Peabody Energy
Annual Report 2013

Plain-text annual report

A n n u A l R e p o R t 2 0 1 3 A Bathurst Resources (New Zealand) Limited Annual Report 2013Bathurst is focused on becoming new Zealand’s pre-eminent coal producer, delivering high quality coal into export markets and producing affordable energy for the domestic industrial markets. during the year the company completed its move to new Zealand and from 1 July 2013 commenced trading as Bathurst Resources (new Zealand) limited. Bathurst is now firmly established as a new Zealand company. Bathurst also worked steadily towards gaining full approvals for its escarpment project. whilst the company has faced appeals every step of the way throughout the legal process, every issue has been determined in favour of Bathurst. the company is confident of gaining full approvals and aims to commence operations at its flagship escarpment project by year end. B 01 3 1 0 2 — 2 1 0 2 s n o i t A R e p o f o w e i v e R A n n u A l g e n eR A l m e e t i n g o f s h A R e h o l d eR s To be held at 3.30pm on Thursday 31 October 2013 at the offices of Chapman Tripp, Level 17, 10 Customhouse Quay, Wellington. All dollar amounts referred to in this report are expressed in New Zealand dollars unless otherwise noted. Bathurst Resources (New Zealand) Limited Annual Report 2013Section 01 Bathurst is focused on becoming New Zealand’s pre-eminent coal producer, delivering high quality coal into export markets and producing affordable energy for the domestic industrial markets. During the year the company completed its move to New Zealand and from 1 July 2013 commenced trading as Bathurst Resources (New Zealand) Limited. Bathurst is now firmly established as a New Zealand company. Bathurst also worked steadily towards gaining full approvals for its Escarpment Project. Whilst the company has faced appeals every step of the way throughout the legal process, every issue has been determined in favour of Bathurst. The company is confident of gaining full approvals and aims to commence operations at its flagship Escarpment Project by year end. 01 Bathurst Resources (New Zealand) Limited Annual Report 2013o R N u M g i a R C R M R i a h C E v i T u C E x E - N o N The company is building a portfolio of assets aimed at value-enhancing growth, based on a strategy designed to diversify risk. 02  Bathurst Resources (New Zealand) Limited annual Report 2013 03 R o T C E R i D g N i g a N a M N a N N a h o B h s i M a h R M Bathurst is proud to be a member of New Zealand’s sustainable Business Council and proud to be part of an industry that strives to set high standards in sustainable resource development. 04 05 Bathurst Resources (New Zealand) Limited Annual Report 2013T R o P E R L a u N N a D E T i M i L ) D N a L a E Z W E N ( s E C R u o s E R T s R u h T a B 3 5 2 8 3 4 R E B M u N y N a P M o C D N a L a E Z W E N 06     10 16 30 38 42 44 48 50 60 61 62 63 64 65 106 110 112 114 118 Contents s E C T i oN 1 Chairman and managing director’s report Review of operations Sustainability Our people Directors’ report Information on directors Remuneration report Corporate governance s E C T i oN 2 Income statements Statements of comprehensive income Balance sheets Statements of movements in equity Statements of cash flows Notes to the financial statements Independent auditor’s report s E C T i oN 3 Shareholder information Tenement schedule Coal resources and reserves Corporate directory 07 Bathurst Resources (New Zealand) Limited Annual Report 20131 n o i t C e S 08 09 Bathurst Resources (New Zealand) Limited Annual Report 2013g N i g a N a M D N a N a M R i a h C T R o P E R s ’ R o T C E R i D section 01 10 We are pleased to present our annual report and financial statements for the 2012/2013 year — a time of significant development, growth and investment as we followed through on our commitment to becoming a wholly New Zealand coal mining company. our focus throughout the year has been on growing our domestic position, to provide steady cash flow and a natural hedge against international price volatility — and to underpin the development of our export projects. in June 2013, the company closed its small Perth office, completing the redomicile from australia to New Zealand — the final step in the transition to becoming a New Zealand company. Bathurst is now a leading coal producer in the south island, supplying energy to major food and dairy processing industries. importantly, Bathurst’s coal is a key ingredient in the production of cement necessary for the Christchurch rebuild, and is the main fuel source for heating community facilities like schools, hospitals and swimming pools. 11 Bathurst Resources (New Zealand) Limited Annual Report 2013g N i g a N a M D N a N a M R i a h C T R o P E R s ’ R o T C E R i D E s C a R P M E N T PR o J E C T appeal to the Court of Appeal. Bathurst The company is now in the final has opposed that application. At the time stages of the legal process for the of writing, the hearing date to consider consenting of the flagship Escarpment the application was yet to be set. The Project on the Denniston Plateau interim Environment Court decision was near Westport. Escarpment will appealed on some alleged errors in law. produce up to one million tonnes of Most of these were either dismissed or hard coking coal a year, create around withdrawn with two points referred back 225 new jobs, and inject an esimated to the Environment Court in June. The $1 billion into the New Zealand Environment Court has subsequently economy over the life of the project. issued a further interim decision advising that consent is indicated subject to A panel of independent environment final minor drafting on conditions. commissioners granted the necessary The company is now awaiting a final resource consents for the project on decision from the Court. The appeal on 26 August 2011 after considering the climate change issue, which has dozens of submissions on the been in conjunction with Solid Energy matter. However, the consents were New Zealand Limited, was run separately subject to three appeals. The first and appealed through to appeal by the Fairdown-Whareatea New Zealand’s highest court, the Residents’ Association was resolved Supreme Court. The appeal was by mediation. The other two dismissed in September. In the appeals, relating to environmental meantime, the company remains impacts and climate change, were committed to a mediated settlement brought by the Royal Forest & Bird with Forest and Bird, as well as the many Protection Society of New Zealand other stakeholders on the plateau and Incorporated (Forest and Bird) and believes that a responsible resource West Coast Environment Network. programme can provide both community and environmental gains. Bathurst In March the Environment Court has also seen increased and active delivered an interlocutory decision on support from the local community the relevance of the Sullivan permit for the Escarpment Project with the to the Escarpment Project, as well as creation of a new and independent group an interim decision to grant Resource of West Coast businesspeople and Consents subject to the clarification of influencers who are concerned about conditions. The interlocutory Sullivan the economic future of the region. decision was appealed to the High Court and the appeal was declined. Forest While this has been a long process, and Bird then made an application to the company has not lost a single point the High Court for leave to appeal to the of law and is confident of a positive Court of Appeal. This was also declined final resolution in the near future. We and Forest and Bird have subsequently are excited that mining at Escarpment made an application for special leave to should commence shortly and have 12 Section 01 started upgrading the access road to an experienced company director The 2012/2013 financial year has the mine in anticipation of production. and engineer with extensive energy been a busy year and while we have sector experience.With the addition been focused on progressing our The first production from the Buller of Messrs Kapea and Frow, the Board flagship Escarpment Project, Bathurst operations is from the Cascade mine is now predominately comprised of is pleased at the substantial growth which sits on the edge of the Denniston New Zealand directors. During the achieved in the domestic market, and Plateau. Production has increased year, the company was also pleased looks forward to being in production from 45,000 tonnes per annum (tpa) to to welcome on board Simon Doig as at Escarpment in the near future. target 150,000 tpa. The coal is largely Executive General Manager Marketing sold for cement production to the local and Business Development, Marshall In closing, we would like to acknowledge plant. During the reporting period, the Maine as Chief Financial Officer, the efforts of our fellow directors, company also completed the second Alison Brown as General Counsel, managers and staff. We would also like stage upgrade of the new $5 million coal and Mike Cameron as General to extend our thanks and appreciation storage facility at the Port of Westport, Manager — Buller Operations. to our shareholders. Bathurst’s directors providing a much needed facility at the and executives are fully committed port and a boost to the local economy. In Between the people we have to being a successful New Zealand Southland, Bathurst’s Takitimu operation recruited locally and those who have coal company, and we look forward met the increased local demand for come back from offshore Bathurst to your continued support. thermal coal, without incident to safety now employs around 100 staff and or the environment. Production is contractors in New Zealand, most of now well established at Coaldale, and them Kiwis. Those numbers are set to the final rehabilitation of the original rise dramatically with our expanding Takitimu pit has commenced, which will operations on the West Coast. ultimately return the land to pasture. F i N aN C i aL R E s uLTs Bathurst has continued to acquire new With NZD $13.8 million cash at 30 June positions in the South Island, with our 2013, it is clear that there has been an permit acquisitions supporting our ongoing reduction on our reserves from development plans for the company. the AUD 53.8 million at the beginning The company is continuing to acquire of the year. Some of this has been exploration permits for both domestic invested in the development process and export production and now has for Escarpment, the new coal storage significant land positions on the South facility at the Port of Westport, as well as Island, as well as a smaller position land acquisitions for the Buller project, near Taranaki in the North Island. upgraded domestic production and PE o P L E strategic land and leases in Southland. Craig Munro, Chairman In line with redomiciling to New Zealand, Our domestic production showed the company was pleased to appoint revenue of NZD $41.0 million two new directors to the Board — and, with the new contracts and Toko Kapea, a Wellington-based production rates, is expected to be commercial lawyer, specialising in cash flow positive during this year. Māori development, and Dave Frow, 13 hamish Bohannan, Managing Director Bathurst Resources (New Zealand) Limited Annual Report 2013n o t S i n n e D 14 Section 01the Denniston Plateau has a proud mining history stretching back more than 100 years. Decades of mining in the area has shown that coal isn’t everywhere on the Plateau. it only exists in pockets. Bathurst will take a holistic approach to mining on the Plateau to balance the needs of West Coast people, the local economy and the environment. 15 Bathurst Resources (New Zealand) Limited Annual Report 2013PE R M iT s a N D P R o s P E C T s e S Ca rPm e n t W h a r e at e a W e St Coa lBr o o kD a l e D e eP C r e e k mi l l e r to n no r t h no r t h B u l l e r s N o i T a R E P o F o W E i v E R 16 Section 01 B u L L E R C o a L P R o J E C T Approvals with conditions appropriately framed, Bathurst’s flagship development is the During the year the company made consent was likely to be granted. Buller Coal Project — a high quality considerable progress towards gaining export coking coal operation, targeting full consents for the Escarpment Project. This decision was also appealed in a 3 million tonne per annum production April by Forest and Bird and WCEN profile by 2019. It is located on the A significant step was the granting to the High Court on twelve alleged West Coast of the South Island — in of the Access Arrangement by the errors in law. The High Court heard all a region long recognised as one of Minister of Conservation, Hon Dr Nick these appeals during the last week in New Zealand’s most significant coal Smith. The Access Arrangement gives May. Prior to the hearings Forest and areas with a proud history of mining Bathurst permission for open cast Bird and WCEN withdrew four of the dating back to the 1800s. The area coal mining at Escarpment which is alleged twelve errors in law in relation produces valuable hard coking coal, on ground held by the Department of to the interim decision and during sought by steel makers all over the world. Conservation as stewardship land. the course of the hearings a further three points of law were withdrawn. The Buller Coal Project is divided into In June 2013, the Minister of North and South Buller. The South Conservation also announced his In judgments given in June, Justice Buller permits comprise the Cascade, intention to grant a Concession Fogarty of the High Court dismissed the Escarpment and Coalbrookdale Mining for the haul road for Escarpment. appeals on Sullivan, and three of the Permits and the Whareatea West and This was publicly notified in remaining five points of law in relation Deep Creek Exploration Permits. August with a hearing to consider to the interim decision. He referred the submissions held in September. remaining two points of law back to the Bathurst’s North Buller prospects Environment Court for reconsideration. include Millerton North, North Buller, In terms of the legal processes, on 21 These were considered in a reconvened Seddonville, Ngakawau, Blackburn and March 2013 the Environment Court hearing of the Environment Court on Coal Creek. All the permits are intended issued a decision on a preliminary legal 12 June where submissions were also to be developed as open cast mines. point holding that the Sullivan Coal received on the proposed conditions s o u T h B uL L E R Escarpment Mining Licence (Sullivan) adjoining of the resource consents. The judge the Escarpment Project is not a part requested some further information of the ‘existing environment’ that be supplied following the hearing. Bathurst’s main focus continues to would otherwise trigger a need for This was provided by the company. be on finalising the resource consenting assessment of cumulative effects. for Escarpment, located on the In July Forest and Bird applied to the Denniston Plateau, fourteen kilometres In April, this decision was appealed to High Court for leave to appeal the north east of Westport. Escarpment is the High Court on two points of law by Court’s decision on Sullivan to the expected to initially produce 200,000 the Royal Forest and Bird Protection Court of Appeal. This application was tonnes of export coking coal per annum Society of New Zealand Incorporated opposed by the company and the High building rapidly to 500,000 tonnes once (Forest and Bird) and the West Coast Court refused the requested leave on the mine is in full production Environmental Network Inc. (WCEN). 12 July. On 2 August Forest and Bird and coal is being trucked from the applied to the Court of Appeal for special plateau, then increasing to 900,000 tpa On 27 March the Environment Court leave to appeal the Sullivan decision.  annum when all infrastructure is in place. issued a positive interim decision on the This application has been opposed by Escarpment Project. The Court said that, the company but has yet to be heard. 17 Bathurst Resources (New Zealand) Limited Annual Report 2013s N o i T a R E P o T R o P x E On 7 August 2013 the Environment announced its intention to close its Court issued a second interim decision Westport operation within two to advising that consent was indicated three years. At that time, the Cascade for the Escarpment Project, subject to product will be exported, either as a final minor drafting on conditions of coking coal blend or directly into the consent. The company has responded lucrative ferro-silicon metals market. on this and is now awaiting the final decision from the Environment Court. Earlier drilling confirmed significant additional resource in the Cascade area. The legal process around whether During the year Bathurst was granted an or not climate change issues (i.e. Extension of Land for Cascade to include greenhouse gas emissions from the an adjacent area under the existing burning of New Zealand coal in foreign Mining Permit to enable safe access countries) should be considered as to the additional coal. Environmental part of a resource consenting process approvals were granted by the was heard separately. The original Department of Conservation and by decision in Bathurst’s favour was handed the district and regional councils for the down by the Environment Court. This commencement of mining activities in was appealed and heard in the High the new area. The workforce at Cascade Court, where the original decision was temporarily increased and additional was upheld.  This was appealed again plant and equipment put in place to and Bathurst, together with the other undertake a major cutback which appellants, was successful in having exposed the next large block of coal. the matter escalated to the Supreme Court (New Zealand’s highest court), The mine achieved record production bypassing the Court of Appeal. The during March of over 16,000 tonnes, matter was heard in Wellington on well exceeding the target of 5,800 12 and 13 March, 2013. On 19 tonnes. Production slowed while the September 2013 the appeal was cut back was undertaken however dismissed in the Supreme Court. coal winning operations are now C a s Ca D E The operating Cascade mine forms back on schedule. Cascade employs 30 staff and 10 contractors. part of the South Buller operation. The next areas in South Buller for Cascade has historically produced development are the Coalbrookdale approximately 45,000 tonnes per annum and Whareatea West blocks of high value coal however production which are located immediately has now increased to target 150,000 adjacent to Escarpment. tonnes per annum. Cascade coal is a semi soft coking coal which is being C o a L B R o o k D a L E a N D W h a R E aT E a sold into the domestic market, largely WE s T for the manufacture of cement. The Coalbrookdale is fully consented for local cement producer has recently underground mining but however 18 Section 01 development is not planned until market conditions improve. Bathurst will apply for opencast consents for parts of the deposit which can then be developed as an extension of Escarpment. Further work is underway in preparation for this. Whareatea West, which adjoins the Escarpment permit’s western boundary, is an Exploration Permit. The company is currently gathering data in preparation for the consenting of this area of operation. During the year a further 26 holes were drilled in the permit to determine the extent of the resource in preparation for mine planning as part of the consenting process. N oR T h B uL L E R The North Buller projects lie north of the Stockton Plateau. All the North Buller projects are contained within two separate Exploration Permits, Buller and Coal Creek. Preliminary analysis indicates that the low ash, higher sulphur coal from this area can be blended with South Buller coal to produce a premium product. The location of the washplant for South Buller, at a stockpile site on the coastal plain, negates the requirement for duplicated infrastructure for coal handling from the North Buller region. Coal will be trucked some twenty kilometres from the North Buller sites to the stockpile area for beneficiation and loading onto rail for export through the ports of Westport or Lyttelton. 19 Bathurst Resources (New Zealand) Limited Annual Report 2013B u l l e r s N o i T a R E P o T R o P x E 20 Section 01 the Buller Coal Project is located on the West Coast of the South island — in a region long recognised as one of new Zealand’s most significant coal areas with a proud history of mining dating back to the 1800s. the area produces valuable hard coking coal, sought by steel makers all over the world. 21 Bathurst Resources (New Zealand) Limited Annual Report 2013o P E R aT iN g M iN E s Ca S CaDe ta k i t i m u Ca n t e rBu ry C oa l s N o i T a R E P o C i T s E M o D PE R M iT s a N D PR o s P E C T s oh a i alBu ry neW B r i g h to n ta r a n a k i 22 Section 01 Ta k i T i M u rail line. It is prospective for high new three year supply contract with a The Takitimu mine is located at grade sub-bituminous coal and has local dairy processor which will underpin Nightcaps, north of Invercargill. Mining potential to add substantially to the the purchase of the Canterbury Coal operations originally commenced at life of the Takitimu operations. mine. Production from the mine is Nightcaps in 1881. Sub-bituminous expected to grow from 36,000 tpa coal from the open cut operation is This acquisition will provide a sound to more than 75,000 tpa by FY17. A railed to a number of major industrial platform for the development of resource statement has been prepared customers in the Southland, Otago Bathurst’s domestic coal strategy. The for Canterbury Coal of 3.3 million and South Canterbury areas. coal from New Brighton will be sold into tonnes (0.9 million tonnes indicated new and existing domestic contracts and 2.4 million tonnes inferred)*. In January, Bathurst completed the and may be considered for export at a acquisition of the land immediately later date. A consent has been granted a L BuR y adjacent to Takitimu to gain access to by the Southland District Council for a The Albury project, located 40 the Coaldale block — the next stage of bulk sample to be taken for trials with kilometres west of Timaru, was an the Takitimu mine. This was a strategic potential offtake partners. On the basis historic underground and open cut mine acquisition that has substantially of this acquisition Bathurst was able worked from the early 1900s through improved the project economics to extend its major Southland contract to the mid 1960s. The mine produced at Takitimu. The coal resource in for supply to the dairy industry for a low rank sub-bituminous coal for local the main Takitimu pit has now been further seven years from 1 July 2013. sales. The Albury Prospecting Permit depleted and Coaldale is the focus of was originally 838 square kilometres operations. The original Takitimu pit In August 2013 a resource but areas of non-coal bearing strata is being progressively backfilled and statement was issued for New have been relinquished. An Exploration rehabilitated to pasture land. The next Brighton of 4.2 million tonnes Permit was granted for 34.8 square target for expansion will be into the Black (0.7 million tonnes indicated and kilometres of the most prospective Diamond block which lies to the north 3.5 million tonnes inferred)*. area within the Prospecting Permit of Coaldale, within the Ohai Exploration boundary. The area now held under Permit. Negotiations have commenced C a N T E R B u R y C o a L the Prospecting Permit has been with the landowners to gain access. In August 2013, Bathurst announced the reduced to 328.7 square kilometres. A conditional acquisition of the Canterbury programme of low impact exploration A tender for mining services for Coal mine. The Canterbury Coal mine is during 2012 delivered encouraging the Coaldale block was awarded to an open cast mine near Coalgate which results and a bulk sample was taken for mining contractor, Stevenson Mining is 70 kilometres west of Christchurch. trials to assess the suitability of the coal Limited. Takitimu employs 14 staff The mine produces thermal coal which for energy production for local industry. and approximately 33 contractors. is low in sulphur and ash and in high The trials were positive and further demand by the local dairy and food exploration is planned to determine NE W B R i g h T o N processing industries. It is of a similar the next stages for development. During the year Bathurst added to specification to the Takitimu coal which its thermal coal holdings by signing supplies other dairy processing plants. i N F R a s T R u C Tu R E an agreement to purchase the New Bathurst has been operating the mine Stage 1 of the port upgrade at Westport Brighton Exploration Permit from under a binding heads of agreement Harbour was completed in December L & M Coal Limited. This permit is since 1 February 2013 as part of a due 2012 with the construction of a in close proximity to the Takitimu diligence evaluation. During this time NZ$5 million covered storage shed. mine and is connected by the same Bathurst was successful in winning a The shed is located on the river side 23 * Refer Competent Persons Statement (Page 117) Bathurst Resources (New Zealand) Limited Annual Report 2013s N o i T a R E P o C i T s E M o D 24 Section 01 t a k i t i m u Bathurst’s takitimu operation met the increased local demand for domestic coal, without incident to safety or the environment. Production is now well established at Coaldale, and the final rehabilitation of the original takitimu pit has commenced, which will ultimately return the land to pasture. 25 Bathurst Resources (New Zealand) Limited Annual Report 2013s N o i T a R E P o C i T s E M o D of the port and utilises existing coal P R oD u C T i oN loading infrastructure. It will be used as Bathurst operates two coal mines in a storage, blending and ship loading New Zealand: the Takitimu mine and facility that will eventually have the the Cascade mine. Production figures capability of loading vessels either at of Takitimu and Cascade for the year the river wharf or at the inner harbour. ended 30 June 2013 are set out below. Initially coal will be trucked to the facility and received via an overhead conveyor. At a later stage the coal will be transported to the shed by rail. E x P L oR aT i oN During the year up to five rigs were operating in the Buller Coal Project areas. Early in the year drilling was concentrated on the West of the Denniston Plateau with drilling programmes being undertaken in the Escarpment  and Whareatea West permits. Drilling was also undertaken with three rigs in the North Buller project area, on the Ngai Tahu estate, and in the Cascade mine area. Results were encouraging, with coal being intersected well outside the previously mapped limits. Overall 168 holes were drilled across the North and South Buller areas. In December one rig was transferred to the Bathurst domestic projects, initially at Canterbury Coal and then on the New Brighton and Ohai permits. A further 28 holes were drilled across these permits. Operation P r o d u c t i o n ( t ) o v Er b u r d En ( b c m ) Takitimu 184,589 2,555,274 Cascade 58,832 1,837,808 Total 243,421 4,393,082 B aT h u R s T C R o s s E s T h E Ta s M a N In early April 2013 Bathurst announced its intention to redomicile to New Zealand from Australia to become a truly New Zealand company. Bathurst’s projects were all in New Zealand and nearly all of the company’s employees were in New Zealand so it made sense to move the company itself. A shareholders’ meeting on 12 June 2013 approved the proposal which took place by way of a ‘Scheme of Arrangement’. This was implemented on 28 June. Shareholders were issued shares on a one for one basis in a New Zealand incorporated company, Bathurst Resources (New Zealand) Limited. The new entity is listed on both the NZX and the ASX and commenced trading on 1 July 2013 under the code BRL. Overall 196 drill holes were drilled in the last financial year until exploration was scaled back and all drill rigs progressively demobilised. Drilling was suspended over the winter months while data was analysed and further exploration programmes planned. N E W T o T h E B a T h u R s T T E a M Fiona Bartier joined Bathurst as Consents Manager in September 2012. In August 2013 Fiona was appointed General Manager — Projects and Planning. 26 Section 01 In November 2012 Simon Doig was appointed Executive General Manager — Marketing Revenue from operations and Business Development. Bathurst announced the appointment Deferred consideration fair value, foreign exchange and unwinding adjustments of Chief Financial Officer, Marshall Foreign exchange loss Maine, in February 2013. Share based payments Alison Brown was appointed as Impairment reversal General Counsel for Bathurst in April. Raw materials, mining, freight and other costs Bathurst appointed Mike Cameron to the role of General Manager - Buller Operations, in July 2013. Loss before income tax Income tax expense Loss for the year after tax $ 0 0 0 ’ s 41,024 (6,870) (1,813) (1,766) 6,618 (53,147) (15,954) (4,485) (20,439) Also in July, with the completion of the redomicile, two New Zealand based directors, Toko Kapea and Dave Frow, were appointed to the Board of Bathurst Resources (New Zealand) Limited. F i Na N C i a L The group made a net loss before tax of $0.4m for the period 27 March 2013 to 30 June 2013. During the period, Bathurst Resources successfully redomiciled from Australia to New Zealand. Bathurst Resources (New Zealand) Limited became the ultimate parent of the Bathurst Group, comprising Bathurst Resources Limited and its subsidiaries. The group redomicile and reorganisation were enacted via a scheme of arrangement between Bathurst Resources Limited and its shareholders on 28th June 2013. In accordance with the Financial Reporting Act 1993, the group includes Pro forma numbers refer to note 30 of the financial statements. the results and balances of subsidiaries The group had $13.8m of cash from the day on which they were and short term deposits on subject to the scheme reorganisation. hand as at 30 June 2013. The Bathurst Resources Group, Additional information for the Bathurst assuming the consolidation of subsidiary Resources Group presented on results for the full year ended 30 June, this basis is included in note 30 would have recorded a net loss before to the financial statements. tax of $16.0m (2012: $33.3m loss). During 2012, the Eastern Coal Business was impaired primarily as a result of a supply contract with negative margins. A renegotiation of this contract in 2013 and further business improvements have resulted in a reversal of this impairment charge of $6.6m. On the same continuing group basis, cash outflows for the year ended 30 June 2013 were $55.4m. This outflow includes $24.8m of capital spend and a further $10m of exploration spend. 27 Bathurst Resources (New Zealand) Limited Annual Report 2013 28 Section 0129 Bathurst Resources (New Zealand) Limited Annual Report 2013y T i L i B a N i a T s u s Responsible resource use is the principle that drives all of Bathurst’s activities. This principle applies to the company’s approach to sustainable development and management of social and environmental performance. This means everything the company does is guided by a commitment to shareholders, employees, local communities and, importantly, the environment. Bathurst’s commitment is backed by a significant investment of time and money to ensure social and environmental impacts are managed from design and planning through to production and eventually rehabilitation. The ultimate aim is to ensure our operations enable society to meet its present needs without compromising the ability of future generations to meet their needs. Every year, public focus on environmental issues deepens, and the decisions people make as custodians of the world’s scarce resources grow increasingly important. Bathurst has recently adopted a comprehensive health, safety, Environment and Community (hsEC) management framework to guide the company’s decisions on responsible resource use and the impact of its activities. The hsEC management framework will ensure Bathurst’s policies and procedures are up to date, that leadership is committed to delivering value and that the company is held to account for the impact of its activities. 30 Section 01R E v i E W & i M P R o v E M E N T our auditing, review and improvement standard ensures that site management regularly evaluates our performance and completes the cycle of continuous improvement M a N a g E M E N T s y s T E M P L a N Ni N g our planning standard requires compliances to be identified, resources allocated, targets defined, and audit/review schedules to be developed. M E a s u R E M E N T i M P L E M E N TaT i o N Each of our standards and expectations is being tracked and measured to ensure effective implementation A detailed implementation matrix describes how the site will deliver on each of our standards and expectations 31 Importantly, the principle of continuous improvement applies to all HSEC issues, which means ongoing review and performance improvement. In the months and years ahead, Bathurst will use the HSEC system for managing and reporting health, safety, environment and community issues. h E a LT h a N D s a F E T y o F P E o P L E Bathurst Resources believes all accidents are preventable: the company’s focus is on zero harm and it takes responsibility for the care and consideration of its employees. Bathurst has implemented rigorous programmes so staff learn to expect the unexpected. Staff are trained so that they fully understand what they should do and the company is open to suggestions on how to improve those processes. Bathurst wants to make a difference and believes that it has a duty to set an example. The mines operate under established Health and Safety systems that include Major Hazard Management Plans. The introduction of new risk management tools has increased the hazard awareness at all sites. If things do go wrong, Bathurst is geared up to respond. The implementation of the Pike River Inquiry recommendations is ongoing. Bathurst is participating with other industry people to assist in the implementation process and will be Bathurst Resources (New Zealand) Limited Annual Report 2013y T i L i B a N i a T s u s reviewing and updating existing systems be employed during exploration and in line with the recommendations. development, as well as during the actual mining activities. This includes EN v iR o N M E N T techniques such as Vegetation Bathurst Resources respects the Direct Transfer to preserve flora. focus and drive of New Zealanders committed to protecting the Additionally, this year Bathurst has environment and understands the commenced a programme of work cultural importance of the local to develop a new environmental landscape and natural resources. management system. This will be developed to provide a systematic The company’s operations are approach that guarantees compliance conducted with deference to the impact with relevant laws and approvals, mining has and its methods allow it Bathurst’s environmental policy and not only to rehabilitate the land on operational standards, as well as which it works, but deliver an overall ensuring continual improvement of net gain back to the environment. Bathurst’s environmental performance. For example, Bathurst has committed B aT h uR s T k a i T i a k i g R o uP to a large programme of pest control The Bathurst Kaitiaki governance group on the Denniston Plateau, where it aims continued its work throughout the to start the Escarpment Project. Under reporting period, providing checks and an agreement with the Department of balances on the company’s activities. Conservation, 4500 hectares on and around the Denniston Plateau will be “Kaitiaki” is a Maori concept that means funded by $3 million for a biodiversity guardianship of the natural environment. enhancement project, including weed, pest and predator control. Mining The Kaitiaki Group advises Bathurst heritage on the plateau will also be on its efforts to achieve: enhanced with almost $600,000 — Environmental best practice allocated to mining preservation works. — Best practice decision making — Responsiveness to the changing Another $18 million will be spent by needs and expectations Bathurst in association with Department of stakeholders of Conservation funding pest and — a record of responsible predator control over 25,000 hectares environmental stewardship. of the Heaphy River catchment and in the Kahurangi National Park, to The Kaitiaki Group has continued to protect Great Spotted Kiwi, Kaka, Blue meet during the year, and has visited Duck, and Powelliphanta snails. both the Takitimu and Cascade mines, Bathurst has also devised a carefully Escarpment. The focus during the phased rehabilitation programme to year has been on two main areas. as well as the site of the proposed 32 Section 01 The members provided input into the In February, a successful open day was Coal Plateaux Reserves process, a multi- held at Takitimu. During the course of stakeholder consensus-building process the day around 400 local people took which is seeking to define reserves for the opportunity to learn more about biodiversity and related purposes on activities at the mine. Equipment displays the Denniston and Stockton plateaux. and information videos were set up at the local rugby club and escorted tours The group has also reviewed the ran continuously throughout the day development plans of Bathurst’s health, onto the mine site to give a first hand safety and environment management view of the actual mining operations. systems and is supportive of Bathurst’s emphasis on creating a culture In June a series of information sessions within the company that sustains were held at Waimangaroa Village to the right attitudes to those issues. update the local community on the Escarpment Project and trucking plans. The Kaitiaki Group’s next focus Over 40 people attended the sessions is to monitor the implementation which were conducted on a one-on- of the environment management one basis with Buller Coal management system to ensure it is applied on hand to answer questions. consistently across all operations. In 2012/2013, Bathurst continued to The group will also be working towards help local community groups achieve establishing a framework to ensure their goals and participated in a range any new project is considered in terms of community activities, including: of its overall net conservation gains. — Buller High School scholarship C oM MuN i T y to help fund university studies — Contribution to Caroline Bathurst Resources cannot operate in Bay Aquatic Centre a way that is efficient and sustainable — Sponsorship of Denniston without the support of the communities Hill Climb car rally in which it works. And it cannot expect — Sponsorship of Denniston Chain that support without participation. Grinder mountain bike event Bathurst works with a range of mountain bike race in Southland — Sponsorship of the Gowan stakeholders and businesses to — Sponsorship of the deliver benefits through its subsidiary Buller Rugby Union operations. As work continues on — support for Nightcaps the Escarpment Project, Bathurst is primary schools. engaging openly and transparently with local communities to ensure all views are heard and that the company can continue to focus on being a good neighbour. 33 Bathurst Resources (New Zealand) Limited Annual Report 2013The next year will be used to gather data and reflect on the health and safety, environment and community framework the company currently has in place. although Bathurst has existing policies and approaches, it’s always aware more can be done. as previously discussed, a number of changes to legislation are anticipated as part of the implementation of the Pike River inquiry process. The goal is a fresh hsEC management system that brings together Bathurst’s own learning and leading practice from around the world. Work on the Escarpment Project provides a natural template for any reform the company wishes to put in place. Change will come only after an intensive gap analysis which will take place over the next 12 months. The programme of work will include designing, planning and development of the hsEC system. This will include the implementation of an environmental management standard that is generally in accordance with iso 14001. as part of Bathurst’s obligations under its membership of the sustainable Business Council, the company will also publish a sustainability report, which will be enhanced over the next few years to meet the requirements of the global Reporting initiative. y T i L i B a N i a T s u s 34 Section 0135 Bathurst Resources (New Zealand) Limited Annual Report 201336 Section 0137 Bathurst Resources (New Zealand) Limited Annual Report 2013From top left: Richard Tacon, Simon Doig, Fiona Bartier, Sam Aarons, Marshall Maine, Alison Brown E L P o E P R u o 38 Section 01 R i C h a R D Ta C o N chief operating officer F i o N a B a R T iE R M a R s h a L L M a i N E General manager — Projects & Planning chief Financial officer and company secretary Since starting his career in the 1970s, Richard has Fiona Bartier is an environmental and resource Marshall Maine was previously a senior manager with worked in almost every role in the coal mining industry. scientist who has worked for government, in KPMG Corporate Finance, London, before moving His first job in the industry was at Greymouth’s research and education, for industry groups, and to New Zealand where he has held the role of Chief Liverpool State Mine, owned by the New Zealand for a range of mining companies. Fiona began her Financial Officer for various New Zealand companies Government. He moved to Australia to further his career as a forestry planner, helping the New South including Icebreaker Limited, NPT Limited and the mining career. Following his work at the coalface, Wales government move to more transparent and Summerset Management Group Limited. Marshall he went on to hold several management roles sustainable native forestry. She then moved into has strong competencies in corporate governance, in mines around Australia, working his way from a research role at the University of Queensland at risk management, financial modelling and capital undermanager to General Manager. Richard has the Centre for Mined Land Rehabilitation, where structures. He brings a new dynamic to the team held senior leadership roles for the past decade. she visited and worked at over 40 sites from coal through his varied experience in areas beyond Richard holds first, second and third class coal mining to mineral sands, bauxite and gold. For the past the resources sector. Marshall holds a degree in qualifications and studied at the Otago School of nine years, Fiona has lived in mining communities Accounting and Finance and is a member of the Mining. He has also spent 15 years on a rescue crew, in the Hunter Valley and Western coalfields of New Chartered Institute of Management Accountants (UK). making him familiar with the principles and practice South Wales, working first as a consultant, and then of mine safety. Richard is an ex secretary for the within industry in operations and projects. Fiona Australian Mine Managers Association. After living and holds a degree in Resource Science. She joined working in Australia for 32 years, Richard returned to Bathurst in 2012, based in the Wellington office. a L i s oN B R o W N New Zealand to take up his current post with Bathurst. General counsel sa M a a R o Ns Alison has had over 30 years’ legal experience in private law practices and as in-house counsel for commercial enterprises. She has specialised in si MoN D o i g General manager — corporate relations mining, environmental and climate change law after a Executive General manager — business Sam’s background is advertising, marketing and solid grounding in commercial law.  She has worked development and marketing commercial management. She worked with several variously for Simpson Grierson, Minter Ellison, the Simon’s career spans 15 years, encompassing major advertising agencies in Melbourne, before Minister of Foreign Affairs and Trade, taught legal business development, international marketing, spending 14 years as a Divisional General Manager for professionals, and was General Counsel for Solid business management, mining operations, managing Henry Walker Eltin, a large civil and mining contracting Energy New Zealand Limited from 2000 to 2011.   joint ventures with global partners, as well as board company (now Leighton’s Contracting). During this appointments and directorships, working across period she also served with the Royal Australian Navy a range of industries and diverse international Reserves as Public Relations Officer for the Darwin cultures. Simon has gained extensive experience in Port Division. She joined Eastern Resources Group in the international marketing and business disciplines Brisbane as Manager, Corporate Relations & Business primarily in the mining industry, and downstream Development, a position she held for eight years. Her steel and energy sectors. He holds a Bachelor of role with Eastern focused on growing the company’s Commerce (Marketing), and has ongoing executive mining operations in New Zealand, developing existing development at the Melbourne Business School tenements and sourcing new projects. Sam joined (Advanced Management & MBA studies). Prior the Bathurst team following its acquisition of the to joining Bathurst Simon held various senior Eastern assets and relocated to Wellington in 2011. executive roles at Solid Energy New Zealand and was previously a director of the Stockton Alliance, and the Coal Association of New Zealand. He is based in the company’s Wellington office. 39 Bathurst Resources (New Zealand) Limited Annual Report 2013M i k E C a M E R o N General manager — buller operations Mike has almost 20 years of international mining industry experience across a number of commodities, mining methods, and operating environments. He has been involved with the development of mining projects in Australia, Bulgaria, and South Africa, and has undertaken senior management roles at a number of mining operations. A proud South Islander, Mike returned home with his family in 2011 and worked as a Project Manager for Solid Energy, based in Nelson. He holds a Master’s of Science in Engineering Geology from the University of Auckland, supplemented by further post-graduate study at the Western Australian School of Mines. C R a i g P i L C h E R General manager — domestic Craig has extensive engineering experience with both coal-and oil-fired steam boiler installations and maintenance, as well as refrigeration, marine, plant maintenance and general engineering. Born in South Canterbury, Craig’s first career was as an A-grade fitter and welder, undertaking regular coal and oil steam boiler installations. After working as plant engineer and construction diver at the Port of Timaru, Craig became owner and director of a South Island coal supply business in 1997, distributing coal for Solid Energy in the area. The business was bought by Eastern Corporation in 2006, and Craig joined the company as marketing manager and then operations manager, playing a key role in the establishment and growth of the Takitimu and Cascade coal mines. Craig joined Bathurst in March 2011. He is based in Timaru at Bathurst’s coal handling and distribution centre. E L P o E P R u o 40 Section 01 41 Bathurst Resources (New Zealand) Limited Annual Report 2013T R o P E R ’ s R o T C E R i D Your directors present their report on the consolidated entity (“the group”) consisting of Bathurst Resources (New Zealand) Limited (“Bathurst” or “the company”) and the entities it controlled at the end of, or during, the year ended 30 June 2013. D i R E C T oR s The following persons were appointed directors of Bathurst Resources (New Zealand) Limited on 27 March 2013 (date of incorporation) or as otherwise stated. Craig Munro Non-executive chair Hamish Bohannan Managing director Rob Lord Non-executive director Malcolm Macpherson Non-executive director Toko Kapea Non-executive director (appointed 29 May 2013) Dave Frow Non-executive director (appointed 25 June 2013) 42 Section 01 P R iN C iP a L a C T i v i T iE s with New Zealand’s Department of on a regular basis and no instances of During the year, the principal continuing Conservation to enter and operate on non-compliance have been noted. activities of the group consisted of Crown land. The relevant authorities the production of coal in New Zealand are consulted throughout the Hazardous substances and the exploration and development approvals process, and to the best of Mining activities involve the storage of coal mining assets in New Zealand. the directors’ knowledge, all approval and use of hazardous substances, activities have been undertaken in including fuel. Bathurst must comply D i v iD E N D s compliance with the requirements of with the Hazardous Substances and New No dividend was paid or declared the RMA, Crown Minerals Act 1991 Organisms Act 1996 when handling during the current or prior financial year and Conservation Act 1987. hazardous materials. To the best of the and the directors do not recommend directors’ knowledge, no instances of the payment of a dividend. Exploration activities non-compliance have been noted. In order to enter Crown land and M aT T E R s s u B s E q u E N T T o T h E E N D engage in exploration activities, Emissions trading scheme o F T h E F i Na N C i a L y E a R Bathurst must enter into an Access The New Zealand Emissions Trading On 16 August 2013 Bathurst Arrangement with New Zealand’s Scheme (“NZ ETS”) came into effect announced the acquisition of Department of Conservation, as from 1 July 2010 which essentially the Canterbury Coal mine. required under the Crown Minerals makes Bathurst liable for greenhouse Act 1991. Bathurst has, to the best gas emissions associated with coal The acquisition is conditional on of the directors’ knowledge, entered sold in New Zealand and for the fugitive consent to assignments of various into all of the appropriate agreements emissions from coal seams exposed permissions, and the consent to the and acted in accordance with those in New Zealand. Bathurst’s liability transfer of the Mining Permit. agreements in regard to engaging in is based on the type and quantity of exploration activities on Crown land. coal sold, with the cost of such being E N v i R oN M E N T aL R E g uL aT i oN passed on to Bathurst’s customers. The Bathurst group’s exploration and mining activities Bathurst’s Emissions Trading Policy can mining activities are subject to a range of The mining activities of the group are be found on the company’s website. environmental regulations which govern regulated by the resource consents that how the group carries out its business. grant Bathurst the right to engage in the These regulations are set out below. mining activity. The resource consents involve both the District and Regional mine development approvals Councils. In addition to this, a mining Bathurst is required to obtain resource permit or licence is required to engage consents under the Resource in mining activities on Crown land. Management Act 1991 (“RMA”). These permits/licences are issued by A resource consent is required for the Minister of Energy under the Crown mining activities and the construction Minerals Act 1991. Conditions around and development of infrastructure water and air discharges that result from within the permit area. In addition to the mining operations are governed this, under the Crown Minerals Act by the resource consent that the 1991 and the Conservation Act 1987, operation is operating under. The mining Bathurst must enter into concession operations of Bathurst are inspected agreements and access arrangements 43 Bathurst Resources (New Zealand) Limited Annual Report 2013From top left: Craig Munro, Hamish Bohannan, Rob Lord, Malcolm Macpherson, Dave Frow, Toko Kapea, Graham Anderson, Marshall Maine s R o T C E R i D N o N o i T a M R o F N i 44 Section 01 From top left: Craig Munro, Hamish Bohannan, Rob Lord, Malcolm Macpherson, Dave Frow, Toko Kapea, Graham Anderson, Marshall Maine M R C R a i g M uN R o FcPA, FAusimm, FAicd Non-executive chair of New Zealand and Minerals West Coast. interests in shares and options 530,938 fully paid ordinary shares in Bathurst other current directorships of Resources Limited Craig Munro is a Certified Practising Accountant with listed companies 3,500,000 unlisted options over ordinary shares in over 45 years’ experience in the mining industry. He Nil Bathurst Resources Limited was previously Senior Vice President Corporate & Former directorships in last three years Finance, and Chief Financial Officer of Anvil Mining of listed companies Limited. He has been both an executive director Phillips River Mining Limited (previously Tectonic M R M aL C oL M M a C P h E R s oN and non-executive director of a number of listed Resources NL) — Non-executive chair bsc, cert.Acctg, FAicd , FAusimm, FtsE companies since 1990 including Aquarius Platinum special responsibilities Non-executive director Limited, Kroondal Platinum Mines Limited, and Managing director Malcolm Macpherson is an experienced business Gallery Gold Limited. He was formerly a director interests in shares and options leader in the resources sector in Australia and of Energy Minerals Australia Limited, Humanis 11,005,000 fully paid ordinary shares in overseas. Mr Macpherson held a successful seven Group Limited and Pegasus Metals Limited. Bathurst Resources Limited year tenure as Managing Director and Chief Executive 10,000,000 unlisted options over ordinary Officer of Iluka Resources Limited. Mr Macpherson other current directorships of shares in Bathurst Resources Limited has held board positions with other notable companies listed companies Nil Former directorships in last three years of listed companies M R R o B L o R D Energy Minerals Australia Limited — bsc, mbA 1,388,889 unlisted performance rights over shares and organisations such as Portman Limited, Eltin Limited, and Western Power Corporation (as chair). Mr Macpherson has also had active roles in research and innovation, including an advisory role to the CSIRO. Non-executive director Non-executive director other current directorships of Humanis Group Limited — Non-executive director Rob Lord is currently Regional Director Oceania for listed companies Pegasus Metals Limited — Non-executive director Wallenius Wilhelmsen Logistics AS, a global shipping Base Resources Limited special responsibilities Chairman of the Board and logistics company specialising in the movement – Non-executive chair of vehicles and heavy and specialised cargo such Titanium Corporation Limited Member of remuneration & nomination committee as mining, construction and resources equipment, – Non-executive director Member of audit committee interests in shares and options rail cars and power generators. Prior to this he Former directorships in last three years was the Managing Director and Chief Executive of listed companies 2,462,526 fully paid ordinary shares in Bathurst Officer of Gloucester Coal Limited a successful Minara Resources Limited Resources Limited ASX 200 publicly listed company specialising in – Non-executive chair 2,500,000 unlisted options over ordinary coal mining and marketing. Before his appointment Range River Gold Limited shares in Bathurst Resources Limited at Gloucester Coal, Mr Lord worked in the pulp – Non-executive director and paper industry for 19 years, most recently Pluton Resources Limited as Executive Vice President responsible for the – Non-executive chair M R ha M i s h B o h a N Na N Australasian operations of Norwegian-based Norske special responsibilities bEngsc Hons m ining, mEngsc r ock mechanics, Skog. Mr Lord has also worked in a variety of senior Chair of remuneration and nomination committee mbA, FAusimm, cEng, mimm, mAicd international marketing and sales roles including Member of health, safety, environment Managing director head of marketing and sales roles at Norske Skog and community committee Hamish Bohannan is a mining engineer with 36 Australasia, Fletcher Challenge Paper Australasia Member of the risk committee years’ experience in the resources industry, starting and Tasman Pulp and Paper in New Zealand. Mr interests in shares and options as a miner with Gold Fields Limited in South Africa Lord is a director of Norske Skog Industries Australia 100,000 fully paid ordinary shares in before completing a degree at the Royal School of Limited which is an unlisted public company. Bathurst Resources Limited Mines. Whilst much of his experience has been in 2,000,000 unlisted options over ordinary shares in underground mining, he has been actively involved other current directorships of Bathurst Resources Limited in many areas of the industry including dredging listed companies and open cut mining, processing and smelting, Nil having worked around the globe in various metals Former directorships in last three years M R D av E F R o W from copper and gold to nickel and mineral sands. of listed companies Previously Chief Executive Officer of Braemore Nil bscEng Non-executive director Resources, Mr Bohannan has also held executive special responsibilities Dave Frow is a widely experienced company director, positions with Cyprus Minerals, WMC Limited, Chair of audit committee chief executive officer and engineer who has played Iluka Resources and IAMGold. Mr Bohannan Member of risk committee an extensive and successful role in a number of is a director of Straterra, the Coal Association industries. He has held directorships of a wide 45 Bathurst Resources (New Zealand) Limited Annual Report 2013 s R o T C E R i D N o N o i T a M R o F N i range of organisations from listed companies to other current directorships of small entrepreneurial start ups. He has particular listed companies expertise in the energy sector with experience in Nil New Zealand, South Africa, England and Scotland. As Former directorships in last three years Chief Executive Officer of the Electricity Corporation of listed companies of New Zealand he led the company through a Nil period of major reform in the energy industry. Mr special responsibilities Frow is currently a director of Aurora Energy Limited, Chair of risk committee Delta Utility Services Limited, Holmes Fire LP, Member of health, safety, environment ETEL Limited, and ETEL Transformers Pty Limited and community committee (Australia). He also provides energy consulting interests in shares and options and executive mentoring services. Mr Frow has a Nil mechanical engineering degree and is a graduate of the Harvard Business School Advanced Management Programme. He was honoured as a Fellow of the Institute of Professional Engineers of New Zealand and is a member of the Institute of Directors. C o M Pa N y s E C R E Ta R y g R a h a M a N D E R s o N Joint Company secretary Graham Anderson was appointed Joint Company Secretary on 25 October 2012 and became sole Company Secretary for Bathurst Resources Limited upon the resignation of Timothy Manners on 6 December 2012. From 1 July 2013 Mr Anderson was appointed Joint Company Secretary for Bathurst Resources (New Zealand) Limited. Mr Anderson is a chartered accountant who operates his own specialist accounting and management consultancy practice. He is currently a director and company secretary of a number of ASX listed companies. M a R s h a L L M a i N E Joint Company secretary Marshall Maine was appointed Joint Company Secretary for Bathurst Resources (New Zealand) Limited on 1 July 2013. Mr Maine was previously a senior manager with KPMG Corporate Finance, London, before moving to New Zealand where he has held the role of chief financial officer for various New Zealand companies including Icebreaker Limited, NPT Limited and the Summerset Management Group Limited. other current directorships of listed companies Nil Former directorships in last three years of listed companies Nil special responsibilities Chair of health, safety, environment and community committee Member remuneration and nomination committee Member of audit committee interests in shares and options Nil M R T o ko k a P E a Ba, LLb, Non-executive director Mr Kapea is a Wellington based commercial lawyer, consultant and director, specialising in iwi and Māori development matters. Mr Kapea is a director of Tuia Group Limited and a partner in Tuia Legal. He has worked at Chapman Tripp, Meridian Energy, and in legal roles in-house at St. George Bank New Zealand Limited and Bank of New Zealand. Mr Kapea is a director of Parininihi ki Waitotara Incorporation (in Taranaki), Port Nicholson Fisheries Limited, and Board Chair for Ngāti Apa Developments Limited (Rangitikei). He is on the Government Review Panel relating to the Te Ture Whenua Māori Act 1993 (Māori Land Act) and was also the lead negotiator for Ngāti Apa ki Rangitikei (North Island) for its direct negotiation Treaty of Waitangi claims with the Crown. 46 Section 01 R E M uN E R a T i oN P R iN C iP L E s u s E D T o D E T E R M iN E The following fees have applied: R E P o R T T h E N aT u R E a N D a M o u N T o F R E MuN E R aT i oN Base fees Chair As a result of the group reorganisation non-executive directors Aud $160,000 (see page 27), the Bathurst Resources The fees and payments the company other non-executive directors (New Zealand) Limited group makes to its non-executive directors Aud $80,000/nZd $100,000 financial statements include only the reflect the level of responsibility results of subsidiaries from 28 June attributed to board members and Executive remuneration 2013. Therefore remuneration for the demands which are made on the The objective of the group’s executive the period ended 30 June 2013 is directors’ time. Non-executive directors’ reward framework is to ensure reward negligible and not detailed below. fees and payments are reviewed annually for performance is competitive and by the board. The board has also appropriate for the results delivered. The R oL E oF T h E R E MuN E R aT i oN & considered the advice of independent framework aligns executive reward with NoM i N aT i oN C oM M i T T E E remuneration consultants to ensure non- achievement of strategic objectives and The remuneration & nomination executive directors’ fees and payments the creation of value for shareholders, committee (“R&N committee”) is a are appropriate and in line with industry and conforms to industry practice. sub-committee of the board. The standards. The fees paid to the chair are R&N committee is responsible for determined independently to the fees The R&N committee ensures that making recommendations to the of non-executive directors. The chair is executive pay is competitive and board on remuneration matters not present at any discussions relating to reasonable, as well as acceptable to such as non-executive director fees, determination of his own remuneration. shareholders. The company ensures executive remuneration for directors that an executive’s remuneration is and other executives, and the over- In previous years the company has linked to that executive’s performance to arching executive remuneration granted non-executive directors ensure that the interests of the company policy and incentive schemes. unlisted options over ordinary shares and its executives are aligned. The in the company as a part of their R&N committee determines executive The objective of the R&N committee remuneration packages. The issue remuneration to ensure transparency is to ensure that the company’s of options was to align the interests and to effectively manage capital. remuneration policies and structures of directors and shareholders and are fair and competitive and aligned compensate for reduced fees during In consultation with external with the long-term interests of the the company’s start-up phase. remuneration consultants, the company. The R&N committee draws However, in the 2011 financial year the company has structured an executive on its own experience in remuneration company ceased the practice of issuing remuneration framework that is market matters and seeks advice from options to non-executive directors. competitive and complementary to the independent remuneration consultants. reward strategy of the organisation. directors’ fees The Corporate Governance Statement Non-executive directors’ fees are The company believes that the policy for provides further information on determined within an aggregate determining executives’ remuneration the role of the R&N committee. directors’ fee pool limit, which is is aligned to shareholders’ interests periodically recommended for approval because it focuses on sustained growth by shareholders. The maximum currently in shareholder wealth by pushing growth stands at $1,000,000 per annum. in share price and delivering constant 47 Bathurst Resources (New Zealand) Limited Annual Report 2013T R o P E R N o i T a R E N u M E R return on assets, as well as focusing a comparable role. Base pay for the executive on key non-financial executives is reviewed annually to drivers of value. Most importantly, the ensure the executives’ remuneration company ensures that its remuneration is competitive with the market. policy attracts and retains high calibre An executive’s remuneration is executives, who in turn add value to the also reviewed on promotion. company and to the shareholders. There are no guaranteed base The company also believes that its pay increases included in any remuneration policy for executives is executives’ contract. aligned to the interests of its executives. The executive remuneration policy Long-term incentives rewards capability and experience Long-term incentives have been and reflects competitive reward for previously provided to certain employees contribution to growth in shareholder via the Bathurst Resources Limited wealth. The policy is transparent Employee Share Option Plan which was so it provides a clear structure approved by shareholders at the 2010 for earning rewards and provides Annual General Meeting (“AGM”). Whilst recognition for contribution. a number of options issued under this The framework provides a mix of replaced by the long term incentive plan. plan remain on issue, this plan has been fixed and variable pay, and a blend of short and long-term incentives. The Bathurst Resources Limited Long As executives gain seniority with the Term Incentive Plan (LTIP) was approved group, the balance of this mix shifts to a by shareholders at the 2012 AGM higher proportion of “at risk” rewards. and has been adopted by Bathurst Resources (New Zealand) Limited on The executive remuneration and reward reorganisation. The purpose of the framework has two components: plan is to reinforce a performance — base pay and benefits, including focused culture by providing a long superannuation, and term performance based element to the — long-term incentives. total remuneration packages of certain The combination of these comprises rights), by aligning and linking the an executive’s total remuneration. interests of Bathurst’s leadership team employees (in the form of performance and shareholders, and to attract and base pay and benefits retain executives and key management. Executives are offered a competitive base pay that comprises the fixed The plan forms part of the company’s component and rewards. External remuneration policy and provides the remuneration consultants provide company with a mechanism for driving analysis and advice to ensure base long term performance for shareholders pay is set to reflect the market for and retention of executives. 48 Section 01 Performance rights granted under the plan carry no dividend or voting rights. When exercised, each performance right converts into one fully paid ordinary share. s E R v i C E a g R E E M E N T s On appointment to the board, all non- executive directors enter into a service agreement with the company in the form of a letter of appointment. The letter summarises the board policies and terms, including compensation, relevant to the office of director. Remuneration and other terms of employment for the managing director and other key management personnel are also formalised in service agreements. i N s uR aN C E oF oF F iC E R s During the period, Bathurst insured members of the board and key management under a directors’ and officers’ liability policy. This report is made in accordance with a resolution of directors. Craig Munro, Chairman 21 august 2013 Rob Lord, Non-executive director 21 august 2013 49 Bathurst Resources (New Zealand) Limited Annual Report 2013E C N a N R E v o g E T a R o P R o C The board and management are principles adopted or followed by committed to ensuring that Bathurst Bathurst materially differ from the maintains best practice governance Corporate Governance Best Practice structures and adheres to the highest Code. Bathurst considers that its ethical standards. The board regularly corporate governance practices comply reviews and assesses Bathurst’s with the Code. Further information governance structures and processes to about the company’s corporate ensure that they are consistent with best governance practices may be found practice, both in form and substance. on the company’s website at www. bathurstresources.co.nz, under the D u a L L i s T i N g F R a M E W o R k section marked “Corporate Governance”. Bathurst has a dual listing of its shares on the NZX and on the ASX and is B o aR D oF Di R E C T oR s required to comply with the listing board composition and expertise rules of the NZX and ASX. Bathurst is The board has an extensive range subject to governance requirements in of relevant industry experience, and both New Zealand and Australia. This financial and other skills and expertise includes the NZX Listing Rules and to meet its objectives. The current board Corporate Governance Best Practice composition comprises five independent, Code; the Financial Markets Authority’s non-executive directors (including the report entitled ‘Corporate Governance in chair) and one executive director. The New Zealand Principles and Guidelines’; board considers that the non-executive the ASX Listing Rules; and the ASX directors collectively bring the range Corporate Governance Council’s of skills, knowledge and experience Principles and Recommendations. necessary to direct the company. A As is appropriate for an NZX and profile of each director, setting out their ASX dual listed company, Bathurst skills, experience, expertise and period has reviewed the requirements and of office, is set out in the directors’ adopted practices and policies during report. Bathurst’s constitution states that the financial period consistent with the at each AGM one third of its directors requirements across both jurisdictions (excluding the managing director) and and the Bathurst operations and culture. any director who has held office for three The Board will continue to monitor of more years since their last election developments in the governance must retire. Directors who retire under area and carry out regular reviews of this rotation mechanism are eligible governance policies and practices. to offer themselves for re-election by shareholders at the AGM subject only compliance with corporate to the point below. A director should, governance codes, principles and subject to circumstances prevailing recommendations. at the time and the company’s ability The NZX Listing Rules require Bathurst to find a suitable replacement, aim to to include a statement in this report retire from the board at the conclusion on whether the corporate governance of the AGM occurring after the tenth 50 Section 01 anniversary of the director’s first directors bring a fresh perspective to directors, and determining the size appointment or election to the board. the board’s consideration of strategic, and composition of the board as well risk and performance matters. as recommending to shareholders the board role and responsibilities — in recognition of the importance of appointment and removal of directors. The central role of the board is to independent views and the board’s oversee and approve the company’s role in supervising the activities of Leadership selection — evaluating the strategic direction, to select and appoint management, the chair must be an performance of, and selection of, the a managing director, to oversee the independent non-executive director chief executive officer and those key company’s management and business — the majority of the board must be executives reporting directly to the CEO. activities, to report to shareholders. independent of management and Review on a regular basis appropriate The relationship between the board all directors are required to exercise succession planning for the CEO. and senior management is critical independent judgement and review, to the group’s long-term success. and constructively challenge the corporate responsibility — considering The directors are responsible to the performance of management the social, safety, ethical and shareholders for the performance of the — the chair is elected by the full board environmental impacts of the group in both the short and the longer and is required to meet regularly group’s activities, and setting term and seek to balance sometimes with the managing director, and policy and monitoring compliance competing objectives in the best — the chair of the board is responsible with safety, corporate and social interests of the group as a whole. The for determining the process for policies and practices. roles and responsibilities of the board evaluating board performance. Such are formalised in the Board Charter, evaluations are to be conducted Financial performance — approving which defines in detail the matters at least annually and will focus on Bathurst’s annual operating plans and that are reserved for the board and its the effectiveness of the board budget and monitoring management, committees, and those that the board function and whether there financial and operational performance. has delegated to management. The continues to exist an appropriate chair is responsible for leadership of mix of skills required by the board continuous disclosure — ensuring the board, for the efficient organisation to maximise its effectiveness and processes are established to capture and conduct of the board’s function and its contribution to the group. issues for the purposes of continuous for the promotion of relations between disclosure to both the NZX and the ASX. board members and between board and The Board Charter is available in management that are open, cordial and the corporate governance section Financial reports to shareholders conducive to productive cooperation. of Bathurst’s website. In addition to — approving annual and half year The managing director is responsible matters required by law to be approved reports and disclosures to the market for implementing group strategies and by the board, the following powers are that contain, or relate to, financial policies. The Board Charter specifies reserved to the board for decision: projections, statements as to future that these are separate roles to be financial performance or changes to undertaken by separate people. strategy — providing strategic the policy or strategy of the company. oversight and approving strategic The Bathurst Board Charter states: plans and initiatives. — the board is to be comprised of Establishing procedures — ensuring that the board is in a both executive and non-executive board performance and position to exercise its power and directors with a majority of non- composition — evaluating the to discharge its responsibilities as executive directors. Non-executive performance of non-executive set out in the Board Charter. 51 Bathurst Resources (New Zealand) Limited Annual Report 2013E C N a N R E v o g E T a R o P R o C director independence Criteria considered by the directors The independent directors of the when evaluating prospective candidates company during the reporting period are contained in the Board Charter. were Craig Munro (chair), Rob Lord, Malcolm Macpherson and Toko The chair of the board is responsible Kapea. Dave Frow was appointed as for ensuring a regular review of the an independent director subsequent performance of the board, committees to period end. These directors are and individual directors occurs at independent as they are non-executive least annually. The chair is responsible directors who are not members of for determining the process under management and who are free of which this evaluation takes place. any business or other relationship that could materially interfere with, The board reviews annually the size and or could reasonably be perceived to composition of the board and the mix materially interfere with, the independent of existing and desired competencies exercise of their judgement. across members. The board may engage an independent recruitment The roles of managing director / CEO firm to undertake a search for suitable and chair are filled by Hamish Bohannan candidates if and when an additional and Craig Munro respectively. They are member is considered appropriate. not exercised by the same individual. The board is responsible for evaluating The board has approved a policy on the performance of senior executives. independence of directors, a copy The board evaluates the performance of which is available in the corporate of senior executives via an ongoing governance section of Bathurst’s website. process of assessment and a formal annual review in December. During the On appointment, each director is formal review, the senior executive’s required to provide information to performance is measured against the chair to assess and confirm their role’s assessment criteria. their independence as part of their consent to act as a director. At the nominations and appointment of new date of this report the chair considers directors and succession planning that the five non-executive directors Recommendations for nomination of on the board are independent. new directors are considered by the R&N committee and approved by the board and senior executive board as a whole. The R&N committee performance evaluation review director appointments having The board, in conjunction with the regard to the candidate’s commercial R&N committee, reviews the size and experience, skills and other qualities. composition of the board and the mix External consultants may be used of existing and desired competencies from time to time to access a wide across members from time to time. base of potential directors. 52 Section 01 The board recognises the impact of A director with an actual or potential The charters of all board committees board tenure on succession planning conflict of interest in relation to a detailing the roles and duties of and that board renewal is critical to matter before the board does not each are available in the corporate performance. Each director other than receive the board papers relating to governance section of Bathurst’s the managing director, must not hold that matter and when the matter comes website. All board committee charters office (without re-election) past the before the board for discussion, the are reviewed at least annually. third AGM of the company following the director withdraws from the meeting director’s appointment or three years for the period the matter is considered At the date of this report the membership following that director’s last election or and takes no part in the discussion of each board committee is shown appointment (whichever is the longer). or decision-making process. in the relevant section below. The However, a director appointed to fill executive directors can attend the audit a casual vacancy or as an addition to board meetings committee meetings by invitation. All the board must not hold office (without The chair sets the agenda for each papers considered by the committees re-election) past the next AGM of meeting in conjunction with the chief are available on request to directors the company. At each annual general executive officer and the company who are not on that committee. meeting a minimum of one director or secretary. Any director may request a third of the total number of directors additional matters be added to the Following each committee meeting, must resign. A director who retires at agenda. Board and committee papers generally at the next board meeting, an AGM is eligible for re-election at are provided to directors, where the board is given a verbal update that meeting and the re-appointment possible, five (5) business days prior by the chair of each committee. In of directors is not automatic. to the relevant meeting. Copies of addition, minutes of all committee board papers are circulated in either meetings are available to all directors. Professional advice electronic or hard copy form. Directors Directors may, in carrying out their are entitled to request additional remuneration and nomination company related duties, seek external information where they consider the committee professional advice. If external information is necessary to support The R&N committee consists professional advice is sought, a informed decision-making. of the following non-executive director is entitled to reimbursement of all reasonable costs where such B o a R D Co M M i T T E E s independent directors: — M Macpherson (chair) a request for advice is approved in board committees and membership — D Frow, and writing by the chair. In the case of a The board has established four — C Munro. request by the chair, approval is required committees to assist in the discharge Details of these directors’ qualifications by at least two other directors. of its responsibilities. These are: are set out in the ”information on — Remuneration & nomination directors” on pages 44 to 46. conflicts of interest committee (“R&N committee”) The board has approved directors’ — Health, safety, environment The board has adopted an R&N Conflict of Interest Guidelines and community committee committee charter which describes (contained in the Board Code of (“HSEC committee”) the role, composition, functions and Conduct) which applies if there is, or — Risk committee, and responsibilities of the R&N committee. may be, a conflict between the personal — Audit committee. A copy of the R&N committee charter or other interests of a director. is available on the company’s website. 53 Bathurst Resources (New Zealand) Limited Annual Report 2013E C N a N R E v o g E T a R o P R o C Health, safety, environment and culture priorities, and community committee — Bathurst’s compliance with The HSEC committee consists all relevant legal obligations of the following non-executive on the matters within the independent directors: committee’s responsibilities. — D Frow (chair) — T Kapea, and — M Macpherson. R i s k C o M Mi T T E E The Risk committee consists Details of these directors’ qualifications of the following non-executive are set out in the “information on independent directors: directors” section on pages 44 to 46. — T Kapea (chair) — R Lord, and The board has adopted an HSEC — M Macpherson. committee charter which describes Details of these directors’ qualifications the role, composition, functions and are set out in the “information on responsibilities of the HSEC committee. directors” section on pages 44 to 46. A copy of the HSEC committee charter is available on the company’s website. The board has adopted a Risk committee charter which describes The primary function of the committee the role, composition, functions and is to assist the Board in enabling responsibilities of the Risk committee. Bathurst to operate its businesses A copy of the Risk committee charter safely, responsibly and sustainably. The is available on the company’s website. committee will oversee and monitor the promotion, establishment and integration The board, through the Risk committee across Bathurst of the principles and senior management, is responsible of health, safety, environment and for overseeing and implementing the community (HSEC) as the foundations of company’s Risk Management Policy. good management and good business. The company is committed to effective The committee will have risk management to achieve its business oversight of and review of: objectives. The company aims to — Bathurst’s actions to meet its continually improve the management duty to ensure the protection of of risk, to make better decisions to people and the environment achieve its objectives and to reduce — initiatives to enhance Bathurst’s the likelihood and consequences of sustainable business practices adverse effects to tolerable levels. and reputation as a responsible corporate citizen At all levels of the business, senior — integration of HSEC in the management is responsible for formulation of Bathurst’s corporate the development, implementation strategy, risk management and maintenance of risk framework, and people and 54 Section 01 management systems that will members of the audit committee the board of the company employing effectively allow the group to: are appointed by the board and may them to respond to such enquiries. — identify, assess and manage risks in be appointed for specified terms. an effective and efficient manner Membership of the committee is The company has established — use risk management to help reviewed annually by the board. procedures for the selection, make better decisions appointment and rotation of its external — reduce the risk of not meeting Details of these directors’ qualifications auditor. The board is responsible for business objectives are set out in the “information on the initial appointment of the external — meet relevant corporate directors” section on pages 44 to 46. auditor and the appointment of a new governance requirements, and external auditor when any vacancy — identify and evaluate opportunities The external auditors, the chief financial arises, as recommended by the audit based on their risk/reward balance. officer and the financial controller attend committee. Candidates for the position committee meetings by invitation. of external auditor must demonstrate The goals of risk management complete independence from the are achieved by: The role of the audit committee company through the engagement — implementing a comprehensive is to assist the board to meet its period. The board may otherwise select and systematic risk assessment oversight responsibilities in relation an external auditor based on criteria and reporting system across the organisation to the company’s financial reporting, relevant to the company’s business and internal control structure, corporate circumstances. The performance of the — training employees in the use of governance policies and practices, external auditor is reviewed on an annual the system, and in suitable risk financial risk management procedures basis by the audit committee and any assessment methodologies for their and the external audit function. recommendations are made to the board. business and work applications In doing so, it is the committee’s — developing a risk profile for each responsibility to maintain free and open The company and audit committee business unit, and then providing risk communication between the audit policy is to appoint external auditors funding to reduce risk and maintain committee and the external auditors who demonstrate experience and a suitable risk/reward balance and the management of Bathurst. independence. The performance of the — embedding risk management external auditor is reviewed annually into the way we work, and The audit committee operates in and applications for tender of external — auditing the system. accordance with a charter which is audit services are requested as deemed available on the company’s website. appropriate, taking into consideration Audit committee assessment of performance, The audit committee consists The audit committee may consult existing value and tender costs. of the following non-executive independent experts and institute independent directors: — R Lord (chair) special investigations if it considers PricewaterhouseCoopers (“PwC” it necessary in order to fulfil its was appointed as the external auditor — M Macpherson, and responsibilities. Furthermore, the audit in 2013. It is PwC’s policy to rotate — C Munro. committee shall have the authority to audit engagement partners on listed The audit committee comprises three seek any information it requires from any companies at least every five years. non-executive and independent officer or employee of the company or directors of the company. The its controlled entities and such officers An analysis of fees paid to the external chair of the board is not the chair or employees shall be instructed by auditors, including a break-down of of the committee. The chair and fees for non-audit services, is provided 55 Bathurst Resources (New Zealand) Limited Annual Report 2013E C N a N R E v o g E T a R o P R o C in the directors’ report and in note C oD E oF C oN D u C T, s h aR E T R aDi Ng 23 to the financial statements. It is P oL iC y aN D D i vE R s i T y P oL iC y the policy of the external auditors to provide an annual declaration of their code of conduct independence to the audit committee. The board has approved a Code of Conduct for directors and for employees, The external auditor will attend the which describes the standards of ethical AGM and be available to answer behaviour that directors and employees shareholder questions about the are required to maintain. The company conduct of the audit and the preparation promotes the open communication of and content of the audit report. ethical behaviour within the organisation. The board receives monthly reports Compliance with the Code of Conduct about the financial condition and assists Bathurst in effectively operational results of Bathurst and its managing its operating risks and controlled entities. The chief executive meeting its legal and compliance officer, chief financial officer and one obligations as well as enhancing the other director provide, at the end of company’s corporate reputation. each six monthly period, a formal statement to the Board confirming The Code of Conduct describes the that the company’s financial reports company’s requirements on matters such present a true and fair view, in all material as confidentiality, conflicts of interest, respects, and that the group’s financial use of company information, sound condition and operational results have employment practices, compliance with been prepared in accordance with laws and regulations, and the protection the relevant accounting standards. and safeguarding of company assets. The statement also confirms the integrity A copy of the company’s of the company’s financial statements Code of Conduct is available and notes to the financial statements on Bathurst’s website. is founded on a sound system of risk management and internal compliance share trading Policy and control which implements the The company’s Share Trading Policy is policies approved by the board, and binding on all directors and employees. that Bathurst’s risk management and The policy provides a brief summary internal compliance and control systems, of the law on insider trading and other to the extent they relate to financial relevant laws, sets out the restrictions reporting, are operating efficiently and on dealing in securities by people who effectively in all material respects. work for, or are associated with, Bathurst and is intended to assist in maintaining market confidence in the integrity of dealings in the company’s securities. 56 Section 01 The policy stipulates that the only The policy includes requirements for appropriate time for a director or the board to establish measurable employee to deal in the company’s objectives and appropriate strategies for securities is when he or she is not achieving diversity. The policy provides in possession of “price sensitive for the board to assess annually both information” that is not generally the objectives, and the company’s available to the share market. A director progress in achieving them. The Board wishing to deal in the company’s recognises that diversity offers a broad securities may only do so after first spectrum of benefits including: having advised the chair of his or her — access to a larger pool of intention. A senior executive wishing to quality employees deal must first obtain the prior written — improved employee retention approval of the managing director — insight into different ideas before doing so. If the chairman wishes and perspectives, fostering to buy, sell or exercise rights in relation innovation, and to the company’s securities, then — benefiting from all available talent. the chairman must obtain the prior written approval of the company’s The Board encourages diversity Board before doing so. Confirmation across the company and in senior of any dealing must also be given by leadership roles. The proportion the director or senior executive within of female employees in the whole two business days after the dealing. organisation is currently 26% Directors’ and senior executives’ and nil per cent at board level. with 38% at senior management dealings in the company’s securities are also subject to specified closed periods which are set out in the company’s Share Trading Policy or as otherwise determined by the board from time to time. A copy of the company’s Share Trading Policy is available on Bathurst’s website. diversity policy The company values diversity and recognises the benefits it can bring to the organisation’s ability to achieve its goals. Accordingly the company has developed a diversity policy. This policy outlines the company’s diversity objectives in relation to gender, age, cultural background and ethnicity. 57 Bathurst Resources (New Zealand) Limited Annual Report 20132 n o i t C e S 58 Section 02 59 Financial statements for the period ended 30 June 2013iNCoME sTaTEMENTs For tHE PEriod EndEd 30 JunE 2013 Revenue from operations - - n o t E s G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 Expenses Other expenses Loss before income tax Income tax benefit Loss for the period after income tax (376) (376) (376) (376) 4 75 75 (301) (301) Loss attributable to owners of the parent company (301) (301) Earnings per share for loss attributable to the ordinary equity holders of the company: Basic earnings per share Diluted earnings per share c En t s (0.04) (0.04) 28 28 The above income statements should be read in conjunction with the accompanying notes. 60 Section 02sTaTEMENTs oF CoMPREhENsivE iNCoME For tHE PEriod EndEd 30 JunE 2013 Loss for the period n o t E s G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 (301) (301) Other comprehensive income for the period, net of tax - - Total comprehensive income for the period (301) (301) Total comprehensive income for the year attributable to the owners of Bathurst Resources (New Zealand) Limited (301) (301) The above statements of comprehensive income should be read in conjunction with the accompanying notes. 61 Financial statements for the period ended 30 June 2013 BaLaNCE shEETs As At 30 JunE 2013 assETs Current assets Cash and cash equivalents Short term deposits Trade and other receivables Inventories Financial assets Other assets Total current assets Non-current assets Property, plant and equipment Mine licences, properties, exploration and evaluation assets Investments in subsidiaries Financial assets Deferred tax asset Other assets Total non-current assets Total assets LiaBiLiTiEs Current liabilities Trade and other payables Borrowings Deferred consideration Provisions Related party payables Total current liabilities Non-current liabilities Borrowings Deferred consideration Deferred tax liabilities Provisions Total non-current liabilities Total liabilities Net assets EquiTy Contributed equity Reserves Accumulated losses Total equity n o t E s G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 5 5 6 7 8 9 10 11 8 12 9 13 14 15 16 14 15 17 16 18 19 12,526 1,228 4,425 1,912 82 12,095 32,268 44,915 413,292 - - 4 - - 97 101 - - - 233,565 4,040 - 1,900 75 75 - 464,147 233,715 496,415 233,816 7,600 4,453 3,931 796 - 16,780 1,296 179,925 95,331 2,579 279,131 295,911 394 - - - 158 552 - - - - - 552 200,504 233,264 219,623 219,623 (18,818) (301) 13,942 (301) 200,504 233,264 The directors of Bathurst Resources (New Zealand) Limited authorised these financial statements for issue. On behalf of the Board Craig Munro Chairman, 21 august 2013 Rob Lord Director, 21 august 2013 The above balance sheets should be read in conjunction with the accompanying notes. 62 Section 02 sTaTEMENTs oF MovEMENTs iN EquiTy For tHE PEriod EndEd 30 JunE 2013 c o n t r i b u tE d E q u i t y $ ’ 0 0 0 n o t E s s H A r E b A sE d P A y mE n t r E s Er v E $ ’ 0 0 0 F o r E iG n E x c H A n G E tr A n s L A t i o n r E s Er v E $ ’ 0 0 0 A c c u m uL A t E d L o s s E s $ ’ 0 0 0 r E - o r G A n i s A t i o n r E s Er v E $ ’ 0 0 0 gRouP Balance at 27 March 2013 Loss for the period Total comprehensive income for the period Transactions with owners in their capacity as owners: Contribution to equity, via group reorganisation - - - - - - 19 219,623 13,942 Balance at 30 June 2013 219,623 13,942 - (301) (301) - - - t o t A L E q u i t y $ ’ 0 0 0 - (301) (301) - (32,760) 200,805 (301) (32,760) 200,504 - - - - - c o n t r i b u tE d E q u i t y $ ’ 0 0 0 n o t E s s H A r E b A s E d P A y mE n t r E s Er v E $ ’ 0 0 0 F o r E iG n E x c H A n G E tr A n s L A t i o n r E s Er v E $ ’ 0 0 0 A c c u m uL A t E d L o s s E s $ ’ 0 0 0 t o t A L E q u i t y $ ’ 0 0 0 PaRENT Balance at 27 March 2013 Loss for the period Total comprehensive income for the period Transactions with owners in their capacity as owners: Contributions of equity, via group reorganisation - - - - - - 19 219,623 13,942 Balance at 30 June 2013 219,623 13,942 - - - - - - - (301) (301) (301) (301) - 233,565 (301) 233,264 The above statements of movements in equity should be read in conjunction with the accompanying notes. 63 Financial statements for the period ended 30 June 2013 G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 - - - - - - - - - - - - n o t E s 27 sTaTEMENTs oF CashFLoWs For tHE PEriod EndEd 30 JunE 2013 Cash flows from operating activities Net cash outflow from operating activities Cash flows from investing activities Net cash outflow from investing activities Cash flows from financing activities Net cash inflow from financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents arising through group reorganisation 12,526 Cash and cash equivalents at the end of the period 5 12,526 The above statement of cashflow should be read in conjunction with the accompanying notes. 64 Section 02  NoTE 1 suMMaRy oF aCCouNTiNg PoLiCiEs Reporting entity and statutory base Measurement basis Bathurst Resources (New Zealand) Limited is a profit-oriented company registered in New Zealand under the Companies Act 1993 and is an issuer for the purposes of the Financial Reporting Act 1993. Bathurst Resources (New Zealand) Limited is listed on the New Zealand Securities Exchange (NZSX) and the Australian Securities Exchange (ASX). Bathurst Resources (New Zealand) Limited was incorporated on 27 March 2013. A scheme of arrangement between Bathurst Resources Limited and its shareholders resulted in Bathurst Resources (New Zealand) Limited becoming the new ultimate parent company of Bathurst Resources Limited and its subsidiaries on 28 June 2013. In accordance with the Financial Reporting Act 1993, these group financial statements include the results of subsidiary companies from the date of reorganisation. The assets and liabilities of the consolidated Bathurst Resources (New Zealand) Limited group have been assumed at the predecessors carrying value at the date of reorganisation. Bathurst Resources (New Zealand) Limited and its subsidiaries together are referred to in this financial report as the “group” or the “consolidated entity”. The Group is principally engaged in the exploration for, development and production of coal. Basis of preparation These financial statements comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. They have been prepared in accordance with the Financial Reporting Act 1993, which requires compliance with New Zealand generally accepted accounting practice. They comply with New Zealand equivalents to International Financial Reporting Standards as appropriate for profit- oriented entities. These financial statements are expressed in New Zealand dollars, which is the company’s functional currency. References in these financial statements to ‘$’ and ‘NZ$’ are to New Zealand dollars. All financial information has been rounded to the nearest thousand unless otherwise stated. 65 These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets and financial assets and liabilities (including derivative instruments) at fair value through profit or loss. specific accounting policies As described below, these accounting policies have been applied consistently to all periods presented in these financial statements. 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 consolidated financial statements are disclosed in note 2. (a) Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Bathurst Resources (New Zealand) Limited (”company” or ”parent entity”) as at 30 June 2013 and the results of all subsidiaries for the period then ended. Subsidiaries are all entities over which the group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are de-consolidated from the date that control ceases. 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. Financial statements for the period ended 30 June 2013 NoTE 1 suMMaRy oF aCCouNTiNg PoLiCiEs ( CoNTiNuED ) (b) segment reporting (iii) Group companies (c) (i) Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors. Foreign currency translation Functional and presentation currency Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in New Zealand dollars, which is Bathurst Resources (New Zealand) Limited’s functional and presentation currency. (ii) transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. Foreign exchange gains and losses are presented on the face of the income statement. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non- monetary assets and liabilities such as equities held at fair value through profit or loss are recognised in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classified as available-for-sale financial assets are recognised in other comprehensive income. The results and financial position of 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 balance sheet presented are translated at the closing rate at the date of that balance sheet; income and expenses for each income statement and statement of comprehensive income are translated at monthly 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, a proportionate share of such exchange difference is reclassified to profit or loss, as part of the gain or loss on sale where applicable. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. (d) Revenue recognition Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: (i) sale of goods Revenue from the sale of goods is recognised when there is an executed sales agreement at the time of delivery of the goods to customer, indicating that there has been a transfer of risks and rewards to the customer, no further work 66 Section 02or processing is required, the quantity and quality of the goods has been determined, the price is fixed and when title has passed. (ii) Freight income Revenue from freight services is recognised in the accounting period in which the services are provided. Revenue is not recognised until the service has been completed. (iii) interest income Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. (e) income tax The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. 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, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also 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 67 tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. 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. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences 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. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. (f) Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset. Finance leases, those under which a significant portion of the risks and rewards of ownership are transferred to the company, are capitalised at the lease’s inception at the fair value of the leased property, or, if lower, the present value of the minimum lease payments. Financial statements for the period ended 30 June 2013NoTE 1 suMMaRy oF aCCouNTiNg PoLiCiEs ( CoNTiNuED ) The corresponding rental obligations, net of finance charges, are included in other short-term and long-term payables. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the group will obtain ownership by the end of the lease term. Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term. Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease payments between rental expense and reduction of the liability. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the risk free rate, being the long term government borrowing rate. This is then adjusted for an estimated risk premium to reflect the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent consideration is classified as a financial liability (deferred consideration). Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised on the face of the income statement as “revaluation of deferred consideration”. (g) Business combinations (h) impairment of non-financial assets The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition- related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. The excess of the consideration transferred and the amount of any non- controlling interest in the acquiree over the fair value of the group’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase. 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. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. 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 (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. (i) Cash and cash equivalents Cash and short-term deposits in the balance sheet comprise cash at bank and on hand and short- term deposits with an original maturity of three months or less. For the purposes of the Cash Flow Statement cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. 68 Section 02(j) Trade receivables Trade receivables are recognised initially at fair value plus transaction costs and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date. Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial. The amount of the impairment loss is recognised in profit or loss within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in profit or loss. relating to purchases of raw material but excludes borrowing costs. Costs are assigned to individual items of inventory on the basis of weighted average costs. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. (l) Waste in advance Waste removed in advance (overburden) costs incurred in the development of a mine are capitalised as parts of the costs of constructing the mine and subsequently amortised over the life of the mine. Waste removal normally continues through the life of the mine. The company defers waste removal costs incurred during the production stage of its operations and discloses it within “other current assets”. The amount of waste removal costs deferred is based on the ratio obtained by dividing the volume of waste removed by the tonnage of coal mined. Waste removal costs incurred in the period are deferred to the extent that the current period ratio exceeds the life of mine ratio. Such deferred costs are then charged against the income statement to the extent that, in subsequent periods, the ratio falls short of the life of mine ratio. The life of mine ratio is based on proven and probable reserves of the operation. Waste moved in advance costs form part of the total investment in the relevant cash generating unit, which is reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable. Changes to the life of mine stripping ratio are accounted for prospectively. (k) inventories (m) investments and other financial assets Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost comprises 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. Cost includes the reclassification from equity of any gains or losses on qualifying cash flow hedges 69 Classification The group classifies its financial assets as loans and receivables. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition. Financial statements for the period ended 30 June 2013 NoTE 1 suMMaRy oF aCCouNTiNg PoLiCiEs ( CoNTiNuED ) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets. Loans and receivables are included in trade and other receivables (note 6) in the balance sheet. recognition and derecognition Regular way purchases and sales of financial assets are recognised on trade-date – the date on which the group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership. measurement At initial recognition, the group measures a financial asset at its fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Loans and receivables are subsequently carried at amortised cost using the effective interest rate method. impairment The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Financial assets carried at amortised cost For loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in profit or loss. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the group may measure impairment on the basis of an instrument’s fair value using an observable market price. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss. Impairment testing of trade receivables is described in note 1(j). (n) Property, plant and equipment All property, plant and equipment is stated at historical cost less 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 or losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows: Buildings 25 years Mine infrastructure 3 – 8 years Plant & machinery 2 – 25 years — — — 70 Section 02  — — Plant & machinery leased – units of use Furniture, fittings and equipment 3 – 8 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 1(h)). Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. (o) Exploration and evaluation expenditure Exploration and evaluation expenditure incurred is capitalised to the extent that the expenditure is expected to be recovered through the successful development and exploitation of the area of interest, or the exploration and evaluation activities in the area of interest have not yet reached a point where such an assessment can be made. All other exploration and evaluation expenditure is expensed as incurred. Capitalised costs are accumulated in respect of each identifiable area of interest. Costs are only carried forward to the extent that tenure is current and they are expected to be recouped through the successful development of the area (or, alternatively by its sale) or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves and operations in relation to the area are continuing. Accumulated costs in relation to an abandoned area are written off in full against profit in the period in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. 71 (p) Mining and development properties Mining and development properties include the cost of acquiring and developing mining properties, licenses, mineral rights and exploration, evaluation and development expenditure carried forward relating to areas where production has commenced. These assets are amortised using the unit of production basis over the proven and probable reserves. Amortisation starts from the date when commercial production commences. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. (q) Trade and other payables These amounts represent liabilities for goods and services provided to the group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value less transaction costs and subsequently measured at amortised cost using the effective interest method. (r) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates. Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled Financial statements for the period ended 30 June 2013NoTE 1 suMMaRy oF aCCouNTiNg PoLiCiEs ( CoNTiNuED ) or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs. Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. (s) Provisions Provision for rehabilitation Provisions are made for site rehabilitation costs relating to areas disturbed during the mine’s operation up to reporting date but not yet rehabilitated. The provision is based on management’s best estimate of future costs of rehabilitation. When the provision is recognised, the corresponding rehabilitation costs are recognised as part of mining property and development assets. At each reporting date, the rehabilitation liability is re-measured in line with changes in the timing or amount of the costs to be incurred. Changes in the liability relating to rehabilitation of mine infrastructure and dismantling obligations are added to or deducted from the related asset. If the change in the liability results in a decrease in the liability that exceeds the carrying amount of the asset, the asset is written down to nil and the excess is recognised immediately in the income statement. If the change in the liability results in an addition to the cost of the asset, the recoverability of the new carrying value is considered. Where there is an indication that the new carrying amount is not fully recoverable, an impairment test is performed with the write down recognised in the income statement in the period in which it occurs. The net present value of the provision is calculated using an appropriate discount rate, the unwinding of the discount applied in calculating the net present value of the provision is charged to the income statement in each reporting period and is classified as a finance cost. (t) (i) Employee benefits short-term obligations Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and 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. (ii) 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 after the end of the period in which the employees render the related service 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 using the projected unit credit method. 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 national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. (iii) share-based payments Share-based compensation benefits are provided to employees via the Bathurst Resources (New Zealand) Limited Long Term Incentive Plan and Employee Share Option Plan. Information relating to these schemes is set out in note 29. The fair value of performance rights and options granted under the Bathurst Resources (New Zealand) Limited Long Term Incentive Plan and Employee Share Option Plan is recognised as an employee 72 Section 02 benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted, which includes any market performance conditions and the impact of any non- vesting conditions but excludes the impact of any service and non-market performance vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. (u) Contributed equity Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the consideration received by the company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. (v) (i) Earnings per share basic earnings per share Basic earnings per share is calculated by dividing: — — the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year. (ii) 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 financing costs associated with dilutive potential ordinary shares, and 73 — the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. (w) Deferred Consideration The fair value of deferred consideration payments are calculated periodically with adjustments through profit or loss. The portion of the fair value adjustment due to the time value of money (unwinding of discount) is recognised as a finance cost.  For further information on deferred consideration refer to note 15. (x) goods and services Tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except where the GST incurred on a purchase of goods and services is not recoverable from the taxation authorities, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense item as applicable. Receivables and payables in the balance sheet are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows. (y) investments in subsidiaries The parent company holds its investments in subsidiaries at cost, less any impairment. New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2013 reporting periods. The group’s assessment of the impact of these new standards and interpretations is set out below. (i) nZ iFrs 10 consolidated Financial statements Effective for periods beginning on or after 1 January 2013 Financial statements for the period ended 30 June 2013 NoTE 1 suMMaRy oF aCCouNTiNg PoLiCiEs ( CoNTiNuED ) The standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company and provides additional guidance to assist in the determination of control where this is difficult to assess. The group does not expect the new standard to have a significant impact on its financial statements. (ii) Amendments to iAs 28 investments in associates and joint ventures Effective for periods beginning on or after 1 January 2013 These amendments incorporate joint ventures into the standard. It prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. The group does not expect the new standard to have a significant impact on its financial statements. (iii) nZ iFrs 12 disclosure of interests in other entities Effective for periods beginning on or after 1 January 2013 The standard applies to entities that have an interest in subsidiaries, joint arrangements, associates or unconsolidated structured entities. It establishes disclosures objectives and specifies minimum disclosures that an entity must provide to meet those objectives. The group does not expect the new standard to have a significant impact on its financial statements. (iv) Amendments to nZ iAs 27 separate financial statements Effective for periods beginning on or after 1 January 2013 These amendments remove the accounting and disclosures requirements for consolidated financial statements as a result of the issue of NZ IFRS 10 Consolidated financial statements and NZ IFRS 12 Disclosure of interests in other entities (v) nZ iFrs 13 Fair value measurement Effective for periods beginning on or after 1 January 2013 The standard establishes a single framework for measuring fair value where that is required by other standards and is applicable to both financial and non- financial items. The group does not expect the new standard to have a significant impact on its financial statements. (vi) nZ iFric 20 stripping costs in the Production Phase of a surface mine Effective for periods beginning on or after 1 January 2013 Interpretation 20 sets out the accounting for overburden waste removal (stripping) costs in the production phase of a surface mine. It states that these costs can only be recognised as an asset if they can be attributed to an identifiable component of the ore body, the costs relating to the improved access to that component can be measured reliably and it is probable that future economic benefits associated with the stripping activity (improved access to the ore body) will flow to the entity. The costs will be amortised over the life of the identified component of the ore body. This is different to the consolidated entity’s current accounting policy which is to capitalise stripping costs based on a general waste-to-ore stripping ratio and amortise the costs over the life of the mine. The interpretation must be applied retrospectively and the group will have to write off existing stripping cost asset balances to retained earnings on the date of transition, to the extent they do not relate to an identifiable component of the ore body. The total carrying amount of deferred waste capitalised as at 30 June 2013 was $11.7m. The full extent of any transitional adjustment has not yet been quantified. The group will adopt this interpretation from 1 July 2013. 74 Section 02NoTE 2 CRiTiCaL aCCouNTiNg EsTiMaTEs aND JuDgEMENTs Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. (i) impairment The future recoverability of the assets recorded by the group is dependent upon a number of factors, including whether the group decides to exploit its mine property itself or, if not, whether it successfully recovers the related asset through sale. Factors that could impact future recoverability include the level of reserves and resources, future technological changes, costs of drilling and production, production rates, future legal changes, and changes to commodity prices and foreign exchange rates. prices of commodities, exchange rates, production costs or recovery rates may change the economic status and may, ultimately, result in the reserves being restated. Such changes in reserves could impact on depreciation and amortisation rates, asset carrying values and provisions for rehabilitation. (iv) Provision for rehabilitation In calculating the estimated future costs of rehabilitating and restoring areas disturbed in the mining process certain estimates and assumptions have been made. (Refer to Note 1(s)). The amount the group is expected to incur to settle these future obligations includes estimates in relation to the appropriate discount rate to apply to the cash flow profile, expected mine life, application of the relevant requirements for rehabilitation, and the future expected costs of rehabilitation. Changes in the estimates and assumptions used could have a material impact on the carrying value of the rehabilitation provision and related asset. The provision is reviewed at each reporting date and updated based on the best available estimates and assumptions at that time. The carrying amount of the rehabilitation provision is set out in Note 16. (ii) valuation of deferred consideration (v) Waste in advance In valuing the deferred consideration payable under business acquisitions management uses estimates and assumptions. This includes future coal prices, discount rates, coal production, and the timing of payments. The amounts of deferred consideration are reviewed at each balance date and updated based on best available estimates and assumptions at that time. The carrying amount of deferred consideration is set out in note 15. Waste moved in advance is calculated with reference to the stripping ratio (waste moved over coal extracted) of the area of interest and the excess of this ratio over the estimated stripping ratio for the area of interest expected to incur over its life. Management estimates this life of mine ratio based on geological and survey models as well as reserve information for the areas of interest. The carrying amount of the waste moved in advance is set out in Note 9. (iii) reserves and resources (vi) taxation Reserves and resources are based on information compiled by a Competent Person as defined in accordance with the Australasian Code of Mineral Resources and Ore Reserves of December 2004 (the JORC code). There are numerous uncertainties inherent in estimating reserves and assumptions that are valid at the time of estimation but that may change significantly when new information becomes available. Changes in forecast 75 The group’s accounting policy for taxation requires management judgement in relation to the application of income tax legislation. There are many transactions and calculations undertaken during the ordinary course of business where the ultimate tax determination is uncertain. The group recognises liabilities for tax, and if appropriate taxation investigation or audit issues, based on whether taxation will be due and payable. Where the taxation Financial statements for the period ended 30 June 2013NoTE 2 CRiTiCaL aCCouNTiNg EsTiMaTEs aND JuDgEMENTs (CoNTiNuED) outcome of such matters is different from the amount initially recorded, such difference will impact the current and deferred tax position in the period in which the assessment is made. In addition, certain deferred tax assets for deductible temporary differences and carried forward taxation losses have been recognised. In recognising these deferred tax assets assumptions have been made regarding the group’s ability to generate future taxable profits. Utilisation of the tax losses also depends on the ability of the tax entities to satisfy certain tests at the time the losses are recouped. If the entities fail to satisfy the tests, the carried forward losses that are currently recognised as deferred tax assets would have to be written off to income tax expense. There is an inherent uncertainty in applying these judgements and a possibility that changes in legislation will impact upon the carrying amount of deferred tax assets and deferred tax liabilities recognised on the balance sheet. 76 Section 02NoTE 3 sEgMENT iNFoRMaTioN Management has determined operating segments based on the reports reviewed by the board of directors that are used to make strategic decisions. The board reviews the business from both a mine and geographic perspective and has identified two reportable segments. The Buller Coal segment relates to the mining, development and ultimate exploitation of permits under the Buller Coal management team in the Buller region of New Zealand. The Eastern Coal segment refers to the Takitimu mine and Timaru coal handling and distribution centre under the Eastern management team. The financial performance of these segments is monitored and operated separately from each other. All other operations of the group are classified within “Corporate” section of the segment note which encompasses the administration and treasury management of the group. segment information provided to the board The segment information provided to the board for the reportable segments for the year ended 30 June 2013 is as follows: 2013 b u L L E r c o A L $ ’ 0 0 0 E A s t E r n c o A L $ ’ 0 0 0 c o r P o r A t E $ ’ 0 0 0 t o t A L $ ’ 0 0 0 Loss before tax - - (376) (376) Total segment assets 464,776 27,618 4,021 496,415 Total assets per the balance sheet 496,415 Total segment liabilities 287,057 7,050 1,804 295,911 Total liabilities per the balance sheet 295,911 other segment information (i) Segment revenue Interest income between the segments is carried out at arm’s length and is eliminated on consolidation. The revenue from external parties reported to the board is measured in a manner consistent with that in the income statement. Revenues from external customers are derived from the sale of coal and freight services. Interest income from external parties is earned on cash deposits. (ii) Segment assets The amounts reported to the board with respect to total assets are measured in a manner consistent with that of the financial 77 statements. These assets are allocated based on the operations of the segment and the physical location of the asset. The total of non-current assets other than financial instruments and deferred tax assets located in Australia is $250k, and the total of these non-current assets located in New Zealand is $463,898k. Segment assets are allocated to countries based on where the assets are located. (iii) Segment liabilities The amounts reported to the board with respect to total liabilities are measured in a manner consistent with that of the financial statements. These liabilities are allocated based on the operations of the segment. Financial statements for the period ended 30 June 2013 NoTE 4 iNCoME Tax BENEFiT income tax benefit Current tax Deferred tax Income tax benefit G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 - 75 75 - 75 75 G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 Numerical reconciliation of income tax benefit to prima facie tax payable Loss from continuing operations before income tax benefit (376) (376) Tax at the standard New Zealand rate of 28% (105) (105) Tax effect of amounts that are not deductible / (assessable) in calculating taxable income: Non-deductible expenses Income tax benefit NoTE 5 Cash aND shoRT TERM DEPosiTs   Cash at bank and on hand Deposits at call Cash and cash equivalents Short term deposits Cash and short term deposits 30 30 75 12,451 75 12,526 1,228 13,754 30 30 75 - - - - - (a) Risk exposure The group’s exposure to interest rate risk is discussed in note 21. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and short term deposits mentioned above. 78 Section 02NoTE 6 TRaDE aND oThER RECEivaBLEs Trade receivables Provision for impairment of receivables Loans to key management personnel * GST Receivable Interest receivable Other receivables G r o uP 2 0 1 3 $ ’ 0 0 0 3,249 (37) 3,212 451 196 268 298 1,213 4,425 P A r E n t 2 0 1 3 $ ’ 0 0 0 - - - - - - 4 4 4 * Further information relating to loans to key management personnel is set out in note 22. (a) impaired trade receivables and past due but not impaired Ageing information on impaired trade receivables and trade receivables that are past due but not impaired has not been provided as the amounts are not material to the group. Impaired receivables at 30 June 2013 totalled $36,949 and trade receivables past due but not impaired at 30 June 2013 totalled $400,168. b) Foreign exchange and interest rate risk Information about the group’s exposure to foreign currency risk and interest rate risk in relation to trade and other receivables is provided in note 21. (c) Fair value and credit risk Due to the short term nature of these receivables, their carrying amount is assumed to approximate their fair value. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of receivables mentioned above. Refer to note 21 for more information on the risk management policy of the group and the credit quality of the entity’s trade receivables. NoTE 7 iNvENToRiEs Raw materials and stores Finished goods * G r o uP 2 0 1 3 $ ’ 0 0 0 68 1,844 1,912 P A r E n t 2 0 1 3 $ ’ 0 0 0 - - - * Finished goods are recorded at the lower of cost and net realisable value as per note 1(k). 79 Financial statements for the period ended 30 June 2013NoTE 8 FiNaNCiaL assETs Current Advances to third parties Non-current Security bonds and deposits Advances to third parties G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 82 82 214 3,826 4,040 - - 75 - 75 Security bonds and deposits have been provided to third parties in relation to rental properties and mine / permit access arrangements. An advance to a third party has been made under a construction contract to provide working capital assistance to the engaged contractor. The advance made attracts an interest rate of 5.75% and is secured by a bank guarantee in favour of Buller Coal Limited. G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 11,721 374 12,095 1,900 1,900 - 97 97 - - NoTE 9 oThER assETs Current Waste moved in advance Prepayments Non-current Deposits paid Deposits paid relate to the acquisition of mining permits. 80 Section 02 NoTE 10 PRoPERTy, PLaNT aND EquiPMENT F r E E H o L d L A n d $ ’ 0 0 0 b u i Ld i n G s $ ’ 0 0 0 mi nE i nF r A s t r u c- t u r E $ ’ 0 0 0 P L A n t & m A c Hi nE r y $ ’ 0 0 0 P L A n t & m A c Hi nE r y u n dE r F i n A n cE L E A sE $ ’ 0 0 0 F u r n i t u rE , F i t t i n G s A n d E q u i P mE n t $ ’ 0 0 0 t o t A L $ ’ 0 0 0 Period ended 30 June 2013 Opening net book amount Group reorganisation (note 30) Closing net book amount - - - - - - - 15,985 6,220 12,824 8,325 282 1,279 44,915 15,985 6,220 12,824 8,325 282 1,279 44,915 (a) assets in the course of construction The carrying amounts of the assets disclosed above include the following expenditure recognised in relation to property, plant and equipment which is in the course of construction: Furniture, fittings and equipment Mine infrastructure 2 0 1 3 $ ’ 0 0 0 140 10,048 10,188 (b) Non-current assets pledged as security Refer to note 14 for information on non-current assets pledged as security by the group. NoTE 11 MiNiNg LiCENCEs, PRoPERTiEs, ExPLoRaTioN , aND EvaLuaTioN assETs 30 June 2013 Opening net book amount Group reorganisation (note 30) E x P L o r A t i o n & E v A L u A t i o n E x P E n d i t u rE $ ’ 0 0 0 m i n i n G Li c E n c E s & Pr o P E r t iE s $ ’ 0 0 0 t o t A L $ ’ 0 0 0 - - - 31,377 381,915 413,292 Closing net book amount 31,377 381,915 413,292 81 Financial statements for the period ended 30 June 2013NoTE 12 DEFERRED Tax assETs The balance comprises temporary differences attributable to: Tax losses Accruals Employee benefits Provisions G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 8,613 445 158 504 - 75 - - Total deferred tax assets 9,720 75 Set-off of deferred tax liabilities pursuant to set-off provisions (see note 17) (9,720) Deferred tax assets - - 75 MovEMENTs gRouP t A x L o s s E s $ ’ 0 0 0 A c c r uA L s $ ’ 0 0 0 E m P L o y E E b En E F i t s $ ’ 0 0 0 P r o v i s i o n s $ ’ 0 0 0 t o t A L $ ’ 0 0 0 at 27 March 2013 Group reorganisation (note 30) at 30 June 2013 - 8,613 8,613 - 445 445 - 158 158 - 504 504 - 9,720 9,720 The group has recognised a deferred tax asset in relation to the tax losses of the New Zealand entities on the basis that these losses can be utilised by future profit generating New Zealand operations. These deferred tax losses have been offset against the group’s deferred tax liabilities, see note 17. 82 Section 02 NoTE 13 TRaDE aND oThER PayaBLEs Trade payables Other payables G r o uP 2 0 1 3 $ ’ 0 0 0 4,347 3,253 7,600 P A r E n t 2 0 1 3 $ ’ 0 0 0 52 342 394 (a) Risk exposure Information on the group’s exposure to foreign exchange risk is provided in note 21. NoTE 14 BoRRoWiNgs Current Secured Bank loans Lease liabilities (note 24) Non-current Secured Bank loans Lease liabilities (note 24) G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 4,331 122 4,453 1,088 208 1,296 - - - - - - (a) security The bank loans are secured by an all obligations General Security Agreement given by Eastern Coal Limited and its subsidiaries (“Eastern”) under which each member of Eastern grants to the bank a first ranking security interest over all its present and future acquired property (including proceeds) and a first ranking security interest over any of the Eastern assets. In addition to this, the bank has a registered first and exclusive mortgage over the property at Timaru owned by a subsidiary company, Eastern Coal Supplies Limited. Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. 83 Financial statements for the period ended 30 June 2013NoTE 14 BoRRoWiNgs ( CoNTiNuED ) Current General Security Agreement Cash and cash equivalents Receivables Inventories Total current assets pledged as security Non-current First and exclusive mortgage Freehold land and buildings Finance lease Plant and equipment General Security Agreement Plant and equipment Total non-current assets pledged as security Total assets pledged as security 2 0 1 3 $ ’ 0 0 0 1,453 3,219 1,912 6,584 1,097 283 24,072 25,452 32,036 (b) Fair value Bank loans Lease liabilities 2 0 1 3 G r o uP 2 0 1 3 G r o uP 2 0 1 3 P A r E n t 2 0 1 3 P A r E n t c A r r y i n G A m o u n t $ ’ 0 0 0 F Ai r v A L u E $ ’ 0 0 0 c A r r y i n G A m o u n t $ ’ 0 0 0 FA i r v A L u E $ ’ 0 0 0 5,419 5,419 33 0 330 5,749 5,749 - - - - - - (c) Risk exposures Details of the group’s exposure to risks arising from current and non-current borrowings are set out in note 21. 84 Section 02NoTE 15 DEFERRED CoNsiDERaTioN Current Acquisition of subsidiary deferred consideration Non-current Acquisition of subsidiary deferred consideration Total deferred consideration Movements Balance as at 27 March 2013 Group reorganisation (note 30) at 30 June 2013 2 0 1 3 $ ’ 0 0 0 3,931 3,931 179,925 179,925 183,856 d E F Er r Ed c o n s i dE r A t i o n $ ’ 0 0 0 - 183,856 183,856 85 Financial statements for the period ended 30 June 2013 NoTE 15 DEFERRED CoNsiDERaTioN (CoNTiNuED ) Details of deferred consideration Foreign exchange discount rate Deferred consideration has been discounted to reflect the time value of money. The long term US Government Bond rate has been used to reflect the nature of the underlying future cash flows. deferred consideration The acquisition of Buller Coal Limited (formerly L&M Coal Limited) in November 2010 contained two components of deferred consideration, cash and royalties. deferred cash consideration The deferred cash consideration is made up of two payments of US$40,000,000, the first being payable upon 25,000 tonnes of coal being shipped from the Buller Coal Project and the second payable upon 1 million tonnes of coal being shipped from the Buller Coal Project. The potential undiscounted amount of all future cash payments that the group could be required to make under these arrangements is between US$nil and US$80,000,000. The deferred cash consideration is valued at each reporting date based on expected timing of the cash payment and an appropriate discount rate. Revaluations are recognised in the income statement. royalties As part of the consideration Bathurst was party to a royalty agreement with L&M Coal Holdings Limited. The amounts that are payable in the future under this royalty agreement are recognised as part of the consideration paid for Buller Coal Limited. The fair value of the future royalty payments is estimated using an appropriate discount rate, production profile, and forecasted US dollar coal prices (estimated using forecasts from leading investment banks). Revaluations are recognised in the income statement. Both elements of the deferred consideration are denominated in US dollars and as such are exposed to movements in foreign exchange rates (notably New Zealand dollar / US dollar rates) with the effect of changes in the foreign exchange rates being recognised in the income statement in the period the change occurs. Refer to note 21 for discussion on the sensitivity of the income statement to fluctuations in the New Zealand dollar / US dollar exchange rate. The deferred consideration only becomes payable upon sales targets and as such is considered to be naturally hedged against US dollar sales receipts expected at the time the deferred consideration falls due. Payment timing The production targets that trigger the performance payments and royalties are expected to be partially met within the next 12 months, as such a component of deferred consideration is classified as current at 30 June 2013. security Pursuant to a deed of guarantee and security the two performance payments of US$40 million included in the deferred consideration above are secured by way of a first-ranking security interest in all of Buller’s present and future assets (and present and future rights, title and interest in any assets). In addition to this, Buller Coal Limited has guaranteed the payment of all amounts under the Sale and Purchase Agreement with L&M Coal Holdings Limited. The performance payments are due on the production targets discussed above; until these production targets are met no amounts are due or payable under the Sale and Purchase Agreement with L&M Coal Holdings Limited. 86 Section 02 NoTE 16 PRovisioNs Current Employee benefits Rehabilitation Non-current Rehabilitation Total provisions G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 591 205 796 2,579 2,579 3,375 - - - - - - (a) Rehabilitation (b) Movements in provisions Provision is made for the future rehabilitation of areas disturbed in the mining process. Management estimates the provision based on expected levels of rehabilitation, areas disturbed and an appropriate discount rate. Refer to note 1(s) for the group’s accounting policy on rehabilitation. Movements in each class of provision during the financial year, other than employee benefits, are set out below: Carrying amount at start of period Group reorganisation Carrying amount at the end of the period r E H A b i L i t A t i o n P r o v i s i o n $ ’ 0 0 0 - 2,784 2,784 87 Financial statements for the period ended 30 June 2013NoTE 17 DEFERRED Tax LiaBiLiTiEs The balance comprises temporary differences attributable to: Mining licences Waste moved in advance Exploration and evaluation expenditure Property, plant and equipment Total deferred tax liabilities Set-off of deferred tax assets pursuant to set-off provisions (see note 12) Net deferred tax liabilities G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 97,635 3,355 3,070 991 105,051 (9,720) 95,331 - - - - - - - Movements group at 27 March 2013 Group reorganisation (note 30) m i n i n G Li c E n c E s $ ’ 0 0 0 W A s t E i n Ad v An c E $ ’ 0 0 0 E x P L o r A t i o n & E v A L u A t i o n $ ’ 0 0 0 P r o P E r t y , P L A n t A n d E q u i P mE n t $ ’ 0 0 0 t o t A L $ ’ 0 0 0 - - - - - 97,635 3,355 3,070 991 105,051 at 30 June 2013 97,635 3,355 3,070 991 105,051 88 Section 02NoTE 18 CoNTRiBuTED EquiTy (a) share capital group Ordinary fully paid shares Parent Ordinary fully paid shares 2 0 1 3 s H Ar Es 2 0 1 3 $ ’ 0 0 0 699,247,997 219,623 699,247,997 219,623 699,247,997 219,623 699,247,997 219,623 Share capital represents the ordinary paid up capital and reserves (excluding share based payment reserve) of the Group’s predecessor parent company (note 30). (b) Movements in ordinary share capital Details opening balance 27 March 2013 Group reorganisation (note 30) Balance 30 June 2013 n u m b E r oF s H Ar Es - 699,247,997 699,247,997 (c) ordinary shares (d) Capital risk management Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of shares held. Every ordinary share is entitled to one vote. The board’s policy is to maintain a strong capital base so as to maintain investor, creditor, and market confidence and to sustain the future development of the business. Given the stage of the company’s development there are no formal targets set for return on capital. There were no changes to the company’s approach to capital management during the year. The company is not subject to externally imposed capital requirements. 89 Financial statements for the period ended 30 June 2013 NoTE 19 REsERvEs Share based payment reserve Reorganisation reserve The movements in the reserves for the year are shown in the statement of movements in equity. Nature and purpose of reserves share based payment reserve The share based payment reserve is used to recognise the fair value of options and performance rights issued. reorganisation reserve Bathurst Resources (New Zealand) Limited was incorporated on 27 March 2013. A scheme of arrangement between Bathurst Resources Limited and its shareholders resulted in Bathurst G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 13,942 13,942 (32,760) - (18,818) 13,942 Resources (New Zealand) Limited becoming the new ultimate parent company of the group on 28th June 2013. In accordance with the Financial Reporting Act 1993, these group financial statements can only include subsidiary companies results from the date of reorganisation, and therefore in arriving at a closing consolidated Balance Sheet, a reorganisation reserve has been created which reflects the previous retained losses of subsidiaries. NoTE 20 DiviDENDs NoTE 21 FiNaNCiaL Risk MaNagEMENT No dividend was paid or declared during the financial year and the directors do not recommend the payment of a dividend. The group’s activities expose it to a variety of financial risks: market risk (including currency risk, and interest rate risk), credit risk and liquidity risk. The group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the group. 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 by the management team under policies approved by the board of directors. Management identifies and evaluates financial risks on a regular basis. 90 Section 02 NoTE 21 FiNaNCiaL Risk MaNagEMENT CoNTiNuED The group holds the following financial instruments: Financial assets Loans and receivables Cash and short term deposits Trade and other receivables Other financial assets Financial liabilities Amortised cost Trade and other payables Related party payables Borrowings Fair value Deferred consideration G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 13,754 4,425 4,122 22,301 7,600 - 5,749 183,856 - 4 75 79 394 158 - - 197,205 552 (a) (i) Market risk Foreign exchange risk Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. The group’s exposure to foreign exchange movements primarily relates to deferred consideration which is denominated in USD. With the export business not yet operational, the group has not adopted formal foreign exchange risk policies. As cash flows required and generated by the Buller Coal project become clearer an appropriate foreign exchange risk management policy will be adopted. The group’s exposure to foreign currency risk at the end of the reporting period, expressed in New Zealand dollars, was as follows: Deferred consideration 91 3 0 J u n E 2 0 1 3 u s d E xPo s u r E $ ’ 0 0 0 183,856 Financial statements for the period ended 30 June 2013 NoTE 21 FiNaNCiaL Risk MaNagEMENT (CoNTiNuED ) (ii) cash flow and fair value interest rate risk The group’s main interest rate risk arises from long term borrowings. Borrowings that are issued at variable interest rates expose the group to cash flow interest rate risk. The group has limited debt and as such there is no formal policy around levels of fixed and variable borrowings to be maintained. As at the end of the reporting period, the group had the following variable rate borrowings: Bank loans Finance Leases An analysis by maturities is provided in (c) below. The group’s fixed rate borrowings and receivables are carried at amortised cost. They are therefore not subject to interest rate risk as defined in NZ IFRS 7. Due to the relatively low borrowings of the group the group does not regularly analyse its interest rate exposure and cash flow interest rate risk. As the group matures and the borrowings increase management will develop appropriate polices and manage the risk accordingly. As a result of the capital reorganisation, sensitivities to market risk have no impact on profit or loss for the period ended 30 June 2013. 3 0 J u n E 2 0 1 3 WE i G HtE d A v G i n tE r E s t r A tE % b A L An c E $ ’ 0 0 0 5.72 5,419 9.46 330 (b) Credit risk Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents as well as credit exposures to our customers, including outstanding receivables. For banks and financial institutions, only S&P rated parties with a minimum rating of ‘A-1+’ are accepted. If wholesale customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. The compliance with credit limits by corporate customers is regularly monitored by management. Sales to retail customers are required to be settled in cash or using major credit cards, mitigating credit risk. 92 Section 02The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates: Trade receivables Counterparties with an external credit rating (S&P) A-1 A-2 Counterparties without external credit rating Group 1* Total trade receivables Cash at bank and short-term deposits A-1+ 2 0 1 3 $ ’ 0 0 0 65 1,642 1,707 1,104 2,811 13,754 *Group 1 – existing customers (more than 6 months) with no defaults in the past. (c) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities to meet obligations when they fall due. At the end of the reporting period the group held deposits at call of $1,302,804 that are expected to readily generate cash inflows for managing liquidity risk. Due to the dynamic nature of the project, the group maintains flexibility in liquidity through the use of rolling deposit maturity cycles and by maintaining availability under committed credit lines. Financing arrangements The group had access to the following undrawn borrowing facilities at the end of the reporting period: Floating rate Bank overdraft (expiring within one year) 2 0 1 3 $ ’ 0 0 0 593 The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. 93 Financial statements for the period ended 30 June 2013 NoTE 21 FiNaNCiaL Risk MaNagEMENT (CoNTiNuED ) maturities of financial liabilities The tables below analyse the group’s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Contractual maturities of financial liabilities at 30 June 2013 L Es s t H An 6 m o n tH s $ ’ 0 0 0 6 – 1 2 m o n tH s $ ’ 0 0 0 b E t W E En 1 A n d 2 y E A r s $ ’ 0 0 0 b E t W E En 2 A n d 5 y E A r s $ ’ 0 0 0 o v E r 5 y E A r s $ ’ 0 0 0 t o t A L c o n t r Ac t uA L c A s H F L o Ws $ ’ 0 0 0 c A r r y i n G A m o u n t $ ’ 0 0 0 Trade payables Borrowings (exc. finance leases) Deferred consideration Finance leases Total 7,600 4,154 - 74 - 208 - 401 - 775 - - 7,600 7,600 5,538 5,419 3,060 10,206 101,399 89,978 204,643 183,856 74 149 75 - 372 330 11,828 3,342 10,756 102,249 89,978 218,153 197,205 (d) Fair value measurements The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. NZ IFRS 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: (a) (b) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2), and (c) Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3). The following table presents the groups assets and liabilities measured and recognised at fair value at 30 June 2013: at 30 June 2013 Liabilities L E v E L 3 $ ’ 0 0 0 t o t A L $ ’ 0 0 0 Deferred consideration (see note 15) 183,856 183,856 The fair value of the deferred consideration is calculated as the present value of the expected cash flows using a discount rate that reflects the specific risk to the expected payment profile. If the risk adjusted discount rate was 10% higher or lower, the fair value of the deferred consideration would decrease by $5,323,233 or increase by $5,670,684 respectively. If the expected cash flows from the royalty component of the deferred consideration were 10% higher or lower, the fair value of the deferred consideration would increase by $9,269,321 or decrease by $9,269,321 respectively. 94 Section 02NoTE 22 kEy MaNagEMENT PERsoNNEL DisCLosuREs As a result of the capital reorganisation (note 30) no key management personnel related costs have been included in these financial statements. (a) Loans to key management personnel Details of loans made to directors of Bathurst Resources Limited and other key management personnel of the group, including their personally related parties are set out below. (i) Aggregates for loans to key management personnel b A L A n c E A t tH E s t A r t o F t H E P E r i o d $ G r o uP r E o r - G A n i s A t i o n $ b A L An c E A t tH E E n d o F tH E P E r i o d $ n u m b E r i n t H E G r o u P A t tH E E n d o F tH E P E r i o d 2013 - 451,098 451,098 1 (ii) individuals with loans above $100,000 during the financial year b A L A n c E A t tH E s t A r t o F t H E P Er i o d G r o uP r E o r G A n i s At i o n b A L An c E A t tH E E n d o F tH E P Er i o d n u m b E r i n t H E G r o u P A t tH E E n d o F tH E P E r i o d $ - $ $ 451,098 451,098 1 H Bohannan The loan outstanding at the end of the year to Mr Bohannan is an unsecured loan repayable within 12 months of period end. Interest is payable on the loan at a rate of 12.5%. NoTE 23 REMuNERaTioN oF auDiToRs During the period, the following fees were paid or payable for services provided by the auditor of the parent entity: PwC audit and other assurance services Audit and review of financial statements Total remuneration for audit and other assurance services 2 0 1 3 $ ’ 0 0 0 265 265 95 Financial statements for the period ended 30 June 2013 NoTE 24 CoMMiTMENTs (a) Capital commitments Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows: Property, plant & equipment Within one year Later than one year but not later than five years Mining licences and properties Within one year Later than one year but not later than five years G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 8,420 430 8,850 4,500 11,450 15,950 - - - - - - (b) Lease commitments Non-cancellable operating leases The group leases various offices, accommodations, and equipment under non-cancellable operating leases expiring within one to six years. The leases have varying terms, escalation clauses and renewal rights. G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 476 785 120 1,381 - - - - Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows: Within one year Later than one year but not later than five years Later than five years (ii) Finance leases The group leases various plant and equipment with a carrying amount of $282k under finance leases expiring within one to four years. 96 Section 02 Commitments in relation to finance leases 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 Recognised as a liability The present value of finance lease liabilities is as follows: Within one year Later than one year but not later than five years Later than five years Minimum lease payments G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 149 223 - 372 (42) 330 123 207 - 330 - - - - - - - - - - (c) Exploration expenditure commitments The group holds various exploration permits which have as part of their conditions minimum work programs. Commitments in relation to exploration permits are payable as follows: Within one year Later than one year but not later than five years Later than five years G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 1,652 9,401 - 11,053 - - - - 97 Financial statements for the period ended 30 June 2013NoTE 25 RELaTED PaRTy TRaNsaCTioNs (a) Parent entity (b) subsidiaries The ultimate parent entity within the group is Bathurst Resources (New Zealand) Limited. The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1(a). Name of entity c o u n t r y oF i n c o r P o r A t i o n c L A s s o F s H Ar Es E q u i t y H oL d i nG 2 0 1 3 Bathurst Resources Limited Australia Ordinary Bathurst New Zealand Limited New Zealand Ordinary Bathurst Coal Limited Buller Coal Limited Eastern Coal Limited Cascade Coal Limited New Zealand Ordinary New Zealand Ordinary New Zealand Ordinary New Zealand Ordinary Somervilles Land Holdings Limited New Zealand Ordinary Canterbury Coal Limited* New Zealand Ordinary Cascade East Limited Takitimu Coal Limited Rochfort Coal Limited New Zealand Ordinary New Zealand Ordinary New Zealand Ordinary Eastern Coal Supplies Limited New Zealand Ordinary * Cascade West Limited changed its name to Canterbury Coal Limited on the 9th January 2013 % 100 100 100 100 100 100 100 100 100 100 100 100 (c) key management personnel Disclosures relating to key management personnel are set out in note 22. 98 Section 02NoTE 26 EvENTs oCCuRRiNg aFTER ThE REPoRTiNg PERioD There are no material events that occurred subsequent to reporting date, that require recognition of, or additional disclosure in these financial statements. NoTE 27 RECoNCiLiaTioN oF Loss aFTER iNCoME Tax To NET Cash ouTFLoW FRoM oPERaTiNg aCTiviTiEs Loss for the year Changes in operating assets and liabilities: Increase in trade debtors Increase in other operating assets Increase / (decrease) in trade and other payables Increase in deferred tax assets Net cash outflow from operating activities NoTE 28 EaRNiNgs PER shaRE (a) Basic earnings per share Total basic earnings per share attributable to the ordinary equity holders of the company (b) Diluted earnings per share Total diluted earnings per share attributable to the ordinary equity holders of the company (c) Reconciliation of earnings used in calculating earnings per share Earnings used in the calculation of basic and dilutive Earnings per share: Earnings from continued operations Total earnings (d) Weighted average number of shares used as the denominator Weighted average number of ordinary shares during the period used in the calculation of basic and dilutive earnings per share Adjustments for calculation of diluted earnings per share: Options and performance rights Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share 99 G r o uP 2 0 1 3 $ ’ 0 0 0 P A r E n t 2 0 1 3 $ ’ 0 0 0 (301) (301) (4) (4) (172) (172) 552 (75) - 552 (75) - 2 0 1 3 c En t s (.04) (.04) $’000 (301) (301) 697,141,148 18,238,255 715,379,403 Financial statements for the period ended 30 June 2013NoTE 29 shaRE -BasED PayMENTs As a result of the capital reorganisation (note 30), share options and performance rights held in Bathurst Resources Limited were swapped on a one-for-one basis for options and performance rights in Bathurst Resources (New Zealand) Limited. No income statement charge has been recorded in these financial statements. (a) Employee share option plan The Bathurst Resources Limited Employee Share Option Plan (“ESOP”) was approved by shareholders at the 2010 AGM. The ESOP is designed to provide directors, senior executives, employees, and consultants with an opportunity to participate in the company’s future growth and gives them an incentive to contribute options (EsoP) 30 June 2013 to that growth. The ESOP was established to enable the company to attract and retain skilled and experienced directors, senior executives, employees, and consultants and to provide them with the motivation to make the company more successful and deliver long-term shareholder returns. Under the plan, participants are granted units in the ESOP Trust, some of which only vest upon the shipment of the first 25,000 tonnes from the Buller Coal Project. Participation in the ESOP is at the board’s discretion. Options granted under the plan carry no dividend or voting rights. When exercised each option coverts into one fully paid ordinary share. issue G r A n t d A tE E x P i r y d At E E x E r c i s E P r i c E ( A $ ) * b A L An c E A t tH E E n d o F tH E y E A r v E s tE d A n d E x E r c i s AbL E A t t H E E n d o F tH E y E A r A B C D E F H I J K 18 Aug 10 30 Sept 13 10.8 cents 7,500,000 7,500,000 20 Aug 10 30 Sept 13 16.8 cents 1,000,000 1,000,000 20 Aug 10 30 Sept 13 10.8 cents 5,500,000 5,500,000 29 Nov 10 30 Sept 13 21 cents 1,000,000 1,000,000 29 Nov 10 31 Dec 13 40 cents 10,750,000 3,750,000 6 Dec 10 31 Dec 13 40 cents 11,450,000 3,950,000 18 Apr 11 31 Dec 13 85 cents 2,000,000 2,000,000 26 Aug 12 29 Aug 14 38 cents 1,000,000 1 Sept 12 29 Aug 14 38 cents 1,000,000 20 Dec 12 19 Dec 14 38 cents 2,000,000 - - - Weighted average exercise price (a$) * share options were issued with an Australian dollar exercise price. 43,200,000 24,700,000 32.1 cents 26.6 cents The weighted average remaining contractual life of share options outstanding at the end of the reporting period was 180 days (2012 – 1.41 years). 100 Section 02 The plan forms part of the Company’s remuneration policy and provides the Company with a mechanism for driving long term performance for Shareholders and retention of executives. Performance rights granted under the plan carry no dividend or voting rights. When exercised each performance right coverts into one fully paid ordinary share. (b) Employee long term incentive plan The Bathurst Resources Limited Long Term Incentive Plan (LTIP) was approved by Shareholders at the 2012 AGM. The purpose of the plan is to reinforce a performance focused culture by providing a long term performance based element to the total remuneration packages of certain employees, by aligning and linking the interests of Bathurst’s leadership team and Shareholders, and to attract and retain executives and key management. Performance Rights (LTiP) Issue 2013 2013 2013 2013 G r A n t d A tE E x P i r y d At E E x E r c i s E P r i c E b A L An c E A t tH E E n d o F tH E y E Ar v E s tE d A n d E x E r c i s AbL E A t tH E E n d o F t H E y E A r 8 Feb 13 30 June 15 27 Mar 13 30 June 15 31 Mar 13 30 June 15 13 Jun 13 30 June 15 - - - - 352,733 925,925 440,917 1,388,889 3,108,464 - - - - - (c) other option issues As at 30 June 2013 there were 14,844,109 options on issue outside the ESOP which have an expiry date of between 31 October 2013 and 15 November 2013 along with an exercise price of between 15.5 cents (A$) and 37.8 cents (A$). 101 Financial statements for the period ended 30 June 2013 The pro forma consolidated financial statements comprise the results of Bathurst Resources (New Zealand) Limited and its subsidiaries as at and for the 12 months ended 30 June 2013. The accounting policies applied in these financial statements are consistent with those adopted and applied in notes 1 and 2 of these accounts. Comparative balances have been presented in New Zealand dollars consistent with the current year presentation. Assets, liabilities and equity balances have been translated at closing rates. Items of profit or loss and carried forward retained earnings have been translated at average rates in the respective periods earned or incurred. NoTE 30 CaPiTaL REoRgaNisaTioN On 2 April 2013, Bathurst Resources Limited announced it’s intention to redomicile to New Zealand by incorporating a new company, Bathurst Resources (New Zealand) Limited. Bathurst Resources (New Zealand) Limited would be the ultimate parent company of the Bathurst Resources Group comprising Bathurst Resources Limited and its subsidiaries. The redomicile was enacted by a scheme of arrangement (the “scheme”) between Bathurst Resources Limited and its shareholders, whereby shareholders exchanged shares in Bathurst Resources Limited for shares in Bathurst Resources (New Zealand) Limited on a one-for-one basis, and for which shareholder approval was granted on 13 June 2013. The scheme was implemented on 28 June 2013. In accordance with the New Zealand Financial Reporting Act 1993, the Group financial statements of Bathurst Resources (New Zealand) Limited include only the results and balances of subsidiaries from the day on which they were subject to the scheme reorganisation. Assets and liabilities were assumed at the predecessors carrying values. The scheme does not represent an acquisition or business combination as defined in NZ IFRS as it is merely a reorganisation of the existing Bathurst Group. The pro forma information in this note is presented to show the consolidated financial position and performance of Bathurst Resources (New Zealand) Limited and its subsidiaries as if this was a continuation of the existing Bathurst Resources Limited group and as though the specific requirements of the Financial Reporting Act 1993 had not been applied. Basis of preparation 102 Section 02 group consolidated income statement Revenue from operations Expenses Changes in inventories of finished goods Raw materials, mining costs, and consumables used Freight expense Employee benefits expense Depreciation and amortisation expense Restructuring and acquisition related costs Other expenses Finance costs Foreign exchange (loss) / gain Share based payments Impairment reversal/(loss) Fair value adjustment – deferred consideration Loss before income tax Income tax (expense)/benefit Loss for the year after income tax group consolidated statement of other comprehensive income Loss for the year Other comprehensive income Exchange differences on translation of foreign operations other comprehensive income for the year, net of tax P r o F o r m A 2 0 1 3 $ ’ 0 0 0 P r o F o r m A 2 0 1 2 $ ’ 0 0 0 41,024 38,214 (792) 1,186 (17,688) (18,507) (9,883) (9,608) (13,640) (11,064) (3,218) (3,135) (1,632) (1,470) (7,491) (8,977) (8,121) (5,275) (1,813) (9,074) (1,766) 122 6,618 (8,161) 2,448 2,448 (15,954) (33,301) (4,485) 5,637 (20,439) (27,664) P r o F o r m A 2 0 1 3 $ ’ 0 0 0 P r o F o r m A 2 0 1 2 $ ’ 0 0 0 (20,439) (27,664) 1,365 3,748 1,365 3,748 Total comprehensive income for the year (19,074) (23,916) Total comprehensive income for the year attributable to the owners of Bathurst Resources Limited (19,074) (23,916) 103 Financial statements for the period ended 30 June 2013NoTE 30 CaPiTaL REoRgaNisaTioN (CoNTiNuED ) group consolidated Balance sheet assETs Current assets Cash and cash equivalents Short term deposits Trade and other receivables Inventories Financial assets Other assets Total current assets Non-current assets Property, plant and equipment Mine licences, properties, exploration and evaluation assets Financial assets Other assets Total non-current assets Total assets LiaBiLiTiE s Current liabilities Trade and other payables Borrowings Deferred consideration Provisions Total current liabilities Non-current liabilities Borrowings Deferred consideration Deferred tax liabilities Provisions Total non-current liabilities Total liabilities Net assets EquiTy Contributed equity Reserves Total equity 104 2 0 1 3 $ ’ 0 0 0 2 0 1 2 $ ’ 0 0 0 12,526 68,737 1,228 4,425 1,912 82 12,095 - 3,340 2,572 174 231 32,268 75,054 44,915 16,542 413,292 401,541 4,040 1,900 4,221 2,246 464,147 424,550 496,415 499,604 7,600 4,453 3,931 796 7,102 2,571 - 814 16,780 10,487 1,296 - 179,925 176,984 95,331 90,159 2,579 2,229 279,131 269,372 295,911 279,859 200,504 219,745 251,153 269,549 (50,649) (49,804) 200,504 219,745 Section 02group consolidated statement of cash flows Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Interest received Interest and other finance costs paid Taxes paid Net cash outflow from operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for exploration assets Payments for acquisition of mining permits Proceeds from the sale of property, plant & equipment Advances to third parties Other Net cash outflow from investing activities Cash flows from financing activities Proceeds from the issue of shares Proceeds from borrowings Repayment of borrowings Payments for share issue costs Net cash inflow from financing activities 2 0 1 3 $ ’ 0 0 0 2 0 1 2 $ ’ 0 0 0 38,203 40,222 (61,228) (52,453) 1,860 5,000 (432) (239) (149) (1,387) (21,746) (8,857) (24,802) (10,942) (9,760) (10,548) - (9,472) 165 119 11 (4,000) (3,078) (2,246) (37,464) (37,089) 634 3,854 4,833 - (1,656) (1,080) (11) (82) 3,800 2,692 Net (decrease) / increase in cash and cash equivalents (55,410) (43,254) Cash and cash equivalents at the beginning of the year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the year 68,737 113,233 (801) (1,242) 12,526 68,737 105 Financial statements for the period ended 30 June 2013Independent Auditors’ Report to the shareholders of Bathurst Resources (New Zealand) Limited Report on the Financial Statements We have audited the financial statements of Bathurst Resources (New Zealand) Limited (“the Company”) on pages 60 to 105, which comprise the balance sheets as at 30 June 2013, the income statements, statements of comprehensive income, statements of movements in equity and statements of cash flows for the period then ended, and the notes to the financial statements that include a summary of significant accounting policies and other explanatory information for both the Company and the Group. The Group comprises the Company and the entities it controlled at 30 June 2013 or from time to time during the financial period. Directors’ Responsibility for the Financial Statements The Directors are responsible for the preparation of these financial statements in accordance with generally accepted accounting practice in New Zealand and that give a true and fair view of the matters to which they relate and for such internal controls as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (New Zealand) and International Standards on Auditing. These standards require that we comply with relevant ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider the internal controls relevant to the Company and the Group’s preparation of financial statements that give a true and fair view of the matters to which they relate, 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 Company and the Group’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. We have no relationship with, or interests in, Bathurst Resources (New Zealand) Limited or any of its subsidiaries other than in our capacity as auditor. PricewaterhouseCoopers, 113 – 119 The Terrace, PO Box 243, Wellington 6140, New Zealand T: +64 (4) 462 7000, F: +64 (4) 462 7001, www.pwc.com/nz 106 Section 02     Independent Auditors’ Report Bathurst Resources (New Zealand) Limited Opinion In our opinion, the financial statements on pages 60 to 105: i. ii. iii. comply with generally accepted accounting practice in New Zealand; comply with International Financial Reporting Standards; and give a true and fair view of the financial position of the Company and the Group as at 30 June 2013, and their financial performance and cash flows for the period then ended. Report on Other Legal and Regulatory Requirements We also report in accordance with Sections 16(1)(d) and 16(1)(e) of the Financial Reporting Act 1993. In relation to our audit of the financial statements for the period ended 30 June 2013: i. ii. we have obtained all the information and explanations that we have required; and in our opinion, proper accounting records have been kept by the Company as far as appears from an examination of those records. Restriction on Distribution or Use This report is made solely to the Company’s shareholders, as a body, in accordance with Section 205(1) of the Companies Act 1993. Our audit work has been undertaken so that we might state to the Company’s shareholders those matters which we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our audit work, for this report or for the opinions we have formed. Chartered Accountants 21 August 2013 Wellington 107 Financial statements for the period ended 30 June 2013     3 n o i t C e S 108 Section 03  Bathurst Resources (New Zealand) Limited annual Report 2013 – shareholder information 109 shaREhoLDER iNFoRMaTioN The shareholder information set out below was applicable as at 21 August 2013. a. DisTRiBuTioN oF EquiTy sECuRiTiEs Analysis of numbers of equity security holders by size of holding: H oL d i nG 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over There were 775 holders of less than a marketable parcel of ordinary shares. B. EquiTy sECuRiTy hoLDERs Twenty largest quoted equity security holders The names of the twenty largest holders of quoted equity securities are listed below: n A mE JP Morgan Nominees Australia Limited JP Morgan Nominees Australia Limited HSBC Custody Nominees (Australia) Limited National Nominees Limited Bell Potter Nominees Limited Berne No 132 Nominees Pty Ltd Citicorp Nominees Pty Limited Mr RJ Griffiths & Mrs JD Griffiths Merrill Lynch (Australia) Nominees Pty Limited Passio Pty Ltd HSBC Custody Nominees (Australia) Limited Mr H Bohannan & Ms J Bohannan Brispot Nominees Pty Limited UBS Wealth Management Australia Nominees Pty Limited CTS Funds Pty Ltd Broderick-Hall Pty Ltd ABN Amro Clearing Sydney Nominees Pty Limited Mr M Clark, Ms H Anderson & Mr R Gillespie Mr M Kable Navigator Australia Limited Total t o t A L H o L d E r s 338 804 678 o r d i n A r y s H Ar Es 69,377 2,114,144 4,502,597 2,270 68,485,446 684 624,076,433 4,774 699,247,997 o r d i n Ar y s H Ar Es n u m b Er H E L d P Er c En t A G E o F i s s u E d s H Ar Es 103,174,542 14.76% 63,844,431 53,721,055 40,785,833 34,553,255 27,888,773 15,540,331 15,000,000 10,966,411 7,500,000 6,882,856 6,700,000 5,612,877 3,180,710 3,146,000 3,000,000 2,940,589 2,757,613 2,700,000 2,690,762 9.13% 7.68% 5.83% 4.94% 3.99% 2.22% 2.15% 1.57% 1.07% 0.98% 0.96% 0.80% 0.45% 0.45% 0.43% 0.42% 0.39% 0.39% 0.38% 412,586,038 59.00% 110 Section 03B. EquiTy sECuRiTy hoLDERs (CoNTiNuED) unquoted equity securities Unquoted options on issue Unquoted performance rights on issue C. suBsTaNTiaL hoLDERs Substantial holder notices have been lodged by the holders below: L1 Capital Pty Ltd Coupland Cardiff Asset Management D. voTiNg RighTs Waivers n u m b E r o n i s s u E n u m b E r oF H oL dE r s 58,044,109 3,108,464 25 5 n u m b Er H E L d P Er c En t A G E o F i s s u E d s H Ar Es 99,416,898 14.22% 67,476,305 9.65% The voting rights attached to each class of equity securities are set out below: (a) Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. (b) Options No voting rights. As a result of the Bathurst Group reorganisation and redomicile from Australia to New Zealand, Bathurst Resources (New Zealand) Limited has been granted the following full or partial waivers from the NZX and ASX listing rules respectively. NZX Rule 3.5.1; Rule 5.1.1; Rule 5.2.1; Rule 5.2.2 (b); Rule 5.2.2 (c); Rule 7.1.1; Rule 7.1.11; Rule 7.3.6; Rule 7.3.1 (a); Rule 7.3.1; Rule 7.3.5 (a)(i); Rule 7.3.6 (c)(i); Rule 7.3.11 (b) (ii); Rule 7.6.1; Rule 9.1.1; Rule 9.2.1 ASX Rule 1.4.1; Rule 1.4.7; Rule 1.4.8; Rule 1.1 condition 7; Rule 1.1 condition 8; Rule 1.1 condition 11; Rule 2.1 condition 2; Rule 6.10.3; Rule 7.1; Rule 10.14; Rule 15.7 111 Bathurst Resources (New Zealand) Limited Annual Report 2013 – Shareholder Information TENEMENT sChEDuLE n u m b Er EP51078 EP51260 MP51279 PP52484 EP40591 EP40628 MP41274 MP41332 MP41455 MP41456 EP54389 EP54505 EP54507 EP54512 EP54846 PP54896 EP54933 EP53047 MP53614 EP53756 EP54031 L o c At i o n o WnE r b A tH u r s t i n tE r E s t West Coast Southland West Coast Canterbury West Coast West Coast West Coast West Coast West Coast West Coast Waikato West Coast West Coast Tasman Canterbury West Coast Otago West Coast Southland West Coast West Coast Buller Coal Limited Rochfort Coal Limited Buller Coal Limited Rochfort Coal Limited Rochfort Coal Limited Buller Coal Limited Buller Coal Limited Buller Coal Limited Cascade Coal Limited Buller Coal Limited Buller Coal Limited Buller Coal Limited Buller Coal Limited Buller Coal Limited Rochfort Coal Limited Buller Coal Limited Rochfort Coal Limited Buller Coal Limited Takitimu Coal Limited Buller Coal Limited Buller Coal Limited 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 112 Section 03PERMiTs gRaNTED PasT 12 MoNThs Extension of Land PE r m i t PE r m i t t y P E o P E r A t o r E x t E n d A r E A b y 54031 54031 41455 Exploration Permit 10 Mile Creek Buller Coal Limited 10.4 hectares Exploration Permit 10 Mile Creek Buller Coal Limited 19.86 hectares Mining Permit Cascade Creek Cascade Coal Limited 110.776 hectares Partial surrender PE r m i t PE r m i t t y P E Prospecting Permit Prospecting Permit Albury Albury o P E r A t o r r E d u c E A r E A b y Rochfort Coal Limited 36.18 sq kms Rochfort Coal Limited 472.3 sq kms Exploration Permit Cascade permit expansion Buller Coal Limited 86.47 hectares Mining Permit Cascade permit expansion Buller Coal Limited 25.06 hectares Exploration Permit Cascade permit expansion Rochfort Coal Limited 10.54 hectares Permit granted PE r m i t PE r m i t t y P E 52484 52484 40628 41456 51260 54512 54933 54389 54846 54505 54507 54031 54896 Exploration Permit Exploration Permit Exploration Permit Exploration Permit Flat Creek Home Hills Tihiroa Albury o P E r A t o r Buller Coal Limited Rochfort Coal Limited Buller Coal Limited Rochfort Coal Limited Exploration Permit Denniston West Buller Coal Limited Exploration Permit Rocklands Buller Coal Limited Exploration Permit 10 Mile Creek Buller Coal Limited Prospecting  Permit Buller Metals Buller Coal Limited 113 Bathurst Resources (New Zealand) Limited Annual Report 2013 – Shareholder InformationCoaL REsouRCEs aND REsERvEs Table 1 – Resources A rE A Export south Buller Escarpment Deep Creek Whareatea West Coalbrookdale Total North Buller Millerton North North Buller Blackburn Total Total Export Domestic Cascade Coaldale New Brighton Canterbury Coal Black Diamond Total Domestic Total Note m E A s u r Ed r E s o u r c E ( m t ) i n d i c A tE d r E s o u r c E ( m t ) i n F Er r Ed r E s o u r c E ( m t ) t o t A L r E s o u r c E (m t ) 2.8 6.2 5.0 - 14.0 - - - - 14.0 0.5 1.2 - - 0.3 2.0 2.1 3.1 12.4 2.3 19.9 1.9 4.9 5.8 12.6 32.5 0.3 1.2 0.7 0.9 0.5 3.6 0.9 1.6 8.1 4.9 15.5 3.6 10.2 14.1 27.9 43.4 0.7 0.7 3.5 2.4 1.2 8.5 16.0 36.1 51.9 5.8 10.9 25.5 7.2 49.4 5.5 15.1 19.9 40.5 89.9 1.5 3.1 4.2 3.3 2.0 14.1 104.0 1. Resources are inclusive of reserves. 2. Resource tonnes have been reported using an appropriate in situ moisture basis for each deposit, ranging from 2% to 8% in situ moisture in Buller and 18% in situ moisture at Coaldale, Canterbury Coal, New Brighton and Ohai. 3. All resources and reserves quoted in this release are reported in terms as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” as published by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (“JORC”). 114 Section 03Escarpment Deep Creek Coalbrookdale Whareatea West Millerton North North Buller Blackburn Cascade Coaldale Canterbury New Brighton Ohai Total MC MC MC MC MC MC MC MC TC TC TC TC Table 2 – average Coal quality – Measured Resource A rE A c o A L t y P E * m E A s u r Ed rE s o u r c E ( m t ) F i xE d c A r b o n % ( A d ) v o L A t i L E m At t E r % ( A d ) i nH E r E n t mo i s t u r E A s H % ( A d ) 15.5 11.0 s uL P H u r % ( A d ) c A L o r i F i c v A L u E ( Ad ) 0.6 2.5 29.5 29.7 c s n 7.5 2.8 6.2 50.8 52.8 32.9 32.9 5 22.7 0.8 27.5 7.5 51.6 25.1 0.9 2.2 0.6 0.5 1.2 4.1 10.4 1.8 0.9 31.3 21.3 4.5 N/A 52.2 36.0 38.8 36.6 2.4 17.0 0.3 8.3 0.4 22.3 N/A 42.8 34.7 14.3 16.0   c s n 7.0 5.0 6.0 9.5 4.0 6.0 4.0 N/A N/A N/A N/A F i xE d c A r b o n % ( A d ) v o L A t i L E m At t E r % ( A d ) i nH E r E n t mo i s t u r E 50.6 52.9 50.2 48.9 52.5 48.2 51.8 50.7 37.3 39.2 33.5 42.4 34.4 34.7 36.1 22.5 36.9 42.6 42.1 38.4 36.4 35.9 39.5 34.8 1.1 2.0 1.7 0.7 1.0 2.6 2.2 2.4 16.5 18.0 16.8 13.9 MC – Metallurgical Coal TC – Thermal Coal Table 3 – average Coal quality – indicated Resource A rE A c o A L t y P E * i n d i c At E d rE s o u r c E ( m t ) A s H % ( A d ) s uL P H u r % ( A d ) c A L o r i F i c v A L u E ( Ad ) Escarpment Deep Creek Coalbrookdale Whareatea West Millerton North North Buller Blackburn Cascade Coaldale Canterbury New Brighton Ohai Total MC MC MC MC MC MC MC MC TC TC TC TC 2.1 3.1 2.3 12.4 1.9 4.9 5.8 0.3 1.2 0.9 0.7 0.5 36.1 14.0 9.7 12.0 28.0 9.7 5.6 3.9 8.4 9.8 7.3 10.1 8.9 MC – Metallurgical Coal TC – Thermal Coal 29.7 30.3 30.4 25.9 31.1 30.9 30.4 30.6 22.2 24.1 23.0 22.4 0.8 2.7 1.8 0.8 4.9 5.0 4.3 1.9 0.7 0.7 0.5 0.4 115 Bathurst Resources (New Zealand) Limited Annual Report 2013 – Shareholder Information                                                                                                                              Table 4 – average Coal quality inferred Resource A rE A c o A L t y P E * i n F Er r Ed rE s o u r c E ( m t ) A s H % ( A d ) s uL P H u r % ( A d ) c A L o r i F i c v A L u E ( Ad ) Escarpment Deep Creek Coalbrookdale Whareatea West Millerton North North Buller Blackburn Cascade Coaldale Canterbury New Brighton Ohai Total MC MC MC MC MC MC MC MC TC TC TC TC 0.9 1.6 4.9  8.1  3.6 10.2  14.1  0.7 0.7 2.4  3.5  1.2 51.9   13.1 10.1 13.7 26.6 12.0 7.6 6.4 8.4 11.7 8.9 8.9 9.1 MC – Metallurgical Coal TC – Thermal Coal 1.0 2.4 1.6 0.8 5.5 4.7 4.8 1.8 0.4 0.7 0.4 0.5 29.8 29.7 29.7 24.6 30.2 31.5 30.1 30.6 21.8 23.4 23.2 22.3 c s n 7.0 5.0 8.0 9.0 5.0 6.0 4.5 N/A N/A N/A N/A F i xE d c A r b o n % ( A d ) v o L A t i L E m At t E r % ( A d ) i nH E r E n t mo i s t u r E 50.7 52.5 49.5 48.3 51.6 48.3 49.4 50.9 34.1 38.7 34.9 46.5 35.0 29.7 35.2 25.3 35.3 41.2 41.8 38.3 36.2 35.6 40.0 31.8 1.2 2.4 1.6 0.7 1.1 2.9 2.3 2.4 18.0 17.2 16.2 12.7 Table 5 – Reserves P r o d u c t c o A L ( m t ) Export Escarpment Deep Creek Whareatea West Coalbrookdale Total Export Domestic Cascade Total Domestic Total Note P r o v E d P r o b A b L E t o t A L 2.2 5.1 3.6 - 1.6 2.4 6.7 1.6 10.9 12.3 3.8 7.5 10.3 1.6 23.2 0.2 0.2 0.4 11.1 12.5 23.6 1. Resources are inclusive of reserves. 2. All resources and reserves quoted in this release are reported in terms as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” as published by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (“JORC”). 116 Section 03               Table 6 – Reserves quality – Product Coal (at 15% moisture) a R E a a s h % ( a D ) C sN v o L aT i L E M aT T E R % s uL P h uR % A v E r A G E r A nG E A v E r A G E r A nG E A v E r A G E r A nG E A v E r A G E r A nG E Escarpment Deep Creek (coking) Deep Creek (thermal) Whareatea West Coalbrookdale Cascade 8.2 5.0 11.8 10.5 7.9 2.0 2.1 – 11.4 4.9 – 5.2 6.4 – 16.5 3.2 – 11.8 2.1 – 11.2 0.3 – 2.1 8 >9 9 5.5 4.5 6 – 9+ 5 – 9++ 0 – 5 8 – 9++ 5 – 8 2 –5 28.4 37.0 29.7 32 25.9 – 31.3 18.0 – 38.0 23.9 – 31.7 29.1 – 32.1 34.9 31.3 – 34.9 0.6 2.5 1.7 0.8 1.0 1.5 0.4 – 0.8 2.0 – 3.1 0.9 – 2.0 0.8 – 0.9 0.3 – 1.4 0.3 – 1.9 Further resource and reserve information can be found on the company’s website at www.bathurstresources.co.nz. the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Ms Ferrier consents to the inclusion in this report of the matters based on her information in the form and context in which it appears above. The information in this report that relates to exploration results and mineral resources for Millerton North, North Buller, Blackburn, Coaldale, Canterbury Coal, New Brighton and Ohai is based on information compiled by Hamish McLauchlan who is a full time employee of Buller Coal Limited and is a member of the Australasian Institute of Mining and Metallurgy. Mr McLauchlan has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr McLauchlan consents to the inclusion in this report of the matters based on his information in the form and context in which it appears above. CoMPETENT PERsoN sTaTEMENTs The information in this report that relates to mineral resources and reserves for Deep Creek is based on information compiled by Adam Bonham-Carter who is a full time employee of Golder Associates (NZ) Ltd and is a member of the Australasian Institute of Mining and Metallurgy. Mr Bonham-Carter has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Bonham-Carter consents to the inclusion in this report of the matters based on his information in the form and context in which it appears above. The information in this report that relates to mineral reserves for Escarpment, Cascade, Coalbrookdale and Whareatea West is based on information compiled by Ainsley Ferrier who is a full time employee of Buller Coal Limited and is a member of the Australasian Institute of Mining and Metallurgy. Ms Ferrier has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the 2004 edition of 117 Bathurst Resources (New Zealand) Limited Annual Report 2013 – Shareholder Information y R o T C E R i D E T a R o P R o C D i R E C T oR s B a N k E R Craig Munro, non-executive chair Westpac Banking Corporation Hamish Bohannan, managing director Rob Lord, non-executive director s T oC k E x C h aNg E L i s T i Ng s Malcolm Macpherson, non-executive director Bathurst Resources (New Zealand) Limited shares Dave Frow, non-executive director are listed on the New Zealand Exchange (NZX), Toko Kapea, non-executive director and the Australian Securities Exchange (ASX) under the code BRL. WE B s iT E www.bathurstresources.co.nz s E C R E Ta Ri E s Marshall Maine Graham Anderson R E g i s T E R E D o F F i C E Level 12, 1 Willeston Street Wellington 6011 New Zealand +64 4 499 6830 s h a R E R E g i s T R y Computershare Investor Services Pty Limited 159 Hurstmere Rd Takapuna Central 0622 New Zealand a uDi T oR PricewaterhouseCoopers 113-119 The Terrace Wellington 6011 New Zealand s oL iC i T oR s Chapman Tripp 245 Blenheim Road PO Box 2510 Christchurch 8041 New Zealand Allion Legal Level 2, 50 Kings Park Road West Perth, WA 6005 118 Section 03 di R e C t oR s B A n k e R Craig Munro, non-executive chair Westpac Banking Corporation Hamish Bohannan, managing director Rob Lord, non-executive director s t oC k e x C h An g e l i s t i n g s Malcolm Macpherson, non-executive director Bathurst Resources (New Zealand) Limited shares Dave Frow, non-executive director are listed on the New Zealand Exchange (NZX), Toko Kapea, non-executive director and the Australian Securities Exchange (ASX) under the code BRL. we B s i t e www.bathurstresources.co.nz s e C Re t A Ri e s Marshall Maine Graham Anderson R e g i s t e R e d o f f i C e Level 12, 1 Willeston Street Wellington 6011 New Zealand +64 4 499 6830 s h A R e R e g i s t R y Computershare Investor Services Pty Limited 159 Hurstmere Rd Takapuna Central 0622 New Zealand A u d i t oR PricewaterhouseCoopers 113-119 The Terrace Wellington 6011 New Zealand s o l iC i t oR s Chapman Tripp 245 Blenheim Road PO Box 2510 Christchurch 8041 New Zealand Allion Legal Level 2, 50 Kings Park Road West Perth, WA 6005 3 1 0 2 — 2 1 0 2 s n o i t A R e p o f o w e i v e R y R o t C e R i d e t A R o p R o C 118 119 Bathurst Resources (New Zealand) Limited Annual Report 2013Section 03 Bathurst Resources (New Zealand) Limited Level 12, 1 Willeston Street Wellington 6011 New Zealand +64 4 499 6830 www.bathurstresources.co.nz 120 Section 01 

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