FINDING VALUE IDENTIFYING POTENTIAL CONSISTENT DELIVERY ANNUAL REPORT 2019 Our business Leadership Review of the year Governance Financials Administration ABOUT THIS REPORT This annual report covers Universal Coal Plc’s (Universal Coal, Universal Universal Coal is committed to building a or the Company) results and those of sustainable mid-tier coal mining company by its subsidiaries for the financial year strengthening the Company’s portfolio of coal ended 30 June 2019 and includes exploration, development and mining assets comparative data. and realising their full growth potential thereby The report is our primary report to shareholders and providing shareholders with exposure to thermal presents a concise view of the Company, its performance and strategy with readers directed to our website – and coking coal assets. The Company www.universalcoal.com – for corporate governance remains committed to empowering and additional information. The aim of the report is previously disadvantaged members to provide meaningful and transparent information to enable investors and other stakeholders to make an of our host communities and works informed assessment of Universal Coal and its prospects, tirelessly to eliminate and minimise our impacts and the sustainable value we create. The any negative environmental impacts Company is incorporated and domiciled in the United Kingdom and all monetary values in this report are given associated with mining. in Australian dollar (A$) unless otherwise stated. KEY FEATURES Sales volume Revenue EBITDA 42% 37% 36% Universal Coal Annual Report 2019 Our business Leadership Review of the year Governance Financials Administration CONTENTS About this report IFC S5: Financials 52 Highlights of the year 2 Consolidated and Company statements of financial position 53 S1: Our business 4 Consolidated statement of profit or loss and other Group structure 4 comprehensive income 55 Location of operations 6 Consolidated statement of changes in equity 56 Our assets 7 Company statement of changes in equity 57 Consolidated and Company statement of cash flows 58 PROJECTS OF SIGNIFICANCE S2: Leadership 8 Notes to the consolidated and Company annual Chairman’s letter 9 financial statements 59 ANNUAL REPORT 2019 Chief Executive Officer’s report 10 Independent auditor’s report 129 Directors 12 S6: Administration 133 S3: Review of the year 14 Responsibility and preparation ASX additional information 134 Mineral Resources and Ore Reserves statement 15 The Directors are responsible for preparing an annual report Glossary of terms and acronyms 136 and the financial statements in accordance with applicable law Sustainability report 19 Corporate directory IBC and regulations. Company law requires the Directors to prepare Strategic report 36 financial statements for each financial year. Under that law, the Directors have elected to prepare the Group and Company financial statements in accordance with International Financial S4: Governance 44 Scan this QR code to download Reporting Standards (IFRS) as adopted by the European Union, the PDF of Universal Coal’s report and in accordance with the provisions of the Companies Act, Directors’ report 45 or alternatively visit the Company’s 2006. The Directors are also required to prepare financial Directors’ responsibilities 50 website at www.universalcoal.com statements in accordance with the rules of the Australian Waiver of Takeover Provisions by ASX 51 Securities Exchange (ASX). Universal Coal Annual Report 2019 / Page 1 Our business Leadership Review of the year Governance Financials Administration HIGHLIGHTS OF THE YEAR CONSISTENT DELIVERY against guidance, driven by organic growth and timely, value accretive acquisitions A$98.2 million Group EBITDA for 2019 Sales 2019 6.7Mt (3.8Mt attributable) Measured Strong Reserves Resources customer demand 37% 147.24Mt and long-term increase 676.45Mt offtake contracts in revenue in place Page 2 / Universal Coal Annual Report 2019 Our business Leadership Review of the year Governance Financials Administration CAGR of On trajectory 42% to achieve increase 50% 8.4Mtpa in sales tonnes in sales tonnes from 2018 over three years annualised sales in 2020 ADDING SHAREHOLDER VALUE through the acquisition, exploration, development and commercialisation of coal projects in South Africa Dividends Growth funded by paid since 2017 operational 1.2Mtpa cashflows – Ubuntu Project in 41% no shareholder development of attributable dilution NPAT in 2019 Universal Coal Annual Report 2019 / Page 3 Our business Leadership Review of the year Governance Financials Administration SECTION 1: OUR BUSINESS Group structure 100% Universal Coal and Energy Holdings South Africa (Pty) Ltd (UCEHSA) 70.5% 50% 48.9% 50% 49% 49% UCDI – UCDII – UCDIII – UCDV – UCDVI & VIII – North Block Universal Coal, a mid-tier Kangala Berenice Ubuntu Cygnus Project New Clydesdale Complex Colliery Project Project Colliery coal mining company, has a portfolio of producing, development and exploration assets located across 100% South Africa’s major Eloff Mining 1 coalfields, providing investors Company (Pty) Ltd with exposure to thermal and coking coal assets with the potential to develop into Bono Lithihi mines of regional significance, Mountain Rush Ndalamo Resources Solar Spectrum Ndalamo Resources Ndalamo Resources Investment Trading 6 (Pty) Ltd (Pty) Ltd 365 (Pty) Ltd (Pty) Ltd (Pty) Ltd Group (Pty) Ltd with sustained production and cashflow. LEGEND Projects Operations Black Economic Empowerment (BEE) partners 1 The Eloff Mining Company holds 51% of the shares via an entity, Manyeka Coal Mines (Pty) Limited and the remaining 49% is held directly by UCDIV Page 4 / Universal Coal Annual Report 2019 Our business Leadership Review of the year Governance Financials Administration Well-positioned to INCREASE PRODUCTION Universal Coal Annual Report 2019 / Page 5 Our business Leadership Review of the year Governance Financials Administration LOCATION LOCATION OF OPERATIONS Musina LOCATION 7 OF OPERATIONS Musina 7 OF OPERATIONS LEGEND Polokwane Thermal coal – mines Thermal coal – projects Coking coal – project LEGEND BOTSWANA MOZAMBIQUE 1 Kangala LOC5 EloffATION 7 Berenice/Cygnus Polokwane Thermal coal – mines Thermal coal – projects Coking coal – project Musina 7 2 NCC OF6 Arnot OPERA South TIONS BOTSWANA MOZAMBIQUE 1 Kangala 5 Eloff 7 Berenice/Cygnus 3 NBC LEGEND Polokwane 1 Thermal coal – mines Thermal coal – projects Coking coal – project 4 Ubuntu Pretoria Emalahleni 2 NCC 6 Arnot South BOTSWANA MOZAMBIQUE Mmabatho 3 1 In development 1 Kangala 5 Eloff 7 Berenice/Cygnus 3 NBC Johannesburg 4 Maputo 2 NCC 6 Arnot South 5 2 6 1 1 3 NBC Ermelo 4 Ubuntu Pretoria Emalahleni SWAZILAND 1 4 Ubuntu 3 Pretoria Emalahleni 1 Mmabatho In development Mmabatho 3 1 In development Johannesburg Maputo 4 Johannesburg 4 Maputo 5 5 2 6 2 6 1 1 Ermelo SWAZILAND Ermelo SWAZILAND N Kimberley N Richards Bay Bloemfontein Kimberley Maseru Richards Bay Bloemfontein LESOTHO N Maseru Durban LESOTHO Kimberley Durban 0 100km Richards Bay Bloemfontein 0 100km Maseru LESOTHO Durban SOUTH AFRICA 0 100km Page 6 / Universal Coal Annual Report 2019 Our business Leadership Review of the year Governance Financials Administration LOCATION OUR ASSETS Musina 7 OF OPERATIONS OPERATING MINES LEGEND KANGALA COLLIERY NEW CLYDESDALE COLLIERY NORTH BLOCK COMPLEX Polokwane 1 2 3 Thermal coal – mines Thermal coal – projects Coking coal – project Thermal coal Thermal coal Thermal coal BOTSWANA MOZAMBIQUE Located 65km east of Johannesburg, in the Witbank The operation, extended by underground workings, Located west of Belfast, Mpumalanga province, North Block 1 Kangala 5 Eloff 7 Berenice/Cygnus Coalfield, Mpumalanga province and consists of is located 35km south of Witbank and consists of Complex (NBC) consists of Glisa and Eerstelingsfontein 2 NCC 6 Arnot South Wolwenfontein and Middelbult Projects Roodekop and Diepspruit Projects mines and Paardeplaats Prospecting Right 3 NBC Reserve Resource LoM ROM Reserve Resource LoM ROM Reserve Resource LoM ROM 1 28.3Mt 98.69Mt 1 year 3.9Mtpa 54.8Mt 136.67Mt 10+ years 4Mtpa 55.4Mt 108.71Mt 15+ years 4Mtpa 4 Ubuntu Pretoria Emalahleni Mmabatho 3 1 In development Ownership Operation Employees LTIFR Ownership Operation Employees LTIFR Ownership Operation Employees LTIFR Johannesburg Maputo 4 70.5% Open pit, truck 62 0.11 49% with Open pit, truck 60 0.29 49% with Open pit, truck 96 0.20 5 2 6 1 and shovel operational and shovel and operational and shovel Ermelo SWAZILAND control underground control MINE IN DEVELOPMENT PROJECTS PROJECT UBUNTU COLLIERY ELOFF ARNOT SOUTH BERENICE/CYGNUS N 4 Thermal coal 5 Thermal coal 6 Thermal coal 7 Thermal and blending coking coal Kimberley Previously referred to as Brakfontein, Contiguous to Kangala, allowing for Located within the Witbank Coalfield, Located in the Soutpansberg Coalfield, Richards Bay located in the Delmas district, 25km east low-cost expansion and long-term 50km from New Clydesdale Colliery 90km southwest of Musina, in the Limpopo Bloemfontein of Kangala, commenced development sustainability, a Mining Right and (NCC), completed a feasibility study province, has a Mining Right application Maseru following acquisition of surface rights Environmental Authorisation granted with a Mining Right in application and Environmental Authorisation lodged LESOTHO Reserve Resource LoM Ownership Ownership Resource LoM Ownership Resource Ownership Resource Durban 9.1Mt 75.8Mt 6 years 49% 49% 528Mt 20 years 50% 206.6Mt 50% 1.35Bt 0 100km LoM: life-of-mine, ROM: run-of-mine,