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Warrior Met Coal2021 ANNUAL
REPORT
New Hope Group is a diverse Australian
energy company with operations in coal
mining, exploration, port handling, oil &
gas and agriculture. We strive to energise
our people, communities and customers.
CONTENTS
NEW HOPE GROUP 2021 ANNUAL REPORT 1
2021 Highlights 2Our Vision and Values 3 Chairman’s Review 4Chief Executive Officer’s Review 6Our Customers 8Our Operations 9Operations Overview 10Directors’ Report 12 Remuneration Report 28Auditor’s Independence Declaration 41Financial Report 42Shareholder Information 119Tax Contribution Report 1212021 Resources and Reserves 123Corporate Directory 125 2021 HIGHLIGHTS
SHARE PRICE GROWTH
31 JULY SHARE PRICE
$2.0
UNDERLYING EBITDA2
(BEFORE NON-REGULAR ITEMS)
$367M
27%
FINAL DIVIDEND1
7.0c
FULL YEAR DIVIDEND1
11.0c
CASH AVAILABILITY
$565M
156%
THERMAL COAL PRICES (US$/t)
Prices recovered strongly in the second half of the financial year, reaching 10-year highs.
Company maximised low-ash product to capitalise on strong market conditions.
200
180
160
140
120
100
80
60
40
20
0
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
gc NewC
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
API-5
1. Dividend is fully franked.
2. Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and before Non‑Regular Items is a non‑IFRS measure.
This non‑IFRS information has not been audited by Deloitte.
2 2021 ANNUAL REPORT NEW HOPE GROUP
Operations
Review
Directors’
Report
Financial
Report
Other
Information
OUR VISION
Energising our People,
Communities and Customers.
To deliver long-term shareholder value
through responsible investment, marketing
and asset management.
OUR VALUES
Integrity
We are ethical, honest and
trusted to do the right thing.
Respect
We listen and treat others
as we expect to be treated.
Responsibility
We are empowered and
accountable for our actions.
Wellbeing
We all seek to prevent harm, promote
safety and enhance health.
Resilience
We are adaptable and see opportunity
in change.
Collaboration
We work together and focus
on the best outcome.
NEW HOPE GROUP 2021 ANNUAL REPORT 3
CHAIRMAN’S
REVIEW
We began the 2021 financial year in much the
same way as we finished the 2020 financial
year. The impact of COVID-19 was ongoing,
tensions between Australia and our major
trading partner remained and Newcastle coal
prices (GC Newc 6000) were near all-time
lows.
In the face of the challenging conditions and uncertain outlook,
the Company’s new leadership team took steps to reduce costs
and restructure the business. This enabled our Company not
only to better withstand the then prevailing industry and market
downturn but also positioned it to achieve improved returns as
conditions quickly improved.
During the first half of the 2021 financial year, Newcastle coal
prices increased from US$52 per tonne in July 2020 to a more
respectable US$86 per tonne in December 2020. While the
rising price environment was encouraging it took some time for
improvements in index prices to flow through to realised sales.
The second half of the financial year saw a significant turnaround,
with Newcastle coal prices rebounding strongly,
not just to pre‑COVID levels, but to levels we had not seen since
2008. At 31 July 2021, coal prices almost doubled from January
2021 levels, up to US$150 per tonne, and were continuing to
trend upwards.
In the end, we delivered a very pleasing full year profit before
tax and non‑regular items of $199.3 million and a closing share
price of $2.00, an increase of 52% on the 2020 financial year.
There is no doubt the dramatic increase in coal prices has
contributed to the Company’s overall result, but it is also the
resilience and determination of our leadership and workforce
that has seen the Company return to our current position of
relative strength.
Our Chief Executive Officer (CEO), Reinhold Schmidt, will go into
more detail on the measures taken to restructure the business,
however, it would be remiss of me not to acknowledge the hard
work our team has put in over the past 12 months. Safety and
the wellbeing of our employees is a priority and management
across the business are to be congratulated on how they have
handled change and the challenges presented throughout
the year.
“ Bengalla continues
to be our cornerstone
operation, producing
outstanding production
and cost results.”
As the workforce at New Acland moves closer to an inevitable
shutdown of operations while we await the outcomes of
the approvals process for Stage 3, they have remained safe,
professional and focused. It is disappointing that the protracted
approvals process has forced retrenchment of almost all the
New Acland workforce, many of whom have been long‑term
employees. We wish them success in their futures and hope
that Stage 3 approvals are granted during the 2022 financial
year enabling the restart of mining and the offer of employment
and economic opportunity at New Acland, for the benefit of the
local region.
4 2021 ANNUAL REPORT NEW HOPE GROUP
CHAIRMAN’S
REVIEW
Operations
Review
Directors’
Report
Financial
Report
Other
Information
“At 31 July 2021, coal prices had
almost doubled from January 2021
levels, up to US$150 per tonne, and
were continuing to trend upwards.”
Notwithstanding the uncertainty that continues to surround
the New Acland project, we are in a very strong position.
Bengalla continued to be our cornerstone operation, generating
outstanding production and cost results.
In conjunction with the leadership team, the Board continues
to look at new opportunities to grow and diversify the business
while providing positive returns for our shareholders. New
Hope recently completed a A$200 million Convertible Notes
Offering that strengthens our capital capacity. The demand for
this offering was very pleasing and has enabled a fresh group of
global institutional investors to invest in New Hope. It provides
diversified capital for the Company and enhances New Hope’s
ability to pursue growth and acquisition opportunities that create
value for our investors.
New Hope Group acknowledges that climate change is a critical
global issue and that the world must transition to a lower carbon
economy. We understand the climate change risks posed to our
business over the short, medium and long‑term. We believe that
New Hope can play a positive and effective role during transition,
supporting the communities who rely on our coal for baseload
power or other uses, together with the communities in which we
operate. Our 2021 Sustainability Report will soon be published
and will provide greater detail about the climate change risks and
opportunities and the long‑term sustainability of our business.
I would like to thank the management and staff of the
Company for their continued efforts over what has been
another challenging yet rewarding 12 months. 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
NEW HOPE GROUP 2021 ANNUAL REPORT 5
CHIEF
EXECUTIVE
OFFICER’S
REVIEW
I am pleased to update shareholders
on the Company’s performance for the
2021 financial year.
The Company finished the 2021 financial year with underlying
EBITDA of $367 million, a 27% increase on the prior financial
year, supported by stronger Newcastle coal prices in the second
half of the financial year, as outlined by the Chairman. Prices
have continued to strengthen since 31 July 2021, with the
Company generating Underlying EBITDA1 of $173.9 million in
the two months since the end of the reporting period.
This excellent result, given the position the industry was in
just one year ago, has been realised due to the hard work and
commitment of every member of the New Hope team.
While our operations have continued to operate through
COVID-19, we were not immune to the financial impacts of the
global pandemic during the 2020 financial year and into the
2021 financial year.
The Company has weathered the challenges of the pandemic
while remaining focused on the wellbeing of our staff. Initiatives
included enhanced mental health support through our Employee
Assistance Program, the formal introduction of working from
home guidelines, the introduction of a temporary 9‑day fortnight,
and the provision of IT and office equipment to support team
members to establish home offices.
A review of the Company structure led to a significant
rationalisation of corporate roles which resulted in a leaner and
more agile corporate team. This also brought with it a much‑
simplified executive team allowing the Company to refocus on
business priorities, with a view to achieving long term success.
Over the past 12 months all our sites have worked tirelessly to
add value to the Company.
“ The Company has
weathered the challenges
of the pandemic while
remaining focused on the
wellbeing of our staff.”
1. Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and before Non‑Regular items is a non‑IFRS measure.
This non‑IFRS information has not been audited by Deloitte.
6 2021 ANNUAL REPORT NEW HOPE GROUP
Operations
Review
Directors’
Report
Financial
Report
Other
Information
CHIEF
EXECUTIVE
OFFICER’S
REVIEW
Bengalla has continued to be the cornerstone operation for the
Company, producing 9.7Mt of saleable product for the year.
Our dragline was shutdown for midlife maintenance in the first
half of the 2021 financial year. Above plan performance by the
excavator/truck fleet ensured strong performance in the second
half of the financial year with the site producing 5.2Mt, a 15%
increase on the first half.
New Acland continues to produce high quality product although
at a declining rate as the current resource is exhausted. The
approvals for the Stage 3 project are subject to another Land
Court hearing scheduled for November 2021. In the meantime,
redundancies and a ramp down of operations continue. The
operation will transition safely into care and maintenance in
late 2021.
Despite this, we remain focused on the project’s future and are
working diligently to secure the remaining approvals and restart
operations, which would provide employment and economic
opportunities for the region.
Our Pastoral Operations in Acland and Bengalla continued
to increase the scale of their breeding and grazing activities.
With cattle sale prices increasing, we have been achieving
excellent returns on our breeding programs. While the financial
contribution of these activities to our business is small, we regard
them as important to the sustainable and productive use of our
assets and to providing further opportunity within the regions.
“The Convertible Notes
Offering which was
completed in July 2021
places the Company in
a very strong position
moving forward.”
Along with the rebound in coal prices, the continued strength
and diversity of our customer base and our low‑cost assets and
operating structure, the Convertible Notes Offering which was
completed in July 2021 places the Company in a very strong
position moving forward.
I would like to thank the Board for their continued support and
guidance, the team in our corporate office for the hard work they
have put in over the past 12 months and, of course, the crews at
our various operations who are the engine room of
our business.
R.H. Schmidt
Chief Executive Officer
NEW HOPE GROUP 2021 ANNUAL REPORT 7
OUR CUSTOMERS
KOREA
CHINA
JAPAN
TAIWAN
INDIA
VIETNAM
AVERAGE REALISED
PRICE
$101.4/t
TONNES SOLD
10.0Mt
TOTAL REVENUE
$1,048M
8 2021 ANNUAL REPORT NEW HOPE GROUP
BRISBANE
NEWCASTLE
KEY MARKET
EMERGING MARKET
OTHER MARKET
Operations
Review
Directors’
Report
Financial
Report
Other
Information
OUR OPERATIONS
New Lenton
Yamala
North Surat
Elimatta
New
Acland
West
Moreton
BRISBANE
Bengalla
NEWCASTLE
Coal operations
Rehabilitation
Agriculture
Port operations
Exploration
Oil and gas
FOB COST
$63.7/t
SALEABLE COAL
PRODUCED
9.6Mt
SAFETY
5.39 TRIFR
CHILE
NEW HOPE GROUP 2021 ANNUAL REPORT 9
OPERATIONS OVERVIEW
Coal Operations
Rehabilitation
NSW
QLD
JORC
RESOURCES
381Mt
• Large scale, cost competitive
mine in NSW, Bengalla Mine.
• Single pit operation using
dragline, truck and excavator.
• Approvals to mine up to
15Mt ROM until 2039.
JORC
RESOURCES1
2,274Mt
BACKGROUND
• Open cut truck and
excavator mine in QLD,
New Acland Mine.
• Current Stage 2 operation
transitioning into care and
maintenance.
• Awaiting outcomes of Stage 3
project approvals process, with
Land Court hearing scheduled
for November 2021.
TOTAL LAND
REHABILITATED
3,917Ha
• Core commitment to return land
to a sustainable, productive post
mining use.
• Best practice environmental
planning and progressive
rehabilitation incorporated into
all phases of mining life.
2021 FINANCIAL YEAR PERFORMANCE
• 7.8Mt saleable coal produced
• 1.8Mt saleable coal produced.
• 150Ha of land rehabilitated.
(80% share).
• 10Mt ROM coal produced
(80% share).
• Underlying EBITDA $359 million.
• Realised price is $101.65/t.
• 3.9Mt ROM coal produced.
• 248Ha of land rehabilitated in
• Underlying EBITDA
$19 million1.
• Realised price is $100.22/t.
the 2020 financial year.
• 360Ha of rehabilitation
completed at Jeebropilly since
the end of mining.
1. Includes all QLD tenements classified in the QLD Coal Operating Segment.
2. ASX Release 21 September 2021 ‘Bridgeport Energy 2021 Reserves and Resources’.
10 2021 ANNUAL REPORT NEW HOPE GROUP
OPERATIONS OVERVIEW
Operations
Review
Directors’
Report
Financial
Report
Other
Information
Agriculture
Port Operations
Oil and Gas
AGRICULTURAL
LAND HOLDINGS
10,000Ha
THROUGHPUT
CAPACITY
10Mt
BACKGROUND
RESERVES 2P
5.9Mboe2
• Agricultural activities completed
at both Acland and Bengalla.
• Cattle breeding and cropping
operations undertaken on
rehabilitated land.
• Operation of the handling
• Tenures held in the Cooper
facility at the Port of Brisbane.
• Leading bulk handling facility
since 1983.
• 24/7 operations.
• Eight years lost time
injury free.
Basin (QLD and SA), Surat Basin
(QLD) and Otway Basin (VIC).
• Tenures cover an area in excess
of 15,000km2.
2021 FINANCIAL YEAR PERFORMANCE
• 40% increase in cattle prices
• 3.7Mt export throughput.
• 313k barrels produced.
since July 2020.
• 1,200 head of cattle sold.
• Successful breeding program,
coupled with strong crop yields.
• Supports existing coal
• 288k barrels sold.
customers, while diversifying
into new commodities to
maximise throughput.
• Oil price increase 62%
from 2020 financial year,
to US$75.29/bbl.
NEW HOPE GROUP 2021 ANNUAL REPORT 11
DIRECTORS’ REPORT
The Directors present their report on the consolidated entity consisting of New Hope Corporation Limited (‘the Company’
or ‘New Hope’) and its controlled entities (‘the Group’).
DIRECTORS
The following persons were Directors of New Hope during the year and up to the date of this report:
Mr R.D. Millner
Mr T.C. Millner
Ms J.E. McGill AO
Mr T.J. Barlow
Mr I.M. Williams
Mr S.O. Stephan (resigned 31 August 2020)
Mr W.H. Grant OAM (resigned 17 November 2020)
PRINCIPAL ACTIVITIES
The principal activities of New Hope consisted of the development and operation of coal mines, port handling and logistics,
agriculture and oil and gas development and production.
HIGHLIGHTS
• Net profit after tax (NPAT) of $79.4 million;
• Underlying EBITDA1 result of $367.2 million (2020: $289.8 million);
• The Company produced 9.6Mt of saleable coal (2020: 11.3Mt);
• Net cash from operating activities $296.1 million, an increase of 16 per cent;
• Inaugural issue of $200 million of senior unsecured Convertible Notes due 2026 met with high demand
and successfully closed on 2 July 2021 oversubscribed;
• Interim dividend of $33.3 million paid during the period, representing 4.0 cents per share, fully franked;
• Final dividend of 7.0 cents per share, fully franked, payable 9 November 2021; and
• Closing share price, $1.995 representing a 52 per cent increase.
OPERATING AND FINANCIAL REVIEW
The Company reported a Net Profit before Tax (NPBT) and before Non-Regular Items1 of $199.3 million for the financial
year ended 31 July 2021. This represents a 67 per cent increase from the comparative period (2020). The primary drivers
contributing to the NPBT and before Non-Regular Items result include:
• An increase in average A$ realised prices to A$101.36/t in 2021 from A$91.54/t in 2020. Thermal coal prices
recovered strongly from 2020 levels, reaching 10-year highs which materialised into strong revenue generation over
the second half of the 2021 financial year. The quarter four average realised price received was A$122.13/t.
• Underlying Free On Board (FOB) costs of A$63.70/t were lower than 2020 following cost savings initiatives
implemented across both Bengalla and New Acland.
• Gross revenue from coal sales decreased in 2021 to $1,006 million from $1,051 million in 2020. This represents
a 4 per cent decrease which is due to the lower volumes of coal sold during the year primarily at New Acland as the
site transitions into care and maintenance.
1 Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and before Non-Regular Items and Net Profit before Tax
and before Non-Regular Items are non-IFRS measures. This non-IFRS information has not been audited by Deloitte.
12
2021 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information FINANCIALS AT-A-GLANCE
Statutory Revenue
Statutory Profit/(Loss) after tax
Underlying EBITDA1
Impairment of Queensland Coal Mining Assets
Impairment of Coal Exploration and Evaluation Assets
Impairment of Goodwill
Impairment of Oil Producing and Exploration Assets
Onerous Contracts
New Acland Ramp Down2
Group Redundancies
Liquidation Related Expenses
Strategic Growth and M&A
Debt Wavier Consent Fees
Jeebropilly Rehabilitation
Recovery of Prior Period Rail Costs
ERP System Implementation Costs
Total Non-Regular Items
EBITDA
Financial Income and Expenses
Depreciation and Amortisation
Statutory Profit before Tax
Net Profit before Tax and before Non-Regular Items1
2021
$000
2020
$000
1,048,239
1,083,918
79,350
(156,783)
367,197
289,754
(40,259)
(110,783)
(1,618)
(157,197)
–
–
(37,276)
11,393
(15,733)
(2,620)
(1,370)
(1,110)
–
–
–
(12,271)
(66,381)
–
(13,324)
(7,103)
14,058
–
–
9,463
1,937
(3,454)
(88,593)
(345,055)
278,604
(18,531)
(55,301)
(19,380)
(149,353)
(150,870)
110,720
199,313
(225,551)
119,504
1
2
Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and before Non-Regular Items and Net Profit before Tax and
before Non-Regular Items are non-IFRS measures. This non-IFRS information has not been audited by Deloitte.
New Acland Ramp Down represents a change in coal stock inventory valuation following the increase in coal prices during the
2021 financial year.
13
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information OPERATING AND FINANCIAL REVIEW (CONTINUED)
The variance between Underlying EBITDA1 and Cash flow from Operations is primarily driven by the movement in Working
Capital as outlined below.
NOTES
2021
$000
2020
$000
367,197
289,754
Underlying EBITDA1
Net Interest Paid
Net Income Taxes (Received)/Paid
Settlement of Non-Regular Items1,2
Net Foreign Exchange
Remeasurement of Assets Classified as Held for Sale
Impairment of Building Assets
Non-Cash Employee Benefit Expense — Share-Based Payments
14
5
Net Working Capital
Cash Flow from Operations
Cash Flow Summary
Operating Cash Flows
Investing Cash Flows
Financing Cash Flows
Cash and Cash Equivalents at the end of the financial year
Capital Management
Net Debt3
Undrawn Syndicated Facility
Gearing Ratio (%)4
(15,620)
19,317
(36,046)
(2,453)
48
2,771
72
(39,221)
(15,776)
(26,586)
4,257
(441)
–
–
691
3,559
296,065
255,458
296,065
255,458
(42,760)
(108,778)
98,528
(135,571)
424,663
70,377
80,830
140,000
4%
293,319
150,000
14%
1
2
3
4
Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and before Non-Regular Items is a non-IFRS measure.
This non-IFRS information has not been audited by Deloitte.
Settlement of Non-Regular Items are cash Items that Impact Cash Flow from Operations.
Calculated in accordance with the covenant under the Debt Facility and therefore excludes Lease Liabilities recognised upon adoption
of AASB 16 Leases and Cash balances of subsidiaries excluded from the Debt Facility.
Net Debt/(Net Debt plus Equity).
The Company holds a strong capital position, with a closing Cash and Cash Equivalents balance of $424.7 million, including
cash received from the issuance of the Convertible Notes and debt availability of $140.0 million, ensuring any future strategic
growth opportunities can be supported.
OPERATING CASH FLOWS
The Company has generated a cash operating surplus of $296.1 million which is an increase of 16 per cent on the prior
comparative period. This reflects a reduction in overall cash payments as the business focused on cost saving measures in
light of the depressed pricing at the start of the 2021 financial year. Prices improved during the second half of the 2021
financial year and have continued to remain strong off the back of constrained supply in the market and strong demand.
This is expected to provide continued support to pricing over the next 12 months.
INVESTING CASH FLOWS
Cash outflows from investing were $42.8 million against $108.8 million for the prior comparative period. The reduction
of 61 per cent was primarily due to the reduction in Property, Plant and Equipment additions. This planned reduction was
a response to the market dynamics at the beginning of the financial year which required strong capital discipline.
14
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information OPERATING AND FINANCIAL REVIEW (CONTINUED)
INVESTING CASH FLOWS (CONTINUED)
The Company has also sold surplus plant and equipment at the non-operating Queensland sites which provided investing
cash inflows of $22.7 million.
FINANCING CASH FLOWS
On 2 July 2021, the Company successfully issued $200 million of senior unsecured Convertible Notes with a 2.75 per cent
coupon, reflecting a fully subscribed inaugural offer. The Convertible Notes are convertible into fully paid Ordinary Shares
in the Company at a conversion price of $2.10 per Ordinary Share. They will mature on 2 July 2026, unless otherwise
redeemed, repurchased, or converted.
The net proceeds of the Convertible Notes were $195.2 million after the deduction of commissions, professional fees and
other related administration costs paid at 31 July 2021. At the date of this report, the Company has not yet used the proceeds
of the Convertible Notes.
The available Cash for the financial year ended 31 July 2021 is $564.7 million and represents the closing cash position and
the cash available for draw down under the Company’s Debt Facility. The debt drawn under the facility at the financial year
end is $310.0 million, a 16 per cent reduction from the prior comparative period.
Basic earnings per share for the 2021 financial year is 9.5 cents compared to a loss of 18.9 cents for the prior
comparative period.
Directors have declared a final dividend of 7.0 cents per share (31 July 2020: Nil). This dividend is fully franked and payable
on 9 November 2021 to shareholders registered as at Tuesday, 26 October 2021.
REVIEW OF OPERATIONS
Health, Safety, Environment and Community
The Company is committed to the health, safety and wellbeing of its people, the environment, and the communities in which
we operate. The Company’s 12 month moving average Total Recordable Injury Frequency Rate (TRIFR) of 5.39 decreased
from the comparative period of 5.99. The TRIFR remained below the opencut industry average1. During the financial year
the Company integrated its oil and gas business into its consolidated TRIFR which has increased the rate from the previously
published comparative period.
Rehabilitation and restoring mining land is a core commitment of the Company. The Company strongly believes that mining
and agriculture can exist together and appreciates that as the custodians of large parcels of land, it has an obligation to return
land to a productive and sustainable use post mining operations. For the financial year ended 31 July 2021, the Company
rehabilitated 150 hectares of mining land back to productive post mining use.
COVID-19
As COVID-19 evolves, the Company monitors the situation and manages site security and restricted entry into operations
as well as reviewing business continuity plans in light of the evolving COVID-19 situation and potential impacts.
Operations
The Company produced 9.6Mt of saleable coal2 for the financial year ended 31 July 2021, a decrease of 15 per cent against
the prior comparative period. The decrease represents the wind down of operations at the Queensland based New Acland
Coal Mine while it awaits for approvals for the Stage 3 operation. The New South Wales Bengalla Mine had a reduction in
saleable coal produced due to the planned mid-life dragline shutdown which occurred early in the first quarter of the financial
year. The Company made sales for the financial year of 10.0Mt.
The average sales price achieved during the year was A$101.36/t driven by strong market demand for low-ash thermal
coal. During the financial year, the Japanese Reference Price for JFY213 was settled at US$109.97/t. This settlement is a
60 per cent increase over the Japanese Reference Price for JFY20. The Company continues to take advantage of pricing
dynamics when placing coal sales contracts and can respond quickly to any change in pricing deltas between different
product qualities.
1
2
New South Wales Surface Coal Mines average.
The Company’s share of saleable volumes and sales represents its 80 per cent share in Bengalla Mine operations and 100 per cent share
in New Acland Coal Mine operations.
3
Japanese financial year (JFY21) refers to 1 April 2021 to 31 March 2022.
15
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information OPERATING AND FINANCIAL REVIEW (CONTINUED)
REVIEW OF OPERATIONS (CONTINUED)
The Company, in the short-term, will continue to focus on optimal product split and maximise the production of high energy
products. Our forward sales book will allow us to achieve robust returns in the coming months, with Newcastle Index pricing
currently greater than US$170/t.
THERMAL COAL PRICES (US$/t)
200
180
160
140
120
100
80
60
40
20
0
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
gc NewC
GROUP COAL MINING OPERATIONAL METRICS
Prime overburden
Run-of-Mine (ROM) coal produced
ROM strip ratio – prime
Bypass
Coal handling preparation plant (CHPP) feed
Saleable coal produced
Product yield
Coal sales
Average sale price achieved
Unit costs of sales
Free on Rail (FOR) cost
FOR to FOB cost (ex. State royalty)
State royalty
Underlying FOB cash cost
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
API-5
METRIC
bcm
kt
kt
kt
kt
%
kt
A$/t
A$/sold
A$/sold
A$/sold
A$/sold
2021
50,482
14,002
3.6
1,004
12,685
9,589
76%
10,035
$101.36
$36.53
$20.32
$6.85
$63.70
2020
56,118
16,044
3.5
1,561
14,176
11,285
80%
11,482
$91.54
$37.79
$19.77
$6.44
$64.00
Margin
A$/sold
$37.66
$27.54
16
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 150
125
100
75
50
25
0
0
OPERATING AND FINANCIAL REVIEW (CONTINUED)
BENGALLA MINE
Bengalla (100 per cent basis) delivered 9.7Mt saleable production for the financial year compared to 10.3Mt in the prior
comparative period. The reduction was primarily due to the planned mid-life dragline maintenance shutdown during the
first quarter of the 2021 financial year. The shutdown was completed successfully with dragline operating performance
and utilisation improved against the prior comparative period.
During the second half of the 2021 financial year, Bengalla acquired an EX5500 excavator from New Acland. The additional
excavator provided the site with a reliable swing digger and additional capacity to the truck and shovel fleet.
Of the 12.5Mt ROM produced, over 11.0Mt was fed to the CHPP, as strong market conditions for high quality coal supported
maximising coal processing, compared to bypass. Total yield of 79 per cent was achieved, two per cent lower than last year.
Bengalla continues to be recognised as a large-scale cost competitive mine, with the FOB cost per tonne positioned within
the lowest quartile, compared with other seaborne thermal coal producers worldwide.
2021 GLOBAL SEABORNE THERMAL COAL COST CURVE
Bengalla
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Source: Wood Mackenzie Q3 2021 dataset. New Hope estimates for own assets.
TCPS refers to total cash cost plus sustaining capital expenditure.
Cumulative Tonnes (M)
NEW ACLAND COAL MINE
New Acland produced 1.8Mt of saleable coal for the financial year. This was 39 per cent down on the prior comparative
period as the operation continues to ramp down while awaiting a decision on the granting of Stage 3 approvals.
The CHPP and maintenance teams moved to dayshift only at the end of July 2021 and the CHPP will only operate four
days per week moving forward. Planning and preparation work for the operation to move safely into care and maintenance
is continuing.
Rehabilitation work continues to be a focus of the operation and wider business. During the year the operation undertook
55 hectares of rehabilitation work. Following the transition of the operation into care and maintenance, rehabilitation works
will continue while the operation awaits a decision on the granting of Stage 3 approvals.
NEW ACLAND STAGE 3 (NAC03) DEVELOPMENT
On 3 February 2021, the High Court decided that New Acland’s mining lease applications and environmental authority
amendment application for its Stage 3 expansion should be reheard by the Land Court.
The High Court determined that there was an apprehension of bias against New Acland by the Land Court Member in
the first Land Court hearing which the High Court said also tainted the second Land Court hearing and the environmental
authority that had issued following that hearing. Following the High Court decision, the Land Court made orders on
12 February 2021, including to reserve four weeks commencing 1 November 2021 as tentative dates for the rehearing.
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(
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information
OPERATING AND FINANCIAL REVIEW (CONTINUED)
This will be the third Land Court hearing relating to these approvals. The decision that will issue from the Land Court is
in the form of recommendations as to whether the mining lease applications and environmental authority amendment
application for the Stage 3 expansion should be granted.
Following the Land Court recommendations, decisions on the final approvals can then be made by the Queensland
Department of Environment and Science and the Minister for Resources.
WEST MORETON OPERATIONS
Rehabilitation works at the Normanton site have been completed on time and to budget. A total of 34 hectares has been
rehabilitated back to productive post mining land use.
QUEENSLAND BULK HANDLING (QBH)
QBH exported 3.89Mt of coal for the year. This is a 24 per cent decrease on the comparative period, mainly due to reduced
output from New Acland Coal Mine as the operation transitions into care and maintenance.
QBH realised opportunities during the year to meet short-term additional stockpile demand from current customers and has
engaged with new customers for coal and non-coal throughput. The operation will continue to focus on new customers and
markets where it makes financial sense to do so.
COAL DEVELOPMENT AND EXPLORATION
The Company maintains several development and exploration sites. The expenditure on these assets has been maintained
to keep the tenements in good standing and meet required obligations.
PASTORAL OPERATIONS
The Company’s Pastoral operations benefited from the continued upward trend of cattle prices, which increased by over
40 per cent on the prior comparative period.
Over the past 12 months, the operations successfully fattened and sold 1,200 Acland Pastoral Company (APC) bred
weaners. The weaning of a further 1,200 calves from APC’s breeder herd was completed with 960 weaners sent to Bengalla
Agricultural Company (BAC) for fattening.
Following a very successful breeding cycle in June 2021, the Company will continue to focus on strengthening the livestock
program in the 2022 financial year. The Company has also entered agistment arrangements at APC.
APC operations received good winter rains in calendar year 2020 which led to strong crops yield in early calendar year
2021. The operations have invested into farming equipment that will increase efficiencies and save costs for planting and
harvesting next season. APC will begin harvesting mungbean crops in the summer months which due to its drought tolerant,
quick-maturing qualities will allow for a faster rotation with Acland’s sorghum crops. At this stage cropping prospects look
promising with early rainfall creating a full moisture profile for crop growth.
BRIDGEPORT ENERGY LIMITED (BEL)
Oil production totalled 313 Kt barrels for the 2021 financial year. This is an eight per cent decrease on the prior comparative
period due to natural production decline.
Oil prices recovered strongly during the financial year, starting the year at U$46.36bbl, and finishing U$75.29bbl.
This represents an increase of 62 per cent over the reporting period. This recovery of prices has had a significant impact
on the final Bridgeport result, with the operation recognising revenue of $22.1 million.
BEL successfully completed 11 critical workovers on schedule and budget over the past 12 months, maintaining high uptime
on all wells and stable production at operated fields.
There were also successful discoveries on wells drilled in ATP2021 and PRL211 during the financial year, including the Vali
field on which a discovery well and two appraisal wells were drilled and the Odin field on which a discovery well was drilled.
18
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information OPERATING AND FINANCIAL REVIEW (CONTINUED)
OUTLOOK
Thermal coal market fundamentals deteriorated in the first half of the 2021 financial year due to the impact of COVID-19.
The Company quickly responded to the reduction in realised prices by implementing a number of cost saving initiatives at
the operations, and undertaking a significant rationalisation across corporate office functions. Towards the end of 2021
financial year thermal coal prices staged a significant rally and closed the financial year at 10-year highs. The pricing is
forecast to remain strong off the back of constrained supply and the opening up of new markets. The Company was not
impacted by China’s trade restrictions, with the Company’s key customers based in Japan and Taiwan.
Bengalla continued to be the cornerstone operation of the Company. The operation successfully completed the planned
mid-life dragline shutdown in September 2020 which provided the Company with a strong production runway into the
second half of the financial year. Following the mid-life shutdown, the utilisation and productivity rates of the dragline
improved whilst maintaining operating costs at low levels. The operation remained focused on safe, consistent production and
maximising low-ash product which has maximised realised prices. As the operation moves into the 2022 financial year, the
focus is on maintaining consistent, safe production and further continuous improvement initiatives which will impact directly
on utilisation and productivity gains.
New Acland performed strongly for the financial year given the uncertainty around Stage 3 approvals. Remaining employees
at the operation focused on rehabilitation and the safe transition into care and maintenance. Last coal will be mined before
the end of the calendar year while the Company continues to pursue final Stage 3 approvals.
The Company has a strong customer base which provides low sales risk and revenue certainty. With Australia maintaining a
leading position in the global trade market even through COVID-19, the future of the Company’s high quality, lower emission
coal will continue to underpin strong performance. With a focus on operational resilience while maintaining a robust Balance
Sheet, the Company is a key position to capitalise on growth or transformational opportunities as they arise.
RISK MANAGEMENT
The Company has a robust risk management framework which is overseen by the Health, Safety, Environment and People
Committee (HSEPC), the Audit and Risk Committee (ARC) and the Board of Directors. 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 manages and reports on the risk.
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.
These risks are proactively
managed using comprehensive
safety management systems as
well as a continual focus on a
strong safety culture.
The Company 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.
19
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information RISK MANAGEMENT (CONTINUED)
RISK CATEGORY POTENTIAL RISKS
POTENTIAL OPPORTUNITIES
APPLICATION TO NEW HOPE
The Company has developed
valuable and longstanding
relationships with 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.
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.
Social Licence
NAC03
Approval
A number of stakeholders
have 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.
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.
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.
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.
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 14
of the Financial Statements.
As Stage 2 coal has been
depleted, supplier and customer
commitments have been
appropriately managed while
Stage 3 approvals continue to be
pursued.
The Company is actively pursuing
growth through both development
of existing assets and the
acquisition of complementary
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.
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.
20
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information RISK MANAGEMENT (CONTINUED)
RISK CATEGORY POTENTIAL RISKS
POTENTIAL OPPORTUNITIES
APPLICATION TO NEW HOPE
Bengalla Joint
Venture
Failure of
Infrastructure
The Company has an 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 mining
operation. Bengalla Mine
management is tasked 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.
The Company is highly dependent
upon the availability and
effectiveness of key infrastructure
in order to produce and bring
products to market.
Market Risk
The Company'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.
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 Group’s
overall risk management strategy.
The Company engages with the
Bengalla Mine management team
on an ongoing basis with the
aim to identify, monitor, mitigate
and actively manage risks, not
only unique to Bengalla, but
also across the Group.
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 Company'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.
21
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information CLIMATE CHANGE RISKS
The identification and management of climate-related risks are integrated into the Company’s Risk Management Framework.
At a strategic level, the scope of the Risk Management Framework applies to risks that are material to the achievement of the
key objectives of the Company and related business plans.
Climate change is critical global issue which, together with the transition to a lower carbon economy, poses risks to our
business over the short, medium, and long-term. We believe that there is also opportunity for New Hope to play a positive
and effective role during transition, supporting the communities who rely on our coal for baseload power or other uses,
together with the communities in which we operate.
The Company will continue to work on this important topic with regard to the following key identified risk areas:
• Legislative and policy changes focusing on climate change and impacting the ability to operate existing mines, develop
new mines or extend the life of existing mines;
• Litigation exposure and regulatory scrutiny either seeking compensation as a result of climate change impacts
or forcing greater action on climate change;
• Market risk driving the transition to a lower carbon economy and impacting on supply and demand;
• The substitution of thermal coal for lower emissions technologies;
• Access to capital and insurance markets becoming limited and more costly as suppliers include climate related
considerations into their decision-making process and which businesses they engage with;
• Stakeholder exclusion, or the failure to achieve and maintain social acceptance; and
• Increased frequency and severity of extreme weather events which potentially disrupt mining and port operations, and
the impact these events have on the health and safety of our workforce.
Further details of our climate-related risks and opportunities will be provided in the Company’s 2021 Sustainability Report.
INSURANCE OF OFFICERS
In accordance with the provisions of the Corporations Act 2001, New Hope Corporation Limited 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
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 Company, to affect substantially the operations
or results of the consolidated entity in subsequent financial years.
22
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Assets Classified as Held for Sale
The Company reclassified land with a net book value of $7,115,000 from Property, Plant and Equipment to Assets Classified
as Held for Sale during the 2021 financial year. The sale completed on 9 August 2021. A gain of $5,254,000 was recorded
on sale of this land and will be recognised in the Statement of Comprehensive Income in the 2022 financial year.
Lenton Burton
On 2 August 2021 the Company entered into a Binding Term Sheet to divest 100 per cent of the shares in New Lenton Coal
Pty Ltd (which currently holds a 90 per cent interest in the Lenton Joint Venture) to Bowen Coking Coal Limited (ASX: BCB)
for an upfront payment of $20,000,000 plus potential milestone and royalty payments, up to a value of $77,500,000. The
transaction is subject to parties agreeing and entering into formal transaction documents and certain other conditions being
satisfied, and as such was not classified as Held for Sale at 31 July 2021.
There are no other events that have occurred since 31 July 2021 which require disclosure.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The activities of the consolidated entity in the 2022 financial year are expected to be similar to those of the 2021
financial year.
The Company will disclose further information on likely developments in the operations of the consolidated entity
and the expected results of operations as appropriate.
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.
SUSTAINABILITY
The Board maintains direct oversight of climate-related risks and opportunities through its Enterprise Risk Management
program and is assisted in this by the ARC and HSEPC. Responsibility is delegated to Management for the identification
and ongoing management of the opportunities and risks of climate change.
The Company 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 Company 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.
Further information on the Company’s Sustainability Framework and disclosure will be provided in the Company’s 2021
Sustainability Report.
STATUTORY COMPLIANCE
Environmental Compliance
During the 2021 financial year, the Company did not receive any Penalty Infringement Notices and was not prosecuted
for any breach of environmental laws.
Mining Lease Compliance
In June 2021, Jeebropilly Collieries Pty Ltd received a penalty notice for $56,716 under the Mineral Resources Act (1989)
in relation to historical mining activities at Jeebropilly. All matters are now closed.
23
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information INFORMATION ON DIRECTORS
MR R.D. MILLNER | NON-EXECUTIVE CHAIRMAN AND NON-EXECUTIVE DIRECTOR
Experience
Other current listed
directorships
Mr Millner is Chairman of the Company’s holding company, Washington H. Soul Pattinson
and Company Limited (WHSP). Mr Millner joined the Board of New Hope Corporation Limited
on 1 December 1995 and was appointed Chairman on 27 November 1998. He has extensive
experience in the investment industry.
Washington H. Soul Pattinson and Company Limited – Appointed 1984, Chairman since 1998.
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 Corporation Limited – Appointed 2000.
TPG Telecom Limited – Appointed 2020.
TUAS Limited – Appointed 2020.
Former listed directorships
in last three years
Australian Pharmaceutical Industries Limited – Appointed 2000, resigned 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 Performance Rights over Ordinary Shares in New Hope Corporation Limited.
MR T.J. BARLOW – B.BUS, LLB (HONS) | NON-EXECUTIVE DIRECTOR
Experience
Other current listed
directorships
Former listed directorships
in last three years
Special responsibilities
Interests in shares
and options
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 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.
Washington H. Soul Pattinson and Company Limited – Appointed 2015.
Palla Pharma Limited – Appointed 2015, resigned 2020.
Chair of the Nomination Committee
Member of the Health, Safety, Environment & People Committee
Member of the Audit and Risk Committee.
19,900 Ordinary Shares in New Hope Corporation Limited.
Nil Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited.
24
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information INFORMATION ON DIRECTORS (CONTINUED)
MS J.E. MCGILL AO – BSC, MBA, GAICD | INDEPENDENT NON-EXECUTIVE DIRECTOR
Experience
Ms McGill AO was appointed as a Non-Executive Director of the Company on 22 June 2020. She is
a highly accomplished Executive and Non-Executive Director with a career spanning 30 years across
a range of commodities.
She holds a range of roles in the arts sector in South Australia, is a member of the South Australian
Premier’s Economic Advisory Council, Director of Royal Automobile Association of South Australia,
and Non-Executive Director at 29Metals.
During her executive career she held senior leadership roles with BHP including leadership of BHP
Mitsui Coal and Olympic Dam Corporation.
Ms McGill has a Bachelor of Science, an MBA and an honorary doctorate from Adelaide University.
She is a Graduate of the Australian Institute of Company Directors.
Other current listed
directorships
29 Metals – Appointed as Non-Executive Director July 2021.
Former listed directorships
in last three years
Nil.
Special responsibilities
Interests in shares
and options
Chair of the Health, Safety, Environment & People Committee
Member of the Audit and Risk Committee
Member of the Nomination Committee.
30,000 Ordinary Shares in New Hope Corporation Limited.
Nil Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited.
MR T.C. MILLNER | NON-EXECUTIVE DIRECTOR
Experience
Mr Millner joined the Board of New Hope Corporation Limited on 16 December 2015. He is Director
and Co Portfolio Manager of Contact Asset Management. He is also a Non-Executive Director of
Washington H. Soul Pattinson and Company Limited. Mr Millner has extensive experience within
the financial services industry, including 19 years in active portfolio management and over 10 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.
Special responsibilities
Nil.
Interests in shares
and options
4,004,368 Ordinary Shares in New Hope Corporation Limited (comprising 21,153 directly held
shares and 3,983,215 shares held through family related interests).
Nil Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited.
25
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information INFORMATION ON DIRECTORS (CONTINUED)
MR I.M. WILLIAMS – BEC, LLB | INDEPENDENT NON-EXECUTIVE DIRECTOR
Experience
Mr Ian Williams was appointed as a Non-Executive Director of the Company on 1 November 2012.
Mr Williams is an experienced Non-Executive Director and corporate advisor and was a corporate
partner of international law firms Herbert Smith Freehills and Ashurst for 20 years.
He is chair of Lindsay Australia and McDonald Jones Homes Group, a Director of National Group
Corporation, Spicers Paper, Softbank Robotics Australia, Stoddart Group and Baseball Australia
and Vice-President of the Australia Japan Business Co-operation Committee.
Other current listed
directorships
Lindsay Australia Limited – Appointed September 2021.
Former listed directorships
in last three years
Nil.
Special responsibilities
Interests in shares
and options
Chair of the Audit and Risk Committee
Member of the Health, Safety, Environment & People Committee
Member of Nomination Committee.
Nil Ordinary Shares in New Hope Corporation Limited.
Nil Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited.
MR W.H. GRANT OAM – FAICD, ALGA | INDEPENDENT NON-EXECUTIVE DIRECTOR UNTIL 17 NOVEMBER 2020
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 retired 17 November 2020.
Other current listed
directorships
Former listed directorships
in last three years
Special responsibilities
Nil.
Nil.
Chair of the Health, Safety, Environment & People Committee – Retired 17 November 2020
Chair of the Bridgeport Energy Limited Board – Retired 17 November 2020
Member of the Nomination Committee – Retired 17 November 2020
Member of the Audit and Risk Committee – Retired 17 November 2020.
Interests in shares
and options
30,000 Ordinary Shares in New Hope Corporation Limited as at 17 November 2020; the date
he ceased as KMP.
Nil Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited.
26
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information INFORMATION ON DIRECTORS (CONTINUED)
MR S.O. STEPHAN – B.BUS (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. 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. Mr Stephan retired on 31 August 2020.
Other current listed
directorships
Former listed directorships
in last three years
Special responsibilities
Nil.
Nil.
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
906,234 Ordinary Shares in New Hope Corporation Limited (comprising 896,234 held directly and 10,000
Ordinary Shares held by family related interests) as at 31 August 2020; the date he ceased as KMP.
Nil Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited.
COMPANY SECRETARY
MR R.J. BISHOP – B.COMM, B.BUS (MAR), GAICD | COMPANY SECRETARY APPOINTED 17 NOVEMBER 2020
Mr Bishop joined the Company in 2019 as General Manager of Corporate Development and in 2020 and was appointed Chief
Financial Officer and Company Secretary, assuming responsibility for the Group’s finance and Company secretarial functions.
Mr Bishop has more than 20 years’ experience in the resources and manufacturing sectors. Prior to joining the Company,
Mr Bishop was Chief Financial Officer and Company Secretary of AMCI Investments Pty Ltd and is a Graduate of the Australian
Institute of Company Directors.
MS J.S. MOODY – B.BUS (DIST), LLB (HONS), GRAD. DIP. LEGAL PRACTICE, GAICD, FGIA |
COMPANY SECRETARY UNTIL 17 NOVEMBER 2020
Ms 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 ceased being Company Secretary on
17 November 2021 and has departed the Company.
27
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information
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 Key Management Personnel (KMP) in
accordance with section 300A of the Corporations Act 2001 and associated regulations. KMP are defined as 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 2021 financial year are outlined below:
NAME
Directors
POSITIONS HELD
COMMENCED
CEASED
Mr R.D. Millner
Non-Executive Director
Chair
Mr T.J. Barlow
Non-Executive Director
Ms J.E. McGill AO
Independent Non-Executive Director
Chair of the Nomination Committee
01 Dec 1995
27 Nov 1998
22 Apr 2015
24 Apr 2016
22 Jun 2020
Chair of the Health, Safety, Environment, and People Committee (HSEPC)
17 Nov 2020
Mr T.C. Millner
Non-Executive Director
Mr I.M. Williams
Independent Non-Executive Director
Chair of the Audit and Risk Committee (ARC)1
Non-Executive Director of Controlled Subsidiary
Mr W.H. Grant OAM Independent Non-Executive Director
Chair of the HSEPC
Chair of Controlled Subsidiary
Executive KMP
Mr R.H. Schmidt
Chief Executive Officer (CEO)
Mr R.J. Bishop
Chief Financial Officer (CFO)2
Mr S.O. Stephan
Managing Director (MD)
Company Secretary
Chief Executive Officer (CEO)
Mr A.L. Boyd
Chief Operating Officer (COO)
Mr B.C. Armitage
Chief Development Officer (CDO)
16 Dec 2015
01 Nov 2012
25 Nov 2019
02 Sep 2019
25 May 2006
17 Nov 2020
15 Nov 2007
17 Nov 2020
17 Mar 2014
17 Nov 2020
01 Sep 2020
01 Aug 2020
17 Nov 2020
01 Feb 2014
31 Aug 2020
20 Nov 2014
31 Aug 2020
19 Dec 2015
31 Dec 2020
01 Feb 2019
27 Nov 2020
1
Mr I.M. Williams was Acting Chair of the ARC for the period from 25 November 2019 to 22 October 2020.
2 Mr R.J. Bishop was Acting CFO for the period from 1 August 2020 to 22 October 2020.
REMUNERATION GOVERNANCE
The performance of the Company can only be achieved by identifying and retaining high calibre Directors and Executives with
appropriate experience and capability. Developing an appropriate remuneration strategy is a key factor in ensuring employees
are engaged and motivated to perform over the long-term.
The Board maintains overall responsibility for the remuneration of the Executive KMP and ensures the structures are
competitive and aligned with the long-term interests of the Company and shareholders. While the Board maintains overall
responsibility and approval for the Executive KMP remuneration, it delegates oversight to the HSEPC (previously known as
the Human Resources and Remuneration Committee) to regularly review, report and make recommendations to the Board
in relation to remuneration.
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To ensure that remuneration is consistent with current industry practices, the HSEPC seeks and considers advice from a wide
range of sources including:
• Shareholders;
• External remuneration consultants;
• Other experts and independent consultants;
• Legal advisors;
• Management; and
• Independent surveys, reviews, market information and reports.
Advice from other experts and independent consultants will typically cover Non-Executive Director fees, Executive KMP
remuneration and pay structures and equity plans.
No remuneration recommendations were received in the 2021 financial year as defined by the Corporations Act 2001.
EMPLOYMENT CONTRACTS
Employment contracts with the Executive KMP detail the individual terms and conditions of employment. They provide
for a cash salary, superannuation and non-cash benefits, details of which are provided below and on page 30 of 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.
TERM OF AGREEMENT
AND NOTICE PERIOD1
BASE
REMUNERATION PLUS
SUPERANNUATION
TERMINATION
PAYMENTS2
NAME
Current Executive KMP
Mr R.H. Schmidt
No fixed-term | six month notice period
1,500,0003
Six months’ base remuneration
Mr R.J. Bishop
No fixed-term | three month notice period
595,0003
Three months’ base remuneration
Former Executive KMP
Mr S.O. Stephan
No fixed-term | six month notice period
1,500,000
Six months’ base remuneration
Mr A.L. Boyd
No fixed-term | three month notice period
851,160
Three months’ base remuneration
Mr B.C. Armitage
No fixed-term | three month notice period
616,000
Three months’ base remuneration
1 This notice applies equally to all parties.
2
Base salary is payable if the Company terminates Executive KMP 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.
3
Fixed remuneration quoted is current as at 31 July 2021 and is reviewed annually by the HSEPC.
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 Non-Executive Director.
Non-Executive Directors are paid within an aggregate fee limit approved by shareholders. The current limit is $1,750,000
per financial year and was approved by shareholders on 15 November 2012. In the 2021 financial year, the aggregate
amount expended for Non-Executive Directors’ remuneration was at 56 per cent of this limit. The Board will not seek an
increase to the aggregate fee limit at the 2021 Annual General Meeting (AGM).
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REMUNERATION STRUCTURE – NON-EXECUTIVE DIRECTORS (CONTINUED)
Non-Executive Directors are paid a fixed annual fee (inclusive of superannuation where relevant) and do not participate
in any performance-related incentive awards or receive shares or share options. Non-Executive Directors do not receive
retirement benefits other than inclusive superannuation payments. Non-Executive Director fees currently consist of base
fees for the Chair and Non-Executive Directors of the Board and fees for the Chairs and Members of the HSEPC and ARC.
Fees paid to Non-Executive Directors are set out in the table below.
20211
Chair
Member2
2020
Chair
Member
BOARD
AUDIT AND RISK
COMMITTEE
HEALTH,
SAFETY,
ENVIRONMENT,
AND PEOPLE
COMMITTEE
NOMINATION
COMMITTEE
CONTROLLED
SUBSIDIARY
240,992
142,404
240,900
142,350
54,771
10,954
17,263
10,954
54,750
17,256
n/a
n/a
n/a
n/a
n/a
n/a
47,159
32,863
47,141
32,850
1
2
On 1 July 2021, the superannuation guarantee percentage increased from 9.5 per cent to 10.0 per cent. 2021 fees include this increase for one
month of the 2021 financial year.
During the 2021 financial year, the Board introduced fees for Members of the HSEPC and ARC. The fees recognised the additional time
commitment required by Non-Executive Directors who serve on Board Committees.
REMUNERATION STRUCTURE — EXECUTIVE KMP
Remuneration of the 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
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2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information
REMUNERATION REPORT (CONTINUED)
The following table summarises the Company’s policy regarding Executive KMP remuneration.
TOTAL FIXED
REMUNERATION (TFR)
SHORT-TERM
INCENTIVE (STI)
LONG-TERM
INCENTIVE (LTI)
Purpose
To attract, motivate and retain
Executive KMP with the
appropriate experience and
capabilities 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 on delivering
against short-term goals that
underpin the success of the
Company.
Link to
Performance
Motivate Executive KMP to drive
a strong and positive culture and
deliver on the business strategy.
Strategic annual objectives
embedded in each Executive
KMP’s personalised scorecard.
Performance
Measures
Individual accountabilities that
support the execution of the
business strategy. The Executive
KMP receive a fixed amount which
is recommended annually by the
HSEPC and set by the Board.
Individual performance indicators
are based upon the short-term
requirements of the role and
the Company.
Company key performance
indicators (KPIs) which link
performance to short-term
business strategy.
Delivery
Competitive market based fixed
remuneration comprising base
salary, superannuation, and other
non-cash benefits relating to
motor vehicles.
Limited cash bonuses are payable
where set performance targets
are achieved for the relevant
financial year.
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.
Performance hurdles are set by
the Board over three-year periods
to deliver sustained shareholder
value.
Long-term Company performance
is measured by the Total
Shareholder Return (TSR) achieved
by the Company over a three-year
period relative to the net total
return of the ASX index of which
the Company is a member.
Individual performance indicators
are based upon the long-term
requirements of the role and
needs of the Company.
Performance Rights granted up
to award size limits convert to
Ordinary Shares after a defined
vesting period and upon meeting
required performance hurdles
and satisfying the requisite
service conditions.
TOTAL FIXED REMUNERATION STRUCTURE
TFR is based on the position, scope and leadership accountability of the KMP. TFR is determined by a process of review
of Company and individual experience, relevant comparative remuneration both in the market and internally, and, where
appropriate, external independent advice on remuneration structure, policies and practices.
SHORT-TERM AND LONG-TERM INCENTIVE STRUCTURES
The Board considers the use of STI and LTI as reasonable means of remunerating Executive KMP on the basis they:
• Encourage Executive KMP to achieve objectives linked to shareholder value creation;
• Create a strong link between performance and reward;
• Provide flexibility to the Company to actively manage the way in which it remunerates and incentivises Executive KMP;
and
• Contribute to the attraction and retention of skilled talent in a competitive market.
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NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information REMUNERATION REPORT (CONTINUED)
SHORT-TERM AND LONG-TERM INCENTIVE STRUCTURES (CONTINUED)
The following diagram sets out the maximum remuneration mix of TFR, STI award and LTI award value at grant for the
Executive KMP for the 2021 financial year.
CURRENT EXECUTIVE KMP
Maximum Remuneration Mix
CEO
CFO
$1,500,000
$595,000
$776,111
$555,000
$257,988
$178,500
0%
1 0%
20%
30%
40%
50%
60%
70%
80%
90%
100%
TFR
STI
LTI
VARIABLE EXECUTIVE REMUNERATION — SHORT-TERM INCENTIVES
ASPECT
Form of Award
DESCRIPTION
Cash bonus payment.
Performance Period
The Company’s financial year (12 months).
STI Award size
The target award payable to each Executive KMP is currently between 30 per cent and
35 per cent of their base salary, depending on the role.
The maximum award payable to each Executive KMP at stretch performance is between
45 per cent and 52.5 per cent of their base salary, depending on the role.
Award Determination
and Payment
STI award is determined following a review of performance over the year against the Company
and individual 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 any
STI award.
Cessation of Employment
During a Period
Generally, no STI will be awarded for the current or prior Performance Period if cessation of
employment occurs prior to October. The Board retains absolute discretion to award some
or all the STI entitlement to Executive KMP.
Company and Individual KPIs
The Company KPIs reference Group Profit, Group Sales, Group Costs and Group Safety.
The Individual KPIs include specific safety, operational, project and strategic KPIs which
are assessed on a scorecard basis in addition to the level of demonstration of the Company’s
Core Values and behaviours. KPI components are weighted.
The Board assessed each Executive KMP against their respective Company and individual KPIs for the 2021 financial year.
The HSEPC considers that the Executive KMP have executed the Company’s strategy. Overall Company performance
achieved target. Individual KPIs were achieved at stretch performance having particular regard to the successful business
transformation achieved. Details of the Executive KMPs’ STI awards in relation to the 2021 financial year are set out below.
Current Executive KMP
Mr R.H. Schmidt1
Mr R.J. Bishop2
STI MAXIMUM
$
STI PAYABLE
$
STI PAYABLE
%
STI FORFEITED
$
STI FORFEITED
%
776,111
257,988
595,019
206,412
77%
80%
181,092
51,576
23%
20%
1 CEO KPI criteria components are weighted 70 per cent Company performance, 30 per cent individual performance.
2 CFO KPI criteria components are weighted 60 per cent Company performance, 40 per cent individual performance.
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REMUNERATION REPORT (CONTINUED)
VARIABLE EXECUTIVE REMUNERATION — LONG-TERM INCENTIVES
At the commencement of a new performance period, the Executive KMP are issued with Performance Rights up to their
respective maximum LTI award value at grant date elated to their individual role in line with the LTI plan.
ASPECT
Form of LTI Award
DESCRIPTION
Performance Rights which will convert to Ordinary Shares conditional upon the satisfaction
of both performance and service vesting conditions. The number of Performance Rights are
calculated utilising 5 day VWAP up to and including Date of Award. Performance Rights carry
no entitlement to voting or dividends prior to converting to Ordinary Shares.
LTI Award Size
The maximum LTI award value for each Executive KMP is currently between 30 per cent and
37 per cent of their TFR, depending on the role.
Date of LTI Award
1 August annually.
Performance Period
Service Period
Three years from the Date of Award. For the LTI awards relating to the 2021 financial year,
the Performance Period is from 1 August 2020 to 31 July 2023.
The Executive KMP must remain an employee of the Company during the Performance
Period and for an additional 12 months post the Performance Period to be eligible for LTI
award vesting. For the LTI awards relating to the 2021 financial year the Service Period is
from 1 August 2020 to 31 July 2024.
Cessation of Employment
During the Service Period
Generally, all unvested LTI awards will be forfeited if employment ceases prior to the
completion of the Service Period. The Board in its absolute discretion may allow LTI awards
to vest in the circumstances where a participant dies, total or permanent disability occurs or
retirement after the age of 55 years.
Retesting
There is no retesting applicable to LTI award.
LTI Award Determination
and Vesting
The Board ultimately decides what percentage of LTI award will be issued per LTI series.
All vesting conditions must be satisfied for the Performance Rights to be converted to Ordinary
Shares. Performance Rights that are not converted to Ordinary Shares will lapse. The LTI
awards for the 2021 LTI series include two separate performance criteria described below:
• Long-term Company performance measured by the TSR achieved by the Company
during the Performance Period relative to the net total return of the ASX index of which
the Company is a member (75 per cent weighting of Performance Rights)
• Individual Executive KMP performance indicators set specifically with reference to the
Company’s strategic plan and objectives, and the requirements of the role (25 per cent
weighting of Performance Rights).
Gate
Individuals must achieve or exceed performance hurdles and satisfy requisite service conditions
to be granted any LTI award.
2021 LTI series
On 4 December 2020, the Company issued 547,225 Performance Rights to Executive KMP in line with the LTI Plan Rules
outlined above.
Prior period LTI series
Performance Rights granted under the 2018, 2019 and 2020 LTI series issued to Executive KMP were forfeited during the
2021 financial year as a result of service conditions not being satisfied.
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VARIABLE EXECUTIVE REMUNERATION — LONG-TERM INCENTIVES (CONTINUED)
Performance Rights granted under the 2017 LTI series covered the Performance Period 1 August 2016 to 31 July
2019 and the Service Period 1 August 2016 to 31 July 2020. The HSEPC assessed the vesting criteria in accordance
with the LTI Plan. For the 2017 LTI award series, the Company achieved strong TSR performance of over 125 per cent
measured over the three-year Performance Period against the ASX 200 Net Total Return Index, resulting in the maximum
75 per cent weighted company performance component vesting. The Board assessed the individual Executive KMP
performance against long-term strategic plans and objectives and the requirements of the role annually over the three-
year Performance Period. Assessment outcomes were then averaged resulting in a performance score out of 25 for each
Executive KMP. This result ranged from 18 to 21 out of 25, or 72 to 84 per cent of the individual performance component
of 25 per cent weighting. The Performance Rights were then subject to an additional 12-month Service Period, following
which LTI awards vested resulting in the relevant Performance Rights converting into Ordinary Shares in August 2020.
The Board is satisfied that the 2017 LTI award series outcomes are aligned with the delivery of the Company’s strategy
over the 2017–2020 period and were effective to encourage and deliver sustainable, long-term value creation through
equity ownership.
VARIABLE REMUNERATION OUTCOMES
The HSEPC is of the view that the Executive KMP are executing the Company’s strategy. Refer to the Remuneration —
Statutory Tables page 35 which detail the actual remuneration paid to each Executive KMP in the 2021 financial year.
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2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information REMUNERATION REPORT (CONTINUED)
REMUNERATION – STATUTORY TABLES
Details of the remuneration of Directors and the Executive KMP of the Company during the 2021 financial year are set
out below.
SHORT-TERM BENEFITS
LONG-TERM
BENEFITS
POST-
EMPLOYMENT
OTHER
CASH
SALARY
AND FEES
CASH
BONUS
NON-CASH
BENEFITS1
LONG
SERVICE
LEAVE
SUPER-
ANNUATION2
TERMINATION
BENEFITS3
SHARE-
BASED
PAYMENTS
EQUITY
SETTLED
SHARES
TOTAL
$
2021
Non-Executive
Directors
Mr R.D. Millner
Mr T.J. Barlow4
Ms J.E. McGill AO
Mr T.C. Millner
Mr I.M. Williams
220,000
130,000
153,839
130,000
220,000
Mr W.H. Grant OAM5
46,357
Total Non-Executive
Directors
900,196
Executive Directors
Mr S.O. Stephan5,6
114,187
Other KMP
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20,992
12,404
14,680
12,404
20,992
4,404
85,876
34,280
2,036
3,616
Mr R.H. Schmidt5
1,355,848 595,019
113,904
24,402
Mr R.J. Bishop5,6
541,460 206,412
18,323
12,387
Mr A.L. Boyd5,6
Mr B.C. Armitage5,6
303,467
180,765
–
–
125,734
5,547
7,941
(41,059)
22,163
24,648
9,039
9,039
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
240,992
142,404
168,519
142,404
240,992
50,761
986,072
(32,753)
121,366
50,044 2,161,380
16,095
819,325
519,349
(147,790)
815,346
400,008
(69,798)
486,896
Total Other KMP
2,381,540 801,431
265,902
Total Remuneration
3,395,923 801,431
300,182
1,277
3,313
64,889
919,357
(151,449) 4,282,947
154,381
919,357
(184,202) 5,390,385
1
2
3
4
5
6
Non-cash benefits include movements in annual leave provisions and fringe benefit tax incurred by the Company.
Superannuation guarantee requirements for the 2021 and 2020 financial years are in line with the Australian Taxation Office’s
legislated requirements.
Termination payments aligned to contractual terms and conditions and finalised in individual deed of release.
Mr T.J. Barlow’s base salary excludes Committee fees of $20,000 (2020: $20,000) for his services as Member of the Audit and Risk Committee
and Member of the Health, Safety, Environment, and People Committee. He has elected to waive his remuneration for these services.
Individuals who commenced or ceased as KMP during the 2021 financial year. Refer to page 28 for commencement and cessation dates.
A temporary part-time arrangement (nine-day fortnight) was implemented as a cost saving initiative in response to the impact of the
COVID-19 pandemic, reducing base salaries from 1 July 2020 to 31 December 2020 by approximately 10 per cent.
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NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information REMUNERATION REPORT (CONTINUED)
Details of the remuneration of Directors and the Executive KMP of the Company during the 2020 financial year are set
out below.
REMUNERATION – STATUTORY TABLES (CONTINUED)
SHORT-TERM BENEFITS
CASH
SALARY
AND FEES
CASH
BONUS
NON-CASH
BENEFITS1
LONG-
TERM
BENEFITS
LONG
SERVICE
LEAVE
POST-
EMPLOYMENT
OTHER
SUPER-
ANNUATION2
TERMINATION
BENEFITS3
SHARE-
BASED
PAYMENTS
EQUITY
SETTLED
SHARES
TOTAL
$
2020
Non-Executive
Directors
Mr R.D. Millner
Mr T.J. Barlow
Ms J.E. McGill AO7
Mr T.C. Millner
Mr I.M. Williams
300,514
140,848
14,333
140,848
203,348
Mr W.H. Grant OAM8
431,918
Total Non-Executive
Directors
1,231,809
Executive Directors
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
20,307
13,381
1,362
13,381
18,332
41,032
107,795
Mr S.O. Stephan9
1,420,609 370,800
19,665
5,796
17,560
Other KMP
Mr A.L. Boyd
775,849 220,000
40,986
Mr B.C. Armitage
561,237 102,500
(16,285)
Total Other KMP
1,337,086 322,500
24,701
Total Remuneration10 3,989,504 693,300
44,366
550
1,136
1,686
7,482
17,560
18,901
36,461
161,816
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
320,821
154,229
15,695
154,229
221,680
472,950
– 1,339,604
(49,142) 1,785,288
163,455 1,218,400
77,769
745,258
241,224 1,963,658
192,082 5,088,550
1
2
3
4
5
6
7
8
Non-cash benefits include movements in annual leave provisions and fringe benefit tax incurred by the Company.
Superannuation guarantee requirements for the 2021 and 2020 financial years are in line with the Australian Taxation Office’s
legislated requirements.
Termination payments aligned to contractual terms and conditions and finalised in individual deed of release.
Mr T.J. Barlow’s base salary excludes Committee fees of $20,000 (2020: $20,000) for his services as Member of the Audit and Risk Committee
and Member of the Health, Safety, Environment, and People Committee. He has elected to waive his remuneration for these services.
Individuals who commenced or ceased as KMP during the 2021 financial year. Refer to page 28 for commencement and cessation dates.
A temporary part-time arrangement (nine-day fortnight) was implemented as a cost saving initiative in response to the impact of the
COVID-19 pandemic, reducing base salaries from 1 July 2020 to 31 December 2020 by approximately 10 per cent.
Ms J.E. McGill AO was appointed to the Board effective 22 June 2020.
Remuneration for W.H Grant OAM includes fees associated with his role as Chair of the Board of a New Hope controlled subsidiary.
It was determined in the 2020 financial year to remunerate W.H Grant OAM 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 financials years from 2015 to 2019 and $16,172 in Directors
fees and $1,536 superannuation for the 2014 financial year.
9
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.
10 Excludes 2020 KMP where there was no remuneration provided during the 2021 financial year.
36
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information NAME
Mr S.O.
Stephan3
Mr R.H.
Schmidt
Mr R.J.
Bishop
Mr A.L.
Boyd4
Mr B.C.
Armitage5
REMUNERATION REPORT (CONTINUED)
SHARE-BASED COMPENSATION
The terms and conditions of each LTI award series awarded to Executive KMP in the current or future reporting periods
and the associated pricing model inputs are detailed in the table below.
LTI
SERIES
GRANT
DATE
VESTING
DATE
NUMBER
GRANTED
VALUE
PER
SHARE1
NUMBER
VESTED
VESTED
%
NUMBER
FORFEITED
FORFEITED
%
NUMBER
LAPSED
LAPSED
%
TOTAL AWARD
VALUE
IN FUTURE
FINANCIAL
YEARS2
2017 Mar-18
Aug-20
263,158
$1.23
(247,369)
94%
2021 Dec-20
Aug-24
414,056
$0.76
2021 Dec-20
Aug-24
133,169
$0.76
–
–
–
–
2017 Mar-18
Aug-20
131,049
$1.23
(125,807)
96%
–
–
–
–
–
–
–
–
(15,789)
6%
–
–
–
–
–
314,683
101,208
(5,242)
4%
2018 Mar-19
Aug-21
85,134
$1.47
2019 Nov-19
Aug-22
112,611
$0.87
2020 Nov-19
Aug-23
112,611
$0.99
–
–
–
–
–
–
(85,134)
(112,611)
(112,611)
100%
100%
100%
–
–
–
–
–
–
2017 Mar-18
Aug-20
62,230
$1.23
(59,119)
95%
–
–
(3,111)
5%
2018 Mar-19
Aug-21
32,843
$1.47
2019 Nov-19
Aug-22
62,370
$0.87
2020 Nov-19
Aug-23
69,058
$0.99
–
–
–
–
–
–
(32,843)
(62,370)
(69,058)
100%
100%
100%
–
–
–
–
–
–
1
2
3
4
Fair value at grant date is independently determined using the Black-Scholes options pricing model that considers 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.
Calculated with reference to the grant date fair value.
Ceased as KMP 31 August 2020.
Ceased as KMP 31 December 2020.
5 Ceased as KMP 27 November 2020.
–
–
–
–
–
–
–
–
37
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information REMUNERATION REPORT (CONTINUED)
EQUITY HOLDINGS
The tables below show the number of Performance Rights and shares in New Hope Corporation Limited that were held
during the 2021 financial year by KMP and their related parties either directly, indirectly or beneficially.
Performance Rights Holdings
NAME
BALANCE AT
THE START OF
THE YEAR
GRANTED AS
REMUNERATION
VESTED
FORFEITED
LAPSED
BALANCE AT
THE END OF
THE YEAR
UNVESTED
Mr S.O. Stephan1
263,158
–
(247,369)
–
–
414,056
133,169
–
–
–
–
–
(15,789)
–
–
–
–
414,056
414,056
133,169
133,169
441,405
226,501
–
–
(125,807)
(310,356)
(59,119)
(164,271)
(5,242)
(3,111)
–
–
–
–
Mr R.H. Schmidt
Mr R.J. Bishop
Mr A.L. Boyd2
Mr B.C. Armitage3
1
2
3
Ceased as KMP 31 August 2020.
Ceased as KMP 31 December 2020.
Ceased as KMP 27 November 2020.
Shareholding
NAME
Mr R.D. Millner
Mr T.J. Barlow
Ms J.E. McGill AO
Mr T.C. Millner
Mr I.M. Williams
Mr W.H. Grant OAM1
Mr S.O. Stephan2
Mr A.L. Boyd3
Mr B.C. Armitage4
BALANCE AT
THE START OF
THE YEAR
4,177,774
19,900
–
3,994,368
38,087
30,000
673,865
156,925
–
PURCHASED/
(SOLD)
RECEIVED ON
THE VESTING OF
PERFORMANCE
RIGHTS
CEASED AS KMP
–
–
30,000
10,000
(38,087)
–
–
–
–
–
–
–
–
–
–
247,369
125,807
59,119
–
–
–
–
–
(30,000)
(921,234)
(282,732)
(59,119)
BALANCE AT
THE END OF
THE YEAR
4,177,774
19,900
30,000
4,004,368
–
–
–
–
–
1 Ceased as KMP 17 November 2020.
2 Ceased as KMP 31 August 2020.
3 Ceased as KMP 31 December 2020.
4 Ceased as KMP 27 November 2020.
Shares Issued on the Vesting of Performance Rights
Since the end of the financial year, no Performance Rights have vested and converted to Ordinary Shares in the Company.
Loans to Directors and Executives
There were no loans to Directors or Executives granted during the 2021 financial year, nor were there any outstanding loans
as at 31 July 2021.
VOTING AT THE COMPANY’S 2020 ANNUAL GENERAL MEETING
At the AGM held on Tuesday 17 November 2020, shareholders approved the resolution to pass the 2020 Remuneration
Report by 98.87 per cent.
End of Remuneration Report
38
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information NON-AUDIT SERVICES
Deloitte Touche Tohmatsu has acted as auditor for the Group for the entire 2021 financial 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 2021 financial year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms (refer Note 30):
Deloitte and Related Network Firms
Audit or Review of Financial Reports:
Group
Subsidiaries and Joint Operations
Other Assurance and Agreed-Upon Procedures under Other Legislation or Contractual Arrangements
Group
Other Services
Sustainability and Other Advisory Services
2021
$
2020
$
538,669
127,667
666,336
105,000
105,000
51,500
51,500
822,836
529,420
121,067
650,487
–
–
113,416
113,416
763,903
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 41.
The Company is of a kind referred to in ASIC Corporations 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.
39
NEW HOPE GROUP 2021 ANNUAL REPORT DIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information MEETINGS OF DIRECTORS
The following table sets out the number of meetings of the Company's Directors held during the year ended 31 July 2021
and the number of meetings attended by each Director:
FULL MEETINGS
OF DIRECTORS
AUDIT AND RISK
COMMITTEE
HSPEC
NOMINATION
COMMITTEE
HELD ATTENDED
HELD ATTENDED
HELD ATTENDED
HELD ATTENDED
19
19
19
19
19
19
19
19
18
19
19
19
6
2
–
5
5
–
5
5
–
–
5
5
–
5
2
–
–
3
3
–
3
3
–
–
3
3
–
3
1
–
–
1
–
–
1
1
–
–
1
–
–
1
1
–
Mr R.D. Millner
Mr T.J Barlow
Ms J.E. McGill AO
Mr T.C. Millner
Mr I.M. Williams
Mr W.H. Grant OAM1
Mr S.O. Stephan2
1 Mr W.H. Grant OAM resigned from the Board effective 17 November 2020.
2 Mr S.O. Stephan resigned from the Board effective 31 August 2020.
Signed at Sydney, 20 September 2021, in accordance with a resolution of Directors.
R.D. Millner
Director
40
2021 ANNUAL REPORT NEW HOPE GROUPDIRECTORS’ REPORTFOR THE YEAR ENDED 31 JULY 2021 Deloitte Touche Tohmatsu
ABN 74 490 121 060
Level 23, Riverside Centre
123 Eagle Street
Brisbane, QLD, 4000
Australia
Phone: +61 7 3308 7000
Deloitte Touche Tohmatsu
www.deloitte.com.au
ABN 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
The Board of Directors
New Hope Corporation Limited
20 September 2021
Level 16, 175 Eagle Street
Brisbane, QLD, 4000
Dear Board Members,
20 September 2021
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
Dear Board Members,
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
Auditor’s Independence Declaration to New Hope Corporation Limited
31 July 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of:
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
of independence to the directors of New Hope Corporation Limited.
(i)
(ii) any applicable code of professional conduct in relation to the audit.
As lead audit partner for the audit of the financial report of New Hope Corporation Limited for the year ended
31 July 2021, 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
Yours faithfully,
(ii) any applicable code of professional conduct in relation to the audit.
DELOITTE TOUCHE TOHMATSU
Yours faithfully,
Stephen Tarling
Partner
DELOITTE TOUCHE TOHMATSU
Chartered Accountants
Stephen Tarling
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
24
New Hope Group 2021 Annual Financial Report
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
24
New Hope Group 2021 Annual Financial Report
41
NEW HOPE GROUP 2021 ANNUAL REPORT 2021 FINANCIAL
REPORT
FINANCIAL STATEMENTS
Statement of Comprehensive Income 43
Statement of Financial Position
44
Statement of Changes in Equity
45
Cash Flow Statement
46
NOTES TO THE FINANCIAL
STATEMENTS
RESULTS FOR THE YEAR
1. Financial Reporting Segments
2. Revenue
3. Other Income and Expenses
4.
5.
Income Taxes
Reconciliation of Profit/(Loss)
After Income Tax to Net Cash
from Operating Activities
6. Earnings Per Share
48
53
53
55
59
60
OPERATING ASSETS
AND LIABILITIES
7. Receivables
61
8. Trade and Other Payables
62
9. Inventories
62
10. Assets Classified as Held for Sale 63
11. Property, Plant and Equipment
64
12. Intangible Assets
67
13. Exploration and Evaluation Assets 68
14. Impairments of Assets
69
15. Provisions
77
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
42
2021 ANNUAL REPORT NEW HOPE GROUP
A description of the nature of the
consolidated entity's operations and its
principal activities is included in the Directors'
Report on pages 12 to 40, which is not part
of this Financial Report. The Financial Report
was authorised for issue by the Directors on
20 September 2021. 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
CAPITAL
16. Cash and Cash Equivalents
17. Equity Investments
18. Borrowings
19. Derivative Financial Instruments
20. Dividends
21. Equity
RISK
22. Financial Risk Management
GROUP STRUCTURE
23. Interests in Other Entities
UNRECOGNISED ITEMS
24. Commitments
25. Events Occurring After the
Reporting Period
OTHER
26. Related Party Transactions
27. Share-Based Payments
28. Parent Entity Disclosures
29. Deed of Cross Guarantee
30. Remuneration of Auditors
31. Other Accounting Policies
DIRECTORS'
DECLARATION
INDEPENDENT
AUDITOR'S REPORT TO
THE MEMBERS OF NEW
HOPE CORPORATION
LIMITED
80
80
81
89
91
92
94
100
101
101
102
104
106
108
110
111
113
114
Operations ReviewDirectors’ ReportFinancial ReportOther Information STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2021
Revenue and Other Income
Revenue
Other Income
Expenses
Cost of Sales
Marketing and Transportation
Administration
Other Expenses
Financing Expenses
Impairment of Assets
Profit/(Loss) before Income Tax
Income Tax (Expense)/Benefit
Net Profit/(Loss) for the year
Net Profit/(Loss) attributable to New Hope Shareholders
Other Comprehensive Income/(Loss) for the year, net of Tax
Items that may be reclassified to Profit or 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 or Loss:
NOTES
2
3(a)
3(b)
18(d)
3(b)
2021
$000
2020
$000
1,048,239
1,083,918
5,739
56
1,053,978
1,083,974
(658,721)
(749,388)
(198,207)
(186,654)
(12,339)
(2,620)
(26,675)
(14,534)
14,058
(26,375)
(44,696)
(346,632)
110,720
(225,551)
4(a)
(31,370)
68,768
79,350
79,350
(156,783)
(156,783)
21(f)
21(f)
21(f)
(26)
(69,982)
38,470
2
67,524
(21,783)
Changes to the fair value of Equity Investments, net of Tax
21(f)
37
(527)
Other Comprehensive Income/(Loss) for the year, net of Tax
Total Comprehensive Income/(Loss) for the year
Total Comprehensive Income/(Loss) for the year attributable to
New Hope Shareholders
(31,501)
45,216
47,849
(111,567)
47,849
(111,567)
Earnings/(Loss) per share for Profit/(Loss) attributable to the Ordinary Equity
Holders of the Company
Basic Earnings/(Loss) per Share – Cents/Share
Diluted Earnings/(Loss) per Share – Cents/Share
6
6
9.5
9.5
(18.9)
(18.9)
The above Statement of Comprehensive Income should be read in conjunction with the accompanying Notes to the
Financial Statements.
43
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther Information STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2021
Current Assets
Cash and Cash Equivalents
Receivables
Derivative Financial Instruments
Inventories
Assets Classified as Held for Sale
Current Tax Assets
Total Current Assets
Non-Current Assets
Receivables
Derivative Financial Instruments
Equity Investments
Deferred Tax Assets
Property, Plant and Equipment
Intangible Assets
Exploration and Evaluation Assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
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 Earnings
Total Equity
NOTES
2021
$000
2020
$000
16
7
19
9
10
4(d)
7
19
17
4(e)
11
12
13
8
18
4(d)
15
18
4(e)
15
424,663
123,323
9,746
73,343
10,067
70,377
63,565
45,852
80,985
–
–
15,779
641,142
276,558
364
–
229
214
296
8,912
193
–
1,951,833
2,084,827
76,552
105,533
80,627
94,223
2,134,725
2,269,078
2,775,867
2,545,636
78,786
11,019
24,528
53,433
81,999
10,738
–
47,841
167,766
140,578
586,879
428,359
–
274,609
861,488
1,029,254
2,974
248,345
679,678
820,256
1,746,613
1,725,380
21(c)
21(f)
21(g)
97,536
16,890
96,692
42,553
1,632,187
1,586,135
1,746,613
1,725,380
The above Statement of Financial Position should be read in conjunction with the accompanying Notes to the Financial Statements.
44
2021 ANNUAL REPORT NEW HOPE GROUPOperations ReviewDirectors’ ReportFinancial ReportOther Information STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2021
Balance as at 1 August 2020
Profit/(Loss) for the year
Other Comprehensive (Loss)/Income
Total Comprehensive Income/(Loss)
Transactions with Owners in their capacity
as Owners
Dividends Paid
Convertible Notes Issued
Share-Based Payment Transactions
20(a)
21(d),(f)
21(d),(f)
CONTRIBUTED
EQUITY
$000
NOTES
RESERVES
$000
RETAINED
EARNINGS
$000
TOTAL
$000
96,692
42,553
1,586,135
1,725,380
–
–
–
–
–
844
844
–
79,350
(31,501)
(31,501)
–
79,350
79,350
(31,501)
47,849
–
(33,298)
(33,298)
6,610
(772)
5,838
–
–
6,610
72
(33,298)
(26,616)
Balance as at 31 July 2021
97,536
16,890
1,632,187
1,746,613
Balance as at 1 August 2019
Profit/(Loss) for the year
Other Comprehensive (Loss)/Income
Total Comprehensive Income/(Loss)
Transactions with Owners in their capacity
as Owners
Dividends Paid
Convertible Notes Issued
Share-Based Payment Transactions
20(a)
21(d)
21(d),(f)
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)
–
–
314
314
(124,756)
(124,756)
–
–
–
691
(124,756)
(124,065)
Balance as at 31 July 2020
96,692
42,553
1,586,135
1,725,380
The above Statements of Changes in Equity should be read in conjunction with the accompanying Notes to the
Financial Statements.
45
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther Information CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 JULY 2021
Cash Flows from Operating Activities
Receipts from Customers
Payments to Suppliers and Employees
Net Interest Paid
Net Income Taxes Received/(Paid)1
Net Cash Inflow from Operating Activities
Cash Flows from Investing Activities
Payments for Property, Plant and Equipment
Proceeds from Sale of Property, Plant and Equipment
Payments for Intangible Assets
Payments for Exploration and Evaluation Assets
(Payments)/Refunds for Security and Bond Guarantees
Net Cash (Outflow) from Investing Activities
Cash Flows from Financing Activities
Proceeds from Secured Debt
Repayments of Secured Debt
Net Proceeds from Convertible Notes
Repayment of Lease Liabilities
Dividends Paid
Net Cash Inflow/(Outflow) from Financing Activities
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at the beginning of the financial year
Effects of Exchange Rate changes on Cash and Cash Equivalents
Cash and Cash Equivalents at the end of the financial year
NOTES
2021
$000
2020
$000
5
12
13
18(a)
18(a)
18(c)
20
1,042,813
1,201,943
(750,444)
(904,123)
292,368
297,820
(15,620)
19,317
296,065
(15,776)
(26,586)
255,458
(49,850)
(100,246)
22,724
–
4,527
(224)
(10,813)
(12,899)
(4,821)
64
(42,760)
(108,778)
20,000
135,000
(70,000)
(135,000)
195,702
(13,876)
(33,298)
–
(10,815)
(124,756)
98,528
(135,571)
351,833
70,377
2,453
424,663
11,109
58,827
441
70,377
1
The amount of Income Taxes paid in the 2020 financial year represents current year instalments less a refund of instalments paid for the year
ended 31 July 2019.
The above Cash Flow Statement should be read in conjunction with the accompanying Notes to the Financial Statements.
46
2021 ANNUAL REPORT NEW HOPE GROUPOperations ReviewDirectors’ ReportFinancial ReportOther Information 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. The Financial Report for the year ended
31 July 2021 was authorised for issue in accordance with a resolution of the Directors on 20 September 2021.
BASIS OF PREPARATION
This Financial Report is a general purpose financial report which:
• Has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the
Australian Accounting Standards Board (AASB), Australian Accounting Interpretations and the Corporations Act 2001;
• Complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB). For the purposes of preparing the consolidated Financial Statements, the Company is a for profit entity;
• Adopts policies which are consistent with those of the previous financial year and corresponding interim reporting
period with the exception of changes required on adoption of new accounting standards as identified in Note 31;
• Does not adopt any Accounting Standards and Interpretations that have been issued or amended but are not yet
effective. Refer to note 31 for more information on this and other accounting policies;
• 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;
• 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 Consolidated Financial
Statements. Amounts in the Consolidated Financial Statements have been rounded off in accordance with that
Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar; and
• Presents comparative information that has been reclassified where appropriate to enhance comparability.
The Directors have presented these Consolidated 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.
The Group is in full compliance with its Debt Covenants at 31 July 2021 and has sufficient liquidity including a Cash
and Cash Equivalents balances of $424,663,000 (2020: $70,377,000) and an available Debt Facility of $140,000,000.
The Company has successfully navigated the economic impacts of COVID-19 to date and continues to monitor and respond
to the evolving situation.
BASIS OF CONSOLIDATION
(A) 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 2021 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 Financial Position and Statement of Changes in Equity respectively.
47
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 BASIS OF CONSOLIDATION (CONTINUED)
(B) INTERESTS IN OTHER ENTITIES
For information on Joint Arrangements and interests in Other unincorporated entities refer to Note 23.
Other Accounting Policies
Significant and other accounting policies relevant to gaining an understanding of the Consolidated Financial Statements have
been grouped with the relevant Notes to the Financial Statements.
Critical Judgements and Estimates
The preparation of Financial Statements requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed
within the following notes:
Note 4
Note 11
Note 11
Note 12
Note 13
Note 14
Note 15
Deferred Tax Assets
Impairment Assessment
Estimation of Coal and Oil Reserves and Resources
Goodwill Impairment Assessments
Exploration and Evaluation Expenditure
Impairment of Assets
Provisions – Rehabilitation
1. FINANCIAL REPORTING SEGMENTS
ACCOUNTING POLICY
PAGE
59
66
66
67
68
76
79
Operating Segments have been determined based on reports reviewed by Key Management Personnel (KMP) which
are used to make strategic decisions. KMP has been identified as the Board, the Chief Executive Officer (CEO) and the
Chief Financial Officer (CFO). The reportable segments reflect how performance is measured, and decisions regarding
allocations of resources are made by KMP.
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, coal exploration 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.
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.
48
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 1. FINANCIAL REPORTING SEGMENTS (CONTINUED)
B. SEGMENT INFORMATION
YEAR ENDED 31 JULY 2021
Total Segment Revenue
Intersegment Revenue
Revenue from External Customers
Interest Revenue
Total Revenue from External Customers
Group EBITDA
Segment EBITDA
Depreciation and Amortisation
Interest Expense
Segment Profit/(Loss) before Tax and Non-Regular Items
COAL MINING
NSW
$000
COAL MINING
QLD
$000
NOTES
OTHER
$000
TOTAL
$000
815,784
201,526
46,060
1,063,370
(134)
–
(15,050)
(15,184)
815,650
201,526
31,010
1,048,186
359,076
3
(118,279)
(1,155)
239,642
18,798
(22,136)
(3,065)
(6,403)
53
1,048,239
367,197
368,723
(149,353)
(5,173)
(9,151)
(8,938)
(953)
(19,042)
214,197
Non-Regular Items before Tax1
Segment Profit/(Loss) before Tax after
Non-Regular Items
–
(74,681)
(12,802)
(87,483)
239,642
(81,084)
(31,844)
126,714
Treasury Loss before Income Tax and Non-Regular Items
Non-Regular Treasury Items before Tax
Treasury Loss before Income Tax
Profit/(Loss) before Tax (after Non-Regular-Items)
Income Tax (Expense)/Benefit
4(a)
Profit/(Loss) after Tax and Non-Regular Items
(14,884)
(1,110)
(15,994)
110,720
(31,370)
79,350
Reportable Segment Assets
1,655,866
404,228
715,773
2,775,867
Total Segment Assets includes:
Additions of Non-Current Capital Assets
Increase in Impairment of Assets
79,625
–
4,837
(40,307)
12,955
(4,389)
97,417
(44,696)
1
Non-Regular Items for the financial year ended 31 July 2021 relate to Coal Mining Asset and Coal Exploration Asset Impairments, Onerous
Contracts, New Acland Ramp Down Costs, Group Redundancy Costs, Liquidation Related Expenses, Strategic Growth and M&A and Debt
Waiver Consent Fees.
2021 SEGMENT PERFORMANCE $000
2021 SEGMENT ASSETS $000
816
900
800
700
600
500
400
300
200
100
-
(100)
359
240
240
202
Segment Revenue from
External Customers
Segment EBITDA
Segment Profit/(Loss) before
Tax and Non-Regular Items
Segment Profit/(Loss) before tax
19
31
(6)
(81)
(9)
(19)
(32)
Coal Mining NSW Coal Mining QLD
Other
716
404
1,656
Coal Mining NSW
Coal Mining QLD
Other
49
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 1. FINANCIAL REPORTING SEGMENTS (CONTINUED)
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
Group EBITDA
Segment EBITDA
810
1,083,918
289,754
273,008
43,254
(23,680)
292,582
Depreciation and Amortisation
3
(110,765)
(29,459)
(10,646)
(150,870)
Interest Expense
(211)
(3,583)
(381)
(4,175)
Segment Profit/(Loss) before Tax and Non-Regular
Items
162,032
10,212
(34,707)
137,537
Non-Regular Items before Tax1
1,937
(121,387)
(225,605)
(345,055)
Segment Profit/(Loss) before Tax after Non-Regular Items
163,969
(111,175)
(260,312)
(207,518)
Treasury Loss before Income Tax
Profit/(Loss) before Tax (after Non-Regular-Items)
Income Tax (Expense)/Benefit
4(a)
Profit/(Loss) after Tax and Non-Regular Items
(18,033)
(225,551)
68,768
(156,783)
Reportable Segment Assets
1,757,890
402,123
385,623
2,545,636
Total Segment Assets includes:
Additions to Non-Current Capital Assets
68,518
8,572
52,464
129,554
Increase in Impairment of Assets
–
(110,781)
(235,851)
(346,632)
Recognition of Right-of-Use Assets on adoption
of AASB 16 Leases (AASB 16)
7,389
61,870
1,830
71,089
1
Non-Regular Items for the financial year ended 31 July 2020 relate to Jeebropilly Rehabilitation Provision movements, New Acland Ramp
Down costs, Queensland Operations Redundancy costs, Recovery of Port Costs, Coal Operations, Coal Exploration, Oil Producing, Oil
Exploration Assets Impairments, Impairment of Goodwill and Onerous Contract and related expenses.
2020 SEGMENT PERFORMANCE $000
2020 SEGMENT ASSETS $000
712
Segment Revenue from
External Customers
Segment EBITDA
340
Segment Profit/(Loss) before
Tax and Non-Regular Items
273
162
164
Segment Profit/(Loss) before tax
402
43
10
32
(24)
(35)
(111)
Coal Mining NSW Coal Mining QLD
(260)
Other
800
700
600
500
400
300
200
100
-
(100)
(200)
(300)
50
386
Coal Mining NSW
Coal Mining QLD
1,758
Other
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 1. FINANCIAL REPORTING SEGMENTS (CONTINUED)
C. OTHER SEGMENT INFORMATION
(i) SEGMENT REVENUE
YEAR ENDED 31 JULY 2021
NOTES
Total Segment Revenue by Geographical Region
COAL MINING
NSW
$000
COAL MINING
QLD
$000
OTHER
$000
TOTAL
$000
Japan
Taiwan
Chile
Korea
India
China
Vietnam
Other1
Australia
Revenue from Customer Contracts2
Other Revenue3
Total Revenue
2
345,200
205,211
16,969
45,672
37,322
20,638
82,314
–
46,046
15,971
21,969
–
–
15,885
56,196
48,855
–
12,536
776,063
194,721
–
–
–
–
–
–
–
–
24,920
24,920
427,514
205,211
63,015
61,643
59,291
20,638
15,885
56,196
86,311
995,704
52,535
1,048,239
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. Refer to Note 2.
3
Other Revenue includes revenue from provisional pricing adjustments on contracts fulfilled during the financial year. Refer to Note 2.
Revenues of $161,911,000 (2020: $58,538,000) are derived from a single external customer, representing 16 per cent of
total Revenue from Customer Contracts. These revenues are attributed to the Taiwan geographical segment. Provisional
pricing adjustments of $34,716,000 (2020: $8,199,000) relating to this customer are included within Other Revenue.
There are no other individual customers who represent more than 10 per cent of revenue from customer contracts for
the year ended 31 July 2021.
2021 SEGMENT REVENUE $000
2020 SEGMENT REVENUE $000
86
59
205
129
27
80
447
428
168
56
16
62
63
21
10
69
26
127
Japan
China
Chile
Korea
Vietnam
Other
Taiwan
India
Australia
51
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 1. FINANCIAL REPORTING SEGMENTS (CONTINUED)
C. OTHER SEGMENT INFORMATION (CONTINUED)
(i) SEGMENT REVENUE (CONTINUED)
YEAR ENDED 31 JULY 2020
NOTES
Total Segment Revenue by Geographical Region
COAL MINING
NSW
$000
COAL MINING
QLD
$000
OTHER
$000
TOTAL
$000
Japan
Taiwan
Chile
Korea
India
China
Vietnam
Other1
Australia
267,230
179,622
62,964
–
62,382
–
73,701
3,266
168,341
82,608
17,105
26,280
6,298
27,094
53,717
6,930
–
20,760
Revenue from Customer Contracts2
720,492
337,806
Other Revenue3
Total Revenue
2
–
–
–
–
–
–
–
–
25,047
25,047
446,852
80,069
26,280
68,680
27,094
127,418
10,196
168,341
128,415
1,083,345
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. Refer to Note 2.
3 Other Revenue includes revenue from provisional pricing adjustments on contracts fulfilled during the financial year. Refer to Note 2.
There are no customers who represent more than 10 per cent of Revenue from Customer Contracts for the year ended
31 July 2020.
(ii) SEGMENT ASSETS
The amounts provided to KMP with respect to total assets are measured in a manner consistent with that of the Consolidated
Financial Statements. These assets are allocated based on the operations of the Segment. All Non-Current Assets are
located in Australia.
52
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 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.
• Certain Coal 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.
• 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.
• Service Fee Income and Management Fee Income is recognised as Revenue over time as the services
are performed.
Sales Revenue
Revenue from Commodity Sales
Revenue from Provisional Pricing Adjustments
Services
Other Revenue
Property Rent
Interest
Sundry Revenue1
Total Revenue
NOTES
2021
$000
2020
$000
983,528
1,072,912
42,341
12,226
(10,793)
11,920
1,038,095
1,074,039
18(d)
1,509
85
8,550
1,186
689
8,004
1(b),(c)
1,048,239
1,083,918
1
Included within Sundry Revenue for the 2021 financial year is an amount relating to COVID-19 Government relief in the form of JobKeeper
payments received by the Group of $5,861,000 (2020: $3,909,000).
3. OTHER INCOME AND EXPENSES
Profit/(Loss) before Income Tax includes the following specific income/(expenses):
A. OTHER INCOME
(i) INSURANCE RECOVERY
Insurance Recovery
NOTES
2021
$000
2020
$000
5,739
56
53
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 3. OTHER INCOME AND EXPENSES (CONTINUED)
B. BREAKDOWN OF EXPENSES
NOTES
2021
$000
2020
$000
(i) DEPRECIATION AND AMORTISATION
Depreciation
Buildings
Plant and equipment
Total Depreciation
Amortisation
Mining reserves and leases
Mine and port development
Oil producing assets
Software
Right-of-use assets
Mining information
Water rights
Total Amortisation
(ii) IMPAIRMENT OF ASSETS
Impairment of QLD coal mining assets
Impairment of goodwill
Impairment of coal exploration and evaluation assets
Impairment of building assets
Impairment of oil producing and exploration assets
Total Impairment Charge
(iii) EMPLOYEE-RELATED EXPENSES
Salary and wages
Superannuation
Share-based payments expense
Redundancy expenses
Other employee benefits expenses
Total employee-related expenses
(iv) OTHER EXPENSES
Liquidation related expenses1
Onerous contract expenses2
Net Gain/(Loss) on disposal of property, plant and equipment
Lease costs expensed3
1
Liquidation related costs have been included in Other Expenses. Refer to Note 15(d).
2 Onerous contract expense is included in Marketing and Transportation expenses. Refer to Note 15(c).
3 Expenses relating to Leases of Low Value Assets.
54
11
11
11
11
11
12
11
12
12
11
12
11
12
11
(1,937)
(61,255)
(63,192)
(2,083)
(57,200)
(59,283)
(61,664)
(62,753)
(5,637)
(5,529)
(551)
(9,256)
(2,969)
(555)
(5,353)
(7,791)
(570)
(11,586)
(2,977)
(557)
(86,161)
(91,587)
(40,307)
(110,783)
_
(1,618)
(2,771)
(12,271)
(157,197)
–
–
(66,381)
(44,696)
(346,632)
(135,992)
(157,798)
(9,399)
(11,046)
(72)
(15,733)
(3,330)
(691)
(7,405)
(6,019)
164,526
(182,959)
(2,620)
(37,276)
4,981
(51)
14,058
–
(4,208)
(247)
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 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.
55
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 4. INCOME TAXES (CONTINUED)
A. INCOME TAX (EXPENSE)/BENEFIT
Income Tax – Current Tax Expense
Income Tax – Adjustments for Current Tax of Prior Periods
Income Tax – Deferred Tax (Expense)/Benefit
Effective Tax Rate
2021
$000
(24,631)
3,582
(10,321)
(31,370)
28.3%
2020
$000
(8,003)
7,508
69,263
68,768
30.5%
B. NUMERICAL RECONCILIATION OF INCOME TAX (EXPENSE)/BENEFIT TO PRIMA FACIE TAX
RECEIVABLE/(PAYABLE)
Profit/(Loss) before Income Tax
2021
$000
2020
$000
110,720
(225,551)
Income Tax calculated at 30% (2020: 30%)
(33,216)
67,665
Tax effect of amounts which are not deductible/(taxable) in calculating Taxable Income:
CGT Income not assessable
Impairment of Goodwill
Sundry Items
Under/(Over) provided in prior year
Income Tax (Expense)/Benefit
1,716
–
89
(31,411)
41
(31,370)
–
(3,681)
(18)
63,966
4,802
68,768
C. TAX (EXPENSE)/BENEFIT RELATING TO ITEMS OF OTHER COMPREHENSIVE INCOME
Cash Flow Hedges
2021
$000
2020
$000
(13,506)
19,604
56
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 4. INCOME TAXES (CONTINUED)
D. RECONCILIATION OF INCOME TAX RECEIVABLE/(PAYABLE)
Profit/(Loss) before Income Tax
Income Tax calculated at 30% (2020: 30%)
Tax effected adjustments to Taxable Income:
2021
$000
2020
$000
110,720
(225,551)
(33,216)
67,665
Effect of previously unrecognised Capital Losses
1,716
–
Non temporary differences:
Impairment of Goodwill
Other Non-Temporary items
Temporary differences:
Non-Deductible Impairment Expenses
Other deductible amounts
Taxable Income at 30% (2020: 30%)
Current Tax Liability
Current Tax Receivable
Less: Tax instalments paid
Tax Receivable/(Payable)
E. DEFERRED TAX BALANCES
ACCOUNTING POLICY
–
89
(3,681)
(18)
(13,204)
(100,308)
19,996
(24,619)
28,339
(8,003)
(24,619)
(8,003)
91
–
(24,528)
77
23,705
15,779
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.
57
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 4. INCOME TAXES (CONTINUED)
E. DEFERRED TAX BALANCES (CONTINUED)
NET BALANCE
AT 1 AUGUST
$000
INITIAL
ADOPTION
OF AASB 16
$000
RECOGNISED
IN PROFIT
OR LOSS
$000
RECOGNISED
IN OCI
$000
DEFERRED
TAX
ASSETS
$000
DEFERRED
TAX
LIABILITIES
$000
NET
$000
74,717
(81,465)
(10,327)
(16,429)
(4,475)
14,143
(4,012)
–
1,500
23,374
(2,974)
67,759
–
–
–
–
–
–
–
–
–
–
–
–
(59,587)
3,175
(7,300)
17,967
1,078
–
1,500
–
–
–
–
–
–
–
–
21,327
(52,633)
–
5,670
(19,660)
(2,639)
–
–
–
–
13,506
(3,665)
(2,856)
6,003
–
–
6,829
–
–
–
–
–
–
80,387
80,387
–
(101,125)
(12,966)
(2,923)
(8,140)
11,287
1,991
–
1,500
30,203
–
–
–
–
(101,125)
(12,966)
(2,923)
(8,140)
11,287
1,991
–
1,500
30,203
–
–
–
–
–
(10,318)
13,506
214
125,368
(125,154)
6,958
74,717
74,717
–
–
(19,604)
(16,429)
–
–
–
(81,465)
(10,327)
–
–
–
–
–
–
(4,475)
14,143
(4,012)
–
1,500
23,374
–
–
–
–
14,143
–
–
1,500
23,374
(81,465)
(10,327)
(16,429)
(4,475)
–
(4,012)
–
–
–
(19,604)
(2,974)
113,734
(116,708)
49,260
2,825
(3,824)
(5,090)
–
–
2,047
69,263
(77,225)
(21,327)
17,087
2021
Rehabilitation
Provision
Property, Plant
and Equipment
Capitalised
Exploration
Cash Flow Hedges
Inventories
Employee Benefits
Other
Revenue Tax Losses
Capital Losses
Lease Liabilities
2020
Rehabilitation
Provision
Property, Plant
and Equipment
Capitalised
Exploration
Cash Flow Hedges
Inventories
Employee Benefits
Other
Revenue Tax Losses
Capital Losses
Lease Liabilities
58
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 4. INCOME TAXES (CONTINUED)
F. 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
2021
$000
6,607
5,709
12,316
2020
$000
7,090
5,709
12,799
CRITICAL 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 PROFIT/(LOSS) AFTER INCOME TAX TO NET CASH
FROM OPERATING ACTIVITIES
Profit/(Loss) after Income Tax
Depreciation and Amortisation
Non-Cash Employee Benefit Expense – Share-Based Payments
Impairment of Assets
Net Foreign Exchange Gains
Net (Profit)/Loss on sale of Non-Current Assets
Net Income Taxes Received/(Paid)1
Income Tax Expense/(Benefit)
Amortisation of Transaction Costs on Secured Loan
Provision for Onerous Contract
Changes in Operating Assets and Liabilities
(Increase)/Decrease in Receivables and Prepayments
Decrease in Inventories
(Decrease) in Trade and Other Payables
Increase/(Decrease) in Provisions
Net Cash from Operating Activities
NOTES
27
3(b)
3(b)
4(a)
18(d)
15(c)
2021
$000
2020
$000
79,350
(156,783)
149,353
150,870
72
44,696
(2,453)
(4,981)
19,317
31,370
2,076
16,477
(54,973)
7,643
(3,768)
11,886
296,065
691
346,632
(441)
4,208
(26,586)
(68,768)
2,076
–
45,262
15,284
(21,338)
(35,649)
255,458
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.
59
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 6. EARNINGS PER SHARE
ACCOUNTING POLICY
Basic Earnings per Share
Basic Earnings per Share is calculated by dividing the Profit attributable to Ordinary 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. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE COMPANY
Basic Earnings per Share
Diluted Earnings per Share
B. RECONCILIATION OF ADJUSTED PROFITS
Profit/(Loss) attributable to the Ordinary Equity Holders of the Company
EARNINGS PER SHARE (CENTS)
2021
$000
9.5
9.5
2020
$000
(18.9)
(18.9)
BASIC
2021
$000
2020
$000
79,350
(156,783)
DILUTIVE
2021
$000
2020
$000
79,771
(156,783)
Profit/(Loss) attributable to the Ordinary Equity Holders of the Company
C. WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR
CONSOLIDATED
2021
2020
832,348,195
831,681,768
553,434
868,630
7,566,862
–
840,468,491
832,550,398
Weighted average number of Ordinary Shares (Basic)
Performance Rights
Convertible bond – Equity
Weighted average number of Ordinary Shares (Diluted)
60
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information
6. EARNINGS PER SHARE (CONTINUED)
D. PERFORMANCE RIGHTS GRANTED TO EMPLOYEES
Performance 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. Performance Rights have not been
included in the determination of Basic Earnings Per Share. Details relating to Performance Rights are set out in Note 27.
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 are assumed to approximate their fair values due to their
short-term nature. Trade Receivables are due for settlement no more than forty-five days from the date of recognition.
Loans and Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They are initially recognised at fair value, and subsequently at amortised cost less 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 twelve 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 Receivables1
Prepayments
Non-Current
Prepayments
Other Receivables
2021
$000
2020
$000
78,995
9,216
21,364
13,748
123,323
–
364
26,252
–
22,335
14,978
63,565
–
296
1
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.
A. 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 22.
61
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 7. RECEIVABLES (CONTINUED)
B. 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 22. 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.
8. TRADE AND OTHER PAYABLES
ACCOUNTING POLICY
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
and which are unpaid. The amounts are unsecured and usually paid within forty-five days of recognition.
Trade and Other Payables
9. INVENTORIES
ACCOUNTING POLICY
2021
$000
78,786
2020
$000
81,999
Coal Stocks are valued at the lower of cost and net realisable value. 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 relate to the Group's agricultural inventories and 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.
A provision for stock obsolescence in relation to Raw Materials and stores is raised for items which have become
obsolete over time.
Coal stocks
Self-Generating and Regenerating Assets
Raw Materials and Stores at cost
Less: Provision for Obsolescence
A. INVENTORY EXPENSE
2021
$000
42,090
5,120
29,276
(3,143)
73,343
2020
$000
46,092
3,322
33,272
(1,701)
80,985
Coal Stocks recognised as an expense during the year ended 31 July 2021 amounted to $689,838,000
(2020: $835,775,000). The Group did not recognise any inventory write-down to net realisable value for the financial year
(2020: $13,324,000).
62
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 10. ASSETS CLASSIFIED AS HELD FOR SALE
ACCOUNTING POLICY
Non-Current Assets (or disposal group) are classified as Held For Sale if it’s carrying amount will be recovered
principally through a sale transaction rather than through continuing use. When the sale is considered highly probable
and is available for immediate sale, the asset is valued at the lower of its carrying amount and fair value less costs to
sell, with any gain or loss on remeasurement recognised in the Statement of Comprehensive Income.
Land – Mining1
Buildings – Non-Mining2
2021
$000
7,067
3,000
10,067
2020
$000
–
–
–
1
$6,498,000 related to the Pastoral CGU and $569,000 related to the Qld Coal Mining Operations CGU, both included in the Coal Mining QLD
Operating Segment.
2
Included in 'Other' Operating Segment.
The Group has reclassified land with a net book value of $7,115,000 from Property, Plant and Equipment to Assets Classified
as Held for Sale following the execution of an unconditional contract for sale on 8 June 2021. The sale completed on 9
August 2021. An Impairment Charge of $48,000 has been recognised in the Statement of Comprehensive Income on the
remeasurement of a certain parcel of this land to fair value less costs to sell, which is lower than its carrying value. Refer to
Note 14 B(i). A gain on disposal of certain other parcels of land of $5,254,000 was recorded on disposal on 9 August 2021
and will be recognised in the Statement of Comprehensive Income in the future period. Refer Note 25.
On 28 July 2021, the Group entered a contract for sale of the Group's old corporate office at Brookwater, Queensland.
The sale is subject to a Put and Call Option with the Group intending to exercise their Put option within 30 days of the
contract date in line with the contract for sale. The Group reclassified this building with a net book value of $3,000,000,
from Property, Plant and Equipment to Assets Classified as Held for Sale.
There is no cumulative income or expense included in Other Comprehensive Income relating to the disposal of this land
or buildings.
63
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 11. PROPERTY, PLANT AND EQUIPMENT
ACCOUNTING POLICY
Property, Plant and Equipment
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, 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.
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 measurement 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 dismantle and remove the underlying asset.
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.
Depreciation
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 2021 financial year. The expected useful life of Plant and Equipment is 4 to 20 years, Buildings is 25 to 40
years and Motor Vehicles is four to eight years. Land is not depreciated.
Disposals
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
the Statement of Comprehensive Income.
Impairment
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. Refer to Note 14 for further detail on impairment of assets.
Mine Properties, Development Costs, Reserves and Leases and Oil Producing Assets
Development expenditure incurred by the Group 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 Mine and Port Development Assets are amortised over the estimated productive
life of each applicable mine or port 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 Producing 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.
64
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 11. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
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65
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021
11. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
CRITICAL JUDGEMENTS AND ESTIMATES
Impairment Assessment
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 14 for further detail on the significant judgements
and estimates used in impairment assessment.
Estimation of Coal and Oil Reserves and Resources
The Group estimates its coal reserves and resources based on information compiled by Competent Persons as defined
in accordance with the JORC Code, which is produced by the Australasian Joint Ore Reserves Committee (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 14 for details on Impairment of Assets.
New Acland Stage 3 Approvals
A number of uncertainties associated with the approvals, timeline and conditionality of the New Acland Stage 3
project (NAC03) remain at 31 July 2021. Consistent with the position outlined in financial report for the 2020 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 14 for details on Impairment of Assets.
66
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 12. INTANGIBLE ASSETS
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 14 for details of impairment testing. Goodwill impairments are
not reversible.
Year ended 31 July 2021
Balance at 1 August 2020
Amortisation Charge
Balance at 31 July 2021
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
1,443
(551)
892
1,468
224
321
–
(570)
1,443
11
14
NOTES
SOFTWARE
$000
GOODWILL
$000
WATER RIGHTS
$000
MINING
INFORMATION
$000
5,595
–
5,595
11,447
(555)
10,892
62,142
(2,969)
59,173
TOTAL
$000
80,627
(4,075)
76,552
17,866
12,004
65,119
96,457
–
–
(12,271)
–
5,595
–
–
–
–
–
–
(557)
11,447
(2,977)
62,142
224
321
(12,271)
(4,104)
80,627
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 $5,595,000 (2020: $17,866,000)
relates to the acquisition of Queensland Bulk Handling Pty Ltd (QBH). Refer to Note 14 for the details regarding the
impairment assessments performed at 31 July 2021 and any related impairment charge recognised in the Profit or Loss.
67
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 13. EXPLORATION AND EVALUATION ASSETS
ACCOUNTING POLICY
Costs are carried forward only if they relate to an area of interest for which rights of tenure are current and either
such costs are expected to be recouped through successful development and exploration or from sale of the area or
activities in the area of interest have not (at reporting date) reached a stage that permits a reasonable assessment of
existence or otherwise of economically recoverable reserves. 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.
Total Exploration and Evaluation Assets
Reconciliation
Balance at 1 August
Additions
Movements in Rehabilitation
Transfers from Property, Plant and Equipment
Impairment Charge
Balance at 31 July
NOTES
2021
$000
2020
$000
105,533
94,223
94,223
10,813
753
992
301,589
12,899
206
–
14
(1,248)
(220,471)
105,533
94,223
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 14 for the details regarding the impairment assessments performed at 31 July 2021 and any
related impairment charge recognised in the Profit or Loss.
68
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 14. 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 continued to monitor the recoverable amount of certain CGUs during the 2021 financial year. Recoverable
amounts have been determined using 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 CGUs 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 Coal Mine. During the 2021 financial
year 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 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.
69
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 14. IMPAIRMENTS OF ASSETS (CONTINUED)
B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED)
(i) QLD COAL MINING OPERATIONS (CONTINUED)
• 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;
• 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, NAC lodged an Amended AWL
application which has now progressed through public consultation and is with the Minister for decision;
• On 12 February 2019, New Acland Coal Pty Ltd (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 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;
• 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 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;
• On 3 February 2021, the High Court of Australia upheld the appeal by Oakey Coal Action Alliance (OCAA) against
NAC03 in respect of the orders issued by the Queensland Court of Appeal given on 1 November 2019; and
• The High Court ordered the matter to be re-heard in the Queensland Land Court. The date has been reserved for this
Land Court hearing 3 November 2021.
In light of the above pertaining to NAC03 approvals and the stage of mine life, the Directors undertook an impairment
assessment in relation to the QLD Coal Mining CGU at 31 July 2020 recognising an impairment charge of $110,783,000
(recognised in the Group's QLD Coal Mining segment). The Directors determined the recoverable amount for the CGU
based on a FVLCD calculation, using discounted cashflow projections, adjusted with probability weightings specific to
individual scenarios to derive a weighted average recoverable amount. Given ongoing delays in approvals the Directors
revisited impairment assessments at both 31 January and 31 July 2021. Several scenarios have been assessed, considering
a combination of different assumptions.
70
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 14. IMPAIRMENTS OF ASSETS (CONTINUED)
B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED)
(i) QLD COAL MINING OPERATIONS (CONTINUED)
Key assumptions used in FVLCD calculations:
ASSUMPTION
DESCRIPTION
Approvals, timelines,
probabilities and coal
tonnages
The extension of approval timelines and the nature of approvals 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 2022
in the earliest instance (highest probability), or at the latest with operations recommencing
on 1 August 2026 (low probability). 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. An assessment was
also considered based on the project approvals not being granted and the Company not
pursuing approvals, placing the operations into care and maintenance (low probability).
Coal Price
Short-term coal prices have improved since October 2020 and long-term indications of
pricing have remained largely consistent and in line with pricing reflected at 31 July 2020.
Project Approvals
Number of scenarios
Earliest Approvals
Latest Approvals
Care and maintenance
Coal Price – nominal basis
Foreign Exchange
Discount Rate (post-tax)1
31 JULY 2021
31 JANUARY 2021
31 JULY 2020
4
Aug-22
Aug-26
5
Aug-21
Feb-23
6
Aug-21
Aug-27
US$/tonne
$55.13 – $127.54
$55.13 – $127.30
$47.80 – $133.5
AUD:USD
0.75 – 0.77
0.74 – 0.75
0.68 – 0.73
%
10.5
10.5
10.5
1 Discount Rate (post-tax) – Long-Term Care and Maintenance, 3.5 per cent.
In undertaking impairment assessments, 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.
At 31 January 2021, the Company concluded that in aggregate these matters resulted in the recoverable amount for the
CGU being below its carrying value. As a result, an Impairment Charge of $40,259,000 was recognised in the Statement
of Comprehensive Income.
71
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 14. IMPAIRMENTS OF ASSETS (CONTINUED)
B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED)
(i) QLD COAL MINING OPERATIONS (CONTINUED)
The recoverable amount and Impairment Charge calculated to align to recoverable amount is outlined below.
2021
2020
RECOVERABLE
AMOUNT
$000
IMPAIRMENT
CHARGE
$000
RECOVERABLE
AMOUNT
$000
IMPAIRMENT
CHARGE
$000
NOTES
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
18,859
19,007
9,053
30,191
97
252
373
–
–
–
29,592
62,208
866
516
688
–
12,864
–
52,585
–
2,204
40,792
1,015
40,259
–
45,334
93,870
110,783
In assessing the recoverable amount for the CGU the Directors have endeavoured to use reasonable assumptions and
judgements of future uncertainties in key pricing, discount rate, foreign exchange assumptions and probabilities of certain
scenarios. Any changes in actual scenario outcomes could either result in additional impairments of the remaining carrying
value of $40,792,000 or reversal of previously booked impairments.
Impairment of Mining Land
Land with a net book value of $569,000 within the QLD Coal Mining Operations CGU was reclassified as Assets Classified
as Held for Sale on 8 June 2021. The Company recognised an Impairment charge of $48,000 following the remeasurement
of this asset to its fair value less costs to sell. Refer to Note 11.
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 mining of Stage 2 coal, while the port and water agreements are longer term. In relation to the rail
agreement, refer to Note 15c. In respect of the water agreement, should approvals for Stage 3 ultimately not be granted
and the operations be placed into long-term care and maintenance, an onerous contract may need to be recognised, if the
unavoidable costs of the contract cannot be mitigated.
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 Queensland 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 2021 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).
72
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 14. IMPAIRMENTS OF ASSETS (CONTINUED)
B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED)
(i) QLD COAL MINING OPERATIONS (CONTINUED)
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
(ii) GOODWILL
2021
$000
1,466
74,835
54,513
10,348
50
54
5,595
2020
$000
1,541
77,269
59,069
10,857
896
83
5,595
146,861
155,310
Goodwill relates to the acquisition of Queensland Bulk Handling Pty Ltd (Port Operations), $5,595,000, (2020: $5,595,000).
Goodwill was applied to 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 per cent
(2020: 9.5 per cent). At 31 July 2021 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 2021 financial year (2020: nil). The Port Operations CGU
is part of the Group’s Coal Mining QLD segment.
Coal Exploration Assets
In the 2020 financial year Goodwill relating to Coal Exploration Assets was impaired in full as the recoverable amount of the
CGU was assessed to be less than the carrying value of the CGU. An Impairment Charge of $12,271,000 was recognised
in the Statement of Comprehensive Income. The recoverable amount of the Coal Exploration Asset CGUs was determined
based on a comparable resource multiple attributable to the CGU. Details of the impairment assessment for the CGU are
outlined in B(iii).
73
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 14. IMPAIRMENTS OF ASSETS (CONTINUED)
B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED)
(iii) COAL EXPLORATION AND EVALUATION ASSETS
The Company determined that an indicator of impairment existed as at 31 July 2021 in respect of the North Surat Coal
Exploration Projects. The indicator arose as a result of the market conditions for Coal Exploration Assets.
The recoverable amount of the CGUs was 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. The Group determined that a resource multiple
of $0.03 (31 July 2020: $0.03) be ascribed to the JORC resources.
As a result of the impairment assessment, the recoverable amount of the CGU was assessed to be below its carrying value
for this CGU and an Impairment Charge of $1,618,000 (31 July 2020: $157,197,000 (excluding Goodwill of $12,271,000)),
was recognised in the Statement of Comprehensive Income at 31 July 2021, of which $1,385,000 (31 July 2020: nil) related
to Mine Development Assets included in Property, Plant and Equipment. 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
2021
2020
RECOVERABLE
AMOUNT
$000
IMPAIRMENT
CHARGE
$000
RECOVERABLE
AMOUNT
$000
IMPAIRMENT
CHARGE
$000
NOTES
25,530
8,797
4,989
–
39,316
233
1,385
23,069
10,861
147,816
–
–
–
5,939
–
9,381
12,271
1,618
39,869
169,468
At 31 July 2021 any changes in other assumptions could result in additional impairment, with a residual carrying value at risk
of $39,316,000 (2020: $39,869,000).
74
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 14. IMPAIRMENTS OF ASSETS (CONTINUED)
B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED)
(iv) IMPAIRMENT OF BUILDING ASSETS
On 28 July 2021 the Company executed a contract for sale certain building assets. The Assets were remeasured to fair value
less costs to sell resulting in an Impairment Charge of $635,000. Refer Note 11.
On 30 May 2021 the Company executed a contract to partially sublease its head office building. An Impairment charge of
$2,136,000 was recognised on remeasurement of the Right-of-Use Asset to fair value following a change in assumptions
pertaining to the Company's original fair value measurement assessment.
(v) OIL PRODUCING AND EXPLORATION ASSETS
At 31 July 2021 the Company determined that no indicators of impairment existed in respect of its Oil Producing and
Exploration Assets. At 31 July 2020 the Company determined that there were indicators of impairment 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.
Key assumptions used in FVLCD calculations at 31 July 2020:
ASSUMPTION
Oil price
DESCRIPTION
The oil price range for assessments at was US$40 – US$65/bbl (real basis).
Foreign Exchange
The assumed AUD:USD foreign exchange rate modelled was 0.68 – 0.73.
Discount Rates
The future cash flows have been discounted using a post-tax discount rate of 10.0 per cent.
Oil Exploration Assets were 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.
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
11
11
11
11
2,000
812
5,832
7,825
1,747
–
17,404
25,985
12,479
9,165
17,940
66,381
75
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 14. IMPAIRMENTS OF ASSETS (CONTINUED)
B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED)
(v) OIL PRODUCING AND EXPLORATION 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 probabilities, tonnages and recovery rates, foreign exchange
rates, operating costs, reserve and resource estimates (refer to Note 11), 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.
The above judgements, estimates and assumptions are subject to risk and uncertainty and may change as new
information becomes available. In particular, the increasing global focus on climate change and associated policy and
regulatory risk may impact some of the above judgements, estimates and assumptions. In the event the recoverable
amount of assets is impacted by changes in these, the carrying amount of the assets may be further impaired with
the impact recognised in the Statement of Comprehensive Income.
76
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 15. PROVISIONS
ACCOUNTING POLICY
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.
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
Onerous
contracts
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.
A provision for onerous contracts is recognised when the expected benefits to be derived by the
Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract.
The provision is measured at the present value of the lower of expected cost of terminating the contract
and the expected new cost of continuing with the contract.
2021
Current
Non-Current
2020
Current
Non-Current
EMPLOYEE
BENEFITS
$000
RESTORATION/
REHABILITATION
$000
ONEROUS
CONTRACTS
$000
36,630
6,976
43,606
40,148
6,982
47,130
326
16,477
267,633
267,959
7,693
241,363
249,056
–
16,477
–
–
–
TOTAL
$000
53,433
274,609
328,042
47,841
248,345
296,186
77
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 15. PROVISIONS (CONTINUED)
A. EMPLOYEE BENEFITS
Current long service leave obligations expected to be settled after 12 months
2021
$000
11,138
2020
$000
14,505
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
NOTES
2021
$000
2020
$000
Movements
Balance at 1 August
Provision Capitalised
Provision charged/(released) to Profit or Loss
Charged to Profit or Loss – unwinding of discount
18(d)
Balance at 31 July
C. ONEROUS CONTRACTS
249,056
3,490
11,517
3,896
225,862
29,962
(10,983)
4,215
267,959
249,056
The Group has recognised a provision for an onerous take or pay rail contract as a result of the ramp down of its QLD
Mining Operations with $37,276,000 charged to the Statement of Comprehensive Income in the year ending 31 July 2021
and a provision remaining of $16,477,000 at the balance sheet date. This contract ends in December 2021.
D. LIQUIDATION PROCESSES
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) and the liquidators for NEC and Colton Coal were claiming in proceedings that New Hope Corporation Limited
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 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;
78
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 15. PROVISIONS (CONTINUED)
D. LIQUIDATION PROCESSES (CONTINUED)
DEED OF CROSS GUARANTEE PROCEEDINGS (CONTINUED)
• 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; and
• Due to the successful results in relation to the DOCG proceedings, the Company released the previously held
provision in the year ended 31 July 2020.
ADMINISTRATION/LIQUIDATION PROCESS
The Liquidators commenced proceedings in the Supreme Court of New South Wales on 26 March 2021 against the
Company, associated subsidiary companies and former directors and officers of NEC and Colton. The claims made by the
Liquidators include that NEC and Colton were trading whilst insolvent. The Liquidators estimate the total value of the alleged
claims to be approximately $175,000,000 plus interest and costs.
On 26 August 2021, the Liquidators filed and served an Amended Statement of Claim joining Wiggins Island Coal Export
Terminal Pty Limited as a plaintiff to the proceedings.
The Liquidators evidence was due to be served by 17 September 2021 and a number of affidavits and documents have
been received. The proceedings are listed for further directions on 5 October 2021. The Court is yet to set a date for the
defendants to serve their evidence or for the hearing of the proceedings.
The Group denies the claims made by the Liquidators and intends to vigorously defend the proceedings.
SUMMARY
The Company has considered its position and has determined that no provision is required to be made as at 31 July 2021.
CRITICAL ESTIMATE – DETERMINATION OF RESERVES ESTIMATES, REHABILITATION COSTS
AND ONEROUS CONTRACTS
REHABILITATION
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 11.
ONEROUS CONTRACTS
A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract
are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the
present value of the lower of expected cost of terminating the contract and the expected new cost of continuing
with the contract.
79
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 16. CASH AND CASH EQUIVALENTS
ACCOUNTING POLICY
Cash and Cash Equivalents include Cash at Bank and 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
2021
$000
2020
$000
424,663
70,377
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 per cent and 0.6 per cent (2020: 0 per cent and 0.6 per cent).
B. RISK EXPOSURE
Information about the Group's exposure to foreign exchange risk and credit risk is detailed in Note 22.
17. EQUITY INVESTMENTS
ACCOUNTING POLICY
The Group classifies its Financial Assets as either subsequently measured at fair value (FV) 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 or 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 or Loss.
Listed Equity Securities
2021
$000
229
2020
$000
193
An irrevocable election has been made to classify existing Equity Investments held by the Group at FVOCI.
80
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 18. BORROWINGS
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 (Secured and Unsecured),
Leases Liabilities and Finance Income and Expense.
Current Liabilities
Lease Liabilities
Secured loan
Non-Current Liabilities
Lease Liabilities
Secured Loan1
Unsecured Convertible Notes2
2021
$000
2020
$000
10,066
953
11,019
90,585
307,101
189,193
586,879
597,898
9,810
928
10,738
73,335
355,024
–
428,359
439,097
1 Net of transaction costs capitalised $2,898,000 (2020: $4,976,000).
2 Net of transaction costs capitalised.
Details of the Group’s exposure to risks arising from current and non-current borrowing are set out below.
A. INTEREST-BEARING LOANS
ACCOUNTING POLICY
Interest-Bearing Loans are initially recognised at fair value, net of any transactions costs incurred and 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 liability 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.
Interest-Bearing Loans 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.
On issuance of Convertible Notes, the fair value of the liability component is determined using a market rate for
an equivalent non-convertible note. This amount is carried as a Non-Current Liability on an amortised basis until
extinguished on conversion or redemption. The increase in liability due to the passage of time is recognised as a
Finance Cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included
in Contributed Equity, net of transaction cost. The carrying amount of the conversion option is not remeasured in
subsequent years. Transaction costs are apportioned between the liability and equity components of the Convertible
Note based on the allocation of proceeds to the liability and equity components when the instruments are
first recognised.
81
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 18. BORROWINGS (CONTINUED)
A. INTEREST-BEARING LOANS (CONTINUED)
(i) SECURED LOANS
Current Liabilities
Non-Current Liabilities
Financing Activities During the Period
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 18(f).
During the 2021 financial year an additional $20,000,000
(2020: $135,000,000) of debt was drawn down under
the facility, with $70,000,000 (2020: $135,000,000)
being repaid. At the end of the financial year, the Secured
Loan Facility had amortised to $450,000,000 (2020:
$510,000,000). Facilities utilised at the end of the
financial year was $310,000,000 (2020: $360,000,000).
The Group has complied with the financial covenants of
its borrowing facilities during the 2021 and 2020 financial
year period.
2021
$000
953
307,101
308,054
2020
$000
928
355,024
355,952
FINANCING FACILITIES $000
140,000
310,000
Facilities utilised at
reporting date
Facilities not utilised
at reporting date
Secured Liabilities and Assets Pledged as Security
Lenders under the Secured Loan Facility have been granted a registered security interest 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. Lessors hold first rights in respect of leased assets.
82
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 18. BORROWINGS (CONTINUED)
A. INTEREST-BEARING LOANS (CONTINUED)
(ii) UNSECURED CONVERTIBLE NOTES
On 2 July 2021, the Company issued Convertible Notes (Notes) with an aggregate principal amount of $200,000,000.
There has been no movement in the number of these Notes since the issue date.
The Notes are convertible at the option of the Noteholders into Ordinary Shares based on an initial conversion price of
$2.10 per share at any time on or after 12 August 2021 up to the date falling five business days prior to the final maturity
date, 2 July 2026. The Noteholder has the option to require the Company to redeem all or some of the Noteholder's Notes
on 2 July 2024 for an amount equal to 100 per cent of the principal amount of the Notes plus any accrued but unpaid
interest. Any Notes not converted will be redeemed on 2 July 2026 at the principal amount of the Notes plus any accrued
but unpaid interest.
The Notes carry interest at a rate of 2.75 per cent per annum which is payable semi-annually in arrears on 2 July and
2 January.
The net proceeds from the Notes, after deducting all the related costs and expenses, were $195,202,000. The proceeds are
recorded in Cash and Cash Equivalents at 31 July 2021. The Company intends to use the net proceeds from the Convertible
Notes Offering for general corporate purposes, which may include further growth expansion and opportunistic M&A activity.
The fair value of the liability component of the Notes was estimated at the issuance date using an equivalent market interest
rate of a similar bond. The net proceeds received from the issuance of the Notes have been split between the financial liability
element and an equity component, representing the fair value of the embedded option to convert the financial liability into
equity of the Group, as follows:
CONVERTIBLE NOTES – INITIAL RECOGNITION OF COMPONENTS
Opening Balance at 1 August 2020
Nominal Value of Convertible Notes issued
Equity Component of the Convertible Notes
Transaction Fees1
Liability Component
Interest on Convertible Notes
Unsecured Non-Current Liabilities
2021
$000
–
200,000
(6,610)
(4,798)
188,592
601
189,193
1
Transaction costs are proportionately allocated, with $4,635,000 allocated to the liability component and $163,000 to the equity component
on initial recognition.
No Notes converted to Ordinary Shares during the 2021 financial year. The number of Ordinary Shares into which the Notes
may convert at 31 July 2021 is 95,238,095.
83
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 18. BORROWINGS (CONTINUED)
B. LEASE LIABILITIES
ACCOUNTING POLICY
Lease Liabilities are recognised, measured, presented and disclosed in accordance with AASB 16 Leases (AASB 16).
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; and
• 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.
84
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 18. BORROWINGS (CONTINUED)
B. LEASE LIABILITIES (CONTINUED)
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.
The maturity profile of Lease Liabilities recognised at the end of the financial year is:
Lease Liabilities are payable as follows:
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:
Within One Year
Later than One Year but not later than Five Years
Later than Five Years
Total Lease Liability
Amounts recognised in the Profit or Loss during the 2021 financial year are:
Depreciation Expense on Right-of-Use Assets
Impairment of Right-of-Use Assets
Interest Expense on Lease Liabilities
Expense relating to Short-Term Leases1
Expense relating to Leases of Low-Value Assets1
Total Expense for Leases recognised in Profit or Loss
1 Amounts recognised within Profit or Loss as Cost of Sales
2021
$000
14,398
52,195
73,072
2020
$000
12,956
20,862
96,545
139,665
130,363
(39,014)
(47,218)
100,651
83,145
10,066
38,977
51,608
100,651
9,256
2,136
5,173
516
51
9,810
9,639
63,696
83,145
11,586
–
3,926
1,455
247
17,132
17,214
Secured Liability
Lease Liabilities are effectively secured as the rights to the leased assets recognised in the Consolidated Financial Statements
revert to the lessor in the event of default.
85
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 18. BORROWINGS (CONTINUED)
C. MOVEMENTS IN INTEREST-BEARING LOANS AND LEASE LIABILITIES
Details of the Group’s exposure to risks arising from current and non-current borrowings are set out on below:
CHANGES ARISING IN LIABILITIES FROM
FINANCING ACTIVITIES
2021
$000
CASH FLOWS
$000
Lease Liabilities
Secured Loans
Unsecured Convertible Notes
Total Liabilities from Financing Activities
CHANGES ARISING IN LIABILITIES FROM
FINANCING ACTIVITIES
Lease Liabilities
Secured Loans
Unsecured Convertible Notes
83,145
355,952
–
439,097
2020
$000
7,790
352,948
–
NON-CASH
CHANGES1
$000
31,382
2,102
2021
$000
100,651
308,054
(6,509)
189,193
26,975
597,898
(13,876)
(50,000)
195,702
131,826
CASH FLOWS
$000
(10,815)
–
–
NON-CASH
CHANGES1
$000
86,170
3,004
–
2020
$000
83,145
355,952
–
Total Liabilities from Financing Activities
360,738
(10,815)
89,174
439,097
1
Total non-cash change in Lease Liabilities during the 2021 financial year includes $37,085,000 of new leases recognised and a reduction
of $4,723,000 (2020: nil) related to a remeasurement of leases during the year. In the 2020 financial year total non-cash changes included
$71,098,000 related to leases on initial adoption of AASB 16 and $15,215,000 related to new leases entered during the period.
The fair value of Interest-Bearing Liabilities materially approximates their respective carrying values as at 31 July 2021.
86
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 18. BORROWINGS (CONTINUED)
D. 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 Interest-Bearing Liabilities, 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 on Drawn Secured Loan
Amortisation of Transaction Costs on Secured Loan
Commitment Fees on Secured Loan
Interest on Unsecured Convertible Notes
Interest Expense on Lease Liabilities
Unwinding of Discount on Provisions
Other Financing Costs
Net Financing Expenses
2021
$000
85
85
2020
$000
689
689
(10,681)
(13,219)
(2,076)
(2,275)
(601)
(5,173)
(3,896)
(1,973)
(2,076)
(2,411)
–
(3,926)
(4,215)
(528)
(26,675)
(26,375)
87
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 18. BORROWINGS (CONTINUED)
E. CONTINGENT LIABILITIES
Details and estimates of maximum amounts of Contingent Liabilities for which no provision is included in the accounts are
as follows:
2021
$000
2020
$000
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.
14,132
15,820
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.1
–
13,669
No losses are anticipated in respect of any of the above Contingent Liabilities.
The Parent Company has given secured guarantees in respect of:
(i) Mining Restoration and Rehabilitation
102,091
231,594
The liability has been recognised by the Group in relation to its rehabilitation obligations.
(ii) Statutory body suppliers, financiers and various other entities
14,132
29,489
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 15(d) there are no other contingent liabilities for the Group at 31 July 2021.
1
During the period to 31 July 2021 the Participants of the Bengalla Joint Venture have assumed responsibility for providing guarantees directly
to rail and port suppliers.
F. LINES OF CREDIT
Unrestricted access was available at 31 July 2021 to the following lines of credit available of $300,000,000
(2020: $300,000,000):
2021 $000
2020 $000
183,777
116,223
247,414
52,586
Guarantee Facility Utilised
Guarantee Facility Unutilised
88
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 19. 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.
Current Assets
Forward Foreign Exchange Contracts
Non-Current Assets
Forward Foreign Exchange Contracts
2021
$000
2020
$000
9,746
45,852
–
9,746
8,912
54,764
89
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 19. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
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 31 July 2021, Foreign Exchange Contracts represented assets with a fair value of $9,746,000 (2020: $54,764,000) and
liabilities of nil (2020: nil). 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
AVERAGE
EXCHANGE RATE
2021
$000
2020
$000
2021
CENTS
2020
CENTS
46,319
–
–
46,319
225,630
202,736
46,319
474,685
0.5829
–
–
0.6648
0.6215
0.5829
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 31 July 2021 $46,319,000
(2020: $474,685,000) was receivable relating to Forward Foreign Exchange Contracts.
90
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 20. 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
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)
2021 Interim Dividend at 4.00 cents per share – 100% franked (tax rate – 30%)
(paid on 5 May 2021)
Total Dividends Paid
B. PROPOSED DIVIDENDS
2021
$000
–
–
2020
$000
74,854
49,902
33,298
33,298
–
124,756
In addition to the above Dividends, the Directors have declared a Final Dividend of 7.0 cents (2020: nil). The Dividend is fully
franked based on Tax paid at 30 per cent. The proposed Dividend expected to be paid on 9 November 2021. The declared
Final Dividend has not been recognised as a liability at 31 July 2021 (2020: nil.)
C. FRANKED DIVIDENDS
The franked portions of the Final Dividend recommended after 31 July 2021 will be franked out of existing Franking Credits.
2021
$000
2020
$000
Franking Credits available for subsequent financial years based on a tax rate of 30% (2020: 30%)
490,626
508,505
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 impact on the franking account of the Dividend recommended by the Directors
after the 2021 financial year end, but not recognised as a liability at 31 July 2021, was a reduction in the franking account
of $14,270,000.
D. DIVIDEND REINVESTMENT PLANS
There were no Dividend Reinvestment Plans in operation at any time during or since the end of the financial year.
91
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 21. 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 Shareholder 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. Every Shareholder 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. PERFORMANCE RIGHTS
Information relating to the Performance Rights Plan, including details of rights granted, vested and the amount lapsed during
the financial year and Performance Rights outstanding at the end of the financial year, is set out in Note 27.
C. SHARE CAPITAL
Issued and Paid-Up Capital
D. MOVEMENTS IN SHARE CAPITAL
2021 NUMBER
OF SHARES
832,357,082
2021
$000
97,536
2020 NUMBER
OF SHARES
2020
$000
831,708,318
96,692
DETAILS
NUMBER
OF SHARES
ISSUE
PRICE
$000
DATE
2021
1 August 2020
1 August 2020
96,692
–
844
97,536
96,315
–
377
96,692
Opening Balance
831,708,318
Vesting of Performance Rights
648,764
$0.0000
31 August 2020
Share-Based Payment Transactions
31 July 2021
Balance
832,357,082
2020
1 August 2019
1 August 2019
31 July 2020
31 July 2020
Opening Balance
831,266,603
Vesting of Performance Rights
441,715
$0.0000
Share-Based Payment Transactions
Balance
–
831,708,318
E. CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are to maintain the Company's ability to continue as a going concern,
so that they can continue to provide returns for shareholders.
92
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information
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93
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021
21. EQUITY (CONTINUED)
F. RESERVES (CONTINUED)
Nature and Purpose of Reserves
Capital Profits
Equity Investments
Revaluation
Hedging
Share-Based Payments
This reserve represents amounts allocated from retained profits that were profits of a capital
nature.
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.
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 per cent
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 19. 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 Performance 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
Performance Right, 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 Performance Right.
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.
Convertible Notes
This reserve represents the equity component of convertible notes (see note 18 A (ii)).
G. RETAINED PROFITS
Carrying Amount at Beginning of Year
Net Profit/(Loss) after Income Tax
Dividends Paid
Carrying Amount at End of Year
22. FINANCIAL RISK MANAGEMENT
ACCOUNTING POLICY
NOTES
2021
$000
2020
$000
1,586,135
1,867,674
79,350
(156,783)
20(a)
(33,298)
(124,756)
1,632,187
1,586,135
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.
94
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 22. FINANCIAL RISK MANAGEMENT (CONTINUED)
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
Financial Assets
2021
Cash and Cash Equivalents
Trade and Other Receivables
Equity Investments
Derivative Financial
Instruments
2020
Cash and Cash Equivalents
Trade and Other Receivables
Equity Investments
Derivative Financial
Instruments
Financial Liabilities
2021
Lease Liabilities
Trade and Other Payables
Secured Loans
Unsecured Loans
2020
Lease Liabilities
Trade and Other Payables
Secured Loans
Unsecured Loans
16
7
17
19
16
7
17
19
18
8
18
18
18
8
18
18
–
–
229
–
229
–
–
193
–
193
–
–
–
–
–
–
–
–
–
–
–
–
–
9,746
9,746
–
–
–
54,764
54,764
–
–
–
–
–
–
–
–
–
–
TOTAL
$000
424,663
109,575
229
9,746
424,663
100,359
–
–
–
9,216
–
–
525,022
9,216
544,213
70,377
48,883
–
–
119,260
100,651
78,786
308,054
189,193
676,684
83,145
81,999
355,952
–
521,096
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
70,377
48,883
193
54,764
174,217
100,651
78,786
308,054
189,193
676,684
83,145
81,999
355,952
–
521,096
95
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 22. 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 framework is to hedge anticipated transactions (export coal sales) in US dollars for the
subsequent year as deemed necessary. 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
2021
US
$000
50,768
47,344
27,000
5,020
2020
US
$000
17,647
12,107
303,000
453
Commodity hedge contracts are used to manage price risk. Senior management is responsible for managing exposures
in pricing by using commodity hedge contracts as deemed necessary. 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 2021, had the Australian dollar weakened/
strengthened by 10 per cent against the US dollar with all other variables held constant, the Group's post-tax profit for the
year would have increased/(decreased) by $8,026,000/($9,809,000) (2020: $2,566,000/($3,136,000)), mainly as a result
of foreign exchange gains/losses on translation of US dollar receivables and Cash and Cash Equivalents balance as detailed
in the above table. The Group's equity as at balance date would have increased/(decreased) by the same amounts.
Based on the forward exchange contracts held at 31 July 2021, had the Australian dollar weakened/strengthened by
10 per cent against the US dollar with all other variables held constant, the Group's equity would have increased/(decreased)
by $3,324,000/($4,062,000) (2020: $38,137,000/($46,608,000)). 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 $31,000/($31,000) (2020: $26,000/($26,000)). The analysis is based on the assumption that the
equity instrument had increased/decreased by 10 per cent 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 22 (e).
96
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 22. FINANCIAL RISK MANAGEMENT (CONTINUED)
B. CREDIT RISK
Credit risk is managed on a Group basis. Credit risk arises from Cash and Cash Equivalents, Derivative Financial Instruments
and Deposits with Banks and Financial Institutions, as well as credit exposure to export and domestic customers, including
outstanding receivables and committed transactions. The Group has no significant concentrations of credit risk. The Group
has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history.
The majority of customers, both export and domestic, have long-term relationships with the Group and sales are secured
with long-term supply contracts. Sales are secured by letters of credit when deemed appropriate. Derivative counterparties
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 24). 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 and Other Receivables
Cash at Bank
Derivative Financial Instruments
C. LIQUIDITY RISK
NOTES
16
19
2021
$000
109,575
424,663
9,746
2020
$000
48,883
70,377
54,764
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 and unsecured loan facilities and leases detailed in Note
18. The maturity of these arrangements are shown on the next page.
D. MATURITY OF FINANCIAL LIABILITIES
The maturity groupings of Derivative Financial Instruments are detailed in Note 19.
Trade Payables and Accruals (Note 8) are normally settled within 45 days of recognition. The Group’s Borrowings (Note 18)
comprise Lease Liabilities and Secured and Unsecured Loans.
The Group's Secured Loan as outlined in Note 18 is an amortising facility, with a variable interest rate, reducing by a minimum
of $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.
Lease liabilities are fixed rate leases with a weighted average interest rate of 4.45 per cent and are payable over a period
of one to 21 years.
Unsecured convertible notes represents the liability component of Convertible Notes (net of transaction costs) with a coupon
rate of 2.75 per cent and option premium of 3.5 per cent. Interest is payable semi-annually over a five year period.
97
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 22. FINANCIAL RISK MANAGEMENT (CONTINUED)
D. MATURITY OF FINANCIAL LIABILITIES (CONTINUED)
The table below details the contractual cash flows of Lease Liabilities and Unsecured Convertible Notes.
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
CARRYING
AMOUNT
$000
2021
Lease Liabilities
Unsecured Convertible Notes
2020
Lease Liabilities
7,060
2,750
7,338
2,750
14,726
37,469
73,072
139,665
100,651
5,500
216,500
–
227,500
189,193
5,720
7,236
7,375
13,487
96,545
130,363
83,145
Unsecured Convertible Notes
–
–
–
–
–
–
–
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 per cent higher/lower and all other variables were held constant, the Group's profit after tax for
the year ended 31 July 2021 would increase/(decrease) by $4,340,000/($4,340,000) (2020: $5,040,000/($5,040,000)).
F. FAIR VALUE MEASUREMENTS
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).
98
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 22. FINANCIAL RISK MANAGEMENT (CONTINUED)
F. FAIR VALUE MEASUREMENTS (CONTINUED)
The following table presents the Group's assets and liabilities measured and recognised at fair value as at 31 July 2021 and
31 July 2020.
2021
Assets
Derivatives Used for Hedging
Trade Receivables – provisionally priced
Equity Investments
Total assets
2020
Assets
Derivatives Used for Hedging
Equity Securities
Total assets
LEVEL 1
$000
LEVEL 2
$000
TOTAL
$000
–
–
229
229
–
193
193
9,746
9,216
–
9,746
9,216
229
18,962
19,191
54,764
54,764
–
193
54,764
54,957
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.
99
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 23. INTERESTS IN OTHER ENTITIES
A. SUBSIDIARIES
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 29.
B. JOINT ARRANGEMENTS
Accounting Policy
Under AASB 11 Joint Arrangements, investments in joint arrangements are classified as either Joint Operations
or Joint Ventures. The classification depends on the contractual rights and obligations of each investor, rather than
the legal structure of the joint arrangement.
Joint Operations
The Group recognises its direct right to the assets, liabilities, revenues and expenses of Joint Operations and
its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated
in the Consolidated 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 per cent participating interest in this Joint Operation and is entitled to
90 per cent 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
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 Consolidated Financial Statements on the appropriate lines.
Bengalla Joint Venture
A subsidiary of New Hope Corporation Limited holds an 80 per cent interest in the Bengalla thermal coal mine in
New South Wales. This is an unincorporated Joint Venture that is operated by Bengalla Mining Company Pty Ltd
(BMC). BMC is proportionately owned by the participants.
100
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 24. COMMITMENTS
A. CAPITAL COMMITMENTS
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Property Plant and Equipment
Within One Year
B. LEASE COMMITMENTS
(i) NON-CANCELLABLE LEASES AS LESSOR
2021
$000
2020
$000
11,350
19,091
On 30 May 2021 the Group entered a sub-lease arrangement for its head office building for a period of five years, with an
option to extend for a further four years or alternatively with an option to extend until one day prior to the expiry of the head
lease on 31 March 2030. This sublease lease arrangement commences on 18 October 2021, with lease payments receivable
monthly and annual rent review escalation clauses included in the lease terms.
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. Refer to Note 15(c).
25. EVENTS OCCURRING AFTER THE REPORTING PERIOD
A. ASSETS CLASSIFIED AS HELD FOR SALE
The Group reclassified land with a net book value of $7,115,000 from Property, Plant and Equipment to Assets Classified
as Held for Sale during the 2021 financial year. The sale completed on 9 August 2021. A gain of $5,254,000 was recorded
on sale of this land and will be recognised in the Statement of Comprehensive Income in the 2022 financial year.
B. LENTON/BURTON
On 2 August 2021 the Group entered into a Binding Term Sheet to divest 100 per cent of the shares in New Lenton Coal
Pty Ltd (which currently holds a 90 per cent interest in the Lenton Joint Venture) to Bowen Coking Coal Limited (ASX: BCB)
for an upfront payment of $20,000,000 plus potential milestone and royalty payments, up to a value of $77,500,000. The
transaction is subject to parties agreeing and entering into formal transaction documents and certain other conditions being
satisfied, and as such was not classified as held for sale at 31 July 2021.
101
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 26. 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 2021 owned 36.95 per cent
(2020: 49.98 per cent) 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
Ms J.E. McGill AO
Mr T.C. Millner
Mr I.M. Williams
Mr W.H. Grant OAM1
Executive Directors
Mr S.O. Stephan2
1 Mr W.H. Grant's resignation from the Board was effective 17 November 2020.
2 Mr S.O. Stephan's resignation from the Board was effective 31 August 2020.
(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
POSITION
EMPLOYER
Mr R.H. Schmidt1
Chief Executive Officer
Mr R.J. Bishop2
Chief Financial Officer
New Hope Corporation Limited
New Hope Corporation Limited
Mr S.O. Stephan
Managing Director and Chief Executive Officer
New Hope Corporation Limited
Mr A.L. Boyd3
Chief Operating Officer
Mr B.C. Armitage4
Chief Development Officer
New Hope Corporation Limited
New Hope Corporation Limited
1
2
Mr R.H. Schmidt was appointed CEO on September 2021 and considered KMP from this date.
Mr R.J. Bishop was appointed as Acting CFO for an interim period from 20 July 2020 to 22 October 2020, on which date he was appointed
CFO. He is considered KMP from 1 August 2020.
3 Mr A.L. Boyd ceased as KMP on 31 December 2021.
4 Mr B.C. Armitage ceased as KMP on 27 November 2021.
102
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 26. RELATED PARTY TRANSACTIONS (CONTINUED)
B. KEY MANAGEMENT PERSONNEL (CONTINUED)
(iii) KEY MANAGEMENT PERSONNEL COMPENSATION1
Short-Term Employee Benefits
Long-Term Employee Benefits
Post Employment Benefits
Termination Payment
Share-Based Payment
2021
$
2020
$
4,497,536
5,473,694
3,313
154,381
919,357
15,851
186,040
–
(184,202)
176,093
5,390,385
5,851,678
1
Compensation for the 2020 financial year includes compensation paid to Ms S.J. Palmer and Mr M.J. Busch who were considered KMP in the
2020 financial year. Ms S.J. Palmer ceased as KMP on 25 November 2019 and Mr M.J. Busch ceased as KMP on 31 July 2020.
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)
2021
$
–
–
2020
$
92,400
20,765
13,883,857
62,354,463
238
293,996
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 resigned
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 28 to 38.
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 2021
(2020: nil).
E. TERMS AND CONDITIONS
Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.
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 2021 and 2020 financial years. 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.
103
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 27. SHARE-BASED PAYMENTS
ACCOUNTING POLICY
Share-based compensation benefits are provided to employees via the New Hope Corporation Limited Employee
Performance Rights Share Plan.
The fair value of Performance 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 Performance Rights. Performance 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 Performance 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
Performance Rights at grant date is independently determined using a Black-Scholes pricing model that takes
into account the exercise price, the term of the Performance Right, the vesting criteria, the impact of dilution, the
non-tradeable nature of the Performance Right, 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 Performance Right.
The fair value of the Performance Rights 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 Performance Rights that are expected to become exercisable. At each reporting date, the Group
revises its estimate of the number of Performance Rights 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.
Performance 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.
Performance Rights are granted for no consideration. Performance 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 Performance 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 $72,000 (2020: ($691,000)).
104
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 27. SHARE-BASED PAYMENTS (CONTINUED)
Performance Rights
Set out below is a summary of Performance Rights granted under the plan:
As at 1 August
Granted during the year
Lapsed during the year
Forfeited during the year
2021
2020
AVERAGE
PRICE PER
SHARE
NUMBER OF
PERFORMANCE
RIGHTS
AVERAGE
PRICE PER
SHARE
NUMBER OF
PERFORMANCE
RIGHTS
$2.279
1,508,091
$2.281
1,585,023
$1.400
$1.290
547,225
$2.150
1,195,431
(35,865)
$2.160
(26,532)
$1.159
(823,462)
$2.160
(804,116)
Vested and Exercised during the year
$1.290
(648,764)
$2.160
(441,715)
As at 31 July
$1.995
547,225
$2.279
1,508,091
The weighted average share price at the date of vesting of Performance Rights during the 2021 year was $1.34 (2020: $2.54).
Performance Rights outstanding at the end of the year have the following vesting date and fair value at grant date:
GRANT DATE
26 Mar 2018
29 Mar 2019
29 Nov 2019
29 Nov 2019
29 Nov 2020
Total
VESTING DATE
1 Aug 2020
1 Aug 2021
1 Aug 2022
1 Aug 2023
1 Aug 2024
PERFORMANCE RIGHTS
VALUE OF PERFORMANCE
RIGHT AT GRANT DATE
2021
$1.232
$1.472
$0.873
$0.994
–
–
–
–
$0.760
547,225
2020
684,628
215,414
300,611
307,438
–
547,225
1,508,091
Weighted average remaining contractual life of Performance Rights outstanding at end of period
3.0 years
1.2 years
105
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 28. PARENT ENTITY DISCLOSURES
ACCOUNTING POLICY
The financial information for the Parent entity, New Hope Corporation Limited, has been prepared on the same basis
as the Consolidated Financial Statements, except as set out below.
Investments in Subsidiaries, Associates and Joint Ventures
Investments in Subsidiaries, Associates and Joint Ventures are accounted for at cost in the Financial Report of
New Hope Corporation Limited. Dividends received from Subsidiaries are recognised in the Parent entity’s Income
Statement rather than being deducted from the carrying amount of these investments.
A. SUMMARY FINANCIAL INFORMATION
The individual Financial Statements for the Parent entity show the following aggregate amounts:
2021
$000
2020
$000
759,271
312,067
799,281
1,179,649
1,558,552
1,491,716
483,088
507,393
990,481
489,855
376,133
865,988
97,536
96,692
573
6,610
463,352
568,071
(31,041)
(31,041)
1,345
–
527,691
625,728
(48,412)
(48,412)
Statement of Financial Position
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Non-Current Liabilities
Total Liabilities
Shareholders' Equity
Contributed Equity
Reserves
Share-Based Payment
Other Reserves
Retained Earnings
Loss for the year
Total Comprehensive Loss
106
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 28. PARENT ENTITY DISCLOSURES (CONTINUED)
B. GUARANTEES ENTERED INTO BY PARENT ENTITY
Bank Guarantees issued in relation to rehabilitation, statutory body suppliers and various other
entities.
2021
$000
2020
$000
116,223
247,414
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 18(e).
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.
2021
$000
2020
$000
116,223
247,414
–
13,669
D. CONTRACTUAL COMMITMENTS FOR THE ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT
As at 31 July 2021, the Parent entity had contractual commitments for the acquisition of Property, Plant or Equipment totalling
nil (2020: nil).
107
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 29. DEED OF CROSS GUARANTEE
A number of entities within the Group have entered into a Deed of Cross Guarantee. New Hope Corporation Limited,
Jeebropilly Collieries Pty Ltd, Acland Pastoral Co. Pty Ltd, New Oakleigh Coal Pty Ltd, New Acland Coal Pty Ltd, New Lenton
Coal Pty Ltd, Andrew Wright Holdings Pty Ltd, Arkdale Pty Ltd and Queensland Bulk Handling Pty Ltd are parties to a Deed
of Cross Guarantee under which each company guarantees the debts of the others. By entering into the deed, the wholly
owned entities have been relieved from the requirement to prepare a Financial Report and Directors' Report under Class
Order 98/1418 (as amended) issued by 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 2021 for the Closed Group:
2021
$000
2020
$000
185,907
594,611
17
50
185,924
594,661
(122,665)
(307,426)
(107,829)
(78,607)
(11,429)
(10,310)
(20,382)
(26,354)
(2,620)
15,946
(43,030)
(347,116)
(122,031)
(159,206)
36,584
48,242
(85,447)
(110,964)
18
15,320
8,521
8,539
(6,782)
8,538
(76,908)
(102,426)
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
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 Income/(Loss) for the year
108
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 29. DEED OF CROSS GUARANTEE (CONTINUED)
B. STATEMENT OF FINANCIAL POSITION
Set out below is a Statement of Financial Position as at 31 July 2021 of the Closed Group:
Current Assets
Cash and Cash Equivalents
Receivables
Derivative Financial Instruments
Inventories
Assets Classified as Held for Sale
Current Tax Assets
Total Current Assets
Non-Current Assets
Receivables
Other Financial Assets
Property, Plant and Equipment
Intangible Assets
Exploration and Evaluation Assets
Deferred Tax Assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
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
2021
$000
2020
$000
395,532
396,394
404
32,853
3,000
–
828,183
47,916
269,443
8,431
22,501
–
15,841
364,132
523,006
964,195
52,620
48,837
352,609
418,867
6,932
43,897
54,611
7,341
40,724
59,512
1,033,675
1,539,476
1,861,858
1,903,608
25,503
4,276
24,528
36,900
91,207
560,865
130,824
691,689
782,896
27,922
8,769
–
33,936
70,627
427,161
128,175
555,336
625,963
1,078,962
1,277,645
97,536
35,701
96,692
35,700
945,725
1,145,253
1,078,962
1,277,645
109
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 30. 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 assurance and agreed upon procedures under other legislation or contractual arrangements
Group
Other Services
Sustainability and Other Advisory Services
2021
$
2020
$
538,669
127,667
666,336
105,000
105,000
529,420
121,067
650,487
–
–
51,500
51,500
113,416
113,416
822,836
763,903
110
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information 31. OTHER ACCOUNTING POLICIES
A. FOREIGN CURRENCY TRANSLATION
(i) FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the Financial Statements of each of the Group's entities are measured using the currency of the primary
economic environment in which the 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.
(ii) 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.
(iii) 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 Other Comprehensive Income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities,
and of Borrowings and other Financial Instruments designated as hedges of such Investments, are recognised in Other
Comprehensive Income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid,
the associated exchange differences are reclassified to the Statement of Comprehensive Income, as part of the gain or loss
on sale.
B. GOODS AND SERVICES TAX (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.
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NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther InformationNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021 31. OTHER ACCOUNTING POLICIES (CONTINUED)
C. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED
The following standards, amendments to standards and interpretations have been identified as those which may impact
the Group in the period of initial application, are effective for annual periods beginning after 1 August 2021:
(i) AMENDMENTS TO IAS 1 – CLASSIFICATION OF LIABILITIES AS CURRENT OR NON-CURRENT
The amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence
at the end of the reporting period, specify that classification is unaffected by expectations about whether an entity will
exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the
end of the reporting period, and introduce a definition of ‘settlement’ to make clear that settlement refers to the transfer
to the counterparty of cash, equity instruments, other assets or services. The amendments are applied retrospectively for
annual periods beginning on or after 1 January 2023, with early application permitted. The potential effects on adoption
of the amendment are yet to be determined.
(ii) ANNUAL IMPROVEMENTS TO IFRS STANDARDS 2018–2020
IFRS 9 Financial Instruments
The amendment clarifies that in applying the ‘10 per cent’ test to assess whether to derecognise a financial liability, an entity
includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either
the entity or the lender on the other’s behalf. The amendment is applied prospectively to modifications and exchanges that
occur on or after the date the entity first applies the amendment. The amendment is effective for annual periods beginning
on or after 1 January 2022, with early application permitted. The Group has commenced its consideration of the potential
effects on adoption of the Annual Improvement. The potential effects on adoption of the annual improvement are yet to
be determined.
112
2021 ANNUAL REPORT NEW HOPE GROUPNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2021Operations ReviewDirectors’ ReportFinancial ReportOther Information DIRECTORS' DECLARATION
In the Directors' opinion:
a) the financial statements and notes set out on pages 43 to 112 are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements
(ii) giving a true and fair view of the consolidated entity's financial position as at 31 July 2021 and of their performance,
for the financial year ended on that date
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 47 confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section
295A of the Corporations Act 2001.
At the date of this declaration, the Company is within the class of companies affected by ASIC Class Order 98/1418. The
nature of the deed of cross guarantee is such that each company which is party to the deed guarantees to each creditor
payment in full of any debt in accordance with the deed of cross guarantee. In the Directors’ opinion, there are reasonable
grounds to believe that the Company and the companies to which the ASIC Class Order applies, as detailed in Note 29 to the
financial statements will, as a group, be able to meet any obligations or liabilities to which they are, or may become, subject by
virtue of the deed of cross guarantee.
This declaration is made in accordance with a resolution of the Directors.
R.D. Millner
Director
Sydney, 20 September 2021
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NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther Information
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Level 23, Riverside Centre
123 Eagle Street
Brisbane, QLD, 4000
Australia
Phone: +61 7 3308 7000
www.deloitte.com.au
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Level 23, Riverside Centre
123 Eagle Street
Brisbane, QLD, 4000
Deloitte Touche Tohmatsu
Australia
ABN 74 490 121 060
Level 23, Riverside Centre
Phone: +61 7 3308 7000
123 Eagle Street
www.deloitte.com.au
Brisbane, QLD, 4000
Australia
INDEPENDENT AUDITOR’S REPORT
to the Members of New Hope Corporation Limited
Independent Auditor’s Report to the Members of New Hope
Corporation Limited
Phone: +61 7 3308 7000
www.deloitte.com.au
Opinion
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Independent Auditor’s Report to the Members of New Hope
Corporation Limited
Independent Auditor’s Report to the Members of New Hope
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 2021, the consolidated statement of
Corporation Limited
comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
the year then ended, and notes to the financial statements, including a summary of significant accounting policies and
other explanatory information, and the directors’ declaration.
Opinion
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
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 2021, the consolidated statement of
Opinion
giving a true and fair view of the Group’s financial position as at 31 July 2021 and of its financial performance
(i)
comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for
for the year then ended; and
We have audited the financial report of New Hope Corporation Limited (the “Company”) and its subsidiaries (the “Group”)
the year then ended, and notes to the financial statements, including a summary of significant accounting policies and
which comprises the consolidated statement of financial position as at 31 July 2021, the consolidated statement of
other explanatory information, and the directors’ declaration.
(ii)
comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
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.
(i)
giving a true and fair view of the Group’s financial position as at 31 July 2021 and of its financial performance
Basis for Opinion
for the year then ended; and
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
complying with Australian Accounting Standards and the Corporations Regulations 2001.
(ii)
giving a true and fair view of the Group’s financial position as at 31 July 2021 and of its financial performance
(i)
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
for the year then ended; and
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
(ii)
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial
Basis for Opinion
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
Basis for Opinion
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial
Key Audit Matters
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the
financial report for the current period. These matters were addressed in the context of our audit of the financial report
directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
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
Key Audit Matters
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these 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 organisation.
New Hope Group 2021 Annual Financial Report
77
114
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
New Hope Group 2021 Annual Financial Report
77
New Hope Group 2021 Annual Financial Report
77
2021 ANNUAL REPORT NEW HOPE GROUP
INDEPENDENT AUDITOR’S REPORT
to the Members of New Hope Corporation Limited
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr
CCaarrrryyiinngg vvaalluuee ooff nnoonn--ccuurrrreenntt aasssseettss
Our audit procedures included, but were not limited to:
Refer to notes 11, 12, 13 and 14 of the financial
statements.
As at 31 July 2021 the Group has property, plant
and equipment (PPE) of $1,952 million,
exploration and evaluation (E&E) assets of $106
million, and intangible assets of $77 million, which
have been allocated across the Group’s cash
generating units (“CGUs”) and areas of interest.
The Group performed an assessment for
indicators of impairment for all CGUs, and where
required, detailed impairment assessments for
three. As disclosed in notes 3 and 14, the Group
has consequently recorded an impairment charge
of $45 million made up of $43 million on PPE and
$2 million on E&E assets.
Recoverable amounts of the CGUs have been
calculated using fair value less costs of disposal
(including commodity resource multiples) 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 14, a specific area of
judgement during the year has been the Group’s
assessment of the impact of the legal environment
and continued delays in approval timelines relating
to the New Acland Stage 3 mine lease application
on the recoverability of the assets of 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 of the three CGUs
assessed for impairment;
Engaging our valuation specialists to assess 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 impairment 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 board
approved budget;
In relation to the Queensland Coal Mining Operations
CGU:
•
o Evaluating management’s assessment of the
impact of the changes to the project’s legal
and regulatory environment and timelines;
o Enquiring of management as to the status of
the overall mine lease application and land
court processes; and
o 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;
• Verifying the mathematical accuracy of management’s
modelling;
• 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 11, 12, 13 and 14 to the financial statements.
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NEW HOPE GROUP 2021 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
to the Members of New Hope Corporation Limited
RReehhaabbiilliittaattiioonn pprroovviissiioonn
Our audit procedures included, but were not limited to:
Refer to note 15 of the financial statements.
As at 31 July 2021 the Group has provisions for
mining restoration and rehabilitation of $268
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.
•
•
Evaluating management’s process and assessing the
design and implementation of key controls
management have in place for estimating the
rehabilitation provisions;
Evaluating the independence, competence and
objectivity of management’s expert and challenging
the reasonableness of the assumptions used to
calculate 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 obtaining an understanding of the
relevant legislative requirements in relation 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 15 to the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the Directors’ Report,
Shareholder Information and 2021 Coal Resources and Reserves, which we obtained prior to the date of this auditor’s
report, and also includes the following information which will be included in the Group’s annual report (but does not
include the financial report and our auditor’s report thereon): Chairman’s Review, Chief Executive Officer’s Review and
Tax Contribution Report, which is expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information identified above
and, in doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there
is a material misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
When we read the Chairman’s Review, Chief Executive Officer’s Review and Tax Contribution Report, if we conclude that
there is a material misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is
free from material misstatement, whether due to fraud or error.
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79
2021 ANNUAL REPORT NEW HOPE GROUP
INDEPENDENT AUDITOR’S REPORT
to the Members of New Hope Corporation Limited
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
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NEW HOPE GROUP 2021 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
to the Members of New Hope Corporation Limited
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.
RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 22 of the Directors’ Report for the year ended 31 July
2021.
38
28
In our opinion, the Remuneration Report of New Hope Corporation Limited, for the year ended 31 July 2021, 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
SStteepphheenn TTaarrlliinngg
Partner
Chartered Accountants
Brisbane, 20 September 2021
118
New Hope Group 2021 Annual Financial Report
81
2021 ANNUAL REPORT NEW HOPE GROUPOperations ReviewDirectors’ ReportFinancial ReportOther Information
SHAREHOLDER INFORMATION
ORDINARY SHAREHOLDINGS
As at 14 September 2021 there were 12,850 holders of ordinary shares in the Company.
Voting entitlement is one vote per fully paid ordinary share.
RANGE OF UNITS – ORDINARY SHARES1
NUMBER OF
SHAREHOLDERS
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Holding less than a marketable parcel1
1
Information as at 31st August 2021.
FULLY PAID
ORDINARY
SHARES
1,707,067
13,223,047
17,903,174
75,188,493
3,190
4,513
2,363
2,687
203
724,335,301
12,956
832,357,082
599
53,322
NUMBER OF
PERFORMANCE
RIGHTS
HOLDERS
PERFORMANCE
RIGHTS
–
–
–
–
2
2
–
–
–
–
547,225
547,225
119
NEW HOPE GROUP 2021 ANNUAL REPORT Operations ReviewDirectors’ ReportFinancial ReportOther Information SHAREHOLDER INFORMATION
ORDINARY SHAREHOLDINGS (CONTINUED)
The names of substantial shareholders as disclosed in substantial shareholder notices received by the Company:
SHAREHOLDER
Washington H Soul Pattinson and Company Limited
NUMBER
OF SHARES
%
331,696,418
39.85%
20 largest shareholders as disclosed on the share register as at 14 September 2021
Washington H Soul Pattinson and Company Limited
313,096,418
37.62%
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
HSBC Custody Nominees (Australia) Limited – A/C 2
CS Third Nominees Pty Limited
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