ANNUAL%REPORT%AND%ACCOUNTS%2014% NEW%WORLD%RESOURCES%PLC% WorldReginfo - ef56c3b8-bd37-44de-aa8d-6ce2f2430569 Note: The average exchange rate for 2014 used throughout the report is 27.536 EUR/CZK, unless stated otherwise. All the forward-looking price guidance for 2015 is based on an exchange rate of EUR/CZK of 27.50. Prices are expressed as a blended average between the different qualities of coal and are ex-works. Final realised prices can be influenced by a range of factors including, but not limited to, exchange rate fluctuations, quality mix, timing of deliveries and flexible provisions in individual agreements. Thus, the actual realised price for the period may differ from the average agreed prices previously announced. NWR or the ‘Company’ refers to New World Resources Plc. The ‘Group’ or ‘NWR Group’ refers to New World Resources Plc and its subsidiaries. Directors’ report For the purpose of Disclosure and Transparency Rules 4.1 (‘DTR 4.1’) the Directors’ report comprises the Strategic Report, Corporate governance, the Audit and Risk Management Committee Report, the Remuneration Report, Shareholder and Ancillary information for the shareholders sections. The report has been prepared in accordance with the requirements of the Companies Act 2006. The Directors’ report was approved by the Board of Directors and authorised for issue on 17 March 2015 and signed on its behalf by: Ivona Ročárková, Company Secretary WorldReginfo - ef56c3b8-bd37-44de-aa8d-6ce2f2430569 CONTENTS' Overview ......................................................................................................................................... 3! Who we are .................................................................................................................................. 3! What we do .................................................................................................................................. 3! Main subsidiaries ......................................................................................................................... 3! Key performance indicators ......................................................................................................... 4! Our customers ............................................................................................................................. 5! Our strategy ................................................................................................................................. 5! Strategic Report .............................................................................................................................. 6! Chairman’s statement .................................................................................................................. 7! Our markets ............................................................................................................................... 11! Our business model ................................................................................................................... 16! Principal risks and uncertainties ................................................................................................ 17! Sustainability .............................................................................................................................. 33! Financial review ......................................................................................................................... 42! Business review ......................................................................................................................... 46! Corporate governance ................................................................................................................... 50! Board of Directors ...................................................................................................................... 51! Committee reports ..................................................................................................................... 60! Corporate governance ............................................................................................................... 70! Certain relationships and related party transactions .................................................................. 79! Material contracts ...................................................................................................................... 84! Audit and Risk Management Committee report ............................................................................ 99! Remuneration report ................................................................................................................... 105! Statement of directors’ responsibilities ........................................................................................ 128! Independent auditor’s report ....................................................................................................... 130! Financial statements ................................................................................................................... 137! Additional information .................................................................................................................. 190! Shareholder information .......................................................................................................... 190! Ancillary information for shareholders ..................................................................................... 195! 2 WorldReginfo - ef56c3b8-bd37-44de-aa8d-6ce2f2430569 Overview% Who%we%are% New World Resources Plc (‘NWR’ or the ‘Company’) is a Central European hard coal producer. Headquartered in Amsterdam, with listings on stock exchanges in London, Prague and Warsaw. What%we%do% Our principal mining assets are in the Czech Republic and we have several development projects in the Czech Republic and Poland. The Company employs over 14,000 people including contractors. As at 31 December 2014 Coal Reserves at NWR’s operating mines were estimated at 83 million tonnes 1 which, on beneficiation, are predicted to yield 58 2 million tonnes of Marketable Coal Reserves. We produce coking coal as well as thermal coal and supply to a blue-chip steel and energy customer base in Central Europe. In February 2013, we announced our updated strategy and set out strategic targets for the business. By 2017 we want to build on the strengths of NWR and evolve the business into Europe's leading miner and marketer of coking coal. In October 2014, we completed the restructuring of our balance sheet triggered by the prolonged decline in coal prices. With the support and participation of our stakeholders, an agreement was reached that led to the raising of EUR 185 million in new capital, reduced the nominal amount of our outstanding total debt by 35 per cent from EUR 825 million to EUR 535 million, extended the term of our senior notes to 2020, and significantly reduced our debt servicing costs. Main%subsidiaries% OKD, a.s. (‘OKD’) Our principal wholly owned subsidiary OKD is the Czech Republic’s only hard coal mining company and one of its largest private employers. Its four operating mines are located in Northern Moravia, south of the Polish border and are a part of the Upper Silesian Coal Basin. NWR KARBONIA S.A. (‘NWR KARBONIA’) NWR KARBONIA oversees two development projects in southern Poland, Debieńsko and Morcinek. NWR Holdings B.V. (‘NWRH’) is a wholly owned subsidiary of NWR. Headquartered in Amsterdam, it holds our main subsidiaries, OKD and NWR Karbonia. OKK Koksovny, a.s. (‘OKK’) Coking subsidiary sold to the METALIMEX group in 2013. % 1 Information in this Annual Report relating to OKD Coal Reserves as at 31st December 2014 is based on the reserve estimate as of 31st March 2014 prepared by JT Boyd in accordance with the JORC Code 2012 and adjusted by subsequent depletion and coal losses. 2 The 58 million tonnes of estimated Marketable Reserves includes approximately 9 million tonnes in subsidence sensitive areas in Karvina, the extraction of which has been deferred in the current OKD life of mine plan due to the requirement for significant capital investment 3 WorldReginfo - ef56c3b8-bd37-44de-aa8d-6ce2f2430569 Key%performance%indicators% Total coal sales 2014: 8.3Mt 2013: 9.7Mt (includes sales to OKK) 2012: 10.2Mt (includes sales to OKK) 2011: 10.6Mt 2010: 10.7Mt Revenues 2014: EUR 676 million (from continuing operations) 2013: EUR 850 million (from continuing operations) 2012: EUR 1,179 million (from continuing operations) 2011: EUR 1,632 million (including the results from discontinued operations) 2010: EUR 1,590 million (including the results from discontinued operations) Cash mining costs per tonne 2014: EUR 67 2013: EUR 78 2012: EUR 71 2011*: EUR 82 2010*: EUR 71 * All costs incurred in coal mining including also general and administrative costs. EBITDA 2014: EUR 11 million (from continuing operations) 2013: EUR (10) million (from continuing operations) 2012: EUR 210 million (from continuing operations) 2011: EUR 454 million (including the results from discontinued operations) 2010: EUR 464 million (including the results from discontinued operations) Operating profit/loss 2014: EUR (258) million (from continuing operations) 2013: EUR (973) million (from continuing operations) 2012: EUR 50 million (from continuing operations) 2011: EUR 276 million 2010: EUR 295 million LTIFR3 2014: 8.18 2013: 7.41 (Excluding OKK) 2012: 7.45 (7.61 excluding OKK) 2011: 7.64 2010: 8.25 % 3 Lost Time Injury