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Trean Insurance GroupPOSITIONED
FOR SUCCESS
Annual Report 2015
Contents
01 Highlights 2015
03 Chairman’s Letter
05 Interim Chief Executive Officer’s Report
07 Resources and Additional Exploration Targets
12 Operations Review
18 Financial Report
Our Company
Tigers Realm Coal Limited
Tigers Realm Coal Limited (Tigers Realm Coal, TIG, or the
Company) is an ASX-listed coking coal company.
The Company is developing two coking coal projects, Amaam
and Amaam North in the Chukotka Autonomous Okrug (District)
of far eastern Russia, both within 35km of port access and close
to targeted North Asian steel markets.
TIG is aiming to become a significant participant in the seaborne
coking coal market through the development of its projects.
The Company is focused on exploration and development to
operation of its coking coal deposits. TIG is committed to creating
long term sustainable benefits for the communities and regions in
which it operates.
The Company’s corporate office is located in Melbourne with
key management personnel based in its Moscow office.
Our Values
Four core values underpin everything we do:
• Respect – treating our people, communities and stakeholders
with respect and understanding.
• Care – for our people and the environment. An overriding
commitment to ensuring our people finish work each day
without suffering injury or harm. Minimising our impact on the
environment.
• Integrity – being honest and open in the way we communicate
and work. Doing what we say we will do.
• Delivery – Empowering our people to excel. Consistently
delivering on our plans and goals.
ABN 50 146 732 561
Highlights 2015
+ Combined Coal Resources at the Amaam and
Amaam North deposits increased by 18% to
632Mt following successful drilling campaigns.
+ Resources at Project F, the initial development
project at Amaam North, increased by 53.6% to
110.6Mt and contain an Initial Reserve of 9.2Mt.
+ Successful and safe operation of the Company-
owned Beringovsky Port and Coal Terminal,
with 88,976 tonnes of coal trans-shipped in
2015 and 6,286 tonnes of other cargo handled
through the port.
+ Project F coke strength test work confirms
Project F coal to be a semi-hard coking coal
similar to several well-known Queensland
coking coals and well suited to common coke
feed blends used in North Asian steel mills.
+ Signing of a non-binding term sheet for
RUB 1.5 million (approximately US$21 million)
with Fond Vostok for construction of the site
access and haulage road.
+ Early stage development works commenced
at Project F site.
+ Approval received from the Main State Expertise
+ Corporate overhead reduction and all key
and the State Ecological Expertise for the
overall design documentation of an open
pit mine at Project F.
management personnel centred in Moscow.
+ No bank debt.
Tigers Realm Coal Annual Report 2015
01
“The Company remains in a strong position
as it carries no significant debt and is hence
positively differentiated from many competitor
mining companies within its peer group. It
is well positioned to respond to early market
signals, which will announce the inevitable
return of a better balanced market.”
02
Amaam North site accommodation
Tigers Realm Coal Annual Report 2015 Chairman’s
Letter
Craig Wiggill
Non-Executive Chairman
Dear Shareholders,
I am pleased to be writing to you as Chairman,
having being appointed to the role effective from
October 1, 2015 as part of a broad corporate
restructuring of the Company. The objective
of this restructuring was to enable us to meet
the very significant market and resource sector
challenges that prevail today, as well as to focus
our management effort in Moscow from which
the development of the Chukotka projects is
now being managed.
On behalf of the Board I would like to thank Tony Manini, who
elected to step down as Chairman and Director after having
provided both competent and valued leadership since the
inception of the Company. I thank also Craig Parry, who stepped
down as Chief Executive Officer after a successful three-year
tenure. During this period the Company completed the Feasibility
Study and secured the mining licence for Project F, acquired the
Beringovsky Coal Terminal Port and delivered the first component
of the mining fleet to support a start-up operation at Project F.
Peter Balka, formerly Chief Operating Officer, was appointed to
the role of interim Chief Executive Officer based in Moscow with
other key management personnel including Denis Kurochkin, the
Chief Financial Officer, who has also assumed the role of General
Director of the Russian entities.
In line with the significant downturn in most commodity
markets, 2015 proved another difficult year for coking coal with
benchmark prices down some 30% over the course of the
year. As a result of this weakness there has been a significant
deterioration in long term coking coal price forecasts. As a result
the Company recognised a A$160.41 million non-cash write-
down of the carrying value of its Amaam and Amaam North
projects with the release of the 2015 full-year results in March
2016. Notwithstanding this write-down, the Company remains
in a strong position as it carries no significant debt and is hence
positively differentiated from many competitor mining companies
within its peer group. It is well positioned to respond to early
market signals, which will announce the inevitable return of
a better balanced market.
The Company’s restructuring and project development
achievements during 2015 have been underpinned by the
commitment of the management team and principal shareholders
to the achievement of the Company’s long term goals. Core
elements to the strategy have been to ensure both the protection
of the exploration and mining licence tenures as well as to build
the core competencies within the team, firstly achieve coal
production from Project F within the Amaam North property and,
thereafter, the full development of the mining operations utilising
the significant coal resources identified at both Amaam and
Amaam North to service the raw material requirements of the
metallurgical industry in Asia.
Our near term Company strategy is to bring together the
elements of financing for Project F in a fashion and timing that
meets both market demand and economic sustainability. I am
pleased to report we continue to enjoy strong support from the
Chukotka Government for our projects, providing assistance in
our interaction with the Federal Government and its agencies,
and supporting our community engagement activities.
On behalf of the Board, I would like to extend my sincere thanks
to all of our employees for their ongoing dedication and hard work
in driving us towards our long term objectives. I also thank our
shareholders, partners and stakeholders for their ongoing support
through this challenging period in the market sector.
I look forward to keeping you informed of our further progress
during the course of 2016.
Craig Wiggill
Non-Executive Chairman
03
Tigers Realm Coal Annual Report 2015
The 110.6Mt Project F Resource, increased
following drilling in 2015, is expected to
increase mine life and capacity to add
significant value to Project F, the starter
operation on the licences.
04
Arinay Lagoon
Tigers Realm Coal Annual Report 2015 Interim Chief Executive
Officer’s Report
Peter Balka
Interim Chief Executive Officer
I am pleased to report that we continued to
make progress in the development of our Amaam
projects in 2015. We achieved a number of
milestones that are essential in our transition
from explorer and developer to producer.
Our focus in 2015, and ongoing in 2016, was to advance the
low capital and operating cost Project F mine development at
Amaam North to production. In addition to the pursuit of project
finance, key operating, licencing and permitting requirements
were also achieved. We were successful in signing a non-binding
term sheet for RUB 1.5 million (approximately US$21 million)
with Fond Vostok for construction of the site access and haulage
road. Discussions with other potential financiers for the remaining
project finance progressed through the year, but at this stage the
funds have not been secured.
Operationally, activities are focused on updating the 2014
Project F Feasibility Study, targeted exploration to increase
and improve confidence in Resources at Project F and Amaam,
continued marketing of our product coals and the safe and
efficient operation of Port Ugolny at Beringovsky, which we
acquired in 2014. The Company also implemented a number
of cost reduction measures, including reductions in corporate
personnel numbers, contractors and contractor rates.
Key achievements in 2015 include:
• Combined Coal Resources at the Amaam and Amaam North
deposits increased by 18% to 632Mt following successful
winter and summer drilling campaigns. Resources at Project F,
the initial development project at Amaam North, increased by
53.6% to 110.6Mt, and contain an initial Reserve of 9.2Mt.
• Successful and safe operation of the Company-owned
Beringovsky Port and Coal Terminal. In 2015, 88,976 tonnes of
coal was trans-shipped and 6,286 tonnes of other cargo was
handled through the port.
• Approval was received from the Main State Expertise
(Glavgosexpertiza) and the State Ecological Expertise
(Rosprirodnadzor) for the overall design documentation of
an open pit mine at Project F. In conjunction with the mining
licence received in 2014, these and other granted minor
approvals allow mining to commence.
• Completion of two rounds of Project F coke strength test work,
which confirmed Project F coal to be a semi-hard coking coal,
which is similar to several well-known Queensland coking coals
and well suited to common coke feed blends used in North
Asian steel mills.
• Early stage development works commenced at Project F site.
The Project F Feasibility Study completed in 2014 proved it to be
an attractive investment opportunity. The increase in Resources
from 27Mt at the time of the Feasibility Study (November 2014)
to 110Mt currently as a result of incorporating the Project F
extension areas to the north and west, will enable us to update
the Study in 2016. It is anticipated that the larger Resource base
will result in Project F having a production rate greater than 1Mtpa
and/or a longer mine life, with reduced steady state operating
costs compared to the 2014 Feasibility Study. This will ensure
Project F has good potential in the current market environment as
it will be one of the most cost-efficient mines on the international
sea-borne market.
Complementary to Project F and Amaam North is Amaam, our
large scale coking coal deposit with Total Resources of 521Mt,
located 40km from Amaam North and 30km from the deep water
port site proposed at Arinay Lagoon. Amaam is an important
medium to long term value driver for us as an operation in its
own right, and as part of an integrated Amaam-Amaam North
operation connected via a road or railway line.
Work at Amaam is currently focused on licence compliance
and review of the geological model. There is scope for the already
large resource at Amaam to be increased further following drilling
down dip of recently mapped coal seams.
05
Tigers Realm Coal Annual Report 2015 Interim Chief Executive
Officer’s Report continued
For 2016 our goals include:
• acquisition of funding for Project F;
• cost effective management of our current operations;
• completing the update and optimisation to the Project F
Feasibility Study;
• progressing marketing to support funding for production from
Project F;
• continuing mine detailed engineering and permitting to support
mine development; and
• completion of H1 2016 Project F drilling for customer coking
coal samples and expansion of the Project F mining licence.
I look forward to keeping you up to date on our progress as each
milestone is achieved.
In conclusion, Tigers Realm Coal continued to make progress
in 2015 in spite of challenging conditions faced in financial and
coal markets. As we progress through 2016 the Company will
continue to advance the development of Project F with the
aim, subject to the securing of project finance, of commencing
development and production in 2017.
I would like to thank our employees for an outstanding effort
during a year of many challenges.
I also thank our shareholders for their continued support.
Peter Balka
Interim Chief Executive Officer
06
Entry to Arinay Lagoon
Tigers Realm Coal Annual Report 2015 Resources and Additional Exploration Targets
Amaam Resource Estimate
Totals below may not sum due to rounding.
Measured ResourcesC for the Amaam Project (100% Basis)
Area
Area 3
Area 2
Total (rounded)
Indicated ResourcesB for the Amaam Project (100% Basis)
Area
Area 2
Area 3
Area 4
Total (rounded)
Inferred ResourcesA for the Amaam Project (100% Basis)
Area
Area 2
Area 3
Area 4
Cretaceous
Total (rounded)
Total Resources for the Amaam Project (100% Basis)
Area
Area 2
Area 3
Area 4
Cretaceous
Total (rounded)
Open Pit 1 (Mt)
1.1
Underground2 (Mt)
-
2
3.1
-
0.0
Total (Mt)
1.1
2
3.1
Open Pit 1 (Mt)
7
Underground 2 (Mt)
-
Total (Mt)
7
47
35
89
0.7
0.8
2
48
36
91
Open Pit1 (Mt)
2
Underground2 (Mt)
-
Total (Mt)
2
127
204
4
337
14
70
7
91
141
274
11
428
Open Pit1 (Mt)
11
Underground2 (Mt)
-
Total (Mt)
11
175
239
4
425
15
71
7
93
190
310
11
521
1. Assumes coal seams greater than 0.3m to a depth of 400m for Areas 2 – 4. Assumes coal seams greater than 0.3m to a depth of 75m for Cretaceous (refer to page 16).
2. Assumes coal seams greater than 1.2m deeper than 400m and up to 800m for Areas 2 – 4. Assumes coal seams greater than 1.2m and deeper than 75m for Cretaceous.
Coal Quality by Area (Air Dried Basis)
Mt
Relative density g/cm3
Air dried moisture %
Ash %
Volatile matter %
Fixed carbon %
Sulphur %
Calorific value kcal/kg
Area 2
11
1.61
1.0
32.2
22.7
39.2
0.9
5,098
Area 3
190
1.60
1.0
32.6
23.0
42.1
0.9
5,362
Area 4EC
310
1.63
1.2
34.5
23.6
37.1
0.8
4,946
Total
510
1.62
1.7
33.7
23.3
39.0
0.83
5,102
07
Tigers Realm Coal Annual Report 2015 Resources and Additional Exploration Targets continued
Coal Quality by Depth – Areas 2, 3 and 4 (Air Dried Basis)
Depth
0 – 100m
100 – 200m
200 – 300m
300 – 400m
Tonnage Mt
108
109
111
98
RD Ad
1.61
1.60
1.61
1.63
Moisture
% Ad
1.0
1.1
1.1
1.1
Coal Quality by Depth – Cretaceous (Air Dried Basis)
Depth
0 – 75m
75 – 800m
Tonnage Mt
4
7
RD Ad
1.62
1.61
Moisture
% Ad
1.1
1.0
Ash
% Ad
33.3
32.6
33.0
34.3
Ash
% Ad
30.3
29.6
VM
% Ad
22.8
23.3
23.7
23.2
VM
% Ad
24.6
24.0
FC
% Ad
38.8
39.4
39.3
38.5
FC
% Ad
44.0
45.4
TS
% Ad
0.84
0.92
0.89
0.86
CV
Kcal/kg,
Ad
5,047
5,146
5,168
5,053
TS
% Ad
0.34
1.98
CV
Kcal/kg,
Ad
5,658
5,702
Amaam North Resource Estimate
Totals below may not sum due to rounding.
Coal Resources for the Amaam North – Project F (100% Basis)
Resource Category
Measured C – coking
Indicated B – coking
Inferred A – coking
Indicated B – thermal
Inferred A – thermal
Total (Mt)
By Depth
Surface to 50m
50m to 100m
100m to 150m
Greater than 150m
Total
Open Pit1 (Mt)
22.0
Underground2 (Mt)
0
Total (Mt)
22
46.3
14.0
3.7
1.3
87.3
5.7
17.6
0
0
52.0
31.6
3.7
1.3
23.3
110.6
Coking Open Pit1 (Mt)
12.3
Thermal Open Pit1 (Mt)
5.0
Coking Underground 2 (Mt)
0
Total (Mt)
17.3
16.1
13.2
40.6
82.2
0
0
0
5.0
0.6
1.6
21.2
23.4
16.7
14.8
61.8
110.6
Coal Quality4 (Air Dried Basis)
Open pit1
Underground 2
Total
Tonnage
(Mt)
87.3
23.3
110.6
Relative
Density
1.45
1.42
1.44
Ash
(%)
17.5
14.5
16.9
Inherent
Moisture
(%)
1.18
1.11
1.16
Volatile
Matter
(%)
26.6
26.7
26.6
Fixed
Carbon
(%)
54.7
57.7
55.3
Gross
Calorific
Value
(kcal/kg)
6,700
7,020
6770
Total
Sulphur
(%)
0.28
0.27
0.28
08
Tigers Realm Coal Annual Report 2015
Coal Quality by Ply4 (Air Dried Basis)
Ply
5
422
421
41
401
402
35
34
33
32
31
22
21
12
11
WS43
Total
Mt
2.2
4.7
10.1
31.7
0.2
1.6
6.9
2.9
2.1
3.8
3.2
3.5
5.3
6.5
2.6
23.3
110.6
ISD g/cm3
1.47
ADM %
1.8
1.42
1.41
1.42
1.55
1.37
1.49
1.49
1.52
1.47
1.49
1.46
1.53
1.48
1.56
1.42
1.44
1.1
1.3
1.3
1.5
1.3
1.0
1.1
1.1
1.1
1.0
1.0
1.0
1.0
1.0
1.1
1.2
Ash
19.4
15.6
13.8
13.9
28.8
10.2
22.0
24.2
23.7
19.1
22.3
18.7
23.6
20.6
27.9
14.5
17.0
VM %
27.5
FC %
51.4
S % CV kcal/kg
6,400
0.56
27.2
27.6
27.4
23.2
29.1
26.0
25.8
26.2
27.1
25.7
26.6
24.7
24.5
22.5
26.7
26.6
56.2
57.4
57.5
46.6
59.5
50.9
48.9
47.5
52.8
51.0
53.7
50.7
54.0
48.7
57.7
55.2
0.71
0.29
0.25
0.24
0.19
0.25
0.25
0.27
0.23
0.22
0.26
0.26
0.27
0.25
0.27
0.28
6,965
7,048
7,007
5,635
7,445
6,306
6,097
5,966
6,587
6,283
6,615
6,129
6,455
5,774
7,020
6,765
1. Assumes coal seams greater than 0.3m to a depth of 150m.
2. Assumes coal seams greater than 1.2m and deeper than 150m.
3. Underground working section on Seam 4.
4. All averages are subject to rounding of base data.
Amaam North Reserve Estimate
Amaam North run-of-mine (ROM) Coal ReservesE total 9.2Mt, of which 5.6Mt are Proven and 3.6Mt are Probable. Marketable (Product)
Coal Reserves total 6.7Mt.
Amaam North ROM Coal ReservesE
JORC Classification
Proven reserves
Probable reserves
ROM total
Amaam North Product Coal ReservesE
JORC Classification
Proven reserves
Probable reserves
Product total
ROM Coking Coal
5.6
ROM Thermal Coal
-
ROM Total
5.6
1.7
7.3
1.9
1.9
3.6
9.2
Product Coking Coal Product Thermal Coal
-
3.8
Product Total
3.8
1.0
4.8
1.9
1.9
2.9
6.7
09
Tigers Realm Coal Annual Report 2015 Resources and Additional Exploration Targets continued
Amaam and Amaam North Exploration Targets
The tables below outline the additional exploration target by area for the project’s two licences, Amaam and Amaam North. The total
exploration target is 115Mt to 410Mt, comprising an exploration target of 25Mt to 40Mt tonnes at Amaam and an exploration target of
90Mt to 370Mt tonnes at Amaam North. Totals below may not sum due to rounding. The potential quantity and grade of the exploration
target is conceptual in nature, and there has been insufficient exploration to estimate a Coal Resource. It is uncertain if further exploration
will result in the estimation of a Coal Resource.
Exploration TargetD Amaam
Amaam Middle Chukchi
Area 1
Area 2
Area 3
Area 4
Cretaceous
Total (rounded)
Open Pit1 (Mt)
2 to 3
Underground2 (Mt)
-
-
-
0
1 to 2
3 to 5
-
-
20 to 30
3 to 5
25 to 35
Total (Mt)
2 to 3
-
-
20 to 30
4 to 7
25 to 40
1. Assumes coal seams greater than 0.3m to a depth of 400m for Areas 1– 4. Assumes coal seams greater than 0.3m to a depth of 75m for Cretaceous.
2. Assumes coal seams greater than 1.2m and deeper than 400m and up to 800m for Areas 1– 4. Assumes coal seams greater than 1.2m and deeper than 75m for Cretaceous.
Exploration TargetD Amaam North
Open pit1
Underground2
Total
Lower Chukchi Coal (Mt)
0 to 15
Middle Chukchi Coal (Mt)
80 to 235
0 to 15
0 to 30
10 to 105
90 to 340
Total (Mt)
80 to 250
10 to 120
90 to 370
1. Assumes coal seams greater than 0.3m to a depth of 250m.
2. Assumes coal seams greater than 1.2m from 250m to 400m.
All areas
Total (rounded)
Open Pit1 (Mt)
80 to 255
Underground2 (Mt)
35 to 155
Total (Mt)
115 to 410
Notes to Resources, Exploration Targets and Reserves
Competent Person’s Statement – Amaam
The information compiled in this announcement relating to exploration results, exploration targets or Coal Resources at Amaam is based on information provided by TIG and
compiled by Neil Biggs, who is a member of the Australasian Institute of Mining and Metallurgy and who is employed by Resolve Coal Pty Ltd, and has sufficient experience
that is relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the
JORC Code. Neil Biggs consents to the inclusion in the announcement of the matters based on this information in the form and context in which it appears.
Competent Persons’ Statement – Amaam North
The information presented in this report relating to Coal Resources is based on information compiled and modelled by Anna Fardell, Consultant (Resource Geology) of SRK
Consulting (Kazakhstan) Ltd, who is a Fellow of the Geological Society of London; and reviewed by Keith Philpott, Corporate Consultant (Coal Geology) of SRK Consulting
(UK) Ltd, who is a Fellow and Chartered Geologist of the Geological Society of London. Keith Philpott has worked as a geologist and manager in the coal industry for over
40 years and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a
Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results. Mineral Resources and Ore Reserves’. Keith Philpott
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information relating to the Estimation and Reporting of Ore Reserves at Amaam North is based on information provided by TIG and compiled by Peter Balka and Marian
Gorman, who are members of the Australasian Institute of Mining and Metallurgy and who have sufficient experience that is relevant to the style of mineralisation and type of
deposit under consideration and to the activity undertaken to qualify as a Competent Person as defined in the JORC Code. Peter Balka is an employee of TIG and Marian
Gorman was an employee of TIG at the time the Reserves were compiled. Peter Balka and Marian Gorman consent to the inclusion in the announcement of the matters
based on their information in the form and context which it appears.
Note A – Inferred Resources
According to the commentary accompanying the JORC Code, an ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are
estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is
based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to an Ore Reserve. It is
reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
10
Tigers Realm Coal Annual Report 2015 Project F field work
Note B – Indicated Resources
According to the commentary accompanying the JORC Code, an ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality),
densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of modifying factors in sufficient detail to support mine planning
and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to assume geological and grade (or quality) continuity
between points of observation where data and samples are gathered.
Note C – Measured Resources
According to the commentary accompanying the JORC Code, a ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality),
densities, shape and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final
evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill holes and is sufficient to confirm geological and grade (or quality) continuity between points of
observation where data and samples are gathered. A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource
or an Inferred Mineral Resource. It may be converted to a Proved Ore Reserve or under certain circumstances to a Probable Ore Reserve.
Note D – Exploration Target
According to the commentary accompanying the JORC Code, an exploration target is a statement or estimate of the exploration potential of a mineral deposit in a defined
geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade (or quality), relates to mineralisation for which there has been insufficient
exploration to estimate a Mineral Resource. Any such information relating to an exploration target must be expressed so that it cannot be misrepresented or misconstrued as
an estimate of a Mineral Resource or Ore Reserve. The terms Resource or Reserve must not be used in this context.
Note E – Reserves
According to the commentary accompanying the JORC Code, a ‘Reserve’ is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes
diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-feasibility or Feasibility level as
appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified.
11
Tigers Realm Coal Annual Report 2015 Operations Review
Kuzbass
Basin
2,000 –5,000km
railroads to ports
South
Yakutsk
Basin
Amaam
Project
~25km to port
British
Columbia
8 days
shipping
1,100km
railroads to ports
14 days
shipping
North Asia Market
Bowen
Basin
13 days
shipping
115 – 250km
railroads to ports
Major coking coal basins
Railroad directions
Sea directions
TIG projects
KEY
178E
Chukotka Province
63N
Amaam North
Nagornaya Coal Mine
Beringovsky Port
Coal Terminal
Amaam
North Camp
Project F
110.6Mt
Resource
Amaam
521Mt
Resource
Amaam Camp
Arinay Lagoon
Stage 1 – Project F and Extensions
Stage 2 – Production increases from Amaam and Amaam North
Stage 3 – Amaam and Amaam North at full capacity and
transportation corridor to Arinay
N
Mining licence
Exploration licence
Road/track
Coal outcrop and subcrop
Middle and Upper Chukchi Formation
12
20km
Mt Keliney
Tigers Realm Coal Annual Report 2015 TIG Coking Coal Projects
Tigers Realm Coal Ltd (ASX: TIG) owns 80% of two Coking
Coal Projects in the Province of Chukotka in far eastern Russia,
Amaam and Amaam North.
Amaam – TIG owns an 80% beneficial interest in ZAO Nothern
Pacific Coal Company, which holds Exploration Licence No. AND
13867 TP (Zapadniy Subsoil Licence) and the Exploration and
Extraction (Mining) licence No. AND 01225 TE, which covers
approximately 40% of Area 3 (refer to page 16).
Amaam North – TIG owns an 80% beneficial interest in OOO
Beringpromugol, which holds Exploration Licence No. AND
01203 TP (Levoberezhniy Licence) and Exploration and Extraction
(Mining) Licence No. AND 15813 TE, which covers the initial
Project F mine development area 35km from the TIG owned coal
terminal at Beringovsky Port. The Projects, covering an area of
709km2, are located in the Bering Coal Basin in the Chukotka
Autonomous Okrug (District) in far eastern Russia, approximately
230km south of the regional capital of Anadyr, and some 40km to
the south of the existing coal mining operations of Nagornaya and
its supporting town at Beringovsky.
The primary coal host sequence at Amaam North and Amaam
is the Middle Chukchi Formation of Palaeogene age. The initial
Resource at Amaam North, Project F, is within the Lower Chukchi
formation, and is characterised by large seam cumulative coal
thicknesses over 10m and a significant proportion of low ash coal.
The Chukotka Provincial Government is supportive of mining
and its contribution to the regional development. During 2015,
it endorsed TIG’s projects’ inclusion into Beringovsky Advanced
Development Zone (ADZ). Companies within an ADZ receive
favourable conditions which include reduced taxation rates,
mineral extraction tax (MET) rates, customs duties and social
security payments. TIG has initiated the process of registering
its key legal entities in the ADZ.
The Company’s Russian Management Team has well established
relationships with the Provincial Government and extensive
experience in regulatory approval processes.
Amaam North Project
2015 Highlights
• Resources at Project F increased by 53% to 110.6Mt.
• Open pit resources are 87.3Mt, of which 72Mt are in Measured
and Indicated categories.
• Coke test results confirm Project F coal will produce a high
value coking coal product.
• Approval to mine at Project F granted.
• Project documentation for road and site infrastructure
construction completed.
• Safe and efficient operation of Port Ugolny.
• Project F Feasibility Study enhancement work progressed well.
Project F mining equipment
Project F site visit
13
Tigers Realm Coal Annual Report 2015
Operations Review continued
Amaam North Geological Plan and Project F Mining Licence Area
110.6Mt total Resource comprising 22Mt
MeasuredC, 55.7Mt IndicatedB & 32.9Mt
InferredA and 9.2Mt of ReservesE, 5.6Mt
Proven and 3.6Mt Probable
22km to existing road and
35km to coal port
Total Project F Resources are 110.6Mt, a 38.3Mt increase over
the 2014 estimate.
• Measured Resources have increased by 9.4Mt to 22Mt.
• Indicated Resources have increased 42.7Mt to 55.7Mt.
• Inferred Resources have decreased 13.7Mt, due to
re-classification, to 32.9Mt.
The majority of the Resources, 87.3Mt, are in the potentially open
pittable zone, based on seam thicknesses greater than 0.3m
to a maximum depth of 300m or a maximum strip ratio of 25:1
bcm:t. 72Mt (82%) of open pit resources are categorised as either
Measured or Indicated classification.
The Resource estimate reflects the additional potential for
underground coal mining at Project F, with 23.3Mt classified as
underground Resources – 5.7Mt is classified as Indicated and
17.6Mt as Inferred. The criteria for underground Resources is
seam thickness (Seam 4 only) greater than 1.2m to a maximum
depth of 400m.
Significant increase in Resources
at Project F
In December 2015, TIG announced a 53% increase in
Coal Resources to 110.6Mt at Project F, the first of several
areas to be tested on the highly prospective Amaam North
licence block.
The increase in Resources resulted from infill drilling during
2015 designed to increase the overall confidence levels of
Resources within Project F and the surrounding extension
areas. This program targeted areas requiring a greater level
of understanding and, most importantly, the eastern extension
areas, which contain significant coal thickening with vertical
cumulative coal in boreholes of up to 29m.
The updated Resource is based on an additional 2,691m of
infill drilling since the previous Resource estimate completed
in November 2014. The total Resource is based on 146 drill
holes and 12,506m of drilling over the past three years.
The new coal Resource estimate by SRK Consulting (Russia) Ltd
(Competent Person – Keith Philpott) has resulted in a substantial
increase in both tonnage and the proportion of tonnage
categorised as Measured and Indicated.
14
Tigers Realm Coal Annual Report 2015 Project F coal seam outcrop
The expanded Resources at Project F from the successful
drilling campaign in the eastern extensions underpin our work
on updating and enhancing the Project F Feasibility Study. The
Company expects to complete its update to the Feasibility Study
in H1 2016.
Bulk Sample Coke Test Results Confirm Quality
of Project F coal
In April 2015 TIG announced the results of a second round of
coke tests. These tests confirmed the results of the 2014 tests,
and on some measures delivered better results.
One of the coke strength after reaction (CSR) results of 55
is higher than the initial bulk sample coke test results used to
develop the coal specification tabled in the November 2014
Feasibility Study and indicates potential to improve the Project F
product quality further by careful processing, beneficiation
and blending of seams at the mine.
The JIS Drum index results are similar to high quality Australian
coking coals and confirm the potential marketability of this coal
into north Asian steel mills.
These results confirm the marketability of the Project F coal; a
coal that is very similar to several well-known Queensland coking
coals and well suited to common coke feed blends used in north
Asian steel mills. Importantly they are expected to provide greater
confidence to steel mill customers who have already advised
initial acceptance of the Project F Coal specification and are
now waiting to test samples during 2016.
Approval to Mine at Project F Granted
In April 2015 TIG received the key permits required to commence
mining coal at Project F.
Approvals were received from the Main State Expertise
(Glavgosexpertiza – covering open pit operations) and
State Ecological Expertise (Rosprirodnadzor – covering
environmental management and monitoring) for the overall
design documentation covering construction of an open pit mine
at Project F. The Project documentation meets the environmental
requirements under Russian legislation and these approvals
are valid for 18 years.
15
Tigers Realm Coal Annual Report 2015 Operations Review continued
Receipt of these key approvals, along with granting the mining
licence, mean the most critical permitting milestones for the
development of Project F are now granted.
Project documentation for road and site infrastructure
construction was completed in the September quarter and
submitted for Russian State Expertise approval. The Company
expects positive approval of these in H1 2016.
Port Ugolny Operated Safely and Efficiently
During the 2015 shipping season Port Ugolny was operated
successfully and without incident. Primary port activities centred
on trans-shipment of stockpiled coal from the now closed
Nagornaya underground mine, and movement of general cargo
for the Company and Beringovsky Township. Shipping volumes
for 2015 are summarised below.
Quarters 2 and 3
Quarter 4
2015
Coal
(Tonnes)
72,142
16,834
88,976
General Cargo
(Tonnes)
5,232
1,054
6,286
Amaam Geological Plan
Amaam Project
2015 Highlights
• Total Resources increased by 12% to 521Mt.
The Amaam Licence comprises the tenement licence No.
AND 13867 TP. The licence is 231km2, measuring approximately
32km east-west and 9km north-south, and located 30km from
the Bering Sea coast and a proposed deep water port site at
Arinay Lagoon.
TIG commenced exploration activities in 2010 and has completed
47,700m of drilling (exploration and engineering) to December
2015, with 3,003m drilled in 2015.
The Amaam Project is a multi-seam, moderate dipping deposit
within a synclinal basin. Coal is primarily in the Middle Chukchi
formation, and is divided into four main areas by north west
trending faults. To date, exploration activities have identified
that the highest tonnages of coal are within Areas 3 and 4.
Exploration Licence
‘Cretaceous’ Coal Seams
Mining Licence
16
Tigers Realm Coal Annual Report 2015 Amaam Project Resource Increase
In July 2015 TIG announced a 57Mt increase in the Amaam
Resource to 521Mt. TIG’s Resource consultant, Resolve Geo Pty
Ltd, estimated a total of 521Mt of Coal Resources at Amaam.
The Resources include 3.1Mt of Measured Resources, 91Mt of
Indicated Resources and 428Mt of Inferred Resources. In Area
3, the key area targeted for initial production, Total Resources
increased to 190Mt with Indicated Resources of 48Mt and a
Measured Resource component of 1.1Mt.
International Standards such as ISO14001 (Environmental
Management) and OHSAS 18001 (Occupational Health
and Safety). The purpose of these Standards is to embed a
structured and systematic approach to identifying and managing
the organisation’s HSEC risks and opportunities, with a focus
on continuous improvement. The ongoing focus on hazard
identification, management of risks, training, communication
and Standards implementation at our projects resulted in the
successful completion of activities during the year.
Of the total Resource at Amaam, 425Mt is in the open pit domain,
less than 400m from surface. Between 400m and 800m, the
Inferred and Indicated Resource, totals 93Mt, providing good
potential for future underground operations. Underground
Resources are limited to seams thicker than 1.2m.
Health, Safety, Environment and Community 2015
During 2015, we continued to enhance the development of,
and made significant progress on the implementation of
our HSEC Management System Standards. The Standards
meet current industry best practice and are aligned with key
HSEC activities at site focused on the planning and successful
execution of a number of activities. This included the completion
of construction of the fuel farm, the delivery of containers, bulk
fuel and mining equipment to site and ongoing exploration drilling.
Stakeholder engagement activities continued during the year.
The Company’s key focus here is continued co-operation with
local communities, the Anadyr Municipality and the Chukotka
Regional Government. A highlight this year was the Company’s
hosting of site visits with the Australian Ambassador to Russia,
His Excellency, Mr Paul Myler.
Project F coal seam outcrop
17
Tigers Realm Coal Annual Report 2015 Financial Report
19 Directors’ Report
52 Consolidated Statement of Financial Position
53 Consolidated Statement of Comprehensive Income
54 Consolidated Statement of Changes in Equity
56 Consolidated Statement of Cash Flows
57 Notes to the Consolidated Financial Statements
111 Directors’ Declaration
112 Lead Auditor’s Independence Declaration Under
Section 307C of the Corporations Act 2001
113 Independent Auditor’s Report to the Members
of Tigers Realm Coal Limited
115 Shareholder Information
117 Corporate Directory
18
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Directors’ report
For the year ended 31 December 2015
The Directors present their report together with the financial report of the Group, being Tigers Realm Coal Limited (“the
Company” or “TIG”) and its subsidiaries, for the year ended 31 December 2015.
1.
Directors and Company Secretary
The Directors of the Company at any time during or since the end of the period are:
Name
qualifications and
independence
status
Mr Craig
Wiggill
Chairman
(appointed as
Chairman 1
October 2015)
BSc Eng.
Mr Owen
Hegarty
Non-executive
Director
BEc(Hons),
FAusIMM
Dr Bruce Gray
Non-executive
Director
(appointed 1
October 2015)
MB, BS, MS,
PhD, FRACS
Experience, special responsibilities and other directorships
Mr Wiggill was appointed Chairman on 1 October 2015. Mr Wiggill has served as a Non-executive Director of
the Company since being appointed 20 November 2012. Mr Wiggill continues in his role as Chairman of the
Development and Finance Committee and joined the Nominations and Remuneration Committee commencing
10 December 2015. Mr Wiggill has extensive experience in the global mining industry including over 23 years
in the coal sector, the majority of such being within the Anglo American Plc group. Mr Wiggill is currently the
Chairman at Buffalo Coal Corp (TSX: BUF) which has two operating coal mines in its portfolio. In addition he
Chairman (non-executive) of globalCOAL which is a London registered company, the principal activities of
which are the development of standardized contracts for the international coal market and the provision and
management of screen based brokerage services for the trading of physical and financial coal contracts. His most
recent executive role was as CEO – Coal Americas at Anglo Coal, where he established and developed the Peace
River operation in Canada and co-managed joint venture projects at Cerrejón and Guasare. He has also held
leadership roles covering commercial, trading and marketing responsibility, corporate strategy and business
development for Anglo American. He holds no other directorships with ASX listed entities.
Mr Hegarty has over 40 years’ experience in the global mining industry, including 25 years with the Rio Tinto
group where he was Managing Director of Rio Tinto Asia and also Managing Director of the Australian copper
and gold business. He was the founder and Chief Executive Officer of Oxiana Limited (now OZ Minerals
Limited) which grew from a small exploration company to a multi-billion dollar Australia, Asia and Pacific
focused, base and precious metals explorer, developer and producer. Mr Hegarty is Executive Vice Chairman
of Hong Kong listed G Resources Group Limited, a gold mining company. He has recently been appointed as
Vice Chairman of ASX listed Fortescue Metals Group Limited, which he had joined as a Non-Executive Director
in October 2008, he is also a member of the Remuneration and Nomination Committee. He was also appointed
Non-Executive Director of Highfield Resources Limited. Mr Hegarty is a Director of the AusIMM and a
member of a number of Government and industry advisory groups. He was awarded the AusIMM Institute
Medal in 2006, and the G.J. Stokes Memorial Award in 2008. Mr Hegarty is Chairman of TRM and Chairman
of EMR Capital, a private equity investment manager focused on resources. Mr Hegarty was appointed a
Director on 8 October 2010 and is Chairman of the Audit, Risk and Compliance Committee and of the
Nomination and Remuneration Committee, and a member of the newly established Development and Finance
Committee.
Dr Gray was appointed as a Non-executive Director of the Company on 1 October 2015. Prior to this Dr Gray
had been appointed as a Non-executive Director of the Company on 25 October 2013 and resigned on 28
March 2014. Dr Gray established and operated a number of highly successful start-up businesses in the
medical sector. He holds no other directorships with ASX listed entities.
19
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
1.
Directors and Company Secretary (continued)
Name
qualifications and
independence
status
Mr Ralph
Morgan
Non-executive
Director
(appointed 1
April 2014)
BA
Mr Tagir
Sitdekov
Non-executive
Director
(appointed 1
April 2014)
MBA
Mr David
Forsyth
Company
Secretary
FGIA, FCIS,
FCPA
Experience, special responsibilities and other directorships
Mr Morgan was appointed Non-Executive Director on 1 April 2014. Mr Morgan is a partner at Baring Vostok
Capital Partners (BVCP) with responsibility for investment projects in Russia, the CIS and Mongolia. Prior to
BVCP he worked as Managing Director at Goldman Sachs in the Global Natural Resources Group from 2009-
2012 and was responsible for the investment banking division’s advisory work with natural resource clients
in Russia and the CIS. From 2004 to 2008 Mr Morgan was a Managing Director and COO at Norilsk Nickel
and prior to that role he was a partner with the Moscow office of McKinsey and Company for 9 years. Mr
Morgan holds a BA (Political Science, Yale University), MPhil (Russian and East European Studies, Oxford
University). Mr Morgan is a member of the Nomination and Remuneration Committee and the newly
established Development and Finance Committee. He holds no other directorships with ASX listed entities.
Mr Sitdekov was appointed a Non-Executive Director on 1 April 2014. Mr Sitdekov is currently a Director of
Russia Direct Investment Fund (RDIF) and has been involved in the Russia private equity market for the last
10 years, recently as Managing Director at A-1, a direct investment arm of Alfa Group, Russia’s largest private
conglomerate. Mr Sitdekov has participated in a number of landmark private equity transactions across a range
of industries. From 2003 to 2005 he was CFO at power generating company OJSC Sochi TES (a subsidiary
of RAO Unified Energy System of Russia) and prior to that role he was a Senior Consultant at Creditanstalt
Investment Bank for 2 years. Mr Sitdekov holds an MBA (University of Chicago Booth School of Business,
London). Mr Sitdekov is a member of the Audit, Risk and Compliance Committee. He holds no other
directorships with ASX listed entities.
Mr Forsyth has over 40 years’ experience in engineering, project development and mining. His most recent
position was with Oxiana Ltd, now OZ Minerals Limited, where he was Company Secretary and Manager
Administration from 1996 to 2008. Mr Forsyth joined TRM as Director and Company Secretary in 2009. Mr
Forsyth was appointed a Company Secretary of the Company on 8 October 2010.
20
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
Name
qualifications and
independence
status
Mr Antony
Manini
Chairman
(resigned 1
October 2015)
BSc(Hons),
FAusIMM,
FSEG
Mr Andrew
Gray
Non-executive
Director
(resigned 1
October 2015)
BEng. MBA
Experience, special responsibilities and other directorships
Mr Manini resigned from his positions held with TIG on 1 October 2015. Mr Manini was appointed a Director
and Chairman on 8 October 2010, and was Executive Chairman from 12 November 2012 until 1 July 2013. Mr
Manini was also a member of the Nomination and Remuneration Committee. Mr Manini has over 25 years of
global resource industry experience across a diverse range of commodities in over 20 countries. His experience
includes 14 years with Rio Tinto and 8 years with Oxiana Limited (now OZ Minerals Limited) covering various
technical, commercial, senior management and executive roles in exploration, project development and business
development. As a foundation member of the Oxiana Limited executive team he was responsible for establishing
and managing the company’s highly successful exploration and resources group and closely involved in the
discovery and/or acquisition and development of Oxiana Limited/OZ Minerals Limited’s four operating mines.
Mr Manini is a founder of Tigers Realm Minerals Pty Ltd (“TRM”) and TIG and has been Managing Director
of TRM since inception of TRM. In January 2015, Mr Manini was appointed Director, Deputy Chairman and
Chief Executive Officer of Kalimantan Gold Corporation Limited. He holds an Honours Degree in Geology and
is a Fellow of the Australian Institute of Mining and Metallurgy and the Society of Economic Geologists. He
held no other directorships with ASX listed entities.
Mr Gray resigned from his positions held with TIG on 1 October 2015. Mr Gray was appointed as a Non-
executive Director on 28 March 2014 following the resignation of Dr Bruce Gray. Prior to this Mr Gray was
the nominated Alternate Director for Dr Bruce Gray, who had been appointed as a Non-Executive Director of
the Company on 25 October 2013. Mr Gray was a member of the Audit, Risk and Compliance Committee and
the Development and Finance Committee. Mr Gray is a professional investor with investment interests
spanning technology, healthcare and HCIT globally. Most recently, Mr Gray was the Managing Director of
Archer Capital, having joined that firm in 2007. Archer Capital is an Australian based private equity firm with
in excess of $3 billion in capital under management. Prior to joining Archer, Mr Gray was a partner at
Francisco Partners, leading their European activities from London. Francisco Partners is a $5bn private equity
manager focused on technology companies including software, ICT and media. Prior to joining Francisco
Partners, Mr Gray co-founded and was COO of software firm Abilizer Solutions in San Francisco and London
(sold to BEA/Oracle). Early in his career, Mr Gray was a principal with Genstar Capital. Mr Gray was also
a consultant with McKinsey & Company and an investment banker with James D. Wolfensohn in New York.
Mr Gray holds a B.Eng (Aeronautical) degree from The University of Sydney, with First Class Honours, and
a Masters of Business Administration from the Harvard Business School. Mr Gray is a Director of V8
Supercars. He holds no other directorships with ASX listed entities.
The Directors have been in office since the start of the period to the date of this report unless otherwise stated.
21
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
2.
Directors’ meetings
The number of Director’s meetings (including meeting of committees of Directors) and number of meetings attended by each of the
Directors of the Company during the financial year are:
Attendance at meetings
Directors’
meetings
Meetings of committees of Directors
Nomination
and
Remuneration
Audit Risk &
Compliance
Development
& Finance
A
11
11
11
11
2
9
9
B
11
10
11
11
2
9
9
A
-
3
3
-
-
3
-
B
-
3
3
-
-
3
-
A
-
7
-
7
-
-
6
B
-
7
-
5
-
-
6
A
6
6
6
-
-
-
4
B
6
4
5
-
-
-
4
Mr Craig Wiggill
Mr Owen Hegarty
Mr Ralph Morgan
Mr Tagir Sitdekov
Dr Bruce Gray (re-appointed 1 October 2015)
Mr Antony Manini (resigned 1 October 2015)
Mr Andrew Gray (resigned 1 October 2015)
A = Number of meetings held during the time the Director held office
B = Number of meetings attended
3.
Principal activities
The principal activities of the Group are the identification, exploration, and development of coal deposits in the Far East of the
Russian Federation and the operation of Ugolny Port in Beringovsky.
4.
Operating and financial review
Operating Performance
The Group’s two main coking coal projects in the Far East of Russia are currently at the exploration and evaluation stage. As a
consequence, the Group has minimal operating income from Port Ugolny and no operating income or expenditure relating to coal
production. Operating expenditure consists of expenditure at Port Ugolny, exploration and evaluation costs, administration, staff
and corporate costs.
The operating loss after income tax of the Group for the year ended 31 December 2015 was $107.970 million (2014: loss of $
35.056 million). An asset value write-down totalling $160.407 million was recognised in the annual financial statements in relation
to both the Amaam project CGU and Amaam North project CGU. This was partially offset by the reversal of the deferred tax
liability associated with mineral rights resulting in a tax benefit of $23.400 million and a decrease in the royalty liability agreement,
which resulted in a gain being recognised of $40.468 million. The write-down of assets, reversal of deferred tax liability associated
with mineral rights and deferred exploration and evaluation, impairment of goodwill and change in the royalty liability all were
driven by a significant deterioration in the coal price forecasts in 2015 and all are non-cash in nature.
As at 31 December 2015 the Group had a cash position of $7.074 million (December 2014: $20.465 million). The Group had no
bank debt. An equipment finance lease was entered into with CAT in August 2014 to acquire a small fleet of mobile equipment to
commence early stage development at Amaam North Project F. Operating activities incurred cash outflows from operations for the
year ended 31 December 2015 of $11.888 million (2014 $25.487 million). Cash outflows from investing activities totalled $2.938
million (2014 $16.100 million) for the year to 31 December 2015.
The Group continues to focus on obtaining suitable financing to develop Amaam North Project F.
Notwithstanding the asset write-down in the current period, the Amaam North Project F provides a low capital, low operating
expenditure path to the early production of coal. The Project has progressed significantly from the initial Resource announcement
in July 2013 and the Preliminary Feasibility Report (“PFS”) completed in September 2013, to a Feasibility Study (FS) completed
in November 2014 and an update of the resource and all other inputs is currently being completed.
22
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
4.
Operating and financial review (continued)
Operating Performance (continued)
The Amaam Project continues to be a core asset of the Group. This is a long-life project, with capacity for up to 6.5Mtpa of high
quality coking coal product from a combination of open pit and underground mining over the 20 year mine life. It involves constructing
a Coal Handling and Preparation Plant (“CHPP”) and associated infrastructure, a coal terminal with loading facilities on the nearby
Arinay Lagoon and an all-weather 25km rail line or road to connect them. The PFS was released in April 2013 and since then the
Group has completed further drilling and exploration activities in line with its license obligations, upgraded the resource and obtained
an Exploration Licence Extension. The Exploration Licence Extension granted in September 2014 for a further 3 years is an important
achievement as it provides the necessary security of tenure to enable the Company to continue its Resource drilling programs,
feasibility studies and works required to convert its Coal Resource to Extraction and Exploration (Mining) Licences.
Financial Position
The Group’s cash balance decreased by $13.391 million over the year to $7.074 million at 31 December 2015.
An equipment finance lease with CAT was entered into in August 2014 to acquire a small fleet of mobile equipment. USD $8.217
million (AUD $10.734 million) in equipment at cost (including VAT) was acquired, with an initial advance paid and the balanced
financed. The finance lease liability was for USD $8.234 million (AUD $10.756 million), with advances paid of USD $4.191 million
(AUD $5.475 million). The advances paid unwound over a 12-month period from the commencement of the lease in September 2014.
Terms and charges are determined on the net position of the lease liability and advance. In addition to this a security deposit guarantee
for CAT was put in place through Raiffeisen Bank for USD $1.607 million (AUD $2.098 million). The finance lease liability
outstanding as at 31 December 2015 is USD $2.932 million (AUD $4.018 million), with advances paid of USD $Nil and a security
deposit of USD$0.976 million (AUD $1.338 million).
During the period a total of $6.247 million was spent on exploration and evaluation activities.
Intangible assets decreased by $141.120 million, due to a write down of assets and impairment of goodwill in relation to the Amaam
Project CGU and Amaam North Project CGU.
The Group recorded a $37.261 million decrease in the Bering Royalty Agreement liability arising from the revaluation of that liability
as at 31 December 2015. The value of the liability is determined using a Discounted Cash Flow model with reference to the value of
the Amaam Project. In the year ended 31 December 2015, the value of the Amaam Project has been significantly impacted by a
decrease in coal price forecasts, which resulted in a significant decrease in the recoverable value of the project. In addition to this, the
Feasibility Study (FS) completion date was extended by a further 36 months to 1 January 2021.
The movement in the royalty agreement liability is a non-cash movement.
23
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
4.
Operating and financial review (continued)
Business Strategies and Group Objectives
The Group’s exploration and evaluation activities continue, with the aim of future development in relation to its two well-located
large coking coal projects in the Far East of the Russian Federation:
Amaam: a large-scale coking coal project targeted for up to 6.5Mtpa of production from dedicated new infrastructure; and
Amaam North: a low cost starter project providing a fast track to production and earnings utilising existing infrastructure
and supporting development of the entire Amaam Coking Coal Field
There is further exploration upside across both of these two major coking coal basins.
The business objectives to date and for 2016 include the completion of further drilling at Amaam and Amaam North. The Group
has the following objectives for 2016:
Continue with efforts to obtain financing required for the development of Project F and working capital needs;
Complete the Exploration and Mining Licence actualisation process and obtain regulatory approval for changes to the
timing and extent of drilling required on all Licences
Complete the drilling and other activities required to maintain tenure of all Exploration and Mining Licences.
Continue operations of Port Ugolny.
Further details of the business objectives for 2015 are included in “Likely Developments” (Section 8 of this Directors’ Report).
Amaam Coking Coal Projects – World Location Map
24
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
4.
Operating and financial review (continued)
Business Strategies and Group Objectives (continued)
Amaam Coking Coal Projects - Conceptual Development Possibilities
25
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
Significant Developments
The significant developments during the reporting period are outlined in detail in “Significant Changes in the State of Affairs”
(Section 5 of this Directors’ Report).
Significant Business Risks
TIG’s annual budget and related activities are subject to a range of assumptions and expectations all of which contain a level of
uncertainty. TIG adopts a risk management framework in order to identify, analyse, treat and monitor the risks applicable to the
Group. The risks are reviewed at least twice a year by the Audit, Risk and Compliance Committee and, following each review, are
formally reported and discussed by the Board. Risks are analysed and reported using risk registers.
Detailed below are risk areas identified as at the date of the Directors’ Report which may affect TIG’s future operating and financial
performance and the approach to managing them.
Country Risk
TIG’s projects are located in Russia. Investing in emerging markets such as Russia involves greater risk than investing in more
developed markets. Operating in this jurisdiction may expose TIG to a range of significant country specific risks including general
economic, regulatory, legal, social and political conditions. These and other country specific risks may affect TIG’s ability wholly
or in part to operate its business in the Russian Federation.
Uncertainty in the Estimation of Mineral Resources
Estimating the quantity and quality of Mineral Resources is an inherently uncertain process and the Mineral Resources stated, as
well as any Mineral Resources or Reserves TIG states in the future, are and will be estimates, and may not prove to be an
accurate indication of the quantity of coal that TIG has identified or that it will be able to extract.
Project Assessment and Development Risk
TIG is at the preliminary stage of determining the economic and technical viability of the Amaam project. To date TIG has
completed a Preliminary Feasibility Study (PFS). There is a risk that the more detailed studies in relation to the Amaam project
may disprove assumptions or conclusions reached in the PFS, may reveal additional challenges or complexities and may indicate
the cost estimates are incorrect. In addition, TIG must proceed through a number of steps before making a final investment decision
with respect to the projects, conducting definitive feasibility studies, converting Resources to Reserves, obtaining government
approvals and permits and obtaining adequate financing.
If TIG decides to proceed to production, the process of developing and constructing the project will be subject to many uncertainties,
including the timing and cost of construction, the receipt of required government permits and the availability of financing for the
projects. There is a risk that unexpected challenges or delays will arise, or that coal quality and quantity results will differ from
the estimates on which TIG’s cost estimates are based, increasing the costs of production and/or resulting in lower sales.
The Feasibility Study (FS) on the Project F section of the Amaam North licence was completed in November 2014. The results of
the FS were based on total resources of 26.8 Mt, including Measured Resources of 7.2 Mt, Indicated Resources of 6.3 Mt and
Inferred Resources of 13.3 Mt. Post the FS TIG announced initial Coal Reserves for Project F of 9.2 Mt. The Group is currently
updating the FS for Amaam North for the resource and all other inputs.
Capital Management
TIG’s Amaam project is at pre-development stage and will require additional drilling, evaluation and feasibility study work prior
to a development decision. To date the PFS on the Amaam project has been completed. Should TIG proceed to develop the Amaam
project upon completion of further definitive studies, significant capital expenditure will be required.
With the completion of the FS on the Project F section of the Amaam North Licence providing an encouraging outcome, TIG will
be looking to advance its development with the aim of first production in late 2017 and then sales in 2018. In order to successfully
deliver on the development of Project F and bring it into production, TIG will need to secure additional sources of funding in 2016.
If TIG is not successful in securing additional sources of funding, it still has the ability to substantially reduce and fund ongoing
working capital requirements of the Group, through to 31 March 2017, meeting minimum expenditure requirements to maintain
tenure on all projects, continued Port Ugolny operations, corporate cost commitments and reduced Project F development activity
through existing cash reserves. If necessary, the disposal of those assets deemed not essential to TIG’s operations in the foreseeable
future can extend TIG’s operations beyond March 2017.
26
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
4.
Operating and financial review (continued)
Significant Business Risks (continued)
Capital Management (continued)
The Group‘s ability to fund its ongoing working capital requirements beyond 31 March 2017 is uncertain. Accordingly a material
uncertainty exists in regards to the ability of the Group to continue to operate as a going concern beyond 31 March 2017 and,
therefore, whether it will be able to realise its assets and extinguish its liabilities in the normal course of business and at the amounts
stated in this financial report. There can be no assurance that the Group will be able to obtain or access additional funding when
required, or that the terms associated with the funding will be acceptable to the Directors. If the Group is unable to obtain such
additional funding, it may be required to reduce the scope of its operations, dispose of non-essential assets or divest of a part, or in
its entirety, an interest in its projects, which may adversely affect its business, financial condition and operating results. Further
details on the matter of going concern are included in Note 2(d) to the Financial Statements.
Licenses, Permits and Titles
TIG will require certain licenses, permits and approvals to develop the projects. There are three main approvals required to
commence the construction and operation of a mining project in Russia. These are an Exploration and Extraction Licence (Mining
Licence), a Construction Permit and a Commissioning Permit. Due to the stage at which the Amaam project is at, the majority of
the required licences, permits and approvals to construct and operate have not yet been obtained.
For Project F Amaam North, with the FS having been completed, the Mining Licence was granted in December 2014 and work has
commenced on obtaining all Construction and Commissioning Permits. In addition to these mining related approvals, other
approvals are required for the development of Project F. These are for the CHPP, road development from the Project F mine-site
to Beringovsky Port, and for the capital upgrades to be completed at the Beringovsky Port. The Group is currently updating the FS
for Amaam North for the resource and all other inputs, inclusive of the timing of obtaining all relevant approvals.
There are also a number of conditions and regulatory requirements that TIG must satisfy with respect to its tenements to maintain
its interests in those tenements in good standing, including meeting specified drilling and reporting commitments.
There is a risk that TIG may fail to obtain or be delayed in obtaining the licences, permits and approval, or meet the conditions
required to maintain its interests in the tenements. Failure to obtain, or delays in obtaining such licenses, permits and approvals,
and failure to meet the tenement licence commitments may adversely affect TIG’s ability to proceed with the projects.
Operational Risks
The projects may be subject to operational, technical or other difficulties, including those arising as a result of unforeseen events
outside the control of the Company, any or all of which may negatively impact the amount of coal produced, delay coal deliveries
or increase the estimated cost of production, which may have an adverse impact on the Company’s business and financial condition.
These risks include:
General Economic Risks: TIG’s ability to obtain funding for the projects, financial performance and ability to execute
its business strategy will be impacted by a variety of general global economic, political, social, stock market and business
conditions. Deterioration or an extended period of adversity in any of these conditions could have an adverse impact on
TIG’s financial position and/or financial performance.
Coal Market and Demand: TIG intends to earn future profits from the production and sale of coal and a decline in prices
or lower demand for coal than expected by TIG may adversely impact the feasibility of the Company’s development and
mine plans, and the economic viability of the projects. There is commodity price risk, with the Company having adopted
a long term sales price at the higher end of external forecasts, when valuing its projects. This assumption has been
validated against long term market predictions.
Exchange Rate Variations: Significant changes in the Australian / US Dollar and the Australian Dollar / Russian Rouble
exchange rate will have a significant impact on TIG’s ability to fund the capital expenditure required to construct these
projects.
Product Quality: TIG has conducted coal quality analysis on a number of drill cores recovered from Amaam. In the
absence of coke test work, no guarantee can be given as to the type of coking coal that could ultimately be produced at
Amaam. If the quality of the Amaam coking coal is lower than currently anticipated, TIG’s prospects, value, project and
financial condition may be materially adversely affected. For Project F Amaam North, the coke quality test work
conducted has confirmed the main product as a semi-hard coking coal with very low sulphur and low phosphorus levels.
27
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
5.
Significant changes in the state of affairs
On 20 March 2015 TIG was added to the All Ordinaries Index.
On 15 April 2015 renewal of the Berongpromugol LLC easement over Alkatvaam Licence.
On 17 April 2015 17,875,000 options were issued to employees under the approved staff option plan.
On 17 April 2015 3,258,518 options were issued to employees under the approved staff option plan.
On 28 April 2015 the Company announced the results of the second round coke strength test work undertaken on samples
from its Amaam North Project F, with results further enhancing confidence that Project F will produce a high value
coking coal product suitable for use in coke oven feed blends for modern blast furnace operations.
On 17 May 2015 1,174,444 options lapsed and consequently were removed from the Company’s option register.
On 17 May 2015 2,084,074 fully paid ordinary shares were issued to some employees who exercised options granted on
17 April 2015 under the approved staff option plan.
On 11 June 2015 the Company issued 6,000,000 share options to directors.
On 12 June 2015 the Company announced that it had received the key permits required to commence mining coal at
Amaam North Project F. The approvals were received from the Main State Expertise (Glavgosexpertiza) and the State
Ecological Expertise (Rosprirodnadzor) for the overall design documentation covering construction of the open pit at
Project F. Project documentation met the environmental requirements under Russian legislation, with approvals being
valid for 18 years. This approval allows coal mining to commence in line with the Project F Mining Licence received in
December 2014.
An asset write-down of $171.820 million was recognised in the interim financial statements in relation to the Amaam
project and Amaam North projects.
On 9 July 2015 the Group announced an update to its Resources and Exploration Targets for both the Amaam and Amaam
North licences. Based on the current Resources and Exploration Targets it is estimated that there is up to 1.1Bt of coal
across the Amaam and Amaam North licences. Total Resources comprising 593 Mt of coal with 120 Mt in the Measured
and Indicated categories and an estimated Exploration target of 180 to 520 Mt.
On 7 September 2015 the Group announced that it had signed a non-binding term sheet with Fund Vostok, a Russian
government fund supporting infrastructure development in the Far East, to finance RUB 1.5 billion (US$23 million) for
construction of the Project F site access and haulage road. The financing is conditional upon TIG securing commitments
from other parties to provide financing for the balance of the project.
On 9 September 2015 the Group announced that 9,058,000 options had lapsed and been removed from the Company’s
option register.
On 22 December 2015 the Group announced a further update to its Amaam North licence Resources and Exploration
Target following the completion of a drill program in early 2015. This resulted in an increase in the Project F resource to
110.6 Mt, with 22.0 Measured, 55.7 Mt Indicated and 32.9 Mt Inferred.
On 23 December 2015 the Group announced that 21,703,000 options had lapsed and been removed from the Company’s
option register.
In December 2015, the Company submitted its application for actualisation of the Amaam Mining and Exploration
Licence, the submission outlining the Company’s plans to optimise the volume of drilling works to be reflected in the
amended Exploration Licence when approved.
In February 2016, the extension from 5 to 7 years for drilling in Amaam North was submitted for approval, which is
expected within 60 days.
In the opinion of the Directors there were no further significant changes in the state of affairs of the Group during the financial
period ended 31 December 2015 not otherwise reflected in these annual financial statements.
6.
Events subsequent to reporting date
In the opinion of the directors of the Company, no transaction or event of a material or unusual nature have arisen in the interval
between the end of the financial year and the date of this report that is likely to affect significantly the operations of the Group, the
results of those operations, or the state of affairs of the Group in future financial years.
7.
Dividends paid or recommended
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the
date of this report.
8.
Likely developments
The Group will progress further exploration, appraisal and development of its Amaam and Amaam North Projects.
Further information about likely developments in the Group’s operations and the expected results of those operations in future
financial years has not been included in this report because disclosure of the information would be likely to result in unreasonable
prejudice to the Group.
28
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
9.
Environmental regulation
The Group’s exploration and development activity in Russia is subject to Federal and Regional Environmental regulation. The
Group is committed to meeting or exceeding its regulatory requirements and has systems in place the ensure compliance with the
relevant Environmental regulation. The Directors are not aware of any breach of these regulations during the period covered by
this report.
10.
Directors’ interests
The relevant interest of each Director in the shares or options over such instruments issued by the companies within the Group and
other related bodies corporate, as notified by the directors to the ASX in accordance with S205G(1) of the Corporations Act 2001,
at the date of this report is as follows:
C Wiggill
OL Hegarty
R Morgan 1
T Sidekov
B Gray
Tigers Realm Coal Limited
Ordinary shares
600,000
17,290,482
-
-
128,554,204
Options over ordinary shares
2,500,000
3,500,000
1,500,000
1,500,000
-
1.
R Morgan transferred the entitlement of 1,000,000 options to BV Mining Holding Limited during 2014.
29
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
11.
Share Options
Options granted to directors and executives of the Company
During or since the end of the 2015 financial year, an additional 6,000,000 options were issued to directors and 21,133,518 options
to employees as part of the Company option plan, with 31,935,444 options forfeited and 2,084,074 exercised, thus bringing the
options issued over ordinary shares in the Company to 31,406,000 as at 31 December 2015.
The option plan offers individuals the opportunity to acquire options over fully paid ordinary shares in the Company. Share options
granted under the plan carry no dividend or voting rights. When exercised, each option is convertible into one ordinary share
subject to satisfying vesting conditions and performance criteria. The shares when issued rank pari passu in all respects with
previously issued fully paid ordinary shares. Option holders cannot participate in new issues of capital which may be offered to
shareholders prior to exercise.
During the period share options were granted to Directors and staff as follows:
Directors
C Wiggill
O Hegarty
R Morgan
T Sitdekov
A Manini 1
A Gray 1
Executives
P Balka
D Kurochkin
S Southwood
D Forsyth
C Parry 2
C McFadden 3
Number of options granted
1,500,000
1,500,000
500,000
500,000
1,500,000
500,000
2,525,222
2,194,815
1,500,000
961,778
2,846,111
1,755,444
1.
2.
3.
Resigned 1 October 2015
Ceased employment 1 October 2015
Ceased employment 1 August 2015
Details on options over ordinary shares in the Company that were granted as compensation for no consideration to each key
management person, during the reporting period and details on options that vested during the reporting period are disclosed in the
Remuneration report. There have been no options granted since the end of the financial year.
30
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
11.
Share Options (continued)
Unissued shares under options
At the date of this report unissued shares of the Group under option are as follows:
Expiry date
22 February 2017
28 March 2017
15 February 2018
15 February 2018
15 February 2018
22 March 2018
3 May 2018
3 May 2018
4 June 2019
28 February 2019
28 February 2019
17 April 2020
17 April 2020
11 June 2020
11 June 2020
Exercise price
0.500
0.750
0.260
0.260
0.340
0.340
0.500
0.600
0.500
0.230
0.170
0.230
0.170
0.500
0.230
Number of shares
1,267,000
1,000,000
150,000
150,000
1,525,000
200,000
1,000,000
1,000,000
2,000,000
4,201,000
4,201,000
5,356,000
5,356,000
2,000,000
2,000,000
31,406,000
Once exercised, the option holder will be issued ordinary shares in the Company.
Details of the terms and conditions of options granted under the Staff Option Plan as part of the Group’s Long Term Incentive Plan
are outlined in the Remuneration report, and are included in Note 27 to the Financial Statements.
The options do not entitle the holder to participate in any share issue of the Company.
No shares have been issued by the Group during or since the end of the financial year as a result of the exercise of options.
31
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
12.
Remuneration report – audited
This remuneration report sets out the remuneration information for Tigers Realm Coal Limited’s Non-executive Directors and other
key management personnel (“KMP”) for the financial year ended 31 December 2015.
(a)
Details of key management personnel
Name
Position
Commencement Date
Chairman (prior to this was a Director
(Non-executive)
20 November 2012
Appointed as Chairman 1
October 2015
Directors
Craig Wiggill
Owen Hegarty
Ralph Morgan
Bruce Gray
Director (Non-executive)
Director (Non-executive)
Director (Non-executive)
Tagir Sitdekov
Director (Non-executive)
8 October 2010
1 April 2014
1 October 2015
1 April 2014
Antony Manini
Chairman
8 October 2010 Resigned 1 October 2015
Andrew Gray
Director (Non-executive)
28 March 2014
Resigned 1 October 2015
Senior Executives
Peter Balka
Interim Chief Executive Officer (prior
to this was the Chief Operating Officer)
1 January 2011
Appointed as Interim Chief
Executive Officer 1 October 2015
Denis Kurochkin
Chief Financial Officer
Scott Southwood
General Manager Marketing
David Forsyth
Company Secretary
21 July 2014
13 October 2013
8 October 2010
Craig Parry
Chief Executive Officer
12 November 2012
Ceased 1 October 2015
Chris McFadden
General Manager - Head of
Commercial, Strategy & Corporate
Development
1 January 2013
Ceased 1 August 2015
(b)
Changes to key management personnel
Directors
On 1 October 2015 Mr Craig Wiggill was appointed as Chairman following the resignation of Mr Antony Manini.
On 1 October 2015 Mr Antony Manini resigned as Chairman of the Company and Mr Andrew Gray resigned as Non-Executive
Director of the Company.
On 1 October 2015 Mr Bruce Gray was appointed as Non-Executive Director following the resignation of Mr Andrew Gray.
Executives
On 1 October 2015 Mr Peter Balka was appointed as Interim Chief Executive Officer.
On 1 October 2015 Mr Craig Parry ceased employment with the Company.
On 1 August 2015 Mr Chris McFadden ceased employment with the Company.
Scott Southwood became a KMP as of 1 August 2015, upon the cessation of employment of C McFadden.
There were no other changes during 2015.
32
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ Report (continued)
For the year ended 31 December 2015
12.
(c)
Remuneration report – audited (continued)
Principles used to determine the nature and amount of remuneration
Key management personnel (“KMP”) have authority and responsibility for planning, directing and controlling the Group’s
activities and include the Directors and senior management of the Company.
The Board is committed to clear and transparent disclosure of the Company’s remuneration arrangements. The Company’s
remuneration policy is designed to ensure that it enables the Company to attract and retain valued employees and motivate senior
executives to pursue the long term growth and success of the Company, demonstrate a clear relationship between performance and
remuneration and have regard for prevailing market conditions.
(d)
Consequence of performance on shareholder wealth
The Directors are committed to developing and maintaining a remuneration policy and practices that are targeted at the achievement
of corporate values and goals and the maximisation of shareholder value.
When determining compensation for KMP, the Remuneration and Nomination Committee and the Board have regard to financial
funding, resource development, project advancement and development, and other objectives, based on goals set by the
Remuneration and Nomination Committee and the Board throughout the year. In addition, the Board has regard to the following
financial indices in respect of the financial year and previous four financial years.
Net profit / (loss) attributable to equity
holders of the parent ($ million)
2015
2014
*As
restated
2013
*As
restated
2012
*As
restated
2011
*As
restated
$(86.170)
$(29.629)
$(22.080)
$(24.742)
$17.156
Closing share price ($)
$0.03
$0.12
$0.165
$0.16
$0.27
*The Comparative restatement has been restated to show the effect of the voluntary change in accounting policy. Refer to Note 7
(e)
Remuneration policy and structure for senior executives
The objective of the Group’s executive remuneration policy is to ensure reward for performance is market competitive and
appropriate for the results delivered. The structure aligns executive reward with achievement of strategic objectives and the creation
of wealth for shareholders, and conforms to market practice for delivery of reward. The structure provides a mix of fixed and
variable remuneration and for the variable, or “at-risk”, remuneration a blend of short-term and long-term incentives. As executives
gain seniority within the Group, the balance of this mix shifts to a higher proportion of “at-risk” rewards.
The Company’s remuneration policy and structure for its senior executives comprises three main components:
Fixed Remuneration, which is the total base salary and includes employer superannuation contributions. The fixed
remuneration reflects the job level, role, responsibilities, knowledge, experience and accountabilities of the individual
executive and is set at a level which is competitive, aligned with the business needs and based on current market conditions
in the mining industry and countries in which the Company does business.
Compensation levels are reviewed each year by the Nomination and Remuneration Committee to take into account cost-
of-living changes, any change in the scope of the role performed by the senior executive and any changes required to meet
the principles of the remuneration policy. The review process considers individual and overall performance of the Group.
Short-Term Incentive (“STI”), which is at-risk remuneration. This is an annual incentive award based on the achievement
of pre-determined Company and individual objectives. These short-term incentives are available to executives and other
eligible participants and are at the discretion of the Board. The STI is an at-risk bonus provided in the form of cash, which
is payable in February each year.
Long-Term Incentive (‘LTI’) Program, which is at-risk remuneration. Under the LTI Program employees, at the discretion
of the Board, are offered options over ordinary shares in the Company under the Company’s Option Plan.
For KMP other than the CEO and General Manager Marketing, the target remuneration mix in the current year is 50% fixed, and
50% at risk (15% STI and 35% LTI). For the CEO, the LTI element of remuneration was determined at the time of initial
appointment. The General Manager Marketing is on a contract and is only eligible to the 35% LTI.
33
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
12.
Remuneration report – audited (continued)
For the STI element of remuneration, a performance framework has been developed for KMP and other senior executives under the
STI programme. Key Performance Indicators (“KPI”) are developed for each individual, which are reassessed regularly to ensure
they remain current and applicable as the Group’s operations develop.
Individual performance against these KPIs is assessed annually by the individual’s manager or the Chief Executive Officer, and is
subject to Board discretion. The performance framework develops individual KPIs in the following proportions:
30% Group related KPIs, (these are specific to Health, Safety & Environmental, Project, and Corporate objectives); and
70% Individual KPIs tailored to the role and objectives of each senior executive.
For the LTI element of remuneration, options granted under the Company’s Option Plan, and any project completion bonuses are
granted at the Company’s discretion, and are approved by the Board in advance. The number of options an executive is offered is
a function of their level in the Group. Further details of the Option Plan are included in Note 27. The Company may make initial
It is a vesting condition that the
grants of options to certain senior executives as part of their individual employment contracts.
holder of options remains an employee or director at the time of vesting.
Other than the provisions relating to vesting of LTI grants in certain circumstances, the employment contracts contain no termination
benefits other than payments in lieu of notice and redundancy payments. The notice periods and redundancy payments vary for the
individuals and depending upon the period of service.
The remuneration and other terms of employment for key management personnel are formalised in their employment contracts and
services contracts.
(e)
Employment contracts
The Group has entered into employment contracts with each senior executive which are open ended contracts with no expiry date.
These contracts are capable of termination on three months’ notice. The Group retains the right to terminate a contract immediately
by making a payment equal to three months’ pay in lieu of notice. No notice is required for termination due to serious misconduct.
The senior executives are also entitled to receive on termination of employment their statutory entitlements of accrued annual and
long service leave, together with any superannuation benefits. Employees whose services are provided on secondment from TRM,
may be terminated on one month’s notice.
The employment contracts provide for the payment of performance-related cash bonuses under the STI programme and
participation, where eligible, in the Company Option Plan under the LTI Program. The maximum cash bonus payable under the
STI programme is up to 45% of total remuneration for senior executives, and up to 75% of base salary for the CEO.
The employment contract outlines the components of compensation but does not prescribe how compensation levels are modified
year to year. The Nomination and Remuneration Committee reviews compensation levels each year to take into account market-
related factors such as cost-of-living changes, any change in the role performed by the senior executive and any changes required
to meet the principles of the compensation policy.
(f)
Remuneration of Executive and Non-executive Directors
On appointment to the Board, Non-executive Directors enter into service agreements 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. The
employment contracts with Directors have no fixed term.
Non-executive Director remuneration is reviewed annually by the Board. Non-executive Directors receive a base fee for being a
Director and may receive additional fees for either chairing or being a member of a Board committee, working on special
committees, and / or serving on special committees and / or special boards. Non-executive Directors’ fees are determined within
an aggregate Directors’ fee pool limit, which has been established at $1,500,000.
Non-executive Directors receive a fixed base fee. In addition to this fixed base fee all resident non-executive Directors and one non-
resident Director receive 9.50 per cent in superannuation contributions. No retirement or other long term benefits are provided to
any Director other than superannuation. The Non-executive Directors can claim reimbursement of out-of-pocket expenses incurred
on behalf of the Company. The base fee for Directors reduced from $75,000 per annum to $30,000 per annum, effective 1 October
2015. In addition to the Chairman receiving $100,000 per annum, from 1 October 2015, a per diem of the AUD equivalent of GBP
1,000 is payable whilst travelling in respect of the Group’s business. In addition to the base fee, $20,000 per annum is also paid to
the Director who performs the duties of Chairman of the Audit, Risk and Compliance Committee. No remuneration paid to Non-
executive Directors during the financial year was results based.
34
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
12.
(h)
Remuneration report – audited (continued)
Directors’ and executive officers’ remuneration
Details of the nature and amount of each major element of remuneration of each Director of the Company, and the key management
personnel (as defined in AASB 124 Related Party Disclosures) are set out in the following tables.
Key management personnel of the Group and other executives of the Company and the Group
Short - term
Cash
Salary and
fees
$
Non-
Monetary
Benefits
(1)
$
STI
cash
bonus
(2)
$
Post
employ-
ment
Share -
based
payments
Super-
annuation
$
Termin-
ation
benefits
$
LTI (3)
$
Total
Remun-
eration
$
Proportion
of remun-
eration
comprising
options
%
2015
Name
2015
Non-executive Directors
C Wiggill 9
OL Hegarty
R Morgan
T Sitdekov
B Gray 8
AJ Manini 5
A Gray 6
105,269
68,750
63,544
63,631
7,500
82,088
56,250
Sub total
447,032
Other key management
personnel
P Balka
400,461
D Kurochkin
S Southwood10
D Forsyth
C Parry 4
C McFadden 7
447,309
317,600
118,587
250,574
138,530
-
-
-
-
-
-
-
-
-
-
-
-
6,555
-
Sub total
1,673,061
6,555
Total key management
personnel
2,120,093
6,555
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,592
6,531
-
-
713
-
5,344
21,180
17,500
-
-
8,119
-
-
-
-
-
-
-
-
-
-
-
-
29,702
242,906
18,790
160,032
26,716
27,498
23,362
23,362
-
16,428
18,496
140,577
102,779
86,906
86,993
8,213
98,516
80,090
135,862
604,074
195,237
81,520
42,146
80,110
76,525
44,843
613,198
528,829
359,746
206,816
606,262
362,195
19.00%
26.75%
26.88%
26.86%
00.00%
16.68%
23.09%
31.84%
15.42%
11.72%
38.74%
12.62%
12.38%
74,111
402,938
520,381
2,677,046
95,291
402,938
656,243
3,281,120
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Includes the value of fringe benefits and other allowances
In respect of 2015.
In accordance with the requirements of Accounting Standards, remuneration includes a proportion of the fair value of equity
compensation granted or outstanding during the year (i.e. options granted under LTIP that remained unvested as at 31 December 2015).
The fair value of equity instruments is determined at the grant date and is progressively allocated over the vesting period. The amount
included as remuneration is not necessarily related to or indicative of the benefit (if any) that senior executives may ultimately realise
should the equity instruments vest. The fair value of the options at the date of their grant has been determined in accordance with
AASB 2 Share-based Payments. All options granted under the LTIP are equity settled.
Ceased as Chief Executive Officer on 1 October 2015.
Resigned as Chairman on 1 October 2015.
Resigned as Non-Executive Director on 1 October 2015.
Ceased as General Manager - Head of Commercial, Strategy & Corporate Development on 1 August 2015.
Appointed as Non-Executive Director on 1 October 2015.
Appointed as Independent Chairman on 1 October 2015.
Became a KMP as of 1 August 2015, upon the cessation of employment of C McFadden.
35
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
12.
Remuneration report – audited (continued)
Key management personnel of the Group and other executives of the Company and the Group
Short - term
Cash
Salary and
fees
$
Non-
Monetary
Benefits
(1)
$
STI
cash
bonus
(2)
$
Post
employ-
ment
Share -
based
payments
Super-
annuation
$
Termin-
ation
benefits
$
LTI (3)
$
Total
Remun-
eration
$
Proportion
of remun-
eration
comprising
options
%
2014
Name
2014
Non-executive Directors
AJ Manini
OL Hegarty
C Wiggill
A Gray 8
R Morgan 9
T Sitdekov 9
B Jamieson 6
B Gray 5
Sub total
109,450
75,000
76,056
57,074
56,250
58,741
25,962
7,247
465,780
Other key management
personnel
C Parry 4
334,663
P Balka
D Kurochkin 7
C McFadden
D Forsyth
Sub total
333,412
160,182
256,828
127,162
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,902
-
-
-
-
82,500
57,000
26,300
47,850
26,700
-
7,031
7,125
5,373
-
-
2,401
670
22,600
25,000
26,140
-
23,313
11,876
1,212,247
8,902
240,350
86,329
Total key management
personnel
1,678,027
8,902
240,350
108,929
69.4%
64.0%
20.6%
28.4%
30.6%
29.6%
58.0%
0.0%
22.4%
17.4%
0.0%
6.5%
31.8%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
248,429
146,021
21,567
24,740
24,740
24,740
39,176
-
357,879
228,052
104,748
87,187
80,990
83,481
67,539
7,917
529,413
1,017,793
130,353
88,010
-
22,798
77,407
581,418
504,562
186,482
350,789
243,145
318,568
1,866,396
847,981
2,884,189
1.
2.
3.
4.
5.
6.
7.
8.
9.
Includes the value of fringe benefits and other allowances
Paid in February 2015 in respect of 2014.
In accordance with the requirements of Accounting Standards, remuneration includes a proportion of the fair value of equity
compensation granted or outstanding during the year (i.e. options granted under LTIP that remained unvested as at 31 December 2014).
The fair value of equity instruments is determined at the grant date and is progressively allocated over the vesting period. The amount
included as remuneration is not necessarily related to or indicative of the benefit (if any) that senior executives may ultimately realise
should the equity instruments vest. The fair value of the options at the date of their grant has been determined in accordance with AASB
2 Share-based Payments. All options granted under the LTIP are equity settled.
Resigned as Managing Director on 5 May 2014. Mr Parry remains as Chief Executive Officer of the Company
Resigned as Non-Executive Director on 28 March 2014.
Resigned as Independent Non-Executive Director on 5 May 2014.
Appointed as Chief Financial Officer on 21 July 2014.
Appointed as Non-Executive Director on 28 March 2014.
Appointed as Non-Executive Director on 1 April 2014.
36
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
12.
Remuneration report – audited (continued)
(i)
Analysis of performance related elements of remuneration
The following table shows the relative proportions of remuneration packages of the Executive Directors and KMP during the year
ended 31 December 2015, that are linked to performance and those that are fixed. The STI and LTI components of each of the
Senior Executive’s remuneration are contingent upon the achievement of the performance criteria.
2015
Name
2015
Other key management personnel
Peter Balka, Interim CEO
(appointed as Interim CEO 1 October 2015)
2014)
Denis Kurochin
Scott Southwood
David Forsyth
Craig Parry
(ceased as CEO 1 October 2015)
Chris McFadden
(ceased as General Manager - Head of
Commercial, Strategy & Corporate
Development 1 August 2015)
Development
2014
Other key management personnel
Commercial, Strategy & Corporate
Craig Parry, CEO
Development CEO 1 October 2015)
(resigned as MD 5 May 2014)
Peter Balka
Denis Kurochkin
Chris McFadden
David Forsyth
Fixed Annual
Remuneration
(including
superannuation
contributions)
%
At Risk - STI
as percentage of
Total
Remuneration 1
%
At Risk - LTI
as percentage of
Total
Remuneration 2
%
At Risk - Total
as percentage of
Total
Remuneration 2
%
68.16
84.58
88.28
61.26
87.38
87.62
63.39
71.26
85.90
79.86
57.18
0.00
00.0
0.00
0.00
0.00
0.00
14.19
11.30
14.10
13.64
10.98
31.84
15.42
11.72
38.74
12.62
12.38
22.42
17.44
0.00
6.50
31.84
31.84
15.42
11.72
38.74
12.62
12.38
36.61
28.74
14.10
20.14
42.82
Note 1 Paid in February 2015 in respect of FY14.
Note 2 Since the LTI is provided exclusively by way of options, the percentages disclosed also reflect the value of remuneration
consisting of options, based on the value of options expensed during the year.
The Options Scheme prohibits executives from entering into arrangements to protect the value of unvested LTI Plan awards. The
prohibition includes entering into contracts to hedge their exposure to options awarded as part of their remuneration package.
37
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
12.
Remuneration report – audited (continued)
(j)
Analysis of bonuses included in remuneration
Details of the vesting profile of short-term incentive (STI) cash bonuses awarded as remuneration to each Executive Director of the
Company, and the key management personnel of the Company are set out in the following table.
Short-term incentive bonuses
Included in
remuneration
$ (A)
Vested in year
%
Forfeited in year
% (B)
2015
Executives
Executive Director
P Balka
D Kurochkin
S Southwood
D Forsyth
C Parry
C McFadden
2014
Executives
Executive Director
C Parry
P Balka
D Kurochkin
C McFadden
D Forsyth
-
-
N/A
-
-
-
82,500
57,000
26,300
47,850
26,700
-
-
N/A
-
-
-
33%
38%
37%
36%
37%
100%
100%
N/A
100%
100%
100%
67%
62%
63%
64%
63%
A
B
Amounts included in remuneration for the financial year represent the amount that vested in the financial year based on
the achievement of personal goals and the satisfaction of specified performance criteria. No amounts vest in future
financial years in respect of the STI bonus scheme for the 2015 financial year.
The amounts forfeited are due to the performance or service criteria not being met in relation to the current financial year.
Due to prevailing market conditions, the Company did not award any bonuses to senior executives in respect of the 2015 financial
year.
38
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
12.
Remuneration report – audited (continued)
(k)
Share Options granted as remuneration
Details on options over ordinary shares in the Company that were granted as compensation for no consideration to each key
management person, during the reporting period and details on options that vested during the reporting period were as follows:
Number of
options
granted
during year
Fair value
of option at
grant date
$
Exercise
price per
option
$
Vesting
date
start
Grant date
Vesting date
finish
Expiry
date
Option
vesting
performance
hurdle
$
2015
Directors
C Wiggill
C Wiggill
O Hegarty
O Hegarty
A Gray
R Morgan
T Sitdekov
A Manini
A Manini
Executives
P Balka
P Balka
P Balka
D Kurochkin
D Kurochkin
D Kurochkin
S Southwood
S Southwood
D Forsyth
D Forsyth
D Forsyth
C Parry
C Parry
C Parry
C McFadden
C McFadden
C McFadden
2014
Directors
A Gray
R Morgan
T Sitdekov
Executives
C Parry
C Parry
P Balka
P Balka
C McFadden
C McFadden
D Forsyth
D Forsyth
1,000,000
500,000
1,000,000
500,000
500,000
500,000
500,000
1,000,000
500,000
1,051,500
1,051,500
422,222
1,000,000
1,000,000
194,815
750,000
750,000
382,000
382,000
197,778
1,117,500
1,117,500
611,111
700,500
700,500
354,444
1,000,000
1,000,000
1,000,000
1,364,500
1,364,500
1,291,000
1,291,000
577,000
577,000
541,000
541,000
11/06/2015
11/06/2015
11/06/2015
11/06/2015
11/06/2015
11/06/2015
11/06/2015
11/06/2015
11/06/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
17/04/2015
4/06/14
4/06/14
4/06/14
19/12/2014
19/12/2014
19/12/2014
19/12/2014
19/12/2014
19/12/2014
19/12/2014
19/12/2014
0.021
0.035
0.021
0.035
0.035
0.035
0.035
0.021
0.035
0.049
0.061
0.013
0.049
0.061
0.013
0.049
0.061
0.049
0.061
0.013
0.049
0.061
0.013
0.049
0.061
0.013
0.043
0.043
0.043
0.030
0.036
0.030
0.036
0.030
0.036
0.030
0.036
0.500
0.230
0.500
0.230
0.230
0.230
0.230
0.500
0.230
0.2300
0.1700
0.0000
0.2300
0.1700
0.0000
0.2300
0.1700
0.2300
0.1700
0.0000
0.2300
0.1700
0.0000
0.2300
0.1700
0.0000
0.500
0.500
0.500
0.2300
0.1700
0.2300
0.1700
0.2300
0.1700
0.2300
0.1700
11/06/2015 11/06/2016 11/06/2020
11/06/2015 11/06/2017 11/06/2020
11/06/2015 11/06/2016 11/06/2020
11/06/2015 11/06/2017 11/06/2020
11/06/2015 11/06/2017 11/06/2020
11/06/2015 11/06/2017 11/06/2020
11/06/2015 11/06/2017 11/06/2020
11/06/2015 11/06/2016 11/06/2020
11/06/2015 11/06/2017 11/06/2020
17/04/2015 17/04/2016 17/04/2020
17/04/2015 17/04/2017 17/04/2020
17/04/2015 17/05/2015 17/05/2015
17/04/2015 17/04/2016 17/04/2020
17/04/2015 17/04/2017 17/04/2020
17/04/2015 17/05/2015 17/05/2015
17/04/2015 17/04/2016 17/04/2020
17/04/2015 17/04/2017 17/04/2020
17/04/2015 17/04/2016 17/04/2020
17/04/2015 17/04/2017 17/04/2020
17/04/2015 17/05/2015 17/05/2015
17/04/2015 17/04/2016 17/04/2020
17/04/2015 17/04/2017 17/04/2020
17/04/2015 17/05/2015 17/05/2015
17/04/2015 17/04/2016 17/04/2020
17/04/2015 17/04/2017 17/04/2020
17/04/2015 17/05/2015 17/05/2015
4/06/14
4/06/14
4/06/14
4/06/15
4/06/15
4/06/15
4/06/2019
4/06/2019
4/06/2019
19/12/2014 19/12/2015 28/02/2019
19/12/2014 28/02/2016 28/02/2019
19/12/2014 19/12/2015 28/02/2019
19/12/2014 28/02/2016 28/02/2019
19/12/2014 19/12/2015 28/02/2019
19/12/2014 28/02/2016 28/02/2019
19/12/2014 19/12/2015 28/02/2019
19/12/2014 28/02/2016 28/02/2019
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
39
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
12.
Remuneration report – audited (continued)
These share options have been fair valued at the grant date using an independent valuation firm.
It is a vesting condition that the holder remains an employee or director at the time of vesting.
Further details of the Option Plan are included in Note 27.
2,084,074 options granted as part of the STI remuneration were exercised during the reporting period.
Options over ordinary shares in the Company vested during the reporting period as follows:
Number
of options
vested in
year
Grant date
Fair value
of option
at grant
date
$
Exercise
price per
option
$
Vesting
date
start
Vesting
date
finish
Expiry
date
Option
vesting
performance
hurdle
$
Options
vested
in year
%
2015
Directors
O Hegarty
1,000,000
03/05/13
0.065
0.600
03/05/13
03/05/15
03/05/18
0.000
R Morgan
1,000,000
04/06/14
0.043
0.500
04/06/14
04/06/15
04/06/19
0.000
T Sitdekov
1,000,000
04/06/14
0.043
0.500
04/06/14
04/06/15
04/06/19
0.000
A Manini
1,500,000
03/05/13
0.065
0.600
03/05/13
03/05/15
03/05/18
0.000
A Gray
1,000,000
04/06/14
0.043
0.500
04/06/14
04/06/15
04/06/19
0.000
Executives
P Balka
718,000
1,291,000
422,222
15/02/13
19/12/14
17/04/15
0.115
0.030
0.130
0.340
0.230
0.000
15/02/13
19/12/14
17/04/15
15/02/15
19/12/15
17/05/15
15/02/18
28/02/19
17/05/15
0.000
0.000
0.000
D Kurochkin
194,815
17/04/15
0.130
0.000
17/04/15
17/05/15
17/05/15
0.000
D Forsyth
541,000
197,778
19/12/14
17/04/15
0.030
0.130
0.230
0.000
19/12/14
17/04/15
19/12/15
17/05/15
28/02/19
17/05/15
0.000
0.000
C Parry
611,111
17/04/15
0.130
0.000
17/04/15
17/05/15
17/05/15
0.000
2014
Directors
C Wiggill
1,000,000
03/05/13
0.064
0.500
03/05/13
03/05/14
03/05/18
0.000
A Manini
1,500,000
28/03/12
0.127
0.750
28/03/12
28/03/14
28/03/17
0.000
O Hegarty
1,000,000
28/03/12
0.127
0.750
28/03/12
28/03/14
28/03/17
0.000
Executives
C Parry
2,000,000
2,000,000
12/11/12
12/11/12
0.038
0.032
0.750
1.000
12/11/12
12/11/12
12/11/14
12/11/14
12/11/17
12/11/17
0.000
0.000
P Balka
562,000
22/02/12
C McFadden
128,000
22/02/12
D Forsyth
103,000
22/02/12
0.16
0.16
0.16
0.500
22/02/12
22/02/14
22/02/17
0.000
0.500
22/02/12
22/02/14
22/02/17
0.000
0.500
22/02/12
22/02/14
22/02/17
0.000
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
40
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
12.
Remuneration report – audited (continued)
(l)
Analysis of Movement in Share Options
The movement during the reporting period, by value, of options over ordinary shares in the Company held by each key management
person.
Value of options
granted during year
$
Value of options
exercised in year
$
Value of options
lapsed in year
$
Remuneration
consisting of options
for the year
%
2015
Directors
C Wiggill
O Hegarty
R Morgan
T Sitdekov
A Manini
A Gray
38,500
38,500
17,500
17,500
38,500
17,500
Other Key Management Personnel
P Balka
D Kurochkin
S Southwood
D Forsyth
C Parry
C McFadden
170,554
135,326
82,500
67,731
202,369
123,133
2014
Directors
A Manini
O Hegarty
C Wiggill
A Gray
R Morgan
T Sitdekov
B Jamieson
Other Key Management Personnel
C Parry
P Balka
D Kurochkin
C McFadden
D Forsyth
-
-
-
43.000
43,000
43,000
-
90,057
85,206
-
38,082
35,706
-
-
-
-
-
-
54,889
25,326
-
25,711
79,444
46,078
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
304,546
47,866
-
-
-
-
492,222
113,997
1,084,067
601,533
-
-
-
-
-
409,827
228,060
-
132,207
409,827
25.3
33.8
21.6
21.6
31.9
22.1
28.5
23.3
20.6
34.8
27.6
27.9
69.4
64.0
20.6
28.4
30.6
29.6
58.0
22.4
17.4
-
6.5
31.8
2,084,074 shares were issued as a result of the exercise of options (not by all executives) during the year ended 31 December 2015.
For details on the valuation of options, including models and assumptions used, refer to Note 27.
41
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
12.
Remuneration report – audited (continued)
(m) Analysis of options over equity instruments granted as compensation
Option vesting profiles over the Company’s ordinary shares granted as remuneration to each KMP and executive are detailed below.
Options granted
Number
Grant date
Vested in year
Forfeited/ Lapsed
in year
Vesting date
start
Vesting date
finish
Directors
C Wiggill
O Hegarty
R Morgan
T Sitdekov
A Manini
A Gray
Executives
P Balka
D Kurochkin
S Southwood
D Forsyth
C Parry
C McFadden
1,000,000
1,000,000
500,000
1,000,000
1,000,000
1,000,000
500,000
1,000,000
500,000
1,000,000
500,000
1,500,000
1,500,000
1,000,000
500,000
1,000,000
500,000
718,000
562,000
1,291,000
1,291,000
422,222
1,051,500
1,051,500
194,815
1,000,000
1,000,000
750,000
750,000
103,000
143,000
541,000
541,000
197,778
382,000
382,000
1,364,500
1,364,500
2,000,000
2,000,000
2,000,000
2,000,000
611,111
1,117,500
1,117,500
128,000
577,000
577,000
354,444
700,500
700,500
03/05/13
11/06/15
11/06/15
28/03/12
03/05/13
11/06/15
11/06/15
04/06/14
11/06/15
04/06/14
11/06/15
28/03/12
3/05/13
11/06/15
11/06/15
04/06/14
11/06/15
15/02/13
22/02/12
19/12/14
19/12/14
17/04/15
17/04/15
17/04/15
17/04/15
17/04/15
17/04/15
17/04/15
17/04/15
22/02/12
15/02/13
19/12/14
19/12/14
17/04/15
17/04/15
17/04/15
19/12/14
19/12/14
12/11/12
12/11/12
12/11/12
12/11/12
17/04/15
17/04/15
17/04/15
22/02/12
19/12/14
19/12/14
17/04/15
17/04/15
17/04/15
-
-
-
-
1,000,000
-
-
1,000,000
-
1,000,000
-
-
1,500,000
-
-
1,000,000
-
718,000
-
1,291,000
-
422,222
-
-
194,815
-
-
-
-
-
143,000
541,000
-
197,778
-
-
-
-
-
-
-
-
611,111
-
-
-
-
-
354,444
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,500,000)
(1,500,000)
(1,000,000)
(500,000)
(1,000,000)
(500,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,364,500)
(1,364,500)
(2,000,000)
(2,000,000)
(2,000,000)
(2,000,000)
-
(1,117,500)
(1,117,500)
(128,000)
(577,000)
(577,000)
(354,444)
(700,500)
(700,500)
03/05/13
11/06/15
11/06/15
28/03/12
03/05/13
11/06/15
11/06/15
04/06/14
11/06/15
04/06/14
11/06/15
28/03/12
3/05/13
11/06/15
11/06/15
04/06/14
11/06/15
15/02/13
22/02/12
19/12/14
19/12/14
17/04/15
17/04/15
17/04/15
17/04/15
17/04/15
17/04/15
17/04/15
17/04/15
22/02/12
15/02/13
19/12/14
19/12/14
17/04/15
17/04/15
17/04/15
19/12/14
19/12/14
12/11/12
12/11/12
12/11/12
12/11/12
17/04/15
17/04/15
17/04/15
22/02/12
19/12/14
19/12/14
17/04/15
17/04/15
17/04/15
03/05/14
11/06/16
11/06/17
28/03/14
03/05/15
11/06/16
11/06/17
04/06/15
11/06/17
04/06/15
11/06/17
28/03/14
3/05/15
11/06/16
11/06/17
04/06/15
11/06/17
15/02/15
22/02/14
19/12/15
28/02/16
17/04/15
17/05/16
17/04/17
17/05/15
17/04/16
17/04/17
17/04/16
17/04/17
22/02/14
15/02/15
19/12/15
28/02/16
17/05/15
17/04/16
17/04/17
19/12/15
19/12/16
12/11/13
12/11/13
12/11/14
12/11/14
17/05/15
17/04/16
17/04/17
22/02/14
19/12/15
19/12/16
17/05/15
17/04/16
17/04/17
This marks the end of the Remuneration Report.
42
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
13.
Corporate Governance Statement
The Board of Directors are responsible for the Company’s corporate governance. The Board guides and monitors the business
affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable. The Company
has adopted systems of control and accountability as the basis for administering corporate governance. The Board is committed to
administering the policies and procedures with openness and integrity, pursuing the highest standards of corporate governance
commensurate with the Company’s needs. To the extent that they are appropriate and applicable the Company has adopted the
Principles of Good Corporate Governance Recommendations as published by the ASX Corporate Governance Council. As the
Company’s activities develop in size, nature and scope, the Board will consider on an ongoing basis its corporate governance
structures and whether they are sufficient given the Company’s size and nature of operations.
The Company and its controlled entities together are referred to as the Group in this statement.
This Corporate Governance Statement is current as at 22 March 2016 and has been approved by the Board. A description of the
Group’s corporate governance practices are set out below. Where changes have occurred during 2015, the dates of these changes
are shown. These corporate governance practices have been in place since the Company was listed on the ASX on 29 August 2011.
Copies of the corporate governance documents mentioned in this statement are available on the Company’s website.
Principle 1: Lay solid foundations for management and oversight
Role of the Board
The Board’s primary role is the protection and enhancement of long-term shareholder value. To fulfil this role, the Board is
responsible for the overall corporate governance of the Group. The Board exercises its powers and performs its obligations in
accordance with the provisions of the Company’s constitution and the Corporations Act 2001.
The Board is responsible for:
charting the direction, policies, strategies and financial objectives of the Company and ensuring appropriate resources are
available;
monitoring the implementation of these policies and strategies and the achievement of financial objectives;
monitoring compliance with control and accountability systems, regulatory requirements and ethical standards;
ensuring the preparation of accurate financial reports and statements;
reporting to shareholders and the investment community on the performance and state of the Company; and
reviewing on a regular and continuing basis:
o
o
executive succession planning (in particular the CEO); and
executive development activities.
Day to day management of the Group’s affairs and the implementation of the corporate strategy and policy initiatives are formally
delegated by the Board to the CEO and senior executives as set out in the Group’s Delegation Policy, which is available on the
Company’s website. These delegations of authority are reviewed on a regular basis.
Board committees
The Board has established three committees to assist in the execution of its duties and to allow detailed consideration of complex
issues. Current committees of the Board are the Nomination and Remuneration Committee, the Audit, Risk and Compliance
Committee and the Development and Finance Committee. The committee structures and memberships are reviewed regularly.
Each committee has its own written charter setting out its role and responsibilities, composition, structure, and meeting requirements.
These charters are subject to regular review and are available on the Company website. All matters determined by committees are
submitted to the full Board as recommendations for Board decisions.
Minutes of committee meetings are tabled at subsequent board meetings. Additional requirements for specific reporting by the
committees to the Board are addressed in the charter of the individual committee.
Management Performance Evaluation
The Board, in conjunction with the Nomination and Remuneration Committee, is responsible for approving the performance
objectives and measures for the CEO and other senior executives and providing input into the evaluation of performance against
them. Performance evaluations of senior executives and management were completed for the 2015 financial year. The Company
did not award any bonuses to senior executives in respect of the 2015 financial year.
43
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
13.
Corporate Governance Statement (continued)
Principle 2: Structure of the Board
Composition of the Board
The names of Company’s Directors in office at the date of this report, specifying which are independent, are set out in the Directors’
report. At the date of this report, the Board consists of four Non-executive Directors and one Non-executive Chairman. The
composition of the Board is determined in accordance with the following principles outlined in the Board Charter:
a minimum of three Directors;
the intention that as the Group develops the majority of Directors will be independent; and
the requirement for the Board is to undertake an annual performance evaluation and consider the appropriate mix of skills
required by the Board to maximise its effectiveness and its contribution to the Group.
The Board considers the mix of skills and diversity of Board members when assessing the composition of the Board.
At the date of this report, the Board does not meet the Good Corporate Governance Recommendations (“Recommendations”) in
that the majority of Directors should be independent. The Group’s Chairman is independent. Given the developmental nature of
the Company and the experience of the Directors, the Board considers the composition of the Board, with an independent Chairman,
effective 1 October 2015, to be appropriate at this time. In due course it is proposed to increase the number of independent Directors
on the Board.
Director Independence
The Board has adopted specific principles in relation to Directors’ independence. These state that when determining independence,
a Director must be a non-executive and the Board should consider whether the Director:
is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder
of the Company;
is or has been employed in an executive capacity by the Company of any other Group member, within three years before
commencing to serve on the Board;
within the last three years has been a principal of a material professional advisor or a material consultant to the Company or
any other Group member, or an employee materially associated with the service provided;
is a material supplier or customer of the Company or any other Group member, or an officer of or otherwise associated
directly or indirectly with a material supplier or customer; and
has a material contractual relationship with the Company or other Group member other than a Director of the Company.
Family ties and cross-directorships may be relevant in considering interests and relationships which may compromise independence,
and should be disclosed by Directors to the Board.
The Board regularly reviews the independence of each Director in light of interests disclosed and will disclose any change to the
ASX, as required by the ASX Listing Rules.
Independent Professional Advice
All Directors may obtain independent professional advice, at the Company’s cost, in carrying out their duties and responsibilities.
Prior approval from the Chairman or the Board is required before seeking independent professional advice.
Chairman
The Board elects one of its Non-executive Directors to be the Chairman. The Chairman is responsible for leading the Board,
ensuring Directors are properly briefed in all matters relevant to their role and responsibilities, facilitating Board discussions and
managing the Board’s relationship with the Company’s senior executives. The Recommendations note that the Chairman should
be an independent Director. The current Chairman, Mr Craig Wiggill, who was elected Chairman on 1 October 2015, satisfies the
independence recommendation. The role of the Chairman is separate from that of the Chief Executive Officer. The CEO is
responsible for implementing Group strategies and policies.
44
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
13.
Corporate Governance Statement (continued)
Orientation Program
The orientation program provided to new Directors and senior executives enables them to actively participate in Board decision
making as soon as possible. It ensures that they have a full understanding of the Group’s financial position, strategies operations,
culture, values and risk management policies. Directors have the opportunity to visit the Group’s business operations and meet with
management to gain a better understanding of the Group’s operations. The Group also supports Directors to undertake continuing
education relevant to the discharge of their obligations as Directors of the Group.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee consists of two Non-executive Directors and the Chairman. The Committee has a
documented charter, approved by the Board which is available on the Company’s website. Details of the qualifications of members
of the Nomination and Remuneration Committee and their attendance at meetings of the Committee are set out in the Directors’
Report. The Chairman of the Committee is Mr Owen Hegarty, a Non-executive Director.
The Nomination and Remuneration Committee operates in accordance with its charter, and the main responsibilities of the
nomination activities of the Committee are to:
review and make recommendations to the Board relating to the remuneration of the Directors and the CEO;
assess the necessary and desirable competencies of Board members;
review Board succession planning;
make recommendations to the Board regarding the appointment and re-election of Directors and the CEO;
oversee succession planning, selection and appointment practices for management and employees of the Group;
develop a process for the evaluation of the performance of the Board, its committees and Directors; and
consider strategies to address Board diversity and the Company’s performance in respect of the Company’s Diversity Policy.
The Committee is also responsible for considering and articulating the time needed to fulfil the role of Chairman and Non-executive
Directors.
A performance evaluation of the Board, its committees and the Directors was completed in 2015. The outcomes of the evaluation
were discussed and considered by all the Directors and specific performance goals agreed upon for the coming year.
Development and Finance Committee
The Development and Finance Committee consists of not less than three non-executive directors appointed by Board. The Chairman
will be a member of the Committee as appointed by the Board. The purpose of the Committee is to review and make
recommendations on strategy, business development, budgeting, finance, sales agreements and TIG member agreements with
substantial shareholders.
Decision making powers are retained by the Board.
The role of the Committee is to review and make recommendations to the Board in respect of matters that are material to the TIG
Group as a whole in relation to:
strategy and business development (including any agreements or arrangements with any Government Agency or third party
in relation to the TIG Group and its development of currently planned and potential future projects);
operational and capital project budgeting and finance;
any agreements or arrangements relating to coal marketing and sales (including off-take and related finance arrangements);
any agreements by any member of the TIG Group with RDIF, BVMHL, TRM, Bruce Gray or any of their respective
affiliates; and
any other matters to be assigned by the TIG Board for review.
45
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
13.
Corporate Governance Statement (continued)
The responsibilities of the Committee are as follows:
review the Company’s strategy and make recommendations to the Board regarding changes, having regard to such factors
as pricing, costs, competition, structure, markets, TIG strengths etc.;
review business development opportunities including agreements or arrangements with any Government Agency or third
party and make recommendations on these development opportunities;
review and make recommendations on operational and capital project budgeting;
review and make recommendations on proposed financing for the TIG Group;
review any agreements or arrangements relating to coal marketing and sales and make recommendations to the Board. These
may include off-take and related finance arrangements;
review agreements by members of the TIG Group with substantial shareholders RDIF, BVMHL, TRM, Bruce Gray or their
respective affiliates and make recommendations to the Board; and
review other matters as assigned by the TIG Board from time to time and make recommendations.
Principle 3: Promote ethical and responsible decision making
Code of Conduct
The Company has developed a Code of Conduct which has been endorsed by the Board and applies to all Directors, employees and
contractors. The Code of Conduct is regularly reviewed and updated as necessary to ensure it reflects the highest standards of
behaviour, professionalism and business ethics necessary to maintain confidence in the Group’s integrity.
In summary the Code of Conduct requires that at all times all Group personnel act with utmost integrity, objectivity and in
compliance with the letter and the spirit of the law and Group policies.
Whistleblowers’ Policy
The Company’s Whistleblowers’ Policy encourages employees and contractors to report concerns in relation to illegal, unethical or
improper conduct without fear of reprisal if it is reported in good faith. The Company commits to absolute confidentiality and
fairness in all matters raised.
Securities Trading
Directors and employees are allowed to purchase and sell shares in the Group provided they comply with the provisions of the
Group’s Securities Trading Policy. The trading policy prohibits Directors and employees and their associates from trading in Group
securities when they are in possession of price sensitive information which is not publicly available or during “blackout” periods.
Directors and restricted employees must seek prior written approval before undertaking any trading in Company securities. The
Directors and employees must also advise the Company Secretary if they intend to enter into, or have entered into, a margin lending
or other security arrangement affecting Company securities. The Company Secretary will advise the ASX of any transactions
conducted by Directors in relation to the Company securities. A register of interests is maintained which record security holdings
in the Company by Directors and employees. . The Securities Trading Policy was updated on 10 September 2015.
Workplace Diversity
The Board is committed to having an appropriate blend of diversity on the Board, and in the Group’s senior executive positions.
The Group values diversity and recognises the benefits it can bring to the Group’s ability to achieve its goals. The Group has
adopted a diversity policy which outlines the Group’s diversity objectives in relation to gender, age, cultural background and
ethnicity. The Group has not established specific measurable gender and diversity objectives due to the start-up nature of its situation
in the exploration and development of coking coal projects. However, the Group remains committed to recruiting the best candidates
for roles at all levels within the Group at every operation. As at 31 December 2015, women comprised 35% (2014: 35%) of
employees throughout the Group. There are currently no female members of the Board.
Copies of the Code of Conduct, the Whistleblowers’ Policy, the Diversity Policy and the Securities Trading Policy are available on
the Company’s website.
46
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
13.
Corporate Governance Statement (continued)
Principle 4: Safeguard integrity in financial reporting
Audit, Risk and Compliance Committee
The Audit, Risk and Compliance Committee currently consists of one Non-executive Director and the Chairman, effective from 1
October 2015. The Chairman of the Committee is a Non-executive Director. The membership of the Committee does not fully
meet the Good Corporate Governance Recommendations (“Recommendations”) in that the Committee does not consist of a majority
of independent Directors. Given the size of the Group and the Board, and the start-up nature and straight forward structure of the
Group, the Directors consider that the Audit, Risk and Compliance Committee is of sufficient size, independence and technical
expertise to discharge its mandate effectively.
All members of the Committee are financially literate and have an appropriate understanding of the mining industry. The Chairman,
Mr Owen Hegarty has relevant qualifications with a Bachelor of Economics (Hons) and experience by virtue of being a director on
other ASX listed companies.
The Audit, Risk and Compliance Committee has a documented charter, updated on 10 December 2015 and approved by the Board.
All members should be Non-executive Directors, and the Chairman should be independent. Details of the qualifications of members
of the Audit, Risk and Compliance Committee and their attendance at meetings of the Committee are set out in the Directors’ report.
The Charter is available on the Company website and includes requirements for the Committee to consider the selection and
appointment of the external auditor, and for the rotation of external audit engagement partners.
The main responsibilities of the Committee are to:
review, assess and make recommendations to the Board on annual and half-year financial reports and all other financial
information released to the market;
assist the Board in reviewing the effectiveness of the Group’s internal control environment covering;
effectiveness and efficiency of operations;
reliability of financial reporting; and
compliance with applicable laws and regulations.
o
o
o
oversee the effective operation of the risk management framework;
recommend to the Board the appointment, removal and remuneration of the external auditors, and review the terms of their
engagement, the scope and quality of the audit and assess the performance of the auditor;
consider the independence and competence of the external auditor on an ongoing basis; and
review and approve the level of non-audit services provided by the external auditors and ensure that they do not adversely
impact on auditor independence.
In fulfilling its responsibilities, the Audit, Risk and Compliance Committee:
receives regular reports from management and the external auditor;
meets with the external auditor at least twice a year without management being present, or more frequently if necessary;
reviews the processes in place to support the CEO and CFO certification to the Board;
reviews any significant disagreements between the auditors and management, irrespective of whether any have been
resolved; and
provides the external auditors with a clear line of direct communication at any point in time to either the Chair of the Audit,
Risk and Compliance Committee or the Chairman of the Board.
The Committee has authority, within the scope of its responsibilities, to seek any information it requires from any employee or
external party.
CEO and CFO certification
The Chief Executive Officer and the Chief Financial Officer have declared in writing to the Board in accordance with Section 295
of the Corporations Act 2001 that the financial records of the Company for the financial year have been properly maintained, and
that the Company’s financial reports for the financial year ended 31 December 2015 comply with accounting standards and present
a true and fair view of the Company’s financial condition and operational results. The statement is required both annually and semi-
annually, effective from 10 September 2015.
The Board has received and is satisfied with certification provided by the CEO and CFO that the Group’s risk management and
internal control systems are sound and operated effectively in all material aspects in relation to financial reporting risks for the
financial year ended 31 December 2015.
47
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
13.
Corporate Governance Statement (continued)
External auditor
The role of the external auditor is to provide an independent opinion that the financial reports are true and fair and comply with
applicable accounting standards.
The Company and the Committee policy is to appoint external auditors who clearly demonstrate quality and independence. KPMG
has provided an independence declaration to the Board for the financial year ended 31 December 2015. The Committee has
considered the nature of the non–audit and assurance related services provided by the external auditor during the year and determined
that the services provided, and the amount paid for those services, are compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The Committee has examined detailed material provided by the external auditor
and by management and has satisfied itself that the standards of auditor independence and associated issues have been fully complied
with.
The roles of lead partner and audit review partner are rotated every five years.
The external auditor will attend the annual general meeting and will be available to answer shareholder questions about the conduct
of the audit and the preparation and content of the audit report.
Principle 5: Make timely and balanced disclosure
The Company has established written policies and procedures on information disclosure that focus on continuous disclosure of any
information concerning the Group that a reasonable person would expect to have a material effect on the price of the Company’s
securities. All information disclosed to the ASX is posted on the Company’s website as soon as it is disclosed to the ASX.
The Company Secretary is responsible for communications with the ASX and compliance with the continuous disclosure
requirements in the ASX Listing Rules. The Company also has in place a policy to monitor media sources. This role also oversees
and coordinates information disclosure to shareholders, media and to the general public.
The Company’s continuous disclosure policy is available on the Company’s website.
Principle 6: Shareholder communications
The Company places a high priority on communications with shareholders and aims to provide all shareholders with comprehensive,
timely and equal access to balanced information about Group activities so that they can make informed investment decisions and
provide undivided support to the Group. Principal communications to investors are through the provision of the annual report,
financial statements, and market announcements.
The Company website enables users to provide feedback and has an option for shareholders to register their email address for direct
email updates on Group matters.
The Company’s communications policy is available on the Company’s website.
Principle 7: Recognise and manage risk
The Board is responsible for satisfying itself that management has developed and implemented a sound system for risk management
and internal control. The Board regards managing the risks that affect the Group’s businesses as a fundamental activity, as they
influence the Group’s performance, reputation and success. Detailed work on the management of risk is delegated to the Audit,
Risk and Compliance Committee and reviewed by the Board. The Committee recommends any actions it deems necessary to the
Board for its consideration.
The Committee is responsible for ensuring that there are adequate policies in relation to risk management, compliance and internal
control systems. The Committee monitors the Company’s risk management by overseeing management’s actions in the evaluation,
management, monitoring and reporting of material operational, corporate, compliance and strategic risks. The Board and the
Committee receive regular reports from management on the effectiveness of the Group’s management of material business risks.
The Company has adopted a Risk Management Policy which is available on the Company’s website.
In relation to risk management the Committee regularly reviews the adequacy and effectiveness of the Company’s risk management
framework including assessment of any material exposure to economic, environmental and social sustainability risks, how it
manages or intends to manage and plans for managing each identified risk. It also reviews the processes it employs for evaluating
and continually improving the effectiveness of its risk management and internal control processes.
48
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
13.
Corporate Governance Statement (continued)
Principle 8: Remunerate fairly and responsibly
The Nomination and Remuneration Committee operates in accordance with its charter which is available on the Company website.
The Nomination and Remuneration Committee advises the Board on remuneration and incentive policies and practices generally,
and makes specific recommendations on remuneration packages and other terms of employment for executive Directors, other
senior executives and Non-executive Directors.
The Nomination and Remuneration Committee is chaired by a Non-executive Director and has three members as recommended,
however the Committee does not consist of a majority of independent Directors. Given the size of the Group and the Board, and
the start-up nature and straightforward structure of the Group, the Directors consider the impact of this to be minimal, and the current
structure to be sufficient.
The structure of the remuneration of Non-executive Directors is distinguished from that of executive Directors and senior executives,
however, Board members are entitled to options as set out in this Annual Report having regard to the size of the Company’s
management team and the minimal fees paid.
The Nomination and Remuneration Committee also assumes responsibility for overseeing succession planning.
Further information on Directors’ and executives’ remuneration, including principles used to determine remuneration, is set out in
the Remuneration Report which forms a part of the Directors’ report. Details of the qualifications of members of the Nomination
and Remuneration Committee and their attendance at meetings of the Committee are set out in the Directors’ report.
This marks the end of the Corporate Governance Statement.
49
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
14.
Indemnification and insurance of Officers
The Company provides insurance to cover legal liability and expenses for the Directors and Executive Officers of the Company.
The Directors and Officers Liability Insurance provides cover against all costs and expenses that may be incurred in defending civil
or criminal proceedings that fall within the scope the indemnity and that may be brought against the Officers in their capacity as
Officers. Disclosure of the nature of the liability cover and the amount of the premium is subject to a confidentiality clause under
the insurance policy.
The Company has entered into an agreement with the Directors and certain Officers to indemnify these individuals against any
claims and related expenses, which arise as a result of their work in their respective capacities.
The Company has not provided any insurance or indemnity for the auditor of the Company.
15.
Environmental Regulation and Performance
The Group operations are subject to significant environmental regulation in respect of its exploration activities. There have been
no reports of breaches of environmental regulations during the financial year to 31 December 2015, or to the date of this report.
16.
Audit and non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company are important. Details of the amounts paid or payable to KPMG, the Group’s auditor
for audit and non-audit services provided during the year are set out below.
The Board of Directors has considered the position and, in accordance with the advice received from the Audit, Risk and
Compliance Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of
independence imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the
auditor, as set out in Note 39, did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
all non-audit services have been reviewed by the Board to ensure they do not impact the impartiality and objectivity of the
auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 ‘Code of
Ethics for Professional Accountants’.
Details of the amounts paid to the auditor, KPMG, and its related practices for audit and non-audit services provided during the
year are set out below.
Audit services:
Audit and review of financial reports (KPMG Australia)
Audit and review of financial reports (Overseas KPMG firms)
Other auditors – Non-KPMG firms
Audit and review of financial reports
Services other than statutory audit
Other services
Taxation compliance and advisory services (KPMG Australia)
Taxation compliance services (Overseas KPMG firms)
Total Services Provided
31 December
2015
$
31 December
2014
$
210,000
77,809
287,809
-
287,809
50,796
2,242
53,038
340,847
233,047
81,696
314,743
12,609
327,352
29,116
15,081
44,197
371,549
50
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2015
17.
Proceedings on behalf of the Company
No person has applied for leave of any Court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings.
18.
Lead Auditor’s Independence Declaration
The lead auditor’s independence declaration is set out on page 112 and forms part of the Directors’ report for the year ended 31
December 2015.
This report is made in accordance with a resolution of the Directors
Dated at Melbourne this 22nd day of March 2016.
Signed in accordance with a resolution of the Directors:
__________________________________
Owen Hegarty
Director
51
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Consolidated statement of financial position
As at 31 December 2015
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Other current assets
Total current assets
Non-current assets
Other receivables
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
Current Liabilities
Trade and other payables
Lease liability
Employee benefits
Total current liabilities
Non-current liabilities
Lease liability
Deferred tax liabilities
Royalty agreement liability
Total non-current liabilities
Total liabilities
Net assets
Note
15
17
17
18
19
20
22
21
22
23
24
Equity
Share capital
Reserves
(Accumulated losses)
Total equity attributable to equity holders of the Company
25
26(a)
26(b)
Non-controlling interest
Total equity
31 December
2015
$’000
31 December
2014* As
restated
$’000
1 January
2014 *As
restated
$’000
7,074
1,428
578
857
9,937
717
2,909
-
3,626
20,465
3,541
4,432
667
29,105
1,160
14,232
141,120
156,512
3,749
1,602
3,964
492
9,807
-
6,627
127,073
133,700
13,563
185,617
143,507
410
2,296
154
2,860
1,722
-
-
1,722
848
6,273
1,131
8,252
2,563
22,441
37,261
62,265
4,582
70,517
8,981
115,100
151,185
32,009
(146,963)
36,231
(27,250)
8,981
151,185
31,103
(60,793)
121,495
(6,395)
115,100
3,747
-
1,224
4,971
-
20,628
19,994
40,622
45,593
97,914
94,416
35,671
(31,164)
98,923
(1,009)
97,914
The notes on pages 57 to 110 are an integral part of these consolidated financial statements.
*The comparative statement for the year ended 31 December 2014 and the opening balance at 1 January 2014 have been restated
to show the effects of the voluntary change in accounting policy. Refer to Note 7.
52
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Consolidated statement of comprehensive income
For the year ended 31 December 2015
Note
31 December
2015
$’000
31 December
2014* As
restated
$’000
Continuing operations
Other income
Operating activities
Share based payments
Exploration and evaluation expenses
Administrative expenses
Write-down of assets
Loss on sale of assets
Loss on investment
Gain / (loss) on revaluation of royalty agreement liability
Results from operating activities
Net foreign exchange gain/(loss)
Finance income
Net finance income
(Loss) before income tax
Income tax credit (expense)
(Loss) from continuing operations
Other comprehensive income
Items that may subsequently be reclassified to the income
statement
Foreign currency translation differences for foreign operations
Total comprehensive income for the period
Operating profit is attributable to:
Owners of the Company
Non-controlling interest
(Loss) for the period
Total comprehensive income is attributed to:
Owners of the Company
Non-controlling interest
Total comprehensive income for the period
(Loss) per share (cents per share)
basic (loss) per share (cents)
diluted (loss) per share (cents)
(Loss) per share (cents per share) – continuing operations
basic (loss) per share (cents)
diluted (loss) per share (cents)
9
27
10
12
24
11
11
13
14
14
14
14
71
(281)
(1,120)
(7,297)
(5,113)
(160,407)
(43)
-
40,468
(133,722)
1,850
3
1,853
-
13
(524)
(15,733)
(7,295)
-
-
(92)
(14,017)
(37,648)
1,980
35
2,015
(131,869)
(35,633)
23,899
(107,970)
577
(35,056)
731
(107,239)
(86,170)
(21,800)
(107,970)
(86,384)
(20,855)
(107,239)
(12.06)
(12.06)
(12.06)
(12.06)
(5,051)
(40,107)
(29,629)
(5,427)
(35,056)
(34,721)
(5,386)
(40,107)
(4.34)
(4.34)
(4.34)
(4.34)
The notes on pages 57 to 110 are an integral part of these consolidated financial statements.
*The comparative statement for the year ended 31 December 2014 has been restated to show the effects of the voluntary change
in accounting policy. Refer to Note 7.
53
Tigers Realm Coal Annual Report 2015 0
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T
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Consolidated statement of cash flows
For the year ended 31 December 2015
Cash flows from operating activities
Cash receipts from customers
Interest income
Cash paid to suppliers and employees
Exploration and evaluation expenditure
Income taxes paid
Net cash (used in) operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Security deposit
Acquisition of a subsidiary (net of cash acquired)
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Net cash from financing activities
Net movement in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period
Note
16
15
31 December
2015
$’000
31 December
2014* As
restated
$’000
71
3
(5,715)
(6,247)
-
(11,888)
(3,834)
896
-
(2,938)
-
-
-
(14,826)
20,465
1,435
7,074
13
35
(5,447)
(20,073)
(15)
(25,487)
(8,798)
(1,841)
(5,461)
(16,100)
60,973
(4,204)
56,769
15,182
3,749
1,534
20,465
The notes on pages 57 to 110 are an integral part of these consolidated financial statements.
*The comparative statement for the year ended 31 December 2014 has been restated to show the effects of the voluntary change
in accounting policy. Refer to Note 7.
56
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
1.
Reporting entity
Tigers Realm Coal Limited (the “Company” or “TIG”) is a company domiciled in Australia. The address of the Company’s
registered office is Level 7, 333 Collins St, Melbourne, Victoria, 3000. The consolidated financial statements of the Company as
at and for the year ended 31 December 2015 comprise the Company and its subsidiaries (together referred to as the “Group”). The
Group is a for-profit entity and primarily is involved in coal exploration and mining development.
2.
(a)
Basis of preparation
Statement of compliance
These consolidated financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations
Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRSs) adopted by the
International Accounting Standards Board (IASB).
The consolidated financial statements were authorised for issue by the Board of Directors on 22 March 2016.
(b)
Change in accounting policy
AASB 6 Exploration for and Evaluation of Mineral Resources allows to either capitalize or expense the exploration and evaluation
expenditure incurred by the Group.
The previous accounting policy was to capitalise and carry forward exploration and evaluation expenditure as an asset when rights
to tenure of the area of interest were current and costs were expected to be recouped or activities in the area of interest had not , at
the reporting date, reached a stage that permitted a reasonable assessment of the existence or otherwise of economically recoverable
reserves and active and significant operations in, or in relation to, the area of interest were continuing.
The Group has made a voluntary change to its accounting policy relating to exploration and evaluation expenditure. The new
accounting policy was adopted for the year ended 31 December 2015 with effect from 1 January 2015 and has been applied
retrospectively.
The new exploration and evaluation accounting policy is to charge exploration and evaluation expenditure against profit and loss
as incurred, except for expenditure incurred after a decision to proceed to development is made, in which case the expenditure is
capitalised as an asset. The impact on the statement of cash flows is a movement from investing activities to a movement in
operating activities.
The Group is of the view that the change in policy will result in the financial report providing more relevant and no less reliable
information because capitalisation of costs will only begin once a decision to proceed with development has been made.
Details in relation to the impact of this change in accounting policy on comparative financial information are disclosed in Note 7.
(c)
Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for certain financial assets and
liabilities which are carried at fair value and share based payment expenses which are recognised at fair value. Cost is based on
the fair values of the consideration given in exchange for assets.
(d)
Going concern basis of accounting
The consolidated financial statements have been prepared on a going concern basis, which assumes continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business without the intention or
necessity to liquidate the Group or cease operations.
For the year ended 31 December 2015 the Group had a net loss of $107.970 million (31 December 2014: loss $35.056 million) and
had net equity of $8.981 million (31 December 2014: $115.100 million). The net loss includes the impairment of assets of $160.407
million and the gain of $40.468 million (2014: loss of $14.017 million) on the revaluation of the Royalty agreement liability which
have no cash flow impact on the Group.
As at 31 December 2015 the Group had cash and cash equivalents of $7.074 million (31 December 2014: $20.465 million) and net
current assets of $7.077 million (31 December 2014: $20.853 million).
The Group’s forecast cash flows for the next 12 months from the date of this report assume the following:
Completion of the Exploration and Mining Licence drilling requirements within the forecast period;
Implementation of the new and updated exploration plans for Amaam and Amaam North under amended Russian mining
regulations, including obtaining regulatory approval for the extension of the Exploration and Mining Licences and the updated
exploration plans by no later than the commencement of the Russian winter 2016-2017 drilling season; and
Further reduction in corporate expenses and general working capital requirements through to 31 March 2017.
57
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
2.
(d)
Basis of preparation (continued)
Going concern basis of accounting (continued)
Based on the Group’s forecast cash flows, the Group will be in a liquidity shortfall position within the next 12 months from the
date of this report (by March 2017), if there are no cash inflows from new funding sources nor net proceeds from potential asset
sales.
The ability of the Group to address the forecast liquidity shortfall within the next 12 months from the date of this report,
The ability of the Group to successfully implement the new and updated exploration plans (including obtaining regulatory
The ability of the Group to continue as a going concern is dependent on:
which may include potential asset sales;
approval) within the timeframe anticipated in the forecast; and
beyond March 2017.
The ability of the Group to secure additional funding to finance the Group’s operations and development of the projects
If the Group is unable to obtain such additional funding, it may be required to further reduce the scope of its operations, or divest
in part or in their entirety either or both the Amaam and Amaam North projects.
These conditions give rise to a material uncertainty that may cast significant doubt on the ability of the Group to continue to operate
as a going concern and therefore, whether it will be able to realise its assets and extinguish its liabilities in the normal course of
business and at the amounts stated in the financial report.
After making enquiries, and considering the uncertainties described above, the Directors are of the view that the continued
application of the going concern basis of accounting is appropriate due to the following factors:
There is a reasonable expectation that the available options, including potential asset sales, can provide the Group with
sufficient short-term liquidity to address the current forecast liquidity needs to enable the Group to continue to meet the planned
corporate and exploration activities and working capital requirements for at least 12 months following the date of signing the 2015
financial statements;
The completion of the regulatory expertise review of the Group’s new and updated exploration plans for Amaam and
Amaam North indicates that there is a reasonable expectation that the Group will be able to successfully implement the new and
updated exploration plans, including obtaining the regulatory approval from the Russian Mining Regulator within the timeframe
anticipated in the forecast;
The Directors are confident that the Group will be able to secure additional financing to support the Group’s ongoing
operations and project development beyond March 2017. The successful fund raising will be dependent on the market conditions
including coking coal price outlook; and
exploration and development assets.
The Group retains the right and the ability to, if required, dispose in part or in their entirety, an interest in the mineral
For these reasons, the Directors have determined that it is appropriate for the Group to continue to adopt the going concern basis
in preparing this financial report, and no adjustments have been made to the carrying value and classification of assets and the
amount and classification of liabilities that may be required if the Group does not continue as a going concern.
(e)
Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency. Each
entity in the Group determines its own functional currency and the items included in the financial statements of each entity are
measured using that functional currency.
The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with that Class Order, all
financial information presented in Australian dollars has been rounded to the nearest thousand dollars unless otherwise stated.
58
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
2.
(f)
Basis of preparation (continued)
Use of estimates and judgements
The preparation of consolidated financial statements in conformity with IFRS requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within
the next financial period and that have the most significant effect on the amounts recognised in the financial statements are described
in the following notes:
property, plant and equipment
intangible assets (goodwill and mineral rights)
deferred tax liabilities
royalty agreement liability
Note 18 –
Note 19 –
Note 23 –
Note 24 –
(g)
New and amended standards adopted
The accounting policies applied by the Group in this consolidated annual financial report are consistent with those
applied by the Group in its consolidated annual financial report as at and for the year ended 31 December 2014, except for the
adoption of the new standards and interpretations as of 1 January 2015, noted below.
The Group has adopted the following new standards and amendments to standards, including any consequential amendments to
other standards, with a date of initial application of 1 January 2015, noted below:
(i) Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)
(ii) Annual Improvements to IFRSs 2010-2012 Cycle – various standards
(iii) Annual Improvements to IFRSs 2011-2013 Cycle – various standards
The adoption of these standards only affects disclosures and had no impact on consolidated profit or loss. The changes have been
applied retrospectively where required.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective for the year
ended 31 December 2015.
59
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
3.
Significant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements, and have been applied consistently by the Group entities.
Where required by Australian Accounting Standards, comparative figures have been reclassified to conform to changes in
presentation in the current financial year.
(a)
(i)
Basis of consolidation
Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control
is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits
from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquire; plus
if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in the profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with
a business combination are expensed as incurred.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the Group’s incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under comparable terms and conditions.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified
as equity, it is not re-measured and settlement is accounted for in equity. Otherwise, subsequent changes to the fair value of the
contingent consideration are recognised in profit or loss.
Subsequent to acquisition date, transactions with non-controlling interests that do not result in a loss of control are accounted for
as transactions with equity owners of the Group. Any difference between the amount of the adjustment to the non-controlling
interest and any consideration paid or received is recognised as a separate reserve within equity.
The assets, liabilities and contingent liabilities recognised at acquisition date are recognised at fair value. In determining fair value
the consolidated entity has utilised valuation methodologies including discounted cash flow analysis. The assumptions made in
performing this valuation include assumptions as to discount rates, foreign exchange rates, commodity prices, the timing of
development, capital costs, and future operating costs. Any significant change in key assumptions may cause the acquisition
accounting to be revised including recognition of goodwill or a discount on acquisition. Additionally, the determination of the
acquirer and the acquisition date also require significant judgement to be made by the Group.
(ii)
Non-controlling interests
For each business combination, the Group elects to measure any non-controlling interests (NCI) in the acquiree either:
at fair value; or
at their proportionate share of the acquiree’s identifiable net assets, which are generally at fair value.
Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as transactions with owners
in their capacity as owners, and are recorded in a new equity reserve called “Other Reserve”. Adjustments to non-controlling
interests are based on a proportionate amount of net assets of the subsidiary. No adjustments are made to goodwill and no gain or
loss is recognised in profit or loss.
(iii)
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through power over the entity. The financial
statements of subsidiaries are included in the consolidated financial statements of the Group from the date that control commences
until the date that control ceases.
60
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
3.
(a)
Significant accounting policies (continued)
Basis of consolidation (continued)
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.
Losses applicable to the NCI in a subsidiary are allocated to the non-controlling interests even if doing so reduces the non-
controlling interests below zero.
(iv)
Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any related NCI and
other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary
is measured at fair value when control is lost
(v)
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements.
(b)
Foreign currency
(i)
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the
dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to
the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference
between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during
the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency
that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency
differences arising on the retranslation are recognised in profit or loss, except for differences arising from the retranslation of
available-for-sale equity instruments, a financial liability designated as a hedge of the net investment in a foreign operation that is
effective, or qualifying cash flow hedges, which are recognised in other comprehensive income.
(ii)
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated
to the functional currency at exchange rates at reporting date. The income and expenses of foreign operations are translated to
Australian dollars at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation
reserve in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportional share of the
translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control is lost,
the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain
or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while
retaining control, the relevant portion of the cumulative amount is reattributed to non-controlling interests. When the Group
disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant
influence or joint control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the
Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining
significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the
foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net
investment in a foreign operation and are recognised in other comprehensive income, and are presented in the translation reserve
in equity.
61
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
3.
(c)
(i)
Significant accounting policies (continued)
Financial instruments
Non-derivative financial assets
The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets
(including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group
becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset in transactions in which substantially all the risks and rewards of
ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group
is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when,
the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the
liability simultaneously.
The Group has the following non-derivative financial assets:
Trade and other receivables
Trade and other receivables are financial assets with fixed or determinable payments that are not quoted in an active market.
Such assets are recognised initially at fair value plus any directly attributable transaction costs.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less from
the acquisition date that are subject to insignificant risk of changes in their fair value, and are used by the Group in the
management of its short-term commitments
(ii)
Non-derivative financial liabilities
The Group initially recognises non-derivative financial liabilities on the trade date, which is the date that the Group becomes a
party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations
are discharged or cancelled or expired.
The Group has the following non-derivative financial liabilities:
Trade and other payables
Liabilities are recognised for amounts to be paid in the future for goods and services provided to the Group prior to the end
of the reporting period and are stated at amortised cost. The amounts are unsecured and are usually paid within 30 days of
recognition.
Finance leases
Finance leases to be paid in accordance with payment schedule based on the contractual agreements.
(iii)
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a
deduction from equity, net of any tax effects.
62
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
3.
Significant accounting policies (continued)
(d)
Property, plant and equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes
expenditure that is directly attributable to the acquisition of the asset.
(ii)
Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably.
The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment
are recognised in profit or loss as incurred.
(iii) Depreciation
Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use. Depreciation is
recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and
equipment. Depreciation is generally recognised in profit or loss, unless the amount is included in the carrying amount of another
asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the
Group will obtain ownership at the end of the lease.
The estimated useful lives for the current and comparative periods are as follows:
Land & buildings
Plant & equipment
Fixtures & fittings
20 years
5 – 10 years
5 – 10 years
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(e)
(i)
Intangible assets
Exploration and evaluation
Exploration and evaluation expenditure comprises costs directly attributable to:
Research and analysing exploration data;
Conducting geological studies, exploratory drilling and sampling;
Examining and testing extraction and treatment methods;
Compiling pre-feasibility and definitive feasibility studies; and
Exploration and evaluation costs, including the costs of acquiring licences.
Exploration and evaluation expenditure is charged against profit and loss as incurred, except for expenditure incurred after a
decision to proceed to development is made, in which case the expenditure is capitalised as an asset.
The Group has changed its accounting policy effective 1 January 2015. Details of the impact of this change in accounting policy
on the consolidated financial statements are in Note 7.
(ii) Mineral Rights
Acquired mineral rights comprise identifiable exploration and evaluation assets including mineral reserves acquired as part of a
business combination and are recognised at fair value at the date of acquisition. The mineral rights will be reclassified as mine
property and development from commencement of development and amortised when commercial production commences on a unit
of production basis over the estimated economic reserve of the mine.
The mineral rights are subject to impairment testing in accordance with the Group’s policy for exploration, evaluation and
development assets. In the year ended 31 December 2015, an asset write-down was recognised as a result of the impairment test
performed. Details of the write-down are disclosed in Note 12.
63
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
3.
Significant accounting policies (continued)
(iii) Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For the measurement of goodwill at initial
recognition refer Note 3(a)(i) (business combinations).
Goodwill is measured at cost less accumulated impairment losses. Goodwill is not amortised, however its carrying value is assessed
annually against its recoverable amount, as explained below under Note 3(f) Impairment. Gains and losses on the disposal of an
entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the
purpose of impairment testing. In the year ended 31 December 2015, an asset write-down was recognised as a result of the
impairment test performed. Details of the write-down are disclosed in Note 12.
(iv) Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses.
(v)
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which
it relates. All other expenditure is recognised in the profit or loss as incurred.
(vi)
Amortisation
Except for goodwill and mineral rights, intangible assets are amortised on a straight line basis in profit or loss over the estimated
useful lives, from the date they are available for use. The estimated useful lives for the current and comparative years for computer
software is three to five years.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(f)
(i)
Impairment
Non-derivative financial assets (including receivables)
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A
financial asset is considered to be impaired if objective evidence indicates that a loss event has occurred after the initial recognition
of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be measured
reliably.
All impairment losses are recognised in profit or loss. An impairment loss in respect of a financial asset measured at amortised
cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted
at the original effective interest rate. Individually significant financial assets are tested for impairment on an individual basis. The
remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognised. For financial assets measured at amortised cost, the reversal is recognised in profit or loss.
(ii)
Non-financial assets
The carrying amounts of the Group’s non-financial assets except for exploration and evaluation assets and mineral rights, are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the
asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available
for use, the recoverable amount is estimated at each reporting date. For exploration and evaluation assets and mineral rights an
impairment assessment takes place when facts and circumstances suggest that the carrying amount may exceed its recoverable
amount.
64
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
3.
(f)
Significant accounting policies (continued)
Impairment (continued)
The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing,
assets are grouped together into the smallest groups of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a business
combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the
synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment losses are
recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the
carrying value of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group
of units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods
are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
In the year ended 31 December 2015, an asset write-down was recognised as a result of the impairment test performed. Details of
the write-down are disclosed in Note 12.
(g)
Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined
by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of
money and the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance
cost.
(i)
Restoration and rehabilitation provision
The Group has obligations to restore and rehabilitate certain areas of property. Provisions for the cost of rehabilitation programs
are recognised at the time that environmental disturbance occurs (or is acquired). On an ongoing basis, additional disturbances
will be recognised as a rehabilitation liability.
(h)
Employee benefits
(i)
Short term employee benefits
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within twelve months of the
reporting date represent obligations resulting from employee’s services provided to reporting date, and are calculated at
undiscounted amounts based on remuneration wage and salary rates that the Company expects to pay as at the reporting date,
including related on-costs, such as workers’ compensation insurance and payroll tax.
A liability is recognised for the amount expected to be paid under short-term incentive bonus plans if the Group has a present legal
or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be
estimated reliably.
(ii)
Share-based payment transactions
Equity-based compensation is recognised as an expense in respect of the services received, or as capitalised exploration expenditure
as appropriate.
The fair value of options granted is recognised as an asset or expense with a corresponding increase in equity. The fair value is
measured at grant date and recognised over the period during which the employees became unconditionally entitled to the options.
The fair value at grant date is independently determined using an option pricing model that takes into account the exercise price,
the term of the options, the vesting and performance criteria, the impact of dilution, the non-tradable nature of the option, the share
price at grant date and expected volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the
term of the option.
65
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
3.
(i)
Significant accounting policies (continued)
Revenue recognition
Revenue is recognised in the income statement when the significant risks and rewards of ownership have been transferred to the
buyer. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due.
Revenues are recognised at fair value of the consideration received net of the amount of GST. Exchanges of goods or services of
the same nature and value without any cash consideration are not recognised as revenue.
(j)
Finance income and finance costs
Finance income comprises interest income on funds loaned to equity accounted investees and funds invested. Interest income is
recognised as it accrues in profit and loss, using the effective interest rate method.
Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign
currency movements are in a net gain or net loss position.
(k)
Leases
(i)
Leased assets
Assets held by the Group under leases which transfer to the Group substantially all the risks and rewards of ownership are classified
as finance leases. On initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the
present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the
accounting policy applicable to that asset.
Assets held under other leases are classified as operating leases and are not recognised in the Group’s statement of financial
position.
(i)
Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the
outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic
rate of interest on the remaining balance of the liability
(l)
Income Tax
Income tax expense comprises current and deferred tax. Current and deferred tax is recognised in profit or loss except to the extent
that it relates to a business combination, or items recognised directly in equity, or in comprehensive income.
(i)
Current tax
Current tax is the expected tax payable on the taxable income or loss for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable in respect of previous years.
(ii)
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting or taxable profit or loss
temporary differences related to investments in subsidiaries, associates and jointly controlled entities to the extent that the
Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse
in the foreseeable future
taxable temporary differences arising on the initial recognition of goodwill.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the
end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realised simultaneously.
66
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
3.
Significant accounting policies (continued)
(l)
Income Tax (continued)
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be
realised.
(iii)
Tax exposure
In determining the amount of current and deferred tax the Group takes into account the impact of uncertain tax positions and
whether additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open
tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies
on estimates and assumptions and may involve a series of judgements about future events. New information may become available
that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will
impact tax expense in the period that such a determination is made.
(iv)
Tax consolidation
The Company and its wholly-owned Australian resident entity are part of a tax consolidated group. As a consequence all members
of the tax consolidated group are taxed as a single entity. The head entity within the tax consolidated group is Tigers Realm Coal
Limited.
(v)
Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to,
the ATO is included as a current asset or liability in the balance sheet. Cash flows are included in the statement of cash flows on a
gross basis. The GST components of cash flows arising from investing and financing activities which are recoverable from, or
payable to, the ATO are classified as operating cash flows.
(m)
Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the
profit or loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding
during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options
granted to employees.
(n)
Segment reporting
The Group determines and presents operating segments based on the information that internally is provided to the Chief Executive
Officer, who is the Group’s chief operating decision maker.
An operating segment is a component of the Group that engages in business activities which incur expenses. An operating
segment’s expenditures are reviewed regularly by the Chief Executive Officer to make decisions about resources to be allocated to
the segment and assess its performance, and for which discrete financial information is available.
Segment expenditure that is reported to the Chief Executive Officer includes items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company’s
headquarters) and head office expenses.
Segment capital expenditure is the total cost incurred during the period on exploration and evaluation, and to acquire property,
plant and equipment and intangible assets other than goodwill.
(o)
Discontinued operations
Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for
sale or distribution, if earlier. When an operation is classified as a discontinued operation, the comparative statement of
comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative year.
67
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
4.
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are issued but not yet effective for annual periods
beginning after 1 January 2016, and have not been applied in preparing these consolidated financial statements. There are no such
statements relevant to the Group.
5.
Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value for financial assets and
liabilities.
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy based on inputs used in valuation techniques as follows.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input
that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change
occurred.
Further information about the assumptions made in measuring fair values is included in the following notes:
Note 24
Note 27
Note 28
royalty agreement liability
share-based payment transactions
financial instruments
(a)
Trade and other receivables
The fair value, which is determined for disclosure purposes, is calculated based on the present value of future cash flows, discounted
at the market rate of interest at the reporting date.
(b)
Non-derivative financial assets and liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest
cash flows, discounted at the market rate of interest at the reporting date. Short-term receivables with no stated interest rate are
measured at the original invoice amount if the effect of discounting is immaterial. Fair value is determined at initial recognition
and, for disclosure purposes, at each annual reporting date.
(c)
Royalty Agreement liability
The fair value of option liabilities is determined using the Black Scholes option valuation methodology, adjusted for the level of
risk assumed in the option. The fair value of the royalty agreement liability is based on an assessment of the probability of the
project proceeding, and a discounted cash flow estimate for the underlying mining project which included various assumptions
about the life of the mine including commodity prices, exchange rates, grade of resources, capital expenditure, operating costs,
production recovery rates, depreciation rates, and tax rates; and is discounted at the Group’s weighted average cost of capital at the
reporting date.
(d)
Share-based payment transactions
Equity-based compensation is recognised as an expense in respect of the services received, or as capitalised exploration expenditure
as appropriate. The fair value of options granted is recognised as an expense with a corresponding increase in equity. The fair
value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the
options. The fair value is measured using a Black-Scholes or Monte-Carlo Simulation Model. Measurement inputs include value
on measurement date, exercise price of the instrument, expected volatility (based on comparable companies), expected life of the
instruments, expected dividends and the risk free interest rate. Service conditions attached to the transactions are not taken into
account in determining fair value.
68
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
6.
(a)
Financial risk management
Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The
Board has established the Audit, Risk and Compliance Committee, which is responsible for developing and monitoring the Group’s
risk management policies. The committee reports regularly to the Board.
The Group has established a Risk Management Policy to provide a framework for the management of risk within the Group. The
Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits
and controls, and to monitor risks and adherence to limits.
The Group has exposure to the following risks from its operations and use of financial instruments:
Credit risk
Liquidity risk
Market risk
Operational risk
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and processes for
measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout these
consolidated financial statements.
(i)
Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s receivables from customers.
(ii)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
(iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, commodity prices and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market
risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
For the Group currency risk arises from transactions in foreign currencies, predominantly US Dollars (USD), and Russian
roubles (RUB). For the Group interest rate risk arises from the exposure to Australian cash deposit rates relating to cash
and cash equivalents. For the Group commodity price risk affects the valuation of the Royalty Agreement Liability, as the
liability is determined starting with the value of the Amaam project, with its value determined using a Discount Cash-Flow
model.
(iv)
Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s
processes, personnel, technology and infrastructure and from external factors other than credit, liquidity and market risks
such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour.
Operational risks arise from all of the Group’s operations.
The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the
Group’s reputation with overall cost effectiveness. The primary responsibility for the development and implementation of
controls to address operational risk is assigned to the Group’s senior management. This responsibility is supported by the
development of the Group Policies and Code of Conduct.
(b) Capital management
The Company and Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern,
so as to maintain a strong capital base sufficient to maintain future exploration, evaluation and development of its projects. In order
to maintain or adjust the capital structure, the Group may return capital to shareholders, or issue new shares. The Group’s focus
has been to raise sufficient funds through equity to fund exploration and evaluation activities and currently has no external
borrowings, except for finance leases.
The Board has not set a target for employee ownership of the Company’s ordinary shares.
The Board has not yet set a debt to capital target for the Group.
69
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
6.
Financial risk management (continued)
Russian Law provides that Russian subsidiaries in the Group need to maintain a level of net assets higher than their charter capital.
Management closely monitor this requirement and act accordingly when required.
Neither the Company nor remaining subsidiaries are subject to any externally imposed capital requirements.
7.
Impact of voluntary change in accounting policy
A change in accounting policy has been adopted for exploration and evaluation expenditure. The new accounting policy was
adopted for the year ended 31 December 2015, effective 1 January 2015, and has been applied retrospectively.
The previous accounting policy was to capitalise and carry forward exploration and evaluation expenditure as an asset when rights
to tenure of the area of interest were current and costs were expected to be recouped through successful development and
exploitation of the area of interest or alternatively by its sale.
The new exploration and evaluation accounting policy is to charge exploration and evaluation expenditure against profit and loss
as incurred, except for expenditure incurred after a decision to proceed to development is made, in which case the expenditure is
capitalised as an asset. The impact on the statement of cash flows is a reclassification of exploration and evaluation expenditure
from investing activities to operating activities.
The Group is of the view that the change in policy will result in the financial report providing more relevant and no less reliable
information as capitalisation of costs will only begin once a decision to proceed with development has been made.
The following tables summarises the impact of the voluntary change in the accounting policy on exploration and evaluation costs,
set out in Note 3 (e)(i), on the Group’s consolidated financial statements.
Consolidated statement of financial position at
31 December 2014
31 December 2014
Note
As previously reported
31 December
2014* As restated
$’000
Effect of restatement
$’000
Non-current assets
Deferred exploration and evaluation
Property, plant and equipment
Total non-current assets
Total assets
Non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Reserves
(Accumulated losses)
Total equity attributable to equity holders of the
Company
Non-controlling interest
Total equity
18
23
26(a)
26(b)
32,372
12,522
187,174
(32,372)
1,710
(30,662)
-
14,232
156,512
216,279
(30,662)
185,617
30,146
69,970
78,222
(7,705)
(7,705)
(7,705)
22,441
62,265
70,517
138,057
(22,957)
115,100
18,376
(35,212)
134,349
3,708
138,057
12,727
(25,581)
(12,854)
(10,103)
(22,957)
31,103
(60,793)
121,495
(6,395)
115,100
70
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
7.
Impact of voluntary change in accounting policy (continued)
Consolidated statement of financial position at 1
January 2014
Non-current assets
Deferred exploration and evaluation
Total non-current assets
Total assets
Non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Reserves
(Accumulated losses)
Total equity attributable to equity holders of the Company
Non-controlling interest
Total equity
1 January
2014
As previously
reported
$’000
Effect of
restatement
1 January
2014* As
restated
$’000
36,083
169,783
(36,083)
(36,083)
-
133,700
179,590
(36,083)
143,507
28,310
48,304
(7,682)
(7,682)
20,628
40,622
53,275
(7,682)
45,593
126,315
(28,401)
97,914
36,748
(15,137)
116,027
10,288
126,315
(1,077)
(16,027)
(17,104)
(11,297)
(28,401)
35,671
(31,164)
98,923
(1,009)
97,914
71
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
7.
Impact of voluntary change in accounting policy (continued)
Consolidated statement of comprehensive income
Continuing operations
Exploration and evaluation expenses
Results from operating activities
31 December
2014 As
previously
reported
$’000
Effect of
restatement
31
December
2014* As
restated
$’000
-
(21,915)
(15,733)
(15,733)
(15,733)
(37,648)
(Loss) before income tax
(19,900)
(15,733)
(35,633)
Income tax credit (expense)
(Loss) from continuing operations
13
(3,345)
(23,245)
3,922
(11,811)
577
(35,056)
Other comprehensive income
Items that may subsequently be reclassified to the income
statement
Foreign currency translation differences for foreign operations
Total comprehensive income for the period
Operating profit is attributable to:
Owners of the Company
Non-controlling interest
(Loss) for the period
Total comprehensive income is attributed to:
Owners of the Company
Non-controlling interest
Total comprehensive income for the period
(Loss) per share (cents per share)
basic (loss) per share (cents)
diluted (loss) per share (cents)
(Loss) per share (cents per share) – continuing operations
basic (loss) per share (cents)
diluted (loss) per share (cents)
(22,306)
(45,551)
(20,075)
(3,170)
(23,245)
(38,971)
(6,580)
(45,551)
(2.48)
(2.48)
(2.48)
(2.48)
17,255
5,444
(5,051)
(40,107)
(9,554)
(2,257)
(11,811)
4,250
1,194
5,444
(1.86)
(1.86)
(1.86)
(1.86)
(29,629)
(5,427)
(35,056)
(34,721)
(5,386)
(40,107)
(4.34)
(4.34)
(4.34)
(4.34)
14
14
14
14
72
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
7.
Impact of voluntary change in accounting policy (continued)
Consolidated statement of cash flows
Cashflows from operating activities
Exploration and evaluation expenditure
Net cash (used in) operating activities
Cashflows from investing activities
Exploration and evaluation expenditure
Acquisition of property, plant and equipment
Net cash (used in) investing activities
Note
31 December
2014 As
previously
reported
$’000
31 December
2014* As
restated
$’000
Effect of
restatement
-
(5,414)
(22,352)
(6,519)
(36,173)
(20,073)
(20,073)
22,352
(2,279)
20,073
(20,073)
(25,487)
-
(8,798)
(16,100)
In the year to 31 December 2015, the voluntary change in accounting policy has resulted in recognition of an exploration and
evaluation expense of $7,297 thousand. Had the change in accounting policy not been adopted for the current year, the result would
have been the capitalisation of $7,297 thousand to the exploration and evaluation asset and an additional asset write-down of the
same amount as a result of the impairment of both the Amaam and Amaam North CGUs assets at 31 December 2015. Results of
impairment tests performed during the year to 31 December 2015 are detailed in Note 12.
The change in accounting policy in relation to exploration and evaluation expenditure from capitalisation to expensing as incurred
was not applied in the Group’s 30 June 2015 Interim Financial Report. As part of the retrospective application of the new policy,
the Group’s write-down of assets recognised for the six months ended 30 June 2015 of $171.820 million has been restated to
$148.264 million in these financial statements.
73
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
8.
Segment reporting
The Group has two reportable segments, as described below, which are its main mineral exploration projects. The Group has
identified these segments based on the internal reports used and reviewed by the Group’s Chief Executive Officer (the chief
operating decision maker), in assessing performance and determining the allocation of resources.
The accounting policies used by the Group in reporting segments internally are the same as those contained in Note 3 to the accounts
In 2015 the mineral exploration and evaluation activities of the Group continue to be managed in two
and in the prior period.
reportable operating segments outlined below.
2015
Amaam Project
Amaam North Project
Other
The Amaam Project is located in the Bering Basin in Chukotka province, Russia
and consists of the Amaam tenement.
The Amaam North Project is located in the Bering Basin in Chukotka province,
Russia and consists of the Amaam North tenement. Also includes transport and
infrastructure assets associated with the Beringovsky Port and Coal Terminal
acquired by the Company in June 2014.
Consists of corporate and office expenses primarily incurred at the Group’s
Melbourne offices, including the costs of liquidating non-operating entities
(Indonesia and Spain). This is not a reportable segment.
Management monitors the expenditure outlays of each segment for the purpose of cost control and making decisions about resource
allocation. The Group’s administration and financing functions are managed on a group basis and are included in the “Other”,
which is not a reportable segment.
31 December 2015
Total segment revenue
(including interest revenue)
Write-down of assets
Segment expense
Depreciation and amortisation
Gain / (loss) on revaluation of
royalty agreement liability
Net foreign exchange gain / (loss)
Segment result
Segment assets
Segment liabilities
31 December 2014* As restated
Total segment revenue
(including interest revenue)
Segment expense
Depreciation and amortisation
Gain / (loss) on revaluation of
royalty agreement liability
Net foreign exchange gain / (loss)
Segment result
Segment assets
Amaam
Project
$’000
Amaam North
Project
Total
Reportable
Segments
$’000
$’000
Other
$’000
Total
$’000
-
(144,638)
(2,681)
-
40,468
-
(106,851)
611
(33)
13
(7,627)
-
(14,017)
-
(21,631)
71
(15,769)
(2,185)
(328)
-
-
(18,211)
71
(160,407)
(4,866)
(328)
40,468
-
(125,062)
7,784
8,395
(4,400)
(4,433)
3
-
(8,563)
(97)
-
1,850
(6,807)
5,168
(149)
74
(160,407)
(13,429)
(425)
40,468
1,850
(131,869)
13,563
(4,582)
-
13
35
48
(8,445)
(159)
-
-
(8,604)
(16,072)
(159)
(14,017)
-
(30,235)
(7,321)
(92)
-
1,980
(5,398)
(23,393)
(251)
(14,017)
1,980
(35,633)
137,216
28,656
165,872
19,745
185,617
Segment liabilities
(58,398)
(11,347)
(69,745)
(772)
(70,517)
74
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
8.
Segment reporting (continued)
Geographical information
The Group manages its business on a worldwide basis but primarily holds assets in one geographic segment, being Russia.
2015
2014
Revenues
Non-current
Revenues
Non-current
assets
$’000
$’000
assets* As
restated
$’000
$’000
71
71
3,626
3,626
13
13
156,271
156,271
Russia
Total
9.
Other income
Other income
Other income
10.
Expenses
Administration expenses
Wages and salaries, including superannuation contributions
Contractors and consultants fees
Corporate travel costs
Accounting and audit fees
Other
Total administration expense
11.
Finance income
Finance income
Net foreign exchange gain
Finance income
Finance income – external interest income
Finance income
Net finance income
31 December
2015
$’000
31 December
2014
$’000
71
71
-
-
31 December
2015
$’000
31 December
2014
$’000
(2,095)
(1,051)
(482)
(341)
(1,144)
(5,113)
(3,775)
(1,311)
(510)
(272)
(1,427)
(7,295)
31 December
2015
$’000
31 December
2014
$’000
1,850
1,850
3
3
1,853
1,980
1,980
35
35
2,015
75
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
12. Write-down of assets
Due primarily to a further, and significant, deterioration in coal price forecasts, the Group has performed an impairment assessment
for its Amaam Project CGU and Amaam North Project CGU and recognised a write-down of assets of $160.407 million during the
year ended 31 December 2015, of which $148.264 million arose from an impairment of assets at 30 June 2015 and $12.143 million
from a further impairment at 31 December 2015. Refer to Note 8 of the Consolidated Financial Statements for a description of the
Amaam Project and the Amaam North Project operations. A breakdown of the allocation of the write-down by asset class is
included in Note 19.
As a result of the recoverable amount analysis performed, the following write-downs were recognised.
Write-down of assets recognised for the year ended 31 December 2015
Goodwill
Mineral rights
Other intangible assets
Property, plant and equipment
Total write-down of assets
Methodology
31 December
2015
$’000
(27,118)
(117,756)
(2,119)
(13,414)
(160,407)
31 December
2014* As
restated
$’000
-
-
-
-
-
A write-down is recognised when the carrying amount exceeds the recoverable amount of the assets. The recoverable amount is
determined as the greater of the fair value of the asset, with reference to the market price, where available, less costs of disposal
and the value in use, as determined by the calculation of the CGU’s net present value below.
Given the nature and stage of the Group’s activities (the Amaam Project being in the exploration and evaluation phase and not
scheduled to go into production until at least 2023), information on the fair value less cost to sell of the asset is difficult to obtain
unless negotiations with potential purchasers or similar transactions are taking place. Consequently, the Group has determined
the recoverable amount of the Amaam Project cash generating unit (“CGU”) using a value in use approach.
With regards to the Amaam North Project, the recoverable amount of this CGU has been determined primarily using a value in
use approach, except in respect of certain property, plant and equipment for which their market price was determinable, the fair
value less costs of disposal for these assets was used as the basis for determining their recoverable amount.
The recoverable amounts in relation to both CGUs have been determined by an internal valuation model that estimates the future
cash flows, discounted to their present value using a discount rate that reflects current market assessments of the time value of
money and the risks specific to each particular CGU.
Detailed plans are constructed by management for each project utilising detailed life of mine plans based on estimated production
volumes and operating costs.
The discounted cash flow model used in the assessment of value in use is based on a number of key assumptions, including
commodity price forecasts, discount rates, capital expenditure, operating costs and foreign exchange rates. These assumptions
can change over short periods of time and can have a significant impact on the carrying value of the assets. Given the fact that
the Group’s projects are yet to progress to the development stage, and the fact that the projects are expected to have a long term
operating life once developed, the Group focuses on changes in long-term estimates for the relevant assumptions.
The Group considered information available from industry analysts and commentators in relation to commodity price forecasts.
It continued to use a leading industry specialist’s forecast real prices as its preferred source of data when analysing price forecasts
due to the level of detail they supply for their 20 year forecasts. It also considered the short-term forecasts of other market
commentators to assess the degree of consistency with the forecasts adopted by the Group.
76
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
12. Write-down of assets (continued)
In the six months ended 30 June 2015, based on the estimated recoverable amount, the Group has written-down all non-current
assets for the Amaam project CGU and the goodwill, mineral rights and other intangible assets for Amaam North project CGU
due primarily to deterioration in the coal price forecasts after the date of signing the 2014 financial report to the date of issuance
of the interim condensed consolidated financial statements for the six months ended 30 June 2015.
Subsequent to 30 June 2015, there has been a further, significant deterioration in coal price forecasts, as a result of which the
value in use of the Amaam North Project is below the carrying value of non-current assets. Consequently, all remaining non-
current assets in the Amaam North project were written-down to their recoverable amount of $2.909 million as at 31 December
2015. This recoverable amount was determined using their fair value, less costs of disposal.
13.
Income tax expense
A reconciliation between tax expense and the product of accounting profit multiplied by Australia’s domestic tax rate for the
years ended 31 December 2015 and 2014 is set out below.
Loss before tax from continuing operations
Income tax (credit) using the domestic corporation tax rate of 30%
Changes in income tax expense due to:
Effect of tax rates in foreign jurisdictions
Non-assessable income – royalty liability
Non-deductible expenses-royalty liability
Non-deductible expenses-impairment
Non-deductible expenses-other
Reversal of deferred tax liability on mineral rights
Current period tax losses for which no deferred tax asset was
recognised
Total income tax (credit) expense on pre-tax net profit
Current tax (credit) expense
Deferred tax (credit) expense
Total income tax (credit) expense
Unrecognised deferred tax assets
Net deferred tax assets have not been recognised in respect of the
following:
31 December
2015
$’000
31 December
2014 As restated
$’000
(131,869)
(131,869)
(39,561)
20,620
(5,059)
-
21,446
(780)
(23,400)
2,835
(23,899)
5
(23,904)
(23,899)
(35,633)
(35,633)
(10,690)
4,178
-
1,752
(879)
(2)
-
5,064
(577)
15
(592)
(577)
31 December
2015
$’000
31 December
2014* As
restated
$’000
Total tax assets not recognised
21,088
18,253
77
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
13.
Income tax expense (continued)
During the year ended 31 December 2014, the Company made changes to inter-company loan agreements between its Russian
and Cyprus subsidiaries so as to enable compliance with Russian law regarding maintenance of net asset position within the
Russian entities. This change affected the tax losses carried forward, as it triggered the realisation of existing unrealised foreign
exchange gains on these loans for Australian tax purposes. The tax losses carried forward as at 31 December 2014 were reduced
by $3.9 million, the estimated tax effected FX gain for the Group.
The tax losses incurred in Australia do not expire under current tax legislation. In the overseas jurisdictions the tax losses can be
carried forward for varying periods. Deferred tax assets have not been recognised for deductible temporary differences or carried
forward tax losses where it is not probable that future taxable profit will be available against which the Group can utilise the
benefits.
14.
Earnings / (loss) per share
(Loss) per share
Basic (loss) per share – cents
Diluted (loss) per share – cents
(Loss) per share – continuing operations
Basic (loss) per share – cents
Diluted (loss) per share – cents
31 December
2015
Cents
31 December
2014* As
restated
cents
a
b
a
b
(12.06)
(12.06)
(12.06)
(12.06)
(4.34)
(4.34)
(4.34)
(4.34)
(a)
(b)
Basic earnings / (loss) per share
The calculation of basic earnings per share (EPS) at 31 December 2015 was based on the loss attributable to ordinary equity
holders of the Company of $107.970 million (2014: loss of $35.056 million) and a weighted average number of ordinary
shares outstanding during the period ended 31 December 2015 of 895,084,897 (2014: 807,991,613).
Diluted earnings / (loss) per share
The calculation of diluted earnings per share at 31 December 2015 is the same as basic earnings per share. The Company
had issued 31,406,000 options over ordinary shares. The options over ordinary shares could potentially dilute basic
earnings per share in the future, however, they have been excluded from the calculation of diluted earnings per share
because they are anti-dilutive for the reporting period.
15. Cash and cash equivalents
Bank balances
Cash and cash equivalents
All cash and cash equivalents are available for use by the Group.
31 December
2015
$’000
31 December
2014
$’000
7,074
7,074
20,465
20,465
78
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
16. Reconciliation of cash flows from operating activities
Cash flows from operating activities
(Loss) for the period
Adjustments for non-cash items:
Foreign exchange (gain)/loss
Share based payments
Administration expenditure
(Gain) / loss on revaluation of royalty agreement liability
Write down of assets
Income tax expense/(benefit)
27
24
12
13
Changes in working capital
(Increase ) / decrease in trade and other receivables
(Increase ) / decrease in prepayments
(Decrease) / increase in trade and other payables
Net cash (used in) operating activities
17.
Trade and other receivables
Security deposit
Other receivables
Current
Non-current
31 December
2015
$’000
31 December
2014* As
restated
$’000
(107,970)
(35,056)
(1,850)
1,120
172
(40,468)
160,407
(23,899)
(12,488)
(191)
1,922
(1,131)
(11,888)
(1,980)
524
685
14,017
-
(577)
(22,387)
(189)
721
(3,632)
(25,487)
31 December
2015
$’000
31 December
2014
$’000
1,338
807
1,428
717
1,969
2,732
3,541
1,160
In 2014, the Group negotiated a bank guarantee in favour of CAT as part of the arrangement to acquire a small fleet of mobile
equipment. In 2015, the CAT finance lease payment terms were renegotiated, including the value of the guarantee, which was
reduced to US $0.976 million (AUD $1.338 million) at 31 December 2015 from US $1.607 million (AUD $2.098 million) at 31
December 2014.
79
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
18.
Property, plant and equipment
Assets in
construction
$’000
Land &
Buildings
$’000
Plant&
Equipment
Fixtures &
Fittings
Total
$’000
$’000
$’000
9,534
1,276
(5,586)
(6,030)
806
4,080
15
-
(4,229)
134
2,445
103
5,586
(5,820)
595
240
-
-
(240)
-
16,299
1,394
-
(16,319)
1,535
-
-
-
-
-
-
-
-
-
11,910
-
-
(2,376)
-
2,909
-
2,909
(1,193)
(265)
-
1,610
(152)
-
-
5,141
835
-
-
(1,896)
(768)
(202)
-
1,141
(171)
-
2,909
2,692
736
-
-
(983)
(106)
(48)
-
154
-
-
-
(2,067)
(515)
-
2,905
(323)
-
2,909
240
-
-
-
-
8,073
13,481
-
-
(5,255)
9,534
4,080
2,445
240
16,299
-
-
-
-
-
(1,049)
(530)
-
386
(340)
(541)
-
113
(57)
(49)
-
-
(1,446)
(1,120)
-
499
(1,193)
(768)
(106)
(2,067)
9,534
2,887
1,677
134
14,232
31 December 2015
Cost
As at 1 January 2015
Additions
Disposals
Transfers
Asset write-down
Effect of movement in
exchange rates
As at 31 December 2015
Depreciation and impairment
As at 1 January 2015
Depreciation charge for the
period
Disposals
Asset write-down
Effect of movement in
exchange rates
As at 31 December 2015
Net book value:
At 31 December 2015
31 December 2014
*As Restated
Cost
As at 1 January 2014
Additions
Disposals
Transfers
Effect of movement in
exchange rates
As at 31 December 2014
* As Restated
Depreciation and impairment
As at 1 January 2014
Depreciation charge for the
period
Disposals
Effect of movement in
exchange rates
As at 31 December 2014
Net book value: *As Restated
At 31 December 2014
80
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
19.
Intangible assets
31 December 2015
Cost
As at 1 January 2015
Write-down of assets
Effect of movement in exchange rates
As at 31 December 2015
Amortisation and impairment
As at 1 January 2015
Amortisation charge for the period
Write-down of assets
As at 31 December 2015
Net book value:
At 31 December 2015
31 December 2014
Cost
As at 1 January 2014
Additions
Additions – acquisition of subsidiary
Effect of movement in exchange rates
As at 31 December 2014
Amortisation and impairment
As at 1 January 2014
Amortisation charge for the period
As at 31 December 2014
Net book value:
At 31 December 2014
Goodwill
$’000
Mineral
Rights
$’000
Other
$’000
Total
$’000
26,012
(27,118)
1,106
-
112,934
(117,756)
4,822
-
-
-
-
-
-
23,193
-
780
2,039
26,012
-
-
-
-
-
-
-
-
103,808
-
-
9,126
112,934
-
-
-
2,331
(2,413)
82
-
(157)
(137)
294
-
141,277
(147,287)
6,010
-
(157)
(137)
294
-
-
-
104
68
3,149
(990)
2,331
(32)
(125)
(157)
127,105
68
3,929
10,175
141,277
(32)
(125)
(157)
26,012
112,934
2,174
141,120
81
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
19.
Intangible assets (continued)
Impairment testing for CGUs containing goodwill
Goodwill arose in a business combination following an acquisition of a controlling interest in the Amaam Project owned by
Eastshore Coal Holding Limited in 2011. It represented the excess of the consideration paid over the fair value of the Group’s share
of the identifiable net assets acquired and contingent liabilities assumed at the date of acquisition. For impairment testing purposes,
goodwill is allocated to the Group’s cash generating units (CGUs) identified according to the Group’s operating segments.
In addition to the goodwill that arose in relation to the Amaam Project, there was also goodwill in relation to the acquisition of the
Beringovsky Port and Coal Terminal through the purchase of a 100% equity interest in Port Ugolny LLC (Amaam North Project).
In assessing whether an impairment adjustment is required for the carrying value of an asset, its carrying value is compared with
its recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and value-in-use.
It is management’s intention to continue to develop both the Amaam Project and Amaam North Project. Consequently, unless
indicated otherwise, the recoverable amount used in assessing asset impairment is primarily the value-in-use.
Value-in-use and key assumptions
The Group estimates the value-in-use of the Amaam Project and Amaam North Project using a discounted cash flow model for the
life of the particular project. The projected cash flows of the projects are for a period in excess of five years and represent
management’s estimate of the life of mine.
The calculation of value-in-use is sensitive to a number of assumptions:
Short and long term commodity prices
Discount rate
Operating expenditure and capital cost
Foreign exchange rates
Short and long term commodity prices: The Group considered information available from industry analysts and commentators in
relation to commodity price forecasts. It continued to use a leading industry specialist’s forecast real prices across the anticipated
mine life as its preferred source of data when analysing price forecasts due to the level of detail they supply for their 20 year forecast
prices. It also considered the short-term forecasts of other market commentators to ensure a degree of consistency with the
commodity price forecasts adopted. As at 313 December 2015, the range of the coal price forecasts adopted by the Group over the
estimated mine life for the main product in Amaam project is US $110 to US $147 per ton and in Amaam North project is US $80
to US $113 per ton.
Discount rate: In calculating the value-in-use, a real pre-tax discount rate of 15.35% for the Amaam Project CGU and 13.78% for
the Amaam North Project CGU was applied to the pre-tax cash flows expressed in real terms. These discount rates were derived
from the Group’s pre-tax weighted average cost of capital (WACC), with appropriate adjustments made to reflect the risks specific
to the particular CGU and to determine the pre-tax rate. The WACC takes into account returns on both debt and equity.
Operating expenditure and capital costs: The Group engaged a number of external consultants to assist with the cost estimates, as
part of the process of completing the Amaam Project PFS and Amaam North Project BFS. The Company has an experienced
Owners team, who assess the reasonableness of the information provided before making informed decisions on estimates.
Foreign exchange rates: Foreign exchange rates (USD: RUB) are estimated with reference to external market forecasts and updated
at least annually.
Based on the estimated recoverable amount, the Group has written-down all non-current assets for Amaam Project CGU and
goodwill, mineral rights and other intangible assets and property, plant and equipment excluding certain equipment for Amaam
North Project CGU, due primarily to a further significant and deterioration in coal price forecasts during the period.
Fair value less cost of disposal
At 31 December 2015, the Amaam North CGU’s property, plant and equipment was subject to impairment testing, an additional
write-down by $12.083 million was recognised in the statement of comprehensive income. As at 31 December 2015, the
recoverable amount of $2.909 million was determined with reference to the sales price of certain Caterpillar (“CAT”) equipment,
less the costs of their disposal.
The market price used in determining the fair value of the CAT equipment falls within the criteria indicating Level 2 of the fair
value hierarchy as the fair value was based on an external party’s offer to acquire the assets.
82
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
19.
Intangible assets (continued)
Impairment testing for CGUs containing goodwill
Write-down of assets
As a result of the recoverable amount analysis performed during the period, the following write-down was recognised.
Write-down of assets recognised for the year ended 31 December 2015
Write-down of assets
Goodwill
Mineral rights
Other intangible assets
Property, plant and equipment
Total write-down of assets
Amaam
Project CGU
$’000
(26,309)
(116,998)
-
(1,331)
(144,638)
Amaam North
Project CGU
$’000
(809)
(758)
(2,119)
(12,083)
(15,769)
Total
$’000
(27,118)
(117,756)
(2,119)
(13,414)
(160,407)
20. Trade & other payables
Other trade payables and accrued expenses
Current
21. Employee Benefits
Annual Leave
Provision for annual bonus
Provision for other employee costs
31 December
2015
$’000
31 December
2014
$’000
410
410
410
410
848
848
848
848
31 December
2015
$’000
31 December
2014
$’000
75
-
79
154
302
690
139
1,131
83
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
22. Lease Liability
Finance lease liabilities - current
Finance lease liabilities – non-current
31 December
2015
$’000
31 December
2014
$’000
2,296
2,296
1,722
1,722
6,273
6,273
2,563
2,563
The terms and conditions of the finance leases are as follows:
Currency
Interest
rate
Year of
maturity
Finance lease liabilities
USD
9.95%
2017
Total interest bearing liabilities
31 December 2015
Value at
inception
$’000
10,095
10,095
Carrying
amount
$’000
USD 2,932
USD 2,932
In 2014 the Group entered into a finance lease with CAT to acquire a small fleet of mobile equipment to commence early stage
development at Project F Amaam North. USD $8.217 million (AUD $10.734 million) in equipment at cost (including VAT) was
acquired, with an initial advance paid and the balanced financed. The finance lease liability was USD $8.234 million (AUD $10.756
million), with advances paid of USD $4.191 million (AUD $5.475 million). The advances paid unwound over a 12-month period
from the commencement of the lease in September 2014. Terms and charges are determined based on the net position of the lease
liability and advance. In addition to this, a security deposit for the CAT lease was put in place totalling USD $1.607 million (AUD
$2.098 million).
In 2015, the terms of the CAT finance lease payment schedule and the security deposit were renegotiated, as a result of which the
term of the lease was extended until 2017 and the terms of the guarantee changed and the sum reduced. Details of the guarantee
are presented in Note 17. The finance lease liability outstanding as at 31 December 2015 is USD $2.932 million (AUD $4.018
million), with advances paid of $Nil.
84
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
23. Deferred Tax Liabilities
The balance comprises temporary differences attributable to:
Mineral rights acquired
Total deferred tax liabilities recognised
Deferred tax liabilities to be settled in within 12 months
Deferred tax liabilities to be settled after 12 months
Total deferred tax liabilities recognised
Movement in deferred tax liability
At beginning of period
Impairment of mineral rights
Effects of movement in exchange rates
At end of period
31 December
2015
$’000
31 December
2014* As
restated
$’000
-
-
-
-
22,441
(23,400)
959
-
22,441
22,441
-
22,441
22,441
20,268
-
2,173
22,441
The Group offsets tax assets and liabilities if it has a legally enforceable right to do so and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same tax authority. The Group’s tax losses in foreign jurisdictions are subject to
expiry dates.
Mineral rights were written-down during the year ended 31 December 2015. As a result, the related deferred tax liability was
reduced to $Nil. Details of the mineral rights write-down are presented in Note 19.
24. Royalty Agreement Liability
Opening balance of royalty agreement liability
Fair value adjustment to royalty agreement liability
Effect of movement in exchange rates
Total royalty agreement liability recognised at end of year
31 December
2015
$’000
31 December
2014
$’000
37,261
(40,468)
3,207
-
19,994
14,017
3,250
37,261
The royalty agreement liability arose as a consequence of the change in control in Eastshore to TRC Cyprus on 6 May 2011 and
the resulting consolidation of Eastshore and its 100% owned subsidiary, NPCC.
Applying AASB 3 Business Combinations the fair value of the consideration for Eastshore is measured with reference to the fair
value of TIG’s existing 40% equity interest in Eastshore at 6 May 2011, and in addition, the fair value of the option inherent in the
Bering Royalty Agreement, whereby Bering may choose to fund its proportion of the expenditure after completion of the bankable
feasibility study or to have its interest diluted in return for a royalty stream.
85
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
24. Royalty Agreement Liability (continued)
With regards to the Bering Royalty Agreement, prior to 6 May 2011, TRC Cyprus held a 40% interest in Eastshore. TRC Cyprus
now holds an 80% interest in Eastshore. If Bering fails to fund its proportion of expenditure after completion of the bankable
feasibility study, its remaining 20% shareholding may be diluted in exchange for a maximum royalty of 2% of gross sales revenue
from the sale of coal produced from the area of a license held by a member of the Eastshore Group.
The option inherent in the Bering Royalty Agreement whereby Bering may choose to fund its proportion of expenditure after
completion of the bankable feasibility study or to have its interest diluted in return for a royalty stream, is deemed to be part of the
consideration for TIG obtaining control of Eastshore. As such, the option is recorded as consideration at fair value at the date of
acquisition.
Measurement of fair values
(i) Fair value hierarchy
The fair value measurement of the royalty agreement liability has been categorized as a Level 3 fair value based on the inputs to
the valuation technique used (refer note 5(c)).
(ii) Valuation technique and significant observable inputs
TIG has used the Black and Scholes formula to value the royalty agreement liability, based on the parameters set out in the table
below:
Valuation Date
Expiry Date
20% value of the Amaam Project (US$m)
Net Present Value of the Bering royalty stream (US$m)
Valuation risk weighting (probability)
Time to expiration (days)
TIG Share Price volatility (%/100)
20 Year US bond yield (risk free rate) (%/100)
31 December 2015
1 January 2021
-
-
3%
1,828
75%
3.73%
31 December 2014
1 January 2018
24.23
50.57
60%
1,097
75%
2.47%
The value of the Royalty Agreement Liability is determined starting with the value of the Amaam Project, with its value determined
using a Discount Cash Flow model. The fair value of the liability was revalued to $2.129 million at 30 June 2015 and further
reduced to $Nil at 31 December 2015 (31 December 2014: $37.261 million). This resulted in a gain being taken to the statement
of comprehensive income for the year ended 31 December 2015 of $40.468 million (31 December 2014: loss of $14.017 million).
The fair value was recalculated based on information available at 31 December 2015. In the year to 31 December 2015, the value
of the Amaam Project has been predominantly impacted by a decrease in coal price forecasts, which resulted in a decrease in the
recoverable value of the project.
Due to the further deterioration in market conditions, the Group has conducted an assessment of the probability factor as at 31
December 2015, and concluded a downward adjustment to the probability factor is required.
It is important to note, the adjustment to the probability factor is an indication of the likelihood that the option holder will convert
the option into the revenue stream, it is not whether or not the project will proceed. Given the volatility in the market conditions,
the Group believes a rational investor would be more likely to maintain their equity interest, therefore the probability factor has
been decreased, as a result the royalty liability has also decreased, as it has become less likely that the option will be exercised. The
movement in the royalty agreement liability is a non-cash movement.
Having completed the Amaam North Project F Preliminary Feasibility Study in September 2013 and the Feasibility Study in
November 2014, which is currently being updated by the Group, TIG’s focus remains on obtaining funding to enable the
development of Project F. As a result the Amaam Project BFS completion date has been extended a further 36 months to 1 January
2021, with production expected to commence from 2023. This revised date has the effect of pushing out the timeline for production,
sales and capital expenditure by 36 months. This is the expiry date for the option and represents the point in time that the option-
holder (Bering) must make an initial funding decision.
The Bering option will be revalued at each future balance date with any resulting movement being recognized as a gain or loss in
the statement of comprehensive income.
86
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
25.
Share capital
Share Capital
Costs of raising equity
(i) Movements in shares on issue:
Opening balance at 1 January 2014
Movements in 2014
Issue of ordinary shares – placement
Issue of ordinary shares – Share Purchase Plan
Closing share capital balance at 31 December 2014
Opening balance at 1 January 2015
Movements in 2015
Issue of ordinary shares – Share Purchase Plan
Closing share capital balance at 31 December 2015
(ii) Movements in cost or raising equity:
Opening balance
Costs incurred
Closing balance
31 December
2015
$’000
164,901
(13,716)
151,185
31 December
2014
$’000
164,901
(13,716)
151,185
No of shares
Issue price
$
$’000
524,223,017
365,876,275
3,651,569
893,750,861
893,750,861
0.165
0.165
2,084,074
895,834,935
0.00
103,928
60,370
603
164,901
164,901
-
164,901
31 December
2015
$’000
(13,716)
-
(13,716)
31 December
2014
$’000
(9,512)
(4,204)
(13,716)
The Company does not have authorised capital or par value in respect of its issued shares. All issued share are fully paid. All
shares rank equally with regard to the Company’s residual assets.
The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share
at meetings of the Company.
Issue of ordinary shares – year ended 31 December 2015
During the year the Company issued 2,084,074 fully paid ordinary shares at a nil price as part of the Employee Share Purchase
Scheme. There were no other movements for the year.
87
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
25.
Share capital (continued)
Issue of ordinary shares – year ended 31 December 2014
In March and April 2014 the Company completed an equity raising of $60.973 million in the form of fully paid ordinary shares at
a price of $0.165 per share. The $0.165 share price represents a 5.8% discount to the five day volume weighted average trade price
of TIG’s shares prior to the trading halt announcement date on 5th December 2013. The equity raising consisted of the following
elements.
A placement of 219,263,985 fully paid ordinary shares to raise gross proceeds of $36.179 million to Baring Vostok
Private Equity Fund V, through BV Mining Holding Limited (BVMHL);
A placement of 99,000,000 fully paid ordinary shares to raise gross proceeds of $16.335 million to the Russian Direct
Investment Fund (RDIF);
A placement of 47,612,290 fully paid ordinary shares to raise gross proceeds up to $7.856 million to existing and new
shareholders. Of this placement amount, 23,484,848 shares were issued on 3 March 2014 raising gross proceeds of
$3.875 million.
A Share Purchase Plan to existing shareholders was completed on 24 April 2014 which resulted in 3,651,569 shares being
issued to raise gross proceeds of $0.603 million.
(iii) Capital Management
The Board monitors the capital of the Group in order to ensure management maintain stable cash reserves, manage capital raising
requirements, and ensure that the Group can fund its operations and continue as a going concern. The Group’s debt and capital
includes ordinary share capital and current and non-current financial liabilities. There is no non-current external debt, other than
finance leases.
Management effectively manages the Group’s capital by assessing the Group’s cash flow and capital requirements and responds
to those needs. These responses include capital projects management, mineral licences’ acquisition, reduction of expenditure, and
sourcing of further funds.
(iv) Movements in options on issue:
Opening balance as at 1 January 2014
Issue of options
Issue of options
Issue of options
Options forfeited/lapsed
Closing balance as at 31 December 2014
Issue of options
Issue of options
Issue of options
Issue of options
Issue of options
Options exercised
Options forfeited/lapsed
Closing balance as at 31 December 2015
Date of issue
4 June 2014
19 December 2014
19 December 2014
17 April 2015
17 April 2015
17 April 2015
11 June 2015
11 June 2015
Exercise
price
$
Expiry date
0.500
0.230
0.170
4 June 2019
28 February 2019
28 February 2019
0.23
0.17
0.00
0.50
0.23
17 April 2020
17 April 2020
17 May 2015
11 June 2020
11 June 2020
Number of
options
49,527,100
3,000,000
8,035,500
8,035,500
(30,306,100)
38,292,000
8,937,500
8,937,500
3,258,518
3,000,000
3,000,000
(2,084,074)
(31,935,444)
31,406,000
88
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
26. Reserves and accumulated losses
(a)
Reserves
Note
31 December
2015
Share based payments reserve
Other reserve
Foreign currency translation reserve
Total reserves
Movements
Share based payments reserve
Opening balance
Share options expense arising during the year
Closing balance
27
Other reserve
Opening balance
Change during the year
Closing balance
Foreign currency translation reserve
Opening balance
Currency translation differences arising during the year
Closing balance
$’000
6,355
18,582
7,072
32,009
5,235
1,120
6,355
18,582
-
18,582
7,286
(214)
7,072
31 December
2014* As
restated
$’000
5,235
18,582
7,286
31,103
4,711
524
5,235
18,582
-
18,582
12,378
(5,092)
7,286
Share based payments reserve
The share based payments reserve is used to recognise the value of options issued but not exercised.
Other reserve
The other reserve records the impact of changes in ownership interest of subsidiaries while retaining control.
Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on translation of foreign controlled entities.
(b) Retained earnings / (accumulated losses)
Retained earnings / (accumulated losses) at the beginning of the year
Net (loss) attributable to members of the Company
(Accumulated losses) at the end of the year
31 December
2015
$’000
(60,793)
(86,170)
(146,963)
31 December
2014* As
restated
$’000
(31,164)
(29,629)
(60,793)
89
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
27.
(a)
Share based payments
Recognised share based payment expense
Effect in thousands of AUD
31 December
2015
$’000
31 December
2014
$’000
Expense arising from equity settled share based payment transactions
1,120
524
(b)
Description of share-based payment arrangements
In 2010, the Company established the Staff Option Plan as part of the Group’s Long-Term Incentive Plan to assist in the attraction,
motivation and retention of senior executives and employees and to encourage their personal commitment to the Company. The
plan forms a necessary part of the competitive packages offered by the Company in-light of the markets in which it operates. The
plan also creates an ownership mindset among participants and ensures business decisions and strategic planning has regard to the
Company’s long term performance and growth. There a number of different performance hurdles, exercise prices and vesting
conditions dependent on the individual’s position held. It is a vesting condition that the holder of options remains an employee or
director at the time of vesting. There have been no cancellations or modification to the Staff Option Plan since it was established
in 2010.
The Staff Option Plan offers individuals the opportunity to acquire options over fully paid ordinary shares in the Company. Share
options granted under the plan carry no dividend or voting rights. When exercised, each option is convertible into one ordinary
share subject to satisfying vesting conditions and performance criteria. The shares when issued rank pari passu in all respects with
previously issued fully paid ordinary shares. Option holders cannot participate in new issues of capital which may be offered to
shareholders prior to exercise.
A fair value of these options is assessed at grant date using a Monte Carlo simulation model in accordance with AASB2 Share-
based Payments. The options vest and expire at dates set out in the terms of the grant. The options cannot be transferred and are
not quoted on the ASX.
(c)
Summary of options granted under the Option Plan
The options outstanding at 31 December 2015 have an exercise price in the range of $0.17 to $0.75 (2014: $0.17 to $1.00). The
weighted average remaining contractual life for options outstanding at 31 December 2015 is 3.47 years (2014: 3.51 years). The
weighted average fair value of options granted during the year was $0.058 (2014: $0.035). There are 12,493,000 vested and
exercisable options at 31 December 2015 (2014: 13,823,000). There were 2,084,074 options exercised during 2015 (2014: Nil).
Movements in outstanding options
2015
2014
Balance at the beginning of the year
Granted
Forfeited/lapsed
Exercised
Balance at the end of the year
Vested and exercisable at year end
Number of
Options
38,292,000
27,133,518
(31,935,444)
(2,084,074)
31,406,000
12,493,000
Weighted
Average
Exercise Price
$
Number of
Options
Weighted
Average
Exercise Price
$
0.410
0.213
0.375
0.000
0.300
0.409
49,527,100
19,071,000
(30,306,100)
-
38,292,000
13,823,000
0.333
0.247
0.182
-
0.410
0.606
90
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
27.
Share based payments (continued)
Details of the share options outstanding at 31 December 2015 are detailed below:
Date of issue
17 October 2011
22 February 2012
28 March 2012
27 July 2012
12 November 2012
12 November 2012
12 November 2012
12 November 2012
15 February 2013
15 February 2013
15 February 2013
22 March 2013
3 May 2013
3 May 2013
4 June 2014
19 December 2014
19 December 2014
17 April 2015
17 April 2015
11 June 2015
11 June 2015
Balance at the end of the year
2015
Number of
Options
-
1,267,000
1,000,000
-
-
-
-
-
150,000
150,000
1,525,000
200,000
1,000,000
1,000,000
2,000,000
4,201,000
4,201,000
5,356,000
5,356,000
2,000,000
2,000,000
31,406,000
Average
Exercise Price
$
-
0.500
0.750
-
-
-
-
-
0.260
0.260
0.340
0.340
0.500
0.600
0.500
0.230
0.170
0.230
0.170
0.500
0.230
0.300
2014
Number of
Options
Average
Exercise Price
250,000
1,773,000
2,500,000
300,000
2,000,000
2,000,000
2,000,000
2,000,000
150,000
150,000
2,398,000
200,000
1,000,000
2,500,000
3,000,000
8,035,500
8,035,500
-
-
-
-
38,292,000
$
0.415
0.500
0.750
0.500
0.250
0.500
0.750
1.000
0.260
0.260
0.340
0.340
0.500
0.600
0.500
0.230
0.170
-
-
-
-
0.410
During the year to 31 December 2015, an additional 6,000,000 options were issued to directors and 21,133,518 options to
employees as part of the Company’s share option plan, with 31,935,444 options forfeited and 2,084,074 exercised, thus bringing
the options issued over ordinary shares in the Company to 31,406,000 as at 31 December 2015.
The Staff Option Plan offers individuals the opportunity to acquire options over fully paid ordinary shares in the Company. Share
options granted under the plan carry no dividend or voting rights. When exercised, each option is convertible into one ordinary
share subject to satisfying vesting conditions and performance criteria. The shares when issued rank pari passu in all respects with
previously issued fully paid ordinary shares. Option holders cannot participate in new issues of capital which may be offered to
shareholders prior to exercise.
(d)
Inputs for the measurement of grant date fair values
The grant date fair values of the options granted through the Staff Option Plan utilised assumptions underlying the Black-Scholes
methodology to produce a Monte Carlo simulation model which allows for incorporation of the performance hurdles that must be
met before the share based payment vests to the holder. Expected volatility is estimated by considering historic average share price
volatility for those options issued since February 2013. Prior to that date, due to the lack of sufficient share price history (TIG was
listed on 29 August 2011) the share price volatility was based on the historical volatility of a group of comparable companies,
based on their principal activities, for volatility estimation purposes. The expected dividend yield used in the valuation process has
been nil. The early exercise provision has been measured using a sell multiple of two times the exercise price. The post-vesting
withdrawal rate used in the valuation of the options is nil. The risk free rate is derived from the yield on Australian Government
Bonds of appropriate terms.
91
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
27.
Share based payments (continued)
The share options originally granted prior to the Initial Public Offer on 29 August 2011 were granted with a performance period of
12 months from the date of the IPO, with the ability for the Directors to extend the performance period for a further 12 month
period. In 2012 the Directors extended the performance period of these options for a further 12 month period to 29 August 2013.
In 2013 the Directors extended the performance period of these options for a further 12 month period to 29 August 2014. As a
consequence of each of these decisions these share options were revalued in accordance with accounting standard requirements.
These options were forfeited 29 August 2014 as a result of not meeting the required performance hurdle.
The inputs used in the measurement of the fair values at grant date of the options granted under the Staff Option Plan and
outstanding at year end are outlined below:
Option Grant
Date
Fair value
at grant
date
Share price
at grant
date
Exercise
price
Perfor-
mance
hurdle
Perfor-
mance
period
Expiry date
Risk free
interest rate
22 Feb 2012
28 Mar 2012
15 Feb 2013
15 Feb 2013
15 Feb 2013
22 Mar 2013
3 May 2013
3 May 2013
4 June 2014
19 Dec 2014
19 Dec 2014
17 Apr 2015
17 Apr 2015
11 Jun 2015
11 Jun 2015
$0.160
$0.127
$0.056
$0.079
$0.115
$0.100
$0.064
$0.065
$0.043
$0.030
$0.036
$0.049
$0.061
$0.021
$0.035
$0.325
$0.310
$0.220
$0.220
$0.220
$0.200
$0.170
$0.170
$0.140
$0.099
$0.099
$0.130
$0.130
$0.100
$0.100
$0.500
$0.750
$0.260
$0.260
$0.340
$0.340
$0.500
$0.600
$0.500
$0.230
$0.170
$0.230
$0.170
$0.500
$0.230
C
C
A
A
C
C
B
C
B
B
D
B
C
B
C
F
F
E
F
F
F
E
F
E
E
G
E
F
E
F
22 Feb 2017
28 Mar 2017
15 Feb 2018
15 Feb 2018
15 Feb 2018
22 Mar 2018
3 May 2018
3 May 2018
4 June 2019
28 Feb 2019
28 Feb 2019
17 Apr 2020
17 Apr 2020
11 Jun 2020
11 Jun 2020
3.76%
3.71%
3.05%
3.05%
3.05%
3.17%
2.69%
2.69%
2.69%
2.32%
2.32%
1.84%
1.84%
2.09%
2.09%
Note
A.
B.
C.
D.
E.
F.
G.
Performance hurdle: options vest if share price exceeds $0.50
Performance hurdle: options vest 12 months after grant date.
Performance hurdle: options vest 24 months after grant date.
Performance hurdle: options vest 437 days after grant date.
Performance period: 12 months after grant date.
Performance period: 24 months after grant date.
Performance period: 437 days after grant date.
92
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
27.
Share based payments (continued)
During the period Directors and employees were granted options. The grants of these options are:
Directors
C Wiggill
O Hegarty
B Gray
R Morgan
T Sitdekov
A Manini (Resigned 1 October 2015)
A Gray (Resigned 1 October 2015)
Employees
Total
28.
Financial instruments
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Finance leases
Options
granted
No.
1,500,000
1,500,000
-
500,000
500,000
1,500,000
500,000
6,000,000
21,133,518
27,133,518
31 December
2015
$’000
31 December
2014
$’000
7,074
2,145
9,219
410
4,018
4,428
20,465
4,701
25,166
848
8,836
9,684
The Royalty Agreement Liability represents a financial liability that is exposed to currency risk and market price risk and is carried
at fair value. For details refer to Note 24.
(a)
Accounting classifications and fair values
The following table shows the carrying amounts of financial assets and liabilities.
31 December 2015
Financial assets not measured at fair value
Cash and cash equivalents
Trade and other receivables
Financial liabilities not measured at fair value
Trade and other payables
Finance lease
Loans &
Receivables
Carrying amount
Other financial
liabilities
$’000
Total
7,074
2,145
9,219
-
-
-
-
-
-
410
4,018
4,428
7,074
2,145
9,219
410
4,018
4,428
93
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
28.
Financial instruments (continued)
31 December 2014
Financial assets not measured at fair value
Cash and cash equivalents
Trade and other receivables
Financial liabilities not measured at fair value
Trade and other payables
Finance lease
Fair value hierarchy
Loans &
Receivables
Carrying amount
Other financial
liabilities
$’000
20,465
4,701
25,166
-
-
-
-
-
-
848
8,836
9,684
Total
20,465
4,701
25,166
848
8,836
9,684
The Group uses various methods in estimating the fair values of its financial instrument. The different levels are as follows:
Level 1
Level 2
Level 3
quoted prices (unadjusted) in active markets for identical assets or liabilities
inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e.,
as prices), or indirectly (i.e. derived from prices)
inputs for the assets or liability that are not based on observable market data (unobservable inputs).
The following table presents the Group’s assets and liabilities measured and recognised at fair value by valuation model.
31 December 2015
Financial liabilities
Royalty Agreement Liability
Total
31 December 2014
Financial liabilities
Royalty Agreement Liability
Total
Level 1
$’000
-
-
-
Level 1
$’000
-
-
-
Level 2
$’000
-
-
-
Level 2
$’000
-
-
-
Level 3
$’000
-
-
-
Level 3
$’000
-
37,261
37,261
Total
$’000
-
-
-
Total
$’000
-
37,261
37,261
The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurement in Level
3 of the fair value hierarchy:
Opening balance of royalty agreement liability
Fair value adjustment to royalty agreement liability
Effect of movement in exchange rates
Total royalty agreement liability recognised at end of year
31 December
2015
$’000
31 December
2014
$’000
37,261
(40,468)
3,207
-
19,994
14,017
3,250
37,261
94
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
28.
Financial instruments (continued)
The value of the Bering Royalty Agreement liability is determined with reference to the value of the Amaam Project, which is
determined using a Discounted Cash Flow model. In the year to 31 December 2015, the value of the Amaam Project has been
significantly impacted by a decrease in coal price forecasts, which resulted in a significant decrease in the recoverable value of the
project. In addition to this there has also been a further revision to the Bankable Feasibility Study (BFS) completion date, with it being
extended by 36 months, to 1 January 2021. Due to the further deterioration in market conditions, the Company has conducted an
assessment of the probability factor as at 31 December 2015. Given the volatility in the market conditions, the Company believes a
rational investor would be more likely to maintain their equity interest, therefore the probability factor has been decreased. As a result
the royalty liability has also decreased, as it has become less likely that the option will be exercised. The movement in the royalty
agreement liability is a non-cash movement.
Sensitivity analysis
The calculation of the fair value of the option can be sensitive to a number of assumptions, including medium and long term
commodity prices and probability weighting of the likelihood that the option holder will convert the option into the revenue stream.
These assumptions can change over short periods of time which can have a significant impact on the carrying value of assets.
Although the Group believes that its estimate of fair value is appropriate, the use of different methodologies or assumptions could
lead to a different measurement of fair value. At 31 December 2015, the Bering Royalty Agreement Option listed in Level 3 above
is not sensitive to the inputs as a result of the extent to which the change in forecast coal prices has adversely effected the underlying
net present value of the Amaam Project. Accordingly, the Group determined that there are no reasonably possible changes in the
key assumptions that would impact the value of the Bering Royalty Agreement Option liability at 31 December 2015.
(b) Credit risk
Exposure to credit risk
Management monitors the exposure to credit risk on an ongoing basis. The maximum exposure to credit risk on financial assets
which have been recognised on the balance sheet are generally the carrying amount, net of any provisions. Current receivables net
of provision for doubtful receivables are not overdue or in default. The Group does not require collateral in respect of financial
assets.
The Group has treasury policies in place for deposit transactions to be conducted with financial institutions with a minimum credit
rating. At reporting date, cash is held with reputable financial institutions which all meet the Group’s minimum credit rating
required by the approved treasury policy.
Cash and cash equivalents
Trade and other receivables
Geographical information
The Group’s maximum exposure to credit risk for Trade and other
receivables at the reporting date by geographical region was:
Europe and the Russian Federation
Australasia
Carrying amount
2015
$’000
7,074
2,145
9,219
2,135
10
2,145
2014
$’000
20,465
4,701
25,166
4,689
12
4,701
95
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
28.
Financial instruments (continued)
Counterparty information
The Group’s maximum exposure to credit risk for Trade and other
receivables at the reporting date by type of counterparty was:
Other
Impairment losses
The ageing of the Group’s Trade and other receivables at the reporting date was:
2015
$’000
2014
$’000
2,145
2,145
4,701
4,701
Not past due
Past due 0-30 days
Past due 31-120 days
Past due 121 days to one year
More than one year
Gross
2015
$’000
Impaired
2015
$’000
Gross
2014
$’000
Impaired
2014
$’000
2,145
-
-
-
-
2,145
-
-
-
-
-
-
4,701
-
-
-
-
4,701
-
-
-
-
-
-
There was no provision for impairment at 31 December 2015 (2014: $Nil); therefore there has been no movement in the provision
for impairment for the year ended 31 December 2015.
(c)
Liquidity risk
Exposure to liquidity risk
Management monitors the exposure to liquidity risk on an on-going basis. Prudent liquidity risk management implies maintaining
sufficient cash reserves to meet the on-going operational requirements of the business. It is the Group’s policy to maintain sufficient
funds in cash and cash equivalents. Furthermore, the Group monitors its cash requirements and raises appropriate funding as and
when required to meet such planned expenditure.
The following are the contractual maturities of financial liabilities.
31 December 2015
Non-derivative financial
liabilities
Trade and other payables
Finance Lease
31 December 2014
Non-derivative financial
liabilities
Trade and other payables
Finance Lease
Contractual cashflows
Carrying
amount
$’000
Total
$’000
6 mths
or less
$’000
6-12 mths
$’000
1-2 yrs
$’000
2-5 yrs
$’000
More
than 5 yrs
$’000
410
4,018
4,428
410
4,018
4,428
848
8,836
9,684
848
9,304
10,152
410
1,148
1,558
848
3,592
4,440
-
1,148
1,148
-
3,060
3,060
-
1,722
1,722
-
2,652
2,652
-
-
-
-
-
-
-
-
-
-
-
-
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different
amounts.
96
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
28.
Financial instruments (continued)
(d) Market risk
(i)
Currency risk
Exposure to currency risk
Management monitors the exposure to currency risk on an ongoing basis. The Group operates internationally and is exposed to
foreign exchange risk arising from various currencies, primarily with respect to the US dollar (‘USD’) and the Russian Rouble
(‘RUB’).
The Group’s exposure to foreign currency risk was as follows:
Cash and cash equivalents
Receivables
Trade and other payables
Finance Lease
Gross exposure
Forward exchange contracts
Net exposure
USD
2015
$’000
RUB
2015
$’000
USD
2014
$’000
RUB
2014
$’000
6,610
1,338
-
(4,018)
3,930
-
3,930
338
787
(208)
-
917
-
917
19,286
1,969
-
(8,819)
12,436
-
12,436
43
2,712
(657)
-
2,098
-
2,098
Exchange rates used
The following significant exchange rates were applied during the year relative to one Australian dollar:
Average rate
2014
1.1094
0.0293
2015
1.3312
0.0219
Reporting date
spot rate
2015
1.3699
0.0187
2014
1.2258
0.0216
USD
RUB
Sensitivity analysis
A weakening of the AUD, as indicated, against the USD and RUB at 31 December 2015 would have the impact in equity and profit
or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered
to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest
rates, remain constant.
Strengthening
Weakening
Equity
$’000
Profit or
loss
$’000
Equity
$’000
Profit or
loss
$’000
437
102
1,382
233
437
102
1,382
233
(357)
(83)
(1,099)
(191)
(357)
(83)
(1,099)
(191)
31 December 2015
USD (10% movement)
RUB (10% movement)
31 December 2014
USD (10% movement)
RUB (10% movement)
(ii) Market price risk
Management monitors the exposure to commodity price risk on an on-going basis. The Group does not have any direct commodity
price risk relating to its financial assets or liabilities.
97
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
28.
Financial instruments (continued)
(iii)
Interest rate risk
Exposure to interest rate risk
Management monitors the exposure to interest rate risk on an ongoing basis. The Group’s exposure to interest rate risk relates
primarily to its cash and cash deposits. At the reporting date the interest rate profile of the company’s and the Group’s interest
bearing financial instruments was:
Fixed rate instrument
Financial assets
Financial liabilities
Variable rate instruments
Financial assets
Cash and cash equivalents
Financial liabilities
Interest rates used
The following significant interest rates have been applied.
2015
Australian cash deposit rate
2014
Australian cash deposit rate
Sensitivity analysis
Carrying amount
2015
$’000
-
4,018
4,018
7,074
-
7,074
2014
$’000
-
8,836
8,836
20,465
-
20,465
Average
rate
%
Reporting date
spot rate
%
2.09
2.50
2.00
2.50
An increase in interest rates, as indicated below, at balance dates would have increased equity and profit and loss by the amounts
shown below. This analysis is based on interest rate variances that the Group considered to be reasonably possible at the end of the
reporting period. The analysis assumes that all other variables, in particular exchange rates, remain constant. A reduction in the
interest rates would have had the equal but opposite effect to the amounts shown below, on the basis that all other variables remain
constant.
31 December 2015
Australian cash deposit rate (100 basis points increase)
31 December 2014
Australian cash deposit rate (100 basis points increase)
Group
Equity
$’000
Profit or loss
$’000
6
87
6
87
98
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
29. Operating Leases
Leases as lessee
Non-cancellable operating lease rentals are payable in:
Less than one year
Between one and five years
More than five years
Lease expense recognised in Profit or Loss
Operating lease expense
The Group leases office space under operating leases.
30.
Expenditure commitments
Exploration expenditure commitments
31 December
2015
$’000
31 December
2014
$’000
211
11
-
222
105
105
243
12
-
255
136
136
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration work
to meet the minimum expenditure requirements. The minimum exploration work required to be performed to maintain tenure in
the exploration licences granted in the Russian Federation is the performance of a minimum number of drilling metres to be
performed over the life of each exploration licence. These obligations are expected to be fulfilled in the normal course of operations.
Mining interests may be relinquished or joint ventured to reduce this amount. The various country and state governments have the
authority to defer, waive or amend the minimum expenditure requirements.
Finance Lease
Lease expenditure contracted and provided for:
Payable not later than one year
Payable later than one year, not later than five years
Payable later than five years
Future finance charges
Total lease liabilities
Current (Note 22)
Non-current (Note 22)
31 December
2015
$’000
31 December
2014
$’000
2,021
1,653
-
3,674
344
4,018
2,296
1,722
4,018
2,411
2,563
-
4,974
504
5,478
6,273
2,563
8,836
These finance lease commitments relate to the acquisition of a small fleet of mobile equipment to commence early stage
development at Project F Amaam North, and is based on the cost of the assets and are payable over a period of up to 24 months at
which point ownership of the assets transfers to the Group.
The finance lease liability was initially for USD $8.234 million, with advances paid of USD $4.191 million. The advances paid
unwind over a 12 month period from the commencement of the lease in September 2014. Terms and charges are determined on the
net position of the lease liability and advance.
In 2015, the terms of the CAT finance lease payment schedule and the security deposit were renegotiated, as a result of which the
term of the lease was extended until 2017 and the terms of the guarantee changed and the sum reduced. Details of the guarantee
are presented in Note 17. The finance lease liability outstanding as at 31 December 2015 is USD $2.932 million (AUD $4.018
million), with advances paid of $ Nil.
There are no other commitments as at reporting date.
99
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
31. Contingencies
Under the terms of the ASIC Class Order 98/1418, the Company and certain subsidiary have entered into approved deed of cross
guarantee of liabilities with the subsidiary identified in Note 36.
32. Related parties disclosure
(a)
Identity of related parties
The Group has a related party relationship with its subsidiaries (refer Note 34), key management personnel (‘KMP”) (refer Note
33) and Tigers Realm Minerals Pty Ltd (“TRM”). TRM is a related party as TRM is a substantial shareholder of the Company and
as the Group transacted with TRM in the reporting period. Pursuant to a services agreement dated 27 May 2011, TIG has a services
agreement with TRM for the provision of services including the secondment of staff and the provision of office accommodation.
It is the Group’s policy that the transactions are undertaken on an arm’s length basis.
(b)
Other related party transactions
In AUD
Group
TRM services provided
Payment to Director
Note
(i)
(ii)
Transactions
value
period ended
31 December
2015
$
Balance
outstanding
as at
31 December
2015
$
Transactions
value
period ended
31 December
2014
$
Balance
outstanding as
at
31 December
2014
$
(525,479)
-
(14,200)
-
(792,220)
(7,801)
(27,619)
-
Notes
(i)
(ii)
The Group has a payable to TRM. It is the Group’s policy that this outstanding balance is priced on an arms-length basis
and is expected to be settled in cash within 12 months of the reporting date. These balances are unsecured.
The Company signed a 12 month Consultancy Agreement to the value of GBP 50,000 with Thukela Resources Ltd, the
nominated consultancy company of the Director, Mr Craig Wiggill. The amount in 2014 represents the remaining balance
paid for services provided under that Consultancy Agreement. The Consultancy Agreement expired in December 2013,
and was not renewed.
(c)
Loan facilities from related party transactions
For the financial period ending 31 December 2015 and 2014 there were no loan facilities from related parties.
100
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
33. Key Management Personnel Disclosures
The following were key management personnel of the Company at any time during the reporting period and unless otherwise
indicated were key management personnel for the entire period.
Name
Position
Commencement Date
Chairman (prior to this was a Director
(Non-executive)
20 November 2012
Appointed as Chairman 1
October 2015
Directors
Craig Wiggill
Owen Hegarty
Ralph Morgan
Bruce Gray
Director (Non-executive)
Director (Non-executive)
Director (Non-executive)
Tagir Sitdekov
Director (Non-executive)
8 October 2010
1 April 2014
1 October 2015
1 April 2014
Antony Manini
Chairman
8 October 2010 Resigned 1 October 2015
Andrew Gray
Director (Non-executive)
28 March 2014
Resigned 1 October 2015
Senior Executives
Peter Balka
Interim Chief Executive Officer (prior
to this was the Chief Operating Officer)
1 January 2011
Appointed as Interim Chief
Executive Officer 1 October 2015
Denis Kurochkin
Chief Financial Officer
Scott Southwood
General Manager Marketing
David Forsyth
Company Secretary
21 July 2014
13 October 2013
8 October 2010
Craig Parry
Chief Executive Officer
12 November 2012
Ceased 1 October 2015
Chris McFadden
General Manager - Head of
Commercial, Strategy & Corporate
Development
1 January 2013
Ceased 1 August 2015
(a)
Compensation of key management personnel
The key management personnel compensation included in “Administration expenses” (see Note 10) and “Share-based payments”
(see Note 27) and is as follows:
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
2015
$
2,126,648
95,921
402,938
656,243
3,281,120
2014
$
1,927,279
108,929
-
847,981
2,884,189
(b)
Key management personnel compensation disclosures
Information regarding individual Directors’ and executives, compensation and some equity instrument disclosures as permitted by
Corporation Regulation 2M.3.03 and 2M.6.04 is provided in the Remuneration Report in Section 12 of the Directors’ Report.
101
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
33. Key Management Personnel Disclosures (continued)
(c)
Key management personnel and director transactions
A number of key management persons hold positions in TRM that result in them having control or significant influence over the
financial or operating policies of TRM. The terms and conditions of those transactions with TRM were no more favourable than
those available, or which might reasonably be expected to be available, on similar transactions with non-key management
personnel related entities on an arms-length basis.
The aggregate value of transactions and outstanding balances relating to transactions with TRM are disclosed in Note 32(b).
(d)
Movements in options
The movement during the reporting period in the number of options over ordinary shares in Tigers Realm Coal Limited shares
held directly, indirectly, or beneficially by the key management personnel and their related entities are set out below.
Held at
1 January
Granted as
remun-
eration
Exercis-
ed
during
year
Forfeited/Lapsed
during
year
Vested at 31 December
Held at 31
December
Total
Exer-
cisable
Not
exer-
cisable
Name
2015
Directors
AJ Manini 2
OL Hegarty
R Morgan
C Wiggill 6
T Sitdekov
B Gray 5
A Gray 3
3,000,000
2,000,000
1,000,000
1,000,000
1,000,000
1,500,000
1,500,000
500,000
1,500,000
500,000
-
-
1,000,000
500,000
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
Other key management
personnel
C Parry 1
P Balka
D Kurochkin
C McFadden 4
D Forsyth
10,729,000
2,846,111
3,862,000
-
1,282,000
1,328,000
2,525,222
2,194,815
1,755,444
611,111
422,222
194,815
12,964,000
-
-
-
3,037,444
961,778
197,778
S Southwood7
-
1,500,000
-
4,500,000
-
-
-
3,500,000
2,000,000
1,500,000
1,000,000
2,000,000
-
1,000,000
2,500,000
1,000,000
1,000,000
1,500,000
1,000,000
1,000,000
-
-
-
-
-
-
-
-
-
5,965,000
2,571,000
2,571,000
2,000,000
-
-
-
-
-
2,092,000
787,000
787,000
1,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.
2.
3.
4.
5.
6.
7.
Ceased as Chief Executive Officer on 1 October 2015.
Resigned as Chairman on 1 October 2015.
Resigned as Non-Executive Director on 1 October 2015.
Ceased as General Manager - Head of Commercial, Strategy & Corporate Development on 1 August 2015.
Appointed as Non-Executive Director on 1 October 2015.
Appointed as Independent Chairman on 1 October 2015.
Became a KMP as of 1 August 2015.
102
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
33. Key Management Personnel Disclosures (continued)
Held at
1 January
Granted as
remun-
eration
Exercised
during
year
Forfeited
during
year
Held at 31
December
Total
Exer-
cisable
Not
exer-
cisable
Vested at 31 December
Name
2014
Directors
AJ Manini
OL Hegarty
C Wiggill
A Gray
R Morgan 1
T Sitdekov 1
B Jamieson 2
B Gray 2
10,631,000
6,315,500
1,000,000
-
-
-
-
-
-
1,000,000
1,000,000
1,000,000
3,000,000
-
-
-
Other key management
personnel
C Parry 3
P Balka
10,852,400
2,729,000
2,974,650
2,582,000
D Kurochkin 4
-
-
C McFadden
1,091,100
1,154,000
D Forsyth
3,098,400
1,082,000
-
-
-
-
-
-
-
-
-
-
-
-
-
7,631,000
4,315,500
-
-
-
-
3,000,000
1,500,000
1,500,000
2,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
-
-
-
-
-
-
3,000,000
-
-
-
1,000,000
1,000,000
-
-
2,852,400
10,729,000
8,000,000
8,000,000
1,694,650
3,862,000
562,000
562,000
-
963,100
2,852,400
-
1,282,000
1,328,000
-
128,000
103,000
-
128,000
103,000
-
-
-
-
-
-
-
-
-
-
-
-
-
1
2
3
4
Appointed as Non-Executive Director during the year ended 31 December 2014.
Resigned as Non-Executive Director during the year ended 31 December 2014.
Resigned as Managing Director during the year ended 31 December 2014.
Appointed as Chief Financial Officer during the year ended 31 December 2014.
103
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
33. Key Management Personnel Disclosures (continued)
(e)
Movements in shares
The movement in the number of Tigers Realm Coal Limited shares held directly, indirectly, or beneficially by the key
management personnel and their related entities are set out below.
Note
Balance at
1 January
Acquisitions
Sales
Other
Changes
Balance at
31 December
2015
Directors
AJ Manini 2
OL Hegarty
C Wiggill 6
A Gray 3
B Gray 5
R Morgan
T Sitdekov
19,787,183
17,290,482
600,000
-
-
-
-
-
8,333,334
108,348,084
Other key management personnel
C Parry 1
D Kurochkin
S Southwood
P Balka
C McFadden 4
D Forsyth
-
-
4,414,728
-
-
820,371
400,000
9,414,029
-
-
611,111
308,695
136,700
422,222
-
(30,000)
197,778
-
-
-
-
-
-
-
-
(95,853)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,787,183
17,290,482
600,000
-
116,681,418
-
-
4,929,986
308,695
136,700
1,242,593
370,000
9,611,807
1.
2.
3.
4.
5.
6.
Ceased as Chief Executive Officer on 1 October 2015.
Resigned as Chairman on 1 October 2015.
Resigned as Non-Executive Director on 1 October 2015.
Ceased as General Manager - Head of Commercial, Strategy & Corporate Development on 1 August 2015.
Appointed as Non-Executive Director on 1 October 2015. Share movements are from the date of appointment.
Appointed as Independent Chairman on 1 October 2015.
104
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
33. Key Management Personnel Disclosures (continued)
Note
Balance at
1 January
Acquisitions
Sales
Other
Changes
Balance at
31 December
2014
Directors
AJ Manini
OL Hegarty
C Wiggill
A Gray1
B Gray4
R Morgan 1
T Sitdekov 1
19,687,183
16,712,114
500,000
-
-
-
-
Other key management personnel
C Parry 2
P Balka
D Kurochkin3
C McFadden
D Forsyth
4,354,728
577,947
-
400,000
9,139,561
100,000
578,368
100,000
-
-
-
-
50,000
242,424
-
-
274,468
1
2
3
4
Appointed during the year ended 31 December 2014.
Resigned as Managing Director during the year ended 31 December 2014.
Appointed as CFO during the year ended 31 December 2014.
Resigned as Non-Executive Director during the year ended 31 December 2014.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,787,183
17,290,482
600,000
-
-
-
-
4,404,728
820,371
-
400,000
9,414,029
105
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
34. Group entities
Significant subsidiaries
Parent entity
Tigers Realm Coal Limited
Subsidiaries
TR Coal International Limited
Tigers Realm Coal (Cyprus) Pty Ltd
Greaterbay Larnaca Finance (Cyprus) Pty Ltd 2
Eastshore Coal Holding Limited
Northern Pacific Coal Company
Rosmiro Investments Limited
Beringpromugol LLC
Beringtranscoal LLC
Port Ugolny LLC 4
Anadyrsky Investments Limited
Tigers Realm Coal Spain, SL1
Tigers Coal Singapore No. 1 PTE Limited 1
PT Tigers Realm Coal Indonesia 3
Country of
Incorporation
Ownership Interest
2014
2015
Australia
Australia
Cyprus
Cyprus
Cyprus
Russia
Cyprus
Russia
Russia
Russia
Cyprus
Spain
Singapore
Indonesia
100%
100%
100%
80%
80%
80%
80%
80%
100%
100%
100%
100%
N/A
100%
100%
100%
80%
80%
80%
80%
80%
N/A
100%
100%
100%
100%
1
2
Currently in liquidation.
Formerly Tigers Realm Coal Finance (Cyprus) Pty Ltd
Company has been liquidated
3
4 Acquired during 2014
35. Parent entity disclosures
As at, and throughout the financial year ended 31 December 2015, the parent entity of the Group was Tigers Realm Coal Limited.
Information relating to the parent entity follows:
Results of parent entity
(Loss) for the period
Total comprehensive income
Financial position of parent entity
Current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Total equity of the parent entity comprising
Share capital
Reserves
(Accumulated losses)
Total equity
Contingent liabilities of the parent entity
31 December
2015
$’000
(130,161)
(130,161)
9,016
9,016
-
-
9,016
151,185
6,355
(148,524)
9,016
31 December
2014* As
restated
$’000
(14,740)
(14,740)
965
138,057
-
-
138,057
151,185
5,235
(18,363)
138,057
The parent entity has contingent liabilities arising from its guarantees to each creditor of TR Coal International Limited under the
Deed of Cross Guarantee as discussed in Note 36.
Capital commitments of the parent entity
There is no capital expenditure contracted for by the parent entity not recognised as liabilities.
106
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
36. Deed of cross guarantee
Pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998, the wholly-owned subsidiaries listed below are relieved
from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and directors’ reports.
It is a condition of a Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The effect
of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the
subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the
Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also
given similar guarantees in the event that the Company is wound up.
The entities subject to the Deed of Cross Guarantee are:
Tigers Realm Coal Limited; and
TR Coal International Limited.
The Deed of Cross Guarantee was established on 22 November 2012.
A consolidated statement of comprehensive income and consolidated statement of financial position, comprising the Company and
controlled entities which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee
for the year ended 31 December 2015 is set out below.
Statement of comprehensive income and retained earnings
31 December
2015
$’000
31 December
2014* As restated
$’000
Continuing operations
Asset write-downs
Exploration and evaluation expenses
Share based payments
Administrative expenses
Impairment on related party receivable
Results from operating activities
Net foreign exchange gain / (loss)
Finance income
Net finance income/(expense)
(Loss) before income tax
Income tax (expense)
(Loss) from continuing operations
Discontinued operation
Loss from discontinued operation (net of tax)
(Loss) after income tax
Other comprehensive income
Foreign currency translation differences for foreign operations
Income tax on other comprehensive income
Total comprehensive (loss) for the period
(Accumulated losses) at beginning of year
Transfers to and from reserves
(Accumulated losses) at end of year
(Loss) is attributable to:
Owners of the Company
(Loss) for the period
(150)
(36)
(1,120)
(4,499)
(120,872)
(126,677)
1,755
3
1,758
(124,919)
-
(124,919)
-
(124,919)
-
-
(124, 919)
(55,106)
(180,025)
(180,025)
(180,025)
-
(526)
(524)
(7,814)
(14,240)
(23,104)
1,974
450
2,424
(20,680)
-
(20,680)
-
(20,680)
-
-
(20,680)
(34,426)
-
(55,106)
(55,106)
(55,106)
107
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
36. Deed of cross guarantee (continued)
Current Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Other current assets
Total current assets
Non-current assets
Related party receivables
Property, Plant and Equipment
Intangible assets
Total non-current assets
Total assets
Current Liabilities
Trade and other payables
Employee provisions
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Royalty agreement liability
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
(Accumulated losses)
Total equity attributable to equity holders of the Company
31 December
2015
$’000
31 December
2014* As restated
$’000
5,016
10
98
-
5,124
4,000
-
-
4,000
9,124
123
-
123
-
-
-
123
9,001
151,185
37,841
(180,025)
9,001
19,294
12
140
6
19,452
100,257
139
102
100,498
119,950
271
599
870
-
-
-
870
119,080
151,185
23,001
(55,106)
119,080
108
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
37. Non-controlling interest
The following table summarises the information relating to each of the Group’s subsidiaries that has a material non-controlling
interest (“NCI”), before any intra-group eliminations. There are no significant restrictions on the ability of the Group to use assets
and to settle liabilities.
31 December 2015
NCI percentage
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Carrying amount of NCI
Revenue
(Loss)
OCI
Total comprehensive income
(Loss) allocated to NCI
OCI allocated to NCI
Cash flows from
Operating activities
Investing activities
Financing activities
Net increase (decrease) in cash and cash
equivalents
31 December 2014
*As restated
NCI percentage
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Carrying amount of NCI
Revenue
(Loss)
OCI
Total comprehensive income
(Loss) allocated to NCI
OCI allocated to NCI
Cash flows from
Operating activities
Investing activities
Financing activities
Net increase (decrease) in cash and cash
equivalents
Eastshore Coal
Holding
20%
$’000
Rosmiro
Investments Limited
20%
$’000
Intra-group
eliminations
$’000
Total
$’000
1,391
7,394
(133)
(53,906)
(45,254)
(21,730)
-
(92,418)
2,620
(89,798)
(18,482)
523
(2,853)
-
3,297
444
3,602
1,610
(2,765)
(31,296)
(28,849)
(5,520)
-
(16,573)
2,110
(14,463)
(3,318)
422
(4,991)
(2,028)
7,445
426
-
-
-
(27,250)
(21,800)
945
Eastshore Coal
Holding
20%
$’000
Rosmiro
Investments Limited
20%
$’000
Intra-group
eliminations
$’000
Total
$’000
2,292
124,838
(323)
(104,151)
22,656
(3,771)
-
(18,909)
761
(18,148)
(3,782)
152
(344)
(14,397)
13,630
(1,111)
8,241
10,297
(7,874)
(24,364)
(13,700)
(2,624)
-
(8,230)
(556)
(8,786)
(1,645)
(111)
(59)
(20,240)
20,307
8
-
-
-
(6,395)
(5,427)
41
109
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2015
37. Non-controlling interest (continued)
There are no changes in the Group’s ownership interest in either Eastshore or Rosmiro during 2015.
38.
Subsequent events
There has not arisen in the interval between the end of the financial year and the date of this report, any transaction or event of a
material or unusual nature likely in the opinion of the directors of the Company to affect significantly the operations of the Group,
the results of those operations, or the state of affairs of the Group in future financial years.
39. Auditors’ Remuneration
Audit services:
Audit and review of financial reports (KPMG Australia)
Audit and review of financial reports (Overseas KPMG firms)
Other auditors – Non-KPMG firms
Audit and review of financial reports
Services other than statutory audit
Other services
Taxation compliance and advisory services (KPMG Australia)
Taxation compliance services (Overseas KPMG firms)
Total Services Provided
31 December
2015
$
31 December
2014
$
210,000
77,809
287,809
-
287,809
50,796
2,242
53,038
340,847
233,047
81,696
314,743
12,609
327,352
29,116
15,081
44,197
371,549
110
Tigers Realm Coal Annual Report 2015
Tigers Realm Coal Limited
Directors’ declaration
For the year ended 31 December 2015
1.
In the opinion of the Directors of Tigers Realm Coal Limited (‘the Company’):
(a)
the consolidated financial statements and notes that are set out on pages 52 to 110 and the Remuneration
report, identified within the Directors’ report, are in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2015 and of its
performance for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
2.
3.
4.
There are reasonable grounds to believe that the Company and the group entities identified in Note 36 will be
able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of
Cross Guarantee between the Company and those group entities pursuant to ASIC Class Order 98/1418.
The Directors have been given the declarations required by Section 259A of the Corporations Act 2001 from the
chief executive officer and the chief financial officer for the financial year ended 31 December 2015.
The Directors draw attention to Note 2(a) to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Dated at Melbourne this 22nd day of March 2016.
________________________________________________
Owen Hegarty
Director
111
Tigers Realm Coal Annual Report 2015
112
Tigers Realm Coal Annual Report 2015 113
Tigers Realm Coal Annual Report 2015 114
Tigers Realm Coal Annual Report 2015 Tigers Realm Coal Limited
SHAREHOLDER INFORMATION
1. Top 20 Shareholders as at 15 March 2016
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
BV MINING HOLDING LIMITED
TIGERS REALM MINERALS PTY LTD
HANATE PTY LTD
RDIF INVESTMENT MANAGEMENT
NAMARONG INVESTMENTS PTY LTD
PINE RIDGE HOLDINGS PTY LTD
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