Trean Insurance Group
Annual Report 2021

Plain-text annual report

Annual Report 2021 CONTENTS 01 Our Company 02 Highlights 2021 04 Chairman’s Review 06 Chief Executive Officer’s Report 08 Reserves and Resources 09 Notes to reserves and resources 10 Operations Review 16 Sustainability Overview 21 Financial Report Forward Looking Statement This document contains certain forward-looking statements. The words ‘expect’, ‘anticipate’, ‘estimate’, ‘intend’, ‘believe’, ‘guidance’, ‘should’, ‘could’, ‘may’, ‘will’, ‘predict’, ‘plan’, ‘targets’, and other similar expressions are intended to identify forward looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward looking statements, opinions and estimates provided in this document are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward looking statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. This document contains such statements that are subject to risk factors associated with the mineral and resources exploration, development and production industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables which could cause actual results or trends to differ materially, including but not limited to the following risks: dependence on commodity prices, availability of funding, impact of inflation on costs, exploration risks, including the risks of obtaining necessary licenses and diminishing quantities or grades of reserves, risks associated with remoteness, environmental regulation risk, currency and exchange rate risk, political risk, war and terrorism and global economic conditions, as well as earnings, capital expenditure, cash flow and capital structure risks and general business risks. No representation, warranty or assurance (express or implied) is given or made in relation to any forward looking statement by any person (including the Company). In particular, no representation, warranty or assurance (express or implied) is given that the occurrence of the events expressed or implied in any forward-looking statements in this document will actually occur. Actual results, performance or achievement may vary materially from any projections and forward-looking statements and the assumptions on which those statements are based. The forward-looking statements in this document speak only as of the date of this document. Subject to any continuing obligations under applicable law or any relevant ASX listing rules, the Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statements in this document to reflect any change in expectations in relation to any forward-looking statements or any change in events, conditions or circumstances on which any such statement is based. Nothing in this document will under any circumstances create an implication that there has been no change in the affairs of TIG since the date of this document. ABN 50 146 732 561 Tigers Realm Coal Annual Report 2021 OUR COMPANY 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 five 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 2021, the Company further increased annual production to 1,025kt (2020: 792kt) and annual sales to 911kt (2020: 775kt). TIG also increased transshipment volumes to 885kt, an increase of 125kt over the tonnage achieved in 2020 and a record for the Beringovsky port. Transshipment was carried out using TIG’s four 500-tonne barges. In addition to achieving record loading volumes, TIG further reduced transshipment costs. Despite supply chain logistics challenges and adverse weather conditions the construction of the first processing module of the CHPP was almost completed in 2021. Strong operational performance was supported by a significant resurgence of the international coal market. The improved market conditions and further increase in sales volumes more than doubled revenue growth for the period. During 2022 TIG will be primarily focused on the commissioning of the first processing module of the CHPP and shipment of our first cargoes of semi–hard coking coal (“SHCC”) during the 2022 shipping season. TIG expects to receive the 5th 500t barge on site by the start of the 2022 shipping season, that will further increase TIG’s annual loading capacity. The Company’s registered office is located in Melbourne, Australia. Management is principally located in our offices in Moscow and on site in Chukotka. 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. Tigers Realm Coal Annual Report 2021 0101 Annual Report 2021Tigers Realm Coal HIGHLIGHTS 2021 Notwithstanding many logistics challenges and unusually adverse weather conditions, the CHPP equipment was fully installed in 2021, and the main building was completed and winterized in the March quarter. Completing the CHPP is central to the next phase of our development strategy. TIG expects it to come fully online in the June quarter. 02 Tigers Realm Coal Annual Report 2021 Mining Volumes Sales Volumes Total Reportable Injury Frequency Rate (TRIFR) 2.58 29% Total Reportable Injury Frequency Rate (“TRIFR”) decreased from 3.08 to 2.58 Mining volumes increased year-on- year by 29% from 792kt to 1,025kt 17.5% Sales volumes increased by 17.5% from 775kt to 911kt. The significant increase in mining volumes was enabled as a result of increased production capacity and lower stripping ratio. TIG Loaded Decrease Mining Costs1 Transshipment Costs2 885kt TIG loaded 885kt with our own 500-tonne barges. This volume represents a historical record for Beringovsky port and an increase of 21.8% over the previous year A$41.58/t (US$30.43/t) With the stripping ratio decreasing from 6.1 bcm/t in 2020 to 4 bcm/t in 2021, TIG managed to further decrease mining costs from A$43.68/t (US$31.57/t) in 2020 to A$41.58/t (US$30.43/t) in 2021 A$6.65/t Transshipment Costs per tonne continued to decrease coming down by 5%, from A$6.95/t to A$6.65/t EBITDA Net Income A$46.9m A$38.0m EBITDA improved from negative A$3.8 million to a record A$46.9 million Outstanding production and sales results translated into a record Net Income of A$38.0 million 1. The average cost per tonne of coal mined includes all costs to mine and haul coal to the stockpile. 2. Transshipment costs include costs incurred to transship coal from the stockpile to bulker. Tigers Realm Coal Annual Report 2021 03 CHAIRMAN’S REVIEW 2021 was a transformational year for the Company in that several production and shipping records were set, whilst at the same time the construction of the much-anticipated CHPP was undertaken. Although a combination of logistical and weather-related issues prevented us from achieving our goal of 2021 commissioning of the CHPP, the erection of the plant and its subsequent cladding, insulation and winterization has been achieved with an outstanding safety record. We are now set for an imminent commissioning whereafter we expect to be producing a washed product for export into the SHCC market, enabling better returns on our export of coals. Operating within the continuing constraints of COVID-19 rules over our operations and the restrictions transport of both men and materials certainly complicated the year, but the Company’s management team continued to do us proud in both their attitude and ability to cope with this challenge. Their contribution to the success of managing the virus within the entirety of the Chukotka Province has been acknowledged by the authorities and regional government. 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, which is illustrative of an ongoing emphasis by the senior team on our core values of care and respect. The Company continues to monitor the situation arising out of the conflict between Russia and Ukraine. Whilst mining operations and port preparation for the shipping season have continued as per plan, TIG has needed to deal with some challenges, not only with the commissioning of the CHPP but also with respect to certain supply chain constraints on equipment and spares. The Company is still assessing the extent, if any, to which these issues may impact mining and sales results for the current year. We are very pleased to have appointed Mitch Jakeman to the Board as an independent Non-Executive Director. Mitch has extensive experience in the coal mining sector and his experience and insights will be of great benefit to us as we continue on our growth path. I would also wish to thank the recently resigned board member, Mr Valerie Doronin, for his contributions to the company over the past year. 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 2021. I look forward to the continued delivery of growth, profitability and transformative coal processing infrastructure during 2022. Craig Wiggill Chairman 04 Annual Report 2021Tigers Realm Coal 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, which is illustrative of an ongoing emphasis by the senior team on our core values of care and respect. Tigers Realm Coal Annual Report 2021 05 CHIEF EXECUTIVE OFFICER’S REPORT We are proud of the results TIG posted in 2021, including record mining and sales volumes of 1Mt and 911kt which translated into a record EBITDA of A$46.9 million and Net Income of A$38.0 million. We achieved these results while also bringing our TRIFR down to 2.58 from 3.08 in 2020 and dealing with the challenges of the COVID-19 pandemic as it continued into 2021. the potential to be disruptive to TIG’s business. At present, however, we have not experienced a material, direct impact on our business relations and operations. CHPP commissioning was unfortunately delayed, due to both unusual logistics challenges and the extreme weather conditions that TIG encountered in 2021. The equipment was fully installed, and the main building has now been insulated and winterized ready for commissioning. Derek Parnaby Cyclones International Ltd (DCPI) will participate remotely in support of CHPP commissioning. We expect to complete commissioning during the June quarter. The ongoing geopolitical tensions and the various sanctions enacted with respect to Russia, many significant industrial groups and banks in Russia and many specific individuals, has I would like to express my gratitude to our shareholders for your continued support, and to the TIG team for all their professionalism which enabled us to achieve excellent results in 2021 and which will enable us to address the enormous challenges we will face in 2022. Dmitry Gavrilin Chief Executive Officer 06 Annual Report 2021Tigers Realm Coal With a 16% increase over the previous year of loading volumes to a record level of 885kt and further decrease of transshipment costs TIG’s port performance continued to improve remarkably during the second full year during which TIG operated the port itself. Tigers Realm Coal Annual Report 2021 07 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) 22.6 18.5 20.2 1.5 0.7 63.5 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 6,820 Total (Mt) 23.8 24.3 34.3 1.5 0.7 84.6 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 12.8 1.2 14.0 Probable 8.1 0.7 8.8 Total 20.9 1.9 22.8 Proved 7.8 1.0 8.8 Probable 5.0 0.6 5.6 Total 12.8 1.6 14.4 The Amaam North (Project F) Coal Reserves are based on a Coal Reserve Estimate prepared by Optimal Mining Solutions in November 2020 adjusted for depletion. 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 08 Annual Report 2021Tigers 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. 09 Annual Report 2021Tigers Realm Coal OPERATIONS REVIEW Overview of TIG’s Operations Tigers Realm Coal Ltd’s (ASX: TIG) strategy is set 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 and two 100-tonne barges. 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 10 Tigers Realm Coal Annual Report 2021 Strategy 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 coal handling and preparation plant (“CHPP”) with UK-based Derek Parnaby Cyclones, Inc. (DPCI). Despite supply chain logistics challenges and adverse weather conditions the construction of the first processing module of the CHPP was almost completed in 2021. TIG expects to complete testing and commissioning procedures and begin running at nominal capacity in the June quarter. 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. 159kt 5kt 100kt TIG mined 159kt in September 2021 – a monthly historical maximum Maximum truck haulage per day reached 5kt in 2021 Chattering and loading of a 100kt geared ice class vessel set a new record for both vessel and cargo size at Beringovsky port 15.5kt pwwd 500t 340 A record loading rate of 15.5ktpwwd achieved on 12 July 2021 in the Beringovsky port The 5th 500t barge acquired and is expected to be on-site by the start of 2022 shipping season The number of employees increased by 20% from 283 in 2020 to 340 in 2021 Tigers Realm Coal Annual Report 2021 11 OPERATIONS REVIEW CONTINUED Operations Update Licensing & Exploration Activities The Company is in compliance with its licence obligations. As at 31 December 2021, TIG had the following licences in effect: Licence Holder Amaam North BPU1 BPU BPU Amaam NPCC2 NPCC NPCC Site Licence No. Licence Type Expiry Date Amaam North ‘Fandyushkinskoye’ Amaam North ‘Zvonkoye’ Alkatvaam – Levoberezhny AND 15813 TE Mining Dec 2034 AND 01314 TE AND 01203 TP Mining Exploration Sep 2038 Dec 2025 ‘Zapadny’ ‘Nadezhny’ ‘Area 4’ AND 01278 TE (formerly AND 01225 TE) AND 01288 TE AND 01379 TP (formerly AND 01277 TP) Mining Mining Exploration Mar 2033 July 2037 Jun 2027 1. LLC Beringpromugol (‘BPU’), wholly owned TIG subsidiary. 2. JSC Northern Pacific Coal Company (‘NPCC’), 80% beneficially owned by TIG. Amaam North Snapshot Mining volumes increased year-on-year by 29% from 792kt to 1,025kt and comprised of 601kt of thermal coal (22% increase from last year’s 494kt) and 424kt of metallurgical coal (42% increase from 298kt in 2020). Mining Operations During 2021 TIG has significantly increased its mining capacity by adding a 100t bulldozer, 5x dump trucks, a 7m3 excavator and a 70t bulldozer. The average stripping ratio for 2021 amounted to 4.0:1, a significant decrease from 6.1:1 in 2020, which was due to focussing our mining activities on Seam 3, which material will be sent for further processing with CHPP in 1H 2022. The increase of the quarterly average stripping ratio in the March quarter to 6.2:1 was due to concentrating our mining activities at Seam 4 instead of Seam 3. The coal mined at Seam 4 is lower ash and appropriate for selling without processing. As such, it was trucked to port to be sold during the first half of the navigational season. In September TIG mined 159kt – a monthly historical maximum. 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 208 62 6 655 777 3.7 Q2 175 186 169 661 1,093 6.2 Q3 339 429 539 461 1,172 3.5 Q4 303 249 197 567 1,021 3.4 2021 Total 1,025 926 911 567 4,063 4.0 12 Annual Report 2021Tigers Realm Coal Haulage Operations Haulage operations based on our fleet of 21 Scania trucks. Three road haul trucks for coal transportation were acquired in 2021 and two were written off. Our total fleet capacity increased by 1 truck in 2021. Coal haulage to port increased to 926kt in 2021, a 47% increase over 2020. Maximum truck haulage per day reached 5kt. 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 to improve safety and haulage efficiency and reduce environmental impact. Construction of road culverts continued. Sales and Marketing During 2021, TIG delivered 15 cargoes with a total of 898kt of coal. This consisted of 778kt of thermal and 120kt of semi-soft coking coal (“SSCC”). Domestic Market – total 13kt. Throughout the year TIG’s sales were supported by exceedingly strong demand in the Asian market, especially out of China. As a result of this in Q2 TIG has taken the opportunity of selling excess low quality thermal coal cargoes at attractive coal prices. In Q3 taking into account exceptionally strong demand for our products, as well as robust mining and port performance for the first nine months, TIG raised its full-year 2021 sales guidance from 700 – 800kt to 800 – 850kt, that was slightly outperformed by the year end. The chartering and subsequent loading of a 100kt geared ice class vessel set a new record for both vessel and cargo size at our port of Beringovsky. The positive impact of improved market conditions was partially offset by a dramatic rise in bulk cargo shipping costs. The shipping market was extremely tight during the year due to a strong recovery in demand for most commodities and a lack of new shipping capacity. The net result was an effective doubling of our seaborne coal transportation costs (from c. A$27 (US$20)/t in 2020 to c. A$53 (US$$40)/t in 2021), which directly affected the net price achieved by TIG for its products. 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 strong resurgence in coal prices during the first nine months of 2021 undertook a downward correction in October 2021 as a result of the government intervention in the Chinese market. Additionally, Chinese steel demand fell heavily through October to December, on the back of a significant downturn in the Chinese construction sector. The Asian coking coal market strengthened markedly during first three quarters of 2021 with CFR prices for hard coking coal (HCC) on the Chinese spot market reaching $400/t in Q3. However, in the December quarter the Asian coking coal market changed significantly, driven by restricted supply from Australia and strong demand from India and North East Asia. China, which had been a strong market for most of the year, was significantly impacted by a downturn in the residential construction market in China. The impact on steel demand has been material, with coke makers operating at less than 50% of capacity. 2021 Beringovsky Port Operations With loading volumes of 885kt (2020: 760kt) – a 16% increase over the previous year and the maximum annual volume achieved in the port’s history – TIG’s port performance continued to improve remarkably during the second full year during which TIG operated the port itself. Beyond the increased volumes, transshipment costs per tonne continued to decrease coming down by 5%, from A$6.95/t to A$6.65/t. Preparations for the 2021 shipping season included maintenance of the conveyor and loading system in the port, initial dredging works as well as the necessary minor repairs on the fleet and cranes. TIG chartered a 100kt ice class geared bulk vessel as the first for the season and the availability of this vessel in turn enabled TIG to start loading on May 28th – the earliest start of the shipping season in TIG’s history. Key figures for TIG port operations are set out in the table below: Coal trans-shipped Barges in use Weather working days per month kt units days May June 18 4 3 179 4 18.3 July 237 4 18.5 Aug 182 4 19.9 Sept 114 4 24.1 Oct 95 4 14.9 Nov 60 4 9.7 Total 885 108.4 13 Annual Report 2021Tigers Realm Coal OPERATIONS REVIEW CONTINUED During 2021 TIG’s average loading rate increased to 8.2kt per weather working day (“pwwd”) compared to 6.5kt pwwd in 2020. A record loading rate of 15.5kt pwwd was achieved on 12 July 2021. As TIG’s port has a limited navigational season with weather conditions, particularly toward the end of the season, which can be unpredictable, it is critical to maximize loading when weather allows. Multiple factors impact average loading rates, among these are effective scheduling of bulker arrivals, pre-season & intra-season dredging so that barges are able to work with maximum loads and proper planning of inter-season maintenance. Capital investments in the port infrastructure during 2021 included general repair and maintenance projects, water runoff management infrastructure completion and one more 500t barge acquisition. The building of the 5th 500t barge is in progress and TIG expects to receive the barge on site by the start of the 2022 shipping season. This additional barge will further increase TIG’s annual loading capacity and it has also been configured for multi-functional purpose with a front-access ramp to enable better handling of incoming equipment and spares than the currently utilized 100t barges. Coal Handling and Process Plant (CHPP) Project In the first half of the year TIG encountered significant supply-chain issues, especially with respect to domestic logistics. As a result of these issues, certain supplies arrived at Beringovsky later than planned. These delays, in turn, led to delays in completing CHPP winterization and commissioning. Very poor weather conditions adversely affected the CHPP construction works, especially during December. Nonetheless, the CHPP equipment is now fully installed, and the plant cladding and winterization was completed in March 2022. Derek Parnaby Cyclones International Ltd (DCPI) will effect final CHPP commissioning and delivery by remote means as a consequence of travel difficulties arising out of the current crisis in Ukraine. TIG expects commissioning to be completed during the June quarter. Once commissioning is completed, the Company will be positioned 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. Amaam Overview TIG holds an 80% interest in the Amaam tenement with its licences covering an 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 2021 at Amaam other than preparatory geological and project work being performed as part of future drilling activities. • A Project Feasibility Study completed on 5.0 Mtpa open pit operation producing a high vitrinite content (>90%) coking coal with excellent coking properties • The total Resource is 521 Mt comprising 3 Mt Measured, 91 Mt Indicated, and 427 Mt Inferred Corporate Activities As part of the Entitlement Offer launched on 16 December 2020, a shortfall bookbuild was completed on 11 January 2021. 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. Proceeds from the entitlement offer were 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: – 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. On 16 April TIG announced that Non- Executive Director Tagir Sitdekov has resigned from the Board, effective 14 April 2021. On 27 April Valery Doronin was appointed as a Non-Executive Director. As a result of his resignation from RDIF Valery Doronin resigned from the Board, effective 3 February 2022. RDIF does not currently have a director on the board of TIG. 14 Annual Report 2021Tigers Realm Coal On 9 June BV Mining Holding Limited (BVMHL) notified TIG that it had terminated the strategic review process it had initiated during 2020. In providing this advice BVMHL reiterated its intention to continue cooperative efforts with TIG to build a sustainable growth business which increases shareholder value and provides investor returns. In June 2021, 616,000 options lapsed and were removed from the Company’s option register. On 17 January 2022 Tigers Realm Coal appointed Mr. Mitch Jakeman as a non-executive Director to the Board. Mitch is a well credentialed and highly experienced mining executive having held senior operational and management roles with various mining companies in Australia. 15 Annual Report 2021Tigers Realm Coal Strong response to COVID-19 During 2021, TIG’s Directors and Management maintained a strong focus on achieving a comprehensive response to the COVID-19 pandemic. The Group’s top priority has always been and continues to be protecting the health, safety and wellbeing of our people and the communities that host our business. TIG maintained during 2021 a number of measures implemented in 2020 to ensure normal operating activities, including remote working for employees based in Moscow as recommended by regulatory authorities, 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. Approximately 70% of all employees have been vaccinated with the Sputnik-V vaccine. SUSTAINABILITY OVERVIEW TIG places a strong emphasis on developing sustainable and effective operational performance, sustainability being pursued both through awareness of and striving for the achievement of high-performance standards in all aspects of its operations. Health & Safety Safety Care for our people is one of our core values, with the health and safety of all employees and contractors at site being at the forefront of our considerations. TRIFR (Per Million Hours Worked) 2021 2020 2019 2018 As a result of TIG’s HSE-related activities cumulative Total Reportable Injury Frequency Rate (“TRIFR”) decreased for the second year in a row to 2.58 per million hours worked in 2021. There was 1 Lost Time Injury case (“LTI”) in 2021. Since the start of its operations TIG has developed a solid system of Health & Safety management, including continuous improvement and support of workplace safety culture, HSE risk assessments and incident follow-up procedures. Main measures to ensure safe working conditions throughout our operations, include but are not limited to: • HSE inductions for all new employees in addition to supplementary HSE reviews for existing employees; • 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: continuous driver training programs, road signage upgrade, improvement of traffic management controls; • Ongoing improvement of road conditions to further enhance safety of haulage operations; 2.58 3.08 4.00 3.70 • Staff well-being promotion: the role of staff scheduling, rest and the effects of fatigue and diet; • Workplace organisation and safety regular inspections; • Guidance and awareness promotion: Weekly safety briefings, cautioning and informative signage on all objects; • The continued evolution of mine rescue team operational guidelines and trainings; 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 & Safety programme. Since 2020 professional risks maps for all production-related activities are in place being constantly monitored and regularly updated. According to Russian legislation all of the Company’s production-related activities are referred to an insignificant degree of risk. 16 Tigers Realm Coal Annual Report 2021 Human Capital People are core to realizing TIG’s strategy and achieving its plans and targets. Being at the active operations growth stage each year TIG significantly increases its headcount creating new working places in the region. The number of employees increased by 20% from 283 in 2020 to 340 in 2021. Female employee representation increased from 15% in 2020 to 19% in 2021. Water Management TIG continued developing water management programs covering the camp, pit and haulage road to make sure no waste escapes into local rivers and sea. TIG’s operational sites are equipped with the following wastewater treatment facilities: Number of Employees 2021 2020 2019 2018 We place a great focus on selecting and recruiting the most knowledgeable and skilled specialists and on improving their qualifications. Apart from safety and environment protection trainings and inductions TIG provides its staff with training programs to receive new qualifications or upgrade existing ones. Average number of training hours per employee nearly doubled from 38 in 2020 to 73 in 2021. In August 2021 TIG conducted a celebration devoted to the 10th anniversary of TIG’s IPO (initial public offering). The event was held in Moscow and was attended by three of our directors, including the Chairman and Chairman of the Audit, Risk & Compliance Committee, senior management, many of our long-time employees as well as key suppliers, financial institutions, and several former employees who had made significant contributions to TIG’s development. On August 27-28 in Chukotka TIG celebrated Miners’ Day (a professional holiday celebrated throughout the coal industry in Russia) organizing a performance of a music band for the Company’s employees in Beringovsky. 340 • At the port: sewage facility/sediment pond with 525 m2 capacity was built to clean intermediate stockpile site tailings with cartridge-filter technology; • At the mine-site: facilities for pit waters treatment by storage for further discharge has been reconstructed and CHPP technology without sediment ponds has been chosen to minimize impact on natural water systems; • In the camp: biological wastewater treatment plant has been installed and commissioned in 2021. 283 282 4.00 208 3.70 Environmental Stewardship TIG operates in compliance with Russian environmental legislation and pursues identification and implementation of the best known and available practices and technologies to minimize any negative impact of its activity on environment. Apart from fulfilling a broad range of obligatory requirements of Russian environmental authorities, such as conducting ecological studies of development projects or regular monitoring of air and water quality, TIG expands its environmental stewardship with a number of eco- initiatives involving local community: • Since 2019 TIG’s Beringovsky office staff during ‘Eco-patrol’ initiatives helps monitoring seacoast from waste and disposals and is cleaning the Lakhtin lagoon together with the eco-activists of Beringovsky («K’orgav» project); • In 2020 the Company created hotline for enquiries regarding mining and environment issues in Beringovsky; • With care for environment being one of our core values we have developed and are constantly improving our environment management programs for the camp, mine, and port; 17 Annual Report 2021Tigers Realm Coal SUSTAINABILITY OVERVIEW CONTINUED Some examples of TIG’s recycling efforts include, but are not limited to: • worn tyres are used on the barge fleet as protectors; • oil used by our mobile fleet is used for heating; • mining waste was utilised in maintenance and enhancement of the pit to port road infrastructure, as well as by the local administration for municipal purposes in 2018. In September 2021 TIG brought to site an incineration unit to ensure the safe disposal of non-mining waste. The start of active operation of the unit is planned for the summer period of 2022. On a monthly basis, soils under and around the coal stockpiles and waste dumps are tested in order to monitor environmental regulation compliance. All production waste was recycled in accordance with regulatory requirements. In 2019 and 2020 the Company transferred ferrous scrap to specialist organisation for recycle and reuse. Taking into account increasing volumes of ferrous scrap a decision was made to launch TIG’s own recycling operations. Hence, in 2021 ferrous scrap was stored at the Company’s sites for further recycling when appropriate facilities are ready. To improve the safety and overall quality of the local environment in 2021 TIG’s staff continued clean-up of old legacy scrap metal and industrial garbage at the port and within all areas of operational footprint. Waste and ROM Coal Mined Growth (Thousand Tonnes) 2021 2020 2019 2018 1,025 792 750 576 1,900 Waste mined ROM coal mined 4,063 4,804 3,501 The effectiveness of water management programs is regularly monitored through monthly independent laboratory testing. According to the research results of sanitary-biological, chemical and radiological laboratory studies of the quality of water from the well supplying the port operations carried out in 2021, the water from the well meets the sanitary and hygienic standards and is suitable for consumption. The Company monitors water usage from natural sources. Total fresh well- water intake in 2021 was 2,400km3. After taking a full control over the port operations TIG secured all necessary documentation and works to commission a fresh water well in the Beringovsky port in the third quarter of 2021. The well-water intake in the port in 2021 amounted to 700 m3. In 2021 TIG installed water gauges to measure household water discharge in the camp. Total water discharge in the camp in 2021 was 2,500 m3. According to the plans of water management and protection measures approved by the regulatory authorities in 2020 total annual water discharge at the mine-site (Fandyushkin Stream) and at the port (the Bering Sea) is limited to 31,500m3 and 29,000m3, respectively. Waste Management TIG’s goal is to reduce the volume of waste produced and to manage it in a safe and efficient way. We aim to minimise waste generation by improving technological processes and increasing the share of reused and recycled waste. We regularly assess waste products to identify recycling opportunities. For waste that cannot be recycled, we either organize environmentally safe decontamination and disposal, or transfer it to specialist companies. 18 Annual Report 2021Tigers Realm Coal Air Management and Dust Control TIG’s activity in the area of air management is targeted at minimizing emission of pollutants into the atmosphere. Throughout 2021 regular laboratory studies of atmospheric air in coal mine and camp were carried out. According to the test reports, the concentration of pollutants in the air does not exceed the maximum permissible values. The Company uses a set of measure to control dust at its operation sites: • Dust covers are deployed to control coal dust at the stockpiles; • Mobile dust control unit was acquired and delivered to Beringovsky in 2021; • Reactive chemicals are used to cover stockpiles with crust to lay coal dust. Biodiversity and Rehabilitation The Company works with specialised organisations to assess the state of biodiversity during engineering and environmental surveys at pre-design and design stages. The results undergo state environmental impact assessment and are included in materials for public hearings and deposit development projects. In the first quarter of 2021 an assessment was made of the impact on aquatic biological resources and their habitat due to port activity. The assessment indicates a short-term indirect negative impact in the form of increased noise level and vibration, but the activity will not cause direct damage to aquatic biological resources and their habitat. TIG does not operate in natural reserve areas. Energy Consumption and Efficiency TIG receives electrical supply from diesel generators. Heating is provided by coal-fired boilers. The Company is currently at the active development stage and its energy consumption increases in line with production growth. Constant work is underway to optimise diesel fuel consumption, including installing boiler facilities, improving the pit-to-port road conditions, motivating and training employees in fuel saving methods, reducing idle downtime and mileage. Improving energy efficiency at its facilities is one of the TIG’s key priorities with respect to lowering our environmental impact. Community Relationships 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 are committed to make a positive and sustainable contribution to the economic and social aspects of people’s lives in the region. Local Community We place a priority on attracting employees from the local community whenever possible and providing them with training opportunities. Apart from creating working places, TIG plays a leading role in a number of events and initiatives aimed at supporting the local community. In 2021 the Company continued its support for local schools: • In the third quarter TIG congratulated local schoolchildren with the beginning of new school year and presented backpacks and stationery; • In July TIG financed purchase of stacks and showcases for the Alkatvaam school’s ethnography museum; • TIG continued to provide nutritional supplements to children in the Beringovsky in order to improve the health and welfare of local community; • In the fourth quarter TIG held a New Year celebration for the schoolchildren of Beringovsky and Alkatvaam. TIG provides continuous support to local administration by financing projects of high social importance. After restoring Beringovsky church in 2020 TIG committed to build a soccer field in the township. In April 2021 at the request of local administration the Company sponsored participation of Berengovsky schoolchildren in a basketball tournament. 19 Annual Report 2021Tigers Realm Coal SUSTAINABILITY OVERVIEW CONTINUED One more way of TIG’s contribution to local community is providing support to local small businesses through outsourcing and charitable assistance. TIG regularly informs local community on its activity and development plans. In April 2021 the Company organised public hearings in Beringovsky regarding the construction of CHPP. TIG’s General Manager Sergey Efanov presented CHPP design plans and answered all the questions of local representatives demonstrating openness to their feedback and future cooperation. Indigenous People Since signing the first cooperation agreement with the Association of Indigenous People of Chukotka (the Association) in 2018, TIG takes an active part in the life of local indigenous community: In March 2021 TIG was invited by Governor Roman Kopin to the VI Congress of the Indigenous People of Chukotka. TIG’s CEO Dmitry Gavrilin made a presentation on the social and environmental partnership between the Company and the region. TIG detailed its production volumes and plans, social projects & environmental responsibility, and fulfillment of the clauses of the Agreement with the Association. The event was extensively covered in the regional press and social media. Throughout the year regular meetings with local and indigenous communities were held in Beringovsky. In December 2021 TIG and the Association selected a number of community projects for mutual support in 2022. Projects receiving TIG’s continuous support since 2019: • Conducting regular meetings with the representatives of the Association and indigenous communities; • “K’ergav” children and adult folk groups; • Annual local festival “Einev”; • Supporting the local administration • Voluntary eco-project “K’orgav”. of the Association; • Financing local projects in cooperation with the Association; • Organising site-visits to the Company’s operations; • Taking part in the regional and municipal initiatives; • Responding to community requests. In 2021 TIG organized and funded a trip to the village of Khatyrka for representatives of the Association to celebrate the 265th anniversary of the village and the festival “Einev-2021”. 20 Government relations The Federal and Chukotka Provincial Governments continued with their positive support of our projects and the economic development of the Far East of Russia in general. The Company’s projects reside within the Beringovsky Advanced Development Zone (ADZ), established by the Russian Government in order to promote the development of and investment in the Russian Far East. During production, the Company is benefiting from advantageous customs and employment regulations, in addition to exemptions and reductions in various taxes for the first 10 years of operations. TIG’s Russian Management Team has well established relationships with the Provincial Government and extensive experience in working within the regulatory environment and understanding the relevant approval processes. In 2021 TIG’s government relationship initiatives resulted in a number of activities and achievements: • During the Eastern Economic Forum in Vladivostok, on September 3, 2021, Tigers Realm Coal signed cooperation MOU with Corporation for the Development of the Far East and the Arctic; • TIG was included in the list of key projects of the Russian Federation under the personal control of the supervising Deputy Prime Minister of the Russian Federation; • At the annual Star of the Far East award ceremony sponsored by Presidential Administration, TIG received an award in the category of Best Foreign Investor; • TIG was included in the working group for the implementation of the federal project “Clean Arctic”; • A report on the modernization of the port of Beringovsky was sent to the Government of the Russian Federation. Such reporting forms part of our reporting obligations arising from the port’s status as a strategically important asset. Annual Report 2021Tigers Realm Coal FINANCIAL REPORT Directors’ Report Corporate Governance Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position 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 22 44 51 52 53 54 55 95 96 97 102 104 21 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report For the year ended 31 December 2021 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 2021. 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 30 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 was appointed a Non-Executive Director of the Company on 8 October 2010. 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. He is the Chairman of 29Metals Limited (ASX: 29M). 22 4 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 1. Directors, Alternate Director and Company Secretary Name, qualifications and independence status Experience, special responsibilities and other directorships Mr Tagir Sitdekov Non-executive Director MBA (resigned 14 April 2021) Mr Sitdekov was appointed a Non-Executive Director on 1 April 2014 and resigned on 14 April 2021. Mr Sitdekov was 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 was a member of the Audit, Risk and Compliance Committee. Mr David Swan Independent Non-executive Director BComm, FCA (ICAANZ & ICAEW) David Swan was appointed as an Independent Non-Executive Director on 26 August 2020. He is the Chairman of the Audit, Risk and Compliance Committee and of the Nomination and Remuneration Committee. 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 with projects in Central Asia, Africa, and USA. David holds a Bachelor of Commerce from the University of WA and is a Fellow of both the Institute of Chartered Accountants in Australia and New Zealand (‘ICAANZ’) and the Institute of Chartered Accountants in England and Wales (‘ICAEW’). David is a non-executive director and audit committee chairman of London AIM Listed company Central Asia Metals plc. He holds no other directorships with ASX listed entities. Mr Valery Doronin Non-executive Director (appointed 27 April 2021, resigned 3 February 2022) Mr Mitch Jakeman Independent Non-executive Director BE, ME (appointed 17 January 2022) Mr Valery Doronin was appointed a Non-Executive Director on 27 April 2021 and resigned on 3 February 2022. Mr Doronin was a Director of RDIF and has held a number of senior management and Board positions in Russian companies over the past 20 years. During that time he has gained considerable experience in investment, portfolio management and private equity. This experience includes numerous transactions across a number of industries including financial services, construction materials, resources and energy. Mr Doronin was a member of the Audit, Risk and Compliance Committee. Mr Mitch Jakeman was appointed as an Independent Non-Executive Director on 17 January 2022. He is a well credentialed and highly experienced mining executive having held a number of operational and management roles with various mining companies including Shell Coal Australia, Anglo Coal Australia and Stanmore Coal. More recently Mitch has been involved in a number of start – up businesses in addition to operating his own consulting practice. Mr Mitch Jakeman holds a BE Mining Degree from the University of New South Wales, a Diploma in Mineral Economics from Macquarie University and ME (Hons) Mining under Stored Waters and Dams from the University of Wollongong. 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 (resigned 14 April 2021) Mr Ishmetov was appointed as an alternate director to Tagir Sitdekov on 1 July 2017 and resigned on 14 April 2021. 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. 5 23 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 Company Secretary Mr Forsyth was appointed Company Secretary on 8 October 2010. 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 David Forsyth Company Secretary FGIA, FCIS, FCPA 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 8 8 8 8 2 5 2 B 8 7 6 8 2 4 2 A 4 4 4 4 - - - B 4 4 2 4 - - - A 7 - 7 7 3 3 3 B 7 - 5 7 3 1 3 Mr Craig Wiggill Dr Bruce Gray Mr Owen Hegarty Mr David Swan Mr Tagir Sitdekov Mr Valery Doronin 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. 24 6 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 Key Operating Indicators for the year ended 31 December 2020 (“2020”) and 2019 (“2019”): (rounded to the nearest thousand tonnes, unless otherwise stated) Operating Performance Operating Indicators 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** **Full time equivalent staff. *Including 15kt thermal coal sold domestically without shipment (Year ended 31 December 2019: 4kt). 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 7 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 4. Review of operations Business Strategies and Group Objectives (continued) 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. All CHPP equipment is now installed, and Tigers Realm Coal Limited civil works primarily related to winterization and power supply are nearly complete. TIG expects to complete commissioning procedures during the March quarter 2022. As discussed below TIG encountered significant supply-chain issues in 2021, especially Directors’ report (continued) with respect to domestic logistics. As a result of these issues, certain supplies arrived at Beringovsky later than planned. These For the year ended 31 December 2020 delays, in turn, led to delays in completing CHPP winterization and commissioning. Once commissioning is completed, the Company will be positioned 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 4. being sold into thermal and semi-soft coking coal markets. Review of operations Business Strategies and Group Objectives (continued) Amaam 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 Amaam is a potential long-life project of the Group with capacity to enable TIG to increase production up to 5Mtpa of high- coking coal product over an estimated 20-year life of mine. The Company currently holds an Exploration Licence over the Amaam quality coking coal product over an estimated 20-year life of mine. The Company currently holds an Exploration Licence over the deposit and two long-term (20 year) Extraction and Exploration Licences over parts of the deposit. Further details on the current Amaam deposit and two long-term (20 year) Extraction and Exploration Licences over parts of the deposit. Further details on the status of the Group’s licences are disclosed below in Significant Business Risks: Licenses, Permits and Titles. 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 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) Results for 2020 Results for 2019 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** **Full time equivalent staff. 792 4,804 bcm 6.1:1 bcm/t 750 3,501 bcm 4.7:1 bcm/t 7 25 308 775 617 158 283 291 581 388 193 282 7 *Including 15kt thermal coal sold domestically without shipment (Year ended 31 December 2019: 4kt). Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 Operating Performance Key Operating and Financial Indicators for the year ended 31 December 2021 (“2021”) and 2020 (“2020”): 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 2021 Results for 2020 1,025 4,063 kbcm 4:1 bcm/t 792 4,804 kbcm 6.1:1 bcm/t 567 911 791 120 340 308 775 617 158 283 *Including 13kt thermal coal sold domestically without shipment (Year ended 31 December 2020: 15kt). **Full time equivalent staff. 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 profit / (loss) before tax Results for 2021 Results for 2020 103,944 (59,398) 44,546 46,852 44,313 37,956 47,889 (48,216) (327) (3,835) 2,161 (15,625) Average free on board (“FOB”) coal sales price per tonne A$105.79 (US$77.41) A$53.30(US$38.53) Average cost of coal mined and sold per tonne A$41.58 (US$30.43) A$43.68 (US$31.57) Average cost of port handling and stevedoring costs per tonne sold A$6.52 (US$4.77) A$6.95 (US$5.03) Total FOB cost of coal sold*** A$54.75 (US$40.06) A$53.45 (US$38.64) *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$6.65 per tonne in 2021 (A$2.82 per tonne in 2020). 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. 26 8 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 The following table summarises the key reconciling items between the Group’s EBITDA, adjusted EBITDA and its profit/(loss) before income tax: in A$‘000 Profit/(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 2021 Results for 2020 37,956 2,596 6,300 46,852 189 235 (2,963) - 44,313 (15,625) 3,440 8,350 (3,835) 5,690 254 - 52 2,161 During the year ended 31 December 2021, the Company achieved a production level of 1,025 thousand tonnes (“kt”), of which 804kt were delivered to Beringovsky Port and Coal Terminal (792kt and 632kt, respectively in 2020). During the year ended 31 December 2021, the Group sold 911kt (775kt in 2020) and generated A$103.944 million in total revenue from the sale and shipment of coal (2020: A$47.889 million). The Group had A$23.204 million net cash inflow from operations for the year ended 31 December 2021 (2020: A$11.304 million net cash outflow). Cash outflows of A$26.242 million on investing activities were incurred for the year ended 31 December 2021 (A$9.244 million was incurred for the year ended 31 December 2020). The Group’s net profit for the year ended 31 December 2021 was A$37.902 million (2020: net loss of A$15.642 million). During 2021, TIG’s Directors and Management maintained a strong focus on achieving a comprehensive response to the COVID– 19 pandemic. The Group’s top priority has always been and continues to be protecting the health, safety and wellbeing of our people and the communities that host our business. TIG maintained during 2021 a number of measures implemented in 2020 to ensure normal operating activities, including remote working for employees based in Moscow as recommended by regulatory authorities, 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. Approximately 70% of all employees have been vaccinated with the Sputnik-V vaccine. The international coal market experienced a significant resurgence during 2021. The improved market conditions and a 17.5% increase in sales volumes, drove an increase in revenue for the period of 117%. The positive impact of improved market conditions was partially offset by a dramatic rise in bulk cargo shipping costs. The shipping market was extremely tight during the year due to a strong recovery in demand for all commodities, both hard and soft, and a lack of new fleet builds. The net result was an effective doubling of seaborne coal transportation costs (from c. A$27 (US$20)/t in 2020 to c. A$53 (US$$40)/t in 2021), which directly affected the net price achieved by TIG for its products. During 2021 TIG built on the previous year’s operational improvements to drive increased mining volumes and significant improvements in port operations. Our pre-season dredging efforts and intra-season maintenance program, especially with respect to the main conveyor, combined with the increased experience of our barge crews enabled a 21.8% increase in trans-shipment volumes to 960kt, a record for the Beringovsky port. Trans-shipment costs per tonne decreased by 5%, from A$6.95/t to A$6.65/t. With the stripping ratio decreasing from 6.1 bcm/t in 2020 to 4 bcm/t in 2021, TIG managed to decrease mining costs from A$43.68/t (US$31.57/t) in 2020 to A$41.58/t (US$30.43/t). The primary challenge faced during the year related to supply chain logistics. TIG ships the vast majority of its materials and equipment from Vladivostok to Beringovsky on Russian domestic cargo vessels. A number of factors combined during the 2021 shipping season which resulted in a shortage of domestic shipping capacity available to the Company. These factors include some vessels coming back online after off-season maintenance in Chinese wharfs, due mostly to COVID-related restrictions, increased overall demand due to increased investment from multiple commodity producers in the Russian Far East and some pent-up demand related to shipments that were delayed in the previous year, again mostly due to COVID-related issues. As a result of the shortage in domestic shipping capacity, several shipments of equipment and supplies to Beringovsky experienced significantdelay. This caused a knock-on effect on CHPP construction and required TIG to significantly increase air cargo deliveries to Beringovsky in order to partially mitigate construction delays. 9 27 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 4. Review of operations (continued) Operating Performance (continued) The combined effect of above factors resulted in a positive gross margin of A$44.546 million for the year ended 31 December 2021 (2020: A$(0.327) million). The average margin per tonne of coal sold during the year ended 31 December 2021 was A$48.90/t (US$35.78/t) (2020: A$(0.42/t) (US$(0.31/t))), the weighted average FOB sales price per tonne (“FOB/t”) being A$105.79/t (US$77.41/t) (2020: A$53.30/t (US$38.53/t)). Significant investments in coal processing, mining and port assets totalling A$27.384 million during the year ended 31 December 2021 included: ➢ CHPP equipment ➢ CHPP-related civil works, primarily for winterization & power supply; ➢ Additional mining equipment both to replace aging equipment and to increase capacity; and ➢ Acquisition of additional 500t barge During 2021, TIG also began re-assessing supply chain challenges which it faced during the year and which will likely continue into 2022 and potentially beyond. In addition to issues related to domestic shipping capacity to transport supplies to Beringovsky as discussed above, lead times for purchasing mining equipment and some parts have also increased. These issues have affected numerous companies globally. The Company is addressing these issues by improving coordination with our key business partners, placing orders earlier than in prior periods and expanding our logistics footprint in Vladivostok. Financial Position Cash balances The Group’s cash balance increased by A$14.632 million over the year to A$33.511 million at 31 December 2021. This increase arose primarily from operating cash inflows and from the December 2020 Entitlement Offer (“2020 Entitlement Offer”), offset by further investment in the Company’s mining, processing and logistics infrastructure. Inventory on hand The carrying amount of the Group’s inventories on hand at 31 December 2021 is A$48.235 million (31 December 2020: A$23.129 million), including A$18.902 million of coal stocks, A$8.159 million in fuel and oils and A$21.174 million of other consumables. Fuel inventory increased by A$6.788 million primarily due to changing fuel suppliers. In the previous year, TIG purchased fuel from a state-owned wholesale supplier which held the fuel on its balance sheet and sold it to TIG as needed. Pursuant to the terms of the most recent fuel supply contract, TIG acquired the fuel upfront. The increase in consumables was partially driven by the purchase of magnetite and flocculants. 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. As a result of a significant increase in realisable prices for thermal coal a previous write-down to net realisable value of coal stockpiled at the interim coal stockpile amounting to A$2.963 million was reversed. Non-current assets The Company performs a bi-annual review for the existence of conditions indicating either the necessity to perform an impairment review or to consider the necessity to reverse previously recognised write-downs. Refer to Note 9 to the consolidated financial statements for further details. Two CAT 740B dump trucks, two scanias, a crusher, an excavator, a snow removal machine, and telecommunications equipment with a carrying value of A$0.235 million were written off during the year ended 31 December 2021 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 2020: а CAT D10 bulldozer with the carrying value of A$0.254 million was written off). Leases During the year ended 31 December 2021, the Group concluded lease agreements for additional mining and haulage equipment. The Group recognised a right-of-use asset of A$11.834 million and a corresponding lease liability, after advance payments of A41.924 million, of A$9.910 million with respect to these lease arrangements. 28 10 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 4. Review of operations (continued) Financial Position (continued) 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 agreements at 31 December 2021, the Group recognized an increase in the royalty liability of A$0.354 million, of which A$0.189 million relates to changes arising from the passage of time and changes in the assumptions, A$1.110 million relates to changes in foreign exchange rates, offset by payments of A$0.945 payments. As at 31 December 2021 the provision amounted to A$18.418 million (At 31 December 2020: A$18.063 million). Refer to Note 21 to the consolidated financial statements for further details. Share Capital The 2020 Entitlement Offer closed on 14 January 2021, as a result of which the Group raised A$43.512 million. The Institutional entitlement offer closed on 17 December 2020 raising gross proceeds of approximately A$17.151 million with the Company’s largest shareholder Dr. Bruce Gray taking up his full entitlement. The remaining A$26.361 million was raised in January 2021. The retail component of the offer was completed on 4 January 2021 with very good support from a number of shareholders taking up full and partial entitlements. 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%. Options During the year ended 31 December 2021, no options were granted, and 1,905,000 options lapsed or were forfeited and have been removed from the Company’s option register. Total number of options as at 31 December 2021 is 8,002,000. Significant Business Risks The Group’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. Country Risk TIG’s projects are located in Russia. Operating in this jurisdiction may expose TIG to a range of significant country specifi c 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. During the course of 2021, public statements made by representatives of the governments of the United States, various European countries and the Russian Federation have led to a broad perception that relations between the United States and various European countries, on the one hand, and the Russian Federation, on the other, have deteriorated with both the United States and European countries making public threats to enact further economic sanctions against the Russian Federation. The threatened economic sanctions vary but have included the potential for restrictions on the export to the Russian Federation of some types of technology, the ability of Russian banks to utilize the SWIFT payments system for international payments as well as sanctions specific to Russian banks. It is not clear to what extent any additional sanctions would impact the Group’s business and operations. 11 29 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 4. Review of operations (continued) COVID-19 Pandemic The COVID-19 pandemic has made a profound impact on global economic activity. To a large degree, the global economy experienced a significant recovery during 2021, and this recovery, in part, led to a sharp rebound in demand for both metallurgical and thermal coal and, consequently, a substantial increase in coal prices. Mutations of the COVID-19 virus have been observed, but preliminary indications, particularly with respect to what is referred to as the OMICRON variant of COVID-19, are that virus has become less threatening than previously. Furthermore, vaccines which at least appear to mitigate the severity of symptoms on those infected have been broadly distributed in large parts of the world. Many countries have begun to relax restrictions on economic activity initially put in place to mitigate the impact of the pandemic, but it is too early to assess how the pandemic will continue to evolve and how it may impact TIG’s business going forward. 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 announced the results of a new JORC report with respect to Amaam North – Project F. Compared to the previously reported coal reserves 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 further developing and constructing Amaam North (including the CHPP enhancement) 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. 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: • Political Risks: As discussed above, the relationship between the Unites States and various European countries, on the one hand, and the Russian Federation, on the other, are broadly perceived to have deteriorated over the past year with the deterioration focussing on an array of issues related to the Ukraine and security concerns voiced by the Russian Federation. As a result of these issues, the Russian Federation could be subject to more restrictive economic sanctions enacted by the United States and/or various European countries. It is not clear to what extent, any additional sanctions would impact the Group’s business and operations. 30 12 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 4. Review of operations (continued) • 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. Refer below for further details. Climate-related risks TIG identifies the need to address climate-related risks as integral to the achieving the Group’s key objectives and continues to develop its assessment of the potential impact of climate change and the transition to a low carbon economy on its operations over the short, medium, and long-term perspectives. TIG’s current climate change approach focuses on supporting emissions reductions, assessing the impact on our business of evolving global regulatory frameworks and managing climate-related risks and opportunities. TIG divides climate-related risks into two major categories: risks related to the transition to a lower-carbon economy and risks related to the physical impacts of climate change. Transition risks arise from policy, regulatory, legal, technological, market and other responses to the challenges posed by climate change and the transition to a low carbon economy. Below are the examples of the key identified transitional risks: • Legislative and policy changes focusing on climate change may impact TIG’s ability to operate and/or extend the life of existing mining assets as well as develop new mines; • Changes in government policy relating to either coal consumption or energy generation, such as introduction of new and/or more stringent carbon pricing mechanisms in Russia, and/or the Company’s key export markets may reduce the cost competitiveness of coal as an energy source; • Changes in the longer-term global coal demand outlook driven by the transition to a lower carbon economy and substitution of thermal coal as an energy source could have an impact on the Company’s future coal revenues and the recoverability of undeveloped coal reserves. • Climate related considerations of capital providers could limit access to capital and insurance markets significantly • increasing the cost of capital; Failure to achieve and maintain acceptance on climate related issues may lead to impaired business reputation and stakeholder exclusion. Physical risks refer to acute risks that are event-driven, including increased severity of extreme weather events, and chronic risks resulting from longer-term changes in climate patterns that potentially could have material impact on the Company’s operations. As an example, a sharp drop in overall temperatures could shorten TIG’s port’s navigational season and affect loading rates, while global warming of the ocean waters could on the contrary prolong the shipping season creating additional opportunity to maximize loading in Beringovsky Port. There is not enough data currently to determine and assess the impact of physical risks on TIG’s operations. TIG’s Board of Directors and management take into account climate risks when discussing strategic initiatives and believe that there is also opportunity for TIG to play a positive and effective role during transition to a low carbon economy. Initiatives to reduce TIG’s carbon footprint include optimisation of fuel use and electricity consumption, investigating technologies that would improve energy efficiency of TIG’s operations, including renewable energy sources, and commissioning CHPP that will significantly decrease the share of thermal coal in TIG’s product mix. 13 31 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 4. Review of operations (continued) Capital Management The nature of the Group’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 Group, 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 Group’s expected development levels. The Group had cash balances of A$33.511 million at 31 December 2021. Directors have concluded that cash balances at year end provide TIG with sufficient liquidity, given projected expenditures during the first six months of 2022 and anticipated sales arrangements. 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. 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. There is a risk that TIG may not be able to complete all drilling requirements due to equipment availability, delays caused by suppliers or contractors or weather. 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 year ended 31 December 2021 not otherwise reflected in the accompanying consolidated financial statements. 6. Events subsequent to reporting date In January 2022, the Company entered into purchase agreements amounting to A$9.638 million for the delivery of mining equipment during the first half of 2022. 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. 32 14 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 8. Likely developments TIG expects to complete commissioning procedures and begin processing coal during the March quarter 2022. Ongoing enhancements of port, road and other mine infrastructure will continue during 2022. The Group will place an emphasis on progressing exploration and appraisal activities at both Amaam and Amaam North. 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 D Swan M Jakeman 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 2021, there were no options issued and 1,905,000 options lapsed, bringing options issued over ordinary shares in the Company to 8,002,000 at 31 December 2021 (For the year ended 31 December 2020: no options issued and 6,976,000 options lapsed and 11,463,000 options forfeited, thus bringing the options issued over ordinary shares in the Company to 9,907,000). 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. 15 33 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 12. Remuneration report – audited 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 2021. (a) Details of key management personnel Name Directors Craig Wiggill Bruce Gray Owen Hegarty Valery Doronin 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 27 April 2021 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 14 April 2021 Tagir Sitdekov resigned as Non – Executive Director of The Company. On 27 April 2021 Valery Doronin was appointed as Non – Executive director of the Company. 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. Executives There were no changes to Executives during 2021 and 2020. 34 16 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 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. 2021 2020 2019 2018 2017 Net profit/(loss) attributable to equity holders of the parent (A$ million) $37.923 $(15.616) $(18.715) $10.959 $(6.213) Closing share price (A$) $0.02 $0.01 $0.01 $0.04 $0.057 (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 which was effective before 2021, employees, at the discretion of the Board, are offered options over ordinary shares in the Company under the Company’s Option Plan. In 2021 the Company approved new LTI program. The Program establishes a range of potential bonus payouts to the CEO, COO and CFO in 2024 in the event that earnings and environmental, social and corporate governance (“ESG”) targets for the preceding three years were met. The earnings component and ESG component are weighted 75% and 25%, respectively. The earnings component is aggregated earnings before taxes, depreciation & amortisation (“AEBTDA”). AEBTDA differs from the commonly-used metric of EBITDA in that it is aggregated over three years and interest expenses are included. The target AEBTDA and the level required to achieve maximum bonus for the earnings component of the LTIP are US$70.8 million and US$100.8 million, respectively. The ESG component is at the discretion of TIG’s Board of Directors and will be based on the Directors’ assessment of the degree to which the Group’s ESG goals were met. The target and maximum potential bonus payouts equal, respectively, 2.5 times and 5 times average annual base pay. 17 35 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 12. (e) Remuneration report – audited (continued) Remuneration policy and structure for senior executives (continued) 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. 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 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 executive, 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 both STI and LTI programmes and participation, where eligible, in the Company Option Plan under the LTI Program. The maximum bonus payable under the STI programme is up to 128% of total remuneration for CEO and 75% for CFO and the GM Operations. 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 2021, 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$20,000 per annum is also payable to the Director who performs the duties of Chairman of the Audit, Risk and Compliance Committee. With the exception of the independent Chairman and Chairman of the Audit, Risk and Compliance Committee, all directors waived their director fee entitlements for the year ended 31 December 2021. 36 18 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 12. (h) Remuneration report – audited (continued) Details of the remuneration of the Group’s key management personnel Details of the nature and amount of each major element of remuneration of each Director of the Company, and the key management personnel (as defined in AASB 124 Related Party Disclosures) are set out in the following tables. Short – term Post- employment Cash Salary and fees A$ Non- Monetary Benefits (1) A$ STI bonus (2) A$ Super- annuation A$ LTI (3) A$ Total Remun- eration A$ Proportion of remun- eration comprising options % Name 2021 Non-executive Directors C Wiggill B Gray O Hegarty V Doronin 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 100,000 - - - - 53,270 153,270 422,691 263,291 234,778 114,164 354,366 1,389,290 - - - - - - - - - - - - - - - - - - 9,500 - - - - 5,060 14,560 - - - - - - 109,500 - - - - 58,330 167,830 352,292 126,331 68,026 - 136,455 683,104 - - - - - - 346,118 1,121,101 202,312 - - 218,525 591,934 302,804 114,164 709,346 766,955 2,839,349 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 1,542,560 - 683,104 14,560 766,955 3,007,179 Includes the value of fringe benefits and other allowances. In respect of 2021. 1. 2. 3. During 2020 all the options granted under the previous LTI programme vested. 2021 remuneration includes cash bonuses accrued under new LTI program. During the year ended 31 December 2021, other than the remuneration detailed above, key management personnel were neither entitled to nor did they receive loans or other benefits. 19 37 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 12. (h) 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 % 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% Name 2020 Non-executive Directors C Wiggill B Gray O Hegarty R Morgan T Sitdekov D Swan Sub total D Bender S Southwood D Forsyth S Efanov Sub total Total key management Personnel Other key management personnel D Gavrilin 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 c ompensation 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. 38 20 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 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 2021, 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 2021 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 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 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 % 37.70 44.48 77.53 100.00 49.96 75.64 76.63 77.21 97.59 70.10 31.43 21.34 22.47 - 19.23 24.36 23.37 20.00 - 28.00 30.87 34.18 - - 30.81 - - 2.79 2.41 1.90 62.30 55.52 22.47 - 50.04 24.36 23.37 22.79 2.41 29.9 1 For LTI provided 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. 21 39 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 12. (j) Remuneration report – audited (continued) Analysis of bonuses included in remuneration During and in respect of the years ended 31 December 2021 and 2020, there were A$683,104 and A$405,526, respectively, in short- term incentive (STI) cash bonuses awarded as remuneration to key management personnel. (k) Share Options granted as remuneration During the year ended 31 December 2021 and 2020, there were no options granted to key management personnel. Further details of the Option Plan are included in Note 24 to the consolidated financial statements. During the year ended 31 December 2021, no options over ordinary shares vested (For the year ended 31 December 2020 5,281,000 options over ordinary shares vested) as follows: Number of options vested during year Grant date Fair value of option at grant date A$ Exercise price per option A$ Vesting date Start Vesting date finish Expiry date 2020 Other key management personnel 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 40 22 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 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. Grante d as remu n- eratio n Exerci -sed during year Forfeited/ Lapsed during year Held at 31 December Vested at 31 December Total Exercisable Not exer- cisabl e Name Held at 1 January 2021 Non-executive Directors C Wiggill B Gray O Hegarty V Doronin T Sitdekov D Swan - - - - - - Other key management personnel - - 1,906,000 2,475,000 3,621,000 D Gavrilin D Bender D Forsyth S Southwood S Efanov 2020 Non-executive Directors C Wiggill B Gray O Hegarty R Morgan T Sitdekov D Swan 1,500,000 - 1,500,000 500,000 500,000 - Other key management personnel D Gavrilin D Bender D Forsyth S Southwood S Efanov - - 2,670,000 3,975,000 3,621,000 - - - - - - - - - - - (1,500,000) - (1,500,000) (500,000) (500,000) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 1,906,000 2,475,000 3,621,000 1,906,000 2,475,000 3,621,000 1,906,000 2,475,000 3,621,000 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (764,000) (1,500,000) - 1,906,000 2,475,000 3,621,000 1,906,000 2,475,000 3,621,000 1,906,000 2,475,000 3,621,000 23 41 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 12. Remuneration report – audited (continued) (m) Analysis of Movement in Share Options, by value The movement during the reporting period, by value, of options over ordinary shares in the Company held by each key management person. Value of options granted during year A$ Value of options exercised during year A$ Value of options lapsed during year A$ Remuneration consisting of options for the year % 2021 Non-executive Directors C Wiggill B Gray O Hegarty V Doronin T Sitdekov D Swan Other Key Management Personnel D Forsyth S Southwood S Efanov 2020 Non-executive Directors C Wiggill B Gray O Hegarty R Morgan T Sitdekov D Swan Other Key Management Personnel D Forsyth S Southwood S Efanov - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (38,500) - (38,500) (17,500) (17,500) - (42,020) (82,500) - 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.41% 2.79% 1.90% For details on the valuation of options, including models and assumptions used, refer to Note 24 to the consolidated financial statements. (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 Executives D Forsyth S Southwood S Efanov 648,000 1,258,000 842,000 1,633,000 1,231,000 2,390,000 18/10/17 18/10/17 18/10/17 18/10/17 18/10/17 18/10/17 - - - - - - - - - - - - 18/10/19 18/10/20 18/10/19 18/10/20 18/10/19 18/10/20 18/10/22 18/10/22 18/10/22 18/10/22 18/10/22 18/10/22 42 24 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 13. Indemnification and insurance of Officers and Auditors 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’. 16. Proceedings on behalf of the Company No person has applied for leave of any Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. 17. Auditor’s Independence Declaration The auditor’s independence declaration is included on page 78 and forms part of the Directors’ report for the year ended 31 December 2021. This report is made in accordance with a resolution of the Directors Dated at Melbourne this 24th day of February 2022. Signed in accordance with a resolution of the Directors: __________________________________ Craig Wiggill Director 25 43 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 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 policies and whether they are sufficient given the Company’s size and nature of operations. This Corporate Governance Statement is current as at 25 February 2022 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 2021 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. 44 26 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 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 four of the five Directors are independent: Craig Wiggill, David Swan, Owen Hegarty and Mitch Jakeman. 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. 27 45 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 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 di scussions 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 oper ations, 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 last performance evaluation of the Board, its committees and the Directors was performed in 2021. 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. 46 28 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 Corporate Governance Statement (continued) Principle 3: Promote ethical and responsible decision making (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 2021, women comprised 19% (31 December 2020: 15%) 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 Fellow of the Institute of Chartered Accountants in England and Wales (‘ICAEW’) and relevant experience gained through being a current and past non-executive director and audit committee chairman of London AIM Listed companies. 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 Mitch Jakeman holds a BE Mining Degree from the University of New South Wales, a Diploma in Mineral Economics from Macquarie University and ME (Hons) Mining under Stored Waters and Dams from the University of Wollongong. Mr Craig Wiggill has extensive experience in the global mining industry including over 30 years in the coal sector, the majority of his experience being within the Anglo-American Plc group. 29 47 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 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 2021, 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 report ing risks for the financial year ended 31 December 2021. 48 30 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 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 2021. 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. 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. 31 49 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Directors’ report (continued) For the year ended 31 December 2021 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 Financial 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. 50 32 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Consolidated statement of comprehensive income For the year ended 31 December 2021 Note 31 December 2021 A$’000 31 December 2020 A$’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 Change in provisions for expected credit losses Write off of property, plant and equipment Royalty expense Other income Results from operating activities Net foreign exchange loss Finance costs Net finance costs Profit/(Loss) before income tax Income tax expense Net Profit/(Loss) Other comprehensive income/ (loss) Items that may subsequently be reclassified to the profit or loss Foreign currency translation differences for foreign operations Total comprehensive income/ (loss) for the period Net Profit/ (Loss) is attributable to: Owners of the Company Non-controlling interest Net Profit/ (Loss) for the period Total comprehensive income/(loss) attributable to: Owners of the Company Non-controlling interest Total comprehensive income/(loss) for the period Earnings/ (Loss) per share (cents per share) basic diluted 7 8 24 15 16 21 10 11 11 103,944 (37,880) (21,518) 44,546 (7,054) - (106) 2,963 (306) (235) (189) 933 40,552 (697) (1,899) (2,596) 37,956 (54) 37,902 4,612 42,514 37,923 (21) 37,902 42,535 (21) 42,514 0.29 0.29 47,889 (33,850) (14,366) (327) (6,027) (52) (159) - - (254) (5,690) 324 (12,185) (655) (2,785) (3,440) (15,625) (17) (15,642) (15,435) (31,077) (15,616) (26) (15,642) (31,051) (26) (31,077) (0.22) (0.22) The notes on pages 37 to 76 are an integral part of these consolidated financial statements. 33 51 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Consolidated statement of financial position As at 31 December 2021 Note 31 December 2021 A$’000 31 December 2020 A$’000 Current Assets Cash and cash equivalents Trade and other receivables Inventories Prepayments Total current assets Non-current assets Inventories Property, plant and equipment Total non-current assets Total assets Current Liabilities Trade and other payables 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 33,511 17,072 46,055 2,421 99,059 2,180 64,470 66,650 165,709 7,483 5,206 - 1,439 667 3,678 18,473 137 9,842 16,979 1,022 562 28,542 47,015 118,694 272,980 14,889 (149,393) 138,476 (19,782) 118,694 18,879 9,844 20,275 1,363 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 49,794 246,594 10,277 (187,316) 69,555 (19,761) 49,794 The notes on pages 37 to 76 are an integral part of these consolidated financial statements. 52 34 Annual Report 2021Tigers Realm Coal 5 3 0 0 0 ’ $ A l a t o T 0 0 0 ’ $ A t s e r e t n I 0 0 0 ’ $ A l a t o T g n i l l o r t n o c - n o N r e h t O e v r e s e R 0 0 0 ’ $ A 0 0 0 ’ $ A e v r e s e R e v r e s e R 0 0 0 ’ $ A ) s e s s o L 0 0 0 ’ $ A n o i t a l s n a r T s t n e m y a P d e t a l u m u c c A ( e r a h S l a t i p a C 0 0 0 ’ $ A e t o N n g i e r o F y c n e r r u C d e s a b e r a h S 3 3 3 , 7 ) 5 3 7 , 9 1 ( 8 6 0 , 7 2 9 0 3 , 6 0 5 0 , 2 1 1 0 3 , 7 ) 0 0 7 , 1 7 1 ( 8 0 1 , 3 7 1 0 2 0 2 y r a u n a J 1 t a s a e c n a l a B ) 2 4 6 , 5 1 ( ) 5 3 4 , 5 1 ( ) 7 7 0 , 1 3 ( 2 5 0 8 3 , 5 7 ) 4 9 8 , 1 ( ) 6 2 ( - ) 6 2 ( - ) 6 1 6 , 5 1 ( ) 5 3 4 , 5 1 ( ) 1 5 0 , 1 3 ( 2 5 0 8 3 , 5 7 ) 4 9 8 , 1 ( - - - - - ) 5 3 4 , 5 1 ( ) 5 3 4 , 5 1 ( - - - ) 6 1 6 , 5 1 ( - ) 6 1 6 , 5 1 ( - 2 5 - - - - - 0 8 3 , 5 7 ) 4 9 8 , 1 ( 4 2 d o i r e p e h t r o f s s o l e v i s n e h e r p m o c l a t o T e m o c n i e v i s n e h e r p m o c r e h t O s s o l t e N s e r a h s y r a n i d r o f o e u s s I y t i u q e g n i s i a r f o s t s o C s t n e m y a p d e s a b e r a h S 4 9 7 , 9 4 ) 1 6 7 , 9 1 ( 5 5 5 , 9 6 9 0 3 , 6 ) 5 8 3 , 3 ( 3 5 3 , 7 ) 6 1 3 , 7 8 1 ( 4 9 5 , 6 4 2 1 2 0 2 y r a u n a J 1 t a e c n a l a B 2 1 6 , 4 2 0 9 , 7 3 4 1 5 , 2 4 ) 6 0 1 ( 2 9 4 , 6 2 - ) 1 2 ( ) 1 2 ( - 2 1 6 , 4 3 2 9 , 7 3 5 3 5 , 2 4 ) 6 0 1 ( 2 9 4 , 6 2 - - - - - - 2 1 6 , 4 2 1 6 , 4 - - - - - - - - - - 3 2 9 , 7 3 3 2 9 , 7 3 - - - ) 6 0 1 ( 2 9 4 , 6 2 d o i r e p e h t r o f e m o c n i e v i s n e h e r p m o c l a t o T e m o c n i e v i s n e h e r p m o c r e h t O t i f o r p t e N s e r a h s y r a n i d r o f o e u s s I y t i u q e g n i s i a r f o s t s o C 4 9 6 , 8 1 1 ) 2 8 7 , 9 1 ( 6 7 4 , 8 3 1 9 0 3 , 6 7 2 2 , 1 3 5 3 , 7 ) 3 9 3 , 9 4 1 ( 0 8 9 , 2 7 2 1 2 0 2 r e b m e c e D 1 3 t a e c n a l a B y t i u q e n i s e g n a h c f o t n e m e t a t s d e t a d i l o s n o C 1 2 0 2 r e b m e c e D 1 3 d e d n e r a e y e h t r o F d e t i m L i l a o C m l a e R s r e g i T . s t n e m e t a t s l a i c n a n i f d e t a d i l o s n o c e s e h t f o t r a p l a r g e t n i n a e r a 6 7 o t 7 3 s e g a p n o s e t o n e h T 53 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Consolidated statement of cash flows For the year ended 31 December 2021 Cash flows from operating activities Cash receipts from customers Cash paid to suppliers and employees Exploration and evaluation expenditure Interest and financing costs paid Royalties paid Income taxes paid Net cash used in operating activities Cash flows from investing activities Acquisition of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Repayment of lease liabilities Repayment of other financial liabilities 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 2021 A$’000 31 December 2020 A$’000 103,177 (76,926) (139) (1,858) (945) (105) 23,204 (26,242) (26,242) 25,513 (5,789) (650) (1,864) 17,210 14,172 18,879 460 33,511 47,792 (55,916) (85) (2,451) (330) (314) (11,304) (9,244) (9,244) 42,272 (3,870) (653) - 37,749 17,201 4,716 (3,038) 18,879 13 12 Non-cash operating/financing activities for the year ended 31 December 2021: Short-term incentive (“STI”) bonuses In March 2021, a portion of 2020 STI bonuses amounting to A$0.131 million was paid in TIG’s shares. Non-cash investing activities for the year ended 31 December 2021 and 2020: Leasing transactions During the year ended 31 December 2021, the Group concluded lease agreements in relation to various equipment (31 December 2020: the Group conclude a lease agreement with equipment vendor for the acquisition of 100kt barge). The additions to the property, plant & equipment under these arrangements were A$12.321 million (2020: A$0.319 million). 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, substantial shareholders of the Company, in the amount of A$14.776 million and A$13.138 million, respectively, were settled against the shares issued to them as part of the Entitlement Offer. The notes on pages 37 to 76 are an integral part of these consolidated financial statements. 54 36 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Consolidated statement of cash flows For the year ended 31 December 2021 Cash flows from operating activities Cash receipts from customers Cash paid to suppliers and employees Exploration and evaluation expenditure Interest and financing costs paid Royalties paid Income taxes paid Net cash used in operating activities Cash flows from investing activities Acquisition of property, plant and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Repayment of lease liabilities Repayment of other financial liabilities Repayment of borrowings Net cash generated by financing activities Net movement in cash and cash equivalents Cash and cash equivalents at beginning of the period Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the period Note 31 December 31 December 2021 A$’000 2020 A$’000 103,177 (76,926) (139) (1,858) (945) (105) 23,204 (26,242) (26,242) 25,513 (5,789) (650) (1,864) 17,210 14,172 18,879 460 33,511 47,792 (55,916) (85) (2,451) (330) (314) (11,304) (9,244) (9,244) 42,272 (3,870) (653) - 37,749 17,201 4,716 (3,038) 18,879 13 12 Non-cash operating/financing activities for the year ended 31 December 2021: Short-term incentive (“STI”) bonuses In March 2021, a portion of 2020 STI bonuses amounting to A$0.131 million was paid in TIG’s shares. Non-cash investing activities for the year ended 31 December 2021 and 2020: Leasing transactions During the year ended 31 December 2021, the Group concluded lease agreements in relation to various equipment (31 December 2020: the Group conclude a lease agreement with equipment vendor for the acquisition of 100kt barge). The additions to the property, plant & equipment under these arrangements were A$12.321 million (2020: A$0.319 million). Non-cash financing activities for the year ended 31 December 2020: Shareholder loans The notes on pages 37 to 76 are an integral part of these consolidated financial statements. Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 1. Reporting entity Tigers Realm Coal Limited (the “Company” or “TIG”) is a company domiciled in Australia. During the year ended 31 December 2021, the Company’s registered office was 151 Wellington Parade South, East Melbourne, 3002, Australia and its principal office during the period to 31 March 2021 was 12A Aviakonstruktora Mikoyana, Moscow, 125167, Russian Federation and starting from 1 April 2021, 37 Leningradskiy prospect, Moscow, 125167, Russian Federation. The consolidated financial statements as at and for the year ended 31 December 2021 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 2022. (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 21 – Royalty liability On 2 January 2020, the loans payable to BV Holding Limited and Dr B Gray, substantial 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 Entitlement Offer. 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 2021, the Group had a net profit of A$37.902 million (2020: net loss of A$15.642 million) and had net cash inflows from operating activities of A$23.204 million (2020: net cash outflows from operating activities of A$11.304 million). 36 37 55 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 Significant accounting policies (continued) (a) Going concern basis of accounting As at 31 December 2021, the Group had cash and cash equivalents of A$33.511 million (31 December 2020: A$18.879 million) and net current assets of A$80.874 million (31 December 2020 net current assets of A$39.281 million). Based on the Group’s cash flow 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 flow 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 quality of coal mined and processed 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, production and processing 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 commodity (specifically coal) prices and exchange rates. 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 contracted to date and forecast 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 forecast; • Commercial mining operations continue in line with expectations. 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 forecast; • Coal shipments have been forecasted 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. 56 38 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 Significant accounting policies (continued) (a) Going concern basis of accounting As at 31 December 2021, the Group had cash and cash equivalents of A$33.511 million (31 December 2020: A$18.879 million) and net current assets of A$80.874 million (31 December 2020 net current assets of A$39.281 million). Based on the Group’s cash flow 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 flow 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 quality of coal mined and processed 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, production and processing levels being achieved and implemented within the expected cost levels, • 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; structure and timing; and • Macroeconomic factors including commodity (specifically coal) prices and exchange rates. 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 contracted to date and forecast 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 forecast; • Commercial mining operations continue in line with expectations. 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 forecast; • Coal shipments have been forecasted 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. Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 3. (b) (ii) Significant accounting policies (continued) Basis of consolidation 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. (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. 38 39 57 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 3. Significant accounting policies (continued) (c) Foreign 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. (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. 58 40 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 3. Significant accounting policies (continued) (c) Foreign 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. (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. Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 3. Significant accounting policies (continued) (d) Financial instruments (i) Financial assets 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. (e) 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. 40 41 59 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 3. (ii) Significant accounting policies (continued) 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. 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. Amortisation (iv) (v) 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 r isk 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 finan cial 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. 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. 60 42 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 Significant accounting policies (continued) 3. (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. (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 r isk 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 finan cial 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. 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. Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 3. Significant accounting policies (continued) (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. (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. 42 43 61 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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 2021: AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2 The application of above amendment has had no impact on the Group’s consolidated financial statements. 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 2021 and have not been applied in preparing these consolidated financial statements. Standard/Interpretation AASB 2021-3 Amendments to Australian Accounting Standards – Covid-19- Related Rent Concessions beyond 30 June 2021 Effective for annual reporting periods beginning on or after Applicable to annual reporting periods beginning on or after 1 April 2021 AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an investor and its Associate or Joint Venture; AASB 2015-10 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128, AASB 2017-5 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections 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 AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting Policies and Definition of Accounting Estimates Applicable to annual reporting periods beginning on or after 1 January 2023 AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction 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 standards and amendments will have a material impact on the Group's consolidated financial statements. 62 44 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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 2021: The application of above amendment has had no impact on the Group’s consolidated financial statements. 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 2021 and have not been applied in preparing these consolidated financial statements. Standard/Interpretation AASB 2021-3 Amendments to Australian Accounting Standards – Covid-19- Related Rent Concessions beyond 30 June 2021 Effective for annual reporting periods beginning on or after Applicable to annual reporting periods beginning on or after 1 April 2021 AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an investor and its Associate or Joint Venture; AASB 2015-10 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128, AASB 2017-5 Amendments to beginning on or after 1 January 2022 Australian Accounting Standards – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections Applicable to annual reporting periods 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 Applicable to annual reporting periods Accounting Standards – Insurance Contracts 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 Applicable to annual reporting periods Australian Accounting Standards – Classification of Liabilities as Current or Non- beginning on or after 1 January 2023 current – Deferral of Effective Date AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Applicable to annual reporting periods Accounting Policies and Definition of Accounting Estimates beginning on or after 1 January 2023 AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to Assets and Liabilities arising from a Single Transaction 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 standards and amendments will have a material impact on the Group's consolidated financial statements. AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2 • 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). Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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. 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. 44 45 63 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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 2021, 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 2021 Revenue from the shipment and sale of coal Cost of coal sold Change in provisions for inventories Change in provisions for bad debt Exploration and evaluation expenses Royalty expense Finance costs Other segment expenses Segment result Segment assets Segment liabilities 31 December 2020 Revenue from the shipment and sale of coal Cost of coal sold 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$’000 Total A$’000 103,944 (59,398) 2,963 (306) (100) (189) (1,899) (1,889) 43,126 165,444 (46,888) 47,889 (48,216) (104) (5,690) (2,785) (1,856) (10,762) 85,643 (35,847) - - - - (6) - - (100) (106) 26 (127) - - (55) - - (76) (131) 30 (119) 103,944 (59,398) 2,963 (306) (106) (189) (1,899) (1,989) 43,020 165,470 (47,015) 47,889 (48,216) (159) (5,690) (2,785) (1,932) (10,893) 85,673 (35,966) - - - - - - - (5,064) (5,064) 239 - - - - - - (4,732) (4,732) 87 - 103,944 (59,398) 2,963 (306) (106) (189) (1,899) (7,053) 37,956 165,709 (47,015) 47,889 (48,216) (159) (5,690) (2,785) (6,664) (15,625) 85,760 (35,966) 64 46 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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. 2021 2020 Revenues A$’000 Non-current assets A$’000 Revenues A$’000 Non-current assets A$’000 101,965 1,979 103,944 - 66,650 66,650 43,188 4,701 47,889 - 35,399 35,399 Asia Russia Total Customer information Included in revenues from the sale and shipment of coal are revenues of A$92.351 million (2020: A$39.373 million) which arose from sales to major customers who individually contributed at least 10% of total revenues from sales and shipment of coal. Revenue 7. Revenue from thermal coal sales Revenue from semisoft coal sales Revenue from shipment of coal 31 December 2021 A$’000 31 December 2020 A$’000 78,119 18,253 7,572 103,944 28,101 13,204 6,584 47,889 Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 6. Segment reporting The Group has two reportable segments, as described below, which are the Group’s main mineral mining and exploration projects. The Group has identified these segments based on the internal reports used and reviewed by the Group’s Chief Executive Officer (the Chief Operating Decision Maker), in assessing performance and determining the allocation of resources. The accounting policies used by the Group in reporting segments internally are the same as the Group accounting policies. For the year ended 31 December 2021, the activities of the Group are managed in two reportable operating segments outlined below, consistent with how they were managed in the prior periods: Amaam North Project Amaam Project Other The Amaam North Project is located in the Bering Basin in the Chukotka province, Russia and consists of the Amaam North tenement. The Project also includes infrastructure assets associated with the Beringovsky Port and Coal Terminal. The Amaam Project is in the Bering Basin in the Chukotka province, Russia and consists of the Amaam tenement. Consists of corporate and office expenses primarily incurred at the Group’s Moscow and Melbourne offices. This is not a reportable segment. Management monitors the expenditure outlays of each segment for the purpose of cost control and making decisions about resource allocation. The Group’s administration and financing functions are managed on a group basis and are included in “Other”, which is not a reportable segment. Amaam North Project A$’000 Amaam Project A$’000 Total Reportable Segments A$’000 Other A$’000 Total A$’000 31 December 2021 Revenue from the shipment and sale of coal Cost of coal sold Change in provisions for inventories Change in provisions for bad debt Exploration and evaluation expenses Royalty expense Finance costs Other segment expenses Segment result Segment assets Segment liabilities 31 December 2020 Revenue from the shipment and sale of coal Cost of coal sold Exploration and evaluation expenses Royalty expense Finance costs Other segment expenses Segment result Segment assets Segment liabilities 103,944 (59,398) 2,963 (306) (100) (189) (1,899) (1,889) 43,126 165,444 (46,888) 47,889 (48,216) (104) (5,690) (2,785) (1,856) (10,762) 85,643 (35,847) - - - - - - - - - - (6) (100) (106) 26 (127) (55) (76) (131) 30 (119) 103,944 (59,398) 2,963 (306) (106) (189) (1,899) (1,989) 43,020 165,470 (47,015) 47,889 (48,216) (159) (5,690) (2,785) (1,932) (10,893) 85,673 (35,966) - - - - - - - - - - - - (5,064) (5,064) 239 - (4,732) (4,732) 87 - 103,944 (59,398) 2,963 (306) (106) (189) (1,899) (7,053) 37,956 165,709 (47,015) 47,889 (48,216) (159) (5,690) (2,785) (6,664) (15,625) 85,760 (35,966) 46 47 65 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 7. Revenue (continued) Recognition and measurement: Revenue 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 Group can identify each party’s rights regarding the goods or services to be transferred; (c) the Group 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 Group 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 Group 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 Group 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 Group 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 o n 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 Beringov sky 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 Group cannot objectively determine that the coal provided to the customer is in accordance with the agreed-upon specifications in the contract, the Group 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 Accounting and audit fees Taxes and charges Insurance ASX listing fees Contractors and consultants’ fees Other 66 31 December 2021 A$’000 31 December 2020 A$’000 (3,800) (423) (410) (382) (253) (237) (204) (1,345) (7,054) (3,152) (527) (283) (214) (119) (112) (309) (1,311) (6,027) 48 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 7. Revenue (continued) Recognition and measurement: Revenue 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 Group can identify each party’s rights regarding the goods or services to be transferred; (c) the Group 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 (e) it is probable that the Group 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 Group 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 Group 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 the contract); and customer. Revenue is recognised when (or as) the Group 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 o n 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 Beringov sky 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 Group cannot objectively determine that the coal provided to the customer is in accordance with the agreed-upon specifications in the contract, the Group 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 Accounting and audit fees Taxes and charges Insurance ASX listing fees Contractors and consultants’ fees Other 31 December 31 December 2021 A$’000 2020 A$’000 (3,800) (423) (410) (382) (253) (237) (204) (1,345) (7,054) (3,152) (527) (283) (214) (119) (112) (309) (1,311) (6,027) 48 Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 9. Carrying value of non-current assets Amaam North Project CGU During the year ended 31 December 2021, the carrying value of non-current assets of Amaam North Project CGU, net of accumulated depreciation, increased by A$31.925 million to A$64.470 million (As of 31 December 2020 A$32.545 million) (refer to Note 16 for details). As at 31 December 2021, the Group concluded that due to: • • Production and sales volumes achieved to date; and Progress in the development of the CHPP project during 2021 there is no necessity to recognise further impairment losses for the Amaam North Project CGU. Impairment recognised in prior periods primarily relates to the mining equipment which is either written-off or fully depreciated, therefore there is no necessity for the reversal of impairment losses recognised in prior periods. Amaam Project CGU During the year ended 31 December 2021, 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 2021. As the development of the Amaam Project is not expected in the foreseeable future, as at 31 December 2021, 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. F or 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 t o 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 impair ment 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 b asis. 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. 49 67 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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 2021 and 2020 is set out below: Income/(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 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 expense/(benefit) Total income tax expense Deferred tax assets have not been recognised in respect to following items: Tax losses Other deductible temporary differences 31 December 2021 A$’000 31 December 2020 A$’000 37,956 11,387 (12,005) (20) 160 532 54 (15,625) (4,688) 1,792 670 1,991 252 17 31 December 2021 A$’000 31 December 2020 A$’000 54 - 54 17 - 17 31 December 2021 A$’000 31 December 2020 A$’000 128,606 7,487 136,093 124,843 7,463 132,306 As at 31 December 2021 and 2020, no deferred tax assets have been recognised for carried forward tax losses and other deductible temporary differences as it is not probable that future taxable profit and/or capital gains will be available against which the Group can utilise the benefits. Tax losses do not expire under current tax legislation of both Australia and the Russian Federation. 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. 68 50 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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 fin ancial 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 offse t 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 n et 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 tha t it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred ta x 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. Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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 2021 and 2020 is set out below: 31 December 31 December 2021 A$’000 2020 A$’000 Income/(Loss) before tax Income tax benefit using the domestic corporation tax rate of 30% Changes in income tax expense due to: Effect of different tax rates of subsidiaries operating in foreign jurisdictions agreement liability Non-deductible loss resulting from change in royalty Non-deductible expenses/(non-assessable income) Current period tax losses for which no deferred tax asset was recognised Total income tax expense Current tax expense Deferred tax expense/(benefit) Total income tax expense Deferred tax assets have not been recognised in respect to following items: 37,956 11,387 (12,005) (20) 160 532 54 54 - 54 (15,625) (4,688) 1,792 670 1,991 252 17 17 - 17 31 December 31 December 2021 A$’000 2020 A$’000 31 December 31 December 2021 A$’000 2020 A$’000 128,606 7,487 136,093 124,843 7,463 132,306 Tax losses Other deductible temporary differences As at 31 December 2021 and 2020, no deferred tax assets have been recognised for carried forward tax losses and other deductible temporary differences as it is not probable that future taxable profit and/or capital gains will be available against which the Group can utilise the benefits. Tax losses do not expire under current tax legislation of both Australia and the Russian Federation. Income tax expense comprises current and deferred tax. Current and deferred tax is recognised in profit or loss except to the extent Recognition and measurement: Income taxes that it relates to a business combination, or items recognised directly in equity, or in comprehensive income. 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 69 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 11. Earnings/(Loss) per share Earnings/(Loss) per share Basic earnings/(loss) per share – cents Diluted earnings/(loss) per share – cents 31 December 2021 Cents 31 December 2020 Cents a b 0.29 0.29 (0.22) (0.22) Basic earnings/(loss) per share (a) The calculation of basic loss per share at 31 December 2021 was based on the profit attributable to ordinary equity holders of the Company of A$37.923 million (At 31 December 2020: loss of A$15.616 million) and a weighted average number of ordinary shares outstanding during the period ended 31 December 2021 of 12,947,151,981 (For the year ended 31 December 2020: 6,967,457,740). Diluted profit/(loss) per share (b) The calculation of diluted profit/(loss) per share at 31 December 2021 and 2020 is the same as basic profit/(loss) per share. As at 31 December 2021, the Company had 8,002,000 outstanding options over ordinary shares (31 December 2020: 9,907,000 options), which have been excluded from the calculation of diluted earnings per share because they are anti-dilutive for the reporting period. 12. Cash and cash equivalents Bank balances Cash and cash equivalents All cash and cash equivalents are available for use by the Group. 31 December 2021 A$’000 31 December 2020 A$’000 33,511 33,511 18,879 18,879 13. Reconciliation of profit/(loss) for the year to net cash flows from operating activities Cash flows from operating activities Profit/ (Loss) for the period Adjustments for: Foreign exchange loss Share based payments Royalty expense Depreciation expense Change in provisions for inventories Change in provisions for expected credit losses Write off of property, plant and equipment Income tax expense Movements in working capital Change in trade and other receivables Change in inventory Change in prepayments Change in employee provisions Change in trade and other payables Net cash generated/(used) in operating activities 70 31 December 2021 A$’000 31 December 2020 A$’000 24 21 10 37,902 697 - 189 6,300 (2,963) 306 235 54 42,720 (1,013) (20,884) (1,742) 2,170 1,953 23,204 (15,642) 655 52 5,690 8,350 - - 254 17 (624) (2,040) (1,083) 869 (470) (7,956) (11,304) 52 Annual Report 2021Tigers Realm Coal The calculation of diluted profit/(loss) per share at 31 December 2021 and 2020 is the same as basic profit/(loss) per share. As at 31 December 2021, the Company had 8,002,000 outstanding options over ordinary shares (31 December 2020: 9,907,000 options), which have been excluded from the calculation of diluted earnings per share because they are anti-dilutive for the Bank balances Cash and cash equivalents All cash and cash equivalents are available for use by the Group. 13. Reconciliation of profit/(loss) for the year to net cash flows from operating activities Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 11. Earnings/(Loss) per share Earnings/(Loss) per share Basic earnings/(loss) per share – cents Diluted earnings/(loss) per share – cents (a) Basic earnings/(loss) per share 6,967,457,740). (b) Diluted profit/(loss) per share reporting period. 12. Cash and cash equivalents Cash flows from operating activities Profit/ (Loss) for the period Adjustments for: Foreign exchange loss Share based payments Royalty expense Depreciation expense Change in provisions for inventories Change in provisions for expected credit losses Write off of property, plant and equipment Income tax expense Movements in working capital Change in trade and other receivables Change in inventory Change in prepayments Change in employee provisions Change in trade and other payables Net cash generated/(used) in operating activities 31 December 31 December 2021 Cents 0.29 0.29 2020 Cents (0.22) (0.22) a b 31 December 31 December 2021 A$’000 2020 A$’000 33,511 33,511 18,879 18,879 31 December 31 December 2021 A$’000 2020 A$’000 (15,642) 24 21 10 37,902 697 - 189 6,300 (2,963) 306 235 54 42,720 (1,013) (20,884) (1,742) 2,170 1,953 23,204 655 52 5,690 8,350 - - 254 17 (624) (2,040) (1,083) 869 (470) (7,956) (11,304) 52 Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 14. Trade and other receivables VAT and GST receivable Trade and other receivables Provision for expected credit losses 31 December 2021 A$’000 31 December 2020 A$’000 10,795 6,583 (306) 17,072 3,956 5,888 - 9,844 The calculation of basic loss per share at 31 December 2021 was based on the profit attributable to ordinary equity holders of the Company of A$37.923 million (At 31 December 2020: loss of A$15.616 million) and a weighted average number of ordinary shares outstanding during the period ended 31 December 2021 of 12,947,151,981 (For the year ended 31 December 2020: As of 31 December 2021 there was A$0.306 million provision for expected credit losses. (At 31 December 2020: A$Nil). In January 2022 TIG received A$5,291 million of past due receivables. 15. Inventories Coal inventories at cost (At 31 December 2020: net of provision of A$2.963 million for recognition of inventories at the lower of cost and their net realisable value) Fuel at cost Other consumables: net of provisions of A$0.314 million (At 31 December 2020 A$0.298 million) Current Non-current Total 31 December 2021 A$’000 31 December 2020 A$’000 18,902 8,159 21,174 48,235 46,055 2,180 48,235 11,095 1,370 10,664 23,129 20,275 2,854 23,129 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. In 2021, following a significant increase in realisable prices for coal, a previous write- down to net realisable value of coal stockpiled at the interim coal stockpile amounting to A$2.963 million was reversed. Non-current inventories represented by coal inventories which are not expected to be realized within the next twelve-month period from the reporting date. Inventories are valued at the lower of cost and net realisable value and upon initial recognition on the weighted average cos t basis. Recognition and measurement: Inventories 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. The amount of inventories recognised as an expense during the year ended 31 December 2021 was A$38.556 million (2020: A$34.376 million). 53 71 Annual Report 2021Tigers Realm Coal 4 5 - 0 6 6 , 9 ) 1 8 1 ( 2 1 3 , 5 5 1 2 0 , 1 5 7 7 6 , 6 3 ) 0 7 7 , 3 1 ( - ) 1 9 ( 2 6 7 , 3 9 6 3 , 1 9 3 ) 4 5 2 ( 2 4 4 , 4 ) 5 3 4 , 8 ( ) 2 1 2 , 4 1 ( 6 2 ) 0 3 0 , 7 ( ) 6 7 4 , 8 1 ( ) 5 3 2 ( ) 4 8 1 , 1 ( ) 9 9 8 , 6 2 ( 0 7 4 , 4 6 5 4 5 , 2 3 7 1 1 1 6 ) 8 ( 7 4 ) 0 4 ( 7 7 1 0 3 ) 1 ( 5 1 7 8 1 8 0 4 ) 6 6 ( ) 6 4 ( 3 - 1 2 ) 8 8 ( ) 5 7 ( 1 - ) 6 ( ) 8 6 1 ( 0 4 2 9 8 - 5 0 4 8 1 9 , 5 3 7 3 7 , 3 ) 2 5 0 , 9 ( 8 0 0 , 1 3 1 ) 6 2 ( 1 5 5 , 8 4 1 9 , 1 8 4 4 , 1 4 ) 5 1 8 , 9 ( ) 1 5 7 , 6 ( - ) 4 5 2 ( 1 6 1 , 3 ) 7 6 3 , 5 ( ) 9 5 6 , 3 1 ( 5 2 ) 3 9 1 ( ) 4 7 8 ( ) 8 6 0 , 0 2 ( 0 8 3 , 1 2 9 4 3 , 7 1 - - - 1 6 1 , 7 4 4 4 , 5 ) 7 1 7 1 ( , 8 - 0 5 3 1 7 7 , 1 3 7 5 , 7 ) 9 8 4 , 3 ( ) 3 5 3 , 1 ( - - 3 0 0 , 1 ) 9 3 8 , 3 ( ) 1 5 1 , 1 ( - - ) 3 4 2 ( ) 3 3 2 , 5 ( 0 4 3 , 2 5 0 6 , 1 1 - 8 8 6 , 2 - 0 9 3 ) 2 9 6 ( 7 8 3 , 2 3 3 6 1 2 2 7 2 7 , 2 8 6 9 , 5 ) 2 4 8 ( ) 5 8 2 ( - - 7 3 2 ) 0 9 8 ( ) 7 3 4 ( - - ) 1 6 ( ) 8 8 3 , 1 ( 0 8 5 , 4 7 9 4 , 1 8 2 4 , 9 3 9 1 , 9 ) 3 7 1 ( ) 4 7 1 , 4 ( ) 9 6 2 , 2 ( 5 0 0 , 2 1 5 0 0 , 6 3 ) 4 6 ( 2 6 2 , 1 2 7 9 , 5 3 ) 6 3 2 , 3 1 ( - - - - - - - - - ) 2 4 ( ) 2 4 ( 0 3 9 , 5 3 5 0 0 , 2 1 s e t a r e g n a h c x e n i t n e m e v o m f o t c e f f E 1 2 0 2 y r a u n a J 1 t a s A 0 2 0 2 y r a u n a J 1 t a s A t s o C s n o i t i d d A s l a s o p s i D s r e f s n a r T s e t a r e g n a h c x e n i t n e m e v o m f o t c e f f E d o i r e p e h t r o f e g r a h c n o i t a i c e r p e D t n e m r i a p m i d n a n o i t a i c e r p e D 1 2 0 2 r e b m e c e D 1 3 t a s A 0 2 0 2 y r a u n a J 1 t a s A s e t a r e g n a h c x e n i t n e m e v o m f o t c e f f E 1 2 0 2 y r a u n a J 1 t a s A d o i r e p e h t r o f e g r a h c n o i t a i c e r p e D s e t a r e g n a h c x e n i t n e m e v o m f o t c e f f E 1 2 0 2 r e b m e c e D 1 3 t a s A s l a s o p s i D f f o e t i r W s l a s o p s i D f f o e t i r W s n o i t i d d A s l a s o p s i D s r e f s n a r T 1 2 0 2 r e b m e c e D 1 3 t A : e u l a v k o o b t e N 0 2 0 2 r e b m e c e D 1 3 t A 0 0 0 ’ $ A 0 0 0 ’ $ A 0 0 0 ’ $ A s 0 0 0 ’ $ A l a t o T s g n i t t i F & s e r u t x i F t n e m p i u q E & t n a l P e r u t c u r t s a r f n i e n i M & d n a L s g n i d l i u B 0 0 0 ’ $ A n o i t c u r t s n o c n i s t e s s A 0 0 0 ’ $ A s t n e m e t a t s l a i c n a n i f d e t a d i l o s n o c e h t o t s e t o N 1 2 0 2 r e b m e c e D 1 3 d e d n e r a e y e h t r o F d e t i m L i l a o C m l a e R s r e g i T t n e m p i u q e d n a t n a l p , y t r e p o r P . 6 1 72 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 16. Property, plant and equipment (continued) During the year ended 31 December 2021, two CAT 740B dump trucks, two scanias, crusher station, excavator hd- 1500, snow removing machine K-703, telecommunications equipment with the carrying value of A$0.235 million was written-off due to its present condition (2020: CAT D10 bulldozer with a carrying value of A$0.254 million was written-off). As disclosed in Note 20, the Group leases various mining equipment and port infrastructure and equipment. The carrying value of these right-of-use assets as at 31 December 2021 is A$19.162 million (2020: A$11.076 million) including A$1.037 million in land & buildings, A$13.644 million in plant& equipment and A$4.481 million in assets under construction. For the year ended 31 December 2021 the depreciation charge relating to right-of-use asset amounted to A$4,144 million (2020: A$5.010 million), including A$0.040 million and A$4.104 million in relation to right-of-use assets included in land & buildings and plant& equipment, respectively. 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 construc tion 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 period s based on ore reserves and other mineral resources. 55 73 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 Recognition and measurement: Property, plant and equipment (continued) Stripping Costs 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 cost s 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 produc tion 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 2021 A$’000 31 December 2020 A$’000 7,564 56 7,620 7,483 137 7,620 3,941 53 3,994 3,879 115 3,994 74 56 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 18. Loans payable Shareholders’ loans payable Opening balance of loans Borrowings during the year Repayment of borrowings Offset against shares issued Other changes Net effect of movement in exchange rates Total loans at end of the year 31 December 2021 A$’000 31 December 2020 A$’000 - - 31 December 2021 A$’000 1,830 - (1,864) - 16 18 - 1,830 1,830 31 December 2020 A$’000 29,393 - - (27,914) 280 71 1,830 Shareholders’ loans 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$14.641 million loan payable to Dr Bruce Gray was settled, following the issuance of shares to Dr. Gray. On 4 February 2021, the balance of the outstanding loan payable and interest accrued thereon was settled in full. Recognition and measurement: Employee benefits Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within twelve months o f the reporting date represent obligations resulting from employee’s services provided to reporting date and are calculated at undiscounted amounts based on remuneration wage and salary rates that the Company expects to pay as at the reporting date, including re lated on-costs, such as workers’ compensation insurance and payroll tax. A liability is recognised for the amount expected to be paid under short-term incentive bonus plans if the Group has a present legal or constructive obligation to pay this amount resulting from past service provided by the employee, and the obligation can be estimated reliably. 19. Employee Benefits Provision for annual leave Provision for bonuses Provision for salary and related costs payable Provision for other employment benefits 31 December 2021 A$’000 31 December 2020 A$’000 1,098 1,792 742 46 3,678 678 546 168 45 1,437 57 75 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 20. Lease Liability Maturity analysis: Payable not later than one year Payable later than one year, not later than five years Payable later than five years Less: future interest Total lease liabilities Current Non-current Movement in lease liabilities are as follows: Opening balance of lease liability New lease agreements entered during the year Lease payments Net effect of movement in exchange rates Total lease liability recognised at end of year 31 December 2021 A$’000 31 December 2020 A$’000 6,640 10,724 5,430 22,794 (7,746) 15,048 5,206 9,842 15,048 3,601 6,396 2,762 12,759 (4,830) 7,929 2,407 5,522 7,929 31 December 2021 A$’000 31 December 2020 A$’000 7,929 10,397 (5,171) 1,893 15,048 14,431 319 (3,191) (3,630) 7,929 The Group leases directly from vendors, Russian banking institutions and Russian financing companies various mining and port equipment. During the year ended 31 December 2021, the Group concluded lease agreements with equipment vendors for the lease a bulldozers, crane, excavators, and damp trucks. The Group recognised a right-of-use asset of A$11.834 million and a corresponding lease liability, after advance payments of A$1.924 million, of A$9.910 million with respect to these lease arrangements. In 2019 the Group recognised right of use of assets and a related lease liability in respect of the port infrastructure lease agreement with Rosmorport expiring in 2067 (included in other lease liabilities in the table below). In 2021, the lease payment schedule were amended, which resulted in recognition of additional right of use of assets and a related lease liability of A$0.487 million. The key terms of the lease arrangements are as follows: Vendor lease liabilities Banking institution lease liabilities Russian Financing Company lease liabilities Other lease liabilities Currency Effective interest rate Year of maturity RUB RUB RUB RUB 10.15-22.63% 2021-2026 12.23-15.55% 9.67-30.30% 15.2% 2024 2026 2067 76 58 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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, disco unted 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 inter est 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 Gross royalty liability, in US$ dollars Gross royalty liability, in A$ dollars Effect of discounting Opening balance of royalty liability Royalty expense arising from: - - - the passage of time the change in discount rate the change in other assumptions Payments made during the year Effect of movement in exchange rates Closing balance of royalty liability Current Non-current 31 December 2021 A$’000 31 December 2020 A$’000 23,457 32,329 (13,911) 18,418 24,168 31,379 (13,316) 18,063 31 December 2021 A$’000 31 December 2020 A$’000 18,063 1,987 (2,735) 937 (945) 1,111 18,418 1,439 16,979 18,418 13,986 1,538 - 4,152 (330) (1,283) 18,063 922 17,141 18,063 59 77 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 21. Royalty Liability (continued) 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 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. The provision was estimated based on total royalty payments of US$25 million discounted using a post-tax real discount rate of 9% at 31 December 2021. 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 2021 (31 December 2020: Nil) in relation to Amaam Project royalty arrangements as the development of the Amaam Project is not expected in the foreseeable future. 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”). Recognition and measurement: Royalty liabilities 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 Roya lty Agreements; The performance of a feasibility study or other similar project assessment which provides an indication of the economic benef its accruing to the Group from implementing a project or part thereof, incorporating the consideration of macroecon omic 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. 78 60 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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 Payments Net effect of movement in exchange rates Total other financial liabilities recognised at end of year 31 December 2021 A$’000 667 1,022 1,689 31 December 2020 A$’000 605 1,612 2,217 31 December 2021 A$’000 31 December 2020 A$’000 2,217 (618) 90 1,689 3,668 (679) (772) 2,217 In 2019, the Group entered into a sale and lease-back agreement with Universal Leasing Company for its two 500 tonne barges. As the Group has a substantive repurchase option with respect to the underlying asset under these agreements, the Group concluded these transactions represent, in substance, a financing arrangement. Accordingly, all amounts received from Universal Leasing Company were included in other financial liabilities. The key terms of the arrangement are as follows: Currency Effective interest rate Year of maturity Universal Leasing Company RUB 18.11% 2024 Recognition and measurement: Sale and leaseback transactions The Group, from time to time, enters into legal agreements with various parties whereby it transfers an asset to another entity (the buyer-lessor) and leases that asset back. The Group applies the requirements for determining when a performance obligation is satisfied in AASB 15 “Revenue from Contracts with Customers” to determine whether the transfer of an asset is accounted for as a sale of t hat asset. If the transfer of an asset by the Group satisfies the requirements of AASB 15 to be accounted for as a sale of the asset, then the Group measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained by the seller-lessee. The Group recognises the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. If the transfer of an asset by the Group does not satisfy the requirements of AASB 15 to be accounted for as a sale of the asset, the Group continues to recognise the transferred asset and recognises a financial liability equal to the transfer proceeds. 23. Share capital Share Capital Costs of raising equity 31 December 2021 A$’000 290,069 (17,089) 272,980 31 December 2020 A$’000 263,577 (16,983) 246,594 61 79 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 (i) Movements in shares on issue: No of shares Issue price A$ A$’000 Opening balance at 1 January 2020 1,791,669,870 188,197 Movements in 2020 Issue of ordinary shares – Entitlement Offer 2019 5,822,927,078 0.01 58,229 Issue of ordinary shares – Entitlement Offer 2020 Opening balance at 1 January 2021 2,143,895,694 9,758,492,642 0.008 Movements in 2021 Issue of ordinary shares – Entitlement Offer 2020 Issue of ordinary shares – STI bonuses paid Closing balance at 31 December 2021 3,295,102,126 13,107,600 13,066,702,368 0.008 0.01 17,151 263,577 26,361 131 290,069 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. (ii) Movements in options on issue During the year ended 31 December 2021, no options were granted, and 1,905,000 options lapsed or were forfeited and have been removed from the Company’s option register. Total number of options issued over ordinary shares in the Company as at 31 December 2021 is 8,002,000 (For the year ended 31 December 2020: no options issued and 6,976,000 options lapsed and 11,463,000 options forfeited, thus bringing the options issued over ordinary shares in the Company to 9,907,000). (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$43.512 million. 24. (a) 80 Share based payments Recognised share-based payment expense Expense arising from equity settled share-based payment transactions - 52 62 31 December 2021 A$’000 31 December 2020 A$’000 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 (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 2021 have an exercise price in the range of A$0.08 to A$0.013 (2020: A$0.08 to A$0.013). The weighted average remaining contractual life for options outstanding at 31 December 2021 is 0.8 years (31 December 2020: 1.8 years). There were no options granted during the year ended 31 December 2021 (year ended 31 December 2020: Nil). There are 8,002,000 vested and exercisable options at 31 December 2021 (31 December 2020: 9,907,000). There were no options exercised during the years ended 31 December 2021 and 31 December 2020. Movements in outstanding options 2021 Balance at the beginning of the year Granted Forfeited/lapsed Exercised Balance at the end of the year Vested and exercisable at year end Number of Options Weighted Average Exercise Price A$ 9,907,000 - (1,905,000) - 8,002,000 8,002,000 0.113 - 0.113 - 0.113 0.113 2020 Number of Options Weighted Average Exercise Price A$ 28,346,000 - (18,439,000) - 9,907,000 9,907,000 0.158 - 0.182 - 0.113 0.113 63 81 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 24. Share based payments (continued) (c) Summary of options granted under the Option Plan Details of share options outstanding at 31 December 2021 are detailed below: Date of issue 17 April 2015 17 April 2015 11 June 2015 11 June 2015 18 October 2017 18 October 2017 Balance at the end of the year Number of Options - - - - 2,721,000 5,281,000 8,002,000 2021 Average Exercise Price A$ - - - - 0.080 0.130 0.113 2020 Number of Options Average Exercise Price - - - - 3,368,000 6,539,000 9,907,000 A$ - - - - 0.080 0.130 0.105 During the year to 31 December 2021, no options were issued, 1,905,000 options lapsed and no options forfeited and exercised, bringing the options issued over ordinary shares in the Company to 8,002,000 as at 31 December 2021. (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. 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 2021 are outlined below: Option Grant Date 18 Oct 2017 18 Oct 2017 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 $0.031 $0.030 $0.060 $0.060 $0.080 $0.130 A B C D 18 Oct 2022 18 Oct 2022 2.32% 2.32% A. B. C. D. Performance hurdle: options vest 24 months after grant date. Performance hurdle: options vest 36 months after grant date. Performance period: 36 months after grant date. Performance period: 24 months after grant date 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 val ue is measured at the grant date and recognised over the period during which the employees became unconditionally entitle d 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. 82 64 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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. Liquidity risk (ii) 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. 65 83 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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 2021 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 2021 A$’000 31 December 2020 A$’000 33,511 6,277 39,788 7,620 15,048 - 1,689 24,357 18,879 5,888 24,767 3,994 7,929 1,830 2,217 15,970 84 66 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 25. Risk management and financial instruments (continued) (d) Accounting classifications and fair values The following table shows the carrying amounts of financial assets and liabilities. 31 December 2021 Financial assets not measured at fair value Cash and cash equivalents Trade and other receivables Financial liabilities not measured at fair value Trade and other payables Loans payable Lease liabilities Other financial liabilities 31 December 2020 Financial assets not measured at fair value Cash and cash equivalents Trade and other receivables Financial liabilities not measured at fair value Trade and other payables Loans payable Lease liabilities Other financial liabilities Loans & Receivables Carrying amount Other financial liabilities A$’000 Total 33,511 6,277 39,788 - - - - - - - - 7,620 - 15,048 1,689 24,357 33,511 6,277 39,788 7,620 - 15,048 1,689 24,357 Loans & Receivables Carrying amount Other financial liabilities A$’000 Total 18,879 5,888 24,767 - - - - - - - - 3,994 1,830 7,929 2,217 15,970 18,879 5,888 24,767 3,994 1,830 7,929 2,217 15,970 (e) Credit risk Exposure to credit risk Management monitors the exposure to credit risk on an ongoing basis. The maximum exposure to credit risk on financial assets is the carrying amount of the respective recognised financial assets as stated in the consolidated statement of financial position. For trade and other receivables, the Group does not have significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are related entities. The Group has treasury policies in place for deposit transactions to be conducted with financial institutions with high credit-ratings assigned by international credit-rating agencies. At the reporting date, cash is held with reputable financial institutions which all meet the Group’s minimum credit rating required by the approved treasury policy. Cash and cash equivalents Trade and other receivables Carrying amount 2021 A$’000 33,511 6,277 39,788 2020 A$’000 18,879 5,888 24,767 67 85 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 25. Risk management and financial instruments (continued) Geographical information The Group’s maximum exposure to credit risk for Trade and other receivables at the reporting date by geographical region was: Asia and the Russian Federation Australia Carrying amount 2021 A$’000 6,277 - 6,277 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 2021 A$’000 6,277 - 6,277 2020 A$’000 5,888 - 5,888 2020 A$’000 5,888 5,888 Impairment losses The ageing of the Group’s Trade and other receivables at the reporting date was: Impaired 2021 A$’000 Gross 2021 A$’000 Gross 2020 A$’000 Impaired 2020 A$’000 Not past due Past due 0-30 days Past due 31-120 days Past due 121 days to one year More than one year - 6,277 - 306 - 6,583 - - - (306) - (306) 5,888 - - - - 5,888 - - - - - - As of 31 December 2021 there was A$0.306 million provision for expected credit losses. (At 31 December 2020: A$Nil). In January 2022 TIG received A$5,291 million of past due receivables. 86 68 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 25. Risk management and financial instruments (continued) (f) Liquidity risk Exposure to liquidity risk Management monitors the exposure to liquidity risk on an on-going basis. Prudent liquidity risk management implies maintaining sufficient cash reserves to meet the on-going operational requirements of the business. It is the Group’s policy to maintain sufficient funds in cash and cash equivalents. Furthermore, the Group monitors its cash requirements and raises appropriate funding as and when required to meet such planned expenditure. The following are the contractual maturities of financial liabilities. 31 December 2021 Non-derivative financial liabilities Trade and other payables Lease liabilities Other financial liabilities 31 December 2020 Non-derivative financial liabilities Trade and other payables Loans payable Lease liabilities Other financial liabilities Contractual cashflows Carrying amount A$’000 Total A$’000 6 months or less A$’000 6-12 months A$’000 1-2 years A$’000 2-5 years A$’000 7,620 15,048 1,689 24,357 7,620 22,795 2,150 32,565 3,994 1,830 7,929 2,217 15,970 3,994 1,864 12,760 3,011 21,629 7,483 2,029 162 9,674 3,879 1,864 1,229 193 7,165 - 4,611 781 5,392 - - 2,372 781 3,153 - 5,725 862 6,587 137 5,000 344 5,481 - - 3,425 894 4,319 115 - 2,971 1,143 4,229 More than 5 years A$’000 - 5,430 - 5,430 - - 2,763 - 2,763 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 2021 A$’000 RUB 2021 A$’000 USD 2020 A$’000 RUB 2020 A$’000 401 5,113 (681) - - - 4,833 32,348 11,959 (6,939) - (15,048) (1,689) 20,631 8,376 3,966 (721) (1,830) - - 9,791 1,466 5,878 (3,273) - (7,929) (2,217) (6,075) 69 87 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 25. Risk management and financial instruments (continued) (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 2021 1.3307 0.0181 2020 1.4483 0.0200 Reporting date spot rate 2021 1.3780 0.0185 2020 1.2984 0.0177 USD RUB Sensitivity analysis A weakening of the AUD, as indicated, against the USD and RUB at 31 December 2021 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$’000 Profit or loss A$’000 537 2,292 1,088 (675) 537 2,292 1,088 (675) (439) (1,876) (890) 552 (439) (1,876) (890) 552 31 December 2021 USD (10% movement) RUB (10% movement) 31 December 2020 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 is minimal as the Group borrows funds at fixed rates. At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was: Fixed rate instrument Financial assets Financial liabilities Variable rate instruments Financial assets Financial liabilities Carrying amount 2021 A$’000 2020 A$’000 - (16,737) (16,737) 776 - 776 - (11,976) (11,976) 17,037 - 17,037 88 70 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 26. Expenditure commitments Exploration expenditure commitments 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 2021, the Group is in compliance with those exploration obligations defined in the respective licences. Other commitments Other commitments of A$3.886 million are primarily comprised of A$1.025 million commitment for a new 500t barge, A$0.587 million commitments to DPCI for CHPP equipment and A$0.660 million for CHPP construction (At 31 December 2020: A$9.050 million comprised primarily of A$1.898 million in commitments to Chukotsnab and A$5.123 million commitments to DPCI for the supply of diesel and CHPP equipment respectively). 27. Contingencies Deed of cross guarantee Under the terms of the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the Company has entered into an approved deed of cross guarantee of liabilities with the subsidiary identified in Note 32. Tax contingencies in the Russian Federation Russian tax legislation is subject to varying interpretations and changes, which can occur frequently. Management’s interpretation of such legislation as applied to the transactions and activities of the Group may be challenged by the relevant regional and federal authorities. Management believes that the Group has adequately provided for tax liabilities based on its interpretation of the applicable tax legislation. However, the relevant authorities may have differing interpretations, and the effect on the financial report could be significant if such interpretations are realised. 28. Related parties’ disclosure (a) Identity of related parties Balances and transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. The remuneration of key management personnel is disclosed in Note 29. As disclosed in Note 18, On 4 February 2021 outstanding loan payable to Dr Bruce Gray and interest accrued thereon was settled in full. There were no transactions with other related parties during the years ended 31 December 2021 and 2020. It is the Group’s policy that where transactions are undertaken with related parties, they are done so on an arm’s length basis. 29. Key Management Personnel Disclosures (a) Compensation of key management personnel The key management personnel compensation included in “Administration expenses” (see Note 8) and “Share- based payments” (see Note 24) is as follows: Short-term employee benefits Long-term employee benefits Post-employment benefits Share-based payments 2021 A$ 2,225,664 766,955 14,560 - 3,007,179 2020 A$ 1,957,105 - 12,697 19,598 1,989,400 71 89 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 (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. 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 2021 Directors C Wiggill B Gray O Hegarty T Sitdekov D Swan V Doronin 2020 Directors C Wiggill B Gray O Hegarty R Morgan T Sitdekov D Swan 5,100,000 - 5,145,349,665 2,680,527,623 60,412,029 6,000,000 - - - - - - - - Other key management personnel S Southwood D Forsyth D Gavrilin D Bender 21,867,673 7,246,377 - 601,297 9,141,792 - (c) Movements in shares Balance at 1 January Acquisitions Sales 1,200,000 3,900,000 404,246,361 4,741,103,304 30,412,029 30,0000,000 - - - - - - - - Other key management personnel S Southwood D Forsyth D Gavrilin D Bender 19,267,673 - - 2,600,000 7,246,377 - - - - - - - - - - - - - - - - - - - - Other Changes - - - - - - - - - - - - - - - - - - - - 5,100,000 7,825,877,288 66,412,029 - - - - 22,468,970 16,388,169 - Balance at 31 December 5,100,000 5,145,349,665 60,412,029 - - - - 21,867,673 7,246,377 - 90 72 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 30. Group entities Significant subsidiaries Parent entity Tigers Realm Coal Limited Subsidiaries TR Coal International Limited Tigers Realm Coal (Cyprus) Pty Ltd Greaterbay Larnaca Finance (Cyprus) Pty Ltd 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 2020 2021 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% 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 2021 A$’000 31 December 2020 A$’000 - - 776 130,024 130,800 - - 130,800 272,980 7,353 (149,533) 130,800 (52) (52) 17,037 87,377 104,414 - - 104,414 246,594 7,353 (149,533) 104,414 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 2021 and 2020, capital commitments comprised of A$1.552 million and A$5.123 million commitments to DPCI for the CHPP equipment. 73 91 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 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 2021 is set out below. Statement of comprehensive income and retained earnings Share based payments Administrative expenses Results from operating activities Net foreign exchange gain/(loss) Finance expense Finance income Net finance expense Profit before income tax Income tax expense Net Profit Other comprehensive income Foreign currency translation differences for foreign operations Income tax on other comprehensive income Total comprehensive profit for the period Accumulated deficit at beginning of year Accumulated deficit at end of year 31 December 2021 A$’000 31 December 2020 A$’000 - (1,729) (1,729) 4,683 - 53 4,736 3,008 - 3.008 - - 3,008 (192,328) (189,320) (52) (718) (770) (5,664) (280) 91 (5,853) (6,623) - (6,623) - - (6,623) (185,705) (192,328) 92 74 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 32. Deed of cross guarantee (continued) Current Assets Cash and cash equivalents Trade and other receivables Prepayments Total current assets Non-current assets Property, plant and equipment Investments in subsidiaries Total non-current assets Total assets Current Liabilities Trade and other payables Loan payables Employee provisions Total current liabilities Total liabilities Net assets Equity Share capital Reserves (Accumulated deficit) Total equity 31 December 2021 A$’000 31 December 2020 A$’000 776 467 326 1,569 - 129,658 129,658 131,227 435 - 59 494 494 17,037 335 42 17,414 4,481 81,783 86,264 103,678 815 1,830 46 2,691 2,691 130,733 100,987 272,980 47,073 (189,320) 130,733 246,594 46,721 (192,328) 100,987 75 93 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 33. Non-controlling interest No change in the non-controlling interests in the Eastshore and the Amaam project occurred during the years ended 31 December 2021 and 2020. 34. Auditors’ Remuneration Details of the amounts paid to the auditor, Deloitte, and related network firms for audit and non-audit services provided during the year are set out below. Audit services: Audit and review of financial reports Deloitte Australia Audit and review of financial reports Deloitte Overseas Services other than statutory audit Other services Taxation compliance and advisory services Deloitte Australia Taxation compliance services and advisory services Deloitte Overseas 31 December 2021 A$ 31 December 2020 A$ 137,350 243,218 380,568 123,245 159,710 282,955 26,881 19,950 66,823 93,704 474,272 35,944 55,894 338,849 35. Events after the reporting period In January 2022, the Company entered into purchase agreements amounting to A$9.638 million for delivery of mining equipment during the first half of 2022. 94 76 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 Directors’ declaration For the year ended 31 December 2021 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 34 to 76 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 2021 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 2021. 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 2022. ________________________________________________ Craig Wiggill Director 77 95 Annual Report 2021Tigers Realm Coal Deloitte Touche Tohmatsu ABN 74 490 121 060 Level 23, Riverside Centre 123 Eagle Street Brisbane, QLD, 4000 Australia Phone: +61 7 3308 7000 www.deloitte.com.au The Board of Directors Tigers Realm Coal Limited 151 Wellington Parade South East Melbourne VIC 3002 24 February 2022 Dear Board Members, TTiiggeerrss RReeaallmm CCooaall LLiimmiitteedd In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Tigers Realm Coal Limited. As lead audit partner for the audit of the financial statements of Tigers Realm Coal Limited for the financial year ended 31 December 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. Yours sincerely, DELOITTE TOUCHE TOHMATSU JJaaccqquueess SSttrryyddoomm Partner Chartered Accountants Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. 96 78 Annual Report 2021Tigers Realm Coal Deloitte Touche Tohmatsu ABN 74 490 121 060 Level 23, Riverside Centre 123 Eagle Street Brisbane, QLD, 4000 Australia Phone: +61 7 3308 7000 www.deloitte.com.au Deloitte Touche Tohmatsu ABN 74 490 121 060 Level 23, Riverside Centre 123 Eagle Street Brisbane, QLD, 4000 Australia Phone: +61 7 3308 7000 www.deloitte.com.au TTiiggeerrss RReeaallmm CCooaall LLiimmiitteedd In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of Tigers Realm Coal Limited. As lead audit partner for the audit of the financial statements of Tigers Realm Coal Limited for the financial year ended 31 December 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (ii) any applicable code of professional conduct in relation to the audit. The Board of Directors Tigers Realm Coal Limited 151 Wellington Parade South East Melbourne VIC 3002 24 February 2022 Dear Board Members, Yours sincerely, DELOITTE TOUCHE TOHMATSU JJaaccqquueess SSttrryyddoomm Partner Chartered Accountants 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 2021, 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 2021 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. Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Asia Pacific Limited and the Deloitte organisation. 78 79 97 Annual Report 2021Tigers 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 Estimation of the amount of royalty liability in relation to the Amaam and Amaam North Projects As disclosed in Note 21, the Group has entered into a number of royalty arrangements as part of obtaining control in the Amaam and Amaam North Projects. Management is required to make a number of judgements to estimate the amount of the liability, 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. HHooww tthhee ssccooppee ooff oouurr aauuddiitt rreessppoonnddeedd ttoo tthhee KKeeyy AAuuddiitt MMaatttteerr In conjunction with our valuation specialists, we performed our audit procedures including, but were not limited to: • • Assessing Evaluating management’s process and assessing the design and implementation of key controls management have in place for determining the royalty liability. and challenging management’s assumptions made in relation to forecast production and sales volumes, forecast coal prices. This included assessing the consistency of relevant assumptions with other these information, including, but not limited to life-of- mine plans, external observable market data and economic analysis. the the assumptions used to determine the discount rate. Performing of management’s production and sales volumes, coal prices assumptions to evaluate the accuracy of the management’s forecasting; Performing sensitivity analysis on a number of key assumptions, including production and sales volumes, coal prices and discount rate; reasonableness of retrospective review a • Challenging • • • Assessing the appropriateness of the disclosures in Note 21 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 2021 (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 80 98 Annual Report 2021Tigers 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 liability in In conjunction with our valuation specialists, we relation to the Amaam and Amaam North Projects performed our audit procedures including, but were not As disclosed in Note 21, the Group has entered into a number of royalty arrangements as part of obtaining control in the Amaam and Amaam North • Evaluating management’s process and assessing the design and implementation of key controls management have in place for determining the limited to: Projects. Management is required to make a number of judgements to estimate the amount of the liability, 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. royalty liability. • Assessing and challenging management’s assumptions made in relation to forecast production and sales volumes, forecast coal prices. This included assessing the consistency of these assumptions with other relevant information, including, but not limited to life-of- mine plans, external observable market data and economic analysis. • Challenging the reasonableness of the assumptions used to determine the discount rate. • • Performing a retrospective review of management’s production and sales volumes, coal prices assumptions to evaluate the accuracy of the management’s forecasting; Performing sensitivity analysis on a number of key assumptions, including production and sales volumes, coal prices and discount rate; • Assessing the appropriateness of the disclosures in Note 21 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 2021 (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 80 to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the 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. 81 99 Annual Report 2021Tigers 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. 100 82 Annual Report 2021Tigers 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. RReeppoorrtt oonn tthhee RReemmuunneerraattiioonn RReeppoorrtt Opinion on the Remuneration Report We have audited the Remuneration Report included in paragraph 12 of the Directors’ Report for the year ended 31 December 2021. In our opinion, the Remuneration Report of Tigers Realm Coal Limited, for the year ended 31 December 2021, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. DELOITTE TOUCHE TOHMATSU Jacques Strydom Partner Chartered Accountants Brisbane, 24 February 2022 82 83 101 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 SHAREHOLDER INFORMATION 1. Top 20 Shareholders as at 14 February 2022 Number of shares % of Total YEADON INVESTMENTS PTY LTD ATF YEADON TRUST 4,824,423,317 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED BV MINING HOLDING LIMITED RDIF INVESTMENT MANAGEMENT LLC NAMARONG INVESTMENTS PTY LTD PINE RIDGE HOLDINGS PTY LTD BNP PARIBAS NOMINEES PTY LTD SHIMMERING BRONZE PTY LIMITED CO-INVESTMENT PARTNERSHIP I LP SENNEN TROVE PTY LTD FOREMOST MANAGEMENT SERVICES PTY LIMITED MR STEPHEN ALEXANDER CHING MASIK ENTERPRISES PTE LTD ASIPAC GROUP PTY LTD MR. DMITRY GAVRILIN GP SECURITIES PTY LTD CANCELER PTY LTD ROMADAK PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2 2,886,487,115 2,377,541,065 1,036,224,898 735,511,670 181,922,857 80,302,505 65,912,029 51,811,415 23,937,359 22,468,970 21,300,000 20,000,000 18,846,246 16,388,169 14,270,960 14,000,000 13,000,000 12,461,460 11,950,101 36.92 22.09 18.20 7.93 5.63 1.39 0.61 0.50 0.40 0.18 0.17 0.16 0.15 0.14 0.13 0.11 0.11 0.10 0.10 0.10 TOTAL 12,428,760,136 95.12 102 84 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 SHAREHOLDER INFORMATION 1. Top 20 Shareholders as at 14 February 2022 YEADON INVESTMENTS PTY LTD ATF YEADON TRUST 4,824,423,317 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED Number of shares % of Total BV MINING HOLDING LIMITED RDIF INVESTMENT MANAGEMENT LLC NAMARONG INVESTMENTS PTY LTD PINE RIDGE HOLDINGS PTY LTD BNP PARIBAS NOMINEES PTY LTD SHIMMERING BRONZE PTY LIMITED CO-INVESTMENT PARTNERSHIP I LP SENNEN TROVE PTY LTD FOREMOST MANAGEMENT SERVICES PTY LIMITED MR STEPHEN ALEXANDER CHING MASIK ENTERPRISES PTE LTD ASIPAC GROUP PTY LTD MR. DMITRY GAVRILIN GP SECURITIES PTY LTD CANCELER PTY LTD ROMADAK PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2 TOTAL 2,886,487,115 2,377,541,065 1,036,224,898 735,511,670 181,922,857 80,302,505 65,912,029 51,811,415 23,937,359 22,468,970 21,300,000 20,000,000 18,846,246 16,388,169 14,270,960 14,000,000 13,000,000 12,461,460 11,950,101 12,428,760,136 95.12 36.92 22.09 18.20 7.93 5.63 1.39 0.61 0.50 0.40 0.18 0.17 0.16 0.15 0.14 0.13 0.11 0.11 0.10 0.10 0.10 84 Tigers Realm Coal Limited Notes to the consolidated financial statements For the year ended 31 December 2021 SHAREHOLDER INFORMATION (CONTINUED) 2. Voting rights of ordinary shares On a show of hands one vote for each shareholder, and on a poll, one vote for each fully paid ordinary share. 3. Distribution of Shareholders and Shareholdings as at 14 February 2022 Holding and Distribution 1 to 1000 1001 to 5000 5001 to 10000 10001 to 100000 100001 and Over Total No. of Holders Securities % 49 29 48 464 571 1,161 4,933 96,888 415,783 23,063,238 13,043,121,526 13,066,702,368 .00 .00 .00 .18 99.82 100.00 4. Tigers Realm Coal Substantial Shareholders as at 14 February 2022 Holder Dr Bruce Gray BV Mining Holding Limited RDIF Investment Management LLC * Namarong Investments Pty Ltd No. of Shares % of Total 7,825,877,288 2,377,541,065 1,098,398,595 735,511,670 59.89 18.20 8.41 5.63 *Including CO-INVESTMENT PARTNERSHIP I LP, CO-INVESTMENT PARTNERSHIP II CV 5. Shareholdings of less than a marketable parcel as at 14 February 2022 255 holding a total of 3,152,172 shares. 6. Unquoted Securities as at 14 February 2022 8,002,000 unlisted options on issue. 85 103 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Limited Corporate Directory DIRECTORS Craig Wiggill (Chairman) Owen Hegarty Bruce Gray David Swan Mitch Jakeman COMPANY SECRETARY David Forsyth REGISTERED OFFICE 151 Wellington Parade South, East Melbourne, Victoria, 3002 Tel: +61 3 8644 1300 PRINCIPAL OFFICE 37 Leningradski Avenue 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 104 2 Annual Report 2021Tigers Realm Coal Tigers Realm Coal Annual Report 2021 Tigers Realm Coal Limited 151 Wellington Parade South East Melbourne Victoria 3002 T +61 3 8644 1300 tigersrealmcoal.com 

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