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SENTULA MINING LIMITED - Audited summarised consolidated financial results for the 15 months ended 30 June 2016 and notice of AGM

Release Date: 30/09/2016 17:00
Code(s): SNU     PDF:  
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Audited summarised consolidated financial results for the 15 months ended 30 June 2016 and notice of AGM

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")

Audited summarised consolidated financial results 
for the 15 months ended 30 June 2016 and notice of the annual general meeting

INTRODUCTION
The 2016 financial period continued to be a very challenging one for Sentula. Since 2010, Sentula has been battling 
to keep head above water as the debt load, fraud, declining commodity prices, declining margins, rising labour costs,
legal disputes and mining regulatory uncertainty continued to weigh on its performance. For Sentula it all culminated 
in the tipping point being reached during the past financial period. The new starting point was to install an executive 
team that was capable of focusing the business, identifying the issues and opportunities, and then to move forward despite 
the negative past.

Sentula is on track to complete an aggressive restructuring exercise, which included closing, merging and recapitalising 
affected businesses in its portfolio. Sentula’s key qualities which are long-term contracts with blue-chip customers,
a diversified revenue base, well established track records, good safety records and top quality and loyal staff with the 
technical expertise to deliver results, have kept Sentula alive against all odds.
 
These qualities, combined with a fresh approach from the new executive management, assisted in repositioning each business 
as a standalone and sustainable unit. There are more hurdles to cross but we are confident that Sentula is on track to turn 
the corner. The environment remains very challenging but the emphasis will be on focusing on those things that we can control 
rather than those that we cannot. In future the focus will be on businesses that have good investment characteristics and yield 
attractive returns on capital.

FINANCIAL OVERVIEW
The loss incurred during the financial period was mainly as a result of the following non-recurring events:
- The Megacube Mining Proprietary Limited ("Megacube")/Keaton Mining Proprietary Limited ("Keaton") arbitration award of 
  R129 million;
- Impairment of property, plant and equipment amounting to R139 million in the opencast mining operations;
- Operating losses incurred by Benicon amounting to R157 million, including wind-down costs; and
- Nkomati production ramp up costs amounting to R25 million.

During the second half of the financial period, the operational management of Benicon was taken over by a new executive team. 
The rapidly escalating losses in Benicon Opencast Mining Proprietary Limited ("Benicon") dictated that drastic action be taken, 
which culminated in the winding down of Benicon as well as the proposed merger between Sentula Coal Proprietary Limited 
("Sentula Coal") and Close-Up Mining Proprietary Limited ("Close-Up"). Shareholders are referred to the SENS announcement on 
27 June 2016 in which the transaction was announced. 

The Megacube/Keaton arbitration dispute has been provided for during the period, negatively impacting the Group’s equity by 
R109 million. The arbitration award will not impact the rest of the Group’s operations as there is no known recourse between 
Megacube and any other group company.

OPERATIONAL REVIEW
Mining services
Although Sentula currently provides a suite of diversified mining services to mainly blue-chip customers, it will in future 
focus on investment in good companies with good management, delivering attractive returns on capital to shareholders. The 
five businesses, constituting the current Sentula Group, operate in one of the four contracted mining-related service provision 
areas, broadly defined as opencast mining, overburden drilling and blasting, mobile crane hire and exploration drilling. In 
addition, Sentula is the majority shareholder in Nkomati Anthracite, which is an active anthracite mine.

Opencast mining services
Benicon, Sentula's largest bulk earthmoving business, suffered substantial losses during the fifteen month period as a
result of old and expensive to maintain equipment as well as an inefficient and expensive operating structure. As a
result, Benicon is in the process of winding down and the best elements are in the process of being merged with Close-Up.
As part of the proposed transaction, Sentula will acquire a 40% equity stake in Close-Up, which continues to provide
contract mining services to Anglo American Coal. Classic Challenge Trading Proprietary Limited ("CCT"), which provides
contract mining services to Samancor, suffered losses due to a historically mispriced contract. Subsequent to the period end
the contract price has been adjusted, which should enable CCT to operate profitably in future. 

Overburden drilling and blasting
JEF Drill and Blast Proprietary Limited ("JEF") provides drilling and blasting services to Group companies as well as
external clients. JEF's performance during the 15 months was negatively affected by the loss of key blasting contracts.
Subsequent to the period-end JEF was able to obtain new drilling contracts, which should enable it to return to historical 
levels of profitability. The Group will continue to invest in JEF to grow the business on a sustainable basis.

Mobile crane hire
Ritchie Crane Hire Proprietary Limited ("Ritchie") suffered a slowdown in revenue growth during the early part of the
financial period, mainly as a result of key customers postponing work due to tough market conditions. Since then,
confidence appears to have returned, evident in a consistent and gradual increase in Ritchie's crane utilisation ratio.
Ritchie's impeccable safety record combined with excellent customer service has enabled it to keep on winning new contracts
against very tough competition. The Group will continue to invest in Ritchie to grow the business on a sustainable basis.

Exploration drilling
The ongoing reduction in exploration expenditure in the market necessitated further restructuring of Geosearch operations 
in South Africa, Mozambique and Botswana. The South African operation's key contract is with Anglo Platinum at their
Mogolakwena mine while Botswana was recently awarded a drilling contract at Debswana's Orapa mine. Mozambique continues
to be affected by challenging weather conditions and a very slow recovery in coal mining activities. Operations in all
three jurisdictions have been rightsized to be able to operate profitably in the current challenging environment. The
businesses are well-positioned to take advantage of new opportunities as the exploration drilling market recovers.

Nkomati Anthracite
The Nkomati Anthracite Mine, which was previously classified as a "held-for-sale" asset, has been brought back into
operation and is well on track to achieve record production and profitability. During the past fifteen months the emphasis
was on ensuring that the open pit mine achieves steady state production and that we complete the planning for the reopening 
of the underground mine. Open pit steady state production was achieved subsequent to the end of the financial period and 
underground make-safe operations are scheduled to start during 2017. Longstanding shareholder disputes have been resolved, 
paving the way for raising the necessary capital to resume underground mining operations.

STRATEGIC UPDATE
The support of our shareholders during the past financial period facilitated the restructuring of operations and
reduction in debt. Our strategic objectives are:
- settlement of outstanding senior Group debt;
- reduction in the Group's exposure to opencast mining services; 
- investment in performing businesses;
- unlocking value in Nkomati Anthracite Mine; and
- returning to profitability.

OUTLOOK
During the period under review, the bulk of the hard work has been done and we are satisfied that the future of Sentula will 
look very different than its past. We do not pay too much attention to macro-economic factors or predictions about the 
commodity cycle but rather prefer to focus on the things that we can control. We focus on each business's individual 
requirements, drivers and dynamics to determine what is required in each to remain competitive and be profitable. Our sole 
aim is to deliver attractive returns on capital to our shareholders over time and by doing so outperform the market.

NOTICE OF THE ANNUAL GENERAL MEETING
Notice is hereby given in terms of section 62(1) of the Companies Act 71 of 2008, as amended ("Companies Act"), that
an annual general meeting ("annual general meeting") of the shareholders of the Company will be held at Ground Floor,
Building 14, The Woodlands Office Park, Woodlands Drive, Woodmead, at 10:00 on Wednesday, 16 November 2016, to consider
and, if deemed fit, to approve the resolutions set out in the notice of the annual general meeting, which is contained in
the annual report.

The Board of Sentula has determined that, in terms of section 62(3)(a), as read with section 59 of the Companies Act,
the record date for the purposes of determining which shareholders of the Company are entitled to participate in and
vote at the annual general meeting is Friday, 11 November 2016. Accordingly the last day to trade Sentula shares in order
to be recorded in the register be entitled to vote will be Tuesday, 8 November 2016.

On behalf of the Board

Ralph Patmore                     Jacques Badenhorst
Non-executive Chairman            Chief Executive Officer
Woodmead
30 September 2016

SUMMARY CONSOLIDATED INCOME STATEMENT    
for the 15 months ended 30 June 2016     
                                                                                Audited             Audited  
                                                                              June 2016          March 2015  
R'000                                                                         15 months            Restated  
Revenue                                                                       1 535 689           1 374 753  
Loss from operations                                                           (179 619)           (153 880) 
Net profit/(loss) on disposal of assets                                           9 662             (52 099) 
Megacube arbitration award                                                     (129 051)                  -  
Impairment of plant and equipment                                              (138 846)            (14 795) 
Impairment of other receivable                                                   (3 568)                  -  
Impairment of assets held-for-sale                                                    -                (815) 
Operating loss                                                                 (441 422)           (221 589) 
Finance charges                                                                 (45 467)            (52 918) 
Fair value adjustment on interest rate cap                                            -                (159) 
Loss before taxation                                                           (486 889)           (274 666) 
Taxation                                                                         17 512             (16 244) 
Loss for the period from continuing operations                                 (469 377)           (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                                                      (469 377)           (294 912)
Loss attributable to:                                                                                       
- Owners of the parent                                                         (447 429)           (293 445)
  - continuing operations                                                        (447 429)           (289 443)
  - discontinued operations                                                             -              (4 002)
- Non-controlling interest                                                      (21 948)             (1 467)
  - continuing operations                                                         (21 948)             (1 467)
  - discontinued operations                                                             -                   - 
Weighted basic and diluted loss per share (cents)                                (61,27)             (49,18)
- continuing operations (cents)                                                  (61,27)             (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)     1 162 010             581 005 
Weighted average shares in issue at the end of the period                             
excluding treasury shares ('000) (2015 restated for the rights issue)           730 200             596 708 


SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 15 months ended 30 June 2016                  
                                                                                Audited             Audited  
                                                                              June 2016          March 2015  
R'000                                                                         15 months            Restated  
Loss for the period                                                            (469 377)           (294 912) 
Other comprehensive (loss)/income                                                                            
Items that may be subsequently reclassified to profit or loss                                                
Foreign currency translation differences for foreign operations                 (21 843)              2 339  
Other comprehensive (loss)/income for the period, net of income tax             (21 843)              2 339  
Total comprehensive loss for the period                                        (491 220)           (292 573) 
Loss attributable to:                                                                                        
- Owners of the parent                                                         (469 272)           (291 106) 
  - continuing operations                                                        (469 272)           (287 104) 
  - discontinued operations                                                             -              (4 002) 
- Non-controlling interest                                                      (21 948)             (1 467) 
  - continuing operations                                                         (21 948)             (1 467) 
  - discontinued operations                                                             -                   -  
  

SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
at 30 June 2016                                       
                                                                                Audited             Audited  
                                                                                   June               March  
R'000                                                                              2016                2015  
Assets                                                                                                       
Total non-current assets                                                        654 052             801 617  
Property, plant and equipment                                                   586 014             749 942  
Restricted cash                                                                   2 850                   -  
Intangible assets                                                                     -                 672  
Goodwill                                                                         37 427              37 427  
Deferred income tax asset                                                        27 761              13 576  
Total current assets                                                            283 737             403 328  
Inventories                                                                      33 402              70 492  
Trade and other receivables                                                     213 792             312 947  
Cash and cash equivalents                                                        32 822              19 245  
Current tax receivable                                                            3 721                 644  
Assets of disposal group classified as held-for-sale                            105 174             219 490  
Total assets                                                                  1 042 963           1 424 435  
Equity and liabilities                                                                                       
Total equity attributable to equity holders of the parent                       365 409             732 012  
Share capital                                                                 2 122 973           2 020 304  
Treasury shares                                                                 (25 898)            (25 898) 
Reserves                                                                         86 294             110 689  
Accumulated loss                                                             (1 817 960)         (1 373 083) 
Non-controlling interest                                                        (21 948)                  -  
Total equity                                                                    343 461             732 012  
Liabilities                                                                                                  
Total non-current liabilities                                                   147 284             114 856  
Loans and borrowings                                                                  -               2 354  
Rehabilitation provision                                                         69 889                   -  
Finance lease obligations                                                        14 301              45 701  
Deferred income tax liabilities                                                  63 094              66 801  
Total current liabilities                                                       525 048             509 534  
Trade and other payables                                                        230 179             208 474  
Megacube arbitration award                                                       92 331                   -  
Deferred revenue                                                                 25 331                 391  
Loans and borrowings                                                             33 500             132 752  
Finance lease obligations                                                         9 840              26 642  
Bank overdraft                                                                   86 841              81 214  
Current income tax liabilities                                                   47 026              60 061  
Liabilities of disposal group classified as held-for-sale                        27 170              68 033  
Total liabilities                                                               699 502             692 423  
Total equity and liabilities                                                  1 042 963           1 424 435  
Net asset value per share (excluding treasury shares) (cents)                                   
(2015 restated for the rights issue)                                                 31                 123  
Tangible net asset value per share (excluding goodwill) - excluding 
treasury shares (cents) (2015 restated for the rights issue)                         28                 116  


SUMMARY CONSOLIDATED CASH FLOW STATEMENT   
for the 15 months ended 30 June 2016       
                                                                                Audited                 
                                                                              June 2016             Audited  
R'000                                                                         15 months          March 2015  
Cash flows from operating activities                                             53 475              47 138  
Cash generated from operating activities                                        100 729             119 808  
Income taxes paid                                                                (9 719)            (20 622) 
Interest paid                                                                   (37 535)            (52 048) 
Cash flows from investing activities                                              6 485              (3 534) 
Interest received                                                                 1 699                 769  
Purchase of property, plant and equipment                                       (56 888)           (103 959) 
Proceeds from disposal of property, plant and equipment                          61 733              42 021  
Capitalised exploration expenditure                                                   -              (1 187) 
Additions to assets held-for-sale                                                     -                (830) 
Proceeds from disposal of assets held-for-sale                                    2 791              27 279  
Proceeds from disposal of subsidiary                                                  -              23 680  
Movement in restricted cash                                                      (2 850)              8 693  
Cash flows from financing activities                                            (47 220)           (139 033) 
Increase in borrowings                                                                -               3 289  
Decrease in borrowings                                                         (101 606)           (199 827) 
Finance lease advances                                                            1 371              74 187  
Finance lease payments                                                          (49 654)            (16 682) 
Proceeds from the rights issue                                                  104 581                   -  
Payment of transaction costs related to rights issue                             (1 912)                  -  
Net increase/(decrease) in cash and cash equivalents                             12 740             (95 429) 
Cash and cash equivalents at the beginning of the period                        (60 569)             33 744  
Exchange (losses)/gain on cash and cash equivalents                              (1 291)              1 116  
Cash and cash equivalents at the end of the period                              (49 120)            (60 569) 
Cash and cash equivalents per statement of financial position                   (54 019)            (61 969) 
Cash and cash equivalents classified as held-for-sale                             4 899                   -  
Cash and cash equivalents classified as discontinued operations                       -               1 400  
Cash and cash equivalents at the end of the period                              (49 120)            (60 569) 


SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY     
for the 15 months ended 30 June 2016        
                                                                                                       Foreign      
                                                                     Share-based                      currency      
                                                            Share        payment      Treasury     translation      
R'000                                                     capital        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 15 months                                          -              -             -               -      
Other comprehensive loss                                        -              -             -         (21 843)     
Transactions with owners, recorded directly in equity                                                             
Shares issued for cash                                    104 581              -             -               -     
Rights issue transaction costs                             (1 912)             -             -               -      
Share options forfeited                                         -         (2 552)            -               -     
Total contributions by and distributions to owners        102 669         (2 552)            -         (21 843)     
Balance as at 30 June 2016                              2 122 973         31 632       (25 898)         54 662     

                                                                                                              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 15 months                                     (447 429)     (447 429)        (21 948)         (469 377)  
Other comprehensive loss                                          -       (21 843)              -           (21 843)  
Transactions with owners, recorded directly in equity                                                                 
Shares issued for cash                                            -       104 581               -           104 581   
Rights issue transaction costs                                    -        (1 912)              -            (1 912)  
Share options forfeited                                       2 552             -               -                 -   
Total contributions by and distributions to owners         (444 877)     (366 603)        (21 948)         (388 551)  
Balance as at 30 June 2016                               (1 817 960)      365 409         (21 948)          343 461   


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 Coal") and 
Nkomati Anthracite Proprietary Limited ("Nkomati") are included in the coal mining operations, Benicon Coal and Nkomati 
Anthracite have been restated 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. Inter-segment revenue is priced on an arm's length basis.    
  
  
Audited 15 months ended 30 June 2016                    Opencast      Exploration        Overburden                   
                                                          mining         drilling      drilling and          Crane    
R'000                                                   services                           blasting           hire                 
Total segment revenue                                    983 738          223 269           385 414         89 852    
Inter-segment revenue                                    118 964            8 118           154 649          3 511      
External revenue                                         864 774          215 151           230 765         86 341    
Total segment results pre-impairment                    (167 271)         (14 046)           28 061         28 281     
Impairment of plant and motor vehicles                  (138 846)               -                 -              -     
Megacube arbitration award                                     -                -                 -              -     
Impairment of other receivable                                 -                -                 -              -       
Net gain on disposal of assets                             7 834            1 648               192             (3)       
Segment results                                         (298 283)         (12 398)           28 253         28 278     
Segment assets                                           234 941          120 450           194 325        155 864      
Assets classified as held-for-sale                       105 174                -                 -              -      
Current and deferred tax assets                                -           13 515             1 371            581       
Total assets                                             340 115          133 965           195 696        156 445    
Segment liabilities                                      148 244           16 713            59 649         11 152      
Liabilities classified as held-for-sale                   27 170                -                 -              -       
Current and deferred tax liabilities                      37 615           36 368            15 405              -      
Total liabilities                                        213 029           53 081            75 054         11 152      
Audited restated 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      
                                                                                                                      
Audited 15 months ended 30 June 2016                                                    Corporate                   
                                                            Coal                        and other                        
R'000                                                     mining       Megacube          services               Total                  
Total segment revenue                                    169 017              -               550           1 851 840     
Inter-segment revenue                                     30 359              -               550             316 151       
External revenue                                         138 658              -                 -           1 535 689     
Total segment results pre-impairment                     (24 930)        (3 806)          (25 908)           (179 619)     
Impairment of plant and motor vehicles                         -              -                 -            (138 846)     
Megacube arbitration award                                     -       (129 051)                -            (129 051)     
Impairment of other receivable                                 -              -            (3 568)             (3 568)       
Net gain on disposal of assets                               (15)             -                 6               9 662         
Segment results                                          (24 945)      (132 857)          (29 470)           (441 422)     
Segment assets                                           194 354          5 761               611             906 306       
Assets classified as held-for-sale                             -              -                 -             105 174       
Current and deferred tax assets                           14 644              -             1 372              31 483        
Total assets                                             208 998          5 761             1 983           1 042 963     
Segment liabilities                                       90 209         98 422           137 823             562 212       
Liabilities classified as held-for-sale                        -              -                 -              27 170        
Current and deferred tax liabilities                           -         16 802             3 930             110 120       
Total liabilities                                         90 209        115 224           141 753             699 502       
Audited restated 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                                                                                                                  
                                                                               Audited                                                 
                                                                             June 2016            Audited March 2015 - Restated         
                                                                             15 months                     12 months                      
R'000                                                                                         Continuing       Discontinued                    
                                                                                 Group        operations         operations            Group                    
Loss for the period attributable to equity holders of the parent              (447 429)         (289 443)            (4 002)        (293 445)      
Adjusted for:                                                                                                                                          
Profit on disposal of plant and equipment                                      (10 438)           (2 762)                 -           (2 762)        
Loss on disposal of subsidiary                                                       -                 -              3 727            3 727          
Loss on disposal of plant and equipment                                            776            54 861                  -           54 861         
Scrapping of assets                                                                511             1 357                  -            1 357          
Impairment of property, plant and equipment                                    138 846            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                             (317 681)         (239 715)              (275)        (239 990)      
Weighted headline loss per share (cents) (2015 restated 
for rights issue)                                                               (43,51)           (40,17)             (0,05)          (40,22)        

NOTES TO THE AUDITED FINANCIAL STATEMENTS                                           
1  Basis of preparation                                                                             
   The summarised consolidated financial statements were prepared in accordance with 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 to International Financial 
   Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial 
   Pronouncements as issued by the Financial Reporting Standards Council and must also, as a minimum contain the information required 
   by IAS 34, Interim Financial Reporting.                                                                    
   The accounting standards and amendments to issued accounting standards and interpretations, which are relevant to the Group, but not yet 
   effective on 30 June 2016 have not been early adopted. It is expected that, where applicable, these standards and amendments will be 
   adopted on each respective effective date, except where specifically identified.                            
   The audited summarised consolidated financial results for the 15 months ended 30 June 2016 have been prepared under the supervision 
   of the Financial Director, JC Lemmer CA(SA).                                                                    

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.    
   
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  Assets and liabilities classified as held-for-sale                                                                    
   Sentula Coal transaction                                                                         
   During the current period, Sentula Coal was classified as held-for-sale as a result of a merger agreement entered into between 
   Sentula, Sentula Coal and Close-Up, as announced on SENS on 27 June 2016.                                                                    
   The result of the transaction is that Sentula will hold 40% of the shares in Close-Up, which will in addition to its existing 
   operations, hold 50,5% of the shares in Sentula Coal, with Sentula Coal owning certain plant and equipment previously owned 
   by Benicon.                 
   Sentula Coal does not meet the criteria to be classified as a discontinued operation since it does not represent a separate 
   major line of business, does not represent a major geographical area of operation and is reported as part of the opencast 
   mining and earthmoving segment.
   
   Benicon Coal transaction                                                                         
   Benicon Coal Proprietary Limited ("Benicon Coal") and its subsidiary, Nkomati Anthracite Proprietary Limited ("Nkomati"), 
   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, and basic and headline loss per 
   share have been restated to include Benicon Coal and Nkomati in continuing operations. In terms of IFRS 5, the statement 
   of financial position for June 2016 includes these operations on a line-by-line basis. It is not a requirement that the 
   prior periods be restated in the statement of financial position and these operations are therefore classified as 
   held-for-sale at 31 March 2015.
   
   R'000                                Audited                       Transferred          Audited    
                                           June                         (from)/to            March    
                                           2016      Disposals      held-for-sale             2015    
   Assets held-for-sale                                                                             
   Property, plant and equipment         59 003         (2 791)          (127 952)         189 746    
   Deferred tax asset                         -              -            (14 729)          14 729    
   Inventories                                -              -            (10 384)          10 384    
   Trade and other receivables           41 272              -             38 041            3 231    
   Cash and cash equivalents              4 899              -              3 499            1 400    
                                        105 174         (2 791)          (111 525)         219 490    
   Liabilities held-for-sale                                                                               
   Rehabilitation provision                   -              -            (66 899)          66 899    
   Trade and other payables              27 170              -             26 036            1 134    
                                         27 170              -            (40 863)          68 033  
   
5  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.
   
6  Contingent assets                                                                                
   During the year, judgement 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.
   
7  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 tons. 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 tons ROM coal allegedly not extracted.                                                                    
   The additional 270 991 tons of ROM coal awarded under this claim, estimated value of 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.
   
8  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.                                                                    
   On 30 September 2016, Sentula issued a circular to shareholders where shareholders were advised that Sentula, 
   Sentula Coal a 50,5% held subsidiary of Sentula, and Close-Up Mining have entered into a merger agreement in 
   terms of which Sentula will dispose of its entire 50,5% shareholding in Sentula Coal to Close-Up at a value of 
   R50 as well as Sentula's claims against Sentula Coal in the amount of R50 million to Close-Up. In consideration 
   thereof, Close-Up will allot and issue 40% of Close-Up shares to Sentula.                                    
   In addition, Benicon will dispose of certain selected plant and equipment to Sentula valued at open market value for 
   R50 million which plant and equipment shall thereafter be disposed of by Sentula, to Sentula Coal for the same price.               
   Subsequent to period-end, Sentula Coal employed a substantial number of staff previously employed by Benicon. From 1 July 2016, 
   Sentula Coal will be responsible for all Anglo Coal contracts historically executed by Benicon. As a result, Benicon was 
   left with idle plant and equipment, certain debtors and some inventory. Benicon's idle plant and equipment are being disposed 
   of in an orderly fashion to raise the necessary cash to settle liabilities.
   
9  Going concern                                                                                    
   The financial statements have been prepared on the going-concern basis. 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.
   Although the current liabilities of the group exceed its current assets, due to the nature of these liabilities the 
   directors have every reason to believe 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.
   The Company restructured its debt in March 2016 and based on Sentula subsidiaries’ cash flow forecasts for the 2017 financial 
   year, is expected to meet all its obligations during this period.

10 Audit opinion                                                                                    
   These summary consolidated financial statements for the 15 months ended 30 June 2016 have been audited by 
   PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon. The auditor also expressed an unmodified 
   opinion on the financial statements from which these summary consolidated financial statements were derived.                                         
   A copy of the auditor's report on the summary consolidated financial statements and of the auditor's report on the financial 
   statements are available for inspection at the Company's registered office, together with the financial statements identified 
   in the respective auditor's reports.                                                                    

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: 30/09/2016 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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