At the AGM held on 19 November 2019, more than 91% of the votes cast were in favour of the resolution to approve our 2019
Remuneration Report. This chart portrays the percentage of votes for and against the Remuneration Report at the 2019 AGM.
91% Voted For
9%
Voted Against
43
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report
Remuneration report (continued)
Company performance
The following table outlines the performance of the Company over the 2020 financial year and the previous four financial years
in accordance with the requirements of the Corporations Act 2001:
2020
2019
RESTATED 1
2018
2017
2016
Net (loss)/profit attributable to shareholders
A$000
(156,783)
210,652
149,498
140,620
(53,679)
(Loss)/profit after tax
A$000
(156,783)
210,652
149,498
140,619
(53,680)
Net profit after tax before non regular items
A$000
83,943
268,487
261,245
128,713
5,029
(Loss)/earnings per share
Dividends paid during the year
Share price as at 31 July
Shareholders’ funds
cps
cps
$/share
(18.9)
15.0
1.31
25.3
16.0
2.51
18.0
12.0
3.19
16.9
6.0
1.60
(6.5)
8.0
1.60
A$000 1,725,380
1,961,012 1,888,400
1,853,428
1,750,412
1 Figures for the 2018 financial year were restated in 2019 to present the impacts of discontinued operations in the 2019 financial year.
Variable remuneration outcomes
This section provides shareholders with a view of the remuneration actually paid to executives for performance in FY2020
and the value of LTI that vested during the period.
Short-term incentive outcomes
To determine the short-term incentive that will apply in the performance year, the Board assesses the Executive KMP against
the individual role KPIs and the performance of the Company. Accordingly, a combination of financial and non-financial measures
is used to measure performance for STI awards. The Board sets hurdles at the beginning of the financial year which remain
unchanged throughout the performance period. The Company performance component of the STI which comprises 50%
weighting is assessed by the Board and measured by reference to group profit, group sales volumes and group operating costs
as detailed in the graph below.
STI – COMPANY PERFORMANCE 2020
0%
10%
20%
30%
40%
50%
Total STI Company Performance
Group Costs
Group Sales
Group Profit
Actual Result
Maximum Result
The targets for the 2020 financial year could not anticipate the impact of the global pandemic and while the Company met
or exceeded performance outcomes in the first half of the year, it did not meet all the objectives set and therefore the STI
was impacted accordingly, achieving 18% against the Company performance criteria. The Board assessed the Executive
KMP individually against their individual scorecard KPIs which included a range of operational and strategic KPIs as well
as non-financial criteria including safety and environment, leadership, culture, values and behaviours. The individual
performance results for the Executive KMP for the 2020 financial year was assessed by the Board.
44
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Based on outcomes for the 2020 financial year, the Board has exercised its discretion and declined to grant any STI awards
to the Executive KMP for the 2020 financial year. Details of the Executive KMPs STI entitlements in relation to the 2020 financial
year are set out below.
EXECUTIVE KMP
Mr S.O. Stephan
Mr A.L. Boyd
Mr M.J. Busch
Mr B.C. Armitage
STI
MAXIMUM
$
555,000
297,906
195,822
197,120
STI
PAYABLE
$
STI
PAYABLE
%
–
–
–
–
–
–
–
–
STI
FORFEITED
$
555,000
297,906
195,822
197,120
STI
FORFEITED
%
100%
100%
100%
100%
The HRRC is of the view that overall the Executive KMP have continued to execute the Company’s strategy. The Variable
Remuneration Outcomes table detailed on page 47 is designed to provide shareholders with a better understanding of the
actual remuneration paid to each Executive KMP in 2020 and 2019. It includes:
Fixed remuneration earned and paid in the year ended 31 July 2019 and 31 July 2020;
STI earned in respect of 31 July 2019; noting that the STI entitlement in respect of the 2019 financial year was paid
in October 2019.
LTI entitlements for which both the performance criteria and service criteria have been satisfied during the 2019 or 2020
financial year. The value is calculated by reference to the market value of any shares issued to the Executive KMP on the
date of issue; and
Any non-monetary benefits provided to KMP in the year ended 31 July 2019 and 31 July 2020 (including fringe benefits).
Long-term incentive outcomes
At the commencement of a new performance year, the Executive KMP are issued with Performance Rights to the value of their
maximum potential earnings related to their individual role (for example MD 37% of TFR). Over the next three years, both the
individual performance of the Executive KMP (25% weighting) and the Company performance (75% weighting) are assessed
to determine what overall percentage of the original Performance Rights issued will be eligible to vest to the Executive KMP.
In addition to the three years performance condition the Executive KMP is also required to complete an additional 12 months
service condition before the approved Performance Rights will vest to the Executive KMP (aggregate four year deferral period).
The performance right awards granted under the 2016 LTI plans reached the end of their respective performance and service
periods and were converted to shares in August 2019. These shares related to the performance period 1 August 2015
to 31 July 2018. The value of the LTI vested at market also reflects the significant share price growth achieved from the granting
in 2016 to vesting in August 2019.
The Performance Rights granted under the 2017 LTI plan covers the performance period 1 August 2016 to 31 July 2019 and
the service condition that was satisfied on 31 July 2020. Shares were issued in August 2020 after satisfaction of both the
performance and service conditions. The number of Performance Rights that converted to shares was assessed by the Board
using the assessment criteria detailed elsewhere in this report of 75% TSR and 25% individual performance. Both performance
elements were assessed over the three year performance period.
For the 2017 LTI entitlement, the Company achieved strong TSR performance of over 125% measured over the three year
performance period against the ASX200 Net Total Return Index, resulting in the maximum 75% Company performance
component being awarded. The Board assessed the individual Executive KMP performance against long-term strategic
objectives, the needs of the Company and the requirements of the role annually over the three year period which were
then averaged resulting in a performance score out of 25 for each Executive KMP. This result ranged from 18 to 21 out
of 5, or 72–84% of the individual performance component of 25% weighting. The Performance Rights were then subject
to an additional 12 months service condition which deemed at 31 July 2020 and required each of the Executive KMP
to be employed by the Company when the Performance Rights converted to shares in August 2020.
The Board is satisfied that the Executive KMP LTI outcomes awarded in August 2020 are aligned with the delivery of the
Company’s strategy over the previous four year period and encouraged sustainable, long-term value creation through equity
ownership. The LTI is earned and delivered to Executive KMP over a four year timeframe to create a layered retention effect
and encourage sustained long-term performance.
45
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Remuneration report (continued)
Variable remuneration outcomes (continued)
Long-term incentive outcomes (continued)
This is further illustrated in the flowchart below.
FY16
FY17
FY18
FY19
FY20
FY21
FY22
FY23
FY24
LTI entitlements in respect of the FY16
Performance Period
1 August 2015 – 31 July 2018
Service Period
1 August 2015 – 31 July 2019
LTI entitlements in respect of the FY17
Performance Period
1 August 2016 – 31 July 2019
Service Period
1 August 2016 – 31 July 2020
LTI entitlements in respect of the FY18
Performance Period
1 August 2017 – 31 July 2020
Service Period
1 August 2017 – 31 July 2021
LTI entitlements in respect of the FY19
Performance Period
1 August 2018 – 31 July 2021
Service Period
1 August 2018 – 31 July 2022
LTI entitlements in respect of the FY20
Performance Period
1 August 2019 – 31 July 2022
Service Period
1 August 2019 – 31 July 2023
Key
46
Calculate A$ value of LTI
entitlement
Calculate number of
Rights to be issued
Measure Performance and
determine % of Rights to Vest
Rights covert to NHC Shares on
satisfaction of Service Condition
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS The chart below illustrates the Company’s share performance over the three year LTI performance periods for the financial year
2016, 2017 and 2018.
NHC SHARE PERFORMANCE
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
100%
80%
60%
40%
20%
0%
1 Aug 2015
31 Jul 2018
1 Aug 2016
31 Jul 2019
1 Aug 2017
31 Jul 2020
Opening Share Price
Closing Share Price
NHC TSR
XNT TSR
EXECUTIVE KEY MANAGEMENT PERSONNEL
2020
Executive Directors
Mr S.O. Stephan
Other Key Management Personnel
Mr A.L. Boyd
Mr M.J. Busch
Mr B.C. Armitage
TFR 1
$
STI 2
CASH
$
TOTAL
CASH
$
LTI 3 VESTED
AT MARKET
VALUE
$
OTHER 4
$
TOTAL
REMUNERATION
$
1,438,169
– 1,438,169
331,579
25,461
1,795,209
793,409
612,955
580,138
–
–
–
793,409
168,635
41,536
1,003,580
612,955
123,019
(25,358)
710,616
580,138
79,244
(15,149)
644,233
Total Other Key Management Personnel
1,986,502
– 1,986,502
370,898
1,029
2,358,429
Total – 2020
3,424,671
– 3,424,671
702,477
26,490
4,153,638
2019
Executive Directors
Mr S.O. Stephan
Other Key Management Personnel
Mr A.L. Boyd
Mr M.J. Busch
Mr B.C. Armitage 5
1,402,072
370,000
1,772,072
513,000
153,379
2,438,451
757,695
220,000
977,695
252,778
79,317
1,309,790
606,120
121,500
727,620
188,326
229,614
102,500
332,114
–
60,448
19,513
976,394
351,627
Total Other Key Management Personnel
1,593,429
444,000
2,037,429
441,104
159,278
2,637,811
Total – 2019
2,995,501
814,000
3,809,501
954,104
312,657
5,076,262
1 TFR comprises base salary and superannuation and motor vehicle benefits.
2 STI represents the amount of cash STI that each Executive KMP was paid in October 2019 and will be paid in October 2020 in respect of performance
during the 2019 and 2020 financial years respectively.
3 The LTI award for 2020 is in respect of the 2017 LTI entitlement which covers the performance period 1 August 2016 to 31 July 2019 and a service
condition that was satisfied on 31 July 2020. Shares were issued in August 2020 after satisfaction of the service condition.
The LTI award for 2019 is in respect of the 2016 LTI entitlement which covers the performance period 1 August 2015 to 31 July 2018 and a service
condition that was satisfied on 31 July 2019. Shares were issued in August 2019 after satisfaction of the service condition.
4 Other includes parking, movements in annual and long service leave provisions and other sundry items.
5 Mr B.C. Armitage was appointed as CDO on 1 February 2019.
47
0102030405060708090100Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Remuneration report (continued)
Variable remuneration outcomes (continued)
Long-term incentive outcomes (continued)
The graphs below reflect how the actual remuneration package for the Executive KMP was delivered in 2020. Executive KMP
remuneration is delivered by a mix of fixed and variable remuneration. Variable remuneration is ‘at risk’ and earned through both
the STI and LTI remuneration components.
MR S.O. STEPHAN
MR A.L. BOYD
82% Fixed remuneration
18% At Risk LTI
83% Fixed remuneration
17% At Risk LTI
MR M.J. BUSCH
MR B.C. ARMITAGE
83% Fixed remuneration
17% At Risk LTI
88% Fixed remuneration
12% At Risk LTI
48
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Remuneration – statutory tables
Details of the remuneration of Directors and the Executive KMP of the Company are set out below for the current and previous
financial years.
2020
Non-Executive Directors
Mr R.D. Millner
Mr T.J. Barlow
Mr W.H. Grant 3
Ms J.E. McGill 4
Mr T.C. Millner
Ms S.J. Palmer 5
Mr I.M. Williams
Total Non-Executive Directors
Executive Directors
Mr S.O. Stephan 6
Other Key Management Personnel
Mr A.L. Boyd
Mr M.J. Busch
Mr B.C. Armitage
Total Other Key Management
Personnel
Total Remuneration – 2020
2019
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
Total Non-Executive Directors
Executive Directors
Mr S.O. Stephan
Other Key Management Personnel
Mr A.L. Boyd
Mr M.J. Busch
Mr B.C. Armitage 7
Total Other Key Management
Personnel
Total Remuneration – 2019
SHORT‑TERM EMPLOYEE BENEFITS
CASH SALARY
AND FEES
$
CASH BONUS
$
NON‑CASH
BENEFITS 1
$
LONG‑TERM
BENEFITS
LSL
$
POST
EMPLOYMENT
SUPER‑
ANNUATION²
$
SHARE‑BASED
PAYMENTS
PERFORMANCE
RIGHTS
$
TOTAL
$
300,514
140,848
431,918
14,333
140,848
63,945
203,348
1,295,754
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20,307
13,381
41,032
1,362
13,381
6,075
18,332
113,870
320,821
–
154,229
–
472,950
–
15,695
–
154,229
–
70,020
–
–
221,680
– 1,409,624
1,420,609
370,800
19,665
5,796
17,560
(49,142) 1,785,288
775,849
594,806
561,237
220,000
121,500
102,500
40,986
(33,727)
(16,285)
550
8,369
1,136
17,560
18,149
18,901
163,455 1,218,400
693,108
(15,989)
745,258
77,769
1,931,892
4,648,255
444,000
814,800
(9,026)
10,639
10,055
15,851
54,610
186,040
225,235 2,656,766
176,093 5,851,678
304,704
140,392
155,991
140,392
180,236
140,392
1,062,107
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20,590
13,337
14,819
13,337
17,122
13,337
92,542
–
–
–
–
–
–
–
325,294
153,729
170,810
153,729
197,358
153,729
1,154,649
1,381,424
383,000
107,703
45,676
20,649
249,709
2,188,161
737,047
585,522
220,573
212,940
140,600
–
60,878
47,171
15,622
18,439
13,277
3,892
20,649
20,599
9,042
125,867
93,554
24,160
1,175,820
900,723
273,289
1,543,142
3,986,673
353,540
736,540
123,671
231,374
35,608
81,284
50,290
163,481
243,581
493,290
2,349,832
5,692,642
1 Non-cash benefits include movements in annual leave provisions.
2 Superannuation guarantee requirements for the financial year 30 June 2020 have been met with KMP receiving the legislated 9.5%. The variation for the
financial year ending 31 July 2020 is due to the timing of the reporting period against the standard financial year along with a reduction to Executive KMP
hours and wages implemented 1 July 2020.
3 Remuneration for W.H Grant includes fees associated with his role as Chair of the Board of a New Hope controlled subsidiary. It was determined in the
current period to remunerate W.H Grant for performing his role in prior periods, this was made up of the following; $43,051 in Directors fees and $4,090
superannuation for each of the financial years from 2015 to 2019, $16,172 in Directors fees and $1,536 superannuation for the 2014 financial year.
4 Ms J.E. McGill was appointed to the Board effective 22 June 2020.
5 Ms S.J. Palmer resigned from the Board effective 25 November 2019.
6 Included in the 2020 Cash Bonus, paid in October 2019, is $800 relating to the 2018 Cash STI awarded in respect of performance during the 2018 financial year.
7 Mr B.C. Armitage was appointed as CDO on 1 February 2019.
49
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Remuneration report (continued)
Share-based compensation
The terms and conditions of each grant of Performance Rights affecting remuneration of Executive KMP in the current or future
reporting periods and the associated pricing model inputs are as follows:
PERFORMANCE PERIOD
TO WHICH LTI RELATES
GRANT DATE
VESTING DATE
VALUE OF A PERFORMANCE
RIGHT AT GRANT DATE ($)
2016–2019
2017–2020
2018–2021
2019–2022
2020–2023
Dec-16
Mar-18
Mar-19
Nov-19
Nov-19
Aug-19
Aug-20
Aug-21
Aug-22
Aug-23
0.80
1.23
1.47
0.87
0.99
Performance Rights granted under the plan carry no dividend or voting rights.
Details of Performance Rights over ordinary shares in the Company as at 31 July 2020, provided as remuneration to the
Executive KMP of the Company are set out below. No Performance Rights have been issued to Non-Executive Directors
in the 2020 financial year. Upon satisfaction of the service period and performance conditions each Performance Right
will automatically vest and convert into one ordinary share in New Hope Corporation Limited. The minimum value of the
Performance Rights yet to vest is nil, as the Performance Rights will lapse 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 Performance Right that is yet
to be expensed.
NAME
Mr S.O.
Stephan 2
Mr A.L.
Boyd
Mr M.J.
Busch 3
Mr B.C.
Armitage
GRANT
DATE
VESTING
DATE
NUMBER
GRANTED
VALUE
PER
SHARE
NUMBER
VESTED
VESTED
%
NUMBER
FORFEITED
FORFEITED
%
NUMBER
LAPSED
LAPSED
%
Dec–16
Aug–19 250,000
$0.80
237,500
95%
Mar–18
Aug–201 263,158
$1.23
Mar–19
Aug–21
157,483
$1.47
Nov–19 Aug–22
217,767
$0.87
Nov–19 Aug–23
217,767
$0.99
–
–
–
–
–
–
–
–
–
–
157,483
217,767
217,767
Dec–16
Aug–19 124,497
$0.80
117,027
94%
Mar–18
Aug–201 131,049
$1.23
Mar–19
Aug–21
85,134
$1.47
Nov–19 Aug–22
112,611
$0.87
Nov–19 Aug–23
112,611
$0.99
–
–
–
–
–
–
–
–
Dec–16
Aug–19
93,750
$0.80
87,188
93%
Mar–18
Aug–201
98,684
$1.23
Mar–19
Aug–21
59,251
$1.47
Nov–19 Aug–22
75,924
$0.87
Nov–19 Aug–23
75,924
$0.99
Mar–18
Aug–201
62,230
$1.23
Mar–19
Aug–21
32,843
$1.47
Nov–19 Aug–22
62,370
$0.87
Nov–19 Aug–23
69,058
$0.99
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
– 12,500
5%
–
100%
100%
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
59,251
75,924
75,924
100%
100%
100%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,470
6%
–
–
–
–
–
–
–
–
6,562
7%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
MAXIMUM
VALUE IN
FUTURE
PERIODS
–
–
–
–
–
–
–
51,720
73,760
91,570
–
–
–
–
–
–
19,952
40,852
56,155
1 The Performance Rights vesting in August 2020 do not have a maximum value at 31 July 2020 as they vest in August 2020.
2 Mr S.O. Stephan’s employment ceased on 31 August 2020 which is before the vesting date for all rights granted after March 2019.
3 Mr M.J. Busch’s employment ceases on 12 October 2020 which is before the vesting date for all rights granted after March 2019.
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.
50
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Equity holdings
The tables below show the number of Performance Rights and shares in New Hope Corporation Limited that were held during
the financial year by KMP of the Company, including their close family members and entities related to them.
Performance Rights holdings
NAME
BALANCE
AT THE START
OF THE YEAR
GRANTED AS
REMUNERATION
VESTED
FORFEITED
LAPSED
BALANCE
AT THE END
OF THE YEAR
Mr S.O. Stephan
670,641
435,534
(237,500)
(593,017)
(12,500)
263,158
(117,027)
–
(87,188)
(211,099)
(7,470)
(6,562)
441,405
98,684
UNVESTED
263,158
441,405
98,684
Mr A.L. Boyd
Mr M.J. Busch
Mr B.C. Armitage
340,680
251,685
95,073
225,222
151,848
131,428
Share holdings
NAME
Mr R.D. Millner
Mr T.J. Barlow
Mr W.H. Grant
Ms J.E. McGill
Mr T.C. Millner
Ms S.J. Palmer
Mr I.M. Williams
Mr S.O. Stephan
Mr A.L. Boyd
Mr M.J. Busch
Mr B.C. Armitage
–
–
–
226,501
226,501
BALANCE
AT THE START
OF THE YEAR
PURCHASED
4,157,774
20,000
19,900
30,000
–
–
–
–
3,974,368
20,000
15,000
38,087
436,365
39,898
773,258
–
–
–
–
–
–
–
RECEIVED ON
THE VESTING OF
PERFORMANCE
RIGHTS
–
–
–
–
–
–
–
237,500
117,027
BALANCE
AT THE END
OF THE YEAR
4,177,774
19,900
30,000
–
3,994,368
15,000
38,087
673,865
156,925
87,188
860,446
–
–
Shares issued on the vesting of rights
Since the end of the financial year, 524,071 Performance Rights have vested and converted to ordinary shares in the Company.
Loans to Directors and Executives
There were no loans to directors and executives granted during the reporting period, nor were there any outstanding loans
as at balance date.
51
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Non audit services
Deloitte Touche Tohmatsu has acted as auditor for the Group for the entire 2020 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 31):
Deloitte and related network firms
Audit or review of financial reports:
Group
Subsidiaries and joint operations
Other services
Sustainability and other advisory services
Other Auditors and their related network firms
Audit or review of financial reports:
Subsidiaries and joint operations 1
1 Relates to audit of Bengalla Joint Venture.
2020
$
2019
$
529,420
612,150
121,067
84,400
650,487
696,550
113,416
113,416
64,382
64,382
763,903
760,932
–
–
77,000
77,000
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 54.
The Company is of a kind referred to in ASIC Corporations 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.
52
Directors’ Reportfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Meetings of Directors
The following table sets out the number of meetings of the Company’s Directors held during the year ended 31 July 2020 and
the number of meetings attended by each Director:
FULL MEETINGS
OF DIRECTORS
AUDIT AND RISK
COMMITTEE
HUMAN RESOURCES AND
REMUNERATION COMMITTEE
NOMINATION
COMMITTEE
HELD
ATTENDED
HELD
ATTENDED
HELD
ATTENDED
HELD
ATTENDED
Mr R.D. Millner
Mr T.J. Barlow
Mr W.H. Grant
Ms J.E. McGill 1
Mr T.C. Millner
Ms S.J. Palmer 2
Mr I.M. Williams 3
Mr S.O. Stephan
14
14
14
14
14
14
14
14
14
14
14
2
14
6
14
14
–
5
5
–
–
5
5
5
–
5
5
–
–
2
3
5
–
5
5
–
–
–
5
–
–
5
5
–
–
–
5
–
–
1
1
–
–
–
1
–
–
1
1
–
–
–
1
–
1 Ms J.E. McGill was appointed to the Board effective from 22 June 2020.
2 Ms S.J. Palmer resigned from the Board effective 25 November 2019.
3 Mr. I.M. Williams was appointed as Acting Chair of the Audit and Risk Committee on 25 November 2019.
Signed at Sydney this 21st day of September 2020 in accordance with a resolution of Directors.
R.D. Millner
Director
53
Directors’ Reportfor the year ended 31 July 2020New Hope Group 2020 Annual ReportFinancial ReportOther InformationOperations ReviewDirectors’ Report Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Level 23, Riverside Centre
123 Eagle Street
Brisbane, QLD, 4000
Australia
Phone: +61 7 3308 7000
www.deloitte.com.au
The Board of Directors
New Hope Corporation Limited
Level 16, 175 Eagle Street
Brisbane, QLD, 4000
21 September 2020
Dear Board Members,
Auditor’s Independence Declaration to New Hope Corporation Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence
to the directors of New Hope Corporation Limited.
As lead audit partner for the audit of the financial report of New Hope Corporation Limited for the year ended 31 July 2020,
I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully,
DELOITTE TOUCHE TOHMATSU
Stephen Tarling
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
54
Auditor’s Independence Declarationfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Operations
Review
Directors’
Report
Financial
Report
Other
Information
Financial Report contents
Financial Statements
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Cash Flow Statement
56
57
58
59
Notes to the Financial Statements
60
Results for the year
1. Financial reporting segments
2. Revenue
3. Other income and expenses
4.
5.
Income taxes
Reconciliation of (loss)/profit after income tax
to net cash from operating activities
6. Earnings per share
Operating assets and liabilities
7. Receivables
8. Accounts payable
Inventories
9.
10. Property, plant and equipment
11. Intangibles
12. Exploration and evaluation
13. Impairment of assets
14. Provisions
Capital
15. Cash and cash equivalents
16. Equity investments
17. Borrowings
18. Derivative financial instruments
19. Dividends
20. Equity
Risk
21. Financial risk management
Group structure
22. Interests in other entities
23. Business combination
24. Discontinued operations
Unrecognised items
25. Commitments
26. Events occurring after the reporting period
Other
27. Related party transactions
28. Share based payments
29. Parent entity financial information
30. Deed of cross guarantee
31. Remuneration of auditors
32. Other accounting policies
62
66
67
68
72
73
74
75
75
76
79
80
81
86
89
90
90
95
97
98
101
105
106
107
108
109
109
111
112
114
116
116
Directors’ Declaration
119
Independent Auditor’s Report
to the members of New Hope
Corporation Limited
Shareholder information
120
125
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 Level 16, 175 Eagle Street, Brisbane,
Qld, 4000
A description of the nature of the consolidated entity’s operations
and its principal activities is included in the Directors’ Report on pages 21
to 53, which is not part of this financial report. The financial report was
authorised for issue by the Directors on 21 September 2020.
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
New Hope Group 2020 Annual Report
55
Revenue from continuing operations
Other income
Expenses
Cost of sales
Marketing and transportation
Administration
Other expenses
Financing costs
Acquisition costs expensed
Impairment of assets
(Loss)/profit before income tax from continuing operations
Income tax benefit/(expense)
(Loss)/profit after income tax from continuing operations
Profit after income tax from discontinued operations
Net (loss)/profit for the year
Net (loss)/profit attributable to:
New Hope Shareholders
Other comprehensive income
Items that may be reclassified to profit and loss:
Exchange difference on the translation of foreign operations
Changes to the fair value of cash flow hedges, net of tax
Transfer to profit and loss for cash flow hedges, net of tax
Items that will not be reclassified to profit and loss:
NOTES
2020
$000
2019
$000
2
1,083,918
1,306,429
3(a)
56
3,456
1,083,974
1,309,885
(760,945)
(716,198)
(175,594)
(179,508)
(14,037)
14,058
(14,041)
(21,675)
(26,375)
(22,964)
–
(47,729)
(346,632)
–
(225,551)
307,770
3(b)
17(c)
3(b)
3(b)
4(a)
68,768
(97,338)
(156,783)
210,432
24(b)
–
220
(156,783)
210,652
(156,783)
210,652
20(f)
20(f)
20(f)
2
–
67,524
(19,838)
(21,783)
14,772
Changes to the fair value of equity investments, net of tax
20(f)
(527)
(696)
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
(Loss)/earnings per share for profit from continuing operations attributed
to ordinary equity holders of the Company
Basic (loss)/earnings per share (cents/share)
Diluted (loss)/earnings per share (cents/share)
(Loss)/earnings per share for profit attributed to ordinary equity holders
of the Company
Basic (loss)/earnings per share (cents/share)
Diluted (loss)/earnings per share (cents/share)
45,216
(5,762)
(111,567)
204,890
(111,567)
204,890
(18.9)
(18.9)
6
6
(18.9)
(18.9)
25.3
25.3
25.3
25.3
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
56
Statement of Comprehensive Incomefor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Current assets
Cash and cash equivalents
Receivables
Derivative financial instruments
Inventories
Current tax assets
Total current assets
Non-current assets
Receivables
Derivative financial instruments
Equity investments
Property, plant and equipment
Intangible assets
Exploration and evaluation assets
Total non-current assets
Total assets
Current liabilities
Accounts payable
Derivative financial instruments
Borrowings
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained profits
Total equity
NOTES
2020
$000
2019
$000
15
7
18
9
4(d)
7
18
16
10
11
12
8
18
17
4(d)
14
17
4(e)
14
70,377
58,827
63,565
108,069
45,852
80,985
15,779
–
96,269
–
276,558
263,165
296
8,912
193
1,056
190
723
2,084,827
2,138,233
80,627
96,457
94,223
301,589
2,269,078
2,538,248
2,545,636
2,801,413
81,999
108,701
–
10,774
10,738
–
2,532
5,817
47,841
86,270
140,578
214,094
428,359
358,206
2,974
52,633
248,345
215,468
679,678
626,307
820,256
840,401
1,725,380
1,961,012
20(d)
20(f)
96,692
42,553
96,315
(2,977)
20(g)
1,586,135
1,867,674
1,725,380
1,961,012
The above statement of financial position should be read in conjunction with the accompanying notes.
57
Statement of Financial Positionas at 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report Balance at 1 August 2019
Loss for the year
Other comprehensive income
Total comprehensive (loss)/income
Transactions with owners in their capacity
as owners
Dividends paid
Transfer from share-based payment reserve
to equity
Net movement in share-based payment reserve
19(a)
20(f)
20(f)
CONTRIBUTED
EQUITY
$000
NOTES
RESERVES
$000
RETAINED
EARNINGS
$000
TOTAL
$000
96,315
(2,977)
1,867,674
1,961,012
–
–
–
–
377
–
377
–
(156,783)
(156,783)
45,216
45,216
–
45,216
(156,783)
(111,567)
–
(124,756)
(124,756)
(377)
691
314
–
–
–
691
(124,756)
(124,065)
Balance at 31 July 2020
96,692
42,553
1,586,135
1,725,380
Balance at 1 August 2018
95,905
21,617
1,770,878
1,888,400
Reclassify equity investments from retained
earnings to FVOCI 1 on initial adoption
of AASB 9: Financial Instruments (AASB 9)
Restated balance as at 1 August 2018
Profit for the year
Other comprehensive loss
Total comprehensive (loss)/income
Transactions with owners in their capacity
as owners
Dividends provided for or paid
Transfer from equity investment reserve
to retained earnings
Transfer from share-based payment reserve
to equity
Net movement in share-based payment reserve
–
(27,861)
27,861
–
95,905
(6,244)
1,798,739
1,888,400
–
–
–
–
–
410
–
410
–
210,652
210,652
(5,762)
(5,762)
–
(5,762)
210,652
204,890
–
(133,002)
(133,002)
8,715
(8,715)
(410)
724
–
–
–
–
724
9,029
(141,717)
(132,278)
19(a)
20(f)
20(f)
20(f)
Balance at 31 July 2019
96,315
(2,977)
1,867,674
1,961,012
1 Fair value through other comprehensive income
The above statement of changes in equity should be read in conjunction with the accompanying notes.
58
Statement of Changes in Equityfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Cash flows from operating activities
Receipts from customers inclusive of GST
Payments to suppliers and employees inclusive of GST
Payment of acquisition costs
Net interest paid
Net income taxes paid 1
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 activities
Payments for acquisition of Bengalla – net cash
Proceeds from disposal of equity investments – Planet Gas
Proceeds from term deposits
Proceeds from sale of property, plant and equipment
Interest received from term deposits
Refunds/(payments) for security and bond guarantees
Dividends received
Net cash outflow from investing activities
Cash flows from financing activities
Repayment of lease liabilities 2
Dividends paid
Proceeds from borrowings
Repayments of borrowings
Payments for debt establishment and transaction costs
Payments for establishment costs for guarantee facility
Net cash (outflow)/inflow from financing activities
NOTES
2020
$000
2019
$000
1,201,943
1,390,916
(904,123)
(881,144)
297,820
509,772
3(b)
–
(15,776)
(47,729)
(5,282)
(26,586)
(162,977)
5
255,458
293,784
11
12
23
(100,246)
(76,942)
(224)
(54)
(12,899)
(21,286)
–
–
–
(831,264)
429
205,000
4,527
–
64
–
557
648
(59)
2
(108,778)
(722,969)
(10,815)
(2,443)
19
(124,756)
(133,002)
135,000
760,000
17(a)
(135,000)
(400,000)
–
–
(8,436)
(4,366)
(135,571)
211,753
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
3(b)
Cash and cash equivalents at the end of the financial year
11,109
58,827
441
70,377
(217,432)
274,975
1,284
58,827
1 The amount of income taxes paid for the 2020 financial year represents current year instalments less a refund of instalments paid for the year ended
31 July 2019.
2 The prior year comparative represents amounts accounted for in respect of finance leases under AASB 117 Leases (AASB 117).
The above cash flow statement should be read in conjunction with the accompanying notes.
59
Cash Flow Statementfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report The financial report covers New Hope Corporation Limited and its subsidiaries as the consolidated entity and together are
referred to as New Hope, the Company or the Group 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, 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
with the exception of changes required on adoption of new accounting standards as identified in note 32.
Has been prepared under the historical cost convention, as modified by the revaluation of equity investments, trade
receivables held at fair value, derivative instruments carried at fair value and agricultural assets carried at fair 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.
Refer to note 32 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 the Australian Securities
and Investment Commission, relating to the “rounding off” of amounts in the financial statements. Amounts in the financial
statements have been rounded off in accordance with that 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.
The Directors have presented these financial statements on a going concern basis and have a reasonable expectation that the
Group will be able to pay its debts as and when they fall due for at least the next 12 months.
As a result of the COVID-19 and its declaration as a global pandemic on 11 March 2020, there has been great uncertainty in the
global and Australian economies. The coal market has been impacted by a steep decline in all short-term global coal indices.
The Group’s operations have not been materially impacted by the pandemic with mining identified as an essential industry and
all operations continuing to operate at full capacity although with adjusted safety and risk considerations associated with the
global pandemic.
The business has in response to COVID-19 and the economic conditions taken prudent steps associated with its liquidity
management including deferral of government payments in line with relevant extensions, securing JobKeeper wage subsidy
payments as outlined in note 2, progressing with redundancies across a number of operations and reduction to a nine day
fortnight amongst other pertinent cost saving measures. In addition the company is focused on investment in key capital
programs (major mid-life shutdown of the dragline at Bengalla) to underpin the future of its operations and ensure sustainable
long-term shareholder returns. In order to fund this investment and in light of the difficult global economic conditions
as a result of COVID-19, the Directors will not be declaring a final dividend which aligns with the Companies prudent
approach to liquidity management.
In assessing the going concern position of the Group, the Directors have considered projected cash flow information for the
12 months from the date of approval of these financial statements under multiple scenarios taking into account projected lower
pricing forecasts. Based on a reasonable downside case for pricing, foreign exchange including confirmed hedging and broader
operating and capital budgets, the Group is expected to operate within the available cash levels.
In light of the difficult market conditions influenced by the COVID-19 pandemic, management have taken appropriate steps
to manage the Group’s liquidity position and compliance with its debt facility requirements. The Group is in full compliance
with its debt covenants at 31 July 2020 and has sufficient liquidity including cash balances of $70,377,000 and available debt
facilities of $150,000,000. In adopting a proactive approach, the Group has secured a waiver of a relevant covenant for the
reporting period ending 31 January 2021, in the event that it is needed.
60
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Basis of consolidation
(i)
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of New Hope Corporation Limited
(Company or parent entity) as at 31 July 2020 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 Statement of Comprehensive
Income, Statement of Changes in Equity and Statement of Financial Position respectively.
(ii)
Interests in other entities
For information on Joint Arrangements and interests in Other unincorporated entities 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.
Key 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
Deferred tax assets
Note 10
Impairment assessment
Note 10
Estimation of coal and oil reserves and resources
Note 11 Goodwill impairment assessments
Note 12
Exploration and evaluation expenditure
Note 13
Impairment of assets
Note 14
Provisions – rehabilitation
Note 23
Business combination
PAGE
72
78
78
79
80
86
89
107
61
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 1.
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), Chief Operations Officer
(COO), Chief Financial Officer (CFO) and Chief Development Officer (CDO).
The Group disaggregates revenue based on the geographical region to which goods and services are provided
to customers. Outlined in note 1(c) is the disaggregation of the Group’s revenue from contracts with customers.
Refer to note 2 for further information on the Group’s revenue accounting policy.
A. Description of segments
The Group has three reportable segments, namely Coal mining in Queensland (including mining related production, processing,
transportation, port operations and marketing), Coal mining in New South Wales (including mining related production,
processing, transportation and marketing) and Other (including coal exploration, oil and gas related exploration, development,
production and processing, pastoral operations and administration). Treasury and income tax expense have not been allocated
to an operating segment and are reconciling items.
Operating segments have been determined based on the analysis provided in the reports reviewed by the Board, MD, COO, CFO
and CDO (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 Other segment. Segment information is presented on the same
basis as that used for internal reporting purposes.
62
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS B.
Segment information
YEAR ENDED 31 JULY 2020
Total segment revenue
Intersegment revenue
COAL MINING
NSW
$000
COAL MINING
QLD
$000
NOTES
OTHER
$000
TOTAL
$000
711,578
339,522
61,653
1,112,753
–
–
(29,645)
(29,645)
Revenue from external customers
711,578
339,522
32,008
1,083,108
Interest revenue
Total revenue from external customers
2
Group EBITDA from continuing operations
810
1,083,918
289,754
Segment EBITDA from continuing operations
273,008
43,254
(23,680)
292,582
Depreciation and amortisation
Interest expense
Segment profit/(loss) before tax and non regular
items from continuing operations
(110,765)
(29,459)
(10,646)
(150,870)
(211)
(3,583)
(381)
(4,175)
162,032
10,212
(34,707)
137,537
Non regular items before tax 1
1,937
(121,387)
(225,605)
(345,055)
Profit/(loss) before tax after non regular items
from continuing operations
Treasury loss before income tax
(Loss) before tax (after non regular items) from
continuing operations
Income tax benefit
4(a)
Loss after tax and non regular items
Reportable segment assets
Total segment assets includes:
Recognition of right of use assets on adoption
of AASB 16 Leases (AASB 16)
Additions to non-current assets
Impairment of assets
163,969
(111,175)
(260,312)
(207,518)
(18,033)
(225,551)
68,768
(156,783)
1,757,890
402,123
385,623
2,545,636
32
7,389
68,518
61,870
8,572
1,830
71,089
52,464
129,554
–
(110,781)
(235,851)
(346,632)
2020 SEGMENT PERFORMANCE ($ MILLION)
2020 SEGMENT ASSETS ($ MILLION)
800
620
440
260
80
(100)
(280)
712
340
273
162 164
43
10
(111)
32
Coal mining NSW
Coal mining QLD
(24) (35)
Other
(260)
Segment revenue
Segment profit before non regulars
EBITDA
Segment profit and loss
1,758 Coal mining
NSW
402 Coal mining
386 Other
QLD
1 Non regular items for the year ended 31 July 2020 relate to Jeebropilly rehabilitation provision movements, New Acland ramp down costs, QLD operations
redundancy costs, recovery of port costs, coal operations, coal exploration, oil producing, oil exploration asset impairments, impairment of goodwill and
onerous contract and related expenses.
63
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report
1.
B.
Financial reporting segments (continued)
Segment information (continued)
YEAR ENDED 31 JULY 2019
Total segment revenue
Intersegment revenue
COAL MINING
NSW
$000
COAL MINING
QLD
$000
NOTES
OTHER
$000
TOTAL
$000
692,789
571,435
61,978
1,326,202
–
–
(24,995)
(24,995)
Revenue from external customers
692,789
571,435
36,983
1,301,207
Interest revenue
Total revenue from external customers
2
Group EBITDA from continuing operations
Segment EBITDA from continuing operations
Depreciation and amortisation
Interest expense
Segment profit/(loss) before tax and non regular
items from continuing operations
315,293
206,913
(76,196)
(34,682)
(9,573)
(9,769)
5,222
1,306,429
517,061
512,633
(120,647)
(1)
(325)
(1)
(327)
239,096
171,906
(19,343)
391,659
Non regular items before tax 1
(47,729)
(2,746)
(21,675)
(72,150)
Profit/(loss) before tax after non regular items from
continuing operations
Treasury profit before income tax
Profit before tax (after non regular items) from
continuing operations
Income tax expense
Profit after tax and non regular items from
continuing operations
Profit from discontinued operations
Profit after tax and non regular items
Reportable segment assets
Total segment assets includes:
Additions to non-current assets
4(a)
24
191,367
169,160
(41,018)
319,509
(11,739)
307,770
(97,338)
210,432
220
210,652
1,747,390
520,522
533,501
2,801,413
849,463
28,565
33,889
911,917
2019 SEGMENT PERFORMANCE ($ MILLION)
2019 SEGMENT ASSETS ($ MILLION)
800
620
440
260
80
(100)
(280)
693
571
315
239
191
207
172
169
Coal mining NSW
Coal mining QLD
37
(10)
(19)
(41)
Other
Segment revenue
Segment profit before non regulars
EBITDA
Segment profit and loss
1,747 Coal mining
NSW
521 Coal mining
QLD
534 Other
1 Non regular items for the year ended 31 July 2019 relate to provision movements associated with non-controlled subsidiaries and related costs, insurance
proceeds, acquisition costs expensed, guarantee facility costs and mine closure redundancy costs.
64
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS
C. Other segment information
(i)
Segment revenue
YEAR ENDED 31 JULY 2020
Total segment revenue by geographical region
Japan
China
Taiwan
Chile
Korea
Vietnam
India
Other 1
Australia
COAL MINING
NSW
$000
COAL MINING
QLD
$000
NOTES
OTHER
$000
TOTAL
$000
267,230
179,622
73,701
62,964
–
62,382
3,266
–
168,341
82,608
53,717
17,105
26,280
6,298
6,930
27,094
–
20,760
25,047
–
–
–
–
–
–
–
–
446,852
127,418
80,069
26,280
68,680
10,196
27,094
168,341
128,415
Revenue from customer contracts 2
720,492
337,806
25,047
1,083,345
Other revenue
Total revenue
2
573
1,083,918
1 Other revenue from customer contracts relates to third party customer contracts with undisclosed geographical information.
2 Revenue from customers contracts includes income from commodity sales and services as disclosed in note 2.
There are no customers which represent more than 10% of revenue from customer contracts for the year ended 31 July 2020.
During the prior year, within revenue for the Coal mining QLD segment there is one customer that represented 10% with total
revenue of $189,013,000.
2020 SEGMENT REVENUE ($ MILLION)
2019 SEGMENT REVENUE ($ MILLION)
Japan
China
Taiwan
Chile
Korea
Vietnam
India
Other
Australia
447
127
80
26
69
10
27
168
128
Japan
China
Taiwan
Chile
Korea
Vietnam
India
Other
Australia
557
116
313
19
97
2
10
98
79
65
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report Financial reporting segments (continued)
1.
C. Other segment information (continued)
(i)
Segment revenue (continued)
YEAR ENDED 31 JULY 2019
Total segment revenue by geographical region
COAL MINING
NSW
$000
COAL MINING
QLD
$000
NOTES
OTHER
$000
TOTAL
$000
Japan
China
Taiwan
Chile
Korea/Indonesia
Vietnam
India
Other
Australia
338,886
218,399
47,760
93,390
11,683
70,000
1,890
10,231
98,237
15,239
68,562
219,332
7,677
26,967
–
–
–
29,708
33,954
–
–
–
–
–
–
–
–
557,285
116,322
312,722
19,360
96,967
1,890
10,231
98,237
78,901
Revenue from customer contracts 1
687,316
570,645
33,954
1,291,915
Other revenue
Total revenue
2
14,514
1,306,429
1 Revenue from customer contracts includes income from commodity sales and services as disclosed in note 2.
(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.
2. Revenue
Accounting policy
The Group recognises sales revenue related to the transfer of promised goods or services when the performance
obligations under the contract have been satisfied. The amount of revenue recognised reflects the consideration
to which the Group is or expects to be entitled for satisfying the performance obligation.
Revenue is recognised for the major business activities as follows:
Coal sales revenue is recognised at the point in time when control of the products have been transferred to the
customer in accordance with the sales terms, in this instance when the risks and benefits of ownership has
transferred. The title, risks and rewards, and therefore the fulfilment of performance obligations normally occurs
at the time of loading the shipment for export sales, and generally at the time the coal is delivered to the customer
for domestic sales.
Oil sales revenue is recognised at the point in time when control of the products have been transferred to the
customer in accordance with the sales terms, in this instance when the risks and benefits of ownership have
transferred. This is normally when the oil is delivered to the customer.
The Group’s products are sold to customers under contracts that vary in tenure and pricing mechanisms, primarily
being monthly or quarterly indexes. Certain sales may be provisionally priced at the date revenue is recognised,
however substantially all coal sales are reflected at final prices by the end of the reporting period. The final selling
price is based on the price for the quotational period stipulated in the contract.
Service fee income and management fee income is recognised as revenue over time as the services are performed.
66
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Sales revenue
Revenue from commodity sales
Revenue from provisional pricing adjustments
Services
Other revenue
Property rent
Interest
Sundry revenue 1
NOTES
2020
$000
2019
$000
1,071,414
1,278,350
(10,793)
11,931
2,885
13,565
1,072,552
1,294,800
17(c)
1,282
689
9,395
1,195
5,407
5,027
1(b),(c)
1,083,918
1,306,429
1 Included within sundry revenue for the 2020 financial year is an amount relating to COVID-19 government relief in the form of JobKeeper payments
received by the Group of $3,909,000 (2019: $nil).
3. Other income and expenses
A. Other income
Insurance recovery
Net gain on disposal of property, plant and equipment
B.
Breakdown of expenses
Profit before income tax includes the following specific expenses:
Foreign exchange gains and losses
Net foreign exchange gains
Depreciation
Buildings
Plant and equipment
Amortisation
Mining reserves, leases and mine development
Oil producing assets
Software
Right-of-use assets
Mining information
Water rights
Impairment of assets
Impairment of QLD coal mining assets
Impairment of goodwill
Impairment of coal exploration and evaluation assets
Impairment of oil producing and exploration assets
NOTES
2020
$000
56
–
56
2019
$000
3,264
192
3,456
NOTES
2020
$000
2019
$000
441
1,284
2,083
57,200
59,283
1,894
57,182
59,076
68,106
50,407
7,791
570
11,586
2,977
557
91,587
110,783
12,271
157,197
66,381
346,632
7,885
534
–
2,313
433
61,572
–
–
–
–
–
10
10
10
10
11
10
11
11
13
13
13
13
67
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 3. Other income and expenses (continued)
B.
Breakdown of expenses (continued)
Liquidation related expenses 1
Acquisition costs expensed
Exploration costs expensed 2
Employee benefits expensed
Superannuation expensed 3
Net loss on disposal of property, plant and equipment
Lease costs expensed 4
1 Liquidation related costs have been included in Other expenses.
2 Exploration costs expensed includes relevant Employee expenses.
3 Superannuation expensed is included in Employee benefits expensed.
NOTES
23
2020
$000
2019
$000
(14,058)
21,675
–
19,677
47,729
16,009
182,878
174,356
11,046
11,203
4,208
–
247
19,865
4 Expenses relating to leases of low value assets. The prior year comparative represents amounts accounted for in respect of operating lease expenses.
4.
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 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 Statement of Financial Position 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.
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.
68
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS A.
Income tax (benefit)/expense
Income tax – Current tax expense
Income tax – Adjustments for current tax of prior periods
Income tax – Deferred tax (benefit)/expense
Effective tax rate
2020
$000
8,003
(7,508)
(69,263)
(68,768)
2019
$000
91,273
924
5,141
97,338
30.5%
31.6%
B.
Numerical reconciliation of income tax (benefit)/expense to prima facie tax
(receivable)/payable
(Loss)/profit from continuing operations before income tax
Profit from discontinued operations before income tax
Income tax calculated at 30% (2019–30%)
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable income:
Impairment of goodwill
Non-deductible amounts from discontinuing operations
Other deductible amounts
Sundry items
(Over)/under provided in prior year
Income tax (benefit)/expense
NOTES
2020
$000
2019
$000
(225,551)
307,770
24
–
220
(225,551)
307,990
(67,665)
92,397
3,681
–
–
18
(63,966)
(4,802)
–
66
4,493
256
97,212
126
(68,768)
97,338
C.
Tax (benefit)/expense relating to items of other comprehensive income
Cash flow hedges
2020
$000
2019
$000
(19,604)
2,172
69
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 4.
D.
Income taxes (continued)
Reconciliation of income tax (receivable)/payable
(Loss)/profit from continuing operations before income tax
Profit from discontinued operations before income tax
Income tax calculated at 30% (2019: 30%)
Tax effected adjustments to taxable income:
Non temporary differences:
Non-deductible amounts from discontinuing operations
Impairment of goodwill
Other non temporary items
Temporary differences:
Non deductible impairment expenses
Other deductible amounts
Tax losses utilised
Taxable income at 30% (2019: 30%)
Current tax liability
Current tax receivable (2019)
Less: Tax instalments paid
Tax (refundable)/payable
NOTES
2020
$000
2019
$000
(225,551)
307,770
24
–
220
(225,551)
307,990
(67,665)
92,397
–
3,681
18
100,308
(28,339)
–
66
–
256
–
(4,757)
(1,182)
8,003
86,780
8,003
86,780
(77)
(23,705)
(15,779)
–
(80,963)
5,817
70
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS E. Deferred tax balances accounting policy
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
INITIAL
ADOPTION
OF AASB 16
$000
RECOGNISED
IN PROFIT
OR LOSS
$000
RECOGNISED
IN OCI
$000
ACQUIRED
IN BUSINESS
COMBINATION
$000
DEFERRED
TAX
ASSETS
$000
DEFERRED
TAX
LIABILITIES
$000
NET
$000
2020
Rehabilitation provision
67,759
–
6,958
Property, plant and equipment
(77,225)
(21,327)
17,087
Capitalised exploration
(59,587)
49,260
Cash flow hedges
Inventories
Employee benefits
Other
Revenue tax losses
Capital losses
Lease liabilities
3,175
(7,300)
17,967
1,078
–
1,500
–
(19,604)
–
–
–
–
–
–
–
2,825
(3,824)
(5,090)
–
–
–
–
–
–
–
–
–
–
–
–
21,327
2,047
(52,633)
–
69,263
(19,604)
2019
Rehabilitation provision 1
36,678
Property, plant and equipment
(42,485)
Capitalised exploration
Cash flow hedges
Inventories
Employee benefits
Other 1
Revenue tax losses
Capital losses
(56,708)
1,003
(5,465)
13,749
684
1,182
1,500
(49,862)
–
–
–
–
–
–
–
–
–
–
20,404
(21,866)
(2,879)
–
–
–
–
2,172
(1,835)
1,959
456
(1,182)
–
–
–
–
–
–
(4,943)
2,172
–
–
–
–
–
–
–
–
–
–
–
74,717
74,717
–
(81,465)
(10,327)
(16,429)
(4,475)
–
–
–
–
(81,465)
(10,327)
(16,429)
(4,475)
14,143
14,143
–
(4,012)
–
–
–
1,500
1,500
23,374
23,374
(4,012)
–
–
–
(2,974) 113,734 (116,708)
10,677
67,759
67,759
–
(12,874)
(77,225)
(59,587)
–
–
(77,225)
(59,587)
3,175
3,175
–
(7,300)
–
(7,300)
2,259
17,967
17,967
(62)
1,078
1,078
–
–
1,500
1,500
–
–
–
–
(52,633)
91,479
(144,112)
–
–
–
–
–
–
1 Amounts recognised in profit or loss have been reclassified between rehabilitation provision and other as well as deferred tax assets and deferred tax
liabilities related to these disclosures.
71
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 4.
F.
Income taxes (continued)
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Tax losses (capital)
Temporary differences associated with equity investments
2020
$000
2019
$000
7,090
5,709
7,146
5,551
12,799
12,697
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.
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.
5.
Reconciliation of (loss)/profit after income tax to net cash from
operating activities
(Loss)/profit after income tax
Depreciation and amortisation
Non-cash employee benefit expense – share-based payments
Gain from discontinued operations after tax
Impairment of assets
Net foreign exchange gains
Net loss/(profit) on sale of non-current assets
Interest income from term deposits/investing activities
Net income taxes paid 1
Income tax (benefit)/expense
Payment of establishment costs for guarantee facility
Amortisation of transaction cost
Changes in operating assets and liabilities
Decrease in receivables and prepayments
Decrease/(increase) in inventories
(Decrease)/increase in payables
(Decrease)/increase in provisions and employee entitlements
NOTES
2020
$000
2019
$000
(156,783)
210,652
150,870
120,649
28
24(b)
3(b)
3(b)
691
–
346,632
(441)
4,208
–
724
(220)
–
(1,284)
(175)
(648)
(26,586)
(162,977)
4(a)
17(c)
17(c)
(68,768)
–
2,076
45,262
15,284
(21,338)
(35,649)
97,338
4,366
1,384
14,273
(6,967)
8,710
7,959
Net cash from operating activities
255,458
293,784
1 The amount of income taxes paid for the 2020 financial year represents current year instalments less a refund of instalments paid for the year ended
31 July 2019.
72
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 6. 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.
A.
B.
Basic earnings per share attributable to ordinary equity
holders of the Company
Diluted earnings per share attributable to ordinary equity
holders of the Company
C.
Reconciliation of adjusted profits
EARNINGS PER SHARE (CENTS)
2020
2019
(18.9)
25.3
(18.9)
25.3
BASIC AND DILUTED
2020
$000
2019
$000
(Loss)/profit attributable to the ordinary equity holders of the Company
(156,783)
210,652
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)
E.
Rights granted to employees
CONSOLIDATED
2020
2019
831,681,768
831,261,875
868,630
1,414,347
832,550,398 832,676,222
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 28.
73
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 7. Receivables
Accounting policy
Trade receivables derived from contracted sales are recognised initially at fair value and subsequently at amortised
cost, less any expected credit losses (ECL). Trade receivables from provisionally priced sales are carried at fair value.
The carrying value less the estimated credit adjustments is assumed to approximate their fair values due to their
short-term nature. Trade receivables are due for settlement no more than 45 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 any ECLs.
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.
The Group measures the loss allowance for a financial asset at an amount equal to the lifetime ECL. Where the financial
asset’s credit risk has not increased significantly since initial recognition, the Group will measure the loss allowance
based on 12 months ECL. A simplified approach is taken to accounting for trade and other receivables as well
as contract assets and records the loss allowance at the amount equal to the lifetime ECL. In applying this simplified
method, the Group uses its historical experience, external indicators and forward-looking information to calculate
the ECL.
Current
Trade receivables
Trade receivables – provisionally priced
Other receivables (a)
Prepayments
Non-current
Other receivables
A. Other receivables
2020
$000
2019
$000
26,252
–
22,335
14,978
63,565
54,976
19,285
24,596
9,212
108,069
296
1,056
These amounts relate to long service leave payments recoverable from the Coal Mining Industry Long Service Leave Fund,
rebates receivable, Goods and Services Tax (GST) refunds receivable and security deposits. None of these receivables are
impaired or past due but not impaired.
B.
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 21.
C.
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 21. The Group assessed the ECL in relation to trade and other
receivables in the current year and the prior year to be immaterial and no loss allowance has been recorded.
74
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 8. 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 45 days of recognition.
Trade and other payables
9.
Inventories
2020
$000
2019
$000
81,999
108,701
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
Less: Provision for obsolescence
A.
Inventory expense
2020
$000
46,092
3,322
33,272
(1,701)
80,985
2019
$000
67,658
2,748
27,485
(1,622)
96,269
Coal stocks recognised as an expense within cost of sales during the year ended 31 July 2020 amounted to $818,135,000
(2019: $755,856,000). During the financial year the Group recognised an inventory write-down to net realisable value
of $13,324,000 (2019: $nil).
75
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 10. Property, plant and equipment
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.
Property, plant and equipment includes Right of Use assets arising from leasing arrangements, shown separately
from owned and leasehold assets. Please see note 32 for additional information relating to the Group’s adoption
of AASB 16 from 1 August 2019.
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 2020 year. The expected useful life of plant and equipment is four to 20 years, buildings is 25 to 40 years
and motor vehicles is four to eight years. Land is not depreciated.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the
Statement of Comprehensive Income.
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. Refer to note 13 for further detail on impairment of assets.
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 Statement of Financial Position 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.
Right of use assets
At the commencement date of a lease (other than leases of 12 months or less and leases of low value assets), the
Group recognises a right of use asset representing its right of use to the underlying asset. Right of use assets are
initially recognised at cost, comprising the amount of the initial measure of the lease liability, any lease payments made
at or before the commencement date of the lease, less any lease incentives received, any initial direct costs incurred
by the Group and an estimate of the costs to be incurred by the Group in dismantling and removing the underlying
asset, restoring the site or underlying asset to the condition required by the terms of the lease, unless those costs
are incurred to produce inventories.
Subsequent to initial recognition, right of use assets are measured at cost (adjusted for any remeasurement of the
associated lease liability), less accumulated depreciation and any accumulated impairment loss. Right of use assets
are depreciated over the shorter of the lease term and the estimated useful life of the underlying asset, including any
lease extensions.
76
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 0
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77
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report
10. Property, plant and equipment (continued)
Significant judgements and estimates
Impairment assessment
A.
All property, plant and equipment allocated to cash generating units (CGUs) 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. Refer to note 13 for further detail on the significant judgements
and estimates used in impairment assessment.
Estimation of coal and oil reserves and resources
B.
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 (JORC).
The oil reserves and resources are equivalently calculated by appropriately qualified persons in accordance with the
Society of Petroleum Engineers Petroleum Reserves Management System (SPE-PRMS) (updated June 2019).
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. In particular the
increasing global focus on climate change and associated policy and regulatory risks may impact on future coal
demand and prices which could impact reserves and resource estimations.
Changes in coal and oil 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 and oil resources could have an impact on the recoverability of exploration and evaluation costs
capitalised. Refer to note 13 for details on impairment of assets.
New Acland Stage 3 approvals
C.
A number of uncertainties associated with the approvals, timeline and conditionality of the New Acland Stage 3
project (NAC03) remain at 31 July 2020. Consistent with the position outlined in financial report for the 2019 financial
year, the significant delays in the approval process, which have the potential to delay the commencement of NAC03,
have been assessed for indications of potential impairment to the Coal Mining QLD operations CGU assets. Refer
to note 13 for details on impairment of assets.
78
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 11.
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 three to five years.
Water rights
and mining
information
Goodwill
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 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 13 for details of impairment testing. Goodwill
impairments are not reversible.
Year ended 31 July 2020
Balance at 1 August 2019
Additions
Transfer from Property,
Plant and Equipment
Impairment charge
Amortisation charge
Balance at 31 July 2020
Year ended 31 July 2019
Balance at 1 August 2018
Additions
Transfer from Property,
Plant and Equipment
Impairment charge
Acquisition of business – Bengalla
Amortisation charge
Balance at 31 July 2019
NOTES
SOFTWARE
$000
GOODWILL
$000
WATER RIGHTS
$000
MINING
INFORMATION
$000
10
13
10
23
1,468
224
321
–
(570)
1,443
1,818
54
61
–
69
(534)
1,468
17,866
–
–
(12,271)
–
5,595
17,866
–
–
–
–
–
17,866
12,004
–
–
–
(557)
11,447
5,926
–
–
–
6,511
(433)
12,004
65,119
–
–
–
(2,977)
62,142
32,432
–
–
–
35,000
(2,313)
65,119
TOTAL
$000
96,457
224
321
(12,271)
(4,104)
80,627
58,042
54
61
–
41,580
(3,280)
96,457
Critical estimate – Goodwill impairment assessment
Management use judgement in determining the CGU’s that should be used for impairment testing and allocating
goodwill that arises from business combinations to these CGU’s. The Group’s goodwill of $17,866,000 before
impairment relates to the acquisition of Queensland Bulk Handling Pty Ltd (QBH) ($5,595,000) and certain coal
exploration assets (the exploration assets) ($12,271,000). Refer to note 13 for the details regarding the impairment
assessments performed at 31 July 2020 and related impairment charge to the profit and loss (2019: no impairment).
79
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 12. Exploration and evaluation
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.
Exploration and evaluation assets
Reconciliation
Balance at 1 August
Additions
Movements in rehabilitation
Impairment charge
Balance at 31 July
NOTES
2020
$000
2019
$000
94,223
301,589
301,589
280,301
12,899
21,286
206
13
(220,471)
2
–
94,223
301,589
Critical judgement – exploration and evaluation expenditure
During the year the Group capitalised various items of expenditure to the exploration and evaluation 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.
There are a number of factors which will be considered in determining the potential for successful development or sale
of an exploration asset and in particular the Company will consider the key climate change risks of a project in making
an investment decision.
If after expenditure is capitalised information becomes available suggesting that the recovery of expenditure is unlikely,
the amount capitalised is recognised in the profit or loss in the period when the new information becomes available.
Refer to note 13 for the details regarding the impairment assessments performed at 31 July 2020 and related
impairment charge to the profit and loss (2019: no impairment).
80
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 13.
Impairments of assets
Accounting policy
The Group tests assets for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
An impairment charge is recognised immediately in the statement of comprehensive income 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 (VIU).
For the purposes of assessing impairment, 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 CGU.
Irrespective of whether there is any indication of impairment, the Group also tests intangible assets with an indefinite
useful life or intangible assets not yet available for use for impairment annually. Goodwill is tested for impairment
annually, or more frequently if events or changes in circumstances indicate that the CGU to which it is allocated to for
impairment testing might be impaired.
With the exception of goodwill, the Company assesses annually for any indicator of a reversal of a previous impairment.
Goodwill previously impaired is non-reversible.
A.
CGU assessment
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 CGUs. These CGUs are different to the Group’s operating segments outlined in note 1.
B. Assessment of recoverable amount
The Company has undertaken a detailed assessment of the recoverable amount of certain CGUs at 31 July 2020. Recoverable
amounts has been determined using a either a FVLCD or VIU discounted cash flow model, with the exception of exploration
related CGUs which uses a comparable resource multiple. These methodologies are subject to critical judgement, estimates
and assumptions. The recoverable amount of certain CGU’s was determined to be below their carrying amount. These are
detailed below.
(i)
QLD Coal Mining operations
The QLD Coal Mining operations is predominantly comprised of the New Acland mine. The Company carefully considered
the potential impact that recent developments in the complex legal and regulatory environment may have and the possibility
of resultant impacts on future cash flows and recoverable amount for the CGU.
A summary of key events pertaining to New Acland Stage 3 project (NAC03) approvals are detailed below:
On 31 May 2017, the Land Court recommended that the Environmental Approval (EA) and Mining Lease (ML) for the project
not be granted;
On 14 February 2018, the Chief Executive of Department of Environment and Heritage Protection (DEHP) made a decision
to refuse the application for amendment of the EA;
On 28 May 2018 the Supreme Court of Queensland ruled in favour of New Acland with the key orders being:
– The decisions made by the Land Court on 31 May 2017 recommending rejection of the ML applications for NAC03, and for
the refusal of the application for amendment of the EA, were set aside with effect from 31 May 2017;
– The decision of the Chief Executive of Department of Environment and Science (DES) to refuse the application for an amendment
of the EA was set aside with effect from 14 February 2018; and
– The recommendations of the Land Court in respect of groundwater and intergenerational equity (as it relates to groundwater)
were held to be not relevant for consideration by the Land Court and that the matter of noise required further consideration
by the Land Court.
A hearing of the Land Court, in accordance with the instructions of the Supreme Court from the Judicial Review, was held
in early October 2018 with a decision handed down on 7 November 2018. The Land Court conditionally recommended
that the ML and EA amendment be granted subject to certain conditions including the Coordinator-General first amending
the noise limit conditions to 35 dBA in the evening and night with the Department of Environment and Science (DES)
incorporating the changes in the amendment of the EA by 31 May 2019;
81
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report Impairments of assets (continued)
13.
B. Assessment of recoverable amount (continued)
(i)
QLD Coal Mining operations (continued)
The Associated Water Licence (AWL) application process re-started during July 2018 following engagement with the
Department of Natural Resources, Mines and Energy (DNRM). On 19 January 2019, New Acland Coal Pty Ltd (NAC) lodged
an Amended AWL application which has now progressed through public consultation and is with the Minister for decision;
On 12 February 2019, NAC received a change report from the Coordinator-General in respect of the noise conditions for
NAC03. On 15 February 2019, DES confirmed that the change report had satisfied all of the preconditions imposed by the
Land Court for the approval of the ML and amendments to the EA and the EA was granted on 12 March 2019;
With approvals not forthcoming by 1 September 2019 New Acland completed a partial redundancy process;
The Supreme Court of Queensland decision was appealed by Oakey Coal Action Alliance (OCAA). On 10 September 2019,
the Queensland Court of Appeal found in NAC’s favour and dismissed the OCAA appeal. The orders requested by NAC
were granted on 1 November 2019. As a result of these orders there are no legal impediments to the Queensland Government
issuing the requisite project approvals;
On 5 June 2020, the High Court of Australia granted OCAA special leave to appeal in respect of the orders issued by
the Queensland Court of Appeal given on 1 November 2019. The date for the hearing of the appeal has been set for the
6 October 2020. If the hearing of the High Court is found in favour of OCAA the NAC03 approvals will likely be remitted
to the Land Court while if unsuccessful there are no further avenues for appeal;
The NAC03 project requires a Regional Interests Development Approval (RIDA) in accordance with the Regional Planning
Interests Act 2014. The application was approved, with conditions, by the Queensland Treasury on the 27 August 2020; and
The Minister for Natural Resources has indicated that a decision on the ML and the AWL will not be forthcoming while the
appeal to the High Court of Australia remains outstanding.
The Directors have determined the recoverable amount for the CGU based on a FVLCD calculation. This calculation uses
discounted cashflow projections, adjusted with probability weightings specific to individual scenarios to derive a weighted
average recoverable amount. Several scenarios have been assessed, considering a combination of different assumptions.
Key assumptions used in FVLCD calculations:
ASSUMPTION
DESCRIPTION
Extensions of
approval timelines
and coal tonnages
The extension of approval timelines has a direct impact on assumptions relating to the volume
of coal tonnages to be produced and sold. The assessments have been considered based on project
approvals being granted in 2021 in the earliest instance, or at the latest with operations recommencing
on 1 August 2027. The assumptions of the impairment assessment reflect that once approvals are
granted NAC03 operates for the full life of mine with varying tonnage scenarios considered to optimise
the return from the assets.
Coal price
The COVID-19 global pandemic has had a direct impact on the pricing assumptions in the short
term. Short-term coal prices have declined since 31 July 2019 while long-term indications of
pricing have remained largely consistent however given the current global market a slight reduction
in this long-term pricing has been reflected. The coal price range for assessments at 31 July 2020
is US$47.80–US$133.50 per tonne (nominal basis).
Foreign exchange
The assumed AUD:USD foreign exchange rate modelled is 0.68–0.73.
Discount rates
The future cash flows have been discounted using a post tax discount rate of 10.5% (2019: 10.0%).
In undertaking its impairment assessment, the Company has considered the potential impact of climate change risk on the future
cash flows contained within the FVLCD calculation. These risks include the potential impact on future coal prices of changes
in market supply and demand dynamics over the life of NAC03, and the potential for cost volatility associated with factors such
as climate change related regulatory changes and, or, market participation by suppliers of services to the Company.
These types of risks are taken into account in a variety of ways which include the use of forecast commodity prices and industry
risk measures as an input into the calculation of the discount rate applied against future cash flows. Given the near to medium
term timing and expected life of the project, the Company does not consider there to be significant risk of climate change
materially impacting project outcomes once current approvals are received.
82
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Having due regard to all relevant information, the Company has concluded that in aggregate these matters result in the
recoverable amount for the CGU being below its’ carrying value.
As a result of this impairment assessment an impairment charge of $110,783,000 has been recognised in the Statement
of Comprehensive Income at 31 July 2020 (2019: nil). This impairment charge has been recognised in the Group’s Coal Mining
QLD segment.
The recoverable amount and impairment charge calculated is outlined 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
2020
RECOVERABLE
AMOUNT
$000
IMPAIRMENT
CHARGE
$000
NOTES
10
10
10
10
11
12
29,592
62,208
866
516
688
–
12,864
–
52,585
–
–
45,334
93,870
110,783
In assessing the recoverable amount for the CGU the Directors have used reasonable assumptions and judgements of future
uncertainties in key pricing, discount and foreign exchange assumptions, probabilities of scenarios as well as those associated
with COVID-19. Any changes in probabilities or other assumptions could result in additional impairment of the remaining
carrying value of the CGU at risk of $93,870,000.
Additional considerations
The QLD Coal Mining Operations 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 are longer term.
The QLD Coal Mining Operations CGU is a customer of the Port Operations CGU of the Group. As such in the event that there
are circumstances which impact QLD Coal Mining Operations CGU, this may be relevant to the recoverable value of the Port
Operations CGU and will be a factor in any future impairment considerations.
During the 2020 financial year no indicators of impairment were noted with regard to the Port Operations CGU, however it was
tested in relation goodwill as outlined in (b)(ii).
The carrying value of the Port Operation CGU assets is set out below:
Property, plant and equipment
Land and buildings
Plant and equipment
Right-of-use assets
Port development
Plant under construction
Intangibles
Software
Goodwill
Total carrying value
NOTES
2020
$000
2019
$000
10
10
10
10
10
10
10
1,541
77,269
59,069
10,857
896
83
5,596
1,617
80,552
–
11,367
1,556
112
5,596
155,311
100,800
83
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report Impairments of assets (continued)
13.
B. Assessment of recoverable amount (continued)
(ii)
Goodwill
Goodwill (before impairments) relates to the acquisition of Queensland Bulk Handling Pty Ltd (Port Operations), $5,595,000,
and certain coal exploration assets (coal exploration assets), $12,271,000, totalling $17,866,000. Goodwill was applied to these
CGUs at the time of acquisition.
Port Operations
The recoverable amount of the Port Operations CGU has been determined based on a VIU calculation. This calculation uses
a discounted cash flow model. The future cashflows have been discounted using a post tax discount rate of 9.5% (31 July 2019:
9.0%). The recoverable amount was assessed to be greater than the carrying value for this CGU and as such no impairment
charge was recognised for the 2020 financial year (2019: nil). The Port Operations CGU is part of the Groups’ Coal Mining
QLD segment.
Coal exploration assets
The recoverable amount of the exploration asset CGUs has been determined based on a comparable resource multiple
attributable to the CGU. Details of the impairment assessment for the CGU are outlined in B(iii).
As a result of this impairment assessment, the recoverable amount of the CGU is below its carrying value. The goodwill
applied to the CGU was impaired as a result, with an impairment charge of $12,271,000 being recognised in the Statement
of Comprehensive Income. This impairment charge has been recognised in the Group’s Other segment.
(iii) Coal exploration and evaluation assets
The Company determined that an indicator of impairment existed as at balance date in respect of the North Surat and Yamala
Coal Exploration projects. The indicator arose as a result of the market conditions for coal exploration assets.
The recoverable amount of the CGUs has been determined based on a FVLCD calculation underpinned by a resource multiple.
A resource multiple is considered the appropriate valuation methodology for an exploration asset of this type as it represents
the price paid for the resources in market transactions for exploration tenures. In the current market conditions, the Group
determined that a resource multiple of $0.03 be ascribed to the JORC resources. The Company concluded the recoverable
amount for the CGU was below its’ carrying value.
As a result of this impairment assessment an impairment charge of $157,197,000 (excluding goodwill of $12,271,000),
was recognised in the Statement of Comprehensive Income for the year ended 31 July 2020. This impairment charge has
been recognised in the Group’s Other segment.
The recoverable amount and impairment charge calculated is outlined below:
North Surat coal project
Exploration and evaluation
Property, plant and equipment
Yamala coal project
Exploration and evaluation
Goodwill
Total
2020
RECOVERABLE
AMOUNT
$000
IMPAIRMENT
CHARGE
$000
23,069
10,861
147,816
–
5,939
–
9,381
12,271
39,869
169,468
Any changes in other assumptions could result in additional impairment, with a residual carrying value at risk of $39,869,000.
84
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS (iv) Oil producing and exploration assets
The Company determined that an indicator of impairment existed at balance date in respect of certain oil producing and
exploration assets. The indicator arose due to the significant decline in global oil prices impacted by the COVID-19 global
pandemic and the potential expiration of exploration rights in the future.
The Group has classified its Cooper Basin operated assets, Cooper Basin non-operated assets and Surat Basin assets
as separate CGUs.
The recoverable amount for each CGU is based on a FVLCD calculation. This calculation uses discounted cashflow projections,
with key assumptions including economically recoverable reserves, future production profiles, commodity prices, foreign
exchange rates, operating costs and future development costs necessary to produce the reserves.
Key assumptions used in FVLCD calculations:
ASSUMPTION
DESCRIPTION
Oil price
The oil price range for assessments at 31 July 2020 is US$40–US$65/bbl (real basis).
Foreign exchange
The assumed AUD:USD foreign exchange rate modelled is 0.68–0.73.
Discount rates
The future cash flows have been discounted using a post tax discount rate of 10.0%.
Oil exploration assets have been assessed with respect to the ongoing investment. Due to the potential relinquishment
of certain interests if expenditure commitments are not satisfied, it was determined that the recoverable amount for each
CGU was below their carrying amounts.
As a result of this impairment assessment a total impairment charge of $66,381,000 was recognised in the Statement
of Comprehensive Income for the year ended 31 July 2020. This impairment charge has been recognised in the Group’s
Other segment.
The recoverable amount and impairment charge calculated for each CGU is outlined below in respect of CGU assets where
impairment indicators were observed at 31 July 2020.
Property, plant and equipment
Oil producing assets
Cooper Basin operated
Cooper Basin non-operated
Surat Basin operated
Exploration and evaluation assets
Total
2020
RECOVERABLE
AMOUNT
$000
IMPAIRMENT
CHARGE
$000
NOTES
10
10
10
10
2,000
812
5,832
7,825
1,747
–
17,404
25,985
12,479
9,165
17,940
66,381
Any changes in assumptions could result in additional impairment, with a residual carrying value at risk of $17,404,000.
85
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 13.
Impairments of assets (continued)
Critical judgements and estimates
The determination of FVLCD and VIU requires the Directors to make estimates and assumptions about the expected
long-term commodity prices, production timing and recovery rates, foreign exchange rates, operating costs, reserve
and resource estimates (refer to note 10), 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
CGUs. The fair value measurements used in these calculations are based on non-observable market data which are
considered level 3 in the fair value hierarchy.
In determining a comparable resource multiple, judgement is involved in determining the appropriate discount to apply
to the resource multiple. The resource multiple is considered level 3 in the fair value hierarchy due to this judgement,
which uses non-observable market data, rather than quoted prices to determine the discount.
Judgement is involved in assessing whether there are indicators of impairment including the impact of events or changes
in circumstances on CGU’s, in addition to assessing the potential for expiration of exploration rights without renewal,
and the potential timing of such events.
These judgements, estimate and assumptions are subject to risk and uncertainty. In the event the recoverable
amount of assets is impacted by changes in these, the carrying amount of the assets may be further impaired or the
impairment charge reduced with the impact recognised in the statement of comprehensive income.
14. Provisions
Accounting policy
Short-term
employee
benefit
obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave, vesting sick leave
and redundancies 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 and rehabilitation 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.
86
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 2020
Current
Non-current
2019
Current
Non-current
EMPLOYEE
BENEFITS
$000
RESTORATION/
REHABILITATION
$000
OTHER
$000
TOTAL
$000
40,148
7,693
6,982
241,363
47,130
249,056
–
–
–
47,841
248,345
296,186
52,553
7,323
59,876
17,717
16,000
208,145
225,862
–
16,000
86,270
215,468
301,738
A.
Employee benefits
Current long service leave obligations expected to be settled after 12 months
2020
$000
2019
$000
14,505
17,410
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
Provision released to profit or loss
Provision arising on acquisition
Charged to profit or loss – unwinding of discount
Balance at 31 July
NOTES
10
17(c)
2020
$000
225,862
29,962
(10,983)
–
4,215
2019
$000
167,643
21,348
(3,427)
35,552
4,746
249,056
225,862
87
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 14. Provisions (continued)
C. Other provisions
The Directors of the Company’s subsidiaries, Northern Energy Corporation Limited (NEC) and Colton Coal Pty Ltd (Colton
Coal), placed the companies into voluntary administration on 17 October 2018. The companies were subsequently placed
into liquidation by creditors at a meeting on 26 July 2019. At 31 July 2019, when Wiggins Island Coal Export Terminal Pty Ltd
(WICET), NEC and Colton Coal were claiming in proceedings that New Hope and certain of its subsidiaries had guaranteed the
debts of NEC and Colton Coal under the Deed of Cross Guarantee (DOCG) in an amount of approximately $155,000,000, the
Group had recognised a provision for $16,000,000 which it considered at that time was the best estimate of the future probable
net economic outflows associated with the NEC and Colton Coal matter.
A summary of developments during the year ended 31 July 2020 associated with this matter, are outlined below:
Deed of cross guarantee proceedings
On 20 August 2019, WICET and the Liquidators on behalf of NEC and Colton Coal filed appeals with the Court of Appeal
in New South Wales in relation to the Supreme Court’s decision in favour of the Company on the DOCG;
On 20 December 2019, the Court of Appeal in New South Wales dismissed (with costs) WICET, NEC and Colton Coal’s
appeal, confirming the Supreme Court’s declaration that the Company had not guaranteed the debts of NEC and Colton Coal
under the DOCG;
In January 2020, applications were made by WICET and by the Liquidators on behalf of NEC and Colton Coal for special leave
to appeal to the High Court of Australia in relation to the New South Wales Court of Appeal decision; and
On 12 June 2020, the High Court of Australia dismissed (with costs) WICET, NEC and Colton Coal’s applications for special
leave to appeal. This left in place the determinations of the Supreme Court and Court of Appeal in New South Wales that the
Company has not guaranteed the debts of NEC and Colton Coal under the Company’s DOCG.
Administration/liquidation process
On 19 July 2019, the administrators appointed to NEC and Colton Coal issued a Voluntary Administrators Report in advance
of the second meeting of creditors. This Report identified potential claims that may be available to any Liquidators appointed
to NEC and Colton Coal, subject to the Liquidators obtaining funding and conducting further investigations.
On 5 December 2019, the Liquidators indicated that they intended to continue their investigations into NEC and Colton Coal,
including investigating whether NEC and Colton Coal were trading whilst insolvent, and whether any claims existed in that regard.
On 15 May 2020, the Liquidators advised that their investigations into NEC and Colton Coal were continuing and alleged that
the value of the potential claims may be in the range of $150.2 to $168.3 million. No proceedings have been commenced with
respect to these potential claims. The Group denies these alleged potential claims.
Summary
Given the successful results in relation to the DOCG proceedings, as no proceedings have been commenced by the Liquidators
against New Hope and given the uncertainty of future funding of the Liquidators, the Company has considered its position
and has determined that no provision is required to be made as at 31 July 2020, as a result of the liquidation process, and the
provision has therefore been released in full.
88
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 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 judgment 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. There are policy change risks in particular with the growing global focus
on climate change which may impact on rehabilitation obligations. 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.
During the year, the Jeebropilly Operation lodged a revised estimated rehabilitation calculation (ERC) with the DES.
As a result, in January 2020, Jeebropilly Pty Ltd (Jeebropilly) was issued with a notice requesting additional financial
assurance of $65,659,000 which was lodged on 4 March 2020. After the lodgement of this revised ERC as a result
of the closure of the Jeebropilly Operation in November 2019, rehabilitation activities have been undertaken as well
as further planning for the requirements of the site. On 18 September 2020, an updated ERC for the Jeebropilly
Operation was lodged with the DES for assessment, which would reduce the rehabilitation obligation significantly.
The rehabilitation provision for the year ended 31 July 2020, has been prepared to reflect this updated ERC
as representing the Company’s best estimate of future probable economic outflows to settle the obligation and
as a result the provision has decreased with an impact on the Statement of Comprehensive Income of $9,782,000
with a non-current liability of $8,760,000.
The Company has made judgements in respect of the probable future cash outflows associated with this rehabilitation
based on the intentions of the Jeebropilly Operations in respect of the previously mined areas. It is noted that
there are presently multiple commercial transactions which may influence the final land use of the areas previously
mined at Jeebropilly and these have been relevantly considered in determining the likelihood and potential timing
of rehabilitation activities and the revised ERC aligns with these potential uses within the existing EA requirements.
Further progress in relation to the status of the commercial transactions may reduce the current rehabilitation
provision. In the event the Company is unable to secure the approval of the updated ERC, and or complete one
or more of the commercial transactions, additional provisions may be required.
15. 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
A.
Cash at bank and on hand
2020
$000
2019
$000
70,377
58,827
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 0.60% (2019: 0% and 1.85%).
B.
Risk exposure
Information about the Group’s exposure to foreign exchange risk and credit risk is detailed in note 21.
89
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 16. Equity investments
Accounting policy
From 1 August 2018, the Group classifies its financial assets as either subsequently measured at fair value or amortised
cost and the classification is determined by the Group’s business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will be recorded through profit and loss or OCI. For equity
investments the Group must make an irrevocable election on initial recognition to account for any equity investment
at FVOCI. At initial recognition the group measures a financial asset at its fair value plus transaction costs attributable
to the acquisition (where the asset is not FVTPL). Transaction costs for financial assets that are FVTPL are expensed
in the profit and loss.
The Group elected to present in Other Comprehensive Income (OCI) changes in the fair value of all its equity investments
previously classified as available for sale on the basis of the long-term nature of the investments. As a result there
was a reclassification of the available for sale financial assets to equity investments at Fair Value through Other
Comprehensive Income (FVOCI) resulting in the change as reflected in the Statement of Changes in Equity from
retained earnings to reserves as noted above.
Listed equity securities
An irrevocable election has been made to classify existing equity investments held by the Group at FVOCI.
17. Borrowings
2020
$000
193
2019
$000
723
Accounting policy
Borrowings comprise interest-bearing loans and lease liabilities, net of finance costs. Refer to each sub-section which
follows for details of the Group’s accounting policies on interest-bearing loans, leases and finance income and expense.
Current liabilities
Lease liabilities 1
Secured loans
Non-current liabilities
Lease liabilities 1
Secured loans
2020
$000
2019
$000
9,810
928
10,738
73,335
355,024
428,359
439,097
2,532
–
2,532
5,258
352,948
358,206
360,738
1 The prior year comparative represents amounts accounted for in respect of finance leases under AASB 117. The Group adopted AASB 16 for the first time
on 1 August 2019. Refer to note 32 for the impact of adoption.
Details of the Group’s exposure to risks arising from current and non-current borrowings are set out in note 21.
90
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS CHANGES ARISING IN LIABILITIES FROM FINANCING ACTIVITIES
Lease liabilities
Secured borrowings
Total liabilities from financing activities
2019
$000
CASH FLOWS
$000
7,790
(10,815)
352,948
360,738
–
(10,815)
NON‑CASH
CHANGES 1
$000
86,170
3,004
89,174
2020
$000
83,145
355,952
439,097
1 Of the total non-cash change in lease liabilities $71,089,000 relates to leases on initial adoption of AASB 16 and a further $15,215,000 relating to new
leases entered into during the year. Refer to note 32.
The fair value of interest bearing liabilities materially approximate their respective carrying values as at 31 July 2020.
A.
Interest-bearing loans
Accounting policy
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 to the extent that the Group has no unconditional right to defer settlement
of the liability for at least 12 months after the balance date.
Secured loans
Current liabilities
Non-current liabilities
2020
$000
2019
$000
928
355,024
355,952
–
352,948
352,948
(i)
Financing activities during the period
FINANCIAL FACILITIES ($000)
The Group’s secured loan facility is with a syndicate of Australian and international
banks. The facility comprised a $600,000,000 drawable amortising facility and
a $300,000,000 credit support facility. The facility’s drawable line for credit is for
general corporate purposes and has a maturity of November 2023. Refer to note
17(e) for further information.
During the period, $135,000,000 (2019: $400,000,000) of debt drawn under the
facility was repaid. At the end of the financial year, the secured loan facility had
amortised to $510,000,000 (2019: $570,000,000). Facilities utilised at the end
of the financial year was $360,000,000 (2019: $360,000,000).
The Group has complied with the financial covenants of its borrowing facilities during
the 2020 and 2019 financial year period.
360,000 Facilities utilised at reporting date
150,000 Facilities not utilised at reporting date
91
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 17. Borrowings (continued)
A.
Interest-bearing loans (continued)
(ii)
Secured liabilities and assets pledged as security
The secured facility holds a fixed and floating charge over all assets held by the Group (with the exception of excluded
subsidiaries). The excluded subsidiaries include the following controlled subsidiaries Bridgeport Energy Limited, Bridgeport
Eromanga Pty Ltd, Bridgeport (Cooper Basin) Pty Ltd, Bridgeport (QLD) Pty Ltd, Bridgeport Surat Basin Pty Ltd, Oilwells Inc
of Kentucky and Oilwells Sole Risk Pty Ltd as well as previously controlled subsidiaries NEC and Colton Coal. Lessors hold first
rights in respect of leased assets.
B.
Lease liabilities
Accounting policy
Lease liabilities are recognised, measured, presented and disclosed in accordance with AASB 16. Please see
note 32 for additional information relating to the Group’s adoption of AASB 16 from 1 August 2019. The Group
presents right-of-use assets in property, plant and equipment and lease liabilities in borrowings in the Statement
of Financial Position.
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises
a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets.
For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the
term of the lease, which takes into account any extensions that are likely to be enacted, unless another systematic
basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate can not be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate
as the discount rate. Lease payments included in the measurement of the lease liability comprise:
Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
The amount expected to be payable under residual value guarantees;
The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments
in an optional renewal period if the Group is reasonably certain to exercise an extension option and penalties
for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there
is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, or if the
Group changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease
liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are
recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term
of 12 months or less. Low-value assets are comprised of IT equipment and small items of office furniture.
The Group leases property, including office buildings and port facilities, and plant and equipment. Lease terms are negotiated
on an individual basis and contain a wide range of terms and conditions.
92
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS The maturity profile of lease liabilities recognised at the end of the financial year is:
Lease liabilities are payable as follows 1:
Within one year
Later than one year but not later than five years
Later than five years
Minimum lease payments
Future finance charges
Total lease liability
The present value of lease liabilities is as follows 1:
Within one year
Later than one year but not later than five years
Later than five years
Total lease liability
1 The prior year comparative represents amounts accounted for in respect of finance leases under AASB 117.
Amounts recognised in the profit or loss during the 2020 financial year are:
Depreciation expense on right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases 1
Expense relating to leases of low value assets 1
Total expense for leases recognised in profit or loss
1 Amounts recognised within profit or loss as cost of sales.
(i)
Secured liability
NOTE
2020
$000
2019
$000
32
32
12,956
20,862
96,545
130,363
(47,218)
83,145
9,810
9,639
63,696
83,145
2020
$000
11,586
3,926
1,455
247
17,214
2,767
5,353
–
8,120
(330)
7,790
2,532
5,258
–
7,790
2019
$000
–
–
–
–
–
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.
93
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 17. Borrowings (continued)
C.
Finance income and expense
Accounting policy
Finance income comprises interest income on funds invested. Interest income is recognised as it accrues, using the
effective interest method.
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, interest expense
in relation to leases. All finance expenses are recognised as expenses in the period in which they are incurred unless
they relate to the construction of a qualifying asset and are then capitalised. Qualifying assets are assets that
necessarily take a substantial period of time to get ready for their intended use or sale.
Recognised in the statement of comprehensive income
Interest income
Finance income
Interest expense on lease liabilities 1
Interest on drawn debt facility
Amortisation of transaction costs on borrowings
Commitment fees on borrowings
Establishment costs of bank guarantee facility
Unwinding of discount on provisions
Other financing costs
Net financing expenses
2020
$000
689
689
2019
$000
5,407
5,407
(3,926)
(325)
(13,219)
(10,440)
(2,076)
(2,411)
–
(4,215)
(528)
(1,384)
(2,175)
(4,366)
(4,746)
472
(26,375)
(22,964)
1 The prior year comparative represents amounts accounted for in respect of finance leases under AASB 117.
D.
Contingent liabilities
Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the accounts are as follows:
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 Company’s share of security provided by the bankers of the Bengalla Joint Venture
in respect of bank guarantees provided to rail and port suppliers.
No losses are anticipated in respect of any of the above contingent liabilities.
The parent company has given secured guarantees in respect of:
2020
$000
2019
$000
15,820
11,318
13,669
13,422
(i) Mining restoration and rehabilitation
231,594
209,657
The liability has been recognised by the Group in relation to its rehabilitation obligations.
(ii) Statutory body suppliers, financiers and various other entities
29,489
24,740
No liability was recognised by the consolidated entity in relation to these guarantees
as no losses are foreseen on these contingent liabilities.
Other than the above and the matters set out in note 14(c) there are no other contingent liabilities of the Group as at 31 July 2020.
94
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS
E.
Lines of credit
Unrestricted access was available at balance date to the following lines of credit available of $300,000,000 (2019: $300,000,000).
2020 ($000)
2019 ($000)
247,414 Guarantee facility utilised
52,586 Unused at balance date
220,975 Guarantee facility utilised
79,025 Unused at balance date
18. Derivative financial instruments
Accounting policy
Commodity hedging and 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.
95
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 18. Derivative financial instruments (continued)
Current assets
Forward foreign exchange contracts
Non current assets
Forward foreign exchange contracts
Current liabilities
Forward foreign exchange contracts
2020
$000
45,852
8,912
54,764
2019
$000
–
190
190
–
–
10,774
10,774
A.
Instruments used by the group
New Hope Corporation Limited and certain controlled entities are parties to derivative financial instruments in the normal course
of business in order to hedge exposure to fluctuations in foreign exchange rates and commodity pricing.
At balance date foreign exchange contracts represented assets with a fair value of $54,764,000 (2019: $190,000) and liabilities
of nil (2019: $10,774,000). At balance date the details of outstanding contracts are:
(i)
Foreign exchange contracts
MATURITY
0 to 6 months
6 to 12 months
12 to 18 months
SELL US DOLLARS
BUY AUSTRALIAN DOLLARS
2020
$000
225,630
202,736
46,319
2019
$000
365,570
311,894
37,482
474,685
714,946
AVERAGE EXCHANGE RATE
2020
2019
0.6648
0.6215
0.5829
0.7057
0.7022
0.6937
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 and pricing contracts and the consolidated entity is exposed to loss in the
event that counterparties fail to deliver the contracted amount. At balance date $474,685,000 (2019: $714,946,000) was
receivable relating to forward foreign exchange contracts.
96
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 19. Dividends
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
2018 final dividend at 8.00 cents per share – 100% franked (tax rate – 30%)
(paid on 6 Nov 2018)
2019 interim dividend at 8.00 cents per share – 100% franked (tax rate – 30%)
(paid on 7 May 2019)
2019 final dividend at 9.00 cents per share – 100% franked (tax rate – 30%)
(paid on 5 Nov 2019)
2020 interim dividend at 6.00 cents per share – 100% franked (tax rate – 30%)
(paid on 5 May 2020)
Total dividends paid
2020
$000
2019
$000
–
–
66,501
66,501
74,854
49,902
–
–
124,756
133,002
B.
Proposed dividends
The Company is focused on investment in key capital programs (major midlife shut of the dragline at Bengalla) to underpin
the future of its operations and ensure sustainable long-term shareholder returns. In order to fund this investment and in-light
of the difficult global economic conditions as a result of COVID-19, the Directors will not be declaring a final dividend.
The Directors declared and paid a final dividend for the 2019 financial year of 9.0 cents per share. This dividend was fully
franked based on tax paid at 30%. The proposed dividend of $74,854,000 was not recognised as a liability at 31 July 2019.
C.
Franked dividends
The franked portions of the final dividend recommended after 31 July 2020 will be franked out of existing franking credits.
Franking credits available for subsequent financial years based on a tax rate of 30% (2019: 30%)
508,505
556,919
The above amounts represent the balances of the franking account as at the end of the financial year, adjusted for franking
credits that will arise from the payment 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 Directors have not recommended a dividend since the 2020 financial year end. In the previous
financial year, the impact on the franking account of the dividend recommended by the Directors after the 2019 financial year
end, but not recognised as a liability at 31 July 2019, was a reduction in the franking account of $32,080,000.
2020
$000
2019
$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.
97
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 20. 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 28.
C.
Share capital
Issued and paid up capital
831,708,318
96,692
831,266,603
96,315
2020
NUMBER OF SHARES
2020
$000
2019
NUMBER OF SHARES
2019
$000
D. Movements in share capital
DATE
DETAILS
NUMBER OF SHARES
ISSUE PRICE
1 August 2019 Opening Balance
831,266,603
1 August 2019 Vesting of performance rights
441,715
$0.0000
31 July 2020
Transfer from share-based payment reserve to equity
–
31 July 2020
Balance
1 August 2018 Opening Balance
831,708,318
831,151,552
1 August 2018 Vesting of performance rights
115,051
$0.0000
31 July 2019
Transfer from share-based payment reserve to equity
–
31 July 2019
Balance
831,266,603
$000
96,315
–
377
96,692
95,905
–
410
96,315
E.
Capital risk management
The Group’s objectives when managing capital are to safeguard the Company’s 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.
98
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 0
0
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99
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report
20. Equity (continued)
Reserves (continued)
F.
Nature and purpose of reserves
Capital profits
This reserve represents amounts allocated from retained profits that were profits of a capital nature.
Equity investments Changes in the fair value of equity investments are taken to this reserve. Amounts are recognised in the
Statement of Comprehensive Income or transferred to retained earnings when the associated assets are
sold or impaired.
Revaluation
Hedging
Share-based
payments
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.
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 18. Amounts are recognised in the
Statement of Comprehensive Income when the associated hedged transaction affects the Statement
of Comprehensive Income.
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.
G. Retained profits
Carrying amount at beginning of year
Net profit after income tax
Dividends paid
Reclassify equity investments from retained earnings to FVOCI on initial adoption
of AASB 9
Transfer to retained earnings on disposal of equity investments
Carrying amount at end of year
NOTES
2020
$000
2019
$000
1,867,674
1,770,878
(156,783)
210,652
19(a)
(124,756)
(133,002)
20(f)
20(f)
–
–
27,861
(8,715)
1,586,135
1,867,674
100
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 21. Financial risk management
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:
FAIR VALUE
THROUGH OTHER
COMPREHENSIVE
INCOME
$000
NOTES
HEDGING
DERIVATIVES
$000
AMORTISED
COST
$000
FAIR VALUE
THROUGH
PROFIT & LOSS
$000
TOTAL
$000
Financial assets
2020
Cash and cash equivalents
Trade and other receivables
Equity investments
Derivative financial instruments
2019
Cash and cash equivalents
Trade and other receivables
Equity investments
Derivative financial instruments
Financial liabilities
2020
Lease liabilities
Accounts Payable
Derivative financial instruments
Secured borrowings
2019
Lease liabilities
Accounts Payable
Derivative financial instruments
Secured borrowings
15
16
18
15
16
18
17
18
17
17
18
17
–
–
193
–
193
–
–
723
–
723
–
–
–
–
–
–
–
–
–
–
–
–
–
54,764
54,764
–
–
–
190
190
–
–
–
–
–
–
–
10,774
–
10,774
70,377
48,883
–
–
119,260
58,827
80,628
–
–
–
–
–
–
–
–
19,285
–
–
70,377
48,883
193
54,764
174,217
58,827
99,913
723
190
139,455
19,285
159,653
83,145
81,999
–
355,952
521,096
7,790
108,701
–
352,948
469,439
–
–
–
–
–
–
–
–
–
–
83,145
81,999
–
355,952
521,096
7,790
108,701
10,774
352,948
480,213
101
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report
21. Financial risk management (continued)
A. Market risk
(i)
Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated
in a currency that is not the Group’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 US dollars for the
subsequent year, up to 57% of anticipated revenue beyond a year but less than two years and up to 50% for revenue beyond
two years but less than three years. All hedges of projected export coal sales qualify as “highly probable” forecast transactions
for hedge accounting purposes.
The Group’s exposure to foreign currency risk at the reporting date was as follows:
Cash and cash equivalents
Trade receivables
Forward exchange contracts – sell foreign currency (cash flow hedges) 1
Trade payables
1 Notional amounts.
(ii)
Commodity hedge risk
2020
USD
$000
17,647
12,107
2019
USD
$000
18,393
36,975
303,000
503,000
453
1,711
Commodity hedge contracts are used to manage price risk. Senior management is responsible for managing exposures in pricing
by using commodity hedge contracts. Contracts are designated as cash flow hedges. Commodity price contracts are designated
at Group level as hedges of price risk on specific future transactions.
Group sensitivity
Based on the trade receivables, cash and trade payables held at 31 July 2020, 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 $2,566,000/($3,136,000) (2019: $6,054,000/($4,953,000)), 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 amount.
Based on the forward exchange contracts held at 31 July 2020, 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 $38,137,000/($46,608,000) (2019: $79,647,000/($65,239,000)). There is no effect on post-tax profits.
(iii) Price risk
The Group is exposed to equity securities price risk arising from certain investments held by the Group and classified on the
Statement of Financial Position as equity instruments.
The Group’s equity investment is publicly traded. The impact of increases/decreases in the financial instrument on the Group’s
equity as at balance date is $26,000/($26,000) (2019: $72,000/($72,000)). The analysis is based on the assumption that the
equity instrument had increased/decreased by 10% with all other variables held constant.
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.
(iv) Fair value interest rate risk
Refer to note 21(e).
102
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 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 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 25). 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
C.
Liquidity risk
NOTES
15
18
2020
$000
48,883
70,377
54,764
2019
$000
99,913
58,827
190
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 secured loan facilities and leases detailed in note 17. The maturity
of these arrangements are shown in (d) below.
D. Maturity of financial liabilities
The maturity groupings of derivative financial instruments are detailed in note 18.
Trade payables and accruals (note 8) are normally settled within 45 days of recognition. The Group’s borrowings (note 17)
comprise leases payable over a period of one to 22 years. The leases are fixed rate leases with a weighted average interest
rate of 5.21%. The table below details the contractual cash flows of lease liabilities:
0 TO 6 MONTHS
$000
6 TO 12 MONTHS
$000
1 TO 2 YEARS
$000
2 TO 5 YEARS
$000
AFTER 5 YEARS
$000
TOTAL
$000
Lease liabilities
5,720
7,236
7,375
13,487
96,545
130,363
CARRYING
AMOUNT
$000
83,145
The Group’s secured borrowings as outlined in note 17 are an amortising facility reducing by $30,000,000 six monthly with
any final balance up to $330,000,000 at the end of the facility term being repayable in the two to five year period.
E.
Cash flow and fair value interest rate risk
The Group is exposed to interest rate risk because entities in the Group borrow funds at floating interest rates. This risk of adverse
movements in floating interest rates has been considered and at this time is not deemed appropriate to actively mitigate this risk
through the use of derivatives or similar products.
Group sensitivity
If interest rates had been 2% higher/lower and all other variables were held constant, the Group’s profit after tax for the year
ended 31 July 2020 would increase/(decrease) by $7,200,000/($5,040,000).
103
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 21. Financial risk management (continued)
F.
Fair value measurements accounting policy
Accounting policy
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 13 Fair Value Measurement 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);
b.
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
c.
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 and liabilities measured and recognised at fair value as at 31 July 2020 and
31 July 2019.
2020
Assets
Derivatives used for hedging
Trade receivables – provisionally priced
Equity investments
Total assets
Liabilities
Derivatives used for hedging
Total liabilities
2019
Assets
Derivatives used for hedging
Trade receivables – provisionally priced
Equity securities
Total assets
Liabilities
Derivatives used for hedging
Total liabilities
104
LEVEL 1
$000
LEVEL 2
$000
TOTAL
$000
–
–
193
193
–
–
–
–
723
723
54,764
54,764
–
–
–
193
54,764
54,957
–
–
–
–
190
190
19,285
19,285
–
723
19,475
20,198
–
–
10,774
10,774
10,774
10,774
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS The fair value of financial instruments traded in active markets (such as equity investments) is based on quoted market prices
at the reporting date. The quoted market price used for financial assets held by New Hope Corporation Limited is the last
sale price.
The fair value of forward exchange contracts is determined using forward exchange market rates at the reporting date. The fair
value of trade receivables on provisionally priced sales is determined with reference to market pricing and contractual terms
at the reporting date.
22. Interests in other entities
Accounting policy
Subsidiaries
A.
Significant subsidiaries include New Hope Bengalla Pty Ltd and Bridgeport Energy Limited as well as companies
identified in the Deed of Cross Guarantee in note 30.
Joint arrangements
B.
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.
Lenton Joint Venture
A subsidiary of New Hope Corporation Limited has entered into a joint operation to develop the Burton Mine and
Lenton Project area. The subsidiary has a 90% participating interest in this joint operation and is entitled to 90% of the
output of the project. The Group’s interests employed in the joint operations are included in the Statement of Financial
Position, in accordance with the accounting policy described above.
Joint ventures
Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the
Statement of Financial Position.
Other unincorporated arrangements
As a result of the acquisition of an additional 30% interest in the Bengalla Joint Venture in the prior year, the Group
has identified another category of interest in other entities and provides below the updated accounting policy of that
arrangement.
In some cases, the Group participates in unincorporated arrangements and has rights to its share of the assets and
obligations rather than a right to a net return, but does not share joint control. In such cases, the Group recognises its
share of assets and liabilities; revenue from the sale of its share of the output and its share of any revenue generated
from the sale of the output by the unincorporated arrangement and its share of expenses. The Group measures these
interests in accordance with the terms of the arrangement, which is usually in proportion to the Group’s ownership
interest. These amounts are recorded in the Group’s financial statements on the appropriate lines.
Bengalla Joint Venture
A subsidiary of New Hope Corporation Limited holds a 80% interest in the Bengalla thermal coal mine in New South
Wales. This is an unincorporated Joint Venture that is operated by BMC. BMC is proportionately owned by the participants.
105
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 23. Business combination
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 Group’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
During 2019, New Hope Corporation Limited’s wholly owned subsidiary, New Hope Bengalla Pty Ltd, increased its stake in the
assets and liabilities of the Bengalla Joint Venture by 30% on 3 December 2018 and a further 10% on 25 March 2019. The 10%
acquisition had an effective date of 1 December 2018. The Bengalla Joint Venture is a coal mining and extraction operation
producing thermal coal in the Hunter Valley, New South Wales in which New Hope Bengalla Pty Ltd has held 40% since
1 March 2016.
Details of the purchase consideration and the net assets acquired are as follows:
Purchase Consideration (refer 23(b) below)
Total Purchase Consideration
The fair value of assets and liabilities recognised as a result of the
acquisition are as follows:
Cash
Trade and other receivables
Inventories
Property, Plant and Equipment
Intangibles
Accounts payable and accruals
Provisions
Net assets acquired
There are no acquisitions in the current period.
106
30%
$000
10%
$000
TOTAL
40%
$000
645,147
193,275
838,422
3,787
13,721
18,236
3,371
5,239
7,233
7,158
18,960
25,469
622,188
185,419
807,607
31,133
(12,240)
(31,678)
10,447
(7,038)
(11,396)
41,580
(19,278)
(43,074)
645,147
193,275
838,422
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Revenue and profit contribution
The acquired business contributed revenues of $253,024,000 and profit before tax and non regular items of $82,173,000
to the Group for the period 1 December 2018 to 31 July 2019. The anticipated increase in production and sales tonnes annually
are 4,000,000 tonnes. Due to the variability in key market factors and operational variations it was considered impractical
to disclose the estimated revenue and profit/(loss) assuming the acquisition had occurred on 1 August 2018.
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
30%
$000
10%
$000
TOTAL
40%
$000
645,147
193,275
838,422
(3,787)
(3,371)
(7,158)
641,360
189,904
831,264
It is noted that incidental costs of acquisition were incurred of $47,729,000 (stamp duty $42,327,000, financial advice $4,516,000
and other costs of $886,000) and these cash flows were recognised as outflows from operating activities in the prior period.
Significant judgement and estimate – acquisition fair value
The determination of the fair values of net identifiable assets acquired, and of any goodwill, involves significant
judgment. 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.
24. Discontinued operations
Accounting policy
A discontinued operation is a component or subsidiary of the Group that has been disposed of or is classified
as held for sale and that represents a separate major line of business or geographical area of operations, is part
of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired
exclusively with a view to resale. The results of discontinued operations are presented separately in the Statement
of Comprehensive Income.
A. Description
On 17 October 2018, two New Hope wholly owned subsidiaries, NEC and Colton Coal were placed into voluntary administration.
Effective on this date, the Group lost control over these subsidiaries. The financial information relating to the discontinued
operations for the period to 17 October 2018 is set out in notes 24(b) and 24(c).
107
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 24. Discontinued operations (continued)
B.
Financial performance and cash flow information
Revenue
Expenses
Loss before income tax
Income tax benefit
Loss after income tax from discontinued operations
Profit on loss of control of subsidiary after income tax (see (c) below)
Profit from discontinued operations
Other comprehensive income from discontinued operations
Net cash outflow from operating activities
Net cash inflow from investing activities
Net cash inflow from financing activities
Net cash flow from discontinued operations
Basic earnings per share from discontinued operations
Diluted earnings per share from discontinued operations
C. Details of the disposal of the subsidiaries
Total consideration
Carrying amount of net liabilities
Profit before income tax
Income tax benefit
Profit on loss of control of subsidiary after income tax
25. Commitments
A.
Capital commitments
2019
$000
26
(2,828)
(2,802)
–
(2,802)
3,022
220
–
(329)
26
303
–
CENTS
0.03
(0.03)
2019
$000
–
(3,022)
3,022
–
3,022
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Property plant and equipment
Within one year
2020
$000
2019
$000
19,091
16,372
B.
Lease commitments: Group as lessee
Refer to note 32 for details of the Group’s transition to AASB 16. Commitments disclosed as non-cancellable operation leases
under AASB 117 have been recorded as lease liabilities from 1 August 2019, with the exception of short-term and low-value
leases. Refer to note 17 for the maturity profile of the Group’s lease liabilities at 31 July 2020.
108
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 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 leases expiring within five to 10 years. The leases have varying terms, escalation clauses
and renewal rights. On renewal, the terms of the leases are renegotiated. The Group leases office space and equipment.
Commitments for minimum lease payments in relation to non-cancellable leases as at 31 July 2019,
prepared and reported under AASB 117, were payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
2019
$000
12,832
24,909
19,509
57,250
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.
26. Events occurring after the reporting period
No events have occurred since 31 July 2020, which would require disclosure in the financial report.
27. Related party transactions
A. Parent entities
The parent company within the Group is New Hope Corporation Limited. The ultimate Australian parent entity and controlling
entity is Washington H. Soul Pattinson and Company Limited (WHSP) which at 31 July 2020 owned 49.98% (2019: 50.01%)
of the issued ordinary shares of New Hope Corporation Limited.
B.
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
Ms J.E. McGill 1
Mr T.C. Millner
Ms S.J. Palmer 2
Mr I.M. Williams
Executive Directors
Mr S.O. Stephan
1 Ms J.E. McGill was appointed to the Board effective from 22 June 2020.
2 Ms S.J. Palmer’s resignation from the Board was effective 25 November 2019.
109
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 27. Related party transactions (continued)
B.
Key management personnel (continued)
(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. Busch¹
Mr B.C. Armitage
POSITION
EMPLOYER
Managing Director
Chief Operating Officer
Chief Financial Officer
New Hope Corporation Limited
New Hope Corporation Limited
New Hope Corporation Limited
Chief Development Officer
New Hope Corporation Limited
1 Mr M.J. Busch resigned and his employment ceases on 12 October 2020. An acting CFO, Mr R.J. Bishop, has been appointed for an interim period from
20 July 2020 to 31 January 2021 and KMP from 1 August 2020.
(iii) Key management personnel compensation
Short-term employee benefits
Long-term employee benefits
Post employment benefits
Share-based payment
C.
Transactions with related parties
Reimbursement of expenses paid to Australian controlling entity (WHSP)
Payment for legal services rendered (Herbert Smith Freehills) 1
Dividends paid to ultimate Australian controlling entity (WHSP)
Payment for consulting services rendered (Pitt Capital Partners Ltd)
2020
$
2019
$
5,473,694
4,954,587
15,851
186,040
176,093
81,284
163,481
493,290
5,851,678
5,692,642
2020
$
92,400
20,765
2019
$
1,010
135,440
62,354,463
66,511,427
293,996
4,956,369
1 Mr I.M. Williams was a partner in the firm Herbert Smith Freehills which provided legal services to the Group during the year. He retired as a partner from
Herbert Smith Freehills effective 31 December 2019 and as such transactions from this date have not been disclosed as related party transactions. All
transactions were on normal commercial terms.
Detailed remuneration disclosures can be found in the Remuneration Report on pages 35 to 51.
D. Outstanding balances arising from sales/purchases of goods and services
There are no outstanding balances arising from sales/purchases of goods and services from related parties at 31 July 2020
(2019: nil).
E.
Terms and conditions
Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.
110
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS 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 company 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 2020 financial year. All transactions were on normal commercial terms.
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.
28. Share-based payments
Accounting policy
Share-based compensation benefits are provided to employees via the New Hope Corporation Limited Employee
Share Option Plan and the New Hope Corporation Limited Employee Performance Rights Share Plan.
The fair value of options granted under the New Hope Corporation Limited Employee Share Option Plan and
Rights granted under the New Hope Corporation Limited Employee Performance Rights Share 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 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 Group 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 New Hope Corporation Limited Employee Performance Rights Share Plan (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 $691,180 (2019: $724,000).
111
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 28. Share-based payments (continued)
Rights
Set out below are the summaries of rights granted under the plan:
As at 1 August
Granted during the year
Lapsed during the year
Forfeited during the year
Vested and exercised during the year
As at 31 July
2020
2019
AVERAGE PRICE
PER SHARE
NUMBER
OF RIGHTS
AVERAGE PRICE
PER SHARE
NUMBER
OF RIGHTS
$2.281
1,585,023
$2.038
1,586,728
$2.150
1,195,431
$2.160
$2.160
$2.160
(26,532)
(804,116)
(441,715)
$3.010
$2.120
$2.120
$2.120
432,148
(165,562)
(153,240)
(115,051)
$2.279
1,508,091
$2.281
1,585,023
The weighted average share price at the date of vesting of rights during the 2020 year was $2.54 (2019: $3.19).
Share rights outstanding at the end of the year have the following vesting date and fair value at grant date:
GRANT DATE
22 Dec 2016
26 Mar 2018
29 Mar 2019
29 Nov 2019
29 Nov 2019
Total
Weighted average remaining contractual life of rights
outstanding at end of period
VESTING DATE
1 Aug 2019
1 Aug 2020
1 Aug 2021
1 Aug 2022
1 Aug 2023
VALUE OF RIGHT
AT GRANT DATE
$0.804
$1.232
$1.472
$0.873
$0.994
SHARE RIGHTS
2020
–
684,628
215,414
300,611
307,438
2019 1
468,247
684,628
432,148
–
–
1,508,091
1,585,023
1.2 years
1.0 years
1 Comparative figures have been restated to accurately reflect forfeited shares in the 2019 financial year between Rights Plans.
29. 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 in this note.
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.
112
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS A.
Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Shareholders’ equity
Issued capital
Reserves
Share-based payment
Retained earnings
Loss for the year
Total comprehensive loss
2020
$000
2019
$000
312,067
542,301
1,179,649
1,385,656
1,491,716
1,927,957
489,855
376,133
865,988
576,105
353,650
929,755
96,692
96,319
1,345
527,691
625,728
1,031
900,852
998,202
(48,412)
(35,982)
(48,412)
(35,982)
B. Guarantees entered into by parent entity
Bank guarantees issued in relation to rehabilitation, statutory body suppliers and various other entities
247,414
234,397
The parent entity has given secured 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 Statement of Financial Position. See note 17(d).
Further guarantees are provided in respect of statutory body suppliers and other various entities with no liability being
recognised by the parent entity as no losses are foreseen on these contingent liabilities.
C.
Contingent liabilities of the parent entity
Details and estimates of maximum amounts of contingent liabilities for which no provision is included in the accounts,
are as follows:
CONTROLLED ENTITIES
The bankers of the consolidated entity have issued undertakings and guarantees to the
Department of Natural Resources and Mines, Statutory Power Authorities and various
other entities.
The Company’s share of security provided by the bankers of the Bengalla Joint Venture
in respect of bank guarantees provided to rail and port suppliers.
No losses are anticipated in respect of any of the above contingent liabilities.
2020
$000
2019
$000
247,414
220,975
13,669
13,422
D.
Contractual commitments for the acquisition of property, plant and equipment
As at 31 July 2020, the parent entity had contractual commitments for the acquisition of property, plant or equipment totalling nil
(2019: nil).
113
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 30. 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 Queensland Bulk Handling Pty Ltd are parties to a deed of cross guarantee under
which each company guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been
relieved from the requirement to prepare a financial report and Directors’ Report under Class Order 98/1418 (as amended)
issued by ASIC.
A.
Statement of consolidated 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 Statement of Consolidated Comprehensive Income for the year ended 31 July 2020 for the closed group:
Revenue from operations
Other income
Expenses
Cost of sales
Marketing and transportation
Administration
Financing costs
Other expenses
Impairment of assets
Loss before income tax
Income tax benefit/(expense)
Loss after income tax for the year
Other comprehensive income/(loss)
Items to be reclassified to profit and loss
Changes in the fair value of cash flow hedges, net of tax
Transfer to profit or loss for cash flow hedges, net of tax
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive (loss) for the year
2020
$000
2019
$000
594,611
602,676
50
3,259
594,661
605,935
(307,426)
(343,454)
(78,607)
(88,544)
(10,310)
(26,354)
15,946
(12,758)
(21,046)
(21,675)
(347,116)
(119,332)
(159,206)
48,242
(110,964)
(874)
(40,204)
(41,078)
15,320
(6,782)
8,538
(102,426)
(17,104)
6,456
(10,648)
(51,726)
114
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS B.
Statement of Financial Position
Set out below is a Statement of Financial Position as at 31 July 2020 of the closed group:
Current assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Inventories
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
Accounts Payable
Derivative financial instruments
Borrowings
Current tax liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2020
$000
2019
$000
47,916
50,387
265,351
454,011
8,431
22,501
15,841
–
61,869
–
360,040
566,267
964,195
1,098,659
48,837
418,867
7,341
40,724
59,512
129,477
427,634
7,753
81,159
60,241
1,539,476
1,804,923
1,899,516
2,371,190
27,922
52,157
–
8,769
–
33,936
70,627
427,161
128,175
555,336
625,963
3,520
2,532
5,817
72,432
136,458
358,206
148,493
506,699
643,157
1,273,553
1,728,033
92,600
35,700
92,302
35,081
1,145,253
1,600,650
1,273,553
1,728,033
115
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 31. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent company, its related
practices and non-related audit firms:
A. Deloitte and related network firms
Audit or review of financial reports:
Group
Subsidiaries and joint operations
Other services
Sustainability and other advisory services
B. Other auditors and their related network firms
Audit or review of financial reports:
Subsidiaries and joint operations
32. Other accounting policies
A.
Foreign currency translation
Functional and presentation currency
2020
$
2019
$
529,420
121,067
650,487
612,150
84,400
696,550
113,416
113,416
763,903
64,382
64,382
760,932
–
–
77,000
77,000
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 Group 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 equity instruments held at fair value through profit or loss, are reported
as part of the fair value gain or loss on the instrument. Translation differences on non-monetary items are included in the fair
value reserve in equity.
116
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Group companies
The results and financial position of all foreign operations (none of which has the currency of a hyperinflationary economy) that
have a functional currency different from the presentation currency are translated into the presentation currency as follows:
Assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that
Statement of Financial Position;
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 OCI.
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 (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable
from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable
from, or payable to, the taxation authority is included with other receivables or payables in the Statement of Financial Position.
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. New accounting standards and interpretations adopted
This note explains the impact of the adoption of AASB 16 on the Group’s financial statements. New accounting policies that
have been applied from 1 August 2019 are disclosed in notes 10 and 17.
AASB 16 Leases – impact on adoption
AASB 16 is mandatory for financial years commencing on or after 1 January 2019 and the date of first application of the
standard for the Group is 1 August 2019. The cumulative catchup approach has been used and comparative amounts for the
year ended 31 July 2019 will not be restated upon initial adoption. The right-of-use asset has been measured as equal to the
right-of-use liability and therefore there is no retained earning opening adjustment.
On initial application of AASB 16, the Group has:
(i) Recognised lease liabilities in the consolidated statement of financial position, measured at present value of the remaining
lease payments, discounted using the Group’s incremental borrowing rate at the date of initial application;
(ii) Recognised right-of use assets in the statement of financial position, at an amount equal to the lease liability at the date of initial
application; and
(iii) Recognise depreciation of right-of-use assets and interest on lease liabilities in the consolidated Statement
of Comprehensive Income.
The only exceptions are short-term and low-value leases. The Group has applied a practical expedient such that any leases with
a term less than 12 months at the date of initial adoption have been treated in line with short-term leases. Where the Group
has previously identified an arrangement as a lease under AASB 117 it has not reviewed these contracts and has treated these
as leases under the new standard.
AASB 16 primarily affects the accounting for the Group’s operating leases. As at 31 July 2019, the Group held non-cancellable
operating lease commitments. The Group holds within these lease commitments a number of short-term leases and low value
assets which will be recognised on a straight-line basis as an expense in profit or loss over the life of the lease. For the remaining
lease commitments that exist at the reporting date, Statement of Financial Position right-of-use assets of $71,089,000, with
lease liabilities of $71,089,000 in respect of the initial adoption have been recognised in note 17(b).
In recognising these amounts, the Directors have made certain assumptions and judgements in relation to economic conditions
including, but not limited to: the incremental borrowing rates (IBR), composition of the lease portfolio, and non-cancellable lease
terms that may cause the actual output to differ from that concluded in 2020. The weighted average IBR adopted by the Group
on adoption is 4.9%.
117
Notes to the Financial Statementsfor the year ended 31 July 2020New Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 32. Other accounting policies (continued)
C. New accounting standards and interpretations adopted (continued)
The adoption of AASB 16 affects the Group’s Statement of Comprehensive Income and classification of cash flows going
forward. Operating cash flows are likely to increase and financing cash flows to decrease as repayment of the principal portion
of the lease liabilities is classified as cash flows from financing activities. Interest costs associated with the lease liabilities
remains classified as cash flows from operating activities.
Leases that were classified as finance leases applying AASB 117: the carrying amount of the leased assets and obligations
under finance leases measured applying AASB 117 immediately before the date of initial application have been reclassified
to right-of-use assets and lease liabilities respectively without any adjustments. The right-of-use asset and the lease liability
are accounted for applying AASB 16 from 1 August 2019.
The impact on asset, liability and profit and loss accounts arising from initial adoption of AASB 16 is presented below:
Right-of-use assets
Initial Adoption
Finance lease assets previously accounted for under AASB 117
Operating lease assets on adoption of AASB 16
Total right-of-use assets recognised at 1 August 2019
Additions
Depreciation
Total right-of-use asset closing balance
Lease liabilities
Initial Adoption
Finance lease liabilities previously accounted for under AASB 117
Operating lease assets on adoption of AASB 16
Total lease liabilities recognised at 1 August 2019
Additions
Interest expense on lease liabilities
Instalments on lease liabilities
Total lease liabilities closing balance
The weighted average incremental borrowing rate used at the time of transition is 4.9%
Reconciliation of operating lease commitments to right-of-use asset and lease liability recognised
on adoption of AASB 16
Operating lease commitments at 31 July 2019
Short-term and low value lease commitments excluded on adoption of AASB 16
Property lease rent out-goings and related costs excluded on adoption of AASB 16
Commitment to restoration on leased property
Commitment arising from lease extension assumptions on adoption of AASB 16
Total lease commitments at 1 August 2019
Discount arising from incremental borrowing rate applied at the date of adoption at 1 August 2019
Value of right-of-use assets and liabilities recognised on adoption of AASB 16
2020
$000
6,430
71,089
77,519
15,215
(11,586)
81,148
7,790
71,089
78,879
15,215
3,926
(14,875)
83,145
57,250
(1,814)
(466)
163
56,034
111,167
(40,078)
71,089
118
Notes to the Financial Statementsfor the year ended 31 July 2020ENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS In the Directors’ opinion:
a.
the financial statements and notes set out on pages 56 to 118 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 2020 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.
The Basis of preparation on page 60 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 30 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
21 September 2020
119
Directors’ DeclarationNew Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Level 23, Riverside Centre
123 Eagle Street
Brisbane, QLD, 4000
Australia
Phone: +61 (0) 7 3308 7000
www.deloitte.com.au
Independent Auditor’s Report
to the members of New Hope Corporation Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of New Hope Corporation Limited (the “Company”) and its subsidiaries (the “Group”)
which comprises the consolidated statement of financial position as at 31 July 2020, the consolidated statement of 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.
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 2020 and of their 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 & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including
Independence Standards) (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 Asia Pacific Limited and the Deloitte Network.
120
Independent Auditor’s Reportto the members of New Hope Corporation LimitedENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS KEY AUDIT MATTER
Carrying value of non-current assets
Refer to notes 3, 10, 11, 12 and 13 of the financial report.
Our audit procedures included, but were not necessarily
limited to:
As at 31 July 2020 the Group has property, plant and
equipment (PPE) of $2,085 million, exploration and
evaluation (E&E) assets of $94 million, and intangible
assets of $81 million, which have been allocated across
the Group’s cash generating units (“CGUs”) and areas
of interest.
Following a decline in commodity prices in the year ended
31 July 2020 and the continued delays in obtaining the
mining lease approval for New Acland Stage 3, the Group
performed an assessment for indicators of impairment
and, where required, detailed impairment assessments
for the relevant CGUs. As disclosed in notes 10,11 and
12 respectively, the Group has consequently recorded
an impairment charge of $347 million made up of $114
million on PPE, $220 million on E&E and $12 million on
intangible assets.
Recoverable amounts of the CGUs have been calculated
using fair value less costs of disposal (including commodity
resource multiple) or value in use 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 13, a specific area of judgement during
the year has been the Group’s assessment of the impact
of the legal environment and approval timelines relating
to the New Acland Stage 3 mine lease application on the
recoverability of assets associated with the Queensland
Coal Mining Operations CGU.
Evaluating management’s assessment of impairment
indicators including the conclusions reached;
Testing the design and implementation of key controls
management have in place for identifying indicators
of and assessing impairment;
Evaluating management’s process for determining the
recoverable amount of each CGU;
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,
comparable transaction multiples, and commodity
resource multiples. This included benchmarking against
external data;
Assessing and challenging the key assumptions within
management’s modelling, which included performing
sensitivity analysis and comparing key assumptions
to historical actual performance and market benchmarks;
Assessing management’s ability to forecast accurately
based on historical actual performance to budget;
In relation to the Queensland Coal Mining Operations
CGU, assessing the Group’s progress in 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 and regulatory
environment and timelines including:
– Obtaining an understanding of the status of the overall
mine lease application and legal processes;
– Assessing and challenging the Group’s scenario and
probability analyses against the status of the overall
mine lease application process and the Group’s
legal advice;
– Performing sensitivity analysis on the scenario and
probability assessments to consider its impact on the
assets’ recoverable amount;
Verifying the mathematical accuracy of management’s
modelling on a sample basis;
Comparing the relevant CGU’s recoverable amount
against carrying values and recalculating the impairment
charge where relevant; and
Assessing the appropriateness of the disclosures in notes
10, 11, 12 and 13 of the financial report.
121
Independent Auditor’s Reportto the members of New Hope Corporation LimitedNew Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report KEY AUDIT MATTER
Rehabilitation provision
Refer to note 14 of the financial report.
As at 31 July 2020 the Group has provisions for mining
restoration and rehabilitation of $249 million.
The rehabilitation calculation requires management
judgement in estimating the quantum and timing of future
costs, particularly given the unique nature of each site,
the timescales involved and the potential associated
obligations. These calculations also require management
to determine an appropriate rate to discount these future
costs back to their net present value.
Liquidity disclosures
Refer to the basis of preparation and Note 17 of the
financial report.
At 31 July 2020 the Group has cash and cash equivalents
of $70 million, secured loans of $356 million and access
to undrawn facilities of $150 million.
The Group has certain debt covenants it is required
to comply with as a result of its financing arrangements.
As described in the basis of preparation of the financial
report, the financial statements have been prepared by
the Group on a going concern basis requiring the directors
to make judgements relating to future cash flows and
financing facilities available to the Group for a period
of 12 months from the date of this report. In so doing the
directors have needed to make assumptions about future
performance and compliance with banking covenants,
including variables such as forecast commodity production,
commodity prices and foreign exchange rates.
Our audit procedures included, but were not necessarily
limited to:
Evaluating management’s process and assessing the
design and implementation of key controls management
have in place for determining the rehabilitation provisions;
Evaluating the independence, competence and
objectivity of management’s expert and challenging the
reasonableness of the assumptions used to produce the
cost estimates prepared;
Validating the assumptions used to calculate the discount
rates and recalculating these rates;
Confirming the existence of legal and/or constructive
obligations and obtained an understanding of the
relevant legislative requirements with respect to the
restoration and rehabilitation for each site;
Assessing the appropriateness of the cost estimate
associated with the restoration and rehabilitation of each
site; and
Assessing the appropriateness of the disclosures in note
14 to the financial statements.
Our audit procedures included, but were not necessarily
limited to:
Assessing the process undertaken by management
to develop the budget and cash flow forecasts for the
12 months from the date of our audit opinion;
Enquiring of management and the Board of Directors
as to their knowledge of events or conditions that may
cast significant doubt on the Group’s ability to continue
as a going concern;
Reading the key terms associated with the Group’s
financing arrangements, including covenant waivers
obtained by the Group in relation to its future covenant
compliance and assessing the amount of the facilities
available for drawdown over the forecast period;
Assessing and challenging judgements made in
relation to forecast cashflow and performance including
consideration of historical performance, assumptions
in relation to forecast commodity prices, foreign
exchange rates and consistency with other relevant
information; and
Assessing the appropriateness of the Group’s going
concern basis of preparation disclosures for the
financial statements for consistency with Australian
Accounting Standards.
122
Independent Auditor’s Reportto the members of New Hope Corporation LimitedENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Other Information
The directors are responsible for the other information. The other information comprises the Financial Summary, Directors’
Report, Tax Contribution Report, Chairman’s Review, Shareholder Information and Sustainability Highlights included in the
Group’s annual report for the year ended 31 July 2020, but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance
with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine
is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or to cease operations, or 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.
123
Independent Auditor’s Reportto the members of New Hope Corporation LimitedNew Hope Group 2020 Annual ReportDirectors’ ReportOther InformationOperations ReviewFinancial Report 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, actions taken to eliminate threats or safeguards applied.
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 35 to 51 of the Directors’ Report for the year ended 31 July 2020.
In our opinion the Remuneration Report of New Hope Corporation Limited for the year ended 31 July 2020, 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
Stephen Tarling
Partner
Chartered Accountants
Brisbane, 21 September 2020
124
Independent Auditor’s Reportto the members of New Hope Corporation LimitedENERGISING OUR PEOPLE, COMMUNITIES AND CUSTOMERS Ordinary shareholdings
As at 16 September 2020 there were 14,401 holders of ordinary shares in the Company.
Voting entitlement is one vote per fully paid ordinary share.
RANGE OF UNITS – ORDINARY SHARES 1
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
NUMBER OF
SHAREHOLDERS
FULLY PAID
ORDINARY SHARES
NUMBER OF
PERFORMANCE
RIGHTS HOLDERS
PERFORMANCE
RIGHTS
3,304
4,950
2,809
3,090
1,814,456
14,674,218
21,405,471
85,610,909
232
708,852,028
14,385
832,357,082
–
–
–
2
4
6
–
–
–
101,511
721,952
823,463
Holding less than a marketable parcel 1
421
308,198
1 Information as at 31 August 2020.
The names of substantial shareholders as disclosed in substantial shareholder notices received by the Company
SHAREHOLDER
Washington H Soul Pattinson and Company Limited
20 LARGEST SHAREHOLDERS AS DISCLOSED ON THE SHARE REGISTER AS AT 16 SEPTEMBER 2020
Washington H Soul Pattinson and Company Limited
HSBC Custody Nominees (Australia) Limited
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
National Nominees Limited
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