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Condensed Consolidated Interim Results for the Six Months Ended 31 August 2018
RENERGEN LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2014/195093/06)
Share code: REN ISIN: ZAE000202610
(“Renergen” or “the Company” or “the Group”)
CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2018
Key Features
Holder of the first and only onshore petroleum production right in South Africa
Approximately 187,000 hectares of production right area, with significant additional exploration right
area
Proven reserves with significant concentrations of helium
New gas sales agreements in place with customers, including Anheuser-Busch InBev, KAP Industrial,
and Linde Global Helium. Agreements expected to start translating into gas revenue in the 2020
financial year with CNG sales from Anheuser-Busch InBev, LNG and Helium sales to commence in
2021 financial year.
Debt facility in place from Industrial Development Corporation (IDC) to construct facility
Recently undertaken underwritten rights issue to raise sufficient capital to draw down IDC facility
About Renergen
Renergen is an integrated alternative and renewable energy business that invests in early stage energy projects
across Africa and emerging markets. Through our investment in Tetra4, we are the Group with the first onshore
petroleum production right in South Africa, and the only one with an environmental authorisation to commence full-
scale production.
COMMENTARY
The environment for this last financial period was incredibly volatile both in financial markets as well as politically.
Most notably for South Africans however was the price of fuel at the pump, which strengthened the business case
for using natural gas as a cheaper alternative to more expensive liquid fuels. The added pressure on corporate
sustainability and more stringent climate change policies has also led to increased interest in customers moving away
from traditional fossil fuels over to cleaner forms of fuel such as natural gas.
Helium markets suffered similar levels of volatility, with the US Bureau of Land Management announcing the last
auction of crude helium which saw prices soar over 135% from last year’s auction. Helium shortages are expected
to persist for several years to come, which has placed Renergen in an ideal position to capitalise on its incredibly rich
helium concentrations when the plant becomes operational.
Renergen announced its intention to raise funds from the capital markets at the end of 2017 in order to commence
construction of the Liquid Natural Gas (LNG) and liquid helium plants. In light of domestic investor uncertainty owing
to the fluid political situation, obtaining the funding proved challenging and took longer than expected, which will lead
to delays in the main plant becoming operational. The Group however announced its underwritten rights issue for
R125 million, which surpasses the remaining condition to draw down on the IDC facility and therefore to commence
placing orders on equipment and suppliers.
The Group also announced its intention to look towards listing on the Australian Stock Exchange (ASX) in 2019,
which the Board feels will add greatly to the liquidity in the share given the ASX investor base’s familiarity with oil and
gas.
Operational overview
The compressed natural gas station has now operated for over 885 injury free days, as well as having no major
technical incidents causing the plant to shut down over similar period. We estimate that the buses running on natural
gas at the Megabus operation have saved in excess of 2.1 million kgs of carbon-dioxide emissions, proving the case
for sustainability and value for money for the operator.
Email investor queries to investorrelations@renergen.co.za.
Financial review
Headline loss per share improved from 21.15 cents to 19.43 cents
Revenue increased by 22.7% to R1.8 million (August 2017: R1.4 million). The increase is as a result of a higher
diesel price following a weaker Rand and higher oil prices.
Cost of sales has decreased by 12.6% to R1.6 million (August 2017: R1.9 million) as a result of improved cost
efficiencies.
82.7% more cash was utilised in operations compared to August 2017. This is mostly attributable to getting ready
for the planned pipeline construction.
R4.8 million spent on plant, machinery and equipment on engineering of Tetra4’s Virginia operating plant
expansion
R1.9 million spent on gas exploration
Changes to the Board of Directors
The Board welcomes Francois Olivier to the Board as a Non-Executive Director
Francois Olivier is a portfolio manager at Mazi Capital. He has 18 years of investment research and portfolio
management experience, six years of which were spent in the USA. He is a Chartered Accountant and CFA Charter
holder.
We believe this appointment adds a new dimension to our Board and will aid the Executive team in developing the
Group strategy in order to unlock returns for all of our shareholders.
Other than the change mentioned above, there are no other changes to the board of directors.
Condensed Consolidated Statement of financial position
The statement of financial position of the Group as at 31 August 2018 are set out below:
Reviewed Unaudited Audited
28 February
Figures in R'000 Notes 31 August 2018 31 August 2017 2018
Assets
Non - Current
Assets
Property Plant and
Equipment 35 853 32 732 32 615
Intangible Assets 7 67 765 76 595 65 838
Deferred tax asset 10 824 6 350 8 671
Restricted cash 10 1 875 - 1 632
Total non-current 115
assets 116 317 677 108 756
Current Assets
Trade and other
receivables 11 3 084 3 928 2 459
Cash and cash
equivalents 9 6 259 4 139 3 037
Total current assets 9 343 8 067 5 496
Total Assets 125 660 123 744 114 252
Equity and
Liabilities
Equity
Stated capital 182 601 147 531 161 065
(59
Accumulated loss (96 239) 286) (80 231)
Foreign currency
translation reserve - 4 707 -
Share based
payment reserve 13 268 - 114
Equity attributable
to parent 86 630 92 952 80 948
Non-controlling
interest (13 744) (11 029) (12 285)
Total Equity 72 886 81 923 68 663
Liabilities
Non-Current
Liabilities
Other financial
liabilities 15 32 476 28 753 30 545
Finance lease
obligation 313 - 511
Provisions 3 100 3 100 3 100
Total non-current
liabilities 35 889 31 853 34 156
Current Liabilities
Trade and other
payables 14 16 503 9 968 11 167
Finance lease
obligation 382 - 266
Total Current
Liabilities 16 885 9 968 11 433
Total Liabilities 52 774 41 821 45 589
Total Equity and
Liabilities 125 660 123 744 114 252
Net asset value per
share (cents) 87.32 103.16 84.73
Tangible net asset
value per share
(cents) 6.14 6.71 3.49
Condensed Consolidated Statement of profit or loss and other comprehensive income
The statement of profit or loss and other comprehensive income of the Group for the reviewed six- month period
ended 31 August 2018 are set out below:
Reviewed Unaudited Audited
28 February
Figures in R'000 Notes 31 August 2018 31 August 2017 2018
Revenue 5 1 753 1 429 2 885
Cost of sales 6 (1 623) (1 857) (3 483)
Gross profit / (loss) 130 (428) (598)
Other income 691 23 59
Share - based payments 13 (154) - (114)
Impairment loss - - (12 245)
Operating expenses 8 (18 441) (16 694) (31 912)
Profit on disposal of business - - 4 708
Operating loss (17 774) (17 099) (40 102)
Interest Income 124 222 632
Imputed interest expense (1 931) (1 740) (3 532)
Interest expense (39) - (35)
Total loss before tax (19 620) (18 617) (43 037)
Taxation 2 153 115 2 436
Total loss after tax (17 467) (18 502) (40 601)
Other comprehensive income/
expenditure -
Items that may be reclassified to
profit or loss
Foreign currency translation
gain - 1 318 1 348
Foreign currency reserve
realised on disposal of business
– transfer to other
comprehensive income - - (4 737)
Total Comprehensive loss for
the period (17 467) (17 184) (43 990)
Total loss attributable to:
Owners of the parent (16 008) (16 735) (37 680)
Non-controlling interest (1 459) (1 767) (2 921)
(17 467) (18 502) (40 601)
Total comprehensive loss
attributable to:
Owners of the parent (16 008) (15 417) (41 069)
Non- controlling interest (1 459) (1 767) (2 921)
(17 467) (17 184) (43 990)
Loss per share
Basic loss per share (cents) (19.43) (21.15) (47.10)
Diluted loss per ordinary share
(cents) (19.43) (21.15) (47.05)
Weighted average number of
shares (‘000) 82 372 79 135 80 002
Number of shares in issue
(‘000) 83 469 79 413 81 035
Headline loss per share
Basic headline loss per share
(cents) (19.43) (21.15) (37.68)
Diluted headline loss per share
(cents) (19.43) (21.15) (37.64)
Weighted average number of
shares (‘000) 82 372 79 135 80 002
Number of shares in issue
(‘000) 83 469 79 413 81 035
Condensed Consolidated Statement of Changes in Equity
The statement of changes in equity of the Group for the reviewed six- month period ended 31 August 2018 are set
out below:
Foreign Share Equity
Currency based Attribut Non-
Stated Accumulated Translatio payment able to Controllin Total
Figures in R'000 Capital Loss n Reserve reserve parent g interest Equity
Balance at 01
March 2017 137 585 (42 551) 3 389 - 98 423 (9 262) 89 161
Share issue 10 000 - - - 10 000 - 10 000
Share issue -
costs (54) - - (54) - (54)
Other
comprehensive
income - - 1 318 - 1 318 - 1 318
Total loss for the (18
period - (16 735) - - (16 735) (1 767) 502)
Balance at 31
August 2017 147 531 (59 286) 4 707 92 952 (11 029) 81 923
Share issue 16 000 - - - 16 000 - 16 000
Share issue
costs (2 466) - - - (2 466) - (2 466)
Share based
payment reserve - - - 114 114 - 114
Total loss for the (22 099
period - (20 945) - - (20 945) (1 154) )
Foreign currency
reserve realised
on disposal of
business-
recycled to profit
or loss - - (4 707) - (4 707) - (4 707)
Non- controlling
interest at
disposal -Mega - - - - - (102) (102)
Power
Renewables
Balance at 28
February 2018 161 065 (80 231) - 114 80 948 (12 285) 68 663
Share issue 21 760 - - - 21 760 - 21 760
Share issue
costs (224) - - - (224) - (224)
Share based
payment reserve - - - 154 154 - 154
Total loss for the (17
period - (16 008) - - (16 008) (1 459) 467)
Balance at 31
August 2018 182 601 (96 239) - 268 86 630 (13 744) 72 886
Condensed Consolidated Statement of Cash Flows
The statement of cash flow of the Group for the reviewed six- month period ended 31 August 2018 are set out
below:
Reviewed Unaudited Audited
28 February
Figures in R'000 31 August 2018 31 August 2017 2018
Cash flows from operating
activities
(19
Cash used in operations (11 566) (6 330) 036)
Interest Income 124 222 632
Interest expense (39) - (35)
Net cash outflow from (18
operating activities (11 481) (6 108) 439)
Acquisition of property, plant
and equipment (4 823) (12 292) (13 662)
Acquisition of intangible
assets (1 927) (72) (199)
Net cash outflow from
investing activities (6 750) (12 364) (13 861)
Net proceeds on share issue 21 536 9 946 23 480
Finance lease capital re-
payments (83) - (210)
Finance lease proceeds - - 768
Increase of environmental
rehabilitation guarantee - 264 -
Net cash inflow from
financing activities 21 453 10 210 24 038
Total cash movement for
the period 3 222 (8 262) (8 262)
Cash at the beginning of the
period 3 037 12 401 11 299
Total cash at the end of the
period 6 259 4 139 3 037
NOTES TO THE FINANCIAL STATEMENTS
The notes to the financial information as at 31 August 2018 are set out below:
1. Basis of preparation
The reviewed condensed interim financial statements are prepared in accordance with the Listings Requirements
of JSE Limited (“Listings Requirements”) for interim reports, and the requirements of the Companies Act (Act 71
of 2008 as amended) applicable to condensed financial statements. The Listings Requirements require interim
reports to be prepared in accordance with International Financial Reporting Standards, IAS 34 Interim Financial
Reporting and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the
Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council. The board of
directors of Renergen Limited (“the Board”) takes full responsibility for the preparation of this interim report. The
condensed financial statements comprise the condensed statement of financial position as at 31 August 2018
and the condensed statements of comprehensive income, changes in equity and cash flows for the period ended
31 August 2018. This is the first set of the Group’s financial statements where IFRS 15 and IFRS 9 have been
applied. Changes to significant accounting policies are described in note 4.
These condensed interim financial statements have been reviewed by the Company’s auditors and were prepared
under the supervision of the Chief Financial Officer, Miss F Ravele CA(SA).
AUDITOR’S REPORT
Grant Thornton Johannesburg Partnership, the group’s independent auditor, has reviewed the Condensed
Consolidated Interim Results for the period ended 31 August 2018 and have expressed an unmodified review
conclusion thereon. A copy of the auditor’s review report is available for inspection at the company’s registered
office together with the financial information identified in the auditor’s report. The auditor’s review report does not
necessarily report on all the information contained in these financial results. Shareholders are therefore advised
that in order to obtain a full understanding of the nature of the auditor’s engagement they should obtain a copy of
the auditor’s review report together with the accompanying financial information from the company’s registered
office.
The directors take full responsibility for the preparation of these financial results.
2. Accounting policies
All accounting policies applied in these interim financial statements are in terms of IFRS and are consistent with
those applied by the Group in its consolidated financial statements for the year ended 28 February 2018, except
for new standards related to the application of IFRS 15 and IFRS 9, which are described in note 4.
3. Significant Accounting Policies
3.1. Consolidation
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Group and all investees
which are controlled by the Group.
The results of subsidiaries are included in the consolidated financial statements from the effective date of
acquisition to the effective date of disposal.
Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised
separately from the group's interest therein and are recognised within equity. Losses of subsidiaries
attributable to non-controlling interests are allocated to the non-controlling interest even if this results in a
debit balance being recognised for non-controlling interest.
Business combinations
The Group accounts for business combinations using the acquisition method of accounting. The cost of
the business combination is measured as the aggregate of the fair values of assets given, liabilities incurred
or assumed and equity instruments issued. Costs directly attributable to the business combination are
expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and
costs to issue equity which are included in equity. The excess of the consideration transferred over the fair
value of the Group’s share of the identifiable net assets of the subsidiary acquired is recorded as goodwill. If
the consideration transferred is less than the Group’s share of the fair value of the net assets of the subsidiary
acquired, the difference is recognised directly in the statement of comprehensive income. All intergroup
transactions, balances and unrealised gains and losses on transactions between entities of the Group have
been eliminated. When necessary, accounting policies of subsidiaries have been changed to ensure
consistency with the policies adopted by the Group.
3.2. Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment
losses.
Property, plant and equipment is initially measured at cost. Cost includes all of the expenditure which is directly
attributable to the acquisition or construction of the asset.
Expenditure incurred subsequently for major services, additions to or replacements of parts of property, plant
and equipment are capitalised if it is probable that future economic benefits associated with the expenditure will
flow to the Group and the cost can be measured reliably. Day to day servicing costs are included in profit or
loss in the year in which they are incurred.
Depreciation is charged to write off the asset's carrying amount over its estimated useful life to its estimated
residual value, using a method that best reflects the pattern in which the asset's economic benefits are
consumed by the company. Construction assets are not depreciated as they are not ready and available for the
use intended by management. Leased assets are depreciated in a consistent manner over the shorter of their
expected useful lives and the lease term.
The useful lives of items of property, plant and equipment have been assessed as follows:
Item Depreciation method Average useful life
Computer software Straight line 10 years
Furniture and fittings Straight line 6 years
IT equipment Straight line 3 years
Assets under Construction Not applicable Not applicable
Motor vehicles Straight line 5 years
Office equipment Straight line 6 years
Plant and machinery Straight line 10 years
Leasehold improvements- Furniture and fittings Straight line 6 years
Leasehold improvements-Office equipment Straight line 6 years
Finance - Motor vehicle Straight line 5 years
The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting
year. If the expectations differ from previous estimates, the change is accounted for prospectively as a change
in accounting estimate.
The depreciation charge for each year is recognised in profit or loss unless it is included in the carrying amount
of another asset.
Impairment tests are performed on property, plant and equipment when there is an indicator that they may be
impaired. When the carrying amount of an item of property, plant and equipment is assessed to be higher than
the estimated recoverable amount, an impairment loss is recognised immediately in profit or loss to bring the
carrying amount in line with the recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected from its continued use or disposal.
3.3. Areas of Significant Judgements
In preparing the financial statements, management is required to make estimates and assumptions that
affect the amounts represented in the financial statements and related disclosures. Use of available
information and the application of judgement is inherent in the formation of estimates. Actual results in the
future could differ from these estimates which may be material to the financial statements. Significant
judgements include:
Loans and receivables
The company assesses its loans and receivables for impairment at the end of each reporting period. In
determining whether an impairment loss should be recorded in profit or loss, the company makes judgements
as to whether there is observable data indicating a measurable decrease in the estimated future cash flows
from a financial asset.
The impairment for loans and receivables is calculated on a subsidiary basis, based on historical loss ratios,
and other indicators present at the reporting date that correlate with defaults on the subsidiary. These annual
loss ratios are applied to loan balances in the subsidiary.
Impairment testing
The recoverable amounts of cash-generating units and individual assets have been determined based on
the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use
of estimates and assumptions. It is reasonably possible that the assumption may change which may then
impact our estimations and may then require a material adjustment to the carrying value of tangible assets.
The company reviews and tests the carrying value of assets when events or changes in circumstances
suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which
identifiable cash flows are largely independent of cash flows of other assets and liabilities. If there are
indications that impairment may have occurred, estimates are prepared of expected future cash flows for
each group of assets. Expected future cash flows used to determine the value in use of tangible assets are
inherently uncertain and could materially change over time. They are significantly affected by several
factors.
Useful lives of depreciable assets
Management reviews its estimate of the useful lives and residual values of depreciable assets and intangible
assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates
relate to technical obsolescence or depleting gas reserve volumes that may change the utility of certain assets.
3.4. Areas of Estimates
Taxation
Judgement is required in determining the provision for income taxes due to the complexity of legislation.
There are many transactions and calculations for which the ultimate tax determination is uncertain during the
ordinary course of business. The company recognises liabilities for anticipated tax audit issues based on
estimates of whether taxes will be due. Where the final tax outcome of these matters is different from
the amounts that were initially recorded, such differences will impact the income tax and deferred tax
provisions in the period in which such determination is made.
The company recognises the net future tax benefit related to deferred tax assets to the extent that it is
probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the
recoverability of deferred tax assets requires the company to make significant estimates related to
expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows
from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash
flows and taxable income differ significantly from estimates, the ability of the company to realise the net
deferred tax assets recorded at the end of the reporting period could be impacted.
3.5. Areas of significant judgements
In preparing these interim financial statements, management has made judgements and estimates that affect
the application of accounting policies and the reported amounts of assets and liabilities, income and
expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group’s accounting policies and the key
sources of estimation uncertainty were the same as those described in the annual financial statements for
year ended 28 February 2018, except for new significant judgements and key sources of estimation
uncertainty related to the application of IFRS 15 and IFRS 9, which are described in note 4.
3.6. Intangible assets
Intangible assets are initially recognised at cost.
Expenditure on research (or on the research phase of an internal project) is recognised as an expense when
it is incurred. An intangible asset arising from development (or from the development phase of an internal
project) is recognised when:
• it is technically feasible to complete the asset so that it will be available for use or sale.
• there is an intention to complete and use or sell it.
• there is an ability to use or sell it.
• it will generate probable future economic benefits.
• there are available technical, financial and other resources to complete the development and to use or
sell the asset.
• the expenditure attributable to the asset during its development can be measured reliably. Intangible
assets are carried at cost less any accumulated amortisation and any impairment losses.
The amortisation period and the amortisation method for intangible assets are reviewed every period-end.
Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is
an indicator that the asset may be impaired. As a result, the asset is tested for impairment and the
remaining carrying amount is amortised over its pattern of use. All assets with finite useful life are assessed
for impairment annually.
Item Amortisation
Exploration and development costs Pattern of use (units)
Molopo project mineral rights Pattern of use (units)
Domain names Indefinite useful lives
3.7. Financial instruments
3.7.1. Financial Assets
Initial recognition and measurement
Financial instruments are recognised initially when the Group becomes a party to the contractual provisions
of the instruments.
The Group classifies financial instruments, or their component parts, on initial recognition as a financial
asset, a financial liability or an equity instrument in accordance with the substance of the contractual
arrangement.
Financial instruments are measured initially at fair value, except for equity investments for which a fair value
is not determinable, which are measured at cost and are classified as available-for-sale financial assets.
For financial instruments which are not at fair value through profit or loss, transaction costs are included in
the initial measurement of the instrument.
Subsequent measurement
Loans and receivables are subsequently measured at amortised cost, using the effective interest method,
less accumulated impairment losses.
a. Trade and receivables
Trade receivables are measured at initial recognition at fair value and are subsequently measured at
amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable
amounts are recognised in profit or loss when there is objective evidence that the asset is impaired.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered
indicators that the trade receivable is impaired. The allowance recognised is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the
effective interest rate computed at initial recognition.
The carrying amount of the asset is reduced using an allowance account, and the amount of the loss is
recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written
off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written
off are credited against operating expenses in profit or loss.
b. Cash and cash equivalents
In the consolidated statement of financial position cash and cash equivalents includes cash in hand.
c. Restricted Cash
The company has cash deposits in call accounts that have been ring-fenced. These cash deposits are used
for environmental rehabilitation. This cash is not treated as cash and cash equivalent.
d. Other financial assets
Other financial assets held at amortised cost include a loan to minority shareholders held as a current asset.
The loan is held at cost and is repayable on demand.
3.7.2. Financial Liabilities
Financial liabilities held at amortised cost include trade payables, accruals, other payables and borrowings.
a. Trade and other payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using
the effective interest rate method.
b. Other financial liabilities
Other financial liabilities are recognised initially at fair value, net of transaction costs, and are subsequently
stated at amortised cost and include accrued interest and prepaid interest. Other financial liabilities are
classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability
for at least 12 months from the balance sheet date.
4. Changes in accounting policies
The interim condensed consolidated financial statements do not include all the information and disclosures
required in the annual financial statements, and should be read in conjunction with the Group’s annual
financial statements as at 28 February 2018. The accounting policies adopted in the preparation of the
interim condensed consolidated financial statements are consistent with those followed in the preparation of
the Group’s annual consolidated financial statements for the year ended 28 February 2018, except for the
adoption of new standards effective as of 1 January 2018.
4.1. IFRS 9 (Financial Instruments)
IFRS 9 was effective for the current period. As permitted by IFRS 9, Renergen Group has not restated
comparative information for 2018 for financial instruments in the scope of IFRS 9. Therefore, the
comparative information for 2017 is reported under IAS 39 and is comparable to the information presented
for 2018. There is, however, no material impact from IFRS 9 on the Interim Condensed Consolidated
Financial Statements as there were no expected impairments from trade and other receivables.
4.2. 4.2 IFRS 15 (Revenue from Contracts with Customers)
Application of the standard is mandatory for reporting periods beginning on or after 1 January, 2018. This
standard provides a single, principles-based five-step model for the determination and recognition of revenue
to be applied to all contracts with customers. It replaces in particular IAS 18 (Revenue) and has no material
effect on the prior year and current year presentation of Renergen Group results of consolidated statement
of comprehensive income and financial position, however it will lead to additional disclosure in the
accounting policies and notes. Renergen Group currently services one customer in South Africa and does
not export any CNG.
IFRS 15 – Disaggregation
The impact of adopting IFRS 15, does not result in any further disaggregation of revenue as compared to the
segmental report of the financial statements as the Group only has one source of revenue from one South
African customer.
The Group has not early adopted any other standard, interpretation or amendment that has been issued but
is not yet effective.
5. Revenue
Revenue was generated from the sale of Compressed Natural Gas (‘’CNG’’).
CNG is produced and sold directly to one South African customer at present, as a result disaggregation of revenue
has not been disclosed.
Audited 28 February
Reviewed 31 August Unaudited 31 August 2018
Figures in R’000 2018 2017
Sale of CNG 1 753 1 429 2 885
Total 1 753 1 429 2 885
6. Cost of sales
Audited 28 February
Reviewed 31 August Unaudited 31 August 2018
Figures in R’000 2018 2017
Employee costs (525) (470) (980)
Plant Depreciation (1 001) (986) (1 985)
CNG purchased - (166) (166)
Repairs and Maintenance (97) (235) (352)
Total (1 623) (1 857) (3 483)
7. Intangible assets
Accumulated
Figures in R’000 Cost Amortisation Carrying Value
Reviewed 31 August 2018
Exploration and development
costs 11 177 (32) 11 145
Molopo project mineral rights 56 579 - 56 579
Domain 41 - 41
Total 67 797 (32) 67 765
Comparatives
Accumulated
Figures in R’000 Cost Amortisation Carrying Value
Unaudited 31 August 2017
Exploration and development
costs 12 223 (26) 12 197
Molopo project mineral rights 52 112 - 52 112
Domain 41 - 41
Côte d’Ivoire Hydroelectric
project 12 245 - 12 245
Total 76 621 (26) 76 595
Accumulated Accumulated Carrying
Figures in R’000 Cost Amortisation Impairment Value
Audited 28 February 2018
Exploration and development
costs 9 250 (32) - 9 218
Molopo project mineral rights 56 579 - - 56 579
Domain 41 - - 41
Côte d’Ivoire Hydroelectric
project 12 245 - (12 245) -
Total 78 115 (32) (12 245) 65 838
8. Operating Expenses
Audited 28
Reviewed 31 August Unaudited 31 August February 2018
Figures in R’000 2018 2017
Consulting and advisory fees (5 875) (2 644) (12 177)
Depreciation* (586) (316) (803)
Non-Executive Directors fees (656) (648) (1 339)
Executive Directors Fees*** (2 787) (2 787) (6 040)
Employee costs** (4 247) (2 365) (3 460)
Operating lease (538) - (964)
Other Operating costs (3 752) (7 934) (7 129)
(18 441) (16 694) (31 912)
*Depreciation of plant and machinery amounting to R1 million (31 August 2017: R0,86 million), is
included in cost of sales. The operating plant became fully operational in September 2017, resulting in
5 months’ worth of depreciation being included in cost of sales and 7 months’ worth is included in
operating expenses for the period ended 28 February 2018.
**Employee costs relating to manufacturing is included in cost of sales
*** The Remuneration Committee and the Board of Directors reviewed PWC’s report on salary for
Executive Directors after August 2018, therefore executives’ salary structure remained unchanged for the
first six months of the year.
9. Cash and cash equivalents
The accounting policies for financial instruments have been applied to the line items below:
Audited 28
Reviewed 31 August Unaudited 31 August February 2018
Figures in R’000 2018 2017
Bank 6 259 4 139 3 037
Total 6 259 4 139 3 037
10. Restricted cash
Audited 28
Reviewed 31 August Unaudited 31 August February 2018
Figures in R’000 2018 2017
Environmental rehabilitation
guarantee cash 1 875 - 1 632
Total 1 875 - 1 632
The Group has exploration rights over land in Evander (Mpumalanga) and in Virginia (Free state). The Group has
had to provide for its environmental management programme associated with the exploration activities for the
rehabilitation and management of negative environmental impacts associated with the exploration activities. The
Group has a rehabilitation provision of R3.1 million. The cash portion of this guarantee is invested in a call account
and has been ringfenced for the use towards environmental rehabilitation. Due to this ring-fencing the use of the
cash is restricted, and it is classified as a non-current asset.
11. Trade and other receivables
Figures in Rand thousands
Audited 28
Reviewed 31 August Unaudited 31 August February 2018
Trade and other receivables 2018 2017
Deposits 214 214 214
Other receivables* 684 705 505
Prepayments 1 429 1 085 1 403
Value added tax receivable 757 1 924 337
Total 3 084 3 928 2 459
*Other receivables include R0.380 million (31 August 2017: R0.529 million), receivable from revenue sold on 30
days payment terms.
12. Segments analysis
The operating segments are reported in a manner consistent with the annual financial statements as at 28
February 2018.
Renergen Limited has two operating segments, Renergen sold its investment in Mega Power Renewables on
23 February 2018, thus reducing the segments from three to two.
• Corporate Head Office
Corporate head office is a segment where all investment decisions are made. Renergen Limited is the investment
holding company focused on investing in prospective green projects
• Tetra4 (Pty) Ltd
Tetra4 explores, develops and sells compressed natural gas to the South African market
Figures in R'000 Corporate Tetra4 Total Consolidating Consolidated
Reviewed 31 Head Office Adjustments
August 2018
Revenue
5 550 1 753 7 303 (5 550) 1 753
-
External 1 753 1 753 - 1 753
Inter-segment 5 550 - 5 550 (5 550) -
Loss for the period (2 872) (14 595) (17 467) - (17 467)
Total Assets 764 280 111 926 876 206 (750 546) 125 660
Total liabilities 5 347 198 054 203 401 (150 627) 52 774
Comparatives
Figures in
R’000 Corporate
Unaudited 31 Head Office Tetra4 Mega Power Consolidating Consolidat
August 2017 Renewables Total Adjustments ed
Revenue 5 000 1 429 - 6 429 (5 000) 1 429
External - 1 429 - 1 429 - 1 429
Inter-segment 5 000 - - 5 000 (5 000) -
Loss for the
period (831) (17 671) - (18 502) - (18 502)
Total Assets 738 650 102 439 12 481 853 570 (729 826) 123 744
Total liabilities 1 678 162 381 7 508 171 567 (129 746) 41 821
Figures in
R'000 Corporate
Unaudited 28 Head Office Tetra4 Mega Power Consolidating Consolidat
February 2018 Renewables Total Adjustments ed
Revenue 8 600 2 885 - 11 485 (8 600) 2 885
External - 2 885 - 2 885 - 2 885
Inter-segment 8 600 - - 8 600 (8 600) -
Loss for the
period (11 392) (29 209) - (40 601) - (40 601)
Total Assets 744 363 104 993 266 849 622 (735 370) 114 252
Total liabilities 4 249 176 525 - 180 774 (135 185) 45 589
13. Share based payment
Renergen granted shares to senior management and an executive director after the approval of a Bonus Share
Scheme by shareholders on 29 September 2017. Further shares were granted to senior management and general
employees on 6 July 2018. All shares vest after 36 months of employment with the company. Renergen had no
share-based payments in the six- month comparative period ended 31 August 2017.
Reviewed 31 August 2018 Audited 28 February 2018
Fair
value
Number Fair value Number of per
of shares per share Value of shares share at Value of
awarded at grant Shares awarded grant Shares
(‘000) date (R'000) (‘000) date (R'000)
EXECUTIVES
Opening balance
F Ravele
(granted 5
October 2017) 59 10.22 600 - - -
Allocation for the
period
F Ravele
(granted 5
October 2017) - - - 59 10.22 600
Closing shares
award 59 600 59 600
SENIOR
MANAGEMENT
Opening balance
R Katzke (granted
5 October 2017) 22 10.22 224 - - -
Allocation for the
period -
K Patel (granted 6
July 2018) 10 9.9 99 - - -
M Stuart (granted 6
July 2018) 7 9.9 69
R Katzke (granted
6 July 2018) 8 9.9 79 22 10.22 224
Closing shares
awarded 47 471 22 224
GENERAL
EMPLOYEE
Opening - - - - - -
Allocation for the
period (granted 6
July 2018) 4 9.9 40 - - -
Closing awarded 4 40 - - -
Total shares
awarded to date 110 1 111 81 824
IMPACT ON FINANCIAL
STATEMENTS Reviewed 31 August 2018 Audited 28 February 2018
Statement of Statement of
financial financial
position- position-
Statement of shares based shares based
profit and payments Statement of profit payments
Figures in R’000 loss reserves and loss reserves
Opening Balance 114 114
EXECUTIVES 83 83 - -
SENIOR MANAGEMENT 31 31 - -
GENERAL EMPLOYEE - - -
Movement 40 154 114 114
EXECUTIVES –
allocation of prior year
awarded shares 17 100 83 83
SENIOR MANAGEMENT
– allocation of prior year
awarded shares 6 37 31 31
SENIOR MANAGEMENT
–allocation of current
year awarded shares 15 15 - -
GENERAL EMPLOYEES
– allocation of current
year awarded shares 2 2 - -
Closing balance 154 268 114 114
14. Trade and other payables
Audited 28
Reviewed 31 August Unaudited 31 August February 2018
Figures in Rand thousands 2018 2017
Trade payables 13 090 7 891 9 651
Accrued expenses 2 279 1 430 610
Accrued leave 1 134 647 906
Total 16 503 9 968 11 167
15. Other financial liabilities
Reviewed 31 Unaudited 31 Audited 28
August 2018 August 2017 February 2018
Figures in Rand thousands
Held at amortised cost
Molopo Energy Limited 32 476 28 753 30 545
Total 32 476 28 753 30 545
Molopo Energy Limited
Tetra4 (Pty) Ltd entered into a R50 million loan agreement on 01 May 2013. This loan was part of the conditions
of the sale of shares in Tetra4 (Pty) Ltd from Molopo Energy Limited to Windfall Energy (Pty) Ltd. 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 Molopo South Africa declares a dividend
and 36% of distributable profits must be repaid before a dividend is declared. In the event that by 31 December
2022 the loan is not repaid, the loan shall bear interest at prime overdraft plus 2 percent and will have no
repayment terms. Shareholders loans can only be repaid after the loans 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 percent which at 31 August 2018 is 12% (prime lending rate of 10% plus 2%). The
imputed interest expense is included in profit and loss. The fair value of the loan amount outstanding at 31 August
2018 amounts to ZAR30.5 million.
16. Contingent liabilities and commitments
16.1. Contingent liabilities
There are no contingent liabilities in the reviewed condensed interim financial statements for 31 August
2018.
16.2. Commitments
The were no material changes to the commitments as disclosed in the annual financial statements for 28
February 2018.
17. Events after the reporting period
On 26 October 2018 Renergen released an announcement on SENS, wherein it was further disclosed that the
Group intends listing on the Australian Stock Exchange (ASX) in the first half of 2019. Renergen has undertaken
a fully underwritten rights issue on the JSE for R125 million. The funds raised through the Rights Offer
combined with the funds to be raised on the listing on the ASX, will be used to commence the proposed
expansion of the Virginia Gas Project, which is to be undertaken in stages. Stage one involves connecting 12
gas wells to a new gas pipeline and constructing a new plant for helium and LNG with an anticipated maximum
daily production capacity of 350 kg of liquid helium and 50 tons of LNG (“New Plant”).
18. Going concern
The unaudited, reviewed condensed interim financial statements been prepared assuming the Group will
continue as a going concern, which contemplates the realisation of assets and satisfaction of liabilities in the
normal course of business for the foreseeable future.
A condition of the Industrial Development Corporation (IDC) debt funding announced on 27 May 2017, is the
Group’s ability to raise its own capital of R145 million which will be fulfilled on completion of the rights offers
announced on 26 October 2018. Tetra4’s access to the R218 million facility from the IDC to and Renergen’s
secondary listing on the Australian Securities Exchange in 2019 will finance the expansion of the Virginia Gas
Project will result in unlocking of gas volumes which see the Group generating profits on the sale of LNG and
Helium. Management is confident that the business will be able to continue as a going concern.
Johannesburg
23 November 2018
CORPORATE INFORMATION
Registered office First Floor
1 Bompas Road
Dunkeld West
2196
Nature of the business and principal activities Energy company focused on alternative and
renewable energy sectors in South Africa and
sub-Saharan Africa. The Company is listed on the
JSE Alternative Exchange (“AltX”)
Directors Stefano Marani
Fulu Ravele
Nick Mitchell
Brett Kimber
Mbali Swana
Luigi Matteucci
Bane Maleke
Francois Olivier
Auditors Grant Thornton Johannesburg Partnership
Chartered Accountants (SA)
Registered Auditors
A South African member of Grant Thornton
International Limited
Company Secretary Acorim Proprietary Limited
Transfer secretaries Computershare Investor Services Proprietary
Limited
Designated adviser PSG Capital
Date: 23/11/2018 01:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.