EQSTRA HOLDINGS LIMITED - Audited provisional results for the year ended 30 June 2016

Release Date: 30/09/2016 08:15
 
Wrap Text
Audited provisional results for the year ended 30 June 2016

Eqstra Holdings Limited
Registration Number: 1998/011672/06
JSE codes: EQS
ISIN: ZAE000117123
Eqstra Corporation Limited
Registration Number: 1984/007054/06
JSE codes: EQS05; EQS06; EQS07; EQS08A; EQS09
ISIN: ZAG000094731, ZAG000104449, ZAG000104506,ZAG000109745, ZAG111089

AUDITED PROVISIONAL RESULTS FOR THE YEAR ENDED 30 June 2016

Eqstra to dispose of the Fleet Management and Logistics and Industrial Equipment divisions to enX

Right sized businesses and discontinued non-core operations in all divisions

enX to recapitalise the Contract Mining group post transaction

New long-term funding secured for the continuing operations post transaction

Introduction

The year under review has been an eventful and challenging year for Eqstra, with the group now set to undergo a radical
change that will realise its strategic objectives and position Eqstra for long-term sustainability.  

Following approval of the enX transaction at the shareholders' meeting held on 22 September 2016, Eqstra will transform
into a different group. The transaction results in the disposal of Fleet Management and Logistics and Industrial
Equipment to enX Group Limited in exchange for enX shares. The enX shares received will be subsequently distributed to
Eqstra shareholders as a dividend in specie. The contract mining businesses will remain and will be recapitalised with a
cash injection of R1.4 billion and new borrowing facilities.

Eqstra will change its name to eXtract Group Limited and a new board of directors will be constituted once the
transaction is finalised. The intended board to be ZB Swanepoel as independent non-executive chairperson, J Colling as
CEO, DAG Chadinha as CFO, JL Serfontein and MS Teke as non-executive directors and CS Halsey, SA Nkosi and OM Matloa as
independent non-executive directors.

Financial review

The group reported a loss for the year of R2 253 million compared to a profit of R254 million in the prior year. The
loss is best explained by analysing the components being:

     * Contract Mining and Plant Rental division loss of R463 million (2015: R130 million);
     * Industrial Equipment division profit of R94 million (2015: R131 million);
     * Fleet Management and Logistics division profit of R141 million (2015: R124 million); 
     * Other operations, including the fair value adjustment associated with the enX transaction, loss of R1 007 million
       (2015: R21 million loss); and lastly
     * Remaining discontinued operations (see details below) loss of R1 018 million (2015: R150 million profit). 

     

Divisional reviews  

Contract Mining and Plant Rental (continuing operations)   30 June 30 June         
                                                              2016    2015        %
                                                                Rm      Rm   change
Revenue                                                      2 964   2 801     +5.8
Operating profit                                               151     104    +45.2
Net finance costs                                            (219)   (200)     +9.5
Loss before taxation                                         (620)   (175)   +254.3
Revenue-generating assets                                    2 046   4 170   (50.9)

The division, as the only continuing operation, retained its focus on improving operating profits. The current year's
continuing results were impacted by leasing asset impairments of R536 million (2015: R79 million). In addition, as at 
30 June 2016 the division had R809 million of impaired assets classified as assets held for sale. 

The Benga contract in Mozambique concluded in December 2015 and assets were impaired to expected sale values.
Negotiations with various parties are ongoing to sell these assets. The assets were classified as assets held for sale.
Related asset impairments of R731 million were raised during the year.

The division also discontinued its plant rental operations and related asset impairments of R200 million (2015: R18
million) were raised during the year.

The division improved its lost time injury frequency rate at 0.18 (2015: 0.20).

Industrial Equipment (to be sold to enX)                   30 June 30 June        
                                                              2016    2015       %
                                                                Rm      Rm  change
Revenue                                                      3 036   2 602   +16.7
Operating profit                                               316     333   (5.1)
Net finance costs                                            (148)   (154)   (3.9)
Profit before taxation                                         131     181  (27.6)
PBT margin (%)                                                 4.3     7.0  (38.6)
Revenue-generating assets                                    2 555   2 513    +1.7

The division successfully increased new and used unit sales in a declining SA forklift market by securing a number of
new contracts with major blue-chip companies. A foreign exchange loss of R37 million (2015: R2 million gain) impacted
results. The Industrial Equipment's forklift business in the UK continued to perform well. During the year the division
discontinued its non-core Construction Equipment, Agricultural, 600SA manufacturing and Air Supreme businesses following
continued suboptimal performance. The division will be transferred to enX on the transaction effective date. 

Fleet Management and Logistics (to be sold to enX)          30 June 30 June       
                                                               2016    2015      %
                                                                 Rm      Rm change
Revenue                                                       2 113   2 019   +4.7
Operating profit                                                372     371   +0.3
Net finance costs                                             (173)   (200) (13.5)
Profit before taxation                                          188     171   +9.9
PBT margin (%)                                                  8.9     8.5   +4.7
Revenue-generating assets                                     2 764   3 199 (13.6)

The division performed well. Value add products continued to record growth and profit before taxation improved by 9.9%,
despite a strategy of limiting leasing growth to reduce group gearing. The division sold its Commodities business during
the year and closed operations in Nigeria. The division will be transferred to enX on the transaction effective date.

Dividend

The board has not declared a dividend given the company performance, transition and planned corporate action. 

     

Looking ahead

Under the new eXtract banner, Contract Mining will continue to focus on improving the efficiencies of the mines on which
it operates as well as seeking new projects to diversify its geographic and commodity exposures. Over the next 24
months, management will continue to realise best value for the impaired excess and idle assets within the business and
proceeds will be applied to repay debt. In the long-term the new mining services group will look to grow by acquisition.

The company will change its year-end from June to August. The next set of annual results for Eqstra (then renamed
eXtract) will therefore be for the 14 months ending 31 August 2017. 

Prospects for Fleet Management and Industrial Equipment will be outlined in enX's integrated report. 

Director changes and appreciation

JL Serfontein (previous CFO) was appointed CEO in July 2015, DA Austin appointed CFO on 1 May 2016 and ZB Swanepoel was
appointed as independent non-executive director on 1 December 2015. 

We thank our fellow board members for their contribution and our employees for their ongoing hard work in a challenging
environment. 

By order of the board
NP Mageza               JL Serfontein
Chairperson             Chief executive officer
30 September 2016

AUDITED SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at                                                                     30 June    30 June
                                                                             2016       2015
                                                                               Rm         Rm
ASSETS          
Non-current assets                                                          2 201     10 739
Intangible assets                                                              37        220
Property, plant and equipment                                                  77        468
Leasing assets                                                              2 044      9 950
Deferred tax assets                                                            41         65
Finance lease receivables                                                       1         16
Other investments and loans                                                     1         20
Current assets                                                              9 321      3 127
Finance lease receivables                                                       1         16
Other investments and loans                                                     -         58
Inventories                                                                    87      1 062
Trade and other receivables and derivatives                                   952      1 770
Taxation in advance                                                             6         18
Cash and cash equivalents                                                     148        203
Assets held for sale (4)                                                    8 127          - 
          
Total assets                                                               11 522     13 866
EQUITY AND LIABILITIES          
Stated capital                                                              1 839      1 839
Other reserves                                                                449        330
Retained (loss) income                                                      (688)      1 569
Equity attributable to owners of the parent                                 1 600      3 738
Non-controlling interests                                                      29         32
Total equity                                                                1 629      3 770
Non-current liabilities                                                     2 588      6 351
Interest-bearing borrowings (2)                                             2 539      5 601
Deferred tax liabilities                                                       49        750
Current liabilities                                                         7 305      3 745
Current portion of interest-bearing borrowings (2)                             92      1 918
Trade and other payables and derivatives                                      675      1 782
Current tax liabilities                                                        15         45
Liabilities associated with assets held for sale (4)                        6 523          - 

Total equity and liabilities                                               11 522     13 866

AUDITED SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the years ended                                                        30 June   30 June
                                                                              2016      2015
                                                                                Rm       Rm*

Continuing operations
Revenue                                                                      2 964     2 801
Profit from operations before depreciation, amortisation and recoupments       563       525
Depreciation and amortisation                                                (412)     (422)
Profit on sale of property, plant and equipment                                  -         1
Operating profit                                                               151       104
Net foreign exchange gains                                                       1         - 
Net impairment of property, plant and equipment (6)                           (17)         - 
Net impairment of leasing assets (6)                                         (536)      (79)
(Loss) profit before net finance costs                                       (401)        25
Net finance costs (7)                                                        (219)     (200)
Finance costs                                                                (248)     (208)
Finance income                                                                  29         8

Loss before taxation                                                         (620)     (175)
Income tax                                                                     157        45
Loss for the year from continuing operations                                 (463)     (130)

Discontinued operations (11)
(Loss) profit for the year from discontinued operations                    (1 790)       384
(Loss) profit for the year                                                 (2 253)       254

Attributable to:
Owners of the parent                                                       (2 257)       243
-  Loss for the year from continuing operations                              (463)     (131)
-  (Loss) profit for the year from discontinued operations                 (1 794)       374
Non-controlling interests                                                        4        11
(Loss) profit for the year                                                 (2 253)       254
                                                                             Cents     Cents
Loss per share from   continuing operations (9)
-  Basic and diluted   loss per share                                      (118.3)    (33.5)
(Loss) earnings per   share from discontinued operations (9)
-  Basic and diluted   (loss) earnings per share                           (458.5)      94.3

*2015 re-presented to show comparative results from continuing operations.

AUDITED SUMMARISED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

for the years ended                                                        30 June   30 June
                                                                              2016      2015
                                                                                Rm        Rm
(Loss) profit for the year                                                 (2 253)       254
Total other comprehensive income for the year, net of taxation
Items that may be reclassified subsequently to profit or loss                  132       109
Exchange differences on translation of foreign subsidiaries                    124        92
Net fair value gain on cash flow hedges and other fair value reserves            8        17

Total comprehensive (loss) income for the year, net of taxation            (2 121)       363
Attributable to:
Owners of the parent                                                       (2 125)       352
Non-controlling interests                                                        4        11

                                                                           (2 121)       363

AUDITED SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                                                                                           Non-
for the years ended                                                     Stated          Other        Retained       controlling
                                                                       capital       reserves          income         interests         Total
                                                                            Rm             Rm              Rm                Rm            Rm
Balance at 1 July 2014                                                   1 839            272           1 314                26         3 451
Total comprehensive income for the year                                      -            109             243                11           363
Profit for the year                                                          -              -             243                11           254
Other comprehensive income for the year, net of taxation                     -            109               -                 -           109
Net share-based payment expense                                              -              2               -                 -             2
Vesting of share incentive scheme                                            -            (2)               -                 -           (2)
Devaluation of Lereko call option                                            -           (16)               -                 -          (16)
Derecognition of Lereko call option                                          -           (23)               -                 -          (23)
Dividends paid                                                               -              -               -               (5)           (5)
Realisation of currency translation reserve                                  -           (12)              12                 -             - 
Balance at 30 June 2015                                                  1 839            330           1 569                32         3 770
Total comprehensive income for the year                                      -            132         (2 257)                 4       (2 121)
Loss for the year                                                            -              -         (2 257)                 4       (2 253)
Other comprehensive income for the year, net of taxation                     -            132               -                 -           132
Net share-based payment expense                                              -              5               -                 -             5
Vesting of share incentive scheme                                            -            (1)               -                 -           (1)
Goodwill reserve arising on additional interest in subsidiary                -           (16)               -                 -          (16)
Dividends paid                                                               -              -               -               (7)           (7)
Deferred taxation directly in equity                                         -            (1)               -                 -           (1)
Balance at 30 June 2016                                                  1 839            449           (688)                29         1 629

AUDITED SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS

for the years ended                                                    30 June        30 June
                                                                          2016           2015
                                                                            Rm             Rm
Cash flows from operating activities    
Cash receipts from customers                                             9 426          9 463
Cash paid to suppliers and employees                                   (5 993)        (5 561)
Cash generated from operations                                           3 433          3 902
Interest received                                                           45             19
Interest paid                                                            (651)          (672)
Taxation paid                                                            (101)           (33)
Net cash flows from operating activities                                 2 726          3 216
Cash flows from investing activities    
Disposal (acquisition) of businesses                                        42           (12)
Purchase of intangible assets                                            ( 39)          ( 71)
Purchase of property, plant and equipment                                ( 32)          ( 33)
Purchase of leasing assets                                             (2 305)        (2 447)
Proceeds on disposal of property, plant and equipment                       49             19
Proceeds on disposal of leasing assets                                      32             12
(Increase) decrease in finance lease receivables                          ( 6)             11
Proceeds on disposal of other investments and loans                          2              - 
Net cash flows from investing activities                               (2 257)        (2 521)
Cash flows from financing activities    
Purchase of non-controlling interests                                     (16)           ( 3)
    
Dividends paid                                                             (7)            (5)
Net decrease in interest-bearing borrowings                              (324)         ( 590)
Net cash flows from financing activities                                 (347)         ( 598)
Net increase in cash and cash equivalents                                  122             97
Effect of exchange rate translation on cash and cash equivalents             9             13
Cash and cash equivalents at beginning of year                             203             93
Cash and cash equivalents at end of year                                   334            203

AUDITED SUMMARISED CONSOLIDATED STATEMENT OF DISCONTINUED CASH FLOWS

                                                                       30 June       30 June
                                                                          2016          2015
                                                                            Rm            Rm
CASH FLOWS FROM DISCONTINUED OPERATIONS

Net cash flows from operating activities                                 2 471         2 821
Net cash flows from investing activities                               (1 758)       (2 085)
Net cash flows from financing activities                                 (603)         (685)
Net cash inflow                                                            110            51

SEGMENTAL INFORMATION -  AUDITED SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at                                                                      Contract Mining
                                                                        30 June      30 June*
                                                                           2016          2015
                                                                             Rm            Rm

BUSINESS SEGMENTATION
ASSETS
Intangible assets                                                            37            39
Property, plant and equipment                                                77           139
Leasing assets                                                            2 044         4 160
Finance lease receivables                                                     2            10
Other investments and loans                                                   1            59
Inventories                                                                  87           164
Trade and other receivables and derivatives                                 952           962
Operating assets                                                          3 200         5 533
Assets held for sale**                                                    8 127             - 
Deferred tax assets                                                          41             - 
Taxation in advance                                                           6             2
Cash and cash equivalents                                                   148            63
Total assets                                                             11 522         5 598
LIABILITIES
Trade and other payables and derivatives                                    675           697
Interest-bearing borrowings                                               2 631         2 990
Operating liabilities                                                     3 306         3 687
Liabilities associated with assets held for sale**                        6 523             - 
Deferred tax liabilities                                                     49           114
Current tax liabilities                                                      15             8
Total liabilities                                                         9 893         3 809
GEOGRAPHIC SEGMENTATION
Operating assets                                                          3 200         5 533
-  South Africa                                                           2 784         3 496
-  Rest of world                                                            416         2 037
Trade and other payables and derivatives                                    675           697
-  South Africa                                                             598           431
-  Rest of world                                                             77           266
Interest-bearing borrowings                                               2 631         2 990
-  South Africa                                                           2 395         2 293
-  Rest of world                                                            236           697
Net capital expenditure                                                     529           521
-  South Africa                                                             485           180
-  Rest of world                                                             44           341

SEGMENTAL INFORMATION -  AUDITED SUMMARISED CONSOLIDATED INCOME STATEMENTS
No segmental statement of comprehensive income is disclosed as the remaining business comprises Contract Mining only. Refer to the continuing statement of
comprehensive income for results.

* Represents to Contract Mining and Plant Rental segment for the year ended 30 June 2015.
** Refer to note 4 and 11 for analysis of previously reported segments.

Only the Contract Mining and Plant Rental divisions are included in the segmental statement of financial position as the other divisions are held for sale in light
of the corporate transaction.

NOTES

(1) Basis of preparation
    These summarised provisional consolidated financial statements have been prepared in accordance with the framework concepts, measurement and recognition
    requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides, as issued by the Accounting Practices Committee and
    the Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and contains at a minimum information required by IAS 34: Interim
    Financial Reporting, the JSE Limited Listings Requirements and the South African Companies Act. The accounting policies and their application are consistent,
    in all material respects, with those detailed in Eqstra's 2015 annual financial statements, except for the adoption on 1 July 2015 of those new, revised and
    amended standards and interpretations in Eqstra's 2016 consolidated annual financial statements.
    The adoption of the new and amended statements of IFRS, interpretations of IFRS, and improvements project amendments did not have a material impact on the
    group.


(2) Interest-bearing borrowings
    Following a substantial impairment to the carrying value of various assets the group breached its capital adequacy covenant at 31 December 2015. Lenders agreed
    to condone the breach subject to certain conditions and a refinancing program was immediately commenced. In light of this and the corporate transaction
    approved by shareholders on 22 September 2016, the relevant debt has been reclassified as short term as at 30 June 2016.

                                                                       30 June        30 June
                                                                          2016           2015
                                                                            Rm             Rm
(3) Capital commitments and contingencies                                  429          1 776
    -  Contracted                                                           50            224
    -  Authorised by directors but not contracted                          379          1 552
    Contingent liabilities                                                   -              - 
    Guarantees                                                              10             24

The capital commitments are substantially for the acquisition and replacement of leasing assets. Expenditure will be financed out of cash generated from
operations, proceeds on disposals and existing banking facilities. The 2016 commitments relate to continuing operations only.

(4) Assets held for sale (also refer note 11)
                                                                                      Corporate transaction
                                                                                                                                        Contract
                                                                                                                                          Mining
                                                                                                                                       and Plant
                                                            Total   Industrial        Fleet Management and         Other                  Rental
                                                                     Equipment                   Logistics                        excess assets*
    30 June 2016                                               Rm           Rm                          Rm            Rm                      Rm
    BUSINESS SEGMENTATION     
    ASSETS     
    Intangible assets                                         196           15                         181             -                       - 
    Less: Allocation of loss on sale from the corporate     (196)            -                           -         (196)                       - 
    transaction     
    Property, plant and equipment                             273          192                          68            13                       - 
    Leasing assets                                          6 382        2 555                       2 760           258                     809
    Other investments and loans                                12            -                          12             -                       - 
     
    Finance lease receivables                                  36            -                           4            32                       - 
    Inventories                                               819          742                          31            46                       - 
    Trade and other receivables and derivatives               883          488                         262           133                       - 
    Operating assets                                        8 405        3 992                       3 318           286                     809
    Deferred tax assets                                        63           40                           7            16                       - 
    Less: Allocation of loss on sale from the corporate      (63)            -                           -          (63)                       - 
    transaction     
    Taxation in advance                                        23            -                           -            23                       - 
    Cash and cash equivalents                                 186           50                          42            94                       - 
    Unallocated loss on sale from the corporate             (487)            -                           -         (487)                       - 
    transaction     
    Total assets                                            8 127        4 082                       3 367         (131)                     809
    LIABILITIES     
    Trade and other payables and derivatives                1 194          609                         352           233                       - 
    Interest-bearing borrowings                             7 092        2 461                       1 868         2 525                     238
    Loans from group entities                             (2 403)       ( 159)                       (132)       (2 112)                       - 
     
    Operating liabilities                                   5 883        2 911                       2 088           646                     238
    Deferred tax liabilities                                  498          161                         330             7                       - 
    Current tax liabilities                                   142           25                          43             -                      74
    Total liabilities                                       6 523        3 097                       2 461           653                     312

* Contract Mining and Plant Rental excess assets comprise excess assets in the South African Contract Mining business (R163 million), the Plant Rental business
(R135 million) and assets and associated liabilities in the Mozambique Benga operation. Non-current leasing assets of R511 million have been included as assets
held for sale and the associated interest-bearing liabilities of R238 million and taxation liabilities of R74 million also separately disclosed.

(5) Fair value hierarchy disclosures
    Valuation methodology
    Level 1 -  valuations with reference to quoted prices in an active market:
    Financial instruments valued with reference to unadjusted quoted prices for identical assets or liabilities in active markets where the quoted price is readily
    available and the price represents actual and regularly occurring market transactions on an arm's length basis.

    Level 2 -  valuations based on observable and unobservable inputs include:
    Financial instruments valued using inputs other than quoted prices as described above for level 1 but which are observable for the asset or liability, either
    directly or indirectly, such as quoted price for similar assets or liabilities in an active market; quoted price for identical or similar assets or liabilities
    in inactive markets; valuation model using observable inputs; and valuation model using inputs derived from/corroborated by observable market data.

    The table below shows the group's financial asset and liabilities that are recognised and subsequently measured at fair value, analysed by valuation technique.

                                                                          Level 1 Level 2   Fair value
30 June 2016                                                                   Rm      Rm           Rm
Financial assets

Available-for-sale investments                                                  -      13            - 
Designated as fair value through profit and loss
-  Derivative financial assets                                                  -      32           32

Total financial assets                                                          -      45           32
Financial liabilities
Financial liabilities designated as fair value through  profit and loss
-  Derivative financial liabilities                                             -       4            - 
Total financial liabilities                                                     -       4            - 

                                                                                  30 June      30 June
                                                                                     2016         2015
                                                                                       Rm           Rm
(6) Impairment of assets  
    Impairment of leasing assets (1)                                                1 351           97
    Impairment of intangible assets (2)                                                11            - 
    Impairment of property, plant and equipment (3)                                    77            - 
    Impairment of investments and loans (4)                                            59            - 
    Total impairments                                                               1 498           97
    Discontinued operations                                                         (945)         (18)
    Continuing operations                                                             553           79

(1) The R1 351 million relates to specific leasing assets which have been written down to their estimated fair-value less costs-to-sell, being their current
    market values. During the year, the group performed a review of the market conditions and underutilised leasing assets in the Contract Mining and Plant Rental
    division. The review led to an impairment of R736 million (30 June 2015: R97 million) being recorded, of which R536 million (30 June 2015: R79 million) has been
    recognised in continuing operations. The leasing assets, equipment and property of the Benga operations were impaired to their estimated fair-value less
    costs-to-sell.

(2) The impairment of intangible assets relates to the write off of previously capitalised costs. This has been included in discontinued operations as it relates
    to the Fleet Management and Logistics division.

(3) The impairment of property , plant and equipment relates to the Contract Mining operation. R60 million has been included in discontinued operations as it
    relates to the write down of assets in the Mozambique Benga operation to fair-value less costs-to-sell. R17 million relates to an impairment of South African
    property.
(4) The impairment of investments and loans is the write off of the amount previously included in long term loan receivables and has been included as discontinued
    operations.

(7) Finance costs including fair value gains
    Net finance costs from continued operations                                         219        200
    Net finance costs from discontinued operations                                      387        453
    Total net finance costs                                                             606        653
             
                                                                                      Cents      Cents
(8) Net asset value per share attributable to owners of the parent                    394.6      921.8

(9) Headline loss per share             
    Continuing operations             
    -  Basic and diluted headline loss per share                                     (17.1)     (18.9)
    Discontinued operations             
    -  Basic and diluted headline (loss) earnings per share                          (12.8)       97.6
    Reconciliation of continuing headline loss per share             
    Basic and diluted loss per share                                                (118.3)     (33.5)
    Profit on sale of property, plant and equipment                                   (1.5)      (0.3)
    Net impairments of assets                                                         141.3       19.9
    Taxation effect                                                                  (38.6)      (5.0)
    Continuing headline loss per share                                               (17.1)     (18.9)
    Reconciliation of discontinued (loss) earnings per share             
    Basic and diluted (loss) earnings per share                                     (458.5)       94.3
             
    Net impairments of assets                                                         241.5          - 
    IFRS 5 fair value adjustment                                                      183.7        4.5
    Taxation effect                                                                    20.5      (1.3)
    Discontinued headline (loss) earnings per share                                  (12.8)       97.6
           
                                                                                    Million    Million
(10) Weighted average number of shares in issue for the year             
     Number of ordinary shares             
     -  in issue                                                                      405.5      405.5
     -  in issue (net of treasury shares)                                             391.3      397.0
     Weighted average number of ordinary shares in issue during the year              391.3      396.6
     -  opening shares net of treasury shares                                         391.1      397.0
     -  disposal of treasury shares                                                     0.2          - 
     -  repurchase of ordinary shares                                                     -      (0.4)
             
     -  Dilutionary effect                                                                -          - 
     Diluted weighted average number of ordinary shares                               391.3      396.6
  
(11) Discontinued operations                                                      Corporate transaction
                                                                                                                                
                                                                                                                                        Contract
                                                                                                                                          Mining
                                                                                                                                       and Plant
                                                                                                         Fleet                            Rental
     CONSOLIDATED DISCONTINUED STATEMENT OF COMPREHENSIVE         Total     Industrial          Management and        Other         discontinued
                                                                             Equipment               Logistics                        operations
     INCOME                                                          Rm             Rm                      Rm           Rm                   Rm
     30 June 2016   
     Revenue                                                      6 566          3 036                   2 113          472                  945
     Net operating expenses                                     (4 672)        (2 111)                 (1 070)        (578)                (914)
     Profit (loss) from operations before depreciation,           1 894            925                   1 043        (106)                   31
     amortisation and recoupments   
     Depreciation and amortisation                              (1 494)          (610)                   (670)         (92)                (121)
     Profit (loss) on disposal of property, plant and                 6              1                     (1)            6                    - 
     equipment   
     Operating profit (loss)                                        406            316                     372        (192)                 (90)
     Net foreign exchange (losses) gains                              -           (37)                       -          (1)                   38
     Net impairment of assets                                     (945)              -                    (11)          (3)                (931)
     Fair value adjustment                                        (719)              -                       -        (719)                    - 
     (Loss) profit before net finance costs                     (1 258)            279                     361        (915)                (983)
     Net finance costs                                            (387)          (148)                   (173)         (35)                 (31)
     (Loss) profit before taxation                              (1 645)            131                     188        (950)              (1 014)
     Income tax                                                   (145)           (37)                    (47)         (57)                  (4)
     (Loss) profit from discontinued operations                 (1 790)             94                     141      (1 007)              (1 018)
   
     Attributable to:   
     Owners of the parent                                       (1 794)             94                     137      (1 007)              (1 018)
     Non-controlling interests                                        4              -                       4            -                    - 
     (Loss) profit from discontinued operations                 (1 790)             94                     141      (1 007)              (1 018)
   
     30 June 2015   
     Revenue                                                      6 662          2 602                   2 019          679                1 362
     Net operating expenses                                     (4 117)        (1 736)                   (945)        (580)                (856)
     Profit from operations before depreciation, amortisation     2 545            866                   1 074           99                  506
     and recoupments   
     Depreciation and amortisation                              (1 612)          (533)                   (703)         (81)                (295)
     Recoupments                                                      -              -                       -            -                    - 
     Operating profit                                               933            333                     371           18                  211
     Net foreign exchange gains                                      14              2                       -            -                   12
     Net impairment of leasing assets                              (18)              -                       -            -                 (18)
     Profit before net finance costs                                929            335                     371           18                  205
     Net finance costs                                            (453)          (154)                   (200)         (42)                 (57)
     Profit (loss) before taxation                                  476            181                     171         (24)                  148
     Income tax                                                    (92)           (50)                    (47)            3                    2
     Profit (loss) from discontinued operations                     384            131                     124         (21)                  150
    
     Attributable to:    
     Owners of the parent                                           374            131                     114         (21)                  150
     Non-controlling interests                                       10              -                      10            -                    - 
     Profit (loss) for the period from discontinued                 384            131                     124         (21)                  150
     operations

CORPORATE TRANSACTION

On 30 June 2016, Eqstra announced the proposed sale of the Fleet Management and Logistics division and the Industrial Equipment division to enX Group Limited.
Shareholders approved the sale at the general meeting held on 22 September 2016.

As part of the corporate transaction, subsidiaries of Eqstra Holdings in the Fleet Management and Logistics and the Industrial Equipment divisions will be
transferred to enX on the effective date, being the date that all conditions are met, These divisions have been disclosed as assets and associated liabilities
held for sale.

The pre-tax IFRS 5 fair value adjustment of R719 million comprises the loss on sale from the corporate transaction amounting to R683 million before taxation of
R63 million (calculated using proceeds of R1 107 million, being the enX Consideration Shares, and the net asset values of the entities being sold as at 30 June
2016) as well as R36 million relating to entities which were discontinued during the year.

Included in Other is the previously reported corporate office segment and entities which were discontinued during the year. The corporate office segment includes
R40 million of transaction related costs.

In line with the group strategy to close or sell non-core businesses, the group closed the Construction Equipment business, following the termination of the Terex
distribution agreement as well as the Air Supreme and Agricultural businesses.
The Commodities business has been disposed of with effect from 1 May 2015.

CONTRACT MINING AND PLANT RENTAL DISCONTINUED OPERATIONS

Eqstra Mozambique
The operations which have ceased in Mozambique with the conclusion of the Benga contract, have been included as discontinued operations. An impairment of R731
million was recognised for leasing assets, loans, property and equipment collectively.
Construction Botswana

In line with the group strategy to close or sell non-core businesses, the Botswana construction business was discontinued.
Inventories have been written down to their net realisable value

Plant Hire
In May 2016, the directors announced a plan to dispose of the Plant Hire business. The disposal is consistent with the group's stated strategy of exiting non-core
loss making businesses. As a result, leasing assets were impaired by R200 million.

(12) Significant judgements and estimates

     Following the turmoil in the mining and resources sector, and in addition to the specific impairments raised related to the relevant Assets Held for Sale, the
     group performed a review of the recoverable amount of the South African Contract Mining cash-generating unit (CGU), a significant CGU of the group. The net
     operating assets of the CGU at 30 June 2016 is R2 362 million (30 June 2015: R2 653 million). The value-in-use for the CGU is calculated at R2 755 million (30
     June 2015: R3 407 million).

     The recoverable amount of this CGU was determined based on a value-in-use calculation which uses cash flow projections based on financial budgets approved by
     the directors covering a five-year period, and a discount rate of 13.22% (2015: 11.94%) per annum.

(13) Related party transactions
     The following intercompany revenue included in each division's revenue: (Rm)   30 June 2016 30 June 2015
     Industrial Equipment                                                                     17           75
     Fleet Management and Logistics                                                           69           83
     Total intergroup revenue eliminated                                                      86          158

(14) Going concern

     The annual financial statements presented for the Eqstra group have been prepared on the assumption that the Eqstra group as a whole will continue to operate
     as a going concern. This assumption is predicated on the enX transaction being implemented in substantially the form approved by shareholders at a general
     meeting on 22 September 2016.

     The enX transaction will result in a cash injection into the group of R1 400m in the form of ordinary share capital of R100m, preference share capital of
     R600m and subordinated debt of R700m. New banking facilities have also been negotiated with a consortium of lenders subject to the transaction being
     implemented and management believe that these facilities will provide adequate financial resources to enable the group to meet its obligations over the next
     twelve months and beyond.

(15) Post-balance sheet events
     Subsequent to year-end, the group's year end was changed to 31 August 2017. Shareholders voted in favour of the corporate transaction with enX Group Limited
     (enX) and in favour of the name change to eXtract Group Limited (eXtract) at the meeting on 22 September 2016. The transaction will result in the issuance of
     101 400 000 ordinary shares (20%) to enX by Eqstra.

(16) The auditors, Deloitte & Touche, have issued their unmodified opinion in terms of International Standards on Auditing (ISA) on the group's consolidated
     financial statements for the year ended 30 June 2016. The audit was conducted in accordance with ISA. A copy of the auditors report together with a copy of
     the audited consolidated financial statements are available for inspection at the company's registered office. These summarised provisional consolidated
     financial statements have been derived from the group's consolidated financial statements and are consistent in all material respects with the group's
     consolidated financial statements. These summarised provisional consolidated financial statements have been audited by the company's auditors who have issued
     an unmodified opinion and the audit report on these summarised provisional consolidated financial statements is available for inspection at the company's
     registered office.

     The auditors' report does not necessarily report on all of the information contained in this announcement/financial report. Shareholders are therefore advised
     that, in order to obtain a full understanding of the nature of the auditor's engagement, they should obtain a copy of the auditor's report, together with the
     financial information from the issuer's registered office. Any reference to future accompanying financial information included in this announcement has not
     been reviewed or reported on by the auditors.

NAME AND REGISTRATION NUMBER
EQSTRA HOLDINGS LIMITED
1998/011672/06
JSE codes: EQS; EQS05; EQS06;
EQS07; EQS08A; EQS09
ISIN: ZAE000117123

REGISTERED OFFICE AND
BUSINESS ADDRESS
61 Maple Street, Pomona, Kempton Park, 1619 PO Box
1050, Bedfordview, 2008

NON-EXECUTIVE DIRECTORS
NP Mageza*(Chairperson), MJ Croucamp*,
VJ Mokoena*, SD Mthembi-Mahanyele*,
AJ Phillips*, TDA Ross*, ZB Swanepoel*
LL von Zeuner*,
(*Independent)

EXECUTIVE DIRECTORS
JL Serfontein (CEO) CA(SA)
DA Austin (CFO)1 CA(SA)
(1Preparer of financial results)

COMPANY SECRETARY
L Möller

TRANSFER SECRETARIES
Computershare Investor Services
Proprietary Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107

SPONSOR
Rand Merchant Bank
(a division of FirstRand Bank Limited)

INVESTOR RELATIONS
FTI Consulting
021 487 9022

www.eqstra.co.za


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