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2022
Annual Report 2022
Tigers Realm Coal
ABN 50 146 732 561
CONTENTS
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.
“In 2022 TIG
completed startup
at its Coal Handling
& Processing Plant
(CHPP) and began
selling washed
coal, both coking
and thermal, into
its traditional North
Asian market”
04
2022 HIGHLIGHTS
11
NOTES TO RESERVES
AND RESOURCES
06
CHAIRMAN’S REVIEW
10
RESERVES AND RESOURCES
12
OPERATIONS REVIEW
23
FINANCIAL REPORT
08
CHIEF EXECUTIVE OFFICER’S
REPORT
18
HEALTH AND SAFETY
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Annual Report 2022
Tigers Realm Coal
TIGERS REALM COAL LIMITED
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 began mining in 2017 and for
its first five years of operations supplied
unwashed coal products to the North
Asian steel and thermal coal markets.
In 2022 TIG completed startup at its
Coal Handling & Processing Plant
(CHPP) and began selling washed
coal, both coking and thermal, into its
traditional North Asian markets.
The immediately adjacent Amaam
project remains in a pre-development
stage. The Amaam basin contains
significant resources of quality coking
coal. TIG is still assessing how it will
move forward with this project.
In 2022, the Company further
increased annual run-of-mine (ROM)
coal production to 1,523kt (2021:
1,025kt) and annual sales to 1,065kt
(2021: 911kt).
Operational performance was
supported by a strong international
coal market. The improved market
conditions and further increase in
sales volumes contributed to a greater
than 75% increase in revenue.
During 2023 TIG will be focused
on transitioning to selling primarily
washed coal products to our North
Asian customers as well as expanding
our marketing efforts to India.
The Company’s registered office
is located in Melbourne, Australia.
Management is principally located
in our offices in Moscow and on
site in Chukotka.
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.
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.
2022 HIGHLIGHTS
2.58 to 2.24
Total Reportable Injury Frequency Rate
(“TRIFR”) decreased from 2.58 to 2.24.
Total Reportable Injury
731kt
Despite facing unprecedented headwinds, we were able to achieve several significant
milestones: completing the CHPP, processing 731kt and selling our first four washed
coal cargos.
Significant milestones
17%
Mining volumes increased year-on-year by 49% from 1,025kt to 1,523kt. Sales volumes
increased by 17% from 911kt to 1,065kt. The significant increase in mining volumes was
enabled as a result of the improved market conditions, increased production capacity
and a lower stripping ratio.
Mining Volumes
A$62.09m
The average cost of coal sold per tonne increased
to A$62.09 to (US$41.66) from A$41.58 (US$30.43)
primarily due to the addition of washed product to
the Company’s sales mix.
Average Cost
A$59.0m
Supported by improved market conditions and sales
volumes, total revenue from the sale and shipment
of coal increased from A$103.944 million in 2021 to
A$185.781 million in 2022, with EBITDA improving
from A$46.9 million to A$59.0 million.
EBITDA
04
Annual Report 2022
Tigers Realm Coal
“In 2022, the Company further increased annual run-of-mine
(ROM) coal production to 1,523kt (2021: 1,025kt) and annual
sales to 1,065kt (2021: 911kt). Operational performance was
supported by a strong international coal market. The improved
market conditions and further increase in sales volumes
contributed to a greater than 75% increase in revenue.”
05
Annual Report 2022
Tigers Realm Coal
CHAIRMAN’S
REVIEW
Dear Shareholders,
As an Australian registered mining
company with its operations entirely
based in the Chukotka Province
of Russia, TIG has been exposed
to unprecedented geopolitical risk
and uncertainty since the war in
Ukraine commenced in February
2022. As a result of the imposition of
sanctions by DFAT (Australia) and
OFAC (USA), TIG has been forced to
rearrange its activities with many of
its direct Australian and International
service providers, extending also to
international banking facilities, auditors,
legal and insurance providers.
While TIG was able to navigate
through these issues and yet enable
the Company to report improved results
for the year, there have been substantial
negative impacts on the Company and
it is the directors view that these are
likely to remain for the foreseeable
future. The more significant impacts that
remain are the continued restrictions
on sales to certain end consumers,
the need for the Company to discount
significantly to the typical global
seaborne export prices to secure
sales in certain markets, as well as the
difficultly in sourcing replacement large
mining equipment and spares, together
with increased consumables costs,
due to supply shortages in the Russian
market. The degree to which these
issues will continue or worsen in 2023
remains uncertain.
Craig Wiggill
Chairman
The Board has constantly evaluated
current risks, including the potential
escalation of the sanction regimes, on
our business sustainability alongside our
responsibility for longer term shareholder
returns. We have determined that it
will be necessary to restructure our
company and we will be recommending
to shareholders that a delisting is a
necessary next step to our path to the
protection of our assets and revenue.
In relation to the safety of our
employees and local communities,
I am particularly pleased that our safety
record continues to improve at site,
illustrative of ongoing emphasis by
the senior team on our core values
of care and respect. I am also
pleased to report that we reported
no lost-time injuries during the entire
CHPP construction programme,
notwithstanding some exceptionally
challenging weather conditions
experienced during this period.
In May 2022 Mr Owen Hegarty, a
founding director, resigned from the TIG
Board having completed over 11 years
of outstanding service to the Company.
Owen’s roles on the board included
chairing both the Nomination and
Remuneration Committee and the
Audit, Risk and Compliance Committee.
We are immensely grateful to Owen for
his contribution to TIG and wish him well
for the future.
Mr. David Swan, the Chairman
of the Audit & Risk and Remuneration
& Nominations committees, resigned
from the TIG Board in August. He has
not yet been replaced although it is the
intention of the board to do so during
2023. I would like to thank Mr. Mitch
Jakeman for assuming the responsibility
for the role of Chairman of both
committees in the interim period.
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 2022. TIG will clearly
operate in 2023 with a backdrop of
significant uncertainty. The TIG Board
and senior management will continue
to address all issues as they arise
whilst abiding by the laws of both the
countries in which we are registered
as well as where we operate.
Craig Wiggill
Chairman
06
Annual Report 2022
Tigers Realm Coal
“I am particularly pleased that our safety record continues to
improve at site, illustrative of ongoing emphasis by the senior
team on our core values of care and respect. I am also pleased
to report that we reported no lost-time injuries during the entire
CHPP construction programme.”
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Annual Report 2022
Tigers Realm Coal
CHIEF EXECUTIVE
OFFICER’S REPORT
In 2022 TIG faced enormous external
challenges. Economic restrictions,
the disruption of supply chains and
rouble volatility impacted TIG’s
costs and created challenges for the
Company’s operational, commercial
and investment activities. In addition
to issues driven by geopolitics, TIG
also encountered significantly higher
logistics cost as the expansion of
numerous mining projects in the
Russian Far East against a backdrop
of a static supply of general cargo
vessels drove up these costs.
On account of the geopolitical situation,
the Company’s CHPP contractor
was unable to assist at site with plant
commissioning and TIG personnel
were forced to complete the build and
manage plant start-up procedures
with limited supplier and specialist
assistance. Coal processing began in
April which enabled the Company to
begin supplying a washed product to
some North Asian customers.
Despite facing unprecedented
headwinds, TIG managed to improve
its operational and financial
Dmitry Gavrilin
Chief Executive Officer
performance, including achieving
record mining and sales volumes
of 1.5Mt and 1.1Mt which translated
into a record EBITDA of A$59.0 million
and Net Income of A$53.5 million. I am
also personally proud of being able to
report a continued improvement in our
safety performance, as evidenced by
a decrease in our TRIFR to 2.24 from
2.58 in 2021.
It is a testament to the strength of
the team we have built over several
years that during a tumultuous year
we were able to achieve several
significant milestones: completing the
CHPP, processing 731kt and selling
our first four washed coal cargos.
To mitigate against new risks, TIG
developed relationships with new
clients, particularly in China, and
alternative suppliers.
The current geopolitical situation
requires us to assess serious
changes to our corporate structure,
including delisting from the ASX. This
is truly unfortunate. All the same, the
management team will take our ASX
culture with us and continue to run
the Company at the same level of
corporate responsibility, commitment
to ethical business practices and focus
on safety and empowering employees
to develop their potential as would have
been the case were we to remain listed
on the ASX.
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 2022
and which will enable us to address
the enormous challenges we will
face in 2023.
Dmitry Gavrilin
Chief Executive Officer
08
Annual Report 2022
Tigers Realm Coal
“It is a testament to the strength of the team we have built over several
years that during a tumultuous year we were able to achieve several
significant milestones: completing the CHPP, processing 731kt and
selling our first four washed coal cargos. To mitigate against new
risks, TIG developed relationships with new clients, particularly
in China, and alternative suppliers.”
09
Annual Report 2022
Tigers Realm Coal
RESERVES AND RESOURCES
Coal Resources for Amaam North – Project F (100% basis)
Resource Category
Open Pit (Mt)
Underground (Mt)
Total (Mt)
MeasuredC - Coking
21,3
1,2
22,5
IndicatedB - Coking
18,5
5,8
24,3
InferredA - Coking
20,2
14,1
34,3
IndicatedB - Thermal
1,3
-
1,3
InferredA - Thermal
0,7
-
0,7
Total (Mt)
62.0
21.1
83.1
Tonnage (Mt)
Relative
Density
Ash
(%)
Inherent
Moisture
(%)
Volatile Matter
(%)
Gross
Calorific Value
(kcal/kg)
Total
Sulphur
(%)
83,1
1.39
17.32
1.42
27.15
6,820
0.29
NB: Coal qualities on an air-dried basis.
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)
Recoverable Reserves (Mt)
Marketable Reserves (Mt)
Coal Type
Proved
Probable
Total
Proved
Probable
Total
Coking
11,5
8,1
19,6
6,5
5,0
11,5
Thermal
1,0
0,7
1,7
0,8
0,6
1,4
Total (Mt)
12,5
8,8
21,3
7,3
5,6
12,9
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
Open Pit (Mt)
Underground (Mt)
Total (Mt)
MeasuredC - Coking
3
-
3
IndicatedB - Coking
89
2
91
InferredA - Coking
336
91
427
Total (Mt)
428
93
521
Tonnage (Mt)
Relative
Density
Ash
(%)
Inherent
Moisture
(%)
Volatile
Matter
(%)
Fixed
Carbon
(%)
Gross
Calorific
Value
(kcal/kg)
Total
Sulphur
(%)
521
1.62
33.6
1.69
23.3
39.1
5,114
0.84
NB: Coal qualities on an air-dried basis.
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)
Amaam (Mt)
Total (Mt)
90 to 370
25 to 40
115 to 410
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Annual Report 2022
Tigers Realm Coal
NOTES TO RESERVES AND RESOURCES
The company is not aware of any new
information or data regarding the ore reserves
or minerals resources of Amaam or Amaam
North, other than depletion at Amaam North,
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 since the
Amaam North JORC update released 24
November 2020 (TIG Anounces Results of New
Amaam North JORC Report) and the Amaam
Resource Estimate released 9 July 2015
(Amaam Projects Resources and Exploration
Targets Update). 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)
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.
11
Annual Report 2022
Tigers Realm Coal
“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
five 500-tonne and two 100-tonne barges.”
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
Two of Stage One, having achieved
1.5Mtpa in 2022 and processed
more than 0.7Mt through CHPP and
is implementing Stage Two. The
economics of this further development
is underpinned by the startup of the
CHPP in April 2022. This enabled the
Company to sell a higher-value product
into the Semi-Hard coking coal (SHCC)
markets. This SHCC product allows
TIG to achieve significantly higher
average prices than was achieved for
a basket of unwashed coal products.
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 sustain increased
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.
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 License No. AND 01203 TP
(Levoberezhny “Left Bank” License),
being the broader exploration license
from which the following Exploration
and Extraction (Mining) Licenses have
been carved out to date;
• Mining License No. AND
15813 TE (Fandyushkinskoye
Field); and
• Mining License No AND 01314
TE (“Zvonkoye”), issued in
2018 Wfor 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 five 500-tonne
and two 100-tonne barges.
OPERATIONS REVIEW
12
Annual Report 2022
Tigers Realm Coal
“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 sustain increased production, TIG will need to perform further
drilling & exploration works.”
LEGEND
TIG Project
North Asian
Market
Major coking coal basins
Railroad directions
Sea directions
TIG projects
115 –250km railroads to ports
and 13 days shipping
8 days
shipping
1,100km railroads to ports
and 14 days shipping
8 days
shipping
South
Yakutsk
Basin
Kuzbass
Basin
British
Columbia
Bowen
Basin
2,000–5,000km
railroads to ports
~ 35km to port
115 –250km railroads to ports
and 13 days shipping
1,100km railroads to ports
and 14 days shipping
1,100km
railroads to ports
13
Annual Report 2022
Tigers Realm Coal
OPERATIONS REVIEW CONTINUED
Operations Update
Licensing & Exploration Activities
Licence Holder
Site
Licence No.
Licence Type
Expiry Date
Amaam North
BPU1
Amaam North
‘Fandyushkinskoye’
AND 15813 TE
Mining
Dec 2034
BPU
Amaam North ‘Zvonkoye’
AND 01314 TE
Mining
Sep 2038
BPU
Alkatvaam – Levoberezhny
AND 01203 TP
Exploration
Dec 2025
Amaam
NPCC2
‘Zapadny’
AND 01278 TE (formerly AND 01225 TE)
Mining
Mar 2033
NPCC
‘Nadezhny’
AND 01288 TE
Mining
July 2037
NPCC
‘Area 4’
AND 01379 TP (formerly AND 01277 TP)
Exploration
Jun 2027
1. LLC Beringpromugol (‘BPU’), wholly owned TIG subsidiary.
2. JSC Northern Pacific Coal Company (‘NPCC’), 80% beneficially owned by TIG.
Q1
Q2
Q3
Q4
2022
Total
ROM coal mined
kt
297
329
505
392
1,523
Coal delivered to Beringovsky Port
kt
257
219
406
259
1,141
Coal sold
kt
5
13
744
303
1,065
Total coal stocks
kt
857
1,079
719
687
687
Waste mined
kbcm
1,085
947
1,337
1,297
4,666
ROM strip ratio
bcm:t
3.7
2.9
2.7
3.3
3.0
Amaam North Snapshot
Mining volumes increased year-on-year
by 49% from 1,025kt to 1,523kt and
comprised of 1,014kt of thermal coal
(69% increase from last year’s 601kt)
and 509kt of metallurgical coal (20%
increase from 424kt in 2021).
Mining Operations
During 2022 TIG has increased its
mining capacity by adding excavators,
loaders, Bell in-pit dump trucks and
FAW coal haulage trucks. The average
stripping ratio for 2022 amounted to
3.0:1, a significant decrease from 4.0:1
in 2021. The lower stripping ratio was
mainly driven by the CHPP starting up
later than expected and a conscious
decision to focus on thermal coal due
to favourable market conditions and
revenue optimisation from products.
In July TIG mined 172kt – a monthly
historical maximum.
The Company is in compliance with its licence obligations.
As at 31 December 2022, TIG has the following licences in effect:
14
Annual Report 2022
Tigers Realm Coal
increase over 2021. Maximum truck
haulage per day reached 6kt. 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 safety-related
prices rising from c.75 euros/MWh at
the start of the year to peak at c.350
euros/MWh in August, and coal prices
peaking at USD438/t for Newcastle
thermal coal (6000kcal/kg NAR) during
September. For the most part, only
non-Russian producers realized the
full impact of the exceptionally strong
market because it was primarily caused
by the forced withdrawal of Russian
supply from Europe and many other
consuming countries due to sanctions..
Accordingly, despite having just
commissioned the CHPP, TIG revised
its strategy of focusing on washed
coking coal and took the opportunity
to sell unwashed coal cargoes at
attractive prices into the thermal
market. This resulted in a better net
price outcome after considering
washing costs and yield losses.
TIG set a new annual record for sales
and loading at our port of Beringovsky.
However, poor weather in October
and November meant that our last two
Haulage Operations
Haulage operations are based on our
fleet of 20 Scania and 5 FAW trucks. Six
new coal haulage trucks were acquired
in 2022 and two were scrapped. Our
total fleet capacity increased by four
trucks in 2022. Coal haulage to port
increased to 1,141kt in 2022, a 23%
Sales and Marketing
During 2022, TIG loaded 19 cargoes
with a total of 1.1MT of coal of which
109kt was washed coking coal and 44kt
was thermal coal for the local Chukotka
villages and townships. The balance
was thermal coal.
TIG’s sales in 2022 were supported
by demand from China. Many of our
usual markets were not open to TIG as
a result of broader geopolitical issues
and trade sanctions. As a result of
uncertainty around trade and payment
flows, sales were concentrated in China
over the shipping season, particularly
in the first few months. As the year
progressed a “Russian discount”
became apparent – due to risks and
uncertainties involved in the Russian
coal trade, and to strong competition
among Russian suppliers for the limited
available markets for Russian coal.
Despite the above, thermal coal prices
were relatively high during 2022 as the
Ukraine conflict spurred a global energy
crisis, with European gas fired power
incidents. TIG carried out construction
works to improve safety and haulage
efficiency and reduce the environmental
impact of our operations. Construction
of road culverts continued, both to
increase road safety and to increase
throughput capacity.
vessels were not completed, which led
to loss of anticipated revenue, as well
as significant demurrage and dead
freight costs as the vessels were forced
to sail to China only partially loaded.
The positive impact of the market
conditions was partially offset by
the above, and by a dramatic rise in
bulk cargo shipping costs created by
restrictions on available vessels due
to sanctions. The shipping market was
extremely tight during the year due to
a lack of vessels capable of loading
at Beringovsky (geared, polar code
compliant vessels with owners willing
to take the risk of sending vessels
to Beringovsky in an environment of
quickly-changing sanctions). The net
result was a significant increase in
seaborne coal transportation costs
(from c. US$40/t in 2021 to as high as
US$53/t in June 2023), which directly
affected the net prices for TIG even
when selling on FOB terms.
15
Annual Report 2022
Tigers Realm Coal
During 2022 TIG’s average loading
rate increased to 10.6kt per weather
working day (“pwwd”) compared to
8.2kt pwwd in 2021. A record loading
rate of 16.8ktpwwd was achieved
on 10 July 2022.
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,
OPERATIONS REVIEW CONTINUED
improve remarkably during the third full
year during which TIG operated the port
itself. Trans-shipment costs per tonne
increased insignificantly from A$6.52 to
A$7.44 (US$4.77 to US$4.99).
2022 Beringovsky Port Operations
With loading volumes of 1,049kt (2021:
885kt) – a 19% increase over the
previous year and the maximum annual
volume achieved in the port’s history
– TIG’s port performance continued to
Preparations for the 2022 shipping
season included maintenance of the
conveyor and loading system in the
port, as well as the necessary minor
repairs on the fleet and cranes.
Key figures for TIG port operations are set out in the table below:
May
June
July
Aug
Sept
Oct
Nov
Total
Coal trans-shipped
kt
-
147
250
253
174
167
58
1,049
Barges in use
units
-
4
4
4
4
4
4
Weather working days per month
days
-
24.5
29.3
44.1
25.3
23.3
10.5
157
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 2022 included:
• CHPP-related civil works;
• Additional mining equipment both
to replace aging equipment and to
increase capacity;
• Construction of fuel farm;
• Waste treatment plant in the port;
• Acquisition of additional 500t barge
Construction of TIG’s fifth 500t barge
was completed in 2022. TIG took
delivery of the barge in Nakhodka,
Russia in September 2022 and will
bring it to site at the start of the 2023
shipping season. This additional barge
will further increase TIG’s annual
loading capacity. Additionally, it is
configured with a front-access ramp
to enable better handling of incoming
heavy and/or bulky equipment.
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Annual Report 2022
Tigers Realm Coal
Coal Handling and Process
Plant (CHPP) Project
Due to the geopolitical situation,
TIG’s CHPP equipment supplier
was not able to come to site to
carry out commissioning procedures.
Nevertheless, with limited remote
assistance from the supplier, TIG
personnel achieved CHPP startup in
April 2022 and during the remainder
of the year processed 731kt of ROM
coal for 396kt of clean coal.
The CHPP achieved full capacity
in the third quarter, positioning the
Company to sell a higher-value product
of a consistent quality into the semi–
hard coking coal (“SHCC”) markets,
enabling the Company to achieve
significantly higher prices than those
available for unwashed coal products.
As TIG implements drill & blast
(D&B) operations in 2023, mining will
deepen to lower horizons where coal
quality is expected to be more even,
and mining should result in fewer
fines being produced from the mining
process. As a result, the Company
expects CHPP processing yield to
improve during the year.
L.R.
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 2022 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
TIG’s Non-Executive Director Valery Doronin resigned from
the Board, effective 3 February 2022.
TIG’s Non-Executive Director Owen Hegarty resigned from the
Board, effective 23 May 2022.
TIG’s Non-Executive Director David Swan resigned from the
Board, effective 15 August 2022.
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 including Shell Coal Australia,
Anglo Coal Australia and Stanmore Coal. He serves as
Chairman of the Nominations & Remuneration and Audit &
Risk Committees.
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Annual Report 2022
Tigers Realm Coal
HEALTH AND 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.
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 2.24 per million hours worked
in 2022. There was 1 Lost Time Injury
case (“LTI”) in 2022.
Since the start of its operations TIG has
developed a solid system of Health
& Safety management, including
continuous improvement and support
423
340
283
282
208
2022
2021
2020
2019
2018
Number of Employees
2.24
2.58
3.08
4
3.7
2022
2021
2020
2019
2018
TRIFR (per million hours worked)
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.
In 2022, 72 HSE inductions and 63
HSE reviews for existing employees
were conducted;
• 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;
• Workplace organisation and regular
safety inspections; 37 inspections
of workplace organization conducted
in 2022;
• Independent government sponsored
mine rescue team which receives
additional training every six months
and conducts an emergency drill
annually.
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 work places in the region. The number of employees increased by
24% from 340 in 2021 to 423 in 2022. Female employee representation decreased from 19% in 2021 to 17% in 2022.
“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.”
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Tigers Realm Coal
Environmental
Stewardship
Consistent with Russian legislation TIG
prepares environmental assessments
prior to beginning any significant
construction project, such as the CHPP.
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 the local community:
“Taking into account increasing volumes of ferrous scrap from TIG’s operations
on top of legacy scrap, TIG decided to launch its own recycling operation.
Hence, in 2022 ferrous scrap was stored at the Company’s sites for further
recycling when appropriate facilities are ready.”
Water Management
TIG continued developing water
management programs covering the
camp, pit and haulage road to make
sure any discharges into local rivers
and sea are within regulatory norms.
TIG’s operational sites are equipped
with the following wastewater
treatment facilities:
• Waste water settling pond with 6,000
m3 capacity was built on the dock-
side coal stockpiles to clean waste
water from coal storage area with
cartridge-filter technology;
• Since 2019 TIG’s Beringovsky office
staff during ‘Eco-patrol’ initiatives
helps monitoring the 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 a hotline
for enquiries regarding mining and
environment issues in Beringovsky;
Taking into account increasing volumes
of ferrous scrap from TIG’s operations
on top of legacy scrap, TIG decided
to launch its own recycling operation.
Hence, in 2022 ferrous scrap was
stored at the Company’s sites for
further recycling when appropriate
facilities are ready. The in-house
processing of scrap will start in 2023.
While this activity will provide a net
positive revenue, the primary motivation
is to expedite removal of old scrap from
Beringovsky as part of our activities
related to improving environment in
which we operate.
• 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;
The Company monitors water usage
from natural sources. Total fresh
well-water intake in 2022 was 6.1k
m3. 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 2022 amounted to 0.6 thousand 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.
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Annual Report 2022
Tigers Realm Coal
HEALTH AND SAFETY CONTINUED
1523
1025
792
750
576
4666
4063
4804
3501
1900
2019
2020
2021
2022
2018
Waste and ROM coal mined growth (thousand tonnes)
Waste
ROM coal mined
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.
On a monthly basis, soils under and
around the coal stockpiles are tested
in order to monitor environmental
regulation compliance. All production
waste was recycled in accordance
with regulatory requirements.
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 2022 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 for coal terminal was acquired;
• Reactive chemicals are used to cover stockpiles with crust to lay coal dust;
• Belt conveyer cover is used to prevent blowing coal dust in process of
transportation coal from the coal store to vessel;
• Coal stock cover is used to minimize dusting during high wind loading.
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Annual Report 2022
Tigers Realm Coal
Energy Consumption
and Efficiency
TIG receives electrical supply from
diesel generators. Heating is provided
by coal-fired boilers.
TIG will be undertaking a series
of studies around energy and types
for our future development and
possible trials around reducing
carbon emissions from our
equipment fleet into the future.
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. We have
currently 13 as employees across our
operations and five trainees.
Apart from creating work places,
TIG plays a leading role in a number
of events and initiatives aimed at
supporting the local community. In 2022
TIG financed purchase of showcases
for the Alkatvaam school’s ethnography
museum. TIG built a soccer field in
the township. In 2022 the Company
sponsored participation of Berengovsky
schoolchildren in a local volleyball
tournament.
One more way of TIG’s contribution to
local community is providing support
to local small businesses through
outsourcing and charitable assistance.
TIG regularly has feedback sessions
with the local community on its activity
and development plans.
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:
• Conducting regular meetings with the representatives
of the Association and indigenous communities;
• Supporting the local administration 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.
Projects receiving TIG’s continuous support since 2019:
• “K’ergav” children and adult folk groups;
• Annual local festival “Einev”;
• Voluntary eco-project “K’orgav”.
In 2022 TIG organized and funded the festival "Einev 2022".
“We are committed to make a positive and sustainable contribution to the
economic and social aspects of people’s lives in the region.”
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Annual Report 2022
Tigers Realm Coal
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Annual Report 2022
Tigers Realm Coal
FINANCIAL REPORT
Directors’ Report
24
Corporate Governance Statement
46
Consolidated Statement of Comprehensive Income
53
Consolidated Statement of Financial Position
54
Consolidated Statement of Changes in Equity
55
Consolidated Statement of Cash Flows
56
Notes to the Consolidated Financial Statements
57
Directors’ Declaration
96
Auditor’s Independence Declaration
97
Independent Auditor’s Report
98
Shareholder Information
103
Corporate Directory
105
23
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report
For the year ended 31 December 2022
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 2022.
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. 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
(resigned 23 May
2022)
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).
24
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
1.
Directors, Alternate Director and Company Secretary
Name,
qualifications and
independence
status
Experience, special responsibilities and other directorships
Mr David Swan
Independent
Non-executive
Director
BComm, FCA
(ICAANZ &
ICAEW)
(resigned 15
August 2022)
David Swan was appointed as an Independent Non-Executive Director on 26 August 2020. David has
extensive experience across the natural resources sector and held a number of senior finance, management
and consulting roles, mostly with resource companies in both United Kingdom and Australia 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 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
Independent
Non-executive
Director
BE, ME
(appointed 17
January 2022)
Mr Mitch Jakeman was appointed as an Independent Non-Executive Director on 17 January 2022. He is the
Chairman of the Audit, Risk and Compliance Committee and of the Nomination and Remuneration
Committee. 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.
Company Secretary
Mr David
Forsyth
Company
Secretary
FGIA, FCIS,
FCPA
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.
25
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
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
B
A
B
A
B
Mr Craig Wiggill
11
11
4
4
5
5
Dr Bruce Gray
11
11
4
4
-
-
Mr Owen Hegarty
3
2
3
1
2
-
Mr David Swan
5
5
4
4
3
3
Mr Mitch Jakeman
11
11
3
2
3
3
A = Number of meetings held B = Number of meetings attended
3.
Principal activities
The principal activities of the Group are the identification, exploration, development, mining and sale of coal from deposits in the
Far East of the Russian Federation.
4.
Review of Operations
Business Strategies and Group Objectives
The Group’s objectives encompass the development of the Amaam Coking Coal Deposits, comprising its two, well-located, large
coking coal projects in the Far East of the Russian Federation.
Amaam North: a low-cost starter project providing a fast track to production and earnings, utilising existing
infrastructure and supporting development of the entire Amaam Coking Coal Field; and
Amaam: a large coal resource which will enable scaling TIG production up to 5 million tonnes per annum (“Mtpa”)
from dedicated new infrastructure.
Amaam North
Development of Amaam North started with development of the Fandyushkinsky Field licence AND 15813 TE area (“Project F”),
a part of Amaam North. A Project F Feasibility Study Update was completed in April 2016, subsequent to which the Group raised
funds via a non-renounceable rights issuance, the primary use of proceeds being on the development of Project F. After
completing the necessary initial construction works in the second half of 2016, commercial mining commenced in January 2017.
In September 2018, TIG was granted Exploration and Mining licence No AND 01314 TE over the Zvonkoye deposit,
geographically located next to an eastern extension of Project F. In 2019 TIG applied for a Mining and Excavation Plan
(“TPRM”) for the integrated development of the Fandyushkinskoe Field and Zvonkoye license areas, which was approved in
December 2019. Consequently, future references to Amaam North will refer to the unified development of both license areas.
Further development of Amaam North, which includes an upgrade of mine site infrastructure, the Beringovsky Port and Coal
Terminal and supplemented by a coal handling and preparation plant (“CHPP”), which began processing coal in April 2022, will
enable the Group to produce and sell higher-value coal into the semi–hard coking coal (“SHCC”) markets. These developments
are expected to enable an increase in coal sales up to 2.0Mtpa.
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.
26
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
4.
Review of operations
Business Strategies and Group Objectives (continued)
Amaam Coking Coal Field– World Location Map
27
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
Operating Performance
Key Operating and Financial Indicators for the year ended 31 December 2022 (“2022”) and 2021 (“2021”):
Operating Indicators
(rounded to the nearest thousand tonnes, unless otherwise stated)
Results for 2022
Results for 2021
Coal mined
1,523
1,025
Overburden removed
4,666 kbcm
4,063 kbcm
Stripping ratio
3:1 bcm/t
4:1 bcm/t
Total saleable coal stocks at 31 December
687
567
Total coal sales*, of which:
1,065
911
- Thermal coal sales
798
791
- Semi soft coal sales
267
120
Employees as at 31 December**
423
340
*Including 71kt thermal coal sold domestically without shipment (Year ended 31 December 2021: 13kt).
**Full time equivalent staff.
Key Financial Indicators
(in A$‘000 unless otherwise stated)
Results for 2022
Results for 2021
Revenue from coal sales
185,781
103,944
Cost of coal sold
(121,687)
(59,398)
Gross margin on coal sold
64,094
44,546
EBITDA*
59,015
46,852
Adjusted EBITDA**
59,557
44,313
Net profit / (loss) before tax
53,546
37,956
Average free on board (“FOB”) coal sales price per tonne
A$148.57 (US$99.68)
A$105.79(US$77.41)
Average cost of coal mined and sold per tonne
A$62.09 (US$41.66)
A$41.58 (US$30.43)
Average cost of port handling and stevedoring costs per tonne sold
A$7.44 (US$4.99)
A$6.52 (US$4.77)
Total FOB cost of coal sold***
A$83.84 (US$56.25)
A$54.75 (US$40.06)
*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$14.3 per tonne in 2022 (A$6.65 per tonne in 2021). Does not include freight which is part of cost of coal
sold.
EBITDA and adjusted EBITDA are not defined by AASB and are non-statutory measures. These non-financial measures have not been audited
28
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
The following table summarises the key reconciling items between the Group’s EBITDA, adjusted EBITDA and its profit/(loss)
before income tax:
in A$‘000
Results for 2022
Results for 2021
Profit/(loss) before income tax
53,546
37,956
Add: Net finance costs
(2,068)
2,596
Add: Depreciation
7,537
6,300
EBITDA
59,015
46,852
Add: Royalty expense
308
189
Add: Write-off of property, plant and equipment
234
235
Add: Change in provisions for inventories
-
(2,963)
Add: Share based payments
-
-
Adjusted EBITDA
59,557
44,313
The primary challenge faced by the Group in 2022 related in one way or another to the dramatic deterioration of the geopolitical
situation related to the conflict in Ukraine. As discussed in detail in Note 4 to the Consolidated Financial Statements, the various
economic restrictions enacted with respect to Russia by Australia, the United States, the United Kingdom, and the European
Union as well as certain other countries and the various counter-sanctions enacted by the Russian Federation have created a
number of marketing and operational (primarily supply chain) challenges. During the year, the Group succeeded in establishing
new client relationships as well as alternative supply sources. The challenges are, nevertheless, ongoing, and in particular, the
Group is not able to assess the potential impact of any additional restrictions which may be enacted in the future as the nature of
any future restrictions is not knowable.
During the year ended 31 December 2022, the Company achieved a production level of 1,523 thousand tonnes (“kt”), of which
796 kt were delivered to Beringovsky Port and Coal Terminal (1,025kt and 804kt, respectively in 2021). During the year ended 31
December 2022, the Group sold 1,065kt (911kt in 2021) and generated A$185.781 million in total revenue from the sale and
shipment of coal (2021: A$103.944 million).
The Group had A$4.876 million net cash inflow from operations for the year ended 31 December 2022 (2021: A$23.204 million
net cash inflow). Cash outflows of A$17.572 million on investing activities were incurred for the year ended 31 December 2022
(A$26.242 million was incurred for the year ended 31 December 2021). The Group’s net profit for the year ended 31 December
2022 was A$52.704 million (2021: net profit of A$37.902 million). The Company agreed to a request from a client to defer to
January - March 2023 receipt of payments amounting to A$24 million, net of demurrage and dead freight charges.
The international coal market experienced disruption during 2022. The global post - Covid economic recovery continued, but
normal trade flows were significantly disrupted by sanctions resulting from the military action in Ukraine. Restrictions were
imposed on Russian coal supply to Europe and elsewhere, as well as shipping companies, insurance companies and other service
providers involved in exports of Russian coal. These restrictions and changes to trade flows created improved market conditions
for other supply regions, but created the difficult conditions for Russian coal companies, who were forced to compete very hard
for sales into severely restricted markets under conditions of dramatic cost escalation arising from a limited number of service
providers, particularly for sea-freight.
During 2022 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 9% increase in trans-shipment
volumes to 1,049 kt, a record for the Beringovsky port.
The combined effect of above factors resulted in a positive gross margin of A$64.094 million for the year ended 31 December
2022 (2021: A$44.546 million).
The average margin per tonne of coal sold during the year ended 31 December 2022 was A$60.18/t (US$40.37/t) (2021:
A$(48.90/t) (US$(35.78/t))), the weighted average FOB sales price per tonne (“FOB/t”) being A$148.57/t (US$99.68/t) (2021:
A$105.79/t (US$77.41/t)). The increase in sales price per tonne and FOB cost per tonne is due to sales of washed product.
29
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
4.
Review of operations (continued)
Operating Performance (continued)
Significant investments in coal processing, mining and port assets totalling A$17.572 million during the year ended 31 December
2022 included:
CHPP-related civil works;
Additional mining equipment both to replace aging equipment and to increase capacity;
Construction of fuel farm;
Waste treatment plant in the port;
Acquisition of additional 500t barge
Financial Position
Cash balances
The Group’s cash balance decreased by A$26.341 million over the year to A$7.170 million at 31 December 2022. This decrease
is due to deferral of receipt of payments amounting to A$24 million, net of demurrage and dead freight charges.
Inventory on hand
The carrying amount of the Group’s inventories on hand at 31 December 2022 is A$85.640 million (31 December 2021: A$48.235
million), including A$33.553 million of coal stocks, A$10.968 million in fuel and oils and A$41.119 million of other consumables.
Coal inventories increased by A$14.650 million primarily due to increase in coal stocks by 120kt and CHPP processing cost.
Other consumables increased by A$19.945 million primarily due to increase of spare parts stock because of the current geopolitical
situation and logistic problems: freight prices increased significantly compared to 2021 and those costs are included in cost of other
consumables. Spare parts prices increased due to decreased supply as many companies curtailed operations in Russia in 2022. Part of
the increase is due to CHPP spares, 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.
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 Scanias and other items with a carrying value of A$0.234 million were written off during the year ended 31 December 2022
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 2021: а CAT 740B dump trucks, two scanias, a crusher, an excavator, a snow
removal machine, and telecommunications equipment with the carrying value of A$0.235 million was written off).
Leases
During the year ended 31 December 2022, the Group did not conclude new lease agreements for additional mining and haulage
equipment.
Royalty Agreement liability
After the assessment of the provision for the obligations under the royalty agreements at 31 December 2022, the Group
recognized an increase in the royalty liability of A$1.618 million, of which A$308 million relates to changes arising from the
passage of time and changes in the assumptions, A$1.310 million relates to changes in foreign exchange rates. As at 31 December
2022 the provision amounted to A$20.036 million (At 31 December 2021: A$18.418 million). Refer to Note 21 to the
consolidated financial statements for further details.
30
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
4.
Review of operations (continued)
Financial Position (continued)
Options
During the year ended 31 December 2022, no options were granted, and 8,002,000 options lapsed or were forfeited and have been
removed from the Company’s option register. Total number of options as at 31 December 2022 is Nil.
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 exposes TIG to a range of significant country specific risks
including general economic, regulatory, legal, social and political conditions. These and other country specific risks may affect
TIG’s ability wholly or in part to operate its business in the Russian Federation.
As noted above, with the start of the conflict in Ukraine relations between Australia, the United States, the United Kingdom and
the European Union along with several other countries, on the one hand, and the Russian Federation on the other deteriorated
dramatically. The Group’s assessment of the potential impact of the economic restrictions enacted by all parties is set out in Note
4 to the Consolidated Financial Statements.
COVID-19 Pandemic
The only notable impact on the Group’s operations in 2022 related to the COVID-19 Pandemic was the delayed delivery of the
fifth barge. Primarily as a result of Covid-related restrictions in China, the barge was delivered to Nakhodka in October instead of
June. Consequently, the Group was not able to utilize this barge for loading during the 2022 navigational season.
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).
31
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
4.
Review of operations (continued)
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 United States, the United Kingdom and various
European countries, on the one hand, and the Russian Federation, on the other, have deteriorated dramatically. Please
refer to Note 3 of the Consolidated Financial Statements for detail on the Group’s assessment of the potential impact on
the Group’s prospects.
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.
32
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
4. Review of operations (continued)
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.
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$7.170 million at 31 December 2022. Directors have concluded that cash balances at year end
provide TIG with sufficient liquidity, given cash receipts to be received by March 2023, projected expenditures during the first six
months of 2023 and anticipated sales arrangements. The Company agreed to a request from a client to defer to January - March
2023 receipt of payments amounting to A$24 million, net of demurrage and dead freight charges.
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,
33
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
4.
Review of operations (continued)
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 2022 not otherwise reflected in the accompanying consolidated
financial statements.
6.
Events subsequent to reporting date
There has not been any matter or circumstance occurring subsequent to the end of the reporting period that has significantly
affected, or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group
in future financial years.
7.
Dividends paid or recommended
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the
date of this report.
8.
Likely developments
Ongoing enhancements of port, road and other mine infrastructure will continue during 2023. 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:
Tigers Realm Coal Limited
Ordinary shares
Options over ordinary shares
C Wiggill
5,100,000
-
B Gray
7,825,877,288
-
M Jakeman
-
-
11.
Share Options
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.
34
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
During the year ended 31 December 2022, no options were granted, and 8,002,000 options lapsed or were forfeited and have been
removed from the Company’s option register (For the year ended 31 December 2021: no options issued and 1,905,000 options
lapsed, bringing options issued over ordinary shares in the Company to 8,002,000).
Unissued shares under options
Unissued shares under options as of the date of this report are detailed in Note 23 to the consolidated financial statements.
35
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
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 2022.
(a)
Details of key management personnel
Name
Position
Commencement Date
Directors
Craig Wiggill
Chairman (Non-Executive)
20 November 2012
Bruce Gray
Director (Non-executive)
1 October 2015
Owen Hegarty
Director (Non-executive)
8 October 2010
Valery Doronin
Director (Non-executive)
27 April 2021
Mitch Jakeman
Director (Non-executive)
17 January 2022
David Swan
Director (Non-executive)
26 August 2020
Senior Executives
Dmitry Gavrilin
Chief Executive Officer
1 June 2018
Dale Bender
Chief Financial Officer
1 October 2018
Scott Southwood
General Manager Marketing
13 October 2013
Sergey Efanov
General Manager Operations
15 November 2017
David Forsyth
Company Secretary
8 October 2010
(b)
Changes to key management personnel
Directors
TIG's Non-Executive Director David Swan has resigned from the Board, effective 15 August 2022
TIG's Non-Executive Director Valery Doronin has resigned from the Board, effective 3 February 2022
TIG's Non-Executive Director Owen Hegarty has resigned from the Board, effective 23 May 2022
TIG's Non-Executive Director Mr Mitch Jakeman was appointed 17 January 2022
Executives
There were no changes to Executives during 2022 and 2021.
36
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
12.
Remuneration report – audited (continued)
(c)
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.
2022
2021
2020
2019
2018
Net profit/(loss) attributable to equity
holders of the parent (A$ million)
$52.799
$37.923
$(15.616)
$(18.715)
$10.959
Closing share price (A$)
$0.02
$0.02
$0.01
$0.01
$0.04
(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.
37
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
12.
Remuneration report – audited (continued)
(e)
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 2022, the base fee for Directors was A$57,500 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, $7,000 per annum is also payable to the Director who performs the duties of Chairman of
each Committee.
38
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
12.
Remuneration report – audited (continued)
(h)
Details of the remuneration of the Group’s key management personnel
Details of the nature and amount of each major element of remuneration of each Director of the Company, and the key
management personnel (as defined in AASB 124 Related Party Disclosures) are set out in the following tables.
Short – term
Post-
employment
Name
Cash
Salary and
fees
A$
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
%
2022
Non-executive Directors
C Wiggill
118,540
-
-
11,261
-
129,801
0.00%
B Gray
-
-
-
-
-
-
0.00%
O Hegarty
-
-
-
-
-
-
0.00%
V Doronin
-
-
-
-
-
-
0.00%
T Sitdekov
-
-
-
-
-
-
0.00%
M Jakeman
63,326
-
-
6,016
-
69,342
0.00%
D Swan
84,001
-
-
7,980
-
91,981
0.00%
Sub total
265,867
-
-
25,257
-
291,124
Other key management personnel
D Gavrilin
462,598
-
352,292
-
382,494
1,197,384
0.00%
D Bender
422,813
-
126,331
-
227,793
776,937
0.00%
S Southwood
218,764
-
68,026
-
-
286,790
0.00%
D Forsyth
97,286
-
-
-
-
97,286
0.00%
S Efanov
560,600
-
136,455
-
246,047
943,102
0.00%
Sub total
1,762,061
-
683,104
-
856,334
3,301,499
Total key management
Personnel
2,027,928
-
683,104
25,257
856,334
3,592,623
1.
Includes the value of fringe benefits and other allowances.
2.
In respect of 2022.
3.
During 2021 all the options granted under the previous LTI programme vested. 2022 remuneration includes cash bonuses accrued
under new LTI program.
During the year ended 31 December 2022, other than the remuneration detailed above, key management personnel were neither
entitled to nor did they receive loans or other benefits.
39
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
12.
Remuneration report – audited (continued)
(h)
Details of the remuneration of the Group’s key management personnel
Short – term
Post-
employment
Share -
based
payments
Name
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
%
2021
Non-executive Directors
C Wiggill
100,000
-
-
9,500
-
109,500
0.00%
B Gray
-
-
-
-
-
-
0.00%
O Hegarty
-
-
-
-
-
-
0.00%
R Morgan
-
-
-
-
-
-
0.00%
T Sitdekov
-
-
-
-
-
-
0.00%
D Swan
53,270
5,060
58,330
0.00%
Sub total
153,270
-
-
14,560
-
167,830
Other key management personnel
D Gavrilin
422,691
-
352,292
-
346,118
1,121,101
0.00%
D Bender
263,291
-
126,331
-
202,312
591,934
0.00%
S Southwood
234,778
-
68,026
-
-
302,804
0.00%
D Forsyth
114,164
-
-
-
-
114,164
0.00%
S Efanov
354,366
-
136,455
-
218,525
709,346
0.00%
Sub total
1,389,290
-
683,104
-
766,955
2,839,349
Total key management
Personnel
1,542,560
-
683,104
14,560
766,955
3,007,179
1.
Includes the value of fringe benefits and other allowances.
2.
In respect of 2021.
3.
During 2020 all the options granted under the previous LTI programme vested. 2021 remuneration includes cash bonuses accrued
under new LTI program
40
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
12.
Remuneration report – audited (continued)
(i)
Analysis of performance related elements of remuneration
The following table shows the relative proportions of remuneration packages of the Executive Directors and KMP during the year
ended 31 December 2022, 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
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
%
2022
Other key management personnel
Dmitry Gavrilin, CEO
38.63
29.43
31.94
61.37
Dale Bender, CFO
54.42
16.26
29.32
45.58
Scott Southwood, General Manager Marketing
76.28
23.72
-
23.72
David Forsyth, Company Secretary
100.00
-
-
-
Sergey Efanov, General Manager Project F
59.44
14.47
26.09
40.56
2021
Other key management personnel
Dmitry Gavrilin, CEO
37.70
31.43
30.87
62.30
Dale Bender, CFO
44.48
21.34
34.18
55.52
Scott Southwood, General Manager Marketing
77.53
22.47
-
22.47
David Forsyth, Company Secretary
100.00
-
-
-
Sergey Efanov, General Manager Project F
49.96
19.23
30.81
50.04
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.
41
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
12.
Remuneration report – audited (continued)
(j)
Analysis of bonuses included in remuneration
During and in respect of the years ended 31 December 2022 and 2021, there were A$683,104 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 2022 and 2021, 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 2022, no options over ordinary shares vested (For the year ended 31 December 2021 no
options over ordinary shares vested).
42
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
12.
Remuneration report – audited (continued)
(k)
Analysis of Movement in Share Options
The movement during the reporting period in the number of options over ordinary shares of Tigers Realm Coal Limited shares
held directly, indirectly, or beneficially by the key management personnel and their related entities are set out below.
Name
Held at
1 January
Grante
d as
remun
-
eratio
n
Exerci
-sed
during
year
Forfeited/
Lapsed
during
year
Held at 31
December
Vested at 31 December
Total
Exercisable
Not
exer-
cisabl
e
2022
Non-executive Directors
C Wiggill
-
-
-
-
-
-
-
-
B Gray
-
-
-
-
-
-
-
-
O Hegarty
-
-
-
-
-
-
-
-
V Doronin
-
-
-
-
-
-
-
-
T Sitdekov
-
-
-
-
-
-
-
-
D Swan
-
-
-
-
-
-
-
-
Other key management personnel
D Gavrilin
-
-
-
-
-
-
-
-
D Bender
-
-
-
-
-
-
-
-
D Forsyth
1,906,000
-
-
1,906,000
-
-
-
-
S Southwood
2,475,000
-
-
2,475,000
-
-
-
-
S Efanov
3,621,000
-
-
3,621,000
-
-
-
-
2021
Non-executive Directors
C Wiggill
-
-
-
-
-
-
-
-
B Gray
-
-
-
-
-
-
-
-
O Hegarty
-
-
-
-
-
-
-
-
R Morgan
-
-
-
-
-
-
-
-
T Sitdekov
-
-
-
-
-
-
-
-
D Swan
-
-
-
-
-
-
-
-
Other key management personnel
D Gavrilin
-
-
-
-
-
-
-
-
D Bender
-
-
-
-
-
-
-
-
D Forsyth
1,906,000
-
-
-
1,906,000
1,906,000
1,906,000
-
S Southwood
2,475,000
-
-
-
2,475,000
2,475,000
2,475,000
-
S Efanov
3,621,000
-
-
-
3,621,000
3,621,000
3,621,000
-
43
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
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
%
2022
Non-executive Directors
C Wiggill
-
-
-
0.0
B Gray
-
-
-
0.0
O Hegarty
-
-
-
0.0
V Doronin
-
-
-
0.0
T Sitdekov
-
-
-
0.0
D Swan
-
-
-
0.0
Other Key Management Personnel
D Forsyth
-
-
-
0.0
S Southwood
-
-
-
0.0
S Efanov
-
-
-
0.0
2021
Non-executive Directors
C Wiggill
-
-
-
0.0
B Gray
-
-
-
0.0
O Hegarty
-
-
-
0.0
V Doronin
-
-
-
0.0
T Sitdekov
-
-
-
0.0
D Swan
-
-
-
0.0
Other Key Management Personnel
D Forsyth
-
-
-
0.0
S Southwood
-
-
-
0.0
S Efanov
-
-
-
0.0
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
Vested during
year
Forfeited/ Lapsed
during year
Vesting date
Start
Vesting date
Finish
Number
Grant date
Executives
D Forsyth
648,000
18/10/17
-
-
18/10/19
18/10/22
1,258,000
18/10/17
-
-
18/10/20
18/10/22
S Southwood
842,000
18/10/17
-
-
18/10/19
18/10/22
1,633,000
18/10/17
-
-
18/10/20
18/10/22
S Efanov
1,231,000
18/10/17
-
-
18/10/19
18/10/22
2,390,000
18/10/17
-
-
18/10/20
18/10/22
44
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
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 former
auditor and Hall Chadwick NSW, the Group’s current 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 79 and forms part of the Directors’ report for the year ended 31
December 2022.
This report is made in accordance with a resolution of the Directors
Dated at Melbourne this 23rd day of March 2023.
Signed in accordance with a resolution of the Directors:
__________________________________
Craig Wiggill
Director
45
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
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 23 March 2023 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 2022 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
executive succession planning; and
o
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.
46
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
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 two 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 two of the three Directors are independent: Craig Wiggill 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.
47
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
Corporate Governance Statement (continued)
The Board regularly reviews the independence of each Director in light of interests disclosed and will disclose any change to the
ASX, as required by the ASX Listing Rules.
Independent Professional Advice
All Directors may obtain independent professional advice, at the Company’s cost, in carrying out their duties and responsibilities.
Prior approval from the Chairman or the Board is required before seeking independent professional advice.
Chairman
The Board elects one of its Non-Executive Directors to be the Chairman. The Chairman is responsible for leading the Board,
ensuring Directors are properly briefed in all matters relevant to their role and responsibilities, facilitating Board discussions and
managing the Board’s relationship with the Company’s senior executives. The Recommendations note that the Chairman should
be an independent Director. The current Chairman, Mr Craig Wiggill satisfies the independence recommendation. The role of the
Chairman is separate from that of the CEO. The CEO is responsible for implementing Group strategies and policies.
Orientation Program
The orientation program provided to new Directors and senior executives enables them to actively participate in Board decision
making as soon as possible. It ensures that they have a full understanding of the Group’s financial position, strategies operations,
culture, values and risk management policies. Directors have the opportunity to visit the Group’s business operations and meet
with management to gain a better understanding of the Group’s operations. The Group also supports Directors to undertake
continuing education relevant to the discharge of their obligations as Directors of the Group.
Nomination and Remuneration Committee
The Nomination and Remuneration Committee consists of two 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 Mitch Jakeman.
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 2022. 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.
48
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
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 2022, women comprised 17% (31
December 2021: 19%) 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 two Non-Executive Directors, two of which are 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 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.
49
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
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
effectiveness and efficiency of operations;
o
reliability of financial reporting; and
o
compliance with applicable laws and regulations.
oversee the effective operation of the risk management framework;
recommend to the Board the appointment, removal and remuneration of the external auditors, and review the terms of
their engagement, the scope and quality of the audit and assess the performance of the auditor;
consider the independence and competence of the external auditor on an ongoing basis; and
review and approve the level of non-audit services provided by the external auditors and ensure that they do not adversely
impact on auditor independence.
In fulfilling its responsibilities, the Audit, Risk and Compliance Committee:
receives regular reports from management and the external auditor;
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 2022, comply with accounting standards and
present a true and fair view of the Company’s financial condition and operational results. The statement is required both annually
and semi-annually.
The Board has received and is satisfied with certification provided by the CEO and CFO that the Group’s risk management and
internal control systems are sound and operated effectively in all material aspects in relation to financial reporting risks for the
financial year ended 31 December 2022.
50
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
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. Hall
Chadwick NSW has provided an independence declaration to the Board for the financial year ended 31 December 2022. 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.
51
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Directors’ report (continued)
For the year ended 31 December 2022
Corporate Governance Statement (continued)
Principle 8: Remunerate fairly and responsibly
The Nomination and Remuneration Committee operates in accordance with its charter which is available on the Company
website. The Nomination and Remuneration Committee advises the Board on remuneration and incentive policies and practices
generally and makes specific recommendations on remuneration packages and other terms of employment for executive Directors,
other senior executives and Non-Executive Directors.
The Nomination and Remuneration Committee is chaired by a Non-Executive Director and has three members, three being the
recommended size. Two of the three 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.
52
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Consolidated statement of comprehensive income
For the year ended 31 December 2022
Note
31 December
2022
31 December
2021
A$’000
A$’000
Revenue from coal sales
7
185,781
103,944
Mining and related costs of coal sold
(66,128)
(37,880)
Transhipment and other port costs
(55,559)
(21,518)
Gross margin on coal sold
64,094
44,546
Administrative and other operating expenses
8
(11,013)
(7,054)
Share based payments
23
-
-
Exploration and evaluation expenses
(850)
(106)
Change in provisions for inventories
15
-
2,963
Change in provisions for expected credit losses
(1,142)
(306)
Write off of property, plant and equipment
16
(234)
(235)
Royalty expense
20
(308)
(189)
Other income
931
933
Results from operating activities
51,478
40,552
Net foreign exchange profit/ (loss)
4,129
(697)
Finance costs
(2,061)
(1,899)
Net finance income/ (costs)
2,068
(2,596)
Profit before income tax
53,546
37,956
Income tax expense
10
(842)
(54)
Net Profit
52,704
37,902
Other comprehensive income
Items that may subsequently be reclassified to the profit or
loss
Foreign currency translation differences for foreign operations
6,467
4,612
Total comprehensive income for the period
59,171
42,514
Net Profit is attributable to:
Owners of the Company
52,799
37,923
Non-controlling interest
(95)
(21)
Net Profit for the period
52,704
37,902
Total comprehensive income attributable to:
Owners of the Company
59,266
42,535
Non-controlling interest
(95)
(21)
Total comprehensive income for the period
59,171
42,514
Earnings per share (cents per share)
basic
11
0.40
0.29
diluted
11
0.40
0.29
The notes on pages 37 to 75 are an integral part of these consolidated financial statements.
53
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Consolidated statement of financial position
As at 31 December 2022
Note
31 December
2022
A$’000
31 December
2021
A$’000
Current Assets
Cash and cash equivalents
12
7,170
33,511
Trade and other receivables
14
61,748
17,072
Inventories
15
73,466
46,055
Prepayments
3,686
2,421
Total current assets
146,070
99,059
Non-current assets
Inventories
15
12,174
2,180
Property, plant and equipment
16
86,461
64,470
Total non-current assets
98,635
66,650
Total assets
244,705
165,709
Current Liabilities
Trade and other payables
17
28,454
7,483
Lease liability
19
5,977
5,206
Royalty liability
20
5,097
1,439
Other financial liabilities
21
805
667
Employee benefits
18
3,507
3,678
Total current liabilities
43,840
18,473
Non-current liabilities
Trade and other payables
17
-
137
Lease liability
19
5,406
9,842
Royalty liability
20
14,939
16,979
Other financial liabilities
21
351
1,022
Employee benefits
18
1,623
-
Provision for site restoration
681
562
Total non-current liabilities
23,000
28,542
Total liabilities
66,840
47,015
Net assets
177,865
118,694
Equity
Share capital
22
272,980
272,980
Reserves
21,356
14,889
(Accumulated losses)
(96,594)
(149,393)
Total equity attributable to equity holders of the Company
197,742
138,476
Non-controlling interest
(19,877)
(19,782)
Total equity
177,865
118,694
The notes on pages 37 to 75 are an integral part of these consolidated financial statements.
54
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Consolidated statement of changes in equity
For the year ended 31 December 2022
The notes on pages 37 to 75 are an integral part of these consolidated financial statements.
Note
Share
Capital
(Accumulated
Losses)
Share based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Other
Reserve
Total
Non-controlling
Interest
Total
A$’000
A$’000
A$’000
A$’000
A$’000
A$’000
A$’000
A$’000
Balance as at 1 January 2021
246,594
(187,316)
7,353
(3,385)
6,309
69,555
(19,761)
49,794
Net profit/ (loss)
-
37,923
-
-
-
37,923
(21)
37,902
Other comprehensive income
-
-
-
4,612
-
4,612
-
4,612
Total comprehensive income/ (loss) for the period
-
37,923
-
4,612
-
42,535
(21)
42,514
Issue of ordinary shares
26,492
26,492
26,492
Costs of raising equity
(106)
(106)
(106)
Balance at 1 January 2022
272,980
(149,393)
7,353
1,227
6,309
138,476
(19,782)
118,694
Net profit/ (loss)
-
52,799
-
-
-
52,799
(95)
52,704
Other comprehensive income
-
-
-
6,467
-
6,467
-
6,467
Total comprehensive income/ (loss) for the period
-
52,799
-
6,467
-
59,266
(95)
59,171
Balance at 31 December 2022
272,980
(96,594)
7,353
7,694
6,309
197,742
(19,877)
177,865
55
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
Consolidated statement of cash flows
For the year ended 31 December 2022
Note
31 December
2022
31 December
2021
A$’000
A$’000
Cash flows from operating activities
Cash receipts from customers
146,289
103,177
Cash paid to suppliers and employees
(137,763)
(76,926)
Exploration and evaluation expenditure
(205)
(139)
Interest and financing costs paid
(1,892)
(1,858)
Royalties paid
-
(945)
Income taxes paid
(1,553)
(105)
Net cash from operating activities
13
4,876
23,204
Cash flows from investing activities
Acquisition of property, plant and equipment
(17,572)
(26,242)
Net cash used in investing activities
(17,572)
(26,242)
Cash flows from financing activities
Proceeds from issue of shares
-
25,513
Repayment of lease liabilities
(6,230)
(5,789)
Repayment of other financial liabilities
(921)
(650)
Repayment of borrowings
-
(1,864)
Net cash generated by/ (used in) financing activities
(7,151)
17,210
Net movement in cash and cash equivalents
(19,847)
14,172
Cash and cash equivalents at beginning of the period
33,511
18,879
Effects of exchange rate changes on cash and cash equivalents
(6,494)
460
Cash and cash equivalents at the end of the period
12
7,170
33,511
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: 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).
The notes on pages 37 to 75 are an integral part of these consolidated financial statements.
56
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
`
1.
Reporting entity
Tigers Realm Coal Limited (the “Company” or “TIG”) is a company domiciled in Australia. During the year ended 31
December 2022, the Company’s registered office was 151 Wellington Parade South, East Melbourne, 3002, Australia and its
principal office was 37 Leningradskiy prospect, Moscow, 125167, Russian Federation. The consolidated financial statements as
at and for the year ended 31 December 2022 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.
Basis of preparation
(a)
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 23rd March 2023.
(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
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 2022, the Group had a net profit of A$52.704 million (2021: net profit of A$37.902 million)
and had net cash inflows from operating activities of A$4.876 million (2021: net cash inflows from operating activities of
A$23.204 million).
57
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
Significant accounting policies (continued)
(a)
Going concern basis of accounting
As at 31 December 2022, the Group had cash and cash equivalents of A$7.170 million (31 December 2021: A$33.511 million)
and net current assets of A$102.230 million (31 December 2021 net current assets of A$80.874 million).
In performing the going concern assessment, the Group has taken into consideration general business risks and the impact of
the economic restrictions which have been imposed by Australia, the United States, the United Kingdom and the European
Union as well as some other countries. The nature of economic restrictions which may be imposed at a future date is not
known. Consequently, a risk exists that some restriction or group of restrictions may be imposed in the future that could impact
on the Group’s ability to continue in the ordinary course of business and put in doubt the Group’s ability to continue as a
Going Concern.
The impact of the economic restrictions
The economic restrictions and deteriorating geopolitical situation created certain sales challenges against a backdrop of a
favourable market for coal. Whilst certain of the Group’s traditional customers are no longer purchasing Russian coal, the
Group has, nevertheless, been able to continue to sell coal in Asian markets at prices which are strong by historical standards.
The Group is currently not experiencing a deficit of customers prepared to purchase its coal or ships ready to load coal out of
the Group’s port in Russia. However, the Group’s ability to continue as a going concern is premised upon the assumption that
customers will continue to purchase the Group’s coal and that ships will be able to continue calling at its port in Russia in the
future.
The potential of new economic restrictions impacting the Group’s business aside, the economic restrictions already imposed
have created numerous supply chain challenges for the Group. In response to these supply chain challenges, the Group
initiated a broad-based reassessment of its supply chain in order to establish robust alternatives to traditional vendors who
either no longer service the Russian market are which may plausibly exit the market in the foreseeable future. While this work
is ongoing, the Group has so far identified acceptable alternatives to suppliers which have exited the Russian market, and does
not, thus far, anticipate a material negative impact on the Group’s operations due to having to switch to alternative suppliers for
certain items. The Group’s ability to continue as a Going Concern is, in part, dependent on its ability to continue being able to
source equipment and supplies necessary for its operations.
Furthermore, debt financing, including lease financing for new equipment, has become substantially more expensive. The
increase in the cost of lease financing combined with significant exchange rate volatility has led the Group to conclude that, for
the time being, it is not advisable to utilize lease financing for the acquisition of new equipment. These factors, combined, may
restrict the Group’s ability to expand production in line with previously announced plans.
In response to the above-mentioned economic restrictions, the Government of the Russian Federation has enacted various
retaliatory restrictions. Such restrictions include limitations on capital flows both in the form of intra-group loans and payment
of dividends. Such restrictions may restrict the Group’s ability to pay non-Russia-based suppliers and directors. Most such
payments must be approved in advance by a government commission specifically established for this purpose. Since the
approval mechanism has been established only recently, it is not yet clear to what extent the Group’s ability to transfer funds
within the Group or to pay dividends will be limited.
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;
58
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
Compliance with ongoing drilling obligations in accordance with the terms of the Amaam and Amaam North
licences;
Macroeconomic factors including commodity (specifically coal) prices and exchange rates; and
Availability to access funds as and when requested.
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 current financial position, profitability and liquidity of the Group
Ability of the Group to date to access alternate supply chain options;
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.
(ii)
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a business combination
is measured at fair value, which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group,
liabilities incurred by the Group to the former owners of the acquiree and the equity instruments issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred. The Group measures
goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests in the acquiree; plus
if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the difference is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are
generally recognised in the profit or loss.
59
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
3.
Significant accounting policies (continued)
(b)
Basis of consolidation
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.
(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
60
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
3.
Significant accounting policies (continued)
(c)
Foreign currency
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.
(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.
61
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
3.
Significant accounting policies (continued)
(d)
Financial instruments
(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)
Intangible assets
(i)
Mineral Rights
Acquired mineral rights comprise identifiable exploration and evaluation assets including mineral reserves acquired as part of a
business combination and are recognised at fair value at the date of acquisition. The mineral rights will be reclassified as mine
property and development from commencement of development and amortised when commercial production commences on a
unit of production basis over the estimated economic reserve of the mine.
The mineral rights are subject to impairment testing in accordance with the Group’s policy for exploration, evaluation and
development assets. In the year ended 31 December 2015, all existing mineral rights were written-off. Details of the policy on
assessing the carrying value of non-current assets are disclosed in Note 9.
(ii)
Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included in intangible assets. For the measurement of goodwill at
initial recognition refer Note 3(b)(ii) (business combinations).
Goodwill is measured at cost less accumulated impairment losses. Goodwill is not amortised, however its carrying value is
assessed annually against its recoverable amount, as explained below in Note 3(g) Impairment. Gains and losses on the disposal
of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units
for the purpose of impairment testing. In the year ended 31 December 2015, all existing goodwill was written-off. Details of the
policy on assessing the carrying value of non-current assets are disclosed in Note 9.
(iii)
Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated
amortisation and accumulated impairment losses.
62
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
3.
Significant accounting policies (continued)
(iv)
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to
which it relates. All other expenditure is recognised in profit or loss as incurred.
(v)
Amortisation
Except for goodwill and mineral rights, intangible assets are amortised on a straight-line basis in profit or loss over the
estimated useful lives, from the date they are available for use. The estimated useful life for computer software is three to five
years.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(g)
Impairment of financial assets (including receivables)
The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at
amortised cost or at fair value through other comprehensive income, trade receivables, as well as contract assets. The amount of
expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective
financial instrument.
The Group always recognises lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected
credit losses on these financial assets are estimated using a provision matrix based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the
current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk
since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial
recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL. Lifetime
ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a
financial instrument that are possible within 12 months after the reporting date.
The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of
the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is
based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for
financial assets, this is represented by the assets’ gross carrying amount at the reporting date. For financial assets, the expected
credit loss is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate.
If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous
reporting period, but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group
measures the loss allowance at an amount equal to 12-month ECL at the current reporting date, except for assets for which the
simplified approach was used. The Group recognises an impairment gain or loss in profit or loss for all financial instruments
with a corresponding adjustment to their carrying amount through a loss allowance account.
(h)
Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. The
probability of an outflow of economic benefits is one of the key criteria in determining the recognition and measurement of
legal and constructive obligations:
If the likelihood of an outflow of economic resources is remote, neither disclosure of a contingency nor the
recognition of a provision is made;
If the likelihood of an outflow of economic resources is possible, a contingent liability is disclosed in the financial
statements, unless the acquisition method of accounting for business combinations in Note 3(b)(ii) are applied and a
liability equivalent to the fair value of the future outflows of economic benefits is able to be determined; or
If the likelihood of an outflow of economic resources is probable, a provision is recognised.
Provisions are determined by assessing the present value of the expected future outflow of economic benefits. The discounting
of the expected (probable) future cash flows reflects the current market assessments of the time value of money and the time
value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance charge.
63
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
3.
Significant accounting policies (continued)
(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.
64
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
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 2022:
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 2022 and have not been applied in preparing these consolidated financial statements.
Standard/Interpretation
Effective for annual reporting periods beginning on or after
AASB 2020-1:
Amendments to Australian Accounting
Standards – Classification of Liabilities as Current or Non-
current
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
AASB 2021-7c: 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 2025
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.
65
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
5.
Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair value for financial assets and
liabilities.
When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy based on inputs used in valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the
change occurred.
(a)
Financial assets and liabilities
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of
interest at the reporting date. Fair value is determined at initial recognition and, for financial assets and financial liabilities that
are not measured at fair value, but for which fair value disclosures are required, at each annual reporting date.
Further information about the assumptions made in measuring fair values is included in Note 24.
66
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
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
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.
Amaam Project
The Amaam Project is in the Bering Basin in the Chukotka province, Russia and
consists of the Amaam tenement.
Other
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
Amaam
Project
Total
Reportable
Segments
Other
Total
31 December 2022
A$’000
A$’000
A$’000
A$’000
A$’000
Revenue from the shipment and sale of
coal
185,781
-
185,781
-
185,781
Cost of coal sold
(121,688)
-
(121,688)
-
(121,688)
Change in provisions for bad debt
(1,142)
-
(1,142)
-
(1,142)
Exploration and evaluation expenses
(501)
(349)
(850)
-
(850)
Royalty expense
(308)
-
(308)
-
(308)
Finance costs
(2,061)
-
(2,061)
-
(2,061)
Other segment expenses
(2,621)
(124)
(2,745)
(7,570)
(10,315)
Net foreign exchange gain / (loss)
4,129
-
4,129
-
4,129
Segment result
61,589
(473)
61,116
(7,570)
53,546
Segment assets
244,301
86
244,387
318
244,705
Segment liabilities
(66,496)
(344)
(66,840)
-
(66,840)
31 December 2021
Revenue from the shipment and sale of
coal
103,944
-
103,944
-
103,944
Cost of coal sold
(59,398)
-
(59,398)
-
(59,398)
Change in provisions for inventories
2,963
-
2,963
-
2,963
Change in provisions for bad debt
(306)
-
(306)
-
(306)
Exploration and evaluation expenses
(100)
(6)
(106)
-
(106)
Royalty expense
(189)
-
(189)
-
(189)
Finance costs
(1,899)
-
(1,899)
-
(1,899)
Other segment expenses
(1,889)
(100)
(1,989)
(5,064)
(7,053)
Segment result
43,126
(106)
43,020
(5,064)
37,956
Segment assets
165,444
26
165,470
239
165,709
Segment liabilities
(46,888)
(127)
(47,015)
-
(47,015)
67
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
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.
2022
2021
Revenues
Non-current
assets
Revenues
Non-current
assets
A$’000
A$’000
A$’000
A$’000
Asia
181,039
-
101,965
-
Russia
4,742
98,635
1,979
66,650
Total
185,781
98,635
103,944
66,650
Customer information
Included in revenues from the sale and shipment of coal are revenues of A$150.269 million (2021: A$92.351 million) which
arose from sales to major customers who individually contributed at least 10% of total revenues from sales and shipment of
coal.
7.
Revenue
31 December
2022
31 December
2021
A$’000
A$’000
Revenue from thermal coal sales
100,135
78,119
Revenue from semisoft coal sales
58,094
18,253
Revenue from shipment of coal
27,552
7,572
185,781
103,944
68
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
7.
Revenue (continued)
8.
Administrative and other operating expenses
31 December
2022
31 December
2021
A$’000
A$’000
Wages, salaries and other personnel costs
Contractors and consultants’ fees
(5,166)
(710)
(3,800)
(204)
Accounting and audit fees
(481)
(410)
Insurance
(480)
(253)
Legal fees and compliance costs
(342)
(423)
Taxes and charges
(287)
(382)
ASX listing fees
(108)
(237)
Other
(3,439)
(1,345)
(11,013)
(7,054)
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 on either free on board (“FOB”),
Beringovsky Port or cost and freight (“CFR”) terms. For sales made on FOB basis there is only one performance obligation, which arise
from the delivery of coal on board the vessel. Sales made in accordance with CFR terms differ to FOB as the Company is obliged to pay for
the cost of shipping and other costs necessary to bring the product to the destination port. Accordingly, in CFR sales contracts the
performance obligations arise from the delivery of coal on board the vessel and the provision of shipping services to the customer. For sales
are made on both FOB and CFR basis, the satisfaction of the performance obligation in respect of coal delivery is achieved after the time the
goods have been delivered on board the vessel. Satisfaction of the performance obligation in respect of coal shipping is achieved at the point
of delivery on shore at the destination port.
Preliminary volume and quality of coal shipped are independently measured upon loading the vessel at the Beringovsky Port. Coal sales
contracts include terms in accordance with which the sales price is defined with reference to the initial coal quality parameters, as adjusted
for the results of coal quality tests performed upon delivery of the product to the destination port. If coal does not meet minimum standards,
the shipment may be either rejected or an adjustment made up or down to the initial contract price. Accordingly, in rare circumstances, if the
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.
69
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
9.
Carrying value of non-current assets
Amaam North Project CGU
During the year ended 31 December 2022, the carrying value of non-current assets of Amaam North Project CGU, net of
accumulated depreciation, increased by A$21.991 million to A$86.461 million (As of 31 December 2021 A$64.470 million)
(refer to Note 16 for details).
As at 31 December 2022, the Group concluded that due to:
Production and sales volumes achieved to date; and
Progress in the development of the CHPP project during 2022
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 2022, 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 2022. As the
development of the Amaam Project is not expected in the foreseeable future, as at 31 December 2022, the Group concluded
that there are no indications that asset write-downs recognised in prior periods for the Amaam Project CGU require reversal.
Recognition and measurement: Non-current assets
The carrying amounts of the Group’s non-financial assets excluding goodwill are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For
goodwill the recoverable amount is estimated at each reporting date.
The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest groups of assets that generate cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in
a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit
from the synergies of the combination.
An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment losses
recognised in respect of cash-generating units are allocated first to reduce the carrying value of any goodwill allocated to the
cash generating units and then to reduce the carrying amount of the other assets in the cash generating unit (group of units) on a
pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss
is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
70
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
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 2022 and 2021 is set out below:
31 December
2022
31 December
2021
A$’000
A$’000
Income/(Loss) before tax
53,546
37,956
Income tax benefit using the domestic
corporation tax rate of 30%
16,064
11,387
Changes in income tax expense due to:
Effect of different tax rates of subsidiaries operating in
foreign jurisdictions
(15,581)
(12,005)
Non-deductible loss resulting from change in royalty
agreement liability
39
(20)
Non-deductible expenses/(non-assessable income)
81
160
Current period tax losses for which no deferred tax asset was
recognised
239
532
Total income tax expense
842
54
31 December
2022
31 December
2021
A$’000
A$’000
Current tax expense
842
54
Deferred tax expense/(benefit)
-
-
Total income tax expense
842
54
As at 31 December 2022 and 2021, 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.
Recognition and measurement: Income taxes
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.
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.
71
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
10.
Income tax expense (continued)
Recognition and measurement: Income taxes (continued)
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the
end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on
the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is
probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be
realised.
Tax exposure
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and
whether additional taxes and interest may be due. The Group believes that its accruals for tax liabilities are adequate for all open
tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies
on estimates and assumptions and may involve a series of judgements about future events. New information may become available
that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will
impact tax expense in the period that such a determination is made.
Tax consolidation
The Company and its wholly-owned Australian resident entity are part of a tax consolidated group. As a consequence, all
members of the tax consolidated group are taxed as a single entity. The head entity within the tax consolidated group is Tigers
Realm Coal Limited.
72
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
11.
Earnings/(Loss) per share
31 December
2022
31 December
2021
Cents
Cents
Earnings/(Loss) per share
Basic earnings/(loss) per share – cents
a
0.40
0.29
Diluted earnings/(loss) per share – cents
b
0.40
0.29
(a)
Basic earnings/(loss) per share
The calculation of basic loss per share at 31 December 2022 was based on the profit attributable to ordinary equity holders of
the Company of A$52.799 million (At 31 December 2021: profit of A$37.923 million) and a weighted average number of
ordinary shares outstanding during the period ended 31 December 2022 of 13,066,702,368 (For the year ended 31 December
2021: 12,947,151,981).
(b)
Diluted profit/(loss) per share
The calculation of diluted profit/(loss) per share at 31 December 2022 and 2021 is the same as basic profit/(loss) per share. As
at 31 December 2022, the Company had Nil outstanding options over ordinary shares (31 December 2021: 8,002,000 options),
which have been excluded from the calculation of diluted earnings per share because they are anti-dilutive for the reporting
period.
12.
Cash and cash equivalents
31 December
2022
31 December
2021
A$’000
A$’000
Bank balances
7,170
33,511
Cash and cash equivalents
7,170
33,511
All cash and cash equivalents are available for use by the Group.
13.
Reconciliation of profit/(loss) for the year to net cash flows from operating activities
31 December
2022
31 December
2021
A$’000
A$’000
Cash flows from operating activities
Profit/ (Loss) for the period
52,704
37,902
Adjustments for:
Foreign exchange loss
(4,129)
697
Share based payments
24
-
-
Royalty expense
21
308
189
Depreciation expense
7,537
6,300
Change in provisions for inventories
-
(2,963)
Change in provisions for expected credit losses
1,142
306
Write off of property, plant and equipment
234
235
Income tax expense
10
842
54
58,638
42,720
Movements in working capital
Change in trade and other receivables
(42,433)
(1,013)
Change in inventory
(31,112)
(20,884)
Change in prepayments
(947)
(1,742)
Change in employee provisions
970
2,170
Change in trade and other payables
19,760
1,953
Net cash generated/(used) in operating activities
4,876
23,204
73
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
14.
Trade and other receivables
31 December
2022
31 December
2021
A$’000
A$’000
Trade and other receivables
47,585
6,583
VAT and GST receivable
15,305
10,795
Provision for expected credit losses
(1,142)
(306)
61,748
17,072
As of 31 December 2022 there was A$1.142 million provision for expected credit losses. (At 31 December 2021: A$0.306). In
January-February 2023 TIG received A$7,456 million of past due receivables.
15.
Inventories
31 December
2022
31 December
2021
A$’000
A$’000
Coal inventories at cost (no provision as At 31 December 2021)
33,553
18,902
Fuel at cost
10,968
8,159
Other consumables: net of provisions of A$0.400 million (At 31
December 2021 A$0.314 million)
41,119
21,174
85,640
48,235
Current
73,466
46,055
Non-current
12,174
2,180
Total
85,640
48,235
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$2.963 million was
reversed.
Non-current inventories represented by coal inventories which are not expected to be realized within the next twelve-month
period from the reporting date.
Recognition and measurement: Inventories
Inventories are valued at the lower of cost and net realisable value and upon initial recognition on the weighted average cost
basis. The cost of raw materials and consumable stores is the purchase price. The cost of partly-processed and saleable products
is generally the cost of production, including:
labour costs, materials and contractor expenses which are directly attributable to the extraction and processing of ore;
the depreciation of mining properties and leases and of property, plant and equipment used in the extraction and
processing of ore; and
production overheads.
Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs
necessary to make the sale.
Inventories are periodically assessed for the existence of slow moving and obsolete stocks and adjustments to the recoverable
amount recognised as necessary.
Inventories which are planned to be realized later than in 12 months from the year end are classified as non-current.
74
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
16.
Property, plant and equipment
Assets in construction
Land &
Buildings
Mine infrastructure
Plant& Equipment
Fixtures & Fittings
Total
A$’000
A$’000
A$’000s
A$’000
A$’000
A$’000
Cost
As at 1 January 2021
12,005
2,387
5,444
31,008
177
51,021
Additions
36,005
633
8
1
30
36,677
Disposals
(64)
-
-
(26)
(1)
(91)
Transfers
(13,236)
2,727
1,771
8,551
187
-
Effect of movement in exchange rates
1,262
221
350
1,914
15
3,762
As at 1 January 2022
35,972
5,968
7,573
41,448
408
91,369
Additions
22,002
925
76
787
47
23,837
Disposals
(5)
-
-
-
(5)
(10)
Transfers
(35,280)
2,248
-
32,883
149
-
Effect of movement in exchange rates
4,632
805
995
5,394
54
11,880
As at 31 December 2022
27,321
9,946
8,644
80,512
653
127,076
Depreciation and impairment
As at 1 January 2021
-
(890)
(3,839)
(13,659)
(88)
(18,476)
Depreciation charge for the period
-
(437)
(1,151)
(5,367)
(75)
(7,030)
Disposals
-
-
-
25
1
26
Write off
(42)
-
-
(193)
-
(235)
Effect of movement in exchange rates
-
(61)
(243)
(874)
(6)
(1,184)
As at 1 January 2022
(42)
(1,388)
(5,233)
(20,068)
(168)
(26,899)
Depreciation charge for the period
-
(876)
(907)
(8,234)
(146)
(10,163)
Disposals
-
-
-
-
2
2
Write off
(139)
-
-
(95)
-
(234)
Effect of movement in exchange rates
-
(188)
(694)
(2,416)
(23)
(3,321)
As at 31 December 2022
(181)
(2,452)
(6,834)
(30,813)
(335)
(40,615)
Net book value:
At 31 December 2022
27,140
7,494
1,810
49,699
318
86,461
At 31 December 2021
35,930
4,580
2,340
21,380
240
64,470
75
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
16.
Property, plant and equipment (continued)
During the year ended 31 December 2022, two scanias and other items with a carrying value of A$0.234 million
was written-off due to its present condition (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).
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 2022 is A$20.153 million (2021: A$19.162 million)
including A$2.470 million in land & buildings, A$17.683 million in plant& equipment. For the year ended 31
December 2022 the depreciation charge relating to right-of-use asset amounted to A$5,202 million (2021:
A$4.144 million), including A$0.250 million and A$4.952 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 construction of an asset.
Once an undeveloped mining project has been determined as commercially viable and approval to mine has been given,
expenditure other than that on land, buildings, fixtures and fittings, plant and equipment and capital work in progress is
capitalised under “Mine Infrastructure”. Development costs incurred after the commencement of production are
capitalised to the extent they are expected to give rise to a future economic benefit.
Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item
if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be
measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of
property, plant and equipment are recognised in profit or loss as incurred.
Depreciation
Property, plant and equipment is depreciated over the lesser of its useful life or over the remaining life of the mine
where there is no reasonable alternative use for the asset. The useful lives and residual values for material assets and
categories of assets are reviewed annually and changes are reflected prospectively. Depreciation commences when an
asset is available and ready for its intended use. The major categories of property, plant and equipment are depreciated
on a straight-line basis, except for mining assets, which are depreciated on a units of production basis.
Straight-line basis
Assets within operations for which production is not expected to fluctuate significantly from one year to another or
which have a physical life shorter than the related mine are depreciated on a straight-line basis.
The estimated useful lives are as follows:
Buildings
10 – 20 years
Plant & equipment
3 – 10 years
Fixtures & fittings
3 – 10 years
Units of production basis
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
76
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
17.
Trade & other payables
31 December
2022
31 December
2021
A$’000
A$’000
Trade payables and accrued expenses
28,394
7,564
Taxes payable
60
56
28,454
7,620
Current
28,454
7,483
Non-current
-
137
Total
28,454
7,620
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
costs during the development of a mine (or pit), before production commences, are generally expensed as incurred except
when capitalised as part of the cost of construction of the mine (or pit) and subsequently amortised over the life of the mine
(or pit) on a units of production basis only where the below criteria are all met:
it must be probable that there will be an economic benefit in a future accounting period because the stripping activity
has improved access to the ore body;
it must be possible to identify the “component” of the orebody for which access has been improved; and
it must be possible to reliably measure the costs that relate to the stripping activity.
Production phase stripping can give rise to two benefits: the extraction of ore in the current period and improved access to ore
which will be extracted in future periods. When the cost of stripping which has a future benefit is not distinguishable from the
cost of producing current inventories, the stripping cost is allocated to each of these activities based on a relevant production
measure using a life-of-component strip ratio. The ratio divides the tonnage of waste mined for the component for the period
either by the quantity of ore mined for the component or by the quantity of minerals contained in the ore mined for the
component. Stripping costs for the component are deferred to the extent that the current period ratio exceeds the life of
component ratio.
77
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
18.
Employee Benefits
31 December
2022
31 December
2021
A$’000
A$’000
Provision for annual leave
1,636
1,098
Provision for bonuses
3,026
1,792
Provision for salary and related costs payable
421
742
Provision for other employment benefits
47
46
5,130
3,678
31 December
2022
31 December
2021
A$’000
A$’000
Current employee benefits
3,507
3,678
Non – current employee benefits
1,623
-
5,130
3,678
19.
Lease Liability
31 December
2022
31 December
2021
A$’000
A$’000
Maturity analysis:
Payable not later than one year
6,430
6,640
Payable later than one year, not later than five years
6,179
10,724
Payable later than five years
6,068
5,430
18,677
22,794
Less: future interest
(7,294)
(7,746)
Total lease liabilities
11,383
15,048
Current
5,977
5,206
Non-current
5,406
9,842
11,383
15,048
Recognition and measurement: Employee benefits
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within twelve months of the
reporting date represent obligations resulting from employee’s services provided to reporting date and are calculated at
undiscounted amounts based on remuneration wage and salary rates that the Company expects to pay as at the reporting date,
including related on-costs, such as workers’ compensation insurance and payroll tax.
A liability is recognised for the amount expected to be paid under short-term incentive bonus plans if the Group has a present legal
or constructive obligation to pay this amount resulting from past service provided by the employee, and the obligation can be
estimated reliably.
78
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
Movement in lease liabilities are as follows:
31 December
2022
31 December
2021
A$’000
A$’000
Opening balance of lease liability
15,048
7,929
New lease agreements entered during the year
836
10,397
Lease payments
(6,230)
(5,171)
Net effect of movement in exchange rates
1,729
1,893
Total lease liability recognised at end of year
11,383
15,048
The Group leases directly from vendors, Russian banking institutions and Russian financing companies various
mining and port equipment.
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:
Currency
Effective
interest rate
Year of
maturity
Vendor lease liabilities
RUB
10.15-22.63%
2021-2026
Banking institution lease liabilities
RUB
12.23-15.55%
2024
Russian Financing Company lease liabilities
RUB
9.67-30.30%
2026
Other lease liabilities
RUB
15.2%
2067
Recognition and measurement: Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-
use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-
term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. The lease liability is
initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by
using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate
The lease liability is presented as a separate line in the consolidated statement of financial position. The lease liability is
subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest
method) and by reducing the carrying amount to reflect the lease payments made
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or
before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. If a lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a
purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease. The right-of-use assets are presented within property, plant and equipment line
in the consolidated statement of financial position.
79
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
20.
Royalty Liability
31 December
2022
31 December
2021
A$’000
A$’000
Gross royalty liability, in US$ dollars
23,457
23,457
Gross royalty liability, in A$ dollars
34,623
32,329
Effect of discounting
(14,587)
(13,911)
20,036
18,418
31 December
2022
31 December
2021
A$’000
A$’000
Opening balance of royalty liability
18,418
18,063
Royalty expense arising from:
-
the passage of time
308
1,987
-
the change in discount rate
-
(2,735)
-
the change in other assumptions
-
937
Payments made during the year
-
(945)
Effect of movement in exchange rates
1,310
1,111
Closing balance of royalty liability
20,036
18,418
Current
5,097
1,439
Non-current
14,939
16,979
20,036
18,418
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$25 million discounted using a post-tax real discount rate of
10.5% at 31 December 2022.
While the amount of provision recognised represents the best estimate of the expenditure required to settle the
obligations under existing royalty agreements, this estimate is based on estimates of possible outcomes and
financial effect, which were determined by the application of management’s judgement on a number of key
assumptions used in determining the amount of provision, including:
the discount rate used;
the probability of revenue cash flows;
timing of coal sales and
the likelihood of achieving forecast coal sales prices.
80
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
20.
Royalty Liability (continued)
Amaam Royalty Liability
No liability was recognised at 31 December 2022 (31 December 2021: Nil) in relation to Amaam Project royalty
arrangements as the development of the Amaam Project is not expected in the foreseeable future.
21.
Other financial liabilities
31 December
2022
31 December
2021
A$’000
A$’000
Current other financial liabilities
805
667
Non – current other financial liabilities
351
1,022
1,156
1,689
Movement other financial liabilities are as follows
31 December
2022
31 December
2021
A$’000
A$’000
Opening balance of other financial liabilities
1,689
2,217
Payments
(754)
(618)
Net effect of movement in exchange rates
221
90
Total other financial liabilities recognised at end of year
1,156
1,689
Recognition and measurement: Royalty liabilities
The Group, from time to time, enters into legal agreements with various parties as a result of which there will be future outflows of
economic benefits, including obligations which arise from the execution and realisation of sales agreements (“Royalty Agreement”).
In applying the recognition and measurement criteria outlined above in respect of provisions in Note 3(h) to royalty agreements,
management perform an assessment of the probability of the outflow of economic benefits, which it has deemed to be influenced by the
following factors and circumstances, when assessing the disclosure, recognition and measurement of Royalty Agreement obligations:
Existence of a licence which provides the legal capacity to mine and sell product which is the subject of Royalty Agreements;
The performance of a feasibility study or other similar project assessment which provides an indication of the economic
benefits accruing to the Group from implementing a project or part thereof, incorporating the consideration of macroeconomic
factors and project specific assumptions on income and expenditures;
General macroeconomic conditions (including but not limited to financial and commodity markets -specifically the market for
coal);
Economic resources are in place which enable the realisation of a plan to extract and sell ore, as defined in a feasibility study
(as amended and updated). Economic resources include both financial, human & other resources necessary to realise strategic
plans;
Board approval to commence those activities necessary to develop and mine ore with the view of commencing commercial
production; and
Actual operations confirm those assumptions upon which the decision made to commence mining operations were made
(including the ability to realise any sales agreements executed).
As noted above, where the likelihood of an outflow of economic benefits is deemed to be remote, no disclosures are made. Where
possible, disclosure is made of a contingent liability and where probable a provision is recognised and measured.
81
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
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
22.
Share capital
31 December
31 December
2022
2021
A$’000
A$’000
Share Capital
290,069
290,069
Costs of raising equity
(17,089)
(17,089)
272,980
272,980
(i)
Movements in shares on issue:
No of shares
Issue price
A$
A$’000
Opening balance at 1 January 2021
9,758,492,642
263,577
Movements in 2021
Issue of ordinary shares – Entitlement Offer 2020
3,295,102,126
0.008
26,361
Issue of ordinary shares – STI bonuses paid
13,107,600
0.01
131
Opening balance at 1 January 2022
13,066,702,368
290,069
Movements in 2022
Issue of ordinary shares – Entitlement Offer 2020
Issue of ordinary shares – STI bonuses paid
-
-
-
-
-
-
Closing balance at 31 December 2022
13,066,702,368
290,069
Recognition and measurement: Sale and leaseback transactions
The Group, from time to time, enters into legal agreements with various parties whereby it transfers an asset to another entity
(the buyer-lessor) and leases that asset back.
The Group applies the requirements for determining when a performance obligation is satisfied in AASB 15 “Revenue from
Contracts with Customers” to determine whether the transfer of an asset is accounted for as a sale of that asset.
If the transfer of an asset by the Group satisfies the requirements of AASB 15 to be accounted for as a sale of the asset, then the
Group measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset
that relates to the right of use retained by the seller-lessee. The Group recognises the amount of any gain or loss that relates to
the rights transferred to the buyer-lessor.
If the transfer of an asset by the Group does not satisfy the requirements of AASB 15 to be accounted for as a sale of the asset,
the Group continues to recognise the transferred asset and recognises a financial liability equal to the transfer proceeds.
82
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
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 2022, no options were granted, and 8,002,000 options lapsed or were forfeited and have
been removed from the Company’s option register. Total number of options as at 31 December 2022 is Nil (For 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).
23.
Share based payments
(a)
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
There were no options granted during the year ended 31 December 2022 (year ended 31 December 2021: Nil).
There are Nil vested and exercisable options at 31 December 2022 (31 December 2021: 8,002,000). There were
no options exercised during the years ended 31 December 2022 and 31 December 2021.
83
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
23.
Share based payments (continued)
Movements in outstanding options
2022
2021
Number of
Options
Weighted
Average
Exercise Price
A$
Number of
Options
Weighted
Average
Exercise Price
A$
Balance at the beginning of the year
8,002,000
0.113
9,907,000
0.113
Granted
-
-
-
-
Forfeited/lapsed
(8,002,000)
0.113
(1,905,000)
0.113
Exercised
-
-
-
-
Balance at the end of the year
-
-
8,002,000
0.113
Vested and exercisable at year end
-
-
8,002,000
0.113
(c)
Summary of options granted under the Option Plan
Details of share options outstanding at 31 December 2022 are detailed below:
2022
2021
Date of issue
Number
of
Options
Average
Exercise Price
Number of
Options
Average
Exercise Price
A$
A$
17 April 2015
-
-
-
-
17 April 2015
-
-
-
-
11 June 2015
-
-
-
-
11 June 2015
-
-
-
-
18 October 2017
-
-
2,721,000
0.080
18 October 2017
-
-
5,281,000
0.130
Balance at the end of the year
-
-
8,002,000
0.113
During the year ended 31 December 2022, no options were granted, and 8,002,000 options lapsed or were forfeited and
have been removed from the Company’s option register. Total number of options as at 31 December 2022 is Nil.
24.
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
84
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
24.
Risk management and financial instruments (continued)
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are
included throughout these consolidated financial statements.
(i)
Credit risk
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group’s receivables from customers.
(ii)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
(iii)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates,
commodity prices and equity prices will affect the Group’s income or the value of its holdings of
financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return. For the Group currency risk arises
from transactions in foreign currencies, predominantly US Dollars (USD), and Russian Roubles (RUB).
For the Group interest rate risk arises from the exposure to Australian cash deposit rates relating to cash
and cash equivalents. For the Group commodity price risk affects the valuation of the Royalty Agreement
Liability.
(iv)
Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with
the Group’s processes, personnel, technology and infrastructure and from external factors other than
credit, liquidity and market risks such as those arising from legal and regulatory requirements and
generally accepted standards of corporate behaviour. Operational risks arise from all of the Group’s
operations.
The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and
damage to the Group’s reputation with overall cost effectiveness. The primary responsibility for the
development and implementation of controls to address operational risk is assigned to the Group’s senior
management. This responsibility is supported by the development of the Group Policies and Code of
Conduct.
(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.
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.
85
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
24.
Risk management and financial instruments (continued)
(c)
Financial instruments
The Group holds the following financial instruments:
31 December
31 December
2022
2021
A$’000
A$’000
Financial assets
Cash and cash equivalents
7,170
33,511
Trade and other receivables
46,443
6,277
53,613
39,788
Financial liabilities
Trade and other payables
28,454
7,620
Leases liabilities
11,383
15,048
Loans payable
-
-
Other financial liabilities
1,156
1,689
40,993
24,357
(d)
Accounting classifications and fair values
The following table shows the carrying amounts of financial assets and liabilities.
31 December 2022
Carrying amount
Loans &
Receivables
Other financial
liabilities
Total
A$’000
Financial assets not measured at fair value
Cash and cash equivalents
7,170
-
7,170
Trade and other receivables
46,443
-
46,443
53,613
-
53,613
Financial liabilities not measured at fair value
Trade and other payables
-
28,454
28,454
Loans payable
-
-
-
Lease liabilities
-
11,383
11,383
Other financial liabilities
-
1,156
1,156
-
40,993
40,993
31 December 2021
Carrying amount
Loans &
Receivables
Other financial
liabilities
Total
A$’000
Financial assets not measured at fair value
Cash and cash equivalents
33,511
-
33,511
Trade and other receivables
6,277
-
6,277
39,788
-
39,788
Financial liabilities not measured at fair value
Trade and other payables
-
7,620
7,620
Loans payable
-
-
-
Lease liabilities
-
15,048
15,048
Other financial liabilities
-
1,689
1,689
-
24,357
24,357
86
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
24.
Risk management and financial instruments (continued)
(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.
Carrying amount
2022
A$’000
2021
A$’000
Cash and cash equivalents
7,170
33,511
Trade and other receivables
46,443
6,277
53,613
39,788
Geographical information
The Group’s maximum exposure to credit risk for Trade and other receivables at the reporting date by
geographical region was:
Carrying amount
2022
A$’000
2021
A$’000
Asia and the Russian Federation
46,443
6,277
Australia
-
-
46,443
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:
2022
A$’000
2021
A$’000
Coal customers
46,443
6,277
Other
-
46,443
6,277
Impairment losses
The ageing of the Group’s Trade and other receivables at the reporting date was:
Gross
Impaired
Gross
Impaired
2022
A$’000
2022
A$’000
2021
A$’000
2020
A$’000
Not past due
-
-
-
-
Past due 0-30 days
46,443
-
6,277
-
Past due 31-120 days
-
-
-
-
Past due 121 days to one year
1,142
(1,142)
306
(306)
More than one year
-
-
-
-
47,585
(1,142)
6,583
(306)
As of 31 December 2022 there was A$1.142 million provision for expected credit losses. (At 31 December 2021:
A$0.306). In January-February 2023 TIG received A$7,458 million of past due receivables.
87
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
24.
Risk management and financial instruments (continued)
(f)
Liquidity risk
Exposure to liquidity risk
Management monitors the exposure to liquidity risk on an on-going basis. Prudent liquidity risk management
implies maintaining sufficient cash reserves to meet the on-going operational requirements of the business. It is
the Group’s policy to maintain sufficient funds in cash and cash equivalents. Furthermore, the Group monitors its
cash requirements and raises appropriate funding as and when required to meet such planned expenditure.
The following are the contractual maturities of financial liabilities.
Contractual cashflows
Carrying
amount
Total
6 months
or less
6-12
months
1-2 years
2-5 years
More
than 5
years
31 December 2022
A$’000
A$’000
A$’000
A$’000
A$’000
A$’000
A$’000
Non-derivative financial
liabilities
Trade and other payables
28,454
28,454
28,454
-
-
-
-
Lease liabilities
11,383
18,677
2,648
3,782
3,261
2,918
6,068
Other financial liabilities
1,156
1,365
136
840
389
-
-
40,993
48,496
31,238
4,622
3,650
2,918
6,068
31 December 2021
Non-derivative financial
liabilities
Trade and other payables
7,620
7,620
7,483
-
-
137
-
Lease liabilities
15,048
22,795
2,029
4,611
5,725
5,000
5,430
Other financial liabilities
1,689
2,149
162
781
862
344
-
24,357
32,564
9,674
5,392
6,587
5,481
5,430
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:
USD
2022
A$’000
RUB
2022
A$’000
USD
2021
A$’000
RUB
2021
A$’000
Cash and cash equivalents
12
5,594
401
32,348
Trade and other receivables
40,827
20,921
5,113
11,959
Trade and other payables
(10,238)
(18,216)
(681)
(6,939)
Loans payable
-
-
-
-
Lease liabilities
-
(11,383)
-
(15,048)
Other financial liabilities
-
(1,156)
-
(1,689)
Net exposure
30,601
(4,240)
4,833
20,631
88
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
24.
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
Reporting date
spot rate
2022
2021
2022
2021
USD
1.4368
1.3307
1.4760
1.3780
RUB
0.0208
0.0181
0.0210
0.0185
Sensitivity analysis
A weakening of the AUD, as indicated, against the USD and RUB at 31 December 2022 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
31 December 2022
USD (10% movement)
3.400
3,400
(2,782)
(2,782)
RUB (10% movement)
(471)
(471)
385
385
31 December 2021
USD (10% movement)
537
537
(439)
(439)
RUB (10% movement)
2,292
2,292
(1,876)
(1,876)
(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:
Carrying amount
2022
2021
Fixed rate instrument
A$’000
A$’000
Financial assets
-
-
Financial liabilities
(12,539)
(16,737)
(12,539)
(16,737)
Variable rate instruments
Financial assets
1
776
Financial liabilities
-
-
1
776
89
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
25.
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$3.208 million are primarily comprised of A$513 million for CHPP construction, A$155
installation of storage tank of light oil products, acquisition of spare parts (At 31 December 2021: 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$0.660 million for CHPP constructio).
26.
Contingencies
Deed of cross guarantee
Under the terms of the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the Company has
entered into an approved deed of cross guarantee of liabilities with the subsidiary identified in Note 32.
Tax contingencies in the Russian Federation
Russian tax legislation is subject to varying interpretations and changes, which can occur frequently.
Management’s interpretation of such legislation as applied to the transactions and activities of the Group may be
challenged by the relevant regional and federal authorities. Management believes that the Group has adequately
provided for tax liabilities based on its interpretation of the applicable tax legislation. However, the relevant
authorities may have differing interpretations, and the effect on the financial report could be significant if such
interpretations are realised.
27.
Related parties’ disclosure
(a)
Identity of related parties
Balances and transactions between the company and its subsidiaries, which are related parties, have been
eliminated on consolidation and are not disclosed in this note. The remuneration of key management personnel is
disclosed in Note 29.
As disclosed in Note 18, On 4 February 2021 outstanding loan payable to Dr Bruce Gray and interest accrued
thereon was settled in full.
There were no transactions with other related parties during the years ended 31 December 2022 and 2021.
It is the Group’s policy that where transactions are undertaken with related parties, they are done so on an arm’s
length basis.
28.
Key Management Personnel Disclosures
(a)
Compensation of key management personnel
The key management personnel compensation included in “Administration expenses” (see Note 8) and “Share-
based payments” (see Note 23) is as follows:
2022
2021
A$
A$
Short-term employee benefits
2,711,032
2,225,664
Long-term employee benefits
856,334
766,955
Post-employment benefits
25,257
14,560
Share-based payments
-
-
3,592,623
3,007,179
90
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
(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
2022
Directors
C Wiggill
5,100,000
-
-
-
5,100,000
B Gray
7,825,877,288
-
-
-
7,825,877,288
O Hegarty
66,412,029
-
-
-
66,412,029
T Sitdekov
-
-
-
-
-
D Swan
-
-
-
-
-
V Doronin
-
-
-
-
-
Other key management personnel
S Southwood
-
-
-
-
-
D Forsyth
22,468,970
-
-
22,468,970
D Gavrilin
16,388,169
-
-
-
16,388,169
D Bender
-
-
-
-
-
(c)
Movements in shares
Balance at
1 January
Acquisitions
Sales
Other
Changes
Balance at
31 December
2021
Directors
C Wiggill
5,100,000
-
-
-
5,100,000
B Gray
5,145,349,665
2,680,527,623
-
-
7,825,877,288
O Hegarty
60,412,029
6,0000,000
-
-
66,412,029
R Morgan
-
-
-
-
-
T Sitdekov
-
-
-
-
-
D Swan
-
-
-
-
-
Other key management personnel
S Southwood
-
-
-
-
-
D Forsyth
21,867,673
601,297
-
-
22,468,970
D Gavrilin
7,246,377
9,141,792
-
-
16,388,169
D Bender
-
-
-
-
-
91
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
29.
Group entities
Significant subsidiaries
Country of
Ownership Interest
Incorporation
2022
2021
Parent entity
Tigers Realm Coal Limited
Australia
Subsidiaries
TR Coal International Limited
Australia
100%
100%
Tigers Realm Coal (Cyprus) Pty Ltd
Cyprus
100%
100%
Greaterbay Larnaca Finance (Cyprus) Pty Ltd
Cyprus
100%
100%
Eastshore Coal Holding Limited
Cyprus
80%
80%
Telofina Holdings Ltd
Cyprus
100%
100%
Rosmiro Investments Limited
Cyprus
100%
100%
Anadyrsky Investments Limited
Cyprus
100%
100%
Northern Pacific Coal Company
Russia
80%
80%
Beringpromugol LLC
Russia
100%
100%
Port Ugolny LLC
Russia
100%
100%
Bering Ugol Investments LLC
Russia
100%
100%
BeringPromservice LLC
Russia
100%
-
Beringpromtrading LLP
Kazakhstan
100%
-
TIG Trading DMCC
UAE
100%
-
30.
Parent entity disclosures
As at and throughout the financial year ended 31 December 2022, the parent entity of the Group was Tigers
Realm Coal Limited. Information relating to the parent entity follows:
31 December
2022
31 December
2021
A$’000
A$’000
Results of parent entity
Loss for the period
-
-
Total comprehensive loss
-
-
Financial position of parent entity
Current assets
-
776
Non-current assets
130,800
130,024
Total assets
130,800
130,800
Current liabilities
-
-
Total liabilities
-
-
Net Assets
130,800
130,800
Total equity of the parent entity comprising
Share capital
272,980
272,980
Reserves
7,353
7,353
(Accumulated deficit)
(149,533)
(149,533)
Total equity
130,800
130,800
Contingent liabilities of the parent entity
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.
92
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
31.
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 2022 is set out below.
Statement of comprehensive income and retained earnings
31 December
2022
31 December
2021
A$’000
A$’000
Share based payments
-
-
Administrative expenses
(1,896)
(1,729)
Results from operating activities
(1,896)
(1,729)
Net foreign exchange gain/(loss)
(281)
4,684
Finance expense
-
-
Finance income
71
53
Net finance expense
(210)
4,736
Profit before income tax
(2,106)
3,008
Income tax expense
-
-
Net Profit
(2,106)
3,008
Other comprehensive income
Foreign currency translation differences for foreign operations
-
-
Income tax on other comprehensive income
-
-
Total comprehensive profit for the period
(2,106)
3,008
Accumulated deficit at beginning of year
(189,320)
(192,328)
Accumulated deficit at end of year
(191,426)
(189,320)
93
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
31.
Deed of cross guarantee (continued)
31 December
2022
A$’000
31 December
2021
A$’000
Current Assets
Cash and cash equivalents
1
776
Trade and other receivables
121
467
Prepayments
855
326
Total current assets
977
1,569
Non-current assets
Property, plant and equipment
-
-
Investments in subsidiaries
132,916
129,658
Total non-current assets
132,916
129,658
Total assets
133,893
131,227
Current Liabilities
Trade and other payables
1,639
435
Loan payables
-
-
Employee provisions
46
59
Total current liabilities
1,685
494
Total liabilities
1,685
494
Net assets
132,208
130,733
Equity
Share capital
272,980
272,980
Reserves
50,654
47,073
(Accumulated deficit)
(191,426)
(189,320)
Total equity
132,208
130,733
94
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
32.
Non-controlling interest
No change in the non-controlling interests in the Eastshore and the Amaam project occurred during the years
ended 31 December 2022 and 2021.
33.
Auditors’ Remuneration
Details of the amounts paid to the former auditor, Deloitte, and related network firms and Group’s current
auditor, Hall Chadwick NSW, for audit and non-audit services provided during the year are set out below.
31 December
2022
31 December
2021
A$
A$
Audit services:
Audit and review of financial reports Hall Chadwick NSW
190,000
-
Audit and review of financial reports Deloitte Australia
79,380
137,350
Audit and review of financial reports Deloitte Overseas
214,725
243,218
484,105
380,568
Services other than statutory audit
Other services
Taxation compliance and advisory services Deloitte
Australia
118,073
26,881
Taxation compliance services and advisory services
Deloitte Overseas
-
66,823
118,073
93,704
602,178
474,272
34.
Events after the reporting period
There has not been any matter or circumstance occurring subsequent to the end of the reporting period that has
significantly affected, or may significantly affect the operations of the Group, the results of those operations or the state
of affairs of the Group in future financial years.
95
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
Directors’ declaration
For the year ended 31 December 2022
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 75 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 2022 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.
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.
3.
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.
4.
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 23rd day of March 2023.
________________________________________________
Craig Wiggill
Director
96
Annual Report 2022
Tigers Realm Coal
97
Annual Report 2022
Tigers Realm Coal
98
Annual Report 2022
Tigers Realm Coal
99
Annual Report 2022
Tigers Realm Coal
100
Annual Report 2022
Tigers Realm Coal
101
Annual Report 2022
Tigers Realm Coal
102
Annual Report 2022
Tigers Realm Coal
Tigers Realm Coal Limited
Notes to the consolidated financial statements
For the year ended 31 December 2022
SHAREHOLDER INFORMATION
1.
Top 20 Shareholders as at 10 February 2023
Number of shares
% of Total
YEADON INVESTMENTS PTY LTD ATF YEADON TRUST
4,824,423,317
36.92
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2,890,957,374
22.12
BV MINING HOLDING LIMITED
2,377,541,065
18.20
RDIF INVESTMENT MANAGEMENT LLC
1,036,224,898
7.93
NAMARONG INVESTMENTS PTY LTD
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