Wrap Text
Audited summary consolidated financial results for the year ended 31 March 2013
SENTULA MINING
Incorporated in the Republic of South Africa
(Registration number 1992/001973/06)
Share code: SNU
ISIN: ZAE000107223
(Sentula or the Company or the Group)
AUDITED SUMMARY CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2013
Summary consolidated statement of financial position
Audited Audited
as at as at
31 March 31 March
R000 2013 2012
Assets
Property, plant and equipment 1 381 394 1 545 934
Mineral rights 410 761 410 761
Intangible assets 25 016 27 220
Goodwill 120 648 412 709
Restricted investment 8 693 8 693
Deferred tax assets 50 525 34 869
Total non-current assets 1 997 037 2 440 186
Inventories 189 792 364 521
Trade and other receivables 535 192 468 870
Current tax receivable 18 127 12 507
Cash and cash equivalents 110 709 180 236
Total current assets 853 820 1 026 134
Assets classified as held-for-sale 1 807 389 315
Total assets 2 852 664 3 855 635
Equity and liabilities
Equity
Share capital and premium 1 994 406 1 994 406
Reserves (396 735) 376 554
Total equity attributable to equity holders of the Company 1 597 671 2 370 960
Non-controlling interest 32 644 59 815
Total equity 1 630 315 2 430 775
Liabilities
Loans and borrowings - 488 695
Finance lease obligations 3 371 -
Rehabilitation provision 66 899 66 899
Deferred tax liabilities 221 375 297 852
Total non-current liabilities 291 645 853 446
Trade and other payables 286 205 344 138
Loans and borrowings** 543 744 220 316
Finance lease obligations 2 129 -
Bank overdraft 58 062 -
Current tax payable 40 564 6 960
Total current liabilities 930 704 571 414
Total liabilities 1 222 349 1 424 860
Total equity and liabilities 2 852 664 3 855 635
Net asset value per share - excluding treasury shares (cents) 275 408
Tangible net asset value per share - excluding treasury shares (cents) 250 332
Net asset value per share - excluding treasury shares (cents)* 418
Tangible net asset value per share - excluding treasury shares (cents)* 343
* Previously calculated on total equity
** Classified as short term debt - refer to Going Concern narrative in commentary
Summary consolidated income statement
Audited Audited
year ended year ended
31 March 31 March
R000 2013 2012
Revenue 2 085 026 2 512 415
Results from operating activities pre-impairments and inventory
write-off (226 099) 201 578
Inventory write-off (133 783) (30 478)
Impairment of goodwill (300 127) -
Impairment of plant and equipment (186 903) (591 171)
Impairment of assets held-for-sale (15 149) -
Impairment of intangible assets (9 162) -
Results from operating activities (871 223) (420 071)
Net finance charges (57 471) (63 821)
Fair value adjustment on interest rate cap (2 486) (6 677)
Loss before taxation (931 180) (490 569)
Taxation 31 213 (41 625)
Loss for the year (899 967) (532 194)
Attributable to:
- Equity holders of the company (875 017) (516 703)
- Non-controlling interest (24 950) (15 491)
Basic and diluted loss per share (cents) (150,6) (88,9)
Headline and diluted (loss)/earnings per share (cents) (27,0) 21,7
Shares in issue at the end of the period excluding treasury shares (000) 581 005 581 005
Summary consolidated statement of comprehensive loss
Audited Audited
year ended year ended
31 March 31 March
R000 2013 2012
Loss for the year (899 967) (532 194)
Other comprehensive income
Foreign currency translation differences for foreign operations 67 190 28 000
Other comprehensive income for the year, net of income tax 67 190 28 000
Total comprehensive loss for the year (832 777) (504 194)
Attributable to:
- Equity holders of the company (807 827) (488 703)
- Non-controlling interest (24 950) (15 491)
Summary consolidated statement of cash flows
Audited Audited
year ended year ended
31 March 31 March
R000 2013 2012
Cash flows from operating activities 94 127 229 485
Cash generated from operations 194 234 319 156
Income taxes paid (41 968) (27 294)
Interest paid (58 139) (62 377)
Cash flows from investing activities (90 103) (140 905)
Purchase of property, plant and equipment (214 716) (291 600)
Proceeds from disposal of property, plant and equipment 18 374 156 708
Capitalised exploration expenditure (309) (2 212)
Additions to assets held-for-sale (57 165) (6 833)
Proceeds from disposal of assets held-for-sale 160 464 -
Interest received 3 249 3 032
Cash flows from financing activities (145 750) 4 596
Loans raised 74 213 147 335
Loans repaid (234 242) (142 739)
Option premium on empowerment transaction received 16 500 -
Dividends paid to non-controlling interest (2 221) -
Net (decrease)/increase in cash and cash equivalents (141 726) 93 176
Exchange gain/(loss) on cash and cash equivalents 14 137 (1 172)
Cash and cash equivalents at the beginning of the year 180 236 88 232
Cash and cash equivalents at the end of the year 52 647 180 236
Summary consolidated reconciliation of headline (loss)/earnings
Audited Audited
year ended year ended
31 March 31 March
R000 2013 2012
Net loss for the year attributable to equity holders of the Company (875 017) (516 703)
Adjust for:
Profit on disposal of plant and equipment (2 230) (2 464)
Loss on disposal of plant and equipment 1 392 54 621
Loss on disposal of assets held-for-sale 221 028 -
Impairment of plant and equipment 186 902 591 171
Impairment of assets held-for-sale 15 149 -
Impairment of goodwill 300 127 -
Impairment of intangible asset 9 162 -
Tax effect of above adjustment (13 265) (508)
Headline (loss)/earnings attributable to ordinary shareholders (156 752) 126 117
Operational segment reporting
The Group is organised into four major operating segments, namely opencast mining services, exploration drilling, crane hire, and coal mining.
Megacube is disclosed under the Opencast mining services as a discontinuing business operation as it is in the process of being wound down.
Benicon Opencast, CCT and JEF are included in the continuing operations. Equipment trading, spares and engineering is included in Other.
Segment performance is measured based on the segment profit before interest and income tax. Inter-segment revenue is priced on an arms length
basis.
Business segments
Continuing Discontinuing Total
opencast opencast opencast Exploration Crane
2013 (R000) mining services mining services mining services drilling hire
Total segment revenue 1 332 619 66 303 1 398 922 749 854 65 258
Inter-segment revenue 143 241 1 862 145 103 - 931
External revenues 1 189 378 64 441 1 253 819 749 854 64 327
Total segment results pre impairment 95 510 (51 316) 44 194 (257) 32 663
Impairment of plant and equipment (137 551) - (137 551) (49 352) -
Impairment of goodwill - - - (203 959) -
Impairment of assets held-for-sale - (15 149) (15 149) - -
Impairment of intangible assets - - - - -
Inventory write down to net - - - (114 443) -
realisable value
Loss on disposal of assets held-for-sale - (221 028) (221 028) - -
Segment results (42 041) (287 493) (329 534) (368 011) 32 663
Segment assets 999 129 135 529 1 134 658 391 207 111 301
Unallocated assets
Total assets
2012 (R000)
Total segment revenue 1 191 289 602 678 1 793 967 861 311 57 418
Inter-segment revenue 213 266 10 925 224 191 - 1 267
External revenues 978 023 591 753 1 569 776 861 311 56 151
Segment results pre impairment 171 381 (80 204) 91 177 102 805 30 335
Impairment (3 095) (588 077) (591 172) - -
Segment results 168 286 (668 281) (499 995) 102 805 30 335
Segment assets 936 955 539 302 1 476 257 911 925 102 215
Unallocated assets
Total assets
Business segments Continued
Coal
2013 (R000) mining Other Consolidated
Total segment revenue 908 57 613 2 272 555
Inter-segment revenue - 41 495 187 529
External revenues 908 16 118 2 085 026
Total segment results pre impairment (16 879) (64 792) (5 071)
Impairment of plant and equipment - - (186 903)
Impairment of goodwill - (96 168) (300 127)
Impairment of assets held-for-sale - - (15 149)
Impairment of intangible assets (9 162) - (9 162)
Inventory write down to net - (19 340) (133 783)
realisable value
Loss on disposal of assets held-for-sale - - (221 028)
Segment results (26 041) (180 300) (871 223)
Segment assets 632 464 514 382 2 784 012
Unallocated assets 68 652
Total assets 2 852 664
2012 (R000)
Total segment revenue 13 383 63 288 2 789 367
Inter-segment revenue 499 50 995 276 952
External revenues 12 884 12 293 2 512 415
Segment results pre impairment (15 498) (37 718) 171 101
Impairment - - (591 172)
Segment results (15 498) (37 718) (420 071)
Segment assets 634 164 683 698 3 808 259
Unallocated assets 47 376
Total assets 3 855 635
Summary consolidated statement of changes in equity
Employee Foreign
share currency
Share Share incentive Treasury translation
R000 capital premium reserve shares reserve
Balance at 31 March 2011 5 866 2 014 438 42 426 (25 898) (53 403)
Loss for the year - - - - -
Other comprehensive income for the period - - - - 27 995
Transactions with owners, recorded directly in equity
Share-based payments - - 2 134 - -
Share options forfeited - - (7 986) - -
Balance as at 31 March 2012 5 866 2 014 438 36 574 (25 898) (25 408)
Loss for the year - - - - -
Other comprehensive income for the period - - - - 67 190
Transactions with owners, recorded directly in equity
Share-based payments - - 406 - -
Share options forfeited - - (4 767) - -
Share-based payment empowerment transaction - - 17 632 - -
Option premium on empowerment transaction - - 16 500 - -
Dividend paid to non-controlling interest - - - - -
Balance as at 31 March 2013 5 866 2 014 438 66 345 (25 898) 41 782
Statement of changes in equity continued
Retained Non-
earnings/ controlling Total
R000 (loss) Total interest equity
Balance at 31 March 2011 874 105 2 857 534 75 301 2 932 835
Loss for the year (516 703) (516 703) (15 491) (532 194)
Other comprehensive income for the period - 27 995 5 28 000
Transactions with owners, recorded directly in equity -
Share-based payments - 2 134 - 2 134
Share options forfeited 7 986 - - -
Balance as at 31 March 2012 365 388 2 370 960 59 815 2 430 775
Loss for the year (875 017) (875 017) (24 950) (899 967)
Other comprehensive income for the period - 67 190 - 67 190
Transactions with owners, recorded directly in equity -
Share-based payments - 406 - 406
Share options forfeited 4 767 - - -
Share-based payment empowerment transaction - 17 632 - 17 632
Option premium on empowerment transaction - 16 500 - 16 500
Dividend paid to non-controlling interest - - (2 221) (2 221)
Balance as at 31 March 2013 (504 862) 1 597 671 32 644 1 630 315
COMMENTARY
Subdued global economic activity continues to weigh heavily on commodity prices in the PGM, gold and seaborne traded
metallurgical coal sectors, significantly reducing the visibility of exploration spend in these areas, across the
continent. Sentulas bulk earth moving businesses however, through their exposure to the local coal sector, have experienced
a far more predictable demand profile. Having disposed of the remaining assets in Megacube and initiated a process to
monetise the stakes in its various coal investments, Sentula is now well positioned to focus on its core remaining mining
services entities. - Robin Berry, CEO - Sentula Mining Limited
KEY EVENTS
Stable demand in the contract mining sector although some margin pressure is being experienced.
Substantial progress being made in the disposal of the Groups coal assets.
The conclusion of the introduction of Thebe Mining Resources Proprietary Limited (Thebe Mining) as a strategic
empowerment partner.
The initiation of processes for the disposal of the coal assets, the proceeds of which will be applied to a
reduction of debt.
The disposal of the remaining Megacube equipment which, while resulting in a book loss, realised net proceeds of
R103 million.
A substantial decline in gold and platinum prices along with disruptions in the South African mining industry have
resulted in a significant reduction in exploration expenditure and a consequent downscaling of Geosearchs operations.
FINANCIAL OVERVIEW
Revenue decreased by 17% to R2,085 million (2012: R2,512 million)
Headline (loss) / earnings per share decreased to (27.0) cents (2012: 21.7 cents)
Net asset value per share :275 cents (2012: 408* cents)
Tangible net asset value per share: 250 cents (2012: 332* cents)
Debt to equity gearing ratio deteriorated to 29% (2012: 22%)
*previously calculated on total equity
The Groups results for the financial year were impacted by the following:
Geosearchs results were negatively affected by:
o An impairment of R49.4 million relating to drill rigs that are now operationally and technologically uneconomical,
o A write down of inventory to net realisable value of R 114.4 million associated with the impaired rigs.
An impairment of the Geosearch goodwill of R 300.1 million;
An impairment charge of R 137.6 million, following an impairment assessment of Benicons equipment in terms of IAS 36;
A write down of inventory to net realisable value in Benicon Sales amounting to R 19.3 million;
The following pre-tax expenses associated with Megacubes closure and the disposal of its plant and equipment fleet:
o Related auction costs amounted to R16.7 million;
o An impairment charge of R15.1 million on assets held-for-sale;
o A loss on the disposal of assets held-for-sale of R221 million;
The carry cost of R7.9 million (pre-tax) incurred as a result of maintaining Nkomati Anthracite Mine on care and
maintenance during the past financial year;
OPERATIONAL REVIEW
Sustainability
Safety track record:
The Groups Classified Injury Frequency Rate of 0.28 per million man hours worked is an 83% improvement on the prior
year, with only three lost time injuries being recorded for the year. Sentula continues to work closely with its clients
to ensure that investments in systems and structures, to support its efforts in the safety arena, results in the
reduction of risk. Sentula acknowledges the right of its employees to return home without harm and that safety performance
must be regarded as a prerequisite and not a competitive edge.
Transformation:
During the year under review, Sentula was independently re-verified as a level 5 contributor, in terms of the DTI
codes, measuring broad based black economic empowerment (BBBEE). The finalised BBBEE transaction elevated the status of
its underlying South African mining services businesses to that of level 4 contributors, with an effective 25.04%
broad based empowered ownership.
Subsequent phases of this BBBEE transaction, concluded during the last quarter of 2012, included the empowerment of
the Groups coal assets and the introduction of Thebe Mining as a strategic empowerment partner.
Environment:
During the year under review, the Group continued to verify its baseline carbon footprint for several of its
activities. Targets and initiatives to reduce the quantum and impact of emissions have been introduced across the Group.
In the current financial year, Sentula Group companies continued to meet their objectives, with respect to the
maintenance and attainment of international certification of their safety, environmental and training systems.
Mining services
The provision of mining services remains the core of Sentulas business, with the four operating divisions and the
five underlying continuing businesses. Volatility in the sector continues to reduce the visibility of earnings,
specifically in the area of exploration.
Continuing opencast mining services:
The year under review has been characterised by stable demand, but exacting trading conditions, as margins remained
under pressure across the opencast contracting sector and operating conditions have deteriorated.
Having taken the operational management and equipment associated with the Keaton Energy Vanggatfontein contract over
from Megacube during the first quarter of the financial year, Benicon managed to replace the contract, following its
termination in July 2012, with the Anglo Platinum Mogalakwena Slangsloot project. Margins have continued to remain under
pressure, in this business, as a result of contract pricing responsiveness, cost increases and deteriorating trends in
effective production time. Initiatives to address these issues have been implemented. Benicons capacity remains fully
contracted at the current time, with its exposure to the coal sector, a natural hedge in the prevailing volatile
economic environment.
With the award of the Samancor Spitskop contract to CCT in July 2012, following protracted regulatory delays, work on
the site commenced in February 2013. Production from this site is in the process of being ramped up, with full
production being anticipated, during August 2013. Demand for chrome ore, for the production of ferro-chrome, remains
solid at the current time.
Management is in the process of consolidating the operations of CCT into Benicon in order to leverage off the
synergies that are expected to flow therefrom. It is envisaged that this consolidation will be completed during the first
half of the current financial year.
JEF Drill and Blast experienced a drop in its revenue during the second half of the financial year as a consequence of
the delay in the start-up of replacement work following the completion of a number of contracts. From March 2013, this
entitys capacity is materially contracted and the business remains competitively positioned to deliver sustainable real
growth, at current margins, for the foreseeable future.
Discontinuing opencast mining services:
Megacubes business ceased operating at the beginning of the financial year and the managements focus turned to the
monetisation of the remaining assets. This culminated, following the redeployment of suitable assets across the broader
group and the utilisation of certain items of equipment as trade-in proceeds on new and replacement group equipment, in
an outright disposal of the remaining equipment at an unreserved auction on 27 March 2013.
Exploration drilling:
The downturn in the platinum group metals sector had a significantly negative impact on Geosearchs South African
operations and necessitated the downscaling and restructuring of these operations during the year. Negative sentiment
and project delays, with respect to coal investments in Mozambique also resulted in a further reduction in earnings and
a scaling back of the Aguaterra operations, during the latter part of the period under review. More recently, Geosearch
has seen a reduction in the visibility of gold exploration activity across its East, Central and West African operations.
This has necessitated a further restructuring of its international operations, which currently contributes approximately
90% of Geosearchs earnings.
Crane hire:
Ritchie continues to perform well, supported by a balanced mix of contracted work and ad hoc opportunities to render
craneage services. The Company continues to maintain a healthy level of profitability, supported by its mix of cranes,
strong competitive regional presence in the Witbank/Middelburg area, and diversity of clientele in coal mining, steel
and power generation sectors.
Coal mining investments
In line with the strategy to extract the value inherent in its portfolio of diversified coal assets, the Group has
continued to actively assess opportunities to divest of its stakes in these assets. Sentula is currently invested in five
projects (three in South Africa, and one in each of Botswana and Zambia). The projects can be broadly described as mining
operations, comprising of an operating mine, near development properties (projects which could be operational within 18
to 24 months) and exploration areas.
Mining operations:
Operations at Nkomati Anthracite were placed on care and maintenance, by management, at the end of May 2011, pending
the resolution of regulatory and environmental issues. Following the approval by the Department of Mineral Resources of
the amended environmental management programme, for the Madadeni open pit operation, application to the Department of
Environmental Affairs, the seeking of condonation for certain permitted activities and the issuing of the mines Integrated
Water Use License, the dewatering of the opencast operation began in November 2012. In preparation for the resumption of
mining operations, the open pit has been dewatered and the infrastructure refurbished.
Management continues to actively pursue tangible opportunities to monetise the asset, through an outright disposal of
Sentulas interest in the mine.
Near development properties:
Sentula has been granted new order prospecting rights over portions of the farms Bankfontein and Schoongezicht,
located in Mpumalanga. Exploration has been completed and mining right applications have been submitted for both of the
aforementioned properties, with the Bankfontein mining right having been awarded in May 2013. The disposal of the
Schoongezicht prospect has been concluded and will become effective on Ministerial approval being granted for its transfer.
Potential acquirors have been identified for the Bankfontein project and management will work towards finalizing this
transaction during August 2013.
The small scale mining license awarded to the Mulungwa project in Southern Zambia, continues to be maintained, while
potential opportunities to extract value from the asset, are being assessed.
Exploration areas:
The Asenjo joint venture with Jonah Capital and Aquilla Resources, situated in Botswana, has continued exploration
activities on its tenements. The value of the large resource base is expected to be unlocked through the construction of
rail infrastructure to port facilities in Namibia or Mozambique, the provision of which is enjoying renewed interest in
the region. The joint venture partners agreed to dispose of the Lechana prospect for the sum of USD1.0 million during the
2013 financial year.
With its partners, Sentula has engaged the services of an independent advisor to pursue a process to dispose of the
remaining assets in Asenjo. A recently received expression of interest underpins the value attached to these assets..
STRATEGIC REVIEW
The Groups strategic vision remains one of sustainable growth by being a recognised and focused mining services
provider across the African continent. Despite unprecedented volatility in the sector and the limited visibility of
exploration work, in the short term, the Groups firm intention remains to focus on the value drivers in its diversified
service businesses. This will be achieved through the three pronged approach of consolidating the operations of the bulk
earth moving businesses and driving operational efficiencies, investing in growth opportunities in the solid drilling and
blasting and mobile crane hire businesses and maintaining, through prudent restructuring, the exploration business, in order
to take advantage of potential growth on the back of a recovery in the mineral exploration sector. The strategy will be further
enhanced through the finalisation of the disposal of the Groups stakes in various coal assets, for which plans have been
implemented.
Sentulas exposure to the coal and energy sector, coupled with its diversified service offering, client base, mineral
exposure and geographical spread will continue to provide a solid platform for developing the business into the future.
The auditors report does not cover the information contained in the operational and strategic review as disclosed in
this announcement.
NET DEBT POSITION
Given the current economic conditions in the mining industry and the position in which the Group finds itself, the
board of directors (the Board) are of the opinion that the existing net debt needs to be reduced by approximately
R150 million. This will be done in the first instance by the sale of the coal assets and surplus plant and equipment
and thereafter the intention is to restructure the remaining debt on more accommodating terms and conditions.
GOING CONCERN
The Group has met all its debt obligations during the past financial year and, based on the Groups cash flow
forecasts for the 2014 financial year is expected meet all its obligations in the ordinary course of business during
this period.
The Group funds its operations by means of a Standard Bank led consortium facility and a Wesbank vehicle asset finance
facility. The availability of these facilities is subject to on-going compliance with a number of financial covenants,
including, inter-alia, a debt service cover ratio (DSCR) and a total debt to EBITDA ratio (TDR). The Groups future
prospects and financial stability is dependent on the on-going condonation of these covenant breaches, to the extent
required during the course of the 2014 financial year.
At 31 March 2013, the Group breached the DSCR and TDR covenants and condonation was not timeously granted by the
Standard Bank Consortium (SBC) resulting in the SBC and Wesbank debt being classified as a short term liability at
year-end. Subsequent to year-end, condonation was received for these breaches from the SBC. The Board acknowledges that,
in the context of prevailing economic environment, the Groups debt levels are excessive, in relation to the Groups
forecast cash generation and the Board has embarked on a number of initiatives to reduce the senior debt by R150 million.
The initiatives include the following:
The disposal of certain of the Groups coal assets;
The continued disposal of surplus plant and equipment within the Group;
The refinancing of the SBC debt by means of a debt capital market instrument;
A refinancing of the SBC debt;
Other appropriate means of reducing the debt; or
A combination of the above.
As a consequence of the impairments of R512 million (2012: R616 million), an inventory write off of R134 million
(2012: R Nil) and a loss on sale of assets of R220 million (2012: R52 million), the Group incurred a net loss of R900
million for the financial year ended 31 March 2013 and at that date, the Groups Statement of Financial Position disclosed
an accumulated loss of R505 million. At 31 March 2012, the Group incurred a net loss of R532 million and had retained
earnings of R365 million.
The impairments, losses on sale of assets and inventory write off do not impact on the Groups cash generation and its
operational capacity remains intact. If the non-operational items are excluded from the 2014 results, the Group
continues to be operationally profitable and cash flow positive in all its major subsidiaries.
The aforementioned conditions, along with other matters, indicate the existence of a material uncertainty that may
cast significant doubt on the ability of the Group and the Company to continue as going concerns and, therefore, the
Group and Company may be unable to realise their assets and discharge their liabilities in the normal course of business.
PROGRESS ON LEGAL MATTERS
As announced on SENS on 5 April 2013, a settlement agreement was concluded, with Casper Scharrighuisens, spouse, Clasina
Scharrighuisen, the Marinvia Trust and the CIMS Trust, following which an amount of R40 million was received in April 2013
by the liquidators of Scharrighuisen estate, in full and final settlement of all claims against these entities. Of the
R40 million, R24.4 million was paid to Megacube and a further R10 million is expected to be received in due course.
The settlement agreement does not affect the civil judgments of R383 million against Casper Scharrighuisen which
judgments remain unsatisfied. With the granting of the final sequestration order against Scharrighuisen, and the
conclusion of the settlement agreement, the Companys legal and forensic fees should reduce materially in the future.
The criminal actions against Scharrighuisen and Jason Holland as a consequence of the misappropriation of funds from
Megacube during the 2008 financial year are in the hands of the National Prosecuting Authority and the Company will
assist in these matters, to the extent required.
SUBSEQUENT EVENTS
While the Group continues to meet its debt repayment obligations it breached certain loan covenants at 31 March 2013.
Subsequent to year-end, the SBC condoned these covenant breaches, subject to the payment of a waiver and consent fee
of R750 000 and an increase in the SBC facility margin by 2%.
As set out in the SENS announcement date 24 June 2013, Sentula entered into an agreement with Miniandante Proprietary
Limited (the Purchaser) to dispose of the Schoongezicht prospecting right to the Purchaser for a total consideration
of R22 million which is to be settled in cash by the Purchaser, subject to the fulfilment or waiver, as the case may be,
of certain conditions precedent (Disposal of the Schoongezicht Prospecting Right), typical for a transaction of this
nature.
The effective date of the Disposal of the Schoongezicht Prospecting Right is the fifth business day after the date on
which the last of the conditions precedent is fulfilled or waived, as the case may be.
The conditions precedent, include the granting by the Minister of Mineral Resources of:
the application for the renewal of the Schoongezicht Prospecting Right, for a minimum of two years from the date of
expiry of the initial term of the Schoongezicht Prospecting Right; and
the transfer of the Schoongezicht Prospecting Right to the Purchaser.
The disclosure of the Schoongezicht Prospecting Right does not require any formal disclosure in terms of the Listings
Requirements of the JSE Limited (JSE).
CONTINGENT LIABILITY
During the 2013 financial year, Megacube instituted legal proceedings against Keaton Mining Proprietary Limited for
the recovery of R41.5 million and interest thereon owing for work performed on their Vangatfontein operation.
Subsequent to the aforementioned claim, a demand payment of R119.9 million was brought against Megacube in respect of
alleged breaches of contract and sub-standard mining practices adopted by Megacube, which allegedly resulted in coal
losses. In accordance with the contract, the matter will be independently arbitrated upon. A date for the arbitration
has yet to be finalised, but is expected to be set down for the second half of the 2014 financial year. Sentula and
its attorneys believe that there is a strong case in support of the initial claim and that there is a good defence
against the alleged counter claim but are not able to estimate the probable or possible loss.
BASIS OF PREPARATION
The summary consolidated financial statements are prepared in accordance with the requirements of the JSE Listings
Requirements for provisional reports and the requirements of the Companies Act applicable to summary financial
statements. The JSE Listings Requirements require provisional reports to be prepared in accordance with the framework
concepts, the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee and must also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting.
The consolidated financial statements have been prepared on the historical cost basis, excluding financial instruments
which are fair valued, and conform to IFRS. The accounting policies adopted are in terms of IFRS and are consistent
with those applied in the consolidated financial statements for the year ended 31 March 2012.
The accounting standards, amendments to issued accounting standards and interpretations, which are relevant to the
group, but not yet effective at 31 March 2013, have not been adopted. It is expected that, where applicable, these
standards and amendments will be adopted on each respective effective date, except where specifically identified. The
Group continuously evaluates the impact of these pronouncements.
The audited provisional summary consolidated results for the year ended 31 March 2013 have been prepared under the
supervision of the financial director, GP Louw (CA) S.A.
AUDIT OPINIONS
These summary consolidated financial statements for the year ended 31 March 2013 have been audited by the Companys
auditor, PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon.
A copy of their audit report on the summary consolidated financial statements and of the audit report on the
consolidated financial statements from which the summary financial statements were derived, are available for
inspection at the Companys registered office, together with the financial statements identified in the auditors
reports.
The audit report on the consolidated financial statements contains the following emphasis of matter paragraph:
Without qualifying our opinions, we draw attention to note 34 to the consolidated financial statements and note 19 to
the separate financial statements which indicate that the Group and the Company incurred net losses for the year ended
31 March 2013 of R899,9 million and R46,5 million, respectively. The notes indicate that the Group breached its debt
covenants and received condonation of these subsequent to year end. It also indicates that the Groups future prospects
and financial stability is dependent on the on-going condonation of these covenant breaches, to the extent required during
the course of the 2014 financial year. The notes further indicate that these conditions, along with other matters, indicate
the existence of a material uncertainty which may cast significant doubt about the ability of the Group and Company to
continue as going concerns.
A similar matter is included in the auditors report on the summary consolidated financial statements.
DIVIDENDS
No dividend has been declared or paid during the year under review.
DIRECTORATE
During the year under review, EHJ Stoyell resigned as an independent non-executive director on 17 September 2012. There
were no further resignations or appointments to the Board during the 2013 financial year.
On behalf of the Board
Jonathan Best
Independent Non-executive Chairman
Robin Berry
Chief Executive Officer
Woodmead
26 June 2013
Directors:
JG Best*(Chairman), RC Berry (Chief Executive Officer), GP Louw (Financial Director), PP Modisane, CJPG van
Zyl*, D Zihlangu*, KW Mzondeki*, RB Patmore*
* Independent non-executive
Company secretary: GM Chemaly
Transfer Secretaries: Computershare Investor Services Proprietary Limited, Ground floor, 70 Marshall Street,
Johannesburg, 2001. PO Box 61051 Marshalltown. Tel (011) 370-5000
Investor Relations Advisers: College Hill
Sponsor: Merchantec Capital
Auditor: PricewaterhouseCoopers Inc.
Registered Address
Block 14 - Ground floor, Woodlands Office Park, Woodmead, 2080
PO Box 76, Woodmead, 2080 Tel (011) 656-1303
WEBSITE:
www.sentula.co.za
Date: 27/06/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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