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Unaudited interim results of eXtract Group Limited for the six month period ended 31 December 2016
Extract Group Limited
(Incorporated in the Republic of South Africa )
(Registration number 1998/011672/06)
JSE share code: EXG ISIN: ZA0002223202
UNAUDITED INTERIM RESULTS OF EXTRACT GROUP LIMITED
(FORMERLY EQSTRA HOLDINGS LIMITED)
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2016
INTRODUCTION
The period under review has been eventful and challenging for eXtract Group Limited
("eXtract" or "Group"), with the Group transitioning into its new form and subsequently
changing the strategic direction as led by management and the new board of directors.
The disposal of Fleet Management and Logistics and Industrial Equipment divisions
to enX Group Limited ("enX") was completed and effective from 8 November
2016 and the remaining Group was supported with various mezzanine funding instruments.
("enX transaction").
SALE OF END OF LIFE AND EXCESS ASSETS
On 11 July 2016 shareholders approved the sale of specified excess assets (refer to SENS
announcement dated 11 July 2016 and related circular dated 10 June 2016).
Of the R809 million of contract minning related assets which were classified as assets held for sale
at 30 June 2016, R176 million were sold during the period and subsequent
to 31 December 2016, R196 million of Mozambique Benga assets were sold for which payment has been received.
SAFETY
The Group improved its lost time injury frequency rate to 0.08 (2015: 0.10).
STRATEGIC REVIEW
Over the past six months the operating environment for contract mining has been difficult,
with the group continuing to report operational losses at key operations.
During Q4 2016, the negative impact was further felt by the Boteti contract being
terminated (refer to the SENS announcement dated 5 December 2016) together with the PPM contract
proving to be suboptimal and Tharisa Mining notifying the group of its intention to pursue an owner operator model.
Remaining contracts operate under a satisfactory model and will be carried through until the contracts expire.
These elements naturally led to the board of directors and management performing a
strategic review of the group's business model and contractual arrangements in order
to align the group's capital allocations with the current mining environment. eXtract will
look to allocate capital to areas where the board of directors believe eXtract can deliver
appropriate returns and create shareholder value. Pursuant to this strategic review process detailed below,
a number of key outcomes have been identified and eXtract is currently engaging with
various stakeholders in this regard. Note that a joint category one transaction announcement
released concurrently on SENS with these results contains further information.
Key outcomes of the strategic review include:
- the termination of non-profitable contracts and transitioning the counterparties to
such contracts to an owner/operator model where the contracts and underlying
assets are sold by eXtract to such counterparties as a going concern;
- the disposal of further excess assets;
- significantly reducing the eXtract Group's overhead costs, including a reduction
in headcount;
- changes to the management of eXtract, as below;
- significantly restructuring eXtract's debt levels; and
- exploring a funding model for potential future resources investments.
The approval of this strategy has resulted in the Group impairing a material amount of
the value of leasing assets as the plan is to realise the majority of its assets through
sale as opposed to continuing use.
As part of the strategic review, enX has agreed to convert its mezzanine debt and preference
share instruments in full to equity (excluding the R22 million amount as referred to in the joint
category one transaction announcement released concurrently with these results) and it is the
intention of management to apply all proceeds from asset sales to reduce banking debt
over the next 12 to 18 months.
SOLVENCY AND LIQUIDITY
The board of directors is satisfied that the conversion of the enX mezzanine debt and preference
share instruments to equity places the Group in a position that it is solvent at the reporting date
and for the foreseeable future even though the liabilities are greater than the assets
at 31 December 2016. The conversion, already approved by the enX board of
directors, is subject to shareholder and various other stakeholder approvals which will be
requested imminently. (Refer to the joint category one announcement released on SENS
on 18 April 2017.)
To facilitate the strategic plan, management has concluded a standstill arrangement to
allow for the accelerated transition to an asset and debt light model.
The board of directors is further satisfied that the strategies to address the liquidity and
refinancing risks, including the de-gearing strategy, are on track and are being effectively addressed.
Management has been proactive in addressing the immediate liquidity concerns and the
achievement of the strategic plan is critical to the Group meeting its repayment obligations.
DIVIDEND
The board of directors has not declared a dividend given the Group's performance
and change in strategy.
LOOKING AHEAD
eXtract will continue to focus on these commitments in the short- to medium-term:
- Reduction of external debt;
- Accelerate the execution of the strategic plan;
- Selling excess and end of life assets; and
- Improving the efficiencies of existing contracts.
GOING CONCERN
The interim results presented for the eXtract Group have been prepared on the assumption
that the eXtract Group as a whole will continue to operate as a going concern. This assumption
is predicated on the enX conversion of debt being approved by shareholders, the cash flows presented
to the external funders as part of their 18 month standstill and the execution of the strategic review
initiatives. (For more details on the enX conversion of debt, refer to the joint category one transaction
announcement released concurrently on SENS with these results.)
DIRECTOR CHANGES
The following directors were appointed on 1 November 2016:
- ZB Swanepoel as independent non-executive chairman;
- 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.
The previous board members resigned at the AGM on 24 November 2016.
Further changes were executed with effect from 29 March 2017, where:
- MS Teke has resigned as a director of eXtract. This follows a potential for conflicts of
interest as a result of eXtract's change in business strategy;
- Mr J Colling has stepped down as CEO and will remain available to the Group on a
consultancy basis until 31 May 2017 to assist the board of directors with the transition
to the revised strategy.
- Mr ZB Swanepoel, the current chairman of the board of directors, was appointed as
executive chairman, to oversee the strategic review and the implementation of the
resultant changes;
- Mr CS Halsey, has been appointed as Chief Investment Officer and will also serve as
Interim CEO to oversee operations until a new CEO is appointed.
- Mr SA Nkosi has been appointed as lead independent director.
By order of the board of directors
ZB Swanepoel CS Halsey
Executive Chairman Interim CEO
18 April 2017
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at
Unaudited Unaudited Audited
31 December 31 December 30 June
2016 2015 2016
Rm Rm Rm
ASSETS
Non-current assets 762 8 734 2 201
Intangible assets - 229 37
Property, plant and equipment 85 382 77
Leasing assets 677 8 022 2 044
Deferred tax assets - 83 41
Finance lease receivables - 4 1
Other investments and loans - 14 1
Current assets 1 625 4 720 9 321
Finance lease receivables - 4 1
Other investments and loans - 89 -
Inventories 78 1 108 87
Trade and other receivables and derivatives 515 1 887 952
Taxation in advance - 18 6
Cash and cash equivalents 162 433 148
Assets held for sale(2) 870 1 181 8 127
Total assets 2 387 13 454 11 522
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 1 891 1 839 1 839
Other reserves 374 574 449
(Accumulated loss) retained income (3 256) 445 (688)
(Deficit) equity attributable to owners of
the parent (991) 2 858 1 600
Non-controlling interests - 27 29
Total (deficit) equity (991) 2 885 1 629
Non-current liabilities 2 294 5 819 2 588
Interest-bearing borrowings(3) 2 256 5 212 2 539
Deferred tax liabilities 38 607 49
Current liabilities 1 084 4 750 7 305
Current portion of interest-bearing
borrowings(3) 465 2 333 92
Trade and other payables, provisions and
derivatives 420 1 949 675
Current tax liabilities - 43 15
Liabilities directly associated with assets
held for sale(2) 199 425 6 523
Total equity and liabilities 2 387 13 454 11 522
SUMMARISED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited
for the for the
six months six months Audited
ended ended year-end
31 December 31 December 30 June
2016 2015* 2016*
Rm Rm Rm
Continuing operations
Revenue 1 152 1 240 2 582
Profit from operations before depreciation
and amortisation 200 276 480
Depreciation and amortisation (171) (217) (409)
Operating profit 29 59 71
Net impairment of assets(6) (1 141) (536) (553)
Loss before net finance costs (1 112) (477) (482)
Net finance costs(8) (134) (108) (204)
Finance costs (144) (111) (240)
Finance income 10 3 36
Loss before taxation (1 246) (585) (686)
Income tax (expense)/income (47) 167 175
Loss for the period from continuing
operations (1 293) (418) (511)
Discontinued operations(9)
Loss for the period from discontinued
operations (240) (704) (1 742)
Loss for the period (1 533) (1 122) (2 253)
Attributable to:
Owners of the parent (1 535) (1 124) (2 257)
- Loss for the period from continuing
operations (1 293) (418) (511)
- Loss for the period from discontinued
operations (242) (706) (1 746)
Non-controlling interests 2 2 4
Loss for the period (1 533) (1 122) (2 253)
Cents
Loss per share from continuing operations(11)
- Basic and diluted loss per share (319.4) (106.9) (130.6)
Loss per share from discontinued
operations(11)
- Basic and diluted loss per share (59.8) (180.5) (446.2)
* Amounts re-presented to show comparative results from continuing operations.
SUMMARISED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Unaudited Unaudited
for the for the
six months six months Audited
ended ended year-end
31 December 31 December 30 June
2016 2015 2016
Rm Rm Rm
Loss for the period (1 533) (1 122) (2 253)
Total other comprehensive (loss)
income for the period, net of taxation (55) 241 132
Exchange differences on translation
of foreign subsidiaries (55) 194 124
Net fair value (losses)/gains on cash
flow hedges and other fair value
reserves (-) 47 8
Total comprehensive loss for the
period, net of taxation (1 588) (881) (2 121)
Attributable to:
Owners of the parent (1 590) (883) (2 125)
Non-controlling interests 2 2 4
(1 588) (881) (2 121)
SUMMARISED CONSOLIDATED DISCONTINUED OPERATIONS INCOME STATEMENT
Unaudited Unaudited
for the for the
six months six months Audited
ended ended year-end
31 December 31 December 30 June
2016 2015* 2016*
Rm Rm Rm
Revenue 2 459 3 390 6 948
Profit from operations before
depreciation, amortisation and
recoupments 613 1 083 1 977
Depreciation and amortisation (21) (793) (1 497)
Profit on disposal of property, plant
and equipment - 4 6
Operating profit 592 294 486
Net foreign exchange (losses) gains (24) 13 1
Net impairment of assets(6) (248) (658) (945)
IFRS 5 adjustment(9) (439) - (719)
Loss before net finance costs (119) (351) (1 177)
Net finance costs(8) (130) (208) (402)
Finance costs (231) (324) (653)
Finance income 101 116 251
Loss before taxation (249) (559) (1 579)
Income tax income (expense) 75 (145) (163)
Loss for the period (174) (704) (1 742)
Loss on sale of subsidiaries(9) (3) - -
Deconsolidation of subsidiary(7) (63) - -
Total loss for the period from
discontinued operations (240) (704) (1 742)
* Amounts re-presented to show comparative results from discontinued operations.
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Accum-
ulated
loss) Non-
Stated Other Retained controlling
capital reserves income interest Total
Rm Rm Rm Rm Rm
Balance at 1 July 2015 1 839 330 1 569 32 3 770
Total comprehensive income
for the period - 241 (1 124) 2 (881)
Loss for the period - - (1 124) 2 (1 122)
Other comprehensive income
for the period, net of taxation - 241 - - 241
Net share-based payment
movement - 3 - - 3
Dividends paid - - - (7) (7)
Balance at 31 December 2015 1 839 574 445 27 2 885
Total comprehensive income
for the period - (109) (1 133) 2 (1 240)
Loss for the period - - (1 133) 2 (1 131)
Other comprehensive income
for the period, net of taxation - (109) - - (109)
Net share-based payment
movement - 2 - - 2
Vesting of share incentive
scheme - (1) - - (1)
Goodwill reserve arising on
additional interest in subsidiary - (16) - - (16)
Deferred taxation directly in
equity - (1) - - (1)
Balance at 30 June 2016 1 839 449 (688) 29 1 629
Total comprehensive income
for the period - (55) (1 535) 2 (1 588)
Loss for the period - - (1 535) 2 (1 533)
Other comprehensive income
for the period, net of taxation - (55) - - (55)
Vesting of share incentive
scheme - (4) - - (4)
New issue of stated capital 37 - - - 37
Conversion of treasury shares 15 - - - 15
Dividend paid - - - (2) (2)
Dividend in specie - - (1 022) - (1 022)
Reversal of share-based
payment reserve - (16) 16 - -
Transfer within categories of
reserves - 22 (22) - -
Disposal of subsidiary - (27) - (29) (56)
Deferred taxation directly in
equity - 5 (5) - -
Balance at 31 December 2016 1 891 374 (3 256) - (991)
* On 16 November 2016 101 400 000 shares were issued at R1 each.
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited
for the six for the six
months months Audited
ended ended year-end
31 December 31 December 30 June
2016 2015 2016
Rm Rm Rm
Cash flows from operating activities
Cash generated from operations before
working capital movements 688 1 510 2 606
Working capital movements 697 263 827
Cash generated from operations 1 385 1 773 3 433
Finance income 111 7 45
Finance costs (341) (323) (651)
Taxation paid (29) (24) (101)
Net cash flows from operating activities 1 126 1 433 2 726
Cash flows from investing activities
(Acquisition) disposal of businesses (75) - 42
Net capital expenditure (820) (1 154) (2 295)
Movement in finance lease receivables 36 33 (6)
Proceeds on disposal of other investments
and loans - - 2
Net cash flows from investing activities (859) (1 121) (2 257)
Cash flows from financing activities
Repurchase of non-controlling interest - (16) (16)
Issue of shares 37 - -
Dividends paid (2) (7) (7)
Net decrease in interest-bearing borrowings (447) (91) (324)
Net cash flows from financing activities (412) (114) (347)
Net (decrease) increase in cash and cash
equivalents (145) 198 122
Effect of exchange rate translation on cash
and cash equivalents (5) 32 9
Derecognition of cash and cash equivalents (22) - -
Cash and cash equivalents at beginning
of period 334 203 203
Cash and cash equivalents at end of period 162 433 334
SUMMARISED CONSOLIDATED STATEMENT OF DISCONTINUED CASH FLOWS
Unaudited Unaudited
for the six for the six
months months Audited
ended ended year-end
31 December 31 December 30 June
2016 2015 2016
Rm Rm Rm
Net cash flows from operating activities 1 165 1 114 2 471
Net cash flows from investing activities (680) (847) (1 758)
Net cash flows from financing activities (580) (51) (603)
Net cash outflow (95) 216 110
SEGMENTAL INFORMATION
No segmental statements are disclosed as the group comprises Contract Mining only.
NOTES
(1) Basis of preparation
The unaudited summarised consolidated financial statements for the six months ended
31 December 2016 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 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 Extract's (previously Eqstra Holdings Limited) 2016 annual financial report,
except for the adoption on 1 July 2016 of those new, revised and amended standards and
interpretations detailed therein. These financials have not been reviewed or reported on
by the company's auditors.
The adoption of the new and amended statements of generally accepted accounting
practice, interpretations of statements of generally accepted accounting practice, and
improvements project amendments did not have a material impact on the Group.
Unaudited Unaudited Audited
31 December 31 December 30 June
2016 2015 2016
Rm Rm Rm
(2) Assets classified as held for sale
Leasing assets 870 1 181 809
Corporate transaction disposal group - - 7 318
870 1 181 8 127
Liabilities directly associated with
assets held for sale
Interest-bearing borrowings 151 259 238
Current taxation liabilities 48 147 74
Corporate transaction disposal group - 19 6 211
199 425 6 523
Excess assets comprises leasing assets in all operations (Excluding Benga) of R433 million
(June 2016: R298 million) and assets in the Mozambique Benga operation of R437 million
(30 June 2016: R511 million) which have been included as assets held for sale and the
associated interest-bearing liabilities of R151 million (30 June 2016: R238 million) and
taxation liabilities of R48 million (30 June 2016: R74 million). There were sales of R176 million
during the reporting period to 31 December 2016.
Management believe that the sale of these assets is highly probable within the next 12 months.
Corporate transaction disposal statement of financial position
Disposal
statement
of financial
position Audited
8 November 30 June
2016 2016
Rm Rm
ASSETS
Intangible assets 3 -
Property, plant and equipment 257 273
Leasing assets 5 056 5 573
Other investments and loans 30 12
Finance lease receivables 2 36
Inventories 853 819
Trade and other receivables and derivatives 646 883
Operating assets 6 847 7 596
Taxation in advance 58 23
Cash and cash equivalents 75 186
Unallocated loss on sale from the corporate
transaction (487) (487)
Total assets 6 493 7 318
LIABILITIES
Trade and other payables and derivatives 1 153 1 194
Interest-bearing borrowings 6 575 6 854
Loans due from Contract Mining entities (2 853) (2 403)
Operating liabilities 4 875 5 645
Deferred tax liabilities 411 498
Current tax liabilities 114 68
Total liabilities 5 400 6 211
The sale of the Fleet Management and Logistics division and the Industrial Equipment
division to enX Group Limited took place on 8 November 2016. The disposal balance sheet
is disclosed above.
As part of the corporate transaction, subsidiaries of eXtract Holdings in the Fleet
Management and Logistics and Industrial Equipment divisions were transferred to enX on
the effective date. The assets and associated liabilities were disclosed as held for sale at
30 June 2016.
(3) Interest-bearing borrowings
Unaudited Unaudited Audited
31 December 31 December 30 June
2016 2015 2016
Rm Rm Rm
Facility breakdown
External senior bank debt 465 7 545 236
enX Mezzanine debt 1 656 - -
Preference shares 600 - -
Intercompany loans - - 2 395
2 721 7 545 2 631
The enX transaction resulted in a cash injection in the form of ordinary share capital of
R101 million, preference share capital of R600 million and subordinated Mezzanine debt
of R1 656 million.
31 December 31 December 30 June
2016 2015 2016
Rm Rm Rm
(4) Capital commitments 229 1 738 429
- Contracted 59 239 50
- Authorised by directors but
not contracted 170 1 499 379
Guarantees 19 24 10
The expenditure is substantially for the acquisition and replacement of leasing assets.
Expenditure will be financed from cash generated from operations and existing banking facilities.
(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.
There are no financial asset and liabilities that are recognised and subsequently measured
at fair value, analysed by valuation technique.
31 December 31 December 30 June
2016 2015* 2016*
Rm Rm Rm
(6) Impairment of assets
Impairment of leasing assets(1) 1329 1 194 1 351
Impairment of intangible assets(2) 42 - 11
Impairment of restricted cash(3) 18 - -
Impairment of property, plant and
equipment(4) - - 77
Impairment of investments and loans(5) - - 59
Total impairments 1389 1 194 1 498
Discontinued operations (248) (658) (945)
Continuing operations 1141 536 553
* Amounts re-presented to show comparative results from discontinued operations.
(1) The R1329 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 due to the change in strategy.
(2) The impairment of intangible assets relates to the write-off of previously capitalised costs relating to
various systems which are no longer viable as a result of the strategic plan.
(3) The restricted cash in foreign countries has been impaired due to the uncertainty of repatriation
to South Africa.
(4) The impairment of property, plant and equipment at 30 June 2016 related to the write-down of
assets in the Mozambique Benga operation to fair-value less costs-to-sell (R60 million) and the
impairment of South African property of R17million.
(5) 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) Deconsolidation of subsidiary
Discontinued operations
Gain on deconsolidation of subsidiary 156 - -
Provision for liabilities (Net of expected
proceeds) (67) - -
Impairment of inter-company loans (152) - -
Total (63) - -
The Karowe contract in Botswana was unlawfully terminated and money withheld which
resulted in the Botswana entity being placed in liquidation. The Group is therefore no
longer in control of the subsidiary and it has been deconsolidated.
A deconsolidation gain was offset by the relevant impairment on inter company loans
and provision for liabilities for which guarantees were provided.
(8) Net finance costs including fair
value gains
Net finance costs from continued
operations (134) (108) (204)
Net finance costs from discontinued
operations (130) (208) (402)
Total finance costs (264) (316) (606)
(9) Discontinued operations
CORPORATE TRANSACTION
On 30 June 2016, eXtract 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 eXtract Group in the Fleet Management
and Logistics and the Industrial Equipment divisions were transferred to enX on 8 November
2016, being the effective date on which all conditions were met.
The loss on sale of subsidiaries of R3 million was recognised using the fair value adjusted
purchase price of R1 086 million (being the fair value of the enX consideration shares
received, adjusted for the fair value of the eXtract shares issued to enX) and the net asset
values of the entities being sold as at 8 November 2016.
Depreciation ceased in line with IFRS 5 for the corporate transaction disposal group
resulting in exceptional profitability. This is included in the further IFRS 5 impairment of
R439 million (June 2016: R719 million) during the period.
CONTRACT MINING AND PLANT RENTAL DISCONTINUED OPERATIONS
Eqstra Mozambique
The Benga operations in Mozambique are included as discontinued operations.
Subsequent to 31 December 2016, R196 million of assets have been sold.
Botswana Karowe
This operation has been disclosed as discontinued for both periods prior to deconsolidation.
Plant Rental
The Plant Rental operations were successfully wound down during the period with the
majority of machines sold into the market.
Cents Cents Cents
(10) Net (deficit) asset value per share
attributable to owner of the parent (198.8) 704.8 394.6
(11) Headline earnings per share
Continuing operations
- Basic and diluted headline
earnings per share (116.5) (8.2) (28.8)
Discontinued operations
- Basic and diluted headline
earnings per share 109.1 6.0 (1.0)
Reconciliation of continuing headline
earnings per share
Basic and diluted earnings per share (319.4) (106.9) (130.6)
Net impairments of assets 281.8 137.0 141.3
Taxation effect (78.9) (38.37) (39.6)
Continuing headline earnings per
share (116.5) (8.2) (28.8)
Reconciliation of discontinued
earnings per share
Basic and diluted earnings per share (59.8) (180.5) (446.2)
Profit on sale of property, plant and
equipment and leasing assets - (1.0) (1.5)
Net impairments of assets 61.3 168.2 241.5
IFRS 5 fair value adjustment 108.4 - 183.7
Loss on sale of subsidiaries 0.7 - -
Deconsolidation of subsidiary 15.6 - -
Taxation effect (17.2) 19.3 21.5
Discontinued headline earnings per
share 109.0 6.0 (1.0)
Million Million Million
(12) Weighted average number of shares in
issue for the period
Number of ordinary shares
- in issue 506.9 405.5 405.5
- in issue (net of treasury shares) 498.6 391.3 391.3
Weighted average number of ordinary
shares in issue during the period 404.9 391.2 391.3
- opening shares (net of treasury
shares) 391.3 391.1 391.1
- Additional shares issued 12.8 - -
- disposal of treasury shares 0.8 0.1 0.2
Diluted weighted average number of
ordinary shares 404.9 391.2 391.3
(13) Significant judgements and estimates
Following the turmoil in the mining and resources sector and in addition to the specific
impairments raised, the Group performed
a review of the recoverable amount of the remaining South African Contract Mining
cash-generating unit (CGU), a significant CGU of the Group. The remaining assets value is
deemed to be recoverable based on current operations and the current strategic model. The valuation
of the equipment impaired was based on market values on a normalised sales basis and reflects
management's best estimate of the recoverable amount.
(14) Going concern
The interim results presented for the eXtract Group have been prepared on the assumption
that the eXtract Group as a whole will continue to operate as a going concern. The Board
of Directors have considered all relevant factors at the reporting date in reaching this
conclusion. This assumption is predicated on the enX conversion of debt being approved
by shareholders, the cash flows presented to the external funders as part of their 18 month
standstill and the execution of the strategic review initiatives. (For more details on the enX
conversion of debt, refer to the joint category one transaction announcement released
concurrently with these results.)
(15) Post-balance sheet events
Subsequent to period-end, the Group:
- Sold excess assets in Benga amounting to R196 million;
- Signed an agreement to convert the enX debt to equity subject to shareholder and other
approvals;
- Signed a standstill agreement with external funders;
- Terminated the PPM contract.
(For more details on the enX conversion of debt, please refer to the joint category one
transaction announcement released concurrently with these results.)
NAME AND REGISTRATION NUMBER
Extract Group Limited
1998/011672/06
JSE code: EXG
ISIN: ZAE0002223202
REGISTERED OFFICE AND BUSINESS ADDRESS
61 Maple Street, Pomona, Kempton Park, 1619.
PO Box 1050, Bedfordview, 2008
NON-EXECUTIVE DIRECTORS
JL Serfontein
SA Nkosi*, OM Matloa*
(*Independent)
EXECUTIVE DIRECTORS
ZB Swanepoel(Executive chairman),
CS Halsey (Interim CEO),
DAG Chadinha (CFO)(1) CA(SA)
((1)Preparer of financial results)
COMPANY SECRETARY
L Möller
TRANSFER SECRETARIES
Computershare Investor Services
Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
PO Box 61051, Marshalltown, 2107
SPONSOR
Java Capital
Date: 18/04/2017 03:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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