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2023 ReportPeers and competitors of Peabody Energy:
Gem Diamonds LimitedBathurst Resources Limited
Level 12, 1 Willeston Street
Wellington 6011
New Zealand
+64 4 499 6830
www.bathurstresources.co.nz
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ANNUAL REPORT 2015
Annual General Meeting of Shareholders
To be held at 9.00am on Monday 23 November 2015
at the offices of Minter Ellison Rudd Watts,
125 The Terrace, Wellington 6011.
All dollar amounts referred to in this report are expressed
in New Zealand dollars unless otherwise noted.
Contents
SECTION 1
Chairman’s report ..................................................................................................4
Chief executive officer’s report .............................................................................5
Operations report .................................................................................................. 6
HSEC report ....................................................................................................... 11
Our people ...........................................................................................................13
Directors’ report ..................................................................................................15
Remuneration report ...........................................................................................20
SECTION 2
Financial report ....................................................................................................23
Consolidated income statement .................................................................24
Consolidated statement of comprehensive income ...................................25
Consolidated balance sheet .......................................................................26
Consolidated statement of changes in equity ............................................27
Consolidated statement of cash flows .......................................................28
Notes to the consolidated financial statements ..........................................29
Independent auditor’s report to the members ....................................................64
SECTION 3
Shareholder information ......................................................................................67
SECTION 4
Tenement schedule .............................................................................................72
Coal resources and reserves..............................................................................75
Corporate directory .............................................................................................80
1
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1
2
Section
01
Year in
review
3
Chairman’s
report
In my first year as chairman it has been a time of significant change for
Bathurst as the company completed the period with virtually a whole
new board and a new direction – to pursue a strategy of diversifying risk
and to maintain a cash positive business based on our robust domestic
operations in the South Island.
On behalf of the board I would like to thank our management
team and staff for their commitment and efforts during what
has been a tough but productive year. I would also like to
acknowledge those directors who resigned during the period,
and to welcome our new directors – Richard Tacon, who has
also taken over as chief executive officer, Russell Middleton
and Peter Westerhuis. They bring extensive business and
leadership experience to the board, and to the company.
Finally I would like to thank our shareholders and many
stakeholders for their ongoing support and look forward to
a profitable year ahead.
TOKO KAPEA
Chairman
We have implemented a series of tough measures in the
interest of cost efficiencies that have seen us finish the
period with a cash positive quarter – a commendable
achievement during a year that witnessed record lows in
commodity prices.
I’m also very pleased to report that we have completed
another year without a single significant health or
environmental incident at any of our sites. Safety is
paramount to everything we do at Bathurst, from planning
and organisational activities through to every aspect of our
operations. We foster a culture in which safety is the
responsibility of every individual involved with any aspect of
Bathurst’s operations, from board level through to employees
and contractors, and anyone else who is engaged in any
element of the company’s business.
As we complete the transition from explorer to producer on
the Australian Securities Exchange (ASX), we are moving
forward with a focus on margins, not coal price, to ensure
that we continue to be financially sustainable and ready to
accelerate the development of our export coking coal project
at a time that complements our overall business strategy,
rather than relying on global pricing.
Whilst the company has reported an annual net loss after tax
for the year, it is particularly pleasing to see that our key
business efficiency initiatives are having a real impact on the
bottom line. This is demonstrated by the company reporting
a positive cash flow from operations of $1 million in FY15
compared with an operating cash outflow of $16.7 million for
the same period last year.
4
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 Chief executive
officer’s report
I’m pleased to present this report – my first as chief executive officer
for Bathurst.
First, and foremost, we are proud to
have recorded another year with no
significant injuries or environmental
incidents reported. Safe and
sustainable operations are core
Bathurst values and fundamental to
the way we conduct our business.
During the year we undertook
extensive training for our people in risk
management and health and safety
to ensure that we are in compliance
with the new Health and Safety in
Employment Act that will come into
force in early 2016.
For Bathurst, this has been a year of
review, with restructures across the
company from board level down, and
the implementation of a strategy aimed
at mitigating risk and driving cost
efficiencies to strengthen our cash
balance. Our strategy is to continue to
reduce operating costs, to increase
production and to focus on achieving
sustainable margins from all our
operations. This is something we can
control to a large extent, as opposed
to focusing on global coal pricing over
which we can have little impact.
We have already seen the results of
this with a cash positive final quarter,
a reduction in mining overheads from
FY14 of 40%, and a reduction in
administration overheads from FY14
of 17%. Production for the year
exceeded forecast at 384,000 tonnes,
and we are projecting a further 17%
increase in production in the
coming year.
During the past 18 months we have
reduced employee numbers, but these
were mainly corporate and project
related roles; we were able to maintain
the workforce at the face so we can
continue to build our domestic
operations. Late last year we took over
the full mining operations at Takitimu
from the existing contractor. This was
a smooth transition whereby we took
on the contractor’s site staff and hired
the necessary plant. We will continue
to review this operation to determine if
there are more efficiencies to be
gained, particularly in plant and
equipment leasing.
We recovered first coal at Escarpment
in September 2014 and, while we
have announced that we won’t be
taking that project into full commercial
development in the immediate future,
we have made significant inroads in
terms of site development so we can
quickly ramp up to steady state mining
when all costs align to provide an
acceptable margin.
At our Canterbury mine, we resumed
operations following a review of the
coal processing operations. We are
on track to produce 60,000 tonnes
of coal from Canterbury in FY16.
We reviewed our permit holdings and
surrendered those considered
non-essential for our immediate growth
based on the development
requirements identified in our strategic
plan. This will see significant savings in
compliance costs for the company.
At a corporate level, we reduced
our board numbers and delisted
from the NZX to achieve further
cost efficiencies.
Our focus for the coming year is
on lowering costs, implementing
further operational efficiencies and
increasing margins.
I take this opportunity to thank the
Bathurst team for their hard work and
support throughout a challenging time
and look forward to a safe and
profitable year ahead.
RICHARD TACON
Chief Executive Officer
5
Review of
operations
Bathurst is a New Zealand resources company. Its operations are in the
South Island of New Zealand where it is established as a leading coal
producer, providing energy for local industrial users and, ultimately,
positioning to become an exporter of high quality metallurgical coal for
steel production in Japan, India and Asia.
Whilst listed on the Australian
Securities Exchange, Bathurst is a
New Zealand registered company,
employing more than 100 staff across
its operations. The company’s head
office is in Wellington. Bathurst has no
operations outside New Zealand.
Buller Coal Project
The Buller coalfield is situated on the
west coast of the South Island of
New Zealand. It is regarded as one
of the country’s most significant fields
and is particularly well known for its
production of high quality, low ash
and high fluidity coking coals, which
are highly sought after by international
steelmakers.
small quantities of coal as part of the
South Buller
initial site construction works. The
main objective at this time is to plan
the mine with low operating costs and
explore routes to markets that are low
cost in terms of capital and operation.
The intent is to design the operations
to ensure a margin in the prevailing
market conditions. Once this has been
achieved, exporting will commence.
Escarpment will be targeting an initial
output of 500,000 tonnes of coking
coal per annum for international steel
markets. Over the life of the block,
total annual production is expected to
increase to around 750,000 tonnes.
Cascade
The operating Cascade mine forms
part of the South Buller operation.
The Cascade coal is a semi-soft
coking coal that is being sold into
the domestic market, largely for the
manufacture of cement. The local
cement producer has announced its
intention to close its Westport
operation in 2016. That timing will
coincide with the depletion of the
economically recoverable resource
at Cascade, and it is planned for full
mining operations to wind down and
rehabilitation to continue until full
closure obligations have been met.
Bathurst is developing an export
coking coal operation from its permits
in the Buller coalfield. The key first
stage of this project is the Escarpment
mine, which is now in operation mining
The next phase of development of the
Escarpment
Buller Coal Project will be Whareatea
West, then the North Buller permits
are planned to come on line as the
second stage.
Final consents were granted for
Escarpment in October 2013 and the
Authority to Enter and Operate was
issued in June 2014. Preliminary site
6
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 works commenced on 1 July 2014
and first coal was recovered in
September of that year.
Escarpment is being worked as a
joint operation with the Cascade mine.
Initial roads, waste dumps and
stockpile areas have been formed with
a particular focus on setting up for the
long term operational needs. The first
stages of water management systems
have been completed, including a
construction water sump, pump out
pipeline and temporary water treatment
plant. Portable office buildings are also
on site. Coal mined as part of the initial
construction phase is being blended
with Cascade coal for sale into local
markets. The coming year will see
the mine developed to a stage where
it can quickly move into steady
state production to meet potential
export demand.
Whareatea West and
Coalbrookdale
The next focus for development in
South Buller is the Whareatea West
block which is located immediately
adjacent to the Escarpment permit’s
western boundary. Whareatea West is
an Exploration Permit. The main work
completed over the last 12 months
was to assess and model the vast
amount of data collected in the
previous five years. This had led to
a consolidated view of the Denniston
area rather than three discrete
blocks. This work is presently at
a pre-feasibility stage for the final
integrated plan.
Coalbrookdale is fully consented
for underground mining. Development
is not planned however until market
conditions improve.
North Buller
The North Buller permits lie north of
the Stockton Plateau. 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, so they
will remain as the second stage of
development of the export project.
Domestic operations
Takitimu
The Takitimu mine is located at
Nightcaps, north of Invercargill. Mining
operations originally commenced at
Nightcaps in 1881. Sub-bituminous
coal from the open cut operation is
railed to a number of major industrial
customers in the Southland, Otago
and Canterbury areas. The mine
produces around 230,000 tonnes
of sub-bituminous coal per annum.
During the year, the coal resource in
the Takitimu pit was depleted and the
adjoining Coaldale block became the
focus of operations. The Takitimu pit is
now being progressively backfilled and
rehabilitated to pasture land.
Work was undertaken in 2014 to
upgrade the processing facilities on
site. These improvements have allowed
for increased production and reduced
fines’ generation.
Mining operations at Takitimu were
previously conducted by a contractor
however, in September 2014, Bathurst
took over full mining operations on site
and employed all the existing site staff.
The transition was seamless and
enabled the company to implement
better cost control over the mining
operations at its largest site.
New Brighton
In March 2015, the company
completed the acquisition of the
shares in New Brighton Collieries
Limited, holder of the New Brighton
coal exploration permit. This permit is
in close proximity to the Takitimu mine
and is connected by the same rail line.
It is prospective for high grade
sub-bituminous coal and has potential
to add substantially to the life of the
company’s Southland operations.
The acquisition was finalised under
amended terms which saw an ongoing
deferred consideration replacing the
final payment of $13.25 million,
preserving the company’s cash
reserves. The coal from New Brighton
will be sold into new and existing
domestic contracts and may be
considered for export at a later date.
Black Diamond
Subsequent to period, end an offer
was made to purchase the land
immediately northwest of the Coaldale
block – an area known as Black
Diamond. The area is prospective for
high quality sub-bituminous coal and is
the natural extension of Takitimu’s
Coaldale operations.
Mine planning is targeting first coal
recovery from Black Diamond in the
final quarter of 2017, to coincide with
the depletion of the Coaldale block.
Initial environmental consents have
been lodged and an application will
be submitted to extend the Takitimu
mining permit to include Black
Diamond. This acquisition will
further underpin the development
of Bathurst’s domestic coal strategy
in Southland.
Canterbury
The Canterbury mine is an open
cast mine near Coalgate which is
70 kilometres west of Christchurch.
The mine produces thermal coal which
is low in sulphur and ash and in high
demand by the local dairy and food
processing industries. It has a similar
specification to the Takitimu coal.
Bathurst has a contract to supply coal
from the Canterbury mine to a nearby
dairy processing plant.
7
Coal demand in the Canterbury area is
set to grow to over 150,000 tonnes
per annum in the short term with the
expansion of the local food and dairy
processing industries. The proximity
of the mine to these markets offers a
distinct freight advantage to target this
growth potential.
Full mining operations at Canterbury
were suspended in 2014 to allow the
processing operations to be reviewed
and upgraded. New plant was installed
and mining operations resumed in the
March FY15 quarter.
Production from the mine is expected
to grow from around 35,000 tonnes
per annum to 60,000 tonnes in the
coming year and more than 75,000
tonnes by FY17.
Albury
The Albury project, located 40
kilometres west of Timaru, was an
historic underground and open cut
mine worked from the early 1900s
through to the mid-1960’s. The mine
produced low rank sub-bituminous coal
for local sales. An initial programme
of low impact exploration delivered
encouraging results and a bulk sample
was taken for trials to assess the
suitability of the coal for energy
production for local industry. The trials
were positive but further exploration
and development have been deferred
for the current time.
Exploration
Exploration was again scaled back
during the financial year. A total of
1,003 metres was drilled and
excavated with the focus on South
Buller and Nightcaps.
Two rigs were operating in the Buller
Coal Project areas. At Cascade,
15 holes were drilled in the pit to assist
with operational short term mine
planning and to obtain samples for coal
quality analysis. A further 54 holes
were drilled across the South Buller
permits for resource definition and
waste rock characterisation and to
provide marketing samples. A
trenching programme was undertaken
at the Canterbury mine to assess near
surface resources for the next mining
stage and nine channel samples were
excavated at Takitimu for coal quality
analysis.
Throughout the year, data was
analysed and re-evaluated as part of a
programme to upgrade Resource and
Reserve reporting to comply with the
new Joint Ore Reserves Committee
(JORC) 2012 reporting standards.
Permit surrenders
During the year a review was
undertaken of the company’s permit
holdings in relation to its immediate
development strategy. As a result of
this it was considered that the
compliance costs to maintain certain
tenements were not warranted under
the company’s business plan. This
resulted in the surrender of certain
exploration permits, which occurred
subsequent to period end.
8
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 Production
Financial
Production figures for Bathurst’s operating mines for the year
ended 30 June 2015 are set out below.
OPERATION
Takitimu
Cascade
Escarpment
Canterbury Coal
TOTAL
PRODUCTION
(T)
OVERBURDEN
(BCM)
302,871
1,706,069
77,765
491,813
11,851
60,244
2,656
106,799
393,941
2,364,925
The group made a net loss after tax of $16.4 million in the
period to 30 June 2015 compared with a net loss after tax
of $188.9 million for the period ended 30 June 2014.
Key business efficiency initiatives and tight fiscal
management saw the group generate an adjusted EBITDA
of $4.9 million in 2015 compared with an adjusted EBITDA
of ($0.5m) for the same period last year. This result was
despite a short term drop in supply to two major customers
that experienced a period of reduced productivity during
the year.
STATUTORY LOSS AFTER TAX
Add back
Depreciation and amortisation
Net finance costs
Tax credit
EBITDA
Add back
Fair value loss/(gain) on deferred consideration
Impairment charges
Loss on disposal of fixed assets
Restructuring costs
Adjusted EBITDA
GROUP
2015
$’000
GROUP
2014
$’000
(16,406)
(188,903)
14,668
14,012
1,261
(11,365)
–
(95,331)
(477)
(281,587)
615
(169,396)
1,171
449,984
1,160
2,405
10
502
4,874
(487)
The Buller Coal Project is subject to movements in the
The group produced a positive operating cash flow of
international coking coal market, which have seen prices
$1 million for the year ended 30 June 2015 compared with
further reduce since 2014. As the coal price affects the
potential value of the project, all assets were impaired in
2014, and this remained the case in 2015.
an operating cash outflow of $16.7 million in the same
period last year. This represents a significant turnaround in
Bathurst’s operational performance and creates a solid
platform to deliver on the group’s operational efficiency
The Cascade mine was partially impaired in the current year
targets in the coming year.
due to a major commercial sales contract expiring in 2016.
Production is planned to reduce in line with the drop in
demand and rehabilitation activities will then increase.
Current coal volumes and pricing are contracted.
The group had $5.2 million of cash and short term deposits
on hand as at 30 June 2015.
Capital raising
In January 2015 the company announced a restructuring of
the executive management team as part of the company’s
efficiency review. This followed a number of positions being
made redundant early in 2014 and will ensure the business
Further to the AUD$7.4 million placement in April 2014, a
non-renounceable rights issue was announced to provide all
shareholders with the opportunity to purchase shares at the
placement price. The rights issue closed early in July 2015
remains a sustainable and right sized operation in the current
with the allotment of 2,146,913 ordinary shares, raising
economic environment.
$0.1 million before expenses.
9
Sustainability
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 the management of social, environmental and economic performance.
This means that everything the company does is guided by a commitment to
shareholders, employees, stakeholders, local communities and, importantly,
the environment.
Bathurst’s commitment is backed by a significant investment in resources to ensure
social and environmental impacts are managed from design and planning through
to production and, eventually, rehabilitation. The company is constantly looking to
improve productivity in ways that are better for the environment and safer for our
people.
During 2015, the company made significant progress in the review and upgrade of
information technology practices to eliminate a reliance on legacy systems and to
support sustainable management reporting and effective decision making.
Every year, the public focus on environmental issues deepens, and the decisions
people make as custodians of the world’s scarce resources grow increasingly
important. At the same time the issues of local employment and regional economic
development gain importance. The ultimate aim is to ensure Bathurst’s operations
enable society to meet its present needs without compromising the ability of future
generations to meet their needs. The company engages with stakeholders on
climate change issues through relevant industry associations such as Straterra, the
industry body for the New Zealand minerals sector, and New Zealand’s Sustainable
Business Council. As members of these organisations Bathurst is able to interact
with other companies, various stakeholders and government to develop simple and
effective climate change policy and regulation.
10
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 Health, safety,
environment and
community
Bathurst has a Health, Safety,
Environment and Community (HSEC)
management framework to guide the
company’s decisions on responsible
resource use and to consider the
impact of its activities.
The framework was developed
generally in accordance with local and
international standards to enable the
continual improvement of Bathurst
policies, standards and procedures
to minimise risk to mine workers and
the environment.
Health and safety
People are Bathurst’s greatest asset.
The company’s focus is on zero harm
and it takes responsibility for the care
and consideration of its employees with
the goal of ensuring every employee
and contractor goes home healthy and
safe at the end of each day.
Bathurst has an HSEC committee that
meets regularly to assist the board in
enabling the company to operate its
businesses safely, responsibly and
sustainably. Key performance indicators
have been chosen to measure
performance and effectiveness against
specific objectives and targets.
The company has embraced the new
health and safety regulations for the
New Zealand mining industry that
came into force in December 2013.
The regulations were developed in
consultation with industry to bring New
Zealand’s approach to mining health
and safety into line with international
leading practice. Richard Tacon,
Bathurst’s chief executive officer, was
involved in developing the regulations
and Escarpment was the first new coal
mine in New Zealand to operate under
them. Under the transitional provisions,
Bathurst’s remaining operations
adopted the new regulations from
January 2015.
Bathurst has been reviewing and
updating health and safety systems
at all sites appropriate to the scale and
context of the company’s operations,
generally in accordance with AS/NZS
4804 occupational health and safety
management systems. The system
development has included:
• 28 new corporate standards eg.
a communication and participation
standard, worker health control
plan, training standard and revised
risk management standard
• The completion of broad brush risk
assessments and site specific
principal hazard risk assessments
at all sites
• The development of principal hazard
management plans and principal
control plans for all sites
• The development (currently
underway) of health and safety
management systems for coal
exploration activities that are
defined as mining operations under
the new legislation. This has
included a collaborative approach
with two other New Zealand coal
companies to complete joint
exploration risk assessments
• The development of training
implementation plans for the new
system elements
The outcomes being sought are the
delivery of a robust reporting system,
a strong safety culture and dynamic
integration with other operational
systems.
An integral part of the new mining
legislation is risk management.
Bathurst recognises that risk
management is not about eliminating
all risks; it is about identifying and
responding to risks in a way that
creates value for the company and
its shareholders. Bathurst’s risk
strategy and risk tolerance level are
continually reassessed as the company
implements its development strategies.
Around 30% of Bathurst’s workforce
has completed risk management
training. Training for the remainder
of employees is planned for 2016.
Additional health and safety training
has included:
• Health and safety leadership
• Personal accountability
• Emergency management
Incident investigation
•
• Human factors
• Control of energy
• First aid.
The new Health and Safety at Work
Act will come into force for all New
Zealand workplaces in April 2016.
Preparation for this new act has
already begun with analysis of
existing systems across Bathurst’s
sites to determine what modifications
are required.
Environment
Respect for the environment is a core
part of Bathurst’s business strategy –
The company is committed to
minimising its environmental footprint
and its use of natural resources. It’s
not just about mining, it’s also what is
left behind. The company’s operations
are conducted with deference to the
impacts mining has and the need to not
only rehabilitate the land that has been
disturbed but also to deliver an overall
net gain back to the environment.
Bathurst’s environmental management
approach is based on the principles of
plan, do, check and act and aligns with
the principles of ISO14001. This
approach involves the identification,
assessment and control of
environmental risks across all phases
of the business, from exploration
through to development, operation and
then closure. The company works in
partnership with stakeholders
to understand the challenges and
opportunities of its activities, and how
best to manage them.
Long term planning for the management
of the residual environmental impacts
of mining is a fundamental issue for
the industry and a stakeholder
concern. In line with good industry
practice, at the Escarpment mine
Bathurst incorporates mine closure
planning as early as possible within
life of mine plans. The progressive
rehabilitation of disturbed land will be
an integral component of each stage
11
of the operation’s development and will be undertaken as
soon as practicable to minimise closure liabilities.
In the past 12 months, rehabilitation of tracts of land was
completed at the Cascade and Takitimu mines based on final
land use requirements. Reviews have commenced of the
final landform areas for post-closure stability.
Bathurst has committed to a large programme of pest control
on the Denniston Plateau, where mining at the Escarpment
project is underway. Under an agreement with the
Department of Conservation, Bathurst will fund a $3 million
biodiversity enhancement project, including weed, pest and
predator control, over 4,500 hectares on and around the
Denniston Plateau. Mining heritage on the plateau will also
be enhanced with almost $600,000 allocated to mining
preservation works.
Community
Bathurst cannot operate in a way that is efficient and
sustainable without the support of its host communities.
Wherever it operates, Bathurst works with a range of local
stakeholders and businesses to deliver benefits from its
operations back into those communities whilst striving to
minimise any negative impacts from its activities. Bathurst
has a policy of recruiting locally and encourages its workers
to live locally. The company also understands the importance
of keeping its neighbours informed with regular information
sessions and updates.
During the year Bathurst helped local groups achieve their
goals by supporting a range of activities including:
• Buller High School scholarship to help fund university
studies
Another $18 million will be spent by Bathurst in participation
with the Department of Conservation, funding a 35 year pest
and predator control programme over 25,000 hectares of the
Heaphy River Valley in the Kahurangi National Park, to
protect great spotted kiwi, kaka, blue duck and
Powelliphanta snails.
• Sponsorship of the Denniston Chain Grinder mountain
bike event
• Sponsorship of the Mount Linton Muster mountain bike
race in Southland
• Sponsorship of Ohai Nightcaps Junior Rugby Club
• Support for the Foundation for Youth Development.
12
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 Our people
Craig Pilcher
General Manager – Domestic Operations
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.
Jason Hungerford
Group Financial Controller
Jason joined the Bathurst team in 2013 following the
relocation of its head office to Wellington. He began his
career as a chartered accountant with KPMG in Wellington
prior to spending a number of years in the United Kingdom.
Jason has broad sector experience across the resources,
FMCG and financial services sectors, having worked in
senior finance roles at Anglo American, Cadbury and
Kiwibank. Jason brings a commercial outlook to the business
underpinned by a strong focus on risk, governance and
financial control. He holds a Bachelor of Commerce and
Administration with a post graduate Diploma in Professional
Accounting. Jason is a member of Chartered Accountants
Australia & New Zealand.
13
Fiona Bartier
General Manager – Health, Safety Environment
and Community
Fiona is an environmental and resource scientist who has
worked in management roles for government, in research
and education, for industry groups, and for a range of
mining companies.
Fiona spent seven years working in mining environmental
research at The University of Queensland and the University
of New England, where she visited and worked at more than
40 mine sites across a range of commodities. She then
spent a period of time working for the Minerals Council
of Australia.
Before joining Bathurst, Fiona lived for ten years in mining
communities in the Hunter Valley and western coalfields of
New South Wales, working first as a consultant, and then
within industry. She has management experience in open
cut and underground operations, and brownfield and
greenfield projects.
Sam joined Eastern Resources Group in Brisbane as
manager of corporate relations and business development,
a position she held for eight years. Her role with Eastern
focused on growing the company’s mining operations in
New Zealand, developing existing tenements and sourcing
new projects.
Sam joined the Bathurst team following its acquisition of the
Eastern assets and relocated to Wellington in 2011.
Hamish McLauchlan
General Manager – Exploration
Hamish is a geologist with more than 20 years’ experience
and a diverse knowledge of exploration, open cast mining,
geological modelling and geotechnical engineering. Hamish
was previously senior geologist at Solid Energy’s Stockton
mine and has also worked extensively as an exploration and
production geologist in the resources sector in New Zealand
and offshore. Hamish holds a Master of Science with
Honours in Engineering Geology and a Bachelor of Science
majoring in Geology. He is also a member of the AusIMM.
Fiona holds a Bachelor of Applied Science (Resource
Hamish joined Bathurst when the Eastern assets were
Science). She joined Bathurst in 2012 and is based in the
acquired on March 2011 and is based in the company’s
Wellington office.
Westport office.
Sam Aarons
General Manager – Corporate Relations
Sam’s background is advertising, marketing and commercial
Alison Brown
General Counsel
Alison has over 30 years’ legal experience in private
management. She worked with several major advertising
law practices and as in-house counsel for commercial
agencies in Melbourne before spending 14 years as a
enterprises. She has specialised in mining, environmental
divisional general manager for Henry Walker Eltin, a large
and climate change law after a solid grounding in commercial
civil and mining contracting company (now Leighton
law. She has worked variously for Simpson Grierson, Minter
Contractors) based initially in Darwin and then in Brisbane.
Ellison Rudd Watts Lawyers and the Ministery of Foreign
During this period she also served with the Royal Australian
Affairs and Trade, taught law professionals, as well as being
Navy Reserves as public relations officer for the Darwin
general counsel for Solid Energy from 2000 to 2011. Alison
Port Division.
holds a Master of Laws with Honours.
14
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 Directors’ report
From left to right: Toko Kapea, Peter Westerhuis, Richard Tacon, Russell Middleton.
Your directors present their report on the consolidated entity (the group)
consisting of Bathurst Resources Limited (Bathurst) and the entities it
controlled at the end of, or during, the year ended 30 June 2015.
Directors
The following persons were directors of Bathurst Resources
Limited as at 30 June 2015.
Toko Kapea Non-executive Chairman
Richard Tacon Executive Director
24 March 2015 as managing director, Dave Frow resigned
on 13 November 2014 as non-executive chairman and
Rob Lord resigned on 13 November 2014 as non-executive
director. Marshall Maine resigned as joint company secretary
on 13 November 2014 and Graham Anderson resigned as
joint company secretary on 25 May 2015.
Russell Middleton Non-executive Director
Principal activities
Peter Westerhuis Non-executive Director
During the year the principal continuing activities of the group
consisted of:
The following board members resigned during the period:
• The production of coal in New Zealand, and
Malcolm Macpherson resigned on 29 May 2015 as
• The exploration and development of coal mining assets in
non-executive chairman, Hamish Bohannan resigned on
New Zealand.
15
Dividends
No dividend was paid or declared during the current or prior
financial year and the directors do not recommend the
payment of a dividend.
Environmental regulation
The Bathurst group’s exploration and mining activities are
subject to a range of environmental regulations which govern
how the group carries out its business. These regulations are
set out below.
Mine development/mining activities
The mining activities of the group are regulated by the
following:
• The resource consents granted by the relevant district
and regional territorial authorities, after following the
processes set out in the Resource Management Act
1991.
• Mining permits issued under the Crown Minerals Act
1991 by the Minister of Energy and Resources, required
to mine Crown coal.
• Access arrangements, granted under the Crown Minerals
Act 1991 with the relevant landowners and occupiers.
For Crown-owned land managed by the Department of
Conservation, these access arrangements are granted by
the Minister of Conservation. For significant projects,
there will be a concurrent granting with the Minister of
Conservation and the Minister of Energy and Resources.
• Concession agreements under the Conservation Act
1987 for land outside a permit area but owned by the
Crown and managed by the Department of Conservation.
• Wildlife authorities, issued under the Wildlife Act 1953
granted by the Minister of Conservation.
Controls around water and air discharges that result from
mining operations are governed by the conditions of the
resource consents under which the particular mining activity
is operating. The mining operations of Bathurst are inspected
on a regular basis and no significant instances of non-
compliance have been noted.
To the best of the directors’ knowledge, all approved
activities have been undertaken in compliance with the
requirements of the Resource Management Act 1991,
Crown Minerals Act 1991, Conservation Act 1987 and
Wildlife Act 1953.
Exploration activities
To carry out exploration, the company needs to hold a
relevant exploration permit (where the coal is Crown owned),
relevant resource consents to permit exploration and an
access arrangement with the relevant landowner. Bathurst
holds, to the best of the directors’ knowledge, all relevant
resource consents and has entered into all of the appropriate
agreements, and has acted in accordance with those
resource consents and agreements in regards to engaging in
exploration activities.
Hazardous substances
Mining activities involve the storage and use of hazardous
substances, including fuel. Bathurst must comply with the
Hazardous Substances and New Organisms Act 1996
when handling hazardous materials. To the best of the
directors’ knowledge, no instances of non-compliance
have been noted.
Emissions trading scheme
The New Zealand Emissions Trading Scheme came into
effect on 1 July 2010, which essentially makes Bathurst
liable for greenhouse gas emissions associated with the coal
it mines and sells in New Zealand and for the fugitive
emissions of methane associated with that mined coal.
Bathurst’s liability is based on the type and quantity of coal
tonnes sold, with the cost of such being passed on to
Bathurst’s customers. Bathurst’s Emissions Trading Policy
can be found on the company’s website.
16
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 Corporate governance
Bathurst’s Corporate Governance Statement is available on
the company’s website: www.bathurstresources.co.nz/
who-we-are/corporate-governance.
Information on directors
Mr Toko Kapea BA, LLB
Non-executive Chairman
Experience and expertise
Mr Kapea is a Wellington based commercial lawyer,
consultant and director.
He is a director of Tuia Group Limited and a partner in Tuia
Legal. He has worked at Chapman Tripp and in legal roles
in-house at Meridian Energy, Bank of New Zealand,
St. George Bank NZ and ANZ Bank.
Mr Kapea also sits on the board of Ng-ati Apa Developments
Limited (Wanganui-Rangitikei region). Ng-ati Apa has
investments in commercial property, forestry land and farms.
He is an independent committee member of the Banjima
Direct Benefits Trust in Perth, Western Australia. The role
involves developing funding and distribution policies for royalty
payments from mining companies for the Banjima people in
the Pilbara region.
Mr Kapea has been a director of Parininihi ki Waitotara
Incorporation (in Taranaki) and Port Nicholson Fisheries
Limited. He was on the Government Review Panel relating to
the Te Ture Whenua M-aori Act 1993 (M-aori Land Act) and
was also the lead negotiator for Ng-ati Apa ki Rangitikei
(North Island) for its direct negotiation Treaty of Waitangi
claims with the Crown.
Mr Kapea was appointed to the board of Bathurst as
non-executive director in May 2013 and became chairman in
May 2015.
Other current directorships of listed companies
Nil
Former directorships in last three years of listed
companies
Nil
Special responsibilities
Chairman of the Remuneration and Nomination committee
Member of the Audit and Risk committee
Interests in shares and options
115,000 fully paid ordinary shares in Bathurst Resources
Limited
Mr Richard Tacon
Executive Director
Experience and expertise
Mr Tacon has worked in a large number of roles across the
coal mining industry. His first job was at Greymouth’s
Liverpool State Mine, owned by the New Zealand
Government. He moved to Australia to further his mining
career and went on to hold several management roles in coal
mines around Australia, working his way from undermanager
to general manager. Mr Tacon has held senior leadership
roles in the coal sector for the past decade.
Mr Tacon holds first, second and third class coal mining
qualifications and studied at the Otago School of Mines.
He has spent 15 years as a mines rescue brigadesman,
making him familiar with the principles and practice of mine
safety. Mr Tacon has also completed the New Zealand Mine
Incident Controller training.
Mr Tacon is an ex-secretary for the Mine Managers
Association of Australia and sits on the board of the New
Zealand Mines Rescue Trust and Minerals West Coast.
After living and working in Australia for 32 years, he returned
to New Zealand to take up the position of chief operating
17
officer with Bathurst in 2012. He was appointed to the role
of chief executive officer in March 2015 and was appointed
to the board as executive director in April 2015.
Peter Westerhuis MBA, BEng
Non-executive Director
Other current directorships of listed companies
Nil
Former directorships in last three years of listed
companies
Nil
Special responsibilities
Chief Executive Officer
Member of the Health, Safety, Environment and Community
committee
Interests in shares and options
476,596 fully paid ordinary shares in Bathurst Resources
Limited
Experience and expertise
Mr Westerhuis is a professional engineer with post graduate
business qualifications and more than 30 years of Australian
and international experience in the iron ore, gold and coal
industries, the past seven years at CEO and MD level. He
has successfully developed and managed large mining and
processing operations including overseeing the transition
from explorer to producer.
Mr Westerhuis has undertaken many complex commercial
negotiations for joint ventures, capital funding, contracts,
litigation, product marketing and off-take agreements.
He is particularly passionate about health and safety,
teamwork, operational effectiveness, business improvement
and project delivery.
Mr Russell Middleton MBA, BBus
Non-executive Director
Experience and expertise
Mr Middleton has more than 25 years experience in the
mining and construction sectors with significant experience in
mine project evaluations and the construction of new mines.
Mr Westerhuis is currently consulting to resources companies
in Africa and South America. More recently he was the group
managing director of Guildford Coal, developer of a coking
coal business in Mongolia, and the chief executive of the
Ensham Joint Venture developing and operating large open
cut and underground coal reserves in Queensland.
Based in Sydney, he was most recently chief financial officer
with Hillgrove Resources Limited, an ASX listed resources
company focused on developing base and precious metals
projects. He was also director and company secretary for the
Hillgrove Group’s subsidiary companies.
Starting his career as a public accountant, Mr Middleton has
held senior management positions in accounting, commercial
and planning roles. He undertook various roles with BHP
before joining Shell where he was commercial manager for
the construction, development and production of a major
underground mine.
Mr Middleton was appointed to the board in April 2015.
Other current directorships of listed companies
Nil
He has been a director of the Queensland Resources Council
and a director of the Australian Coal Association.
Mr Westerhuis was appointed to the board as non-executive
director in April 2015.
Other current directorships of listed companies
Nil
Former directorships in last three years of listed
companies
Managing Director – Guildford Coal Limited
February 2013-October 2013
Special responsibilities
Chairman of the Health, Safety, Environment and Community
committee
Member of the Remuneration and Nomination committee
Former directorships in last three years of listed
companies
Nil
Interests in shares and options
Nil
Special responsibilities
Chairman of the Audit and Risk committee
Interests in shares and options
750,000 fully paid ordinary shares in Bathurst Resources
Limited
Other current directorships of listed companies
Nil
Former directorships in last three years of listed
companies
Nil
18
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 Company secretary
Bill Lyne
Mr Lyne has a wealth of experience in the role of company
secretary of public companies ranging from stock exchange
listed to small private companies and ‘not-for-profit’ entities.
He has operated his own business, Australian Company
Secretary Service, since 1998, providing professional
specialist company secretarial, corporate compliance,
governance and administrative services to various clients
in diverse businesses across a wide range of industries.
He is currently company secretary of ASX-listed Orion Metals
Limited and Jumbo Interactive Limited, of which he is also
a director.
Mr Lyne holds a Bachelor of Commerce degree in Economics
from the University of New South Wales, is a chartered
accountant, and a Fellow of the Institute of Chartered
Secretaries and Administrators (UK) and Governance Institute
of Australia.
Mr Lyne was appointed company secretary in May 2015.
19
Remuneration
report
Role of the Remuneration and
Nomination committee
Principles used to determine the
nature and amount of remuneration
The Remuneration and Nomination committee (‘R&N
committee’) is a subcommittee of the Bathurst board. The
R&N committee is responsible for making recommendations
to the board on remuneration matters such as non-executive
director fees, executive remuneration for directors and other
executives, and the over arching executive remuneration
policy and incentive schemes.
The objective of the R&N committee is to ensure that the
company’s remuneration policies and structures are fair and
competitive, and aligned with the long term interests of the
company. The R&N committee draws on its own experience
in remuneration matters and seeks advice from independent
remuneration consultants.
The Corporate Governance Statement provides further
information on the role of the R&N committee.
Non-executive directors
The fees and payments the company makes to its non-
executive directors reflect the level of responsibility attributed
to board members and the demands that are made on the
directors’ time. Non-executive directors’ fees and payments
are reviewed annually by the board. The board has also
considered the advice of independent remuneration
consultants to ensure that non-executive directors’ fees and
payments are appropriate and in line with industry standards.
The fees paid to the chairman are determined independently
of the fees of non-executive directors. The chairman is not
present at any discussions relating to the determination of his
own remuneration.
Directors’ fees
Non-executive directors’ fees are determined within an
aggregate directors’ fee pool limit, which is periodically
recommended for approval by shareholders. The maximum
currently stands at $1,000,000 per annum.
The total remuneration and other benefits to directors for services in all capacities during the year ended 30 June 2015 was:
DIRECTOR
Mr T Kapea
Mr R Middleton
Mr P Westerhuis
Mr R Tacon
Mr D Frow
Mr R Lord
Mr M Macpherson
Mr H Bohannan
20
SHORT TERM
BENEFITS
NET LOAN
FORGIVENESS
TERMINATION
BENEFITS
SHARE–BASED
PAYMENTS
$74,167
$10,450
$10,450
$532,854
$50,000
$25,613
$88,274
–
–
–
–
–
–
–
TOTAL
$74,167
$10,450
$10,450
–
–
–
$81,596
$614,450
–
–
–
$50,000
$25,613
$88,274
$564,453
$730,818*
$359,037*
$123,176
$1,777,484
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 *No payment was made to Mr Bohannan for net loan
forgiveness or termination benefits. The termination
agreement included the forgiveness of amounts due to the
company, offset by severance entitlements due and accrued
at the time of resignation.
The following board members resigned during the period:
Malcolm Macpherson resigned on 29 May 2015, Hamish
Bohannan resigned on 24 March 2015, Dave Frow resigned
on 13 November 2014 and Rob Lord resigned on
13 November 2014.
Russell Middleton and Peter Westerhuis were appointed non-
executive directors on 29 April 2015.
Richard Tacon was appointed executive director on
1 April 2015.
the executive on key non-financial drivers of value. Most
importantly, the company ensures that its remuneration policy
attracts and retains high calibre executives, who in turn add
value to the company and to the shareholders.
The company also believes that its remuneration policy for
executives is aligned to the interests of its executives. The
executive remuneration policy rewards capability and
experience and reflects competitive reward for contribution to
growth in shareholder wealth. The policy is transparent so it
provides a clear structure for earning rewards and provides
recognition for contribution.
The framework provides a mix of fixed and variable pay, and
a blend of short and long term incentives. As executives gain
seniority with the group, the balance of this mix shifts to a
higher proportion of ‘at risk’ rewards.
Directors’ securities interests
The executive remuneration and reward framework has
The interests of directors in securities of the company as at
30 June 2015 were:
two components:
• Base pay and benefits, including superannuation, and
• Long term incentives
DIRECTOR
ORDINARY SHARES
PERFORMANCE
RIGHTS VESTED
The combination of these comprises an executive’s total
Mr T Kapea
Mr R Middleton
Mr P Westerhuis
115,000
750,000
–
–
–
–
Mr R Tacon
381,064
95,532
Executive remuneration
The objective of the group’s executive reward framework is
to ensure that reward for performance is competitive and
appropriate for the results delivered. The framework aligns
executive reward with the achievement of strategic objectives
and the creation of value for shareholders, and conforms to
industry practice.
The R&N committee ensures that executive pay is
competitive and reasonable, as well as acceptable to
shareholders. The company ensures that an executive’s
remuneration is linked to that executive’s performance to
ensure that the interests of the company and its executives
are aligned. The R&N committee determines executive
remuneration to ensure transparency and to manage
capital effectively.
In consultation with external remuneration consultants,
the company has structured an executive remuneration
framework that is market competitive and complementary
to the reward strategy of the organisation.
The company believes that the policy for determining
executives’ remuneration is aligned with shareholders’
interests because it focuses on sustained growth in
shareholder wealth by pushing growth in share price and
delivering constant returns on assets, as well as focusing
remuneration.
Base pay and benefits
Executives are offered a competitive base pay that comprises
the fixed component and rewards. External remuneration
consultants provide analysis and advice to ensure that base
pay is set to reflect the market for comparable roles. Base
pay for executives is reviewed annually to ensure that the
executives’ remuneration is competitive with the market.
An executive’s remuneration is also reviewed on promotion.
There are no guaranteed base pay increases included in any
executives’ contracts.
Long term incentives
The Bathurst Long Term Incentive Plan (LTIP) was approved
by shareholders at the 2012 Annual General Meeting
and was adopted by the company on reorganisation. The
purpose of the plan is to reinforce a performance focused
culture by providing a long term performance based element
in the total remuneration packages of certain employees (in
the form of performance rights) by aligning and linking the
interests of Bathurst’s leadership team and shareholders,
and to attract and retain executives and key management.
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 the retention of executives.
Performance rights granted under the plan carry no dividend
or voting rights. When exercised, each performance right
converts into one fully paid ordinary share.
21
Service agreements
Officers’ securities interests
On appointment to the board, each non-executive director
enters 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.
Employees’ remuneration
During the year ended 30 June 2015, 20 employees
(excluding the chief executive officer) received individual
remuneration over $100,000.
RANGE
$100,001 – $110,000
$110,001 – $120,000
$120,001 – $130,000
$130,001 – $140,000
$140,001 – $150,000
$160,001 – $170,000
$170,000 – $180,000
$230,001 – $240,000
$310,001 – $320,000
$470,001 – $480,000
# OF
EMPLOYEES
3
2
3
2
1
3
2
1
2
1
The interests of the current company officers (excluding the
chief executive officer) in securities of the company at
30 June 2015 were:
ORDINARY
SHARES
PERFORMANCE
RIGHTS VESTED
341,578
58,789
OFFICER
Ms S Aarons
Donations
The company made donations totalling $14,000 to:
• Fostering Kids
• Foundation for Youth Development
• Ohai Nightcaps Lions Club
• Ohai Nightcaps Rugby Club
• Buller Cycling Club
• Autism New Zealand Inc.
Directors’ and officers’ liability
insurance
The company and its subsidiaries have arranged policies of
directors’ and officers’ liability insurance, which, together with
a deed of indemnity, seek to ensure to the extent permitted
by law that directors and officers will incur no monetary loss
as a result of actions legitimately taken by them as directors
and officers.
This report is made in accordance with a resolution of directors.
22
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 Section
02
The directors of Bathurst Resources Limited authorised these financial statements for issue on behalf of the Board
RUSSELL MIDDLETON
Director
25 September 2015
TOKO KAPEA
Chairman
25 September 2015
Consolidated statement of comprehensive income
Notes to the consolidated financial statements
Independent auditor’s report to the members’
Consolidated statement of changes in equity
Consolidated statement of cash flows
Consolidated income statement
Consolidated balance sheet
Financial statements
Contents
Contents
Page
Page
64
28
29
26
25
27
24
Financial
statements
23
Consolidated income statement
For the year ended 30 June 2015
Revenue
Less: cost of sales
GROSS PROFIT/(LOSS)
Other Income
Depreciation
Administrative and other expenses
Fair value (loss)/gain on deferred consideration
Loss on disposal of fixed assets
Impairment losses
Share of joint venture profit/(loss)
Finance (cost)/income – net
LOSS BEFORE INCOME TAX
Income tax benefit
LOSS
EARNINGS PER SHARE FOR PROFIT ATTRIBUTABLE TO THE ORDINARY EQUITY
HOLDERS OF THE COMPANY:
NOTES
4
5
4
15
6
21
10
8
9
GROUP
2015
$’000
GROUP
2014
$’000
51,289
55,525
(43,908)
(56,795)
7,381
(1,270)
244
172
(7,543)
(2,546)
(12,318)
(11,103)
(615)
169,396
(1,160)
(10)
(1,171)
(449,984)
36
(254)
(1,260)
11,365
(16,406)
(284,234)
–
95,331
(16,406)
(188,903)
CENTS
CENTS
Basic earnings per share
Diluted earnings per share
25
25
(1.73)
(1.73)
(23.07)
(23.07)
The above income statement should be read in conjunction with the accompanying notes.
24
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
Consolidated statement of
comprehensive income
For the year ended 30 June 2015
Loss
OTHER COMPREHENSIVE EXPENSE, NET OF TAX
Items that may be reclassified to profit or loss
GROUP
2015
$’000
GROUP
2014
$’000
(16,406)
(188,903)
Exchange differences on translation
58
(198)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR, NET OF TAX
(16,348)
(189,101)
Total comprehensive loss attributable to the Owners of Bathurst Resources Limited
(16,348)
(189,101)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
25
FINANCIAL STATEMENTS
Consolidated balance sheet
As at 30 June 2015
ASSETS
Current assets
Cash and short term deposits
Trade and other receivables
Inventories
Income tax receivable
Other financial assets current
TOTAL CURRENT ASSETS
Non-current assets
Property, plant and equipment
Mining licences, properties, exploration and evaluation assets
Other financial assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Borrowings – current
Deferred consideration current
Provisions – current
TOTAL CURRENT LIABILITIES
Non-current liabilities
Trade and other payables
Borrowings
Deferred consideration
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
NOTES
GROUP
2015
$’000
GROUP
2014
$’000
11
12
13
14
15
16
14
19
20
21
22
19
20
21
22
23
24
5,235
4,114
1,279
–
20
8,855
4,343
1,283
97
132
10,648
14,710
17,152
22,498
147
39,797
50,445
5,572
8,549
1,730
627
23,386
16,166
7,562
47,114
61,824
7,964
7,340
917
259
16,478
16,480
430
461
10,883
3,274
15,048
31,526
18,919
–
6,241
1,974
2,870
11,085
27,565
34,259
247,378
(30,872)
247,338
(31,725)
(197,587)
(181,354)
18,919
34,259
The above balance sheet should be read in conjunction with the accompanying notes.
The directors of Bathurst Resources Limited authorised these financial statements for issue on behalf of the Board.
TOKO KAPEA
Chairman
25 September 2015
RUSSELL MIDDLETON
Director
25 September 2015
26
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
Consolidated statement of
changes in equity
For the year ended 30 June 2015
CONTRIBUTED
EQUITY
$’000
NOTES
SHARE BASED
PAYMENT
RESERVE
$’000
FOREIGN
EXCHANGE
TRANSLATION
RESERVE
$’000
RETAINED
EARNINGS
$’000
RE-
ORGANISATION
RESERVE
$’000
TOTAL
EQUITY
$’000
GROUP
BALANCE AT 1 JULY 2013
219,623
13,942
–
(301)
(32,760)
200,504
Total comprehensive
income
Transactions with owners in
their capacity as owners:
Contributions of equity, net of
transaction costs
Share based payments
expense
Gain from reversal of share
based payments expense
Transfer of share based
payments reserve with exercise
of options
Exercise of options
Lapsing of options
–
23
23,327
–
–
–
–
881
(3,672)
2,068
(2,068)
2,320
–
–
(7,850)
27,715
(12,709)
(198)
(188,903)
–
(189,101)
–
–
–
–
–
–
–
–
–
–
–
–
7,850
7,850
–
–
–
–
–
–
–
23,327
881
(3,672)
–
2,320
–
22,856
BALANCE AT 30 JUNE 2014
247,338
1,233
(198)
(181,354)
(32,760)
34,259
BALANCE AT 1 JULY 2014
247,338
1,233
(198)
(181,354)
(32,760)
34,259
Total comprehensive
income
Transactions with owners in
their capacity as owners:
Contributions of equity, net of
transaction costs
Share based payments
expense
Conversion of performance
rights
–
23
40
–
–
40
BALANCE AT 30 JUNE 2015
247,378
–
–
968
(173)
795
2,028
58
(16,406)
–
–
–
–
–
–
173
173
–
–
–
–
–
(16,348)
40
968
–
1,008
(140)
(197,587)
(32,760)
18,919
The above statement of changes in equity should be read in conjunction with the accompanying notes.
27
FINANCIAL STATEMENTS
Consolidated statement of cash flows
For the year ended 30 June 2015
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and other finance costs paid
NOTES
GROUP
2015
$’000
GROUP
2014
$’000
50,284
52,565
(48,721)
(68,927)
161
(748)
479
(834)
NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
27
976
(16,717)
Cash flows from investing activities
Payments for exploration & consenting expenditure
Payments for mining assets (including elevated stripping)
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Deposits received from/(paid to) financial institutions
NET CASH (OUTFLOW) FROM INVESTING ACTIVITIES
Cash flows from financing activities
Proceeds from the issue of shares
Repayment of borrowings
Payments for share issue costs
NET CASH (OUTFLOW)/INFLOW FROM FINANCING ACTIVITIES
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on cash and cash equivalents
(344)
(4,966)
(3,366)
(3,052)
(1,135)
(4,014)
3,361
–
520
(2,062)
(964)
(14,094)
140
28,505
(3,139)
(1,244)
(99)
(3,527)
(3,098)
23,734
(3,086)
(7,077)
5,565
12,526
(14)
116
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
11
2,465
5,565
The above statement of cash flows should be read in conjunction with the accompanying notes.
28
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
Notes to the financial statements
For the year ended 30 June 2015
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
A. GENERAL INFORMATION
Bathurst Resources Limited (‘Company’ or ‘Parent’ is a
company domiciled in New Zealand, registered under the
C. MEASUREMENT BASIS
These financial statements have been prepared under the
historical cost convention, except certain financial assets and
liabilities (including derivative instruments) measured at fair
value through profit or loss.
Companies Act 1993 and is listed on the Australian Securities
D. USE OF ESTIMATES AND JUDGEMENTS
Exchange (‘ASX’). Bathurst Resources Limited is an FMC
Reporting Entity under Part 7 of the Financial Markets Conduct
Act 2013. These financial statements have been prepared in
accordance with the requirements of Part 7 of the Financial
Markets Conduct Act 2013 and ASX listing rules.
In accordance with the Financial Markets Conduct Act 2013
because group financial statements are prepared and presented
for Bathurst Resources Limited and its subsidiaries, separate
financial statements for Bathurst Resources Limited are no
longer required to be presented.
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
These financial statements have been approved for issue by the
within the next financial year are discussed below.
Board of Directors on 25 September 2015.
i. Impairment
The financial statements presented herewith as at and for
The future recoverability of the assets recorded by the Group is
the year ended 30 June 2015 comprise the Company,
dependent upon a number of factors, including whether the
its subsidiaries and jointly controlled entities (together referred
Group decides to exploit its mine property itself or, if not,
to as the ‘Group’).
whether it successfully recovers the related asset through sale.
The Group is principally engaged in the exploration,
Factors that could impact future recoverability include the level
development and production of coal.
of reserves and resources, future technological changes, costs
B. BASIS OF PREPARATION
Statement of compliance
These financial statements of the group have been prepared
in accordance with Generally Accepted Accounting Practice
in New Zealand (NZ GAAP). The group is a for-profit entity for
the purposes of complying with NZGAAP. The consolidated
financial statements comply with New Zealand equivalents to
International Financial Reporting Standards (NZ IFRS), other
New Zealand accounting standards and authoritative notices
that are applicable to entities that apply NZ IFRS. The
of drilling and production, production rates, future legal
changes, and changes to commodity prices and foreign
exchange rates.
ii. Valuation of deferred consideration
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.
consolidated financial statements also comply with International
The carrying amount of deferred consideration is set out in
Financial Reporting Standards (IFRS).
Note 21.
These financial statements are presented in New Zealand
dollars, which is the Company’s functional and presentation
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.
iii. Reserves & Resources
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 prices of commodities, exchange rates, production
costs or recovery rates may change the economic status and
29
may, ultimately, result in the reserves being restated.
the ability of the tax entities to satisfy certain tests at the
Such changes in reserves could impact on depreciation and
time the losses are recouped. There is an inherent uncertainty
amortisation rates, asset carrying values and provisions
in applying these judgements and a possibility that changes
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(p)). 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.
in legislation will impact upon the carrying amount of deferred
tax assets and deferred tax liabilities recognised on the
balance sheet.
E. PRINCIPLES OF CONSOLIDATION
Subsidiaries
Subsidiaries are all entities over which the group has control.
The group controls an entity when the group is exposed to,
or has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from
Changes in the estimates and assumptions used could have
the date on which control is transferred to the group. They are
a material impact on the carrying value of the rehabilitation
deconsolidated from the date that control ceases.
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 group applies the acquisition method to account for
business combinations. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets
The carrying amount of the rehabilitation provision is set out
transferred, the liabilities incurred to the former owners of the
in Note 22.
v. Waste in advance
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 16.
vi. Taxation
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
acquiree and the equity interests issued by the group. The
consideration transferred includes the fair value of any asset or
liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. The group
recognises any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest’s proportionate share of the recognised
amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
Contingent consideration (deferred consideration) to be
transferred by the group is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the
contingent consideration that is deemed to be a financial asset
or financial liability is recognised in accordance with NZ IAS 39
in profit or loss as ‘fair value (loss)/gain on deferred
consideration’.
issues, based on whether taxation will be due and payable.
The excess of the consideration transferred, the amount of any
Where the taxation outcome of such matters is different from
non-controlling interest in the acquiree and the acquisition-date
the amount initially recorded, such difference will impact the
fair value of any previous equity interest in the acquiree over the
current and deferred tax position in the period in which the
fair value of the identifiable net assets acquired is recorded as
assessment is made.
Certain deferred tax assets for deductible temporary differences
and carried forward taxation losses have not been recognised.
In not 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
goodwill. If the total of consideration transferred, non-controlling
interest recognised and previously held interest measured is less
than the fair value of the net assets of the subsidiary acquired in
the case of a bargain purchase, the difference is recognised
directly in the income statement
30
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2 Inter-company transactions, balances and unrealised gains
•
income and expenses for each income statement and
on transactions between group companies are eliminated.
statement of comprehensive income are translated at monthly
Unrealised losses are also eliminated.
average exchange rates (unless this is not a reasonable
Joint arrangements
The group applies NZ IFRS 11 to all joint arrangements. Under
NZ IFRS 11 investments in joint arrangements are classified as
either joint operations or joint ventures depending on the
contractual rights and obligations of each investor. Bathurst
Resources Limited has assessed the nature of its joint
arrangements and determined them to be joint ventures. Joint
ventures are accounted for using the equity method.
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.
G. REVENUE RECOGNITION
Revenue is recognised and measured at the fair value of the
consideration received or receivable to the extent it is probable
Under the equity method of accounting, interests in joint
that the economic benefits will flow to the Group and the
ventures are initially recognised at cost and adjusted thereafter
revenue can be reliably measured. The following specific
to recognise the group’s share of the post-acquisition profits or
recognition criteria must also be met before revenue is
losses and movements in other comprehensive income. When
recognised:
the group’s share of losses in a joint venture equals or exceeds
its interests in the joint venture (which includes any long term
interests that, in substance, form part of the group’s net
investment in the joint venture), the group does not recognise
further losses, except to the extent that the group has an
obligation or has made payments on behalf of the investee.
F. FOREIGN CURRENCY TRANSLATION
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 or processing is
required, the quantity and quality of the goods has been
determined, the price is fixed and when title has passed.
i. Functional and presentation currency
ii. Freight income
Items included in the financial statements of each of the Group’s
Revenue from freight services is recognised in the accounting
entities are measured using the currency of the primary
period in which the services are provided. Revenue is not
economic environment in which the entity operates (‘the
recognised until the service has been completed.
functional currency’). The consolidated financial statements are
presented in New Zealand dollars, which is Bathurst Resources
Limited’s functional and presentation currency.
ii. Transactions and balances
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
Foreign currency transactions are translated into the functional
income over the relevant period using the effective interest rate,
currency using the exchange rates prevailing at the dates of the
which is the rate that exactly discounts estimated future cash
transactions. Foreign exchange gains and losses resulting from
receipts through the expected life of the financial asset to the
the settlement of such transactions and from the translation at
net carrying amount of the financial asset.
year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or
H. INCOME TAX
loss, except when they are deferred in equity as qualifying cash
The income tax expense or benefit for the period is the tax
flow hedges and qualifying net investment hedges or are
payable on the current period’s taxable income based on the
attributable to part of the net investment in a foreign operation.
applicable income tax rate for each jurisdiction adjusted by
iii. Group companies
The results and financial position of foreign operations (none of
changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
which has the currency of a hyperinflationary economy) that have
The current income tax charge is calculated on the basis
a functional currency different from the presentation currency
of the tax laws enacted or substantively enacted at the end of
are translated into the presentation currency as follows:
the reporting period in the countries where the company’s
• assets and liabilities for each balance sheet presented
subsidiaries and associates operate and generate taxable
are translated at the closing rate at the date of that
income. Management periodically evaluates positions taken
balance sheet;
in tax returns with respect to situations in which applicable tax
31
regulation is subject to interpretation. It establishes provisions
of weighted average costs. Costs of purchased inventory are
where appropriate on the basis of amounts expected to be paid
determined after deducting rebates and discounts. Net
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
realisable value is the estimated selling price in the ordinary
course of business less the estimated costs necessary to make
the sale.
J. FINANCIAL INSTRUMENTS
i. Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other
receivables, cash and cash equivalents, loans and borrowings
and other payables.
at the time of the transaction affects neither accounting or
Non-derivative financial instruments are recognised initially at
taxable profit or loss. Deferred income tax is determined using
fair value plus, for instruments not at fair value through the
tax rates (and laws) that have been enacted or substantially
income statement, transaction costs. Subsequent to initial
enacted by the end of the reporting period and are expected to
recognition non-derivative financial instruments are measured
apply when the related deferred income tax asset is realised or
as described below.
the deferred income tax liability is settled.
A financial instrument is recognised if the Group become party
Deferred tax assets are recognised for deductible temporary
to the contractual provisions of the instrument. Financial assets
differences and unused tax losses only if it is probable that
are derecognised if the Group’s contractual rights to the cash
future taxable amounts will be available to utilise those
flows from the financial asset expire or if the Group transfers the
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
financial asset to another party without retaining control of
substantially all risks and rewards of the asset. Financial
liabilities are derecognised if the Group’s obligations specified in
the contract expire or are discharged or are cancelled.
is able to control the timing of the reversal of the temporary
Financial assets carried at amortised cost
differences and it is probable that the differences will not
Loans and receivables are non-derivative financial assets with
reverse in the foreseeable future.
fixed or determinable payments that are not quoted in an active
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
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.
taxation authority. Current tax assets and tax liabilities are offset
Management determines the classification of its investments at
where the entity has a legally enforceable right to offset and
initial recognition.
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.
I. INVENTORIES
Loans and receivables are subsequently carried at amortised
cost using the effective interest rate method.
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
Raw materials and stores, work in progress and finished goods
above, net of outstanding bank overdrafts.
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. Costs are assigned to inventory on the basis
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
32
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2 within 30 days. They are presented as current assets unless
K. IMPAIRMENT
collection is not expected for more than 12 months after the
reporting date.
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.
Deferred Consideration
The fair value of deferred consideration payments is determined
at acquisition date. Subsequent changes to the fair value of the
deferred consideration are recognised through the income
statement. The portion of the fair value adjustment due to the
time value of money (unwinding of discount) is recognised as a
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.
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
impairment are reviewed for possible reversal of the impairment
finance cost. For further information on deferred consideration
at the end of each reporting period.
refer to Note 21.
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 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.
ii. Derivative financial instruments
From time to time the Group may use derivative financial
instruments to hedge its exposure to commodity risks and
foreign exchange risks arising from operational and financing
activities. Derivatives that do not qualify for hedge accounting
are accounted for as trading instruments.
Impairment of 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.
Impairment of exploration and evaluation assets
Exploration and evaluation assets are tested for impairment
when either the period of the exploration right has expired or
will expire in the near future, substantive expenditure on
further exploration for and evaluation in the specific area is
neither budgeted or planned, exploration for and evaluation in
the specific area have not led to the discovery of commercially
viable quantities and the Group has decided to discontinue
such activities in the area or there is sufficient data to indicate
that the carrying amount of the exploration and evaluation asset
is unlikely to be recovered in full from successful development
or sale.
33
Goodwill and intangible assets
M. EXPLORATION AND EVALUATION EXPENDITURE
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
Other assets are tested for impairment whenever events or
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
changes in circumstances indicate that the carrying amount may
expenditure is expensed as incurred.
not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its
recoverable amount.
L. PROPERTY, PLANT AND EQUIPMENT
All property, plant and equipment are measured at cost less
depreciation and accumulated impairment losses. Cost includes
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
expenditure that is directly attributable to the acquisition of
to the area are continuing.
the asset.
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 expenditure will flow to the Group. 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.
Depreciation is recognised in profit or loss on a diminishing
value basis over the estimated useful lives of each item of plant,
property and equipment. Leasehold improvements and certain
leased plant and equipment are depreciated over the shorter of
the lease term and their useful lives.
The estimated useful lives for significant items of property, plant
and equipment are as follows:
• Buildings
• Mine infrastructure
• Plant & machinery
• Plant & machinery leased
25 years
3 – 8 years
2 – 25 years
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(k)).
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.
N. 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.
Subsequent costs are included in the assets carrying amount
or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the
asset will flow to the Group and the cost of the item can be
Any gain or loss on disposals of an item of property, plant and
measured reliably.
equipment (calculated as the difference between the net
proceeds from disposal and the carrying amount of the item)
is recognised in the profit or loss.
34
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
O. WASTE IN ADVANCE
Waste removed in advance costs incurred in the development of
a mine are capitalised as parts of the costs of constructing the
mine and subsequently amortised over life of the relevant area
of interest or life of mine if appropriate (herein referred to as
‘life of 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 the
cost of constructing the mine.
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. Costs above the life of ore
component strip ratio are deferred to waste removed in
advance. The stripping activity asset is amortised on a units of
production basis. 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.
P. 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.
Q. SHARE-BASED PAYMENTS
Share-based compensation benefits are provided to employees
via the Bathurst Resources Limited Long Term Incentive Plan
and Employee Share Option Plan.
The fair value of performance rights and options granted under
the Bathurst Resources Limited Long Term Incentive Plan and
Employee Share Option Plan is recognised as an employee
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-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in profit or
loss, with a corresponding adjustment to equity.
R. 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. The corresponding rental obligations,
net of finance charges, are included in other short term and long
term payables.
35
Capitalised leased assets are depreciated over the shorter of
• the weighted average number of additional ordinary shares
the estimated useful life of the asset and the lease term if there
that would have been outstanding assuming the conversion
is no reasonable certainty that the Group will obtain ownership
of all dilutive potential ordinary shares.
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.
V. SEGMENT REPORTING
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
S. GOODS AND SERVICES TAX
of Directors.
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.
T. CONTRIBUTED EQUITY
W. NEW ACCOUNTING STANDARDS AND
INTERPRETATIONS NOT YET EFFECTIVE
Certain new standards, amendments and interpretations to
existing standards have been issued that are not yet mandatory
for accounting periods beginning on or after 1 July 2014.
The company has not early adopted:
i. NZ IFRS 9, Financial Instruments, revised NZ IFRS 9
(2014): Financial Instruments and revised NZ IFRS 9
(2013): Financial Instruments.
Effective for periods beginning on or after 1 January 2018.
The standard adds requirements related to the classification,
measurement and derecognition of financial assets and
liabilities.
ii. NZ IFRS 15, Revenue from contracts with customers
Effective for periods beginning on or after 1 January 2017.
Ordinary shares are classified as equity. Issued and paid up
The standard introduces principles for reporting cohesive and
capital is recognised at the fair value of the consideration
useful information to users of financial statements about the
received by the company. Any transaction costs arising on
nature, amount, timing, and uncertainty of revenue and cash
the issue of ordinary shares are recognised directly in equity
flows arising from an entity’s contracts with customers.
as a reduction of the share proceeds received.
U. EARNINGS PER SHARE
i. Basic earnings per share
The Group has not analysed the new standards, amendments or
interpretations but does not expect there to be a significant
impact on its consolidated financial statements.
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
X. STANDARDS AND INTERPRETATIONS ADOPTED
DURING THE YEAR
The financial information presented for the year ended 30 June
2015 has been prepared on the basis of accounting policies and
methods of computation consistent with those applied in the
30 June 2014 financial statements contained within the Annual
Report of Bathurst Resources Limited except for the adoption of
Diluted earnings per share adjusts the figures used in the
NZ IFRIC 21 ‘Levies’ which confirms that a liability to pay a levy
determination of basic earnings per share to take into account:
is only recognised when the activity that triggers the payment
• the after income tax effect of interest and other financing
occurs. The adoption of IFRIC 21 did not have a material impact
costs associated with dilutive potential ordinary shares, and
on the Group.
36
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2 2. GOING CONCERN
its assets and discharge its liabilities in the normal course
In the current financial year the Group has produced a loss of
of business.
$16.4 million however it achieved a net cash inflow from
It should be noted that a major commercial domestic sales
operating activities of $1 million. The Directors have continued
contract expires in 2016. The company has advanced its
to adopt the going concern assumption in the preparation of the
planning for when this contract expires.
financial statements. This is based on the existing cash on
hand, funding facilities available and budgeted trading activity
for the 2016 financial year.
The budget for the 2016 financial year is based on a number of
key assumptions as follows:
• sales into the domestic market only;
• assumes no improvement in the global export coal price;
• no significant operations at the Escarpment mine until such
time as the export margin achieved makes the project
economically viable;
• current working capital facilities remain available (but
undrawn) under normal commercial arrangements;
• all contracted obligations are adhered to;
• overheads and administration costs are incurred in line
with budget;
• all existing lines of financing remain.
The budget does not incorporate a range of austerity measures
that could be implemented to reduce the cash spend if
necessary. This includes further reduction in head office
staffing, complete halt to exploration activity and a deferral of
future consenting costs.
The Directors have considered potential uncertainties and risk
mitigations in respect of the 2016 budget and these are
summarised below:
• geo-technical issues at one of the mining operations –
mitigated through continued geo-technical reviews and best
practice mine planning; further mitigation achieved by
operating the Escarpment mine simultaneously with the
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.
Assets and Liabilities have been presented net of
intercompany balances.
During the period, the company undertook a rationalisation of
the corporate structure and a number of group entities were
amalgamated into a single legal entity to achieve operational
efficiencies. Whilst this has not impacted the determination of
operating segments within the business, there has been a
change in the nature of information provided to the chief
operating decision makers.
Cascade mine.
Revenue is no longer presented on a segmented basis, instead
• sales into the domestic market are less than budget – this is
it is presented as a sales function across the Group. Total
mitigated by including only contracted customers with no
revenue for the year ended 30 June 2015 totalled $51.3m
modelled growth assumption.
(2014: $55.5m).
• events outside management’s control, such as the associated
cost of Health and Safety regulations – allowance has been
provided for in the 2016 budget with significant work already
underway.
Total assets and total liabilities are reported on a group basis
and are not provided internally on a segmented basis. Total
assets and liabilities as at 30 June 2015 total $50.4m
(30 June 2014: $61.8m) and $31.5m (30 June 2014: $27.6m)
The Directors believe that based on the information available
respectively.
at the date of these financial statements, including the above
assumptions and risks, there is a reasonable basis for
continuing to adopt the going concern assumption. However,
should specific assumptions not be realised there may be a
material uncertainty relating to Group’s ability to continue as a
going concern. In this event the entity may be unable to realise
Two Bathurst customers met the reporting threshold of
10 percent of Bathurst’s operating revenue in the year to
30 June 2015.
37
SEGMENT INFORMATION PROVIDED TO THE BOARD
The segment information provided to the Board for the reportable segments is as follows:
GROUP – 30 JUNE 2015
LOSS BEFORE TAX
Loss before tax includes:
Impairment losses
Depreciation and amortisation
GROUP – 30 JUNE 2014
Sales revenue
Interest revenue
Other income
TOTAL SEGMENT REVENUE
Inter segment revenue
BULLER
COAL
$’000
EASTERN
COAL
$’000
CORPORATE
$’000
TOTAL
$’000
(2,327)
(3,625)
(10,454)
(16,406)
(1,246)
218
(3,059)
(11,528)
(143)
(81)
(1,171)
(14,668)
BULLER
COAL
$’000
EASTERN
COAL
$’000
CORPORATE
$’000
TOTAL
$’000
22,649
35,491
–
58,140
437
(25)
(74)
197
127
–
490
172
23,061
35,614
127
58,802
(2,615)
–
–
–
REVENUE FROM EXTERNAL CUSTOMERS
20,446
35,614
127
56,187
Total revenue per the income statement
LOSS BEFORE TAX
(276,994)
(6,197)
(1,043)
(284,234)
56,187
Loss before tax includes:
Impairment losses
Depreciation and amortisation
(449,984)
–
–
(449,984)
(6,983)
(6,963)
(67)
(14,013)
TOTAL SEGMENT ASSETS AS AT 30 JUNE 2014
18,828
36,194
6,802
61,824
TOTAL SEGMENT LIABILITIES AS AT 30 JUNE 2014
15,059
9,115
3,390
27,565
38
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
4. REVENUE
Coal sales
Freight
SALES REVENUE
Other income
TOTAL REVENUE
5. COST OF SALES
Raw materials, mining costs, and consumables used
Freight costs
Mine labour costs
Amortisation expenses
Changes in inventories of finished goods and work in progress
TOTAL COST OF SALES
6. OTHER EXPENSES
CLASSIFICATION OF OTHER EXPENSES BY NATURE:
Audit fees
Director fees
Legal fees
Consultants
Employee benefit expense
Rent
Business development costs
Share based payments expense
Gain from reversal of share based payments expense
Other
TOTAL OTHER EXPENSES
GROUP
2015
$’000
GROUP
2014
$’000
36,652
42,191
14,637
13,334
51,289
55,525
244
172
51,533
55,697
GROUP
2015
$’000
GROUP
2014
$’000
15,635
28,259
13,047
11,230
7,842
7,125
259
5,044
11,466
796
43,908
56,795
GROUP
2015
$’000
172
254
483
1,128
5,440
439
59
968
–
GROUP
2014
$’000
334
501
128
1,477
6,693
389
137
881
(3,672)
3,375
4,235
12,318
11,103
39
7. REMUNERATION OF AUDITORS
During the period, the following fees were paid or payable for services provided by the auditor of the parent entity:
Audit and review of financial statements
Tax and compliance services by auditors
TOTAL REMUNERATION FOR AUDITORS
8. FINANCE (COSTS)/INCOME
Interest income
Deferred consideration: foreign exchange gain
TOTAL FINANCE INCOME
Interest expense
Foreign exchange loss
Provisions: unwinding of discount
Deferred consideration: unwinding of discount
TOTAL FINANCE COSTS
FINANCE (COST)/INCOME – NET
GROUP
2015
$’000
170
2
172
GROUP
2015
$’000
196
–
196
(950)
(50)
(262)
(194)
GROUP
2014
$’000
334
147
481
GROUP
2014
$’000
490
21,258
21,748
(815)
(278)
(167)
(9,123)
(1,456)
(10,383)
(1,260)
11,365
NOTES
21
22
21
40
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
9. INCOME TAX BENEFIT
(a) Income tax benefit
Current tax
Deferred tax
INCOME TAX BENEFIT
(b) Numerical reconciliation of income tax benefit to prima facie tax payable
Loss before income tax
Tax at the standard New Zealand rate of 28%
Tax effect of amounts that are not deductible/(assessable) in calculating taxable income:
Share based payment expense
Fair value gain on deferred consideration
Deferred consideration: foreign exchange gain
Deferred consideration: unwinding of discount
Tax losses not recognised
Deferred tax not recognised*
Previous recognised losses unrecognised
Impairment losses recognised
Prior period adjustments
Sundry items
INCOME TAX BENEFIT
* Further information relating to deferred tax is set out in Note 18.
IMPUTATION CREDITS
New Zealand imputation credit account
CLOSING BALANCE
GROUP
2015
$’000
GROUP
2014
$’000
–
–
–
–
(95,331)
(95,331)
(16,406)
(284,234)
(4,594)
(79,586)
271
244
–
(781)
(47,415)
2,539
(17)
(5,952)
1,728
7,090
2,596
22,536
–
8,316
(304)
14,640
–
76
–
(2,214)
(14,504)
(95,331)
GROUP
2015
$’000
GROUP
2014
$’000
1,061
1,072
41
10. IMPAIRMENT LOSSES
Impairment of exploration and evaluation assets
Impairment of mining assets
Impairment of plant, property and equipment
Reversal of impairment
Impairment of other financial assets
TOTAL IMPAIRMENT LOSSES
NOTES
16
16
GROUP
2015
$’000
GROUP
2014
$’000
287
8,825
2,622
414,427
853
26,867
(6,015)
3,424
(135)
–
1,171
449,984
Management has assessed the cash generating units for the Group as follows:
• Eastern Coal, as the coal yard cannot generate its own cash flows independent of the mine. Eastern Coal includes Canterbury
Coal, Takitimu mine and the Timaru coal yard.
• Buller Coal Project, as there is a large amount of shared infrastructure between the proposed mines, necessary blending of the pit
products at the same site, and the similar geographical location of the pits.
• Cascade mine, as the mine has established domestic markets which allow a profitable operation without relying on the
infrastructure to be built for the Buller Coal Project.
Management have prepared detailed impairment models for each of the above cash generating units to determine the recoverable
amount which is the higher of the value in use or fair value less cost to sell. The model is a discounted cash flow based on the Board
approved operating plans for each CGU.
EASTERN COAL
The recoverable amount of the Eastern Coal CGU future cash flows has been assessed as higher than the carrying value therefore
no impairment has been recorded as at 30 June 2015.
BULLER COAL PROJECT
The Buller Coal Project is subject to movements in the international coking coal market. Coking coal prices have experienced a
reduction in recent years which has impacted on the potential value of the Buller Coal Project. The Buller Coal Project was fully
impaired in the year ended 30 June 2014 and remains fully impaired with the exception of one block of land (see below) at
30 June 2015 with further deterioration in the global price of coking coal.
$6m impairment previously recognised was reversed during the year. This primarily relates to land, buildings and other minor plant
and equipment which has been disposed of. The disposal of land occurred subsequent to the year end and is discussed further in
Note 31.
42
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
CASCADE MINE
Cascade mine has recorded a partial impairment in the year ended 30 June 2015, due to a major commercial sales contract expiring
in 2016 which impacts upon production forecasts. The partial impairment results in the mine assets being held at fair value (fair value
hierarchy level 3).
ASSUMPTIONS
The sales price per tonne used in the valuation models has been based on current contractual arrangements. Production levels have
been based on the Board approved operating plan which, for Cascade, sees production wind down in the last quarter of 2016. As the
majority of all production is matched to contracted sales, the sensitivity of pricing movements for non-contracted volumes is immaterial.
The discount rate is required to reflect the time value of money as well as the asset risk profile. The model assumes a post-tax rate
of 11.19% (2014: 11:07%). The recoverable value has been determined using discounted cash flows under the fair value less costs
to sell methodology.
11. CASH AND SHORT TERM DEPOSITS
Cash at bank and on hand
Cash and cash equivalents
Short term deposits*
TOTAL CASH AND SHORT TERM DEPOSITS
GROUP
2015
$’000
2,465
2,465
2,770
5,235
GROUP
2014
$’000
5,565
5,565
3,290
8,855
* Short term deposits include restricted term deposits held with ANZ and Westpac in relation to security held against performance bonds.
12. TRADE AND OTHER RECEIVABLES
Trade receivables
Less: provision for impairment of receivables
Loans to key management personnel*
Interest receivable
Prepayments
Other receivables**
TOTAL TRADE AND OTHER RECEIVABLES
GROUP
2015
$’000
4,667
(785)
GROUP
2014
$’000
2,816
–
3,882
2,816
–
27
93
112
4,114
510
356
78
583
4,343
* Further information relating to loans to key management personnel is set out in Note 29.
** Other receivables in 2014 included a receivable from Mr Bohannan relating to the exercise of 5,000,000 options in October 2013.
43
13. INVENTORIES
Raw materials and stores
Finished goods*
Other
TOTAL INVENTORIES
* Finished goods are recorded at the lower of cost and net realisable value as per Note 1(i).
14. OTHER FINANCIAL ASSETS
Current
Advances to third parties
Other
Non-current
Security bonds and deposits
Advances to third parties
Other
TOTAL FINANCIAL ASSETS
GROUP
2015
$’000
332
824
123
GROUP
2014
$’000
425
773
85
1,279
1,283
GROUP
2015
$’000
GROUP
2014
$’000
20
–
20
147
–
–
82
50
132
2,182
3,826
1,554
167
7,694
Security bonds and deposits have been provided to third parties in relation to rental properties and mine/permit access
arrangements.
44
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
15. PROPERTY, PLANT AND EQUIPMENT
FREEHOLD
LAND
$’000
BUILDINGS
$’000
MINE INFRA-
STRUCTURE
$’000
PLANT &
MACHINERY
$’000
FURNITURE,
FITTINGS
AND
EQUIPMENT
$’000
OTHER
$’000
WORK IN
PROGRESS
$’000
TOTAL
$’000
GROUP – 30 JUNE 2015
Opening cost
22,528
6,478
3,561
14,330
2,060
508
11,435
60,900
Additions
Disposals
327
(4,447)
165
–
–
–
310
(6)
105
–
50
–
288
(178)
1,245
(4,631)
CLOSING COST
18,408
6,643
3,561
14,634
2,165
558
11,545
57,514
Opening
accumulated
depreciation
Depreciation
Impairment
Disposals
CLOSING
ACCUMULATED
DEPRECIATION
CLOSING NET
BOOK VALUE
(10,553)
(5,660)
(931)
(7,377)
(1,424)
(231)
(11,338)
(37,514)
(4,800)
5,048
–
(73)
(18)
–
(44)
(75)
–
(2,423)
(361)
(5)
(163)
(10)
–
(40)
(62)
–
(7,543)
4,700
(5)
178
–
(10,305)
(5,751)
(1,050)
(10,166)
(1,597)
(333)
(11,160)
(40,362)
8,103
892
2,511
4,468
568
225
385
17,152
GROUP – 30 JUNE 2014
Opening cost
16,745
6,477
3,423
13,670
1,969
575
10,188
53,046
Additions
Disposals
5,783
–
2
–
138
–
716
(55)
105
(14)
65
3,915
10,723
(131)
(2,668)
(2,869)
CLOSING COST
22,528
6,478
3,561
14,330
2,060
508
11,435
60,900
Opening
accumulated
depreciation
(759)
(257)
(647)
(5,345)
(830)
(293)
–
(8,131)
Depreciation
(80)
(69)
(284)
(1,551)
(624)
Impairment
(9,714)
(5,334)
Disposals
–
–
–
–
(481)
–
–
30
62
–
–
–
(2,546)
(11,338)
(26,867)
–
30
CLOSING
ACCUMULATED
DEPRECIATION
CLOSING NET
BOOK VALUE
(10,553)
(5,660)
(931)
(7,377)
(1,424)
(231)
(11,338)
(37,514)
11,975
818
2,630
6,953
636
277
97
23,386
45
16. MINING LICENCES, PROPERTIES, EXPLORATION, AND EVALUATION ASSETS
EXPLORATION AND EVALUATION ASSETS
Opening balance
Expenditure capitalised
Written off exploration and evaluation assets
Impairment recognised
Transfer to mining licences and property assets
TOTAL EXPLORATION AND EVALUATION ASSETS
MINING LICENCES AND PROPERTY ASSETS
Opening balance
Expenditure capitalised
Amortisation
Abandonment provision movement
Waste moved in advance capitalised
Impairment recognised
Transfer from exploration and evaluation assets
TOTAL MINING LICENCES AND PROPERTY ASSETS
TOTAL MINING LICENCES, PROPERTY, EXPLORATION AND EVALUATION ASSETS
GROUP
2015
$’000
GROUP
2014
$’000
589
348
–
31,377
3,521
(21)
(287)
(8,825)
–
(25,463)
650
589
15,577
393,636
13,941
6,091
(7,125)
(9,064)
594
1,483
194
13,684
(2,622)
(414,427)
–
25,463
21,848
15,577
22,498
16,166
46
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
17. INVESTMENT IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries.
NAME OF ENTITY
BR Coal Pty Limited
Bathurst New Zealand Limited
Bathurst Coal Holdings Limited1
Buller Coal Limited
Bathurst Coal Limited2
Cascade Coal Limited
Sommervilles Land Holdings Limited
Canterbury Coal Limited
Cascade East Limited
Takitimu Coal Limited
Rochfort Coal Limited
Eastern Coal Supplies Limited
New Brighton Collieries Limited
COUNTRY OF
INCORPORATION
CLASS OF
SHARES
EQUITY
HOLDING
2015
%
EQUITY
HOLDING
2014
%
Australia
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
100
–
–
–
–
–
–
–
100
100
100
100
100
100
100
100
100
100
100
100
100
–
1 During the period, Bathurst Coal Limited changed its name to Bathurst Coal Holdings Limited
2 During the period Eastern Coal Limited changed its name to Bathurst Coal Limited and amalgamated with Cascade Coal limited,
Sommervilles Land Holdings Limited, Canterbury Coal Limited, Cascade East Limited, Takitimu Coal Limited, Rochfort Coal Limited and
Eastern Coal Supplies Limited.
All subsidiary companies have a balance date of 30 June, are predominantly involved in the coal industry and have a functional currency
of New Zealand dollars with the exception of BR Coal Pty Ltd. BR Coal Pty Ltd has a functional currency of Australian dollars.
During the period, the company acquired 100% of the ordinary shares in New Brighton Collieries Limited.
47
18. DEFERRED TAX ASSET/(LIABILITIES)
The balance comprises temporary differences attributable to:
Tax losses
Employee benefits
Provisions
Mining licences
Exploration and evaluation expenditure
Property, plant and equipment
TOTAL DEFERRED TAX ASSETS
Waste moved in advance
TOTAL DEFERRED TAX LIABILITIES
GROUP
2015
$’000
GROUP
2014
$’000
15,791
15,406
244
1,311
200
1,156
16,195
15,545
1,614
7,442
1,630
7,288
42,597
41,225
(1,654)
(3,283)
(1,654)
(3,283)
Net deferred tax asset not recognised
(40,943)
(37,942)
NET DEFERRED TAX ASSET/(LIABILITY)
–
–
Movement
Opening balance
Deferred tax benefit
NET DEFERRED TAX ASSET/(LIABILITY)
GROUP
2015
$’000
GROUP
2014
$’000
–
–
–
(95,331)
95,331
–
The Group has not recognised a net deferred tax asset of $40.9m (2014: $37.9m) on the basis that it is not probable these losses
will be utilised in the foreseeable future.
48
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
19. TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Accruals
Employee benefit payable
Other payables
NON-CURRENT
Other payables
TOTAL TRADE AND OTHER PAYABLES
20. BORROWINGS
CURRENT
Secured
Bank loans
Property loans
Lease liabilities
NON-CURRENT
Secured
Bank loans
Property loans
Lease liabilities
GROUP
2015
$’000
2,597
1,580
1,070
325
5,572
430
6,002
GROUP
2014
$’000
3,827
2,987
857
293
7,964
–
7,964
GROUP
2015
$’000
GROUP
2014
$’000
2,471
5,865
213
8,549
363
–
98
461
5,771
1,290
279
7,340
484
5,625
132
6,241
TOTAL BORROWINGS
9,010
13,581
Included above is a finance facility with Westpac New Zealand Limited for the acquisition of a new mining fleet. The total amount
available and drawn on that facility as at 30 June 2015 was $2 million (2014:$3 million). The current term of the facility is five years
which is reviewed annually by Westpac New Zealand Limited and may be terminated at any time.
The facility is a fixed rate, New Zealand dollar denominated loan which is carried at amortised cost. The facility does not impact on
the entity’s exposure to foreign exchange and interest rate risk.
The Group also has with Westpac New Zealand Limited a term loan of $0.7 million (2014:$1.1 million), finance lease facilities
$0.3 million (2014:$0.2 million), and bank overdraft facilities which were unused at 30 June 2015 and 2014. These facilities
have various covenants in place. A portion of finance leases and bank loans with Westpac New Zealand Limited have been classified
as non-current.
49
A. SECURITY
The bank loans are secured by an all obligations General Security Agreement given by Bathurst Coal Limited under which the
company 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 company’s assets. In addition to this, the bank has a registered first and exclusive
mortgage over the property and coal handling facility at Timaru.
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.
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
B. FAIR VALUE
The carrying value of borrowings has been assessed as the fair value.
C. FINANCE LEASES LIABILITIES
Finance lease liabilities are payable as follows.
GROUP
2015
$’000
GROUP
2014
$’000
54
72
1,215
1,341
3,674
3,348
1,283
8,305
1,133
1,097
426
132
9,941
21,352
11,500
22,581
12,841
30,886
FUTURE
MINIMUM
LEASE
PAYMENTS
2015
$’000
INTEREST
2015
$’000
PRESENT
VALUE OF
MINIMUM
LEASE
PAYMENTS
2015
$’000
FUTURE
MINIMUM
LEASE
PAYMENTS
2014
$’000
PRESENT
VALUE OF
MINIMUM
LEASE
PAYMENTS
2014
$’000
INTEREST
2014
$’000
231
112
–
343
18
14
–
32
213
98
–
311
310
141
–
451
31
9
–
40
279
132
–
411
GROUP
Less than one year
Between one and five years
More than five years
50
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
21. DEFERRED CONSIDERATION
Current
Acquisition of subsidiary deferred consideration
1,730
917
GROUP
2015
$’000
GROUP
2014
$’000
Non-current
Acquisition of subsidiary deferred consideration
TOTAL DEFERRED CONSIDERATION
Movement
Opening balance
Unwinding of discount
Foreign exchange (gain)/loss
Fair value adjustment to deferred consideration
Addition upon acquisition of Canterbury Coal Limited
Addition upon acquisition of New Brighton Collieries Limited
Consideration paid during the period
CLOSING BALANCE
10,883
12,613
1,974
2,891
2,891
183,856
194
9,123
–
(21,258)
615
(169,396)
–
566
9,103
(190)
–
–
12,613
2,891
A. DETAILS ON DEFERRED CONSIDERATION – BULLER COAL PROJECT
Model inputs
The fair value of the future royalty payments is estimated using a discount rate, as deferred consideration is payable in US$ for export
sales, the discount rate is comprised of the 10 year US Government Bond rate plus a risk premium – 1% for performance payments
and 4.5% for royalties. The Board approved production profile is applied and consensus coal prices used. Any royalties payable in
USD for export sales are then converted to NZD using the latest spot rate. Royalties for sales made in NZD are payable in NZD.
Unwinding of discount
The unwinding of discount adjustment relates to the fair value impact on the deferred consideration calculation of the time value
of money.
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$40,000,000 (performance payments), the first being payable
upon 25,000 tonnes of coal being shipped from the Buller Coal Project and the second payable upon 1 million tonnes of coal being
shipped from the Buller Coal Project.
The potential undiscounted amount of all future cash payments that the Group could be required to make under these arrangements
is between US$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.
Bathurst has the option to defer the cash payment of the performance payments. If the performance payments are deferred by
Bathurst a higher royalty rate is payable by Bathurst on coal sold from the respective permit areas, until such time the performance
payments are made. The option to pay a higher royalty rate has been assumed.
51
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.
Foreign exchange
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 28 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 being achieved 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 construction coal being mined has triggered the performance payments and royalties are now being paid, as such a component
of deferred consideration is classified as current at 30 June 2015.
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 Coal Limited’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.
B. DETAILS ON DEFERRED CONSIDERATION – CANTERBURY COAL LIMITED
The acquisition of Canterbury Coal Limited in November 2013 contained a royalty agreement. The amounts that are payable in the
future under this royalty agreement are required, to be recognised as part of the consideration paid for Canterbury Coal Limited. The
fair value of the future royalty payments is estimated using a discount rate based upon the latest New Zealand 10 year government
bond rate, production profile, and forecasted domestic coal prices.
C. DETAILS ON DEFERRED CONSIDERATION – NEW BRIGHTON COLLIERIES LIMITED
On 10 March 2015, the company announced that it had completed the acquisition of New Brighton Collieries Limited under
amended terms. The acquisition was initially announced on 28 February 2012 with the principal asset of New Brighton Collieries
Limited being coal exploration permit 40625. Under the amended terms the balance due on settlement is to be satisfied by an
ongoing royalty based on mine gate sales revenue. The fair value of the future royalty payments is estimated using a discount rate
based upon the latest New Zealand 10 year government bond rate, projected production profile, and forecast domestic coal prices.
A 1% increase or decrease in the discount rate used would decrease or increase the deferred consideration balance by $0.5m and
$0.6m, respectively.
Security
Pursuant to a deed of guarantee and security the deferred consideration is secured by way of a first-ranking security interest in all
of New Brighton Collieries Limited’s present and future assets (and present and future rights, title and interest in any assets).
Deferred consideration liabilities have been categorised as level 3 under the fair value hierarchy.
52
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2 22. PROVISIONS
Current
Rehabilitation
Restructuring provision
Non-current
Rehabilitation
TOTAL PROVISIONS
Rehabilitation provision movement
Opening balance
Change recognised in the mining and property asset
Change due to passage of time (unwinding of discount)
Other changes recognised in the income statement
CLOSING BALANCE
Rehabilitation provision
GROUP
2015
$’000
GROUP
2014
$’000
247
380
627
3,274
3,901
3,129
594
262
(464)
3,521
259
–
259
2,870
3,129
2,784
194
167
(16)
3,129
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.
Restructuring provision
Provision has been made for planned changes to the company’s management structure. A detailed formal plan is in place and an
announcement has been made to those affected.
23. CONTRIBUTED EQUITY
Ordinary fully paid shares
Movement
Opening balance
Issue of shares*
Exercise of options and conversion of performance rights**
CLOSING BALANCE
GROUP
2015
NUMBER OF
SHARES
000S
GROUP
2014
NUMBER OF
SHARES
000S
947,828
944,932
947,828
944,932
944,932
699,248
2,146
232,397
750
13,287
947,828
944,932
* In July 2014 the Company completed a non-renounceable rights issue resulting in the issue of 2,146,913 shares. The rights issue followed a
share placement to institutional, sophisticated and professional investors, in April 2014.
** Further information is set out in Note 26.
53
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the
number of shares held. Every ordinary share is entitled to one vote.
24. RESERVES
Share based payment reserve
Foreign exchange translation reserve
Re-organisation reserve
TOTAL RESERVES
NATURE AND PURPOSE OF RESERVES
Share based payment reserve
GROUP
2015
$’000
2,028
(140)
GROUP
2014
$’000
1,233
(198)
(32,760)
(32,760)
(30,872)
(31,725)
The share based payment reserve is used to recognise the fair value of performance rights issued.
Foreign exchange translation reserve
Exchange differences arising on translation of companies within the Group with a different functional currency to New Zealand
dollars are taken to the foreign currency translation reserve. The reserve is recognised in the income statement when the investment
is disposed of.
Reorganisation reserve
Bathurst Resources 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 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.
54
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2 25. EARNINGS PER SHARE
(a) Basic earnings per share
GROUP
2015
CENTS
GROUP
2014
CENTS
Total basic earnings per share attributable to the ordinary equity holders of the company
(1.73)
(23.07)
(b) Diluted earnings per share
Total diluted earnings per share attributable to the ordinary equity holders of the company
(1.73)
(23.07)
(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
$’000
$’000
(16,406)
(188,903)
(16,406)
(188,903)
NUMBER OF
SHARES
000S
NUMBER OF
SHARES
000S
(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
947,657
818,913
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
154
12,222
947,812
831,135
26. SHARE-BASED PAYMENTS
A. EMPLOYEE SHARE OPTION PLAN
The Bathurst Resources Limited Employee Share Option Plan (“ESOP”) was approved by shareholders at the 2010 AGM. The
ESOP was 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 to that growth.
Under the plan, participants were 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 was at the Board’s discretion.
A number of senior executives were granted units in the Bathurst Resources Limited Employee Share Option Plan. The remaining
options were forfeited in August and December 2014.
55
OPTIONS (ESOP)
GRANT DATE
EXPIRY DATE
26-Aug-12
1-Sep-12
20-Dec-12
29-Aug-14
29-Aug-14
19-Dec-14
Weighted average exercise price (cents)
EXERCISE
PRICE
AUD CENTS
38.0
38.0
38.0
OUTSTANDING
AT THE
BEGINNING
OF THE
PERIOD
000S
1,000
1,000
2,000
4,000
AUD38.00
GRANTED
DURING THE
PERIOD
000S
FORFEITED
DURING THE
PERIOD
000S
EXERCIS-
ABLE AT THE
END OF THE
PERIOD
000S
–
–
–
–
–
(1,000)
(1,000)
(2,000)
(4,000)
AUD 38.00
–
–
–
–
* share options were issued with an Australian dollar exercise price.
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.
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 converts into
one fully paid ordinary share.
Share based payments are recognised based on the fair value of Performance Share Rights (‘PSRs’) offered to eligible participants
at the grant date.
The fair value at issue date is determined using the following methodology; the price path of Bathurst shares is modelled using the
Monte Carlo simulation, the total number of Bathurst PSRs that will vest to participants is calculated then the payoff to participants is
calculated and discounted back to present value today.
The assessed fair value (for NZ IFRS 2 purposes) at issue date of share options issued during the year ended 30 June 2013 is
summarised in the table below. No performance rights were granted in 2014 or 2015.
56
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
Performance Rights (LTIP)
GRANT DATE
VESTING DATE
8-Feb-13
27-Mar-13
31-Mar-13
13-Jun-13
22-Nov-13
29-Nov-13
3-Dec-13
5-Dec-13
30-Jun-15
30-Jun-15
30-Jun-15
30-Jun-15
30-Jun-16
30-Jun-16
30-Jun-16
30-Jun-16
No options were granted during the period.
OUTSTANDING
AT THE BE-
GINNING OF
THE PERIOD
000S
FORFEITED
DURING THE
PERIOD
000S
EXERCISED
DURING THE
PERIOD
000S
OUTSTANDING
AT THE END
OF THE
PERIOD
000S
EXERCIS-
ABLE AT THE
END OF THE
PERIOD
000S
294
309
367
1,389
692
1,846
1,200
1,662
(235)
–
(294)
(926)
(692)
(1,846)
(1,200)
(1,662)
(59)
(155)
(73)
(463)
–
–
–
–
–
154
–
154
–
–
–
–
–
–
–
–
–
–
–
–
7,759
(6,855)
(750)
154
154
27. RECONCILIATION OF LOSS BEFORE INCOME TAX TO NET CASH FLOW FROM
OPERATING ACTIVITIES
Loss before taxation
Depreciation and amortisation expense
Loss on disposal of property, plant and equipment
Share based payments expense
Gain from reversal of share based payments expense
Fair value adjustment to deferred consideration
Foreign exchange (gain) on deferred consideration
Impairment losses
Unwinding of discount
Waste moved in advance capitalised
Unwinding of rehabilitation asset
Other non-cash items
Change in working capital assets
CASH FLOW FROM OPERATING ACTIVITIES
GROUP
2015
$’000
GROUP
2014
$’000
(16,406)
(284,234)
14,668
13,776
1,160
968
–
–
881
(3,672)
615
(169,396)
–
(21,258)
1,171
449,984
194
9,123
(1,483)
(13,684)
262
164
(337)
167
685
911
976
(16,717)
57
28. FINANCIAL RISK MANAGEMENT
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.
A. MARKET RISK
i. Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency
that is not New Zealand dollars. The risk is measured using sensitivity analysis and cash flow forecasting.
Once the Group commences export sales, it becomes exposed to foreign exchange movements, this primarily relates to deferred
consideration which is denominated in USD for export coal sales of coal sourced from the permits acquired from L&M Coal Holdings
Limited.
The Group had no exposure to foreign currency risk at the end of the reporting period.
B. CREDIT RISK
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The
Group has adopted a policy of only dealing with credit worthy counterparties and obtaining sufficient collateral where appropriate as a
means of minimising the risk of financial defaults.
Financial instruments which potentially subject the Group to credit risk consist primarily of cash and cash equivalents as well as credit
exposures to our customers, including outstanding receivables.
The credit risk on liquid funds is limited because the counterparties are banks with credit ratings of AA-, with funds required to be
invested with a range of separate counterparties.
The Group’s maximum exposure to credit risk for trade and other receivables is its carrying value.
C. LIQUIDITY RISK
Liquidity risk represents the Group’s ability to meet its contractual obligations. The Group evaluates its liquidity requirements on an
ongoing basis.
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.
58
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2 Contractual maturities of the Group’s non-derivative financial liabilities were as follows:
LESS THAN 6
MONTHS
$’000
6 – 12
MONTHS
$’000
BETWEEN 1
AND 2 YEARS
$’000
BETWEEN 2
AND 5 YEARS
$’000
OVER 5
YEARS
$’000
TOTAL CON-
TRACTUAL
CASH FLOWS
$’000
CARRYING
VALUE
$’000
GROUP –
30 JUNE 2015
Trade and other payables
Borrowings (excl finance
leases)
Finance leases
Deferred consideration
5,429
6,927
182
969
143
713
49
761
TOTAL
13,507
1,666
143
1,375
105
1,518
3,141
287
109
7
4,722
5,125
–
–
–
6,002
9,124
6,002
8,699
343
311
10,461
18,431
12,613
10,461
33,900
27,625
GROUP –
30 JUNE 2014
Trade and other payables
Borrowings (excl finance
leases)
Finance leases
Deferred consideration
7,964
6,808
176
–
–
–
835
6,302
134
917
141
2,377
TOTAL
14,948
1,886
8,820
At 30 June 2015 the Group had no derivatives to settle (2014: nil).
D. CAPITAL MANAGEMENT
–
–
–
–
–
–
–
–
–
–
7,964
7,964
13,945
13,170
451
411
3,294
2,891
25,654
24,436
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.
E. FAIR VALUE MEASUREMENTS
The fair value of assets and liabilities must be estimated for recognition and measurement or for disclosure purposes.
Fair value measurements by level of the following fair value measurement hierarchy:
• 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
•
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
The Group’s only financial asset or liability measured at a fair value hierarchy of level 3 is deferred consideration. This is discussed
further in Note 21.
59
F. FINANCIAL INSTRUMENTS BY CATEGORY
FINANCIAL ASSETS
Loans and receivables
Cash and short term deposits
Trade and other receivables
Other financial assets
TOTAL
FINANCIAL LIABILITIES
Amortised cost
Trade and other payables
Borrowings
Fair value
Deferred consideration
TOTAL
GROUP
2015
$’000
GROUP
2014
$’000
5,235
4,021
167
8,855
4,343
7,694
9,423
20,892
6,002
9,010
7,964
13,581
12,613
2,891
27,625
24,436
29. RELATED PARTY TRANSACTIONS
A. PARENT ENTITY
The parent entity within the Group is Bathurst Resources Limited.
B. SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the subsidiaries listed in Note 17.
60
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
C. KEY MANAGEMENT PERSONNEL
Key personnel are all the management and directors (executive and non-executive) of the Group.
Key management personnel compensation
Key management personnel compensation for the years ended 30 June 2015 is set out below
GROUP – 30 JUNE 2015
Management
Directors
TOTAL
GROUP – 30 JUNE 2014
Management
Directors
TOTAL
SHORT TERM
BENEFITS
$000’S
SHARE BASED
PAYMENTS
$000’S
TERMINATION
BENEFITS
$000’S
1,696
259
1,955
303
–
303
1,485
–
1,485
SHORT TERM
BENEFITS
$000’S
SHARE BASED
PAYMENTS
$000’S
POST–
EMPLOYMENT
BENEFITS
$000’S
2,890
501
3,391
748
–
748
4
–
4
TOTAL
$000’S
3,484
259
3,743
TOTAL
$000’S
3,642
501
4,143
Other transactions or loans with 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.
Aggregates of loans to key management personnel
Opening Balance
Interest charged
Loan (settled)/advanced
CLOSING BALANCE
Individuals with loans above $100,000 at the end of the period
H Bohannan
TOTAL
GROUP
2015
$’000
GROUP
2014
$’000
510
20
(530)
–
–
–
451
–
59
510
510
510
Mr Bohannan resigned from the company on 24th March 2015. Loans and other receivables due from Mr Bohannan were settled via
termination arrangements.
The Group entered into a joint venture in August 2013 with Johnson Bros Transport to operate a coal yard in Rolleston. These
financial statements include coal sales to the joint venture totalling $2.1m (2014: $2.5m).
61
30. COMMITMENTS AND CONTINGENT LIABILITIES
A. CAPITAL COMMITMENTS
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:
Within one year
Later than one year but not later than five years
Later than five years
Property, plant and equipment
Within one year
Later than one year but not later than five years
Later than five years
Mining licences and properties
TOTAL CAPITAL COMMITMENTS
B. LEASE COMMITMENTS
i. Non-cancellable operating leases
GROUP
2015
$’000
–
–
–
–
–
–
–
–
–
GROUP
2014
$’000
410
–
–
410
4,328
3,059
–
7,387
7,797
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.
Lease commitments
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
TOTAL LEASE COMMITMENTS
GROUP
2015
$’000
GROUP
2014
$’000
240
263
–
503
316
333
–
649
During the year ended 30 June 2015 $0.2m (2014: $0.4m) was recognised as an expense in the income statement in respect of
operating leases.
62
Notes to the financial statements continued For the year ended 30 June 2015BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2
ii. Finance leases
The Group leases various plant and equipment expiring within one to four years.
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
FINANCE LEASE 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
GROUP
2015
$’000
GROUP
2014
$’000
234
109
–
343
(32)
311
213
98
–
310
141
–
451
(40)
411
279
132
–
MINIMUM LEASE PAYMENTS
311
411
C. EXPLORATION EXPENDITURE COMMITMENTS
In order to maintain the various permits in which the Group is involved the Group has ongoing operational expenditure as part of its
normal operations. The actual costs will be dependent on a number of factors including final scope and timing of operations.
D. CONTINGENT ASSETS AND LIABILITIES
As at 30 June 2015 the Group had no contingent assets or liabilities (2014: nil).
31. EVENTS OCCURRING AFTER THE REPORTING PERIOD
Subsequent to the period end, a parcel of land was disposed for $5.375m. The asset was disposed with proceeds used in
settlement of a loan held over the original purchase totalling $5.375m. The loan is included within current borrowings in these
financial statements.
There are no other material events that occurred subsequent to reporting date, that require recognition of, or additional disclosure in
these financial statements.
63
Independent Auditors’ Report
to the shareholders of Bathurst Resources Limited
Report on the Financial Statements
We have audited the Group financial statements of Bathurst Resources Limited (“the Company”)
on pages 24 to 63, which comprise the balance sheet as at 30 June 2015, the income statement,
statement of changes in equity and statement of cash flows for the year then ended, and the notes
to the financial statements that include a summary of significant accounting policies and other
explanatory information for the Group. The Group comprises the Company and the entities it
controlled at 30 June 2015 or from time to time during the financial year.
Directors’ Responsibility for the Financial Statements
The Directors are responsible for the preparation and fair presentation of these financial
statements in accordance with New Zealand Equivalents to International Financial Reporting
Standards and International Financial Reporting Standards 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’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 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 are independent of the Group. Other than in our capacity as auditors and providers of other
related assurance services we have no relationship with, or interests in, the Group.
64
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 2 Independent Auditors’ Report
to the shareholders of Bathurst Resources Limited
Opinion
In our opinion, the financial statements on pages 24 to 63, present fairly, in all material respects,
the financial position of the Group as at 30 June 2015, and its financial performance and cash
flows for the year then ended in accordance with New Zealand Equivalents to International
Financial Reporting Standards and International Financial Reporting Standards.
Emphasis of matter
Without modifying our opinion, we draw attention to Note 2 in the financial statements which
states that there are uncertainties in achieving the future cash flow forecasts. This indicates the
existence of a material uncertainty that may cast significant doubt about the Group’s ability to
continue as a going concern.
Restriction on Use of our Report
This report is made solely to the Company’s shareholders, as a body, in accordance with the
Companies Act 1993. Our audit work has been undertaken so that we might state 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
25 September 2015
Wellington
65
66
BATHURST RESOURCES LIMITED ANNUAL REPORT 2015 / SECTION 1 Section
03
Shareholder
information
67
Shareholder information
The shareholder information set out below was applicable as at 25 September 2015.
A Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
HOLDING
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
TOTAL
TOTAL HOLDERS
ORDINARY SHARES
335
671
517
1,935
869
59,900
1,790,171
3,440,082
61,596,002
888,096,600
4,327
954,982,755
On 25 September 2015 there were 2,776 holders of less than a marketable parcel of ordinary shares as determined by the
ASX (under A$500 in value).
B Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
ORDINARY SHARES
NAME
HSBC Custody Nominees (Australia) Limited
Bell Potter Nominees Limited
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