Wrap Text
Reviewed Condensed Consolidated Interim Results for the six months period ended 30 September 2013
SENTULA MINING LIMITED
Incorporated in the Republic of South Africa
(Registration number 1992/001973/06)
Share code: SNU
ISIN: ZAE000107223
(Sentula or the Company or the Group)
REVIEWED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS PERIOD ENDED 30 SEPTEMBER 2013
+35%
Headline EPS
increased to 11.5 cents
(2012: 8,5 cents)
-19%
Revenue decreased
to R951 million
(2012: R1 175 million)
COMMENTARY
The stabilisation of the earnings from Sentulas earthmoving entities has remained an area of key focus during the
period under review. The initiatives embarked upon in these entities, along with the rightsizing of its exploration
business, will position the Company to benefit from the next commodity cycle upswing. The restructuring of the Group debt and
the progress made towards the disposal of the Groups coal assets has improved Sentulas sustainability in the medium
term.- Robin Berry, CEO - Sentula Mining Limited.
FINANCIAL REVIEW*
- Revenue decreased by 19% to R951 million (2012: R1 175 million)
- Headline earnings per share increased to 11.5 cents (2012: 8.5 cents)
- Net asset value per share : 226 cents (March 2013: 265 cents)
- Tangible net asset value per share: 220 cents (March 2013: 252 cents)
- Debt to equity gearing ratio decreased to 26% (March 2013: 32%)
*The movements have been based on prior period restated results
The Groups earnings for the six-month period were adversely impacted by the following:
- An impairment of R273 million (net of tax) on mineral rights held-for-sale;
- A provision of slow-moving inventory (BE1260 dragline) in Benicon Sales of R40 million, on a pre-tax basis;
- The on-going depressed exploration drilling cycle; and
- The below expectation performances from the Groups open-cast operations;
Results were positively impacted by the following:
- Excellent operational performance from Ritchie Crane Hire; and
- A recovery of R30m from the funds misappropriated in the 2008 financial year.
OPERATIONAL REVIEW
Sustainability
Safety track record
The Group-led safety initiatives and activity specific protocols have continued to reduce the risk of injury and
exposure to the staff employed across its varied operations. For the period under review, Sentula recorded three lost time
injuries, resulting in a Classified Injury Frequency Rate of 0,74 per million man hours worked. This is a marginal
improvement on the comparative prior period (0,75 per million man hours worked). Sentula continues to work closely with its
clients as it strives towards the goal of zero harm.
Transformation
Sentula remains an independently re-verified level 5 contributor, in terms of the DTI codes measuring Broad-Based
Black Economic Empowerment (B-BBEE), as at November 2013. The Group continues to drive all the components of the B-BBEE
scorecard.
Environment
Sentula Group companies have, during the period under review, continued to meet the objectives, with respect to the
International Standards Organisation accreditation, 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. The Group continues to focus on the participation in quality contracts that add to
the sustainability of the mining services business and as such has not renewed marginal contracts during the period.
Continuing opencast mining services
Opencast mining
The period under review has been characterised by stable demand, but ongoing exacting trading conditions, as margins
remained under pressure across the opencast mining contracting sector.
Following a tough second half to the previous financial year, Benicon managed to stabilise its operations, during the
period under review, through consolidation, the closure of three pits and focussing on its medium and longer term
prospects. Despite a slow start, CCT recovered during the latter part of the period, with the ramp-up of the Samancor Spitskop
open pit operation.
In line with the strategy to consolidate the operations of CCT into Benicon, the total operations of the Spitskop pit
have now been incorporated into Benicon. The remaining operations of CCT will be incorporated into Benicon during the
remainder of the current financial year.
Overburden drilling and blasting
JEF Drill and Blast experienced a drop in its revenue and profit base during the period, following the sudden loss of
the Tharissa contract but remains positioned to deliver sustainable earnings, at current margins, as it continues to
diversify its commodity and geographic exposure.
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 2012. 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 period under review. More recently, Geosearch has also 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 contribute some 90% of Geosearchs earnings.
Crane hire
Ritchie Crane Hire sustained its performance during the period and maintained its level of profitability, on a
comparative basis. The results from this entity continue to be supported by its mix of cranes, strong competitive position in
the Emalahleni/Middelburg geographical area, and diversity of clientele in coal mining, steel and power generation
industries. The Group continues to invest in capacity to grow this business.
Coal mining investments
In line with the strategy to crystalise the value associated with its diversified portfolio of coal assets, the Group
has continued to drive the process of assessing opportunities to achieve this, through the outright disposal of its
interests in these assets. Notwithstanding the commitment to assess an opportunity that may arise on any of the Group
assets, Sentula continues to focus its efforts on the disposal of the three key interests in the Schoongezicht prospecting
license and the Nkomati operations and Bankfontein mining right. To this end, a deal on the Schoongezicht property has been
concluded and a section 11 transfer has been received with the Department of Mineral Resources. Processes to deal with
the remaining two assets are well advanced.
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 R40,0 million was received in
April 2013 by the liquidators of Scharrighuisens estate, in full and final settlement of all claims against these
entities. Of the R40,0 million, R24,4 million was paid to Megacube in April 2013 and a further R10,0 million was received in
mid-September 2013.
The settlement agreement does not affect the civil judgments of R383,0 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.
STRATEGIC REVIEW
The Groups strategic intent remains one of providing a platform for growth by being recognised as a focused mining
services provider, with the ability to contract across the African continent. Despite on-going volatility across the full
spectrum of minerals sectors and the limited visibility of exploration work, in the short term, the Groups firm
intention remains one of focusing on the value drivers in its diversified service business offerings.
To this end, a three pronged strategy has been developed to:
- consolidate the operations of its opencast mining businesses, Benicon and CCT and to extract operational
efficiencies therefrom;
- invest in opportunities and capacity to grow the solid drilling and blasting and mobile crane hire businesses, and
- maintain, through prudent restructuring, the Groups exploration hubs, in order to take advantage of expected
growth in the mineral exploration sector, following a recovery.
The strategy is further enhanced through the finalisation of the disposal of the Groups stakes in various propriety
coal investments, for which plans for the key assets have already been implemented.
Sentulas exposure to the coal and energy sector, coupled with its diversified service offering, client base, mineral
exposure and geographical spread should continue to provide a solid base for the development of the business into the
future.
DIVIDENDS
The Board of directors has decided not to declare an interim dividend for the period under review.
DIRECTORATE
There were no changes to the Board during the period under review.
On behalf of the Board
Jonathan Best Robin Berry Woodmead
Non-executive Chairman Chief Executive Officer 12 November 2013
Comparative periods have been restated due to a change in an accounting standard and discontinuing operations as
disclosed in note 3 below.
Condensed consolidated statement of financial position
at 30 September 2013 Restated Restated
Reviewed Reviewed Audited
September September March
R000 2013 2012 2013
ASSETS
Total non-current assets 1 168 497 1 824 019 1 300 281
Property, plant and equipment 1 097 664 1 415 521 1 188 556
Intangible assets 2 692 7 404 3 366
Investment in equity-accounted joint venture - 367 -
Goodwill 37 426 372 691 72 563
Deferred tax 30 715 28 036 35 796
Total current assets 652 321 947 328 838 068
Inventories 130 489 321 201 175 643
Trade and other receivables 425 211 496 135 534 679
Cash and cash equivalents 95 683 123 543 109 704
Current tax receivable 938 6 449 18 042
Assets classified as held-for-sale 280 930 980 301 650 534
TOTAL ASSETS 2 101 748 3 751 648 2 788 883
Equity and liabilities
Total equity attributable to equity holders
of the Company 1 315 852 2 397 695 1 537 238
Share capital and premium 1 994 406 1 994 406 1 994 406
Reserves 135 369 53 772 108 127
Retained (losses)/earnings (813 923) 349 517 (565 295)
Non-controlling interest (85 746) 46 883 32 742
Total equity 1 230 106 2 444 578 1 569 980
Liabilities
Total non-current liabilities 259 929 622 451 109 733
Loans and borrowings 149 649 429 405 -
Finance lease obligations 2 518 - 3 371
Deferred tax 107 762 193 046 106 362
Total current liabilities 526 704 501 894 925 721
Trade and other payables 216 973 260 744 281 222
Loans and borrowings 262 923 235 643 543 744
Finance lease obligations 2 325 - 2 129
Bank overdraft - - 58 062
Taxation payable 44 483 5 507 40 564
Total liabilities held-for-sale 85 009 182 725 183 450
Total liabilities 871 642 1 307 070 1 218 904
TOTAL EQUITY AND LIABILITIES 2 101 748 3 751 648 2 788 884
Net asset value per share (excluding treasury shares) 226 cents 413 cents 265 cents
Tangible net asset value per share (excluding goodwill-
excluding treasury shares) 220 cents 347 cents 252 cents
Condensed consolidated income statement
for the six months ended 30 September 2013 Restated Restated
Reviewed Reviewed Audited
September September March
R000 2013 2012 2013
Revenue 950 665 1 174 803 2 084 118
Results from operations 34 181 100 945 (198 435)
Recovery of unaccounted funds 30 000 - -
Results from operating acitivities
pre-impairments and inventory write-off 64 181 100 945 (198 435)
Provision for slow moving/obsolete inventory (40 527) - (133 783)
Impairment of plant and equipment - - (186 902)
Impairment of assets held-for-sale (5 774) - (15 149)
Impairment of goodwill (35 138) - (300 127)
Impairment of intangible assets - - (9 162)
Results from operating activities (17 258) 100 945 (843 558)
Net finance charges (25 379) (31 690) (57 972)
Fair value adjustment on interest rate cap 38 (2 011) (2 486)
(Loss)/profit before taxation (42 599) 67 244 (904 016)
Taxation (38 403) (31 256) 31 187
(Loss)/profit for the period from continuing operations (81 002) 35 988 (872 829)
Discontinued operations
Loss for the year from discontinued operations
(attributable to the owners of the parent) (286 114) (6 673) (14 846)
Total comprehensive (loss)/income for the period (367 116) 29 315 (887 675)
(Loss)/profit attributable to: (367 116) 29 315 (887 675)
Equity holders of the Company (248 628) 42 306 (862 686)
Non-controlling interest (118 488) (12 991) (24 989)
Basic and diluted (loss)/earnings per share (cents) (42,8) 7,3 (148,5)
Shares in issue at end of the period excluding treasury
shares ('000) 581 005 581 005 581 005
Condensed consolidated statement of comprehensive income
for the six months ended 30 September 2013 Restated Restated
Reviewed Reviewed Audited
September September March
R000 2013 2012 2013
(Loss)/profit for the period (367 116) 29 315 (887 675)
Other comprehensive income
Foreign currency translation differences for
foreign operations 27 242 25 075 67 190
Other comprehensive income for the period, net
of income tax 27 242 25 075 67 190
Total comprehensive (loss)/income for the period (339 874) 54 390 (820 485)
Attributable to:
Equity holders of the Company (221 386) 67 381 (795 496)
Non-controlling interest (118 488) (12 991 (24 989)
Information about reportable segments
The Group is organised in 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, CCT and JEF are included in the continuing opencast
mining services. Benicon Coal, Nkomati and Benicon Mining are included in the Discontinuing coal mining operations
as they are currently held-for-sale. 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.
Continuing opencast Opencast mining Exploration
R000 mining services Megacube services drilling
Reviewed six months ended 30 September 2013
Continuing operations
Total segment revenue 730 894 15 730 909 227 038
Inter-segment revenue 60 668 - 60 668 1 533
External revenue from continuing operations 670 226 15 670 241 225 505
External revenue from discontinuing operations - - - -
External revenue 670 226 15 670 241 225 505
Continuing operations
Total segment results pre-impairment 52 751 6 302 59 053 (613)
Impairment of goodwill - - -
Impairment of assets held-for-sale (5 774) - (5 774) -
Provision for slow-moving/obsolete inventory - - - -
Recovery of unaccounted funds - 30 000 30 000 -
Total segment results from continuing operations 46 977 36 302 83 279 (613)
Total segment results from discontinuing operations - - - -
Segment results 46 977 36 302 83 279 (613)
Reviewed restated six months ended 30 September 2012
Total segment revenue 711 996 67 388 779 384 442 835
Inter-segment revenue 90 165 1 578 91 743 -
External revenue from continuing operations 621 831 65 810 687 641 442 835
External revenue from discontinuing operations - - - -
External revenue 621 831 65 810 687 641 442 835
Total segment results from continuing operations 49 825 37 168 86 993 48 761
Total segment results from discontinuing operations - - - -
Segment results 49 825 37 168 86 993 48 761
R000 Crane hire Coal mining Other Total
Reviewed six months ended 30 September 2013
Continuing operations
Total segment revenue 40 492 - 26 903 1 025 342
Inter-segment revenue 72 - 12 404 74 677
External revenue from continuing operations 40 420 - 14 499 950 665
External revenue from discontinuing operations - 656 - 656
External revenue 40 420 656 14 499 951 321
Continuing operations
Total segment results pre-impairment 19 436 (240) (43 455) 34 181
Impairment of goodwill - - (35 138) (35 138)
Impairment of assets held-for-sale - - - (5 774)
Provision for slow-moving/obsolete inventory - - (40 527) (40 527)
Recovery of unaccounted funds - - - 30 000
Total segment results from continuing operations 19 436 (240) (119 120) (17 258)
Total segment results from discontinuing operations - (389 256) - (389 256)
Segment results 19 436 (389 496) (119 120) (406 514)
Reviewed restated six months ended 30 September 2012
Total segment revenue 33 785 - 25 721 1 281 725
Inter-segment revenue 267 - 14 912 106 922
External revenue from continuing operations 33 518 - 10 809 1 174 803
External revenue from discontinuing operations - 449 - 449
External revenue 33 518 449 10 809 1 175 252
Total segment results from continuing operations 17 681 1 620 (54 110) 100 945
Total segment results from discontinuing operations - (4 958) (980) (5 938)
Segment results 17 681 (3 338) (55 090) 95 007
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2013 Employee share Foreign currency
Share Share incentive Treasury translation
R000 capital premium reserve shares reserve
Balance as at 31 March 2012 5 866 2 014 438 36 574 (25 898) (25 408)
Profit/(loss) for the period - - - - -
Other comprehensive income - - - - 25 075
Transactions with owners, recorded directly in equity
Share-based payment empowerment transaction - - 12 531 - -
Option premium on empowerment transaction - - 5 000 - -
Effect of change in accounting policy of joint venture - - - - -
Restated balance as at 30 September 2012 5 866 2 014 438 54 105 (25 898) (333)
Loss for the period - - - - -
Other comprehensive income - - - - 42 115
Transactions with owners, recorded directly in equity
Dividends paid to non-controlling interest - - - - -
Share-based payments - - 406 - -
Share-based payment empowerment transaction - - 5 101 - -
Option premium on empowerment transaction - - 11 500 - -
Effect of change in accounting policy of joint venture - - - - -
Share options forfeited - - (4 767) - -
Restated balance as at 31 March 2013 5 866 2 014 438 66 345 (25 898) 41 782
Loss for the period - - - - -
Other comprehensive income - - - - 27 242
Balance as at 30 September 2013 5 866 2 014 438 66 345 (25 898) 69 024
Non- Total ordinary
Retained controlling shareholders
R000 earnings Total interest funds
Balance as at 31 March 2012 365 388 2 370 960 59 815 2 430 775
Profit/(loss) for the period 42 306 42 306 (12 991) 29 315
Other comprehensive income 25 075 25 075
Transactions with owners, recorded directly in equity
Share-based payment empowerment transaction - 12 531 - 12 531
Option premium on empowerment transaction - 5 000 - 5 000
Effect of change in accounting policy of joint venture (58 177) (58 177) 59 (58 118)
Restated balance as at 30 September 2012 349 517 2 397 695 46 883 2 444 578
Loss for the period (904 992) (904 992) (11 998) (916 990)
Other comprehensive income - 42 115 - 42 115
Transactions with owners, recorded directly in equity
Dividends paid to non-controlling interest - - (2 221) (2 221)
Share-based payments - 406 - 406
Share-based payment empowerment transaction - 5 101 - 5 101
Option premium on empowerment transaction - 11 500 - 11 500
Effect of change in accounting policy of joint venture (14 587) (14 587) 78 (14 509)
Share options forfeited 4 767 - - -
Restated balance as at 31 March 2013 (565 295) 1 537 238 32 742 1 569 980
Loss for the period (248 628) (248 628) (118 488) (367 116)
Other comprehensive income - 27 242 - 27 242
Balance as at 30 September 2013 (813 923) 1 315 852 (85 746) 1 230 106
Condensed consolidated statement of cash flows
for the six months ended 30 September 2013 Restated Restated
Reviewed Reviewed Audited
September September March
R000 2013 2012 2013
Cash flows from operating activities 198 405 65 846 106 418
Cash generated from operating activities 238 707 122 533 206 525
Income taxes paid (14 076) (25 340) (41 968)
Interest paid (26 226) (31 347) (58 139)
Cash flows from investing activities (28 406) (87 236) (90 103)
Interest received 847 1 194 3 249
Purchase of property, plant and equipment (52 456) (127 482) (214 716)
Proceeds from disposal of property, plant and equipment 22 512 39 107 18 374
Capitalised exploration expenditure (409) (55) (309)
Additions to assets held-for-sale - - (57 165)
Proceeds from disposal of assets held-for-sale 1 100 - 160 464
Cash flows from financing activities (132 295) (41 507) (158 759)
Loans raised - 67 974 74 213
Loans repaid (132 295) (111 938) (234 242)
Changes in equity accounted investments - (2 543) (13 009)
Option premium on empowerment transaction received - 5 000 16 500
Dividends paid to non-controlling interest - - (2 221)
Net increase/(decrease) in cash and cash equivalents 37 704 (62 897) (142 444)
Cash and cash equivalents at beginning of the period 51 929 180 236 180 236
Exchange gain on cash and cash equivalents 6 751 6 366 14 137
Cash and cash equivalents at the end of the period 96 384 123 705 51 929
Included in cash and cash equivalents per the balance sheet 95 683 123 543 51 642
Included in the assets of the disposal group 701 162 287
96 384 123 705 51 929
Reconciliation of headline earnings
Restated Restated
Reviewed Reviewed Audited
September September March
R000 2013 2012 2013
Net (loss)/profit for the period attributable to equity
holders of the Company (248 628) 42 306 (862 686)
Adjust for:
Profit on disposal of plant and equipment (257) (403) (2 230)
Loss on disposal of plant and equipment 654 7 380 1 392
Loss on disposal of held-for-sale assets - - 221 028
Profit on disposal of held-for-sale assets (318) - -
Impairment of mineral rights held-for-sale 365 431 - -
Impairment of intangible assets - - 9 162
Impairment of property, plant and equipment - - 186 902
Impairment of assets held-for-sale 15 774 - 15 149
Impairment of goodwill 35 138 - 300 127
Tax effect of above adjustments (100 744) 59 (13 265)
Headline earnings/(loss) attributed to ordinary shareholders 67 050 49 342 (144 421)
Headline earnings/(loss) per share (cents) 11,5 8,5 (24,9)
Notes to the reviewed financial statements
1. Basis of preparation
The condensed consolidated interim financial results for the six months ended 30 September 2013 have been prepared
under the supervision of Mr GP Louw (CA)SA in accordance with International Accounting Standards IAS 34, Interim
Financial Reporting, the South African Companies Act 71 of 2008, as amended, and the Listings Requirements of the JSE
Limited.
The condensed consolidated interim financial information does not include all the information and disclosures
required in the annual financial statements, and should be read in conjunction with the Groups annual financial statements as
at 31 March 2013, which have been prepared in accordance with International Financial Reporting Standards as issued by
the International Accounting Standards Board (IASB).
The accounting standards and amendments to issued accounting standards and interpretations, which are relevant to
the Group, but not yet effective on 30 September 2013 have not been early adopted.
2. Accounting policies
The accounting policies adopted are consistent with those applied in the annual financial statements for the year
ended 31 March 2013, except as described below in note 4, where joint ventures previously proportionately consolidated are
now equity accounted.
Changes in accounting policy
IFRS 11- Joint arrangements
IFRS 11- Joint arrangements became effective on 1 January 2013. As the standard was not early adopted the
transition rules apply. On transition, adjustments in accordance with the transition provisions of the standard are recorded at
the beginning of the earliest period presented.
Before 30 September 2013, the Group's interest in its jointly controlled entities was accounted for using the
proportional consolidation method.
The investment affected is Jonah Coal Botswana Limited.
The Group adopted IFRS 11- Joint arrangements on 1 April 2013. This resulted in the Group changing its accounting
policy for its interest in jointly controlled entities. Under IFRS 11, investments in joint arrangements are either
classified as joint operations or joint ventures, depending on the contractual rights and obligations each investor has
rather than the legal structure of the joint arrangement.
Under IFRS 11, the abovementioned jointly controlled entity has been assessed and classified to be a joint venture.
The financial effects of the change in accounting policies at 30 September 2012 and 31 March 2013 are disclosed in note 4.
3. Restatement of comparative periods
The adoption of IFRS 11 has resulted in the restatement of comparative periods. Prior periods have also been
represented for discontinued operations.
4. Effect of adoption of IFRS 11
The Group has a joint venture agreement with Jonah Capital BVI, which led to the establishment of a joint venture
company, incorporated in Mauritius and known as Jonah Coal Botswana Limited. Sentula owns 50% of the share capital of
Jonah Coal Botswana. Its principal business activity is investing in coal exploration companies.
6 months 12 months
ended ended
Impact on statement of comprehensive income (R000) 30 September 31 March
Increase/(decrease) 2012 2013
Operating expenses - 11 924
Share of expenses of equity-accounted joint venture - 367
Profit before tax - 12 291
Taxation - -
Profit after tax - 12 291
Impact on statement of financial position (R000)
Increase/(decrease)
Assets:
Property, plant and equipment (198) (151)
Intangible assets (14 870) (14 810)
Investment in equity-accounted joint venture 367 -
Goodwill (43 244) (48 083)
Trade receivables (105) (17)
Cash and cash equivalents (2 543) (718)
Total assets (60 593) (63 779)
Equity:
Retained earnings (58 177) (60 434)
Non-controlling interest 59 98
(58 118) (60 336)
Liabilities:
Trade payables (2 475) (3 443)
Total equity and liabilities (60 593) (63 779)
Impact on statement of cash flows (R000)
Increase/(decrease)
Cash flows from investing activities (2 543) (13 009)
5. Discontinued operations
The Board has taken a decision to dispose of all the coal assets within the group.
As announced on SENS on 26 June 2013, Sentula is in negotiations regarding the proposed disposal of its 60%
indirectly held interest in the Nkomati Anthracite mine.
Financial performance and cash flow information relating to the discontinued operations for the period is set out below.
Restated Restated
Reviewed Reviewed Audited
September September March
R000 2013 2012 2013
Revenue 656 449 908
Cost of sales (8 614) (5 826) (13 111)
Gross loss (7 958) (5 377) (12 203)
Other income 15 15 30
Impairment of mineral rights (365 431) - -
Impairment of assets held-for-sale (10 000) - -
Administration expenses (5 882) (576) (1 215)
Results from operating activities (389 256) (5 938) (13 388)
Finance expense (17 565) (15 539) (31 681)
Finance income 266 253 501
Loss before taxation (406 555) (21 224) (44 568)
Taxation 102 432 - 26
Loss for the period from discontinued operations (304 123) (21 224) (44 542)
Intergroup eliminations 18 009 14 551 29 696
(286 114) (6 673) (14 846)
Loss attributable to:
- Equity holders of the Company (185 635) (12 734) (26 725)
- Non-controlling interest (118 488) (8 490) (17 817)
Cash flow attributable to operating activities (26 907) (22 512) (44 459)
Cash flow attributable to investing activities (824) 33 219
Cash flow attributable to financing activities 28 145 22 233 44 119
Cash flows attributable to discontinued operations 414 (246) (121)
Cash and cash equivalents at the beginning of the period 287 408 408
Cash and cash equivalents at the end of the period 701 162 287
6 Assets and liabilities classified as held-for-sale
Assets held-for-sale
Property, plant and equipment 188 271 522 673 194 494
Mineral rights 45 330 410 761 410 761
Intangible assets 7 249 6 585 6 840
Restricted investment 8 693 8 693 8 693
Deferred tax asset 14 729 14 704 14 729
Inventories 14 149 14 149 14 149
Trade receivables 163 193 102
Other receivables 1 435 1 434 178
Value added taxation 210 862 216
Cash and cash equivalents 701 162 287
Current tax receivable - 85 85
280 930 980 301 650 534
Liabilities held-for-sale
Rehabilitation provision 66 899 66 899 66 899
Trade and other payables 5 418 813 1 538
Deferred tax liability 12 692 115 013 115 013
85 009 182 725 183 450
7. Contingent liabilites
Keaton
During the 2013 financial year, Megacube Mining Proprietary Limited (MM) instituted legal proceedings against Keaton Mining
Proprietary Limited (Keaton) for the recovery of R41,5 million owing to MM for mining services rendered on its Vangatfontein
operation.
Subsequent to the above action, Keaton instituted a counter claim of R119,9 million against MM in respect of an alleged breach
of contract and substandard mining practices. In accordance with the mining services contract between the two parties, the
matters will be independently arbitrated. A date for arbitration has yet to be finalised, but is to be expected to be set down
for the second half of the 2014 financial year. The Company 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 counterclaim, but are unable to estimate the probable or
possible loss. The amount owing by Keaton to MM is included in trade receivables at this and prior reporting dates.
CCT rehabilitation
Management has embarked upon an assessment of certain open cast site closure rehabilitation obligations. An independent open pit
mining consultant has been appointed to finalise the individual pit closure designs, which will then serve as a basis for this
determination. It is impossible to determine the magnitude of the potential liability at this stage.
8. Events after the reporting period
The directors are not aware of any other matters or circumstances arising after the reporting period up to the date of this report,
not otherwise dealt within this report. Refer to note 9 for details of the debt restructure that occured subsequent to period end.
9. Going concern
The Group has met all its debt obligations during the past six months and, based on the Groups cash flow forecasts for the 12 months
ending 30 September 2014, is expected to meet all its obligations in the ordinary course of business during this period.
As disclosed in the March 2013 annual financial statements 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 ongoing 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 Group breached the DSCR and TDR covenants at June 2013 and September 2013 for which condonation was granted by the Standard Bank
Consortium (SBC). The Board of directors has approved a proposal from SBC to restructure its senior debt as follows:
- Tranche A- a fully amortising tranche of R99 million over the period to 11 February 2015; and
- Tranche B- a bullet instalment of between R210 million and R254 million (Tranche B), depending on the extent of interim cash
sweeps, by no later than 11 February 2015. The bullet instalment is expected to be redeemed from proceeds arising from the disposal of
the Groups coal assets and other non-core assets.
All forward looking covenants are expected to be complied to once the restructured facility is implemented.
10. Review conclusion
The condensed consolidated statement of financial position at 30 September 2013 and related condensed consolidated income statement,
condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated
statement of cash flows for the period have been reviewed by PricewaterhouseCoopers Inc. Their unmodified review report is available for
inspection at the Companys registered office.
Directors: JG Best*(Chairman), RC Berry (Chief Executive Officer), GP Louw (Financial Director), PP Modisane,
CJPG van Zyl*, DR Zihlangu*, KW Mzondeki*, RB Patmore* *Non-executive
Company Secretary: GC Cross
Transfer Secretaries: Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street,
Johannesburg, 2001. PO Box 61051 Marshalltown. 2107. Tel (011) 370-5000
Investor Relations Advisers: College Hill
Sponsor: Merchantec Capital
Independent External Auditor: PricewaterhouseCoopers Inc.
Registered address: Block 14- Ground Floor, Woodlands Office Park, Woodmead, 2080. PO Box 76, Woodmead, 2080.
Tel (011) 656-1303
www.sentula.co.za
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