2020 Annual Report
ABN: 55 095 006 090
ReNu Energy Limited, Corporate House, Kings Row 1, Level 2, 52 McDougall Street, Milton, QLD 4064
Phone: +61 7 3721 7500 | Fax: +61 7 3721 7599 | Email: info@renuenergy.com.au
ABN: 55 095 006 090
2020 Annual Report
Contents
Chairman’s & CEO’s Letter
Directors' Report
Auditors’s Independence Declaration to the Directors Of ReNu Energy Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Directors' Declaration
Independent Auditor’s Report
Corporate Governance & Shareholder Information
Company Directory
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2020 Annual Report
Chairman’s & CEO’s Letter
Dear Shareholders
Consistent with the strategy presented at last year’s AGM, the 2020 financial year was a period of transition,
change and renewed focus for ReNu Energy Limited (‘The Company’). The Company:
Completed the sale of the solar operations and repaid all debt.
Implemented Board and management changes and restructured its cost base.
Prioritised and made substantive steps towards geothermal remediation.
Reviewed the bioenergy investments, negotiated and agreed terms to divest.
Actively pursued the identification and negotiation of potential merger or acquisition opportunities.
Appointed KPMG Corporate Finance as financial advisor for a potential corporate combination
transaction.
Completion of solar operations sale
ReNu Energy completed the sale of the solar operations to CleanPeak Energy Pty Ltd on 4 September 2019
for $5.775 million (the sale was first announced to shareholders on 2 August 2019). The sale proceeds
provided ReNu Energy with the capital to (i) repay all debt, (ii) continue operations and (iii) undertake a
considered assessment of the geothermal remediation obligations in the Cooper Basin and the bioenergy
operational assets.
Review of cost structure, Board and management changes
Following the sale of solar operations, the Board and management critically assessed ReNu Energy’s cost
structure with tangible changes implemented to reduce costs whilst ensuring the Company secured the
experience and skills necessary to (i) finalise the abandonment of the two remaining wells in the Cooper
Basin and (ii) assess and negotiate strategic corporate combinations and renewable energy development
opportunities.
Changes implemented included (i) a material and corresponding reduction in resources and staffing
requirements, (ii) board rationalisation and executive renewal and (iii) an office relocation.
Board and management changes during the 2020 financial year included:
Resignations during September and October 2019 of Craig Ricato as CEO, Warren Leitao as COO
and Matthew Scott as CFO and Company Secretary.
Appointments in September 2019 of Board member Tony Louka as interim CEO and Managing
Director and Greg Watson as part-time CFO and Company Secretary.
The appointment of Tim Scholefield in December 2019 as Executive Director with responsibility to
coordinate, implement and oversee the permanent abandonment of the two remaining geothermal
wells.
The appointment of Boyd White as Non-Executive Director in December 2019 and as Chairman in
February 2020.
The resignations of Richard Brimblecombe as Non-Executive Director in December 2019 and Steve
McLean as Chairman in June 2020.
2020 Annual Report
Page 1
2020 Annual Report
The appointment in February 2020 of Greg Watson (former CFO) as CEO with Tony Louka returning
to his previous position as Non-Executive Director.
The credentials of the Board and management are set out in the Directors’ report section of this annual report.
The Board and management have the skills and experience to lead ReNu Energy forward demonstrated by
the steps taken and plans outlined below.
Geothermal operations
During the 2020 financial year, ReNu Energy progressed the abandonment of the two remaining geothermal
wells and surrender of the GRL3 geothermal tenement located in the South Australian Cooper Basin.
Activities included:
The appointment of Tim Scholefield in December 2019 as Executive Director Geothermal
Remediation. With over 30 years’ experience in conventional and unconventional oil and gas and
renewables, Tim’s technical insight into the geothermal industry has been of significant value to the
Company as it focusses on its remediation activities (Tim previously held the role of General
Manager Geothermal Developments for Origin Energy).
The engagement of Wellsafe Pty Ltd in February 2020 as part of the remediation team and the
completion of a comprehensive investigation into the history and current status of the wells and
undertaking pre-abandonment field work.
The development of the preferred method of abandonment for the wells and meetings with the South
Australian Department for Energy and Mining (Regulator) to discuss the proposed activities.
At the date of this report, the Company is progressing the agreed well programs and costs. Pending the
availability of contractors, equipment and COVID-19 impacts, abandonment of the wells is planned to occur
during the 2021 financial year. To date, COVID-19 has not impacted the remediation works and is not
forecast to affect future activities unless conditions change.
Bioenergy investments
Operations
As part of ReNu Energy's strategy to optimise its bioenergy operations and reduce its cost base, the Company
agreed with Hydroflux Utilities Pty Ltd (‘Hydroflux’) in January 2020 for Hydroflux to replace ReNu Energy as
the provider of operations, maintenance and administrative services to the Beaudesert and Goulbourn
bioenergy projects. This change occurred following a period of co-operation with Hydroflux and in
consultation with our Alliance partner, Resonance Industrial Water Infrastructure Fund (‘Resonance’).
ReNu Energy successfully completed the additional generator installation works at the Beaudesert facility
during the 2020 financial year, with the network connection with Energex occurring in August 2020.
Due to external factors at each site, the Beaudesert and Goulburn bioenergy projects underperformed during
the 2020 financial year. A combination of drought, bushfires, processing plant infrastructure damage and the
effect of COVID 19 resulted in lower electrical demand and effluent levels for processing. This led to reduced
biogas production and electrical generation, and reduced revenue for the Alliance.
Strategic review
With adverse operating conditions expected to continue for the foreseeable future and a capital contribution
needed to meet ongoing operational requirements, the Company entered into discussions with Resonance
for the sale of its 30% interest in the Beaudesert and Goulburn bioenergy projects. In July 2020 ReNu Energy
announced it had entered into a Securities Purchase Agreement (‘SPA’) with Resonance for it to acquire the
Company’s interest for $500,000.
2020 Annual Report
Page 2
2020 Annual Report
In reaching the decision to sell, the Board and management explored and considered several alternatives,
including retaining the Company’s interest and making the agreed capital contribution, offering to purchase
Resonance’s interest and divesting part of the interest to a 3rd party. Having assessed these alternatives and
taking into account (i) ReNu Energy’s available cash and (ii) the focus on closing out the Cooper Basin
remediation activities and actively seeking new project opportunities, it was decided the divestment
represented the best option to advance the interests of shareholders. As a minority partner in the Alliance,
the divestment represented the best opportunity to offset the requirement for a cash call and add to cash
holdings. The sale proceeds represented a multiple on FY2020 EBITDA for the bioenergy projects of more
than 8 times.
The sale completed on 17 August 2020 with ReNu Energy receiving $500,000 and further payments of
approximately $280,000 for the second generator project at the Beaudesert facility, accrued interest on
project loans and other services.
Following completion of the sale to Resonance, ReNu Energy is well positioned to complete the works to
finalise its geothermal remediation activities in the Cooper Basin and actively seek new opportunities.
Financial Results
The Group’s EBITDA loss of $2,514,809 for the 2020 financial year (2019: $2,781,558) was an improvement
on the previous year, largely due to the realisation of corporate cost reductions. One-off restructuring costs,
receiving only two months of earnings from the solar assets and ceasing the provision of operations and
maintenance services to bioenergy projects contributed to the EBITDA loss.
ReNu Energy had $2.45 million in cash reserves on 30 June 2020. On completion of the sale of the bioenergy
assets, cash holdings increased by approximately $0.78 million.
The Group’s financial results for the 2021 financial year will benefit from the completion in February 2020 of
our cost base restructure and will be influenced by the Cooper Basin remediation works and any merger or
acquisition opportunities.
Recap and year ahead – our priorities
The Company’s 2019 annual report noted:
… we believe the prudent approach now is to narrow the focus by completing the restructuring
of the business and prioritising the close out of the Cooper Basin remediation obligation for
Habanero wells 3 & 4. We are currently exploring options for engaging contractors to manage
the final engineering and completion of remediation of the wells, with the aim of commencing
a remediation program in early 2020. The finalising of the remediation obligations should assist
in progressing corporate combination consideration and future renewable development
opportunities with capital market support.
During the 2020 financial year, the Company (i) successfully restructured its cost base, (ii) assessed the
bioenergy assets and executed a decision to divest, and (iii) prioritised and progressed the Cooper Basin
geothermal remediation activities.
ReNu Energy has $2.45m in cash reserves at 30 June 2020, which has been boosted under the terms of the
SPA with Resonance.
The Company announced in July 2020 the appointment of KPMG Corporate Finance as advisor to assist with
the identification of potential merger or acquisition opportunities financed with ReNu Energy scrip and/or
external capital. Closing out the remediation obligations and actively pursuing corporate combination
opportunities will be the Company’s priority and focus for the year ahead.
2020 Annual Report
Page 3
2020 Annual Report
Thank you
On behalf of the Board, we would like to take this opportunity to thank the following people who contributed
greatly and departed from ReNu Energy during the 2020 financial year: Steve McLean as Chairman and Non-
Executive Director, Richard Brimblecombe as Non-Executive Director, Craig Ricato as CEO & Managing
Director, Matthew Scott as CFO and Company Secretary, Warren Leitao as COO, along with all the departing
corporate and operational team members for their tenure, dedication and hard work.
On behalf of the Board, we also acknowledge and thank you, our shareholders, who continue to support the
business.
Boyd White
Chairman
Greg Watson
Chief Executive Officer
2020 Annual Report
Page 4
2020 Annual Report
Directors' Report
Director Profiles
Your Directors submit their report for the period ended 30 June 2020. The names and details of the Directors
of ReNu Energy Limited in office during the financial year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Name & Qualifications
Experience
Steve McLean
B.Economics
Non-executive Director
(Resigned 30 June 2020)
Craig Ricato
LLB (First Class Honours), BCom, GDipLP
CEO and Managing Director
(Resigned 30 September 2019)
twenty years’ experience
in
Steve McLean has over
investment banking and equity capital markets. He
commenced his career with Ernst & Young Corporate
Finance, before working with J.P. Morgan in Australia and
Europe. He has led equity transactions which have raised
over $50 billion. Mr McLean is also a Non-Executive Director
of AIM Listed Litigation Capital Management Ltd.
Mr McLean had no other listed company directorships in the
past three years.
Mr McLean was the Chair of the Company's Remuneration
and Nominations Committee and had been a Director of the
Company since March 2017.
Mr McLean resigned from the board on 30 June 2020.
Mr Craig Ricato was appointed Acting CEO in April 2018 and
was formally appointed as CEO & Managing Director of ReNu
Energy Limited in July 2018. Craig has over seventeen years’
international experience with listed (ASX and SGX) and
private companies in senior executive and director roles
across the energy, construction, resource and professional
services industries.
Craig is a long-time member of the Australian Institute of
Company Directors and holds a Bachelor of Laws (1st class
honours) from the Queensland University of Technology and
a Bachelor of Commerce from the University of Queensland.
Craig is currently the non-executive Chairman and a member
of the Audit Committee of private Australian construction
services company, DB Group Global Pty Ltd, and a non-
executive director of Yurra Engineering, Scaffolding & Marine
Pty Ltd, a majority indigenous owned company servicing the
large industrial industry in Australia. He has previously held
CEO, executive director and non-executive director roles in a
number of listed companies, where he also gained experience
as a member on Audit & Risk Committees. Mr Ricato had no
other listed company directorships in the past three years.
Prior to his career in corporate roles, Craig was in private
practice as a solicitor specialising in construction law and
litigation law, following an early career in law enforcement.
Mr Ricato resigned
the Board and ceased his
employment with ReNu Energy Limited on 30 September
2019.
from
2020 Annual Report
Page 5
2020 Annual Report
Directors' Report (Continued)
Name & Qualifications
Experience
Anton Rohner
B.Bus, CPA
Non-executive Director
(Resigned 2 August 2019)
Richard Brimblecombe
MBA & MAICD
Non-executive Director
(Resigned 31 December 2019)
Mr Rohner currently holds the position of Chief Executive
Officer for UPC Renewables Australia, and has over twenty
years’ experience in management, development and finance
in the renewable energy and resources sectors. For over five
years, he held CFO roles for ASX200 listed companies.
Mr Rohner was Managing Director for Renewable Energy and
Utilities at Macquarie Bank in Hong Kong where he was
responsible for advising and securing developments in
renewable energy and utilities across Asia and Africa. He was
also Managing Director, Asia, for Roaring 40s, a partnership
between China Light & Power and Hydro Tasmania, to
develop and operate sources of renewable energy throughout
Asia and Australia. This partnership developed and financially
closed over 2000MW of wind projects in Asia and Australia.
Mr Rohner had no other listed company directorships in the
past three years.
Mr Rohner was a non-executive Director of the Company from
March 2017 to August 2019.
Mr Brimblecombe was an experienced executive in the agri-
business and finance sectors, with a deep industry knowledge
of agribusiness, renewable energy and financial services. Mr
Brimblecombe has experience in operation of agri-business
gained through senior leadership roles at Namoi Cotton,
Australia’s
leading cotton processing and marketing
organisation, and as General Manager for Qld / NT for
Landmark Services, a leading rural services business.
Mr Brimblecombe has also served in senior executive roles in
the finance industry, specialising in lending to the rural sector,
including as Head of Specialised Agribusiness Solutions
(Qld/NT) for Commonwealth Bank of Australia and currently
as Chief Executive Officer of StockCo (Australia) Pty Ltd,
Australia’s and New Zealand’s largest specialist livestock
financier.
Mr Brimblecombe’s experience in the renewable energy
sectors has been developed through roles as Managing
Director and subsequently Executive Chairman of Quantum
Power Limited. Mr Brimblecombe holds an Executive MBA
from Bond University and is a Member of the Australian
Institute of Company Directors. Mr Brimblecombe has had no
other listed company directorships in the past three years.
The Company notes that, due to his previous role as
Managing Director of Quantum Power, Mr Brimblecombe is
not considered by the ASX Corporate Governance Principles
to be independent.
Mr Brimblecombe resigned from the board on 31 December
2019.
2020 Annual Report
Page 6
2020 Annual Report
Directors' Report (Continued)
Name & Qualifications
Experience
Tony Louka
MBA & MAICD
Non-executive Director
Tim Scholefield
BAppSc, MBA, GAICD, Cert Gov (Risk)
Executive Director
(Appointed 6 December 2019)
Mr Louka has more than 20 years of industry experience in
Board, executive and management roles in the energy and
retail sectors. Mr Louka was Head of Energy and Services
at Woolworths Group Limited for 10 years and has previous
held management roles at Ergon Energy and Emerson
Network Power. He has also recently served as a Board
Member of the Energy Users Association of Australia and
the Transgrid Advisory Council.
Mr Louka was appointed as interim Managing Director and
Acting CEO on 20 September 2019. Mr Louka returned to
his previous position of Non Executive Director effective 28
February 2020.
Mr Louka has had no other listed company directorships in
the past three years.
Mr Louka is a member of the Audit and Risk Management
Committee and
the Company’s Remuneration and
Nominations Committee.
production
exploration,
Mr Scholefield is a senior executive with global experience
in project delivery, operations, financial, governance and risk
management. Mr Scholefield has more than 30 years’
experience across the resources and energy value chain
including
operations;
conventional, unconventional and renewable fuel sources;
gas storage and offtake, power generation and the link to
customers. Mr Scholefield has experience as a director and
as chair and participant on board committees evaluating and
developing energy projects. As General Manager –
Geothermal Developments for Origin Energy he was
responsible for managing Origin’s geothermal interests in
Chile, Indonesia, Australia and New Zealand.
and
Mr Scholefield holds a Bachelor of Applied Science from the
University of South Australia, a MBA from Deakin University,
a Certificate in Governance and Risk Management from the
Governance Institute of Australia and is a Graduate of the
Australian Institute of Company Directors.
Mr Scholefield has had no other
directorships in the past three years.
listed company
Mr Scholefield has executive responsibility to coordinate,
implement and oversee the permanent abandonment of the
Company’s geothermal wells in the Cooper Basin.
2020 Annual Report
Page 7
2020 Annual Report
Directors' Report (Continued)
Name & Qualifications
Experience
Boyd White
BBus(Acc) & MBA
Non-Executive Chairman
(Appointed 20 December 2019)
in
Mr White has an accomplished record
the power
(renewable and thermal), transmission, oil, gas and mining
sectors. He has over 30 years of business experience and
brings strong strategic, commercial, development and
entrepreneurial skills to the ReNu Energy Board. Mr White
holds a Bachelor of Business (Accounting) from Queensland
University of Technology and an MBA from the University of
Queensland.
Mr White has held executive roles internationally with US
multinationals Halliburton Company and KBR Inc, and
domestically with Tarong Energy Ltd, and Territory
Generation. Mr White is the Principal of New Energy Capital,
developing amongst other things, an integrated bioenergy
business in Europe and providing development services for
gold exploration projects in Argentina and Finland .
Mr White has had no other listed company directorships in the
past three years.
Mr White is Chair of the Audit and Risk Management
Committee.
Company Secretary
Greg Watson
LLB, BCom, GDipLP, CA
Mr Watson joined ReNu Energy as Chief Financial Officer and Company Secretary in September 2019, and
was appointed as Chief Executive Officer in February 2020. Greg has a strong background in finance, tax,
legal and company secretarial disciplines.
Mr Watson has 13 years experience with listed and private companies in the resources sector. Mr Watson
previously worked as CFO and Company Secretary at Capricorn Copper and has also held corporate roles
at Anglo American, Barrick Gold, Equinox Minerals and Fortescue Metals. Mr Watson commenced his career
at KPMG where he worked for 9 years.
2020 Annual Report
Page 8
2020 Annual Report
Directors' Report (Continued)
Corporate structure
ReNu Energy Limited is a company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is Corporate House, Kings Row 1, 52 McDougall Street,
Level 2, Milton QLD 4064.
The Directors present this financial report on ReNu Energy Limited (the Company) and its subsidiaries
(collectively the Group) for the financial year ended 30 June 2020.
Principal activities
ReNu Energy Limited’s focus is to operate as an independent power producer delivering clean energy
products and services to its customers at a lower price, with no upfront cost.
During the financial period, the Company held a 30% interest in two bioenergy projects (the 1.6 MW Southern
Meats bioenergy project in NSW and the 1.1 MW AJ Bush bioenergy project in Queensland) and continued
to progress activities required for the remediation of its single remaining geothermal tenement in the Cooper
Basin in accordance with the relevant state regulations and environmental requirements.
Significant changes in the state of affairs
Significant changes in the state of affairs of the Company during the financial period were:
The sale of the Group’s solar operations for a consideration of $5,775,000 less debt.
Undertaking studies and pre-abandonment field work to determine the most appropriate abandonment
program for the Group’s two remaining geothermal wells located in the South Australian Cooper Basin.
Undertaking a strategic review of the Group’s cost base and implementing operational and
management changes.
Ceasing the provision of operations and maintenance services to the Goulburn and AJ Bush bioenergy
projects (with the appointment of Hydroflux Utilities Pty Ltd as the replacement service provider).
The appointment of KPMG Corporate Finance to advise and assist the Company with new project
opportunities.
There were no other significant changes in the state of affairs of the Company during the financial period.
2020 Annual Report
Page 9
2020 Annual Report
Directors' Report (Continued)
Review and results of operations
The Company realised a loss before tax for the financial period as set out below:
Non-IFRS Measure
EBITDA – by business segment
Bioenergy
Solar
Geothermal
Corporate overheads
Total Group EBITDA
(Loss) / gain on sell down of subsidiary
Share of loss from associate
Depreciation
Impairment
Borrowing transaction costs
Interest expense
Income tax expense
Loss after tax
Results
2020
$
2019
$
(4,179)
(11,152)
(6,477)
(414,121)
(79,348)
117,961
(2,493,001)
(2,406,050)
(2,514,809)
(2,781,558)
(17,516)
(155,463)
(147,925)
(1,327,539)
(306,851)
(37,488)
-
321,351
(80,669)
(315,228)
(508,000)
(39,504)
(83,584)
-
(4,507,591)
(3,487,192)
The Group’s EBITDA loss of $2,514,809 (2019: $2,781,558) was an improvement on the previous year, due
to the realisation of the corporate cost reduction. This was somewhat offset by only receiving two months of
earnings from the solar assets and ceasing the provision of operations and maintenance services to
bioenergy projects.
2020 Annual Report
Page 10
2020 Annual Report
Directors' Report (Continued)
Operational review
During the year ended 30 June 2020, ReNu Energy’s activities centred around: completion of the sale of its
solar operations, the provision of operations and maintenance services to the Goulburn and AJ Bush
bioenergy projects, restructuring of the business’ cost base, prioritising the abandonment of the two
remaining geothermal wells and final remediation of the remaining Cooper Basin licence and actively
seeking new project opportunities.
Key activities during the year included:
Completion of the sale of the Group’s Embedded Network Operations, including the energy retail
authorisation and the Amaroo Solar PV facility, in September 2019 for a consideration of $5,775,000
less debt.
Undertaking a strategic review, which commenced in September 2019 and completed at the end of
February 2020, with the Company implementing management changes and successfully resetting its
cost base.
Progressing works under an Engineering Procurement and Construction contract for a 2nd generator
at the AJ Bush bioenergy project.
The provision of operations and maintenance services to the Goulburn and AJ Bush bioenergy
projects until cessation of the contractual arrangements in January 2020 and transition of the services
to Hydroflux Utilities Pty Ltd as the replacement service provider.
Progressing the abandonment of the two remaining geothermal wells and surrender of the GRL3
geothermal tenement located in the South Australian Cooper Basin, including:
o The appointment of Mr Tim Scholefield in December 2019 as Executive Director Geothermal
Remediation and the engagement of Wellsafe Pty Ltd in February 2020 as part of the
remediation team.
o The completion of a comprehensive investigation into the history of the wells, their current
status and undertaking pre-abandonment field work.
o The development of the preferred method of abandonment for the two wells.
Actively seeking potential new project opportunities, including assessing investment opportunities
outside of the Company’s bioenergy business and the appointment of KPMG Corporate Finance in
April 2020 to advise and assist the Company in connection with the potential identification and
acquisition of a business.
COVID-19 Impact
The Directors have assessed the impacts of COVID-19 on the Group as follows:
A combination of drought, processing plant infrastructure damage and COVID-19 have resulted in
the underperformance of the bioenergy assets.
To date, COVID-19 has had no impact on the remediation works and is not forecast to affect future
activities unless conditions change.
The Company has met the eligibility requirements for the available government relief provided to
businesses for the period April to June 2020.
The Company seeking new project opportunities has not been impacted by COVID-19 to date and
this is will continue to be assessed.
2020 Annual Report
Page 11
2020 Annual Report
Directors' Report (Continued)
Likely developments and expected results
A major focus of the Board and management is cash flow management so as to ensure that the Group has
sufficient funds to cover its planned activities and any ongoing obligations. During the financial period, the
Group undertook a strategic review of its cost base and implemented a series of operational and management
changes that successfully resulted in a reset of the Group’s cost base.
At 30 June 2020, ReNu had available cash of $2,448,803. On 31 July 2020, the Company announced that
it had accepted an offer from its Alliance Partner, Resonance Industrial Water Infrastructure Fund, to acquire
the Group’s 30% interest in the Goulburn and AJ Bush bioenergy projects for a consideration of $500,000.
The Board and management believe that ReNu remains well positioned to complete the works to allow the
surrender of GRL3 in the Cooper Basin and progress strategic corporate combination opportunities.
Dividend
No dividends were declared or paid during the year ending 30 June 2020.
The Directors do not propose to recommend the payment of a dividend in respect of the period ended
30 June 2020.
Directors' interests in the Shares and Options of the Company
As at the date of this report, the interests of the Directors in the shares of ReNu Energy Limited were nil.
Significant events after the reporting date
Divestment of 30% interest in bioenergy projects
On 31 July 2020, the Company announced that it had accepted an offer from its Alliance Partner, Resonance
Industrial Water Infrastructure Fund, to acquire the Group’s 30% interest in the Goulburn and AJ Bush
bioenergy projects for a consideration of $500,000. Under this arrangement the Company would not recover
the costs of $261,399 for capital works made in relation to the Bioenergy assets or the loan of $1,066,140 to
the associate company, RE Holding Company One Pty Ltd. As a result an impairment of $1,327,539 (included
in the general & administrative expenses) has been recorded against these assets. A gain on the sale of the
investment in the bioenergy projects of $168,437 is expected to be recognised in the 2021 financial year.
There has not arisen between 30 June 2020 and the date of this report any other item, transaction or event
of a relevant and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly
the operations.
Environmental regulations and performance
As a renewable energy generator, environmental sustainability is at the heart of every activity ReNu Energy
undertakes.
The Group is required to carry out its activities in accordance with the relevant laws and regulations. The
Group will continue to meet its obligations for the final remediation of the Cooper Basin assets and is
committed to minimising the impact of its activities on the natural landscape, waterways, flora and fauna in a
manner consistent with environmental best practice standards.
Indemnification and insurance of Directors and officers
During the financial year, the Company paid premiums in respect of contracts insuring Directors, Secretaries,
and executive officers of the Group and related entities against liabilities incurred as Director, Secretary or
executive officer to the extent permitted by the Corporations Act 2001, subject to the terms, conditions,
2020 Annual Report
Page 12
2020 Annual Report
Directors' Report (Continued)
limitations and exclusions of the policy. Under the terms of the policy, the Group is precluded from disclosing
details of premiums paid.
The Company has entered into deeds of indemnity, insurance and access with each person who is, or has
been, a Director of the Company. To the extent permitted by law and subject to the restrictions in s199A of
the Corporations Act 2001, the Company must continually indemnify each Director against liability (including
liability for costs and expenses) for an act or omission in the capacity as Director, subject to certain exclusions.
No payment has been made to indemnify a Director during or since the end of the financial year.
Indemnification of auditors
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted
by law, indemnified or agreed to indemnify an auditor of the Company or of any related body corporate against
a liability incurred as such an auditor.
Rounding
The amounts contained in this report and in the financial report have been rounded to the nearest $1 (unless
otherwise stated) under the option available to the Company under ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191. The Company is an entity to which the ASIC Corporations
Instrument applies.
Share Options
Share appreciation rights
As at 30 June 2020 and as at the date of signing this report, there are no share appreciation rights on issue.
No ordinary shares of the Company have been issued during or since the end of the financial year ended 30
June 2020 on the exercise of share appreciation rights.
There are no options granted over unissued shares.
Directors’ meetings
During the period, there were nine directors’ meetings held. The number of directors’ meetings and the
number of meetings attended by each of the Directors of the Company during the financial period are as
follows:
Directors’ meetings
Audit & Risk Management
Committee meetings
Remuneration & Nominations
Committee meetings
S. McLean
A. Rohner
C. Ricato
R. Brimblecombe
T Louka
B. White
T. Scholefield
A
9
2
4
5
9
4
4
H
9
2
4
5
9
4
4
A – Number of meetings attended
H – Number of meetings held whilst in office
A
3
-
1
1
3
2
2
H
3
-
1
1
3
2
2
A
1
-
-
-
1
1
1
H
1
-
-
-
1
1
1
2020 Annual Report
Page 13
2020 Annual Report
Directors' Report (Continued)
Committee memberships as at 30 June 2020 and as at the date of this report are:
Audit & Risk Management Committee – Membership comprises two Non-executive Directors being B.
White (Chair) and S. McLean (resigned 30 June 2020).
Remuneration & Nominations Committee – Membership comprises two Non-executive Directors S.
McLean (Chair) (resigned 30 June 2020) and T. Louka.
Auditor independence
In accordance with section 307C of the Corporations Act 2001, the Directors received a declaration of
independence from the auditor of ReNu Energy Limited which is listed immediately after this report and forms
part of this Directors’ Report and can be found on page 25.
Non-audit services
The Company may decide to employ the auditor on assignments in addition to their statutory audit duties,
where the auditor’s expertise and experience with the Company and/or the Group are important.
Details of amounts paid or payable to the auditor (BDO Audit Pty Ltd) for audit and non-audit services
provided during the year are set out in note 18 to the Financial Statements.
The Board of Directors has considered the position and is satisfied that the provision of the non-audit services
is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The Directors are satisfied that the provision of non-audit services by the auditor, as set out in note 18 to the
Financial Statements, did not compromise the auditor independence requirements of the Corporations Act
2001 for the following reasons:
•
•
all non-audit services have been reviewed by the Board to ensure they do not impact the impartiality
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.
During the year there were nil (2019: nil) fees were paid or payable for non-audit services provided by the
auditor of the parent entity, its related practices and non-related audit firms.
Proceedings on behalf of the Company
As far as the Directors are aware, no proceedings have been brought or intervened in on behalf of the
Company with the leave of the Court, nor has any application for leave been made in respect of the Company,
under section 237 of the Corporations Act 2001.
Corporate governance
The Directors recognise the need for the highest standards of corporate behaviour and accountability and
therefore support and have adhered to the principles of Corporate Governance. The Company’s Corporate
the Company’s website: http://renuenergy.com.au/about-
Governance Statement
us/governance/.
is available on
2020 Annual Report
Page 14
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited)
This Remuneration Report for the year ended 30 June 2020 outlines the remuneration arrangements in place
for Directors and Executives of ReNu Energy Limited in accordance with the requirements of the Corporations
Act 2001 and its Regulations. This information has been audited as required by section 308(3C) of the Act.
The Remuneration Report is presented under the following sections:
1.
Introduction
2. Remuneration governance
3. Executive remuneration arrangements
A. Remuneration principles and strategy
B. Approach to setting remuneration
C. Detail of Incentive Plans
4. Executive remuneration outcomes for FY20 (including link to performance)
5. Summary of executive contractual arrangements
6. Non-executive Director remuneration
7. Share based compensation
8. Other statutory disclosures
2020 Annual Report
Page 15
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited) (continued)
1
Introduction
The Remuneration Report details the remuneration arrangements for Key Management Personnel (KMP)
who are defined as those persons having authority and responsibility for planning, directing and controlling
the major activities of the Company directly or indirectly including any Director.
For the purposes of this report, the term ‘executive’ encompasses the Managing Director and the executive
management team of the Company. The KMP covered in this report are set out in the table below.
Non-executive Directors (NEDs)
B. White (commenced 20 December 2019)
S. McLean (ceased 30 June 2020)
R. Brimblecombe (ceased 31 December 2019)
A. Rohner (ceased 2 August 2019)
T. Louka
Executive Directors
Chairman
Director
Director
Director
Director
T. Scholefield (commenced 6 December 2019)
Executive Director
Other key management personnel
G. Watson (commenced 10 September 2019)
Chief Executive Officer & Company Secretary
Key management personnel who ceased in prior year
W. Leitao (ceased 15 October 2019)
Former Chief Operating Officer
C. Ricato (ceased 30 September 2019)
D. Galvin (ceased 26 July 2019)
M. Scott (commenced 1 July 2019, ceased 10 September 2019)
Former Managing Director & Chief Executive
Officer
Former Chief Financial Officer & Company
Secretary
Former Chief Financial Officer & Company
Secretary
2
Remuneration governance
Remuneration and Nominations Committee
The Remuneration and Nominations Committee has the primary objective of assisting the Board in
developing and assessing the remuneration policy and practices of the Directors, Chief Executive Officer
(CEO) and senior executives.
Specifically, the Board approves the remuneration arrangements of the CEO, the aggregate annual fixed
remuneration salary review, short-term incentives and the methodology for awards made under long-term
incentive plans following recommendations from the Remuneration & Nominations Committee. The Board
also sets the aggregate remuneration of Non-executive Directors, which is then subject to shareholder
approval, and individual Directors’ fees.
Committee assessments incorporate the development of remuneration policies and practices which will
enable the Group to attract and retain executives who will create value for shareholders. Executives will be
fairly and responsibly rewarded having regard to the performance of the Group, the performance of the
executive and the general market environment. The Committee also assists the Board in its own self-
evaluation by annually reviewing the process for self-evaluation.
2020 Annual Report
Page 16
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited) (continued)
The Remuneration & Nominations Committee meets throughout the year. The CEO attends Remuneration &
Nominations Committee meetings by invitation, where management input is required. The CEO is not present
during any discussions related to his own remuneration arrangements.
Further information on the Remuneration & Nomination Committee’s role, responsibilities and membership
can be found on the Company’s web site at www.renuenergy.com.au.
Use of remuneration consultants
The Company did not appoint remuneration consultants for remuneration recommendations during the
financial year.
3
Executive remuneration arrangements
3A. Remuneration principles and strategy
ReNu Energy's executive remuneration strategy is designed to attract, motivate and retain highly skilled
executives and align the interests of executives and shareholders.
To this end, the company embodies the following principles in its remuneration framework:
Provide competitive salaries to attract high calibre executives.
Link executive performance rewards to medium and longer-term shareholder value creation through KPI-
linked short term incentives.
The Group aims to reward its executives with a level and mix of remuneration commensurate with their
position and responsibilities within the Group so as to:
Reward executives for Group, business division and individual performance against targets set by
reference to appropriate benchmarks.
Link reward with the strategic goals and performance of the Group.
Ensure total remuneration is competitive by market standards.
3B. Approach to setting remuneration
The key executives’ emoluments are structured to retain and motivate executives by offering a competitive
base salary and a short term annual cash-based performance-related component.
Remuneration may consist of the following key elements:
Fixed remuneration – base salary and superannuation; and
Variable remuneration in the form of cash-based incentives.
2020 Annual Report
Page 17
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited) (continued)
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate
to the position and is competitive in the market. Fixed remuneration of the Chief Executive Officer is reviewed
annually by the Remuneration and Nominations Committee and approved by the Board. Factors considered
include the Group and individual performance, relevant comparative remuneration in the market and internal
and, where appropriate, external advice. The Remuneration and Nominations Committee has access to
external advice independent of management.
Senior executives receive their fixed (primary) remuneration in cash. The fixed remuneration component of
senior executives who are key management personnel is detailed in Table 1 of this report.
3C. Details of Incentive Plans
Short term incentives
The Company uses short term incentives to:
Reward employees for their contribution in ensuring that ReNu Energy achieves the corporate key
deliverables.
Encourage team work.
Enhance ReNu Energy attracting and retaining high calibre and high performing employees.
Link remuneration directly to the achievement of key organisational objectives.
In the FY2020 reporting period no share based payments were awarded to staff or executives. No Key
Management Personnel were awarded any cash incentives for the financial year.
2020 Annual Report
Page 18
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited) (continued)
4
Executive remuneration outcomes for FY20
Company performance and its link to the Company's remuneration principles and strategy
The 2020 financial year was one which saw the Group divest its solar projects, restructure its cost base,
prioritise the close out of the Cooper Basin remediation and actively seeking new project opportunities. To
allow the Group full flexibility in adapting to its changing landscape, specific measurable short-term targets
were not set. Key Management Personnel were not awarded any cash incentives for the financial year.
It is intended that corporate and individual KPIs will be set for FY21, such that executives are rewarded for
the achievement of milestones that are both measurable and outcomes based. These milestones will be set
by the Board as they represent key drivers for creating short term shareholder value.
The remuneration of senior executives who were Key Management Personnel during the year ended 30 June
2020 is set out below:
Table 1 – Remuneration of senior executives of the Group for the year ended 30 June 2020
Short-
term*
Salary
$
94,111
31,716
81,353
48,439
Name
C Ricato1
D Galvin2
W Leitao3
M Scott4
G Watson5
181,474
T Scholefield6
112,622
Post-employment*
Share based**
Superannuation
$
Termination
benefits
$
Shares
(amortised
cost)
$
SARs
(amortised
cost)
$
Performance
related
%
Total
$
15,752
187,500
3,013
-
27,340
270,400
4,602
15,240
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
297,363
34,729
379,093
53,041
196,714
112,622
1,073,562
-
-
-
-
-
-
-
Totals
549,715
65,947
457,900
* Fixed remuneration
** Variable remuneration
1 C Ricato ceased employment as Managing Director and Chief Executive Officer on 30 September 2019
2 D Galvin ceased employment as Chief Financial Officer on 26 July 2019
3 W Leitao ceased employment as Chief Operating Officer on 15 October 2019
4 M Scott ceased employment as Chief Financial Officer on 9 September 2019
5 G Watson commenced employment as Chief Financial Officer and Company Secretary on 9 September 2019 and became Chief
Executive Officer on 28 February 2020.
6
T Scholefield commenced as Executive Director on 6 December 2019 and is engaged through an associated company Pacific
Energy Partners Pty Ltd.
2020 Annual Report
Page 19
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited) (continued)
Table 2 – Remuneration of senior executives of the Group for the year ended 30 June 2019
Short-
term*
Post-employment*
Share based**
Name
Salary
$
Superannuation
$
C. Ricato
375,000
W. Leitao
242,917
D. Galvin1
219,178
Totals
837,095
20,531
18,820
20,822
60,173
Termination
benefits
$
-
-
-
-
Shares
(amortised
cost)
$
SARs
(amortised
cost)
$
Performance
related
%
Total
$
45,338
30,147
18,927
94,412
-
-
-
-
440,869
291,884
258,927
991,680
10%
10%
7%
* Fixed remuneration
** Variable remuneration
1 D. Galvin ceased employment as Chief Financial Officer on 26 July 2019
5
Summary of executive contractual arrangements
Remuneration arrangements for KMP are formalised in employment agreements. Details of these contracts
agreements are provided below.
Chief Executive Officer and Company Secretary – G Watson
Mr Watson was appointed as Chief Financial Officer and Company Secretary on 9 September 2019 under
an Employment Agreement dated 9 September 2019.
Mr Watson entered into a variation to Employment Agreement on 26 February 2020 for appointment as Chief
Executive officer. The key terms of Mr Watson’s employment are as follows:
Base remuneration of $320,000 per annum plus superannuation on a pro-rated basis; and
Part time basis with minimum of 24 hours per week.
Executive Director – T Scholefield
Mr Scholefield was appointed as an Executive Director on 6 December 2019 to provide executive
responsibility to coordinate, implement and oversee the permanent abandonment of the Company’s
geothermal wells in the Cooper Basin.
Mr Scholefield is engaged through an associated company Pacific Energy Partners Pty Ltd to provide
consulting services to the Company. The daily rate is $1,850 for a fixed term to 10 December 2020.
Former Managing Director and Chief Executive Officer – C Ricato
Mr Ricato was appointed as Managing Director and CEO on 6 July 2018 and ceased employment on 30
September 2019.
During the period up to 30 September 2019 Mr Ricato was paid a portion of his base remuneration of
$375,000 per annum plus superannuation.
Mr Ricato’s received a termination payment made on 30 September 2019 per his Executive Service
Agreement with the Company of $187,500 which represents the equivalent of 6 months salary component
plus a superannuation contribution equal to the minimum amount required by law.
2020 Annual Report
Page 20
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited) (continued)
Former Chief Operating Officer – W Leitao
Mr Leitao held the position of Chief Operating Officer from 5 April 2018 and ceased employment on 15
October 2019.
During the period up to 15 October 2019 Mr Leitao was paid a portion of his base remuneration of $270,400
per annum plus superannuation.
Mr Leitao received a termination payment made on 15 October 2019 per his Executive Service Agreement
with the Company of $270,400 which represents the equivalent of 12 months salary component plus a
superannuation contribution equal to the minimum amount required by law.
Former Chief Financial Officer and Company Secretary – M Scott
Mr Scott held the position of Chief Financial Officer and Company Secretary from 1 July 2019 and ceased
employment on 9 September 2019.
Mr Scott’s remuneration package was formalised in an employment agreement, base remuneration of
$240,000 per annum including superannuation.
No termination payment was made to Mr Scott.
6
Non-executive Director remuneration arrangements
Remuneration Policy
The Board seeks to set aggregate remuneration at a level which provides the Group with the ability to attract
and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it
is apportioned amongst Directors is reviewed annually. The Board may consider advice from external
consultants as well as the fees paid to Non-executive Directors of comparable companies when undertaking
the annual review process. The amounts are set at a level that compensates the Directors for their significant
time commitment in overseeing the progression of the Company’s business plan.
The Constitution of ReNu Energy and the ASX Listing Rules specify that the aggregate remuneration of Non-
executive Directors shall be determined from time to time by a general meeting. An amount not exceeding
the amount determined is then divided between the directors as agreed. The latest determination was at the
Annual General Meeting held on 28 November 2007 when shareholders approved a maximum aggregate
remuneration of $700,000 per year.
Structure
Each Non-executive Director receives a fee for being a Director of the Company. The current fee structure is
to pay Non-executive Directors a gross annual remuneration of $50,000 p.a. with the Chairman paid $65,000
p.a including superannuation. There are no additional fees paid for committee memberships. There are no
retirement benefits offered to Non-executive Directors. In accordance with good corporate governance
practice, the Non-executive Directors do not participate in equity based remuneration plans of the Company.
The remuneration of Non-executive Directors for the year ending 30 June 2020 is detailed in Table 3 of this
report and the remuneration for the comparative year ending 30 June 2019 is detailed in Table 4.
2020 Annual Report
Page 21
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited) (continued)
Table 3 – Non-executive Directors’ Remuneration for the year ended 30 June 2020
Director
S. McLean1
R. Brimblecombe
T. Louka2
B. White
Totals
Directors
fees
$
Consulting
fees1
$
Superannuation
$
54,577
25,000
-
-
31,127
153,964
5,205
-
-
Total
$
59,782
25,000
185,091
28,781
-
2,734
31,515
139,485
153,964
16,238
309,687
1. Mr S McLean was Chairman till 28 February 2020.
2. Mr T Louka is engaged through an associated company, Maxify Pty Ltd, to provide consulting and director services to the Company.
Mr T Louka was appointed as interim CEO from 20 September 2019 to 26 February 2020 with consulting fees paid in relation to this
appointment of $153,964.
Table 4 – Non-Executive Directors’ Remuneration for the year ended 30 June 2019
Director
S. McLean
Directors
fees
$
59,361
R. Brimblecombe
50,000
A. Rohner
T. Louka1
Totals
50,000
37,503
196,864
Consulting
fees1
$
-
-
-
9,000
9,000
Superannuation
$
5,639
-
-
-
Total
$
65,000
50,000
50,000
46,503
5,639
211,503
1. Mr T Louka is engaged through an associated company, Maxify Pty Ltd, to provide consulting and director services to the Company
from 1 October 2018 at $1,000 per month.
7
Share based compensation
Loan Share Plan Shares
On 14 December 2018, the Company issued 14,424,000 ordinary shares (Plan Shares) to executives of the
Company pursuant to the Loan Share Plan approved by shareholders at the Annual General Meeting. As
employment has not continued the vesting conditions have not been meet and therefore will be transferred
back to the Company. The transfer will occur after approval at the next Annual General Meeting.
No shares have been issued under the Loan Share Plan in 2020.
The movements of Plan Shares, held directly, indirectly or beneficially by each key management personnel
member, including their related parties during the financial year ended 30 June 2020 is set out in Table 5
below.
2020 Annual Report
Page 22
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited) (continued)
Table 5 - Shares granted to Key Management Personnel as part of remuneration for the year ended
30 June 2020
Balance at
beginning of
period
(shares)
Fair value
of shares
granted
during the
year
($)
Shares lapsed
during the
reporting period
(shares)
Grant date
Expiry date
8,655,000
$0.068
28/11/18
28/11/28
5,769,000
$0.068
29/11/18
29/11/28
-
-
Balance as at the
end of the
reporting period1
(shares)
8,655,000
5,769,000
1,434,150
$0.0088
9/11/17
9/11/27
(1,434,150)
-
Executive
C Ricato
W. Leitao
D. Galvin
Total
15,858,150
(14,434,150)
14,424,000
1. Shares did not meet the vesting conditions therefore to be transferred back to the Company of the Plan Shares after approval at
the Annual General Meeting for the year ended 30 June 2020.
Table 6 - Shares granted to Key Management Personnel as part of remuneration for the year ended
30 June 2019
Balance at
beginning of
period
Share
Consolidation
during the
reporting
period
(shares)
(shares)
Shares
granted
during the
reporting
period(1)
(shares)
Fair value
of shares
at grant
date
($)
Grant date
Expiry date
Balance as at
the end of the
reporting
period
(shares)
-
-
-
-
8,655,000
$0.068
28/11/18
28/11/28
8,655,000
5,769,000
$0.068
29/11/18
29/11/28
5,769,000
Executive
C Ricato
W. Leitao
D. Galvin
14,341,500
(12,907,350)
-
$0.0088
9/11/2017
9/11/2027
1,434,150
Total
14,341,500
(12,907,350)
14,424,000
15,858,150
1. Shares granted as part of remuneration have been accounted for as share-based payments.
No Plan Shares have vested at the end of the reporting period
8
Other statutory disclosures
Related party transactions with Directors
The Group engaged Maxify Pty Ltd to provide consulting services. The key resource from Maxify is T. Louka
(Non-executive Director). Consulting fees of $153,964 (2019: $9,000) were paid during the year.
The Group engaged Pacific Energy Partners Pty Ltd to provide consulting services. The key resource from
Pacific Energy Partners Pty Ltd is T. Scholefield (Executive Director). Consulting fees of $112,622 were paid
during the year (2019: nil).
Shareholdings of Key Management Personnel
The movements of the Company's ordinary shares, held directly, indirectly or beneficially by some Key
Management Personnel member, including their related parties during the financial year ended 30 June 2020
are set out in Table 7 below.
2020 Annual Report
Page 23
2020 Annual Report
Directors' Report (Continued)
Remuneration Report (Audited) (continued)
Table 7 - Shareholdings of Key Management Personnel
Balance at
Beginning of
Period
01/07/19
Issued under
loan share
plan
Other
Movements1
Balance at
End of Period
30/06/20
Directors
R. Brimblecombe
3,281,420
C. Ricato
- Unrestricted
- Unvested2
Executives
W. Leitao
- Unvested2
D. Galvin
- Unrestricted
- Unvested2
Total
151,515
8,655,000
5,769,000
113,556
1,434,150
19,404,461
-
-
-
-
-
-
-
(3,281,420)
(151,515)
(8,655,000)
(5,769,000)
(113,556)
(1,434,150)
(19,404,461)
-
-
-
-
-
-
-
1.
Ceased, or commenced being Key Management Personnel during the year
2. Ordinary Shares issued under the Loan Share Plan are subject to vesting conditions – refer to section 7 of the Remuneration
Report for further details
End of Remuneration Report (Audited)
Signed in accordance with a resolution of the Directors.
Boyd White
Chairman
Brisbane
27 August 2020
2020 Annual Report
Page 24
2020 Annual Report
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
w ww.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY R M SWABY TO THE DIRECTORS OF RENU ENERGY LIMITED
As lead auditor of ReNu Energy Limited for the year ended 30 June 2020, 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 ReNu Energy Limited and the entities it controlled during the year.
R M Swaby
Director
BDO Audit Pty Ltd
Brisbane
27 August 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which ar e all member s of BDO
Austr alia Ltd ABN 77 050 110 275, an Austr alian company limited by guar antee. BDO Audit Pty Ltd and BDO Austr alia Ltd ar e member s of
B DO Inter national Ltd, a UK company limited by guar antee, and for m par t of the inter national BDO networ k of independent membe r
fir ms. Liability limited by a scheme appr oved under Pr ofessional Standar ds Legislation.
2020 Annual Report
Page 25
2020 Annual Report
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020
Continuing operations
Revenue from contracts with customers
Total operating income
Interest income
Other income
Total income
Personnel expenses
Other operating expenses
General & administrative expenses
Finance costs
Total expenses
Share of loss of associates
Loss before income tax expense
Income tax expense
Note
3A(i)
3A(ii)
3B
3C
3D
3E
8
4
2020
$
2019
$
151,198
151,198
90,869
401,487
643,554
205,724
205,724
79,471
138,568
423,763
(1,608,361)
(2,010,320)
(634,107)
(116,613)
(2,318,875)
(1,149,895)
(8,985)
(8,327)
(4,570,328)
(3,285,155)
(155,463)
(80,669)
(4,082,237)
(2,942,061)
-
-
Loss after income tax expense from continuing operations
(4,082,237)
(2,942,061)
Loss from discontinued operations after tax
17
(425,354)
(548,131)
Net loss for the year after income tax attributable to the
owners of the parent
Other comprehensive income
Items that may be reclassified subsequently to profit or loss after tax
Exchange differences on translation of foreign operations
13
Other comprehensive income for the period
Total comprehensive loss for the period attributable to the
owners of the parent
Earnings Per Share attributable to the owners of the parent
Basic and Diluted Loss per share from continuing operations
(cents per share)
Basic and Diluted Loss per share (cents per share)
(4,507,591)
(3,490,192)
-
-
3,330
3,330
(4,507,591)
(3,486,862)
15
15
(3.38)
(3.74)
(2.82)
(3.35)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
2020 Annual Report
Page 26
2020 Annual Report
Consolidated Statement of Financial Position
AS AT 30 JUNE 2020
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Assets held for sale
Total current assets
Non-Current Assets
Other receivables
Property, plant and equipment
Investment in associates
Total non-current assets
Total assets
Current Liabilities
Trade and Other Payables
Borrowings
Provisions
Total current liabilities
Non-Current Liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Other reserves
Accumulated losses
Total equity
Note
2020
$
2019
$
21(A)
2,448,803
1,424,915
5
6
17(b)
5
7
8, 17(c)
9
10
11
10
11
12
13
477,540
-
214,104
390,863
777,580
59,300
360,984
-
3,531,310
2,622,779
694,585
39,650
-
1,636,140
6,097,674
530,377
734,235
8,264,191
4,265,545
10,886,970
423,535
27,358
836,520
301,713
1,431,940
1,456,857
1,882,833
2,595,090
-
-
-
1,131,476
114,575
1,246,051
1,882,833
3,841,141
2,382,712
7,045,829
357,069,848
357,074,708
63,771
168,656
(354,750,907)
(350,197,535)
2,382,712
7,045,829
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
2020 Annual Report
Page 27
2020 Annual Report
Consolidated Statement of Cash Flows
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2020
Note
2020
$
2019
$
Operating Activities
Receipts from customers
Payments to suppliers and employees
Proceeds from R&D tax incentive
Payments for rehabilitation expenditure
Payments for rectification obligations
Net Goods and Services Tax received (paid)
Interest received
Interest paid
892,170
1,935,040
(3,911,025)
(5,251,878)
57,399
198,675
(270,497)
(183,729)
-
(13,448)
(6,281)
119,074
(47,979)
2,941
85,517
(83,649)
Net cash flows used in operating activities
21(B)
(3,167,139)
(3,310,531)
Investing Activities
Proceeds from sale of assets held for sale
Proceeds from sale of business
Purchase of property, plant & equipment
Investment in associate
Loans advanced to associate
Loans repaid from associate
Distributions received from associates
Net payments of cash held as security
17
17(a)
-
3,800,070
5,775,000
-
(20,508)
(1,658,203)
-
-
39,687
-
236,896
(290,760)
(346,140)
-
100,000
(86,510)
Net cash from / (used in) investing activities
6,031,075
1,518,457
Financing Activities
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Transaction costs of share issues
Transaction costs of loans and borrowings
12
10
10
10
-
-
2,006,941
328,707
(1,433,189)
(351,252)
(86,248)
-
(4,760)
(194,725)
(315,851)
(26,080)
Net cash flow provided by financing activities
(1,840,048)
1,763,591
Net decrease in cash and cash equivalents
Add: Opening cash and cash equivalents at 1 July
1,023,888
(28,483)
1,424,915
1,453,398
Cash and cash equivalents at 30 June
21(A)
2,448,803
1,424,915
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
2020 Annual Report
Page 28
2020 Annual Report
Consolidated Statement of Changes in Equity
FINANCIAL YEAR ENDED
30 JUNE 2020
Issued
Capital
Share
Based
Payment
Reserve
(Note 13)
Foreign
Currency
Translation
Reserve
(Note 13)
Accumulated
Losses
$
$
$
$
Total
Equity
$
At 1 July 2019
357,074,708
153,192
15,464
(350,197,535)
7,045,829
Adoption of AASB16 Leases
(see Note 2C)
Restated balance at 1 July
2019 upon adoption of
AASB16
Loss for the period
Total loss for the year
Transactions with owners in
their capacity as owners:
Shares issued
Share issue costs
-
-
-
(45,781)
(45,781)
357,074,708
153,192
15,464
(350,243,316)
7,000,048
-
-
-
(4,860)
-
-
-
-
-
-
-
-
-
(4,507,591)
(4,507,591)
(4,507,591)
(4,507,591)
-
-
-
-
(4,860)
(104,885)
Share Based Payments (Note
3B)
-
(104,885)
At 30 June 2020
357,069,848
48,307
15,464
(354,750,907)
2,382,712
FINANCIAL YEAR ENDED
30 JUNE 2019
At 1 July 2018
Loss for the period
Other comprehensive income
Total loss for the year
Transactions with owners in
their capacity as owners:
Shares issued
Share issue costs
355,286,612
58,780
12,134
(346,707,343)
8,650,183
-
-
-
2,006,941
(218,845)
-
-
-
-
-
-
(3,490,192)
(3,490,192)
3,330
-
3,330
3,330
(3,490,192)
(3,486,862)
-
-
-
-
-
-
2,006,941
(218,845)
94,412
Share Based Payments (Note 3B)
-
94,412
At 30 June 2019
357,074,708
153,192
15,464
(350,197,535)
7,045,829
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
2020 Annual Report
Page 29
2020 Annual Report
Notes to the Financial Statements
Note 1 – Corporate information
The financial report of ReNu Energy Limited (the Company) and its subsidiaries (collectively the Group) for
the year ended 30 June 2020 was authorised in accordance with a resolution of the Directors on 27 August
2020.
ReNu Energy Limited is a for profit Company limited by shares, incorporated and domiciled in Australia whose
shares are publicly traded on the Australian Securities Exchange. The nature of the operations and principal
activities of the Group are described in the Directors’ Report.
Note 2 – Summary of significant accounting policies
A.
Basis of preparation
The financial report is a general purpose financial report which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared
on a historical cost basis.
B.
Compliance with IFRS
The financial report complies with Australian Accounting Standards and International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board.
C.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
New and revised Standard and amendments thereof and Interpretations effective for the current year that are
relevant to the Group are disclosed below. The other standards did not have any impact on the Group’s
accounting policies and did not require retrospective adjustments.
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for
lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases
and leases of low-value assets, right-of-use (ROU) assets and corresponding lease liabilities are recognised
in the statement of financial position. Straight-line operating lease expense recognition is replaced with a
depreciation charge for the right-of-use assets (included in general & administration expenses) and an
interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods of the
lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and
Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation
in profit or loss. For classification within the statement of cash flows, the interest portion is disclosed in
operating activities and the principal portion of the lease payments are separately disclosed in financing
activities. For lessor accounting, the standard does not substantially change how a lessor accounts for leases.
2020 Annual Report
Page 30
2020 Annual Report
Notes to the Financial Statements (Continued)
The Group has applied the modified retrospective transition approach, which does not require comparative
information to be restated in the financial statements for the year ended 30 June 2020. Any cumulative effect
of adopting AASB 16 was recognised as an adjustment to the opening balance of accumulated losses at 1
July 2019. On transition to AASB 16, the Group elected to apply paragraph C8(b)(i) and measure all leases
previously classified as operating leases under AASB 117 at the right-of-use asset’s carrying amount as if
AASB 16 had been applied since commencement date but discounted using the lessee’s incremental
borrowing rate at the date of initial application. The lease liabilities were measured at the present value of
the remaining lease payments, discounted using the lease’s incremental borrowing rate of 10%.
Impact on adoption at 1 July 2019
Based on the chosen transition approach, the Group recognised $737,652 of lease liabilities included in
borrowings (see Note 10) and $691,869 of ROU assets included in property, plant & equipment (see Note 7)
on 1 July 2019. This has resulted in an impact of $45,781 to accumulated losses on the initial application
date.
Measurement of lease liabilities and reconciliation to operating lease commitments
The following table reconciles the minimum lease commitments disclosed in the group’s 30 June 2019
annual financial statements to the amount of lease liabilities recognised on 1 July 2019:
Minimum operating lease commitments disclosed as at 30 June 2019
Less: effect of discounting using the lessee’s incremental borrowing rate of at
the date of initial application
Lease liabilities for leases classified as operating type under AASB 117
Add/(less): adjustments relating to changes in the index or rate affecting
variable payments
Lease liabilities recognised as at 1 July 2019
$1,212,010
($478,660)
($4,300)
$737,652
D.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the normal course of
business.
As disclosed in the financial statements, the Group has net operating cash outflows for the year of $3,167,139
and as at 30 June 2020 has cash and cash equivalents of $2,448,803. The Group also generated a loss after
tax of $4,507,591. The ability of the Group to continue as a going concern is principally dependent upon one
or more of the following conditions:
•
•
•
•
securing appropriate projects and related funding for project investment;
successful divestment of its bioenergy assets;
effective cash flow management; and
raising additional capital or securing other forms of financing, as and when necessary to meet the
levels of expenditure required for the Group to complete its geothermal remediation requirements, to
meet the Group’s working capital requirements and to pursue new project opportunities.
These conditions give rise to material uncertainty which may cast significant doubt over the Group’s ability to
continue as a going concern.
The Directors are satisfied that the Group has access to sufficient funds to extinguish creditors and liabilities
in the ordinary course of business for at least the next 12 months from the date of signing this report and
accordingly have applied the going concern basis of accounting in preparing the financial statements.
2020 Annual Report
Page 31
2020 Annual Report
Notes to the Financial Statements (Continued)
The Directors have assessed that COVID-19 will have no further impact on the going concern of the Group
under the current conditions.
Should the Group be unable to continue as a going concern, it may be required to realise its assets and
extinguish its liabilities other than in the ordinary course of business, and at amounts that differ from those
stated in the financial report. The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts or classification of liabilities and
appropriate disclosures that may be necessary should the Group be unable to continue as a going concern.
E.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at 30 June 2020.
Subsidiaries are all entities which the Group controls. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:
•
•
•
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities
of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated financial statements from the date the Group gains control until the date the Group ceases to
control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders
of the parent of the Group and to the non-controlling interests. All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to transactions between members of the Group are eliminated in
full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including
goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss
is recognised in profit or loss. Any investment retained is recognised at fair value with the change in carrying
amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset.
Material controlled entity/subsidiaries
The consolidated financial statements include the financial statements of the ultimate parent company, ReNu
Energy Limited, and its controlled entities. Principal subsidiaries, all of which are incorporated in Australia,
are listed in the following table:
Name
Principal activities
Quantum Power Pty Ltd
Bioenergy project development
EN Project Company One Pty Ltd
Electricity supply from solar embedded networks(1)
SP Project Company One Pty Ltd
Electricity supply from solar assets(1)
BioEnergy Projects Pty Ltd
Electricity supply from bioenergy assets
ReNu Energy Retail Pty Ltd
Holds an electricity Retailer Authorisation to supply
electricity to customers in 2018/2019
1.
In its capacity as trustee
Equity Interest %
2020
2019
100
-
-
100
-
100
100
100
100
100
2020 Annual Report
Page 32
2020 Annual Report
Notes to the Financial Statements (Continued)
Investments in associates
Associates are those entities over which the Group is able to exert significant influence but which are not
subsidiaries.
Investments in associates are accounted for using the equity method. Any goodwill or fair value adjustment
attributable to the Group’s share in the associate is not recognised separately and is included in the amount
recognised as investment.
The carrying amount of the investment in associates is increased or decreased to recognise the Group’s
share of the profit or loss and other comprehensive income of the associate, adjusted where necessary to
ensure consistency with the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and its associates are eliminated to the
extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the underlying
asset is also tested for impairment.
The following entities have been included in the consolidated financial statements using the equity method:
Name
Principal activities
RE Holding Company One Pty Ltd
Holding company for SM Project Company Pty Ltd and
AJB Projects Pty Ltd(1)
SM Project Company Pty Ltd
Electricity supply from the Goulburn bioenergy project(1)
AJB Energy Projects Pty Ltd
Electricity supply from the AJ Bush bioenergy project(1)
1.
In its capacity as trustee
F.
Foreign currency translation
Equity
Interest %
2020
2019
30
30
30
30
30
30
Both the functional and presentation currency of ReNu Energy is Australian dollars ($A). Transactions in
foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of
the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate
of exchange ruling at the reporting date.
Differences arising on the settlement or translation of monetary items are recognised in the profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising from the translation of financial statements of foreign subsidiaries are taken to
the foreign currency translation reserve at the reporting date.
G.
Property, plant & equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
Depreciation is provided on a straight line basis on all property, plant and equipment. All classes are
depreciated over periods ranging from 3 to 25 years (2019: 3 to 25 years). The assets' residual values, useful
lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.
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 the
profit or loss during the reporting period in which they are incurred.
2020 Annual Report
Page 33
2020 Annual Report
Notes to the Financial Statements (Continued)
Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
included in profit or loss in the year the asset is derecognised.
H.
Impairment of non-financial assets
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where
the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is
written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for a cash-
generating unit (CGU). In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset or CGU.
Impairment losses are recognised in the profit or loss in the year the loss is recognised.
I.
Cash and cash equivalents
Cash and cash equivalents on the Statement of Financial Position comprise cash at bank and on hand and
short-term deposits with an original maturity of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of change in value.
For the purposes of the Consolidated Statement of Cash Flows, cash includes cash on hand and in banks
and short term deposits with an original maturity of three months or less, net of outstanding bank overdrafts.
J.
Inventories
Inventories include spare parts and consumable items used in operations and are valued at the lower of cost
and net realisable value.
K.
Contributed equity
Ordinary shares are classified as equity. Any transaction costs arising on the issue of ordinary shares are
recognised directly in equity as a reduction of the share proceeds received.
L.
Trade and other payables
Trade payables and other payables are carried at cost and represent liabilities for goods and services
provided to the Company prior to the end of the financial year that are unpaid and arise when the Company
becomes obliged to make future payments in respect of the purchase of these goods and services.
M.
Borrowings
Borrowings are initially recognised at fair value net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest
method.
Borrowings are removed from the Statement of Financial Position when the obligation specified in the contract
is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in other income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting date.
2020 Annual Report
Page 34
2020 Annual Report
Notes to the Financial Statements (Continued)
Transaction costs of borrowings
Fees and other costs incurred in relation to the establishment of borrowing facilities are treated as transaction
costs to the extent that it is probable that some or all of the facility will be drawn down and are included in the
initial fair value of the financial liability. Costs for facilities which do not eventuate or for which the probability
of utilisation is not probable are expensed in profit or loss.
N.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
O.
Employee benefits
(i) Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled
within 12 months of the reporting date are recognised in other payables or provisions in respect of employees'
services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities
are settled. Liabilities for sick leave are recognised when the leave is taken and are measured at the rates
paid or payable.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee entitlements – refer to note 11
for further details.
P.
Share-based payment transactions
The Group provides benefits to employees (including executive Directors) in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled
transactions’).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made
using an appropriate valuation model. That cost is recognised, together with a corresponding increase in
other capital reserves in equity, over the period in which the performance and/or service conditions are fulfilled
in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s
best estimate of the number of equity instruments that will ultimately vest.
The expense or credit recognised in the profit or loss for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period and is recognised in employee benefits
expense.
No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions for
which vesting is conditional upon a market or non-vesting condition. These are treated as vesting irrespective
of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or
service conditions are satisfied.
2020 Annual Report
Page 35
2020 Annual Report
Notes to the Financial Statements (Continued)
When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date
fair value of the unmodified award provided the original terms of the award are met. An additional expense is
recognised for any modification that increases the total fair value of the share-based payment transaction or
is otherwise beneficial to the employee as measured at the date of modification. When the award is cancelled
by the entity or by the counterparty any remaining element of the fair value of the award is expensed
immediately through the profit or loss.
Q.
Revenue recognition
Revenues from contracts with customers
The Group’s primary revenue streams relate to the retail sale of electricity to business customers in Australia.
Revenue from contracts from customers is recognised when control of the goods or services is transferred
to a customer at an amount that reflects the consideration to which the group expects to be entitled to receive
in exchange for those goods or services.
Revenue: Electricity and renewal energy credits
Electricity revenue relates to the supply of electricity and related services to customers and the generation of
renewable energy credits and certificates from the government. Revenue from the sale of electricity is
recognised on delivery of the product. Renewable energy credits income is recognised when earned.
This accounting policy relates to the Solar segment which has been classified as discontinued operations.
Please refer to Note 17.
Revenue: projects
Project revenue relates to income earned for the construction and delivery of biogas energy systems to
customers. Revenue is recognised as each stage of the performance obligation in regards to the bioenergy
asset is complete. Stage of completion is measured by reference to project costs incurred to date as a
percentage of total estimated costs for each contract which is determined by a set quotation with the
customer.
This accounting policy relates to the Bioenergy segment which has been classified as discontinued
operations. Please refer to Note 17.
Interest income
Interest income is recorded as the interest accrues, using the effective interest rate (EIR) in accordance with
AASB9. The EIR is the rate that exactly discounts the estimated future cash receipts over the expected life
of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial
asset.
R.
Government grants
Government Grants (including R&D tax incentives) are recognised at their fair value where there is
reasonable assurance that the grant will be received and all attaching conditions will be complied with.
Government grants relating to rehabilitation costs are recorded as an offset against expenditure. To the extent
the government grant is greater than the associated expenditure the residual amount is recorded as other
income.
When the grant relates to an expense item, it is recognised as income over the periods necessary to match
the grant on a systematic basis to the costs that it is intended to compensate. Where the grant relates to an
asset or liability, the fair value is credited to a deferred income account until such time as all conditions
associated with the grant are met. Once these conditions are achieved the credit is allocated to the relevant
asset or liability. The amount of the grant is then released to net income over the expected useful life (by way
of reduced depreciation or amortisation) of the relevant asset.
2020 Annual Report
Page 36
2020 Annual Report
Notes to the Financial Statements (Continued)
S.
Earnings per share
Basic earnings per share is determined by dividing the profit/(loss) after tax by the weighted average number
of ordinary shares outstanding during the financial period. Diluted earnings per share is determined by
dividing the profit/(loss) after tax adjusted for the effect of earnings on potential ordinary shares, by the
weighted average number of ordinary shares (both issued and potentially dilutive) outstanding during the
financial period.
T.
Income tax
Current income tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted at the reporting date in the countries where the Group operates and generates
taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the
statement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are subject to interpretation and establishes provisions where
appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and / or
In respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint arrangements, when the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised, except:
When the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and
In respect of deductible temporary differences associated with investments in subsidiaries, associates
and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is
probable that the temporary differences will reverse in the foreseeable future and taxable profit will be
available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are
2020 Annual Report
Page 37
2020 Annual Report
Notes to the Financial Statements (Continued)
recognised to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred
tax items are recognised in correlation to the underlying transaction either in other comprehensive income or
directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition
at that date, are recognised subsequently if new information about facts and circumstances change. The
adjustment is either treated as a reduction in goodwill (as long as it does not exceed goodwill) if it was incurred
during the measurement period or recognised in profit or loss.
U.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
where the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part
of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position. Cash flows are included in the Statement of
Cash Flow on a net basis and the GST component arising from investing and financing activities, which is
recoverable from, or payable to, the taxation authority are classified as operating cash flows. Commitments
and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
V.
Segment reporting
A business segment is a distinguishable component of the entity that is engaged in providing products or
services that are subject to risks and returns that are different to those of other business segments. Operating
segments are identified on the basis of internal reports that are regularly reviewed and used by the Board of
Directors in order to allocate resources to the segment and assess its performance and are reported in
note 16.
W. Parent Entity financial information
The financial information for the parent entity, ReNu Energy, included in note 25, has been prepared on the
same basis as the consolidated financial statements.
X.
Comparative figures
When required by Accounting Standards, comparative figures are adjusted to conform to changes in
presentation for the current financial year. Certain comparative financial information presented in the
Statement of Profit or Loss and Other Comprehensive Income, and Statement of Cash Flows have been
reclassified in this financial report to improve the presentation of information. The reclassification results in
no net change to loss or cash flows for the comparative period.
2020 Annual Report
Page 38
2020 Annual Report
Notes to the Financial Statements (Continued)
Y.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, relating to the 'rounding off' of amounts in the financial statements. Amounts in the
financial statements have been rounded off in accordance with that Instrument to the nearest dollars.
Z.
Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use and a sale is considered
highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell,
except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and
investment property that are carried at fair value and contractual rights under insurance contracts, which are
specifically exempt from this requirement.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to
fair value less costs to sell. A gain or loss not previously recognised by the date of the sale of the non-current
asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while
they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal
group classified as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale
are presented separately from the other assets in the statement of financial position. The liabilities of a
disposal group classified as held for sale are presented separately from other liabilities in the statement of
financial position.
A discontinued operation is a component of the Group that has been disposed of or is classified as held for
sale and that represents a separate major line of business or geographical area of operations, is part of a
single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired
exclusively with a view to resale. The results of discontinued operations are presented separately in the
statement of profit or loss and other comprehensive income.
AA. Financial Instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs.
The Group does not have financial asset or liability carried at fair value. Subsequent measurement of financial
assets and financial liabilities carried at amortised cost are described below.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVPL):
they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting
is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and
other receivables fall into this category of financial instruments
2020 Annual Report
Page 39
2020 Annual Report
Notes to the Financial Statements (Continued)
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset
expire, or when the financial asset and all substantial risks and rewards are transferred. Refer to Note 2M
for accounting policy for borrowings.
BB. Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease
payments made at or before the commencement date net of any lease incentives received, any initial direct
costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the the Group expects to obtain ownership
of the leased asset at the end of the lease term, the depreciation is over its estimated useful life. Right-of use
assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The the Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets
are expensed to profit or loss as incurred. Right-of-use assets has been included in property, plant and
equipment in the statement of financial position.
CC. Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental
borrowing rate. Lease payments comprise of fixed payments less any lease incentives receivable, variable
lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to
occur, and any anticipated termination penalties. The variable lease payments that do not depend on an
index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an index
or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When
a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or
loss if the carrying amount of the right-of-use asset is fully written down. Lease liability has been included in
borrowings in the statement of financial position.
DD. Significant accounting judgements, estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on judgement, estimates
and assumptions of future events. The key estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting
period are:
Rehabilitation provision
The Company reviews rehabilitation requirements for its geothermal tenements by undertaking an analysis
of the planned activities and costs to rehabilitate the sites including the plugging and abandoning of wells as
appropriate. The estimated costs reflect the planned work required to satisfy the obligations. The plugging
and abandoning of wells are subject to geological complexities and other downhole risks and the ultimate
cost incurred may differ materially to the current estimate. The Company utilised $263,123 of the rehabilitation
provision during the year and on review increased its current rehabilitation requirements for its existing
Cooper Basin tenements by $293,486.
2020 Annual Report
Page 40
2020 Annual Report
Notes to the Financial Statements (Continued)
Impairment
The Company announced on 30 July 2020 that it had entered into an agreement to dispose of the remaining
30% interest in Bioenergy assets. Under this arrangement the Company would not recover the costs of
$261,399 for capital works made in relation to the Bioenergy assets or the loan of $1,066,140 to the associate
company, RE Holding Company One Pty Ltd. As a result an impairment of $1,327,539 (included in the general
& administrative expenses) has been recorded against these assets.
Note 3A – Income
(i) Revenue from contracts with customers
Operating and maintenance services
(ii) Other income
Recoupment of rehabilitation costs
R&D tax incentive received*
Grant income
Other
2020
$
2019
$
151,198
151,198
206,621
57,399
68,000
69,467
205,724
205,724
-
106,900
-
31,668
401,487
138,568
* Total R&D incentive received or receivable at 30 June 2020 is $57,399 (2019: $nil) in relation to rehabilitation costs and $nil (2019:
$106,900) in relation to bioenergy costs.
Disaggregation of Revenue from contracts with customers
The Group derives revenue from the transfer of services over time in the following major product lines and
geographical regions:
Year ended 30 June 2020
Operating and
maintenance services
$
Total
$
Primary Geographic
Market
Queensland
New South Wales
Total
Project
Bioenergy Project O&M
Total
56,895
94,303
151,198
56,895
94,303
151,198
151,198
151,198
151,198
151,198
2020 Annual Report
Page 41
2020 Annual Report
Notes to the Financial Statements (Continued)
Year ended 30 June 2019
Primary Geographic Market
Queensland
New South Wales
Total
Project
Bioenergy Project O&M
Total
Operating and
maintenance
services
$
Total
$
52,998
152,726
205,724
52,998
152,726
205,724
205,724
205,724
205,724
205,724
Note 3B – Personnel expenses
Loss before income tax has been determined after charging the following specific
items:
Employee expenses
Termination payments
Share based payments
Note 3C – Other operating expenses
Business development costs
Depreciation of operational plant & equipment
Credit impairment losses
Facility operating costs
Project rectification costs
Rehabilitation costs
Research and development
Project management
2020
$
2019
$
1,195,184
1,915,908
518,062
(104,885)
-
94,412
1,608,361
2,010,320
2020
$
20,736
8,975
149,249
184,650
-
2019
$
105,359
6,001
-
296,527
8,726
236,984
(275,000)
-
(25,000)
33,513
634,107
-
116,613
2020 Annual Report
Page 42
2020 Annual Report
Notes to the Financial Statements (Continued)
Note 3D – General & administrative expenses
Governance and investor relations
External advisory
Facility, IT and communications
Travel
Insurance
Depreciation of plant and equipment
Depreciation on right of use asset
Impairment of loan
Impairment of plant and equipment
Other
Note 3E – Finance costs
Interest expense
Interest on lease liabilities
Note 3F – Other expenses and losses/(gains)
General and administrative expenses have been determined after
charging/(crediting) the following specific items (amounts may be included above
in notes 3B, 3C and 3D):
Depreciation
Operating lease rentals paid
Foreign exchange loss/(gain)
Employer superannuation contributions paid or payable
2020
$
144,730
288,080
155,376
45,566
260,968
-
77,618
1,066,140
261,399
18,998
2019
$
278,809
197,600
310,636
82,841
214,102
10,223
-
-
-
55,684
2,318,875
1,149,895
2020
$
7,379
1,606
8,985
2020
$
86,593
-
-
112,981
199,574
2019
$
8,327
-
8,327
2019
$
16,224
111,800
3,330
170,857
302,211
2020 Annual Report
Page 43
2020 Annual Report
Notes to the Financial Statements (Continued)
Note 4 – Income tax
Income tax expense
2020
$
2019
$
The prima facie tax benefit on loss of 27.5% (2019 – 27.5%) differs from the
income tax provided in the financial statements as follows:
Prima facie tax benefit on loss
1,239,587
959,803
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
R&D Tax Incentive receivable
Change in R&D incentive for the prior year *
Other income/(expenses)
Utilisation of Losses not recognised
Income tax benefit/(expense)
Adjustments for current tax of prior periods
-
-
15,785
29,397
(30,092)
(101,449)
-
88,364
1,225,280
976,115
-
-
Deferred tax assets for tax losses and other temporary differences not
recognised
(1,225,280)
(976,115)
Income tax expense
* Change in R&D incentive represents amounts received in excess of carrying receivable balances
Income tax expense comprises:
Current tax
Deferred tax
Adjustment for current tax of prior periods
Deferred tax asset
Total income tax expense
-
-
-
-
(1,225,280)
(976,115)
-
-
1,225,280
976,115
-
-
2020 Annual Report
Page 44
2020 Annual Report
Notes to the Financial Statements (Continued)
Tax losses
2020
$
2019
$
Unused tax losses for which no deferred tax asset has been recognised1
276,499,461
268,533,449
Potential tax benefit at 27.5%
76,037,352
73,846,698
Deferred income tax
Deferred income tax at the end of the reporting period relates to the following:
Deferred tax liabilities
Other deferred tax liability
Total deferred tax liabilities (A)
Deferred tax assets
Losses available for offset against future taxable income:
Company
Subsidiary
Other deferred tax asset
Total deferred tax assets (B)
Net deferred tax assets (A) + (B)
Deferred tax assets not recognised1
Recognised net deferred income tax assets
2020
$
(4,064)
(4,064)
2019
$
(861)
(861)
73,698,068
71,597,271
2,339,284
2,249,427
639,942
873,476
76,677,294
74,720,174
76,673,230
74,719,313
(76,673,230)
(74,719,313)
-
-
1 Deferred tax assets arising from tax losses and temporary differences are only brought to account to the extent that it offsets the
Group's deferred tax liabilities arising from temporary differences. As the Group does not have a history of taxable profits, the
deferred tax assets associated with tax losses and temporary differences in excess of the Group’s deferred tax liabilities arising from
temporary differences is not yet regarded as probable of recovery at 30 June 2020.
Movement in deferred tax assets
Balance at the beginning of the year
(Charged)/credited to profit or loss:
Tax losses
Trade and other payables
Provisions
Adjustment for deferred tax of prior periods
Accounting impairment
2020
$
2019
$
74,720,174
74,425,171
2,190,653
53,099
(25,911)
(260,222)
367,823
827,369
(29,261)
(101,980)
(23,131)
139,700
Recognition/(Derecognition) of DTA of Associated Entities
(181,432)
(417,516)
Rights issue costs recognised through equity
Other balances and transactions
Balance at the end of the year
-
56,817
(186,890)
(156,995)
76,677,294
74,720,174
2020 Annual Report
Page 45
2020 Annual Report
Notes to the Financial Statements (Continued)
Movement in deferred tax liabilities
Balance at the beginning of the year
(Charged)/credited to profit or loss:
Trade and other receivables
Other balances and transactions
Balance at the end of the year
Note 5 – Trade and other receivables
Current
Cash held as security
Trade receivables
GST Receivable
Interest Receivable
Other receivables and deposits
2020
$
(861)
(3,203)
-
(4,064)
2020
$
150,000
228,960
27,966
14,777
55,837
2019
$
37,008
(13,277)
(22,870)
(861)
2019
$
429,687
88,859
63,257
15,721
180,056
Total current trade and other receivables
477,540
777,580
Non-current
Loan to associate1
R&D Tax Incentive receivable
Total non-current trade and other receivables
-
1,066,140
694,585
570,000
694,585
1,636,140
1 Loan to associate impaired to nil as result of the sale of the Bioenergy investment announced on 31 July 2020.
Assets pledged as security
Of the cash held as security nil (2019: $39,687) is provided as security for borrowings (refer note 10) and
$150,000 (2019: $390,000) for bank guarantees (refer note 22).
Foreign exchange, interest rate and liquidity risk
Information about the Group’s exposure to foreign exchange risk, interest rate risk and liquidity risk is provided
in note 24. Trade and other receivables are non-interest bearing.
Fair value and credit risk
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivables
mentioned above. Refer to note 24 for more information on the risk management policy of the Group.
2020 Annual Report
Page 46
2020 Annual Report
Notes to the Financial Statements (Continued)
Impairment
The Group assesses impairment on a forward looking basis for its trade and other receivables carried at
amortised cost. 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. No expected credit loss has been recognised by the Group during
the year.
Note 6 – Inventories
Spares1
2020
$
-
2019
$
59,300
1 Reclassified to assets held for sale as part of the sale of the Bioenergy investment announced on 31 July 2020. Refer to Note 17(c)
Note 7 – Property, plant & equipment
Plant and equipment at cost
2020
$
2019
$
20,057,836
30,135,887
Less: accumulated depreciation and impairment
(20,042,740)
(24,038,213)
Right of use assets at cost
Less: accumulated depreciation and impairment
Total Property, Plant and Equipment
Reconciliation of Plant & Equipment
41,150
(16,596)
-
-
39,650
6,097,674
Carrying amount at beginning of the period
6,097,674
5,967,739
Recognition of right of use assets on 1 July 2019 (Note 1C)
691,869
-
Additions
Disposals
Reclassification to Assets Held for Sale
Impairment1
Depreciation / amortisation expense
Carrying amount at the end of the period
82,008
706,184
(6,421,331)
-
-
232,466
(261,399)
(508,000)
(149,171)
(300,715)
39,650
6,097,674
1 Impairment of property, plant and equipment as result of the sale of the Bioenergy investment announced on 31 July 2020.
Assets pledged as security
Plant and equipment with a carrying value of nil (2019: $5,775,000) is pledged as security for current and
non-current borrowings. Refer to note 10 for details of borrowing.
2020 Annual Report
Page 47
2020 Annual Report
Notes to the Financial Statements (Continued)
Right-of-use assets
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the
period:
Solar assets
Property
Equipment
Total
As at 1 July 2019 (restated)
Additions
Depreciation expense
Disposals
As at 30 June 2020
Note 8 – Investment in Associates
Interests in associates
648,227
-
(12,803)
(635,424)
37,472
58,530
6,170
691,869
-
58,530
(90,421)
(72,682)
(4,936)
-
-
(635,424)
-
23,320
1,234
24,554
Name of entity
Ownership interest
Carrying amount
RE Holding Company One Pty Ltd
2020
30%
2019
30%
2020
$
-
2019
$
530,377
RE Holding Company One Pty Ltd, in its capacity as trustee for the RE Holding Trust One, acts as holding
company for entities which own bioenergy projects in Australia. In July 2018, the Company sold a 70%
interest in RE Holding Company One Pty Ltd as described in note 17.
On 31 July 2020, the Company announced that it had accepted an offer from its Alliance Partner, Resonance
Industrial Water Infrastructure Fund, to acquire the Group’s 30% interest in the Goulburn and AJ Bush
bioenergy projects for a consideration of $500,000.
As a result the investment in associate carrying value is nil as it has been reclassified as an asset held for
sale (refer to note 17(c)). A gain on sale of the investment of $168,437 is expected to be recognised in the
2021 financial year.
2020 Annual Report
Page 48
2020 Annual Report
Notes to the Financial Statements (Continued)
Summarised financial information for associates
Summarised Statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Reconciliation to carrying amount
Group’s interest
Group’s interest in net assets
Elimination of Group interest in (profits)/losses arising from transactions with
associates
Reclassification as asset held for sale
Carrying amount of investment in associates
Summarised statement of profit or loss and other comprehensive income
Revenue
Loss from continuing operations
Total comprehensive loss
Group’s share of loss of associates at 30%
Note 9 – Trade and other payables
Current
Trade creditors
Accrued and other liabilities
GST payable
Trade creditors and accruals
2020
$
2019
$
421,377
905,240
5,443,848
5,128,879
5,865,225
6,034,119
(628,367)
(278,022)
(3,570,062)
(3,570,062)
(4,198,429)
(3,848,084)
1,666,796
2,186,035
30%
30%
500,039
655,811
(168,476)
(125,434)
(331,563)
-
-
530,377
2020
$
2019
$
948,982
834,674
(518,209)
(268,896)
(518,209)
(268,896)
(155,463)
(80,669)
2020
$
2019
$
301,816
106,168
15,551
423,535
398,613
383,278
54,629
836,520
2020 Annual Report
Page 49
2020 Annual Report
Notes to the Financial Statements (Continued)
Terms and conditions
Accounts payable and accrued liabilities are non-interest bearing. Liabilities are recognised for amounts to
be paid in the future for goods and services received, whether or not billed to the Company. All amounts are
normally settled within 30 days, and discounts for early payment are normally taken where it is considered
advantageous for the Company to do so. Due to the short term nature of these payables, their carrying value
is assumed to approximate their fair value.
Note 10 – Borrowings
Current borrowings
Lease liability
Secured loan
Other borrowings
Total current borrowings
Non-current borrowings
Secured loan
Total Non-current borrowings
Changes in borrowings resulting from financing activities
2020
$
27,358
-
-
27,358
2019
$
-
55,183
246,530
301,713
-
-
1,131,476
1,131,476
2020
$
2019
$
Balance as at beginning of financial year as previously reported
1,433,189
1,431,293
Lease liabilities recognised at 1 July 2019 on AASB 16 adoption (Note 1C)
737,652
-
Balance as at 1 July 2019
Cash proceeds from borrowings
Disposal of lease liabilities on sale of solar business
Movement in lease liabilities
Repayment of lease liabilities
Expensing of transaction costs (non-cash)
Repayments of principal
Balance at the end of the financial year
2,170,841
1,431,293
-
328,707
(689,045)
(21,249)
-
-
-
-
-
24,442
(1,433,189)
(351,253)
27,358
1,433,189
2020 Annual Report
Page 50
2020 Annual Report
Notes to the Financial Statements (Continued)
Lease liabilities
Set out below are the carrying amounts of lease liabilities (included under borrowings) and the movements
during the period:
Changes in lease liabilities
At 1 July 2019
Lease liabilities recognised at 1 July 2019 on AASB 16 adoption (Note 1C)
Disposal of lease liabilities from solar business
Additions
Interest
Lease payments
At 30 June 2020
Current
Non-current
2020
$
-
737,652
(689,045)
63,393
1,606
(86,248)
27,358
27,358
-
27,358
2019
$
-
-
-
-
-
-
-
-
-
-
The maturity analysis of lease liabilities are disclosed in Note 24(B).
Fair value of borrowings
The fair values of borrowings are not materially different from their carrying values as interest rates on those
borrowings are either close to current market rates or the borrowings are of a short term nature.
Note 11 – Provisions
Employee
Entitlements
$
Rehabilitation
Provision
$
Other
Provisions
$
Total
Provisions
$
At 1 July 2019
73,858
1,394,838
102,736
1,571,432
Provision raised during the
year
69,330
293,486
5,915
368,731
Utilised
(136,449)
(263,123)
(2,984)
(402,556)
Divestment of solar
operations
-
-
(105,667)
(105,667)
At 30 June 2020
6,739
1,425,201
Current 2020
Non current 2020
At 30 June 2020
Current 2019
6,739
1,425,201
-
-
6,739
1,425,201
-
-
-
-
1,431,940
1,431,940
-
1,431,940
50,039
1,394,838
11,980
1,456,857
Non current 2019
23,819
-
90,756
114,575
At 30 June 2019
73,858
1,394,838
102,736
1,571,432
2020 Annual Report
Page 51
2020 Annual Report
Notes to the Financial Statements (Continued)
Employee entitlements
The provision for employee entitlements includes accrued annual leave and long service leave. All annual
leave is expected to be taken within 12 months of the respective service being provided, so annual leave
obligations are classified as current.
The liability for long service leave is measured as the present value of expected future payments to be made
in respect of services provided by employees up to the reporting date. Consideration is given to expected
future wage and salary levels, experience of employee departures, and periods of service. Expected future
payments are discounted using market yields at the end of the reporting period of high quality corporate
bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows.
Rehabilitation provision
The rehabilitation provision relates to the Group’s share of the expected cost to complete the remaining
rehabilitation of the Group’s legacy geothermal sites. This provision amount includes internal project
management costs, abandonment engineering and fieldwork and remediation work estimates. The
rehabilitation works are planned for late 2020 pending the availability of contractors.
Bank guarantees totalling $150,000 have been issued to the relevant government departments to cover
tenement rehabilitation obligations.
Other provisions
Other provisions have been recognised for the present value of expected future costs to ‘make good’ or
remove the Group’s plant and equipment from the property of its customers at the end of the relevant
contracts.
Note 12 – Issued capital
Authorised Shares
2020
$
2019
$
120,634,341 (2019 – 122,068,491) fully paid ordinary shares
357,069,848
357,074,708
MOVEMENT IN ORDINARY SHARE CAPITAL:
NUMBER OF
SHARES
ISSUE PRICE
$ PER SHARE
30/06/18 Balance at end of financial year
859,157,346
$’000
355,286,612
27/7/18
Shares issued pursuant to entitlement offer 1:2
106,113,451
0.012
1,273,364
11/12/18
Share consolidation 1:10
14/12/18
Shares issued pursuant to loan share plan(1)
7/6/19
Shares issued pursuant to rights issue
Share issue costs
30/06/19 Balance at end of financial year
10/9/19
Share issue costs
17/9/19
Share cancellation(2)
30/06/20 Balance at end of financial year
(868,741,056)
14,424,000
11,114,750
122,068,491
-
(1,434,150)
120,634,341
-
-
0.066
733,577
(218,845)
357,074,708
(4,860)
-
357,069,848
1.
Shares issued pursuant to an employee loan share plan are scheduled to be bought back for failure to satisfy
vesting conditions.
2.
Employee share scheme buy back due to failure to satisfy vesting conditions.
2020 Annual Report
Page 52
2020 Annual Report
Notes to the Financial Statements (Continued)
Terms and conditions of contributed equity
Ordinary Shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Share appreciation rights (SARS)
In addition to the ordinary shares, the Company has issued Share Appreciation Rights (SARs) to Key
Management Personnel. The SARs can convert into Ordinary Shares upon the satisfaction of certain vesting
conditions. Further details are set out in note 19.
MOVEMENT IN SHARE APPRECIATION RIGHTS:
30/06/19
Balance at end of financial year
30/06/20
Balance at end of financial year
NUMBER OF
SARs
-
-
Note 13 – Reserves
Share based payment reserve
Foreign currency translation reserve
Reconciliation of Reserves
Carrying amount at beginning
Net share based payments expense recognised
Recognition of foreign currency translation reserve
Nature and purpose of reserves
Share based payment reserve
2020
$
48,307
15,464
63,771
168,656
(104,885)
-
2019
$
153,192
15,464
168,656
70,914
94,412
3,330
63,771
168,656
The employee share based payment reserve is used to record the value of share appreciation rights and
share loan plan shares granted to employees, including Key Management Personnel, as part of their
remuneration. Refer to note 19 for further details.
Foreign currency translation reserve
This reserve records the differences arising as a result of translating the financial statements of subsidiaries
recorded in foreign currencies to the presentational currency.
Note 14 – Expenditure commitments
Geothermal tenement commitments
In order to maintain current rights of its geothermal tenements, the Company is required to outlay annual
rentals and to meet certain expenditure requirements of the Department of State Development, South
Australia. These obligations are subject to renegotiation upon expiry of the tenements. The obligations are
not provided for in the financial report and are payable as follows:
2020 Annual Report
Page 53
2020 Annual Report
Notes to the Financial Statements (Continued)
Payable not later than one year
Operating Leases (non-cancellable)
2020
$
2019
$
17,200
64,000
The Group leases or holds licences to occupy various offices for terms of up to 6 months. Under some of the
agreements, the Group has an option to extend the lease or licence for additional periods on various terms.
Future payments for some licences escalate annually at a rate which approximates expected inflation rates.
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as
follows:
Payable within one year
Payable later than one year but not later than five years
Payable later than five years
2020
$
-
-
-
-
2019
$
135,051
390,142
686,817
1,212,010
From 1 July 2019, the group has recognised right-of-use assets for its non-cancellable operating leases,
see note 2(C) and note 7 for further information.
Note 15 - Earnings per share
2020
Cents per share
2019
Cents per share
Basic and diluted earnings/(loss) per share attributable to the equity
holders of the Company:
From continuing operations
From discontinued operations
The following reflects the income and share data used in the calculations of
basic and diluted earnings per share:
Net profit/(loss) attributable to equity shareholders:
From continuing operations
From discontinued operations
(3.38)
(0.36)
(3.74)
2020
$
(2.82)
(0.53)
(3.35)
2019
$
(4,082,237)
(2,942,061)
(425,354)
(548,131)
(4,507,591)
(3,490,192)
2020
Shares
2019
Shares
Weighted average number of ordinary shares used in calculation of basic
and diluted earnings per share
121,247,251
104,268,504
As the Group has generated a loss, potential ordinary shares have been deemed to be anti-dilutive.
2020 Annual Report
Page 54
2020 Annual Report
Notes to the Financial Statements (Continued)
Note 16 - Segment information
The Company operated in three segments, being: solar; bioenergy; and geothermal energy exploration and
evaluation. The geothermal segment exists only to complete remediation activities. Solar and bioenergy
segments have been included in the discontinued operations. All operations are located in Australia.
Unless otherwise stated, all amounts reported to the Managing Director and Board of Directors as the chief
operating decision makers are in accordance with the Group’s accounting policies.
The following table represents revenue and profit information for the Group’s operating segments for the year
ended 30 June 2020.
Year Ended 30 June 2020
Reconciliation to loss from
discontinued operations
after tax
Bioenergy*
$
Geotherm
al
$
Solar
$
Corporate**
$
Segment
totals
$
Discontinued
operations***
$
Consolidated
$
Revenue and
income
- From external
customers
- Other income
- Interest income
151,198
240,874
264,020
-
656,092
(240,874)
415,218
-
-
-
35
-
-
137,468
137,468
90,869
90,904
-
(35)
137,468
90,869
Expenses
(155,377)
(252,061)
(270,497)
(2,721,338)
(3,399,273)
252,061
(3,147,212)
EBITDA
(4,179)
(11,152)
(6,477)
(2,493,001)
(2,514,809)
11,152
(2,503,657)
Gain on sale of
fixed assets
Gain on sale of
subsidiary
Statutory
EBITDA
Share of loss
from associate
Depreciation
Impairment
Borrowing
transaction costs
Interest expense
Income tax
expense
Profit /(Loss)
after tax
-
(17,516)
-
-
-
-
-
-
-
-
(17,516)
17,516
-
-
(4,179)
(28,668)
(6,477)
(2,493,001)
(2,532,325)
28,668
(2,503,657)
(155,463)
-
(61,332)
-
-
-
(155,463)
-
(155,463)
(86,593)
(147,925)
61,332
(86,593)
-
-
-
-
-
-
-
(1,327,539)
(1,327,539)
-
(1,327,539)
(306,851)
(28,503)
-
-
-
-
-
(306,851)
306,851
-
(8,985)
(37,488)
28,503
(8,985)
-
-
-
-
(159,642)
(425,354)
(6,477)
(3,916,118)
(4,507,591)
425,354
Loss from continuing operations after tax
(4,082,237)
* Bioenergy segment included in the discontinued operations in 2019 related to the sale of 70% interest in Goulburn
Bioenergy Project completed in July 2018 (refer Note 17). After the disposal, the Bioenergy segment has changed the
nature of its operation to providing operating and maintenance services of Bionergy assets to associate companies up
to February 2020.
2020 Annual Report
Page 55
2020 Annual Report
Notes to the Financial Statements (Continued)
** Related to grant income corporate overheads and recharge income which cannot be attributable to each individual
segment.
*** Discontinued operations relate entirely to Solar segment.
Year Ended 30 June 2019
Reconciliation to loss
from discontinued
operations after tax
Bioenergy
$
Geotherm
al
$
Solar
$
Corporate**
$
Segment
totals
$
Discontinu
ed
operations*
$
Consolidate
d
$
Revenue and
income
- From external
customers
572,231
1,012,164
- Interest income
45,809
669
-
-
-
1,584,395
(1,240,103)
344,292
33,662
80,140
(669)
79,471
Expenses
(1,032,161)
(1,092,181)
117,961
(2,439,712)
(4,446,093)
1,185,488
(3,260,605)
EBITDA
(414,121)
(79,348)
117,961
(2,406,050)
(2,781,558)
(55,284)
(2,836,842)
145,223
173,128
-
-
-
-
-
-
145,223
(145,223)
173,128
(173,128)
-
-
(95,770)
(79,348)
117,961
(2,406,050)
(2,463,207)
(373,635)
(2,836,842)
(80,669)
-
Depreciation
(14,514)
(284,490)
-
-
-
-
-
-
-
(80,669)
-
(80,669)
(16,224)
(315,228)
299,005
(16,223)
-
-
(508,000)
508,000
(39,504)
(8,327)
(83,584)
39,504
75,257
-
-
(8,327)
-
-
-
-
-
-
-
-
(508,000)
(39,504)
(75,257)
-
(190,953)
(986,599)
117,961
(2,430,601)
(3,490,192)
548,131
Loss from continuing operations after tax
(2,942,061)
*Discontinued operations relate to the Bioenergy and Solar segments.
** Related to corporate overheads which cannot be attributable to each individual segment.
2020 Annual Report
Page 56
Gain on sale of
fixed assets
Gain on sale of
subsidiary
Statutory
EBITDA
Share of loss
from associate
Impairment
Borrowing
transaction costs
Interest expense
Income tax
expense
Profit /(Loss)
after tax
2020 Annual Report
Notes to the Financial Statements (Continued)
Note 17 – Discontinued Operations and Assets Classified as Held for Sale
During the year ended 30 June 2020, the Group disposed of a 100% interest in the solar projects. On 4
September 2019, the Company completed the sale of a 100% interest in RE Holding Company Two Pty Ltd,
RE Holding Company Three Pty ltd and ReNu Energy Retail Pty Ltd, recognising a loss of $17,516. The
result from the solar operations up until the date of sale have been classified as discontinued operations.
During the year ended 30 June 2019, the Group disposed of a 70% interest in two bioenergy projects:
(i) On 17 July 2018, the Company completed the sale of a 70% interest in RE Holding Company One
Pty Ltd whose subsidiary owns the Goulburn Bioenergy Project to an entity in which the Company
has a 30% interest, recognising a gain of $145,000; and
(ii) On 13 December 2018, a Group company sold the property, plant and equipment of a bioenergy
business to an entity in which the Company has a 30% interest, recognising a gain of $173,000.
The results from these two bioenergy projects up until the date of sale have been classified as discontinued
operations. The results from these projects from the date of sale have been accounted-for using the equity
method of accounting.
(a) Profit from discontinued operations after tax
Revenue – sales income
Interest revenue
Expenses
Depreciation
Borrowing costs
Interest
Impairment
2020
$
2019
$
240,874
1,240,103
35
669
(252,061)
(1,185,488)
(61,332)
(299,005)
(306,851)
(39,504)
(28,503)
(75,257)
-
(508,000)
Gain on disposal of subsidiary – refer to (b) below
(17,516)
145,223
Gain on sale of property, plant and equipment
Net loss from discontinued operations
Income tax expense
-
173,128
(425,354)
(548,131)
-
-
Net loss from discontinued operations after tax
(425,354)
(548,131)
Net cash flows from discontinued operations
Net cash inflow from operating activities
Net cash inflow from investing activities
Net cash outflow from financing activities
234,301
360,115
5,775,000
2,658,252
(306,851)
(108,393)
2020 Annual Report
Page 57
2020 Annual Report
Notes to the Financial Statements (Continued)
(b) Details of the sale of the subsidiaries
Consideration received or receivable
Cash
Receivables
Loan receivable from associate
Fair value of investment in associate received
2020
$
2019
$
5,775,000
2,800,000
-
-
-
788,888
720,000
453,360
Carrying amount of net assets sold / derecognised
(5,757,032)
(4,514,922)
Transaction costs
Gain/(loss) on sale
Gain/(loss) on sale (net of retained 30% interest)1
1 Relates to the disposal of 70% interest in bioenergy projects in 2019.
(c) Assets and liabilities of discontinued operation
Assets
Cash
Trade and other receivables
Property, plant & equipment
Right of use assets
Total assets
Liabilities
Trade and other payables
Lease liability
Provisions
Total liabilities
Net assets
(35,484)
(17,516)
-
-
247,326
173,128
2020
$1
2019
$2
-
319,681
14,714
774,424
5,756,266
3,740,558
638,513
-
6,714,460
4,529,696
(162,624)
(689,045)
(105,759)
(957,428)
-
-
(14,774)
(14,774)
5,757,032
4,514,922
1 Relates to the carrying amount of the net assets and liabilities of RE Holding Company Two Pty Ltd, RE Holding
Company Three Pty Ltd, ReNu Energy Retail Pty Ltd as at the date of the sale.
2 Relates to the carrying amount of the net assets and liabilities of RE Holding Company One and its subsidiaries as at
the dates of the sales.
(d) Assets held for sale
Investment in Bioenergy Alliance
Inventories
Total assets held for sale
2020
$
331,563
59,300
390,863
2019
$
-
-
-
In June 2020, the Board approved the sale of its remaining 30% interest in RE Holding Company One Pty
Ltd whose subsidiary owns the Goulburn Bioenergy Projects. On 30 July 2020, ReNu Energy Limited entered
into a Securities and Asset Sale and Purchase Agreement with Resonance Water Finance UK Limited for
2020 Annual Report
Page 58
2020 Annual Report
Notes to the Financial Statements (Continued)
$500,000 and the sale completed on 13 August 2020. At 30 June 2020, the 30% interest in RE Holding
Company One Pty Ltd and inventories were classified as assets held for sale in the statement of financial
position.
There were no liabilities directly associated with assets held for sale.
Note 18 – Remuneration of Auditors
Auditors of the Group - BDO
Audit and review of the financial statements
Other assurance services
Total services provided by BDO
2020
$
2019
$
44,050
49,500
-
-
44,050
49,500
During the year there were nil (2019: nil) fees were paid or payable for non-audit services provided by the
auditor of the parent entity, its related practices and non-related audit firms.
Note 19 – Key Management Personnel
Compensation of Key Management Personnel
Short-term employee benefits
Post-employment benefits
Termination benefits
Share based payment
2020
$
2019
$
843,164
1,042,958
82,185
65,813
457,900
-
-
94,413
1,383,249
1,203,184
Further information on remuneration of Key Management Personnel is shown in the Remuneration Report
contained within the Directors’ Report.
Note 20 – Related party disclosures
Related party transactions with Directors
The Group engaged Maxify Pty Ltd to provide consulting services. The key resource from Maxify is T. Louka
(Non-executive Director). Consulting fees of $153,964 (2019: $9,000) were paid during the year.
The Group engaged Pacific Energy Partners Pty Ltd to provide consulting services. The key resource from
Pacific Energy Partners Pty Ltd is T. Scholefield (Executive Director). Consulting fees of $112,622 were paid
during the year (2019: nil).
2020 Annual Report
Page 59
2020 Annual Report
Notes to the Financial Statements (Continued)
Note 21 - Notes to the Cash Flow Statement
2020
$
2019
$
A. Reconciliation of cash
Cash balance comprises:
Cash at bank
Term deposits
2,448,803
1,411,011
-
13,904
Total cash – excluding cash held by disposal group held for sale
2,448,803
1,424,915
B. Reconciliation of the operating loss after tax with the net cash flows used
in operations
Loss after income tax
Depreciation and amortisation
Impairment of property, plant and equipment
Impairment of loans
(4,507,590)
(3,490,192)
86,593
261,399
1,066,140
314,456
508,000
-
Net (profit)/loss on disposal of property, plant & equipment
-
(317,744)
Share based payments expense
Share of losses of associates
Prior year R&D claim received
Credit impairment losses
4,760
155,463
-
149,249
94,412
80,669
91,775
-
Items treated as cash flows from financing activities:
Transaction costs of loans and borrowings
315,851
26,080
Changes in Operating Assets & Liabilities
(Increase)/decrease in receivables and prepayments
17,983
472,996
Increase/(decrease) in other creditors and accruals
(474,376)
(792,191)
Decrease in provisions
(242,611)
(298,792)
Net Cash Flow used in Operating Activities
(3,167,139)
(3,310,531)
2020 Annual Report
Page 60
2020 Annual Report
Notes to the Financial Statements (Continued)
Note 22 – Contingent liabilities
Bank guarantees
The Group’s bankers have issued bank guarantees as security for various obligations:
(a) To relevant Government authorities in respect of tenement rehabilitation obligations of the Company:
$150,000 (2019: $150,000);
As noted in note 5, these amounts are secured over cash deposits.
Note 23 – Subsequent events
Sale of Investment in Bioenergy alliance
On 31 July 2020, the Company announced that it had accepted an offer from its Alliance Partner, Resonance
Industrial Water Infrastructure Fund, to acquire the Group’s 30% interest in the Goulburn and AJ Bush
bioenergy projects for a consideration of $500,000. Under this arrangement the Company would not recover
the costs of $261,399 for capital works made in relation to the Bioenergy assets or the loan of $1,066,140 to
the associate company, RE Holding Company One Pty Ltd. As a result an impairment of $1,327,539 (included
in the general & administrative expenses) has been recorded against these assets. A gain on the sale of the
investment in the bioenergy projects of $168,437 is expected to be recognised in the 2021 financial year.
No other matter or circumstance has arisen since 30 June 2020 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.
Note 24 – Financial risk management
The Group’s principal financial instruments comprise cash, short-term deposits and borrowings. The Group
has various other financial assets and liabilities such as trade receivables and trade payables which arise
directly from its operations. The Group does not trade in financial instruments. The main risks arising from
the Group’s financial instruments are credit risk and liquidity risk.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class
of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.
Primary responsibility for identification and control of financial risks rests with the board of Directors, however
the day-to-day management of these risks is under the control of the Chief Executive Officer. The Board
agrees the strategy for managing future cash flow requirements and projections.
(A)
Credit risk
The Group’s maximum exposures to credit risk at balance date in relation to financial assets, is the carrying
amount of those assets as recognised on the reporting of financial position. There are no derivative financial
instruments currently being used by the Group to offset its credit exposure.
The Group trades only with recognised, creditworthy third parties for material transactions and as such
collateral is not requested nor is it the Group's policy to securitise its trade and other receivables. The Group’s
retail business does have exposure to small business customers for whom credit records may not be readily
available, however individual exposures have not been assessed as posing a material credit risk to the Group.
2020 Annual Report
Page 61
2020 Annual Report
Notes to the Financial Statements (Continued)
(B)
Liquidity risk
The Group’s objective is to maintain adequate capital to finance its current operations and near-term growth
opportunities while maintaining sufficient funds to meet its obligations in the event of a business downturn.
The Group plans to introduce conservative levels of debt financing to fund its growth plans, with repayment
profiles which match the expected cash flows from the relevant business operations. The Group’s financial
liabilities and their contractual maturities are:
Contractual maturities of financial liabilities
2020
Trade payables
Lease liabilities
Total financial
liabilities
2019
Trade payables
Borrowings
Total financial
liabilities
Less than 6
months
$’000
301,816
30,820
332,636
Between 6
months & 1
year
$’000
Between 1
year & 2
years
$’000
Between 2
years & 5
years
$’000
Total
contractual
cash flows
$’000
Total carrying
value
$’000
-
-
-
-
-
-
-
-
-
-
-
-
301,816
30,820
332,636
Less than 6
months
$’000
836,520
250,708
1,087,228
Between 6
months & 1
year
$’000
Between 1
year & 2
years
$’000
Between 2
years & 5
years
$’000
Total
contractual
cash flows
$’000
Total carrying
value
$’000
-
153,646
153,646
-
-
836,520
836,520
140,698
1,209,329
1,754,381
1,433,189
140,698
1,209,329
2,590,901
2,269,709
(C) Market risk
Currency risk
The Group does not have any material exposure to foreign currency risk (2019: nil), but may cover the
expected cost of firm orders denominated in foreign currencies with forward contracts from time to time.
Interest rate risk
The Group’s cash balances are held in a combination of interest-bearing term deposits and bank accounts.
For each 10% movement in the interest rate, the Group’s profit/loss after tax would increase/decrease by
$2,200 if the year end cash balance was invested at those rates for 12 months.
The Group’s borrowings are at fixed rates of interest and there is no exposure to interest rate risk.
2020 Annual Report
Page 62
2020 Annual Report
Notes to the Financial Statements (Continued)
Note 25 – Information relating to ReNu Energy Limited (The Parent)
Current Assets
Total Assets
Current Liabilities
Total Liabilities
Contributed Equity
Accumulated Losses
Other Reserves
Profit or (loss) of the Parent Entity
Total comprehensive income of the Parent Entity
Contractual obligations
2020
$
3,251,568
3,686,045
2019
$
6,049,921
8,243,168
(1,306,045)
(2,036,228)
(1,306,045)
(2,260,047)
357,069,845
357,074,605
(354,738,153)
(351,248,598)
48,308
157,114
2,380,000
5,983,121
(3,489,555)
(5,164,754)
(3,489,555)
(5,164,754)
In order to maintain current rights of its geothermal tenements, ReNu Energy Limited is required to outlay
annual rentals and to meet certain expenditure requirements of the Department of State Development, South
Australia. These obligations are subject to renegotiation upon expiry of the tenements.
The obligations are not provided for in the financial report and are payable as follows:
Geothermal obligations: payable not later than one year
Property, plant and equipment: payable not later than one year
2020
$
17,200
-
2019
$
64,000
54,000
17,200
118,000
2020 Annual Report
Page 63
Directors' Declaration
In accordance with a resolution of the Directors of ReNu Energy Limited, I state that:
1.
In the opinion of the Directors:
The financial statements, notes and additional disclosures included in the Directors’ Report designated as
audited of the Company are in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Company’s financial position as at 30 June 2020 and of their
performance for the period ended on that date; and
(b) complying with Accounting Standards and Corporations Regulations 2001;
(c)
(d)
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in note 2; 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.
2. This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the financial period ended 30 June 2020.
On behalf of the Board.
Boyd White
Chairman
Brisbane
27 August 2020
2020 Annual Report
Page 64
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
w ww.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of ReNu Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of ReNu Energy Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2020, 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)
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
(ii)
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.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities w hich ar e all member s of B DO Austr alia
Ltd ABN 77 050 110 275, an Austr alian company limited by guar antee. BDO Audit Pty Ltd and BDO Austr alia Ltd ar e member s of BDO
Inter national Ltd, a UK company limited by guar antee, and for m par t of the inter national BDO netw or k of independent member fi rms.
Liability limited by a scheme appr oved under Pr ofessional Standar ds Legislation.
2020 Annual Report
Page 65
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. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Disposal of the Solar Business to CleanPeak Energy
Key audit matter
How the matter was addressed in our audit
Refer to note 17 to the financial
Our audit procedures included but were not limited to the
statements.
following:
During the year, the Group disposed of a
100% interest in the solar projects. This
was deemed to be a key audit matter
because the assets disposed were material
to the group.
Reviewing the sale and purchase agreement and other
documents related to the disposals to obtain an understanding
of the transaction and to confirm the consideration
Assessing the carrying amount of the disposed assets, debts
and liabilities at date of disposal and recalculated any gain or
loss is to be recognised from disposal
Checking that the adoption of AASB16 Leases has been properly
accounted up until date of disposal
Reviewing the adequacy of the Group’s disclosures around
disposal of assets within the financial statements
Rehabilitation Provision
Key audit matter
How the matter was addressed in our audit
Refer to note 11 to the financial
Our audit procedures included but were not limited to the
statements.
following:
The Group has rehabilitation provision
which relates to the Group’s share of the
expected cost to complete the remaining
Evaluating management's processes for estimating and
measuring the rehabilitation provision.
Holding discussions with management in relation to the status
rehabilitation of the Group’s legacy
of discussions with relevant government body in respect of the
geothermal sites.
outstanding rehabilitation work to assess the adequacy of the
provision
The measurement of the rehabilitation
Assessing the reasonableness of the estimated provision at
provision has been identified as a key
year-end and tested the processed used by management to
audit matter as it involves significant
calculate the estimate including checking key assumptions and
uncertainty and judgments, with
inputs used
rehabilitation costs estimates varying in
Reviewing the adequacy of the Group's disclosures around the
response to many factors. The provision is
rehabilitation provision within the financial statements
also material balance and important to
the users of the financial statements.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities w hich ar e all member s of B DO Austr alia
Ltd ABN 77 050 110 275, an Austr alian company limited by guar antee. BDO Audit Pty Ltd and BDO Austr alia Ltd ar e member s of BDO
Inter national Ltd, a UK company limited by guar antee, and for m par t of the inter national BDO netw or k of independent member fi rms.
Liability limited by a scheme appr oved under Pr ofessional Standar ds Legislation.
2020 Annual Report
Page 66
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 2020, 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.
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.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities w hich ar e all member s of B DO Austr alia
Ltd ABN 77 050 110 275, an Austr alian company limited by guar antee. BDO Audit Pty Ltd and BDO Austr alia Ltd ar e member s of BDO
Inter national Ltd, a UK company limited by guar antee, and for m par t of the inter national BDO netw or k of independent member fi rms.
Liability limited by a scheme appr oved under Pr ofessional Standar ds Legislation.
2020 Annual Report
Page 67
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 21 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of ReNu Energy Limited, for the year ended 30 June 2020,
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 Pty Ltd
R M Swaby
Director
Brisbane, 27 August 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities w hich ar e all member s of B DO Austr alia
Ltd ABN 77 050 110 275, an Austr alian company limited by guar antee. BDO Audit Pty Ltd and BDO Austr alia Ltd ar e member s of BDO
Inter national Ltd, a UK company limited by guar antee, and for m par t of the inter national BDO netw or k of independent member fi rms.
Liability limited by a scheme appr oved under Pr ofessional Standar ds Legislation.
2020 Annual Report
Page 68
Corporate Governance & Shareholder Information
The Board of Directors of ReNu Energy Limited
are responsible for the corporate governance of
the Company and are committed to achieving and
demonstrating the highest standards of corporate
governance.
ReNu Energy Limited’s corporate governance
practices were in place throughout the year ended
30 June 2020 and were fully compliant with the
Australian Securities Exchange Corporate
Governance Council’s Corporate Governance
Principles and Recommendations (4th Edition)
except for the following:
Recommendation 1.5(a) - Companies should
disclose in each annual report the measurable
objectives for achieving gender diversity set by the
Board in accordance with the diversity policy and
progress towards achieving them. The Company
has adopted a Diversity Policy that encourages the
participation and provision of opportunity to all
people interested in working at ReNu Energy. As
the Company has a relatively small workforce with
many roles requiring specific skills that may not be
widely available, the Company has not deemed it
appropriate to set specific numeric targets as
these could be inappropriately skewed by the
small sample size.
Recommendation 1.5(c)(1) - Companies should
disclose at the end of each reporting period the
proportion of women employees in the whole
organisation, women in senior executive positions
and women on the Board. The Company has
adopted a Diversity Policy that encourages the
participation and provision of opportunity to all
people interested in working at ReNu Energy. As
the Company has a relatively small workforce with
many roles requiring specific skills that may not be
widely available, the Company does not believe it
to publish specific employment
appropriate
numbers as Company does not believe this
information adds any meaningful value due to its
small workforce.
Recommendation 2.4 – A majority of the Board
should be independent. The Company did not
satisfy this condition for the financial year ended
30 June 2020, as 50% of its directors were not
independent at times during the year. The Board
believes that it is currently structured to act in the
best
its
the shareholders and
composition is appropriate at the current time.
interest of
Recommendations 4.1 and 7.1 – The Board of a
listed entity should have an audit committee and a
risk committee which has at least three members,
all of whom are Non-executive directors and a
majority of whom are independent directors. The
Company did not satisfy this recommendation for
the financial year ended 30 June 2020 as its Audit
and Risk Management Committee (Committee)
had two members at times during the year, both of
whom were Non-executive Directors. The
Committee, at that date of this report, comprises
three members, two of whom are Non-executive
and
independent Directors. The Company
considers that given the size and composition of
the Board,
the
committee is sufficient to ensure independent
the
judgement
Company's corporate reporting processes
to
satisfy its responsibilities.
the current composition of
is exercised
relation
to
in
Recommendation 8.1 - The Board of a listed
entity should have a remuneration committee
which has at least three members, all of whom are
non-executive directors and a majority of whom
are independent directors. The Company does not
satisfy this recommendation as its Remuneration
and Nomination Committee has two members,
both of whom are Non-executive Directors. The
Company considers that given the size and
composition of the Board, the current members of
the committee are sufficient
to exercise
independent judgement in order to satisfy its
responsibilities.
ReNu Energy’s Corporate Governance Statement
can be downloaded in the Governance section of
our website
http://renuenergy.com.au/about-
us/governance/.
2020 Annual Report
Page 69
Distribution of Fully Paid Ordinary Shares
Analysis of number of equity holders by size and holding as at 13 October 2020.
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable Parcels
No. of
holders
176
983
608
2,165
6,844
10,775
9,950
Securities
79,172,595
29,759,850
4,403,430
5,158,770
2,139,969
120,634,341
15,940,105
% of issued
capital
65.63
24.67
3.65
4.28
1.77
100.00
13.21
Twenty Largest Holders
Rank
Name
Shares Held
% of issued capital
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
CWSC Pty Ltd
Warren Leitao
North Western Surveys Pty Ltd
Borneo Capital Pty Ltd
Stockton Capital Management Pty Ltd
Tata Power International Pte Limited
Indevco Group Holdings Pty Limited
Jetosea Pty Ltd
Mr Ian Graham Douglas & Mr Basil James Cook
Mr Benjamin Douglas Kmita
Hirlgrove Pty Ltd
Mrs Daijun Lin
Johan A Le Roux
Mr Anthony James Cotter &
Mrs Deborah Joanne Cotter
Mr Anthony James Cotter &
Mrs Deborah Joanne Cotter
Woodistan Pty Ltd
Mr Mark Tindale & Mrs Barbara Tindale
J P Morgan Nominees Australia Pty Limited
Ry-Kin Constructions No2 Pty Ltd
Ms Sallee Anne Lorenz
Substantial Shareholders
8,655,000
5,769,000
3,954,571
3,294,495
3,281,420
2,940,000
1,649,334
1,418,636
1,317,754
1,210,709
1,161,547
1,091,000
1,037,632
949,239
900,040
869,683
850,001
808,711
800,000
Total
779,635
42,738,407
7.17
4.78
3.28
2.73
2.72
2.44
1.37
1.18
1.09
1.00
0.96
0.90
0.86
0.79
0.75
0.72
0.70
0.67
0.66
0.65
35.42
The names of substantial shareholders who have notified the Company in accordance with section 671B of
the Corporations Act 2011 are:
1
CWSC Pty Ltd
Shares Held % of issued capital
8,655,000
7.17%
2020 Annual Report
Page 70
Voting Rights
Annual Report
The voting rights attaching to each class of equity
securities are set out below:
(a) 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.
(b) Options:
No voting rights.
Securities Exchange Listing
The shares of the Company are listed under the
symbol RNE on
the Australian Securities
Exchange Limited. The Company’s home branch
is Sydney.
Shareholder Enquiries
Shareholders with
their
shareholdings should contact the Company’s
Share Registry as follows:
queries
about
Link Market Services
Locked Bag A14
Sydney South NSW 1235
Telephone Australia: 1300 554 474
The Company’s Annual Report is posted on its
web site immediately upon release to ASX.
Shareholders will not be mailed a copy of the
Annual Report unless they have specifically opted
in to request one.
Notice of Meeting and Proxy Voting
The Company offers online
voting and
shareholders may elect to receive the Company’s
notice of meeting and proxy form via email. The
Company encourages this form of electronic
communication. Voting can be undertaken online,
by logging in to the Link website using the holding
details as shown on the proxy form. Shareholders
who do not register for online access will continue
to receive these documents by post. Shareholder
who would like to opt in to receive these
documents by email should
their
communication preferences at the share registry’s
web portal at www.linkmarketservices.com.au
register
Consolidation of Multiple Shareholdings
If you have multiple shareholding accounts that
you wish to consolidate into a single account,
please advise the Share Registry in writing. If your
holdings are broker sponsored, please contact the
sponsoring broker directly.
Telephone International: +61 1300 554 474
Register for Email Alerts
Fax +61 2 9287 0303
Email: registrars@linkmarketservices.com.au
Change of Address
Issuer sponsored shareholders should notify the
share registry immediately upon any change in
their Securityholder
their address quoting
Reference Number (SRN). This can be done by
phoning the share registry, by writing to them, or
at
through
in
www.linkmarketservices.com.au. Changes
addresses for broker sponsored holders should be
directed to the sponsoring brokers with the
appropriate Holder Identification Number (HIN).
portal
their
web
Please note, that as a shareholder you can
register through the ‘Email Alerts’ section of our
web site to receive electronic communications
from the Company. To do so, you should select the
‘Investor Centre’
tab on our web site at
www.renuenergy.com.au. Registration will provide
you with an email advice with a
to
www.renuenergy.com.au each time a relevant
announcement is made by the company and
posted on this site. At www.renuenergy.com.au
shareholders can view:
link
Annual and half-year Reports
Securities Exchange Announcements
ReNu Energy Share Price Information
General Shareholder Information
2020 Annual Report
Page 71
Corporate Directory
BOARD OF DIRECTORS
Mr Steve McLean (to 30 June 2020)
(Non-executive Director. Non-executive
Chairman to 28 February 2020)
Mr Richard Brimblecombe
(to 31 December 2019)
(Non-executive Director)
Mr Anton Rohner (to 2 August 2019)
(Non-executive Director)
Mr Craig Ricato (to 30 September 2019)
(Managing Director and CEO)
Mr Tony Louka
(Non-executive Director. Interim Managing
Director 20 September 2019 to 28 February
2020)
Tim Scholefield (from 6 December 2019)
(Executive Director)
Boyd White (from 28 February 2020)
(Non-executive Chairman)
POSTAL ADDRESS
PO Box 2046, MILTON QLD 4064
INTERNET
www.renuenergy.com.au
EMAIL
info@renuenergy.com.au
ABN
55 095 006 090
BANKER
Westpac Banking Corporation
AUDITOR
BDO
CEO
Mr Greg Watson (from 28 February 2020)
SOLICITOR
Thomson Geer Lawyers
COMPANY SECRETARY
Mr Damian Galvin (to 5 July 2019)
Mr Matthew Scott (from 1 July 2019 to 10
September 2019)
Mr Greg Watson (from 10 September 2019)
PRINCIPAL AND REGISTERED OFFICE
Corporate House, Kings Row 1
Level 2, 52 McDougall Street, Milton, QLD 4064
Telephone: +61 1300 038 069
Facsimile: +61 7 3721 7599
SHARE REGISTRY
Link Market Services Limited
Phone: +61 1300 554 474
Fax: +61 2 9287 0303
Postal address: Locked Bag A14, Sydney South
NSW 1235
Website: www.linkmarketservices.com.au
Email: registrars@linkmarketservices.com.au
SECURITIES EXCHANGE LISTING
ReNu Energy Limited shares are listed on the
Australian Securities Exchange. Ticker: RNE
2020 Annual Report
Page 72
2020 Annual Report
PRINCIPAL AND REGISTERED OFFICE
Corporate House, Kings Row 1
Level 2, 52 McDougall Street, Milton, QLD 4064
Telephone: +61 1300 038 069
Facsimile: +61 7 3721 7599
POSTAL ADDRESS
PO Box 2046, MILTON QLD 4064
EMAIL
info@renuenergy.com.au
2020 Annual Report
Page 73