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Interim Financial Report for the half year ended 31 December 2012
Resource Generation Limited
Registered in Australia under the Corporations Act, 2001 (Cth) with registration number ACN: 059 950 337
ISIN: AU000000RES1
Share Code on the ASX: RES
Share Code on the JSE: RSG
("Resgen" or the “Company”)
ABN 91 059 950 337
Interim Financial Report for the half year ended 31 December 2012
Contents Page
Directors' report 2,3
Auditor's independence declaration 4
Interim financial report
Condensed consolidated statement of comprehensive income 5
Condensed consolidated statement of financial position 6
Condensed consolidated statement of changes in equity 7
Condensed consolidated statement of cash flows 8
Notes to the condensed consolidated financial statements 9, 10, 11
Directors' declaration 12
Independent auditor's review report to members 13,14
Supplementary information - presentation of financial information in South
African Rand 15,16,17
This interim financial report does not include all of the notes of the type normally included in an annual financial report.
Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2012 and any
public announcements made by Resource Generation Limited during the interim reporting period in accordance with the
continuous disclosure requirements of the Corporations Act 2001.
RESOURCE GENERATION LIMITED
Director's Report
The Board of Directors present their report on the consolidated entity consisting of Resource Generation Limited (the
Company) and the entities it controlled for the half year ended 31 December 2012.
Directors
The following persons were Directors of Resource Generation Limited during the whole or part of the half year and up to
the date of this report:
Mr BD Warner (Chairman)
Mr PJ Jury (Managing Director)
Mr SJ Matthews (Executive Director and Company Secretary)
Mr G Rose AO (Non-Executive Director)
Review of Operations
During the half year ended 31 December 2012 the consolidated entity recorded a net loss of $0.8 million (2011 profit $0.7
million).
Key activities during the six months to 31 December 2012 were:-
- In October 2012 a mandate was awarded to six South African and global banks to provide project debt finance for
the construction of the Boikarabelo mine. The financiers are now progressing towards formal credit approvals for the
facility.
- In November 2012 the Black Economic Empowerment (BEE) Boikarabelo project signed a port access contract with
Bulk Connections which operates a multi-purpose terminal at the Port of Durban. Under a take or pay contract there
2015.
will be sufficient stockpile to enable the Company to meets its Stage 1 export targets from early 2015
- The Company continued with detailed engineering designs for its planned Boikarabelo mine in the Waterberg region
of South Africa, where there are probable reserves of 774.8 million tonnes of coal on 35% of the tenements
controlled by the Company.
Events Occurring after the Balance Sheet Date
Resource Generation issued a debenture to Noble Resources International Pte Ltd (Noble) following the receipt of $20
million cash on 8 January 2013. The cash is to augment available funding and progress construction activities at the
Boikarabelo coal mine.
The debenture is repayable in December 2013 and is on normal commercial terms. The debenture is secured by the assets
of the Company, in particular the shares in two subsidiaries of the Company- Resgen Mauritius Limited and Resgen Africa
Holdings Limited.
An export coal offtake contract for 2.5 million tonnes of coal over 5 years has also been entered into with Noble, with
supply after production commences at the Boikarabelo mine. Coal prices will be set by reference to an internationally
recognised index at the time of each shipment. A marketing fee is payable in respect of the coal offtake contract.
Resource Generation and Noble have agreed to have good faith discussions with regards to a strategic marketing alliance
for Boikarabelo coal.
There are no other matters of significance up to the date of this report that have not been included in the interim financial
statements.
Page 2
Director's Report
Auditor's Independence declaration
A copy of the auditor's independence declaration as required under Section 307C of the Corporations Act 2001 is set out
on page 4.
Rounding of amounts
The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments
Commission, relating to the rounding off of amounts in the Directors' Report and financial report. Amounts in the Directors'
Report and financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or
in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of the Directors.
PJ Jury
Director
Sydney
5 February 2013
Page 3
RESOURCE GENERATION LIMITED
Condensed consolidated statement of comprehensive income for the half year ended 31 December 2012
Half year ended
Notes
31-Dec-12 31-Dec-11
$'000 $'000
Revenue from continuing operations 758 1,068
Administrative, rent and corporate (820) (508)
Employee benefits expense (382) (364)
Depreciation of property, plant & equipment (75) (50)
Payments for land management (56) (550)
Share based compensation 3 (171) (358)
Loss before income tax expense (746) (762)
Income tax expense (14) (5)
Loss from continuing operations (760) (767)
Profit from discontinued operations 6 - 1,447
(Loss) / Profit for the half year (760) 680
p
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations 8 (1,150) (1,903)
Total comprehensive income for the half year (1,910) (1,223)
(Loss) / Profit is attributable to:
Owners of Resource Generation Limited (760) 680
Total comprehensive income for the half year is attributable to:
Owners of Resource Generation Limited (1,910) (1,223)
Earnings per share
From continuing and discontinued operations Cents Cents
Basic earnings per share (0.29) 0.26
Diluted earnings per share (0.29) 0.25
From continuing operations Cents Cents
Basic earnings per share (0.29) (0.29)
Diluted earnings per share (0.29) (0.29)
The above condensed consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Page 5
RESOURCE GENERATION LIMITED
Condensed consolidated statement of financial position
As at 31 December 2012
Notes 31-Dec-12 30-Jun-12
$'000 $'000
Current assets
Cash and cash equivalents 6,551 12,116
Trade and other receivables 147 804
Deposits and prepayments 366 360
7,064 13,280
Non-current assets
Property, plant and equipment 41,515 38,227
Mining tenements and exploration (net of provision for diminution) 81,579 77,388
Deposits and receivables 11,364 11,581
134,458 127,196
TOTAL ASSETS 141,522 140,476
Current liabilities
Trade and other payables 6,360 2,875
Provisions 541 464
Borrowings 4 - 763
6,901 4,102
Non-current liabilities
Royalties payable 2,972 3,099
2,972 3,099
TOTAL LIABILITIES 9,873 7,201
NET ASSETS 131,649 133,275
Equity
Issued Capital 5 148,728 148,615
Reserves 17,634 18,613
Accumulated losses (34,713) (33,953)
TOTAL EQUITY 131,649 133,275
The above condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page 6
Condensed consolidated statement of changes in equity
For the half year ended 31 December 2012
Attributable to owners of Resource Generation Limited
Contributed
Notes equity Reserves Retained earnings Total equity
$'000 $'000 $'000 $'000
Balance as at 1 July 2011 148,615 20,063 (34,526) 134,152
Profit for the period - - 680 680
Other comprehensive income for the period - (1,903) - ( 1,903)
Total comprehensive income for the period - ( 1,903) 680 ( 1,223)
Employee share options - value of employee services - 358 - 358
- 358 - 358
Balance at 31 December 2011 148,615 18,518 (33,846) 133,287
Balance at 1 July 2012 148,615 18,613 (33,953) 133,275
Loss for the period - - (760) ( 760)
Other comprehensive income for the period - (1,150) - ( 1,150)
Total comprehensive income for the period - ( 1,150) ( 760) ( 1,910)
Contributions of equity, net of transaction costs 113 - - 113
Employee share options - value of employee services - 171 - 171
113 171 - 284
Balance at 31 December 2012 148,728 17,634 (34,713) 131,649
The above condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page 7
RESOURCE GENERATION LIMITED
Condensed consolidated statement of cash flows
For the half year ended 31 December 2012
Half year ended
31-Dec-12 31-Dec-11
$'000 $'000
Cash flows from operating activities
Receipts from customers (Inclusive of government charges) - -
Payments to suppliers and employees (inclusive of government charges) (787) (721)
Land management 49 (621)
Interest received 257 603
Interest paid (4) (5)
Payments for mineral tenements and exploration - (47)
Net cash outflow from operating activities (485) (791)
Cash flows from investing activities
Payments for property, plant and equipment (470) (79)
Receipts for government charges associated with land acquisition (refundable) 731 453
Net refund from deposits 1,847 -
Proceeds from sale of business - 1,500
Payments for mineral tenements and exploration (5,962) (3,410)
Net cash outflow from investing activities (3,854) (1,536)
Cash flows from financing activities
Net proceeds from issue of shares 113 -
Loan to BEE partner (1,269) (1,283)
Net cash outflow from financing activities (1,156) (1,283)
Net decrease in cash and cash equivalents (5,495) (3,610)
Cash and cash equivalents at the beginning of the half year 12,116 25,326
Effects of exchange rate movements on cash and cash equivalents (70) (891)
Cash and cash equivalents at the end of the half year 6,551 20,825
The above condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Page 8
RESOURCE GENERATION LIMITED
Notes to the condensed consolidated financial statements
For the half year ended 31 December 2012
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation of half year financial report
This general purpose financial report for the interim half year reporting period 31 December 2012 has been prepared in accordance with Accounting Standard
AASB 134 Interim Financial Reporting and the Corporations Act 2001.
This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in
conjunction with the Annual Report for the year ended 30 June 2012 and any public announcements made by Resource Generation Limited during the interim
reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
The interim financial report has been prepared on the basis of historical cost except for the revaluation of certain financial instruments. Cost is based on the fair
values of consideration given in exchange for assets. All amounts are presented in Australian Dollars, unless otherwise noted.
The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.
Disclosure surrounding adoption of new or revised Standards
AASB 2011-9 "Amendments to Australian Accounting Standards- Presentation of Items of Other Comprehensive Income"
The amendments required the Company to group items in other comprehensive income (OCI) on the basis of whether they are potentially reclassifiable to profit
or loss subsequently and any tax associated with items before tax to be shown separately for each of the two groups of OCI items.
The adoption of the new and revised Standard has not resulted in any changes to the Company's accounting policies and has no effect on the amounts
reported for the current and prior half-years. However, the application of AASB 2011-9 has resulted in changes to the Company's presentation of, or disclosure
in, its half-year financial statements.
(b) Significant accounting policies
The interim financial report has been prepared using the same accounting policies as used in the annual financial statements for the year ended 30 June 2012.
The significant accounting policy for the Company is development expenditure.
Development expenditure
Development expenditure incurred by or on behalf of the consolidated entity is accumulated separately for each area of interest 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.
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
d ti the development expenditure iin respect of th t area of iinterest will b amortised on a straight li b i , b d upon an estimate of th
production commence, th d l t dit t f that f t t ill be ti d t i ht line basis based ti t f the
life of the area of interest.
The interim financial report comprises the financial statements of Resource Generation Limited and its subsidiaries as at 31 December 2012 ("the Consolidated
Entity").
2. SEGMENT INFORMATION
(a) Description of segments
Business segments
The consolidated entity is organised into the following divisions by product and service type:
Mineral tenements and exploration
Coal tenements in South Africa and prospective uranium tenements in Cameroon.
Geographical segments
The Company is domiciled in Australia. Mine development activities are undertaken in South Africa. The Company has established a presence in Mauritius.
(b) Primary reporting format - business segments
Half year 2012 Mining tenements Corporate Total
Africa Australia Australia
$'000 $'000 $'000 $'000
Total segment and consolidated revenue 651 - 107 758
Profit/(Loss) before income tax 218 - (964) (746)
Income tax expense (14) - - (14)
Profit/(Loss) for the half year 204 - (964) (760)
Half year 2011 Mining tenements Corporate Total
Africa Australia Australia
$'000 $'000 $'000 $'000
Total segment and consolidated revenue 619 - 449 1,068
Loss before income tax (7) - (755) (762)
Income tax expense (5) - - (5)
Profit from discontinued operations - 1,447 - 1,447
Profit/(Loss) for the half year (12) 1,447 (755) 680
Page 9
RESOURCE GENERATION LIMITED
Notes to the condensed consolidated financial statements
For the half year ended 31 December 2012
3.PROFIT / (LOSS) FOR THE HALF YEAR Half year ended
31-Dec-12 31-Dec-11
$'000 $'000
Loss for the half year includes the following items that are unusual because of their nature, size or
incidence:
Expenses
Share based compensation 171 358
171 358
4. BORROWINGS
31-Dec-12 30-Jun-12
$'000 $'000
Current liabilities/ Borrowings - secured - 763
- 763
The loan represented a delayed payment in respect of a land acquisition in South Africa. The final payment was made on 17 December 2012.
5. EQUITY SECURITIES ISSUED
Half year ended Half year ended
31-Dec-12 31-Dec-11 31-Dec-12 31-Dec-11
Shares Shares $'000 $'000
Opening balance 257,895,652 257,895,652 148,615 148,615
Issues of ordinary shares during the half year
Options exercised 28 November 2012 450,000 - 113 -
Closing balance 258,345,652 257,895,652 148,728 148,615
6. DISCONTINUED OPERATION
a) Description
The Company's wholly owned subsidiaries, Energy Investments Pty Limited and Tiger Coal Pty Limited, which held the Tasmanian coal tenements, were sold
on 16 September 2011 for $1,500,000 with the proceeds received in cash.
b) Disposal of subsidiaries
Half year ended
31-Dec-12 31-Dec-11
$000 $000
Revenue - -
Development expenditure - (53)
Provision for diminution - -
Loss before income tax - (53)
Income tax expense - -
Loss on operations - (53)
Proceeds from sale - 1,500
Profit from discontinued operations - 1,447
Page 10
RESOURCE GENERATION LIMITED
Notes to the condensed consolidated financial statements
For the half year ended 31 December 2012
7. DEVELOPMENT PARTNERS
31-Dec-12 30-Jun-12
Interest Interest
% %
Waterberg One Coal (Pty) Limited 70 70
Ledjadja Coal (Pty) Limited 74 74
8. FOREIGN TRANSLATION RESERVE
31-Dec-12 30-Jun-12
$'000 $'000
Opening Balance 2,361 380
Movement 1,150 1,981
Closing Balance 3,511 2,361
The movement in the foreign currency reserve reflects the appreciation of the Australian Dollar against the South African Rand in the six months since 30 June
2012 and the impact this has on the conversion of monetary assets held in South Africa.
11. COMMITMENTS
Capital commitments
The Group has $5.1m in commitments in respect of the development of the Boikarabelo mine.
12. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
Resource Generation issued a debenture to Noble Resources International Pte Ltd (Noble) following the receipt of $20 million cash on 8 January 2013. The
cash is to augment available funding and progress construction activities at the Boikarabelo coal mine.
The debenture is repayable in December 2013 and is on normal commercial terms. The debenture is secured by the assets of the Company, in particular the
shares in two subsidiaries of the Company- Resgen Mauritius Limited and Resgen Africa Holdings Limited.
An export coal offtake contract for 2.5 million tonnes of coal over 5 years has also been entered into with Noble, with supply after production commences at the
Boikarabelo mine. Coal prices will be set by reference to an internationally recognised index at the time of each shipment. A marketing fee is payable in respect
of the coal offtake contract.
Resource Generation and Noble have agreed to have good faith discussions with regards to a strategic marketing alliance for Boikarabelo coal.
There are no other matters of significance up to the date of this report that have not been included in the interim financial statements.
Page 11
RESOURCE GENERATION LIMITED
Directors' declaration
In the directors' opinion:
(a) there are reasonable grounds to believe that Resource Generation Limited will be able to pay its debts as and when they become due and payable.
(b) the financial statements and notes set out on pages 5 to 11 are in accordance with the Corporations Act 2001 , including compliance with accounting standards
and giving a true and fair view of the financial position and performance of the consolidated entity.
This declaration is made in accordance with a resolution of the directors.
PJ Jury
Director
Sydney
5 February 2013
Page 12
Supplementary Information - Presentation of financial information in South African Rand
The presentation currency used in the preparation of the financial statements is the Australian dollar ($A). The Group has translated the financial
statements to the South African (SA) Rand (ZAR) because the Boikarabelo mine, which represents the Group's most significant activity, is located in
this region. This supplementary information has restated the financial statements in Rand. Assets and liabilities were translated in SA Rand using the
relevant closing rate of exchange and income and expense items were translated using the relevant cumulative average rate of exchange. The
applicable rates used in the restatement of information are as follows:
Dec-12 Jun-12 Dec-11
Cumulative average rate of exchange $A/Rand 8.8288 8.0618 7.9397
Closing rate of exchange $A/Rand 8.8002 8.4409 8.3074
Consolidated Statements of Comprehensive Income - ZAR Convenience Translation (Supplementary Information)
For the half year ended 31 December 2012
Half year ended
2012 2011
R'000 R'000
Revenue from continuing operations 6,692 8,481
Administration, rent and corporate (7,240) (4,033)
Depreciation of property plant and equipment (662) (401)
Employees benefits expense (3,373) (2,890)
Land management (493) (4,364)
Share based compensation (1,510) (2,845)
Loss before income tax expense (6,586) (6,052)
Income tax expense (124) (43)
Loss from continuing operations (6,710) (6,095)
Profit from discontinued operations - 11,495
(Loss) / Profit for the year (6,710) 5,400
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations (10,153) (15,109)
Total comprehensive income for the half year (16,863) (9,709)
Loss / (Profit) is attributable to:
Owners of Resource Generation Limited (6,710) 5,400
Total comprehensive income for the year is attributable to:
Owners of Resource Generation Limited (16,863) (9,709)
Earnings per share Rand Rand
From continuing and discontinued operations
Basic earnings per share (2.6) 2.1
Diluted earnings per share (2.6) 2.0
From continuing operations
Basic earnings per share (2.6) (2.3)
Diluted earnings per share (2.6) (2.3)
Page 15
Consolidated Statements of Financial Position - ZAR Convenience Translation (Supplementary Information)
As at 31 December 2012
Consolidated
31-Dec-12 30-Jun-12
R'000 R'000
Current assets
Cash and cash equivalents 57,650 102,270
Trade and other receivables 1,294 6,786
Deposits and prepayments 3,221 3,039
62,165 112,095
Non-current assets
Property, plant and equipment 365,340 322,673
Mining tenements and exploration 717,912 653,221
Deposits and receivables 100,005 97,755
1,183,257 1,073,649
TOTAL ASSETS 1,245,422 1,185,744
Current liabilities
Trade and other payables 55,969 24,268
Provisions 4,761 3,917
Borrowings - 6,440
60,730 34,625
Non-current liabilities
Royalties payable 26,154 26,158
26,154 26,158
TOTAL LIABILITIES 86,884 60,783
NET ASSETS 1,158,538 1,124,961
Equity
Contributed equity 1,308,832 1,254,444
Reserves 155,188 157,111
A l t dl
Accumulated losses (305 482)
(305,482) (286 594)
(286,594)
TOTAL EQUITY 1,158,538 1,124,961
Page 16
Consolidated statement of cash flow - ZAR Convenience Translation (Supplementary Information)
For the half year ended 31 December 2012
Half year ended
2012 2011
R'000 R'000
Cash flows from operating activities
Receipts from customers (inclusive of government charges) - -
Payments to suppliers and employees (inclusive of government charges) (6,949) (5,725)
Payments for land management 433 (4,931)
Interest received 2,269 4,788
Interest paid (35) (40)
Payments for mineral tenements and exploration - (373)
Net cash outflow from operating activities (4,282) (6,281)
Cash flows from investing activities
Payments for land, property, plant and equipment (4,150) (627)
Receipt for government charges associated with land acquisition 6,454 3,597
Net refunds from deposits 16,307 -
Proceeds from sale of business - 11,910
Payments for mineral tenements and exploration (52,637) (27,074)
Net cash outflow from investing activities (34,026) (12,194)
Cash flows from financing activities
Net proceeds from issue of shares 998 -
Loan to BEE partner (11,204) (10,187)
Net cash outflow from financing activities (10,206) (10,187)
Net decrease in cash and cash equivalents (48,514) (28,662)
Cash and cash equivalents at the beginning of the half year 102,270 184,535
Effects of exchange rate movements on cash and cash equivalents 3,894 17,129
Cash and cash equivalents at the end of the half year 57,650 173,002
Sydney
5 February 2013
JSE Sponsor:
Macquarie First South Capital (Proprietary) Limited
Page 17
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