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2023 ReportRenascor Resources Limited annual report 2021 1 Renascor Resources Limited annual report 2021 Renascor Resources Limited ABN 90 135 531 341 Renascor Resources is powering the clean energy transition through the development of its Siviour Graphite and Battery Anode Material Project in South Australia. Competent Persons Statement Exploration Results The information in this document that relates to exploration activities and exploration results is based on information compiled and reviewed by Mr G.W. McConachy who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr McConachy is a director of the Company. Mr McConachy has sufficient experience relevant to the style of mineralisation and type of deposits being considered to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2012 Edition). Mr McConachy consents to the inclusion in the report of the matters based on the reviewed information in the form and context in which it appears. Mineral Resource The information in this document that relates to Mineral Resources is based upon information compiled by Mrs Christine Standing who is a Member of the Australasian Institute of Mining and a Member of the Australian Institute of Geoscientists. Mrs Standing is an employee of Optiro Pty Ltd and has sufficient experience relevant to the style of mineralisation, the type of deposit under consideration and to the activity undertaken to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mrs Standing consents to the inclusion in the report of a summary based upon her information in the form and context in which it appears. Ore Reserve The information in this document that relates to Ore Reserves is based on information complied and reviewed by Mr Ben Brown, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Brown is an employee of Optima Consulting and Contracting Pty Ltd and a consultant to the Company. Mr Brown has sufficient experience relevant to the type of deposit under consideration to qualify as a Competent Person as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2012 Edition). Mr Brown consents to the inclusion in the report of the matters based on the reviewed information in the form and context in which it appears. This report may contain forward-looking statements. Any forward-looking statements reflect management’s current beliefs based on information currently available to management and are based on what management believes to be reasonable assumptions. It should be noted that a number of factors could cause actual results, or expectations to differ materially from the results expressed or implied in the forward-looking statements. Contents Chairman’s letter Directors’ Report Auditor’s Independence Declaration Financial Statements Directors’ Declaration Independent Auditor’s Report Shareholder’s information 4 6 21 22 57 58 62 Corporate directory inside back cover ‘Siviour: a world-class graphite project’ 1 2 0 2 t r o p e r l a u n n a d e t i m i L s e c r u o s e R r o c s a n e R 3 Renascor Resources Limited annual report 2021 From the Chairman Dear Shareholder, I am very pleased to present Renascor’s Annual Report for the year ending 30 June 2021. In the past year, we made significant progress in advancing our flagship Siviour Battery Anode Material Project in South Australia and our plans to develop a vertically integrated graphite mine and manufacturing operation to produce a long-term source of Purified Spherical Graphite (PSG) for the lithium-ion battery market. We achieved several breakthroughs that confirm the project is among the most competitive graphite developments globally and offers leading ESG credentials underpinned by our commitment to maintaining high environmental standards in supplying ethically-sourced, 100% Australian-made graphite products. Key achievements have included: • Offtakeagreementswithleadinglithium-ionanode companies During the past year, we announced four non- binding offtake agreements for the sale of up to 60,000 tonnes of PSG from Siviour. With preliminary offtake agreements in place with Chinese anode companies, Minguang New Material and Zeto, Japan- based global trading company, Hanwa Co Ltd., and South Korean conglomerate POSCO, we have made considerable progress in our goal of becoming a leading supplier to the lithium-ion battery anode market. • Commitmenttosustainability We are committed to maintaining high environmental standards in all aspects of our operations. As part of this commitment, we have continued to develop a downstream purification technology that offers environmental benefits over the prevailing technology, which relies on potentially harmful hydrofluoric (HF) acid to produce battery grade graphite. Our HF-free technology has already been first-stage qualified by a number of our offtake partners, and we are confident that our current work programs will continue to demonstrate that we can successfully produce PSG with leading environmental credentials. • Globalcompetitiveness We are also committed to developing a competitive operation, and we believe we can produce high quality PSG at globally competitive costs by leveraging off the scale and quality of our Siviour ore body, which is currently the second largest Proven Reserve of graphite in the world and the largest graphite Reserve outside of Africa. During the year, we made important advancements to our proposed mineral processing circuits that offer the potential to introduce further efficiencies in our operation. Locked cycle trials of our flotation circuit resulted in potential improvements to both purities and recoveries for our Graphite Concentrate production. On our downstream operation, advanced testing of our HF-free purification technology achieved results of up to 99.99% carbon (versus the industry standard of 99.95%), the highest purity levels achieved by Renascor to date. 4 • Large-scalepilotproduction We successfully completed large-scale pilot flotation trials at an independent commercial graphite facility. The trials processed over 70 tonnes of Siviour ore, producing bulk quantities of Graphite Concentrates for downstream equipment trials and customer testing. The results of the trials, which achieved purity and recovery levels above parameters adopted in the Siviour Definitive Feasibility Study, suggest opportunities for greater efficiencies in the concentrate operation as we prepare for detailed engineering in the current year. • Governmentsupport As we have continued to advance Siviour, we are grateful for the recognition the project has received from the Government, including being granted Major Project Status and being included as the only graphite deposit in the Australian Government’s ‘Resources Technology and Critical Minerals Processing National Manufacturing Priority road map’. Additional governmental support for the project includes in principle financial support from both the Clean Energy Finance Corporation and Export Finance Australia. We have also received strong support from both the Federal and South Australian Departments of Trade for our potential to produce 100% Australian-made products for leading global lithium-ion battery anode manufacturers. The advances achieved during the year on our Siviour project, together with the improving outlook for the lithium-ion battery market, has led us to bring forward feasibility work on expanding our production of PSG. With potential commitments for up to two times our current Stage One production capacity of 28,000 tonnes of PSG, we are currently considering both expansions to our Stage One production capacity and an additional Stage Two capacity. These expansions offer the potential to achieve greater returns from Siviour as we move forward with our work programs in the current year. While we made significant progress during the year, we recognise that COVID-19 continues to present challenges that require prudence and flexibility in operations. Renascor has responded by adapting work practices to allow our business to continue our activities, while keeping our employees, their families and the communities in which we are active safe and healthy. With the work undertaken last year, together with our current work programs and the improving outlook for lithium-ion battery minerals, we believe there is strong potential for continued positive responses from the equity market for Renascor. On behalf of the Board and my fellow shareholders, I thank our Managing Director David Christensen and the entire Renascor team for their dedicated work during an exciting year. I also offer my sincere thanks to you, our shareholders, for your continued support. Your sincerely, Dick Keevers, Chairman FederalMinisterforResources KeithPitt(right)with RenascorManagingDirector DavidChristensen(June2021). 5 Renascor Resources Limited annual report 2021 Directors’ Report 2021 6 Directors’ Report 2021 Business objectives Siviour Graphite Project Renascor Resources is an Australian-based company focused on the development of economically viable minerals. Renascor has an extensive tenement portfolio, holding interests in the key mineral provinces of South Australia. Its projects include the Siviour graphite project near Arno Bay, South Australia. The principal activity of the Group during the financial year was mineral exploration and evaluation. Corporate Governance Statement The board of directors of the Company (“Board”) is responsible for the corporate governance of the Company. The board guides and monitors the business affairs of the Company on behalf of its shareholders by whom they are elected and to whom they are accountable. The Company believes that good corporate governance enhances investor confidence and adds value to stakeholders. The Board continually monitors and reviews its policies, procedures and charters with a view to ensure its compliance with the ASX Corporate Governance Council’s “Corporate Governance Principles and Recommendations, 4th Edition” to the extent considered appropriate for the size of the Company and its scale of its operations. The Company’s Corporate Governance Statement is available on the Company’s website. www.renascor.com.au/corporate-governance The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘Group’) consisting of Renascor Resources Limited (referred to hereafter as the ‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2021. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations Company overview Renascor Resources Limited (Renascor) is an ASX-listed, Australian-based company focused on the development of economically viable deposits containing graphite, gold, copper and other minerals. Renascor’s activities during the past financial year were primarily directed at developing the Siviour Graphite Project (Siviour). Other projects In addition to its activities at Siviour, Renascor has maintained a strong exploration portfolio, identifying and maintaining a strong pipeline of targets for development of gold, copper, nickel, cobalt and other mineral assets. On the 10 August 2020 the Company announced the expansion of the Carding Gold Project in the Central Gawler Craton with the approval of an exploration licence EL6585 that includes the area immediately north of the Soyuz Prospect. On the 27 October 2020 the Company announced a binding farm-in agreement with Rio Tinto. This farm- in is part of the Company’s Marree Project in South Australia’s Adelaide Fold Belt. Corporate and financial For the year ended 30 June 2021 the loss for the Group after providing for income tax amounted to $877,230 (2020: $1,072,575). To support the Group’s exploration activities and developing the Siviour Graphite Project, the Company raised $17,882,412 (after capital raising costs) via placements to professional and sophisticated investors. Significant changes in the state of affairs There were no significant changes in the state of affairs of the Group during the financial year. Matters subsequent to the end of the financial year No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years. Likely developments and expected results of operations The Company will continue activities in the exploration, evaluation, development and acquisition of viable projects with the objective of establishing a significant production business. 7 Renascor Resources Limited annual report 2021 financial statements Directors’ Report 2021 Environmental regulation and performance The directors have put in place strategies and procedures to ensure that the Group manages its compliance with environmental regulations. The directors are not aware of any breaches of any applicable environmental regulations. Climate Change The Group recognises the growing interest of our stakeholders in relation to the potential risks and opportunities posed to our business, and the broader sector, in response to climate change and the anticipated global transition towards a lower carbon economy. Key climate-related risks and opportunities relevant to our business include: • Communities and society expect a response from companies in relation to climate change, inaction could potentially lead to resistance or blockage of the project if there is a lack of strategy from the Group’s transition to a lower carbon economy. • Current and potential future investors are increasingly focused on ESG aspects of projects giving rise to possible financial and reputational risk. • We believe this transition into a lower carbon economy gives rise to opportunities for our Battery Anode Material Project, with demand for Purified Spherical Graphite forecast to grow significantly in line with the increase in Electric vehicle adoption and unprecedented global demand for batteries. • The physical impacts of climate change including changes to weather patterns have the potential to impact upon operations. 8 Directors’ Report 30 June 2021 Information on Directors David Christensen ManagingDirector Richard (Dick) Keevers Non-ExecutiveChairman Experience and expertise: Experience and expertise: David Christensen is an experienced mining executive, with successful experience managing exploration, mining and marketing operations. Prior to founding the Company, David served as Chief Executive Officer of Adelaide-based companies, Heathgate Resources Pty Ltd and Quasar Resource Pty Ltd. While at Heathgate and Quasar, his responsibilities included overseeing Australian operations, including the Beverley uranium mine, as well as the expansion into new projects with the discovery and development of the Four Mile deposit and numerous joint ventures. David’s experience also includes serving as President of Nuclear Fuels Corporation, a trading and marketing company, where he managed a multi-million dollar uranium portfolio and was responsible for developing sales strategy, executing trades and swaps and negotiating all contracts. David commenced his career as an attorney in California and London offices of international law firm Latham & Watkins, where he advised on corporate finance and mergers and acquisitions. David was educated at Cornell University (BA, Economics and Classical Civilizations), the University of California, Los Angeles (JD) and the Universitá di Bologna (Fulbright Fellow). Other current directorships: None Former directorships (last 3 years): None Interests in shares: 30,377,207 Interests in options: 250,000 Interests in rights: 6,000,000 Dick Keever’s experience includes advancing multiple producing mines from discovery phase through development, including the Telfer gold and copper mine, the Phosphate Hill phosphate mine and the Baal Gammon copper mine. Dick also was a substantial shareholder of and served as an executive director for Pembroke Josephson Wright Limited, an Australian share brokerage firm. Dick has served on boards of several ASX-listed resource and industrial companies, and he is currently a non-executive director of Santana Minerals Limited. Prior to joining the Renascor board, Dick served as chairman of unlisted Eyre Peninsula Minerals Proprietary Limited (EPM). Other current directorships: Santana Minerals Limited Former directorships (last 3 years): None Interests in shares: 49,193,324 Interests in options: 500,000 Stephen Bizzell Non-ExecutiveDirector Experience and expertise: Stephen Bizzell is Chairman of boutique corporate advisory and funds management group Bizzell Capital Partners. He has over 25 years corporate finance and public company management experience in the resources sector in Australia and Canada. Stephen was previously an Executive Director of Arrow Energy from 1999 until its acquisition in 2010 by Royal Dutch Shell and PetroChina for $3.5 billion. Stephen was instrumental in Arrow’s corporate and commercial success and its growth from a junior explorer to a large integrated energy company. Stephen spent his early career in the corporate finance division of Ernst & Young and the tax division of Cooper & Lybrand and qualified as a Chartered Accountant. He is also a former director of Queensland Treasury Corporation. Other current directorships: Laneway Resources Limited, Armour Energy Limited, Strike Energy Limited, Maas Group Holdings Limited and Challenger Energy Group Plc. Former directorships (last 3 years): Stanmore Coal Limited (2009 to 2020), UIL Energy Limited (2014 to 2018) Interests in shares: 49,504,201 Interests in options: 5,318,182 9 Renascor Resources Limited annual report 2021 financial statements Information on Directors Geoffrey McConachy Non-ExecutiveDirector Experience and expertise: Geoffrey McConachy is an accomplished geologist with over thirty years of Australian and international experience in the mining industry assessing a wide range of commodities. Prior to joining the Company, Geoffrey worked for Heathgate Resources Pty Ltd and Quasar Resources Pty Ltd, where his roles included Managing Director, Exploration. While at Heathgate and Quasar, Geoffrey led the exploration and development team in the discovery, definition and evaluation of four uranium deposits including the Four Mile deposit, for which he was co-honoured with the Prospector of the Year award from the Australian Association of Mining & Exploration Companies. His experience includes instrumental roles in the discovery of the Fosterville gold deposit in Victoria and the Potosi base metal deposit in New South Wales. Geoffrey is a fellow of the Australasian Institute of Mining and Metallurgy and a former Director of the Uranium Information Centre. Other current directorships: None Former directorships (last 3 years): None Interests in shares: 10,381,385 ‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. ‘Former directorships (last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. Company secretaries Pierre van der Merwe is an accountant of more than 30 years’ experience with extensive knowledge in the provision of corporate secretarial and accounting services to ASX listed companies. He also has experience as CFO and was a Partner from 2004 to 2016 in HLB Mann Judd, an Australasian and International accountancy and business advisory group. During this time, he headed the Corporate Team in Adelaide which provides corporate secretarial and accounting services to a host of ASX listed companies in various industries, specialising in exploration and mining entities. Pierre was company secretary of the following ASX listed companies, amongst others: • Bondi Mining Ltd (ASX ‘BOM’) which changed it’s name to World Titanium Resources Ltd • Papyrus Australia Ltd (ASX ‘PPY’) • Terramin Australia Ltd (ASX ‘TZN’) during its transition from exploration to mining at its Strathalbyn site He spent part of 2016 and 2017 assisting an unlisted public company, 1414 Degrees Ltd, as company secretary with its preparation for IPO on the ASX (Listed 10 September 2018 at market capitalisation of $46m – ASX ‘14D’). Jon Colquhoun is an experienced accountant with a broad financial and commercial background across a range of industries assisting with CFO and company secretary roles for large private and listed companies. Mr Colquhoun holds a Bachelor of Commerce from the University of Adelaide, is a Registered Company Auditor and a member of Chartered Accountants Australia and New Zealand. Meetings of directors The number of meetings of the Company’s Board of Directors (‘the Board’) held during the year ended 30 June 2021, and the number of meetings attended by each director were: Full Board Audit & Risk Committee Attended Held Attended Held Richard Keevers David Christensen Geoffrey McConachy Stephen Bizzell 5 5 5 5 5 5 5 5 2 2 2 2 2 2 2 2 Held: represents the number of meetings held during the time the director held office. 10 Directors’ Report 30 June 2021 Remuneration report (audited) The remuneration report details the key management personnel remuneration arrangements for the Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including all directors. The remuneration report is set out under the following main headings: • Principles used to determine the nature and amount of remuneration • Details of remuneration • Service agreements • Share-based compensation • Additional information • Additional disclosures relating to key management personnel Principles used to determine the nature and amount of remuneration The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of Directors (‘the Board’) ensures that executive reward satisfies the following key criteria for good reward governance practices: • competitiveness and reasonableness • acceptability to shareholders • performance linkage / alignment of executive compensation • transparency The Board carried out the functions of the Nomination and Remuneration Committee and is responsible for determining and reviewing remuneration arrangements for its directors and executives. The performance of the Group depends on the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel. The Board is responsible for managing: • non-executive director fees; • executive remuneration (directors and other executives); and • the over-arching executive remuneration framework and incentive plan policies. Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of the Group. Relationship between remuneration and Group performance: During the financial year, the Group has generated losses as its principal activity was developing the Siviour Graphite Project and exploration for graphite, copper, gold and other minerals within South Australia. As the Group is still in the development, exploration and evaluation stage, the link between remuneration, Group performance and shareholder wealth is sometimes tenuous. Share prices are subject to the influence of metals prices, market sentiment towards the sector and the global economy and as such increases or decreases may occur quite independent of executive performance or remuneration. In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate. Non-executive directors remuneration Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non- executive directors’ fees and payments are reviewed periodically by the Board. The chairman’s fees are determined independently to the fees of other non- executive directors based on comparative roles in the external market. The chairman is not present at any discussions relating to the determination of his own remuneration. Non-executive directors do not receive any performance-based pay. ASX listing rules require the aggregate non-executive directors’ remuneration be determined periodically by a general meeting. The most recent determination was at the Annual General Meeting held on 5 August 2010, where the shareholders approved a maximum annual aggregate remuneration of $350,000. Retirement allowances for non-executive directors In line with guidance from the ASX Corporate Governance Council on non-executive director’s remuneration, no retirement allowances are provided for non-executive directors. Superannuation contributions required under the Australian superannuation guarantee legislation continue to be made as required and are deducted from the directors’ overall fee entitlements. 11 Renascor Resources Limited annual report 2021 financial statements Remuneration report (audited) Executive remuneration The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and the creation of value for shareholders, and conforms to market practice for delivery of reward. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices: • competitiveness and reasonableness; • acceptability to shareholders; • performance linkage/alignment of executive compensation; • transparency; and • capital management. The Group has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the organisation. Alignment to shareholders’ interests: • has economic profit as a core component of plan design; • focuses on sustained growth in shareholder wealth; • delivering constant return on assets as well as focusing the executive on key non-financial drivers of value; and • attracts and retains high calibre executives. Alignment to program participants’ interests: • rewards capability and experience; • reflects competitive reward for contribution to growth in shareholder wealth; • provides a clear structure for earning rewards; and • provides recognition for contribution. The framework provides a mix of fixed and long-term incentives. The Board carried out the functions of the Remuneration and Nominations Committees and is responsible for reviewing and negotiating compensation arrangements of senior executives. It assesses the appropriateness of the nature and amount of remuneration of such officers on a periodic basis by relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team. The board manages remuneration and incentive policies and practices and remuneration packages and other terms of employment for executive directors, other senior executives and non-executive directors. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices: • base pay and benefits, including superannuation; • short-term performance incentives through a cash bonus may be determined by the Board; and • long-term incentives through the issue of share options and performance rights. The combination of these comprises the executive’s total remuneration. Base pay and benefits Base pay and benefits are structured as a total employment cost package which may be delivered as a combination of cash and prescribed non-financial benefits, at the executive’s discretion and subject to board approval. Executives are offered a competitive base pay that comprises the fixed component of pay and rewards to ensure base pay is set to reflect the market for a comparable role. Base pay for executives is reviewed periodically to ensure the executive’s pay is competitive with the market. There is no guaranteed base pay increase included in any of the executives’ contracts. Consolidated entity performance and link to remuneration Remuneration for certain individuals is directly linked to the performance of the Group. A portion of any cash bonus and incentive payments are at the discretion of the Nomination and Remuneration Committee. Refer to the “additional information” section below for details of the earnings and total shareholders return for the last five years. The Nomination and Remuneration Committee is of the opinion that the results can be attributed in part to the adoption of performance based compensation and is satisfied that this improvement will continue to increase shareholder wealth if maintained over the coming years. Voting and comments made at the Company’s 26 November 2020 Annual General Meeting (‘AGM’) At the 26 November 2020 AGM, 95.96% of the votes received supported the adoption of the remuneration report for the year ended 30 June 2020. The Company did not receive any specific feedback at the AGM regarding its remuneration practices. 12 Directors’ Report 30 June 2021 Details of remuneration Amounts of remuneration Details of the remuneration of key management personnel of the Group are set out in the following tables: Short-term benefits Post-employment benefits Long-term benefits Share-based payment Cash salary and fees $ 38,000 46,576 38,000 2021 Non-Executive Directors: Stephen Bizzell* Richard Keevers* Geoffrey McConachy* Executive Directors: Non- monetary Superannuation $ $ Long service Performance NEDSP & rights director’s $ shares $ leave $ Total $ - - - - 4,945 - - - - - - - 4,800 42,800 5,479 57,000 4,000 42,000 David Christensen** 296,880 10,963 21,694 7,540 13,666 21,120 371,863 Other Key Management Personnel: Pierre van der Merwe*** 120,123 - - - - - 120,123 539,579 10,963 26,639 7,540 13,666 35,399 633,786 * ** From 1 April 2020 the Non- Executive directors agreed to a 20% reduction in their directors fees to support the Company through the economic uncertainty caused by the COVID-19 pandemic the Non-Executive directors fees where reinstated to 100% on 1 October 2020. Short term benefits paid to Mr Christensen includes $30,000 in annual leave entitlements paid during the year. Mr Christensen also accrued $7,540 in unpaid long service leave entitlements during the year. *** From 1 April 2020 Mr van der Merwe agreed to a 17% reduction in his Company Secretarial and CFO fees to support the Company through the economic uncertainty caused by the COVID-19 pandemic Mr van der Merwe fees were reinstated to 100% on 1 October 2020. For the period 1 April 2020 to 30 September 2020 50% of the non-executive director fees were paid in cash, with the remaining 50% of the fees to be settled by the issues of shares pursuant to the NEDSP. The shares for the period 1 April 2020 to 30 September 2020 have been issued. The NEDSP plan ceased on 30 September 2020. Commencing 1 May 2020 Mr Christensen received payment for 90% of his directors fees, with 10% of his fees withheld by the Company to be paid via the issue of share capital subject to shareholder approval. The shares for the period 1 May 2020 to 30 September 2020 were issued following shareholder approval at the 2020 AGM, shares for the period 1 October 2020 to 30 June 2021 have not been issued. 13 Renascor Resources Limited annual report 2021 financial statements Remuneration report (audited) Short-term benefits Post-employment benefits Long-term benefits Share-based payment Cash salary and fees $ 34,000 46,576 34,000 2020 Non-Executive Directors: Stephen Bizzell* Richard Keevers* Geoffrey McConachy* Executive Directors: Non- monetary Superannuation $ $ Long service Performance NEDSP & rights director’s $ shares $ leave $ Total $ - - - - 4,945 - - - - - - - 4,000 38,000 5,479 57,000 4,000 38,000 David Christensen** 269,760 9,706 21,003 6,840 70,259 3,840 381,408 Other Key Management Personnel: Pierre van der Merwe*** 123,345 - - - - - 123,345 507,681 9,706 25,948 6,840 70,259 17,319 637,753 * ** From 1 April 2020 the Non- Executive directors agreed to a 20% reduction in their directors fees to support the Company through the economic uncertainty caused by the COVID-19 pandemic. Short term benefits paid to Mr Christensen includes $24,000 in annual leave entitlements paid during the year. Mr Christensen also accrued $6,840 in unpaid long service leave entitlements during the year. *** From 1 April 2020 Mr van der Merwe agreed to a 17% reduction in his Company Secretarial and CFO fees to support the Company through the economic uncertainty caused by the COVID-19 pandemic. The proportion of remuneration linked to performance and the fixed proportion are as follows: Name Non-Executive Directors: Stephen Bizzell Richard Keevers Geoffrey McConachy Executive Directors: David Christensen* Fixed remuneration At risk - STI At risk - LTI 2021 2020 2021 2020 2021 2020 100% 100% 100% 100% 100% 100% 99% 81% - - - - - - - - - - - - - - 1% 19% * During the year ended 30 June 2019 shareholders granted approval for the issue of performance rights to Mr David Christensen. Further information pertaining to the Performance Rights can be found in Note 31. “Share Based Payments”. The total value of performance-related bonuses paid to key management personnel and executives during the year was $13,666 (2020: $70,259). Key management personnel and executives were not paid cash bonuses during the years ended 30 June 2021 and 2020. 14 Directors’ Report 30 June 2021 Service agreements Share-based compensation Issue of shares During the period 1 July 2020 to 30 September 2020, 50% of non-executive director fees totaling $14,279 were withheld by the Company pursuant to the Non- Executive Director Share Plan (“NEDSP”) (2020: $13,479). As at 30 June 2021 the shares pertaining to the the period 1 April 2020 to 30 September 2020 had been issued. During the period 1 October 2020 to 30 April 2021 executive director fees totaling $15,360 were withheld by the Company to be issued as shares at a later date when shareholder approval is obtained (2020: $3,840). As at 30 June 2021 the shares pertaining to the the period 1 April 2020 to 30 September 2020 had been issued. Options There were no options over ordinary shares issued to directors and other key management personnel as part of compensation that were outstanding as at 30 June 2021. Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these agreements are as follows: David Christensen, Managing Director Term of agreement: Indefinite term, subject to six-month’s notice or a termination payment of six months. Details: Per annum rate of $312,000, exclusive of superannuation. In addition, David is also entitled to private health insurance. Pierre van der Merwe, Chief Financial Officer and Company Secretary Term of agreement: The agreement may be terminated by either party on one months’ notice. Details: Services are provided at a rate of $10,000 per month plus GST plus expenses. However, at 1 April 2020 it was agreed that during the COVID-19 pandemic the fee for services provided would be reduced to $8,333 per month for an indefinite period of time. At 1 October 2020 fees were reinstated to $10,000 per month. Key management personnel have no entitlement to termination payments in the event of removal for misconduct. 15 Renascor Resources Limited annual report 2021 financial statements Remuneration report (audited) Performance rights The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors and other key management personnel in this financial year or future reporting years are as follows: Grant date Expiry date Share price hurdle for vesting Fair value per right at grant date Tranche B 3 September 2018 3 September 2022 Tranche C 3 September 2018 Vested during the year $0.00 $0.06 $0.020 $0.008 Performance rights granted carry no dividend or voting rights Details of performance rights over ordinary shares granted, vested and lapsed for directors and other key management personnel as part of compensation during the year ended 30 June 2021 are set out below: Name Grant date Number of rights granted Number of rights vested Value of rights granted $ Value of rights expensed in the period $ Number of rights lapsed Value of rights lapsed $ David Christensen 3 September 2018 6,000,000 - 13,666 - - - Further information regarding the Performance Rights can be found in Note 31. “Share Based Payments”. Additional information Refer to the sections below for details of the earnings and total shareholders return for the last five years: The earnings of the Group for the five years to 30 June 2021 are summarised below: 2021 $ 2020 $ 2019 $ 2018 $ 2017 $ (Loss) for the year attributable to owners ($) (877,230) (1,072,575) (1,321,558) (3,434,543) (1,085,492) Increase/(decrease) in share price (%) 680% (52%) 5% 25% (25%) The factors that are considered to affect total shareholders return (‘TSR’) are summarised below: Share price at financial year end (cents) Basic earnings per share (cents per share) 2021 6.8 (0.1) 2020 2019 2018 1.0 (0.1) 2.1 (0.1) 2.0 (0.5) 2017 1.6 (0.2) 16 Directors’ Report 30 June 2021 Additional disclosures relating to key management personnel Shareholding The number of shares in the Company held during the financial year by each director and other members of key management personnel of the Group, including their personally related parties, is set out below: Ordinary shares Stephen Bizzell David Christensen Richard Keevers Geoffrey McConachy Option holding Balance at the start of the year Performance rights vested & exercised Additions Other Balance at the end of the year 38,122,982 - 11,381,219 23,064,637 6,000,000 1,312,570 47,265,810 9,704,244 - - 1,927,514 677,141 - - - - 49,504,201 30,377,207 49,193,324 10,381,385 118,157,673 6,000,000 15,298,444 - 139,456,117 The number of options over ordinary shares in the Company held during the financial year by each director and other members of key management personnel of the Group, including their personally related parties, is set out below: Options over ordinary shares Stephen Bizzell David Christensen Richard Keevers Balance at the start of the year Acquired Exercised Lapsed Balance at the end of the year - - - - 5,318,182 250,000 500,000 6,068,182 - - - - - - - - 5,318,182 250,000 500,000 6,068,182 Performance rights holding The number of performance rights over ordinary shares in the Company held during the financial year by each director and other members of key management personnel of the Group, including their personally related parties, is set out below: Performance rights over ordinary shares David Christensen Balance at the start of the year Granted Vested & exercised Expired/ forfeited/ other Balance at the end of the year 12,000,000 12,000,000 - - (6,000,000) (6,000,000) - - 6,000,000 6,000,000 17 Renascor Resources Limited annual report 2021 financial statements Remuneration report (audited) Other transactions with key management personnel and their related parties Mr G W McConachy is director of Euro Exploration Services Pty Ltd (Euro). Euro has provided the company with exploration services, geochemical sampling services as well as the provision of geological personnel services during the year. The services provided are based on normal commercial terms and conditions. During the financial year the Company incurred costs of $68,664 (2020: $24,376) from Euro. An amount of $3,214 (2020: $2,677) was owing to Euro at 30 June 2021. Mr G W McConachy provided the company with exploration consulting services during the year. The services provided are based on normal commercial terms and conditions. During the financial year the Company incurred costs of $38,399 (2020: $4,287) from GW MCConachy & Co Pty Ltd. An amount of $9,075 (2020: $Nil) was owing to GW MCConachy & Co Pty Ltd at 30 June 2021. Mr S Bizzell is a director of Bizzell Capital Partners Pty Ltd (BCP). BCP has provided corporate advisory services to the company in relation to its capital raisings. The services provided are based on normal commercial terms and conditions. During the financial year the Company incurred corporate advisory fees from BCP of $14,630 (2020: $Nil). An amount of $3,667 of director’s fees was owing to BCP at 30 June 2021 (2020: $5,867). Mr D Christensen had incurred expenses throughout year on behalf of the company. At 30 June 2021 a reimbursement to Mr Christensen of $2,184 was outstanding (2020: $5,509). This concludes the remuneration report, which has been audited. 18 Directors’ Report 30 June 2021 Shares under option At the date of this report, the following options to acquire ordinary shares in the Company were on issue: 0. Grantdate Expirydate Exercise price Number underoption 29/12/2020 31/12/2022 $0.02 162,907,274 No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the Company or of any other body corporate. Shares under performance rights Unissued ordinary shares of Renascor Resources Limited under performance rights at the date of this report are as follows: Grantdate Expirydate Exercise price Number underrights 03/09/2018 03/09/2022 $0.00 6,000,000 No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in any share issue of the Company or of any other body corporate. Shares issued on the exercise of options The following ordinary shares of Renascor Resources Limited were issued during the year ended 30 June 2021 and up to the date of this report on the exercise of options granted: Dateoptionsgranted 25/03/2021 21/04/2021 Exercise price Numberof sharesissued $0.02 100,000 $0.02 19,401,818 19,501,818 Shares issued on the exercise of performance rights The following ordinary shares of Renascor Resources Limited were issued during the year ended 30 June 2021 and up to the date of this report on the exercise of performance rights granted: Dateperformancerightsissued Exercise price Numberof sharesissued 30/04/2021 $0.00 6,000,000 Indemnity and insurance of officers The Company has indemnified the directors and executives of the Company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. Indemnity and insurance of auditor The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Company or any related entity against a liability incurred by the auditor. During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or any related entity. Proceedings on behalf of the Company No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or part of those proceedings. 19 Renascor Resources Limited annual report 2021 financial statements Remuneration report (audited) Non-audit services Auditor’s independence declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors’ report. Auditor BDO Audit (SA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001. On behalf of the directors David Christensen, Director 30 September 2021 Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in note 22 to the financial statements. The directors are satisfied that the provision of non- audit services during the financial year, by the auditor (or by another person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 22 to the financial statements do not compromise the external auditor’s independence requirements of the Corporations Act 2001 for the following reasons: • all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and • none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards. Officers of the Company who are former partners of BDO Audit (SA) Pty Ltd There are no officers of the Company who are former partners of BDO Audit (SA) Pty Ltd. 20 30 June 2021 Auditor’s independence declaration text to go here Tel: +61 8 7324 6000 Fax: +61 8 7324 6111 www.bdo.com.au Level 7, BDO Centre 420 King William Street Adelaide SA 5000 GPO Box 2018, Adelaide SA 5001 AUSTRALIA DECLARATION OF INDEPENDENCE BY ANDREW TICKLE TO THE DIRECTORS OF RENASCOR RESOURCES LIMITED As lead auditor of Renascor Resources for the year ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Renascor Resources Limited and the entities it controlled during the period. Andrew Tickle Director BDO Audit (SA) Pty Ltd Adelaide, 30 September 2021 BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. 21 Renascor Resources Limited annual report 2021 financial statements Financial statements Statement of profit or loss and other comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes to the financial statements Directors’ declaration Independent auditor’s report to the members of Renascor Resources Limited Shareholder information 23 24 25 26 27 57 58 62 22 Statement of profit or loss and other comprehensive income Revenue Other income Interest revenue Boosting cashflow payment Total revenue Expenses Administration and consulting Depreciation and amortisation expense Employee benefits expense Office accommodation Impairment of exploration expenditure Legal fees Other expenses Total expenses Loss before income tax expense Income tax expense Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Basic earnings per share Diluted earnings per share Theabovestatementofprofitorlossandothercomprehensiveincome shouldbereadinconjunctionwiththeaccompanyingnotes Note Consolidated 2021 $ 8,000 3,778 2020 $ - 19,598 - 100,000 11,778 119,598 (424,832) (362,327) (1,823) (2,065) 5 6 (324,364) (364,391) (30,596) (30,388) - (274,109) (13,998) (6,384) 7 (93,395) (152,509) (889,008) (1,192,173) (877,230) (1,072,575) - - (877,230) (1,072,575) - - (877,230) (1,072,575) Cents Cents (0.1) (0.1) (0.1) (0.1) 8 18 30 30 23 Renascor Resources Limited annual report 2021 financial statements Statement of financial position Assets Current assets Cash and cash equivalents Other receivables Prepayments Total current assets Non-current assets Other receivables Property, plant and equipment Exploration and evaluation Development asset Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Provisions Total current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity Theabovestatementoffinancialpositionshouldbereadinconjunction withtheaccompanyingnotes 24 Consolidated 2021 2020 (Restated) Note $ $ 9 17,273,801 1,855,784 10 109,420 206,675 67,305 13,566 17,450,526 2,076,025 10 11 12 13 45,000 30,000 9,559 3,679 1,659,037 1,250,654 17,060,233 15,134,752 18,773,829 16,419,085 36,224,355 18,495,110 14 15 441,226 231,476 601,324 100,677 1,042,550 332,153 1,042,550 332,153 35,181,805 18,162,957 16 17 18 51,903,152 34,114,480 247,340 (1,277,856) (16,968,687) (14,673,667) 35,181,805 18,162,957 Statement of changes in equity Contributed equity Share-based Business Payments Combination Reserve Reserve Share option Accumulated losses reserve Total equity Consolidated $ $ $ $ $ $ Balance at 1 July 2019 32,210,012 1,825,693 (1,417,790) Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Lapse of options (note 31) Performance rights vested (note 31) Transfer of historical performance rights Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 16) Share-based payments (note 31) - - - - - - - (1,579,734) 108,000 (108,000) - (68,284) 1,796,468 - - 70,259 - - - - - - - - Balance at 30 June 2020 34,114,480 139,934 (1,417,790) Consolidated $ $ $ Balance at 1 July 2020 34,114,480 139,934 (1,417,790) Loss after income tax expense for the year Other comprehensive income for the year, net of tax Total comprehensive income for the year Performance rights vested (note 31) - - - - - - 45,600 (45,600) - - - - Transfer to accumulated losses - - 1,417,790 Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (note 16) Share-based payments (note 31) 17,639,714 - 103,358 13,666 Balance at 30 June 2021 51,903,152 108,000 - - - - - - - - - - - - - $ - - - - - - - 139,340 (15,249,110) 17,368,805 (1,072,575) (1,072,575) - - (1,072,575) (1,072,575) 1,579,734 - 68,284 - - - - - 1,796,468 70,259 (14,673,667) 18,162,957 $ $ (14,673,667) 18,162,957 (877,230) (877,230) - - (877,230) (877,230) - (1,417,790) - - - - 17,639,714 256,364 139,340 (16,968,687) 35,181,805 Theabovestatementofchangesinequityshouldbereadinconjunctionwiththeaccompanyingnotes 25 Renascor Resources Limited annual report 2021 financial statements Statement of cash flows Cash flows from operating activities Payments to suppliers and employees (inclusive of GST) Receipts/(payments) of GST Interest received Other revenue Consolidated 2021 $ 2020 $ Note (728,952) (1,248,298) (3,903) 197,313 3,778 8,000 19,598 8,724 Net cash used in operating activities 29 (721,077) (1,022,663) Cash flows from investing activities Payments for property, plant and equipment Payments for exploration and evaluation Payments for development assets Net cash used in investing activities Cash flows from financing activities Proceeds from issue of shares Share issue transaction costs Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year (7,703) (1,925) (408,383) (437,427) (1,327,232) (1,356,512) (1,743,318) (1,795,864) 16 19,205,735 1,883,000 (1,323,323) (86,532) 17,882,412 1,796,468 15,418,017 (1,022,059) 1,855,784 2,877,843 Cash and cash equivalents at the end of the financial year 9 17,273,801 1,855,784 Theabovestatementofcashflowsshouldbereadinconjunction withtheaccompanyingnotes 26 Notes to the financial statements 30 June 2021 1. Significant accounting policies Critical accounting estimates The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated. New or amended Accounting Standards and Interpretations adopted The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. The following Accounting Standards and Interpretations are most relevant to the Group: New Accounting Standards and Interpretations not yet mandatory or early adopted Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2021. The Group has not yet assessed the impact of these new or amended Accounting Standards and Interpretations. Basis of preparation These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board (‘IASB’). Historical cost convention The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of available-for- sale financial assets, financial assets and liabilities at fair value through profit or loss, and equipment and derivative financial instruments. The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2. Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information about the parent entity is disclosed in note 26. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Renascor Resources Limited (‘Company’ or ‘parent entity’) as at 30 June 2021 and the results of all subsidiaries for the year then ended. Renascor Resources Limited and its subsidiaries together are referred to in these financial statements as the ‘Group’. Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. 27 Renascor Resources Limited annual report 2021 financial statements 1. Significant accounting policies continued Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. Interest Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset. Revenue recognition The Group recognises revenue as follows: Other revenue Revenue from contracts with customers Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised. Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the ‘expected value’ or ‘most likely amount’ method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability. Other revenue is recognised when it is received or when the right to receive payment is established. Income tax The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for: • When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or • When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. 28 Notes to the financial statements for the year ended 30 June 2021 Current and non-current classification Assets and liabilities are presented in the statement of financial position based on current and non-current classification. An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current. A liability is classified as current when: it is either expected to be settled in the Group’s normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. Deferred tax assets and liabilities are always classified as non-current. Impairment of non-financial assets Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in- use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash- generating unit. 1. Significant accounting policies continued The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available to recover the asset. Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously. Renascor Resources Limited (the ‘head entity’) and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the ‘separate taxpayer within group’ approach in determining the appropriate amount of taxes to allocate to members of the tax consolidated group. In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated group. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity. R & D Tax Incentives R&D tax incentives are considered more akin to government grants because they are not conditional upon earning taxable income and the group accounts for any R&D Tax incentives received as government grants under AASB 120 Accounting for Government Grants and Disclosure of Government Assistance. 29 Renascor Resources Limited annual report 2021 financial statements 1. Significant accounting policies continued 2. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on historical experience and on other various factors, including expectations of future events, management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are discussed below. Share-based payment transactions The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity. Details of share based payment transactions are presented in Note 31. Goods and Services Tax (‘GST’) and other similar taxes Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority. Provisions Provisions for legal claims are recognised when: the Group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. The Group has obligations to restore and rehabilitate certain areas where drilling has occurred on exploration tenements. These obligations are currently being met as the drilling is completed and as such no provision has been recognised. 30 Notes to the financial statements for the year ended 30 June 2021 2. Critical accounting judgements, estimates and assumptions continued Exploration and evaluation costs Exploration and evaluation costs have been capitalised on the basis that the Group will commence commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised. In addition, costs are only capitalised that are expected to be recovered either through successful development or sale of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they will be written off in the period in which this determination is made. Details of capitalised exploration and evaluation costs are presented in Note 12. Development assets Critical estimates and judgments are disclosed in Note 13. 31 Renascor Resources Limited annual report 2021 financial statements 3. Restatement of comparatives Correction of error During the year ended 30 June 2020, the Siviour project cost was reclassified from exploration and evaluation assets into development assets, as a definitive feasibility study indicated commercial viability of the project. On review of the costs transferred across, it was noted that not all of the relevant costs had been reclassified to development assets. A retrospective restatement of the amounts at 30 June 2020 has no impact on total or net assets, does not change calculations of recoverable amount for development assets completed for the year ended 30 June 2020, and has no impact on earnings per share previously reported. The additional amount to be reclassified from exploration and evaluation assets to development assets at 30 June 2020 is $1,600,000. Statement of financial position at the beginning of the earliest comparative period When there is a restatement of comparatives, it is mandatory to provide a third statement of financial position at the beginning of the earliest comparative period, being 1 July 2019. However, as there were no adjustments made as at 1 July 2019, the Group has elected not to show the 1 July 2019 statement of financial position. Restated amounts for 30 June 2020 are as follows: Line items affected: Reported $ Restated $ Change $ Exploration and evaluation assets 2,850,654 1,250,654 (1,600,000) Development assets Non-current assets Total assets Net assets 4. Operating segments 13,534,752 15,134,752 1,600,000 16,419,085 16,419,085 18,495,110 18,495,110 18,162,957 18,162,957 - - - The Group has identified its operating segments based on the internal reports that reviewed and used by the Managing Director (Chief Operating Decision Maker ‘CODM’) and the board of directors in assessing performance determining the allocation of resources. The Group is managed primarily on a geographic basis, that is, the location of the respective areas of interest (tenements) in Australia. Operating segments are determined on the basis of financial information reported to the board which is at the consolidated level. The Group does not have any products or services it derives revenue from. Accordingly, management currently identifies the Group as having only one reportable segment, being the development of the Siviour Graphite Project and the exploration for graphite, copper, gold, uranium and other minerals in Australia. There have been no changes in the operating segments during the year. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the Group as a whole. Accounting policy for operating segments Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as the internal reports provided to the CODM. The CODM is responsible for the allocation of resources to operating segments and assessing their performance. 32 Notes to the financial statements for the year ended 30 June 2021 5. Employee benefits expense Employee benefits expense Employee share-based payment expense Defined contribution superannuation expense Employee benefits expense capitalised Consolidated 2021 $ 2020 $ 547,542 490,426 13,666 70,259 35,355 33,166 (272,199) (229,460) 324,364 364,391 Employee share-based payment expense comprises of Performance Rights granted to Mr David Christensen. Further information pertaining to the Performance Rights can be found in Note 31 “Share Based Payments”. Included in the totals above is the employee benefits expenditure that has been capitalised as part of Exploration and evaluation assets (note 12) and Development assets (note 13). The total amount of employee benefits expenditure capitalised in the year ended 30 June 2021 is $272,199 (2020: $229,460). The total amount remunerated to employees during the year is $475,550 (2020: $593,851). 6. Office accommodation Short term lease expense 7. Other expenses Business development & marketing Investor and public relations Travel Other expenses Consolidated 2021 $ 2020 $ 30,596 30,388 Consolidated 2021 $ 2020 $ 28,208 17,942 30,307 5,907 36,766 17,794 28,973 80,007 93,395 152,509 33 Renascor Resources Limited annual report 2021 financial statements 8. Income tax expense Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 26% (2020: 27.5%) Tax effect amounts which are not deductible/(taxable) in calculating taxable income: Share-based payments Boosting Cashflow Payment Current year temporary differences not recognised Income tax expense Consolidated 2021 $ 2020 $ (877,230) (1,072,575) (228,080) (294,958) 3,553 19,321 - (27,500) (224,527) (303,137) 224,527 303,137 - - The Group has tax losses arising in Australia of $25,867,963 (2020: $22,840,659) that may be available and may be offset against future taxable profits. In addition, these tax losses can only be utilised in the future if the continuity of ownership test is passed, or if failing that, the same business test is passed. The Group had nil franking credits in its franking account at 30 June 2021 (2020: Nil). No deferred tax liability has been recognised for expenditure pertaining to exploration and evaluation. The amount of $4,554,818 is fully offset by the company’s deferred tax assets (2020: $4,299,587). No deferred tax asset has been recognised because it is not likely future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised. 9. Cash and cash equivalents Current assets Cash on hand Cash at bank Consolidated 2021 $ 2020 $ 100 100 17,273,701 1,855,684 17,273,801 1,855,784 Cash at bank accounts are interest bearing attracting normal market interest rates. As funds are held with AA/AA1 to A/A1 credit rated financial institutions (as per S&P/Moody’s ratings) there is minimal counterparty credit risk of funds held. Accounting policy for cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short- term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. The carrying amount for cash and cash equivalents equals the fair value. 34 Notes to the financial statements for the year ended 30 June 2021 10. Other receivables Current assets GST refundable Sundry receivables Research and development tax concession Non-current assets Other receivables Consolidated 2021 $ 2020 $ 47,192 5,207 9,009 50,000 53,219 151,468 109,420 206,675 45,000 30,000 154,420 236,675 Allowance for expected credit losses The Group has recognised a loss of $Nil (2020: $Nil) in profit or loss in respect of the expected credit losses for the year ended 30 June 2021. The ageing of the receivables and allowance for expected credit losses provided for above are as follows: Expected credit loss rate Carrying amount Allowance for expected credit losses Consolidated Not overdue 2021 % - 2020 % 2021 $ 2020 $ 2021 $ 2020 $ - 113,792 206,675 - - Accounting policy for trade and other receivables Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days. The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue. Other receivables are recognised at amortised cost, less any allowance for expected credit losses. 35 Renascor Resources Limited annual report 2021 financial statements 11. Property, plant and equipment Non-current assets Computer equipment Less: Accumulated depreciation Office equipment Less: Accumulated depreciation Consolidated 2021 $ 2020 $ 27,731 24,385 (22,151) (20,921) 5,580 7,764 3,464 3,407 (3,785) (3,192) 3,979 215 9,559 3,679 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated: Balance at 1 July 2019 Additions Write off of assets Depreciation expense Balance at 30 June 2020 Additions Depreciation expense Balance at 30 June 2021 Computer equipment $ Office equipment $ Total $ 4,662 1,923 (841) (2,065) 3,679 7,703 340 - - (125) 215 4,357 (593) (1,823) 3,979 9,559 4,322 1,923 (841) (1,940) 3,464 3,346 (1,230) 5,580 Accounting policy for property, plant and equipment Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. The cost of an item of plant and equipment also includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows: Plant and equipment 3-10 years The deprecation rates have not changed from the financial year ended 30 June 2020. 36 Notes to the financial statements for the year ended 30 June 2021 11. Property, plant and equipment continued The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. 12. Exploration and evaluation Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated: Balance at 1 July 2019 Expenditure during the year Payment for option to purchase land Impairment of assets Other tenements $ Siviour Project $ Total $ 3,066,444 11,967,648 15,034,092 58,319 1,074,089 1,132,408 - 225,000 225,000 (274,109) - (274,109) Reclassification to development asset in November 2019 (1,600,000) (13,266,737) (14,866,737) Balance at 30 June 2020 (restated) Expenditure during the year Receipts from farm-in Balance at 30 June 2021 1,250,654 458,383 (50,000) 1,659,037 - - - - 1,250,654 458,383 (50,000) 1,659,037 Accounting policy for exploration and evaluation assets Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current is carried forward as an asset in the statement of financial position where it is expected that the expenditure will be recovered through the successful development and exploitation of an area of interest, or by its sale, or exploration activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written off in the year in which the decision is made. Exploration and evaluation expenditure comprises of net direct costs and includes an appropriate portion of related salaries & wages expenditure associated with each area of interest. During the financial year the Group has allocated $272,199 of internal personnel costs (2020: $229,460) which form part of the exploration expenditure for the year. 37 Renascor Resources Limited annual report 2021 financial statements 13. Development asset Non-current assets Siviour project - at cost Reconciliations Consolidated 2021 2020 (Restated) $ $ 17,060,233 15,134,752 Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: Consolidated Balance at 1 July 2019 Siviour Project $ - Total $ - Reclassification from exploration and evaluation asset in November 2019 (see note 12) 14,866,737 14,866,737 Expenditure after reclassification Research and Development Tax Incentive # Balance at 30 June 2020 (restated) Expenditure after reclassification Research and Development Tax Incentive # Balance at 30 June 2021 Assessing impairment on reclassification 419,483 419,483 (151,468) (151,468) 15,134,752 15,134,752 1,978,700 1,978,700 (53,219) (53,219) 17,060,233 17,060,233 The development asset had been assessed for impairment on reclassification from exploration and evaluation expenditure. In determining the recoverable amount of the asset, estimates were made regarding the present value of future cashflows. These estimates require significant management judgments and assumptions and are subject to risk and uncertainty that may be beyond the control of the group. The recoverable amount estimate is most sensitive to assumptions regarding the long-term forecasts of production capacity, graphite prices and discount rates. The Company has considered market conditions and changes to these estimates and is satisfied that there is no impairment to the carrying value of the development asset. The main estimates and assumptions used are as follows: • Production: the model is based on staged development with average production of 80ktpa during the first 4 years, before expansion to 144ktpa in years 5 to 10. • Graphite prices: prices are based on the latest internal forecasts taking into account expected demand and supply, benchmarked with external sources of information. • Discount rate: a discount rate 10% has been used for financial modelling. 38 Notes to the financial statements for the year ended 30 June 2021 13. Development asset continued Accounting policy for development assets Expenditure is transferred from ‘Exploration and evaluation assets’ to ‘Development asset’ once the work completed to date supports the future development of the property and such development receives appropriate approvals. After transfer of the exploration and evaluation assets, all subsequent expenditure on the construction, installation or completion of infrastructure facilities is capitalised in ‘development asset’. Development expenditure is net of proceeds from the sale of ore extracted during the development phase to the extent that it is considered integral to the development of the asset. Any costs incurred in the testing of assets to determine if they are functioning as intended, are capitalised, net of any proceeds received from selling any product produced while testing. Where these proceeds exceed the cost of testing, any excess is recognised in the statement of profit or loss and other comprehensive income. After production starts, all assets included in “Development asset’ are then transferred to ‘Producing mine’. # Note: Refundable tax incentives (Research and development tax concession) are accounted for as government grants under AASB 120 Accounting for Government Grants and Disclosure of Government Assistance and offset against capitalised development asset. 14. Trade and other payables Current liabilities Trade and other payables Sundry creditor and accrued expenses Consolidated 2021 $ 2020 $ 389,026 170,265 52,200 61,211 441,226 231,476 Accounting policy for trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. 39 Renascor Resources Limited annual report 2021 financial statements 15. Provisions Current liabilities Annual leave Long service leave Settlement Consolidated 2021 $ 2020 $ 17,603 25,262 83,721 75,415 500,000 - 601,324 100,677 Accounting policy for provisions Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is recognised as a finance cost. Accounting policy for employee benefits Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. Amounts not expected to be settled within the next 12 months The current provision for employee benefits includes all unconditional entitlements where employees have completed the required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount is presented as current, since the Group does not have an unconditional right to defer settlement. However, based on past experience, the Group does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. Provision for Settlement Renascor entered into an agreement to pay a service provider $100,000 in cash and $400,000 in cash or shares in relation to services provides for the Siviour Definitive Feasibility Study (DFS) with a service provider under which the service provider agreed to contribute $1 million of services towards early project works on the basis that they may subsequently be awarded the engineering procurement and construction contract for the Siviour project. Renascor subsequently entered into contract with this service provider to provide services in relation the Siviour Definitive Feasibility Study (DFS), with the parties agreeing that the $1 million early project works commitment would apply toward the DFS. In performing work in the DFS, the service provider incurred costs exceeding the $1 million contribution amount. Subsequent to year end, Renascor has agreed to pay $100,000 in cash and $400,000 in cash or shares in full and final satisfaction of amounts owing for services provided in relation to the Siviour Definitive Feasibility Study. 40 Notes to the financial statements for the year ended 30 June 2021 16. Issued capital Consolidated 2021 Shares 2020 shares 2021 $ 2020 $ Ordinary shares - fully paid 1,878,711,652 1,330,606,165 51,903,152 34,114,480 Movements in ordinary share capital Details Balance Date Shares Issue price $ 1 July 2019 1,153,424,340 32,210,012 Shares issued on vesting of performance rights 8 Nov 2019 6,000,000 $0.02 108,000 Conditional placement to professional & sophisticated investors Conditional placement to professional & sophisticated investors Issue of Ordinary Shares pursuant to Share Purchase Plan Issue of Ordinary Shares pursuant to Share Purchase Plan Less: Transaction costs arising on share issues, net of tax 12 Dec 2019 110,454,528 $0.01 1,215,000 19 Dec 2019 2,818,200 $0.01 31,000 13 Jan 2020 45,454,552 $0.01 500,000 6 May 2020 12,454,545 $0.01 137,000 - $0.00 (86,532) Balance 30 June 2020 1,330,606,165 34,114,480 Issue of securities as consideration for advisory services provided 15 July 2020 4,091,228 $0.01 33,000 Share placement 25 Sept 2020 312,681,819 $0.01 3,439,500 Issue of shares to directors in lieu of fees and in accordance with NEDSP 15 Dec 2020 3,162,080 $0.01 37,358 Share placement to directors 16 Dec 2020 12,136,364 $0.01 133,500 Issue of securities as consideration for advisory services 15 Jan 2021 3,032,178 25 March 2021 100,000 $0.01 $0.02 33,000 2,000 21 April 2021 19,401,818 $0.02 388,036 Exercise options Exercise options Shares issued on vesting of performance rights 30 April 2021 6,000,000 $0.01 45,600 Share placement 4 May 2021 187,500,000 $0.08 15,000,000 Less: Transaction costs arising on share issues, net of tax - $0.00 (1,323,322) Balance 30 June 2021 1,878,711,652 51,903,152 Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not have a limited amount of authorised capital. On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. 41 Renascor Resources Limited annual report 2021 financial statements 16. Issued capital continued Share buy-back There is no current on-market share buy-back. Capital risk management The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents. In order to maintain or adjust the capital structure, the Group may adjust the return capital to shareholders, issue new shares or sell assets to reduce debt. The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current Company’s share price at the time of the investment. The Group is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies. The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year. The capital risk management policy remains unchanged from the 30 June 2020 Annual Report. Accounting policy for issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. 17. Reserves Options reserve Performance rights reserve Business combination reserve Share-based payments reserve Consolidated 2021 $ 2020 $ 139,340 - 108,000 139,934 - (1,417,790) 247,340 (1,277,856) The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their remuneration, and other parties as part of their compensation for services. Business combination The reserve is used to recognise the difference between the value of consideration paid to acquire the non- controlling interests and value of the non-controlling interest. 42 Notes to the financial statements for the year ended 30 June 2021 17. Reserves continued Movements in reserves Movements in each class of reserve during the current and previous financial year are set out below: Consolidated Options reserve $ Performance rights reserve $ Business combination reserve $ Total $ Balance at 1 July 2019 1,579,734 245,959 (1,417,790) 407,903 Performance rights expensed over vesting period Performance rights vested Performance rights lapsed Options lapsed Balance at 30 June 2020 Performance rights expensed over vesting period Performance rights vested Options issued Transfer to accumulated losses - - - 70,259 (108,000) (68,284) (1,579,734) - - - - - 70,259 (108,000) (68,284) (1,579,734) - - - 139,340 - 139,934 (1,417,790) (1,277,856) 13,666 (45,600) - - - - - 13,666 (45,600) 139,340 1,417,790 1,417,790 Balance at 30 June 2021 139,340 108,000 - 247,340 18. Accumulated losses Accumulated losses at the beginning of the financial year Loss after income tax expense for the year Transfer from business combination reserve Transfer from options reserve Transfer from performance rights reserve Consolidated 2021 $ 2020 $ (14,673,667) (15,249,110) (877,230) (1,072,575) (1,417,790) - - - 1,579,734 68,284 Accumulated losses at the end of the financial year (16,968,687) (14,673,667) 19. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. 43 Renascor Resources Limited annual report 2021 financial statements 20. Financial instruments Financial risk management objectives The Group’s activities expose it to a variety of financial risks: market risk (including price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The board is responsible for managing the Group’s finance facilities. The Group does not currently undertake hedging of any kind and is not directly exposed to currency risk. The Group holds the following financial instruments: Consolidated 2021 $ 2020 $ 17,273,701 1,855,784 105,573 236,675 17,379,274 2,092,459 389,026 170,265 52,201 61,211 441,227 231,476 Financial assets at amortised cost Cash and cash equivalents Other receivables Total financial assets Financial liabilities at amortised cost Trade and other payables Sundry creditors & accrued expenses Total financial liabilities at amortised cost Market risk Price risk The Group is not exposed to any significant price risk. Interest rate risk As at 30 June 2021 and 30 June 2020, the Group had no borrowings. As such the group is not exposed to any significant interest rate risk. At the reporting date, the Company is exposed to changes in market interest rates through its bank deposits, which are subject to variable interest rates. The following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in interest rates of +0.5% and -0.5% (2020: +0.5%/-0.5%), with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on the cash and cash equivalents held at the beginning of each reporting period. All other variables are held constant. 44 Notes to the financial statements for the year ended 30 June 2021 20. Financial instruments continued Basis points increase Basis points decrease Basis points Effect on profit before tax change Effect on Basis points Effect on profit before tax change equity Effect on equity 50 9,278 9,278 (50) (9,278) (9,278) 50 14,389 14,389 (50) (14,389) (14,389) Consolidated 2021 Cash and cash equivalents Consolidated 2020 Cash and cash equivalents Credit risk Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. The majority of cash and cash equivalents is held with a single financial institution. Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group does not hold any collateral to mitigate this risk. The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all customers of the Group based on recent sales experience, historical collection rates and forward-looking information that is available. Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a period greater than 1 year. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates: Cash and cash equivalents Minimum rating of A Liquidity risk Consolidated 2021 $ 2020 $ 17,273,701 1,855,784 Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and close out market positions. At the end of each reporting period the Group held deposits at call of $17,273,701 (2020: $1,855,784) that are expected to readily generate cash inflows for managing liquidity risk. The Group has sufficient funds to finance its operations and exploration activities and to allow for reasonable contingencies. Remaining contractual maturities The following tables detail the Group’s remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position. 45 Renascor Resources Limited annual report 2021 financial statements 20. Financial instruments continued Weighted average interest rate % 1 year or less $ Between 1 and 2 years $ Remaining Between 2 contractual and 5 years Over 5 years maturities $ $ $ Consolidated 2021 Non-derivatives Non-interest bearing Trade payables Other payables Total non-derivatives - - 389,026 52,201 441,227 Consolidated 2020 % $ Non-derivatives Non-interest bearing Trade payables Other payables Total non-derivatives - - 170,265 61,211 231,476 - - - $ - - - - - - $ - - - - - - $ - - - 389,026 52,201 441,227 $ 170,265 61,211 231,476 The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above. Fair value of financial instruments Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. 46 Notes to the financial statements for the year ended 30 June 2021 21. Key management personnel disclosures Compensation The aggregate compensation made to directors and other members of key management personnel of the Group is set out below: Short-term employee benefits Post-employment benefits Long-term benefits Performance rights NEDSP & director’s shares Consolidated 2021 $ 2020 $ 550,542 517,387 26,639 25,948 7,540 6,840 13,666 70,259 35,399 17,319 633,786 637,753 Details of the remuneration of each director of the Company and each of the other key management personnel of the Group, including their personally related entities, are set out in the remuneration report. Other transactions with key management personnel Mr G W McConachy is a director of Euro Exploration Services Pty Ltd (Euro). Euro has provided the company with exploration services, geochemical sampling services as well as the provision of geological personnel services during the year. The services provided are based on normal commercial terms and conditions. During the financial year the Company incurred costs of $68,664 (2020: $24,376) from Euro. An amount of $3,214 (2020: $2,677) was owing to Euro at 30 June 2021. Mr G W McConachy provided the company with exploration consulting services during the year. The services provided are based on normal commercial terms and conditions. During the financial year the Company incurred costs of $38,399 (2020: $4,287) from GW MCConachy & Co Pty Ltd. An amount of $9,075 (2020: $Nil) was owing to GW MCConachy & Co Pty Ltd at 30 June 2021. Mr S Bizzell is a director of Bizzell Capital Partners Pty Ltd (BCP). BCP has provided corporate advisory services to the company in relation to its capital raisings. The services provided are based on normal commercial terms and conditions. During the financial year the Company incurred corporate advisory fees from BCP of $14,630 (2020: $Nil). An amount of $3,667 of director’s fees was owing to BCP at 30 June 2021 (2020: $5,867). Mr D Christensen had incurred expenses throughout year on behalf of the company. At 30 June 2021 a reimbursement to Mr Christensen of $2,184 was outstanding (2020: $5,509). 47 Renascor Resources Limited annual report 2021 financial statements 22. Remuneration of auditors During the financial year the following fees were paid or payable for services provided by BDO Audit (SA) Pty Ltd, the auditor of the Company: Audit services - BDO Audit (SA) Pty Ltd Audit and review of the financial statements Other services Amounts paid/payable to a related practice of the auditor for tax compliance for the entity or any entity in the Group Amounts paid/payable to a related practice of the auditor for advisory services for the entity or any entity in the Group Consolidated 2021 $ 2020 $ 37,760 33,000 2,808 3,030 - 7,169 2,808 10,199 40,568 43,199 23. Contingent liabilities The Group has previously entered into an Asset Sale Agreement with Hiltaba Gold Pty Ltd for EL5856 (Prev EL4707). Under the agreement, the company has granted a 1% royalty of the Net Smelter Return. The timing and amount of any financial effect relating to these agreements are dependent on the successful exploration and subsequent exploitation of the associated tenements. 48 Notes to the financial statements for the year ended 30 June 2021 24. Commitments In order to maintain current rights to tenure to exploration tenements, the Group is required to perform minimum exploration work to meet the minimum expenditure requirements specified by various State governments. These amounts are subject to renegotiation when application for a mining lease is made and at other times. These amounts, which are not provided for in the financial report and are expected to be capitalised as incurred but not recognised as liabilities, are as follows: Consolidated 2021 $ 2020 $ Exploration and mining lease commitments Commitments in relation to exploration and mining leases held at the end of each reporting period but not recognised as liabilities, payable: Within one year 1,869,500 2,004,500 To keep tenements in good standing, work programs should meet certain minimum expenditure requirements. If the minimum expenditure requirements are not met, the Company has the option to negotiate new terms or relinquish the tenements. The Company also has the ability to meet expenditure requirements by joint venture or farm-in agreements. Operating Lease Commitments The office lease expired on 30 November 2013. The company continues to occupy the office with rent payable monthly in advance on a month to month basis. 25. Related party transactions Parent entity Renascor Resources Limited is the parent entity. Subsidiaries Interests in subsidiaries are set out in note 27. Key management personnel Disclosures relating to key management personnel are set out in note 21 and the remuneration report included in the directors’ report. Transactions with related parties There were no transactions with related parties during the current and previous financial year, aside from those set out in note 21. Receivable from and payable to related parties There were no trade receivables from or trade payables to related parties at the current and previous reporting date, aside from those set out in note 21. Loans to/from related parties There were no loans to or from related parties at the current and previous reporting date. 49 Renascor Resources Limited annual report 2021 financial statements 26. Parent entity information Set out below is the supplementary information about the parent entity. Statement of profit or loss and other comprehensive income Loss after income tax Total comprehensive income Statement of financial position Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Options reserve Performance rights reserve Accumulated losses Total equity Parent 2021 $ 2020 $ (852,212) (1,047,558) (852,212) (1,047,558) Parent 2021 $ 2020 $ 17,450,426 2,075,925 36,224,359 18,495,114 1,042,551 332,157 1,042,551 332,157 51,903,152 34,114,480 139,340 - 108,000 139,934 (16,968,684) (16,091,457) 35,181,808 18,162,957 50 Notes to the financial statements for the year ended 30 June 2021 26. Parent entity information continued Guarantees entered into by the parent entity in relation to the debts of its subsidiaries The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2021. Contingent liabilities The Group has previously entered into an Asset Sale Agreement with Hiltaba Gold Pty Ltd for EL5856 (Prev EL4707). Under the agreement, the company has granted a 1% royalty of the Net Smelter Return. The timing and amount of any financial effect relating to these agreements are dependent on the successful exploration and subsequent exploitation of the associated tenements. Capital commitments - Property, plant and equipment The parent entity had no capital commitments for property, plant and equipment as at 30 June 2021. Significant accounting policies The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the following: • Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity. • Investments in associates are accounted for at cost, less any impairment, in the parent entity. • Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator of an impairment of the investment. 27. Interests in subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1: Name Kulripa Uranium Pty Ltd Astra Resources Pty Ltd Sol Jar Property Pty Ltd Eyre Peninsula Minerals Pty Ltd Ausmin Development Pty Ltd Principal place of business / Country of incorporation 2021 % 2020 % Ownership interest Australia Australia Australia Australia Australia 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 28. Events after the reporting period No matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years. 51 Renascor Resources Limited annual report 2021 financial statements 29. Reconciliation of loss after income tax to net cash used in operating activities Loss after income tax expense for the year Adjustments for: Depreciation and amortisation Write off of non-current assets Share-based payments Write off exploration Change in operating assets and liabilities: Increase/(decrease) in provisions Increase/(decrease) in trade and other payables (Increase)/decrease in other receivables (Increase)/decrease in other operating assets Net cash used in operating activities Consolidated 2021 $ 2020 $ (877,230) (1,072,575) 1,823 2,065 - 841 13,666 70,259 - 291,157 (8,364) (11,918) 218,761 (284,972) (54,733) (7,520) (15,000) (10,000) (721,077) (1,022,663) 52 Notes to the financial statements for the year ended 30 June 2021 30. Earnings per share Loss after income tax Basic earnings per share Diluted earnings per share Consolidated 2021 $ 2020 $ (877,230) (1,072,575) cents (0.1) (0.1) cents (0.1) (0.1) number number Weighted average number of ordinary shares used in calculating basic earnings per share 1,617,816,869 1,242,788,242 Weighted average number of ordinary shares used in calculating diluted earnings per share 1,617,816,869 1,242,788,242 Options and performance rights are considered anti-dilutive as the Group is loss making. At 30 June 2021 were anti-dilutive options 162,907,274 (2020: $Nil) and 6,000,000 performance rights (2020: 12,000,000). Accounting policy for earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to the owners of Renascor Resources Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. 53 Renascor Resources Limited annual report 2021 financial statements 31. Share-based payments Directors and executives share based payments For the period 1 April 2020 to 30 September 2020 50% of the non-executive director fees have been paid in cash, with the remaining 50% of the fees settled by the issues of shares pursuant to the NEDSP as outlined below. Non-executive director Richard Keevers Stephen Bizzell Geoffrey McConachy Number of Fees shares $10,958.00 927,514 $8,800.00 744,855 $8,000.00 677,141 Commencing 1 May 2020 Mr Christensen received payment for 90% of his directors fees, with 10% of his fees withheld by the Company to be paid via the issue of share capital subject to shareholder approval. The shares for the period 1 May 2020 to 30 September 2020 were issued following shareholder approval at the 2020 AGM totaling $9,600, shares for the period 1 October 2020 to 30 June 2021 had not been issued amounting to $15,360. There are no options that have been granted to directors and senior management as part of their remuneration (2020: Nil). Share based payments to consultants During the period the amount of the equity settled share-based payment recognised in the current period in respect of shares issued to consultants was $66,000 (2020: $Nil). During the period 20,000,000 listed options with a fair value of $139,340 were issued to the Lead Managers as consideration for capital raising services provided (2020:Nil). The options are exercisable at $0.02, expiring on 31 December 2022. The fair value of options issued was debited directly to issued capital, and no expense was recognised in the period. 2021 Grant date Expiry date Exercise price Balance at the start of the year Granted Exercised Expired forfeited/ other Balance at the end of the year 29/12/2020 31/12/2022 $0.02 - 20,000,000 - - 20,000,000 Performance rights granted to directors and senior management At the Extraordinary General Meeting held on 3 September 2018 Shareholders of the Company granted approval for the issue of performance rights to Mr David Christensen. Details of the performance rights are in the Notice of Extra Ordinary General Meeting dated 1 August 2018. However the vesting conditions are outlined below: Tranche A Performance Rights. 6,000,000 Performance Rights will vest upon the completion of a positive Definite Feasibility Study in respect of the production of graphite concentrates. Tranche B Performance Rights. 6,000,000 Performance Rights will vest upon the commencement of construction of a commercial graphite concentrate production facility Tranche C Performance Rights. 6,000,000 Performance Rights will vest upon (i) the share price of Renascor ordinary shares having achieved a closing price of in excess of $0.055 for five consecutive days after the issue date of such Performance Rights, and (ii) the date that is two and one-half years after the issue date of such Performance Rights. The Performance Rights are expensed over the expected vesting period. The total value of Performance Rights recognised in the current period is $13,666 (2020: $70,259) 54 Notes to the financial statements for the year ended 30 June 2021 31. Share-based payments continued The performance rights were valued as outlined below: Tranche A Tranche B Tranche C Total Total value at Expensed grant date during the year $ 108,000 108,000 45,600 261,600 $ - - 13,666 13,666 The tranches were valued using the Black Scholes pricing model that takes into account the term of the Performance Rights, the vesting and performance criteria (if applicable), the non-tradable nature of the rights (if applicable), the share price at grant date, expected price volatility of the underlying share, the expected dividend yield, the probability that the Performance Rights will issue and the risk free interest rate for the term of the Performance Right. The probability that the Tranche C rights will vest (38%) was determined using the Monte Carlo simulation. This model takes into account the randomness of the share price movements and the volatility of the underlying share. Set out below are summaries of performance rights granted to directors and senior management: 2021 Grant date Expiry date Exercise price Balance at the start of the year Granted Vested Expired forfeited/ other Balance at the end of the year 03/09/2018 03/09/2022 $0.00 6,000,000 03/09/2018 03/09/2022 $0.00 6,000,000 12,000,000 2020 03/09/2018 03/09/2022 $0.00 6,000,000 03/09/2018 03/09/2022 $0.00 6,000,000 03/09/2018 03/09/2022 $0.00 6,000,000 18,000,000 - - - - - - - (6,000,000) - (6,000,000) (6,000,000) - - (6,000,000) - - - - - - - - 6,000,000 6,000,000 - 6,000,000 6,000,000 12,000,000 Set out below are the performance rights exercisable at the end of the financial year: Grant date Expiry date 03/09/2018 03/09/2022 03/09/2018 03/09/2022 2021 Number 2020 Number - 6,000,000 6,000,000 6,000,000 6,000,000 12,000,000 55 Renascor Resources Limited annual report 2021 financial statements Notes to the financial statements for the year ended 30 June 2021 31. Share-based payments continued The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 1.4 years (2020: 2.4 years). Fair value of performance rights granted: The assessed fair value at grant date of performance rights is allotted equally over the period from grant date to vesting date. The fair value was independently determined using a Black Scholes option pricing model. that takes into account the exercise price, the term of the option, the vesting and performance criteria (if applicable), the impact of dilution, the non-tradable nature of the option (if applicable), the share price at grant date, expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. Historical volatility of a group of comparable companies has been the basis of determining expected share price volatility, as it is assumed that this is indicative of future movements. No adjustment has been made to the life of the option based on no past history regarding expected exercise or any variation of the expiry date. Accordingly, the expected life of the options has been taken to the full period of time from grant date to expiry date, which may fail to eventuate in the future. The valuation model input also assumes no dividend yield on the Performance Shares. Accounting policy for share-based payments Share-based compensation benefits are provided to directors, executives and consultants through the granting of share options and performance rights. Options and performance rights are granted for no cash consideration. When these share options and performance rights are granted, the fair value of the options and performance rights issued are recognised as an employee benefits expense with a corresponding increase in equity. The amount recognised as an expense is adjusted to reflect the number of share options and performance rights for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of share options and performance rights that meet the related service and non-market performance conditions at the vesting date. The fair value of share options and performance rights are measured using an appropriate pricing model. Measurement inputs include the share price on measurement date, exercise price of the instrument, expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option and performance rights. Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value. Upon the exercise of options and performance rights, the balance of the share-based payments reserve relating to those options and performance rights is transferred to share capital. Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied. If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification. 56 Directors’ declaration In the directors’ opinion: • the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; • the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in note 1 to the financial statements; • the attached financial statements and notes give a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the financial year ended on that date; and • there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. The directors have been given the declarations required by section 295A of the Corporations Act 2001. Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001. On behalf of the directors ___________________________ David Christensen, Director 30 September 2021 57 Renascor Resources Limited annual report 2021 financial statements Independent auditor’s report to the members of Renascor Resources Limited 58 Independent auditor’s report to the members of Renascor Resources Limited text to go here Tel: +61 8 7324 6000 Fax: +61 8 7324 6111 www.bdo.com.au BDO Centre Level 7, 420 King William Street Adelaide SA 5000 GPO Box 2018 Adelaide SA 5001 Australia INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RENASCOR RESOURCES LIMITED Report on the Audit of the Financial Report Opinion We have audited the financial report of Renascor Resources Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration. In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) (ii) Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. BDO Audit (SA) Pty Ltd ABN 33 161 379 086 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (SA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. 59 Renascor Resources Limited annual report 2021 financial statements Independent auditor’s report to the members of Renascor Resources Limited text to go here Recoverability of exploration and evaluation assets KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN OUR AUDIT Refer to note 12 in the financial report. Our procedures, amongst others, included: As at 30 June 2021, the Group has recognised significant exploration and evaluation assets. The carrying value of exploration and evaluation assets represents a significant asset of the group and assessing whether facts or circumstances exist to suggest that impairment indicators were present, and if present, whether the carrying amount of this asset may exceed its recoverable amount. This assessment involves significant judgement applied by management and was considered key to the audit. • Evaluating management’s assessment of whether impairment indicators in accordance with AASB 6 Exploration for and Evaluation of Mineral Resources have been identified across the group’s exploration projects. • Verifying current tenement licences to determine whether the group has the rights to tenure and maintain the tenements in good standing. • Obtaining the exploration budget for the 2022 financial year to assess whether there is reasonable forecasted expenditure to confirm continued exploration spend for the projects. • Reviewing ASX announcements and Board meeting minutes for the year and subsequent to year end for exploration activity to identify any indicators of impairment. • For each area of interest where impairment indicators existed, we considered the completeness and accuracy of amounts impaired. Other information The directors are responsible for the other information. The other information comprises the information in the Group’s annual report for the year ended 30 June 2021, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. 60 Independent auditor’s report to the members of Renascor Resources Limited text to go here Auditor’s responsibilities for the audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our auditor’s report. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 11 to 18 of the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Renascor Resources Limited, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. BDO Audit (SA) Pty Ltd Andrew Tickle Director Adelaide, 30 September 2021 61 Renascor Resources Limited annual report 2021 financial statements Shareholder information Shareholder information 62 Shareholder information The shareholder information set out below was applicable as at 9 September 2021. Distribution of equitable securities Analysis of number of equitable security holders by size of holding: 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Holding less than a marketable parcel Equity security holders Ordinary shares Options over ordinary shares Number of holders % of total shares issued Number of holders % of total shares issued 86 505 1,202 4,658 2,199 8,650 266 0.99 5.84 13.90 53.85 25.42 100.00 3.08 4 5 28 177 222 436 6 0.92 1.15 6.42 40.59 50.92 100.00 1.38 Twenty largest quoted equity security holders: The names of the twenty largest security holders of quoted equity securities are listed below: Kabininge Nominees Pty Ltd Renascor Pty Ltd Mr Richard Edward Keevers HSBC Custody Nominees (Australia) Limited David Christensen BNP Paribas Nominees Pty Ltd ACF Clearstream Sarwell Pty Ltd Citicorp Nominees Pty Limited Mr Adam Andrew MacDougall Mrs Tracey Ann Mezzino BNP Paribas Nominees Pty Ltd J P Morgan Nominees Australia Pty Limited Mr Douglas Young RMVIC Pty Ltd Mr Ronald Patrick O’Brien & Mrs Lynette Gaye O’Brien CPS Control Systems Pty Limited Elution Group Pty Ltd Mr Timothy John Nixon Binney & Mrs Dianne Pamela Binney BNP Paribas Nominees Pty Ltd Six Sis Ltd Geoffrey William McConachy Ordinary shares Number held % of total shares issued 110,930,528 56,000,000 43,782,842 37,115,325 22,573,811 22,115,135 20,000,000 19,947,925 17,875,000 13,500,000 12,529,613 11,813,098 10,400,000 10,281,135 10,252,000 9,941,112 9,500,000 9,000,000 8,299,600 7,668,000 5.90 2.98 2.33 1.98 1.20 1.18 1.06 1.06 0.95 0.72 0.67 0.63 0.55 0.55 0.55 0.53 0.51 0.48 0.44 0.41 463,525,124 24.68 63 Renascor Resources Limited annual report 2021 financial statements Shareholder information David Christensen Unquoted equity securities Options over ordinary shares issued Substantial holders Substantial holders in the Company are set out below: Kabininge Nominees Pty Ltd Voting rights The voting rights attached to ordinary shares are set out below: Performance rights over ordinary shares Performance rights over ordinary shares % of total Number held 6,000,000 issued – Number on issues 162,907,274 Number of holders 436 Ordinary shares Number held 110,930,528 % of total shares issued 5.90 Ordinary shares On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote. Restricted Securities No restricted securities were on issue at 9 September 2021. There are no other classes of equity securities. Interests in tenements at 30 June 2021 Description Malbrom - South Australia Lipson Cove - South Australia Verran - South Australia Malbrom West - South Australia Dutton Bay - South Australia Willouran - South Australia Flat Hill (Callanna) - South Australia Witchelina - South Australia Outalpa - South Australia Cutana - South Australia Iron Baron - South Australia Old Wartaka - South Australia Carnding - South Australia Tarcoola - South Australia Siviour Project - South Australia 64 Tenement number Interest owned % EL 6197 EL 6423 EL 6469 EL 5714 EL 6032 EL 6170 EL 5586 EL 6403 EL 6450 EL 6451 EL 5822 EL 6191 EL 5856 ELA 2020/00110 ML 6495 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Shareholder information Annual Review of Ore Reserves and Mineral Resources In accordance with ASX Listing Rules Chapter 5, the Company has performed an annual review of all JORC- compliant Ore Reserves and Mineral Resources as at 30 June 2021. A maiden Mineral Resource was calculated in March 2016 as released to the ASX on March 2016 and updated in October 2016 (ASX announcement 26 October 2017), March 2017 (ASX announcement 17 March 2017) and April 2019 (ASX announcement 30 April 2019). An updated Ore Reserve estimate was calculated as part of the Definitive Feasibility Study in July 2020 and reported to the ASX on 21July 2020. The Company considers this Ore Reserve to be accurate as of 30 June 2021. Siviour Project 1. Siviour Ore Reserves Summary Proven Probable Total 30 June 2021 30 June 2020 Tonnes (Mt) Grade (%TGC) Graphite (Mt) Tonnes (Mt) Grade (%TGC) Graphite (Mt) 15.8 35.8 51.5 8.4% 6.9% 7.4% 1.3 2.5 3.8 - - - - - - - - - 2. Siviour Mineral Resources Summary Measured Indicated Inferred Total 30 June 2021 30 June 2020 Tonnes (Mt) Grade (%TGC) Graphite (Mt) Tonnes (Mt) Grade (%TGC) Graphite (Mt) 15.8 39.5 32.1 87.4 8.8% 7.2% 7.2% 7.5% 1.4 2.8 2.6 6.6 15.8 39.5 32.1 87.4 8.8% 7.2% 7.2% 7.5% 1.4 2.8 2.6 6.6 Corporate Governance - Mineral Resource and Ore Reserve Calculations Mineral Resources and Ore Reserves are estimated by suitably qualified consultants in accordance with the JORC Code, using industry standard techniques and internal guidelines for the estimation and reporting of Ore Reserves and Mineral Resources. These estimates and the supporting documentation are then reviewed by suitably qualified Competent Persons from the Company. All Ore Reserve estimates are prepared in conjunction with feasibility studies which consider all material factors. The Mineral Resources and Ore Reserves Statements included in the Annual Report are reviewed by suitably qualified Competent Persons from the Company prior to its inclusion. Cross Referencing of the Resources Announcements For more details regarding the Siviour resources please see the announcement of 21 July 2020 https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02256866-2A1237786?access_ token=83ff96335c2d45a094df02a206a39ff4 65 Renascor Resources Limited annual report 2021 financial statements Personal notes 66 Corporate directory Renascor Resources Limited ABN 90 135 531 341 Directors Richard Keevers, Non-ExecutiveChairman David Christensen, ManagingDirector Geoffrey McConachy, Non-ExecutiveDirector Stephen Bizzell, Non-ExecutiveDirector Company secretary Pierre van der Merwe Jon Colquhoun(appointed2July2021) Registered office & principal place of business 36 North Terrace Kent Town SA 5067 Telephone : + 61 8 363 6989 Email: info@renascor.com.au Website: www.renascor.com.au Share register Link Market Services Limited ANZ Building Level 15, 324 Queen Street Brisbane QLD 4000 Phone: + 61 2 8280 7454 Fax: + 61 2 9287 0303 Auditor BDO Audit (SA) Pty Ltd Stock exchange listing Renascor Resources Limited shares are listed on the Australian Securities Exchange (ASX code: RNU) ASX code: RNU Australian Stock Exchange ASX code: RNU Frankfurt Stock Exchange (Börse Frankfurt) FSE code: RU8 www.renascor.com.au 1 2 0 2 t r o p e r l a u n n a d e t i m i L s e c r u o s e R r o c s a n e R 67 Renascor Resources Limited annual report 2021 financial statements 68
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