30 june 2019 for personal use only annual …edition of the “australasian code for reporting of...

30JUNE2019ANNUALFINANCIALREPORTCokalLimitedACN082541437AnnualFinancialReportfortheyearended30June2019

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COKALLIMITEDAnnualReport2018|Page1

ContentsCorporateInformation 1Chairman’sLettertoShareholders 2ReviewofOperations 3Directors’report 10Auditor’sIndependenceDeclarationtotheDirectorsofCokalLimited 21ShareholderInformation 22InterestsinTenementsandProjects 25ConsolidatedStatementofComprehensiveIncomefortheyearended30June2019 26ConsolidatedStatementofFinancialPositionasat30June2019 27ConsolidatedStatementofChangesinEquityfortheyearended30June2019 28ConsolidatedStatementofCashFlowsfortheyearended30June2019 29NotestotheConsolidatedFinancialStatementsfortheyearended30June2019 30DeclarationbyDirectors 66IndependentAuditor’sReport 67

CompetentPersonStatement

TheTotalCoalReserveestimateannouncedon1stAugust2017isbasedoninformationcompiledbyRobertdeJonghwhoisaMemberoftheAustralasianInstituteofMiningandMetallurgyandanemployeeofASEAMCOPtyLtd.MrdeJonghisaqualifiedminingengineerandhassufficientexperiencewhichisrelevanttothestyleofmineralizationandtypeofdepositunderconsiderationandtotheactivitywhichhe isundertaking, toqualifyasaCompetentPersonasdefined inthe2012Editionofthe“AustralasianCodeforReportingofExplorationsResults,MineralResourcesandOreReserves.

TheTotalCoalResourceestimatewasannouncedon29April2016,titled“UpdatedJORCResourceStatementforBBM”.Theinformation in the report relating toMineral Resources is based on information compiled by Yoga Suryanegarawho is aMemberof theAustralasian InstituteofMiningandMetallurgy.MrSuryanegara isaqualifiedgeologistandhassufficientexperiencewhichisrelevanttothestyleofmineralisationandtypeofdepositunderconsiderationandtotheactivitywhichheisundertaking,toqualifyasaCompetentPersonasdefinedinthe2012Editionofthe“AustralasianCodeforReportingofExplorationResults,MineralResourcesandOreReserves”.

TheCompanyconfirmsthatitisnotawareofanynewinformationordatathatmateriallyaffectstheinformationincludedinthe announcementmadeon29April 2016and that allmaterial assumptions and technical parametersunderpinning theestimatesintheannouncementmadeon29April2016continuetoapplyandhavenotmateriallychanged.

CorporateInformationDIRECTORSDomenicMartinoPatrickHannaKaranBangurCOMPANYSECRETARIESLouisaMartinoREGISTEREDOFFICEANDPRINCIPALBUSINESSOFFICELevel556PittStreetSydneyNSW2000Phone:+61288233179Fax:+61288233188

COUNTRYOFINCORPORATIONAustraliaSOLICITORSMillsOakleyLevel7,151ClarenceStreetSydneyNSW2000Phone:+61282895800Fax:+61292471315SHAREREGISTRYAdvancedShareRegistryServices110StirlingHighwayNedlandsWA6009Phone:+61893898033Fax:+61892623723

AUDITORSErnst&Young111EagleStreetBrisbaneQLD4000Phone:+61730113333Fax:+61730113100STOCKEXCHANGELISTINGAustralianSecuritiesExchangeLtdASXCode:CKAINTERNETADDRESSwww.cokal.com.auAUSTRALIANBUSINESSNUMBERABN55082541437

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Chairman’sLettertoShareholders

DearShareholders, This last year has laid the foundations for your Company’s transformation to a coal producer.Achievementshaveincluded: • The recruitment of a new local team with local geological and mining experience, including some

senior positions filled by experienced mine start-up personnel. The latter not only have extensiveexperienceinthestart-upofmines,butthecontactsandreputationtoensuretheCompanycanfulfilthepreminingrequirementsbothregulatoryandtechnicallyfortheBBMproject.

• The restructure of the Jakarta office and the finance operations of the Company with a completechangeoffinancepersonalincludingtheappointmentofanIndonesianbased,AustralianfinanceandaccountingprofessionaltoheadupfinanceandaccountinginJakarta.

• Thecompletereviewandreassessmentofthefeasibilitystudy,whichiscurrentlyinprogress,usingthenew local team to provide a number of alternatives to the production and especially the logisticalsolutionsnowavailabletotheCompanytodeveloptheBBMproject.

• The addition of amajor shareholder in Aahana that has provided the Companywith a strong localpresenceandaccesstobothexperiencedcoalminingpersonnelaswellasreputableandexperiencedcontractorswhohaveexpressedawillingnesstoworkontheBBMprojectgivenAahana’sinvolvementasamajorstakeholder.

• WithAahana’s assistance the streamliningof our relationshipswith the local authorities including areviewofalloutstandingcommitmentsonour licensesandsettingaprocess for rectificationofanyoutstandingmatterswiththerelevantgovernmentdepartments.

• ThedevelopmentwithAahana’sassistanceofanumberoffundingalternativesforthedevelopmentoftheBBMproject including theunderwritingof the recent rights issueaswell as the introductionbyAahanaof further fundingoptions includingminedevelopmentandproduction contractors, turnkeyinfrastructurebuildersandcommoditiestradinghouses.

Notallofthisiseasilyvisibletoyou,ourshareholders,buttheyaresignificantinlayingthefoundationsforwhatCokalwillbecome-astable,growing,metallurgicalcoalproducerwithapremiumproduct. TheCompanynowhasinplacedanexperiencedonthegroundteamandsubstantialfinancialavenuestocompletetheprojectathand.

Wethankyouforyourongoingsupport.

DomenicMartinoChairman

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ReviewofOperationsCokal Limited (ASX:CKA;Cokal or theCompany) is an Australian listed companywith the objective of becoming ametallurgical coal producer with a global presence. Cokal has interests in four projects in Central Kalimantan,Indonesia,eachwithknownresourcesofmetallurgicalcoal.

IndonesianCoalAssetsCokalholdsthefollowingIndonesiancoalassets:

• 60% of the shares in companieswhich own the Bumi BaritoMineral (BBM) and Borneo Bara Prima (BBP)projectslocatedinCentralProvince,Kalimantan,Indonesia.TheBBMprojectareaisapproximately15,000haandtheBBPprojectisapproximately13,050ha.

• 75% of the shares in the company PT Tambang Benua Alam Raya (TBAR), which owns an explorationtenementcoveringanareaofapproximately18,850ha.ThistenementislocatedadjacenttoandsoutheastoftheCompany’sBBMproject.

• 75%of the shares in companies that own theAnugerahAlamKatingan (AAK) project. This project is alsolocated in Central Province, Kalimantan, Indonesia and has an area of approximately 5,000ha. AAK iscurrentlyon‘on-hold’statusbyProvincialPoliceDepartment(PoldaKalteng).ThePolicehaveinvestigatedadisputeovertheownershipofAAK(pre-datingCokal’sinterestintheProject).CokalisanaggrievedpartyandwillawaittheoutcomeofthePoliceinvestigation.

BBM,BBP, AAK, and TBAR arewithin the highly prospective Central Kalimantan coking coal basin, and are locatedadjacentto Indomet’sextensivecokingcoal tenements. TheCompany is focussedonthedevelopmentof theBBMProject,asdiscussedfurtherbelow.

Figure1:LocationofCokalIndonesianCoalAssets

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ReviewofOperationsBumiBaritoMineral(BBM)Project BBM’spermitcoversanareaof14,980hawithmultipleseamsofhighqualitymetallurgicalcoal.AlmosttheentireIUPcontainscoal-bearingsedimentswithopencutmineableareascontrolledbythreemajorfaultsystems.BBMhasallregulatoryapprovalsinplaceincluding:

• MiningLicence–20yearswithtwofurtherextensionsof10yearseach

• Environmentalapprovalforaminingrateof6Mtperannum

• Portconstructionapproval(albeitinadifferentlocation)

• ForestryPermittocommenceminingactivity

• RKABapprovalofitsannualplan.

Sinceallpermitsforminingareinplace,BBMwillbethefirstareatobeminedbyCokal.BBM isdissectedby theBaritoRiver,whichcuts throughthe tenement inanorth-south trend. Coalanalyses fromover130outcropsonthewestsideof theBaritoRiver indicate that itcontainspremiumqualityanthraciteandPCIcoals.ThiscoaldoesnotcurrentlyformpartofstatedBBMcoalresources.Updatedrehabilitationplansweresubmittedasrequiredbythegovernment.Theworkplanfor2019wassubmitted(RKAB)duringtheyear.Thiswasapprovedbythegovernment(DirectorateGeneralMineralsandCoal).DuringtheyeartheCompanydevelopedafiveyearmineplanwhichwillbeimplementedoverthecomingmonths.Themineplanincludes:

• Refurbishmentoftheexisting65-mancampatKrajan;• ConstructionofroadsfromPit2andPit3toKrajanport;• UseofaminingcontractortominePit2andPit3;• Useofsecondminingcontractorforhighwallmining;• DevelopCoalHandlingPreparationPlant(CHPP)attheKrajanporttopreparecokingcoalforsale;• DevelopabargeloadingfacilityatKrajan:• UseshallowdraftbargesandpushboatstodelivercoaldirectlyfromKrajan.

TambangBenuaAlamRaya(TBAR)ProjectTBAR’sexplorationauthoritycoversanareaof18,850haimmediatelyadjacenttoandsouthofCokal'sBBMtenement.Over 80% of the lease is available for exploration subject to the issuance of an exploration forestry permit. Theapplicationofexplorationforestrypermitwassubmittedin2014andcontinuestobeprocessedbytheEnvironmentandForestryMinistryofIndonesia.FollowingitstransferprocessfromMurungRayatoProvincialGovernment,CokalcontinuesitseffortstoacquireregulatoryapprovalfortheIUP(explorationlicence)upgradeprocessapplicationtoaProductionandOperationIUP,equivalenttoamininglicence.Progressisbeingmadeinthisregardthroughdialoguewith theombudsman. Nowthat thePresidentialelectionhasbeenconcluded it isexpected fasterprogresscanbemade.Outcropmappingof four seamsover 17km strike indicates a substantial resourceof high grade coking coal in thisdeposit.TheseseamscorrelatetotheB,C,DandJseamsintheadjacentBBMdeposit.NoexplorationactivitywasconductedbyCokalduringtheyear.FurtherexplorationwillbeproposedassoonasthetransfertotheProvincialGovernmenthasbeenconcluded.

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ReviewofOperations

Figure2:GeologicalinterpretationofBBMEastandTBAR

BorneoBaraPrima(BBP)Project Cokal's BBP project covers 13,050ha in Murung Raya Regency, Central Kalimantan. BBP has been granted anExplorationForestryPermit (IPPKH)andhasbeenconfirmedontheCentralGovernment’sCleanandClear list. TheIUPwas transferred to the Central Governmentwhere it now awaits approval to be upgraded to amining licence(ProductionandOperationIUP).Abusinesslicencedecreeforoperationforeignminingproduction(IUPOPPMA)fromcapitalinvestmentcoordinationboardcentre(BKPM)wasreceivedinQ12019.Workplansandthebudget(RKAB)2019havebeensubmittedtothegovernment(DirectorateGeneralMineralsandCoal).AnugerahAlamKatingan(AAK)ProjectCokal'sAAKprojectcovers5,000hainCentralKalimantan.ApplicationsfortheExplorationForestryPermit(IPPKH)andCleanandClearCertificatescontinuetobeprocessed.CokalcontinuestomonitortheprogressoftheregulatoryupgradeapprovalsforAAK.NoexplorationactivitywasconductedonAAKduringtheyear.

ShallowDraftBarging DuringtheyearCokalidentifiedasourceofshallowdraftbargesandpushboatsinVietnamwhichcanoperatein2mdeepwater.Itisenvisagedthatfour1,700tbargeswillform2x2towstobepushedbysinglepushboatseachwith2x1,000HPazimuththrusterstotransportBBMcoalfromKrajantoKelanis.ItisanticipatedthatfromKelanistoshipsstandingoffshorecoalwillbetransportedusingconventionalbarges.No land coal storage is being developed for BBM apart from stockpiles at Krajan. Consideration is being given totransfer to conventional barges furtherup river thanKelanis. At this transferpoint surges in coal deliverymaybeaccommodatedusingmooredbarges.Someimprovementsintheriverchannelwillenhancethebargingoperation.

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ReviewofOperationsJORCCodeStatements SinceJune2016noexplorationactivitywasconductedinthefieldonanyofCokal’sassets. ConsequentlytheJORCResourcesStatementfortheBBMProjectannouncedon29April2016,remainscurrent.ThetotalResourceestimateremains at 266.6Mt for BBM comprising 19.5Mt Measured and 23.1Mt Indicated Resources respectively and thebalanceatInferredstatus.On1stAugust2017CokalannounceditsmaidenJORCReservesStatement.TheCoalReservestatementisonlyfortheEasternportionoftheBBMcoalprojectandremainsvalid.ThehighlightsofthisReservestatementreportincluded:

• CoalReserveestimateof20.2MtofopenpitRun-of-Mine(ROM)forBBM,producing16.9MtofMarketableReservesinaccordancewiththe2012JORCCode.

• Reserveestimatecomprised13.0MtProvedand7.2MtProbableROMReserves,(totalling20.2MtROMcoal)forB,C,DandJSeamsatUS$150/tonne.

• MarketableCoalReservescomprise12.8MtCokingCoalProductatUS$150/tonneand4.1MtPCIProductatUS$112.50/tonne(totalling16.9MtMarketableCoalReserves).

• B, C and D coking and Premium PCI (low Vol) products have premium qualities consisting low ash, lowsulphur,lowmoistureandultra-lowphosphorus.

• LowVolatilePCIandmediumtolowVolatileCokingCoalsuitedtonearbyAsianmarkets.TheJSeamReserves(5.5MtProvedand3.2MtProbableMarketableCoalReserves)is100%cokingcoal.InthecaseofSeamsB,C andD, 3.0MtProvedand1.1MtProbable isCokingCoalMarketableReserves,while2.4MtProvedand1.7MtProbableisPCIMarketableCoalReserves.

Figure3:EconomicOpenpitsinEasternPortionofBBMTenement

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ReviewofOperations

Figure4:CrossSectionthroughOpenpits

EconomicReservesweredeterminedusingtheDefinitiveFeasibilityStudyprepared in2014byResindo,updatedtoreflectreducedfuelcostsanddepreciationoftheRupiahinNovember2016(seeASXAnnouncement2ndNovember,2016).

CORPORATEACTIVITYBTBaraIneralAsri(BMA)DuediligencebyPTBaraMineralAsri(BMA)continuedduringtheyear.BMAhasadvisedthatitisworkingtowardsaproposal to partner with Cokal for the funding and development of the BBMMine. The manner of this futurecooperationwillnowchangewiththeestablishedparticipationoftheAahanaGlobalResourcesandInvestmentPteLtd.DuringtheyearBMAloanedUS$2milliontoCokaltoberepaidfromthesaleofcoalwhenminingcommences.Thiswillbepaidat$10/tforcoalsalesat$100/torgreaterand10%/tforcoalsoldatlessthan$100/t.BMAindicateditwillsubmitarevisedproposalforcooperationbutsofarthishasnotbeenreceived.AahanaGlobalResourcesandInvestmentPteLtd(AGRI)During the year AahanaMineral Resources SDN BHD (AMR), an associate company of AahanaGlobal Resources&InvestmentPteLtd(AGRI),completedtheacquisitionofasubstantialshareholdinginCokalLimited.AMR/AGRIisnowthelargestsingleshareholderinCokal.

Inaddition,duringtheyearAGRInominateditsfirstdirectorappointedtotheCokalLimitedboard,Mr.KaranBangur.Mr.KaranBanguristheCEOofAahanaGlobalResources&InvestmentPteLtdandhasover10yearsexperienceintheSouthEastAsianregioninminingandresourcescompanies.Heisamostwelcomeandvaluableadditiontoourteam.

AGRI,underAMR,fullyunderwrotetheCokalEntitlementOffertoraiseapproximatelyAU$5.1MillionthatcompletedinAugust2019.

FurthertothisAGRIisproceedingwithdiscussionswiththeCompanytoarrangeasuitablefinancingpackageforthedevelopmentoftheBBMCokingCoalproject. KrakatauNationalResources(Krakatau)Meetingswere heldwith seniormanagement of Krakatau to discuss the future sale to themof both PCI coal andcokingcoal. KrakatauindicateditsPCIcapableblastfurnace isbeingcommissionedandwillrequire10,000t/monthPCI coal month by the end of this year. They requested a 10kg sample of our PCI coal which was provided.Discussionscontinue.

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ReviewofOperationsDebtRestructuring–ConversionofLoanstoPlatinumPartnerstoaRoyaltyArrangementIn November 2018, Cokal concluded and executed an amended agreement with Northrock Financial LLC andWintercrestAdvisorsLLC(thePlatinumEntities) inrespectof loansoutstandingtotalingUS$13.89million(PlatinumLoans). The amended agreement confirmed the conversion of the debt owing by the Company into a productionroyalty.

On 20 February 2018, the Company issued 75 million Options to the Platinum Entities with an expiry date of 20February2023andanexercisepriceof1.6cents(ExistingPlatinumOptions).EachExistingPlatinumOptioncurrentlyvestsonceallthePlatinumLoanshavebeenreleasedanddischarged.HalfoftheseoptionshavesubsequentlybeentransferredtoAGRIaspartofitsacquisitionofasubstantialholdingintheCompanyasmentionedabove.Ithasbeenagreedthattheremaining37,500,000optionswillnotbeexercisedasdiscussedbelow.

Theamendedagreement:

• ConfirmsthatanumberoftheconditionsprecedentinrespectofthePlatinumLoanshavebeensatisfiedorwaived by the Platinum Entities and extends the date for meeting the remaining conditions precedent(subsequentconditions)under theroyaltydeed forconversionof thebalanceof thePlatinumLoans to31July2020.

• ProvidesthatupontheCompanyissuingNewOptions(37.5millionoptionswitha4yeartermandexercisepriceof1.6cents),subjecttoshareholderapproval,andthePlatinumEntitiesagreeingnottoexercise37.5million of the Existing Platinum Options (once the New options are issued 37.5 million of the ExistingPlatinumOptionsarecancelled),onethirdofthePlatinumLoanswillbeforgiven.TheresolutiontoissuetheNewOptionswasresolvedbyshareholdersattheCompany’s2018AnnualGeneralMeeting.

On 10 January 2019, 37.5 million New Options (4 year term and exercise price of 1.6 cents) were issued to thePlatinumEntitiesandconsistentwiththeamendedagreementbetweentheCompanyandthePlatinumentitiesonethirdofthePlatinumLoans(US$4,630,767ofdebt)wasforgivenatthattime.

ConvertibleNotesInOctober2017theCompanyenteredintoaConvertibleNoteAgreementwithMEFI,L.P.(“Magna”),wherebyCokalcouldraiseuptoAUD4,000,000throughtheissueofConvertibleNotes inthreetranches.ThefirsttranchetotalingAUD2,000,000wasdrawninOctober2017,with1,577,234ConvertibleNotesissued.Asat30June2018,Magnahadconverted 1,280,000 Convertible Notes to shares, with 297,234 Convertible Notes remaining. During the year,150,000ConvertibleNoteswereconvertedto7,591,796shares. Redemptionof theremaining147,234ConvertibleNotesoccurredinNovember2018.

FraudulentActivityDuringtheauditofthe2018annualaccountsCokalwasmadeawareoffinancialirregularitiesandfraudulentactivitywhichimpactedtheCompany’sfinancialstatementsfortheyearended30June2018.TheCompanyinvestigatedandrectified the irregularities. After rectification there has been no material financial loss to the Company. Newauthorisationsandorganisationhavebeenputinplacetopreventsuchmattersoccurringinthefuture.TheCompanyrequested and received the resignation of the Chief Financial Officer and the Purchasing Officer effective 15November2018.OthersinvolvednolongerworkforCokal.

StaffingInJuly2018CokalLimitedappointedanewChiefExecutiveOfficer.JimColemanhasextensiverelevantexperienceinall aspectsofopencutmining in SouthEastAsia,AfricaandAustralia,managementofmining contractors, shallowdraftbarging,communitydevelopmentandachievingtargetsduringminestart-ups.

TheorganisationofCokalhasbeenredesignedtobeappropriate for thecommencementofminingoperationsandtheexplorationoftenements.

TheappointedMineSiteManager,WisnuJati,holdstheappropriatequalificationstocontrolthemineasrequiredbyIndonesianlaw.Hewillberesponsibleforallactivitiesincludingsafety,miningcontractors,shorttermmineplanning,administration,communityrelations,logistics(barging)andsupportforexploration.

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ReviewofOperationsExperiencedminingengineerArieCahyonoandgeologistLukiWiliantojoinedourteaminthesecondhalfoftheyear.

Andrew Ichwan was appointed Finance Manager and commenced in January 2019. Andrew is Indonesian withexperienceinbothIndonesiaandAustralia.HehasatrackrecordworkingwithseveralASXlistedcompaniesincludingStraitsResourcesLimitedandSilverlakeResourcesLimiteddealingwithgold,zirconandcoal.AndrewisamemberofCPAAustraliaandholdsaBachelorofAccountingdegreefromCurtinUniversity.

Former CFO, Vic Kuss, is consulting to provide background knowledge of Cokal’s systems and to assist Andrew toestablishappropriateaccountingprotocolstoensuretimelycontrolofallincomeandexpendituregoingforward.

RelocationtoNewOfficeinJakartaDuring theyearCokal relocated its Indonesian Jakartaoffice fromsuite#1202 to suite#2302 in the samebuilding.This was part of a necessary restructure to reduce Company overheads, resulting in a saving of approximatelyUS$20,000foreveryquarterinIndonesianofficerentalpayment.

RightsIssueRaisedAU$5.1MillionOn18 June2019 theCompanyannounceda fullyunderwrittennon-renounceableentitlementofferofone (1)newshareforeveryeight(8)Cokalsharesheld,atanissuepriceofAUD0.05pernewsharetoraiseapproximatelyAUD5.1millionbeforecosts.Aftertheclosingdateoftheentitlementoffer,approximatelyAUD1.7millionhadbeentakenupby shareholders. Thedirectors placed someof the shortfallwith the remainder placedwith theCompany’smajorshareholderandunderwriter,AahanaGlobalResources&InvestmentPteLtd.

ThefundingraisedisbeingusedtowardscurrentoperatingcostsandinitialinfrastructuredevelopmentandupgradingofexistingfacilitiesattheBBMminesite.

In addition to this, the Company is in discussions with prospective investors who are keen to work on long termofftakeandinvestmentbasedarrangementsforsourcingPCIandpremiumcokingcoalfromtheBBMmine.

ExternalRelations

SafetyandHealthNoactivitiesonsiteduringtheyear.

EnvironmentalSound management of the environment is a critical part of Cokal’s strategy in becoming a global supplier in themetallurgicalcoalsector.WorkpracticeswillbedevelopedtoestablishenvironmentalcomplianceanddemonstrateCokal'scommitmenttotheenvironment.Theseinclude:

• BaselinewaterandenvironmentalmonitoringattheBBMprojectarea.pHmonitoringonbi-monthlybasis.Impacts from seasons (dry season and rainfall season) and also local activities (illegal mining activities inupstreamarea)arekeyfactorstothispHconditionatBBMsite.

• Continuationoftheenvironmentalawarenessprogrammeaimedat“grassroots”levelandpresentedinsuchamannerthatitiseasilycomprehendabletosurroundingcommunitywithlimitededucation.Topicsincludeforestburning,illegallogging,goldsluicingandrubbishdisposalwhicharecriticalissuesinthisarea.

• Monitoringofanauthorisedwastestoragearea.Thedrums,batteriesandwasteoiltobetakenbyalicencedhazardousmaterialscontractortoanapprovedandregistereddisposalfacilityinBanjarmasin.Inaddition,anongoingcontractwillbeestablishedwiththelicencedoperatortoremovedrumsandwasteoilfromthePTBBMsitesothatwecomplywiththemaximumonsitestoragetimeof3months.ARegisterofHazardousmaterialwillbeestablishedinordertoensurethathazardousmaterialisdisposedofcorrectly.

CommunityDevelopmentCokalwillcontinueandfurtherdevelopitsCorporateSocialResponsibility(CSR)program.

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Directors'ReportYourDirectorspresenttheirreportfortheyearended30June2019.

The following persons were Directors of Cokal Limited(“Group”, “consolidated entity” or “Cokal”) during thefinancial year and up to the date of this report, unlessotherwisestated:

DomenicMartino,Non-ExecutiveChairman(Appointed Director on 24 December 2010 andChairmanon27January2017)B. Bus,FCPAMr. Martino, 64 is a Chartered Accountant and anexperienceddirectorofASXlistedcompanies.PreviouslyCEO of Deloitte Touch Tohmatsu in Australia, he hassignificantexperienceinthedevelopmentof"micro-cap"companies.• FormerCEODeloitteToucheTohmatsuAustralia.

• Keyplayerinthere-birthofabroadgroupingofASXcompanies including Sydney Gas, Pan Asia, CleanGlobalEnergy,NuEnergyCapital.

• StrongreputationinChina.

• Lengthy track record of operating in Indonesia,successfully closed key energy and resources dealswithkeylocalplayers.

• Proventrackrecord incapitalraisingsacrossarangeofmarkets.

DuringthepastthreeyearsDomenichasalsoservedasaDirectorofthefollowingASXlistedcompanies:• Pan Asia Corporation Limited (since 24 December

2010,resigned4July2018)

• AustralasianResourcesLimited* (since27November2003)

• ORHLimited*(since6May2009)

• SouthPacificResourcesLimited*(appointed3August2012)

• Skyland Petroleum Group Limited* (appointed 19December2013)

*denotescurrentdirectorship

PatrickHanna,Non-ExecutiveDirector(Appointedon24December2010)B. AppliedScience(Geology),CPI,FAusIMMMr Hanna has over 40 years’ experience as a coalgeologist in the areas of exploration and evaluationincluding planning, budgeting and managing drillingprograms in Australia and Indonesia, gained sincegraduating from the University of New South Wales in

1976. Mr Hanna has authored and co-authorednumerouscoalindustrypublications.• Geologist,67,over40years’experienceallincoal.

• ExtensiveexperienceinIndonesiancoal.

• ExplorationManager forRiversdaleMining,principalresponsibility for discovery and documentation ofnewcokingcoalbasininMozambique.

• Ex-memberofJORCcommittee.

• PrincipalGeologistSRKAustraliafor6years.

• Authorof19technicalpublications.

• Reviewed and consulted on over 40 coal projectsglobally.

During the past three years Patrick has not served as adirectorofanotherlistedcompany.

Gerhardus(Garry)Kielenstyn,ExecutiveDirector(Appointed 27 January 2017, Resigned 21 August2019)Mr. Kielenstyn, 65 has been a member of the seniormanagement team in the capacity of Chief OperatingOfficer since June 2016 and prior to that was Cokal’sIndonesian Country Manager / President Director PTCokal (PT Cokal is a 100% owned subsidiary of Cokal)sinceMay2013.

Mr.KielenstynisanexpatriatebasedinKalimantan,heisa veteranof the Indonesianminingandcivil contractingindustries.HisfirstIndonesianbasedrolewasinthe1974and has been living andworking in country since 1990.Hispreviousrolesinclude:• Project Manager and Area Manager with Petrosea

one of Indonesia’s biggest mining and civilcontractors

• ConstructionManager, MiningManager, OperationsManager, General Manager and Resident Managerfor well recognized Indonesian Mining CompaniessuchasPTPTIndoMuroKencana/StraitsResources,PT Yuga Eka Surya, PT Ganda Multi Energi and PTBaramultiSugihSentosa.

Garry has a strong track record for bringing projectsthrough construction to production in remote parts ofIndonesia.Importantlyhehasalongandsuccessfultrackrecord in the Murung Raya regency where Cokal’spremierBumiBaritoMineral(BBM)projectislocated.F

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Directors'ReportKaranBangur,Non-ExecutiveDirector(Appointedon10April2019)BComMr Bangur, 35 has over a decade of experience inoperatingminingandlogisticsprojectsinSouthEastAsia.He is well experienced and familiar with Indonesianminingandgenerallawsrelatingtoongroundoperationsdue to his experience in several projects in Indonesia.

Currentongoingandpreviousprojectsinclude:• Operations of thermal coal mine in Tanah Grogot,

EastKalimantanincapacityoffinancier.

• Operating fleet of HEMM (Heavy Earth MovingEquipment) in thermal coalmineproject in Tarakan,NorthKalimantanincapacityofowner.

• He currently serves asManagingDirector ofAahanaGlobal Resources & Investment Pte Ltd, which isprimarilyaninvestmentandholdingCoincorporatedinSingapore2008-Present.

• He serves as Director in Aahana Mineral ResourcesSdnBhd,which is the singlemajority shareholder inCokalLtd.2019-Present.

• Previousassignmentsinvolveevaluationandplanningof Iron Ore, Bauxite Ore and Graphite concentraterecoveryprojectsinIndonesia.

• Previous projects include logistics and portdevelopmentinIndonesiaandotherpartsofSEAsia.

• Development and operating Iron Ore tenement inMalaysia including HEMM fleet management andrentalservices.

ThefollowingpersonwasChiefExecutiveOfficerofCokalLimited (“Group”, “consolidated entity” or “Cokal”)duringthefinancialyearanduptothedateofthisreport,unlessotherwisestated:

James(Jim)Coleman,ChiefExecutiveOfficer(Appointedon27July2018)B. Eng(Hons,Mining),FAusIMMMr Coleman, 74 has a proven 51-year track record incorporatemanagementofoperationsforlargesuccessfulcompanies including Riversdale Mining, The GriffinGroup, The Electricity Trust of South Australia, UtahDevelopmentCompanyandRioTinto.

He has led multi-faceted teams and consortia for largecoalprojectsindevelopingcountriesandalsospecialisedindeepmines in soft saturated strata.MrColemanwasresponsibleforthedevelopmentofThailand’s14milliontonnes per annum coal mine which feeds directly intoEGAT’son-sitepowerstationinnorthernThailand.

Asaminingengineer,hehasover50years’experienceinopen cut and underground mining specialising in minemanagement,projectdevelopmentandoperationusingavariety of equipment including extensive application ofin-pit crushing and conveying systems. He designedstrategicmineplanningtooptimiseeconomicreturnsfor

variouscoaloperations.Hewasalso responsible for thedevelopment of integrated projects in Australia,Mozambique, Thailand, The Philippines, India andthroughoutSEAsia.MrColemanhasspecificexpertiseinapplicationof selectivemining systems for lowashhighqualitycoalstominimisedilution.

Jim possesses a high awareness in the application ofshallow river barging systems to transport coal frominlandprojectsoverlongdistances.Heparticipatedinthesuccessfulevaluationof500kmshallowwaterbargingontheZambeziRiverinMozambiqueforthetransportationof coking coal from Riversdale’s Benga project to off-shore mother vessels. This experience is in line withCokal’s plans to use shallow-river barging on the BaritoRiver todeliver thecokingcoal ingoodconditionto thenearbyAsianmarketplace.

Throughthe1980sand1990s,heownedandmanagedahighly successful mining consulting business (ColemanandAssociates)employingsome40miningprofessionalsand managing operations concurrently throughoutAustralia and in five countries including AustralianGovernmentaidfundedprojectsinSEAsia.

The following persons were Chief Financial Officer andCompany Secretaries of Cokal Limited (“Group”,“consolidatedentity”or“Cokal”)duringthefinancialyearand up to the date of this report, unless otherwisestated:

Teuku Juliansyah, Chief Financial Officer (CFO) andJoint Company Secretary (Appointed on 24 June2016,resigned15November2018)Over9years’practicalexperienceinfinancerolesinvolvingfinancepolicyandprocedurestrategy,andimplementation,accounting,budgeting,auditingandotherfinancialconsultingtypeofwork.

LouisaMartino(Youens),CompanySecretary(Appointedon9August2017)BCom,CAMsMartinoprovidescompanysecretarialandaccountingservices to a number of listed entities through IndianOceanCapital.

Previously Ms Martino worked for a corporate financecompany, assistingwith company compliance (ASIC andASX)andcapitalraisings.Shealsohasexperienceworkingfor a government organisation in its BusinessDevelopment division where she performed reviews ofbusiness opportunities and prepared business caseanalysisforthoseseekingGovernmentfunding.

Priortothat,MsMartinoworkedforamajoraccountingfirm in Perth, London and Sydney where she providedcorporate advisory services, predominantly on IPOs andalsoperformedduediligencereviews.

ShehasaBachelorofCommerce fromtheUniversityofWestern Australia, is a member of CharteredAccountantsAustraliaandNewZealandandamemberoftheFinancialServicesInstituteofAustralasia(FINSIA).

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Directors'ReportInterestsinSharesandOptionsAtthedateofthisreport,theinterestsoftheDirectorsinthesharesofCokalLimitedareshowninthetablebelow.

PrincipalActivitiesTheprincipal activities of the consolidatedentity duringthefinancialyearwerefocusedontheidentificationanddevelopment of coal within the highly prospectiveCentralKalimantancokingcoalbasininIndonesia.

OperatingResultsFor the year ended 30 June 2019, the loss for theconsolidated entity after providing for income tax wasUS$1,855,717(2018:US$7,796,143).

DividendsPaidorRecommendedThere were no dividends paid or recommended duringthefinancialyear.

ReviewofOperationsDetailed comments on operations and explorationprograms up to the date of this report are includedseparately in the Annual Report under Review ofOperations.

ReviewofFinancialConditionCapitalStructureDuring the financial year, Cokal issued a total of103,142,367 shares. 88,765,000 shares were issued toraiseUS$1.6million incash(this includes37.5moptionsexercised).7,591,796shareswere issuedonredemptionof147,234convertiblenotesand6,785,571shareswereissuedonconversionofaloanandinpaymentofinvoicesandsalary.

At30June2019,theconsolidatedentityhad816,842,159ordinarysharesand96millionunlistedoptionsonissue.

FinancialPositionThenetassetsoftheconsolidatedentityhave increasedbyUS$1,219,834 fromUS$6,726,886at30 June2018 toUS$7,946,720at30June2019.

TreasuryPolicyThe consolidated entity does not have a formallyestablished treasury function. The Board is responsibleformanagingtheconsolidatedentity’sfinancefacilities.

Somegoodsandservicespurchasedbytheconsolidatedentity,alongwiththepaymentsmadetothevendorsofthe Kalimantan coal projects, are in foreign currencies(AUdollarsorIndonesianRupiah).

The consolidated entity does not currently undertakehedgingofanykind.

LiquidityandFundingTheconsolidatedentitybelievesithassufficientaccesstofunds to finance its operations andexploration/development activities, and to allow theconsolidated entity to take advantage of favourablebusiness opportunities, not specifically budgeted for, ortofundunforeseenexpenditure.

Significant Changes in the StateofAffairsThere have been no significant changes in the Group’sstateofaffairsduringtheyearended30June2019.

Significant Events after theReportingDateThere have been no significant events after reportingdateexceptfor:• Completion of the Entitlement Offer, raising

AU$5.1million;and

• ResignationofMrGerhardus(Garry)KielenstynasadirectoroftheCompany.

Future Developments, ProspectsandBusinessStrategiesLikely developments in the operations of theconsolidated entity and the expected results of thoseoperations in subsequent financial years have beendiscussedwhereappropriateintheAnnualReportunderReviewofOperations.

There are no further developments of which theDirectors are aware which could be expected to affectthe results of the consolidated entity’s operations insubsequentfinancialyears.

BusinessResultsTheprospectsoftheGroupindevelopingitspropertiesinIndonesiamaybeaffectedbyanumberoffactors.Thesefactorsaresimilartomostexplorationcompaniesmovingthrough the exploration phase and attempting to getprojectsintoproduction.Someofthesefactorsinclude:• Exploration-theresultsoftheexplorationactivities

at the BBM project and the tenements in CentralKalimantan may be such that the estimatedresources are insufficient to justify the financialviabilityoftheprojects.

• Regulatory and Sovereign - the Group operates inIndonesiaanddealswithlocalregulatoryauthoritiesin relation to theoperationanddevelopmentof itsproperties.TheGroupmaynotachievetherequired

• local regulatory approvals or they may besignificantly delayed to enable it to commenceproduction.

• Funding - theGroupwill require additional fundingtomovefromtheexploration/developmentphaseto

OrdinaryShares Options

DomenicMartino 41,688,512 -

PatrickHanna 27,900,000 -

KaranBangur 184,641,719 37,500,000

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Directors'Reportthe production phase of the BBM project and thetenements in Central Kalimantan. There is nocertaintythattheGroupwillhaveaccesstoavailablefinancialresourcessufficienttofunditscapitalcostsand/oroperatingcostsatthattime.

• Development - the Group is involved in developinggreenfieldprojectsinIndonesiawhichcouldresultincapital costs and/or operating costs at levelswhichdo not justify the economic development of theproject.

• Market - there are numerous factors involvedwithearlystagedevelopmentofitspropertiessuchastheBBMproject, includingvariance incommoditypriceand labour costswhich can result in projects beinguneconomical.

EnvironmentalIssuesThe consolidated entity is subject to environmentalregulation in relation to its exploration activities inrespective countries. Indonesiawhere theGroup’smainproject is located in the principal laws areActNo.41 of1999 regarding Forestry (the Forestry Law), ActNo.4 of2009 regarding Minerals and Coal Mining (the MiningLaw) and Act No. 32 of 2009 regarding EnvironmentalProtection and Management (the Environment Law).There are no matters that have arisen in relation toenvironmentalissuesuptothedateofthisreport.

Non-AuditServicesNonon-audit serviceswereprovidedbyCokal’sauditor,Ernst & Young during the financial year ended 30 June2019(2018:Nil).

RemunerationReport(Audited)This remuneration report for the year ended 30 June2019 outlines the remuneration arrangements of theGroup in accordance with the requirements of theCorporationsAct2001 (theAct)and its regulations.Thisinformation has been audited as required by section308(3C)oftheAct.

The remuneration report details the remunerationarrangementsforkeymanagementpersonnel(KMP)whoare defined as those persons having authority andresponsibility for planning, directing and controlling themajor activities of the Group, directly or indirectly,including any director (whether executive or otherwise)oftheconsolidatedentity.

For the purposes of this report, the term “executive”includestheExecutiveChairman,ChiefExecutiveOfficer,directorsandotherseniormanagementexecutivesoftheGroup.

RemunerationreportapprovalatFY18AGMThe remuneration report for the 2018 financial yearreceivedpositiveshareholdersupportwithproxyvotesof98.2%infavour(ofsharesvoted).

RemunerationPolicyThe performance of the consolidated entity dependsupon the quality of its directors and executives. Toprosper, the consolidated entity must attract, motivateandretainhighlyskilleddirectorsandexecutives.

The Board does not presently have Remuneration andNominationCommittees.Thedirectorsconsiderthattheconsolidatedentity isnotof a size,norare its affairsofsuchcomplexity,astojustifytheformationofanyotherspecial or separate committees at this time.Allmatterswhich might be dealt with by such committees arereviewedbythedirectorsmeetingasaBoard.

The Board, in carrying out the functions of theRemuneration and Nomination Committees, isresponsible for reviewing and negotiating thecompensation arrangements of senior executives andconsultants.

The Board, in carrying out the functions of theRemuneration and Nomination Committees, assess theappropriateness of the nature and amount ofremuneration of such officers on a periodic basis byreference to relevant employment market conditionswith the overall objective of ensuring maximumstakeholderbenefit from the retentionof ahighqualityBoard and executive team. Such officers are given theopportunity to receive their base remuneration in avariety of forms including cash and fringe benefits. It isintended that the manner of payments chosen will beoptimalfortherecipientwithoutcreatingunduecostfortheconsolidatedentity.

The consolidated entity aims to reward the ExecutiveDirectorsandseniormanagementwithalevelandmixofremuneration commensurate with their position andresponsibilities within the consolidated entity. TheBoard’spolicyistoaligndirectorandexecutiveobjectiveswith shareholderandbusinessobjectivesbyprovidingafixedremunerationcomponentandofferingshortand/orlong-termincentivesasappropriate.In accordancewith best practice corporate governance,the structure of non-executive directors, ExecutiveDirectors and senior management remuneration isseparateanddistinct.

Non-executiveDirectorRemunerationTheBoardseekstosetaggregateremunerationatalevelwhichprovidestheconsolidatedentitywiththeabilitytoattractandretaindirectorsof thehighestcalibre,whilstincurringacostwhichisacceptabletoshareholders.

The Constitution of Cokal Limited and the ASX ListingRules specify that the non-executive directors areentitled to remuneration as determined by theconsolidated entity in a general meeting to beapportioned among them in such manner as theDirectors agree and, in default of agreement, equally.The aggregate remuneration currently determined byCokal Limited is AU$500,000 per annum. Additionally,non-executivedirectorswillbeentitledtobereimbursedforproperlyincurredexpenses.

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Directors'ReportIf a non-executive director performs extra services, which in the opinion of the directors are outside the scope of theordinarydutiesofthedirector,theconsolidatedentitymayremuneratethatdirectorbypaymentofafixedsumdeterminedbythedirectorsinadditiontoorinsteadoftheremunerationreferredtoabove.However,nopaymentcanbemadeiftheeffectwouldbetoexceedthemaximumaggregateamountpayabletonon-executivedirectors.Anon-executivedirectorisentitledtobepaidtravelandotherexpensesproperlyincurredbytheminattendingdirectors’orgeneralmeetingsofCokalLimitedorotherwiseinconnectionwiththebusinessoftheconsolidatedentity.

Theremunerationofthenon-executivedirectorsfortheyearending30June2019isdetailedinthisRemunerationReport.

ExecutiveDirectorsandSeniorManagementRemunerationThe consolidated entity aims to reward the Executive Directors and senior management with a level and mix ofremunerationcommensuratewiththeirpositionandresponsibilitieswithintheconsolidatedentitysoasto:• rewardExecutivesforconsolidatedentityandindividualperformance;• aligntheinterestsofexecutiveswiththoseofshareholders;• linkrewardwiththestrategicgoalsandperformanceoftheconsolidatedentity;and• ensuretotalremunerationiscompetitivebymarketstandards.The remuneration of the ExecutiveDirectors and seniormanagementmay from time to timebe fixed by theBoard. Asnotedabove,theBoard’spolicyistoaligntheExecutiveDirectorsandseniormanagementobjectiveswithshareholderandbusiness objectives by providing a fixed remuneration component and offering short and/or long-term incentives asappropriate.

Theleveloffixedremunerationissetsoastoprovideabaselevelofremunerationwhichisbothappropriatetothepositionand is competitive in the market. Short-term incentives may be provided in the form of performance bonuses. Fixedremuneration and short-term incentives are reviewed annually by the Board, in carrying out the functions of theRemuneration Committee, and the process consists of a review of Company-wide and individual performance, relevantcomparativeremunerationinthemarketandinternal,andwhereappropriate,externaladviceonpoliciesandpractices.

Seniormanagementaregiventheopportunitytoreceivetheirfixedremunerationinavarietyofformsincludingcashandfringebenefitssuchasmotorvehiclesandexpensepaymentplans.Itisintendedthatthemannerofpaymentchosenwillbeoptimalfortherecipientwithoutcreatingunduecostfortheconsolidatedentity.

Long-term incentives may be provided in the form of options and/or the issue of shares following the completion ofsatisfactorytimeperiodsofservice.Theconsolidatedentityusesemployeecontinuityofserviceandthefuturesharepricetoaligncomparativeshareholderreturnandrewardforexecutives.

Theremunerationof theExecutiveDirectorsandseniormanagement for theyearending30 June2019 isdetailed in thisRemunerationReport.

RelationshipbetweenRemunerationandConsolidatedEntityPerformanceDuring the financial year, the consolidated entity has generated losses as its principal activity was exploration anddevelopmentwithintheCentralKalimantancokingcoalbasininIndonesia.

Thefollowingtableshowstheperformancesoftheconsolidatedentityforthelastfiveyears:

Year-end(30June) 2019 2018 2017 2016 2015

Shareprice(US$) 0.03 0.03 0.04 0.02 0.10

Basic(loss)pershare(UScents) (0.26) (1.18) (1.96) (6.07) (2.76)

Therewerenodividendspaidduringtheyear.

As the consolidatedentitywas still in theexplorationanddevelopment stageduring the financial year, the linkbetweenremuneration,consolidatedentityperformanceandshareholderwealthistenuous.Sharepricesaresubjecttotheinfluenceofcoalpricesandmarketsentimenttowardthesector,andassuchincreasesordecreasesmayoccurquiteindependentofexecutiveperformanceorremuneration.

EmploymentandServicesAgreementsIt is theBoard’spolicy thatemploymentand/or servicesagreementsareentered intowithall ExecutiveDirectors, seniormanagementandemployees.

Agreements do not provide for pre-determining compensation values or method of payment. Rather the amount ofcompensationisdeterminedbytheBoardinaccordancewiththeremunerationpolicysetoutabove.

KMP are entitled to their statutory entitlements of accrued annual leave and long service leave together with anysuperannuationontermination.Nootherterminationpaymentsarepayable.

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Directors'ReportExecutiveDirectorsGerhardusKielenstynCokal Limited has an employment agreement withGerhardus Kielenstyn for the position of IndonesianCountryManagerwhichcommencedon1May2013.MrKielenstyn receives an annual base salary up toUS$480,000,inclusiveofbenefits.

MrKielenstyniseligibleforanannualperformancebonuson the discretion of the CEO, as the Group is an earlystageentity.

The employment agreementmay be terminated at anytime by the Company for Cause, being seriousmisconductorthehappeningofvariouseventsinrespectofMrKielenstyn’sconduct.

Mr Kielynstyn was appointed to the role of ChiefOperatingOfficer (COO) effective 24th of June 2016 andExecutive Director on 27 January 2017. Mr Kielenstynresignedon21August2019.

SeniorManagementChiefExecutiveOfficerMrJamesColemanwasappointedChiefExecutiveOfficeron27thof July2018. TheCompanyhasentered intoanemploymentagreementwithMrColeman.

The employment agreementmay be terminated with 4months’noticeoratanytimewithcause.

CFO/JointCompanySecretaryMr Teuku Juliansyah was appointed the position ofIndonesian Finance Manager commencing on the 23rdFebruary 2012. He was further made Joint CompanySecretaryon1stSeptember2015.

MrJuliansyahwasappointedtotheroleofChiefFinanceOfficer (CFO) effective 24th of June 2016. The Companydoesnot have a contract in placewithMr Juliansyah inhispositionofCFO.

MrJuliansyahiseligibleforanannualperformancebonuson the discretion of the CEO, as the Group is an earlystageentity.MrJuliansyahresignedon15thofNovember2018.

DetailsofKeyManagementPersonnel(KMP)(i) Directors

DomenicMartino,ChairmanandNon-ExecutiveDirector(appointedNon-ExecutiveDirector24December2010,appointedChairmanon27January2017)

PatrickHanna,Non-ExecutiveDirector(appointed24December2010)

GerhardusKielenstyn,ExecutiveDirector-IndonesiaCountryManager(appointed1May2013– 23June2016,appointedCOO24thJune2016,appointeddirector27January2017,resigned21August2019)

KaranBangur,Non-ExecutiveDirector(appointed10April2019)

(ii) SeniorManagementJamesColeman,ChiefExecutiveOfficer(appointed27July2018)

TeukuJuliansyah,CFO(appointed24June2016,resigned15November2018)andJointCompanySecretary(appointed1September2015,resigned15November2018)

RemunerationDetailsThe following tableof benefits andpaymentsdetails, inrespect to the financial years ended 30 June 2019 and2018, the component of remuneration for each keymanagementpersonoftheconsolidatedentity:

2019

Short-TermBenefits Post-Employment

TerminationBenefits

Share-basedpayments

Total

US$

%Remuneration

asequity

Salary&Fees

CashBonus

Othershort-term

benefits

Superannuation Equity-settled

(options)

Cash-settled

US$ US$ US$ US$ US$ US$ US$

Directors

DomenicMartino 77,760 - - - - - - 77,760 0%

PatrickHanna 71,280 - - - - - - 71,280 0%

KaranBangur* 30,043 - - 2,349 - - - 32,392 0%

GerhardusKielenstyn^ 209,630 - - - - 44,134 - 253,764 17%

Total 388,713 - - 2,349 - 44,134 - 435,196 11%

SeniorManagement

JamesColeman** 165,000 - - 15,674 - 55,944 - 236,618 24%

TeukuJuliansyah# 70,305 - - - 45,683 - - 115,988 0%

Total 235,305 - - 15,674 45,683 55,944 - 352,606 16%

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2018

Short-TermBenefits Post-Employment

TerminationBenefits

Share-basedpayments

Total

US$

%Remunerationasoptions

Salary&Fees

CashBonus

Othershort-term

benefits

Superannuation Equity-settled

(options)

Cash-settled

US$ US$ US$ US$ US$ US$ US$

DirectorsDomenicMartino 88,692 - - - - - - 88,692 0% PatrickHanna 88,692 - - - - - - 88,692 0% GerhardusKielenstyn^ 437,995 - - - - 51,005 - 489,000 10% Total 615,379 - - - - 51,005 - 666,384 8%

SeniorManagement

DuncanCornish^^ 3,431 - - - - - - 3,431 -

TeukuJuliansyah 170,055 - - - - - - 170,055 -

Total 173,486 - - - - - - 173,486 -

*AppointedasNon-ExecutiveDirectoron10April2019.Inadditiontodirectorfees,MrBangurreceivesafeeforservicesprovidedtoBBMwhichareincludedintheschedule^AppointedasExecutiveDirectoroftheCompanyon27January2017andappointedasCOOon24June2016.Resignedon21August2019**AppointedasChiefExecutiveOfficeron27July2018.Firstthreemonths’salarywaspaidinshares,beingUS$28,686(2018:US$nil)issuedon

20December2018.#Resignedon15November2018^^Resigned9August2017

AdvancestoKMPNiladvancestoKeyManagementPersonnelasat30June2019(2018:nil)havebeenmade.

CashBonuses,Performance-relatedBonusesandShare-basedPaymentsKMP and other executives may be paid cash bonuses or performance-related bonuses. Remuneration options on issueduringthe2019financialyeartoKMPwereasfollows:

Remun-erationtype

Grantdate Vestingdate

NumberExercisePrice

US$

Grantvalue

(peroption)

US$

Percentagevested/

paidduringyear

%

Percentageforfeited/cancelledduringyear

%

Percentageremaining

asunvested

%

Expirydate

ConsolidatedentityKMP

GerhardusKielenstyn Options 22/12/2017 Note1 1,000,000 0.09 0.02 - - 100% 22/12/2020

GerhardusKielenstyn Options 22/12/2017 Note2 4,000,000 0.12 0.02 - - 100% 22/12/2020

JamesColeman Options 20/12/2018 Note3 3,000,000 0.03 0.01 - - 100% 22/12/2021

JamesColeman Options

20/12/2018Note4 3,000,000 0.04 0.01 - - 100% 22/12/2021

JamesColeman Options

20/12/2018Note5 3,000,000 0.05 0.01 - - 100% 22/12/2021

JamesColeman Options 20/12/2018 Note6 5,000,000 0.07 0.01 - - 100% 22/12/2021

Note1:vestingonproductionof100,000tonnesofcoalNote2:vestingonachievingaconsistentproductionrateforthreemonthsof45,000tonnesofcoalpermonthNote3:vestingonachievingaconsistentproductionrateforthreemonthsof20,000tonnesofcoalpermonthNote4:vestingonachievingaconsistentproductionrateforthreemonthsof40,000tonnesofcoalpermonthNote5:vestinguponcommencementofshallowriverbargingNote6:vestinguponfirstshipmentofcokingcoalfromBBM

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Directors'ReportOptionsholdingsDetailsofshare-basedpaymentstoKMPandotherexecutivesawardedandvested/unvestedduringtheyearended30June2019and30June2018aredetailedinthetablebelow:

Balance

1July2018Grantedas

RemunerationExercise

ofOptionsNetChange

OtherBalance

30June2019

Totalvestedat30June

2019

Totalvestedand

exercisableat30June2019

Totalvestedandunexercisableat30June2019

Directors DomenicMartino - - - - - - - -PatrickHanna - - - - - - - -KaranBangur^^ - - - - - - - -GerhardusKielenstyn 9,000,000 - - (4,000,000) 5,000,000 - - -SeniorManagement

JamesColeman* - 14,000,000 - - 14,000,000 - - -TeukuJuliansyah*** 500,000 - - (500,000) - - - -Total 9,500,000 14,000,000 - (4,500,000) 19,000,000 - - -

Balance1July2017

GrantedasRemuneration

ExerciseofOptions

NetChangeOther

Balance30June2018

Totalvestedat30June

2018

Totalvestedand


Totalvestedandunexercisableat30June2018

Directors DomenicMartino# - - - - - - - -PatrickHanna - - - - - - - -GerhardusKielenstyn^ 8,000,000 5,000,000 - (4,000,000) 9,000,000 4,000,000 4,000,000 -SeniorManagement

DuncanCornish** - - - - - - - -TeukuJuliansyah 500,000 - - - 500,000 500,000 500,000 -Total 8,500,000 5,000,000 - (4,000,000) 9,500,000 4,500,000 4,500,000 -*AppointedasChiefExecutiveOfficeron27July2018**Resigned9August2017***Resigned15November2018#AppointedasChairmanoftheCompanyon27January2017^AppointedasExecutiveDirectoroftheCompanyon27January2017andappointedasCOOon24June2016^^AppointedasNon-ExecutiveDirectoron10April2019TheoptionswereissuedtothedirectorandseniormanagementofCokalLimitedtoaligncomparativeshareholderreturnandrewardfordirectorandseniormanagement.

AlloptionsissuedbyCokalLimitedentitletheholdertooneordinaryshareinCokalLimitedforeachoptionexercised.

Alloptionsgrantedaspartofremunerationweregrantedfornilconsideration. Oncevested,optionscanbeexercisedatanytimeuptotheexpirydate.

The consolidated entity does not currently have a policy prohibiting directors and executives from entering intoarrangements toprotect thevalueofunvestedoptions. Nodirectorsorexecutiveshaveentered intocontracts tohedgetheirexposuretooptionsawardedaspartoftheirremunerationpackage.

ShareholdingsDetailsofordinaryshareshelddirectly,indirectlyorbeneficiallybyKMPandtheirrelatedpartiesareasfollows:

Balance1July2018


OnExerciseofOptions

NetChangeOther

Balance30June2019●

Directors DomenicMartino 37,120,001 - - - 37,120,001PatrickHanna 25,800,000 - - - 25,800,000KaranBangur~ - - - 148,125,000 148,125,000GarryKielenstyn - - - - -SeniorManagement

JamesColeman** - 1,245,031 - - 1,245,031TeukuJuliansyah*** - - - - -Total 62,920,001 1,245,031 - 148,125,000 212,290,032

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Balance

1July2017Grantedas

RemunerationOnExerciseofOptions

NetChangeOther

Balance30June2018●

Directors DomenicMartino 37,120,001 - - - 37,120,001PatrickHanna 25,800,000 - - - 25,800,000GarryKielenstyn - - - - SeniorManagement

DuncanCornish* 2,401,215 - - - 2,401,215TeukuJuliansyah - - - - -

Total 65,321,216 - - - 65,321,216

*Resigned9August2017**Appointed27July2018***Resigned15November2018●Ifpositionceasedduringthefinancialyear,balanceasatthatdate~AppointedasNon-ExecutiveDirectoroftheCompanyon10April2019TransactionswithKMPandtheirrelatedentitiesMr Domenic Martino

• Asat30June2019directorfeestotalingUS$182,724(2018:US$148,615)remainoutstandingtoMrMartino.• As at 30 June 2019 a loan of US$nil (2018: US$44,346) was owing toMrMartino by the Company. This loanwas

providedforworkingcapitalpurposes,isrepayableondemandanddoesnotaccrueinterest.• Asat30 June2019,MrMartinowasowedUS$2,242 (2018:US$67,128) forexpensespaidon theCompany’sbehalf.

Thisamountisrepayableondemandanddoesnotaccrueinterest.• On9August2017theCompanyenteredintoanagreementwithIndianOceanCorporatePtyLtd,acompanyofwhich

MrMartinoisadirector,forcompanysecretarialservicesatacostofAU$4,000(exclGST)permonth.Theservicesarebased on normal commercial terms and conditions. As at 30 June 2019, company secretarial fees of US$nil (2018:US$16,000)) remain outstanding. In addition, during the 2019 financial year, Indian Ocean Corporate Pty Ltd hasprovided corporate advisory services totalingUS$69,731 (2018: US$218,483) and assistancewith the preparation ofreports,totalingUS$46,550(2018:US$26,422).AnamountofUS$15,400wasoutstandingasat30June2019

Mr Patrick Hanna

• Asat30June2019directorfeestotalingUS$156,622(2018:US$148,615)remainoutstandingtoMrHanna.• Asat30June2019aloanofAUD108,500(US$76,981)(2018:US$80,192)wasowingtoMrHannabytheCompany.This

loanwasforworkingcapitalpurposes,isrepayableondemandanddoesnotaccrueinterest.

Mr Gerhardus Kielenstyn

• Asat30June2019remunerationfeestotalingUS$Nil(2018:US$51,200)remainoutstandingtoMrKielenstyn.• Asat30June2019aloanofUS$83,041(2018:US$33,000andUS$90,000)wasowingtoMrKielenstynbytheCompany.

Theseloansarerepayableondemandanddonotaccrueinterest.

Mr James Coleman

• Asat30June2019remunerationtotalingUS$165,675(2018:US$nil)remainsoutstandingtoMrColeman.

Mr Teuku Juliansyah

• Asat30June2019remunerationfeestotalingUS$nil(2018:US$37,837)remainoutstandingtoMrJuliansyah.• Asat30June2019and30June2018thefollowingloanswereowingtoMrJuliansyah.Interestonallloanswasaccrued

untilrepayment.

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Directors'Report2019financialyearPrincipal

Interestrateper

month

Interestaccruedatbeginningof

year

Totalinterestcharged(inclanypenalty)forthe

Year

Amountrepaidduringyear

AmountOutstandingasat30June2019

IDR1,850,000,000 6.5% IDR601,250,000 IDR584,914,500 (IDR3,036,164,500) -

IDR541,895,604 7.5% IDR312,347,864 IDR39,838,670 (IDR894,082,138) -

IDR340,000,000 6.5% IDR265,200,000 IDR37,925,000 (IDR643,125,000) -

IDR245,000,000 Nil - - (IDR245,000,000) -

IDR2,976,895,604(US$209,640)

IDR1,178,797,864(US$83,014)

IDR662,678,170(US$46,667)

(IDR4,818,371,638)((US$339,321))

-

2018financialyearPrincipal

Interestratepermonth

TotalinterestchargedfortheYear



IDR1,850,000,000 6.5% IDR1,443,000,000 (IDR841,750,000) IDR2,451,250,000

IDR541,895,604 7.5% IDR487,706,044 (IDR175,358,108) IDR772,959,199

IDR340,000,000 6.5% IDR265,200,000 - IDR420,600,000

IDR245,000,000 Nil - - IDR245,000,000

IDR2,976,895,604(US$207,335)

IDR2,195,906,044(US$134,421)

(IDR1,017,108,180)((US$70,840))

IDR3,889,809,199(US$270,916)

GiventheCompany’sfinancialpositionduringtheyear,thedirectorsconsideredtheaboveinterestratesarms’lengthforanimmediateshort-termloan,withnosecurityovertheCompany’sassets.

Directors’MeetingsThenumberofmeetingsofDirectorsheldduringtheyearandthenumberofmeetingsattendedbyeachDirectorwasasfollows:

Board

Numberofmeetingsheldwhileinoffice

Meetingsattended

DomenicMartino 4 4

PatHanna 4 4

KaranBangur 2 2

GarryKielenstyn 4 4

IndemnificationandInsuranceofDirectors,OfficersandAuditorEachofthecurrentDirectorsandSecretariesofCokalLimitedhaveenteredintoaDeedwithCokalLimitedwherebyCokalLimited has provided certain contractual rights of access to books and records of Cokal Limited to those Directors andSecretaries.

CokalLimitedhasinsuredalloftheDirectorsoftheconsolidatedentity.Thecontractofinsuranceprohibitsthedisclosureofthenatureoftheliabilitiescoveredandamountofthepremiumpaid.TheCorporationsActdoesnotrequiredisclosureoftheinformationinthesecircumstances.

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of theterms of its auditengagement agreement against claims by third parties arising from the audit (for anunspecified amount). No paymenthas been madeto indemnifyErnst&Young during or since the financialyear.

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Directors'Report

OptionsAt 30 June 2019, there were 96,000,000 unissuedordinarysharesunderoptionsasfollows:

• 1,000,000 unlisted options exercisable at AU$0.10onorbefore19September2020

• 1,000,000 unlisted options exercisable at AU$0.12on or before 22 December 2020 (vesting onproductionof100,000tonnesofcoal)

• 4,000,000 unlisted options exercisable at AU$0.15on or before 22 December 2020 (vesting onachieving a consistent production rate for threemonthsof45,000tonnesofcoalpermonth)

• 75,000,000unlistedoptionsexercisableatAU$0.016on or before 16 February 2023 (vesting n allPlatinumloansbeingreleasedanddischargedundertheDebtRestructureTransaction)

• 1,000,000 unlisted options exercisable at AU$0.045onorbefore20December2021

• 3,000,000 unlisted options exercisable at AU$0.045on or before 20 December 2021 (vesting uponproduction of 20,000 tonnes per month of coal(includingPCI)forthreeconsecutivemonths)

• 3,000,000 unlisted options exercisable at AU$0.055on or before 20 December 2021 (vesting uponproduction of 40,000 tonnes per month of coal(includingPCI)forthreeconsecutivemonths)

• 3,000,000 unlisted options exercisable at AU$0.07on or before 20 December 2021 (vesting uponcommencementofshallowriverbarging)

• 5,000,000 unlisted options exercisable at AU$0.10onor before 20December 2021 (vestingupon firstshipmentofcokingcoalfromBBM)

No option holder has any right under the options toparticipate in any other share issue of Cokal Limited oranyotherentity.

Subsequent to year end, no ordinary shares in CokalLimitedwereissuedasaresultoftheexerciseofoptions.

ProceedingsonBehalfoftheConsolidatedEntityNo person has applied for leave of Court to bringproceedings on behalf of the consolidated entity orintervene in any proceedings towhich the consolidatedentity isapartyforthepurposesoftakingresponsibilityonbehalfoftheconsolidatedentityforalloranypartofthoseproceedings.

The consolidated entity was not a party to any suchproceedingsduringtheyear.

Auditor’sIndependenceDeclarationThe Auditor’s Independence Declaration forms part oftheDirectors’Reportandcanbefoundonpage21.

CorporateGovernanceIn recognising the need for the highest standards ofcorporatebehaviourandaccountability, thedirectorsofCokalLimitedsupportandhaveadheredtotheprinciplesof corporate governance. Cokal Limited’s CorporateGovernanceStatementhasbeenmadepubliclyavailableontheCompany’swebsiteat:www.cokal.com.au.

This report is signed in accordancewith a resolution ofthedirectors.

CokalLimitedDomenicMartinoChairman

Sydney,1October2019

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A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation

Ernst & Young111 Eagle StreetBrisbane QLD 4000 AustraliaGPO Box 7878 Brisbane QLD 4001

Tel: +61 7 3011 3333Fax: +61 7 3011 3100ey.com/au

Auditor’s Independence Declaration to the Directors of Cokal Limited

As lead auditor for the audit of Cokal Limited for the financial year ended 30 June 2019, I declare tothe best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 inrelation to the audit; and

b) no contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Cokal Limited and the entities it controlled during the financial year.

Ernst & Young

Andrew CarrickPartnerBrisbane1 October 2019

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ShareholderInformationAdditional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is asfollows.Theinformationiscurrentasat18September2019

(a) DistributionofOrdinarySharesandOptionsThenumberofholders,bysizeofholding,ineachclassofsecurityis:

Ordinaryshares

Numberofholders Numberofshares

1–1,000 357 257,440

1,001–5,000 123 352,155

5,001–10,000 228 2,056,756

10,001–100,000 553 23,118,162

100,001andover 467 892,609,701

Total 1,728 918,394,214

Thenumberofshareholdersholdinglessthanamarketableparcel(atotalof9,999ordinaryshares)is566onasharepriceofAU$0.05.

Unlistedoptions

(AU$0.10@19/9/2020)

Unlistedoptions

(AU$0.12@22/12/2020)

Unlistedoptions

(AU$0.15@22/12/2020)

Unlistedoptions

(AU$0.016@22/12/2020)

No.ofholders

No.ofoptions

No.ofholders

No.ofoptions

No.ofholder

No.ofoptions

No.ofholders No.ofoptions

1–1,000 - - - - - - - -

1,001–5,000- -

-

-

-

-

-

-

5,001–10,000- -

-

-

-

-

-

-

10,001–100,000- -

-

-

-

-

-

-

100,001andover1 1,000,000

1

1,000,000

1

4,000,000

4

75,000,000

Total 1 1,000,000 1 1,000,000 1 4,000,000 4 75,000,000

Unlistedoptions

(AU$0.045@20/12/2021)

Unlistedoptions

(AU$0.045@22/12/2021)

Unlistedoptions

(AU$0.055@20/12/2021)

Unlistedoptions

(AU$0.07@20/12/2021)

Unlistedoptions

(AU$0.10@22/12/2021)

No.of

holdersNo.of

optionsNo.of

holdersNo.of

optionsNo.ofholder

No.ofoptions

No.of

holders

No.ofoptions

No.ofholders

No.ofoptions

1–1,000 - - - - - - - - - -

1,001–5,000- -

-

-

-

-

-

- - -

5,001–10,000- -

-

-

-

-

-

- - -

10,001–100,000- -

-

-

-

-

-

- - -

100,001andover1 1,000,000

1

3,000,000

1

3,000,000

1

3,000,000 1 5,000,000

Total 1 1,000,000 1 3,000,000 1 3,000,000 1 3,000,000 1 5,000,000

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ShareholderInformationTwentyLargestHoldersThenamesofthetwentylargestholders,ineachclassofquotedsecurity(ordinaryshares)are:

Numberofshares %oftotalshares

1 AAHANAMINERALRESOURCESSDNBHD 184,641,719 20.10%

2 HSBCCUSTODYNOMINEES(AUSTRALIA)LIMITED 57,734,227 6.27%

3 BNPPARIBASNOMINEESPTYLTD 41,676,211 4.54%

4 PHCAPITALPTYLTD<THEHANNAFAMILYA/C> 27,000,000 2.94%

5 BNPPARIBASNOMSPTYLTD<DRP> 21,671,020 2.36%

6 LEMEYERHOLDINGSLIMITED 18,000,000 1.96%

7 CITICORPNOMINEESPTYLIMITED 17,877,293 1.95%

8 MRSLAURALYNCH 17,500,000 1.91%

9 GEBRUNPTYLTD<PETLAA/C> 17,500,000 1.91%10 TEKNIKSPUBLICATIONSPTYLIMITED<SUPERFUNDA/C> 16,590,000 1.81%

11 XINHUAPTYLTD<JINGJINGSUPERFUNDA/C> 12,631,200 1.38%

12 HORVATHINVESTMENTSPTYLTD<HORVATHFAMILYA/C> 12,271,799 1.34%

13 BNPPARIBASNOMINEESPTYLTD<LDNUKBCHDRPA/C> 11,812,500 1.29%

14 MSKWAILANCHIN 11,800,000 1.29%

15 MRMICHAELCHRISTOPHERHORVATH 11,704,207 1.27%

16 MRSTEPHENRODNEYHARIONO<DENVHIVALUEA/C> 11,400,000 1.24%

17 BATMANMANAGEMENTGROUPPTYLTD 10,791,007 1.18%

18 MRVASILIOSVOTSARIS 10,103,026 1.10%

19 TJSMOCK&COPTYLTD<MIDDLETONFAMILYA/C> 10,000,000 1.09%

20 LANNEPTYLTD<LANNEINVESTMENTA/C> 8,420,800 0.92%

Top20 531,125,009 57.83%

Total 918,394,214 100.00%

OptionHoldersThenamesofholdersholding20%ormoreofoptionsonissue:

Unlistedoptions

(AU$0.10@19/9/2020)

Unlistedoptions

(AU$0.12@22/12/2020)

Unlistedoptions

(AU$0.15@22/12/2020)

Unlistedoptions

(AU$0.016@22/12/2020)

No.ofoptions No.ofoptions No.ofoptions No.ofoptions

HELBRAUNHOLDINGSPTYLTD 1,000,000 - - -

MRGERHARDUSKIELENSTYN - 1,000,000 4,000,000 -

AAHANAMINERALRESOURCESSDNBHD -

-

-

37,500,000

NORTHROCKFINANCIALLLC - - - 28,924,426

TOTAL 66,424,426

Totaloptionsinclass 1,000,000 1,000,000 4,000,000 75,000,000

Unlistedoptions

(AU$0.045@20/12/2021)

Unlistedoptions

(AU$0.045@22/12/2021)

Unlistedoptions

(AU$0.055@20/12/2021)

Unlistedoptions

(AU$0.07@20/12/2021)

Unlistedoptions

(AU$0.10@22/12/2021)

No.ofoptions No.ofoptions No.ofoptions No.ofoptions No.ofoptions

LIGHTGLOWENTERPRISESPTYLTD<PALOMAINVESTMENTSA/C> 1,000,000

-

-

- -

FARINAPTYLTD<DUETTOSUPERANNUATIONFUND> -

3,000,000

3,000,000

3,000,000 5,000,000

TOTAL 1,000,000 3,000,000 3,000,000 3,000,000 5,000,000

Totaloptionsinclass 1,000,000 3,000,000 3,000,000 3,000,000 5,000,000

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ShareholderInformationSubstantialshareholders

SubstantialshareholdersasshowninsubstantialshareholdernoticesreceivedbyCokalare:NameofShareholder: OrdinaryShares:

AahanaMineralResourcesSdnBhd 184,641,719

PeterAnthonyLynch(estate)&LauraAnneLynch 56,052,000

TheCompanynotesthat,asat18September2019,thefollowingshareholdersownsubstantialshareholdings(>=5.0%)inCokal:NameofShareholder: Ordinary

Shares: %oftotalshares:

HSBCCustodyNominees(Australia)Limited 57,734,227 6.27%

(b)VotingrightsAllordinarysharescarryonevotepersharewithoutrestriction.

Optionsdonotcarryvotingrights.

(c)RestrictedsecuritiesTheGroupcurrentlyhasnorestrictedsecuritiesonissue.

(d)On-marketbuy-backThereisnotacurrenton-marketbuy-backinplace.

(e)BusinessObjectivesTheconsolidatedentityhasuseditscashandassetsthatarereadilyconvertibletocashinawayconsistentwithitsbusinessobjectives.

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InterestsinTenementsandProjectsCokalLimitedhadthefollowinginterestsinprojectsasat30June2019:

IndonesiaProject Location %Interest

PTAnugerahAlamKatingan(AAK) Kalimantan

75%

PTBumiBaritoMineral(BBM) Kalimantan

60%

PTBorneoBaraPrima(BBP) Kalimantan

60%

PTTambangBenuaAlamRaya(TBAR) Kalimantan

75%

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ConsolidatedStatementofComprehensiveIncomefortheyearended30June2019

Note

2019

2018

US$ US$

Revenuefromcoalsales 2 470,109 652,074

Revenueandotherincome 2 4,631,743 98

Employeebenefitsexpenses (1,468,388) (1,846,222)

Depreciationexpenses 10 (82,657) (25,239)

Arrangementfee 21 (111,386) (996,198)

Productionexpenses (454,867) (3,808,113)

Financecosts (36,450) (639,611)

Legalexpenses (34,557) (75,556)

Administrationandconsultingexpenses (827,175) (650,913)

Licencefees (1,549,658) -

Write-offproperty,plantandequipment 10 (1,162,166) -

Sharebasedpaymentexpenseonamendmentofdebttoroyaltyconversionagreement

24

(1,003,561)

-

Otherexpenses (226,704) (406,463)

Lossbeforeincometaxexpense (1,855,717) (7,796,143)

Incometaxexpense 4 - -

Lossfortheperiod (1,855,717) (7,796,143)

Othercomprehensiveincome

Itemsmaybereclassifiedtoprofitorlossinsubsequentperiods(netoftax):

Exchangetranslationdifferences - -

Totalcomprehensivelossfortheperiod (1,855,717) (7,796,143)

Earnings/(Loss)pershareforthelossattributabletoownersofCokalLimited: Cents Cents

Losspershare(centspershare) 6 (0.26) (1.18)

Dilutedlosspershare(centspershare) 6 (0.26) (1.18)

TheaboveConsolidatedStatementofComprehensiveIncomeshouldbereadinconjunctionwiththeaccompanyingnotes.

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ConsolidatedStatementofFinancialPositionasat30June2019

Note

2019

2018

US$ US$

CurrentAssets

Cashandcashequivalents 7 127,361 15,502

Shorttermdeposits 7 138,916 138,916

Accountsreceivable 8 2,102 23,134

Othercurrentassets 12 17,470 6,849

TotalCurrentAssets 285,849 184,401

Non-CurrentAssets Property,plantandequipment 10 186,831 1,428,811

Explorationandevaluationassets 11 25,067,202 25,067,202

Othernon-currentassets 12 38,148 35,362

TotalNon-CurrentAssets 25,292,181 26,531,375 TOTALASSETS 25,578,030 26,715,776 CurrentLiabilities

Accountspayableandothers 13 8,369,775 5,461,564

Convertiblenotes 14 - 364,108

Interestbearingloans 15 9,261,535 14,163,218

TotalCurrentLiabilities 17,631,310 19,988,890

Non-CurrentLiabilities

TotalNon-CurrentLiabilities - -

TOTALLIABILITIES 17,631,310 19,988,890

NETASSETS 7,946,720 6,726,886

Equity

Issuedcapital 16 91,686,061 89,727,054

Reserves 17 6,116,687 5,000,143

Accumulatedlosses 18 (89,856,028) (88,000,311)

TOTALEQUITY 7,946,720 6,726,886

TheaboveConsolidatedStatementofFinancialPositionshouldbereadinconjunctionwiththeaccompanyingnotes.

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ConsolidatedStatementofChangesinEquityfortheyearended30June2019

Issued

capital

ReservesAccumulated

losses

Total

US$ US$ US$ US$

At1July2018 89,727,054 5,000,143 (88,000,311) 6,726,886

Totalcomprehensivelossfortheyear

Lossfortheyear - - (1,855,717) (1,855,717)

Othercomprehensiveincome - - - -

- - (1,855,717) (1,855,717)

Transactionswithownersintheircapacityasowners

Issueofsharecapital 1,959,007 - - 1,959,007

Sharebasedpayments - 1,116,544 - 1,116,544

1,959,007 1,116,544 - 3,075,551

At30June2019 91,686,061 6,116,687 (89,856,028) 7,946,720

At1July2017 84,752,154 4,907,414 (80,789,063) 9,455,400

Totalcomprehensivelossfortheyear

Lossfortheyear - - (7,796,143) (7,796,143)

Othercomprehensiveincome - - - -

- - (7,796,143) (7,796,143)

Transactionswithownersintheircapacityasowners

Issueofsharecapital 4,974,900 - - 4,974,900

Sharebasedpayments - 92,729 - 92,729

4,974,900 92,729 - 5,067,629

At30June2018 89,727,054 5,000,143 (88,000,311) 6,726,886

TheaboveConsolidatedStatementofChangesinEquityshouldbereadinconjunctionwiththeaccompanyingnotes.

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ConsolidatedStatementofCashFlowsfortheyearended30June2019

Note

2019

2018

US$ US$

CashFlowsfromOperatingActivities

Receiptfromcustomers 162,921 959,263

Paymentstosuppliersandemployees (3,027,126) (4,039,122)

Interestreceived 976 98

Financecostspaid (114,040) (215,476)

Paymentofarrangementfee 21 - (496,198)

Netcashoutflowfromoperatingactivities 23 (2,977,269) (3,791,435)

CashFlowsfromInvestingActivities

Paymentsforproperty,plantandequipment (2,843) (3,155)

Proceedsfromleasedeposit - 136,868

Netcashoutflowfrominvestingactivities (2.843) 133,713

CashFlowsfromFinancingActivities

Proceedsfromissueofsharesandoptions 1,595,822 1,744,476

(Repayment)/Proceedsfromconvertiblenote (186,251) 1,567,177

Proceedsfromborrowings 2,000,000 333,307

Repaymentofborrowings (317,600) -

Netcashinflowfromfinancingactivities 3,091,971 3,644,960

Net(decrease)/increaseincashandcashequivalents

111,859

(12,762)

Cashandcashequivalentsatbeginningofyear 7 15,502 28,264

Netforeignexchangedifferences - -

Cashandcashequivalentsatendofyear 127,361 15,502

TheaboveConsolidatedStatementofCashFlowsshouldbereadinconjunctionwiththeaccompanyingnotes.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note1:SummaryofSignificantAccountingPolicies(a) GeneralinformationThe consolidated financial statements of Cokal Limited for the year ended 30 June 2019 were authorised for issue inaccordancewitharesolutionoftheDirectorsdated30September2019andcoverstheconsolidatedentity(the“Group”or“Cokal”)consistingofCokalLimited(the“Company”)anditssubsidiaries.

ThefinancialstatementsarepresentedinUnitedStatesDollars(“US$”or“US$”).

CokalLimited(theparent)isacompanylimitedbyshares,incorporatedanddomiciledinAustralia,whosesharesarepubliclytradedontheAustralianSecuritiesExchange.

TheprincipalactivitiesoftheGroupduringtheyearwerefocusedontheidentificationanddevelopmentofcoalwithinthehighlyprospectiveCentralKalimantancokingcoalbasininIndonesia.

(b) BasisofpreparationThefinancialstatementsaregeneralpurposefinancialstatementswhichhavebeenpreparedinaccordancewithAustralianAccountingStandardsandtheCorporationsAct2001.

ThefinancialstatementsalsocomplywithInternationalFinancialReportingStandards(IFRS)asissuedbytheInternationalAccountingStandardsBoard(IASB).

Thefinancialstatementshavebeenpreparedonahistoricalcostbasis.

(c) GoingconcernAt30June2019,theGroup’scurrentliabilitiesexceedthecurrentassetsbyUS$17,248,643(30June2018:US$19,804,489).Thispositionisdueto:• TheclassificationoftheGroupdebtwithPlatinumPartners(refernote15)ofUS$9,261,535asacurrentliability;• TheclassificationoftheGroup’sliabilitywithPTBaraMineralAsri(BMAGroup)(refernote13)of$2,000,000asa

currentliability;and• TheGroup’sarrearsoftradeandotherpayables.AsignificantnumberoftheGroup’screditors,includingthedirectors,

areprovidinginformalfinancialsupporttotheentity.

On22July2016,CokalannouncedithadreachedanagreementwithPlatinumPartnersfortheconversionofalloutstandingloansowingtothemtoproductionroyalties.Theroyaltieswillbepayableon1%oftherealisedsellingpriceofcoal(FOB)fromtheBumiBaritoMineralProject(BBM)andPTTambangBenuaAlamRaya(TBAR)projectsuptoamaximumofUS$40million.Underthearrangement,nominimumroyaltyispayableandtheroyaltyisonlypayableasandwhencoalisminedandsold.

On29April2017,theGroupenteredintoaRoyaltyDeedwithPlatinumPartners(refernote15)toconvertalloutstandingloansowingtothemtoproductionroyalties(thisformalisedtheagreementon22July2016)subjecttocertainconditionsprecedent.Duringtheyearended30June2019,theCompanyenteredintoafurtheragreementwithPlatinumPartners,theeffectofwhichconfirmedCokal’ssatisfactionwithanumberoftheconditionsprecedenttotheRoyaltyDeedandextendedthedateformeetingalloftheremainingconditionsprecedent(the“SubsequentConditions”)undertheRoyaltyDeedforconversionoftwo-thirdsofthePlatinumLoans(being$9,261,535)to31July2020.Inaddition,undertheagreementwhenCokalcancelsandreissues37.5millionoptionstoPlatinumPartners,one-thirdoftheGroup’sdebtwithPlatinumPartnersisdischargedandreleased.Thecancellationandreissueofthe37.5millionoptionsoccurredon10January2019.

Inaddition,theGroup is intheprocessofagreeinganarrangementwiththeBMAGroup inrespectofthe$2.0millionoffundingreceivedfrompursuanttotheKeyPrinciplesofAgreementdated21September2018.Itiscurrentlyanticipatedtheliabilitywillberepaidbasedona$pertonneofcoalsoldorpercentageofcoalsalesproceedsfromtheBBMproject.

The financial report has been prepared on a going concern basis which contemplates the continuity of normal businessactivitiesandtherealisationofassetsanddischargeofliabilitiesintheordinarycourseofbusiness.TheabilityoftheGrouptocontinuetoasagoingconcernisimpactedbyanumberofmattersincluding:• SatisfactionoftheSubsequentConditionsundertheRoyaltyDeed(asamended)withPlatinumPartnersandthe

conversionoftheremainingtwo-thirdsoftheofthePlatinumLoanstoaroyaltyoncoal;• FinalisationofthearrangementswiththeBMAGroupinrespectoftherepaymentofthe$2.0millionreceivedpursuant

totheKeyPrinciplesofAgreementdated21September2018;

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019 (c)Goingconcern(Cont’d) • ThecontinuedfinancialsupportofmanagementanddirectorswhohaveprovidedshorttermloanstotheGroupand/or

haveagreedtonotrequiretheGrouptopayamountsowingtothemuntilsuchtimeascashflowsaregeneratedbytheBBMprojectorhaveotherwiseagreedtohavetheamountspayabletothemsatisfiedbywayofashareissue(subjecttoshareholderapproval);

• ThecontinuedwillingnessofcreditorstoextendpaymenttermstotheGroupuntilsuchtimeascashflowaregeneratedbytheBBMproject;and

• Thesuccessfulraisingofsufficientfunding,throughdebt,equityorotherarrangements(oracombinationoftransactions)toprogressthedevelopmentofthelargerBBMproject,includingmeetingcapitalexpenditure,tenementpurchasecommitments(refernote21)andworkingcapitalrequirements,untilsuchtimeastheprojectisinproductionanditsrevenuesfromcoalsalesaresufficienttomeetitscashoutflows.

Should theseavenuesbedelayedor fail tomaterialize, theGrouphas someability to scaleback itsactivities tohelp theGrouptomanagetomeetitsdebtsasandwhentheyfalldueintheshortterm.However,shouldtheabovemattersnotbesuccessfullyresolved,theGroupmaynotbeabletocontinueasagoingconcern.IntheeventthattheGroupisunabletosatisfytheSubsequentConditionstotheRoyaltyDeed,furtherre-negotiationofthearrangementswithPlatinumPartnerswillberequired. Importantly,theGroup’ssignificantarrearsoftradeandotherpayablesmeansit’sabilitytocontinueasagoingconcernisdependenton creditors, includingmanagement and thedirectors, extendingpayment terms, providing informal financialsupportandnotdemandingpaymentofamountsowedtotheminexcessoftheGroup’savailablefundsatthetime.Atthedateofthisreport,nocreditororlenderoftheGroup,includingPlatinumPartners,havemadedemandsforpayment. During the year the Company completed a placement to raise US$1,172,628 (before issue costs) through the issue of51,265,000sharesatanissuepriceofAU$0.032persharetosophisticatedandprofessionalinvestorsandUS$423,194fromtheissueofsharesonconversionofoptionsatanexercisepriceofAU$0.016.Inaddition,postyearend,theCompanyhascompletedanEntitlementIssue,raisingapproximatelyUS$3.5million. ThefundsraisedfromtheaboveplacementshasenabledtheGrouptomeetitsrequiredcashoutflowstothedateofthisreportbutarrearsoftradeandotherpayablesremains. TheDirectorsareconfidentgiventhecurrentpermittingandfinancingprocessesbeingundertakenandannouncedtothemarketthattheGroupwillbesuccessfulinitsendeavourstodevelopthelargerBBMprojectandwillsatisfytheSubsequentConditionsinthePlatinumPartnersRoyaltyDeed(asamended).ThedirectorsbelievethatthecommencementofoperationattheBBMproject(andtheforecastgeneratingofoperatingcashinflows)inconjunctionwithplannedcapitalraisingswillenableittosatisfyitsworkingcapitalrequirements(includingitsarrearsoftradeandotherpayables).Thisbeingthecase,the directors have a reasonable expectation that given the status of the current permitting and financing processes, theGroup’screditorswill continuetoextendpayment terms,provide informal financial supportandnotdemandpaymentofamountsowedto them inexcessof theGroup’savailable funds.Asa result, the financial reporthasbeenpreparedonagoingconcernbasis. The financial report does not include any adjustments relating to the recoverability and classification of recorded assetamountsortotheamountsandclassificationofliabilitiesshouldtheGroupbeunsuccessfulinraisingfundstoenableittorealiseitsassetsanddischargeitsliabilitiesintheordinarycourseofbusiness. (d) Newaccountingstandardsandinterpretations(i) Changesinaccountingpolicyanddisclosures

TheGroup has not early adopted any other standard, interpretation or amendment that has been issued but is not yeteffective.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019

(ii) AccountingStandardsandInterpretationsissuedbutnotyeteffective

TheGrouphasadoptedallthemandatorynewandamendedAccountingStandardsissuedthatarerelevanttoitsoperationsand effective for the current reporting period. There was no material impact on the financial report as a result of themandatorynewandamendedAccountingStandardsadopted.

AASB9:FinancialInstruments

AASB 9 which contains accounting requirements for financial instruments, replacing AASB 139 Financial Instruments:Recognition and Measurement. The standard contains requirements in the areas of classification and measurement,impairment,hedgeaccountingandde-recognition.

ExistingfinancialassetsandliabilitiesoftheCompanywereassessedintermsoftherequirementsforAASB9.InthisregardtheadoptionofAASB9willimpactontheclassificationoffinancialassetsandliabilities:

OriginalmeasurementcategoryunderAASB139 (i.e.prior to1 July2018)

NewmeasurementcategoryunderAASB9 (i.e. from1 July2018)

Cashandcashequivalents FinancialassetsatamortisedLoansandreceivables FinancialassetsatamortisedFinancialliabilitiesatamortisedcost Financialliabilitiesatamortisedcost

Thechangesinclassificationhavenotresultsinanyre-measurementadjustmentsat1July2018.TheCompanyhasadoptedAASB9retrospectivelyfrom1July2018andhaselectednottorestatecomparativeinformation.

GiventhenatureoftheCompany’sbusinessandthenatureofitsfinancialassetssubjecttoanexpectedcreditloss(“ECL”)assessment,therewasnomaterialimpactarisingfromtheapplicationofthenewexpectedcreditlossrequirementsofAASB9.

AASB15:RevenuefromContractswithCustomers

AASB15RevenuefromContractswithCustomerswasissuedinDecember2015andestablishesafive-stepmodeltoaccountfor revenuearising fromcontractswith customers.UnderAASB15, revenue is recognisedatanamount that reflects theconsiderationtowhichanentityexpectstobeentitledinexchangefortransferringgoodsorservicestoacustomer.UnderAASB15,therevenuerecognitionmodelwillchangefromonebasedonthetransferofriskandrewardofownershiptothetransferofcontrolofownership.

AASB15requiresentitiestoexercisejudgement,takingintoconsiderationalloftherelevantfactsandcircumstanceswhenapplying each step of the model to contracts with their customers. The standard also specifies the accounting for theincremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standardrequiresenhancedandextensivedisclosuresaboutrevenuetohelpinvestorsbetterunderstandthenature,amount,timinganduncertaintyofrevenueandcashflowsfromcontractswithcustomers.

TheCompanyhasadoptedAASB15usingthemodifiedretrospectiveapproach.

CoalSales: therewerenochanges identifiedwithrespect to the timingoramountof revenuerecognition.Revenue fromcoalsalesisrecognisedatapointintimewhencontrolpassestothebuyer.Asallperformanceobligationsaresatisfiedatthat time, there are no remaining performance obligations under the contract. The transaction price is determined attransactiondateandtherearenofurtheradjustmentstothisprice.

TheGrouphasnotadoptedearly anyother standard, interpretation,or amendment thathasbeen issued,but isnot yeteffective.F

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(e) BasisofconsolidationTheconsolidated financial statements comprise the financial statementsof theCompanyand its subsidiariesat reportingdate. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with theinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee.Specifically,theGroupcontrolsaninvesteeifandonlyiftheGrouphas:• Powerovertheinvestee(i.e.existingrightsthatgiveitthecurrentabilitytodirecttherelevantactivitiesofthe

investee);• Exposure,orrights,tovariablereturnsfromitsinvolvementwiththeinvestee;and• Theabilitytouseitspowerovertheinvesteetoaffectitsreturns.

WhentheGrouphaslessthanamajorityofthevotingorsimilarrightsofaninvestee,theGroupconsidersallrelevantfactsandcircumstancesinassessingwhetherithaspoweroveraninvestee,including:• Thecontractualarrangementswiththeothervoteholdersoftheinvestee;• Rightsarisingfromothercontractualarrangements;and• TheGroup’svotingrightsandpotentialvotingrights.

TheGroupre-assesseswhetherornotitcontrolsaninvesteeiffactsandcircumstancesindicatethattherearechangestooneormoreofthethreeelementsofcontrol.ConsolidationofasubsidiarybeginswhentheGroupobtainscontroloverthesubsidiaryandceaseswhentheGrouplosescontrolofthesubsidiary.Assets,liabilities,incomeandexpensesofasubsidiaryacquiredordisposedofduringtheperiodareincludedinthestatementofcomprehensiveincomefromthedatetheGroupgainscontroluntilthedatetheGroupceasestocontrolthesubsidiary.

Profitorlossandeachcomponentofothercomprehensiveincome(OCI)areattributedtotheequityholdersoftheparentoftheGroupandtothenon-controllinginterests,evenifthisresultsinthenon-controllinginterestshavingadeficitbalance.Whennecessary,adjustmentsaremadetothefinancialstatementsofsubsidiariestobringtheiraccountingpoliciesintolinewiththeGroup’saccountingpolicies.Allintra-Groupassetsandliabilities,equity,income,expensesandcashflowsrelatingtotransactionsbetweenmembersoftheGroupareeliminatedinfullonconsolidation.

Achangeintheownershipinterestofasubsidiary,withoutalossofcontrol,isaccountedforasanequitytransaction.IftheGrouplosescontroloverasubsidiary,it:• De-recognisestheassets(includinggoodwill)andliabilitiesofthesubsidiary;• De-recognisesthecarryingamountofanynon-controllinginterests;• De-recognisesthecumulativetranslationdifferencesrecordedinequity;• Recognisesthefairvalueoftheconsiderationreceived;• Recognisesthefairvalueofanyinvestmentretained;• Recognisesanysurplusordeficitinprofitorloss;and• Reclassifiestheparent’sshareofcomponentspreviouslyrecognisedinOCItoprofitorlossorretainedearnings,as

appropriate,aswouldberequirediftheGrouphaddirectlydisposedoftherelatedassetsorliabilities.

(e) RevenuerecognitionTheGroupadoptedAASB15RevenuefromContractswithCustomers,aspermittedfrom1July2018.Todeterminewhethertorecogniserevenue,theGroupfollowsa5-stepprocess:1.Identifyingthecontractwithacustomer;2.Identifyingtheperformanceobligations;3.Determiningthetransactionprice;4.Allocatingthetransactionpricetotheperformanceobligations;and5.Recognisingrevenuewhen/asperformanceobligation(s)aresatisfied.TheGroup’srevenuefromcontractswithcustomersispredominatelysourcedfromthesaleofcoalfromitsBBMoperation.SaleofcoalTheGrouphasdeterminedthatrevenuefromthesaleofcoalisrecordedwhendeliveredtothecustomer(beingthepointatwhich controlpasses to the customer).At thispoint, theGrouphas satisfiedall itsperformanceobligationsunder thesalesagreementwiththecustomer.Therevenue is recognisedat100%of thesalevalue,calculatedbasedonthetonnessuppliedatthecontractedpricepertonne(adjustedforanyknownqualitypenalties).

InterestincomeInterestrevenueisrecognisedas interestaccruesusingtheeffective interestratemethod.This isamethodofcalculatingtheamortisedcostofafinancialassetandallocatingtheinterestincomeovertherelevantperiodusingtheeffectiveinterestrate,whichistheratethatexactlydiscountsestimatedfuturecashreceiptsthroughtheexpectedlifeofthefinancialassettothenetcarryingamountofthefinancialasset.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019(f) IncometaxTheincometaxexpensefortheyearisthetaxpayableonthecurrentyear'staxableincomebasedonthenationalincometaxrateforeachjurisdictionadjustedbychangesindeferredtaxassetsandliabilitiesattributabletotemporarydifferencesbetween the tax base of assets and liabilities and their carrying amounts in the financial statements, and to unused taxlosses.

Deferred tax assets and liabilities are recognised for all temporary differences, between carrying amounts of assets andliabilitiesforfinancialreportingpurposesandtheirrespectivetaxbases,atthetaxratesexpectedtoapplywhentheassetsarerecoveredorliabilitiessettled,basedonthosetaxrateswhichareenactedorsubstantivelyenactedforeachjurisdiction.Exceptionsaremadeforcertaintemporarydifferencesarisingoninitialrecognitionofanassetoraliabilityiftheyaroseinatransaction,otherthanabusinesscombination,thatatthetimeofthetransactiondidnotaffecteitheraccountingprofitortaxableprofit.

Deferred tax assets areonly recognised for deductible temporarydifferences andunused tax losses if it is probable thatfuturetaxableamountswillbeavailabletoutilisethosetemporarydifferencesandlosses.

Deferredtaxassetsandliabilitiesarenotrecognisedfortemporarydifferencesbetweenthecarryingamountandtaxbasesofinvestmentsinsubsidiaries,associatesandinterestsinjointventureswheretheparententityisabletocontrolthetimingofthereversalofthetemporarydifferencesanditisprobablethatthedifferenceswillnotreverseintheforeseeablefuture.

Currentanddeferredtaxbalancesrelatingtoamountsrecogniseddirectly inothercomprehensive incomeandequityarealsorecogniseddirectlyinothercomprehensiveincomeandequity,respectively.

Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextentthatitisnolongerprofitablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxassettobeutilised.

Deferredtaxassetsanddeferredtaxliabilitiesareoffsetonlyifalegallyenforceablerightexiststosetoffcurrenttaxassetsagainst tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxationauthority.

Cokal Limited and its wholly-owned subsidiaries are in the process of implementing the tax consolidation legislation inAustralia.CokalLimitedwillbetheheadentityinthetaxconsolidatedGroup.Oncethetaxconsolidationisexecuted,theseentitieswillbe taxedasa singleentityanddeferred taxassetsand liabilitieswillbeoffset in theseconsolidated financialstatements.

(g) Impairmentofnon-financialassetsotherthangoodwillAt theendofeach reportingperiod theGroupassesseswhether there is any indication that individualassetsother thangoodwill, are impaired.Where impairment indicatorsexist, recoverableamount isdeterminedand impairment lossesarerecognised in profit or losswhere the asset's carrying value exceeds its recoverable amount. Recoverable amount is thehigherofanasset'sFVLCDandVIU.ForthepurposeofassessingVIU,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscount rate that reflectscurrentmarketassessmentsof the timevalueofmoneyand therisksspecifictotheasset.

Where it isnotpossibletoestimatetherecoverableamount foran individualasset, theGroupestimatestherecoverableamountofthecash-generatingunittowhichtheassetbelongs.

Assetsotherthangoodwillthathavepreviouslybeenimpairedaretestedforpossiblereversaloftheimpairmentwhenevereventsorchangesincircumstancesindicatethattheimpairmentmayhavereversed.

(h) JointventureAjointventureisatypeofjointarrangementwherebythepartiesthathavejointcontrolofthearrangementhaverightstothenet assetsof the joint venture. Joint control is the contractually agreed sharingof control of an arrangement,whichexistsonlywhendecisionsabouttherelevantactivitiesrequireunanimousconsentofthepartiessharingcontrol.Theconsiderationsmadeindeterminingjointcontrolaresimilartothosenecessarytodeterminecontroloversubsidiaries.A jointarrangementcanbeclassifiedasa jointventureora jointoperation.Theclassificationofa jointarrangementasajointventureorajointoperationdependsupontherightsandobligationsofthepartiestothearrangement.TheGroupdoesnotcurrentlyhaveanyjointventures.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019(i) JointoperationsJointoperationsarejointarrangementsinwhichthepartieswithjointcontrolhaverightstotheassetsandobligationsforthe liabilities relating to the arrangement. The activities of a joint operation are primarily designed for the provision ofoutputtothepartiestothearrangement,indicatingthat:

• Thepartieshavetherightstosubstantiallyalltheeconomicbenefitsoftheassetsofthearrangement;and• All liabilities are satisfiedby the jointparticipants through their purchasesof thatoutput. This indicates that, in

substance,thejointparticipantshaveanobligationfortheliabilitiesofthearrangement.

The consolidated financial statements of theGroup include its share of the assets and liabilities, revenues and expensesarisingjointlyorotherwisefromthoseoperationsanditsrevenuederivedfromthesaleofitsshareofoutputfromthejointoperation. All such amounts are measured in accordance with the terms of each arrangement, which are usually inproportiontotheGroup’sinterestinthejointoperation.

TheGroupdoesnotcurrentlyhaveanyjointoperations.

(j) CashandcashequivalentsForthepurposesof theStatementofCashFlows,cashandcashequivalents includescashonhandandatbank,depositsheldatcallwith financial institutions,othershort term,highly liquid investmentswithmaturitiesof threemonthsor less,thatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.

(k) FinancialinstrumentsFinancialInstrumentsA financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equityinstrumentofanotherentity.

RecognitionandInitialMeasurementoffinancialassetsThe classification of financial assets at initial recognition depends on the financial asset’s contractual cash flowcharacteristicsandtheGroup’sbusinessmodelformanagingthem.TheGroupinitiallymeasuresafinancialassetatitsfairvalueplus, inthecaseofafinancialassetnotatfairvaluethroughprofitor loss,transactioncosts. Inorderforafinancialassettobeclassifiedandmeasuredatamortisedcostitneedstogiverisetocashflowsthatare‘solelypaymentsofprincipalandinterest(SPPI)’ontheprincipalamountoutstanding.ThisassessmentisreferredtoastheSPPItestandisperformedataninstrumentlevel.TheGroup’sbusinessmodelformanagingfinancialassetsreferstohowitmanagesitsfinancialassetsinordertogeneratecashflows.Thebusinessmodeldetermineswhethercashflowswillresultfromcollectingcontractualcashflows,sellingthefinancialassets,orboth.

SubsequentMeasurementoffinancialassetsFinancialassetsatamortisedcost(debtinstruments)isthemostrelevanttotheGroup.TheGroupmeasuresfinancialassetsatamortisedcostifbothofthefollowingconditionsaremet:

• The financial asset is heldwithinabusinessmodelwith theobjective tohold financial assets inorder to collectcontractualcashflows;and

• Thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding

Financialassetsatamortisedcostaresubsequentlymeasuredusingtheeffective interest(EIR)methodandaresubjecttoimpairment.Gainsandlossesarerecognisedinprofitorlosswhentheassetisderecognised,modifiedorimpaired.

ImpairmentoffinancialassetsTheGrouprecognisesanallowanceforexpectedcreditlosses(ECLs)foralldebtinstrumentsnotheldatfairvaluethroughprofitorloss.ECLsarebasedonthedifferencebetweenthecontractualcashflowsdueinaccordancewiththecontractandallthecashflowsthattheGroupexpectstoreceive,discountedatanapproximationoftheoriginaleffectiveinterestrate.The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that areintegraltothecontractualterms.

DerecognitionoffinancialassetsAfinancialasset (or,whereapplicable,apartofa financialassetorpartofagroupofsimilar financialassets) isprimarilyderecognised(i.e.,removedfromtheGroup’sconsolidatedstatementoffinancialposition)whentherightstoreceivecashflows from the asset have expired or the Group has transferred its rights to receive cash flows from the asset or hasassumedanobligationtopaythereceivedcashflowsinfullwithoutmaterialdelaytoathirdpartyundera‘pass-through’arrangement;andeither(a)theGrouphastransferredsubstantiallyalltherisksandrewardsoftheasset,or(b)theGrouphasneithertransferrednorretainedsubstantiallyalltherisksandrewardsoftheasset,buthastransferredcontroloftheasset.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019(k) Financialinstruments(cont’d)FinancialliabilitiesA financial liability is a contractual obligation todeliver cashor another financial assetor toexchange financial assetsorfinancialliabilitiesunderunfavourableconditions.

RecognitionandInitialMeasurementoffinancialliabilitiesFinancial liabilities are classified, at initial recognition, as financial liabilities at fair value throughprofit or loss, loans andborrowingsoraspayables.Allfinancialliabilitiesarerecognisedinitiallyatfairvalueand,inthecaseofloansandborrowingsandpayables,netofdirectlyattributabletransactioncosts.TheGroup’sfinancialliabilitiesincludetradeandotherpayables,loansandborrowingsincludingbankoverdrafts,andderivativefinancialinstruments.

SubsequentMeasurementoffinancialliabilitiesAfterinitialrecognition,interest-bearingloansandborrowingsaresubsequentlymeasuredatamortisedcostusingtheEIRmethod.Gainsand lossesare recognised inprofitor losswhenthe liabilitiesarederecognisedaswellas through theEIRamortisationprocess.AmortisedcostiscalculatedbytakingintoaccountanydiscountorpremiumonacquisitionandfeesorcoststhatareanintegralpartoftheEIR.TheEIRamortisationis includedasfinancecosts inthestatementofprofitorloss.

DerecognitionoffinancialliabilitiesA financial liability isderecognisedwhen theobligationunder the liability isdischargedor cancelledorexpires.Whenanexistingfinancial liability isreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedasthederecognitionoftheoriginalliability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in thestatementofprofitorloss.

(l) Property,plantandequipmentProperty,plantandequipmentaremeasuredatcostlessdepreciationandimpairmentlosses.

The cost of property, plant and equipment constructed within the Group includes the cost of materials, direct labour,borrowingcostsandanappropriateportionoffixedandvariablecosts.

Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheconsolidatedentityandthecostoftheitemcanbemeasuredreliably.Allotherrepairsandmaintenancearechargedtoprofitorlossduringtheperiodinwhichtheyareincurred.

DepreciationThedepreciableamountofproperty,plantandequipment isdepreciatedover theiruseful life to theGroupcommencingfromthetimetheassetisheldreadyforuse.

Thedepreciationratesusedforeachclassofassetsare:

ClassofFixedAssets DepreciationRateLand nilComputerEquipment 33.3%straightlineFurnitureandOfficeEquipment 10–33.3%straightlineMotorVehicles 20%straightline

Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,attheendofeachreportingperiod.

Anitemofproperty,plantandequipmentisde-recognisedupondisposalorwhennofurtherfutureeconomicbenefitsareexpectedfromitsuseordisposal.

Gainsand lossesondisposalaredeterminedbycomparingproceedswith thecarryingamount. Thegainsand lossesareincludedinthestatementofcomprehensiveincome.

(m) Exploration,evaluationanddevelopmentexpenditureExploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area ofinterest. Suchexpenditurescomprisenetdirectcostsandanappropriateportionofrelatedoverheadexpenditurebutdonot include overheads or administration expenditure not having a specific nexuswith a particular area of interest. Theexplorationandevaluationexpenditure isonlycarriedforwardasexplorationorevaluationassetstotheextentthattheyareexpectedtoberecoupedthroughthesuccessfuldevelopmentoftheareaorwhereactivitiesintheareahavenotyetreachedastagewhichpermitsreasonableassessmentoftheexistenceofeconomicallyrecoverablereservesandactiveorsignificantoperationsinrelationtotheareaarecontinuing.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019(m) Exploration,evaluationanddevelopmentexpenditure(cont’d)When technical feasibility and commercial viability of extracting a Coal Resource have been demonstrated then anycapitalisedexplorationandevaluationexpenditureisreclassifiedascapitalisedminedevelopment.Priortoreclassification,capitalisedexplorationandevaluationexpenseisassessedforimpairment.

A regular reviewhas been undertaken on each area of interest to determine the appropriateness of continuing to carryforwardcosts inrelationtothatareaof interest. Accumulatedcosts inrelationtoanabandonedareaarewrittenoff/de-recognisedinfullagainstprofitintheperiodinwhichthedecisiontoabandontheareaismade.

Costs related to the acquisition of properties that contain Coal Resources are allocated separately to specific areas ofinterest.Thesecostsarecapitaliseduntiltheviabilityoftheareaofinterestisdetermined.

Thestrippingcosts (theprocessofoverburdenremoval) incurredbeforeproductioncommences (developmentstripping)arecapitalisedaspartofminedevelopmentexpenditureandsubsequentlyamortised.

The stripping costs incurred subsequent to commencement of production are referred to as production stripping.Productionstripping isgenerallyconsidered tocreate twobenefits,beingeither theproductionof inventoryor improvedaccesstothecoaltobeminedinthefuture.Wherethebenefitsarerealisedintheformofinventoryproducedintheperiod,theproductionstrippingcostsareaccountedforaspartofthecostofproducingthoseinventories.Wherethebenefitsarerealisedintheformof improvedaccesstooretobeminedinthefuture,thecostsarerecognisedasanon-currentasset,referredtoasa‘strippingactivityasset’,ifthefollowingcriteriaaremet:a) Futureeconomicbenefits(beingimprovedaccesstotheorebody)areprobable;b) Thecomponentoftheorebodyforwhichaccesswillbeimprovedcanbeaccuratelyidentified;andc) Thecostsassociatedwiththeimprovedaccesscanbereliablymeasured.Ifallofthecriteriaarenotmet,theproductionstrippingcostsarechargedtoprofitor lossasoperatingcostsastheyareincurred.Whenproduction commences, the accumulated costs for the relevant area of interest (mine development andacquired properties) will be amortised over the life of the area according to the rate of depletion of the economicallyrecoverablereservesusingaunitsofproductionmethod.

Mine rehabilitation costswill be incurredby theGroupeitherwhileoperating,orat theendof theoperating lifeof, theGroup’s facilities andmine properties. The Group assesses its mine rehabilitation provision at each reporting date. TheGrouprecognisesarehabilitationprovisionwhereithasalegalandconstructiveobligationasaresultofpastevents,anditisprobablethatanoutflowofresourceswillberequiredtosettletheobligation,andareliableestimateoftheamountofobligation can be made. The nature of these restoration activities includes: dismantling and removing structures;rehabilitating mines and tailings dams; dismantling operating facilities; closing plant and waste sites; and restoring,reclaimingandrevegetatingaffectedareas.

Theobligationgenerallyariseswhentheassetisinstalledortheground/environmentisdisturbedattheminingoperation’slocation.Whenthe liability is initially recognised, thepresentvalueof theestimatedcosts iscapitalisedby increasing thecarryingamountoftherelatedminingassetstotheextentthatitwasincurredasaresultofthedevelopment/constructionof themine. Any rehabilitation obligations that arise through the production of inventory are recognised as part of therelated inventory item. Additional disturbances which arise due to further development /construction at the mine arerecognisedasadditionsorchargestothecorrespondingassetsandrehabilitationliabilitywhentheyoccur.Costsrelatedtorestoration of site damage (subsequent to start of commercial production) that is created on an ongoing basis duringproductionareprovidedforattheirnetpresentvaluesandrecognisedinprofitorlossasextractionprogresses.

Changesintheestimatedtimingofrehabilitationorchangestotheestimatedfuturecostsaredealtwithprospectivelybyrecognisinganadjustmenttotherehabilitationliabilityandacorrespondingadjustmenttotheassettowhichitrelates, iftheinitialestimatewasoriginallyrecognisedaspartofanassetmeasuredinaccordancewithAASB116.

Anyreductionintherehabilitationliabilityand,therefore,anydeductionfromtheassettowhichitrelates,maynotexceedthecarryingamountof thatasset. If itdoes,anyexcessover thecarryingvalue is taken immediately to thestatementofprofitorlossandothercomprehensiveincome.

Ifthechangeinestimateresultsinanincreaseintherehabilitationliabilityand,therefore,anadditiontothecarryingvalueof theasset, theGroupconsiderswhether this isan indicationof impairmentof theassetasawhole,and if so, tests forimpairment. If, for maturemines, the estimate for the revisedmine assets net of rehabilitation provisions exceeds therecoverablevalue,thenthatportionoftheincreaseischargeddirectlytoexpense.

Over time, the discounted liability is increased for the change in present value based on the discount rates that reflectcurrentmarketassessmentsandtherisksspecifictotheliability.Theperiodicunwindingofthediscountisrecognisedinthestatementofprofitorlossandothercomprehensiveincomeaspartoffinancecosts.Forclosedsites,changestoestimated

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019(m) Exploration,evaluationanddevelopmentexpenditure(cont’d)costsarerecognisedimmediatelyinthestatementofprofitorlossandothercomprehensiveincome.

TheGrouprecognisesneitherthedeferredtaxassetinrespectofthetemporarydifferenceonthedecommissioningliabilitynorthecorrespondingdeferredtaxliabilityinrespectofthetemporarydifferenceonadecommissioningasset.

(o)EmployeebenefitsWagesandsalaries,annualleaveandsickleaveLiabilitiesforwagesandsalaries,includingnon-monetarybenefits,annualleaveandaccumulatingsickleaveexpectedtobesettledwithin12monthsoftheendofthereportingperiodarerecognisedinrespectofemployees'servicesrendereduptotheendofthereportingperiodandaremeasuredatamountsexpectedtobepaidwhentheliabilitiesaresettled.Liabilitiesfornon-accumulatingsick leavearerecognisedwhen leave is takenandmeasuredattheactualratespaidorpayable. Indetermining the liability, consideration is given to employeewage increases and the probability that the employeemaysatisfyvestingrequirements.

(p)ProvisionsProvisions for legal claimsandmakegoodobligationsare recognisedwhen theGrouphasapresent legalor constructiveobligationasaresultofapastevent,itisprobablethatthatanoutflowofeconomicresourceswillberequiredtosettletheobligationandtheamountcanbereliablyestimated.

(q)IssuedcapitalOrdinary shares are classified as equity. Costs directly attributable to the issueof new shares or options are shownas adeductionfromtheequityproceeds,netofanyincometaxbenefit.

(r)Share-basedpaymentsTheGroupprovidesbenefits toemployees (includingdirectors)andsuppliers (including financiersandconsultants) in theformofshare-basedpaymenttransactions,wherebyemployeesorsuppliersrender/provideservicesinexchangeforsharesoroptionsovershares(equity-settledtransactions).

Thefairvalueofoptionsgrantedtoemployeesisrecognisedasanemployeebenefitexpensewithacorrespondingincreaseinequity(share-basedpaymentoptionreserve).Thefairvalueofoptionsgrantedtofinanciersisrecognisedasfinancecostwithacorrespondingincreaseinequity(share-basedpaymentoptionreserve).Fairvalueofsharesissuedtoemployeesandconsultants are recognisedasemployeebenefits and consultancyexpenses respectivelywitha corresponding increase insharecapital.Thefairvalueismeasuredatgrantdateandrecognisedovertheperiodduringwhichtheemployees/suppliersbecomeunconditionally entitled to theoptions. Fair value is determinedby an independent valuerusing aBlack-Scholesoptionpricingmodel.Indeterminingfairvalue,noaccountistakenofanyperformanceconditionsotherthanthoserelatedtothesharepriceofCokalLimited(marketconditions).

Thecumulativeexpenserecognisedbetweengrantdateandvestingdateisadjustedtoreflectthedirectors’bestestimateof the number of options thatwill ultimately vest because of internal conditions of the options, such as the employeeshaving to remainwith the Group until vesting date, or such that employees are required tomeet internal performancetargets.Therearenoconditionsassociatedwiththeoptionsissuedtothefinanciers.Noexpenseisrecognisedforoptionsthatdonotultimatelyvestbecauseinternalconditionswerenotmet.Anexpenseisstillrecognisedforoptionsthatdonotultimatelyvestbecauseamarketconditionwasnotmet.

Ateach subsequent reportingdateuntil vesting thecumulative charge to the statementof comprehensive income is theproductof:-Thegrantdatefairvalueoftheaward;- The current best estimateof thenumber of awards thatwill vest, taking into account such factors as the likelihoodofemployeesturnoverduringthevestingperiodandthelikelihoodofnon-marketperformanceconditionsbeingmet;and-Theexpiredportionofthevestingperiod.Thechargetothestatementofcomprehensiveincomefortheperiodisthecumulativeamountascalculatedabovelesstheamountsalreadychargedinpreviousperiods.Thereisacorrespondingentrytoequity.

Wherethetermsofoptionsaremodified,theexpensecontinuestoberecognisedfromgrantdatetovestingdateasifthetermshadneverbeenchanged.Inaddition,atthedateofthemodification,afurtherexpenseisrecognisedforanyincreaseinfairvalueofthetransactionasaresultofthechange.

Whereoptions are cancelled, they are treated as if vestingoccurredon cancellation and anyunrecognisedexpenses aretakenimmediatelytoprofitorloss.However,ifnewoptionsaresubstitutedforthecancelledoptionsanddesignatedasareplacementongrantdate,thecombinedimpactofthecancellationandreplacementoptionsaretreatedasiftheywereamodification.

The dilution effect, if any, of outstanding options is reflected as additional share dilutions in the computation of dilutedearningspershare.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019(s)EarningspershareBasicearningspershareBasicearningspershare iscalculatedbydividingtheprofit/(loss)attributabletoownersofCokalLimitedbytheweightedaveragenumberofordinarysharesoutstandingduringtheperiod,adjustedforbonuselementsinordinarysharesduringtheperiod.

DilutedearningspershareEarnings used to calculate diluted earnings per share are calculated by adjusting the amount used in determining basicearningspersharebytheafter-taxeffectofdividendsand interestassociatedwithdilutivepotentialordinaryshares.Theweighted averagenumberof sharesused is adjusted for theweighted averagenumberof shares assumed tohavebeenissuedfornoconsiderationinrelationtodilutivepotentialordinaryshares.

(t)GSTRevenues,expensesandassetsarerecognisednetofGSTexceptwhereGSTincurredonapurchaseofgoodsandservicesisnot recoverable fromthe taxationauthority, inwhichcase theGST is recognisedaspartof thecostofacquisitionof theassetoraspartoftheexpenseitem.

ReceivablesandpayablesarestatedwiththeamountofGSTincluded.ThenetamountofGSTrecoverablefrom,orpayableto,thetaxationauthorityisincludedaspartofreceivablesorpayablesinthestatementsoffinancialposition.

CashflowsareincludedinthestatementofcashflowsonagrossbasisandtheGSTcomponentofcashflowsarisingfrominvestingandfinancingactivities,whichisrecoverablefrom,orpayableto,thetaxationauthority,areclassifiedasoperatingcashflows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxationauthority.

(u)DeterminationandpresentationofoperatingsegmentsAASB8Operatingsegmentsrequiresamanagementapproachunderwhichsegmentinformationispresentedonthesamebasisasthatusedforinternalreportingpurposes.Operatingsegmentsarereportedinamannerthatisconsistentwiththeinternalreportingtothechiefoperatingdecisionmaker(CODM),whichhasbeenidentifiedastheBoardofDirectors.

Operating segments thatmeet the qualification criteria as prescribed by AASB 8 are reported separately. However, anoperating segment that does notmeet the qualification criteria is still reported separately when information about thesegmentwouldbeusefultousersofthefinancialstatements.

(v)FairvaluemeasurementTheGroupdidnothaveanyfinancialassetsandliabilitiesmeasuredatfairvalueatreportingdate.Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurement date. The fair value measurement is based on the presumption that the transaction to sell the asset ortransfertheliabilitytakesplaceeither:

• Intheprincipalmarketfortheassetorliability;or• Intheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability.

TheprincipalorthemostadvantageousmarketmustbeaccessibletobytheGroup.

Thefairvalueofanassetoraliabilityismeasuredusingtheassumptionsthatmarketparticipantswouldusewhenpricingtheassetorliability,assumingthatmarketparticipantsactintheireconomicbestinterest.

A fair valuemeasurementof anon-financial asset takes intoaccount amarketparticipant's ability to generateeconomicbenefitsbyusingtheassetinitshighestandbestuseorbysellingittoanothermarketparticipantthatwouldusetheassetinitshighestandbestuse.

TheGroupusesvaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataareavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsandminimisingtheuseofunobservableinputs.Allassetsandliabilitiesforwhichfairvalueismeasuredordisclosedinthefinancialstatementsarecategorisedwithinthefairvaluehierarchy,describedasfollows,basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole:

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019(v)Fairvaluemeasurement(cont’d)• Level1—Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities• Level2—Valuation techniques forwhich the lowest level input that is significant to the fair valuemeasurement is

directlyorindirectlyobservable• Level3—Valuation techniques forwhich the lowest level input that is significant to the fair valuemeasurement is

unobservable

Forassetsandliabilitiesthatarerecognisedinthefinancialstatementsonarecurringbasis,theGroupdetermineswhethertransfershaveoccurredbetweenlevelsinthehierarchybyre-assessingcategorisation(basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole)attheendofeachreportingperiod.

(w)ForeigncurrencytranslationTransactionsinforeigncurrenciesareinitiallyrecordedinthefunctionalcurrencybyapplyingtheexchangeratesrulingatthedateoftransaction(refernote1(d)).Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesareretranslatedattherateofexchangerulingatthereportingdate.Theresultedgainorlossonretranslationisincludedinprofitorloss.

Non-monetary itemsthataremeasured intermsofhistoricalcost inaforeigncurrencyaretranslatedusingtheexchangerateasatthedateoftheinitialtransaction.Non-monetaryitemsmeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchangeratesatthedatewhenthefairvaluewasdetermined.

(x)OperatingleasesOperatingleasepaymentsarerecognisedasanoperatingexpenseinthestatementofcomprehensiveincomeonastraightline basis over the lease term. Operating lease incentives are recognised as a liability when received and subsequentlyreducedbyallocatingleasepaymentsbetweenrentalexpenseandreductionoftheliability.

(y)ParententityfinancialinformationThefinancialinformationfortheparententity,CokalLimited,includedinNote20,hasbeenpreparedonthesamebasisastheconsolidatedfinancialstatements,exceptinvestmentsinsubsidiariesandjointventureoperationsareaccountedforatcost,lessprovisionforimpairment.

(z)Currentversusnon-currentclassificationThe Group presents assets and liabilities in the statement of financial position based on current/non-currentclassification.Anassetiscurrentwhenitiseither:

• Expectedtoberealisedorintendedtobesoldorconsumedinthenormaloperatingcycle;• Heldprimarilyforthepurposeoftrading;• Expectedtoberealisedwithin12monthsafterthereportingperiod;or• Cashorcashequivalentunlessrestrictedfrombeingexchangedorusedtosettlealiabilityforatleast12monthsafter

thereportingperiod.Allotherassetsareclassifiedasnon-current.Aliabilityiscurrentwheneither:

• Itisexpectedtobesettledinthenormaloperatingcycle;• Itisheldprimarilyforthepurposeoftrading;• Itisduetobesettledwithin12monthsafterthereportingperiod;or• Thereisnounconditionalrighttodeferthesettlementoftheliabilityforatleast12monthsafterthereportingperiod.

TheGroupclassifiesallotherliabilitiesasnon-current.Deferredtaxassetsandliabilitiesareclassifiedasnon-currentassetsandliabilities.F

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019(aa)CriticalaccountingestimatesandjudgmentsDetailsofcriticalaccountingestimatesandjudgementsaboutthefuturemadebymanagementattheendofthereportingperiodaresetoutbelow:

(i) Impairmentofnon-financialassetsTheGroupassesseseachreportingperiodtodeterminewhetheranyindicationofimpairmentexists.Whereanindicatorofimpairmentexists,aformalestimatesoftherecoverableamountismade,whichisconsideredtobethehigherofthefair value less costs of disposal (FVLCD) and value in use (VIU). The assessments require the use of estimates andassumptionssuchas long termcoalprices (consideringcurrentandhistoricalprices,price trendsandrelated factors),discount rates, operating costs, future capital requirements and decommissioning operating performance (whichincludes production and sales volumes). These estimates and assumptions are subject to risks and uncertainty.Therefore,thereisapossibilitythatchangesincircumstanceswillimpactthisproject,whichmayimpacttherecoverableamountoftheasset.

Fair value is the price thatwould be received to sell an asset or paid to transfer a liability in an orderly transactionbetweenmarketparticipantsatthemeasurementdate.TheGroupconsidersanythirdpartyofferswhenformingaviewonfairvalue,orEnterpriseValue(EV)thatthemarketparticipantswillingtopayforacquisitionoftheGroup’sshares.

(ii) ExplorationandevaluationassetsThe application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement todeterminewhetherfutureeconomicbenefitsare likely, fromeitherexplorationorsale,orwhetheractivitieshavenotyet reacheda stagewhichpermits a reasonableassessmentof theexistenceof technically feasible and commerciallyviable reserves. The determination of reserves and resources is itself and estimation process that requires varyingdegreesofuncertaintydependingonhowtheresourcesareclassified.TheseestimatesdirectlyimpactwhentheGroupdefersexplorationandevaluationexpenditure.Thedeferralpolicyrequiresmanagementtomakecertainestimatesandassumptionsaboutfutureeventsandcircumstances,inparticular,whetheraneconomicallyviableextractionoperationcanbeestablished.Any suchestimates andassumptionsmay changeasnew informationbecomesavailable. If, afterexpenditureiscapitalised,informationbecomesavailablesuggestingthattherecoveryoftheexpenditureisunlikely,therelevantcapitalisedamountiswrittenoffinprofitorlossinthestatementofcomprehensiveincomeintheperiodwhenthenewinformationbecomesavailable.

Atreportingdate,certaintenementshavereachedarenewaldateorwillreacharenewaldateinthenext12months.Thesetenementsremaincurrentuntilanofficialgovernmentexpirynoticeisissued.Thedirectorsareoftheopinionthatwhiletheyaredueforrenewal,asnoexpirynoticehasbeenreceivedtheyremaincurrent.Ifrenewalisnotforthcoming,theamountscapitalisedwilllikelybede-recognised.

(iii) Taxation The Group’s accounting policy for taxation requires management’s judgement as to the types of arrangements

considered to be a tax on income in contrast to anoperating cost. Judgement is also required in assessingwhetherdeferredtaxassetsandcertaindeferredtaxliabilitiesarerecognisedonthebalancesheet.

Deferred taxassets, including thosearising fromunrecouped tax losses, capital lossesand temporarydifferences, arerecognised onlywhere it is consideredmore likely than not that theywill be recovered, which is dependent on thegeneration of sufficient future taxable profits. Judgements are also required about the application of income taxlegislation. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility thatchangesincircumstanceswillalterexpectations,whichmayimpacttheamountofdeferredtaxassetsanddeferredtaxliabilities recognised on the balance sheet and the amount of other tax losses and temporary differences not yetrecognised.Insuchcircumstances,someorallofthecarryingamountsofrecogniseddeferredtaxassetsandliabilitiesmayrequireadjustment,resultinginacorrespondingcreditorchangetotheincomestatement.

(iv) Share-basedpaymentsTheGroupusesestimatestodeterminethefairvalueofequity instrumentsissuedtodirectors,executives,employeesandsuppliers.Furtherdetailofestimatesusedindeterminingthevalueofshare-basedpaymentsisincludedinNote24.

(v) JointarrangementsJudgement is required to determine when the Group has joint control over an arrangement, which requires anassessmentoftherelevantactivitiesandwhenthedecisionsinrelationtothoseactivitiesrequireunanimousconsent.TheGrouphasdeterminedthattherelevantactivitiesforitsjointarrangementsarethoserelatingtotheoperatingandcapitaldecisionsofthearrangementsuchasapprovalofthecapitalexpenditureprogramforeachyearorterminatingthe service providers of the arrangement. The considerationsmade in determining joint control are similar to thosenecessarytodeterminecontroloversubsidiaries.

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(aa) Criticalaccountingestimatesandjudgments(cont’d)

Judgementisalsorequiredtoclassifyajointarrangement.ClassifyingthearrangementrequirestheGrouptoassessitsrightsandobligationsarisingfromthearrangement.Specifically,theGroupconsiders:

• Thestructureofthejointarrangement–whetheritsstructuredthroughaseparatevehicle• Whenthearrangementisstructurethroughaseparatevehicle,theGroupalsoconsiderstherightsandobligations

arisingfrom:- Thelegalformoftheseparatevehicle;- Thetermsofthecontractualarrangement;and- Otherfactsandcircumstances(whenrelevant).

Thisassessmentoftenrequiressignificantjudgement,andadifferentconclusiononjointcontrolandalsowhetherthearrangementisajointoperationorajointventure,maymateriallyimpacttheaccounting.

Peragreementwithsubsidiaryshareholders,therelevantactivitiesincludingfinancingofcertainentities’aremanagedandcontrolledbyCokaluntilthecompletionofInitialWorkProgram.TherightsofothershareholderstoreceivereturnsandobligationsforexpenditureareonlyestablishedwhentheycontributetheirshareofcapitaluponcompletionoftheInitialWorkProgrambyCokal.Giventhis,todateithasbeendeterminedthatCokalcontrolstheseentitiesandhencecurrentlyconsolidatesthemassubsidiaries. Infutureperiods,however,theaccountingtreatmentoftheseentitieswillberequiredtobereassesseduponcompletionofInitialWorkProgram.Thismayleadtoachangeinaccountingif it isthen determined that instead of controlling these entities, Cokal now only jointly controls these and they are jointarrangements.Dependingonwhetherthesejointarrangementsareclassifiedasjointventuresorjointoperations,thismayrequireeitherequityaccounting(forajointventure)orrecognitionofCokal’sshareoftheassets,liabilities,incomeandexpensesofthearrangement(forajointoperation).DirectorshavenotreassessedtheimpactatreportingdateastheInitialWorkProgramhasnotbeencompletedatthisdate.

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Note2:RevenueandOtherIncome

2019 2018

US$ US$Revenue -Saleofcoal 470,109 652,074

Otherincome

-Interestincomefromexternalparties 976 98-Gainondischargeandreleaseofloan 4,630,767 -

Totalotherincome 4,631,743 98

On 29 April 2017, the Group entered into a Royalty Deed with Platinum Partners (refer note 15) to convert alloutstanding loans owing to them to production royalties (this formalised the agreement on 22 July 2016) subject tocertainconditionsprecedent.InNovember2018,theCompanyenteredintoafurtheragreementwithPlatinumPartners,theeffectofwhichconfirmedCokal’ssatisfactionwithanumberoftheconditionsprecedenttotheRoyaltyDeedandextended the date for meeting all of the remaining conditions precedent (the “Subsequent Conditions”) under theRoyaltyDeedforconversionoftwo-thirdsofthePlatinumLoans(being$9,261,535)to31July2020.Inaddition,undertheagreementwhenCokalcancelsandreissues37.5millionoptionstoPlatinumPartners,one-thirdoftheGroup’sdebtwithPlatinumPartners,being$4,630,767,isdischargedandreleased.Thecancellationandreissueofthe37.5millionoptions occurred on 10 January 2019, at which time one-third of the debt was discharged and released and acorrespondinggainrecognisedintheGroup’sincomestatements.TheGrouppreviouslyrecognisedasharebasedpaymentexpenseforfairvalue(atgrantdate)ofthe75millionoptionsgranted toPlatinumPartnersaspartconsideration for theexecutionof theRoyaltyDeed. TheGrouphas recordedafurther share based payment expense of $1,003,561 in respect of the incremental fair value of the 37.5million newoptionsgrantedtoPlatinumPartnersaspartoftheNovember2018amendmenttotheRoyaltyDeed. Thisexpenseisreportedseparatelyinthestatementofcomprehensiveincome.

Note3:DividendsandFrankingCreditsTherewerenodividendspaidorrecommendedduringthefinancialyear(30June2018:Nil).TherewerenofrankingcreditsavailabletotheshareholdersoftheGroup(30June2018:Nil).

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note4:Incometax 2019

US$ 2018

US$Theprimafacieincometaxonthelossisreconciledtotheincometaxexpenseasfollows:Primafacietaxbenefitat27.5%(2017:30%)onlossbeforeincometax

(510,322)

(2,143,939)

Addtaxeffectof: - Notdeductibleexpensesandimpactoftaxrate

differences 510,322 2,143,939

- Deferredtaxassetnotrecognised - -Incometaxexpense - -Deferredtaxassets Deductibletemporarydifferences - -Carryforwardtaxlosses 9,940,760 10,089,602 Deferredtaxliabilities Assessabletemporarydifferences - -Netdeferredtaxassetsnotrecognised 9,940,760 10,089,602

TherearenofrankingcreditsavailabletoshareholdersofCokalLimited.

Thecarriedforwardtaxlossesandtemporarydifferencesnotrecognisedasdeferredtaxassetsasat30June2019wereUS$36,148,760(30June2018:US$37,928,866)andUS$nil(30June2018:US$nil)respectively.

Inordertorecoupcarriedforwardlossesinfutureperiods,eithertheContinuityofOwnershipTest(COT)orSameBusinessTestmustbepassed.Themajorityoflossesarecarriedforwardat30June2019underCOT.

Deferredtaxassetswhichhavenotbeenrecognisedasanasset,willonlybeobtainedif:(i) theGroupderivesfutureassessableincomeofanatureandofanamountsufficienttoenablethelossestobe

realised;(ii) theGroupcontinuestocomplywiththeconditionsfordeductibilityimposedbythelaw;and(iii) nochangesintaxlegislationadverselyaffecttheGroupinrealisingthelosses

Note5:Auditor’sRemuneration 2019

US$ 2018US$

Auditservices Amountspaid/payabletoErnst&YoungforauditorreviewofthefinancialstatementsfortheGroup

Ernst&Young-Australia 131,318 138,000Ernst&Young-Indonesia 7,090 - 138,408 138,000

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Note6:LossperShare 2019 2018

Number NumberLossattributabletoownersofCokalLimitedusedtocalculatebasicanddilutedlosspershare(USD)

(1,855,717) (7,796,143)

Weightedaveragenumberofordinarysharesusedasthedenominatorincalculatingbasiclosspershare

725,498,143 660,704,114

Adjustmentsforcalculationofdilutedearningspershare:- Options*

Weightedaveragenumberofordinarysharesandpotentialordinarysharesusedasthedenominatorincalculatingdilutedlosspershare

725,498,143 660,704,114

Basiclosspershare(UScentspershare) (0.26) (1.18)Dilutedlosspershare(UScentspershare) (0.26) (1.18)*Optionsareconsideredanti-dilutiveastheGroupislossmaking.Optionscouldpotentiallydiluteearningspershareinthefuture.RefertoNote16fordetailsofoptiongrantedasat30June2019.

Note7:CashandCashEquivalents

2019US$

2018US$

Cashandbankbalances 266,277 154,418Cashatbankbearfloatingandfixedinterestratesbetween0.10%and2.5%(2018:between0.10%and2.78%).Includedintheconsolidatedstatementofcashflowsasfollows:Cashandbankbalances* 266,277 154,418Less:Shorttermdepositsmaturingafterthreemonthsandrestrictedbankbalanceclassifiedasinvestingactivities**

(138,916)

(138,916)

Cashandcashequivalents 127,361 15,502*Alldepositsareshortterminvestmentsheldatcommercialbanks.**IncluderestricteddepositofUS$138,916(2018:US$138,916)canbeusedonlyafterTBARproductioncommences.

Note8:AccountsReceivable

2019 2018 US$ US$

Current Otherreceivables* 2,102 23,134 2,102 23,134*Noreceivablebalancesarepastdueorimpairedatreportingdate.

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Note9:Subsidiariesa)InterestinsubsidiariesTheconsolidatedfinancialstatementsincorporatetheassets,liabilitiesandresultsofthefollowingsubsidiariesinaccordancewiththeaccountingpolicydescribedinNote1.

Nameofentity

CountryofIncorporation

ClassofShares PercentageOwned

(%)* 2019 2018

JackDoolanCapitalPtyLtd Australia Ordinary 100% 100%CokalMozambiquePtyLtd Australia Ordinary 100% 100%CokalHoldingsPte.Ltd Singapore Ordinary 100% 100%Cokal-AAKPte.Ltd Singapore Ordinary 100% 100%Cokal-AAMPte.Ltd Singapore Ordinary 100% 100%Cokal-BBMPte.Ltd Singapore Ordinary 100% 100%Cokal-BBPPte.Ltd Singapore Ordinary 100% 100%CokalServicesPte.Ltd Singapore Ordinary 100% 100%CokalKarooPte.Ltd Singapore Ordinary 100% 100%CokalMandaPte.Ltd Singapore Ordinary 100% 100%Cokal-WestKalimantanPte.Ltd Singapore Ordinary 100% 100%Cokal-BPRPte.Ltd Singapore Ordinary 100% 100%Cokal-TBARPte.Ltd Singapore Ordinary 100% 100%MiningLogisticsPte.Ltd Singapore Ordinary 100% 100%Cokal-KEDPte.Ltd Singapore Ordinary 100% 100%CokalResourcesLimited Tanzania Ordinary 100% 100%PTCokal Indonesia Ordinary 100% 100%PTBumiKalimantanLogistik(BKL) Indonesia Ordinary 100% 100%PTAnugerahAlamKatingan^(AAK) Indonesia Ordinary 75% 75%PTBumiBaritoMineral^(BBM) Indonesia Ordinary 60% 60%PTBorneoBaraPrima^(BBP) Indonesia Ordinary 60% 60%PTTambangBenuaAlamRaya#(TBAR) Indonesia Ordinary 75% 75%CokalKarooLimited# Tanzania Ordinary 100% 100%CokalMandaLimited# Tanzania Ordinary 100% 100%*theproportionofownershipinterestisequaltotheproportionofvotingpowerheld. ^atreportingdate,thecapitalofthesecompaniesrepresentsonlythecontributionsfromCokal.Peragreement,therightofnon-controllingshareholders’receivingareturnisestablishedonlywhentheycontributetheirshareofcapitaluponcompletionoftheInitialWorkProgramsforeachoftheprojects.Atreportingdate,theInitialWorkProgramsfortheseprojectshavenotyetbeencompletedandthereforethereisnorighttoareturnfornon-controllinginterests.#Duringthe2018financialyear,theGroupterminateditsjointoperationswithaprivatecompany,TanzozResourceCompanyLtd.TheCompanynowowns100%oftheTanzanianentities.Theentitiesaredormantentities.Allcapitalisedexpendituresfortheseentitieshasbeenimpairedto$nilinpriorperiods.Thefairvalueoftheunderlyingassets,liabilitiesandcontingentliabilitiesattheacquisitiondateand30June2019are$nil.

b)FinancialinformationofsubsidiariesFinancial informationof subsidiaries thatwillhavematerialnon-controlling interestsareprovidedbelow.Thebalancesofnon-controlling interests are not currently material at 30 June 2019 and 30 June 2018 as the right of non-controllingshareholders’receivingareturnisestablishedonlywhentheycontributetheirshareofcapitaluponcompletionoftheInitialWorkProgramsforeachoftheprojects.Atreportingdate,theInitialWorkProgramsfortheseprojectshavenotyetbeencompletedandthereforethereisnorighttoareturnfornon-controllinginterests.

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Note10:Property,PlantandEquipment2019US$

2018US$

LandAtcost 31,526 31,526

31,526 31,526ComputerequipmentAtcost 555,731 552,886Accumulateddepreciation (551,903) (551,782)

3,828 1,104FurnitureandofficeequipmentAtcost 552,957 552,957Accumulateddepreciation (401,480) (318,942)

151,477 234,015MotorVehiclesAtcost 9,974 9,974Accumulateddepreciation (9,974) (9,974)

- -

CapitalWIP

Atcost 1,162,166 1,162,166

CapitalWIPwrittenoff (1,162,166)

- 1,162,166

Totalproperty,plantandequipment 186,831 1,428,811

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Note10:Property,PlantandEquipment(cont’d)

(a) Movementsincarryingamounts

2019 LandComputerequipment

Furnitureandoffice

equipment

MotorVehicles

CapitalWIPTotal

US$ US$ US$ US$ US$ US$Balanceatthebeginningoftheyear 31,526 1,104 234,015 - 1,162,166 1,428,811Additions - 2,843 - - - 2,843Disposals - - - - - -Depreciationexpense - (121) (82,536) - - (82,657)Amountwrittenoff - - - - (1,162,166) (1,162,166)Carryingamountattheendoftheyear

31,526 3,826 151,479 - - 186,831

2018 LandComputerequipment

Furnitureandoffice

equipment

MotorVehicles

CapitalWIPTotal

US$ US$ US$ US$ US$ US$Balanceatthebeginningoftheyear 31,526 1,816 258,542 - 1,159,011 1,405,895Additions - - - - 3,155 3,155Disposals - - - - - -Depreciationexpense - (712) (24,527) - - (25,239)Carryingamountattheendoftheyear

31,526 1,104 234,015 - 1,162,166 1,428,811

Note11:ExplorationandEvaluationAssets2019US$

2018US$

Non-CurrentExplorationandevaluationexpenditurecapitalised- explorationandevaluationphases 25,067,202 23,460,617Recoverabilityofthecarryingamountofexplorationandevaluationassetsisdependentonthesuccessfuldevelopmentandcommercialexploitationofcoal,oralternatively,saleoftherespectiveareasofinterest.(a)MovementsincarryingamountsBalanceatthebeginningoftheperiod 25,067,202 23,460,617Additions1 - 1,606,585Carryingamountattheendoftheperiod 25,067,202 25,067,2021Theadditionsfortheyearended30June2018representtheissuanceof25millionordinarysharestothevendorsofPTTambungBenuaAlamRaya(TBAR)infullandfinalsatisfactionofallpost-completionpayments,owingbytheGroup,inrespectofitsacquisitionoftheGroup’sinterestinTBAR.TheshareswereissuedtothevendorsinFebruary2018.

TheGroupassessedimpairmentindicatorsunderAASB6ExplorationforandEvaluationofMineralResources(AASB6)thatwerepresentduringtheyearended30June2019andtestedforimpairmentunderAASB136ImpairmentofAssets(AASB136).

Historically, the Group has determined the recoverable amount of the BBM project using the Fair Value Less Cost of Disposal(FVLCD)methodology considering theGroupas a single cash generatingunit (consistentwith theGroup’sprimary focuson theBBMprojectandthisbeingtheonlyassetinrespectofwhichE&Eiscarriedforward).TheFVLCDwasdeterminedusingEnterpriseValue(EV).EVisimpliedbyCokal’smarketcapitalisationplusacontrolpremium.ThefairvaluemeasurementiscategorisedunderLevel2ofthefairvaluehierarchy(refernote1(v)).

During the year ended 30 June 2018 the Group paid the post completion amounts in respect of the TBAR project. As aconsequence:• ThecarryingamountoftheGroup’sE&Eincluded$23.5millionand$1.6millionforBBMandTBARrespectively;• TheGrouphastwoidentifiableareasofinterestthatneedtobeassessedforimpairment.

At30June2019,theFairValuelessCostofDisposal(FVCLD)oftheGroup’stwoareasofinterestwasmeasuredwithrespecttotheGroup’smarketcapitalisation.Atthattime,theGroup’smarketcapitalisationexceededthecarryingamountofitsnetasset.

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Note11:ExplorationandEvaluationAssets(cont’d)Given thepresenceof the twoareasof interest, theFVLCD impliedby theGroup’sEnterpriseValuedidnotprovideapreciseevaluationoftheFVLCDofthedistinctareasof interest. Thisbeingthecase,theGroupalsohadreferencetoanIndependentStudyofallofCokal’stenementinterestspreparedinaccordancewiththeValminCodeasat30June2017(releasedon23August2017). The Independent Study provided an estimate of value (in accordancewith the Valmin Code) of BBM and TBAR. TheIndependent Study estimated the value of BBM using a discounted cash flowmethod and assessed the value of TBAR withreferencetoaresourcemultiple($pertonneofin-situresourcetonnes).TheValminCodevaluationisaproxyforFVLCDunderAASB136andwouldbe categorisedunderLevel3of the fair valuehierarchy (refernote1 (v)). Basedon thecombinedimpactoftheEVassessmentandIndependentStudytheGroupissatisfiednofurtherimpairmentwasrequiredat30June2019.

Inaddition,giventheAASB6impairmentindicatoridentifiedbytheGroupwasassociatedwithitsintentionandabilitytospendsubstantialamountsonthecontinuedexplorationandevaluationoftheareasofinterest,theGroup’scontinuedfundingissues(refernote1(c))meansthereisnocurrentindicationpreviouslyrecordedimpairmentsinrespectofbothBBMandTBARshouldbereversed.

Note12:OtherAssets2019US$

2018US$

CurrentPrepayments 17,470 6,849

Non-CurrentSecuritydeposits 38,148 35,362

Note13:AccountsPayableandOthers2019US$

2018US$

CurrentRevenueinadvance - 307,189Sundrypayablesandaccruedexpenses 5,756,424 4,370,048BMAGrouploan 2,000,000 -Directorfeesowing 348,020 348,430Loanspayabletodirectorsandemployees# 157,209 352,370Employeebenefits 64,677 40,082Deferredliability(rentincentive) 43,445 43,445

8,369,775 5,461,564#Theseloanspayabletodirectorsandemployeesarenon-interestbearingandrepayableondemand.

BMAGrouploanOn21September2018,CokalsignedaKeyPrinciplesofAgreementwithPTBaraMineralAsri(BMAGroup)todevelopandoperatePCIandCokingCoaloperationsattheBBMProject.CokalreceivedUS$2.0millionloanfromBMAGrouptosecurethe transaction but the BMA Group failed to complete the other funding conditions set out in the Key Principles ofAgreementandhasalsofailedtodocumenttheloanarrangementwiththeGroup.Therefore,theGrouphasassessedtheloanisrepayableondemandandhasbeendisclosedatthefacevalueoftheamountsreceived.

Atthedateofthisreport,theGroupisintheprocessofagreeinganarrangementwiththeBMAGroupinrespectofthe$2.0million of funding received. It is currently anticipated the liability will be repaid based on a $ per tonne of coal sold orpercentageofcoalsalesproceedsfromtheBBMproject.

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Note14:ConvertibleNotes2019US$

2018US$

CurrentFairvalueofConvertibleNotesonissue - 1,927,730ConvertibleNotesconvertedtoshares - (1,563,622)

- 364,108

DuringOctober2017theCompanyissued1,577,234ConvertibleNotesuponthereceiptofUS$1,567,177(AUD$2,000,000)in cash fromMEF I, L.P. (“Magna”). The face value of each Convertible Note is US$1.10. The notes are convertible to avariablenumberofordinarysharesattheoptionoftheholderofthenotesanytimeafterissue.Ifnotconvertedthenotesmatureandare repayable twelve (12)monthsafter the issuedate. The conversionprice foreach convertiblenote is thelowerofafixedprice(beingAUS$0.10pershare)orasharepriceeachto90%ofthefour(4)lowestdayVWAPsovertheten(10) daytradingperiodimmediatelypriortotheconversion.Atthetimeofissuance,thedifferencebetweenthefairvalueoftheConvertibleNotesbeingUS$1,927,730andtheproceedsreceivedofUS$1,567,177wasrecordedasafinancecostinthestatementofcomprehensiveincome.Asat30June2018,Magnahadconverted1,430,000ConvertibleNotestoshares,withtheremaining147,234ConvertibleNotesrepaidbytheCompanyinNovember2018.

Note15:InterestBearingLoans2019US$

2018US$

CurrentLoanspayabletoemployee - 270,916

PlatinumPartners/Northrockfacility 6,710,000 10,065,000BlumontGroup/Wintercrestfacility 2,551,535 3,827,302

TotalInterestbearingloans 9,261,535 14,163,218

LoanspayabletoemployeeDuringthepreviousfinancialyeartheCompanyenteredintothefollowingloanswiththepreviousChiefFinancialOfficer.

Principal Interestratepermonth

Totalinterestchargedforthe2018Financial

Year

Interestrepaidduringthe2018Financial

Year


IDR1,850,000,000 6.5% IDR1,443,000,000 IDR841,750,000 IDR2,451,250,000

IDR541,895,604 7.5% IDR406,421,703 IDR175,358,108 IDR772,959,199

IDR340,000,000 6.5% IDR80,600,000 - IDR420,600,000

IDR245,000,000 Nil - - IDR245,000,000

IDR2,976,895,604(US$207,335)

IDR1,930,021,703(US$134,421)

(IDR1,017,108,108)((US$70,840))

IDR3,889,809,199(US$270,916)

Given the Company’s financial position during the 2018 financial year, the directors considered the above interest ratesarms’ length for an immediate short-term loan, with no security over the Company’s assets. The loans with the ChiefFinancial Officer were repaid and/or set-off againstmonies determined to be owed to the Group by the previous ChiefFinancialOfficerduringthecurrentfinancialyear. Theset-offwasagreedaspartoftheterminationofthepreviousChiefFinancialOfficerforhisinvolvementinafraudassociatedwithpurchasesfromtheGroup’sformerbargingcontractor.F

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Note15:InterestBearingLoans(cont’d)PlatinumPartners/NorthrockFacilityUndertermsofvariousshort-termloanfacilityagreementsandabridgingloanfacilityagreementdatedAugust2015,theGrouphasborrowedatotalofUS$10.065millionfromvarioussubsidiariesofPlatinumPartners.At30June2018,thefullamountoftheloanisdueandpayabletoNorthrockFinancialLLC(“Northrock”),beingasubsidiaryofPlatinumPartners.BlumontGroup/WintercrestFacilityOn5November2013,theGroupenteredintoaloanfacilityagreementwithBlumontGroupLimited(“Blumont”).Underthisfacility,theGrouphaddrawndownUS$3.4million(30June2017:US$3.4million)(theamountowingasat30Juneincludesinterestandfees).The loanwasrepayableondemandonthethird(3rd)anniversaryofthe loandrawdowndate,being5November 2016.On 7April 2016,Wintercrest Advisors LLC (“Wintercrest”), a subsidiary of PlatinumPartners, agreed toSettlementAgreementwithBlumont,pursuanttowhichtheBlumontloanwasassignedinfulltoWintercrest.Asaresult,WintercrestreplacedBlumontasthelenderunderitsfacilityagreement.

ConversionofloansfromNorthrockandWintercresttoroyaltiesOnJuly2016,Cokalannounced ithadreachedanagreementwithPlatinumPartnersfortheconversionofalloutstandingloansowingundertheWintercrestandNorfolkfacilitiestoproductionroyalties.Theroyaltieswillbepayableon1%oftherealisedsellingpriceofcoal (FOB) fromtheBumiBaritoMineralProject (BBM)andPTTambangBenuaAlamRaya(TBAR)projectsuptoamaximumofUS$40million.Underthearrangement,nominimumroyaltyispayableandtheroyaltyisonlypayableasandwhencoalisminedandsold.

On29April 2017, theGroupentered into aRoyaltyDeedwithWintercrest andNorthrock (collectively the “Lenders”) toconvertalloutstandingloansowingtothemtoproductionroyalties.TheRoyaltyDeedissubjecttoanumberofsubstantiveconditionsprecedent.Theconditionsprecedentinclude:

a)ThecompletionoflegalandcommercialduediligencebytheLenders’;

b)ApprovalbyCokal’sshareholders;

c)TheLendersbeingprovidedsecurityintheformofafirstlegalchargeunderadeedofcharge,overallofCokal’sinterestintheBBMandTBARprojects,inaformreasonablysatisfactorytotheLenders,toprotecttheinterestoftheLendersintheroyalties;

d)CokalevidencingtothesatisfactionoftheLenders(intheirsolediscretion)ithascompletedacapitalraising(debt,equityoracombination)tosupporttheproductionofatleast100ktpaofcoal;

e)CokalevidencingtothesatisfactionoftheLenders(intheirsolediscretion)that:i.Cokal’sproductionisnotlessthan8500tonnespermonthforaperiodofsix(6)consecutivemonths;

ii.Cokal’sproductionforthree(3)monthsfromthedateoffirstproductionisnotlessthanthemonthlyequivalentof100ktpa;

providedtheabovethreeandsixmonthperiodoccurwith18monthsoftheGroupsatisfyingtheconditionin(d)above;and

f)TheLendershavereceivedandapprovedallfinancialbudgetsanticipatedtomeettheproductiontargetsin(d)and(e)above.

On20February2018, theCompany issued75millionOptionstothePlatinumEntitieswithanexpirydateof20February2023andanexercisepriceof1.6cents(ExistingPlatinumOptions).EachExistingPlatinumOptioncurrentlyvestsonceallthePlatinumLoanshavebeenreleasedanddischarged.

InNovember2018,Cokal concludedandexecutedanamendedagreementwithNorthrockFinancial LLCandWintercrestAdvisors LLC (the Platinum Entities) in respect of loans outstanding totalling US$13.89 million (Platinum Loans). TheagreementconfirmedCokal’ssatisfactionwithorwaiveroftheconditionsprecedent(a)to(d)aboveandextendedthedateformeetingall of the remaining conditionsprecedent,being (e) and (f) (the “SubsequentConditions”)under theRoyaltyDeedforconversionoftwothirdsofthePlatinumLoansto31July2020.Inaddition,theamendedagreementprovidedthatwhen Cokal cancels and reissues 37.5 million options to Platinum Partners, one third of the of the Group’s debt withPlatinum Partners is discharged and released. The cancellation and reissue of the 37.5 million options occurred on 10January2019,atwhichtimeonethirdofthedebtwasdischargedandreleased.

As the Group agreed in principal to the conversion of theWintercrest andNorthrock debt to a royalty in July 2016, nointerestexpensehasbeenrecordedsincethatdate.IntheeventtheGroupisnotabletosatisfytheSubsequentConditionsintheRoyaltyDeed(asamended),theLendersmayseektoretrospectivelychargeinterestonamountsowingtothemfortheperiod.Assuch,theGrouphasdetermineditappropriatetodisclosethedebtsasinterest-bearingliabilities.

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Note16:IssuedCapital

2019US$

2018US$

816,842,159authorisedandfullypaidordinaryshares(30June2018:713,699,792)

91,686,061 89,727,054

2019 2018MovementinIssuedCapital US$ US$Atthebeginningoftheyear 89,727,054 84,752,154Amountreceivedforissueofsharesduringtheyear

- Shareissuefromcapitalraising 1,172,628 1,744,476- Shareissueonconversionofoptions 423,194 -- Shareissueonconversionofconvertiblenotes 164,970 1,563,622- Shareissueonpaymentofcreditors 185,048 60,217- Shareissueonconversionofloan 13,167 -- TBARdebtsettlement - 1,606,585

Atreportingdate 91,686,061 89,727,054 MovementinIssueCapital

2019Number

2018Number

(a)Ordinaryshares Atthebeginningoftheyear 713,699,792 593,092,704Sharesissuedduringtheyear

- Shareissuefromcapitalraising 51,265,000 52,940,002- Shareissueonconversionofoptions 37,500,000 -- Shareissueonconversionofconvertiblenotes 7,591,796 41,792,086- Shareissueonpaymentofcreditors 6,245,031 875,000- Shareissueonconversionofloan 540,540 -- TBARdebtsettlement - 25,000,000

Atreportingdate 816,842,159 713,699,792

(b)OptionsAlloptionsonissueat30June2019wereasfollows:

Numberofoptions ExercisepriceUS$

Expirydate

Employees: 1,000,000 0.08 22December20204,000,000 0.10 22December20203,000,000 0.03 20December20213,000,000 0.04 20December20213,000,000 0.05 20December20215,000,000 0.07 20December2021

Consultant 1,000,000 0.07 19September20201,000,000 0.03 20December2021

Platinum/Northrock** 37,500,000 0.01 20February2023

AahanaMineralResourcesSDN 37,500,000 0.01 20February202396,000,000

For information relating to theCokal Limitedemployeeoptionplan, includingdetailsofoptions issued,exercisedand lapsedduringtheyearandtheoptionsoutstandingatyear-endrefertoNote25.

**Thepartieshaveagreed,aspartoftheamendedagreementdiscussedinNote15,thattheseoptionswillnotbeexercised.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019 Note16:IssuedCapital(cont’d)(c)CapitalRiskManagementManagementcontrols thecapitalof theGroup inorder toprovidecapital growth to shareholdersandensure theGroupcanfunditsoperationsandcontinueasagoingconcern.

TheGroupcapitalcomprisesequityasshownintheStatementofFinancialPosition. Therearenoexternallyimposedcapitalrequirementsotherthanshowninnote16.

ManagementeffectivelymanagestheGroupcapitalbyassessingtheGroupfinancialrisksandadjustingitscapitalstructureinresponsetochangesintheserisksandthemarket.Theseresponsesincluderaisingthesufficientequitycapitalwhenrequired.

TherehavebeennochangesinthestrategyadoptedbymanagementtocontrolthecapitaloftheGroupsincetheprioryear.

Note17:Reserves

2019 2018

US$ US$

Sharebasedpaymentsoptionreserve 7,572,139 6,455,598

Translationreserve (1,455,455) (1,455,455)

6,116,687 5,000,143

Theoptionreserverecordsthevalueofoptionsissuedaspartofcapitalraisings,extensionsforloansaswellasexpensesrelatingtodirector,executiveandemployeeshareoptions.

Duringtheyearended30June2018,MrGaryKielenstynwasissued5,000,000unlistedoptionsonthefollowingterms:• 1,000,000optionswithanexercisepriceofUS$0.08andanexpirydateof22December2020,vestingwhentheCompanyhasproduced

100,000tonnesofcoal;and • 4,000,000optionswithanexercisepriceofUS$0.10andanexpirydateof22December2020,vestingwhentheCompanyisconsistently

operatingataproductionrateforthreemonthsof45,000tonnesofcoalpermonth.

1,000,000options(withanexercisepriceofUS$0.07andexpirydateof19September2020)werealsoissuedtoHelbraunHoldingsPtyLtdforconsultingservicesprovidedtotheCompanyduringthe2018financialyear.

In addition theCompany issued75,000,000optionsduring the2018 financial year toPlatinum/Northrock in accordancewiththetransactiontoconvert loanstoproductionroyalties(referNote15).Theseoptionshadnosharebasedpaymentvalueastheywereissuedontheagreementoffutureconversionofdebt,subjecttoanumberofsignificantconditions. During theyearended30 June2019, JamesColemanwas issued14,000,000unlistedoptionsasa sign-upbonuson thefollowingterms.Aportionofthevalueoftheseoptionshasbeenexpensedinthe2019financialyear.

• 3,000,000optionswithanexercisepriceofUS$0.03andexpirydateof20December2021,vestingonproductionof20,000tonnespermonthofcoal(includingPCI)forthreeconsecutivemonths;

• 3,000,000optionswithanexercisepriceofUS$0.04andexpirydateof20December2021,vestingonproductionof40,000tonnespermonthofcoal(includingPCI)forthreeconsecutivemonths;

• 3,000,000optionswithanexercisepriceofUS$0.05andexpirydateof20December2021,vestinguponcommencementofshallowriverbarging;and

• 5,000,000optionswithanexercisepriceofUS$0.07andexpirydateof20December2021,vestinguponfirstshipmentofcokingcoalfromBBM.

1,000,000options(withanexercisepriceofUS$0.03andexpirydateof20December2021)werealsoissuedtoLightglowEnterprisesforconsultingservicesprovidedtothecompany.

Translation reserve represents the net exchange differences arising from the translation as a result of change inpresentationcurrencytoUS$fromAUD.

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Note18:AccumulatedLosses2019US$

2018US$

AccumulatedlossesattributabletomembersofCokalLimitedatbeginningoftheyear (88,000,311) (80,204,168)

Lossfortheyear (1,855,717) (7,796,143)AccumulatedlossesattributabletomembersofCokalLimitedattheendoftheyear (89,856,028) (88,000,311)

Note19:ParentEntityInformationTheconsolidated financial statements incorporate theassets, liabilitiesand resultsof theparententity inaccordancewiththeaccountingpolicydescribedinNote1.

ParentEntity2019 2018US$ US$

Currentassets 119,407 144,061Non-currentassets 18,755,668 22,113,230Totalassets 18,875,075 22,257,291Currentliabilities 10,581,376 15,529,834Non-currentliabilities 721,952 576,236Totalliabilities 11,303,327 16,106,070Netassets 7,571,748 6,151,221Issuedcapital 91,686,061 89,727,054Reserves 7,572,136 6,455,595Revaluationreserve (3,565,142) (3,565,142)Accumulatedlosses (88,121,311) (86,466,286)Totalshareholder’sequity 7,571,748 6,151,221Profit/(Loss)fortheyear 1,655,025 (8,371,809)Totalcomprehensiveprofit/(loss)fortheyear 1,655,025 (8,371,809)

GuaranteesTheparententityhas setupwhollyownedspecialpurposeentities (SPEs) inSingapore toholdownership interests inIndonesiaandTanzaniaentitiesandprovidedanundertakingtofinanciallysupportSPEstomeettheir liabilitiesasandwhentheyfalldue.

ContractualCommitmentsTherewerenocontractualcommitmentsfortheacquisitionofproperty,plantandequipmententeredintobytheparententityat30June2019(2018–nil).

ContingentliabilitiesTheparententityhasnocontingentliabilities.

CapitalcommitmentsTheparententityhasnocapitalcommitments.

ImpairmentassessmentAt30June2019,CokalLimited,theparententity,performedanimpairmentassessmentofitsinvestmentsinsubsidiariesandnon-current receivables fromsubsidiaries.Asa resultof thisassessment, thecarryingamountof theseassetswasimpairedbyUS$4,000,000(2018:US$5,700,000). F

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note20:Commitments

2019 2018US$ US$

OperatingleasecommitmentsFutureminimumrentalspayableundernon-cancellableoperatingleasesasat30June2019areasfollows:Payable- notlaterthan12months 77,297 144,887- between12monthsand5years 81,397 259,589- greaterthan5years - -

158,694 404,477

Note21:ContingentLiabilitiesTheGrouphasanumberofcontingent liabilities in respectofdeferredpurchaseconsideration for theacquisitionof itsminingandexplorationtenements.

At30June2019,theGroup’scontingentliabilitiestotalUS$17.95m(30June2018:US$17.95m)inrespectofitsBBMandPTBorneoBaraPrima(BBP)tenements.Theamountsarepayableontheachievementofcertainmilestones,includingbutnot limitedtotheestablishmentofcertain JORC InferredCoalResourcesandthe issuanceofproductionoperation IUPs(licences) and production forestry permit. During the year ending 30 June 2018, the Company settled any outstandingcontingentliabilitiesinrespectofTBARwiththeissueof25,000,000sharestothevendors(referNote16).

PaymentswhichmaybetriggeredbythecommencementofdevelopmentatBBMDeferredpurchaseconsiderationAspartoftheGroup’sacquisitionofitsinterestintheBBMproject,itwasagreedanamountofUS$10.0millionwouldbepayablewithin30daysoftheissueoftheProduction/OperationsIUP(mininglicensegrantedundertheIndonesianNewMiningLaw).On1May2013, theProduction/Operations IUPwasgrantedbut thepaymentto thevendorwasdeferredpendingtheissuanceoftheForestryProductionPermit(requiredtocommencetheconstructionandproduction).On15August2015,CokalreceivedBBM’sForestryProductionPermit.

On3March2016, theGroupexecutedavariation letterwith thevendorwhereby thepartiesagreed theobligation for$10.0 million payment would triggered when Cokal had sufficient funds to commencement of the construction/developmentoftheBBMproject.

No liability is recognised as at 30 June 2019 (30 June 2018: nil) in respect this deferred purchase consideration as theGrouphadnotsecuredfundingtocommencetheconstruction/developmentoftheBBMproject.

Aspartof theDirectors’ considerationof theabilityof theGroup tocontinueasagoingconcern (refernote1 (c)), theDirectorsareawaresomeorallofthedeferredconsiderationmaybetriggeredbythecommencementattheBBMproject.

Giventhepotentialuncertainty,theCompanyengagedwiththevendorsoftheBBMprojecttoclarifyitsinterpretationoftheagreementof3March2016.Aspartofthenegotiationsandingoodfaith,theCompanyagreedtopayanarrangementfee of US$996,198 to the vendors for them agreeing to certain clarifications to the agreement of 3 March 2016.US$496,198 was paid at the time of executing the variation and a further US$500,000 is payable, subject to certainconditionsprecedentincludingacapitalraising.ThefullamountofthearrangementfeeofUS$996,198hasbeenrecordedasanexpenseinthestatementofcomprehensiveincomeforJune2018.Theclarificationtothe3March2016agreementconfirmedtheCompany’sviewnofurtherpayments, includingtheabovementionedUS$10.0million,aredueorpayableuntil the Company had entered into a substantial funding arrangement and/or commenced substantial production. Noliability is recognisedas at 30 June2019 in respect thisdeferredpurchase considerationas theGrouphadnot securedfundingtocommencetheconstruction/developmentoftheBBMproject.

Atthistime,theGroupdoesnothavesufficientfundstodevelopthelargerBBMprojectorfundanyportionoftheUS$10.0milliondeferredconsiderationthatmaybepayable.Totheextentmoniesarerequiredtobepaid,theGroupwillneedtoraisecapitaltofundthesepayments.Thedirectorsarenotawareofanyothersignificantcontingentliabilitiesorcontingentassetsatthedateofthisreport.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note22:OperatingSegments

Australia Indonesia Singapore Total

US$ US$ US$ US$

Segmentperformancefortheyearended30June2019

Saleofcoal - 470,109 - 470,109

Otherincome 4,630,767 - - 4,630,767

Interestrevenue - 976 - 976

Intersegmentincome* - - - -

Totalsegmentincome 4,630,767 471,085 - 5,101,852

Depreciationexpenses (65,772) (16,885) - (82,657)

Financecosts (3,429) (33,021) - (36,450)

Sharebasedpayments (1,003,561) - - (1,003,561)

Write-offCapitalWIP - (1,162,169) - (1,162,169)

Otherexpenses (1,250,568) (3,411,469) (10,695) (4,672,732)

Totalsegmentexpenses (2,323,330) (4,623,544) (10,695) (6,957,569)

Segmentnetprofit/(loss)beforetax 2,307,437 (4,152,459) (10,695) (1,855,717)

Segmentassetsandliabilitiesasat30June2019

Property,plantandequipment 106,134 80,697 - 186,831

Explorationandevaluationassets - 25,067,202 - 25,067,202

Othersegmentassets (2,788) 326,785 - 323,997

Totalsegmentassets 103,346 25,474,684 - 25,578,030

Totalsegmentliabilities 10,624,966 6,846,567 159,777 17,631,310

Capitalexpenditurefortheyearended30June2019

Property,plantandequipment - 2,843 - 2,843

Explorationandevaluationassets - - - -*IntersegmentexpenserelatingtotheincomeiseliminatedinIndonesia’sexplorationandevaluationassets.

Australia Indonesia Singapore Total

US$ US$ US$ US$

Segmentperformanceforyearended30June2018

Saleofcoal - 652,074 - 652,074

Interestrevenue - 98 - 98

Intersegmentincome* - - - -

Totalsegmentincome - 652,172 - 652,172

Depreciationexpenses (7,626) (17,613) - (25,239)

Financecosts (434,268) (205,343) - (639,611)

Otherexpenses (2,238,920) (5,385,917) (158,627) (7,783,465)

Totalsegmentexpenses (2,680,814) (5,608,873) (158,627) (8,448,315)

Segmentnetlossbeforetax (2,680,814) (4,956,702) (158,627) (7,796,143)

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Note22:OperatingSegments(cont’d)Australia Indonesia Singapore Total

US$ US$ US$ US$

Segmentassetsandliabilitiesasat30June2018

Property,plantandequipment 168,078 1,260,733 - 1,428,811

Explorationandevaluationassets - 25,067,202 - 25,067,202

Othersegmentassets 8,983 207,990 2,790 219,763

Totalsegmentassets 177,061 26,535,925 2,790 26,715,776

Totalsegmentliabilities 15,405,643 4,367,483 215,763 19,988,890

Capitalexpenditurefortheyearended30June2018

Property,plantandequipment - 3,155 - -

Explorationandevaluationassets - 1,606,585 - -*IntersegmentexpenserelatingtotheincomeiseliminatedinIndonesia’sexplorationandevaluationassets.

Note23:CashflowInformationNote

2019US$

2018US$

(a)Reconciliationoflossafterincometaxtonetcashflowusedinoperatingactivities

Lossfortheyear (1,855,717) (7,796,143)

Non-cashitems:

- Depreciation 10 82,657 25,329

- Property,plantandequipmentwrite-off 10 1,162,166 -

-Shareoptionsexpensed** 24 1,116,544 92,730

- Shareissuesinpaymentofexpenses** 16 185,048 60,217

- Gainonloanforgiveness 2&15 (4,630,767) -

Changeinoperatingassetsandliabilities:

- Decreaseinaccountsreceivables 21,032 -

-Increaseinotherassets (13,407) -

-Increaseinrevenueinadvance (307,189) 307,189

- (Decrease)/Increaseinconvertiblenotes (12,887) 364,108

- Increaseinaccountspayables 1,275,251 3,155,135

Netcashflowusedinoperatingactivities (2,977,269) (3,791,435)

**TheCompanyissuedsharesandoptionsinpaymentofthefollowing(refernotes16and24):

Shareoptionsexpensed:- OptionsissuedondischargeandreleaseofPlatinumentityloans:US$1,003,561(2018:US$nil);- OptionsissuedasabonustotheCEOUS$100,078(2018issuedtoExecutiveDirector:US$81,604);and- Optionsissuedtocreditors:US$12,905(2018:US$11,126).

Shareissuesinpaymentofexpenses:- Sharesissuedinpaymentofthreemonth’sCEO’ssalaryUS$28,686(2018:US$nil)- Sharesissuedinpaymentofcreditors:US$156,362(2018:US$60,217);- Sharesissuedonconversionofconvertiblenotes:US$164,970(2018:US$1,563,622);- Sharesissuedonconversionofloan:US$13,167(2018:US$nil);and- SharesissuedinrespectofTBARsettlement:US$nil(2018:US$1,606,585).

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note24:Share-basedPaymentsThefollowingshare-basedpaymentarrangementsexistedat30June2019.

(a) Share-basedpaymentstodirectors,executives,employeesandsuppliers

Duringtheperiodended30June2019,Niloptionswereissuedtodirectorsand1,245,031sharesand14,000,000optionswereissuedtoexecutivesandemployeesoftheGroup.Optionsonissuetosuppliersasat30June2019areasfollows:• On20February2018,75,000,000optionswereissuedtoNorthrockandPlatinumPartnersatUS$0.01expiringon20

February2023,vestingonconversionofdebttoroyalty

• On 19 September 2018, 1,000,000 options were issued to Helbraun Holdings Pty Ltd at US$0.07, expiring on19September2020

• On 20 December 2018, 1,000,000 options were issued to Lightglow Enterprises Pty Ltd at US$0.03, expiring on20December2021

• On 10 January 2019, 37,500,000 options were issued to Platinum entities at US$0.01, expiring 10 January 2023.Thesewereexercisedduringtheyear.

Alloptions issuedbyCokalLimitedentitletheholdertooneordinaryshare inCokalLimitedforeachoptionexercised.Theoptionsweregrantedfornilconsideration.Oncevested,optionscanbeexercisedatanytimeuptotheexpirydate.

Therangeofexercisepricesforoptionsoutstandingat30June2019wasUS$0.01toUS$0.10(2018:US$0.01toUS$0.23)andweightedaverageremainingcontractuallifeof3.29years(30June2018:2.75years).

30June2019 30June2018

No.ofoptions Weightedaverageexerciseprice

No.ofoptions Weightedaverageexerciseprice

US$ US$

Outstandingatbeginningofperiod 140,800,000 0.07 19,800,000 0.16

Granted 52,500,000 0.02 81,000,000 0.02

Forfeited/Cancelled - - - -

Exercised 37,500,000 0.01 - -

Expired 59,800,000 0.14 (9,800,000) 0.09

Outstandingatperiod-end 96,000,000 0.02 140,800,000 0.07

Exercisableatperiod-end 2,000,000 0.05 60,800,000 0.02

Sharesissuedonexerciseofanoptionrankequallywithallotherordinarysharesthenonissue.

(b) Recognisedsharebasedpaymentexpenses2019US$

2018US$

EffectonOptionReserve

EffectonStatementof

ComprehensiveIncome

EffectonOptionReserve

EffectonStatementof

ComprehensiveIncome

Expensearisingfromoptionsissuedonamendmentofdebttoroyaltyconversionagreement

1,003,561 1,003,561 - -

Expensearisingfromsharesissuedassalaryexpense - 28,686 - -Expensearisingfromsharesissuedinpaymentofcreditors - 156,362 - 60,217Expenserecognisedforoptionsissuedasbonus 100,078 100,078 81,604 81,604Expensearisingfromoptionsissuedinpaymentofcreditors 12,905 12,905 11,126 11,126

1,116,544 1,301,592 92,730 152,947

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note25:RelatedPartyDisclosureTransactionsbetweenrelatedpartiesareonnormalcommercialtermsandconditionsnomorefavourablethanthoseavailabletootherpartiesunlessotherwisestated.

(a) Parententity

TheparententityandultimatecontrollingentityisCokalLimited,whichisincorporatedinAustralia.

(b) SubsidiariesInterestsandtransactionsinsubsidiariesaredisclosedinNote9.

(c) Keymanagementpersonnel(KMP)compensation

TheKMPcompensationfortheyearendedaresetoutbelow:

2019US$

2018US$

Short-termemployeebenefits* 624,018 788,865Post-employmentbenefits 18,023 -Terminationbenefits 45,683 -Share-basedpayments 100,078 51,005

787,802 839,870

*Directorsarenotsalarypaid,buttheirfeesareincludedintheshort-termemployeebenefits.Thetermsofdirectors’servicesaredescribedbelow.Amountsincluded,butnotpaidasatyearendarerecordedundernote13.

(d) OptionholdingsofKMPfortheyearended

KMPoptionholdingsfortheyearendedaresetoutbelow:

Balance1July2018


ExerciseofOptions

NetChangeOther

Balance30June2019

Totalvestedat30June

2019

Totalvestedand


Totalvestedand

unexercisableat30June

2019Directors 9,000,000 - - (4,000,000) 5,000,000 - - -SeniorManagement 500,000 14,000,000 - (500,000) 14,000,000 - - -Total 9,500,000 14,000,0000 - (500,000) 19,000,000 - - -

Balance1July2017


ExerciseofOptions

NetChangeOther*

Balance30June2018

Totalvestedat30June

2018

Totalvestedand


Totalvestedand

unexercisableat30June

2018Directors 8,000,000 - - (4,000,000) 9,000,000 4,000,000 4,000,000 -SeniorManagement 500,000 - - - 500,000 500,000 500,000 -Total 8,500,000 - - (4,000,000) 9,500,000 4,500,000 4,500,000 -

* Gerhardus Kielenstyn was appointed a Director on 27 January 2017. He held 8 million options at the time of appointment.

ShareoptionsheldbyKMPtopurchaseordinaryshareshavethefollowingexpirydatesandexerciseprices:2019

Numberofoptionsoutstanding

2018Numberofoptions

outstanding

ExercisepriceUS$

Issueddate Vestingdate Expirydate

- 4,500,000 0.10 24-Feb-15 24-Feb-16 24-Feb-19- Note3 0.10 24-Feb-15 24-Feb-17 24-Feb-19

1,000,000 1,000,000 0.09 22-Dec-17 Note1 22-Dec-204,000,000 4,000,000 0.12 22-Dec-17 Note2 22-Dec-203,000,000 - 0.03 20-Dec-19 Note4 20-Dec-213,000,000 - 0.04 20-Dec-19 Note5 20-Dec-213,000,000 - 0.05 20-Dec-19 Note6 20-Dec-215,000,000 - 0.07 20-Dec-19 Note7 20-Dec-2119,000,000 9,500,000

Note1:vestingonproductionof100,000tonnesofcoalNote2:vestingonachievingaconsistentproductionrateforthreemonthsof45,000tonnesofcoalpermonthNote3:heldbypreviousyears’KMPNote4:vestingonproductionof20,000tonnespermonthofcoal(includingPCI)forthreeconsecutivemonthsNote5:vestingonproductionof40,000tonnespermonthofcoal(includingPCI)forthreeconsecutivemonthsNote6:vestinguponcommencementofshallowriverbargingNote7:vestinguponfirstshipmentofcokingcoalfromBBM

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note25:RelatedPartyDisclosure(Cont’d)(e) ShareholdingsofKMPfortheyearended

KMPshareholdingsfortheyearendedaresetoutbelow.

Balance1July2018


OnExerciseofOptions

NetChangeOther

Balance30June2019

Directors 62,920,001 - - 148,125,000 211,045,001SeniorManagement 2,401,215 1,245,031 - (2,401,215) 1,245,031Total 65,321,216 1,245,031 - 145,723,785 212,290,032

Balance1July2017


OnExerciseofOptions

NetChangeOther

Balance30June2018

Directors 62,920,001 - - - 62,920,001SeniorManagement 2,401,215 - - - 2,401,215Total 65,321,216 - - - 65,321,216

(f) KMPTransactions

KMPtransactionsfortheyearendedaresetoutbelow.

MrDomenicMartino

• Asat30June2019directorfeestotalingUS$182,724(2018:US$148,615remainoutstandingtoMrMartino.• Asat30June2019aloanofUS$nil(2018:US$44,346)wasowingtoMrMartinobytheCompany.Thisloanwas

providedforworkingcapitalpurposes,isrepayableondemandanddoesnotaccrueinterest.• Asat30June2019,MrMartinowasowedUS$2,242(2018:US$67,128)forexpensespaidontheCompany’sbehalf.

Thisamountisrepayableondemandanddoesnotaccrueinterest.• On9August2017theCompanyenteredintoanagreementwithIndianOceanCorporatePtyLtd,acompanyofwhich

MrMartinoisadirector,forcompanysecretarialservicesatacostofAU$4,000(exclGST)permonth.Theservicesarebasedonnormalcommercialtermsandconditions.Asat30June2019,companysecretarialfeesofUS$nil(2018:US$16,000))remainoutstanding.Inaddition,duringthe2019financialyear,IndianOceanCorporatePtyLtdhasprovidedcorporateadvisoryservicestotalingUS$69,731(2018:US$218,483)andassistancewiththepreparationofreports,totalingUS$46,550(2018:US$26,422).

Mr Patrick Hanna

• Asat30June2019directorfeestotalingUS$156,622(2018:US$148,615)remainoutstandingtoMrHanna.• Asat30June2019aloanofAUD108,500(US$76,981)(2018:US$80,192)wasowingtoMrHannabytheCompany.This

loanwasforworkingcapitalpurposes,isrepayableondemandanddoesnotaccrueinterest.

Mr Gerhardus Kielenstyn

• Asat30June2019remunerationfeestotalingUS$nil(2018:US$51,200)remainoutstandingtoMrKielenstyn.• Asat30June2019aloanofUS$83,041(2018:US$33,000andUS$90,000)wereowingtoMrKielenstynbythe

Company.Theseloansarerepayableondemandanddonotaccrueinterest.

MrJamesColeman

• Asat30June2019remunerationtotalingUS$165,675(2018:US$nil)remainoutstandingtoMrColeman.

MrTeukuJuliansyah

• Asat30June2019remunerationfeestotalingUS$nil(2018:US$37,837)remainoutstandingtoMrJuliansyah.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note25:RelatedPartyDisclosure(cont’d)• Asat30June2019and30June2018thefollowingloanswereoutstandingtoMrJuliansyah.Interestonallloansis

accrueduntilrepayment.

2019financialyearPrincipal

Interestrateper

month

Interestaccruedatbeginningofyear

Totalinterestcharged(inclanypenalty)forthe

Year


AmountOutstanding

asat30June2019

IDR1,850,000,000 6.5% IDR601,250,000 IDR584,914,500 (IDR3,036,164,500) -

IDR541,895,604 7.5% IDR312,347,864 IDR39,838,670 (IDR894,082,138) -

IDR340,000,000 6.5% IDR265,200,000 IDR37,925,000 (IDR643,125,000) -

IDR245,000,000 Nil - - (IDR245,000,000) -

IDR2,976,895,604(US$209,640)

IDR1,178,797,864(US$83,014)

IDR662,678,170(US$46,667)

(IDR4,818,371,638)((US$339,321))

-

PrincipalInterestratepermonth

TotalinterestchargedfortheYear


AmountOutstandingasat

30 June2018IDR1,850,000,000 6.5% IDR1,443,000,000 (IDR841,750,000) IDR2,451,250,000

IDR541,895,604 7.5% IDR487,706,044 (IDR175,358,108) IDR772,959,199

IDR340,000,000 6.5% IDR265,200,000 - IDR420,600,000

IDR245,000,000 Nil - - IDR245,000,000

IDR2,976,895,604(US$207,335)

IDR2,195,906,044(US$134,421)

(IDR1,017,108,108)((US$70,840))

IDR3,889,809,199(US$270,916)

GiventheCompany’sfinancialpositionduringtheyear,thedirectorsconsideredtheaboveinterestratesarms’lengthforanimmediateshort-termloan,withnosecurityovertheCompany’sassets.

Note26:FinancialRiskManagement(a) Generalobjectives,policiesandprocessesIncommonwithallotherbusinesses,theGroupisexposedtorisksthatarisefromitsuseoffinancialinstruments.ThisnotedescribestheGroupobjectives,policiesandprocessesformanagingthoserisksandthemethodsusedtomeasurethem.Furtherquantitativeinformationinrespectoftheserisksispresentedthroughoutthesefinancialstatements.

TherehavebeennosubstantivechangesintheGroup’sexposuretofinancialinstrumentrisks,itsobjectives,policiesandprocessesformanagingthoserisksorthemethodsusedtomeasurethemfrompreviousperiodsunlessotherwisestatedin this note. The Group’s financial instruments consist mainly of deposits with banks, accounts receivable, securitydeposits,interestbearingloansandaccountspayable.

The Board has overall responsibility for the determination of the Group’s financial risk management objectives andpoliciesand,whilstretainingultimateresponsibilityforthem,ithasdelegatedtheauthorityfordesigningandoperatingprocessesthatensuretheeffectiveimplementationoftheobjectivesandpoliciestotheGroup’sfinancefunction.TheGroup’s financial riskmanagementpoliciesandobjectivesarethereforedesignedtominimisethepotential impactsoftheserisksontheresultsoftheGroupwheresuchimpactsmaybematerial.

Theoverallobjectiveof theBoard is tosetpolicies thatseek to reduce financial riskas faraspossiblewithoutundulyaffectingtheGroup’scompetitivenessandflexibility.Furtherdetailsregardingthesepoliciesaresetoutbelow.

(b) CreditriskCreditriskistheriskthattheotherpartytoafinancialinstrumentwillfailtodischargetheirobligationresultingintheGroupincurringafinancialloss.ThisusuallyoccurswhendebtorsfailtosettletheirobligationsowingtotheGroup.TheGroup’sobjectiveistominimisetheriskoflossfromcreditriskexposure.

TheGroup’smaximumexposuretocreditriskattheendofthereportingperiod,withouttakingintoaccountthevalueofanycollateralorothersecurity,intheeventotherpartiesfailtoperformtheirobligationsunderfinancialinstrumentsinrelationtoeachclassofrecognisedfinancialassetatreportingdate,isasfollows:

2018financialyear

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019 Note26:FinancialRiskManagement(cont’d)

Note

2019 2018 US$ US$

Cashandbankbalances 7 127,361 15,502Receivables 8 2,102 23,134Securitydeposits 7 138,916 138,916Total 268,379 177,552

CreditriskisreviewedregularlybytheBoardandtheAuditCommittee.

TheGroupdoesnothaveanymaterial credit riskexposure toany singledebtororGroupofdebtorsunder financialinstrumentsenteredintobytheGroup.Noreceivablesbalanceswerepastdueorimpairedatperiodend.Thecreditquality of receivables that are neither past due nor impaired is good. Bank deposits are heldwithMacquarie BankLimited,NationalAustraliaBankLimitedandAustraliaandNewZealandBankingCorporationLimited. (c)LiquidityRisk LiquidityriskistheriskthattheGroupmayencounterdifficultiesraisingfundstomeetfinancialobligationsastheyfalldue.Theobjectiveofmanaging liquidityrisk is toensure,as faraspossible, thattheGroupwillalwayshavesufficientliquiditytomeetsitsliabilitieswhentheyfalldue,underbothnormalandstressedconditions LiquidityriskisreviewedregularlybytheBoardandtheAuditCommittee. Carrying

AmountContractualCashflows <6months 6–12months 1–3years >3years

US$ US$ US$ US$ US$ US$MATURITYANALYSIS–30June2019 FinancialLiabilities

- Accountspayable 8,369,775 8,369,775 6,369,775 2,000,000 - -- Interestbearingloans 9,261,535 9,261,535 9,261,535 - - -- Total 17,631,310 17,631,310 15,631,310 2,000,000 - -

CarryingAmount Contractual

Cashflows <6months 6–12months 1–3years >3years

US$ US$ US$ US$ US$ US$MATURITYANALYSIS–30June2018 FinancialLiabilities

- Accountspayable 5,461,564 5,461,564 5,461,564 - - -- Convertiblenotes 364,109 - - - Interestbearingloans 14,163,218 14,163,218 14,163,218 - - -- Total 19,988,891 19,624,782 19,624,782 - - -

FurtherinformationregardingcommitmentsisincludedinNote20.

(d)MarketRisk

Market riskarises fromtheuseof interestbearing, tradableand foreigncurrency financial instruments. It is theriskthat the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates(interestraterisk),foreignexchangerates(currencyrisk)orothermarketfactors(otherpricerisk).Theentitydoesnothaveanymaterialexposuretomarketriskotherthanassetoutbelow.

(i)Interestraterisk

Interestrateriskarisesprincipallyfromcashandcashequivalents.Theobjectiveofinterestrateriskmanagementistomanageandcontrolinterestrateriskexposureswithinacceptableparameterswhileoptimisingthereturn.

Interestrateriskismanagedwithfixedratedebt.Forfurtherdetailsoninterestrateriskrefertothetablesbelow:

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note26:FinancialRiskManagement(cont’d)(i) Interestraterisk(cont’d)

2019 Floatinginterestrate Fixedinterestrate Non-interestbearing

Totalcarryingamount

Weightedaverageeffective

interestrate

US$ US$ US$ US$ %FinancialassetsCashandbankbalances 127,361 - - 127,361 -Receivables - - 2,102 2,102 -Securitydeposits - - 138,916 138,916 -Totalfinancialassets 127,361 - 141,018 268,379 -FinancialliabilitiesAccountspayable - - 8,369,775 8,369,775 -Interestbearingloans - 9,261,535 - 9,261,535 -Totalfinancialliabilities - 9,261,535 8,369,775 17,631,310 -

2018 Floatinginterestrate

Fixedinterestrate Non-interestbearing

Totalcarryingamount

Weightedaverageeffective

interestrate

US$ US$ US$ US$ %FinancialassetsCashandbankbalances 15,502 - - 15,502 -Receivables - - 23,134 39,868 -Securitydeposits - - 138,916 138,916 -Totalfinancialassets 15,502 - 162,050 194,286 -FinancialliabilitiesAccountspayable - - 5,461,564 5,461,564 -Interestbearingloans - 14,163,218 - 14,163,218 -Totalfinancialliabilities - 14,163,218 5,461,564 19,624,782 -

TheGrouphasperformedasensitivityanalysisrelatingtoitsexposuretointerestraterisk.Thissensitivitydemonstratestheeffectonthecurrentperiodresultsandequitywhichcouldresultfromachangeintheserisks.

At30June2019theeffectonposttaxprofitandequityasaresultofchangesintheinterestrateforfloatinginterestrateinstruments,withallothervariablesheldconstant,wouldbeasfollows:

CarryingAmount(interestbearing)

Increaseininterestrateby0.5%

Decreaseininterestrateby0.5%

US$ US$ US$2019

Cashandcashequivalents 266,277 1,331 (1,331)

Totaleffectonposttaxprofit 266,277 1,331 (1,331)

2018

Cashandcashequivalents 154,418 772 (772)

Totaleffectonposttaxprofit 154,418 772 (772)

(ii) CurrencyriskExposureto foreignexchangeriskmayresult in the fairvalueor futurecash flowsofa financial instrument fluctuatingduetomovementinforeignexchangeratesofcurrenciesinwhichtheGroupholdfinancialinstrumentswhichareotherthantheUS$functionalcurrencyoftheGroup.

TheGroupisexposedtocurrencyriskonitscashandcashequivalentsheld(inAUDandIndonesianRupiah)inIndonesiaandAustraliaaswellasonpurchasesmadefromsuppliersinIndonesiaandAustralia.

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note26:FinancialRiskManagement(cont’d)(ii) Currencyrisk(cont’d)

TheGroup’sexposuretoforeigncurrencyriskandtheeffectonposttaxprofitasaresultofchangesinforeigncurrencyrates,withallothervariablesheldconstant,areasfollows:

AUD SGD IndonesianRupiah

Total

US$ US$ US$ US$2019

Cashandcashequivalents (790) - 128,151 127,361

Accountspayable 1,323,000 319,339 6,727,436 8,369,775

Netexposure 1,322,210 319,339 6,855,587 8,497,136

Effectonpostprofit:

Increaseby10% 132,221 31,934 685,559 849,714

Decreaseby10% (132,221) (31,934) (685,559) (849,714)

2018

Cashandcashequivalents 1,013 6,108 4,802 11,923

Accountspayable 1,137,955 225,650 3,135,875 4,499,480

Netexposure 1,138,968 231,758 3,140,677 4,511,403

Effectonposttaxprofit:

Increaseby10% 113,897 23,176 314,068 451,141

Decreaseby10% (113,897) (23,176) (314,068) (451,141)

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NotestotheConsolidatedFinancialStatementsfortheyearended30June2019Note27:SignificantEventsaftertheReportingDate

There have been no significant events after reporting date except for the completion of an Entitlement Offer by theCompany,raisingAU$5.1millionandtheresignationofMrGerhardus(Garry)KielenstynasadirectoroftheCompany.

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DeclarationbyDirectorsThedirectorsoftheGroupdeclarethat:

1. The financial statements, comprising the statement of comprehensive income, statement of financial position,statement of cash flows, statement of changes in equity, and accompanying notes, are in accordance with theCorporationsAct2001and:

(a) complywithAustralianAccountingStandardsandtheCorporationsRegulations2001;and

(b) giveatrueandfairviewoftheGroup’sfinancialpositionasat30June2019andof itsperformancefortheyearendedonthatdate.

2. The Group has included in the note 1 to the financial statements and explicit and unreserved statement ofcompliancewithInternationalFinancialReportingStandards.

3. Inthedirectors’opinion,therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable.

4. Theremunerationdisclosuresincludedinpages13to19ofthedirectors’report(aspartofauditedRemunerationReport)fortheyearended30June2019,complywithsection300AoftheCorporationsAct2001.

5. Thedirectorshavebeengiventhedeclarationsbythechiefexecutiveofficerandchieffinancialofficerrequiredbysection295AoftheCorporationsAct2001.

Thisdeclarationissignedinaccordancewitharesolutionofthedirectors.

CokalLimited

DomenicMartinoChairmanSydney1October2019

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Ernst & Young111 Eagle StreetBrisbane QLD 4000 AustraliaGPO Box 7878 Brisbane QLD 4001

Tel: +61 7 3011 3333Fax: +61 7 3011 3100ey.com/au

Independent Auditor's Report to the Members of Cokal Limited

Report on the Audit of the Financial Report

Qualified Opinion

We have audited the financial report of Cokal Limited (the “Company”) and its subsidiaries(collectively the “Group”), which comprises the consolidated statement of financial position as at 30June 2019, the consolidated statement of comprehensive income, consolidated statement of changesin equity and consolidated statement of cash flows for the year then ended, notes to the financialstatements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion sectionof our report the accompanying financial report of the Group is in accordance with the CorporationsAct 2001, including:

a) giving a true and fair view of the consolidated financial position of the Group as at 30 June2019 and of its consolidated financial performance for the year ended on that date; and

b) complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Qualified Opinion

Comparative Information

During the financial year ended 30 June 2018, our audit procedures identified accountingirregularities and fraudulent activity in respect of Group’s contracting with its supplier of bargingservices in Indonesia. The Group’s own investigation subsequently confirmed fraudulent activity bythe Group’s Indonesian based Chief Financial Officer and other Indonesian based employees(collectively “the implicated employees”). During the half-year ended 31 December 2018, the Groupfinalised its investigation of the fraudulent activity resulting in the termination of the implicatedemployees.

For the year ended 30 June 2018, the Group’s consolidated statement of comprehensive incomereports production expenses of $3,808,113, including barging expenses of $1,285,698. Inperforming our audit procedures for the year ended 30 June 2018, we were unable to obtainsufficient appropriate audit evidence as to whether the Group’s barging expenses had been validlyincurred by the Group and whether the amount paid for barging services represented an arm’s lengthprice for those services. We were also unable to obtain sufficient appropriate audit evidence as to theamount of the payments made and expenses accrued for the barging services that should beaccounted for as other expenses on the basis they had been misappropriated by the implicatedemployees. Consequently, we were unable to determine whether any adjustments to productionexpense and administration expenses for the year ended 30 June 2018 and accounts payable as at 30June 2018 were necessary. Our opinion on the financial report for the year ended 30 June 2018 wasmodified accordingly. Our audit opinion on the current year financial report is also modified becauseof the possible effects of this matter on the prior period amounts which are presented as comparativeinformation.

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We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities underthose standards are further described in the Auditor’s Responsibilities for the Audit of the FinancialReport section of our report. We are independent of the Group in accordance with the auditorindependence requirements of the Corporations Act 2001 and the ethical requirements of theAccounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for ProfessionalAccountants (the Code) that are relevant to our audit of the financial report in Australia. We have alsofulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our qualified opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 (c) in the financial report, which describes the principal conditions thatraise doubt about the Group’s ability to continue as a going concern. These events or conditionsindicate that a material uncertainty exists that may cast significant doubt on the Group’s ability tocontinue as a going concern and therefore whether it will realise its assets and extinguish its liabilitiesin the normal course of business and at the amounts stated in the financial report. The financial reportdoes not include any adjustments relating to the recoverability and classification of recorded assetamounts or to the amounts and classification of liabilities that might be necessary should the entitynot continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance inour audit of the financial report of the current year. These matters were addressed in the context ofour audit of the financial report as a whole, and in forming our opinion thereon, but we do not providea separate opinion on these matters. For the matter below, our description of how our audit addressedthe matter is provided in that context. In addition to the matters described in the Basis for QualifiedOpinion and Material Uncertainty Related to Going Concern sections above, we have determined thematters described below to be the key audit matters to be communicated in our report.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of theFinancial Report section of our report, including in relation to these matters. Accordingly, our auditincluded the performance of procedures designed to respond to our assessment of the risks ofmaterial misstatement of the financial report. The results of our audit procedures, including theprocedures performed to address the matters below, provide the basis for our audit opinion on theaccompanying financial report.

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1. Carrying value of deferred exploration and evaluation

Why significant How our audit addressed the key audit matter

The carrying value of exploration and evaluationassets is subjective as it is based on the Group’sability, and intention, to continue to explore theasset. The carrying value may also be impactedby the results of exploration work indicating thatthe mineral reserves and resources may not becommercially viable for extraction. This creates arisk that the amounts stated in the financialreport may not be recoverable and as a resultthis was a key audit matter for us.

Refer to Note 11 – Exploration and EvaluationAssets to the financial report for the amounts inthe consolidated statement of financial positionas at 30 June 2019 and related disclosure.

At 30 June 2019, the Group determinedimpairment indicators were present andperformed an impairment assessment withreference to an independent valuation andconsideration of the Group’s marketcapitalisation.

As a result of the impairment assessment, theGroup concluded no additional impairment orimpairment reversal was required.

We evaluated the Group’s assessment of the carryingvalue of exploration and evaluation assets.

In performing our procedures, we:

• Considered the Group’s right to explore in therelevant exploration area which includedobtaining and assessing supportingdocumentation such as license agreements.

• Considered the Group’s intention to carry outsignificant exploration and evaluation activity inthe relevant exploration area which includedassessment of the Group’s budgeted and plannedcash-flows, enquires with senior management anddirectors as to the intentions and strategy of theGroup.

• Given the existence of impairment indicators, weassessed the Group’s methodology for measuringthe recoverable amount of the Group’s PT BumiBarito Mineral (BBM) project based on the Group’sindependent valuation.

• Performed sensitivity testing on the independentvaluation, adjusted as required to align with therequirements of AASB 136 Impairment.

• Considered the Group’s assessment of theexistence of indicators of impairment reversal at30 June 2019.

• Assessed the adequacy of the Group’s disclosureof the Exploration and Evaluation Assets in thefinancial report.

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2. Recognition and classification on interest bearing liabilities

Why significant How our audit addressed the key audit matter

Note 15 – Interest Bearing Loans to the financialreport discloses that the Group has significantloans payable to Northrock Financial LLC andWintercrest Advisors LLC (collectively the“Lenders”), being subsidiaries of PlatinumPartners. The terms of both loans have expiredand the loans are repayable on demand at 30June 2019. As such, the interest-bearing loansof $9,261,535 (2018: $13,892,302) arepresented as current liabilities at 30 June 2019.

In April 2017, a Royalty Deed was executed withthe Lenders, pursuant to which the Lendersagreed to convert the full amount of the Group’sloans into a production royalty.

With effect from 10 January 2019, the Groupexecuted an addendum to the Royalty Deed withthe Lenders. Pursuant to the addendum, theLenders agreed to release and discharge theGroup’s liability in respect of one-third of theloan amounts payable being $4,630,767 and theGroup agreed to issue of 37.5 millionimmediately exercisable options to the Lenders.

The release and discharge of one-third of theliability resulted in a gain in the Statement ofComprehensive Income for the year of$4,630,767, partially offset by the recognitionof the share-based payment expense of$1,003,561.

Due to the significance of the releasetransaction and the impact of the status of theconversion of the unreleased portion of the loanto a production royalty on the Group’s financialposition and liquidity, this was considered a keyaudit matter.

We evaluated the recognition, measurement anddisclosure of the Group’s loans payable to theLenders at 30 June 2019 and the recognition of thegain on release of one-third of the loan amount.

In performing our procedures, we:

• Read the Royalty Deed (as amended) executedbetween the parties and understood theconditions precedent to the completion of thearrangement between the parties.

• Considered the Group’s assessment of itssatisfaction, or otherwise, of the remainingconditions precedent to the Royalty Deed (asamended) at 30 June 2019 and subsequent toyear end.

• Obtained confirmation from the Lenders ofamounts owing at 30 June 2019 and thecontinuing operation of the Royalty Deed (asamended) at 30 June 2019.

• Evaluated the Group’s recognition of a gain onthe release and discharge of one-third of theGroup’s liability and the measurement andrecognition of the share-based payment expensefor the issue of 37.5 million immediatelyexercisable options for consistency withAustralian Accounting Standards.

• Assessed the adequacy of the Group’sclassification of the unreleased portion of theinterest-bearing loans as current liabilities at 30June 2019.

• Assessed the adequacy of the Group’s disclosureof the royalty arrangement in the financial report.F

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Information Other than the Financial Report and Auditor’s Report Thereon

The directors are responsible for the other information. The other information comprises theinformation included in the Company’s 2018 Annual Report other than the financial report and ourauditor’s report thereon. We obtained the Directors’ Report that is to be included in the AnnualReport, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of theAnnual Report after the date of this auditor’s report.

Our opinion on the financial report does not cover the other information and we do not and will notexpress any form of assurance conclusion thereon, with the exception of the Remuneration Reportand our related assurance opinion.

In connection with our audit of the financial report, our responsibility is to read the other informationand, in doing so, consider whether the other information is materially inconsistent with the financialreport or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of thisauditor’s report, we conclude that there is a material misstatement of this other information, we arerequired to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives atrue and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001and for such internal control as the directors determine is necessary to enable the preparation of thefinancial report that gives a true and fair view and is free from material misstatement, whether due tofraud or error.

In preparing the financial report, the directors are responsible for assessing the Group’s ability tocontinue as a going concern, disclosing, as applicable, matters relating to going concern and using thegoing concern basis of accounting unless the directors either intend to liquidate the Group or to ceaseoperations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole isfree from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with the Australian Auditing Standards will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are considered materialif, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:

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► Identify and assess the risks of material misstatement of the financial report, whether due to fraudor error, design and perform audit procedures responsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraudmay involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.

► Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Group’s internal control.

► Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the directors.

► Conclude on the appropriateness of the directors’ use of the going concern basis of accountingand, based on the audit evidence obtained, whether a material uncertainty exists related to eventsor conditions that may cast significant doubt on the Group’s ability to continue as a going concern.If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial report or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Group to cease to continueas a going concern.

► Evaluate the overall presentation, structure and content of the financial report, including thedisclosures, and whether the financial report represents the underlying transactions and events ina manner that achieves fair presentation.

► Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the financial report. We areresponsible for the direction, supervision and performance of the Group audit. We remain solelyresponsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing ofthe audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.

We also provide the directors with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.

From the matters communicated to the directors, we determine those matters that were of mostsignificance in the audit of the financial report of the current year and are therefore the key auditmatters. We describe these matters in our auditor’s report unless law or regulation precludes publicdisclosure about the matter or when, in extremely rare circumstances, we determine that a mattershould not be communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

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Report on the Audit of the Remuneration Report

Qualified Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 13 to 19 of the directors' report for theyear ended 30 June 2019.

During the financial year ended 30 June 2018, our audit procedures identified accountingirregularities and fraudulent activity in respect of Group’s contracting with its supplier of bargingservices in Indonesia. The Group’s own investigation subsequently confirmed fraudulent activity bythe Group’s Indonesian based Chief Financial Officer, resulting in the termination of the Chief FinancialOfficer. Consequently, we were unable to determine whether any adjustments to the remunerationreport for the year ended 30 June 2018 were necessary. Our audit opinion on the current yearremuneration report is also modified because of the possible effects of this matter on the prior periodamounts which are presented as comparative information.

In our opinion, except for the effects of the matter described above the Remuneration Report of CokalLimited for the year ended 30 June 2019, complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of theRemuneration Report in accordance with section 300A of the Corporations Act 2001. Ourresponsibility is to express an opinion on the Remuneration Report, based on our audit conducted inaccordance with Australian Auditing Standards.

Ernst & Young

Andrew CarrickPartnerBrisbane1 October 2019

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30 june 2019 for personal use only annual …edition of the “australasian code for reporting of...

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