National HealthCare Corporation
Annual Report 2022

Plain-text annual report

2022 ANNUAL REPORT CONTENTS Acknowledgement of Country New Hope Group acknowledges the Traditional Owners of Country throughout Australia and First Nations people in the locations in which we operate our business. We pay our respects to Elders past and present. 2 2022 ANNUAL REPORT NEW HOPE GROUP2022 Highlights 02Chairman’s Review 04Chief Executive Officer’s Review 06Favourable Market and Pricing Dynamics 08Our Operations 10Directors’ Report 12Auditor’s Independence Declaration 51 Tax Contribution Report 52Sustainability Report 54Financial Report 72Directors’ Declaration 141Independent Auditor’s Report 142Shareholder Information 1462022 Resources and Reserves 148Corporate Directory 152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. 01 NEW HOPE GROUP 2022 ANNUAL REPORT 01 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT2022 HIGHLIGHTS FULL YEAR DIVIDEND 86c PER SHARE TOTAL SHAREHOLDER RETURN UNDERLYING EBITDA (BEFORE NON-REGULAR ITEMS)1 147% $1,577 MILLION 330% INCREASE CASH GENERATED FROM OPERATIONS REALISED COAL PRICE NET ASSETS $1,139 MILLION $282 / TONNE $2,316 MILLION 285% INCREASE 178% INCREASE 32% INCREASE 02 2022 ANNUAL REPORT NEW HOPE GROUP OPERATIONS REVIEW DIRECTORS’ REPORT TAX CONTRIBUTION REPORT SUSTAINABILITY REPORT FINANCIAL REPORT OTHER INFORMATION SAFETY: TRIFR2 2.61 GOVERNMENT CONTRIBUTIONS SPONSORSHIPS AND DONATIONS $626MILLION 52% IMPROVEMENT 353% INCREASE THERMAL COAL PRICES (US$/t) 450 400 350 300 250 200 150 100 50 0 $1.03MILLION 206% INCREASE gc NewC API-5 Jan 21 Feb 21 Mar 21 Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 Oct 21 Nov 21 Dec 21 Jan 22 Feb 22 Mar 22 Apr 22 May 22 Jun 22 Jul 22 Aug 22 1 Underlying Earnings before Interest, Tax and Depreciation and Amortisation (EBITDA) is a non-IFRS measure, and has not been audited by Deloitte. 2 Total Recordable Injury Frequency Rate – total injuries recorded per million hours worked. NEW HOPE GROUP 2022 ANNUAL REPORT 03 CHAIRMAN’S REVIEW The Company delivered record earnings during the 2022 financial year, based on a solid operating performance in spite of the continuing challenges of COVID-19 and the impacts of extreme wet weather on production and logistics at Bengalla, and Newcastle coal prices reaching all-time highs. While production at our flagship Bengalla operations remained stable, saleable coal volumes reduced during the year as New Acland was safely transitioned into care and maintenance, awaiting approvals for the Stage 3 development. From 31 July 2021, Newcastle coal prices (gC NEWC 6000) began trending upwards from approximately US$150 per tonne. Following conflict in Ukraine and concerns about global energy security, the Newcastle index price for the fourth quarter of the financial year reached a record of US$404.99. Demand for high quality, low emission thermal coal remains strong and is expected to be sustained with the ban on Russian coal taking effect in August 2022. The Company delivered an impressive full year profit before tax and non-regular items of $1,421.6 million and a closing share price on 31 July 2022 of $4.39 which is an increase of 120 per cent on the 2021 financial year. The full year dividend to shareholders was 86.0 cents per share, after the Board declared a final dividend of 31.0 cents per share and a special dividend of 25.0 cents per share, fully franked. The combination of capital growth and dividends equates to a Total Shareholder Return for the year of 147 per cent. Strengthening operating cashflows throughout the year allowed the Company to fully repay its Debt Facility and terminate the undrawn Debt Facility before its maturity in November 2023. We retain a Credit Support facility of $300 million, which continues to be utilised to support the Company’s bank guarantees, including for mining restoration and rehabilitation obligations at Bengalla. Cancelling the Debt Facility is an important step in our broader capital strategy to maximise long-term investor value and alignment to our business strategy. The Board and management team continue to explore opportunities to expand and diversify the Company’s operating portfolio, to support sustained positive returns for shareholders. At the end of the 2022 financial year, New Hope acquired a 15 per cent interest in Malabar Resources Limited for $94.4 million. This strategic investment diversifies our asset base with an exposure to metallurgical coal from Malabar’s flagship Maxwell Mine which commenced construction in May 2022 and has an estimated life of more than 25 years. The transaction aligns with our strategy to invest surplus cash into coal assets that are low on the cost curve and have long approved mine lives. Operating in a responsible and sustainable way is fundamental to maintaining our social licence to operate and contributes to the long-term value of our business. Since we first reported on sustainability issues in our 2017 Annual Report, we have worked to improve the quality of our sustainability reporting each year, endeavouring to provide further transparency about the environmental, social and governance matters which are most relevant to our stakeholders. “ The Company delivered an impressive full year profit before tax and non-regular items of $1,421.6 million.” 04 2022 ANNUAL REPORT NEW HOPE GROUP OPERATIONS REVIEW DIRECTORS’ REPORT TAX CONTRIBUTION REPORT SUSTAINABILITY REPORT FINANCIAL REPORT OTHER INFORMATION This year we have brought our Sustainability Report back into the pages of this Annual Report. The Sustainability Report continues to provide transparent information about the way we operate and the role that we play in the communities in which we work and live. Record coal prices undoubtedly benefited the Company’s financial performance, but the positive result would not have been achieved without disciplined operational management and a capable and resilient workforce. On behalf of the Board, I would like to thank the management and staff for their continuing efforts. Thank you also to my fellow Directors for their guidance, and to our shareholders for your continuing support for the Company. R.D. Millner Chairman NEW HOPE GROUP 2022 ANNUAL REPORT 05 05 NEW HOPE GROUP 2022 ANNUAL REPORTCHIEF EXECUTIVE OFFICER’S REVIEW Solid operating performance at our cornerstone operation, Bengalla, allowed the Company to capitalise on record coal prices and deliver an impressive result for shareholders. I am pleased to report that safety performance across our operations continues to improve. The All Injury Freqeuency Rate (AIFR) was adopted as a primary safety performance metric during the year, to recognise both short and long-term risks that impact wellbeing. The twelve-month moving average AIFR at 31 July 2022 was 29.72, which represents a decrease compared to the 31 January 2022 average of 33.32. This has largely been a result of our work to increase capability across the workforce in identifying and managing the risk of injuries through supervisor development training, injury prevention activities and improved risk management practices. We continued to monitor Total Recordable Injury Rate (TRIFR) as a secondary safety performance indicator. Very pleasingly, our 12 month moving average TRIFR declined from 5.41 to 2.61 year on year. Special mention must be made of our New Acland Mine team, which has been injury free since July 2021. This is a significant achievement given the risk of distraction in the workforce with the phase-down to care and maintenance occurring during the period. I thank the New Acland Mine team for their ongoing focus on safe operations and achieving an exceptional safety performance outcome. While these safety performance outcomes are a positive result for workplace health and safety, it is important that we continue our efforts to reduce all safety risks across the business in the year ahead. We will maintain our pursuit of continuous improvement in safety practices and outcomes. We have a range of improvement initiatives we intend to progress which are designed to further reduce hazards and risk in our operations and improve our practices and safety performance outcomes. The Company reported underlying EBITDA of $1,577 million, which was an increase of 330 per cent on the previous financial year (2021: $367 million). Rising Newcastle coal prices throughout the year were instrumental to the record financial outcome, backed by another solid operational performance and in spite of adverse weather and COVID-19 labour disruptions. Run of mine (ROM) coal production across our operations totalled 9.978 million tonnes. This was a 29 per cent decrease from last financial year, mostly as a result of New Acland operations winding down and transitioning to care and maintenance. Production at Bengalla, our flagship operation, was 11.7 million tonnes ROM compared to 10.0 million tonnes in 2020/21. This is a positive result in light of rain events in the Hunter Valley which impacted production as well as the rail line to the Port of Newcastle, and pandemic related labour shortages across the business and supply chain. Saleable coal production for the year totalled 7.9 million tonnes, compared with 9.6 million tonnes in 2020/21. Saleable coal production at Bengalla was down only 3 per cent, with the operation losing nearly 60,000 truck hours to the effects of poor weather and COVID-19. The completion of Stage 2 operations at New Acland also contributed to the decrease. We realised sales of 8.8 million tonnes for the year, compared to 9.6 million tonnes in the previous year. Purchased coal supported sales, and allowed us to capitalise on favourable pricing and ensure secure supply for our long-term customers during a period of constrained supply. Our average sales price during the year was a record for the Group, at $281.8 per tonne compared to $101.36 per tonne last year. Demand for our high quality, low emission coal was robust in the first half of the financial year, and strengthened as a result of supply constraints as a result of the war in Ukraine. The current energy crisis has highlighted the need for increased domestic supply and we have responded by increasing domestic sales. Security of supply is vital for our customers, and our forward order book is mostly sold and optimally priced for the current financial year. “ I am pleased to report that safety performance across our operations continues to improve.” 06 2022 ANNUAL REPORT NEW HOPE GROUP OPERATIONS REVIEW DIRECTORS’ REPORT TAX CONTRIBUTION REPORT SUSTAINABILITY REPORT FINANCIAL REPORT OTHER INFORMATION Production at Bengalla will increase from 12.6Mtpa to 13.4Mtpa over the next two years in response to strong and sustained demand for high quality, low emission thermal coal. This is an important growth project for the Company and we have made substantial commitments to increase mining and ancillary fleet and capacity in our coal handling and processing plant as well as supporting site infrastructure. Oil production from Bridgeport Energy totalled 286,514bbl, a nine per cent decrease from the previous year because of the natural decline in the oil resource and delays in bringing wells online. With strengthened demand, Bridgeport achieved an increased average sale prices of US$96.26/bbl, which was a 67 per cent increase from the previous year (2021: US$57.77/bbl). We continue to assess opportunities to secure additional resources and reserves, to extend the economic life of the mine, and the Company has also been granted an Exploration Licence for an area adjoining the western side of the Bengalla mining lease. On 28 June 2022, the Department of Environment & Science issued the Environmental Authority for New Acland Stage 3. After the reporting period, on 26 August 2022, the Minister for Resources granted the Stage 3 mining leases. We are continuing to work with the Department of Regional Development, Manufacturing and Water to secure the Associated Water Licence which will be the final approval to allow mining operations to re-commence. The mine management team are progressing rehabilitation of Stage 2 operations and working on a restart plan that would minimise the time to first coal. We hope that final approvals are granted in the near future, which would allow us to offer new opportunities to local workers and suppliers, for the benefit of the region. Cost and operational disciplines across the business position us well for the next financial year, and we expect that coal prices will remain above historical averages. These factors have contributed to strong cash generation during the year, which has given the Company additional financial flexibility to identify and pursue opportunities that align with the strategy and will support sustainable investment returns for shareholders. I would like to thank everyone at New Hope for their hard work and focus throughout the year. I am also grateful to the Board for their diligence and guidance. Finally, thank you to our shareholders for your continued support for New Hope. R.J. Bishop Chief Executive Officer 07 NEW HOPE GROUP 2022 ANNUAL REPORTFAVOURABLE MARKET & PRICING DYNAMICS While global energy demand is forecast to remain flat to 2030, supply constraints are expected to support the continuation of coal prices above long-term historical averages, particularly for high energy, lower emission thermal coals. These favourable pricing dynamics have been compounded by the war in Ukraine which has both reduced global supply and highlighted the need for greater domestic supply. The graph below illustrates the trend towards global coal demand outstripping future supply. New Hope is well positioned to remain a robust competitor in these market conditions and continue to generate substantial returns. The Company has an established track record for effective cost management disciplines and optimising operational productivity. GLOBAL DEMAND VS SUPPLY (BY OPERATING STATUS) Global Demand vs Supply (by operating status) 1200 1000 s e n n o T n o i l l i M 800 600 400 200 0 Possible Probable Operating and highly probable 1,200 1,000 s e n n o t n o i l l i M 800 600 400 200 0 2022 China 2025 2030 2035 2040 2045 2050 India JKT Other Asia ROW Source: Wood Mackenzie Q3 2022 dataset Suspended supply excluded 2022 2025 2030 2035 2045 2040 Ind ia Other Asia Possi ble Operating an d Highly Prob ab le China JKT ROW Probable Source: Wood Mackenzie Q3 2022 dataset. Suspended supply excluded. The data and information provided by Wood Mackenzie should not be interpreted as advice and you should not rely on it for any purpose. You may not copy or use this data and information except as expressly permitted by Wood Mackenzie in writing. To the fullest extent permitted by law, Wood Mackenzie accepts no responsibility for your use of this data and information except as specified in a written agreement you have entered into with Wood Mackenzie for the provision of such of such data and information. 08 2022 ANNUAL REPORT NEW HOPE GROUP OPERATIONS REVIEW DIRECTORS’ REPORT TAX CONTRIBUTION REPORT SUSTAINABILITY REPORT FINANCIAL REPORT OTHER INFORMATION Bengalla and New Acland are low-cost operations, which positions New Hope in the lower quartiles of the global cost curve (see graph on facing page). These two operations also produce high quality coals that tend to benefit from greater demand. These factors ensure that, even under scenarios in which the pace of energy transition accelerates and global demand for thermal coal reduces, the Company’s operations will remain relatively resilient to declining demand and create a natural hedge against business risks in a contracting market. This is outlined in the graph below, which shows the position where supply meets demand in each of 2030 and 2040 for the world to remain on a 1.5 degree and a 2 degree warming limit pathway. Our assessment of business resilience and strategy is outlined in more detail in the Company’s Climate and Global Energy Transition Statement which appears in the Sustainability section of our website. New Hope is progressing with a number of growth projects including production ramp up and further exploration at Bengalla, New Acland Stage 3 (pending final approval) and a new investment in Malabar Resources, principally the Maxwell Mine. 2030 GLOBAL SEABORNE THERMAL COAL COST CURVE (QUALITY ADJUSTED) ) 2 7 0 $ . : X F , s m r e t l a e r , e n n o t / $ S U ) k r a m h c n e b R A G o t ( d e t s u d a y t i l a u q C C T 2 2 0 2 j 200 175 150 125 100 75 50 25 0 0 e l i t n e c r e p h t 5 2 e l i t n e c r e p h t 0 5 e l i t n e c r e p h t 5 7 2040 AET 2 DEGREE SCENARIO 2030 2040 AET 1.5 DEGREE SCENARIO 2030 e l i t n e c r e p h t 5 2 e l i t n e c r e p h t 0 5 e l i t n e c r e p h t 5 7 2040 AET 2 DEGREE SCENARIO 2030 2040 AET 1.5 DEGREE SCENARIO 2030 100 200 300 400 500 600 700 800 900 1000 Bengalla New Acland Cumulative Tonnes (M) Source: Wood Mackenzie Q3 2022 dataset. New Hope estimates for own assets. TCC refers to total cash cost. GAR refers to 'Gross as Received'. AET1.5 Scenario based on Aug 22 WM Data. AET2 Scenario based on Sep 21 WM Data. NEW HOPE GROUP 2022 ANNUAL REPORT 09 150 125 100 75 50 25 0 0 100 200 300 400 500 600 700 800 900 Cumulative Tonnes (M) Bengalla New Acland Stage 3 OUR OPERATIONS Coal Operations Rehabilitation NSW QLD JORC RESOURCES 361Mt JORC RESOURCES1 1,578Mt2 BACKGROUND CUMULATIVE REHABILITATED LAND 2024Ha ` Large scale, cost competitive mine in ` Open cut truck and excavator mine ` Core commitment to NSW, Bengalla Mine. ` Ramp up to 13.4Mtpa ROM underway with approvals up to 15Mtpa ROM until 2039. ` Exploration License (EL 9431) for an area of 556 hectares on the western side of Bengalla. ` 15 per cent interest in Malabar Resources. ` Flag-ship asset is Maxwell Mine, an underground metallurgical coal project located 10kms south-west of Muswellbrook. ` Life of mine greater 25 years, proved and probable reserves of 144Mt. in QLD, New Acland Mine. ` Stage 1 Mining Leases granted in 2001 and mining commenced 2002. Stage 2 expansion Mining Lease granted in 2006, with mining completed in the 2022 financial year. ` Currently in care and maintenance. ` Awaiting approval of water license for New Acland Stage 3. being an environmentally responsible operator. ` Best practice environmental planning and progressive rehabilitation incorporated into all phases of mining life. 2022 PERFORMANCE ` 7.4Mt saleable coal produced (80 per cent share). ` 9.4Mt ROM coal produced (80 per cent share). ` Underlying EBITDA¹ $1,543 million. ` Realised price is $292.8/t. ` Production completed for New Acland Stage 2. ` Underlying EBITDA¹ $36.3 million. ` New Acland achieves 12 months injury free. ` Chuwar is the first Queensland coal mine to be fully rehabilitated. ` 27Ha of land rehabilitated in 2022 financial year. 1. Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA). This non-IFRS information has not been audited by Deloitte. 10 2022 ANNUAL REPORT NEW HOPE GROUP OUR OPERATIONS Agriculture Port Operations Oil and Gas QBH BRIDGEPORT AGRICULTURAL LAND HOLDINGS THROUGHPUT CAPACITY RESERVES 2P 11,600Ha ` Agricultural activities at New Acland and Bengalla. ` Cropping and harvesting of sorghum, corn, wheat and lucerne. ` Cattle breeding and fattening activities undertaken on rehabilitated land. 10Mt BACKGROUND ` Operation of the handling facility at the Port of Brisbane. ` Leading bulk handling facility since 1983. ` 10 years lost time injury free. ` 24/7 operation with 10Mtpa capacity. 6.2Mboe2 ` Tenures held in the Cooper Basin (QLD and SA), Surat Basin (QLD) and Otway Basin (VIC). ` Tenures cover an area in excess of 11,380km2. 2022 PERFORMANCE ` 34 per cent increase in cattle prices since July 2021. ` 2.6Mt export throughput. ` 287k barrels produced. ` 50ktpa additional stockpile capacity ` EBITDA $12.2 million, an increase ` 1143 head of cattle sold. added for key customer. ` Investment in farming equipment and silo infrastructure. ` Supports existing coal customers, while diversifying into new commodities to maximise throughput. of 275 per cent from 2021 financial year. ` Oil price increase 67 per cent from 2021 financial year, to US$96.36/bbl. 2. ASX Release 20 September 2022 ‘Bridgeport Energy 2022 Reserves and Resources Statement’. 11 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT DIRECTORS’ REPORT For the year ended 31 July 2022 12 12 2022 ANNUAL REPORT NEW HOPE GROUP 2022 ANNUAL REPORT NEW HOPE GROUP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: ` Robert D. Millner ` Thomas C. Millner ` Jacqueline E. McGill AO ` Ian M. Williams ` Todd J. Barlow ` Steven R. Boulton 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 $983.0 million (2021: $79.4 million); ` Underlying EBITDA1 result of $1,577.4 million (2021: $367.2 million); ` Net cash from operating activities $1,138.6 million (2021: $296.1 million), an increase of 285 per cent; ` 7.9Mt of saleable coal produced (2021: 9.6Mt); ` Balance of debt repaid and cancellation of syndicated debt facility at 31 July 2022; ` Department of Environment and Science issued New Acland Stage 3 Environmental Authority (28 June 2022); ` Investment of $94.4 million to acquire a 15 per cent equity interest in Malabar Resources Limited acquired during the period; ` 2022 Interim dividend of $141.5 million, representing 17.0 cents per share and a Special Dividend of $108.2 million, representing 13.0 cents per share were paid during the period; ` 2022 Final dividend of 31.0 cents per share, and special dividend of 25.0 cents per share, fully franked and payable 8 November 2022; and ` NHC Closing share price at 31 July 2022, $4.39 (2021: $1.995), representing a 120 per cent increase. 1 Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and Non-Regular Items are a non-IFRS measures. This non-IFRS information has not been audited by Deloitte. 13 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT HIGHLIGHTS (CONTINUED) Statutory Revenue Statutory Profit after tax Underlying EBITDA1 Impairment of Queensland Coal Mining Assets Impairment of Coal Exploration and Evaluation Assets Onerous Contracts New Acland Ramp Down2 Group Redundancies Liquidation Related Expenses Strategic Growth and M&A Debt Wavier Consent Fees Total Non-Regular Items EBITDA Financial Income and Expenses3 Depreciation and amortisation Statutory Profit before Tax Net Profit before Tax and before Non-Regular Items1 2022 $000 2021 $000 2,552,395 1,048,239 983,009 1,577,357 – (4,989) – – (5,491) (9,823) (650) – (20,953) 1,556,404 (14,630) (141,136) 1,400,638 1,421,591 79,350 367,197 (40,259) (1,618) (37,276) 11,393 (15,733) (2,620) (1,370) (1,110) (88,593) 278,604 (18,531) (149,353) 110,720 199,313 1 Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and Net Profit before Tax (NPBT) and before Non-Regular Items are non-IFRS measures. This non-IFRS information has not been audited by Deloitte. 2 New Acland Ramp Down represents a change in coal stock inventory valuation following the increase in coal prices during 2021 financial year. 3 Financial Income and Expenses comprises statutory finance income and expenses minus unwinding of discount on provisions and commitment fees on loan facility. Refer to Note 20D. 14 2022 ANNUAL REPORT NEW HOPE GROUPOPERATING AND FINANCIAL REVIEW The Company reported a NPBT and before Non-Regular Items of $1,421.6 million for the financial year ended 31 July 2022 (2021: $199.3 million). This represents a 613 per cent increase from the comparative period (2021). The primary drivers contributing to the NPBT and before Non-Regular Items result include: ` An increase in average A$ realised prices to A$281.84/t in 2022 from A$101.36/t in 2021. Thermal coal prices continued to increase from July 2021 levels, which materialised into strong revenue generation over the reporting period. The quarter four average realised price was A$493.52. ` Underlying Free On Board (FOB) costs of A$93.54/t (2021: A$56.85/t), including trade coal purchases of $26.9/t and excluding royalties. Underlying Free on Rail (FOR) costs of $47.04/t (2021: $36.53/t). Amid supply chain constraints, inflationary pressures and inclement weather, the Company has remained focused on sustaining previously embedded cost reduction measures to ensure Company profits are maximised. ` Gross revenue from coal sales increased in 2022 to $2,488.9 million from $1,006.0 million in 2021. This represents a 147 per cent increase based on record high prices. Gross revenue from oil sales increased in 2022 to $33.5 million from $22.2 million in 2021 reflecting improved prices. The variance between Underlying EBITDA1 and Cash flow from Operations is primarily driven by the movement in Working Capital as outlined below. Underlying EBITDA1 Net Interest Paid Net Income Taxes (Paid)/Received Settlement of Non-Regular Items1,2 Net Foreign Exchange NOTE 2022 $000 2021 $000 1,577,357 367,197 (16,975) (15,620) (31,326) 19,317 (10,690) (36,046) (3,071) (2,453) Remeasurement of Assets Classified as Held for Sale Impairment of Building Assets - - Non-Cash Employee Benefit Expense — Share-Based Payments 5 850 48 2,771 72 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 Cash and Cash Equivalents Undrawn Syndicated Facility3 Liquidity Available (377,508) (39,221) 1,138,637 296,065 1,138,637 296,065 (222,524) (42,760) (628,133) 98,528 715,714 424,663 715,714 424,663 - 140,000 715,714 564,663 1 Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and Non-Regular Items are a non-IFRS measures. This non-IFRS information has not been audited by Deloitte. 2 Settlement of Non-Regular Items are cash Items that Impact Cash Flow from Operations. 3 As at 31 July 2022, the Syndicated Debt Facility was cancelled. 15 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT    OPERATING AND FINANCIAL REVIEW (CONTINUED) Basic earnings per share for the 2022 financial year ended is 118.1 cents compared to 9.5 cents for the comparative period. Directors have declared a final dividend of 56.0 cents per share (31 July 2021: 7.0 cents). This dividend is fully franked and payable on 8 November 2022 to shareholders registered as at Tuesday, 25 October 2022. REVIEW OF OPERATIONS HEALTH AND SAFETY The Company remains committed to the safety, health and wellbeing of our people, our environment and the communities in which we operate. During the reporting period the All-Injury Frequency Rate (AIFR) was adopted as a primary safety performance metric as part of initiatives targeting ongoing improvement in safety culture and systems. The intent of AIFR is to recognise both short and long-term health and safety risks that can impact wellbeing and represents all types of injury to provide a more holistic indicator of safety incidents and risk. The AIFR twelve month moving average to 31 July 2022 was 29.72, a decrease compared to the 1 August 2021 average of 33.70. The Company continues to monitor Total Injury Frequency Rate (TRIFR) as a supplementary safety performance indicator. The Company’s 12 month moving average TRIFR was 2.61 as at 31 July 2022, a decrease of 52 per cent to the prior comparative period (2021: 5.39) Continual improvement of our safety culture and systems is at the front of mind. This is evidenced through such initiatives as enhanced supervisor development training, preventative injury activities and increased risk management practices to pro-actively identify and manage risk. During the year, the Company also begun a process to comprehensively review its Enterprise Risk Framework in consultation with all business units to understand the improvements that can be made. New Acland Mine operations reached a milestone of 12 months injury free, and Queensland Bulk Handling have achieved 10 years of lost-time injury free. Both of these milestones reflect the Company’s long-term commitment to high safety standards and practices. The Company holds a strong capital position, with a closing Cash and Cash Equivalents balance of $715.7 million (2021: $424.7 million) and a Term Deposit of $100.0 million (2021: NIL), ensuring any future strategic growth opportunities can be supported. The closing balance of Trade Receivables also increased materially from the comparative period to $502.0 million (2021: $123.3 million), an increase of 307 per cent. OPERATING CASH FLOWS The Company generated a cash operating surplus of $1,138.6 million which is an increase of 285 per cent on the prior comparative period (2021: $296.1 million). Coal and oil pricing both strengthened during the period driven by limited supply in the market and increased demand given the current energy crisis. Prices are expected to remain at elevated levels over the next 12 months. An overall increase in cash payments is principally due to the inclusion of trade coal purchases that have supported the business and its customers during the period, and higher royalty payments to the New South Wales Government in line with higher sales prices being received. INVESTING CASH FLOWS Investing cash outflows were $222.5 million principally due to the payment of $94.4 million to secure a 15 per cent equity share in Malabar Resources Limited. This was a 420 per cent increase from $42.8 million for the comparative period. Capital expenditure of $48.7 million relates to the purchase of heavy mobile equipment to support the Bengalla operation. Included in Investing cash flows is a Term Deposit for $100.0 million placed in July 2022 for a period of 12 months. At completion of the divestment of the Company’s interest in the Lenton Joint Venture, the Company received $21.5 million in upfront payments. FINANCING CASH FLOWS The closing cash position for the financial year ended 31 July 2022 is $715.7 million (2021: $424.7 million). On 28 October 2021, the Company fully repaid the debt drawn under the Syndicated Debt Facility of $310.0 million. Following the full repayment of the Syndicated Debt Facility, the Company elected to terminate the facility on 15 July 2022, prior to its maturity in November 2023. The Company’s internal modelling of cash flows indicates the Company will not require any funding for general corporate purposes and advances the execution of a broader strategy seeking to maximise sustainable long-term shareholder value. 16 2022 ANNUAL REPORT NEW HOPE GROUPENVIRONMENT OPERATIONS As an environmentally responsible operator, 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. During the financial year ended 31 July 2022, the Company recontoured 30 hectares and seeded 20 hectares of land at New Acland. The total material backfilled at New Acland was 1.9Mbcm. While New Acland awaits approvals to restart operations, rehabilitation will continue to be a key focus while on care and maintenance. To date the Queensland Government has certified 349 hectares of progressively rehabilitated land at New Acland. On 13 July 2022 the surrender of the Environmental Authority for the Chuwar Coal Mine was approved by the Queensland Government, and the Mining Leases were subsequently relinquished. Chuwar Mine, located 5km from Ipswich has become the first open-cut coal mine in Queensland to be fully rehabilitated and relinquished. The Company entered into an Enforceable Undertaking with the Department of Environment and Science to invest $2.0 million towards a native vegetation and fauna habitat corridor for koalas at New Acland Mine. The rehabilitation project will connect and substantially expand existing koala habitats, linking Lagoon Creek to native vegetation north of the Acland township. 100 hectares of land will be planted with eucalyptus, paper bark and other refuge trees, significantly enhancing the standard of rehabilitation post mining. The existing environmentally significant area of Bottle Tree Hill will also be protected in perpetuity. The Queensland Government critically assessed the project and concluded that all rehabilitation requirements had been met in full, deeming the site safe, stable, non-polluting, and able to support grazing for cattle. The rehabilitation work at both Chuwar and New Acland are a clear and practical demonstration of the commitment the Company has to being a responsible operator and achieving successful rehabilitation and restoration of the mining land which we operate. The Company produced 7.9Mt of saleable coal1 for the financial year ended 31 July 2022 (2021: 9.6Mt), representing a decrease of 18 per cent to the comparative period. The Bengalla operation was heavily impacted by periods of unusually high rainfall throughout the year leading to a loss of 31,008 truck operating hours. Production was also impacted by COVID-19 related workforce shortages, both within the operations and throughout the supply chain. Dragline and excavator achieved above plan productivity, with the dragline improving by eight per cent to the prior comparative period. Contributing to this reduction in saleable coal was the completion of Stage 2 operations at the Queensland based New Acland Mine, which is currently awaiting Government approvals for Stage 3. The Company realised sales for the 2022 financial year of 8.8Mt, compared to 9.6Mt in the prior period. Coal sales were supported by purchased coal, which has provided strategic opportunities to take advantage of pricing dynamics during the first half of the year. This has also assisted to mitigate demurrage impacts caused by supply chain constraints during periods of extreme wet weather. The Company achieved a record average sales price during the financial year of A$281.8/t (2021: A$101.36/t), representing a 176 per cent increase. Robust market demand for high quality, low emission thermal coal in the first half of the year was then further strengthened by the Russia-Ukraine conflict, which tightened supply. With security of supply paramount to our key customers, our outlook is strong with a largely sold and optimally priced forward sales book for the next 12 months. 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. The current energy crisis has also highlighted the need for increased domestic supply. The Company has responded by increasing sales to the domestic market and looks forward to increasing domestic sales if approvals for New Acland Stage 3 are granted. During this financial year, the Japanese Reference Price (JRP), which is historically settled during the second half of the year was not settled. Consequently, the Company negotiated a final price settlement directly with a key customer. The settlement was completed at a level materially above the previous price of US$109.97/t. The cash from this final settlement is expected to be received in September 2022. With the gC NEWC index pricing greater than US$400/t (2021: US$170/t), the Company is well positioned to achieve continued strong cash generation. 1 The Company’s share of saleable volumes and sales represents its 80 per cent interest in Bengalla Mine operations and 100 per cent interest in New Acland Coal Mine operations. 17 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT2021 50,482 14,002 3.6 1,004 12,685 9,589 76% 10,035 $101.36 $46.33 $35.34 $36.53 $19.38 $55.91 $0.94 $6.85 $63.70 OPERATING AND FINANCIAL REVIEW (CONTINUED) GROUP COAL MINING OPERATIONAL METRICS Prime overburden Run-of-Mine (ROM) coal produced ROM strip ratio – prime Bypass Coal handling preparation plant (CHPP) feed Saleable coal produced Product yield Coal sales METRIC kbcm kt bcm/t kt kt kt % kt 2022 40,068 9,978 4.0 1,155 9,215 7,889 73% 8,832 Average sale price achieved A$/t $281.84 Unit costs of sales Bengalla mine site costs Acland mine site costs Free on Rail (FOR) cost FOR to FOB cost (ex. State royalties and trade coal) Underlying FOB cash costs (ex. State royalties and trade coal) Trade Coal Purchases State royalties Underlying FOB cash cost Margin BENGALLA MINE Bengalla (100 per cent basis) delivered 9.3Mt saleable production for the financial year compared to 9.7Mt in the comparative period. Despite losing over 59,848 truck hours to unprecedented weather events, a tight labour market and COVID-19 related absenteeism, production loss was limited to a reduction of just four per cent to the comparative period. Following the 2021 shutdown, the dragline performed strongly with high availability (90 per cent) and achieved above budget productivity rates. The addition of two new Hitachi EH5000 trucks, the optimisation of the dragline path and pit operations in response to significant periods of wet weather and the implementation of industry best practice activities through the use of digital mining, have all been successful mitigation strategies during what has been a challenging year throughout the Hunter Valley. Of the 11.7Mt ROM produced, over 10.4Mt was fed to the coal handling and preparation plant (CHPP) maximising washed product and realised pricing to the gC NEWC. Total yield of 79 per cent was achieved, three per cent higher than the comparative period (2021: 76 per cent) with below planned levels of bypass (0.4Mt) due to the maximum wash strategy. While flooding on the Hunter Valley rail network towards the end of the year resulted in high closing product stocks on site, this provides Bengalla a strong sales runway into the new financial year where prices have further increased from 31 July 2022 levels. 18 A$/prod t A$/prod t A$/sale t A$/sale t A$/sale t A$/sale t A$/sale t A$/sale t $61.91 $58.47 $47.04 $19.61 $66.65 $26.90 $21.15 $114.70 A$/sale t $167.14 $37.66 As a mitigation measure against further inclement weather events, Bengalla purchased additional water discharge credits and was able to undertake controlled, environmentally approved discharges during the major wet weather event in July. These additional discharges have significantly improved water storage capacity moving into the 2023 financial year. These credits are valid for a period of 10 years and allow additional water discharges when the Hunter River is in high flow conditions. Bengalla continues to be recognised as a large-scale cost competitive mine, with the FOB cost per tonne positioned within the lowest quartile of the cost curve1, compared with other seaborne thermal coal producers worldwide. Constrained supply, a tight labour market and inflationary pressures along with reduced production on account of the wet weather and COVID-19 impacts have driven up prices with site costs per saleable tonne increasing from the first half of the year to $61.9/t (31 January 2022: $48.0/t). Cost increases are primarily associated with price increases in fuel, explosives, contract labour and plant and equipment components in the second half of the year. In a challenging supply market, the Company is maintaining a strong cost discipline while optimising operational productivity to maximise value delivery. A key focus is ensuring certainty of supply with minimal disruption to operations, while high energy, low emission thermal coal prices are at record levels. 2022 ANNUAL REPORT NEW HOPE GROUP2022 TOTAL CASH COST - ADJUSTED BY REALISED PRICE AGAINST BENCHMARK (INCL. ROYALTIES, US$/t) e l i t n e c r e P h t 5 2 e l i t n e c r e P h t 0 5 e l i t n e c r e P h t 5 7 275 250 225 200 175 150 125 100 75 50 25 0 Bengalla ) k r a m h c n e b R A G o t ( d e t s u d a y t i l a u q C C T 2 2 0 2 j ) 2 7 0 $ . : X F , s m r e t l a e r , t / $ S U ( 0 100 200 300 400 500 600 700 800 900 Source: Wood Macxkenzie Q3 2022 dataset. New Hope estimates for own assets. TCC refers to total cash cost. GAR refers to 'Gross as Received'. Cumultative Tonnes (M) 1 Cost curve represents FOB natural market, where the natural market is defined as the major consumer for each producing region. BENGALLA SITE CASH COSTS PER SALEABLE TONNE 412.7 +48% 292.8 197.9 Average Sales Price 31 January 2022 48.0 8.2 0.6 0.5 1.0 58.4 0.3 3.1 61.9 +22% 31 January 2022 Fuel Explosives Contract Labour Spares and Consumables 31 July 2022 Mine Dewatering Volume Variance 31 July 2022 Average Sales Price H1 2022 Average Sales Price 31 July 2022 During the financial year Bengalla negotiated a new four-year Enterprise Agreement with its workforce with implementation due early in the 2023 financial year. The majority of Bengalla’s employees are employed on Individual Flexibility Agreements underpinned by the Enterprise Agreement. In addition, approximately 90 per cent of Bengalla’s employees and contractors are local to the Upper Hunter, Muswellbrook and Singleton shires, making a positive impact in the local community. Bengalla has strong and positive relationships in its local community which underpin its social licence to operate. BENGALLA 13.4MT LIFE OF MINE Early 2022 the Bengalla Joint Venture Participants approved the updated Life of Mine Plan (LOM) for Bengalla, which involves ramping up production from 12.5Mtpa to 13.4Mtpa ROM (currently approved to 15.0Mtpa). This increase will provide additional saleable coal, as well as increasing the overall quality of the existing saleable coal produced. The Company is focussed on this growth project and the significant value it will provide to shareholders. Major commitments have been made to increase mining and ancillary fleet and CHPP capacity as well as supporting site infrastructure. 19 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT OPERATING AND FINANCIAL REVIEW (CONTINUED) BENGALLA EXPLORATION LICENSE (EL 9431) COAL DEVELOPMENT AND EXPLORATION On 4 July 2022, the New South Wales Government granted Bengalla an Exploration License (EL 9431) for an area of 556 hectares adjoining the western side of Bengalla Mine. Bengalla will conduct an exploration program over the area of EL 9431 aiming to identify available economic resource. 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. Tenements related to the Yamala Project were surrendered in early 2022. NEW ACLAND COAL MINE PASTORAL OPERATIONS New Acland produced 0.4Mt of saleable coal for the financial year, representing a decrease of 78 per cent on the comparative period (2021: 1.8Mt) due to the completion of Stage 2 operations. The site has safely transitioned into care and maintenance and is currently planning for the commencement of Stage 3 once the final approvals are granted. NEW ACLAND STAGE 3 DEVELOPMENT On 17 December 2021, the Land Court of Queensland recommended that the New Acland Mine Stage 3 Mining Leases and the Environmental Authority amendment application be granted, subject to conditions. On 26 May 2022, the Coordinator-General issued her change report to the stated conditions for the Environmental Authority for New Acland Mine Stage 3. The Coordinator-General’s change report satisfies a condition to the Land Court of Queensland’s recommendation that New Acland Mine Stage 3 Mining Leases and the Environmental Authority amendment be granted. Following this, on 28 June 2022 the Department of Environment and Science issued the New Acland Mine Stage 3 Environmental Authority. The Environmental Authority includes the Coordinator-General’s amended stated conditions in accordance with the Land Court of Queensland’s recommendation that New Acland Mine Stage 3 Mining Leases and Environmental Authority application be granted. QUEENSLAND BULK HANDLING (QBH) QBH exported 2.6Mt of coal for the financial year (2021: 3.9Mt). This is a 32 per cent decrease on the comparative period due to reduced throughput associated with the transition of New Acland Mine 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. The Company’s pastoral operations benefited from continued strong cattle prices. Over the 12 months, 1,051 weaners were fattened and sold, an increase of five per cent on the comparative period. The majority of weaners were bred at Acland Pastoral Company (APC) and fattened at Bengalla Agricultural Company (BAC). The Company has also focused on developing BAC’s breeding program, ending the year with 343 head of cattle, which includes 148 BAC bred weaners. APC cropping operations were impacted by heavy rains in late calendar year 2021 which delayed the winter crop harvest and significantly impacted grain yield and quality. The harvest of summer crops at APC and BAC was similarly affected from rain events in Autumn 2022. APC has over 700 hectares of wheat and barley currently growing. BAC trialled several crops including corn and grain sorghum over summer and currently have wheat and lucerne crops in the ground. The Company is focussed on further capital improvements, including an increase in the land under irrigation and additional upgrades to pump and pipe networks. The investment in farming equipment and silos at APC has been critical in reducing operating costs and increasing storage capacity to reduce grain loss and maximise revenues. The above average rainfall has increased weed control costs at both APC and BAC. BRIDGEPORT ENERGY PTY LTD (BEL) Oil production totalled 286,514bbl. This was a nine per cent decrease on the comparative period due to the natural decline in the oil resource and delays with wells coming online. Following strengthened market demand, oil prices have remained robust with BEL achieving an average realised price of US$96.36/bbl (2021: US$57.77/bbl). This represents an increase 67 per cent to the comparative period. Increased prices have significantly improved BEL’s full year result, reporting revenue of A$33.5 million, an increase of $11.4 million to the comparative period. 20 2022 ANNUAL REPORT NEW HOPE GROUPOn 1 November 2021, Vintage Energy Limited (ASX: VEN) announced a tripling of Vali field 2P Reserves. The Company has assessed the results of the Vali gas discovery, in which it holds 25 per cent interest, and supported the change in 2P Reserves. As at 31 July 2022, three Vali wells had been completed and the fourth undergoing testing, with all major equipment in country and ready for installation. First gas is expected by the end of 31 January 2023. MALABAR RESOURCES LIMITED The Company, through a wholly owned subsidiary acquired a 15 per cent interest in Malabar Resources Limited (Malabar) for a total investment of $94.4 million, paid in July 2022. Malabar’s flagship asset is the Maxwell Mine, an underground metallurgical coal project located 10kms south-west of Muswellbrook in the Hunter Velley. The Company’s investment in Malabar aligns with its strategy to invest into low-cost coal assets with long life approvals. The acquisition diversifies the Company’s portfolio by providing exposure to metallurgical coal, mined by low impact underground methods, and is expected to provide attractive investment returns over the life of the project. Mining leases for the Maxwell Mine were granted in November 2021 and the project has received final state and federal approvals. The estimated life of the mine is greater than 25 years with proved and probable reserves totalling 144 mt. Malabar’s assets also include: ` Approved 25MW Maxwell Solar Farm (Stage One) located on more than 105 hectares of rehabilitated mine land within the NSW Government’s designated Hunter-Central Coast Renewable Energy Zone and with close proximity to high voltage network infrastructure, with the capacity to significantly increase large-scale solar generation and battery storage; ` Spur Hill exploration project (EL 7429); and ` Agricultural assets including the Merton Vineyard. Malabar’s strategy is to deliver low-impact underground mines which target metallurgical products, while co-existing and facilitating substantial sustainable, renewable enterprises. OUTLOOK The Company remains firm that the demand for high quality, low emission thermal coal, produced from our Australian operations is critical to supporting the transition to a decarbonised economy. Government policy will provide a framework as to how the transition to a decarbonised economy will occur, and the Company will work within the policy framework to ensure that low-cost, reliable energy continues to be provided to those in need, including the Australian domestic market. The Company’s long-term strategy is to remain focused on coal, both through its existing thermal portfolio and in new opportunities in either metallurgical or thermal coal production. The Company will continue to invest in assets that suit its portfolio and provide shareholders with strong cash generation, and consistent returns. The Company believes that Australia’s economy is dependent on fossil fuels and is proud of the contributions it makes to local, state and federal Government departments which help to underpin the living standards of all Australians. Subject to New Acland receiving its final approval, with the recent announcement regarding the granting of the Stage 3 (New Acland Mining Leases), the Company looks forward to adding safe and efficient production to its portfolio in the coming 12 months. Coupled with the recent investment in Malabar Resources and the increase in production at Bengalla, the Company looks forward to a future of growth, capitalising on the current high price environment. The significant cash build, the near-term price outlook and the Company’s generous franking account balance has enabled the Board to reward shareholders with a fully franked Final Dividend of 31.0 cents per share, and an additional fully franked Special Dividend of 25.0 cents per share, both payable on 8 November 2022 to shareholders on record as at 25 October 2022. As part of its broader capital management strategy, the Company is also looking at options to return a portion of its surplus capital to securityholders. The Company is reviewing several options in this regard to ensure any capital management decision is the most efficient and value- enhancing. These options include the management of dilution associated with the existing Convertible Notes, and options around the most efficient use of our significant franking account balance.  Future surplus capital deployment may include, M&A opportunities aligned with our strategy, returning funds to securityholders through mechanisms such as buy-backs (either on or off-market), dividends or capital returns or entry into cash-settled equity transactions with a bank counterparty to hedge dilution associated with the existing Convertible Notes. 21 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTRISK MANAGEMENT The Company has a robust risk management framework which is overseen by the Audit and Risk Committee (ARC), the Sustainability and People Committee (SPC), 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, mitigation measures, 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 Social Licence New Acland Stage 3 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 the Water License approval for the New Acland Stage 3 expansion is not obtained. This approval is 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 further impairment of asset values, take or pay commitments exceeding project requirements or the potential loss of key long-term customers. 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. 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. Obtaining the necessary water license for the New Acland Stage 3 project will secure employment for the existing and proposed 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 indicator assessments for the assets have been undertaken (detailed in Note 14 of the Financial Statements), with no impairment indicators being identified at 31 July 2022. As Stage 2 coal has been depleted, supplier and customer commitments have been appropriately managed while Stage 3 approvals continue to be pursued. 22 2022 ANNUAL REPORT NEW HOPE GROUPRISK CATEGORY POTENTIAL RISKS POTENTIAL OPPORTUNITIES APPLICATION TO NEW HOPE 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 Group’s longevity. The Company actively seeks to identify potential opportunities that offer the prospect of building shareholder value. The Company acknowledges that sustainable long-term value creation can only be achieved by respecting and delivering positive outcomes for the broader stakeholder community. 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 capital. To ensure that capital is deployed in an optimal manner, the Company undertakes rigorous and well documented due diligence using a mix of internal and external subject matter experts prior to making any investment decisions. All significant project development and acquisition transactions require approval from the Board of Directors. The Company engages with the Bengalla 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. Knowledge gained from risk identification and management at one or more mines, including approaches to mitigating and managing those risks, can be shared across management teams, thereby improving the Group’s overall risk management strategy. 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. 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. 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 has the ability to consider active management of any interest rate and commodity price exposures. 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. 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 placed commodity hedge contracts during opportunistic pricing periods. 23 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTRISK MANAGEMENT (CONTINUED) CLIMATE RELATED RISKS OUR POSITION ON CLIMATE CHANGE AND OUR ROLE IN THE GLOBAL ENERGY TRANSITION Climate change is a critical global issue which, together with the transition to a lower carbon economy, poses potential risks to our business over the short, medium and long term. The identification and management of climate-related risks is integrated into the Company’s risk management framework. As with other risks, the scope of the framework applies to climate- related risks that are material to the achievement of the key objectives of the Company and related business plans. The Company’s analysis of material climate-related risks and identified mitigation measures is included in the summary table below. The Company most recently published a detailed overview of its position on climate change, and its resilience to lower- carbon scenarios, in its 2021 Sustainability Report. The Company expects to periodically provide updated statements relating to climate change issues, including the company’s approach to governance, strategy, risk management and metrics and target. The Company expects to provide its next update around the time of release of the Company’s Annual Report. RISK CATEGORY RISK AND DESCRIPTION POTENTIAL IMPACT MITIGATION OR OPPORTUNITY Policy and Legal Legislative and Policy Changes Changes in government policies that restrict the mining or use of coal or the use of land for coal mining and related activities. The introduction of new and/or more stringent domestic policies such as carbon pricing and/or tightened safeguard mechanisms targeting scope 1 and/or 2 GHG emissions. Changes in government policy relating to either coal consumption or energy generation in customer economies. The ability of the Company to develop new coal projects or to extend the life of existing projects could be impacted, together with increased project risk and cost associated with the granting of approvals. New and/or more stringent carbon pricing mechanisms could reduce the demand for thermal coal as a source of energy. The Company could incur increased operational costs as a result of the potential introduction of regulatory carbon pricing mechanisms and/or trading systems. The Company may be required to source and procure carbon offsets from the voluntary market. Reduced demand for thermal coal in key customer markets could reduce revenues. The Company could incur additional costs establishing supply to new markets. The Company continues to proactively monitor the policy environment both domestically and internationally, including social and government appetite for changes that may impact the Group. The Company also engages with domestic policymakers to advocate for positive policy outcomes. The Bengalla mine has existing approvals that extend out to 2039, enabling it to avoid potentially long and costly mine extension approvals. If the New Acland expansion is approved, the New Acland Mine will have an approval term matching the remaining mine life. The Company has established detailed GHG emissions baselines for its assets. A range of potential emissions abatement options have been identified, including energy efficiency and energy productivity projects, which will be considered for progression in line with relevant internal governance and project development guidelines. The Company will explore access to voluntary carbon offset markets as part of an overall strategy to reduce net emissions in line with mandated emissions reduction pathways. 24 2022 ANNUAL REPORT NEW HOPE GROUPRISK CATEGORY RISK AND DESCRIPTION POTENTIAL IMPACT MITIGATION OR OPPORTUNITY Policy and Legal Exposure to litigation and regulatory scrutiny Increased litigation from communities and stakeholders against governments and companies. Litigation may include claims for compensation for damages attributed to climate-related impacts or inadequate disclosure of climate risks, or orders to wind back approvals for existing operations or to block approval of expanded operations. Increased costs associated with defending legal claims (including public liability claims) and/or environmental and development approvals for new coal projects or the extension of existing projects. Reputational damage because of stakeholders’ perception that the Company’s operations heighten climate change risk, together with ongoing stigmatisation of the coal sector. Project risk associated with injunctive actions against thermal coal mining operations. Market Market driven shift to a lower carbon economy An accelerated or disorderly transition toward a net zero carbon global economy has the potential to reduce global demand for thermal coal. Markets will be affected by the transition to a net zero carbon global economy through shifts in supply and demand for certain commodities, products, and services as climate-related risks and opportunities are increasingly defining decisions and actions. Rational investment decisions require clear signals for decision makers, with a level of certainty about the path and pace of transition. A disorderly or fragmented transition to the zero-carbon economy may lead to sub-optimal allocation of financial, human and natural capital. The Company will continue to work closely with its key customers to ensure it has clear foresight around near and medium-term demand forecasts. The number and mix of market participants could lead to increased volatility in the supply and pricing of thermal coal with associated risks to cashflows. The Company has a long-standing reputation as a responsible operator and continues to operate in accordance with conditions of approved mining leases and environmental authorities. The Company has adopted a proactive approach to assessing ongoing climate-related impacts on the coal industry through regular participation in industry groups such as Queensland Resources Council and Minerals Council of Australia and other stakeholder groups, and active engagement with state and federal regulators to monitor any potential challenges to existing approvals. The Company monitors relevant legal proceedings across courts with relevant jurisdiction and seeks legal advice on such developments when required. The Company provides transparent disclosure of climate-related impacts and risks to investors and stakeholders. The Company will continue to work closely with its key customers to ensure it has clear foresight around near and medium-term demand forecasts. The Company’s largest asset (Bengalla) produces high calorific value coal which is forecast to remain in demand during a range of scenarios for transition to a net zero carbon economy. 25 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTRISK MANAGEMENT (CONTINUED) RISK CATEGORY RISK AND DESCRIPTION POTENTIAL IMPACT MITIGATION OR OPPORTUNITY Market Market driven shift to a lower carbon economy (continued) Pressure from external stakeholders could see some producers exit the thermal coal industry with heightened threat of stranded assets and with a resultant reduction in supply and increase in pricing for remaining industry participants. An accelerated transition may bring forward requirements to resource and execute exit and/or business transformation strategies, including mine rehabilitation activities. Pricing for financing and key services such as insurance may continue to increase, or access may become more conditional, if the pool of parties prepared to partner with the thermal coal industry reduces significantly. Access to capital and insurance Driven by investor concern over climate-related risks, changes to ESG policies by funding and insurance providers may limit access to and increase the cost of capital and insurance. Technology Substitution of thermal coal for lower emissions technologies There are technological risks associated with the transition away from thermal coal toward lower emissions and renewable energy sources. Demand for thermal coal could be impacted if alternative energy sources become more competitive and reliable, relative to thermal coal. Disruptions during the domestic energy transition, including the removal of baseload power from the market, could affect the cost and reliability of energy supply to our operations. The Company will continue to stress- test the Company’s portfolio and business strategy against a range of scenarios outlined by the International Energy Agency (IEA), and other relevant third parties, on the future of the global energy and seaborne coal markets. The Company undertakes progressive rehabilitation of all mine sites, thereby reducing exposure to legacy risks. The Company will monitor market conditions and explore opportunities to diversify funding sources, as well as maintain active engagement with existing and future potential providers. The Company will continue to ensure that all existing obligations are met with regard to existing operations. The Company will continue its disclosures on climate-related risks and opportunities. The Company will continue to advocate for the important role of high-quality thermal coal in reducing global emissions. As the global economy transitions towards lower emission energy sources, Paris Agreement-aligned scenarios forecast that there will be ongoing demand in the medium term for high quality thermal coal to supply high efficiency low emission coal fired power stations in order to generate affordable baseload power. The Company’s high-quality thermal coal reserves are ideally placed to meet that demand. The Company will continue to monitor developments that have application to the mining and broader energy industries and consider investing in new technologies including those that improve energy efficiency and lower carbon intensity and nature-based and other forms of carbon offsetting projects. 26 2022 ANNUAL REPORT NEW HOPE GROUPRISK CATEGORY RISK AND DESCRIPTION POTENTIAL IMPACT MITIGATION OR OPPORTUNITY Reputation Stakeholder exclusion Suppliers and other stakeholders include climate related considerations into their decision- making processes around businesses with which they will transact and engage. Community sentiment is increasingly affected by negative perceptions about thermal coal. Risk of the loss of support from suppliers, leading to increased costs and operational risks from a more fragmented supply chain. Reduced community support may impact essential negotiations with landowners and other local stakeholders. Reduced community support may lead to legal challenges and an unfavourable political environment for the approval of mining projects. The ability to attract and retain a suitably skilled workforce could be impacted by employee perceptions about what it means to work in the coal mining industry. Physical Climate Change Increases in the frequency and intensity of extreme weather events. Rising mean temperatures and long-term shifts in climate patterns. Disruptions to mining and port operations, or damage to or loss of key infrastructure, resulting in delays, increased operating costs and lost revenue. Rising mean temperatures may impact workplace health and safety and the ability of our workforce to carry out their job in acceptable conditions. Intensity and duration of droughts may have a longer-term impact on operational reliability or longevity of mining equipment. The Company has strong relationships with key stakeholders and maintains dialogue covering the full spectrum of environmental, sustainability and governance issues. The Company will continue to sponsor local schools and to provide university and trade pathways to support the next generation of our workforce. The Company will continue to monitor requirements in respect of and communicate transparently in relation to disclosure of climate-related impacts and risks to investors and stakeholders. The Company operates in accordance with world-class environmental practices in a highly regulated environment which supports our social licence to operate. The Company has land holdings and assets which in the medium to long term may be re-purposed for alternate uses, such as enhanced biodiversity and conservation zones, renewable energy generation and other industrial or commercial uses which provide opportunity for workforce transition and enhanced community and local economic outcomes. The Company actively manages climate change risks through our Risk Action Plan and the standard risk management process which incorporates business continuity and crisis management planning to aid preparedness. The Company’s Bengalla Mine has implemented various water management initiatives, including through securing additional water discharge rights and through the increased capacity of its discharge dam. The Company’s New Acland Mine utilises recycled wastewater, increasing its resilience in the event of drought and avoiding undersupply of water. The Company continues to investigate opportunities to minimise water usage and secure alternative, reliable water sources (including recycled water sources, where available) to strengthen our operations’ resilience to water availability risks. 27 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTRISK MANAGEMENT (CONTINUED) 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. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR NEW ACLAND MINING LEASE APPROVAL On 26 August 2022, the Minister for Resources granted the New Acland Mine Stage 3 Mining Leases. The grant of the Mining Leases follows an independent assessment by the Minster for Resources including the consideration of the Land Courts recommendation that the New Acland Stage 3 Mining Leases be granted. The only remaining approval required before mining can begin is the granting of the Associated Water Licence by the Department of Regional Development, Manufacturing and Water. CONVERTIBLE BOND CONVERSION On 25 August 2022, the Company received a Conversion Notice in relation to holder of the Company’s Convertible Notes electing to convert their Notes in accordance with the conditions of the Notes into ordinary shares in New Hope Corporation Limited at the conversion price. The number of ordinary shares that were issued on 6 September 2022 under the Conversion Notice was 106,746.  On 8 September 2022, the Company received a Conversion Notice in relation to holder of the Company’s Convertible Notes electing to convert their Notes in accordance with the conditions of the Notes into ordinary shares in New Hope Corporation Limited at the conversion price. 28 The number of ordinary shares that were issued on 14 September 2022 under the Conversion Notice was 426,985.  There are no other events that have occurred since 31 July 2022 which require disclosure. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The activities of the consolidated entity in the 2023 Financial Year are expected to be similar to those of the 2022 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: newhopegroup.com.au/corporate-governance WORKPLACE 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 a ccessed on the New Hope Corporation website at: newhopegroup.com.au/corporate-governance SUSTAINABILITY Since 2017 the Company has published an annual Sustainability Report which has reported against various environmental, social and governance metrics. The format and content of the Sustainability Report has evolved over time and will this year be provided as a section within the Company’s Annual Report. STATUTORY COMPLIANCE ENVIRONMENTAL COMPLIANCE During the 2022 financial year, the Company received two Penalty Infringement Notices, one relating to a production oil leak ($13,785) and the other relating to the late submission of an Annual Return ($3,336). The Company was not prosecuted for any breach of environmental laws during the financial year. 2022 ANNUAL REPORT NEW HOPE GROUPINFORMATION ON DIRECTORS ROBERT D. MILLNER (NON-EXECUTIVE CHAIRMAN) TODD J. BARLOW B.BUS, LLB (HONS) (NON-EXECUTIVE DIRECTOR) EXPERIENCE EXPERIENCE Robert D. Millner is Chairman of the Company’s holding company Washington H. Soul Pattinson and Company Limited (WHSP). Robert D. 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. Todd J. Barlow joined the Board of New Hope Corporation Limited on 22 April 2015. He is the Chief Executive Officer and Managing Director of Washington H. Soul Pattinson and Company Limited since 2015. Prior to this, he was the Managing Director of Pitt Capital Partners Limited for five years. OTHER CURRENT LISTED DIRECTORSHIPS ` 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 ` TPG Corporation Limited – Appointed 2000 ` TPG Telecom Limited – Appointed 2020 ` TUAS Limited – Appointed 2020 ` Aeris Resources Limited – Appointed 2022 FORMER LISTED DIRECTORSHIPS IN LAST THREE YEARS ` Australian Pharmaceutical Industries Limited – Appointed 2000, resigned July 2020 ` Milton Corporation Limited – Appointed 1998, resigned October 2021 SPECIAL RESPONSIBILITIES ` Chair of the Board INTERESTS IN SHARES AND OPTIONS ` 5,222,774 Ordinary Shares in New Hope Corporation Limited (comprising 279,559 shares directly held and 4,943,215 shares held through family related interests) ` NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited Todd J. 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 2014. His career has spanned positions in law and investment banking in Sydney and Hong Kong. Todd J. Barlow has a Bachelor of Business and Bachelor of Laws (Honours) from the University of Technology, Sydney. OTHER CURRENT LISTED DIRECTORSHIPS ` Washington H. Soul Pattinson and Company Limited – Appointed 2015 FORMER LISTED DIRECTORSHIPS IN LAST THREE YEARS ` Palla Pharma Limited – Appointed 2015, resigned 2020 SPECIAL RESPONSIBILITIES ` Chair of the Nomination Committee ` Member of Sustainability & People Committee ` Member of the Audit and Risk Committee INTERESTS IN SHARES AND OPTIONS ` 19,900 Ordinary Shares in New Hope Corporation Limited ` NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited 29 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTINFORMATION ON DIRECTORS (CONTINUED) JACQUELINE E. MCGILL AO BSC, MBA, GAICD (INDEPENDENT NONEXECUTIVE DIRECTOR) THOMAS C. MILLNER (NON-EXECUTIVE DIRECTOR) EXPERIENCE EXPERIENCE Jacqui 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. Jacqui McGill is a Non-Executive Director of Goldfields, 29Metals, the Royal Automobile Association of South Australia, and a Trustee of Adelaide Festival Centre. During her executive career she held senior leadership roles with BHP including leadership of BHP Mitsui Coal and Olympic Dam Corporation, as well as other senior leadership roles in BHP’s copper, uranium, and iron ore divisions. Jacqui 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 and was included in the 2020 Australia Day honours list recognising her services for diversity and inclusion. OTHER CURRENT LISTED DIRECTORSHIPS ` 29 Metals – Appointed as Non-Executive Director July 2021 ` Gold Fields Limited – Appointed as an Independent Non- Executive Director November 2021 FORMER LISTED DIRECTORSHIPS IN LAST THREE YEARS ` NIL SPECIAL RESPONSIBILITIES ` Chair of the Sustainability & People Committee ` Member of the Audit and Risk Committee ` Member of Nomination Committee INTERESTS IN SHARES AND OPTIONS ` 50,000 Ordinary Shares in New Hope Corporation Limited ` NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited Thomas C. Millner joined the Board of New Hope Corporation Limited on 16 December 2015. He is Director and Portfolio Manager of Contact Asset Management. He is also a Non- Executive Director of Washington H. Soul Pattinson and Company Limited. Thomas C. Millner has over 20 years’ experience within the financial services and funds management industry and over 10 years as a Director of Australian publicly listed companies. Thomas C. 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 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 ` 4,874,368 Ordinary Shares in New Hope Corporation Limited (comprising 21,153 shares directly held and 4,853,215 shares held through family related interests) ` NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited 30 2022 ANNUAL REPORT NEW HOPE GROUPIAN M. WILLIAMS BEC, LLB, GAICD (INDEPENDENT NON-EXECUTIVE DIRECTOR) STEVEN R. BOULTON (INDEPENDENT NON-EXECUTIVE DIRECTOR) EXPERIENCE EXPERIENCE Ian M. Williams was appointed as a Non-Executive Director of the Company on 1 November 2012. Ian M. 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 a graduate of Sydney University and Oxford University and the Australian Institute of Company Directors. Steven R. Boulton recently joined the Board of New Hope Corporation Limited on 29 July 2022. He is an accomplished CEO and board director with more than 40 years of experience in infrastructure, investment/funds management and asset management sectors. He is Chairman of both SeaSwift, and a Non-Executive Director of Fulton Hogan and Airlie Energy. He is Chair of Lindsay Australia and NXT Building Group, a Director of KGL Resources, 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 ` KGL Resources Limited – Appointed June 2022 FORMER LISTED DIRECTORSHIPS IN THE LAST THREE YEARS ` NIL SPECIAL RESPONSIBILITIES ` Chair of the Audit and Risk Committee ` Member of the Sustainability & People Committee ` Member of Nomination Committee ` Director of New Hope Japan KK INTERESTS IN SHARES AND OPTIONS ` NIL Ordinary Shares in New Hope Corporation Limited ` NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited Steven R. Boulton has a Graduate Diploma in Applied Corporate Governance, a Bachelor of Business (Business Management & HR Management) degree and a Master of Technology Management. He is a Fellow of the Australian Institute of Company Directors, the Governance Institute of Australia and Australian Institute of Managers and Leaders. He is also a Certified Professional of the Australian Human Resources Institute. OTHER CURRENT LISTED DIRECTORSHIPS ` NIL FORMER LISTED DIRECTORSHIPS IN THE LAST THREE YEARS ` NIL SPECIAL RESPONSIBILITIES ` NIL INTERESTS IN SHARES AND OPTIONS ` NIL Ordinary Shares in New Hope Corporation Limited ` NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited 31 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTINFORMATION ON DIRECTORS (CONTINUED) COMPANY SECRETARY DOMINIC H. O’BRIEN BA, LLB (HONS), LLM, GAICD (COMPANY SECRETARY APPOINTED 1 FEBRUARY 2022) Dominic H. O’Brien joined the Company on 1 December 2020 as General Manager, People and Legal. Dominic H. O’Brien was appointed in 2022 as Executive General Manager and Company Secretary, leading the Company’s People, Legal, Company Secretary, Corporate Affairs, Risk and Health & Safety functions. Dominic H. O’Brien has over 23 years’ experience as a legal practitioner and in senior management and executive roles gained in Australia and internationally, having worked at Allens Lawyers, MIM Holdings, Xstrata and Peabody Energy during his career. Dominic H. O’Brien holds a Bachelor of Arts and Bachelor of Laws (Hons) from the University of Queensland, a Master of Laws from the Queensland University of Technology and is a Graduate of the Australian Institute of Company Directors. ROBERT J. BISHOP B.COMM, B.BUS (MAR), GAICD (COMPANY SECRETARY UNTIL 1 FEBRUARY 2022) Robert J. Bishop joined the Company in 2019 as General Manager of Corporate Development and in 2020 was appointed as Chief Financial Officer and Company Secretary, assuming responsibility for the Group’s finance and company secretarial functions. In 2022, Robert J. Bishop was appointed as Chief Executive Officer and ceased being Company Secretary on 1 February 2022. Robert J. 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. 32 2022 ANNUAL REPORT NEW HOPE GROUPREMUNERATION REPORT The information provided in the Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001 (Cth) (Corporations Act). 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 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 2022 financial year are outlined below: NAME Directors POSITIONS HELD COMMENCED CEASED Robert D. Millner Non-Executive Director Chair Todd J. Barlow Non-Executive Director Jacqueline 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 Sustainability and People Committee (SPC) 17 Nov 2020 Thomas C. Millner Non-Executive Director Ian M. Williams Independent Non-Executive Director Chair of the Audit and Risk Committee (ARC) Non-Executive Director of Controlled Subsidiary Steven R. Boulton Independent Non-Executive Director 16 Dec 2015 01 Nov 2012 25 Nov 2019 02 Sep 2019 29 July 2022 Executive KMP Robert J. Bishop1 Chief Financial Officer (CFO) Company Secretary (CoSec) Acting Chief Executive Officer (CEO) 01 Aug 2020 14 Feb 2022 17 Nov 2020 01 Feb 2022 01 Dec 2021 13 Feb 2022 Chief Executive Officer (CEO) 14 Feb 2022 Rebecca S. Rinaldi Acting Chief Financial Officer (CFO) 01 Feb 2022 13 Feb 2022 Dominic H. O’Brien Executive General Manager (EGM) Chief Financial Officer (CFO) Company Secretary (CoSec) Former Executive KMP 14 Feb2022 01 Feb 2022 01 Feb 2022 Reinhold H. Schmidt2 Chief Executive Officer (CEO) 1 Sep 2020 14 Jan 2022 1 2 Robert J. Bishop was Acting CEO for the period 1 December 2021 to 13 February 2022 during the period of personal leave and post resignation of Reinhold H. Schmidt. Reinhold H. Schmidt began a short period of personal leave on 1 December 2021 which became extended to 14 January 2022. Following this period of personal leave, Reinhold H. Schmidt resigned from his position and ceased as KMP effective 14 January 2022. 33 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTREMUNERATION REPORT (CONTINUED) 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 Sustainability and People Committee (SPC, formerly known as the Health, Safety, Environment and People Committee) to regularly review, report and make recommendations to the Board in relation to remuneration. To ensure that remuneration is consistent with current industry practices, the SPC 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. The SPC has procedures in place to ensure that all engagements with independent external remuneration consultants, and recommendations (if any) are free from undue influence. At times, remuneration consultants may be required to interact with management to obtain the relevant information needed to form any remuneration recommendations. In these instances, a Non-Executive Director will always have oversight of interactions between independent consultants and management. The Board confirms that remuneration recommendations made during the 2022 financial year were made free from undue influence as these procedures were adhered to. REVIEW OF REMUNERATION ARRANGEMENTS At the commencement of the 2022 financial year, the SPC sought information and advice (including remuneration recommendations) from independent remuneration advisers, Godfrey Remuneration Group Pty Ltd (GRG) on the matters and for the professional fees set out following: ` KMP remuneration package composition, relativities and quantum – $16,000; ` the review and re-design of STI and LTI plans applicable to KMP and other eligible employees- $58,000. Following the receipt of advice and recommendations from GRG, the SPC proposed revised KMP remuneration arrangements, both in terms of quantum and relative composition, for appointments made to KMP roles during the 2022 financial year. The SPC also proposed adoption of revised STI and LTI plans designed by GRG, together with related documents prepared by GRG to implement and administer the respective plans. The Board consulted with management, considered feedback received from shareholders on remuneration arrangements and ultimately determined to implement the SPC’s recommended proposals. During the review process, awards which might ordinarily have been decided and granted throughout the year were deferred pending final Board decisions arising from the review process with intention that awardees not be prejudiced by any delay to the timing of award grants. The outcomes of the review process and material terms of the revised STI and LTI plans which have been adopted are detailed in this remuneration report. SECURITIES TRADING POLICY The Company has adopted a Securities Trading Policy to assist Directors and certain employees (and their associates) to comply with their obligations under the insider trading prohibitions of the Corporations Act) and to protect the reputation of the Company, its Directors and employees. Specifically, the Company’s Securities Trading Policy prohibits trading in Company securities by certain personnel except during specific trading windows and with written consent. In addition to guidance on inside information and dealing in our securities, the Policy prohibits our Directors and certain employees from entering into margin lending or other secured financing arrangements, short-term trading in, or “short-selling”, our securities, or entering into any hedging arrangement that limits the economic risk of securities or entitlements to acquire our securities (such as options or share rights) including hedging or similar arrangements. The Securities Trading Policy is available on the Company’s website: newhopegroup.com.au/corporate-governance 34 2022 ANNUAL REPORT NEW HOPE GROUP 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 on page 37 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. NAME Current Executive KMP TERM OF AGREEMENT AND NOTICE PERIOD1 BASE REMUNERATION PLUS SUPERANNUATION TERMINATION PAYMENTS2 Robert J. Bishop No fixed-term | 6-month notice period 956,2923 6-months’ base remuneration Rebecca S. Rinaldi No fixed-term | 3-month notice period 516,7243 3-months’ base remuneration Dominic H. O’Brien No fixed-term | 3-month notice period 526,7243 3-months’ base remuneration Former Executive KMP Reinhold H. Schmidt No fixed-term | six month notice period 1,500,0003 Six months’ base remuneration 1 This notice period 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 2022 and is reviewed annually by the SPC. 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 2022 financial year, the aggregate amount expended for Non-Executive Directors’ remuneration was at 54 per cent of this limit. The Board will not seek an increase to the aggregate fee limit at the 2022 AGM. 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 SPC and ARC. Fees paid to Non-Executive Directors are set out in the table below. BOARD AUDIT AND RISK COMMITTEE SUSTAINABILITY AND PEOPLE COMMITTEE (SPC) NOMINATION COMMITTEE CONTROLLED SUBSIDIARY 242,092 143,054 240,992 142,404 55,021 11,004 54,771 10,954 17,341 11,004 17,263 10,954 n/a n/a n/a n/a 47,374 33,013 47,159 32,863 20221 Chair Member 2021 Chair Member 1 On 1 July 2022, the superannuation guarantee percentage increased from 10.0 per cent to 10.5 per cent. 2022 fees include this increase for one month of the 2022 financial year. 35 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTREMUNERATION REPORT (CONTINUED) REMUNERATION STRUCTURE — EXECUTIVE KMP Remuneration of the Executive KMP is underpinned by the Company’s Vision and Core Values. 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 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 We are ethical, honest and can be trusted to do the right thing RESPECT We listen and treat others as we expect to be treated ACCOUNTABILITY 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 36 2022 ANNUAL REPORT NEW HOPE GROUP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 and outcomes. Gateways to reward and KMP Personalised scorecards include strategic annual objectives linking individual and company performance. Performance Measures Individual accountabilities that support the execution of the business strategy. Gateways to performance assessment include: ` Nil fatalities; The Executive KMP receive a fixed amount which is recommended annually by the SPC and set by the Board. ` Nil serious environmental harm; ` Nil serious cultural heritage harm; and ` Threshold EBITDA achieved. 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 achievement of the short-term business objectives. Delivery Competitive market based fixed remuneration comprising base salary, superannuation, and other non-cash benefits. Awards are payable in cash following the release of the Annual Financial results upon the company gateway and company scorecard and individual performance targets being achieved. 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. For the 2022 financial year grant, performance will be measured over a rolling three-year period with reference to a combination of: ` Total shareholder return (TSR) achieved by the Company relative to comparative index. ` Comparative costs control performance assessed by measuring ranking in the top 40 thermal coal mines in Australia; ` Execution of business strategy and ESG objectives assessed by the Board; and ` Risk management and safety and well-being outcomes assessed by the Board. There is also a concurrent service condition alongside the above performance conditions which provides that Rights will lapse if the participant resigns before the end of the performance period. LTI is delivered in Performance Rights which can be exercised into Ordinary Shares upon meeting required performance hurdles and satisfying the requisite service conditions over the performance period. 37 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTREMUNERATION REPORT (CONTINUED) 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 requirements and individual experience and capability, 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; ` Reward performance including actions and behaviours enabling value creation and driving company success; ` 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. The following diagram sets out the remuneration mix of TFR, STI award and LTI award value at target for the Executive KMP for the 2022 financial year. REMUNERATION MIX CEO Other KMP 58% 22% 20% 59% 21% 21% Fixed TFR STI – At risk LTI – At risk 38 2022 ANNUAL REPORT NEW HOPE GROUPVARIABLE EXECUTIVE REMUNERATION — SHORT-TERM INCENTIVES ASPECT DESCRIPTION Form of Award Awards are delivered in Cash. Performance Period The Company’s financial year (12 months). STI Opportunity The target and maximum awards payable for KMP are outlined below: CEO Other KMP OPPORTUNITY AS A % OF TFR TARGET 35.0% 35.0% STRETCH 52.5% 52.5% 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 To enable payment of STI to KMP, key financial and non-financial gateways must be satisfied. The gateways are: ` Nil fatalities; ` Nil serious environmental harm; ` Nil serious cultural heritage harm; and ` Threshold EBITDA achieved Cessation of Employment During a Period Generally, no STI will be awarded if cessation of employment occurs prior to end of the performance period. The Board in its absolute discretion may determine that in other cases of cessation of employment, such as retirement, death or total or permanent disability, awards will be pro-rated with respect to the percent of the Performance Period that has elapsed. Board Discretion The Board retains discretion to increase or decrease, including to nil, the extent of STI awarded to Executive KMP if it forms the view that it is appropriate to do so given the circumstances that prevailed during the Performance Period. Major Corporate Transactions Awards vest pro-rata relative to the percent of the Measurement Period that has elapsed in the event of a change of control transaction going unconditional, unless determined otherwise by the Board. Malus and Clawback STI awards may be reduced or cancelled, and action may be taken to recover awards in the event of erroneous or misleading data, misconduct, misstatement of accounts, serious reputational damage or corporate failure. Company and Individual KPIs The Company KPIs assess wholistic Company performance referencing Group financial, costs, production, health, safety, risk and controls, environment and community measures. The Individual KPIs include specific safety, operational, project and strategic measures in addition to the level of demonstration of the Company’s Core Values and behaviours. KPI components are weighted. 39 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTREMUNERATION REPORT (CONTINUED) SHORT-TERM INCENTIVE OUTCOMES – LINK TO PERFORMANCE SUMMARY OF 2022 FINANCIAL YEAR STI PERFORMANCE MEASURES AND OUTCOMES Performance is assessed by examination of outcomes against threshold, target and stretch levels across a range of measures. The measures are wholistic to the Company’s activities and are specified at a Company and Individual level. Targets are determined annually at levels which appropriately represent improved performance over prior periods to drive actions and initiatives providing continuous improvement outcomes. Stretch is set at levels which would represent material improvement. An outline of the relevant range of measure is set out below. The SPC and Board considers that these measures and their relevant threshold, target and stretch levels create a strong link between performance and reward over the short to medium-term and focus management attention on delivering against short-term goals that underpin the success of the Company. Non-Financial TARGET WEIGHTING 10% MEASURE Health, Safety, Environment & Community Risk, Audit and Controls 10% DESCRIPTION THRESHOLD TARGET STRETCH OUTCOME Rewards continuous improvement on HSEC measured through a balance of lead and lag indicators. Indicators include frequency and potential/severity analysis of: all injuries, total recordable injuries, hazard identification and reduction, environmental incidents, and non-vexatious community complaints. Initiatives designed to improve HSEC performance and effectiveness of actions are also considered. Rewards effective mitigation of existing risks and detect emerging risks through assessment and control frameworks. Indicators include execution and effectiveness of risk plan and critical control activities, timely completion of audit corrective actions, and completion rate of training initiatives designed to educate employees about risk areas and improve risk mitigation practices and outcomes. Financial Group EBITDA Group Cost/ Tonne Overburden (Prime) Group Production 20% Rewards improvement to earnings. 20% 10% Rewards improvement to cost management. Rewards improvement to mine-planning. 10% Rewards improvement to production. Total Company Performance 80% 110% 40 2022 ANNUAL REPORT NEW HOPE GROUPIndividual measures assess the efforts and effectiveness of actions and outcomes against targets set by the SPC and approved by the Board which focus on improvement in strategy, culture and people, diversity and inclusion, safety, risk management, sustainability, financial stability and value creation. KMP Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien TARGET WEIGHTING OUTCOME THRESHOLD TARGET STRETCH 20% 20% 20% 2022 FINANCIAL YEAR PERFORMANCE COMMENTARY Group safety performance measured by all injury frequency rate (AIFR) and total recordable injury frequency rate (TRIFR) improved. Other targeted safety improvement initiatives focussed on improving hazard and incident investigation and reporting by potential were implemented.  Revised company policy and governance structures to support transparent determination and implementation of community engagement programs and activities were implemented. Community complaints declined. Environmental reporting frameworks were improved.  Environmental incidents declined excluding water discharge during flood events. Due to sites’ water management practices, water quality was not impacted and the regulator determined no action to be taken.  The SPC recommended and the Board agreed that stretch health, safety, environment and community performance was achieved. Transparency and reporting around risk plan and critical control activities improved during the year. Targeted actions were largely achieved throughout the year with delays to action completion dates occurring due to delays in supply of materials required to complete construction and commissioning of operational improvements. A detailed equipment fire risk review was completed during the year with all improvement actions adopted in full and completed on time. Training initiatives designed to educate employees about risk areas and improve risk mitigation practices and outcomes were delivered with completion and minimum pass rates achieved. The SPC recommended and the Board agreed that targeted risk, audit and controls community performance was achieved. The Group achieved stretch performance against targeted EBITDA and cost reduction performance.  Overburden (prime) and production performance were adversely impacted by uncontrollable, extreme weather events and labour availability disruption due to COVID-19.  During the year, Management implemented mitigation strategies which were successful in reducing the impacts of the uncontrollable events.  If the uncontrollable events impacts were excluded, performance in excess of target was achieved.  The SPC recommended and the Board agreed that financial targets were exceeded by an overall average factor of 1.41. The SPC recommended and the Board agreed, in consultation with the CEO, to implement a detailed action plan of targeted improvements and initiatives to be delivered with achievements and outcomes assessed on scorecard basis. Accountability for delivery rested with the CEO with specific areas of responsibility delegated to KMP and other senior management roles. The developed and agreed action plan was wholistic encompassing targeted improvements in strategy definition and implementation plans, company culture and values focussed decision making, people engagement, Bengalla enterprise agreement re-negotiation without disruption, diversity and inclusion initiatives to improve participation by under-represented groups, safety governance and due diligence practices, enterprise risk framework review, risk management and controls effectiveness, responsible operator practices, rehabilitation outcomes, environmental performance, sustainability reporting, marketing strategy, financial stability and capital management strategy development and articulation, investor and proxy advisory engagement, and value creation through successful execution of transactions and strategy. The collective actions and achievements of management and the Company are detailed elsewhere in this report. The SPC recommended and the Board agreed that targeted performance was met and/or exceeded across the range of detailed measures. The Board consequently determined individual performance outcomes as set out in the individual performance measures table above. Individual STI awards were calculated accordingly. In light of the performance outcomes detailed in the table above, the Board has determined to make the following Executive KMPs’ STI awards in relation to the 2022 financial year: STI MAXIMUM $ STI PAYABLE $ STI PAYABLE % STI FORFEITED $ STI FORFEITED % Current Executive KMP Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien 502,053 271,280 276,530 452,518 244,514 258,464 90.1% 90.1% 93.5% 49,535 26,766 18,066 9.9% 9.9% 6.5% 41 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTREMUNERATION REPORT (CONTINUED) SPECIAL INCENTIVE AWARDS  In light of the significant efforts and achievements across the Group and the exceptional returns generated throughout FY22, the SPC recommended and the Board determined to make special incentive awards payments to all employees in the Group.  The Board considered it appropriate to exercise a discretion to provide all employees with a special incentive award additional to determined STIP awards to demonstrate the link between reward and the success of the Group and to reinforce the Group’s employee value proposition that the Group’s remuneration and reward arrangements are designed to attract and retain motivated and talented employees.  The special incentive awards paid to all employees In the Group were structured as either a fixed cash payment or a cash payment calculated as a percentage of FY22 STIP award achieved, depending upon role in the Group.  Special incentive awards were made to the Executive KMP as set out in the table below. The awards to Executive KMP were delivered as a restricted right which can be exercised into Ordinary Shares upon meeting a 12-month service condition from the date of award. The award will be recognised over the service period, in line with the attached 12-month service condition. SPECIAL INCENTIVE AWARD $ PERCENTAGE OF TFR $ RESTRICTED RIGHTS AWARDED Current Executive KMP Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien 226,259  122,257  129,232  24%  24%  25%  54,986  29,711  31,406  *  The Share Price used to calculate the grant of Restricted Rights was based on a volume weighted average price (VWAP) of $4.1148 over the 20 trading days preceding 1 August 2022.  VARIABLE EXECUTIVE REMUNERATION — LONG-TERM INCENTIVES ASPECT Instrument DESCRIPTION LTI is delivered in Performance Rights which can be exercised into Ordinary Shares upon meeting required performance hurdles and satisfying the requisite service conditions over the measurement period. The Rights are “Indeterminate Rights” which may be settled in the form of a Company Share (including a Restricted Share), or cash equivalent, upon valid exercise. Award Opportunity The target and maximum awards payable for KMP are outlined below: CEO Other KMP Grant Frequency LTI is granted annually. OPPORTUNITY AS A % OF TFR TARGET 37% 35% STRETCH 74% 70% Grant calculation The number of Rights in each Tranche of LTI to be granted are calculated via the application of the following formula: Number of Rights = Total Fixed Remuneration (TFR) x LTI % ÷ 20-day VWAP Where LTI % is the maximum LTI opportunity as a % of TFR. The Share Price used to calculate the grant of Rights was based on a volume weighted average price (VWAP) of $1.9005 over the 20 trading days preceding 1 August 2021. Measurement Period Three financial years from 1 August 2021 to 31 July 2024. Service Period The Executive KMP must remain an employee of the Company during the performance period to be eligible for LTI award vesting. 42 2022 ANNUAL REPORT NEW HOPE GROUPASPECT DESCRIPTION Performance Conditions For 2022 financial year LTI grants, the following performance conditions apply: Tranche 1 Performance Rights (55% weighting at Target) are subject to an TSR vesting condition. This vesting condition ranks the Company’s TSR growth over the performance period against the TSRs of companies in a blend of Global Coal and ASX100-200 companies. The vesting scale for this performance vesting metric is as follows: PERFORMANCE LEVEL COMPANY’S TSR OVER MEASUREMENT PERIOD VESTING % OF TRANCHE Stretch P75 Between Target and Stretch > P50 & < P75 Target Below Target P50 < P50 100% Pro-rata 50% 0% Tranche 2 Performance Rights (15% weighting) are subject to a comparative costs control vesting condition. This vesting condition measures the statistical ranking of Bengalla Mine’s cost control performance compared to Australia’s top 40 export thermal coal mines. The vesting scale for this performance vesting metric is as follows: PERFORMANCE LEVEL BENGALLA MINE’S COST POSITION RELATIVE TO AUSTRALIA’S TOP 40 EXPORT THERMAL COAL MINES OVER MEASUREMENT PERIOD VESTING % OF TRANCHE Stretch ≤ 4% Between Target and Stretch < 7% & > 4% Target = 7% Between Threshold and Target < 10% & > 7% Threshold = 10% 100% Pro-rata 50% Pro-rata 25% Below Threshold Tranche 3 Performance Rights (7.5% weighting) are subject to a strategic vesting condition. > 10% 0% The vesting scale for this performance vesting metric is as follows: Performance Level Company Strategic Objectives % Vesting of Tranche Stretch Target Threshold Operational performance and returns from transactions executed materially exceed transaction objectives 100% Transactions executed achieve target returns and synergies Implementation of strategic plan actions 50% 25% Tranche 4 Performance Rights (7.5% weighting) are subject to an ESG vesting condition. The vesting scale for this performance vesting metric is as follows: PERFORMANCE LEVEL COMPANY ESG OBJECTIVES % VESTING OF TRANCHE Stretch Target Threshold Material improvement in ESG practices, disclosure and performance (e.g., increase in sustainability analytics scores and other independent recognition) Achieve key actions from ESG improvement plan Complete review of ESG disclosure and practices/strategy and document improvement plan 100% 50% 25% 43 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTREMUNERATION REPORT (CONTINUED) ASPECT DESCRIPTION Performance Conditions Tranche 5 Performance Rights (7.5% weighting) are subject to a safety vesting condition. The vesting scale for this performance vesting metric is as follows: PERFORMANCE LEVEL COMPANY SAFETY OBJECTIVES % VESTING OF TRANCHE Stretch Target Threshold Material improvement in safety metrics over period, and third-party audit confirms effectiveness of safety governance and due diligence practices. Improvement in safety metrics year on year over the measurement period, and safety metrics remain below industry average. Implement recommendations from the Safety Governance Practices and Due Diligence review, and no fatalities during the measurement period caused by failure of Company Health and Safety Management System. 100% 50% 25% Tranche 6 Performance Rights (7.5% weighting) are subject to a risk management vesting condition. The vesting scale for this performance vesting metric is as follows: PERFORMANCE LEVEL COMPANY RISK MANAGEMENT OBJECTIVES % VESTING OF TRANCHE Stretch Target Third party audit confirms effectiveness of the Risk Framework and Practices at an industry best practices level. 100% Third party audit confirms compliance with Risk Framework and Practices, and all material risk actions completed on time as per framework deadlines. 50% 25% Threshold Implement recommendations from the Risk Framework and Practices review. 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 determine that in other cases of cessation of employment, such as retirement, death, total or permanent disability, awards will result in retaining unvested Performance Rights for testing at the end of the performance period. Malus and Clawback LTI awards may be reduced or cancelled and action may be taken to recover vested awards in the event of erroneous or misleading data, misconduct, misstatement of accounts, serious reputational damage or corporate failure. Retesting There is no retesting applicable to any LTI award. 44 2022 ANNUAL REPORT NEW HOPE GROUPASPECT DESCRIPTION Dividend and Voting Entitlements Performance Rights carry no entitlement to voting prior to being exercised into Ordinary Shares. At the time and to the extent Performance Rights are vested, the Company will make a dividend equivalent payment in respect of dividends that would have been paid on the shares underlying vested rights during the measurement period. Participants also receive dividend equivalent payments in respect of vested Rights at the time a dividend is paid by the Company. Major Corporate Transactions Board Discretion Awards vest pro-rata relative to the percent of the Measurement Period that has elapsed as well as the change in share price up to the point of a change of control transaction going unconditional, unless determined otherwise by the Board. The Board retains discretion to increase or decrease, including to nil, the extent of vesting in relation to each Tranche of Performance Rights if it forms the view that it is appropriate to do so given the circumstances that prevailed during the Measurement Period. In exercising this discretion, the Board shall take into account, amongst other factors it considers relevant, Company performance from the perspective of Shareholders over the relevant Measurement Period. The performance conditions detailed on page 43–44 are wholistic to the Company’s activities. Targets are determined at levels which appropriately represent improved performance over prior periods to drive actions and initiatives providing continuous improvement outcomes. Stretch is set at levels which would represent material improvement. The SPC and Board considers that these measures and their relevant threshold, target and stretch levels create a strong link between performance and reward over the long-term and encourage sustainable, long-term value creation through equity ownership. 45 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTREMUNERATION REPORT (CONTINUED) REMUNERATION – STATUTORY TABLES Details of the remuneration of Directors and the Executive KMP of the Company during the 2022 financial year are set out below. SHORT-TERM BENEFITS LONG-TERM BENEFITS POST- EMPLOYMENT OTHER SHARE-BASED PAYMENTS CASH SALARY AND FEES CASH BONUS NON- CASH BENEFITS1 LONG SERVICE LEAVE SUPER- ANNUATION2 TERMINATION BENEFITS3 EQUITY SETTLED SHARES TOTAL $ 2022 Non-Executive Directors Robert D. Millner Todd J. Barlow4 Jacqueline E. McGill AO Thomas C. Millner Ian M. Williams Steven R. Boulton6 220,000 130,000 155,759 130,000 220,000 – Total Non-Executive Directors 855,759 Other KMP – – – – – – – – – – – – – – – – – – – – – 22,092 13,054 15,641 13,054 22,092 – 85,933 Robert J. Bishop5 807,899 452,518 29,061 26,518 25,129 Rebecca S. Rinaldi6 245,154 244,514 21,899 Dominic H O’Brien6 250,716 258,464 11,991 8,218 5,962 13,959 10,280 – – – – – – – – – – – – – – – – – 242,092 143,054 171,400 143,054 242,092 – 941,692 504,530 1,845,655 111,789 645,533 134,632 672,044 Reinhold H. Schmidt3 & 6 738,216 – – – 11,784 410,680 (275,244) 885,436 Total Other KMP 2,041,985 955,496 62,951 40,698 61,152 410,680 475,707 4,048,668 Total Remuneration – 2022 2,897,744 955,496 62,951 40,698 147,085 410,680 475,707 4,990,360 2021 Non-Executive Directors Robert D. Millner Todd J. Barlow7 Jacqueline E. McGill AO Thomas C. Millner Ian M. Williams William H. Grant OAM6 220,000 130,000 153,839 130,000 220,000 46,357 Total Non-Executive Directors 900,196 Executive Directors Shane O. Stephan8 & 9 114,187 Other KMP – – – – – – – – – – – – – – – – – – – – – – 20,992 12,404 14,680 12,404 20,992 4,404 85,876 34,280 2,036 3,616 Reinhold H. Schmidt6 & 8 1,355,848 595,019 113,904 24,402 22,163 Robert J. Bishop5 & 8 541,460 206,412 18,323 12,387 24,648 – – – – – – – – – – – – – – – – – 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 Andrew L Boyd8 & 9 Benjamin C. Armitage8 & 9 303,467 180,765 – 125,734 5,547 9,039 519,349 (147,790) 815,346 – 7,941 (41,059) 9,039 400,008 (69,798) 486.896 Total Other KMP 2,381,540 801,431 265,902 1,277 64,889 919,357 (151,449) 4,282,947 Total Remuneration – 2021 3,395,923 801,431 300,182 3,313 154,381 919,357 (184,202) 5,390,385 46 2022 ANNUAL REPORT NEW HOPE GROUP                1 Non-cash benefits include movements in annual leave provisions and fringe benefit tax incurred by the Company related to property under termination arrangements. 2 Superannuation guarantee requirements for the 2022 and 2021 financial years is in line with the Australian Taxation Office’s legislated requirements. 3 Termination payments aligned to contractual terms and conditions and finalised in individual deed of release. 4 Thomas C. Millner elected to waive his committee fees for the 2022 financial year. 5 Robert J. Bishop was Acting CEO for the period from 1 December 2021 to 13 February 2022 included acting allowance of $230,000 p.a (pro rata), Effective 14 February 2022 Robert J. Bishop was appointed permanently to the position of CEO. 6 Individuals who commenced or ceased as KMP during the 2022 financial year. Refer to page 33 for commencement and cessation dates. 7 Todd J. Barlow’s base salary excludes Committee fees of $20,000 (2021: $20,000) for his services as member of the Audit and Risk Committee and member of the Sustainability, and People Committee. He elected to waive his remuneration for these services. 8 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. 9 Individuals who commenced or ceased as KMP during the 2021 financial year. 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. KMP NAME Robert J. Bishop LTI SERIES GRANT DATE VESTING DATE NUMBER GRANTED VALUE PER SHARE NUMBER VESTED VESTED % NUMBER FORFEITED FORFEITED % NUMBER LAPSED LAPSED % 2021 Dec-20 Aug-24 133,169 $0.761 2022 Sep-22 Aug-24 173,425 2022 Sep-22 Aug-24 141,893 Rebecca S. Rinaldi Dominic H. O’Brien 2022 Sep-22 Aug-24 80,714 2022 Sep-22 Aug-24 66,039 2022 Sep-22 Aug-24 97,207 2022 Sep-22 Aug-24 79,533 $5.161 $5.502 $5.161 $5.502 $5.161 $5.502 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – TOTAL AWARD VALUE IN FUTURE FINANCIAL YEARS3 101,208 894,872 780,412 416,485 363,214 501,588 437,432 1 Fair values at grant date are 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. 2 Share price at grant date 3 Calculated with reference to the grant date fair value. This value may change depending on the actual share price at vesting date. FORMER KMP LTI SERIES GRANT DATE VESTING DATE NUMBER GRANTED1 VALUE PER SHARE NUMBER VESTED VESTED % NUMBER FORFEITED FORFEITED % NUMBER LAPSED LAPSED % TOTAL AWARD VALUE IN FUTURE FINANCIAL YEARS2 2021 Dec-20 Aug-24 414,056 $0.76 – – 414,056 – – – – NAME Reinhold H. Schmidt2 1 Fair values at grant date are 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. 2 Ceased as KMP 14 January 2022 47 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTREMUNERATION REPORT (CONTINUED) EQUITY HOLDINGS The tables below show the number of Performance Rights (STI and LTI) and shares in New Hope Corporation Limited that were held during the 2022 financial year by KMP and their related parties either directly, indirectly or beneficially. PERFORMANCE RIGHTS HOLDINGS LTI – KMP NAME BALANCE AT THE START OF THE YEAR GRANTED AS REMUNERATION VESTED FORFEITED LAPSED BALANCE AT THE END OF THE YEAR UNVESTED Robert J. Bishop 133,169 Rebecca S. Rinaldi Dominic H. O’Brien – – 315,318 146,753 176,740 – – – – – – – – – 448,487 448,487 146,753 146,753 176,740 176,740 PERFORMANCE RIGHTS HOLDINGS LTI – FORMER KMP NAME BALANCE AT THE START OF THE YEAR GRANTED AS REMUNERATION VESTED FORFEITED LAPSED BALANCE AT THE END OF THE YEAR UNVESTED Reinhold H. Schmidt 414,056 – – (414,056) – – – SHAREHOLDING NAME BALANCE AT THE START OF THE YEAR PURCHASED/ (SOLD) RECEIVED ON THE VESTING OF PERFORMANCE RIGHTS CEASED AS KMP BALANCE AT THE END OF THE YEAR Robert D. Millner 4,177,774 1,045,000 Todd J. Barlow 19,900 – Jacqueline E. McGill AO 30,000 20,000 Thomas C. Millner 4,004,368 870,000 Ian M. Williams Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien – – – – – – – 150,000 – – – – – – – – – – – – – – – – 5,222,774 19,900 50,000 4,874,368 – – – 150,000 SHARES ISSUED ON THE VESTING OF PERFORMANCE RIGHTS Since the end of the 2022 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 2022 financial year, nor were there any outstanding loans as at 31 July 2022. VOTING AT THE COMPANY’S 2021 ANNUAL GENERAL MEETING At the AGM held on 18 November 2021, shareholders approved the resolution to pass the 2021 Remuneration Report by 89.16 per cent. End of Remuneration Report 48 2022 ANNUAL REPORT NEW HOPE GROUPNON-AUDIT SERVICES Deloitte Touche Tohmatsu has acted as auditor for the Group for the entire 2022 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 2022 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 32): 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 Advisory Services Total 2022 2021 641,000 538,669 264,233 127,667 905,233 666,336 10,000 105,000 10,000 105,000 442,285 51,500 442,285 51,500 1,357,518 822,836 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 51. ROUNDING 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. 49 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT        MEETINGS OF DIRECTORS The following table sets out the number of meetings of the Company’s Directors held during the year ended 31 July 2022 and the number of meetings attended by each Director: FULL MEETINGS OF DIRECTORS AUDIT AND RISK COMMITTEE SUSTAINABILITY AND PEOPLE COMMITTEE NOMINATION COMMITTEE HELD ATTENDED HELD ATTENDED HELD ATTENDED HELD ATTENDED Robert D. Millner Todd J. Barlow Jacqueline E. McGill AO Thomas C. Millner Ian M. Williams Steven R. Boulton1 1 Appointed on 29 July 2022  14 14 14 14 14 – 14 14 13 14 14 – – 5 5 – 5 – – 5 5 – 5 – – 4 4 – 4 – – 3 4 – 4 – – 1 1 – 1 – – 1 1 – 1 – Signed at Sydney, 19 September 2022, in accordance with a resolution of Directors. R.D. Millner Director 50 2022 ANNUAL REPORT NEW HOPE GROUP Deloitte Touche Tohmatsu ABN 74 490 121 060 Level 23, Riverside Centre 123 Eagle Street Brisbane, QLD, 4000 Australia Deloitte Touche Tohmatsu ABN 74 490 121 060 Phone: +61 7 3308 7000 Level 23, Riverside Centre www.deloitte.com.au 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 Level 16, 175 Eagle Street Brisbane, QLD, 4000 19 September 2022 Dear Board Members, 19 September 2022 Dear Board Members, Auditor’s Independence Declaration to New Hope Corporation Limited In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of New Hope Corporation Limited. Auditor’s Independence Declaration to New Hope Corporation Limited As lead audit partner for the audit of the financial report of New Hope Corporation Limited for the year ended In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration 31 July 2022, I declare that to the best of my knowledge and belief, there have been no contraventions of: of independence to the directors of New Hope Corporation Limited. (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and As lead audit partner for the audit of the financial report of New Hope Corporation Limited for the year ended 31 July 2022, I declare that to the best of my knowledge and belief, there have been no contraventions of: (ii) any applicable code of professional conduct in relation to the audit. (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. Yours faithfully, Yours faithfully, DELOITTE TOUCHE TOHMATSU DELOITTE TOUCHE TOHMATSU Stephen Tarling Partner 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. Liability limited by a scheme approved under Professional Standards Legislation. 41 New Hope Group 2022 Annual Financial Report Member of Deloitte Asia Pacific Limited and the Deloitte organisation. 41 New Hope Group 2022 Annual Financial Report 51 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORT The Group is pleased to present its Tax Contribution Report for the financial year ended 31 July 2022. The Group considers that this disclosure, as a ‘large’ business under the Voluntary Tax Transparency Code, assists stakeholders in understanding its position as a responsible corporate taxpayer and is a key part of its social and economic responsibility. Our guiding principle in relation to taxation is to pay the right amount of tax at the appropriate time. We will comply with all tax obligations and engage in a constructive manner with the tax authorities. The Group’s core values underpin the execution of the strategic vision and guide our decisions and actions. These principles are critical to the successful management of our tax affairs. TAX POLICY AND GOVERNANCE APPROACH TO TAX Our approach to tax is aligned with our Code of Conduct and our long term business strategy. ` New Hope acts to pay the right amount of tax, in the right place, at the right time. ` We comply with our legal obligations for tax, we file our tax returns on time with full disclosure of all relevant matters, and pay our taxes on time. ` The Group has a low risk threshold in respect of taxation matters. ` The Group’s approach to tax compliance, governance and risk is focused on people. A flat management structure and clear understanding of responsibilities by those involved in managing the tax affairs of the Group is key to successful tax management for the Group. TAX GOVERNANCE The Group’s tax affairs are overseen by the Board of Directors who approve the overall tax strategy and appetite for tax related risk. Executive management are responsible for ensuring that resources are capable of accurately and effectively discharging all tax related obligations in line with the overall tax strategy. The executive team employs finance personnel with relevant experience and engages external consultants when appropriate. Tax governance is managed within the Group’s broader governance processes and our Corporate Governance Statement can be found at: www.newhopegroup.com.au/content/investors/corporate- governance. TAX STRATEGY The key elements of New Hope’s tax strategy are to: ` Effectively manage risk by applying our approach to tax listed above; ` Observe all applicable laws, rules, regulations and disclosure requirements; ` Apply diligent professional care and judgment to arrive at well-supported conclusions; ` Develop and foster good working relationships with tax authorities, government bodies and other relevant parties; and ` Seek expert advice on any positions where tax law is unclear or subject to interpretation, and ensure positions ultimately adopted are supportable and well documented. INTERNATIONAL RELATED PARTY DEALINGS The Group’s international party dealings are limited to dealings with a subsidiary in Japan which provide coal sales marketing support. The related party transactions are at arm’s length terms, and all related party transaction are reviewed by the tax function to ensure compliance with the relevant tax authorities. Our international transactions are disclosed in our tax returns and in the OECD lodgements in each country. 52 2022 ANNUAL REPORT NEW HOPE GROUP In line with the Group’s record earnings performance in the year ended 31 July 2022, total tax contributions increased to $626.5 million from $138.1 million in the previous financial year. ` Effective tax rate: 29.8 per cent (2021: 28.4 per cent) ` Corporate tax payable: $389.0 million (2021: $24.6 million payable) ` Mining royalties paid: $178.8 million (2021: $60.6 million) CORPORATE TAX ROYALTIES $389 MILLION UP 1481% $181.8 MILLION UP 194% TAX CONTRIBUTIONS SUMMARY YEAR ENDED Corporate Tax Corporate Tax – adjustment from prior years Mining Royalties¹ Oil Royalties Employee Taxes Withheld Fringe Benefits Tax Payroll Tax Other Taxes, Rates and Levies Total Tax Contributions 2022 ’000 389,050 (2,712) 178,795 2,956 38,115 1,193 6,236 12,907 626,540 2021 ’000 24,669 (3,582) 60,615 1,346 36,081 1,712 5,930 11,367 138,138 1 Mining Royalties includes amounts paid to third party landholders in line with State legislation requirements. 53 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTSUSTAINABILITY REPORT For the year ended 31 July 2022 5454 2022 ANNUAL REPORT NEW HOPE GROUP 2022 ANNUAL REPORT NEW HOPE GROUPSince our first Sustainability Report was published within our 2017 Annual Report, we have worked to improve the quality of our sustainability reporting each year, endeavouring to provide further transparency about the environmental, social and governance matters which are most relevant to our stakeholders. In recent years we published a standalone Sustainability Report, however, in 2022 we are again including our Sustainability Report within our Annual Report. This will allow the Sustainability Report to reach our shareholders at the same time as our core published reporting. All content within this Sustainability Report is subject to a detailed internal review and approval process involving subject matter experts and relevant executives. The Board reviews the disclosures to satisfy itself that the Sustainability Report provides a balanced, accurate and relevant view of our sustainability performance and approves its publication. As with the rest of our Annual Report, this Sustainability Report applies to the 1 August 2021 to 31 July 2022 reporting period. OUR APPROACH TO SUSTAINABILITY Each year, we review and identify the environmental, social and governance (ESG) issues which are material to the decisions of our stakeholders, communities and the long-term sustainability of our business. This process is informed by the following frameworks: ` The United Nations Sustainable Development Goals (UN SDGs) ` Global Reporting Initiative (GRI) Standards (including the GRI’s latest impact materiality guidance) ` Taskforce on Climate-related Financial Disclosures (TCFD) (through separate reporting). ` Group Risk Management Framework and guidance provided by key bodies, including the International Council on Mining and Metals (ICMM). While our reporting on sustainability is continually being refined, we have strived to align our approach with disclosure of sustainability metrics and outcomes in accordance with industry specific GRI Standards (GRI-12), which link to UNSDGs. For a full listing of sustainability issues and the associated links to the reporting frameworks, refer to the Sustainability section of our website. The material topics which have been included within this Sustainability Report following this review are: ENVIRONMENT ` Rehabilitation ` Waste and recycling management ` Water stewardship ` Emissions COMMUNITIES ` Community engagement ` Economic development of local and regional communities OUR PEOPLE ` Health, safety, and wellbeing ` Mental health and wellbeing ` Diversity of board and workforce 55 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT Beyond the scope of this report, more extensive data and information about our approach to sustainability will be progressively added to the Sustainability section of our website to provide readily accessible information to our stakeholders. We intend to continue to review the materiality of specific sustainability related issues to ensure we respond to evolving stakeholder and business priorities and expectations. OPERATIONS WITHIN THE SCOPE OF THIS REPORT Unless otherwise specified, the following operations are included within the scope of information provided in this report: ` Bengalla Mine – Coal mining and rehabilitation and coal marketing1,2 ` New Acland Mine – Coal mining and rehabilitation and coal marketing (currently in care and maintenance)1 ` West Moreton Operations (Jeebropilly, New Oakleigh and Chuwar) – Rehabilitation ` North Surat – Exploration and potential future development ` Queensland Bulk Handling – Port facility ` Bridgeport Energy – Oil and gas exploration and production ` Acland Pastoral Company and Bengalla Agricultural Company – Agriculture. Data tables in the Sustainability Report will report at a Group level, unless specific assets are explicitly called out. During the reporting period, New Hope divested its 90 per cent interest in the Lenton/Burton development project. Accordingly, Lenton/Burton is not included in this report or in data relating to prior comparative periods. ENTITIES REFERRED TO IN THIS REPORT In this report: ` “New Hope” or the “Company” refers to New Hope Corporation Limited and, as the context requires, New Hope’s subsidiary entities. ` “Bengalla” refers to the Bengalla Mine and also refers to its operator, the Bengalla Mining Company Pty Ltd, in which a wholly-owned New Hope subsidiary holds an 80 per cent interest. ` “Bridgeport” refers to Bridgeport Energy Pty Ltd and its subsidiary entities. Bridgeport is a wholly-owned subsidiary of New Hope. ` “New Acland” refers the New Acland Mine and also refers to its operator, New Acland Coal Pty Ltd, which is a wholly- owned subsidiary of New Hope. ` “QBH” refers to the Queensland Bulk Handling facility and also refers to its operator, Queensland Bulk Handling Pty Ltd. QBH is a wholly-owned subsidiary of New Hope. KEY SITE: Due to the scale of Bengalla and New Acland relative to the other parts of our business, the disclosures within this report largely focuses on the performance of these two operations, with references to other assets’ performance by exception. New Hope subsidiaries manage the Bengalla Mine and hold an 80 per cent interest in the mine through the Bengalla Joint Venture. For the purposes of this report, data relating to the Bengalla Mine is reported on an operational control (or 100 per cent) basis, rather than based on New Hope’s effective 80 per cent interest, unless otherwise stated. 1 2 56 2022 ANNUAL REPORT NEW HOPE GROUPGOVERNANCE New Hope’s Board oversees and is responsible for sustainability performance against our business objectives, purpose, and values. The Sustainability and People Committee (SPC), which comprises three members of the New Hope Board, oversees, monitors and reviews the Company’s practices and governance in the area of sustainability, environment, climate change, social performance and human rights and security. The charter for the SPC is available on the Company’s website. The SPC also provides input into our annual materiality assessment of ESG issues and receives an update on findings of external reviews to validate the priority material sustainability topics. The implementation of our sustainability priorities is carried out by senior management. The Company seeks to adopt leading practice and contemporary governance standards, and apply these in a manner consistent with our culture and values. Further information about the governance of the Company is provided in the Company’s Corporate Governance Statement which is available in the Corporate Governance section of our website. The Company’s governance framework guides our people and partners to uphold our expectation to act fairly, ethically and in accordance with the law. The framework includes a ‘Speak Up’ Policy (Whistleblower Policy) to encourage the reporting of potential misconduct, an Anti-Bribery and Corruption Policy, a Modern Slavery Policy and a range of other policies to ensure that our commitment to uphold the highest ethical business practices is fulfilled. 57 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT ENVIRONMENT REHABILITATION Through our mining activities, the most visible interaction we have with the environment is land disturbance. As part of our commitment to being a responsible operator and in line with our environmental licences, we undertake progressive rehabilitation of our mined land. To achieve this, we have developed a range of practical, achievable solutions which ensure responsible rehabilitation practices are implemented throughout the mine life cycle. We work to restore and improve land features including contours and vegetation, to optimise water drainage and maximise productive soil characteristics of the disturbed land to support long-term environmental resilience. We take a precautionary approach to environmental management and comply with all relevant environmental laws and regulations. We recognise our operations exist in a broader ecosystem, and therefore also support the preservation and enhancement of nearby ecosystems through funding contributions and volunteering of time. DEVELOPMENT OF A KOALA HABITAT CORRIDOR AT NEW ACLAND In the reporting period, through an Enforceable Undertaking agreement with the Queensland Department of Environment and Science (DES), relating to a dispute over the authorisation of mining in West Pit, New Hope committed to invest $2 million into the development of a koala habitat corridor at the New Acland site. The project will increase rehabilitation outcomes from previously mined areas, and connect and substantially expand existing koala habitats from Lagoon Creek to native vegetation north of Acland town. 100 hectares of land will be planted with eucalyptus, paper bark and other refuge trees, designed to support koala habitat and enhance the standard of rehabilitation post-mining. Bottle Tree Hill, which is an existing conservation area, will also be protected in perpetuity. DISTURBED AND REHABILITATED LAND1 Having moved into a care and maintenance phase, planned rehabilitation activities continued as planned at New Acland during the reporting period. ESTABLISHING HIGH-DENSITY WOODY VEGETATION AT BENGALLA At Bengalla, New Hope progressively rehabilitates land at a rate consistent with the rate of mine site development. This ensures the area of disturbed land is minimised during the active life of the mine. In the reporting period, 27 hectares were rehabilitated, which is slightly greater than in previous years. Consistent with the environmental licence, rehabilitation activities include establishment of high-density woody vegetation areas, which were not present immediately prior to mining operations. This provides an enhanced and nature- positive outcome. To date, approximately 56 hectares of high- density woody vegetation have been established, improving visual amenity for the towns of Muswellbrook and Denman, and supporting habitat corridors for native fauna as the stands mature. Compared with pastoral grassland, high-density woody vegetation supports greater ecosystem biodiversity and resilience. A total area of 308 hectares has been rehabilitated to pastoral and high-density woody vegetated land at Bengalla since 2005. As a responsible operator, we believe in the importance of supporting the resilience of the land on which we operate, and the broader natural environment. Recognising this, Bengalla has supported a trial seed mulching program to rehabilitate land surrounding Lake Liddell, with $21,575 donated to the program through the Bengalla Community Development Fund. This initiative supports biodiversity and resilience of the local ecosystem. INDICATORS GROUP TOTAL NEW ACLAND BENGALLA WEST MORETON BRIDGEPORT Total cumulative land disturbed (ha) Total land rehabilitated during the reporting year (ha) Total cumulative land rehabilitated (ha) <4,128 1,524 27 – 2,024 690.2 963 27 308 1,441 <200 – 1,008 – 18 1 Only sites remaining under New Hope control are shown. Land is counted as rehabilitated based on certification processes applying for the relevant site, meaning rehabilitation activities may be ongoing without necessarily being certified during the reporting period. 58 2022 ANNUAL REPORT NEW HOPE GROUP WASTE COLLECTION AND RECYCLING (WASTE REMOVED FROM SITE) INDICATOR YEAR TO 31 JULY 2022 YEAR TO 31 JULY 2021 Total hazardous and non-hazardous waste (tonnes) Total hazardous waste (tonnes) Total non-hazardous waste (tonnes) Total waste recycled (tonnes) Total hazardous waste recycled (tonnes) Total non-hazardous waste recycled (tonnes) Percentage of total waste recycled WASTE AND RECYCLING MANAGEMENT New Hope adopts a responsible approach to the management of both regulated and non-regulated waste. Our sites have environmental management plans (EMPs) that detail requirements for disposal, tracking, and reporting of mineral and non-mineral wastes. We continue to focus on effective waste stream segregation to maximise recycling and reuse, and ensure compliance with relevant legislative requirements and regulations. We identify and collect environmentally hazardous (mainly effluents and waste oils) and non-hazardous waste (including scrap steel, mixed solid waste, and timber) and recycle where possible through reliable and regulated third-party providers. Non-mineral waste generated at our sites that cannot be recycled and is considered non-hazardous is disposed of at appropriate landfill facilities by responsible and trusted third- party providers. Hazardous non-mineral waste that cannot be re-used or recycled is collected and removed from site for treatment and specialised disposal. 3,301 617 2,684 1,470 568 902 45% 3,709 1,014 2,695 1,295 522 773 35% BENGALLA’S TAILINGS MANAGEMENT The Bengalla Mine site does not have a tailings dam. Instead, fine reject material is treated, dewatered, and combined with other coarse reject streams generated from the product processing (overburden and rock waste) and conveyed to reject bins. Haul trucks load the reject material for co-disposal with overburden and rock waste, forming the base layer of rehabilitated land. This method reduces void size and removes legacy environmental and safety risks relating to effluent seepage associated with tailings dam management. Processing water is recovered and reused in site operations through dewatering. Additionally, by not operating tailings dams, there is a significant reduction in land disturbance and ongoing rehabilitation requirements at the site. DECREASE IN WASTE AND INCREASING RECYCLING AT OUR OTHER MINE SITES With New Acland moving into care and maintenance while we await approvals to resume operations, waste generated at our other sites has remained relatively constant or has decreased since the last reporting period. WASTE MANAGEMENT INCIDENTS In the last reporting period, no incidents of waste management non-compliance have been reported. 59 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTENVIRONMENT (CONTINUED) Before After WEST MORETON (CHUWAR) REHABILITATION SITE SURRENDERED The site of Chuwar was an open cut mine in the 1980s, located in the Ipswich coal fields, less than an hour’s drive from the centre of Brisbane. In the reporting period, Chuwar became the first open cut coal mine in Queensland to relinquish its Environmental Authority (EA), and after the reporting period the associated Mining Leases were also surrendered. The Queensland Government critically assessed the project and concluded that all rehabilitation requirements had been met in full, deeming the site safe, stable, non-polluting, and able to support grazing. The rehabilitation work at Chuwar is a clear and practical demonstration of the successful and responsible completion of the full life cycle of a mining project. WATER STEWARDSHIP Water is a critical resource in our operations that is also a valuable resource shared with our communities. Recognising this, our sites have individual, tailored water management plans in place which are reviewed on an ongoing basis to ensure that we sustainably manage water resources and manage potential impacts to the environment and other water users. BENGALLA The main clean water source at Bengalla is the Hunter River accessed under water licences. Other sources of water include sediment water runoff from disturbed and rehabilitated areas and water from the mine including groundwater inflow. Water is pumped to dams or collected in sediment traps and settling dams and directed to storage dams for re-use onsite where appropriate.   We also recycle water from both the bathhouse and the vehicle wash bay through the wastewater treatment plant for reuse onsite. Where reasonable and feasible clean water is redirected away from disturbed areas. To manage above average rainfall our discharge dam provides 700ML of capacity to manage excess water in support of our site water management system. During the reporting period, 840ML was discharged under the Hunter River Salinity Trading Scheme to the Hunter River. Bengalla also holds credits to discharge water into the Hunter River during periods of high flow and flood flow under the Hunter River Salinity Trading Scheme. NEW ACLAND At New Acland, we minimise our impact on the groundwater system by utilising a purpose built 45-kilometre pipeline to transfer recycled wastewater from the city of Toowoomba. The recycled water purchased from Toowoomba city is sufficient for all production activities at the New Acland site, and also services our neighbouring pastoral operations for crop irrigation and stock water. The ability to draw on recycled water provides the mine with significant resilience in periods of drought when the mine is in full operation, eliminates draw from natural waterways and provides a valuable revenue stream for Toowoomba Regional Council from its produced water. New Acland also makes use of runoff water for dust suppression and in the coal handling and preparation plant. Groundwater is only used for potable water supply and for bathrooms. No groundwater is used with production activities at the New Acland site. WATER WITHDRAWAL BY CATEGORY – MINING OPERATIONS1 CATEGORY Surface water captured (ML) Groundwater drawn (ML)2 River water sourced (Bengalla only) (ML) Recycled water sourced (New Acland only) (ML) BENGALLA NEW ACLAND FY21 1,969 139 768 NA CY20 1,326 113 1,147 NA FY22 1920 116 NA 292 FY21 1200 339 NA 428 1 For operating mines for the most recently reported period and prior corresponding period. Bengalla’s information is reported on calendar year (CY) basis. 2 Groundwater drawn Includes water drawn into open cut pits, and water drawn for potable use at New Acland. Bengalla groundwater drawn figures shown are for the most recent calendar year. 60 2022 ANNUAL REPORT NEW HOPE GROUPEMISSIONS New Hope reports on emissions, energy consumption and energy production to the Clean Energy Regulator annually, in accordance with the National Greenhouse and Energy Report (NGER) scheme legislation. This includes recording and disclosing our Scope 1 and Scope 2 emissions on an operational control basis. As a site which emits over 100,000 tonnes in Scope 1 emissions, Bengalla is also subject to the Safeguard Mechanism under the National Greenhouse and Energy Reporting Act 2007, which requires net emissions from operations to be kept below applicable baseline limits. The tables below set out emissions and energy related data across our operations, reflecting data reported through the NGER reporting scheme. Due to timing requirements for reporting data to the Clean Energy Regulator under the NGER reporting scheme after the release of our Annual Report, analysis presented is for the Australian financial year ending 30 June 2021. Against the prior financial year, the period to 30 June 2021 saw a reduction in New Hope’s overall emissions and energy consumption. Contributions to this reduction included the end of mining at Jeebropilly, reducing operations at New Acland, and temporarily reduced operations at Bengalla due to a major scheduled dragline shutdown. TOTAL EMISSIONS AND ENERGY USE – YEAR ON YEAR INDICATORS Total Scope 1 and Scope 2 Emissions (tCO2-e) Total energy consumed (Gigajoules (GJ)) FY21 FY20 569,233 702,779 3,678,311 3,938,219 The following table shows a breakdown of emissions, emissions intensity, and energy consumed by our operations for the year to 30 June 2021. HYDROGEN AT KENMORE The Bridgeport Kenmore field produces approximately 3.5ML per year of water associated with oil production. Whilst part of this water is used for stock watering under an authorised beneficial use agreement with the state and local landowners, Bridgeport is in the feasibility stage of a hydrogen generation project from this water. A flash distillation unit (delivered and undergoing testing) driven by a solar array at Kenmore will make distilled water from the produced water and feed an electrolyser sited at Eromanga. The concept is to provide truck and aircraft refuelling capability in the Quilpie Council area by installing solar panels to power a 1MW demonstration electrolyser at Eromanga to generate hydrogen from the produced water. As part of this project a further 4MW of power and 0.5MW of battery storage for the community and industrial users in this remote community area is being considered which can potentially reduce reliance on the national electricity grid by Eromanga residents and reduce their power costs. OPERATIONAL EMISSIONS AND & ENERGY CONSUMPTION – YEAR TO 30 JUNE 2021 UNIT OF MEASUREMENT BENGALLA (100% BASIS) NEW ACLAND BRIDGEPORT tCO2-e 503,093 40,760 19,072 QBH OTHER 4,681 1,617 INDICATOR Total Scope 1 and Scope 2 greenhouse gas emissions Operational throughput Tonnes/bbl/ tonnes processed 12,277,354 (ROM tonnes) 3,963,215 (ROM tonnes) 258,614 (bbl produced) 4,054,889 (tonnes throughput) N/A N/A GHG emissions intensity tCO2-e/t 0.0410 per ROM tonne 0.0103 per ROM tonne 0.0737 per bbl 0.0012 per tonne throughput Total energy consumed Gigajoules (GJ) 2,808,053 461,832 354,760 33,301 20,365 61 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTENVIRONMENT (CONTINUED) EMISSIONS ANALYSIS AND ABATEMENT OPPORTUNITIES Given the increasing regulatory and community focus on the issue of carbon emissions and the likelihood of lower baseline targets, in 2022 substantial work was carried out to better understand our emissions footprint at our largest operation, Bengalla. The table below shows the key sources of the mine’s Scope 1 and Scope 2 emissions. Approximately 10 per cent of the mine’s emissions come from electricity consumption (Scope 2), while 55 per cent is from fugitive emissions (Scope 1) and the balance is from the consumption of fuel in vehicles used on site (also Scope 1). The 2022 emissions study also identified opportunities for future emissions abatement, with a number of specific potential projects for future emissions reductions identified. Achievable emissions abatement opportunities with positive value will be the first to be considered for implementation. In the longer term, opportunities for abatement exist through a decarbonised electricity grid, on-site solar, investment in off- site renewable energy projects, and the potential electrification of our fleet of haul trucks and other heavy equipment. To varying degrees, these opportunities are contingent on technological developments and the federal and state policy environment. Over time we expect that the learnings from activities carried out at Bengalla will support future abatement work across our other operations. REGULATORY COMPLIANCE We work closely with our stakeholders, including state and federal government agencies, traditional custodians and our communities, to ensure appropriate business systems and processes are in place to manage compliance with environmental regulatory approvals. We undertake stringent internal compliance auditing on an ongoing basis to measure compliance against environmental obligations and relevant standards. During the reporting period, there were two environment- related regulatory actions involving New Hope sites: ` In April 2022, the Queensland Department of Environment and Science (DES) issued an infringement notice to Bridgeport (Surat Basin) Pty Ltd in relation to an unintentional hydrocarbon release from a flowline at the Moonie field. A penalty of $13,785 was imposed with the notice. ` In June 2022, New Acland Coal Pty Ltd (NAC) entered into an enforceable undertaking with DES in respect of alleged unauthorised mining in the area known as West Pit, and part of South Pit, at New Acland. Pursuant to the enforceable undertaking, NAC will invest $2 million into a rehabilitation project to develop a koala habitat. BENGALLA SCOPE 1 AND 2 EMISSIONS ANALYSIS FY21 TOTAL EMISSIONS (SCOPE 1 AND 2) (kt CO2-e) FY21 FUEL EMISSIONS (kt CO2-e) Total emissions 502 Fugitive emissions 276 Non-fugitive emissions 226 Fuel 172 Electricity 54 97 31 25 Haul trucks Excavators Dozers Drills Loaders Graders Water Carts Light Vehicles Draglines Other 6 5 3 3 3 0 1 FY21 ELECTRICITY EMISSIONS (kt CO2-e) Processing Plant 34 Dragline 17 Overhead 3 62 2022 ANNUAL REPORT NEW HOPE GROUP CCUS AT MOONIE Bridgeport’s Moonie Oil Field is the oldest continuously producing oilfield in Queensland. After 60 years of primary production, the Moonie field reservoir provides an ideal opportunity for tertiary oil recovery by re-pressurising the reservoir with injected CO2 to flush the remaining oil and at the same time capturing and sequestering the CO2 as a carbon capture utilisation and storage (CCUS) outcome. The technology of enhanced oil recovery (EOR) by this method is not new, with many fields in North America having used this tertiary recovery and storage technique for decades. CCUS is one of the priority low emissions technologies set out in the Australian Government’s “Technology Investment Roadmap”. The Moonie CCUS- EOR project, which is undergoing environmental regulatory approval via an Environmental Impact Statement (EIS) process, will take CO2 captured by the Carbon Transport and Storage Company (CTSCo) from the nearby Millmerran Power Station and utilise it in the Moonie reservoir. The CO2 injection will allow enhanced recovery of the remaining oil in the field, while permanently trapping waste CO2 which would have otherwise been released to the atmosphere from a thermal coal fired power plant. Once the tertiary oil recovery stage of the project is completed, then the site has the potential to be re-purposed purely as a carbon capture and storage (CCS) facility. Learning from the project will also contribute to the knowledge base of the industry to advance deployment of the technology at scale. 63 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTCOMMUNITIES Our operations play an important role in the communities in which we operate. Our role as a responsible and sustainable corporate citizen is to support and promote broad economic and social benefits for the communities in which we operate. As a sustainable operator, we have a duty to continue developing long-term, meaningful, and mutually beneficial relationships in our communities, creating a positive social impact. COMMUNITY ENGAGEMENT New Hope’s approach to sustainability is highly dependent upon the strength of our relationships with our broad range of stakeholders. Our stakeholders are any group or individual who influences or is impacted by our business and our constructive and transparent engagement with them is the foundation of our approach to sustainability. As a long-standing member of the communities in which we operate, we proactively engage with a wide variety of stakeholders including First Nations peoples, local landholders, near neighbours, community groups, employees, and government bodies. We work to ensure local community access to decision making processes, grievance mechanisms, and other remediation processes to increase engagement and help address any actual or potential negative impacts from our activities. BENGALLA IN THE UPPER HUNTER COMMUNITY Bengalla employees consider themselves embedded in the fabric of the Upper Hunter community. The Community Consultative Committee (CCC) provides a forum for community discussion and contains representation from Bengalla, Muswellbrook Shire Council, Wanaruah Local Aboriginal Land Council, and three representatives from the local community. Bengalla also engages with local community business leaders via the Muswellbrook Chamber of Commerce (MCC), with the mine’s General Manager a Director on the MCC Board. Through annual Voluntary Planning Agreement (VPA) meetings, Bengalla and the Muswellbrook Shire Council collaborate to identify community priorities and opportunities for local infrastructure development. In the last reporting period, Bengalla provided $832,978.75 in support to the Muswellbrook Shire Council via VPA contributions. Bengalla also engages with local community groups through promotion and support of community programs and events. These initiatives provide opportunities to communicate with local groups, and develop a sense of community and local network. Through long-standing relationships, Bengalla provides annual support to select community groups and programs, including: ` The Bengalla Cup Race Day ` The Muswellbrook Chamber of Commerce and Industry Business Awards ` The Muswellbrook Art Prize ` The Blue Heeler Film Festival ` The Upper Hunter Show ` The Upper Hunter Education Fund ` PCYC Muswellbrook ` Warbirds over Scone Community groups seek Bengalla’s support through a Community Development Fund application process, which also helps Bengalla identify and prioritise areas of community need. 64 2022 ANNUAL REPORT NEW HOPE GROUP SUPPORTING THE LOCAL COMMUNITY – NEW ACLAND As an enduring member of the Darling Downs region, New Acland continues to support employability and skills development opportunities for the next generation workforce. The mine also continued to support local community organisations through donations, such as $360,000 for Oakey PCYC Youth Connect Program. COMMUNITY SUPPORT INDICATOR Total number of community support recipients Sponsorships and partnerships YEAR ENDING 31 JULY 2022 YEAR ENDING 31 JULY 2021 79 78 $1,032,763 $337,000 Development contributions (VPA) $832,979 $713,627 PRESERVING ABORIGINAL HERITAGE New Hope aims to work in partnership with the traditional custodians of the land where our projects are located to ensure sites of cultural significance are identified and protected. We respect and acknowledge the UN Declaration on the Rights of Indigenous Peoples and the human rights principles it embodies, including the principle of free, prior and informed consent. In alignment with the principles of the International Council on Mining and Metals (ICMM), we work to obtain the consent of traditional custodians for activities located on their traditional lands. We are committed to work hand in hand with our traditional custodians to ensure Aboriginal heritage is managed sustainably and responsibly. NEW ACLAND AND YOUTH CONNECT The PCYC Youth Connect Program supports young people between 12 and 24 to develop necessary life skills, training, and pathways to employment. After applications to local, state and federal government for funding for the Youth Connect Program were unsuccessful, PCYC Toowoomba approached New Hope to develop a partnership for support of the program operating in Oakey. Our partnership with PCYC saw New Hope commit $360,000 over a two-year period to fund vital PCYC community services. Our funding support contributed to employment of one full-time PCYC Youth Services Project Manager, one full-time PCYC Youth Worker, the delivery of youth-focused community development activities, and the operational costs of the program for a two-year period. This program reinforces New Hope’s commitment to supporting local economies through employment, and the development of skills in the communities of our operations. Warbirds over Scone Where There’s a Will branded truck tray 65 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTCOMMUNITIES (CONTINUED) AIR QUALITY AND NOISE We recognise that dust, noise and other impacts of our operations have an effect on members of the community who live near our sites. Both Bengalla and New Acland maintain offsite dust and noise monitoring equipment which provides real time data to inform their operations. The sites operate environmental hotline for community issues relating to their operations. In all cases, we attempt to respectfully respond to and resolve any stakeholder complaints in a timely manner and to the best of our abilities. Complaints received in the last reporting period are provided below. Noise complaints decreased from 22 to 11 compared to the prior reporting period, falling at both New Acland and Bengalla. Dust complaints also decreased from the prior reporting period, and are substantially lower than earlier years, assisted by wetter climatic conditions. Our sites provide regular reporting on their environmental monitoring at: https://newhopegroup.com.au/general-reporting. Detailed registers of complaints received and how they were actioned are available at: https://newhopegroup.com.au/complaints-incidents-registers COMPLAINTS RECEIVED BY CATEGORY (ALL SITES) INDICATOR Noise complaints Air quality complaints Blasting complaints (overpressure, vibration, fume) Visual complaints (light) Other complaints Total complaints YEAR ENDING 31 JULY 2022 YEAR ENDING 31 JULY 2021 11 1 31 0 2 45 22 8 42 3 4 79 ECONOMIC DEVELOPMENT OF LOCAL AND REGIONAL ECONOMIES Our operations are an important source of employment, investment, and income for local communities. Through local procurement of goods and services, our operations contribute to and support supplier development, and deliver considerable local employment. This enhances purchasing power in the community and therefore stimulates local businesses, and indirectly encourages further infrastructure investment. New Hope operations procured $182.4 million in local services and materials and paid $147.2 million in total salaries and wages, and $625.9 million in taxes and royalties in the last reporting period, as detailed in the Tax Contribution Report. We recognise that payment of tax is an important element of our commitment to ensure communities benefit from our operations. We strive for full and timely compliance with the letter and intent of the prevailing tax law and we seek strong, collaborative working relationships with all relevant revenue authorities. We are committed to transparency across all aspects of our business, including in relation to our tax obligations. Indirect economic benefits to the regions include championing local education, skills development, and employment. We support local skills development and employment through our annual apprenticeship, work experience, and scholarship programs. In the last reporting period, our: ` Apprenticeship program provided opportunities for 5 apprentices to start their trade career. Bengalla currently hosts 16 apprentices across the 1st to 4th year of their trade. ` Work experience program/work placement/vacation work program provided 10 school students and undergraduates with opportunities to further develop their experience and gain exposure to a real-world work environment. New Hope also provides ongoing stimulus and employment to the local economy and agricultural industry generally through our pastoral companies. Bengalla apprentices 2021 Tarni Pereira, Engineering Scholarship recipient 2021, with some of the Bengalla Team 66 2022 ANNUAL REPORT NEW HOPE GROUPBENGALLA SUPPORTS LOCAL EMPLOYABILITY 90 per cent of Bengalla’s workforce resides within the Muswellbrook, Singleton, and Upper Hunter shires, ensuring ongoing and valuable economic contributions to the local economy. Bengalla’s ongoing apprenticeship, work experience and education support programs help foster the next generation of workers in the region. Bengalla has over a long period of time maintained relationships with local schools. Bengalla has awarded one engineering and eight undergraduate scholarships per year since 2000, fostering local education and providing career pathways for students. Last reporting period, Bengalla awarded an additional engineering scholarship to a student local to the Muswellbrook area. As part of the engineering scholarship, Bengalla offers practical experience through on- site vacation work, providing opportunities for participants to develop their skills, and partner with industry experts at the Bengalla Mine. Bengalla, through its Community Strategic Plan, has identified the opportunity to assist local charities in the hospitality sector. Last year Bengalla supported the Scone Neighbourhood Resource Centre through a sponsorship to assist with establishing the Made in Scone Café. This will be a training environment for individuals experiencing barriers to long term employment and to develop skills and gain work experience. Bengalla also provided $35,000 to the Polly Farmer Foundation’s Follow the Dream Program. This is an after- school enrichment program for Aboriginal students in years 7-12, which supports students to develop their talents, so they can successfully complete their secondary education and reach their potential. SUPPORTING NEW ACLAND’S LOCAL WORKFORCE With the New Acland Mine entering care and maintenance until the remaining approvals are finalised, our focus has been on ensuring our employees are supported during the transition process. Over the past two years, departing employees have undergone additional training, been awarded nationally accredited skills certifications, received résumé and interview coaching, and had their pre-employment medical examinations updated. Our rehabilitation program supports ongoing and productive land use beyond the life of the mine. Rehabilitation and post mining agricultural activities provide sustainable employment opportunities to the region. The Acland Pastoral Company (APC) was established to conduct agricultural operations on rehabilitated land. APC operations support three full-time employees and include grazing of 2,000 head of cattle and 2,400 hectares of crops which are sold in the Darling Downs region, providing stimulus to the local community and agricultural industry. Through our rehabilitation and agricultural activities, we have been able to support 25 people in transitioning to a post-mining environment. QUEENSLAND AND NEW SOUTH WALES FLOOD APPEAL In early 2022, tens of thousands of people in parts of Queensland and New South Wales experienced weeks of intense rainfall and flash flooding. Many of the communities we work closely with, including some of our own team members, were directly impacted by the recent flood events. To support communities and help with rebuilding, New Hope donated $100,000 to the Queensland and New South Wales Flood Appeal. The donation was made to GIVIT, an organisation that partnered with the New South Wales and Queensland governments to ensure that 100 per cent of public-donated funds reached the communities impacted by recent storms and flooding. We hope that our contribution can help those communities and people who may still be struggling long after the waters have receded. LOCAL DEVELOPMENT AND INVESTMENT INDICATOR EMPLOYABILITY Scholarships Apprenticeships Work experience/ trainees YEAR ENDING 31 JULY 2022 YEAR ENDING 31 JULY 2021 10 16 10 9 16 25 Wages and salaries (including on-costs)1 $147.2M $164.5M NUMBER OF LOCAL SUPPLIERS New South Wales Queensland 281 304 358 363 PAYMENTS TO LOCAL SUPPLIERS AND CONTRACTORS New South Wales Queensland $91.9M $90.5M $141.6M $156.0M 1 Across whole of Group, with Bengalla shown on an 80 per cent basis. 67 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTOUR PEOPLE HEALTH, SAFETY, AND WELLBEING The health, safety, and wellbeing of our employees is a major priority for our business. We see our employees as our greatest asset and strive to promote a work culture that reflects our commitment to health, safety, and wellbeing. New Hope recognises that work-related injuries, ill health or fatalities are still prevalent in the coal sector. Because of this, we continue to review operations and processes in an effort to provide a work environment that is both safe and healthy. Our Health and Safety Plan is based around the principles of Plan, Do, Check, and Act and is aimed at proactively mitigating the risk of avoidable injuries. We are constantly investigating ways to improve our identification, management, and monitoring of health and safety risks. To ensure consistency across our sites, we use standardised risk management tools outlined in our Environmental Health and Safety Management System. During the reporting period, the system was audited to review the quality of the tools used to manage risk, and the results of the audits were used to improve procedural and supporting systems and their operational application. For all mine site personnel, New Hope provides statutory health and safety training. During the reporting period, new health and safety metrics were introduced across the New Hope business in response to recommendations made by the Brady Review into fatalities in coal mining. Our focus in the last year has been to work towards understanding and implementing these recommendations. Emphasis has been placed on refining our hazard identification and near miss recording capabilities, and recording new metrics including All Injury Frequency Rate, and Hazard/Near Miss Frequency. In conjunction with these changes, New Hope’s Standard for Event Reporting Investigation and Analysis was also reviewed. The revised Incident Reporting Standard was published in the last quarter of the reporting period. Finally, revised metric reporting templates were developed and introduced to our sites to standardise reporting processes, thereby improving our visibility and monitoring of our health and safety performance across all sites. Additional changes in the last reporting period include the review of the Group Risk Management Framework. This Group- level change has triggered a review of the Health, Safety and Environment Risk Management Procedure, which involved further development of training modules, and updating the Health, Safety & Environment Risk matrix. 68 2022 ANNUAL REPORT NEW HOPE GROUPWORKPLACE BEHAVIOURS AND RAISING CONCERNS In the reporting period, we developed a Sexual Assault and Sexual Harassment (SASH) action plan and commenced implementation, which included training delivered to senior leaders and discussions with employees about SASH risks and the expected standards of behaviour.  SASH actions will continue to be progressed.  In support of the SASH action plan, we developed and released a new Appropriate Workplace Behaviours Policy and enhanced the workplace expectations sections of our Code of Conduct. A key focus of the SASH action plan has been to help our team members understand the role they can play as active bystanders, whether in relation to sexual harassment, bullying, discrimination or other inappropriate behaviours. A new Issues Resolution Procedure provides a road map for team members in dealing with these behaviours, including guidance on how to resolve workplace-related issues and what to expect when raising a concern. All team members remain able to raise concerns though our Whistleblower channels and are entitled to protections from reprisal under our Whistleblower Policy. HELPING HANDS TEAM BUILDING EXERCISE New Hope has recently engaged with the Helping Hands Program as part of the onboarding and team building exercise program at Bengalla mine. The Helping Hands Program involves participants building prosthetic hands that are then donated to amputee landmine and industrial accident victims throughout the developing world. This activity not only creates real and lasting contributions to people’s lives, but reinforces the importance of workplace health and safety in our business. To date, 25 Bengalla employees have participated in the program, building six hands for donation. A further 200 employees are planned to participate in the program over the next 12 months, equating to 50 hands for donation. WORKPLACE HYGIENE New Hope undertakes hygiene monitoring across our operational sites and in line with legislated requirements for the jurisdictions in which we operate. Based on nature of the risks relevant to each site, monitoring is undertaken for a variety of health hazards such as airborne contaminates including respirable quartz, respirable and inhalable coal dust, diesel particulate matter and welding fumes. Along with airborne contaminates, monitoring for noise and vibration is also undertaken. Results of monitoring activities are reviewed to ensure that new and existing controls are appropriately implemented and maintained. COVID-19 COVID-19 prevention and workforce management, for sites and individuals continues to be a major focus. In particular, a pandemic risk assessment was completed in the reporting period to ensure our internal control systems and processes are robust. Additionally, to improve our employees’ understanding of COVID-19, New Hope undertook Group-wide workshops to provide education around the facts and myths associated with the virus. We are proud of the following achievements: REDUCTION IN FIRST AID CASES 21% 66% DECREASE REDUCTION IN LOST TIME INJURIES IN TOTAL RECORDABLE INJURY FREQUENCY RATE QBH 10 YEARS LOST TIME INJURY FREE BRIDGEPORT 8 YEARS LOST TIME INJURY FREE 69 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTOUR PEOPLE (CONTINUED) The table below outlines the Group’s performance on key health and safety measures in the reporting period. HEALTH AND SAFETY PERFORMANCE INDICATOR Fatalities (employees and contractors) Total recordable injuries (employees and contractors) YEAR ENDING 31 JULY 2022 YEAR ENDING 31 JULY 2021 YEAR ENDING 31 JULY 2020 0 5 0 13 0 8 Number of hours worked (employees and contractors) 1,914,178 2,413,936 2,696,907 Rate of recordable work-related injuries (TRIFR) New occupational illness cases Safety interactions (operational mine sites only) Number of first aid incidents Number of medically treated incidents Number of lost-time incidents (LTI) (including disabling and restricted) 2.61 0 5,717 52 2 3 5.39 3 5.99 3 11,575 11,505 65 10 3 55 6 2 MENTAL HEALTH AND WELLBEING We are focused on promoting and supporting the mental health and wellbeing of all our employees. We see this as particularly important given the regional environment of our operations. We recognise that access to mental health services is substantially more limited in regional communities than in major cities. Our model for wellness is decentralised, with individual sites targeting what is important to them and their people. Our sites have Health and Safety Committees which promote and champion wellness initiatives, going beyond targeting interventions for occupational exposures. To support the positive mental health and wellbeing of our workforce, we provide and promote access to our Employee Assistance Program (EAP) which includes provision for counselling, as required. Our focus is raising awareness, proactive identification, and management of mental health issues. Key initiatives that we have supported in the last reporting period include employee training programs for mental health identification through our peer support and mental health first aid programs. In the last reporting period, over 50 employees and their family members utilised EAP services. Pre-employment and periodic medical assessments provided by New Hope assist early identification and intervention of employee health risks, further supporting the mental health and wellbeing of our people. DIVERSITY OF BOARD AND WORKFORCE During the reporting period, the Sustainability and People Committee set a gender diversity target for recruiting new employees of 40 per cent male:40 per cent female:20 per cent any gender (40:40:20). This target applies to all hires across the Group, including the Board and senior executives, and will be assessed and reported upon on an annual basis commencing in the 2023 financial year. We have implemented initiatives and practices to support gender diversity, such as educating people involved in recruitment activity about unconscious bias, providing gender diversity training and establishing weekly recruitment reports which include gender diversity statistics (and other diversity statistics more broadly) to enable monitoring of recruitment processes, actions and outcomes. As an industry, we must and can do more to build on our commitment to developing a diverse workforce that is reflective of society and to foster a workplace culture that truly embraces diversity and inclusiveness. During the reporting period there was a slight increase in the percentage of female workforce participation across the Group, from 13 per cent to 15 per cent. 70 2022 ANNUAL REPORT NEW HOPE GROUPDIVERSITY OF BOARD AND WORKFORCE INDICATOR Board Executive Senior management Management Frontline employees FY22 FY21 FEMALE 1 (17%) 1 (33%) 1 (13%) 6 (13%) MALE 5 (83%) 2 (67%) 7 (87%) 39 (87%) 94 (15%) 535 (85%) FEMALE 1 (20%) 0 (0%) 1 (9%) 7 (15%) 83 (13%) MALE 4 (80%) 2 (100%) 10 (91%) 40 (85%) 579 (87%) Note: Table shows employees at the end of the financial year. Excludes site-based contractors. 71 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTFINANCIAL REPORT 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. Financial Statements Statement of Comprehensive Income 73 74 Statement of Financial Position 75 Statement of Changes in Equity 76 Statement of Cash Flows Notes to the Financial Statements Financial Reporting Segments Revenue Results for the Year 1. 2. 3. Other Income and Expenses 4. 5. Income Taxes Reconciliation of Profit/(Loss) After Income Tax to Net Cash from Operating Activities Earnings Per Share 6. Operating Assets and Liabilities 7. Receivables 8. 9. 10A. Assets Classified as Held Trade and Other Payables Inventories 77 78 83 84 86 89 90 91 92 92 for Sale 93 10B. Disposal of New Lenton Coal 94 11. Property, Plant and Equipment 95 12. 98 13. Intangible Assets Exploration and Evaluation Assets Impairments of Assets 14. 15. Provisions 99 100 105 Capital 108 16. Cash and Cash Equivalents 108 17. Term Deposits 109 18. Equity Investments 110 19. Unearned Revenue 20. Borrowings 110 21 Derivative Financial Instruments 117 120 22. Dividends 121 23. Equity Risk 24. Financial Risk Management Group Structure 25. Interests in Other Entities Unrecognised Items 26. Commitments 27. Events Occurring after the Reporting Period Other 28. Related Party Transactions 29. Share-Based Payments 30. Parent Entity Disclosures 31. Deed of Cross Guarantee 32. Remuneration of Auditors 33. Other Accounting Policies Directors' Declaration Independent Auditor’s Report 123 130 130 131 131 133 134 136 139 139 141 142 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 51, which is not part of this Financial Report. The Financial Report was authorised for issue by the Directors on 19 September 2022. 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/ investor-information. 72 2022 ANNUAL REPORT NEW HOPE GROUP NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 JULY 2022STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 JULY 2022 Revenue and Other Income Revenue Other Income Expenses Cost of Sales Marketing and Transportation Administration Other Expenses Financing Expenses Impairment of Assets Profit before Income Tax Income Tax (Expense)/Benefit Net Profit for the Year Net Profit 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 or Loss for Cash Flow Hedges, net of Tax Items that will not be reclassified to Profit or Loss: NOTES 2022 $000 2021 $000 2 3(a) 2,552,395 1,048,239 6,043 5,739 2,558,438 1,053,978 3(b) (984,607) (658,721) (115,327) (198,207) (16,324) (9,823) (26,730) (4,989) (12,339) (2,620) (26,675) (44,696) 20(d) 3(b) 1,400,638 110,720 4(a) (417,629) (31,370) 983,009 983,009 79,350 79,350 23(f) 23(f) 23(f) (145) (26) (113,694) (69,982) 6,609 38,470 Changes to the fair value of Equity Investments, net of Tax 23(f) 261 37 Other Comprehensive Income/(Loss) for the Year, net of Tax Total Comprehensive Income for the Year (106,969) (31,501) 876,040 47,849 Total Comprehensive Income for the Year attributable to New Hope Shareholders 876,040 47,849 Earnings per share for Profit attributable to the Ordinary Equity Holders of the Company Basic Earnings per Share – Cents/Share Diluted Earnings per Share – Cents/Share 6 6 118.1 106.0 9.5 9.5 The above Statement of Comprehensive Income should be read in conjunction with the accompanying Notes to the Financial Statements. 73 NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW                STATEMENT OF FINANCIAL POSITION AS AT 31 JULY 2022 Current Assets Cash and Cash Equivalents Receivables Term Deposits Derivative Financial Instruments Inventories Assets Classified as Held for Sale 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 Derivative Financial Instruments Borrowings Current Tax Liabilities Provisions Financial Guarantee Liability Unearned Revenue Total Current Liabilities Non-Current Liabilities Borrowings Derivative Financial Instruments Provisions Unearned Revenue Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed Equity Reserves Retained Earnings Total Equity NOTES 2022 $000 2021 $000 16 7 17 21 9 10 7 21 18 4(e) 11 12 13 8 21 20 15 10(b) 19 20 21 15 19 715,714 501,972 100,000 – 59,743 – 424,663 123,323 – 9,746 73,343 10,067 1,377,429 641,142 39,557 1,365 94,973 14,795 364 – 229 214 1,756,246 1,951,833 71,627 71,043 76,552 105,533 2,049,606 2,134,725 3,427,035 2,775,867 94,478 17,335 10,690 379,500 31,833 2,463 906 78,786 – 11,019 24,528 53,433 – – 537,205 167,766 277,831 127,263 166,361 2,844 574,299 586,879 – 274,609 – 861,488 1,111,504 1,029,254 2,315,531 1,746,613 23(c) 23(f) 23(g) 97,536 (89,229) 97,536 16,890 2,307,224 1,632,187 2,315,531 1,746,613 The above Statement of Financial Position should be read in conjunction with the accompanying Notes to the Financial Statements. 74 2022 ANNUAL REPORT NEW HOPE GROUP                        STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 JULY 2022 Balance as at 1 August 2021 97,536 16,890 1,632,187 1,746,613 CONTRIBUTED EQUITY $000 NOTES RESERVES $000 RETAINED EARNINGS $000 TOTAL $000 Profit for the Year Other Comprehensive (Loss)/Income Total Comprehensive Income/(Loss) Transactions with Owners in their capacity as Owners Dividends Paid Share-Based Payment Transactions 22(a) 23(d),(f) – – – – – – – 983,009 (106,969) (106,969) – 983,009 983,009 (106,969) 876,040 – 850 850 (307,972) (307,972) – 850 (307,972) (307,122) Balance as at 31 July 2022 97,536 (89,229) 2,307,224 2,315,531 Balance as at 1 August 2020 96,692 42,553 1,586,135 1,725,380 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 22(a) 23(d),(f) 23(d),(f) – – – – – 844 844 – 79,350 (31,501) (31,501) – 79,350 79,350 (31,501) 47,849 – 6,610 (772) 5,838 (33,298) (33,298) – – 6,610 72 (33,298) (26,616) Balance as at 31 July 2021 97,536 16,890 1,632,187 1,746,613 The above Statements of Changes in Equity should be read in conjunction with the accompanying Notes to the Financial Statements. 75 NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW                        STATEMENT OF CASH FLOWS Cash Flows from Operating Activities Receipts from Customers Payments to Suppliers and Employees Net Interest Paid Net Income Taxes (Paid)/Received 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 Equity Investment Payments for Exploration and Evaluation Assets Term Deposits Proceeds for Sale of Business Refunds/(Payments) 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 NOTES 2022 $000 2021 $000 2,240,254 1,042,813 (1,053,316) (750,444) (16,975) (31,326) 5 1,138,637 (15,620) 19,317 296,065 18 13 17 10(b) 20(a) 20(a) 20(c) 22(a) (65,361) 26,492 (94,483) (12,468) (100,000) 21,625 1,671 (49,850) 22,724 – (10,813) – – (4,821) (222,524) (42,760) – (310,000) 20,000 (70,000) – 195,702 (10,161) (307,972) (628,133) (13,876) (33,298) 98,528 287,980 424,663 351,833 70,377 3,071 2,453 Cash and Cash Equivalents at the end of the Financial Year 715,714 424,663 The above Statement of Cash Flows should be read in conjunction with the accompanying Notes to the Financial Statements. 76 2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022          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 2022 was authorised for issue in accordance with a resolution of the Directors on 19 September 2022. 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 33; • Does not adopt any Accounting Standards and Interpretations that have been issued or amended but are not yet effective. Refer to Note 33 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 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 2022 and the results of all subsidiaries for the year then ended. Subsidiaries are all those 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. 77 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022BASIS OF CONSOLIDATION (CONTINUED) (B) INTERESTS IN OTHER ENTITIES For information on Joint Arrangements and interests in Other unincorporated entities refer to Note 25. 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. KEY JUDGEMENTS AND ESTIMATES The preparation of Financial Statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed within the following notes: Note 4  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 PAGE 57 64 64 65 66 69 71 ACCOUNTING POLICY 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), the Chief Financial Officer (CFO) and the Executive General Manager and Company Secretary. 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 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. 78 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 20221. FINANCIAL REPORTING SEGMENTS (CONTINUED) B. SEGMENT INFORMATION YEAR ENDED 31 JULY 2022 Total Segment Revenue Intersegment Revenue Revenue from External Customers Interest Revenue Total Revenue from External Customers NOTES COAL MINING NSW $000 2,380,925 (111) 2,380,814 COAL MINING QLD $000 128,570 – 128,570 Underlying EBITDA before Non-Regular Items2 Segment Underlying EBITDA before Non-Regular Items2 Depreciation and Amortisation Net Interest Expense3 Segment Profit/(Loss) before Tax and Non-Regular Items 3 Non-Regular Items before Tax1 Segment Profit/(Loss) before Tax after Non-Regular Items 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 Profit/(Loss) after Tax and Non-Regular Items 4(a) 1,542,818 (115,628) (873) 1,426,317 – 1,426,317 36,296 (17,736) (2,918) 15,642 (5,304) 10,338 OTHER $000 53,821 (12,317) 41,504 795 (7,772) (10,839) (17,816) TOTAL $000 2,563,316 (12,428) 2,550,888 1,507 2,552,395 1,577,357 1,579,909 (141,136) (14,630) 1,424,143 (15,649) (33,465) (20,953) 1,403,190 (2,552) – (2,552) 1,400,638 (417,629) 983,009 Reportable Segment Assets 2,133,391 234,966 1,058,678 3,427,035 Total Segment Assets includes: Additions of Non-Current Capital Assets Increase in Impairment of Assets 52,936 – 27,940 – 15,939 (4,989) 96,815 (4,989) 1 2 Non-Regular Items for the financial year ended 31 July 2022 relate to Group Redundancy Costs, Liquidation Related Expenses, Strategic Growth and M&A. Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and Net Profit before Tax (NPBT) and before Non-Regular Items are non-IFRS measures. This non-IFRS information has not been audited by Deloitte. 3 Net interest expense comprises finance income and expenses minus unwinding of discount on provisions and commitment fees on loan facility. Refer to note 20D. 2022 SEGMENT PERFORMANCE ($MILLION) 2022 SEGMENT ASSETS ($MILLION) 2500 2,381 2000 1500 1000 500 0 (500) 1,543 1,426 1,426 Segment Revenue from External Customers Segment EBITDA Segment Profit/(Loss) before Tax and Non-Regular Items Segment Profit/(Loss) before tax 129 36 16 10 42 (18) (33) Coal Mining NSW Coal Mining QLD Other 1,059 235 Coal Mining NSW Coal Mining QLD 2,133 Other 79 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022        1. FINANCIAL REPORTING SEGMENTS (CONTINUED) B. SEGMENT INFORMATION (CONTINUED) YEAR ENDED 31 JULY 2021 Total Segment Revenue Intersegment Revenue Revenue from External Customers Interest Revenue Total Revenue from External Customers NOTES COAL MINING NSW $000 815,784 (134) 815,650 COAL MINING QLD $000 201,526 – 201,526 OTHER $000 46,060 (15,050) 31,010 Underlying EBITDA before Non-Regular Items2 Segment Underlying EBITDA before Non-Regular Items2 Depreciation and Amortisation 3 Interest Expense Segment Profit/(Loss) before Tax and Non-Regular Items 359,076 (118,279) (1,155) 239,642 18,798 (22,136) (3,065) (6,403) (9,151) (8,938) (953) (19,042) TOTAL $000 1,063,370 (15,184) 1,048,186 53 1,048,239 367,197 368,723 (149,353) (5,173) 214,197 Non-Regular Items before Tax1 Segment Profit/(Loss) before Tax after Non-Regular Items – 239,642 (74,681) (81,084) (12,802) (31,844) (87,483) 126,714 Treasury Loss before Income Tax and Non-Regular Items Non-Regular Treasury Items before Tax Treasury Loss before Income Tax Profit/(Loss) before Tax (after Non-Regular Items) Income Tax (Expense)/Benefit Profit/(Loss) after Tax and Non-Regular Items 4(a) (14,884) (1,110) (15,994) 110,720 (31,370) 79,350 Reportable Segment Assets 1,655,866 404,228 715,773 2,775,867 Total Segment Assets includes: Additions to Non-Current Capital Assets Increase in Impairment of Assets 79,625 – 4,837 (40,307) 12,955 (4,389) 97,417 (44,696) 1 Non-Regular Items for the financial year ended 31 July 2021 relate to Coal Mining Asset and Coal Exploration Asset Impairments, Onerous Contracts, New Acland Ramp Down Costs, Group Redundancy Costs, Liquidation Related Expenses, Strategic Growth and M&A and Debt Waiver Consent Fees. 2 Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and Net Profit before Tax (NPBT) and before Non-Regular Items are non-IFRS measures. This non-IFRS information has not been audited by Deloitte. 2021 SEGMENT PERFORMANCE ($MILLION) 2021 SEGMENT ASSETS ($MILLION) 816 1000 800 600 400 200 0 (200) 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 404 716 Coal Mining NSW Coal Mining QLD 1,656 Other Coal Min- Coal Min- 1 Oth- 80 Segment Segment Profit/(Loss) be- Segment NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022                                    1. FINANCIAL REPORTING SEGMENTS (CONTINUED) C. OTHER SEGMENT INFORMATION (i) SEGMENT REVENUE YEAR ENDED 31 JULY 2022 Total Segment Revenue by Geographical Region COAL MINING NSW $000 COAL MINING QLD $000 NOTES OTHER $000 TOTAL $000 Japan Taiwan Chile Korea India Other1 Australia 1,115,027 78,512 301,923 34,539 45,687 14,680 350,229 130,707 – 4,467 30,591 – – – – – – – – 1,193,539 301,923 39,006 76,278 14,680 350,229 182,729 15,003 37,019 Revenue from Customer Contracts2 1,992,792 128,574 37,019 2,158,384 Provisional Pricing Other Revenue Total Revenue 2 382,498 11,512 2,552,394 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 Note 2. Revenues of $277,350,000 (2021 – $161,911,000) are derived from a single external customer, representing 13 per cent of total Revenue from Customer Contracts. These revenues are attributed to the Taiwan geographical segment. Provisional pricing adjustments of $353,277,000 (2021: $34,716,000) relate to this customer. There are no other individual customers who represent more than 10 per cent of revenue from customer contracts for the year ended 31 July 2022. 2022 REVENUE BY DESTINATION $000 2021 REVENUE BY DESTINATION $000 8% 9% 16% 1% 4% 2% 14% 55% 6% 2% 2% 6% 6% 6% Japan Taiwan Chile Korea India China Vietnam Other Australia 21% 43% 81 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 20221. FINANCIAL REPORTING SEGMENTS (CONTINUED) C. OTHER SEGMENT INFORMATION (CONTINUED) (I) SEGMENT REVENUE (CONTINUED) 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 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 24,920 – – – – – – – – 427,514 205,211 63,015 61,643 59,291 20,638 15,885 56,196 86,311 Revenue from Customer Contracts2 776,063 194,721 24,920 995,704 Provisional Pricing Other Revenue Total Revenue 2 42,341 10,194 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 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. 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. (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. 82 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022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 transfer of 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. • Coal sales are reflected at final prices by the end of the reporting period, except for certain Coal Sales that are provisionally priced at the date revenue is recognised, which include a future price reference that is adjusted for discount and quality. • 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 2022 $000 2021 $000 2,143,384 983,528 382,498 15,002 42,341 12,226 2,540,884 1,038,095 20(d) 2,172 1,644 7,695 1,509 85 8,550 1(b),(c) 2,552,395 1,048,239 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. No JobKeeper payments were received by the Group in FY2022. 83 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022 3. OTHER INCOME AND EXPENSES Profit/(Loss) before Income Tax includes the following specific income/(expenses): A. OTHER INCOME Insurance Recovery Land Access Compensation Gain from Lenton Divestment Total Other Income B. BREAKDOWN OF EXPENSES (I) COST OF SALES1&2 Purchase Coal Royalties Other Production Costs Mining Non-Mining Total Cost of Sales 1 Employee-Related Expenses relating to Cost of Sales of $134,086,000 (FY2021: 152,084,000) have been excluded 2 Depreciation and Amortisation Expenses relating to Cost of Sales of $140,257,000 (FY2021: 147,138,000) have been excluded. (II) EMPLOYEE-RELATED EXPENSES Salary and wages Superannuation Share-based payments expense Redundancy expenses Other employee benefits expenses Total employee-related expenses NOTES 10(b) 2022 $000 – 5 6,038 6,043 2021 $000 5,739 – – 5,739 NOTES 2022 $000 2021 $000 (237,570) (181,752) (9,446) (62,038) (272,039) (264,253) (18,903) (23,605) (710,264) (359,342) (130,138) (135,992) (9,157) (850) (5,491) (1,542) (9,399) (72) (15,733) (3,330) (147,178) (164,526) 84 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 20223. OTHER INCOME AND EXPENSES (CONTINUED) B. BREAKDOWN OF EXPENSES (CONTINUED) NOTES 2022 $000 2021 $000 (III) 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 (IV) IMPAIRMENT OF ASSETS Impairment of QLD coal mining assets Impairment of coal exploration and evaluation assets Impairment of building assets Total Impairment Charge (V) OTHER EXPENSES Liquidation related expenses1 Onerous contract expenses2 Net (Loss)/Gain 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. 11 11 11 11 11 12 11 12 12 14 14 14 (1,180) (59,315) (60,495) (1,937) (61,255) (63,192) (58,857) (61,664) (4,968) (4,946) (458) (7,888) (2,969) (555) (5,637) (5,529) (551) (9,256) (2,969) (555) (80,641) (86,161) – (40,307) (4,989) – (1,618) (2,771) (4,989) (44,696) (9,823) (2,620) – (37,276) (563) 4,981 – (51) 85 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022         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. 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 2022 $000 2021 $000 (389,050) (24,631) 2,733 (31,312) (417,629) 3,582 (10,321) (31,370) 29.8% 28.3% 86 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022    4. INCOME TAXES (CONTINUED) B. NUMERICAL RECONCILIATION OF INCOME TAX (EXPENSE)/BENEFIT TO PRIMA FACIE TAX RECEIVABLE/(PAYABLE) Profit/(Loss) before Income Tax Income Tax calculated at 30% (2021: 30%) Tax effect of amounts which are not deductible/(taxable) in calculating Taxable Income: CGT Income not assessable Non-Assessable accounting gain from property disposals Non-Assessable Interest relating to convertible notes Other Non-Temporary Items Under/(Over) provided in prior year Income Tax (Expense)/Benefit 2022 $000 1,400,638 (420,191) – 3,334 (614) (1,805) 2021 $000 110,720 (33,216) 1,716 – 89 (419,276) (31,411) 1,647 41 (417,629) (31,370) C. TAX (EXPENSE)/BENEFIT RELATING TO ITEMS OF OTHER COMPREHENSIVE INCOME  Cash Flow Hedges 2022 $000 2021 $000 (45,894) (13,506) 87 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022    4. INCOME TAXES (CONTINUED) D. DEFERRED TAX BALANCES ACCOUNTING POLICY Deferred Tax Assets are recognised for the deductible Temporary Differences and unused Tax Losses only when it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred Tax Liabilities and Assets are not recognised for Temporary Differences between the carrying amount and tax bases of Investments in Controlled Entities where the Company is able to control the timing of the reversal of the temporary difference and it is probable that the differences will not reverse in the foreseeable future. Deferred Tax Assets and Liabilities are offset when there is a legally enforceable right to offset Current Tax Assets and Liabilities and when the Deferred Tax balances relate to the same taxation authority. NET BALANCE AT 1 AUGUST $000 RECOGNISED IN PROFIT OR LOSS $000 RECOGNISED IN OCI $000 2022 Rehabilitation Provision 80,387 (30,926) Property, Plant and Equipment Capitalised Exploration Cash Flow Hedges Inventories Employee Benefits Other Capital Losses Lease Liabilities 2021 Rehabilitation Provision Property, Plant and Equipment Capitalised Exploration Cash Flow Hedges Inventories Employee Benefits Other Capital Losses Lease Liabilities (101,125) (12,966) (2,923) (8,140) 11,287 1,991 1,500 30,203 214 74,717 (81,465) (10,327) (16,429) (4,475) 14,143 (4,012) 1,500 23,374 9,976 (751) – (2,112) (3,435) (3,046) – (1,019) (31,312) 5,670 (19,660) (2,639) – – – 45,894 – – – – – 45,894 – – – – 13,506 (3,665) (2,856) 6,003 – 6,829 – – – – – DEFERRED TAX ASSETS $000 DEFERRED TAX LIABILITIES $000 49,461 – – 42,971 – (91,149) (13,717) – – (10,252) 7,852 – 1,500 29,184 – (1,055) – – 130,968 (116,173) NET $000 49,461 (91,149) (13,717) 42,971 (10,252) 7,852 (1,055) 1,500 29,184 14,795 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 – – – – (2,974) (10,318) 13,506 214 125,368 (125,154) 88 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 20224. INCOME TAXES (CONTINUED) E. 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 2022 $000 2021 $000 4,522 5,709 10,231 6,607 5,709 12,316 SIGNIFICANT JUDGEMENTS AND ESTIMATES The deferred taxation benefits will only be obtained if assessable income is derived of a nature and of an amount sufficient to enable the benefit from the deductions to be realised, conditions for deductibility imposed by the law are complied with and no changes in tax legislation adversely affect the realisation of the benefit from the deductions. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. 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 after Income Tax Depreciation and Amortisation Non-Cash Employee Benefit Expense – Share-Based Payments Gain from Disposal of Entity – Lenton Impairment of Assets Net Foreign Exchange Gains Net Loss/(Profit) on sale of Non-Current Assets Net Income Taxes (Paid)/Received1 Income Tax Expense/(Benefit) Non-Cash Finance Costs Provision for Onerous Contract Changes in Operating Assets and Liabilities (Increase) in Receivables and Prepayments Decrease in Inventories (Decrease) in Trade and Other Payables (Decrease)/Increase in Provisions Net Cash from Operating Activities NOTES 29 10 3(b) 3(b) 4(a) 20(d) 15(c) 2022 $000 983,009 141,136 850 6,038 4,989 (3,071) 563 (31,326) 417,629 10,444 – 2021 $000 79,350 149,353 72 – 44,696 (2,453) (4,981) 19,317 31,370 2,076 16,477 (384,236) (54,973) 11,479 7,942 (26,809) 1,138,637 7,643 (3,768) 11,886 296,065 1 The amount of Income Taxes paid for the 2022 financial year represents current year instalments less a refund of instalments paid for the year ended 31 July 2021. 89 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022     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 Profit/(Loss) attributable to the Ordinary Equity Holders of the Company C. WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR Weighted average number of Ordinary Shares (Basic) Performance Rights Convertible bond – Equity Weighted average number of Ordinary Shares (Diluted) 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 29. 90 EARNINGS PER SHARE (CENTS) 2022 $000 118.1 106.0 2021 $000 9.5 9.5 BASIC 2022 $000 983,009 2021 $000 79,350 DILUTIVE 2022 $000 988,346 2021 $000 79,771 CONSOLIDATED 2022 2021 832,357,082 832,348,195 322,614 553,434 99,918,722 7,566,862 932,598,418 840,468,491 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022 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. Other 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. Other (Non-Current) Receivables from Bowen Coking Coal Limited as part of the purchase consideration from the Lenton Divestiture are carried at fair value. 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 Total Current Non-Current Other Receivables2 Total Non-Current 2022 $000 2021 $000 82,466 389,888 14,896 14,722 78,995 9,216 21,364 13,748 501,972 123,323 39,557 39,557 364 364 1 2 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. Included in the Non-Current Other Receivables are royalty and milestone payments from Bowen Coking Coal Limited of $39,471,000, carried at fair value. Refer to note 10 for more details. Trade Receivables – Provisionally Priced During this financial year, the Japanese Reference Price (JRP), which is historically settled during the second half of the year was not settled. The cash from this final settlement was received in September 2022. Other Receivables – Receivables from Lenton With the execution of the Lenton sale transaction, a new receivable from Bowen Coking Coal Limited was recognised on 1 July 2022 and carried at fair value. For more details, please refer to note 10(b). 91 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022    7. RECEIVABLES (CONTINUED) 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 24. 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 24. 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 Payables from provisionally priced purchases are carried at fair value. Trade and Other Payables1 1 Included in the Trade Payables is the Provisionally Priced Payable of $4,806,000 (FY2021: NIL). 2022 $000 94,478 2021 $000 78,786 9. INVENTORIES ACCOUNTING POLICY 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 Total Inventories 92 2022 $000 26,435 6,033 32,539 (5,264) 59,743 2021 $000 42,090 5,120 29,276 (3,143) 73,343 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022 9. INVENTORIES (CONTINUED) A. INVENTORY EXPENSE Coal Stocks recognised as an expense during the year ended 31 July 2022 amounted to $857,483,000 (2021: $689,838,000). The Group did not recognise any inventory write-down to net realisable value for the Financial Year (2021: $NIL). 10A. ASSETS CLASSIFIED AS HELD FOR SALE ACCOUNTING POLICY Non-Current Assets (or disposal group) are classified as Held For Sale if their 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 Total 2022 $000 – – – 2021 $000 7,067 3,000 10,067 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 Segment. 2 Included in ‘Other’ Operating Segment. The Group has classified from Property, Plant and Equipment to Assets Classified as Held for Sale in the 2021 financial year, with the sale transactions completed in the 2022 financial year. Key updates for the current financial year are outlined below: • A gain on disposal of parcels of land of $5,251,000 was recognised in the Statement of Comprehensive Income in the 2022 financial year. • On 28 July 2021, the Group entered a contract for sale of the previous corporate office at Brookwater, Queensland. The sale was subject to a Put and Call Option with the Group and was executed in the current financial year, with proceeds of $3,000,000 received and a loss of $613,000 recognised in the Statement of Comprehensive Income in the 2022 financial year. 93 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202210B. DISPOSAL OF NEW LENTON COAL 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 held a 90 per cent interest in the Lenton Joint Venture) to Bowen Coking Coal Limited (ASX: BCB). On 24 December 2021 the Group signed a Sale and Purchase Agreement with Bowen Coking Coal in line with the Binding Term Sheet. A total of $1.0 million of upfront cash payments were received. There were several conditions precedent included in the Sale and Purchase Agreement. These were subsequently satisfied and the sale completed on 1 July 2022. The sale consideration included cash, a series of milestone payments and a royalty stream. The determination of the fair value of the receivable in relation to the future royalty stream and milestone payments involves judgement and is based on expectations in relation to the timing of relevant approvals, production and forecast price assumptions. A summary of the sale transaction out is presented below: Deposit and Contract Settlement Payment Receivables Total Purchase Consideration Total Assets Total Liabilities Total Net Assets Disposed Financial Guarantee Liability Provided Profit on Sale 2022 $000 21,625 39,471 61,096 122,410 (69,815) 52,595 (2,463) 6,038 As part of the sale, the Group provided a guarantee to the State of Queensland for an amount of $61.5m in relation to New Lenton Coal Pty Ltd’s rehabilitation obligation. The guarantee is provided through a bank letter of credit, issued in favour of the State of Queensland. The terms associated with the letter of credit allows for the bank to claim from the Group the value of the guarantee called upon by the State in the event of default by New Lenton on its rehabilitation obligation. Under a separate agreement entered in to with Bowen Coking Coal, the Group has agreed that the guarantee will be terminated after 24 months. The Group recognised the guarantee as a financial liability as at 31 July 2022 and measured the liability at fair value having regard to a probability weighted assessment of the risk of default. The Group has considered its position and has determined that the probability of default is highly unlikely as at 31 July 2022. A liability of $2,500,000 has been recognised as a result. 94 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022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 that the majority of assets were depreciated using the straight-line method in the 2022 financial year. The expected useful life of Plant and Equipment is four to 20 years, Buildings is 25 to 40 years and Motor Vehicles is four to eight years. Land is not depreciated. 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. 95 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202211. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) , 3 3 8 1 5 9 1 , 5 6 1 7 9 , 4 9 6 8 , 5 9 2 5 4 , 0 7 5 8 0 1 , 2 6 5 2 8 9 , 8 3 1 0 2 5 , 3 9 1 3 , 6 1 2 6 8 1 , 1 2 0 2 t s u g u A 1 t a e c n a l a B 0 0 0 $ L A T O T - T H G R I E S U - F O S T E S S A 0 0 0 $ 0 0 0 $ I N O T C U R T S 0 0 0 $ S T E S S A T N E M P O L E V E D S E S A E L D N A T N E M P U Q E I I G N N M I I G N N M I 0 0 0 $ 0 0 0 $ 0 0 0 $ 0 0 0 $ 0 0 0 $ S E T O N 2 2 0 2 y l u J 1 3 d e d n e r a e Y - N O C R E D N U I G N C U D O R P T R O P T N A L P I L O D N A E N M I S E V R E S E R D N A T N A L P - N O N I S G N D L U B I I G N N M I I S G N D L U B I D N A D N A L D N A D N A L 96 ) 8 8 7 8 5 , ( – – – ) 6 5 6 0 3 , ( – – – – – 7 1 8 6 7 , ) 7 3 4 2 5 , ( – – 1 3 6 6 , 1 3 6 6 , ) 4 5 1 7 3 1 , ( ) 8 8 8 7 , ( – – ) 0 0 0 2 , ( ) 3 0 5 2 1 , ( – – – – 0 3 0 6 1 , 1 6 5 3 , 8 0 1 1 , – – – – – – – – – – – – ) 5 4 9 6 , ( ) 0 6 1 9 2 , ( – – – – – – – – 9 2 6 3 5 , ) 2 3 3 6 1 , ( – ) 8 4 6 1 5 , ( 3 0 5 2 1 , – – – – – – – – – – ) 8 0 5 2 2 , ( ) 6 4 0 1 , ( ) 2 0 1 7 , ( – – 9 8 4 2 , n o i t a t i l i b a h e R n i s t n e m e v o M 1 s t e s s A f o t n e m e r u s a e m e R s n o i t i d d A ) 0 4 1 5 , ( 0 1 n o t n e L – l a s o p s D i – – 3 1 4 1 d n a n o i t a r o l p x E o t s r e f s n a r T y t r e p o r P n h t i i w s r e f s n a r T i t n e m p u q E d n a t n a l P s t e s s A n o i t a u l a v E s t e s s A f o l a s o p s D i e g r a h C t n e m r i a p m I n o i t a s i t r o m A n o i t a c e r p e D / i , 6 4 2 6 5 7 1 , 8 0 9 5 9 , 1 2 2 0 1 , 5 6 9 6 3 , 0 5 5 5 7 , 5 0 7 3 2 9 , 6 6 4 6 3 4 , 1 1 0 2 , 0 2 4 5 7 1 , 2 2 0 2 y l u J 1 3 t a e c n a l a B , 7 2 8 4 8 0 2 , 8 4 1 1 8 , 6 0 1 5 2 , 7 2 8 5 4 , 6 4 6 3 1 1 , , 6 2 2 4 4 0 1 , 2 3 3 8 5 5 , 6 6 0 7 , 6 7 4 9 0 2 , 0 2 0 2 t s u g u A 1 t a e c n a l a B 1 2 0 2 y l u J 1 3 d e d n e r a e Y 4 0 6 6 8 , 4 8 0 7 3 , 1 6 1 2 , 7 3 7 2 , – ) 7 0 8 4 , ( ) 7 0 8 4 , ( ) 7 6 0 0 1 , ( ) 2 9 9 ( – ) – – – 8 6 8 4 , ( ) ) 3 4 7 7 1 , ( 8 4 4 3 4 , ( ) 8 7 2 5 4 1 , ( ) 6 5 2 9 , ( ) 6 3 1 2 , ( – – – ) 3 7 5 8 1 , ( – – – – 5 5 2 4 9 4 , 4 4 5 5 , ) 6 0 6 2 , ( – – – – – – – – – – ) 2 9 9 ( ) 5 8 3 1 , ( ) 9 2 5 5 , ( ) 7 3 6 5 , ( – – – – – – – – ) 4 6 6 1 6 , ( – – 5 3 8 6 3 , 8 8 2 5 , – 1 4 4 3 2 , ) 2 1 3 2 1 , ( ) 1 9 1 0 3 , ) 5 5 2 1 6 , ( ( – – – – – 8 3 n o i t a t i l i b a h e R n i s t n e m e v o M i d e fi s s a l C t e s s A o t s r e f s n a r T 1 s t e s s A f o t n e m e r u s a e m e R s n o i t i d d A ) 0 0 0 3 , ( ) 7 6 0 7 , ( 0 1 e l a S r o f d l e H s a – – – ) 5 3 6 ( – – ) 1 3 4 5 , ( ) 1 0 1 9 , ( 3 1 4 1 d n a n o i t a r o l p x E o t s r e f s n a r T s t e s s A n o i t a u l a v E i t n e m p u q E d n a t n a l P s t e s s A f o l a s o p s D i e g r a h C t n e m r i a p m I ) 8 3 2 ( ) 9 9 6 1 , ( e s n e p x E n o i t a s i t r o m A n o i t a c e r p e D / i , y t r e p o r P n h t i i w s r e f s n a r T , 3 3 8 1 5 9 1 , 5 6 1 7 9 , 4 9 6 8 , 5 9 2 5 4 , 0 7 5 8 0 1 , 2 6 5 2 8 9 , 8 3 1 0 2 5 , 3 9 1 3 , 6 1 2 6 8 1 , 1 2 0 2 y l u J 1 3 t a e c n a l a B . s m r e t e s a e l n i e g n a h c a o t e u d s t e s s A e s U - f o - t h g R i f o t n e m e r u s a e m e r o t s e t a l e r s t e s s a f o t n e m e r u s a e m e R 1 ) 6 4 9 4 , ( ) 8 6 9 4 , ( ) 7 5 8 8 5 , ( ) 6 1 3 9 5 , ( ) 6 3 1 ( ) 3 4 0 1 , ( e s n e p x E NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022 11. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) SIGNIFICANT JUDGEMENTS AND ESTIMATES (A) 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. (B) Estimation Of Coal And Oil Reserves And Resources The Group estimates its coal reserves and resources based on information compiled by Competent Persons as defined in accordance with the JORC Code, which is produced by the Australasian Joint Ore Reserves Committee (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 May 2022). 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, including the commercial viability of their extraction. 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. (C) New Acland Stage 3 Approvals There have been several key developments in the approvals of the New Acland Stage 3 project (NAC03) during the reporting period. An assessment has undertaken based on these key developments as at 31 July 2022 for any potential indicators of impairment to the Coal Mining QLD operations CGU assets. Refer to Note 14 for details on Impairment of Assets. 97 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202212. INTANGIBLE ASSETS ACCOUNTING POLICY IT Development and Software Water Rights and Mining Information Goodwill 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. 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. NOTES SOFTWARE $000 GOODWILL $000 WATER RIGHTS $000 MINING INFORMATION $000 Year ended 31 July 2022 Balance at 1 August 2021 Amortisation Charge Disposal Disposal – Lenton Balance at 31 July 2022 Year ended 31 July 2021 Balance at 1 August 2020 Amortisation Charge Balance at 31 July 2021 10 892 (458) (34) – 400 1,443 (551) 892 TOTAL $000 76,552 (3,982) (34) (909) 5,595 – – – 10,892 (555) – – 59,173 (2,969) – (909) 5,595 10,337 55,295 71,627 5,595 – 5,595 11,447 (555) 10,892 62,142 (2,969) 59,173 80,627 (4,075) 76,552 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 (2021: $5,595,000) 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 2022 and any related impairment charge recognised in the Statement of Comprehensive Income. 98 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022        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 Disposal – Lenton Transfers from Property, Plant and Equipment Impairment Charge Balance at 31 July NOTES 2022 $000 2021 $000 71,043 105,533 105,533 13,367 (277) (42,591) – (4,989) 71,043 94,223 10,813 753 992 (1,248) 105,533 10 14 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, including but not limited to, judgements in relation to future commercial viability of exploration tenements, potential for successful development, the risk of expiration of exploration rights without renewal and planned expenditure for further exploration, all of which may be further impacted by climate change considerations. If after expenditure is capitalised information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalised is recognised in the Statement of Comprehensive Income in the period when the new information becomes available. Refer to Note 14 for the details regarding the impairment assessments performed at 31 July 2022 and any related impairment charge recognised in the Statement of Comprehensive Income. 99 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022  14. IMPAIRMENT 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. IMPAIRMENT INDICATOR ASSESSMENT AND ASSESSMENT OF RECOVERABLE AMOUNT The Company performed an impairment indicator assessment across all CGUs for the 2022 financial year and detailed impairment assessments where indicators of impairment have been identified or where Goodwill has been allocated to the CGU. An asset is impaired when its carrying amount exceeds its recoverable value. Where estimates of recoverable amounts have been required these have been determined using either a FVLCD or VIU discounted cash flow model, with the exception of exploration related CGUs and assets which uses a comparable resource multiple. These methodologies are subject to critical judgement, estimates and assumptions. Relevant considerations in respect of the Company’s impairment indicator assessments and the determination of CGU recoverable value are included below: (I) QLD COAL MINING OPERATIONS CGU The QLD Coal Mining Operations CGU is predominantly comprised of the New Acland Coal Mine, which includes New Acland Stage 2 and New Acland Stage 3 (NAC03). During the 2022 financial year the Company continued to consider the potential impact that recent developments in the legal and regulatory environment in relation to NAC03 may have on the recoverable amount for the CGU and whether there were any further indicators of impairment or factors suggesting reversal of previously recognised impairments of NAC03. 100 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 202214. IMPAIRMENT OF ASSETS (CONTINUED) B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED) (I) QLD COAL MINING OPERATIONS CGU (CONTINUED) A summary of key events pertaining to NAC03 approvals since July 2020 are detailed below: • The NAC03 project requires a Regional Interests Development Approval (RIDA) in accordance with the Regional Planning Interests Act 2014. Following an extended history of appeal, NAC03’s application for a RIDA 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 previous orders issued by the Queensland Court of Appeal given on 1 November 2019; • The High Court ordered the matter of NAC03’s application for Mining Leases and Environmental Authority to be re-heard in the Queensland Land Court; • On 17 December 2021, the Land Court of Queensland recommended that the Mining Leases and Environmental Authority amendment application be granted, subject to conditions; • On 26 May 2022, the Coordinator-General issued her change report to the stated conditions for the Environmental Authority for NAC03; • The Coordinator-General’s change report satisfies a condition to the Land Court of Queensland’s recommendation that NAC03’s Mining Leases and the Environmental Authority amendment be granted; • On 28 June 2022, the Department of Environment and Science issued the New Acland Mine Stage 3 Environmental Authority. The Environmental Authority includes the Coordinator-General’s amended stated conditions in accordance with the Land Court of Queensland’s recommendation that New Acland Mine Stage 3’s Mining Leases and the Environmental Authority amendment application be granted; and • On 26 August 2022, the Minister for Resources granted the New Acland Stage 3 Mining Leases, such that the associated water licence (AWL) remains the key outstanding approval. An Amended AWL application was submitted on 19 January 2019, which progressed through public consultation and is with the Minister for decision. For the year ending 31 July 2021, 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. An impairment charge of $40,259,000 was charged to Statement of Comprehensive Income. Given the above developments during the year ending 31 July 2022, the Directors reviewed the carrying amount for the CGU and whether there were any further indicators of impairment at 31 July 2022 or factors suggesting a reversal of impairment may be appropriate. No impairment indicators were identified during the period ended 31 July 2022, thus no impairment charge has been recognised in the Statement of Comprehensive Income (31 July 2021: $40,259,000). 101 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202214. IMPAIRMENT OF ASSETS (CONTINUED) B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED) (I) QLD COAL MINING OPERATIONS CGU (CONTINUED) The Carrying Value as at 31 July 2022 and Impairment Charge in the comparative period are outlined below: Property, Plant and Equipment Land and Buildings – Mining Plant and Equipment Mining Reserves, Leases and Development Assets Plant under Construction Intangibles Software Exploration and Evaluation Exploration and Evaluation at cost Total 2022 2021 CARRYING VALUE $000 IMPAIRMENT CHARGE $000 RECOVERABLE AMOUNT1 $000 IMPAIRMENT CHARGE $000 18,561 9,831 68 311 38 6,147 34,956 – – – – – – – 18,859 19,007 9,053 30,191 97 252 373 – – – 2,204 40,792 1,015 40,259 1 Recoverable amount as at 31 July 2021 represents the carrying value of the CGU, post impairment recognised of $40.3m. The total cumulative impairment recognised against the CGU is $151m. Additional considerations The QLD Coal Mining Operations CGU has existing long term take or pay agreements for port and water supply. In respect of the water agreement, should the remaining water licence approval for Stage 3 ultimately not be granted and the operations be placed into long-term care and maintenance or otherwise abandoned or disposed, an onerous contract may need to be recognised if the unavoidable costs of the contract cannot be mitigated. The take or pay agreement for rail that was in place in the prior comparative period expired in December 2021, refer Note 15(c). The QLD Coal Mining Operations CGU is a customer of the Port Operations CGU of the Group. As such in the event that the mining operations at NAC03 do not recommence, this may be relevant to the recoverable value of the Port Operations CGU and will be a factor in any future impairment considerations. Whilst at 31 July 2022 no indicators of impairment had been identified with respect to the Port Operations CGU, as the CGU includes an allocation of Goodwill the recoverable value of the Port Operations CGU is required to be compared to its carrying value on an annual basis in accordance with Australian Accounting Standards, as outlined in (B)(ii). 102 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022            14. IMPAIRMENT OF ASSETS (CONTINUED) B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED) (I) QLD COAL MINING OPERATIONS CGU (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 2022 $000 2021 $000 1,388 70,214 57,486 9,839 – 31 5,595 1,466 74,835 54,513 10,348 50 54 5,595 144,553 146,861 Goodwill relates to the acquisition of Queensland Bulk Handling Pty Ltd (Port Operations), $5,595,000, (2021: $5,595,000). 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 (2021: 9.5 per cent). At 31 July 2022 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 2022 financial year (2021: NIL). The Port Operations CGU is part of the Group’s Coal Mining QLD segment. (III) COAL EXPLORATION AND EVALUATION ASSETS The recoverable amount of the assets has historically been determined based on a FVLCD calculation underpinned by a resource multiple. A resource multiple is considered the appropriate valuation methodology for an exploration asset of this type as it represents the price paid for the resources in market transactions for exploration tenures. The Group determined that a resource multiple of $0.03 (31 July 2021: $0.03) be ascribed to the JORC resources. Impairment indicators were identified for the Yamala Coal Project resulting in the recognition of an impairment charge of $4,898,000. No other impairment indicators were identified during the period ended 31 July 2022 in the Statement of Comprehensive Income (2021: $1,618,000). 103 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022    14. IMPAIRMENTS OF ASSETS (CONTINUED) B. ASSESSMENT OF RECOVERABLE AMOUNT (CONTINUED) (III) COAL EXPLORATION AND EVALUATION ASSETS (CONTINUED) The Carrying Value and Impairment Charge calculated is outlined below: North Surat Coal Project Exploration and Evaluation Property, Plant and Equipment Yamala Coal Project Exploration and Evaluation Total 2022 2021 CARRYING VALUE $000 IMPAIRMENT CHARGE $000 CARRYING VALUE $000 IMPAIRMENT CHARGE $000 25,952 8,685 – 34,637 – – 4,989 4,989 25,530 8,797 4,989 39,316 233 1,385 – 1,618 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. 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 particular future supply and demand for fossil fuels impacted by legislation and or regulation to a lower carbon economy may impact the commodity prices the Company receives for its products in global energy markets and the commercial viability of its exploration and evaluation assets. Such changes may result in additional impairment indicators for the Company’s assets and CGUs in the future. 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. 104 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022     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 Other Long-Term Employee Benefit Obligations Restoration, Rehabilitation and Environmental Expenditure Onerous contracts 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 for 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. 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. 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. Other provisions including legal claims The Group recognises a provision when: a) it has a present obligation, b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and c) a reliable estimate can be made of the amount to settle the obligation. If the Group has a present obligation arising from past events but d) it is possible rather than probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or e) the amount of the obligation cannot be measured with sufficient reliability, the Group discloses a contingent liability. 105 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202215. PROVISIONS (CONTINUED) EMPLOYEE BENEFITS $000 RESTORATION/ REHABILITATION $000 ONEROUS CONTRACTS $000 2022 Current Non-Current 2021 Current Non-Current A. EMPLOYEE BENEFITS 25,734 7,590 33,324 36,630 6,976 43,606 Current long service leave obligations expected to be settled after 12 months 6,099 158,771 164,870 – – – TOTAL $000 31,833 166,361 198,194 326 16,477 267,633 267,959 – 16,477 53,433 274,609 328,042 2022 $000 7,932 2021 $000 11,138 The current provision for employee benefits includes accrued annual leave, vested sick leave and long service leave for all unconditional settlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payment in certain circumstances. The entire amount is presented as current, since the Group does not have an unconditional right to defer settlement. However, based on past experience the Group does not expect all employees to take the full amount of accrued long service leave or require payment within the next 12 months. B. MINING RESTORATION AND REHABILITATION Movements Balance at 1 August Provision Capitalised Disposal – Lenton Provision charged/(released) to Profit or Loss Charged to Profit or Loss – unwinding of discount Balance at 31 July C. ONEROUS CONTRACTS NOTES 2022 $000 2021 $000 10b 20(d) 267,959 249,056 (52,714) (50,327) (4,389) 4,341 3,490 – 11,517 3,896 164,870 267,959 At 31 July 2022, the provision for the onerous take or pay rail contract as a result of the ramp down of its QLD Mining operations was unwound as the contract ended in December 2021. 106 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022   15. PROVISIONS (CONTINUED) 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. 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 parties have exchanged evidence; • Discovery of documents is substantively completed but remains ongoing; • The Court has set down the matter for hearing to commence on 13 February 2023 with a six-week period reserved; and • The Group denies the claims made by the Liquidators and intends to vigorously defend the proceedings. The Company has considered its position and has determined that no provision is required to be made as at 31 July 2022. The Company recognises legal expenses as incurred. The Group incurred Liquidation related expenses including legal expenses of $9,823,000 during the year ending 31 July 2022 ($2,620,000 31 July 2021). SIGNIFICANT 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. 107 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022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 2022 $000 2021 $000 715,714 424,663 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 (2021 – 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 24. 17. TERM DEPOSITS ACCOUNTING POLICY Investments are nonderivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. Investments are carried at amortised cost. Term Deposits 2022 $000 100,000 2021 $000 – Following the Company’s strong accumulation of cash and equivalents in the year, a Term Deposit for $100.0 million was placed in July 2022 for a period of 12 months. 108 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 202218. 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 Statement of Comprehensive Income. Listed Equity Securities Un-Listed Equity Securities Total Equity Securities 2022 $000 490 94,483 94,973 2021 $000 229 – 229 An irrevocable election has been made to classify existing Equity Investments held by the Group at FVOCI. Malabar Resources Limited The Company, through a wholly owned subsidiary, has acquired, with a settlement date of 27 July 2022, a 15 per cent interest in Malabar Resources Limited (Malabar) for a total investment of $94.4 million. Malabar is an unlisted public company whose flagship asset is the Maxwell Mine, an underground metallurgical coal project located 10kms south-west of Muswellbrook in the Hunter Valley. Construction of the project commenced in May 2022. The Company’s investment in Malabar: • Aligns with the Company’s strategy to invest its surplus cash into coal assets that are low on the cost curve with long life approvals; • Adds meaningful equity tonnes at an attractive entry price investing alongside well-respected founders who have a strong track record of developing coal projects and companies; • Diversifies the Company’s asset base by providing exposure to metallurgical coal mined by low impact, underground methods; • Facilitates delivery of a project with strong technical and operational foundations and the ability to unlock value with the use of significant established infrastructure; and • Provides attractive investment returns over the life of the project with additional upside return opportunities from diversified enterprises including exploration and agricultural assets and the future development of an approved 25MW solar farm. The Company’s investment in Malabar Resources was pursuant to an equity raising conducted by Malabar Resources in which the Company acquired 75,530,455 ordinary shares at $1.25 per share funded from existing cash (paid 27 July 2022). The investment in Malabar Resources is classified as a Financial Asset and the Group has made an irrevocable election to account for the equity investment at fair value through other comprehensive income. The Company considered the nature of its investment in Malabar Resources and assessed whether it has significant influence over the entity. The determination of the existence of significant influence requires judgement, having regard to a number of factors.  Based on its shareholding and board composition, the Company determined that it does not have significant influence over Malabar Resources. 109 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202219. UNEARNED REVENUE ACCOUNTING POLICY Unearned Revenue relates to the advance consideration received from customers for contractual obligations, e.g., transfer of goods or services. Revenue is recognised over the period during which the service or performance obligation is delivered. Current Liabilities Unearned revenue Total Current Non-Current Unearned revenue Total Non-Current Total Unearned Revenue 2022 $000 906 906 2,844 2,844 3,750 2021 $000 – – – – – Unearned revenue represents the revenue received in advance in relation to the sale of gas. 20. 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. 2022 $000 2021 $000 10,690 – 10,690 86,590 – 191,241 277,831 288,521 10,066 953 11,019 90,585 307,101 189,193 586,879 597,898 Current Liabilities Lease Liabilities Secured loan Total Current Non-Current Liabilities Lease Liabilities Secured Loan1 Unsecured Convertible Notes2 Total Non-Current Total Borrowings 1 Net of transaction costs capitalised $NIL (2021: $2,898,000). 2 Net of transaction costs capitalised. 110 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022 20. BORROWINGS (CONTINUED) 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. (I) SECURED LOANS Current Liabilities Non-Current Liabilities Total 2022 $000 – – – 2021 $000 953 307,101 308,054 Financing Activities During The Period The $600,000,000 drawable amortising facility was cancelled by the Group prior to 31 July 2022. The $300,000,000 credit support facility remains in place. 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 Pty 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. (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. 111 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202220. BORROWINGS (CONTINUED) A. INTEREST-BEARING LOANS (CONTINUED) 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. Total interest paid during the 2022 financial year period was $5,500,000 (2021: NIL). The net proceeds from the Notes, after deducting all the related costs and expenses, were $195,202,000. The proceeds were recorded in Cash and Cash Equivalents at 31 July 2021. 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 Nominal Value of Convertible Notes issued Equity Component of the Convertible Notes1 Transaction Fees1 At Inception Liability Component Opening Balance Repayment Interest on Convertible Notes Unsecured Non-Current Liabilities 2022 $000 – – – – 2021 $000 200,000 (6,610) (4,798) 188,592 189,193 188,592 (5,500) 7,548 – 601 191,241 189,193 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 2022 financial year. The number of Ordinary Shares into which the Notes may convert at 31 July 2022 is 106,746,372 (2021: 95,238,095). The movement relates to changes in the conversion price made by the Company in accordance with the conditions of the Note into ordinary shares in New Hope Corporation Limited. 112 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022    20. 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 cannot 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 the Statement of Comprehensive Income 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 the Statement of Comprehensive Income. Short-term leases are leases with a lease term of 12 months or less. Low-value assets are comprised of IT equipment and small items of office furniture. The Group leases property, including office buildings and port facilities, and plant and equipment. Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions. 113 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202220. BORROWINGS (CONTINUED) B. LEASE LIABILITIES (CONTINUED) 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 Statement of Comprehensive Income during the financial year: 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 2022 $000 2021 $000 15,157 45,737 75,079 14,398 52,195 73,072 135,973 139,665 (38,693) 97,280 (39,014) 100,651 10,690 32,738 53,852 97,280 7,888 – 4,421 129 – 10,066 38,977 51,608 100,651 9,256 2,136 5,173 516 51 Total Expense for Leases recognised in the Statement of Comprehensive Income 12,438 17,132 1 Amounts recognised within the Statement of Comprehensive Income as Cost of Sales 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. 114 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022  NON-CASH CHANGES1 $000 6,790 2,076 7,548 NON-CASH CHANGES1 $000 31,382 2,102 2022 $000 97,280 – 191,241 288,521 2021 $000 100,651 308,054 (6,509) 189,193 26,975 597,898 20. 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 below: CHANGES ARISING IN LIABILITIES FROM FINANCING ACTIVITIES Lease Liabilities Secured Loans Unsecured Convertible Notes Total Liabilities from Financing Activities 2022 $000 CASH FLOWS $000 100,651 308,054 189,193 597,898 (10,161) (310,130) (5,500) (325,791) 16,414 CHANGES ARISING IN LIABILITIES FROM FINANCING ACTIVITIES 2021 $000 CASH FLOWS $000 Lease Liabilities Secured Loans Unsecured Convertible Notes Total Liabilities from Financing Activities 83,145 355,952 – 439,097 (13,876) (50,000) 195,702 131,826 1 Total non-cash change in Lease Liabilities during the 2022 financial year includes $6,631,000 related to a remeasurement of leases during the year. In the 2021 financial year, total non-cash changes included $37,085,000 of new leases recognised and a reduction of $4,723,000 related to a remeasurement of leases during the year. The fair value of Interest-Bearing Liabilities materially approximates their respective carrying values as at 31 July 2022. 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. 115 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202220. BORROWINGS (CONTINUED) D. FINANCE INCOME AND EXPENSE (CONTINUED) 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 Financing Expenses E. CONTINGENT LIABILITIES 2022 $000 1,644 1,644 (1,553) (1,346) (6,115) (7,548) (4,421) (4,341) (1,406) 2021 $000 85 85 (10,681) (2,076) (2,275) (601) (5,173) (3,896) (1,973) (26,730) (26,675) Details and estimates of maximum amounts of Contingent Liabilities for which no provision is included in the accounts are as follows: The Bankers of the Consolidated Entity have issued undertakings and guarantees to the Department of Natural Resources and Mines, Statutory Power Authorities, and various other entities. No losses are anticipated in respect of any of the above Contingent Liabilities. 2022 $000 14,686 2021 $000 14,132 The Parent Company has given secured guarantees in respect of: (i) Mining Restoration and Rehabilitation 158,374 102,091 The liability has been recognised by the Group in relation to its rehabilitation obligations. (ii) Statutory body suppliers, financiers and various other entities 14,686 14,132 With the exception of the Financial Guarantee Liability of $2.5 million recognised in relation to Lenton (Refer Note 10B), no liabilities were 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 10(b) and Note 15(d) there are no other contingent liabilities for the Group at 31 July 2022 (2021: NIL). 116 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022 20. BORROWINGS (CONTINUED) F. LINES OF CREDIT Unrestricted access was available at 31 July 2022 to the following lines of credit available of $300,000,000 (2021: $300,000,000). 2022 $000 2021 $000 126,940 183,777 173,060 116,223 Guarantee Facility Utilised Guarantee Facility Unutilised 21. 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. 117 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202221. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED) 2022 Notional amount Carrying amount of the hedging instrument: - Assets - Liabilities Total carrying amount of the hedging instrument Change in value of hedging instrument(i) Change in value of hedged item(i) Change in value of the hedging instrument recognised in reserve(ii) Hedge ineffectiveness recognised in profit or loss(iii) Amount reclassified from hedge reserve to profit or loss Balance in cash flow hedge reserve for continuing hedges Notes (i) Amounts related to change in value include time value components. CASH FLOW HEDGES FECS $’000 FX OPTIONS $’000 COMMODITY SWAPS $’000 TOTAL $’000 USD 60,000 USD 480,000 USD 722,925 - (1,922) (1,922) (11,668) 11,668 (20,880) – 9,212 (1,922) 1,365 (8,479) (7,114) (7,114) 7,114 (7,343) – 229 - 1,365 (134,197) (144,598) (134,197) (143,233) (134,197) (152,979) 134,197 152,979 (134,197) (162,420) – – 9,441 (7,114) (134,197) (143,233)(iv) (ii) Hedge effectiveness is the extent to which the changes in fair value of the hedging instrument offsets changes in the fair value of the hedged item. (iii) Hedge ineffectiveness is the extent to which the changes in the cash flows of the hedging instrument are greater or less than the hedged item. Sources of ineffectiveness include the effect of credit risk on the hedging instrument. A positive number represents a gain in the Profit or Loss. (iv) The post-tax equivalent of the total balance in cash flow hedge reserve for continuing hedges is A$(100,263,000) 2022 $000 2021 $000 – 9,746 1,365 1,365 2022 $000 (17,335) (127,263) (144,598) – 9,746 2021 $000 – – – Current Assets Derivatives – Hedging Instruments Non-Current Assets Derivatives – Hedging Instruments Total Derivatives Financial Assets Current Liabilities Derivatives – Hedging Instruments Non-Current Liabilities Derivatives – Hedging Instruments Total Derivatives Financial Liabilities 118 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022       21. 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 2022, Derivative Financial Instruments represented assets with a fair value of $1,365,000 (2021 – $9,746,000) and liabilities of $144,598,000 (2021 – NIL). At balance date the details of outstanding contracts are: (I) FOREIGN EXCHANGE CONTRACTS MATURITY 0 to 6 months 6 to 12 months More than 12 months Total Foreign Exchange Contracts II) FOREIGN EXCHANGE OPTIONS MATURITY 0 to 6 months 6 to 12 months More than 12 months Total Foreign Exchange Options III) COMMODITY SWAPS MATURITY 0 to 6 months 6 to 12 months More than 12 months Total Commodity Swaps B. CREDIT RISK EXPOSURES SELL US DOLLARS BUY AUSTRALIAN DOLLARS AVERAGE EXCHANGE RATE 2022 $000 2021 $000 2022 RATE 2021 RATE 60,000 46,319 0.7116 0.5829 – – – – 60,000 46,319 – – – – SELL US DOLLARS BUY AUSTRALIAN DOLLARS AVERAGE EXCHANGE RATE 2022 $000 2021 $000 2022 RATE 2021 RATE 120,000 230,000 130,000 480,000 0.7038 0.7261 0.6700 – – – – – – – – SELL COAL USD PRICE BUY COAL USD PRICE AVERAGE COAL USD PRICE 2022 $000 2021 $000 2022 PRICE 2021 PRICE 60,750 54,675 607,500 722,925 $405.00 $405.00 $405.00 – – – – – – – – 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 2022 $60,000,000 (2021: $46,319,000) was receivable relating to Forward Foreign Exchange Contracts. 119 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202222. 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 2021 Final Dividend at 7.00 cents per share – 100% franked (tax rate – 30%) (paid on 9 Nov 2021) 2022 Interim Dividend at 17.00 cents per share – 100% franked (tax rate – 30%) (paid on 4 May 2022) 2022 Special Dividend at 13.00 cents per share – 100% franked (tax rate – 30%) (paid on 4 May 2022) Total Dividends Paid B. PROPOSED DIVIDENDS 2022 $000 58,265 2021 $000 – 141,500 33,298 108,207 – 307,972 33,298 In addition to the above Dividends, the Directors have declared a Final Dividend of 31.0 cents (2021: 7.00) and special dividend of 25.0 cents per share (2021: Nil). The Dividend is fully franked based on Tax paid at 30 per cent. The proposed Dividend expected to be paid on 8 November 2022. The declared Final Dividend has not been recognised as a liability at 31 July 2022 (2021: $NIL). C. FRANKED DIVIDENDS The franked portions of the Final Dividend recommended after 31 July 2022 will be franked out of existing Franking Credits. Franking Credits available for subsequent financial years based on a tax rate of 30% (2021 – 30%) 2022 $000 2021 $000 389,984 490,626 The above amounts represent the balances of the franking account as at the end of the Financial Year. This includes Franking Debits that arose from the payment of Dividends recognised as a liability at the reporting date and Franking Credits that arose 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 2022 financial year end, but not recognised as a liability at 31 July 2022, will result in a reduction in the franking account of $199,765,700 (2021: $14,270,000) when paid. D. DIVIDEND REINVESTMENT PLANS There were no Dividend Reinvestment Plans in operation at any time during or since the end of the Financial Year (2021: NIL). 120 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 202223. 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 29. C. SHARE CAPITAL Issued and Paid-Up Capital 832,357,082 97,536 832,357,082 97,536 2022 NUMBER OF SHARES 2022 $000 2021 NUMBER OF SHARES 2021 $000 D. MOVEMENTS IN SHARE CAPITAL DATE DETAILS 1 August 2021 Opening Balance 31 July 2022 Balance 1 August 2020 Opening Balance ISSUE PRICE NUMBER OF SHARES 832,357,082 832,357,082 831,708,318 1 August 2020 Vesting of Performance Rights 648,764 $0.00 31 August 2020 Share-Based Payment Transactions 31 July 2021 Balance – 832,357,082 $000 97,536 97,536 96,692 – 844 97,536 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. 121 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022      23. EQUITY (CONTINUED) F. RESERVES ) 9 7 0 0 9 , ( ) 9 6 1 ( 0 1 6 6 , ) 9 2 0 6 , ( 3 7 5 ) 3 6 2 0 0 1 , ( 2 1 4 7 2 , ) 6 5 5 9 1 , ( 3 4 3 1 , – – 0 5 8 – – – – – – – – – – – 0 5 8 – – – – – – – – – – – – ) 9 2 2 9 8 ( , ) 9 6 1 ( 0 1 6 6 , ) 9 2 0 6 ( , 3 2 4 1 , ) 3 6 2 0 0 1 ( , 2 1 4 7 2 , ) 6 5 5 9 1 ( , 3 4 3 1 , 1 4 4 9 , ) 2 3 8 2 , ( – – 0 9 8 6 1 , ) 4 2 ( 6 2 7 8 4 , – ) 4 0 3 2 6 1 , ( ) 5 4 1 ( L A T O T 0 0 0 $ 0 0 0 $ I N G E R O F Y C N E R R U C I N O T A L S N A R T – – – – E L B I 0 0 0 $ S E T O N 0 1 6 6 , – – – – – – – – ) 9 2 0 6 , ( 3 7 5 0 0 0 $ 2 2 8 6 , 1 4 4 9 , ) 2 3 8 2 , ( ) 0 2 4 2 6 1 , 6 2 7 8 4 , ( – – – – – – – 1 6 2 – – – – - T R E V N O C I M U M E R P I D A P 0 0 0 $ 1 I C N N O 0 0 0 $ - E R A H S D E S A B S T N E M Y A P I G N G D E H 0 0 0 $ - L A V E R I N O T A U I Y T U Q E - T S E V N I S T N E M 0 0 0 $ 0 0 0 $ I L A T P A C I S T F O R P 2 1 4 7 2 , ) 7 1 8 9 1 , ( 3 4 3 1 , S E T O N ) s s o L ( / t fi o r p t e N o t r e f s n a r T s s o r G – ) s s o L ( / t fi o r p t e N o t r e f s n a r T s s o r G – n o i t a u l a v e R x a T d e r r e f e D – x a T d e r r e f e D – n o i t a u l a v e R 1 2 0 2 t s u g u A 1 t A s r e n w O h t i w s n o i t c a s n a r T s r e n w O s a y t i c a p a c r i e h t n i - e r a h S n i t n e m e v o M t e N e v r e s e R t n e m y a P d e s a B y t i u q e f o n o i t i n g o c e R 2 t n e n o p m o c 122 2 1 4 7 2 , ) 4 5 8 9 1 , ( 3 4 3 1 , 0 2 0 2 t s u g u A 1 t A 3 5 5 2 4 , 7 5 9 4 5 , ) 7 8 4 6 1 , ( 2 – – ) 4 6 9 9 9 , ( ) 6 2 ( 3 9 9 9 2 , – 2 5 0 1 1 , ) 4 2 ( 0 1 6 6 , 2 7 ) 4 4 8 ( – – – – – – – – – – – – – – – – – ) 9 2 0 6 , ( 5 4 3 1 , ) 9 2 0 6 , ( 5 4 3 1 , 4 3 3 8 3 , 7 5 9 4 5 , ) 7 8 4 6 1 , ( ) 5 7 9 9 9 , ( 2 2 8 6 , 3 9 9 9 2 , – – – – – – – 7 3 – – – – 2 1 4 7 2 , ) 7 1 8 9 1 , ( 3 4 3 1 , – – 0 1 6 6 , – – – – 2 7 ) 4 4 8 ( – – – – – – – – – – – – 0 9 8 6 1 , ) 4 2 ( 0 1 6 6 , ) 9 2 0 6 ( , 3 7 5 2 2 8 6 , 2 1 4 7 2 , ) 7 1 8 9 1 ( , 3 4 3 1 , 9 2 ) d ( 3 2 d e t u b i r t n o C o t r e f s n a r T 2 2 0 2 y l u J 1 3 t A y t i u q E 9 2 ) s s o L ( / t fi o r p t e N o t r e f s n a r T s s o r G – ) s s o L ( / t fi o r p t e N o t r e f s n a r T s s o r G – n o i t a u l a v e R x a T d e r r e f e D – x a T d e r r e f e D – n o i t a u l a v e R s r e n w O h t i w s n o i t c a s n a r T s r e n w O s a y t i c a p a c r i e h t n i - e r a h S n i t n e m e v o M t e N e v r e s e R t n e m y a P d e s a B y t i u q e f o n o i t i n g o c e R 2 t n e n o p m o c ) d ( 3 2 d e t u b i r t n o C o t r e f s n a r T 1 2 0 2 y l u J 1 3 t A y t i u q E . ) , 0 0 0 3 6 1 $ : 1 2 0 2 I ( L N $ f o s t s o c n o i t c a s n a r t f o t e N . t s e r e t n I g n i l l o r t n o C - n o N – I C N 1 2 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022       23. EQUITY (CONTINUED) F. RESERVES (CONTINUED) NATURE AND PURPOSE OF RESERVES Capital Profits This reserve represents amounts allocated from retained profits that were profits of a capital nature. Equity Investments Changes in the fair value of Equity Investments are taken to this Reserve. Amounts are recognised in the Statement of Comprehensive Income or transferred to Retained Earnings when the associated assets are sold or impaired. Revaluation Hedging Share-Based Payments Premium Paid on Non-Controlling Interest Acquisition 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 changes in fair value of a hedging instrument in a Cash Flow Hedge that are recognised directly in Equity, as described in Note 21. 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. 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 20 A. (ii)). G. RETAINED PROFITS Carrying Amount at Beginning of Year Net profit/(Loss) after Income Tax Dividends Paid Balance at End of Year 24. FINANCIAL RISK MANAGEMENT ACCOUNTING POLICY NOTES 2022 $000 2021 $000 1,632,187 1,586,135 983,009 79,350 22(a) (307,972) (33,298) 2,307,224 1,632,187 The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses Derivative Financial Instruments such as Foreign Exchange Contracts to hedge certain risk exposures. Derivatives are used exclusively for hedging purposes, i.e. not as trading or other speculative instruments. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. Risk management is carried out in accordance with written policies approved by the Board of Directors. These written policies cover specific areas, such as mitigating foreign exchange, interest rate and credit risks, use of forward exchange contracts and investment of excess liquidity. 123 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202224. FINANCIAL RISK MANAGEMENT (CONTINUED) The Group holds the following financial instruments: FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME $000 NOTES HEDGING DERIVATIVES $000 AMORTISED COST $000 FAIR VALUE THROUGH PROFIT & LOSS $000 TOTAL $000 715,714 526,721 100,000 94,973 1,365 – – – – 1,365 1,365 – – – – 9,746 9,746 715,714 97,362 100,000 – – – 429,359 – – – 913,076 429,359 1,438,773 424,663 100,359 – – – – 9,216 – – – 424,663 109,575 – 229 9,746 525,022 9,216 544,213 – – – – 144,598 144,598 97,280 89,672 – 191,241 – – 4,806 – – – 378,193 4,806 – – – – – – 100,651 78,786 308,054 189,193 – 676,684 – – – – – – 97,280 94,478 – 191,241 144,598 527,597 100,651 78,786 308,054 189,193 – 676,684 Financial Assets 2022 Cash and Cash Equivalents Trade and Other Receivables Term Deposit Equity Investments Derivative Financial Instruments 2021 Cash and Cash Equivalents Trade and Other Receivables Term Deposit Equity Investments Derivative Financial Instruments Financial Liabilities 2022 Lease Liabilities Trade and Other Payables Secured Loans Unsecured Loans Derivative Financial Instruments 2021 Lease Liabilities Trade and Other Payables Secured Loans Unsecured Loans Derivative Financial Instruments 16 7 17 18 21 16 7 17 18 21 20 8 20 20 21 20 8 20 20 21 – – – 94,973 – 94,973 – – – 229 – 229 – – – – – – – – – – – – 124 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022                24. 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 and Options are used to manage foreign exchange risk. Senior management is responsible for managing exposures in each foreign currency by using forward currency contracts and options. Contracts and Options are designated as Cash Flow Hedges. Foreign Exchange Contracts and Options 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 Derivatives – Foreign Exchange Forward Contracts1 Derivatives – Foreign Exchange Options1 Derivatives – Commodity Swaps1 Trade Payables 1 Notional amounts. (II) COMMODITY HEDGE RISK 2022 USD $000 2,908 310,833 60,000 480,000 722,925 11,049 2021 USD $000 50,768 47,344 27,000 – – 5,020 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 2022, 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 $33,598,000/($27,490,000) (2021 – $8,026,000/($9,809,000)), 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 2022, 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 $10,826,000/ ($6,472,000) (2021 – $3,324,000/($4,062,000)). There is no effect on post-tax profits. Based on the foreign exchange options held at 31 July 2022, had the Australian dollar weakened/strengthened by 10 per cent against the US dollar with all other variables held constant, the Group’s equity may be impacted to the extent that the increased/ decreased spot rate reaches a level beyond the Protective and the Participation rates. 125 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202224. FINANCIAL RISK MANAGEMENT (CONTINUED) A. MARKET RISK (CONTINUED) (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 $65,600/($65,600)) (2021 – $31,000/($31,000)). 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 24 (e). 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 26). 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 Term Deposits Derivative Financial Instruments C. LIQUIDITY RISK NOTES 16 21 2022 $000 526,721 715,714 100,000 1,365 2021 $000 109,575 424,663 – 9,746 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 unsecured convertible notes and leases detailed in Note 20. The maturity of these arrangements is shown on the following page. 126 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 202224. FINANCIAL RISK MANAGEMENT (CONTINUED) D. MATURITY OF FINANCIAL LIABILITIES The maturity groupings of Derivative Financial Instruments are detailed in Note 21. Trade Payables and Accruals (Note 8) are normally settled within 45 days of recognition. The Group’s Borrowings (Note 20) comprise Lease Liabilities and Secured and Unsecured Loans. The Group’s Secured Loan was terminated effective 15 July 2022 prior to its maturity in November 2023. Lease liabilities are fixed rate leases with a weighted average interest rate of 4.54 per cent (FY21: 4.45 per cent) and are payable over a period of one to 20 years (FY21: 21 years). Unsecured convertible notes represent 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. The table below details the contractual cash flows of Lease Liabilities, Unsecured Convertible Notes and Derivative Liabilities. 2022 Lease Liabilities Unsecured Convertible Notes Derivatives 2021 Lease Liabilities 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 7,665 2,750 3,198 7,688 2,750 13,902 31,551 75,333 136,139 97,278 5,500 211,000 – 222,000 191,241 14,137 92,403 34,860 144,598 144,598 7,060 2,750 7,338 2,750 14,726 37,469 73,072 139,665 5,500 216,500 – 227,500 100,651 189,193 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 The Group is no longer exposed to interest rate risk as the secured loan facilities have been cancelled as at 31 July 2022 (2021: $4,340,000/($4,340,000)). 127 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202224. FINANCIAL RISK MANAGEMENT (CONTINUED) 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). 128 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 202224. 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 2022 and 31 July 2021. 2022 Assets Derivatives Financial Instruments Trade Receivables – Provisionally Priced Other Receivables – Lenton Equity Investments Total Assets Liabilities Derivatives Financial Instruments Trade Payables -Provisionally Priced Total Liabilities 2021 Assets Derivatives Financial Instruments Trade Receivables – Provisionally Priced Equity Investments Total Assets Liabilities Derivatives Financial Instruments Total Liabilities LEVEL 1 $000 LEVEL 2 $000 TOTAL $000 – – – 490 490 – – – – – 229 229 – – 1,365 1,365 389,888 389,888 39,471 94,483 39,471 94,973 525,842 525,697 144,598 144,598 4,806 4,806 149,404 149,404 9,746 9,216 – 9,746 9,216 229 18,962 19,191 – – – – 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. 129 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202225. INTERESTS IN OTHER ENTITIES A. SUBSIDIARIES Significant subsidiaries include New Hope Bengalla Pty Ltd and Bridgeport Energy Pty Limited as well as the companies identified in the Deed of Cross Guarantee in Note 31. 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. 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 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. 26. 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 2022 $000 2021 $000 100,141 11,350 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 commenced on 18 October 2021, with lease payments receivable monthly and annual rent review escalation clauses included in the lease terms. 130 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 202226. COMMITMENTS (CONTINUED) 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 14 and 15(c). 27. EVENTS OCCURRING AFTER THE REPORTING PERIOD NEW ACLAND MINING LEASE APPROVAL On 26 August 2022, the Minister for Resources granted the New Acland Mine Stage 3 Mining Leases. The grant of the Mining Leases follows an independent assessment by the Minster for Resources including the consideration of the Land Courts recommendation that the New Acland Stage 3 Mining Leases be granted. The only remaining approval required before mining can begin is the granting of the Associated Water Licence by the Department of Regional Development, Manufacturing and Water. CONVERTIBLE BOND CONVERSION On 25 August 2022, the Company received a Conversion Notice in relation to holder of the Company’s Convertible Notes electing to convert their Notes in accordance with the conditions of the Notes into ordinary shares in New Hope Corporation Limited at the conversion price. The number of ordinary shares that were issued on 6 September 2022 under the Conversion Notice was 106,746.  On 8 September 2022, the Company received a Conversion Notice in relation to holder of the Company’s Convertible Notes electing to convert their Notes in accordance with the conditions of the Notes into ordinary shares in New Hope Corporation Limited at the conversion price. The number of ordinary shares that were issued on 14 September 2022 under the Conversion Notice was 426,985.  28. RELATED PARTY TRANSACTIONS A. PARENT ENTITIES With the appointment of a new Director, as at 29 July 2022, Washington H. Soul Pattinson and Company Limited (WHSP) no longer held control and is no longer the ultimate Australian parent entity and controlling entity. Washington H. Soul Pattinson and Company Limited (WHSP) as at 29 July 2022 owned 37.62 per cent (2021 – 36.95 per cent) of the issued ordinary shares of New Hope Corporation Limited, thus has significant influence and will treat New Hope Corporation Limited as an Associate from 30 July 2022 onwards. B. KEY MANAGEMENT PERSONNEL (I) DIRECTORS The following persons were Directors of New Hope Corporation Limited during the Financial Year: Chairman – Non-Executive Robert D. Millner Non-Executive Directors Todd J. Barlow Jacqueline E. McGill AO Thomas C. Millner Ian M. Williams Steven R. Boulton 131 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202228. RELATED PARTY TRANSACTIONS (CONTINUED) B. KEY MANAGEMENT PERSONNEL (CONTINUED) (II) OTHER KEY MANAGEMENT PERSONNEL The following persons also had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, during the Financial Year: CURRENT EXECUTIVE KMP NAME Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien FORMER EXECUTIVE KMP POSITION Chief Executive Officer Chief Financial Officer Executive General Manager and Company Secretary EMPLOYER New Hope Corporation Limited New Hope Corporation Limited New Hope Corporation Limited NAME POSITION EMPLOYER Reinhold H. Schmidt1 Chief Executive Officer New Hope Corporation Limited 1 Reinhold H. Schmidt ceased as KMP on 14 January 2022. (III) KEY MANAGEMENT PERSONNEL COMPENSATION Short-Term Employee Benefits Long-Term Employee Benefits Post-Employment Benefits Termination Payment Share-Based Payment C. TRANSACTIONS WITH RELATED PARTIES Dividends paid to ultimate Australian controlling entity (WHSP)1 Payment for consulting services rendered (Pitt Capital Partners Ltd) 1 Deconsolidation effective 29 July 2022 2022 $ 2021 $ 3,916,190 4,497,536 40,698 147,085 410,680 475,707 3,313 154,381 919,357 (184,202) 4,990,360 5,390,385 2022 $ 2021 $ 115,845,675 13,883,857 300,000 238 Detailed remuneration disclosures can be found in the Remuneration Report on pages 24 to 39. 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 2022 (2021: NIL). E. TERMS AND CONDITIONS Transactions relating to dividends were on the same terms and conditions that applied to other shareholders. 132 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022F. OTHER TRANSACTIONS OF KEY MANAGEMENT PERSONNEL R.D. Millner, 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, up until the effective date of de-consolidation as at 29 July 2022. Pitt Capital Partners Limited acted as financial advisor to the Group for various corporate transactions during the 2022 and 2021 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. 29. 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 Monte Carlo simulation valuation approach that takes into account 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 $850,000 (2021: ($72,000)). 133 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 202229. SHARE-BASED PAYMENTS (CONTINUED) Performance Rights Set out below is a summary of Performance Rights granted under the LTI plan: As at 1 August Granted during the year Lapsed during the year Forfeited during the year Vested and Exercised during the year As at 31 July 2022 2021 AVERAGE PRICE PER SHARE NUMBER OF PERFORMANCE RIGHTS AVERAGE PRICE PER SHARE NUMBER OF PERFORMANCE RIGHTS $1.995 $5.290 – 547,225 807,337 – $0.760 (414,056) – – $1.513 940,506 $2.279 $1.400 $1.290 $1.159 $1.290 $1.995 1,508,091 547,225 (35,865) (823,462) (648,764) 547,225 The weighted average share price at the date of vesting of Performance Rights during the 2022 year was $NIL (2021: $1.34). Performance Rights (LTI) outstanding at the end of the year have the following vesting date and fair value at grant date: GRANT DATE 29 Nov 2020 13 Sep 2022 Total VESTING DATE 1 Aug 2024 1 Aug 2024 VALUE OF PERFORMANCE RIGHT AT GRANT DATE $0.76 $3.76 Weighted average remaining contractual life of Performance Rights outstanding at end of period 2.0 years PERFORMANCE RIGHTS 2022 133,169 807,337 940,506 2021 547,225 – 547,225 3.0 years 30. 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 Statement of Comprehensive Income rather than being deducted from the carrying amount of these investments. 134 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 202230. PARENT ENTITY DISCLOSURES (CONTINUED) A. SUMMARY FINANCIAL INFORMATION The individual Financial Statements for the Parent entity show the following aggregate amounts: Statement of Financial Position Current Assets Non-Current Assets Total Assets Current Liabilities Non-Current Liabilities Total Liabilities Shareholders’ Equity Contributed Equity Reserves Share-Based Payment Other Reserves Retained Earnings Total Equity Loss for the Year Total Comprehensive Loss B. GUARANTEES ENTERED INTO BY PARENT ENTITY Bank Guarantees issued in relation to rehabilitation, statutory body suppliers and various other entities. 2022 $000 2021 $000 741,067 409,467 759,271 799,281 1,150,534 1,558,552 709,300 204,341 913,641 483,088 507,393 990,481 97,536 97,536 1,423 6,610 131,324 236,893 573 6,610 463,352 568,071 (24,063) (24,063) (31,041) (31,041) 2022 $000 2021 $000 173,060 116,223 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 20(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. 135 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022            30. PARENT ENTITY DISCLOSURES (CONTINUED) 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. 2022 $000 2021 $000 173,060 116,223 No losses are anticipated in respect of any of the above Contingent Liabilities, except for matters set out in Note 10B. D. CONTRACTUAL COMMITMENTS FOR THE ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT As at 31 July 2022, the Parent entity had contractual commitments for the acquisition of Property, Plant or Equipment totalling NIL (2021 – NIL). 31. DEED OF CROSS GUARANTEE New Hope Corporation Limited and each of the wholly-owned subsidiaries set out below (together the Closed Group) are party to a deed of cross guarantee (Deed), as defined in ASIC legislative instrument: ‘ASIC Corporations (Wholly-owned Companies) Instrument 2016/785’ (previously ASIC Class Order 98/1418 Wholly-owned entities) (ASIC Instrument). The general effect of the Deed is that each entity in the Closed Group guarantees the payment in full of all debts of other entities in the Closed Group in the event of their winding up. The purpose of entering into the Deed was so that members of the Closed Group could be eligible to obtain relief from the requirements under the Corporations Act 2001 to prepare and lodge audited financial reports. As at the end of the year, New Acland Coal Pty. Ltd., Andrew Wright Holdings Pty. Limited, Queensland Bulk Handling Pty Ltd, New Hope Bengalla Pty Ltd and Dexplan Pty Ltd were relying on the relief under the ASIC Instrument. The following entities are parties to the Deed and part of the Closed Group as at the end of the year1: • New Hope Corporation Limited • Jeebropilly Collieries Pty. Ltd. • Acland Pastoral Co. Pty Ltd • New Oakleigh Coal Pty. Ltd. • New Acland Coal Pty. Ltd. • Andrew Wright Holdings Pty. Limited • Arkdale Pty Ltd • Queensland Bulk Handling Pty Ltd • New Hope Bengalla Pty Ltd2 • Dexplan Pty Ltd3 • Tivoli Collieries Pty. Ltd.4 As there are no other parties to the Deed that are controlled by New Hope Corporation Limited, the above entities also represent the ‘Extended Closed Group’ for the purposes of the ASIC Instrument. 1 New Lenton Coal Pty Ltd ceased to be a member of the Closed Group and a party to the Deed on 1 July 2022 by reason of being the subject of a notice of disposal. 2 Added as a party to the Deed under an Assumption Deed dated 21 July 2022. 3 Added as a party to the Deed under an Assumption Deed dated 21 July 2022. 4 Added as a party to the Deed under an Assumption Deed dated 21 July 2022. 136 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 202231. DEED OF CROSS GUARANTEE (CONTINUED) A. STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME Set out below is the Statement of Consolidated Comprehensive Income for the year ended 31 July 2022 for the Closed Group: Revenue from Operations Other Income Expenses Cost of Sales Marketing and Transportation Administration Financing Costs Other Expenses Impairment of Assets Loss before Income Tax Income Tax Benefit 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 2022 $000 2021 $000 2,503,471 185,907 – 17 2,503,471 185,924 (978,597) (122,665) (80,142) (107,829) (3,287) (25,025) (9,823) – (11,429) (20,382) (2,620) (43,030) 1,406,597 (122,031) (419,185) 36,584 987,412 (85,447) (113,694) 6,609 (107,085) 880,327 18 8,521 8,539 (76,908) 137 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022  31. DEED OF CROSS GUARANTEE (CONTINUED) B. STATEMENT OF FINANCIAL POSITION Set out below is a Statement of Financial Position as at 31 July 2022 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 Derivative Financial Instruments Total Non-Current Assets Total Assets Current Liabilities Trade and Other Payables Borrowings Current Tax Liabilities Provisions Derivative financial instruments Total Current Liabilities Non-Current Liabilities Borrowings Provisions Derivative financial instruments Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed Equity Reserves Retained Earnings Total Equity 138 2022 $000 705,618 473,516 – 61,211 – – 2021 $000 395,532 396,394 404 32,853 3,000 – 1,240,345 828,183 165,191 152,690 1,664,616 75,849 6,147 8,273 1,365 523,006 52,620 352,609 6,932 43,897 54,611 – 2,074,131 1,033,675 3,314,476 1,861,858 89,753 10,294 379,042 35,491 17,335 25,503 4,276 24,528 36,900 531,915 91,207 279,980 138,906 127,263 546,149 1,078,064 560,865 130,824 – 691,689 782,896 2,236,412 1,078,962 97,536 (63,996) 97,536 35,701 2,202,872 945,725 2,236,412 1,078,962 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 202232. 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 Other Advisory Services Total 33. OTHER ACCOUNTING POLICIES A. FOREIGN CURRENCY TRANSLATION (I) FUNCTIONAL AND PRESENTATION CURRENCY 2022 $000 2021 $000 641,000 264,233 905,233 538,669 127,667 666,336 10,000 10,000 105,000 105,000 442,285 442,285 51,500 51,500 1,357,518 822,836 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. 139 NOTES TO THE FINANCIAL STATEMENTS NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWFOR THE YEAR ENDED 31 JULY 2022 33. OTHER ACCOUNTING POLICIES (CONTINUED) A. FOREIGN CURRENCY TRANSLATION (CONTINUED) (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. 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. 140 NOTES TO THE FINANCIAL STATEMENTS2022 ANNUAL REPORT NEW HOPE GROUPFOR THE YEAR ENDED 31 JULY 2022DIRECTORS’ DECLARATION In the Directors’ opinion: a) the financial statements and notes set out on pages 73 to 140 are in accordance with the Corporations Act 2001, including: (i) (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements giving a true and fair view of the consolidated entity’s financial position as at 31 July 2022 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 31 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, 19 September 2022 141 NEW HOPE GROUP 2022 ANNUAL REPORTTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW INDEPENDENT AUDITOR’S REPORT 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 to the Members of New Hope Corporation Limited Independent Auditor’s Report to the Members of New Hope Corporation Limited Deloitte Touche Tohmatsu ABN 74 490 121 060 Level 23, Riverside Centre 123 Eagle Street Brisbane, QLD, 4000 Australia Deloitte Touche Tohmatsu 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 RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt Phone: +61 7 3308 7000 www.deloitte.com.au Opinion Giving a true and fair view of the Group’s financial position as at 31 July 2022 and of its financial performance for the year then ended; and Independent Auditor’s Report to the Members of New Hope Corporation Limited We have audited the financial report of New Hope Corporation Limited (the “Company”) and its subsidiaries (the “Group”) Independent Auditor’s Report to the Members of New Hope which comprises the consolidated statement of financial position as at 31 July 2022, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows Corporation Limited for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt other explanatory information, and the directors’ declaration. Opinion In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt We have audited the financial report of New Hope Corporation Limited (the “Company”) and its subsidiaries (the “Group”) (i) which comprises the consolidated statement of financial position as at 31 July 2022, the consolidated statement of Opinion comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and We have audited the financial report of New Hope Corporation Limited (the “Company”) and its subsidiaries (the “Group”) (ii) other explanatory information, and the directors’ declaration. which comprises the consolidated statement of financial position as at 31 July 2022, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and Basis for Opinion other explanatory information, and the directors’ declaration. (i) We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are complying with Australian Accounting Standards and the Corporations Regulations 2001. (ii) independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and Giving a true and fair view of the Group’s financial position as at 31 July 2022 and of its financial performance (i) the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for for the year then ended; and Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial Basis for Opinion (ii) report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Giving a true and fair view of the Group’s financial position as at 31 July 2022 and of its financial performance for the year then ended; and complying with Australian Accounting Standards and the Corporations Regulations 2001. complying with Australian Accounting Standards and the Corporations Regulations 2001. 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 directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. Basis for Opinion independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and Key Audit Matters 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 directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. financial report for the current period. These matters were addressed in the context of our audit of the financial report We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. Key Audit Matters We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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. 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 Liability limited by a scheme approved under Professional Standards Legislation. as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. New Hope Group 2022 Annual Financial Report 100 142 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 2022 Annual Financial Report 100 New Hope Group 2022 Annual Financial Report 100 2022 ANNUAL REPORT NEW HOPE GROUPINDEPENDENT AUDITOR’S REPORT to the Members of New Hope Corporation Limited KKeeyy AAuuddiitt MMaatttteerr CCaarrrryyiinngg vvaalluuee ooff pprrooppeerrttyy ppllaanntt aanndd eeqquuiippmmeenntt,, iinnttaannggiibbllee aasssseettss aanndd eexxpplloorraattiioonn aanndd eevvaalluuaattiioonn aasssseettss.. Refer to notes 11, 12, 13 and 14 of the financial statements. At 31 July 2022 the Group’s consolidated statement of financial position included property, plant and equipment (PPE) of $1,756 million and intangible assets of $72 million. The Group also had exploration and evaluation assets (E&E) of $71 million. As disclosed in note 14, the Group performed an impairment indicator assessment across all cash- generating units (“CGUs”) to which PPE and intangible assets belong, including the Queensland Coal Mining CGU which includes New Acland Stage 3 that has been subject to delays in approvals. An impairment assessment was also performed on the Queensland Port operations CGU to which $6m goodwill has been allocated comparing the carrying value of the CGU to its recoverable amount. The assessment for indicators of impairment and estimation of a CGU’s recoverable amount involves judgement and includes consideration of a number of factors including, but not limited to forecast demand and commodity prices, mineral reserves and resources, discount rates and the regulatory environment. The Group concluded that no impairment indicators were present in relation to PPE and intangible assets, and that no impairment was identified in relation to the Queensland Port Operations CGU. With respect to E&E assets, the assessment for impairment indicators includes, but is not limited to, judgements in relation to future commercial viability of exploration tenements, potential for successful development, the risk of expiration of exploration rights without renewal and planned expenditure for further exploration. As disclosed in note 14, the Group identified an impairment loss of $5million in relation to E&E assets. HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr Our audit procedures included, but were not limited to: · Obtaining an understanding of management’s process and policies in relation to performing impairment indicator assessments; · Understanding the key controls management have in place for identifying impairment indicators; · Evaluating management’s identification of CGUs; · Evaluating management’s impairment indicators assessment including: o Challenging the reasonableness of management’s key market related assumptions including forecast demand, commodity prices, discount rates and long-term inflation rates against external data with support from our internal valuation specialists; o Challenging the impact of the regulatory environment on the remaining approvals required in respect of New Acland Stage 3; and o Agreeing resources and reserves for the CGUs to the latest approved resources and reserve statements. · Assessing management’s process for determining the recoverable amount of the CGU to which goodwill has been allocated including challenging the cashflows and cross checking to implied industry multiples. · Evaluating management’s assessment of indicators of impairment for E&E assets including: o Confirming that the Group has a continuing right to explore each area of interest and where such rights may expire in the near future, that the Group intends to renew those rights; o Assessing management’s intention and strategy in relation to continued exploration and evaluation activities for each relevant area of interest; o Assessing whether exploration activities in each area of interest have not led to the discovery of commercially viable quantities of mineral resources and the Group’s intention to continue activities in those areas; and o Reviewing approved budgets in relation to exploration and evaluation activity. · Assessing the appropriateness of the disclosures in notes 11, 12, 13 and 14 to the financial statements. 101 New Hope Group 2022 Annual Financial Report 143 NEW HOPE GROUP 2022 ANNUAL REPORTINDEPENDENT AUDITOR’S REPORT to the Members of New Hope Corporation Limited Other Information The directors are responsible for the other information. The other information comprises the Directors’ Report, Shareholder Information and 2022 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. 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. 144 New Hope Group 2022 Annual Financial Report 102 2022 ANNUAL REPORT NEW HOPE GROUPINDEPENDENT AUDITOR’S REPORT to the Members of New Hope Corporation Limited · · · · · · Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit 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 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 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 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 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. 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 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. 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 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 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. 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 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. 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 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 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. our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of 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 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 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 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. reasonably be expected to outweigh the public interest benefits of such communication. RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt Opinion on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 24 to 39 of the Directors’ Report for the year ended 31 July 2022. We have audited the Remuneration Report included in pages 33 to 50 of the Directors’ Report for the year ended 31 July 2022. In our opinion, the Remuneration Report of New Hope Corporation Limited, for the year ended 31 July 2022, complies with In our opinion, the Remuneration Report of New Hope Corporation Limited, for the year ended 31 July 2022, complies with section 300A of the Corporations Act 2001. section 300A of the Corporations Act 2001. Responsibilities Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance 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 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. on our audit conducted in accordance with Australian Auditing Standards. DELOITTE TOUCHE TOHMATSU DELOITTE TOUCHE TOHMATSU SStteepphheenn TTaarrlliinngg SStteepphheenn TTaarrlliinngg Partner Partner Chartered Accountants Chartered Accountants Brisbane, 19 September 2022 Brisbane, 19 September 2022 103 103 New Hope Group 2022 Annual Financial Report New Hope Group 2022 Annual Financial Report 145 NEW HOPE GROUP 2022 ANNUAL REPORTSHAREHOLDER INFORMATION ORDINARY SHAREHOLDINGS As at 15 September 2022 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 SHARES 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over NUMBER OF SHAREHOLDERS FULLY PAID1 ORDINARY SHARES NUMBER OF PERFORMANCE RIGHTS HOLDERS PERFORMANCE RIGHTS 3,930 2,005,322 5,095 14,504,651 2,519 19,181,719 2,753 75,144,289 209 721,521,101 14,506 832,357,082 – – – – 4 4 – – – – 940,506 940,506 Holding less than a marketable parcel1 418 11,284 1 Information as at 31st August 2022. 146 2022 ANNUAL REPORT NEW HOPE GROUP    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 15 September 2022 Washington H Soul Pattinson and Company Limited J P Morgan Nominees Australia Pty Limited Citicorp Nominees Pty Limited HSBC Custody Nominees (Australia) Limited National Nominees Limited BNP Paribas Noms Pty Ltd BKI Investment Company Limited Farjoy Pty Ltd BNP Paribas Nominees Pty Ltd Bond Street Custodians Limited BNP Paribas Nominees Pty Ltd Neweconomy com au Nominees PTY Limited <900 ACCOUNT> HSBC Custody Nominees (Australia) Limited – GSCO ECA HSBC Custody Nominees (Australia) Limited – A/C2 Bond Street Custodians Limited Quotidian No2 Pty Ltd National Nominees Limited JS Millner Holdings Pty Limited Citicorp Nominees Pty Limited National Nominees Limited UNQUOTED EQUITY SECURITIES 313,096,418 93,737,917 59,304,032 57,996,530 37,593,665 27,722,130 12,950,952 8,700,000 7,164,730 6,533,450 5,965,372 5,354,229 3,871,834 3,847,289 3,660,933 2,939,800 2,800,220 2,629,197 2,609,279 2,105,205 37.59% 11.25% 7.12% 6.96% 4.51% 3.33% 1.55% 1.04% 0.86% 0.78% 0.72% 0.64% 0.46% 0.46% 0.44% 0.35% 0.34% 0.32% 0.31% 0.25% 660,583,182 79.31% NUMBER ON ISSUE NUMBER OF HOLDERS Rights issued under the New Hope Corporation Limited Employee Performance Rights Share Plan to take up ordinary shares 940,506 Convertible Notes1 – 4 – 1 No Convertible Notes were converted to Ordinary Shares during the 2022 financial year. Convertible Notes do not carry a right to vote. 147 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT2022 RESOURCES AND RESERVES New Hope Group are pleased to announce the 2022 update of Coal Resources and Reserves, in accordance with the JORC Code 2012. Key updates from the previous reporting period are: • The Bengalla Resource and Reserves estimate utilises updated geological model data, along with the current extents of mining. • The New Acland Resource and Reserves volumes (tonnes) are relatively unchanged from 2021, as there has been limited mining undertaken in the area over the period. • A new geological model for the Elimatta project has been utilised. • Burton and Lenton deposits were sold in 2022 and previously reported resources have been removed. • The tenements associated with the Yamala project have been relinquished and previously reported resources removed, after a detailed review and decision by the joint venture parties. Coal Resources and Reserves are stated as at 31st May 2022. COAL RESOURCES DEPOSIT STATUS COAL RESOURCES AS AT 31ST MAY 2022 (MILLION TONNES) (COAL RESOURCES ARE INCLUSIVE OF THE RESERVES REPORTED BELOW) New Acland Bengalla1 Elimatta Collingwood Taroom Woori Burton2 Lenton2 Yamala3 Total Notes on Resources: Mine Mine Exploration Exploration Exploration Exploration Mine Exploration Exploration INFERRED INDICATED MEASURED 2022 TOTAL 2021 TOTAL 16 24 43 94 122 42 – – – 193 176 86 139 338 67 – – – 285 161 110 43 – – – – – 494 361 239 276 460 109 – – – 494 381 286 276 460 109 32 380 237 341 999 599 1,939 2,655 1 Figures shown are 100 per cent of total Resources. New Hope Group share is 80 per cent. The Resource number includes 76 Mt of Underground Resource. 2 Burton and Lenton sold in 2022. New Hope Group share was 90 per cent. 3 Yamala exploration project fully surrendered in March 2022 as agreed by all Joint Venture parties. New Hope Group Share was 70 per cent. 148 2022 ANNUAL REPORT NEW HOPE GROUP2022 RESOURCES AND RESERVES JORC DECLARATION – COAL RESOURCES The estimates of Coal Resources reported herein, have been prepared in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves – The JORC Code (2012). These resources are inclusive of the Reserves Statement and are as at 31/05/2022 unless otherwise stated. The updated resources for Bengalla and Elimatta are based on information compiled by New Hope Group geologists. New Acland, Collingwood, Taroom and Woori have been re-quoted from the 2021 New Hope Group annual report. The resource estimates are based on information reviewed by Ms Carrie Schuler, who is the Competent Person for coal resources and a full-time employee of the company. Ms Schuler has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity that is being undertaken, to qualify as Competent Person as defined in the 2012 Edition of the ‘Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves’. Ms Schuler consents to the inclusion in the report of the matters based on her information in the form and context in which it appears. COAL RESERVES STATUS Mine Exploration Exploration Mine Exploration DEPOSIT New Acland1 Lenton2 Elimatta Bengalla3 Taroom Total Notes on Reserves: COAL RESERVES AS AT 31ST MAY 2022 (MILLION TONNES) RECOVERABLE RESERVES MARKETABLE RESERVES4 PROBABLE PROVED 2022 TOTAL 2021 TOTAL PROBABLE PROVED 121 – 26 45 207 399 245 – 86 138 469 366 – 112 183 207 868 366 35 119 196 207 923 66 – 16 34 130 246 134 – 56 111 301 1 260Mt of Recoverable Reserves require additional approvals beyond Acland Stage 3. 2 Lenton was sold in 2022. New Hope Group share was 90%. 3 Figures shown are 100% of total Reserves. New Hope Group share is 80%. 4 Marketable Reserves are based on modelled wash plant yields, and for operating mines have been correlated to reconciled data. 5 Changes for Elimatta relative to 2021 relate to a geological model revision including re-correlation of the seams. JORC DECLARATION – COAL RESERVES The information in this Coal Reserves Statement is based on information compiled by Mr Brett Domrow, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Brett Domrow is a full-time employee of the company and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Brett Domrow consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 149 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORT2022 RESOURCES AND RESERVES OIL RESERVES AND RESOURCES Mr Barry Smith holding the position of Chief Technical Officer within Bridgeport, has a Bachelor of Science (Hons) and is a member of the American Association or Petroleum Geologists (Emeritus), the Petroleum Exploration Society of Australia (Fellow) and the Society of Exploration Geophysicists. He has 40 years industry experience and is qualified in accordance with ASX listing rule 5.41 and has consented to the inclusion of the reserves and resources information in this report in the form and context in which it appears. Mr Chris Way holding the joint position of Chief Executive Officer and Chief Operating Officer of Bridgeport Energy, has a Bachelor of Science (Hons) and a Bachelor of Engineering (Mech), is a CPEng and a 30-year member of the Society of Petroleum Engineers, is qualified in accordance with ASX listing rule 5.41 and has consented to the inclusion of the reserves and resources information in this report in the form and context in which it appears. NET RESERVES (AS AT 31 JULY 2022) Oil Equivalent (Mboe) NET CONTINGENT RESOURCES (AS AT 31 JULY 2022) Oil Equivalent (Mboe) Notes on Reserves: 2022 2021 1P 2,379 1C 6,139 2P 6,216 3P 11,209 2C 3C 10,951 21,601 1P 2,357 1C 5,323 2P 5,882 2C 9,311 3P 11,525 3C 18,408 1 Mboe = thousand barrels of oil equivalent. A conversion from gas volume to oil equivalent (at 171,940 boe per PJ) was based on a standard industry metric. 2 Petroleum reserves have been prepared using principally deterministic methods, supported by field reservoir modelling where available. 3 Contingent resources (2C) have been estimated using a combination of deterministic assessments and probabilistic volumetric assessments. 4 BEL aggregates reserves (1P, 2P and 3P) and contingent resources (2C) using arithmetic summation. 5 The economic assumptions used to evaluate each project are commercially sensitive. Reserves have been assessed as economic using discounted cash flow methods in compliance with PRMS guideline. Costs have been estimated using actual costs and reasonable estimates of forecast future costs. Oil prices have been forecast using reasonable estimates of future prices. 6 Production is for the 14 month period 1 June 2021 to 31 July 2022, which aligns with the Company financial year end. 7 The reference points are at each field where crude oil is sold into a road tanker with IOR Petroleum, except for Cuisinier and Naccowlah where the reference point is at the Moomba plant inlet and Vali, which is the Moomba sales outlet. 8 Reserves reported include fuel consumed in operations at each field; totalling 220 1P, 570 2P and 977 3P Mboe. 9 In accordance with the SPE-PRMS guidelines, only committed infill wells or similar projects are captured as 2P reserves. 10 As per SPE-PRMS guidelines 2C resources include; uncommitted infill drilling opportunities, discoveries that are contingent on development and enhanced recovery projects such as waterflood or CO2 miscible sweep. 11 Due to rounding, volumes may not reconcile to totals. 150 2022 ANNUAL REPORT NEW HOPE GROUP151 TAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEW NEW HOPE GROUP 2022 ANNUAL REPORTCORPORATE DIRECTORY DIRECTORS Robert D. Millner Chairman Todd J. Barlow Non Executive Director Jacqueline E. McGill AO Non Executive Director Thomas C. Millner Non Executive Director Ian M. Williams Non Executive Director Steven R. Boulton Non Executive Director COMPANY OFFICERS Robert J. Bishop Chief Executive Officer Rebecca S. Rinaldi Chief Financial Officer Dominic H. O’Brien Executive General Manager & Company Secretary AUDITORS Deloitte Touche Tohmatsu Level 23, Riverside Centre 123 Eagle Street Brisbane QLD 4000 PRINCIPAL ADMINISTRATION & REGISTERED OFFICE Level 16, 175 Eagle Street Brisbane QLD 4000 Telephone : (07) 3418 0500 Facsimile : (07) 3418 0355 WEBSITE ADDRESS www.newhopegroup.com.au SHARE REGISTER Computershare Investor Services Pty Limited Level 1, 200 Mary Street Brisbane QLD 4000 Telephone : 1300 552 270 Website : www.computershare.com ASX CODE: NHC 152 2022 ANNUAL REPORT NEW HOPE GROUPTAX CONTRIBUTION REPORTDIRECTORS’ REPORTSUSTAINABILITY REPORTFINANCIAL REPORTOTHER INFORMATIONOPERATIONS REVIEWecoStar is an environmentally responsible paper made Carbon Neutral. The greenhouse gas emissions of the manufacturing process including transportation of the finished product to BJ Ball Papers Warehouses has been measured by the Edinburgh Centre for Carbon Neutral Company and the fibre source has been independently certified according to the Forest Stewardship Council® Standards (FSC®). ecoStar is manufactured from 100% Post Consumer Recycled paper in a Process Chlorine Free environment under the ISO 14001 environmental management system. 

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