Wrap Text
Interim Financial Report for the half year ended 31 December 2016
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
(“Resource Generation” or the “Company”)
Interim Financial Report for the half year ended 31 December 2016
Contents Page
Directors' report 2
Auditor's independence declaration 4
Interim financial report
Condensed consolidated statement of profit or loss and other 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
Directors' declaration 13
Independent auditor's review report to members 14
Supplementary information - presentation of financial information in South African Rand 16
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 2016 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 and the ASX Listing Rules.
RESOURCE GENERATION LIMITED
Directors' report
The Board of Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Resource
Generation Limited (Resgen or the Company) and the entities it controlled for the half year ended 31 December 2016.
1. Directors
The following persons were Directors of Resource Generation Limited at the date of this report:
Length of service
Mr D Gately Chairman 1.25 years
Mr L Xate Deputy Chairman 1.25 years
Mr R Croll Non-Executive Director 1.25 years
MrC Gilligan Non-Executive Director 1.25 years
Mr L Molotsane Non-Executive Director 1.25 years
Dr K Sebati Non-Executive Director 1.25 years
2. Principal activities
During the half year the principal continuing activities of the Group consisted of the development of the Boikarabelo Coal Mine in the
Waterberg region of South Africa .
3. Review of operations
During the half year ended 31 December 2016 the Group recorded a net loss of $1.2 million (2015: $8.1 million loss). The reduction
in the net loss from the comparative period was principally due to an appreciation in ZAR against the US$ foreign exchange rate.
The net loss for the half year to 31 December 2016 of $1.2 million includes administrative and corporate expenses of $2.0 million,
employee expenses of $1.4 million and an unrealised foreign exchange gain of $2.2 million.
Negotiations with various parties including a club of potential financiers to provide project finance for the construction of the
Boikarabelo Coal Mine continued during the period. Commercial terms were agreed with the club of financiers in July 2016.
Satisfactory progress towards financial close is being made but is slow due to the complexities associated with project finance . It is
proposed that if this facility proceeds, the existing loan from Noble Group will become part of the above facility .
Expectations are that the project finance will provide all required remaining funding for the mine construction. Consequently , if the
proposed facility is made available, the Company does not envisage the need for an associated equity raising.
While this protracted process is on-going, the Company continues to explore alternate debt funding arrangements to maximise the
chance of finalising the successful development of the Boikarabelo Coal Mine.
Work continued at the Boikarabelo Coal Mine during the last six months of the year in order to ensure project readiness for the
mobilisation of the EPC contractors. In parallel, significant progress has been made towards completion of the material contracts
with inter alia Transnet Freight Rail (logistics), Sedgman (CHPP and O&M contracts) and Stefanutti Stock Mining Services (mining
contract) .All these contracts are conditions precedent to financial close of funding with the Financing Syndicate. Completion of the
oroiect fundina continues to be the Comoanv's hiahest orioritv.
Page 2
RESOURCE GENERATION LIMITED
Directors' report (continued)
The Coal Resources and Coal Reserves estimates for Boikarabelo Coal Mine have been updated at 31 December 2016 in
accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves . This update of
the Coal Resources and Coal Reserves estimates relate specifically to the Ledjadja #1 and Ledjadja #3 project areas where an
optimised mine design has now been completed.These two project areas make up 27% of Resgen's Coal Resources and 46% of
Resgen's Coal Reserves.
Resgen has previously secured export offtake contracts and has developed a dual export/domestic business model intending to
service both export customers and domestic power stations . This model has resulted in a meaningful increase in the Net Present
Value and Internal Rate of Return of the project. The previously announced 2010 estimated Coal Resources and Coal Reserves was
based on a single low-quality product for sale to domestic power stations .
4. Dividends
No dividends were paid or proposed to be paid to members during the financial half year (2015: nil).
5. Events occurring after the balance sheet date
An agreement for additional funding of US$8.4 million from Noble was signed on 14 March 2017. The first drawdown is expected to
be before the end of March 2017 and repayments under the facility have been deferred until September 2017.
6. 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.
7. Rounding of amounts
The Company is a company of the kind referred to in ASIC Corporations (Rounding in Financials/Directors' Reports) Instrument
2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the Directors' report and the half
year financial report are rounded off to the nearest thousand dollars , unless otherwise indicated .
This report is made in accordance with a resolution of the Directors , pursuant to Section 306(3) of the Corporations Act 2001.
On behalf of the Directors
ce t' r
---"1
D Gately
Chairman
Brisbane
14 March 2017
Page 3
Deloitte. Deloitte Touche Tohmatsu
ABN 74 490 121 060
Riverside Centre
Level26
123 Eagle Street
Brisbane QLD 4000
GPO Box 1463
Brisbane QLD 4001 Australia
Tel: +61 (0) 7 3308 7000
Fax: +61 (0) 7 3308 7001
www.deloitte.com.au
The Directors
Resource Generation Limited
Level I , Station Street,
Jndooroopilly,
QLD 4068
14 March 20 1 7
Dear Board Memb ers
Resource Generation Limited
In accordance with section 307C of the Corporations Act 2001, Iam pleased to prov ide the
following declaration of independence to the directors of Resource Generat ion Limited.
As lead audit partn er for the review of the financia l statements of Resource Generation
Limited for the half-year ended 3 1 December 2016, I declare that to the best of my
knowledge and bel ief, there have been no contravent ions of:
(i) the auditor independ ence requirements of the Corporations Act 2001 in relation
to the review ; and
(ii) any applicable code of professi onal condu ct in relation to the review.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Matthew Donaldsoif'
Partner
Chartered Accountants
Liability limited by a sch eme approved under Professional Standard s Legislation.
Member ofDel oitte Tou che Tohmat su Limited
Page4
RESOURCE GENERATION LIMITED
Condensed consolidated statement of profit or loss and other comprehensive income
For the half year ended 31 December 2016
Half year ended
31-Dec-15
31-Dec-16 Restated*
Note $'000 $'000
Revenue from continuing operations 315 164
Administrative, rent and corporate (2,049) (792)
Depreciation of property, plant and equipment (183) (172)
Employee benefits expense (1,379) (2,178)
Finance expenses (3)
Share-based compensation (charge)/credit 4 (138) 1,873
Unrealised foreign exchange movements 4 2,208 (7,010)
Loss before income tax (1,229) (8,115)
Income tax credit
Loss for the half year (1,228) (8,115)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
Exchange gain/(loss) on translation of foreign operations 8 15,504 (17,206)
Total comprehensive income/(loss) for the half year 14,276 (25,321)
Loss is attributable to:
Owners of Resource Generation Limited (1,228) (8,115)
Total comprehensive income/(loss) for the half year is attributable to:
Owners of Resource Generation Limited 14,276 (25,321)
Loss per share
From continuing operations Cents Cents
Basic loss per share (0.21) (1.40)
Diluted loss per share (0.21) (1.40)
Headline loss per share (0.21) (1.40)
*Please refer to Note 3 'Critical accounting estimates and judgements'.
The above condensed consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
PageS
RESOURCE GENERATION LIMITED
Condensed consolidated statement of financial position
As at 31 December 2016
31-Dec-16 30-Jun-16
Note $'000 $'000
Current assets
Cash and cash equivalents 4,517 11,955
Trade and other receivables 210 146
Deposits and prepayments 169 174
4,896 12,275
Non-current assets
Property , plant and equipment 33,772 30,365
Mining tenements and mining development 150,741 128,644
Deposits 2,075 1,859
186,588 160,868
TOTAL ASSETS 191,484 173,143
Current liabilities
Trade and other payables 7,841 6,967
Provisions 271 180
Borrowings 5 6,702 3,887
14,814 11,034
Non-current liabilities
Provisions 2,211 1,983
Borrowings 5 35,296 35,728
Royalties payable 2,170 1,946
39,677 39,657
TOTAL LIABILITIES 54,491 50,691
NET ASSETS 136,993 122,452
Equity
Contributed equity 6 223,622 223,622
Reserves 8 (35,186) (50,955)
Accumulated losses (51,443) (50,215)
TOTAL EQUITY 136,993 122,452
The above condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page 6
RESOURCE GENERATION LIMITED
Condensed consolidated statement of changes in equity
For the half year ended 31 December 2016
Attributable to owners of Resource Generation Limited
Contributed Retained
equity Reserves earnings Total equity
Note $'000 $'000 $'000 $'000
Balance at 1 July 2015 (restated*) 223,622 (11,817) (60,240) 151,565
Loss for the period (8,115) (8,115)
Other comprehensive loss for the period (17,206) (17,206)
Total comprehensive loss for the period (17,206) (8,115) (25,321)
Employee share plan - value of employee services (1,873) (1,873)
(1,873) (1,873)
Balance at 31 December 2015 223,622 (30,896) (68,355) 124,371
Balance at 1 July 2016 223,622 (50,955) (50,215) 122,452
Loss for the period (1,228) (1,228)
Other comprehensive income for the period 15,504 15,504
Total comprehensive income/(loss) for the period 15,504 (1,228) 14,276
Employee share plan - value of employee services 8 265 265
265 265
Balance at 31 December 2016 223,622 (35,186) (51,443) 136,993
*Please refer to Note 3 'Critical accounting estimates and judgements' .
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 2016
Half year ended
31-Dec-16 31-Dec-15
$'000 $'000
Cash flows from operating activities
Payments to suppliers and employees (3,364) (4,609)
Interest received 70 130
lnteresUfinance costs paid (3) (3)
Taxation refund 1
Net cash outflow from operating activities (3,296) (4,482)
Cash flows from investing activities
Payments for property, plant and equipment (118) (650)
Payments for mining tenements and mining development (3,116) (5,170)
Net cash outflow from investing activities (3,234) (5,820)
Cash flows from financing activities
Repayment of borrowings (1,403) (564)
Loan to related party (69)
Net cash outflow from financing activities (1,403) (633)
Net decrease in cash and cash equivalents (7,933) (10,935)
Cash and cash equivalents at the beginning of the half year 11,955 28,551
Effects of exchange rate movements on cash and cash equivalents 495 699
Cash and cash equivalents at the end of the half year 4,517 18,315
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 31December 2016
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 ended 31 December 2016 has been prepared in accordance with AASB 134
Interim Financial Reporting and the Corporations Act 2001.Compliance with AASB 134 ensures compliance with International Financial Reporting
Standard lAS 34 'Interim Financial Reporting'.
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 2016 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 and the ASX Listing Rules.
The interim financialreport has been prepared on the basis of historicalcost 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.
Disclosure surrounding adoption of new or revised Standards
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are
relevant to their operations and effective for the current half-year.
'AASB 2015-1 Annual Improvements to Australian Accounting Standards 2012-2014 Cycle
i
'AASB 2015-2 Disclosure Initative:Amendments to AASB 101
*AASB 2014-4 Clarification of Acceptable Methods of Depreciation and Amor1isation
The Company has reviewed the above Accounting Standards and determined that they have no material impact on the interim financial report for the half
year ended 31 December 2016.
The following new accounting standards are not yet effective but may have an impact on the Group in the financial years commencing 1July 2016 or
i
*AASB 2016-2 Amendments to Australian Accounting Standards ·Disclosure Initative:Amendments to AASB 107
*AASB 9 Financial Instruments 2014
*AASB 15 Revenue from Contracts with Customers
*AASB 2014-5 Amendments to Aust ralian Accounting Standards arising from AASB 15
*AASB 2015-8 Amendments to Australian Accounting Standards- Effective date of AASB 15
*AASB 2016-3 Amendments to Australian Accounting Standards· Clarification to AASB 15
*AASB 2016-5 Amendments to Australian Accounting Standards- Classification and Measurement of Share-based Payment Transactions
*AASB 16 Leases
The Company is in the process of determining the potential impact of adopting the above standards and they have not been applied in the preparation of
the interim financial report for the half year ended 31 December 2016.
(b) Significant accounting policies
The accounting policies and methods of computation adopted in the preparation of the interim financial report are consistent with those adopted and
disclosed in the Company's annual financial report for the year ended 30 June 2016.These accounting policies are consistent with Australian Accounting
Standards and with International Financial Reporting Standards.
The interim financial repor1 comprises the financial statements of Resource Generation Limited and its subsidiaries as at 31 December 2016 ('the
Consolidated Entity").
Going concern
The interim financial report has been prepared on the going concern basis which presumes the realisation of assets and the discharge of liabilities in the
normal course of business for the foreseeable future.
As at 31 December 2016,the Group had net current liabilities of $9.9 million (30 June 2016: $1.2 million net current assets) , made a loss for the half year
of $1.2 million (30 June 2016: $7.7 million for the year) and recorded net cash outflows from operating and investing activities of $6.5 million (30 June
2016:$14 .6 million for the year). The Group has a cash balance at 31 December 2016 of $4.5 million (30 June 2016:$12.0 million).
Page 9
RESOURCE GENERATION LIMITED
Notes to the condensed consolidated financial statements
For the half year ended 31 December 2016
.
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Going concern (continued)
In concluding that the going concern basis is appropriate, a cash flow forecast was prepared for the 2017 calendar year. The forecast assumes the
receipt of additional funding from Noble amounting to US$8.4 million, which is an extension of the existing US$20 million working capital facility . An
agreement for the additional funding has been signed with Noble, with the first tranche expected to be drawn down before the end of March 2017 and
subsequent funding up to US$8.4 million made available until September 2017,when repayments are due to commence.
In addition, the Group's ability to continue as a going concern is dependent on securing project funding for the Boikarabelo Coal Mine.The Directors
continue to pursue a number of project funding options. Whilst the Directors are continuing to work towards achieving financial dose for project funding
by the end of June 2017, as there are a number of conditions to be satisfied before this is achieved,precise times are impossible to predict with certainty.
Assuming financial close occurs at the end of June 2017, construction of the mine would commence immediately thereafter with completion and first
saleable coal production scheduled for the third quarter of 2019.
On the above basis,the Directors believe the Group is a going concern and will be able to pay its debts as and when they fall due and payable.
Notwithstanding this, should the Group not receive the project funding referred to above, there are material uncertainties as to whether the Group will be
able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the
amounts stated in the interim financial report.
The interim financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts
and classification of liabilities that might be necessary should the Group not continue as a going concern.
(c) Income Tax
The Directors have not recognised any deferred tax assets in relation to carry forward unused tax losses. Given the history of operating losses,the
Directors have determined that the most appropriate time to recognise deferred tax assets from carry forward unused tax losses is when the mine
commences production.
.
2 SEGMENT INFORMATIO N
(a) 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 Group 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
i
corporate costs andincludes equity rasings and administration costs.
(b) Primary reporting format
Information regarding these segments is presented below.The accounting of the reportable segments is the same as the Group's accounting policies.
Mining tenements Corporate
Half year 2016
Africa Australia Total
$'000 $'000 $'000
Total segment and consolidated revenue 248 67 315
Loss before income tax (589) (640) (1,229)
Income tax credit 1 1
Loss for the half year (588) (640) (1,228)
Page 10
RESOURCE GENERATION LIMITED
Notes to the condensed consolidated financial statements
For the half year ended 31 December 2016
2.SEGMENT INFORMATION (continued)
Mining tenements Corporate
Half year 2015
Africa Australia Total
$'000 $'000 $'000
Totalsegment and consolidated revenue 136 28 164
Loss before income tax (548) (7,567) (8,115)
Income tax expense
Loss for the half year (548) (7,567) (8,115)
3.CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Restatement of accounts
The comparative 31 December 2015 numbers have been restated in respect of the accounting for foreign exchange on acquisition adjustments as
reported in the statement of profit or loss and other comprehensive income and statement of changes in equity.The Group previously acquired interests
in South African subsidiaries that held exploration licences for the Boikarabelo Coal Mine project. The difference between the net assets of the
subsidiaries acquired and the purchase consideration was recorded as an exploration asset, subsequently reclassified to mining tenements and mining
development assets. Such differences should be treated as assets of the foreign operation and therefore foreign exchange differences arising on
tr::mc::l::dirm nf t h.o P ;: c:c::.otc:: fnr rnnc::nlir/;:" tinn n• •rnnc::.oc:: c::hll hP r nrrl.orl in th.o fnr.oinn r1 1rr.onf'V tr nc:l tinn rllc::,:mfP
4. LOSS FOR THE HALF YEAR Half year ended
31-Dec-16 31-Dec-15
$'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 charge!(credit) 138 (1,873)
Unrealised foreign exchange movements (2,208) 7,010
5.BORROWINGS
31-Dec-16 30-Jun-16
$'000 $'000
Current liabilities·Borrowings (unsecured) 6,702 3,887
6,702 3,887
Non-currentliabilities· Borrowings (unsecured) 35,296 35,728
35,296 35,728
Noble loan
US$20 million was drawn down as an unsecured loan from Noble Resources International Pte ltd in March 2014.Itis repayable in quarterly instalments
of capital and interest over 8 years and has an annual interest rate of 10.75%.The first repayment instalment of the loan is due in September 2017.
EHL loan
EHL Energy (P y) Limited completed the electricity sub-station at the Boikarabelo Coal Mine which connects the mine to the grid. The construction is
subject to a deferred payment plan, with interest payable at the ABSA Bank prime lending rate plus 3%.The loan amounted to ZAR R82.5 million,is
unsecured and repayablein 16 quarterly instalments from November 2015. There were 11quarterly instalments remaining to be paid as at 31 December
2016.
Ledjadja Coal (Ply) ltd is the borrower under both of the above loan facilities. The Company has provided a guarantee to the respective lenders.
6. CONTRIBUTED EQUITY
31-Dec-16 30-Jun- 16 31-Dec-16 30-Jun-16
Shares Shares $'000 $'000
Opening balance 581,380,338 581,380,338 223,622 223,622
Issues of ordinary shares
Closing balance 581,380,338 581,380,338 223,622 223,622
Page 11
RESOURCE GENERATION LIMITED
Notes to the condensed consolidated financial statements
For the half year ended 31 December 2016
7. DEVELOPMENT PARTNERS
31-Dec-16 30-Jun-16
Interest Interest
% %
Waterberg One Coal (Ply) Limited 74 74
Ledjadja Coal (Ply) Limited 74 74
B.RESERVES
31-Dec-16 30-Jun-16
$'000 $'000
Reserves
Other contributed equity 1,085 1,085
Treasury shares (2,317) (2,317)
Share-based payment reserve 971 706
Foreign currency translation reserve (34,925) (50,429)
(35,186) (50,955)
Movements in reserves
Share-based payment reserve
Opening balance 706 20,294
Employee share plan expense/(credit) 138 (1,906)
Employee share plan expense· development cost 127
Transfer to accumulated losses (17,682)
Closing balance 971 706
Foreign currency translation reserve
Opening balance (50.429) (30,879)
Movement 15,504 (19,550)
Closing balance (34,925) (50.429)
Foreign currency translation reserve movement for the current half year relates to a 10% appreciation of the Rand against the Australian Dollar during the
half year ended 31 December 2016 (30 June 2016: 17% depreciation).
9. COMMITMENTS
Capital commitments
The Group has $5.7 million (30 June 2016: $5.4 million) in commitments in respect of the development of the Boikarabelo Coal Mine.
10. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
An agreement for additional funding of US$8.4 million from Noble was signed on 14 March 2017. The first drawdown is expected to be before the end of
March 2017 and repayments under the facility have been deferred until September 2017 .
There are no other matters of significance up to the date of this report that have arisen since 31 December 2016 that has significantly affected, or may
significantly affect, the Group's operations in future years, the results of those operations or the state of affairs in future years.
11. CONTINGENT LIABILITIES
Land acquisition
There is a potential property acquisition of $10.1 million (30 June 2016:$9.0 million) contingent to events subseque nt to the commencement of mine
production.
Page 12
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;and
(b) the financial statements and notes set out on pages 5 to 12 are in accordance with the Corporations Act 2001, including compliance
with accounting standards and giving a true and fair view of the financial position as at 31 December 2016 and of the performance of the
consolidated entity for the half year ended on that date.
This declaration is made in accordance with a resolution of the Directors,pursuant to Section 303(5) of the Corporations Act 2001.
D Gately
Chairman
Brisbane
14 March 2017
Page 13
Deloitte Touche Tohmatsu
Deloitte. ABN 74 490 121 060
Riverside Centre
Level26
123 Eagle Street
Brisbane QLD 4000
GPO Box 1463
Brisbane QLD 4001 Australia
Tel: +61 (0) 7 3308 7000
Fax: +61 (0) 7 3308 7001
www.deloitte.com .au
Independent Auditor's Review Report
to the members of Resource Generation Limited
Report on the Half-Year Financial Report
We have reviewed the accompany ing half-year financial report of Resource Generation Limited,
which comprises the condensed statement of financial position as at 3 I December 2016, and th e
condensed statement of profit or loss and other comprehensive income, the condensed statem ent of
cash flows and the condensed statement of changes in equity for the half-year ended on that date,
notes compr ising a summary of si gnificant accountin g policies and other explanat ory information,
and the directors' declaration of th e consolidated entity compr ising the company and the entiti es it
controlled at the end of the half-year or from tim e to time during th e half-year as set out on pa ges 5
to 13.
Directors' Responsibility for the Half-Year Financial Repor t
The directors of the compan y are respon s ible for the preparation of the half-yea r financial report
that gi ves a true and fair view in accordance with Au stralian Accountin g Standards an d th e
Corporations Act 2001 and for such interna l control as the directors determ ine is necessa ry to
enable the pr eparation of the half-year financial report that gives a true and fa i r v iew and is free
from mat erial misstatement, whether due to fraud or error.
Auditor 's Responsibility
Ou r respon sibility is to express a conclu sion on the half-year financial report based on our rev iew.
We conducted our review in accordan ce with Auditin g Standard on Revi ew Engagem ents ASRE
2410 Review of a Financial Report Performed by the Independ ent Auditor of the Entity, in order to state
whether, on the basis of the procedures described, we have become aware of any matter that makes
us believe that the ha lf-year financia l report is not in accordance with the Corporations Ac t 2001
includin g: giv ing a true and fa ir v iew of the consol idated entity 's financial position as at 31 Decem
ber 201 5 and its performan ce for the half-year ended on that date; and complying with Accountin
g Standard AASB 1 34 Interim Financial Reporting and th e Corporations Regulations 2001. As th e
auditor of Resour ce Gen eration L imited, ASRE 2410 requ ires that we comply w ith th e ethica l
requir ements relevant to the audit of the annu al financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons
responsible for financial and accountin g matters, and apply ing analytica l and other review
procedures. A review is substantially less in scope than an audit conducted in accorda nce with
Australian Aud iting Standard s and consequently does not enable us to obta in assurance that we
would become aware of all significant matters that mi ght be identified in an audit. Accord ingly,
we do not expr ess an audit opinion .
Liability lim ited by a schem e approv ed und er Professional Standard s Legi slation .
Member ofDeloitte Touche Tohmat su Limited .
Page 14
Deloitte.
Auditor's Independence Declaration
In conducting our review, we have complied with the ind ependence requirements of the
Corporations Act 2001 . We confirm that the independence declaration requir ed by th e
Corporations Act 2001, whi ch has been given to the directors of Resource Generati on Limited,
wou ld be in the same terms if gi ven to the directors as at the time of this auditor 's review report.
Conclusion
Based on ou r review, wh ich is not an audit, we have not become aware of any matter that makes us
believe that the half-year financi al report of Resource Gen eration Limited i s not in accordanc e
w ith the Corporations Act 2001, including:
(a) givin g a true and fair view of the consolidated entity 's financ ial position as at 3 1 December
20 16 and of its perform ance for the half-year ended on that date; and
(b) comply ing with Accounting Standard AASB 134 Interim Financial Reporting and the
Corporations Regulations 2001.
Material Uncertainty Related to Going Concern
We draw attention to Note l(b) in the half-year financial report wh ich indicates that the consolidated
entity incurred a loss of$1.2 million (30 June 20 1 6:$7.7 million) and used net cash in operating
and invest in g acti v ities of $6.5 million (30 June 2016: $ 14.6 mill ion) during the hal f- year ended
31 December 2016. These conditions, along with oth er matters as set out in Note l(b), indicate the
existence of a material un certainty that may cast significant doubt about the ability of the
consolidated entity to continu e as a going concern. Our conclu sion is n ot m od ified in respect of this
matter.
DELOITTE TOUCHE TOHMATSU
Matthew Dona ldson
Partner
Chartered Accou ntants
Sydn ey, 14 March 2017
Page 15
RESOURCE GENERAT ION LIMITED
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 Rand (ZAR) because the Boikarabelo Coal 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 to 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-16 Jun-16 Dec-15
Average rate of exchange $A/Rand 10.5407 10.5610 9.8365
Closing rate of exchange $A/Rand 9.8603 10.9930 11.317
Consolidated statements of comprehensive income- ZAR Convenience Translat ion (Supplementary Information)
For the half year ended 31 December 2016
Half year ended
31-Dec-15
31-Dec-16 Restated*
R'OOO R'OOO
Revenue from continuing operations 3,320 1,613
Administration, rent and corporate (21,598) (7,791)
Depreciation of property, plant and equipment (1,929) (1,692)
Employee benefits expense (14,536) (21,424)
Finance expenses (32)
Share-based compensation (charge)/cre dit (1,455) 18,424
Unrealised foreign exchange movements 23,274 (68,954)
Loss before income tax (12,956) (79,824)
Income tax credit 11
Loss for the half year (12,945) (79,824)
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
Exchange gain/(loss) on translation of foreign operations 163,423 (169,247)
Total comprehensive income/(loss) for the half year 150,478 (249,071)
Loss is attributable to:
Owners of Resource Generation Limited (12,945) (79,824)
Total comprehensive income/(loss) for the year is attributable to:
Owners of Resource Generation Limited 150,478 (249,071)
Loss per share Rand Rand
From continuing operations
Basic loss per share (2.2) (13.8)
Diluted loss per share (2.2) (13.8)
Headline loss per share (2.2) (13.8)
*Please refer to Note 3 'Critical accounting estimates and judgements' .
RESOURCE GENERAT ION LIMITED Page 16
RESOURCE GENERATION LIMITED
Consolidated statements of financial position • ZAR Convenience Translation (Supplementary Information)
As at 31 December 2016
31-Dec-16 30-Jun-16
R'OOO R'OOO
Current assets
Cash and cash equivalents 44,539 131,421
Trade and other receivables 2,071 1,605
Deposits and prepayments 1,666 1,913
48,276 134,939
Non-current assets
Property , plant and equipment 333,002 333,802
Mining tenements and mining development 1,486,348 1,414,184
Deposits 20,460 20,436
1,839,810 1,768,422
TOTAL ASSETS 1,888,086 1,903,361
Current liabilities
Trade and other payables 77,311 76,588
Provisions 2,672 1,979
Borrowings 66,086 42,730
146,069 121,297
Non-current liabilities
Provisions 21,801 21,799
Borrowings 348,031 392,758
Royalties payable 21,397 21,392
391,229 435,949
TOTAL LIABILITIES 537,298 557,246
NET ASSETS 1,350,788 1,346,115
Equity
Contributed equity 2,204,978 2,229,377
Reserves (346,944) (331,249)
Accumulated losses (507,246) (552,013)
TOTAL EQUITY 1,350,788 1,346,115
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RESOURCE GENERATION LIMITED
Consolidated statement of cash flows· ZAR Convenience Translation (Supplementary Information)
For the half year ended 31 December 2016
Half year ended
31-Dec-16 31-Dec-15
R'OOO R'OOO
Cash flows from operating activities
Payments to suppliers and employees (35,459) (45,336)
Interest received 738 1,279
Interest paid (32) (30)
Taxation refund 11
Net cash outflow from operating activities (34,742) (44,087)
Cash flows from investing activities
Payments for property, plant and equipment (1,244) (6,393)
Payments for mining tenements and mining development (32,845) (50,855)
Net cash outflow from investing activities (34,089) (57,248)
Cash flows from financing activities
Repayment of borrowings (14,789) (5,548)
Loan to related party (679)
Net cash outflow from financing activities (14,789) (6,227)
Net decrease in cash and cash equivalents (83,620) (107,562)
Cash and cash equivalents at the beginning of the half year 267 ,609 267,609
Effects of exchange rate movements on cash and cash equivalents (139,450) 47,224
Cash and cash equivalents at the end of the half year 44,539 207,271
JSE Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd
RESOURCE GENERATION LIMITED
Page 18
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