National HealthCare Corporation
Annual Report 2023

Plain-text annual report

Coal. Energy. Agriculture. Responsibly. Reliably. Annual Report 2023 New Hope Group is an Australian coal producer with associated port, oil and gas, and agricultural operations. 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. Contents Highlights 03 Chairman and CEO’s Review 10 Our Operations 04 Operating and Financial Review 14 Our Value Chain and Market Dynamics 06 Sustainability Report 24 Tax Contribution Report Directors’ Report Auditor’s Independence Declaration Financial Report 50 52 81 83 Directors’ Declaration 147 Independent Auditor’s Report 148 Shareholder Information Resources and Reserves Corporate Directory 152 154 157 Purpose & Vision Coal. Energy. Agriculture. Responsibly. Reliably. 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. Values 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. Strategy Our strategy is to safely, responsibly and efficiently operate our low-cost, long-life assets throughout the energy transition, with a focus on disciplined capital management, providing valuable returns to our shareholders. 01 New Hope GroupAnnual Report 2023We operate responsibly as stewards of the environment, our land, assets, and shareholder funds while navigating and contributing to the global energy transition. 02 New Hope GroupAnnual Report 2023Highlights NPAT $1,087m 11% Increase Underlying EBITDA1 (Before Non-regular Items) $1,747m 11% Increase Government Contributions Paid $814.2m 232% Increase Total Tonnes Sold Safety – TRIFR Realised Price ($AUD) 7.6Mt 14% Decrease 2.12 $346.73/t 19% Improvement 23% Increase Full Year Dividend Total Shareholder Returns2 Cashflow from Operations 70¢ Per Share $2.29 22% Decrease $1,525m 34% Increase Total Employees Female Participation Net Cash 908 32% Increase 17% Up from 15% in 2022 $731m 39% Increase 1. Underlying Earnings before Interest, Tax and Depreciation and Amortisation (EBITDA) and Profit before Tax and Non-Regular Items are non-IFRS measures. This non-IFRS information has not been audited by Deloitte. 2. Net shareholder Returns based on gross dividends reinvested per share. 03 New Hope GroupAnnual Report 2023Our Operations Key Locations Operating Coal Mines Bengalla (80% joint venture, open-cut) New Acland (100%, open-cut) Maxwell (15% interest, underground) Coal Mine Rehabilitation  Jeebropilly NT Bee Creek SA QLD Cooper Basin NSW VIC Otway Basin New Acland Surat Basin Brisbane and QBH Jeebropilly Maxwell Newcastle Bengalla Sydney ACT TAS Coal Exploration Bee Creek Tenements near Bengalla and New Acland 04 New Hope GroupAnnual Report 2023Agricultural Operations Bengalla New Acland Port Facility  Queensland Bulk Handling Oil and Gas Production and Exploration Surat Basin Cooper Basin Otway Basin Offices New Hope Group head office (Brisbane) New Hope Japan office (Tokyo) Bridgeport head office (Sydney) International and Domestic Coal Customers – FY23 China Taiwan Japan NSW Brisbane Newcastle Chile Export Facility Customer Destination 05 New Hope GroupAnnual Report 2023Our Value Chain Our Inputs Our Approach e i n g Respon sib le u i s i t i o n q c ploration, Develop m e n t & A develop low-cost, long-life assets, We identify and x E with a portfolio focused on thermal coal for electricity generation. afety & W ell b S We prioritise providing a safe and healthy work environment and seek to prevent harm, promote safety and enhance wellbeing. We operate responsibly and progressively restore mined land to a safe and productive post-mining land use. R e h a b ilit a tio n Safe, P ro d u c ti v e O p e r a t i o n s O p e r a t i o n ark eting & Logistics s, M a l e S People & Organisation We have a capable, energised and productive team, and a streamlined structure. We focus on providing a workplace where everyone is treated fairly and with respect. Financial Resources We use our financial resources and manage financial and business risk with discipline, seek to reduce cost, and focus on delivering sustainable financial returns. Systems, Processes & Technology We utilise appropriate systems and processes to support effective and efficient business activities, continued growth and good corporate governance. Procurement & Business Support Functions We engage with partners aligned with our business objectives and values, and provide required support across the business to enable efficient, effective and compliant operations. 06 New Hope GroupAnnual Report 2023 We aim to deliver Customers and Markets ploration, Develop m e n t & A x E u i s i t i o n q c e i n g afety & W ell b S Safe, P ro d u c ti v e O p e r a t i o n s operational targets safely, on time and within budget, while meeting customer needs. r a t i o n We have long-standing relationships with clients and customers. We work with rail and port partners, Respon sib le O p e We seek to operate responsibly and ensure the ongoing acceptance of our business and activities by the Government, community, investors and other stakeholders. R e h a b ilit a tio n abroad. s, M a l e S to reliably supply coal to customers in Australia and ark eting & Logistics Value Created in FY23 People • YOY safety improvement: TRIFR improved by ~19%, AIFR improved by ~9% YOY • 908 employees, 218 new jobs created • $166.8 million in wages • Re-hiring of staff at NAC • Reliable supplier of high energy coal • 7.6Mt of coal sold to export and domestic markets Communities • 90% of workforce are locally employed • $773,000 in community sponsorships & donations • $207.5 million spent with 761 local suppliers – local suppliers account for 22% of procurement spend Investors • Record underlying EBITDA1 of $1,747 million • $2.29 Total Shareholder Returns2 • $839.1 million paid in dividends Governments • $814.2 million paid to local, state and federal governments 1. Underlying Earnings before Interest, Tax and Depreciation and Amortisation (EBITDA) and Profit before Tax and Non-Regular Items are non-IFRS measures. This non-IFRS information has not been audited by Deloitte. 2. Net shareholder Returns based on gross dividends reinvested per share. 07 New Hope GroupAnnual Report 2023 Demand for Australia’s low emission, high-quality coal outstripping supply Despite falling demand, we see a supply gap emerging as mine closures and chronic underinvestment in new thermal coal projects constrain supply. ) t M ( s e n n o t n o i l l i M 1,400 1,200 1,000 800 600 400 200 0 2022 2025 2030 2035 2040 2045 2050 ROW Other Asia JKT India China Operating Probable Global Demand vs Supply – Base Case (By Operating Status) Source: Commodity Insights 2023 dataset. 08 New Hope GroupAnnual Report 2023 Organic growth pipeline to drive significant production increases 15.0 12.5 10.0 7.5 5.0 2.5 0 ) a p t M ( n o i t c u d o r p l l a o c e b a e a S l 2023 2024 2025 2026 2027 2028 2029 2030 Long Term Bengalla1 New Acland Malabar2 1. 80% share of Bengalla Mine saleable production. 2. Indirect production attributed to New Hope’s 15% equity interest in Malabar Resources Limited. On average, Australian thermal coal has a higher rank and higher delivered energy enabling less coal to be burnt per kilowatt-hour. We expect our customers to increase use of high quality, lower emission Australian coal to meet their emission targets. Chronic underinvestment in thermal coal projects presents significant earning potential for those with organic growth opportunities. 09 New Hope GroupAnnual Report 2023 Chairman and CEO’s Review Our low unit-cost, high-quality assets are well placed to support the global energy transition, with our key customers relying on our coal to assist them in meeting their emission targets and development goals. Robert D. Millner Chairman Robert J. Bishop Chief Executive Officer Dear Shareholders, We are pleased to provide New Hope’s Annual Report and Sustainability Report for the 2023 financial year. 2023 was a significant year for New Hope, and we are pleased to report that we achieved record earnings underpinned by disciplined operational management and a capable, skilled and resilient workforce despite facing inclement weather and inflationary impacts on our underlying costs. During the year, shifting market dynamics in the thermal coal market, which created significant price volatility, were a major contributor to our record financial results, with the global energy crisis highlighting the need for high-quality, low-emission thermal coal predominately produced from Australia. We believe price volatility will continue to be part of the thermal coal market and that over the long term, as the world transitions to a decarbonised economy, the thermal coal price will remain above historical averages. Our low unit-cost, high-quality assets are well placed to support the global energy transition, with our key customers relying on our coal to assist them in meeting their emission targets and development goals. Safety Performance The safety of our people is our highest priority and the safety performance across our operations continued to improve, demonstrated by a 9 per cent reduction in the All-Injury Frequency Rate (AIFR) to 27.10, from 29.72 in the prior period. Our secondary safety performance indicator (Total Recordable Injury Frequency Rate) also decreased, reducing by 19 per cent during the period from 2.61 to 2.12. These sustained improvements in safety outcomes demonstrate the progress we are making in identifying and managing the risk of injuries through training, prevention activities and improved risk management practices. Supporting our desire to continually improve our safety performance is the enhancement of our safety culture and systems during the year through the reinvigoration of the Wellbeing Group. The Wellbeing Group comprises management and safety personnel from all business units who meet regularly to share learnings, present ideas and report on actions that aim to improve safety culture and wellbeing. Operational Performance Our operational performance remained strong while navigating periods of disruptive weather, which impacted the Bengalla Mine and associated logistics chain. Coal production and sales volumes at our flagship operation, the Bengalla Mine, dipped slightly in the first half of the year, but recovered a portion of lost volumes in the second half of the year as mining conditions improved. Our New Acland Mine transitioned out of care and maintenance after securing all necessary approvals from the Queensland Government to commence overburden removal for Stage 3 in the fourth quarter of the year. This represented a significant milestone, after working with various government departments for over 15 years to secure the required approvals. The New Acland Mine now has 107 locally based employees and has recently begun mining and washing of coal, with first shipments due in the coming months. The New Acland Mine will ramp up to a production of 5Mtpa over the next three years, enabling our port facility, Queensland Bulk Handling, to be fully utilised. Realised coal sales of 7.6Mt were made for the year, a reduction of 14 per cent due to significant wet weather events. Robust market demand for high-quality, low- emission thermal coal and a global energy shortfall contributed to a realised price of A$346.73/t and revenue of A$2.7 billion – both record achievements for New Hope. With the ramp-up of operations at the New Acland Mine, and the progression of the 13.4Mpta Bengalla Mine Growth Project, we are well positioned to organically increase production at our operations, with minimal investment risk and high returns. 10 New Hope GroupAnnual Report 2023The unprecedented events during the year saw New Hope deliver record financial results, with Net Profit Before Tax (NPBT) of $1,545.0 million, a 10 per cent increase on the previous year. Underlying EBITDA (Before Non-regular Items) $1,747m 11% Increase Full Year Dividend 70¢ Per Share Coupled with our 15 per cent equity investment in Malabar, which provides exposure to the metallurgical coal market and aligns to our long-term strategy of investing in low unit cost assets which are long approved and cash flow positive or near to, we are on track for another successful year. Financial Performance The unprecedented events during the year saw New Hope deliver record financial results, with Net Profit Before Tax (NPBT) of $1,545.0 million, a 10 per cent increase on the previous year. Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1,746.6 million was an 11 per cent increase from the previous year. We closed the year with $731 million of cash on the balance sheet and no debt following the successful repurchase of the Convertible Notes. Throughout the year, dividends and share buy-backs were used as the predominant capital management activity to generate short-term and long-term shareholder return. During the year we returned a total of $1,399 million of capital to shareholders through dividend payments and buy- backs. The full year dividend declared to shareholders was 70.0 cents per share. This was after our Board declared a Final Dividend of 21.0 cents per share and a Special Dividend of 9.0 cents per share, both fully franked. The payout ratio based on the full year dividends paid/payable represents 55 per cent of Net Profit After Tax (NPAT). With strong cash flows forecast, we believe our shareholders will continue to be rewarded into the future. During the year, we focussed our attention on capital management activities, which included the repurchase and subsequent cancellation of all unconverted Existing Convertible Notes for an aggregate pre- tax cost of $367.3 million. The Convertible Note buy-back removed future share dilution at an equivalent after-tax cost of approximately $4.31 per share. We also commenced an on-market share buy-back of ordinary shares during the year, with 37.1 million ordinary shares bought back for a total consideration of $192.4 million and an average price of $5.19 per share. 11 New Hope GroupAnnual Report 2023We see that our role is to safely, responsibly and efficiently operate our low unit cost, long-life assets, while demand for coal used to generate energy continues. Chairman and CEO’s Review continued Sustainability We strive to operate responsibly and to transparently disclose our sustainability performance during the year. In our Sustainability Report published in this Annual Report alongside our financial reporting, we report on our operational environmental, social and governance (ESG) impacts and metrics that underpin our social licence to operate. This year we have used the coal sector specific GRI Standard – GRI-12 to guide our approach to sustainability reporting, with particular focus on the issues of interest to our stakeholders and/or where we have a significant economic, environmental or social impact. We acknowledge climate change is a critical global issue which requires a global effort to transition to a net zero carbon economy while maintaining reliable and secure sources of energy as the role and extent of coal, oil, and gas change over time. We see that our role is to safely, responsibly and efficiently operate our low unit cost, long-life assets, while demand for coal used to generate energy continues. Importantly, we believe companies that responsibly manage operational impacts on the environment, people and communities are the most appropriate operators to produce the coal that will be required through the energy transition. Emissions, climate and global energy transition is a material topic addressed in our Sustainability Report, together with other important information and analysis about our performance and actions concerning the environment, communities, our people and responsible business conduct. Conclusion Looking forward, we remain focussed on growth through existing organic growth opportunities, and acquisition where it aligns to our longer term strategy. Our existing organic growth pipeline is set to see production increase signficantly over the next five years. This will be achieved through a modest capital outlay coupled with minimal execution risk. With strong existing assets in Bengalla, New Acland and Malabar’s Maxwell Mine, shareholders should have confidence in our strong growth outlook. Our achievements this year could only have been possible due to the dedication and support of our employees, our Management team and our Board. We thank them for their contribution and look forward to another safe and successful year. We would also like to thank you, our shareholders, for your continued support of New Hope. Robert Millner AO Chairman Robert Bishop Chief Executive Officer 12 New Hope GroupAnnual Report 202313 New Hope GroupAnnual Report 2023Operating and Financial Review The Company reported a record Net Profit Before Tax (NPBT) and  before Non-Regular Items of $1,629.3 million for the financial year ended 31 July 2023 (2022: $1,421.6 million). This represents a 15 per cent increase from the prior period. • Record gross revenue from coal sales of $2,648.8 million for the 2023 financial year, increasing from $2,488.9 in the prior period. This represented a 6 per cent increase from 2022 levels, due to record high prices in the first half of the year. Gross revenue was impacted by lower sales volumes as a result of adverse weather impacts to operations and the logistics corridor. • Underlying Free on Board (FOB) costs of A$85.97/t (2022: A$93.55/t), including trade coal purchases of $15.66/t and excluding royalties were 8 per cent lower than 2022. Inflationary cost pressures and production impacts from inclement weather resulted in an increase in Underlying Free on Rail (FOR) cash costs of $56.75/t (2022: $47.04/t). Primary drivers contributing to the NPBT and before Non-Regular Items result include: • Average realised prices increased by 23 per cent to A$346.73/t in 2023 from A$281.84/t in 2022. Strong global demand for thermal coal further increased pricing in the first half of the year, compared to the historic high levels reached in July 2022. Pricing reduced considerably during the second half of the year driven by milder winter conditions in the northern hemisphere and a sustained overhang of coal inventory with customers. The closing gC NEWC price at 31 July 2023 was US$134.71/t. 14 New Hope GroupAnnual Report 2023The variance between Underlying EBITDA1 and Cash flow from Operations is primarily driven by the movement in Income Taxes Paid and the settlement of Provisional Pricing as outlined below: Non-Cash Employee Benefit Expense — Share-Based Payments 5 Underlying EBITDA1 Net Interest (Paid)/Received Net Income Taxes Paid Settlement of Non-Regular Items1,2 Net Foreign Exchange Settlement of Provisional Pricing Net Working Capital Cash Flow from Operations Share Buy-Back Convertible Debt Buy-Back Dividends Paid Repayment of Borrowings Cash Flow from Financing Activities Cash Flow Summary Operating Cash Flows Investing Cash Flows Financing Cash Flows Effects of Exchange Rate changes Cash and Cash Equivalents at the end of the Financial Year Capital Management Cash and Cash Equivalents Term Deposits Liquidity Available Note 2023 $000 2022 $000 1,746,580 1,577,357 18,540 (539,431) (38,385) 2,675 3,216 363,102 (16,975) (31,326) (10,690) (3,071) 850 8,549 (31,508) (386,057) 1,524,789 1,138,637 23(d) (192,447) (367,325) – – 22 (839,120) (307,972) (9,988) (320,161) (1,408,880) (628,133) 1,524,789 1,138,637 (98,294) (222,524) (1,408,880) (628,133) (2,675) 3,071 730,654 715,714 16 17 730,654 – 730,654 715,714 100,000 815,714 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. The Company holds a strong cash position with a closing Cash and Cash Equivalents balance of $730.7 million (2022: $715.7 million) providing a robust foundation for the pursuit of future strategic growth and further capital management opportunities. Operating Cash Flows The Company generated an operating cash surplus of $1,524.8 million, an increase of 34 per cent on the prior period (2022: $1,138.6 million). During the first half of 2023, cash generation was supported by strong coal prices driven by limited supply in the market and increased demand given the global concerns about energy security. Cash outflows also reduced due to lower purchased coal volumes, partly offset by higher royalty payments to the New South Wales (NSW) Government in line with higher sales prices being received. Income taxes paid totalled $539.4 million for the 2023 financial year, increasing from $31.3 million paid in the prior period. Income taxes paid included the 2022 financial year tax payment of $389.0 million. Investing Cash Flows Investing cash outflows were $98.3 million, representing a decrease of 56 per cent on the prior period (2022: $222.5 million). Payments for Property, Plant and Equipment increased by 168 per cent on the prior period to $175.3 million, due to mobile plant and infrastructure expenditure to support the Bengalla Mine 13.4Mtpa Growth Project. The $100.0 million Term Deposit held in the prior period was not renewed with the bulk of these funds reinvested into higher yielding short term investment products. 15 New Hope GroupAnnual Report 2023Operating and Financial Review continued Financing Cash Flows Cash outflows from Financing Activities were $1,408.9 million, an increase of 124 per cent on the prior period (2022: $628.1 million) as the Company focussed attention on capital management activities. Capital returns to shareholders in the form of fully franked dividends totalled $839.1 million paid during the period, an increase of 172 per cent compared to 31 July 2022. During the period the Company repurchased $107.3 million of the principal amount of the Convertible Notes for a total of $367.3 million, reducing future share dilution and contributing to a  71 per cent reduction in debt. The Company commenced an on-market share buy-back of Ordinary Shares during the period, with 37.1 million Ordinary Shares bought back for a total consideration of $192.4 million at an average price of $5.19 per share. Capital returns to shareholders in the form of fully franked dividends totalled $839.1 million paid during the period, an increase of 172 per cent compared to 31 July 2022. Directors have declared a Final Dividend of 21.0 cents per share (31 July 2022: 31.0 cents) and a Special Dividend of 9.0 cents per share. These Dividends are fully franked and payable on 7 November 2023 to shareholders registered as at Tuesday, 24 October 2023. Review of Operations Health and Safety The Company prioritises the safety and wellbeing of our people, operating environment and communities. The Company monitors the All-Injury Frequency Rate (AIFR) as a primary measure of operational safety outcomes. 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 holistic indicator of safety and risk. The 12-month moving average AIFR to 31 July 2023 was 27.10, a decrease of 9 per cent compared to the 31 July 2022 average of 29.72. The Company continues to monitor Total Recordable Injury Frequency Rate (TRIFR) as a supplementary performance indicator. The Company’s 12 month moving average TRIFR was 2.12 as at 31 July 2023, a decrease of 19 per cent to the prior period (2022: 2.61). The Company places particular focus on continual improvement of safety culture and systems. Opportunities for collaboration and learning from across the Group and industry were enhanced during the year through the reinvigoration of the Wellbeing Group. The Wellbeing Group comprises management and safety personnel from all business units who meet regularly to share lessons learned, present ideas and report on activities that aim to improve safety culture and wellbeing. The Company continues to facilitate regular Lessons Learned Forums across the Group to examine incident analysis, investigation outcomes, and change improvement opportunities. During the year, the Company implemented new digital purpose-built applications to record and manage safety data and actions. This has consolidated our QLD and NSW site incident reporting, action management, change management and inspection regimes into one system, accessible from a range of devices to enable faster capture and analysis of safety data. The Company also comprehensively reviewed the Enterprise Risk Management Framework in consultation with all business units. As a result, the annual work plan of risk management activities and the content and analysis in monthly reports and quarterly status reports have been further enhanced. In addition, a series of risk appetite statements specific to work and strategic priority areas were also developed, allowing the Company’s risk appetite to now be applied across various work streams. Environment The Company carefully manages its environmental impacts in compliance with the stringent regulations in our operating jurisdictions. Recognising the most visible impact is land disturbance, the Company undertakes progressive rehabilitation to return land to a safe and productive post-mining use. During the year, the Company recontoured 21 hectares, topsoiled 24 hectares and seeded 4 hectares of land at New Acland. The total material backfilled was 3.9Mbcm. To date the Queensland Government has certified 349 hectares of progressively rehabilitated land at New Acland. Progressive rehabilitation continues at Bengalla Mine, with 308 hectares of land under active rehabilitation as at July 2023. The Rehabilitation Management Plan was submitted for approval to the NSW Government in August 2022. The Annual Rehabilitation Report and Forward Work Program were submitted for approval to the NSW Government in March 2023. The 2023 Bengalla Annual Review details the Mine’s environmental performance. The Review was completed and submitted to the NSW Government in April 2023, and is available on the New Hope Group website. The Sustainability Report has further information about the Company’s responsible approach to environmental management and performance for the period. 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 Mine operations 16 New Hope GroupAnnual Report 2023after receiving all Queensland Government approvals since October 2022. New Acland Mine generated 0.03Mt in sales from opening port stocks (2022: 0.7Mt). Sales from Bengalla Mine were impacted by the weather events in 2022 and the first half of 2023 causing operational delays and downstream disruption to the logistics chain. NSW Coal Reservation Scheme On 22 December 2022, the NSW Government introduced a Domestic Coal Reservation Scheme and price cap of A$125/t. On 23 December 2022, Bengalla² was directed to reserve the lower of 280kt or 15 per cent of coal production per quarter until 30 June 2024 for domestic consumption. Bengalla continues to meet its domestic market obligations and has contracted its obligations out to June 2024. Marketing and Logistics The Company achieved a record average sales price of A$346.73/t, a 23 per cent increase on the prior period (2022: A$281.84/t). Robust market demand and a supply imbalance following disruptive weather conditions, contributed to record seaborne thermal coal prices in the first half of the year. A steady decline in pricing since February 2023 has been the result of cyclical drivers including milder winter conditions in the northern hemisphere and customers holding above average coal inventories. The market price did start to stabilise late in the period as high energy coal found gains in July and the gC NEWC closed at US$134.71/t. Import restrictions on Australian coal into China were lifted during the year, resulting in the spread between 6000 and 5500 kcal/kg Net Calorific Value (NAR) products narrowing. 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 differentials in product qualities. First sales into China were completed in quarter four providing an outlet for coal over the low season. The Japanese Reference Price (JRP) was settled at US$199.9/t from 1 April 2023 which is in line with the average closing gC NEWC benchmark pricing for the respective period. The Company achieved coal sales of 7.6Mt1 compared to 8.8Mt to the prior period. The primary contributor to this decrease relates to New Acland Mine, which has been transitioning from care and maintenance to Stage 3 operations 2. Requirements under the New South Wales Coal Reservation scheme are referenced on a 100 per cent basis. 17 New Hope GroupAnnual Report 2023Operating and Financial Review continued Group Coal Mining Operational Metrics1 Prime overburden Run-of-Mine (ROM) coal produced ROM strip ratio – prime Bypass Coal handling preparation plant (CHPP) feed Saleable coal produced Washed product yield Coal sales Average sale price achieved Unit costs of sales Bengalla mine site cash costs Free on Rail (FOR) cash cost FOR to FOB cost (ex. State royalties and trade coal) Underlying FOB cash costs (ex. State royalties and trade coal) Trade Coal Purchases State royalties Underlying FOB cash cost Margin Metric kbcm kt bcm/t kt kt kt % kt 2023 45,538 9,335 4.9 1,377 7,754 7,217 75% 7,638 2022 40,068 9,978 4.0 1,155 9,215 7,889 73% 8,832 A$/t 346.73 281.84 A$/prod t A$/sale t A$/sale t A$/sale t A$/sale t A$/sale t A$/sale t 60.06 56.75 13.56 70.31 15.66 27.32 61.91 47.04 19.61 66.65 26.90 21.15 113.29 114.70 A$/sale t 233.44 167.14 1. Cost curve represents FOB natural market, where the natural market is defined as the major consumer for each producing region. Bengalla Mine Bengalla (100 per cent basis) delivered 11.8Mt Run-of-Mine (ROM) production in line with 11.7Mt ROM produced in the prior period. Optimal mining conditions in the latter part of the year, early mobilisation of growth fleet and high reliability from the dragline have helped to mitigate the production impacts of unprecedented wet weather events in the first half of the year and skilled labour shortages. Strong performance from the dragline has been fundamental to reducing the waste deficit throughout the year, evident from higher utilisation and productivity performance. During the period a third haulage corridor, expected to improve mine haulage productivity by 7.5 per cent by reduced de-elevation and re-elevation of waste material was constructed. Work to optimise dispatch systems, secure the dragline path to release dump inventory and actively manage available dump areas is being undertaken. Truck servicing strategies have been adjusted and reliability-centred asset management systems have been introduced to proactively monitor equipment conditions. These strategic initiatives combined with the use of digital mining will contribute to bringing the pit back into sequence and drive the implementation of industry best practice activities across the operation. The Coal Handling Preparation Plant (CHPP) was fed 9.7Mt and 1.7Mt were bypassed producing 9.0Mt of saleable coal, down from 9.3Mt in the prior period. Constrained coal availability in the first half of the year due to inclement weather on site and flooding impacts on the logistics chain were the main contributors to lower saleable production compared to the 2022 financial year. The CHPP spiral middlings project tie-in was completed during the period with results providing quality uplifts on Bengalla’s low ash products by diverting high-ash spirals middlings to the secondary product circuit. Water discharge credits secured in the previous financial year proved to be a valuable flood mitigation strategy against the unseasonable weather experienced in 2022 and 2023. Through controlled releases in line with Government approvals Bengalla discharged a further 528ML from its discharge dam in the first half of the year. This controlled release of water ensures there is sufficient water storage capacity to minimise further impacts of inclement weather. Bengalla continues to be recognised as a large-scale, cost competitive mine, with the FOB cost per tonne within the lowest quartile of the cost curve2 compared with other seaborne thermal coal producers worldwide. An increase in production volumes in the second half of the year has driven a reduction in underlying site cash costs (excluding logistics and royalties) by 8 per cent to A$60.1/t from A$65.4/t at 31 January 2023. Fuel prices eased during the second half of the year, however inflationary pressures have generally remained across contract labour, plant and equipment components. Notwithstanding these pressures, Bengalla has maintained a strong focus on optimising productivity and limiting controllable costs. Certainty of coal supply to customers with minimal impacts to operations has been critical in a volatile pricing market. 18 New Hope GroupAnnual Report 2023Total Cash Costs – Adjusted by Realised Price Against Benchmark (Including Royalties, US$/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 7 275.00 250.00 225.00 200.00 175.00 150.00 125.00 100.00 75.00 50.00 25.00 0.00 Bengalla 0 100 200 300 400 500 600 700 800 900 1,000 Source: Wood Mackenzie Q2 2023 dataset. New Hope estimates for own assets. TCC refers to total cash cost and figures are energy adjusted. Cost curve represents FOB natural market, where the natural market is defined as the major consumer for each producing region. Cumulative Tonnes (M) Bengalla 13.4Mt Growth Project Approximately 42 per cent of the unit cost increases from 31 July 2022 are due to additional labour employed to support the Bengalla Mine 13.4Mtpa Growth Project, with volumes to offset this increase to be realised during the 2024 financial year. A total of 135 full-time equivalents (employees and contractors) joined the Bengalla workforce during the year to carry out the capacity uplift to 13.4Mtpa. These include production operator roles required to operate the additional pre-strip capacity that has been mobilised to site. The full benefit of the 13.4Mtpa Growth Project will be realised during the 2025 financial year following final upgrade to the CHPP in September 2024. Bengalla’s expansion to 13.4Mtpa ROM has progressed throughout the year supported by capital investments, including the purchase of the Liebherr R9800 excavator. Equipment delivered and operational during the period included six EH5000 trucks, one grader and one drill, bringing the completion of the growth truck fleet forward by approximately 12 months. The early delivery of the additional pre-strip capacity is expected to enable an increase to the annualised rate of coal mining to 13.4Mt by December 2023, significantly ahead of schedule. Construction works on the CHPP tailings capacity upgrade continue. The project is set to increase CHPP feed capacity to 12.9Mtpa by early financial year 2025. Design options for capacity improvements to the raw coal reclaim circuit are being analysed, along with other infrastructure upgrades required to support site growth and pit progression. The CHPP spiral middlings project tie-in was completed during the financial year, with early results providing quality uplifts on Bengalla’s low- ash products by diverting high-ash spirals middlings to the secondary product circuit. Exploration License (EL 9431) On 4 July 2022, the NSW Government granted EL 9431 for an area of 556 hectares adjoining the western boundary of the Bengalla Mine. Since the licence was granted, an aerial magnetic survey using unmanned aerial vehicles has been completed. Work continued to progress the Activity Approval from the NSW Resources Regulator required prior to commencement of exploration drilling. Bengalla Mine is the owner of most of the land encompassed by the granted licence. Access to the small portion of land not under Bengalla’s ownership will be arranged when required. 19 New Hope GroupAnnual Report 2023 Operating and Financial Review continued New Acland Mine Following the issue of New Acland Stage 3 Environmental Authority by the Queensland Department of Environment Authority and Science in June 2022, the Stage 3 project Mining Leases were issued on 26 August 2022 and the Associated Water Licence (AWL) was granted on 20 October 2022. The Estimated Rehabilitation Cost (ERC) application was approved by the Queensland Treasury Department on 3 February 2023. On 28 March 2023, an internal review upheld the decision of the Queensland Department of Regional Development, Manufacturing and Water to grant New Acland Mine Stage 3 an AWL. Holding all primary approvals, mining operations commenced 1 May 2023. The granting of these key approvals follows extensive reviews undertaken by various government departments. With the Company holding all primary approvals for New Acland Stage 3, operations commenced in Manning Vale East Pit on 1 May 2023. Activities included topsoil clearing, overburden drilling and blasting. Total overburden removal for the period tracked on schedule, with 1.3Mcbm in total prime waste movement backfilled into existing pits for future rehabilitation. The CHPP is operational and ready to wash first coal in the first quarter of the 2024 financial year. With mining underway, planning for key infrastructure works has continued, including planning for roads, dams and mining access required for the Willeroo Pit. Refurbishment of the second CHPP is largely complete and has included the installation of a new deslime screen, significant structural steel repairs, sandblasting and painting. The Letourneau loader rebuild was completed during the period and rebuilds are in progress for four 789 dump trucks and ancillary equipment. There are now 107 locally-based employees working at the mine and at the recently opened Oakey community office. Further recruitment will occur, as the Stage 3 expansion continues to ramp up. New Acland continues to receive strong support from local businesses and suppliers looking to work with the mine at various levels. The Company remains committed to sourcing from local suppliers and businesses wherever possible and is proud to be working with local businesses and representative groups to contribute to the Darling Downs economy. On 15 May 2023, the Oakey Coal Action Alliance (OCAA) launched a new legal challenge in the Land Court of Queensland against New Acland Mine Stage 3 seeking to overturn the Queensland Government’s decision to grant the AWL. On 14 July 2023, the OCAA filed a stay application in the Land Court seeking orders preventing New Acland from carrying out mining activity impacting upon groundwater at New Acland until OCAA’s legal challenge to the grant of the AWL by the Queensland Government is heard and determined by the Land Court. On 14 August 2023, the OCAA withdrew its stay application providing the Company with certainty to progress the Stage 3 ramp-up plan. The withdrawal followed discussions between both parties where the Company confirmed the mining of overburden and coal from the yet to be developed Manning Vale West Pit is not expected before 1 September 2024, under the mine’s existing Stage 3 ramp- up plan. Resolving the stay application with OCAA allows the Company to confidently commence mining coal from the Manning Vale East Pit (which is the first area under development) since the Queensland Government approved the project in October 2022 and begin construction of the Lagoon Creek Crossing to progress development and mining of the planned adjacent Willeroo Pit. 20 New Hope GroupAnnual Report 2023While mining of overburden and coal in Manning Vale West Pit is not expected before 1 September 2024, the Company may undertake surface works, including; building infrastructure, exploration and bore drilling on the site of the Manning Vale West Pit. The Land Court is yet to set dates for the hearing of appeals to the grant of the AWL by the Queensland Government. Queensland Bulk Handling (QBH) QBH delivered 2.0Mt in coal exports for the financial year, a decrease of 23 per cent, decreasing from 2.6Mt in the prior period, due to New Acland being in care and maintenance. During the period an agreement was signed with New Wilkie Energy to export coal through QBH, resulting in the port now being fully contracted following the commencement of operations for New Acland Stage 3. In order to maintain safe and productive operations, The Company is committed to investing in sustaining capital, including the completion of a dozer rebuild and scoping of works to replace the ship loader. These capital works are required to maintain safe and productive operations throughout the full ramp of New Acland Mine and into the future. The majority of QBH’s revenue is generated from long-term customer contracts indexed to inflation. QBH has registered leases over its premises until 2027 and rights of extension to 2042, subject to executing final documentation with the Port of Brisbane. QBH is well positioned to remain a strong performing and low risk asset within the Group’s portfolio. Malabar Resources Limited – 15 per cent Interest (Malabar) First coal was processed from the Maxwell Mine’s re-commissioned CHPP during the period, with the first train departing site and discharged at the port in June 2023. Raw coal from development activities totalling 0.07Mt was produced during the period. Equipment supply for the Whynot seam progressed with delivery of the first shuttle car and feeder breaker. The Woodlands Hill portal excavation was completed, portal entries were installed and drift construction commenced in July 2023. Feasibility studies are underway for delivery of the approved large scale 25MW Maxwell Solar Farm (Stage One). Other environmental activities completed during the period include the planting of 21,000 trees in the Southern Offset Area, bringing the total number of trees planted to date to greater than 350,000. Cattle grazing trials to support mine rehabilitation also commenced during the period. The Company’s ownership interest of Malabar Resources Limited diversifies the Company’s portfolio by providing exposure to metallurgical coal. Malabar’s flagship asset, the (Maxwell Mine) uses low-impact underground mining methods and is expected to provide attractive investment returns over the life of the 6.5Mtpa project. This asset aligns to the Company’s strategy of investment in low-cost, high-quality coal projects with long life approvals. Coal Development and Exploration The Company maintains several development and exploration sites. The expenditure on these assets has been maintained to keep the tenements in good standing and meet required obligations. Pastoral Operations During the period, approximately 1,300 head of cattle were sold by Acland Pastoral Company (APC). APC finished the year  with inventory of 2,150 head of cattle, including 776 heifers as at 31 July 2023. More than 300 of these have been selected as replacement breeders to build breeder numbers. The continued decline in cattle prices over the last 12 months has impacted profitability. APC harvested around 1,700t of winter grain (wheat and barley) and 2,100t of summer grain (sorghum), with increased yields and prices received compared to the previous year. APC has approximately 1,000 hectares of wheat and barley currently growing. Further investments in plant and equipment during the year, and improved weed control has enhanced grain growing operations. New fencing was constructed at APC during the period, with further fencing and upgrades to both cattle yards planned for next financial year. Bengalla Agricultural Company (BAC) grew corn for silage, a small amount of wheat and successfully baled hay several times from a trial lucerne area. Following this successful outcome, further areas are planned to be planted with lucerne. The remaining dryland and irrigated areas were planted with a mix of oats, rye, grasses, and legumes for grazing or hay. BAC has invested in its own hay bailing equipment and a new tractor during the period to reduce the reliance on contractors and facilitate more timely operations. Flooding events during the year caused damage to fencing and pumping infrastructure. Further capital improvements were executed, including significant fencing construction, a hay shed, renovations of staff housing and upgrades to pump and water reticulation networks. BAC purchased 170 store steers and has held onto cattle for longer to take advantage of available feed, ending the year with 850 head. 21 New Hope GroupAnnual Report 2023Operating and Financial Review continued Bridgeport Energy Pty Ltd (BEL) Oil production totalled 288,278 bbls, in line with the prior period of 286,514 bbls. The average realised price was US$84.81/bbl, a reduction of 12 per cent to the prior period (2022: US$96.36/bbl). BEL achieved first gas supply from the Vali field, for which it holds a 25 per cent interest, on 21 February 2023. The Vali field is supplying gas to Australia under a long-term gas supply agreement with AGL Energy Limited. The four well drilling campaign at Cuisiner (PL 303: 15 per cent interest) commenced in late March 2023 and all four development wells were connected and ready for production as at 31 July 2023. Safeguard Mechanism Reforms to the Australian Government’s Safeguard Mechanism took effect on 1 July 2023. The reformed Safeguard Mechanism requires facilities with Scope 1 emissions of more than 100,000 tonnes of carbon dioxide equivalent (CO2-e) per year to progressively reduce Scope 1 emissions against a determined baseline by 4.9 per cent per annum to 2030. The Company’s Bengalla Mine qualifies as a covered coal production facility under the Safeguard Mechanism. The Company’s ability to meet the requirements of the reformed Safeguard Mechanism will depend on several factors including the availability of cost-effective During the period, $1,399 million was paid out in dividends and buy-backs to improve short and long-term shareholder returns. commercially available technologies to reduce CO2-e emissions as well as access to Australian Carbon Credit Units (ACCUs) for surrender. The Company is evaluating the CO2-e emission reduction requirements under the reformed Safeguard Mechanism to determine potential cost impacts. Initial modelling suggests the cost of acquiring ACCU’s to offset the emissions in excess of the baseline will be immaterial in the 2024 financial year. See the Sustainability Report for further detail. Capital Management On 18 November 2022, the Company commenced an on market buy-back of Ordinary Shares. During the period, the Company bought back 37,058,841 Ordinary Shares for a total consideration of $192.4 million. On 14 December 2022, the Company announced a temporary pause of the on- market share buy-back and commenced an on market buy-back of the 2.75 per cent Senior Convertible Notes due 2026 (Existing Notes). On 21 December 2022, the Company announced the successful completion of a reverse bookbuild to repurchase $75.8 million of the principal amount of the Existing Notes at a price to be determined by reference to the volume-weighted average trading price of the Company’s Ordinary Shares over a pricing period (Pricing Period) from 3 January 2023 to 14 March 2023. During the period, an additional $31.5 million of the Existing Notes were bought back on market and $92.7 million were converted to a total of 50,037,223 Ordinary Shares. During the period, the Company bought back and subsequently cancelled all unconverted Existing Notes for an aggregate pre-tax cost of A$367.3 million. At 31 July 2023 no Existing Notes remained outstanding. The convertible note buy-back removed future share dilution at an equivalent after-tax cost of approximately A$4.31 per share. Given the surplus capital, prevailing market conditions and the speed at which the Company could execute a buy-back of the Existing Notes, buying back and cancelling the Existing Notes was the most efficient and cost-effective after-tax method of reducing capital. 22 New Hope GroupAnnual Report 2023The Company will continue to build on its cost and operational disciplines to maximise the value propositions that these quality assets provide. Focussed capital management activities are expected to provide the Company with the financial flexibility it needs to support existing operations as well as to identify and pursue new opportunities either in metallurgical or thermal coal production. However, the Company is not immune to rising, sector wide cost pressures and increasing government intervention. Royalty structures in both New South Wales and Queensland and the Safeguard Mechanism reforms have the potential to impact future growth and investment, while changes to labour hire rules included in industrial relations laws could stymie expansion projects and the building of new infrastructure. During the period, the fully franked 2022 Final and Special Dividends totalling 56 cents per share and the fully franked 2023 Interim and Special Dividends totalling 40 cents per share, were paid to shareholders, totalling $839.1 million. The Company is focussed on returning funds to shareholders through dividends (both ordinary and special) and ensuring the significant value of the Company’s franking account is utilised. While there are no material outlays of capital required for current projects in the short to medium term, the Company expects that dividend payments will be the predominant use of surplus cash flow. Following the successful on-market share buy-back, the Company has limited share capital and so future on-market buy-backs may create a debit to the Company’s franking account balance. The Company will continue to manage the buy-back as part of its capital management strategy to maximise the sustainable long-term returns for shareholders. Outlook The Company’s long-term strategy is to safely, responsibly and efficiently operate our low-cost, long-life assets throughout the global energy transition, with a focus on disciplined capital management, providing valuable returns to our shareholders. The Company believes 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 and legislation will continue to provide a framework as to how the transition will occur. We will work to ensure the Company meets the Australian Government’s legislative requirements in support of achieving Australia’s transition targets. Security of supply is essential to both our emerging and existing international customers, who will need Australia’s high quality, low emission thermal coal to achieve their own emissions reduction targets. The demand for our coal is forecast to drive the Company’s cash generation and significantly fund contributions to local, state and Australian Government departments, which help to underpin the living standards enjoyed by all Australians. Bengalla Mine’s 13.4Mtpa Growth Project and the New Acland Mine Stage 3 expansion position the Company well for further strong cash generation. 23 New Hope GroupAnnual Report 2023Sustainability Report We strive to operate responsibly and to transparently disclose our operational environmental, social and governance (ESG) impacts and metrics that underpin our social licence to operate. Each year we aim to enhance our disclosures about the ESG topics most relevant to our stakeholders, including to continue to release our Sustainability Report within our Annual Report alongside our financial reporting. As with the rest of our reporting in our Annual Report, this Sustainability Report (and all references to ‘this year’) applies to the 1 August 2022 to 31 July 2023 reporting period (unless specifically noted otherwise). Our Sustainability Report has been prepared with reference to Global Reporting Initiative (GRI) standards and the Taskforce on Climate-related Financial Disclosures (TCFD). To see where we address each applicable disclosure, including for further detail on prior periods, refer to our GRI and TCFD Index tables at newhopegroup.com.au/sustainability. Due to the scale of Bengalla and New Acland relative to the other parts of our business, as well as the relative greater significance of their actual and potential sustainability impacts, disclosures within this report largely focus on the performance of these two operations, with references to other assets’ performance where relevant and by exception. Group- level disclosures include all New Hope Group subsidiaries. Unless otherwise specified, entities referenced in this report are as follows: • “New Hope” refers to New Hope Corporation Limited and “New Hope Group” (or “the Group”) refers to New Hope and its controlled entities. • “Bengalla” refers to the Bengalla Mine and also refers to its operator, the Bengalla Mining Company Pty Ltd. 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, unless otherwise stated. • “New Acland” refers to the New Acland Mine and its operator, New Acland Coal Pty Ltd. • “QBH” refers to the Queensland Bulk Handling facility and its operator, Queensland Bulk Handling Pty Ltd. • “Bridgeport” refers to Bridgeport Energy Pty Ltd and its subsidiary entities. • “Jeebropilly” refers to the former Jeebropilly Mine, operated by Jeebropilly Collieries Pty Ltd. This Sustainability Report seeks to provide a balanced, accurate and relevant view of our performance. The Board has reviewed the Sustainability Report and approved its publication. All content within this Sustainability Report is based on information available prior to the date of publication. The content has not been independently verified but has been subject to detailed internal review, using all reasonable care to state accurate facts and reasonable opinions. The content includes some forward looking statements which by their nature involve factors which are uncertain and may change and no representation or warranty is made as to the fairness, accuracy or completeness of the information and opinions contained in this Report. Questions, requests for clarification, or feedback can be directed to cosec@newhopegroup.com.au Our Approach to Sustainability Sustainability Governance As detailed in the Corporate Governance Statement, New Hope’s Board oversees and is responsible for performance against our business objectives, purpose and values. This responsibility is cascaded through the Group’s risk management and governance mechanisms. The Board recognises that risk management and internal controls are fundamental to sound management and 24 that oversight of such matters is a key responsibility of the Board. The Board’s role in relation to risk is to ensure appropriate systems are in place to facilitate the effective identification, management and mitigation of any significant risks to which the Group is exposed. The risk function, led by the Executive General Manager (EGM) and Company Secretary, who reports directly to the CEO, is accountable for developing, maintaining and governing the Group-wide risk management framework, policies, standards, processes and systems. The Sustainability Committee (SC) (formerly the Sustainability and People Committee) assists the Board in meeting its responsibilities in relation to health, safety, wellbeing, environment, community and people matters. The SC has primary responsibility for the management of risks allocated to it and is responsible for reporting and updating the Board about climate change and sustainability matters. At least annually, in conjunction with the Audit and Risk Committee (ARC) and in consultation with responsible executives and employees, the SC reviews the Group’s risk register and risk management framework and agrees the allocation of responsibility by respective committee per identified risk. See the Sustainability Committee Charter for further details. New Hope GroupAnnual Report 2023We seek to understand and report the issues of interest to our stakeholders and/or where we have a significant economic, environmental or social impact. Stakeholder Engagement Our external and operational environment continues to change dynamically. We seek to be a responsible operator which values and listens to the interests, objectives and concerns of our stakeholders. This helps us to understand the impacts of our operations on different stakeholder groups and informs decisions associated with our operations. Key stakeholder groups include employees and contractors, local communities, Traditional Owners, landholders, customers, suppliers, shareholders and joint venture partners, financiers and insurers, government agencies and regulators and industry associations. We identify specific stakeholders primarily through ongoing, direct (one-to-one) engagement, documented in internal stakeholder engagement plans, and prioritise engagement with those most directly impacted by our operations. We aim to engage meaningfully and support respectful and considerate, two-way communication through various channels, from one-to-one interaction to wide-reaching channels such as our website and social media. We are working to improve how stakeholders can access information on sustainability-related matters, including through a refreshed website expected to be launched in the next reporting period. Material Sustainability Topics We seek to understand and report the issues of interest to our stakeholders and/ or where we have a significant economic, environmental or social impact. This year we have used the coal sector specific GRI Standard – GRI-12 to guide our approach. The process to determine topics we believe to be material was as follows: • Internal review of the relevance of all GRI-12 topics to the Group. • Review of the Group’s corporate risks, the previous reporting period’s ‘material’ topics, as well as a review of stakeholder feedback over the past 12 months to identify any additional actual and potential impacts. Emissions, Climate and Global Energy Transition • Greenhouse gas emissions • Reducing greenhouse gas emissions • Climate resilience and transition Environment • Water stewardship • Land use and biodiversity • Closure and rehabilitation • Waste management and recycling Communities • Our approach to community engagement • Economic impact • All identified topics were assessed for • First Nations engagement significance based on potential severity and likelihood of impacts on the economy, environment and people, in alignment with the Risk Management Framework. This year we address a wider range of topics, with the extent of disclosures reflecting the topic’s actual or potential impacts. The topics identified for disclosure were reviewed and approved by the Sustainability Committee and Board and are listed adjacent. • Air quality and noise Our People • Health, safety and wellbeing • Attracting and retaining a diverse workforce • Workplace behaviours and escalating concerns Responsible Business Conduct • Labour practices • Anti-corruption • Payments to governments and public policy • Privacy and cybersecurity • Compliance 25 New Hope GroupAnnual Report 2023Sustainability Report continued Emissions, Climate and Global Energy Transition Combating climate change requires a global effort to transition to a net zero carbon economy, with many governments around the world committing to reach that milestone by 2050. A key challenge is maintaining reliable and secure sources of energy as the role and extent of coal, oil, and gas change over time. As transition efforts progress, the practical challenges and trade-offs of decarbonisation are becoming evident. It is increasingly clear the transition will not be linear, and coal will continue to be part of the global energy mix, albeit declining over the coming decades. We see that our role is to safely, responsibly and efficiently operate our low-cost, long-life assets, while demand for coal used to generate energy continues. Importantly, we believe companies that responsibly manage operational impacts on the environment, people and communities are the most appropriate operators to produce the coal that will be required through the energy transition. Greenhouse Gas 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 Reporting (NGER) Scheme. This includes recording and disclosing our Scope 1 and Scope 2 greenhouse gas (GHG) emissions on an operational control basis. As a facility that emits over 100,000 tonnes of Scope 1 emissions per annum, Bengalla is 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 or managed. Bengalla’s actual GHG emissions have been below its baseline limit for each year that it has been covered by the Safeguard Mechanism. This section sets out emissions and energy related data across our operations, as reported through the NGER Scheme. Reflecting the timing requirements of reporting under the NGER Scheme, data presented is for the year to 30 June 2022. Scope 1 and 2 GHG Emissions The Group’s total operational emissions, comprising Scope 1 and 2 emissions, were 823,733 tonnes of carbon dioxide equivalent (tCO2-e) for the year to 30 June 2022, an increase from 569,223 tCO2-e in the prior year. Factors impacting the Group’s emissions in the year included: • A decline in overall total energy use across the Group. • Bengalla progressing into new seams with updated gas modelling, leading to higher reported fugitive emissions and a higher emissions intensity overall in the year to 30 June 2022 compared to prior years. The mining sequence and a slight decrease in production also contributed to the variance in Scope 1 emissions between the year to 30 June 2020 and the year to 30 June 2021. • New Acland moving into care and maintenance, meaning there was reduced energy use and only limited coal production for the year. • Steady operations and reported emissions and energy use at Bridgeport and QBH. Scope 1 (Direct) Emissions GHG emissions from sources that are owned or controlled by the reporting organisation. New Hope Group’s Scope 1 emissions are dominated by fugitive emissions (which occur when coal is exposed during the mining process, releasing CO2 and methane inherent in the coal seam) and the use of diesel fuel in haul trucks and other heavy equipment at our mine sites. Scope 2 (Energy Indirect) Emissions GHG emissions that result from the generation of purchased or acquired electricity, heating, cooling, and steam consumed by the reporting organisation. New Hope Group’s Scope 2 emissions are largely attributable to purchased electricity used in our operations. Scope 3 (Indirect) Emissions GHG emissions, other than indirect (Scope 2) GHG emissions, that occur as a consequence of an organisation’s activities but are from sources that are not owned or controlled by the organisation. New Hope Group’s Scope 3 emissions are dominated by the consumption of coal for power generation and other purposes at our customer sites. 26 New Hope GroupAnnual Report 2023Group Emissions and Energy Use, Year on Year Indicator Unit of Measurement Total Scope 1 and Scope 2 GHG emissions Scope 1 GHG emissions Scope 2 GHG emissions tCO2-e tCO2-e tCO2-e Year to 30 June 2022 Year to 30 June 2021 Year to 30 June 2020 823,733 569,223 702,779 753,651 70,082 500,309 68,914 616,966 85,813 Total energy use Gigajoules (GJ) 3,155,801 3,678,311 3,938,219 Operational Emissions and Energy Consumption by Site, Year to 30 June 2022 Indicator Unit of Measurement (100% basis) New Acland Bridgeport Bengalla Total Scope 1 and 2 GHG emissions tCO2-e Scope 1 GHG emissions Scope 2 GHG emissions Operational metric tCO2-e tCO2-e 787,296 725,774 61,521 13,730 8,022 5,708 19,099 19,049 50 ROMt / bbl / tonnes throughput 12,030,967 (ROMt) 977,876 (ROMt) 242,983 (bbl) GHG emissions intensity tCO2-e/ operational metric 0.0654 (tCO2-e/ROMt) 0.0140 (tCO2-e/ROMt) 0.0786 (tCO2-e/bbl) Other Sites* 140 10 130 N/A N/A QBH 3,469 796 2,673 2,841,068 (Tonnes throughput) 0.0012 (tCO2-e/tonnes throughput) Total energy consumed Gigajoules (GJ) 2,636,980 139,118 355,593 23,375 735 * Other sites include: Brisbane Head Office and West Moreton (comprising the former Jeebropilly and New Oakleigh mines) which were not operational in the year to 30 June 2022. Scope 3 Emissions Our major sources of Scope 3 emissions relate to the use of our coal in power stations to generate electricity, or other industrial facilities. Our Scope 3 emissions are captured as customer facilities’ Scope 1 emissions. To date we have not reported Scope 3 emissions, although our 2022 Climate and Global Energy Transition Statement provided a one-off estimate of Bengalla’s key categories of Scope 3 emissions. We acknowledge stakeholder interest in disclosure of Scope 3 emissions, and the likelihood that disclosures will become mandatory in the future1. We are working with our service providers to baseline our emissions and build a model to provide meaningful and reasonable estimates of Scope 3 emissions in future. Reducing GHG Emissions Regulatory Targets Reducing GHG emissions is a global challenge, with 195 countries formalising their commitment as signatories to the Paris Agreement. As part of its Nationally Determined Contribution under the Paris Agreement, the Australian Government has committed to a 43 per cent reduction in GHG emissions below 2005 levels by 2030 and net zero by 2050. In support of these ambitions, the Australian Government has recently reformed the Safeguard Mechanism. Reforms took effect on 1 July 2023, requiring covered facilities to progressively reduce Scope 1 emissions by 4.9 per cent per annum to 2030, against a determined baseline. Australian Carbon Credit Units (ACCUs), currently capped at A$75 per unit, and Safeguard Mechanism Credit units (SMCs, tradeable credits generated where Safeguard Mechanism facilities reduce their emissions beyond their baselines) can be used to meet these obligations, with conditions. Details of emissions reduction requirements and related regulations beyond 2030 are yet to be determined by the Australian Government. As a large facility with over 100,000 tCO2-e in annual Scope 1 emissions, Bengalla is covered by the Safeguard Mechanism and is now subject to mandatory emissions reduction targets in accordance with Australian law. 1. https://treasury.gov.au/consultation/c2023-402245 27 New Hope GroupAnnual Report 2023Sustainability Report continued Emissions, Climate and Global Energy Transition continued Projected future GHG emissions at Bengalla are shown, based on the approved mine life and current data and modelling. The yellow portion demonstrates fugitive emissions, and the grey portion demonstrates hydrocarbons. The black line indicates the modelled Safeguard Mechanism baseline for emissions reductions, which can be met through a number of means, as noted above. The Mechanism will be reviewed in FY26-27 to determine the trajectory post-2030.2 New Acland’s Scope 1 emissions are presently below the Safeguard Mechanism’s current 100,000 tCO2-e threshold. Based on current data and modelling, we expect that New Acland’s Scope 1 emissions will continue to remain below the Safeguard Mechanism’s current threshold, even as production expands. This is largely because of low fugitive emissions at the mine due to its low-gas coal seams, which gives New Acland a lower emissions intensity profile compared to many other mines. Our operations and new projects may also be subject to future state-based GHG emissions reduction measures. The NSW Government aims to achieve net zero emissions by 2050 3 and, in 2023, the NSW Environmental Protection Agency foreshadowed the introduction of sector- based GHG emissions reduction targets which may differ from the Australian Government targets.4 We will monitor developments in order to understand potential impacts on our operations. Decarbonisation at New Hope Group Decarbonisation presents a significant challenge for our business. In practice, our absolute emissions reduction trajectory will likely be ‘lumpy,’ rather than linear, as specified under the Safeguard Mechanism. This reflects the time and investment required to plan and implement large- scale emissions reduction initiatives, and that some emissions reduction will require shifts in entire industries that support coal mining. Nonetheless, we will work within the Safeguard Mechanism framework to honour our obligations. Bengalla Scope 1 Emissions 900,000 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 e - 2 O C t Future projections and baseline for emissions reductions up to 2030. Modelled Safeguard Mechanism baseline Fugitive Emissions Hydrocarbons Future projections post 2030. No baseline shown as the regulatory framework for baseline determination post 2030 is yet to be set. Baselines expected to be set by the Federal Government following review in 2026/27. Current approvals sees mining end in the 2030s 0 FY 2 2 FY 2 3 FY 2 4 FY 2 5 FY 2 6 FY 2 7 FY 2 8 FY 2 9 FY 3 0 FY 3 1 FY 3 2 FY 3 3 FY 3 4 FY 3 5 FY 3 6 FY 3 7 FY 3 8 Note: Graph excludes other Scope 1 items all of which comprise less than 1 per cent of Bengalla scope 1 emissions. To help address this challenge, this year we have undertaken the following initiatives, which will form the foundation of a Group decarbonisation plan: • Conducting a detailed emissions profiling activity to help focus our decarbonisation efforts. • Adopting an Enterprise Decarbonisation Framework, which sets out processes and accountabilities for GHG reduction initiatives across the Group. • Developing a Group Carbon Model and incorporating a cost of carbon into our financial model. While some incremental carbon reduction initiatives can be easily implemented, large scale carbon reductions will be more difficult to achieve. The finite life of our major assets, with both of our mines expected to exhaust presently permitted reserves during the mid to late 2030s, limits the returns (both financial and in avoided emissions) of potential emissions reduction investments. Nevertheless, we continue to seek opportunities for potential emissions reduction initiatives. This section sets out potential opportunities and challenges at our two mine sites. Fuel Emissions Mining operations are reliant on heavy equipment, including haul trucks, excavators, loaders, graders, water trucks and other equipment. Diesel emissions represent around 22 per cent of Bengalla’s Scope 1 emissions and 98 per cent of New Acland’s Scope 1 emissions. We seek to implement incremental efficiencies that reduce our fuel emissions. At Bengalla, newly installed tailgates on an existing fleet of seven trucks have enabled higher coal payloads, reducing overall haulage requirements, while a new haulage corridor at the southern end of the mine will improve haulage efficiency. We work with equipment manufacturers to understand the feasibility of using alternative fuels for the mining fleet and other equipment on site. Non-hydrocarbon fuelled heavy equipment will likely only become economic and available at scale over a medium or long- term time horizon, and certain technologies (such as trolley-assist haulage) may never become feasible including due to the layout of our mines. We continue to monitor technological developments and seek to understand the financial, social, environmental and carbon costs and benefits for employing both proven and new carbon reduction projects. 2. https://www.cleanenergyregulator.gov.au/NGER/The-Safeguard-Mechanism/The-Safeguard-Mechanism-for-financial-years-commencing- on-or-after-1-July-2023 3. https://www.energy.nsw.gov.au/nsw-plans-and-progress/government-strategies-and-frameworks/reaching-net-zero-emissions/net-zero 4. 2023-2026 Climate Change Policy and Action Plan. 28 New Hope GroupAnnual Report 2023We see that our role is to safely, responsibly and efficiently operate our low-cost, long-life assets, while demand for coal used to generate energy continues. Carbon Offsets and Credits We are developing a carbon credit strategy for the Group as part of the suite of actions we expect will be necessary to meet Safeguard Mechanism obligations. The strategy will incorporate purchasing ACCUs and considers opportunities to generate both ACCUs and SMCs on our existing land. Our carbon credit strategy will be designed to balance absolute emissions reduction efforts to ensure we meet our regulatory targets under the Safeguard Mechanism. Contributing to Research and Development We support research and development through Low Emission Technology Australia (LETA), which invests in technologies to reduce carbon emissions. Contributions to LETA for the 2023 financial year totalled $0.75 million. Climate Resilience and Transition We recognise stakeholder interest in disclosures aligned with those recommended by the TCFD, which also inform the climate-related financial disclosures expected to be required by the Australian Government from FY25.5 We continue to refer to the TCFD in our reporting. Governance New Hope’s Board is responsible for overseeing impacts of climate-related matters on, and performance against, business objectives, purpose and values. Our Risk Management Framework defines requirements for holistic risk identification, assessment, management and reporting, including climate-related risks. Fugitive Emissions At about 78 per cent, fugitive emissions are by far the largest sources of Bengalla’s Scope 1 emissions. New Acland’s coal seams have much lower levels of gas, so fugitive emissions only represent about 2 per cent of its Scope 1 emissions. Fugitive emissions occur when coal is exposed during the mining process, releasing CO2 and methane inherent in the coal seam. The nature and volume of emissions depend on both the coal resource properties and the mining method. Capturing fugitive emissions is particularly challenging at an open-cut coal mine, where the emissions are diffuse, compared to an underground mine. Capturing fugitive emissions at our mines would likely only be feasible over a medium or long-term time horizon given the scale of activity required for construction and implementation of capture infrastructure and systems. New Acland’s very low fugitive emissions profile further limits feasible emissions capture projects. This year we commissioned a conceptual study on the potential for recovering fugitive emissions at Bengalla and will continue to assess the feasibility of such a project. Electricity We are investigating alternative on-site generation projects, currently in concept phase. At Bengalla, our options are more limited due to the available locations within the mining boundary, however there is potential for a modest scale solar PV and battery storage project. Design and assessment work is continuing. At New Acland there is potential for a larger scale, alternate energy facility. We have undertaken promising concept work for a pumped hydro complex including on-site solar and wind generation that would take advantage of the site’s topography and location within the Southern Queensland Renewable Energy Zone. 5. https://treasury.gov.au/consultation/c2022-314397 Detail about the Board’s oversight of and management’s role in assessing and managing climate-related risks and opportunities are set out in our Corporate Governance Statement. Management and Disclosure of Climate-related Risks Climate-related matters and risk assessment outcomes are incorporated into our strategic and business planning processes, with internal and external expertise used to support the approach, as required. Material climate-related risks and related actions over the short-, medium- and long-term are disclosed in the Risk Management section of the Directors’ Report. Scenario Analysis We assess investment decisions on the assumption that global net zero will be achieved by 2050 and have primary regard to Wood Mackenzie’s Accelerated Energy Transition 1.5-Degree Scenario (AET1.5). This scenario assumes that despite population growth and rising GDP, by 2050 overall energy consumption will be materially lower than today due to rapid electrification and higher efficiency. This scenario also assumes that while fossil fuels’ share of primary energy demand shrinks, low-carbon hydrogen and carbon capture use and storage play a central role in the energy system. This scenario formed the basis of our resilience analysis outlined in our Climate and Global Energy Transition Statement 2022. We expect to update and enhance disclosed scenario analysis in our future reporting. 29 New Hope GroupAnnual Report 2023Sustainability Report continued Environment We aim to responsibly manage the environmental impacts from our operations, including through progressive rehabilitation to ensure post-mining land uses are safe and productive. Water Stewardship Water is a critical resource for our operations and our communities. Our operations have site-specific water management plans reviewed and implemented on an ongoing basis to ensure we responsibly manage water. At Bengalla, the main surface water source is the Hunter River, with the volume of water extracted from the River controlled by water licences. Other sources of water include sediment water runoff from disturbed and rehabilitated areas, water from the mine, including groundwater inflow, and recycled water from the on-site wastewater treatment plant. Water is pumped to dams for re-use onsite. Where reasonable and feasible, clean water is directed away from disturbed areas. To manage rainfall and other inflows to the Bengalla water management system, our discharge dam provides 700ML of capacity. We hold credits to discharge water into the Hunter River during periods of high flow and flood flow under the Hunter River Salinity Trading Scheme. From 1 July 2022 to 30 June 2023, we made a permitted discharge of 1,196ML, an increase of approximately 40 per cent on the prior year due to the higher than average rainfall experienced in early 2022. At New Acland, the main surface water source is rainfall captured in on-site dams. A purpose-built, 45km pipeline also transfers recycled wastewater purchased from Toowoomba Regional Council. This third-party recycled water is used for all production activities, including in the coal handling and preparation plant 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, eliminates the need to draw from natural water sources and provides a revenue stream for the Council. Groundwater is only used for potable water supply and for bathrooms; no groundwater is used for production activities at New Acland. New Acland is authorised to release water via Spring Creek and Lagoon Creek during periods when there is natural flow. When there is no natural flow occurring water must be treated using reverse osmosis before being released. Our Bridgeport oil and gas operations produce a significant amount of water as part of the oil extraction process. The team is undertaking a feasibility study to reuse this water to generate hydrogen alongside its operations at Kenmore in southwest Queensland, as outlined in the 2022 Sustainability Report. Water Withdrawals by Category 5% Bengalla1 95% 6% 17% New Acland2 77% Surface water Third-party water Groundwater 1. Year to 31 December 2022. 2. Year to 31 July 2023. Total Volume of Water Withdrawal Category Surface water (ML) Groundwater (ML) Seawater (ML) Produced water (ML) Third-party water (ML) Total (ML) Bengalla New Acland Bridgeport Year to 31 Dec 2022 Year to 31 Dec 2021 Year to 31 July 2023 Year to 31 July 2022 Year to 31 July 2023 Year to 31 July 2022 2,976 150 - - - 2,737 139 - - - 3,126 2,876 1,543 124 - - 329 1,996 1,920 - - 116 Not recorded Not recorded - - 292 2,328 - 2,594 - 2,594 - 2,733 - 2,733 Note: Surface water includes water extracted from Hunter River (Bengalla), rainfall captured in on-site storages. Groundwater is water extracted from underground formations at Bengalla and New Acland. Groundwater extracted by Bridgeport for shower and laundry purposes is not recorded as quantities are immaterial. Produced water is water withdrawn as a by-product of oil extraction at Bridgeport’s operations. Third-party water is recycled wastewater from Toowoomba Regional Council. None of our operations withdraw any seawater. Bengalla water withdrawal is reported on a calendar year basis. 30 New Hope GroupAnnual Report 2023and enhanced rehabilitation bio-diverse areas. The topography of Stage 3 is slightly different and we intend to return the area to grazing land with some farming areas. Rehabilitation continued throughout care and maintenance, and this year, five hectares were rehabilitated bringing the total to 698 hectares. We also formerly operated coal mines, collectively known as West Moreton, near the city of Ipswich in Queensland: • Operations at the New Oakleigh Mine ended in 2013 and in the subsequent years we rehabilitated the site to a mainly grazing land use. This year we sold the land, with all outstanding obligations under the mining leases and Environmental Authority transferred to the new owner. • Mining at the Jeebropilly Mine ended in 2019, and much of the site has been rehabilitated to the final land use of grazing. This year we have focused on planning ahead of final rehabilitation and closure, and this work is ongoing. At Bengalla, our rehabilitation efforts are aimed at restoring the land to a combination of pastoral grassland and high-density woody vegetated land, with a total of 308 hectares rehabilitated at Bengalla since 2005. High-density woody vegetation continues to be established, improving visual amenity for local communities and providing habitat corridors for native fauna as plantings mature. Heavy rainfall impeded our ability to undertake activities planned for the year, including moving waste material and installing drainage channels which form the basis for rehabilitation. While the planned works are now underway, the rainfall delays mean we did not reach final completion of any new areas during the period. During the year we planted 64,000 trees in an area that had previously been rehabilitated to mixed pasture and woodland, with the objective of establishing high-density woody vegetation in areas exposed to the towns of Muswellbrook and Denman. At New Acland, our rehabilitation program returns land to both agricultural and conservation uses, contributing to the region’s agribusiness industry and re-establishing native species. Generally the areas where mining occurred during New Acland Stages 1 and 2 are being returned to a combination of grazing land Land Use and Biodiversity Our landholdings are used for a range of purposes in addition to mining. We manage agricultural operations, including on rehabilitated land, to support productive and enhanced land use. Our agricultural operations adjacent to both Bengalla and New Acland are used for cropping and cattle grazing, and dairy farming in the case of Bengalla. These productive agricultural businesses also act as a physical separation, to provide a buffer from our operations for our near neighbours. We also own and manage land for biodiversity purposes, to offset ecological disturbance at our mines under both federal and state government requirements. Objectives of offsets for each specific area – including targeted flora and fauna species – are outlined in management plans approved by the relevant government bodies. Activities on these properties include managing weed and pest species, maintenance on fencing, controlled burns to manage bushfire risk and ecological surveys to monitor targeted flora and fauna. In Queensland at New Acland, we also manage a number of conservation zones in areas that have not been and will not be disturbed by mining. Like biodiversity offsets, these areas are managed under strict regulatory conditions. At our Lagoon Creek and Bottle Tree Hill conservation zones, we are working towards re-establishing native tree species. Closure and Rehabilitation We progressively rehabilitate mined land towards final land uses outlined in closure and rehabilitation plans that have been approved by relevant government authorities. We work to restore disturbed land and to improve rehabilitation and post-mining land use outcomes by planting vegetation, optimising water drainage and generating productive soil on rehabilitated land. 31 New Hope GroupAnnual Report 2023Sustainability Report continued Environment continued The proportion of land disturbed for mining that has been rehabilitated at our sites continues to track above the overall rate of land disturbed to rehabilitated in Queensland of 22 per cent.6 Progressive rehabilitation at New Acland returning mined land to agriculture and conservation Disturbed and Rehabilitated Land Land disturbed for mining activities (ha) Land rehabilitated in the year to 31 July 2023 (ha) Cumulative land rehabilitated (ha) Mine Site Total Bengalla New Acland Jeebropilly* 3,772 1,090 1,527 1,155 5 1,792 0 308 5 0 698 786 Note: All figures reported as at 31 July 2023. * Part of the former West Moreton complex. Now excludes New Oakleigh (divested in June 2023) and Chuwar as the Environmental Authority (EA) was surrendered and Mining Leases have been relinquished. Watch video Click image above or scan the QR code to view Proportion of Land Disturbed for Mining That Has Been Rehabilitated (%) 68% 46% 22% 28% Coal mines across Queensland 6 Bengalla (NSW) New Acland (QLD) Jeebropilly (QLD) 6. In its Annual Report 2020-2021, tabled in February 2023, the Queensland Mine Rehabilitation Commissioner found that across 90 coal mines in the state, 22 per cent of land disturbed had been rehabilitated as at the end of 2021. https://www.qmrc.qld.gov.au/__data/assets/pdf_ file/0023/303791/qmrc-2021-22-annual-report.pdf 32 New Hope GroupAnnual Report 2023Waste Management and Recycling We work to responsibly manage both regulated and non-regulated waste. Our sites have management plans that detail requirements for disposal, tracking, and reporting of mineral and non-mineral wastes. Where practicable, we seek 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) for recycling with reliable and regulated third-party providers. Bengalla has an on-site bioremediation facility to decontaminate hydrocarbon contaminated material, reducing the amount of waste that is disposed off-site. Non-mineral waste generated at our sites that cannot be recycled and is considered non-hazardous is disposed of at appropriate landfill facilities by third-party providers. Hazardous non- Waste Collection and Recycling From Operational Mine Sites and QBH Indicator 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) Proportion of total waste recycled Year to 31 July 2023 Year to 31 July 2022 Year to 31 July 2021 3,853 684 3,168 2,027 656 53% 3,301 3,707 617 2,684 1,470 568 45% 1,012 2,695 1,293 520 35% mineral waste that cannot be re-used or recycled is collected and removed for treatment and specialised disposal. This year we recycled 53 per cent of total waste at our mine sites. Tailings Management At Bengalla, fine reject material is treated, dewatered, and placed in reject cells within the overburden emplacement area in a controlled manner. At New Acland we have in-pit tailings dams, which poses less risk to the environment and community than out-of-pit facilities. Environmental monitoring allows us to identify and manage issues and therefore minimise the impacts. Our Jeebropilly mine has an in-pit tailings dam, the management of which will be incorporated in final rehabilitation planning, currently underway. 33 New Hope GroupAnnual Report 2023Sustainability Report continued Communities We aim to be a responsible neighbour that makes a positive contribution to our communities. Around 90 per cent of our employees live in the areas around our mining operations. We are open, transparent and engage respectfully, seeking to build enduring relationships based on mutual respect and long-term commitment. We also strive to responsibly monitor and manage the at-times unavoidable amenity impacts of our operations and address community concerns if they arise. Our Approach to Community Engagement We proactively engage with a range of stakeholders connected to our operations including Traditional Owners and First Nations community members, 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 facilitate meaningful engagement and seek to understand and address any actual or potential negative impacts from our activities. Community members can learn about our operated sites, share feedback, ask questions, and raise concerns through a range of formal and informal channels. These include: • Bengalla’s Community Consultative Committee (CCC), comprising a range of community representatives including representatives from Muswellbrook Shire Council. CCC members and meeting minutes are available on our website. • New Acland’s Community Reference Group, an advisory body comprising local residents representing different parts of the community including health, education, landholders and local government. • Community information sessions, site visits, newsletters, local advertising, local media and social media. • In person at our New Acland Community Information Centre which re-opened to the public following approval of New Acland Stage 3 this year. • 24-hour complaints hotlines for both Bengalla and New Acland. Our teams frequently participate in local events, enabling community members to directly ask questions or provide feedback. We work closely with local government and are active in the local business community, with senior representatives from both New Acland and Bengalla participating in the Oakey and Muswellbrook Chambers of Commerce, respectively. Our activities are outlined in impact assessments and associated management plans that are approved and monitored by the respective bodies in NSW and Queensland, available at newhopegroup.com.au/general-reporting. This year we have further enhanced our community engagement with the appointment of additional team members at New Acland, and increased coordination to share approaches across the Group. We engage directly with local landholders on an ongoing basis on matters including land access, environmental monitoring, road closures, and operational updates. We also manage agricultural operations near our mine sites to minimise local impacts and ensure productive land use. 34 New Hope GroupAnnual Report 2023Pat Weir MP – Member for Condamine (QLD), opened the newly renovated New Acland Coal Community Information Centre at Oakey. Reopening New Acland Mine Community Information Centre In June 2023, we opened the newly renovated New Acland Community Information Centre at Oakey, about 24km from New Acland. The Centre has long been a mainstay of Campbell Street, but closed when New Acland was placed into care and maintenance in March 2021. It is now open five days a week and is a one-stop shop for locals eager to discuss job and sponsorship opportunities, or to ask questions or raise concerns, related to New Acland. New Acland General Manager, Dave O’Dwyer said the reopening of the Community Information Centre has allowed New Hope Group to foster even stronger relationships with the local community. “After a two-year hiatus, we’re delighted to once again have an office at Oakey,” said Mr O’Dwyer. “For years, Darling Downs locals were able to drop in and share a cup of coffee or tea with our team. We’re thrilled this tradition will continue.” Watch video Click image above or scan the QR code to view Bengalla Mine offers 8 Undergraduate Scholarships every year for year 12 students entering university the following year. These scholarships are awarded on merit without regard to the campus of enrolment or course of study. Each scholarship is to the value of $5,000. These four graduates are from Muswellbrook High School. 35 New Hope GroupAnnual Report 2023Sustainability Report continued Communities continued Economic Impact We provide reliable local employment, training and procurement opportunities and invest in the social and economic development of our communities. Almost all of our employees and long-term contractors live within driving distance of our mining operations in both NSW and QLD. This year, New Acland moved out of care and maintenance and we have been able to welcome employees back onsite and recruitment is ongoing. In total, New Hope Group paid $166.8 million in wages for the year, with much of this staying in regional areas. We expect to be working with more businesses local to New Acland into the next reporting period as mining ramps back up. Through local procurement of goods and services, we contribute to and support supplier development and provide opportunities for local employment. This enhances purchasing power in the community and therefore stimulates local businesses and indirectly encourages further infrastructure investment. In total, New Hope Group operations procured $207.5 million in local goods and services. A total of $212.6 million in mining and oil royalties were paid to state governments by New Hope Group operations. See the Tax Contribution Report for more detail. Regional Impact – NSW $699,000 donated to 93 community groups 644 employees, 89% local, and $120.8 million in wages at Bengalla $131.0m spent with 331 local suppliers $210.1m in coal royalties paid to the NSW Government NSW Bengalla Newcastle Sydney 36 New Hope GroupAnnual Report 2023Regional Impact – QLD QLD New Acland Brisbane $73,700 donated to 22 community groups 107 employees, 93% local, and $12.2 million in wages at New Acland $76.5m spent with 430 local suppliers 37 New Hope GroupAnnual Report 2023This year, we commenced a community needs analysis, to focus our engagement for the next five years and ensure our investment continues to be in the areas of most relevance. The review will be completed towards the end of calendar 2023 and the Bengalla community engagement strategy and plans will be revised subsequently. This year New Acland donated $73,700 to 22 community groups through its sponsorship program. Since 2002, we have donated more than $7 million to local community groups – as well as in-kind support at events – and look forward to continuing this tradition. This coming year, we will undertake an analysis of the needs around New Acland to guide our future investment and will reinvigorate our investment through sponsorships, our Community Investment Fund and in-kind support. We also contribute to local infrastructure in NSW, with Bengalla and the Muswellbrook Shire Council working together to identify opportunities for infrastructure development. In the year to 31 July 2023, Bengalla provided more than $720,000 (100% basis) to the Council via Voluntary Planning Agreement contributions. Sustainability Report continued Communities continued Community Investment We contribute to and invest in a range of community groups and initiatives, with a focus on skills, training and employability, as well as broader social and community development. At Bengalla, community groups have multiple formal pathways to seek financial and in-kind support, all of which are focused on the immediate local community. In this way we contribute to initiatives in the areas of sport, health, environment, education and more. These are in addition to our long-standing partnerships including with the Muswellbrook Race Day (28 years), Upper Hunter Show (23 years), Muswellbrook Art Prize (20 years) and PCYC Muswellbrook (17 years). In the year to 31 July 2023, Bengalla donated almost $875,000 (100% basis) to 93 community organisations and scholarship opportunities. Local Development and Investment Indicator Total number of community support recipients Total community donations, sponsorships and scholarships ($) Year to 31 July 2023 Year to 31 July 2022 Year to 31 July 2021 115 79 78 $947,941 $1,032,763 $337,000 Number of local suppliers – NSW 331 281 358 Payments to local suppliers and contractors – NSW ($) Number of local suppliers – QLD Payments to local suppliers and contractors – QLD ($) Proportion of total procurement budget used for procurement of local goods and services Total wages and salaries, including on-costs $163.7m $91.9m $141.6m 430 $76.5m 304 363 $90.5m $156.0m 22% 18% 47% $166.8m $147.2m $164.5m Note: Monetary figures reflect Bengalla on a 100 per cent basis, except for total wages and salaries, which represents New Hope’s 80 per cent interest in Bengalla. Partnering with PCYC to Build Resilience in Our Communities We recognise the work community-based organisations do to support resilience and inclusion amongst young people and are proud to partner with Police Citizens Youth Clubs (PCYC) near our mine sites. Last year we kicked off a two-year partnership with PCYC Toowoomba’s Youth Connect program, investing $360,000 to enable the team to employ two youth workers and fund their program to support the social, physical and mental wellbeing needs of young people. Key focus areas include working with students and local school administrators to help students re-engage with school, developing skills such as literacy and driving to help set young people up with the tools they need to join the workforce and social and sports-based activities to build connections. Bengalla contributed $55,000 during the year towards a health and fitness coordinator and $10,000 towards equipment upgrades at PCYC Muswellbrook. This investment has contributed to PCYC’s programs that provide fitness support to individuals with disability, and fitness programs for young people to encourage positive behaviours, build self-esteem and resilience and encourage school attendance. These programs contribute to participants’ physical health, psychological wellbeing, social inclusion, independence and empowerment. 38 New Hope GroupAnnual Report 2023Skills Development We support local skills development and employment through our apprenticeship, work experience, and scholarship programs. These also serve as important ways to educate the community about our operations. This year at Bengalla: • Our apprenticeship program provided opportunities for five new apprentices to start their trade career, bringing the total number of apprentices on site to 16. • Through our work experience program, 31 students from local schools and vocational education institutions gained exposure to a real-world work environment. • We continue to support local students undertake university studies, with one engineering undergraduate and eight undergraduate scholarships awarded per year since 2000. Through our long-standing relationships with local schools, we continue to offer tours to local students to build understanding of our operations and our role in the community, with four school groups visiting Bengalla this year. At New Acland, we are exploring traineeships, apprenticeship, and scholarship opportunities in conjunction with local education providers, learning from the programs implemented at Bengalla. While opportunities have been limited due to New Acland being in care and maintenance, in June 2023 we hosted our first school-based work experience student from Oakey State High School. “I knew the mining industry offered job opportunities where I could apply what I enjoyed at school.” Talesin Court-Kriesch, a Muswellbrook Local, Received a Bengalla Engineering Scholarship in 2018 and Shares his Experience “My high school physics teacher inspired my interest in the electrical side of physics and, being from Muswellbrook, I knew the mining industry offered job opportunities where I could apply what I enjoyed at school,” says Talesin. “Our high school careers advisor was always looking out for us and encouraged me to apply for the Bengalla Engineering Scholarship.” Talesin went on to study Electrical and Electronic Engineering at Newcastle University from 2018, and, through the scholarship, not only did he get practical work experience but also financial support. “Engineering is a notoriously challenging field and trying to learn during COVID, without face-to-face teaching, made it all the more difficult,” he added. “The scholarship had a huge impact. It was my first time living out of home, completing a challenging degree, but thanks to the work placement and support, I didn’t have the added stress of taking on a second job to be able to live in Newcastle.” “I honestly think without the scholarship, it would have taken me even longer to complete the degree.” After graduating in 2023, Talesin now works as a full-time Electrical Engineering Graduate at Bengalla, where he focuses on developing systems to make the mining environment safer for his teammates. “It was a no-brainer to come back – my friends and family live here and the team at Bengalla is very supportive and community-minded. Working at a mine site every day has definitely been an adjustment but I’m glad to be out of the classroom and doing practical work every day.” 39 New Hope GroupAnnual Report 2023Sustainability Report continued Aboriginal Cultural Heritage We partner with the traditional custodians of the land where we operate to identify and protect sites of cultural significance. At Bengalla, we work with the Wanaruah Local Aboriginal Land Council (LALC), and a representative from the LALC is a member of the Bengalla CCC. We manage Aboriginal cultural heritage in accordance with the approved Aboriginal Cultural Heritage Management Plan. We periodically undertake cultural heritage surveys to ensure accurate information when undertaking ground disturbance activities. At New Acland, we work with the Western Wakka Wakka People and their endorsed parties to manage cultural heritage. We manage Aboriginal cultural heritage in accordance with the approved Aboriginal Cultural Heritage Management Plan. While most areas of proposed disturbance within the Stage 3 Project’s boundaries were completed in prior years, in early 2023 we completed all remaining areas. In Queensland, we work with indigenous business connectors, through the Toowoomba and Surat Basin Enterprise organisation, to identify procurement opportunities for New Acland. Through our partnership with the PCYC Oakey Youth Connect Program, we support efforts to help students re-engage with schooling. Our Bengalla Mine is a longstanding supporter of PCYC Muswellbrook, which runs its own Aboriginal and Torres Strait Islander youth engagement programs. Bengalla is also a partner of the Polly Farmer Foundation, which delivers academic enrichment programs to empower Muswellbrook High School students to move into successful post- school pathways. In May 2023, New Hope Group became a partner of the Clontarf Foundation, which exists to improve the education, discipline, self-esteem, life skills and employment prospects of young Aboriginal and Torres Strait Islander men through its Academies based at schools across the country. We are contributing $150,000 per annum for three years, with the funding to focus on Academies in the Toowoomba and Darling Downs region. We are working with Clontarf to develop a program of activities for our workforce to engage with Clontarf students, including through site visits and employment forums. Communities continued First Nations Engagement 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, we work to obtain the consent of Traditional Owners for activities associated with our operations. We have respectful relationships with local First Nations community members around our operations. We do not have Native Title or Indigenous Land Use Agreements associated with our mining or agricultural operations or our Queensland Bulk Handling facility as these areas are not covered by registered native title claims. The majority of land where Bridgeport operates is covered by Native Title and Bridgeport works with a range of stakeholder groups including under agreements such as Right to Negotiate, Cultural Heritage Management Plans, Indigenous Land Use Agreements, and Ancillary Agreements as relevant. Groups include the Bidjara People, Bigambul People, Boonthamurra People, Kullilli People, Mandandanji People, Mardigan People, Mithaka People and Wongkumara People. These areas where Bridgeport operates cross numerous regions in Queensland but are predominantly in south-west Queensland where the majority of operations occur. A key foundation for engagement and understanding is cultural awareness and this year, 25 employees in our Brisbane office participated in Aboriginal and Torres Strait Islander cultural awareness training. We intend to undertake this training annually. 40 Annual Report 2023 New Hope GroupAir Quality and Noise Dust, vibration and noise related to our operations can impact people who live near our mine sites, and we have a range of measures to manage and reduce these impacts. Both Bengalla and New Acland maintain offsite dust and noise monitoring equipment that provides real time data to inform and adjust operations as necessary. We investigate all complaints, including those made via our environmental hotlines, and work to resolve issues in a timely manner. We provide regular reporting on environmental monitoring and detailed registers of complaints received and how they were handled are available on our website. Overall complaints to our Bengalla Mine declined by 16 per cent from the previous year. Complaints at both of our operations have been on a downward trend over the past five years. Number and Type of Complaints From Local Communities Complaint Topic Noise Air quality Blasting (overpressure, vibration, fume) Waste Visual (light) Other Total Bengalla New Acland Year to 31 July 2023 Year to 31 July 2022 Year to 31 July 2023 Year to 31 July 2022 3 5 25 0 0 4 37 11 1 31 0 0 1 44 0 0 1 0 0 0 1 0 0 0 0 0 1 1 Community Complaints Trending Down 80 70 60 50 40 30 20 10 0 FY19 FY20 FY21 FY22 FY23 Total complaints received – Bengalla Total complaints received – New Acland 41 New Hope GroupAnnual Report 2023Sustainability Report continued Our People Our people are fundamental to our success. We aim to foster a culture that reflects our core values – integrity, respect, responsibility, wellbeing, resilience and collaboration – and create safe workplaces where our people are supported to succeed. Health, Safety and Wellbeing Ours is a high-risk industry and we continually work to improve our systems, process and culture to maintain a safe working environment. This includes engaging our workforce through a range of formal and informal mechanisms to ensure the way we work is fit-for-purpose. Our approach is based on the complementary Plan, Do, Check, Act and High Reliability Organisation principles, which focus on proactively mitigating risk by analysing and avoiding high potential events and hazards. Recognising the connection between occupational health and hygiene, work- related injuries, fitness for work and overall wellbeing, we have both mitigating and reactive controls built into the way we operate and manage health and wellbeing. Key controls include medical assessments to detect and intervene in occupational diseases, hygiene monitoring, facilitating early return to work, and wellbeing awareness and education programs. Mental health and wellbeing are key contributors to physical health and safety and this year we established a new program, ‘Healthy Body and Mind,’ that provides science-based information and services to help our people and their families set and achieve healthy lifestyle goals. We also continued training programs to help our people identify signs of mental ill-health. These initiatives are in addition to our free and confidential Employee Assistance Program (EAP) which helps our people, and their families, address mental health and wellbeing concerns with experienced, independent specialists. 42 We continue to use technology to better analyse risk, and standardise our health, safety and wellbeing procedures and tools to improve effectiveness and collaboration across the Group. Last year, the All-Injury Frequency Rate (AIFR) was introduced as a primary measure of operational safety outcomes providing a holistic measure of minor and more serious injury outcomes. The 12-month moving average AIFR to 31 July 2023 was 27.10, down 8.7 per cent compared to 31 July 2022. We continue to monitor Total Recordable Injury Frequency Rate, which declined by 18.7 per cent from 2.61 to 2.12 in the year to 31 July 2023. Workplace Hygiene We value and seek a safe work environment where the risk to harmful exposures is eliminated or mitigated as far as reasonably practicable. We monitor and manage workplace hygiene through programs that identify health hazards and then reduce and prevent harmful exposures, developed by qualified hygienists. The methodology and results of monitoring activities are reviewed on an ongoing basis by cross- organisational focus groups to ensure new and existing controls are appropriately implemented, maintained, or updated where necessary. Personal protective equipment is provided to ensure exposure to hazards is kept to a minimum. Key Safety Indicators Continue to Improve 35 30 25 20 15 10 5 0 Year to 31 July 2021 Year to 31 July 2022 Year to 31 July 2023 Rate of recordable work-related injuries (TRIFR) All-injury frequency rate (AIFR) New Hope GroupAnnual Report 2023Eleven Years and Counting Without a Lost-time Injury at QBH During FY23, the team at QBH – comprising 20 full-time employees and about six casuals or contractors – has continued its impressive safety record, reaching 11 years without a lost-time injury (LTI). “At QBH our team all works together to unload trains, load ships, manage the coal stockpiles and maintain the equipment,” says QBH Port Operations Manager Michael Raff. “At QBH managing risks is central to our way of working. A lot of the team have been here for a long time so they’re experienced and have a good understanding of the risks and of the controls that need to be in place to manage them. “But we also know we can’t rely on past performance and that complacency is itself a key risk for us. That’s why we use pre-start meetings and safety interactions to stay vigilant on a daily basis, and periodically review our health and safety management practices.” “Eleven years LTI-free is great achievement – but for us, it’s just business as usual.” New Hope Group Health and Safety Performance Indicator Fatalities Total recordable injuries Rate of recordable work-related injuries (TRIFR) All-injury frequency rate (AIFR) Number of first aid incidents Number of medically treated incidents Number of lost-time incidents (LTI) (including disabling and restricted) Note: Data reported includes employees and contractors, at a Group level. *Figures updated to transfer classification of five restricted work injuries to appropriate category. Year to 31 July 2023 Year to 31 July 2022 Year to 31 July 2021 0 5 2.12 27.1 59 2 3 0 5 2.61 29.7 52 2 3 0 13 5.39 33.7 65 5* 8* 43 New Hope GroupAnnual Report 2023Sustainability Report continued Our People continued Attracting and Retaining a Diverse Workforce We value our people and the differences and similarities each individual contributes and are dedicated to building a fair and dynamic workplace. We also recognise our role in providing stable and rewarding employment in regional areas, as detailed in Communities. We offer training opportunities to support professional development and career ambitions and aim to fill new roles through internal promotions where possible. Through our Study Assistance Policy we provide partial financial support to employees seeking to study to attain formal qualifications, with nine people supported this year. Following the approval of New Acland Stage 3 this year, our total workforce increased by 32 per cent to 908, comprising 885 full-time and 23 part- time employees. Our total turnover rate this year was 13 per cent, with no redundancies during the period. This is a further decline compared to turnover of 26 per cent last year, which was affected by the redundancies relating to New Acland entering care and maintenance. Diversity We recognise the best business outcomes and innovations are driven by ideas and opinions from diverse teams recognising the difference individuals bring from their own backgrounds, values, perspectives, and experience. This year we outlined our commitment in our refreshed Diversity & Inclusion Statement, supported by a Diversity & Inclusion Framework. These guide our efforts to create a more consistent approach to increasing diversity of thought and experience across our business. The Framework targets five key enablers to drive practical action: • Physical environment • Education programs • Leadership, values and behaviours • Mentorship and development • Employment pathways. The Framework encompasses and builds upon our efforts to date, much of which have focused on female participation given the low gender diversity in our industry. Recognising the power of recruitment practices, last year we set a target, to recruit new employees of 40 per cent male:40 per cent female: 20 per cent any gender. The Queensland Government’s decision to approve New Acland Stage 3 means the project is no longer in care and maintenance, much to the delight of the workforce and local business community Watch video Click image above or scan the QR code to view This year we focused on optimising reporting systems and educating hiring managers on how to remove unconscious bias from recruitment processes. This year, 21 per cent of new recruits were female and 79 per cent were male, reflecting the return of many former employees to New Acland. Of the 45 people promoted during the year, 55 per cent were women. At 31 July 2023, total female workforce participation was 17 per cent, up from 15 per cent last year, with female participation increasing as the overall workforce grew. Further detail is available in our reporting to the Workplace Gender Equality Agency, available on our website. 44 New Hope GroupAnnual Report 2023From Truck Driving to Environmental Management, Expect the Unexpected Rebecca Murphy never wanted to do anything mainstream – so when she finished school in Tasmania, after trying out a few jobs, she got her heavy rigid truck licence. “There weren’t a lot of female truck drivers on the roads back then and a common mindset was ‘you couldn’t possibly drive trucks because you’re a female,’ so I thought, I’m going to prove you wrong,” she says. In her early 20s, Rebecca moved to Toowoomba, in search of different scenery – and work. She found a job doing delivery driving but wanted a bigger challenge. “Truck driving on the road was all well and good but I wanted to drive a vehicle that’s ten times the size – and I thought I’d have to go up to Central Queensland to get a job at a mine,” she says. “Then someone told me they were looking for operators at New Acland. Even though I’d driven past it every day on the way to work, I didn’t even know the mine was there! Rebecca started at New Acland as an operator back in 2011. “I loved the job and one of the highlights was getting the extra skill of being a grader operator,” says Rebecca. “I also had three lots of maternity leave – and now three kids – and New Hope was flexible in moving me into more suitable roles towards the end of my pregnancies.” But as the Stage 3 approval process dragged on, Rebecca was concerned about her family’s future. “We had a farm, young children, and we were committed to this area but by around 2018 I was worried about my job. I needed a back-up plan. So I started studying a Bachelor of Science part-time, listening to lectures while I was sitting in a truck, hoping to apply what I learned on our farm or to secure a job in the agricultural sector.” Meanwhile, there had been multiple rounds of redundancies at New Acland, and others were leaving voluntarily, to try to get secure roles elsewhere. “It was just a month or two before the last lot of people were set to finish up at site. A department manager got wind of the fact I was studying, and spoke to me about a role in the environmental team. “What I learned about soil and land management in my degree was relevant, but once I joined the team as an Environmental Officer in 2021, I changed the focus to be more on environmental science.” New Hope Group has supported Rebecca with flexible arrangements around exam times, and financially. And, she’s had a diverse experience that’s allowed her to put her knowledge into practice. “When I started, a large part of my role was in the field doing monitoring and sampling. We weren’t producing coal but we still had to meet our environmental approval conditions. “In August 2022 we got the new mining lease and new Environmental Authority, which meant we have to meet new conditions when it comes to managing our environmental impact. “Now I see how much is really involved in environmental management at an operating mine site. The knowledge you need just to function day-to-day – every regulation, every agency you have to deal with – is mind boggling. There’s something new every single day.” As for what’s next – Rebecca still has a year or so to complete her studies but she’s embraced her second career. “I’m a bit older than others starting a career in environmental management, and I think that makes me driven to keep progressing. The great thing at New Acland is we get exposure across a whole range of areas, so I can’t see myself getting bored any time soon. I never thought I’d go to uni so who knows what’s around the corner.” 45 New Hope GroupAnnual Report 2023Sustainability Report continued Our People continued New Hope Group Workforce Composition Indicator Number of employees Employees by gender Female Male Undisclosed Employees by location QLD NSW Employee turnover rate Female Male As at 31 July 2023 As at 31 July 2022 As at 31 July 2021 908 690 727 150 (17%) 758 (83%) 103 (15%) 587 (85%) 92 (13%) 635 (87%) Not disclosed Not disclosed Not disclosed 229 (25%) 679 (75%) 13% 14% 12% 114 (17%) 576 (83%) 26% 20% 27% 205 (28%) 522 (72%) 26% 57% 20% Note: Excludes site-based contractors and Board members. Diversity of New Hope Group Board and Workforce Indicator Board Executive Senior Management Management Frontline Employees Note: Excludes site-based contractors. As at 31 July 2023 As at 31 July 2022 As at 31 July 2021 Female 2 (28%) Male 5 (72%) Female 1 (17%) Male 5 (83%) 1 (33.3%) 2 (66.7%) 1 (33.3%) 2 (66.7%) Female 1 (20%) 0 (0%) Male 4 (80%) 2 (100%) 1 (10%) 9 (90%) 1 (12.5%) 7 (87.5%) 1 (9.09%) 10 (90.9%) 19 (28%) 48 (72%) 6 (13.3%) 39 (86.7%) 7 (14.9%) 40 (85.1%) 129 (16%) 699 (84%) 94 (14.9%) 535 (85.1%) 83 (12.5%) 579 (87.5%) 46 New Hope Group Annual Report 2023Workplace Behaviours and Escalating Concerns New Hope Group does not tolerate or accept any forms of inappropriate behaviour, as outlined in the Code of Conduct and Diversity and Inclusion Statement available on our website. We continue to implement the Sexual Assault and Sexual Harassment (SASH) action plan, developed last year. This year we released a new Appropriate Workplace Behaviours Policy, as well as an Issue Resolution Procedure. The Procedure provides clear guidance to employees to raise and address issues related to harassment, bullying, discrimination or other inappropriate behaviours. 47 New Hope GroupAnnual Report 2023Sustainability Report continued Responsible Business Conduct New Hope Group has various policies, codes and charters to ensure we conduct business responsibly and ethically. Key amongst these are: • our Code of Conduct, which provides our directors, executives and employees with a compass to guide daily decisions and actions • our ‘Speak Up’ (Whistleblower) Policy, which provides a framework for current and former officers, employees, associates, suppliers and others to report potential misconduct without fear of reprisal, dismissal or discriminatory treatment, and • our Anti-Bribery and Corruption Policy, described further below. Training on the Code of Conduct is provided annually to all employees and relevant contractors with training on other governance issues provided to personnel in relevant roles. Our people are encouraged to speak up if they have concerns. Among other internal controls our whistleblower hotline is an important channel for identifying misconduct or other issues. The hotline is maintained by an independent third- party, including both phone and online lodgement methods, and allows for anonymous disclosures. Further detail about our governance framework is provided in our Corporate Governance Statement, published annually in accordance with Australian Securities Exchange guidelines. The policies and codes referred to in this section, are available on the Corporate Governance section of our website. Forced Labour Forms of modern slavery, such as forced labour, child labour, debt bondage, servitude, human trafficking and deceptive recruiting for labour or services are a violation of human rights, are against the law and are completely at odds with New Hope Group’s Core Values. Our stance on modern slavery, child labour and slavery-like practices is set out in our Modern Slavery Policy available on the Corporate Governance section of our website. We engage reputable suppliers and obtain contractual assurances and undertakings in relation to their labour practices. Our ‘Speak Up’ (Whistleblower) Policy specifically encourages disclosure of any suspected instances of forced labour, human trafficking or slavery-like offences in our operations and supply chains. Further detail is available in our Modern Slavery Statement, published annually in accordance with the Modern Slavery Act 2018 (Cth) and available on the Corporate Governance section of our website. The next Statement is due for publication in January 2024. Freedom of Association and Collective Bargaining All employees have the right to form or join a trade union, to bargain collectively and to engage in trade union activities. Under Australia’s industrial relations framework, enterprise agreements (EAs) are negotiated on a collective basis with employees and their bargaining and union representatives. New EAs are usually negotiated every three or four years and final agreements are approved by and registered with the Fair Work Commission and made publicly available. EAs are in place across all of our major operations, with a total of 66 per cent of the employed workforce currently covered by a registered EA. Anti-bribery and Corruption Our Anti-Bribery and Corruption Policy prohibits the giving and receiving of money or other benefits to secure improper influence or benefits. There is no exception for transactions commonly known as ‘facilitation payments.’ In addition, the Code of Conduct prohibits giving or receiving gifts over a modest threshold value without approval. The Code also requires all conflicts of interest and potential conflicts of interest involving directors or employees to be formally declared. 48 Annual training on bribery and corruption is provided to employees in relevant roles, with 55 employees completing the training this year. There were no confirmed incidents of bribery or corruption involving the Group during the year. Payments to Governments New Hope Group is a substantial contributor to federal, state, and local governments through the payment of taxes, royalties and council rates – and, as with other aspects of our business, we are transparent about our obligations and our contributions. See our Tax Contribution Report for more detail. Public Policy and Political Donations New Hope Group is a full member of the Minerals Council of Australia and the Queensland Resources Council, and Bengalla is a member of the New South Wales Minerals Council. These industry bodies advocate on behalf of their members in the minerals and resources sectors. In general, we support the positions put forward by these associations. From time to time, we also contribute to policy development through formal consultation processes. The New Hope Board must approve any political donations. No political donations were made during the year. When donations are made, they are disclosed in line with applicable state and federal requirements. New Hope GroupAnnual Report 2023Privacy and Cybersecurity To maintain the integrity and security of confidential information, and ensure a secure technology environment, we regularly review security practices to ensure sound governance and ensure we have appropriate measures in place to detect, respond and recover from potential attacks. This includes ongoing cybersecurity training, to ensure our people are aware of and can respond to threats. This year we updated our Privacy Policy, which sets out how we handle personal information. This policy builds upon the principles for our people around managing privacy and cybersecurity matters, as outlined in our Code of Conduct. New Hope Group had no reportable privacy data breaches in the year. Compliance As noted in the Directors’ Report, Bridgeport (Surat Basin) Pty Ltd received the following Penalty Infringement Notices (PINs) from the Queensland Department of Environment and Science during the reporting period:   • PIN for failure to apply for a new Estimated Rehabilitation Cost (ERC) decision ($3,446)   • PIN in relation to contravention of a condition of an Environmental Authority ($13,785), being the above failure to apply for a new ERC decision.   Bridgeport has since applied for, and received, an ERC decision.  Additionally, DES issued an Environmental Protection Order to Bridgeport Energy (Qld) Pty Ltd (BEQ). The Order required BEQ to rehabilitate certain exploration wells in a former petroleum exploration permit (ATP805). BEQ has since carried out the rehabilitation activities in accordance with the terms of the Order. 49 New Hope GroupAnnual Report 2023Tax Contribution Report 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. • We have a low risk threshold in respect of taxation matters. • Our 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 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 KMP 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: https://newhopegroup. com.au/corporate-governance/. 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. 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. We are pleased to present its Tax Contribution Report for the financial year ended 31 July 2023. We consider that this disclosure, as a ‘large’ business under the Voluntary Tax Transparency Code, assists stakeholders in understanding its position as a responsible corporate taxpayer and is a key part of its social and economic responsibility. Our guiding principle in relation to taxation is to pay the right amount of tax at the appropriate time. We will comply with all tax obligations and engage in a constructive manner with the tax authorities. Our 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. In line with the record earnings performance in the 2023 financial year, total tax contributions increased to $641.4 million from $626.5 million in the previous financial year. Effective Tax Rate 29.6% 2022: 29.8% Corporate Tax Payable $377.3m 2022: $389.0m Mining Royalties Paid $210.1m 2022: $178.8m 50 New Hope GroupAnnual Report 2023Numerical Reconciliation of Accounting Profit to Income Tax Expense Year ended Profit before income tax Income tax calculated at 30% Tax Effect of amounts not deductible in calculating taxable income Non-assessable accounting gain from property disposal Net gain from Remeasurement of Convertible Debt Non-assessable interest relating to convertible notes Other non-temporary items Under provision provided in prior year Income Tax Expense Effective Tax Rate Tax Contributions Summary (’000) $6,881 $1,015 $37,600 $16,631 $377,654 $6,236 $1,193 $38,115 $12,907 $386,338 2023 Total $652,394 2022 Total $626,540 $212,613 $181,751 Corporate Tax Royalties1 Employee Taxes Withheld Payroll Tax Fringe Benefits Tax Other Taxes, Rates and Levies 1. Mining Royalties includes amounts paid to third party landholders in line with State legislation requirements. 2023 ’000 2022 ’000 Variance 1,544,983 1,400,638 10.3% (463,495) (420,191) - 5,477 - (462) 898 3,334 - (614) (1,805) 1,647 457,582 417,629 9.6% 29.6% 29.8% (0.02%) International Related Party Dealings Our 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. 51 New Hope GroupAnnual Report 2023Directors’ Report The Directors present their report on the consolidated entity consisting of New Hope Corporation Limited (‘the Company’ or ‘New Hope’) and its controlled entities (‘the Group’). Directors The following persons were Directors of New Hope during the year and up to the date of this report: • Robert D. Millner AO • Thomas C. Millner • Jacqueline E. McGill AO • Lucia A. Stocker • 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, investment in coal mines, agriculture and oil and gas development and production. Highlights • Record financial performance: – Underlying EBITDA1 result of $1,746.6 million, an increase of 11 per cent (2022: $1,577.4 million); – Net profit after tax of $1,087.4 million, an increase of 11 per cent (2022: $983.0 million); • Net cash from operating activities of $1,524.8 million, an increase of 34 per cent (2022: $1,138.6 million), and closing cash of $730.7 million (2022: $715.7 million); • Commencement of New Acland Stage 3 operations after being granted all primary approvals; • 7.2Mt of saleable coal produced, representing a decrease of 9 per cent (2022: 7.9Mt); • 2022 fully franked Final Dividend of $271.5 million, representing 31.0 cents per share, and fully franked Special Dividend of $218.9 million, representing 25.0 cents per share was paid to shareholders during the period; • 2023 fully franked Interim Dividend of $261.6 million, representing 30.0 cents per share and a fully franked Special Dividend of $87.1 million, representing 10.0 cents per share was paid to shareholders during the period; • NHC closing share price at 31 July 2023 of $5.31 (2022: $4.39), representing a 21 per cent increase; • Since the commencement of the on-market buy back on 18 November 2022 to 31 July 2023, a total of 37.1 million Ordinary Shares have been bought, for a total value of $192.4 million; and • Completion of the A$200 million Senior Convertible Note repurchase, originally due 2026 with no further Notes remaining outstanding at 31 July 2023. 52 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Statutory Revenue Statutory Profit after tax Underlying EBITDA1 Impairment of Oil and Coal Exploration and Evaluation Assets Group Redundancies Net Liquidation Related Expenses² Net Gain from Remeasurement of Convertible Debt Strategic Growth and M&A Total Non-Regular Items EBITDA Financial Income/(Expenses) Depreciation and Amortisation Statutory Profit before Tax Net Profit before Tax and before Non-Regular Items1 2023 $000 2022 $000 2,754,498 2,552,395 1,087,402 983,009 1,746,580 1,577,357 (64,202) – (37,783) 17,690 – (4,989) (5,491) (9,823) – (650) (84,295) (20,953) 1,662,285 1,556,404 24,273 (14,630) (141,574) (141,136) 1,544,984 1,400,638 1,629,279 1,421,591 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. Net Liquidation Related Expenses comprise of total legal settlement, legal expenses and insurance recoveries. Operating and Financial Review The Operating and Financial Review for the Group for the financial year is set out on pages 14 to 23, and forms part of this Report. Risk Management The Company has a robust Risk Management Framework overseen by the Audit and Risk Committee (ARC), the Sustainability Committee (SC), and the Board of Directors. The Framework assists the Company to identify, classify, document, report and manage its risks. 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 Framework requires that all significant risks have a specific documented action plan and mitigation measures, and that updates are periodically provided to the Board of Directors. Three Levels of Management and Oversight Levels of Management and Oversight Responsibility Primary Accountability Business Units Identify, classify, document, report and manage risks. Management Oversight Functions Internal Audit Provides the risk management framework, tools and systems to support effective risk management. Management Provides assurance on the effectiveness of governance, risk management and internal controls. Board, Board Committees and Management 53 New Hope GroupAnnual Report 2023Directors’ Report continued Risk Category Risk Summary Risk Management Approach Social licence to operate A number of stakeholders have interest in the impact our operations have on the surrounding environment and the communities in which we operate. The Company is subject to stringent regulation and reporting obligations spanning multiple government jurisdictions and departments. There is an increasing trend of negative sentiment toward the coal industry. Failing to adequately acknowledge and address the interests of these stakeholders could negatively impact the Company, through constraints placed on existing operations and/or, compromised ability to secure, maintain or renew the regulatory approvals required to continue operating as planned. Health and safety There are inherent health and safety risks in the coal mining industry and across the Group. Critical health and safety hazards facing our workforce include, but are not limited to, working at heights, confined spaces, hot works, vehicle interactions, electric shock, spontaneous combustion, fires, crushing, entanglement, inundation, and psycho-social hazards. Environment The nature of the Company’s activities poses potential risks to the environment. These include, but are not limited to: • Environmental degradation and pollution such as oil spills, excessive dust emissions, chemical spills, uncontrolled water discharge, carbon/greenhouse gas emissions. • Impacts on native title and cultural heritage, such as unapproved clearing, operational activities outside of approved boundaries. • Biodiversity destruction such as impacts to flora and fauna, failing to adequate rehabilitate and implement closure plans. There may be a shortfall or delay in achieving planned ROM rate step changes due to mining and infrastructure constraints. This could lead to a delay in planned revenue and increased costs to address constraints. The approvals and regulatory environment may restrict our ability to secure Bengalla exploration approvals resulting in an inability to capture long term upside beyond 2037. Bengalla Joint Venture The Company has developed valuable and longstanding relationships with key stakeholder groups and is well respected in the areas that we operate. Many of these stakeholder groups independently advocate on behalf of the Company which is a critical component in developing relationships in new areas of operation or with emerging stakeholder groups. The Company continues to embed its ‘responsible operator’ philosophy with a strong focus on its relationships and engagement with local communities. The Company has developed a community needs analysis and engages appropriately with qualified experts to both manage the underlying risks and to engage proactively and strategically with stakeholder groups. A variety of systems are used to manage and report upon the Company’s performance against relevant obligations, and disclosure against accepted standards as they continue to mature. The health and safety of the Company’s employees, contractors and the communities in which we operate is of the utmost importance. Our core objective is to provide a safe and healthy work environment that ensures all people go home at the end of each day unharmed. This is embedded in our Company values, behaviours and ‘responsible operator’ philosophy. A variety of systems and processes, including the Company’s critical risk program, are applied to prevent harm, promote safety and enhance health across the Company. Standard operating procedures are applied at a site level to manage health and safety risks and regular assurance reviews are undertaken to ensure these controls are applied and working in the manner intended. Health and safety performance is continually measured and reported to Executive KMP and Board of Directors. The Company has strong systems and processes in place at a corporate and site level to manage potential environmental risks. Continuous improvement initiatives are applied to enhance the Company’s environmental culture and practices. The Company is focussed on embedding a critical risk program for environmental matters. A decarbonisation strategy has been developed and is embedded in the Company’s overall strategic direction. Environmental performance is continually measured and reported to the Executive KMP and Board of Directors. The Company applies a rigorous and well documented due diligence process using a mix of internal and external subject matter experts prior to making any investment decisions. All significant project development transactions require approval from the Board of Directors. The Company regularly reviews its strategic direction in the context of external macro factors. Bengalla Mine’s project budget has been approved and a dedicated project team is in place. Initial approval to perform exploration activities has been obtained and the Company continues to engage with all relevant stakeholders. The Company continues to embed its ‘responsible operator’ philosophy. 54 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Risk Category Risk Summary Risk Management Approach New Acland expansion New Acland Stage 3 may experience further delays as a result of a legal challenge against the Queensland Government’s decision to grant an AWL. The AWL approval has been granted by the Queensland Government. An independent review has affirmed the original decision to grant the New Acland Mine Stage 3 AWL. This approval is critical to ensuring operations continue beyond Stage 2 as reserves on the existing lease have been depleted. The Government has confirmed that Stage 3 stacks up environmentally, socially and financially. Detailed project and capital works program planning has been undertaken and a dedicated project team is in place. Dust and noise modelling and studies have been completed to understand potential impacts on operations as a result of reduced operating hours. 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. There may be a delay in achieving the required run rate due to delays in delivering capital works programs and/or operational constraints (such as dust and noise). This could result in delays to planned revenue, increased costs to address constraints and damage to our reputation. Operational performance The ability to achieve our operational targets may be compromised by a range of factors internal and external to the Company. Our operational framework provides the structure, processes, oversight and assurance to support achievement of operational targets. The Company is highly dependent upon the availability and effectiveness of key infrastructure in order to produce and bring products to market. 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. A catastrophic plant and equipment failure could disrupt operations for an extended period of time. A material non-conformance against approval and permit conditions may require operations to shut down while investigations take place and issues are rectified. Reserves and resources may be below expectations leading to reduced life of mine. Our key business partners may underperform. These risks have the potential to result in increased costs, delayed or loss of revenue, and damage to our reputation. Attraction and retention of required talent in a tight labour market, coupled with growing negative sentiment toward the coal industry may present a challenge to the Company. Accessing a diminishing talent pool may lead to the need to recruit a less experienced workforce which would require additional training, supervision and support. This may result in additional costs to the Company, constraints on achieving growth targets, potential inefficiencies and heightened safety concerns. 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. People Market Risk The Company undertakes timely and effective preventative maintenance as well as regular third-party inspections of key plant and infrastructure to minimise the risk of an unforeseen failure. The Company actively participates in a comprehensive insurance program to ensure assets are insured for appropriate value. Operating controls are in place to ensure approval and permit conditions are complied with. Geology processes, a drilling program and mine planning processes seek to provide a level of certainty over Resources and Reserves in accordance with JORC code requirements. The Company has strong human resources processes and systems in place to support the recruitment and retention of required personnel. Leaders in the business engage with the workforce and community on a regular basis, to communicate the Company’s vision and present a balanced view of the coal industry and market forces. Programs are in place to support various pathways to employment with the Company including local communities and schools. 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’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. 55 New Hope GroupAnnual Report 2023Directors’ Report continued Climate Related Risks The management of climate related risk (threats and opportunities) is integrated with the Company’s overall Risk Management Framework which defines requirements for risk identification, assessment, management and reporting as outlined above. The Company considers climate related risks across short (up to 3 years), medium (3-10 years) and long term (>10 years) time horizons and incorporates climate change matters and risk assessment outcomes in its strategic and business planning processes. Internal and external expertise is utilised to support the Company’s approach, as required. In identifying potential climate related risks, the Company considers the themes and structure provided by the Task Force on Climate- related Financial Disclosures (TCFD) recommendations and considers both physical and transition risks. The Company’s approach to, and understanding of, climate related risks will continue to evolve and mature over time. The following is the Company’s view of the material climate related risks impacting the Company over the short-medium-long term. The Company recognises there are elements outside of its control and that its climate change risk profile may change at any time depending on external macro factors such as economic conditions, global conflicts, political landscape, climatic data and policy matters. Therefore, it is a requirement of the risk management framework to regularly review the Company’s climate related risks. Risk Category and Time Horizon Transition – Policy and Legal Short-Medium- Long Term Risk Summary Risk Management Approach Changing regulations and policies governing mining and/or the use of coal, the introduction or expansion of carbon pricing and emissions caps, and any inability to obtain sufficient carbon offsets may impact our ability to: • develop new coal projects, • expand existing operations beyond current mine plans, and/or • continue existing operations at planned capacity for the duration of approved mine life. This could result in loss of planned revenue, loss of opportunity for additional revenue, loss of asset value, increased expenditure associated with meeting new approvals or conditions, and increased expenditure associated with regulatory carbon pricing mechanisms and sourcing carbon offsets. The Company could be subject to climate related litigation and activist action which may lead to injunctive actions against the production of thermal coal, increased costs for defending legal claims and securing environmental and development approvals, and damage to the Company’s reputation. The Company continues to proactively monitor the domestic and international policy environment, including social and government appetite for changes that may impact the Group, and makes submissions directly or through industry bodies to policy proposal consultation processes. Any new project and any expansion of existing operations will be subject to detailed strategic and economic assessment prior to any final investment decision. Strategic planning and risk management practices consider potential short-medium-long-term climate related impacts, and modelling and sensitivity analysis is undertaken to understand future demand scenarios and to test investment opportunities. The Company’s largest assets (Bengalla Mine and New Acland Mine) have long-dated approvals allowing mining to continue in accordance with mine plans without the need for potentially long and costly mine extension approvals. The Company conducts progressive rehabilitation and has rehabilitation provisions in place which, together with the Company’s strong financial position, will enable closure and rehabilitation obligations to be met. In response to the developing regulatory landscape and stakeholder expectations, the Company has implemented an Enterprise Decarbonisation Framework which sets out processes and accountabilities for carbon reduction initiatives across the Group. 56 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Risk Category and Time Horizon Transition – Market Medium-Long Term Transition – Technology Medium-Long Term Risk Summary Risk Management Approach Shifts in the supply and demand of thermal coal may occur for various reasons, including due to regulatory and policy changes relating to coal consumption or energy generation, and substitution of thermal coal with lower emissions/alternate energy. This could result in reduced demand for the Company’s products, loss of planned revenue and increased costs associated with establishing supply to new markets. Failing to adequately anticipate and act on market trends and signals (including the pace of change) in the energy transition may: • impact the Company’s ability to capitalise on opportunities, and/or • require the business to significantly pivot, bring forward transformation strategies and/or prematurely cease or curtail operations. This could result in increased costs, loss of potential revenue, loss of asset value and wasted expenditure. The Company’s ability to materially decarbonise its operations using technological solutions is likely to be constrained in the short and medium term due to: • a lack of proven or economically feasible technology options, • a lack of availability and/or purchasing power relative to larger operators, and/or • technology not meeting regulatory requirements for carbon offset generation. Failure to satisfy decarbonisation targets under the Australian Government’s Safeguard Mechanism (including because of a lack of feasible technology solutions) could result in increased costs for the purchase of offsets and damage the Company’s reputation. The Company continues to foster strong customer relations and to work closely with key customers to understand their short, medium and long-term demand forecasts. Scenario analyses are undertaken to understand trends and market signals, and their potential impact on the Company. This includes stress- testing its portfolio and business strategy against International Energy Agency (IEA) scenarios and consideration of opportunities for upside returns if supply is constrained. The Company conducts progressive rehabilitation and has rehabilitation provisions in place which, together with the Company’s strong financial position, will enable closure and rehabilitation obligations to be met. The Company’s largest assets (Bengalla Mine and New Acland Mine) produce high calorific value coal which is forecast to remain in demand for remaining asset life (based on current mine plans). The Company continues to monitor technology developments that have application to the mining and broader energy industries to determine potential suitability for the Company. Mine fugitive and hydrocarbon fuelled equipment emissions constitute almost all of the Company’s scope 1 emissions profile. Feasible opportunities for capturing fugitive emissions at our mine sites remain challenging and, if they become economic, would likely only be implemented over a medium or long-term time horizon given the scale of activity required for construction and implementation of capture infrastructure and systems. Non-hydrocarbon fuelled heavy equipment mining fleet will likely only become economic and available at scale to the world-wide mining industry over a medium or long-term time horizon. However, the Company is undertaking feasibility studies and will continue to assess potential opportunities for fugitive emissions capture projects and fleet replacement. The Company is progressing offset acquisition and generation strategies to underpin compliance with mandatory carbon reduction targets to the extent that direct abatement cannot be economically implemented. 57 New Hope GroupAnnual Report 2023Directors’ Report continued Risk Category and Time Horizon Transition – Reputation Short-Medium- Long Term Risk Summary Risk Management Approach Support from key stakeholders (such as governments, community, suppliers, landowners, investors, potential employees) may deteriorate as a result of negative perceptions of the thermal coal industry. The Company seeks to be transparent about climate related impacts, risks and opportunities to investors, employees (and potential employees) and stakeholders. Lenders, insurers and other suppliers may refuse to deal with thermal coal producers due to the adoption of policies prohibiting commercial dealings with fossil fuel exposed industries. This could result in difficulties attracting and retaining required financial services, supplies and expertise. Lack of public support for mining and energy intensive industries could impact governments’ willingness to approve new projects. Physical – Acute Short-Medium- Long Term An increase in the frequency and intensity of extreme weather events may disrupt mining, haulage and port activities due to surface flooding, and damage to infrastructure and equipment. This could result in delays to planned revenue and increased costs to repair damaged assets and infrastructure. The Company has conducted community needs analysis and has developed community and stakeholder engagement strategies and plans. The Company has a dedicated procurement function for the acquisition of goods and services required for business and considers procurement needs over the short, medium and long term. The Company regularly reviews capital management plans to manage anticipated future funding and insurance requirements. Business continuity and crisis management planning occurs across the Company. Asset management plans are in place and supported by standard operating controls. At installation or upgrade, infrastructure and equipment are subject to fit for purpose specification and operating requirements, each of which are informed by relevant regulatory requirements, design standards, and engineering and specialist advisor input. Sites maintain water management plans which include procedures for management of surface water during periods of high rainfall and strategies to manage water supply during periods of drought. 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. 58 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Matters Subsequent to the End of the Financial Year New Acland Stage 3 Stay Application On 14 August 2023, OCAA withdrew its stay application, providing the Company with certainty to progress the New Acland Stage 3 ramp-up plan. The withdrawal followed discussions between both parties where the Company confirmed the removal of overburden and mining of coal from the yet to be developed Manning Vale West Pit is not expected before 1 September 2024 under the mine’s existing Stage 3 ramp-up plan. Resolving the stay application with OCAA allows the Company to confidently commence mining coal from the Manning Vale East Pit (which is the first area under development since the Queensland Government approved the project in October last year) and begin construction of the Lagoon Creek Crossing to progress development and mining of the planned adjacent Willeroo Pit. On 14 September 2023, first coal was extracted from the Manning Vale East Pit. AL19 Purchase On 4 August 2023, the Company secured the purchase of the AL19 tenement in West Muswellbrook. NSW Coal Royalty changes On 6 September 2023, the NSW State Government announced changes to the coal royalty rates effective 1 July 2024. The current rate paid by Bengalla, the Company’s NSW operation, will increase from 8.2 per cent, to 10.8 per cent. Initial financial modelling on the increase suggests an immaterial impact to the cost profile of Bengalla. Likely Developments and Expected Results of Operations Safeguard Mechanism Reforms to the Australian Government’s Safeguard Mechanism took effect on 1 July 2023. The Company’s ability to meet the requirements of the reformed Safeguard Mechanism will be reliant on the availability of cost-effective commercially available technologies to reduce CO2-e emissions as well as access to Australian Carbon Credit Units (ACCUs) for surrender. The activities of the consolidated entity in the 2024 financial year are expected to be similar to those of the 2023 financial year. The Company will disclose further information on likely developments in the operations of the consolidated entity and the expected results of operations as appropriate. Corporate Governance Statement The Company’s Corporate Governance statement can be accessed on the New Hope Corporation website at: https://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 accessed on the New Hope Corporation website at: https://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 Sustainability Report will be provided as a section within the Company’s Annual Report. Statutory Compliance Environmental Compliance During the 2023 financial year, the Company received two Penalty Infringement Notices, in relation to contravention of a condition of an Environmental Authority ($13,785) and failure to apply for a new Estimated Rehabilitation Cost decision ($3,446). The Company also received an Environmental Protection Order for failure to comply with a rehabilitation direction. The Company was not prosecuted for any breach of environmental laws during the 2023 financial year. 59 New Hope GroupAnnual Report 2023Directors’ Report continued Information on Directors Robert D. Millner AO Non-Executive Chairman Todd J. Barlow Non-Executive Director Experience Robert D. Millner AO is Chairman of the associate company, Washington H. Soul Pattinson and Company Limited (WHSP). Robert 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. Robert was included in the King's honours, announced 12 June 2023 for his services to business, to rugby union as an administrator and to the community through philanthropic contributions. 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 Telecom Limited – Appointed 2020 • TUAS Limited – Appointed 2020 • Aeris Resources Limited – Appointed 2022 Former Listed Directorships in the Last Three Years • Australian Pharmaceutical Industries Limited – Appointed 2000, resigned July 2020 • TPG Corporation 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 • 6,022,744 Ordinary Shares in New Hope Corporation Limited (comprising 279,559 shares directly held and 5,743,215 shares held through family related interests). • NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited Experience Todd J. Barlow joined the Board of New Hope Corporation Limited on 22 April 2015. Todd has been 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. Todd 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 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 Special Responsibilities • Chair of the Nomination and Remuneration Committee (ceased 22 June 2023) • Member of the Nomination and Remuneration Committee • Member of Sustainability Committee • Member of the Audit and Risk Committee Former Listed Directorships in the Last Three Years • NIL 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 60 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Jacqueline E. McGill AO Independent Non-Executive Director Thomas C. Millner Non-Executive Director Experience Jacqui McGill AO was appointed as a Non-Executive Director of the Company in 2020. She is a highly accomplished Executive and Non-Executive Director with a career spanning over 30 years across a range of commodities. Jacqui is a Non-Executive Director of Goldfields, 29Metals, the Royal Automobile Association of South Australia, and a trustee of Adelaide Festival Centre. Experience Thomas C. Millner is Director and Portfolio Manager of Contact Asset Management. He is also a Non-Executive Director of Washington H. Soul Pattinson and Company Limited. Tom has over 20 years of experience within the financial services and funds management industry and over 10 years as a Director of Australian publicly listed companies. Tom joined the Board of New Hope Corporation Limited in 2015. During her executive career, Jacqui 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. He has a Bachelor of Industrial Design degree, a Graduate Diploma in applied Finance and is a Fellow of the Financial Services Institute of Australasia and graduate of the Australian Institute of Company Directors. Jacqui 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 listing 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 the Last Three Years • NIL Special Responsibilities • Chair of the Sustainability Committee • Member of the Audit and Risk Committee • Member of Nomination and Remuneration Committee Interests in Shares and Options • 70,000 Ordinary Shares in New Hope Corporation Limited • NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited Other Current Listed Directorships • Washington H. Soul Pattinson and Company Limited – Appointed 2011 Former Listed Directorships in the Last Three Years • NIL Special Responsibilities • NIL Interests in Shares and Options • 5,674,368 Ordinary Shares in New Hope Corporation Limited (comprising 21,153 shares directly held and 5,653,215 shares held through family related interests). • NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited. 61 New Hope GroupAnnual Report 2023Directors’ Report continued Information on Directors continued Ian M. Williams Independent Non-Executive Director Steven R. Boulton Independent Non-Executive Director Experience Ian M. Williams was appointed as a Non-Executive Director of the Company on 1 November 2012. Ian is Chair of Lindsay Australia and NXT Building Group, a Director of National Group Corporation, Spicers Paper, Softbank Robotics Australia, Stoddard Group and Baseball Australia and Vice President of the Australia Japan Business Co-operation Committee. Experience Steven R. Boulton joined the Board of New Hope Corporation Limited in 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. Steven has served on more than 20 boards during his career and is currently a Director of Tri-Star and Chairman of Sea Swift. Ian is an experienced Non-Executive Director and was a partner of international law firms Herbert Smith Freehills and Ashurst for 20 years. Ian holds Bachelor’s degrees in laws and economics from Sydney University and a post Graduate Diploma from Oxford University in Politics, Philosophy and Economics. He is also a graduate from the Australian Institute of Company Directors and represented both Australia and Japan in rugby union. Steven has a Graduate Diploma in Applied Corporate Governance, a Bachelor of Business (Business Management & HR Management) degree and a Master of Technology Management. Steven is a Fellow of the Australian Institute of Company Directors, the Governance Institute of Australian and Australian Institute of Managers and Leaders. He is also a Certified Professional of the Australian Human Resources Institute. Ian has written extensively on Japan-Australia business and investment relationship and in 2016 was awarded Japanese Foreign Minister’s Commendation for service to the Japan Australia relationship in business and sport. Other Current Listed Directorships • Lindsay Australia Limited – Appointed September 2021 Former Listed Directorships in the Last Three Years • KGL Resources Limited Special Responsibilities • Chair of the Audit and Risk Committee • Member of the Sustainability Committee • Member of Remuneration and Nomination Committee • Chair 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 Other Current Listed Directorships • NIL Former Listed Directorships in the Last Three Years • NIL Special Responsibilities • Chair of the Nomination and Remuneration Committee (effective 22 June 2023) • Member of the Audit and Risk Committee 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 62 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Company Secretary Dominic H. O’Brien Dominic H. O’Brien joined the Company on 1 December 2020 as General Manager, People and Legal. Dominic 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 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 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. Lucia A. Stocker Independent Non-Executive Director Experience Lucia A. Stocker was recently appointed as an Independent Non-Executive Director on 1 February 2023. Lucy is a highly recognised industry leader who has over 25 years combined experience of mining, engineering and strategic planning, as well as founding and operating a successful privately owned agricultural business. She is currently an independent consultant and has previously been a Non-Executive Director of Perth NRM. Lucy holds a Master Business Administration (Technology Management, Deakin La Trobe), Bachelor of Engineering (Mining) Honours (University of Wollongong) and is a graduate of the Australian Institute of Company Directors. Other Current Listed Directorships • NIL Former Listed Directorships in the Last Three Years • NIL Special Responsibilities • Member of the Sustainability Committee (effective 22 June 2023) Interests in Shares and Options • 9,500 Ordinary Shares in New Hope Corporation Limited. • NIL Options or Performance Rights over Ordinary Shares in New Hope Corporation Limited. 63 New Hope GroupAnnual Report 2023Directors’ Report continued 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 (Executive KMP) in accordance with section 300A of the Corporations Act and associated regulations. Executive 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 Executive KMPs in office at any time during the 2023 financial year are outlined below: Positions Held Commenced Ceased 22 Jun 2023 01 Dec 1995 27 Nov 1998 22 Apr 2015 24 Apr 2016 22 Jun 2020 17 Nov 2020 16 Dec 2015 01 Nov 2012 25 Nov 2019 02 Sep 2019 29 July 2022 22 Jun 2023 01 Feb 2023 14 Feb 2022 14 Feb 2022 01 Feb 2022 01 Feb 2022 Name Directors Robert D. Millner AO Todd J. Barlow Non-Executive Director Chair Non-Executive Director Chair of the Nomination and Remuneration Committee Jacqueline E. McGill AO Independent Non-Executive Director Chair of the Sustainability Committee Thomas C. Millner Non-Executive Director Ian M. Williams Steven R. Boulton Lucia A. Stocker Executive KMP Robert J. Bishop Independent Non-Executive Director Chair of the Audit and Risk Committee Chair of Controlled Subsidiary Independent Non-Executive Director Chair of the Nomination and Remuneration Committee Independent Non-Executive Director Chief Executive Officer (CEO) Rebecca S. Rinaldi Chief Financial Officer (CFO) Dominic H. O’Brien Executive General Manager (EGM) Company Secretary (CoSec) 64 New Hope GroupAnnual Report 2023 Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Remuneration Governance Identifying and retaining high calibre Directors and Executives with appropriate experience and capability is a primary driver of Company performance. Developing an appropriate remuneration strategy and a supportive governance framework is a key factor in ensuring employees are engaged and motivated to perform over the long-term. Company Remuneration Objectives Aligned to the Company’s Vision, Purpose and Core Values Attract quality Directors and Executives Deliver the Group’s short-term objectives Deliver sustainable and long-term Shareholder Value Remuneration Governance 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 maintaining overall responsibility and approval for the Executive KMP remuneration, it delegates oversight to the NRC to regularly review, report and make recommendations to the Board in relation to remuneration Nomination and Remuneration Committee Objectives: NRC provides recommendations on the Board’s membership and performance Provides recommendations on the Company’s policy and practices The NRC is authorised by the Board to: Perform the activities required to discharge its responsibilities to the Board; Determine the terms of engagement of any advisors it deems necessary; and Unrestricted access to company officers and executives, including requiring their attendance at NRC meetings Seek and consider advice from a wide range of sources Shareholders External remuneration consultants Other experts and independent consultants Legal advisors Management Independent surveys reviews, market information and reports Advice from other experts and independent consultants will typically cover Non-Executive Director fees, Executive KMP remuneration, pay structures and equity plans The Company 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 2023 financial year were made free from undue influence. 65 New Hope GroupAnnual Report 2023Directors’ Report continued Remuneration Report continued Review of Remuneration Arrangements During the 2023 financial year, independent remuneration advisors, Godfrey Remuneration Group Pty Ltd (GRG) provided information, advice and recommendations regarding Executive KMP remuneration, statutory reporting and disclosures, operation of the long-term incentive plan, and short-term incentive plan rules and associated documentation for Executive KMP and other eligible employees. Total professional fees paid (excluding GST) were $45,000. The material recommendations made by GRG which were approved by the Board during the 2023 financial year for implementation in the 2023 financial year or future periods related to: 1. Increases to Executive KMP Total Fixed Remuneration (TFR) effective from 1 February 2023 as follows: Executive KMP Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien Previous TFR $ Reviewed TFR $ 956,292 516,724 526,724 1,207,107 652,107 652,107 2. Revising STI award opportunity quantum and composition, including the introduction of a deferred element to STI award; and 3. Increasing LTI award opportunity quantum with total STI:LTI opportunity to be split 40:60 for CEO and 50:50 for other Executive KMP in respect of LTI grants for measurement periods commencing 1 August 2023. Name Fixed Pay STI – Cash STI – Deferred LTI Total Reward Percentage CEO Other Executive KMP Current Target % Current Stretch % Advised Target % Advised Stretch % Current Target % Current Stretch % Advised Target % Advised Stretch % 100 35 – 37 172 100 53 – 74 227 100 30 30 951 255 100 45 45 1901 380 100 33 – 33 165 100 49 – 65 214 100 30 30 601 220 100 45 45 1201 310 1. The increase in LTI will be effective for measurement periods commencing 1 August 2023. The changes made to Executive KMP remuneration recommended by GRG and approved by the Board as summarised above and further detailed in this Remuneration Report are the result of a detailed benchmarking analysis and are intended to ensure the market competitiveness of the Company’s remuneration practices for its Executive KMP. 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: https://newhopegroup.com.au/corporate-governance 66 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 77 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 Term of Agreement and Notice Period1 Current Executive KMP Base Remuneration Plus Superannuation Termination Payments2 Robert J. Bishop No fixed-term | 6-month notice period 1,207,1073 6-months’ base remuneration Rebecca S. Rinaldi No fixed-term | 3-month notice period 652,1073 3-months’ base remuneration Dominic H. O’Brien No fixed-term | 3-month notice period 652,1073 3-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 2023 and is reviewed annually by the Nomination and Remuneration Committee. 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 2023 financial year, the aggregate amount expended for Non-Executive Directors’ remuneration was at 66 per cent of this limit. Following the appointment of two new Directors to the Board in July 2022 and February 2023 respectively, which increased the Board composition to a total of seven Directors, the Board intends to seek shareholder approval at the 2023 AGM to increase the aggregate fee limit to $2,250,000. 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 Sustainability Committee and Audit and Risk Committee. Fees paid to Non-Executive Directors are set out in the table below. 20231 Chair Member 20222 Chair Member Board Audit and Risk Committee Sustainability Committee Nomination and Remuneration Committee Controlled Subsidiary 243,192 143,704 242,092 143,054 55,271 11,054 55,021 11,004 17,420 11,054 17,341 11,004 n/a n/a n/a n/a 33,163 n/a 47,374 33,013 1. On 1 July 2023, the superannuation guarantee percentage increased from 10.5 per cent to 11.0 per cent. 2023 fees include this increase for one month of the 2023 financial year. 2. 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. 67 New Hope GroupAnnual Report 2023Directors’ Report continued Remuneration Report continued Remuneration Structure – Executive KMP The following table summarises the Company’s policy and framework 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, Purpose and Strategy 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 utilisation of scorecards which include strategic annual objectives linking individual and company performance. Performance Measures Individual accountabilities that support the execution of Strategy. Gateways to performance assessment include: The Executive KMP receive a fixed amount which is recommended annually by the Nomination and Remuneration Committee and set by the Board. • Nil fatalities; • Nil serious environmental harm; • Nil serious cultural heritage harm; and 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 and the Executive KMP to drive the creation of long-term value. Performance hurdles are set by the Board over three-year periods to deliver sustained shareholder value. For the 2023 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; • Threshold EBITDA achieved. • Comparative costs control performance assessed by measuring ranking in the top 40 thermal coal mines in Australia; • Execution of strategic, capital management and Environment, Social and Governance (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. Individual performance indicators are based upon the short-term requirements of the role and the Company. Company KPIs which link performance to achievement of the short-term Strategy and objectives. Awards are payable 50% in cash following the release of the Annual Financial results upon the company gateway and company and individual KPIs being achieved. The balance 50% of award value is delivered in Restricted Rights which can be exercised into Ordinary Shares upon satisfying 12 months service condition. Delivery Competitive market based fixed remuneration comprising base salary, superannuation, and other non-cash benefits. 68 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Total Fixed Remuneration Structure TFR is based on the position, scope and leadership accountability of the Executive 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; • Rewards performance including actions and behaviours enabling value creation and drive 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 2023 financial year. CEO Other KMP 37% 39% 46% 27% 24% 27% Fixed TFR STI – At risk LTI – At risk 69 New Hope GroupAnnual Report 2023Directors’ Report continued Remuneration Report continued Variable Executive Remuneration – Short-Term Incentives Aspect Description Form of Award Awards are delivered 50% in Cash and 50% as Restricted Rights with vesting deferred for 12 months, subject to meeting a minimum service condition. Performance Period The Company’s financial year (12 months). STI Opportunity The target and maximum awards payable for Executive KMP are outlined below: CEO Other Executive KMP Opportunity as a % of TFR Target Stretch 60% 60% 90% 90% 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. 50% of determined STI award will generally be paid in cash in the month of October following the end of the performance period, with the balance granted as Restricted Rights with vesting deferred for 12 months, subject to meeting a minimum service condition. Gate To enable award and payment of STI to Executive 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 Board Discretion Dividend and Voting Entitlements 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. 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. Restricted Rights carry no entitlement to voting prior to being exercised into Ordinary Shares. At the time and to the extent Restricted 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 Awards vest pro-rata relative to the percent of the Performance 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, safety, wellbeing, risk and controls, environment and community measures. The Individual KPIs include specific safety, operational, capital management and strategic measures in addition to the level of demonstration of the Company’s Core Values and behaviours. KPI components are weighted. 70 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Short-Term Incentive Outcomes – Link to Performance Summary of 2023 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. 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. Measure Weighting Description Target Threshold Outcome Target Stretch Non-Financial Health, Safety, 18.40% Rewards continuous improvement on HSEC Environment and Community Risk, Audit and Controls 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. 13.60% 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 16% Rewards improvement to earnings Group Cost/ Tonne Overburden (Prime) Group Production 16% Rewards improvement to cost management 8% Rewards improvement to mine planning 8% Rewards improvement to production Total Company Performance 80% 67% Individual measures assess the efforts and effectiveness of actions and outcomes of Executive KMP focus on improvement in strategy, culture and people, diversity and inclusion, safety, risk management, sustainability, financial stability and value creation. Executive KMP Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien Target Weightings Threshold Outcome Target Stretch 20% 20% 20% 71 New Hope GroupAnnual Report 2023Directors’ Report continued Remuneration Report continued Summary of Company Financial Performance A snapshot of Company key performance indicators for the past five financial years is set out below: Performance Measure Revenue ($m) Underlying EBITDA ($m)1 Net profit/(loss) after tax ($m) Share price at year end (dollars per share) Basic EPS Diluted EPS Shareholder Dividends paid (cents per share) TRIFR AIFR2 Saleable Production (Mt) 2023 2,754 1,747 1,087 5.31 126.0 118.6 96 2.12 27.10 7.2 2022 2,552 1,556 983 4.39 118.1 106.0 37 2.60 29.72 7.9 2021 1,048 279 79 2.00 9.5 9.5 4 5.41 – 9.6 2020 1,084 (55) (157) 1.31 (18.9) (18.9) 15 5.93 – 11.3 2019 1,306 445 210 2.51 25.3 25.3 16 9.79 – 10.9 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. The company commenced tracking AIFR in FY22. 2023 Financial Year Performance Commentary Group safety performance measured by all injury frequency rate and total recordable injury frequency rate saw further material improvement extending the impressive improvement trajectory achieved in the previous financial year. Across the Group, there was increased focus on safety and wellbeing critical controls with targeted objectives and actions to mature critical risk programs materially achieved. Environmental incident frequency significantly reduced year on year. Community engagement activities and support increased during the 2023 financial year and the total community complaints declined further extending the reduction in the number of complaints year on year. The Nomination and Remuneration Committee (NRC) recommended, and the Board agreed that targeted health, safety, environment and community performance was achieved. Targeted improvements in risk management practices and maturity were achieved. The Enterprise Risk Management Framework was extensively reviewed and detailed risk appetite statements for multiple strategic priority areas were created. All risk registers underwent comprehensive review and new reporting frameworks to the Board and relevant Committees of the Board were implemented. Measured cyber risk test outcomes bettered targeted levels. Material internal audit actions were closed out timeously. The NRC recommended and the Board agreed that targeted risk, audit, and controls performance was achieved. The Group achieved stretch performance against targeted EBITDA and Overburden (prime) measures. Group production performance was adversely impacted by uncontrollable, extreme weather events and logistics disruptions during the first quarter. Reduced production against target together with inflation in uncontrollable costs resulted in an increase to the group cost/tonne measure. Consequently, production and cost performance targets were not achieved. The NRC calculated overall financial performance measures at 75 per cent of target. 72 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 2023 Financial Year Performance Commentary Consistent with the approach in the previous financial year, the Board established wholistic improvement objectives across a range of business functions and activities targeted towards operational, strategic, risk management, capital management and employee and community engagement priorities. Accountability for delivery rested with the CEO with specific areas of responsibility delegated to Executive KMP and other senior management roles. The collective actions and achievements of management and the Company are detailed elsewhere in this report but notable achievements in strategic priority areas include: • significant ongoing improvement in safety and wellbeing performance; • improved critical controls activities and risk management practices and maturity; • obtained all primary approvals for New Acland Stage 3 and executed initial mining activity ramp-up to plan; • strategic investment in Malabar; • successfully managed and pivoted the business as necessary in response to operational challenges; • disciplined cost control at Bengalla despite challenging weather conditions and inflationary pressures; • record total prime waste and total material moved at Bengalla providing strong foundation for increasing future output, managing planned dragline outages for maintenance and business resilience to future operational challenges; • successful execution of the 13.4Mtpa Bengalla Growth Project objectives; • successfully executed all capital management objectives; and • successfully settled the NEC/Colton litigation. The NRC recommended and the Board agreed that targeted individual performance objectives were met or exceeded. 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 2023 financial year: Executive KMP STI Target $ STI Maximum $ STI Payable $ Cash Benefit $ Restricted Rights1 STI Payable % of TFR Of Target STI STI Forfeited $ STI Forfeited % Robert J. Bishop 724,264 1,086,396 632,815 316,408 Rebecca S. Rinaldi Dominic H. O’Brien 391,264 391,264 586,895 341,861 170,931 586,895 361,424 180,712 62,579 33,807 35,741 52% 52% 55% 91,448 49,408 29,839 13% 13% 8% 1. The Share Price used to calculate the grant of Restricted Rights was based on a volume weighted average price (VWAP) of $5.0561 over the 20 trading days preceding 1 August 2023. Profit Share Payments In light of the record profit achieved during the financial year, the NRC recommended and the Board determined to make special profit share payments to all employees in the Group who had been employed at least 3 months (pro-rata) and who performed at a meets expectations performance level as a minimum. The Board considered it appropriate to exercise a discretion to provide all qualifying employees with a special profit share payment additional to determined STI 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 profit share payments paid to all qualifying employees in the Group were structured as either a fixed cash payment or a cash payment calculated as a percentage of total fixed remuneration, depending upon role in the Group. Profit Share Payments at the same fixed percentage TFR 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. Name Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien Profit Share Payment $ Percentage of TFR % Restricted Rights Awarded1 60,355 32,605 32,605 5% 5% 5% 11,937 6,448 6,448 1. The Share Price used to calculate the grant of Restricted Rights was based on a volume weighted average price (VWAP) of $5.0561 over the 20 trading days preceding 1 August 2023. 73 New Hope GroupAnnual Report 2023Directors’ Report continued Remuneration Report continued Variable Executive Remuneration – Long-term Incentives Aspect Description Instrument 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 Executive KMP for the 2023 financial year are outlined below: CEO Other Executive KMP Opportunity as a % of TFR Target Stretch 37% 35% 74% 70% During the 2023 financial year, the Board approved increases in LTI award opportunity to apply for measurement periods commencing 1 August 2023 as outlined below: CEO Other Executive KMP Grant Frequency LTI is granted annually. Opportunity as a % of TFR Target Stretch 95% 60% 190% 120% 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 Volume Weighted Average Price (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 VWAP of $4.1148 over the 20 trading days preceding 1 August 2022. Measurement Period In respect of the 2023 financial year awards, three financial years from 1 August 2022 to 31 July 2025. Service Period Performance Conditions The Executive KMP must remain an employee of the Company during the measurement period to be eligible for LTI award vesting. The performance conditions 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. 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. For 2023 financial year LTI grants, the following performance conditions apply: Tranche 1 Performance Rights (55% weighting at Target) are subject to a 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 Stretch Between Target and Stretch Target Below Target Company’s TSR Over Measurement Period P75 > P50 and < P75 P50 < P50 Vesting % of Tranche 100% Pro-rata 50% 0% 74 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Aspect Performance Conditions continued Description 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 Stretch Between Target and Stretch Target Between Threshold and Target Threshold Below Threshold Bengalla Mine’s Cost Position Relative to Australia’s Top 40 Export Thermal Coal Mines Over Measurement Period Vesting % of Tranche ≤ 4% < 7% and > 4% = 7% < 10% and > 7% = 10% > 10% 100% Pro-rata 50% Pro-rata 25% 0% Tranche 3 Performance Rights (7.5% weighting) are subject to a strategic and capital management vesting condition. The vesting scale for this performance vesting metric is as follows: Performance Level Stretch Target Company Strategic and Capital Management Objectives Operational performance and returns flowing from implementation of strategic and capital management objectives exceed target objectives Operational performance and returns flowing from implementation of strategic and capital management objectives achieve target objectives Threshold Implementation of strategic plan and capital management actions % Vesting of Tranche 100% 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 Stretch Target Threshold Company ESG Objectives 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 Operational performance and returns flowing from implementation of strategy achieve target objectives % Vesting of Tranche 100% 50% 25% 75 New Hope GroupAnnual Report 2023Directors’ Report continued Remuneration Report continued Aspect Performance Conditions continued Description 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 Stretch Target Threshold Company Safety Objectives 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. % Vesting of Tranche 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 Stretch Target Third party audit confirms effectiveness of the Risk Framework and Practices at an industry best practices level. Third party audit confirms compliance with Risk Framework and Practices, and all material risk actions completed on time as per framework deadlines. Threshold Implement recommendations from the Risk Framework and Practices review. % Vesting of Tranche 100% 50% 25% 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. Dividend and Voting Entitlements Major Corporate Transactions Board Discretion 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. 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 74 – 76 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 NRC 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. 76 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Remuneration – Statutory Tables Details of the remuneration of Directors and the Executive KMP of the Company during the 2023 financial year are set out below. Short-Term Benefits Long-Term Benefits Post Employment Others Cash Salary and Fees Cash Bonus Non-Cash Benefits1 Long Service Leave Super- annuation2 Termination Benefits3 Share- Based Payments Equity Settled Shares Total $ Name 2023 Non-Executive Directors Robert D. Millner AO Todd J. Barlow7 Jacqueline E. McGill AO Thomas C. Millner4 Ian M. Williams Steven R. Boulton Lucia A. Stocker8 Executive KMP Robert J. Bishop5 Rebecca S. Rinaldi6 Dominic H O’Brien6 Total Non-Executive Directors 1,052,944 220,000 130,000 155,759 131,137 220,000 131,048 65,000 – – – – – – – – – – – – – – – – – – – – – 1,055,354 316,408 27,634 31,415 558,070 170,931 47,323 13,855 558,233 180,712 58,166 13,828 25,468 23,192 13,704 16,420 9,100 23,192 13,814 6,879 106,301 25,468 25,468 – – – – – – – – – – – – – – 243,192 143,704 172,179 140,237 243,192 144,862 71,879 1,159,245 – 1,019,890 2,476,169 – – 539,440 1,355,087 604,900 1,441,307 Total Other Executive KMP 2,171,657 668,051 133,123 59,098 76,404 – 2,164,230 5,272,563 Total Remuneration – 2023 3,224,601 668,051 133,123 59,098 182,705 – 2,164,230 6,431,808 2022 Non-Executive Directors Robert D. Millner AO Todd J. Barlow7 Jacqueline E. McGill AO Thomas C. Millner4 Ian M. Williams Steven R. Boulton6 220,000 130,000 155,759 130,000 220,000 – Total Non-Executive Directors 855,759 – – – – – – – – – – – – – – – – – – – – – Executive KMP Robert J. Bishop5 Rebecca S. Rinaldi6 Dominic H O’Brien6 807,899 452,518 29,061 26,518 245,154 244,514 21,899 250,716 258,464 11,991 8,218 5,962 22,092 13,054 15,641 13,054 22,092 – 85,933 25,129 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 1. Non-cash benefits include movements in annual leave provisions. 2. Superannuation guarantee requirements for the 2022 and 2023 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 and 2023 financial years and implemented a superannuation exemption certificate effective from 1 April 2023. 5. Robert J. Bishop was Acting CEO for the period from 1 December 2021 to 13 February 2022 included acting allowance of $230,000 pro rata, Effective 14 February 2022 Robert J. Bishop was appointed permanently to the position of CEO. 6. Individuals who commenced or ceased as Executive KMP during the 2022 financial year as detailed in the 2022 Renumeration Report. 7. Todd. J. Barlow elected to waive his committee fees for the 2022 and 2023 financial years. 8. Individuals who commenced as Executive KMP during the 2023 financial year as detailed on page 64. 77 New Hope GroupAnnual Report 2023 Directors’ Report continued Remuneration Report continued Share-Based Compensation The terms and conditions of each LTI award series awarded to Executive KMP in the current or future reporting periods and the associated pricing model inputs are detailed in the table below. Executive KMP Name Robert J. Bishop Rebecca S. Rinaldi LTI series Grant Date Vesting Date Number Granted Value Per Share 2021 Dec-20 Aug-24 133,169 $0.761 2022 Sep-22 Aug-24 173,425 $5.161 2022 Sep-22 Aug-24 141,893 $5.502 2023 Sep-22 Aug-25 94,588 $4.211 2023 Sep-22 Aug-25 77.390 $5.502 2022 Sep-22 Aug-24 80,714 $5.161 2022 Sep-22 Aug-24 66,039 $5.502 2023 Sep-22 Aug-25 48,347 $4.211 2023 Sep-22 Aug-25 39,557 $5.502 Dominic H. O’Brien 2022 Sep-22 Aug-24 97,207 $5.161 2022 Sep-22 Aug-24 79,533 $5.502 2023 Sep-22 Aug-25 49,283 $4.211 2023 Sep-22 Aug-25 40,322 $5.502 Number Vested Vested % Number Forfeited Forfeited % Number Lapsed Lapsed % Total Award Value in Future Financial Years3 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 101,208 894,872 780,412 398,215 425,646 416,485 363,214 203,542 217,564 501,588 437,432 207,481 221,771 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. Equity Holdings The tables below show the number of Restricted Rights and Performance Rights (STI and LTI) and shares in New Hope Corporation Limited that were held during the 2023 financial year by Executive KMP and their related parties either directly, indirectly or beneficially. Restricted Rights Holdings STI – Executive KMP Name Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien Balance at the Start of the Year Granted as Remuneration Vested Forfeited Lapsed – – – 54,986 29,711 31,406 – – – – – – – – – Performance Rights Holdings LTI – Executive KMP Balance at the Start of the Year Granted as Remuneration Name Vested Forfeited Lapsed Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien 448,487 146,753 176,740 171,978 87,904 89,605 – – – – – – – – – 78 Balance at the End of the Year 54,986 29,711 31,406 Balance at the End of the Year 620,465 234,657 266,345 Unvested 54,986 29,711 31,406 Unvested 620,465 234,657 266,345 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Shareholding Name Robert D. Millner AO Todd J. Barlow Jacqueline E. McGill AO Thomas C. Millner Ian M. Williams Steven R. Boulton Lucia A. Stocker Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien Balance at the Start of the Year Purchased/ (Sold) 5,222,774 800,000 19,900 50,000 – 20,000 4,874,368 800,000 – – – – – – – 9,500 – – 150,000 50,000 Received on the Vesting of Performance Rights Ceased as KMP – – – – – – – – – – – – – – – – – – – – Balance at the End of the Year 6,022,774 19,900 70,000 5,674,368 – – 9,500 – – 200,000 Shares Issued on the Vesting of Performance Rights Since the end of the 2023 financial year to the date of this report, Restricted Rights granted to Executive KMP for the Special Incentive Awards granted for the 2022 financial year have vested and/or been exercised as follows: Name Executive KMP Robert J. Bishop Rebecca S. Rinaldi Dominic H. O’Brien Vested Exercised 54,986 29,711 31,406 – – – Otherwise, 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 2023 financial year, nor were there any outstanding loans as at 31 July 2023. Voting at the Company’s 2022 Annual General Meeting At the AGM held on 24 November 2022 shareholders approved: • the resolution to pass the 2022 Remuneration Report by 99 per cent; and • the adoption of the Company’s Long Term Incentive Plan by 99 per cent. End of Remuneration Report 79 New Hope GroupAnnual Report 2023Directors’ Report continued Non–Audit Services Deloitte Touche Tohmatsu has acted as auditor for the Group for the 2023 financial year. The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company are important. During the 2023 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 2023 2022 666,100 223,127 889,227 641,000 264,233 905,233 14,000 14,000 10,000 10,000 459,392 459,392 442,285 442,285 1,362,619 1,357,518 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 81. 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. Meetings of Directors The following table sets out the number of meetings of the Company’s Directors held during the year ended 31 July 2023 and the number of meetings attended by each Director: Full Meetings of Directors Audit and Risk Committee Sustainability Committee Nomination and Remuneration Committee Name Held Attended Held Attended Held Attended Held Attended Robert D. Millner AO Todd J Barlow Jacqueline E. McGill AO Thomas C. Millner Ian M. Williams Steven R. Boulton Lucia A. Stocker1 14 14 14 14 14 14 14 14 13 14 14 14 14 6 1. Lucia A. Stocker commenced on 1 February 2023. – 6 6 – 6 – – – 6 6 – 6 – – – 6 6 – 6 – – – 6 6 – 6 – – – 1 1 – 1 – – – 1 1 – 1 – – Signed at Sydney, 18 September 2023, in accordance with a resolution of Directors. R.D. Millner AO Director 80 New Hope GroupAnnual Report 2023 Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Deloitte Touche Tohmatsu A.B.N. 74 490 121 060 Level 23, Riverside Centre 123 Eagle Street, Brisbane, QLD, 4000 Australia Phone: +61 7 3308 7000 www.deloitte.com.au The Board of Directors New Hope Corporation Limited Level 16, 175 Eagle Street, Brisbane, QLD, 4000 18 September 2023 Dear Board Members, Auditor’s Independence Declaration to New Hope Corporation Limited In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of New Hope Corporation Limited. As lead audit partner for the audit of the financial report of New Hope Corporation Limited for the year ended 31 July 2023, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. Yours faithfully, DELOITTE TOUCHE TOHMATSU Stephen Tarling Partner Chartered Accountants Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Annual Financial Report 2023 New Hope Group 40 81 New Hope GroupAnnual Report 2023 The Company is a company limited by shares on the Australian Securities Exchange (ASX). The Company is incorporated and domiciled in Australia and its registered office and principal place of business is: New Hope Corporation Limited, Level 16, 175 Eagle Street, Brisbane, QLD, 4000. A description of the nature of the consolidated entity's operations and its principal activities is included in the Directors' Report on pages 52 to 80, which is not part of this Financial Report. The Financial Report was authorised for issue by the Directors on 18 September 2023. 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. Financial Report Statement of Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements 1. Financial Reporting Segments 2. Revenue 3. Other Income and Expenses 4. Income Taxes 5. Reconciliation of Profit / (loss) After Income Tax to Net Cash from Operating Activities 6. Earnings Per Share 7. Receivables 8. Trade and Other Payables 9. Inventories 10. Financial Guarantee Liability 11. Property, Plant and Equipment 12. Intangible Assets 13. Exploration and Evaluation Assets 14. Impairment of Assets 15. Provisions 16. Cash and Cash Equivalents 17. Term Deposits 18. Equity Investments 19. Unearned Revenue 20. Borrowings 21. Derivative Financial Instruments 22. Dividends 23. Equity 24. Financial Risk Management 25. Interests in Other Entities 26. Commitments 27. Events Occurring after the Reporting Period 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 Auditors Report 83 84 85 86 87 88 93 94 96 99 100 101 102 103 103 104 107 108 109 114 116 116 117 118 118 124 127 128 130 136 136 137 137 139 140 142 145 145 147 148 82 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Statement of Comprehensive Income For the Year Ended 31 July 2023 Revenue and Other Income Revenue Net Gain from Remeasurement of Convertible Debt Other Income Expenses Cost of Sales Marketing and Transportation Administration Other Expenses Financing Expenses Impairment of Assets Profit before Income Tax Income Tax Expense 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 2 20(a) 3(a) 2023 $000 2022 $000 2,754,498 2,552,395 17,690 22,145 – 6,043 2,794,333 2,558,438 3(b) (952,435) (958,653) 3(b) 20(d) 3(b) (95,049) (115,327) (56,811) (42,278) (66,647) (9,823) (14,205) (64,202) (26,730) (4,989) 1,544,984 1,400,638 4(a) (457,582) (417,629) 1,087,402 1,087,402 983,009 983,009 23(f) 23(f) 23(f) (113) (145) 175,349 (113,694) 4,674 6,609 Changes to the fair value of Equity Investments, net of Tax 23(f) 80,917 261 Other Comprehensive Income/(Loss) for the Year, net of Tax Total Comprehensive Income for the Year Total Comprehensive Income for the Year attributable to New Hope Shareholders 260,827 (106,969) 1,348,229 1,348,229 876,040 876,040 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(a) 6(a) 126.0 118.6 118.1 106.0 The above Statement of Comprehensive Income should be read in conjunction with the accompanying Notes to the Financial Statements. 83 New Hope GroupAnnual Report 2023Statement of Financial Position For the Year Ended 31 July 2023 Current Assets Cash and Cash Equivalents Receivables Term Deposits Other Financial Assets Derivative Financial Instruments Inventories 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 Deferred Tax Liabilities Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed Equity Reserves Retained Earnings Total Equity Notes 2023 $000 2022 $000 16 7 17 21 9 7 21 18 4(d) 11 12 13 8 21 20 15 10 19 20 21 15 19 4(d) 730,654 207,250 – 19,984 92,658 59,239 715,714 501,972 100,000 – – 59,743 1,109,785 1,377,429 37,820 28,475 210,639 – 39,557 1,365 94,973 14,795 1,769,755 1,756,246 68,639 18,194 71,627 71,043 2,133,522 2,049,606 3,243,307 3,427,035 95,416 6,825 9,787 94,478 17,335 10,690 219,454 379,500 37,924 11,968 1,281 31,833 2,463 906 382,656 537,205 75,136 366 162,330 2,349 99,064 277,831 127,263 166,361 2,844 – 339,245 574,299 721,901 1,111,504 2,521,406 2,315,531 23(c) 23(f) 23(g) 8,453 97,536 (42,553) (89,229) 2,555,506 2,307,224 2,521,406 2,315,531 The above Statement of Financial Position should be read in conjunction with the accompanying Notes to the Financial Statements. 84 New Hope GroupAnnual Report 2023 Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Statement of Changes in Equity For the Year Ended 31 July 2023 Contributed Equity $000 Reserves $000 Retained Earnings $000 Notes Total $000 97,536 (89,229) 2,307,224 2,315,531 Balance as at 1 August 2022 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(f) Share Buy-Back 23(d), 23(f) (181,783) (10,664) Conversion of Convertible Debt to Equity 20(a), 23(c) 92,700 – Convertible Debt Buy-Back 23(f) – (206,703) – – – – – – 1,087,402 1,087,402 260,827 – 260,827 260,827 1,087,402 1,348,229 – (839,120) (839,120) 3,216 – – – – 3,216 (192,447) 92,700 (206,703) Balance as at 31 July 2023 (89,083) (214,151) (839,120) (1,142,354) 8,453 (42,553) 2,555,506 2,521,406 Balance as at 1 August 2021 97,536 16,890 1,632,187 1,746,613 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(f) – – – – – – – 983,009 983,009 (106,969) – (106,969) (106,969) 983,009 876,040 – 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 The above Statements of Changes in Equity should be read in conjunction with the accompanying Notes to the Financial Statements. 85 New Hope GroupAnnual Report 2023 Statement of Cash Flows For the Year Ended 31 July 2023 Cash Flows from Operating Activities Receipts from Customers Payments to Suppliers and Employees Net Interest (Paid)/Received Net Income Taxes (Paid)/Received Payments for Legal Settlement Reimbursement from Insurers Payments for Security Deposits Notes 2023 $000 2022 $000 3,101,074 2,240,254 (1,020,879) (1,053,316) 2,080,195 1,186,938 18,540 (539,431) (51,000) 19,359 (2,874) (16,975) (31,326) – – – 15(c) 15(c) Net Cash Inflow from Operating Activities 5 1,524,789 1,138,637 Cash Flows from Investing Activities Payments for Property, Plant and Equipment Proceeds from Sale of Property, Plant and Equipment Proceeds from Sale of Land Payments for Equity Investment Payments for Exploration and Evaluation Assets Term Deposits Proceeds for Sale of Business Payments for Other Financial Assets Refunds/(Payments) for Security and Bond Guarantees Net Cash Inflow/(Outflow) from Investing Activities Cash Flows from Financing Activities Repayments of Secured Debt Repayment of Lease Liabilities Share Buy-Back Convertible Debt Buy-Back Dividends Paid Net Cash Inflow/(Outflow) from Financing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents at the beginning of the Financial Year Effects of Exchange Rate changes on Cash and Cash Equivalents Cash and Cash Equivalents at the end of the Financial Year 18 13 17 20(a) 22(a) (175,293) (65,361) 466 8,227 – (11,694) 26,492 – (94,483) (12,468) 100,000 (100,000) – 21,625 (20,000) – – 1,671 (98,294) (222,524) – (310,000) (9,988) (10,161) (192,447) (367,325) – – (839,120) (307,972) (1,408,880) (628,133) 17,615 715,714 (2,675) 287,980 424,663 3,071 730,654 715,714 The above Statement of Cash Flows should be read in conjunction with the accompanying Notes to the Financial Statements. 86 New Hope GroupAnnual Report 2023 Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Notes to the Financial Statements For the Year Ended 31 July 2023 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 2023 was authorised for issue in accordance with a resolution of the Directors on 18 September 2023. 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 reclassified comparative information where required for consistency with the current year’s presentation. 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. 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 2023 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. 87 New Hope GroupAnnual Report 2023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 7 Note 11 Note 13 Note 14 Note 15 Note 18 Deferred Tax Assets Fair Value Measurement of Other Receivables Estimation of Coal and Oil Reserves and Resources Exploration and Evaluation Expenditure Impairment Assessments – Measurement of Recoverable Amount Provisions – Rehabilitation Fair Value Measurement of Equity Investments 1. Financial Reporting Segments Page 99 102 106 108 113 115 117 Accounting Policy Operating Segments have been determined based on reports reviewed by Key Management Personnel (Executive KMP) which are used to make strategic decisions. Executive 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 Executive 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, being 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, marketing and the Equity investment represented by Malabar Resources Limited) and Other (including coal exploration, oil and gas related exploration, development, production and processing, pastoral operations, treasury and administration). Income Tax Expense has not been allocated to an Operating Segment and is a reconciling item. 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 within the Other Segment. Segment information is presented on the same basis as that used for internal reporting purposes. 88 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory B. Segment Information Year Ended 31 July 2023 Total Segment Revenue Intersegment Revenue Revenue from External Customers Interest Revenue Total Revenue from External Customers Underlying EBITDA before Non-Regular Items1 Segment Underlying EBITDA before Non-Regular Items1 Depreciation and Amortisation Net Interest Income/(Expense) Coal Mining NSW $000 Coal Mining QLD $000 Other $000 Total $000 2,619,015 40,857 67,101 2,726,973 – – (10,953) (10,953) 2,619,015 40,857 56,148 2,716,020 38,478 2,754,498 1,746,580 1,803,224 (118,398) (12,094) (15,400) (44,550) 1,746,580 (7,776) (141,574) (1,491) (5,172) 30,936 24,273 Notes 2 20(d) 3(b) 20(d) Segment Profit/(Loss) before Tax and Non-Regular Items 1,683,335 (32,666) (21,390) 1,629,279 Non-Regular Items before Tax2 – – (84,295) (84,295) Segment Profit/(Loss) before Tax after Non-Regular Items 1,683,335 (32,666) (105,685) 1,544,984 Income Tax (Expense)/Benefit 4(a) Profit/(Loss) after Tax and Non-Regular Items (457,582) 1,087,402 Reportable Segment Assets 2,081,594 196,351 965,362 3,243,307 Total Segment Assets includes: Additions to Non-Current Capital Assets 89,721 71,173 26,499 187,393 Increase in Impairment of Assets – – (64,202) (64,202) 1. Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and Net Profit before Tax (NPBT) and before Non-Regular Items are non-IFRS measures. This non-IFRS information has not been audited by Deloitte. 2. Non-Regular Items for the financial year ended 31 July 2023 relate to Impairment of Assets, Net Liquidation Related Expenses, Net Gain from Remeasurement of Convertible Debt and Group Redundancy Expenses. 2023 Segment Performance ($million) 2023 Segment Assets ($million) 2,619 1,803 1,683 1,683 41 56 -12 -33 -33 Coal Mining NSW Coal Mining QLD -45 -21 -106 Other 965 196 2,082 Revenue from External Customers Segment EBITDA Segment Profit/ (Loss) before Tax and Non-Regular Items Profit/(Loss) before Tax Coal Mining NSW Coal Mining QLD Other 89 New Hope GroupAnnual Report 20231. Financial Reporting Segments continued B. Segment Information continued Year Ended 31 July 2022 Total Segment Revenue Intersegment Revenue Revenue from External Customers Interest Revenue Total Revenue from External Customers Underlying EBITDA before Non-Regular Items2 Notes 2 20(d) Coal Mining NSW $000 Coal Mining QLD $000 Other $000 Total $000 2,380,925 128,570 53,821 2,563,316 (111) – (12,317) (12,428) 2,380,814 128,570 41,504 2,550,888 1,507 2,552,395 1,577,357 Segment Underlying EBITDA before Non-Regular Items2 1,542,818 36,296 (1,757) 1,577,357 Depreciation and Amortisation Net Interest Income/(Expense) 3(b) 20(d) (115,628) (17,736) (7,772) (141,136) (873) (2,918) (10,839) (14,630) Segment Profit/(Loss) before Tax and Non-Regular Items 1,426,317 15,642 (20,368) 1,421,591 Non-Regular Items before Tax1 – (5,304) (15,649) (20,953) Segment Profit/(Loss) before Tax after Non-Regular Items 1,426,317 10,338 (36,017) 1,400,638 Income Tax (Expense)/Benefit Profit/(Loss) after Tax and Non-Regular Items 4(a) (417,629) 983,009 Reportable Segment Assets 2,133,391 234,966 1,058,678 3,427,035 Total Segment Assets includes: Additions to Non-Current Capital Assets Increase in Impairment of Assets 52,936 27,940 – – 15,939 (4,989) 96,815 (4,989) 1. Non-Regular Items for the financial year ended 31 July 2022 relate to Group Redundancy Costs, Liquidation Related Expenses, Strategic Growth and M&A, 2. Underlying Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) and Net Profit before Tax (NPBT) and before Non-Regular Items are non-IFRS measures. This non-IFRS information has not been audited by Deloitte. 2022 Segment Performance ($million) 2022 Segment Assets ($million) 2,381 1,543 1,426 1,426 129 36 16 10 42 -2 -20 -36 Coal Mining NSW Coal Mining QLD Other 1,059 235 2,133 Segment Revenue from External Customers Segment EBITDA Segment Profit/ (Loss) before Tax and Non-Regular Items Segment Profit/(Loss) before Tax Coal Mining NSW Coal Mining QLD Other 90 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory C. Other Segment Information (i) Segment Revenue Year Ended 31 July 2023 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 Australia Revenue from Customer Contracts1 Provisional Pricing Other Revenue Total Revenue 2 1,794,031 14,251 589,275 24,944 – – 79,592 201,851 2,689,693 – – – – – – – – – – – 1,808,282 589,275 24,944 – – 79,592 21,842 36,093 36,693 260,386 36,693 2,762,479 (61,820) 53,839 2,754.498 1. Revenue from customers contracts includes income from commodity sales and services. Refer Note 2. Revenues of $1,310,554,000 (2022: $277,350,000) are derived from three external customers, whom each represent more than 10 per cent of Total Revenue. These revenues are attributed to the Japan and Taiwan geographical segments. Negative provisional pricing adjustments of $69,726,000 (2022: positive $353,277,000) relate to these customers. There are no other individual customers who represent more than 10 per cent of revenue from customer contracts for the year ended 31 July 2023. 2023 Segment Revenue % ($million) 2022 Segment Revenue % ($million) 3% 1% 9% 21% 8% 16% 1% 4% 2% 65% 55% 14% Japan Taiwan Chile Korea India China Vietnam Other Australia 91 New Hope GroupAnnual Report 20231. Financial Reporting Segments continued C. Other Segment Information continued (i) Segment Revenue continued The amounts provided to Executive 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. 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 – – 15,003 37,019 – – – – – – 1,193,539 301,923 39,006 76,278 14,680 350,229 182,729 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. (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. 92 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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. • 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 Revenue Total Revenue Notes 2023 $000 2022 $000 2,740,609 2,143,384 (61,820) 382,498 21,870 15,002 2,700,659 2,540,884 20(d) 2,212 38,478 13,149 2,172 1,644 7,695 1(b) 2,754,498 2,552,395 93 New Hope GroupAnnual Report 2023 3. Other Income and Expenses Profit/(Loss) before Income Tax includes the following specific income/(expenses): A. Other Income Insurance Recoveries Royalty receivable revaluation Land Access Compensation Gain from Lenton Divestment Total Other Income B. Breakdown of Expenses (i) Cost of Sales1,2,3 Purchased Coal Royalties Other Production Costs Mining Non-Mining Total Cost of Sales 1. Employee-Related Expenses relating to Cost of Sales of $153,583,000 (2022: $128,762,000) have been disclosed with 3B(ii) below. 2. Depreciation and Amortisation Expenses relating to Cost of Sales of $139,293,000 (2022: $135,906,000) have been disclosed with 3B(iii) below. 3. Includes Care and Maintenance expenditure for New Acland Coal Mine of $39,708,000 (2022: NIL). (ii) Employee-Related Expenses Salary and Wages Superannuation Share-based Payments Expense Redundancy Expenses Other Employee Benefits Expenses Total Employee-Related Expenses Notes 7 2023 $000 19,359 2,786 – – 22,145 2022 $000 – – 5 6,038 6,043 Notes 2023 $000 2022 $000 (119,637) (237,570) (210,153) (181,752) (304,407) (255,760) (25,362) (18,903) (659,559) (693,985) (148,661) (130,138) (11,481) (3,216) (602) (2.811) (9,157) (850) (5,491) (1,542) (166,771) (147,178) 94 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory (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 Coal Exploration and Evaluation assets Impairment of Oil Producing and Exploration Assets Impairment of Land and Building assets Total Impairment Charge (v) Other Expenses Liquidation related expenses Revaluation of Financial Guarantee Liability Total Other Expenses Note 2023 $000 2022 $000 11 11 11 11 11 12 11 12 12 14 14 14 15(c) 10 (1,207) (59,575) (60,782) (1,180) (59,315) (60,495) (59,558) (58,857) (4,897) (4,903) (140) (7,770) (2,969) (555) (4,968) (4,946) (458) (7,888) (2,969) (555) (80,792) (80,641) (34,511) (21,108) (8,583) (64,202) (57,142) (9,505) (66,647) (4,989) – – (4,989) (9,823) – (9,823) Net (Loss)/Gain on disposal of property, plant and equipment (13,078) (563) 95 New Hope GroupAnnual Report 2023 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 2023 $000 2022 $000 (455,305) (389,050) (356) 2,733 (1,921) (31,312) (457,582) (417,629) 29.6% 29.8% 96 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory B. Numerical Reconciliation of Income tax (expense)/Benefit to Prima Facie Tax Receivable/(payable) 2022 $000 2023 $000 Profit/(Loss) before Income Tax Income Tax calculated at 30% (2022: 30%) Tax effect of amounts which are not deductible/(taxable) in calculating Taxable Income: Non-Assessable accounting gain from property disposals Net Gain from Remeasurement of Convertible Debt Non-Assessable Interest relating to convertible notes Other Non-Temporary Items Under/(Over) provided in prior year Income Tax (Expense)/Benefit C. Tax (Expense)/Benefit Relating to Items of Other Comprehensive Income Cash Flow Hedges Equity Investments 1,544,983 1,400,638 (463,495) (420,191) – 5,477 – (462) 3,334 – (614) (1,805) (458,480) (419,276) 898 1,647 (457,582) (417,629) 2023 $000 77,153 34,787 2022 $000 (45,894) – 97 New Hope GroupAnnual Report 2023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 Net $000 Deferred Tax Assets $000 Deferred Tax Liabilities $000 2023 Rehabilitation Provision Property, Plant and Equipment Capitalised Exploration Cash Flow Hedges Inventories Investments Employee Benefits Other Capital Losses Lease Liabilities 2022 49,461 (91,149) (13,717) 42,971 (10,252) – 7,852 (1,055) 1,500 29,184 14,795 450 (12,549) 8,258 – 133 – 3,501 1,995 – (3,707) – – – (77,153) – (34,787) – – – – (1,921) (111,939) (99,064) Rehabilitation Provision 80,387 (30,926) 49,911 49,911 – (103,698) (5,459) (34,182) (10,119) (34,787) 11,353 940 1,500 25,477 49,461 (91,149) (13,717) 42,971 (10,252) 7,852 (1,055) 1,500 29,184 14,795 – – – – – (103,698) (5,459) (34,182) (10,119) (34,787) 11,353 940 1,500 25,477 89,181 49,461 – – 42,971 – – – – (188,245) – (91,149) (13,717) – – (10,252) 7,852 – 1,500 29,184 – (1,055) – – 130,968 (116,173) – – – (101,125) (12,966) 9,976 (751) (2,923) (8,140) 11,287 1,991 1,500 30,203 – 45,894 (2,112) (3,435) (3,046) – (1,019) – – – – – 214 (31,312) 45,894 Property, Plant and Equipment Capitalised Exploration Cash Flow Hedges Inventories Employee Benefits Other Capital Losses Lease Liabilities 98 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 2023 $000 8,849 5,965 2022 $000 4,522 5,709 14,814 10,231 Significant Judgements and Estimates Recognition of Deferred Tax Assets 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 Net Gain from Remeasurement of Convertible Debt Impairment of Assets Net Foreign Exchange Gains Net Loss/(Profit) on sale of Non-Current Assets Net Income Taxes (Paid)/Received Income Tax Expense/(Benefit) Non-Cash Finance Costs 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 3(b) 20(a) 3(b) 3(b) 4(a) 20(d) 2023 $000 1,087,328 141,574 3,216 – (17,690) 64,202 2,946 13,078 2022 $000 983,009 141,136 850 6,038 – 4,989 (3,071) 563 (539,431) (31,326) 457,582 417,629 2,946 10,444 305,536 (384,236) 504 938 11,479 7,942 2,060 (26,809) 1,524,789 1,138,637 99 New Hope GroupAnnual Report 2023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. Profit and Adjusted Profit Earnings per Share (cents) 2023 126.0 118.6 2022 118.1 106.0 Basic 2023 $000 2022 $000 Profit/(Loss) attributable to the Ordinary Equity Holders of the Company 1,087,402 983,009 Profit/(Loss) attributable to the Ordinary Equity Holders of the Company 1,077,081 988,346 C. Weighted Average Number of Shares Used as the Denominator Dilutive 2023 $000 2022 $000 Weighted average number of Ordinary Shares (Basic) Performance Rights Convertible bond – Equity Weighted average number of Ordinary Shares (Diluted) Consolidated 2023 2022 863,236,771 832,357,082 1,439,418 322,614 43,211,265 99,918,722 907,887,453 932,598,418 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. 100 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 Receivables1,2 Prepayments Total Current Non-Current Other Receivables2 Total Non-Current 2023 $000 2022 $000 123,697 16,661 41,399 25,493 82,466 389,888 14,896 14,722 207,250 501,972 37,820 37,820 39,557 39,557 1. These amounts relate to Long Service Leave payments recoverable from the Coal Mining Industry Long Service Leave Fund, Rebates Receivable, Goods and Services Tax (GST) refunds receivable and Security Deposits. None of these receivables are impaired or past due. 2. Other Receivables include royalty and milestone payments from Bowen Coking Coal Limited of $41,486,000 (2022: $39,471,000), carried at fair value, the value of the current receivable being $3,767,000 (2022: NIL). A further balance of $6,285,000 is included in respect of net interest receivable from Bowen Coking Coal arising on a separate agreement to compensate the Group for arranging a financial guarantee on behalf of the entity, see Note 10. Trade Receivables – Provisionally Priced During the prior 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. Royalty and Milestone Receivables Included in the Other Receivables are a series of milestone payments and a royalty stream, related to the previous sale of New Lenton Coal Pty to Bowen Coking Coal Limited, a company listed on the ASX, on 1 July 2022 (see also Note 10). These receivables are measured at fair value through profit and loss. 101 New Hope GroupAnnual Report 2023 7. Receivables continued Critical Estimate – Fair Value Measurement of Other Receivables The determination of the fair value of Other Receivables relating to consideration for the sale to Bowen Coking Coal involved judgement and is based on expectations in relation to the timing of the counter party receiving relevant approvals, as well as discount rate, credit risk, production and forecast price assumptions. 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. The above judgements, estimates and assumptions are subject to risk and uncertainty and may change as new information becomes available. See further information under Note 10. 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 a loss allowance of $2,095,000 has been recorded (2022: NIL). 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 $166,000 (2022: $4,806,000). 2023 $000 2022 $000 95,416 94,478 102 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 2023 $000 23,674 3,767 33,396 (1,598) 59,239 2022 $000 26,435 6,033 32,539 (5,264) 59,743 A. Inventory Expense Coal Stocks recognised as an expense during the year ended 31 July 2023 amounted to $693,057,000 (2022: $857,483,000). The Group did not recognise any inventory write-down to net realisable value for the financial year (2022: NIL). 10. Financial Guarantee Liability On 24 December 2021 the Group signed a Sale and Purchase Agreement with Bowen Coking Coal (ASX: BCB) 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). The sale completed on 1 July 2022. As part of the sale, the Group provided a finance facility to allow the provision of a guarantee to the State of Queensland for an amount of $61,586,000 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. The finance facility provided to Bowen Coking Coal is terminated after 24 months. Following approval from the State of Queensland, the underlying guarantee was revised downwards to $47,872,000 during the current period. The Group recognises the guarantee as a financial liability, measured at fair value having regard to a probability weighted assessment of risk of default. The financial guarantee provision balances are shown below, with the movement being taken through Other Expenses in the period. Financial Guarantee Liability Provided 2023 $000 11,968 2022 $000 2,463 103 New Hope GroupAnnual Report 2023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 2023 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. 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. 104 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory l a t o T 0 0 0 $ - f o - t h g R i r e d n U - t n a P l g n i c u d o r P t r o P d n a s e v r e s e R d n a t n a P l s t e s s A e s U n o i t c u r t s n o C s t e s s A t n e m p o e v e D l s e s a e L d n a t n e m p u q E i s a G d n a l i O e n M i i g n n M i i i g n n M - n o N i g n n M i d n a d n a L s g n d i l i u B d n a d n a L s g n d i l i u B 0 0 0 $ 0 0 0 $ 0 0 0 $ 0 0 0 $ 0 0 0 $ 0 0 0 $ 0 0 0 $ 0 0 0 $ s e t o N 3 2 0 5 7 1 , 7 2 2 1 , ) 8 2 0 3 ( , ) 0 7 7 1 ( , – ) 0 7 7 1 ( , – 5 8 2 7 1 , ) 7 4 1 9 1 ( , ) 4 4 9 6 1 ( , – – – – ) 0 1 9 7 3 1 ( , ) 0 7 7 7 ( , , 6 4 2 6 5 7 1 , 8 0 9 5 9 , – – 1 2 2 0 1 , 7 2 3 1 7 , ) 3 0 5 2 ( , – ) 3 4 9 ( – – – – 3 7 9 8 , 8 2 3 1 , 5 6 9 6 3 , 0 9 3 5 , 0 5 5 5 7 , ) 6 5 3 4 ( , – 7 4 1 5 8 2 7 1 , – – – ) 0 5 6 5 ( , ) 1 6 3 8 ( , – – – – – – – – – 5 6 0 2 8 , 6 5 3 2 , – – ) 4 2 0 5 ( , , 5 0 7 3 2 9 6 6 4 6 3 4 , – – – – – – – – – ) 2 1 ( ) 8 1 5 7 ( , ) 3 8 5 8 ( , 1 1 0 2 , 8 6 0 2 , 3 7 9 3 , 0 2 4 5 7 1 , ) 3 0 9 4 ( , ) 7 9 8 4 ( , ) 8 5 5 9 5 ( , ) 5 7 5 9 5 ( , ) 7 0 1 ( ) 0 0 1 1 ( , , 5 5 7 9 6 7 1 , 5 9 5 7 8 , 2 0 1 8 7 , 8 4 6 9 5 , 3 2 8 7 5 , 7 4 1 4 6 8 , 8 8 2 6 5 4 , 0 6 9 3 , 2 9 1 2 6 1 , ) 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 , ( , 3 3 8 1 5 9 1 , 5 6 1 7 9 , – – 4 9 6 8 , 0 3 0 6 1 , ) 0 0 0 2 , ( ) 3 0 5 2 1 , ( – – – – – – – – – – – – – – – – 1 6 5 3 , ) 5 4 9 6 , ( 8 0 1 1 , ) 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 , – – – – – – – – – 9 8 4 2 , ) 0 4 1 5 , ( – – – – – ) 8 0 5 2 2 , ( ) 6 4 0 1 , ( ) 2 0 1 7 , ( 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 , ) 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 , ( 3 1 4 1 3 1 4 1 l n o i t a r o p x E m o r f s r e f s n a r T s t e s s A n o i t a u a v E d n a l e s n e p x E n o i t a s i t r o m A / i n o i t a c e r p e D 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 l 3 2 0 2 y u J 1 3 t a e c n a a B l l 2 2 0 2 y u J 1 3 d e d n e r a e Y 1 2 0 2 t s u g u A 1 t a e c n a a B l s n o i t i d d A 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 y t r e p o r P n h t i i w s r e f s n a r T n o t n e L – l a s o p s D i i t n e m p u q E d n a t n a P l n o i t a r o p x E o t l s r e f s n a r T s t e s s A n o i t a u a v E d n a l e s n e p x E n o i t a s i t r o m A / i n o i t a c e r p e D 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 l 3 2 0 2 y u J 1 3 d e d n e r a e Y 2 2 0 2 t s u g u A 1 t a e c n a a B l s n o i t i d d A 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 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 P l , 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 , l 2 2 0 2 y u J 1 3 t a e c n a a B l . 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 e r l s t e s s a f o t n e m e r u s a e m e R . 1 105 New Hope GroupAnnual Report 2023             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 2023). 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 significant developments in the approvals of the New Acland Stage 3 project during the reporting period. An assessment was undertaken based on these key developments as at 31 July 2023 for any potential indicators of impairment to the Coal Mining QLD operations CGU assets. Refer to Note 14 for details on Impairment of Assets. 106 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 12. Intangible Assets Accounting Policy IT Development and Software Costs incurred in IT development and developing software and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Costs capitalised are external direct costs of materials and services. Amortisation is calculated on a straight-line basis over periods generally ranging from three to five years. Water Rights and Mining Information The Group benefits from Water Rights associated with its mining operations through the efficient and cost-effective operation of the mine. These rights are amortised on a straight-line basis over the life of the mine. The value of exploration, pre-feasibility and feasibility costs necessary for regulatory, reporting and internal control purposes have been recognised as a Mining Information Intangible Asset. The total value is amortised over the estimated life of the mine. Goodwill Goodwill on acquisitions of subsidiaries is included in Intangible Assets. Goodwill on acquisitions of associates is included in Investments in Associates. Goodwill is not amortised. Goodwill is carried at cost less accumulated impairment losses. Gains or losses on the disposal of an entity include the carrying amount of Goodwill relating to the entity sold. Goodwill is allocated to CGUs for the purpose of impairment testing. The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. Impairment Goodwill and Intangible Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Refer to Note 14 for details of impairment testing. Goodwill impairments are not reversible. Year ended 31 July 2023 Balance at 1 August 2022 Additions Amortisation Charge Disposal Balance at 31 July 2023 Year ended 31 July 2022 Balance at 1 August 2021 Amortisation Charge Disposal Disposal – Lenton Balance at 31 July 2022 Notes Software $000 Goodwill $000 Water Rights $000 Mining Information $000 Total $000 400 154 (140) – 414 892 (458) (34) – 400 5,595 10,337 55,295 71,627 – – – 522 (555) – – 676 (2,969) (3,664) – – 5,595 10,304 52,326 68,639 5,595 10,892 – – – (555) – – 59,173 (2,969) – (909) 76,552 (3,982) (34) (909) 5,595 10,337 55,295 71,627 Critical Estimate – Goodwill Impairment Assessment Management use judgement in determining the CGU’s that should be used for impairment testing and allocating Goodwill that arises from business combinations to these CGU’s. The Group’s Goodwill of $5,595,000 (2022: $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 2023 and any related impairment charge recognised in the Statement of Comprehensive Income. 107 New Hope GroupAnnual Report 2023 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 to Property, Plant and Equipment Impairment Charge Balance at 31 July Notes 2023 $000 2022 $000 18,194 71,043 71,043 11,237 457 – (17,285) (47,258) 18,194 105,533 13,367 (277) (42,591) – (4,989) 71,043 14 Critical Estimate – 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 2023 and any related impairment charge recognised in the Statement of Comprehensive Income. 108 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 and Exploration and Evaluation assets for the 2023 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 have historically been assessed using 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: 109 New Hope GroupAnnual Report 202314. Impairment of Assets continued B. Impairment Indicator Assessment and Assessment of Recoverable Amount continued (i) QLD Coal Mining Operations CGU The QLD Coal Mining Operations CGU is predominantly comprised of the New Acland Coal Mine, specifically New Acland Stage 3. During the 2023 financial year the Company continued to consider the potential impact that recent developments in the legal and regulatory environment in relation to the New Acland Stage 3 project 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 New Acland Mine. A summary of key events pertaining to New Acland Mine Stage 3 approvals since July 2020 are detailed below: • The New Acland Stage 3 project requires a Regional Interests Development Approval (RIDA) in accordance with the Regional Planning Interests Act 2014. Following an extended history of appeal, New Acland Mine Stage 3’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 New Acland Mine Stage 3 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 New Acland Mine Stage 3’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 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’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; • On 26 August 2022, the Minister for Resources granted the New Acland Stage 3 Mining Leases. • On 20 October 2022, the Department of Regional Development, Manufacturing and Water granted the New Acland Mine Stage 3 Associated Water Licence (AWL). • On 28 March 2023, an internal review by the Department of Regional Development, Manufacturing and Water upheld the decision to grant the AWL. • On 15 May 2023 the OCAA launched a new legal challenge in the Land Court of Queensland against New Acland Mine Stage 3 seeking to overturn the Queensland Government’s decision to grant the AWL. • On 14 July 2023, the OCAA filed a stay application in the Land Court seeking orders preventing New Acland from carrying out mining activity impacting upon groundwater at New Acland Mine until OCAA’s legal challenge to the grant of the AWL by the Queensland Government is heard and determined by the Land Court. • On 14 August 2023 the stay application was withdrawn by the OCAA from the Land Court of Queensland against New Acland Mine Stage 3. This followed discussions between both parties where it was confirmed (per the current ramp up mine plan) that the mining of overburden and coal from the yet to be developed Manning Vale West Pit is not expected before 1 September 2024. Importantly this allows site to continue with mining coal per the current mine plan from Manning Vale East Pit, development of Willaroo Pit and construction of the Lagoon Creek Crossing. Given the above developments during the year ending 31 July 2023, the Directors reviewed the carrying amount for the CGU and whether there were any further indicators of impairment at 31 July 2023 or factors suggesting a reversal of impairment may be appropriate. No impairment indicators or reversal of impairment indicators were identified during the period ended 31 July 2023, thus no impairment charge has been recognised in the Statement of Comprehensive Income (2022: NIL). 110 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory The Carrying Values as at 31 July 2023 and the prior 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 Additional Considerations 2023 $000 2022 $000 19,552 3,459 68 28,118 21 7,783 59,001 18,561 9,831 68 311 38 6,147 34,956 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, as the AWL was granted in the 2023 financial year and Stage 3 operations have commenced, it is expected that the financial requirements can be met. 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 the New Acland Stage 3 project do not proceed as anticipated, 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 2023 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). 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 2023 $000 2022 $000 1,300 65,976 53,740 3,679 1,456 146 5,595 1,388 70,214 57,486 9,839 – 31 5,595 131,893 144,553 111 New Hope GroupAnnual Report 2023 14. Impairment of Assets continued B. Assessment of Recoverable Amount continued (ii) Goodwill Goodwill relates to the acquisition of Queensland Bulk Handling Pty Ltd (Port Operations), $5,595,000, (2022: $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 10.0 per cent (2022: 9.5 per cent). At 31 July 2023 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 2023 financial year (2022: 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 was 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 North Surat Coal Project is in a sector of the Surat Basin with no existing mines. In previous periods, there were two other proposed mines in the area, the Wandoan Coal Project and The Range. Additionally, the Wandoan Coal Project was to build the Surat Basin Rail Project, to be used by the three mines, to connect to existing rail infrastructure and ultimately deliver coal to the port of Gladstone. During the period, The Range project was issued a lapsed notice under the environmental approvals process and the Wandoan Coal Project was announced to become a hydrogen and ammonia producing operation rather than a traditional coal mining and exporting operation. Given these changes, and the original operating plan of the North Surat Coal Project acting in coordination with the other projects, impairment indicators were identified in the current period resulting in the recognition of an impairment charge of $43,094,000 (2022: $4,989,000). The Carrying Value and Impairment Charge calculated is outlined below: North Surat Coal Project Land and Buildings Exploration and Evaluation Property, Plant and Equipment Yamala Coal Project Exploration and Evaluation Total 2023 2022 Carrying Value $000 Impairment Charge $000 Carrying Value $000 Impairment Charge $000 – – – – – – 8,583 25,897 8,614 – – 8,583 25,952 8,685 – – 43,094 43,220 – – – – 4,989 4,989 (iv) Oil Producing and Exploration Assets At 31 July 2023 the Company determined that indicators of impairment existed in respect of its Oil and Gas Producing and Exploration Assets. The indicators arose due to inflationary pressures in the sector, the Company’s future capital planning and the implications for pursuit and development of current exploration permits. The recoverable amount of the oil and gas producing assets were determined based on a VIU calculation using discounted cashflows. This impairment analysis resulted in nil impairment to producing assets, and $21,108,000 impairment of capitalised exploration and evaluation expenditure. 112 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Property, Plant and Equipment Oil and Gas Producing Assets Exploration and Evaluation Total 2023 2022 Carrying Value $000 Impairment Charge $000 Carrying Value $000 Impairment Charge $000 2,328 59,648 7,395 69,371 – – 21,108 21,108 2,624 36,965 36,691 76,280 – – – – Critical Judgements and Estimates – Measurement of Recoverable Amount 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, carbon 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. The Company’s obligations to meet the legislative requirements for carbon emissions targets have been considered in the impairment indicator assessment performed by the Group. Based on initial modelling, the impacts as at 31 July 2023 are not considered to have a material impact on the impairment indicator assessment. Changes to the beforementioned factors 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. 113 New Hope GroupAnnual Report 202315. Provisions Accounting Policy Provisions are measured at the present value of expected future cash outflows with future cash outflows reassessed on a regular basis. The present value is determined using an appropriate discount rate. The obligations include profiling, stabilisation and revegetation of the completed area, with cost estimates based on current statutory requirements and current technology. Short-Term Employee Benefit Obligations Liabilities for wages and salaries, including non-monetary benefits, annual leave, vesting sick leave and redundancies expected to be settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period. These are measured at the amounts expected to be paid when the liabilities are settled. The liability 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. Other Long-Term Employee Benefit Obligations The liability for long service leave and annual leave which is not expected to be settled within 12 months of balance date is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on a high-quality corporate bonds rate with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Restoration, Rehabilitation and Environmental Expenditure Provisions are raised for restoration and rehabilitation expenditure as soon as an obligation exists, with the cost being charged to the Statement of Comprehensive Income in respect of ongoing rehabilitation. Where the obligation relates to decommissioning of assets and restoring the sites on which they are located, the costs are carried forward in the value of the asset and amortised over its useful life. 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. Employee Benefits $000 Restoration/ Rehabilitation $000 25,470 8,414 33,884 25,734 7,590 33,324 12,454 153,916 166,370 6,099 158,771 164,870 Total $000 37,924 162,330 200,254 31,833 166,361 198,194 2023 Current Non-Current 2022 Current Non-Current 114 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory A. Employee Benefits Current long service leave obligations expected to be settled after 12 months 2023 $000 8,100 2022 $000 7,932 The current provision for employee benefits includes accrued annual leave, vested sick leave and long service leave for all unconditional settlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payment in certain circumstances. The entire amount is presented as current, since the Group does not have an unconditional right to defer settlement. However, based on past experience the Group does not expect all employees to take the full amount of accrued long service leave or require payment within the next 12 months. B. Mining Restoration and Rehabilitation Notes 2023 $000 2022 $000 Movements Balance at 1 August Provision Capitalised Disposal – Lenton Disposal – Oakleigh Provision charged/(released) to Profit or Loss Charged to Profit or Loss – unwinding of discount 20(d) Balance at 31 July 164,870 267,959 (2,571) – (2,399) 438 6,032 (52,714) (50,327) – (4,389) 4,341 166,370 164,870 C. 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 Coal alleging claims approximating $175,000,000 plus interest and costs. On 24 February 2023, the parties to the proceedings entered into a binding Heads of Agreement on a no admission of liability basis agreeing to effect settlement through entry into a Deed of Company Arrangement proposed by the Company, which was subsequently approved by creditors of NEC and Colton Coal on 8 March 2023. On 23 March 2023, in accordance with the Heads of Agreement and the Deed of Company Arrangement, a settlement sum was paid into the Deed Fund in full and final settlement of the proceedings. New Hope and the other parties to the proceedings have been released from all matters relating to the proceedings and the proceedings have been discontinued. For the year, the Group incurred total liquidation related expenses of $57,142,000 (refer Note 3(b)), comprising the economic outflow from the Group for the settlement in the amount of $51,000,000 and legal expenses of $6,142,057 (31 July 2022: $9,823,000). This is offset by insurance recoveries of $19,359,000 (refer to Note 3(a)). Significant Estimate – Determination of Reserves Estimates and Rehabilitation Costs 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. 115 New Hope GroupAnnual Report 2023 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 Short Term Deposits Total Cash and Cash Equivalents 2023 $000 2022 $000 650,654 715,714 80,000 – 730,654 715,714 A. Cash at Bank and On Hand Cash at Bank and on Hand includes deposits for which there is a short-term identified use in the operating cash flows of the Group and attracts interest at rates between 0.0 per cent and 5.2 per cent (2022: 0.0 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 non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. Investments are carried at amortised cost. Term Deposits The Term Deposit held expired in July 2023. The fixed deposit was not renewed on expiry. 2023 $000 2022 $000 – 100,000 116 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 2023 $000 163 210,476 210,639 2022 $000 490 94,483 94,973 Malabar Resources Limited The Company, through a wholly owned subsidiary, acquired on 27 July 2022, a 15 per cent interest in Malabar Resources Limited (Malabar) for a total investment of $94,483,000. 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 and first coal was washed and sold in June 2023. The Group does not consider that it has the ability to exert significant influence, accordingly the investment in Malabar 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 revaluation of the Group’s interest in Malabar Resources during the period resulted in a fair value gain of $116,100,000, which was taken through other comprehensive income. Critical Judgements and Estimates – Fair Value Measurement of Equity Investments The determination of fair value for the 15 per cent interest in Malabar requires the Directors to make estimates and assumptions, among other things, about expected commodity prices, production timing, production tonnages and recovery rates, foreign exchange rates, operating costs, carbon costs and discount rates. 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. 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. 117 New Hope GroupAnnual Report 2023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 2023 $000 2022 $000 1,281 1,281 2,349 2,349 3,630 906 906 2,844 2,844 3,750 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. Current Liabilities Lease Liabilities Total Current Lease Liabilities Unsecured Convertible Notes1 Total Non-Current Total Borrowings 1. Net of transaction costs capitalised. Details of the Group’s exposure to risks arising from current and non-current borrowing are set out below. 2023 $000 2022 $000 9,787 9,787 75,136 – 75,136 84,923 10,690 10,690 86,590 191,241 277,831 288,521 118 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory A. Unsecured Convertible Notes Accounting Policy 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. During the period, the Company undertook a process to buy-back the unsecured convertible notes that it had issued during July 2021. On 21 December 2022, the Company committed to repurchasing $75,800,000 of the principal amount of the notes at a repurchase price determined with reference to the volume-weighted average trading price of the Company’s shares over the 5-day period prior to settlement. The settlement of these repurchases occurred over a period from 3 January 2023 to 14 March 2023. In addition, the Company completed on market buy-backs for an additional $12,800,000 of the principal amount of the notes in December 2022 and $18,700,000 of the principal during April and May 2023. The total consideration paid on settlement of repurchase of the notes was $367,300,000. The total accounting gain recognised during the period relating to the convertible note revaluations and repurchases was $17,690,000. The difference between the value of the consideration attributable to the repurchase of the liability component and the repurchase amount, totalling $284,710,000, has been recorded in equity with the associated tax benefit of $78,007,000 also recorded in equity. Additionally, during the year Noteholders converted notes with a carrying value of $92,700,000 to Ordinary Shares. Convertible Notes Liability Component Opening Balance Conversion to Ordinary Shares1 Gain on remeasurement Coupon Repayment Buy Back Interest on Convertible Notes Unsecured Non-Current Liabilities 2023 $000 2022 $000 191,241 189,193 (92,700) (17,446) (1,483) (82,558) 2,946 – – (5,500) – 7,548 – 191,241 1. 50,037,233 Ordinary Shares were issued due to note conversions during the 2023 financial year. All notes have been repurchased or converted as at 31 July 2023, in the prior period the notes on issue may have been converted into 106,746,372 Ordinary Shares. 119 New Hope GroupAnnual Report 2023 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. 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. 120 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory The maturity profile of Lease Liabilities recognised at the end of the financial year is: Lease Liabilities 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 2023 $000 2022 $000 13,804 37,032 69,817 15,157 45,737 75,079 120,653 135,973 (35,730) (38,693) 84,923 97,280 9,787 24,293 50,843 84,923 7,770 – 4,287 207 – 10,690 32,738 53,852 97,280 7,888 – 4,421 129 – Total Expense for Leases recognised in the Statement of Comprehensive Income 12,264 12,438 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. 121 New Hope GroupAnnual Report 2023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 Unsecured Convertible Notes Total Liabilities from Financing Activities Changes Arising in Liabilities from Financing Activities Lease Liabilities Secured Loans Unsecured Convertible Notes 2023 $000 Cash Flows $000 97,280 (14,275) 191,241 (194,187) 288,521 (208,462) 2022 $000 Cash Flows $000 100,651 308,054 189,193 (10,161) (310,130) (5,500) Non-Cash Charges1 $000 1,918 2,946 4,864 Non-Cash Changes1 $000 6,790 2,076 7,548 Total Liabilities from Financing Activities 597,898 (325,791) 16,414 2023 $000 84,923 – 84,923 2022 $000 97,280 – 191,241 288,521 1. Total non-cash change in Lease Liabilities during the 2023 financial year includes a lease addition of $1,227,000 and lease remeasurements of $3,596,000. In the 2022 financial year, total non-cash changes included $6,631,000 relating to remeasurement of leases during the year. The fair value of Interest-Bearing Liabilities materially approximates their respective carrying values as at 31 July 2023. D. Finance Income and Expense Accounting Policy Finance Income comprises Interest Income on funds invested. Interest Income is recognised as it accrues, using the effective interest method. Finance Expenses comprise Interest Expense on Interest-Bearing Liabilities, Unwinding of the Discount on Provisions, Interest Expense in relation to Leases. All Finance Expenses are recognised as expenses in the period in which they are incurred unless they relate to the construction of a qualifying asset and are then capitalised. Qualifying Assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Recognised in the Statement of Comprehensive Income Interest Income Finance Income Interest on Drawn Secured Loan Amortisation of Transaction Costs on Secured Loan Commitment Fees on Secured Loan Interest on Unsecured Convertible Notes Interest Expense on Lease Liabilities Unwinding of Discount on Provisions Other Financing Costs Financing Expenses 122 2023 $000 38,478 38,478 – – – (2,946) (4,287) (6,032) (940) 2022 $000 1,644 1,644 (1,553) (1,346) (6,115) (7,548) (4,421) (4,341) (1,406) (14,205) (26,730) Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory E. Contingent Liabilities Details and estimates of maximum amounts of Contingent Liabilities for which no provision is included in the accounts are as follows: The Bankers of the Consolidated Entity have issued undertakings and guarantees to the Department of Natural Resources and Mines, Statutory Power Authorities, and various other entities. No losses are anticipated in respect of any of the above Contingent Liabilities. The Parent Company has given secured guarantees in respect of: 2023 $000 2022 $000 16,765 14,686 (i) Mining Restoration and Rehabilitation 142,197 158,374 The liability has been recognised by the Group in relation to its rehabilitation obligations. (ii) Statutory body suppliers, financiers and various other entities 16,765 14,686 With the exception of the Financial Guarantee Liability of $11,968,000 recognised in relation to Lenton (Refer Note 10), no liabilities were recognised by the Consolidated Entity in relation to these guarantees as no losses are foreseen on these Contingent Liabilities. F. Lines of Credit Unrestricted access was available at 31 July 2023 to the following lines of credit available of $250,000,000 (2022: $300,000,000). 2023 ($000) 2022 ($000) 91,038 126,940 250,000 300,000 158,962 173,060 Guarantee facility – available Guarantee facility – utilised Unused at balance date 123 New Hope GroupAnnual Report 2023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. 2023 Notional amounts 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(iv) Notes (i) Amounts related to change in value include time value components. FEC $’000 FX Options $’000 Cash Flow Hedges Commodity Swaps $’000 Total $’000 Nil USD 700,000 USD 228,050 – – – 1,922 (1,922) 1,922 – – – 2,849 120,902 123,751 (9,808) (6,959) 155 – (9,808) 120,902 255,099 113,943 257,176 (155) (255,099) (257,176) (31,715) 280,292 (250,499) – – – 31,870 (25,193) 6,677 (6,959) 120,902 113,943 (ii) Hedge effectiveness is the extent to which the changes in fair value of the hedging instrument offsets changes in the fair value of the hedged item. (iii) Hedge ineffectiveness is the extent to which the changes in the cash flows of the hedging instrument are greater or less than the hedged item. Sources of ineffectiveness include the effect of credit risk on the hedging instrument. A positive number represents a gain in the Profit or Loss. (iv) The post-tax equivalent of the total balance in cash flow hedge reserve for continuing hedges is A$(79,760,000). 124 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 2022 Notional amounts 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(iv) Notes (i) Amounts related to change in value include time value components. FECs $’000 FX Options $’000 Cash Flow Hedges Commodity Swaps $’000 Total $’000 USD 60,000 USD 480,000 USD 722,925 – 1,365 – 1,365 (1,922) (1,922) (11,668) 11,668 (20,880) – 9,212 (1,922) (8,479) (134,197) (144,598) (7,114) (134,197) (143,233) (7,114) (134,197) (152,979) 7,114 134,197 152,979 (7,343) (134,197) (162,420) – 229 – – – 9,441 (7,114) (134,197) (143,233) (ii) Hedge effectiveness is the extent to which the changes in fair value of the hedging instrument offsets changes in the fair value of the hedged item. (iii) Hedge ineffectiveness is the extent to which the changes in the cash flows of the hedging instrument are greater or less than the hedged item. Sources of ineffectiveness include the effect of credit risk on the hedging instrument. A positive number represents a gain in the Profit or Loss. (iv) The post-tax equivalent of the total balance in cash flow hedge reserve for continuing hedges is A$(100,263,000). 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 2023 $000 2022 $000 92,658 – 28,475 121,133 2023 $000 1,365 1,365 2022 $000 (6,825) (17,335) (366) (127,263) (7,191) (144,598) 125 New Hope GroupAnnual Report 2023 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 2023, Derivative Financial Instruments represented assets with a fair value of $121,133,000 (2022: $1,365,000) and liabilities of $7,191,000 (2022: $144,598,000). At balance date the details of outstanding contracts are: (i) Foreign Exchange Contracts Maturity 0 to 6 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 Sell US Dollars Buy Australian Dollars Average Exchange Rate 2023 USD $000 2022 USD $000 2023 rate 2022 rate – – 60,000 60,000 – 0.7116 Sell US Dollars Buy Australian Dollars Average Exchange Rate 2023 USD $000 2022 USD $000 2023 rate 2022 rate 240,000 300,000 160,000 700,000 120,000 230,000 130,000 480,000 0.6633 0.6669 0.6585 0.7038 0.7261 0.6700 Sell Coal USD Price Buy Coal USD Price Average Coal USD Price 2023 USD $000 2022 USD $000 2023 Price 2022 Price 101,550 69,000 57,500 228,050 60,750 54,675 607,500 722,925 $238.94 $230.00 $230.00 $405.00 $405.00 $405.00 B. Credit Risk Exposures Credit risk also arises from the potential failure of counterparties to meet their obligations under the respective contracts at maturity. A material exposure arises from forward exchange and pricing contracts and the consolidated entity is exposed to loss in the event that counterparties fail to deliver the contracted amount. At 31 July 2023 there was no receivable relating to Forward Foreign Exchange Contracts (2022: 60,000,000). 126 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 2022 Final Dividend at 31.00 cents per share – 100% franked (tax rate – 30%) (paid on 8 November 2022) 2022 Special Dividend at 25.00 cents per share – 100% franked (tax rate – 30%) (paid on 8 November 2022) 2023 Interim Dividend at 30.00 cents per share – 100% franked (tax rate – 30%) (paid on 3 May 2023) 2023 Special Dividend at 10.00 cents per share – 100% franked (tax rate – 30%) (paid on 3 May 2023) Total Dividends Paid 2023 $000 2022 $000 271,449 58,565 218,911 141,500 261,570 108,207 87,190 – 839,120 307,972 B. Proposed Dividends In addition to the above Dividends, the Directors have declared a Final Dividend of 21.0 cents (2022: 31.00 cents) and a Special Dividend of 9.0 cents per share (2022: 25.00 cents). These dividends are fully franked based on tax paid at 30 per cent. The proposed dividends are expected to be paid on 7 November 2023. The declared Final Dividend and Special Dividend have not been recognised as a liability at 31 July 2023 (2022: NIL). C. Franked Dividends The franked portions of the Final Dividend and Special Dividend recommended after 31 July 2023 will be franked out of existing Franking Credits. Franking Credits available for subsequent financial years based on a tax rate of 30% (2022: 30%) 562,769 389,984 The impact on the franking account of the Dividends recommended by the Directors after the 2023 financial year end, but not recognised as a liability at 31 July 2023, will result in a reduction in the franking account of $108,686,000 (2022: $199,765,700) 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 (2022: NIL). 2023 $000 2022 $000 127 New Hope GroupAnnual Report 2023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 845,335,464 8,453 832,357,082 97,536 2023 Number of Shares 2023 $000 2022 Number of Shares 2022 $000 D. Movements in Share Capital Date Details 1 August 2022 Opening Balance Convertible Debt Conversion to Equity Share Buy-Back 31 July 2023 Balance 1 August 2021 31 July 2022 Opening Balance Balance Number of Shares 832,357,082 50,037,223 (37,058,841) 845,335,464 832,357,082 832,357,082 Issue Price – $1.85 $4.91 – $000 97,536 92,700 (181,783) 8,453 97,536 97,536 During the period, Noteholders converted notes with a carrying value of $92,700,000 to Ordinary Shares. Additionally, on 18th November 2022, the Company commenced an on market buy-back of Ordinary Shares. The company bought back 37,058,841 shares during the period, resulting in a share capital reduction of $181,783,000. 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. 128 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory F. Reserves 0 9 8 6 1 , ) 4 2 ( 0 1 6 6 , 1 4 4 9 , ) 2 3 8 2 , ( – – 6 2 7 8 4 , – ) 4 0 3 2 6 1 , ( ) 5 4 1 ( – – – – ) 9 7 0 0 9 , ( ) 9 6 1 ( 0 1 6 6 , – – 0 5 8 – – – – – – ) 9 2 2 9 8 ( , ) 9 6 1 ( 0 1 6 6 , – – – – – – – – – – – – – – ) 9 2 0 6 , ( 3 7 5 – – – – 2 2 8 6 , 1 4 4 9 , ) 2 3 8 2 , ( 6 2 7 8 4 , ) 0 2 4 2 6 1 , ( – – – – – – – 1 6 2 – – – – ) 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 – – – – – – – – – – – – ) 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 , l a t o T 0 0 0 $ 0 0 0 $ n o i t a l s n a r T s e t o N k c a B - y u B i m u m e r P I 1 C N 0 0 0 $ s t n e m y a P i g n g d e H n o i t a u a v e R l s t n e m 0 0 0 $ 0 0 0 $ 0 0 0 $ i n g e r o F y c n e r r u C l e b i t r e v n o C e r a h S n o d a P i i m u m e r P - e r a h S d e s a B y t i u q E - t s e v n I l a t i p a C s t fi o r P 0 0 0 $ s e t o N 7 7 6 6 , ) 3 0 0 2 ( , – – ) 9 2 2 9 8 ( , ) 9 6 1 ( – – 0 0 0 $ 0 1 6 6 , – – 6 1 2 3 , ) 4 6 6 0 1 ( , – – – – – – – – 1 7 2 1 8 , ) 3 1 1 ( , ) 0 1 7 4 8 2 ( ) 1 2 8 1 3 ( , – 7 0 0 8 7 , ) 5 0 1 5 3 ( , ) 2 8 2 ( , ) 3 9 0 0 0 2 ( – – – – – – – – – ) 4 6 6 0 1 ( , – – – – ) 9 2 0 6 ( , – – – – 0 0 0 $ 3 2 4 1 , ) 3 6 2 0 0 1 ( , 2 1 4 7 2 , ) 6 5 5 9 1 ( , 3 4 3 1 , 2 2 0 2 t s u g u A 1 t A 7 7 6 6 , ) 3 0 0 2 ( , ) 9 4 1 5 7 ( , , 8 9 4 0 5 2 – – – – – – ) 9 7 6 4 3 ( , 6 9 5 5 1 1 , – – – – 1 2 0 2 , , 8 1 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 L ( / t fi o r p t e N o t r e f s n a r T 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 a v e R l s s o r G – n o i t a u a v e R l – – – – – – – 6 1 2 3 , – – – – – – – – – – – – – – – – ) 9 2 0 6 ( , 3 2 4 1 , 0 6 7 9 7 , 2 1 4 7 2 , 1 6 3 1 6 , 3 4 3 1 , 9 2 t n e n o p m o c y t i u q e f o n o i t i n g o c e R r i e h t n i 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 d e s a B - 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 k c a B - y u B e r a h S y t i u q E d e t u b i r t n o C o t r e f s n a r T ) 3 5 5 2 4 ( , ) 2 8 2 ( , ) 3 9 0 0 0 2 ( ) 4 6 6 0 1 ( , ) 9 2 0 6 ( , 9 3 6 4 , 0 6 7 9 7 , 2 1 4 7 2 , 1 6 3 1 6 , 3 4 3 1 , 3 2 0 2 y u J 1 3 t l A 2 1 4 7 2 , ) 7 1 8 9 1 , ( 3 4 3 1 , 1 2 0 2 t s u g u A 1 t A 9 2 r i e h t n i 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 t n e n o p m o c y t i u q e f o n o i t i n g o c e R d e s a B - 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 y t i u q E d e t u b i r t n o C 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 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 a v e R l 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 a v e R l 2 2 0 2 y u J 1 3 t l A . 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 . 1 129 New Hope GroupAnnual Report 2023   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 Share Buy-Back Premium 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. This reserve represents the premium paid on shares (above share capital value) bought back, and subsequently cancelled as part of the on-market Share Buy-Back, announced November 2022. Convertible Notes This reserve represents the equity component of convertible notes (see note 20(a)). 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 Notes 2023 $000 2022 $000 2,307,224 1,632,187 1,087,402 983,009 22(a) (839,120) (307,972) 2,555,506 2,307,224 Accounting Policy The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses Derivative Financial Instruments such as Foreign Exchange Contracts to hedge certain risk exposures. Derivatives are used exclusively for hedging purposes, i.e. not as trading or other speculative instruments. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. Risk management is carried out in accordance with written policies approved by the Board of Directors. These written policies cover specific areas, such as mitigating foreign exchange, interest rate and credit risks, use of forward exchange contracts and investment of excess liquidity. 130 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory The Group holds the following financial instruments: Fair Value through Other Compre- hensive Income $000 Notes Hedging Derivatives $000 Amortised Cost $000 Fair Value through Profit and Loss $000 Financial Assets 2023 Cash and Cash Equivalents Trade and Other Receivables Other Financial Assets Equity Investments Derivative Financial Instruments 2022 Cash and Cash Equivalents Trade and Other Receivables Term Deposit Equity Investments Derivative Financial Instruments Financial Liabilities 2023 Lease Liabilities Trade and Other Payables Unsecured Loans Derivative Financial Instruments 2022 Lease Liabilities Trade and Other Payables Unsecured Loans Derivative Financial Instruments 16 7 18 21 16 7 17 18 21 20 8 20 21 20 8 20 21 – – – 210,476 – 210,476 – – – 94,973 – 94,973 – – – – – – – – – – – – – – 121,133 121,133 – – – – 1,365 1,365 – – – 7,191 7,191 – – – 144,598 144,598 Total $000 730,654 219,476 19,984 210,476 121,133 730,654 161,329 – – – – 58,147 19,984 – – 891,983 78,131 1,301,723 715,714 – 97,362 429,359 100,000 – – – – – 715,714 526,721 100,000 94,973 1,365 913,076 429,359 1,438,773 84,923 95,416 – – 180,339 97,280 89,672 191,241 – – – – – – – 4,806 – – 378,193 4,806 84,923 95,416 – 7,191 187,530 97,280 94,478 191,241 144,598 527,597 131 New Hope GroupAnnual Report 2023 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. 2023 USD $000 2022 USD $000 7,071 63,690 2,908 310,833 – 60,000 700,000 228,050 480,000 722,925 3,287 11,049 (ii) Commodity Hedge Risk 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. The change in equity due to a 10 per cent change in Coal/ USD price for the valuation of the hedging instrument would result an increase of $21.8m (before tax) and a decrease of $21.8m (before tax). Group Sensitivity Based on the Trade Receivables, Cash and Trade Payables held at 31 July 2023, 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 $7,854,000/($6,426,000) (2022: $33,598,000/($27,490,000)), 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 foreign exchange options held at 31 July 2023, the change in equity due to a 10 per cent change in the exchange rate of the Australian dollar against the US dollar translation of the hedging instrument would result an increase of $68.3m (before tax) and a decrease of $79.6m (before tax). (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 has a publicly traded equity investment. The impact of increases/decreases in the financial instrument on the Group’s equity as at balance date is $22,000/($22,000)) (2022: $65,600/($65,600)). 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). 132 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 and facilities given to certain parties (see Note 20 and Note 10). Such facilities are only provided in exceptional circumstances and are subject to specific Board approval. The accrued interest on this facility and other receivables from the same counterparty is also subject to credit risk (see Note 7). 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 Other Financial Assets Derivative Financial Instruments Notes 16 21 2023 $000 219,476 730,654 – 19,984 121,133 2022 $000 526,721 715,714 100,000 – 1,365 C. Liquidity Risk Prudent liquidity risk management is adopted through maintaining sufficient cash and marketable securities, the ability to borrow funds from credit providers and to close-out market positions. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Surplus funds are generally only invested in instruments that are tradeable in highly liquid markets. Financing Arrangements The Group’s only significant external borrowings relate to unsecured convertible notes and leases detailed in Note 20. The maturity of these arrangements is shown as below: 133 New Hope GroupAnnual Report 2023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 of Lease Liabilities. 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 4.88 per cent (2022: 4.54 per cent) and are payable over a period of one to 19 years (2022: 20 years). The table below details the contractual cash flows of Lease Liabilities, Unsecured Convertible Notes and Derivative Liabilities. 0 to 6 Months $000 6 to 12 Months $000 1 to 2 Years $000 2 to 5 Years $000 After 5 Years $000 Total $000 Carrying Amount $000 2023 Lease Liabilities Derivatives 2022 Lease Liabilities Unsecured Convertible Notes Derivatives 6,924 3,022 7,665 2,750 3,198 6,880 3,803 7,688 2,750 15,990 21,042 69,817 120,653 366 – – 7,191 84,923 7,191 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 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. 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). 134 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory The following table presents the Group’s assets and liabilities measured and recognised at fair value as at 31 July 2023 and 31 July 2022. Level 1 $000 Level 2 $000 Level 3 $000 Total $000 2023 Assets Derivatives Financial Instruments Trade Receivables – Provisionally Priced Other Receivables – Lenton Other Financial Assets Equity Investments Total Assets Liabilities Derivatives Financial Instruments Trade Payables – Provisionally Priced Total Liabilities 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 – – – 19,984 163 121,133 16,661 – – – 20,147 137,794 – – 41,486 – 210,476 251,962 – – – – – – 490 490 – – – 7,191 166 7,357 1,365 389,888 39,471 94,483 525,842 144,598 4,806 149,404 – – – – – – – – – – – 121,133 16,661 41,486 19,984 210,639 409,903 7,191 166 7,357 1,365 389,888 39,471 94,973 525,697 144,598 4,806 149,404 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. 135 New Hope GroupAnnual Report 2023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 2023 $000 2022 $000 102,276 100,141 B. 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. 136 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 27. Events Occurring after the Reporting Period New Acland Mine Stage 3 Stay Application On 14 August 2023, OCAA withdrew its stay application providing the Company with certainty to progress the New Acland Stage 3 ramp-up plan. The withdrawal followed discussions between both parties where the Company confirmed the mining of overburden and coal from the yet to be developed Manning Vale West Pit is not expected before 1 September 2024 under the mine’s existing Stage 3 ramp-up plan. Resolving the stay application with OCAA allows the Company to confidently commence mining coal from the Manning Vale East Pit (which is the first area under development since the Queensland Government approved the project in October last year) and begin construction of the Lagoon Creek Crossing to progress development and mining of the planned adjacent Willeroo Pit. While mining of overburden and coal in Manning Vale West Pit is not expected before 1 September 2024, the Company may undertake surface works, including building infrastructure, exploration and bore drilling on the site of the Manning Vale West Pit. The Land Court is yet to set dates for the hearing of appeals to the grant of the Associated Water Licence by the Queensland Government. On 14 September 2023, first coal was extracted from the Manning Vale East Pit. AL19 Purchase On 4 August 2023, the Company secured the purchase of the AL19 tenement in West Muswellbrook. NSW Coal Royalty changes On 6 September 2023, the NSW State Government announced changes to the coal royalty rates effective 1 July 2024. The current rate paid by Bengalla, the Company’s NSW operation, will increase from 8.2 per cent, to 10.8 per cent. Initial financial modelling on the increase suggests an immaterial impact to the cost profile of Bengalla. 28. Related Party Transactions A. 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 AO Non-Executive Directors Todd J. Barlow Jacqueline E. McGill AO Thomas C. Millner Ian M. Williams Steven R. Boulton Lucia A. Stocker 137 New Hope GroupAnnual Report 202328. Related Party Transactions continued A. 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 Position Robert J. Bishop Chief Executive Officer Rebecca S. Rinaldi Chief Financial Officer Employer New Hope Corporation Limited New Hope Corporation Limited Dominic H. O’Brien Executive General Manager and Company Secretary New Hope Corporation Limited (iii) Key Management Personnel Compensation Short-Term Employee Benefits Long-Term Employee Benefits Post-Employment Benefits Termination Payment Share-Based Payment B. Transactions with Related Parties 2023 $000 2022 $000 4,025,775 3,916,190 59,098 182,705 – 2,164,230 40,698 147,085 410,680 475,707 6,431,808 4,990,360 2023 $000 2022 $000 Dividends paid to associate, Washington H. Soul Pattinson and Company Limited (WHSP) 300,572,561 115,845,675 Payment for consulting services rendered (Pitt Capital Partners Ltd) 600,000 300,000 Detailed remuneration disclosures can be found in the Remuneration Report on pages 64 to 79. C. 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 2023 (2022: NIL). D. Terms and Conditions Transactions relating to dividends were on the same terms and conditions that applied to other shareholders. E. Other Transactions of Key Management Personnel R.D. Millner, T.C. Millner and T.J. Barlow are Directors of WHSP, the associate 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 2023 and 2022 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. F. Loans to Key Management Personnel No loans have been made available to the Key Management Personnel of the Group. 138 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 $3,216,000 (2022: $850,000). 139 New Hope GroupAnnual Report 2023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 2023 2022 Average Price per Right Number of Performance Rights Average Price per Right Number of Performance Rights $5.37 $4.66 940,506 981,003 – – – – – – $1.995 $5.29 – 547,225 807,337 – $0.76 (414,056) – – $5.01 1,921,509 $5.37 940,506 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 13 Sep 2022 13 Sep 2022 13 Sep 2022 Total Vesting Date 1 Aug 2024 1 Aug 2024 13 Sep 2023 1 Aug 2025 1 Aug 2025 Value of Performance Right at Grant Date Performance Rights 2023 Performance Rights 2022 $0.76 $3.76 $5.50 $4.79 $4.24 133,169 807,337 142,489 427,555 410,959 133,169 807,337 – – – 1,921,509 940,506 Weighted average remaining contractual life of Performance Rights outstanding at end of period 1.4 years 2 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. 140 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 Profit/(Loss) for the Year Total Comprehensive Profit/(Loss) B. Guarantees Entered into by Parent Entity 2023 $000 2022 $000 1,267,488 57,997 741,067 409,467 1,325,485 1,150,534 280,695 8,771 289,466 709,300 204,341 913,641 8,456 97,536 4,360 (210,757) 1,233,960 1,036,019 1,423 6,610 131,324 236,893 1,941,758 (24,063) 1,941,758 (24.063) 2023 $000 2022 $000 Bank Guarantees issued in relation to rehabilitation, statutory body suppliers and various other entities. 158,962 173,060 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. 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. 2023 $000 2022 $000 158,962 173,060 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 2023, the Parent entity had contractual commitments for the acquisition of Property, Plant or Equipment totalling NIL (2022: NIL). 141 New Hope GroupAnnual Report 2023 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 year: • 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 Ltd • Dexplan Pty Ltd • Tivoli Collieries Pty. Ltd. 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. 142 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory A. Statement of Consolidated Comprehensive Income Set out below is the Statement of Consolidated Comprehensive Income for the year ended 31 July 2023 for the Closed Group: Revenue from Operations Net Gains from Convertible Debt Buy-Back Other Income Expenses Cost of Sales Marketing and Transportation Administration Financing Costs Other Expenses Impairment of Assets Profit before Income Tax Income Tax Expense Profit after Income Tax for the Year Other Comprehensive Income/(Loss) Items to be reclassified to Profit or 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 2023 $000 2022 $000 2,711,109 2,503,471 17,690 22,145 – – 2,750,944 2,503,471 (916,931) (960,872) (92,923) (43,813) (12,977) (66,647) – (80,142) (21,012) (25,025) (9,823) – 1,617,653 1,406,597 (474,720) (419,185) 1,142,933 987,412 175,349 (113,694) 4,674 6,609 180,023 (107,085) 1,322,956 880,327 143 New Hope GroupAnnual Report 202331. Deed of Cross Guarantee continued B. Statement of Financial Position Set out below is a Statement of Financial Position as at 31 July 2023 of the Closed Group: Current Assets Cash and Cash Equivalents Receivables Derivative Financial Instruments Other Financial Assets Inventories 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 Deferred Tax Liabilities Derivative financial instruments Total Non-Current Liabilities Total Liabilities Net Assets Equity Contributed Equity Reserves Retained Earnings Total Equity 144 2023 $000 721,075 266,717 92,658 19,984 55,192 2022 $000 705,618 473,516 – – 61,211 1,155,626 1,240,345 100,876 35,423 165,191 152,690 1,684,388 1,664,616 68,592 7,783 – 28,475 75,849 6,147 8,273 1,365 1,925,537 2,074,131 3,081,163 3,314,476 109,141 9,471 89,753 10,294 217,889 379,042 32,683 6,825 35,491 17,335 376,009 531,915 75,136 132,473 83,929 366 291,904 279,980 138,906 – 127,263 546,149 667,913 1,078,064 2,413,250 2,236,412 8,695 97,536 (98,124) (63,996) 2,502.679 2,202,872 2,413,250 2,236,412 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory 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 Services1 Total 2023 2022 666,100 223,127 889,227 14,000 641,000 264,233 905,233 10,000 10,000 459,392 459,392 442,285 442,285 1,362,619 1,357,518 1. Includes Public Mining supervisor training courses and Asset Management advisory services. 33. Other Accounting Policies A. Foreign Currency Translation (i) Functional and Presentation Currency Items included in the Financial Statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the Group operates (the functional currency). The Consolidated Financial Statements are presented in Australian dollars, which is New Hope Corporation Limited’s functional and presentation currency. (ii) Transactions And Balances Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in Profit or Loss. They are deferred in Equity if they relate to qualifying Cash Flow Hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. Translation differences on non-monetary items, such as Equity Instruments held at fair value through profit or loss, are reported as part of the fair value gain or loss on the instrument. Translation differences on non-monetary items are included in the fair value reserve in Equity. (iii) Group Companies The results and financial position of all foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: • Assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that Statement of Financial Position; • Income and expenses for each Statement of Comprehensive Income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and • All resulting exchange differences are recognised in Other Comprehensive Income. On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of Borrowings and other Financial Instruments designated as hedges of such Investments, are recognised in Other Comprehensive Income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to the Statement of Comprehensive Income, as part of the gain or loss on sale. 145 New Hope GroupAnnual Report 202333. Other Accounting Policies continued 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 (i) New and amended accounting pronouncements adopted in the current year The adoption of new, amendments and interpretations of accounting pronouncements from 1 August 2023 did not result in a significant impact on the Group’s Financial Statements. This includes the Amendments to Annual improvements to IFRS Standards 2018–2020, IFRS 9 ‘Financial Instruments’. (ii) Accounting Standards and Interpretations Issued But Not Yet Effective 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 2022: 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 2024, with early application permitted. The potential effects on adoption of the amendment are yet to be determined. 146 Notes to the Financial Statements continuedFor the Year Ended 31 July 2023New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Directors’ Declaration For the Year Ended 31 July 2023 In the Directors’ opinion: (a) the financial statements and notes set out on pages 83 to 146 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements (ii) giving a true and fair view of the consolidated entity’s financial position as at 31 July 2023 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 87 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 Corporation (Wholly-owned Companies) Instrument 2016/785. 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 AO Director Sydney, 18 September 2023 147 New Hope GroupAnnual Report 2023Independent Auditor’s Report Deloitte Touche Tohmatsu A.B.N. 74 490 121 060 Level 23, Riverside Centre 123 Eagle Street Brisbane, QLD, 4000 Australia Phone: +61 7 3308 7000 www.deloitte.com.au Independent Auditor’s Report to the Members of New Hope Corporation Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of New Hope Corporation Limited (the “Company”) and its subsidiaries (the “Group”) which comprises the consolidated statement of financial position as at 31 July 2023, the consolidated statement of 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 other explanatory information, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group’s financial position as at 31 July 2023 and of its financial performance for the year then ended; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. Annual Financial Report 2023 New Hope Group 109 148 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Key Audit Matter How the scope of our audit responded to the Key Audit Matter CCaarrrryyiinngg vvaalluuee ooff pprrooppeerrttyy ppllaanntt aanndd eeqquuiippmmeenntt,, iinnttaannggiibbllee aasssseettss aanndd eexxpplloorraattiioonn aanndd eevvaalluuaattiioonn aasssseettss Our audit procedures included, but were not limited to: Refer to notes 3(b), 11, 12, 13 and 14 to the financial statements. At 31 July 2023 the Group’s consolidated statement of financial position included property, plant and equipment (PPE) of $1,770 million and intangible assets of $69 million. The Group also had exploration and evaluation (“E&E”) assets of $18 million. As disclosed in note 14, the Group performed an impairment indicator assessment across all E&E assets and cash-generating units (“CGUs”) to which PPE and intangible assets belong, including the NSW Mining CGU and the Queensland Coal Mining Operations 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 $6 million 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 allocated to the NSW Mining CGU and the Queensland Coal Mining Operations CGU, 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 outlined in note 3(b) and note 14, the Group recognised an impairment charge of $64 million in respect of Coal E&E related assets in the North Surat basin and Oil E&E assets. • • • • 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: - - - 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; Challenging the impact of the regulatory developments in respect of New Acland Stage 3; and Agreeing resources and reserves for the CGUs for CGUs to the latest approved resources and reserve statements. • Evaluating management’s assessment of indicators of impairment for E&E assets and impairments recognised including: - - - - 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; Assessing management’s intention and strategy in relation to continued exploration and evaluation activities for each relevant area of interest; 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 Reviewing approved budgets in relation to exploration and evaluation activity. • Assessing the appropriateness of the disclosures in notes 3(b), 11, 12, 13 and 14 to the financial statements. Annual Financial Report 2023 New Hope Group 110 149 New Hope GroupAnnual Report 2023 Independent Auditor’s Report continued Other Information The directors are responsible for the other information. The other information comprises the Directors’ Report, Shareholder Information, Corporate Directory, 2023 Oil Reserves and Resources and 2023 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, Tax Contribution Report and Sustainability 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 and will not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the Chairman’s Review, Chief Executive Officer’s Review, Tax Contribution Report and Sustainability 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. Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion. Annual Financial Report 2023 New Hope Group 111 150 New Hope GroupAnnual Report 2023 Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remunera-on Report Opinion on the Remunera/on Report We have audited the Remuneration Report included in pages 64 to 79 of the Directors’ Report for the year ended 31 July 2023. In our opinion, the Remuneration Report of New Hope Corporation Limited, for the year ended 31 July 2023, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. DELOITTE TOUCHE TOHMATSU Stephen Tarling Partner Chartered Accountants Saeed Seedat Partner Chartered Accountants Brisbane, 18 September 2023 Brisbane, 18 September 2023 Annual Financial Report 2023 New Hope Group 112 151 New Hope GroupAnnual Report 2023 Shareholder Information Ordinary Shareholdings As at 13 September 2023 there were 21,352 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 Holding less than a marketable parcel Number of Shareholders Fully Paid Ordinary Shares Number of Performance Rights Holders 7,187 3,408,775 7,475 20,956,324 3,270 25,038,496 3,204 85,719,513 216 710,212,356 21,352 845,335,464 483 12,688 – – 3 17 4 24 Performance Rights – – 20,549 390,410 1,510,550 1,921,509 152 New Hope GroupAnnual Report 2023 Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory The names of substantial shareholders as disclosed in substantial shareholder notices received by the Company: Shareholders Washington H Soul Pattinson and Company Limited Number of Shares 331,696,418 20 largest shareholders as disclosed on the share register as at 13 September 2023 Washington H Soul Pattinson and Company Limited HSBC Custody Nominees (Australia) Limited J P Morgan Nominees Australia Pty Limited Citicorp Nominees Pty Limited BNP Paribas Noms Pty Ltd BKI Investment Company Limited eCapital Nominees Pty Limited < ACCUMULATION A/C> National Nominees Limited BNP Paribas Nominees Pty Ltd < AGENCY LENDING COLLATERA> HSBC Custody Nominees (Australia) Limited Bond Street Custodians Limited BNP Paribas Nominees Pty Ltd Farjoy Pty Ltd J S Millner Holdings Pty Limited Neweconomy com au Nominees Pty Limited <900 Account> Bindella Capital Pty Ltd BNP Paribas Nominees Pty Ltd ACF Clearstream HSBC Custody Nominees (Australia) Limited-GSCO ECA Taiheiyo Kouhatsu Inc Dixson Trust Pty Limited 331,696,418 115,608,768 67,710,815 47,304,268 14,457,416 12,950,952 11,738,168 11,195,522 8,030,000 7,454,699 6,533,450 5,396,861 4,798,100 3,229,197 2,638,839 2,500,000 1,871,442 1,494,858 1,454,000 1,445,596 % 39.24% 39.24% 13.68% 8.01% 5.60% 1.71% 1.53% 1.39% 1.32% 0.95% 0.88% 0.77% 0.64% 0.57% 0.38% 0.31% 0.30% 0.22% 0.18% 0.17% 0.17% Unquoted Equity Securities Number on Issue Number of Holders Rights issued under the New Hope Corporation Limited Employee Performance Rights Share Plan to take up ordinary shares 1,921,509 24 659,509,369 78.02% 153 New Hope GroupAnnual Report 2023Resources and Reserves 2023 Coal Resources and Reserves New Hope Group are pleased to announce the 2023 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. An updated pit design has also been incorporated within the Reserves, developed from updated geotechnical considerations. • The New Acland Resource and Reserves volumes (tonnes) remain unchanged from 2022 estimates, as there has been no mining undertaken over the period. • All remaining Resource and Reserves estimates remain unchanged from 2022. Coal Resources and Reserves are stated as at 31st May 2023. Coal Resources Deposit New Acland Bengalla1 Elimatta Collingwood Taroom Woori Total Notes on Resources: Status Mine Mine Exploration Exploration Exploration Exploration Coal Resources as at 31st May 2023 (Million Tonnes) (Coal Resources are Inclusive of the Reserves Reported Below) Inferred Indicated Measured 2023 Total 2022 Total 16 23 43 94 122 42 340 193 166 86 139 338 67 989 285 161 110 43 – – 494 350 239 276 460 109 494 361 239 276 460 109 599 1,928 1,939 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. 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). The updated resources for Bengalla are based on an updated geological model along with the current extents of mining. New Acland, Elimatta, Collingwood, Taroom and Woori have been re-quoted from the 2022 New Hope Group annual report. The resource estimates are based on information compiled by Ms Carrie Schuler, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Ms Schuler 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’. 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. 154 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Coal Reserves Status Mine Exploration Mine Exploration Deposit New Acland1 Elimatta Bengalla2 Taroom Total Notes on Reserves: Coal Reserves as at 31st May 2023 (Million Tonnes) Recovered Reserves Marketable Reserves Probable Proved Total 2023 Total 2022 Probable Proved 121 26 45 207 399 245 86 121 – 452 366 112 166 207 851 366 112 183 207 868 66 16 34 130 246 134 56 95 – 285 1. 260Mt of Recoverable Reserves require additional approvals beyond Acland Stage 3. 2. Figures shown are 100% of total Reserves. New Hope Group share is 80%. 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. 155 New Hope GroupAnnual Report 2023Reserves and Resources continued 2023 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 2023) Oil Equivalent (Mboe) Net Contingent Resources (As at 31 July 2023) Oil Equivalent (Mboe) Notes on Resources and Reserves: 1P 2,150 1C 6,761 2023 2P 6,865 2023 3P 12,087 2C 3C 12,308 24,568 1P 2,379 1C 6,139 2022 2P 6,216 2022 3P 11,209 2C 3C 10,951 21,601 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 12 month period 1 August 2022 to 31 July 2023, 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 115 1P, 557 2P and 923 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. 156 New Hope GroupAnnual Report 2023Directors’ Report Auditor’s Independence Declaration Financial Report Directors’ Declaration Independent Auditor’s Report Shareholder Information Resources and Reserves Corporate Directory Corporate Directory Directors Robert D. Millner AO 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 Lucia A. Stocker Non Executive Director Company Officers Robert J. Bishop Chief Executive Officer Rebecca S. Rinaldi Chief Financial Officer Dominic H. O’Brien Executive General Manager and Company Secretary Auditors Deloitte Touche Tohmatsu Level 23, Riverside Centre 123 Eagle Street Brisbane QLD 4000 Principal Administration and Registration Office Level 16, 175 Eagle Street Brisbane QLD 4000 Telephone: (07) 3418 0500 Facsimile: (07) 3418 0355 Website 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 i ® n g s e D M D M 157 New Hope GroupAnnual Report 2023 

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