Aal 09

APAC COAL LIMITED
AND CONTROLLED ENTITIES
ABN: 16 126 296 295
Annual Financial Report For The Year Ended

30 June 2009
APAC COAL LIMITED
ABN: 16 126 296 295
CORPORATE DIRECTORY
Directors Auditors
Paul Piercy (Chairman and Non Executive Director) Deloitte Touche Tohmatsu
TK Koh (Managing Director) Woodside Plaza
Sam Di Giacomo (Non Executive Director) Level 14
Maurice Drew (Non Executive Director) 240 St Georges Terrace
Shyun Kon (Non Executive Director) Perth WA 6001
Kuan Yew Lim (Non Executive Director)
Company Secretary Share Registry

Connie Lodge Security Transfers Registrars
770 Canning Highway
Registered Office Applecross WA 6153
c/- Mid Continent Equipment (Australia) Pty Ltd Tel - +61 8 9315 2333
130 Mills Street E-mail - registrar@securitytransfer.com.au
Welshpool WA 6106 Web - www.securitytransfer.com.au
Postal Address ASX Code - AAL

PO Box 47
Welshpool DC WA 6986 Website - www.apaccoal.com
Principal Place of Business Controlled Entities

c/- Magnus Energy Group Limited PT Deefu Chemical Indonesia
10 Anson Road PT Batubara Selarus Sapata
#33-13 International Plaza
Singapore 079903
Solicitors (Australia)
Steinepreis Paganin
Level 4, Next Building
16 Milligan Street
Perth WA 6000
Solicitors (Indonesia)
Soebagio, Jatim Djarot
Plaza DM, 17th Floor
Jalan Jenderal, Sudimankav.25
Jakarta 12920
Indonesia
APAC COAL LIMITED
30 June 2009
ABN: 16 126 296 295
CONTENTS Page
Directors' Report 1
Auditor's Independence Declaration 10
Income Statement 11
Balance Sheet 12
Statement of Changes in Equity 13
Cash Flow Statement 14
Notes to the Financial Statements 15
Directors' Declaration 30
Independent Audit Report 31
Corporate Governance Statement 33

APAC COAL LIMITED AND CONTROLLED ENTITIES
REPORT OF THE DIRECTORS FOR THE YEAR ENDED 30 JUNE 2009
Your directors present their report, together with the financial statements of the Group, being the Company and its controlled entities for the
financial year ended 30 June 2009.
Principal Activities and Significant Changes in Nature of Activities
The Group's principal activities during the course of the financial year were completing the listing on the Australian Securities Exchange, to initiate
and finalise the exploration and evaluation of coal resources in our Coal Contract of Works (CCOW) in East Kalimantan, Indonesia.
Operating Results and Review of Operations for the year
Review of Operations
The Group's activities during the year were largely focused on evaluating the CCOW held by the Company for more definitive coal ore body. The
CCOW location is shown in Figure 1.
Figure 1. Location of CCOW in East Kalimantan
APAC Coal Limited was successfully listed on 10 July 2008, but shortly afterwards went into a trading halt because of the interaction with a
particular broker and resolution of an issue with a trespassing miner. Both were quickly resolved and the Group was relisted 1 August 2008.
Negotiations with the Ravensgate Group were concluded during August 2008 and they were contracted to develop and oversee a drilling
programme in the 68,360 ha CCOW in the province of East Kalimantan.
The Ravensgate Geological Team was to undertake a program of work to:
1 Upgrade the JORC Resource of the Bekosos Lempesu Block through infill drilling.
2 Increase the resource base of the Bekosos Lempesu Block by drilling strike extensions of known coal seams.
3 Identify additional drill targets within the Bekosos Lempesu Block through mapping and pitting.
4 Identify drill targets within the larger concession area through systematic mapping, pitting and outcrop sampling.
5 Assess the quality of the overall CCOW area.
The exploration and mapping activities continued into early 2009. Figure 2. (below) shows the CCOW and work area relative to Tanah Grogot.
1
Figure 2. Location of CCOW and work area.
The Preliminary Exploration and Drilling Plan was completed in early 2009. The Board members travelled to Kalimantan for a Board Meeting and
site visit. The Board was presented with an update from the Ravensgate team prior to travelling to Tanah Grogot for a detailed site inspection.
Following the report it was agreed, in accordance with Indonesian Mining Law, to release the least prospective areas of the CCOW to the
Government. This was reported to the market in the March 2009 Quarterly Report to the ASX. The high potential land was retained and the focus
is now on the 23,124 ha. including the initially targeted 890 ha.
A number of potential drilling contractors were approached during the 3rd quarter of the financial year to tender for the agreed Drilling Programme.
PT Dunggio Drilling were selected to undertake the Drilling programme. Dunggio Drilling is an Indonesian company with a sound track record.
They have performed well to date.
The Ravensgate Team maintains the field overview and manages the core logging and overall site activity. Core recovery has been good and the
first samples were dispatched for analysis in the last week of June. Approximately 1,250 meters had been drilled D150 by the 30th of June 2009.
Financial Position
The Loss for the financial year was $1,873,361 (2008: $131,477) and was largely attributable to completing the establishment of the Group as an
entity and the costs of exploration and resource definition. The work programme was primarily targeted on increasing the JORC compliant
resource to broaden the production potential base.
The directors believe the Group is in a strong and stable financial position to expand and develop its current concessions.
Significant Changes in State of Affairs
There was no significant change in the state of affairs of the Group during the financial year other than those matters disclosed elsewhere in the
report.
Changes in controlled entities and divisions:
(i) Purchase of 99.33% of Pt Deefu Chemical Indonesia, holding company for PT Batubara Selarus Sapta.
(ii) Purchase of 95% of PT Batubara Selarus Sapta, coal exploration entity.
2
Dividends Paid or Recommended

No dividends have been paid or declared during, or since the end of, the financial year.
After Balance Date Events

There has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may
significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years other
than as disclosed below.
Future Developments, Prospects and Business Strategies
Disclosure of information regarding the likely developments in the operations of the Group in future financial years and the expected results of
those operations is likely to result in unreasonable prejudice to the Group. Accordingly, this information has not been disclosed in this report.
Environmental Issues
The Group's environmental obligations are regulated under both State and Federal legislation. Performance with respect to environmental
obligations is monitored by the Board of Directors and subjected from time to time to government agency audits and site inspections. No
environmental breaches have been notified by any government agency during the year ended 30 June 2009.
Information on Directors
Paul Piercy — Independent Non Executive Director and Chairman
Qualifications — Fellow of Australasian Institute of Mining and Metallurgy, Fellow of the Australian Institute of
Company Directors, Fellow of Australian Institute of Management
Experience — 40 years in the mining and resource sector, encompassing uranium, lead/silver smelting,
lead/zinc/silver recovery, copper, gold, iron or and coal. Experience includes Africa, People's
Republic of China, UK, Papua New Guinea and Australia. 5 year's in the mining and
earthmoving equipment management business
Interest in Shares and Options — 2,000,000 options to acquire ordinary shares
Special Responsibilities — Member of the Audit Committee and the Remuneration Committee
Directorships held in other listed entities — Australasian Resources Limited - appointed February 2006
during the three years prior to the current
year
TK Koh — Managing Director

Qualifications — Degree from the Chartered Institute of Management Accountants of the United Kingdom,
Fellow member of the Chartered Institute of Management Accountants of the United Kingdom,
Fellow member of the Institute of Certified Public Accountants of Singapore
Experience — 25 Years in the manufacturing, construction and petroleum industries
Special Responsibilities — None
Directorships held in other listed entities — Magnus Energy Group Ltd - appointed February 2005
year
Sam Di Giacomo — Independent Non Executive Director

Qualifications — Certified Public Accountant, Member of The Institute of Chartered Accountants in Australia,
Fellow of the Financial Services Institute Australia, Fellow of the Australian Institute of
Management
Experience — 20 years corporate experience in a diverse range of industries
Interest in Shares and Options — 1,000,000 options to acquire ordinary shares; and 150,000 ordinary shares
Special Responsibilities — Audit Committee Chairperson and Remuneration Committee
Directorships held in other listed entities — Costarella Design Limited - appointed June 2006 - resigned August 2009, Millepede
during the three years prior to the current International Limited - appointed April 2006, Rockeby Biomed Limited - April 2006 - June 2008
year
3
Maurice Drew — Independent Non Executive Director

Qualifications — Bachelor of Science - Geology and Physics
Experience — 49 years experience in the upstream oil and gas exploration and production business
Directorships held in other listed entities — None
year
Shyun Kon — Independent Non Executive Director

Qualifications — Honours Degree in Economics, Masters in Management
Experience — 26 years as a consultant and director in the areas of Strategic Planning, Business
Development and Operations Management
Special Responsibilities — Audit Committee
Directorships held in other listed entities — China Entertainment Sports Ltd - appointed May 1996, Investor Ventures Sdn Bhd - appointed
during the three years prior to the current May 1997
year
Kuan Yew Lim — Non Executive Director

Qualifications — Higher School Certificate 1978
Experience — Extensive experience in areas of auditing, corporate restructuring, mergers and acquisitions,
operations review and strategy planning.
Directorships held in other listed entities — VTI Vintage Berhad - appointed February 2008, Teck Yong Sdn. Bhd. - appointed September
during the three years prior to the current 1999, Dandelion Development Sdn. Bhd. - appointed September 1999, Millenscore Sdn. Bhd. -
year appointed December 2007, K-Vista Sdn. Bhd. - appointed September 2004, First Vertex Sdn.
Bhd. - appointed September 2004, Manna Food Industries Sdn. Bhd. - appointed December
2003, Gates Consulting Sdn. Bhd. - appointed June 2000, Lerk Thai (M) Sdn. Bhd. - appointed
April 2008, Authentic Flavours (M) Sdn. Bhd. - appointed May 2008, Freeway Achievement
Sdn. Bhd. - appointed July 2008
Interests in the shares and options of the Company and related bodies corporate
As at the date of this report, the interests of the directors in the shares and options of APAC Coal Limited were:
Ordinary Shares Options over Ordinary Shares

Paul Piercy - 2,000,000
TK Koh - 1,300,000
Sam Di Giacomo 150,000 1,000,000
Maurice Drew - 1,000,000
Shyun Kon - 1,000,000
Kuan Yew Lim - 1,000,000
Company Secretary
The following person held the position of Company Secretary at the end of the financial year: Connie Lodge — Bachelor of Commerce, Certified
Practicing Accountant. Mrs Lodge has 15 years experience in corporate finance and has performed a variety of management roles in the mining,
manufacturing and engineering industries. Mrs Lodge was appointed Company Secretary on 23rd of March 2009.
4
Meetings of Directors
During the financial year, four meetings of directors (including committees of directors) were held.
Attendances by each director during the year were as follows:
Directors' Audit Remuneration

Nominating Committee
Meetings Committee Committee
Number Number Number Number Number Number Number Number
eligible attended eligible to attended eligible to attended eligible attended
to attend attend to attend
attend
Paul Piercy 2 2 2 2 - - - -
TK Koh 2 2 2 2 - - - -
Sam Di Giacomo 2 2 2 2 - - - -
Maurice Drew 2 2 2 2 - - - -
Shyun Kon 2 1 2 1 - - - -
Kuan Yew Lim 1 1 1 1 - - - -
There were no Nominating or Remuneration Committee meetings held during the year.
Options
At the date of this report, the unissued ordinary shares of APAC Coal Limited under option are as follows
Date of Number under

Class expiry Exercise price option
Ordinary 31/10/2010 25 cents 7,300,000
Ordinary 10/07/2011 25 cents 178,635
7,478,635
Options holders do not have any rights to participate in any issues of shares or other interests in the Company or any other entity.
There have been no unissued shares or interests under option of any controlled entity within the Group during or since reporting date.
For details of options issued to directors and executives as remuneration, refer to the Remuneration Report.
Indemnification of officers and auditors

The Group has entered into a contract insuring the Directors and Company Secretary of the Group named above and of any related body
corporate against a liability incurred as a director or executive officer to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the nature of the liability and the amount of the premium.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to
indemnify an officer or auditor of the company or related body corporates against a liability as an officer or auditor.
Non-audit Services
The board of directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services during the year is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the
services disclosed below did not compromise the external auditor’s independence for the following reasons:
• all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the
integrity and objectivity of the auditor; and
• the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110:
Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
The following fees were paid or payable to Deloitte Touche Tohmatsu for non-audit services provided during the year ended 30 June 2009:
$
Taxation services 14,538
14,538
5
Auditor’s Independence Declaration
The lead auditor’s independence declaration for the year ended 30 June 2009 has been received.
REMUNERATION REPORT
Remuneration policy
The remuneration report, which forms part of the directors' report, sets out information about the remuneration of APAC Coal Limited's key
management personnel for the financial year ended 30 June 2009.
The board’s policy for determining the nature and amount of remuneration for key management personnel of the consolidated group is as follows:
• Key management personnel details;
• Remuneration policy and relationship between the remuneration policy and company performance;
• Remuneration of key management personnel; and
• Key terms of employment contracts
The remuneration committee reviews key management personnel packages annually by reference to the Group’s performance, executive
performance and comparable information from industry sectors.
Key management personnel details
• Paul Piercy, Chairman and Non Executive Director - appointed 06/09/07
• TK Koh, Managing Director - appointed 06/09/07
• Sam Di Giacomo, Non Executive Director - appointed 29/06/07
• Maurice Drew, Non Executive Director - appointed 06/09/07
• Shyun Kon Non Executive Director - appointed 19/03/08
• Kuan Yew Lim Non Executive Director - appointed 14/10/2008
Included in key management personnel above are the 5 highest remunerated executives of the company.
Relationship between remuneration policy and company performance
During the year, the primary aim of the Group was to undertake a review of the work required to progress the development of the initial 890
hectares and exploration of the larger Concession area inclusive of infill drilling for resource quality definition for production planning. The Board
believes that the Group's earnings or other performance indicator during the year were largely immaterial to this goal. Therefore key management
personnel remuneration in 2009 was not linked to Group performance.
For the purposes of S300A(1AA) of the Corporations Act 2001, there were no dividends paid during the year and no returns of capital.
Performance in relation to the KPI’s is assessed annually, with bonuses being awarded depending on the number and deemed difficulty of the
KPIs achieved. Following the assessment, the KPIs are reviewed by the remuneration committee in light of the desired and actual outcomes, and
their efficiency is assessed in relation to the group’s goals and shareholder wealth, before the KPI’s are set for the following year.
The following table shows the gross revenue, losses and share price for the last two years.
2008 2009
$ $
Revenue - 305,399
Net Loss (131,477) (1,868,962)
Share Price
at Year-end N/A 0.05
Market Capitalisation N/A 12,984,693
At listing, 10 July 2008, the share price was 20 cents.
6
Employment Details of Members of Key Management Personnel and Other Executives
Executives
The Remuneration Committee is responsible for determining the remuneration policies for the Group, including those affecting executive directors
and other key management personnel. The Committee may seek appropriate external advice to assist in its decision making. Remuneration
policies and practices are directed primarily at attracting, motivating and retaining key management personnel.
The Group's executives are not remunerated directly by the Group. TK Koh is employed directly by Magnus Energy Group Limited and the Group
pays a fixed monthly fee for his services as Managing Director to the Group. Further details on this arrangement are outlined later in the
remuneration report.
Non Executive directors
The non executive directors received fees only (including statutory superannuation) for their services and reimbursement of reasonable expenses.
The fees paid to the Group's Non Executive directors reflect the demands on, and responsibilities of these directors. They do not receive any
retirement benefits (other than statutory superannuation). The Board decides annually the level of fees to be paid to Non Executive directors with
reference to market standards.
Non executive directors may also receive share options where this is considered appropriate by the Board as a whole and with regard to the stage
of the Group's development. These options are primarily designed to provide an incentive to non executive directors to remain with the Group.
The following table provides employment details of persons who were, during the financial year, members of key management personnel of the
Group, and to the extent different, were amongst the five Group executives or Company executives receiving the highest remuneration.
Non-salary
cash based Shares/ Options/ Fixed
incentives Units Rights Salary/Fees Total
% % % % %
Group Key Management Personnel
Paul Piercy - - - 100 100
TK Koh - - - 100 100
Sam Di Giacomo - - - 100 100
Maurice Drew - - - 100 100
Shyun Kon - - - 100 100
Kuan Yew Lim - - 17 83 100
Changes in Directors and Executives Subsequent to Year End
On 31 July 2009 Mr Maurice F Drew resigned as a Director.
Remuneration Details for the Year Ended 30 June 2009
The following table of payments and benefits details, in respect to the financial year, the components of remuneration for each member of the key
management personnel for the consolidated group and, to the extent different, the five group executives and five company executives receiving
the highest remuneration:-
Table of Benefits and Payments for the year ended 30 June 2009
Short-term Post Equity-settled Total

benefits Employment share-based $
Benefits payments
Salary, Fees Pension and
and Leave superannuation Options/Rights
2009 $ $ $
Group Key
Management Personnel
Paul Piercy 42,049 3,784 - 45,834
TK Koh 17,922 1,613 - 19,536
Sam Di Giacomo 25,229 2,271 - 27,500
Maurice Drew 26,884 2,420 - 29,303
Shyun Kon 17,922 1,613 - 19,536
Kuan Yew Lim 13,135 1,182 4,400 18,717
143,142 12,883 4,400 160,425
7
Short-term Post Equity-settled Total

benefits Employment share-based $
Benefits payments
Salary, Fees Pension and
and Leave superannuation Options/Rights
2008 $ $ $
Group Key
Paul Piercy 42,750 - 3,520 46,270
TK Koh - - 2,288 2,288
Sam Di Giacomo 60,000 - 1,760 61,760
Maurice Drew - - 1,760 1,760
Shyun Kon - - 1,760 1,760
Kuan Yew Lim - - - -
102,750 11,088 113,838
Securities Received that are not Performance Related
The granting of options was not subject to performance conditions.
Incentive share based payment arrangements
The following share based payment arrangements for key management personnel were in existence during the current financial year:
Reason Percentage Percentage Percentage Range of

Remun- for vested/paid forfeited during remaining as possible values
eration Grant during year year unvested relating to future
2009 Type Grant Date (Note 1) % % % Expiry date payments
Group Key
Paul Piercy Options 31/10/2007 (a) - - - 31/10/2010 n/a
TK Koh Options 31/10/2007 (a) - - - 31/10/2010 n/a
Sam Di Giacomo Options 31/10/2007 (a) - - - 31/10/2010 n/a
Maurice Drew Options 31/10/2007 (a) - - - 31/10/2010 n/a
Shyun Kon Options 31/10/2007 (a) - - - 31/10/2010 n/a
Kuan Yew Lim Options 14/10/2008 (a) 100 - - 31/10/2010 n/a
Note 1 (a) The amount of remuneration paid in the form of options issued was determined by the Board at its complete discretion having regard
to levels of remuneration paid within the exploration sector. Key management personnel receiving options under this series are only
entitled to receive the beneficial interest under the option if they continue to be employed with the Group at the time of exercise or
the options are exercised within 3 months of that person ceasing to be an employee or officer of the Group. The share options
vested immediately at grant date.
All options were issued by APAC Coal Limited and entitle the holder to 1 ordinary share in APAC Coal Limited for each option exercised.
There have not been any alterations of terms or conditions of any grants since grant date.
Options and Rights Granted
The Group's corporate governance policies and procedures restrict any person from limiting his or her exposure to the risk in respect of share
options issued as part of remuneration by the Group.
For the financial year ended 30 June 2009

Grant Details
Value Exercised Exercised
Date No. $ No. $
Kuan Yew Lim 14/10/2008 1,000,000 4,400 - -
8
For the financial year ended 30 June 2009 Overall

Lapsed Vested Unvested Lapsed
Lapsed No. $ Vested No. % % %
Kuan Yew Lim - - 1,000,000 100 - -
No options were exercised by directors or executives during the year.

Description of Options/Rights Issued as Remuneration
Details of the options granted as remuneration to those key management personnel and executives listed in the previous table are as follows:
Value per Amt Paid /

Exercise option at grant Payable by
Dates Price date recipient
Grant Date Issuer Entitlement on exercise Exercisable cents cents cents
From Vesting
date to
31/10/2007 APAC Coal Limited 1:1 Ordinary Shares in APAC 31/10/2010 25 0.18 -
From Vesting
date to
14/10/2008 APAC Coal Limited 1:1 Ordinary Shares in APAC 31/10/2010 25 0.01 -
Option values at grant date were determined using the Black Scholes method.
Details relating to service and performance criteria required for vesting have been provided in the previous table.
Key Terms of employment contracts

Executives
The Group has entered into a Management and Consultancy Agreement with Magnus Energy Group Limited ("Magnus") under which the services
of TK Koh as Managing Director are provided. The initial term of the agreement is for 12 months from 4th April 2008, and amounts payable
comprise $10,000 per month for the services of TK Koh and $5,000 for administrative and financial services.
Amounts are payable from the 10 July 2008. The agreement may be terminated by the Group with 3 months written notice or 1 months notice in
the event of Magnus entering into liquidation or there being a serious breach of the agreement.
Non Executives
Non executive directors are retained by a letter of appointment. Under the Group's Constitution, the non executive directors are entitled to be paid
such remuneration as is authorised by an ordinary resolution of the Group in general meeting. The current limit is $250,000 to be divided between
the non executive directors as directors fees. The Chairman's fees are $50,000 per annum and other non executive directors' fees are $30,000
per annum. There are no provisions for termination payments under the letters of appointment. Appointments are continuous until the director
resigns from office, is not re-elected by shareholders or is removed by a resolution of the Group.
This Report of the Directors’, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors made
pursuant to s.298(2) of the Corporations Act 2001.
Director Paul Piercy

Chairperson
Dated this 30 September 2009
9
INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2009
Consolidated Group Parent Entity
Note 2009 2008 2009 2008
$ $ $ $
Revenue 2 305,399 - 305,051 -
Other income 2 - 1,233 18,000 1,233
Administration expenses 3 (2,106,080) (55,078) (1,224,604) (55,078)
Travel and accommodation (64,017) (65,746) (64,017) (65,746)
Share based payments (4,400) (11,088) (4,400) (11,088)
Finance costs 3 (4,263) (734) (1,093) (734)
Other expenses - (64) - (64)
Loss before income tax 4 (1,873,361) (131,477) (971,063) (131,477)
Income tax expense 4 - - - -
Loss attributable to members of the parent entity (1,873,361) (131,477) (971,063) (131,477)
Loss per share

Basic and diluted (cents per share) 16 (0.75) (3.88)
The accompanying notes form part of these financial statements.
11
BALANCE SHEET AS AT 30 JUNE 2009
Note 2009 2008 2009 2008
$ $ $ $
ASSETS
CURRENT ASSETS
Cash and cash equivalents 7 4,590,470 6,724,168 4,494,702 6,724,168
Trade and other receivables 8 92,047 358,198 130,714 358,198
TOTAL CURRENT ASSETS 4,682,516 7,082,366 4,625,416 7,082,366
NON-CURRENT ASSETS
Property, plant and equipment 11 77,080 - - -
Exploration, Evaluation & Development 12 719,092 - - -
Other financial assets 9 - - 1,157,987 -
TOTAL NON-CURRENT ASSETS 796,172 - 1,157,987 -
TOTAL ASSETS 5,478,689 7,082,366 5,783,403 7,082,366
CURRENT LIABILITIES
Trade and other payables 13 940,989 796,946 464,646 796,946
Borrowings 14 5,190 - - -
TOTAL CURRENT LIABILITIES 946,179 796,946 464,646 796,946
NON-CURRENT LIABILITIES
Trade and other payables 13 25,568 - - -
Borrowings 14 14,933 - - -
TOTAL NON-CURRENT LIABILITIES 40,501 - - -
TOTAL LIABILITIES 986,680 796,946 464,646 796,946
NET ASSETS 4,492,008 6,285,420 5,318,757 6,285,420
EQUITY
Issued capital 15 6,394,067 6,394,067 6,394,067 6,394,067
Reserves 17 102,779 22,830 27,230 22,830
Accumulated losses (2,004,838) (131,477) (1,102,540) (131,477)
TOTAL EQUITY 4,492,008 6,285,420 5,318,757 6,285,420
12
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009
Share Capital
Partly Paid Share Based
Accumulated Translation
Note Ordinary Ordinary Payment Total
losses Reserve
Shares Reserve
$ $ $ $ $
Consolidated Group
Balance at 1 July 2007 2 - - - - 2
Loss attributable to members of parent entity - - (131,477) - - (131,477)
Total recognised income/(expense) for the
period - - (131,477) - - (131,477)
Recognition of share base payments - - - 22,830 - 22,830

Issue of share 7,920,129 - - - - 7,920,129
Share issue costs (1,526,064) - - - - (1,526,064)
Balance at 30 June 2008 6,394,067 - (131,477) 22,830 - 6,285,420
Loss attributable to members of parent entity - - (1,873,361) - - (1,873,361)
Total recognised income/(expense) for the
period - - (1,873,361) - - (1,873,361)
Exchange differences on translation of
foreign operations - - - - 75,549 75,549
Balance at 30 June 2009 6,394,067 - (2,004,838) 27,230 75,549 4,492,008
Parent Entity
Balance at 1 July 2007 2 - - - - 2
Total income/(expense) for the period - - (131,477) - - (131,477)
Issue of share 7,920,129 - - - - 7,920,129
Share issue costs (1,526,064) - - - - (1,526,064)
Dividends paid or provided for - - - - - -
Balance at 30 June 2008 6,394,067 - (131,477) 22,830 - 6,285,420
Total income/(expense) for the period - - (971,063) - - (971,063)
Recognition of share base payments 4,400 - 4,400
Balance at 30 June 2009 6,394,067 - (1,102,540) 27,230 - 5,318,757
13
CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2009
Note 2009 2008 2009 2008
$ $ $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received 272,873 - 272,526 -
Payments to suppliers and employees (1,432,437) (225,852) (642,201) (225,852)
Finance costs (4,263) (734) (1,093) (734)
Income tax paid - - - -
Net cash used in operating activities 20(a) (1,163,827) (226,586) (370,768) (226,586)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash inflow from acquisition of subsidiary 21,612 - - -
Purchase of property, plant and equipment (61,747) - - -
Exploration, Evaluation & Development expenditure (607,763) (252,882)
Loans to subsidiaries - - (1,114,804) -
Net cash from/(used in) investing activities (647,898) - (1,367,686) -
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 10(b) 226,000 7,593,401 226,000 7,593,401
Proceeds from borrowings 20,842 - - -
Loans from ultimate parent 148,915 - - -
Repayment of borrowings (718) (642,649) - (642,649)
Payment for share issue costs (717,012) - (717,012) -
Net cash provided from/(used in) financing activities (321,973) 6,950,752 (491,012) 6,950,752
Net increase in cash held (2,133,698) 6,724,166 (2,229,466) 6,724,166
Cash at beginning of financial year 6,724,168 2 6,724,168 2
Cash at end of financial year 7 4,590,470 6,724,168 4,494,702 6,724,168
14
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009
This financial report includes the consolidated financial statements and notes of APAC Coal Limited and controlled entities (‘Consolidated Group’ or ‘Group’), and the
separate financial statements and notes of APAC Coal Limited as an individual parent entity (‘Parent Entity’).
Note 1 Statement of Significant Accounting Policies
Statement of Compliance
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards (including Australian Accounting
Interpretations) of the Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information
about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Parent Entity and
the Group also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented
below and have been consistently applied unless otherwise stated.
The financial statements were authorised for issue by the directors on 30th September 2009.
Basis of Preparation
The financial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and financial instruments. Cost is based
on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise stated.
(a) Principles of Consolidation
A controlled entity is any entity over which APAC Coal Limited has the power to govern the financial and operating policies so as to obtain benefits from its
activities. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are considered.
A list of controlled entities is contained in Note 10 to the financial statements.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for
the year then ended. Where controlled entities have entered (left) the Consolidated Group during the year, their operating results have been included (excluded)
from the date control was obtained (ceased).
All inter-group balances and transactions between entities in the Consolidated Group, including any unrealised profits or losses, have been eliminated on
consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the Parent Entity.
Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity interests held by persons outside the group, are
shown separately within the Equity section of the consolidated Balance Sheet and in the consolidated Income Statement.
Business Combinations
Business combinations occur where control over another business is obtained and results in the consolidation of its assets and liabilities. All business
combinations, including those involving entities under common control, are accounted for by applying the purchase method. The purchase method requires an
acquirer of the business to be identified and for the cost of the acquisition and fair values of identifiable assets, liabilities and contingent liabilities to be determined
as at acquisition date, being the date that control is obtained. Cost is determined as the aggregate of fair values of assets given, equity issued and liabilities
assumed in exchange for control together with costs directly attributable to the business combination. Any deferred consideration payable is discounted to
present value using the entity’s incremental borrowing rate.
Goodwill is recognised initially at the excess of cost over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities
recognised. If the fair value of the acquirer’s interest is greater than cost, the surplus is immediately recognised in profit or loss.
(b) Income Tax
The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or
substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are
credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No
deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting
or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based
on tax rates enacted or substantively enacted at reporting date. Their measurement also reflects the manner in which management expects to recover or settle
the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be
available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not
recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and
settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where
it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant
amounts of deferred tax assets or liabilities are expected to be recovered or settled.
(c) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment
Plant and equipment
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The
recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in determining recoverable amounts.
The cost of fixed assets constructed within the Consolidated Group includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of
fixed and variable overheads.
15
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the
income statement during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated on a straight line basis
over the asset's useful life to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the
shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset Depreciation Rate
Plant and equipment 12.50%
Leased plant and equipment 12.50%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the income statement.
When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.
(d) Exploration and development Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried
forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a
stage that permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of
the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest
Costs of site restoration are provided over the life of the facility from when exploration commences and are included in the costs of that stage. Site restoration
costs include the dismantling and removal of mining plant equipment and building structures, waste removal, and rehabilitation of the site in accordance with
clauses of the mining permits. Such costs have been determined using estimates of future costs, current legal requirements and technology on an discounted
Any changes in the estimates of the costs are accounted on a prospective basis. In determining the costs of site restoration, there is uncertainty regarding the
nature and extent of the restoration due to community expectations and future legislation. Accordingly the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
(e) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to
entities in the Consolidated Group, are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value
of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the
lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses on a straight-line basis over
the lease term.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.
(f) Financial Instruments
Initial Recognition and Measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is
equivalent to the date that the Company commits itself to either purchase or sell the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified ‘at fair value through profit or loss’ in
which case transaction costs are expensed to profit or loss immediately.
Classification and Subsequent Measurement
Financial instruments are subsequently measured at either fair value, amortised cost using the effective interest rate method or cost. Fair value represents the
amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market
are used to determine fair value. In other circumstances, valuation techniques are adopted.
Amortised cost is calculated as: (i) the amount at which the financial asset or financial liability is measured at initial recognition; (ii) less principal repayments; (iii)
plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using theeffective
interest rate method ; and (iv) less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts
estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be
reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected
future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards
specifically applicable to financial instruments.
16
(i) Financial assets at fair value through profit or loss

Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short term profit taking, derivatives not
held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial
assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets
are subsequently measured at fair value with changes in carrying value being included in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently
measured at amortised cost.
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the Group’s intention to
hold these investments to maturity. They are subsequently measured at amortised cost.
(iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not capable of being classified into other categories of financial assets due to
their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor
fixed or determinable payments.
(v) Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted
securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.
Impairment
At each reporting date, the Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale
financial instruments, significant or a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen. Impairment
losses are recognised in the income statement.
Financial Guarantees
Where material, financial guarantees issued, which require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified
debtor fails to make payment when due, are recognised as a financial liability at fair value on initial recognition. The guarantee is subsequently measured at the
higher of the best estimate of the obligation and the amount initially recognised less, when appropriate, cumulative amortisation in accordance with AASB 118:
Revenue. Where the entity gives guarantees in exchange for a fee, revenue is recognised under AASB 118.
The fair value of financial guarantee contracts has been assessed using the probability weighted discounted cash flow approach. The probability has been based on:
– the likelihood of the guaranteed party defaulting in a year’s period;
– the proportion of the exposure that is not expected to be recovered due to the guaranteed party defaulting; and
– the maximum loss exposed if the guaranteed party were to default.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no
longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related
obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another
party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
(g) Impairment of Assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets
have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use,
is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the income statement, unless the
asset is carried at revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
(h) Intangibles
Goodwill
Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business combination exceeds the fair value attributed to the interest in the
net fair value of identifiable assets, liabilities and contingent liabilities at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on
acquisition of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses
on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
(i) Foreign Currency Transactions and Balances

Functional and presentation currency
The functional currency of each Group entity is measured using the currency of the primary economic environment in which that entity operates. The consolidated
financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency
monetary items are translated at the year end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the
date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the income statement, except where deferred in equity as a qualifying cash
flow or net investment hedge.
Exchange difference arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in
equity, otherwise the exchange difference is recognised in the income statement.
17
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s presentation currency are translated as
follows:
— Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date.
— Income and expenses are translated at average exchange rates for the period.
— Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency translation reserve in the balance sheet.
These differences are recognised in the income statement in the period in which the operation is disposed.
(j) Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits that are
expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than
one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. Those cashflows are discounted using
market yields on national government bonds with terms to maturity that match the expected timing of cashflows.
Contributions to defined contribution superannuation plans are expensed when employees have rendered services entitling them to the contributions.
(k) Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic
benefits will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at balance date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value
of those cashflows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset
if it is virtually certain that reimbursement will be received and the amount of the receivable can be reassured reliably.
(l) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three
months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.
(m) Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any
consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar
arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets is the rate inherent in the instrument. Dividend
revenue is recognised when the right to receive a dividend has been established.
Dividend received from associates and joint venture entities are accounted for in the consolidated financial statements in accordance with the equity method of
(n) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their
intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
(o) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Tax Office. In
these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as
operating cash flows.
(p) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
(q) Critical Accounting Estimates and Judgments
In the application of the Company's accounting policies, management is required to make judgements, estimates and assumptions about carrying values of
assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experiences and other
factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to the accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects the current and future periods.
Judgements made by management in the application of A-IFRS that have significant effects on the financial statements and estimates with a significant risk of
material adjustments in the next year are disclosed, where applicable, in the relevant note to the financial statements.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are
impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated
future cash flows of the investment have been impacted. For financial assets carried at amortised cost, the amount of the impairment is the difference between
the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the
carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account.
Subsequent recoveries of amounts previously written off are credited against the allowance accounts. Changes in the carrying amount of the allowance account
are recognised in profit or loss.
The company measures the cost of equity settled transactions with directors and employees by reference to the fair value of the equity instruments at the date at
which they are granted. The fair value is determined by using a Black Scholes model using the assumptions detailed in Note 24.
(r) New Accounting Standards for application in future periods
The AASB has issued new, revised and amended Standards and Interpretations that have mandatory application dates for future reporting periods and which the
group has decided not to early adopt. A discussion of those future requirements and their impact on the Group is as follows:
18
● AASB 3: Business Combinations, AASB 127: Consolidated and Separate Financial Statements, AASB 2008–3: Amendments to Australian Accounting
Standards arising from AASB 3 and AASB 127 [AASB Standards 1, 2, 4, 5, 7, 101, 107, 112, 114, 116, 121, 128, 131, 132, 133, 134, 136, 137, 138 and
139 and Interpretations 9 and 107] (applicable for annual reporting periods commencing from 1 July 2009) and AASB 2008–7: Amendments to Australian
Accounting Standards — Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate [AASB 1, AASB 118, AASB 121, AASB 127 and
AASB 136] (applicable for annual reporting periods commencing from 1 January 2009). These Standards are applicable prospectively and so will only
affect relevant transactions and consolidations occurring from the date of application. In this regard, the impact on the group is not able to be determined.
– acquisition costs incurred in a business combination will no longer be booked to goodwill but will be expensed unless the cost relates to issuing debt
or equity securities
– contingent consideration will be measured at fair value at the acquisition date and may only be provisionally accounted for during a period of 12
months after acquisition
– a gain or loss of control will require the previous ownership interests to be remeasured to their fair value
– there shall be no gain or loss from transactions affecting a parent’s ownership interest of a subsidiary with all transactions required to be accounted for
through equity (this will not represent a change to the Group’s policy)
– dividends declared out of pre-acquisition profits will not be deducted from the cost of an investment but will be recognised as income
– impairment of investments in subsidiaries, joint ventures and associates shall be considered when a dividend is paid by the respective investee
– where there is in substance no change to Group interests, parent entities inserted above existing Group’s shall measure the cost of its investments at
the carrying amount of its share of the equity items shown in the balance sheet of the original parent at the date of reorganisation
The group will need to determine whether to maintain its present accounting policy of calculating goodwill acquired based on the parent’s share of net
assets acquired or change so that goodwill recognised will also reflect that of the non-controlling interest.
●
AASB 8: Operating Segments and AASB 2007–3: Amendments to Australian Accounting Standards arising from AASB 8 [AASB 5, AASB 6, AASB 102,
AASB 107, AASB 119, AASB 127, AASB 134, AASB 136, AASB 1023 and AASB 1038] (applicable for annual reporting periods commencing from 1
January 2009). This Standard replaces AASB 114 and requires identification of operating segments on the basis of internal reports that are regularly
reviewed by the group’s board for the purposes of decision making. Whilst the impact of this Standard cannot be assessed at this stage, there is the
potential for more segments to be identified. Given the lower economic level at which segments may be defined, and the fact that cash-generating units
cannot be bigger than operating segments, impairment calculations may be affected. Management presently do not believe impairment will result however.
● AASB 101: Presentation of Financial Statements, AASB 2007–8: Amendments to Australian Accounting Standards arising from AASB 101, and AASB
2007–10: Further Amendments to Australian Accounting Standards arising from AASB 101 (all applicable to annual reporting periods commencing from 1
January 2009). The revised AASB 101 and amendments supersede the previous AASB 101 and redefine the composition of financial statements including
the inclusion of a statement of comprehensive income. There will be no measurement or recognition impact on the group. If an entity has made a prior
period adjustment or reclassification, a third balance sheet as at the beginning of the comparative period will be required.
● AASB 123: Borrowing Costs and AASB 2007–6: Amendments to Australian Accounting Standards arising from AASB 123 [AASB 1, AASB 101, AASB 107,
AASB 111, AASB 116 and AASB 138 and Interpretations 1 and 12] (applicable for annual reporting periods commencing from 1 January 2009). The revised
AASB 123 has removed the option to expense all borrowing costs and will therefore require the capitalisation of all borrowing costs directly attributable to
the acquisition, construction or production of a qualifying asset. Management has determined that there will be no effect on the group as a policy of
capitalising qualifying borrowing costs has been maintained by the group.
● AASB 2008–1: Amendments to Australian Accounting Standard — Share-based Payments: Vesting Conditions and Cancellations [AASB 2] (applicable for
annual reporting periods commencing from 1 January 2009). This amendment to AASB 2 clarifies that vesting conditions consist of service and
performance conditions only. Other elements of a share-based payment transaction should therefore be considered for the purposes of determining fair
value. Cancellations are also required to be treated in the same manner whether cancelled by the entity or by another party.
● AASB 2008–2: Amendments to Australian Accounting Standards — Puttable Financial Instruments and Obligations arising on Liquidation [AASB 7, AASB
101, AASB 132 and AASB 139 and Interpretation 2] (applicable for annual reporting periods commencing from 1 January 2009). These amendments
introduce an exception to the definition of a financial liability, to classify as equity instruments certain puttable financial instruments and certain other
financial instruments that impose an obligation to deliver a pro rata share of net assets only upon liquidation.
● AASB 2008–5: Amendments to Australian Accounting Standards arising from the Annual Improvements Project (applicable for annual reporting periods
commencing from 01 January 2009) and AASB 2008–6: Further Amendments to Australian Accounting Standards arising from the Annual Improvements
Project (applicable for annual reporting periods commencing from July 1 2009) detail numerous non-urgent but necessary changes to Accounting Standards
arising from the IASB’s annual improvements project. No changes are expected to materially affect the group.
● AASB 2008–8: Amendments to Australian Accounting Standards — Eligible Hedged Items [AASB 139] (applicable for annual reporting periods commencing
from 1 July 2009. This amendment clarifies how the principles that determine whether a hedged risk or portion of cash flows is eligible for designation as a
hedged item should be applied in particular situations and is not expected to materially affect the group.
● AASB 2008–13: Amendments to Australian Accounting Standards arising from AASB Interpretation 17 — Distributions of Non-cash Assets to Owners
[AASB 5 and AASB 110] (applicable for annual reporting periods commencing from 1 July 2009). This amendment requires that non-current assets held for
distribution to owners be measured at the lower of carrying value and fair value less costs to distribute.
● AASB Interpretation 15: Agreements for the Construction of Real Estate (applicable for annual reporting periods commencing from 1 January 2009). Under
the Interpretation, agreements for the construction of real estate shall be accounted for in accordance with AASB 111 where the agreement meets the
definition of ‘construction contract’ per AASB 111 and when the significant risks and rewards of ownership of the work in progress transfer to the buyer
continuously as construction progresses. Where the recognition requirements in relation to construction are satisfied but the agreement does not meet the
definition of ‘construction contract’, revenue is to be accounted for in accordance with AASB 118. Management does not believe that this will represent a
change of policy to the group.
● AASB Interpretation 16: Hedges of a Net Investment in a Foreign Operation (applicable for annual reporting periods commencing from 1 October 2008).
Interpretation 16 applies to entities that hedge foreign currency risk arising from net investments in foreign operations and that want to adopt hedge
accounting. The Interpretation provides clarifying guidance on several issues in accounting for the hedge of a net investment in a foreign operation and is
not expected to impact the group.
● AASB Interpretation 17: Distributions of Non-cash Assets to Owners (applicable for annual reporting periods commencing from 1 July 2009). This
guidance applies prospectively only and clarifies that non-cash dividends payable should be measured at the fair value of the net assets to be distributed,
where the difference between the fair value and carrying value of the assets is recognised in profit or loss.
● AASB 2009-2: Amendments to Australian Accounting Standards - Improving Disclosures about Financial Instruments (applicable for annual reporting
periods commencing from 1 July 2009). No material impact on the Group is expected.
● AASB 2009-4: Amendments to Australian Standards arising from the Annual Improvements Project (applicable for annual reporting periods commencing
from 1 July 2009). No material impact on the Group is expected.
● AASB 2009-5: Further Amendments to Australian Standards arising from the annual Improvements Project (applicable 1 July 2010). The Group has not yet
determined the extent of the impact of the amendments, if any, as the application date is not yet in effect.
The Group does not anticipate early adoption of any of the above reporting requirements and does not expect them to have any material effect on the Group’s
financial statements.
19
(s) Share-based payments

Equity-settled share-based payments with employees and others providing similar services are measured at the fair value of the equity instrument at the grant
date. Fair value is determined by using a Black Scholes model using the assumptions detailed in Note 24. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the
Company's estimate of shares that will eventually vest.
Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services received, except where the fair value
cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the
goods or the counterpart renders the service. For cash settled share-based payments a liability equal to the portion of the goods or services received is
recognised at the current fair value determined at each reporting date.
(t) Segment information
The Company operates in one business segment being the exploration and evaluation of mineral resources and in one geographical segment being Indonesia.
Note 2 Revenue and Other Income
2009 2008 2009 2008
Note $ $ $ $
Other revenue
— interest received 2(a) 305,399 - 305,051 -
Total sales revenue and other revenue 305,399 - 305,051 -
Other income
— other income - 1,233 18,000 1,233
Total other Income - 1,233 18,000 1,233
(a) Interest revenue from:

— other persons 305,399 - 305,051 -
Total interest revenue on financial assets not at fair value through profit or loss 305,399 - 305,051 -
Note 3 Profit before Income Tax

2009 2008 2009 2008
$ $ $ $
Expenses
Interest expense on financial liabilities not at fair value through profit or
— external 4,263 734 1,093 734
Total interest expense 4,263 734 1,093 734
Personnel expense 487,529 12,636 156,362 -
Legal fees 269,360 - 202,842 -
Professional fees 366,653 37,226 352,028 -
Management fees 175,820 - 175,820 -
Exploration expenditure written off 260,970 - 68,970 -
Foreign exchange translation loss/(gain) 85,933 (1,233) 119,046 (1,233)
Depreciation Expense 12,698 - - -
Rental expense on operating leases
— contingent rentals 83,468 - - -
Note 4 Income Tax Expense

2009 2008 2009 2008
Note $ $ $ $
(a) The components of tax expense comprise:
Current tax - - - -
Deferred tax - - - -
Recoupment of prior year tax losses - - - -
Under provision in respect of prior years - - - -
- - - -
(b) The prima facie income tax expense on pre-tax accounting loss from
tax is reconciled to the income tax as follows:
Loss from operations (1,868,962) (131,477) (966,664) (131,477)

Income tax benefit calculated at 30% (560,689) (39,443) (289,999) (39,443)
Effect of expenses that are not deductible in determining taxable - (3,326) - (3,326)
Effect of unused tax losses and tax offsets that do not meet the
recognition criteria for a deferred tax asset (560,689) (36,117) (289,999) (36,117)
- - - -
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law.
There has been no change in the corporate tax rate when compared with the previous reporting period.
Unrecognised deferred tax assets
The following deferred tax assets have not been brought to account
as assets:
Tax losses 596,806 36,117 326,116 36,117
20
Note 5 Key Management Personnel Compensation

(a) Aggregate remuneration paid to key personnel
Group and Parent Entity

Short-term Benefits Post Employment Benefit Share Based Payments Total
$ $ $ $
2009
Total compensation 160,425 12,883 4,400 177,708
2008
Total compensation 102,750 - 11,088 113,838
(b) Option holdings of Key Management Personnel
Balance at
beginning of Balance at end
period 01 July Granted as Options Net Change of period 30
2008 Remuneration Exercised Other June 2009
Directors
Paul Piercy 2,000,000 - - - 2,000,000
TK Koh 1,300,000 - - - 1,300,000
Sam Di Giacomo 1,000,000 - - - 1,000,000
Maurice Drew 1,000,000 - - - 1,000,000
Shyun Kon 1,000,000 - - - 1,000,000
Kuan Yew Lim - 1,000,000 - - 1,000,000
Total 6,300,000 1,000,000 - - 7,300,000
Balance at
period 01 July Granted as Options Net Change of period 30
2007 Remuneration Exercised Other June 2008
Directors
Paul Piercy - 2,000,000 - - 2,000,000
TK Koh - 1,300,000 - - 1,300,000
Sam Di Giacomo - 1,000,000 - - 1,000,000
Maurice Drew - 1,000,000 - - 1,000,000
Shyun Kon - 1,000,000 - - 1,000,000
Kuan Yew Lim - - - - -
Total - 6,300,000 - - 6,300,000
(c) Shareholdings of Key Management Personnel

Balance at
period 01 July Granted as On Exercise of Net Change of period 30
2008 Remuneration Options Other June 2009
Directors
Paul Piercy - - - - -
TK Koh - - - - -
Sam Di Giacomo 200,000 - - (50,000) 150,000
Maurice Drew - - - - -
Shyun Kon - - - - -
Total 200,000 - - (50,000) 150,000
Balance at
period 01 July Granted as On Exercise of Net Change of period 30
2007 Remuneration Options Other June 2008
Directors
Paul Piercy - - - - -
TK Koh - - - - -
Sam Di Giacomo - - - 200,000 200,000
Maurice Drew - - - - -
Shyun Kon - - - - -
Total - - - 200,000 200,000
Net Other Change represents the purchase and sale of shares on-market. All options vest immediately on granting and are immediately exercisable.
No options have been exercised.
(d) Loans to Key Management Personnel
(i) Details of aggregates of loans to key management personnel are as follows:
No directors or executives had any loans during the reporting period.
(e) Other transactions and balances with Key Management Personnel
There were no other transactions and balances with key management personnel.
21
Note 6 Auditors’ Remuneration

2009 2008 2009 2008
$ $ $ $
Remuneration of the auditor of the parent entity for:
— auditing or reviewing the financial report 69,572 54,250 42,500 54,250
— taxation services 14,538 - 14,538 -
— Investigating Accountants' Report - 20,000 - 20,000
84,110 74,250 57,038 74,250
Remuneration of other auditors of subsidiaries for:
— auditing or reviewing the financial report of subsidiaries 27,072 - - -
Note 7 Cash and Cash Equivalents
2009 2008 2009 2008
CURRENT Note $ $ $ $
Cash at bank and in hand 190,470 6,724,168 94,702 6,724,168
Short-term bank deposits 4,400,000 - 4,400,000 -
4,590,470 6,724,168 4,494,702 6,724,168
Reconciliation of cash
Cash at the end of the financial year as shown in the cash flow statement is
reconciled to items in the balance sheet as follows:
Cash and cash equivalents 4,590,470 6,724,168 4,494,702 6,724,168
4,590,470 6,724,168 4,494,702 6,724,168
Note 8 Trade and Other Receivables

2009 2008 2009 2008
Note $ $ $ $
CURRENT
Trade receivables 11,668 - 11,668 -
Other receivables 80,379 358,198 119,046 358,198

Total current trade and other receivables 92,047 358,198 130,714 358,198
(a) Provision For Impairment of Receivables

Current trade and term receivables are non-interest bearing and generally on 30-day terms. Non-current trade and term receivables are assessed for
recoverability based on the underlying terms of the contract. A provision for impairment is recognised when there is objective evidence that an individual trade or
term receivable is impaired. These amounts are included in the other expenses item. No non-current trade and term receivables were assessed as impaired as
at 30 June 2009 and 30 June 2008.
Credit risk
The Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties. The main source of credit risk to the
Group is considered to relate to the class of assets described as Trade and Other Receivables."
(b) Financial Assets classified as loans and receivables

2009 2008 2009 2008
Note $ $ $ $
Trade and other Receivables
— Total Current 92,047 358,198 130,714 358,198
Note 9 Other Financial Assets

2009 2008 2009 2008
$ $ $ $
NON-CURRENT
Loan to subsidiary - - 1,157,987 -
The terms for the amounts payable from subsidiaries are unsecured, interest free and repayable on demand.
The net asset position of the consolidated entity is lower than that of the Company. This position is a result of the loan in the
subsidiary being deemed recoverable despite the insufficient net assets of the subsidiary. The insufficient net assets arise as the
exploration expenditure incurred by the subsidiary is being partially expensed. Management believe it would be misleading to impair
the loan receivable and believe that the recovery of this amount will satisfactorily be made through the exploitation of the
subsidiary’s projects in due course.
Note 10 Controlled Entities

(a) Controlled Entities Consolidated Country of Incorporation Percentage Owned (%)*
2009 2008
Subsidiaries of APAC Coal Limited:
PT Deefu Chemical Indonesia Indonesia 99.33 -
PT Batubara Selarus Sapata Indonesia 95 -
* Percentage of voting power in proportion to ownership
22
(b) Acquisition of Controlled Entities

On 10th of July 2008 APAC Coal Limited completed the acquisition of PT Deefu and PT Batubara Selarus Sapta pursuant to Share Sale Agreements between
APAC and the vendors of those companies. The acquisition of subsidiaries was deemed to be a transaction of no economic substance and accordingly, the
provisions of AASB 3 Business Combinations did not apply. The principle activities of these subsidiaries is the exploration, mining and extraction of coal. The
Group has determined to account for the combination and restructure based on the existing book values of the entities involved in the combination. The assets,
liabilities and contingent liabilities of the combining entities were therefore stated at book value at the date of the restructure and combination.
The net assets acquired are as follows:
2008
$
Cash and cash equivalents 21,612
Trade and other receivables 9,063
Property, plant & equipment 24,766
Exploration expenditure 378,484
Trade and other payables (384,925)
Total consideration, satisfied by shares (1) 49,000
(1) As discussed in the annual financial report for the period ended 30 June 2008 the shares (200,000,000) were issued as at 30 June 2008 and held in trust. The
shares were disclosed within equity as at 30 June 2008. As the acquisition of PT Deefu and PT Batubara Selaras was dependent on the successful listing of
APAC which occurred subsequent to 30 June 2008, the acquisition was completed and recorded on 10 July 2008.
Note 11 Property, Plant and Equipment
2009 2008 2009 2008
$ $ $ $
PLANT AND EQUIPMENT
Plant and equipment:
At cost 63,126 - - -
Accumulated depreciation (12,420) - - -
Accumulated impairment losses - - - -
50,706 - - -
Leased plant and equipment:
Capitalised leased assets 26,652 - - -
Accumulated depreciation (278) - - -
26,374 - - -
Total Plant and Equipment 77,080 - - -

Total Property, Plant and Equipment 77,080 - - -
(a) Movements in Carrying Amounts

Movement in the carrying amounts for each class of property, plant and
equipment between the beginning and the end of the current financial year
Plant and Leased Plant
Freehold Land Buildings Equipment and Total
$ $ $ Equipment $
Consolidated Group:
Balance at 1 July 2007 - - - - -
Additions - - - - -
Disposals - - - - -
Additions through acquisition of entity - - - - -
Revaluation increments/(decrements) - - - - -
Depreciation expense - - - - -
Capitalised borrowing cost and depreciation - - - - -
Balance at 30 June 2008 - - - - -
Additions - - 38,360 26,652 65,012
Disposals - - - - -
Additions through acquisition of entity - - 24,766 - 24,766
Revaluation increments/(decrements) - - - - -
Depreciation expense - - (12,420) (278) (12,698)
Capitalised borrowing cost and depreciation - - - - -
Carrying amount at 30 June 2009 - - 50,706 26,374 77,080
Parent Entity does not hold any property, plant and equipment.
Note 12 Exploration, Evaluation and Development
Exploration, Evaluation & Development 2009 2008 2009 2008
$ $ $ $
Professional fee for Amdal and Exploration 342,940 - - -

Preliminary exploration 297,000 - - -
Feasibility studies 39,000 - - -
Land Rights 40,152 - - -
719,092 - - -
Impairment Disclosures
A regular review is undertaken to determine the appropriateness of continuing to carry forward costs incurred in exploration, evaluation and development. These
costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have
not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.
23
Note 13 Trade and Other Payables

2009 2008 2009 2008
Note $ $ $ $
CURRENT
Unsecured liabilities
Sundry payables and accrued expenses 450,788 771,578 260,103 771,578
Amounts payable to:
— ultimate parent entity 490,201 25,368 204,543 25,368
13(a) 940,989 796,946 464,646 796,946
NON-CURRENT
Unsecured liabilities
Sundry payables and accrued expenses 13 (a) 25,568 - - -
The terms for the amounts payable to the ultimate parent entity are unsecured, interest-free and repayable on demand.
(a) Financial liabilities at amortised cost classified as trade and other payables
Trade and other payables
— Total Current 940,989 796,946 464,646 796,946
— Total Non-Current 25,568 - - -
Financial liabilities as trade and other payables 23 966,556 796,946 464,646 796,946
Note 14 Borrowings
2009 2008 2009 2008
Note $ $ $ $
CURRENT
Lease liability 5,190 - - -
Total current borrowings 5,190 - - -
NON-CURRENT
Lease liability 14,933 - - -
Total non-current borrowings 14,933 - - -
Total borrowings 23 20,123 - - -
Note 15 Issued Capital

2009 2008 2009 2008
$ $ $ $
249,705,637 (2008:249,705,637) fully paid ordinary shares" 6,394,067 6,394,067 6,394,067 6,394,067
(a) Ordinary Shares

No. No. No. No.
Balance at the end of the financial period 249,705,637 249,705,637 249,705,637 249,705,637
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
The shares have no par value and none are authorised.
(b) Share options

Share options issued by the Group carry no rights to dividends and no voting rights.
As at June 2009, the group has 7,478,635 share options on issue (2008:6,478,635) exercisable on a 1:1 basis for 7,478,635 shares (June 2008: 6,478,635) at
various exercise prices. The options expire between 31/10/2010 and 10/07/2011. Further details of options granted to directors, employees and consultants are
contained in note 5 to the financial statements.
(c) Capital Management
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and to ensure that
the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, net of cash and cash equivalents.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the group’s financial risks and adjusting its capital structure in response to changes in these
risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the group since the prior year. The gearing ratios for the year
ended 30 June 2009 and 30 June 2008 are as follows:
2009 2008 2009 2008
Note $ $ $ $
Total borrowings 14 20,123 - - -
Trade and other payables 13 966,556 796,946 464,646 796,946
Less cash and cash equivalents 7 (4,590,470) (6,724,168) (4,494,702) (6,724,168)
Net debt (3,603,790) (5,927,222) (4,030,056) (5,927,222)
Total equity 4,492,008 6,285,420 5,318,757 6,285,420
Total capital 888,218 358,198 1,288,701 358,198
Gearing ratio N/A N/A N/A N/A
24
Note 16 Loss per share

Consolidated Consolidated
2009 2008
cents cents
Basic and diluted loss per share (0.75) (3.88)
Basic loss per share
The loss and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:
Consolidated Consolidated
2009 2008
$ $
Net loss (1,873,361) (131,477)
2009 2008
No No
Weighted average number of ordinary shares for the purposes of basic loss per share 249,705,637 3,450,000
Diluted loss per share
Diluted loss per share is the same as basic loss per share as the Group has incurred a loss for the year.
Note 17 Reserves
2009 2008 2009 2008
$ $ $ $
Foreign currency translation reserve 75,549 - - -
Share based payments reserve 27,230 22,830 27,230 22,830
102,779 22,830 27,230 22,830
Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from translation of the financial statements of subsidiaries.
Share-based payment reserve
The share-based payment reserve arises on the grant of share options to directors, employees and consultants. Amounts are transferred out of the reserve and
into issued capital when the options are exercised. Further information about share-based payments is made in note 24 to the financial statements.
Note 18 Capital and Leasing Commitments
2009 2008 2009 2008
Note $ $ $ $
(a) Finance Lease Commitments
Payable — minimum lease payments
— not later than 12 months 5,190 - - -
— between 12 months and five years 20,123 - - -
— greater than five years - - - -
Minimum lease payments 25,313 - - -
Less future finance charges -
Present value of minimum lease payments 14 20,123 - - -
The finance lease on a Motor Vehicle, which commenced in 2009, is a 3-
year lease. The car ownership loan facility has been arranged with PT
Dipo Star Finance and expires 10 May 2012. Lease agreement No.
0026551/1/01/06/2009.
(b) Operating Lease Commitments

Non-cancellable operating leases contracted for but not
capitalised in the financial statements
Payable — minimum lease payments
— not later than 12 months 20,000 - - -
— between 12 months and five years 4,000 - - -
24,000 - - -
The property lease is a non-cancellable lease from 01 September 2008 to
31 August 2010.
(c) Capital Expenditure Commitments
Capital expenditure commitments contracted for:
Plant and equipment purchases
Capital expenditure projects 149,662 - 108,416 -
149,662 - 108,416 -
Payable
— not later than 12 months 149,662 - 108,416 -
— between 12 months and five years - - - -
149,662 - 108,416 -
25
Note 19 Contingent Liabilities and Contingent Assets

There were no contingent liabilities or contingent assets at the year end.
Note 20 Cash Flow Information
2009 2008 2009 2008
$ $ $ $
(a) Reconciliation of Cash Flow from Operations
with Loss after Income Tax
Loss after income tax (1,873,361) (131,477) (971,063) (131,477)
Non-cash flows in profit
Share based payments 4,400 11,088 4,400 11,088
Foreign exchange loss/(gain) 85,933 - - -
Depreciation 12,698 - - -
0
Changes in assets and liabilities, net of the effects of purchase and

disposal of subsidiaries
(Increase)/decrease in trade and term debtors 226,214 (106,197) 246,806 (106,197)
(Increase)/decrease in other assets 954,646 - 860,565 -
(Increase)/decrease in inventories - - - -
Increase/(decrease) in payables (574,357) - (511,476) -
Increase/(decrease) in income taxes payable - - - -
Increase/(decrease) in deferred taxes payable - - - -
Increase/(decrease) in provisions - - - -
Net Cash from operating activities (1,163,827) (226,586) (370,768) (226,586)
(b) Proceeds relating to the issuance of certain shares as at 30 June 2008 were received in the current financial year. This resulted in a cash inflow of $226,000
only. There was no effect on share capital.
Note 21 Events After the Balance Sheet Date
There has not been any matter or circumstance occurring subsequent to the end of the financial year that has significantly affected, or may significantly affect, the
operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.
Note 22 Parent and Related Party Transactions

The Groups' parent and ultimate parent entity is Magnus Energy Group Limited, a company incorporated and listed in Singapore. The Group has an agreement with
Magnus Energy for the provision of the services of TK Koh as managing director and the provision of various administrative and financial reporting services from the
date of listing. The terms of this agreement are detailed in the Remuneration Report. Amounts payable to Magnus Energy at 30 June are disclosed in Note 13.
Amounts receivable from subsidiaries are disclosed in note 8 and 9.
Note 23 Financial Risk Management
The group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and payable,
loans to and from subsidiaries, bills and leases.
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial statements, are
as follows:
2009 2008 2009 2008
Note $ $ $ $
Financial Assets
Cash and cash equivalents 7 4,590,470 6,724,168 4,494,702 6,724,168
Loans and receivable 8 92,047 358,198 1,288,701 358,198
9,272,986 13,806,534 10,278,105 13,806,534
Financial Liabilities
Financial liabilities at amortised cost
— Trade and other payables 13(a) 966,556 796,946 464,646 796,946
— Borrowings 14 20,123 - - -
986,680 796,946 464,646 796,946
Financial Risk Management Policies
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk management policies are established to
identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group aim is to develop a disciplined and constructive
control environment in which all employees understand their roles and obligations.
The main purpose of non-derivative financial instruments is to raise finance for the Group and the Company operations. The Group and the Company does not have
any derivative instruments at 30 June 2009 and 30 June 2008.
Specific Financial Risk Exposures and Management
The main risks the Group and the Company is exposed to through its financial instruments are interest rate risk, liquidity risk, credit risk and foreign currency risk.
26
(a) Interest rate risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at reporting date whereby a future change in interest rates will affect
future cash flows or the fair value of fixed rate financial instruments.
Some of the Group's assets are subject to interest rate risk but the Group is not dependent on this income. Interest income is only incidental to the Company's
operations and operating cashflows and as such a sensitivity analysis has not been performed.
The Group's exposure to variable interest rates is as follows:

Consolidated Parent
2009 2008 2009 2008
$ $ $ $
Financial Assets
Cash and cash equivalents 4,400,000 6,724,168 4,400,000 6,724,168
(b) Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial
liabilities. 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 they fall
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 expected expenses for a period of 12 months, including the servicing of the financial
obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted such as natural disasters.
The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. There were no bank overdrafts as at 30 June 2009 and 30 June
2008.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed.
The timing of cash flows presented in the table to settle financial liabilities reflect the earliest contractual settlement dates and do not reflect management’s
expectations that banking facilities will roll forward.
Financial liability and financial asset maturity analysis
Consolidated Group Within 1 Year 1 to 5 years Over 5 years Total
2009 2008 2009 2008 2009 2008 2009 2008
Financial liabilities
$ $ $ $ $ $ $ $
due for payment
Trade and other
payables (excluding
est. annual leave) 940,989 505,532 25,568 - - - 966,557 505,532
Lease liabilities 5,190 - 14,933 - - - 20,123 -
Total contractual
outflows 946,179 505,532 40,501 - - - 986,680 505,532
Total expected
outflows 946,179 505,532 40,501 - - - 986,680 505,532
Financial Assets -
cash flows
Cash and cash
equivalents 4,590,470 6,724,168 - - - - 4,590,470 6,724,168
Trade, term and loan
receivables 92,047 358,198 - - - - 92,047 358,198
Total anticipated
inflows 4,682,517 7,082,366 - - - - 4,682,517 7,082,366
Net (outflow) / inflow
on financial
instruments 3,736,338 6,576,834 (40,501) - - - 3,695,837 6,576,834
Parent Entity Within 1 Year 1 to 5 years Over 5 years Total contractual cash flow
2009 2008 2009 2008 2009 2008 2009 2008
Financial liabilities
$ $ $ $ $ $ $ $
due for payment
Trade and other
payables (excluding
est. annual leave) 464,646 505,532 - - - - 464,646 505,532
Total contractual
outflows 464,646 505,532 - - - - 464,646 505,532
Total expected
outflows 464,646 505,532 - - - - 464,646 505,532
Financial Assets -
cash flows
Cash and cash
equivalents 4,494,702 6,724,168 - - - - 4,494,702 6,724,168
Trade, term and loan
receivables 130,714 358,198 - - - - 130,714 358,198
Total anticipated
inflows 4,625,416 7,082,366 - - - - 4,625,416 7,082,366
Net (outflow) / inflow
on financial
instruments 4,160,770 6,576,834 - - - - 4,160,770 6,576,834
27
(c) Foreign exchange risk

As a result of operations in Indonesia the Group's balance sheet can be affected by movements in IDR/AUD exchange rates.
The Group also has transactional currency exposures. Such exposure arises from sales or purchases by an operating entity in currencies other than the
functional currency.
(d) Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial
loss to the Group.
Credit risk is managed on a group basis and reviewed regularly by the Board of Directors. Credit risk is managed through maintaining procedures ensuring, to
the extent possible, that customers and counterparties to transactions are of sound credit worthiness and includes the utilisation of systems for the approval,
granting and renewal of credit limits, the regular monitoring of exposures against such limits and the monitoring of the financial stability of significant customers
and counterparties. Such monitoring is used in assessing receivables for impairment. Depending on the division within the Group, credit terms are generally 30
days from the date of invoice. Customers that do not meet the Group’s strict credit policies may only purchase in cash.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating or in entities that the Board of Directors has
otherwise cleared as being financially sound. Where the Group is unable to ascertain a satisfactory credit risk profile in relation to a customer or counterparty,
then risk may be further managed through title retention clauses over goods or obtaining security by way of personal or commercial guarantees over assets of
sufficient value which can be claimed against in the event of any default.
Credit Risk Exposures
The maximum exposure to credit risk by class of recognised financial assets at balance date, excluding the value of any collateral or other security held is
equivalent to the carrying value of those financial assets (net of any provisions) as presented in the balance sheet.
The Group has no significant concentration of credit risk with any single counterparty or group of counterparties. The Company's receivable from subsidiary
represents a significant concentration of credit risk for the Company.
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed at Note 8.
The Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the
Consolidated Group. The trade receivables balance at 30 June 2009 and 30 June 2008 do not include any counterparties with external credit ratings. Customers
are assessed for credit worthiness using the criteria detailed above.
(e) Price risk
The Group is not exposed to any material commodity price risk as at 30 June 2009 and 30 June 2008.
Net Fair Values
Fair value estimation
The fair value of financial assets and liabilities are determined as follows:
The fair values of financial assets and liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted
market prices. The fair value of short term money instruments are determined by reference to amounts determined by the Group's banks.
The directors consider that the carrying amounts of financial assets and financial liabilities recorded in the financial statements approximates their fair value.
Note 24 Share-based payments
Director share options
The Group has an Employee Share Option Plan ("ESOP") for directors, executives and employees of the Group. In accordance with the provisions of the ESOP,
directors, executives and employees ,can be granted options at the discretion of the directors.
Each employee share option converts into one ordinary share of APAC Coal Limited on exercise. No amounts are paid or payable by the recipient on receipt of
the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of expiry.
The number of options granted is at the sole discretion of the directors subject to the total number of outstanding options being issued under the ESOP not
exceeding 5% of the Group's issued capital at any one time.
The exercise price is calculated with reference to a formula contained within the rules governing the ESOP and which rewards employees against the extent of
the Group's performance on the capital markets. Where appropriate the directors have established appropriate vesting conditions to incentivise executives and
employees to remain in the employ of the Group.
Options issued to directors under the ESOP are subject to approval by shareholders and attach vesting conditions as appropriate.
Further details on share options granted as remuneration to directors are contained within the Remuneration Report and have been audited.
Other share based payment arrangements
The Group engaged Novus Capital Limited ("Novus') to act as the Sponsoring Broker to the Initial Public Offering for APAC Coal Limited. Part of the terms of
their appointment was the issue of shares and options upon the successful closure of the Initial Public Offering. The quantum of shares and options was to be
determined by reference to a formula contained in the mandate letter which specified that 1 share and 1 option were to be issued to Novus or its nominees for
every $40 raised under the IPO. On 30 of June 2008, the Group issued 178,635 shares and 178,635 options exercisable at 25 cents each on or before 10 July
2011 to nominees of Novus.
28
Share base payment arrangements in existence during the year

The following share-based payment arrangements were in existence during the current and comparative reporting periods
Fair value at
Exercise price grant date
Option Series Number Grant Date Expiry Date cents cents
31/10/2010 - Directors - A 6,300,000 31/10/2007 31/10/2010 25 0.18
31/10/2010 - Directors - B 1,000,000 14/10/2008 31/10/2010 25 0.01
30/06/2008 - Novus 178,635 30/06/2008 10/07/2011 25 6.57
There are no vesting conditions attached to the options.
The fair value of the share options as at 30 June 2009 is $27,224. Options were priced using a Black Scholes pricing model. Expected volatility is
based on the movement of the underlying share price around its average share price over the expected term of the options. The directors have
determined the expected period of exercise to be similar to the option life.
Options Series
Inputs into the model 31/10/2010 - A 31/10/2010 - B 30/06/2008
Granted date share price
(cents) 5 7.5 20
Exercise price (cents) 25 25 25
Expected Volatility 50% 75% 50%
Option Life 3 years 2 years 3 years
Dividend Yield - - -
Risk-free interest rate 6.50% 4.12% 6.80%
The following reconciles the outstanding share options granted as share based payments at the beginning and end of the financial year
2009 2008
Weighted Weighted
average average
Number of exercise price Number of exercise price
options cents options cents
Balance at beginning of the financial year 6,478,635 25 - -
Granted during the financial year 1,000,000 25 6,478,635 25
Balance at the end of the financial year 7,478,635 25 6,478,635 25
Exercisable at end of the financial year 7,478,635 25 6,478,635 25
Exercised during the financial year
No options were exercised during the year.
Balance at end of financial year
The share options outstanding at the end of the financial year had a weighted average remaining contractual life of 1.33 years
29
APAC COAL LIMITED
DIRECTORS’ DECLARATION
The directors of the company declare that:

1. The financial statements and notes, as set out on pages 11 to 29, are in accordance with the Corporations
Act 2001:
(a) comply with Accounting Standards; and
(b) give a true and fair view of the financial position as at 30 June 2009 and of the performance for the
year ended on that date of the company and consolidated group.
2. In the directors’ opinion there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Director
Paul Piercy
Dated this 30th day of September 2009
30
STATEMENT OF CORPORATE GOVERNANCE AS AT 30 JUNE 2009
APAC COAL LIMITED
The Board of Directors of APAC Coal Limited (APAC) is responsible for establishing the corporate governance framework of the consolidated entity
having regards to the ASX Corporate Governance Council published guidelines as well as its corporate governance principles and recommendations. The
Board guides and monitors the business affairs of APAC on behalf of the shareholders by whom they are elected and to whom they are accountable.
The table below summarises the Group's compliance with the Corporate Governance Council's Recommendations
Recommendation Comply Reference/
Yes/No Explanations
Principle 1: Lay solid foundations for management and oversight
1.1 Companies should establish the functions reserved to the Board and those delegated to senior executives and disclose those
functions. Yes Page 29
1.2 Companies should disclose the process for evaluation of the performance of senior executives. Yes Page 30
1.3 Companies should provide the information indicated in the Guide to reporting on Principle 1. Yes
Principle 2: Structure the Board to add value
2.1 A majority of the board should be independent directors. Yes Page 30
2.2 The chair should be an independent director. Yes Page 30
2.3 The roles of the chair and chief executive officer should not be exercised by the same individual. Yes Page 30
2.4 The board should establish a nomination committee. No Page 30
2.5 Companies should disclose the process for evaluating the performance of the board, its committees and individual directors. Yes Page 30
Principle 3: Promote ethical and responsible decision-making
3.1 Companies should establish a code of conduct and disclose the code or a summary of the code as to: Yes Website
- the practices necessary to maintain confidence in the Company's integrity Yes Page 30
- the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders Yes Page 30
- the responsibility and accountability of individuals for reporting and investigating reports of unethical practices. Yes Page 30
Companies should establish a policy concerning trading in company securities by directors, senior executives and
3.2 employees, disclose the policy or a summary of that policy Yes Page 30
Principle 4: Safeguard integrity in financial reporting
4.1 The board should establish an audit committee. Yes Page 30
4.2 The audit committee should be structured so that it: Yes Page 30
- consists only of non-executive directors Yes Page 30
- consists of a majority of independent directors Yes Page 30
- is chaired by an independent chair, who is not chair of the board Yes Page 30
4.3 The audit committee should have a formal charter Yes Website
Principle 5: Make timely and balanced disclosure
Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements
and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of
5.1 those policies. Yes Website
Principle 6: Respect the rights of shareholders
Companies should design a communications policy for promoting effective communication with shareholders and
6.1 encouraging their participation at general meetings and disclose their policy or a summary of that policy Yes Website
Principle 7: Recognise and Manage risk
7.1 Companies should establish policies for the oversight and management of material business risk and disclose a summary of
those policies. Yes Website
7.2 The board should require management to design and implement the risk management and internal control system to manage
the company's material business risks and report to it on whether those risks are being managed effectively. The board
should disclose that management has reported to it as to the effectiveness of the company's management of its material Yes Page 30
7.3 The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief
financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is
founded on a sound system of risk management and internal control and that the system is operating effectively in all
material respects in relation to financial reporting risks. Yes Page 30
Principle 8: Remunerate fairly and responsibly
8.1 The board should establish a remuneration committee. Yes Page 30
Companies should clearly distinguish the structure of non-executive directors' remuneration from that of executive directors
8.2 and senior executives. Yes Page 30
APAC Coal Limited's corporate governance practices were in place throughout the year ended 30 June 2009, unless otherwise stated. APAC Coal Limited complies
in all material respects with the Council's best practice recommendations.
Various corporate governance practices are discussed within this statement. For further information on corporate governance policies adopted by APAC Coal Limited
refer to our website.
www.apaccoal.com.
Board Function
The Board seeks to identify the expectations of the shareholders as well as other regulatory and ethical expectations and obligations. In addition, the Board is
responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks
To ensure that the Board is well equipped to discharge its responsibilities it has established guidelines for the nomination and selection of directors and for the
operation of the Board.
33
APAC COAL LIMITED
The responsibility for the operation and administration of the company is delegated, by the Board, to the Managing Director and the executive management team.
The role of senior management is to progress the strategic direction provided by the Board. In particular, the chief executive officer, or equivalent, is responsible for
the day-to-day activities of the Company in advancing the strategic direction.
Whilst at all times the Board retains full responsibility for guiding and monitoring the company, in discharging its stewardship it makes use of sub-committees.
Specialist committees are able to focus on a particular responsibility and provide informed feedback to the Board.
To this end the Board has established the following committees:
- Audit
- Remuneration
The roles and responsibilities of these committees are discussed throughout this Corporate Governance Statement.
A Nomination Committee has not been established as per recommendation 2.4 as the full Board performs the function of the Nomination Committee. The Board
believes due to the size of the Board and its stage of development that no efficiencies or other benefits could be gained by establishing a separate Nomination
Committee. To assist it to perform its Nomination Committee functions, the Board has adopted a Nomination Committee Charter which it applies during nomination
related discussions (available on the Company's website).
The Board is responsible for ensuring that management's objectives and activities are aligned with the expectations and risk identified by the Board. The Board has a
number of mechanisms in place to ensure this is achieved including:
- Board approval of a strategic plan designed to meet stakeholders' needs and manage business risk;
- ongoing development of the strategic plan and approving initiatives and strategies designed to ensure continued growth and success
of the entity; and
- implementation of budgets by management and monitoring progress against budgets - via the establishment and reporting of both
financial and non-financial key performance indicators.
Other functions reserved to the Board include:
- approval of annual and half year financial reports'
- approving and monitoring the progress of major capital expenditure, capital management, and acquisitions and divestitures;
- ensuring any significant risks that arise are identified, assessed, appropriately managed and monitored;
- reporting to shareholders.
Structure of the Board
The skills, experience and expertise relevant to the position of director held by each director in office at the date of the annual report is included in the Directors'
Report on page 1. Directors of APAC are considered to be independent when they are independent of management and free from any business or other relationship
that could materially interfere with - or could reasonably be perceived to materially interfere with - the exercise of their unfettered and independent judgement.
In the context of director independence 'materiality' is considered from both the company and individual director perspective. The determination of materiality requires
consideration of both quantitative and qualitative elements. An item is presumed to be quantitatively immaterial if is equal or less than 5% of the appropriate base
amount. It is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater than 10% of the appropriate base amount.
Qualitative factors which point to the actual ability of the director in question to shape the direction of the company's loyalty.
In accordance with the definition of independence above, and the materiality thresholds set, Paul Piercy, Sam Di Giacomo, Maurice Drew and Shyun Kon are
considered to be independent directors.
The role of Chairperson and Chief Executive Officer are not exercised by the same individual.
The Chairperson is an independent director.
To assist directors with independent judgement, it is the Boards policy that if a director considers it necessary to obtain independent professional advice to properly
discharge the responsibility of their office as a director then, provided the director first obtains approval for incurring such expense from the Chair, the company will
pay the reasonable expenses associated with obtaining such advice.
Trading policy
Under the company's Share Trading Policy, a director, executive or other employee must not trade in any securities of the company at any time when they are in
possession of unpublished, price sensitive information relating to those securities.
The policy provides that the written acknowledgement of the Chair must be obtained prior to trading.
As required by the ASX Listing Rules, the company notifies the ASX of any transaction conducted by the Directors in the securities of the company.
Audit Committee
The Board has an audit committee with operates under a charter provided by the Board. It is the Board's responsibility to ensure that an effective internal control
framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding
of assets, the maintenance of proper accounting records and the reliability of financial information as well as non-financial considerations such as the benchmarking of
operation key performance indicators. The Board had delegated the responsibility for establishing and maintaining a framework for internal control and ethical
standards to the audit committee.
The committee also provides the Board with additional assurance regarding the reliability of financial information for inclusion in the financial reports. All members of
the audit committee are non-executive directors. The members of the audit committee during the year were:
- Sam Di Giacomo (Chairperson)
- Paul Piercy
- Shyun Kon
Details of each directors qualifications are set out in the Director's Report. Mr di Giacomo is a Member of The Institute of Chartered Accountants in Australia and a
Fellow of the Financial Services Institute of Australia. In addition, Mr di Giacomo is a Certified Public Accountant. Mr di Giacomo's qualifications and experience
bring financial expertise to the Audit Committee.
For details on the number of meetings of audit committee held during the year and the attendees at those meetings, refer to page 2 of the Directors Report.
Risk
The Board regularly receives updates from management as to the effectiveness of the company's management of its material business risk.
For further information on the company's risk management plan, refer to our website.
Performance
A performance review of the Board and key executives will be undertaken in the subsequent financial year. As this is the Boards first full year of operation since
listing in July 08 it will be more appropriate for the reviews to be done then.
Remuneration Committee
34
APAC COAL LIMITED
It is the company's objective to provide maximum stakeholder benefit from the retention of a high quality Board and executive team by remuneration directors and key
executives fairly and appropriately with reference to relevant employment market conditions. The expected outcomes of the remuneration structure are:
- retention and motivation of key executives
- attraction of quality management to the Company
For full discussion of the company's remuneration philosophy and framework and the remuneration received by directors and executives in the current period, please
refer to the Remuneration Report, which is contained within the Directors' Report.
There are no termination or retirement benefits for non-executive directors other than for statutory superannuation. The Board is responsible for determining and
reviewing compensation arrangements for the directors themselves and the executive team. The Board has established a remuneration committee, comprising of
three non-executive directors. Members of the Remuneration Committee throughout the year were:
- Paul Piercy
- Sam Di Giacomo
- Shyun Kon
For details on the number of meetings of the remuneration committee held during the year and the attendees at those meetings, refer to page 2 of the Directors report.
35

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APAC COAL LIMITED

AND CONTROLLED ENTITIES

ABN: 16 126 296 295

Annual Financial Report For The Year Ended

Company Secretary Share Registry

Postal Address ASX Code - AAL

Principal Place of Business Controlled Entities

Auditor's Independence Declaration 10

Statement of Changes in Equity 13

Cash Flow Statement 14

Notes to the Financial Statements 15

Independent Audit Report 31

Corporate Governance Statement 33

Figure 1. Location of CCOW in East Kalimantan

Figure 2. Location of CCOW and work area.

Dividends Paid or Recommended

After Balance Date Events

TK Koh — Managing Director

Sam Di Giacomo — Independent Non Executive Director

Maurice Drew — Independent Non Executive Director

Shyun Kon — Independent Non Executive Director

Kuan Yew Lim — Non Executive Director

Ordinary Shares Options over Ordinary Shares

Directors' Audit Remuneration

Date of Number under

Indemnification of officers and auditors

Auditor’s Independence Declaration

• Remuneration of key management personnel; and

• Key terms of employment contracts

Key management personnel details

• Paul Piercy, Chairman and Non Executive Director - appointed 06/09/07

• TK Koh, Managing Director - appointed 06/09/07

• Sam Di Giacomo, Non Executive Director - appointed 29/06/07

• Maurice Drew, Non Executive Director - appointed 06/09/07

• Shyun Kon Non Executive Director - appointed 19/03/08

• Kuan Yew Lim Non Executive Director - appointed 14/10/2008

Employment Details of Members of Key Management Personnel and Other Executives

Changes in Directors and Executives Subsequent to Year End

On 31 July 2009 Mr Maurice F Drew resigned as a Director.

Remuneration Details for the Year Ended 30 June 2009

Short-term Post Equity-settled Total

Short-term Post Equity-settled Total

Securities Received that are not Performance Related

The granting of options was not subject to performance conditions.

Incentive share based payment arrangements

Reason Percentage Percentage Percentage Range of

Options and Rights Granted

For the financial year ended 30 June 2009

For the financial year ended 30 June 2009 Overall

No options were exercised by directors or executives during the year.

Value per Amt Paid /

Key Terms of employment contracts

Director Paul Piercy

Loss per share

The accompanying notes form part of these financial statements.

The accompanying notes form part of these financial statements.

Recognition of share base payments - - - 22,830 - 22,830

The accompanying notes form part of these financial statements.

(i) Financial assets at fair value through profit or loss