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Renergen Limited (JSE:REN) News - Australian Stock Exchange Appendix 4E - Preliminary Final Report
RENERGEN LIMITED
Incorporated in the Republic of South Africa
(Registration number: 2014/195093/06)
JSE Share code: REN
A2X Share code: REN
ISIN: ZAE000202610
LEI: 378900B1512179F35A69
Australian Business Number (ABN): 93 998 352 675
ASX Share code: RLT
(“Renergen” or “the Company” or “the Group”)
AUSTRALIAN STOCK EXCHANGE APPENDIX 4E - PRELIMINARY FINAL REPORT
Reporting Period Year ended 28 February 2022 (2022)
Previous Period Year ended 28 February 2021 (2021)
RESULTS ANNOUNCEMENT TO THE MARKET
2022 2021 Change
Rm Rm %
Revenue 2.6 1.9 36.8%
Loss after tax attributable to ordinary shareholders 33.8 42.6 -20.7%
Total comprehensive loss attributable to ordinary shareholders 33.8 42.6 -20.7%
Change
Cents Cents %
Basic and diluted loss per share 27.73 36.29 -23.6%
• Higher energy prices combined with the improvement in COVID-19 lockdown restrictions in South
Africa during the year under review relative to the prior comparative period had a positive impact on
the Group’s revenue which increased by 36.8% or R0.7 million. Tetra4 Proprietary Limited (“Tetra4”)
is the only subsidiary of Renergen.
• The loss after tax attributable to ordinary shareholders and the total comprehensive loss attributable
to ordinary shareholders decreased by 20.7% or R8.8 million mainly as a result of the following:
o An increase in other operating income by R2.8 million primarily driven by net foreign
exchange gains;
o An improvement in the operating cost base by R6.8 million mainly due to lower consulting
fees, lower employee costs and the absence of net foreign exchange losses during the year,
offset by increases in listing costs due to shares issued during the year, legal and professional
fees and other costs;
o A deferred tax credit of R0.4 million and an improvement in net finance costs by R0.1 million;
offset by
o An increase in share-based payments expenses by R1.3 million following the award of share
options to employees pursuant to the new Share Appreciation Rights Plan approved in July
2021.
• The Group is in the final stages of commissioning the Virginia Gas Project which is expected to become
operational imminently.
2022 2021 Change
Cents Cents %
Tangible net asset value per share 106.74 80.21 33.1%
Change
R’000 R’000 %
Total assets 1 164.7 780.4 49.2%
• The increase in the Group’s tangible net asset value per share is attributable to an increase in net
tangible assets by R38.0 million for the year under review driven primarily by additional
investments in property, plant and equipment (“PPE”), increases in the deferred tax asset, working
capital and restricted cash and a decrease in lease liabilities, offset by increases in borrowings and
provisions and the cash utilisation for the year. The tangible net asset value per share was further
impacted by an increase of 6.4 million in the issued share capital.
• The Group made a final drawdown of R112.1 million (US$7.5 million) on the loan facility from the
US International Development Finance Corporation (“DFC”) in September 2021 and acquired a new
loan from the Industrial Development Corporation (“IDC”) of R160.7 million in December 2021, of
which R158.8 million was drawn down at year end. Part of these proceeds were utilised to fund the
investments in the Group’s PPE and intangible assets.
PRELIMINARY FINAL FINANCIAL STATEMENTS
Please refer to pages 7 to 31 of this report wherein the following are provided:
• Condensed consolidated statement of profit or loss and other comprehensive income for the year
ended 28 February 2022;
• Condensed consolidated statement of financial position as at 28 February 2022;
• Condensed consolidated statement of changes in equity for the year ended 28 February 2022;
• Condensed consolidated statement of cash flows for the year ended 28 February 2022; and
• Notes to the condensed consolidated financial statements.
The condensed consolidated financial statements presented have not been audited or subject to a review
by the external auditors. The audit of the Group’s financial statements for the year ended 28 February
2022 is currently ongoing.
Shareholders on the South African register should note that this announcement does not meet the JSE
reporting requirements as the financial information presented herein is neither reviewed, nor audited
and that this announcement is released in accordance with the requirements of the ASX Listing Rules. The
Company expects to publish its audited financial results for the year ended 28 February 2022 on or about
19 May 2022.
OTHER DISCLOSURE REQUIREMENTS
Dividend or distribution reinvestment plans
Renergen did not declare dividends during the year ended 28 February 2022 (2021: nil).
Entities over which control has been gained or lost during the year
There was no acquisition or loss of controlling interest during the year ended 28 February 2022.
Details of associates and joint ventures
The Group does not have associates or joint ventures.
Additional Appendix 4E disclosure requirements and commentary on significant features of the operating
performance, results of segments, trends in performance and other factors affecting the results for the
period are contained in the financial report accompanying this announcement.
RESULTS COMMENTARY
The financial year ended 28 February 2022 has been a challenging yet very exciting one for the Group.
Having faced significant headwinds during the construction period in relation to several significant but
distinct challenges highlighted below:
• Impacts of the COVID-19 pandemic resulted in forced lockdowns, global shipping and supply chain
delays
• Nationwide strike action with workers affiliated to the National Union of Metalworkers of SA
(NUMSA) in the steel and engineering industry during the 3rd quarter resulted in disruption of
equipment and services required during construction
• An extreme weather pattern known as La Niña has hit the country since December 2021 and has
resulted in above average rainfall which has resulted in further construction delays on site
Despite these extenuating circumstances the team has shown enormous maturity, resilience, and
dedication to find solutions to mitigate these challenges and reduce the impact on the overall progress of
the Virginia Gas Project. The speed at which the leadership team has rallied the employees, contractors,
and other stakeholders is a true testament to their capability, culture and passion we are building across
the Group operations. The transition from largely a project company to an operational focused company
is well underway and we believe we are ready to take the next step in our exciting journey.
Key highlights for the year under review include:
• 5 out of 6 drilling successes from our exploration campaign
• The securing of a pre-paid forward sell agreement with Argonon Helium who will issue helium
backed tokens known as ArgHe’s
• Completion of the third and final disbursement of the USDFC facility
• Completion and drawdown of the IDC facility
• Securing of Several Phase 1 LNG offtake agreements
• Significant increase in our proven reserves
• Completion of the Phase 2 Front End Engineering Design study
• Securing of several phase 2 helium offtake agreements
• Production and operation of the first CRYO-VACC™
Phase 1
The conclusion of two strategic contracts for the offtake and supply of LNG to Consol Glass Proprietary
Limited and Ceramic Industries Proprietary Limited, a subsidiary of Italtile Limited, has signalled the
confidence from key players within the South African Industrial Sector in our ability to deliver a high-quality
and reliable product to market. These agreements equate to 60% of our planned phase 1 production with
the remaining 40% is destined for the logistics markets in a dual fuel application for the heavy trucking
sector.
The Group made the third and final drawdown against the USDFC loan facility to fund the ongoing
construction of the Phase 1 LNG/LHe plant. The Group also secured a facility with the IDC and completed
the draw down to finance the virtual pipeline infrastructure including trucks, trailers, and downstream
dispensing equipment.
The construction of the Virginia Gas Plant is ongoing with hot commissioning having commenced post the
year under review. We anticipate the start-up of the plant soon and are now taking every opportunity to
double check and review before finally turning the plant on.
Phase 2
The global helium market has been dealt several debilitating blows recently further exacerbating a short
supply in an already tight market. The helium market growth is expected to be driven by the growing
demand from the healthcare, technology, and aerospace industry sectors. These are important factors
that will continue to shape and manage how the Group continues to develop the next phase of the Virginia
Gas Project.
The increase in our proven reserves has paved the way for the expansion of the Virginia Gas Project into
a proposed phase 2 development. The FEED study supporting this development concept was completed
in parallel and has resulted in us receiving Class 3 estimate sufficient to meet stringent requirements of
credit committees for debt funding institutions and preparing suitable budgets to begin approaching
potential equity and debt providers.
The securing of several helium offtake agreements has resulted in approximately 65% of the planned
phase 2 production already contracted under long-term take or pay contracts ranging from 10 to 15 years
in length. The contracts are all US Dollar dominated and increase annually at US CPI. The Group is
strategically not looking to sell any additional helium under this type of arrangement and will look to place
the balance into the spot market to enjoy the upside potential in the commodity movement. As alluded
to earlier the helium market has faced several supply challenges and disruptions and the spot market has
increased exponentially in the last six months.
Cryovations
The COVID-19 vaccination response programs started with much enthusiasm during the year under review
but quickly tapered off during the 3rd Quarter. We completed the manufacturing and assembly during
the 2nd and 3rd quarters of 2021 for the efficient transportation and storage of cold biologics for extended
periods during transit which resulted in a mismatched timing opportunity. The waning support for ongoing
vaccination has impacted the rollout and scale of the opportunity locally within South Africa. We believe
the product has enormous potential and are exploring several modifications that will improve the overall
concept and operational performance to enhance its appeal for the more niche Biologics and Gene-
Therapy market internationally. These companies currently face substantial challenges in their cold-chain
logistics which Cryo-VaccTM is ideally placed to assist with solving these challenges.
Financial Review
The Group’s revenue increased by R0.7 million due to higher energy prices and fewer COVID-19 lockdown
restrictions experienced in the current financial year relative to the prior year.
The Group’s other operating income increased by R2.8 million primarily due to an increase in the net
foreign exchange gains by R3.6 million.
The Group’s other operating expenses declined by R6.8 million primarily due to a decrease in the net
foreign exchange losses by R8.9 million. The Group’s other operating expenses are disclosed in note 13.
Share-based payments expenses increased by R1.3 million primarily due to the issuing of share options
under the Equity-settled Share Appreciation Rights Plan (SAR Plan) approved by shareholders in July 2021.
The current year expense includes share options granted to executive directors, senior management, and
general employees of the Group. The Group’s share-based payments are disclosed in note 9.
During the current year of construction, an additional R260.7 million was spent mainly on the completion
of the Virginia Gas Plant design classified as assets under construction within property, plant and
equipment (“PPE”). The Group also capitalised exploration expenditure totalling R32.1 million and
development costs for Cryo-VaccTM vaccine storage units amounting to R10.9 million under intangible
assets. The Group’s PPE and intangible assets are disclosed in notes 2 and 3.
Further investment in our non-current assets was funded by proceeds from the issue of shares for R113.1
million, a third draw-down of R112.1 million (US$7.5 million) on the DFC loan facility and a R158.8 million
drawdown on the IDC loan facility which was entered into on 17 December 2021. The increase in the loan
facilities resulted in an increase in total borrowings by R288.5 million. The Group’s borrowings are
disclosed in note 10.
Restricted cash resources of the Group held in the Debt Service Reserve Account increased by R19.0 million
in line with the terms of the DFC loan agreement which require Tetra4 at any given date to reserve in a
US$ denominated bank account the sum of all obligations required to be made to the DFC within the next
6 months.
Unrestricted cash resources of the Group decreased by R35.8 million. The Group’s cash flows arising from
operating, investing, and financing activities are fully set out in the Statement of Cash Flows.
The net asset value of the Group increased by R79.9 million impacted mainly by additional investments in
PPE and intangible assets and offset by debt and the losses for the year.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
The Condensed Consolidated Statement of Financial Position of the Group as at 28 February 2022 is set
out below:
R’000 Notes 2022 2021
ASSETS
Non-current assets 1 008 317 625 576
Property, plant and equipment 2 807 027 475 558
Intangible assets 3 154 023 112 155
Deferred taxation 4 43 529 34 976
Restricted cash 5 3 738 2 887
Current assets 156 377 154 786
Trade and other receivables 6 27 032 7 769
Restricted cash 5 34 257 16 139
Cash and cash equivalents 7 95 088 130 878
TOTAL ASSETS 1 164 694 780 362
EQUITY AND LIABILITIES
Equity 286 312 206 408
Share capital 8 563 878 453 078
Share-based payments reserve 9 11 354 8 500
Revaluation reserve 598 598
Accumulated loss (289 518) (255 768)
LIABILITIES
Non-Current Liabilities 803 949 541 476
Borrowings 10 773 056 534 293
Lease liabilities 1 407 3 183
Provisions 11 29 486 4 000
Current Liabilities 74 433 32 478
Borrowings 10 49 784 -
Provisions 11 1 272 2 180
Lease liabilities 1 775 3 007
Trade and other payables 21 602 27 291
TOTAL LIABILITIES 878 382 573 954
TOTAL EQUITY AND LIABILITIES 1 164 694 780 362
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME
The Condensed Consolidated Statement of Profit and Loss and Other Comprehensive Income of the
Group for the 12-month period ended 28 February 2022 is set out below:
R’000 Notes 2022 2021
Revenue 12 2 637 1 925
Cost of sales (3 412) (2 842)
Gross loss (775) (917)
Other operating income 3 736 911
Share-based payments expense 9 (3 115) (1 798)
Other operating expenses 13 (38 207) (44 969)
Operating loss (38 361) (46 773)
Interest income 275 672
Interest expense and imputed interest (4 217) (4 691)
Loss before taxation (42 303) (50 792)
Taxation 4 8 553 8 172
LOSS FOR THE YEAR (33 750) (42 620)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (33 750) (42 620)
Loss attributable to:
Owners of the Company (33 750) (42 620)
LOSS FOR THE YEAR (33 750) (42 620)
Total comprehensive loss attributable to:
Owners of the Company (33 750) (42 620)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (33 750) (42 620)
Loss per ordinary share
Basic and diluted loss per share (cents) 15 (27.73) (36.29)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
The Condensed Consolidated Statement of Changes in Equity of the Group for the 12- month period ended 28 February 2022 is set out below:
Total equity
attributable to
Share-based equity holders
payments Revaluation Accumulated of the
R’000 Share capital reserve reserve loss Company
BALANCE AT 1 MARCH 2020 452 254 7 526 598 (213 148) 247 230
Loss for the year - - - (42 620) (42 620)
Total comprehensive loss for the year - - - (42 620) (42 620)
Issue of shares 824 (824) - - -
Share-based payments expense - 1 798 - - 1 798
BALANCE AT 28 FEBRUARY 2021 453 078 8 500 598 (255 768) 206 408
Loss for the year - - - (33 750) (33 750)
Total comprehensive loss for the year - - - (33 750) (33 750)
Issue of shares 113 376 (261) - - 113 115
Share issue costs (2 576) - - - (2 576)
Share-based payments expense - 3 115 - - 3 115
BALANCE AT 28 FEBRUARY 2022 563 878 11 354 598 (289 518) 286 312
Notes 8 9
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
The Condensed Consolidated Statement of Cash Flows of the Group for the 12- month period ended 28
February 2022 is set out below:
R’000 Notes 2022 2021
Cash flows used in operating activities (79 175) (24 486)
Cash used in operations 14 (78 941) (24 580)
Interest received 275 672
Interest paid (509) (578)
Cash flows used in investing activities (306 956) (196 338)
Investment in property, plant and equipment 2 (260 723) (163 079)
Investment of intangible assets 3 (46 233) (23 207)
Purchase of options - (16 197)
Proceeds on exercise of options - 6 145
Cash flows from financing activities 347 227 213 758
Proceeds from share issue 8 113 115 -
Share issue costs 8 (2 576) -
Proceeds from borrowings 10 270 989 216 282
Repayment of borrowings 10 (31 293) -
Right-of-use – lease payments (3 008) (2 524)
TOTAL CASH MOVEMENT FOR THE YEAR (38 904) (7 066)
Cash and cash equivalents at the beginning of the
year 7 130 878 140 972
Effects of exchange rate changes on cash and cash
equivalents 3 114 (3 028)
TOTAL CASH AND CASH EQUIVALENTS AT THE END
OF THE YEAR 7 95 088 130 878
NOTES TO THE CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
1. Basis of preparation
The consolidated annual financial statements for the year ended 28 February 2022 have been prepared
in accordance with the framework concepts, the recognition and measurement criteria of International
Financial Reporting Standards (IFRS) and in accordance with and containing the information required by
the International Accounting Standard 34: Interim Financial Reporting (IAS 34) as issued by the
International Accounting Standards Board (IASB), Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council, the ASX Listing Rules and the requirements of the South African
Companies Act of 2008, as amended. The consolidated annual financial statements have been prepared
on the historical cost basis except for land that is carried at a revalued amount and financial instruments
that are carried at fair value. Significant accounting policies applied in the preparation of the consolidated
annual financial statements are in terms of IFRS and are consistent with those applied in the previous
consolidated annual financial statements. Amendments to accounting standards and new accounting
pronouncements which came into effect for the first time during the financial year did not have a material
impact on the Group.
These consolidated annual financial statements have been prepared on a going concern basis. The
consolidated annual financial statements are presented in South African Rand which is the Company's
functional and presentation currency. All monetary information is rounded to the nearest thousand
(R'000), except where otherwise stated.
2. Property, plant and equipment
2022 2021
Cost or Accumulated Net book Cost or Accumulated Net book
R’000 valuation depreciation value valuation depreciation value
Assets under 785 460 - 785 460 451 576 - 451 576
construction
Right-of-use asset – 2 243 (1 590) 653 2 243 - 2 243
head office building
Land – at revalued 3 473 - 3 473 3 473 - 3 473
amount
Plant and machinery 22 928 (11 345) 11 583 20 714 (9 451) 11 263
Furniture and fixtures 1 024 (691) 333 1 206 (679) 527
Motor vehicles 2 152 (1 962) 190 2 095 (2 051) 44
Office equipment 171 (108) 63 208 (132) 76
IT equipment 910 (581) 329 541 (438) 103
Right-of-use assets - 4 526 (1 462) 3 064 4 526 (547) 3 979
motor vehicle
Office building 2 065 (476) 1 589 2 065 (270) 1 795
Lease hold
improvements:
Office equipment 142 (128) 14 152 (110) 42
Furniture and fixtures 885 (609) 276 887 (450) 437
TOTAL 825 979 (18 952) 807 027 489 686 (14 128) 475 558
2. Property, plant and equipment (continued)
Reclassi- Environ-
fication mental
from rehabilita At 28
2022 At 1 March intangible -tion February
R’000 2021 assets-2 costs-3 Additions Depreciation 2022
Assets under construction 451 576 4 000 26 758 303 126 - 785 460
Right-of-use asset – head office building 2 243 - - - (1 590) 653
Land – at revalued amount 3 473 - - - - 3 473
Plant and machinery 11 263 - - 2 248 (1 928) 11 583
Furniture and fixtures 527 - - 21 (215) 333
Motor vehicles - 1 44 - - 24 122 190
Office equipment 76 - - 41 (54) 63
IT equipment 103 - - 406 (180) 329
Right-of-use assets - motor vehicle 3 979 - - - (915) 3 064
Office building 1 795 - - - (206) 1 589
Lease hold improvements:
Office equipment 42 - - - (28) 14
Furniture and fixtures 437 - - - (161) 276
TOTAL 475 558 4 000 26 758 305 866 (5 155) 807 027
1 - Impacted by an immaterial adjustment to correct the over-depreciation of motor vehicles in the prior comparative period.
2 - Rehabilitation costs transferred from exploration and evaluation assets within intangible assets (see note 3).
3 - Current year rehabilitation costs as outlined in note 11.
2. Property, plant and equipment (continued)
Pledge of assets
Tetra4 concluded finance agreements with the Development Finance Corporation (DFC) on 20 August 2019
and the Industrial Development Corporation (IDC) on 17 December 2021 (see note 10). All assets under
construction and the land are held as security for the debt under these agreements. Pledged assets under
construction and land have a carrying amount of R788.9 million as at 28 February 2022 (2021: R455.0
million), representing 100% (2021: 100%) of each of these asset categories.
Additions and borrowing costs
Additions include unrealised foreign exchange differences (attributable to the DFC loan) and interest
capitalised as part of borrowing costs in line with the Group’s policy, and non-cash additions to right-of-use
assets. These costs and exchange differences were capitalised within assets under construction. The Group’s
borrowings are disclosed in note 10.
A reconciliation of additions to exclude the impact of capitalised borrowing costs, foreign exchange
differences and non-cash additions to right-of-use assets is provided below:
Capital commitments
R’000 2022 2021
Additions as shown above 305 866 131 061
Capitalised borrowing costs attributable to the DFC loan (note 10) (31 293) -
Unrealised foreign exchange (losses)/gains attributable to the DFC loan (note 10) (10 619) 37 284
Capitalised borrowing costs attributable to the IDC loan (note 10) (3 231) -
Non-cash additions to right-of-use assets - (5 266)
Additions as reflected in the cash flow statement 260 723 163 079
Capital commitments attributable to assets under construction are disclosed in note 16.
3. Intangible assets
2022 2021
Accumu- Accumul-
lated ated Net
Amorti- Net book Amortis- book
R’000 Cost sation value Cost ation value
Exploration and development costs 137 161 (32) 137 129 109 026 (32) 108 994
Computer software 4 184 (804) 3 380 3 303 (439) 2 864
Development costs – Cryo-VaccTM 10 948 - 10 948 - - -
Development costs – Helium Tokens
System 2 048 - 2 048 - - -
Other intangible assets 518 - 518 297 - 297
TOTAL 154 859 (836) 154 023 112 626 (471) 112 155
Reclassi-
fication to
2022 At 1 property, At 28
R’000 March plant and Addit- Amorti- February
2021 equipment 1 ions sation 2022
Exploration and development costs 108 994 (4 000) 32 135 - 137 129
Computer software 2 864 - 881 (365) 3 380
Development costs – Cryo-VaccTM - - 10 948 - 10 948
Development costs – Helium Tokens
System - - 2 048 - 2 048
Other intangible assets 297 - 221 - 518
TOTAL 112 155 (4 000) 46 233 (365) 154 023
1 - Transfer of rehabilitation costs to assets under construction within property, plant and equipment (note 2).
Impairment of exploration and development costs
A Reserve and Resource Evaluation Report (“Evaluation Report”) was completed as at 1 September 2021 by
Sproule Incorporated (“Sproule”), an independent sub-surface consultancy based in Calgary, Canada. The
evaluation is both a geologic and an economic update, based on technical and economic data supplied by
Tetra4. Material changes to this Evaluation Report compared to the last one completed in 2019 are the
inclusion of the 5 newly completed wells, the initial flow testing of two wells with new “slant completions”,
a more detailed sub-surface geologic model, updated capital expenditure and operating costs, updated
currency exchange rates, new gas sales agreements and an updated field development plan.
The independent Reserve and Resource estimates and associated economics contained in the Evaluation
Report are prepared in accordance with the Society of Petroleum Engineers (SPE) Petroleum Resources
Management (PRMS) guidance. Proved Plus Probable Helium and Methane Reserves (“2P Gas Reserves”)
measured at 420.5 BCF (billion cubic feet) as at 1 September 2021 (2019: 142.4 BCF) with a net present value
of R31.0 billion (2019: R9.8 billion).
The net present value above equates to the recoverable amount and was determined using value-in-use
calculations were future estimated cash flows attributable to the 2P Gas Reserves were discounted at 15%
(2019: 15%). In order to determine whether the Group’s exploration and evaluation assets were impaired as
at 28 February 2022 the carrying amount of these assets of R137.1 million (2021: R109.0 million) was
compared to the recoverable amount of R31.0 billion (2021: R9.8 billion) which resulted in no impairment
charge being recognised for the year under review (2021: Rnil).
Management concluded that the impairment assessment is not sensitive to a change in the recoverable
amount or other factors due to the available headroom of R30.9 billion (2021: R9.7 billion), being the
difference between the carrying amount of exploration and evaluation assets of R137.1 million (2021: R109.0
million) and their recoverable amount of R31.0 billion (2021: R9.8 billion).
Development costs – Cryo-VaccTM
Development costs comprise expenditure incurred during the internal development of Cryo-VaccTM vaccine
storage units. No amortisation was recognised during the year as the storage units have not yet been brought
into use. Development costs include costs that meet the criteria required by IFRS and are directly attributable
to the development of the storage units. At 28 February 2022 the development costs are not impaired based
on an assessment performed by management.
Development costs – Helium Tokens System
Development costs comprise expenditure incurred during the internal development of the helium tokens
system. Once fully developed, these tokens will be traded and will allow holders to purchase helium from
Tetra4. No amortisation was recognised during the year as the tokens have not yet been brought into use.
Development costs include costs that meet the criteria required by IFRS and are directly attributable to the
development of the tokens. At 28 February 2022 the development costs are not impaired based on an
assessment performed by management.
4. Deferred taxation
At 1 Recognised At 28 Deferred
March in profit or February Deferred tax
R’000 2021 loss 2022 tax asset liability
Property, plant and equipment (65 976) (36 843) (102 819) - (102 819)
Intangible assets (13 290) (6 443) (19 733) - (19 733)
Leases - (146) (146) - (146)
Provisions 2 990 6 968 9 958 9 958 -
Unutilised tax losses 111 252 45 017 156 269 156 269 -
TOTAL 34 976 8 553 43 529 166 227 (122 698)
The losses incurred by the Group are mainly attributable to its subsidiary, Tetra4. Tetra4 is in the process of
constructing the Virginia Gas Plant and conducting exploration activities. Its revenues have therefore been
minimal to date. The Virginia Gas Plant is expected to become operational imminently.
As at 28 February 2022 the Group’s estimated tax losses were R964.6 million (2021: R603.0 million). These
tax losses do not expire unless the tax entity concerned ceases to operate for a period longer than a year.
The tax losses are available to be offset against future taxable profits. For tax years ending on or after 31
March 2023, companies with assessed losses will be entitled to set off a maximum of 80% of their assessed
losses (subject to a minimum of R1.0 million) against taxable income in a specific year. A Group net deferred
taxation asset of R43.5 million (2021: R35.0 million) has been recognised as it is estimated that future profits
will be available against which the assessed losses can be utilised.
It is the policy of the Group to recognise deferred tax on part of its tax losses. Unused tax losses for which no
deferred tax has been recognised total R385.9 million as at 28 February 2022 (2021: R334.8 million).
Change in tax rate
On 24 February 2021, a reduction in the corporate tax rate from 28% to 27% for years of assessment
commencing 1 April 2022 was announced. This impacts the measurement of deferred tax assets and liabilities
which must be measured at the tax rates that are expected to apply to the period in which the underlying
asset or liability is realised or settled. The impact on the Group of this change in the future tax rate is not
material.
5. Restricted cash
R’000 2022 2021
Non-current
Environmental rehabilitation guarantee cash 3 738 2 887
Current
Debt Service Reserve Account (DSRA) 34 257 16 139
TOTAL 37 995 19 026
DSRA
As part of the terms of the DFC finance agreement (see note 10) Tetra4 is required at any given date, to
reserve in a US dollar denominated bank account the sum of all payments of principal, interest and fees
required to be made to the DFC within the next 6 months. Should Tetra4 default on any payments due and
payable, the DFC reserves the right to fund the settlement of amounts due from this bank account. The bank
account is restricted and all interest earned accrues to Tetra4. This interest is recorded in interest income on
the Statement of Profit or Loss and Other Comprehensive Income. The Debt Service Reserve Account is held
as security for the DFC loan (see note 10).
6. Trade and other receivables
R’000 2022 2021
Financial instruments at amortised cost
Trade receivables 565 2 312
Other receivables 927 138
1 492 2 450
Non-financial instruments
Value-added tax 25 529 5 139
Prepayments 11 180
25 540 5 319
Total trade and other receivables 27 032 7 769
Current year other receivables primarily comprise amounts due for shares issued in February 2022. Due to
banking delays the funds were received immediately after the year end. Prior year other receivables
comprised bursary repayments receivable.
The increase in value-added tax (VAT) receivable is attributable to the recovery of VAT on the importation of
equipment for the Virginia Gas Plant. There was an increase in the importation of equipment in the current
year relative to the prior year, as the construction of Phase 1 of the plant nears completion.
Trade receivables are generally on 30 day terms and are not interest bearing. At 28 February 2022, the Group
is subjected to significant concentration risk as it only has one customer.
The Group applies a simplified approach of recognising lifetime expected credit losses for trade receivables
as these items do not have a significant financing component. The expected credit losses on trade receivables
are estimated using a provision matrix by reference to past default experience, adjusted as appropriate for
current observable data. Current observable data includes market conditions, macroeconomic factors and
known data about the financial position of the customer. Expected credit losses attributable to trade
receivables were assessed as immaterial as at 28 February 2022 (2021: RNil).
7. Cash and cash equivalents
Cash and cash equivalents consist of:
R’000 2022 2021
Cash at banks and on hand 36 714 24 219
Short-term deposits 58 374 106 659
TOTAL 95 088 130 878
Cash at banks earns interest at floating rates. Short-term deposits are made for varying periods depending on
the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.
Included in cash at banks and on hand is R2.2 million (2021: nil) denominated in Australian Dollars. There are no
amounts denominated in US Dollars at 28 February 2022 (2021: R17.2 million).
8. Share capital
2022 2021
Authorised number of shares '000 '000
500 000 000 no par value shares 500 000 500 000
Reconciliation of number of shares issued:
Balance at 1 March 117 508 117 427
Issue of shares – ordinary shares issued for cash 6 400 -
Issue of shares – share incentive scheme, non-cash 26 81
BALANCE AT 28 FEBRUARY 123 934 117 508
Reconciliation of issued stated capital: R’000 R’000
Balance at 1 March 453 078 452 254
Issue of shares 113 376 824
Issue of shares – ordinary shares issued for cash 113 115 -
Issue of shares – share incentive scheme, non-cash 261 824
Share issue costs (2 576) -
BALANCE AT 28 FEBRUARY 563 878 453 078
Shares issued for cash during the year under review comprise:
Number Value of
of shares Issue shares
issued price issued
Nature Date '000 Rand R'000
Issue of Chess Depositary Interests on the
Australian Stock Exchange 1 25 June 2021 2 474 18.24 45 129
Issue of shares on the Johannesburg Stock
Exchange1 25 June 2021 3 178 19.10 60 709
Exercise of options 2 Various 748 9.73 7 277
Total 6 400 113 115
1 - Shares were issued to numerous parties consisting of existing and new domestic and international institutions and sophisticated investors.
2 - Issue price represents the average exercise price of the options exercised during the year.
9. Equity-settled share-based payments
Bonus share scheme
Shares were granted to executive directors, senior management and general employees on 6 July 2018, 17
May 2019, 1 March 2020 and 1 July 2021 pursuant to the Bonus Share Scheme approved by shareholders in
September 2017. All shares vest after 3 years of employment with the Group and there are no other vesting
conditions. Shares granted to participants which have not yet vested lapse if the director or employee leaves
the Group. Shares granted to an executive director, senior management and general employees on 6 July
2018 vested on 6 July 2021.
2022 2021
Value of Value of
Number Fair value shares at Number Fair value shares at
of shares per share grant of shares of shares grant
Reconciliation of bonus granted at grant date granted at grant date
shares granted: (‘000) date (R’000) (‘000) date (R’000)
At 1 March 433 4 864 277 2 479
Granted during the year 145 22.78 3,325 252 13.55 3 411
Executive Directors 106 22.78 2,425 195 13.55 2 648
Senior management 20 22.78 457 53 13.55 715
General employees 19 22.78 443 4 13.55 48
Vested during the year (27) 9.90 (261) (81) 10.22 (824)
Executive Directors (10) 9.90 (97) (59) 10.22 (600)
Senior management (7) 9.90 (67) (22) 10.22 (224)
General employees (10) 9.90 (97) - - -
Lapsed during the year (65) 12.15 (790) (15) 13.34 (202)
Senior management (61) 11.59 (707) (11) 13.55 (147)
General employees (4) 22.78 (83) (4) 12.81 (55)
AT 28 FEBRUARY 486 7 138 433 4 864
The fair value per share on grant date relates to the 30 day volume weighted average price per share on the
JSE on the grant date (VWAP).
Share options granted or exercised during the year
Equity-settled Share Appreciation Rights Plan
On 17 December 2021, 9.9 million share options were granted to executive directors, senior management
and general employees of the Group as follows:
• 1.3 million share options with a strike price of R37.50 which vest over a 2 year period;
• 2.1 million share options with a strike price of R50.00 which vest over a 3 year period;
• 2.9 million share options with a strike price of R62.50 which vest over a 4 year period; and
• 3.6 million share options with a strike price of R75.00 which vest over a 5 year period.
The above share options were granted pursuant to the Equity-settled Share Appreciation Rights Plan
approved by shareholders in July 2021. Awards will be subject to the fulfilment of both predetermined
Performance Condition(s) and continued employment, with Participants having 5 (five) years from the Award
Date to achieve any or all Performance Conditions. Depending on the applicable job level and level of
seniority of the employee, the Award may be divided into no more than 4 (four) separate portions, each of
which will be linked to separate Performance Condition(s) and Performance Period(s) as follows:
Portion 1:
Performance Condition of delivering a share price of at least R75 per share – 2 year Performance Period
Portion 2:
Performance Condition of delivering a share price of at least R100 per share – 3 year Performance Period
Portion 3:
Performance Condition of delivering a share price of at least R125 per share – 4 year Performance Period
Portion 4:
Performance Condition of delivering a share price of at least R150 per share – 5 year Performance Period
Fair value
Number per share Weighted
of share option at Value of average
options grant share exercise
Reconciliation of share options granted to date under granted date options price
the SAR Plan: '000 Rand R'000 Rand
Balance at 1 March 2021 - - -
Granted during the year
Executives, senior management and general
employees 9 956 15 479 61.10
Tier 1 1 344 4.64 6 236 37.50
Tier 2 2 067 2.20 4 547 50.00
Tier 3 2 906 1.14 3 313 62.50
Tier 4 3 639 0.38 1 383 75.00
Total share options awarded at 28 February 2022 9 956 15 479 61.10
Equity-settled Share Appreciation Rights Plan (continued)
The fair value at grant date of all share options awarded was determined using Monte Carlo Method. The
significant inputs into the model are provided below
Tier 1 Tier 2 Tier 3 Tier 4
Spot price R30.14 R30.14 R30.14 R30.14
Volatility 52.6% 39.5% 32.9% 26.3%
Risk-free rate 5% 5% 5% 5%
Option life 2 years 3 years 4 years 5 years
Strike price 37.50 50.00 62.50 75.00
Dividend yield 0% 0% 0% 0%
Share options granted to the ASX lead advisor, corporate advisor and Non-executive Director
During the year under review the ASX lead advisor and corporate advisor exercised 0.3 million share options
(at AUD0.80 or R10.33) and 0.4 million share options (at AUD0.80 or R9.23), respectively.
Fair value
Number per share Weighted
of share option at Value of average
Reconciliation of share options granted to date to the options grant share exercise
ASX lead advisor, corporate advisor and Non- granted date options price
executive Director: ('000) Rand (R'000) (Rand) 1
Balance at 1 March 2021 5,549 6,342 10.37
Granted during the year 250 52 10.59
Non-executive Director 250 0.21 52 10.59
Exercised during the year (748) (1,025) 9.73
ASX lead advisor (338) 1.03 (348) 10.33
Corporate advisor (410) 1.65 (677) 9.23
Total share options awarded to date 5,051 5,369 8.92
Exerciseable at 28 February 5,051 5,369 8.92
1- Exercise prices are denominated in Australian Dollars and have been translated into South African Rand at the prevailing exchange rate at each
year end date or on the date that the share options were exercised.
Reconciliation of the share-based payments reserve
R’000 2022 2021
Balance at the beginning of the year 8 500 7 526
Bonus share scheme - share-based payments expense for Renergen
participants charged to profit or loss - 1 007
Executive Directors - 921
Senior management - 86
Bonus share scheme - share-based payments expense for Tetra4 participants 2 086 791
Executive Directors 1 609 463
Senior management 252 310
General employees 225 18
Share options - share-based payments expense charged to profit or loss 1 362 52
Tetra4 Executives, senior management and general employees 1 310 -
Non-executive Director 52 52
Shares which lapsed during the year ...
