Annual Report
2020
Contents
Highlights 2020
Chairman’s Review
Chief Executive Officer’s Report
Reserves and Resources
Operations Review
Financial Report
1
2
4
6
8
15
Our Company
Our Company
Tigers Realm Coal Limited
Tigers Realm Coal Limited (Tigers
Realm Coal, TIG, or the Company) is an
ASX-listed company producing coking
and thermal coal from its operations in
the Chukotka Autonomous Okrug
(District) on Russia’s east coast.
TIG’s aim is to become a significant
producer of coking coal supplying the
seaborne markets in Asia. The Company
is focused on the further exploration
and development of its high-quality
coking coal deposits and is committed
to creating sustainable benefits for
the communities and region in which
it operates.
The Company is developing two coking
coal projects. The Amaam North project
has been operational for four years
supplying unwashed coal products
to the North Asian steel and thermal
coal markets through our own port
at Beringovsky, some 35km from the
mining operation. The immediately
adjacent Amaam project remains in a
pre-development stage. The Amaam
basin contains significant resources of
quality coking coal and adjoins the site
of a potential new deep-water port which,
if constructed would allow an extended
shipping season together with the
direct loading of coal cargo to cape
sized vessels.
In 2020, the Company achieved an
increased annual production of 792kt
(2019: 750kt) and annual sales of 775kt
(2019: 581kt) notwithstanding the impact
of the COVID-19 Pandemic (“COVID-19”)
on seaborne coal markets. TIG also
assumed full operational control of all port
activities and increased transshipment
volumes to 760kt, an increase of 180kt
over the tonnage achieved in 2019.
Transshipment was carried out using
TIG’s four 500-tonne barges. In addition
to achieving significantly greater loading
volumes, TIG reduced transshipment
costs by more than half compared to
previous year.
In addition to improved operational
performance and notwithstanding the
extraordinary challenges arising from
COVID-19, TIG achieved several key
milestones necessary to assure long-
term shareholder value. Key among
these milestones were the completion of
design work for the coal processing plant
and ancillary coal handling facilities, the
signing of an equipment supply contract
with UK-based Derek Parnaby Cyclones,
Inc. (DPCI) for delivery of a modular coal
handling and preparation plant (“CHPP”)
and updating the JORC Resources
and Reserves Report at Amaam North.
With respect to the DPCI contract, TIG
anticipates delivery of the equipment to
Beringovsky in June 2021.
During 2021 TIG will be primarily focused
on the construction of the first processing
module of the CHPP with commissioning
works targeted for completion by August
2021. Should we meet these targets we
would accordingly anticipate the shipment
of our first cargoes of semi–hard coking
coal (“SHCC”) before the close of the
2021 shipping season.
The Company’s registered office
is located in Melbourne, Australia.
Management is principally located
in our offices in Moscow and on site
in Chukotka.
ABN 50 146 732 561
Tigers Realm Coal
Annual Report 2020
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.
Highlights 2020
Highlights 2020
+ TIG achieved zero Lost Time
Injuries (“LTI”) and reduced
the Total Reportable Injury
Frequency Rate (“TRIFR”)
from 4.0 to 3.08
+ Mining volumes increased
year-on-year by 6% from
750kt to 792kt. Sales volumes
increased by 33% from 581kt
to 775kt. The significant
increase in sales volumes
was enabled as a result of
increased transshipment
capacity. TIG loaded 760kt
with our own 500-tonne
barges. This volume
represents a historical
record for Beringovsky
port and an increase of
31% over the previous year
+ Transhipment costs1 per tonne
sold decreased to A$6.95
(US$5.03) compared to
A$16.19 (US$11.26) in 2019
fully vindicating our decision
to take over all Beringovsky
port activities. Key specific
drivers included having all four
500-tonne barges available
at the start of the navigational
season, improved pre-season
dredging together with generally
improved operational and
maintenance procedures
+ The average cost2 per tonne
of coal mined decreased
from A$47.49 (US$33.03) in
2019 to A$43.68 (US$31.57)
in 2020, mainly as a result
of efficiencies gained from
utilization of heavier equipment
brought to the site in 2019
and the depreciation of the
Russian Rouble relative to
the Australian dollar
+ TIG signed an equipment
supply contract with DPCI for
supply of a modular CHPP.
Installation of the CHPP is
central to completing the
next phase of our development
strategy. The modular CHPP
concept was chosen with the
help of leading international
coal preparation experts
and taking into account the
location and climate conditions
of TIG’s operations, with the
various processing elements
designed to optimise yield
and product quality on the
run-of-mine coal material
+ TIG completed a fully
underwritten 1 for 1.4 pro-rata
accelerated renounceable
entitlement offer (“Entitlement
Offer”) primarily for CHPP
funding but also to provide
additional working capital
for the Company. A total
A$43.5 million was raised
in the Offer, which was sub-
underwritten by Dr. Bruce Gray,
a major TIG shareholder, and
which received strong support
from a number of other
shareholders
1. Transshipment costs include costs incurred to transship coal from the stockpile to bulker.
2. The average cost per tonne of coal mined includes all costs to mine and haul coal to the stockpile.
Annual Report 2020
1
1
Annual Report 2020Tigers Realm Coal
Chairman’s
Review
Dear Shareholders,
Despite the extraordinary
challenges faced during 2020,
our Company has shown both
tremendous resilience to deep
market uncertainties as well as
ongoing commitment to the
steady achievement of the agreed
strategic objective of growing
our operation both in terms of
sustainability as well as materiality
to the markets we target.
During the reporting period
we faced multiple uncertainties,
primarily triggered by the
COVID-19 epidemic, including
sharp contractions in coal
prices both in thermal as well
as metallurgical markets, all
manner of challenges to our
company logistics in relation to
the movement of men, mining
equipment and materials and of
course our saleable product. The
management team’s handling of
these uncertainties, together with
the complications of continued
operation of the mine and port as
well as playing a supportive role to
our local and regional community
partners is to be commended.
The deep level of support that we
have received from local and state
government together with their
understanding of our need for
continuity of operations which,
whilst balancing our key priority
of the safety and security of our
workforce and local community,
have allowed us to continue on
our development pathway requires
our acknowledgement and thanks.
The safety of our employees and
local communities is a core element
within the Board’s objectives and
I am particularly pleased that our
safety record continues to improve
at site. The fact that TIG achieved
zero Lost Time Injuries and was
able to reduce the Total Reportable
Injury Frequency Rate by 23% is
illustrative of an ongoing emphasis
by the senior team on our core
values of care and respect.
In January 2021 TIG successfully
completed an Entitlement Offer,
raising A$43.5 million in order
to finance the CHPP as well as
to provide additional working
capital to the Company. I would
like to express my appreciation
to all TIG shareholders who
participated in the Offer expressing
particular thanks to TIG’s largest
shareholder, Dr. Bruce Gray, who
sub-underwrote the Offer, thereby
assuring both its success and
TIG’s ability to continue building
shareholder value.
2
Tigers Realm Coal
Annual Report 2020
“The fact that TIG
achieved zero Lost
Time Injuries and was
able to reduce the
Total Reportable Injury
Frequency Rate by
25% is illustrative of
an ongoing emphasis
by the senior team
on our core values
of care and respect.”
We are very pleased to have
appointed David Swan to the Board
as an independent Non-Executive
Director on 26 August 2020. David
has extensive experience in the
natural resources sector and his
experience and insights will be of
great benefit to us as we continue
on our growth path.
I would like to thank all our
employees and stakeholders,
the senior management team
as well as our Board, for their
perseverance and resilience during
this difficult and challenging year.
I look forward to the continued
delivery of growth, profitability
and transformative coal processing
infrastructure during 2021.
Craig Wiggill
Chairman
Tigers Realm Coal
Annual Report 2020
3
Chief Executive
Officer’s Report
“Our resilient
business model
allowed the Company
to quickly adjust
to the challenges
of COVID-19”
During 2020 we signed a contract
for supply of a modular CHPP,
progressed the civil engineering
works related to the CHPP and
updated Amaam North JORC
Resources & Reserves. TIG’s
mining volumes increased by 6%
and shipping volumes by 31% year
– on – year. Overall, 17 cargoes
with a total of 760kt were shipped
during the year. The cargoes
consisted of 602kt of thermal coal
and 158kt of metallurgical coal.
Additionally, TIG completed several
sales to customers within the local
market, bringing total sales to
775kt. I am particularly pleased that
through increasing sales volumes
and a focus on cost controls, TIG
managed to reduce FOB1 cost per
tonne of coal sold by nearly 17%,
from A$64.26 in 2019 to A$53.45
for 2020. This reduction was made
possible by more than halving
transshipment costs after taking
over operational control of our port.
Dear Shareholders,
Thank you for your continued
support during this extraordinary
and challenging year.
The COVID-19 has been an
extraordinary challenge for our
Company and for the whole world,
but I am proud of TIG’s response
to the challenges encountered in
2020. The Company’s top priority
is to protect the health, safety
and wellbeing of our people
and the communities that host
our business. We have taken
actions to protect our workforce
against COVID-19 by ensuring the
availability of self-isolation facilities
at our operational site, providing
employees with necessary
personal protective equipment,
implementing remote working
for employees based in Moscow
and ensuring extensive testing
of all employees arriving at the
operational site. We had no LTI
during this year and our TRIFR
fell 23 per cent to 3.08 per million
hours worked.
Our resilient business model
allowed the Company to quickly
adjust to the challenges of
COVID-19. Increased sales
volumes and measures to protect
cash flows, including deferrals of
capital expenditures, temporary
reductions in senior management
salaries and cost efficiencies
helped us to offset a material
portion of the impact of lower coal
prices during the 2020 shipping
season.
1. All costs to mine and transship from the stockpile to bulker per tonne of coal sold.
4
Tigers Realm Coal
Annual Report 2020
At TIG we are committed to
operating in a responsible manner
across all aspects of our business.
In 2020 we continued working with
all local stakeholders to ensure
ongoing sustainable development.
Local and indigenous community
representatives from Alkatvaam,
Beringovsky and Anadyr visited
our operations throughout the
year and are informed about our
future plans. We continue providing
funding for indigenous community
projects in cooperation with the
Association of Indigenous People
of Chukotka.
I would like to thank the Board
for their constructive approach
to working with our team, our
staff for their dedication and
our shareholders for their
continued support.
Dmitry Gavrilin
Chief Executive Officer
Tigers Realm Coal
Annual Report 2020
5
Reserves and Resources
Coal Resources for Amaam North – Project F (100% basis)
Resource Category
MeasuredC – Coking
IndicatedB – Coking
InferredA – Coking
IndicatedB – Thermal
InferredA – Thermal
Total (Mt)
Open Pit (Mt)
23.0
18.5
20.2
2.1
0.7
64.5
Underground (Mt)
1.2
5.8
14.1
-
-
21.1
Tonnage (Mt)
85.6
Relative
Density
1.39
Ash
(%)
17.32
NB: Coal qualities on an air-dried basis.
Inherent
Moisture
(%)
1.42
Volatile Matter
(%)
Gross
Calorific Value
(kcal/kg)
27.15
6,770
Total (Mt)
24.2
24.3
34.3
2.1
0.7
85.6
Total
Sulphur
(%)
0.29
The Amaam North (Project F) Coal Resources are based on a Coal Resource Estimate prepared by Measured Group
in October 2020.
Coal ReservesE for Amaam North – Project F (100% basis)
Coal Type
Coking
Thermal
Total (Mt)
Recoverable Reserves (Mt)
Marketable Reserves (Mt)
Proved
13.2
1.8
15.0
Probable
8.1
0.7
8.8
Total
21.3
2.5
23.8
Proved
8.2
1.6
9.8
Probable
5.0
0.6
5.6
Total
13.2
2.2
15.4
The Amaam North (Project F) Coal Reserves are based on a Coal Reserve Estimate prepared by Optimal Mining Solutions
in November 2020.
Coal Resources for Amaam (100% Basis)
Resource Category
MeasuredC – Coking
IndicatedB – Coking
InferredA – Coking
Total (Mt)
Open Pit (Mt)
3
89
336
428
Underground (Mt)
-
2
91
93
Tonnage (Mt)
521
Relative
Density
1.62
NB: Coal qualities on an air dried basis.
Ash
(%)
33.6
Inherent
Moisture
(%)
1.69
Volatile
Matter
(%)
23.3
Fixed
Carbon
(%)
39.1
Gross
Calorific
Value
(kcal/kg)
5,114
Total (Mt)
3
91
427
521
Total
Sulphur
(%)
0.84
The Amaam Coal Resource Estimate was prepared by Resolve Coal in July 2015.
Exploration TargetsD for Amaam and Amaam North (100% basis)
Amaam North (Mt)
90 to 370
Amaam (Mt)
25 to 40
Total (Mt)
115 to 410
6
Annual Report 2020Tigers Realm Coal Notes to Reserves and Resources
The company is not aware of any new
information or data that materially affects the
information included in this report and at the
time of this report all material assumptions
and technical parameters underpinning the
estimates continue to apply and have not
materially changed. Coal Resources and Coal
Reserves are reported in 100 percent terms
(unless otherwise stated). Coal Resources are
reported inclusive of the Coal Resources that
have been converted to Coal Reserves (i.e. Coal
Resources are not additional to Coal Reserves).
Competent Persons 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 has sufficient experience which 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 2012 Edition of the
‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’.
Neil Biggs consents to the inclusion in the
report of the matters based on his information
in the form and context in which it appears.
Competent Persons Statement
– Amaam North
The Amaam North Project F Coal Resources are
based on a Coal Resource Estimate prepared
by Measured Group in October 2020.
The information presented in this report relating
to Coal Resources is based on information
compiled by Marcus Trost, Principal Geologist
(MAusIMM) and modelled by Lyon Barrett,
Principal Geologist (MAusIMM) of Measured
Group and reviewed by Peter Handley, Principal
Geologist (MAusIMM) of Measured Group.
Marcus Trost has worked as a geologist and
manager in the coal industry for over 15 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’.
Lyon Barrett has worked as a geologist and
manager in the coal industry for over 20 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’.
Lyon Barrett and Marcus Trost consent to the
inclusion in the report of the matters based
on information in the form and context in
which it appears.
The information in this report relating to the
Project F Reserve Estimate is based on
information compiled by Tony O’Connell,
Director of Optimal Mining Solutions Pty Ltd
and a Competent Person who is a member
of the Australasian Institute of Mining and
Metallurgy (AusIMM). Tony O’Connell is a
full-time employee of Optimal Mining Solutions
and has sufficient experience that is relevant
to the style of mineralisation, type of deposit
under consideration and to the activity being
undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’.
Tony O’Connell consents to the inclusion in the
report of the matters based on his information
in the form and context in 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.
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. An Indicated Resource may be
converted to a Probable Ore Reserve.
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.
7
Annual Report 2020Tigers Realm Coal Operations Review
South
Yakutsk
Basin
~ 35km to port
TIG Project
British
Columbia
Kuzbass
Basin
2,000 – 5,000km
railroads to ports
North Asian
Market
8 days
8 days
shipping
shipping
1,100 km
railroads to ports
1,100km railroads to ports
1,100km railroads to ports
and 14 days shipping
and 14 days shipping
115 – 250km railroads to ports
115 – 250km railroads to ports
and 13 days shipping
and 13 days shipping
Bowen
Basin
Major coking coal basins
Railroad directions
Sea directions
TIG projects
LEGEND
Overview of
TIG’s Operations
Tigers Realm Coal Ltd’s (ASX: TIG)
strategy is to become a significant
supplier of coking coal to the seaborne
market via the progressive development
of the Amaam Coking Coal Field.
The Amaam Coking Coal Field
comprises two large coal resource
deposits in the Far East of the
Russian Federation:
• Amaam North (TIG 100% interest):
a large coal basin, of which
Fandyushkinskoye Field is currently
in the production expansion phase.
In December 2019, Rosnedra, the
Russian natural resource licencing
authority, approved a Mining and
Excavation Plan (“TPRM”) for the
integrated development of the
Fandyushkinskoye and Zvonkoye
licence areas. Consequently, future
references to Amaam North will refer
to the unified development of both
license areas.
• Amaam Coal Deposit (TIG interest
– 80%) a potentially large-scale
coking coal project, which has the
potential for TIG to increase overall
production to 5Mtpa. Expansion to
this production level will, however,
require significant investment in
infrastructure.
The Amaam and Amaam North
licences cover an area of about 709
sq. km in the Chukotka Autonomous
Okrug (District) of Russia. Our current
operations are located approximately
230km south of the regional capital of
Anadyr and approximately 35km to the
south east of Beringovsky township
and TIG’s wholly owned coal
terminal and port infrastructure.
Amaam North is comprised of:
• Exploration Licence No. AND
01203 TP (Levoberezhny “Left
Bank” Licence), being the broader
exploration licence from which the
following Exploration and Extraction
(Mining) Licences have been
carved out to date;
• Mining Licence No. AND 15813 TE
(Fandyushkinskoye Field); and
• Mining Licence No AND 01314 TE
(“Zvonkoye”), issued in 2018 for
a 20-year term.
TIG operates its own infrastructure
with coal haulage along its own
35km, all-season pit to port road
and Beringovsky coal terminal, fully
owned and operated by TIG with our
four 500-tonne barges. For the 2021
navigational season, we will also
have two 100t barges in operation.
8
Tigers Realm Coal
Annual Report 2020
2020
Improving
operational
efficiency
Higher volume and lower
costs of both mining and
port operations
31% increase
in transshipment volumes with
57% decrease
in transshipment costs
compared to 2019 as a result of
TIG taking full operational control
of all port activities
33%
increase in sales volumes
0 LTI
TRIFR decreased from
4 to 3.08 per million hours
A$43.5m
RAISED
during the Entitlement offer
in order to finance the CHPP
and provide additional working
capital to the Company
CHPP supply
contract signed
CHPP planned for delivery
in June 2021
TIG’s strategy with respect to
developing the Amaam Coking
Coal Field is currently envisaged
in three stages:
Stage 1: Development of Amaam
North up to a 1.5+Mtpa primarily
coking coal operation shipped
through the Beringovsky Port,
split into 2 phases:
• Phase One: up to 0.75Mtpa utilizing
existing infrastructure and mining
and haulage fleet (completed);
• Phase Two: 1.5+Mtpa, with 225kt
oxidised and 1.275Mt through CHPP
to get 830kt of washed coal with 65%
yield, an upgrade of mine and port
infrastructure, and increasing mining
and haulage fleet capacity.
Stage 2: Amaam North production
increases up to 2Mtpa
Stage 3: Development of Amaam.
TIG has successfully completed
Phase One of Stage 1 and is working
on implementing Phase Two to increase
Amaam North coal production and
sales volumes. In order to achieve this
next strategic objective at the Amaam
North deposit, TIG is focused on
installing the processing capacity
to enable the Company to sell a
higher-value product of consistent
quality into the Semi-Hard coking
coal (SHCC) markets. This SHCC
product will allow TIG to achieve
significantly higher average prices than
those currently being achieved for a
basket of unwashed coal products.
In October 2020 TIG signed a contract
for supply of a modular CHPP with
DPCI. Work under the contract is
proceeding on schedule for delivery
to Beringovsky in June 2021. Detailed
engineering works and preparation for
civil construction are also underway.
TIG expects commissioning works to
be finished in 2021 so as to allow the
first SHCC product to be sold during
the 2021 shipping season.
Management is optimistic that a
material increase in production is
achievable. In order to obtain sufficient
geological evidence of the additional
mineable coal required to increase
production, TIG will need to perform
further drilling & exploration works.
The ability to optimally integrate the
Amaam project into the overall Amaam
Coking Coal Field development
and maximise the extent to which
investment is made both in processing
capacity and logistics infrastructure
is currently under review.
Tigers Realm Coal
Annual Report 2020
9
Operations Review continued
Operations Update
COVID-19
A number of measures were
implemented to protect TIG’s
employees during the COVID-19
Pandemic. All employees arriving
at the Chukotka operational site were
tested for COVID-19 upon arrival.
From April 10 to July 6 all new arrivals
also stayed in self-isolation for 14 days.
TIG secured self-isolation facilities in
Beringovsky for over 90 staff members
who arrived during the planned shift
change, which was postponed by
1 month to ensure the safety of TIG’s
staff members.
TIG provided its employees with the
recommended personal protective
equipment. Additional measures
were implemented at the port to ensure
continuity of our loading operations.
Such measures included insuring that
arriving bulker crews were checked by
a medical professional prior to the start
of loading.
Management has been engaging with
the relevant governmental agencies
and bodies on all COVID-19-related
measures. To fight the spread of
COVID-19 TIG has offered additional
support to Chukotka and the Company
has purchased and donated high
accuracy coronavirus tests and
personal protective equipment for
local hospitals.
Health and Safety
Health and safety are at the forefront
of our considerations. During 2020 the
company continued to improve and
support its workplace safety culture.
TIG’s cumulative Total Reportable
Injury Frequency Rate (“TRIFR”)
decreased to 3.08 compared with
4.0 per million hours worked in 2019
as a result of TIG’s HSE-related
activities. There were no LTI in 2020.
The company continued HSE
inductions for all new employees
in addition to supplementary HSE
reviews for existing employees.
HSE risk assessments and incident
follow-up procedures were further
expanded this year, emphasising
working conditions throughout our
operations, including but not limited to:
• Road safety culture and traffic
management measures taking
into account the effect of weather
and road conditions, driver health
and well-being, equipment condition
and incident follow-up actions;
• Staff well-being: the role of staff
scheduling, rest and the effects
of fatigue and diet;
• Workplace organisation and safety;
• Guidance and awareness: Weekly
safety briefings, cautioning and
informative signage on all objects;
• The continued evolution of
mine rescue team operational
guidelines; and
• Safety passports maintained to
ensure active awareness of the
importance which safety plans
in the execution of daily activities.
The Company is committed to
continuously improve its safety systems
and performance via the development
of a site safety culture that puts
controls in place for potential hazards.
Development and management of
the Company’s Risk Register is also a
significant tool to enhance the Health
and Safety programme.
Environment &
Stakeholder Relations
Environment
The Company continues to work on
managing the impact of its operations
on the local environment.
In 2020, we concentrated on the
following activities:
• Monthly monitoring of air and water
quality in the areas potentially
“The Company
is committed to
continuously improve
its safety systems and
performance via the
development of a site
safety culture that puts
controls in place for
potential hazards.”
impacted by production activities
(including acquisition of the requisite
certified laboratory equipment)
• Deployed dust covers to control
coal dust at the stockpiles in
Beringovsky port
• Completed reconstruction of storm
water drainage in Beringovsky port
• An emissions permit was received
for the mine through 2024.
• The plans of water management
and water protection measures
for the Fandyushkin Stream and
the Bering Sea were drawn up
and submitted to the regulatory
authorities for approval.
• Programs of industrial environmental
control have been developed for the
camp, mine, and port
• Continued clean-up of old legacy
scrap metal and polluting materials
at the port and within all areas of
operational footprint
Stakeholder Relations
Our operations are located in a remote
part of the Russian Federation, and
our activities need to complement the
requirements of local communities and
their future plans and aspirations. We
place a priority on attracting employees
from the local community whenever
possible and providing them with
training opportunities.
10
Annual Report 2020Tigers Realm Coal In 2020, TIG played a leading role in a
number of events and initiatives aimed
at supporting the local community:
• Three indigenous community
projects were selected for funding
support by TIG in cooperation with
the Association of Indigenous People
of Chukotka;
• In early June representatives of the
Association of Indigenous People of
Chukotka visited the port to evaluate
the impact of our operations on the
local environment. TIG demonstrated
the operation of the recently repaired
coal conveyor and our fleet of 500kt
barges;
• TIG has provided charitable
assistance to local school students;
• On World Environment Day (June
7th) for the third year in a row TIG
staff organized trash and industrial
garbage collection in the township
to improve the safety and overall
quality of the local environment;
• Beringovsky office staff took part in
cleaning the Lakhtin lagoon together
with the eco-activists of Beringovsky;
• TIG has created a hotline for
enquiries regarding mining and
environment in Beringovsky.
Licensing & Exploration Activities
The Company is in compliance with
its licence obligations.
Renewal of the Amaam exploration
license – AND 01379 TP (formerly AND
01277 TP) was completed in June 2020.
As at 31 December 2020, TIG has the following licences in effect:
Site
Licence No.
Licence Type
Expiry Date
Licence Holder
Amaam North
BPU1
BPU
BPU
Amaam
NPCC2
NPCC
NPCC
Amaam North ‘Fandyushkinskoye’
Amaam North ‘Zvonkoye’
Alkatvaam – Levoberezhny
AND 15813 TE
AND 01314 TE
Mining
Mining
AND 01203 TP
Exploration
‘Zapadny’
AND 01278 TE (formerly AND 01225 TE)
‘Nadezhny’
AND 01288 TE
Mining
Mining
‘Area 4’
AND 01379 TP (formerly AND 01277 TP)
Exploration
1. LLC Beringpromugol (‘BPU’), wholly owned TIG subsidiary.
2. JSC Northern Pacific Coal Company (‘NPCC’), 80% beneficially owned by TIG.
Dec 2034
Sep 2038
Dec 2025
Mar 2033
July 2037
Jun 2027
11
Annual Report 2020Tigers Realm Coal Operations Review continued
Amaam North Snapshot
Mining Operations
Mining volumes increased year-on-
year by 6% from 750kt to 792kt and
comprised of 494kt of thermal coal
(2% reduction from last year’s 506kt)
and 298kt of metallurgical coal
(22% increase from 244kt in 2019).
The higher stripping ratio in first
half of 2020 was largely a result
of pre-stripping activities in March.
By engaging in pre-stripping only,
we were able to focus our mining
equipment on overburden removal
at a time when weather conditions
typically impede the efficiency
and safety of pit – to – port haulage
operations. In the second half of
2020, the stripping ratio decreased
with 4,804bcm of waste overburden
removed at an average stripping
ratio of 6.1bcm:t in 2020.
ROM coal mined
Coal delivered to Beringovsky Port
Coal sold
Total coal stocks
Waste mined
ROM strip ratio
kt
kt
kt
kt
Kbcm
bcm:t
Q1
137
96
5
568
1,149
8.4
Q2
161
161
139
590
1,139
7.1
Q3
266
266
442
414
1,303
4.9
Q4
228
109
189
453
1,186
4.1
2020
Total
792
632
775
453
4,804
6.1
12
Annual Report 2020Tigers Realm Coal Haulage Operations
Haulage operations centre around
our fleet of 20 Scania trucks. Our total
fleet capacity remained constant from
2019 to 2020. In August, TIG achieved
a peak monthly haulage rate of 100kt
from pit to port.
The Company continued to improve
the condition of the road and its fleet
management practices, the emphasis
being on road safety culture and driving
conditions to minimise traffic related
incidents. TIG carried out construction
works including new culverts and
river crossings to improve safety
and haulage efficiency and reduce
environmental impact.
Sales and Marketing
During 2020, TIG delivered 17
cargoes with a total of 760kt of coal.
This consisted of 602kt of thermal
and 158kt of semi-soft coking coal
(“SSCC”). COVID – 19 affected demand
for both TIG’s metallurgical and thermal
coal products generally, but most
significantly in its core Japanese
customer base. Consequently, sales
were concentrated mostly in China and
Vietnam during 2020. Sales were also
made to a long-standing customer in
Taiwan and a trial SSCC cargo was
delivered to Korea. In addition, three
thermal coal cargos were sold to
domestic customers.
TIG continued to focus on quality
control and building long-term
customer relations. As a result of our
focus on quality, we experienced no
quality-related claims during the year
while continuing to ship increased
volumes to several key customers with
whom we have developed a robust and
beneficial working relationship.
The sharp contractions in coal prices
during the first nine months of 2020
were subsequently reversed in the
fourth quarter by resurgent Chinese
demand and the partial rebalancing of
supply. Unfortunately, as TIG’s shipping
season ended in early December, the
depressed prices during the first nine
months had a substantial negative
impact on TIG’s financial performance
for the year.
After falling from early 2020 through
September, the Asian coking coal
market recovered in Q4 2020, driven
by demand in China, India and South
East Asia together with the partial
re-start of blast furnaces in Japan.
The market was severely disrupted
by Australia – Chinese trade disputes
which impacted trade flows for coking
coal and effectively split the market into
two segments with two different price
structures – China (the non-Australian
Supplier’s Market), and the rest of the
world (where Australian coking coal
has been in oversupply).
Demand for TIG SSCC suffered
significantly in 2020 due to the
temporary suspension of operations
at several blast furnaces by our major
Japanese customers. These customers
are now requesting SSCC cargos
for 2021 delivery. However, with the
commissioning of the CHPP in 2021,
much of the raw coking coal feedstock
will be washed to produce semi-hard.
The demand from Japan bodes
well for future sales of higher
quality washed coking coal from
Amaam North.
In terms of thermal coal, production
this year was mostly of higher ash
(28% – 30% ash) material with calorific
value of around 5,000 – 5500 kcal/kg
NAR. It is expected that this quality of
production will continue during 2021
until the CHPP is commissioned, and
that high-ash thermal coal sales into
China and Vietnam will be the mainstay
of TIG’s marketing efforts until washing
commences and SHCC production
begins.
2020 Beringovsky Port
Operations
With transhipment volumes of
760kt – a 31% increase over the
previous year – TIG’s port performance
improved dramatically during the first
full year during which TIG operated
the port itself. Beyond the increased
volumes, transshipment costs per
tonne sold decreased to A$6.95
(US$5.03) compared to A$16.19
(US$11.26) in 2019 – a decrease
of 57%.
Preparations for the season included
extensive dredging works, bringing to
site and training over 70 port personnel,
repair works on housing facilities
and other lodging arrangements,
maintenance of the coal loading
system, repair works on our fleet
and obtaining all necessary licenses
and approvals.
Key figures for TIG port operations are set out in the table below:
Coal transshipped
Number of barges in use
Number of weather working days per month
June
159
4
July
202
4
Aug
143
4
Sept
153
4
Oct
Nov
Dec
Total
63
4
31
4
760
9
4
20.2
23.2
26.0
19.4
14.5
10.5
3.3
117.1
kt
units
days
13
Annual Report 2020Tigers Realm Coal
Operations Review continued
Amaam Overview
TIG holds an 80% interest in the
Amaam tenement and licences
covering the area of 231km2, located
30km from the Bering Sea coast.
The Amaam Project is a multi-seam,
moderate dipping deposit within a
synclinal basin. Coal is in the Middle
Chukchi coal formation and is divided
into four main areas by north-west
trending faults.
With the company’s primary focus on
Amaam North, there was no operational
activity during 2020 at Amaam other
than preparatory geological and project
work being performed as part of future
drilling activities.
Corporate Activities
As part of the Entitlement Offer
launched on 18 December 2019, a
retail offer component was completed
on 5 February 2020 and the shortfall
bookbuild was closed on 12 February
2020. On 5 June 2020 at the Annual
General Meeting TIG’s shareholders
approved the issue to Dr. Bruce Gray of
1.3 billion shares of shortfall bookbuild,
resulting in receipt of A$13m (US$9m)
on 23 June. A total of A$58.2 million
was raised during this Entitlement Offer.
In June 2020, in light of the prevailing
market conditions, TIG undertook
a review of all operations, capital,
operating, and overhead expenditures.
As a result, TIG reduced certain
operating and overhead expenses
and delayed some capital expenses.
Some staff salaries were reduced.
The Company agreed to proposals
by the CEO, Dmitry Gavrilin, and the
CFO, Dale Bender, that their salaries
be reduced by 10%. Moscow office rent
expenses have been reduced by two
thirds by moving to smaller premises
at a lower cost.
On 11 January 2021 the shortfall
bookbuild was completed. The
bookbuild process was managed and
fully underwritten by CLSA Australia Pty
Ltd and sub-underwritten by Dr. Bruce
Gray. Pursuant to his sub-underwriting
agreement, 2.7 billion shares were
issued to Dr. Gray, increasing his
overall shareholding in the TIG
to 59.95%. In total TIG raised
A$43.5 (US$32) million.
In August 2020 Ralph (Tav) Morgan
has resigned from Board, effective
26 August 2020. At the same date
David Swan was appointed as an
Independent Non – Executive Director.
Proceeds from the entitlement offer
will be used to fund the construction
and commissioning of the CHPP,
working capital and transaction costs,
as follows:
On 16 December 2020, TIG launched
a fully underwritten 1 for 1.4 pro-rata
accelerated renounceable Entitlement
Offer at a price of A$0.008 per share
to raise A$43.5 (US$32) million. The
institutional entitlement offer closed
on 17 December 2020, raising
gross proceeds of approximately
A$17.2million (US$12.7 million) with
the Company’s largest shareholder
Dr. Bruce Gray taking up his full
entitlement. The retail component of
the offer opened on 21 December 2020
and was completed on 4 January 2021
with very good support from a
number of shareholders, including
Mr. Paul Little, taking up full and partial
entitlements. The retail offer raised
approximately A$3.7 million
(US$2.8 million).
• A$27 million (US$20 million) for the
development of the CHPP, as follows:
– Design works – A$1.2 million
(US$0.9 million);
– Civil works – A$8.8 million
(US$6.5 million);
– Equipment supply and
construction – A$14.7 million
(US$10.8 million); and
– Contingency – A$2.3 million
(US$1.8 million)
• A$15 million (US$11 million)
for working capital
• A$1.5 million (US$1 million)
of transaction and other costs.
14
Tigers Realm Coal
Annual Report 2020
Financial Report
Directors’ Report
Corporate Governance Statement
Consolidated Statement of Financial Position
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Directory
16
38
45
46
47
48
49
91
92
93
98
100
Tigers Realm Coal
Annual Report 2020
15
Tigers Realm Coal Limited
Directors’ report
For the year ended 31 December 2020
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 2020.
1.
Directors, Alternate Director and Company Secretary
The Directors of the Company at any time during or since the end of the financial year are:
Name
qualifications and
independence
status
Experience, special responsibilities and other directorships
Mr Craig
Wiggill
Independent
Chairman
BSc Eng.
Mr Wiggill was appointed Independent 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 joined the
Nomination and Remuneration Committee commencing 10 December 2015. Mr Wiggill has extensive
experience in the global mining industry including over 25 years in the coal sector, the majority of his
experience being within the Anglo-American Plc group. Mr Wiggill is currently the Chairman (non-
executive) at Buffalo Coal Corp (CVE: BUF) which has its operating entities in South Africa. In addition, he
is the Chairman (non-executive) of globalCOAL, a company registered in London, the principal activities of
which are the development of standardised 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 Chief Executive Officer (“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
responsibilities, corporate strategy and business development for Anglo American. He holds no other
directorships with ASX listed entities.
Dr Bruce Gray
Non-executive
Director
MB, BS, MS,
PhD, FRACS
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, resigning on 28
March 2014. Dr Gray established and operated two highly successful start-up businesses in the medical
sector. Prior to that he was Professor at the University Western Australia and has held numerous
administrative positions with regional, national and international organisations. He has published more than
200 articles in the global scientific press and has received numerous awards for contributions in the medical
field and for Australian entrepreneurship. Dr Gray currently manages a private investment fund. Dr Gray has
been a member of the Nomination and Remuneration Committee since 8 September 2016. He holds no other
directorships with ASX listed entities.
Mr Owen
Hegarty
Independent
Non-executive
Director
BEc(Hons),
FAusIMM
Mr Hegarty has more than 40 years’ experience in the mining industry. He had 24 years with the Rio Tinto
Group, then founded and led Oxiana Ltd, now OZ Minerals Limited, for 12 years. He is a founder of Tigers
Realm Coal Ltd. He also founded and is currently Executive Chairman of EMR Capital, a mining private
equity firm. Through to the end of 2016, he was Vice Chairman and Non-Executive Director of Fortescue
Metals Group Ltd. Mr Hegarty has received a number of awards recognising his service to the mining
industry and presently serves on a number of Government and industry advisory groups. Mr Hegarty was
appointed a Director of the Company on 8 October 2010 and was Chairman of the Audit, Risk and
Compliance Committee and of the Nomination and Remuneration Committee till 26 August 2020. While he
stepped down as a Chairman, he continues to participate in the Nomination and Remuneration Committee
and the Audit, Risk and Compliance Committee as a member. He holds no other directorships with ASX
listed entities.
16
4
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report
For the year ended 31 December 2020
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
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 2020.
1.
Directors, Alternate Director and Company Secretary
The Directors of the Company at any time during or since the end of the financial year are:
Name
qualifications and
independence
status
Mr Craig
Wiggill
Independent
Chairman
BSc Eng.
Experience, special responsibilities and other directorships
Mr Wiggill was appointed Independent 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 joined the
Nomination and Remuneration Committee commencing 10 December 2015. Mr Wiggill has extensive
experience in the global mining industry including over 25 years in the coal sector, the majority of his
experience being within the Anglo-American Plc group. Mr Wiggill is currently the Chairman (non-
executive) at Buffalo Coal Corp (CVE: BUF) which has its operating entities in South Africa. In addition, he
is the Chairman (non-executive) of globalCOAL, a company registered in London, the principal activities of
which are the development of standardised 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 Chief Executive Officer (“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
responsibilities, corporate strategy and business development for Anglo American. He holds no other
directorships with ASX listed entities.
Dr Bruce Gray
Non-executive
Director
MB, BS, MS,
PhD, FRACS
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, resigning on 28
March 2014. Dr Gray established and operated two highly successful start-up businesses in the medical
sector. Prior to that he was Professor at the University Western Australia and has held numerous
administrative positions with regional, national and international organisations. He has published more than
200 articles in the global scientific press and has received numerous awards for contributions in the medical
field and for Australian entrepreneurship. Dr Gray currently manages a private investment fund. Dr Gray has
been a member of the Nomination and Remuneration Committee since 8 September 2016. He holds no other
directorships with ASX listed entities.
Mr Owen
Hegarty
Independent
Non-executive
Director
BEc(Hons),
FAusIMM
Mr Hegarty has more than 40 years’ experience in the mining industry. He had 24 years with the Rio Tinto
Group, then founded and led Oxiana Ltd, now OZ Minerals Limited, for 12 years. He is a founder of Tigers
Realm Coal Ltd. He also founded and is currently Executive Chairman of EMR Capital, a mining private
equity firm. Through to the end of 2016, he was Vice Chairman and Non-Executive Director of Fortescue
Metals Group Ltd. Mr Hegarty has received a number of awards recognising his service to the mining
industry and presently serves on a number of Government and industry advisory groups. Mr Hegarty was
appointed a Director of the Company on 8 October 2010 and was Chairman of the Audit, Risk and
Compliance Committee and of the Nomination and Remuneration Committee till 26 August 2020. While he
stepped down as a Chairman, he continues to participate in the Nomination and Remuneration Committee
and the Audit, Risk and Compliance Committee as a member. He holds no other directorships with ASX
listed entities.
Directors, Alternate Director and Company Secretary
1.
Name,
qualifications and
independence
status
Experience, special responsibilities and other directorships
Mr Ralph
Morgan
Non-executive
Director
BA, MPhil
(resigned 26
August 2020)
Mr Tagir
Sitdekov
Non-executive
Director
MBA
Mr Morgan was appointed Non-Executive Director of the Company on 1 April 2014 and resigned on 26
August 2020. Mr Morgan is a partner at Baring Vostok Capital Partners Group Limited (“BVCP”) with
responsibility for investment projects in the Russian Federation (“Russia”), the Commonwealth of
Independent States (“CIS”) and Mongolia. Prior to BVCP, Mr Morgan was Managing Director at Goldman
Sachs in the Global Natural Resources Group from 2009 to 2012 and was responsible for the investment
banking division’s advisory work with natural resource clients in Russia and CIS. From 2004 to 2008, Mr
Morgan was a Managing Director and Chief Operating Officer at PJSC MMK Norilsk Nickel and prior to
that role he was a partner with the Moscow office of McKinsey and Company. Mr. Morgan is a Non-
Executive Director of PJSC Magnitogorsk Iron & Steel Works and a Director of the U.S.-Russia Business
Council. Mr Morgan holds a BA (Political Science, Yale University) and MPhil (Russian and East European
Studies, Oxford University). Mr Morgan was a member of the Nomination and Remuneration Committee
and the Audit, Risk and Compliance Committee.
Mr Sitdekov was appointed a Non-Executive Director on 1 April 2014. Mr Sitdekov is currently a First
Deputy General Director of Russia Direct Investment Fund (“RDIF”) and has been involved in the Russian
private equity market for the last 10 years. Mr Sitdekov’s most recent executive role was 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 David Swan
Independent
Non-executive
Director
BC, FCA
(appointed 26
August 2020)
David Swan has been appointed as a Non-Executive Director of the Company and the Chairman of the
Audit, Risk and Compliance Committee and of the Nomination and Remuneration Committee, effective 26
August 2020. David has extensive experience across the natural resources sector and held a number of
senior finance, management and consulting roles, mostly with resource companies in both United Kingdom
and Australia. David holds a Bachelor of Commerce from the University of WA and is a Fellow of the
Institute of Chartered Accountants in Australia and New Zealand and a Member of the Institute of Chartered
Accountants in England and Wales (‘ICAEW’). David is a non-executive director and audit committee
chairman of London AIM Listed companies Central Asia Metals plc and Sunrise Resources plc. He holds no
other directorships with ASX listed entities.
The Directors have all been in office since the start of the financial year to the date of this report unless otherwise stated.
Alternate Director
Mr Nikolay
Ishmetov
Alternate
Director
MSc in Finance
Mr Ishmetov was appointed as an alternate director to Tagir Sitdekov on 1 July 2017. Mr Ishmetov is
currently a Senior Vice-President at RDIF and has been involved in the Russian private equity market for
over 9 years. Mr Ishmetov has been serving for over 6 years as an alternate director on the Board of
Directors of MD Medical Group, a leading healthcare operator in Russia. Prior to joining RDIF, Mr
Ishmetov worked in the M&A department of Societe Generale, where he participated in a number of cross
border M&A deals in various sectors.
Company Secretary
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 Tigers Realm Minerals Pty Ltd as Director and
Company Secretary in 2009. Mr Forsyth was appointed Company Secretary on 8 October 2010.
Mr David
Forsyth
Company
Secretary
FGIA, FCIS,
FCPA
4
5
17
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
2.
Directors’ meetings
The number of Directors' 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:
Directors’ meetings
Meetings of committees of Directors
Nomination and
Remuneration
Audit, Risk &
Compliance
A
21
21
21
11
21
10
21
B
21
18
18
11
8
10
15
A
1
1
1
-
-
-
-
B
1
-
1
-
-
-
-
A
7
-
7
6
7
1
7
B
6
-
7
6
-
1
6
Mr Craig Wiggill
Dr Bruce Gray
Mr Owen Hegarty
Mr Ralph Morgan
Mr Tagir Sitdekov
Mr David Swan
Mr Nikolay Ishmetov*
A = Number of meetings held B = Number of meetings attended
* The number of meetings attended by the Alternate Director in his capacity as a standing invitee. Mr Ishmetov is not obliged to attend.
3.
Principal activities
The principal activities of the Group are the identification, exploration, development, mining and sale of coal from deposits in the
Far East of the Russian Federation.
4.
Review of Operations
Business Strategies and Group Objectives
The Group’s objectives encompass the development of the Amaam Coking Coal Deposits, comprising its two, well-located, large
coking coal projects in the Far East of the Russian Federation.
• 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; and
• Amaam: a large coal resource which will enable scaling TIG production up to 5 million tonnes per annum (“Mtpa”)
from dedicated new infrastructure.
Amaam North
Development of Amaam North started with development of the Fandyushkinsky Field licence AND 15813 TE area (“Project F”),
a part of Amaam North. A Project F Feasibility Study Update was completed in April 2016, subsequent to which the Group raised
funds via a non-renounceable rights issuance, the primary use of proceeds being on the development of Project F. After
completing the necessary initial construction works in the second half of 2016, commercial mining commenced in January 2017.
In September 2018, TIG was granted Exploration and Mining licence No AND 01314 TE over the Zvonkoye deposit,
geographically located next to an eastern extension of Project F. In 2019 TIG applied for a Mining and Excavation Plan
(“TPRM”) for the integrated development of the Fandyushkinskoe Field and Zvonkoye license areas, which was approved in
December 2019. Consequently, future references to Amaam North will refer to the unified development of both license areas.
Further development of Amaam North, which includes an upgrade of mine site infrastructure, the Beringovsky Port and Coal
Terminal and to be supplemented by the construction of a coal handling and preparation plant (“CHPP”), will enable the Group to
produce and sell higher-value coal and is expected to increase coal sales up to 1.4Mtpa. To optimise capital spend and obtain
suitable financing, TIG decided to proceed with the option of a modular plant. In October 2020 TIG signed a contract for supply
of a modular CHPP with UK based Derek Parnaby Cyclones International Limited (“DPCI”). Fabrication and works under the
contract are proceeding on schedule for delivery to Beringovsky in June 2021. Detailed engineering works and preparation for
civil construction are also underway. The construction of the CHPP will enable the Company to sell a higher-value product of a
consistent quality into the semi–hard coking coal (“SHCC”) markets. This SHCC product should achieve significantly higher
prices than those currently being achieved for the unwashed coal products being sold into thermal and semi-soft coking coal
markets. TIG expects commissioning works to be finished in 2021 to allow the first SHCC product to be sold during the 2021
shipping season.
18
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Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
2.
Directors’ meetings
The number of Directors' 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:
Directors’ meetings
Meetings of committees of Directors
Nomination and
Remuneration
Audit, Risk &
Compliance
A
21
21
21
11
21
10
21
B
21
18
18
11
8
10
15
A
1
1
1
-
-
-
-
B
1
-
1
-
-
-
-
A
7
-
7
6
7
1
7
B
6
-
7
6
-
1
6
Mr Craig Wiggill
Dr Bruce Gray
Mr Owen Hegarty
Mr Ralph Morgan
Mr Tagir Sitdekov
Mr David Swan
Mr Nikolay Ishmetov*
A = Number of meetings held B = Number of meetings attended
* The number of meetings attended by the Alternate Director in his capacity as a standing invitee. Mr Ishmetov is not obliged to attend.
The principal activities of the Group are the identification, exploration, development, mining and sale of coal from deposits in the
3.
Principal activities
Far East of the Russian Federation.
4.
Review of Operations
Business Strategies and Group Objectives
The Group’s objectives encompass the development of the Amaam Coking Coal Deposits, comprising its two, well-located, large
coking coal projects in the Far East of the Russian Federation.
• 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; and
• Amaam: a large coal resource which will enable scaling TIG production up to 5 million tonnes per annum (“Mtpa”)
from dedicated new infrastructure.
Amaam North
Development of Amaam North started with development of the Fandyushkinsky Field licence AND 15813 TE area (“Project F”),
a part of Amaam North. A Project F Feasibility Study Update was completed in April 2016, subsequent to which the Group raised
funds via a non-renounceable rights issuance, the primary use of proceeds being on the development of Project F. After
completing the necessary initial construction works in the second half of 2016, commercial mining commenced in January 2017.
In September 2018, TIG was granted Exploration and Mining licence No AND 01314 TE over the Zvonkoye deposit,
geographically located next to an eastern extension of Project F. In 2019 TIG applied for a Mining and Excavation Plan
(“TPRM”) for the integrated development of the Fandyushkinskoe Field and Zvonkoye license areas, which was approved in
December 2019. Consequently, future references to Amaam North will refer to the unified development of both license areas.
Further development of Amaam North, which includes an upgrade of mine site infrastructure, the Beringovsky Port and Coal
Terminal and to be supplemented by the construction of a coal handling and preparation plant (“CHPP”), will enable the Group to
produce and sell higher-value coal and is expected to increase coal sales up to 1.4Mtpa. To optimise capital spend and obtain
suitable financing, TIG decided to proceed with the option of a modular plant. In October 2020 TIG signed a contract for supply
of a modular CHPP with UK based Derek Parnaby Cyclones International Limited (“DPCI”). Fabrication and works under the
contract are proceeding on schedule for delivery to Beringovsky in June 2021. Detailed engineering works and preparation for
civil construction are also underway. The construction of the CHPP will enable the Company to sell a higher-value product of a
consistent quality into the semi–hard coking coal (“SHCC”) markets. This SHCC product should achieve significantly higher
prices than those currently being achieved for the unwashed coal products being sold into thermal and semi-soft coking coal
markets. TIG expects commissioning works to be finished in 2021 to allow the first SHCC product to be sold during the 2021
shipping season.
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations
Business Strategies and Group Objectives (continued)
Amaam
Amaam is a potential long-life project of the Group with capacity to enable TIG to increase production up to 5Mtpa of high-
quality coking coal product over an estimated 20-year life of mine. The Company currently holds an Exploration Licence over the
Amaam deposit and two long-term (20 year) Extraction and Exploration Licences over parts of the deposit. Further details on the
current status of the Group’s licences are disclosed below in Significant Business Risks: Licenses, Permits and Titles.
Amaam Coking Coal Field– World Location Map
Operating Performance
Key Operating Indicators for the year ended 31 December 2020 (“2020”) and 2019 (“2019”):
Operating Indicators
(rounded to the nearest thousand tonnes, unless otherwise stated)
Coal mined
Overburden removed
Stripping ratio
Total saleable coal stocks at 31 December
Total coal sales*, of which:
- Thermal coal sales
- Semi soft coal sales
Employees as at 31 December**
Results for 2020
Results for 2019
792
4,804 bcm
6.1:1 bcm/t
750
3,501 bcm
4.7:1 bcm/t
308
775
617
158
283
291
581
388
193
282
*Including 15kt thermal coal sold domestically without shipment (Year ended 31 December 2019: 4kt).
**Full time equivalent staff.
6
7
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Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations
Operating performance (continued)
Key Financial Indicators
(in A$‘000 unless otherwise stated)
Revenue from coal sales
Cost of coal sold
Gross margin on coal sold
EBITDA*
Adjusted EBITDA**
Net loss before tax
Results for 2020
Results for 2019
47,889
(48,216)
(327)
(3,835)
2,161
(15,625)
50,141
(45,601)
4,540
(7,743)
2,632
(18,784)
Average free on board (“FOB”) coal sales price
A$53.30 (US$38.53)
A$76.7(US$53.38)
Average cost of coal mined and sold per tonne
A$43.68 (US$31.57)
A$47.49 (US$33.03)
Average cost of port handling and stevedoring costs per tonne sold
A$6.95 (US$5.03)
A$16.19 (US$11.26)
Total FOB cost of coal sold***
A$53.45 (US$38.64)
A$64.26 (US$44.69)
*Earnings before interest tax, depreciation and amortisation (“EBITDA”) is calculated as the result before net finance costs and income tax
expense, adjusted for depreciation of property, plant and equipment.
**Adjusted EBITDA is EBITDA excluding non-cash expenses such as royalty expense, write-off of property, plant and equipment, change in
provisions for inventories and share based payments.
***Includes other costs of coal sold of A$2.82 per tonne in 2020 (A$0.58 per tonne in 2019). Does not include freight which is part of cost of coal
sold
EBITDA and adjusted EBITDA are not defined by AASB and are non-statutory measures. These non-financial measures have not been audited by
Deloitte.
The following table summarises the key reconciling items between the Group’s EBITDA, adjusted EBITDA and its loss before
income tax:
in A$‘000
Loss before income tax
Add: Net finance costs
Add: Depreciation
EBITDA
Add: Royalty expense
Add: Write-off of property, plant and equipment
Add: Change in provisions for inventories
Add: Share based payments
Adjusted EBITDA
Results for 2020
Results for 2019
(15,625)
3,440
8,350
(3,835)
5,690
254
-
52
2,161
(18,784)
4,874
6,167
(7,743)
6,304
460
3,363
248
2,632
During the year ended 31 December 2020, the Company achieved a production level of 792 thousand tonnes (“kt”), of which
632kt were delivered to Beringovsky Port and Coal Terminal (750kt and 644kt, respectively in 2019). During the year ended 31
December 2020, the Group sold 775kt (581kt in 2019) and generated A$47.889 million in total revenue from the sale and
shipment of coal (2019: A$50.141 million).
The Group had A$11.304 million net cash outflow from operations for the year ended 31 December 2020 (2019; A$20.069
million net cash outflow). Cash outflows of A$9.244 million on investing activities were incurred for the year ended 31 December
2020 (A$4.977 million was incurred for the year ended 31 December 2019). The Group’s net loss for the year ended 31 December
2020 was A$15.642 million (2019: net loss of A$18.828 million).
20
8
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations
Operating performance (continued)
Key Financial Indicators
(in A$‘000 unless otherwise stated)
Revenue from coal sales
Cost of coal sold
Gross margin on coal sold
EBITDA*
Adjusted EBITDA**
Net loss before tax
sold
Deloitte.
income tax:
in A$‘000
Loss before income tax
Add: Net finance costs
Add: Depreciation
EBITDA
Add: Royalty expense
Add: Write-off of property, plant and equipment
Add: Change in provisions for inventories
Add: Share based payments
Adjusted EBITDA
Average free on board (“FOB”) coal sales price
A$53.30 (US$38.53)
A$76.7(US$53.38)
Average cost of coal mined and sold per tonne
A$43.68 (US$31.57)
A$47.49 (US$33.03)
Average cost of port handling and stevedoring costs per tonne sold
A$6.95 (US$5.03)
A$16.19 (US$11.26)
Total FOB cost of coal sold***
A$53.45 (US$38.64)
A$64.26 (US$44.69)
*Earnings before interest tax, depreciation and amortisation (“EBITDA”) is calculated as the result before net finance costs and income tax
expense, adjusted for depreciation of property, plant and equipment.
**Adjusted EBITDA is EBITDA excluding non-cash expenses such as royalty expense, write-off of property, plant and equipment, change in
provisions for inventories and share based payments.
***Includes other costs of coal sold of A$2.82 per tonne in 2020 (A$0.58 per tonne in 2019). Does not include freight which is part of cost of coal
EBITDA and adjusted EBITDA are not defined by AASB and are non-statutory measures. These non-financial measures have not been audited by
The following table summarises the key reconciling items between the Group’s EBITDA, adjusted EBITDA and its loss before
Results for 2020
Results for 2019
47,889
(48,216)
(327)
(3,835)
2,161
(15,625)
50,141
(45,601)
4,540
(7,743)
2,632
(18,784)
Results for 2020
Results for 2019
(15,625)
3,440
8,350
(3,835)
5,690
254
-
52
2,161
(18,784)
4,874
6,167
(7,743)
6,304
460
3,363
248
2,632
During the year ended 31 December 2020, the Company achieved a production level of 792 thousand tonnes (“kt”), of which
632kt were delivered to Beringovsky Port and Coal Terminal (750kt and 644kt, respectively in 2019). During the year ended 31
December 2020, the Group sold 775kt (581kt in 2019) and generated A$47.889 million in total revenue from the sale and
shipment of coal (2019: A$50.141 million).
The Group had A$11.304 million net cash outflow from operations for the year ended 31 December 2020 (2019; A$20.069
million net cash outflow). Cash outflows of A$9.244 million on investing activities were incurred for the year ended 31 December
2020 (A$4.977 million was incurred for the year ended 31 December 2019). The Group’s net loss for the year ended 31 December
2020 was A$15.642 million (2019: net loss of A$18.828 million).
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations (continued)
Operating Performance (continued)
During 2020, TIG’s Directors and Management maintained a strong focus on achieving a comprehensive response to the COVID–
19 Pandemic. During this challenging year the Company’s top priority was to protect the health, safety and wellbeing of our
people and the communities that host our business. TIG has implemented a number of measures to ensure normal operating
activities, including implementing remote working for employees based in Moscow, extensive testing of all employees arriving at
the Chukotka operational site, ensuring the availability of self-isolation facilities in Beringovsky, and providing employees with
necessary personal protective equipment, such as gloves, masks, glasses, and sanitizers. Management has been engaging with the
relevant government agencies and bodies on all COVID-19 related measures. To assist in fighting the spread of COVID-19, TIG
purchased and donated high-accuracy coronavirus tests and personal protective equipment for local hospitals.
The sharp contractions in coal prices during the first nine months of 2020 were subsequently reversed in the fourth quarter by
resurgent Chinese demand and the partial rebalancing of supply. Unfortunately, as TIG’s shipping season ended in early
December, the depressed prices during the first nine months had a substantial negative impact on TIG’s financial performance for
the year. To partially mitigate the impact of lower prices in 2020 TIG increased sales volumes by 33% compared to 2019. Largely
as a result of TIG’s ability to increase production, revenue decreased by only 4% compared to 2019.
The challenges driven by COVID – 19 notwithstanding, TIG managed to achieve a number of significant milestones during 2020.
These included taking full control over port operations, signing a contract with DPCI for the supply of CHPP equipment,
progressing with the CHPP design and civil engineering works, securing financing for the CHPP & 2021 working capital and
updating the JORC report for Amaam North.
In 2020, TIG managed to significantly decrease transshipment costs per tonne sold to A$6.95(US$5.03) compared to A$16.19
(US$11.26) in 2019 as a result of TIG’s decision to take over the port operations. In 2020, TIG’s loaded 760kt coal – a historical
record loading for Beringovsky port and an increase of 31% compared to 2019 loaded volumes. This success was primarily due to
appropriate dredging works before the start of the 2020 shipping season, improving the coal conveyor system, training port
personnel, and proactively carrying out repair works on our barge fleet.
Despite the stripping ratio increasing from 4.7 bcm/t in 2019 to 6.1 bcm/t in 2020, TIG managed to decrease mining costs from
A$47.49 in 2019 to A$43.68 (US$31.57). The decreased costs were largely the result of 1) efficiencies gained from utilization of
heavier equipment brought to the site in 2019 and 2) the depreciation of the Russian Rouble relative to the Australian dollar.
The combined effect of above factors resulted in a negative gross margin of A$0.327 million for the year ended 31 December
2020 (2019: A$4.540 million).
The average margin per tonne of coal sold during the year ended 31 December 2020 was A$(0.42) (US$(0.31)) (2019: A$12.44
(US$8.69)), the weighted average FOB sales price per tonne (“FOB/t”) being A$53.30 (US$38.53) (2019: A$76.76 (US$53.38)).
Significant investments in mining and port assets totalling A$9.244 million during the year ended 31 December 2020 included:
Advances made for CHPP equipment;
Design and engineering works for CHPP; and
Acquisition of additional 100t barge
During 2020, TIG also undertook a review of all operating, capital, and overhead expenditures. As the result of this review, TIG
reduced certain operating and overhead expenses, including some staff salaries. The Company agreed to proposals by the CEO,
Dmitry Gavrilin, and the CFO, Dale Bender, that their salaries be reduced by 10%. Moscow office expenses were lowered by two
thirds by moving to smaller premises at a lower rate per metre.
Financial Position
Cash balances
The Group’s cash balance increased by A$14.163 million over the year to A$18.879 million at 31 December 2020. This increase
arose primarily from the proceeds of the December 2020 Entitlement Offer (“2020 Entitlement Offer”), offset by operational losses
and further investment in the Company’s mining and logistics infrastructure of A$9.244 million (31 December 2019: A$6.026
million).
As of 31 December 2020, the Company has no unused, available credit lines (As at 31 December 2019: Nil).
8
9
21
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations (continued)
Financial Position (continued)
Inventory on hand
The lower of cost and net realisable value of the Group’s inventories on hand at 31 December 2020 is A$23.129 million (31
December 2019: A$28.805 million), including A$11.095 million of coal stocks, A$1.370 million in fuel and oils and A$10.664
million of other consumables. Management performs a regular review of the recoverability of inventories, including coal stocks, to
assess the Company’s ability to recover the cost of coal inventories on hand. No additional provision in respect of coal stocks was
recognized as of 31 December 2020 (31 December 2019: a provision of A$4.432 million).
Non-current assets
The Company performs twice annually a review for the existence of conditions indicating either the necessity to perform an
impairment review or to consider the necessity to reverse previously recognised impairments. Refer to Note 9 to the consolidated
financial statements for further details.
A CAT D10 bulldozer with the carrying value of A$0.254 million was written off during the year ended 31 December 2020 as a
result of damage for which repairs to restore it to its previous operational condition were assessed as not economically justifiable
(For the year ended 31 December 2019: three haulage trucks with carrying value of A$0.460 million were written off).
Leases
During the year ended 31 December 2020, the Group executed a leasing arrangement to finance the acquisition of a 100 –tonne
barge. The cost of the barge and, the lease liability upon initial recognition was A$0.319 million. As part of the liquidity
management strategy the Group has also restructured two of its existing lease arrangements by extending the lease term from four
to five years and changed payment schedule for another three lease arrangements.
Options
During the year ended 31 December 2020, no options were granted and 18,439,000 options lapsed or were forfeited and have been
removed from the Company’s option register. Total number of options as at 31 December 2020 is 9,907,000.
Shareholder loan
On 2 January 2020, following the issuance of shares to BV Holding Limited, substantial shareholder of TIG, the loan payable to
BV Holding Limited of A$14.776 million was settled in full. On 2 January 2020, A$13.138 million out of A$14.641 million loan
payable to Dr Bruce Gray was settled, following the issuance of shares to Dr Bruce Gray, the Group’s director and substantial
shareholder.
On 10 July 2020, a supplemental deed to the loan agreement with Dr Bruce Gray was signed, extending the loan maturity date to
31 December 2020 and lowering the interest rate from 20% to 12% starting 24 June 2020. On 4 February 2021, the outstanding
loan payable to Dr Bruce Gray and interest accrued thereon of A$1.864 million was settled in full.
Royalty Agreement liability
After the assessment of the provision for the obligations under the Royalty Agreement liability at 31 December 2020, the Group
recognized an increase in the royalty liability of A$5.690 million, offset by A$1.283 million decrease due to foreign exchange
movement and A$0.330 payments. As at 31 December 2020 the provision amounted to A$18.063 million (At 31 December 2019:
A$13.986 million). Refer to Note 21 to the consolidated financial statements for further details.
Share Capital
The 2019 Entitlement Offer (“2019 Entitlement Offer”) closed on 5 February 2020, as a result of which the Group raised
A$45.191 million. Entitlements not taken up during the 2019 Entitlement Offer were offered for sale in a shortfall bookbuild. The
Group received a bid for a majority of the shortfall from Hanate Pty Ltd, an entity associated with Dr Bruce Gray. On 5 June
2020, a shortfall bookbuild of 1.3 billion shares at a price of A$0.01 per share (A$13.038 million) was approved by TIG
shareholders at the Annual General Meeting and on 24 June 2020 new shares were issued. Total funds raised through the 2019
Entitlement Offer including the Shortfall Bookbuild were A$58.229 million.
On 16 December 2020 TIG launched a fully underwritten 1 for 1.4 pro-rata accelerated renounceable entitlement offer (“2020
Entitlement Offer”) at a price of A$0.008 per share to raise A$43.512 million, mainly for CHPP funding and to provide additional
working capital. The Institutional entitlement offer closed on 17 December 2020 raising gross proceeds of A$17.151 million with
Dr. Bruce Gray taking up his full entitlement. The remaining A$26.361 million were raised in January 2021.
22
10
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations (continued)
Financial Position (continued)
Inventory on hand
Non-current assets
financial statements for further details.
Leases
Options
Shareholder loan
shareholder.
A CAT D10 bulldozer with the carrying value of A$0.254 million was written off during the year ended 31 December 2020 as a
result of damage for which repairs to restore it to its previous operational condition were assessed as not economically justifiable
(For the year ended 31 December 2019: three haulage trucks with carrying value of A$0.460 million were written off).
During the year ended 31 December 2020, the Group executed a leasing arrangement to finance the acquisition of a 100 –tonne
barge. The cost of the barge and, the lease liability upon initial recognition was A$0.319 million. As part of the liquidity
management strategy the Group has also restructured two of its existing lease arrangements by extending the lease term from four
to five years and changed payment schedule for another three lease arrangements.
During the year ended 31 December 2020, no options were granted and 18,439,000 options lapsed or were forfeited and have been
removed from the Company’s option register. Total number of options as at 31 December 2020 is 9,907,000.
On 2 January 2020, following the issuance of shares to BV Holding Limited, substantial shareholder of TIG, the loan payable to
BV Holding Limited of A$14.776 million was settled in full. On 2 January 2020, A$13.138 million out of A$14.641 million loan
payable to Dr Bruce Gray was settled, following the issuance of shares to Dr Bruce Gray, the Group’s director and substantial
On 10 July 2020, a supplemental deed to the loan agreement with Dr Bruce Gray was signed, extending the loan maturity date to
31 December 2020 and lowering the interest rate from 20% to 12% starting 24 June 2020. On 4 February 2021, the outstanding
loan payable to Dr Bruce Gray and interest accrued thereon of A$1.864 million was settled in full.
Royalty Agreement liability
After the assessment of the provision for the obligations under the Royalty Agreement liability at 31 December 2020, the Group
recognized an increase in the royalty liability of A$5.690 million, offset by A$1.283 million decrease due to foreign exchange
movement and A$0.330 payments. As at 31 December 2020 the provision amounted to A$18.063 million (At 31 December 2019:
A$13.986 million). Refer to Note 21 to the consolidated financial statements for further details.
Share Capital
The 2019 Entitlement Offer (“2019 Entitlement Offer”) closed on 5 February 2020, as a result of which the Group raised
A$45.191 million. Entitlements not taken up during the 2019 Entitlement Offer were offered for sale in a shortfall bookbuild. The
Group received a bid for a majority of the shortfall from Hanate Pty Ltd, an entity associated with Dr Bruce Gray. On 5 June
2020, a shortfall bookbuild of 1.3 billion shares at a price of A$0.01 per share (A$13.038 million) was approved by TIG
shareholders at the Annual General Meeting and on 24 June 2020 new shares were issued. Total funds raised through the 2019
Entitlement Offer including the Shortfall Bookbuild were A$58.229 million.
On 16 December 2020 TIG launched a fully underwritten 1 for 1.4 pro-rata accelerated renounceable entitlement offer (“2020
Entitlement Offer”) at a price of A$0.008 per share to raise A$43.512 million, mainly for CHPP funding and to provide additional
working capital. The Institutional entitlement offer closed on 17 December 2020 raising gross proceeds of A$17.151 million with
Dr. Bruce Gray taking up his full entitlement. The remaining A$26.361 million were raised in January 2021.
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations (continued)
Significant Business Risks
The lower of cost and net realisable value of the Group’s inventories on hand at 31 December 2020 is A$23.129 million (31
December 2019: A$28.805 million), including A$11.095 million of coal stocks, A$1.370 million in fuel and oils and A$10.664
million of other consumables. Management performs a regular review of the recoverability of inventories, including coal stocks, to
assess the Company’s ability to recover the cost of coal inventories on hand. No additional provision in respect of coal stocks was
recognized as of 31 December 2020 (31 December 2019: a provision of A$4.432 million).
TIG’s operations and annual budget are subject to a range of business risks, assumptions and expectations all of which contain
various levels of uncertainty and outcome. TIG has adopted a Risk Policy through which a risk management framework identifies,
analyses, mitigates and monitors the risks applicable to the Group. Identified risks are entered into a risk register which is
maintained by a committee of senior management and staff. Significant risks are presented at least twice annually to the Audit,
Risk and Compliance Committee and, following each review, are formally reported and discussed by the Board.
Detailed below are risk areas identified as at the date of the Directors’ Report which may affect TIG’s future operating and
financial performance.
The Company performs twice annually a review for the existence of conditions indicating either the necessity to perform an
impairment review or to consider the necessity to reverse previously recognised impairments. Refer to Note 9 to the consolidated
Country Risk
TIG’s projects are located in Russia. 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.
COVID-19 Pandemic
The COVID-19 Pandemic has made a profound impact on global economic activity. Measures enacted by numerous governments
in response to COVID-19 led to a sharp drop in demand for both metallurgical and thermal coal and, consequently, a substantial
decrease in coal prices. While a certain level of market recovery in TIG’s key markets has been observed over the last several
months and COVID-19 vaccines are beginning to become broadly available, substantial uncertainties remain. Supply chain
disruptions have been severe, and the time required for their restoration is still not known. Additionally, mutations of the
COVID-19 virus have been observed, and the extent to which currently-available vaccines will provide protection against these
mutations is not yet clear. In general, the COVID-19 Pandemic demonstrated the ability of an unforeseen health crisis to have a
materially negative impact on the global economy. A continuation of the measures that have been put in place in response to
COVID-19 or the enactment of new measures in response to COVID-19 or some other threat to public health could have a
negative impact on TIG’s business, and that impact could be material.
Uncertainty in estimation of Mineral Resources and Reserves
Estimating the quantity and quality of Mineral Resources is an inherently uncertain process and the Mineral Resources and
Reserves 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.
In November 2020 TIG has announced the results of a new JORC report with respect to Amaam North – Project F. Compared to
the coal reserves set out in the 2019 Annual Report TIG’s Recoverable Reserves increased by 2.8 million tonnes (“Mt”) to 23.8Mt
(15.0Mt proved and 8.8Mt probable) while Marketable Reserves decreased by 0.34Mt to 15.4Mt (9.8mt proved and 5.6mt
probable). TIG’s Amaam North Resources decreased by 23.4Mt to 85.6Mt.
Project Assessment and Development Risk
The process of developing and constructing Amaam North (including the CHPP) 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.
Mining and development operations can be affected by force majeure circumstances, environmental considerations and cost
overruns for unforeseen events. Any event that impacts on the production rates potentially may reduce the quantity of coal mined
and thereby reduce the amount of coal available for sale.
Events that could adversely impact on production rates include, but are not limited to geotechnical and geological conditions;
equipment availability, utilisation rates and failure; development rates at which relevant coal seams are exposed; weather
(including flooding) and natural disasters; unexpected maintenance or technical problems; depletion of TIG’s reserves; increased
or unexpected reclamation costs; and interruptions due to transportation delays; interruptions to supplies of required materials and
services; and the actions of potential contractors engaged by TIG to operate its projects (including any breach of contract or other
action outside TIG’s control).
TIG is at the preliminary stage of determining the economic and technical viability of the Amaam Licence. To date TIG has
completed a Preliminary Feasibility Study (PFS) and subsequent resource updates on the Amaam project. 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.
10
11
23
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations (continued)
Operational Risks
The Group’s 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 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. The Company faces commodity price risk when valuing its
projects, having adopted long-term sales price estimates in accordance with independent third-party external forecasts,
validated against long-term market expectations.
Exchange Rate Variations: Significant changes in the Australian / US Dollar, US Dollar / Russian Rouble and the
Australian Dollar / Russian Rouble exchange rates may have a significant impact on TIG’s ability to fund the capital
expenditure required to construct these projects.
•
Climate-related risks
The introduction of new and/or more stringent carbon pricing mechanisms in Russia, and/or the Group’s key coal importing
countries such as China and Japan may reduce the cost competitiveness of coal as an energy source. Further, changes in
government policy relating to either coal consumption or energy generation in large Asian economies could impact the longer-
term outlook for global coal demand. Changes in the longer-term global coal demand outlook could have an impact on the
Group’s future coal revenues and the recoverability of undeveloped coal reserves.
Capital Management
The nature of the Company’s mining operations is such that coal production continues throughout the winter season, whilst sales
are only realised during the Beringovsky Port shipping season. The shipping season historically commences in June and port
operations may continue as late as November. The length of the shipping season is limited, resulting in the necessity of engaging
vendors in the first half of the calendar year prior to the generation of operating cashflows from coal sales. This seasonality
significantly impacts both on the nature, level and timing of required funding.
The Company, therefore, must ensure that its liquidity levels are managed during the period between shipping seasons.
Consideration is also required of the extent and timing of capital expenditures and the related forward funding commitments
necessary to achieve the Company’s expected development levels.
As previously disclosed, in December 2020 the Company launched an entitlement offer to raise A$43.512 million. As of 31
December the Company raised A$17.151 million during the institutional component of an entitlement offer. A further funds of
A$26.361 million were received after the Offer closed on 14 January 2021.
TIG’s Amaam project is at the pre-development stage and will require additional drilling, evaluation and feasibility study work
prior to a development decision. Should TIG proceed to develop the Amaam project upon completion of further definitive studies,
significant capital expenditure will be required.
Licenses, Permits and Titles
TIG requires certain licenses, permits and approvals to develop the Amaam North and Amaam projects. There are three main
approvals required to commence the construction and operation of a mining project in Russia. These are a) an Exploration and
Extraction Licence (Mining Licence); b) a Construction Permit; and c) a Commissioning Permit. Due to the current stage of the
Amaam project, the Company has not yet applied for the majority of the required licences, permits and approvals to construct and
operate the mine. Amaam exploration license AND 01379 TP (former AND 01277 TP) renewal was completed in June 2020.
For Project F Amaam North, the Mining Licence was granted in December 2014 and work has been completed in obtaining all
relevant Construction and Commissioning Permits. In 2019 Rosnedra, the Russian natural resource licensing authority, approved a
Mining and Excavation Plan (“TPRM”) for the integrated development of the Fandyushkinskoe and Zvonkoye license areas. The
2021 mine plan already includes production from both areas.
In addition to specific mining-related approvals, other approvals are required for the development of Amaam North. Such
approvals relate to the CHPP, road development from the Amaam North mine site to Beringovsky Port and Coal Terminal and for
the capital upgrades to be completed at the Beringovsky Port and Coal Terminal.
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.
24
12
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations (continued)
Operational Risks
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
4.
Review of operations (continued)
Licenses, Permits and Titles (continued)
The Group’s 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:
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. In the event that TIG fails to obtain, or delays in obtaining such licenses,
permits and approvals occur, and there arises a failure to meet tenement licence commitments, such events may adversely affect
TIG’s ability to proceed with the projects as currently planned.
Feasibility Studies of the Amaam deposit development for licence areas АНД 01278 (Zapadny) and АНД 01288 (Nadezhny) were
completed and approved in 2019. Following this approval, TIG will develop and have approved a Mining and Excavation Plan
(“TPRM”) for Zapadny licence area, outlining the expected mining approach and volumes from the licence area.
5.
Significant changes in the state of affairs
In the opinion of the Directors, except as disclosed in the review of operations, there were no further significant changes in the
Group’s state of affairs during the financial period ended 31 December 2020 not otherwise reflected in the accompanying
consolidated financial statements.
6.
Events subsequent to reporting date
Entitlement Offer
As previously discussed, on 16 December 2020 TIG launched a fully underwritten 1 for 1.4 pro-rata accelerated renounceable
entitlement offer at a price of A$0.008 per share to raise up to A$43.512 million. The institutional entitlement offer closed on 17
December 2020 raising gross proceeds of approximately A$17.151million (US$12.7million) with Dr. Bruce Gray taking up his
full entitlement. The retail component of the offer opened on 20 December 2020 and was completed on 4 January 2021. The retail
offer raised approximately A$3.684 million (U$2.8 million). On 11 January 2021 the Shortfall Bookbuild was completed. The
Bookbuild process was managed and fully underwritten by CLSA Australia Pty Ltd and sub-underwritten by Dr. Bruce Gray.
Pursuant to his sub-underwriting agreement, 2.7 billion additional shares were issued to Dr. Gray, increasing his overall
shareholding in the TIG to 59.95%. In total TIG raised A$43.512 (US$32) million.
Proceeds from the 2020 Entitlement Offer will be used to fund the construction and commissioning of the CHPP, working capital
and transaction costs, as follows:
• A$27 million (US$20 million) for the development of the CHPP, as follows:
o Design works - A$1.2 million (US$0.9 million);
o Civil works – A$8.8 million (US$6.5 million);
o Equipment supply and construction – A$14.7 million (US$10.8 million); and
o Contingency – A$2.3 million (US$1.8 million)
• A$15 million (US$11 million) for working capital
• A$1.5 million (US$1 million) for transaction and other costs
TIG’s Amaam project is at the pre-development stage and will require additional drilling, evaluation and feasibility study work
prior to a development decision. Should TIG proceed to develop the Amaam project upon completion of further definitive studies,
Shareholder loan
On 4 February 2021, the balance of the outstanding loan payable to Dr Bruce Gray and interest accrued thereon in the amount of
A$1.864 million was settled in full.
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
In 2021, TIG plans to proceed with the construction of the CHPP. TIG expects commissioning works to be completed by August
2021 to allow some SHCC product to be sold before the close of the 2021 shipping season.
Ongoing enhancement of port, road and other mine infrastructure is expected during 2021. Amaam North expansion and funding
alternatives will continue to be investigated further. The Group will progress exploration, appraisal and development of its
Amaam project.
12
13
25
• 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 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. The Company faces commodity price risk when valuing its
projects, having adopted long-term sales price estimates in accordance with independent third-party external forecasts,
validated against long-term market expectations.
•
Exchange Rate Variations: Significant changes in the Australian / US Dollar, US Dollar / Russian Rouble and the
Australian Dollar / Russian Rouble exchange rates may have a significant impact on TIG’s ability to fund the capital
expenditure required to construct these projects.
The introduction of new and/or more stringent carbon pricing mechanisms in Russia, and/or the Group’s key coal importing
countries such as China and Japan may reduce the cost competitiveness of coal as an energy source. Further, changes in
government policy relating to either coal consumption or energy generation in large Asian economies could impact the longer-
term outlook for global coal demand. Changes in the longer-term global coal demand outlook could have an impact on the
Group’s future coal revenues and the recoverability of undeveloped coal reserves.
Climate-related risks
Capital Management
The nature of the Company’s mining operations is such that coal production continues throughout the winter season, whilst sales
are only realised during the Beringovsky Port shipping season. The shipping season historically commences in June and port
operations may continue as late as November. The length of the shipping season is limited, resulting in the necessity of engaging
vendors in the first half of the calendar year prior to the generation of operating cashflows from coal sales. This seasonality
significantly impacts both on the nature, level and timing of required funding.
The Company, therefore, must ensure that its liquidity levels are managed during the period between shipping seasons.
Consideration is also required of the extent and timing of capital expenditures and the related forward funding commitments
necessary to achieve the Company’s expected development levels.
As previously disclosed, in December 2020 the Company launched an entitlement offer to raise A$43.512 million. As of 31
December the Company raised A$17.151 million during the institutional component of an entitlement offer. A further funds of
A$26.361 million were received after the Offer closed on 14 January 2021.
significant capital expenditure will be required.
Licenses, Permits and Titles
TIG requires certain licenses, permits and approvals to develop the Amaam North and Amaam projects. There are three main
approvals required to commence the construction and operation of a mining project in Russia. These are a) an Exploration and
Extraction Licence (Mining Licence); b) a Construction Permit; and c) a Commissioning Permit. Due to the current stage of the
Amaam project, the Company has not yet applied for the majority of the required licences, permits and approvals to construct and
operate the mine. Amaam exploration license AND 01379 TP (former AND 01277 TP) renewal was completed in June 2020.
For Project F Amaam North, the Mining Licence was granted in December 2014 and work has been completed in obtaining all
relevant Construction and Commissioning Permits. In 2019 Rosnedra, the Russian natural resource licensing authority, approved a
Mining and Excavation Plan (“TPRM”) for the integrated development of the Fandyushkinskoe and Zvonkoye license areas. The
2021 mine plan already includes production from both areas.
In addition to specific mining-related approvals, other approvals are required for the development of Amaam North. Such
approvals relate to the CHPP, road development from the Amaam North mine site to Beringovsky Port and Coal Terminal and for
the capital upgrades to be completed at the Beringovsky Port and Coal Terminal.
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.
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
9.
Environmental regulation
The Group’s exploration, development and mining 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 to 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 and Alternate 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
B Gray
O Hegarty
T Sitdekov
N Ishmetov
D Swan
11.
Share Options
Tigers Realm Coal Limited
Ordinary shares
5,100,000
7,825,877,288
66,412,029
-
-
-
Options over ordinary shares
-
-
-
-
-
-
Options granted to directors, executives and employees of the Company
The option plan offers individuals the opportunity to acquire 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 year ended 31 December 2020, there were no options issued, 6,976,000 options lapsed and 11,463,000 forfeited,
bringing options issued over ordinary shares in the Company to 9,907,000 at 31 December 2020 (For the year ended 31 December
2019: no options issued and 3,594,000 options lapsed and 1,729,000 options forfeited, thus bringing the options issued over
ordinary shares in the Company to 28,346,000).
Unissued shares under options
Unissued shares under options as of the date of this report are detailed in Note 24 to the consolidated financial statements.
26
14
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
9.
Environmental regulation
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
Remuneration report – audited
The Group’s exploration, development and mining 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 to ensure compliance with
the relevant Environmental regulation. The Directors are not aware of any breach of these regulations during the period covered
This remuneration report, which forms part of the directors’ 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 2020.
by this report.
10.
Directors’ interests
C Wiggill
B Gray
O Hegarty
T Sitdekov
N Ishmetov
D Swan
11.
Share Options
The relevant interest of each Director and Alternate 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:
Tigers Realm Coal Limited
Options over ordinary shares
Ordinary shares
5,100,000
7,825,877,288
66,412,029
-
-
-
-
-
-
-
-
-
Options granted to directors, executives and employees of the Company
The option plan offers individuals the opportunity to acquire 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 year ended 31 December 2020, there were no options issued, 6,976,000 options lapsed and 11,463,000 forfeited,
bringing options issued over ordinary shares in the Company to 9,907,000 at 31 December 2020 (For the year ended 31 December
2019: no options issued and 3,594,000 options lapsed and 1,729,000 options forfeited, thus bringing the options issued over
ordinary shares in the Company to 28,346,000).
Unissued shares under options
Unissued shares under options as of the date of this report are detailed in Note 24 to the consolidated financial statements.
(a)
Details of key management personnel
Name
Directors
Craig Wiggill
Bruce Gray
Owen Hegarty
Ralph Morgan
Tagir Sitdekov
Nikolay Ishmetov
David Swan
Senior Executives
Dmitry Gavrilin
Dale Bender
Scott Southwood
Sergey Efanov
David Forsyth
Position
Commencement Date
Chairman (Non-Executive)
Director (Non-executive)
Director (Non-executive)
Director (Non-executive)
Director (Non-executive)
Alternate Director for Mr Sitdekov
Director (Non-executive)
Chief Executive Officer
Chief Financial Officer
General Manager Marketing
General Manager Operations
Company Secretary
20 November 2012
1 October 2015
8 October 2010
1 April 2014
1 April 2014
1 July 2017
26 August 2020
1 June 2018
1 October 2018
13 October 2013
15 November 2017
8 October 2010
(b)
Changes to key management personnel
Directors
On 26 August 2020 Ralph Morgan resigned as Non – Executive Director of The Company.
On 26 August 2020 David Swan was appointed as Non – Executive director of the Company.
There were no changes to either Directors or to the Alternate Director during 2019.
Executives
There were no changes to Executives during 2020 and 2019.
14
15
27
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
(c)
Remuneration report – audited (continued)
Principles used to determine the nature and amount of remuneration
KMP are those persons having authority and responsibility for planning, directing and controlling the Group’s activities and
include the Company’s Directors and Senior executives.
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 Nomination and Remuneration Committee and the Board have regard to financial
funding, resource development, project advancement and development, and other objectives, based on goals set by the
Nomination and Remuneration 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.
2020
2019
2018
2017
2016
Net profit/(loss) attributable to equity
holders of the parent (A$ million)
$(15.616)
$(18.715)
$10.959
$(6.213)
Closing share price (A$)
$0.01
$0.01
$0.04
$0.057
$(10.511)
$0.073
(e)
Remuneration policy and structure for senior executives
The objective of the Group’s executive remuneration policy is to ensure the 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, which is payable subsequent to
Board ratification of recommendations made by the Remuneration and Nomination Committee each year.
Long-Term Incentive (“LTI”) Program 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.
28
16
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
(c)
Remuneration report – audited (continued)
Principles used to determine the nature and amount of remuneration
KMP are those persons having authority and responsibility for planning, directing and controlling the Group’s activities and
include the Company’s Directors and Senior executives.
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 Nomination and Remuneration Committee and the Board have regard to financial
funding, resource development, project advancement and development, and other objectives, based on goals set by the
Nomination and Remuneration 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.
2020
2019
2018
2017
2016
Net profit/(loss) attributable to equity
holders of the parent (A$ million)
$(15.616)
$(18.715)
$10.959
$(6.213)
Closing share price (A$)
$0.01
$0.01
$0.04
$0.057
$(10.511)
$0.073
(e)
Remuneration policy and structure for senior executives
The objective of the Group’s executive remuneration policy is to ensure the 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, which is payable subsequent to
Board ratification of recommendations made by the Remuneration and Nomination Committee each year.
Long-Term Incentive (“LTI”) Program 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.
12.
(e)
Remuneration report – audited (continued)
Remuneration policy and structure for senior executives (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 (“KPIs”) 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 CEO and is subject to Board
discretion. The performance framework develops individual KPIs for KMP other than CEO, CFO and the GM Operations in the
following proportions:
•
•
30% Group related KPIs, (these are Health, Safety & Environmental specific, Project, and Corporate objectives); and
70% Individual KPIs tailored to the role and objectives of each senior executive.
For CEO, CFO and the GM Operations the proportion is 50% Group related KPIs and 50% Individual KPIs
For the LTI element of remuneration, any options granted under the Company’s Option Plan, are approved by the Board in
advance. Further details of the Option Plan are included in Note 24 to the consolidated financial statements. The Company may
make initial grants of options to certain senior executives as part of their individual employment contracts. It is a vesting condition
that the holder of options remains an employee or director at the time of vesting.
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.
(f)
Employment contracts
The Group has entered into employment arrangements with each senior executives, other than the General Manager Marketing,
who is engaged on an external contractor basis, which are open-ended contracts with no expiry date. The contracts may be
terminated immediately on the basis of serious misconduct. The senior executives are also entitled to receive on termination of
employment their statutory and contractual entitlements of accrued annual and long service leave, together with any
superannuation benefits.
The employment contracts provide for the payment of performance-related bonuses under the STI programme and participation,
where eligible, in the Company Option Plan under the LTI Program. The maximum bonus payable under the STI programme is up
to 50% of total remuneration for senior executives. The Group can elect to pay these bonuses in cash or by means of issuance of
shares.
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 and makes any recommendations to the Board annually on
compensation levels, assessing the necessity or otherwise of any changes required so as to meet the principles of the Group’s
compensation policy.
(g)
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 are eligible for a fixed 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 A$1,500,000.
In addition to being eligible for a fixed base fee, all non-executive Directors are entitled to 9.50 per cent in superannuation
contributions. No retirement or other long-term benefits are provided to any Director other than superannuation. Non-Executive
Directors can claim reimbursement of out-of-pocket expenses incurred on behalf of the Company. During the year ended 31
December 2020, the base fee for Directors was $30,000 per annum. The Chairman is entitled to A$100,000 per annum and a per
diem of the AUD equivalent of British Pounds Sterling (“GBP”) 1,000 is payable whilst travelling in respect of the Group’s
business. In addition to the base fee, A$20,000 per annum is also payable to the Director who performs the duties of Chairman of
the Audit, Risk and Compliance Committee. With the exception of the independent Chairman and Chairman of the Audit, Risk
and Compliance Committee, all directors waived their director fee entitlements for the year ended 31 December 2020.
16
17
29
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
(h)
Remuneration report – audited (continued)
Details of the remuneration of the Group’s key management personnel
Details of the nature and amount of each major element of remuneration of each Director of the Company, and the key
management personnel (as defined in AASB 124 Related Party Disclosures) are set out in the following tables.
Short – term
Cash
Salary and
fees
A$
Non-
Monetary
Benefits
(1)
A$
STI
bonus
(2)
A$
Post-
employment
Share -
based
payments
Super-
annuation
A$
LTI (3)
A$
Total
Remun-
eration
A$
Proportion
of remun-
eration
comprising
options
%
Name
2020
Non-executive Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
D Swan
Sub total
Other key management personnel
D Gavrilin
D Bender
S Southwood
D Forsyth
S Efanov
Sub total
Total key management
Personnel
115,380
-
-
-
-
18,274
133,654
449,685
284,948
167,704
189,196
326,392
1,417,925
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
144,830
86,898
43,450
-
130,348
405,526
10,961
-
-
-
-
1,736
12,697
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,060
4,669
8,869
126,341
-
-
-
-
20,010
146,351
594,515
371,846
217,214
193,865
465,609
19,598
1,843,049
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2.79%
2.41%
1.90%
1,551,579
-
405,526
12,697
19,598
1,989,400
1.
2.
3.
Includes the value of fringe benefits and other allowances.
In respect of 2020. Part of the 2020 bonuses is planned to be paid in TIG’s shares.
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 the LTI programme that remained unvested during
2020). 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 LTI programme are equity settled.
During the year ended 31 December 2020, other than the remuneration detailed above, key management personnel were neither
entitled to nor did they receive loans or other benefits.
30
18
Annual Report 2020Tigers Realm Coal
12.
(h)
Remuneration report – audited (continued)
Details of the remuneration of the Group’s key management personnel
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.
Short – term
employment
payments
Post-
Share -
based
Cash
Salary and
fees
A$
Non-
Monetary
Benefits
(1)
A$
STI
bonus
(2)
A$
Super-
annuation
LTI (3)
A$
A$
Total
Remun-
eration
A$
Proportion
of remun-
eration
comprising
options
%
Non-executive Directors
115,380
10,961
126,341
-
-
-
-
18,274
133,654
449,685
284,948
167,704
189,196
326,392
1,417,925
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
144,830
86,898
43,450
130,348
405,526
1,736
12,697
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,060
4,669
8,869
-
-
-
-
20,010
146,351
594,515
371,846
217,214
193,865
465,609
19,598
1,843,049
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2.79%
2.41%
1.90%
Name
2020
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
D Swan
Sub total
D Gavrilin
D Bender
S Southwood
D Forsyth
S Efanov
Sub total
Other key management personnel
Total key management
Personnel
1,551,579
-
405,526
12,697
19,598
1,989,400
Includes the value of fringe benefits and other allowances.
In respect of 2020. Part of the 2020 bonuses is planned to be paid in TIG’s shares.
1.
2.
3.
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 the LTI programme that remained unvested during
2020). 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 LTI programme are equity settled.
During the year ended 31 December 2020, other than the remuneration detailed above, key management personnel were neither
entitled to nor did they receive loans or other benefits.
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Remuneration report – audited (continued)
Details of the remuneration of the Group’s key management personnel
Short – term
Cash
Salary
and fees
A$
Non-
Monetary
Benefits
(1)
A$
STI
bonus
(2)
A$
Post-
employment
Share -
based
payments
Super-
annuation
A$
LTI (3)
A$
Total
Remun-
eration
A$
Proportion
of remun-
eration
comprising
options
%
12.
(h)
Name
2019
Non-executive Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
Sub total
Other key management personnel
D Gavrilin
D Bender
S Southwood
D Forsyth
S Efanov
Sub total
Total key management
152,895
-
-
-
-
152,895
467,212
346,498
185,332
94,039
389,490
1,482,571
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,639
-
-
-
-
12,639
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26,649
20,521
38,986
165,534
-
-
-
-
165,534
467,212
346,498
211,981
114,560
428,476
86,156
1,568,727
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
12.57%
17.91%
9.10%
Personnel
1.
2.
3.
-
-
12,639
1,635,466
Includes the value of fringe benefits and other allowances.
In respect of 2019.
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 the LTI programme that remained unvested
during 2019). 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 LTI programme are equity
settled.
1,734,261
86,156
18
19
31
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
(i)
Remuneration report – audited (continued)
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 2020, 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.
Name
2020
Other key management personnel
Dmitry Gavrilin, CEO
Dale Bender, CFO
Scott Southwood, General Manager Marketing
David Forsyth, Company Secretary
Sergey Efanov, General Manager Project F
2019
Other key management personnel
Dmitry Gavrilin, CEO
Dale Bender, CFO
Scott Southwood, General Manager Marketing
David Forsyth, Company Secretary
Sergey Efanov, General Manager Project F
Fixed Annual
Remuneration
(including
superannuation
contributions)
%
At Risk - STI
as percentage
of Total
Remuneration
%
At Risk - LTI
as percentage
of Total
Remuneration
(1)
%
At Risk -
Total
as percentage
of Total
Remuneration
%
75.64
76.63
77.21
97.59
70.10
100.0
100.0
87.4
82.1
90.9
24.36
23.37
20.00
28.00
-
-
-
-
-
-
-
2.79
2.41
1.90
-
-
12.6
17.9
9.1
24.36
23.37
22.79
2.41
29.9
-
-
12.6
17.9
9.1
1
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.
32
20
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
(i)
Remuneration report – audited (continued)
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 2020, 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.
Name
2020
Other key management personnel
Dmitry Gavrilin, CEO
Dale Bender, CFO
Scott Southwood, General Manager Marketing
David Forsyth, Company Secretary
Sergey Efanov, General Manager Project F
2019
Other key management personnel
Dmitry Gavrilin, CEO
Dale Bender, CFO
Scott Southwood, General Manager Marketing
David Forsyth, Company Secretary
Sergey Efanov, General Manager Project F
Fixed Annual
Remuneration
(including
superannuation
contributions)
At Risk - STI
as percentage
of Total
Remuneration
%
%
At Risk - LTI
as percentage
At Risk -
Total
of Total
as percentage
Remuneration
of Total
(1)
%
Remuneration
%
75.64
76.63
77.21
97.59
70.10
100.0
100.0
87.4
82.1
90.9
24.36
23.37
20.00
28.00
-
-
-
-
-
-
-
2.79
2.41
1.90
-
-
12.6
17.9
9.1
24.36
23.37
22.79
2.41
29.9
-
-
12.6
17.9
9.1
1
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.
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
(j)
Remuneration report – audited (continued)
Analysis of bonuses included in remuneration
During and in respect of the years ended 31 December 2020 and 2019, there were A$405,526 and Nil, respectively, in short-term
incentive (STI) cash bonuses awarded as remuneration to key management personnel.
(k)
Share Options granted as remuneration
During the year ended 31 December 2020 and 2019, there were no options granted to key management personnel. Further details
of the Option Plan are included in Note 24 to the consolidated financial statements.
During the year ended 31 December 2020, 5,281,000 options over ordinary shares vested (For the year ended 31 December 2019
2,721,000 options over ordinary shares vested) as follows:
Number of
options
vested
during year Grant date
Fair value
of option at
grant date
A$
Exercise
price per
option
A$
Vesting
date
Start
Vesting date
finish
Expiry
date
2020
Executives
S Southwood
D Forsyth
S Efanov
2019
Executives
S Southwood
D Forsyth
S Efanov
1,633,000
1,258,000
2,390,000
18/10/2017
18/10/2017
18/10/2017
0.031
0.031
0.031
0.08
0.08
0.08
18/10/2017 18/10/2020 18/10/2022
18/10/2017 18/10/2020 18/10/2022
18/10/2017 18/10/2020 18/10/2022
842,000
648,000
1,231,000
18/10/2017
18/10/2017
18/10/2017
0.031
0.031
0.031
0.08
0.08
0.08
18/10/2017 18/10/2019 18/10/2022
18/10/2017 18/10/2019 18/10/2022
18/10/2017 18/10/2019 18/10/2022
20
21
33
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
(k)
Remuneration report – audited (continued)
Analysis of Movement in Share Options
The movement during the reporting period in the number of options over ordinary shares of Tigers Realm Coal Limited shares
held directly, indirectly, or beneficially by the key management personnel and their related entities are set out below.
Name
Held at
1 January
Granted as
remun-
eration
Exerci-
sed
during
year
Forfeited/
Lapsed
during
year
Held at 31
December
Vested at 31 December
Total
Exercisable
Not
exer-
cisabl
e
2020
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
1,500,000
-
1,500,000
500,000
500,000
Other key management personnel
D Forsyth
2,670,000
S Southwood
3,975,000
S Efanov
3,621,000
2019
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
1,500,000
-
1,500,000
500,000
1,500,000
Other key management personnel
D Forsyth
3,752,000
S Southwood
3,975,000
S Efanov
3,621,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,500,000)
-
(1,500,000)
(500,000)
(500,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(764,000)
1,906,000
1,906,000
(1,500,000)
2,475,000
2,475,000
-
3,621,000
3,621,000
1,906,000
2,475,000
3,621,000
-
-
-
-
-
-
-
-
-
-
-
-
(1,000,000)
1,500,000
1,500,000
1,500,000
-
-
-
1,500,000
1,500,000
1,500,000
500,000
500,000
500,000
500,000
500,000
500,000
(1,082,000)
2,670,000
1,412,000
1,412,000
-
-
3,975,000
2,342,000
2,342,000
3,621,000
1.231,000
1,231,000
-
-
-
-
-
-
-
34
22
Annual Report 2020Tigers Realm Coal
The movement during the reporting period in the number of options over ordinary shares of Tigers Realm Coal Limited shares
held directly, indirectly, or beneficially by the key management personnel and their related entities are set out below.
The movement during the reporting period, by value, of options over ordinary shares in the Company held by each key
management person.
Name
Held at
1 January
Granted as
remun-
eration
Exerci-
Forfeited/
sed
during
year
Lapsed
during
year
Held at 31
December
Vested at 31 December
Total
Exercisable
Not
exer-
cisabl
e
Value of options
granted during year
A$
Value of options
exercised during year
A$
Value of options
lapsed during year
A$
Remuneration
consisting of options
for the year
%
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
Remuneration report – audited (continued)
(m) Analysis of Movement in Share Options, by value
2020
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
Other Key Management Personnel
D Forsyth
S Southwood
S Efanov
2019
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
Other Key Management Personnel
D Forsyth
S Southwood
S Efanov
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(38,500)
-
(38,500)
(17,500)
(17,500)
-
(42,020)
(82,500)
-
-
-
-
-
(43,000)
-
(35,706)
-
-
0.0
0.0
0.0
0.0
0.0
0.0
2.41%
2.79%
1.90%
0.0
0.0
0.0
0.0
0.0
0.0
17.91%
12.57%
9.10%
For details on the valuation of options, including models and assumptions used, refer to Note 24 to the consolidated financial
statements.
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
12.
(k)
Remuneration report – audited (continued)
Analysis of Movement in Share Options
2020
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
2019
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
1,500,000
-
1,500,000
500,000
500,000
1,500,000
-
1,500,000
500,000
1,500,000
Other key management personnel
D Forsyth
3,752,000
S Southwood
3,975,000
S Efanov
3,621,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,500,000)
-
(1,500,000)
(500,000)
(500,000)
-
-
-
-
-
-
-
-
-
-
Other key management personnel
D Forsyth
2,670,000
S Southwood
3,975,000
S Efanov
3,621,000
(764,000)
1,906,000
1,906,000
(1,500,000)
2,475,000
2,475,000
-
3,621,000
3,621,000
1,906,000
2,475,000
3,621,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,500,000
1,500,000
-
-
-
1,500,000
1,500,000
1,500,000
500,000
500,000
500,000
500,000
500,000
500,000
(1,000,000)
(1,082,000)
2,670,000
1,412,000
1,412,000
3,975,000
2,342,000
2,342,000
3,621,000
1.231,000
1,231,000
-
-
-
-
-
-
22
23
35
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Remuneration report – audited (continued)
12.
(n) 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 during
year
Forfeited/ Lapsed
during year
Vesting date
start
Vesting date
finish
Directors
C Wiggill
O Hegarty
R Morgan
T Sitdekov
Executives
D Forsyth
S Southwood
S Efanov
1,000,000
500,000
1,000,000
500,000
500,000
500,000
382,000
382,000
648,000
1,258,000
750,000
750,000
842,000
1,633,000
1,231,000
2,390,000
11/06/15
11/06/15
11/06/15
11/06/15
11/06/15
11/06/15
17/04/15
17/04/15
18/10/17
18/10/17
17/04/15
17/04/15
18/10/17
18/10/17
18/10/17
18/10/17
-
-
-
-
-
-
-
-
-
1,258,000
-
-
-
1,633,000
-
2,390,000
(1,000,000)
(500,000)
(1,000,000)
(500,000)
(500,000)
(500,000)
(382,000)
(382,000)
-
(750,000)
(750,000)
-
-
-
-
11/06/15
11/06/15
11/06/15
11/06/15
11/06/15
11/06/15
17/04/15
17/04/15
18/10/17
18/10/17
17/04/15
17/04/15
18/10/17
18/10/17
18/10/17
18/10/17
11/06/16
11/06/17
11/06/16
11/06/17
11/06/17
11/06/17
17/04/16
17/04/17
18/10/19
18/10/20
17/04/16
17/04/17
18/10/19
18/10/20
18/10/19
18/10/20
13.
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 not provided any insurance or indemnity for the auditor of the Company.
14.
Rounding and ASIC relief
The Company is of a kind referred to in ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument 2016/191,
dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the Directors’ Report have been presented
in Australian dollars and rounded to the nearest thousand dollars, unless otherwise indicated.
15.
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 Deloitte, the Group’s auditor,
for audit and non-audit services provided during the year are outlined in Note 34 to the consolidated financial statements.
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 34, did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
• all non-audit services have been reviewed and approved by the Board to ensure they do not impact the integrity 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’.
36
24
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Proceedings on behalf of the Company
16.
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.
Auditor’s Independence Declaration
17.
The auditor’s independence declaration is included on page 92 and forms part of the Directors’ report for the year ended
31 December 2020.
This report is made in accordance with a resolution of the Directors
Dated at Melbourne this 24th day of February 2021.
Signed in accordance with a resolution of the Directors:
__________________________________
Craig Wiggill
Director
Type text here
12.
Remuneration report – audited (continued)
(n) 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:
Directors
C Wiggill
O Hegarty
R Morgan
T Sitdekov
Executives
D Forsyth
S Southwood
S Efanov
Options granted
Number
Grant date
Vested during
year
Forfeited/ Lapsed
Vesting date
Vesting date
during year
start
finish
1,000,000
500,000
1,000,000
500,000
500,000
500,000
382,000
382,000
648,000
1,258,000
750,000
750,000
842,000
1,633,000
1,231,000
2,390,000
11/06/15
11/06/15
11/06/15
11/06/15
11/06/15
11/06/15
17/04/15
17/04/15
18/10/17
18/10/17
17/04/15
17/04/15
18/10/17
18/10/17
18/10/17
18/10/17
-
-
-
-
-
-
-
-
-
-
-
-
-
1,258,000
1,633,000
2,390,000
(1,000,000)
(500,000)
(1,000,000)
(500,000)
(500,000)
(500,000)
(382,000)
(382,000)
(750,000)
(750,000)
-
-
-
-
-
11/06/15
11/06/15
11/06/15
11/06/15
11/06/15
11/06/15
17/04/15
17/04/15
18/10/17
18/10/17
17/04/15
17/04/15
18/10/17
18/10/17
18/10/17
18/10/17
11/06/16
11/06/17
11/06/16
11/06/17
11/06/17
11/06/17
17/04/16
17/04/17
18/10/19
18/10/20
17/04/16
17/04/17
18/10/19
18/10/20
18/10/19
18/10/20
13.
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 not provided any insurance or indemnity for the auditor of the Company.
14.
Rounding and ASIC relief
The Company is of a kind referred to in ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument 2016/191,
dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the Directors’ Report have been presented
in Australian dollars and rounded to the nearest thousand dollars, unless otherwise indicated.
15.
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 Deloitte, the Group’s auditor,
for audit and non-audit services provided during the year are outlined in Note 34 to the consolidated financial statements.
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 34, did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
objectivity of the auditor; and
Ethics for Professional Accountants’.
• all non-audit services have been reviewed and approved by the Board to ensure they do not impact the integrity and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 ‘Code of
24
25
37
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
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 administration of 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 (“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.
This Corporate Governance Statement is current as at 24 February 2021 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 the 2020 year 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; 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 had established two 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 and the Audit, Risk and Compliance
Committee. The necessity for and structures and memberships of the respective committees 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.
38
26
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
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 administration of 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 (“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.
This Corporate Governance Statement is current as at 24 February 2021 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 the 2020 year 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.
charting the direction, policies, strategies and financial objectives of the Company and ensuring appropriate resources are
The Board is responsible for:
available;
•
•
•
•
•
•
reviewing on a regular and continuing basis:
o
o
executive succession planning; and
executive development activities.
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
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 had established two 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 and the Audit, Risk and Compliance
Committee. The necessity for and structures and memberships of the respective committees 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
them.
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
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Corporate Governance Statement (continued)
Principle 2: Structure of the Board
Composition of the Board
The names of the 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 meets the Good Corporate Governance Recommendations in that the majority of Directors
should be independent. Currently three of the five Directors are independent: Craig Wiggill, David Swan and Owen Hegarty.
Given the developmental nature of the Company and the experience of the Directors, the Board considers the composition of the
Board to be appropriate at this time. In due course, consideration will be given to increasing the number of independent Directors
on the Board.
Board Skills
The Nomination and Remuneration Committee is responsible for developing and implementing processes to identify and assess
necessary and desirable competencies and characteristics for Board members.
The Board considers that collectively the Directors have the necessary skills, knowledge and experience to direct the Company as
outlined in the following Skills Matrix.
Experience and Competencies
Professional Qualifications
Coal Industry Experience
Engineering
Strategy, leadership and risk management
Finance/Economics
Commercial, trading and marketing Accounting
Financial analysis and capital markets experience
Corporate Governance and regulatory
Project development and construction
Stakeholder communication and engagement
Safety, environment and social responsibility
Director Independence
The Board has adopted specific principles in relation to Directors’ independence. These state that when determining
independence, a Director must be 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.
26
27
39
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Corporate Governance Statement (continued)
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 satisfies the independence recommendation. The role of the
Chairman is separate from that of the CEO. The CEO is responsible for implementing Group strategies and policies.
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 three Non-Executive Directors and the Chairman, who is independent.
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 David Swan.
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 for 2020. The outcomes of the evaluation
were discussed and considered by all the Directors and specific performance goals were agreed upon for the coming year.
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 all Group personnel at all times act with utmost integrity, objectivity and in
compliance with the letter and the spirit of the law and Group policies.
40
28
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Corporate Governance Statement (continued)
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.
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 satisfies the independence recommendation. The role of the
Chairman is separate from that of the CEO. The CEO is responsible for implementing Group strategies and policies.
Chairman
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 three Non-Executive Directors and the Chairman, who is independent.
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 David Swan.
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.
Executive Directors.
The Committee is also responsible for considering and articulating the time needed to fulfil the role of Chairman and Non-
A performance evaluation of the Board, its committees and the Directors was completed for 2020. The outcomes of the evaluation
were discussed and considered by all the Directors and specific performance goals were agreed upon for the coming year.
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 all Group personnel at all times act with utmost integrity, objectivity and in
compliance with the letter and the spirit of the law and Group policies.
The Board regularly reviews the independence of each Director in light of interests disclosed and will disclose any change to the
Principle 3: Promote ethical and responsible decision making (continued)
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Corporate Governance Statement (continued)
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.
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 2020, women comprised 15% (31
December 2019: 17%) of employees throughout the Group. There are currently no female members of the Board.
Copies of the Code of Conduct, Whistleblowers’ Policy, the Diversity Policy and the Securities Trading Policy are available on
the Company’s website.
Principle 4: Safeguard integrity in financial reporting
Audit, Risk and Compliance Committee
The Audit, Risk and Compliance Committee currently consists of four Non-Executive Directors, three of which are also
independent, including the Chairman. The membership of the Committee meets the Good Corporate Governance
Recommendations in that the Committee consists of a majority of independent Directors. Given the size of the Group and the
Board, 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 David Swan has relevant qualifications with a Bachelor of Commerce from the University of WA, being a Fellow
of the Institute of Chartered Accountants in Australia and New Zealand and a Member of the Institute of Chartered Accountants in
England and Wales (‘ICAEW’) and relevant experience gained through being non-executive director and audit committee
chairman of London AIM Listed companies Central Asia Metals plc and Sunrise Resources plc. 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.
Mr Tagir Sitdekov has relevant qualifications with an MBA (University of Chicago Booth School of Business, London) and
experience as a 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 Craig Wiggill has extensive
experience in the global mining industry including over 25 years in the coal sector, the majority of his experience being within the
Anglo-American Plc group.
28
29
41
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Corporate Governance Statement (continued)
Principle 4: Safeguard integrity in financial reporting (continued)
Audit, Risk and Compliance Committee
The Audit, Risk and Compliance Committee has a documented charter 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;
o
o
o
oversee the effective operation of the risk management framework;
effectiveness and efficiency of operations;
reliability of financial reporting; and
compliance with applicable laws and regulations.
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 2020, 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.
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 2020.
42
30
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Corporate Governance Statement (continued)
Principle 4: Safeguard integrity in financial reporting (continued)
Audit, Risk and Compliance Committee
•
•
•
•
•
•
•
•
•
•
•
The Audit, Risk and Compliance Committee has a documented charter 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;
o
o
o
effectiveness and efficiency of operations;
reliability of financial reporting; and
compliance with applicable laws and regulations.
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;
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 2020, 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.
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 2020.
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
Corporate Governance Statement (continued)
Principle 4: Safeguard integrity in financial reporting (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.
Deloitte has provided an independence declaration to the Board for the financial year ended 31 December 2020. 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 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 quality 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.
meets with the external auditor at least twice a year without management being present, or more frequently if necessary;
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.
30
31
43
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
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 four members, three being the
recommended size. Three of the four members are independent.
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.
44
32
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2020
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 four members, three being the
recommended size. Three of the four members are independent.
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.
Tigers Realm Coal Limited
Consolidated statement of financial position
As at 31 December 2020
Note
31 December
2020
A$’000
31 December
2019
A$’000
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Other assets
Total current assets
Non-current assets
Inventories
Property, plant and equipment
Total non-current assets
Total assets
Current Liabilities
Trade and other payables
Advances received
Lease liability
Loans payable
Royalty liability
Other financial liabilities
Employee benefits
Total current liabilities
Non-current liabilities
Trade and other payables
Lease liability
Royalty liability
Other financial liabilities
Provision for site restoration
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
(Accumulated losses)
Total equity attributable to equity holders of the Company
Non-controlling interest
Total equity
12
14
15
15
16
17
20
18
21
22
19
17
20
21
22
23
18,879
9,844
20,275
1,356
7
50,361
2,854
32,545
35,399
85,760
3,879
-
2,407
1,830
922
605
1,437
11,080
115
5,522
17,141
1,612
496
24,886
35,966
49,794
4,716
10,196
28,805
2,936
20
46,673
-
41,100
41,100
87,773
13,976
3,186
5,197
29,393
690
779
1,263
54,484
134
9,234
13,296
2,889
403
25,956
80,440
7,333
246,594
10,277
(187,316)
69,555
(19,761)
49,794
173,108
25,660
(171,700)
27,068
(19,735)
7,333
32
33
45
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Consolidated statement of comprehensive income
For the year ended 31 December 2020
Note
31 December
2020
A$’000
31 December
2019
A$’000
Revenue from coal sales
Mining and related costs of coal sold
Transhipment and other port costs
Gross margin on coal sold
Administrative and other operating expenses
Share based payments
Exploration and evaluation expenses
Change in provisions for inventories
Write off of property, plant and equipment
Royalty expense
Other income
Results from operating activities
Net foreign exchange (loss)/gain
Finance income
Finance costs
Net finance costs
Loss before income tax
Income tax expense
Net Loss
Other comprehensive (loss)/income
Items that may subsequently be reclassified to the profit or
loss
Foreign currency translation differences for foreign operations
Total comprehensive loss for the period
Net Loss is attributable to:
Owners of the Company
Non-controlling interest
Net Loss for the period
Total comprehensive (loss)/income attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive loss for the period
Loss per share (cents per share)
basic loss per share (cents)
diluted loss per share (cents)
7
8
24
15
16
21
10
47,889
(33,850)
(14,366)
(327)
(6,027)
(52)
(159)
-
(254)
(5,690)
324
(12,185)
(655)
-
(2,785)
(3,440)
50,141
(27,592)
(18,009)
4,540
(8,991)
(248)
(310)
(3,363)
(460)
(6,304)
294
(14,842)
932
6
(4,880)
(3,942)
(15,625)
(18,784)
(17)
(15,642)
(44)
(18,828)
(15,435)
(31,077)
(15,616)
(26)
(15,642)
(31,051)
(26)
(31,077)
4,012
(14,816)
(18,715)
(113)
(18,828)
(14,965)
149
(14,816)
11
11
(0.22)
(0.22)
(1.05)
(1.05)
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
46
34
Annual Report 2020Tigers Realm Coal Tigers Realm Coal Limited
Consolidated statement of comprehensive income
For the year ended 31 December 2020
Note
31 December
31 December
2020
A$’000
2019
A$’000
7
8
24
15
16
21
10
Revenue from coal sales
Mining and related costs of coal sold
Transhipment and other port costs
Gross margin on coal sold
Administrative and other operating expenses
Share based payments
Exploration and evaluation expenses
Change in provisions for inventories
Write off of property, plant and equipment
Royalty expense
Other income
Results from operating activities
Net foreign exchange (loss)/gain
Finance income
Finance costs
Net finance costs
Loss before income tax
Income tax expense
Net Loss
Other comprehensive (loss)/income
Items that may subsequently be reclassified to the profit or
loss
Foreign currency translation differences for foreign operations
Total comprehensive loss for the period
Net Loss is attributable to:
Owners of the Company
Non-controlling interest
Net Loss for the period
Total comprehensive (loss)/income attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive loss for the period
Loss per share (cents per share)
basic loss per share (cents)
diluted loss per share (cents)
47,889
(33,850)
(14,366)
(327)
(6,027)
(52)
(159)
-
(254)
(5,690)
324
(12,185)
(655)
-
(2,785)
(3,440)
(15,435)
(31,077)
(15,616)
(26)
(15,642)
(31,051)
(26)
(31,077)
(15,625)
(18,784)
(17)
(15,642)
(44)
(18,828)
50,141
(27,592)
(18,009)
4,540
(8,991)
(248)
(310)
(3,363)
(460)
(6,304)
294
(14,842)
932
6
(4,880)
(3,942)
4,012
(14,816)
(18,715)
(113)
(18,828)
(14,965)
149
(14,816)
34
11
11
(0.22)
(0.22)
(1.05)
(1.05)
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
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47
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
Consolidated statement of cash flows
For the year ended 31 December 2020
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Exploration and evaluation expenditure
Interest and financing costs paid
Income taxes paid
Net cash used in operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds from the disposal of restricted financial instruments
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Repayment of lease liabilities
Proceeds from other financial liabilities
Repayment of other financial liabilities
Proceeds from borrowings
Repayment of borrowings
Net cash generated by 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
31 December
2020
A$’000
31 December
2019
A$’000
47,792
(55,916)
(85)
(2,781)
(314)
(11,304)
(9,244)
-
(9,244)
42,272
(3,870)
-
(653)
-
-
37,749
17,201
4,716
(3,038)
18,879
50,057
(65,025)
(343)
(4,350)
(408)
(20,069)
(6,026)
1,049
(4,977)
3,240
(7,249)
4,373
(480)
46,141
(20,445)
25,580
534
3,554
628
4,716
13
12
Non-cash financing activities for the year ended 31 December 2020: Shareholder loans
On 2 January 2020, the loans payable to BV Holding Limited and Dr B Gray, shareholders of the Company, in the amount of
A$14.776 million and A$13.138 million, respectively were settled against the shares issued to them as part of the 2019 Entitlement
Offer. The loan payable to BV Mining Holdings Limited was settled in full and loan payable to Dr Bruce Gray of A$14.641 million
was partially settled.
Non-cash investing activities for the years ended 31 December 2020 and 2019: Leasing transactions
During the year ended 31 December 2020, the Group executed a lease arrangement with equipment vendor for the acquisition of 100kt
barge (31 December 2019, the Group executed a number of lease arrangements with equipment vendors, Russian banking institutions
and Russian financing companies for the acquisition of various mining and port equipment). The additions to the property, plant &
equipment under these arrangements were RUB 18.137 million (A$0.319 million) (2019: RUB 730.248 million (A$16.210 million)).
On 1 January 2019, following the adoption of AASB 16 Leases, the Group recognised right of use assets and a related lease liability in
respect of the agreement with Rosmorport executed in March 2018, in accordance with which the Group leases three general cargo
piers, a coal pier and a breakwater pier for 49 years from the date of signing. The cost of the right of use asset and commensurately the
lease liability upon initial recognition was RUB 23.593 million (A$0.481 million).
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
48
36
Annual Report 2020Tigers Realm Coal Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
Consolidated statement of cash flows
For the year ended 31 December 2020
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Exploration and evaluation expenditure
Interest and financing costs paid
Income taxes paid
Net cash used in operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment
Proceeds from the disposal of restricted financial instruments
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Repayment of lease liabilities
Proceeds from other financial liabilities
Repayment of other financial liabilities
Proceeds from borrowings
Repayment of borrowings
Net cash generated by financing activities
Note
31 December
31 December
2020
A$’000
2019
A$’000
13
47,792
(55,916)
(85)
(2,781)
(314)
(11,304)
-
-
-
-
(9,244)
(9,244)
42,272
(3,870)
(653)
37,749
17,201
4,716
(3,038)
18,879
50,057
(65,025)
(343)
(4,350)
(408)
(20,069)
(6,026)
1,049
(4,977)
3,240
(7,249)
4,373
(480)
46,141
(20,445)
25,580
534
3,554
628
4,716
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
12
Non-cash financing activities for the year ended 31 December 2020: Shareholder loans
On 2 January 2020, the loans payable to BV Holding Limited and Dr B Gray, shareholders of the Company, in the amount of
A$14.776 million and A$13.138 million, respectively were settled against the shares issued to them as part of the 2019 Entitlement
Offer. The loan payable to BV Mining Holdings Limited was settled in full and loan payable to Dr Bruce Gray of A$14.641 million
was partially settled.
Non-cash investing activities for the years ended 31 December 2020 and 2019: Leasing transactions
During the year ended 31 December 2020, the Group executed a lease arrangement with equipment vendor for the acquisition of 100kt
barge (31 December 2019, the Group executed a number of lease arrangements with equipment vendors, Russian banking institutions
and Russian financing companies for the acquisition of various mining and port equipment). The additions to the property, plant &
equipment under these arrangements were RUB 18.137 million (A$0.319 million) (2019: RUB 730.248 million (A$16.210 million)).
On 1 January 2019, following the adoption of AASB 16 Leases, the Group recognised right of use assets and a related lease liability in
respect of the agreement with Rosmorport executed in March 2018, in accordance with which the Group leases three general cargo
piers, a coal pier and a breakwater pier for 49 years from the date of signing. The cost of the right of use asset and commensurately the
lease liability upon initial recognition was RUB 23.593 million (A$0.481 million).
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
1.
Reporting entity
Tigers Realm Coal Limited (the “Company” or “TIG”) is a company domiciled in Australia. During the year ended 31
December 2020, the Company’s registered office was 151 Wellington Parade South, East Melbourne, 3002, Australia and its
principal office during the period to 28 June 2020 was 29 1st Brestskaya Street, Moscow, 125407, Russian Federation and
starting from 29 June 2020: 12A Aviakonstruktora Mikoyana, Moscow, 125167, Russian Federation. The consolidated
financial statements as at and for the year ended 31 December 2020 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 evaluation,
mining, port and sales activities.
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 and Interpretations issued 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 24th February 2021.
(b)
Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments
which are carried at fair value and share based payment expenses which are recognised at fair value. Historical cost is based on
the fair values of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using another
valuation technique. Further details on how the Group estimates fair values of an asset or a liability are included in Note 5.
The Company is of a kind referred to in ASIC Corporations (Rounding in Financials/Directors’ Reports) Instrument 2016/191,
dated 24 March 2016, and in accordance with that Corporations Instrument amounts in these consolidated financial statements
have been presented in Australian dollars and rounded to the nearest thousand dollars, unless otherwise indicated.
(c)
Significant accounting judgements, estimates and assumptions
The application of the Group’s accounting policies, which are described in Note 3, requires management to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing 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 that have the most significant effect on the amounts recognised in the financial statements and
estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial period are
described in the following notes:
•
•
•
Note 3 – Going concern basis of accounting
Note 9 – Carrying value of non-current assets
Note 22 – Royalty liability
3.
Significant accounting policies
The accounting policies set out below and in the related notes, have been applied consistently to all periods presented in these
consolidated financial statements and consistently throughout the Group.
(a)
Going concern basis of accounting
The consolidated financial statements have been prepared on the 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.
For the year ended 31 December 2020, the Group incurred a net loss of A$15.642 million (2019: a net loss of A$18.828
million) and had net cash outflows from operating activities of A$11.304 million (2019: net cash outflows from operating
activities of A$20.069 million).
The notes on pages 49 to 90 are an integral part of these consolidated financial statements.
36
37
49
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
Significant accounting policies (continued)
(a)
Going concern basis of accounting
As at 31 December 2020, the Group had cash and cash equivalents of A$18.879 million (31 December 2019: A$4.716 million)
and net current assets of A$39.281 million (31 December 2019 net current liabilities of A$7.811 million). As of 31 December
2020, the Company has no unused, available credit lines (31 December 2019: Nil).
During the year ended 31 December 2020, the Directors and management have taken the following steps to ensure the Group
has sufficient funding to meet its operating and capital expenditures as they fall due:
• On 16 December 2020, TIG launched a fully underwritten 1 for 1.4 pro – rata accelerated renounceable entitlement
offer at a price of A$0.008 per share to raise up to A$43.512 million. The institutional entitlement offer closed on 17
December 2020 raising gross proceeds of A$17.151 million with the Company’s largest shareholder Dr. Bruce Gray
taking up his full entitlement. As disclosed in Note 35 the entitlement offer closed on 14 January 2021. In total the
Group raised A$43.512 million.
•
In October 2020, TIG signed a GBP 5.5 million (A$10 million) contract for supply of a modular CHPP with UK
based Derek Parnaby Cyclones International Limited. Fabrication and works under the contract are proceeding on
schedule for delivery to Beringovsky in June 2021. Detailed engineering works and preparation for civil construction
are well underway. The construction of the CHPP should enable the Company to sell a higher-value product of a
consistent quality into the SHCC markets. This SHCC product should achieve significantly higher prices than those
currently being achieved for the unwashed coal products being sold into thermal and semi-soft coking coal markets.
• On 5 June 2020, a shortfall bookbuild of 1.3 billion shares at A$0.01 per share was approved by the Group’s
shareholders at the Annual General Meeting. As a result, the Group had received A$13.039 million.
• During 2020, the Group has significantly improved its loading capacity and efficiency of its port operations
efficiency: the Group loaded 760kt by its own barges at a cost significantly lower than that incurred in 2019. An
average loading rate by TIG’s barges increased from 3.3kt per day during the 2019 shipping season to an average
6.5kt per day during 2020 shipping season and the average cost of loading decreased from A$16.19 to A$6.95 per
tonne.
Based on the Group’s cash flows forecasts, the Group will have a surplus of liquidity throughout the twelve-month period from
the date of signing these consolidated financial statements. The cash flows forecasts are dependent, inter alia, upon the
successful implementation of the forecast coal production, pit to port haulage, shipping and coal loading, sales and other key
assumptions applied in determining the Group’s expected future cashflows, which include but are not limited to the following:
• Actual coal quality being consistent with that indicative quality identified in mine planning and testing performed to
date and incorporated into the sales budget and commensurately actual coal prices achieved are at or in excess of
those prices utilised in management forecasting;
• Actual mining and production levels being achieved and implemented within the expected cost levels, structure and
timing;
• Coal shipments being realised within the forecast scheduling parameters, which are subject to a number of factors
including but not limited to barge availability, transhipment efficiency and weather conditions;
• Compliance with ongoing drilling obligations in accordance with the terms of the Amaam and Amaam North
licences; and
• Macroeconomic factors including the commodity (specifically coal) prices, exchange rates and the financial
markets;
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:
•
The quality of coal required to realise the volume of production and sales contemplated in the Group’s forecasts is
sufficiently verified for its reasonableness by coal mining activities conducted to date. This, in conjunction with recent
and forecast current thermal and coking coal prices, provides management with a reasonable basis to conclude that
receipts from sales of coal will meet those expectations reflected in the cash flow forecasts;
Commercial mining operations continue in line with expectations. With the exception of a materially adverse
unforeseen event transpiring, there have been no indicators in the coal production process to date, which would suggest
coal qualities and volumes and the cost of production would be materially different from those assumptions utilised in
the cash flow forecasts;
•
50
38
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
Significant accounting policies (continued)
(a)
Going concern basis of accounting
As at 31 December 2020, the Group had cash and cash equivalents of A$18.879 million (31 December 2019: A$4.716 million)
and net current assets of A$39.281 million (31 December 2019 net current liabilities of A$7.811 million). As of 31 December
2020, the Company has no unused, available credit lines (31 December 2019: Nil).
During the year ended 31 December 2020, the Directors and management have taken the following steps to ensure the Group
has sufficient funding to meet its operating and capital expenditures as they fall due:
• On 16 December 2020, TIG launched a fully underwritten 1 for 1.4 pro – rata accelerated renounceable entitlement
offer at a price of A$0.008 per share to raise up to A$43.512 million. The institutional entitlement offer closed on 17
December 2020 raising gross proceeds of A$17.151 million with the Company’s largest shareholder Dr. Bruce Gray
taking up his full entitlement. As disclosed in Note 35 the entitlement offer closed on 14 January 2021. In total the
Group raised A$43.512 million.
•
In October 2020, TIG signed a GBP 5.5 million (A$10 million) contract for supply of a modular CHPP with UK
based Derek Parnaby Cyclones International Limited. Fabrication and works under the contract are proceeding on
schedule for delivery to Beringovsky in June 2021. Detailed engineering works and preparation for civil construction
are well underway. The construction of the CHPP should enable the Company to sell a higher-value product of a
consistent quality into the SHCC markets. This SHCC product should achieve significantly higher prices than those
currently being achieved for the unwashed coal products being sold into thermal and semi-soft coking coal markets.
• On 5 June 2020, a shortfall bookbuild of 1.3 billion shares at A$0.01 per share was approved by the Group’s
shareholders at the Annual General Meeting. As a result, the Group had received A$13.039 million.
• During 2020, the Group has significantly improved its loading capacity and efficiency of its port operations
efficiency: the Group loaded 760kt by its own barges at a cost significantly lower than that incurred in 2019. An
average loading rate by TIG’s barges increased from 3.3kt per day during the 2019 shipping season to an average
6.5kt per day during 2020 shipping season and the average cost of loading decreased from A$16.19 to A$6.95 per
tonne.
Based on the Group’s cash flows forecasts, the Group will have a surplus of liquidity throughout the twelve-month period from
the date of signing these consolidated financial statements. The cash flows forecasts are dependent, inter alia, upon the
successful implementation of the forecast coal production, pit to port haulage, shipping and coal loading, sales and other key
assumptions applied in determining the Group’s expected future cashflows, which include but are not limited to the following:
• Actual coal quality being consistent with that indicative quality identified in mine planning and testing performed to
date and incorporated into the sales budget and commensurately actual coal prices achieved are at or in excess of
those prices utilised in management forecasting;
• Actual mining and production levels being achieved and implemented within the expected cost levels, structure and
• Coal shipments being realised within the forecast scheduling parameters, which are subject to a number of factors
including but not limited to barge availability, transhipment efficiency and weather conditions;
• Compliance with ongoing drilling obligations in accordance with the terms of the Amaam and Amaam North
• Macroeconomic factors including the commodity (specifically coal) prices, exchange rates and the financial
timing;
licences; and
markets;
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:
•
•
The quality of coal required to realise the volume of production and sales contemplated in the Group’s forecasts is
sufficiently verified for its reasonableness by coal mining activities conducted to date. This, in conjunction with recent
and forecast current thermal and coking coal prices, provides management with a reasonable basis to conclude that
receipts from sales of coal will meet those expectations reflected in the cash flow forecasts;
Commercial mining operations continue in line with expectations. With the exception of a materially adverse
unforeseen event transpiring, there have been no indicators in the coal production process to date, which would suggest
coal qualities and volumes and the cost of production would be materially different from those assumptions utilised in
the cash flow forecasts;
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
Significant accounting policies (continued)
(a)
Going concern basis of accounting (continued)
•
•
Coal shipments have been forecast after consideration of actual historic port operating performance and those climactic
and other conditions which would be reasonably expected to occur and influence the Group’s shipping capabilities; and
Licence Compliance obligations for both the Amaam and Amaam North tenements have been planned for and are
expected to be achieved with minimal risk of non-compliance with licence terms and conditions. There is, therefore, a
reasonable expectation that the Group will continue to be compliant with licence drilling obligations.
Accordingly, the Directors have determined that it is appropriate for the Group to continue to adopt the going concern basis in
preparing these consolidated financial statements.
(b)
Basis of consolidation
(i)
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.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the
Group. Losses applicable to the non-controlling interests (NCI) in a subsidiary are allocated to the non-controlling interests
even if doing so reduces the non-controlling interests below zero.
All intra-group balances and transactions, and any unrealised gains and losses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.
(ii)
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination
is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group,
liabilities incurred by the Group to the former owners of the acquiree and the equity instruments issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred. 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 acquiree; 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 difference 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.
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, settlement being 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 the 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 judgements to be made by the Group.
38
39
51
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
3.
Significant accounting policies (continued)
(b)
Basis of consolidation
(iii) Non-controlling interests
For each business combination, the Group elects to measure any 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 an 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.
(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
(c)
Foreign currency
(i)
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.
(ii)
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.
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.
(iii)
Foreign operations
For the purpose of presenting these consolidated financial statements, the assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are translated to the Company’s functional currency at exchange
rates at the reporting date. The income and expenses of foreign operations are translated to Australian dollars at average
exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange
rates at the dates of the transactions are used.
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 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.
52
40
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
3.
Significant accounting policies (continued)
(b)
Basis of consolidation
(iii) Non-controlling interests
For each business combination, the Group elects to measure any 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 an 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
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
and no gain or loss is recognised in profit or loss.
(iv)
Loss of control
subsidiary is measured at fair value when control is lost
(c)
Foreign currency
(i)
Functional and presentation currency
measured using that functional currency.
(ii)
Foreign currency transactions
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
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.
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.
(iii)
Foreign operations
For the purpose of presenting these consolidated financial statements, the assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on acquisition, are translated to the Company’s functional currency at exchange
rates at the reporting date. The income and expenses of foreign operations are translated to Australian dollars at average
exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange
rates at the dates of the transactions are used.
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 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.
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
3.
Significant accounting policies (continued)
(d)
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s statement of financial position when the Group becomes
a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that do not have a
significant financing component which are measured at transaction price. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate,
on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in profit or loss
(i)
Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by
regulation or convention in the marketplace. All recognised financial assets are measured subsequently in their entirety at either
amortised cost or fair value, depending on the classification of the financial assets.
The Group has the following financial assets:
•
Trade and other receivables.
Trade and other receivables are financial assets held within a business model whose objective is to hold financial assets
in order to collect contractual cash flows; and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding. Trade and other
receivables are measured subsequently at amortised cost. Refer to Note 14 for details of trade and other receivables.
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.
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.
(ii)
Financial liabilities
All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value through
profit or loss. The Group has the following 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.
Leases
Leases to be paid in accordance with a payment schedule based on the contractual agreements.
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable is recognised in profit or loss.
Financial assets and liabilities are offset, 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.
40
41
53
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
3.
(e)
Significant accounting policies (continued)
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.
(f)
(i)
Intangible assets
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, all existing mineral rights were written-off. Details of the policy on
assessing the carrying value of non-current assets are disclosed in Note 9.
(ii)
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(b)(ii) (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 in Note 3(g) 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, all existing goodwill was written-off. Details of the
policy on assessing the carrying value of non-current assets are disclosed in Note 9.
(iii) 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.
(iv)
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 profit or loss as incurred.
(v)
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 life 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.
(g)
Impairment of financial assets (including receivables)
The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at
amortised cost or at fair value through other comprehensive income, trade receivables, as well as contract assets. The amount of
expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective
financial instrument.
The Group always recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected
credit losses on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the
current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk
since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial
recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime
ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a
financial instrument that are possible within 12 months after the reporting date.
54
42
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
Significant accounting policies (continued)
3.
(e)
Share capital
Ordinary shares
(f)
(i)
Intangible assets
Mineral Rights
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.
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, all existing mineral rights were written-off. Details of the policy on
assessing the carrying value of non-current assets are disclosed in Note 9.
(ii)
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(b)(ii) (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 in Note 3(g) 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, all existing goodwill was written-off. Details of the
policy on assessing the carrying value of non-current assets are disclosed in Note 9.
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated
(iii) Other intangible assets
amortisation and accumulated impairment losses.
(iv)
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 profit or loss as incurred.
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 life for computer software is three to five
(v)
Amortisation
years.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(g)
Impairment of financial assets (including receivables)
The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at
amortised cost or at fair value through other comprehensive income, trade receivables, as well as contract assets. The amount of
expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective
financial instrument.
The Group always recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected
credit losses on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the
current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk
since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial
recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime
ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a
financial instrument that are possible within 12 months after the reporting date.
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
3.
Significant accounting policies (continued)
(g)
Impairment of financial assets (including receivables) (continued)
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of
the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is
based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for
financial assets, this is represented by the assets’ gross carrying amount at the reporting date. For financial assets, the expected
credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous
reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group
measures the loss allowance at an amount equal to 12-month ECL at the current reporting date, except for assets for which the
simplified approach was used. The Group recognises an impairment gain or loss in profit or loss for all financial instruments
with a corresponding adjustment to their carrying amount through a loss allowance account.
(h)
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. The
probability of an outflow of economic benefits is one of the key criteria in determining the recognition and measurement of
legal and constructive obligations:
•
•
•
If the likelihood of an outflow of economic resources is remote, neither disclosure of a contingency nor the
recognition of a provision is made;
If the likelihood of an outflow of economic resources is possible, a contingent liability is disclosed in the financial
statements, unless the acquisition method of accounting for business combinations in Note 3(b)(ii) are applied and a
liability equivalent to the fair value of the future outflows of economic benefits is able to be determined; or
If the likelihood of an outflow of economic resources is probable, a provision is recognised.
Provisions are determined by assessing the present value of the expected future outflow of economic benefits. The discounting
of the expected (probable) future cash flows 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 charge.
(i)
Leases
For short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets, the Group
recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another
systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
(j)
Exploration and evaluation costs
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.
For both Amaam and Amaam North areas of interest, 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.
42
43
55
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
3.
(k)
Significant accounting policies (continued)
Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services and similar value added taxes (VAT in
Russia and GST in Australia), except where the amount of VAT/GST incurred is not recoverable from the taxation authority. In
these circumstances, the VAT/GST is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated excluding the amount of VAT/GST included. The net amount of VAT/GST recoverable
from, or payable to, the relevant tax authorities 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 VAT/GST components of cash flows arising from investing and
financing activities which are recoverable from, or payable to, the relevant tax authorities are classified as operating cash flows.
(l)
Other significant accounting policies
Significant accounting policies that summarise the measurement and recognition basis used and which are relevant to an
understanding of the consolidated financial statements are provided throughout the notes to the consolidated financial
statements.
56
44
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
Significant accounting policies (continued)
3.
(k)
Goods and services tax
Revenue, expenses and assets are recognised net of the amount of goods and services and similar value added taxes (VAT in
Russia and GST in Australia), except where the amount of VAT/GST incurred is not recoverable from the taxation authority. In
these circumstances, the VAT/GST is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated excluding the amount of VAT/GST included. The net amount of VAT/GST recoverable
from, or payable to, the relevant tax authorities 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 VAT/GST components of cash flows arising from investing and
financing activities which are recoverable from, or payable to, the relevant tax authorities are classified as operating cash flows.
(l)
Other significant accounting policies
Significant accounting policies that summarise the measurement and recognition basis used and which are relevant to an
understanding of the consolidated financial statements are provided throughout the notes to the consolidated financial
statements.
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
4.
Application of new and revised accounting standards
(a)
New and amended standards adopted
The Group has adopted all the following new and revised Standards and Interpretations issued by the Australian Accounting
Standards Board (the AASB) that are relevant to its operations and effective for an accounting period that begins on or after 1
January 2020:
AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework
AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform
AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet
Issued in Australia
The application of other Standards and amendments has had no impact on the Group’s consolidated financial report.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective
(b)
Standard and interpretations in issue 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 2020 and have not been applied in preparing these consolidated financial statements.
Standard/Interpretation
Effective for annual reporting periods
beginning on or after
AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate
Benchmark Reform – Phase 2
Applicable to annual reporting periods
beginning on or after 1 January 2021
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or
Contribution of Assets between an investor and its Associate or Joint Venture;
Applicable to annual reporting periods
beginning on or after 1 January 2022
AASB 2020-3 Amendments to Australian Accounting Standards – Annual
Improvements 2018-2020 and Other Amendments
Applicable to annual reporting periods
beginning on or after 1 January 2022
AASB 17 Insurance Contracts and AASB 2020-5 Amendments to Australian
Accounting Standards – Insurance Contracts
Applicable to annual reporting periods
beginning on or after 1 January 2023
AASB 2020-1 Amendments to Australian Accounting Standards – Classification
of Liabilities as Current or Non-current and AASB 2020-6 Amendments to
Australian Accounting Standards – Classification of Liabilities as Current or Non-
current – Deferral of Effective Date
Applicable to annual reporting periods
beginning on or after 1 January 2023
The Directors of the Company do not anticipate that the application of these amendments will have a material impact on the
Group's consolidated financial statements.
44
45
57
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
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.
(a)
Financial assets and liabilities
Fair value 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. Fair value is determined at initial recognition and, for financial assets and financial liabilities that
are not measured at fair value, but for which fair value disclosures are required, at each annual reporting date.
Further information about the assumptions made in measuring fair values is included in Note 25.
58
46
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
5.
Determination of fair values
liabilities.
A number of the Group’s accounting policies and disclosures require the determination of fair value for financial assets and
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.
(a)
Financial assets and liabilities
Fair value 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. Fair value is determined at initial recognition and, for financial assets and financial liabilities that
are not measured at fair value, but for which fair value disclosures are required, at each annual reporting date.
Further information about the assumptions made in measuring fair values is included in Note 25.
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
6.
Segment reporting
The Group has two reportable segments, as described below, which are the Group’s main mineral mining and 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 the Group accounting policies. For
the year ended 31 December 2020, the activities of the Group are managed in two reportable operating segments outlined
below, consistent with how they were managed in the prior periods:
Amaam North Project
Amaam Project
Other
The Amaam North Project is located in the Bering Basin in the Chukotka
province, Russia and consists of the Amaam North tenement. The Project also
includes infrastructure assets associated with the Beringovsky Port and Coal
Terminal.
The Amaam Project is in the Bering Basin in the Chukotka province, Russia and
consists of the Amaam tenement.
Consists of corporate and office expenses primarily incurred at the Group’s
Moscow and Melbourne offices. 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
“Other”, which is not a reportable segment.
31 December 2020
Revenue from the shipment and sale of
coal
Finance and other income
Cost of coal sold
Change in provisions for inventories
Exploration and evaluation expenses
Royalty expense
Finance costs
Other segment expenses
Segment result
Segment assets
Segment liabilities
31 December 2019
Revenue from the shipment and sale of
coal
Finance and other income
Cost of coal sold
Change in provisions for inventories
Exploration and evaluation expenses
Royalty expense
Finance costs
Other segment expenses
Segment result
Segment assets
Segment liabilities
Amaam North
Project
A$’000
Amaam
Project
A$’000
Total
Reportable
Segments
A$’000
Other
A$’000
Total
A$’000
47,889
-
(48,216)
-
(104)
(5,690)
(2,785)
(1,856)
(10,762)
85,643
(35,847)
50,141
300
(45,601)
(3,363)
-
(6,304)
(4,880)
(5,474)
(15,181)
87,591
(80,311)
-
-
-
-
(55)
-
-
(76)
(131)
30
(119)
-
-
-
-
(310)
-
-
-
(310)
131
(129)
47,889
-
(48,216)
-
(159)
(5,690)
(2,785)
(1,932)
(10,893)
85,673
(35,966)
50,141
300
(45,601)
(3,363)
(310)
(6,304)
(4,880)
(5,474)
(15,491)
87,722
(80,440)
-
-
-
-
-
-
-
(4,732)
(4,732)
87
-
-
-
-
-
-
-
-
(3,293)
(3,293)
51
-
47,889
-
(48,216)
-
(159)
(5,690)
(2,785)
(6,664)
(15,625)
85,760
(35,966)
50,141
300
(45,601)
(3,363)
(310)
(6,304)
(4,880)
(8,767)
(18,784)
87,773
(80,440)
46
47
59
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
6.
Segment reporting (continued)
Geographical information
The Group manages its business on a worldwide basis but primarily holds non-current assets in one geographic segment, being
Russia.
2020
2019
Revenues
A$’000
Non-current
assets
A$’000
Revenues
A$’000
Non-current
assets
A$’000
43,188
4,701
47,889
-
35,399
35,399
47,949
2,192
50,141
-
41,100
41,100
Asia
Russia
Total
Customer information
Included in revenues from the sale and shipment of coal are revenues of A$39.373 million (2019: A$48.649 million) which
arose from sales to major customers who individually contributed at least 10% of total revenues from shipment and sales of
coal.
Revenue
7.
Revenue from thermal coal sales
Revenue from semisoft coal sales
Revenue from shipment of coal
31 December
2020
A$’000
31 December
2019
A$’000
28,101
13,204
6,584
47,889
22,776
21,822
5,543
50,141
60
48
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
6.
Segment reporting (continued)
Geographical information
Russia.
Asia
Russia
Total
Customer information
coal.
7.
Revenue
Revenue from thermal coal sales
Revenue from semisoft coal sales
Revenue from shipment of coal
2020
2019
Revenues
Non-current
Revenues
A$’000
A$’000
assets
A$’000
Non-current
assets
A$’000
43,188
4,701
47,889
-
35,399
35,399
47,949
2,192
50,141
-
41,100
41,100
Included in revenues from the sale and shipment of coal are revenues of A$39.373 million (2019: A$48.649 million) which
arose from sales to major customers who individually contributed at least 10% of total revenues from shipment and sales of
31 December
31 December
2020
A$’000
2019
A$’000
28,101
13,204
6,584
47,889
22,776
21,822
5,543
50,141
The Group manages its business on a worldwide basis but primarily holds non-current assets in one geographic segment, being
Recognition and measurement: Revenue
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
7.
Revenue (continued)
Revenue from the sale of coal is recognised when all the following conditions have been satisfied:
(a) the parties to the contract have approved the contract (in writing, orally or in accordance with other customary business practices) and
are committed to perform their respective obligations;
(b) the Company can identify each party’s rights regarding the goods or services to be transferred;
(c) the Company can identify the payment terms for the goods or services to be transferred;
(d) the contract has commercial substance (ie the risk, timing or amount of the entity’s future cash flows is expected to change as a result of
the contract); and
(e) it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will
be transferred to the customer. In evaluating whether collectability of an amount of consideration is probable, the Company considers only
the customer’s ability and intention to pay that amount of consideration when it is due. The amount of consideration to which the Company
will be entitled may be less than the price stated in the contract if the consideration is variable because a price concession may be offer ed to
the customer.
Revenue is recognised when (or as) the Company satisfies a performance obligation by transferring a promised good or service to a
customer. An asset is transferred when (or as) the customer obtains control of that asset.
Revenue is measured at the fair value of the consideration received or receivable, reflecting contractually defined terms of payment and
excluding taxes, levies or duties collected on behalf of the government/ other statutory bodies.
Coal products are sold in accordance with internationally recognised shipping terms (INCO), primarily on either free on board (“FOB”),
Beringovsky Port or cost and freight (“CFR”) terms. For sales made on FOB basis there is only one performance obligation, which arise
from the delivery of coal on board the vessel. Sales made in accordance with CFR terms differ to FOB as the Company is obliged to pay for
the cost of shipping and other costs necessary to bring the product to the destination port. Accordingly, in CFR sales contracts the
performance obligations arise from the delivery of coal on board the vessel and the provision of shipping services to the customer. For sales
are made on both FOB and CFR basis, the satisfaction of the performance obligation in respect of coal delivery is achieved after the time the
goods have been delivered on board the vessel. Satisfaction of the performance obligation in respect of coal shipping is achieved at the point
of delivery on shore at the destination port.
Preliminary volume and quality of coal shipped are independently measured upon loading the vessel at the Beringovsky Port. Coal sales
contracts include terms in accordance with which the sales price is defined with reference to the initial coal quality parameters, as adjusted
for the results of coal quality tests performed upon delivery of the product to the destination port. If coal does not meet minimum standards,
the shipment may be either rejected or an adjustment made up or down to the initial contract price. Accordingly, in rare circumstances, if the
Company cannot objectively determine that the coal provided to the customer is in accordance with the agreed-upon specifications in the
contract, the Company recognises revenue on coal sales only when the coal quality tests at the destination port affirm both the mass and
quality characteristics.
8.
Administrative and other operating expenses
Wages, salaries and other personnel costs
Legal fees and compliance costs
Contractors and consultants’ fees
Accounting and audit fees
Office accommodation costs
Taxes and charges
Bank charges
Travel
Insurance
ASX listing fees
IT and communication costs
Depreciation expense
Port operating expenses
Other
31 December
2020
A$’000
31 December
2019
A$’000
(3,152)
(527)
(309)
(283)
(218)
(214)
(169)
(119)
(119)
(112)
(65)
(50)
-
(690)
(6,027)
(3,587)
(422)
(898)
(265)
(266)
(441)
(398)
(302)
(48)
(109)
(118)
(474)
(612)
(1,051)
(8,991)
48
49
61
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
9.
Carrying value of non-current assets
Amaam North Project CGU
During the year ended 31 December 2020, the carrying value of non-current assets of Amaam North Project CGU, net of
accumulated depreciation, decreased by A$8.555 million to A$32.545 million (As of 31 December 2019 A$41.100 million)
(refer to Note 16 for details).
As at 31 December 2020, the Group concluded that due to:
•
•
Production and sales volumes achieved to date; and
Progress in the development of the CHPP project during 2020
There is no necessity to recognise further impairment losses for the Amaam North Project CGU and accordingly the non-
current assets are measured at their carrying value.
Management also believes that at this stage of Amaam North’s development, until both production and sales levels and related
financial performance assumptions currently included in deriving the Amaam North CGU’s positive recoverable amount, are
verified by sufficient observable indications of the ability to achieve these assumptions on an ongoing basis, there is no current
necessity for the reversal of impairment losses recognised in prior periods.
Amaam Project CGU
During the year ended 31 December 2020, there were minimal activities undertaken at the Amaam Project CGU, there being no
additions to the carrying value of non-current assets, their carrying value remaining at $Nil as at 31 December 2020. As the
development of the Amaam Project is not expected in the foreseeable future, as at 31 December 2020, the Group concluded
that there are no indications that asset write-downs recognised in prior periods for the Amaam Project CGU require reversal.
The carrying amounts of the Group’s non-financial assets excluding goodwill are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For
goodwill the recoverable amount is estimated at each reporting date.
Recognition and measurement: Non-current assets
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 generate 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
recognised in respect of cash-generating units are allocated first to reduce the carrying value of any goodwill allocated to the
cash generating units and then to reduce the carrying amount of the other assets in the cash generating 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.
62
50
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
9.
Carrying value of non-current assets
Amaam North Project CGU
During the year ended 31 December 2020, the carrying value of non-current assets of Amaam North Project CGU, net of
accumulated depreciation, decreased by A$8.555 million to A$32.545 million (As of 31 December 2019 A$41.100 million)
(refer to Note 16 for details).
As at 31 December 2020, the Group concluded that due to:
•
•
Production and sales volumes achieved to date; and
Progress in the development of the CHPP project during 2020
There is no necessity to recognise further impairment losses for the Amaam North Project CGU and accordingly the non-
current assets are measured at their carrying value.
Management also believes that at this stage of Amaam North’s development, until both production and sales levels and related
financial performance assumptions currently included in deriving the Amaam North CGU’s positive recoverable amount, are
verified by sufficient observable indications of the ability to achieve these assumptions on an ongoing basis, there is no current
necessity for the reversal of impairment losses recognised in prior periods.
Amaam Project CGU
During the year ended 31 December 2020, there were minimal activities undertaken at the Amaam Project CGU, there being no
additions to the carrying value of non-current assets, their carrying value remaining at $Nil as at 31 December 2020. As the
development of the Amaam Project is not expected in the foreseeable future, as at 31 December 2020, the Group concluded
that there are no indications that asset write-downs recognised in prior periods for the Amaam Project CGU require reversal.
The carrying amounts of the Group’s non-financial assets excluding goodwill are reviewed at each reporting date to determine
Recognition and measurement: Non-current assets
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For
goodwill the recoverable amount is estimated at each reporting date.
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 generate 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
recognised in respect of cash-generating units are allocated first to reduce the carrying value of any goodwill allocated to the
cash generating units and then to reduce the carrying amount of the other assets in the cash generating 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.
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
10.
Income tax expense
A reconciliation between tax expense and accounting profit multiplied by Australia’s domestic tax rate for the years ended 31
December 2020 and 2019 is set out below:
Loss before tax
Income tax benefit using the domestic
corporation tax rate of 30%
Changes in income tax expense due to:
Effect of different tax rates of subsidiaries operating in
foreign jurisdictions
Non-deductible loss resulting from change in royalty
agreement liability
Assessable imputed interest income
Non-deductible expenses/(non-assessable income)
Current period tax losses for which no deferred tax asset was
recognised
Total income tax expense
Current tax expense
Deferred tax benefit
Total income tax expense
Unrecognised deferred tax assets
31 December
2020
A$’000
31 December
2019
A$’000
(15,625)
(4,688)
(18,784)
(5,635)
1,792
670
-
1,991
252
17
2,223
711
80
2,056
609
44
31 December
2020
A$’000
31 December
2019
A$’000
17
-
17
44
-
44
31 December
2020
A$’000
31 December
2019
A$’000
Net deferred tax assets not recognised in respect of tax losses
27,120
26,868
As at 31 December 2020 and 2019, no deferred tax assets have been recognised for carried forward tax losses as it is not
probable that future taxable profit will be available against which the Group can utilise the benefits.
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.
Recognition and measurement: Income taxes
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.
50
51
63
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
10.
Income tax expense (continued)
Deferred tax
Recognition and measurement: Income taxes (continued)
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.
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.
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.
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.
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.
The tax losses incurred in Australia do not expire under current tax legislation. In overseas jurisdictions, tax losses can be carried
forward for varying periods.
64
52
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
10.
Income tax expense (continued)
11. Loss per share
Deferred tax
Recognition and measurement: Income taxes (continued)
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.
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.
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
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.
realised.
Tax exposure
Tax consolidation
Realm Coal Limited.
forward for varying periods.
The tax losses incurred in Australia do not expire under current tax legislation. In overseas jurisdictions, tax losses can be carried
Loss per share
Basic loss per share – cents
Diluted loss per share – cents
31 December
2020
Cents
31 December
2019
Cents
a
b
(0.22)
(0.22)
(1.05)
(1.05)
Basic loss per share
(a)
The calculation of basic loss per share at 31 December 2020 was based on the loss attributable to ordinary equity holders of the
Company of A$15.616 million (At 31 December 2019: loss of A$18.715 million) and a weighted average number of ordinary
shares outstanding during the period ended 31 December 2020 of 6,967,457,740 (For the year ended 31 December 2019:
1,791,669,870).
Diluted loss per share
(b)
The calculation of diluted loss per share at 31 December 2020 and 2019 is the same as basic loss per share. As at 31 December
2020, the Company had 9,907,000 outstanding options over ordinary shares (31 December 2019: 28,346,000 options), which
have been excluded from the calculation of diluted earnings per share because they are anti-dilutive for the reporting period.
12. Cash and cash equivalents
Bank balances
Cash and cash equivalents
All cash and cash equivalents are available for use by the Group.
31 December
2020
A$’000
31 December
2019
A$’000
18,879
18,879
4,716
4,716
The Company and its wholly-owned Australian resident entity are part of a tax consolidated group. As a consequence, all
members of the tax consolidated group are taxed as a single entity. The head entity within the tax consolidated group is Tigers
13. Reconciliation of loss for the year to net cash flows from operating activities
Cash flows from operating activities
Loss for the period
Adjustments for:
Foreign exchange loss/(gain)
Share based payments
Royalty expense
Depreciation expense
Change in provisions for inventories
Write off of property, plant and equipment
Income tax expense
Movements in working capital
Change in trade and other receivables
Change in inventory
Change in other assets
Change in prepayments
Change in employee provisions
Change in trade and other payables
Net cash used in operating activities
24
21
10
31 December
2020
A$’000
31 December
2019
A$’000
(15,642)
(18,828)
655
52
5,690
8,350
-
254
17
(624)
(2,040)
(1,083)
(22)
891
(470)
(7,956)
(11,304)
(932)
248
6,304
6,166
3,363
460
44
(3,175)
(7,610)
(15,270)
8
(1,833)
(53)
7,864
(20,069)
52
53
65
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
14. Trade and other receivables
Trade and other receivables
VAT and GST receivable
15.
Inventories
Coal inventories: net of provision of A$2.963 million for recognition of
inventories at the lower of cost and their net realisable value (At 31
December 2019: A$4.432 million)
Fuel (At 31 December 2019: net of provisions of A$0.006 million)
Other consumables: net of provisions of A$0.298 million (At 31
December 2019 A$0.391 million)
Current
Non-current
Total
31 December
2020
A$’000
31 December
2019
A$’000
5,888
3,956
9,844
3,311
6,885
10,196
31 December
2020
A$’000
31 December
2019
A$’000
11,095
1,370
10,664
23,129
20,275
2,854
23,129
11,999
3,900
12,906
28,805
28,805
-
28,805
Management performs a regular review of the recoverability of inventories, including coal stocks, to assess the Company’s
ability to recover the cost of inventories on hand.
The amount of inventories recognised as an expense during the year ended 31 December 2020 was A$34.376 million (2019:
A$27.592 million).
Inventories are valued at the lower of cost and net realisable value and upon initial recognition on the weighted average cost
Recognition and measurement: Inventories
basis. The cost of raw materials and consumable stores is the purchase price. The cost of partly-processed and saleable products
is generally the cost of production, including:
•
•
•
labour costs, materials and contractor expenses which are directly attributable to the extraction and processing of ore;
the depreciation of mining properties and leases and of property, plant and equipment used in the extraction and processing
of ore; and
production overheads.
Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs
necessary to make the sale.
Inventories are periodically assessed for the existence of slow moving and obsolete stocks and adjustments to the recoverable
amount recognised as necessary.
Inventories which are planned to be realized later than in 12 months from the year end are classified as non-current.
66
54
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
14. Trade and other receivables
Trade and other receivables
VAT and GST receivable
15.
Inventories
Coal inventories: net of provision of A$2.963 million for recognition of
inventories at the lower of cost and their net realisable value (At 31
December 2019: A$4.432 million)
Fuel (At 31 December 2019: net of provisions of A$0.006 million)
Other consumables: net of provisions of A$0.298 million (At 31
December 2019 A$0.391 million)
Current
Non-current
Total
31 December
31 December
2020
A$’000
2019
A$’000
5,888
3,956
9,844
3,311
6,885
10,196
31 December
31 December
2020
A$’000
2019
A$’000
11,095
1,370
10,664
23,129
20,275
2,854
23,129
11,999
3,900
12,906
28,805
28,805
-
28,805
Management performs a regular review of the recoverability of inventories, including coal stocks, to assess the Company’s
ability to recover the cost of inventories on hand.
The amount of inventories recognised as an expense during the year ended 31 December 2020 was A$34.376 million (2019:
A$27.592 million).
Inventories are valued at the lower of cost and net realisable value and upon initial recognition on the weighted average cost
Recognition and measurement: Inventories
basis. The cost of raw materials and consumable stores is the purchase price. The cost of partly-processed and saleable products
is generally the cost of production, including:
labour costs, materials and contractor expenses which are directly attributable to the extraction and processing of ore;
the depreciation of mining properties and leases and of property, plant and equipment used in the extraction and processing
•
•
•
of ore; and
production overheads.
necessary to make the sale.
amount recognised as necessary.
Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs
Inventories are periodically assessed for the existence of slow moving and obsolete stocks and adjustments to the recoverable
Inventories which are planned to be realized later than in 12 months from the year end are classified as non-current.
54
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6
1
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
16.
Property, plant and equipment (continued)
During the year ended 31 December 2020, CAT D10 bulldozer with a carrying value of RUB 11.598 million (A$0.254 million)
was written-off due to its present condition (2019: three Scania haulage trucks with a carrying value of RUB 11.743 million
(A$0.460 million) were written-off).
As disclosed in Note 20, the Group leases various mining and port equipment. The carrying value of these assets as at 31
December 2020 is RUB 626.045 million (A$11.076 million) (31 December 2019: RUB 858.425 million (A$19.844 million)).
Recognition and measurement: Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and cumulative impairment losses.
Cost includes expenditure that is directly attributable to the acquisition or construction of an asset.
Once an undeveloped mining project has been determined as commercially viable and approval to mine has been given,
expenditure other than that on land, buildings, fixtures and fittings, plant and equipment and capital work in progress is
capitalised under “Mine Infrastructure”. Development costs incurred after the commencement of production are capitalised to
the extent they are expected to give rise to a future economic benefit.
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.
Depreciation
Property, plant and equipment is depreciated over the lesser of its useful life or over the remaining life of the mine where
there is no reasonable alternative use for the asset. The useful lives and residual values for material assets and categories of
assets are reviewed annually and changes are reflected prospectively. Depreciation commences when an asset is available and
ready for its intended use. The major categories of property, plant and equipment are depreciated on a straight-line basis,
except for mining assets, which are depreciated on a units of production basis.
Straight-line basis
Assets within operations for which production is not expected to fluctuate significantly from one year to another or which
have a physical life shorter than the related mine are depreciated on a straight-line basis.
The estimated useful lives are as follows:
•
•
•
Buildings
Plant & equipment
Fixtures & fittings
Units of production basis
10 – 20 years
3 – 10 years
3 – 10 years
For mining assets, consumption of the economic benefits of the asset is linked to production. These assets are depreciated on
the lesser of the respective assets’ useful lives and the life of the ore body in respect of which the assets are being used.
Where the useful life of the assets is greater than the life of the ore body for which they are being utilised, depreciation is
determined on a units of production basis. In applying the units of production method, depreciation is normally calculated
based on production in the period as a percentage of total expected production in current and future periods based on ore
reserves and other mineral resources.
68
56
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
16.
Property, plant and equipment (continued)
16.
Property, plant and equipment (continued)
During the year ended 31 December 2020, CAT D10 bulldozer with a carrying value of RUB 11.598 million (A$0.254 million)
was written-off due to its present condition (2019: three Scania haulage trucks with a carrying value of RUB 11.743 million
(A$0.460 million) were written-off).
As disclosed in Note 20, the Group leases various mining and port equipment. The carrying value of these assets as at 31
December 2020 is RUB 626.045 million (A$11.076 million) (31 December 2019: RUB 858.425 million (A$19.844 million)).
Items of property, plant and equipment are measured at cost less accumulated depreciation and cumulative impairment losses.
Recognition and measurement: Property, plant and equipment
Cost includes expenditure that is directly attributable to the acquisition or construction of an asset.
Once an undeveloped mining project has been determined as commercially viable and approval to mine has been given,
expenditure other than that on land, buildings, fixtures and fittings, plant and equipment and capital work in progress is
capitalised under “Mine Infrastructure”. Development costs incurred after the commencement of production are capitalised to
the extent they are expected to give rise to a future economic benefit.
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.
Depreciation
Property, plant and equipment is depreciated over the lesser of its useful life or over the remaining life of the mine where
there is no reasonable alternative use for the asset. The useful lives and residual values for material assets and categories of
assets are reviewed annually and changes are reflected prospectively. Depreciation commences when an asset is available and
ready for its intended use. The major categories of property, plant and equipment are depreciated on a straight-line basis,
except for mining assets, which are depreciated on a units of production basis.
Straight-line basis
Assets within operations for which production is not expected to fluctuate significantly from one year to another or which
have a physical life shorter than the related mine are depreciated on a straight-line basis.
The estimated useful lives are as follows:
•
•
•
Buildings
Plant & equipment
Fixtures & fittings
Units of production basis
10 – 20 years
3 – 10 years
3 – 10 years
For mining assets, consumption of the economic benefits of the asset is linked to production. These assets are depreciated on
the lesser of the respective assets’ useful lives and the life of the ore body in respect of which the assets are being used.
Where the useful life of the assets is greater than the life of the ore body for which they are being utilised, depreciation is
determined on a units of production basis. In applying the units of production method, depreciation is normally calculated
based on production in the period as a percentage of total expected production in current and future periods based on ore
reserves and other mineral resources.
Stripping Costs
Recognition and measurement: Property, plant and equipment (continued)
In open pit mining operations, overburden and other waste materials must be removed to access ore from which minerals can be
extracted economically. The process of removing overburden and waste materials is referred to as stripping. Stripping costs during
the development of a mine (or pit), before production commences, are generally expensed as incurred except when capitalised as
part of the cost of construction of the mine (or pit) and subsequently amortised over the life of the mine (or pit) on a units of
production basis only where the below criteria are all met:
•
•
•
it must be probable that there will be an economic benefit in a future accounting period because the stripping activity has
improved access to the ore body;
it must be possible to identify the “component” of the orebody for which access has been improved; and
it must be possible to reliably measure the costs that relate to the stripping activity.
Production phase stripping can give rise to two benefits: the extraction of ore in the current period and improved access to ore
which will be extracted in future periods. When the cost of stripping which has a future benefit is not distinguishable from the cost
of producing current inventories, the stripping cost is allocated to each of these activities based on a relevant production measure
using a life-of-component strip ratio. The ratio divides the tonnage of waste mined for the component for the period either by the
quantity of ore mined for the component or by the quantity of minerals contained in the ore mined for the component. Stripping
costs for the component are deferred to the extent that the current period ratio exceeds the life of component ratio.
17. Trade & other payables
Trade payables and accrued expenses
Taxes payable
Current
Non-current
Total
31 December
2020
A$’000
31 December
2019
A$’000
3,941
53
3,994
3,879
115
3,994
14,052
58
14,110
13,976
134
14,110
56
57
69
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
18. Loans payable
Shareholders’ loans payable
Opening balance of loans
Borrowings during the year
Repayment of borrowings
Offset against shares issued
Other changes
Net effect of movement in exchange rates
Total loans at end of the year
Shareholders’ loans
31 December
2020
A$’000
31 December
2019
A$’000
1,830
1,830
31 December
2020
A$’000
29,393
-
-
(27,914)
280
71
1,830
29,393
29,393
31 December
2019
A$’000
1,516
46,141
(20,445)
-
722
1,459
29,393
On 18 December 2019, the Group launched an entitlement offer. Both Dr Bruce Gray and BV Holding Limited agreed to take
part in this entitlement offer, and in accordance with the terms of their respective loan agreements, elected to set-off outstanding
principal and interest amounts against their obligations to pay for the shares received by fully taking up their Entitlements. On 2
January 2020, following the issue of shares to BV Mining Holdings Limited, the loan payable to BV Mining Holdings Limited in
the amount of A$14.776 million was settled in full. On 2 January 2020, A$13.138 million out of A$14.641 million loan payable
to Dr Bruce Gray was settled, following the issuance of shares to Dr. Gray. On 4 February 2021, the balance of the outstanding
loan payable and interest accrued thereon was settled in full.
19. Employee Benefits
Recognition and measurement: Employee benefits
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within twelve months of the
reporting date represent obligations resulting from employee’s services provided to reporting date and are calculated at
undiscounted amounts based on remuneration wage and salary rates that the Company expects to pay as at the reporting date,
including related on-costs, such as workers’ compensation insurance and payroll tax.
A liability is recognised for the amount expected to be paid under short-term incentive bonus plans if the Group has a present legal
or constructive obligation to pay this amount resulting from past service provided by the employee, and the obligation can be
estimated reliably.
Provision for annual leave
Provision for bonuses
Provision for salary and related costs payable
Provision for other employment benefits
70
31 December
2020
A$’000
31 December
2019
A$’000
678
546
168
45
1,437
650
-
580
33
1,263
58
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
18. Loans payable
Shareholders’ loans payable
Opening balance of loans
Borrowings during the year
Repayment of borrowings
Offset against shares issued
Other changes
Net effect of movement in exchange rates
Total loans at end of the year
Shareholders’ loans
31 December
31 December
2020
A$’000
1,830
1,830
2019
A$’000
29,393
29,393
31 December
31 December
2020
A$’000
2019
A$’000
29,393
-
-
(27,914)
280
71
1,830
1,516
46,141
(20,445)
-
722
1,459
29,393
On 18 December 2019, the Group launched an entitlement offer. Both Dr Bruce Gray and BV Holding Limited agreed to take
part in this entitlement offer, and in accordance with the terms of their respective loan agreements, elected to set-off outstanding
principal and interest amounts against their obligations to pay for the shares received by fully taking up their Entitlements. On 2
January 2020, following the issue of shares to BV Mining Holdings Limited, the loan payable to BV Mining Holdings Limited in
the amount of A$14.776 million was settled in full. On 2 January 2020, A$13.138 million out of A$14.641 million loan payable
to Dr Bruce Gray was settled, following the issuance of shares to Dr. Gray. On 4 February 2021, the balance of the outstanding
loan payable and interest accrued thereon was settled in full.
19. Employee Benefits
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within twelve months of the
Recognition and measurement: Employee benefits
reporting date represent obligations resulting from employee’s services provided to reporting date and are calculated at
undiscounted amounts based on remuneration wage and salary rates that the Company expects to pay as at the reporting date,
including related on-costs, such as workers’ compensation insurance and payroll tax.
A liability is recognised for the amount expected to be paid under short-term incentive bonus plans if the Group has a present legal
or constructive obligation to pay this amount resulting from past service provided by the employee, and the obligation can be
estimated reliably.
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
20. Lease Liability
Maturity analysis:
Payable not later than one year
Payable later than one year, not later than five years
Payable later than five years
Less: future interest
Total lease liabilities
Current
Non-current
Movement in lease liabilities are as follows:
Opening balance of lease liability
New lease agreements entered during the year
Lease payments
Net effect of movement in exchange rates
Total lease liability recognised at end of year
31 December
2020
A$’000
31 December
2019
A$’000
3,601
6,396
2,762
12,759
(4,830)
7,929
2,407
5,522
7,929
7,332
11,128
3,662
22,122
(7,691)
14,431
5,197
9,234
14,431
31 December
2020
A$’000
31 December
2019
A$’000
14,431
319
(3,191)
(3,630)
7,929
4,749
16,210
(7,249)
721
14,431
The Group leases directly from vendors, Russian banking institutions and Russian financing companies various mining and port
equipment with a carrying amount of A$11.076 million (31 December 2019: A$19.844 million) under lease arrangements
expiring within one to four years.
During the year ended 31 December 2020, the Group executed a lease arrangement to finance the acquisition of a 100 –tonne
barge. The right of use asset and, the lease liability upon initial recognition was A$0.319 million. During, the year ended 31
December 2019, the Group executed a number of lease arrangements with equipment vendors, Russian banking institutions and
Russian financing companies for the acquisition of various mining and port equipment. The additions to the property, plant &
equipment under these arrangements were RUB 730.248 million (A$16.210 million).
For the year ended 31 December 2020 the depreciation charge on the leased equipment amounted to A$5.010 million (2019:
A$3.735 million).
As part of its liquidity management strategy, the Group restructured two of its lease arrangements by extending the lease term
from four to five years and three of its lease arrangements by changing the lease payment schedule. As part of the restructuring
procedure, equipment with carrying value of A$1.036 million was pledged.
In 2019 the Group recognised right of use of assets and a related lease liability in respect of the agreement with Rosmorport
expiring in 2067 (included in other lease liabilities in the table below).
Provision for annual leave
Provision for bonuses
Provision for salary and related costs payable
Provision for other employment benefits
31 December
31 December
2020
A$’000
2019
A$’000
The key terms of the lease arrangements are as follows:
678
546
168
45
1,437
650
-
580
33
1,263
58
Vendor lease liabilities
Banking institution lease liabilities
Russian Financing Company lease liabilities
Other lease liabilities
Currency
RUB
RUB
RUB
RUB
Effective
interest rate
Year of
maturity
11.79-22.63%
2021-2023
12.23-15.55%
19.36-30.30%
15.2%
2024
2024
2067
59
71
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
20. Lease Liability (continued)
Recognition and measurement: Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-
use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-
term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. The lease liability is
initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by
using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate
The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is
subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease payments made
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or
before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease. The right-of-use assets are presented within property, plant and equipment line
in the consolidated statement of financial position.
21. Royalty Liability
Opening balance of royalty liability
Royalty expense
Payments made during the year
Effect of movement in exchange rates
Closing balance of royalty liability
Current
Non-current
31 December
2020
A$’000
31 December
2019
A$’000
13,986
5,690
(330)
(1,283)
18,063
922
17,141
18,063
8,240
6,304
(618)
60
13,986
690
13,296
13,986
The Group entered into a number of royalty agreements as part of obtaining interests in the Amaam North and Amaam projects.
These royalty agreements are dependent upon the performance of a number of conditions precedent, the realisation of which may
result in royalty payments of between 1.5 and 3% of the coal sales revenue by the Amaam North and Amaam projects,
respectively. Total royalty payments in relation to the Amaam North Project is capped to US$25 million.
Amaam North Royalty Liability
Following the raising of funds and commencement of coal production on Project F, Amaam North, the Group concluded it is
probable that an outflow of resources embodying economic benefits will be required to settle royalty obligations and accordingly
a provision was required for the obligations under existing royalty agreements.
72
60
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
20. Lease Liability (continued)
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
21. Royalty Liability (continued)
Recognition and measurement: Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-
use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-
term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. The lease liability is
initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by
using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate
The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is
subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease payments made
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or
before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease. The right-of-use assets are presented within property, plant and equipment line
in the consolidated statement of financial position.
21. Royalty Liability
Opening balance of royalty liability
Royalty expense
Payments made during the year
Effect of movement in exchange rates
Closing balance of royalty liability
Current
Non-current
31 December
31 December
2020
A$’000
2019
A$’000
13,986
5,690
(330)
(1,283)
18,063
922
17,141
18,063
8,240
6,304
(618)
60
13,986
690
13,296
13,986
The Group entered into a number of royalty agreements as part of obtaining interests in the Amaam North and Amaam projects.
These royalty agreements are dependent upon the performance of a number of conditions precedent, the realisation of which may
result in royalty payments of between 1.5 and 3% of the coal sales revenue by the Amaam North and Amaam projects,
respectively. Total royalty payments in relation to the Amaam North Project is capped to US$25 million.
Amaam North Royalty Liability
Following the raising of funds and commencement of coal production on Project F, Amaam North, the Group concluded it is
probable that an outflow of resources embodying economic benefits will be required to settle royalty obligations and accordingly
a provision was required for the obligations under existing royalty agreements.
While the amount of provision recognised represents the best estimate of the expenditure required to settle the obligations under
existing royalty agreements, this estimate is based on estimates of possible outcomes and financial effect, which were determined
by the application of management’s judgement on a number of key assumptions used in determining the amount of provision,
including:
•
the discount rate used;
•
•
•
the probability of revenue cash flows;
timing of coal sales and
the likelihood of achieving forecast coal sales prices.
Amaam Royalty Liability
No liability was recognised at 31 December 2020 (31 December 2019: Nil) in relation to Amaam Project royalty arrangements as
the development of the Amaam Project is not expected in the foreseeable future.
Recognition and measurement: Royalty liabilities
The Group, from time to time, enters into legal agreements with various parties as a result of which there will be future
outflows of economic benefits, including obligations which arise from the execution and realisation of sales agreements
(“Royalty Agreement”).
In applying the recognition and measurement criteria outlined above in respect of provisions in Note 3(h) to royalty
agreements, management perform an assessment of the probability of the outflow of economic benefits, which it has deemed to
be influenced by the following factors and circumstances, when assessing the disclosure, recognition and measurement of
Royalty Agreement obligations:
•
•
•
•
•
•
Existence of a licence which provides the legal capacity to mine and sell product which is the subject of Royalty
Agreements;
The performance of a feasibility study or other similar project assessment which provides an indication of the
economic benefits accruing to the Group from implementing a project or part thereof, incorporating the consideration
of macroeconomic factors and project specific assumptions on income and expenditures;
General macroeconomic conditions (including but not limited to financial and commodity markets -specifically the
market for coal);
Economic resources are in place which enable the realisation of a plan to extract and sell ore, as defined in a
feasibility study (as amended and updated). Economic resources include both financial, human & other resources
necessary to realise strategic plans;
Board approval to commence those activities necessary to develop and mine ore with the view of commencing
commercial production; and
Actual operations confirm those assumptions upon which the decision made to commence mining operations were
made (including the ability to realise any sales agreements executed).
As noted above, where the likelihood of an outflow of economic benefits is deemed to be remote, no disclosures are made.
Where possible, disclosure is made of a contingent liability and where probable a provision is recognised and measured.
60
61
73
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
22. Other financial liabilities
Current other financial liabilities
Non – current other financial liabilities
Movement other financial liabilities are as follows
Opening balance of other financial liabilities
New other financial liabilities during the year
Payments
Net effect of movement in exchange rates
Total other financial liabilities recognised at end of year
31 December
2020
A$’000
605
1,612
2,217
31 December
2019
A$’000
779
2,889
3,668
31 December
2020
A$’000
31 December
2019
A$’000
3,668
-
(679)
(772)
2,217
-
4,373
(480)
(225)
3,668
In 2019, the Group entered into a sale and lease-back agreement with Universal Leasing Company for its two 500 tonne barges.
As the Group has a substantive repurchase option with respect to the underlying asset under these agreements, the Group
concluded these transactions represent, in substance, a financing arrangement. Accordingly, all amounts received from Universal
Leasing Company were included in other financial liabilities.
The key terms of the arrangement are as follows:
Universal Leasing Company
RUB
18.11%
2024
Currency
Effective
interest rate
Year of
maturity
Recognition and measurement: Sale and leaseback transactions
The Group, from time to time, enters into legal agreements with various parties whereby it transfers an asset to another entity
(the buyer-lessor) and leases that asset back.
The Group applies the requirements for determining when a performance obligation is satisfied in AASB 15 “Revenue from
Contracts with Customers” to determine whether the transfer of an asset is accounted for as a sale of that asset.
If the transfer of an asset by the Group satisfies the requirements of AASB 15 to be accounted for as a sale of the asset, then the
Group measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset
that relates to the right of use retained by the seller-lessee. The Group recognises the amount of any gain or loss that relates to
the rights transferred to the buyer-lessor.
If the transfer of an asset by the Group does not satisfy the requirements of AASB 15 to be accounted for as a sale of the asset,
the Group continues to recognise the transferred asset and recognises a financial liability equal to the transfer proceeds.
74
62
Annual Report 2020Tigers Realm Coal
31 December
31 December
2020
A$’000
605
1,612
2,217
2019
A$’000
779
2,889
3,668
31 December
31 December
2020
A$’000
2019
A$’000
3,668
-
(679)
(772)
2,217
-
4,373
(480)
(225)
3,668
Opening balance of other financial liabilities
New other financial liabilities during the year
Payments
Net effect of movement in exchange rates
Total other financial liabilities recognised at end of year
In 2019, the Group entered into a sale and lease-back agreement with Universal Leasing Company for its two 500 tonne barges.
As the Group has a substantive repurchase option with respect to the underlying asset under these agreements, the Group
concluded these transactions represent, in substance, a financing arrangement. Accordingly, all amounts received from Universal
Leasing Company were included in other financial liabilities.
The key terms of the arrangement are as follows:
Universal Leasing Company
RUB
18.11%
2024
The Group, from time to time, enters into legal agreements with various parties whereby it transfers an asset to another entity
Recognition and measurement: Sale and leaseback transactions
(the buyer-lessor) and leases that asset back.
The Group applies the requirements for determining when a performance obligation is satisfied in AASB 15 “Revenue from
Contracts with Customers” to determine whether the transfer of an asset is accounted for as a sale of that asset.
If the transfer of an asset by the Group satisfies the requirements of AASB 15 to be accounted for as a sale of the asset, then the
Group measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset
that relates to the right of use retained by the seller-lessee. The Group recognises the amount of any gain or loss that relates to
the rights transferred to the buyer-lessor.
If the transfer of an asset by the Group does not satisfy the requirements of AASB 15 to be accounted for as a sale of the asset,
the Group continues to recognise the transferred asset and recognises a financial liability equal to the transfer proceeds.
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
22. Other financial liabilities
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
23.
Share capital
Current other financial liabilities
Non – current other financial liabilities
Share Capital
Costs of raising equity
Movement other financial liabilities are as follows
(i) Movements in shares on issue:
Opening balance at 1 January 2019
Movements in 2019
Opening balance at 1 January 2020
Movements in 2020
Issue of ordinary shares – Entitlement Offer 2019
Issue of ordinary shares – Entitlement Offer 2020
Closing balance at 31 December 2020
31 December
2020
A$’000
263,577
(16,983)
246,594
31 December
2019
A$’000
188,197
(15,089)
173,108
No of shares
Issue price
A$
A$’000
1,791,669,870
-
1,791,669,870
-
5,822,927,078
2,143,895,694
9,758,492,642
0.01
0.008
188,197
-
188,197
58,229
17,151
263,577
Currency
Effective
interest rate
Year of
maturity
(ii) Movements in options on issue
The Company does not have authorised capital or par value in respect of its issued shares. All issued shares 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.
During the year ended 31 December 2020, there were no options issued, 6,976,000 options lapsed and 11,463,000 forfeited,
bringing options issued over ordinary shares in the Company to 9,907,000 at 31 December 2020 (For the year ended 31
December 2019: no options issued and 3,594,000 options lapsed and 1,729,000 options forfeited, thus bringing the options issued
over ordinary shares in the Company to 28,346,000).
(iii) Entitlement offer
On 16 December 2020, the Group launched a fully underwritten 1 for 1.4 pro-rata accelerated renounceable entitlement offer at a
price of A$0.008 per share to raise up to A$43.512 million. The institutional entitlement offer closed on 17 December 2020
raising gross proceeds of A$17.151 million with the Company’s largest shareholder Dr. Bruce Gray taking up his full
entitlement. The retail component of the offer opened on 21 December 2020 and was completed on 4 January 2021. The retail
offer raised A$3.684 million. On 11 January 2021 the arising Shortfall Bookbuild was completed. The Bookbuild process was
managed and fully underwritten by CLSA Australia Pty Ltd and sub-underwritten by Dr. Bruce Gray. Pursuant to his sub-
underwriting agreement, 2.7 billion shares were issued to Dr. Gray, increasing his overall shareholding in the Company to
59.95%. In total the Group raised A$43.512 million.
On 18 December 2019, the Group launched a 13 to 4 accelerated renounceable entitlement offer of ordinary shares at A$0.01 per
share. The Group raised A$58.229 million and utilized proceeds to settle existing shareholders’ loan and to finance planned
capital expenditures and working capital. The entitlement offer closed on 5 February 2020, as a result of which the Group raised
A$45.191 million. Entitlements not taken up by close of the entitlement offer were offered for sale in a Shortfall Bookbuild and
the Group received a bid for the majority of the Shortfall Bookbuild from Hanate Pty Ltd, an entity associated with the Group’s
director and substantial shareholder, Dr Bruce Gray. On 5 June 2020, a Shortfall Bookbuild of 1.3 billion shares at A$0.01 per
share (A$13.038 million) was approved by TIG shareholders at the Annual General Meeting and on 24 June 2020 new shares
were issued.
62
63
75
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
24.
(a)
Share based payments
Recognised share-based payment expense
31 December
2020
A$’000
31 December
2019
A$’000
Expense arising from equity settled share-based payment transactions
52
248
(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 are 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.
(b)
Description of share-based payment arrangements
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 for no consideration and 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.
The fair value of these options is assessed at the 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 2020 have an exercise price in the range of A$0.08 to A$0.013 (2019: A$0.08 to
A$0.50). The weighted average remaining contractual life for options outstanding at 31 December 2020 is 1.8 years (31
December 2019: 2.2 years). There were no options granted during the year ended 31 December 2020 (year ended 31 December
2019: Nil). There are 9,907,000 vested and exercisable options at 31 December 2020 (31 December 2019: 14,242,000). There
were no options exercised during the years ended 31 December 2020 and 31 December 2019.
Movements in outstanding options
2020
2019
Balance at the beginning of the year
Granted
Forfeited/lapsed
Exercised
Balance at the end of the year
Vested and exercisable at year end
Number of
Options
28,346,000
-
(18,439,000)
-
9,907,000
9,907,000
Weighted
Average
Exercise Price
A$
Number of
Options
Weighted
Average
Exercise Price
A$
0.158
-
0.182
-
0.113
0.113
33,669,000
-
(5,323,000)
-
28,346,000
14,242,000
0.256
-
0.286
-
0.158
0.093
76
64
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
24.
Share based payments (continued)
(c)
Summary of options granted under the Option Plan
Details of share options outstanding at 31 December 2020 are detailed below:
has regard to the Company’s long-term performance and growth. There are a number of different performance hurdles, exercise
Balance at the end of the year
Date of issue
17 April 2015
17 April 2015
11 June 2015
11 June 2015
18 October 2017
18 October 2017
Number
of Options
-
-
-
-
3,368,000
6,539,000
9,907,000
2020
Average
Exercise Price
A$
-
-
-
-
0.080
0.130
0.105
2019
Number of
Options
Average
Exercise Price
1,488,000
1,488,000
2,000,000
2,000,000
7,266,000
14,104,000
28,346,000
A$
0.230
0.170
0.500
0.230
0.080
0.130
0.223
During the year to 31 December 2020, no options were issued, 6,976,000 options lapsed and 11,463,000 forfeited and no options
exercised, bringing the options issued over ordinary shares in the Company to 9,907,000 as at 31 December 2020.
(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.
The inputs used in the measurement of the fair values at the grant date of the options granted under the Staff Option Plan and
outstanding at 31 December 2020 are outlined below:
Option Grant
Date
Fair value
at grant
date (A$)
Share price
at grant
date (A$)
Exercise
price
Perfor-
mance
hurdle
Perfor-
mance
period
Expiry date
Risk free
interest rate
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
24.
(a)
Share based payments
Recognised share-based payment expense
31 December
31 December
2020
A$’000
52
2019
A$’000
248
Expense arising from equity settled share-based payment transactions
(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
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.
(b)
Description of share-based payment arrangements
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 for no consideration and 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.
The fair value of these options is assessed at the 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 2020 have an exercise price in the range of A$0.08 to A$0.013 (2019: A$0.08 to
A$0.50). The weighted average remaining contractual life for options outstanding at 31 December 2020 is 1.8 years (31
December 2019: 2.2 years). There were no options granted during the year ended 31 December 2020 (year ended 31 December
2019: Nil). There are 9,907,000 vested and exercisable options at 31 December 2020 (31 December 2019: 14,242,000). There
were no options exercised during the years ended 31 December 2020 and 31 December 2019.
Movements in outstanding options
2020
2019
Balance at the beginning of the year
28,346,000
0.158
33,669,000
0.256
Granted
Forfeited/lapsed
Exercised
Number of
Weighted
Average
Number of
Weighted
Average
Options
Exercise Price
Options
Exercise Price
A$
-
-
-
-
A$
-
-
-
-
(18,439,000)
0.182
(5,323,000)
0.286
Balance at the end of the year
Vested and exercisable at year end
9,907,000
9,907,000
0.113
0.113
28,346,000
14,242,000
0.158
0.093
Performance hurdle: options vest 12 months after grant date.
Performance hurdle: options vest 24 months after grant date.
Performance period: 12 months after grant date.
Performance period: 24 months after grant date
$0.031
$0.030
$0.060
$0.060
$0.080
$0.130
A
B
C
D
18 Jun 2022
18 Jun 2022
2.32%
2.32%
18 Oct 2017
18 Oct 2017
A.
B.
C.
D.
Equity-based compensation is recognised as an expense in respect of the services received.
Recognition and measurement: Share based payments
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 the grant date and recognised over the period during which the employees became unconditionally
entitled to the options. The fair value at the 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.
64
65
77
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
25. Risk management and financial instruments
(a)
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 (ARCC), which is responsible for overseeing the development
and monitoring the Group’s risk management policies by the Company. A Risk Committee consisting of senior management and
staff report regularly to the ARCC. Significant risks which cannot be appropriately and adequately mitigated are reported and
reviewed by the Board of Directors.
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.
(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.
78
66
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
25. Risk management and financial instruments (continued)
(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 historically has been to raise sufficient funds through equity to fund its exploration and evaluation activities and expansion.
In 2020 the Group conducted two entitlement offers detailed further in Note 23.
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.
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.
(c)
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
Leases liabilities
Loans payable
Other financial liabilities
31 December
2020
A$’000
31 December
2019
A$’000
18,879
9,844
28,723
3,994
7,929
1,830
2,217
15,970
4,716
10,196
14,912
14,110
29,393
14,431
3,668
61,602
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
25. Risk management and financial instruments
(a)
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 (ARCC), which is responsible for overseeing the development
and monitoring the Group’s risk management policies by the Company. A Risk Committee consisting of senior management and
staff report regularly to the ARCC. Significant risks which cannot be appropriately and adequately mitigated are reported and
reviewed by the Board of Directors.
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:
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
•
•
•
•
Credit risk
Liquidity risk
Market risk
Operational risk
consolidated financial statements.
(i)
Credit risk
(ii)
Liquidity risk
to the Group’s reputation.
(iii) Market risk
Liability.
(iv) Operational 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.
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
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
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.
66
67
79
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
25. Risk management and financial instruments (continued)
(d)
Accounting classifications and fair values
The following table shows the carrying amounts of financial assets and liabilities.
31 December 2020
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
Loans payable
Lease liabilities
Other financial liabilities
31 December 2019
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
Loans payable
Lease liabilities
Other financial liabilities
Loans &
Receivables
Carrying amount
Other financial
liabilities
A$’000
Total
18,879
9,844
28,723
-
-
-
-
-
-
-
-
3,994
1,830
7,929
2,217
15,970
18,879
9,844
28,723
3,994
1,830
7,929
2,217
15,970
Loans &
Receivables
Carrying amount
Other financial
liabilities
A$’000
Total
4,716
10,196
14,912
-
-
-
-
-
-
-
-
14,110
29,393
14,431
3,668
61,602
4,716
10,196
14,912
14,110
29,393
14,431
3,668
61,602
(e)
Credit risk
Exposure to credit risk
Management monitors the exposure to credit risk on an ongoing basis. The maximum exposure to credit risk on financial assets is
the carrying amount of the respective recognised financial assets as stated in the consolidated statement of financial position. For
trade and other receivables, the Group does not have significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are related
entities.
The Group has treasury policies in place for deposit transactions to be conducted with financial institutions with high credit-
ratings assigned by international credit-rating agencies. At the reporting date, cash is held with reputable financial institutions
which all meet the Group’s minimum credit rating required by the approved treasury policy.
Cash and cash equivalents
Trade and other receivables
80
Carrying amount
2020
A$’000
18,879
9,844
28,723
2019
A$’000
4,716
10,196
14,912
68
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
25. Risk management and financial instruments (continued)
(d)
Accounting classifications and fair values
The following table shows the carrying amounts of financial assets and liabilities.
31 December 2020
Financial assets not measured at fair value
Cash and cash equivalents
Trade and other receivables
Financial liabilities not measured at fair value
Trade and other payables
Loans payable
Lease liabilities
Other financial liabilities
31 December 2019
Financial assets not measured at fair value
Cash and cash equivalents
Trade and other receivables
Financial liabilities not measured at fair value
Trade and other payables
Loans payable
Lease liabilities
Other financial liabilities
Carrying amount
Loans &
Other financial
Receivables
Total
liabilities
A$’000
Carrying amount
Loans &
Other financial
Receivables
Total
liabilities
A$’000
18,879
9,844
28,723
4,716
10,196
14,912
-
-
-
-
-
-
-
-
-
-
3,994
1,830
7,929
2,217
15,970
-
-
-
-
-
-
14,110
29,393
14,431
3,668
61,602
18,879
9,844
28,723
3,994
1,830
7,929
2,217
15,970
4,716
10,196
14,912
14,110
29,393
14,431
3,668
61,602
(e)
Credit risk
Exposure to credit risk
Management monitors the exposure to credit risk on an ongoing basis. The maximum exposure to credit risk on financial assets is
the carrying amount of the respective recognised financial assets as stated in the consolidated statement of financial position. For
trade and other receivables, the Group does not have significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are related
entities.
The Group has treasury policies in place for deposit transactions to be conducted with financial institutions with high credit-
ratings assigned by international credit-rating agencies. At the reporting date, cash is held with reputable financial institutions
which all meet the Group’s minimum credit rating required by the approved treasury policy.
Cash and cash equivalents
Trade and other receivables
Carrying amount
2020
A$’000
18,879
9,844
28,723
2019
A$’000
4,716
10,196
14,912
68
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
25. Risk management and financial instruments (continued)
Geographical information
The Group’s maximum exposure to credit risk for Trade and other receivables at the reporting date by geographical region was:
Asia and the Russian Federation
Australia
Carrying amount
2020
A$’000
9,844
-
9,844
2019
A$’000
10,196
-
10,196
Counterparty information
The Group’s maximum exposure to credit risk for Trade and other receivables at the reporting date by type of counterparty was:
Coal customers
Other
2020
A$’000
5,888
3,956
9,844
2019
A$’000
3,311
6,885
10,196
Impairment losses
The ageing of the Group’s Trade and other receivables at the reporting date was:
Not past due
Past due 0-30 days
Past due 31-120 days
Past due 121 days to one year
More than one year
Gross
2020
A$’000
Impaired
2020
A$’000
Gross
2019
A$’000
Impaired
2019
A$’000
9,844
-
-
-
-
9,844
-
-
-
-
-
-
10,196
-
-
-
-
10,196
-
-
-
-
-
-
There was no provision for expected credit losses at 31 December 2020 (At 31 December 2019: A$Nil).
69
81
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
25. Risk management and financial instruments (continued)
(f)
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 2020
Non-derivative financial
liabilities
Trade and other payables
Loans payable
Lease liabilities
Other financial liabilities
31 December 2019
Non-derivative financial
liabilities
Trade and other payables
Loans payable
Lease liabilities
Other financial liabilities
Contractual cashflows
Carrying
amount
A$’000
Total
A$’000
6 months
or less
A$’000
6-12
months
A$’000
1-2 years
A$’000
2-5 years
A$’000
3,994
1,830
7,929
2,217
15,970
14,110
29,393
14,431
3,668
61,602
3,994
1,864
12,760
3,011
21,629
14,110
29,393
22,122
5,365
70,990
3,879
1,864
1,229
193
7,165
13,976
29,393
2,393
276
46,038
-
-
2,372
781
3,153
-
-
4,940
1,140
6,080
-
-
3,425
894
4,319
-
-
5,334
1,277
6,611
115
-
2,971
1,143
4,229
134
-
5,794
2,672
8,600
More
than 5
years
A$’000
-
-
2,763
-
2,763
-
-
3,662
-
3,662
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly
different amounts.
(g) Market risk
(i) Currency risk
Exposure to currency risk
Management monitors the exposure to currency risk on an ongoing basis. The Group operates internationally and is exposed to
foreign exchange risk arising from various currencies, primarily with respect to the US Dollar (“USD”) and the Russian Rouble
(”RUB”).
The Group’s exposure to foreign currency risk was as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Loans payable
Lease liabilities
Other financial liabilities
Net exposure
USD
2020
A$’000
RUB
2020
A$’000
USD
2019
A$’000
RUB
2019
A$’000
8,376
3,966
(721)
(1,830)
-
-
9,791
1,466
5,878
(3,273)
-
(7,929)
(2,217)
(6,075)
2,927
1,791
(4,010)
(29,393)
-
-
(28,685)
1,363
8,405
(10,100)
-
(14,431)
(3,668)
(18,431)
82
70
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
(f)
Liquidity risk
Exposure to liquidity risk
Management monitors the exposure to liquidity risk on an on-going basis. Prudent liquidity risk management implies maintaining
sufficient cash reserves to meet the on-going operational requirements of the business. It is the Group’s policy to maintain
sufficient funds in cash and cash equivalents. Furthermore, the Group monitors its cash requirements and raises appropriate
funding as and when required to meet such planned expenditure.
The following are the contractual maturities of financial liabilities.
31 December 2020
Non-derivative financial
liabilities
Trade and other payables
Loans payable
Lease liabilities
Other financial liabilities
31 December 2019
Non-derivative financial
liabilities
Trade and other payables
Loans payable
Lease liabilities
Other financial liabilities
Contractual cashflows
Carrying
amount
A$’000
Total
A$’000
6 months
or less
A$’000
6-12
months
A$’000
1-2 years
2-5 years
A$’000
A$’000
3,994
1,830
7,929
2,217
15,970
14,110
29,393
14,431
3,668
61,602
3,994
1,864
12,760
3,011
21,629
14,110
29,393
22,122
5,365
70,990
3,879
1,864
1,229
193
7,165
13,976
29,393
2,393
276
46,038
-
-
2,372
781
3,153
-
-
4,940
1,140
6,080
-
-
3,425
894
4,319
-
-
5,334
1,277
6,611
115
-
2,971
1,143
4,229
134
-
5,794
2,672
8,600
More
than 5
years
A$’000
-
-
-
-
-
-
2,763
2,763
3,662
3,662
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly
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:
different amounts.
(g) Market risk
(i) Currency risk
Exposure to currency risk
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Loans payable
Lease liabilities
Other financial liabilities
Net exposure
25. Risk management and financial instruments (continued)
25. Risk management and financial instruments (continued)
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
(g) Market risk
(i) Currency risk
Exchange rates used
The following significant exchange rates were applied during the year relative to one Australian dollar:
Average rate
2020
1.4483
0.0200
2019
1.4384
0.0222
Reporting date
spot rate
2020
1.2984
0.0177
2019
1.4273
0.0225
USD
RUB
Sensitivity analysis
A weakening of the AUD, as indicated, against the USD and RUB at 31 December 2020 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
A$’000
Profit or
loss
A$’000
Equity
A$’000
Profit or
loss
A$’000
1,088
(675)
2,608
1,676
1,088
(675)
2,608
1,676
(890)
552
(3,187)
(2,048)
(890)
552
(3,187)
(2,048)
31 December 2020
USD (10% movement)
RUB (10% movement)
31 December 2019
USD (10% movement)
RUB (10% movement)
(i) Commodity price risk
Commodity price risk in the Group primarily arises from price fluctuations of coal. Management monitors the exposure to
commodity price risk on an on-going basis.
(ii) 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:
USD
2020
A$’000
RUB
2020
A$’000
USD
2019
A$’000
RUB
2019
A$’000
8,376
3,966
(721)
(1,830)
-
-
9,791
1,466
5,878
(3,273)
-
(7,929)
(2,217)
(6,075)
2,927
1,791
(4,010)
(29,393)
-
-
(28,685)
1,363
8,405
(10,100)
-
(14,431)
(3,668)
(18,431)
Fixed rate instrument
Financial assets
Financial liabilities
Variable rate instruments
Cash and cash equivalents
Financial liabilities
Carrying amount
2020
A$’000
-
(11,976)
(11,976)
18,879
-
18,879
2019
A$’000
-
(47,492)
(47,492)
4,716
-
4,716
70
71
83
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
25. Risk management and financial instruments (continued)
(iii)
Interest rate risk (continued)
Interest rates used
The following significant interest rates have been applied.
2020
Australian cash deposit rate
2019
Australian cash deposit rate
Sensitivity analysis
Average
rate
%
Reporting date
spot rate
%
0.32
0.32
1.50
1.50
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 2020
Australian cash deposit rate (100 basis points increase)
31 December 2019
Australian cash deposit rate (100 basis points increase)
26. Expenditure commitments
Exploration expenditure commitments
Group
Equity
A$’000
Profit or loss
A$’000
0
6
0
6
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration
work to meet its licence obligations. In the Russian Federation, this minimum exploration work is defined by the performance of
a minimum number of drilling metres 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. As of and
for the year ended 31 December 2020, the Group is in compliance with those exploration obligations defined in the respective
licences.
Other commitments
Other commitments of A$9.050 million are primarily comprised of A$1,898 million commitments to Chukotsnab and A$5.123
million commitments to DPCI for the supply of diesel and CHPP equipment, respectively (At 31 December 2019: A$5.054
million comprised primarily of A$2.059 million in commitments to Liaoyo Group Co Ltd for the construction of two 500 tonne
barges).
84
72
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
25. Risk management and financial instruments (continued)
(iii)
Interest rate risk (continued)
Interest rates used
The following significant interest rates have been applied.
2020
2019
Australian cash deposit rate
Australian cash deposit rate
Sensitivity analysis
31 December 2020
Australian cash deposit rate (100 basis points increase)
31 December 2019
Australian cash deposit rate (100 basis points increase)
26. Expenditure commitments
Exploration expenditure commitments
Average
Reporting date
rate
%
spot rate
%
0.32
0.32
1.50
1.50
Group
Equity
A$’000
Profit or loss
A$’000
0
6
0
6
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.
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum exploration
work to meet its licence obligations. In the Russian Federation, this minimum exploration work is defined by the performance of
a minimum number of drilling metres 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. As of and
for the year ended 31 December 2020, the Group is in compliance with those exploration obligations defined in the respective
licences.
Other commitments
barges).
Other commitments of A$9.050 million are primarily comprised of A$1,898 million commitments to Chukotsnab and A$5.123
million commitments to DPCI for the supply of diesel and CHPP equipment, respectively (At 31 December 2019: A$5.054
million comprised primarily of A$2.059 million in commitments to Liaoyo Group Co Ltd for the construction of two 500 tonne
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
27. Contingencies
Deed of cross guarantee
Under the terms of the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the Company has entered into an
approved deed of cross guarantee of liabilities with the subsidiary identified in Note 32.
Tax contingencies in the Russian Federation
Russian tax legislation is subject to varying interpretations and changes, which can occur frequently. Management’s
interpretation of such legislation as applied to the transactions and activities of the Group may be challenged by the relevant
regional and federal authorities. Management believes that the Group has adequately provided for tax liabilities based on its
interpretation of the applicable tax legislation. However, the relevant authorities may have differing interpretations, and the effect
on the financial report could be significant if such interpretations are realised.
28. Related parties’ disclosure
(a)
Identity of related parties
Balances and transactions between the company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. The remuneration of key management personnel is disclosed in Note 29.
As disclosed in Note 18, On 18 December 2019 the Group launched an entitlement Offer. Both Dr Bruce Gray and BV Holding
Limited agreed to take part in this entitlement Offer, and in accordance with the terms of their respective loan agreements,
elected to set-off outstanding principal and interest amounts against their obligations to pay for the shares received by fully taking
up their Entitlements. On 2 January 2020, following the issue of shares to BV Mining Holdings Limited, the loan payable to BV
Mining Holdings Limited in the amount of A$14.776 million was settled in full. On 2 January 2020 A$13.138 million out of
A$14.641 million loan payable to Dr Bruce Gray was settled, following the issuance of shares to Dr. Gray. On 4 February 2021
outstanding loan payable and interest accrued thereon was settled in full.
There were no transactions with other related parties during the years ended 31 December 2020 and 2019.
It is the Group’s policy that where transactions are undertaken with related parties, they are done so on an arm’s length basis.
29. Key Management Personnel Disclosures
(a)
Compensation of key management personnel
The key management personnel compensation included in “Administration expenses” (see Note 8) and “Share-based payments”
(see Note 24) is as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments
2020
A$
1,957,105
12,697
19,598
1,989,400
2019
A$
1,635,466
12,639
86,156
1,734,261
(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.
72
73
85
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
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.
Balance at
1 January
Acquisitions
Sales
Other
Changes
Balance at
31 December
2020
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
D Swan
S Southwood
D Forsyth
D Gavrilin
D Bender
Other key management personnel
1,200,000
3,900,000
404,246,361
4,741,103,304
30,412,029
30,000,000
-
-
-
-
-
-
-
-
19,267,673
-
-
2,600,000
7,246,377
-
29. Key Management Personnel Disclosures (continued)
(c)
Movements in shares
Balance at
1 January
Acquisitions
Sales
2019
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
1,200,000
403,631,641
30,412,029
-
-
Other key management personnel
S Southwood
D Forsyth
D Gavrilin
D Bender
136,700
19,267,673
-
-
-
614,720
-
-
-
-
-
-
-
(136 700)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,100,000
5,145,349,665
60,412,029
-
-
-
-
21,867,673
7,246,377
-
Balance at
31 December
1,200,000
404,246,361
30,412,029
-
-
-
19,267,673
-
-
Other
Changes
86
74
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
management personnel and their related entities are set out below.
Other key management personnel
29. Key Management Personnel Disclosures (continued)
(c)
Movements in shares
Balance at
1 January
Acquisitions
Sales
Other
Changes
Balance at
31 December
1,200,000
3,900,000
404,246,361
4,741,103,304
30,412,029
30,000,000
5,100,000
5,145,349,665
60,412,029
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,200,000
404,246,361
30,412,029
19,267,673
Balance at
1 January
Acquisitions
Sales
Other
Changes
Balance at
31 December
614,720
1,200,000
403,631,641
30,412,029
136,700
19,267,673
Other key management personnel
(136 700)
2020
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
D Swan
S Southwood
D Forsyth
D Gavrilin
D Bender
2019
Directors
C Wiggill
B Gray
O Hegarty
R Morgan
T Sitdekov
S Southwood
D Forsyth
D Gavrilin
D Bender
The movement in the number of Tigers Realm Coal Limited shares held directly, indirectly, or beneficially by the key
30. Group entities
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
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
Eastshore Coal Holding Limited
Telofina Holdings Ltd
Rosmiro Investments Limited
Anadyrsky Investments Limited
Northern Pacific Coal Company
Beringpromugol LLC
Port Ugolny LLC
Bering Ugol Investments LLC
Country of
Incorporation
Ownership Interest
2019
2020
Australia
Australia
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Cyprus
Russia
Russia
Russia
Russia
100%
100%
100%
80%
100%
100%
100%
80%
100%
100%
100%
100%
100%
100%
80%
100%
100%
100%
80%
100%
100%
100%
19,267,673
2,600,000
7,246,377
21,867,673
7,246,377
31. Parent entity disclosures
As at and throughout the financial year ended 31 December 2020, 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 loss
Financial position of parent entity
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
Net Assets
Total equity of the parent entity comprising
Share capital
Reserves
(Accumulated deficit)
Total equity
Contingent liabilities of the parent entity
31 December
2020
A$’000
31 December
2019
A$’000
(52)
(52)
17,037
87,377
104,414
-
-
104,414
246,594
7,353
(149,533)
104,414
(248)
(248)
3,353
28,214
31,567
-
-
31,567
173,747
7,301
(149,481)
31,567
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 32.
Capital commitments of the parent entity
As at 31 December 2020, capital commitments comprised of A$5.123 million commitments to DPCI for the CHPP equipment.
74
75
87
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
32. Deed of cross guarantee
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the wholly-owned subsidiary listed below is
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 the subsidiary 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 the subsidiary
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 subsidiary has 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 entity 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 2020 is set out below.
Statement of comprehensive income and retained earnings
Depreciation expense
Share based payments
Administrative expenses
Results from operating activities
Net foreign exchange (loss)/gain
Finance expense
Finance income
Net finance expense
Loss before income tax
Income tax expense
Net Loss
Other comprehensive income
Foreign currency translation differences for foreign operations
Income tax on other comprehensive income
Total comprehensive loss for the period
Accumulated deficit at beginning of year
Accumulated deficit at end of year
31 December
2020
A$’000
31 December
2019
A$’000
-
(52)
(718)
(770)
(5,664)
(280)
91
(5,853)
(6,623)
-
(6,623)
-
-
(6,623)
(185,705)
(192,328)
-
(248)
(1,060)
(1,308)
79
(441)
93
(269)
(1,577)
-
(1,577)
-
-
(1,577)
(184,128)
(185,705)
88
76
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
32. Deed of cross guarantee
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
32. Deed of cross guarantee (continued)
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the wholly-owned subsidiary listed below is
relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and directors’
reports.
It is a condition of a Class Order that the Company and the subsidiary enter into a Deed of Cross Guarantee. The effect of the
Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of the subsidiary
under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company
will only be liable in the event that after six months any creditor has not been paid in full. The subsidiary has also given similar
guarantees in the event that the Company is wound up.
The entities subject to the Deed of Cross Guarantee are:
•
•
Tigers Realm Coal Limited; and
TR Coal International Limited.
The Deed of Cross Guarantee was established on 22 November 2012.
A consolidated statement of comprehensive income and consolidated statement of financial position, comprising the Company
and controlled entity which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross
Guarantee for the year ended 31 December 2020 is set out below.
Statement of comprehensive income and retained earnings
31 December
31 December
2020
A$’000
2019
A$’000
-
(52)
(718)
(770)
(5,664)
(280)
91
(5,853)
(6,623)
(6,623)
-
-
-
-
(248)
(1,060)
(1,308)
79
(441)
93
(269)
(1,577)
(1,577)
-
-
-
Depreciation expense
Share based payments
Administrative expenses
Results from operating activities
Net foreign exchange (loss)/gain
Finance expense
Finance income
Net finance expense
Loss before income tax
Income tax expense
Net Loss
Other comprehensive income
Foreign currency translation differences for foreign operations
Income tax on other comprehensive income
Total comprehensive loss for the period
Accumulated deficit at beginning of year
Accumulated deficit at end of year
(6,623)
(185,705)
(192,328)
(1,577)
(184,128)
(185,705)
Current Assets
Cash and cash equivalents
VAT and other receivables
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Investments in subsidiaries
Total non-current assets
Total assets
Current Liabilities
Trade and other payables
Advances received
Loan payables
Employee provisions
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
(Accumulated deficit)
Total equity
31 December
2020
A$’000
31 December
2019
A$’000
17,037
335
42
17,414
4,481
81,783
86,264
103,678
815
-
1,830
46
2,691
2,691
100,987
246,594
46,721
(192,328)
630
150
42
822
1
67,180
67,181
68,003
677
3,186
29,393
33
33,289
33,289
34,714
173,108
47,311
(185,705)
100,987
34,714
76
77
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Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
33. Non-controlling interest
No change in the non-controlling interests in the Eastshore and the Amaam project occurred during the years ended 31 December
2020 and 2019.
34. Auditors’ Remuneration
Details of the amounts paid to the auditor, Deloitte, and related network firms for audit and non-audit services provided during
the year are set out below.
Audit services:
Audit and review of financial reports Deloitte Australia
Audit and review of financial reports Deloitte Overseas
Services other than statutory audit
Other services
Taxation compliance and advisory services Deloitte Australia
Taxation compliance services and advisory services Deloitte
Overseas
31 December
2020
A$
31 December
2019
A$
123,245
159,710
282,955
19,950
35,944
55,894
338,849
138,004
143,713
281,717
-
-
-
281,717
35. Events after the reporting period
The entitlement offer launched on 16 December 2020 (Refer to Note 18 for further details) closed on 14 January 2021. The Institutional
entitlement offer closed on 17 December 2020 raising gross proceeds of approximately A$17.121million with the Company’s largest
shareholder Dr. Bruce Gray taking up his full entitlement. The retail component of the offer was completed on 4 January 2021 with very
good support from a number of shareholders, including Mr. Paul Little, taking up full and partial entitlements. The retail offer raised
approximately A$3.684 million. On 14 January 2021, the arising Shortfall Bookbuild was completed. The Bookbuild process was
managed and fully underwritten by CLSA Australia Pty Ltd and sub-underwritten by Dr. Bruce Gray. Pursuant to his sub-underwriting
agreement, 2.7 billion additional shares were issued to Dr. Gray, increasing his overall shareholding in the TIG to 59.95%. In total TIG
raised A$43.5 million.
On 4 February 2021 outstanding balance of shareholder’s loan payable and interest accrued thereon in the amount of A$1.864 million
was settled in full.
90
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Annual Report 2020Tigers Realm Coal
No change in the non-controlling interests in the Eastshore and the Amaam project occurred during the years ended 31 December
Details of the amounts paid to the auditor, Deloitte, and related network firms for audit and non-audit services provided during
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2020
33. Non-controlling interest
2020 and 2019.
34. Auditors’ Remuneration
the year are set out below.
Audit services:
Audit and review of financial reports Deloitte Australia
Audit and review of financial reports Deloitte Overseas
Services other than statutory audit
Other services
Taxation compliance and advisory services Deloitte Australia
Taxation compliance services and advisory services Deloitte
Overseas
35. Events after the reporting period
31 December
31 December
2020
A$
123,245
159,710
282,955
19,950
35,944
55,894
338,849
2019
A$
138,004
143,713
281,717
-
-
-
281,717
The entitlement offer launched on 16 December 2020 (Refer to Note 18 for further details) closed on 14 January 2021. The Institutional
entitlement offer closed on 17 December 2020 raising gross proceeds of approximately A$17.121million with the Company’s largest
shareholder Dr. Bruce Gray taking up his full entitlement. The retail component of the offer was completed on 4 January 2021 with very
good support from a number of shareholders, including Mr. Paul Little, taking up full and partial entitlements. The retail offer raised
approximately A$3.684 million. On 14 January 2021, the arising Shortfall Bookbuild was completed. The Bookbuild process was
managed and fully underwritten by CLSA Australia Pty Ltd and sub-underwritten by Dr. Bruce Gray. Pursuant to his sub-underwriting
agreement, 2.7 billion additional shares were issued to Dr. Gray, increasing his overall shareholding in the TIG to 59.95%. In total TIG
On 4 February 2021 outstanding balance of shareholder’s loan payable and interest accrued thereon in the amount of A$1.864 million
raised A$43.5 million.
was settled in full.
Tigers Realm Coal Limited
Directors’ declaration
For the year ended 31 December 2020
1.
In the opinion of the Directors of Tigers Realm Coal Limited (‘the Company’):
(a)
the attached consolidated financial statements and notes that are set out on pages 45 to 90 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 2020 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 32 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 Corporations (Wholly owned
Companies) Instrument 2016/785.
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 2020.
The Directors also 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 24th day of February 2021.
________________________________________________
Craig Wiggill
Director
78
79
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Annual Report 2020Tigers Realm Coal
92
Annual Report 2020Tigers Realm Coal Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Riverside Centre
Level 25, 123 Eagle Street
Brisbane QLD 4000
GPO Box 1463
Brisbane QLD 4001 Australia
Tel: +61 (0) 7 3308 7000
Fax: +61 (0) 7 3308 7001
www.deloitte.com.au
IInnddeeppeennddeenntt AAuuddiittoorr’’ss RReeppoorrtt ttoo tthhee MMeemmbbeerrss ooff TTiiggeerrss
RReeaallmm CCooaall LLiimmiitteedd
RReeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
OOppiinniioonn
We have audited the financial report of Tigers Realm Coal Limited (the “Company”) and its subsidiaries
(the “Group”), which comprises the consolidated statement of financial position as at 31 December
2020, the consolidated statement of comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its
financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
BBaassiiss ffoorr OOppiinniioonn
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
81
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Annual Report 2020Tigers Realm Coal
KKeeyy AAuuddiitt MMaatttteerrss
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
KKeeyy AAuuddiitt MMaatttteerr
HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt
MMaatttteerr
Estimation of the amount of royalty obligations in
relation to Amaam and Amaam North Projects
As disclosed in Note 21, the Group has entered
into a number of royalty arrangements as part of
obtaining interests in the Amaam and Amaam
North Projects.
Management is required to make a number of
judgements to estimate the amount of the
obligation, including identifying an appropriate
methodology, the probability, amount and timing
of expected future cash flows from the revenue
derived from the sale of coal produced and the
discount rate. As the estimate is sensitive to these
judgments, there is a risk that changes in key
assumptions can have a significant impact on the
estimate and therefore reported results.
Our procedures included, but were not limited to:
•
•
•
•
•
challenging
assessing the Group’s methodology to estimate
the amount of the obligation, obtaining an
understanding of the key processes associated
with the preparation of the model supporting
the
its
and
estimate
appropriateness;
assessing in conjunction with our valuation
experts, the reasonableness of key assumptions
including forecast coal sales volumes, forecast
long-term coal prices, timing of coal sales and
the discount rate applied.
performing sensitivity analysis on a number of
key assumptions, including coal sales prices and
discount rate;
performing an assessment of the historical
accuracy of forecasting by the management; and
assessing the appropriateness of the disclosures
in the notes to the financial statements.
OOtthheerr IInnffoorrmmaattiioonn
The directors are responsible for the other information. The other information comprises the
information which will be included in the Group’s annual report for the year ended 31 December 2020
(but does not include the financial report and our auditor’s report thereon). We obtained the Directors’
Report, Corporate Governance Statement and Shareholder Information, which are to be included in
the annual report, prior to the date of this auditor’s report. The remaining sections of the annual report
are expected to be made available to us after that date.
Our opinion on the financial report does not cover the other information and accordingly we do not
and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed on the other information that we obtained prior
to the date of this auditor’s report, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
94
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Annual Report 2020Tigers Realm Coal
When we read the remaining sections of the annual report, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action.
RReessppoonnssiibbiilliittiieess ooff tthhee DDiirreeccttoorrss ffoorr tthhee FFiinnaanncciiaall RReeppoorrtt
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
AAuuddiittoorr’’ss RReessppoonnssiibbiilliittiieess ffoorr tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall RReeppoorrtt
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
83
95
Annual Report 2020Tigers Realm Coal
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial report or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group’s audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
96
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Annual Report 2020Tigers Realm Coal
97
Annual Report 2020Tigers Realm Coal Tigers Realm Coal Limited
SHAREHOLDER INFORMATION
1. Top 20 Shareholders as at 15 February 2021
YEADON INVESTMENTS PTY LTD ATF
YEADON TRUST
HSBC CUSTODY NOMINEES (AUSTRALIA)
LIMITED
BV MINING HOLDING LIMITED
Number of
shares
4,824,423,317
2,885,101,115
2,377,541,065
RDIF INVESTMENT MANAGEMENT LLC
1,036,224,898
NAMARONG INVESTMENTS PTY LTD
PINE RIDGE HOLDINGS PTY LTD
SHIMMERING BRONZE PTY LIMITED
735,511,670
181,922,857
65,912,029
CO-INVESTMENT PARTNERSHIP I LP
51,811,415
J P MORGAN NOMINEES AUSTRALIA PTY
LIMITED
CANCELER PTY LTD
NATIONAL NOMINEES LIMITED
SENNEN TROVE PTY LTD
MS SIMONE PHONHTHEPHA
FOREMOST MANAGEMENT SERVICES PTY
LIMITED
MR STEPHEN ALEXANDER CHING
MR GAVIN JEREMY DUNHILL
MASIK ENTERPRISES PTE LTD
ASIPAC GROUP PTY LTD
GP SECURITIES PTY LTD
MR ANDREW JOHN KEMPSON
32,852,253
29,820,510
27,119,791
23,937,359
23,123,779
22,468,970
21,300,000
20,000,000
20,000,000
18,846,246
15,970,960
14,451,451
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
% of Total
36.96
22.10
18.21
7.94
5.64
1.40
0.51
0.40
0.25
0.23
0.21
0.18
0.18
0.17
0.16
0.15
0.15
0.14
0.12
0.11
TOTAL
12,428,339,685
95.21
98
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Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Tigers Realm Coal Limited
SHAREHOLDER INFORMATION
1. Top 20 Shareholders as at 15 February 2021
Number of
% of Total
shares
On a show of hands one vote for each shareholder, and
On a poll, one vote for each fully paid ordinary share.
SHAREHOLDER INFORMATION (CONTINUED)
2. Voting rights of ordinary shares
HSBC CUSTODY NOMINEES (AUSTRALIA)
2,885,101,115
3.
Distribution of Shareholders and Shareholdings as at 15 February 2021
Holding and
Distribution
1 to 1000
1001 to 5000
5001 to 10000
10001 to 100000
100001 and Over
Total
No. of Holders
Securities
%
40
32
45
423
520
1,060
3,916
108,513
390,988
21,949,169
13,031,142,182
13,053,594,768
0.00
0.00
0.00
0.17
99.83
100.00
4.
Tigers Realm Coal Substantial Shareholders as at 15 February 2021
Holder
No. of Shares
% of Total
Dr Bruce Gray
BV Mining Holding Limited
RDIF Investment Management LLC *
Namarong Investments Pty Ltd
7,825,877,288
2,377,541,065
1,098,398,595
735,511,670
59.95
18.21
8.41
5.64
*Including CO-INVESTMENT PARTNERSHIP I LP, CO-INVESTMENT PARTNERSHIP
II CV
5. Shareholdings of less than a marketable parcel as at 15 February 2021
380 holding a total of 9,000,285 shares.
6. Unquoted Securities as at 15 February 2021
9,907,000 unlisted options on issue.
87
99
YEADON INVESTMENTS PTY LTD ATF
4,824,423,317
1
YEADON TRUST
2
LIMITED
BV MINING HOLDING LIMITED
2,377,541,065
RDIF INVESTMENT MANAGEMENT LLC
1,036,224,898
NAMARONG INVESTMENTS PTY LTD
PINE RIDGE HOLDINGS PTY LTD
SHIMMERING BRONZE PTY LIMITED
65,912,029
CO-INVESTMENT PARTNERSHIP I LP
51,811,415
J P MORGAN NOMINEES AUSTRALIA PTY
32,852,253
9
LIMITED
10
FUND A/C>
12
FUND A/C>
CANCELER PTY LTD
27,119,791
SENNEN TROVE PTY LTD
MR STEPHEN ALEXANDER CHING
MR GAVIN JEREMY DUNHILL
MASIK ENTERPRISES PTE LTD
ASIPAC GROUP PTY LTD
GP SECURITIES PTY LTD
MR ANDREW JOHN KEMPSON
21,300,000
20,000,000
20,000,000
18,846,246
15,970,960
14,451,451
3
4
7
8
11
13
15
16
17
18
19
20
TOTAL
12,428,339,685
95.21
36.96
22.10
18.21
7.94
5.64
1.40
0.51
0.40
0.25
0.23
0.21
0.18
0.18
0.17
0.16
0.15
0.15
0.14
0.12
0.11
86
Annual Report 2020Tigers Realm Coal
Tigers Realm Coal Limited
Corporate Directory
DIRECTORS
Craig Wiggill (Chairman)
Owen Hegarty
Bruce Gray
Tagir Sitdekov
Nikolay Ishmetov (Alternate for Tagir Sitdekov)
David Swan
COMPANY SECRETARY
David Forsyth
REGISTERED OFFICE
151 Wellington Parade South,
East Melbourne, Victoria, 3002
Tel: +61 3 8644 1300
PRINCIPAL OFFICE
12A Aviakonstruktora Mikoyana
Moscow, Russia 125167
Tel: +7 495 646 8353
Email: ir@tigersrealmcoal.com
AUDITORS
Deloitte Touche Tohmatsu
123 Eagle Street,
Brisbane, Queensland, 4000
BANKERS
Commonwealth Bank of Australia Limited
727 Collins Street,
Melbourne, Victoria, 3008
100
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Annual Report 2020Tigers Realm Coal
Annual Report 2020Tigers Realm Coal Tigers Realm Coal Limited
151 Wellington Parade South
East Melbourne Victoria 3002
T +61 3 8644 1300
tigersrealmcoal.com