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eXtract GROUP LIMITED - Unaudited interim results of eXtract Group Limited for the six month period ended 31 December 2016

Release Date: 18/04/2017 15:12
Code(s): EXG     PDF:  
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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




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