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RENERGEN LIMITED - Provisional Consolidated Annual Financial Results for the Year Ended 28 February 2019

Release Date: 31/05/2019 17:00
Code(s): REN     PDF:  
 
Wrap Text
Provisional Consolidated Annual Financial Results for the Year Ended 28 February 2019

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”)

PROVISIONAL CONSOLIDATED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2019

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 benefit from the first and currently only onshore
petroleum production right in South Africa, complimented by an environmental authorisation which enables Tetra4 to
commence full-scale production and take advantage of its first mover advantage in the local market.

COMMENTARY

The Company performed well, despite the macro-economic climate prevalent in South Africa which presented adverse
operating conditions. Nationally the economy has faced significant head-winds ahead of the national elections, with
many investors opting to delay any investment decisions until after the elections. A volatile Rand and Brent Crude Oil
price has seen local fuel prices add to consumers’ woes. Tensions between the US and China had further
consequences in that foreign investors were reluctant to invest in Emerging Markets generally, all of which lead to
difficult operating conditions.

The New Plant Project did however benefit from two major developments in its favour. Firstly, the Bureau of Land
Management in the United States, a strategic helium reserve in Texas supplying a significant portion of the world’s
helium, announced earlier in 2018 that under the Helium Stewardship Act of 2013 that its helium reserves had dropped
to a level which meant it would host a final auction in August 2018, and thereafter would cease commercial supply.
The US Department of Interior on the 18th of May 2018 also then declared helium as one of the most critical elements
to US National Security, which then saw crude helium prices soar over 135% from the previous year and resulted in
significant international interest in Renergen’s New Plant Project which enjoys concentrations of helium far above other
helium producers. The second development was higher crude oil prices, which lead to an increase in margin on the
pilot plant which ultimately resulted in the Company showing its first gross profit for a semi-annual period, ending
August 2018.

The most significant milestone achieved this year was the funding package from the United States government through
its investment arm, the Overseas Private Investment Corporation (or OPIC) for US$ 40 million. The funding was hinged
primarily on the need to bring new helium sources online, which has benefited the Company greatly.

The Company concluded its capital raise by undertaking an Initial Public Offering on the Australian Stock Exchange in
May 2019. The Company will list on the Australian Stock Exchange in June 2019, an offering which was met with great
enthusiasm, being more than two times oversubscribed, amongst investors interested in gaining exposure to helium
as a commodity. We feel that this development will increase the Company’s investor pool and provide additional
sources of capital.

The Company signed new offtake agreements for liquefied natural gas with customers and has proven the viability of
the New Plant, with the project commencing full operations by the end of March 2021.

The Directors are highly enthusiastic on the Company’s prospects going into the new financial year, with strong
financial support and good prospects moving forward.
A full version of the Annual Financial Statements for the year ended 28 February 2019 will be made available on the
Renergen website
https://www.renergen.co.za/results-and-reporting/

Email investor queries to investorrelations@renergen.co.za.

Financial review

 - Revenue increased by 3% to R2.99 million (February 2018: R2.89 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 9% to R3.2million (February 2018: R3.5million) as a result of improved cost
  efficiencies.

 - Capital raised in preparation of the planned pipeline construction, this resulted in an increase in the cash balance
  from 28 February 2018.

 - R9.5 million spent on plant, machinery and equipment and engineering of Tetra4’s Virginia operating plant
  expansion.

 - R3.8 million spent on gas exploration.

 - A provision of R5.8 million has been raised for commitment and administration fees incurred on the IDC funding
  agreement.

 - 500 convertible notes at AUD 1000 per note were issued with an 18-month term.


Changes to the Board of Directors

Following the successful rights issue, the Board welcomes Francois Olivier to the Board as a non-executive director.
Francois has 16 years of investment research and portfolio management experience, six years of which were spent
in the USA. Francois is a Chartered Accountant and CFA Charter holder.

In anticipation of the ASX listing, the Board decided it was necessary to also appoint Dr David King to the Board as
a non-executive director, effective 4 June 2019. David was a founder and director of Sapex Ltd, Gas2Grid Ltd and
Eastern Star Gas Ltd. He holds an MSc in Geophysics from Imperial College, London, and a PhD in Seismology
from the Australian National University, Canberra. He has substantial natural resource related experience.

We believe these appointments add a new dimension to our Board and will aid the Executive team in developing
the company strategy in order to unlock returns for all of our shareholders.
Provisional Consolidated Statement of Financial Position

The statement of financial position of the Group as at 28 February 2019 are set out below:

                                                                       Audited                         Audited
 Figures in R'000                   Notes                          28 February 2019              28 February 2018
 Assets
 Non - Current Assets
 Property Plant and Equipment                                            37 757                         32 615
 Intangible Assets                    5                                  70 494                         65 838
 Deferred tax asset                                                      12 243                          8 671
 Restricted cash                                                          2 178                          1 632
 Total non-current assets                                               122 672                        108 756
 Current Assets
 Trade and other receivables                                              4 482                          2 459
 Cash and cash equivalents                                               97 956                          3 037
 Total current assets                                                   102 438                          5 496
 Total Assets                                                           225 110                        114 252


 Equity and Liabilities
 Equity
 Stated capital                       8                                 301 277                        161 065
 Accumulated loss                                                     (121 091)                        (80 231)
 Share based payment reserve                                                448                             114
 Equity attributable to parent                                          180 634                          80 948
 Non-controlling interest                                              (16 401)                        (12 285)
 Total Equity                                                           164 233                          68 663

 Liabilities
 Non-Current Liabilities
 Financial liabilities                9                                  39 647                         30 545
 Finance lease obligation                                                   208                            511
 Provisions                                                               9 829                          3 100
 Total non-current liabilities                                           49 684                         34 156


 Current Liabilities
 Trade and other payables                                                10 855                         11 167
 Finance lease obligation                                                   338                            266
 Total Current Liabilities                                               11 193                         11 433

 Total Liabilities                                                       60 877                         45 589

 Total Equity and Liabilities                                           225 110                        114 252
 Net asset value per share
 (cents)                                                                 164.01                          84.73
 Tangible net asset value per
 share (cents)                                                            93.61                           3.49

Provisional 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 audited 12-month period 28
February 2019 are set out below:

                                                                            Audited                  Audited
 Figures in R'000                                   Notes             28 February 2019          28 February 2018
 Revenue                                                                         2 987                  2 885

 Cost of sales                                                                 (3 197)                (3 483)

 Gross loss                                                                      (210)                  (598)

 Other income                                                                     851                     59

 Share - based payments                                                          (334)                  (114)

 Impairment                                                                    (1 295)               (12 245)

 Operating expenses                                   6                       (45 026)               (31 912)
 Profit on disposal of business                                                      -                 4 708
 Operating loss                                                               (46 014)               (40 102)

 Interest Income                                                                 1 604                    632
                                                                                                           (3
 Interest expense and imputed interest                                         (4 138)                   567)
 Total loss before tax                                                        (48 548)               (43 037)

 Taxation                                                                        3 572                 2 436

 Total loss after tax                                                         (44 976)               (40 601)
 Other comprehensive income
 Items that may be reclassified to profit or loss
 Foreign currency translation reserve                                                -                  1 348
 Foreign currency translated to OCI                                                  -                (4 737)

 Total Comprehensive loss for the period                                      (44 976)               (43 990)


 Total loss attributable to:
 Owners of the parent                                                         (40 860)               (37 680)
 Non-controlling interest                                                      (4 116)                (2 921)
                                                                                                          (40
                                                                              (44 976)                   601)
 Total comprehensive loss attributable to:
 Owners of the parent                                                         (40 860)               (41 069)
 Non- controlling interest                                                     (4 116)                (2 921)
                                                                              (44 976)               (43 990)

 Loss per share                                      12
 Basic loss per share (cents)                                                  (47.03)                (47.10)
 Diluted loss per ordinary share (cents)                                       (47.03)                (47.05)
 Weighted average number of shares (‘000)                                      86 889                 80 002
 Number of shares in issue (‘000)                                             100 135                 81 035
Provisional Consolidated Statement of Changes in Equity

The statement of changes in equity of the Group for the audited 12- month period ended 28 February 2019 are set out
below:

                                            Foreign        Share
                                Accumu-     Currency       based          Equity        Non-
 Figures in       Stated
                                lated       Trans-         payment       Attributable   Controlling       Total Equity
 R'000            Capital
                                Loss        lation         reserve       to parent      interest
                                            Reserve
 Balance at 01
 March 2017         137 585      (42 551)       3 389                -        98 423         (9 262)           89 161
 Share issue
                      26 000            -              -             -        26 000                  -        26 000
 Share issue
 costs               (2 520)            -              -             -        (2 520)                 -        (2 520)
 Share based
 payment                                                           114                                             114
                                        -              -                         114                  -
 reserve                    -
 Total loss
 after tax                  -    (37 680)              -             -       (37 680)        (2 921)          (40 601)
 Other
 Comprehensiv                                   1 348                          1 348                  -         1 348
                                        -
 e income                   -
 Foreign
 currency
 reserve                                                             -
 realised on
 disposal of
 business-                              -
                                               (4 737)                        (4 737)                 -        (4 737)
 transfer to
 other
 comprehensiv
 e income                   -
 Non-
 controlling                                                         -
 interest at
                                                       -                                       (102)             (102)
 disposal -                             -                                           -
 Mega Power
 Renewables                 -
 Balance at 28
 February
                                                       -
 2018               161 065      (80 231)                       114           80 948        (12 285)           68 663
 Adjustment on
 initial                                                             -
 application of                                                                                       -
                                        -              -                            -                                -
 IFRS 9 and
 IFRS 15                    -
 Restated
 balance as at
 01 March                                              -
 2018               161 065      (80 231)                       114           80 948        (12 285)           68 663
 Share issue
                    146 760             -              -             -       146 760                  -       146 760
 Share issue
 costs               (6 548)            -              -             -        (6 548)                 -        (6 548)
Share based
payment                                       334
                                      -   -             334           -       334
reserve                   -

Total loss
                                          -
after tax                 -    (40 860)         -   (40 860)    (4 116)   (44 976)
Balance at 28
February
2019            301 277       (121 091)   -   448   180 634    (16 401)   164 233
Provisional Consolidated Statement of Cash Flows

The statement of cash flow of the Group for the audited 12- month period ended 28 February 2019 are set out below:

                                                                          Audited                      Audited
 Figures in R'000                               Notes              28 February 2019             28 February 2018

 Cash flows from operating activities
 Cash used in operations                          7                        (38 287)                    (19 036)
 Interest Income                                                              1 604                         632
 Interest expense                                                             (185)                        (35)
 Net cash outflow from operating activities                                (36 868)                    (18 439)

 Acquisition of property, plant and equipment                               (9 587)                    (13 662)
 Acquisition of intangible assets                                           (3 756)                       (199)
 Net cash outflow from investing activities                                (13 343)                    (13 861)



 Proceeds on share issue                                                   146 760                      26 000
 Share issue costs                                                          (6 548)                     (2 520)
 Increase in borrowings                                                      5 149                           -
 Finance lease capital re-payments                                           (231)                       (210)
 Finance lease proceeds                                                          -                         768
 Net cash inflow from financing activities                                 145 130                      24 038

 Total cash movement for the period                                         94 919                      (8 262)
 Cash at the beginning of the period                                         3 037                      11 299

 Total cash at the end of the period                                        97 956                       3 037
NOTES TO THE FINANCIAL STATEMENTS

The notes to the financial information as at 28 February 2019 are set out below:

 1.     Basis of preparation

 The provisional consolidated financial statements for the year ended 28 February 2019 have been prepared and
 presented in accordance with the requirements of the JSE Limited (“JSE Listings Requirements”) and the
 requirements of the South African Companies Act 71 of 2008, as amended. The JSE Listings Requirements require
 summary reports to be prepared in accordance with the framework concepts and the measurement and recognition
 requirements of International Financial Reporting Standards (“IFRS”) and the SAICA Financial Reporting Guides
 issued by the Accounting Practices Committee and Financial Reporting Pronouncements issued by Financial
 Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim
 Financial Reporting.

 These provisional consolidated financial statements are extracted from audited financial statements but are not
 themselves audited. The audited Group consolidated financial statements are available for inspection at the
 Company registered office. The directors take full responsibility for the preparation of the provisional report and the
 financial information has been correctly extracted from the underlying annual financial statements.

 These provisional consolidated financial statements have been prepared under the supervision of Ms FH Ravele
 CA(SA), the Group’s Chief Financial Officer.

 Auditor’s Opinion

 The provisional consolidated financial statements have been derived from the Group’s audited consolidated annual
 financial statements which have been audited by Jacques Barradas of BDO South Africa Incorporated. The auditor,
 BDO, has issued its unmodified opinion on the Group’s audited consolidated annual financial statements for the
 year ended 28 February 2019. The audit was conducted in accordance with International Standards on Auditing.
 BDO has issued an unmodified audit opinion on the Group’s audited consolidated annual financial statements. This
 auditor’s report does not necessarily report on all the information contained in this announcement. A copy of the
 auditor’s report on the consolidated annual financial statements is available for inspection at the Company’s
 registered office, together with the financial statements identified in the respective auditor’s reports. Any reference
 to future financial performance included in this announcement has not been reviewed or reported on by the
 Company’s auditor.

 2. Accounting policies

 All accounting policies applied in these provisional consolidated 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, IFRS 9 and IFRS 16, which are described in
 note 4.

 3. Areas of significant judgements

 In preparing these provisional consolidated 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.

 4. Changes in accounting policies

   4.1.   Standards and Interpretations effective and adopted
     4.1.1. 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
2018 is reported under IAS 39 is not comparable to the information presented for 2019. There is however, no impact
as there were no changes in the classification and measurement of financial assets from IFRS 9 on the Provisional
Consolidated Financial Statements and thus no transition adjustments have been made to the opening retained
earnings as at the date of initial application.

IFRS 9 modifies the classification and measurement of certain classes of financial assets and liabilities, reflecting
the business model in which assets are managed and their cash flow characteristics. Financial liabilities continue
to be measured at either fair value through profit and loss or amortised cost. In addition, IFRS 9 introduced an
expected credit loss ("ECL") impairment model, which means that the anticipated credit losses as opposed to
incurred credit losses are recognised resulting in earlier recognition of impairments. All financial assets were
previously and are still carried at amortised cost.

      4.1.2. 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 impact as there was no
changes in the classification and measurement on the prior year and current year presentation of Renergen Group
results of consolidated statement of comprehensive income and financial position.

The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services.

The Group's revenue is derived from commodity sales, for which the point of recognition is dependent upon contract
sales term, the transfer of risks and rewards as defined by IAS 18 and the transfer of control as defined by IFRS
15 generally coincides with the fulfilment of performance obligations under the contract. As such, the adoption of
IFRS 15 has had no material impact in respect of timing and amount of revenue recognised by the Group and
accordingly prior period amounts were not restated and no transition adjustments have been made to the opening
retained earnings as at the date of initial application. The practical expedient has not been applied as the group
only has one contract with one customer.

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.

    4.2. Standards and Interpretations not yet effective

        4.2.1. IFRS 16 Leases

IFRS 16 provides a comprehensive model for identification of lease arrangements and their treatment (on-balance
sheet) in the financial statements of both lessees and lessors. It supersedes IAS 17 Leases and its associated
interpretative guidance.

Under the new standard, a lessee is required to recognise the present value of the unavoidable lease payments as
a lease liability on the statement of financial position (including those currently classified as operating leases) with
a corresponding right of use asset. The unwind of the financial charge on the lease liability and amortisation of the
leased asset are recognised in the statement of income based on the implied interest rate and contract term
respectively. The Group's recognised assets and liabilities will increase and affect the presentation and timing of
related depreciation and interest charges in the consolidated statement of profit or loss and other comprehensive
Income. Upon adoption of IFRS 16, the most significant impact will be the present value of the operating lease
commitments (see note 33) being shown as a liability on the statement of financial position together with an asset
representing the right of use, which are unwound and amortised to profit or loss over time.

The Group will apply the modified retrospective approach. Under this approach, the Group will not restate amounts
previously reported and will apply the practical expedient to retain the classification of existing contracts as leases
under current accounting standards (i.e. IAS 17) instead of reassessing whether existing contracts are/or contain
a lease at the date of initial application provided these contracts are ending within 12 months of the date of initial
application.

As at 28 February 2019, the group did not have any non-cancellable operating lease commitments.

The group leases two office premises on an operating lease arrangement, one of which is a short-term lease which
expires within the first half of the new financial year (February 2020) with no intentions to renew. The expense will
be recognized on a straight-line basis in profit and loss. Management intends to renew its head office lease for an
additional three years in July 2019 the impact of the lease is approximately R 95 354 on profit or loss and the group
will recognize a right-of-use asset and a corresponding lease liability of approximately R 270 509.

The group leases vehicles on a finance lease basis, the new standard will have no material impact on these lease
arrangements.

The group will adopt the standard from the reporting period beginning 01 March 2019. The right of use for property
leases will be measured at the amount of lease liability on adoption (adjusted for prepaid or accrued lease
expenses) and any adjustment from the reversal of a straight-lining liability will be credited against the opening
retained earnings balance.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not
yet effective.

5.    Intangible assets

                                                                              Accumulated
 Figures in R’000                                             Cost            Amortisation        Carrying Value

 28 February 2019

 Exploration and development costs                          13 006                     (32)                12 974

 Molopo project mineral rights                              57 479                        -                57 479

 Domain                                                          41                       -                    41

 Total                                                      70 526                     (32)                70 494


Comparatives

                                                            Accumulated
 Figures in R’000                                Cost       Amortisation         Impairment     Carrying Value

 28 February 2018

 Exploration and development                    9 250                 (32)                -                 9 218
 costs

 Molopo project mineral rights                 56 579                     -               -                56 579

 Domain                                             41                    -               -                    41

 Côte d’Ivoire Hydroelectric                   12 245                     -          (12 245)                   -
 project

 Total

                                               78 115                 (32)         (12 245)                65 838
6.    Operating Expenses

 Figures in R’000                  Audited 28 February 2019         Audited 28 February 2018


 Consulting and advisory fees                          18 573                         12 177
 Depreciation                                           1 165                            803
 Non-Executive Directors fees                           1 470                          1 339
 Executive Directors Fees                               8 019                          6 040
 Employee costs                                         3 073                          3 460
 Operating lease                                          983                            964
 Other Operating costs                                 11 743                          7 129
                                                       45 026                         31 912

7. Cash (used in) generated from operations

 Figures in R’000                  Audited 28 February 2019         Audited 28 February 2018

 Loss before taxation                                 (48 548)                       (43 037)
 Adjustments for:
 Depreciation                                            3 150                         2 803
 Amortisation                                                -                            19
 Interest income                                       (1 604)                         (632)
 Finance costs                                             185                            35
 Imputed interest expense                                3 953                         3 532
 Impairment loss                                         1 295                        12 245
 Share based payment expense                              334                            114
 Allocation to restricted cash                           (555)                        (1 632)
 Provision for IDC                                       5 829                              -
 Profit on sale of business                                     -                     (4 708)
 Expected cash proceeds on                                      -                        135
 disposal of Mega Power
 Renewables
 Changes in working capital:
 Trade and other receivables                           (2 015)                         6 473
 Trade and other receivables on                                 -                       (266)
 disposal of Mega Power
 Trade and other payables                                (312)                         5 883
                                                      (38 287)                       (19 036)


8. Stated Capital


 Figures in R’000                               Audited 28 February 2019         Audited 28 February 2018

 Authorised
 500 000 000 no par value shares                                500 000                         500 000
 Reconciliation of number of
 shares issued:
 Opening balance                                                 81 035                          78 413
    Issue of shares – ordinary shares                            19 100                           2 622
                                                                100 135                          81 035
    Reconciliation of issued stated
    capital
    Opening balance                                             161 065                         137 585
    Issue of shares – ordinary shares                           146 760                          26 000
    issued for cash
    Share issue costs                                            (6 548)                         (2 520)
                                                                301 277                         161 065
9. Financial liabilities


    Figures in R’000                       Audited 28 February 2019            Audited 28 February
                                                                                      2018

    Held at amortised cost
    Molopo Energy Limited                                          34 498                        30 545
    Convertible notes                                               5 149                             -
                                                                   39 647                        30 545


The convertible notes carry a coupon rate of 15% per annum. 5% of the coupon rate is payable in cash quarterly
from issue date and 10% of the coupon rate is capitalised on the outstanding principal amount. A Noteholder may
any time elect to convert its Notes into Underlying Securities at a calculated conversion price by written notice to
the Company. If the listing date has occurred prior to the day of redemption and the listing price is greater than or
equal to AUD$1.25 then each Note will automatically convert into Underlying Securities by reference to the
Outstanding Amount of each Note based on the conversion price, with the Conversion Date being the Listing Date.

10. Segmental analysis

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. Green projects entail pursuing knowledge and
practices that can lead to more environmentally friendly and ecologically responsible decisions and lifestyles which
can help protect the environment and sustain its natural resources for current and future generations.

• Tetra4 (Pty) Ltd

Tetra4 explores, develops and sells compressed natural gas to the South African market. Natural gas is a renewable
resource, since it is produced by living microbial organisms.

•     Mega Power Renewables

Mega Power Renewables is in Côte d’Ivoire. This segment is managing the development of a hydroelectric
project. Its functional currency is Euros. Mega Power Renewables was disposed of as at 28 February 2018.

10. Segmental analysis (Continued)

Analysis of reportable segments as at 28 February 2019 is set out below:
  Figures in R'000        Corporate                     Tetra4           Total    Consolidating    Consolidated
                          Head Office                                              Adjustments

  Revenue                       16 487                   2 987          19 473         (16 487)           2 987

  External                           -                   2 987           2 987                -           2 987
  Inter-segment                 16 487                       -          16 487         (16 487)               -


  Depreciation* and                 (713)                (452)          (1 165)                -         (1 165)
  amortization
  Interest income                   1 484                   120           1 604                -           1 604
  Imputed interest                      -               (3 953)         (3 953)                -         (3 953)
  Interest expense                  (185)                     -           (185)                -           (185)
  Taxation                            306                 3 266           3 572                -           3 572

  Loss for the period           (3 817)                (41 159)      (44 976)                 -        (44 976)
  Total Assets                 885 172                 124 740     1 009 912          (784 802)        225 110
  Total liabilities               8 330                237 432       245 762          (184 885)          60 877

*Depreciation on plant and equipment of R1, 9million is included in cost of sales

Comparatives

 Figures in          Corporate               Tetra4    Mega Power             Total   Consolidating    Consolidat
 R'000               Head Office                       Renewables                      Adjustments             ed
 28 February
 2018
 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            (11 392)           (29 209)                -      (40 601)               -      (40 601)
 period
 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


11. Contingent liabilities and commitments

            a. Contingent liabilities

On 8 May 2019, the company released a prospectus for the Initial Public Offering (IPO) on the Australian Stock
Exchange. The company entered into various IPO listing costs agreements with various suppliers. The range that
the company plans on raising at IPO is between a minimum of AUD$ 5million and an oversubscription of AUD$
10million.

Costs to be paid at prospectus date contingent upon successful listing by the company range from R14million to
R18million.

There are no contingent liabilities in the Annual Financial Statements for 28 February 2019.

            b. Commitments
 The group is in the process of acquiring a CNG Daughter station in Virginia in the Free State province with a value
 of R3,9 million. At the end of the reporting period, 90% of the value has been settled. Management expects that the
 station will be ready for use in July 2019.

 The board approved a capital spend of R512million for spend on the New Plant and drilling. The Group is yet to
 enter into contractual agreements with suppliers for this capital spend.

 12. Loss per share

  Figures in R’000                                                   Audited 28 February        Audited 28 February
                                                                               2019                       2018

  Basic loss
  Loss from continuing operations attributable to equity                        (40 860)                  (37 680)
  owners of the parent
  Weighted average number of shares                                              86 889                    80 002
  Basic loss per share (cents)                                                   (47.03)                   (47.10)


  Reconciliation of diluted loss
  Basic loss                                                                    (40 860)                  (37 680)
  Weighted average number of shares                                              86 889                    80 002
  Diluted loss per share (cents)                                                 (47.03)                   (47.05)


  Reconciliation of basic loss to headline loss
  Basic loss attributable to equity owners of the parent                        (40 860)                  (37 680)
  Profit on disposal of business                                                        -                  (4 708)
  Impairment loss                                                                  1 295                   12 245
  Tax effects of disposal and impairment of fixed assets                           (363)                         -
  Headline loss                                                                 (39 928)                  (30 143)
  Headline loss per share (cents)                                                (45.95)                   (37.68)


  Reconciliation of basic headline loss to diluted
  headline loss
  Headline loss                                                                 (39 928)                  (30 143)
  Adjustments                                                                           -                        -
  Diluted headline loss                                                         (39 928)                  (30 143)
  Diluted weighted average number of shares                                      86 997                    80 083
  Diluted Headline loss per share (cents)                                        (45.95)                   (37.64)


The basic loss per share is limited to the diluted loss per share as the convertible shares are antidilutive. This
limitation was not applied in the prior period, the impact was assessed to not be material and therefore prior period
figures have not been adjusted.

13.   Events after the reporting period
Renergen released a SENS announcement on its latest independent reserve review on 24 April 2019, compiled by
MHA Petroleum Consultants LLC (“MHA”) from the United States of America in respect of the New Plant Project held
by Tetra4 indicating an increase in proven methane and helium reserves of 12.2% and 16.1% respectively since March
2018. Economic valuation was up 16.4% to R9.8 billion using a discount of 15% for proven and probable reserves
(2P). Ongoing work relating to shallow conventional “White Sandstone” discovered helium concentration are up 11%.

On 9 May 2019, the company released a SENS announcement, wherein it disclosed that it released the prospectus
for the Initial Public Offering (The Offer) on the Australian Stock Exchange on 8 May 2019. The Offer opened on 9 May
2019 to the Australian public and was available only to Australian and New Zealand residents accessing the website
within Australia or New Zealand.

On 29 May 2019, Renergen announced the completion of The Offer which raised A$10million with oversubscriptions
through the issue of 12.5million CHESS Depository Interests at a subscription price of A$0.80. Renergen also
announced the appointment of a new non-executive director, Dr David King, effective 4 June 2019.

The directors are not aware of any material events that occurred after the reporting period and up to the date of this
report.

14.   Going concern

The provisional consolidated Financial Statements have 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. The Group’s ability to achieve profitability is dependent on the capital spend of proceeds
raised from the currently underway capital raise. The Directors have reviewed the Group’s forecasts for the next
twelve months and are satisfied with the Group’s ability to continue as a going concern.

The Group has received a funding commitment of $40million from Overseas Private Investment Corporation to spend
towards the New Plant Project and has successfully completed a rights issue raising R125 million, as well as a
secondary listing on the Australian Stock Exchange wherein the Group raised an additional A$10 million. The
construction of the New Plant commences in the new financial year. Sales of Liquified Natural Gas (LNG) and Helium
(He) are expected to commence in financial year 2021. The Group has entered into off take agreements for the sale
of both LNG and He.

Johannesburg
31 May 2019

Designated Advisor
PSG Capital

CORPORATE INFORMATION


Country of incorporation and domicile             South Africa

Company and registration number                   2014/195093/06

JSE Share code                                    REN

JSE ISIN                                          ZAE000202610

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”) and in the process of
                                                  a secondary listing on the Australian Stock
                                                  Exchange

Directors                                         Stefano Marani
                                                  Fulu Ravele
                                                  Nick Mitchell
                                                  Brett Kimber
                                                  Mbali Swana
                                                  Luigi Matteucci
                                                  Bane Maleke
                                                  Francois Olivier

Auditors                                          BDO South Africa Inc.
                                                  Chartered Accountants (SA)
                                                  Registered Auditors

Company Secretary                                 Acorim Proprietary Limited

Transfer secretaries                              Computershare Investor Services Proprietary
                                                  Limited

Designated adviser                                PSG Capital

Date: 31/05/2019 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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