Go Back Email this Link to a friend


Resource Generation Limited - Consolidated Financial Statements For The Year Ended 30 June 2017

Release Date: 30/08/2017 10:12:00      Code(s): RSG     
Resource Generation Limited
Registration number ACN 059 950 337
(Incorporated and registered in Australia)
ISIN: AU000000RES1
Share Code on the ASX: RES
Share Code on the JSE: RSG
("Resgen" or the ?Company?)

ASX/JSE Release
Resource Generation Limited today released its consolidated financial
statements for the year ended 30 June 2017.

The financial statements were approved by the Board of Directors and
signed by Denis Gately (Chairman). The directors take full
responsibility for the preparation of the annual report and that the
financial information has been correctly extracted from the underlying
annual financial statements. This summarised report is extracted from
audited information, but is not itself audited. The annual financial
statements were audited by Deloitte Touche Tohmatsu and their audit
opinion is available for inspection at the Company's registered office.

Auditors? report includes the following material uncertainty paragraph:

We draw attention to Note 1(a) in the financial report, which indicates
that the Group incurred a net loss of $2.0 million (2016: $7.7 million)
and used net cash in operating activities of $4.1 million (2016: $5.2
million) during the year ended 30 June 2017. As stated in Note 1(a),
these events or conditions, along with other matters as set forth in
Note 1(a), indicate that a material uncertainty exists that may cast
significant doubt on the Company?s and Group?s ability to continue as a
going concern. Our opinion is not modified in respect of this matter.

The full set of financial statements are available on Resource
Generations Limited?s website. www.resgen.com.au

Extracts from the financial statements for the year ended 30 June 2017
may be found below.

Contacts
Rob Lowe, CEO on +27 12 345 1057 or
Michael Meintjes, Company Secretary on +61 413 706 143

Media enquiries
Russell and Associates on +27 11 880 3924

Johannesburg
30 August 2017
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Limited

Resource Generation Limited (Resgen) is an emerging ASX and JSE-listed
energy company, currently developing the Boikarabelo Coal Mine in South
Africa?s Waterberg region. The Waterberg accounts for around 40% of the
country?s currently known coal resources. The Coal Resources and
Reserves for the Boikarabelo Coal Mine, held through the operating
subsidiary Ledjadja Coal, were recently updated based upon a new mine
plan and execution strategy. The Boikarabelo Coal Resources total 995Mt
and the Coal Reserves total 267Mt applying the JORC Code 2012 (SENS
announcement dated 23 January 2017)
        Consolidated statement of profit or loss and other
                       comprehensive income
                 For the year ended 30 June 2017


                                              Consolidated
                                               2017            2016
                                              $'000           $'000


Revenue from continuing
operations
                                                   182          210
Other
                                                   577           69

                                                   759          279


Administration, rent and
corporate                                   (3,606)          (1,638)

Depreciation of property plant
and equipment
                                              (387)           (334)

Employees benefits expense
                                            (2,640)          (3,682)
Finance expenses                                   (3)         (22)

Share based compensation
                                              (355)           1,906
Foreign exchange movements
                                              4,257          (4,165)


Loss before income tax
                                            (1,975)          (7,656)


Income tax expense                                   1          (1)




Loss from continuing operations
                                            (1,974)          (7,657)

Loss for the year                           (1,974)          (7,657)
Other comprehensive income, net
of income tax




Items that may be reclassified
subsequently to profit and loss
when specific conditions are met




Exchange differences on
translation of foreign
operations
                                    13,648   (19,550)

Total comprehensive income
                                    11,674   (27,207)




Loss is attributable to:


Owners of Resource Generation
Limited
                                   (1,974)   (7,657)




Total comprehensive income for
the year is attributable to:


Owners of Resource Generation
Limited                             11,674   (27,207)




Headline earnings                  (1,974)   (7,657)

Earnings per share (EPS) (cents)
                                     (0.3)     (1.3)
Headline earnings per share
(HEPS)(cents)
                                     (0.3)     (1.3)
Consolidated statement of financial position
As at 30 June 2017
                                 Consolidated
                                 2017                    2016


                                $'000                $'000


Current assets

Cash and cash
equivalents                     4,682           11,955


Trade and other
receivables                       170              146

Deposits and
prepayments                       180              174
                                5,032           12,275

Non-current assets


Property, plant and
equipment                      33,081               30,365



Mining tenements and
mining development            153,677              128,644



Deposits and loan
receivables                     2,042                1,859
                              188,800              160,868
TOTAL ASSETS                  193,832              173,143



Current liabilities


Trade and other
payables                        8,185                6,967
Provisions                        300                    180
Borrowings                     12,665                3,887
                               21,150               11,034
Non-current
liabilities
Provisions             2,175       1,983
Borrowings             34,115     35,728


Royalties payable      1,869       1,946
                       38,159     39,657



TOTAL LIABILITIES      59,309     50,691


NET ASSETS            134,523    122,452


Equity


Contributed equity    223,622    223,622
Reserves             (36,910)   (50,955)


Accumulated losses   (52,189)   (50,215)


TOTAL EQUITY          134,523    122,452
Consolidated statement of changes in equity

For the year ended 30 June 2017


                                Contri-
                                 buted                     Retained     Total
                                equity        Reserves     earnings     equity
                                  $'000        $'000        $'000       $'000




Balance at 30 June 2015         223,622 (11,817)           (60,240)      151,565



Loss for the year                         -            -    (7,657)      (7,657)
Other comprehensive income
for the year - exchange
differences on translation of
foreign operations                        -   (19,550)              -   (19,550)
Total comprehensive income
for the year                              -   (19,550)      (7,657)     (27,207)




Transactions with owners in
their capacity as owners:




Transfer of option premium
reserve to earnings                       -   (17,682)       17,682              -



Employee share options -
value of employee services                -    (1,906)              -    (1,906)




                                          -   (19,588)       17,682      (1,906)


Balance at 30 June 2016         223,622       (50,955)     (50,215)      122,452
Loss for the year            -           -         (1,974)   (1,974)

Other comprehensive income
for the year ? exchange differences
on translation of foreign
operations                  -          13,648      -         13,648

Total comprehensive income
/(loss) for the year         -         13,648      (1,974)   11,674

Transactions with owners in their capacity as owners

Treasury shares to be issued
vesting 30 June 2018         -         42          -          42
Employee share plan
value of employee services -           204         -          204
Employee share plan
Value of employee service    -         151          -          151

                             -         397         -          397

Balance at 30 June 2017      223,622   (36,910) (52,189)     134,523




For the year ended 30 June 2017
                                           Consolidated
                                          2017                  2016
                                         $'000                 $'000
Cash flows from operating
activities


Payments to suppliers and
employees                              (4,277)               (5,369)

Interest received                            182                    210
Finance costs                                (3)                   (22)



Taxation payments                             1                     (1)

Net cash outflow from
operating activities                   (4,097)               (5,182)
Cash flows from investing
activities




Payments for land, property,
plant and equipment               (185)     (537)



Payments for mining tenements
and mining development          (6,673)   (8,836)


Net cash outflow from
investing activities            (6,858)   (9,373)



Cash flows from financing
activities

Repayment of borrowings         (2,798)   (1,935)

Forfeited share deposit               -         -
Drawdown from
loan                              6,830         -
Net cash inflow from
financing activities              4,032   (1,935)




Net (decrease)/increase in
cash and cash equivalents       (6,923)   (16,490)




Cash and cash equivalents at
the beginning of the year        11,955    28,551



Effects of exchange rate
movements on cash and cash
equivalents                       (350)     (106)




Cash and cash equivalents at
the end of the year               4,682    11,955
  1.   Basis of preparation

This general purpose financial report has been prepared in accordance
with Australian Accounting Standards, other authoritative pronouncements
of the Australian Accounting Standards Board including Interpretations
and the Corporations Act 2001. For the purposes of preparing the
consolidated financial statements, the Company is a for-profit entity.

The financial report of Resource Generation Limited also complies with
International Financial Reporting Standards ("IFRS") as issued by the
International Accounting Standards Board ("IASB").



3. Critical accounting estimates and judgements

The preparation of financial statements in conformity with Australian
Accounting Standards requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the
process of applying the Group's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements,
are disclosed below.




Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of
future events that may have a financial impact on the entity and that
are believed to be reasonable under the circumstances. The estimates
and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the
next financial year are discussed below.




The accounting policies and methods of computation adopted in the
preparation of the financial report are consistent with those adopted
and disclosed in the Company's financial report for the year ended 30
June 2016. These accounting policies are consistent with Australian
Accounting Standards and with International Financial Reporting
Standards.
Capitalisation of Mining Tenements and Mining Development expenditure


Development expenditure incurred by or on behalf of the consolidated
entity is accumulated separately for each mine in which economically
recoverable reserves have been identified to the satisfaction of the
Directors. Such expenditure comprises direct costs plus overhead
expenditure incurred which can be directly attributable to the
development process, in accordance with AASB 116 'Property, Plant &
Equipment'.




All expenditure incurred prior to the commencement of commercial levels
of production from each area of interest is carried forward to the
extent which recoupment out of revenue to be derived from the sale of
production from the area of interest, or by its sale, is reasonably
assured. Once commercial levels of production commence, the development
expenditure in respect of that area of interest will be depreciated on
a straight-line basis, based upon an estimate of the life of the mine.




Development expenditure on the Boikarabelo Coal Mine has been fully
capitalised as per note 11. The Group is confident of the full recovery
of the expenditure on the Boikarabelo Coal Mine on the basis of the
financial modelling of the mine incorporating forecast production,
sales levels and capital expenditure. This model is updated regularly
and used to assess whether an impairment provision is required. Based
on the current critical estimates and judgements, the Directors do not
believe that an impairment provision is required.

As at 30 June 2017 the carrying value of the capitalised Mining
Tenements and Mining Development Expenditure is $153.7m (2016: $128.6m)
as disclosed in note 11. In the current year $10.0m of development
expenditure has been capitalised.

Management has exercised judgment in determining whether development
expenditure incurred meets the criteria for capitalisation, including:
  1. Assessing whether costs are directly attributable to bringing the
     mine to the location and condition necessary for operating as
     intended; and
  2. Assessing whether it is probable that the expenditure will result
     in future economic benefits, including an assessment of the
     availability of adequate funding for development and exploitation
     of the assets or alternatively, the ability to sell the asset.
Impairment of Property, Plant and Equipment and Mining Tenements and
Mining Development expenditure

As at 30 June 2017 the carrying value of Property, Plant and Equipment
and Mining Tenements and Mining Development Expenditure is $33.1m
(2016: $30.4m) and $153.7m (2016: $128.6) respectively, as disclosed in
notes 10 and 11.

Management has exercised judgment in determining whether indicators of
impairment exist for Property, Plant and Equipment and Mining Tenements
and Mining Development Expenditure. When such indicators are
identified, management is required to exercised significant judgment in
making and estimate of recoverable amount of these assets, including:
  1. Future cash flows for Cash Generating Units (?CGU?), which include
     estimates of future coal prices, operating and capital costs and
     foreign exchange rates; and
  2. Discount rates.

4. Segment information

   4.1 Description of operating segments

   Management has determined the segments based upon reports reviewed by
   the Board that are used to make strategic decisions. The Board
   considers the business from both a business and geographic
   perspective, with the Board being the chief operating decision maker.

   Business segments
   The Group has coal interests in South Africa. The main priority is to
   develop its Coal Resources in the Waterberg region of South Africa.
   Management has determined that there is one operating segment, being
   mining tenements and mining development. Unallocated corporate
   administration reflects other corporate administration costs.


   4.2 Segment revenue and results


              Segment Revenue        Segment Loss
              Year          Year      Year     Year
              Ended        Ended      Ended     Ended
              30/6/17      30/6/16    30/6/17   30/6/16
              $?000        $?000     $?000     $?000

Mining
Tenements
And mining
Development   623         243        (848)        (629)

Corporate ?
Unallocated   136         36         (1,126)      (7,028)

Total for
Continued
Operations    759         279        (1,974)      (7,657)
The accounting policies of the reportable segments are the same as the
Group's accounting policies described in note 1. The mining tenements
and mining development segment loss represents the loss incurred by that
segment without allocation of central administration costs and salaries,
gains and losses, finance costs and income tax expense, all of which are
included in the corporate segment. This is the measure reported to the
chief operating decision maker for the purposes of resource allocation
and assessment of segment performance.

4.3 Segment asset and liabilities

                             2017      2016
                             $?000     $?000

Segment assets

Mining tenements
and mining
development                  193,082   162,114

Corporate ?
unallocated                  750       11,029

                             193,832   173,143

Segment liabilities

Mining tenements
and mining
development                  58,975    50,390

Corporate ?
unallocated                  334       301

                             59,309    50,691

4.4 Other segment information

              Depreciation   and       Additions to land,
              amortisation             property, plant and equipment
              Year           Year      Year         Year
              ended          ended     ended        ended
              30/6/17        30/6/16   30/6/17      30/6/16
              $?000          $?000     $?000        $?000

Mining tenements
and mining
development 367              309       185         504

Corporate ?
unallocated   20             25        -           33

Total         387            334       185         537
4.5 Other segment information ? mining assets

                                Additions
                                to mining
                                assets
                                Year ended        Year ended
                                30/6/17           30/6/16

Mining tenements and
Mining development              9,968             20,025

Corporate ? unallocated         -                 -

                                9,968             20,025

4.6 Geographical information

            Revenue from external customers       Non-current assets
            Year         Year                     Year         Year
            ended        ended                    ended        ended
            30/6/17      30/6/16                  30/6/17      30/6/16
            $?000        $?000                    $?000        $?000

Australia   136           36                      18           39

South
Africa      623           243                     188,782      160,829

            759           279                     188,800      160,868

5     Events occurring after the reporting period
Subsequent to the end of the financial year, the Board believed it would
be reasonable to ask the Debt Club members to undertake their credit
approval process to a conclusion notwithstanding the lack of an Eskom
memorandum of understanding, but on the basis that any draw down of
senior debt be subject to a concluded domestic coal supply agreement
being in place.

However, on 23 August 2017 some Debt Club members formally declined to
proceed on that basis. Instead they required a greater degree of
certainty around the terms of supply to Eskom before proceeding to
secure credit approval for funding of the project. In the circumstances,
the Board now believes that seeking project finance from the Debt Club
is no longer viable.

Mindful of the present difficulties in securing terms of supply with
Eskom, management has in parallel been exploring an alternative funding
proposal to place before the Board (the Alternative Funding). This
proposal is not subject to a committed domestic coal supply agreement.
The credit approval processes of these lenders, who are familiar with
the project, have commenced and are expected to be concluded by October
2017. Provided those processes are successful, a signed term sheet could
be expected before the end of October 2017. At that time the Board will
consider a recommendation from management and make a decision on the
Alternative Funding proposal.
Subsequent to the end of the financial year, Noble agreed to defer the
date on which loan repayments were to commence from September 2017 to
April 2018.

There are no other events that have occurred subsequent to the end of
the financial year that have significantly affected or may significantly
affect:
     (i)     the Group?s operations in future financial years, or
     (ii)    the results of those operations in future financial years,
            or
     (iii)   the Group?s state of affairs in future financial years.


6     Dividends
No dividends were paid or proposed to be paid to members during the
financial year (2016: nil).

Date: 30/08/2017 10:12:00 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             . The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.


                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.