Wrap Text
Australian Stock Exchange Appendix 4E – Preliminary Final Report
RENERGEN LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2014/195093/06)
JSE Share code: REN
A2X Share code: REN
ISIN: ZAE000202610
Australian Business Number (ABN): 93 998 352 675
ASX Share code: RLT
(“Renergen” or “the Company”)
AUSTRALIAN STOCK EXCHANGE APPENDIX 4E – PRELIMINARY FINAL REPORT
Reporting Period Year ended 28 February 2021 (2021)
Previous Period Year ended 29 February 2020 (2020)
RESULTS ANNOUNCEMENT TO THE MARKET
2021 2020 Change
Rm Rm %
Revenue 1.9 2.6 -26.94%
Loss after tax attributable to ordinary shareholders 42.6 52.6 -19.00%
Total comprehensive loss attributable to ordinary shareholders 42.6 52.0 -18.07%
Change
Cents Cents %
Basic loss per share 36.29 47.92 -24.28%
Diluted loss per share 36.29 47.92 -24.28%
- The Group’s revenue was negatively impacted by the country-wide hard lockdown imposed by the
South African government in the first half of the financial year to assist with curbing the spread of
COVID-19. This resulted in Tetra4 Proprietary Limited (“Tetra4”), a wholly owned operating
subsidiary of the Group, not generating revenue in April 2020 and May 2020. Production resumed at
the Group’s Compressed Natural Gas (“CNG”) plant in June 2020.
- The loss after tax attributable to ordinary shareholders and the total comprehensive loss for the
year attributed to ordinary shareholders decreased markedly primarily due to an improvement in
the Group’s operating cost base and a reduction in share-based payments expenses. Prior year
operating expenses included listing costs totalling R6.4 million (impacted by ASX listing) and net
exchange losses totalling R15.0 million, which decreased to R0.4 million and R8.9 million,
respectively, in the current year. Share-based payments expenses decreased to R1.8 million
(2020: R7.1 million) as the prior year expense included shares granted to advisors pursuant to the
listing of the Company on the ASX.
- The Group continues the development of the Virginia Gas Project and the operation is closer to
positive cash flow. In this regard, the many risks traditionally associated with green-field projects
are rapidly reducing.
2021 2020 Change
cents cents %
Tangible net asset value per share 80.21 134.56 -40.39%
Change
R’000 R’000 %
Total assets 780.4 626.5 +24.56
- The decrease in the Group’s tangible net asset value can be attributed primarily to the acquisition of
additional debt by the Company in June 2020, the loss incurred by the Group for the year and an
increase in intangible assets, offset by increases in the Group’s assets under construction.
- In June 2020, the Group made a second draw down of US$12.5 million on the DFC loan to fund the
construction of the gas plant.
PRELIMINARY FINAL FINANCIAL STATEMENTS
Please refer to pages 5 to 20 of this report wherein the following are provided:
Condensed Consolidated statement of profit or loss and other comprehensive income for the year ended
28 February 2021;
Condensed consolidated statement of financial position as at 28 February 2021;
Condensed consolidated statement of changes in equity for the year ended 28 February 2021;
Condensed consolidated statement of cash flows for the year ended 28 February 2021; and
Notes to the condensed consolidated financial statements.
The condensed consolidated financial statements presented have not been audited or subject to a review
by the external auditors. The audit of the Group’s financial statements for the year ended 28 February
2021 is currently ongoing.
OTHER DISCLOSURE REQUIREMENTS
Dividend or distribution reinvestment plans
Renergen did not declare dividends during the year ended 28 February 2021 (2020: nil).
Entities over which control has been gained or lost during the year
There was no acquisition or loss of controlling interest during the year ended 28 February 2021.
Details of associates and joint ventures
The Group does not have associates or joint ventures.
Additional Appendix 4E disclosure requirements and commentary on significant features of the operating
performance, results of segments, trends in performance and other factors affecting the results for the
period are contained in the financial report accompanying this announcement.
RESULTS COMMENTARY
The financial year ended 28 February 2021 has been an exciting one for the Group. We achieved our
strategic targets and moved the much-anticipated Virginia Gas Project closer to positive cash flow despite
the overwhelming headwinds presented by the COVID-19 pandemic. We believe we are on an even
stronger footing towards becoming a significant helium and LNG producer. Key highlights for the year
under review include:
- Completion of the pipeline design;
- Drawing the second tranche of the DFC Loan;
- Commencement of drilling of the first inclined well;
- Strategic tie-up with Total South Africa ("Total"), a leading oil super-major, on domestic LNG
distribution;
- Announcement of 106.3 billion cubic feet ("BCF") of prospective helium resources with a 2U or
50% probability of recovery;
- Identification of three additional drilling targets;
- Commencement of South Africa's first-ever LNG auction;
- Signing of the LNG supply agreement with Logico Logistics;
- Announcement of the first zero-emissions solution for cold-chain logistics; and
- Adding the N1 route between Johannesburg and Cape Town to the LNG filling routes with Total
South Africa.
The first COVID-19 case was reported in South Africa on 5 March 2021, which resulted in a nationwide
hard lockdown for the greater part of the first quarter of the financial year. This meant that the Group
had an unremarkable start to the year as the Group implemented stay-at-home measures according to
the government's recommendations. Despite a slow start to the financial year, in June 2020, we completed
the design of the Virginia Gas Plant, 22 days ahead of schedule. The customer base for the LNG produced
at the Virginia Gas Plant will predominantly be logistics companies operating trucks along the main routes
across the country, with a significant portion of the initial production already allocated to customers.
Our strategic partnership with Total, which also commenced in June 2020, could not have come at a better
time. This strategic tie-up adds credibility to the Virginia Gas Project and gives the Company access to
strategic sites on which to establish filling stations to dispense LNG to customers. The conclusion of the
agreement between Total and the Company was seen as a win-win for both entities, making Total part of
the rollout of the first LNG in South Africa, which aligns with its global strategy of becoming the largest
supplier and distributor of LNG. It also enabled the Group to add the N1 route between Johannesburg and
Cape Town as another major transport corridor for LNG, as the N1 carries the most refrigerated trucks in
the country.
The construction of the Virginia Gas Plant is ongoing and is nearing completion. The Group made a second
drawdown against the DFC loan facility to fund the ongoing construction of the plant, which is expected
to become operational in Q4 2021.
During the year under review, we also designed and patented Cyro-VaccTM for the efficient transportation
and storage of cold biologics for periods of up to 25 days or longer in transit, where access to an external
power source is not possible. Renergen is well-positioned for the recently released National Department
of Health tender for the distribution of vaccines. The Company has made significant progress in a very
short space of time, from developing the concept on 4 December 2020 to having a working prototype
entering clinical validation just after the middle of March 2021. The completion and successful operation
of the Company's first Cryo-VaccTM prototype were announced on 21 February 2021.
The global helium market is expected to grow at an average rate of approximately 11%. The helium
market growth is expected to be driven by the growing demand from the healthcare, technology, and
aerospace industry sectors. The decline of existing helium supply sources, particularly in the U.S. Bureau
of Land Management's (BLM) system, are causing industrial gas companies and distributors to seek new
sources of helium supply (Source: Global Helium Market Data and Industry Growth Analysis Report, 2021).
Financial Review
- The Group’s revenue decreased by R0.7 million impacted by the COVID-19 lockdown which
resulted in Tetra4 not trading in April and May 2020. Operations resumed in June 2020.
- The Group’s other operating expenses declined by R14.7 million primarily due to a decrease in
listing costs by R6.0 million (impacted by ASX listing in the prior year) and net foreign exchange
losses by R6.1 million. The Group’s other operating expenses are disclosed in note 5.
- Share based payments expenses decreased by R5.3 million. The prior year expense included
shares granted to advisors pursuant to the listing of the Company on the ASX. The Group’s share-
based payments are disclosed in note 8.
- Following completion of the Virginia Gas Plant design we spent an additional R125.7 million on
assets under construction classified within property, plant and equipment (“PPE”). The Group also
capitalised exploration expenditure totalling R21.5 million under intangible assets. The Group’s
PPE and intangible assets are disclosed in notes 2 and 3.
- Further investment on our non-current assets was partly funded by a second draw-down of
US$12.5 million on the DFC loan facility which occurred in June 2020. This resulted in an increase
in total borrowings by R183.1 million. The Group’s borrowings are disclosed in note 9.
- Unrestricted cash resources of the Group decreased marginally by R10.1 million. The Group’s cash
flows arising from operating, investing and financing activities are fully set out in the Statement of
Cash Flows.
- The net asset value of the Group decreased by R40.8 million impacted mainly by an increase in
debt and the loss for the year offset by the additional investment in PPE and intangible assets.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
The Condensed Consolidated Statement of Financial Position of the Group as at 28 February 2021 is set
out below:
R’000 Notes 2021 2020
ASSETS
Non-current assets 625 576 469 579
Property, plant and equipment 2 475 558 350 824
Intangible assets 3 112 155 89 223
Deferred taxation 10 34 976 26 803
Restricted cash 2 887 2 729
Current assets 154 786 156 912
Trade and other receivables 7 769 5 533
Financial assets - 246
Restricted cash 16 139 10 161
Cash and cash equivalents 4 130 878 140 972
TOTAL ASSETS 780 362 626 491
EQUITY AND LIABILITIES
Equity 206 408 247 230
Share capital 7 453 078 452 254
Share-based payments reserve 8 8 500 7 526
Revaluation reserve 598 598
Accumulated loss (255 768) (213 148)
LIABILITIES
Non-current Liabilities 541 476 358 145
Borrowings 9 534 293 351 182
Lease liabilities 3 183 2 963
Provisions 4 000 4 000
Current liabilities 32 478 21 116
Provisions 2 180 2 180
Lease liabilities 3 007 2 549
Trade and other payables 27 291 16 387
TOTAL LIABILITIES 573 954 379 261
TOTAL EQUITY AND LIABILITIES 780 362 626 491
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
The Condensed Consolidated Statement of Profit and Loss and Other Comprehensive Income of the Group
for the 12-month period ended 28 February 2021 is set out below:
R’000 Notes 2021 2020
Revenue 11 1 925 2 635
Cost of sales (2 842) (3 302)
Gross loss (917) (667)
Other operating income 911 81
Share-based payments expense 8 (1 798) (7 078)
Other operating expenses 5 (44 969) (59 641)
Operating loss (46 773) (67 305)
Interest income 672 5 352
Interest expense and imputed interest (4 691) (5 325)
Loss before taxation (50 792) (67 278)
Taxation 8 172 14 659
LOSS FOR THE YEAR (42 620) (52 619)
Other comprehensive income:
Items that may be reclassified to profit or loss in
subsequent periods:
Revaluation of property - 598
Other comprehensive income for the year net of
taxation - 598
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (42 620) (52 021)
Loss attributable to:
Owners of the Company (42 620) (52 619)
LOSS FOR THE YEAR (42 620) (52 619)
Total comprehensive loss attributable to:
Owners of the Company (42 620) (52 021)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (42 620) (52 021)
Loss per ordinary chare
Basic loss per share (cents) 12 36.29 47.92
Diluted loss per share (cents) 12 36.29 47.92
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
The Condensed Consolidated Statement of Changes in Equity of the Group for the 12- month period ended 28
February 2021 is set out below:
Total
equity
attributabl
Share- e to equity
based Revalua holders of Non-
R’000 Share payments -tion Accumulat the controlling Total
capital reserve reserve ed loss Company interest equity
BALANCE AT 1 MARCH
2019 301 277 448 - (121 091) 180 634 (16 401) 164 233
Adjustment on initial
adoption of IFRS 16 - - - (37) (37) - (37)
ADJUSTED BALANCE AT 1
MARCH 2019 301 277 448 - (121 128) 180 597 (16 401) 164 196
Loss for the year - - - (52 619) (52 619) - (52 619)
Other comprehensive
income for the year - - 598 - 598 - 598
Total comprehensive
income/(loss) for the year - - 598 (52 619) (52 021) - (52 021)
Issue of shares 159 746 - - - 159 746 - 159 746
Share issue costs (8 769) - - - (8 769) - (8 769)
Change in ownership - - - (39 401) (39 401) 16 401 (23 000)
Share-based payments
expense - 7 078 - - 7 078 - 7 078
BALANCE AT 29
FEBRUARY 2020 452 254 7 526 598 (213 148) 247 230 - 247 230
Loss for the year - - - (42 620) (42 620) - (42 620)
Total comprehensive loss
for the year - - - (42 620) (42 620) - (42 620)
Issue of shares 824 (824) - - - - -
Share-based payments
expense - 1 798 - - 1 798 - 1 798
BALANCE AT 28
FEBRUARY 2021 453 078 8 500 598 (255 768) 206 408 - 206 408
Notes 7 8
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
The Condensed Consolidated Statement of Cash Flows of the Group for the 12- month period ended 28
February 2021 is set out below:
R’000 Notes 2021 2020
Cash flows used in operating activities (23 914) (37 471)
Cash used in operations 6 (24 580) (42 636)
Interest received 672 5 352
Interest paid (6) (187)
Cash flows used in investing activities (196 338) (338 814)
Investment in property, plant and equipment 2 (163 079) (298 347)
Investment in intangible assets 3 (23 207) (18 728)
Purchase of options (16 197) (8 256)
Proceeds on exercise of options 6 145 9 517
Non-controlling interest buy-out - (23 000)
Cash flows from financing activities 213 186 434 349
Proceeds on share issue 7 - 159 746
Share issue costs 7 - (8 769)
Proceeds from borrowings 9 216 282 295 976
Loan facility fee paid - (4 814)
Settlement of convertible note - (5 452)
Right of use – lease payments (3 096) (2 338)
TOTAL CASH MOVEMENT FOR THE YEAR (7 066) 58 064
Cash and cash equivalents at the beginning of the
year 4 140 972 97 956
Effects of exchange rate changes on cash and cash
equivalents (3 028) (15 048)
TOTAL CASH AND CASH EQUIVALENTS AT THE END
OF THE YEAR 4 130 878 140 972
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated annual financial statements for the year ended 28 February 2021 have been prepared
in accordance with the framework concepts, the recognition and measurement criteria of International
Financial Reporting Standards (IFRS) and in accordance with and containing the information required by
the International Accounting Standard 34: Interim Financial Reporting (IAS 34) as issued by the
International Accounting Standards Board (IASB), Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council, the ASX Listing Rules and the requirements of the South African
Companies Act No.78 of 2008, as amended. The consolidated annual financial statements have been
prepared on the historical cost basis except for land that is carried at a revalued amount and derivative
financial assets and liabilities that are measured at fair value. Significant accounting policies applied in the
preparation of the consolidated annual financial statements are in terms of IFRS and are consistent with
those applied in the previous consolidated annual financial statements. Amendments to accounting
standards and new accounting pronouncements which came into effect for the first time during the
financial year did not have a material impact on the Group.
These condensed consolidated annual financial statements have been prepared on a going concern basis.
The consolidated annual financial statements are presented in South African Rand which is the Company's
functional and presentation currency. All monetary information is rounded to the nearest thousand
(R'000).
JSE shareholders should note that this form does not meet the JSE reporting requirements as this
information is not reviewed or audited and is issued in line with the ASX Listing Rules.
2. Property, plant and equipment
2021 2020
Cost or Accumulated Net book Cost or Accumulated Net book
R’000 valuation depreciation value valuation depreciation value
Assets under 451 576 - 451 576 325 886 - 325 886
construction
Right of use asset – 2 243 - 2 243 4 129 (1 376) 2 753
head office building
Land – at revalued 3 473 - 3 473 3 473 - 3 473
amount
Plant and machinery 20 714 (9 451) 11 263 20 715 (7 767) 12 948
Furniture and fixtures 1 206 (679) 527 1 146 (486) 660
Motor vehicles 2 095 (2 051) 44 2 050 (1 725) 325
Office equipment 208 (132) 76 209 (104) 105
IT equipment 541 (438) 103 542 (365) 177
Right of use assets - 4 526 (547) 3 979 2 359 (516) 1 843
motor vehicles
Office building 2 065 (270) 1 795 2 065 (63) 2 002
Leasehold
improvements:
Office equipment 152 (110) 42 152 (84) 68
Furniture and fixtures 887 (450) 437 887 (303) 584
TOTAL 489 686 (14 128) 475 558 363 613 (12 789) 350 824
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
2. Property, plant and equipment (continued)
At 28
2021 At 1 March February
R’000 2020 Additions Depreciation Disposals 2021
Assets under
451 576
construction 325 886 125 690 - -
Plant and machinery 12 948 - (1 685) - 11 263
Land – at revalued
3 473
amount 3 473 - - -
Right-of-use assets -
3 979
motor vehicles 1 843 3 022 (519) (367)
Right-of-use assets -
2 243
head office building 2 753 2 243 (1 262) (1 491)
Office building 2 002 - (207) - 1 795
Furniture and fixtures 660 60 (193) - 527
Motor vehicles 325 46 (327) - 44
Office equipment 105 - (29) - 76
IT equipment 177 - (74) - 103
Leasehold
improvements:
Office equipment 68 - (26) - 42
Furniture and fixtures 584 - (147) - 437
TOTAL 350 824 131 061 (4 469) (1 858) 475 558
Additions include foreign exchange losses totalling R37.3 million and interest totalling R28.9 million
capitalised as part of borrowing costs in line with the Group’s policy (attributable to the DFC loan), and
non-cash additions of right of use assets. These costs were capitalised within assets under construction.
Excluding these components, additions for the year total R163.1 million.
The Group's borrowings are disclosed in note 9.
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
3. Intangible assets
2021 2020
Accumu Accumu
-lated -lated
Amortis Carrying Amortis Carrying
R’000 Cost -ation Value Cost -ation Disposal Value
Exploration and
development costs 109 026 (32) 108 994 87 511 (32) - 87 479
Computer software 3 303 (439) 2 864 3 115 (474) (938) 1 703
Other intangible
assets 297 - 297 41 - - 41
TOTAL 112 626 (471) 112 155 90 667 (506) (938) 89 223
At 28
2021 At 1 March February
Additions Amortisation
R’000 2020 2021
Exploration and development costs 87 479 21 515 - 108 994
Computer software 1 703 1 436 (275) 2 864
Other intangible assets 41 256 - 297
TOTAL 89 223 23 207 (275) 112 155
The Company has not updated its Competent Person’s Report (CPR) for its exploration and evaluation
assets primarily due to the current operations not consuming a material amount gas, thus not materially
changing the Reserves and Resources since the last CPR was undertaken. In addition, all new exploration
activities were delayed due to COVID-19, and are still currently underway. We anticipate updating the
CPR in the financial year ending February 2022.
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
4. Cash and cash equivalents
Cash and cash equivalents consist of:
R’000 2021 2020
Cash at banks and on hand 24 219 140 972
Short-term deposits 106 659 -
TOTAL 130 878 140 972
Cash at banks earns interest at floating rates. Short-term deposits are made for varying periods depending on
the immediate cash requirements of the Group and earn interest at the respective short-term deposit rates.
Included in cash at banks and on hand is R17.2 million (2020: R8.7 million) denominated in United States Dollars.
5. Other operating expenses
R’000 2021 2020
Operating expenses by nature:
Consulting and advisory fees1 6 099 2 342
Listing fees 437 6 388
Employee costs2 6 417 12 970
Depreciation and amortisation3 3 060 3 542
Net foreign exchange losses 8 916 15 048
Computer and IT expenses 2 619 1 295
Security 1 095 512
Corporate costs 1 139 1 609
Insurance 1 534 730
Loss on disposal of asset - 938
Other operating costs 5 329 1 878
Director fees – Non-executive 2 162 2 581
Directors’ fees – Executive4 6 162 9 808
TOTAL 44 969 59 641
1 The increase in consulting and advisory fees is due to the additional consultancy services required to enhance and further define the Group's
exploration strategy.
2 Excludes employee costs amounting to R0.8 million (2020: R0.7 million) relating to the manufacturing of gas sold which are included in the Group
cost of sales.
3 Excludes depreciation of plant and machinery amounting to R1.8 million (2020: R2.1 million) which is included in the Group cost of sales.
4 Directors fees amounting to R7.1 million were capitalised to assets under construction (note 2) during the year under review.
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
6. Cash used in operations
R’000 2021 2020
Loss before taxation (50 792) (67 278)
Cash adjustments:
Interest received (672) (5 352)
Cash interest paid 6 187
Capitalised interest on convertible notes - 264
Allocation of restricted cash (6 136) (551)
Non-cash adjustments:
Imputed interest 4 113 4 442
Right of use liability – interest expense 572 430
Depreciation and amortisation 4 744 4 760
Loss on disposal of intangible assets - 938
Net fair value loss/(gains) on put option contracts 10 298 (3 661)
Share-based payment expenses 1 798 7 078
Deposits written off - 143
(Profit)/loss on disposal of leases (460) 78
Provision for IDC (reversal) - (3 649)
Decrease in leave pay accrual (924) -
Decrease in bonus accrual (2 340) -
Effects of exchange rate changes on cash and cash equivalents:
Net foreign exchange losses 3 028 15 048
Changes in working capital:
Trade and other receivables (1 985) (1 050)
Trade and other payables 14 170 5 537
CASH USED IN OPERATIONS (24 580) (42 636)
7. Share capital
R’000 2021 2020
Authorised number of shares
500 000 000 no par value shares 500 000 500 000
Reconciliation of number of shares issued:
Balance at 1 March 117 427 100 135
Issue of shares 81 17 292
BALANCE AT 28/29 FEBRUARY 117 508 117 427
Reconciliation of issued share capital:
Balance at 1 March 452 254 301 277
Issue of shares – ordinary shares issued for cash - 159 746
Issue of shares – share incentive scheme, non-cash 824 -
Share issue costs - (8 769)
BALANCE AT 28/29 FEBRUARY 453 078 452 254
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
7. Share capital (continued)
In September 2020 shares granted to a director and member of senior management pursuant to the Group
Bonus Share Scheme vested. This resulted in the issuance of 80 648 shares on 30 October 2020 for no
consideration.
During the prior year Renergen issued 12.5 million shares at AU$0.80 (R8.25) per share on 6 June 2019 under
specific share issue as part of its initial public offering on the ASX. An additional 4.8 million shares were issued
under general share issue on the ASX in January 2020 at AU$1.20 (R11.83) per share. These offerings raised
R103.1 million and R56.8 million, respectively.
8. Equity settled share-based payments
On 1 October 2017 Renergen granted shares to senior management and an Executive Director pursuant to
the approval of the Bonus Share Scheme by shareholders on 29 September 2017. Further shares were
granted to executive directors, senior management and general employees on 6 July 2018, 17 May 2019 and
1 March 2020. All shares vest after 3 years of employment with the Group and there are no other vesting
conditions. Shares granted to participants which have not yet vested lapse if the director or employee leaves
the Group. Shares granted to senior management and an executive director on 1 October 2017 vested on 30
September 2020.
The fair value per share on grant date relates to the 30-day volume weighted average price per share on the
JSE on the grant date (VWAP).
Reconciliation of shares granted:
2021 2020
Value of Value of
Number Fair Value shares at Number Fair value shares at
of shares per share grant of shares of shares grant
granted at grant date granted at grant date
(‘000) date (R’000) (‘000) date (R’000)
At 1 March 277 2 479 108 1 095
Granted during the year 252 13.55 3 411 169 8.17 1 384
Executive Directors 195 13.55 2 648 144 8.17 1 176
Senior management 53 13.55 715 18 8.17 148
General employees 4 13.55 48 7 8.17 60
Vested during the year (81) 10.22 (824) - - -
Executive Directors (59) 10.22 (600) - - -
Senior management (22) 10.22 (224) - - -
Lapsed during the year (15) 13.34 (202) - - -
Senior management (11) 13.55 (147) - - -
General employees (4) 12.81 (55) - - -
AT 28/29 FEBRUARY 433 4 864 277 2 479
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
8. Equity settled share-based payments (continued)
2021
Balance at the beginning of the year 7 526
Bonus share scheme - share-based payments expense for Renergen participants charged to
profit or loss 1 007
Executive Directors 921
Senior management 86
General employees -
Bonus share scheme - share-based payments expense for Tetra4 participants allocated to the
investment in subsidiary as an equity contribution 791
Executive Directors 463
Senior management 310
General employees 18
Share options - share-based payments expense charged to profit or loss 52
Lead advisor -
Corporate advisor -
Non-executive Director 52
Shares which lapsed during the year (52)
Vested shares issued during the year (824)
Balance at the end of the year 8 500
9. Borrowings
R’000 2021 2020
Held at amortised cost:
U.S International Development Finance Corporation (“DFC”) 491 241 312 242
Molopo Energy Limited (“Molopo”) 43 052 38 940
TOTAL 534 293 351 182
The movement in borrowings for the year under review is outlined below:
Non-cash
movements:
imputed
interest
expense
and foreign At 28
2021 At 1 March exchange February
R’000 2020 Additions losses 2021
Molopo 38 940 - 4 1121 43 052
DFC 312 242 216 282 (37 283)2 491 241
Total 352 182 216 282 (33 171) 534 293
1- Imputed interest 2- foreign exchange losses
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
9. Borrowings (continued)
Molopo
Tetra4 entered into a R50.0 million loan agreement on 1 May 2013. This loan was part of the conditions of
the sale of shares in Tetra4 from Molopo Energy Limited to Windfall Energy Proprietary Limited. The loan
agreement is for the period from inception of the loan on 1 May 2013 until 31 December 2022. During this
period, the loan is unsecured and interest free. The loan can only be repaid when Tetra4 declares a dividend,
utilising a maximum of 36% of the distributable profits to pay the dividend. If by 31 December 2022 the loan
is not repaid, the loan shall bear interest at prime overdraft plus 2% and will have no repayment terms. The
shareholder loan can only be repaid after the loan from Molopo Energy Limited have been settled.
The loan is discounted to present value for the period that it is interest free, at a discount rate which is equal
to the prime lending rate plus 2% which at 28 February 2021 is 9.00% (prime lending rate of 7.00% plus 2%).
The imputed interest expense is included in profit and loss. The fair value of the loan amount outstanding at
28 February 2021 amounts to R43.1 million.
DFC
Tetra4 entered into a US$40.0 million finance agreement with DFC on 20 August 2019. The first draw down
of US$20.0 million took place in September 2019 and the second draw down of US$12.5 million in June 2020.
Tetra4 shall repay the loan in approximately equal quarterly instalments on each payment date beginning 1
August 2022 and ending no later than the thirty-seventh payment date, 15 August 2031.The first draw down
of the loan (US$20.0 million) bears a coupon rate of 2.11% and the second drawdown (US$ 12.5 million)
bears a coupon rate of 1.49%. The loan is secured.
Interest
On each payment date, beginning on the payment date immediately following the first closing date (15
November 2019) and ending on the loan maturity date (15 August 2031), Tetra4 shall pay to the order of DFC
interest in arrears on the daily outstanding principal balance of each note, less any amount of principal on
which interest is payable at the default rate accrued at a rate per annum, equal to the sum of the following
DFC note interest rate of 2.11% on the first drawdown and 1.49% on the second drawdown.
Commitment fee
During the commitment period Tetra4 shall pay to DFC, in arrears, on each payment date beginning on the
first payment date after the date of this agreement and on the last day of the commitment period, or, if
earlier, the date this agreement is terminated, a commitment fee accruing on a daily basis at the rate of one
half of one percent (0.50%) per annum, calculated for each day during the commitment period, on the
undisbursed and uncancelled amount of the basic commitment
Facility fees
The Tetra4 shall pay DFC a facility fee in the amount of $350 000 less any unused balance of the retainer fee
paid by Tetra4, on or prior to the first disbursement.
Maintenance fee
Tetra4 shall pay DFC an annual maintenance fee to cover DFC's administrative costs and expenses (including,
but not limited to systems infrastructure costs) in the amount of $35 000, payable to DFC on the first
anniversary of the payment date following the first closing date and on each anniversary of such payment
date for so long as any portion of the loan remains outstanding.
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
10. Deferred taxation
At 1 Recognised At 28 Deferred
2021 March in profit or February Deferred tax
R’000 2020 loss 2021 tax asset liability
Property, plant and equipment (4 041) (36 136) (40 177) - (40 177)
Intangible assets (2 123) - (2 123) - (2 123)
Put option contracts (69) 69 - - -
Provisions - 3 165 3 165 3 165 -
Unutilised tax losses 33 036 41 075 74 111 74 111 -
TOTAL 26 803 8 173 34 976 77 276 (42 300)
As at 28 February 2021 the Group’s estimated tax losses were R603.0 million (2020: R425 million). These tax
losses do not expire unless the entity concerned ceases to operate for a period longer than a year.
11. Segmental analysis
The Group has identified reportable segments that are used by the Group Executive Committee (chief
operating decision-maker) to make key operating decisions, allocate resources and assess performance. For
management purposes the Group is organised and analysed as follows:
Corporate head office
Corporate head office is a segment where all investment decisions are made. Renergen is an investment
holding company focussed on investing in prospective green projects.
Tetra4
Tetra4 explores for, develops and sells compressed natural gas ("CNG") to the South African market. It
operates in the Gauteng Province in Johannesburg, Free State Province in the towns of Virginia and Welkom
and Mpumalanga Province in the town of Evander.
The analysis of reportable segments as at 28 February 2021 is set out below:
2021 Corporate
R’000 Head Office Tetra4 Total Eliminations Consolidated
Revenue 16 442 1 925 18 367 (16 442) 1 925
External - 1 925 1 925 - 1 925
Inter-segmental 16 442 - 16 442 (16 442) -
Depreciation and amortisation (1 572) (3 173) (4 745) - (4 745)
Interest income 621 51 672 - 672
Imputed interest - (4 113) (4 113) - (4 113)
Interest expense (246) (332) (578) - (578)
Taxation 1 324 6 848 8 172 - 8 172
PROFIT/(LOSS) FOR THE YEAR 4 167 (46 787) (42 620) - (42 620)
TOTAL ASSETS 1 026 538 774 202 1 800 740 (1 020 378) 780 362
TOTAL LIABILITIES (1 353) (968 376) (969 729) 395 775 (573 954)
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
11. Segmental analysis (continued)
2020 Corporate
R’000 Head Office Tetra4 Total Eliminations Consolidated
Revenue 21 129 2 635 23 764 (21 129) 2 635
External - 2 635 2 635 - 2 635
Inter-segmental 21 129 - 21 129 (21 129) -
(4 760)
Depreciation and amortisation (1 963) (2 797) (4 760) -
Impairment (938) - (938) - (938)
Interest income (3 340) (2 012) (5 352) - (5 352)
Imputed interest - (4 442) (4 442) - (4 442)
Interest expense (883) - (883) - (883)
Taxation 732 13 927 14 659 - 14 659
LOSS FOR THE YEAR (15 642) (36 977) (52 619) - (52 619)
TOTAL ASSETS 1 030 938 590 272 1 621 210 (994 719) 626 491
TOTAL LIABILITIES 11 727 738 441 750 168 (370 907) 379 261
During the year ended 28 February 2021, R1.9 million or 100% (2020: R2.6 million or 100%) of the Group's
revenue depended on the sales of CNG to one customer. This revenue is reported under the Tetra4 operating
segment. All of the Group’s revenue from contracts with customers relates to the sale of CNG.
Inter-segment revenues are eliminated upon consolidation and are reflected in the ‘eliminations’ column.
The Group’s revenue is attributable to the sale of CNG. Intersegment revenue which has been eliminated
relates to management fees charged to Tetra4.
12. Loss per share
2021 2020
Basic (cents) (36.29) (47.92)
Diluted (cents) (36.29) (47.92)
Loss attributed to equity holders of the Company used in the calculation of basic (42 620) (52 619)
and diluted loss per share (R’000)
Weighted average number of ordinary shares used in the calculation of basic loss 117 427 109 799
per share: (000’s)
Issued shares at the beginning of the year (000’s) 117 427 100 135
Effect of shares issued during the year (weighted) (‘000s) - 9 664
Add: Dilutive share options 27 -
Weighted average number of ordinary shares used in the calculation of diluted
loss per share (000’s) 117 454 109 799
Headline loss per share
Basic (cents) (36.29) (47.31)
Diluted (cents) (36.29) (47.31)
Reconciliation of headline loss
Loss attributed to equity holders of the Company (R’000) (42 620) (52 619)
Loss on disposal of assets (R’000) - 938
Tax effects on loss on disposal of assets (R’000) - (263)
Headline loss (R’000) (42 620) (51 944)
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
13. Contingent liabilities and commitments
Contingent liabilities
There are no contingent liabilities in the annual financial statements for 28 February 2021 (2020: nil).
Commitments
Committed but
Spent to date not spent Total approved
Capital equipment 321.6 207.5 529.1
TOTAL 321.6 207.5 529.1
The Board approved total project costs amounting to R529.1 million relating to the construction of the
Virginia Gas Plant. As at the end of the reporting period the Group had incurred construction and drilling
costs as disclosed above and had R207.5 million committed under various contracts.
14. Events after the reporting period
Successful drilling campaign
On 9 March 2021, the Company announced that its wild card well P007 was successful. The success of P007
is very significant, as the well is in an area outside the primary focus area for reserves to be exploited in Phase
1 development (which is currently under construction), but importantly, it is in close proximity to the Phase
1 gas gathering system. Shortly thereafter the Company announced on 11 March that the redrilling of a
previously abandoned well MDR1 was successful. The gas flow initially recorded at 86 000 standard cubic
feet per day has slowly increased up to 160 000 standard cubic feet day as the loss circulation material has
dried up and reduced friction in the wellbore. The well is important as it is located 600 metres from the New
Plant under construction, and it demonstrates that the well spacing can be significantly reduced without
impacting other wells and leads to a more efficient drilling campaign for future expansion.
Exceptional helium concentrations
On 29 March 2021, Renergen obtained laboratory results on the helium concentrations from recently drilled
wells P007 and MDR1 for the wells mentioned above). MDR1 has returned a helium concentration of 3.15%,
and wildcard well P007 a concentration of 4.38%.
Completion of 5th project milestone
On 1 April 2021, the Company announced that it had timeously completed the fifth major milestone at the
Virginia Gas Project, as the Company works towards the commencement of production in 2021. The
milestone includes the shipment of the following equipment from China to South Africa:
- EAG heater, LN2 vaporiser, BOG heater, LNG vaporiser, and electrical control equipment;
- Cryogenic vacuum jacketed piping;
- LNG/LHe process plant compressor modules; and
- LNG bulk storage tanks."
Conclusion of a helium sales agreement
On 12 April 2021, the Company announced that it had concluded its first helium sales agreement with a
global tier-one automotive supplier in the Company's first "Direct-to-Customer" helium deal with iSi
Automotive. The landmark transaction will see helium from Phase 2 placed directly with the customer
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS (continued)
14. Events after the reporting period (continued)
through the agreement and is one of the key contracts underpinning the Phase 2 development at the Virginia
Gas Project ("Virginia").
Sales of the first 110 Cryo-VaccTM units to DPD Laser
The Company announced that it had have entered into an agreement for the manufacture and purchase of
the first 110 Cryo-VaccTM cases, following the launch of Renergen's Cryo-VaccTM storage solution (see ASX
announcement dated 15 February 2021), for the movement of vaccines and other biologics at ultra-cold
temperatures. The importance of this order is that it signifies that the technology works, and it demonstrates
Renergen's ability to think out the box, innovate and build out scalable solutions that will ultimately
complement its core business offering, which is the production, sales and marketing of both liquid helium
and liquid natural gas.
Changes in directors
On 31 March 2021 Fulufhedzani Ravele resigned with immediate effect from her position as Financial
Director of the Company.
On 1 May 2021 Brian Harvery was appointed as the new CFO of Renergen.
The Directors are not aware of any other material events that occurred after the reporting period and up to
the date of this report.
15. COVID-19
South Africa moved to alert Level 1 of the lockdown with effect from 20 September 2020. This move
recognises that the levels of COVID-19 are relatively low and there is sufficient capacity in the country’s
health system to manage the current COVID-19 related health care needs. Staff members from both the
Johannesburg and Virginia offices have now returned to working at the office under strict COVID-19
guidelines. As of the date of this report management have assessed that COVID-19 has resulted in delays for
the original forecasted commissioning date for the Virginia Gas Project. However, the project is on track to
become operational in Q4 2021. As the world enters the third wave of the global COVID-19 pandemic, the
Group continues to monitor this area very closely as the impact from lockdowns and global supply
interruptions can still disrupt the Group’s activities. Management will continue to monitor the impact of
COVID-19 on the business and responses in place to mitigate any risks that may arise.
16. Going concern
The consolidated and separate financial statements have been prepared assuming the Group and Company
will continue as going concerns. This contemplates the realisation of assets and settlement of liabilities in
the normal course of business during the assessment period. The Directors have reviewed the Group's
forecasts for the next twelve months and are satisfied that the Group has adequate financial resources, and
access to capital and borrowing facilities to continue operations in the normal course of business for the
foreseeable future. In reaching this conclusion the Directors’ have also considered developments with
COVID-19 which had a minimal impact on the Group and its operations during the year under review.
Johannesburg
30 April 2021
Authorised by: Stefano Marani
Chief Executive Officer
Designated Advisor
PSG Capital
For Australian Investors & Media, contact Citadel-MAGNUS
Cameron Gilenko, 0466 984 953
For South African Investors & Media, contact us on
info@renergen.co.za
+2710 045 6007
www.renergen.co.za
Date: 30-04-2021 04:45:00
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