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SENTULA MINING LIMITED - Reviewed condensed consolidated interim results for the 12 months ended 31 March 2016

Release Date: 27/06/2016 07:30
Code(s): SNU     PDF:  
Wrap Text
Reviewed condensed consolidated interim results for the 12 months ended 31 March 2016

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")

Reviewed condensed consolidated interim results for the 12 months ended 31 March 2016


FINANCIAL OVERVIEW

- Cash flow from operating activities increased by 80,9% to R85 million                          (2015: R47 million)   
- Debt reduced by R126 million to R81 million during the period                 (2015: R139 million to R207 million)   
- Basic loss per share from operations increased to 56,46 cents                    (Re-presented 2015*: 49,18 cents)   
- Headline loss per share improved to 39,87 cents                                  (Re-presented 2015*: 40,22 cents)   
- Net asset value per share of 41 cents                                                           (2015*: 123 cents)   

*Re-presented for the rights issue and classification of assets held-for-sale.

The Group’s earnings for the 12-month period were impacted by the following:
- Start-up of Coal mining operations at Nkomati Anthracite mine;
- A decrease in corporate head office overheads and other service costs of R18 million; 
- Benicon Opencast Mining operating losses of R104 million;
- Impairment of Benicon Opencast Mining plant and equipment of R103 million; and
- Provision for claims and receivable impairment in Megacube of R129 million.

Benicon Opencast Mining Proprietary Limited (“Benicon”)
During November the operational management of Benicon was taken over by a new executive team. The team was faced with
escalating repairs and maintenance costs and lower equipment availability due to ageing of equipment. 

In order to deliver into the secured Anglo Coal contracts, the bulk of the aging equipment will require replacement.
As an alternative to the significant investment required replacing the equipment, a merger opportunity with an existing
opencast mining company, Close-Up Mining Proprietary Limited (“Close-Up”), was identified.

Shareholders are referred to the SENS announcement on 27 June 2016 in which the transaction was announced. 

Sentula currently holds 50,5% of the shares in Sentula Coal Proprietary Limited (“Sentula Coal”) with the remaining
shares held by the Sentula Employee Trust. Sentula Coal is currently 62,91% black owned. Sentula Coal’s opencast mining
activities commenced during 2015 when Sentula Coal secured its first opencast mining contract with Anglo Coal. Sentula
Coal appointed Benicon as its main subcontractor.

Sentula Coal is in the process of employing a substantial number of Benicon employees as well as acquiring certain
selected plant and equipment previously owned by Benicon. From 1 July 2016 Sentula Coal will be responsible for all 
Anglo Coal contracts historically executed by Benicon.

The ultimate result of the announced transaction is that Sentula will hold 40% of the shares in Close-Up, which will,
in addition to its existing opencast mining operations, hold 50,5% of the shares in Sentula Coal, with Sentula Coal
owning selected plant and equipment previously owned by Benicon.

In addition, and as a direct consequence, Benicon will commence with an orderly process of disposing of the majority
of its ageing equipment.

Megacube claims
During the 2013 financial year, Megacube Mining Proprietary Limited (“Megacube”) instituted arbitral proceedings
against Keaton Mining Proprietary Limited (“Keaton”) for the recovery of R41,5 million owing to Megacube. In response 
Keaton raised five counterclaims based on alleged breaches of contract by Megacube, which allegedly resulted in losses
totalling R80 million. Shortly before the arbitration commenced, Keaton abandoned one of its claims of R33,6 million.

During April 2016 the arbitrator dismissed Megacube’s claim despite Keaton not disputing its liability and found
Megacube to be liable to Keaton in respect of three of Keaton’s claims, including legal costs. The quantum of that liability
is to be determined separately in later arbitral proceedings before the arbitrator. Even though the quantum is yet to be
determined, based on the award made, Megacube has estimated a possible loss in favour of Keaton’s three counterclaims
of R92 million as well as R42 million in respect of Megacube’s receivable. Both amounts have been provided for in the
results.

Megacube has launched a high court application to set aside the award on the basis of gross irregularities as well as
the arbitrator exceeding his powers. This includes the dismissal of Megacube’s claim, which was never disputed by
Keaton. In addition and included in the R92 million provision, the arbitrator awarded Keaton an estimated R45 million more
damages than claimed. The high court will be requested to direct that the disputes be referred to a new arbitration before
three arbitrators.

Megacube is currently not operational and has a negative net asset value of R107 million. There is no known recourse
to Sentula or any other Sentula subsidiary in respect of Keaton’s claims. As Megacube is a subsidiary of Sentula,
accounting standards require that the award against Megacube be provided for in the results for the period under review. 

OPERATIONAL REVIEW
Mining services
The Group operates mainly in five operating segments broadly defined as opencast mining services, overburden drilling
and blasting, mobile crane hire, exploration drilling and coal mining.

Opencast mining services
The bulk earth moving businesses of Benicon and Classic Challenge Trading Proprietary Limited (“CCT”) have continued
to experience difficult trading conditions. Repairs and maintenance costs have escalated significantly in Benicon due to
the age of the equipment and margins remain under pressure across the opencast mining contracting sector.

The objective of the announced transaction as well as the unwinding of Benicon is to cease the operating losses in
Opencast mining services as promptly as possible.

Overburden drilling and blasting
JEF Drill and Blast Proprietary Limited (“JEF”) provides overburden drilling and blasting services to Sentula Group
companies and external customers. The loss of certain external blasting contracts, combined with a reduction in coal
mining volumes, has negatively affected JEF’s performance. JEF, however, remains profitable and continues to secure new
overburden drilling contracts to compensate for the loss of some of the blasting contracts.

Mobile crane hire
Ritchie Crane Hire Proprietary Limited (“Ritchie”) continued to gain new customers, which partly offset the decline in
work experienced over the past 12 months as a result of a key client entering into business rescue proceedings. Ritchie’s 
gross margins and crane availability were sustained but lower utilisation negatively affected the bottom line. 

Exploration drilling
All restructuring measures were successfully implemented during the year, with all three Geosearch subsidiaries
positioned to operate profitably from current levels. In South Africa, Buenti’s Mogalakwena contract remains profitable and
has been extended for two years. Agua Terra in Mozambique has secured an attractive long-term bush clearing contract while
its exploration drilling activities are recovering gradually. Geosearch Botswana is operating on minimal overheads and
is awaiting adjudication on various contracts with a major customer.
 
Coal mining
Production at the Nkomati Anthracite mine recommenced at the end of the previous financial year after an offtake agreement 
with Glencore Alloys was secured. During the 12-month period, the opencast operations produced a total of 218 880 run of mine 
tonnes (“ROM”). Steady state production of 40 000 ROM per month was subsequently achieved.
 
STRATEGIC REVIEW
The Group’s current strategic focus areas are:
- settle outstanding senior Group debt of R37,5 million in order to allow for the release of Group securities;
- replace Group short-term banking facilities with operating subsidiary facilities;
- unlock value in Nkomati Anthracite mine;
- reduce the Group’s exposure to opencast mining services; and
- investment in future growth opportunities in existing and new sectors.

DIVIDENDS
The Board has decided not to declare a dividend for the period under review.

DIRECTORATE
The following resignation occurred during the 12 months under review to date of this report:
- RC Berry resigned as Chief Executive Officer and executive director on 7 October 2015.

The following appointments occurred during the 12 months under review to date of this report:
- JC Badenhorst was appointed as a non-executive director on 8 May 2015 and appointed as acting Chief Executive
  Officer on 7 October 2015. He was appointed as the permanent Chief Executive Officer effective 1 March 2016; and
- T de Bruyn was appointed as a non-executive director effective 15 June 2016.

On behalf of the Board
Ralph Patmore                        Jacques Badenhorst
Non-executive Chairman               Chief Executive Officer
Woodmead
27 June 2016


CONDENSED CONSOLIDATED INCOME STATEMENT 
for the 12 months ended 31 March 2016  
                                                                                                   Audited 
                                                                                Reviewed             March 
                                                                                   March              2015 
R’000                                                                               2016      Re-presented 
Revenue                                                                        1 186 405         1 374 753 
Loss from operations                                                            (105 406)         (153 880)
Net profit/(loss) on disposal of assets                                              971           (52 099)
Megacube arbitration award                                                      (129 051)                -   
Impairment of plant and equipment                                               (103 240)          (14 795)
Impairment of assets held-for-sale                                                     -              (815)
Operating loss                                                                  (336 726)         (221 589)
Finance charges                                                                  (35 723)          (52 918)
Fair value adjustment on interest rate cap                                             -              (159)
Loss before taxation                                                            (372 449)         (274 666)
Taxation                                                                          24 215           (16 244)
Loss for the period from continuing operations                                  (348 234)         (290 910)
Discontinued operations   
Loss for the period from discontinued operations (attributable to          
the owners of the parent)                                                              -              (275)
Loss on disposal of discontinued operations                                            -            (3 727)
Total loss for the period                                                       (348 234)         (294 912)
Loss attributable to:                                                                                      
- Owners of the parent                                                          (348 234)         (293 445)
- continuing operations                                                         (348 234)         (289 443)
- discontinued operations                                                              -            (4 002)
- Non-controlling interest                                                             -            (1 467)
- continuing operations                                                                -            (1 467)
- discontinued operations                                                              -                 - 
Weighted basic and diluted loss per share (cents)                                 (56,46)           (49,18)
- continuing operations (cents)                                                   (56,46)           (48,51)
- discontinued operations (cents)                                                      -             (0,67)
Shares in issue at the end of the period (’000)                                1 167 564           586 559 
Shares in issue at the end of the period excluding treasury shares (’000)      1 162 011           581 005 
Weighted average shares in issue at the end of the period excluding         
treasury shares (’000) (2015 restated for the rights issue)                      616 787           596 708 


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME   
for the 12 months ended 31 March 2016                      
                                                                                                   Audited  
                                                                                Reviewed             March  
                                                                                   March              2015  
R’000                                                                               2016      Re-presented  
Loss for the period                                                             (348 234)         (294 912) 
Other comprehensive (expenses)/income                                                                       
Items that may be subsequently reclassified to profit or loss                                               
Foreign currency translation differences for foreign operations                   (7 006)            2 339  
Other comprehensive (expenses)/income for the period, net of income tax           (7 006)            2 339  
Total comprehensive loss for the period                                         (355 240)         (292 573) 
Loss attributable to:                                                                                       
- Owners of the parent                                                          (355 240)         (291 106) 
- continuing operations                                                         (355 240)         (287 104) 
- discontinued operations                                                              -            (4 002) 
- Non-controlling interest                                                             -            (1 467) 
- continuing operations                                                                -            (1 467) 
- discontinued operations                                                              -                 -  


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION            
for the 12 months ended 31 March 2016                             
                                                                                Reviewed           Audited 
                                                                                   March             March 
R’000                                                                               2016              2015 
Assets                                                                                                     
Total non-current assets                                                         799 130           801 617 
Property, plant and equipment                                                    731 504           749 942 
Restricted investments                                                             1 995                 - 
Intangible assets                                                                      -               672 
Goodwill                                                                          37 427            37 427 
Deferred income tax assets                                                        28 204            13 576 
Total current assets                                                             336 674           403 328 
Inventories                                                                       40 457            70 492 
Trade and other receivables                                                      209 193           312 947 
Cash and cash equivalents                                                         81 896            19 245 
Current tax receivable                                                             5 128               644 
Assets of disposal group classified as held-for-sale                                   -           219 490 
Total assets                                                                   1 135 804         1 424 435 
Equity and liabilities                                                                                     
Total equity attributable to equity holders of the parent                        479 480           732 012 
Share capital and premium                                                      2 097 114         1 994 406 
Reserves                                                                         101 131           110 689 
Accumulated loss                                                              (1 718 765)       (1 373 083)
Non-controlling interest                                                               -                 - 
Total equity                                                                     479 480           732 012 
Liabilities                                                                                                
Total non-current liabilities                                                    158 047           114 856 
Loans and borrowings                                                                 933             3 699 
Rehabilitation provision                                                          69 249                 - 
Finance lease obligations                                                         22 275            44 356 
Deferred income tax liabilities                                                   65 590            66 801 
Total current liabilities                                                        498 277           509 534 
Trade and other payables                                                         213 277           191 594 
Provisions                                                                       103 399            17 271 
Loans and borrowings                                                              40 019           133 134 
Finance lease obligations                                                         17 716            26 260 
Bank overdraft                                                                    89 234            81 214 
Current income tax liabilities                                                    34 632            60 061 
Liabilities of disposal group classified as held-for-sale                              -            68 033 
Total liabilities                                                                656 324           692 423 
Total equity and liabilities                                                   1 135 804         1 424 435 
Net asset value per share (excluding treasury shares) (cents)               
(2015 restated for the rights issue)                                                  41               123 
Tangible net asset value per share (excluding goodwill) -                  
excluding treasury shares (cents) (2015 re-presented for the                
rights issue)                                                                         38               116 


CONDENSED CONSOLIDATED CASH FLOW STATEMENT       
for the 12 months ended 31 March 2016            
                                                                                Reviewed           Audited  
                                                                                   March             March  
R’000                                                                               2016              2015  
Cash flows from operating activities                                              85 068            47 138  
Cash generated from operating activities                                         126 600           119 808  
Income taxes paid                                                                 (9 297)          (20 622) 
Interest paid                                                                    (32 235)          (52 048) 
Cash flows from investing activities                                             (19 603)           (3 534) 
Interest received                                                                  1 309               769  
Purchase of property, plant and equipment                                        (37 856)         (103 959) 
Proceeds from disposal of property, plant and equipment                           16 607            42 021  
Capitalised exploration expenditure                                                    -            (1 187) 
Additions to assets held-for-sale                                                      -              (830) 
Proceeds from disposal of assets held-for-sale                                     2 332            27 279  
Proceeds from disposal of subsidiary                                                   -            23 680  
Movement in restricted investment                                                 (1 995)            8 693  
Cash flows from financing activities                                             (12 319)         (139 033) 
Increase in borrowings                                                                 -            77 476  
Decrease in borrowings                                                          (115 027)         (216 509) 
Proceeds from the rights issue                                                   104 581                 -  
Payment of transaction costs related to rights issue                              (1 873)                -  
                                                                                                            
Net increase/(decrease) in cash and cash equivalents                              53 146           (95 429) 
Cash and cash equivalents at the beginning of the period                         (60 569)           33 744  
Exchange gain on cash and cash equivalents                                            85             1 116  
Cash and cash equivalents at the end of the period                                (7 338)          (60 569) 
Cash and cash equivalents classified as discontinued operations                        -             1 400  
Cash and cash equivalents per statement of financial position                     (7 338)          (61 969) 
Cash and cash equivalents at the end of the period                                (7 338)          (60 569) 


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY  
                                                                 Share                                     Foreign    
                                                               capital    Share-based                     currency    
                                                                   and        payment     Treasury     translation     
R’000                                                          premium        reserve       shares         reserve   
Restated balance as at 31 March 2014                         2 020 304         36 684      (25 898)         74 166   
Loss for the year                                                    -              -            -               -     
Other comprehensive income                                           -              -            -           2 339    
Transactions with owners, recorded directly in equity                                                                
Disposal of subsidiary                                               -         (2 500)           -               -     
Balance as at 31 March 2015                                  2 020 304         34 184      (25 898)         76 505   
Loss for the year                                                    -              -            -               -     
Other comprehensive loss                                             -              -            -          (7 006)     
Transactions with owners, recorded directly in equity                                                                
Shares issued for cash                                         104 581              -            -               -    
Rights issue transaction costs                                  (1 873)             -            -               -     
Share options forfeited                                              -         (2 552)           -               -    
Total contributions by and distributions to owners             102 708         (2 552)           -          (7 006)     
Balance as at 31 March 2016                                  2 123 012         31 632      (25 898)         69 499   

                                                                                                             Total 
                                                                                               Non-       ordinary 
                                                           Accumulated                  controlling   shareholders’
R’000                                                             loss          Total      interest          funds 
Restated balance as at 31 March 2014                        (1 080 639)     1 024 617         1 467      1 026 084 
Loss for the year                                             (293 445)      (293 445)       (1 467)      (294 912)
Other comprehensive income                                           -          2 339             -          2 339 
Transactions with owners, recorded directly in equity                                                              
Disposal of subsidiary                                           1 001         (1 499)            -         (1 499)
Balance as at 31 March 2015                                 (1 373 083)       732 012             -        732 012 
Loss for the year                                             (348 234)      (348 234)            -       (348 234)
Other comprehensive loss                                             -         (7 006)            -         (7 006)
Transactions with owners, recorded directly in equity                                                              
Shares issued for cash                                               -        104 581             -        104 581 
Rights issue transaction costs                                       -         (1 873)            -         (1 873)
Share options forfeited                                          2 552              -             -              - 
Total contributions by and distributions to owners            (345 682)      (252 532)            -       (252 532)
Balance as at 31 March 2016                                 (1 718 765)       479 480             -        479 480 


INFORMATION ABOUT REPORTABLE SEGMENTS   
The Group is organised in five operating segments, namely Opencast mining services, exploration drilling, overburden 
drilling and blasting, mobile crane hire and coal mining. Benicon, CCT, Sentula Coal, and Benicon Sales Proprietary Limited 
(“Benicon Sales”) are included in the Opencast mining services. Sentula Coal and Benicon Sales are now included in Opencast 
mining services due to a change in the structure of the organisation, previously Sentula Coal was included in the coal 
mining segment and Benicon Sales was included in corporate and other services. Benicon Coal Proprietary Limited (“Benicon”) 
and Nkomati Anthracite Proprietary Limited (“Nkomati”) are included in the coal mining operations, Benicon Coal and Nkomati 
have been represented in the prior year as they are no longer classified as held-for-sale. Even though Megacube is no longer 
operational it has been disclosed separately due to its materiality. Segment performance is measured based on the segment 
profit before interest and income tax. Intersegment revenue is priced on an arm’s length basis.

                                                        Opencast                       Overburden               
                                                          mining     Exploration     drilling and         Crane    
R’000                                                   services        drilling         blasting          hire    
Reviewed 12 months ended 31 March 2016                                                                           
Total segment revenue                                    748 772         196 721          311 612        72 665 
Inter-segment revenue                                     95 196           5 934          110 925         1 518 
External revenue                                         653 576         190 787          200 687        71 147 
Total segment results pre-impairment                    (110 324)         (5 650)          22 680        23 369 
Impairment of plant and motor vehicles                  (103 240)              -                -             - 
Net gain on disposal of assets                              (764)          1 544              192            (3)    
Segment results                                         (214 328)         (4 106)          22 872        23 366 
Segment assets                                           353 263         143 011          191 420       156 932 
Current and deferred tax assets                                -          15 518            1 356             -  
Total assets                                             353 263         158 529          192 776       156 932 
Segment liabilities                                      137 263          16 439           61 398        11 540 
Current and deferred tax liabilities                      40 120           4 795           14 686        23 564 
Total liabilities                                        177 383          21 234           76 084        35 104 
Audited re-presented 12 months ended 31 March 2015                                                              
Total segment revenue                                    815 212         269 170          358 549       100 620 
Inter-segment revenue                                     69 956           2 659          101 092         1 202 
External revenue                                         745 256         266 511          257 457        99 418 
Continuing operations                                                                                            
Total segment results pre-impairment                    (134 508)        (58 927)          41 782        47 433 
Net loss on disposal of assets                           (50 225)          1 192            1 600          (321)
Impairment of property, plant and equipment              (11 803)         (2 992)               -             - 
Impairment of assets transferred to held-for-sale              -            (815)               -             -    
Total segment results from continuing operations        (196 536)        (61 542)          43 382        47 112 
Segment assets                                           579 881         173 379          208 922       165 010 
Assets classified as held-for-sale                         2 553           2 790                -             - 
Current and deferred tax assets                                -          11 746                -           233  
Total assets                                             582 434         187 915          208 922       165 243 
Segment liabilities                                      137 466          47 177           55 240        15 521 
Liabilities classified as held-for-sale                        -               -                -             -  
Current and deferred tax liabilities                      40 857          24 510           16 311             - 
Total liabilities                                        178 323          71 687           71 551        15 521 

                                                                                       Corporate               
                                                            Coal                       and other               
R’000                                                     mining       Megacube         services         Total 
Reviewed 12 months ended 31 March 2016                                                                         
Total segment revenue                                    135 799        (36 719)             550     1 429 400 
Inter-segment revenue                                     28 872              -              550       242 995 
External revenue                                         106 927        (36 719)               -     1 186 405 
Total segment results pre-impairment                     (12 203)      (129 199)         (23 130)     (234 457)
Impairment of plant and motor vehicles                         -              -                -      (103 240)
Net gain on disposal of assets                                (4)             -                6           971 
Segment results                                          (12 207)      (129 199)         (23 124)     (336 726)
Segment assets                                           202 618          5 340           49 888     1 102 472 
Current and deferred tax assets                           14 729              -            1 729        33 332 
Total assets                                             217 347          5 340           51 617     1 135 804 
Segment liabilities                                       83 231         95 252          150 979       556 102 
Current and deferred tax liabilities                           -         16 802              255       100 222 
Total liabilities                                         83 231        112 054          151 234       656 324 
Audited re-presented 12 months ended 31 March 2015                                                             
Total segment revenue                                      6 111              -              950     1 550 612 
Inter-segment revenue                                          -              -              950       175 859 
External revenue                                           6 111              -                -     1 374 753 
Continuing operations                                                                                          
Total segment results pre-impairment                     (14 648)         2 076          (37 088)     (153 880)
Net loss on disposal of assets                                 -              -           (4 345)      (52 099)
Impairment of property, plant and equipment                    -              -                -       (14 795)
Impairment of assets transferred to held-for-sale              -              -                           (815)
Total segment results from continuing operations         (14 648)         2 076          (41 433)     (221 589)
Segment assets                                                69         42 207           21 257     1 190 725 
Assets classified as held-for-sale                       213 947            200                -       219 490 
Current and deferred tax assets                                -              -            2 241        14 220 
Total assets                                             214 016         42 407           23 498     1 424 435 
Segment liabilities                                        1 034          1 484          239 606       497 528 
Liabilities classified as held-for-sale                   68 033              -                -        68 033 
Current and deferred tax liabilities                           -         41 424            3 760       126 862 
Total liabilities                                         69 067         42 908          243 366       692 423 


RECONCILIATION OF HEADLINE LOSS
                                                                                       Reviewed               Audited re-presented   
                                                                                     March 2016                    March 2015        
                                                                                                     Continuing       Discontinued   
R’000                                                                                     Group      operations         operations        Group  
Loss for the period attributable to equity holders of the parent                       (348 234)       (289 443)            (4 002)    (293 445) 
Adjusted for:                                                                                                                                    
Profit on disposal of plant and equipment                                                (1 742)         (2 762)                 -       (2 762) 
Loss on disposal of subsidiary                                                                -               -              3 727        3 727  
Loss on disposal of plant and equipment                                                     771          54 861                  -       54 861  
Scrapping of assets                                                                           -           1 357                  -        1 357  
Profit on disposal of held-for-sale assets                                                    -               -                  -            -  
Impairment of property, plant and equipment                                             103 240          14 795                  -       14 795  
Impairment of assets held-for-sale                                                            -             815                  -          815  
Tax effect of above adjustments                                                              53         (19 338)                 -      (19 338) 
Headline loss attributed to ordinary shareholders                                      (245 912)       (239 715)              (275)    (239 990) 
Weighted headline loss per share (cents) (2015 re-presented for the rights issue)        (39,87)         (40,17)             (0,05)      (40,22) 


NOTES TO THE CONDENSED INTERIM FINANCIAL INFORMATION   
1   Basis of preparation   
    The condensed consolidated interim financial statements for the 12 months ended 31 March 2016 have been prepared 
    under the supervision of Mr JC Lemmer (CA)SA in accordance with International Financial Reporting Standards IAS 34, 
    Interim Financial Reporting, the SAICA Financial Reporting Guides, as issued by the Accounting Practices Committee
    and Financial Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the 
    Companies Act of South Africa and the Listings Requirements of the JSE Limited.

    The condensed consolidated interim financial statements do not include all the information and disclosures required 
    in the annual financial statements, and should be read in conjunction with the Group’s annual financial statements 
    as at 31 March 2015, 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 31 March 2016 have not been early adopted. 

2   Change in year-end                                                                           
    As announced by the Company on SENS on 22 March 2016, Sentula has, with effect from 30 June 2016, amended its 
    financial year-end from 31 March to 30 June. These interim financial results reflect the financial results of the 
    Group for the 12-month interim period ended 31 March 2016, as required in terms of paragraph 3.15(b) of the JSE 
    Listings Requirements.

3   Accounting policies   
    The significant accounting policies, judgements, estimates and methods of computation are in terms of IFRS and are 
    consistent in all material respects with those applied in the annual financial statements for the year ended 
    31 March 2015 and are presented in South African rand, which is the functional and presentational currency.

    There have been no material changes to the items measured at fair value as disclosed in the financial statements 
    subsequent to 31 March 2015. The directors consider that the carrying amounts of financial assets and liabilities 
    recorded at amortised cost approximate their fair values.  

4   Review conclusion  
    These condensed consolidated interim financial statements for the 12 months to 31 March 2016 have been reviewed by 
    PricewaterhouseCoopers Inc. who expressed an unmodified review conclusion. A copy of the auditor’s review conclusion 
    is available for inspection at the Company’s registered office together with the interim financial statements identified
    in the auditor’s report.

    The auditor’s report does not necessarily report on all of the information contained in this announcement/financial 
    results. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor’s
    engagement they should obtain a copy of the auditor’s report together with the accompanying financial information from 
    the issuer’s registered office. 

5   Assets and liabilities classified as held-for-sale  
    Benicon Coal and its subsidiary, Nkomati Anthracite can no longer be classified as held-for-sale as the requirements 
    of IFRS 5 are no longer met.

    The prior year numbers on the income statement, statement of comprehensive income, basic and headline loss per share 
    have been re-presented to include Benicon Coal and Nkomati in continuing operations. In terms of IFRS 5, the statement 
    of financial position for March 2016 includes these operations on a line by line basis. 

                                                                   Transferred          
                                       Reviewed                      (from)/to        Audited    
                                          March                      held-for-          March    
    R’000                                  2016      Disposal             sale           2015   
    Assets held-for-sale                                                                         
    Property, plant and equipment             -        (5 544)        (184 202)       189 746    
    Deferred tax asset                        -             -          (14 729)        14 729    
    Inventories                               -             -          (10 384)        10 384    
    Trade and other receivables               -             -           (3 231)         3 231    
    Cash and cash equivalents                 -             -           (1 400)         1 400    
                                              -        (5 544)        (213 946)       219 490    
    Liabilities held-for-sale                                                                      
    Rehabilitation provision                  -             -          (66 899)        66 899    
    Trade and other payables                  -             -           (1 134)         1 134    
                                              -             -          (68 033)        68 033    
6   Rights issue                                                                                 
    During the first quarter of 2016, Sentula embarked on a partially underwritten renounceable rights offer in terms of
    which 100 rights offer shares were issued for every 100 shares held at a subscription price of 18 cents per rights 
    offer share. The Company raised R104,58 million. Following the issue of the rights offer shares, the number of 
    Sentula shares in issue is 1 167 564 491.                                                                

7   Contingent assets                                                                            
    During the year judgment was granted in favour of the Golden Autumn Trust against Argent Industrial Limited (“Argent”)
    for payment of the sum of R8,8 million with interest on this sum a tempore more, as well as costs of the suit. Argent 
    was granted leave to appeal this matter on 8 May 2015. Any funds recovered through the Golden Autumn Trust, net of 
    costs, are paid over to Megacube Mining.

    Argent’s claim against Sentula and Megacube was dismissed with costs.  

8   Contingent liabilities   
    Keaton sought, in one of its claims in the arbitration, compensation for the value of ROM coal allegedly not 
    extracted amounting to R39,5 million based on 386 592 tonnes. As an alternative to this claim Keaton claimed an 
    amount of R48,6 million in respect of the cost to remove the overburden above the coal allegedly not extracted. The 
    higher amount of R48,6 million was provided for.

    However, the arbitrator awarded Keaton tonnages substantially in excess of what it sought, namely for 657 583 tonnes
    ROM coal allegedly not extracted.

    The additional 270 991 tonnes of ROM coal awarded under this claim, estimated at R45 million, is challenged in the 
    mentioned high court application. As a result no further provision has been made above the compensation originally 
    sought by Keaton.   

9   Events after the reporting period  
    The directors are not aware of any subsequent events that occurred between the reporting period up to the date of 
    this report, not otherwise dealt within this report. 

10  Going concern  
    The financial statements have been prepared on the going-concern basis as the directors have every reason to believe 
    that the Company has adequate resources in place to continue in operation for the foreseeable future. The basis presumes
    that funds will be available to finance future operations and that the realisation of assets and settlement of 
    liabilities, contingent obligations and commitments will occur in the ordinary course of business. 


Directors: RB Patmore* (Chairman), JC Badenhorst (Chief Executive Officer), 
JC Lemmer (Financial Director), DR Zihlangu*, SP Naudé*, ME Gama*, T de Bruyn#
*Independent non-executive #Non-executive

Company Secretary: GC Cross

Transfer secretaries: Computershare Investor Services Proprietary Limited
Ground Floor, 70 Marshall Street, Johannesburg, 2001. PO Box 61051, Marshalltown 
Tel (011) 370-5000

Sponsor: Questco Proprietary Limited

Auditor: PricewaterhouseCoopers Inc.

Registered address: Ground Floor, Building 14, Woodlands Office Park, Woodmead, 2080
PO Box 76, Woodmead, 2080  
Tel (011) 656-1303

www.sentula.co.za

Date: 27/06/2016 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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