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Annual Report 30 June 2013
The Waterberg Coal Company Limited
(formerly Range River Gold Limited)
and Controlled Entities
ABN 64 065 480 453
Annual Report 30 June 2013
CORPORATE DIRECTORY
Directors Auditors
Mr. Brian McMaster (Executive Chairman) HLB Mann Judd
Mr. Jonathan Hart (Executive Director) Level 9
Mr. Stephen Miller (Executive Director) 575 Bourke Street
Mr. Scott Funston (Executive Director) Melbourne, VIC 3000
Mr. Daniel Crennan (Non-Executive Director)
Stock Exchange Listing
Company Secretary The Waterberg Coal Company Limited shares
Mr. Jonathan Hart are listed on the Australian Securities
Exchange and the Johannesburg Stock
Registered Office and Principal Place of Exchange, the home branch being Melbourne
Business ASX and JSE code: WCC
Level 1
330 Churchill Avenue
Subiaco, WA 6008
Australia
Telephone: + 618 9200 4243
Facsimile: + 618 9200 4469
Share Registry
Australia
Computershare Investor Services Pty Ltd
Yarra Falls, 452 Johnson Street
Abbotsford, VIC 3067
Telephone: 1300 787 272
Facsimile: + 613 9473 2500
South Africa
Computershare Investor Services Pty Ltd
70 Marshall Street
Johannesburg 2001
DIRECTORS' REPORT
The directors of The Waterberg Coal Company (the 'Company') and its controlled entities (the 'Group' or
'Waterberg Coal') present their report of the Group for the year ended 30 June 2013. In order to comply with
the provisions of the Corporations Act 2001, the directors report as follows:
Directors
The names and details of the Group's directors in office during the financial year and until the date of this
report are as follows. Directors were in office for this entire period unless otherwise stated.
Mr. Brian McMaster Executive Chairman
Mr. McMaster is a Chartered Accountant and has over 20 years' experience in the area of corporate
reconstruction and turnaround/performance improvement. Mr. McMaster's experience includes numerous
reorganisations and turnarounds, including being instrumental in the recapitalisation and listing of 12
Australian companies. His experience includes significant working periods in the United States, South
America, Asia and India.
Mr. McMaster is currently a Director of Caravel Energy Limited (appointed 2 December 2011), Wolf Petroleum
Limited (appointed 24 April 2012), Lindian Resources Limited (appointed 20 June 2011) Paradigm Metals
Limited (appointed 14 September 2012), Black Star Petroleum Limited (appointed 9 August 2012), Firestone
Energy Limited (appointed 14 June 2013) and Castillo Copper Limited (appointed 2 September 2013). He has
not held any other listed directorships in the past three years. Mr. McMaster is also a director in venture
capital and advisory firm Garrison Capital Pty Limited.
Mr. Jonathan Hart Executive Director and Company Secretary
Mr. Hart did his articles at Perth based law firm, Steinepreis Paganin where he worked until November 2011.
Mr Hart's experience includes due diligence investigations, general corporate and commercial drafting, public
and private mergers and acquisitions, general corporate advice in relation to capital raising, Corporations Act
and ASX compliance, Australian Financial Services licenses, managed investment schemes and anti-money
laundering compliance.
Mr. Hart has a bachelor of laws and commerce from Murdoch University in Western Australia. Mr Hart was
previously a director of Caravel Energy Limited (appointed 26 March 2012, resigned 3 September 2013). He
has not held any other listed directorships in the past three years.
Mr. Stephen Miller Executive Director (appointed 5 April 2013)
Mr Miller has 25 years' experience investing and executing corporate finance, mergers and acquisitions
opportunities in the resources sector.
Mr Miller established Resource Venture Capital Partners (RVCP) which is dedicated to investment
opportunities in the natural resources sector. RVCP is involved in corporate reorganizations and
restructurings, direct investments plus substantial debt and equity capital raisings for project start-ups,
developments, and corporate takeovers.
Mr Miller has also been a director, founder and chief executive officer of a number of successful resource
companies listed in the Australian and North American exchanges including East Africa Gold Corporation,
Western Metals Limited and Defiance Mining Corporation.
Mr. Miller is currently a director (appointed 14 June 2013) and Chief Executive Officer (appointed 4 July 2013)
of Firestone Energy Limited. He has not held any other listed directorships in the past three years.
Mr. Scott Funston Finance Director (appointed 5 April 2013)
Mr. Funston is a qualified Chartered Accountant and Company Secretary with more than 10 years' experience
in the mining industry and the accounting profession. His expertise is financial management, regulatory
compliance and corporate advice. Mr Funston possesses a strong knowledge of the Australian Securities
Exchange requirements and currently assists a number of resources companies operating throughout
Australia, South America, Europe and Asia with financial accounting, stock exchange compliance and
regulatory activities.
Mr Funston is currently a Director of Avanco Resources Limited (appointed 17 March 2009), Lindian
Resources Limited (appointed 5 May 2011), Castillo Copper Limited (appointed 19 November 2012), and
Highfield Resources Limited (appointed 2 November 2012). He has not held any other listed Directorships
over the past three years
Mr. Daniel Crennan Non-Executive Director
Mr. Crennan completed his Articles at Griffith Hack Patent and Trade Mark Attorneys, Lawyers. He also
completed a research internship at the International Criminal Tribunal for former Yugoslavia in the Hague
under Judge Richard May. Daniel co-authored the Law Council of Australia submission to the Joint Standing
Committee on Treaties in relation to the establishment of the International Criminal Court. Whilst undertaking
his law degree, Mr. Crennan studied Public International Law at Leiden University, the Netherlands. Mr.
Crennan appears primarily in major commercial disputes or prosecutions conducted by regulators.
Mr Crennan is currently a director of Haranga Resources Limited (appointed 28 March 2013) and Castillo
Copper Limited (appointed 21 May 2013). Mr Crennan was previously a director of Hunnu Coal Limited
(appointed 31 December 2009, resigned 2 November 2011). He has not held any other listed directorships in
the past three years.
Interests in the shares and options of the Group
At the date of this report, the interests of the directors in the shares and options of The Waterberg Coal
Company Limited were:
Fully Paid Shares Unlisted Options
Directors 2013 2012 2013 2012
B. McMaster 2,350,774 2,000,000** 8,750,000* -
J. Hart 250,000 100,000 300,000 -
S. Miller 27,203,125 - - -
D. Crennan 100,000 100,000 - -
S. Funston 200,000 - 3,750,000* -
*Included in Mr Funston's and Mr McMasters security holdings are their interests in options held by Garrison Capital Pty Ltd of which they
are shareholders.
**Reflects the effect of share consolidations.
Nature of operations and principal activities
The principal activities of the Group are coal and mineral exploration in South Africa and mineral exploration in
South Australia.
Operating results for the year
The profit for the year was $6,888,940 (2012: loss of $3,176,055).
Dividends
No dividend is recommended nor has one been declared or paid since the end of the financial year.
Review of financial condition
The cash flow statement highlights an increase in cash and cash equivalents in the year ended 30 June 2013
of $7,554,807. Operating cash outflows totalled $4,358,566 (2012: Outflow of $5,907,508).
The Group has a net assets position of $17,552,781 (2012: Company net liabilities position of $24,453,242).
Corporate structure
The Waterberg Coal Company is a company limited by shares that is incorporated and domiciled in Australia.
Share options
As at the date of this report, there were 52,007,462 unissued ordinary shares under options (52,007,462 at the
reporting date). The details of the options at the date of this report are as follows:
Number Exercise Price $ Expiry Date
68,712 12.00 31 March 2014
23,187,500 0.20 31 December 2014
3,751,250 0.20 31 December 2014
25,000,000 0.20 31 December 2016
52,007,462
On 26 April 2013, 25,000,000 unlisted options exercisable at 20c before 31 December 2016 were issued to
Garrison Capital Pty Limited (and or nominees) as consideration for corporate advisory services.
In April 2013, 23,187,500 unlisted options exercisable at 20c before 31 December 2014 were issued to
investors (two free attaching options for every placement share acquired). No other options were issued
during the financial year.
The issued options in the Group were consolidated on a 1 for 60 basis on 17 July 2012 and on a 1 for 10
basis on 9 April 2013. The exercise price for the options was amended at an inverse proportion to this ratio in
accordance with ASX Listing Rule 7.22.1.
On 23 September 2013, Waterberg Coal issued 3,751,250 options exercisable at $0.20 with an expiry of 31
December 2014 under the prospectus dated 25 July 2013.
No option holder has any right under the options to participate in any other share issue of the Group or any
other entity. No options were exercised during the financial year or since the end of the financial year.
Review of Operations
During the year the Company made significant changes to its state of affairs as outlined below which culminated
in being readmitted to the official list of the Australian Securities Exchange on 25 September 2013.
Other than these significant changes the Company continued with the process of compiling all historical
geological, geochemical and drilling data from its tenements in South Australia. It is anticipated that the data
compilation will be completed shortly, allowing the Company to undertake a target generation exercise and
critically evaluate the potential of the tenements.
Significant changes in the state of affairs
Recapitalisation Proposal
On 8 December 2011, Range River Gold Limited (Range River) (now named The Waterberg Coal Company
Limited) agreed to the recapitalisation proposal presented by Garrison Capital Pty Ltd (Garrison Capital) for
the restructure and recapitalisation of Range River. As a result, Messrs Stephen Longley, David McEvoy and
Simon Theobald of PPB Advisory (Deed Administrators) and Range River entered into a deed of company
arrangement (DOCA), and subsequently Range River and Garrison Capital entered into a recapitalisation
deed implementing the recapitalisation proposal set out below.
The recapitalisation proposal set out in the recapitalisation deed included:
(a) a consolidation of the Range River shares on a 1 for 60 basis such that 2,178,187,039 existing
shares be consolidated to approximately 36,303,117 Range River shares (Consolidation);
(b) the consolidation of the options on a 1 for 60 basis such that 116,728,125 options be consolidated to
approximately 1,945,467 options and the exercise price of each option increases by a multiple of 60;
(c) a capital reduction by applying approximately $82,523,237, being a portion of the accumulated
losses of Range River, against a corresponding amount paid up on Range River's share capital
which is considered permanently lost (Capital Reduction);
(d) the placement offer to certain investors of 140,000,000 Range River shares at an issue price of
$0.005 per Range River share to raise $700,000 (the Placement Offer);
(e) the offer to the public of 150,000,000 Range River shares at an issue price of $0.02 per Range River
share to raise $3,000,000 (the Public Offer);
(f) the transfer of all of Range River's material assets, except for South Australian exploration licences
EL 5221, EL 4197 and EL 4445 (the Tenements), to the creditors' trust for distribution to creditors
(Available Assets);
(g) the payment of $2,005,000 to the creditors' trust to extinguish all liabilities, contingent liabilities,
obligations, warranties and long term commitments of Range River capable of being released by a
deed of company arrangement; and
(h) application to ASX for reinstatement of the Range River shares to quotation on the ASX and ASX
providing conditional approval.
On 17 July 2012, Range River completed the Placement Offer and the Public Offer and received $3,700,000
in subscriptions. Range River also completed the Consolidation and the Capital Reduction on 17 July 2012.
On 24 July 2012, the recapitalisation of Range River and the effectuation of the DOCA were completed, which
resulted in the recognition of a gain on settlement of approximately $22 million (note 28) and control of Range
River passed to the directors Mr Brian McMaster, Mr Jonathan Hart and Mr Daniel Crennan.
Takeover Offer
As announced on 17 December 2012, Waterberg Coal made a takeover offer (Takeover Offer) in respect of
all of the issued share capital in Firestone Energy Limited (Firestone).
Waterberg Coal closed the takeover offer on Monday, 23 September 2013 resulting in Waterberg Coal
acquiring 1,148,632,708 fully paid ordinary shares in the capital of Firestone (FSE Shares), being a 32.36%
interest therein. In addition, Waterberg Coal acquired 480,000,000 FSE Shares from Sekoko Resources
(Proprietary) Limited (Sekoko Resources) outside of the Takeover Offer, being a 13.52% interest therein.
As a result, Waterberg Coal holds 1,620,513,874 FSE Shares, being a cumulative 45.88% interest in the total
FSE Shares on issue.
Ariona Acquisition
On 2 April 2013, Waterberg Coal announced that it had completed the acquisition of Ariona Company SA
(Ariona) (Acquisition) in consideration for the issue of 125,000,000 fully paid ordinary shares in the
Company (Shares) to Ariona's sole shareholder, Haworth Finance Limited (Haworth) (or its nominees).
Ariona is a company incorporated in the Republic of Seychelles and is a special purpose vehicle representing
a consortium of international institutional and private investors focusing on investing in the Waterberg Coal
Project.
At completion of the Acquisition, Haworth directed Waterberg Coal to issue the Shares to beneficiaries of a
discretionary trust of which Haworth was the trustee (Haworth Trust). The beneficiaries of the Haworth Trust
include entities and individuals which have provided financial or other support to Ariona.
Ariona was party to several agreements pursuant to which it:
(a) acquired 480,000,000 FSE Shares from Sekoko Coal (Proprietary) Limited (Sekoko) and Sekoko
Resources in consideration of $4,800,000 pursuant to the share purchase agreement dated 13 June
2012 between Ariona, Sekoko and Sekoko Resources for the acquisition by Ariona of 480,000,000
FSE Shares and a 25% interest in Sekoko (as amended from time to time) (Share Purchase
Agreement);
(b) acquired a 10% interest in the Waterberg Coal Project from Sekoko indirectly through the
subscription for a 25% interest in Sekoko (Sekoko currently holds a 40% interest in the joint venture)
in consideration for $21,950,000 pursuant to the Share Purchase Agreement; and
(c) subscribed for convertible notes in Firestone valuing $5,000,000 which are convertible into a
maximum of 200,000,000 FSE Shares upon conversion (including conversion of capitalised interest)
pursuant to the investment agreement dated 23 July 2012, between Ariona, FSE, BBY Nominees
Pty Ltd and Jaguar Funds Management Pty Ltd pursuant to which Ariona acquired the FSE
Convertible Notes (as amended from time to time) (Investment Agreement).
Ariona also entered into a loan agreement with Celtic Capital Pty Ltd (Celtic Capital) on or about 28 January
2013, whereby Celtic Capital agreed to loan A$2,500,000 (Loan Amount) to Ariona on customary commercial
terms. As at the date of this report, Ariona has repaid $1,000,000 to Celtic Capital.
The Company's Interest in the Waterberg Coal Project
The Waterberg Coal Project is currently held through a joint venture between Firestone and Sekoko Coal
(Proprietary) Limited (Sekoko), who have the following joint venture interests:
(a) Firestone 60%; and
(b) Sekoko 40%.
As a result of the Takeover Offer and the acquisition by the Company of Ariona Company SA (which holds a
25% interest in Sekoko), the Company has the following interest in the Waterberg Coal Project:
(c) a 27.53% indirect interest through its shareholding in Firestone (being 45.88% of
Firestone's 60% interest); and
(d) a further 10% indirect interest through its 25% shareholding in Sekoko (being 25% of Sekoko's 40%
interest).
Accordingly, the Company holds a total indirect interest of 37.53%.
Facility
On 26 March 2013, the Company executed the convertible facility agreement entered into between Waterberg
Coal and The Standard Bank of South Africa (SBSA) dated 26 March 2013 (Convertible Facility
Agreement). On or about 10 April 2013, WCC drew down the entire $35,000,000 facility the subject of the
Convertible Facility Agreement. The facility was used to complete the transactions detailed in (a) and (b)
above under the heading Ariona Acquisition. The surplus of $8,500,000 has been allocated to the expenses
of the offer of Shares pursuant to this prospectus dated 25 July 2013 (Prospectus), working capital and funds
on deposit.
SBSA is the arranger, facility agent, lender, security trustee and security agent under the Convertible Facility
Agreement. SBSA is South Africa's leading project finance bank.
WCC General Meeting held on 27 March 2013 (General Meeting)
On 27 March 2013, all resolutions pursuant to the General Meeting were approved. As a result, the company
changed its name to The Waterberg Coal Company Limited (previously Range River Gold Limited) and
effected a consolidation of its share capital on a 1:10 basis.
Placements
On 9 April 2013, after receiving shareholder approval at the General Meeting, Waterberg Coal issued
10,375,000 Shares and 5,187,500 WCC unlisted options (exercise price $0.20, expiry date 31 December
2014) to raise $2,075,000.
In addition, as shareholders also approved at that General Meeting, on 11 April 2013, Waterberg Coal issued
842,470 Shares (on 22 March 2013 Waterberg Coal issued 81,575,305 Shares on a pre-consolidation basis.
This issue was ratified at the General Meeting) and 18,000,000 WCC unlisted options (exercise price $0.20,
expiry date 31 December 2014) to raise a further $168,494.
JSE Listing
Waterberg Coal continued to progress with its secondary listing on the Alternate Exchange (AltX) division of JSE
Limited (JSE). The purpose of this was to enable South African FSE shareholders to accept Shares as
consideration for their FSE Shares if they accepted the Takeover Offer.
Director Appointments
On 5 April 2013, Mr Stephen Miller joined the WCC Board as an Executive Director and Mr Scott Funston as
Finance Director.
Significant events after the balance date
Prospectus
Waterberg Coal lodged with the ASIC a re-compliance prospectus for an offer of up to 50,000,000 Shares at an
issue price of $0.20 per WCC Share to raise up to $10,000,000 together with one (1) free attaching listed option
exercisable at $0.20 and expiry of 31 December 2014 for every two (2) Shares subscribed for (Offer).
The prospectus had a minimum subscription of $1,500,000 and the prospectus was a re-compliance prospectus
for the purposes of satisfying Chapters 1 and 2 of the ASX Listing Rules and to satisfy ASX requirements for re-
listing following a change to the nature and scale of the Company's activities as a result of the Ariona Acquisition.
On 23 September 2013, Waterberg Coal closed the Offer and confirmed to the market that it had received
applications for 7,502,500 Shares and 3,751,250 options exercisable at $0.20 with an expiry of 31 December
2014 under the Offer.
ASX Listing
On 25 September 2013, Waterberg Coal's Shares were reinstated to quotation on the ASX. 3,751,250 options
exercisable at $0.20 with an expiry of 31 December 2014 issued under the Offer were also listed.
Takeover
The Group closed the takeover offer on 23 September 2013 resulting in the acquisition of 1,148,632,708
shares in Firestone Energy Limited (32.36% interest).
Loan advanced
On 30 August 2013, the Group agreed to lend Firestone Energy Limited $3 million, to be used for financing
obligations in relation to the Waterberg Coal Project. The loan is interest free and unsecured.
Likely developments and expected results
Development and mining activities at the Waterberg Coal Project are expected to commence during the first
quarter of 2014.
Environmental regulation and performance
The Group is subject to environmental regulations under both Commonwealth and State legislation in
Australia in relation to its exploration and operating activities.
The directors are not aware of any breaches during the period covered by this report.
Indemnification and insurance of directors, officers and auditors
The Group has agreed to indemnify and keep indemnified the current directors against all liabilities incurred by
the directors as a director of the Group and all legal expenses incurred by the directors as a director of the
Group.
The indemnity only applies to the extent and in the amount that the directors are not indemnified under any
other indemnity, including an indemnity contained in any insurance policy taken out by the Group, under the
general law or otherwise. The indemnity does not extend to any liability:
- to the Group; or
- arising out of conduct of the directors involving a lack of good faith.
The total amount of insurance premiums paid has not been disclosed due to confidentiality reasons.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the directors and officers in their capacity as directors and officers of the Group, and any
other payments arising from liabilities incurred by the directors and officers in connection with such
proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the
directors and officers or the improper use by the directors and officers of their position or of information to gain
advantage for themselves or someone else or to cause detriment to the Group. It is not possible to apportion
the premium between amounts relating to the insurance against legal costs and those relating to other
liabilities. The insurance policy outlined above does not allocate the premium paid to each individual director
and officer of the Group.
Directors' meetings
Number of Directors Number of Directors
meetings eligible meetings
to attend attended
B McMaster 3 3
D Crennan 3 3
J Hart 3 3
S Miller 2 1
S Funston 2 1
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of
The Waterberg Coal Company Limited support and have adhered to the principles of sound corporate
governance, where possible. The Board recognises the recommendations of the Australian Securities
Exchange Corporate Governance Council, and considers that Waterberg Coal is in compliance with those
guidelines to the extent possible, which are of importance to the commercial operation of a junior listed
resources company. During the financial year, shareholders continued to receive the benefit of an efficient and
cost effective corporate governance policy for the Group. The Group's Corporate Governance Statement and
disclosures are contained elsewhere in the annual report.
Auditor's Independence and Non-Audit Services
The Directors received the auditors' independence declaration as required under section 307c of the
Corporations Act 2001, a copy of which is included within this report.
Non-audit services provided by the auditors of the consolidated entity during the year are detailed in Note 31
of the financial report. The Directors are satisfied that the provision of the non-audit services during the year
by the auditor did not compromise the general principles relating to auditor independence in accordance with
APES110, Code of Ethics for professional accountants set by the Accounting Professional and Ethics
Standards Board.
Proceedings on behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group for all or part of those proceedings. No proceedings have been brought or
intervened in on behalf of the Group with leave of the Court under section 237 of the Corporation Act 2001.
REMUNERATION REPORT (AUDITED)
This Remuneration Report outlines remuneration arrangements of directors and key management of the
Group in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Information contained in the remuneration report has been audited.
Remuneration committee
The full Board acts as the Remuneration Committee and is responsible for determining and reviewing
remuneration arrangements for the Board and executives (until the Company came out of voluntary
administration, the administrators acted as the Board).
The Remuneration Committee assesses the nature and amount of remuneration of executives on a periodic
basis by reference to relevant employment market conditions with the overall objective of maximising
stakeholders' benefit from the retention of a high quality, high performing Board and executive team.
Remuneration philosophy
The performance of the Group depends upon the quality of its directors and executives. To prosper, the Group
must therefore attract, motivate and retain highly skilled directors and executives.
To this end, the Group embodies the following principles in its remuneration framework:
- provide competitive rewards to attract high calibre executives;
- reasonableness, fairness and consideration of market guidance;
- link executive rewards to shareholders' value;
- have a proportion of total executive's remuneration 'at risk';
- transparency and shareholder approval of compensation arrangements; and
- determine performance hurdles for variable executive remuneration.
Remuneration structure
In accordance with best practice corporate governance, non-executive director and executive remuneration
are structured differently and managed separately.
Director remuneration
Objective
The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract
and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Structure
The Group's Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive
directors shall be determined from time to time by a general meeting. The latest determination was at the
Extraordinary General Meeting held on 9 December 2010 when shareholders approved an aggregate
remuneration of $500,000 per year with effect from 1 January 2011.
The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is
reviewed annually. The Board considers fees paid to non-executive directors of comparable companies when
undertaking the annual review process. The remuneration of the Chairman and directors for the periods ended
30 June 2013 and 30 June 2012 is detailed in Tables 1 and 2 of this report.
The Chairman, Brian McMaster, receives an annual consulting fee on a monthly basis. His services may be
terminated by either party at any time. Executive Directors, Jonathan Hart, Stephen Miller and Scott Funston,
are paid an annual consulting fee on a monthly basis. Their services may be terminated by either party at any
time. The Non-executive director, Daniel Crennan, receives an annual consulting fee on a monthly basis. His
services may be terminated by either party at any time.
Remuneration consists of the following key elements:
- fixed remuneration (consulting fees); and
- variable remuneration:
- short term incentive (STI); and
- long term incentive (LTI).
Fixed remuneration
Objective
Fixed remuneration is reviewed annually by the Remuneration Committee. The process consists of a review of
the Group's and individual performance, relevant comparative remuneration in the market and where
necessary, seeking external advice on policies and practices. As noted above, the Remuneration Committee
may have access to external advice independent of management.
Structure
Directors are given the opportunity to receive some of their fixed (primary) remuneration in a variety of forms
including cash and fringe benefits. It is intended that the manner of payment chosen will be optimal for the
recipient without creating additional cost for the Group. The fixed remuneration component of the KMP is
detailed in Tables 1 and 2.
Variable remuneration short term incentive (STI)
Objective
The objective of the STI program is to link the achievement of the Group's operational targets with the
remuneration received by the executives charged with meeting those targets. The total potential STI available
is set at a level so as to provide sufficient incentive to the executive to achieve the operational targets and
such that the cost to the Group is reasonable in the circumstances.
Structure
Actual STI payments granted to each executive depend on the extent to which specific targets set at the
beginning of the financial year are met. The targets consist of a number of Key Performance Indicators (KPI)
covering financial, non-financial, corporate and individual measures of performance. On an annual basis,
after consideration of performance against KPI, the Remuneration Committee in line with its responsibilities
determines the amount if any of the short term incentive to be paid to each executive.
Variable remuneration long term incentive (LTI)
Objective
The objective of the Executive Share Option Plan is to reward executives in a manner that aligns their
remuneration with the creation of shareholder wealth. As such, LTI grants are made to executives who are
able to influence the generation of shareholder wealth and thus have an impact on the Group's performance
against long term goals.
Structure
Options are granted under the Executive Share Option Plan that has been approved by shareholders. Options
are granted under the scheme for no consideration, usually for terms of up to five years. Options granted
under the scheme carry no right to dividends or voting. When exercised, each option is convertible into one
ordinary share. Shares issued as a result of options being exercised, rank pari passu in all respects with
previously issued fully paid ordinary shares. Option holders cannot participate in new issues of capital that
may be offered to shareholders during the currency of the options prior to the exercise of the option. Prior to
any new pro rata issue of shares to shareholders, option holders are notified by the Group and are allowed ten
business days before the record date to exercise their options. The exercise price of options is determined by
the Board.
Performance of shareholders wealth
In considering the Group's performance and benefits for shareholder wealth, the Board has regard to the
following indices in respect of the current financial year and the previous three financial years:
As at 30 June 2013 2012 2011 2010
Profit / (Loss) per share (cents) 1.00 (8.75) (2.14) (0.49)
Share price (centes) * ** ** 1.6
* suspected but last traded at 2 cents
** suspended
Remuneration of key management personnel
Details of the nature and amount of each element of the emolument of each Director and Executive of the
Group for the financial year are as follows:
Table 1: Remuneration for the year ended 30 June 2013
Post Share Perfor-
Short Term Employ- based Total mance
ment payment related
Salary Super- Options* Termination
and fees Bonus annuation Benefit
$ $ $ $ $ $ %
Non-executive directors
D Crennan 43,500 - - - - 43,500 -
Sub-total non-executive directors 43,500 - - - - 43,500 -
Executive directors
B McMaster* 82,500 - - - - 82,500 -
J Hart 83,500 - - - - 83,500 -
S Miller (appointed 5 April 2013) 15,000 - - - - 15,000 -
S Funston (appointed 5 April 2013)* 9,000 - - - - 9,000 -
190,000 - - - - 190,000
Total 233,500 - - - - 233,500
*As noted in the Directors report, options were issued to Garrison Capital Pty Ltd (and or nominees) in which Mr McMaster and Mr
Funston hold a beneficial interest in.
Table 2: Remuneration for the year ended 30 June 2012
Post Share Perfor-
Short Term Employ- based Total mance
ment payment related
Salary Super- Options Termination
and fees Bonus annuation Benefit
$ $ $ $ $ $ %
Non-executive directors
D Crennan (appointed 12 April 2012) - - - - - - -
J Hart (appointed 12 April 2012) - - - - - - -
K Barassi (resigned 13 April 2012) - - - - - - -
P Fowler (resigned 13 April 2012) - - - - - - -
Sub-total non-executive directors - - - - - - -
Chairman
B McMaster (appointed 12 April 2012) - - - - - - -
K Tuckwell (resigned 13 April 2012) - - - - - - -
- - - - - -
Other key management personnel
P Bibby (made redundant 31 January 2012) 208,331 - 18,900 - 378,000 605,231 -
M Boon (resigned 25 January 2012) 185,354 - 11,621 - - 196,975 -
K Bowyer (made redundant 7 November
2011) 106,830 - 15,169 - 141,523 263,522 -
B Michaelidis (resigned 25 May 2012) 215,800 - 43,851 - 28,600 288,251 -
Sub-total executive KMP 716,315 - 89,541 - 548,123 1,353,979
Total 716,315 - 89,541 - 548,123 1,353,979
Service Agreements
The Group has entered a service agreement for certain administrative services and office space for a term of
two years and for the provision of corporate advisory services for a term of two years with Garrison Capital Pty
Ltd, a company of which Mr McMaster and Mr Funston are Directors and shareholders. The Group is required
to give three months written notice to terminate the agreement.
End of the Remuneration Report (Audited)
Signed in accordance with a resolution of the Board of Directors
Brian McMaster
Executive Chairman
30 September 2013
AUDITOR'S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of The Waterberg Coal Company Limited for the year ended
30 June 2013, I declare that to the best of my knowledge and belief, there have been no contraventions of:
a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) any applicable code of professional conduct in relation to the audit.
This declaration is in respect of The Waterberg Coal Company Limited.
HLB MANN JUDD
Chartered Accountants
Jude Lau Melbourne
Partner 30 September 2013
The Board of Directors of The Waterberg Coal Company Limited (Waterberg Coal or the Group) is
responsible for corporate governance of the Group. The Board guides and monitors the business and affairs
of the Group on behalf of the shareholders by whom they are elected and to whom they are accountable.
The Group has established a set of corporate governance policies and procedures. These were based on the
Australian Securities Exchange Corporate Governance Council's (the Council's) Principles of Good
Corporate Governance Principles and Recommendations (the Recommendations). In accordance with the
Council's recommendations, the Corporate Governance Statement must now contain certain specific
information and must disclose the extent to which the Group has followed the guidelines during the period.
Where a recommendation has not been followed, that fact must be disclosed, together with the reasons for
the departure. For further information on corporate governance policies adopted by the Group, refer to our
website: www.waterbergcoal.com.au
Structure of the Board
The skills, experience and expertise relevant to the position of Director held by each Director in office at the
date of the annual report is included in the Directors' Report. Directors of the Company are considered to be
independent when they are independent of management and free from any business or other relationship that
could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of
their unfettered and independent judgement.
The Board has accepted the following definition of an Independent Director:
An Independent Director is a Director who is not a member of management, is a Non-executive Director and
who:
- is not a substantial shareholder (under the meaning of Corporations Act) of the Company or an officer
of, or otherwise associated, directly or indirectly, with a substantial shareholder of the Group;
- has not within the last three years been employed in an executive capacity by the Group or another
Company member, or been a Director after ceasing to hold any such employment;
- is not a principal of a professional adviser to the Company or another Company member;
- is not a significant consultant, supplier or customer of the Company or another Company member, or an
officer of or otherwise associated, directly or indirectly, with a significant consultant, supplier or
customer;
- has no significant contractual relationship with the Company or another Company member other than as
a Director of the Company;
- is free from any interest and any business or other relationship which could, or could reasonably be
perceived to, materially interfere with the Director's ability to act in the best interests of the Company.
In accordance with the definition of independence above, Mr. Daniel Crennan is considered independent.
Accordingly, a majority of the board is not independent.
There are procedures in place, as agreed by the board, to enable Directors to seek independent professional
advice on issues arising in the course of their duties at the Group's expense. The term in office held by each
Director in office at the date of this report is as follows:
Name Term in office
Brian McMaster 1 year and 6 months
Daniel Crennan 1 year and 6 months
Jonathan Hart 1 year and 6 months
Scott Funston 5 months
Stephen Miller 5 months
The Board considers that the current board composition is appropriate given the size of the Group's
operations.
Nomination Committee
The Board has formally adopted a Nomination Committee Charter but given the present size of the Group,
has not formed a separate Committee. Instead the function will be undertaken by the full Board in accordance
with the policies and procedures outlined in the Nomination Committee Charter. At such time when the Group
is of sufficient size a separate Nomination Committee will be formed.
Audit Committee
The Board has formally adopted an Audit and Risk Management Committee Charter but given the present
size of the Group, has not formed a separate Committee. Instead the function of the Committee will be
undertaken by the full Board in accordance with the policies and procedures outlined in the Audit and Risk
Management Committee Charter. At such time when the Group is of sufficient size a separate Audit and Risk
Management Committee will be formed.
It is the Board's responsibility to ensure that an effective internal control framework exists within the Group.
This includes both internal controls to deal with both the effectiveness and efficiency of significant business
processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of
financial and non-financial information. It is the Board's responsibility for the establishment and maintenance
of a framework of internal control of the Group and risk management related processes.
Performance
The Board of The Waterberg Coal Company Limited conducts its performance review of itself on an ongoing
basis throughout the year. The small size of the Group and hands on management style requires an increased
level of interaction between Directors and Executives throughout the year. Board members meet amongst
themselves both formally and informally. The Board considers that the current approach that it has adopted
with regard to the review of its performance provides the best guidance and value to the Group.
Remuneration
It is the Group's objective to provide maximum stakeholder benefit from the retention of a high quality board
by remunerating Directors fairly and appropriately with reference to relevant employment market conditions.
The Group does not link the nature and amount of executive and directors' emoluments to the Group's
financial and operational performance.
For details of remuneration of Directors and Executives please refer to the Remuneration Report included in
the Directors' Report.
The Board is responsible for determining and reviewing compensation arrangements for executive directors.
The Board has formally adopted a Remuneration Committee Charter however given the present size of the
Group, has not formed a separate Committee. Instead the function will be undertaken by the full Board in
accordance with the policies and procedures outlined in the Remuneration Committee Charter. At such time
when the Group is of sufficient size a separate Remuneration Committee will be formed.
There is no scheme to provide retirement benefits, other than statutory superannuation, to non-executive
Directors.
Diversity Policy
The Group is committed to workplace diversity and to ensuring a diverse mix of skills and talent exists
amongst its directors, officers and employees, to enhance Group performance. The Board has adopted a
Diversity Policy which addresses equal opportunities in the hiring, training and career advancement of
directors, officers and employees.
In accordance with this policy, the Board provides the following information pertaining to the proportion of
women across the organisation at the date of this report.
Actual
Number Percentage
Women in the whole organisation - -
Women in senior executive positions - -
Women on the board - -
Trading Policy
Under the Group's securities trading policy, an executive or director must not trade in any securities of the
Group at any time when they are in possession of unpublished, price-sensitive information in relation to those
securities.
Before commencing to trade, a Director must first obtain approval of the Chairman and the Chairman must
first obtain approval from the Board. Only in exceptional circumstances will approval be forthcoming inside of
the period commencing on the tenth day of the month in which the Group is required to release its Quarterly
Activities Report and Quarterly Cashflow Report and ending two days following the date of that release.
Assurance
The CEO and CFO (or equivalent) periodically provide formal statements to the Board that in all material
aspects:
- the Group's financial statements present a true and fair view of the Group's financial condition and
operational results; and
- the risk management and internal compliance and control systems are sound, appropriate and operating
efficiently and effectively.
This assurance forms part of the process by which the Board determines the effectiveness of its risk
management and internal control systems in relation to financial reporting risks.
Shareholder Communication Policy
Pursuant to Principle 6, the Group's objective is to promote effective communication with its shareholders at
all times.
The Group is committed to:
- Ensuring that shareholders and the financial markets are provided with full and timely information;
- Complying with continuous disclosure obligations contained in the ASX listing rules and the Corporations
Act in Australia; and
- Communicating effectively with its shareholders and making it easier for shareholders to communicate with
the Group.
To promote effective communication with shareholders and encourage effective participation at general
meetings, information is communicated to shareholders:
- Through the release of information to the market via the ASX;
- Through the distribution of the annual report and notices of annual general meeting;
- Through shareholder meetings and investor relations presentations; and
- By posting relevant information on the Group's website.
The external auditors are required to attend the annual general meeting and are available to answer any
shareholder questions about the conduct of the audit and preparation of the audit report.
Corporate Governance Compliance
During the financial year the Group has complied with each of the 8 Corporate Governance Principles and the
corresponding Best Practice Recommendations, other than in relation to the matters specified below:
Best Practice
Recommendation Notification of Departure Explanation of Departure
2.1 The Group does not have a The Directors consider that the current structure
majority of independent and composition of the Board is appropriate to
directors the size and nature of operations of the Group.
2.2 The Chairman is not an The Directors consider that the current structure
independent director and composition of the Board is appropriate to
the size and nature of operations of the Group.
2.4 The Group does not have a The role of the Nomination Committee has been
Nomination Committee assumed by the full Board operating under the
Nomination Committee Charter adopted by the
Board.
3.3 The Group has not disclosed The Board continues to monitor diversity across
in its annual report its the organization. Due to the size of the Group,
measurable objectives for the Board does not consider it appropriate at
achieving gender diversity this time, to formally set measurable objectives
and progress towards for gender diversity.
achieving them.
4.1 and 4.2 The Group does not have an The role of the Audit and Risk Management
Audit and Risk Management Committee has been assumed by the full Board
Committee operating under the Audit and Risk
Management Committee Charter adopted by
the Board.
7.1 and 8.1 The Group does not have an The role of the Audit and Risk Management
Audit and Risk Management Committee has been assumed by the full Board
Committee operating under the Audit and Risk
Management Committee Charter adopted by
the Board.
The Board is responsible for determining the
Group's risk profile and is responsible for
overseeing and approving risk management
strategy and policies, internal compliance and
internal control.
Consolidated Statement of Comprehensive Income - for the year ended 30 June 2013
Consolidated Company
Note 2013 2013 2012
$ $ $
Continuing operations
Interest revenue 130,471 27,246 -
Employee benefits expenses 6(a) (3,655) (3,655) -
Impairment of loan receivable 12 - (3,502,445) -
Fair value adjustment of other non-current asset 13(b) (1,920,000) - -
Consultants and legal expenses (3,190,929) (1,859,203) -
Share based payment expense 25(b) (2,977,245) (2,977,245) -
Foreign exchange gain 451,457 451,457 -
Finance costs 6(b) (6,854,596) (6,854,596) -
Other expenses 6(c) (1,189,074) (835,130) -
Loss before income tax (15,553,571) (15,553,571) -
Income tax expense 7 - - -
Net profit / (loss) from continuing operations (15,553,571) (15,553,571) -
Discontinued operations
Profit / (loss) from discontinued operations after tax 28(a) 22,442,511 22,442,511 (3,176,055)
Net profit / (loss) for the year 6,888,940 6,888,940 (3,176,055)
Other comprehensive income:
Other comprehensive income / (expenses) for the year - - -
Total comprehensive income / (expenses) for the
year 6,888,940 6,888,940 (3,176,055)
Earnings/(loss) per share
From continued and discontinued operations:
Basic earnings/(loss) loss per share 8 1.0c 1.0c (8.75c)
Diluted earnings/(loss) per share 8 1.0c 1.0c (8.75c)
From continued operations:
Basic loss per share 8 (2.3c) (2.3c) -
Diluted loss per share 8 (2.3c) (2.3c) -
From discontinued operations:
Basic earnings/(loss) per share 8 3.3c 3.33c (8.75c)
Diluted earnings/(loss) per share 8 3.3c 3.33c (8.75c)
The accompanying notes form part of these consolidated financial statements
Consolidated Statement of Financial Position - as at 30 June 2013
Consolidated Company
2013 2013 2012
Note $ $ $
Current assets
Cash and cash equivalents 9 8,439,558 1,475,043 433,294
Trade and other receivables 10 279,504 112,837 -
Other assets 13(a) 17,523,725 17,523,725 -
Total current assets 26,242,787 19,111,605 433,294
Non-current assets
Exploration and evaluation expenditure 11 25,291,518 18,135 -
Loan receivables 12 500,000 32,611,358 -
Other assets 13(a) 4,380,931 4,380,931 -
Other financial assets 13(b) 7,880,000 - -
Investment in associates and controlled entities 14 21,950,000 25,000,000 -
Total non-current assets 60,002,449 62,010,424 -
Total assets 86,245,236 81,122,029 433,294
Current liabilities
Trade and other payables 15 1,328,646 934,347 23,470,979
Other Liabilities 16 464,515 - 51,001
Convertible note 17 62,634,901 62,634,901 -
Interest bearing liabilities 18(a) - - 1,364,556
Other financial liabilities 18(b) 1,500,000 - -
Total current liabilities 65,928,062 63,569,248 24,886,536
Non-current liabilities
Other financial liabilities 18(b) 2,764,393 - -
Total non-current liabilities 2,764,393 - -
Total liabilities 68,692,455 63,569,248 24,886,536
Net assets/(liabilities) 17,552,781 17,552,781 (24,453,242)
Equity/(net deficiency)
Contributed equity 19 32,139,838 32,139,838 82,523,237
Reserves 20 4,241,245 4,241,245 1,264,000
Accumulated losses 21 (18,828,302) (18,828,302) (108,240,479)
Total equity/(net deficiency of assets over
liabilities) 17,552,781 17,552,781 (24,453,242)
The accompanying notes form part of these consolidated financial statements
Consolidated Statement of Changes in Equity - for the year ended 30 June 2013
Total Equity/(Net
Contributed (Accumulated Reserves Deficiency assets
Company Equity Losses) over liabilities
$ $ $ $
Balance at 1 July 2011 82,523,237 (106,633,204) 2,614,140 (21,495,827)
Attributable to Opus - 218,640 - 218,640
Net comprehensive income / (expense) for the
year - (3,176,055) - (3,176,055)
Expiration/forfeiture of options - 1,350,140 (1,350,140) -
Equity benefits issued during the year - - - -
Balance at 30 June 2012 82,523,237 (108,240,479) 1,264,000 (24,453,242)
Net comprehensive income / (expense) for the
year - 6,888,940 - 6,888,940
Capital reduction (82,523,237) 82,523,237 - -
Shares issued, net of transaction costs 32,139,838 - - 32,139,838
Share based payment - - 2,977,245 2,977,245
Balance at 30 June 2013 32,139,838 (18,828,302) 4,241,245 17,552,781
Total Equity/(Net
Contributed (Accumulated Reserves Deficiency assets
Consolidated Equity Losses) over liabilities
$ $ $ $
Balance at 30 June 2012 82,523,237 (108,240,479) 1,264,000 (24,453,242)
Net comprehensive income / (expense) for the
year - 6,888,940 - 6,888,940
Capital reduction (82,523,237) 82,523,237 - -
Shares issued, net of transaction costs 32,139,838 - - 32,139,838
Share based payment - - 2,977,245 2,977,245
Balance at 30 June 2013 32,139,838 (18,828,302) 4,241,245 17,552,781
The accompanying notes form part of these consolidated financial statements
Consolidated Statement of Cash Flows - for the year ended 30 June 2013
Consolidated Comppany
2013 2013 2012
Note $ $ $
Cash flow from operating activities
Receipts from customers (inc GST) and ATO - - 1,280,569
Payments to suppliers (inc GST) and employees (4,385,812) (3,166,677) (7,231,527)
Interest paid - - (50,087)
Interest received 27,246 27,246 93,537
Net cash (used in) operating activities 22(b) (4,358,566) (3,139,431) (5,907,508)
Cash flow from investing activities
Payment for exploration and development (18,735) (18,735) -
Payments for investment in associates (24,018,026) - -
Loans to associates and subsidiaries (2,350,000) ( (36,113,803) -
Recoveries from subsidiary in liquidation - - 1,259,121
Proceeds from sale of Mt Morgans - - 6,750,000
Settlement of DOCA (2,277,577) (2,277,577) 50,000
Net cash (used in)/provided by investing activities (28,664,338) ( (38,410,115) 8,059,121
Cash flow from financing activities
Proceeds from share issues, net of transaction costs 7,139,838 7,139,838 -
Proceeds from / (repayment of) borrowings, net 33,437,873 35,000,000 (5,000,000)
Proceeds from / (repayment of) finance leases - - (47,762)
Net cash provided by/(used in) financing activities 40,577,711 42,139,838 (5,047,762)
Net increase/(decrease) in cash and cash
equivalents held 7,554,807 590,292 (2,896,149)
Cash and cash equivalents at the beginning of the year 433,294 433,294 3,329,443
Net foreign exchange differences 451,457 451,457 -
Cash and cash equivalents at the end of the year 22(a) 8,439,558 1,475,043 433,294
The accompanying notes form part of these consolidated financial statements
Notes to the financial statements for the year ended 30 June 2013
1. Corporate information
The Waterberg Coal Company Limited (the 'Company') is a Company limited by shares, domiciled and
incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.
The nature of operations and principal activities of The Waterberg Coal Company Limited and its controlled
entities (the 'Group') are coal and mineral exploration.
The financial report of the Group for the year ended 30 June 2013 was authorised for issue in accordance
with a resolution of Directors on 30 September 2013.
2. Summary of significant accounting policies
a) Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with
other requirements of the law.
The Group is a for profit entity for financial reporting purposes under Australian Accounting Standards.
The financial report has also been prepared on a historical cost basis. The presentation currency is
Australian dollars.
The accounting policies disclosed below have been consistently applied to all of the years presented
unless otherwise stated.
Going Concern
This report has been prepared on the going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and settlement of liabilities in the normal course of business.
As disclosed in the financial statements, the Group incurred a profit after tax for the year ended 30 June
2013 of $6,888,940. The Group had net cash outflows from operating activities of $4,358,566, net cash
outflows from investing activities of $28,664,338 and net cash inflows from investing activities of
$40,577,711 and a net current liability of $39,685,275.
The Directors believe that it is reasonably foreseeable that the Group will continue as a going concern and
that it is appropriate to adopt the going concern basis in the preparation of the financial report after
consideration of the following factors:
- The ability (as supported by the Company's past trade record) to issue additional shares under the
Corporation Act 2001 to raise further working capital.
- The Group has the ability to scale down its operations in order to curtail expenditure, in the event
capital raisings are delayed or insufficient cash is available to meet projected expenditure.
- The classification of the convertible notes as a current liability was done to comply with the
requirements of the AAS and the directors do not expect that the amount will be settled within the 12
months.
b) Statement of compliance
The financial report complies with Australian Accounting Standards. Compliance with Australian
Accounting Standards ensures that the financial report, comprising the financial statements and notes
thereto, complies with International Financial Reporting Standards (IFRS).
c) New accounting standards and interpretations issued but not yet effective
The following applicable accounting standards and interpretations have been issued or amended but are
not yet effective. These standards have not been adopted by the Group for the year ended 30 June 2013
and no change to the Group's accounting policy is required.
Reference Title Summary Impact on Group's Application
financial report date for
Group
AASB 9 Financial Instruments AASB 9 includes requirements for the The Group has considered 1 July 2015
classification and measurement of financial these standards and
assets. It was further amended by AASB determined that it will impact
2010-7 to reflect amendments to the the accounting applied to its
accounting for financial liabilities. holding of convertible notes.
These requirements improve and simplify the
approach for classification and measurement
of financial assets compared with the
requirements of AASB 139. The main changes
are described below.
(a) Financial assets that are debt
instruments will be classified based on
(1) the objective of the entity's business
model for managing the financial assets;
(2) the characteristics of the contractual
cash flows.
(b) Allows an irrevocable election on initial
recognition to present gains and losses
on investments in equity instruments
that are not held for trading in other
comprehensive income. Dividends in
respect of these investments that are a
return on investment can be recognised
in profit or loss and there is no
impairment or recycling on disposal of
the instrument.
(c) Financial assets can be designated and
measured at fair value through profit or
loss at initial recognition if doing so
eliminates or significantly reduces a
measurement or recognition
inconsistency that would arise from
measuring assets or liabilities, or
recognising the gains and losses on
them, on different bases.
(d) Where the fair value option is used for
financial liabilities the change in fair
value is to be accounted for as follows:
- The change attributable to changes
in credit risk is presented in other
comprehensive income (OCI)
- The remaining change is presented
in profit or loss
If this approach creates or enlarges an
accounting mismatch in the profit or
loss, the effect of the changes in credit
risk are also presented in profit or loss.
Consequential amendments were also made
to other standards as a result of AASB 9,
introduced by AASB 2009-11 and superseded
by AASB 2010-7 and 2010-10.
AASB 10 Consolidated Financial AASB 10 establishes a new control model that The Group has considered 1 July 2013
Statements applies to all entities. It replaces parts of these standards and
AASB 127 Consolidated and Separate determined that there is no
Financial Statements dealing with the
accounting for consolidated financial impact on the Group's
statements and UIG-112 Consolidation financial statements.
Special Purpose Entities.
The new control model broadens the situations
when an entity is considered to be controlled
by another entity and includes new guidance
for applying the model to specific situations,
including when acting as a manager may give
control, the impact of potential voting rights
and when holding less than a majority voting
rights may give control.
Consequential amendments were also made
to other standards via AASB 2011-7.
AASB 11 Joint Arrangements Joint arrangements will be classified as either The Group has considered 1 July 2013
'joint operations' (where parties with joint these standards and
control have rights to assets and obligations determined that there is no
for liabilities) or 'joint ventures' (where parties
with joint control have rights to the net assets impact on the Group's
of the arrangement). financial statements.
Joint arrangements structured as a separate
vehicle will generally be treated as joint
ventures and accounted for using the equity
method (proportionate consolidation no longer
allowed).
However, where terms of the contractual
arrangement, or other facts and circumstances
indicate that the parties have rights to assets
and obligations for liabilities of the
arrangement, rather than rights to net assets,
the arrangement will be treated as a joint
operation and joint venture parties will account
for the assets, liabilities, revenues and
expenses in accordance with the contract.
AASB 12 Disclosure of Interests in AASB 12 includes all disclosures relating to an The Group has considered 1 July 2013
Other Entities entity's interests in subsidiaries, joint these standards and
arrangements, associates and structures determined that there is no
entities. New disclosures have been
introduced about the judgments made by impact on the Group's
management to determine whether control financial statements.
exists, and to require summarised information
about joint arrangements, associates and
structured entities and subsidiaries with non-
controlling interests.
AASB 13 Fair Value Measurement AASB 13 establishes a single source of The Group has considered 1 July 2013
guidance for determining the fair value of these standards and
assets and liabilities. AASB 13 does not determined that it is likely to
change when an entity is required to use fair
value, but rather, provides guidance on how to impact the disclosure
determine fair value when fair value is required requirements related to its
or permitted. Application of this definition may suite of financial instruments.
result in different fair values being determined
for the relevant assets.
AASB 13 also expands the disclosure
requirements for all assets or liabilities carried
at fair value. This includes information about
the assumptions made and the qualitative
impact of those assumptions on the fair value
determined.
Consequential amendments were also made
to other standards via AASB 2011-8.
AASB 119 Employee Benefits An amended version of AASB 119 Employee The Group has considered 1 July 2013
Benefits with revised requirements for these standards and
pensions and other postretirement benefits, determined that there is no
termination benefits and other changes.
The key amendments include: impact on the Group's
- Requiring the recognition of changes in the financial statements.
net defined benefit liability (asset) including
immediate recognition of defined benefit cost,
disaggregation of defined benefit cost into
components, recognition of remeasurements
in other comprehensive income, plan
amendments, curtailments and settlements
(eliminating the 'corridor approach' permitted
by the existing AASB 119)
- Introducing enhanced disclosures about
defined benefit plans
- Modifying accounting for termination benefits,
including distinguishing benefits provided in
exchange for service and benefits provided in
exchange for the termination of employment
and affect the recognition and measurement of
termination benefits
- Clarifying various miscellaneous issues,
including the classification of employee
benefits, current estimates of mortality rates,
tax and administration costs and risk-sharing
and conditional indexation features
- Classification of employee benefits: the
amendments define short term employee
benefits as employee benefits that are
"expected to be settled wholly before twelve
months after the end of annual reporting
period" in place of currently used "due to be
settled"
Incorporating other matters submitted to the
IFRS Interpretations Committee.
AASB 124 Related Party AASB 124 establishes guidance for disclosure The Group has considered 1 July 2013
Disclosures of related party transactions and outstanding these standards and
balances that could impact on an entity's determined that there is no
financial position and profit or loss.
Amendment AASB 2011-4 removes the impact on the Group's
disclosure requirements for individual key financial statements.
management personnel. The adoption of these
amendments will remove the duplication of
information relating to individual KMP in the
notes to the financial statements and the
directors' report.
AASB 127 Separate Financial Amended version of AASB 127 which now The Group has considered 1 July 2013
Statements only deals with the requirements for separate these standards and
financial statements, which have been carried determined that there is no
over largely unamended from AASB 127
Consolidated and Separate Financial impact on the Group's
Statements. Requirements for consolidated financial statements.
financial statements are now contained in
AASB 10 Consolidated Financial Statements.
The Standard requires that when an entity
prepares separate financial statements,
investments in subsidiaries, associates, and
jointly controlled entities are accounted for
either at cost, or in accordance with AASB 9
Financial Instruments.
The Standard also deals with the recognition
of dividends, certain group reorganisations and
includes a number of disclosure requirements.
d) Basis of consolidation
The consolidated financial statements comprise the financial statements of The Waterberg Coal Company
Limited ('the Company') and its controlled entities as at 30 June 2013 ('the Group').
Controlled entities are all those entities (including special purpose entities) over which the Company has the
power to govern the financial and operating policies so as to obtain benefits from their activities. The existence
and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing whether a Company controls another entity.
The financial statements of the controlled entities are prepared for the same reporting period as the parent
Company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-company transactions have been eliminated in full.
Controlled entities are fully consolidated from the date on which control is obtained by the Company and
cease to be consolidated from the date on which control is transferred out of the Company.
e) Business combinations
The acquisition of controlled entities is accounted for using the acquisition method of accounting. The
acquisition method of accounting involves recognising at acquisition date, separately from goodwill, the
identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The
identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values.
The difference between the above items and the fair value of the consideration (including the fair value of any
pre-existing investment in the acquiree) is goodwill or a discount on acquisition.
A change in the ownership interest of a controlled entity that does not result in a loss of control, is accounted
for as an equity transaction.
f) Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash at bank and in
hand and short term deposits with an original maturity of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash and
cash equivalents as defined above excluding any outstanding bank overdrafts. Bank overdrafts are included
within interest-bearing loans and borrowings in current liabilities on the consolidated statement of financial
position.
g) Trade and other receivables
Trade receivables, which generally have 30 90 day terms, are recognised and carried at original invoice
amount less an allowance for any uncollectible amounts.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are
written off by reducing the carrying amount directly. An allowance account is used when there is objective
evidence that the Group will not be able to collect all amounts due according to the original contractual terms.
Factors considered by the Group in making this determination include known significant financial difficulties of
the debtor, review of financial information and significant delinquency in making contractual payments to the
Group. The impairment allowance is equal to the difference between the carrying amount of the receivable
and the present value of estimated future cash flows, discounted at the original effective interest rate. Where
receivables are short-term, discounting is not applied in determining the allowance.
The amount of the impairment loss is recognised in the consolidated statement of comprehensive income
within other expenses. When a trade receivable for which an impairment allowance had been recognised
becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are credited against other expenses in the consolidated statement
of comprehensive income.
h) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset,
but not the legal ownership is transferred to the Group, are classified as finance leases.
Finance leases are capitalised by recognising an asset and a liability at the lower of the amounts equal to the
fair value of the leased property or the present value of the minimum lease payments, including any
guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the
lease interest expense for the period.
With the Group being in voluntary administration at 30 June 2012, all non-current lease liability had been
reclassified as a current liability.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the
lease term.
With the Group being in voluntary administration at 30 June 2012, all non-current assets have been
reclassified as part of non-current assets held for sale and recorded at their net realisable value.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
recognised as expenses in the periods in which they are incurred.
i) Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use and a sale is considered
highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell,
except for assets such as deferred tax assets and assets arising from employee benefits that are carried at
fair value and contractual rights under insurance contracts, which are specifically exempt from this
requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to
fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of
an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A
gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is
recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while
they are classified as held for sale. Non-current assets classified as held for sale and the assets of a disposal
group classified as held for sale are presented separately from the other assets in the consolidated statement
of financial position. The liabilities of a disposal group classified as held for sale are presented separately from
other liabilities in the statement of financial position.
A discontinued operation is a component of the Group that has been disposed of or is classified as held for
sale and that represents a separate major line of business or geographical area of operations, is part of a
single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired
exclusively with a view to resale.
j) Impairment of non-financial assets
At the end of the reporting period, the Group assesses whether there is any impairment indicator. The
assessment includes consideration of external and internal sources of information. If such indicators exist, an
impairment test is performed. Impairment testing is performed by comparing the recoverable amount of the
asset with the higher of value in use and fair value less costs to sell the asset. Any excess is expensed to the
profit/loss.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows that are largely independent of the cash inflows from other assets or
groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment
are tested for possible reversal of the impairment whenever events or changes in circumstances indicate the
impairment may have reversed.
k) Intangible assets
Intangible assets are initially measured at cost. Following initial recognition, they are carried at cost less
accumulated amortisation and impairment. Intangibles with a finite life are amortised over their useful lives
and assessed for impairment annually where there is an indicator of impairment.
l) Exploration and evaluation expenditure
Exploration and evaluation expenditure costs related to each identifiable area of interest are carried forward to
the extent that:
i. The rights to tenure of the areas of interest are current and the Group controls the area of interest in
which the expenditure has been incurred; and
ii. Such costs are expected to be recouped through successful development and exploitation of the area
of interest, or alternatively by its sale; or
iii. Exploration and evaluation activities in the area of interest have not at the reporting date reached a
stage that permits a reasonable assessment of the existence or otherwise of economically recoverable
reserves, and active and significant operations in, or in relation to the area of interest are continuing.
Exploration and evaluation expenditure are generally capitalised where a JORC (Joint Ore Reserves
Committee) resource has been identified and probable future economic benefits are demonstrated.
When the technical feasibility and commercial viability of extracting a mineral resource have been
demonstrated then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine
development. Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for
impairment.
In the event that an area of interest is abandoned or if the directors consider the expenditure to be of no value,
accumulated costs carried forward are written off in the year in which that assessment is made. A regular
review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
Impairment
Exploration and evaluation assets are assessed annually for indicators of impairment and where impairment
indicators exist, recoverable amounts of these assets will be estimated based on discounted cash flows from
their associated cash generating units. The consolidated statement of comprehensive income will recognise
expenses arising from the excess of the carrying values of exploration and evaluation assets over the
recoverable amounts of these assets.
m) Trade and other payables
Liabilities for trade and other payables are carried at amortised cost and represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services.
n) Interest-bearing liabilities (borrowings)
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds of borrowings (net of
transaction costs) and the redemption amount is recognised in the statement of comprehensive income over
the period of the borrowings using the effective interest method. Gains and losses are recognised in profit or
loss when the liabilities are derecognised. With the Group in voluntary administration as at 20 June 2012 all
borrowings had been reclassified as current liabilities.
Borrowing costs
Borrowing costs are recognised as expenses in the period in which they are incurred, except for those relating
to qualifying assets. Borrowing costs include interest on borrowings.
o) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the obligation.
Provisions are measured at the present value of management's best estimate of the expenditure required to
settle the present obligation at balance date. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects the time value of money and the risks specific to the
liability. When discounting is used, the increase in the provision due to the passage of time is recognised in
finance costs.
Employee leave benefits
Wages, salaries and annual leave
The provisions for employee benefits for wages, salaries (including non-monetary benefits) and annual leave
resulting from employees' services provided up to the balance date, that are expected to be settled within one
year of the reporting date have been measured at the undiscounted amounts expected to be paid when the
liability is settled based on current wage and salary rates including related on-costs. Expected future
payments beyond one year are discounted using market yields at the reporting date on national government
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash
outflows. Liabilities for non-accumulating sick leave are recognised when the leave is taken and measured at
the rates paid or payable.
Employee benefit on-costs
Employee benefit on-costs, such as payroll tax and superannuation, are recognised and included in employee
benefit liabilities and costs when the employee benefits to which they relate are recognised.
Equity settled transactions
The Group provides benefits to employees (including key management personnel) of the Group in the form of
share-based payments, whereby employees render services in exchange for shares or rights over shares
(equity settled transactions), under the Waterberg Coal Executive Option Plan.
The fair value of options granted under the Group's Executive Share Option Plan is recognised as an
employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date
and recognised over the vesting period.
The fair value at grant date is determined using the binomial option pricing model that takes into account
exercise price, term of the option, vesting and performance criteria, dilution impact, the non tradeable nature
of the option, share price at grant date and expected price volatility of the underlying share, expected dividend
yield and risk free interest rate for the term of the option, further details of which are given in Note 25.
The fair value of the options granted excludes the impact of any non-market vesting conditions (for example
(profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the
number of options that are expected to become exercisable. At each balance date, the entity revises its
estimate of the number of options that are expected to become exercisable. The employee benefit expense
recognised each period takes into account the most recent estimate.
p) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the proceeds.
q) Revenue recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the
extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably
measured. The following specific recognition criteria must also be met before revenue is recognised.
Sales are recognised as revenue only when there has been a passing of title and risk to the customer, and:
(a) the product is in a form suitable for delivery and no further processing is required by, or on behalf of
the entity;
(b) quantity and quality (grade) of the product can be determined with reasonable accuracy;
(c) the product has been dispatched to the customer and is no longer under the physical control of the
Group (or property in the product has earlier passed to the customer);
(d) the selling price can be measured reliably;
(e) it is probable that the economic benefits associated with the transaction will flow to the Group; and
(f) the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Interest income is recognised on a time proportion basis using the effective interest rate method.
r) Income tax and other taxes
The income tax expense or revenue for the period is the tax payable on the current period's taxable
income/(loss) based on the notional income tax rate for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and
their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for all temporary differences at the tax rates expected to
apply when the assets are realised or liabilities are settled, based on those tax rates (and tax laws) that are
enacted or substantively enacted for each jurisdiction at the balance date. The relevant tax rates are applied
to the cumulative amounts of deductible and taxable temporary differences arising from the initial recognition
of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary
differences if they arose in a transaction, other than a business combination, that at the time of the transaction
did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences and carry-forward of unused tax
credits and unused tax losses only if it is probable that future taxable profits will be available to utilise those
deductible temporary differences and carry-forward of unused tax credits and unused tax losses. Deferred
tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to control the timing of the reversal
of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised
directly in equity and not in profit or loss.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the
deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each
balance date and are recognised to the extent that it has become probable that future taxable profit will allow
the deferred tax asset to be recovered. Deferred tax assets and deferred tax liabilities are offset only if a
legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax
assets and liabilities relate to the same taxable entity and the same taxation authority.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
- where the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
- receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the consolidated statement of financial position.
Cash flows are included in the consolidated statement of cash flows on a gross basis and the GST component
of cash flows arising from investing and financing activities, that is recoverable from, or payable to, the
taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
s) Earnings per share
i. Basic earnings per share
Basic earnings per share is calculated by dividing the net profit (loss) attributable to members of the parent, by
the weighted average number of ordinary shares, adjusted for any bonus element and the requirements
outlined in paragraph 64 of AASB 133.
ii Diluted earnings per Share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account the after income tax effect of the weighted average number of shares assumed to have been
issued for no consideration in relation to dilutive potential ordinary shares currently held as options.
t) Investments in controlled entities
All investments are initially recognised at cost, being the fair value of the consideration given. Subsequent to
the initial measurement, investments in controlled entities are carried at cost less accumulated impairment
losses.
u) Investments in associates
Associates are companies in which the Group has significant influence through holding, directly or indirectly,
20% or more of the voting power of the Group. Investments in associates are accounted for in the financial
statements by applying the equity method of accounting, whereby the investment is initially recognised at cost
and adjusted thereafter for the post-acquisition change in the Group's share of net assets of the associate
company. In addition, the Group's share of the profit or loss of the associate company is included in the
Group's profit or loss.
The carrying amount of the investment includes goodwill relating to the associate. Any discount on acquisition
whereby the Group's share of the net fair value of the associate exceeds the cost of investment is recognised
in profit or loss in the period in which the investment is acquired.
Profits and losses resulting from transactions between the Group and the associate are eliminated to the
extent of the Group's interest in the associate.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, the Group
discontinues recognising its share of further losses unless it has incurred legal or constructive obligations or
made payments on behalf of the associate. When the associate subsequently makes profits, the Group will
resume recognising its share of those profits once its share of the profits equals the share of the losses not
recognised. Details of the Group's investments in associates are provided in note 14.
v) Financial Instruments
Recognition
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date the company commits itself to
either the purchase or sale of the asset (i.e. trading date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is
classified "at fair value through profit or loss", in which the transaction costs are expensed to profit or loss
immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at air value, amortised cost using the effective interest
method, or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at
initial recognition less principle repayment and any reduction for impairment, and adjusted for any cumulative
amortisation of the difference between that initial amount and the maturity amount calculated using the
effective interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm's length transaction,
reference to similar instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the relevant paid
and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees,
transaction costs and other premiums or discounts) over the expected life (or when this cannot be reliably
predicted, the contractual terms) of the financial instrument to the net carrying amount of the financial asset or
financial liability.
i) Financial assets at fair value through profit and loss
Financial assets are classified at "fair value through profit or loss" when they are held for trading for the
purpose of short term profit trading, derivatives not held for hedging purposes or when they are designated as
such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets
is managed by key management personnel on a fair value basis in accordance with a documented risk
management or investment strategy. Such assets are subsequently measured at fair value with changes in
carrying amount being included in profit or loss.
ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are stated at amortised cost using the effective interest rate method.
iii) Held-to-maturity investments
These investments have fixed maturities, and it is the Group's intention to hold these investments to maturity.
Any held-to-maturity investments held by the Group are stated at amortised cost using the effective interest
rate method.
w) Financial Liabilities
Non-derivative financial liabilities are initially recognized at fair value net of directly attributable transaction
costs. On subsequent measurement, non-derivative financial liabilities are measured at amortised cost using
the effective interest method.
Convertible notes
The company has issued convertible notes that can be converted to share capital at the option of the holder.
The company has determined the conversion option is a derivative liability that is required to be valued at fair
value. Rather than valuing the liability component of the convertible note at amortised cost and the associated
derivative liability at fair value the company has elected to value the combined instrument at fair value. The
movement in fair value of the convertible note is recognised in the profit and loss as finance charge. The basis
of the fair value calculations and the material terms and conditions of the convertible note are set out in Note
17.
The best evidence of fair value of a financial instrument, at initial recognition, is the transaction price, unless
the fair value of the instrument is evidenced by comparison with other observable current market transactions
in the same instrument or based on valuation technique using variable only obtained from observable
markets.
The company has elected to fair value the convertible note using valuation models for which not all the inputs
are from observable markets. The convertible note was initially recognised at the transaction price which
varied from the fair value obtained from the valuation model used. The difference between the transaction
price and the model value, commonly call day one profit or loss, is not immediately recognised in profit and
loss. Deferred day one profit and loss are amortised over the life of the instrument or settlement. The deferred
day on profit or loss has been classified as Other Assets (see Note 13).
x) Comparative information
When required by Accounting Standards, comparative information has been reclassified to be consistent with
the presentation in the current year. The Group acquired a subsidiary in March 2013. The current period
balances reflect the consolidated entity (Group) while the comparatives reflect only the balances of the parent
entity.
y) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary
economic environment in which that entity operates. The consolidated financial statements are presented in
Australian dollars, which is the parent entity's functional currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when
fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except
where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other
comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive
income; otherwise the exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operations, whose functional currency is different from the Group's
presentation currency, are translated as follows:
- assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
- income and expenses are translated at average exchange rates for the period; and
- retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than
Australian dollars are recognised in other comprehensive income and included in the foreign currency
translation reserve in the statement of financial position. The cumulative amount of these differences is
reclassified into profit or loss in the period in which the operation is disposed of.
3. Financial risk management objectives and policies
The Group's principal financial instruments comprise bank loans, convertible notes, other financial assets,
finance leases and cash and short-term deposits.
The main purpose of these financial instruments is to raise finance for the Group's operations. The Group has
various other financial assets and liabilities such as trade receivables and trade payables that arise directly
from its operations. The main risks arising from the Group's financial instruments are price risk, credit risk and
liquidity risk. The Board reviews and agrees policies for managing each of these risks as summarised below.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class
of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.
Refer to note 26 for further details.
4. Significant accounting judgements, estimates and assumptions
The preparation of financial statements requires estimates and assumptions concerning the application of
accounting policies to be made by the Group. These assumptions, judgements and estimates are continually
evaluated and are believed to be reasonable based on the most current information available to management.
The resultant accounting outcomes however will inevitably rarely equate to the actual outcome. Revisions to
accounting estimates are recognised in the period in which the estimate is revised and in any future periods
affected. Significant judgements, estimates and assumptions made by management in the preparation of
these financial statements are outlined below:
Key estimates
(i) Share based payment transactions
The Group measures the cost of equity settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value is determined by using the Black
Scholes formula taking into account the terms and conditions upon which the instruments were granted, as
discussed in note 25.
(ii) Impairment general
The Group assesses impairment at the end of each reporting period by evaluating conditions and events
specific to the Group that may be indicative of impairment triggers. Recoverable amounts of relevant assets
are reassessed using value-in-use calculations which incorporate various key assumptions.
No impairment has been recognised in respect of goodwill at the end of the reporting period.
Key judgements
In the process of applying the entity's accounting policies, management makes various judgements, apart
from those involving estimations, that can significantly affect the amounts recognised in the financial
statements. Specifically, management made judgements in determining the fair value classification of its suite
of convertible notes and investments.
Accounting for exploration and evaluation expenditure
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be
recoverable or where the activities have not reached a stage that permits a reasonable assessment of the
existence of reserves. While there are certain areas of interest from which no reserves have been extracted,
the directors are of the continued belief that such expenditure should not be written off since feasibility studies
in such areas have not yet concluded.
Business combination
In accounting for business combinations, the Directors exercised judgement in applying the requirements of
AASB 3 Business Combinations in respect of the acquisition of Ariona Company SA in the context of fair value
determination of assets acquired and the consideration paid as well as the adopted accounting treatment.
Investment in FSE via the Takeover offer
As at 30 June 2013, the Group had received valid acceptance in respect of its takeover offer of FSE totalling
1.046 billion FSE shares. The Directors have formed the view that the Group did not have control or beneficial
ownership over these shares as section 1.9 of the Bidder's statement stated that the takeover of FSE was
subject to the Group successfully listing on the Johannesburg Stock Exchange (JSE) which was not
completed as at 30 June 2013. Accordingly, the 1.046 billion shares have not been brought to account in
these financial statements.
5. Segment information
Management has determined the operating segments based on the reports reviewed by the board of directors
that are used to make strategic decisions. The entity does not have any operating segments with discrete
financial information.
The Board of Directors review internal management reports on a monthly basis that is consistent with the
information provided in the statement of comprehensive income, statement of financial position and statement
of cash flows. As a result no reconciliation is required because the information as presented is what is used by
the Board to make strategic decisions.
6. Expenses
Consolidated Company
2013 2013 2012
(a) Employee benefits expense $ $ $
Wages, salaries and superannuation 3,655 3,655 -
3,655 3,655 -
(b) Finance costs
Facility fees 1,124,351 1,124,351 -
Net loss on financial assets and liabilities at fair value 5,730,245 5,730,245 -
through profit and loss
6,854,596 6,854,596 -
(c) Other expenses
Administrative expenses 200,292 200,292 -
Public company costs 345,186 345,185 -
Travel and accommodation expenses 334,700 281,318 -
Other expenses 308,896 8,335 -
1,189,074 835,130 -
7. Income tax expense/ (benefits)
(a) Income tax expense / (benefit)
Current tax - - -
Deferred tax - - -
- - -
Deferred income tax (benefit) expense included in income
tax expense comprises:
Decrease (increase) in deferred tax assets - - -
(Decrease) increase in deferred tax liabilities - - -
- - -
(b) Reconciliation between aggregate tax benefit
recognised in the income statement and tax
calculated per the statutory income tax rate
Profit/ (loss) from ordinary activities before income tax 6,888,940 6,888,940 (3,176,055)
Income tax benefit at the statutory rate of 30% (2012: 30%) 2,066,682 2,066,682 (952,816)
Tax effect of amounts that are not deductible in
calculating taxable income:
Share-based payments 893,174 893,174 -
Impairment losses 576,000 1,050,734 -
3,535,856 4,010,590 (952,816)
Benefit of tax losses not brought to account (3,535,856) (4,010,590) 952,816
Income tax expense - - -
(c) Tax losses
Unused tax losses for which no deferred tax asset has
been recognised 49,001,960 48,527,226 52,537,816
All unused tax losses were incurred by Australian entities.
The Group has a large amount of carried forward tax losses of which the unrecognised deferred tax assets
are materially greater than the level of deferred tax liabilities. The Group has not recognised income tax
expense, tax assets and tax liabilities as it is not probable that future taxable amounts will be available to
utilise those temporary differences.
(d) Tax consolidation legislation
The Group and its wholly-owned Australian controlled entity have implemented the tax consolidation
legislation as of 1 July 2004 up until the wholly owned subsidiary left the group. The accounting policy in
relation to this legislation is set out in note 2(r).
Members of the tax consolidated group have not entered into a tax funding agreement.
8. Earnings/(Losses) per share
The following reflects the net profit/ (loss) and share data used in the basic and diluted earnings per share
computations:
Consolidated Company
2013 2013 2012
$ $ $
Profit/(loss) from continuing and discontinuing
operations (used in calculating basic and diluted EPS) 6,888,940 6,888,940 (3,176,055)
Profit/(loss) from continuing operations (used in
calculating basic and diluted EPS) (15,553,571) (15,553,571) -
Profit/(loss) from discontinued operations (used in
calculating basic EPS) 22,442,511 22,442,511 (3,176,055)
Weighted average number of ordinary shares for basic 80,761,692* 0,761,692* 36,301,222
loss per share
Weighted average number of ordinary shares adjusted
for the effect of dilution 80,761,692* 0,761,692* 36,301,222
There are no instruments (e.g. share options) excluded from the calculation of diluted earnings per share
that could potentially dilute basic earnings per share in the future because they are anti-dilutive for either of
the periods presented.
9. Cash and cash equivalents
Consolidated Company
2013 2013 2012
$ $ $
Cash at bank and in hand (refer to note 22a) 8,439,558 1,475,043 433,294
8,439,558 1,475,043 433,294
Short term deposits earn interest at floating rates based on prevailing bank deposit rates.
Included in the consolidated cash balance is $6,964,515 held as a security deposit on the $35 million
convertible note facility (Note 17). The deposit is subject to a put/call option of $6.5m and will be released to
the Group on conversion or repayment of the facility after 18 months from the date of the draw down. The
Group is not entitled to interest revenue until 18 months from the date of the draw down.
Weighted average interest rate on the Group's cash holding (excluding the $6.96 mil) was 2.31% (2012:
0.6%).
10. Trade and other receivables
Consolidated Company
2013 2013 2012
$ $ $
Current
GST receivable 112,837 112,837 -
Interest receivable 166,667 - -
279,504 112,837 -
Receivables are non-interest bearing and are generally on 30 day terms. A provision is recognised when there
is objective evidence that the individual trade receivable is impaired. The receivables credit risk has been
reviewed and assessed as immaterial as the counterparties are recognised and reputable companies. None of
the current receivable is impaired nor past due.
11. Exploration and evaluation expenditure
Consolidated Company
2013 2013 2012
$ $ $
Opening balance at beginning of the year - - -
Additional exploration expenditure 18,135 18,135 -
Acquisition of exploration interests (refer to note 32) 25,273,383(1) -
Impairment - - -
Carrying amount at the end of the year 25,291,518 18,135 -
1 Acquisition of exploration tenements includes the fair value of the shares issued to vendors of Ariona
Company SA (refer to note 32). The ultimate recoupment of costs carried forward for exploration expenditure
is dependent on the successful development and commercial exploitation or sale of the respective mining
areas.
Recoverability of the carrying amounts of exploration and evaluation expenditure assets is dependent on
successful development and commercial exploitation or alternatively, sale of the respective area of interest.
12. Loan receivables
Consolidated Company
2013 2013 2012
$ $ $
Advances to Sekoko Coal Pty Ltd 500,000 - -
Advances to subsidiaries - 36,113,803 * -
Impairment of non-current asset - (3,502,445)* -
500,000 32,611,358 -
The Group agreed to provide Sekoko Coal Pty Ltd with an unsecured loan of $500,000 for expenditure on the
Waterberg Coal Project. The loan is non-interest bearing and will be repayable once the project generates
revenue.
* Relates to intercompany loans to fully owned subsidiaries, balances eliminate on consolidation.
13. Other assets
Consolidated Company
a) Other assets 2013 2013 2012
$ $ $
Current
Day one loss 17,523,725 17,523,725 -
Non-current
Day one loss 4,380,931 4,380,931 -
In March 2013, the Group entered into a convertible facility agreement with the Standard Bank of South Africa
to obtain a $35,000,000 loan facility (refer to note 17).
The day one loss balance represents the difference calculated in accordance with the accounting policies
outlined in note 2(w). The amount is being amortised over the life of the instrument on settlement.
b) Other financial assets
Non-current
Convertible notes at fair value though profit and loss 5,000,000(1) - -
Investment in Firestone Energy Ltd 4,800,000(2) - -
Fair value adjustment on investment (1,920,000)(2) - -
7,880,000 - -
(1)The Group holds $5,000,000 worth of fully secured Firestone Energy Limited convertible notes. The notes
can be converted to shares in Firestone Energy Limited at 2.5 cents at any time, refer to note 26 for how fair
value as at 30 June 2013 was determined. The notes accrue interest at the rate of 8% PA.
(2)The Group acquired 480,000,000 Firestone Energy Limited shares in April 2013. At 30 June 2013, the
investment was adjusted to reflect its market value (quoted price of ordinary shares).
14. Investment in associates and controlled entities
Consolidated Company
2013 2013 2012
$ $ $
Controlled entity
Investment in Ariona Company SA - 25,000,000(1) -
Associate:
Investment in Sekoko Coal Pty Ltd 21,950,000(2) - -
21,950,000 25,000,000 -
1 Investment in controlled entity (Ariona Company SA), the total cost of the acquisition was $25,000,000 and
comprised an issue of 1,250,000,000 equity instruments to the shareholders of Ariona Company SA. The fair
value of the shares of $25,000,000 was determined by reference to the market value on the Australian
Securities Exchange on the date the transaction was approved by shareholders.
2 In June 2013 the Group acquired a 25% interest in Sekoko Coal Pty Ltd, resulting in a 10% indirect interest
in the Waterberg Coal Project.
a) Principal activity and general information
Ownership interest in Sekoko Coal Pty Ltd at the end of that associate Company's reporting period was 25%
of ordinary shares. The end of the reporting period of Sekoko Coal Pty Ltd is 28 February 2013. The end of
the reporting period does not coincide with the entity's holding company. The Directors have considered
AASB 128 Investments in Associates and Joint Ventures and assessed the movement over the four months to
be reasonable for equity accounting as control of Sekoko Coal Pty Ltd was obtained on June 2013. As such
only one month's of Sekoko Coal Pty Ltd's results had to be equity accounted for. As the amount was
assessed to be immaterial no equity accounting was applied.
Principal Country of
Name Activity Incorporation Share Ownership Interest
2013 2012
% %
Unlisted:
Sekoko Coal Pty Ltd Coal mining South Africa Ord 25% -
b) Summarised presentation of aggregate assets, liabilities and performance of associate
30 June 2013
$
Current assets 4,728,411
Non-current assets 366,663
Total assets 5,095,074
Current Liabilities (1,879,882)
Non- current Liabilities (10,893,343)
Total liabilities (12,773,225)
Equity (7,678,151)
Revenue* 20,214
Loss* (18,388)
* represents results for the month of June 2013
c) Movements during the year in equity accounted investments in associate
The Groups share (25%) of Sekoko Coal Pty Ltd's loss over the one month period (June 2013) is not
considered material to the Groups consolidated accounts an nd has not been included.
15. Trade and other payables
Consolidated Company
2013 2013 2012
Unsecured $ $ $
Trade creditors 1,307,646 913,347 21,360,444
Other creditors and accruals 21,000 21,000 2,110,535
1,328,646 934,347 23,470,979
16. Other liabilities
Consolidated Company
2013 2013 2012
$ $ $
Deferred revenue 464,515 - -
Employee benefits - - 51,001
464,515 - 51,001
17. Convertible note
Consolidated Company
2013 2013 2012
$ $ $
Convertible note facility 62,634,901 6 62,634,901 -
62,634,901 6 62,634,901 -
In March 2013, the Group entered into a convertible facility agreement with the Standard Bank of South Africa
('SBSA') to obtain a $35,000,000 loan facility. The facility is due for repayment in 18 months from the
utilisation date (10 April 2013) or the lenders can elect to convert the loan to shares in the Group at any time
within the 18 months or be repaid in cash under certain circumstances, for example early repayment of the
facility by the Company. The notes incur interest at 12% LIBOR.
If SBSA elects to convert the facility into shares the formula is 2.1 times the facility amount at a discount
equivalent to 20% of the 30 day VWAP before the election to convert. As SBSA can elect to convert the facility
at any time within 18 months, under Australian Accounting Standards the total amount repayable must
recognised as a current liability.
18. a) Interest bearing liabilities
Consolidated Company
2013 2013 2012
$ $ $
Current:
Gold facility- secured - - 1,046,495(1)
Finance leases - secured - - 318,061(2)
- - 1,364,556
1 The gold facility in 2012 was provided by Macquarie bank and is secured by a fixed and floating charge over
the Group's assets. The facility required the repayment of the debt either by delivery of physical gold or the
Australia dollar equivalent of the gold borrowed amount. In consideration for provision of the facility Macquarie
bank was also granted a royalty equal to 1% over the first 500,000 troy ounces of gold produced from the
Group's tenements.
(2)As the Group was in voluntary administration at 30 June 2012, all finance leases were classified as current.
b) Other financial liabilities
Current:
Loan payable 1,500,000(1) - -
1,500,000 - -
Non-current:
Loans payable 2,764,393(2) - -
2,764,393 - -
(1)The loan from Celtic Capital Pty Ltd is unsecured, non-interest bearing and has a repayment date within twelve
months from 30 June 2013.
(2)The loans payable are non-interest bearing and are not repayable until 30 September 2014.
19. Contributed equity Consolidated Company
2013 2013 2012
a) Ordinary shares $ $ $
177,005,123 issued and fully paid ordinary shares (2012:
2,178,187,039) 32,139,838 32,139,838 82,523,237
Fully paid ordinary shares carry one vote per share and carry the right to dividends. The shares have no par
value. In the event of winding up of the Group, ordinary shareholders rank after creditors and are only entitled
to any surplus proceeds of liquidation. At Shareholders' meeting, each ordinary share is entitled to one vote
when a poll is called, otherwise, each shareholder as one vote on a show of hands.
Issue Number of $
Price Shares
(cents)
Movement in ordinary shares on issue
At 30 June 2011 2,178,187,039 82,523,237
Shares Issued during the year - -
Less: transaction costs on share issues - -
At 30 June 2012 2,178,187,039 82,523,237
Consolidation of capital at 1 for 60 and capital reduction -
(note 21) (2,141,885,817) (82,523,237)
Private placement 0.5 140,000,000 700,000
Public offerings 2.0 150,000,000 3,000,000
Shares issued on acquisition 2.0 1,250,000,000 25,000,000
Placement - 27 March 2013 2.0 81,575,305 1,631,506
Consolidation of capital at 1 for 10 - (1,492,088,874) -
Placement - 9 April 2013 2.0 10,375,000 2,075,000
Placement 11 April 2013 2.0 842,470 168,494
Less: transaction costs on share issues - (435,162)
At 30 June 2013 177,005,123 32,139,838
Consolidated Company
2013 2013 2012
No. No. No.
b) Options over ordinary shares
Unlisted options over ordinary shares 48,256,212 48,256,212 43,728,125
48,256,212 48,256,212 43,728,125
Consolidated Company
Number of Number of
Movement in unlisted options Options Options
At 30 June 2011 125,728,125 125,728,125
Forfeiture of options (82,000,000) (82,000,000)
At 30 June 2012 43,728,125 43,728,125
Consolidation of capital at 1 for 60 (42,999,340) (42,999,340)
Expiry of options (41,666) (41,666)
Consolidation of capital at 1 for 10 (618,407) (618,407)
Issue of options to supplier 25,000,000 25,000,000
Issue of options to investors 23,187,500 23,187,500
At 30 June 2013 48,256,212 48,256,212
On 26 April 2013, 25,000,000 unlisted options exercisable at 20c before 31 December 2016 were issued to
Garrison Capital Pty Limited as consideration for corporate advisory services.
In April 2013, 23,187,500 unlisted options exercisable at 20c before 31 December 2014 were issued to
investors (two free attaching options for every placement share acquired).
No other options were issued during the 2013 financial year.
The issued options in the Group were consolidated on a 1 for 60 basis on 17 July 2012 and on a 1 for 10
basis on 9 April 2013. The exercise price for the options was amended at an inverse proportion to this ratio in
accordance with ASX Listing Rule 7.22.1.
No option holder has any right under the options to participate in any other share issue of the Group or any
other entity. No options were exercised during the financial year or since the end of the financial year.
c) Capital risk management
The Group's capital comprises share capital and reserves less accumulated losses. As at 30 June 2013, the
Group has net assets of $17,552,781 (2012: net liabilities of $24,453,242). The Group manages its capital to
ensure its ability to continue as a going concern and to optimise returns to its shareholders. Refer to note 26
for further information on the Group's financial risk management policies. There have been no changes in the
strategy adopted by management to control the capital of the Group since July 2012.
20. Reserves
Consolidated Company
2013 2013 2012
$ $ $
Share based payment reserve
Balance at beginning of the year 1,264,000 1,264,000 2,614,140
Issued during the year 2,977,245 2,977,245 -
Forfeited during the year (transferred to accumulated losses) - - (1,350,140)
Balance at end of the year 4,241,245 4,241,245 1,264,000
Nature and purpose of reserve
The share based payment reserve is used to record the value of equity benefits provided to directors and
executives as part of their remuneration and non-employees for their services. Refer to Note 25 for further
details of this plan.
21. Accumulated losses
Consolidated Company
2013 2013 2012
$ $ $
Accumulated losses at beginning of the year (108,240,479) (108,240,479) (106,633,204)
Capital reduction 82,523,237 82,523,237 -
Reversal of acc profits attributable to Opus (Note 28) - - 218,640
Transfers from employee equity benefits reserve (Note 20) - - 1,350,140
(25,717,242) (25,717,242) (105,064,424)
Profit/(loss) for the year 6,888,940 6,888,940 (3,176,055)
Accumulated losses at the end of the year (18,828,302) (18,828,302) (108,240,479)
22. Statement of cash flows reconciliation
Consolidated Company
2013 2013 2012
$ $ $
(a) Reconciliation of cash and cash equivalents
For the purpose of the consolidated statement of cash flows,
cash and cash equivalents includes cash on hand and at
bank and short term deposits at call. Cash at the end of the
period as shown in the consolidated statement of cash flows
is reconciled to the related items in the consolidated
statement of financial position as follows:
Cash and cash equivalents (Note 9) 8,439,558 1,475,043 433,294
8,439,558 1,475,043 433,294
Consolidated Company
2013 2013 2012
$ $ $
(b) Reconciliation of net cash flows from operations
with net profit/(loss) after income tax
Net (loss) after income tax 6,888,940 6,888,940 (3,176,055)
Adjustments for:
Profit on disposal of assets - - (906,375)
Foreign exchange (gains) / losses (451,457) (451,457) -
Share based payments 2,977,245 2,977,245 -
Settlement of DOCA debts (22,442,511) (22,442,511) -
Fair value adjustment of non-current assets 1,920,000 3,502,445 -
Finance expense 5,730,245 5,730,245 -
Other 600 600 456,253
Changes in assets and liabilities:
Increase/(decrease) in payables 1,234,437 769,921 (3,219,793)
Increase/(decrease) in employee provisions - - (256,735)
(Increase)/decrease in receivables (216,065) (114,859) 1,181,997
(Increase)/decrease in inventories - - 13,200
Cash flows provided by/(used in) operations (4,358,566) (3,139,431) (5,907,508)
(c) Non cash financing and investing activities
The acquisition of Ariona Company SA during the year was settled by the issue of shares, (note 19).
23. Related party disclosure
(a) Controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of The Waterberg
Coal Company Limited and the following controlled entities:
Name of Entity Country of Equity Holding
Incorporation
2013 2012
Main Street 1116 Pty Ltd South Africa 100% -
Ariona Company SA Seychelles 100% -
Refer to note 32 for details on the acquisition of Ariona Company SA.
(b) Key management personnel
Details relating to key management personnel, including remuneration paid are included in note 24.
(c) Other related parties
Sekoko Coal Pty Ltd is an associate of the Group, a loan totalling $500,000 was advanced during the year
(note 12).
24. Key management personnel
(a) Details of key management personnel
B McMaster Executive Chairman
J Hart Executive Director
S Miller Executive Director (appointed 5 April 2013)
S Funston Finance Director (appointed 5 April 2013)
D Crennan Non-executive Director
There were no other changes of the key management personnel after reporting date and before the
date the financial report was authorised for issue.
(b) Compensation of key management personnel
Consolidated Company
2013 2013 2012
$ $ $
Short-term benefits 233,500 233,500 716,315
Post -employment benefits - - 89,541
Share-based payment - - -
Termination benefits (paid/payable) - - 548,123
233,500 233,500 1,353,979
(c) Option holdings of key management personnel
Vested at 30 June 2013
Balance at
2013 Balance at Granted as Options Net Change 30 June Not
1 July 2012 Remuneration Exercised Other(2) 2013 Exercisable Exercisable
Directors
B McMaster - - - 8,750,000 8,750,000 8,750,000 -
D Crennan - - - - - - -
J Hart - - - 300,000 300,000 300,000 -
S Miller(1) - - - - - - -
S Funston(1) - - - 3,750,000 3,750,000 3,750,000 -
(1)Mr. S Miller and Mr. S Funston appointed 5 April 2013
(2)Includes expiry, forfeitures appointments and resignations from Board.
Balance at Granted as Balance at Vested at 30 June 2012
Options Net Change
2012 1 July Remuneration 30 June
Exercised Other(3) Exercisable
Not
2011 2012 Exercisable
Directors
B McMaster(1) - - - - - - -
D Crennan(1) - - - - - - -
J Hart(1) - - - - - - -
K Barassi(2) 13,500,000 - - (13,500,000) - - -
K Tuckwell(2) 13,500,000 - - (13,500,000) - - -
P Fowler(2) 13,000,000 - - (13,000,000) - - -
Executives
M A Boon(2) 2,000,000 - - (2,000,000) - - -
K Bowyer(2) 4,000,000 - - (4,000,000) - - -
(1)Mr. B McMaster, Mr. J Hart and Mr. D Crennan appointed 12 April 2012
(2)Mr K Barassi, Mr. K Tuckwell, Mr. P Fowler, Mr. M A Boon and Mr. K Bowyer resigned 13 April 2012
(3)Includes expiry, forfeitures, appointments and resignations from Board.
No unlisted options granted to Directors and other key management personnel have been exercised during
the years ended 30 June 2013 and 30 June 2012.
(d) Shares held in The Waterberg Coal Company Limited (number)
Balance Granted as On exercise of Net change Balance
2013
1 July 2012 Remuneration Options er(2) 30 June 2013
Directors
B McMaster - - - 2,350,774 2,350,774
D Crennan - - - 100,000 100,000
J Hart - - - 250,000 250,000
S Miller(1) - - - 27,203,125 27,203,125
S Funston(1) - - - 200,000 200,000
(1)Mr. S Miller and Mr. S Funston appointed 5 April 2013
(2)Includes appointments and resignations from Board
Balance Granted as On exercise of Net change Balance
2012
1 July 2011 Remuneration Options other(3) 30 June 2012
Directors
B McMaster(1) - - - - -
D Crennan(1) - - - - -
J Hart(1) - - - - -
K Tuckwell(2) 2,000,000 - - (2,000,000) -
K D Barassi(2) 4,030,090 - - (4,030,090) -
PL Fowler(2) 2,000,000 - - (2,000,000) -
Executives
K Bowyer(2) 1,690,000 - - (1,690,000) -
M Boon(2) 240,000 - - (240,000) -
(1)Mr. B McMaster, Mr. J Hart and Mr. D Crennan appointed 12 April 2012, their holding in shares were allotted post 30 June 2012
(2)Mr K Barassi, Mr. K Tuckwell, Mr. P Fowler, Mr. M A Boon and Mr. K Bowyer resigned 13 April 2012
(3)Includes appointments and resignations from Board
All equity transactions with key management personnel would be entered into under terms and conditions no
more favourable than those the Group would have adopted if dealing at arm's length.
(e) Other transactions with key management personnel
Garrison Capital Pty Ltd, a company of which Mr McMaster and Mr Funston are directors and shareholders,
provided the Group with a fully serviced office including administration and information technology support and
charged $110,000 for the year ended 30 June 2013 (2012: Nil) for these services, plus reimbursement of
payment for accounting services, corporate advisory fees, courier and other minor expenses of $479,319
(2012: Nil) were charged during the year. $208,260 (2012: Nil) was outstanding at year end. During the year
25,000,000 unlisted options, exercisable at 20c before 31 December 2016 were issued to Garrison Capital Pty
Ltd (and or nominees) as consideration for corporate advisory services (refer note 25).
25. Share based payments
(a) Waterberg Coal Executive Share Option Plan
The Group has established an employee share option plan (ESOP). The objective of the ESOP is to assist in
the recruitment, reward, retention and motivation of executives of the Group. Under the ESOP, the Directors
may invite individuals acting in a manner similar to employees to participate in the ESOP and receive shares
or options. An individual may receive the options, or shares, or nominate a relative or associate to receive the
options or shares. The plan is open to executive officers, nominated consultants and employees of the Group.
The fair value at grant date of options granted during the financial year was determined using the Black
Scholes option pricing model that takes into account the exercise price, the term of the option, the share price
at grant date and expected price volatility of the underlying share and the risk free interest rate for the term of
the option.
There was no employee share options granted during the 30 June 2013 and 30 June 2012 financial year.
(b) Share based payment to suppliers
During the financial year 25,000,000 options were issued to Garrison Capital Pty Ltd for their role as corporate
advisors to the proposed takeover of Firestone Energy Limited. The fair value of the options of $2,977,245
was determined using the Black Scholes option pricing model. The options are exercisable at $0.20 on or
before 31 December 2016. These options are included in the table below.
Balance at Granted Exercised Expired Balance at
Exercise start of the during the during the during the end of the Exercisable at
Grant Date Expiry date price year year year year year end of the year
Number Number Number Number Number Number
26/04/2013 31/12/ 2016 $0.20 - 25,000,000 - - 25,000,000 25,000,000
- 25,000,000 - - 25,000,000 25,000,000
Weighted remaining contractual life
(years) - 3 - - 3 3
Weighted average exercise price - $0.20 - - $0.20 $0.20
The model inputs, not included in the table above, for options granted during the year ended 30 June 2013
included:
(a) options are granted for no consideration and vest immediately;
(b) Expected life of options is three years;
(c) share price at grant date was $0.18;
(d) expected volatility of 100%;
(e) expected dividend yield of Nil; and
(f) a risk free interest rate of 2.66%
There were no other share based payments to suppliers made during the 30 June 2012 and 30 June 2013
financial year.
26. Financial Risk Management
(a) Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class
of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.
(b) Overview
The Group has exposure to the following risks from their use of financial instruments:
credit risk;
liquidity risk;
interest rate risk and
price risk
This note presents information about the Group's exposure to the above risks, their objectives, policies and
processes for measuring and managing risk, and the management of capital. Further quantitative disclosures
are also provided in this note.
The Board has overall responsibility for the establishment and oversight of the risk management framework
including the development and monitoring of risk management policies.
Established risk management policies seek to identify and analyse the risks faced by the Group, set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Adopted risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.
(c) Credit risk
Credit risk refers to the risk of default by counterparties on their contractual obligations resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and
obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from
defaults.
The Group had a significant credit risk exposure to a single counterparty or a group of counterparties having
similar characteristics via the convertible notes. This risk is managed as the counterparties have been
assessed as being of sound credit worthiness and the Group holds a first ranking security against the
underlying assets of the Borrower. The credit risk on liquid funds is limited because the counterparties are
banks with high credit-ratings assigned by international credit-rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,
represents the Group's maximum exposure to credit risk without taking account of the value of any collateral
obtained.
(d) Liquidity risk management
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial
liabilities.
The Group manages liquidity risk by maintaining sufficient cash facilities to meet the operating requirements of
the business and investing excess funds in highly liquid short term investments. The responsibility for liquidity
risk management rests with the Board of Directors.
Alternatives for sourcing our future capital needs include our cash position and the issue of equity instruments.
These alternatives are evaluated to determine the optimal mix of capital resources for our capital needs. We
expect that, absent a material adverse change in a combination of our sources of liquidity, present levels of
liquidity along with future capital raising will be adequate to meet our expected capital needs.
Maturities of financial liabilities
The tables below analyse the group's financial liabilities into relevant maturity groupings based on their
contractual maturities for:
(a) all non-derivative financial liabilities, and
(b) net and gross settled derivative financial instruments for which the contractual maturities are essential for
an understanding of the timing of the cash flows
The table below reflects all contractually fixed pay-offs and receivables for settlement, repayments and
interest resulting from recognised financial assets and liabilities. Cash flows for financial assets and liabilities
without fixed amount or timing are based on the conditions existing at 30 June 2013 and 2012.
Consolidated Company
2013 2013 2012
Contractual maturities of financial liabilities $ $ $
6 months or less 1,328,646 934,347 -24,886,536
6-12 months or less 1,500,000 - -
1-5 years 2,764,393 - -
Over 5 years - - -
Total contractual cash flows 5,593,039* 934,347* -24,886,536
Carrying amount liabilities 5,593,039 934,347 -24,886,536
*as identified in note 17, the convertible note facility is due for repayment in 18 months from the utilisation
date (10 April) or the lenders can elect to convert the loan to shares in the Group at any time within the 18
months or be repaid in cash under certain circumstances, for example early repayment of the facility by the
company. The Directors expect as identified in note 2(a) that the amount will not be settled within 12 months
of balance date.
(e) Interest rate risk
This risk arises on financial assets and liabilities, recognised at year end, where interest rate fluctuations
impact on cash flows or the fair value of fixed rate financial instruments. The Group's policy is to manage its
interest cost and its ability to service the cost, using a combination of sensitivity analysis against the
underlying cash flows of the revenue generating assets purchased, matching loan terms against the life of the
cash generating assets, the available mix of funding options allowing for floating rate facilities to average
interest rates and the availability of entering into interest rate swaps and similar products if required.
The Group has not entered into any interest rate swaps.
Interest rate risk profile
The Group's exposure to market risk for changes to interest rate risk relates primarily to its interest bearing
borrowings, earnings on cash and other financial assets.
Consolidated Company
2013 2013 2012
$ $ $
Cash and cash equivalents 8,439,558(1) 1,475,043 433,294
Other financial asset 5,000,000 - -
Convertible note facility (62,634,901) (62,634,901) -
(1)Included as part of cash and cash equivalents is a put/call option of $6.5m (security deposit) that will be
released to the Group on conversion or repayment of the facility after 18 months from the date of the draw
down. The Group is entitled to the accrued interest revenue on completion of the 18 months or on conversion.
(f) Price risk
The Group is also exposed to securities price risk, which is the risk that a change in equity price will affect the
Group's financial performance, on investments held in Firestone Energy Limited.
Consolidated Company
2013 2013 2012
$ $ $
Other financial assets (listed investment) 2,880,000 - -
Sensitivity Analysis
The following tables illustrate the Group's sensitivities to interest rate and price risk changes. The table
indicates the impact on how profit and equity values reported at balance date would have been affected by
changes in the relevant risk variable that management considers to be reasonably possible. These
sensitivities assume that the movement in a particular variable is independent of other variables.
Interest rate risk Company
Profit Equity
Year ended 30 June 2012 $ $
+/-1% in interest rates 4,333/(4,333) (4,333)/4,333
Year ended 30 June 2013
+/-1% in interest rates (659,589)/672,047 (659,589)/672,047
Consolidated
Profit Equity
Year ended 30 June 2012 $ $
+/-1% in interest rates 4,333/(4,333) (4,333)/4,333
Year ended 30 June 2013
+/-1% in interest rates (659,589)/672,047 (659,589)/672,047
Price risk Consolidated
Profit Equity
$ $
Year ended 30 June 2013
+/-1% in listed investments 28,800/(28,800) 28,800/(28,800)
(g) Fair Value
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be
compared to their carrying amounts in the consolidated statement of financial position.
Fair values are those amounts at which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm's length transaction.
Fair values derived may be based on information that is estimated or subject to judgment, where changes in
assumptions may have a material impact on the amounts estimated. Areas of judgment and the assumptions
have been detailed below. Where possible, valuation information used to calculate fair value is extracted from
the market, with more reliable information available from markets that are actively traded.
The fair values of the Group's financial assets and liabilities have been determined based on the following
methodologies:
(i) Cash and cash equivalents, trade and other receivables and trade and other payables are short-term
instruments in nature whose carrying value is equivalent to fair value. Trade and other payables exclude
amounts provided for annual leave, which is not considered a financial instrument.
(ii) Discounted cash flow models and valuation models are used to determine the fair values of convertible
notes (both assets and liabilities). In respect of the liability, the discount rates used on the calculations
are based on interest rates existing at the end of the reporting period of the instrument. Differences between
fair values and carrying values represent the "day one profit or loss". In respect of the asset, management
referred to the project value of the underlying Waterberg Project as at 30 June 2013.
The aggregate fair values and carrying amounts of financial assets and financial liabilities are disclosed in the
consolidated statement of financial position and in the notes to the financial statements.
Carrying amount Fair value
2013 2012 2013 2012
Company
Financial Assets
Cash and cash equivalents 1,475,043 433,294 1,475,043 433,294
Trade and other receivables 112,837 - 112,837 -
Loan receivable 32,611,358 - 32,611,358 -
Investment in associates and 25,000,000 - 25,000,000 -
controlled entities
Financial Liabilities
Trade and other payables 934,347 23,470,979 934,347 23,470,979
Interest bearing loans and 62,634,901 1,364,556 62,634,901 1,364,556
convertible notes
Carrying amount Fair value
2013 2013
Consolidated
Financial Assets
Cash and cash equivalents 8,439,558 8,439,558
Trade and other receivables 279,504 - 279,504 -
Loan receivable 500,000 - 500,000 -
Other financial assets 7,880,000 - 7,880,000 -
Investment in associates 21,950,000 - 21,950,000 -
Financial Liabilities
Trade and other payables 1,328,646 1,328,646
Interest bearing loans and 66,899,294 66,899,294
convertible notes
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the consolidated statement of financial position have been
analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the
measurements.
The fair value hierarchy consists of the following levels:
- quoted prices in active markets for identical assets or liabilities (Level 1);
- inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2); and
- inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
Level 1 Level 2 Level 3 Total
Consolidated $000 $000 $000 $000
2013
Financial assets/liabilities
Financial assets and liabilities at fair
value through profit and loss:
Convertible note facility - - (62,634,901) (62,634,901)
Other financial asset (Convertible note) - - 5,000,000 5,000,000
Other financial asset (listed investment) 2,880,000 - - 2,880,000
2,880,000 - (57,634,901) (54,754,901)
Level 1 Level 2 Level 3 Total
Company $000 $000 $000 $000
2013
Financial assets/liabilities
Financial assets and liabilities at fair
value through profit and loss:
Convertible note facility - - (62,634,901) (62,634,901)
- - (62,634,901) (62,634,901)
There were no financial instruments for the year ended 30 June 2012.
Included within Level 1 of the hierarchy are listed investments. The fair values of these financial assets have
been based on the closing quoted bid prices at the end of the reporting period, excluding transaction costs.
In determining the fair values of unlisted investments included in Level 2 of the hierarchy, valuation techniques
such as those using comparisons to similar investments for which market observable prices are available
have been adopted.
Derivative instruments are included in Level 2 of the hierarchy with the fair values being determined using
valuation techniques incorporating observable market data relevant to the hedged position.
No transfers between the levels of the fair value hierarchy occurred during the current or previous reporting
periods.
The following table presents the changes in level 3 instruments for the year ended 30 June 2013:
Financial assets:
Convertible notes
adjusted at fair
value
Consolidated 2013
$
Opening balance 1 July 2012 -
Transfer from level 2 -
Issues/additions (net) 5,000,000
Losses recognised in other expense -
Closing balance 30 June 2013 5,000,000
Financial liabilities:
Convertible notes
adjusted at fair
value
Consolidated 2013
$
Opening balance 1 July 2012 -
Transfer from level 2 -
Issues/additions (net) 60,770,184
Losses recognised in finance expense (refer note 6) 1,864,717
Closing balance 30 June 2013 62,634,901
For fair value measurement in Level 3, if there is +/- 1% change in interest rates, the following table presents
the changes:
Consolidated
Profit Equity
Year ended 30 June 2013
+/-1% in interest rates (576,349)/576,349 (576,349)/576,349
The following table represents the reconciliation arising between the fair value at initial recognition and the fair
value using a valuation technique:
2013
$
Initial recognition of day one loss 25,770,184
Fair value adjustment (3,865,528)
Closing balance 30 June 2013 21,904,656
27. Commitments and contingencies
Operating lease commitments
Future minimum rentals payable under non-cancellable operating leases are as follows:
Consolidated Company
2013 2013 2012
$ $ $
Outstanding operating lease commitments are payable as
follows:
Within one year 180,000 180,000 121,480
Later than one year but not more than five years 15,000 15,000 -
195,000 195,000 121,480
On 1 August 2012 the Group entered a service agreement with Garrison Capital Pty Ltd for certain
administrative services and office space for a term of 2 years commencing in August 2012. The Group is
required to give 3 months' written notice to terminate the agreement.
Finance lease commitments
Future minimum lease payments under finance leases as at 30 June are as follows:
Consolidated Company
2013 2013 2012
$ $ $
Finance lease commitments are payable as follows:
Within one year - - 359,334
Later than one year but not more than five years - - -
Less amounts representing finance charges - - (41,273)
- - 318,061
Included in the financial statements as:
Current financial liabilities - - 318,061
- - 318,061
In 2012 the Group had finance leases for five motor vehicles. With the Group being placed into voluntary
administration all liabilities relating to the leases were released.
Exploration commitments
Future minimum exploration expenditure on the Group's tenements in South Australia are as follows:
Consolidated Company
2013 2013 2012
$ $ $
Outstanding operating lease commitments are payable as
follows:
Within one year 330,000 330,000 430,502
Later than one year but not more than five years - - -
330,000 330,000 430,502
28. Discontinued operations
On the 21 April 2011, the entity was placed into voluntary administration by the Directors with PPB Advisory
being appointed Administrators. Efforts to recapitalise the Company prior and subsequent to voluntary
administration were unsuccessful and the administrator subsequently suspended the operations and all were
placed into care and maintenance mode.
On 8 December 2011, creditors approved a resolution for the Company to enter into a Deed of Company
Arrangement (DOCA). The DOCA was executed by the Administrators on 23 December 2011 and sought to
restore the Company to a solvent state by reorganising the Company's share capital and effecting an equity
raising to enable the Company to be reinstated on the ASX. On 24 July 2012, the recapitalisation of the
Company and the effectuation of the DOCA were completed and control of the Company passed to the
Directors effective 24 July 2012, the Company was no longer subject to any other form of external
administration, receivership or liquidation.
The consolidated entity/Company was considered a discontinued operation from 11 April 2011 until the DOCA
was effectuated on 24 July 2012. The financial performance to the date of 24 July 2012, which is included in
the discontinued operation per the statement of comprehensive income, is as follows:
(a) Total profit/(loss) after tax attributable to
Consolidated Company
discontinued operation
2013 2013 2012
$ $ $
Revenue (interest income) - - 191,972
Expenses - - (4,274,539)
Profit/(loss) before income tax - - (4,082,567)
Income tax expense - - -
Profit attributable to parent entity - - -
Profit on sale before income tax 22,442,511 22,442,511 906,512
Income tax expense - - -
Profit on sale after income tax - - 906,512
Total profit/(loss) after tax attributable to discontinued
operation 22,442,511 22,442,511 (3,176,055)
On 24 July 2012, the recapitalization of the Company and the effectuation of the DOCA were completed and
control of the Company passed to the Directors. The Company's secured creditors released and discharged
any security granted to them by the Company and all conditions precedent under the DOCA were satisfied or
waived; resulting in a profit on settlement of DOCA debts of $22,442,511 as follows:
Liabilities as at 24 July 2012 22,715,088 22,715,088 -
Assets as at 24 July 2012 272,577 272,577 -
Net liabilities disposed 22,442,511 22,442,511
(b) Profit/(Loss) disposal
Consideration - - 6,750,137
Value of assets / liabilities disposed - - (6,749,085)
- - 1,052
Distribution from Opus Exploration - - 1,259,123
Assets transferred to liquidator - - (834,060)
NWME liabilities assumed by liquidator - - 727,607
Advance owing from Opus Exploration written-off - - (28,570)
Opus Exploration acc profit at the date of entering
liquidation - - (218,640)
Profit/(Loss) disposal - - 905,460
Total - - 906,512
Included in the 2012 financial year profit on disposal is the net gain of $905,460 attributed to Opus Exploration
going into liquidation and $1,052 gain on disposal of assets related to the Mt Morgan Mine.
(c) The net cash flows of the discontinued operation,
which have been incorporated into the statement of cash
flows, are as follows;
Net cash inflow/(outflow) from operating activities - - (5,907,508)
Net cash inflow from investing activities - - 8,059,121
Net cash inflow/(outflow) from financing activities - - (5,047,762)
Net cash increase/(decrease) in cash generated by the
- -
discontinued (2,896,149)
29. Contingent liabilities
There are no known contingent liabilities.
30. Events after the balance sheet date
Prospectus
Waterberg Coal lodged with the ASIC a re-compliance prospectus for an offer of up to 50,000,000 Shares at
an issue price of $0.20 per WCC Share to raise up to $10,000,000 together with one (1) free attaching listed
option exercisable at $0.20 and expiry of 31 December 2014 for every two (2) Shares subscribed for (Offer).
The prospectus had a minimum subscription of $1,500,000 and the prospectus was a re-compliance
prospectus for the purposes of satisfying Chapters 1 and 2 of the ASX Listing Rules and to satisfy ASX
requirements for re-listing following a change to the nature and scale of the Company's activities as a result of
the Ariona Acquisition.
On 23 September 2013, Waterberg Coal closed the Offer and confirmed to the market that it had received
applications for 7,502,500 Shares and 3,751,250 options exercisable at $0.20 with an expiry of 31 December
2014 under the Offer.
ASX Listing
On 25 September 2013, Waterberg Coal's Shares were reinstated to quotation on the ASX. 3,751,250 options
exercisable at $0.20 with an expiry of 31 December 2014 issued under the Offer were also listed.
Takeover
The Group closed the takeover offer on 23 September 2013 resulting in the acquisition of 1,148,632,708
shares in Firestone Energy Limited (32.36% interest).
Loan advanced
On 30 August 2013, the Group agreed to lend Firestone Energy Limited $3 million, to be used for financing
obligations in relation to the Waterberg Coal Project. The loan is interest free and unsecured.
There were no other known significant events from the end of the financial year to the date of this report.
31. Auditor's remuneration
Consolidated Company
2013 2013 2012
$ $ $
The auditor of the Group is HLB Mann Judd.
Amounts received or due and receivable by HLB Mann Judd
for:
An audit or review of the financial report of the entity and any 57,632 57,632 73,600
other entity in the economic entity.
Other assurance services in relation to the entity and any 28,785 28,785 43,282
other entity in the economic entity. 86,417 86,417 116,882
32. Acquisition of Subsidiary Ariona Company SA
During the financial year, the Group acquired 100% of the voting shares of Ariona Company SA (a company
incorporated in the Seychelles) on 28 March 2013.
The total cost of the acquisition was $25,000,000 and comprised an issue of equity instruments. The Group
issued securities as described in note 25(b) with an issue price of $0.20.
The acquisition does not constitute a reverse acquisition as noted in note 4 and the cost of the acquisition has
been allocated to exploration and evaluation assets as disclosed in note 11.
The fair value of the identifiable assets and liabilities of Ariona Company SA as at the date of acquisition are:
Recognised on
acquisition
$
Trade and other receivables 63,439
Tenement interests 25,273,383
Loans receivable 8,373,195
Trade and other payables (392,278)
Borrowings (8,317,739)
Fair value of identifiable net assets 25,000,000
Cost of the acquisition:
Securities issued, at fair value 25,000,000
Total cost of the acquisition 25,000,000
Had the results of Ariona Company SA being consolidated from 1 July 2012 revenue for the Group would
have been $494,196 and the consolidated result would have been $4,839,134.
All acquisition related costs of $226,000 have been expensed and included in as part of consultants and
legal expenses.
In accordance with a resolution of the directors of The Waterberg Coal Company Limited, I state that:
Directors Declaration
1. In the opinion of the directors:
(a) the financial statements, notes and the additional disclosures included in the directors' report
designated as audited, are in accordance with the Corporations Act 2001, including:
(i) complying with Australian Accounting Standards and Corporations Regulations 2001;
and
(ii) giving a true and fair view of the Group's financial position as at 30 June 2013 and of
its performance for the year ended on that date;
(b) In the directors' opinion, there are reasonable grounds to believe that the Group will be able
to pay its debts as and when they become due and payable, based on the factors outlined in
note 2 (a).
(c) the financial statements comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
2. This declaration has been made after receiving declarations as required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June
2013.
On behalf of the Board
Brian McMaster
Chairman
30 September 2013
Auditor's Independence Declaration
As lead auditor for the audit of the financial report of The Waterberg Coal Company Ltd (formerly
Range River Gold Limited) for the year ended 30 June 2013, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
a) the auditor's independence requirements of the Corporations Act 2001 in relation to the
audit; and
b) any applicable code of professional conduct in relation to the audit.
This declaration is in respect of The Waterberg Coal Company Ltd (formerly Range River Gold
Limited) and the entities it controlled during the year.
HLB Mann Judd Jude Lau
Chartered Accountants Partner
Melbourne
30 September 2013
(A) Top 20 shareholders as at 24 September 2013
Fully paid ordinary shares Number %
THE WATERBERG COAL COMPANY LIMITED <SOUTH AFRICAN CONTROL A/C> 40,734,006 15.87
JARVEST FINANCE LTD 25,875,000 10.08
BALDRAGON HOLDINGS LTD 20,000,000 7.79
CLEARVIEW ASSET PTY LTD <CLEARVIEW ASSET A/C> 16,762,500 6.53
HAWORTH FINANCE LTD 15,000,000 5.85
AMB PROPERTY (PROVIDENCE) PTY LTD 10,000,000 3.90
MITCHELL GRASS HOLDINGS SINGAPORE PTE LTD 10,000,000 3.90
VERNON FINANCE LIMITED 8,625,000 3.36
CELTIC CAPITAL PTY LTD <THE CELTIC CAPITAL A/C> 5,799,000 2.26
BELL POTTER NOMINEES LTD <BB NOMINEES A/C> 4,785,973 1.87
CARRICK HOLDINGS LIMITED 4,767,614 1.86
EVENING STAR ENTERPRISES PTY LTD <MILLCORP SUPER FUND A/C> 4,500,000 1.75
MR JASON PETERSON & MRS LISA PETERSON <J & L PETERSON S/F A/C> 3,180,000 1.24
CELTIC CAPITAL PTY LTD <CELTIC CAPITAL NO 2 A/C> 3,000,000 1.17
JP MORGAN NOMINEES AUSTRALIA LIMITED <CASH INCOME A/C> 2,518,924 0.98
BEACHLINE HOLDINGS PTY LTD <CLIFTON SUPERANNUATION FUND> 2,500,000 0.97
LEAVILLE HOLDINGS PTY LTD 2,500,000 0.97
MILLCORP SECURITIES PTY LTD <MILLCORP SECURITIES A/C> 2,500,000 0.97
ELINOR WEAVING <THE CLIFTON A/C> 2,500,000 0.97
RESOURCE VENTURE CAPITAL PARTNERS PTY LTD 2,362,500 0.92
TOTAL 187,910,517 73.21
(B) Top 20 listed option holders as at 24 September 2013
Listed options Number %
AMB PROPERTY (PROVIDENCE) PTY LTD 1,250,000 33.32
CELTIC CAPITAL PTY LTD <CELTIC CAPITAL A/C> 571,025 15.22
CELTIC CAPITAL PTY LTD <CELTIC CAPITAL NO 2 A/C> 135,000 3.60
BRAVE WARRIOR HOLDINGS 125,000 3.33
MITCHELL GRASS HOLDING SINGAPORE PTE LTD 125,000 3.33
FTV MANAGEMENT <P AND G SOUMILAS RETIREMENT BENEFITS FUND> 100,000 2.67
BOATSWAINS POINT PTY LTD 100,000 2.67
RJ WADE PTY LTD 80,000 2.13
TODD MATTHEW WRIGHT BENNET 75,000 2.00
ZVI RAPHAEL PTY LTD 75,000 2.00
JOEL CANN 62,500 1.67
BRETT MATTHEW WARD 62,500 1.67
MRS JENNIFER MAREE REILLY 62,500 1.67
PENTIN PTY LTD 55,000 1.47
EDWARD SUNDSTRUM 50,000 1.33
GAIL AND ALAIN LAVOIPIERRE 50,000 1.33
WINDSOR EQUITIES PTY LTD 50,000 1.33
JWSP PTY LTD <JAMES W PETERS FAMILY A/C> 50,000 1.33
MRS ANDREA MURRAY & MR JONATHAN MURRAY 50,000 1.33
MR SIMON MORLEY 50,000 1.33
TOTAL 3,178,525 84.73
(C) Analysis of shareholders as at 24 September 2013
Spread of shareholdings Total Units % of
Holders Issued
Capital
1 - 1000 5,111 1,021,536 0.40
1001 - 5,000 778 1,723,643 0.67
5,001 - 10,000 171 1,234,280 0.48
10,001 - 100,000 330 14,321,485 5.58
100,001 - 9,999,999,999 131 238,299,150 92.87
TOTAL 6,521 256,600,094 100
(D) Substantial equity security holders as at 24 September 2013
Number %
THE WATERBERG COAL COMPANY LIMITED <SOUTH AFRICAN
40,734,006 15.87
CONTROL A/C>
JARVEST FINANCE LTD 25,875,000 10.08
BALDRAGON HOLDINGS LTD 20,000,000 7.79
CLEARVIEW ASSET PTY LTD <CLEARVIEW ASSET A/C> 16,762,500 6.53
HAWORTH FINANCE LTD 15,000,000 5.85
(E) Voting Rights
Fully Paid shares
On a show of hands, every member present in person or by attorney or by way of proxy or by representative shall
have one vote. Upon a Poll, every member present in person or by attorney or by proxy or by representative shall
have one vote for every share held.
Exploration licences
The Group has an interest at the date of this report in the following Exploration and Mining Licences.
Licences are located in South Australia:
Property Name Tenement Interest
Lyons EL 5221 100%
Glenloth EL 4197 100%
Claypan Dam EL 4445 100%
The Group's interest in the Waterberg Coal Project, located in South Africa:
Properties Right under Relevant Holder Interest Issue Date Expiry Date
which the Joint
properties Venture
are held
Vetleegte Vetleegte First Joint Uzalile 37.39% Granted New Order Renewal lodged 19
Prospecting Venture Joint Prospecting Right No. September 2011 and prior to
Right Venture 651/2006, on the expiry date.
(Sekoko 19/10/06
Resources Section 18(5) of the MPRDA
and provides that prospecting
Uzalile) right in respect of which an
application for renewal has
been lodged will remain in
force until such time as the
renewal application has been
granted or refused.
Olieboomsfontein Duikerfontein First Joint Sekoko 37.39% Granted New Order 3 July 2016
Prospecting Venture Coal Prospecting Right No.
Right 681/2007, on
13/10/05
Renewal on 3 July
2013
Duikerfontein Duikerfontein First Joint Sekoko 37.39% Granted New Order 3 July 2016
Prospecting Venture Coal Prospecting Right No.
Right 681/2007, on
13/10/05
Renewal on 3 July
2013
Swanepoelpan Duikerfontein First Joint Sekoko 37.39% Granted New Order 3 July 2016
Prospecting Venture Coal Prospecting Right No.
Right 681/2007, on
13/10/05
Smitspan Mining Right Second Joint Sekoko 37.39% Granted New Order 16/09/2041
Venture Coal Mining Right No.
22/2011, on 17/09/11
Massenberg Mining Right Second Joint Sekoko 37.39% Granted New Order 16/09/2041
Venture Coal Mining Right No.
22/2011, on 17/09/11
Minnasvlakte Mining Right Second Joint Sekoko 37.39% Granted New Order 16/09/2041
Venture Coal Mining Right No.
22/2011, on 17/09/11
Hooikraal Mining Right Second Joint Sekoko 37.39% Granted New Order 16/09/2041
Venture Coal Mining Right No.
22/2011, on 17/09/11
Date: 30/09/2013 05:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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