2020 Annual Report PDF
2020 Annual Report PDF
2020 Annual Report PDF
Producers of
high-quality coal.
This report includes forward looking statements relating to future events and expectations.
While these statements reflect expectations at the date of this publication they are by their nature not certain and are subject to known and unknown risks.
Whitehaven makes no representation, assurance or guidance as to the accuracy or likelihood of fulfilling any such forward looking statements (whether express
or implied) and, except as required by applicable regulations or law, Whitehaven does not undertake to publically update such forward looking statements.
FY20 IN REVIEW | INTRODUCTIONS | ABOUT US | RESOURCES & RESERVES | DIRECTORS’ REPORT | FINANCIAL REPORT | GLOSSARY | CORPORATE DIRECTORY
Contents
FY20 in review 2
Introductions 3
About us 5
Directors’ Report 15
Remuneration Report 37
Financial Report 62
Glossary 122
FY20 in review
Financial highlights
– Net profit after tax before significant items of $30.0 million, a decrease of 95% on FY19
– Underlying earnings before interest, depreciation and amortisation (EBITDA) of $306.0 million, a decrease of 71%
– Operating cash flows of $146.4 million, a decrease of 84%
– FY20 earnings reflect the softening of gC Newcastle thermal prices and the impact on run of mine (ROM)
production of previously reported labour shortages and dust events at our largest mine, Maules Creek,
and the scheduled eight week Narrabri mine longwall move
– Net debt of $787.5 million at 30 June 2020
– Dividends of $312.2 million were paid during the period
– Refinanced our A$1.0 billion secured bank debt facility, now maturing in July 2023
– $468.8 million of available liquidity.
Net profit after tax before significant items ($m) 30.0 564.9 (95%)
Operational highlights
Equity ROM coal production for FY20 was 16.5Mt, 4% below the previous corresponding period (pcp), reflecting
the eight week Narrabri longwall change out, the challenging production conditions at Maules Creek due to labour
shortages and disruption due to drought and bushfires, and the impact of unmapped historical underground
workings at Werris Creek.
Equity coal sales, including purchased coal, were 16.6Mt, in line with the pcp.
Equity own metallurgical coal sales were 17% of total FY20 sales, below pcp of 21%.
1 Continuing operations do not include Sunnyside or Rocglen mines, which have transitioned into rehabilitation phase.
Introductions
Chairman’s introduction
skill and dedication in managing a noting that in its World Energy
tough year and a testing confluence Outlook 2019, the International
of events and circumstances. Energy Agency estimated
that more than US$1 trillion of
The arrangements implemented
capital invested in existing global
by management to protect
coal-fired generation – most of
against COVID-19 were swift,
which is located in Asia – is yet
comprehensive and effective.
to be recovered. We expect our
Other demanding and complex
customer nations to capitalise on
issues that arose during the year
their installed and planned coal-fired
were also successfully overcome.
power generation to underpin their
From supporting our operations
economic recoveries when the threat
through the worst drought since
of the pandemic is either eliminated
Federation, to quickly addressing
or can be sustainably managed.
acute labour shortages, to
managing the growing appetite We continue to expand our
for environmental, social and business, geared towards increased
Dear Shareholder governance (ESG) strategy and production. Our key development
performance data among our projects, Vickery and Winchester
FY20 was not a year anyone could investment community – it was South, will help us to further diversify
have predicted. Even for our sector, a commendable team effort. our product mix, with a greater
which is accustomed to having to weighting towards metallurgical
weather cyclical lows, it has proven At the same time, charting a path
coal low in impurities. Our strong
to be a uniquely challenging time. away from COVID-19 and towards
relationships with customers in
COVID-19 has been remarkable in better performance and greater
India will put us in good stead to
terms of its rapid onset and spread, prosperity means acknowledging
meet the forecast growth in demand
and the significant disruption it has those areas where we have not met
for metallurgical coal in that market,
caused to global supply chains and the high standards our shareholders
in particular once Vickery and
entire economies. expect. Let me assure investors
Winchester South are operational.
that every member of the Board
At the start of the pandemic, many is cognisant of the need to address We continue to work with a range
of our key customers in North Asia these aspects, including in relation of stakeholders to share our views
acted decisively to respond to the to improving our environmental on the role high-quality coal will
threat of the virus, as did Australia compliance and delivering greater play as part of the continuing global
itself. Since that time, these nations consistency of output from our energy transition, as well as a range
have been able to demonstrate larger mines. of other ESG-related issues. In FY19,
considerable resilience even while we reported against the voluntary
others faltered. This meant that The road out of the current
recommendations of the Financial
through the second half of FY20 economic downturn and our
Stability Board’s Task Force on
our coal remained well sold in many company’s transformation to
Climate-related Financial Disclosures,
of our key markets – a fact that also a more efficient, cost-effective
and have done so again this year.
gives us optimism for the time when producer will not always be easy.
we are better able to contain and But there are good reasons to Our business remains robust, with
control COVID-19 worldwide. be confident, starting with the the right assets, people and strategy
fact that we have toughed-out to continue to deliver value for our
Notwithstanding the fact that low points in the cycle before and shareholders over the medium to
demand held up relatively well, delivered for patient shareholders long term. On behalf of the Board,
we could not evade the downturn in the periods that followed, and I would like to thank shareholders
in price that negatively affected that will inevitably follow again. for their ongoing support.
all key energy commodities.
I acknowledge that serious and We have also invested significantly
real challenges persist in this in our leadership capability
area, but they are by no means and structure.
insurmountable. The fundamentals of our business
remain strong, and we have a The Hon. Mark Vaile, AO
On behalf of the entire Board,
positive role to play in the local Chairman
I want to take this opportunity
to commend Managing Director and global economic recovery,
and CEO Paul Flynn and the entire and indeed in a more carbon-
Executive Leadership Team on their conscious world. It is worthwhile
About
us.
FY20 IN REVIEW | INTRODUCTIONS | ABOUT US | RESOURCES & RESERVES | DIRECTORS’ REPORT | FINANCIAL REPORT | GLOSSARY | CORPORATE DIRECTORY
We help power developed and We operate four mines (three delivery, safe operation, and targeted
emerging economies in Asia where open-cut and one large underground investment in the local economy
there is strong and growing demand mine) in the Gunnedah Coal Basin and community.
for our product, particularly for use of NSW. Our operating assets are
in high-efficiency, low-emissions We are proudly local, and around
complemented by two high-quality,
coal-fired power stations. 75% of our 2,500-strong workforce
near-term development assets,
lives in the local communities around
Our purpose as a company is being Vickery, near Gunnedah, and
our mine sites. We believe in helping
to support and sustain regional Winchester South, in Queensland’s
communities grow, ensuring benefits
communities by exporting high- Bowen Basin. Over our almost
flowing from our operations are seen
quality thermal and metallurgical 20-year history, including 12 years
and felt locally.
coal from Australia to the world. as a publicly-listed entity on the
North West NSW is the focus Australian Securities Exchange,
of our capital investment and we have developed a growing
workforce presence. reputation for excellence in project
QLD Moranbah
AUSTRALIA
Mackay
Port of Hay Point
NSW Gunnedah
Moranbah Sydney
Winchester South Project
Rockhampton
QUEENSLAND Blackwater
Port of Gladstone
Gladstone
PACIFIC OCEAN
Purpose Principles
To support and sustain The following principles guide our interactions internally
regional communities by and with external stakeholders.
exporting high-quality thermal
and metallurgical coal from
Australia to the world. Safety
The safety of our people, workplaces and
the communities around us comes first.
Vision We are committed to Zero Harm.
To be the benchmark coal Safety Teamwork Respect
Teamwork
investment on the ASX.
We work collaboratively and support one another.
Integrity Value
Integrity
Excellence
Value Excellence
Value
Safety
We create value for shareholders,
Teamwork Respect
customers and local communities.
Integrity Value Excellence
Business outputs
Employees Community Customers Investors
We provide skills We support local We offer a reliable supply We aim to provide strong
development pathways communities through of high-quality coal to and consistent returns
and stable regional direct investment, job support economic and to shareholders and joint
employment in a safe creation, partnerships social development in venture partners from our
and rewarding work with local suppliers the Asian region. existing portfolio of mines
environment. and working with with upside potential from
community groups. key growth assets.
Our strategy
Disciplined growth We have invested in high-quality, large-scale, long-life assets that allow the
and capital management business to efficiently manage the cyclical nature of the commodities sector.
Towards a bigger, more We expect to grow our portfolio from a managed level of approximately 21Mt in
productive Whitehaven 2020 to over 40Mt by 2030.
As some of our smaller foundation mines reach the end of their lives, our business
is oriented towards scaling-up larger existing operations and delivering on our key
development assets, Vickery and Winchester South.
Maintaining capital discipline and a focus on productivity gains over an expanding
production base will continue to drive returns for shareholders.
Investing in Our track record of growth and our strong development pipeline make us
our talent pipeline an attractive employer for committed and motivated people who value being
a part of a community and achieving goals. As the largest private employer in
Attracting and retaining
North West NSW, we will continue to communicate the benefits of our regional
the right people
location – and that of our development site in Queensland’s Bowen Basin –
to attract talent to support high performance and further expansion.
Latent capacity We are actively assessing and pursuing opportunities to access latent capacity in
our mines through upgrades to mobile equipment as well as fixed infrastructure.
Unlocking future value
These opportunities help us realise the full extent of the resources at our mines
and enable us to do more with less.
Premium products The supply of high-energy, low-ash and low-sulphur coal globally is constrained
for premium markets but, at the same time, demand for coal with these attributes is increasing in a
world seeking to minimise atmospheric carbon emissions. Our quality assets and
Leveraged to the quality
strong customer relationships in the key export markets within our geographic
end of the spectrum
region mean we are able to attract premium pricing for our products.
Diversification Our business produces high-quality thermal coal and semi-soft coking coal
of product range (SSCC). With the purchase of Winchester South, we have set a path to increase
our exposure to other metallurgical coal products. We can also optimise
Building a more
revenue by responding to prevailing pricing spreads between the thermal
resilient portfolio
and SSCC markets.
Innovating Productivity of the coal mining industry has improved over time as equipment
has become bigger and more efficient. At Whitehaven we employ large equipment
Delivering the
matched to the mining conditions at our operations, including ultraclass and
technology dividend
autonomous fleets at Maules Creek.
Opportunistic M&A We take time to critically assess the strengths and weaknesses of our business and
market dynamics. Where acquisition opportunities present themselves, we review
Keeping a vigilant eye
and act on them appropriately. We do this in a measured and disciplined manner
on structural shifts in
with the objective of creating longer-term value for our shareholders.
the market
Resources
& Reserves.
FY20 IN REVIEW | INTRODUCTIONS | ABOUT US | RESOURCES & RESERVES | DIRECTORS’ REPORT | FINANCIAL REPORT | GLOSSARY | CORPORATE DIRECTORY
Narrabri North
ML1609 143 153 296 – 1 Mar-20
Underground**
Narrabri South
EL6243 144 170 314 8 1 Mar-20
Underground**
Werris Creek
ML1563 ML1672 9 1 10 – 1 Mar-20
Opencut
Rocglen
ML1620 2 3 6 0 2 Mar-19
Opencut
Rocglen
ML1620 – 3 3 1 2 Mar-15
Underground
Vickery
CL316 EL4699 EL5831 230 165 395 110 2 Jul-15
Opencut
EL7407 EL8224
Vickery ML1464 ML1471 ML1718 – 95 95 135 2 Jul-15
Underground
Winchester
MDL 183 130 300 430 100 3 Oct-18
South
Bonshaw
EL6450 EL6587 – 4 4 7 2 Jun-14
Opencut
Ferndale
EL7430 103 135 238 134 4 Jan-13
Opencut
Ferndale
EL7430 – – – 73 4 Jan-13
Underground
Oaklands North
EL6861 110 260 370 580 2 Jun-14
Opencut
Pearl Creek
EPC862 – 14 14 38 5 Nov-12
Opencut***
1. Mark Benson, 2. Benjamin Thompson, 3. Troy Turner, 4. Greg Jones, 5. Phill Sides.
* Maules Creek Joint Venture – Whitehaven owns 75% share.
** Narrabri Joint Venture – Whitehaven owns 77.5% share.
*** Dingo Joint Venture – Whitehaven owns 70% share.
# The Coal Resources for active mining areas are current to the pit surface as at the report date.
Narrabri North
ML1609 97 5 102 93 4 98 2 Mar-20
Underground**
Narrabri South
EL6243 – 121 121 – 114 114 2 Mar-20
Underground**
Werris Creek
ML1563 ML1672 7.1 0.4 7.5 7.1 0.4 7.5 1 Mar-20
Opencut
Rocglen
ML1620 – – – – – – 1 Note
Opencut
Information in this report that relates to Coal Resources and Coal Reserves is based on and accurately reflects reports
prepared by the Competent Person named beside the respective information. Greg Jones is a principal consultant
with JB Mining Services. Phillip Sides is a senior consultant with JB Mining Services. Benjamin Thompson is a Geologist
with Whitehaven Coal. Mark Benson is a geologist with Whitehaven Coal. Doug Sillar is a full time employee of RPM
Advisory Services Pty Ltd. Michael Barker is a full time employee of Palaris Ltd.
Named Competent Persons consent to the inclusion of material in the form and context in which it appears.
All Competent Persons named are Members of the Australasian Institute of Mining and Metallurgy and/or
The Australian Institute of Geoscientists and have the relevant experience in relation to the mineralisation being
reported on by them to qualify as Competent Persons as defined in the Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition).
Directors’
Report.
For the year ended 30 June 2020
FY20 IN REVIEW | INTRODUCTIONS | ABOUT US | RESOURCES & RESERVES | DIRECTORS’ REPORT | FINANCIAL REPORT | GLOSSARY | CORPORATE DIRECTORY
Directors’ Report
For the year ended 30 June 2020
The Directors present their report together with the consolidated financial report
of Whitehaven Coal Limited (‘the Company’ or ‘Whitehaven’), being the Company,
its subsidiaries and the Group’s interest in joint operations for the year ended
30 June 2020 and the auditor’s report thereon.
1. Principal activities
The principal activity of Whitehaven Coal Limited and its controlled entities (the ‘Group’) during the period was the
development and operation of coal mines in New South Wales and Queensland.
In the opinion of the directors, there were no significant changes in the state of affairs of the Group that occurred
during the financial year that have not been noted in the review of operations.
The Hon. Mark Vaile AO As Deputy Prime Minister of Australia and Leader of the National
Party from 2005 to 2007, Mark established an extensive network
Chairman
of contacts throughout Australia and East Asia. His focus at
Non-Executive Director home was with regional Australia and particularly northern
Appointed: 3 May 2012 NSW. As one of Australia’s longest serving Trade Ministers from
1999 through until 2006 Mark led negotiations which resulted
in Free Trade Agreements being concluded with the United
States of America, Singapore and Thailand as well as launching
negotiations with China, Japan and ASEAN.
Importantly, early in his Ministerial career as the Minister for
Transport and Regional Services, Mark was instrumental in the
establishment of the ARTC which operates the Hunter Valley
rail network.
Mark brings significant experience as a company director having
been Chairman of Aston Resources, CBD Energy Limited and
SmartTrans Limited and a former independent Director on the
board of Virgin Australia Holdings Limited. Mark is currently a
Director of ServCorp Limited which is listed on the ASX (since
June 2011), Stamford Land Corp which is listed on the Singapore
Stock Exchange, a Director Trustee of HostPlus Superfund and
Chairman of Palisade Regional Infrastructure Fund.
Former ASX listed directorships in the last three years:
Chairman, SmartTrans Holdings Limited (April 2016–June 2018);
Director, Virgin Australia Holdings Limited (September 2008–
December 2018)
John Conde AO John has over 30 years of broad based commercial experience
across a number of industries, including the energy sector,
BSc, BE (Electrical)
and was chairman of the company prior to the merger with
(Hons), MBA (Dist)
Aston Resources. John is chairman of Cooper Energy Limited
Deputy Chairman (since February 2013) and The McGrath Foundation. He is also
Non-Executive Director president of the Commonwealth Remuneration Tribunal and
Appointed: 3 May 2007 a Non-Executive Director of the Dexus Property Group (since
April 2009). He recently retired as chairman of Bupa Australia
and New Zealand. He retired as chairman of the Sydney
Symphony Orchestra in May 2015. He was previously chairman
of Ausgrid (formerly Energy Australia) and Destination NSW.
He was formerly chairman and managing director of Broadcast
Investment Holdings, as well as a Non-Executive Director of
BHP Billiton Limited and Excel Coal Limited.
Former ASX listed directorships in the last three years: Nil
Dr Julie Beeby Julie has more than 25 years’ experience in the minerals and
petroleum industries in Australia including major Australian
BSc (Hons I), PhD
and US resources companies and as Chief Executive Officer of
(Physical Chemistry),
the ASX listed coal seam gas producer WestSide Corporation
MBA, FAICD, FTSE
Ltd. Julie has technical, operations and strategy expertise and
Non-Executive Director has held senior and executive positions in coal mining, mining
Appointed: 17 July 2015 services and coal seam gas after commencing her career
in coal and mineral processing research. Julie was formerly
the Chairman of the Queensland Electricity Transmission
Corporation Limited, and Non-Executive Director of Gloucester
Coal Limited, OzMinerals Limited, CRC Mining, Queensland
Resources Council and Australian Coal Research. Currently Julie
is a Non-Executive Director of Tasmanian Networks Pty Limited.
Former ASX listed directorships in the last three years:
Director, Oz Minerals Limited (April 2016–May 2018)
Paul Flynn Paul has extensive experience in the mining, infrastructure,
construction and energy sectors gained through 20 years
BComm, FCA
as a professional advisor at Ernst & Young. Paul was formerly
Managing Director Chief Executive Officer and Managing Director of the Tinkler
Appointed: 25 March 2013 Group and was instrumental in the merger of Whitehaven Coal
Previously Non-Executive with Aston Resources. Paul joined the Board of Whitehaven
Director on 3 May 2012 and assumed the role of Managing Director and
CEO on 27 March 2013. Prior to joining the Tinkler Group, Paul
Appointed: 3 May 2012 was the managing partner of Ernst & Young’s Sydney office and
a member of its Oceania executive team. As a partner for over
eight years, Paul managed many of the firm’s largest mining
and energy clients across Australia, Asia, South and North
America. Paul has also fulfilled various leadership roles with
large corporations on secondment including as the CFO
of a top 50 listed company.
Former ASX listed directorships in the last three years: Nil
Directors’ Report
For the year ended 30 June 2020
Fiona Robertson Fiona has a corporate finance background, with more than
20 years’ experience as CFO of ASX-listed emerging and
MA (Oxon), FAICD,
mid-tier mining and oil & gas companies preceded by 14 years
MAusIMM
with Chase Manhattan Bank in London, New York and Sydney,
Non-Executive Director in corporate banking, credit risk management and mining finance
Appointed: roles. Previous Non-Executive Directorships include ASX-
16 February 2018 listed oil and gas producer, Drillsearch Energy Limited where
she chaired the Audit & Risk Committee and Heron Resources
Limited. Currently Fiona is a Non-Executive Director of Bellevue
Gold Limited (since May 2020).
Former ASX listed directorships in the last three years:
Heron Resources Limited (April 2015–July 2020)
Lindsay Ward Lindsay has more than 30 years’ experience across industries
including mining, exploration, mineral processing, ports
BAppSc (Hons I),
management, rail haulage, power generation, gas transmission,
GradDip (Mgt), GAICD
transport and logistics. Having started his career in the mining
Non-Executive Director industry, Lindsay has held a wide range of leadership and
Appointed: operational roles. He is currently CEO of Palisade Integrated
15 February 2019 Management Services, which has eight diverse infrastructure
assets under management. Prior to this, he was the Managing
Director of Dart Mining, a Melbourne-based exploration
company, and a Non-Executive Director of Metro Mining Limited.
Lindsay also has extensive mining experience having worked with
BHP Australia Coal (Bowen Basin – Queensland), Camberwell
Coal (Hunter Valley – NSW) and Yallourn Energy (Latrobe Valley
– Victoria) in various mine engineering and senior leadership
roles including Mine Manager and General Manager. Lindsay
is a Graduate Member of the Australian Institute of Company
Directors and is an experienced Director of both listed and
unlisted companies.
Former ASX listed directorships in the last three years:
Director, Metro Mining Limited (October 2011–February 2019)
Raymond Zage Raymond is the founder and CEO of Tiga Investments Pte Ltd.
He is also senior advisor to Farallon Capital Management, L.L.C.,
BSc Finance
one of the largest alternative asset managers in the world, and
Non-Executive Director a Non-Executive Director of Toshiba Corporation, which is listed
Appointed: on the Tokyo Stock Exchange, and PT Lippo Karawaci Tbk, which
27 August 2013 is listed on the Indonesian Stock Exchange. Raymond has been
involved in investments throughout Asia in various industries
including financial services, infrastructure, manufacturing, energy
and real estate. Previously Raymond was the Managing Director
and CEO of Farallon Capital Asia, and prior to that worked in
the investment banking division of Goldman, Sachs & Co.
in Singapore, New York and Los Angeles.
Former ASX listed directorships in the last three years: Nil
Paul Flynn –
Kevin Ball – Timothy Burt –
Managing Director and Chief
Chief Financial Officer General Counsel and
Executive Officer
BComm, CA Company Secretary
Refer to details set out in section 2(a) B.Ec, LLB (Hons) LLM
Appointed Chief Financial Officer
Directors on page 17.
of Whitehaven Coal in October Timothy joined Whitehaven as
2013, Kevin Ball has over 25 years’ General Counsel and Company
experience working in the mineral Secretary in July 2009. He has
and energy industry across coal, more than 20 years’ ASX listed
oil and gas and in complex company legal, secretarial and
consulting practices. governance experience across a
range of industries. Prior to joining
A finance graduate of the
Whitehaven, Timothy held senior
University of New South Wales,
roles at ASX listed companies Boral
Kevin is a Chartered Accountant
Limited, UGL Limited and Australian
having spent 11 years with Ernst &
National Industries Limited. He
Young at the commencement of
holds a Master of Laws from the
his career predominantly in EY’s
University of Sydney.
natural resources group and has
a graduate Diploma in Geoscience
(Mineral Economics) from
Macquarie University.
Directors’ Report
For the year ended 30 June 2020
Directors’ Report
For the year ended 30 June 2020
Ordinary shares
Paul Flynn 1
1,282,535
Health, Safety,
Audit & Risk Environment Governance &
Directors’ Management Remuneration & Community Nominations
Director Meetings Committee Meetings Committee Meetings Committee Meetings Committee Meetings
A B A B A B A B A B
Mark Vaile 13 13 6 6 3 3 – – 1 1
John Conde 13 13 6 6 3 2 – – 1 1
Julie Beeby 13 13 – – – – 4 4 1 1
Paul Flynn 13 13 – – – – – – – –
Fiona Robertson 13 13 6 6 – – 4 4 – –
Lindsay Ward 13 13 – – 3 3 4 4 – –
Ray Zage 13 12 – – – – – – – –
A – Number of meetings held during the time the Director held office during the year.
B – Number of meetings the Director attended.
Directors’ Report
For the year ended 30 June 2020
3. Other
3 (a) Dividends 3 (c) Indemnification and insurance of officers
Paid during the year Indemnification
Dividends of $312,197,000 were paid to The Company has agreed to indemnify, to the fullest
shareholders during the year ended 30 June 2020 extent permitted by law, all current and former directors
(2019: $464,854,000). of the Company against liabilities that may arise from
their position as directors of the Company and its
Declared after end of year controlled entities. The agreement stipulates that the
The Directors resolved not to pay a final dividend Company will meet the full amount of any such liabilities,
with respect to the year ended 30 June 2020. including costs and expenses.
Insurance premiums
3 (b) Share options
During the financial year the Company paid premiums
Shares issued on exercise of options in respect of directors’ and officers’ liability and legal
expenses insurance contracts. Such insurance contracts
During the reporting period 1,360,181 options
insure persons who are or have been directors or officers
were exercised.
of the Company or its controlled entities against certain
Unissued shares under options liabilities (subject to certain exclusions).
At the date of this report there were 3,708,203 The directors have not included details of the nature
unissued ordinary shares of the Company under of the liabilities covered or the amount of the premium
options. Refer to note 5.5 of the financial statements paid in respect of the directors’ and officers’ liability and
for further details of the options outstanding. legal expenses insurance contracts, as such disclosure
is prohibited under the terms of the contract.
3 (e) Rounding
The Company is of a kind referred to in ASIC
Corporations Instrument 2016/191 and dated 24 March
2016 and, in accordance with that Class Order, all financial
information presented in Australian dollars has been
rounded to the nearest thousand unless otherwise stated.
FY20 FY19
Significant items after tax (refer to note 2.2 Significant items) – (37.0)
Net interest expense (refer to note 5.2 Finance income and expense) (36.0) (32.9)
1 The prior year ended 30 June 2019 includes $12.3 million of accelerated depreciation recognised in connection with the replacement of the existing hydraulic
cylinders with higher capacity hydraulic cylinders at the Narrabri mine. This has been disclosed as a significant item in note 2.2 of this financial report.
Directors’ Report
For the year ended 30 June 2020
1 Calculated in accordance with the senior facility covenant requirements and therefore excludes lease liabilities recognised upon adoption of AASB 16 Leases of
$130,313,000 (2019: $134,111,000).
2 Net Debt/(Net Debt plus Equity).
Directors’ Report
For the year ended 30 June 2020
Review of operations
Safety
The TRIFR decreased to 4.1 at the end of June 2020, from 6.2 at the end of June 2019. Whitehaven’s TRIFR remains
well below the NSW coal mining average of 14.6. The Company is committed to achieving zero harm to its people and
environment, and management is striving for better safety performance across all operations.
Note: Tonnages in the above table include saleable coal production and sales of produced coal from Sunnyside of 174kt and 232kt respectively (2019: 417kt and 416kt respectively).
The tonnages in the table above are presented on an equity basis. Production tables and associated commentary set out in the mine-by-mine analysis
are presented on a managed (100%) basis.
FY20 saleable coal production and sales of produced coal were below the previous corresponding period.
Following are key features of the period:
– ROM coal production was below the prior corresponding period.
– Opening coal inventories were drawn down in H1 FY20, supporting both saleable coal production and sales volumes.
– ROM production was weighted to the June quarter in both periods with 40% of FY20 and 32% of FY19 ROM
production delivered in the June quarter respectively.
– Equity product stocks at 30 June 2020 were 1.4Mt, an increase of 0.5Mt compared to the 0.9Mt at 30 June 2019.
This resulted from an increase in the proportion of final quarter ROM production being processed in FY20
relative to FY19.
Maules Creek
Ownership: Whitehaven 75% and Operator; ICRA MC Pty Ltd (an entity associated with Itochu Corporation) 15%;
J-Power Australia Pty Ltd 10%
Maules Creek ROM production decreased by 8% to 10.7Mt (FY19: 11.7Mt), owing primarily to labour shortages, and
dust and smoke events associated with drought conditions and regional bushfires. The labour shortages were largely
filled in the third quarter and the focus shifted to investing in skills development to improve utilisation of equipment
and the productivity of our workforce. Record ROM production of 4.2Mt was achieved in the final quarter of the year.
This coincided with planned access to the high yielding Braymont seam, a return to a full roster of labour and improved
excavator productivity.
Saleable coal production decreased by 11% to 8.2Mt (FY19: 9.2Mt), reflecting both the decrease in ROM coal production
and a decrease in mine yields from 82% in FY19 to 80% in FY20. The decrease in mine yields over the 12-month period
was related to seam mix and a continuing focus on producing high quality thermal product to meet market demand.
During the second half of the year, Maules Creek reached pit bottom in the first of three planned locations. Access to
pit bottom has created in-pit dump space that has delivered shorter overburden haulage distances and elevations than
have been experienced in the last two years. In-pit dumping is expected to increase to 100% of overburden material in
FY23. The transition to 100% in-pit dumping is expected to improve operational productivity and decrease unit costs.
24 x 7 operation of the first overburden autonomous haulage system (AHS) fleet commenced during the June quarter.
The second AHS fleet is scheduled to be commissioned in Q3 FY21 with the remaining three fleets scheduled to
commence at six month intervals over the following 18 months.
Narrabri
Ownership: Whitehaven 77.5% and Operator; J-Power 7.5%; Upper Horn Investments Limited 7.5%;
Daewoo International Corporation and Korea Resources Corporation 7.5%
Narrabri production decreased by 5% to 6.1Mt (FY19: 6.4Mt). The decrease in production was a result of an additional
two weeks taken to upgrade the longwall’s 398 leg cylinders that took place during the longwall relocation in the
second quarter and a weighting event in March that caused a deferral of 500–600kt of longwall coal production.
Following these two events, the Narrabri operation has delivered strong production performance. In April Narrabri
recorded 1.0Mt ROM production – the second time in its history that it has recorded one million tonnes in a month.
Saleable coal production increased by 16% to 6.5Mt (FY19: 5.6Mt), reflecting improved mine yields, with annual yield
increasing from 94% in FY19 to 99% in FY20. The improved yield partly reflects operational improvements at the CHPP.
The next longwall move from panel 109 to 110 is scheduled for the end of Q3 FY21.
Directors’ Report
For the year ended 30 June 2020
Ownership: Werris Creek Whitehaven 100%; Rocglen Whitehaven 100%; Tarrawonga Whitehaven 100%;
Sunnyside Whitehaven 100%
Note: Tonnages in the above table include the discontinued Sunnyside and Rocglen mines that have both transitioned into rehabilitation.
Gunnedah open cut mines production decreased by 24% to 3.9Mt (FY19: 5.1Mt). The decrease is primarily due to
production ceasing at Rocglen. For the continuing operations, Werris Creek and Tarrawonga, the full year production
was slightly down on FY19 due to the impact at Werris Creek of more extensive former underground workings than
anticipated and the heavy rains in the March quarter.
The reduction in saleable coal production and sales in FY20 reflects the ROM coal production decrease and the
weighting of ROM coal production to the final months of the year. The increase in production in recent months
is a result of the full utilisation of the new fleet at Tarrawonga during the June quarter.
Rocglen and Sunnyside rehabilitation is progressing well, with major earth moving activities at Sunnyside scheduled
to be finalised in H1 FY21 and at Rocglen in H1 FY22.
Development projects
Directors’ Report
For the year ended 30 June 2020
Directors’ Report
For the year ended 30 June 2020
Environment and safety risks and licence to operate Climate change risk
A range of health, safety and environmental risks exist The physical and non-physical impacts of climate change
with coal mining activities. Accidents, environmental may affect the Company’s assets, production and the
incidents and real or perceived threats to the coal markets where its high quality coal products are
environment or the amenity of local communities sold. These impacts may include severity and frequency
could result in a loss of the Company’s social licence to of weather patterns, policy and regulatory change and
operate leading to delays, disruption or the shut-down coal demand responses. Further details in relation to
of operations. Potential environment and safety risks climate change risks will be provided in the Company’s
include equipment failure, human errors in underground 2020 Sustainability Report to be released later this year.
operations, vehicle and mining equipment interactions
The International Energy Agency (IEA) has forecast
in open cut operations, roof fall hazards in underground
under its Stated Policies Scenario (its central scenario,
operations and spontaneous combustion risks.
which assumes that all of the Nationally Determined
The Company engages with a number of different Commitments (NDCs) as provided by countries
stakeholders in the communities within which it operates. after the 2015 Paris COP21 meeting are met in full)
Stakeholder related risks include: that global coal demand will remain stable until at
least 2040 – with relatively stronger demand in the
– the requirement to comply with the Native Title
broad Asian region, Whitehaven’s key export market.
Act 1993 (Cth) which can delay the grant of mining
The IEA regularly makes projections about world
tenements and impact the timing of exploration,
coal demand based on various future scenarios for
development and production operations;
energy development. The Stated Policies Scenario
– the ability to reach agreement with local landholders is the IEA’s central scenario in its most recent World
in relation to acquisition and/or access terms which Energy Outlook (2019). Alternate scenarios include the
may delay the timing of project development; and Current Policies Scenario (highest projected coal usage)
– notwithstanding the contributions made to the and the Sustainable Development Scenario (lowest
communities within which the Company operates, projected coal usage). Further details are available at:
local communities may become dissatisfied with the https://webstore.iea.org/world-energy-outlook.
impact of operations or oppose new development
projects. There is also the possibility of anti-coal COVID-19 risk
activism targeted towards the Company’s projects.
As with most businesses around the world the COVID-19
Whitehaven has a comprehensive environmental, pandemic has presented a range of health, commercial
health and safety management system to mitigate and financial risks to Whitehaven. This includes risk to
the risk of incidents and to ensure compliance with continuity of operations, and potential disruptions to
environmental and safety laws. The Company also the movement of goods and people. Since before the
has a dedicated community relations team that engage pandemic emerged in Australia, we have been carefully
with local communities to ensure that community planning to ensure continuity of supply of inputs, and
issues are understood and addressed appropriately. have taken a range of steps – including direct advocacy
to key government and other stakeholders – to ensure
Further details in relation to how the Company engages
our workforce is ready to respond to the pandemic and is
effectively with the communities in which we operate
not adversely impacted by domestic border restrictions,
and steps which the Company takes to maintain its social
limiting the operational impacts we have experienced.
licence to operate will be provided in the Company’s
Whitehaven, and the resources sector more broadly,
2020 Sustainability Report to be released later this year.
has so far demonstrated its resilience in the face of
COVID-19. It has been widely acknowledged that the
Environmental regulation comprehensive suite of measures adopted across the
The coal sector is subject to a broad range resources sector quickly became the model for others to
of environmental laws, regulations and standards emulate. The development and rapid implementation of
including in relation to greenhouse gas emissions. our response plan kept our people safe and supported
Evolving regulation and standards could result continuity of production and employment. More broadly
in increased costs, regulatory action, litigation or, the experience of responding to COVID-19 has validated
in extreme cases, threaten the viability of an operation. the robustness of our WHS systems and procedures
and ensured our preparedness to manage any future
Whitehaven actively monitors legislative and emerging risks of this nature.
regulatory developments and engages appropriately
with legislative and regulatory bodies to manage this risk.
The exceptional circumstances stemming from the in developing Southeast Asian nations. In contrast,
pandemic have resulted in uncertainty surrounding lower-energy and/or higher-impurity coal basins globally
public health and the global economy, including impacts have traditionally been the first to exit the seaborne coal
on energy and industrial markets. Short-term demand market during times of declining demand, and this has
for both metallurgical and thermal coal has contracted been borne out during the first half of CY20. We expect
as a result of measures employed in many countries our customer nations to capitalise on their installed and
to slow the spread of the virus. Despite uncertainties planned coal-fired power generation to underpin their
surrounding the economic outlook, the fundamentals economic recoveries when the threat of the pandemic
of our business model remain robust. Throughout the is either eliminated or can be sustainably managed.
pandemic, our portfolio of coal products have remained Whitehaven actively monitors and responds to all
sought after and well sold under long term contracts to factors with potential to impact global supply and
the cornerstone high-energy, low-impurity coal markets demand for our products.
of Japan, Korea and Taiwan, as well as emerging markets
Consolidated Consolidated
2020 2019
In AUD $ $
Non-audit services
62,994 194,790
As lead auditor for the audit of the financial report of Whitehaven Coal Limited for the financial year
ended 30 June 2020, I declare to the best of my knowledge and belief, there have been:
This declaration is in respect of Whitehaven Coal Limited and the entities it controlled during the
financial year.
Ryan Fisk
Partner
26 August 2020
21
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Summary
We present the Remuneration Report for the financial reduced STI outcomes for Executive KMP. STI awards
year ended 30 June 2020 (FY20) for which we seek for performance during the year were assessed at
your support at our Annual General Meeting (AGM) 28% of the possible award.
in October. More than 98% of votes cast at last year’s
In relation to LTI awards, the 2017 LTI Costs Hurdle
AGM were in favour of the resolution to approve
Award that was tested following the end of FY20 failed
our 2019 Remuneration Report.
to achieve the gateway and lapsed in full. Tranche 1 of
Our objective is to provide a Remuneration Report the 2017 LTI Relative TSR award also failed to satisfy the
containing the key elements that are important to relevant performance condition and therefore lapsed in
our shareholders and to present that information in a full while Tranche 2 of the 2016 LTI Relative TSR award
way that is clear and readily understood. This includes vested at 64.2%.
details of realised remuneration outcomes for our
Further details of the LTI awards that were tested
Key Management Personnel (KMP) for FY20 and
in 2020 are set out later in this report at section 4.2.
performance against the Short Term Incentive (STI)
Key Performance Indicators (KPIs) and Long Term
Incentive (LTI) performance conditions. Changes to remuneration framework for FY21
Our executive remuneration framework is designed The Board continues to consider Executive KMP
to be aligned to shareholder interests while operating remuneration in the context of our strategy, relevant
to incentivise and reward senior executives to execute benchmarks, and retaining and appropriately rewarding
our strategy to build a portfolio of assets that is our leadership team.
cost-competitive, and to develop and operate that There will be no changes to fixed remuneration for
portfolio of assets in a safe and sustainable way. Executive KMP in FY21 with one exception (detailed later).
Table of Remuneration
Report contents
1. Introduction 4. Remuneration outcomes for FY20
1.1 Key management personnel for FY20 4.1 STI outcomes for Executive KMP in FY20
1.2 Summary of Company performance 4.2 LTI outcomes for Executive KMP in FY20
1.3 How do remuneration outcomes align
to FY20 performance? 5. Executive KMP employment contracts
1.4 Executive KMP realised remuneration outcomes
6. Non-Executive Director remuneration
2. Remuneration Governance 6.1 Setting Non-Executive Director fees
6.2 Current Non-Executive Director
3. Remuneration framework fee remuneration
3.1 Summary of Executive KMP remuneration 6.3 FY20 Non-Executive Director remuneration
components in FY20
3.2 Fixed remuneration 7. Executive KMP statutory tables and additional
disclosures
3.3 STI awards and structure for FY20
7.1 Executive KMP statutory remuneration table
3.4 LTI awards and structure for FY20
7.2 Movements in options and rights held by
3.5 Policies and conditions of rights awarded
Executive KMP
under equity plans
7.3 Movements in ordinary shares held by KMP
7.4 Related party transactions and additional
disclosures
1. Introduction
This Remuneration Report forms part of the Directors’ Report.
In accordance with Section 308 (3C) of the Corporations Act 2001 (Cth) (Corporations Act), the external auditors,
Ernst & Young, have audited this Remuneration Report.
This report details the remuneration and fees during FY20 of the Key Management Personnel (KMP) of the Company,
who are listed in the table below. For the remainder of this Remuneration Report, the KMP are referred to as either
Executive KMP or Non-Executive Directors.
Non-Executive Directors
The Hon. Mark Vaile AO Chairman and Chairman of Governance & Nomination Committee
Non-Executive Director
Member of Audit & Risk Management Committee
Dr Julie Beeby Non-Executive Director Chairman of Health, Safety, Environment & Community Committee
Fiona Robertson Non-Executive Director Chairman of Audit & Risk Management Committee
Lindsay Ward Non-Executive Director Member of Health, Safety, Environment & Community Committee
Paul Flynn Managing Director and Chief Executive Officer (CEO) Full year
Ian Humphris Executive General Manager (EGM) – Operations From 6 April 2020
Scott Knights Executive General Manager (EGM) – Marketing and Logistics Full year
Leigh Martin Executive General Manager (EGM) – People and Culture From 13 January 2020
Mark Stevens Executive General Manager (EGM) – Project Delivery From 28 January 2020
Brian Cole Executive General Manager (EGM) – Project Delivery Until 31 December 2019
1. Introduction (cont.)
1.2 Summary of Company performance
FY20 at a glance
Share price at year end (dollars per share) $1.43 $3.66 $5.78 $2.87 $1.082
Basic EPS (cents per share) 3.0 53.5 53.1 41.2 2.1
Diluted EPS (cents per share) 3.0 52.4 52.1 40.7 2.1
Total Reportable Injury Frequency Rate (TRIFR) 4.1 6.2 6.9 7.4 10.6
Environmental Enforcement Action Frequency Rate (EEAFR)3 3.9 1.9 2.1 4.2 8.1
1 Statutory EBITDA and net profit after tax for FY18 has been restated for the adoption of AASB 16 Leases. Statutory EBITDA and net profit after tax for
FY17–FY16 has not been restated for the adoption of AASB 16 Leases.
2 The opening share price for 2016 was $1.32.
3 An Environmental Enforcement Action is defined as a warning letter, an official caution, an order, a penalty or a prosecution. Where a single piece of enforcement
correspondence notes a breach of more than one approval or licence condition, each breach is counted separately.
Fixed Total fixed remuneration There will be no changes in TFR for Executive KMP in FY21 with one exception;
Remuneration set with reference to market the Executive General Manager – Corporate, Government and Community Affairs.
(TFR) benchmarking and individual
performance
STI Reflects the performance Performance outcomes did not meet all of the objectives set and therefore
of management during the the below target STI outcomes reflect this. While safety performance has improved,
performance period, relative the ROM production, free on board (FOB) costs per tonne, net profit after tax and
to performance conditions environmental objectives were not met. Consequently no awards were made for
set at the start of FY20 these performance areas.
The Executive KMP STI outcome was 28% of the maximum possible STI.
LTI Reflects long-term overall The LTI awards granted under the 2016 (TSR Tranche 2) and 2017 (TSR Tranche 1 and
Company performance Costs Hurdle Award) LTI plans reached the end of their respective performance periods
and the delivery of value and were tested after 30 June 2020.
to shareholders over the
performance period Due to the TSR performance of 66% over the four year performance period the LTI awards
granted under the 2016 (TSR Tranche 2) LTI plan vested at 64%. The LTI awards granted
under the 2017 (TSR Tranche 1) LTI plan failed to satisfy the performance condition and
therefore lapsed in full.
The Costs Hurdle Gateway and the Costs Hurdle Target were set in 2017. Actual costs
for FY20 of $75/t exceeded the Costs Hurdle Gateway and the 2017 Costs Hurdle Award
lapsed in full.
See section 4.2 for more details on the LTI outcomes for FY20.
1. Introduction (cont.)
1.4 Executive KMP realised remuneration outcomes (cont.)
LTI4 Vested Total
FY20 vested LTI 6 including
deferred at face share share
STI2 Total equity value of Total price price
Name FY TFR1 cash Severance cash STI3 award Other5 remuneration growth growth
Paul 2020 1,530,000 267,750 – 1,797,750 267,750 217,079 12,900 2,295,479 59,541 2,355,020
Flynn
2019 1,500,000 603,750 – 2,103,750 603,750 948,092 12,500 3,668,092 2,585,637 6,253,729
Kevin 2020 714,000 87,465 – 801,465 87,465 78,581 – 967,511 21,554 989,065
Ball
2019 700,000 181,913 – 881,913 181,913 343,201 – 1,407,027 935,979 2,343,006
Timothy 2020 612,000 74,970 – 686,970 74,970 66,794 12,900 841,634 18,320 859,954
Burt
2019 600,000 169,050 – 769,050 169,050 291,721 12,500 1,242,321 795,583 2,037,904
Scott 2020 637,500 78,094 – 715,594 78,094 67,410 – 861,098 18,489 879,587
Knights
2019 625,000 176,094 – 801,094 176,094 287,162 – 1,264,350 788,699 2,053,049
Jamie 2020 448,087 – 935,000 1,383,087 – 110,619 6,450 1,500,156 30,341 1,530,497
Frankcombe7
2019 1,000,000 297,000 – 1,297,000 297,000 574,324 12,500 2,180,824 1,566,298 3,747,122
Note: for role held by Executive KMP during FY20 refer to section 1.1.
1 Total fixed remuneration (TFR) comprises base salary and superannuation.
2 STI represents the amount of cash STI that each Executive KMP will be paid in September 2020 based on FY20 performance. Refer to section 3.3 and
section 4.1 for further details.
3 Deferred equity STI refers to the amount of STI deferred into rights that are subject to further service conditions. While not yet granted, the STI is expected to be
issued at a volume weighted average price (VWAP) of $1.53. It is expected that rights issued under the STI will vest and become exercisable in two equal tranches
following the completion of FY21 and FY22. Refer to section 3.3 for further details.
4 LTI represents LTI awards made in 2016 and 2017 for which the test period ended in FY20 and which have vested. The amounts shown are the face value of the
awards at grant. Refer to section 4.2 for further details.
5 Other includes parking, motor vehicle benefits and other similar items.
6 LTI share price growth is the amount of the LTI award delivered by an increase between the face value VWAP used for the award that was granted and the
VWAP of a share at the award test date for those awards which vested. LTI outcomes are explained further in section 4.2 of this report.
7 Jamie Frankcombe and Brian Cole ceased to be members of the Executive KMP as of 11 December 2019 and 31 December 2019, respectively.
8 Ian Humphris, Leigh Martin and Mark Stevens were appointed as members of the Executive KMP on 6 April 2020, 13 January 2020 and 28 January 2020,
respectively.
2. Remuneration Governance
This section describes the roles and responsibilities of the Board, Remuneration Committee and external remuneration
advisors when making remuneration decisions. It also provides an overview of the principles and policies that underpin
the Company’s remuneration framework.
External advice
From time to time, the Remuneration Committee seeks and considers advice from
external advisors who are engaged by and report directly to the Remuneration
Committee. Such advice will typically cover Non-Executive Director fees, Executive
KMP remuneration and advice in relation to equity plans.
3. Remuneration framework
The Company’s Executive KMP remuneration framework is based on a set of core principles and comprises both
fixed and at-risk remuneration components. This section details the components of Executive KMP remuneration
framework for FY20.
Attract and retain Structures are equitable Incentives are challenging Incentives are aligned with
skilled executives and reinforce relevant and linked to the the long-term interests of the
Company policies creation of sustainable Company and its shareholders
shareholder returns
Fixed remuneration (TFR) At-risk STI At-risk LTI
Cash Equity
– includes salary – 50% of STI is delivered – 50% of STI is deferred – provides the Remuneration
and superannuation as cash into rights to receive shares Committee with the flexibility
in the Company subject to to determine the nature,
meeting service based vesting terms and conditions of
conditions (with vesting the grant each year
periods of 12 and 24 months)
– reviewed annually – determined based on a mix – ability of the Remuneration – operated in FY20 as an award
by the Remuneration of financial and non-financial Committee to reduce the of 100% performance rights
Committee performance conditions number of deferred equity
instruments that vest if
subsequent events show
such a reduction to be
appropriate (clawback)
– benchmarked against – STI opportunity is set – the face value of the LTI
peer companies between 70% and 100% of opportunity is currently
TFR for target performance set between 80% and 120%
and between 87.5% and of TFR
125% of TFR for stretch
performance
Fixed TFR
31% 28%
The diagram below shows the timing for determining and delivering Executive KMP remuneration for FY20:
Total Fixed
remuneration
Determined based on:
– Market benchmarking
– FY19 performance
Feature Description
Performance period 12 month performance period from 1 July 2019 to 30 June 2020
Form of delivery, The STI for FY20 is delivered 50% in cash in September 2020 and 50% in deferred rights that are granted in
vesting and exercise or around October 2020, which on exercise entitle the recipient to receive one ordinary share in the Company for
each deferred right that vests. Half of the deferred rights vest and become exercisable following completion of FY21,
while the other half will vest and become exercisable following the completion of FY22, subject to meeting service
conditions. Vested deferred rights that have not been exercised by August 2030 will automatically be exercised.
No amount is payable on vesting or exercise of deferred rights.
Performance Whitehaven has chosen performance conditions that link to our strategy and motivate outperformance of annual
conditions and business plans. The Board sets target KPIs at the commencement of FY20.
KPI weighting
The table below summarises the KPIs that were adopted as performance conditions in FY20, and the applicable
weighting of each performance condition.
Feature Description
Form of delivery, LTI Awards granted in FY20 were provided in the form of performance rights, being rights to receive one
vesting and exercise ordinary share in the Company for each performance right that vests on meeting the relevant performance
conditions. Vested deferred rights that have not been exercised by October 2029 will automatically be exercised.
No amount is payable on vesting or exercising of deferred rights.
Performance period TSR Awards (50%): divided into two equal tranches capable of vesting and becoming exercisable after a three
and four year performance period, with each of the respective performance periods, beginning on 1 July 2019.
Costs Hurdle Awards (50%): FOB cost per tonne achieved for the year ended 30 June 2022 with the Costs Hurdle
Awards being tested at that time. Half the awards will be capable of vesting and becoming exercisable after the end
of the performance period. The remaining half of any awards that vest will be subject to deferral for a further year
before becoming exercisable.
Performance
conditions Component Details Reason the performance condition was chosen
TSR Award 50% of the award is subject to a relative This measure allows for an objective external
total shareholder return (TSR) performance assessment of the shareholder value created by
hurdle (TSR Hurdle) which compares the TSR the Company relative to a group of peers over
performance of the Company with the TSR a sustained period.
performance of a peer group of companies
operating in the Australian resources sector.
Costs Hurdle 50% of the award is subject to the Company This measure is aligned to the Company’s
Award achieving a cost per tonne target (Costs objective to be positioned competitively against
Hurdle Target) that will position the Company Australian coal producers in relation to costs
competitively on the then current cost curve. of production when measured on the then
The Board sets the Costs Hurdle Target as the current coal industry cost curve. Competitive
entry point to the first quartile in the published costs protect and preserve shareholder value
Wood Mackenzie data of Australia coal industry in difficult times and support enhanced returns
outcomes. A Costs Hurdle Gateway also applies when the commodity cycle recovers.
to ensure that a base level of cost control
is achieved before any of the Costs Hurdle
Award is capable of vesting.
Calculation The value of LTI awards and the number of performance rights granted is calculated as follows:
of LTI award
Target Value of VWAP of Number of performance
TFR X Opportunity = LTI Award ÷ performance right
= rights granted
TSR Awards: the TSR of the Company for the FY20 LTI grant is measured as a percentile ranking compared to
the comparator group of listed entities in the resources sector over the relevant performance period of the tranche.
The TSR comparator group was established before the commencement date of the respective performance period
and comprised the following companies:
Costs Hurdle Awards: testing will occur following the completion of FY22 based on the average costs achieved
on a Company-wide basis over the 12 month period from 1 July 2021 to 30 June 2022.
Between 50th and 75th percentile Vesting will occur on a pro rata straight line basis
between 50% and 100%
The Board has set the Costs Hurdle Target as the entry point to the first quartile in the published Wood Mackenzie
data of industry outcomes. As evidenced during the past two years, the Board will ensure that the Company
does not overlook shareholder value enhancing opportunities even if these opportunities are higher-cost mining
operations. Notwithstanding the vesting schedule below, the Board retains discretion to lapse any or all of the
Costs Hurdle Awards if the Board considers that vesting would be inappropriate in light of the intent and purpose of
the target. Full vesting will only occur if the Board is satisfied performance meets or exceeds the Costs Hurdle Target
as set out below. The Costs Hurdle Awards will lapse in full if the Costs Hurdle Gateway is not achieved. The Board
may, where it is appropriate to do so, recalibrate the Gateway and Target to take account of structural changes in
the Company’s asset portfolio (such as mergers, acquisitions and divestments) or other exceptional circumstances.
Between Gateway and Target Vesting will occur on a pro rata straight line basis
between 50% and 100%
Retesting Any component of the LTI award that does not vest following testing will lapse immediately. There is no re-testing
of awards that do not vest.
Brian Cole – – – – –
Jamie Frankcombe – – – – –
Paul 89,702 Lapsed Lapsed 3,171 292,444 Lapsed Lapsed 276,620 217,079 59,541
Flynn
Kevin 32,472 Lapsed Lapsed 1,148 105,862 Lapsed Lapsed 100,135 78,581 21,554
Ball
Timothy 27,601 Lapsed Lapsed 976 89,983 Lapsed Lapsed 85,114 66,794 18,320
Burt
Scott 27,855 Lapsed Lapsed 985 90,813 Lapsed Lapsed 85,899 67,410 18,489
Knights
Brian 31,411 Lapsed Lapsed 1,110 102,405 Lapsed Lapsed 96,865 76,015 20,850
Cole 4
Jamie 45,710 Lapsed Lapsed 1,616 149,023 Lapsed Lapsed 140,960 110,619 30,341
Frankcombe 4
1 Refer to the Notice of 2017 Annual General Meeting, Resolution 6. This adjustment applies to rights issued before the ‘ex’ date for the capital return to shareholders
in November 2017 to ensure that incentive plan participants were not disadvantaged by the capital return.
2 As presented in section 1.4.
3 Ian Humphris, Leigh Martin and Mark Stevens were appointed as members of the Executive KMP on 6 April 2020, 13 January 2020 and 28 January 2020,
respectively.
4 Jamie Frankcombe and Brian Cole ceased as members of the executive KMP on 11 December 2019 and 31 December 2019 respectively. The Board considered
Jamie Frankcombe and Brian Cole to be ‘good leavers’ and therefore have retained components of their unvested incentives, subject to any applicable
performance conditions that are required to be met under the terms of the grant.
($) ($)
Ian Humphris 4
– – –
Fixed remuneration Mr Flynn’s annual TFR for FY21 remains unchanged at $1,530,000 (FY20: $1,530,000). It includes salary,
superannuation contributions and any components under Whitehaven’s salary packaging guidelines and all
Director fees. TFR is reviewed annually.
Short term incentive Mr Flynn is eligible to participate in the annual STI plan, as described in section 3.3. At target performance, his
FY21 STI opportunity is 100% of TFR (FY20: 100%), with up to 125% of TFR for stretch performance (FY20: 125%).
Long term incentive Mr Flynn is eligible to participate in the LTI plan as described in section 3.4, subject to receiving required
shareholder approval. Mr Flynn’s LTI grant in FY21 will be 120% of his TFR (FY20: 120%). The award will be
provided 100% as rights to acquire shares: each right held will entitle Mr Flynn to receive one ordinary share
in the Company subject to satisfaction of the relevant performance conditions. The FY19 award was provided
in the form of 100% rights.
Other key terms Other key terms of Mr Flynn’s service agreement include the following:
– His employment is ongoing, subject to twelve months’ notice of termination by Whitehaven or six months’
notice of termination by Mr Flynn.
– The Company may terminate without notice in certain circumstances, including serious misconduct or
negligence in the performance of duties. Mr Flynn may terminate immediately in the case of fundamental
change to his role (that is, there is a substantial diminution in his responsibilities), in which case his entitlements
will be the same as if the Company terminated him without cause.
– The consequences for unvested incentive awards on termination of Mr Flynn’s employment will be in
accordance with the Company’s STI and LTI plans.
– Mr Flynn will have post-employment restraints for a period of three months. No additional amounts will be
payable in respect of this restraint period.
Board $375,000 1
$262,500 1
$140,000
1 The Chairman and Deputy Chairman of the Board do not receive committee member fees in addition to their Board fees.
The fees set out above exclude mandatory statutory superannuation contributions made on behalf of the
Non-Executive Directors.
In addition to the meetings that the Non-Executive Directors attended (as shown on page 23), the Non-Executive
Directors participated in visits to mine sites and in the Company’s annual Safehaven conference. While the
Board had scheduled additional visits to mine sites as well as participation in the Company’s annual safety day,
COVID-19 restrictions resulted in these scheduled visits being cancelled.
Short-term Post-employment
benefits benefits
Non-Executive Board & Non-monetary Other benefits Superannuation Total fees for services as
Directors FY Committee fees benefits (non-cash) benefits a Non-Executive Director
Lindsay Ward 2
2020 180,000 – – 17,100 197,100
Raymond Zage 3
2020 140,000 – – – 140,000
Executive Directors
Paul Flynn 2020 1,505,000 12,900 765,964 25,000 – 649,185 2,958,049 48%
Timothy Burt 2020 587,000 12,900 212,813 25,000 – 184,836 1,022,549 39%
Brian Cole2 2020 332,500 14,917 118,970 14,583 – 179,840 660,810 45%
Jamie 2020 444,735 6,450 197,399 12,500 935,000 211,881 1,807,965 23%
Frankcombe2
2019 975,000 12,500 623,628 25,000 – 79,389 1,715,517 41%
2019 – – – – – – – –
2019 – – – – – – – –
2019 – – – – – – – –
1 Ian Humphris, Leigh Martin and Mark Stevens were appointed as members of the Executive KMP effective 6 April 2020, 13 January 2020 and
28 January 2020, respectively.
2 Jamie Frankcombe and Brian Cole ceased as members of the Executive KMP effective 11 December 2019 and 31 December 2019, respectively.
(A) The amounts disclosed as non-monetary benefits relate to car spaces, motor vehicle benefits and other similar items.
(B) Comprises the cash component of current year STI (refer to sections 3.3 and 4.1 for details) and the fair value at each grant date of STI deferred rights expensed
over the relevant period for the service vesting conditions. The fair value for STI grants is based on the volume weighted average price of Whitehaven shares over
the 20 trading day period commencing 10 trading days prior to 30 June of each respective grant.
(C) The fair value for LTI performance rights granted to KMP is based on the fair value at each grant date expensed over the vesting period. The FY20 amount
includes the reversal of AASB 2 share-based payments expense due to lapse outcomes of costs hurdle LTI rights and options. The factors and assumptions
used in determining the fair value are set out in note 5.5 to the financial statements.
Balance Balance
as at Vested as at Vested and
1 July during Lapsed 30 June exercisable
Executive 2019 Granted Granted the year Exercised Exercised Lapsed (year of Forfeited 2020 at 30 June
KMP Instrument (number) (number) (value) (number) (number) (value) (number) grant) (number) (number) 2020
Paul Performance
1,584,805 497,561 1,362,073 612,562 472,838 474,893 279,446 2016 – 1,330,082 139,724
Flynn Rights (LTI)
Deferred
479,019 163,618 603,750 191,655 – – – – – 642,637 423,143
Rights (STI)
Kevin Performance
557,619 154,797 423,757 221,742 221,742 171,907 101,157 2016 – 389,517 –
Ball Rights (LTI)
Deferred
163,176 49,299 181,913 60,688 145,478 396,501 – – – 66,997 –
Rights (STI)
Timothy Performance
474,677 132,683 363,220 188,481 188,481 146,121 85,983 2016 – 332,896 –
Burt Rights (LTI)
Deferred
137,790 45,814 169,050 50,402 122,746 332,046 – – – 60,858 –
Rights (STI)
Ian
N/A – – – – – – – – – – –
Humphris1
Scott Performance
476,168 138,212 378,355 184,599 141,210 145,662 86,777 2016 – 386,393 43,389
Knights Rights (LTI)
Deferred
138,469 47,722 176,094 52,076 – – – – – 186,191 123,286
Rights (STI)
Michael Performance
52,632 91,057 249,269 – – – – – – 143,689 –
van Maanen Rights (LTI)
Deferred
– 31,020 114,461 – – – – – – 31,020 –
Rights (STI)
Leigh Performance
– 42,798 117,160 – – – – – – 42,798 –
Martin1 Rights (LTI)
Mark Performance
– 45,908 125,673 – – – – – – 45,908 –
Stevens1 Rights (LTI)
Brian Performance
604,449 74,797 204,757 245,026 245,026 189,959 111,779 2016 142,050 180,391 –
Cole2 Rights (LTI)
Options (LTI) 1,043,373 – – 182,209 182,209 287,890 364,416 2016 91,313 405,435 –
Deferred
175,962 47,204 174,182 65,914 – – – – – 223,166 156,390
Rights (STI)
Jamie Performance
944,168 – – 371,290 371,290 288,182 169,280 2016 151,287 252,311 –
Frankcombe2 Rights (LTI)
Options (LTI) 1,580,107 – – 275,941 275,941 435,987 551,880 2016 167,796 584,490 –
Deferred
268,887 80,488 297,000 102,081 238,800 660,181 – – – 110,575 –
Rights (STI)
1 Ian Humphris, Leigh Martin and Mark Stevens were appointed as members of the Executive KMP on 6 April 2020, 13 January 2020 and 28 January 2020,
respectively.
2 Jamie Frankcombe and Brian Cole ceased to be members of the Executive KMP as of 11 December 2019 and 31 December 2019, respectively.
Non-Executive Directors
Executive KMP
Financial
Report.
For the year ended 30 June 2020
FY20 IN REVIEW | INTRODUCTIONS | ABOUT US | RESOURCES & RESERVES | DIRECTORS’ REPORT | FINANCIAL REPORT | GLOSSARY | CORPORATE DIRECTORY
Table of Contents
Consolidated financial statements
Consolidated statement
of comprehensive income
For the year ended 30 June 2020
2020 2019
Other comprehensive income for the period, net of tax 5.2 7,202 (3,001)
Total comprehensive income for the period, net of tax 37,238 524,897
Non-controlling interests – –
Non-controlling interests – –
Basic earnings per share (cents per share) 2.4 3.0 53.5
Diluted earnings per share (cents per share) 2.4 3.0 52.4
The consolidated statement of comprehensive income is to be read in conjunction with the notes to the consolidated
financial statements.
Consolidated statement
of financial position
As at 30 June 2020
2020 2019
Assets
Investments 5.3(d) 37 37
Liabilities
Non-current liabilities
Equity
The consolidated statement of financial position is to be read in conjunction with the notes to the consolidated
financial statements.
Consolidated statement
of changes in equity
For the year ended 30 June 2020
Share-
based
Issued payment Hedge Retained Total
capital reserve reserve earnings equity
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated
financial statements.
Consolidated statement
of cash flows
For the year ended 30 June 2020
2020 2019
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated
financial statements.
Assets, liabilities, income and expenses of a 1.5 New standards, interpretations and
subsidiary acquired or disposed of during the year amendments adopted by the Group
are included in the consolidated financial statements
from the date the Group gains control until the (i) Changes in accounting policy and disclosures
date the Group ceases to control the subsidiary.
The accounting policies adopted in the preparation
(ii) Foreign currency translation of the consolidated financial statements are
consistent with those of the previous financial year.
Transactions in foreign currencies are initially
recorded in the functional currency by applying Several amendments apply for the first time in the
the exchange rates ruling at the date of the current year. However, they do not impact the annual
transaction. Monetary assets and liabilities consolidated financial statements of the Group.
denominated in foreign currencies are retranslated As disclosed in the 2019 Annual Financial Report,
at the rate of exchange ruling at the balance the Group adopted AASB 16 Leases, AASB 15
date. Foreign exchange differences arising on Revenue from Contracts with Customers and
translation are recognised in the consolidated AASB 9 Financial Instruments in the financial year
statement of comprehensive income. ended 30 June 2019, effective from 1 July 2018.
Both the functional and presentation currency
of the Company and all entities in the Group (ii) Accounting standards and interpretations issued
is Australian dollars ($). but not yet effective
Australian Accounting Standards and Interpretations
(iii) Goods and services tax that have recently been issued or amended but are
Revenues, expenses and assets (excluding not yet effective and have not been adopted by
receivables) are recognised net of the amount of the Group for the annual reporting period ended
goods and services tax (GST), except where the 30 June 2020 are outlined below:
amount of GST incurred is not recoverable from
the taxation authority. In these circumstances, Amendments to AASB 3: Definition of a Business
the GST is recognised as part of the cost of In October 2018, the IASB issued amendments
acquisition of the asset or as part of the expense. to the definition of a business in AASB 3 Business
Combinations to help entities determine whether
Receivables and payables are stated with the amount
an acquired set of activities and assets is a business
of GST included. The net amount of GST recoverable
or not. They clarify the minimum requirements for a
from, or payable to, the ATO is included as a current
business, remove the assessment of whether market
asset or liability in the consolidated statement of
participants are capable of replacing any missing
financial position.
elements, add guidance to help entities assess
Cash flows are included in the consolidated whether an acquired process is substantive, narrow
statement of cash flows on a gross basis and the the definitions of a business and of outputs, and
GST components of cash flows arising from investing introduce an optional fair value concentration test.
and financing activities, which are recoverable from The amendment to AASB 3 is effective for reporting
or payable to the ATO, are classified as operating periods beginning on or after 1 January 2020. Since
cash flows. amendments apply prospectively to transactions or
other events that occur on or after the date of first
(iv) Notes to the consolidated financial statements application, the Group will not be affected by these
amendments on the date of transition.
The notes to these consolidated financial statements
have been organised into logical groupings to
present more meaningful and dynamic information
to users. To the extent possible, the relevant
accounting policies and numbers have been
provided in the same note. The Group has also
reviewed the notes for materiality and relevance,
and provided additional information where
considered material and relevant to the operations,
financial position or performance of the Group.
(ii) Accounting standards and interpretations issued but not yet effective (cont.)
Amendments to IAS 1 and IAS 8: Definition Amendments to IAS 37: Onerous Contracts –
of Material Costs of Fulfilling a Contract
In October 2018, the IASB issued amendments In May 2020, the IASB issued amendments to IAS
to IAS 1 Presentation of Financial Statements and 37 Provisions, Contingent Liabilities and Contingent
IAS 8 Accounting Policies, Changes in Accounting Assets to specify which costs an entity needs
estimates and Errors to align the definition of to include when assessing whether a contract is
‘material’ across the standards and to clarify certain onerous or loss-making.
aspects of the definition. The new definition states
that ‘Information is material if omitting, misstating The amendments apply a ‘directly related cost
or obscuring it could reasonably be expected to approach’. The costs that relate directly to a
influence decisions that the primary users of general contract to provide goods or services include both
purpose financial statements make on the basis of incremental costs (e.g., the costs of direct labour
those financial statements, which provide specific and materials) and an allocation of costs directly
information about a specific reporting entity.’ related to contract activities (e.g., depreciation of
equipment used to fulfil the contract as well as costs
These amendments are effective for reporting of contract management and supervision). General
periods beginning on or after 1 January 2020. and administrative costs do not relate directly to a
The amendments to the definition of material contract and are excluded unless they are explicitly
is not expected to have a significant impact on chargeable to the counterparty under the contract.
the Group’s consolidated financial statements.
These amendments are effective for annual periods
beginning on or after 1 January 2022. They are not
Amendments to IFRS 3: Reference to
expected to have a significant impact on the Group’s
Conceptual Framework
consolidated financial statements.
In May 2020, the IASB issued Amendments
to IFRS 3 Business Combinations – Reference to Amendments to IAS 1: Classification of Liabilities
the Conceptual Framework. The amendments are as Current or Non-current
intended to replace a reference to a previous version
of the IASB’s Conceptual Framework (the 1989 In January 2020, the IASB issued amendments
Framework) with a reference to the current version to paragraphs 69 to 76 of IAS 1 Presentation of
issued in March 2018 (the Conceptual Framework) Financial Statements to specify the requirements
without significantly changing its requirements. for classifying liabilities as current or non-current.
2. Group performance
2.1 Segment reporting
Revenue
Total revenue from contracts with customers 1,040,781 475,820 205,008 1,721,609
Result
Capital expenditure
Revenue
Total revenue from contracts with customers 1,696,424 567,994 223,526 2,487,944
Result
Significant items before income tax and depreciation (see note 2.2) (40,456)
Capital expenditure
2020 2019
Revenue by
geographic location $’000 $’000
2020
Major customers
The Group has three major customers, which account for 28.1% (2019: 29.4%) of external revenue.
2020 2019
$’000 $’000
Operating expenses
1 The Group calculates its rehabilitation provisions based on a combination of its own estimates and rehabilitation cost calculators provided by resource regulators.
Rehabilitation cost calculators are issued by resource regulators for rehabilitation bonding purposes. During the prior year ended 30 June 2019, the Group
transitioned its rehabilitation provision calculations for most sites to the latest rehabilitation cost calculator available from resource regulators. This resulted in an
increase in the rehabilitation provisions within the Group of $138.5 million. The rehabilitation provisions will be re-assessed at each reporting date using updated
survey results and will incorporate the rehabilitation work undertaken during the period. The increase in the rehabilitation provision at 30 June 2019 for the mines
currently in rehabilitation, or approaching rehabilitation was recognised as an ‘Operating expense’ within the consolidated statement of comprehensive income.
The increase in the provision for mines that remain in operation was recognised as an addition to ‘Property, Plant & Equipment’ within the consolidated statement
of financial position.
2 During the year ended 30 June 2019, the Group ordered higher capacity hydraulic cylinders for the longwall roof supports. The new hydraulic cylinders will replace
the existing hydraulic cylinders following the change-out of the next longwall panel. As a result, the Group recognised an accelerated depreciation expense in
respect of the existing hydraulic cylinders.
2.3 Taxes
2020 2019
$’000 $’000
Income tax expense reported in the consolidated statement of comprehensive income (12,294) (207,970)
Income tax expense using the Company’s domestic tax rate of 30% (2019: 30%) (12,699) (220,760)
Non-deductible expenses:
On-market share purchases by employee share scheme trust reimbursed by the Group 1,010 8,503
2020 2019
$’000 $’000
Deferred income tax assets and liabilities are attributable to the following:
Assets Liabilities
Inventory – – (1,687) –
2020 2019
Basic earnings per share attributable to ordinary shareholders (cents) 3.0 53.5
2020 2019
Diluted earnings per share attributable to ordinary shareholders (cents) 3.0 52.4
2020 2019
$’000 $’000
Current
129,145 155,745
Non-current
3.2 Inventories
2020 2019
$’000 $’000
175,593 148,939
$’000 $’000
Current
189,474 197,731
Non-current
Non-current other payables relate to deferred consideration payable on the acquisition of EDF Trading Australia Pty
Limited which is payable over five years. Refer to note 6.1 for more information.
Adjustments for:
Leased Mining
Freehold Plant and plant and property and Deferred Deferred
land equipment equipment development Subtotal development stripping Subtotal Total
Year ended
30 June 2020 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost
Balance at
107,489 933,454 500,772 3,166,337 4,708,052 406,345 2,068,955 2,475,300 7,183,352
1 July 2019
Additions 35,621 144,745 258,253 22,904 461,523 110,610 427,785 538,395 999,918
PPE acquired as
part of subsidiary 968 28,321 142 35,416 64,847 26,071 – 26,071 90,918
acquisition
Balance at
144,078 1,088,567 614,939 3,224,657 5,072,241 467,357 2,496,740 2,964,097 8,036,338
30 June 2020
Accumulated depreciation
Balance at
– (375,735) (255,415) (511,536) (1,142,686) (163,018) (2,035,776) (2,198,794) (3,341,480)
1 July 2019
Depreciation
– (54,799) (80,705) (96,544) (232,048) (81,767) (402,219) (483,986) (716,034)
charge for the year
Balance at
– (412,581) (253,572) (608,080) (1,274,233) (169,116) (2,437,995) (2,607,111) (3,881,344)
30 June 2020
Carrying amount
144,078 675,986 361,367 2,616,577 3,798,008 298,241 58,745 356,986 4,154,994
at 30 June 2020
Leased Mining
Freehold Plant and plant and property and Deferred Deferred
land equipment equipment development Subtotal development stripping Subtotal Total
Year ended
30 June 2019 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Cost
Balance at
109,960 877,001 474,449 2,994,501 4,455,911 296,106 1,672,090 1,968,196 6,424,107
1 July 2018
Additions 964 59,258 58,687 168,225 287,134 110,239 396,865 507,104 794,238
PPE acquired as
part of Tarrawonga – – – 4,803 4,803 – – – 4,803
acquisition
Balance at
107,489 933,454 500,772 3,166,337 4,708,052 406,345 2,068,955 2,475,300 7,183,352
30 June 2019
Accumulated depreciation
Balance at
– (322,488) (177,956) (421,176) (921,620) (105,072) (1,650,657) (1,755,729) (2,677,349)
1 July 2018
Depreciation
– (56,030) (89,009) (91,552) (236,591) (57,946) (385,119) (443,065) (679,656)
charge for the year
Balance at
– (375,735) (255,415) (511,536) (1,142,686) (163,018) (2,035,776) (2,198,794) (3,341,480)
30 June 2019
Carrying amount
107,489 557,719 245,357 2,654,801 3,565,366 243,327 33,179 276,506 3,841,872
at 30 June 2019
The right of use asset is depreciated to the earlier stripping activity asset is subsequently depreciated
of the asset’s useful life or the lease term using on a units of production basis over the life of the
the straight line method and is recognised in the identified component of the ore body that became
statement of comprehensive income in depreciation more accessible as a result of the stripping activity.
and amortisation. Where the lease transfers ownership
For the purposes of assessing impairment, deferred
of the underlying asset to the Group by the end of
stripping assets are grouped with other assets of the
the lease term, the right of use asset is depreciated
relevant cash generating unit (CGU).
from the commencement date to the end of the
useful life of the underlying asset. Impairment
The unwinding of the financial charge on the The carrying amounts of the Group’s non-financial
lease liability is recognised in the statement assets are reviewed at each balance date to
of comprehensive income in financial expenses, determine whether there is any indication of
and is based on the implied interest rate or, impairment. If any such indication exists, the asset’s
if used, the Group’s incremental borrowing rate. recoverable amount is estimated. For intangible
assets that have indefinite lives or that are not
The Group does not recognise leases that have
yet available for use, the recoverable amount is
a lease term of 12 months or less, or are of low
estimated at each reporting date.
value, as a right of use asset or lease liability. Lease
payments associated with these leases are recognised For the purpose of impairment testing, assets are
as an expense in the consolidated statement of grouped together into the smallest group of assets
comprehensive income in operating expenses that generates cash inflows from continuing use,
on a straight line basis over the lease term. and which are largely independent of the cash inflows
of other assets or groups of assets – the CGU. The
Deferred development
recoverable amount of an asset or CGU is the greater
Deferred development mainly comprises capitalised of its value in use and its fair value less costs of disposal
costs (deferred development expenditure) related to (‘FVLCD’). In assessing FVLCD, the estimated future
underground mining incurred to expand the capacity cash flows are discounted to their present value using
of an underground mine and to maintain production. a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
Deferred stripping
specific to the asset.
Expenditure incurred to remove overburden or waste
An impairment loss is recognised whenever the
material during the production phase of an open cut
carrying amount of an asset or its CGU exceeds its
mining operation is deferred to the extent it gives
recoverable amount. Impairment losses recognised
rise to future economic benefits. This expenditure is
in respect of CGUs are allocated to reduce the carrying
charged to operating costs on a units of production
amount of the assets in the unit (group of units) on a
basis using the estimated average stripping ratio for
pro rata basis.
the area being mined. Changes in estimates of average
stripping ratios are accounted for prospectively. The
1 As part of the agreement to cancel previously existing infrastructure sharing arrangements, Whitehaven agreed to pay 10.1% of the construction cost of the
shared portion of the Boggabri – Maules Creek rail spur. In return, Whitehaven receives access to rail tonnes on the joint rail spur.
4.4 Provisions
2020 2019
$’000 $’000
Under the terms of its mining licenses and project approvals, the Group is required to comply with certain rehabilitation
and biodiversity obligations. The Group maintains provisions for these rehabilitation and biodiversity requirements. The
Group continues to assess estimates of these obligations as further developments occur and additional commitments
arise that may be required to settle its obligations. However, based on current estimates, any potential changes to these
obligations and commitments in addition to those already recognised in the financial statements are not financially
significant to the Group.
Provisions are made for the estimated cost of The amount of the provision relating to rehabilitation
rehabilitation relating to areas disturbed during the of environmental disturbance caused by on-going
mine’s operation up to reporting date but not yet production and extraction activities is recognised in
rehabilitated. The nature of rehabilitation activities the consolidated statement of comprehensive income
includes dismantling and removing operating facilities, as incurred.
re-contouring and top soiling the mine, and restoration,
Biodiversity obligations
reclamation and revegetation of affected areas.
Provision has been made in full for all disturbed areas The Group has, under the terms of certain mining
at the reporting date based on current estimates of licenses, obligations to perform works to establish
costs to rehabilitate such areas, discounted to their or upgrade biodiversity offset areas and to set aside
present value based on expected future cash flows. and maintain those areas. Provisions are made for the
estimated cost of the Group’s biodiversity obligations
The obligation to rehabilitate arises at the
based on current estimates of certain activities that
commencement of the mining project and/or when
the Group has committed to perform. These costs are
the environment is disturbed at the mining location.
discounted to their present value based on expected
At this point, the provision is recognised as a liability
future cash flows. The provision is recognised as
with a corresponding asset included in mining property
a liability with a corresponding asset included in
and development assets. Additional disturbances or
mining property and development assets. The
changes in the rehabilitation costs are reflected in the
unwinding of the effect of discounting the provision
present value of the rehabilitation provision, with a
is recorded as a finance cost in the consolidated
corresponding change in the cost of the associated
statement of comprehensive income. The carrying
asset. In the event the restoration provision is reduced,
amount capitalised as a part of mining property
the cost of the related asset is reduced by an amount
and development is depreciated via the units of
not exceeding its carrying value.
production method.
2020 2019
$’000 $’000
Current liabilities
81,553 81,728
Non-current liabilities
943,008 333,529
1,024,561 415,257
2020 2019
$’000 $’000
Financial income recognised directly in other comprehensive income, net of tax 7,202 (3,001)
1 During the current year, the Group refinanced its senior debt facility. In accordance with AASB 9, the net present value of the financial liability is required to be
recalculated when the contractual terms are renegotiated or otherwise modified. As the net present value of the financial liability did not change by more than 10%,
a gain on modification was recognised in the consolidated statement of comprehensive income.
a) Overview
The Group’s overall risk management program seeks to mitigate risks and reduce the volatility of its financial
performance. Financial risk management is carried out centrally by Group Treasury and monitored by the Group’s Audit
and Risk Management Committee under policies approved by the Board of Directors. The Committee reports regularly
to the Board on its activities and also reviews policies and systems regularly to reflect changes in market conditions and
the Group’s activities.
The Group’s principal financial risks are associated with:
– market risk
– credit risk
– liquidity risk
b) Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and
to sustain future development of the business. The Group defines capital as the total shareholders’ equity and debt.
The Board manages its capital structure and makes adjustments in light of changes to economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to shareholders, seek waivers or restructure its arrangements with its financiers
or issue new shares. The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus
net debt.
There were no changes in the Group’s approach to capital management during the year.
The Group’s gearing ratio is calculated as net debt divided by total equity plus net debt.
2020 2019
$’000 $’000
Gearing ratio 1
22% 8%
1 Calculated including lease liabilities recognised upon adoption of AASB 16 Leases of $130,313,000 (2019: $134,111,000).
During the current year ended 30 June 2020, a net foreign exchange loss of $3.5 million was recognised
(2019: net foreign exchange loss of $2.4 million).
The Group designates its forward exchange contracts in cash flow hedges and measures them at fair value.
The fair value of forward exchange contracts used as hedges at 30 June 2020 was $7.5 million asset
(2019: $2.7 million liability), comprising assets and liabilities that were recognised as derivatives.
At 30 June 2020, the Group had the following financial instruments that were not designated in cash flow hedges
that were exposed to foreign currency risk.
2020 2019
$’000 $’000
USD USD
Sensitivity analysis
A change of 10% in the Australian dollar against the following currencies at 30 June would have increased/(decreased)
equity and pre-tax profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular
interest rates, remain constant. The analysis is performed on the same basis for 2019.
$’000 $’000
30 June 2020
30 June 2019
Carrying amount
2020 2019
$’000 $’000
(346,605) (241,524)
(599,356) (68,821)
$’000 $’000
30 June 2020
30 June 2019
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risk from its financial assets, including trade receivables,
deposits with banks and other financial institutions, foreign exchange transactions and other financial instruments.
Maximum exposure is equal to the carrying amount of the financial assets, as outlined below.
Carrying amount
2020 2019
Investments 37 37
212,518 233,056
The Group’s maximum exposure to credit risk for trade receivables at the reporting date by geographic region was:
97,435 113,441
Trade receivables
The Group‘s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the Group’s customer base, including the default risk of the industry and country in which customers
operate, has less of an influence on credit risk. Approximately 28.1% of the Group’s revenue is attributable to sales
transactions with three customers (2019: 29.4% with three customers).
The Group trades only with recognised, creditworthy third parties and generally does not require collateral with respect
to trade receivables.
Receivable balances are monitored on an ongoing basis and as a result the exposure to bad debts is not significant.
The Group recognised an impairment loss for trade receivables of $nil during the year ended 30 June 2020 (2019: $nil).
The aging of the Group’s trade receivables at the reporting date was:
Gross Gross
2020 2019
$’000 $’000
97,435 113,441
Guarantees
The policy of the Group is to provide bank guarantees for bonding requirements associated with the mining operations,
infrastructure assets and other purposes such as security of leased premises. Guarantees are provided under the senior
secured bank facility, secured bilateral bank guarantee facilities and unsecured bank facilities. Details of outstanding
guarantees are provided in note 7.4.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
Typically, the Group ensures that it has sufficient cash on demand to meet all expected operational expenses as and
when due, including the servicing of financial obligations. This excludes the potential impact of extreme circumstances
that cannot reasonably be predicted, such as natural disasters.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding
the impact of netting agreements:
30 June 2020
Financial liabilities
30 June 2019
Financial liabilities
Equity shares 37 – – 37
8,323 – 8,286 37
(824) – (824) –
Equity shares 37 – – 37
84 – 47 37
(2,874) – (2,874) –
The fair value of derivative financial instruments is derived using valuation techniques based on observable market
inputs, such as forward currency rates, at the end of the reporting period. The amounts disclosed in the consolidated
statement of financial position are the fair values and are classified under level 2 in the fair value measurement
hierarchy. During the period the Group entered into forward exchange contracts to hedge some foreign exchange
risk. A number of these contracts remained open at 30 June 2020.
The carrying values of financial assets and financial liabilities recorded in the financial statements materially
approximates their respective net fair values, determined in accordance with the accounting policies disclosed
in notes 3.1, 3.3 and 5.1 to the financial statements.
2020 2019
Amortised Amortised
cost Other1 cost Other1
Financial assets
Investments – 37 – 37
1 Other financial assets include $8.3 million (2019: $0.1 million) relating to derivatives in designated hedges.
2020 2019
Amortised Amortised
cost1 Other2 cost1 Other2
Financial liabilities
1 Loans at amortised cost are non-derivatives with fixed or determinable payments and are not quoted on an active market. Loans and payables are valued
at amortised cost.
2 Other financial liabilities include $0.8 million (2019: $2.9 million) relating to derivatives in designated hedges.
$’000 $’000
Consisting of:
1 Current loans and borrowings does not include capitalised borrowing costs of $12,332,000 (2019: $6,712,000).
2 Non-current loans and borrowings does not include capitalised borrowing costs of $15,827,000 (2019: $7,907,000).
The Group classifies interest paid as cash flows from operating activities.
a) Share capital
2020 2019
Ordinary share capital at the beginning of the period 1,026,045,885 2,980,933 1,026,045,885 2,993,458
Ordinary share capital at the end of the period 1,026,045,885 3,003,964 1,026,045,885 2,980,933
At 30 June 2020, a trust on behalf of the Company held 1,591,838 ordinary fully paid shares in the Company (30 June 2019: 5,337,876). During the year, 5,246,038
of these shares were transferred to performance rights plan recipients and 1,500,000 purchased by the share plan. These were purchased during the year for the
purpose of allowing the Group to satisfy performance rights to certain management of the Group. Refer to note 5.5 for further details on the performance rights plan.
Hedge reserve
The hedging reserve comprises the effective portion of the cumulative change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet occurred.
c) Dividends
Dividends of $312,197,000 were paid to shareholders during the year ended 30 June 2020 (2019: $464,854,000).
The Directors resolved not to pay a final dividend with respect to the year ended 30 June 2020.
2020 2019
2020 2019
1 To the extent that the Costs Hurdle Award is satisfied at the end of the year of testing, 50% of the awards will vest and become exercisable immediately and the
remaining 50% will continue on foot, subject to a further one year service condition.
The performance rights are subject to a performance measure linked to relative total shareholder return (TSR)
and a costs hurdle. The TSR performance measure compares the TSR performance of the Company with the TSR
performance of a peer group of companies operating in the Australian resources sector. The costs hurdle performance
measure relates to the Company’s achieving a defined cost per tonne target. Detailed disclosures of LTI outcomes
against the target are provided in the Remuneration Report.
The table below details the outcomes of MTI awards that were tested in FY20 (or for which the test period concluded
on 30 June 2020) and the results of the relevant test.
Outcomes
Weighted Weighted
average Number of average Number of
exercise price options/rights exercise price options/rights
1 Includes 637,476 performance rights granted during the year under the FY19 STI scheme.
2 Includes 436,897 performance rights granted during the year under the FY18 STI scheme.
Rights
Fair value at grant date $1.98 $3.43 $1.99 $2.10 $3.43 $3.43
Rights
Fair value at grant date $2.98 $5.07 $2.99 $3.15 $5.07 $5.07
6. Group structure
6.1 Acquisition of business
Deferred consideration 1
81,156
1 Deferred consideration on the acquisition of EDF Trading Australia Pty Limited of US$55 million is payable over five years and is not contingent.
2 Other acquisition related payments of $3,068,000 were made during the year ended 30 June 2020.
$’000
Assets
Inventory 5,622
121,331
Liabilities
(15,834)
Total tax losses (tax effected at 30%) transferred from EDF Trading Australia Pty Limited were $50,532,000.
The Group recognised $28,761,000 of these losses and $21,771,000 remained unrecognised.
Parent entity
Whitehaven Coal Limited
Subsidiaries
Whitehaven Coal Mining Limited 1 100% 100% Maules Creek Coal Pty Ltd1 100% 100%
Namoi Agriculture & Mining Pty Ltd 100% 100% Boardwalk Coal Management Pty Ltd 1
100% 100%
Betalpha Pty Ltd1 100% 100% Boardwalk Coal Marketing Pty Ltd1 100% 100%
Tarrawonga Coal Sales Pty Ltd2 100% 100% Boardwalk Monto Pty Ltd1 100% 100%
Whitehaven Coal Infrastructure Pty Ltd1 100% 100% Boardwalk Ferndale Pty Ltd1 100% 100%
Narrabri Coal Pty Ltd1 100% 100% Yarrawa Coal Pty Ltd1 100% 100%
Narrabri Coal Sales Pty Ltd 1 100% 100% Ferndale Coal Pty Ltd 92.5% 92.5%
Werris Creek Coal Sales Pty Ltd1 100% 100% CWK Nominees Pty Ltd1 100% 100%
WC Contract Hauling Pty Ltd1 100% 100% Coalworks (Vickery South) Pty Ltd1 100% 100%
Whitehaven Project Pty Ltd1 100% 100% Vickery South Marketing Pty Ltd1 100% 100%
Whitehaven WS Pty Ltd2 100% 100% Vickery South Pty Ltd1 100% 100%
Aston Coal 3 Pty Ltd1 100% 100% Winchester South Coal Operations Pty Ltd2 100% 100%
1 These subsidiaries entered into a Class Instrument 2016/785 dated 28 September 2016 and related deed of cross guarantee with Whitehaven Coal Limited.
Refer to note 6.5 for further information.
2 These subsidiaries entered into a Class Instrument 2016/785 dated 24 June 2020 and related deed of cross guarantee with Whitehaven Coal Limited.
Refer to note 6.5 for further information.
3 During the financial year ended 30 June 2020 the Group acquired EDF Trading Australia Pty Limited, which owns a 7.5% interest in the Narrabri Coal Project
Joint Venture. Upon completion of the acquisition, the entity was renamed to Narrabri Coal Australia Pty Ltd.
1 During the financial year ended 30 June 2020, the Group completed the acquisition of EDF Trading Australia Pty Limited which owns a 7.5% interest in the
Narrabri Coal Project Joint Venture. Refer to note 6.1.
2 These entities have been classified as joint operations under AASB 11 Joint Arrangements, as these joint arrangements are not structured through
separate vehicles.
3 The joint operations above operate as the sales and marketing vehicles or manager of the related unincorporated joint operations and require joint consent
from all joint venture partners on all significant management and financial decisions. The group recognises its share of assets, liabilities, revenues and expenses
of the above entities as joint operations under AASB 11 Joint Arrangements.
2020 2019
Current liabilities – –
Total liabilities – –
2020 2019
Other comprehensive income for the period, net of tax 7,202 (3,001)
Total comprehensive income for the period, net of tax 35,738 524,897
Assets
Investments 37 37
Closed Group
2020 2019
Liabilities
Non-current liabilities
Compensation to Executive KMP and Non-Executive Directors of the Group $’000 $’000
7. Other notes
7.1 Employee benefits
2020 2019
215,374 197,631
30,430 26,510
Audit services
Audit and review of statutory financial statements of the parent covering the Group 553,927 571,625
553,927 571,625
Review of National Greenhouse and Energy Reporting Act 2007 requirements 67,204 62,629
383,277 346,004
Other services
62,994 194,790
7.3 Commitments
2020 2019
b) Lease commitments
Leases relate to property, plant and equipment with lease terms of between one and five years, as well as leases
recognised in accordance with AASB 16 Leases.
2020 2019
$’000 $’000
346,605 241,524
a) Bank guarantees
2020 2019
The Group provided bank guarantees to government departments as a condition
of continuation of mining and: $’000 $’000
454,288 405,309
b) Other
As previously reported, representative proceedings were commenced against the Group on 21 December 2018 in
the Supreme Court of Queensland by Nathan Tinkler as representative applicant. The proceedings were brought
on behalf of a number of parties who were issued with Milestone Shares (subject to restrictions on voting and transfer
until various development milestones are met) in Whitehaven Coal Limited in May 2012. The proceedings have since
been transferred to the Supreme Court of New South Wales and the representative applicant has been replaced by
Les & Zelda Investments Pty Ltd (ACN 148 907 573) as Trustee for the Les & Zelda Family Trust. The pleadings make
various allegations against the Group concerning an alleged breach of contract, misleading and deceptive conduct
and minority shareholder oppression in connection with the Milestone Shares. The Group has filed a defence that
denies those allegations. The proceedings are ongoing, and no trial date has yet been set.
Other than the above, there are a number of legal and potential claims against the Group that have arisen in
the ordinary course of business. The Group does not believe that these matters will result in any material adverse
outcome based on information currently available and no provision has been made for any potential adverse outcome.
Directors’ declaration
For the year ended 30 June 2020
Sydney
26th August 2020
We have audited the financial report of Whitehaven Coal Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2020, the consolidated statement of comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, notes to the financial
report, including a summary of significant accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2020
and of its consolidated financial performance for the year ended on that date; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
separate opinion on these matters. For each matter below, our description of how our audit addressed
the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
76
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Why significant How our audit addressed the key audit matter
At 30 June 2020, the Group’s Our audit procedures included the following:
consolidated statement of financial
• Consideration of the appropriateness of the
position included $4,155m of property,
Group’s identification of its single cash generating
plant and equipment relating to
unit.
operating mines.
• Assessment of whether the model used by the
As disclosed in Note 4.1 of the financial Group for their impairment test of the carrying
report, the Directors have assessed value of property, plant and equipment complied
property, plant and equipment for with the requirements of Australian Accounting
impairment as one cash-generating Standards.
unit. This assessment involves critical
accounting estimates and assumptions, • Testing the mathematical accuracy of the
specifically key forecast assumptions impairment model.
such as commodity prices, discount • Assessment of key forecast assumptions such as
rates, inflation rates, foreign exchange coal prices, discount rates, inflation rates, and
rate and recoverable reserves. These foreign exchange rates, with reference to external
estimates and assumptions are
observable market data and independent economic
summarised in Note 4.1.
analysis and with involvement from our valuation
We considered this to be a key audit specialists.
matter due to the value of the balance • Analysis of forecast operating and capital cost
in the consolidated statement of assumptions against historical performance and
financial position relative to total the latest approved budgets and forecasts.
assets, and the significant judgments
• Assessment of the work of the Group’s internal and
and assumptions involved in the
impairment test. external experts with respect to the coal reserves
and resources used in the cash flow forecasts. This
included understanding the reserve estimation
processes carried out, and assessing the
qualifications, competence and objectivity of the
Group’s experts and the scope and appropriateness
of their work.
• Evaluation of the sensitivity analysis performed by
the Group, focusing on the components in
impairment models where a reasonably possible
change in key forecast assumptions could cause
impairment.
• Assessment of the adequacy of the disclosures
relating to property, plant and equipment in the
financial statements, including those made with
respect to judgements and estimates.
Auditor’s report
For the year ended 30 June 2020
Why significant How our audit addressed the key audit matter
At 30 June 2020, the consolidated Our audit procedures included the following:
statement of financial position included
$270.1m of mine rehabilitation, • Assessment of the Group’s process applied in
closure and biodiversity provisions. quantifying the recognition, review and approval of
the rehabilitation, closure and biodiversity
As a consequence of its operations, the provisions.
Group incurs obligations to restore,
rehabilitate and maintain the land used • Agreement of the forecast disturbed areas
for its operations. Rehabilitation and included in rehabilitation models to surveys
biodiversity activities are governed by completed over areas requiring rehabilitation.
a combination of legislative
requirements and Group policies. • Consideration of the reasonableness of cost rates
applied in deriving the provisions with respect to
Estimating the costs associated with government specified cost and bonding rates.
these future activities requires
considerable judgement in relation to • Consideration of the qualifications, competence
factors such as when the rehabilitation and objectivity of the Group’s experts, both
will take place, the time period required internal and external, who produced the surveys
for the rehabilitation to be effective, and cost estimates.
the extent and costs of rehabilitation
activities, technological changes, • Testing the mathematical accuracy of the
regulatory changes, cost increases, the rehabilitation models to support the provision
extent of ongoing maintenance balance.
following the completion of
rehabilitation activities and changes in • Consideration of the discount rate applied by the
economic assumptions including Group.
discount rate.
• Evaluation of the appropriateness of accounting
This was considered to be a key audit treatment applied to changes in the rehabilitation
matter due to the significant judgments provision.
and assumptions involved in the
calculation of these mine rehabilitation, • Assessment of whether the judgments and
closure and biodiversity provisions. estimates disclosures relating to mine closure,
rehabilitation and biodiversity provisions met the
requirements of Australian Accounting standards.
The Directors are responsible for the other information. The other information comprises the
information included in the Company’s 2020 Annual Report other than the financial report and our
auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual Report,
prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the Annual
Report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and
our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
The Directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the Directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or cease
operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgment
and maintain professional scepticism throughout the audit. We also:
Auditor’s report
For the year ended 30 June 2020
• Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events and conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated to the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
This declaration is in respect of Whitehaven Coal Limited and the entities it contr
Independent Auditor’s Report to the Members of Whitehaven Coal
financial year.
Limited
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Reportthe
(collectively the Group), which comprises onconsolidated
the Remuneration Report
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Why significant How our audit addressed the key audit ma
In our opinion, the accompanying year ended report
financial 30 June of 2020.
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Act 2001, including: Opinion on the Remuneration Report At 30 Ryan
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Ernst & Young for the rehabilitation to be effective, and cost estimates.
our opinion.
the extent and costs of rehabilitation
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Key Audit Matters regulatory changes, cost increases, the rehabilitation models to support the pro
extent of ongoing maintenance balance.
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matters& Young
that, in our professional judgment, were of most significancefollowing the in our completion of
audit of the financial report of the current year. These matters were addressed in therehabilitation context of our activities and changes in • Consideration of the discount rate appl
audit of the financial report as a whole, and in forming our opinion thereon, but we do economic
not provide assumptions
a including Group. 21
separate opinion on these matters. For each matter below, our description of how our discount audit addressedrate.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ryan Fisk
the matter is provided in that context. • Evaluation of the appropriateness of ac
Partner This was considered to be a key audit treatment applied to changes in the reh
Sydney
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the matter
Audit due oftothe the significant judgments provision.
26 August 2020 and assumptions involved in the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
calculation of these mine rehabilitation, • Assessment of whether the judgments
included the performance ofRyan Fisk
procedures designed to respond to our assessment of the risks of material
closure and biodiversity provisions. estimates disclosures relating to mine c
Partner
misstatement of the financial report. The results of our audit procedures, including the procedures
Sydney below, provide the basis for our audit opinion on the accompanying
performed to address the matters rehabilitation and biodiversity provision
26 August 2020 requirements of Australian Accounting
financial report.
76
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report is set out below.
Shareholdings
Substantial shareholders
The number of shares recorded as owned by substantial shareholders and their associates in the most
recent substantial shareholder notices advised to the Company by these shareholders are set out below:
* The holdings of Mr Kundrun and Mr Mende both include the 86,170,596 shares owned by AMCI Group.
16,949 100.00
Securities exchange
The Company is listed on the Australian Securities Exchange.
Other information
Whitehaven Coal Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.
Number of
ordinary Percentage of
Name shares held capital held
AET SFS PTY LTD <BOARDWALK RES INV P/C> 26,678,979 2.60
BNP PARIBAS NOMINEES PTY LTD <AGENCY LENDING DRP A/C> 10,498,808 1.02
BNP PARIBAS NOMINEES PTY LTD <IB AU NOMS RETAILCLIENT DRP> 9,225,504 0.90
BNP PARIBAS NOMS PTY LTD <UOB KH P/L AC UOB KH DRP> 2,667,009 0.26
CITICORP NOMINEES PTY LIMITED <COLONIAL FIRST STATE INV A/C> 2,299,364 0.22
BRISPOT NOMINEES PTY LTD <HOUSE HEAD NOMINEE A/C> 1,943,454 0.19
859,784,793 83.79
Glossary
ARTC Australian Rail Track Corporation
ASEAN Association of Southeast Asian Nations
CHPP coal handling preparation plant
EBITDA earnings before interest, depreciation and amortisation
ECA Export Credit Agency
FEC Forward Exchange Contract
FOB Free on Board
FVLCD fair value less costs of disposal
FY19 financial year ending 30 June 2019
FY20 financial year ending 30 June 2020
HELE high-efficiency, low-emissions
JORC Joint Ore Resources Committee
KMP Key Management Personnel
KPI Key performance indicator
kt thousand tonnes
LTI Long Term Incentive
LW Longwall
m million
MRRT Minerals Resource Rent Tax
Mt million tonnes
MTI Medium Term Incentive
Mtpa million tonnes per annum
NCIG Newcastle Coal Infrastructure Group
NPAT net profit after tax
PWCS Port Waratah Coal Services
ROM run of mine
SSCC semi-soft coking coal
STI Short Term Incentive
t tonne
TAL Tonne Axle Load
TFR Total Fixed Remuneration
TRIFR Total Recordable Injury Frequency Rate
TSR Total Shareholder Return
Corporate directory
Directors Registered and Principal Share Registry
Administrative Office
The Hon. Mark Vaile AO Computershare Investor
Chairman Level 28, 259 George Street Services Pty Limited
Sydney NSW 2000 GPO Box 2975 Melbourne
John Conde AO Victoria 3001 Australia
Deputy Chairman P +61 2 8222 1100
F +61 2 8222 1101 P 1300 855 080
Dr Julie Beeby (or +61 3 9415 4000)
Non-Executive Director Australian Business Number
ABN 68 124 425 396
Country of Incorporation
Paul Flynn
Managing Director and CEO Australia
Stock Exchange Listing
Lindsay Ward
Web address
Non-Executive Director Australian Securities
Exchange Limited www.whitehavencoal.com.au
Fiona Robertson ASX Code: WHC
Non-Executive Director
whitehavencoal.com.au