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Integrated Annual Report 2013

Sentula Mining Limited Integrated Annual Report 2013About SentulaSentula Mining Limited has been listed on the Main Board of the JSE since 1993. The Group isactively involved in opencast mining, exploration drilling and rehabilitation and is one of the majorsuppliers of outsourced mining services in the South African coal mining industry. Sentula has grownto become a leading mining services provider currently with operations in eight African countries. TheGroup’s foothold in the coal and energy sector, coupled with its diversified service offering, clientbase, mineral exposure and geographical spread, has contributed to its ability to weather theprevailing challenging economic environment.Sentula is in the process of disposing of its interests in its coal mining investments, with the intent tounlock the value inherent in these prospects and projects.Sentula has a majority interest in the Nkomati Anthracite colliery, a mine close to Komatipoort ineastern Mpumalanga. The mine has the ability to produce anthracite, which is utilised as a coke blendfor domestic and export consumption, from opencast and underground operations. The mine is fullylicenced but remains on care and maintenance pending a disposal process.A mining licence has been granted for the Bankfontein prospect in the Ermelo region and is in theprocess of being executed.The Company has a 50% interest in the coal joint venture, Asenjo Energy, located in Botswana whichencompasses three significant coal deposits, estimated to contain approximately 10 billion tonnes ofin-situ coal. Sentula also has an interest in the Indongo mining project located in Zambia. These coalprospects have been earmarked for energy and power generation across the region and abroad.Integrated reportingThis Integrated Annual Report covers the 2013 annual financial period and has been compiled and presented in accordance with therequirements and principles of the following: the King Report on Governance for South Africa, and the King Code of Governance Principles (King III); the International Integrated Reporting Committee’s prototype of the international Integrated Reporting (IR) framework; the Companies Act 71 (2008); the JSE Listings Requirements; International Financial Reporting Standards (“IFRS”); and the Global Reporting Initiative’s GR3.1 guidelines on reporting of non-financial information (GRI G3.1).We recognise, in line with the principles of King III, that companies should not only report on financial performance, but also on theirsustainability, by disclosing social, environmental and economic issues. This report provides stakeholders with relevant financial andnon-financial information to enable them to obtain a more balanced view of the Group’s business.Forward-looking statementsThis report contains forward-looking statements which are not historical facts. Forward-looking statements involve inherent risks,uncertainties and assumptions, including, without limitation, risks related to the timing or ultimate completion of any proposedtransactions; and the possibility that benefits may not materialise or such assumptions prove incorrect, actual results could differmaterially from those expressed or implied by such forward-looking statements and assumptions. The forward-looking statements inthis report are made as of the date of this report and Sentula expressly disclaims any obligations to update or correct the statementsdue to events occurring after issuing this report.Definitions“The Company” refers to Sentula Mining Proprietary Limited the holding company. “The Group” refers to Sentula Mining Limited andall their subsidiaries and associates. Also, “last year”, “previous year” and “previous corresponding period” refers to the prior financialyear ended 31 March 2012, “the current year, “the year” or “this year” refers to the financial year ended 31 March 2013 and “next year”refers to the financial year ending 31 March 2014.

Sentula Mining Limited Integrated Annual Report 2013Contents01For more detailed information about Sentula andits financial statements please refer to our website:www.sentula.co.zaOverview 2Five-year review 3Group at a glance 4Strategic update 6Group operational structure 7Capital expenditure 8Directorate 10Chairman’s report 16Chief Executive Officer’s report 20Chief Financial Officer’s report 24Governance reportsCorporate governance report 29Risk management report 37Information technology (“IT”) report 41Remuneration report 41King III checklist 44Sustainability report 48Financial statementsConsolidated annual financial statements 61Company annual financial statements 120Shareholders’ information 142JSE performance 143Shareholders’ diary 144Notice of annual general meeting 145Form of proxy 153Administration 155Abbreviations 156

Sentula Mining Limited Integrated Annual Report 201302OverviewOperating (loss)/profitFive-year history (R million)EBITDA*Five-year history (R million)1 0001 0005004808008030129185(420)(871)600400428545383(500)200227(1 000) 200920102011201220130 2009 2010 2011 2012 2013* Adjusted for impairments, amortisation of intangible assets, share-basedpayments, loss on sale of held-for-sale assets and net realisable inventoryadjustmentsCash generated from operating activitiesFive-year history (R million)Net asset value per share**Five-year history (cents)1 2001 0009461 000967800800600400200380415319194600400200488 4924082750 200920102011201220130 2009 2010 2011 2012 2013** Net asset value was previously calculated on total equity and not onequity attributable to the ordinary shareholdersClassified injury frequency rate***Five-year historyNet debt to equity gearingFive-year history (%)3,02,52,01,51,00,52,510 20091,781,171,650,292010 2011 2012 201380 756040200 2009432010212011222012292013*** Per million man hours workedRevenueFive-year history (R million)Headline earnings per shareFive-year history (cents)4 0003 0002 0001 0002 9902 1792 402 2 5122 085120100806040200109,10,616,121,7(27,0)0 20092010 2011 2012 2013(20)(40) 20092010 2011 2012 2013

Sentula Mining Limited Integrated Annual Report 2013Five-year review032013 2012 2011 2010 2009Revenue (R’000) 2 085 026 2 512 415 2 402 375 2 178 601 2 989 835Operating (loss)/profit (R’000) (871 223) (420 071) 184 903 128 986 479 669Earnings before interest, tax, depreciation andamortisation (EBITDA) (R’000) 227 286 382 879 544 514 427 655 803 069Cash generated from operations (R’000) 194 234 319 156 415 311 380 086 967 385Attributable (loss)/earnings (R’000)* (875 017) (516 703) 35 127 239 138 278 531(Loss)/Earnings per share (cents) (150,6) (88,9) 6,0 55,8** 121,1Headline (loss)/earnings per share (cents) (27,0) 21,7 16,1 0,6 109,1Tax rate (%) 3,4 (8,5) 57,9 16,0 17,7Dividend per share (cents) – – – – –Dividend cover (times) – – – – –Net asset value per share (cents)*** 275 408 492 488 946Net asset value per share (cents) – as previouslydisclosed n/a 418 505 502 984Total assets employed (R’000) 2 852 664 3 855 635 4 412 021 5 051 291 4 950 431Return on shareholders’ equity (%) (44,1) (19,8) 1,2 9,5 13,7Gearing (%) 29 22 21 43 75LiquidityhhCurrent ratio**** 0,92 2,48 1,55 1,18 0,72hhCurrent ratio**** excluding current portion oflong-term borrowings 2,21 4,03 2,02 2,18 1,48hhAcid test ratio**** 0,72 1,84 0,96 0,93 0,47SafetyhhClassified injury frequency rate 0,29 1,65 1,17 1,78 2,51* Post impairment of R511 341 (2012: R591 171; 2011: R71 476)** Weighted for December 2009 rights issue*** Net asset value was previously calculated on total equity and not on equity attributable to the ordinary shareholders**** Current assets include assets held-for-sale

Sentula Mining Limited Integrated Annual Report 201304Group at a glanceBusiness segments Our companies Acquired in Revenue Operating results (loss)/profitBenicon Opencast Mining(“Benicon”)June 2006Continuingopencast miningClassic Challenge Trading(“CCT”)October 2007R1 053million(R80 million)Discontinuingopencast miningOverburdendrilling andblastingExplorationdrillingMobile cranehireMegacube R66 million (R288 million)JEF Drill and Blast (“JEF”) June 2007 R279 million R38 millionGeosearch October 2006 R750 million (R368 million)Ritchie Crane Hire (“Ritchie”) April 2007 R65 million R33 millionEquipment,spares andengineeringBenicon Sales June 2006Caston January 1999R58 million(R18 million)Coal mininginvestmentsExisting producer:Benicon Coal – NkomatiAnthraciteDevelopment and exploration:Sentula Exploration (SA)Benicon Mining (SA)Sentula Coal (SA)Exploration: Mabapa Mining(SA)March 2008 R0,9 million (R13 million)– (R0,5 million)April 2008April 2007 – –Explorations:Jonah Coal/Aquila Resources(Botswana) – Asenjo EnergySeptember 2008 – –Jonah Coal Indongo (Zambia) April 2008 – –

Sentula Mining Limited Integrated Annual Report 201305Operations and informationMajor clientsBenicon provides a full range of opencast mining services, covering themovement and management of all aspects of overburden removal and coalextraction to specified production budgets. This includes all drilling and blastingoperations as well as the management of mine rehabilitation programmes toEMPR specifications.CCT is a hard rock opencast mining services company with core competencies inthe ferrochrome industry. CCT’s operations are in the process of beingconsolidated into Benicon.Anglo American Thermal Coal, AngloAmerican Platinum, Xstrata CoalSamancorThe company is in the process of being wound down and all its assets weredisposed of during the year.–JEF was established as a standalone entity in support of the opencast miningoperations and to meet the shift towards outsourcing this function. The companyis a specialised drilling and blasting entity, which uses 46 drilling rigs in theopencast mining sector, predominantly in coal.Benicon, Exxaro, Liveiro, Optimum Coal,BHP Billiton, Moncada EnergyGeosearch is one of the largest African exploration drilling companies, owning79 exploration drilling rigs.Anglogold Ashanti, Anglo AmericanPlatinum, Billiton, Lonmin, ImpalaPlatinum, Vale, NewcrestRitchie utilises 24 medium to heavy duty mobile cranes with capacities that rangefrom 7 to 220 tonnes for the provision of craneage services.Anglo American Thermal Coal, Eskom,Xstrata Coal, Highveld Steel, SamancorFerrochromeBenicon Sales focuses on the procurement of equipment and spares, for therefurbishment and maintenance of the opencast plant and equipment fleet.Caston was an engine rebuild facility and its activities are being incorporatedinto Benicon.hhAnthracite resource base in excess of 80 million tonnes.hhRobust market for anthracite from this region.hhMpumalanga Economic Growth Agency – 40% minority shareholder.hhHolder of Schoongezicht prospecting right and Bankfontein mining right. These rights are in the process ofbeing disposed.hhHolder of an equity investment in a potential coking coal prospect in the Limpopo province.hhCurrently a 15% equity investment which can be increased to a 75% interest for further capital investment.hhCombined resources estimated to be 50 million tonnes.hhPotential for high demand and growth in coal generated power and energy opportunities in the region.hhExploration drilling continues to be undertaken consistent with the work programmes.hhInitiatives are being pursued to unlock the value of these prospects.hhTarget project area of approximately 5 000 ha in southern Zambia. The initial mining licence has been awarded.hhInitiatives are being pursued to unlock the value of these prospects.

Sentula Mining Limited Integrated Annual Report 201306Strategic updateSentula, with its suite of diversified service offerings,Value preservation of the Group’s mining servicesremains well positioned to take advantage ofbusiness in the short term through:contract mining services opportunities acrosshhinvestment in growth opportunities in its drillingsouthern Africa.and blasting and mobile crane hire businesses;hhconsolidations of its bulk earthmoving businessesand the extraction of operational efficiencies;hhrestructuring of its exploration business to takeadvantage of a recovery in the exploration sector;hhmonetisation of the Group’s stakes in theremaining coal assets; andhhensuring financial robustness in the prevailingeconomic environment.Through the Group’s African footprint, Sentula is wellSustainable growth in the medium term off the backpositioned to capitalise on opportunities across theof:continent.hhrecovery in global demand for resources isexpected to continue driving interest in Africa andits potential as a new source of supply;hhestablished African asset, knowledge and resourcebase; andhhexisting business structures in key jurisdictions.Sentula aspires to be recognised as a responsibleand ethical organisation.Safety and environment preservation through:hhadherence to ISO and OHSAS standards;hhminimising injuries and fatalities; andhhensuring minimal environmental impact.Sentula remains committed to empowerment andtransformation.The strategic imperative is maintained through:hhmonitoring of the Group DTI scorecard; andhhutilising the Group’s BBBEE status to its benefit.

Sentula Mining Limited Integrated Annual Report 2013Group operational structure0783% 17%Shanike InvestmentsNo 171 ProprietaryLimited100%Sentula ContractingProprietary LimitedAnglo AmericanKhula Mining Fund20%Benicon Opencast MiningProprietary LimitedEmployees Trust 20%JEF Drill and BlastProprietary LimitedCommunity Trust 20%Classic Challenge TradingProprietary LimitedThebe MiningResources40%Ritchie Crane HireProprietary Limited74%Benicon MiningProprietary Limited26%100%Sentula Mining ServicesProprietary LimitedGeosearch Division74%Buenti DrillingProprietary Limited26%O.M. Tsehla DrillingContractors ProprietaryLimited100%Benicon SalesProprietary Limited100%Caston Plant SalesProprietary Limited100%Sentula MiningMauritius Limited100%Sentula Mining ServicesMauritius LimitedSentula Mining VenturesMauritius Limited100%Geosearch Non-SouthAfrican Operating Entities15%Mabapa MiningProprietary Limited85%Local shareholders100%Benicon CoalProprietary Limited60%Nkomati AnthraciteProprietary Limited40%Mpumalanga EconomicGrowth Agency

Sentula Mining Limited Integrated Annual Report 201308Capital expenditureR196,5millionnet capital (“capex”)invested during the yearunder review.Benicon:Invested net capex tothe value ofR85,9million,predominantly on thereplacement of existingequipment with newequipment comprisingthree articulated dumptrucks (“ADTs”) and anexcavator.CCT:Invested in thereplacement of twoADTs, an excavator, awheel-loader and acrusher amounting tonet expenditure ofR25million.JEF:Invested net capex tothe value ofR23million,for the replacement oftwo new drilling rigsand the acquisition ofsupport equipment.Geosearch:R47,8millioninvested to increasethe drilling capacity inMozambicanexploration growth.

Sentula Mining Limited Integrated Annual Report 201309Ritchie:InvestedR15,6millionfor the expansion of itscrane fleet and supportvehicles.Corporate services:The disposal of theNWN assets resulted ina capex inflow of(R1,3million).Coal mining:R0,5millionspent on improvedsecurity at NkomatiAnthracite.Budgeted capex ofR189,9millionfor the 2014 financialyear has been curtailedto R55 million due tothe prevailing economicenvironment and growthexpectations in theopencast miningsubsidiaries.

Sentula Mining Limited Integrated Annual Report 201310DirectorateExecutive directorsRobin Berry Deon Louw Pat ModisaneNon-executive directorsJonathan Best Cor van Zyl Kholeka MzondekiRain ZihlanguRalph Patmore

Sentula Mining Limited Integrated Annual Report 201311Executive Committee*Grace Chemaly Ina Cross Catherine Wolmarans Philip van VuurenKhumo Mphake Lauren Flinders Gideon van Heerden Elsa DevenishAllan Hepburn Johan Pieterse Alan Lynn* Details of the Executive Committee members are disclosed on page 35.

Sentula Mining Limited Integrated Annual Report 201312Directorate continuedExecutive Committee continuedMacy Sidu Mike Fitzgerald Johann LemmerMarthinus de JagerDanie Jacobs

Sentula Mining Limited Integrated Annual Report 201313Executive directorsRobin (RC) Berry (51)BSc (Mining) EngineeringExecutive director: Chief Executive OfficerAppointed: 2 January 2007Board committee membershipMember of the Social and Ethics Committee and attendsvarious Board committee meetings ex officio.Skills, expertise and experienceRobin joined the Company as Chief Operating Officer inJanuary 2007, and was promoted to Chief ExecutiveOfficer with effect from 1 December 2007. Robin wasformerly Chief Executive Officer of Operations at AngloCoal SA, a division of Anglo American South AfricaLimited. He has over 20 years’ experience in the miningindustry at both managerial and operational levels.Deon (GP) Louw (51)CA(SA), HDip Tax Law (Wits), AMCT (UK), CFACharterholderExecutive director: Chief Financial Officer/FinancialDirectorAppointed: 1 August 2007Pat (PP) Modisane (52)BA (Hons)Executive director: Transformation and Human ResourcesAppointed: 1 October 2008Board committee membershipChairman of the Social and Ethics Committee andattends various Board committee meetings ex officio.Skills, expertise and experiencePat was appointed as an executive director and Head ofTransformation and Human Resources with effect from1 October 2008 and Chairman of the Social and EthicsCommittee effective 8 March 2012.Prior to joining Sentula, he was the regional managerEmployee Relations and Transformation at Anglo CoalProprietary Limited. From 2005, it was his coreresponsibility to effectively manage employee relations,strategies, practices and stakeholder management.Previously, he was Human Resources Manager atKleinkopje, Greenside and New Vaal Collieries.Board committee membershipAttends various Board committee meetings ex officio.Skills, expertise and experienceDeon is a chartered accountant and chartered financialanalyst with extensive experience in mining finance. Hejoined Sentula in August 2007 from Shanduka Coal,where he fulfilled the role of Chief Financial Officer. Priorto joining Shanduka Coal, he was an independent adviserto the mining sector and for a number of years headedthe mining finance team at Investec Bank.

Sentula Mining Limited Integrated Annual Report 201314Directorate continuedNon-executive directorsJonathan (JG) Best (65)ACIMA, ACIS, MBAIndependent non-executive ChairmanAppointed: 1 July 2007 (Director)/28 February 2010(Chairman)Board committee membershipChairman of the Nomination Committee, Chairman ofthe Investment Committee and member of theRemuneration Committee.Skills, expertise and experienceJonathan has over 40 years’ experience with companiesassociated with the mining industry. He brings strongfinancial expertise and experience from his previous roleas Chief Financial Officer of AngloGold Ashanti Limited.He is currently a non-executive independent director,Chairman of the Audit Committee and member of theRemuneration Committee of Polymetal International PLC,a Russian-based mining company listed on the LondonStock Exchange, a non-executive independent directorand chairman of the Audit Committee of MetairInvestments Limited, non-executive Chairman andmember of the Remuneration Committee of BaubaPlatinum Limited, non-executive chairman of GoldstoneResources Limited (Jersey) and a member of its Auditand Remuneration Committees. He is also a nonexecutivedirector and Audit Committee member ofAngloGold Ashanti Holdings Limited (Isle of Man).Cor (CJPG) van Zyl (66)CA(SA)Independent non-executive directorAppointed: 1 July 2010Board committee membershipChairman of the Audit and Risk Committee and memberof the Investment Committee.Skills, expertise and experienceCor is a chartered accountant with 22 years’ experiencein the auditing profession as a partner of Coopers &Lybrand, before moving into commerce for a furtherperiod of 14 years. This included five years as FinancialDirector of Afrox Healthcare Limited and six years asFinancial Director of African Oxygen Limited until hisrecent retirement.Currently Cor also serves as a non-executive director onthe Board and Audit Committee of various companies.Kholeka (KW) Mzondeki (46)ACCA (UK), BComm, Diploma in InvestmentManagement (RAU)Independent non-executive directorAppointed: 1 July 2010Board committee membershipMember of the Audit and Risk Committee.Skills, expertise and experienceKholeka is a chartered accountant and Council memberof ACCA, United Kingdom. She has a Bachelor ofCommerce degree and a Diploma in InvestmentManagement. Her experience includes being a riskmanager at Eskom, Director and General Manager ofFinance responsible for sub-Sahara Africa at 3M, ChiefFinancial Officer and General Manager of CorporateServices at Mintek and Financial Director at MasanaPetroleum Solutions.In summary, Kholeka has over 20 years’ experience ingovernance and financial management, holdingexecutive roles of Financial Director and Chief FinancialOfficer in various organisations including a Fortune500 company. She used to serve on the Board and AuditCommittee of Reunert, listed on the JSE, and currentlyserves on the Telkom Board among other directorships.In 2008 she was a finalist in the Nedbank/BWA BusinessWomen of the Year.Rain (D) Zihlangu (46)BSc (Mining) Engineering, MBAIndependent non-executive directorAppointed: 1 July 2010Board committee membershipMember of the Audit and Risk Committee and memberof the Investment Committee.Skills, expertise and experienceRain obtained his first degree in Mining Engineeringthrough the University of the Witwatersrand in 1989 tobecome the second black mining engineer in SouthAfrica. He joined the Anglo American Corporationgraduate training programme at Vaal Reefs Explorationand Mining Company and obtained his mine managersgovernment certificate of competence.His professional membership includes South AfricanInstitute of Mining and Metallurgy, Engineering Councilof South Africa and Association of Mine Managers ofSouth Africa.

Sentula Mining Limited Integrated Annual Report 201315Along with completing his MBA at the Wits BusinessSchool, Rain has worked in both government and theprivate sector and is well known in the mining industry,having most recently served as Chief Executive Officerof Alexkor. He has extensive mining experience and hasbeen involved in major transactions including a leadingrole in the implementation of Exxaro’s empowermenttransaction. He is also a Board and Committee memberof Exxaro Limited and Royale Energy Limited.Ralph (RB) Patmore (61)BCom (Wits), MBL (SBL), Stanford Executive Programme(Stanford University USA) Accredited Associate of theInstitute for Independent Business InternationalIndependent non-executive directorAppointed: 25 January 2012Board committee membershipMember of the Remuneration Committee, member ofthe Social and Ethics Committee and member of theNomination Committee.Skills, expertise and experienceRalph obtained his BCom and MBL from the University ofthe Witwatersrand and Unisa Graduate School ofBusiness Leadership respectively, and was the co-founderof Iliad Africa Limited, a listed company focused onbuilding materials, where he served as Chief ExecutiveOfficer for 10 years. He has also served as ManagingDirector to various companies and held the position ofdirector on the Board of Group Five Limited, a listedcompany operating in the integrated constructionservices and materials sector.Hugh (EHJ) Stoyell (68)PR Eng Bsc (Mining) Engineering MBL FSAIMMIndependent non-executive directorAppointed: 30 September 2005Resigned: 17 September 2012Board committee membershipChairman of the Remuneration Committee, member ofthe Nomination Committee and member of theInvestment Committee.Skills, expertise and experienceHugh is a professional engineer with over 50 years’experience in the mining industry.Prior to retiring, he was Chairman and Managing Directorof Duiker Mining Proprietary Limited, formerly one ofSouth Africa’s major coal exporters listed on the JSE. Hehas held directorships for a number of mining andrelated companies since 1976, including companies listedon the Johannesburg and London Stock Exchanges, andis currently non-executive Chairman of Katanga Mining,listed on the Toronto Stock Exchange, a non-executivedirector of KFL Limited (British Virgin Islands) and anon-executive director of Global Enterprises CorporateLimited (British Virgin Islands).Currently Ralph is also the lead independent nonexecutivedirector, member of the Audit Committee, andChairman of the Remuneration Committee of AccéntuateLimited; lead independent non-executive director,member of the Audit Committee, member of the RiskCommittee, and Chairman of the RemunerationCommittee of ARB Holdings Limited; Chairman of theAudit and Risk Committee and Chairman of theRemuneration Committee of Mustek Limited; and leadindependent non-executive director, memberof the Audit Committee and Chairman of theRemuneration Committee of Calgro M3 Limited.

Sentula Mining Limited Integrated Annual Report 201316Chairman’s reportsector, the Group’s extensive exposure to coal hascontinued to provide a high degree of defensiveness,with respect to its bulk earthmoving and related miningservices businesses. Despite the impact of thedepreciation in the US Dollar denominated price ofseaborne traded thermal coal, declining demand for thecommodity, both domestically and internationally, andthe weakening Rand/US Dollar exchange rate, this sectorhas continued to enjoy moderate growth.The local coal industry continues to be buoyed byEskom’s demand and improving export logistics.The platinum and gold sectors, however, remain undersevere pressure, resulting in the curtailment of manyexploration drilling programmes and a consequentialadverse effect on Geosearch’s African operations.During the fourth quarter of the 2013 financial year, theRand/US Dollar exchange rate depreciated sharply,providing support for South African coal producers andearnings associated with Geosearch’s remaining foreignexploration drilling operations.Dear Shareholders,In many respects, the 2013 financial year has beenchallenging for Sentula. The reduction in explorationactivity in the Platinum Group Metals (”PGM”) sector,followed shortly thereafter by cutbacks in the gold sector,have had a profound, adverse impact on the drillingactivities of Geosearch’s business. Even though thedemand for contracted bulk earthmoving services remainsstrong, pricing, input costs and productivity havecontinued to put pressure on operating margins, withinSentula’s opencast mining businesses.In August 2012, the Board of Directors (“the Board”) tooka decision to finalise the winding down of the Megacubebusiness, with the termination of the Keaton Vangatfonteincontract and the disposal of its remaining assets, onauction. Closure of this subsidiary will reduce the burdenthat it has had historically on the Group’s earnings.Despite the challenging operating environment, JEF andRitchie continued to perform in line with expectations.Macroeconomic environmentNotwithstanding the ongoing global economicuncertainty and resultant adverse impact on the miningGroup performanceAlthough all operating subsidiaries were operationallyprofitable, prior to impairments and inventoryadjustments, the post-tax results for 2013 weredisappointing given the substantial capital impairmentsand inventory adjustments. Revenue decreased toR2 085 million from R2 512 million, and the operatingloss increased to R871 million compared to the prioryear’s operating loss of R420 million. The 2013 operatingloss resulted primarily from the impairment of certainassets in Benicon and Geosearch, the impairment ofgoodwill that arose on Geosearch’s acquisition, the writedown of inventory in Geosearch and the loss incurred onthe sale of assets in Megacube.Headline earnings per share decreased from 21,7 centsto a headline loss per share of 27,0 cents.Global economic conditions continue to affect demandfor most of the services provided by Sentula as thevisibility of new mining and exploration projects isreduced by investment uncertainty and fundability. Whileconditions within the mining services sector are expectedto remain challenging for the short to medium term,opportunities, as a result of incremental productiondemands and limited capital funding, are expected tocontinue to favour the contractor model.Given the current visibility of market conditions and theGroup’s intent to preserve its cash resources, the Boardhas decided not to declare a dividend for the 2013financial year.

Sentula Mining Limited Integrated Annual Report 201317StrategySentula, through its diversified mining services provisionand the expertise and exposure gleaned from theexperience gained through its African explorationbusiness, remains committed to delivering on its focusedcontinental growth strategy.One of the Board’s objectives, for the year under review,was to ensure that the underlying South Africansubsidiaries were sustainably empowered to the requisitelevel, thus ensuring that current clients and contracts inthe mining industry are retained and that new tenderscan be secured. The Group’s empowerment structure wasfurther strengthened, through the introduction of ThebeMining, as its strategic partner.We will continue to pursue initiatives to contain costs andstrategically position the mining services businesses fororganic growth in the medium term. To this end thebusiness models of Benicon and Geosearch werereviewed and will be modified in order to generatesustainable returns in a difficult market. The Companycontinues with the disposal of the Group’s coal portfoliowith the intent of unlocking value and enhancing theGroup’s cash resources.Board and corporate governanceRecent legislation changes such as the South AfricanCompanies Act (2008) and the strengthening of theCompetition Act indicate a higher level of vigilancethan ever before in South Africa.The Board operates under the terms as stipulated bythe Board Charter, which regulates the rolesand responsibilities of the directors.We, as the Board, will ensure compliance with bestpractice and the governance guidelines outlined in theKing III Report. We will ensure that the Company remainstransparent and adheres to high levels of disclosure.At the commencement of the last financial year, theBoard comprised executives Robin Berry (CEO),Deon Louw (CFO) and Pat Modisane (Head ofTransformation and HR), while non-executive directorscomprised Hugh Stoyell, Rain Zihlangu, Cor van Zyl,Kholeka Mzondeki, Ralph Patmore and myself.Hugh Stoyell tendered his resignation from the Board,with effect from 17 September 2012, after serving as anindependent non-executive director since 2005.The Board now comprises the following individuals:DirectorJonathan BestRobin BerryDeon LouwPatrick ModisaneRain ZihlanguCor van ZylKholeka MzondekiRalph PatmoreDesignationIndependent non-executiveChairmanCEO executive directorCFO executive directorExecutive directorIndependent non-executive directorIndependent non-executive directorIndependent non-executive directorIndependent non-executive directorSustainabilityTransformationSentula remains committed to empowerment andtransformation as a strategic priority for the Group. Weretained an independently audited Level 5 BBBEE Grouprating in October 2012, with Sentula’s South Africanmining services subsidiaries now having an effective25,04% BBBEE ownership and a Level 4 rating.Subsequent phases of this BBBEE transaction, concludedduring the last quarter of 2012, included theempowerment of the Group’s coal assets and theintroduction of Thebe Mining as a strategicempowerment partner.Corporate social investmentSentula views corporate social investment as a vitalresponse to socio-economic development which isimperative in South Africa. Our intention is to empowerpreviously disadvantaged individuals and uplift thecommunities in which we operate. In the 2013 financialreporting period, the Group contributed R1,2 million tosocio-economic and enterprise development initiatives.Safety, health and environmentSafety, health and the environment remains a top priorityfor the Board and Group as a whole. Continued effortshave delivered positive results in this area, with nofatalities in the 2013 financial year. We are all committedto enforcing compliance with the requirements of theSouth African Occupational Health and Safety Act 1993(No 85 of 1993) and Mine Health and Safety Act 1996(No 29 of 1996). Through renewed initiativesmanagement remains dedicated to identifying potentialhazards and reducing risks at all our operations.The Board is grateful to Hugh for the significantcontribution he made during this period.

Sentula Mining Limited Integrated Annual Report 201318Chairman’s report continuedOur efforts in addressing environmental issues areconstantly developing and we are committed toprotecting the environment. A baseline for emissionsdata was established across all the Group’s operations.Targets and initiatives to reduce the quantum and impactof emissions have been introduced across the Group.In the year under review, the subsidiaries continued tomeet their objectives, with respect to the maintenanceand attainment of international certification of theirsafety, environmental and training systems.OutlookLooking at the broader picture we see the southernAfrican and worldwide demand for energy and coalremaining intact for the foreseeable future. WithGeosearch having been adversely impacted by thecurtailment of exploration drilling in the PGM and othersectors, its inherent flexible business model andresponsiveness to the sector’s volatility will enable it torestructure its business, while maintaining its establishedAfrican footprint. New mining projects in Africa, despitedelays in the short to medium term, will continue topresent opportunities for Sentula’s mining servicesbusinesses. Positive and sustainable demand for SAthermal coal comes from the significant local demandunderpinned by Eskom’s expansion plans.For the year ahead, we believe that, despite toughtrading conditions, the Group will deliver modestearnings from four of its operating mining servicessubsidiaries, while sustaining its exploration business.While we anticipate materially lower gearing at the endof the 2014 financial year, the Board is cognisant thatcurrent debt levels are excessive in relation to theGroup’s forecast cash generation. The Board hasundertaken to pursue a number of initiatives to reducethe debt as disclosed in note 34 of the Group’s annualfinancial statements. In addition, our emphasis in the2014 financial year will be to preserve the establishedmining services businesses and dispose of the Group’sinterest in its coal portfolio to unlock shareholder value.Following the achievement of these objectives, weanticipate future moderate growth from the Group’soperations, the rate of which will be determined by therecovery in the mining services sector as a whole.AppreciationI am grateful to the Board for their collective andindividual contributions and extend my appreciation toall for their hard work and continued commitment. In myappreciation, I wish to acknowledge our clients andsuppliers for their support and our advisers for theirguidance throughout the year.My gratitude goes to the entire management team, ledby CEO, Robin Berry and CFO, Deon Louw who togetherwith Pat Modisane, have steered us through thischallenging year.Finally, I wish to express sincere appreciation to ourshareholders and employees and to thank you for yourcontinued support through difficult times.Jonathan BestNon-executive Chairman13 September 2013

Sentula Mining Limited Integrated Annual Report 201319

Sentula Mining Limited Integrated Annual Report 201320Chief Executive Officer’s reportKey eventshhA substantial decrease in gold and platinumprices along with labour related disruptions in theSouth African mining industry have resulted in asignificant reduction in exploration expenditureand a consequent downscaling of Geosearch’soperations.hhThe introduction of Thebe Mining as a strategicempowerment partner.hhThe initiation of the disposal process of the coalassets the proceeds of which will be applied to adebt reduction.hhThe disposal of the remaining Megacubeequipment which, while resulting in a book loss,realised net cash of R103,3 million.hhContinuing stable demand in the contract miningsector although margins came under pressure.IntroductionSubdued global economic activity continues to weighheavily on commodity prices in the PGM, gold andseaborne traded metallurgical coal sectors, significantlyreducing the visibility of exploration spend in thesecommodities across the continent. Sentula’s bulkearthmoving businesses, however, through their exposureto the local coal sector, have experienced a far morepredictable demand profile albeit with margins beingunder pressure. Having disposed of the remaining assetsin Megacube and initiated a process to monetise theGroup’s interests in its various coal investments, Sentulais now well positioned to focus on its core miningservices businesses.The Group’s results for the financial year were adverselyimpacted by a number of factors, including impairments,inventory net realisable value adjustments, and lossesincurred on the disposal of Megacube’s remaining plantand equipment as further alluded to in the ChiefFinancial Officer’s report on page 24.Strategic reviewThe Group’s strategic vision remains one of sustainablegrowth by being a recognised and focused miningservices provider across the African continent. Despiteunprecedented volatility in the sector and the limitedvisibility of exploration work, in the short term, theGroup’s firm intention remains to focus on the valuedrivers in its diversified service businesses. This will beachieved through the three-pronged approach ofconsolidating the operations of the bulk earthmovingbusinesses, driving operational efficiencies and investingin growth opportunities in the drilling and blasting andmobile crane hire businesses. In conjunction with this theexploration business will be maintained, through prudentrestructuring, in order to take advantage of potentialgrowth on the back of a recovery in the mineralexploration sector.The strategy will be further enhanced through thefinalisation of the disposal of the Group’s interests invarious coal assets.Sentula’s exposure to the coal and energy sector,coupled with its diversified service offering, client base,mineral exposure and geographical spread will continueto provide a solid platform for developing the businessinto the future.Operational reviewMining servicesThe provision of mining services remains the core ofSentula’s business, with four operating divisions and fiveunderlying businesses. Volatility in the sector continuesto reduce the visibility of earnings, especially in the areaof exploration.Opencast mining servicesThe year under review has been characterised by stabledemand, but exacting trading conditions, as marginsremained under pressure across the opencast contractingsector and operating conditions deteriorated.

Sentula Mining Limited Integrated Annual Report 201321Having taken the operational management andequipment associated with the Keaton EnergyVanggatfontein contract over from Megacube during thefirst quarter of the financial year, Benicon managed toreplace the contract, following its termination in July2012, with the Anglo Platinum Mogalakwena Slangslootproject. Margins have continued to remain underpressure, in this business, as a result of poor contractpricing responsiveness to cost increases anddeteriorating trends in effective production time.Initiatives to address these issues have beenimplemented. Benicon’s capacity remains fully contractedfor the 2014 financial year, with its exposure to the coalsector being a natural hedge to the volatility experiencedin other commodities.With the award of the Samancor Spitskop contract toCCT in July 2012, work on site, following regulatorydelays, commenced in February 2013. Production fromthis site is in the process of being ramped-up, with fullproduction being anticipated, during August 2013.Demand for chrome ore, for the production offerrochrome, remains solid at the current time.Management is in the process of consolidating theoperations of CCT into Benicon, in order to leverage offthe synergies that are expected to flow therefrom. It isenvisaged that this consolidation will be completedduring the first half of the 2014 financial year.JEF experienced a drop in its revenue during the secondhalf of the financial year, following the termination ofcompleted contracts and a delay in the commencementof new replacement contracts. However, it is expectedthat capacity will be fully utilised during the 2014 financialyear. This business is competitively positioned to deliverreal growth for the foreseeable future.Discontinuing opencast mining servicesMegacube’s contracting business ceased at thebeginning of the 2013 financial year and the emphasisturned to the monetisation of the remaining assets. Thisculminated, following the redeployment of suitableassets across the broader Group and the utilisation oftrade-in proceeds on new and replacement Groupequipment, in an outright disposal of the remainingequipment at an unreserved auction on 27 March 2013.Exploration drillingThe downturn in the PGM sector had a significantlynegative impact on Geosearch’s South African operationsand necessitated the downscaling and restructuring ofthese operations during the year. During the latter part ofthe period under review, negative sentiment and projectdelays concerning coal investments in Mozambique alsoresulted in a further reduction in earnings and a scalingback of AguaTerra’s operations. Recently, Geosearch hasseen a reduction in the visibility of gold explorationactivity across its East, Central and West Africanoperations. This necessitated a further restructuring of itsinternational operations, which currently contributeapproximately 90% of Geosearch’s earnings.Mobile crane hireRitchie continued to perform well, supported by abalanced mix of contracted work and ad hoc craneageopportunities. This company continues to maintain itslevel of profitability, supported by its mix of cranes,strong competitive regional presence in the Emalahleni/Middelburg area, and diversity of clientèle in coal mining,steel and power generation sectors.Coal mining investmentsIn line with Sentula’s strategy to extract the valueinherent in its portfolio of diversified coal assets, theGroup continued to actively assess opportunities todivest of its interests in these assets. Sentula is currentlyinvested in five projects (three in South Africa, and one inBotswana and Zambia). These projects can be broadlydescribed as mining operations, comprising an operatingmine, near development properties (projects whichcould be operational within 18 to 24 months) andexploration areas.Mining operationsOperations at Nkomati Anthracite were placed on careand maintenance, by management, at the end of May2011, pending the resolution of regulatory andenvironmental issues. Following the approval by theDMR of the amended environmental managementprogramme, for the Madadeni open pit operation,application to the Department of Environmental Affairs,the seeking of condonation for certain permittedactivities and the issuing of the mine’s Integrated WaterUse Licence, the dewatering of the opencast operationbegan in November 2012. In preparation for theresumption of mining operations, the open pit has beendewatered and the infrastructure refurbished.Management continues to actively pursue opportunitiesto monetise the asset, through an outright disposal ofthe Sentula stake.Near development propertiesSentula has been granted new order prospecting rightsover portions of the farms Bankfontein andSchoongezicht, located in Mpumalanga. Exploration hasbeen completed and mining right applications have beensubmitted for both of the aforementioned properties,with the Bankfontein mining right having been granted inApril 2013. The disposal of the Schoongezicht propertyhas been concluded and will become effective onMinisterial approval being granted for its transfer.Several potential acquirers have been identified forthe Bankfontein property and management will worktowards finalising a transaction during first half of the2014 financial year.

Sentula Mining Limited Integrated Annual Report 201322Chief Executive Officer’s report continuedThe small-scale mining licence awarded to the Mulungwaproject in southern Zambia continues to be maintained,while potential opportunities to extract value from thisasset are assessed.Exploration areasThe Asenjo joint venture with Jonah Capital and AquillaResources, situated in Botswana, has continuedexploration activities on its tenements. The value of thelarge resource base is expected to be unlocked throughthe construction of rail infrastructure to port facilities inNamibia or Mozambique, the provision of which isenjoying renewed interest in the region. The joint venturepartners agreed to dispose of the Lechana prospect forthe sum of USD1,0 million during the 2013 financial year.With its partners, Sentula has engaged the services of anindependent adviser to pursue a process to dispose ofthe remaining assets in Asenjo.SafetyThe Group’s CIFR of 0,29 per million man hours worked isan 82% improvement on the prior year, with only threeclassified injuries being recorded for the year. Sentulacontinues to work closely with its clients to ensure thatinvestments in systems and structures, to support itsefforts in the safety arena, results in a risk reduction.Sentula acknowledges the right of its employees toreturn home without harm and that safety performancemust be regarded as a prerequisite and not only acompetitive advantage.AppreciationI would like to extend my appreciation to managementand their teams for their hard work, dedication andsupport during the year, resulting in the maintenance ofthe Group’s operational base during challenging times.My thanks is also extended to our clients and suppliersfor their continued and invaluable support and service,respectively.Robin BerryChief Executive Officer13 September 2013

Sentula Mining Limited Integrated Annual Report 201323

Sentula Mining Limited Integrated Annual Report 201324Chief Financial Officer’s reportThe backgrounds to these non-cash flow adjustments,which total R890 million, are as follows:hhthe impairment of plant and equipment of R187 millionarose in Benicon and Geosearch, following theidentification of a number of underperforming items ofplant and equipment due to either mechanical failureor technological obsolescence;hhthe impairment of held-for-sale assets of R15 millionand the loss on sale of the disposal of held-for-saleassets of R221 million relate to sales of Megacube’sremaining plant and equipment. This loss arose fromthe disposal of plant and equipment held byMegacube at a public auction held on 27 March 2013;hhgiven the severe downturn in the exploration activityexperienced in Africa during the second half of thefinancial year, Geosearch reviewed its forecast cashflows for the next five years and was compelled toimpair its goodwill of R300 million which arose at theacquisition of the business in the 2007 and 2008financial years;hhtermination of an exploration drilling programme inMozambique resulted in the impairment of capitalisedexploration expenditure of R9 million; andhhassociated with the impairment of Geosearch’smechanical drill rigs, related inventory was also writtendown. This inventory adjustment and a furtherprovision for obsolete and slow moving inventoryresulted in a total adjustment to the inventory carryvalue of R158 million.Performance overviewThe Group continues to experience volatile andchallenging trading conditions, especially in the explorationdrilling sector. Margin pressure is also being experienced inthe opencast mining sector, following negative realcontract rate increases and real cost increases. The Group’sdrilling and blasting and craneage businesses do, however,continue to perform well, notwithstanding the challengesbeing experienced in the mining sector.Group revenue declined by 17% to R2 085 million,relative to the prior financial year, largely as a result of thecurtailment of Geosearch’s exploration drilling activity inthe domestic PGM sector. The Group’s operating loss forthe year increased from R420 million to R871 million andwas impacted by both the sectorial-related operatingchallenges and the following impairments andadjustments to the carry value of assets:hhimpairment of plant and equipment: R187 million;hhimpairment of assets held for sale: R15 million;hhimpairment of goodwill: R300 million;hhimpairment of intangible assets: R9 million;hha loss on the disposal of assetsheld-for-sale: R221 million; andhhinventory valuation adjustments: R158 million.The equipment impairments and adjustments to the carryvalue of inventory resulted in a review of the expectedequipment lives, residual values, refurbishmentprogramme and the manner in which inventory isaccounted for on exploration drilling sites. Concomitantchanges have been made to policies to ensure theirresponsiveness and appropriateness in the prevailingeconomic environment.Net finance charges declined by R6,4 million fromR63,9 million to R57,5 million as the Group’s senior debtlevels declined from R709 million in the correspondingperiod to R544 million at the reporting date.The taxation charge declined from R42 million in theprior year to a credit of R31 million in the current year,as a result of the reversal of deferred tax on plant andequipment capital allowances. Cash taxes of R42 millionwere, however, paid relative to R27 million in theprior year.Predominantly as a result of the impairments andadjustments referred to in the preceding paragraphs, thenet loss after tax for the year increased from R532 millionto R900 million.

Sentula Mining Limited Integrated Annual Report 201325Earnings per shareAs a result of the decrease in headline earnings fromR126 million in the previous corresponding period to aheadline loss of R157 million in the current financial year,headline earnings per share declined from 21,7 cents to aheadline loss per share of 27,0 cents. The net loss for theyear increased by 69% to R900 million and resulted in thebasic loss per share increasing from 89 cents to 151 centsper share.No new shares were issued during the 2013 financialyear and the issued share capital remained at581 million shares.Statement of comprehensive incomeThe comprehensive loss increased from R504 million toR833 million in the 2013 financial year. Foreign exchangetranslation differences of R67 million were recognised inthe statement of comprehensive income, relative toR28 million in the prior financial year. The shift inGeosearch’s business, to a predominantly foreign-basedbusiness, and the depreciation in the Rand/US Dollarexchange rate, contributed to the increase in the foreignexchange translation difference in the current financial year.Segment analysisThe opencast mining and earthmoving segment,comprising Benicon, CCT and Megacube, experienced adecline in turnover of 23% to R1 119 million, primarily asa result of the termination of Megacube’s operatingactivities. The segment results, pre-impairments, declinedfrom R11 million to R7 million; however, the postimpairmentsresults improved from a loss of R580 millionin the prior year to a loss of R367 million in the currentfinancial year. Megacube’s results were impacted by costsassociated with the closure of its operations, whereasBenicon’s results were impacted by the termination of theKeaton Vangatfontein contract, operational problems atthe Mogalakwena mine and margin pressures thatresulted from cost increases. CCT’s results were adverselyimpacted by the delayed commencement of the Spitskopferrochrome contract for Samancor.The exploration and drilling segment, comprisingGeosearch’s operations, experienced a 13% decline inturnover to R750 million, relative to the prior financialyear. Curtailment of exploration drilling in the SouthAfrican PGM sector contributed to the decline inturnover. The pre-impairment loss of R115 millionincludes an inventory net realisable value adjustment ofR138 million. The post-impairment loss of R368 million forthe current financial year includes a plant and equipmentimpairment loss of R49 million and a goodwill impairmentloss of R204 million. Together with a further R96 milliongoodwill impairment in the corporate and other segmentservices segment, Geosearch’s entire goodwill ofR300 million was impaired in the 2013 financial year.The overburden drilling and blasting segment alsoexperienced a decline in turnover as certain of theircontracts terminated prematurely and thecommencements of substitute contracts were delayed.Turnover declined from R336 million to R279 million andresults from operating activities declined by 53% fromR80 million to R38 million.The crane hire segment grew turnover from R57 millionto R65 million and results from operating activities fromR30 million to R33 million, despite the challengingeconomic environment.Turnover in the equipment trading and spares segmentfell by 8% to R58 million but external sales increased toR16 million relative to R12 million in the prior year.Segment results increased from a loss of R2 million to aloss of R17 million following the recognition of a loss onthe sale of inventory of R19 million.Turnover from the coal mining segment reducedsubstantially to R1 million from R13 million in the prioryear as all sales of anthracite from the NkomatiAnthracite mine ceased. The pre-impairment loss ofR17 million increased to a loss of R26 million followingthe impairment of capitalised exploration expenditureincurred on a Mozambique prospect that did not yieldpromising drill results.The loss in the corporate and other services segmentincreased to R67 million from R36 million in the prior yearprimarily as a result of intercompany loan impairments ofR620 million, recognition of a profit of R530 million thatarose on the disposal of the designated subsidiaries andthe recognition of a related preference share dividend ofR35 million, following the implementation of the Group’sBBBEE transaction. The financial impact of both thesetransactions is eliminated on consolidation. Externalfinance charges reduced by R5 million due to the Group’ssenior debt reducing from R709 million to R544 millionat year-end.TaxationNormal taxation increased from R5 million in the 2012financial year to R61 million in the current financial yearbut was offset by a deferred tax credit of R89 millionrelative to the R37 million charge recorded in the priorfinancial year. This resulted in the net tax charge beingreduced from R42 million in the 2012 financial year to acredit of R31 million in the current financial year. Thereversal of the deferred tax credit of R89 million arose onthe substantial plant and equipment impairments andinventory net realisable value adjustments provided for inthe 2013 financial year.

Sentula Mining Limited Integrated Annual Report 201326Chief Financial Officer’s report continuedStatement of financial positionThe substantial impairments and losses on the sale ofplant and equipment incurred in the 2013 financial yearresulted in non-current assets reducing to R2 billion,relative to R2,4 billion at the end of the previouscorresponding period. Current assets also reducedproportionally to R854 million from R1 billion at the endof the prior financial year.Assets classified as held-for-sale declined to R2 millionfrom R389 million in the prior year following the sale ofMegacube’s remaining plant and equipment at anunreserved auction held on 27 March 2013.Non-current liabilities declined by 66% to R292 millionfollowing the reclassification of the long-term portion ofthe Group’s senior debt to current liabilities. Thisreclassification was required as a result of certaincovenant breaches not being condoned by the SBC priorto 31 March 2013 financial year-end. The SBC condonedthe breaches subsequent to year end; however, thereclassification resulted in current liabilities increasingfrom R571 million to R931 million.Capital structureThe Group’s total equity declined from R2,4 billion toR1,6 billion as a result of the post-tax losses incurredduring the 2013 financial year. The loss of R900 millionincurred in the 2013 financial year also resulted inretained earnings declining from a profit of R365 millionin the prior reporting period to a loss of R505 million atthe reporting date. While the Group’s debt declined fromR709 million to R549 million, the Group’s net debt toequity ratio increased from 22% to 29% as a consequenceof the lower 2013 equity base relative to the year-enddebt levels.The Group funds its capital expenditure by means of aSBC facility and a WesBank vehicle asset finance facility.The availability of these facilities is dependent onongoing compliance with a number of covenants,including, inter alia, a debt service cover ratio (“DSCR”)and a total debt to EBITDA ratio (“TDR”). The Group’sfuture sustainability and financial stability is dependentupon the ongoing condonation of these covenantbreaches, to the extent required during the course of the2014 financial year.At 31 March 2013, the Group breached the DSCR andTDR covenants and was not granted timeouscondonation by the SBC, resulting in the SBC andWesBank debt being classified as a current liability atyear-end. This reclassification explicates the increase inshort-term loans and borrowings by R324 million, relativeto the prior financial year. Subsequent to year-end,condonation was received for the March 2013 breachesand condonation has also been received from the SBCfor the anticipated June and September 2013 DSCR andTDR covenant breaches. The Group has fully met its June2013 instalment and prepaid approximately 50% of theSeptember 2013 instalment of R69 million on 2 August2013. The balance of this instalment amounting toR32 million is due and payable on 30 September 2013.The relationship between cash generation from operatingactivities of R94 million and compulsory debt redemptionof R234 million in the 2013 financial year has, however,deteriorated to such an extent that the Group’s existingsenior debt redemption profile is unsustainable in the2014 financial year. The Board acknowledges that, in thecontext of the prevailing economic environment andoperating conditions, the Group‘s debt is excessive inrelation to the Group’s forecast cash generation and theBoard has undertaken to pursue a number of initiativesto reduce the SBC debt by approximately R150 millionbefore 31 December 2013. The initiatives beingconsidered by the Board include the following:hhdisposal of the Group’s coal assets;hhcontinued disposal of the surplus plant and equipmentwithin the Group;hhthe refinancing of the SBC facility by means of a debtcapital market instrument;hhthe refinancing of the SBC debt;hhother appropriate means of reducing the debt; andhha combination of the above.Given the existing excessive debt levels, further breachesin the DSCR and TDR are anticipated during the 2014financial year and the Company’s viability as a goingconcern is accordingly dependent on ongoingcondonation of these breaches by the SBC. This risk wasemphasised by the Group’s auditors in their opinion at31 March 2013 and is further discussed in note 34 to theGroup’s annual financial statements.Property, plant and equipmentThe Group’s capital expenditure declined by R77 millionto R215 million relative to the previous correspondingperiod, with the bulk of the capital expenditure ofR120 million being invested in the opencast andearthmoving segments.Investments, goodwill and intangible assetsThe Group’s mineral right holdings of R410 millioncomprise R355 million and R55 million which areattributable to the Group’s interests in the NkomatiAnthracite mine and the Bankfontein prospecting right,respectively.Intangible assets, which comprise capitalised explorationcosts, declined by R2 million relative to the prior financialyear as a consequence of the translation of foreignincurred expenditure.Goodwill declined from R413 million in the prior year toR121 million in the financial year under review, as a resultof the impairment of goodwill attributed to Geosearch’s

Sentula Mining Limited Integrated Annual Report 201327acquisition. The residual goodwill of R121 million isattributable to the acquisition of CCT, JEF, Ritchie andthe Group’s 50% interest in Jonah Coal Mauritius, whichholds an interest in the Botswana mining tenements.Restricted investments of R8,1 million comprise cashdeposits held by a financial intuition as security forenvironmental guarantees, issued to the DMR, for miningactivities conducted at the Nkomati Anthracite mine.Working capitalGroup liquidity, gearing levels and financial risk aremanaged centrally by means of a Group treasuryfunction. As a consequence of the deterioration inoperating results, the Group‘s net working capitalposition deteriorated from R498 million at the prioryear-end to R446 million at the reporting date. Thecurrent ratio declined from 2,92 times to 2,21 times andthe quick ratio declined from 2,99 times to 1,72 times,relative to the prior year. The net working capital cycledeclined from 70 days to 57 days, primarily as aconsequence of the substantial reduction in inventoryholdings relative to the prior financial year.Subsequent to year-end, Sentula received the full auctionproceeds of R118 million. Furthermore, following theconclusion of a settlement with the Marinvia Trust,R35 million of the R40 million settlement was received.The Group bridges any working capital deficits utilisingits general banking facility from Standard Bank with alimit of R140 million. This limit has, in line with thereduction in the magnitude of the Group’s receivables,been reduced to R95 million with effect from the end ofJuly 2013.Cash flow and net cash positionThe Group’s cash generation deteriorated markedlyduring the 2013 financial year with cash flows fromoperations, before changes in working capital andprovisions, declining from R398 million to R177 millionand net cash from operating activities declining fromR230 million to R94 million, relative to the priorfinancial year.Debt of R234 million was repaid in the 2013 financial yearrelative to R143 million repaid in the prior year, whereasdebt of only R74 million was raised in the 2013 financialyear relative to the R147 million raised in the prior year.The net cash effect of debt repaid and advanced was aR160 million outflow in the financial year under reviewrelative to a R5 000 outflow in the 2012 financial year only.The relationship between cash generation from operatingactivities of R94 million and compulsory debt redemptionof R234 million in the 2013 financial year deteriorated,resulting in the Group’s existing senior debt redemptionprofile not being sustainable in the 2014 financial year.The Board has accordingly embarked on a number ofinitiatives, alluded to in the preceding paragraphs andnote 34 to the Group’s annual financial statements, toreduce the debt by approximately R150 million in theshort term.Cash and cash equivalents declined by R142 million inthe 2013 financial year, relative to a R93 million increasein the prior year, resulting in cash and cash equivalents at31 March 2013 of R53 million, relative to R180 million atthe prior year-end.Dividend declarationIn light of the Group’s existing debt and liquidityposition, the Board has decided not to declare adividend in the 2013 financial year.Deon LouwChief Financial Officer13 September 2013

28Sentula Mining Limited Integrated Annual Report 2013

Sentula Mining Limited Integrated Annual Report 2013Governance reports 29The governance report section includes the following:hhCorporate governance report – page 29hhRisk management report – page 37hhIT report – page 41hhRemuneration report – page 41hhKing III checklist – page 44Corporate governance reportIntroductionThe Board of Directors (“the Board”) of Sentula andsenior management are committed to the higheststandards of corporate governance and take pride intheir high moral and ethical business standards,accompanied by sound and transparent businesspractices.As corporate governance is constantly evolving, Sentulacontinually focuses on seeking ways to improve on itscorporate governance standards. The Board iscommitted to and applies the principles contained inKing III as more fully disclosed on pages 44 to 46, and indoing so, continuously strives to achieve corporategovernance best practice.The Board, assisted by the Audit and Risk Committee,and the newly formed Social and Ethics Committee, isresponsible for overall corporate governance andmonitors compliance with all applicable laws, rules,codes, standards and the Listings Requirements, andensures ongoing improvement in the Group’s adherenceto the principles set out in King III. The CompanySecretary is responsible for assisting the Board inmonitoring compliance and the day-to-day managementof corporate governance.Board of DirectorsStructure and role of the BoardThe Board has a unitary structure and comprises eightmembers, the majority of whom are independentnon-executive directors. The Board considers all of thenon-executive directors to be independent.Determination of independence is guided by King III, theCompanies Act, the JSE Listings Requirements andcorporate best practice. The profiles of the members ofthe Board are set out on pages 13 to 15 of this IntegratedAnnual Report.The roles of the non-executive Chairman and the ChiefExecutive Officer are separated in accordance with theBoard’s policy of division of responsibilities. This ensuresa balance of authority and precludes any one directorfrom exercising unfettered powers of decision-making. Inaddition, the Board complies with the requirements ofKing III insofar as the composition of its sub-committeesis concerned.A Board Charter, which is reviewed annually, has beenadopted to guide the Board in governance issues andsets a framework within which the Board functions. TheBoard Charter sets out the Board’s duties andobligations, which include, inter alia, to:hhact as the focal point for, and custodian of, corporategovernance by arranging its relationship withmanagement, shareholders and other stakeholders ofthe Company along sound corporate governanceprinciples;hhappreciate that strategy, risk, performance andsustainability are inseparable and to give effect tothis by:• contributing to and approving the strategy;• satisfying itself that the strategy and business plansdo not give rise to risks that have not beenthoroughly assessed by management;• identifying key performance and risk areas;• ensuring that the strategy will result in sustainableoutcomes; and• considering sustainability as a business opportunitythat guides strategy formulation;hhprovide effective leadership on an ethical foundation;hhensure that the Company is and is seen to be aresponsible corporate citizen by having regard not onlyto the financial aspects of the business of theCompany but also to the impact that businessoperations have on the environment and the societywithin which it operates;hhensure that the Company’s ethics are managedeffectively;hhensure that the Company has an effective andindependent Audit and Risk Committee;hhbe responsible for the governance of risk;hhbe responsible for information technology (“IT”)governance;hhensure that the Company complies with applicablelaws and considers adherence to non-binding rulesand standards;hhensure that there is an effective risk-based internalaudit;hhappreciate that stakeholders’ perceptions affect theCompany’s reputation;hhensure the integrity of the Company’s IntegratedAnnual Report;hhact in the best interests of the Company at all times byensuring that individual directors:• exercise their fiduciary duties with the necessarycare, skill and diligence;• adhere to legal standards of conduct;• practice objective judgement with regard to theaffairs of the Company independently frommanagement, but with sufficient information toenable a proper and objective assessment;• are permitted to take independent advice inconnection with their duties following an agreedprocedure;

Sentula Mining Limited Integrated Annual Report 201330Governance reports continued• immediately disclose real or perceived conflicts tothe Board and deal with them accordingly; and• deal in securities only in accordance with the policyadopted by the Board;hhcommence business rescue proceedings as soon asthe Company is financially distressed;hhelect a Chairman of the Board that is a non-executivedirector; andhhappoint and evaluate the performance of the ChiefExecutive Officer.The Board Charter requires that non-executive directorshave unfettered access to management at any time, andall directors are entitled, at the Company’s expense, toseek independent professional advice on any matterspertaining to the Group where they deem this to benecessary, and are obliged to seek such advice in matterswhere they lack sufficient expertise to make an informeddecision. When seeking independent advice, thedirectors must inform the Company Secretary and if it isrelevant to Sentula or its operations, the CompanySecretary will disclose the information to the ChiefExecutive Officer and the Board.Executive directors are held accountable through regularreporting to the Board, and their performance ismeasured against predetermined criteria.Non-executive directors provide the Board with adviceand experience that is independent of management andthe executive. The presence of independent nonexecutivedirectors on the Board, and the critical rolethey play as Board representatives on key committees,ensures that the Company’s interests are served byimpartial views that are separate from those ofmanagement and shareholders.As required by King III, self-evaluations by the Boardand by the Audit and Risk Committee were performedin August 2013. The results will be addressed by theBoard in the coming year, specifically the matter of adetailed succession plan.An evaluation of individual director performance by theChairman and an evaluation of the Chairman by the restof the Board will be performed in the fourth quarter ofthe 2013 calendar year:Executive directors are appointed by the Board tooversee the day-to-day running of the Company.For the financial year ended 31 March 2013 and subsequent thereto, the Board composition and resignation of directors areas follows:Director Appointed ResignationHugh Stoyell (independent non-executive) 30/09/2005 17/09/2012Robin Berry (executive CEO) 02/01/2007 n/aJonathan Best (independent non-executive Chairman) 01/07/2007 n/aDeon Louw (executive CFO) 01/08/2007 n/aPat Modisane (Executive Director Transformation and HR) 01/10/2008 n/aKholeka Mzondeki (independent non-executive) 01/07/2010 n/aCor van Zyl (independent non-executive andChairman of the Audit and Risk Committee) 01/07/2010 n/aRain Zihlangu (independent non-executive) 01/07/2010 n/aRalph Patmore (independent non-executive) 25/01/2012 n/aExecutive directors have contracts of employment with the Company. No contracts between the executive directors and theCompany, or any of its subsidiaries, are terminable at periods of notice exceeding six months or require payment ofcompensation on termination.Non-executive directors have service contracts with the Company, and retire annually by rotation in accordance with theCompany’s MoI.Details on the remuneration of executive and non-executive directors are provided on page 118 of the IntegratedAnnual Report.

Sentula Mining Limited Integrated Annual Report 201331Changes to the BoardHugh Stoyell resigned as non-executive director of theBoard with effect from 17 September 2012.The details of the directors are set out on pages 13 to15 of the Integrated Annual Report.Director appointment and retirementpoliciesThe non-executive directors and Chairman are subject toretirement by rotation and re-election in accordance withthe Company’s MoI. At each annual general meeting,one-third of the non-executive directors, or if their numberis not a multiple of three, then the number nearest to, butnot less than, one-third shall retire from office.New appointments to the Board are made through aformal process and the Nomination Committee assistswith the process of identifying suitable candidates to beproposed to the Board and to shareholders.Board appointments are made with a view to ensuring anappropriate blend of skills and experience is maintained.All Board appointments are ratified by Sentulashareholders.Board meetingsThe Board meets at least four times a year with additionalmeetings held when necessary.The attendance at Board meetings held during thisperiod is set out below:Number of Board meetings during the year – fiveDirector AttendedHugh Stoyell (resigned 17/09/2012) 2Robin Berry 5Jonathan Best (Chairman) 5Deon Louw 5Pat Modisane 5Kholeka Mzondeki 5Cor van Zyl 5Rain Zihlangu 4Ralph Patmore 4Board sub-committeesTo enable the Board to properly discharge its duties andresponsibilities, the Board is assisted by an Audit andRisk Committee, a Remuneration Committee, anInvestment Committee, a Nomination Committee and aSocial and Ethics Committee.Directors play a critical role as Board representatives onthe various Board committees and ensure that theCompany’s interests are served by impartial, objectiveand independent views that are separate from those ofmanagement and shareholders.Each committee has a charter/terms of reference toguide the members in performing their duties andthe members of the committees have access tomanagement, Group records and external professionaladvice if and when required. The Chairperson of eachcommittee, in line with the recommendations of King III,attends the annual general meeting.Audit and Risk CommitteeThe Audit and Risk Committee is constituted as astatutory committee of Sentula and the Group in respectof its statutory duties in terms of section 94(7) of theCompanies Act (2008), and a committee of the Board inrespect of all other duties assigned to it by the Board.The duties and responsibilities of the committeemembers are in addition to those duties andresponsibilities that they have as members of the Board.The committee has an independent role withaccountability to both the Board and shareholders;however, it does not assume the functions ofmanagement, which remain the responsibility of theexecutive directors, prescribed officers and othermembers of senior management.The duties and responsibilities of the members of theAudit and Risk Committee are governed by a charter/terms of reference which is reviewed annually. Thecharter/terms of reference sets out the committee’sduties, which include, inter alia:Overseeing integrated reportingThe committee oversees integrated reporting, includingthe integrity and content of the integrated reportingprocess, and in particular the committee must:(i) have regard to all factors and risks that may impactthe integrity of the Integrated Annual Report,including factors that may predispose managementto present a misleading picture, significantjudgements and reporting decisions made,monitoring or enforcement actions by a regulatorybody, any evidence that brings into questionpreviously published information, forward-lookingstatements or other information;(ii) review the annual financial statements, interimreports, preliminary or provisional resultsannouncements, summarised integratedinformation, any other intended release ofprice-sensitive information and prospectuses,trading statements and similar documents;(iii) comment in the annual financial statements on theaccounting practices and the effectiveness of theinternal financial controls;(iv) review the disclosure of sustainability issues in theIntegrated Annual Report to ensure that it is reliableand does not conflict with the financial information;(v) recommend to the Board whether or not to engagean external assurance provider on materialsustainability issues;

Sentula Mining Limited Integrated Annual Report 201332Governance reports continued(vi) recommend the Integrated Annual Report forapproval by the Board;(vii) consider the frequency for issuing interim results;(viii) consider whether the external auditor shouldperform assurance procedures on the interimresults;(ix) review the content of the summarised informationas to whether it provides a balanced view; and(x) engage the external auditors to provide assuranceon the summarised financial information.Combined assurance modelThe committee must ensure that a combined assurancemodel is applied to provide a coordinated approach to allassurance activities, and in particular the committee should:(i) ensure that the combined assurance received isappropriate to address all the significant risks facingthe Company; and(ii) monitor the relationship between the externalassurance providers and the Company and take theappropriate action where necessary.Finance function and Financial DirectorThe committee reviews the expertise, resources andexperience of the Company’s finance function anddiscloses the results of the review in the IntegratedAnnual Report. The committee also considers andsatisfies itself of the suitability of the expertise andexperience of the Financial Director on an annual basis.Internal audit processesThe committee is responsible for overseeing the internalaudit, and in particular the committee must:(i) be responsible for the appointment, performanceassessment and/or dismissal of the outsourcedinternal audit service provider;(ii) approve the internal audit plan and monitorperformance against this plan; and(iii) ensure that the internal audit function is subject toan independent quality review, as and when thecommittee determines it appropriate.Risk managementThe committee is an integral component of the riskmanagement process and specifically the committeemust:(i) oversee the development and annual review of apolicy and plan for risk management to recommendfor approval to the Board;(ii) monitor implementation of the policy and plan forrisk management taking place by means of riskmanagement systems and processes;(iii) monitor effectiveness of the Company’s internalcontrols and internal audit function;(iv) make recommendations to the Board concerningthe levels of risk tolerance and monitoring that risksare managed within the levels of tolerance asapproved by the Board;(v) ensure that the risk management plan is widelydisseminated throughout the Company andintegrated in the day-to-day activities of theCompany;(vi) oversee the integrity and efficiency of the riskmanagement process through assurance of thesystem controls and policies in place;(vii) ensure that risk management assessments areperformed on a continuous basis;(viii) ensure that frameworks and methodologies areimplemented to increase the possibility ofanticipating unpredictable risks;(ix) ensure that management considers and implementsappropriate risk responses;(x) ensure that continuous risk monitoring bymanagement takes place;(xi) express the committee’s formal opinion to theBoard on the effectiveness of the system andprocess of risk management;(xii) review reporting concerning risk management thatis to be included in the Integrated Annual Reportfor it being timely, comprehensive and relevant; and(xiii) focus on financial risks such as financial reportingrisks, internal financial controls, fraud risks as itrelates to financial reporting and IT risks as it relatesto financial reporting.External audit processesThe committee is responsible for recommending theappointment of the external auditor and to oversee theexternal audit process and in this regard the committeemust:(i) nominate the external auditor for appointment bythe shareholders;(ii) approve the scope and terms of engagement,including also the remuneration for the externalaudit engagement;(iii) monitor and report on the independence of theexternal auditor in the annual financial statements;(iv) define a policy for non-audit services provided bythe external auditor;(v) pre-approve the contracts for non-audit services tobe rendered by the external auditor;(vi) ensure that there is a process for the committee tobe informed of any reportable irregularities (asidentified in the Auditing Profession Act, 2005)identified and reported by the external auditor;(vii) review the quality and effectiveness of the externalaudit process;(viii) evaluate the performance of the external auditor;(ix) have oversight of the qualification andindependence of the external auditor; and(x) perform any other oversight function determined bythe Board.

Sentula Mining Limited Integrated Annual Report 201333ComplianceThe responsibility to facilitate compliance throughout theCompany and the Group has been delegated by theBoard to the Audit and Risk Committee, and in thisregard the committee must:(i) ensure that the Company and the Group complywith applicable laws and consider adherence tonon-binding rules, codes and standards;(ii) ensure that the Company and the Group establishand maintain a compliance framework and processthat is appropriate taking into account the laws,rules, codes and standards that are applicable inlight of the compliance risk profile of the Company;(iii) ensure that the Company and the Group establishand implement a legal compliance policy;(iv) ensure that the Company and the Group establishand implement a compliance manual;(v) identify, assess, advise on, monitor and report onthe regulatory compliance risk of the Company andthe Group, which will form part of the overall riskmanagement framework of the Company;(vi) ensure that compliance monitoring and reportingbe undertaken in a manner that is appropriate forthe Company’s circumstances; and(vii) ensure that a compliance culture is encouragedthrough leadership, establishing the appropriatestructures, education and training, communicationand measurement of key performance indicatorsrelevant to compliance.Information technology (“IT”) governanceThe responsibility for IT governance throughout theCompany has been delegated by the Board through theAudit and Risk Committee, to an IT Steering Committeeestablished for this purpose. The Audit and RiskCommittee has oversight over the duties of the ITSteering Committee as more fully detailed in theapproved Sentula IT Steering Committee Charter. The ITSteering Committee will, through its Chief InformationOfficer, submit minutes of all IT Steering Committeemeetings to the Audit and Risk Committee. The ChiefInformation Officer of the IT Steering Committee willreport on any matters of importance to the Audit andRisk Committee, who in turn will report on IT governanceto the Board.In terms of the charter/terms of reference, the Audit andRisk Committee comprises a minimum of threeindependent non-executive directors, and the Chairmanof the committee may not be the Chairman of the Board.The Audit and Risk Committee is compliant with therequirements of King III, and the constitution of thecommittee is in accord with these guidelines.The composition of this committee is as follows:Cor van Zyl (Chairman of the committee), KholekaMzondeki (member) and Rain Zihlangu (member).The Chairman of the Board, Chief Executive Officer, ChiefFinancial Officer, other executives and the external andinternal auditors attend Audit and Risk Committeemeetings by invitation. The committee annually considersand recommends the annual financial statements of theCompany and the Group for approval by the Board.Additionally, the committee approves the audit fees andall fees for non-audit services provided by the Group’sexternal auditors.The Audit and Risk Committee confirms that it is satisfiedwith the independence of the external auditor and theappropriateness of the skills and expertise of Deon Louw,executive director and Chief Financial Officer of Sentula.Audit and Risk Committee meetings held during theyear – six.DirectorAttendedCor van Zyl (Chairman) 6Kholeka Mzondeki 6Rain Zihlangu 6Remuneration CommitteeThe Remuneration Committee has adopted a charter/terms of reference which is reviewed annually, setting outits duties and obligations. The committee is responsiblefor ensuring that the directors and executivemanagement are appropriately remunerated. Thecommittee is also responsible for the formulation ofproposals of the fees paid to the non-executive directorsfor the Board’s consideration and shareholder approval.During the year under review, the committee was chairedby independent non-executive director, Hugh Stoyell(resigned on 17 September 2012), and the committeefurther entirely comprised independent non-executivedirectors, being Jonathan Best and Ralph Patmore.Ralph Patmore has been acting as Chairman of thiscommittee since the resignation of Hugh Stoyell on17 September 2012.The Chief Executive Officer and Executive DirectorTransformation and HR attend meetings by invitation,and are obliged to recuse themselves from discussionswith regard to their own remuneration.The committee is chaired by an independent nonexecutivedirector, Cor van Zyl.

Sentula Mining Limited Integrated Annual Report 201334Governance reports continuedRemuneration Committee meetings held during theyear – three.Director AttendedHugh Stoyell (Chairman)(resigned 17 September 2012) 2Ralph Patmore (acting Chairman asfrom 17 September 2012) 3Jonathan Best 3Nomination CommitteeThe Nomination Committee has adopted a charterwhich is reviewed annually, setting out its duties andobligations. The committee ensures a formal andtransparent procedure for appointments to the Board.Although the appointment of directors is a matter tobe deliberated upon by the Board as a whole, thecommittee assists the Board by identifying andrecommending suitable candidates for appointment aswell as establishing a succession plan for Boardmembers.During the year under review, the committee was chairedby an independent non-executive Chairman, JonathanBest, and the current members were Hugh Stoyell andRalph Patmore. Rain Zihlangu was co-opted as a memberof this committee with the resignation of Hugh Stoyelleffective 17 September 2012.An attendance table for Nomination Committeemeetings is set out below:Nomination Committee meetings held during theyear – one.Director AttendedJonathan Best (Chairman) 1Hugh Stoyell (resigned 17/09/2012) 0Ralph Patmore 1Rain Zihlangu (appointed 17/09/2012) 1Investment CommitteeThe purpose of the Investment Committee is to considerand oversee Sentula’s strategic investment processes andto evaluate investment projects relating to the acquisitionor disposal of Group assets.There were no meetings during the year under review asstrategic investment/disposals were discussed by theBoard as a whole.Social and Ethics CommitteeThe Social and Ethics Committee was established andconstituted as a statutory committee of Sentula and theGroup on 8 March 2012, in respect of its statutory dutiesin terms of section 72(4)(a) of the Companies Act (2008),and a committee of the Board in respect of all otherduties assigned to it by the Board.The committee has adopted a charter/terms of referencewhich is reviewed annually, setting out its duties andobligations.The purpose of this committee is to recognise theresponsibility for the Company’s actions and theencouragement of a positive impact through its activitieson the environment, consumers, employees,communities, stakeholders and all other members of thepublic. The ultimate objective of managing organisationalintegrity is to build an ethical corporate culture.The committee’s members are appointed by the Boardand it consists of not less than three members, at leastone of whom must be an independent non-executivedirector. Members could also comprise seniormanagement or persons with the relevant experience.The Board appoints the Chairman from the members ofthe committee and determines the period for which he/she shall hold office. In the absence of the Chairman ofthe committee, the remaining members present shallelect one of their numbers present to chair the meeting.The Board shall, from time to time, review and revise thecomposition of the committee, taking into account theneed for an adequate combination of skills andknowledge.Board members may attend committee meetings byinvitation. Suitably qualified persons may be co-optedonto the committee when necessary to render suchspecialist services, as may be necessary, to assist thecommittee in its deliberations on any particular matter,but shall have no voting rights.The committee has the following functions:(i) to provide guidance for the building and sustainingof an ethical corporate culture in the Company;(ii) to monitor the Company’s activities, having regardto any relevant legislation, other legal requirementsor prevailing codes of best practice, with regardto Board Charter matters relating to social andeconomic development, including the Company’sstanding in terms of goals and purposes of the10 principles set out in the United Nations GlobalCompact Principles, the OECD (Organisation forEconomic Cooperation and Development)recommendations regarding corruption, theEmployment Equity Act, the Broad-Based Black

Sentula Mining Limited Integrated Annual Report 201335Economic Empowerment Act and the Company’slegal compliance framework as applicable fromtime to time;(iii) to promote good corporate citizenship, includingthe Company’s promotion of equality, prevention ofunfair discrimination and reduction of corruption,contribution to development of the communities inwhich its activities are predominantly conducted orwithin which its products or services arepredominantly marketed and record of sponsorship,donations and charitable giving;(iv) to care for the environment, health and publicsafety, including the impact of the Company’sactivities and of its products or services;(v) to promote consumer relationships, including theCompany’s advertising, public relations andcompliance with consumer protection laws;(vi) to monitor labour and employment, including theCompany’s standing in terms of the InternationalLabour Organisation Protocol on decent work andworking conditions and the Company’semployment relationship and its contributiontowards the educational development of itsemployees;(vii) to review any statements on ethical standardsor requirements for the Company and theprocedures or review system implemented topromote and enforce compliance;(viii) to review significant cases of employee conflicts ofinterest, misconduct or fraud, or any other unethicalactivity by employees or the Company;(ix) where requested, make recommendations on anymaterial potential conflict of interest orquestionable situations;(x) ensure that the code of conduct and ethics-relatedpolicies are drafted and implemented;(xi) reporting on and disclosing the Company’s ethicsperformance;(xii) to draw matters within its mandate to the attentionof the Board as the occasion requires; and(xiii) to report, through one of its members, to theshareholders at the Company’s annual generalmeeting on the matters within its mandate.The committee is chaired by Pat Modisane (ExecutiveDirector Transformation and HR), and the appointedmembers are Robin Berry (Chief Executive Officer) andRalph Patmore (independent non-executive director).Senior members of Sentula management attendmeetings by invitation.Social and Ethics Committee meetings held during theyear – three.Director AttendedPat Modisane (Chairman) 3Ralph Patmore 3Robin Berry 3Chief Executive OfficerThe Board has delegated specific authorities to the CEOto ensure the effective day-to-day management of theGroup. The CEO has established an ExecutiveCommittee to assist in this task. He is accountable to theBoard for managing the Group and reports to the Boardof Directors.Executive CommitteeThe Executive Committee comprises the followingmembers:Robin Berry Chief Executive Officer, committeeChairmanDeon Louw Chief Financial OfficerPat Modisane Executive Director Transformationand HRGrace Chemaly Group Legal and ComplianceOfficer and Company Secretary(resigned as Company Secretaryon 8 July 2013 and took over therole of Legal and ComplianceOfficer)Ina CrossGroup Company Secretary(appointed on 8 July 2013)CatherineGroup Financial Manager andWolmarans TreasurerPhilip van Vuuren Group Technical Executive(appointed on 15 July 2013)Khumo Mphake Group Manager: Transformationand Human ResourcesLauren Flinders Group Sustainability CoordinatorGideon van Heerden Chief Executive Officer, BeniconElsa Devenish Chief Financial Officer, BeniconIan ElsChief Executive Officer, CCT(resigned 30 June 2013)Allan Hepburn Chief Financial Officer and actingas Chief Executive Officer, CCT(effective 1 July 2013)Johan Pieterse Chief Executive Officer, JEFZander Potgieter Chief Financial Officer, JEFAlan LynnChief Executive Officer, RitchieMacy SiduChief Financial Officer, RitchieMike Fitzgerald Chief Executive Officer, GeosearchJohann Lemmer Chief Financial Officer, Geosearch(appointed 1 October 2012)Gerda Louw Chief Financial Officer, Geosearch(resigned on 1 October 2012)Mike van der Riet Executive Commercial Manager,GeosearchMarthinus de Jager Chief Executive Officer, BeniconSalesNicola Cillie Chief Financial Officer, Megacubeand Sentula Contracting (resignedon 31 August 2013)Michael Minnaar Chief Executive Officer, Nkomati(resigned on 11 June 2013)Danie Jacobs Business Executive – Coal Portfolio

Sentula Mining Limited Integrated Annual Report 201336Governance reports continuedReporting controlsThe Group has comprehensive monthly financialaccounting, cash flow reporting, safety and compliancereporting routines for its subsidiaries. The Groupmanages cash, funding and banking relationshipsthrough a centralised Treasury function. The Boardapproves the Group capital expenditure during theannual budget process.Formal monthly meetings are held with the executivesof each of the subsidiaries to review performance,health and safety, commercial and strategic issues.These are in addition to the monthly meetings heldbetween the Group and the subsidiaries CEOs andrespective business management teams.Code of Business Conduct (”the Code“)Sentula is committed to a policy of fair dealing andintegrity in the conduct of its business. This commitment,which is actively endorsed by the Board, is based on afundamental belief that business should be conductedhonestly, fairly and legally. The Company expects allemployees to share its commitment to high moral, ethicaland legal standards.The CEO and executive management are responsible tothe Board for the development and maintenance of theethical culture within the Group. Supervisors andmanagers have a responsibility to support the CEO andexecutive management in upholding a high standard ofbusiness conduct, and must take all reasonable steps toensure that the people for whom they are responsible areaware of and uphold the behaviours outlined in the Code.This includes:hhconsistently demonstrating exemplary behaviour;hhundertaking activities to foster a culture in whichemployees understand their responsibilities, feelcomfortable raising concerns without fear ofvictimisation, are encouraged to work according toacceptable standards and are rewarded for suchbehaviour;hhmaking certain that mandatory Company policies,standards and procedures are accessible andunderstood;hhembedding the requirements of the Code into existingsystems, for example performance managementprocesses, employment and supplier contracts,induction as well as industrial agreements;hhresponding promptly and seriously to employees’legitimate concerns and questions about businessconduct issues and seeking further assistance ifrequired;hhestablishing internal processes that address risk areasin relation to business conduct and ensuring thatactual or potential breaches are appropriatelyinvestigated and handled;hhensuring all business conduct breaches are reported tothe relevant human resources representative forrecording in the breaches database; andhhtaking or recommending appropriate actions toaddress business conduct issues.The Company complies with the code of ethicsrequirements of King III in all material respects.Stakeholder engagementGood corporate governance principles promoteinteractive communication processes to address thelegitimate interests and expectations of stakeholders.As such, Sentula remains committed to providing allstakeholders with relevant, transparent and timelycommunication through the most appropriate mediumand in the most appropriate manner. Due to the natureof the Group, interaction with employees, unions,suppliers and clients is primarily with management. Theexecutive directors interact regularly with keyshareholders on the performance and strategy of theGroup. From time to time shareholders contact nonexecutivedirectors on specific issues. Communicationchannels include SENS, the press (local and nationalnewspapers), corporate reports and publications, formalmeetings and forums, internal newsletters, informalinformation sharing, marketing channels and the internet.The website (www.sentula.co.za), which was revampedduring the year, provides relevant news and informationabout the Group. The Group’s formal business languageis English but, where applicable, communication may beprovided in other languages.Company SecretaryAll directors have unrestricted access to the advice andservices of the Company Secretary and to Companyrecords, information, documents and premises. TheCompany Secretary minutes all Board and sub-committeemeetings and maintains the registers required by statute.The Company Secretary is also responsible for keepingdirectors abreast of regulatory or legislative changeswhich may affect the Company.During the year under review, and in compliance withparagraph 3.84(i) and (j) of the Listings Requirements, theBoard evaluated Ms Grace Chemaly, the CompanySecretary, and is satisfied that she is competent, suitablyqualified and experienced. Ms Chemaly is a qualifiedattorney and has 15 years’ experience in the legalindustry, seven of which were as Company Secretary inthe listed environment. Furthermore, since she is not adirector, nor is she related or connected to any of thedirectors, thereby negating a potential conflict of interest,it was agreed that she maintains an arm’s lengthrelationship with the Board. The Board also undertook ageneral evaluation of her performance in order to identifypossible steps for improvement, which werecommunicated to her by the Chairman.

Sentula Mining Limited Integrated Annual Report 201337Grace Chemaly resigned as Company Secretary on8 July 2013, and took over the role of Legal andCompliance Officer.Subsequent to year-end, Ina Cross was appointed asCompany Secretary of Sentula and the Group effective8 July 2013. Ms Cross is a qualified attorney and hasapproximately 18 years’ experience in the legal servicesindustry. Prior to joining Sentula, she was a practicingattorney for seven years before assuming the position oflegal manager at Anglo Platinum, where she remainedfor five years. Thereafter Ms Cross joined Barrick Gold asa director of legal services for a period of over six years.Share dealing and conflicts of interestDirectors and management with access to financialresults and/or price-sensitive information are prohibitedfrom dealing in Sentula shares during closed orprohibited periods, and clearance and approvalprocedures and processes are in place throughout theGroup. At the holding company level, directors arerequired to obtain prior approval from the Chairman andChief Executive Officer and to report any share dealing(including transactions in terms of the Sentula ShareIncentive Trust) to the Company Secretary who, togetherwith the Chief Executive Officer and sponsor, ensures thepublication of the information on SENS. At subsidiarylevel, dealings are cleared by the Chief Executive Officer.Directors are required to separate their personaltransactions from the Company’s transactions, and theyare prohibited from accepting or soliciting gifts orbenefits of any kind by virtue of their position on theBoard. Annually, and thereafter at each Board meeting,directors are required to disclose to the Chairman anypotential conflict of interest and any other directorshipsheld by them. Directors who disclose a potential conflictof interest recuse themselves from discussion of thematter which may give rise to the conflict of interest.SubsidiariesSentula’s major subsidiaries are listed on page 4 of thisIntegrated Annual Report.SponsorIn compliance with the Listings Requirements,Merchantec Proprietary Limited acts as sponsorto Sentula.Risk management reportResponsibility for risk managementSentula acknowledges that risk is an inherent andunavoidable aspect of contract mining and miningservices. The Company fosters a corporate culture of riskawareness in all decision-making, and is committed tomitigating and managing risk in a proactive and effectivemanner through a thorough risk management framework.In support of this commitment, all material risks thatimpact the Group’s businesses are analysed by the Auditand Risk Committee and the Board using a formal riskrating matrix. The Board is ultimately responsible andaccountable for ensuring that adequate procedures andprocesses are in place to identify, assess, manage andmonitor key business risks. The Audit and RiskCommittee and Board conduct regular reviews of theGroup’s risks to ensure that major risks are identified,rated and documented in the Company’s risk register.The risk management process is conducted with inputsfrom both the Group’s internal and external auditors andother independent service providers. Although theBoard, assisted by the Audit and Risk Committee,assesses Group risk and ensures that a culture of riskawareness is instilled throughout the Group, day-to-dayresponsibility for risk identification, evaluation andmanagement resides with the subsidiary managementand Executive Committee of the Group.These risks are reviewed on a monthly basis by theExecutive Committee to ensure that the requisiteresponsibility is allocated and the appropriate mitigatingmechanisms are implemented to reduce the identified riskto an acceptable level. Financial risk is governed by aformal financial risk management policy which is approvedby the Board and sets limits for the magnitude and natureof financial risk that may be incurred by the Group.The Group’s internal audit plan is reviewed on an annualbasis by the Audit and Risk Committee and directed toensure that the identified risk factors are being managedin a manner consistent with the guidelines determined bythe Board.The Group’s assets are insured against material loss withcredible insurers at predetermined values to ensure thatmaterial asset losses are reduced to levels approved bythe Board.The Group endeavours to maintain constructiverelationships with the tax authorities in the jurisdictions inwhich it operates and utilises the services of independenttax consultants to ensure tax compliance across theGroup. These advisers conduct ongoing tax reviews andprovide quarterly feedback to the Audit and RiskCommittee on its findings. All material legal tax mattersare dealt with by the Group’s legal advisers and aremonitored by the Audit and Risk Committee.Analysis of risks and controlsIn reviewing the Group’s risk profile, considerationis given to the following primary risk categories:Business risk:hhCustomer concentration;hhBroad-based black economic empowerment; andhhIncreasing business complexity.

Sentula Mining Limited Integrated Annual Report 201338Governance reports continuedExternal risks:hhMacroeconomic risk; andhhGeopolitical risk.Sustainability risk:hhRegulatory and compliance risk;hhStrategic risk; andhhSkill retention and succession planning.Financial risks:hhGroup capital structure and working capitaladequacy; andhhCredit/counterparty risk.Operational risks:hhSafety, health and environmental risks;hhAdverse weather conditions;hhOperational cost increases and reliability of keyconsumables;hhLabour militancy; andhhCapital allocation, equipment availability andutilisation risk.The risk management process is conducted in thecontext of a formalised system to identify and assess theprimary risks to which the Group is exposed.The approach to the management of the riskincorporates the following key steps:hhidentify the risks that could have a material impact onthe Group’s ability to achieve its strategic objectives;hhanalyse the risks and mitigating controls, distinguishingbetween controllable and uncontrollable risks and thepotential financial impact of such risks;hhensure that the appropriate controls are put in place tomitigate or reduce the residual risk to an acceptablelevel;hhmonitor the effectiveness and implemented controls;andhhregularly report to the Audit and Risk Committeeand Board.Managing risk and risk factorsA summary of the major risks, in no order of priority, towhich the Group is exposed, their impact and themitigating strategies thereto, is presented hereunder:Root cause Impact MitigationBusiness risksThe Group is exposed to anumber of large miningclients.Broad-based black economicempowerment legislation notbeing complied to.Increased businesscomplexity creates anenvironment that impactsadversely on the business.External risksDemand for the Group’sservices is influenced byworld economic growth,particularly in the Asiancountries and the westernEuropean sub-continent.Premature termination of a largecontract may result in financiallosses if it cannot be timeouslyreplaced.The Group's empowerment ratingmay deteriorate, resulting innon-compliance to tenderconditions.Complexity stifles entrepreneurialspirit and distracts and frustratesmanagement. Regulatorycompliance may also be breached.A reduction in economic growthcould have a negative impact oncommodity prices and aconcomitant impact on the Group’srevenues, profitability, cash flows,and asset values.Should commodity pricesdeteriorate certain of the operationson which the Group renders miningservices may become uneconomicalresulting in a cessation orcurtailment of operations.Major economic upheaval in Asia orEurope may also exacerbate thefinancial crisis, resulting in capitalequipment finance becoming moreexpensive and/or curtailed.Diversification of the client base, strengthening of theexecutive level relationships and the rendering ofcompetitive and value enhancing services.Ongoing assessment of regulatory compliance bymanagement.Ongoing training of executives and the outsourcingof compliance awareness initiatives. The eliminationof bureaucracy and the simplification of businessprocesses.The Group manages this risk through constantmonitoring of the markets in which it operates. Thefollowing strategies have also been introduced tofurther mitigate this risk:hhdiversification of the Group’s earnings streams;hhmaintaining debt levels which are stress tested todifferent levels of cash flow volatility; andhhmaintaining flexible business models with respectto fleet configurations, employee terminationperiods and employment conditions.

Sentula Mining Limited Integrated Annual Report 201339Root cause Impact MitigationExternal risksGeopolitical risk may impactadversely on the Group’sforeign mining servicesbusiness.Sustainability risksThe Group’s business may beaffected by regulatory orfiscal developments in any ofthe jurisdictions in which itoperates.Mining operations are subjectto extensive legislation andregulations.Adverse changes inlegislation or regulationscould affect the viability ofthe Group’s miningoperations or prospects.Risk of the Group's strategybeing unaligned to its vision.The inability to recruit,develop and retainappropriate skills remains anongoing risk for the Group’soperations.Geopolitical volatility in the foreigncountries in which the Groupoperates can result in a delay in thecommencement of operations or acessation of operations.The ability to source and remitforeign exchange may alsoadversely impact the Group’sliquidity and its ability to meet itscontractual obligations.The manifestation of these risks canresult in an adverse impact on theGroup’s future earnings andcash flows.Adverse changes to legislation,regulations or standards couldimpact the Group’s licences and itsability to operate its mining assets.Failure to comply with existingregulations could result in therevocation of the Group’s licences,consents and other rights requiredconducting its business.Legal disputes may affect theGroup’s reputation, relationshipswith Government and keystakeholders as well as its futureearnings and cash flows.Management actions are in conflictwith the Group's vision.Failure to retain skilled employeesor to recruit appropriate new staffmembers may result in increasedcosts, interruptions to existingoperations and lost opportunities.A high employee turnover couldalso result in the loss of critical skillsand “corporate memory”.Geopolitical risk in foreign countries is managed bythe following initiatives:hhindependent political risk assessments andmonitoring, where appropriate;hhcontributing to the host country’s economy andculture with worthwhile public projects;hhcultivating connections with public officials outsidethe industry in which the Group operates;hhongoing discussions and engagement withrepresentatives of the national or local governmentand being a good corporate citizen;hhpolitical risk insurance, where deemed necessary;andhhlimiting the capital and currency exposure to asingle country or region to within acceptable levels.The Group monitors regulatory developments withthe assistance of an external service provider andensures that the applicable policies and proceduresare in place to ensure compliance.All appropriate actions are taken by management toprotect the Group, its employees and shareholdersfrom legal actions.Mechanisms to ensure compliance include:hha legal compliance register being implemented;hhcompliance checklists and project monitoringsoftware being implemented; andhhindependent reviews and legal and tax opinionsare sought on substantive regulatory matters.The Group strategy process is formalised andreviewed by the Board.The Group recognises that the mining industry isexperiencing a skills deficit and has implemented anumber of strategies to attract, retain and develop itsbest talent.These include:hhregularly benchmarked market-relatedremuneration and long-term incentive schemes;hhcomprehensive and in-house training programmes,job-based skills training and apprenticeships andlearnerships;hhgrowth opportunities and multi-skilling foremployees;hhsuccession planning programmes are in placewhich are reviewed bi-annually; andhhongoing market research on availability of scarcecategory skills.

Sentula Mining Limited Integrated Annual Report 201340Governance reports continuedRoot cause Impact MitigationFinancial risksThe Group’s growth andsustainability is dependent onthe support of a number offinancial institutions.This funding is utilised toinvest in the Group’s ongoingcapital and working capitalrequirements.The Group is exposed tosubstantial credit risk whenrendering services tocounterparties that do nothave the financial strength oflarger companies.Operational risksMining is a hazardous activityand the Group operates in asector that is subject tonumerous safety and healthregulations.Given the large fleets of plantand equipment beingoperated by the Group,exposure to mining accidentsis the single most significanthealth and safety risk facingthe Group.The Group’s operations areconducted in an openenvironment which isexposed to the naturalelements.Group capital structure and workingcapital adequacy is unresponsive tochanging market and operatingconditions which may result in abreach of the facility covenants anda withdrawal of these facilities.Should these facilities be withdrawnor reduced the Group’s sustainabilitywill be severely impacted.The inability of a counterparty tomeet its obligations to the Groupcan have a material severe financialimpact on the Group’s ability tomeet its financial objectives.Failure to maintain high levels ofsafety can result in harm toemployees or communities near theGroup’s operations.Failure to meet safety objectivesmay breach the Group’s values,impact its reputation and affect themorale of employees, theachievement of production targetsand the Group’s licence to operate.Severe safety incidences can resultin the Group’s reputation beingdamaged with adverseconsequences for its stakeholders.Adverse weather conditions such asexcessive rain, heat, fog and dustadversely impact the Group’s abilityto meet its operational and financialtargets.The Group’s financial risk is managed in terms of afinancial risk management policy which endeavours toreduce financial risk to acceptable levels and ensurethe Group’s solvency and liquidity.The Group also fosters good relationships with anumber of banks and monitors its liquidity andcovenants on an ongoing basis. To ensure that theGroup’s working capital is adequate to bridgeoperational disruption, a general banking facility hasbeen secured. Capital is only deployed into projectsthat are expected to generate a return equal or inexcess of the Company’s cost of capital andgenerates the requisite cash for debt redemption.Operational and financial performance is monitoredby means of monthly benchmarking to predeterminedoperational and financial criteria.To reduce this risk to an acceptable level, thefollowing initiatives are taken:hhongoing credit assessments of counterparties;hhcredit enhancements, where available, such aspayment guarantees, credit insurance and securitydeposits;hhcontractual terms to enable the Company to limitits exposure;hhdiversification of the client base; andhhthe strengthening of executive level relationships.The Group places a very high priority on safety andinvests considerable resources in maintaining andimproving safety standards at its operations. In thiscontext the following initiatives have beenimplemented:hhprogrammes to comply with ISO 9000, 14000 andOSHAS 18000;hhbehaviour-based training and rigorous enforcementof standards;hha SHE forum established at senior management(EXCO) level;hhincentives linked to the meeting of objectives;hhmonitor conditions from a safety and operationalperspective, with regard to hazards identified andsolutions implemented;hhrisk elimination programmes and the mitigation ofassessed risk; andhhengineered solutions (FRCP and AFRS).Initiatives to limit the impact of adverse weatherconditions include:hhthe design and maintenance of effective drainageand pumping systems on operations;hhensuring that haul roads and related infrastructureare constructed to ensure good drainage anddurability;hhcontracted flexibility in operational activities inconjunction with the scheduling of operationalactivities and flexible production targets; andhhmaintaining high service delivery quality standards.

Sentula Mining Limited Integrated Annual Report 201341Root cause Impact MitigationOperational risksThe Group is dependent on anumber of input costs whichare largely outside of itscontrol.These inputs costs typicallyinclude labour rates, steelprices, fuel and the cost ofcapital equipment.Capital deployed intounderperforming projects.The Group is often unable to passthese cost increases through to itsclients, which may result in itsfinancial objectives not being metand consequently affecting thevalue of its assets, earnings, cashflows and prospects.A labour disruption could result inproduction and financial losses tothe Group.Capital deployed into projects thatrender sub-optimal returns mayresult in cash flow deficits and theerosion of shareholder value.A number of strategies have been implemented tomitigate this risk, which include:hhmaintaining a database of price escalations on allmajor commodity items;hhcontractually linking rate escalations to input costescalations;hhdeveloping and strengthening executive levelrelationships with key suppliers;hhmaintaining flexible business models with respectto fleet configurations, termination periods andemployment conditions;hhimplementing strong relationship buildingprocesses with organised labour through a processof constructive dialogue and an effective workingrelationship; andhhestablishing long-term agreements on collectivebargaining.Capital is only deployed into projects that areexpected to generate a return equal or in excess ofthe Company’s cost of capital and generate therequisite cash for debt redemption. Operational andfinancial performance is monitored by means ofmonthly benchmarking to predetermined operationaland financial criteria.Information technology (“IT”)reportThe Board of Directors has, through delegated authorityto the Audit and Risk Committee, identified the functionswithin the business that are dependent upon IT solutions.The business risk associated with these functions hasbeen assessed by the Audit and Risk Committee and,taking cognisance of the nature of the Group’s currentbusiness offering and strategy, an IT governanceframework has been established and policies formulatedunder the direction of the Group IT Steering Committee.A charter for the IT Steering Committee was adoptedduring the year and the IT Steering Committee has beenmandated to guide the Group’s IT strategy in line withbusiness imperatives. The IT committee meets on abi-annual basis to review the appropriateness of theGroup’s IT function and related matters. The Group’sindependent IT consultants and internal auditors alsoattend this meeting.Given the nature of the Group’s current business mix, thephysical safeguarding of IT assets, data security anddisaster management and recovery, have been identifiedas the core of Sentula’s IT management emphasis. Duringthe past year, a service provider was mandated toprovide a back-up and recovery function for the Group,utilising secure offsite repositories. The IT Committeehas also placed a renewed emphasis on the use oftechnology as a business enabler, as opposed to only aprocessing function and a number of initiatives havealready been embarked on in this regard to bettermanage the Group’s fleet of plant and equipment. Theintegration of the Group’s IT functions is also continuingwith centralised IT nodes rendering services to a numberof subsidiaries.As a standing item on the Group’s Audit and RiskCommittee agenda, the Group’s internal auditors and ITconsultants have been appointed to provide assurance tothe committee on the appropriateness, stability andsustainability of the Group’s IT function.Remuneration reportRemuneration CommitteeRole of the Remuneration Committee and termsof referenceIn particular, the Remuneration Committee is responsiblefor:hhthe determination and periodic review of theremuneration packages for executive directors andother members of the Executive Committee of theCompany including, but not limited to, basic salary,performance-based short and long-term incentives,pensions, and other benefits;hhthe design, operation and administration of theCompany’s performance-based incentives and awardsmade under the share-based incentive schemes;

Sentula Mining Limited Integrated Annual Report 201342Governance reports continuedhhthe development of a succession plan that identifiessuitably experienced individuals, within in theorganisation, who can step into key roles, should theneed arise; andhhassisting the Board with the determination of theremuneration to be paid to the non-executivedirectors.Membership of the committeeHugh Stoyell – resigned 17 September 2012Jonathan BestRalph Patmore (acting Chairman)Remuneration policy on executive director andsenior executive remunerationThe Company’s objective remains to be the preferredcontract mining and mining services company in Africa. Inorder to achieve this, the Company must be in a positionto attract the right talent available in the industry and itsremuneration package must therefore be comparable tothose of its competitors, in the various sectors in whichit operates.The remuneration policy is to attract and retain highcalibreexecutives and to motivate them to develop andimplement the Company’s business strategy and theoptimisation of long-term shareholder value.The following principles are applied to give effect to theremuneration policy and to determine executiveremuneration:hhexecutive remuneration is benchmarked against acomparator group of South African small and mid-capJSE listed entities, mining services and junior miningcompanies. The most recent benchmarking exerciseconducted by the Company utilised the April 2013Remchannel Report as a base, and indicated that thetotal remuneration of the executive directors was inline with the peer group median;hhto ensure the appropriate balance between short,medium and long-term incentives, with salarycomprising about 35% to 45% of annual remuneration,if the bonus and share-based incentive targets areachieved in any given year; andhhto align the behaviour and performance of executiveswith the Company’s strategic goals, all incentive plansalign performance targets with shareholder interests.The quantum of the short-term incentive and relatedbonus is determined with respect to performance in agiven financial year, while the vesting of the sharebasedincentive awards is determined with respect toconditions related to Company performance over thefive years following the date of grant.At the annual general meeting of shareholders to be heldon 24 October 2013, shareholders will be asked toapprove the policy as outlined in this report and that theBoard of Directors be authorised and carry out thenecessary action to implement the remuneration policyfor 2014 as summarised herein.Elements of executive director and seniorexecutive remunerationRemuneration mixEach executive’s total remuneration consists of a basicsalary and benefits, defined as the employment cost tothe Company, an annual performance-linked bonus, anda combination of the following share-based deferredbonus scheme, the share appreciation rights scheme andthe long-term incentive plan. An appropriate balance ismaintained between fixed and performance-relatedremuneration and elements linked to short-termperformance and those related to longer-term growth inshareholder value.The potential bonus achievable in a given year,expressed as a percentage of basic salary, is shown in thetable below, if 100% of all the budgeted annual targetsare met:Chief Executive Officer 56%Executive directors 48%Executive management 40%Other management 40%Basic salaryThis is the total guaranteed annual employment cost tothe Company associated with the employment of anexecutive. It is structured, at the individual’s election, butin accordance with applicable legislation, to include abasic salary, a travelling allowance, a medical aidcontribution and a pension fund contribution. A cost ofliving increase in the basic salary is considered by theRemuneration Committee on an annual basis, andimplemented from 1 July in the applicable year. For thefollowing year, increases ranged from 0% to 5%, with amaximum increase in an individual’s executive salarycost of 5%.Performance bonusThis is a short-term incentive plan under which awardlevels are determined with reference to the achievementof a set of stretched Company and individualperformance targets. For the 2013 financial year, 100% ofthe bonus would have been payable if 110% of all targetswere achieved. The criteria comprised a matrix-basedscorecard, comprising financial, safety, transformationand personal objectives.

Sentula Mining Limited Integrated Annual Report 201343The weighted resultant percentage for the Groupobjectives, achieved for the 2013 financial year, was32,3%, as detailed in the table below:SHE BBBEE Financial Total18,9% 13,4% 0,0% 32,3%This score, coupled with the achievement of personalobjectives, would then be applied to the applicable levelof basic salary resulting in a performance bonus equal toa percentage of the individual’s basic salary. The bonus ispaid in cash at the end of the month following the monthin which the presentation of the Group’s annual financialresults is made.Given the financial performance of the Group and inspite of the weighted score, detailed above, beingachieved in other areas, the Remuneration Committeesupported a proposal by the CEO to forego the bonusesdue to the Executive Directors and executivemanagement, where appropriate. Prior to ratification bythe Board, an objection lodged by one of the ExecutiveDirectors, on contractual grounds, resulted in the Boardsupporting the approach that the Executive Directors andthe affected executive management, on an individualbasis, be offered and given the opportunity to accept orforego their resultant bonus payments, for this period.Following a review by the CEO, the criteria and scorecardweighting for the financial year ending 31 March 2014have been simplified and approved by the RemunerationCommittee, as follows:Financial%Personal%Chief Executive Officer 80,0 20,0Chief Financial Officer 70,0 30,0HR and TransformationDirector 70,0 30,0Other executives 60,0 40,0The weighted average percentage of targets achievedwill continue to be applied to the following percentagesof cost to Company salary:Chief Executive Officer 70%Chief Financial Officer 60%Executive Director HR and Transformation 60%Other executives 50%Share-based incentivesDeferred bonus schemeSelected executives and employees of the Group will, inlieu of a discretionary bonus or a percentage thereof, beoffered the right to receive a cash award equal to thesum of the market value of a number of notional Sentulaissued ordinary shares as at the expiry of a specifiedemployment period and a multiple thereof. The specifiedemployment period and the applicable multiple isdetermined by the Board at the time of offer of thedeferred bonus award. The aggregate of all dividendspaid per Sentula ordinary shares over the employmentperiod and the number of bonus shares comprise thedeferred bonus award.Notional shares awarded under this scheme are offeredat a price determined by the 30-day Sentula volumeweighted average share price (the “30-day VWAP”) onthe day that the Remuneration Committee makes theaward (the “offer date”). No awards were made duringthe year under review.Share appreciation right schemeThis is a scheme whereby senior and middlemanagement (the “employees”) of Sentula areincentivised by means of the award of options, of whichthe offer price is determined as the 30-day VWAP on theoffer date and the employees can exercise the saidoptions in five equal tranches annually from the first tothe sixth anniversary of the offer date, subject to themremaining in the employment of Sentula. The award andallocation of options under the scheme is governed bySentula’s Board. No new options were awarded duringthe financial year ended 31 March 2013.The basis of settlement of the share appreciation rightsscheme and the deferred bonus scheme is disclosed innote 6 of the consolidated financial statements.Long-term incentive planSelected executives and employees of Sentula and itssubsidiaries receive a conditional right to receive a cashaward (the “LTIP”) equal to the market value of a numberof notional Sentula issued ordinary shares on the datethe award becomes unconditional. This is a cash-settledscheme. During the 2013 financial year 4 125 000 LTIPawards were made to new participants, being seniorexecutives who joined the Group, subsequent to the lastmeasurement date in July 2012. As the conditionality forthe third 2012 tranche of the LTIP awards was met,5 104 000 awards vested during the financial periodunder review.The executive directors’ remuneration is disclosed innote 36 of the Group’s annual financial statements.

Sentula Mining Limited Integrated Annual Report 201344Governance reports continuedKing III checklist1. Ethical leadership and corporate citizenship1.1 The Board should provide effective leadership based on an ethical foundation ✓1.2 The Board should ensure that the Company is and is seen to be a responsible corporatecitizen✓1.3 The Board should ensure that the Company’s ethics are managed effectively ✓2. Board and directors2.1 The Board should act as the focal point for the custodian of corporate governance ✓2.2 The Board should appreciate that strategy, risk, performance and sustainability are ✓inseparable2.3 The Board should provide effective leadership based on an ethical foundation ✓2.4 The Board should ensure that it is and is seen to be a responsible corporate citizen ✓2.5 The Board should ensure that the Company’s ethics are managed effectively ✓2.6 The Board should ensure that the Company has an effective and independent Audit ✓Committee2.7 The Board should be responsible for the governance of risk ✓2.8 The Board should be responsible for IT ✓2.9 The Board should ensure that the Company complies with applicable laws and considers ✓adherence to non-binding rules, codes and standards2.10 The Board should ensure that there is an effective risk-based internal audit ✓2.11 The Board should appreciate that stakeholders’ perceptions affect the Company’s ✓reputation2.12 The Board should ensure the integrity of the Company’s Integrated Annual Report ✓2.13 The Board should report on the effectiveness of the Company’s system of internal controls ✓2.14 The Board and its directors should act in the best interest of the Company ✓2.15 The Board should consider business rescue proceedings or other turnaround mechanisms ✓as soon as the Company is financially distressed as defined by the Companies Act2.16 The Board should elect a Chairman of the Board who is an independent non-executive ✓director. The Chief Executive Officer should not fulfil this role2.17 The Board should appoint the Chief Executive Officer and establish a framework for the ✓delegation of authority2.18 The Board should comprise a balance of power, with a majority of non-executive directors. ✓The majority of non-executive directors should be independent2.19 Directors should be appointed through a formal process ✓2.20 The induction and ongoing training and development of directors should be conducted ✓through formal processes2.21 The Board should be assisted by a competent, suitably qualified Company Secretary ✓2.22 The evaluation of the Board, its committees and the individual directors should be ✓performed every year2.23 The Board should delegate certain functions to well-structured committees but without ✓abdicating its own responsibilities2.24 A governance framework, including strategic objectives of the policy, should be agreed ✓between the Group and its subsidiary boards/companies2.25 Companies should remunerate directors and executives fairly and responsibly ✓2.26 Companies should disclose remuneration of each individual director and certain senior ✓executives2.27 Shareholders should approve the Company’s remuneration policy ✓

Sentula Mining Limited Integrated Annual Report 2013453. Audit and Risk Committee3.1 The Board should ensure that the Company has an effective and independent Audit ✓Committee comprising at least three members3.2 Audit Committee members should be suitably skilled and experienced independent ✓non-executive directors3.3 The Audit Committee should be chaired by an independent non-executive director ✓3.4 The Audit Committee should oversee integrated reporting ✓3.5 The Audit Committee should ensure that a combined assurance model is applied to ✓provide a coordinated approach to all assurance activities3.6 The Audit Committee should satisfy itself of the expertise, resources and experience of ✓the Company’s finance function3.7 The Audit Committee should be responsible for overseeing internal audit ✓3.8 The Audit Committee should be an integral component of the risk management process ✓3.9 The Audit Committee is responsible for recommending the appointment of the externalauditor and overseeing the external audit process3.10 The Audit Committee should report to the Board and shareholders on how it hasdischarged its duties4. The governance of risk4.1 The Board should be responsible for the governance of risk ✓4.2 The Board should determine the levels of risk tolerance ✓4.3 The Risk Committee or Audit Committee should assist the Board in carrying out its risk ✓responsibilities4.4 The Board should delegate to management the responsibility to design, implement and ✓monitor the risk management plan4.5 The Board should ensure that risk assessments are performed on a continual basis ✓4.6 The Board should ensure that frameworks and methodologies are implemented to ✓increase the probability of anticipating unpredicted risks4.7 The Board should ensure that management considers and implements appropriate risk ✓responses4.8 The Board should ensure continuous risk monitoring by management ✓4.9 The Board should receive assurance regarding the effectiveness of the risk managementprocess4.10 The Board should ensure that there are processes in place enabling complete, timely,relevant, accurate and accessible risk disclosures to stakeholders5. The governance of information technology5.1 The Board should be responsible for IT ✓5.2 IT should be aligned with the performance and sustainability objectives of the Company ✓5.3 The Board should delegate to management the responsibility for the implementation of ✓an IT governance framework5.4 The Board should monitor and evaluate significant IT investments and expenditure ✓5.5 IT should form an integral part of the Company’s risk management ✓5.6 The Board should ensure that information assets are managed effectively ✓5.7 A Risk Committee and Audit Committee should assist the Board in carrying out its ITresponsibilities6. Compliance with laws, rules, codes and standards6.1 The Board should ensure that the Company complies with applicable laws and considersadherence to non-binding rules, codes and standards6.2 The Board and each individual director should have a working understanding of the effectof the applicable laws, rules, codes and standards on the Company and its business✓✓✓✓✓✓✓

Sentula Mining Limited Integrated Annual Report 201346Governance reports continuedKing III checklist continued6.3 Compliance should form an integral part of the Company’s risk management process ✓6.4 The Board should delegate to management the implementation of an effectivecompliance framework and processes7. Internal audit7.1 The Board should ensure that there is an effective risk-based internal audit ✓7.2 Internal audit should follow a risk-based approach to its plan ✓7.3 Internal audit should provide a written assessment of the effectiveness of the Company’s ✓system of internal controls and risk management7.4 The Audit Committee should be responsible for overseeing internal audit ✓7.5 Internal audit should be strategically positioned to achieve its objectives ✓8. Governing stakeholder relationships8.1 The Board should appreciate that stakeholders’ perceptions affect the Company’sreputation8.2 The Board should delegate to management to proactively deal with stakeholderrelationships8.3 The Board should strive to achieve the appropriate balance between its variousstakeholders’ groupings, in the best interest of the Company8.4 Transparent and effective communications with stakeholders is essential for building andmaintaining their trust and confidence8.5 The Board should ensure that disputes are resolved as effectively, efficiently andexpeditiously as possible9. Integrated reporting disclosure9.1 The Board should ensure the integrity of the Company’s Integrated Annual Report ✓9.2 Sustainability reporting and disclosure should be integrated with the Company’s financial ✓reporting9.3 Sustainability reporting and disclosure should be independently assured ✘ The Audit and RiskCommittee reviewsthe need for externalassurance annually.✓✓✓✓✓✓The InternationalAccounting andAuditing StandardBoard’s internationalstandard on assuranceengagements(SAE 3000) andAccountability’sAssurance Standard(AA 1000 AS) aretaken into account indeciding on whereand when to useexternal assuranceproviders.

Sentula Mining Limited Integrated Annual Report 201347

Sentula Mining Limited Integrated Annual Report 201348Sustainability reportOverviewSentula understands that the achievement of fullyintegrated reporting is a process. In 2010 Sentulaproduced its first Integrated Annual Report whichincluded a review of the Group’s performance in the fieldof sustainable development. This, the Group’s fourthannual sustainability report, shows the progress that hasbeen made and where the focus is intended to be placedfor the year ahead.The review process is focused primarily on activitiesin South Africa, where the majority of the Group’soperations is based, but includes limited coverage ofoperations outside South Africa’s borders. In additionto South Africa, the Group operates in Botswana, theDemocratic Republic of Congo, Ethiopia, Malawi,Mozambique, Zambia, and Côte d’Ivoire. Despite theremoteness of many of the Group’s activities outsideSouth Africa, where reporting remains a challenge,Sentula’s endeavours, to provide information onsustainable development performance in these areas,have started to yield results.This review has been compiled using the principles forintegrated sustainability reporting as outlined in King III,the Integrated Reporting Committee’s discussiondocument of April 2011 and the Global ReportingInitiative (“GRI”) G3.1 sustainability reporting guidelines.The focus at Sentula has, and continues to be, onproviding material information which adds value tostakeholders. As such, Sentula makes use of the variousguidelines and resources available, using them as aspringboard to develop its own templates based on theunique challenges and opportunities of its business.A selection of key performance indicators (“KPIs”) havebeen used to give a high-level overview of Sentula’ssustainable development performance. These KPIs asdetailed on page 50, allow the Group to compare itsperformance and set targets in various areas to that ofprevious years and across the business.Operating contextIssues and trendsSentula’s operational footprint extends throughout Africa;with the majority of operations based in South Africa.Sentula believes that today’s challenges are tomorrow’snorm. As the mining services sector, operating within thebroader mining sector, finds itself under increasingpressure from rising costs, labour disputes and socialpressures, the ability to respond effectively to challengesis vital to the ongoing sustainability of the Group.Issues around the sustainability of resources and theenvironmental impact of mining are increasingly beinghighlighted, resulting in pressure on mining companiesand contractors to ensure that the impacts of theiroperations are quantified and mitigated as far aspossible. In addition to the drive to improve safety andthe acceptance of zero harm goals, it is now a businesslicence imperative to strive towards minimumenvironmental impact.“In a few decades, the relationship between theenvironment, resources and conflict may seemalmost as obvious as the connection we see todaybetween human rights, democracy and peace” –Wangari Maathai – environmental activist, firstAfrican woman to receive the Nobel Peace Prizein 2004.As the effects of climate change become more apparent,there is a need not only to quantify and report on carbonemissions, but also to find more innovative ways toreduce emissions without slowing development orgrowth. Although the industry is not yet required bylegislation to reduce its emissions, incentives anddisincentives, such as the proposed South Africangeneral carbon tax announced to take effect in 2015, willsoon become a reality. In preparation for these measures,and as a responsible corporate citizen, Sentula has, overthe last three years, improved its carbon emissionsmonitoring across the Group. The most effective way toreduce emissions is to first understand the origin of theorganisation’s emissions and how they respond tobusiness conditions, before mitigation measures areimplemented.Engaging with stakeholdersOur relationships with our stakeholders define theway we conduct our business. Our stakeholders giveus our licence to operate and without them wewould not be able to build a sustainable future.Stakeholder engagement is important in minimising theGroup’s reputational risk. As highlighted by recent unrestin the mining sector, failure to engage effectively withstakeholders can affect a business’ sustainability. Sentula’sprimary stakeholder groups include shareholders,employees, trade unions or representatives of organisedlabour, local communities, clients and governmentauthorities. Further stakeholders include, but are notlimited to, suppliers, contractors, business partners, themedia and non-governmental organisations (“NGOs”).Sentula believes that open and transparent dialogueshould form the basis of its interaction with variousstakeholder groups. Stakeholder engagement takesplace in all areas of the business, both at a functionallevel and at a higher strategic level. Sentulaacknowledges that without constructive input from theGroup’s stakeholders and commitment from them touphold Sentula’s business principles and values, thebuilding of a sustainable business cannot be achieved.

Sentula Mining Limited Integrated Annual Report 201349CommunityHistorically there have been a number of challenges withregard to stakeholder engagement at NkomatiAnthracite. In the last two years, through dedicatedcommitment to improving relationships with allstakeholders, Nkomati Anthracite has addressed thesechallenges. Nkomati Anthracite has invested significanttime and resources in engaging with the localcommunities, governmental departments, NGOs, thetribal authorities and local municipal structures.A community mining forum has been established withrepresentatives from local communities, miningcommittees, the mine itself and tribal authorities. Theobjective of this forum is to, once fully operational, meetregularly to assist with the implementation of theoperations’ approved social and labour plan, theidentification of community projects and to provide aplatform for grievances to be discussed and resolved.Sentula strives to establish good relationships withgovernments at national, regional and local levels in allthe regions in which it operates. The Group remainscommitted to meeting all the legal requirementswherever it operates to ensure the sustainability of theGroup. All subsidiaries continue to maintain goodrelationships with the DMR and the Department ofLabour and comply with the provisions of the applicableoccupational health, safety and environmental legislation.Strategic objectivesOverviewSentula aspires to be recognised as a responsible andethical organisation. Sustainable development goals arein line with this aspiration and through a continuousprocess of review Sentula aims to consistently improve itsperformance in the areas of sustainability and responsiblemining. In line with mining industry objectives, Sentulaaims to be a zero harm company.Sentula identified the following focus areas forimprovement in the previous year and remains focused inthese areas:hhSafety, in line with mining industry objectives Sentulaaims to be a zero harm company;• Complacency• Adherence to policies and procedureshhQuality of sustainable development reporting data andstructures.The focus on safety was driven by continued and everincreasing adherence to ISO and OHSAS standards andtraining. Improving the quality of sustainabledevelopment information was a major drive over thereporting period and to this end training on the monthlysustainability reports received from each subsidiary wasintroduced.

Sentula Mining Limited Integrated Annual Report 201350Sustainability report continuedSentula’s performanceKey performance indicatorsTo monitor progress in the field of sustainable development, KPIs are used to highlight the achievement of annualperformance. During the previous reporting period, targets were set for those KPIs identified and the following table reflectsperformance against these targets:Keyperformanceindicator Measure 2012Target2013 2013QuickmeasureTarget2014SafetyClassified injury frequency1,65 1 0,29 ✓ 0,25rate*Total injury frequency rate* 4,2 5 2,82 ✓ 2,5Fatalities 1 0 0 ✓ 0Health New cases of occupationaldiseasePercentage of employeesundergoing HCTEnvironment Retention of ISO 14001certificationBlack economicempowermentEmploymentTrainingStakeholdercomplaints* Per million man hours workedObtaining ISO 14001certificationNumber of monetary fines orsanctions related to noncompliancewithenvironmental legislationNumber of environmentalincidentsPercentage procurementspend with dtiPercentage of HDSAs inmanagementPercentage femaleemployees in managementPercentage femaleemployees in the GroupNumber of training hoursundergone by employeesand contractorsNumber of issues raised bystakeholdersRetentionat Benicon,Geosearchand JEF10 0 0 ✓ 076% 80% 42% ✘ 80%Retentionat Benicon,Geosearchand JEFRetentionat Benicon,Geosearchand JEF✓Retentionat Benicon,Geosearchand JEFn/a n/a n/a Ritchie2 0 0 ✓ 09 0 1 ✘ 046,7% 50% 41% ✘ 62%61% 62% 49% ✘ 50%11% 13% 14% ✓ 15%7% 8% 9% ✓ 10%42 840 hours 50 000 hours 96 330 hours ✓ 95 000 hours6 5 1 ✓ 0

Sentula Mining Limited Integrated Annual Report 201351Safety firstThe safety of our people is non-negotiable andwe have implemented a range of systems andstandards to drive progress in this central aspectof our business.The safety of Sentula’s people remains fundamental toits business. Sentula continues to strive for improvementsand the achievement of the Group’s safety goalsthrough collective responsibility, commitment andcontinued focus.During the previous year, Sentula achieved a CIFR of1,65 and a TIFR target of 4,2 (per million man hoursworked). For the year under review, we achieved a CIFRof 0,29, a TIFR of 2,82 and zero fatalities. This representsa marked improvement in the field of safety performanceyear-on-year and is demonstrative that the strategy ofreducing the minor incidents, which in turn results in areduction in classified injuries, is producing results.Group safety performance*876543210CIFRTIFRBenicon safety performance*3,53,02,52,01,51,00,50,0CIFR2011 2012 2013TIFR* Per million man hours worked2011 2012 2013Geosearch safety performance*1210864203,53,02,52,01,51,00,50CIFRCIFR2011 2012 2013TIFRJEF safety performance*2011 2012 2013TIFRDuring the past three years, the Group continued toinvest in improving and upholding the Group’s safetystandards. A set of best practices not only includes inputfrom clients but also draws heavily on operationalexperience. These practices can only be developed andsupported through the maintenance of a strict reportingdiscipline which records all incidents and near misses andwhich communicates these in a way that encompasses alllevels of the Group. Through a process of disseminationand discussion, not just on each incident but also on howto eliminate the causes and implement the appropriaterisk mitigation strategies, Sentula has gained valuableinsights which are shared across the Group, with thesubsidiary SHEQ managers assisting in training andauditing across other entities within the Group.Sentula has accepted the OHSAS 18001 as a targetstandard to be achieved across the Group. Benicon,Geosearch and JEF have retained their OHSAS 18001certifications during this year. The ISO certificationprocess can be a lengthy one and the Group continuesto work towards obtaining certification at each of itsremaining subsidiaries.

Sentula Mining Limited Integrated Annual Report 201352Sustainability report continuedRitchie achieved ISO 9001 certification during thisreporting period. This quality standard ensures the highstandard of systems work, not only within the Group, butalso in those to which work is outsourced.Safety improvement initiativesThe Group has implemented a number of safetyimprovement initiatives. Most of these safety initiativestake place at subsidiary levels which are specific to thetype of activities undertaken in that subsidiary. Not onlyare subsidiaries effective in encouraging and improvingsafe working practices within their organisations, but thecross-pollination gained from their learnings can beadded to the collective safety of the Group.The focus of many of the initiatives involves training, bothto increase the capacity of supervisors to manage safetythrough the use of risk assessments and standardoperating procedures as well as by increasing theawareness of employees to safety procedures.A great deal of attention is given to improvingoccupational skills that will have a direct benefiton safety outcomes. These include courses on collisionavoidance, working with hazardous substances, workingat heights and building knowledge on mine standardsand procedures.Benicon and JEF make use of fatal risk standardequipment which is fitted to all their vehicles. A totalvehicle management system, which uses GPS tracking ofthe entire fleet, was implemented in Benicon, JEF andCCT. Management is able to use and analyse the datareceived through this system to monitor the causes ofaccidents and develop a risk aversion strategy.During the year, management implemented apsychomotor performance profiling programme for all itsdrivers and operators. This assessment details theemployee’s ability to concentrate under monotonousconditions, judgement, decision-making, reaction speed,tolerance to stress, ability to judge speed and distance,etc. This will enable management to make betterdecision with regards to fleet management.HealthThe health of our employees has a direct bearingon their ability to perform safely and productively inthe workplace.The Group maintains strict adherence to the provisions ofthe Occupational Health and Safety and Compensation forOccupational Injuries and Diseases Acts. The preventionand monitoring of occupational illnesses is accomplishedthrough continuous assessment of workplace risks, strictadherence to the use of personal protective equipmentand regular medical surveillance. Risks identified within theGroup include exposure to dust and noise as well asdiseases such as malaria and access to clean drinkingwater on some of the more remote exploration sites. Nonew incidents of occupational diseases were reportedduring the year within the Group.Working in remote areasWhile many of Sentula’s subsidiaries operate mainlywithin South Africa and have limited exposure to remotework sites, many of the drill crews within the Geosearchbusiness operate in remote areas. In such cases allemployees are provided with proper camp facilities,ranging from tented camps to pre-fabricated housing,which are managed by a sufficient number of supportstaff. Drinking water is sourced and tested as part of thecamp establishment. Pre-medical and post-medicalcheck-ups are conducted and inspections and audits areregularly undertaken to ensure camps and operating sitescomply with Group policies and procedures.Prevention of infections such as malaria in remote areason the African continent remains a constant challenge.Employees operating in malaria risk areas receive trainingin the prevention of malaria. Campsites are routinelyfogged and employees are provided with mosquitorepellents, medication and medical treatment whererequired. Vaccinations are also provided to employeesworking in risk areas for yellow fever and typhoid fever.WellnessSentula acknowledges its responsibility to provide a safeand healthy working environment and to nurture thewellness of its employees. Executives undergo an annualmedical exam. Entrance and exit medical assessmentsare conducted on operators. Apart from ensuring fitnessfor work, these medical assessments assist with the earlyidentification and treatment of chronic illnesses such asdiabetes, hypertension and tuberculosis, and giveemployees an opportunity to undergo HIV counsellingand testing. During these examinations, advice onhealthy eating, fitness and weight managementis provided.Occupational diseases which are diagnosed inemployees are reported for workman’s compensationand these employees are assisted where possible.During the current year, Geosearch undertook anawareness campaign, “Movember”, focusing on malecancers.HIV/AIDSSentula acknowledges the effects of HIV/AIDS on itsemployees, clients and the communities within which itoperates. Sentula aims to minimise the social, economicand developmental consequences of the disease bytaking considered measures to prevent the spread of thevirus through education, the provision of condoms andHCT for all employees.

Sentula Mining Limited Integrated Annual Report 201353Sentula’s ongoing HCT campaign has reached 42% of allemployees during this reporting period. Testing takesplace bi-annually and is carried out on a site by site basiswithin the subsidiaries. Although this figure demonstratesa downturn in the number of employees participating ascompared to the previous years’ 76%, it does notdemonstrate a decline in focus. Participation of HCTtesting has varied across the Group but in general theresponse has been well received. All HCT testing isconfidential and carried out in a strategic partnershipwith either the Department of Health or NGOs thatspecialise in HCT programmes. Employees not only haveaccess to HIV/AIDS programmes within the Group, butare also exposed to programmes facilitated by our clientsat the host mines or through induction training.Minimising our environmental footprintWe are committed to sound environmental practiceand aim to minimise our impact in the areas inwhich we operate.Sentula remains committed to responsible mining andconstantly reviews all its environmental procedures toensure it is compliant with environmental legislation. Inaddition, it is cognisant of technical innovations whichmay assist in reducing its environmental footprint.Sentula’s contracting mining businesses adhere to theenvironmental policies and standards which their hostmines have in place, as well as to Sentula’senvironmental framework.ISO 14001 certification, a voluntary measure ofenvironmental compliance and maintenance of industrystandards for environmental management, remained avaluable tool within the business to ensure compliancewith environmental best practice. During this reportingperiod Benicon, JEF and Geosearch retained theirISO 14001 certifications. Following on the successfulISO 9001 certification, Ritchie plans to begin preparationsfor the ISO 14001 certification process.Environmental incidents and sanctionsOver the last three years Sentula has placed an increasedfocus on compliance to environmental legislation andbest practice. In the current year only one environmentalincident took place; a diesel spillage on one of Benicon’shost mining sites. The area was rehabilitated to bestenvironmental practice and disciplinary action was takenagainst the operator responsible for the incident. NeitherSentula nor any of its subsidiaries received any sanctionsfor environmental non-compliance for the currentreporting period.Subsequent to the 2013 financial year-end, Nkomatireceived notice that the DWA had opened a case againstNkomati in 2011, for transgressions under the NWA,including operating without a water use licence. The casewas investigated by the DEA, who added charges relatingto unlawful activities commenced under the NEMA.Nkomati was issued with a water use licence by the DWAin October 2012. In 2011 Nkomati applied for a section24G application, for the rectification of the unlawfulactivities commenced under NEMA. After carefulconsideration of all relevant circumstances, including thatit would be in the best interest of all stakeholders formining operations to recommence, Nkomati decided toplead guilty to eight charges, including those charges inrelation to historical alleged contraventions, which aroseprior to 2007. Nkomati entered into a plea and sentenceagreement with the State, in terms of section 105A of theCriminal Procedure Act, No 51 of 1977. As a result of thisdecision Nkomati was fined R5 million, of which R1 millionwas suspended.The Group continues with its efforts to comply with allapplicable environmental laws.Carbon footprintSentula operates in a resource-challenged environment.The Group has committed itself to identifying initiativesto optimise its resource consumption and reduce itsgreenhouse gas emissions. During the year, a total of5 550 kg of paper, representing 32% of all paper usedwithin the Group, was recycled.Sentula is committed to protecting, managing andconserving water resources through monitoring itsmunicipal water use, as well as those boreholes uponwhich flow meters have been installed. Where possible,Sentula aims to install flow meters to facilitate reportingand resource conservation efforts. Current water usagestands at 20 070 kl, reduced by 28% from the previousyear due to the curtailment of certain operations andborehole monitoring.The Group’s carbon emissions continue to be monitoredthrough the measurement of electricity and dieselconsumption. The Group’s baseline currently stands at768 507 tonnes. The marked increase in the amount ofcarbon emissions resulted from improved reporting andthe inclusion of the flights within the internationaloperations at Geosearch. With improved reportingstructures and monitoring, Sentula seeks to gain agreater understanding of emissions going forward.Sentula sees reducing elements of its carbon footprint asa responsible business imperative. Diesel remains thelargest contributor to emissions within the Group. To acertain extent the nature of Sentula’s business means thatthese emissions are unavoidable but where possible waysto improve efficiencies are being investigated andimplemented.

Sentula Mining Limited Integrated Annual Report 201354Sustainability report continuedA continuing challenge across the Group is the theft ofdiesel from vehicles and storage tanks. This increase inthe number of litres of diesel used by the Group, not onlyaffects carbon emissions but also the bottom line of thebusiness. Improved internal controls and monitoringcontinues to be implemented in certain areas in anattempt to curb the problem. Maintenance of vehicles isalso a vital component of reducing carbon emissions. Allsubsidiaries have strict vehicle maintenance programmesin place, not only to increase the efficiency of thesemachines but also to maximise their availability.The control of hydrocarbons and the safe disposal thereofcan be a challenge. Within South Africa, Sentulasubsidiaries routinely recycle used oil and lubricants anddispose of all other hazardous waste responsibly throughaccredited waste disposal sites. During the year, Sentulasafely disposed of 219 tonnes of hazardous waste andrecycled 224 kl of oil and lubricants, representing 25% ofall oils and lubricants used within the business. Geosearchfaces a unique challenge as it operates in remote areas farfrom rehabilitation sites. As a result, Geosearch makes useof biodegradable lubricants as well as chemicals whichassist in the biodegradation of hydrocarbon waste toassist in soil rehabilitation.TransformationSentula recognises the importance of BBBEE, notonly for HDSAs, but for the development ofsustainable growth in all countries of operation.In South Africa, Sentula fully supports the principles oftransformation and uses the dti scorecard as the mainmechanism with which to measure progress. The Groupadheres to various requirements of the Mining Charterboth in its coal mining investments and through clients.Furthermore, it strives to uphold these standards in theway the Group is managed.Through the empowerment of our mining servicessubsidiaries, which became effective during this reportingperiod, Sentula aims not only to empower its people, butalso to maintain a competitive advantage in assistingclients to achieve their BBBEE procurement goals.Empowerment transactionsSentula is an overall Level 5 BBBEE contributor with themining services subsidiary, Sentula Contracting, being aLevel 4 contributor. During this financial year, Sentulaentered into a BBBEE transaction. In terms of thistransaction, Shanike Investments No 171 was establishedto acquire a 17% direct equity interest in SentulaContracting, which holds Sentula’s South African miningservices businesses. Following implementation of theBBBEE transaction, the South African mining servicesbusinesses achieved an effective black ownership of morethan 25%, as measured in terms of the dti Codes ofGood Practice.A further empowerment transaction was undertaken withShanike, to introduce Shanike as a 26% shareholder inSentula’s wholly owned subsidiary Benicon Mining, whichholds Sentula’s Bankfontein coal projects, and whichresulted in Benicon Mining achieving a 26% HDSAownership, as required in terms of the Mining Charter.The results of these empowerment transactions aredetailed on page 117 of this report.ProcurementIn accordance with Sentula’s preferential procurementpolicy and strategy, the Group has implemented apreferential approach with particular emphasis on smalland medium-sized enterprises and actively seeks out newblack empowered businesses that can be linked into theGroup’s supply chain. In addition, Sentula considersenterprise development and job creation opportunitiesfor qualifying small enterprises (“QSE”) in the delivery ofsupport services such as security, wash bays,accommodation, transport and catering.During this reporting period, Sentula had a totaldiscretionary procurement spend in excess of R1,79 billionof which 41% was spent on BEE compliant suppliers, 11,1%was spent on small and medium-sized suppliers, 4,2% wasspent on 50% black-owned suppliers, and 0,6% was spenton 30% black woman-owned suppliers.As the majority of the capital equipment and machineryutilised in the performance of the business is notmanufactured in South Africa, preferential procurementpresents a challenge. Wherever possible, a determinedeffort to source goods and services from accreditedBBBEE suppliers and service providers is prioritised. Atall operations, both in and outside South Africa, theGroup makes every effort to uplift local communities bysupporting surrounding businesses and hiring oflocal people.Management control and employmentequityEmployment equity is a strategic business imperativeand Sentula believes that its implementation is central togood human resource management and excellentcustomer service to a broad and diverse stakeholder base.Sentula is an equal-opportunity employer and does nottolerate any form of discrimination. The Group seeks toinstil a genuine culture of transformation within theorganisation and is committed to increasing the numberof HDSAs in management positions. Managementcontrol in the day-to-day running of the Group is

Sentula Mining Limited Integrated Annual Report 201355conducted by executive directors with a minimum of 30%black representation. Three of the Group’s eight Boardmembers are HDSAs, one of whom is a woman.Sentula’s management structure comprises 49% HDSAsin total and 14% women. The total percentage of HDSAsin management has reduced by 13% this year,predominantly as a result of the large reduction in theoverall staff complement stemming from the recentrestructuring and consolidations. To sustain and supporta trend for increased representation, preference is givento women and HDSA candidates in Sentula’s recruitmentprocess. Employment equity committees meet regularlyto discuss employment equity policy, vacancies,promotions, training and skills development.Management control35%10%4%51%Non-HDSAWhite femaleBlack, Colouredor Indian malesBlack, Colouredor Indian femaleSkills development and trainingLearning and development form an integral partof Sentula’s employment strategy assisting in thetransformation of the business. Sentula retains theservices of several training and skills developmentinstitutions to meet its succession planning objectives forthe facilitation of the advancement of employees withinthe organisation. Formal training initiatives have beendeveloped to provide for succession planning within theGroup. Employees also participate in Company-specificinduction training at all the operational sites.A total of 96 330 hours of training took place across theGroup during the review period, a 125% increase fromthe previous year. This increase in training hours isattributed both to the drive towards safety training andincreased focus on reporting the recorded training hours.The Benicon in-house training academy was launched in2011. A range of training programmes are offered toBenicon employees including supervision, management,planning and organisation, safety management,mentorship and employment equity. Benicon employeesare also included in some of the Anglo trainingprogrammes such as the Medium Voltage Switchingcertificates for electricians and safety leadership and riskmanagement programmes.Enterprise and socio-economicdevelopmentThe Sentula Transformation Trust (”the Trust”) was set upto regulate and coordinate our approach to socioeconomicand enterprise development and to allocatefunding for approved projects in these areas. Investmentis conducted in line with the dti’s Codes of GoodPractice. The Trust supports local development projectsin close proximity to the Group’s operations, preferablywithin communities where Sentula employees and theirfamilies reside. The Trust aims to support thedevelopment of projects that are complementary toexisting institutions or initiatives pursued by governmentagencies, private investors, community-based organisationsand NGOs. The Trust differentiates between communityactivities that are largely philanthropic in nature andthose that have a more direct business benefit.Case study – CCT tuck-shopCCT assisted with the establishment of a tuck-shopat one of their host sites in the Steelpoort area. Thetuck-shop provides permanent employment for onelady from the local community. Water and electricitycosts are funded by CCT. The costs amount toapproximately R3 000 per month to maintain thisproject and had an initial establishment cost ofR40 000.Benicon developed a number of small enterprises aroundits business and continues to support those projects,including the Enthembeni children’s home project inwhich a vending machine was placed at the Beniconoffices and is serviced by the orphanage. All proceeds goto the home. In an ongoing paper recycling project inassociation with the Witbank Society for the PhysicallyDisabled, shredded waste paper is donated to theorganisation which benefits from the proceeds ofrecycling. A local enterprise which delivers partsto Benicon Sales premises has also been established.This enterprise makes use of a Benicon vehicle, at nocost, and invoices the Company for deliveries made. AtCCT, transport services for employees are provided freeof charge through taxi operators sourced from the localarea. These taxi operators are given the opportunity togrow with the Company and have been trained withrespect to correct administration, financial considerationsand sustainability.

Sentula Mining Limited Integrated Annual Report 201356Sustainability report continuedOur peopleSentula has an organisational culture that is built on thefoundations of diversity, equality and dignity for all itsemployees.Employee statistics* 2013 2012Total employees 2 308 3 321Male employees 2 100 3 074Female employees 208 274Non-HDSA in management 234 282HDSA in management 229 443Females in management 65 81* SA operations only and excludes Geosearch internationalemployees of 569The South African workforce is made up of 2 308 people.The majority work at the Group’s subsidiaries locatedprimarily in the Mpumalanga and Limpopo provinces.Sentula has been affected by the downturn within themining industry. The nature of its business is such thatemployment is often project based where employees arehired on limited duration contracts. Where contractsexpire, Sentula endeavours to redeploy employees tonew projects where possible. During this reporting periodthe total number of employees reduced from 3 321 to2 308 as a result of the winding down of Megacube andthe restructuring of Geosearch.Staff retentionTo maintain consistently high working and safetystandards, the Group aims to attract and retain the bestemployees in the industry. In addition, Sentula strives toemploy people from the communities that surround itsoperations. Training opportunities and study assistanceare offered to facilitate the development of its people.Salaries are reviewed annually to ensure that they remaincompetitive.Despite the Group’s efforts, staff retention in theorganisation remains a challenge, particularly in technicalpositions such as crane operators, artisans and drillassistants, where skills are scarce. Skills shortages in theseareas continue to lead to intense competition in thecontract mining industry. To ensure staff retention,competitive, market-related salaries are offered andsome of the subsidiaries provide bonuses for thoseemployees in possession of scarce skills. Where possible,learnerships and training focus on scarce skill areas todevelop people within the organisation for such roles.Retention of these new skills in the long run can also bea challenge.Case study – JEF soccerteamThe JEF soccer team was founded in 2012, when aJEF employee requested that the company sponsora soccer ball. A week later a request was made forsoccer boots. This request was made on the basisthat the company pays for the items and thendeducts it from the employees’ salaries.Management at JEF decided to work with theemployees to create a JEF soccer team and nowsponsors complete soccer kit and transport for theteam. All players, coaches and caretakers areemployees of JEF. The team plays against differentlocal companies’ teams, for charity and to keep fit.Women in miningOur workforce currently comprises 9% female employees(increased by 2% from 2012), and 14% of managementpositions are occupied by women (increased by 2,8%from 2012). Although the recruitment of women remainsa challenge due to the nature of the business, by activelyengaging with women in the recruitment processes andsetting targets for the subsidiaries, the Group hopes tocontinuously improve on these figures going forward.The prioritisation of women in training initiatives andlearnerships ensures that they gain the exposure theyneed to play an increasingly important role in thebusiness.Management by gender14%Females inmanagementMales inmanagement86%

Sentula Mining Limited Integrated Annual Report 201357Workforce by gender9%91%Male employeesFemale employeesTo attract and retain female employees, it remainsSentula’s responsibility to provide a working culture thatensures women are treated with respect. A policy is inplace to ensure that all the Group’s employees can worktogether in an atmosphere free of all forms of harassmentand intimidation. There is also no discrimination orunequal treatment in matters of remuneration andbenefits. Sentula’s female employees also benefit fromthe Women in Mining initiatives of host mines and atits operations. The Group continues to makeconsiderable progress in the provision of a workingenvironment that is suitable for women, such as mobiletoilets in opencast mines and improved change housefacilities.Learning and developmentLearning and development is seen as an integral partof the business. It not only improves the skills of theworkforce and empowers employees, but also providesan opportunity to plan for the future skills needed withinthe organisation.The Group provides a range of formal learnerships, withparticular emphasis on historically disadvantaged menand women, to ensure that as an organisation, the Grouppresents a true reflection of the diverse populations ofthe countries in which it operates. This year, 157 peoplewere employed in formal learnerships. These learnershipswere predominantly in the scarce skill areas of artisansand vehicle operators. As part of the evening classesoffered at Benicon, ABET, an adult education programmedesigned to teach literacy and numeracy, is also offered.This year 57 students are involved in ABET.Sentula focuses on developing staff internally, and onlyadvertises posts externally if the necessary skills andexpertise are not available within the organisation.Employees are encouraged to develop themselves andSentula subsidises their attendance at courses that willimprove their competencies at work. During thisreporting period, 37 bursaries were offered for furtherstudies and 61 employees were given managementtraining.Employee relationsIn South Africa, employees have the right to freedom ofassociation in terms of the South African Constitution andthe Labour Relations Act. Sentula engages in transparentand constructive consultation both with employees andtheir representatives. Through continuous consultation,Sentula enjoys a sound relationship with the unions andin 2013, the Group successfully concluded wagenegotiations in most of the businesses.Group employees are represented by a range of unions,including the National Union of Mineworkers, theWorkers Equality Support Union of South Africa, theEl Shadaai Workers Union of South Africa and theAssociation of Mineworkers and Construction Union.Geosearch experienced three incidents of industrialaction within its international operations, one at Zaniin the Democratic Republic of Congo and two in IvoryCoast. The two-day strike at Zani, related to salaryincreases, was resolved with the HR Officer. In IvoryCoast, both strikes related to allowances andremuneration and were resolved.HousingSentula’s policy is to encourage sustainableaccommodation and home ownership for all employeesin the areas in which it operates. Hostel accommodationcontinues to be phased out and replaced with a housingallowance or in some cases an interest-free loan for thepurchase of building materials.CommunityBEE, enterprise development and the creation ofsustainable employment are the focus areas of Sentula’scommunity development programme, which seeks touplift the people who reside in all its areas of operation.Sentula’s social footprint in South Africa includes thecommunities of Emalahleni, Middelburg and Nkomazi inMpumalanga as well as Steelpoort in the Limpopoprovince. In addition, through Geosearch, its footprint isextended across eight countries on the African continent.Corporate social investment (“CSI”)Sentula believes business entities have a responsibilityto give back to the communities in which they operate.Many of the communities that reside around theoperations are faced with a multitude of socio-economicchallenges, including poverty, unemployment andHIV/AIDS.

Sentula Mining Limited Integrated Annual Report 201358Sustainability report continuedAside from the Sentula Transformation Trust’scontribution to socio-economic development, theGroup’s companies invest financial and human capitalinto various charitable causes as well as into awarenesscreation on HIV/AIDS. Benicon is involved in numerousCSI projects in the communities surrounding theiroperation (see “Case Study – Benicon gives back”).Ritchie also assists where possible on an ad hoc basis inthe local community, including golf days in support ofchild welfare and supporting local school sports teams.Ritchie provided pro bono crane services to erect theroof of a local church during the year. Geosearch hasinitiated an office recycling programme which runs inconjunction with a charity project. This project collectsbatches of reuseable office stationery which isdistributed to underprivileged students. CCT supportslocal businesses where possible, including a local taxicompany contracted for transport of employees.JEF is involved in a number of CSI activities includingblood drives in which the SA Blood Donor Associationvisits JEF’s premises every second month and allemployees are encouraged to participate in donatingblood. JEF is also involved in supporting a number oflocal schools and sports development, through variousschool supporters clubs. These clubs’ main focus is toencourage sport participation for underprivilegedchildren. Sports attire and sport tours are funded withJEF’s assistance. Monthly contributions are also made tothe SAVF house for the elderly and Hospice.Case study – Benicon gives backBenicon has a strong tradition of community social investment projects. During the year, a number of projects were runaimed at both local communities and the employees of Benicon itself.During the winter of 2012, Benicon donated bibles and blankets to each employee, which were handed out on site withthe assistance of a local pastor. The slogan used in this campaign was “a blanket to warm the body and a bible towarm the heart.”Benicon started a blood donation campaign in 2013. This project has been ongoing with blood donation clinic daystaking place at regular intervals throughout the reporting period.Benicon facilitated the collection of cans of food and blankets which were donated to various charities aroundEmalahleni, including Child Welfare. Benicon sponsored a trip to Gold Reef City Theme Park for the children fromEthembeni Children’s Home. For many of the children it was their first trip to a theme park. In addition, some of theBenicon employees volunteered to spend their 67 minutes on Mandela day at the home.

Sentula Mining Limited Integrated Annual Report 201359Case study – Benicon gives back continuedIn celebration of Arbor Day, a tree planting day was held at Benicon’s head office. Not only did the employees have funbut the resulting trees improve the head office environment and assist in the uptake of carbon emissions.Environmental and social complaintsSentula takes any complaints received regarding itsoperations very seriously. Even when the source of thecomplaints occurs on its host mine’s sites, the incident isviewed in a very serious light and appropriate action istaken to mitigate these effects and engage with thecomplainants.Community relocationsNo grave or community relocations took place inthis review period.

60Sentula Mining Limited Integrated Annual Report 2013

Sentula Mining Limited Integrated Annual Report 2013Consolidated annual financial statementsfor the year ended 31 March 201361CONTENTSDirectors’ responsibility and approval 62Certificate of the Company Secretary 62Audit and Risk Committee report 63Independent auditors’ report 65Directors’ report 66Consolidated statement offinancial position 70Consolidated income statement 71Consolidated statement ofcomprehensive income 71Consolidated statement of cash flows 72Consolidated statement of changesin equity 73Operational segment reporting 74Notes to the consolidatedfinancial statements 77

Sentula Mining Limited Integrated Annual Report 201362Directors’ responsibility and approvalThe directors are responsible for the maintenance ofproper accounting records and the preparation, integrityand fair presentation of the Group annual financialstatements and annual financial statements of SentulaMining Limited. These financial statements comprise thestatements of financial position at 31 March 2013, theincome statements, the statements of comprehensiveincome, changes in equity and the cash flows for the yearended 31 March 2013, and the notes to the financialstatements, which include a summary of significantaccounting policies and other explanatory notes and thedirectors’ report, in accordance with InternationalFinancial Reporting Standards and in the mannerrequired by the Companies Act of South Africa. Thesefinancial statements include amounts based onjudgements and estimates made by management.The directors are also responsible for the Group’s systemof internal control. This responsibility includes designing,implementing and maintaining internal controls as thedirectors determine it necessary to enable thepreparation and fair presentation of financial statementsthat are free from material misstatement, whether due tofraud or error.Sentula Mining Limited and its subsidiaries operate in awell-established control environment, which is welldocumented and regularly reviewed. This incorporatesrisk management and internal control procedures, whichare designed to provide reasonable, but not absolute,assurance that assets are safeguarded and the risksfacing the business are being controlled.The Group’s outsourced internal audit function, whichoperates unimpeded and independently fromoperational management, and has unrestricted access tothe Group Audit and Risk Committee, assesses and,where necessary, recommends improvements in thesystem of internal controls and accounting practice basedon audit plans that take cognisance of the relativedegrees of risk of each function or aspect of the business.The directors have reviewed the Group’s cash flowforecasts for the year ended 31 March 2014, andalthough the forecast does not indicate the inability toredeem the Group’s debt obligations in the ordinarycourse of business, certain financial covenants areexpected to be breached during this period. The debtservice cover ratio and total debt to EBITDA covenantswere breached at 31 March 2013, and are expected to bebreached during the course of the 2014 financial year.The Group’s future prospects and financial stability isdependent on the ongoing condonation of thesecovenant breaches, to the extent required during thecourse of the 2014 financial year. The directorsacknowledge that, in the context of the prevailingeconomic environment, the Group’s debt levels areexcessive, in relation to the Group’s cash generation. Toreduce Group debt levels, the directors are pursuing anumber of initiatives in the short term, which are alludedto in note 34 of these financial statements.The annual financial statements of the Group andCompany have been audited by the independentaccounting firm, PricewaterhouseCoopers Inc. Theexternal auditors were given unrestricted access to allfinancial records and related data, including minutes ofall meetings of shareholders, the Board of Directors andcommittees of the Board. The directors believe that allrepresentations made to the independent auditorsduring the audit are valid and appropriate.PricewaterhouseCoopers Inc.’s audit report is presentedon page 65.The financial statements were prepared under thesupervision of the Group Financial Director, GP LouwCA(SA), and approved by the Board of Directors on26 June 2013 and are signed on its behalf by:JG BestChairmanGP LouwChief Financial Officer/Finance Director26 June 2013RC BerryChief Executive OfficerCertificate of the Company SecretaryI certify that the Company has filed with the Companies and Intellectual Property Commission all returns and notices requiredof a public company in terms of the Companies Act, No 71 of 2008, in respect of the financial year ended 31 March 2013 andthat all such returns and notices are true, correct and up to date.Grace ChemalyCompany SecretaryJohannesburg26 June 2013

Sentula Mining Limited Integrated Annual Report 2013Audit and Risk Committee report63The Audit and Risk Committee (“the committee”) ispleased to present this report as required by theCompanies Act (2008), of South Africa (“the CompaniesAct”).The committee is constituted as a statutory committeeof Sentula (“the Company”) and the Group in respectof its statutory duties in terms of section 94(7) of theCompanies Act, and a formal committee of the Boardof Directors (“the Board”) in respect of all other dutiesassigned to it by the Board.Role of the committeeThe committee has an independent role withaccountability to both the Board and to shareholders.The committee’s responsibilities include the statutoryduties prescribed by the Companies Act, activitiesrecommended by King III and the responsibilitiesassigned by the Board.The committee’s main responsibilities are as follows:Integrated and financial reportinghhreview the annual financial statements, interim report,preliminary results announcement and summarisedintegrated financial information and ensure compliancewith International Financial Reporting Standards andthe Companies Act;hhreview and approve the appropriateness of accountingpolicies, disclosure policies and the effectiveness ofinternal financial controls;hhperform a review of the Group’s integrated reportingfunction and progress and consider factors and risksthat could impact the integrity of the IntegratedAnnual Report;hhreview the sustainability disclosure in the IntegratedAnnual Report and ensure that it is consistent withfinancial information reported; andhhrecommend the Integrated Annual Report to theBoard for approval.Combined assurance modelEnsures that a combined assurance model is appliedto provide a coordinated approach to all assuranceactivities, and in particular the committee:hhensures that the combined assurance received isappropriate to address all the significant risks facingthe Company; andhhmonitors the relationship between the externalassurance providers and the Company, and takes theappropriate action where necessary.Finance function and Financial DirectorReview the expertise, resources and experience of theCompany’s finance function, and discloses the resultsof the review in the Integrated Annual Report. Thecommittee also considers and satisfies itself of thesuitability of the expertise and experience of theFinancial Director on an annual basis.Internal audithhreview and approve the internal audit charter and auditplans;hhevaluate the independence, effectiveness andperformance of the internal audit function andcompliance with its charter;hhreview the Group’s systems of internal control,including financial controls, ensuring that managementis adhering to and continually improving thesecontrols;hhreview significant issues raised by the internal auditprocess; andhhreview policies and procedures for preventing anddetecting fraud.External audithhact as a liaison between the external auditors and theBoard;hhnominate the external auditor for appointment byshareholders;hhdetermine annually the scope of audit and non-auditservices which the external auditors may provide to theGroup;hhapprove the remuneration of the external auditors andassess their performance; andhhassess annually the independence of the externalauditors.Risk managementhhensure that management’s processes and proceduresare adequate to identify, assess, manage and monitorenterprise-wide risks; andhhreview tax and technology risks, in particular how theyare managed.Compliancehhthe responsibility to facilitate compliance throughoutthe Company and the Group has been delegated bythe Board to the committee;hhthe committee ensures that the Company and theGroup comply with applicable laws and consideradherence to non-binding rules, codes and standards,and establish and maintain a compliance frameworkand process, legal compliance policy and compliancemanual, that is appropriate taking into account thecompliance risk profile of the Company.Generalhhreceive and deal appropriately with any complaintrelating to the accounting practices and internal auditof the Group or to the content or auditing of itsfinancial statements, or to any related matter; andhhperform other functions as determined by the Board.

Sentula Mining Limited Integrated Annual Report 201364Audit and Risk Committee report continuedComposition of the committeeThis committee is chaired by and comprises onlyindependent non-executive directors. In accordancewith the requirements of the Companies Act, membersof the committee are appointed annually by the Boardfor the ensuing financial year and in compliance withKing III are appointed by shareholders at the annualgeneral meeting.The executive directors attend all the committeemeetings by invitation. The external and internal auditorsare also invited to attend all committee meetings.The committee functions within an approved charterwhich is reviewed annually, and complies with all relevantlegislation, regulation and governance codes.The composition of the committee and meetingattendance are as follows:Committee member AttendedCor van Zyl (Chairman) 6Kholeka Mzondeki 6Rain Zihlangu 6Chief Finance Officer and the finance functionThe committee is satisfied that Mr Deon Louw has theappropriate expertise and experience for his position ofChief Finance Officer of the Company and the Group.In addition, the committee is also satisfied that thecomposition, experience and skills of the finance functionmeet the Group’s requirements.Annual financial statementsThe committee has evaluated the annual financialstatements for the year ended 31 March 2013 andconsiders that they comply, in all material aspects, withthe requirements of the Companies Act and InternationalFinancial Reporting Standards. The committee hastherefore recommended the annual financial statementsfor approval to the Board. The Board has subsequentlyapproved the annual financial statements, which willbe open for discussion at the forthcoming annualgeneral meeting.Approval of the Audit Committee reportThe committee confirms that it has functioned inaccordance with its charter for the 2013 financial yearand that its report to shareholders has been approvedby the Board.The committee discharges its responsibilities by:hhmeeting at least four times a year to review theGroup’s financial results, to receive and reviewreports from both the internal and external auditors,and to meet with management to review theirprogress on identifying and addressing key riskareas within the business;hhreporting to the Board at the next meeting, whichis always held within a week of the respectivecommittee meeting; andhhmeeting separately with the internal and externalauditors to confirm they are receiving the fullcooperation of management.Cor van ZylChairman: Audit and Risk Committee26 June 2013In conclusion, the committee confirms the following:Independence of external auditorsThe Audit and Risk Committee is satisfied as tothe independence of the Group’s external auditors,PricewaterhouseCoopers Inc., and its designatedaudit partner, Mr PC Hough. The committee nominatesPricewaterhouseCoopers Inc. as external auditor forthe reappointment by shareholders at the annualgeneral meeting.

Sentula Mining Limited Integrated Annual Report 2013Independent auditors’ report65We have audited the consolidated and separate financialstatements of Sentula Mining Limited set out on pages70 to 141 which comprise the statements of financialposition as at 31 March 2013, and the income statements,statements of comprehensive income, statements ofchanges in equity and statements of cash flows for theyear then ended, and the notes, comprising a summaryof significant accounting policies and other explanatoryinformation.Directors’ responsibility for the financialstatementsThe Company’s directors are responsible for thepreparation and fair presentation of these consolidatedand separate financial statements in accordance withInternational Financial Reporting Standards and therequirements of the Companies Act of South Africa, andfor such internal control as the directors determine isnecessary to enable the preparation of consolidated andseparate financial statements that are free from materialmisstatement, whether due to fraud or error.Auditors’ responsibilityOur responsibility is to express an opinion on theseconsolidated and separate financial statements based onour audit. We conducted our audit in accordance withInternational Standards on Auditing. Those standardsrequire that we comply with ethical requirements andplan and perform the audit to obtain reasonableassurance about whether the consolidated and separatefinancial statements are free from material misstatement.An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in thefinancial statements. The procedures selected depend onthe auditor’s judgement, including the assessment of therisks of material misstatement of the financial statements,whether due to fraud or error. In making those riskassessments, the auditor considers internal controlrelevant to the entity’s preparation and fair presentationof the financial statements in order to design auditprocedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit alsoincludes evaluating the appropriateness of accountingpolicies used and the reasonableness of accountingestimates made by management, as well as evaluatingthe overall presentation of the financial statements.Emphasis of matterWithout qualifying our opinions, we draw attention tonote 34 to the consolidated financial statements andnote 19 to the separate financial statements whichindicate that the Group and the Company incurred netlosses for the year ended 31 March 2013 of R899 967 000and R46 544 000, respectively. The notes indicate that theGroup breached its debt covenants and receivedcondonation of these subsequent to year-end. It alsoindicates that the Group’s future prospects and financialstability is dependent on the ongoing condonation ofthese covenant breaches, to the extent required duringthe course of the 2014 financial year. The notes furtherindicate that these conditions, along with other matters,indicate the existence of a material uncertainty whichmay cast significant doubt about the ability of the Groupand the Company to continue as going concerns.Other reports required by theCompanies ActAs part of our audit of the consolidated and separatefinancial statements for the year ended 31 March 2013,we have read the Directors’ Report, the AuditCommittee’s Report and the Company Secretary’sCertificate for the purpose of identifying whether thereare material inconsistencies between these reports andthe audited consolidated and separate financialstatements. These reports are the responsibility of therespective preparers. Based on reading these reports wehave not identified material inconsistencies betweenthese reports and the audited consolidated and separatefinancial statements. However, we have not audited thesereports and accordingly do not express an opinion onthese reports.PricewaterhouseCoopers Inc.Director: PC HoughRegistered AuditorJohannesburg26 June 2013We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for ouraudit opinion.OpinionIn our opinion, the consolidated and separate financialstatements present fairly, in all material respects, theconsolidated and separate financial position of SentulaMining Limited as at 31 March 2013, and its consolidatedand separate financial performance and its consolidatedand separate cash flows for the year then ended inaccordance with International Financial ReportingStandards and the requirements of the CompaniesAct of South Africa.

Sentula Mining Limited Integrated Annual Report 201366Directors’ reportfor the year ended 31 March 2013The directors have pleasure in submitting their report forthe 2013 financial year.Nature of businessThe Group derives its income from mining services,comprising: opencast contract mining, rehabilitation,earthworks, drilling and blasting services, explorationdrilling, crane hire and the mining of coal from itsinvestments in the Nkomati Anthracite mine. The CEO’sreport details the nature of each major subsidiary and theGroup’s coal investments. Sentula Mining Limited (“theCompany”) is the Group holding company.Financial resultsTurnover decreased by 17% from R2,5 billion toR2,1 billion however, the operating loss increased by107% from a loss of R420 million to a loss of R871 million,following equipment and goodwill impairments ofR511 million, a loss of R221 million on the disposal ofMegacube’s surplus equipment on auction and inventoryadjustments of R158 million. The impairment charge ofR187 million arose on the non-productive plant andequipment held by Geosearch and Benicon due tooperational or technological obsolescence.Finance charges reduced to R61 million from R67 millionin the prior financial year, following a net debt reductionof R160 million. A net loss of R900 million was realisedrelative to a net loss of R532 million for the previouscorresponding period, predominantly as a result of thenon-cash flow impairments and value adjustments,referred to in the preceding paragraph.The Group’s operations are vulnerable to volatility in thecommodity cycle and its capital structure is constitutedwith a combination of debt and equity at a level thatshould ensure robust debt servicing in all but the mostvolatile of operating conditions. As a consequence of thecollapse of exploration drilling in the domestic PGMsector, severe curtailment of exploration drilling in therest of Africa and operational problems beingexperienced in the Group’s opencast businesses, theGroup’s cash flow came under severe pressure during thepast financial year, resulting in breaches in the debtservice cover ratio (“DSCR”) and total debt to EBITDAratio (“TDR”) at 31 March 2013. These ratios weresubsequently condoned by the Group’s bankers inJune 2013.While the Group met all its obligations in the ordinarycourse of business during the 2013 financial year, andis expected to meet all its obligations during the 2014financial year, the Board believes there is merit inreducing the Group’s debt by approximatelyR150 million, in the manner referred to in note 34 tothe annual financial statements, to ensure that theGroup remains financially robust in the prevailingvolatile economic environment.While the Group’s senior debt levels have reduced byR160 million, the Group’s net debt to equity ratioincreased from 22% to 29%, as a consequence of thelower equity base given the losses incurred in the 2013financial year.The Group’s cash generation from operating activitiesdeteriorated substantially from R230 million to R94 millionwhich, in conjunction with a net outflow of R90 millionfrom investing activities and a net outflow of R146 millionfrom financing activities, resulted in a net decrease incash and cash equivalents of R142 million for the 2013financial year. The net decrease in cash and cashequivalents of R142 million contributed to a decline inthe Group’s cash holding from R180 million in the prioryear to R53 million at 31 March 2013.The Group continued to invest in new and refurbishedplant and equipment, albeit at a reduced rate, relative tothe prior year, with R215 million invested during the 2013financial year, relative to R292 million invested in the priorfinancial year.The Nkomati mine’s operations are still suspendedhowever, all approvals have been received torecommence mining and the final review processesare being conducted in anticipation of miningrecommencing in the near future.Basic earnings per share for the 2013 financial year werenegatively impacted by the large net loss and decreasedto a loss of 150,6 cents relative to the loss of 88,93 centsper share for the prior year. Headline earnings per sharesimilarly decreased to a loss of 27,0 cents relative toearnings of 21,7 cents per share for the prior year.Forensic investigation and litigationFollowing conclusion of a settlement agreement with theMarinvia Trust and CIMS Trust, an amount of R40 millionwas received in April 2013 by the liquidators ofScharrighuisen’s estate, in full and final settlement of allclaims against these entities, of which R24,4 million waspaid to Megacube and a further R10 million is expectedto be received by Megacube, from the liquidators, by theend of July 2013.Going concernThe Board has reviewed the going‐concern assessmentfor the Group for the 12 months ending 30 June 2014and reports on its finding and action plans in note 34to the annual financial statements.Share capitalFull details of the authorised and issued share capital ofthe Company are set out in note 20 to the annualfinancial statements. No new shares were issued duringthe year under review. Unissued shares are not under thecontrol of the directors.

Sentula Mining Limited Integrated Annual Report 201367Dividends to shareholdersIn light of the prevailing global economic conditions andthe Company’s cash requirements for debt redemption,the directors have considered it prudent not to declareany dividends for the 2013 financial year.DirectorateThe following changes to the Board took place duringthe year under review:ResignationsEHJ Stoyell resigned as independent non-executivedirector on 17 September 2012. There were no furtherresignations during the 2013 financial year.AppointmentsThere were no appointments during the 2013financial year.The directors of the Company and abridgedcurriculum vitae for each director are set out onpages 13 to 15 of this report.Directors’ remuneration and shareholdingDetails of the directors’ remuneration are set out innote 36 to the annual financial statements and details ofdirectors’ shareholdings are set out under “Shareholders’information” on page 142.Director’s interests in contractsNo material contracts, in which directors have aninterest, were entered into during the year, other thanthe transactions detailed in note 32 on page 116.Company Secretary and registered officeMs GM Chemaly continued to fulfil the function asfull‐time Company Secretary for the year underreview. At the date of this report, she was still theCompany Secretary.The Company’s registered addressGround Floor – Block 14The Woodlands Office ParkWoodmead, GautengSouth AfricaThe Company’s postal addressPO Box 76, Woodmead, 2080, South AfricaAcquisitionsThere were no acquisitions during the 2013 financial year.Employee share incentivesDetails of the Group’s share incentive schemes aredetailed hereunder and in note 6 to the annualfinancial statements.

Sentula Mining Limited Integrated Annual Report 201368Directors’ report continuedfor the year ended 31 March 2013The Group operates an employee share incentive scheme as disclosed in note 6 to the annual financial statements.The following changes took place during the year under review:Directors Staff TotalAwards/options at the beginning of the year 19 581 000 35 828 780 55 409 780Options granted during the year – – –LTIPs granted during the year – 4 125 000 4 125 000Lapsed options – (3 817 000) (3 817 000)Options exercised and delivered (1 018 000) (4 343 000) (5 361 000)Awards/options balance at the end of the year 18 563 000 31 793 780 50 356 780Historical information regarding directors’ unexercised share options at 31 March 2013 is as follows:Share options at1 April 2012StrikepriceNumber(R)Share options grantedduring the yearStrikepriceNumber(R)Share options exercisedand taken delivery ofStrikepriceNumber(R)Share options at31 March 2013StrikepriceNumber(R)DirectorRC Berry 1 600 000 10,00 – – – – 1 600 000 10,003 200 000 2,23 – – – – 3 200 000 2,231 400 000 2,77 – – – – 1 400 000 2,77GP Louw 2 000 000 20,00 – – – – 2 000 000 20,004 000 000 2,23 – – – – 4 000 000 2,232 980 000 15,53 – – – – 2 980 000 15,53PP Modisane 300 000 14,28 – – – – 300 000 14,28600 000 2,23 – – – – 600 000 2,23447 000 12,23 – – – – 447 000 12,2316 527 000 – – 16 527 000Historical information regarding directors’ unexercised LTIPs at 31 March 2013 is as follows:LTIPs at1 April2012LTIPsgrantedduringthe yearLTIPsexercisedLTIPslapsedLTIPs at31 March2013Director Number Number Number Number NumberRC Berry 1 341 000 – (447 000) – 894 000GP Louw 1 155 000 – (385 000) – 770 000PP Modisane 558 000 – (186 000) – 372 0003 054 000 – (1 018 000) – 2 036 000

Sentula Mining Limited Integrated Annual Report 201369Borrowing powersIn terms of clause 29 of the Memorandum ofIncorporation, the Company has unlimitedborrowing powers.The Group’s senior debt facilities, comprise aR700 million facility from a Standard Bank-ledconsortium and a R100 million vehicle asset financefacility from WesBank. Advances under these facilitieshave been suspended as a consequence of breaches inthe DSCR and the TDR (as disclosed in note 34 of theannual financial statements). The Board is consideringa number of initiatives to reduce the Group’s seniordebt and source funding for the Group’s capitalinvestment programmes.The future growth of the Group is dependent on thecontinued availability of capital funding for investing inits productive capacity and the development of its coalassets. In this regard, the Company is pursuing a numberof initiatives to source funding for its ongoing capitalexpenditure. Details of these initiatives are disclosed innote 34 to the annual financial statements. The Group isin the process of disposing of its coal portfolio and plansto invest further material cash flows, other than care andmaintenance expenditure, in the portfolio during the2014 financial year.Subsequent eventsEvents subsequent to financial year-end, 31 March 2013,are disclosed in note 35 to the annual financial statements.In light of the challenging economic environment, capitalfunding has been materially reduced and will be fundedthrough internally generated cash flows. The Group’s fullexisting general banking facility of R95 million will beutilised to bridge working capital deficits during the 2014financial year.Robin BerryChief Executive Officer26 June 2013Deon LouwFinancial Director

Sentula Mining Limited Integrated Annual Report 201370Consolidated statement of financial positionat 31 March 2013Note2013R’0002012R’000AssetsNon-current assets 1 997 037 2 440 186Property, plant and equipment 13 1 381 394 1 545 934Mineral rights 14 410 761 410 761Intangible assets 15 25 016 27 220Goodwill 15 120 648 412 709Restricted investment 23 8 693 8 693Deferred tax 26 50 525 34 869Current assets 853 820 1 026 134Inventories 16 189 792 364 521Trade and other receivables 17 535 192 468 870Cash and cash equivalents 18 110 709 180 236Current tax receivable 18 127 12 507Assets classified as held-for-sale 19 1 807 389 315Total assets 2 852 664 3 855 635EquityTotal equity attributable to equity holders of the Company 1 597 671 2 370 960Share capital 20 5 866 5 866Share premium 20 2 014 438 2 014 438Treasury shares 20 (25 898) (25 898)Reserves 108 127 11 166Retained (loss)/earnings (504 862) 365 388Non-controlling interest 32 644 59 815Total Equity 1 630 315 2 430 775LiabilitiesNon-current liabilities 291 645 853 446Loans and borrowings 21 – 488 695Finance lease obligations 22 3 371 –Rehabilitation provision 23 66 899 66 899Deferred tax 26 221 375 297 852Current liabilities 930 704 571 414Trade and other payables 25 278 699 335 532Loans and borrowings 21 543 744 220 316Deferred revenue 24 – 1 100Finance lease obligations 22 2 129 –Other financial liabilities 27 7 506 7 506Bank overdraft 18 58 062 –Current tax payable 40 564 6 960Total liabilities 1 222 349 1 424 860TOTAL EQUITY AND LIABILITIES 2 852 664 3 855 635

Sentula Mining Limited Integrated Annual Report 2013Consolidated income statementfor the year ended 31 March 201371Note2013R’0002012R’000Revenue 4 2 085 026 2 512 415Cost of sales (1 943 005) (2 092 662)Gross profit 142 021 419 753Other income 8 377 104 334Impairment of plant and equipment 13 (186 902) (591 171)Impairment of assets held-for-sale 19 (15 149) –Impairment of goodwill 15 (300 127) –Impairment of intangible assets 15 (9 162) –Administrative expenses (510 281) (352 987)Results from operating activities (871 223) (420 071)Finance expense 7 (60 720) (66 853)Finance income 7 3 249 3 032Fair value adjustment on interest rate cap 17 (2 486) (6 677)Loss before taxation (931 180) (490 569)Taxation 9 31 213 (41 625)Loss for the year (899 967) (532 194)Attributable to:– Equity holders of the Company (875 017) (516 703)– Non-controlling interest (24 950) (15 491)Basic and diluted loss per share 10 (150,60) (88,93)CentsCentsConsolidated statement of comprehensive incomefor the year ended 31 March 20132013R’0002012R’000Loss for the year (899 967) (532 194)Other comprehensive incomeForeign currency translation differences for foreign operations 67 190 28 000Other comprehensive income for the year, net of incometax 67 190 28 000Total comprehensive loss for the year (832 777) (504 194)Attributable to:– Equity holders of the Company (807 827) (488 703)– Non-controlling interest (24 950) (15 491)

Sentula Mining Limited Integrated Annual Report 201372Consolidated statement of cash flowsfor the year ended 31 March 2013Note2013R’0002012R’000Cash flows from operating activitiesLoss for the year (899 967) (532 194)Adjustments for:Depreciation 5 164 354 201 070Reversal of provision for third party liability 5 – (78 766)Amortisation of intangible assets 5 750 460Impairment of intangible assets 5 9 162 –Impairment of plant and equipment 5 186 902 591 171Impairment of assets held-for-sale 5 15 149 –Impairment of damaged assets 5 – 6 525Impairment of goodwill 5 300 127 –Impairment loss on trade debtor 5 874 11 312Impairment loss on other debtors 5 – 7 859Scrapping of assets 5 19 384 1 430Unrealised foreign exchange gain 5 (15 988) (18 593)Provision for penalties 5 6 108 –Finance income 7 (3 249) (3 032)Finance expense 7 60 720 66 853– Paid 60 720 64 958– Unwinding/accrued – 1 895Equity-settled share-based payment expense 5 406 2 134Long-term incentive plan provision movement – 8 115Share-based payment charge BBBEE transaction 5 17 632 –Write-down of inventory to net realisable value 5 133 783 –Loss on disposal of assets held-for-sale 5 221 028 –Loss on disposal of property, plant and equipment 5 1 392 54 621Profit on disposal of property, plant and equipment 5 (2 230) (2 464)Net movement in foreign currency translation reserve (183) 31 909(Utilisation of provision)/loss on onerous contract 5 (7 606) 7 606Income tax expense 9 (31 213) 41 625Cash flows from operating activities before changesin working capital and provisions 177 335 397 641Change in inventories 108 123 (2 694)Reallocation from inventory to property, plant and equipment (1 875) (3 306)Change in trade and other receivables (26 926) (44 176)Change in trade and other payables (61 323) (29 409)Change in deferred revenue (1 100) 1 100Cash generated from operating activities 194 234 319 156Income taxes paid 28 (41 968) (27 294)Interest paid 7 (58 139) (62 377)Net cash from operating activities 94 127 229 485Cash flows from investing activitiesInterest received 7 3 249 3 032Purchase of property, plant and equipment 13 (214 716) (291 600)Proceeds from disposal of property, plant and equipment 18 374 156 708Capitalised exploration expenditure 15 (309) (2 212)Additions to assets held-for-sale 19 (57 165) (6 833)Proceeds from disposal of assets held-for-sale 160 464 –Net cash utilised in investing activities (90 103) (140 905)Cash flows from financing activitiesLoans repaid (234 242) (142 739)Loans raised 74 213 147 335Option premium on empowerment transaction received 16 500 –Dividends paid to non-controlling interest (2 221) –Net cash (utilised in)/generated by financing activities (145 750) 4 596Net (decrease)/increase in cash and cash equivalents (141 726) 93 176Cash and cash equivalents at the beginning of the year 180 236 88 232Exchange gains/(losses) on cash and cash equivalents 14 137 (1 172)Cash and cash equivalents at the end of the year 18 52 647 180 236

Sentula Mining Limited Integrated Annual Report 2013Consolidated statement of changes in equityfor the year ended 31 March 201373R’000SharecapitalSharepremiumEmployeeshareincentivereserveTreasurysharesForeigncurrencytranslationreserveRetainedearningsTotalNoncontrollinginterestTotalequityBalance at 31 March2011 5 866 2 014 438 42 426 (25 898) (53 403) 874 105 2 857 534 75 301 2 932 835Loss for the year – – – – – (516 703) (516 703) (15 491) (532 194)Other comprehensiveincomeForeign currencytranslation differences forforeign operations – – – – 27 995 – 27 995 5 28 000Total othercomprehensive income – – – – 27 995 – 27 995 5 28 000Total comprehensive(loss)/income forthe year – – – – 27 995 (516 703) (488 708) (15 486) (504 194)Transactions withowners, recordeddirectly in equityContributions by anddistributions to ownersShare-based payments – – 2 134 – – – 2 134 – 2 134Share options forfeited – – (7 986) – – 7 986 – – –Total contributions byand distributions toowners – – (5 852) – – 7 986 2 134 – 2 134Balance at 31 March2012 5 866 2 014 438 36 574 (25 898) (25 408) 365 388 2 370 960 59 815 2 430 775Loss for the year – – – – – (875 017) (875 017) (24 950) (899 967)Other comprehensiveincomeForeign currencytranslation differences forforeign operations – – – – 67 190 – 67 190 – 67 190Total othercomprehensive income – – – – 67 190 – 67 190 – 67 190Total comprehensive(loss)/income forthe year – – – – 67 190 (875 017) (807 827) (24 950) (832 777)Transactions withowners, recordeddirectly in equityContributions by anddistributions to ownersDividends paid tonon-controlling interest – – – – – – – (2 221) (2 221)Share-based payments – – 406 – – – 406 – 406Share-based paymentempowerment transaction – – 17 632 – – – 17 632 – 17 632Option premium onempowerment transaction – – 16 500 – – – 16 500 – 16 500Share options forfeited – – (4 767) – – 4 767 – – –Total contributions byand distributions toowners – – 29 771 – – 4 767 34 538 (2 221) 32 317Total transactions withowners – – 29 771 – – 4 767 34 538 (2 221) 32 317Balance at 31 March2013 5 866 2 014 438 66 345 (25 898) 41 782 (504 862) 1 597 671 32 644 1 630 315

Sentula Mining Limited Integrated Annual Report 201374Operational segment reportingfor the year ended 31 March 2013Operating segmentsThe Group has seven reportable segments, as described below, five of which constitute the Group’s strategic business units.The strategic business units offer different services within the mining industry and are managed separately due to differentequipment, technology and skills requirements. The following summary describes the operations in each of the Group’sreportable segments:Opencast mining and earthmovingThis includes the movement and management of all aspects of overburden removal and coal extraction and chrome mining tospecified production budgets. Megacube, Benicon and CCT are included in this segment.Exploration drillingThis includes the exploration drilling operations across the African continent.Overburden drilling and blastingThis includes drilling and blasting operation which uses specialised drilling rigs in the opencast mining sector, primarily in thecoal industry.Crane hireThis includes the hiring out of 20 medium to heavy duty mobile cranes with capacities that range from 25 to 220 tonnes.Equipment trading and sparesThis includes the global procurement of used equipment and spares, for overhaul and deployment within the Group andincludes the engine rebuild facility relocated to Middelburg. Benicon Sales and Caston are included in this segment.Coal miningThis includes the mining operations within the Group of which the largest contributor is in the anthracite industry.Other operationsThis is largely the head office operations.The accounting policies of the reportable segments are described in notes 2 and 3.Information regarding the results of each reportable segment is included on page 75. Performance is measured based on thesegment results as included in the internal management reports that are reviewed by the Group’s CEO on a regular basis.Segment results are used to measure performance as management believes that such information is the most relevant inevaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricingis determined on an arm’s length basis.Revenues of R746 million (2012: R714 million) are derived from a single external client in the opencast mining segment.The other segments are diversified and not exposed to concentration risk.

Sentula Mining Limited Integrated Annual Report 201375Reportable segmentsR’000Opencastminingand earthmovingExplorationdrillingOverburdendrillingandblastingCranehireEquipmenttradingandsparesCoalminingCorporateand otherservicesTotal2013Total segment revenue 1 119 495 749 854 279 427 65 258 57 613 908 – 2 272 555Inter-segment revenue (69 868) – (75 235) (931) (41 495) – – (187 529)External revenue 1 049 627 749 854 204 192 64 327 16 118 908 – 2 085 026Total segment resultspre-impairment 6 625 (114 701) 37 570 32 663 (16 760) (16 879) (67 373) (138 855)Impairment of plantand equipment (137 551) (49 351) – – – – – (186 902)Impairment of goodwill – (203 959) – – – – (96 168) (300 127)Impairment of assetsheld-for-sale (15 149) – – – – – – (15 149)Impairment of intangibleassets – – – – – (9 162) – (9 162)Loss on disposal ofassets held-for-sale (221 028) – – – – – – (221 028)Results from operatingactivities (367 103) (368 011) 37 570 32 663 (16 760) (26 041) (163 541) (871 223)Total segment financeincome 274 319 392 1 353 2 501 106 263 109 104Inter-segment financeincome (5) – (392) (1 350) – – (104 108) (105 855)External financeincome 269 319 – 3 2 501 2 155 3 249Total segment financeexpense (54 758) (8 107) (9 258) (851) (486) (31 681) (61 434) (166 575)Inter-segment financeexpense 53 874 7 760 9 237 825 471 31 669 2 019 105 855External financeexpense (884) (347) (21) (26) (15) (12) (59 415) (60 720)Total segment assets 962 763 391 207 171 895 111 301 75 395 632 464 438 987 2 784 012Unallocated assets 68 652Total assets 2 852 664Total segment liabilities 138 684 88 398 35 112 3 805 10 426 70 192 613 793 960 410Unallocated liabilities 261 939Total liabilities 1 222 349Capital expenditure 120 476 53 204 23 363 17 211 61 283 118 214 716Depreciation 101 617 28 268 29 381 3 113 209 331 1 435 164 354Amortisation – 673 77 – – – – 750

Sentula Mining Limited Integrated Annual Report 201376Operational segment reporting continuedfor the year ended 31 March 2013R’000Opencastminingand earthmovingExplorationdrillingOverburdendrillingandblastingCranehireEquipmenttradingandsparesCoalminingCorporateand otherservicesTotal2012Total segment revenue 1 457 470 861 311 336 497 57 418 63 288 13 383 – 2 789 367Inter-segment revenue (36 086) – (188 105) (1 267) (50 995) (499) – (276 952)External revenue 1 421 384 861 311 148 392 56 151 12 293 12 884 – 2 512 415Total segment resultspre-impairment 10 800 102 805 80 377 30 335 (2 072) (15 498) (35 646) 171 101Impairment of property,plant and equipment (591 172) – – – – – – (591 172)Results from operatingactivities (580 372) 102 805 80 377 30 335 (2 072) (15 498) (35 646) (420 071)Total segment financeincome 559 99 158 2 864 1 532 144 198 148 411Inter-segment financeincome (497) – (157) (2 838) – – (141 887) (145 379)External financeincome 62 99 1 26 1 532 2 311 3 032Total segment financeexpense (38 339) (47 211) (14 415) (5 901) (5 507) (29 841) (71 018) (212 232)Inter-segment financeexpense 37 588 46 835 14 402 5 882 5 494 27 936 7 242 145 379External financeexpense (751) (376) (13) (19) (13) (1 905) (63 776) (66 853)Total segment assets 1 292 892 911 925 183 365 102 215 112 057 634 164 571 641 3 808 259Unallocated assets 47 3763 855 635Total segment liabilities 154 481 101 387 44 229 5 227 14 024 68 060 732 640 1 120 048Unallocated liabilities 304 812Total liabilities 1 424 860Capital expenditure 242 945 18 076 21 931 3 377 215 3 098 1 958 291 600Depreciation 145 984 27 242 21 829 2 517 470 973 2 055 201 070Amortisation – – 460 – – – – 460Geographical segmentsIn presenting information on the basis of geographical segments, segment revenue is based on the geographical location ofthe customers. Segment assets are based on the geographical location of the assets.2013 2012R’000SouthAfricaRest ofAfricaTotalSouthAfricaRest ofAfricaTotalRevenue from external customers 1 442 477 642 549 2 085 026 1 862 796 649 619 2 512 415Non-current assets 1 815 858 130 654 1 946 512 2 308 581 96 736 2 405 317Current assets 589 199 248 301 837 500 986 164 416 778 1 402 942Total assets 2 405 057 378 955 2 784 012 3 294 745 513 514 3 808 259Capital expenditure 175 901 38 815 214 716 276 435 15 165 291 600

Sentula Mining Limited Integrated Annual Report 2013Notes to the consolidated financial statementsfor the year ended 31 March 2013771 Reporting entitySentula Mining Limited (“the Company”) is a company domiciled in the Republic of South Africa. The address of theCompany’s registered office is Ground Floor, Building 14, Woodlands Office Park, Woodmead. The consolidatedfinancial statements of the Company as at and for the year ended 31 March 2013 comprise the Company and itssubsidiaries (together referred to as the “Group” and individually as “Group entities”) and the Group’s interest inassociates and jointly controlled entities.2 Basis of preparationa) Statement of compliance The financial statements have been prepared in accordance with International Financial Reporting Standards(“IFRS”) and in a manner required by the Companies Act of South Africa, the JSE Listings Requirements and theSAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial ReportingPronouncements as issued by Financial Reporting Standards Council.b)c)d)e)The Group and Company annual financial statements were authorised for issue by the Board of Directors (“theBoard”) on 26 June 2013.Basis of measurementThe Group’s financial statements are prepared on the historical cost basis except for the revaluation of certainfinancial instruments which are measured at fair value, as appropriate, and incorporate the following principalaccounting policies which have been consistently applied.Functional and presentation currencyTransactions included in the financial statements of each of the Group’s entities are measured using the currencyof the primary economic environment in which they operate (the functional currency). The consolidated financialstatements are presented in South African Rand, which is the presentation currency and functional currency ofthe majority of the operations within the Group.All amounts in the financial statements are stated to the nearest thousand (R’000) except whereotherwise indicated.Use of estimates and judgementsThe preparation of financial statements in conformity with IFRS required management to make judgements,estimates and assumptions that affect the application of accounting policies and reported amounts of assets andliabilities, income and expenses. The estimates and associated assumptions are based on historical experienceand various other factors that are believed to be reasonable under the circumstances, the results of which formthe basis of making the judgements about carrying values of assets and liabilities that are not readily apparentfrom other sources. Actual results may differ from these estimates. The use of estimates and judgements arefurther disclosed in 3.19.Change in accounting policiesThere were no changes in accounting policies during the 2013 financial year.3 Significant accounting policiesThe accounting policies set out below have been consistently applied to all periods presented in these financialstatements and have been consistently applied by the Group.3.1 Basis of consolidation3.1.1 SubsidiariesWhere the Group has the power, either directly or indirectly, to govern the financial and operating policies of anotherentity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financialstatements present the results of the Company and its subsidiaries (“the Group”) as if they formed a single entity.The results and cash flows of subsidiaries are included from the date that control commences until the date that controlceases. Intergroup transactions and balances between Group companies are eliminated in full. The accounting policiesof the subsidiaries have been changed where necessary to align them with the policies adopted by the Group.

Sentula Mining Limited Integrated Annual Report 201378Notes to the consolidated financial statements continuedfor the year ended 31 March 20133 Significant accounting policies (continued)3.1 Basis of consolidation (continued)3.1.1 Subsidiaries (continued)Where the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the datewhen control is lost, with the change in the carrying amount recognised in profit or loss. The fair value is the initialcarrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture orfinancial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entityare accounted for as if the Group had directly disposed of the related assets and liabilities. This may mean that theamounts previously recognised in other comprehensive income are reclassified to profit or loss.With the acquisition of a non-controlling interest the transactions are accounted for with the owners in their capacityand therefore no goodwill is recognised as a result of such transactions. The adjustments to non-controlling interest arebased on a proportionate amount of the net assets of the subsidiary.Transactions with non-controlling interest that do not result in loss of control are accounted for as equity transactions,that is, as transactions with the owners in their capacity as owners. The difference between fair value of anyconsideration paid and the relevant share acquired of the carrying value of net asset of the subsidiary is recorded inequity. Gains or losses on disposals to non-controlling interests are also recorded in equity.Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even ifdoing so causes the non-controlling interests to have a deficit balance.In the financial statements of the Company, investments in subsidiaries are measured at cost less accumulatedimpairment losses.3.1.2 Special purpose entitiesA special purpose entity is consolidated if, based on an evaluation of the substance of its relationship with the Groupand the entity’s risks and rewards, the Group concludes that it controls the special purpose entity. Special purposeentities controlled by the Group are established under terms that impose strict limitations on the decision-makingpowers of the special purpose entity’s management and that result in the Group receiving the majority of the benefitsrelating to the special purpose entity’s operations and net assets, are exposed to risk incident to the special purposeentity’s activities, and retain the majority of the residual or ownership risks relating to the special purpose entity orits assets.3.1.3 AssociatesWhere the Group has the power to participate in (but not control) the financial and operating policy decisions ofanother entity, it is classified as an associate. Associates are accounted for using the equity method and are initiallyrecognised in the consolidated statement of financial position at cost. The Group’s share of post-acquisition profits andlosses is recognised in the consolidated income statement, from the date significant influence commences until thedate significant influence ceases, except that losses in excess of the Group’s investment in the associate are notrecognised unless there is an obligation to make good those losses. Significant influence is presumed to exist when theGroup holds between 20% and 50% of the voting power of another entity.Profits and losses arising on transactions between the Group and its associates are recognised only to the extent ofunrelated investors’ interests in the associate. The investor’s share in the associate’s profits and losses resulting fromthese transactions is eliminated against the carrying value of the associate.Any premium paid for an associate above the fair value of the Group’s share of the identifiable assets, liabilities andcontingent liabilities acquired is capitalised and included in the carrying amount of the associate. The carrying amountof the investment in associate is subject to impairment assessment at each reporting date.In the financial statements of the Company, the investment in associate is measured at cost, less accumulatedimpairment losses.3.1.4 Jointly controlled operationsJoint ventures are contractual agreements whereby the Group and other parties undertake an economic activity thatis subject to joint control, that is when the strategic financial and operating policy decisions relating to the activitiesrequire the unanimous consent of the parties sharing control. These joint ventures may take the form of jointlycontrolled operations such as exploration and mining activities or companies.

Sentula Mining Limited Integrated Annual Report 2013793 Significant accounting policies (continued)3.1 Basis of consolidation (continued)3.1.4 Jointly controlled operations (continued)Joint ventures are accounted for by means of the proportionate consolidation method whereby the Group’s shareof the assets, liabilities, income, expenses and cash flows of joint ventures are included on a line by line basis in theconsolidated financial statements.The results of joint ventures are included for the period during which the Group exercises joint control over thejoint venture.If a joint venture uses accounting policies other than those adopted in these consolidated financial statements for liketransactions and events in similar circumstances, appropriate adjustments are made to its financial statements inpreparing the consolidated financial statements.Where the Group transacts with its jointly controlled operations, unrealised profits and losses are eliminated to theextent of the Group interest in the joint venture, except where unrealised losses provide evidence of an impairmentof the assets.3.1.5 Business combinationsBusiness combinations are accounted for using the acquisition method as at the acquisition date, which is the dateon which control is transferred to the Group. Control is the power to govern the financial and operating policies ofan entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potentialvoting rights that are currently exercisable.The Group measures goodwill at the acquisition date as:h hthe fair value of the consideration transferred; plush hthe recognised amount of any non-controlling interests in the acquiree; plush hif the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; lessh hthe net recognised amount of the identifiable assets acquired and liabilities assumed.When the excess is negative, a bargain purchase gain is recognised immediately in the income statement. Theconsideration transferred does not include amounts related to the settlement of pre-existing relationships. Suchamounts are generally recognised in the income statement.Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Groupincurs in connection with a business combination are expensed as incurred.Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent considerationis classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequentchanges to the fair value of the contingent consideration are recognised in the income statement.When share-based payment awards (replacement awards) are required to be exchanged for awards held by theacquiree’s employees (acquiree’s awards) and relate to past service, then all or a portion of the amount of the acquirer’sreplacement awards is included in measuring the consideration transferred in the business combination. Thedetermination is based on the market-based value of the replacement awards compared with the market-based valueof the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.Accounting for acquisitions of non-controlling interestAcquisitions of non-controlling interests are accounted for as transactions with owners in their capacity and thereforeno goodwill is recognised as a result of such transactions. The adjustments to non-controlling interests are based ona proportionate amount of the net assets of the subsidiary.Previously, goodwill was recognised on the acquisition of non-controlling interests in a subsidiary, which represents theexcess of the cost of the additional investment over the carrying amount of the interest in the net assets acquired atthe date of the transaction.

Sentula Mining Limited Integrated Annual Report 201380Notes to the consolidated financial statements continuedfor the year ended 31 March 20133 Significant accounting policies (continued)3.2 Foreign currency3.2.1 Foreign currency transactionsForeign currency transactions are translated into the functional currency of the respective entity using the exchangerates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies atthe reporting date are retranslated to the functional currency at the exchange rate at that date. Foreign currencydifferences resulting from the settlement of such transactions and from the translation at year-end exchange rates ofmonetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslatedto the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items inthe foreign currency that are measured in terms of historical costs are translated using the exchange rate at thetransaction date. Foreign currency differences arising on retranslation of available-for-sale equity investments, afinancial liability designated as a hedge of the net investment in a foreign currency operation that is effective, orqualifying cash flow hedges, are recognised in other comprehensive income.3.2.2 Foreign operationsThe results and the financial position of all the Group entities that have a functional currency different from thepresentation currency are translated into the presentation currency as follows:hhAssets and liabilities for each statement of financial position are translated at the closing rate at the reporting date;hhIncome and expenses for each income statement account are translated at exchange rates at the dates of thetransactions; andhhAll resulting exchange differences are recognised in other comprehensive income and presented as a separatecomponent of equity (in the foreign currency translation reserve).Foreign exchange gains and losses arising from a monetary item receivable from or payable to a foreign operation,the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of the netinvestment in a foreign operation and are recognised in other comprehensive income and presented in the foreigncurrency translation reserve.3.3 Intangible assets3.3.1 GoodwillGoodwill that arises upon the acquisition of subsidiaries is included in the notes with intangible assets.The measurement of the initial recognition of goodwill has been disclosed in note 3.1.5 under “Business combinations”.Subsequent measurementGoodwill is measured at cost less accumulated impairment losses.For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of thecash-generating units, or groups of cash-generating units that is expected to benefit from the synergies of thecombination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entityat which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operatingsegment level. Goodwill impairment reviews are undertaken annually or more frequently if events or changes incircumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount,which is the higher of value in use and fair value to less costs to sell. Any impairment is recognised immediately as anexpense and is not subsequently reversed.In respect of equity-accounted investees, the carrying amount of the goodwill is included in the carrying amount of theinvestment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that formspart of the carrying amount of the equity-accounted investee.3.3.2 Other intangible assetsOther intangible assets relate to customer contracts and relationships acquired in subsidiaries. The intangible assetrelating to these contracts and relationships is expected to be amortised over two to five years from the date ofacquisition. Other intangible assets are measured at cost less accumulated amortisation and accumulated impairmentlosses. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted ifappropriate. The carrying amounts of other intangible assets with a definite useful life are reviewed at each reportingdate to determine whether there is any indication of impairment. If such indication exists, then the recoverable amountis estimated.

Sentula Mining Limited Integrated Annual Report 2013813 Significant accounting policies (continued)3.3 Intangible assets (continued)3.3.3 Exploration for and the evaluation of mineral resourcesExploration assets include expenditure incurred after the award of the legal licence, to explore a specific area formineral resources. Pre-licence costs are recognised as an expense in profit or loss as incurred. Exploration andevaluation costs are capitalised as exploration assets on a project-by-project basis pending determination of thetechnical feasibility and commercial viability of the project. Exploration assets include costs of acquisition of rights toexplore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling andactivities to evaluate the technical feasibility and commercial viability of extracting a mineral resource.Administration and other general overhead costs, which are not directly attributable to the specific exploration assets,are expensed as incurred. When a licence is relinquished or a project is abandoned, the capitalised expenditure isrecognised in profit or loss immediately.Exploration assets are measured at cost less impairment losses.3.4 Property, plant and equipment3.4.1 Recognition and measurementProperty, plant and equipment are measured at cost less accumulated depreciation and accumulated impairmentlosses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of selfconstructedassets includes the cost of materials and direct labour, and any costs directly attributable to bringing theasset to a working condition for its intended use, and the costs of dismantling and removing the items and restoringthe site on which they are located.When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separateitems of property, plant and equipment and depreciated separately.Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceedsfrom disposal with the carrying amount of property, plant and equipment and are recognised net within “otherincome” in profit or loss.3.4.2 Subsequent costsThe cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the itemif it is probable that future economic benefits within the part will flow to the Group and its cost can be measuredreliably. The carrying amount of the replaced part is derecognised. The costs of day-to-day servicing of the property,plant and equipment are recognised in profit or loss as incurred.3.4.3 DepreciationAll mining assets are depreciated using the units-of-production method where the mine operating plan calls forproduction from well-defined mineral reserves over proved and probable reserves. The calculation of the units-ofproductionrate of depreciation could be impacted to the extent that actual production in the future is different fromcurrent forecast production based on proved and probable mineral reserves. This would generally arise when there aresignificant changes in any of the assumptions used in estimating the mineral reserves.These factors could include changes in proved and probable mineral reserves and differences between actualcommodity prices and commodity price assumptions.Depreciation is recognised in profit or loss on a systematic basis over the estimated useful lives of each part of an itemof property, plant and equipment (except for mining assets), since this most clearly reflects the expected pattern ofconsumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorterof the lease term and their useful lives, unless it is reasonably certain that the Group will obtain ownership by the endof the lease term. Land is not depreciated.Residual value is the amount that the entity could recover for the asset at the reporting date if the asset was already ofthe age and in the condition that it will be in when the entity expects to dispose of it. The estimated residual value isbased on similar assets that have reached the end of their useful lives at the date that the estimate has been made.If the residual value of an asset increases to an amount equal to or in excess of the asset’s carry value, then the asset’sdepreciation charge will be zero. Depreciation will resume when the asset’s residual value falls below the asset’scarrying value.

Sentula Mining Limited Integrated Annual Report 201382Notes to the consolidated financial statements continuedfor the year ended 31 March 20133 Significant accounting policies (continued)3.4 Property, plant and equipment (continued)3.4.3 Depreciation (continued)Where the unit-of-production methodology is used, the estimate of future production is reviewed and revised, ifnecessary, at each reporting date in accordance with the requirement to review the asset’s expected useful life. Unitsof production are determined by the metres drilled or hours utilised for the specific item of plant and equipment.A change in the useful life, in the unit-of-production method or in the residual value of an asset will result in a changein estimate.The estimated useful lives for the current and comparative periods are as follows:h hBuildings 50 yearsh hMining assetsOver the anticipated life of mineh hPlant and equipment5 to 10 yearsh hMotor vehicles 5 yearsh hFurniture, fittings and equipment 10 yearsDepreciation methods, useful lives and residual values are reviewed annually and adjusted if appropriate.3.5 Impairment of non-financial assetsThe carrying amount of the Group’s assets, other than inventories and deferred tax assets, is reviewed at eachreporting date to determine whether there is an indication of impairment. If any such indication exists, the asset’srecoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or itscash-generating unit exceeds its recoverable amount. Assets with an indefinite useful life for example, goodwill orintangible assets not ready for use, are not subject to amortisation and are tested annually for impairment.The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less thecost to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using apre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to theasset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined forthe cash-generating unit to which the asset belongs.Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate thattheir carrying amount may not be recoverable. When the carrying value of an asset exceeds its recoverable amount,the asset is written down accordingly. Where it is not possible to estimate the recoverable amount of an individualasset, the impairment test is carried out on the asset’s cash-generating unit.Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units areallocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit, and then to reducethe carrying amounts of the other assets in the cash-generating unit on a pro rata basis.An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised inprior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists.An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carryingamount that would have been determined, net of depreciation or amortisation, if no impairment had been recognised.Impairment charges are disclosed separately on the consolidated income statement, except to the extent that theyreverse gains previously recognised in the consolidated statement of changes in equity.3.6 Non-current assets held-for-saleNon-current assets that are expected to be recovered primarily through sale or distribution rather than throughcontinuing use, are assets classified as held-for-sale or distribution. Immediately before classification as held-for-sale ordistribution, the assets are remeasured in accordance with the Group’s accounting policies. Thereafter the assets aremeasured at the lower of their carrying amount and fair value less costs to sell. Impairment losses on initialclassification as held-for-sale or distribution and subsequent gains and losses on remeasurement are recognised inprofit or loss. Gains are not recognised in excess of any cumulative impairment loss.Intangible assets and property, plant and equipment once classified as held-for-sale or distribution are not amortisedor depreciated.

Sentula Mining Limited Integrated Annual Report 2013833 Significant accounting policies (continued)3.7 InventoriesInventories are consumables and spares held in the ordinary course of business consumed in the production process orin the rendering of services in the mining operations. Finished goods are assets held-for-sale in the coal operations.Inventories are measured at the lower of cost and net realisable value using the first-in first-out method. Cost includesall costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present locationand condition.Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost ofcompletion and costs necessary to make the sale.3.8 ProvisionsProvisions are recognised when the Group has a present obligation, whether legal or constructive, for liabilities ofuncertain timing or amount that have arisen as a result of past events and are discounted at a pre-tax rate reflectingcurrent market assessments of the time value of money and the risks specific to the liability. In accordance with theapplicable legal requirements, a provision for rehabilitation of land and the related expense is recognised when thedamage occurs, it is probable that a restoration expense will be incurred and a reasonable estimate of the costs canbe made. The increase in the provision due to passage of time is recognised as an interest expense.3.9 Financial instrumentsFinancial assets and financial liabilities are recognised in the statement of financial position when the Group hasbecome a party to the contractual provisions of the instruments.Financial assets and financial liabilities are set off and the net amount presented in the statement of financial position,when the Group has a legal right to set off the amounts and intends either to settle on a net basis or to realise theasset and settle the liability simultaneously.Financial assetsThe Group classifies its financial assets into one of the categories discussed below, depending on the purpose forwhich the asset was acquired. The Group has not classified any of its financial assets as held-to-maturity or designatedany instruments at fair value through profit or loss.The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or ittransfers the rights to receive the contractual cash flows on the financial assets in a transaction in which substantially allthe risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets thatis created or retained by the Group is recognised as a separate asset or liability.The Group has not classified any of its financial assets as available-for-sale.Loans and receivablesThese assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an activemarket. They arise principally through the provision of goods and services to customers (e.g. trade receivables), butalso incorporate other types of contractual monetary assets. They are initially recognised at fair value plus transactioncosts that are directly attributable to the acquisition or issue of the instruments, and are subsequently carried atamortised cost using the effective interest method, less impairment losses.Impairment losses are recognised when there is objective evidence that the Group will be unable to collect all of theamounts due under the terms receivable, the amount of such a loss being the difference between the net carryingamount and the present value of the future expected cash flows associated with the impaired receivable discounted atthe original effective interest rate. An impairment loss is reversed if the reversal can be related objectively to an eventoccurring after the impairment loss was recognised. For trade receivables, which are reported net, such losses arerecorded in a separate account with the loss being recognised within administrative expenses in the income statement.On confirmation that the trade receivable will not be collectible, the gross carrying value of the asset is written offagainst the allowance account. From time to time, the Group elects to renegotiate the terms of trade receivables duefrom customers with which it has previously had a good trading history. Such renegotiations will lead to changes in thetiming of payments rather than changes to the amounts owed and, in consequence, the new expected cash flows arediscounted at the original effective interest rate.

Sentula Mining Limited Integrated Annual Report 201384Notes to the consolidated financial statements continuedfor the year ended 31 March 20133 Significant accounting policies (continued)3.9 Financial instruments (continued)Cash and cash equivalents form part of loans and receivables and include cash on hand, deposits held on call withbanks, other short-term highly liquid investments with original maturities immediately available, and bank overdrafts.Bank overdrafts held at the same financial institution are set off against favourable bank balances reflected in currentassets. It is the Group’s policy not to allow overdraft facilities at subsidiary companies. Such facilities are provided tothe subsidiaries by the central treasury.These balances are initially recognised at fair value plus transaction costs and subsequently measured atamortised cost.All short-term cash investments are invested with a major financial institution to manage credit and liquidity risk.Derivative financial instrumentsDerivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequentlyremeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivativeis designated as a hedging instrument and, if so, the nature of the item being hedged.The fair values of various derivative instruments are disclosed in the notes.Financial liabilitiesFinancial liabilities are classified according to the substance of the contractual arrangement entered into and thepurpose for which the asset was acquired, and include the following:Bank borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of theinstrument. Such interest-bearing liabilities are subsequently measured at amortised cost using the effective interestmethod, which ensures that any interest expense over the period to repayment is at a constant rate on the balance ofthe liability carried in the statement of financial position. Interest expense in this context includes initial transactioncosts and premiums payable on redemption, as well as any interest while the liability is outstanding.Trade payables and other short-term monetary financial liabilities are initially recognised at fair value and subsequentlymeasured at amortised cost using the effective interest method.The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expired.3.10 TaxationIncome tax comprises current and deferred tax. Current tax and deferred tax is recognised in profit or lossexcept to the extent that it relates to a business combination or items recognised directly in equity or othercomprehensive income.Current taxation is the expected tax payable on the taxable income for the year, using tax rates enacted orsubstantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilitiesfor financial reporting purposes and the amounts used for taxation purposes.The following temporary differences are not provided for:h hThe initial recognition of goodwill;h hThe initial recognition of assets and liabilities that affect neither accounting nor taxable profit; andh hDifferences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in theforeseeable future.A deferred tax asset is recognised only to the extent that it is probable that taxable profits will be available againstwhich deductible temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date andare reduced to the extent that it is no longer probable that the related tax benefit will be realised.Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the temporary differenceswhen they reverse based on the laws that have been enacted or substantively been enacted by the reporting date.

Sentula Mining Limited Integrated Annual Report 2013853 Significant accounting policies (continued)3.10 Taxation (continued)Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assetsand liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:h hthe same taxable entity; orh hdifferent Group entities which intend either to settle current tax assets and liabilities on a net basis; orh hto realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts ofdeferred tax assets or liabilities are expected to be settled or recovered.Additional income taxes that arise from the distribution of dividends are recognised at the same time that the liabilityto pay the related dividend is recognised.3.11 Share capitalThe Group’s ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinaryshares and share options are recognised as a deduction from equity, net of tax effects.When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directlyattributable costs, net of tax effects, is recognised as a deduction from total equity as a treasury share reserve. Whentreasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, theresulting surplus or deficit on the transaction is transferred to/from retained earnings.3.12 RevenueRevenue is measured at the fair value of the consideration received or receivable. The Group recognises revenue whenthe amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to theentity; and when specific criteria have been met for each of the Group activities. The invoiced values of goods sold andservices rendered, excluding value added tax, discounts and other non-operating income, in respect of manufacturing,trading and contracts, are recognised at the date when the significant risks and rewards of ownership are transferred tothe buyer.In the case of service revenue from contracts, revenue is recognised with reference to the stage of completion. Thestage of completion is assessed to surveys of work performed.3.13 Finance income and finance expenseFinance income comprises interest income received on funds invested that are recognised in profit or loss. Interestincome is recognised as it accrues in profit or loss, using the effective interest method.Finance expenses comprise interest expense on borrowings that are recognised in profit or loss. Borrowing costs thatare not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profitor loss using the effective interest method.3.14 DividendsDividends to equity holders are only recognised as a liability when declared and are included in the statement ofchanges in equity.3.15 Leased assetsWhere substantially all of the risks and rewards incidental to ownership of a leased asset have been transferred to theGroup (a finance lease), the asset is treated as if it had been purchased outright. The amount initially recognised as anasset is the lower of the fair value of the leased asset and the present value of the minimum lease payments payableover the term of the lease. The corresponding lease commitment is shown as a liability. Subsequent to initialrecognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Leasepayments are analysed between capital and interest.Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified asoperating leases. Payments made under operating leases (net of any incentives received from the lessor) are chargedto the income statement on a straight-line basis over the period of the lease.

Sentula Mining Limited Integrated Annual Report 201386Notes to the consolidated financial statements continuedfor the year ended 31 March 20133 Significant accounting policies (continued)3.16 Segment reportingAn operating segment is a component of the Group that engages in business activities from which it may earnrevenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s othercomponents. All segments’ operating results are reviewed regularly by the Group’s CEO for capital allocation andperformance assessment.Inter-segment pricing is determined on an arm’s length basis.Segment results, assets and liabilities include items directly attributable to a segment as well as those that can beallocated on a reasonable basis. Unallocated items comprise mainly current and deferred tax assets and liabilities.Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment,and intangible assets other than goodwill.3.17 Employee benefits3.17.1 Defined contribution plansProvision is made for retirement benefits for eligible employees by way of a provident fund. The fund is a definedcontribution plan under which amounts to be paid as retirement benefits are determined by contributions to the fundtogether with investment earnings thereon. Contributions are charged against income as incurred.Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future paymentsare available.3.17.2 Short-term employee benefitsThe cost of all short-term employee benefits is recognised during the year in which the employee renders the relatedservice. The accruals for employee entitlements to remuneration and annual leave represent the amount which theGroup has a present obligation to pay as a result of the employee’s services provided to the reporting date. Theaccruals have been calculated at undiscounted amounts based on current remuneration rates.3.17.3 Share-based payment transactionsWhere equity-settled share options are awarded to employees, the fair value of the options at the date of grant isrecognised in profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjustingthe number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amountrecognised over the vesting period is based on the number of options that eventually vest. Market vesting conditionsare factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, an expenseis raised irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted forfailure to achieve a market vesting condition.Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options,measured immediately before and after the modification, is also charged to profit or loss over the remaining vestingperiod. Share-based payment arrangements in which the Group receives goods or services as consideration for its ownequity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equityinstruments are obtained by the Group.The fair value of the amount payable to employees in respect of the long-term incentive plans which are settledin cash, is recognised as an expense with an increase in liabilities, over the period that the employees becomeunconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date.Any changes in the fair value of the liability are recognised in profit or loss.3.18 Contingent assets and liabilitiesA contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by theoccurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.Contingent assets are not recognised as assets.A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed onlyby the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group,or a present obligation that arises from past events but is not recognised because it is not probable that an outflow ofresources embodying economic benefits will be required to settle the obligation or the amount of the obligationcannot be measured with sufficient reliability. Contingent liabilities are not recognised as liabilities.

Sentula Mining Limited Integrated Annual Report 2013873 Significant accounting policies (continued)3.19 Critical accounting estimates and judgementsThe Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continuallyevaluated based on historical experience and other factors, including expectations of future events that are believedto be reasonable under the circumstances. In the future, actual experience may differ from these estimates andassumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to thecarrying amounts of assets and liabilities within the next financial year are discussed below.h hUseful lives of intangible assets and property, plant and equipmentAs described in 3.4 above, the estimated useful lives of property, plant and equipment are reassessed at the end ofeach annual reporting period. The Group depreciates/amortises its assets over their estimated useful lives, as morefully described in the accounting policies for property, plant and equipment, and intangible assets. The actual lives ofthese assets can vary depending on a variety of factors, including technological innovation and maintenanceprogrammes. Changes in estimates can result in significant variations in the carrying value and amounts charged toprofit or loss in specific periods.h hRehabilitation provisionLong-term environmental obligations are based on the Group’s environmental plans, in compliance with currentenvironmental and regulatory requirements.Full provision is made based on the net present value of the estimated cost of restoring the environmentaldisturbance that has occurred up to the reporting date. Increases due to additional environmental disturbances arecapitalised and amortised over the remaining lives of the mines. Annual increases in the provisions relating to thechange in the net present value of the provision and inflationary increases are included in administration expensesin the income statement.The estimated cost of rehabilitation is reviewed annually and adjusted as appropriate for changes in legislation ortechnology. Cost estimates are not reduced by the potential proceeds from the sale of assets or from plant clean-upat closure, in view of the uncertainty of estimating the potential future proceeds.h hEstimated impairment of goodwillThe Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy.The recoverable amounts of cash-generating units have been determined based on value-in-use calculations.These calculations require an estimation of the future cash flows expected to arise from the cash-generating unitand a suitable risk-adjusted discount rate in order to calculate present value.h hInventoriesThe Group reviews the net realisable value of, and demand for, its inventory on a quarterly basis to provide assurancethat recorded inventory is stated at the lower of cost or net realisable value. Factors that could impact estimateddemand and selling prices include the timing and success of future technological innovations, competitor actions,supplier prices and economic trends. The valuation of the inventory is further impacted by the location of the inventoryand the cost of redeployment.h hIncome taxesThe Group is subject to income tax in several jurisdictions and significant judgement is required in determining theprovision for income taxes. During the ordinary course of business, there are transactions and calculations for which theultimate tax determination is uncertain. As a result, the Group recognises tax liabilities based on estimates of whetheradditional taxes and interest will be due. The Group believes that its accruals for tax liabilities are adequate for allopen audit years based on its assessment of many factors including past experience and interpretations of tax law.This assessment relies on estimates and assumptions and may involve a series of complex judgements about futureevents. To the extent that the final tax outcome of these matters is different than the amounts recorded, suchdifferences will impact the income tax expense in the period in which such determination is made.h hShare-based paymentsThe fair value of share options and share appreciation rights is measured by using the binomial valuation models, onthe date of grant based on certain assumptions. Measurement inputs include the share price on the measurementdate, the exercise price of the instrument, expected volatility, expected term of the instruments, expected dividendsand the risk-free interest rate. Service and non-market performance conditions attached to the transactions are nottaken into account in determining fair value.

Sentula Mining Limited Integrated Annual Report 201388Notes to the consolidated financial statements continuedfor the year ended 31 March 20133 Significant accounting policies (continued)3.19 Critical accounting estimates and judgements (continued)The fair value of share options under the broad-based black economic empowerment (“BBBEE”) transaction ismeasured by using the Monte Carlo models, on the date of grant based on certain assumptions. Measurement inputsinclude the share price on the measurement date, the exercise price of the instrument, expected volatility, expectedterm of the instruments, expected dividends and the risk-free interest rate. Service and non-market performanceconditions attached to the transactions are not taken into account in determining fair value.3.20 Adoption of new and revised statementsStandards, amendments and interpretations that are not effective and have not been early adopted by the GroupThe following standards, amendments and interpretations have been published but are not effective and the Grouphas not early adopted them:h hAmendment to IAS 1: Presentation of Financial Statements – This amendment requires entities to separate itemspresented in other comprehensive income into two groups based on whether or not they may be recycled to profitor loss in the future. The amendment became effective on 1 July 2012.h hAmendment to IAS 19: Employee Benefits – The amendment eliminates the option to defer the recognition ofactuarial gains and losses, streamlines the presentation of changes in assets and liabilities arising from definedbenefit plans including the requirement that remeasurements be presented in other comprehensive income, andenhances the disclosure requirements for defined benefit plans to provide better information about thecharacteristics of defined benefit plans and the risks that entities are exposed to through participation in those plans.The amendment became effective on 1 January 2013.h hRevised IAS 27: Separate Financial Statements – IFRS 27 contains accounting and disclosure requirements forinvestments in subsidiaries, joint ventures and associates when an entity elects or is required by local regulations topresent separate financial statements. The standard requires an entity preparing separate financial statements toaccount for those investments at cost or in accordance with IFRS 9: Financial Instruments. The standard becameeffective on 1 January 2013.h hRevised IAS 28: Investments in Associates and Joint Ventures – The new IAS 28 prescribes the accounting forinvestments in associates and sets out the requirements for the application of the equity method when accountingfor investments in associates and joint ventures. The statement became effective on 1 January 2013.h hAmendment to IAS 32: Offsetting of Financial Assets and Financial Liabilities – The application guidance of IAS 32has been amended to clarify some of the requirements for offsetting financial assets and financial liabilities on thestatement of financial position. The amendments do not change the current offsetting model in IAS 32, but clarifythat the right of set-off must be available today – that is, it is not contingent on a future event. It also must be legallyenforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency orbankruptcy. The amendments also clarify that gross settlement mechanisms (such as through a clearing house) withfeatures that both (i) eliminate credit and liquidity risk and (ii) process receivables and payables in a single settlementprocess, are effectively equivalent to net settlement; they would therefore satisfy the IAS 32 criterion in theseinstances. Master netting agreements where the legal right of set-off is only enforceable on the occurrence of somefuture event, such as default of the counterparty, continue not to meet the offsetting requirements. This statementbecomes effective on 1 January 2014.h hAmendment to IFRS 1: First-time Adoption of International Financial Reporting Standards – guidance onGovernment loans – The amendment provides guidance on how a first-time adopter would account fora government loan with a below-market rate of interest when transitioning to IFRS. The amendment becameeffective on 1 January 2013.h hAmendment to IFRS 7: Financial Instruments: Disclosures – Offsetting of financial assets and financial liabilities –The amendment will require more extensive disclosure than is currently required under IFRS. The disclosures focuson quantitive information about recognised financial instruments that are offset in the statement of financial position,as well as those recognised financial instruments that are subject to master netting or similar arrangementsirrespective of whether they are offset or not. The amendment became effective on 1 January 2013.

Sentula Mining Limited Integrated Annual Report 2013893 Significant accounting policies (continued)3.20 Adoption of new and revised statements (continued)h hIFRS 9: Financial Instruments – This standard addresses classification and measurement of financial assets. It uses asingle approach to determine whether a financial asset is measured at amortised cost or at fair value. The approachin IFRS 9 is based on how an entity manages its financial instruments and the contractual cash flow characteristics ofthe financial assets. The standard requires a single impairment method to be used, replacing the numerousimpairment methods in IAS 39 that arose from the different classification categories. The standard also removes therequirement to separate embedded derivatives from financial asset hosts. The effective date of this statement hasbeen delayed to 1 January 2015.h hAmendment to IFRS 9: Financial Instruments – The accounting and presentation for financial liabilities and forderecognising financial instruments has been relocated from IAS 39: Financial Instruments: Recognition andMeasurement, without change, except for financial liabilities that are designated at fair value through profit or loss.The amendment introduces new requirements that address the problem of volatility in profit or loss arising from anissuer choosing to measure its own debt at fair value. With the new requirements, an entity choosing to measure aliability at fair value will present the portion of the change in its fair value due to changes in the entity’s own creditrisk in the other comprehensive income section of the income statement, rather than within profit and loss. Theeffective date of this amendment has been delayed to 1 January 2015.h hNew – IFRS 10: Consolidated Financial Statements – establishes principles for the presentation and preparation ofconsolidated financial statements when an entity controls one or more other entities and supersedes IAS 27:Consolidated and Separate Financial Statements. This standard changes the definition of control so that the samecriteria are applied to all entities to determine control. The revised definition of control focuses on the need to haveboth power and variable returns before control is present. The standard provides additional guidance to assist indetermination of control where this is difficult to assess. The amendment became effective from 1 January 2013.h hNew – IFRS 11: Joint Arrangements – establishes principles for financial reporting by parties to a joint arrangementand supersedes IAS 31: Interests in Joint Venture. This standard classifies joint arrangements into joint operationsand joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control of thearrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint ventureis a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets ofthe arrangement. The standard requires a party to a joint arrangement to determine the type of joint arrangement inwhich it is involved by assessing its rights and obligations arising from the arrangement. The focus is no longer onthe legal structure. The existing policy choice of proportionate consolidation for jointly controlled entities has beeneliminated. Equity accounting is mandatory for participants in joint ventures. The amendment became effective on1 January 2013.h hNew – IFRS 12: Disclosure of Interest in Other Entities – This is a comprehensive standard on disclosurerequirements for all forms of interest in other entities, including joint arrangements, associates, special purposevehicles and other off-balance sheet vehicles. This new standard requires entities to disclose information that helpsfinancial statement readers to evaluate the nature, risk and financial effects associated with the entity’s interest insubsidiaries, associates, joint arrangements and unconsolidated structured entities. The amendment becameeffective on 1 January 2013.h hNew – IFRS 13: Fair Value Measurement – This standard defines fair value, sets out in a single IFRS a framework formeasuring fair value, and sets out disclosure requirements on fair value measurements. The amendment becameeffective on 1 January 2013.h hIFRIC 20: Stripping Costs in the Production Phase of a Surface Mine – The interpretation clarifies when productionstripping should lead to the recognition of an asset and how that asset should be measured, both initially and insubsequent periods. The amendment became effective on 1 January 2013.h hAnnual improvement 2009 – 2011 cycle: Improvement to IFRS is a collection of amendments to IFRS –These amendments are the result of the conclusions the Board reached on proposals made in its annualimprovements project.

Sentula Mining Limited Integrated Annual Report 201390Notes to the consolidated financial statements continuedfor the year ended 31 March 20133 Significant accounting policies (continued)3.20 Adoption of new and revised statements (continued)h hAmendment to IFRS 10: Consolidated Financial Statements, IFRS 11: Joint Arrangements and IFRS 12: Disclosure ofInterests in Other Entities – The amendment clarifies that the date of initial application is the first day of the annualperiod in which IFRS 10 is adopted. Entities adopting IFRS 10 should assess control at the date of initial application;the treatment of comparative figures depends on this assessment. The amendment also requires certain comparativedisclosures under IFRS 12 upon transition.The key changes in the amendment are:h hIf the consolidation conclusion under IFRS 10 differs from IAS 27/SIC 12 as at the date of initial application, theimmediately preceding comparative period (that is, 2012 for a calendar-year entity that adopts IFRS 10 in 2013) isrestated to be consistent with the accounting conclusion under IFRS 10, unless impracticable.h hAny difference between IFRS 10 carrying amounts and previous carrying amounts at the beginning of theimmediately preceding annual period is adjusted to equity.h hAdjustments to previous accounting are not required for investees that will be consolidated under both IFRS 10and the previous guidance in IAS 27/SIC 12 as at the date of initial application, or investees that will beunconsolidated under both sets of guidance as at the date of initial application.h hComparative disclosures will be required for IFRS 12 disclosures in relation to subsidiaries, associates and jointarrangements. However, this is limited only to the period that immediately precedes the first annual period ofIFRS 12 application. Comparative disclosures are not required for interests in unconsolidated structured entities.The amendment became effective on 1 January 2013.The directors anticipate that all of the above interpretations, to the extent relevant, will be adopted in the Group’sconsolidated financial statements for the year in which they become effective and that the adoption of thoseinterpretations will have no material impact on the financial statements of the Group in the initial application.2013R’0002012R’0004 Revenue 2 085 026 2 512 415Revenue is derived from opencast contract mining, rehabilitation, earthworks, mining services, exploration drilling,overburden drilling and blasting, crane hire and sale of equipment and spares. Opencast contract mining revenue isbased on the bulk volume extracted or moved, whereas drilling and blasting revenue is based on volume of materialblasted. Exploration drilling revenue is based on metres drilled and crane hire revenue is derived from craneageservices. The Nkomati Anthracite mine was under care and maintenance during the year under review and no revenuewas generated in this period. The coal mining revenue generated in 2013 was derived from the lease of processingequipment. The revenue from coal mining generated in 2012 was derived from the selling of processed anthracite.2013R’0002012R’000Opencast mining and earthmoving 1 049 627 1 421 383Exploration drilling 749 854 861 311Overburden drilling and blasting 204 192 148 392Crane hire 64 327 56 151Equipment trading and repairs 16 118 12 293Coal mining 908 12 8852 085 026 2 512 415

Sentula Mining Limited Integrated Annual Report 2013912013R’0002012R’0005 Results from operating activitiesAfter allowing for the following:IncomeProfit on disposal of property, plant and equipment 2 230 2 464Grants received 1 400 1 401Bad debt recovery – 110Reversal of provision for third party liability – 78 766ExpensesBad debts written off 6 036 855Auditors’ remuneration 5 867 10 863– Audit fees – current year 5 614 8 902– Forensic investigations – 1 892– Other accounting services 253 69Realised foreign exchange loss 4 019 2 559Unrealised foreign exchange gain (15 988) (18 593)Provision for penalties 6 108 305Contribution to socio-economic and enterprise development 1 224 1 292Share-based payment expense – BBBEE transaction 34 132 –BBBEE transaction option premium received (16 500) –Loss on disposal of property, plant and equipment 1 392 54 621Loss on disposal of assets held-for-sale 221 028 –Amortisation of intangible assets 750 460Write-down of inventory to net realisable value 133 783 –Depreciation 164 354 201 070– Mining assets – 633– Plant and equipment 136 791 166 765– Motor vehicles 22 228 27 616– Furniture, fittings and equipment 3 569 4 445– Buildings 1 766 1 611Scrapping of assets 19 384 1 430Impairments 512 214 616 867– Impairment of plant and equipment 186 902 591 171– Impairment of assets held-for-sale 15 149 –– Impairment of damaged assets – 6 525– Impairment loss on trade debtor 874 11 312– Impairment of other debtors – 7 859– Impairment of intangibles 9 162 –– Impairment of goodwill 300 127 –(Utilisation of provision)/loss on onerous contract (7 606) 7 606Increase in provision for unaccounted funds – 4 939

Sentula Mining Limited Integrated Annual Report 201392Notes to the consolidated financial statements continuedfor the year ended 31 March 20132013R’0002012R’0005 Results from operating activities (continued)Personnel expenses– Salaries and wages 678 580 743 936– Provident fund 12 796 16 913– Equity-settled share-based payment expense 406 2 134– Cash-settled share-based payment expense (1 942) –– Long-term incentive plan 2 114 12 982Operating lease chargesPremises– Contractual amount 8 137 4 888Motor vehicles and equipment– Contractual amount 11 414 3 679Property rental– Invoiced amount 1 163 1 282Number of shares2013’0006 Share-based paymentsEquity-settled share appreciation rights scheme 6 575 7 500Cash-settled share appreciation rights scheme 27 955 29 597Long-term incentive plan 14 227 16 713Schamin Trust 1 600 1 60050 357 55 410Equity-settled share appreciation rights schemeThe Share Appreciation Rights Scheme (“SARS”) is a scheme whereby senior and middle management (the “employees”)of Sentula (the “Company”) are incentivised by means of the award of options, of which the offer price is determined asthe 30-day value weighted average price (“VWAP”) of Sentula’s share price on the date of presentation of Sentula’s annualresults (the “offer date”) and the employees can exercise the said options in five equal tranches annually from the first tothe sixth anniversary of the offer date, subject to employment. The award and allocation of options under the scheme isgoverned by Sentula’s Board. There were no options awarded during the year ended 31 March 2013 (2012: Nil). This is anequity-settled scheme.2012’000Number of shares2013’0002012’000Outstanding at the beginning of the year 7 500 9 025Forfeited options (925) (1 525)Outstanding at the end of the year 6 575 7 500Exercisable at the end of the year 6 575 6 000Weighted average exercise price of outstanding options (cents) 1 795 1 814Weighted average exercise price of forfeited options (cents) 2 206 2 206Weighted average exercise price of exercisable options (cents) 1 795 1 816Average remaining life (months) 8 20

Sentula Mining Limited Integrated Annual Report 2013936 Share-based payments (continued)Cash-settled share appreciation rights schemeThe Share Appreciation Rights Scheme (“SARS”) is a scheme whereby senior and middle management (the“employees”) of Sentula (the “Company”) are incentivised by means of the award of options, of which the offer priceis determined as the 30-day VWAP of Sentula’s share price on the date of presentation of Sentula’s annual results (the“offer date”) and the employees can exercise the said options in five equal tranches annually from the first to thesixth anniversary of the offer date, subject to employment. The award and allocation of options under the schemeis governed by Sentula’s Board. There were no rights awarded or exercised during the year ended 31 March 2013(2012: Nil). This is a cash-settled scheme.Number of shares2013’0002012’000Outstanding at the beginning of the year 29 597 32 757Forfeited options (1 642) (3 160)Outstanding at the end of the year 27 955 29 597Exercisable at the end of the year 17 095 12 350Weighted average exercise price of issued options (cents) 781 781Weighted average exercise price of outstanding options (cents) 780 780Weighted average exercise price of forfeited options (cents) 999 1 268Weighted average exercise price of exercisable options (cents) 1 597 1 597Fair value of options granted (R’000) 7 640 10 240Average remaining life (months) 25 38The fair value of such share programme was determined by using the binomial option valuation method. The followinginputs were used:– Issued price ranging from 223 cents to 1 679 cents;– Expected volatility of 50%;– A staff turnover of 5,45% per annum;– A forecast dividend growth rate of 4%; and– A risk-free interest rate of 8,97%.Expected volatility was based on a filtered history of volatility of the Sentula Group from a period dating back to 2005and has been adjusted to give recent history a higher weighting in determining the average expected volatility.Deferred bonus schemeSelected executives and employees of the Group will in lieu of a discretionary bonus, or a percentage thereof, beoffered the right to receive a cash award equal to the sum of the market value of a number of notional Sentula issuedordinary shares as at the expiry of a specified employment period and a multiple thereof to be determined by theBoard at the time of offer of the deferred bonus award and the aggregate of all dividends paid per Sentula ordinaryshare over the employment period and the number of bonus shares comprising the deferred bonus award. Thedeferred bonus scheme is settled in cash.All shares are awarded at the 30-day VWAP of Sentula’s share price on the date of presentation of Sentula’s annualresults (the “offer date”) on the day of issue. No nominal Sentula shares were issued during the current year (2012: Nil).Long-term incentive planSelected executives and employees of Sentula and its subsidiaries will receive a conditional right to receive a cashaward (“LTIP award”) equal to the market value of a number of notional Sentula issued ordinary shares on the date thatthe award becomes unconditional. The LTIP award is to be applied towards the obligatory subscription and/orpurchase of Sentula ordinary shares. This LTIP award is settled in cash.Number of shares2013’0002012’000Outstanding at the beginning of the year 16 713 25 017Granted during the year 4 125 1 575Forfeited options (1 507) (3 770)Number of options exercised (5 104) (6 109)Outstanding at the end of the year 14 227 16 713Exercisable at the end of the year Nil Nil

Sentula Mining Limited Integrated Annual Report 201394Notes to the consolidated financial statements continuedfor the year ended 31 March 20136 Share-based payments (continued)The awards made during the 2013 and 2012 financial years relate to new staff members qualifying for the scheme.LTIPs are settled at vesting date based on the market value of the Company’s share price determined by reference to30-day VWAP. Conditions for vesting are established by the Board. In order for the July 2013 tranche to vest a 10%compounded improvement in year-on-year economic value add (EVA) on the Group’s productive capital base, utilisingthe March 2011 base, needs to be achieved. The July 2012 tranche vested, based on a 10% improvement in year-onyearEVA on the Group’s productive capital base being achieved. Vesting conditions also require employment at thematurity of the respective tranche.Schamin TrustNo changes took place during the year under review:Number of shares2013’0002012’000Outstanding at the beginning of the year 1 600 1 600Outstanding at the end of the year 1 600 1 600Exercisable at the end of the year 1 600 1 600Weighted average price of outstanding options (cents) 1 000 1 000Weighted average price of exercisable options (cents) 1 000 1 000Average remaining life (months) 45 57The maximum number of shares that may be issued in terms of the scheme may not in aggregate exceed 23 556 594shares in Sentula’s issued capital. Shares vest in the option holder on the date the option was granted. Thereafter theoption holder may exercise the options in individual tranches of 20% on each subsequent anniversary. The SchaminTrust scheme is being replaced by the three schemes mentioned above. This is an equity-settled scheme.Broad-based black economic empowerment transaction2013R’0002012R’000Share-based payment expense – BBBEE transaction 34 132 –The cost of implementing the BBBEE transaction is calculated in accordance with the statement of share-basedpayments in terms of International Financial Reporting Standards (IFRS 2).This IFRS 2 cost is a once-off cost charged to the income statement and does not represent a cash cost.The BBBEE transaction is an equity-settled share-based payment. IFRS 2 requires that all equity-settled share-basedpayments be measured at fair value at grant date and the corresponding increase recognised in equity.The value of the IFRS 2 charge is equal to the difference between the fair value of the assets granted by Sentula toShanike Investments No 171 Proprietary Limited less the fair value of the consideration received by Sentula.The following assumptions were used when calculating the IFRS 2 expense:– The fixed strike is based on the assumption that the preference share funding owed by Sentula ContractingProprietary Limited to Sentula is paid over a 5,5-year period (by June 2017) by R452 million from R600 million atinception;– The fixed strike is based on a Monte Carlo simulation on the anticipated balance of the preference shares over the5,5-year period;– The volatility of the option value is 23,75% (being the average volatility in the building and material sector asmeasured over five years and three years respectively;– The risk-free rate of return used was 7,20% which is based on a 5,5-year zero coupon return curve swap.

Sentula Mining Limited Integrated Annual Report 2013952013R’0002012R’0007 Finance chargesFinance income – received 3 249 3 032– Financial institutions 2 964 2 656– Debtors 2 45– South African Revenue Service 265 29– Other 18 302Finance expense – paid 58 139 62 377– Non-current borrowings 56 648 61 416– Bank overdraft 207 55– Suppliers 125 197– Interest on tax 756 509– Other 403 200Finance expense – non-cash 2 581 4 476– Facility fees recognised 2 581 2 581– Unwinding charges of rehabilitation liability – 1 895Total finance expense 60 720 66 853Net finance expense 57 471 63 821No borrowing costs have been capitalised during the year (2012: Nil).8 Investment in significant joint ventureDuring October 2008 the Group entered into a joint venture agreement with Jonah Capital BVI which led to theestablishment of a joint venture company, incorporated in Mauritius and known as Jonah Coal Botswana Limited.Sentula owns 50% of the share capital of Jonah Coal Botswana Limited. Jonah Coal Botswana Limited’s principalbusiness activity is investing in coal exploration companies.The Group’s share of assets and liabilities consolidated on a line-by-line basis is as follows:R’000CurrentassetsNoncurrentassetsTotalassetsCurrentliabilitiesNoncurrentliabilitiesTotalliabilities2013Jonah Coal Botswana Limited 735 50 551 51 286 (3 428) (15) (3 443)Revenues(Loss)2013Jonah Coal Botswana Limited – (4 290)R’000CurrentassetsNoncurrentassetsTotalassetsCurrentliabilitiesNoncurrentliabilitiesTotalliabilities2012Jonah Coal Botswana Limited 2 448 43 565 46 013 (2 279) (14) (2 293)Revenues(Loss)2012Jonah Coal Botswana Limited – (5 729)There are no fixed asset commitments or contingent liabilities relating to the joint venture.

Sentula Mining Limited Integrated Annual Report 201396Notes to the consolidated financial statements continuedfor the year ended 31 March 20132013R’0002012R’0009 TaxationNormal taxation 60 920 5 169– Current year 36 005 3 999– Prior year 22 882 (14 332)– Foreign 2 033 15 502Deferred taxation (89 209) 36 552– Current year (70 346) 32 802– Prior year (18 863) 3 750Effect of movement in foreign exchange rates (2 924) (96)Taxation (31 213) 41 625Reconciliation of effective tax rateLoss for the year (931 180) (490 569)Taxation 31 213 (41 625)Loss for the year after tax (899 967) (532 194)Income tax at statutory rate of 28% (260 730) (137 359)– Non-deductible expenses 21 271 21 801– Non-taxable gains (694) (409)– Assessed loss utilised (5 274) (10 627)– Unredeemed capex utilised – (5 503)– Tax effect of non-taxable income – (22 368)– Goodwill impairment 84 036 –– Prior year adjustment 10 946 (10 582)– Foreign tax 2 163 (1 474)– Foreign deferred tax asset not recognised 17 550 –– Foreign tax rate difference (4 244) (5 080)– Current year losses and temporary differences for whichno deferred tax asset was recognised 103 730 214 435– Other 33 (1 209)Income tax expense recognised in profit (31 213) 41 625Effective tax rate (%) 3,4 (8,5)The tax rate used for the 2013 reconciliation above is the corporate tax rate of 28% (2012: 28%) payable by corporateentities in South Africa on taxable profits under tax law in that jurisdiction.

Sentula Mining Limited Integrated Annual Report 20139710 Earnings per share2013 2012Basic and diluted loss per share (cents) (150,60) (88,93)Headline and diluted (loss)/earnings per share (cents) (26,98) 21,71Weighted average number of shares (’000) 581 005 581 005Diluted weighted average number of shares (’000) 581 005 581 005Headline earnings per share has been calculated in accordance with theSAICA Circular 3/2009 entitled “Headline Earnings” which forms part ofthe Listings Requirements of the JSE Limited.The adjustments made to arrive at headline (loss)/earnings are as follows: R’000 R’000Net loss for the year attributable to equity holders of the parent (875 017) (516 703)Adjusted for:Profit on disposal of plant and equipment (2 230) (2 464)Loss on disposal of plant and equipment 1 392 54 621Loss on disposal of assets held-for-sale 221 028 –Impairment of plant and equipment 186 902 591 171Impairment of assets held-for-sale 15 149 –Impairment of goodwill 300 127 –Impairment of intangible asset 9 162 –Tax effect of above adjustments (13 265) (508)Headline earnings attributable to ordinary shareholders (156 752) 126 11711 DividendThe Board of Directors has not declared an interim or final dividend for the years ended 31 March 2013 or 31 March 2012.During the year ended 31 March 2013, Buenti Drilling Proprietary Limited, a subsidiary of the Group, declared and paida dividend. As Buenti is not a wholly owned subsidiary of the Sentula Group of companies an amount of R2,2 millionwas paid to its non-controlling entity.2013 201212 Net asset value per shareNet asset value per share (cents)* 274,98 408,08Tangible net asset value per share (cents)* 249,91 332,36Net asset value per share as previously disclosed (cents) – 418,37Tangible net asset value per share as previously disclosed (cents) – 342,66Shares in issue at the end of the year – excluding treasury shares (‘000) 581 005 581 005Shares in issue at the end of the year (‘000) 586 559 586 559The calculation of net asset value and tangible net asset value per share excludes the treasury shares.Tangible net asset value excludes goodwill and intangible assets.* Previously net asset value per share and tangible net asset value per share was calculated on total equity and not on equityattributable to ordinary shareholders.

Sentula Mining Limited Integrated Annual Report 201398Notes to the consolidated financial statements continuedfor the year ended 31 March 201313 Property, plant and equipmentR’000LandandbuildingsMiningassetsPlantandequipmentMotorvehiclesFurniture,fittings andequipmentTotal2013CostAt 31 March 2012 77 293 180 089 1 844 822 164 871 24 594 2 291 669Additions 15 660 223 177 714 16 604 4 515 214 716Transfer (to)/from inventory – – 1 875 – – 1 875Disposals – – (35 979) (12 419) (46) (48 444)Scrapping of assets – – (38 948) (2 902) (2 674) (44 524)Reclassification – work in progress – – 115 (115) – –Reclassification – intangibles – – – – (4 040) (4 040)Foreign currency translation 910 – 23 996 3 440 147 28 493Transfer to held-for-sale assets 515 – (27 610) 20 156 390 (6 549)At 31 March 2013 94 378 180 312 1 945 985 189 635 22 886 2 433 196Accumulated depreciation andimpairment lossesAt 31 March 2012 2 070 22 964 623 361 82 760 14 580 745 735Depreciation 1 766 – 136 791 22 228 3 569 164 354Disposals – – (22 327) (8 540) (41) (30 908)Impairment of assets – – 185 916 986 – 186 902Foreign currency translation 31 – 9 212 1 495 121 10 859Scrapping of assets – – (21 264) (1 496) (2 380) (25 140)At 31 March 2013 3 867 22 964 911 689 97 433 15 849 1 051 802Net book value at 31 March 2013 90 511 157 348 1 034 296 92 202 7 037 1 381 3942012CostAt 31 March 2011 81 154 177 493 3 569 399 209 861 28 228 4 066 135Additions 2 760 2 596 258 302 25 705 2 237 291 600Transfer (to)/from inventory – – 1 298 – 50 1 348Reclassification to accumulateddepreciation 103 – 5 665 793 70 6 631Disposals (1 650) – (388 763) (37 181) (389) (427 983)Scrapping of assets – – (4 320) (1 330) (412) (6 062)Scrapping of damaged assets – – (3 400) – – (3 400)Reclassification – work-in-progress 211 – – – 1 747 1 958Foreign currency translation (230) – 592 274 – 636Transfer to held-for-sale assets (5 055) – (1 593 951) (33 251) (6 937) (1 639 194)At 31 March 2012 77 293 180 089 1 844 822 164 871 24 594 2 291 669Accumulated depreciation andimpairment lossesAt 31 March 2011 1 068 22 331 1 330 086 100 574 16 650 1 470 709Depreciation 1 611 633 166 765 27 616 4 445 201 070Reclassification from cost 103 – 5 665 793 70 6 631Transfer to held-for-sale assets (652) – (1 264 222) (23 774) (5 845) (1 294 493)Disposals – – (195 444) (23 352) (322) (219 118)Impairment of assets 350 – 588 393 2 428 – 591 171Impairment of damaged assets – – 3 125 – – 3 125Foreign currency translation (410) – (7 671) (637) (10) (8 728)Scrapping of assets – – (3 336) (888) (408) (4 632)At 31 March 2012 2 070 22 964 623 361 82 760 14 580 745 735Net book value at 31 March 2012 75 223 157 125 1 221 461 82 111 10 014 1 545 934

Sentula Mining Limited Integrated Annual Report 20139913 Property, plant and equipment (continued)Assets pledged as securityThe Group’s obligations under the merged term facility are secured by registered notarial bonds over plant andequipment and motor vehicles, which have a carrying amount of R1 079 million (2012: R1 467 million).The Group’s obligations under the WesBank instalment sale agreement are secured by the lessors’ title to thefinancial assets, which have a carrying amount of R70,2 million (2012: R69 million).The Group’s obligations under the finance lease in favour of Atlas Copco Customer Finance AB are secured by theCompany’s title to the financial assets, which have a carrying amount of R10,2 million (2012: Nil).Impairment lossIn the exploration drilling sector, Geosearch’s exploration drilling equipment with a carry value of R54,9 million wasimpaired by R49,3 million during the year. This impairment was raised due to certain machines being operationallyuneconomical and as a result of the decrease in exploration drilling activities in the platinum group metals (“PGM”)industry. These machines were written down to scrap value.During the current year, plant with a carry value of R218,6 million (2012: R5,3 million) was impaired by R137,5 million(2012: R3 million) in Benicon Opencast Mining Proprietary Limited within the opencast mining sector. This impairmentwas raised due to certain machines being operationally uneconomical and technologically obsolete for redeployment.These machines were written down to a deemed open market value. The recoverable amounts of these assets weredetermined by using the fair value less cost to sell of each asset. These values were based on recent market-relatedprices and in some instances on the scrap value of the equipment.During the previous year, plant and equipment to the value of R1,101 million was impaired by R591 million within theopencast mining sector, predominately within Megacube Mining Proprietary Limited. This impairment was raised dueto certain machines being operationally uneconomical. These machines were written down to a deemed open marketvalue. The recoverable amounts of these assets were determined by using fair value less cost to sell of each asset.These values were determined by a third party assessor and from recent related prices and in some instances on thescrap value of the equipment.Megacube assets were impaired and transferred to assets held-for-sale as disclosed in note 19.A register containing the information required by regulation 25(3) of the Companies Regulations 2011, is available forinspection at the registered office of the Company.2013R’0002012R’00014 Mineral rightsCarrying value at the beginning of the year 410 761 410 761Gross carrying value 419 635 419 635Accumulated amortisation (8 874) (8 874)Amortisation for the year – –Carrying value at the end of the year 410 761 410 761Gross carrying value 419 635 419 635Accumulated amortisation (8 874) (8 874)During 2009, the Group acquired the entire issued share capital of Benicon Mining which holds the prospecting rightson the remaining extent of Portion 7 (a Portion of Portion 1) of the farm Bankfontein 215IS situated in the magisterial/administrative district of Ermelo and comprising 513.9190 hectares in extent. A prospecting right renewal, for a furtherthree-year extension, was granted in June 2012 by the DMR. On 20 April 2013, a new order mining right was approvedby the DMR.During 2008, the Group acquired the entire issued share capital of the Benicon Coal Group which holds the mininglicence number 4198 in the magisterial district of Kamhlushwa in Mpumalanga consisting of the following farms:Grobler 479JU, Guillaume 480JU, Wildebeest 494JU, Rusplek 495JU, Sweet home 495JU, Bonnie vale 497JU, Excelsior498JU, Murray 502JU, Fig tree 503JU, Beginsel 504JU and a portion of unsurveyed state land. The licence entitles theBenicon Coal Group to mine until 19 September 2020.There is no amortisation of the mineral right as Nkomati Anthracite mine was under care and maintenance during theMarch 2013 and March 2012 financial years.

Sentula Mining Limited Integrated Annual Report 2013100Notes to the consolidated financial statements continuedfor the year ended 31 March 201315 Intangible assets and goodwillIntangible assetsIntangible assets comprise exploration and evaluation assets and software.R’000Explorationcosts Software OtherTotalintangibleassetsGoodwillTotalintangibleassets andgoodwill2013CostAt 31 March 2012 27 143 – 19 599 46 742 412 709 459 451Reclassification from property,plant and equipment – 4 040 – 4 040 – 4 040Exploration and evaluation 309 – – 309 – 309Foreign currency translation 3 359 – – 3 359 8 066 11 425At 31 March 2013 30 811 4 040 19 599 54 450 420 775 475 225Accumulated amortisationand impairment lossesAt 31 March 2012 – – 19 522 19 522 – 19 522Impairment of intangible asset 9 162 – – 9 162 300 127 309 289Amortisation – 673 77 750 – 750At 31 March 2013 9 162 673 19 599 29 434 300 127 329 561Net book value at 31 March2013 21 649 3 367 – 25 016 120 648 145 6642012CostAt 31 March 2011 22 810 – 19 599 42 409 408 338 450 747Exploration and evaluation 2 212 – – 2 212 – 2 212Foreign currency translation 2 121 – – 2 121 4 371 6 492At 31 March 2012 27 143 – 19 599 46 742 412 709 459 451Accumulated amortisationand impairment lossesAt 31 March 2011 – – 19 062 19 062 – 19 062Amortisation 460 460 460At 31 March 2012 – – 19 522 19 522 – 19 522Net book value at 31 March 2012 27 143 – 77 27 220 412 709 439 929The exploration and evaluation asset relates to prospecting rights held by Benicon Mining, Asenjo Energy and IndongoMining projects. All exploration and evaluation expenditure incurred has been capitalised as the economic viability ofthese assets is still being assessed, and until this has been ascertained, development will not commence. These assetsare therefore also not amortised.A decision was taken to impair the exploration and evaluation asset held in Mozambique due to discontinuedexploration and evaluation because of the absence of commercial reserves. Sufficient data exists to indicate that thebook value will not be recovered from future development and production.

Sentula Mining Limited Integrated Annual Report 20131012013R’0002012R’00015 Intangible assets and goodwill (continued)GoodwillCarrying value at the beginning of the year 412 709 408 338– Geosearch 300 127 300 127– Mauritius 40 017 35 646– CCT 35 138 35 138– JEF 19 687 19 687– Ritchie 17 740 17 740Foreign currency translation – Mauritius 8 066 4 371Impairment (300 127) –Carrying value at the end of the year 120 648 412 709– Geosearch – 300 127– Mauritius 48 083 40 017– CCT 35 138 35 138– JEF 19 687 19 687– Ritchie 17 740 17 740Goodwill arose from the business acquisitions during the 2007 and 2008 financial years.Goodwill is not amortised but subject to an annual impairment test.The recoverable amounts of the cash-generating units (“CGUs”) are determined from value-in-use calculations. Thekey assumptions for the value-in-use calculations are those regarding the discount rates, growth rates and expectedrevenue and cost projections during the period. These calculations are based on financial budgets approved bymanagement covering a five-year period. Management estimates discount rates using real post-tax rates that reflectcurrent market assessments of the time value of money and the risks specific to the CGUs. The growth rates are basedon growth prospects within the specific industry. Changes in revenue and cost projections are based on long-terminflation expectations.During the year, exploration drilling services in the South African platinum industry declined significantly. This, togetherwith low visibility of a recovery in the mining and exploration sector in Mozambique, had an adverse impact on theprojected value-in-use of Geosearch, resulting in an impairment charge of R300 million.The post-tax real discount rate used to measure Geosearch’s value-in-use was 8,66% and the expected growth rateused over a five-year period was 10%.The growth rate applies only to the formal budgeted period with the value-in-use calculation based on theextrapolation of the budgeted cash flows for year five.Operating margins have been based on past experience and future expectations in light of anticipated economic andmarket conditions. Discount rates are based on the Group’s beta adjusted to reflect management’s assessment of thespecific and sovereign risks related to Geosearch.Key assumptions used in the calculation of recoverable amounts are discount rates and growth rates. Theseassumptions are as follows:2013 2012Nominal pre-tax discount rate (%) n/a 17,08Real post-tax discount rate (%) 8,66 n/aGrowth rate over the five-year period (%) 10,00 4,80A 1% increase in the real post-tax discount rate or a 1% increase in thegrowth rate will result in the following decrease in the impairment value:Real post-tax discount rate lowered by an additional 1% (R’000) 12 276 –EBITDA (growth) increased by 1% (R’000) 6 621 –

Sentula Mining Limited Integrated Annual Report 2013102Notes to the consolidated financial statements continuedfor the year ended 31 March 20132013R’0002012R’00016 InventoriesFinished goods 58 761 15 130Work-in-progress 2 648 9 831Consumables and spares 128 383 339 560189 792 364 521Inventories expensed during the year 635 636 403 336Inventory write-off 2 702 30 478Write-down of inventory to net realisable value 133 783 –The Bucyrus-Erie 1260-W Walking Dragline, including all parts, components and spares constituting such 1260 Draglineheld in Benicon Sales Proprietary Limited, has been transferred to inventory as the option agreement that waspreviously in place expired and there has been no further offers to purchase the dragline. The dragline is measured atthe lower of its carrying amount and fair value less cost to sell.The inventory write-down within the exploration drilling sector, relates to inventory associated with certain drill rigswhich are operationally uneconomical and technologically obsolete. These drill rigs became obsolete following asubstantial decrease in exploration drilling activities within the PGM industry and the new SHE requirements for drillrigs within this sector. Where contracts have been terminated or near termination in rural operations, inventory waswritten down to net realisable value as it is uneconomical to redeploy this inventory to other operations.2013R’0002012R’00017 Trade and other receivablesTrade receivables* 484 262 408 245Other receivables** 39 840 39 119524 102 447 364Unaccounted funds 182 917 181 917Value added taxation 11 090 21 506718 109 650 787Provision for unaccounted funds write-off (182 917) (181 917)535 192 468 870Impairment loss included in the above 12 428 24 517* The proceeds amounting to R127 million (including VAT and administration fees)from the Megacube auction held on 27 March 2013, are recorded in trade andother receivables. As at the date of this report an amount of R80 million has beenreceived to date. The non-payment of USD4,924 million by the cut-off paymentdate of 31 May 2013, for 73 items purchased at the Ritchie Brothers Megacubeauction, by the South African-based JOWN Group, acting on behalf ofGECAMINES-Sarl of the Democratic Republic of Congo, has resulted in Sentula/Megacube initiating a process with Ritchie Brothers Auctioneers to dispose ofthese assets to interested alternative buyers. Indications are that this process,due to the nature of the assets, could be concluded by the end of July 2013.** Included in other receivables is the fair value of the interest rate hedge asdisclosed below:Opening balance 2 858 –Purchase price of interest rate hedge – 9 535Change in fair value recognised through profit and loss (2 486) (6 677)Amount included in other receivables 372 2 858

Sentula Mining Limited Integrated Annual Report 201310317 Trade and other receivables (continued)The interest rate hedge was not designated as a hedging instrument and therefore hedge accounting was not applied.The interest rate hedge facility was entered into on 1 April 2011 with Standard Bank, on the following termsand conditions:Notional amount:R350 millionTrade date: 1 April 2011Effective date: 1 April 2012Termination date: 31 March 2015Cap rate: 8,57%Floating rate option:ZAR – JIBAR SAFEXReset dates:Calendar quartersA cession is held over the trade receivables of Sentula in favour of the general short-term banking facility held atStandard Bank as disclosed in note 18.The Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables aredisclosed in note 31.18 Cash and cash equivalents2013R’0002012R’000Bank balances 109 526 104 177Call deposits 33 74 713Cash on hand 1 150 1 346110 709 180 236Bank overdraft (58 062) –Cash and cash equivalents 52 647 180 236The Group’s exposure to interest rate risk and sensitivity analysis for financial assets and liabilities are disclosed innote 31.2013R’0002012R’00019 Assets classified as held-for-saleDragline held for sale – 44 612Plant and equipment held-for-sale – Megacube 1 807 342 447Plant and equipment held-for-sale – Cameroon – 2 2561 807 389 315Dragline – Equipment, trading and spares segmentThe Bucyrus-Erie 1260-W Walking Dragline including all parts, components and spares constituting such 1260 Draglinehas been transferred to inventory as the option agreement to purchase this dragline that was previously in placeexpired on 28 February 2012 and there were no further offers to purchase the dragline. Previously the dragline washeld-for-sale as Benicon Sales Proprietary Limited had entered into an option agreement to sell the Bucyrus-Erie1260-W Walking Dragline, including all parts, components and spares constituting such 1260 Dragline. The optionexpiring on 30 June 2011 was further extended to 30 September 2011 for an option fee of R2 million, and furtherextended to 28 February 2012 for an option fee of R4 million, whereafter it expired. The dragline is measured at thelower of its carrying amount and fair value less cost to sell.Plant and equipment held-for-sale – Opencast mining and earthmoving segmentThe majority of the assets held-for-sale in Megacube Mining Proprietary Limited (“Megacube”) were sold on auctionon 27 March 2013 for R118,7 million, and the remaining assets of R41,8 million were sold prior to the auction. This wasin line with management’s intention to wind down Megacube. During the previous year, assets with a book value ofR342 million were classified as assets held-for-sale. These assets were impaired to their current market value beforebeing classified as held-for-sale. As part of the winding down of Megacube, it is management’s intention that theseassets be sold during the next 12 months.

Sentula Mining Limited Integrated Annual Report 2013104Notes to the consolidated financial statements continuedfor the year ended 31 March 201319 Assets classified as held-for-sale (continued)Plant and equipment held-for-sale – Exploration drilling segmentSentula Mining Services Mauritius Limited concluded an agreement on 15 March 2012 to sell inventory and plant in itsCameroon operation.Movement in the assets held-for-saleR’000 Megacube Dragline Cameroon TotalAt 31 March 2012 342 447 44 612 2 256 389 315Additions 57 165 – – 57 165Transfer (to)/from inventory 908 (44 612) – (43 704)Impairment of assets held-for-sale (15 149) – – (15 149)Disposals (379 236) – (2 256) (381 492)Transfer to property, plant and equipment 6 549 – – 6 549Transfer to other receivables (10 877) – – (10 877)At 31 March 2013 1 807 – – 1 8072013R’0002012R’00020 Share capital and premiumAuthorised share capital1 000 000 000 (2012: 1 000 000 000) ordinary shares of 1 cent each 10 000 10 000Issued share capital586 599 181 (2012: 586 559 181) ordinary shares of 1 cent eachBalance at the beginning of the year 5 866 5 866Balance at the end of the year 5 866 5 866Share premiumBalance at the beginning of the year 2 014 438 2 014 438Balance at the end of the year 2 014 438 2 014 438Treasury sharesBalance at the beginning of the year (25 898) (25 898)Balance at the end of the year (25 898) (25 898)Total share capital, premium and treasury shares 1 994 406 1 994 406The authorised but unissued share capital is under the control and authority of the directors subject to the CompaniesAct and JSE Limited Listings Requirements, until the next annual general meeting. The directors have not beengranted the approval to issue ordinary shares, or sell treasury shares for cash, without the consent of the shareholders.Note 6 sets out the details in respect of the share option scheme.All shares issued by the Company were fully paid.

Sentula Mining Limited Integrated Annual Report 20131052013R’0002012R’00021 Loans and borrowingsInterest-bearing borrowingsSecured at amortised costStandard Bank merged facility 473 782 646 080WesBank instalment sale facility 69 962 62 931543 744 709 011Balance at the end of the year 543 744 709 011Current portion of loans and borrowings (543 744) (220 316)Non-current portion of loans and borrowings – 488 695The Standard Bank merged term facility and the WesBank facility have been classified as current liabilities at31 March 2013. The disclosure was required following a breach of the Debt Service Cover Ratio (“DSCR”) and TotalDebt to EBITDA Ratio (“TDR”) at 31 March 2013. All debt instalments were made timeously during the 2013financial year. Subsequent to year-end the Standard Bank consortium (“SBC”) agreed to condone the March 2013covenant breach. As a condition for condonation of the 31 March 2013 covenant breaches, the SBC also requiresthat the SBC facility be reduced by an amount of R150 million within a six-month period ending 31 December 2013.This condonation is conditional on Sentula providing SBC with an undertaking to reduce the senior debt in themanner disclosed in note 34.The outstanding proceeds from the auction, as disclosed in note 17, will be utilised as a part settlement of theSeptember instalment.2013R’0002012R’000Standard Bank merged term facility 473 782 646 080The effective average interest rate applicable to these liabilities is 8,7% (2012: 8,7%) and is based on a marginof 325 basis points above the three-month JIBAR rate and is reset quarterly. As a condition for the condonation ofthe 31 March 2013 covenant breaches, the SBC has increased its facility rate by 200 basis points and imposed acondonation fee of R750 000.The repayment terms of these loans, had they not been classified as current, would have been as follows:Aggregate repayments due as follows:2013R’0002012R’000Year ended 31 March– 2013 – 206 526– 2014 234 901 223 274– 2015 238 881 216 280473 782 646 080Total facility 700 000 700 000Undrawn facility 226 218 53 920The Group’s obligations under the merged term facility are secured by registered notarial bonds over plant andequipment and motor vehicles, which have a carrying amount of R1 079 million (2012: R1 493 million). Sentulaprovided a cession and pledge of all the shares it holds in the Group subsidiaries, for the due and punctual fulfilmentof all obligations by the Company. The subsidiaries have subordinated all claims which they may respectively haveagainst one another to the claims which the lenders may have against Sentula and such other subsidiaries of Sentula.

Sentula Mining Limited Integrated Annual Report 2013106Notes to the consolidated financial statements continuedfor the year ended 31 March 20132013R’0002012R’00021 Loans and borrowings (continued)WesBank instalment sale agreement 69 962 62 931Total facility 100 000 100 000Undrawn facility 30 038 37 069During the year ended 31 March 2012, Sentula entered into a R100 million instalment sale facility with WesBank,which became effective on 27 October 2011.The Group’s obligations under the WesBank instalment sale liabilities were secured by the lessors’ title of the financialassets, which had a carrying amount of R70,2 million (2012: R69,3 million).The effective average interest rate applicable to these liabilities is 6,4% (2012: 6,2%) and is a prime linked facility.The repayment terms of these loans, had they not been classified as current, are as follows:Aggregate repayments due as follows:2013 2012R’000 Principal Interest Total Principal Interest TotalYear ended 31 March– 2013 – – – 13 790 4 046 17 836– 2014 21 747 3 792 25 539 15 667 2 786 18 453– 2015 23 202 2 337 25 539 16 771 1 682 18 453– 2016 and later 25 013 811 25 824 16 703 521 17 22469 962 6 940 76 902 62 931 9 035 71 966The Company’s borrowing powers are unlimited in terms of the Memorandum of Incorporation.The Company’s exposure to interest rate risk and sensitivity analysis for loans and borrowings are disclosed in note 31.2013R’0002012R’00022 Finance lease obligationsMinimum lease payments due– within one year 2 468 –– in second to fifth year inclusive 3 581 –6 049 –Less: Future finance charges (549) –Present value of minimum lease payments 5 500 –Present value of minimum lease payments due– within one year 2 129 –– in second to fifth year inclusive 3 371 –5 500 –Non-current liabilities 3 371 –Current liabilities 2 129 –5 500 –The average lease term is three years and the effective borrowing rate is a fixed USD rate of 7,5%.Interest rates are linked to a fixed rate at the contract date. All leases have fixed repayment terms.The Group’s obligations under the finance leases in favour of Atlas Copco Customer Finance AB are secured by theGroup’s title to the plant and equipment, which have a carrying amount of R10,2 million (2012: Nil).

Sentula Mining Limited Integrated Annual Report 20131072013R’0002012R’00023 Rehabilitation provisionCarrying value at the beginning of the year 66 899 65 004Unwinding charge to the income statement – 1 895Carrying value at the end of the year 66 899 66 899The Group is exposed to environmental liabilities pertaining to its mining operations at Nkomati Anthracite. Estimatesof the cost of environmental and other remedial work, such as reclamation costs, close-down, and restoration andpollution control, are made on an annual basis, by an independent environmental consultancy, based on theestimated useful life of the mine.The mine was under care and maintenance during the year and no unwinding charge was recognised. There has alsobeen no change in the estimates relating to the provision.2013R’0002012R’000Restricted investmentsFirst National Bank 8 693 8 693Restricted investments are 12-month deposits held by First National Bank and available to be utilised only todischarge the Company’s environmental rehabilitation obligations pertaining to the Nkomati Anthracite mine.This amount has been ceded to First National Bank for a guarantee issued in favour of the DMR.The gross value of the environmental rehabilitation obligation of the Company is R119 million (2012: R119 million).2013R’0002012R’00024 Deferred revenueIncome received in advance – 1 100Non-current liabilities – –Current liabilities – 1 100– 1 100There is no deferred revenue for 2013.2013R’0002012R’00025 Trade and other payablesTrade payables 168 925 204 343Other payables 71 650 76 930240 575 281 273Provision for leave pay and employee incentives 21 008 34 178Value added taxation 17 116 20 081278 699 335 532The Group’s exposure to interest rate risk and sensitivity analysis for financial liabilities are disclosed in note 31.

Sentula Mining Limited Integrated Annual Report 2013108Notes to the consolidated financial statements continuedfor the year ended 31 March 20132013R’0002012R’00026 Deferred taxBalance at the beginning of the year 262 983 226 623Originating temporary differences (73 270) 36 360Prior year adjustments (18 863) –Balance at the end of the year 170 850 262 983The balance comprises:Accelerated wear and tear for tax purposes on property,plant and equipment 339 916 380 931Unredeemed capital expenditure (226 910) (222 170)Fair value adjustment on business combinations 123 102 123 090Provisions (21 686) (25 095)Foreign exchange effect 8 700 7 940Assessed losses utilised (53 512) (3 520)Prepayments 181 175Other 1 059 1 632Net deferred tax liabilities 170 850 262 983Deferred tax asset 50 525 34 869– Deferred tax asset to be recovered after more than 12 months 40 926 27 522– Deferred tax asset to be recovered within 12 months 9 599 7 347Deferred tax liability 221 375 297 852– Deferred tax liability to be recovered after more than 12 months 184 602 215 932– Deferred tax liability to be recovered within 12 months 36 773 81 920Movement in temporary differences during the yearR’000Openingbalance31 March 2012Recognised inincomestatementClosingbalance31 March 2013Accelerated wear and tear 380 931 (41 015) 339 916Fair value adjustment on business combinations 123 090 12 123 102Assessed losses utilised (3 520) (49 992) (53 512)Provisions (25 095) 3 409 (21 686)Prepayments 175 6 181Unredeemed capital expenditure (222 170) (4 740) (226 910)Foreign exchange effect 7 940 760 8 700Other 1 632 (573) 1 059262 983 (92 133) 170 850

Sentula Mining Limited Integrated Annual Report 2013109Openingbalance31 March 2011Recognised inincomestatementClosingbalance31 March 201226 Deferred tax (continued)Accelerated wear and tear 548 752 (167 821) 380 931Fair value adjustment on business combinations 123 078 12 123 090Assessed losses utilised (27 303) 23 783 (3 520)Lease liability (1 236) 1 236 –Provisions (8 201) (16 894) (25 095)Prepayments 590 (415) 175Unredeemed capital expenditure (413 084) 190 914 (222 170)Foreign exchange effect – 7 940 7 940Other 4 027 (2 395) 1 632226 623 36 360 262 983Unrecognised deferred taxDeferred tax assets have not been recognised in respect of tax losses amounting to R367 million (2012: R236 million)as it is not probable that future taxable profit will be available against which the Group can utilise the benefitstherefrom in the foreseeable future.2013R’0002012R’00027 Other financial liabilitiesBalance at the beginning of the year 7 506 7 506Balance at the end of the year 7 506 7 506These liabilities relate to amounts payable to the original vendors of the Nkomati mine and Bankfontein prospect andare payable based on units of production from the mines in the form of a royalty. As Nkomati Anthracite mine was oncare and maintenance during the 2012 and 2013 financial years, no production took place during these years.Fair value is determined by discounting the future royalty liability at the time of acquisition. The royalty liability is theproduct of the royalty rate and the run-of-mine tonnes, derived from the resource base, and estimated to beproduced or sold over the current life of mine.Changes to the aforementioned valuation inputs will determine the range of the liability payable.The royalty will only become payable on mining recommencing at Nkomati Anthracite mine and mining commencingat Bankfontein.

Sentula Mining Limited Integrated Annual Report 2013110Notes to the consolidated financial statements continuedfor the year ended 31 March 20132013R’0002012R’00028 Taxation paidBalance at the beginning of the year (5 547) 16 482Amounts recognised in profit or loss 60 920 5 169Effect of movement in exchange rates 2 924 96Provision for penalties 6 108 –Balance at the end of the year (22 437) 5 547Taxation paid 41 968 27 2942013R’0002012R’00029 Capital commitmentsCapital expenditure contracted for in respect of property,plant and equipment – 22 920Capital expenditure authorised by the directors not contracted for inrespect of property, plant and equipment– New replacement equipment 148 874 204 786– Refurbishments 41 000 59 900The capital expenditure will be financed through vehicle asset finance,vendor finance and working capital.Operating lease commitmentsFuture minimum lease payments– up to 1 year 11 272 2 952– 1 to 5 years 10 461 3 147The lease agreements are entered into on market-related terms and conditions and are subject to annual marketrelatedescalation in the lease rates. Property lease agreements are subject to a lease extension option.30 Contingent liabilitiesKeatonDuring the 2013 financial year, Megacube Mining Proprietary Limited (“MM”) instituted legal action proceedingsagainst Keaton Mining Proprietary Limited for the recovery of R41,5 million owing to MM for work performed onits Vanggatfontein operation.Subsequent to the above claim, a demand for payment of R119,9 million was brought against MM in respect of analleged breach of contract and substandard mining practices adopted by MM, which allegedly resulted in coal losses.In accordance with the contract, the matters will be independently arbitrated upon. A date for the arbitration has yetto be finalised, but is expected to be set down for the second half of the 2014 financial year. The Company and itsattorneys believe that there is a strong case in support of the initial claim, and that there is a good defence againstthe alleged counterclaim, but are not able to estimate the probable loss or possible loss.To the best of our knowledge and belief there are no other contingent liabilities to third parties and/or contingentassets not set out or referred to in this report which may materially affect the financial position of the Group.

Sentula Mining Limited Integrated Annual Report 201311131 Financial instruments31.1 Risk management activitiesIn the normal course of its operations, the Group is exposed to currency, interest rate, liquidity and credit risk.This note describes the Group’s objectives, policies and processes for managing those risks and methods used tomeasure them. In order to manage these risks, the Group has developed a comprehensive risk management processto facilitate control and monitoring. The Board has overall responsibility for the determination of the Group’s riskmanagement objectives and polices and, while retaining ultimate responsibility for them, it has delegated theauthority for designing and operating processes that ensure the effective implementation of the objectives andpolicies to the Group’s finance function. The Group’s treasury function provides services to the subsidiaries,co‐ordinates access to domestic financial markets and monitors and manages the financial risks relating to theoperations of the Group. These risks include market risk (including currency risk, fair value interest rate risk and pricerisk), credit risk, and liquidity risk. Operational and business risks are reviewed and addressed on a monthly basis.The Group does not enter into or trade financial instruments, including derivative financial instruments, forspeculative purposes.31.2 Credit riskCredit risk is the risk of financial loss to the Group if a customer or a counterparty fails to meet its contractualobligations. The Group is mainly exposed to credit risk from credit sales and this risk is mitigated by dealing withcreditworthy counterparties and a few major clients or, where deemed necessary, sourcing credit insurance. It isGroup policy to assess the credit risk of new customers before entering into a contract and this is monitored on anongoing basis.The Group procures financing from a consortium (comprising Standard Bank, HSBC and Sanlam) and WesBank. Theseinstitutions are deemed to be credible financial institutions, the financial stability of which does not pose a threat tothe Group.The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to creditrisk at the reporting date was:Carrying amount2013R’0002012R’000Trade receivables 484 262 408 245Other receivables 39 840 39 119Trade and other receivables 524 102 447 364Cash and cash equivalents 110 709 180 236Restricted investments 8 693 8 693643 504 636 293The maximum exposure to credit risk for trade and other receivablesat the reporting date by geographic region was:South Africa 338 071 308 529Botswana 15 906 15 219Mozambique 18 458 42 477Tanzania – 7 884Other African countries 131 518 73 255UK and Europe 6 878 –USA and Canada 966 –Russia 340 –Jordan 1 331 –Australia 8 101 –Aland Islands 2 533 –524 102 447 364

Sentula Mining Limited Integrated Annual Report 2013112Notes to the consolidated financial statements continuedfor the year ended 31 March 201331 Financial instruments (continued)31.2 Credit risk (continued)The maximum exposure to credit risk for trade and other receivables at the reporting date by category was:2013R’000Carrying amount2012R’000Mining houses 331 567 357 787Exploration companies 94 101Mining subcontractors 37 977 34 002Deferred fees 4 732 7 314Auction proceeds 122 175 –Other 27 557 48 160524 102 447 364The ageing of trade receivables at the reporting date was:Not past due 333 340 269 075Past due 0 – 30 days 62 080 79 542Past due 31 – 120 days 14 673 20 205Past due 121 – 180 days 33 922 13 147Past due 181 days and over 40 247 26 276Trade receivables not impaired 484 262 408 245The movement in the allowance for impairment in respect of tradeand other receivables during the year was as follows:Balance at 1 April 24 517 5 346(Reversal of)/increase in impairment provision (12 089) 19 171Balance at 31 March 12 428 24 517Balance at 31 March comprising: 12 428 24 517Impairment provision on trade receivables 4 569 16 658Impairment provision on other receivables 7 859 7 859At 31 March 2013, an impairment provision of R12,4 million (2012: R24,5 million) relates to customers that haveindicated they are not able to meet their outstanding balances, mainly due to prevailing economic conditions. TheGroup believes that the unimpaired amounts that are past due by more than 30 days are still collectible, based onhistoric payment behaviour and extensive analyses of the underlying customers’ credit rating.Based on historic default rates, the Group believes that, apart from the above, no impairment allowance is necessaryin respect of the trade receivables not past due or past due by up to 30 days.31.3 Foreign exchange riskThe Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,primarily with respect to the US Dollar. Foreign exchange risk arises from future commercial transactions, recognisedassets and liabilities, and new investments in foreign operations.Foreign exchange risk also arises when individual Group entities enter into transactions denominated in a currencyother than the functional currency.The Group is exposed to currency risk on purchases made on plant and equipment globally. Purchases fromthese suppliers are made on a central basis and the risk is hedged using forward exchange contracts. The forwardexchange contracts entered into from time to time are economic hedges and therefore the Group does not applyhedge accounting.The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translationrisk. Currency exposure arising from the net assets of the Group’s foreign operations is managed primarily throughthese operations holding cash denominated in the relevant foreign currency.

Sentula Mining Limited Integrated Annual Report 201311331 Financial instruments (continued)31.3 Foreign exchange risk (continued)The Group’s exposure to foreign currency risk was as follows:R’000ZAR equivalentof USDexposure 12013 2012ZAR equivalentof BWPexposure 2ZAR equivalentof USDexposure 1ZAR equivalentof BWPexposure 2Trade receivables 94 608 15 906 113 635 15 049Cash and cash equivalents 84 917 8 380 87 199 9 285Trade payables (7 685) – (13 771) (6 541)Gross balance sheet recognised 171 840 24 286 187 063 17 7931.This column discloses the USD exposure of foreign operations translated to ZAR.2.This column discloses the BWP exposure of foreign operations translated to ZAR.The following significant exchange rates applied during the year:ZARAveragerate2013 2012Reporting datespot rateAveragerateReporting datespot rateUSD 8,430 9,240 7,620 7,690BWP 1,110 1,120 1,070 1,070Sensitivity analysisA 10% strengthening of the Rand against the following currencies at 31 March 2013 would have increased/(decreased)equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particularinterest rates, remain constant.The analysis is performed on the same basis for 2012.Equity’000Profit or loss’00031 March 2013USD (31 007) 5 923BWP (5 706) 46431 March 2012USD (20 837) (5 802)BWP (6 562) (560)A 10% weakening of the Rand against the above currencies at 31 March 2013 would have had the equal but oppositeeffect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.31.4 Interest rate riskAt the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:2013R’0002012R’000Variable rate instruments– Financial assets 109 559 178 890– Financial liabilities (607 306) (709 011)(497 747) (530 121)The Group is exposed to interest rate risk from long-term borrowings at variable rates. Fluctuations in interest ratesimpact the value of the short-term investments and financing activities giving rise to interest rate risk. In the ordinarycourse of business the entities within the Group receive cash proceeds from its operations and are required to fundworking capital and capital expenditure requirements. All entities within the Group are not permitted to borrowlong-term from external sources. Cash is managed in a manner to ensure that all surplus funds held within the Groupare invested with the centralised treasury. The surplus funds are invested to maximise returns while ensuring that thecapital is safeguarded to the maximum extent possible by investing only with highly rated financial institutions.Contractual arrangement for committed borrowing facilities are maintained with two banking counterparts to meet theCompany’s funding requirements.

Sentula Mining Limited Integrated Annual Report 2013114Notes to the consolidated financial statements continuedfor the year ended 31 March 201331 Financial instruments (continued)31.4 Interest rate risk (continued)Cash flow sensitivity analysis for variable rate instrumentsA sensitivity analysis is performed by assuming that the amount of the assets and liabilities outstanding at the reportingdate was outstanding for the whole year. A 200 basis point increase or decrease is used when reporting interest raterisk internally to key management personnel and represents management’s assessment of a reasonable and possiblechange in interest rates.If interest rates had been 200 basis points higher/lower and all the other variables were held constant, the Group’sprofit after tax for the year ended 31 March 2013 would decrease/increase by R12,6 million (2012: R13,4 million). This isattributable to the Group’s exposure to interest rates on its variable borrowings. The analysis is performed on the samebasis for 2012.31.5 Liquidity risk managementLiquidity risk arises from the Group’s management of working capital and the finance charges and principalrepayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financialobligations as they fall due. The Group’s policy is to ensure that it will always have sufficient cash to allow it to meetits liabilities when they become due. The Group manages liquidity risk via a centralised treasury, by maintainingadequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actualcash flows.The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities. Thesetables have been drawn up based on the undiscounted cash flows of financial liabilities and based on the earliest dateon which the Group can be required to pay.WeightedaverageeffectiveinterestrateLess thanone monthR’000One tothreemonthsR’000Threemonths toone yearR’000One tofiveyearsR’000TotalR’0002013Secured bank loans– Standard Bank merged term facility 8,70% – 57 299 416 483 – 473 782– WesBank instalment sale facility 6,37% 1 764 3 545 64 653 – 69 962Bank overdraft 8,50% 58 062 – – – 58 062Financial leases 7,5% (USD) 177 532 1 419 3 372 5 500Trade and other payables 0,00% 240 575 – – – 240 5752012Secured bank loans– Standard Bank merged term facility 8,86% – 50 085 156 441 439 554 646 080– WesBank instalment sale facility 6,20% 552 3 578 9 871 48 930 62 931Trade and other payables 0,00% 281 273 – – – 281 273It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or atsignificantly different amounts.

Sentula Mining Limited Integrated Annual Report 201311531 Financial instruments (continued)31.6 Fair value of financial instrumentsThe fair value of financial assets and liabilities, together with the carrying amounts shown in the statement of financialposition, are as follows:CarryingvalueR’0002013 2012FairvalueR’000CarryingvalueR’000FairvalueR’000Assets measured at amortised costTrade and other receivables 523 730 523 730 444 506 444 506Cash and cash equivalents 110 709 110 709 180 236 180 236Restricted investments 8 693 8 693 8 693 8 693Assets carried at fair valueInterest rate cap 372 372 2 858 2 858Liabilities measured at amortised costLoans and borrowings – non-current – – (488 695) (488 695)Finance lease obligations – non-current (3 371) (3 371) – –Trade and other payables (240 575) (240 575) (281 273) (281 273)Loans and borrowings – current (543 744) (543 744) (220 316) (220 316)Finance lease obligations – current (2 129) (2 129) – –Bank overdraft (58 062) (58 062) – –Liabilities carried at fair valueOther financial liabilities (7 506) (7 506) (7 506) (7 506)The fair value of the interest rate hedge is disclosed in note 17.Fair value hierarchyAll financial instruments measured at fair value by valuation method are measured at a level 3, except for the interestrate cap which is measured at a level 2.The different levels have been defined as follows:hhLevel 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.hhLevel 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, eitherdirectly or indirectly (i.e derived from prices).hhLevel 3: Inputs for the assets or liabilities that are not based on observable market data.The only financial instruments measured at fair value by valuation method is disclosed in note 27.Fair value is determined by discounting the future liability, which is calculated by multiplying the royalty rate by therun-of-mine tonnes estimated to be produced over the anticipated life of the mine.Although the Group believes that its estimate of fair value is appropriate, the use of the different methodologies orassumptions could lead to different measures of fair value.The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised costin the financial statements approximate their fair values.31.7 Capital management2013 2012Gearing ratio 29% 22%The Group manages its capital structure to ensure that it will be able to continue as a going concern while maximisingthe return to shareholders through the optimisation of the debt and the equity capital.The capital structure of the Group consists of debt, which includes loans to subsidiaries, cash and cash equivalents,liabilities and equity, comprising issued share capital, reserves and retained earnings as disclosed.There are no external capital requirements imposed on the Group.There were no changes to the manner in which the Group manages its capital.

Sentula Mining Limited Integrated Annual Report 2013116Notes to the consolidated financial statements continuedfor the year ended 31 March 201332 Related party transactions and balancesDuring the year, the Group and its related parties, in the ordinary course of business, entered into various intergroupsale and purchase transactions.R’000Capitalexpenditure Revenue ExpensesAmountsowed byrelatedpartiesAmountsowed torelatedparties2013C&K Boilermaking Proprietary Limited – 5 1 6 –Jonah Coal Botswana Limited – – – 675 –JPK Bits & Rods CC – 7 1 460 – –Laduma Metals CC 8 13 75 – –Mabapa Mining Limited – – – 2 875 –Martiq 406 CC – – 593 – –Merafe Coal Proprietary Limited – – – 3 444 –O.M. Tsehla Drilling Contractor ProprietaryLimited – – 1 240 – –Witbank Steel Agencies CC – – 3 – –8 25 3 372 7 000 –2012C&K Boilermaking Proprietary Limited – – 18 – –Jonah Coal Botswana Limited – – – 675 –JPK Bits & Rods CC – – 3 749 – 315L&L Trust – – 90 – –Laduma Metals CC – 19 54 – 8Mabapa Mining Limited – – – 2 861 –Martiq 406 CC – – 731 – –Merafe Coal Proprietary Limited – – – 3 298 –O.M. Tsehla Drilling Contractor ProprietaryLimited – – 1 664 801 671Witbank Steel Agencies CC – – 14 2 –– 19 6 320 7 637 994All outstanding balances with these related parties are priced on an arm’s length basis and are to be settled in cashwithin 12 months of the reporting date. None of the balances are secured.Key management personnel compensation2013R’0002012R’000Key management personnel compensation comprised:Short-term employee benefits 33 970 25 557Share-based payments 578 15 11634 548 40 673

Sentula Mining Limited Integrated Annual Report 201311733 Sentula Mining trustsThe Sentula Mining Empowerment TrustThe Company established The Sentula Mining Empowerment Trust, registration number IT 607/2012, during 2012,as part of the BBBEE transaction which was announced on SENS on 2 March 2012, and which became effective on9 May 2012.The trust is administered by the trustees for the benefit of the beneficiaries, being learner beneficiaries (black personsthat are, or intend to be, involved in a form of education or studies in the mining and engineering arena) and statedbeneficiaries (charities from the community which comprises black people residing in and around the miningoperations of the Company), on the terms and conditions and as more fully detailed in the trust deed.The Sentula Mining Employee TrustThe Company established The Sentula Mining Employee Trust, registration number IT 608/2012, during 2012, aspart of the BBBEE transaction which was announced on SENS on 2 March 2012, and which became effective on9 May 2012.The purpose of the trust is to enable the employer companies (the subsidiaries of Sentula Contracting being JEF Drilland Blast Proprietary Limited, Classic Challenge Trading Proprietary Limited, Ritchie Crane Hire Proprietary Limitedand Benicon Opencast Mining Proprietary Limited) with an opportunity to provide their employees with an incentiveto jointly grow the profitability of the employer companies and share in this growth and prosperity, and promoting anidentity of interests between the employees and shareholders, on the terms and conditions and as more fully detailedin the trust deed.The Sentula Mining Transformation TrustThe Company established The Sentula Mining Transformation Trust – IT542/09 in 2009 as a BBBEE scorecardinvestment delivery vehicle in which the Company and its branches execute the two elements of the scorecard,namely enterprise development and socio-economic development. The beneficiaries of the trust are black SouthAfricans, black-owned enterprises or black employees of the Company.The Sentula Share Incentive TrustThe Company established the Schamin Share Incentive Trust, registration number IT11059/97, in 1997, which trustname was subsequently changed to The Sentula Share Incentive Trust.The purpose of the trust is to provide an incentive to employees of the Company to remain in the service of theCompany and to encourage them to acquire a shareholding in the Company in order to create or to increase theirproprietary interest in the Company’s success.There is currently only one employee who still participates in this scheme, and no further options will be offered toemployees in terms of this scheme. The trust will be terminated once all of the options of the last remainingparticipant have been exercised or lapsed.The trusts are controlled by the Company and, in accordance with the requirements of SIC-12, it constitutes a specialpurpose entity. In accordance with SIC-12, which requires the consolidation of special purpose entities under certainconditions, the trusts have been included as a special purpose entity in the consolidated financial statements ofthe Group.34 Going concernThe annual financial statements have been prepared on the basis of accounting policies applicable to a goingconcern. This basis presumes that funds will be available to finance future operations and that the realisation of assetsand settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.The Group has met all its debt obligations during the past financial year and, based on the Group’s cash flowforecasts for the 2014 financial year, is expected to meet all its obligations during this period.The Group funds its operations by means of a Standard Bank-led consortium facility and a WesBank vehicle assetfinance facility. The availability of these facilities is subject to ongoing compliance with a number of financialcovenants, including, inter alia, a debt service cover ratio (“DSCR”) and a total debt to EBITDA ratio (“TDR”). TheGroup’s future prospects and financial stability is dependent on the ongoing condonation of these covenant breaches,to the extent required during the course of the 2014 financial year.At 31 March 2013, the Group breached the DSCR and TDR and was not timeously granted condonation by theStandard Bank Consortium (“SBC”) resulting in the SBC and WesBank debt being classified as a short-term liabilityat year-end. Subsequent to year-end, condonation was received for these breaches from the SBC. The directorsacknowledge that, in the context of the prevailing economic environment, the Group’s debt levels are excessive inrelation to the Group’s forecast cash generation and the Board has undertaken to pursue a number of initiatives toreduce the debt by approximately R150 million within a six-month period.

Sentula Mining Limited Integrated Annual Report 2013118Notes to the consolidated financial statements continuedfor the year ended 31 March 201334 Going concern (continued)The initiatives being pursued by the Board include the following:hhThe disposal of certain of the Group’s coal assets;hhThe continued disposal of surplus plant and equipment within the Group;hhThe refinancing of the SBC debt by means of a debt capital market instrument;hhA refinancing of the SBC debt;hhOther appropriate means of reducing the debt; orhhA combination of the above.As a consequence of the impairments of R511 million (2012: R617 million), an inventory write-off of R134 million(2012: Nil) and a net loss on sale of assets of R220 million (2012: R52 million), as disclosed in note 5, the Groupincurred a net loss of R900 million for the financial year ended 31 March 2013 and at that date the Group’s statementof financial position disclosed an accumulated loss of R505 million. At 31 March 2012, the Group incurred a net loss ofR532 million and had retained earnings of R365 million.The impairments, losses on sale of assets and inventory write-off do not impact the Group’s cash generation andits operational capacity remains intact. If the non-operational items are excluded from the 2013 results the Groupcontinues to be operationally profitable and cash flow positive in all its major subsidiaries however, theaforementioned conditions, along with other matters, indicate the existence of a material uncertainty that maycast significant doubt on the ability of the Group and the Company to continue as going concerns and, therefore,the Group and Company may be unable to realise their assets and discharge their liabilities in the normal courseof business.35 Subsequent eventsSusequent to year-end, the SBC condoned the March 2013 covenant breaches, subject to the payment of a waiverand consent fee of R750 000 and an increase in the SBC facility margin by 2%.Sentula entered into an agreement with Miniandante Proprietary Limited (the purchaser) to dispose of theSchoongezicht prospecting right and the prospecting right documents described below, to the purchaser for a totalconsideration of R22 million, to be settled by the purchaser in cash, subject to the fulfilment or waiver, as the casemay be, of certain conditions precedent, typical for a transaction of this nature.The effective date of the disposal of the Schoongezicht prospecting right is the fifth business day after the date onwhich the last of the conditions precedent is fulfilled or waived, as the case may be.The conditions precedent include the granting by the Minister of Mineral Resources of:hhthe application for the renewal of the Schoongezicht prospecting right for a minimum of two years from the date ofexpiry of the initial term of the Schoongezicht prospecting right; andhhthe transfer of the Schoongezicht prospecting right to the purchaser.36 Directors’ remunerationR’000 BasicLTIPsvestedMotorvehicleallowanceProvident# Bonus ## Total2013Executive directorsRC Berry 3 589 364 955 441 934 6 283GP Louw 3 416 160 824 – 805 5 205PP Modisane 1 329 507 417 – 389 2 6428 334 1 031 2 196 441 2 128 14 130#Including Company contribution##Bonus paid in 2013 relating to 2012 financial year-end

Sentula Mining Limited Integrated Annual Report 201311936 Directors’ remuneration (continued)R’000Chairman’sfeesDirectors’feesAuditandRiskGovernance,RemunerationandNominationInvestmentTrustees’feesOtherservicesTotalNon-executive directorsJG Best 122 133 – 94 – – – 349EHJ Stoyell (resigned17 September 2012) – 62 – 55 – – – 117D Zihlangu – 130 125 23 – – 23 301CJPG van Zyl – 148 156 – – – 45 349KW Mzondeki – 148 125 – – – – 273RB Patmore – 131 – 89 – – 87 307122 752 406 261 – – 155 1 696R’000 BasicLTIPsvestedMotorvehicleallowanceProvident# Bonus Total2012Executive directorsRC Berry 3 284 240 1 182 279 1 573 6 558GP Louw 3 172 120 1 018 – 1 196 5 506PP Modisane 1 205 460 492 – 605 2 7627 661 820 2 692 279 3 374 14 826#Including Company contributionR’000Chairman’sfeesDirectors’feesAuditandRiskGovernance,RemunerationandNominationInvestmentTrustees’feesOtherservicesTotalNon-executive directorsJG Best 83 251 – 52 26 – – 412EHJ Stoyell – 167 – 49 21 26 – 263D Zihlangu – 224 124 11 – – 26 385CJPG van Zyl – 193 155 – 21 – – 369KW Mzondeki – 193 99 11 – – – 303A Kawa (resigned2 June 2011) – 24 18 20 – – – 62RB Patmore (appointed25 January 2012) – 43 – – – – – 4383 1 095 396 143 68 26 26 1 837The remuneration of directors is determined by the Remuneration Committee having regard to the performance ofindividuals and market trends.Executive directors do not receive directors’ fees and the directors have service contracts with the Company.Executive directors are subject to the Company’s standard conditions of employment.

Sentula Mining Limited Integrated Annual Report 2013120Company annual financial statementsfor the year ended 31 March 2013CONTENTSCompany statement of financial position 121Company income statement 122Company statement of comprehensive 122incomeCompany statement of changes in equity 123Company statement of cash flows 124Notes to the Company financial statements 125

Sentula Mining Limited Integrated Annual Report 2013Company statement of financial positionat 31 March 2013121Note2013R’0002012R’000AssetsNon-current assets 1 927 969 2 100 085Property, plant and equipment 8 744 1 675Loans to subsidiaries 22 1 023 420 1 813 010Investment in subsidiaries 22 298 465 276 474Investment in preference shares 22 600 000 –Share incentive trust loan 7 3 494 6 129Deferred tax 14 1 846 2 797Current assets 283 084 279 452Trade and other receivables 9 46 492 31 484Loans to subsidiaries 22 228 485 165 434Cash and cash equivalents 10 134 74 831Other financial assets 18 6 994 6 834Taxation receivable 979 869TOTAL ASSETS 2 211 053 2 379 537EquityTotal equity attributable to equity holders of the Company 1 590 534 1 641 441Share capital 11 5 866 5 866Share premium 11 2 014 438 2 014 438Reserves 32 213 36 575Retained earnings (461 983) (415 438)TOTAL EQUITY 1 590 534 1 641 441LiabilitiesNon-current liabilities – 488 695Loans and borrowings 12 – 488 695Current liabilities 620 519 249 401Trade and other payables 13 18 714 29 085Loans and borrowings 12 543 744 220 316Bank overdraft 10 58 061 –TOTAL LIABILITIES 620 519 738 096TOTAL EQUITY AND LIABILITIES 2 211 053 2 379 537

Sentula Mining Limited Integrated Annual Report 2013122Company income statementfor the year ended 31 March 2013Note2013R’0002012R’000Other income 569 397 6 673Administrative expenses 2 (657 059) (859 815)Results from operating activities (87 662) (853 142)Finance expense 4 (61 429) (67 761)Finance income 4 105 983 144 196Fair value adjustment on interest rate cap (2 486) (6 677)Loss before taxation (45 594) (783 384)Taxation 5 (951) 1 509Loss for the year (46 545) (781 875)Company statement of comprehensive incomefor the year ended 31 March 20132013R’0002012R’000Loss for the year (46 545) (781 875)Other comprehensive income – –Other comprehensive loss for the year, net of income tax (46 545) (781 875)Total comprehensive loss for the year (46 545) (781 875)

Sentula Mining Limited Integrated Annual Report 2013Company statement of changes in equityfor the year ended 31 March 2013123R’000SharecapitalSharepremiumEmployeeshareincentivereserveRetainedearningsTotalequityBalance at 31 March 2011 5 866 2 014 438 42 426 363 817 2 426 547Loss for the year – – – (781 875) (781 875)Other comprehensive incomeNone – – – – –Total other comprehensive income – – – –Total comprehensive loss for the year – – – (781 875) (781 875)Transactions with owners, recorded directly inequityContributions by and distributions to ownersShare-based payments – – 2 134 – 2 134Share options forfeited – – (7 985) 2 620 (5 365)Total contributions by and distributions to owners – – (5 851) 2 620 (3 231)Balance at 31 March 2012 5 866 2 014 438 36 575 (415 438) 1 641 441Loss for the year – (46 545) (46 545)Other comprehensive incomeNone – – – – –Total other comprehensive income – – – – –Total comprehensive loss for the year – – – (46 545) (46 545)Transactions with owners, recorded directly inequityContributions by and distributions to ownersShare-based payments – – 406 – 406Share options forfeited – – (4 768) (4 768)Total contributions by and distributions to owners – – (4 362) – (4 362)Balance at 31 March 2013 5 866 2 014 438 32 213 (461 983) 1 590 534

Sentula Mining Limited Integrated Annual Report 2013124Company statement of cash flowsfor the year ended 31 March 2013Note2013R’0002012R’000Cash flows from operating activitiesLoss for the year (46 545) (781 875)Adjustments for:Depreciation 2 1 049 1 045Profit from disposal of subsidiaries 2 (530 685) –Preference dividend accrual from subsidiaries 2 (34 940) –Impairment of intercompany loans 2 620 969 811 299Unrealised foreign exchange gain 2 (16 097) (8 723)Fair value on interest rate cap 9 2 486 6 677Finance income 4 (105 983) (144 196)Finance expense 4 61 429 67 761– Paid 58 848 65 180– Accrued 2 581 2 581Equity-settled share-based payment expense 2 406 1 212Cash-settled share-based payment expense 2 (844) –Long-term incentive plan – 2 717Income tax expense 5 951 (1 509)Cash flows from operating activities before changes inworking capital and provisions (47 804) (45 592)Change in trade and other receivables 14 702 (25 408)Change in trade and other payables (9 525) 12 072Cash utilised in operating activities (42 627) (58 928)Income taxes paid 16 (98) –Interest paid 4 (58 848) (65 180)Net cash utilised in operating activities (101 573) (124 108)Cash flows from investing activitiesInterest received 4 105 972 144 167Purchase of property, plant and equipment 8 (118) (86)Proceeds from disposal of property, plant and equipment – 1Repayment from subsidiaries 28 228 24 893Net cash generated by investing activities 134 082 168 975Cash flows from financing activitiesLoans raised 68 300 147 335Loans repaid (233 567) (138 324)Net cash (utilised in)/generated by financing activities (165 267) 9 011Net (decrease)/increase in cash and cash equivalents (132 758) 53 878Cash and cash equivalents at the beginning of the year 74 831 20 953Cash and cash equivalents at the end of the year 10 (57 927) 74 831

Sentula Mining Limited Integrated Annual Report 2013Notes to the Company financial statementsfor the year ended 31 March 20131252013R’0002012R’0001 Accounting policiesThe accounting policies are the same as the Group’s accounting policiesas set out on pages 77 to 90.2 Results from operating activitiesAfter allowing for the following:IncomeProfit on sale of subsidiaries 530 685 –Preference dividend accrual from subsidiaries 34 940 –ExpensesAuditors’ remuneration 1 633 2 176– Audit fees – current year 1 483 2 107– Other accounting services 150 69SARS penalties 517 –Unrealised foreign exchange gains (16 097) (8 723)Contribution to socio-economic and enterprise development – 757Depreciation 1 049 1 045Impairment of intercompany loans 620 969 811 299Personnel expenses– Salaries and wages 26 306 24 291– Provident fund 863 943– Equity-settled share-based payment expense 406 1 212– Cash-settled share-based payment expense (844) –– Long-term incentive plan 1 143 4 761Number of shares2013’0003 Share-based paymentsEquity-settled share appreciation rights scheme 6 575 7 500Cash-settled share appreciation rights scheme 15 245 15 245Long-term incentive plan 5 201 5 538Schamin Trust 1 600 1 60028 621 29 883Equity-settled share appreciation rights schemeThe Share Appreciation Rights Scheme (“SARS”) is a scheme whereby senior and middle management(the “employees”) of Sentula (the “Company”) are incentivised by means of the award of options, of which the offerprice is determined as the 30-day VWAP of Sentula’s share price on the date of presentation of Sentula’s annualresults (the “offer date”) and the employees can exercise the said options in five equal tranches annually from thefirst to the sixth anniversary of the offer date, subject to employment. The award and allocation of options under thescheme is governed by Sentula’s Board. There were no options awarded during the year ended 31 March 2013(2012: Nil). This is an equity‐settled scheme.Number of sharesOutstanding at the beginning of the year 7 500 9 025Forfeited options (925) (1 525)Outstanding at the end of the year 6 575 7 500Weighted average exercise price of outstanding options (cents) 1 795 1 816Weighted average exercise price of forfeited options (cents) 2 206 2 206Weighted average exercise price of exercisable options (cents) 1 795 1 816Average remaining life (months) 8 202013’0002012’0002012’000

Sentula Mining Limited Integrated Annual Report 2013126Notes to the Company financial statements continuedfor the year ended 31 March 20133 Share-based payments (continued)Cash-settled share appreciation rights schemeThe Share Appreciation Rights Scheme (“SARS”) is a scheme whereby senior and middle management(the “employees”) of Sentula (the “Company”) are incentivised by means of the award of options, of which the offerprice is determined as the 30-day VWAP of Sentula’s share price on the date of presentation of Sentula’s annual results(the “offer date”) and the employees can exercise the said options in five equal tranches annually from the first to thesixth anniversary of the offer date, subject to employment. The award and allocation of options under the scheme isgoverned by Sentula’s Board. There were no options awarded during the year ended 31 March 2013 (2012: Nil). This isa cash-settled scheme.Number of shares2013’000Outstanding at the beginning of the year 15 245 15 990Forfeited options – (745)Outstanding at the end of the year 15 245 15 245Number of exercisable options at year-end 8 735 5 686Weighted average exercise price of issued options (cents) 616 664Weighted average exercise price of outstanding options (cents) 616 616Weighted average exercise price of exercisable options (cents) 1 042 1 042Fair value of options granted (R’000) 4 554 5 860Average remaining life (months) 30 42The fair value of such share programme was determined by using the binomial option valuation method. The followinginputs were used:– Issued price ranging from 223 cents to 1 679 cents;– Expected volatility of 50%;– A staff turnover of 5,45% per annum;– A forecast dividend growth rate of 4%; and– A risk-free interest rate of 8,97%.Expected volatility was based on a filtered history of volatility of the Sentula Group from a period dating back to 2005and has been adjusted to give recent history a higher weighting in determining the average expected volatility.Deferred bonus schemeSelected executives and employees of the Group will in lieu of a discretionary bonus, or a percentage thereof, beoffered the right to receive a cash award equal to the sum of the market value of a number of notional Sentula issuedordinary shares as at the expiry of a specified employment period and a multiple thereof to be determined by theBoard at the time of offer of the deferred bonus award and the aggregate of all dividends paid per Sentula ordinaryshares over the employment period and the number of bonus shares comprising the deferred bonus award. Thedeferred bonus scheme is settled in cash.All shares are awarded at the 30-day VWAP of Sentula’s share price on the date of presentation of Sentula’sannual results (the “offer date”) on the day of issue. No nominal Sentula shares were issued during the current year(2012: Nil).2012’000

Sentula Mining Limited Integrated Annual Report 20131273 Share-based payments (continued)Long-term incentive planSelected executives and employees of Sentula and its subsidiaries will receive a conditional right to receive a cashaward (“LTIP award”) equal to the market value of a number of notional Sentula issued ordinary shares on the date thatthe award becomes unconditional. The LTIP award is to be applied towards the obligatory subscription and/orpurchase of Sentula ordinary shares. This LTIP award is settled in cash.Number of shares2013’000Outstanding at the beginning of the year 5 538 7 980Granted during the year 1 375 325Forfeited options – (853)Number of options exercised (1 712) (1 914)Outstanding at the end of the year 5 201 5 538Average remaining life (months) 15 27The awards made during 31 March 2013 and 31 March 2012 financial year relate to new staff members who qualifyunder this scheme. LTIPs are settled at vesting date based on the market value of the Company’s share pricedetermined by reference to 30-day VWAP. Conditions for vestings are established by the Board. In order for the July2013 tranche to vest, a 10% compound improvement in year-on-year EVA on the Group’s productive capital base,utilising the March 2011 base, needs to be achieved. The July 2012 tranche vested, based on a 10% improvement inyear-on-year EVA on the Group’s productive capital base being achieved. Vesting conditions require employment atthe maturity of the respective tranche.2012’000Schamin TrustNo changes took place during the year under review:Number of shares2013’0002012’000Outstanding at the beginning of the year 1 600 1 600Outstanding at the end of the year 1 600 1 600Exercisable at the end of the year 1 600 1 600Weighted average price of outstanding options (cents) 1 000 1 000Weighted average price of options lapsed (cents) 1 000 –Weighted average price of exercisable options (cents) 1 000 1 000Average remaining life (months) 45 57The maximum number of shares that may be issued in terms of the scheme may not in aggregate exceed 23 556 594shares in Sentula’s issued capital. Shares vest in the option holder on the date the option was granted. Thereafter theoption holder may exercise the options in individual tranches of 20% on each subsequent anniversary. The SchaminTrust scheme is being replaced by the three schemes mentioned above. This is an equity-settled scheme.

Sentula Mining Limited Integrated Annual Report 2013128Notes to the Company financial statements continuedfor the year ended 31 March 20132013R’0002012R’0004 Finance chargesFinance income 105 983 144 196– Financial institutions 2 131 2 005– South African Revenue Service 7 29– Intercompany transactions 103 836 141 887– Other 9 275Finance expense 58 848 65 180– Non-current borrowings 56 648 61 147– Bank overdraft 180 42– Intercompany transactions 2 019 3 990– Suppliers 1 1Finance expense – non-cash 2 581 2 581– Facility fees recognised 2 581 2 581Total finance expense 61 429 67 761Net finance income 44 554 76 4355 TaxationDeferred taxation 951 (1 509)– Current year 951 (1 286)– Prior year – (223)Taxation 951 (1 509)Reconciliation of effective tax rateLoss for the year (45 594) (783 384)Taxation (951) 1 509Loss for the year after tax (46 545) (781 875)Income tax expense at statutory rate of 28% (12 766) (219 348)– Non-deductible expenses 3 018 3 427– Assessed loss utilised (1 941) (12 027)– Tax effect of non-taxable income (9 783) –– Capital gain not recognised (148 592) –– Prior year adjustment – 223– Current year losses for which no deferred tax asset was recognised 1 562 –– Capital loss not recognised 173 871 227 164– Other (4 418) (948)Income tax expense recognised in profit 951 (1 509)Effective tax rate (%) (2,1) 0,2The tax rate used for the 2013 reconciliation above is the corporate tax rate of 28% (2012: 28%) payable by corporateentities in South Africa on taxable profits under tax law in that jurisdiction.6 DividendThe Board of Directors has not declared an interim or final dividend for the years ended 31 March 2012 or31 March 2013.

Sentula Mining Limited Integrated Annual Report 20131292013R’0002012R’0007 Share incentive trust loanAn analysis of the Scharrig Share Incentive Trust loan is as follows:Balance at the beginning of the year 6 129 4 159Expenses incurred during the year 230 1 970Impairment of loan (2 865) –Balance at the end of the year 3 494 6 129The unallocated shares are under the control of the trustees of the trust.The loan is interest free and has no fixed repayment terms.The loan has been impaired down to the current prevailing market value of the shares held in the trust.Furniture,fittings andequipmentR’000TotalR’0008 Property, plant and equipment2013CostAt 31 March 2012 3 521 3 521Additions 118 118At 31 March 2013 3 639 3 639Accumulated depreciationAt 31 March 2012 1 846 1 846Depreciation 1 049 1 049At 31 March 2013 2 895 2 895Net book value at 31 March 2013 744 7442012CostAt 31 March 2011 3 436 3 436Additions 86 86Disposals (1) (1)At 31 March 2012 3 521 3 521Accumulated depreciationAt 31 March 2011 801 801Depreciation 1 045 1 045At 31 March 2012 1 846 1 846Net book value at 31 March 2012 1 675 1 675A register containing the information required by regulation 25(3) of the Companies Regulations 2011 is available forinspection at the registered office of the Company.

Sentula Mining Limited Integrated Annual Report 2013130Notes to the Company financial statements continuedfor the year ended 31 March 20132013R’0002012R’0009 Trade and other receivablesIntercompany trade receivables 4 752 20 949Staff debtors 65 130Other receivables 35 589 2 589Deposits 178 189Deferred fees paid 4 732 7 31445 316 31 171Value added taxation 1 176 313The Company’s exposure to credit and currency risks and impairmentlosses related to trade and other receivables are disclosed in note 17.46 492 31 484* Included in other receivables is the fair value of the interest rate hedge asdisclosed below:Opening balance 2 858 –Purchase price of interest rate hedge – 9 535Change in fair value recognised through profit and loss (2 486) (6 677)Amount included in other receivables 372 2 858The interest rate hedge facility was entered into on 1 April 2011 with Standard Bank, on the following termsand conditions:Notional amount:R350 millionTrade date: 1 April 2011Effective date: 1 April 2012Termination date: 31 March 2015Cap rate: 8,57%Floating rate option:ZAR – JIBAR SAFEXReset dates:Calendar quartersThe Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables aredisclosed in note 17.2013R’0002012R’00010 Cash and cash equivalentsBank balances 100 119Call deposits 34 74 713134 74 832Bank overdraft (58 061) (1)Cash and cash equivalents (57 927) 74 831The Company’s exposure to interest rate risk and sensitivity analysis for financial assets and liabilities are disclosed innote 17.

Sentula Mining Limited Integrated Annual Report 20131312013R’0002012R’00011 Share capital and premiumAuthorised share capital1 000 000 000 (2012: 1 000 000 000) ordinary shares of 1 cent each 10 000 10 000Issued share capital586 559 181 (2012: 586 559 181) ordinary shares of 1 cent eachBalance at the beginning of the year 5 866 5 866Balance at the end of the year 5 866 5 866Share premiumBalance at the beginning of the year 2 014 438 2 014 438Balance at the end of the year 2 014 438 2 014 438Total share capital and share premium 2 020 304 2 020 304The authorised but unissued share capital is under the control and authority of the directors subject to the CompaniesAct and JSE Limited Listings Requirements, until the next annual general meeting. The directors have not beengranted the approval to issue ordinary shares, or sell treasury shares for cash, without the consent of the shareholders.Note 3 sets out the details in respect of the share option scheme.All shares issued by the Company were fully paid.2013R’0002012R’00012 Loans and borrowingsInterest-bearing borrowingsSecured at amortised costStandard Bank merged facility 473 782 646 080WesBank instalment sale facility 69 962 62 931543 744 709 011Balance at the end of the year 543 744 709 011Current portion of loans and borrowings (543 744) (220 316)Non-current portion of loans and borrowings – 488 695Standard Bank merged term facility 473 782 646 080The Standard Bank merged term facility and the WesBank facility have been classified as current liabilities in the 2013financial year. The Debt Service Cover Ratio (“DSCR”) and Total Debt to EBITDA Ratio (“TDR”) was breached at31 March 2013. The March 2013 instalment of R69 million was settled on 29 March 2013. Subsequent to year-end theStandard Bank consortium (“SBC”) has agreed to condone the March 2013 covenant breach. SBC also requires thatthe SBC facility be reduced by an amount of R150 million, within a six-month period ending 31 December 2013.This condonation was achieved through Sentula providing SBC with an undertaking to reduce the senior debt asdisclosed in note 19.The outstanding proceeds from the auction will be utilised as a part settlement of the September instalment.The effective average interest rate applicable to these liabilities is 8,7% (2012: 8,7%) and is based on a margin of325 basis points above the three-month JIBAR rate and is reset quarterly.

Sentula Mining Limited Integrated Annual Report 2013132Notes to the Company financial statements continuedfor the year ended 31 March 201312 Loans and borrowings (continued)The repayment terms of these loans, had they not been classified as current, are as follows:2013R’0002012R’000Aggregate repayments due as follows:Year ended 31 March– 2013 – 206 526– 2014 234 901 223 274– 2015 238 881 216 280473 782 646 080Total facility 700 000 700 000Undrawn facility 226 218 53 920The Group’s obligations under the merged term facility are secured by registered notarial bonds over plant andequipment and motor vehicles, which have a carrying amount of R1 079 million (2012: R1 493 million). Sentulaprovided a cession and pledge of all the shares it holds in the Group subsidiaries, for the due and punctual fulfilmentof all obligations by the Company. The subsidiaries have subordinated all claims which they may respectively haveagainst one another to the claims which the lenders may have against Sentula and such other subsidiaries of Sentula.2013R’0002012R’000WesBank instalment sale agreement 69 962 62 931Total facility 100 000 100 000Undrawn facility 30 038 37 069During the year ended 31 March 2012, Sentula entered into a R100 million instalment sale facility with WesBank,which became effective on 27 October 2011.The Group’s obligations under the WesBank instalment sale liabilities was secured by the lessors’ title of the financialassets, which had a carrying amount of R70,2 million (2012: R69,3 million).The effective average interest rate applicable to these liabilities is 6,4% (2012: 6,2%) and is a prime linked facility.Aggregate repayments due as follows:2013 2012R’000 Principal Interest Total Principal Interest TotalYear ended 31 March– 2013 – – – 13 790 4 046 17 836– 2014 21 747 3 792 25 539 15 667 2 786 18 453– 2015 23 202 2 337 25 539 16 771 1 682 18 453– 2016 and later 25 013 811 25 824 16 703 521 17 22469 962 6 940 76 902 62 931 9 035 71 966The Company’s borrowing powers are unlimited in terms of the Memorandum of Incorporation.The Company’s exposure to interest rate risk and sensitivity analysis for loans and borrowings are disclosed in note 17.

Sentula Mining Limited Integrated Annual Report 20131332013R’0002012R’00013 Trade and other payablesTrade payables 5 959 6 662Intercompany trade payables 39 64Other payables 10 496 16 66616 494 23 392Provision for leave pay and employee incentives 2 220 5 69318 714 29 085The Company’s exposure to interest rate risk and sensitivity analysis for financial liabilities are disclosed in note 17.2013R’0002012R’00014 Deferred taxBalance at the beginning of the year 2 797 1 288Originating temporary differences (951) 1 509Balance at the end of the year 1 846 2 797The balance comprises:Fair value on interest rate cap 1 231 1 202Provisions 137 112Cash-settled share-based payments 485 722Prepayments (7) –Long-term incentive plan – 761Net tax assets 1 846 2 797Deferred tax asset 1 846 2 797– Deferred tax asset to be recovered after more than 12 months – –– Deferred tax asset to be recovered within 12 months 1 846 2 797Movement in temporary differences during the yearR’000Openingbalance31 March2012Recognisedin incomestatementClosingbalance31 March2013Cash-settled share-based payment expense 722 (237) 485Fair value on interest rate cap 1 202 29 1 231Provision for long-term incentive plan 761 (761) –Leave pay provision 112 25 137Prepayments – (7) (7)2 797 (951) 1 846Openingbalance31 March2011Recognisedin incomestatementClosingbalance31 March2012Cash-settled share-based payment expense 722 – 722Fair value on interest rate cap – 1 202 1 202Provision for long-term incentive plan 566 195 761Leave pay provision – 112 1121 288 1 509 2 797Unrecognised tax losses are recognised when management considers it probable that future taxable profits will beavailable against which they can be utilised.

Sentula Mining Limited Integrated Annual Report 2013134Notes to the Company financial statements continuedfor the year ended 31 March 20132013R’0002012R’00015 Capital commitmentsOperating lease chargesPremises– Contractual amount 945 922Future minimum lease payments– Up to one year 967 461– One to five years 1 934 –The lease agreements are entered into on market-related terms and conditions and are subject to annual marketrelatedescalation in the lease rates. Property lease agreements are subject to a lease extension option.2013R’0002012R’00016 Taxation paidBalance at the beginning of the year (869) (840)Interest received on tax (11) (29)Balance at the end of the year 979 869Taxation paid 98 –17 Financial instruments17.1 Risk management activitiesIn the normal course of its operations, the Company is exposed to currency, interest rate, liquidity and credit risk.This note describes the Company’s objectives, policies and processes for managing those risks and methods used tomeasure them. In order to manage these risks, the Group has developed a comprehensive risk management processto facilitate control and monitoring. The Board has overall responsibility for the determination of the Company’s riskmanagement objectives and polices and, while retaining ultimate responsibility for them, it has delegated theauthority for designing and operating processes that ensure the effective implementation of the objectives andpolicies to the Group’s finance function. The Group’s treasury function provides services to the subsidiaries,coordinates access to domestic financial markets and monitors and manages the financial risks relating to theoperations of the Company. Operational and business risks are reviewed and addressed on a monthly basis. Theserisks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk andcash flow interest rate risk.The Company does not enter into/or trade financial instruments, including derivative financial instruments, forspeculative purposes.17.2 Credit riskThe Company does not have any credit risk as it has no debtors pertaining to the selling of goods and services.The Company is the holding company of the Group and fulfils a centralised treasury function.The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to creditrisk at the reporting date was:Carrying amount2013R’0002012R’000Trade receivables 4 752 20 949Other receivables 40 564 10 222Trade and other receivables 45 316 31 171Cash and cash equivalents 134 74 83145 450 106 002The maximum exposure to credit risk for trade and other receivablesat the reporting date by geographic region was:South Africa 45 316 31 17145 316 31 171

Sentula Mining Limited Integrated Annual Report 201313517 Financial instruments (continued)17.2 Credit risk (continued)The maximum exposure to credit risk for trade and other receivables at the reporting date by category was:2013R’000Carrying amount2012R’000Related party receivables 4 752 20 949Deferred fees 4 732 7 314Preference dividends accrued 34 940 –Other 892 2 90845 316 31 1712013R’000Gross amount2012R’000The ageing of trade receivables at the reporting date was:Not past due 4 752 20 9494 752 20 949Impairment loss – –There were no impairment losses recognised in other receivables.17.3 Foreign exchange riskThe Company operates internationally and is exposed to foreign exchange risk arising from various currencyexposures, primarily with respect to the US Dollar. Foreign exchange risk arises from future commercial transactions,recognised assets and liabilities and new investments in foreign operations.Foreign exchange risk also arises when individual company entities enter into transactions denominated in a currencyother than the functional currency. It is the Company’s policy that all such transactions should be hedged throughCompany treasury entering into a forward contract with a reputable bank.The Company is exposed to currency risk on purchases made on plant and equipment globally. Purchases from thesesuppliers are made on a central basis and the risk is hedged using forward exchange contracts. The forwardexchange contracts entered into from time to time are economic hedges and therefore the Company does not applyhedge accounting.17.4 Interest rate riskAt the reporting date the interest rate profile of the Company’s interest-bearing financial instruments was:2013R’0002012R’000Variable rate instruments– Financial assets 1 463 268 1 441 015– Financial liabilities (666 730) (744 385)796 538 696 630The Company is exposed to interest rate risk from long-term borrowings at variable rates. Fluctuations in interest ratesimpact the value of the short-term investments and financing activities giving rise to interest rate risk. In the ordinarycourse of business the entities within the Group receive cash proceeds from its operations and are required to fundworking capital and capital expenditure requirements. All entities within the Group are not permitted to borrow longterm from external sources. The cash is managed to ensure that all surplus funds held within the Group are investedwith the centralised treasury. The surplus funds are invested to maximise returns while ensuring that the capital issafeguarded for the maximum extent possible by investing only with highly rated financial institutions.Contractual arrangements for committed borrowing facilities are maintained with two banking counterparts to meetthe Company’s funding requirements.

Sentula Mining Limited Integrated Annual Report 2013136Notes to the Company financial statements continuedfor the year ended 31 March 201317 Financial instruments (continued)17.4 Interest rate risk (continued)Cash flow sensitivity analysis for variable rate instrumentsA sensitivity analysis is performed by assuming that the amount of the assets and liabilities outstanding at thereporting date was outstanding for the whole year. A 200 basis point increase or decrease is used when reportinginterest rate risk internally to key management personnel and represents management’s assessment of a reasonableand possible change in interest rates in the short term.If interest rates had been 200 basis points higher/lower and all the other variables were held constant, the Company’sprofit after tax for the year ended 31 March 2013 would decrease/increase by R16,9 million (2012: R13,6 million). Thisis attributable to the Company’s exposure to interest rates on its variable borrowings. The analysis is performed on thesame basis for 2012.17.5 Liquidity risk managementLiquidity risk arises from the Company’s management of working capital and the finance charges and principalrepayments on its debt instruments. It is the risk that the Company will encounter difficulty in meeting its financialobligations as they fall due. The Company’s policy is to ensure that it will always have sufficient cash to allow it tomeet its liabilities when they become due. The Company manages liquidity risk via a centralised treasury, bymaintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecastand actual cash flows.The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities.These tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliestdate on which the Company can be required to pay. The table includes both interest and principal cash flows.WeightedaverageeffectiveinterestrateLess thanone monthR’000One tothreemonthsR’000Threemonths toone yearR’000One tofiveyearsR’000 Total2013Secured bank loans– Standard Bank mergedterm facility 8,70% 326 56 973 416 483 – 473 782– WesBank instalmentsale facility 6,37% 1 764 3 545 64 653 – 69 962Bank overdraft 8,50% 58 061 – – – 58 061Trade and other payables 0,00% – 18 714 – – 18 7142012Secured bank loans– Standard Bank mergedterm facility 8,86% – 50 084 156 441 439 555 646 080– WesBank instalmentsale facility 6,20% 552 3 578 9 871 48 930 62 931Trade and other payables 0,00% 29 085 – – – 29 085It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or atsignificantly different amounts.

Sentula Mining Limited Integrated Annual Report 201313717 Financial instruments (continued)17.6 Fair value of financial instrumentsThe fair value of financial assets and liabilities, together with the carrying amounts shown in the statement of financialposition, is as follows:CarryingvalueR’0002013 2012FairvalueR’000CarryingvalueR’000FairvalueR’000Assets carried at amortised costTrade and other receivables 45 316 45 316 31 171 31 171Other financial assets 6 994 6 994 6 834 6 834Cash and cash equivalents 134 134 74 831 74 831Loans and borrowings – current 228 485 228 485 165 434 165 434Liabilities carried at amortised costLoans and borrowings – – (488 695) (488 695)Trade and other payables (11 208) (11 208) (21 579) (21 579)Short-term portion of loans and borrowings (543 744) (543 744) (220 316) (220 316)Bank overdraft (58 061) (58 061) – –Liabilities carried at fair valueOther payables (7 506) (7 506) (7 506) (7 506)Fair value hierarchyAll financial instruments carried at fair value by valuation method are carried at a level 3.The different levels have been defined as follows:hhLevel 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.hhLevel 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, eitherdirectly or indirectly (i.e. derived from prices).hhLevel 3: Inputs for the assets or liabilities that are not based on observable market data.Fair value is determined by discounting the future liability, which is calculated by multiplying the royalty rate by therun-of-mine tonnes estimated to be produced over the anticipated life of the mine.Although the Company believes that its estimate of fair value is appropriate, the use of different methodologies orassumptions could lead to different measurements of fair value.The directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised costin the financial statements approximate their fair values.17.7 Capital managementThe Company manages its capital structure to ensure that it will be able to continue as a going concern whilemaximising the return to shareholders through the optimisation of the debt and the equity balance.The capital structure of the Company consists of debt, which includes loans to subsidiaries, cash and cash equivalents,liabilities and equity, comprising issued share capital, reserves and retained earnings as disclosed.Long-term borrowings pertain to the Standard Bank-led consortium and the WesBank facility for the funding ofsubsidiary capital expenditure.There are no external capital requirements imposed on the Company.There were no changes to the manner in which the Company manages its capital.

Sentula Mining Limited Integrated Annual Report 2013138Notes to the Company financial statements continuedfor the year ended 31 March 201318 Related partiesRelated party transactions and balancesDuring the year, the Company and its related parties, in the ordinary course of business, entered into variousintergroup sale and purchase transactions.Amounts owed by related parties2013R’0002012R’000Jonah Coal Botswana Limited 675 675Mabapa Mining Limited 2 875 2 861Merafe Coal Proprietary Limited 3 444 3 2986 994 6 834All outstanding balances with these related parties are priced on an arm’s length basis and are to be settled in cashwithin 12 months of the reporting date. None of the loans are interest-bearing or secured.19 Going concernThe annual financial statements have been prepared on the basis of accounting policies applicable to a goingconcern. This basis presumes that funds will be available to finance future operations and that the realisation of assetsand settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.The Company has met all its debt obligations during the past financial year and, based on the Group’s cash flowforecasts for the 2014 financial year, is expected to meet all its obligations during this period.The Group funds its operations by means of a Standard Bank-led consortium facility and a WesBank VAF facility.These facilities are managed through a centralised treasury function within the Company. The availability of thesefacilities is subject to ongoing compliance with a number of financial covenants, including, inter-alia, a Debt ServiceCover Ratio (“DSCR”) and a Total Debt to EBITDA Ratio (“TDR”). The Group’s future prospects and financial stability isdependent on the ongoing condonation of these covenant breaches, to the extent required during the course of the2014 financial year.At 31 March 2013, the Group breached the DSCR and TDR and was not timeously granted condonation by theStandard Bank Consortium (“SBC”) resulting in the SBC and WesBank debt being classified as a short-term liabilityat year-end. Subsequent to year-end, condonation was received for these breaches from the SBC. The directorsacknowledge that, in the context of the prevailing economic environment, the Group’s debt levels are excessive inrelation to the Group’s forecast cash generation and the Board has undertaken to pursue a number of initiatives toreduce the debt by approximately R150 million within a six-month period.The initiatives being pursued by the Board include the following:hhThe disposal of certain of the Group’s coal assets;hhThe continued disposal of surplus plant and equipment within the Group;hhThe refinancing of the SBC debt by means of a debt capital market instrument;hhA refinancing of the SBC debt;hhOther appropriate means of reducing the debt; orhhA combination of the above.The Company incurred a net loss of R46,5 million for the financial year ended 31 March 2013, and at that date theCompany’s statement of financial position disclosed an accumulated loss of R462 million. At 31 March 2012, theCompany incurred a net loss of R782 million and had an accumulated loss of R415 million. These losses were primarilyincurred as a result of impairments of intercompany loans amounting to R621 million (2012: R811 million).The lossincurred in 2013 was eliminated by the profit on sale of the subsidiaries relating to the BBBEE transaction amountingto R530 million.The aforementioned conditions, along with other matters, indicate the existence of a material uncertainty that maycast significant doubt on the ability of the Group and the Company to continue as going concerns and, therefore,the Group and Company may be unable to realise their assets and discharge their liabilities in the normal courseof business.

Sentula Mining Limited Integrated Annual Report 201313920 Contingent liabilitiesTo the best of our knowledge and belief there are no other contingent liabilities to third parties and/or contingentassets not set out or referred to in this report which may materially affect the financial position of the Company.21 Subsequent eventsThe directors are not aware of any subsequent events other than those disclosed in the directors’ report that occurredbetween the date of authorisation of the annual financial statements and the year-end that require any adjustments oradditional disclosure to the annual financial statements.

Sentula Mining Limited Integrated Annual Report 2013140Notes to the Company financial statements continuedfor the year ended 31 March 201322 Information on subsidiary companiesIssuedsharecapitalPercentage heldby Sentula2013%2012%Investmentat cost2013R’0002012R’000Megacube Mining Proprietary Limited 100 100 100 21 005 21 005Sentula Contracting Proprietary Limited* 4 000 83 0 3 –– Benicon Opencast Mining Proprietary Limited 120 83 100 – –– Classic Challenge Trading Proprietary Limited 120 83 100 – 69 315– JEF Drill and Blast Proprietary Limited 100 83 100 – –– Ritchie Crane Hire Proprietary Limited 100 83 100 – –Sentula Mining Services Proprietary Limited 100 100 100 – –Geosearch Holdings Proprietary Limited 100 100 100 104 558 104 558Benicon Sales Proprietary Limited 100 000 100 100 – –Benicon Coal Proprietary Limited 100 100 100 45 252 45 252Benicon Mining Proprietary Limited 100 100 100 20 262 20 262Sentula Coal Proprietary Limited 100 100 100 – –Caston Plant Sales Proprietary Limited 100 100 100 – –Sentula Mining Mauritius Limited** 100 100 100 95 957 –Shanike Investments No 171Proprietary Limited – – – –Total investment at cost 287 037 260 392Reflected as non-current assets 287 037 260 392Reflected as current assets – –The Company has subordinated its claims against the following subsidiaries in favour of all other creditors on thefollowing: Megacube Mining Proprietary Limited; Sentula Coal Proprietary Limited; Benicon Coal Proprietary Limited;Caston Plant Sales Proprietary Limited and Sentula Mining Mauritius Limited.During the year, Sentula Mining Proprietary Limited (“Sentula”) entered into a broad-based black economicempowerment transaction whereby 100% of Benicon Opencast Mining Proprietary Limited, Classic Challenge TradingProprietary Limited, JEF Drill and Blast Proprietary Limited and Ritchie Crane Hire Proprietary Limited were sold toSentula Contracting Proprietary Limited. Subsequently Sentula Contracting Proprietary Limited sold 16,675% toShanike Investments No 171 (RF) Proprietary Limited (“Shanike”). Shanike is owned by the Anglo American KhulaMining Fund Proprietary Limited, The Sentula Mining Employee Trust, The Sentula Mining Empowerment Trust andThebe Mining Resources Proprietary Limited.Furthermore, as part of the Group’s strategy to empower Sentula’s South African coal assets, Sentula disposed of a26% shareholding in the Bankfontein Project held by Sentula’s wholly owned subsidiary, Benicon Mining ProprietaryLimited, to Shanike.* During the year, Cintacure Proprietary Limited changed its name to Sentula Contracting Proprietary Limited.** The company is incorporated in Mauritius and during the year the loan was converted to equity.The directors’ valuation of the above subsidiaries approximates the cost as disclosed in this note.The loans to subsidiaries bear variable interest rates and the terms of the loans range from demand to 48 months.Main businessA – Opencast mining and mining servicesB – Exploration drillingC – Drilling and blastingD – Crane hireE – Equipment trading and sparesF – MiningG – Foreign operations

Sentula Mining Limited Integrated Annual Report 2013141Preference sharesNon-interest-bearingloans to subsidiariesInterest-bearing loansto/(from) subsidiariesShare options issuedMainbusiness2013R’0002012R’0002013R’0002012R’0002013R’0002012R’0002013R’0002012R’000– – 106 806 459 041 – 27 447 140 4 767 A600 000 – – – (13 407) – – –– – 8 000 8 000 511 482 370 947 6 005 6 083 A– – – – 54 312 28 421 – – A– – – – 69 355 87 424 814 807 C– – – – (32 225) (19 710) 1 397 1 383 D– – – – 37 177 34 600 – – A– – – – 65 787 477 864 3 072 3 042 B– – 35 517 35 517 67 858 86 492 – – E– – 8 410 8 410 320 635 276 515 – – F– – 2 403 4 903 – – – – F– – 9 786 8 840 – – – – F– – – 3 750 – 122 – – E– – – 79 860 – – – – G– – – – 10 – – –600 000 – 170 921 608 321 1 080 984 1 370 124 11 428 16 082600 000 – 135 404 572 804 888 016 1 240 206 11 428 16 082– – 35 517 35 517 192 968 129 917 – –

Sentula Mining Limited Integrated Annual Report 2013142Shareholders’ informationfor the year ended 31 March 2013Number ofshareholders% ofshareholdersNumber ofshares% ofshareholdersAnalysis of shareholdersRange1 – 1 000 554 22,95 244 106 0,041 001 – 5 000 739 30,61 2 103 050 0,365 001 – 10 000 282 11,68 2 137 229 0,3610 001 – 50 000 447 18,52 10 770 705 1,8450 001 – 100 000 79 3,27 5 901 664 1,01100 001 and more 313 12,97 565 402 427 96,39Total 2 414 100,00 586 559 181 100,00Major shareholders (directly owning5% or more of shares in issue)GEPF Equity 53 206 737 9,07SBSA ITF NGI Managed Fund 29 326 102 5,00Shareholder spreadPublic 2 409 99,79 579 560 170 98,81Non-public 5 0,21 6 999 011 1,19Share scheme 1 0,04 233 0,00Associates 1 0,04 5 553 871 0,95Directors 3 0,12 1 444 907 0,24Total 2 414 100,00 586 559 181 100,00Directors’ shareholdings2013 Shares held % of totalDirector Direct Indirect Total shareholdingRC Berry 1 304 907 – 1 304 907 0,223GP Louw 130 000 – 130 000 0,022KW Mzondeki 10 000 – 10 000 0,0011 444 907 – 1 444 907 0,2462012DirectorRC Berry 1 084 907 – 1 084 907 0,185GP Louw 110 000 – 110 000 0,0191 194 907 – 1 194 907 0,204Subsequent to 31 March 2013 and the date of this report, no directors’ dealings took place.

Sentula Mining Limited Integrated Annual Report 2013JSE performance1432013 2012 2011 2010 2009Number of shares traded (‘000) 160 088 137 778 240 947 274 744 182 667% of total issued shares 27,29 23,49 41,08 46,84 77,20Value of shares trades (R’000) 288 726 322 220 629 074 871 125 1 813 004Prices quoted (cents per share)– highest 235 300 359 550 1 920– lowest 151 151 206 202 180– closing 165 220 275 294 282Market capitalisation at year-end (R’000) 967 823 1 290 430 1 613 038 1 724 484 664 296Price-earnings ratio (1,10) (2,47) 45,45 5,26 2,33Earnings yield (91,27) (40,41) 2,22 18,98 42,94Dividend yield – – – – –Number of shares traded (’000)Five-year historyMarket capitalisation at year-end (’000)Five-year history300250200150100500 2009 2010 2011 2012 20132 0001 5001 0005000 2009 2010 2011 2012 2013

Sentula Mining Limited Integrated Annual Report 2013144Shareholders’ diaryFinancial year-end 31 March 2013Audited results announced 27 June 2013Reports and profit statementHalf-year interim review 14 November 2013No change statement and notice of annual general meeting announcement 30 September 2013Integrated Annual Report published 30 September 2013Annual general meeting 24 October 2013

Sentula Mining Limited Integrated Annual Report 2013Notice of annual general meeting145SENTULA MINING LIMITEDIncorporated in the Republic of South Africa(Registration number 1992/001973/06)Share code: SNU ISIN: ZAE000107223(“Sentula” or “the Company” or “the Group”)If you are in any doubt as to what action you shouldtake in respect of the following resolutions, pleaseconsult your Central Securities Depository Participant(“CSDP”), broker, banker, attorney, accountant orother professional adviser immediately.Notice is hereby given in terms of section 62(1) of theCompanies Act, that an annual general meeting (“annualgeneral meeting”) of shareholders of the Company willbe held at Ground Floor, Building 14, The WoodlandsOffice Park, Woodlands Drive, Woodmead, at 10:00 onThursday, 24 October 2013, to consider and, if deemedfit, to approve the resolutions referred to below, with orwithout modification:The Board of Directors of the Company (“the Board”)determined that, in terms of section 62(3)(a), as read withsection 59 of the Companies Act, the record date for thepurposes of determining which shareholders of theCompany are entitled to participate in and vote at theannual general meeting is Friday, 18 October 2013.Accordingly, the last day to trade Sentula shares in orderto be recorded in the register to be entitled to vote willbe Friday, 11 October 2013.GeneralShareholders are reminded that:hha shareholder entitled to attend and vote at the annualgeneral meeting is entitled to appoint a proxy (or morethan one proxy) to attend, participate in and vote atthe annual general meeting in the place of theshareholder, and shareholders are referred to the formof proxy attached to this notice in this regard;hha proxy need not also be a shareholder of theCompany; andhhin terms of section 63(1) of the Companies Act, anyperson attending or participating in an annual generalmeeting of shareholders must present reasonablysatisfactory identification and the person presiding atthe annual general meeting must be reasonablysatisfied that the right of any person to participate inand vote (whether as shareholder or as proxy for ashareholder) has been reasonably verified. A greenbar-coded identification document issued by the SouthAfrican Department of Home Affairs, a driver’s licenceor a valid passport will be accepted as sufficientidentification.1. Ordinary resolution number 1Approval of annual financial statementsResolved as an ordinary resolution that theconsolidated audited annual financial statementsof the Company and the Group for the year ended31 March 2013, including the directors’ report,the report of the auditors and the report of theCompany’s Audit and Risk Committee therein,be and are hereby received and adopted.The minimum percentage of voting rights that isrequired for this ordinary resolution to be adoptedis more than 50% (fifty percent) of the voting rightsexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.2. Ordinary resolution number 2Reappointment of auditorsResolved as an ordinary resolution thatPricewaterhouseCoopers Inc. be and is herebyreappointed as independent auditors of theCompany and the Group, with Mr PC Houghbeing the individual registered auditor who hasundertaken the audit of the Company and Groupfor the ensuing financial year until conclusion ofthe next annual general meeting, as nominatedby the Company’s Audit and Risk Committee, andthe Board is hereby being authorised todetermine the auditors’ remuneration.

Sentula Mining Limited Integrated Annual Report 2013146Notice of annual general meeting continuedThe minimum percentage of voting rights that isrequired for this ordinary resolution to be adoptedis more than 50% (fifty percent) of the voting rightsexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.3. Ordinary resolution number 3Re-election of director retiring by rotationResolved as an ordinary resolution that RalphPatmore retires by rotation at this annual generalmeeting in accordance with the Company’s MoI,and being eligible, offers himself for re-election asa director of the Company.An abbreviated curriculum vitae in respect of RalphPatmore appears on page 15 of the IntegratedAnnual Report to which this notice is attached.The minimum percentage of voting rights that isrequired for this ordinary resolution to be adoptedis more than 50% (fifty percent) of the voting rightsexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.4. Ordinary resolution number 4Re-election of director retiring by rotationResolved as an ordinary resolution that JonathanBest retires by rotation at this annual generalmeeting in accordance with the Company’s MoI,and being eligible, offers himself for re-election asa director of the Company.An abbreviated curriculum vitae in respect ofJonathan Best appears on page 14 of theIntegrated Annual Report to which this notice isattached.The minimum percentage of voting rights that isrequired for this ordinary resolution to be adoptedis more than 50% (fifty percent) of the voting rightsexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.5. Ordinary resolution number 5Re-election of Audit and Risk Committeemember for the year ending 31 March 2014Resolved as an ordinary resolution that Cor van Zylbe and is hereby re-elected as a member of theAudit and Risk Committee of the Company andthe Group for the year ending 31 March 2014, witheffect from the end of this meeting in terms ofsection 94(2) of the Companies Act.An abbreviated curriculum vitae in respect of Corvan Zyl appears on page 14 of the IntegratedAnnual Report to which this notice is attached.The minimum percentage of voting rights that isrequired for this ordinary resolution to be adoptedis more than 50% (fifty percent) of the voting rightsexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.6. Ordinary resolution number 6Re-election of Audit and Risk Committeemember for the year ending 31 March 2014Resolved as an ordinary resolution that KholekaMzondeki be and is hereby re-elected as amember of the Audit and Risk Committee of theCompany and the Group for the year ending31 March 2014, with effect from the end of thismeeting in terms of section 94(2) of theCompanies Act.An abbreviated curriculum vitae in respect ofKholeka Mzondeki appears on page 14 of theIntegrated Annual Report to which this noticeis attached.The minimum percentage of voting rights that isrequired for this ordinary resolution to be adoptedis more than 50% (fifty percent) of the voting rights

Sentula Mining Limited Integrated Annual Report 2013147exercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.7. Ordinary resolution number 7Re-election of Audit and Risk Committeemember for the year ending 31 March 2014Resolved as an ordinary resolution that RainZihlangu be and is hereby re-elected as a memberof the Audit and Risk Committee of the Companyand the Group for the year ending 31 March 2014,with effect from the end of this meeting in terms ofsection 94(2) of the Companies Act.An abbreviated curriculum vitae in respect of RainZihlangu appears on page 14 of the IntegratedAnnual Report to which this notice is attached.The minimum percentage of voting rights that isrequired for this ordinary resolution to be adoptedis more than 50% (fifty percent) of the voting rightsexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.8. Ordinary resolution number 8Endorsement of the Company remunerationpolicyResolved as an ordinary resolution that theremuneration policy as tabled by the Board, asmore fully detailed on page 118 of the IntegratedAnnual Report to which this notice is attached, beand is hereby approved by way of a non-bindingadvisory vote of shareholders of the Company, asrecommended in King III.For record purposes, the minimum percentage ofvoting rights that is required for this resolution tobe adopted as a non-binding advisory vote is morethan 50% (fifty percent) of the voting rightsexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting.9. Special resolution number 1Non-executive directors’ remuneration for theyear ended 31 March 2014Resolved as a special resolution that, in terms ofsection 66(9) of the Companies Act, the Companybe and is hereby authorised to pay remunerationto non-executive directors for the year ending31 March 2014 in respect of their positions asBoard and Committee members as follows:FY2013FY2014Retainer fees Annual AnnualBoard Chairman 135 000 141 750Board member 60 000 63 000Audit and RiskCommittee Chairman 56 400 59 220Audit and RiskCommittee member 45 100 47 355Meeting feesPer meetingBoard fee – Chairman 27 000 28 350Board fee – member 18 000 18 900Board fee 5+ – Chairman 54 000 56 700Board fee 5+ – member 30 000 31 500Audit and RiskCommittee fee –Chairman 21 150 22 207Audit and RiskCommittee fee –member 16 925 17 771Audit and RiskCommittee fee 4+ –Chairman 35 250 37 013Audit and RiskCommittee fee 4+ –member 28 200 29 610RemunerationCommittee fee –Chairman 28 200 29 610RemunerationCommittee fee –member 22 560 23 688Nomination Committeefee – Chairman 28 200 29 610Nomination Committeefee – member 22 560 23 688Investment Committeefee – Chairman 28 200 29 610Investment Committeefee – member 22 560 23 688Other fees – member 22 560 23 688In terms of section 66(9) of the Companies Act, acompany is required to pre-approve the paymentof remuneration to directors for their services asdirectors by means of a special resolution passedby the shareholders of the Company within theprevious two years.

Sentula Mining Limited Integrated Annual Report 2013148Notice of annual general meeting continuedThe minimum percentage of voting rights that isrequired for this special resolution to be adoptedis at least 75% (seventy-five percent) of the votesexercised on the resolutions by shareholderspresent or represented by proxy at the annualgeneral meeting, and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.10. Special resolution number 2Financial assistance in terms of section 44 ofthe Companies Act (2008)Resolved as a special resolution that, in terms ofsection 44 of the Companies Act, the shareholdersof the Company hereby approve of the Companyproviding, at any time and from time to timeduring the period of 2 (two) years commencing onthe date of this special resolution, any direct orindirect financial assistance as contemplated insection 44 of the Companies Act to any person forthe purpose of, or in connection with, thesubscription for any option, or any securities,issued or to be issued by the Company or arelated or inter-related company, or for thepurchase of any option or securities of theCompany or a related or inter-related company,provided that:(i) the recipient or recipients of such financialassistance;(ii) the form, nature and extent of such financialassistance;(iii) the terms and conditions under which suchfinancial assistance is provided, aredetermined by the Board from time to time;and(iv) the Board may not authorise the Company toprovide any financial assistance pursuant tothis special resolution unless the Board meetsall those requirements of section 44 of theCompanies Act which it is required to meet inorder to authorise the Company to providesuch financial assistance.In terms of section 44 of the Companies Act, acompany is required to approve the provision offinancial assistance to a person for the subscriptionof securities in the company or a related orinter-related company by means of passing aspecial resolution in terms of section 44 of theCompanies Act.The minimum percentage of voting rights that isrequired for this special resolution to be adoptedis at least 75% (seventy-five percent) of the votesexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.11. Special resolution number 3Financial assistance in terms of section 45 ofthe Companies Act (2008)Resolved as a special resolution that, in terms ofsection 45 of the Companies Act, the shareholdersof the Company hereby approve of the Companyproviding, at any time and from time to timeduring the period of 2 (two) years commencing onthe date of this special resolution, any direct orindirect financial assistance as contemplated insection 45 of the Companies Act to any 1 (one) ormore related or inter-related companies orcorporations of the Company and/or to any 1 (one)or more members of any such related or interrelatedcompany or corporation and/or to any1 (one) or more persons related to any suchcompany or corporation, provided that:(i) the recipient or recipients of such financialassistance;(ii) the form, nature and extent of such financialassistance;(iii) the terms and conditions under which suchfinancial assistance is provided, aredetermined by the Board from time to time;(iv) the Board may not authorise the Company toprovide any financial assistance pursuant tothis special resolution unless the Board meetsall those requirements of section 45 of theCompanies Act which it is required to meet inorder to authorise the Company to providesuch financial assistance; and

Sentula Mining Limited Integrated Annual Report 2013149(v) such financial assistance to a recipient thereofis, in the opinion of the Board, required forthe purpose of:(a) meeting all or any of such recipient’soperating expenses (including capitalexpenditure); and/or(b) funding the growth, expansion,reorganisation or restructuring of thebusinesses or operations of such recipient;and/or(c) funding such recipient for any otherpurpose which in the opinion of the Boardis directly or indirectly in the interests ofthe Company.In terms of section 45 of the Companies Act, acompany is required to approve the provision offinancial assistance to a company within its groupby means of passing a special resolution in termsof section 45 of the Companies Act. As part of theCompany’s current Group operations, it providesfinancial assistance to subsidiaries and otherrelated companies in its Group.The minimum percentage of voting rights that isrequired for this special resolution to be adoptedis at least 75% (seventy-five percent) of the votesexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.Notice in terms of section 45(5) of theCompanies Act in respect of special resolutionnumber 3Notice is hereby given to shareholders of theCompany in terms of section 45(5) of theCompanies Act of a resolution adopted by theBoard authorising the Company to provide suchdirect or indirect financial assistance as specified inthe special resolution above:(a) by the time that this notice of annual generalmeeting is delivered to shareholders of theCompany, the Board will have adopted aresolution (“Section 45 Board Resolution”)authorising the Company to provide, at anytime and from time to time during the periodof 2 (two) years commencing on the date onwhich the special resolution is adopted, anydirect or indirect financial assistance ascontemplated in section 45 of the CompaniesAct to any one or more related or inter-relatedcompanies or corporations of the Companyand/or to any one or more members of anysuch related or inter-related company orcorporation and/or to any one or morepersons related to any such company orcorporation;(b) the Section 45 Board Resolution will beeffective only if and to the extent that thespecial resolution under the heading “specialresolution number 3” is adopted by theshareholders of the Company, and theprovision of any such direct or indirectfinancial assistance by the Company, pursuantto such resolution, will always be subject tothe Board being satisfied that:(i) immediately after providing such financialassistance, the Company will satisfy thesolvency and liquidity test as referred to insection 45 (3)(b)(i) of the Companies Act;and that(ii) the terms under which such financialassistance is to be given are fair andreasonable to the Company as referred toin section 45(3)(b)(ii) of the CompaniesAct; and(c) in as much as the Section 45 Board Resolutioncontemplates that such financial assistancewill in the aggregate exceed one-tenth of 1%(one percent) of the Company’s net worth atthe date of adoption of such resolution, theCompany hereby provides notice of theSection 45 Board Resolution to shareholdersof the Company. Such notice will also beprovided to any trade union representing anyemployees of the Company.

Sentula Mining Limited Integrated Annual Report 2013150Notice of annual general meeting continued12. Special resolution number 4General approval to reacquire sharesResolved as a special resolution that the Board ishereby authorised, by way of a general approval interms of the provisions of the ListingsRequirements and the Companies Act and aspermitted in the Company’s MoI, to approve thepurchase of its own ordinary shares by theCompany, and the purchase of ordinary shares inthe Company by any of its subsidiaries, upon suchterms and conditions and in such amounts as theBoard may from time to time determine, subject tothe Companies Act, MoI of the Company and eachof its subsidiaries and the Listings Requirements,provided that:(i) the acquisition of the ordinary shares must beeffected through the order book operated bythe JSE trading system and done without anyprior understanding or arrangement betweenthe Company and the counterparty;(ii) this general authority shall only be valid untilthe earlier of the Company’s next annualgeneral meeting or the expiry of a period of15 (fifteen) months from the date of passingof this special resolution;(iii) in determining the price at which theCompany’s ordinary shares are acquired interms of this general authority, the maximumpremium at which such ordinary shares maybe acquired will be 10% (ten percent) of theweighted average of the market value atwhich such ordinary shares are traded on theJSE, as determined over the 5 (five) businessdays immediately preceding the date onwhich the transaction is effected;(iv) the acquisitions of ordinary shares in theaggregate in any one financial year may notexceed 20% (twenty percent) of theCompany’s issued ordinary share capital;(v) the Company may only effect the repurchaseonce a resolution has been passed by theBoard confirming that the Board hasauthorised the repurchase, that the Companyhas passed the solvency and liquidity test(”test“) and that since this was done therehave been no material changes to thefinancial position of the Group;(vi) the Company or its subsidiaries may notacquire ordinary shares during a prohibitedperiod as defined in paragraph 3.67 of theListings Requirements, unless a repurchaseprogramme is in place where dates andquantities of shares to be traded during theprohibited period are fixed and full details ofthe programme have been disclosed in anannouncement over SENS prior to thecommencement of the prohibited period;(vii) an announcement will be published once theCompany has cumulatively repurchased 3%(three percent) of the number of the ordinaryshares in issue at the time this generalauthority is granted (“initial number”), and foreach 3% (three percent) in aggregate of theinitial number acquired thereafter; and(viii) at any point in time, the Company may onlyappoint one agent to effect any acquisition/son its behalf.The purpose of the special resolution is to grantthe Company’s Board a general authority, up toand including the date of the following annualgeneral meeting of the Company, to approve theCompany’s purchase of shares in itself, or to permita subsidiary of the Company to purchase shares inthe Company.The minimum percentage of voting rights that isrequired for this special resolution to be adoptedis at least 75% (seventy-five percent) of the votesexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.Other disclosure in terms of section 11.26 ofthe JSE Listings RequirementsFurther to special resolution number 4, the ListingsRequirements require the following disclosures,which are contained in the Integrated AnnualReport of which this notice forms part:(i) directors and management – page 10;(ii) major shareholders of Sentula – page 142;(iii) directors’ interests in securities – page 142;(iv) share capital of the Company – page 104; and(v) litigation statement – page 66.

Sentula Mining Limited Integrated Annual Report 2013151Material changeThere have been no material changes in the affairsor financial position of the Company and itssubsidiaries since the Company’s financial year-endand the date of this notice.Directors’ responsibility statementThe directors, whose names are given on page 13of the Integrated Annual Report of which thisnotice forms part, collectively and individuallyaccept full responsibility for the accuracy of theinformation pertaining to special resolutionnumber 4 and certify that to the best of theirknowledge and belief there are no facts in relationto special resolution number 4 that have beenomitted which would make any statement inrelation to special resolution number 4 false ormisleading, and that all reasonable enquiries toascertain such facts have been made and thatspecial resolution number 4 together with thisnotice contains all information required by law andthe Listings Requirements in relation to specialresolution number 4.Adequacy of working capitalAt the time that the repurchase contemplated inspecial resolution number 4 is to take place, theBoard will ensure that, after considering the effectof the maximum repurchase and for a period of12 (twelve) months thereafter:hhthe Company and its subsidiaries will be able topay their debts as they become due in theordinary course of business;hhthe consolidated assets of the Company and itssubsidiaries, fairly valued in accordance withInternational Financial Reporting Standards, willbe in excess of the consolidated liabilities of theCompany and its subsidiaries;hhthe issued share capital and reserves of theCompany and its subsidiaries will be adequatefor the purpose of the ordinary business of theCompany and its subsidiaries; andhhthe working capital available to the Companyand its subsidiaries will be sufficient for theCompany and its subsidiaries’ requirements.The Company may not enter the market toproceed with the repurchase until its sponsor,Merchantec Proprietary Limited, has discharged allof its responsibilities in terms of the ListingsRequirements insofar as they apply to workingcapital statements for the purposes of undertakingan acquisition of its issued ordinary shares.13. Ordinary resolution number 9Directors’ authority to take all such actionsnecessary to implement the resolutionscontained in this noticeResolved as an ordinary resolution that any directorof the Company be and is hereby authorised to doall such things, sign all such documents and takeall such actions as may be necessary for orincidental to the implementation of the ordinaryand special resolutions approved in accordancewith the provisions of this notice of annualgeneral meeting.The minimum percentage of voting rights that isrequired for this ordinary resolution to be adoptedis more than 50% (fifty percent) of the voting rightsexercised on the resolution by shareholderspresent or represented by proxy at the annualgeneral meeting and further subject to theprovisions of the Companies Act, the MoI of theCompany and the Listings Requirements.Other businessTo transact such other business as may be required atthis annual general meeting.Voting and proxiesA shareholder entitled to attend and vote at the annualgeneral meeting is entitled to appoint a proxy or proxiesto attend and act in his/her stead. A proxy need not be amember of the Company. For the convenience ofregistered members of the Company, a form of proxy isattached hereto.The attached form of proxy is only to be completed bythose ordinary shareholders who:(i) hold ordinary shares in certificated form; or(ii) are recorded on the sub-register in “own-name”dematerialised form.

Sentula Mining Limited Integrated Annual Report 2013152Notice of annual general meeting continuedOrdinary shareholders who have dematerialised theirordinary shares through a CSDP or broker without“own-name” registration and who wish to attend theannual general meeting, must instruct their CSDP orbroker to provide them with the relevant letter ofrepresentation to attend the annual general meeting inperson or proxy and vote. If they do not wish to attendthe annual general meeting in person or by proxy andvote, they must provide the CSDP or broker with theirvoting instructions in terms of the relevant custodyagreement entered into between them and the CSDPor broker.Forms of proxy should be forwarded to reach the transfersecretaries, Computershare Investor Services ProprietaryLimited, at least 48 (forty-eight) hours excludingSaturdays, Sundays and public holidays, before the timeof the annual general meeting.Forms of proxy may also be obtained from theCompany’s registered office.By order of the BoardIna CrossCompany Secretary13 September 2013Johannesburg

Sentula Mining Limited Integrated Annual Report 2013Form of proxy153Sentula Mining LimitedIncorporated in the Republic of South Africa(Registration number 1992/001973/06)Share code: SNU ISIN: ZAE000107223(“Sentula” or “the Company” or “the Group”)For use only by ordinary shareholders who:hhhold ordinary shares in certificated form (“certificated ordinary shareholders”); orhhhave dematerialised their ordinary shares (“dematerialised ordinary shareholders”) and are registered with “own-name” registration, at theannual general meeting of ordinary shareholders of the Company to be held at Ground Floor, Building 14, The Woodlands Office Park,Woodlands Drive, Woodmead at 10:00 on Thursday, 24 October 2013 and any adjournment thereof.Dematerialised ordinary shareholders holding ordinary shares other than with “own-name” registration who wish to attend the annual generalmeeting must inform their Central Securities Depository Participant (“CSDP”) or broker of their intention to attend the annual general meetingand request their CSDP or broker to issue them with the relevant Letter of Representation to attend the annual general meeting in person or byproxy and vote. If they do not wish to attend the annual general meeting in person or by proxy, they must provide their CSDP or broker with theirvoting instructions in terms of the relevant custody agreement entered into between them and the CSDP or broker. These ordinary shareholdersmust not use this form of proxy.I/We (BLOCK LETTERS please)of (address)Telephone workTelephone homebeing the holder/custodian ofordinary shares in the Company, hereby appoint (see note):1. or failing him/her,2. or failing him/her,3. the Chairperson of the meeting,as my/our proxy to attend and act for me/us on my/our behalf at the annual general meeting of the Company convened for the purpose ofconsidering and, if deemed fit, passing, with or without modification, the special and ordinary resolutions to be proposed thereat (“resolutions”)and at each postponement or adjournment thereof and to vote for and/or against such resolutions, and/or abstain from voting, in respect of theordinary shares in the issued share capital of the Company registered in my/our name/s in accordance with the following instructions:1. Ordinary resolution number 1To receive, consider and adopt the annual financial statements of the Company and the Group for thefinancial year ended 31 March 20132. Ordinary resolution number 2To confirm the reappointment of PricewaterhouseCoopers Inc. as independent auditors of theCompany and the Group, with Mr PC Hough being the individual registered auditor3. Ordinary resolution number 3To approve the re-election as director of Ralph Patmore who retires by rotation and, being eligible,offers himself for re-election4. Ordinary resolution number 4To approve the re-election as director of Jonathan Best who retires by rotation and, being eligible,offers himself for re-election5. Ordinary resolution number 5To approve the re-election of Cor van Zyl as member of the Audit and Risk Committee for the yearending 31 March 20146. Ordinary resolution number 6To approve the re-election of Kholeka Mzondeki as member of the Audit and Risk Committee for theyear ending 31 March 20147. Ordinary resolution number 7To approve the re-election of Rain Zihlangu as member of the Audit and Risk Committee for the yearending 31 March 20148. Ordinary resolution number 8To endorse the Company remuneration policy9. Special resolution number 1To approve the non-executive directors’ remuneration for the year ending 31 March 201410. Special resolution number 2Financial assistance in terms of section 44 of the Companies Act (2008)11. Special resolution number 3Financial assistance in terms of section 45 of the Companies Act (2008)12. Special resolution number 4General approval to reacquire shares13. Ordinary resolution number 9Directors’ authorityNumber of ordinary sharesFor Against AbstainPlease indicate instructions to proxy in the space provided above by the insertion therein of the relevant number of votes exercisable.A member entitled to attend and vote at the annual general meeting may appoint one or more proxies to attend and act in his/her stead.A proxy so appointed need not be a member of the Company.Signed at on 2013SignatureAssisted by (where applicable)Each ordinary shareholder is entitled to appoint one or more proxies (who need not be a shareholder of the Company) to attend, speak and votein place of that shareholder at the annual general meeting.

Sentula Mining Limited Integrated Annual Report 2013154Form of proxy continuedNotes to proxy1. The form of proxy must only be used by shareholderswho hold shares in certificated form or who arerecorded on the sub-register in electronic form in “ownname”.2. All other beneficial owners who have dematerialisedtheir shares through a CSDP or broker and wish toattend the annual general meeting must provide theCSDP or broker with their voting instructions in terms ofthe relevant agreement entered into between them andthe CSDP or broker.3. A shareholder entitled to attend and vote at the annualgeneral meeting may insert the name of a proxy or thenames of two alternate proxies of the shareholder’schoice in the space provided, with or without deleting“the Chairperson of the meeting”. The person whosename stands first on the form of proxy and who ispresent at the annual general meeting will be entitledto act as proxy to the exclusion of such proxy(ies) whosenames follow.4. A shareholder is entitled to one vote on a show ofhands and, on a poll, one vote in respect of eachordinary share held. A shareholder’s instructions to theproxy must be indicated by the insertion of the relevantnumber of votes exercisable by that shareholder in theappropriate space provided. If an “X” has been insertedin one of the blocks to a particular resolution, it willindicate the voting of all the shares held by theshareholder concerned. Failure to comply with this willbe deemed to authorise the proxy to vote or to abstainfrom voting at the annual general meeting as he/shedeems fit in respect of all of the shareholder’s votesexercisable thereat. A shareholder or the proxy is notobliged to use all the votes exercisable by theshareholder or by the proxy, but the total of the votescast and in respect of which abstention is recorded maynot exceed the total of the votes exercisable by theshareholder or the proxy.5. A vote given in terms of an instrument of proxy shall bevalid in relation to the annual general meetingnotwithstanding the death, insanity or other legaldisability of the person granting it, or the revocation ofthe proxy, or the transfer of the shares in respect ofwhich the proxy is given, unless notice as to any of theaforementioned matters shall have been received by thetransfer secretaries not less than 48 hours before thecommencement of the annual general meeting.6. If a shareholder does not indicate on this form that his/her proxy is to vote in favour of or against any resolutionor to abstain from voting, or gives contradictoryinstructions, or should any further resolution(s) or anyamendment(s) which may properly be put before theannual general meeting be proposed, such proxy shallbe entitled to vote as he/she thinks fit.7. The Chairperson of the annual general meeting mayreject or accept any form of proxy which is completedand/or received other than in compliance with thesenotes.8. A shareholder’s authorisation to the proxy including theChairperson of the annual general meeting, to vote onsuch shareholder’s behalf, shall be deemed to includethe authority to vote on procedural matters at theannual general meeting.9. The completion and lodging of this form of proxy willnot preclude the relevant shareholder from attendingthe annual general meeting and speaking and voting inperson thereat to the exclusion of any proxy appointedin terms hereof.10. Documentary evidence establishing the authority of aperson signing the form of proxy in a representativecapacity must be attached to this form of proxy, unlesspreviously recorded by the Company’s transfersecretaries or is waived by the Chairperson of theannual general meeting.11. A minor or any other person under legal incapacity mustbe assisted by his/her parent or guardian, as applicable,unless the relevant documents establishing his/hercapacity are produced or have been registered by thetransfer secretaries of the Company.12. Where there are joint holders of shares:hhany one holder may sign the form of proxy;hhthe vote(s) of the senior shareholders (for thatpurpose seniority will be determined by the order inwhich the names of shareholders appear in theCompany’s register of shareholders) who tenders avote (whether in person or by proxy) will be acceptedto the exclusion of the vote(s) of the other jointshareholder(s).13. Forms of proxy should be lodged with or mailed totransfer secretaries, Computershare Investor ServicesProprietary Limited, 70 Marshall Street, Johannesburg,2001 (PO Box 61051, Marshalltown, 2107), to bereceived by no later than 10:00 (SA time) on Tuesday,22 October 2013 (or 48 (forty-eight) hours before anyadjournment of the annual general meeting which date,if necessary, will be notified on SENS).14. A deletion of any printed matter and the completion ofany blank space need not be signed or initialled. Anyalteration or correction must be signed and not merelyinitialled.Summary of the rights of a shareholder to berepresented by proxy, as set out in section 58 of theCompanies ActA proxy appointment must be in writing, dated and signedby the shareholder appointing a proxy and, subject to therights of a shareholder to revoke such appointment (as setout below), remains valid only until the end of the relevantshareholders’ meeting.A proxy may delegate the proxy’s authority to act on behalfof a shareholder to another person, subject to anyrestrictions set out in the instrument appointing the proxy.The appointment of a proxy is suspended at any time and tothe extent that the shareholder who appointed such proxychooses to act directly and in person in the exercise of anyrights as a shareholder.The appointment of a proxy is revocable by the shareholderin question cancelling it in writing, or making a laterinconsistent appointment of a proxy, and delivering a copy ofthe revocation instrument to the proxy and to the Company.The revocation of a proxy appointment constitutes acomplete and final cancellation of the proxy’s authority to acton behalf of the shareholder as of the later of:(a)(b)the date stated in the revocation instrument, if any; andthe date on which the revocation instrument is deliveredto the Company as required in the first sentence of thisparagraph.If the instrument appointing the proxy or proxies has beendelivered to the Company, as long as that appointmentremains in effect, any notice that is required by the Act or theCompany’s Memorandum of Incorporation to be delivered bythe Company to the shareholder, must be delivered by theCompany to:(a) the shareholder, or(b) the proxy or proxies, if the shareholder has(i)(ii)directed the Company to do so in writing; andpaid any reasonable fee charged by the Companyfor doing so.Attention is also drawn to the “Notes to proxy”.The completion of a form of proxy does not preclude anyshareholder from attending the annual general meeting.

Sentula Mining Limited Integrated Annual Report 2013Administration155Sentula Mining Limited(Registration number 1992/001973/06)Registered officeGround Floor, Building 14, The Woodlands Office ParkWoodlands Drive, Woodmead, 2080(PO Box 76, Woodlands Office Park, Woodmead, 2080)Tel: 011 656 1303Company SecretaryI Cross (appointed 8 July 2013)GM Chemaly (resigned 8 July 2013)Ground Floor, Building 14, The Woodlands Office ParkWoodlands Drive, Woodmead, 2080(PO Box 76, Woodlands Office Park, Woodmead, 2080)Tel: 011 656 1303Transfer secretariesComputershare Investor Services Proprietary Limited70 Marshall Street, Johannesburg, 2001(PO Box 61051, Marshalltown, 2107)Tel: 011 370 5757SponsorMerchantec Proprietary Limited2nd Floor, North Block, Hyde Park Office TowersCorner 6th Road and Jan Smuts AvenueHyde Park, 2196(PO Box 41480, Craighall, 2024)Tel: 011 325 6363AttorneysCliffe Dekker Hofmeyr6 Sandown Valley Crescent, Sandown, Sandton, 2196(Private Bag X40, Benmore, 2010)Tel: 011 286 1100Edward Nathan, Sonnenbergs150 West street, Sandton, Johannesburg, 2146(PO Box 783347, Sandton, 2146)Tel: 011 269 7600Corporate advisersStandard BankCorporate and Investment Banking3 Simmonds Street, Johannesburg, 2001(PO Box 61344, Marshalltown, 2107)Tel: 011 636 9155BankersStandard BankCorporate and Investment Banking3 Simmonds Street, Johannesburg, 2001(PO Box 61344, Marshalltown, 2107)Tel: 011 636 9155Sanlam Capital MarketsDebt Structuring Unit3A Summit Road, Dunkeld West, Johannesburg, 2196(PO Box 411420, Craighall, 2024)Tel: 011 778 6000The Hongkong and Shanghai Banking CorporationLimited2 Exchange Square, 85 Maude Street, Sandown, 2196(Private Bag X785434, Sandton, 2146)Tel: 011 676 4200WesBankHome of WesBankEnterprise Road, Fairlands, 2170(PO Box 1066, Fairlands, 2000)Tel: 011 632 6000AuditorsExternalPricewaterhouseCoopers Inc.2 Eglin Road, Sunninghill, 2157(Private Bag X36, Sunninghill, 2157)Tel: 011 797 4000InternalBDO22 Wellington Road, Parktown, 2193(Private bag X60500, Houghton, 2041)Tel: 010 060 5000Tax adviserGrant Thornton137 Daisy Street, Sandown, 2196(Private Bag X28, Benmore, 2010)Tel: 011 322 4500Public relations/communicationsCollege HillFountain Grove, 5 Second Road, Hyde Park, Sandton, 2196(PO Box 413187, Craighall, 2024)Tel: 011 447 3030WebsiteThis report is available on our website atwww.sentula.co.za.

Sentula Mining Limited Integrated Annual Report 2013156Abbreviations“ABET”“ADT”“AFRS”“AIDS”“AMMSA”“BBBEE”“BEE”“Benicon”“Benicon Sales”“BWP”“Caston”“CCT”“CEO”“CIFR”“CIPC”“CFO”“Companies Act(2008)”“COMSOC”“CPR”“DEA”“DMR”“dti”“DWA”“DSCR”“ECSA”“ED”“EE”“EME”“EMPR”“EVA”“FRCP”“Geosearch”“ha”“HCT”“HDSA”“HIV”“HSBC”“IFRS”“ISO”“IWULA”“JEF”“JSE”“King III” or“King Reports”“kl”Adult basic education and trainingArticulated dump truckAnglo fatal risk standardAcquired immune deficiency syndromeAssociation of Mine Managers of South AfricaBroad-based black economic empowermentBlack economic empowermentBenicon Opencast Mining Proprietary LimitedBenicon Sales Proprietary LimitedBotswana PulaCaston Plant Sales Proprietary LimitedClassic Challenge Trading Proprietary LimitedChief Executive OfficerClassified Injury Frequency Rate – per millionman-hours workedCompanies and Intellectual PropertyCommissionChief Financial OfficerCompanies Act 71 of 2008 (as amended)Chamber of Mines Safety OrganisationCertificateCompetent person reportDepartment of Environmental AffairsDepartment of Mineral ResourcesDepartment of Trade and IndustryDepartment of Water AffairsDebt service cover ratioEngineering Council of South AfricaEnterprise developmentEmployment equityExempted micro enterpriseEnvironmental Management ProgrammeReportEconomic value addFatal Risk Compliance ProtocolGeosearch Holdings Proprietary LimitedHectaresHealth, counselling and testingHistorically disadvantaged South AfricansHuman Immunodeficiency VirusThe Hongkong and Shanghai BankingCorporation LimitedInternational Financial Reporting StandardsInternational Organisation for StandardisationIntegrated Water Use Licence ApplicationJEF Drill and Blast Proprietary Limited(previously Scharrighuisen Drilling and BlastingProprietary Limited)JSE LimitedKing Report on Governance for South Africa– 2009 (the “Report”) and the King Code ofGovernance Principles – 2009 (the “Code”)Kilolitre“km”Kilometre“KPIs”Key performance indicators“kWh”Kilowatt-hour“Listings Listings Requirements of the JSE LimitedRequirements”“LTIP”Long-term incentive plan“MDEDET” Mpumalanga Department of EconomicDevelopment, Environment and Tourism“Megacube” Megacube Mining Proprietary Limited(previously Scharrighuisen Opencast MiningProprietary Limited)“MEGA” Mpumalanga Economic Growth Agency“MHSA” Mine Health and Safety Act 1996 (Act 29 of1996)“MoI”Memorandum of Incorporation of theCompany“NEMA” National Environmental Management Act“NGOs” Non-governmental organisations“Nkomati Nkomati Anthracite Proprietary LimitedAnthracite”“NWN” A division of Caston“OHSA” Occupational Health and Safety Act 1993 (Act85 of 1993)“PGM”Platinum Group Metals“QSE”Qualifying small enterprise“Ritchie” Ritchie Crane Hire Proprietary Limited“SA”the Republic of South Africa“SAIMM” South African Institute of Mining andMetallurgy“SAVF”Suid-Afrikaanse Vroue Federasie“SED”Socio-economic development“SENS” Securities Exchange News Service“SHE”Safety, Health and Environment“SHEQ” Safety, Health, Environment and Quality“SBC”Standard bank-led consortium, comprisingStandard Bank, Sanlam Capital Markets andHSBC“TDR”Total debt to equity ratio“TIFR”Total Injury Frequency Rate“the Board” the Board of Directors of Sentula MiningLimited“the Company” Sentula Mining Limited“the current year” the financial year ended 31 March 2013“the Group” Sentula Mining Limited, its subsidiaries,associates and affiliates“the previous the financial year ended 31 March 2012year” or “theprior year”“the year” or the financial year ended 31 March 2013“the year underreview”“USD”US Dollar“VWAP” Volume weighted average price“ZAR”South African RandSubsidiaries – 31 March 2013Registration numberBenicon Coal Proprietary Limited 1993/003007/07Benicon Mining Proprietary Limited 1982/009206/07Benicon Opencast Mining Proprietary Limited 1993/007616/07Benicon Sales Proprietary Limited 1970/005781/07Buenti Drilling Proprietary Limited 2007/001551/07Caston Plant Sales Proprietary Limited 1991/003355/07Sentula Contracting Proprietary Limited 2009/023760/07Classic Challenge Trading Proprietary Limited 2001/025633/07Geosearch Holdings Proprietary Limited 2006/027773/07Geosearch International Proprietary Limited 1986/003933/07Geosearch South Africa Proprietary Limited 2005/042886/07JEF Drill and Blast Proprietary Limited 1996/017991/07Megacube Mining Proprietary Limited 1989/000748/07Nkomati Anthracite Proprietary Limited 1980/008581/07Ritchie Crane Hire Proprietary Limited 2007/006831/07Robust Opencast Resources Proprietary Limited 1994/004620/07Sentula Coal Proprietary Limited 2007/032919/07Sentula Exploration Proprietary Limited 2006/019584/07Sentula Mining Mauritius Limited77609 C1/GBLSentula Mining Services Mauritius Limited77730 C1/GBLSentula Mining Services Proprietary Limited 2007/023898/07Sentula Mining Ventures Mauritius Limited77898 C1/GBL

Bastion GraphicsSentula Mining Limited Integrated Annual Report 2013