PACIFIC RESOURCES LIMITED — Annual Report 2015

Oct 4, 2015

ABN 20 075 877 075

ANNUAL REPORT FOR YEAR ENDED 30 JUNE 2015

	Page
Corporate Directory	1
Chairman's Report	2
CEO's Report and Operational Review	3
Directors' Report	8
Auditor's Independence Declaration	19
Directors' Declaration	20
Financial Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income	21
Consolidated Balance Sheet	22
Consolidated Statement of Changes in Equity	23
Consolidated Statement of Cash Flows	24
Notes to the Financial Statements	25
Independent Auditor's Report to the Members	49
Shareholder Information	51

CORPORATE DIRECTORY

Directors	Anthony Chan (Chairman)Nick Bolkus (Deputy Chairman)George LamDaniel ChanRonald Marks
Executives	Andrew Fogg (Chief Executive Officer)Bruce Patrick (Chief Operating Officer)
Company Secretary	Leni Stanley
Registered office	Level 16, 344 Queen StreetBrisbane QLD 4000(07) 3229 6606
Share register	Link Market Services LimitedLevel 19, 324 Queen StreetBrisbane QLD 4000(02) 8280 7454
Auditor	BDO Audit Pty LtdLevel 10, 12 Creek StreetBrisbane QLD 4000(07) 3237 5999
Bankers	Westpac Banking Corporation388 Queen Eagle StreetBrisbane QLD 4000
Stock exchange listing	COALBANK Limited shares are listed on the AustralianSecurities Exchange – using the stock code 'CBQ'.
Website address	www.coalbank.com

COMPETENT PERSON'S STATEMENT

The information in this Annual Report that relates to the Resources Statement for COALBANK'S Blackall Coal Project has been based on information compiled by Mr. Rowan Johnson who is a member of the Australasian Institute of Mining and Metallurgy and is a senior geologist employed by McElroy Bryan Geological Services Pty Ltd (MBGS).

Mr. Johnson has more than 30 years' experience as a geologist in the resources industry and more than 15 years in the estimation of coal resources for coal projects and coal mines in Australia and overseas. This expertise has been acquired principally through exploration and evaluation assignments at operating coal mines and for exploration areas in Australia's major coal basins and in other coal basins overseas. This experience is more than adequate to qualify him as a Competent Person for the purpose of Resource Reporting as defined in the 2012 edition of the JORC Code. Mr. Johnson consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

CHAIRMAN'S REPORT

On behalf of the COALBANK Board I am pleased to introduce the Company's 2015 Annual Report.

During the first half of the year in review, the Board and Executive team focused on potential opportunities for the Company against a background of a significant downturn in thermal coal prices driven by oversupply in the market.

A binding agreement for the purchase of the moth-balled Ebenezer Mine was made in November 2014. With the deterioration in thermal coal outlook in the short term the agreement was terminated in June 2015 when finance could not be secured in time.

In May the Company Acquired Surat Gas Pty Ltd, the holder of three Authorities to Prospect for petroleum and gas in Queensland. The Company will look to advance thee tenements through joint venture or farm-out.

We seek further opportunities both within the coal industry and in the resources area generally to grow the Company.

The board made necessary decisions to reduce the number of coal exploration tenements the Company holds. It took the view that a number of its tenements were in areas where development of rail infrastructure was unlikely until the long term and hence holding and exploration costs could not be justified. The Blackall Coal Project remains a medium term development option.

The board is monitoring the gradual progress of approvals for planned mine and infrastructure developments in the Galilee Basin. These developments will provide opportunity for the Company to progress its 1.3 Bt thermal coal Inferred Coal Resource at the Blackall Coal Project by improving rail infrastructure in the region.

On behalf of the Board, I thank existing shareholders for your continued support and welcome new shareholders to the Company.

I also take this opportunity to thank the Board of Directors for contribution to the company during the year.

Anthony Chan Chairman

CEO'S REPORT AND OPERATIONAL REVIEW

In the 2014-2015 financial year the Company took steps to significantly reduce operational expenditure through containment of permit holding and exploration costs due to the current economic and investment climate, particularly in relation to the coal industry. Coalbank's coal exploration footprint is shown in Figure 1.

Figure 1: COALBANK Coal Exploration Portfolio in Queensland.

The Company remains forward-looking with regard to acquisitions in the resources sphere.

Bid for Ebenezer Mine

In November 2014 the Company entered into a binding agreement (subject to finance) with the owners of the Ebenezer Coal Mine near Ipswich, however was unable to attract a major investor to support the bid. The agreement was terminated in June 2015.

Purchase of Surat Gas Pty Limited

In May 2015 Coalbank acquired Surat Gas Pty Ltd from Sierra Oil Limited. Surat Gas was previously owned by Coalbank Limited but was sold to Sierra Oil in 2012.

Surat Gas currently holds three granted Authorities to Prospect (ATPs) for Petroleum in Southern-Central Queensland (Figure 2). ATP1072 was granted in early 2013, and ATPs 1095 and 1098 were granted in June 2015. The purchase provides Coalbank the opportunity to seek options for the exploration of the tenements including through joint venture(s) with other companies.

Figure 2: Surat Gas Authorities to Prospect for Petroleum and Gas

Review of Mineral Resources and Reserves 2015

The company has undertaken a review of its mineral reserves and resources.

The company's sole Mineral Resource relates to its Blackall Coal Project, where a 1.3 billion tonnes Inferred Resource of thermal coal has been reported in accordance with the JORC Code (Table 1)1 .

1 COALBANK ASX Release 20 June 2012: "Maiden Resource – 1.3 Billion Tonnes".

Table 1: Summary of Coal Resources (EPC1719 and EPC1993)

This information was prepared and first disclosed under the JORC Code 2004. It has since been updated to comply with the JORC Code 2012 although the resource information has not materially changed since it was last reported.

There are no Mineral Reserves pertaining to the company's tenements.

COALBANK reviews its mineral resource statements each 6 months. It currently utilizes external persons deemed competent under the JORC Code to generate its coal reserve statements.

The Blackall Project

COALBANK'S Blackall Coal Project is located approximately 130 kilometres south west of Waratah Coal's China First Project and GVK-Hancock's Alpha Project, and 112 kilometres from Jericho on the Blackall – Jericho rail corridor.

The Blackall Coal Project contains an extensive, shallow coal resource suitable for a low cost, low stripping ratio open cut mining operation. The Inverness Deposit is situated within a broad synclinal structure trending northnorthwest throughout the 25-kilometre length of the deposit. The coal seams are relatively flat-lying and the upper seams sub-crop locally, controlled by the gentle structure.

The project contains an Inferred Coal Resource of 1.3 Billion Tonnes of thermal coal reported in compliance with the JORC Code 2004 (Refer Table 1).

No new field exploration was completed during the 2014-2015 year.

The Company's Blackall Project is relatively close to several major coal mine and infrastructure development projects planned for the Galilee Basin.

Coalbank has been monitoring the progress of approvals for planned coal mines in the nearby Galilee Basin, as improvements to rail infrastructure that would accompany these mine developments will benefit a future Blackall Project development. Options for rail and port infrastructure for Coalbank's Blackall Project include the potential to link in to new rail infrastructure to Abbot Point or alternatively to connect via the Central West line to the Blackwater rail network to Gladstone.

Coalbank's Blackall Project coal resource is prominently located in the eastern Eromanga Basin coal province.

Potential uses for coal from COALBANK's Blackall Project include export thermal coal, blending, domestic power generation, and coal-to-liquids applications.

EPC2239 (Coal Creek) Exploration

No further work was undertaken in the Coal Creek exploration area pending clarification of changes to the Regional Planning Act (Queensland) and also the assessment of the potential for an economic mine in the area. The Company has decided to withdraw the renewal application for this exploration permit.

Tenement Update

The Company has taken steps to rationalize its coal exploration portfolio taking into account holding costs, the development status of the infrastructure for Galilee Basin mining projects and the medium term prospects for the coal market. As at 30 June 2015 9 exploration permits for coal were current (Figure 1) along with 3 recently acquired petroleum and gas permits (Figure 2). Table 2 is a schedule of the Exploration Permits held.

TABLE2:COALBANKLIMITED:TENEMENTSCHEDULE
TENEMENT	PROJECTNAME	OWNERSHIP%	DATEGRANTED	EXPIRYDATE
EPC1414	MARANOARIVER	100	10/05/2010	9/05/2020
EPC1415	WARREGO	100	21/05/2010	20/05/2020
EPC1417	TAMBOEAST1	100	24/05/2010	23/05/2020
EPC1418	TAMBOEAST2	100	21/05/2010	20/05/2020
EPC1625	ALPHASOUTHWEST2	100	29/04/2010	29804/2020
EPC1632	TAMBO	100	29/10/2010	28/10/2020
EPC1719	BARCOORIVER‐BLACKALLRAIL	100	28/07/2010	27/07/2020
EPC1993	BLACKALLSOUTHCORNER	100	17/03/2010	16/03/2019
EPC2239	COALCREEK*	100	1/05/2013	30/04/2015
ATP1072	CHARLEVILLESOUTH	100	1/02/2013	31/01/2017
ATP1095	AUGATHELLAEAST	100	1/06/2014	31/05/2018
ATP1098	MORVENSOUTH	100	1/06/2014	31/05/2018
	*Renewal applica tion wi thdrawn Augus t 2015

Operations Outlook

Assessment of market conditions will determine the level of field activity in the Blackall Project, the Surat Basin and other EPCs during the year. Containment of holding costs will be a consideration.

Coalbank will look to options to take advantage of its investment in Surat Gas Pty Ltd.

The Company will review opportunities that may arise for investment in a range of resource commodity assets at or near production stage both in Australia and overseas.

SUMMARY

The Company took steps to significantly reduce operational expenditure due to the current economic and investment climate, particularly in relation to the coal industry. Containment of permit holding and exploration costs was assisted through a significant reduction in the number of coal tenements.

A bid for the mothballed Ebenezer coal mine launched in November 2014 was terminated in June 2015 when the Company was unable to attract a major investor to support the acquisition.

In the 2014-2015 year Coalbank undertook limited exploration as it sought to further rationalize its holdings under current market conditions which make short term development of new mines more difficult.

In May 2015 Coalbank acquired Surat Gas Pty Ltd from Sierra Oil Limited. Surat Gas currently holds three granted Authorities to Prospect (ATPs) for Petroleum in Southern-Central Queensland.

The Company remains forward-looking with regard to opportunities and acquisitions in the resources sphere.

Andrew Fogg Chief Executive Officer

DIRECTORS' REPORT

Your directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of COALBANK Limited ("the company") and the entities it controlled at the end of, or during, the year ended 30 June 2015. Throughout this report the consolidated entity is referred to as the group.

Directors

The following were Directors at any time during the year and continue in office at the date of this report:

• A Chan
• D Chan
• N Bolkus
• G Lam
• R Marks

Principal Activities

During the year the principal continuing activity of the Group consisted of resource exploration. The Group explores for coal.

Review of Operations

The operating loss after income tax of the Group for the year was $4,571,592 (2014: loss $609,917). The loss includes non-cash expense items (including exploration assets written off, depreciation, finance costs and impairment of assets) of $3,465,986 (2014: $541,902).

Information on the operations of COALBANK Limited and its business strategies and prospects is set out in the CEO's Report and Review of Operations on pages 3 to 7 of this annual report.

Dividend

The directors do not recommend the payment of a dividend. No dividend was paid during the year.

Significant Changes in the State of Affairs

Significant changes in the state of affairs of the group during the financial year were as follows.

Contributed equity increased by $1,921,388 (from $61,053,012 to $62,974,400) being proceeds from placement of shares. Details of the changes in contributed equity are disclosed in note 17 to the financial statements.

Matters Subsequent to the End of the Financial Year

Since 30 June 2015 Coalbank Limited has been advanced loan funds of $100,000 from Treasure Wheel Global Limited. The loan is unsecured and for an initial period of 12 month. The loan accrues interest at a rate of 7% pa with the interest being payable at the expiry of the loan.

No other matter or circumstance has arisen since 30 June 2015 that has significantly affected the group's operations, results or state of affairs, or may do so in future years.

Likely Developments and Expected Results from Operations

Comments on expected results of certain operations of the group are included in this annual report under the CEO's report and review of operations on pages 3 to 7.

Environmental Regulation

The Group is subject to significant environmental regulation in respect of its exploration activities in Australia and is committed to undertaking all its operations in an environmentally responsible manner.

To the best of the directors' knowledge, the Group has adequate systems in place to ensure compliance with the requirements of all environmental legislation and is not aware of any breach of those requirements during the financial year and up to the date of the directors' report.

Information on Directors

A Chan MH, JP. Non-executive director
Experience andexpertise	Mr Chan has extensive experience in managing both listed and unlisted entities, engaged inthe resource industry commercial and residential development and early childhood
Other currentdirectorships	education. Mr Chan is also actively involved in community services and organisations.Chairman and Director of Loyal Strategic Investment Limited and its wholly-ownedsubsidiary, Treasure Wheel Global Limited, Ruifeng Petroleum Chemical Holding Ltd andBlack Sea Horizon Investment Holdings Ltd.
Former directorships inlast 3 years	Nil
Special responsibilities	Chairman
Interests in shares and
options	Indirect interest in 531,906,361 Ordinary Shares

	The Honourable N Bolkus Llb. Independent Non-executive director
Experience and	Mr Bolkus has a long and distinguished career in the Australian Parliament as a Senator for
expertise	24 years and having served as the Minister for Consumer Affairs, Minister for Administrative
	Services, Minister for Immigration, Minister Assisting The Treasurer (FIRB) and Minister for
	Multicultural Cultural Affairs. Since leaving politics Mr Bolkus is a partner in a Corporate
	Consultancy having consulted to a number of companies both within Australia and overseas.
Other current	Nil
directorships
Former directorships in	Nil
last 3 years
Special responsibilities	Deputy Chairman
Interests in shares and
options	Nil

non-executive director	G Lam BSc, MSc, MBA, DPA, MPA, LLB (Hons), LLM, PCLL, PhD, FHKIoD, FHKIArb FCPA(Aust.) Independent
Experience andexpertise	Mr Lam has over 30 years of international experience in general management, managementconsulting, strategy consulting, corporate governance, direct investment, investment bankingandfundmanagementacrossthetelecommunications/media/technology,consumer/healthcare, infrastructure/real estates and financial services sectors.
Other currentdirectorships	Nil
Former directorships inlast 3 years	Nil
Special responsibilities	Chairman of the Audit and Risk Management Committee and Chairman of the RemunerationCommittee
Interests in shares andoptions	Nil

D Chan CFA, MRICS. Non-executive director
Experience and	Mr Chan has extensive experience in the financial and investment arena and holds a
expertise	Master's Degree in Finance from the Imperial College London and Chartered Financial
	Analyst (CFA) and is a member of the Royal Institute of Chartered Surveyors (MRICS). Mr
	Chan has over 11 years' experience in China real estate investment.
Other current	Director of Loyal Strategic Investment Limited
directorships
Former directorships in	Nil
last 3 years
Special responsibilities	Member of the Audit and Risk Management Committee and Member of the Remuneration
	Committee
Interests in shares and
options	Indirect interest in 531,906,361 Ordinary Shares

R Marks. Independent non-executive director
Experience andexpertise	Mr Marks is the founder and Managing Director of Dynamic Products Corporation with headoffice in Sydney, Australia together with affiliated companies located in New Zealand, SouthAfrica and China.He has had extensive experience over four decades with theestablishment and 'hands on' control of productions facilities in Australia, Thailand andChina.He had led the development of export sales for the company's products to 63 countriesthroughout the world and is well respected in the specific fields of international marketing. MrMarks and his company are proud winners of the coveted 'Export Award' presented by theFederal Government in recognition of outstanding Export Sales achievement.
Other currentdirectorships	Nil
Former directorships in	Nil
last 3 years
Special responsibilities	Nil
Interests in shares and	Nil
options

Company Secretary

The company secretary is Ms Leni Stanley CA, B.Com. Ms Stanley was appointed to the position of company secretary in 2002. Ms Stanley is a principal in a Chartered Accounting firm and holds the office of company secretary with other companies.

Meetings of Directors

The numbers of meetings of the company's board of directors and of each board committee held during the year ended 30 June 2015, and the numbers of meetings attended by each director were:

	Full Meetingsof Directors		Meetings ofAudit Committee
	A	B	A	B
A Chan	2	2	2	2
N Bolkus	2	2	2	2
G Lam	2	2	2	2
D Chan	2	2	2	2
R Marks	2	2	2	2

A = Number of meetings attended

B = Number of meetings held during the time the director held office or was a member of the committee during the year.

There were no meetings of the Remuneration Committee during the year.

Remuneration Report (AUDITED)

The directors are pleased to present Coalbank Limited's 2015 remuneration report which sets out remuneration information for COALBANK Limited's non-executive directors, executive directors, and other key management personnel.

The report contains the following sections:

• (a) Key management personnel disclosed in this report
• (b) Remuneration governance
• (c) Use of remuneration consultants
• (d) Executive remuneration policy and framework
• (e) Relationship between remuneration and COALBANK Limited's performance
• (f) Non-executive director remuneration policy
• (g) Voting and comments made at the company's 2014 Annual General Meeting
• (h) Details of remuneration
• (i) Service agreements
• (j) Details of share-based compensation and bonuses
• (k) Equity instruments held by key management personnel
• (l) Loans to key management personnel
• (m) Other transactions with key management personnel

(a) Key management personnel disclosed in this report

Non-executive and executive directors (see pages 9 to 10 for details about each director)
Name	Position
Present:
A Chan (from 22 November 2013)	Non-executive Chairman
N Bolkus (from 22 November 2013)	Independent non-executive director
G Lam (from 22 November 2013)	Independent non-executive director
D Chan (from 22 November 2013)	Non-executive director
R Marks (from 23 November 2013)	Independent non-executive director
Past:
R B Clarke (until 22 November 2013)	Independent non-executive Chairman
G A J Baynton (until 22 November 2013)	Executive Deputy Chairman
G L Baker (until 22 November 2013)	Independent non-executive director
S Ever (until 22 November 2013)	Non-executive director
L R Grimstone (until 22 November 2013)	Independent non-executive director
W R Stubbs (until 22 November 2013)	Independent non-executive director

Other key management personnel

Name	Position
Andrew Fogg	Chief Executive Officer (Appointed 2 December 2013)
Bruce Patrick	Chief Executive Officer until 1 December 2013 then appointed Chief
	Operating Officer.

There have been no changes in key management personnel since the end of the financial year.

(b) Remuneration governance

The board is responsible for:

• the over-arching executive remuneration framework
• operation of the incentive plans which apply to the executive team, including key performance indicators and performance hurdles
• remuneration levels of executive directors and other key management personnel, and
• non-executive directors' fees.

The objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of the Group.

(c) Use of remuneration consultants

The Group has not engaged the services of any remuneration consultants during the current or prior financial years.

(d) Executive remuneration policy and framework

The combination of base pay and superannuation make up the executives' fixed remuneration. Base pay for the executives is reviewed annually to ensure the executive's pay is competitive with the market. Executive pay is linked to the performance of the company through the issue of performance rights and share options. The board ensures that executive reward satisfies the following key criteria for good reward governance practices:

• competitiveness and reasonableness
• acceptability to shareholders
• transparency
• capital management.

Long-term incentives

Refer to section (j) of the Remuneration Report below for details regarding the Group's long-term incentives.

(e) Relationship between remuneration and COALBANK Limited's performance

During the year, the Company has generated losses from its principal activity of exploration for coal. As the Company is still in the exploration and development stage, the link between remuneration, company performance and shareholder wealth is tenuous. Share prices are subject to the influence of coal prices and market sentiment towards the sector, and as such increases or decreases may occur quite independent of Executive performance or remuneration.

During the current and previous financial years the group has generated losses from its exploration and evaluation activities. Given the nature of the group's activities and the consequential operating results, no dividends have been paid. There have been no returns of capital in the current or previous financial periods. The details of market price movements are as follows:

Share price
$0.002
$0.002
$0.010
$0.050
$0.040
$0.090

(f) Non-executive director remuneration policy

Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors' fees and payments are reviewed annually by the Board. Non-executive directors do not receive performance based pay.

Share options are issued to non-executive directors at the discretion of the board and following shareholder approval.

The current base fees were last reviewed with effect from 22 November 2013.

Non-executive directors' fees are determined within an aggregate directors' fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at $400,000 in aggregate and was approved by shareholders at the annual general meeting on 9 November 2009.

The following fees have applied:

Base fees	$
Chair	30,000
Other non-executive directors	20,000

(g) Voting and comments made at the company's 2014 Annual General Meeting

COALBANK Limited received more than 99.3% of "yes" votes on its remuneration report for the 2014 financial year. The company did not receive any feedback at the AGM or throughout the year on its remuneration practices.

(h) Details of remuneration

Amounts of remuneration

Details of the remuneration of the directors and the key management personnel (as defined in AASB 124 Related Party Disclosures) of COALBANK Limited are set out in the following tables.

Key management personnel of COALBANK Limited

2015	Short-termbenefits	Postemploymentbenefits	Sharebasedpayments
Name	Cashsalary andfees$	Superannuation$	Options$	Total$	A%	B%
Non-executive directors
A Chan, ChairmanD Chan	30,00020,000	--	--	30,00020,000	100%100%	--
Independent non-executive directors
N Bolkus	20,000	1,900	-	21,900	100%	-
G Lam	20,000	-	-	20,000	100%	-
R Marks	20,000	-	-	20,000	100%	-
Sub-total non-executive directors	110,000	1,900	-	111,900	100%	-
Other key management personnelA Fogg – Chief Executive OfficerB Patrick– Chief Operating Officer^	189,988	-	-	189,988	100%	-
	160,594	-	-	160,594	100%	-
Total key management personnelcompensation	460,594	1,900	-	462,494	100%	-

A Proportion of remuneration that is fixed remuneration

B Percentage of remuneration that is share-based payment

2014	Short-termbenefits	Postemploymentbenefits	Sharebasedpayments
Name	Cashsalary andfees$	Superannuation$	Options$	Total$	A%	B%
Non-executive directors
A Chan, Chairman (from 22/11/13)D Chan (from 22/11/13)S Ever (to 22/11/13)	18,08212,055(5,000)	--(338)	---	18,08212,055(5,338)	100%100%100%	---
Independent non-executive directors
N Bolkus (from 22/11/13)G Lam (from 22/11/13)R Marks (from 23/11/13)W R Stubbs (to 22/11/13)R Clarke, Chairman (to 22/11/13)L R Grimstone (to 22/11/13)G L Baker (to 22/11/13)	12,05512,05512,000(5,000)(7,500)(5,000)(5,338)	1,145--(338)(506)(338)-	-------	13,20012,05512,000(5,338)(8,006)(5,338)(5,338)	100%100%100%100%100%100%100%	-------
Sub-total non-executive directors	38,409	(375)	-	38,034	100%	-
Executive directorG A J Baynton (to 22/11/13)Other key management personnel	48,750	-	-	48,750	100%	-
A Fogg – Chief Executive Officer(from 2/12/13)	110,831	-	-	110,831	100%	-
B Patrick– Chief Operating Officer^	198,231	-	-	198,231	100%	-
Total key management personnelcompensation	396,221	(375)	-	395,846	100%	-

A Proportion of remuneration that is fixed remuneration

B Percentage of remuneration that is share-based payment

^ B Patrick was Chief Executive Officer from the beginning of the financial year until 2 December 2013 at which time he became Chief Operating Officer.

Amounts shown above as remuneration for year ended 30 June 2014 for non-executive directors A Chan, D Chan and Independent non-executive directors N Bolkus, G Lam and R Marks had not been paid during the financial year and were included in trade and other payables at 30 June 2014. The fees have been paid during the year to 30 June 2015.

Fees for non-executive directors R Clarke, W R Stubbs, L R Grimstone, G L Baker and S Ever had not been paid for the period 1 April 2012 through to 30 September 2013. Amounts owing had been carried forward in trade and other payables. During the 2014 financial year these amounts were settled in full by paying out 75% of the balance to the outgoing directors, resulting in the negative earnings for the year ended 30 June 2014 shown above.

(i) Service agreements

The Company has a service agreement with NABJA Consulting Services Pty Ltd for the services of Mr Andrew Fogg, Chief Executive Officer. The service agreement is for a period of 5 years and commenced on 1 December 2013. The base fees are $15,833 per month. The contract includes a change of control clause which is triggered if Treasure Wheel Global Limited ceases to hold 25% or more of Coalbank Limited. Under the change of control clause a compensation amount equal to one year remuneration is payable. In addition, under the contract the contractor or his nominee is entitled to receive five million performance rights in the Company, once the share price equals or exceeds two cents for five consecutive trading days.

The Company has a service agreement with Geomine Project Management Pty Ltd for the services of Mr Bruce Patrick, Chief Operational Officer. The service agreement is ongoing and commenced on 1 December 2013. The base fees are $13,333 per month. There are no termination benefits under the agreement. In addition, under the contract the contractor or his nominee is entitled to receive three million performance rights in the Company, once the share price equals or exceeds two cents for five consecutive trading days.

(j) Details of share based compensation and bonuses

Long-term incentives are provided to directors and key management personnel via the issue of performance rights and options.

Currently COALBANK does not have an Employee Share Option Plan, but it is intended that such a Plan be recommended to Shareholders for approval at the forthcoming Annual General Meeting. It is intended that the COALBANK Limited Employee Share Option Plan be designed to provide long-term incentives for directors and executives to deliver long-term shareholder returns. Under the plan, participants would be granted options and/or performance rights which only vest if certain performance standards are met and the employees are still employed by the group at the end of the vesting period. Participation in the plan is at the board's discretion.

Options

There were no options over ordinary shares in the company provided as remuneration during the financial year.

Shares provided on exercise of remuneration options

There were no ordinary shares in the company issued on the exercise of remuneration options during the financial year.

Performance rights

There were no performance rights over ordinary shares in the company provided as remuneration during the financial year.

Shares provided on exercise of performance rights

There were 8,250,000 ordinary shares in the company issued to key management personnel during the prior financial year from the exercise of performance rights. There were no amounts paid per share on exercise of performance rights. The value of performance rights exercised during the year was $0.009 per right.

(k) Equity instruments held by key management personnel

The tables below show the number of:

(i) options over ordinary shares in the company

(ii) performance rights granted, and

(iii) shares in the company

that were held during the financial year by key management personnel of the group, including their close family members and entities related to them.

There were no shares granted during the reporting period as compensation.

(i) Options and rights holdings

2015Name	Balance atthe start ofthe year	Granted duringthe year ascompensation	Exercisedduring theyear	Expiredduring theyear	Balance atthe end of theyear	Vested andexercisableat the end ofthe year
Directors of COALBANK Limited
A Chan	-	-	-	-	-	-
N Bolkus	-	-	-	-	-	-
G Lam	-	-	-	-	-	-
D Chan	-	-	-	-	-	-
R Marks	-	-	-	-	-	-
Total	-	-	-	-	-	-
Other key management personnel
A Fogg	-	-	-	-	-	-
B Patrick	-	-	-	-	-	-
Total	-	-	-	-	-	-

(ii) Shareholdings

2015Name	Balance at the start ofthe year	Received during theyear on the exerciseof performance rights	Other changesduring the year	Balance at the end ofthe year
Ordinary shares
A Chan #	531,906,361	-	-	531,906,361
N Bolkus	-	-	-	-
G Lam	-	-	-	-
D Chan ^	531,906,361	-	-	531,906,361
R Marks	-	-	-	-
A FoggB Patrick	2,009,0041,072,853	--	1,200,000-	3,209,0041,072,853

A Chan is a director and shareholder of Loyal Strategic Investment Ltd, the holding company of Treasure Wheel Global Limited, which is the registered holder of the shares.

^ D Chan is a director of Loyal Strategic Investment Ltd, the holding company of Treasure Wheel Global Limited, which is the registered holder of the shares.

(l) Loans to key management personnel

There were no loans to key management personnel during the financial period.

(m) Other transactions with key management personnel

A former director, Mr Greg Baynton, is a director and majority shareholder of Orbit Capital Pty Limited. Orbit Capital Pty Limited has provided consulting services to COALBANK Limited and its subsidiaries on normal commercial terms and conditions. The total amount charged to the income statement for the financial year was $ Nil (2014: $48,750)

This is the end of the remuneration report (audited).

Shares under Option

There are no unissued ordinary shares of COALBANK Limited under option or performance rights at the date of this report.

Shares Issued on the Exercise of Options

There were no ordinary shares of COALBANK Limited issued during or since the end of the year ended 30 June 2015 on the exercise of options.

Shares Issued on the Exercise of Performance Rights

There were 8,250,000 ordinary shares of COALBANK Limited issued during the end of the year ended 30 June 2014 on the exercise of performance rights.

Insurance of Officers

During the financial year COALBANK Limited paid a premium to insure the directors and officers of the company. The policy prohibits disclosure of details of the cover and the amount of premium paid.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the entity, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a willful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company.

Agreement to Indemnify Officers

COALBANK Limited is party to an agreement to indemnify the directors of the company.

The indemnity relates to any liability:

• (a) incurred in connection with or as a consequence of the directors acting in the capacity including, without limiting the foregoing, representing the company on any body corporate, and
• (b) for legal costs incurred in defending an action in connection with or as a consequence of the director acting in the capacity.

No liability has arisen under these indemnities as at the date of this report.

Indemnity of auditors

The company has not agreed to indemnify the auditor under any circumstances.

Proceedings on Behalf of Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001.

Non-audit services

The company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the company are important.

No fees were paid or payable for non-audit services provided by the auditor of the parent entity, its related practices and non-related audit firms.

The board of directors has considered the position and, in accordance with the advice received from the Audit and Risk Management Committee is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of nonaudit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure they do not impact the impartiality and objectivity of the auditor, and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

Auditors' independence declaration

A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 19.

Auditor

BDO Audit Pty Ltd was appointed auditor on 9 November 2009 and continues in office in accordance with section 327 of the Corporations Act 2001.

This report is made in accordance with a resolution of the directors.

A Chan Chairman Brisbane, 2 October 2015

Tel: +61 7 3237 5999 Fax: +61 7 3221 9227 www.bdo.com.au

Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia

DECLARATION OF INDEPENDENCE BY C R JENKINS TO THE DIRECTORS OF COALBANK LIMITED

As lead auditor of COALBANK Limited for the year ended 30 June 2015, I declare that, to the best of my knowledge and belief, there have been:

• 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
• 1. No contraventions of any applicable code of professional conduct in relation to the audit.

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

C R Jenkins Director

BDO Audit Pty Ltd

Brisbane, 2 October 2015

DECLARATION BY DIRECTORS

In the directors' opinion:

• (a) the attached financial statements and notes are in accordance with the Corporations Act 2001, including:
  • (i) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and
  • (ii) giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 and of its performance for the financial year ended on that date, and
• (b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable, for the reasons provided in note 3(iii).

Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The remuneration disclosures contained in the Remuneration Report comply with s300A of the Corporations Act 2001.

The directors have been given the declarations by the chief executive officer and the chief financial officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors.

A Chan Chairman

Brisbane, 2 October 2015

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2015

		Consolidated
		2015	2014
	Notes	$	$
Interest income		16,889	16,075
Profit on sale of fixed asset		3,182	-
Exploration assets written off		(3,362,485)	(84,000)
Professional services expenses		(763,364)	(804,872)
Corporate overhead expenses		(244,027)	(233,142)
Depreciation expenses		(7,015)	(7,902)
Directors' remuneration		(111,900)	(86,788)
Impairment of available-for-sale financial assets		-	(450,000)
Net finance income / (expense)		(102,872)	(299,843)
Loss before income tax	6	(4,571,592)	(1,950,472)
Income tax expense	7	-	-
Loss from continuing operations		(4,571,592)	(1,950,472)
Profit from discontinued operations	5	-	1,340,555
Net loss for the period		(4,571,592)	(609,917)
Other comprehensive income
Other comprehensive income for the year, net of tax		-	-
Total comprehensive loss for the year		(4,571,592)	(609,917)
		Cents	Cents
Loss per share for loss from continuing operations attributable
to the ordinary equity holders of the company:
Basic loss per share	27	(0.5)	(0.2)
Diluted loss per share	27	(0.5)	(0.2)
Loss per share for loss attributable to the ordinary equity holders of
the company:
Basic loss per share	27	(0.5)	(0.0)
Diluted loss per share	27	(0.5)	(0.0)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2015

20152014Notes$$ASSETSCurrent assetsCash and cash equivalents8233,183142,424Trade and other receivables920,372167,927Total current assets253,555310,351Non-current assetsPlant and equipment1012,14717,225Available-for-sale financial assets11--Exploration and evaluation assets1217,005,38719,810,991Other assets13182,29673,000Total non-current assets17,199,83019,901,216Total assets17,453,38520,211,567LIABILITIESCurrent liabilitiesTrade and other payables14152,747157,212Borrowings152,000,0002,103,513Total current liabilities2,152,7472,260,725Non-current liabilitiesOther financial liabilities161,500,0001,500,000Total non-current liabilities1,500,0001,500,000Total liabilities3,652,7473,760,725Net assets13,800,63816,450,842EQUITYIssued capital1762,974,40061,053,012Reserves183,528,0433,528,043Accumulated losses18(52,701,805)(48,130,213)Total equity13,800,63816,450,842	Consolidated

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2015

	Notes	IssuedCapital$	Share basedpaymentreserve$	AccumulatedLosses$	Total$
Balance at 1 July 2013		60,792,142	3,528,043	(47,520,296)	16,799,889
Loss for the yearOther comprehensive income		--	--	(609,917)-	(609,917)-
Total comprehensive income		-	-	(609,917)	(609,917)
Transactions with owners in their capacityas owners:
Contributions of equity, net of transaction costsShare based payments expense	1718	260,870-	--	--	260,870-
Balance at 30 June 2014		61,053,012	3,528,043	(48,130,213)	16,450,842
Loss for the yearOther comprehensive income		--	--	(4,571,592)-	(4,571,592)
Total comprehensive income		-	-	(4,571,592)	(4,571,592)
Transactions with owners in their capacityas owners:
Contributions of equity, net of transaction costsShare based payments expense	1718	1,921,388-	--	--	1,921,388-
Balance at 30 June 2015		62,974,400	3,528,043	(52,701,805)	13,800,638

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2015

		Consolidated
		2015	2014
	Notes	$	$
Cash flows from operating activities
Receipts in the course of operations (inclusive of goods and services tax)Payments to suppliers (inclusive of goods and services tax)Interest receivedInterest paid		101,705(1,236,391)16,889	90,828(1,564,438)16,075
Net cash outflows from operating activities	24	(1,117,797)	(1,457,535)
Cash flows from investing activities
Payments for exploration and evaluation assetsProceeds on sale of tenementsProceeds from sale of plant and equipmentPayment for purchase of plant and equipment		(537,577)-3,500(2,255)	(523,314)1,000,000--
Refunds for security depositsPayments for security deposits		47,500(24,000)	15,500-
Net cash outflows from investing activities		(512,832)	492,186
Cash flows from financing activities
Proceeds from share issueProceeds from financial liabilitiesRepayment of financial liabilities		1,921,388100,000(300,000)	-200,000-
Net cash inflows from financing activities		1,721,388	200,000
Net increase / (decrease) in cash and cash equivalents		90,759	(765,349)
Cash and cash equivalents at the beginning of the financial year		142,424	907,773
Cash and cash equivalents at the end of the financial year	8	233,183	142,424

The above Consolidated statement of cash flows should be read in conjunction with the accompanying notes.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2015

Note 1 Summary of significant accounting policies

This financial report covers the Consolidated Entity of Coalbank Limited (the "Company") and its controlled entities (together referred to as the "Consolidated Entity" or "Group"). Coalbank Limited is a listed public company, incorporated and domiciled in Australia. The Consolidated Entity is a for-profit entity for the purpose of preparing the financial statements.

The following is a summary of the material accounting policies adopted by the Consolidated Entity in the preparation of the financial report. The accounting policies have been consistently applied, unless otherwise stated.

(a) Basis of preparation

Operations and principal activities The principal activity of the Consolidated Entity is coal exploration.

Currency

The financial report is presented in Australian dollars, rounded to the nearest dollar, which is the functional currency of the Parent Entity.

Authorisation of financial report

The financial report was authorised for issue on 29 September 2015.

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and the Corporations Act 2001.

Compliance with IFRS

The consolidated financial statements of the Coalbank Limited Group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated.

Historical cost convention

The financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

(b) Principles of consolidation

Subsidiaries

Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the group.

Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and statement of comprehensive income, statement of changes in equity and balance sheet respectively.

(c) Income taxes

The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the assets and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

(d) Exploration and evaluation assets

Exploration and evaluation assets incurred by or on behalf of the Group is accumulated separately for each area of interest until such time as the area of interest moves into development phase, or is abandoned or sold. The realisation of the value of expenditure carried forward depends upon any commercial results that may be obtained through successful development and exploitation of the area of interest or alternatively by its sale. If an area of interest is abandoned or is considered to be of no further commercial interest the accumulated exploration costs relating to the area are written off against income in the year of abandonment.

(e) Acquisitions of assets

The purchase method of accounting is used for all acquisitions of assets. Cost is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of acquisition plus incidental costs directly attributable to the acquisition.

(f) Impairment of non-financial assets

At the end of each reporting period the Group assesses whether there is any indication that individual assets are impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses are recognised in profit or loss where the asset's carrying value exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount is determined for the cash-generating unit to which the asset belongs.

(g) Property, plant and equipment

All property, plant and equipment is stated at historical cost, including costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, less depreciation, and any impairment.

Depreciation is calculated on a straight line basis to write off the net cost or revalued amount of each item of property, plant and equipment over its expected useful life to the entity. Estimates of remaining useful lives are made on a regular basis for all assets, with annual reassessments for major items. The expected useful lives are as follows:

Plant and equipment	3 – 5 years
Motor vehicles	5 years
Field equipment	5 years

(h) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. These amounts are unsecured and usually have 30 day payment terms.

(i) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(j) Issued capital and share-based payments

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Share-based compensation benefits are provided to directors and key management personnel. Information relating to these schemes is set out in note 28.

The fair value of share-based compensation is recognised as a share-based payment expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted, which includes any market performance conditions and the impact of any non-vesting conditions but excludes the impact of any service and non-market performance vesting conditions. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are satisfied.

(k) Revenue

Interest Income

Interest income is recognized on a time proportion basis using the effective interest method.

(l) Goods and Services Tax ("GST")

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.

(m) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(n) Financial instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognized when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the group commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).

Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately.

Classification and subsequent measurement

Financial instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled between knowledgable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances valuation techniques are adopted.

Amortised cost is calculated as:

• a. the amount at which the financial asset or financial liability is measured at initial recognition;
• b. less principal repayments;
• c. plus or minus the cumulative amortization of the difference, if any, between the amount initially recognized and the maturity amount calculated using the effective interest rate method; and
• d. less any reduction for impairment.

The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost.

Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period. (All other loans and receivables are classified as non-current assets).

(ii) Financial liabilities

Financial liabilities, after initial recognition, are measured at either amortised cost using the effective interest rate method, or at fair value. Where an instrument contains an embedded derivative that component is, where appropriate, separately identified and measured at fair value. If the embedded derivative is not capable of being measured separately at acquisition or at the end of a reporting period, the entire instrument is measured at fair value.

(o) Business combinations

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

• fair values of the assets transferred
• liabilities incurred
• equity interests issued by the group
• fair value of any asset or liability resulting from a contingent consideration arrangement, and
• fair value of any pre-existing equity interest in the subsidiary

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The group recognizes any noncontrolling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the noncontrolling interest's proportionate share of the acquired entity's net identifiable assets.

Acquisition-related costs are expensed as incurred.

The excess of the

• consideration transferred
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the acquired entity

over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired, the difference is recognized directly in profit or loss as a bargain purchase.

(p) Parent entity financial information

The financial information for the parent entity, COALBANK Limited, disclosed in note 19 has been prepared on the same basis as the consolidated financial statements except in respect of tax consolidation legislation.

COALBANK Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.

The head entity, COALBANK Limited, and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, COALBANK Limited also recognizes the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate COALBANK Limited for any current tax payable assumed and are compensated by COALBANK Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to COALBANK Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognized in the wholly-owned entities' financial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognized as current amounts receivable from or payable to other entities in the group.

Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognized as a contribution to (or distribution from) wholly-owned tax consolidated entities.

(q) Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principle market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

(r) New accounting standards and interpretations not yet mandatory or early adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2015 reporting periods. The Consolidated Entity has decided against early adoption of these standards. The Consolidated Entity's assessment of the impact of these new standards and interpretations is set out below:

AASB 9 Financial Instruments

This standard and its consequential amendments are currently applicable to annual reporting periods beginning on or after 1 January 2018. This standard introduces new classification and measurement models for financial assets, using a single approach to determine whether a financial asset is measured at amortised cost or fair value. To be classified and measured at amortised cost, assets must satisfy the business model test for managing the financial assets and have certain contractual cash flow characteristics. All other financial instrument assets are to be classified and measured at fair value. This standard allows an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not heldfor-trading) in other comprehensive income, with dividends as a return on these investments being recognised in profit or loss. In addition, those equity instruments measured at fair value through other comprehensive income would no longer have to apply any impairment requirements nor would there be any 'recycling' of gains or losses through profit or loss on disposal. The accounting for financial liabilities continues to be classified and measured in accordance with AASB 139, with one exception, being that the portion of a change of fair value relating to the entity's own credit risk is to be presented in other comprehensive income unless it would create an accounting mismatch. The Consolidated Entity has not yet evaluated the impact adoption of this standard will have.

There are no other standards that are no yet effective and that are expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Note 2. Financial instruments

The Group's activities expose it to a variety of financial risks; credit risk, liquidity risk and cash flow interest rate risk.

The Group holds the following financial instruments:

	Consolidated
	2015	2014
	$	$
Financial assets
Cash and cash equivalents	233,183	142,424
Trade and other receivables	20,372	167,927
Security deposits	182,296	73,000
	435,851	383,351
Financial liabilities
Trade and other payables	152,747	157,212
Other financial liabilities (including borrowings and derivatives)	3,500,000	3,603,513
	3,652,747	3,760,725

The Board has overall responsibility for the determination of the Group's risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility.

There have been no substantive changes to the Group's exposure to financial instruments, its objectives, policies and processes for managing risks from previous periods.

Credit risk

Credit risk is managed on a Group basis. Credit risk arises primarily from cash and cash equivalents and deposits with banks and financial institutions. For bank and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.

The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available).

	Consolidated
	2015	2014
	$	$
Cash at bank and short-term bank deposits
AAA	233,080	140,331
A	103	2,093
	233,183	142,424

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations when due.

The Group manages liquidity risk by continuously monitoring forecast and actual cash flows. No finance facilities were available to the Group at the end of the reporting period.

Maturities of financial liabilities

The table below analyses the Group's financial liabilities into relevant maturity groupings.

Contractual maturities offinancial liabilities	Less then6 months	6 – 12months	Between1 and 2years	Between2 and 5years	Over 5years	Totalcontractualcash flows	Carryingamount
At 30 June 2015	$	$	$	$	$	$	$
Trade and other payables	152,747	-	-	-	-	152,747	152,747
Borrowings	2,000,000	-	-	-	-	2,000,000	3,500,000
	2,152,747	-	-	-	-	2,152,747	3,652,747
At 30 June 2014
Trade and other payables	157,212	-	-	-	-	157,212	157,212
Borrowings	2,200,000	-	-	-	-	2,200,000	3,603,513
	2,357,212	-	-	-	-	2,357,212	3,706,725

Other financial liabilities of $1,500,000 (2014: $1,500,000) relate to a royalty agreement as outlined in Note 16. At this stage there is no known cash outflow arising from this liability.

Note 2. Financial risk management (continued)

Cash flow and fair value interest rate risk

As the Group has interest-bearing cash assets, the company's income and operating cash flows are exposed to changes in market interest rates. The company manages its exposure to changes in interest rates by using fixed term deposits.

At 30 June 2015 if interest rates had changed by -/+ 100 basis points from the year-end rates with all other variables held constant, post-tax profit for the year would have been $2,382 lower/higher (2014 – change of 100 bps: $1,424 higher/lower), as a result of higher/lower interest income from cash and cash equivalents.

Fair Value

The carrying value of all other assets and liabilities approximate their fair value.

Note 3. Critical accounting estimates and judgements

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Consolidated Entity's accounting policies.

The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period or in the period and future periods if the revision affects both current and future periods. There were no key adjustments during the year which required estimates and/or judgements.

Key judgements and estimates

(i) Carrying value of exploration and evaluation assets

The Group has capitalised exploration expenditure of $17,005,387 (2014: $19,810,991). This amount includes costs directly associated with exploration. These costs are capitalised as an intangible asset until assessment and/or drilling of the permit is complete and the results have been evaluated. These costs include employee remuneration, materials, rig costs, delay rentals and payments to contractors. The expenditure is carried forward until such a time as the area of interest moves into the development phase, is abandoned, sold or sub-blocks relinquished.

Given exploration activities have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of recoverable resources and the difficulty in forecasting cash flows to assess the fair value of exploration expenditure there is uncertainty as to the carrying value of exploration expenditure. The ultimate recovery of the carrying value of exploration expenditure is dependent upon the successful development and commercial exploitation or, alternatively, sale of the interests in the tenements. There are no factors or circumstances which suggest that the carrying amount of remaining exploration and evaluation assets may exceed recoverable amount.

(ii) Fair value of the financial liabilities

The Group has agreements with Oliver Lennox-King (Lennox-King), whereby Lennox-King has paid a net $1.5 million to the Group and in return the Group has agreed to pay Lennox-King a royalty equal to 1% of the gross value of coal sold from the tenements currently held by the Group, in the areas of the Moreton Energy Coal Project in the Clarence-Moreton Basin and the Tambo Coal & Gas Project in the Upper Surat Basin. The liability was initially recognised at fair value. Post initial recognition, the financial liability is accounted for in accordance with the Group policy for financial instruments set out in Note 1(n).

The royalty is only payable in the event of future production of coal.

The Group's exploration and evaluation activities have not progressed to a stage to allow more reliable measurement of any future royalty payment obligations. As such, the Board is of the view that the fair value at the time of the receipt of the funds remains the appropriate measure of fair value at reporting date.

(iii) Going concern

The financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realization of assets and settlement of liabilities in the normal course of business.

As disclosed in the financial statements, the Group recorded a loss of $4,571,592 (2014 loss: $609,917) and had net cash outflows from operating activities of $1,117,797 (2014: $1,457,535) for the year ended 30 June 2015. Also, the Statement of Financial Position shows a working capital shortfall of $1,899,192 (2014: $1,950,374). This is due to the convertible note now being a current liability and due for settlement within 12 months.

The Group also has expenditure commitments within the next 12 months of $11,690,000 (2014: $3,011,000) as detailed in Note 25.

Note 3. Critical accounting estimates and judgements (continued)

The Directors acknowledge that, as in the prior year, to continue the exploration and development of the Group's exploration projects, the budgeted cash flows from operating and investing activities for the future will necessitate further capital raising.

On 13 November 2014 the group's convertible note that had been issued for $2,000,000 matured. The noteholder, Treasure Wheel Global Limited, has elected to convert the note into 133,333,333 ordinary shares in the parent entity, subject to shareholder approval. Treasure Wheel Global Limited has agreed to forego any interest which would have accrued from 13 November 2014 until conversion is approved by shareholders.

Since 30 June 2015 Coalbank Limited has received a loan of $100,000 from Treasure Wheel Global Limited. In addition, Treasure Wheel Global Limited has provided a letter of support undertaking to provide financial support, to enable Coalbank Limited to continue operations, for at least twelve months from the date of this report.

In the event that the Group is unable to raise future funding requirements, rely on the financial support of Treasure Wheel Global Limited and/or should shareholders not approve the issue of shares necessary to convert the $2,000,000 convertible note, there exists a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern with the result that the Group may be required to realise their assets at amounts different to those currently recognised, settle liabilities other than in the ordinary course of business and make provisions for costs which may arise as a result of cessation or curtailment of normal business operations.

iv) Acquisition of Surat Gas Pty Ltd

On 21 April 2015 Coalbank acquired 100% of the issued capital of Surat Gas Pty Ltd, a company that holds three petroleum exploration permits in Queensland. Surat Gas Pty Ltd was previously owned by the Group until its sale in December 2012. Refer Note 30.

The total purchase consideration paid for the acquisition was $1. Surat Gas is purely a holder of assets and does not carry on any activities that meet the definition of a "business". Accordingly, the purchase has been treated as an asset acquisition and not the acquisition of a business.

Note 4 Segment information

For the year ended 30 June 2015 the Group operated in one segment being the exploration for coal in Australia. Prior to the end of the financial year the Group also acquired some petroleum tenements, but no activities have been undertaken on those prior to the year end. The disclosure below relates to the prior year. Just prior to the end of the financial year the Group acquired some petroleum tenements via the acquisition of Surat Gas Pty Ltd. To date no expenditure has been incurred in relation to these permits.

Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors in assessing performance and determining the allocation of resources. The Board of Directors carries out the role and is therefore the Chief Operating Decision Maker.

The Group is managed primarily on the basis of product category having different risk profiles and performance assessment criteria. Operating segments are therefore determined on this basis.

Description of segments

The consolidated entity has identified its reportable operating segments based on its internal reports that are reviewed and used by the Board of Directors in assessing performance and in determining the location of resources. It is reporting on an operating basis into the following segments. There are no inter-segment transactions.

Coal - Exploration for coal.

Petroleum - Exploration for oil and gas.

The consolidated entity operates solely within Australia.

Note 5 Discontinued operation

(A) DISPOSAL OF HARVEST METALS PTY LTD AND EPC's – Prior Year Only

(i) Description

On 20 November 2013, the group disposed of its wholly owned subsidiary, Harvest Metals Pty Ltd, along with its Biloela South, Coalbank South and Chinchilla East EPC's to Treasure Wheel Global Limited for $2,000,000.

Financial information relating to the discontinued operation for the period to the date of disposal is set out below.

(ii) Financial performance and cash flow information

The financial performance and cash flow information presented are for the period ended 20 November 2013.

Period ended20 November	Year ended
2013$	2013$
-	-(8,959)
-	(8,959)
-	-
	(8,959)
1,340,555	-
	--
1,340,555	(8,959)
	---1,340,555

	Period ended20 November2013$	Year ended2013$
Net cash inflow (outflow) from ordinary activities	-	-
Net cash inflow (outflow) from investing activities	18,501	(54,448)
Net cash inflow (outflow) from financing activities	-	-
Net increase in cash generated by the division	18,501	(54,448)

(iii) Carrying amounts of assets and liabilities

The carrying amounts of assets and liabilities as at 20 November 2013 were:

	20 November2013
	$
Exploration assets	634,445
Security deposits	25,000
Total assets	659,445
Other financial liabilities	-
Total liabilities	-
Net assets	659,445

Note 5 Discontinued operation (continued)

(iv) Details of the sale of the division

	2015$	2014$
Consideration received or receivable:Cash	-	2,000,000
Total disposal consideration	-	2,000,000
Carrying amount of net assets soldProfit on sale before income tax	--	659,4451,340,555
Income tax expenseProfit on sale after income tax	--	-1,340,555

	Consolidated2015	2014
Note 6Expenses	$	$
Loss before income tax includes the following specific expenses:
Defined contribution superannuation expense	1,900	(375)
DepreciationPlant and equipment	7,015	7,902
Exploration assets written off	3,362,485	84,000
Finance costsUnwinding of issue costs financial liabilities not at fair value throughprofit or loss	96,486	296,944
Interest paidFair value (gains) losses on financial liabilities at fair value through profit or loss	6,386-	3,605(706)
Finance costs expensed	102,872	299,843

20152014$$Note 7Income tax expense(a) Income tax expense	--
Current tax expense-Deferred tax expense-
Aggregate income tax expense-	-
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from operations before income tax expense(4,571,592)(609,917)
Tax at the Australian tax rate of 30% (2014: 30%)(1,371,478)(182,975)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:Other(3,518)	271
(1,374,996)(182,704)Deferred tax assets not recognised1,374,996182,704
Income tax expense-	-
(c) Deferred Tax Liabilities
The balance comprises temporary differences attributable to:Exploration expenditure5,101,6165,943,297
Convertible notes-28,946Property, plant and equipment2,0862,310Other-	318
Total deferred tax liabilities5,103,7025,974,871Set-off of deferred tax assets pursuant to set-off provisions(5,103,702)(5,974,871)
Net deferred tax liabilities-	-
(d) Deferred Tax Assets
The balance comprises temporary differences attributable to:
Tax losses19,692,41719,163,759
Accruals18,0008,926Borrowing costs-11,096
Business capital costs138,259164,587
Available for sale financial assets135,000	-
Provisions-3,518Other financial liabilities450,000450,000
Total deferred tax assets20,433,67619,801,886Set-off of deferred tax assets pursuant to set-off provisions(5,103,702)(5,974,871)Net adjustment to deferred tax assets not recognized(15,329,974)(13,827,015)
Net deferred tax assets-	-
(e) Unrecognised net deferred tax assets
Unused tax losses for which no deferred tax asset has been recognized51,099,91346,090,050
Potential tax effect at 30%15,329,97413,827,015

Note 7 Income tax expense (continued)

Following the proportional takeover by Treasure Wheel Global Limited, the Group failed the Continuity of Ownership Test (COT). Unused tax losses are therefore carried forward under the Same Business Test (SBT). Management and the Directors are satisfied that the Group passes SBT on the basis that coal exploration has always been, and continues to be, the core focus of the business.

Unused losses which have not been recognized as an asset, will only be obtained if:

• (i) the group derives future assessable income of a nature and of an amount sufficient to enable the losses to be realized;
• (ii) the group continues to comply with the conditions for deductibility imposed by the law; and
• (iii) no changes in tax legislation adversely affect the group in realizing the losses.

(f) Tax consolidation legislation

Coalbank Limited and its wholly-owned Australian subsidiaries have implemented the income tax consolidation legislation from 1 August 2010. Coalbank Limited is the head entity of the tax consolidated group for the year ended 30 June 2015. The Australian Taxation Office has been notified of the formation of the Coalbank Limited tax consolidated group.

	Consolidated
	2015$	2014$
Note 8Current assets – Cash and cash equivalents
Cash at bank and on hand	78,641	8,736
Deposits at call	154,542	133,688
	233,183	142,424

(a) Risk exposure

The Group's exposure to interest rate risk is discussed in Note 2. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of cash and cash equivalents mentioned above.

(b) Deposits at call

All deposits are at call bearing an interest rate of between 0% and 2.4% (2014 – 0% to 2.4%).

Note 9 Current assets – Trade and other receivables

Prepayments	8,256	12,145
Other debtors	12,116	155,782
	20,372	167,927

Note 10 Non-current assets – Plant and equipment

Consolidated	Motorvehicles$	Plant &equipment$	Field plant &equipment$	Total$
Year ended 30 June 2014Opening net book amount	-	756	29,337	30,093
AdditionsDisposals	--	--	-(4,966)	-(4,966)
Depreciation charge	-	(458)	(7,444)	(7,902)
Closing net book amount	-	298	16,927	17,225
At 30 June 2014
At Cost	27,259	36,462	33,186	96,907
Accumulated depreciation	(27,259)	(36,164)	(16,259)	(79,682)
Net book amount	-	298	16,927	17,225
Year ended 30 June 2015
Opening net book amount	-	298	16,927	17,225
Additions	-	1,937	-	1,937
DisposalsDepreciation charge	--	-(298)	-(6,717)	-(7,015)
Closing net book amount	-	1,937	10,210	12,147
At 30 June 2015
At Cost	-	30,008	33,186	63,194
Accumulated depreciation	-	(28,071)	(22,976)	(51,047)
Net book amount	-	1,937	10,210	12,147

		Consolidated
		2015	2014
		$	$
Note 11	Non-current assets – Available-for-sale financial assets

Unlisted equity securities – at cost	-	-
Unlisted securities are traded in inactive markets.
Balance at the beginning of the yearAdditions during the yearImpairment charge for the year	--	450,000-(450,000)
Balance at the end of the year	-	-

Note 12 Non-current assets – Exploration and evaluation assets

Exploration phase costs – at cost	17,005,387	19,810,991
The capitalised exploration assets carried forward above has been determined as follows:
Balance at the beginning of the yearExpenditure incurred during the year - additionsExpenditure incurred during the year – Surat Gas (refer note 30)Disposal of subsidiaryExploration abandoned	19,810,991550,8186,063-(3,362,485)	20,005,214524,222-(634,445)(84,000)
Balance at the end of the year	17,005,387	19,810,991

The ultimate recoupment of costs carried forward for exploration assets is dependent upon the successful development and commercial exploitation or alternatively sale of the interests in the tenements.

		Consolidated
		2015$	2014$
Note 13	Non-current assets – Other assets
Security deposit		182,296	73,000
	Security deposits represent amounts lodged with the Department of Employment, EconomicDevelopment and Innovation as security for tenements.
Note 14	Current liabilities – Trade and other payables
UnsecuredTrade payables		152,747	157,212
		152,747	157,212
Note 15	Current liabilities – Borrowings
BorrowingsConvertible note		-2,000,000	200,0001,903,513
		2,000,000	2,103,513

During the previous financial year the 380 convertible notes on issue for $1,900,000 were replaced with 1 convertible note with a face value of $2,000,000. The note is convertible into 133,333,333 ordinary shares of the parent entity, at any time at the option of the holder, or repayable on 13 November 2014. On 13 November 2014 the group's convertible note that had been issued for $2,000,000 matured. The noteholder, Treasure Wheel Global Limited, has elected to convert the note into 133,333,333 ordinary shares in the parent entity, subject to shareholder approval. No interest is payable on the loan as the holder of the loan, Treasure Wheel Global Limited has agreed to forego the interest which was payable under the agreement from 13 November 2014.

	Consolidated
	2015$	2014$
Borrowings
Face value of notes issued	2,000,000	2,000,000
Other equity securities – value of conversion rights (note 17(g))	(260,870)	(260,870)
	1,739,130	1,739,130
Interest expense	260,870	164,383
Current liability	2,000,000	1,903,513

The initial fair value of the liability portion of the note was determined using a market interest rate for an equivalent nonconvertible note at the issue date. The liability is subsequently recognized on an amortised cost basis until extinguished on conversion or maturity of the notes. The remainder of the proceeds is allocated to the conversion option and recognized in shareholders' equity, net of income tax, and not subsequently re-measured.

During the current financial year Treasure Wheel Global Limited also advanced the company $100,000 by way of an unsecured loan. The loan is for an initial term of 12 months and accrues interest at a rate of 7% p.a. This loan has been repaid during the current financial year.

During the previous financial year Treasure Wheel Global Limited also advanced the company $200,000 by way of an unsecured loan. The loan is for an initial term of 12 months and accrues interest at a rate of 7% p.a. This loan has been repaid during the current financial year.

		Consolidated
Note 16	Non-current liabilities – Other financial liabilities	2015$	2014$
Other financial liabilities		1,500,000	1,500,000

The Group has agreements with Oliver Lennox-King (Lennox-King), whereby Lennox-King has paid a net $1.5 million to the Group and in return the Group has agreed to pay Lennox-King a royalty equal to 1% of the gross value of coal sold from the tenements currently held by the Group, in the areas of the Moreton Energy Coal Project in the Clarence-Moreton Basin and the Tambo Coal & Gas Project in the Upper Surat Basin. The liability was initially recognised at fair value. Post initial recognition, the financial liability is accounted for in accordance with the Group policy for financial instruments set out in Note 1(n).

The royalty is only payable in the event of future production of coal.

The Group's exploration and evaluation activities have not progressed to a stage to allow more reliable measurement of any future royalty payment obligations. As such, the Board is of the view that the fair value at the time of the receipt of the funds remains the appropriate measure of fair value at reporting date.

Note 17 Issued capital

			Consolidated		Consolidated
		2015Shares	2014Shares	2015$	2014$
(a)	Share capital
	(i)Ordinary sharesFully paid(ii)Other equity securities	982,051,715	853,958,015	62,713,530	60,792,142
	Value of conversion rights– convertible notes	-	-	260,870	260,870
		982,051,715	853,958,015	62,974,400	61,053,012

(b) Movements in ordinary share capital:

Date	Details	Note	Number ofShares	IssuePrice	$
1 July 2013	Balance		845,708,015		60,792,142
	Placement of shares	(f)	8,250,000		-
30 June 2014	Balance		853,958,015		60,792,142
	Placement of shares	(e)	128,093,700		1,921,388
30 June 2015			982,051,715		62,713,530

(c) Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.

Ordinary shares have no par value and the company does not have a limited amount of authorised capital.

(d) Options

At balance date there were no options over ordinary shares of COALBANK Limited on issue.

(e) Placements

The following placements were made to sophisticated investors:

1. On 1 September 2014 128,093,400 ordinary shares were issued at $0.015 each to raise $1,921,388.

(f) Performance rights

8,250,000 performance rights over ordinary shares of COALBANK Limited were exercised during the prior year.

(g) Other equity securities

The amount shown for other equity securities is the value of the conversion rights relating to the convertible notes, details of which are shown in note 15.

(h) Capital risk management

The Group's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the Group includes equity attributable to equity holders, comprising of issued capital, reserves and accumulated losses. In order to maintain or adjust the capital structure, the company may issue new shares, sell assets to reduce debt or adjust the level of activities undertaken by the company.

The Group monitors capital on the basis of cash flow requirements for operational, and exploration and evaluation expenditure. The Group will continue to use capital market issues and joint venture participant funding contributions to satisfy anticipated funding requirements.

The Group has no externally imposed capital requirements. The Group's strategy for capital risk management is unchanged from prior years.

	Consolidated
Note 18Reserves and accumulated losses	2015$	2014$
(a) Reserves
Share-based payments reserve	3,528,043	3,528,043
Movements:Balance 1 JulyShare based payments	3,528,043-	3,528,043-
Balance 30 June	3,528,043	3,528,043
(b) Accumulated losses
Balance 1 JulyLoss for the year	(48,130,213)(4,571,592)	(47,520,296)(609,917)
Balance 30 June	(52,701,805)	(48,130,213)

Nature and purpose of reserves

Share based payments reserve

The share-based payments reserve is used to recognise:

(a) the grant date fair value of options issued to directors / contractors and vendors of assets

(b) the grant date fair value of performance rights issued to directors / contractors

Note 19 Parent entity information

The following information relates to the parent entity, COALBANK Limited. The information presented has been prepared using accounting policies that are consistent with those presented in Note 1 where applicable.

	2015$	2014$
Current assets	253,452	309,650
Non-current assets	7,639,302	7,669,370
Total assets	7,892,754	7,979,020
Current liabilities	2,140,372	2,254,277
Non-current liabilities	1,500,000	2,151,020
Total liabilities	3,640,372	4,405,297
Issued capital	62,974,400	61,052,995
Accumulated losses	(62,250,061)	(61,007,315)
Share based payment reserve	3,528,043	3,528,043
Total equity	4,252,382	3,573,723
Profit or loss for the year	(1,242,748)	(11,024,496)
Total comprehensive income	(1,242,748)	(11,024,496)

Contingent liabilities

COALBANK Limited does not have any contingent liabilities at 30 June 2015.

Capital commitments

COALBANK Limited has the following exploration commitments, which are included in the Group's exploration commitments as detailed in note 25:

	Consolidated
	2015	2014
	$	$
Exploration commitments
Commitments for payments under exploration permits for coal in
existence at the reporting date but not recognised as liabilities
payable is as follows:	-	2,901,111
Commitments for payments under exploration permits for petroleum
in existence at the reporting date but not recognised as liabilities	-	-
payable is as follows:

Guarantees

COALBANK Limited has not guaranteed any debts of its subsidiaries.

Note 20 Key management personnel disclosures

Key management personnel compensation

		Consolidated
	2015$	2014$
Short-term employee benefits	460,594	396,221
Post-employment benefitsShare-based payments	--	(375)-
	460,594	395,846

Note 21 Remuneration of auditors

	Consolidated
	2015$	2014$
During the year the following fees were paid or payable for services provided by the auditoror, its related practices and non-related audit firms:
BDO Audit Pty LtdAudit services
Audit and review of financial reports	43,140	30,140
Total remuneration for audit and other assurance services	43,140	30,140
Other servicesAccounting advice	-	-
Total remuneration for other services	-	-
Total auditor remuneration	43,140	30,140

Note 22 Related parties

(a) Parent entities

The parent entity and ultimate Australian parent entity within the group is COALBANK Limited. The ultimate parent entity is Treasure Wheel Global Limited which at 30 June 2015 owned 54.16% (2014: 62.29%).

(b) Subsidiaries

Interests in subsidiaries are set out in note 26.

(c) Key management personnel

Disclosures relating to key management personnel are set out in note 20.

(d) Amounts payable to related parties

During the current financial year Treasure Wheel Global Limited advanced the company $100,000 by way of an unsecured loan. The loan is for an initial term of 12 months and accrues interest at a rate of 7% p.a. This loan has been repaid during the current financial year.

During the previous financial year Treasure Wheel Global Limited also advanced the company $200,000 by way of an unsecured loan. The loan is for an initial term of 12 months and accrues interest at a rate of 7% p.a. This loan has been repaid during the current financial year.

Included in trade payables is an amount of $nil (2014: $67,392) which represents amounts payable to directors for unpaid directors' fees.

On 20 November 2013, the group disposed of its wholly owned subsidiary, Harvest Metals Pty Ltd, along with its Biloela South, Coalbank South and Chinchilla East EPC's to Treasure Wheel Global Limited for $2,000,000. Refer to Note 5 for details.

During the previous financial year the 380 convertible notes on issue for $1,900,000 were replaced with 1 convertible note with a face value of $2,000,000. The note is convertible into 133,333,333 ordinary shares of the parent entity, at any time at the option of the holder, or repayable on 13 November 2014. On 13 November 2014 the group's convertible note that had been issued for $2,000,000 matured. The noteholder, Treasure Wheel Global Limited, has elected to convert the note into 133,333,333 ordinary shares in the parent entity, subject to shareholder approval. No interest is payable on the loan as the holder of the loan, Treasure Wheel Global Limited has agreed to forego the interest which was payable under the agreement from 13 November 2014.

Note 23 Events occurring after reporting date

Since 30 June 2015 Coalbank Limited has been advanced loan funds of $100,000 from Treasure Wheel Global Limited. The loan is unsecured and for an initial period of 12 months. The loan accrues interest at a rate of 7% pa with the interest being payable at the expiry of the loan.

At the date of this report there are no other matters or circumstances which have arisen since 30 June 2015 that have significantly affected, or may significantly affect:

• (a) the Group's operations in future financial years, or
• (b) the results of those operations in future financial years, or
• (c) the Group's state of affairs in future financial years.

Note 24 Reconciliation of loss after income tax to net cash outflow from operating activities

	Consolidated
	2015$	2014$
Loss after income tax	(4,571,592)	(609,917)
Exploration written off	3,362,485	-
Impairment of exploration and evaluation assets	-	84,000
Impairment of available-for-sale financial assets	-	450,000
Depreciation	7,015	7,902
Profit on sale of fixed assets	(3,182)	(1,534)
(Profit) Loss on sale of subsidiary	-	(1,340,555)
Finance costs:
Unwinding of issue costs financial liabilities not at fair value through profit or loss	96,487	296,944
Fair value (gains) losses on financial liabilities at fair value through profit or loss	-	(706)
Change in operating assets and liabilities:
(Increase)/decrease in trade and other receivables	19,258	(32,471)
Increase/(decrease) in trade and other payables	(28,268)	(311,198)
Net cash outflow from operating activities	(1,117,797)	(1,457,535)

Note 25 Commitments for expenditure

	Consolidated
	2015$	2014$
Exploration commitments
Commitments for payments under exploration permits for coal and petroleum in existence
at the reporting date but not recognised as liabilities payable is as follows:
-payable within one year	11,690,000	3,011,000
-payable between one year and five years	27,664,000	1,321,000
	39,354,000	4,332,000

So as to maintain current rights to tenure of various exploration tenements, the Group will be required to outlay amounts in respect of tenement exploration expenditure commitments. These outlays, which arise in relation to granted tenements are noted above. The outlays may be varied from time to time, subject to approval of the relevant government departments, and may be relieved if a tenement is relinquished.

Exploration commitments are calculated on the assumption that each of these tenements will be held for its full term. But, in fact, commitments will decrease materially as exploration advances and ground that is shown to be unprospective is progressively surrendered. Expenditure commitments on prospective ground will be met out of existing funds, joint ventures, farm-outs, and new capital raisings.

Note 26 Subsidiaries

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1(b):

Name of entity	PrincipalActivities	Country ofincorporation	Class of shares		Equity holding
				2015	2014
				%	%
Lodestone Coal Pty Limited	Coal exploration	Australia	Ordinary	100	100
Lodestone CSG Pty Limited	Gas exploration	Australia	Ordinary	-	100
Lodestone Minerals Pty Limited	Mineralexploration	Australia	Ordinary	-	100
Tambo Coal & Gas Pty Limited	Coal exploration	Australia	Ordinary	100	100
Moreton Energy Pty Ltd	Coal exploration	Australia	Ordinary	100	100
Coalbank Qld Pty ltd	Coal exploration	Australia	Ordinary	100	100
Surat Mining Pty Ltd	Coal exploration	Australia	Ordinary	-	100
Surat Gas Pty Ltd	Petroleumexploration	Australia	Ordinary	100	-

During the year Surat Mining Pty Limited, Lodestone CSG Pty Limited and Lodestone Minerals Pty Limited were all deregistered. Since the end of the financial year, Lodestone Coal Pty Limited has also been deregistered. During the year the Group acquired Surat Gas Pty Ltd. Refer to note 30.

Note 27 Earnings per share

	2015Cents	2014Cents
(a)Basic earnings per share
From continuing operations attributable to ordinary equity holders of the company	(0.5)	(0.2)
From discontinued operation	-	0.2
Total basic earnings per share attributable to the ordinary equity holders of the company	(0.5)	(0.0)
(b)Diluted earnings per share
From continuing operations attributable to ordinary equity holders of the company	(0.5)	(0.2)
From discontinued operation	-	0.2
Total diluted earnings per share attributable to the ordinary equity holders of the company	(0.5)	(0.0)
(c)Reconciliation of earnings used in calculating earnings per shareBasic and diluted earnings per shareLoss attributable to the ordinary equity holders of the company used in calculating basicand diluted earnings per share:From continuing operationsFrom discontinued operation	(4,571,592)-	(1,950,472)1,340,555
	(4,571,592)	(609,917)
(d)Weighted average number of shares used as the denominator
	2015Number	2014Number
Weighted average number of ordinary shares used as the denominator incalculating basic earnings per shareAdjustments for calculation of diluted earnings per share:Options	959,942,391-	851,336,097-
Weighted average number of ordinary shares and potential ordinaryshares used as the denominator in calculating diluted earnings per share	959,942,391	851,336,097

(e) Information concerning the classification of securities

Options and rights

There are no options or rights on issue at 30 June 2015. Options and rights on issue during the year are not included in the calculation of diluted earnings per share because they are antidilutive for the year ended 30 June 2014. These options and rights could potentially dilute basic earnings per share in the future. Details relating to options and rights are set out in note 28.

Note 28 Share-based payments

Options

During the financial year COALBANK Limited did not grant any options.

Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share.

The exercise price of options is based on the weighted average price at which the company's shares are traded on the Australian Securities Exchange during the five trading days immediately before the options are granted.

Set out below are summaries of options granted:

2015

Grant date	Expiry date	Exerciseprice	Balance atstart of theyearNumber	Grantedduringthe year	Exercisedduringthe year	Expiredduring theyear	Balanceat end ofthe year	Exercisableat end ofthe year
				Number	Number	Number	Number	Number
Nil
Total			-	-	-	-	-	-
	Weighted average exercise price							-

2014

Grant date	Expiry date	Exerciseprice	Balance atstart of theyearNumber	Grantedduringthe year	Exercisedduringthe year	Expiredduring theyear	Balance atend of theyear	Exercisableat end ofthe year
				Number	Number	Number	Number	Number
17/11/2011	08/08/2013	$0.0825	3,000,000	-	-	(3,000,000)	-	-
17/11/2011	08/08/2013	$0.10	4,000,000	-	-	(4,000,000)	-	-
02/06/2011	02/09/2014	$0.25	40,000,000	-	-	(40,000,000)	-	-
17/11/2011	08/08/2013	$0.0825	3,000,000	-	-	(3,000,000)	-	-
Total			47,000,000	-	-	(47,000,000)	-	-
	Weighted average exercise price		$0.23	-	-	$0.23	-	-

The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2015 was $Nil (2014 - $nil).

The weighted average remaining contractual life of share options outstanding at the end of the period was nil (2014 – nil years)

Performance Rights

During the financial year there were no performance rights granted and there were no performance rights on issue at the end of the financial year.

Performance rights granted carry no dividend or voting rights.

When exercisable, each performance right is convertible into one ordinary share.

Note 28 Share-based payments (continued)

Set out below are summaries of performance rights on issue: 2015

Grant date	Expiry date	Exerciseprice	Balance atstart of theyearNumber	Grantedduring theyearNumber	Exercisedduring theyearNumber	Expiredduring theyearNumber	Balance atend of theyearNumber	Exercisableat end of theyearNumber
Nil
Total			-	-	-	-	-	-

2014

Grant date	Expiry date	Exerciseprice	Balance atstart of theyear	Grantedduring theyear	Exercisedduring theyear	Expiredduring theyear	Balance atend of theyear	Exercisableat end of theyear
			Number	Number	Number	Number	Number	Number
26/06/2009	25/06/2019	$0.00	8,000,000	-	(8,000,000)	-	-	-
03/03/2010	03/03/2020	$0.00	250,000	-	(250,000)	-	-	-
Total			8,250,000	-	(8,250,000)	-	-	-

The weighted average share price at the date of exercise of performance rights exercised during the year ended 30 June 2015 was $nil (2014 - $0.009). The weighted average remaining contractual life of performance rights outstanding at the end of the period was nil years (2014 – Nil years).

Shares issued on the taking up of performance rights are issued for no consideration and therefore do not have a weighted average exercise price.

Fair value of performance rights granted

The assessed fair value at grant date of performance rights granted to the individuals is allocated equally over the period from grant date to estimated vesting date. Fair values at grant date are independently determined using the Monte Carlo Simulation method that takes into account the exercise price, the term of the performance right, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the performance right.

Note 29 Contingent liabilities

The Group has a contingent liability with respect to the royalty associated with the petroleum assets acquired with the purchase of Surat Gas Pty Ltd (refer Note 30). The royalty agreement provides that the holder of the royalty is entitled to receive equal to 1% of any Wellhead Value of Petroleum produced on any of the permits currently held.

The liability cannot be calculated at this time as there is no basis on which to determine the potential future liability associated with this royalty.

Note 30 Assets Acquisitions

On 21 April 2015 Coalbank acquired 100% of the issued capital of Surat Gas Pty Ltd, a company that holds three petroleum exploration permits in Queensland. Surat Gas Pty Ltd was previously owned by the Group until its sale in December 2012.

The total purchase consideration paid for the acquisition was $1 plus the assumption of creditors to the value of $85,639.

Assets and liabilities acquired:
Security deposits	128,297
Trade payables	(213,936)

The assets represent security deposits on the petroleum permits of $128,297 and included in total liabilities is an amount which was payable to Coalbank for $128,297 representing Coalbank's right to receive the security deposits if the permits were surrendered.

The acquisition represents purchase of assets, not a business acquisition.

The company also has a liability for a royalty equal to 1% of any Wellhead Value of Petroleum produced on any of the permits currently held. Refer note 29.

Level 10, 12 Creek St Brisbane QLD 4000 GPO Box 457 Brisbane QLD 4001 Australia

INDEPENDENT AUDITOR'S REPORT

To the members of COALBANK Limited

Report on the Financial Report

We have audited the accompanying financial report of COALBANK Limited, which comprises the consolidated balance sheet as at 30 June 2015, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year.

Directors' Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1(a), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor's Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company's preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of COALBANK Limited, would be in the same terms if given to the directors as at the time of this auditor's report.

Opinion

In our opinion:

• (a) the financial report of COALBANK Limited is in accordance with the Corporations Act 2001, including:
  • (i) giving a true and fair view of the consolidated entity's financial position as at 30 June 2015 and of its performance for the year ended on that date; and
  • (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
• (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1(a).

Emphasis of matter

Without modifying our opinion, we draw attention to Note 3 (iii) in the financial report, which indicates that the ability of the consolidated entity to continue as a going concern is dependent upon the conversion of the $2,000,000 convertible note into equity, the continuing financial support of Treasure Wheel Global Limited and the future successful raising of necessary funding through equity, successful exploration and subsequent exploitation of the consolidated entity's tenements, and/or sale of non-core assets. These conditions, along with other matters as set out in Note 3 (iii), indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity's ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 11 to 15 of the directors' report for the year ended 30 June 2015. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of COALBANK Limited for the year ended 30 June 2015 complies with section 300A of the Corporations Act 2001.

BDO Audit Pty Ltd

C R Jenkins Director

Brisbane, 2 October 2015

SHAREHOLDER INFORMATION

The shareholder information set out below was applicable as at 17 September 2015.

A. Distribution of equity securities

Analysis of numbers of equity security holders by size of holding:

	Class of equity security
	Ordinary Shares
1 – 1,000	54
1,001 – 5,000	28
5,001 – 10,000	138
10,001 – 100,000	317
100,001 and over	260
	797

There were 638 holders of less than a marketable parcel of ordinary shares.

B. Equity security holders

Twenty largest quoted equity security holders

The names of the twenty largest holders of quoted equity securities are listed below:

		Ordinary shares
Name	Number	Percentage (%) of
	Held	issued shares
BNP Paribas Nominees Pty Ltd	531,906,361	54.16
KAMS Brother Holdings Limited	128,093,700	13.04
Allegro Capital Nominees Pty Ltd	100,499,321	10.23
Rocket Science Pty Ltd	19,178,636	1.95
Leejames Nominees Pty Ltd	11,500,000	1.17
Trevor Robert Learey	10,585,126	1.08
Mr Nicholas Playford Forgan	9,264,917	0.94
Wealford Investments Limited	8,704,654	0.89
Ianaki Semerdziev	6,025,675	0.61
Square Resources Pty Ltd	5,937,500	0.60
Campbell Marine Pty Ltd	4,918,346	0.50
Alister John Forsyth	4,494,079	0.46
Mrs Fiona Mary Learey Bowles	4,104,073	0.42
Oliver Lennox-King	3,750,000	0.38
Tre Pty Ltd	3,600,000	0.37
Group 4 Solutions Pty Ltd	3,209,004	0.33
Murray J Kent Pty Ltd	3,000,000	0.31
John Marshall Pearce & Sandra Anne Pearce	3,000,000	0.31
Gleneagle Securities (Aust) Pty Ltd	2,713,333	0.28
Humber Hawke Pty Ltd	2,435,947	0.25
Craig Sexton & Loren Sexton	2,285,274	0.23
	869,205,946	88.51

C. Substantial shareholders

Substantial shareholders as shown in substantial shareholder notices received by the company at 17 September 2015 are:

	Numberheld	Percentage
Ordinary shares
Treasure Wheel Global Limited	531,906,361	54.16%
Kam's Brother Holdings Limited	128,093,700	13.04%
Gregory Alexander John Baynton	101,584,899	10.34%

D. Voting rights

The voting rights attaching to each class of equity securities are set out below:

(a) Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

(b) Options No voting rights.