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EOH HOLDINGS LIMITED - Unaudited Condensed Consolidated Results for the Six Months Ended 31 January 2018

Release Date: 28/03/2018 08:00
Code(s): EOH     PDF:  
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Unaudited Condensed Consolidated Results for the Six Months Ended 31 January 2018

EOH Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 1998/014669/06
JSE share code: EOH
ISIN code: ZAE000071072

Unaudited Condensed Consolidated Results for the six months ended 31 January 2018

BRINGING SOUTH AFRICAN EXCELLENCE TO THE WORLD

EOH TIMELINE
In 1998 a business model was conceived that would universally meet the needs created by this new revolution and so Enterprise Outsourcing Holdings was born which
was later called EOH. From humble beginnings of 20 staff and one customer in 1998, EOH has grown from strength to strength, to now having a staff complement of over
13 000 and achieving the position of Africa's largest technology service provider.

Coming together was our beginning, keeping together was our progress and working together is our success. Our 20-year long prosperity has been led by our five
philosophies and company purpose. EOH is a people driven business led by a strong leadership team that has executed the true partner for life philosophy daily to
grow EOH into the phenomenal company that it is today. It is imperative to highlight that it is because of our people's meticulous attention to detail and living
our philosophy and purpose that we can celebrate the success of our company. The long road to success is always under construction and EOH will continue to operate
true to its purpose by doing good for our people, customers and partners. May the memories of the past 20 years fuel our spirits to pave the way for another 20
years to come.

REVENUE
R8 354 million
(R7 025 million)*

OPERATING PROFIT
R784 million
(R838 million)*

EBITDA
R1 004 million
(R1 090 million)*

# Results from continuing operations
* Comparatives for the period ended 31 January 2017

About EOH
EOH is the largest technology services company in Africa and has a wide range of solutions in Industry Consulting, IT Services, Software, Industrial Technologies
and Business Process Outsourcing.

EOH's 13 000 staff members deliver these services to over 5 000 large enterprise customers across all major industries throughout South Africa, Africa and the
Middle East. EOH is present in 134 locations in South Africa, and has a growing international footprint with 36 points of presence in the rest of Africa and
internationally. As a proudly South African business, EOH is committed to sustainable transformation, making a positive, meaningful contribution to society, and is
a Level 1 Broad-based Black Economic Empowerment (BBBEE) contributor.

The EOH Purpose
To provide the technology, knowledge, skills and organisational ability critical to the development and growth of the markets we serve
To be an ethical and relevant force for good and to play a positive role in society, beyond normal business practice

The EOH Philosophy
Best People
To attract, develop and retain the best people led by great leaders

Partner for Life
To nurture lifelong partnerships with our customers and business partners

Right 1st Time
To ensure professional planning and execution in all that we do

Sustainable Transformation
To transform and celebrate diversity

Lead and Grow
Strive to be number one in every domain in which we operate whilst remaining entrepreneurial

Current operating model
EOH's operating model is two dimensional, focused on key business areas and industry verticals. EOH offers solutions across all major industries through a simple
'Design, Build and Operate' model and is able to offer its customers tailored, flexible and robust solutions through its deep industry knowledge and expertise. The
current business segments of the Group have been identified based on the nature of the major business activities of EOH. The services and solutions in each segment
are outlined below.

IT Services                     IT consulting services; systems integration; IT managed services; application support; IT management; software development, implementation and
                                integration services; information services; network solutions; IT security solutions; cloud solutions and digital solutions; IT hardware,
                                infrastructure-as-a-service.

Software                        Software sales and maintenance revenue for vendor owned software and EOH's own niche software.

Industrial Technologies         Sale of services, products, software and technology solutions relating to industrial automation; data centre and connectivity solutions;
                                energy services; water technology services and solutions; intelligent transport solutions; safety and security solutions services and
                                infrastructure; and environmental management solutions.

Business Process Outsourcing    Sale of services and technology solutions relating to Human Capital Solutions, claims and payment processes, finance and admin
                                services; and outsourced marketing services.

Future operating model
EOH has announced it's growth strategy, establishing duel growth platforms and forming two independent businesses, each with its own distinct identity and brand,
growth strategy, go-to-market approach, business model and culture.

COMMENTARY
The recent political leadership changes in South Africa has seen the country enter a phase filled with a renewed sense of hope and optimism. Prior to this, the
period under review was characterised by difficult trading conditions, compounded by a unique set of challenges that EOH had to overcome during the period. EOH
welcomes the "dawn of a new era" and enters the next period with confidence.

Business Performance
The combination of the macro-economic environment and the adverse, unfounded media coverage that EOH received, temporarily affected the Group's position in the
market. Consequently, EOH has delivered results reflective of the above for the period under review. Despite these market conditions, all areas of the business
coped relatively well. However the public sector business did have a particularly tough period as a result of the political uncertainty, squeeze on public sector
funding and delays in sign-offs as well as the awarding of contracts. Payment practices from the public sector over the past year were poor, however we have seen
a marked improvement over the last two months.

EOH adopted a deliberate customer retention strategy which resulted in some margin sacrifice. As a result of this, the Group has retained all major customers and
customer contracts, gaining market-share in the process. Since February 2018, there has been a positive shift in the market towards EOH, resulting in a normalising
of the environment and client engagements. These are strong indications that margins will normalise in the second half of the year as stability returns and business
confidence grows.

The Group's overall resilience during this period is attributable to its broad solutions offering, collaborative business model, skilled people and diverse customer
base. During this period, EOH has continued to develop new solutions and service offerings to meet the needs of customers - particularly in the area of new
generation digital solutions.

Revenue for the six month period has increased in all areas of the business. Growth has been focused on existing business which has resulted in organic growth
accounting for 71% of the overall revenue growth. 85% of EOH's revenue is derived from within South Africa.

During the six months under review, EOH unwound the original acquisition of the GCT Group of companies through a 'sell-back' agreement effective 31 October 2017.
This had a material impact on the results of the Group due to a once off, non-cash reduction in consolidated earnings after tax of R400 million. This has had a
negative impact on EPS.

Financial results
EOH's revenue from continuing operations grew by 19% to R8 354 million (2017: R7 025 million) as a result of increased activity at EOH's existing customers. Revenue
from services accounts for 84% of total revenue, a significant portion of which is annuity revenue, based on multiple year contracts.

Operating profit from continuing operations amounted to R784 million (2017: R838 million).

EBITDA for the period amounted R1 004 million (2017: R1 090 million). Headline earnings per share (HEPS) and Earnings per share (EPS) from continuing operations was
314 cents (2017: 415 cents) and 320 cents (2017: 416 cents) respectively.

Cash generated by operations before changes in working capital was R1 054 million. Working capital has increased by R995 million as a result of growth funding;
increased work-in-progress associated with ongoing long-term projects; slower cash collections particularly from the public sector. This trend has begun to change
following the period under review, and since 1 February 2018, the Group has received payments totalling over R500 million from outstanding public sector debtors.

Cash outflows for financing activities relate to the payment to vendors for acquisition (R369 million); dividends (R312 million) and repayments on amortised
medium-term interest-bearing debt (R275 million).

With the normalising of our environment, an emphasis on organic growth, and stringent working capital management, the Board is confident of improved margins and a
higher cash conversion rate moving forward.

Operational reviews
Below is an overview of the revenue and EBITDA of the reporting segments of EOH. The combined revenue derived from services is R7 002 million for the period which
represents 84% of EOH's total revenue.

Information Technology businesses (incorporating IT Services and Software)
The ICT business remains strong and fairly resilient. Customers are continuing to spend on maintaining their legacy systems; integrating with best of breed
applications; and investing in new generation digital technologies. Significant investments in technology slowed during the period but should pick up in the short
to medium-term. There is a move to cloud-based infrastructure solutions and infrastructure as a service.

Software sales increased for the period with a different mix between third-party software and EOH's niche software as compared with the previous period.
Revenue and EBITDA from continuing operations*

Figures in Rand thousand  Unaudited for the       Reviewed for           Audited
                              six months to  the six months to  twelve months to
                            31 January 2018    31 January 2017      31 July 2017
Revenue
IT Services#                      3 705 643          3 045 228         6 504 720
Software                          1 351 317          1 144 477         2 239 273
Industrial Technologies           1 880 564          1 528 906         3 703 629
BPO                               1 416 082          1 306 214         2 680 440
                                  8 353 606          7 024 825        15 128 062
EBITDA
IT Services#                        448 602            409 127           921 926
Software                            255 309            293 864           544 637
Industrial Technologies             153 588            217 948           448 740
BPO                                 146 921            169 421           364 699
                                  1 004 420          1 090 360         2 280 002

* Comparative figures previously reported have been amended to reflect continuing operations
# IT Services includes IT Infrastructure

The growth drivers in this division are transformational outsourcing, ERP upgrades and re-implementation, digital transformation, new digital technologies and
solutions, application development, Internet of Things (IoT), Big Data, analytics and software.

Industrial Technologies
Revenue is up primarily as a result of water technology engagements and continued work on existing projects (which are not customer dependent) that have been
delayed. Long delays in the awarding of energy related contracts remains a concern and has had an impact on the profitability in the energy cluster. The anticipated
awarding of these contracts has highlighted the need to retain critical skills. With the stabilisation of the broader political and economic environment, the
outlook is more promising.

Growth drivers include smart city initiatives, smart water technologies and solutions, industrial IoT, energy management and efficiency programmes, broadband
infrastructure, public safety and security solutions and intelligent transport technology solutions.

Business Process Outsourcing (BPO)
The majority of BPO engagements are multiple year contracts with a significant portion of revenue being annuity based, where certain annual renewals resulted in
some margin sacrifice. The major growth drivers remain the complexity of solutions and the constant change in the regulatory environment, which makes it easier for
customers to take the decision to outsource these processes to highly skilled technology service providers like EOH.

Growth Strategy
During the last quarter of 2017, the Group executive initiated a strategic review of the business. The aim of the review was to define a growth strategy aimed
at simplifying the Group's business model, enhancing effectiveness, improving commercial agility and driving optimal business performance well into the future.
EOH will establish dual growth platforms by forming two independent businesses, each with its own distinct identity and brand; growth strategy; go-to-market
approach; business model and culture.

The first business will trade under the EOH brand and focus on ICT services and solutions. It is a highly efficient integrated business with cross-industry IP; has
an integrated go-to-market strategy focused on organic growth driven by new generation digital technologies.

The second business (Newco - to be named and launched in April 2018) is characterised by a high degree of specialisation in each business area; it has domain
specific IP; each business area is less integrated, operates relatively autonomously, operates in high growth industries and is differentiated by its domain
specific offerings. Growth will be driven by both acquisitions and organically.

The benefit of having two different businesses will enable each business to realise its full potential with clarity of brand and identity; a simplified business
model, reduced complexity and cost; greater oversight and stronger governance; increased agility; and the reversal of dis-economies of scale.

Strategic long term partnership with Lebashe
To facilitate growth, remain relevant and continue to promote black economic empowerment, EOH has signed a long-term partnership with Lebashe, a 100% black-owned
investment holding company.

The strategic alignment of Lebashe and EOH's interests through an equity transaction presents an opportunity for both parties to jointly pursue growth opportunities
to the benefit of both.

The transaction will result in an equity investment by Lebashe of R250 million and the provision of a funding facility of R3 billion. EOH will have access to such
facility for growth opportunities whilst significantly increasing its B-BBEE ownership by an additional 20.3%, taking the overall black ownership in the Group to
over 51%.

Transformation
Sustainable Transformation is one of EOH's key business philosophies. EOH's approach is underpinned by our strong appreciation that South Africa's development and
growth is the responsibility of both government and business. It is our belief that people, business and the community are integrally linked; meaningfully
contributing to sustainable transformation in South Africa which is fundamental to achieving a more equal society and a stable growing economy.

EOH is certified as a Large Enterprise B-BBEE Level 1 Contributor with black economic interest voting rights at 30.2% (This will be over 51% after the partnership
with Lebashe is finalised).

EOH is committed to transformation through its Youth Job Creation Initiative; continuing to increase diversity in all levels of the Group; increasing black
ownership; enterprise development programmes; supplier and preferential procurement initiatives and increasing its spend on skills development.

Corporate social responsibility and EOH's Youth Job creation initiative
EOH understands that youth development is paramount to a prosperous South Africa. To this end, EOH's Corporate Social Investment ('CSI') activities include
programmes and initiatives focused on the youth. These programmes include financial support for the Maths Centre; support for the child and youth development
programmes of Afrika Tikkun; and a partnership with the South African Business Coalition on Health and AIDS (SABCOHA).

The EOH Youth Job Creation Initiative has grown from strength to strength since its inception in 2012. Initiated by EOH's founder and Chairman, Asher Bohbot, this
initiative is deeply entrenched in EOH. Since 2012, in partnership with customers and business partners, over 35 000 learners and graduates have been reached, with
most of them completing learnership and internship programmes. Lives are changed when business gets involved.

Of the individuals who completed the programme, 83% have been employed by EOH or one of its business partners and participating customers.

Sustainable business
EOH's sustainability strategy is founded on its guiding philosophies. These philosophies demonstrate EOH's commitment to sustainability by making a meaningful
contribution to transformation and Broad Based Black Economic Empowerment in South Africa; by being a responsible employer; delivering excellent service to
customers; by being ethical and fair in all business relationships and by maintaining a low environmental footprint.

Corporate governance
EOH adheres to the King IV corporate governance principles. The Board is committed to high levels of corporate governance and has implemented and continues to
refine structures, policies and procedures aimed at strengthening governance throughout EOH. Following the review of EOH's Governance Framework, by EOH's
Governance, Risk and Compliance Function, Chair of the Audit Committee and external advisers, Edward Nathan Sonnenberg (ENS), the Group strengthened the overall
Governance Framework to ensure that it is even more resilient and robust.

Corporate governance is integral to EOH's business philosophy of ethical leadership. EOH has a zero tolerance policy towards unethical behaviour in line with its
values.

Outlook
Whilst the first half of 2018 has been challenging, the Group looks forward to a stronger second half.

The Group will continue to develop new services, products and solutions; meet customers' ever-increasing technology needs; partner with new vendors both locally and
abroad; build stronger partnerships with existing customers and provide more of their technology needs through the more focused 'go-to-market' approach of the two
new businesses. We will continue to develop, distribute and implement EOH's niche software and own IP solutions across EOH's existing footprint and in new
territories.

The implementation of EOH's strategy - with two distinct growth platforms - each highly focused, will facilitate enhanced growth from each of the businesses. With
the partnership with Lebashe and the enhanced empowerment credentials, EOH has the ability to compete more effectively in a very competitive market. These two
significant developments have served to energise the people across the business, providing clarity and direction for the future. This, coupled with a stable
economic and political environment, provides the platform for continued growth, a more efficient and cost-effective organisation, increased profitability and
improved margins.

Approved on behalf of the Board of directors of EOH ('the Board'),
Zunaid Mayet
Chief Executive Officer
26 March 2018


CONSOLIDATED STATEMENT OF PROFIT OR LOSS 
for the six months 31 January 2018

Figures in Rand thousand                                                    Notes      Unaudited for       Reviewed for       Audited
                                                                                   the six months to  the six months to  12 months to
                                                                                     31 January 2018   31 January 2017*  31 July 2017
Continuing operations
Revenue                                                                                    8 353 606          7 024 825    15 128 062
Cost of sales                                                                             (5 671 326)        (4 651 086)  (10 225 139)
Gross profit                                                                               2 682 280          2 373 739     4 902 923
Operating expenses*                                                                       (1 898 096)        (1 535 902)   (3 167 381)
Operating profit before interest and  equity-accounted profits                 14            784 184            837 837     1 735 542
Investment income                                                                             35 729             28 784        70 321
Share of equity-accounted profits                                               8              6 371             35 179        39 241
Finance costs*                                                                              (176 548)          (104 639)     (259 614)
Profit before taxation                                                                       649 736            797 161     1 585 490
Taxation                                                                                    (186 344)          (231 627)     (462 009)
Profit for the period from continuing operations                                             463 392            565 534     1 123 481
(Loss)/profit for the period from discontinued operation                       15           (392 450)            31 947        49 602
Profit for the period                                                                         70 942            597 481     1 173 083
Profit attributable to:
Owners of the EOH Holdings Limited                                                            67 495            596 610     1 164 234
Non-controlling interest                                                                       3 447                871         8 849
Earnings per share
From continuing operations
Earnings per share (cents)                                                                       320                416           794
Diluted earnings per share (cents)                                                               310                393           771
Including discontinued operations
Earnings per share (cents)                                                                        47                439           825
Diluted earnings per share (cents)                                                                45                415           801


CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME 
for the six months 31 January 2018

Figures in Rand thousand                                            Unaudited for       Reviewed for            Audited
                                                                the six months to  the six months to       12 months to
                                                                  31 January 2018   31 January 2017*       31 July 2017
Profit for the period                                                      70 942            597 481          1 173 083
Item that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations                   (152 600)           (49 772)           (44 627)
Total comprehensive income for the period                                 (81 658)           547 709          1 128 456
Total comprehensive income attributable to:
Owners of the EOH Holdings Limited                                        (83 871)           546 838          1 121 277
Non-controlling interest                                                    2 213                871              7 179

* The comparative amounts for 31 January 2017 have been reclassified following recommendations emanating from the JSE's proactive monitoring process. The
impact resulted in no change to profit before taxation nor cash flows from operating activities. An amount of R27,8 million was reclassified from 'finance costs'
to 'operating expenses' under 'fair value loss/(gain) on remeasurement of contingent consideration'.


HEADLINE EARNINGS
for the six months 31 January 2018

Figures in Rand thousand                                                         Unaudited for       Reviewed for            Audited
                                                                             the six months to  the six months to       12 months to
                                                                               31 January 2018    31 January 2017       31 July 2017
Headline earnings reconciliation (R'000)
Profit attributable to owners of EOH Holdings Limited                                   67 495            596 610          1 164 234
Adjusted for:
Loss/(gain) on disposal of subsidiaries and property,
plant and equipment and other financial  assets                                        384 251             (1 489)             3 007
Gain on bargain purchase                                                                (7 988)                 -                  -
Impairment of assets                                                                         -                  -              9 784
Total tax effects of adjustments                                                        14 676                417             (3 581)
Headline earnings                                                                      458 434            595 538          1 173 444
Headline earnings per share
From continuing operations
Headline earnings per share (cents)                                                        314                415                797
Diluted headline earnings per share (cents)                                                304                392                773
Including discontinued operations
Headline earnings per share (cents)                                                        319                438                832
Diluted headline earnings per share (cents)                                                309                415                808
Ordinary shares (000)
Total number of shares in issue                                                        152 009            148 060            150 095
Weighted average number of shares in issue                                             143 765            135 869            141 072
Weighted average diluted number of shares in  issue                                    148 349            143 606            145 300


CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
as at 31 January 2018

Figures in Rand thousand                                                                 Notes       Unaudited at        Reviewed at    Audited at
                                                                                                  31 January 2018    31 January 2017  31 July 2017
Assets
Non-current assets
Property, plant and equipment                                                                5            683 249            582 543       677 719
Goodwill and intangible assets                                                                          5 529 360          5 703 334     6 074 699
Goodwill                                                                                     6          4 335 125          4 328 894     4 625 403
Intangible assets                                                                            7          1 194 235          1 374 440     1 449 296
Equity-accounted investments                                                                 8            762 530            754 687       847 917
Other financial assets                                                                       9            477 952            284 771       214 156
Deferred taxation                                                                                         294 341            187 647       196 764
Finance lease receivables                                                                                 154 724            182 837       169 611
                                                                                                        7 902 156          7 695 819     8 180 866
Current assets
Inventory                                                                                   10            468 392            532 605       599 764
Other financial assets                                                                       9            406 118            103 233       141 112
Current taxation receivable                                                                               101 489             34 477        84 383
Finance lease receivables                                                                                  66 978             85 479        74 610
Trade and other receivables                                                                 11          5 921 302          4 276 190     5 132 697
Cash and cash equivalents                                                                               1 301 951          2 052 790     2 506 551
                                                                                                        8 266 230          7 084 774     8 539 117
Total assets                                                                                           16 168 386         14 780 593    16 719 983
Equity and liabilities
Equity
Equity attributable to the owners of EOH  Holdings Limited                                              8 221 402          7 860 469     8 505 188
Non-controlling interest                                                                                   30 448             20 558        56 416
                                                                                                        8 251 850          7 881 027     8 561 604
Liabilities
Non-current liabilities
Other financial liabilities                                                                 12          3 115 042          2 222 378     3 017 416
Finance lease payables                                                                                     65 550             57 479        65 594
Deferred taxation                                                                                         450 142            356 212       406 132
                                                                                                        3 630 734          2 636 069     3 489 142
Current liabilities
Other financial liabilities                                                                 12          1 317 710          1 610 711     1 523 676
Current taxation payable                                                                                  149 446            208 507       148 182
Finance lease payables                                                                                     38 815             41 603        41 187
Trade and other payables                                                                    13          2 324 260          1 853 094     2 466 647
Deferred income                                                                                           455 571            549 582       489 545
                                                                                                        4 285 802          4 263 497     4 669 237
Total liabilities                                                                                       7 916 536          6 899 566     8 158 379
Total equity and liabilities                                                                           16 168 386         14 780 593    16 719 983


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
for the six months ended 31 January 2018

Figures in Rand thousand                                                                Stated          Shares to              Other      Retained          Non-        Total
                                                                                       capital          be issued           reserves      earnings   controlling       equity
                                                                                                       to vendors                                       interest
Audited balance at 1 August 2016                                                     2 263 307          1 164 870            603 015     2 544 975         9 678    6 585 845
Profit for the period                                                                                                                      596 610           871      597 481
Other comprehensive income                                                                                                   (48 211)                     (1 561)     (49 772)
Issue of shares                                                                        922 863           (314 973)                                                    607 890
Non-controlling interest acquired                                                                                                             (570)       11 570       11 000
Movement in treasury shares                                                            (65 439)                                5 677                                  (59 762)
Remaining shares to be issued*                                                                            398 581                                                     398 581
Share-based payments                                                                                                          42 800                                   42 800
Dividends                                                                                                                                 (253 036)                  (253 036)
Reviewed balance at 31 January 2017                                                  3 120 731          1 248 478            603 281     2 887 979        20 558    7 881 027
Profit for the period                                                                                                                      567 624         7 978      575 602
Other comprehensive income                                                                                                     5 255                        (110)       5 145
Issue of shares                                                                        271 946           (247 125)                                                     24 821
Non-controlling interest acquired                                                                                                          (12 011)       27 990       15 979
Movement in treasury shares                                                            (58 999)                                5 210                                  (53 789)
Remaining shares to be issued*                                                                             60 661                                                      60 661
Transfer within equity                                                                                    (48 205)                          48 205                          -
Share-based payments                                                                                                          52 191                                   52 191
Dividends                                                                                                                                      (33)                       (33)
Audited balance at 31 July 2017                                                      3 333 678          1 013 809            665 937     3 491 764        56 416    8 561 604
Profit for the period                                                                                                                       67 495         3 447       70 942
Other comprehensive income                                                                                                  (151 366)                     (1 234)    (152 600)
Issue of shares                                                                        162 950           (128 479)                                                     34 471
Non-controlling interest acquired                                                        1 000                                             (57 410)      (28 181)     (84 591)
Movement in treasury shares                                                           (120 955)                                  670                                 (120 285)
Remaining shares to be issued*                                                                            280 603                                                     280 603
Consideration - EOH shares forfeited                                                                      (74 549)                                                    (74 549)
Transfer within equity                                                                                   (207 882)                         207 882                          -
Share-based payments                                                                                                          47 975                                   47 975
Dividends                                                                                                                                 (311 720)                  (311 720)
Unaudited balance at 31 January 2018                                                 3 376 673            883 502            563 216     3 398 011        30 448    8 251 850

* Remaining shares to be issued to vendors


CONSOLIDATED STATEMENT OF CASH FLOWS 
for the six months ended 31 January 2018

Figures in Rand thousand                                                                 Notes      Unaudited for       Reviewed for       Audited
                                                                                                the six months to  the six months to  12 months to
                                                                                                  31 January 2018    31 January 2017  31 July 2017
Cash flows from operating activities
Cash generated before working capital changes                                                           1 054 455          1 117 654     2 298 320
Working capital changes                                                                                  (995 074)          (624 585)     (984 256)
Cash generated from operations                                                              17             59 381            493 069     1 314 064
Investment income                                                                                          34 163             29 969        72 681
Finance costs                                                                                            (132 684)           (93 383)     (201 715)
Taxation paid                                                                                            (207 486)          (218 055)     (524 111)
Net cash (outflow)/inflow from operating activities                                                      (246 626)           211 600       660 919
Net cash outflow from investing activities                                                               (231 912)          (214 159)     (488 664)
Additions to property, plant and equipment                                                                (88 649)           (55 615)     (231 121)
Proceeds on the sale of property, plant and equipment and intangible assets                                35 193             14 278        44 306
Intangible assets acquired                                                                               (124 509)          (129 757)     (284 419)
Net cash (outflow)/inflow from acquisition of  businesses                                   18            (16 767)            14 200        46 037
Cash outflow on acquisition of equity accounted investments                                                     -            (51 867)      (91 377)
Cash (outflow)/inflow relating to financial assets                                                        (37 180)            (5 398)       27 910
Net cash (outflow)/inflow from financing activities                                                      (686 199)           122 806       400 497
Proceeds from the issue of shares                                                                           7 769            580 904       613 213
Proceeds from other financial liabilities                                                                 504 401            535 566     1 293 455
Repayment of other financial liabilities                                                                 (711 592)          (638 565)   (1 030 810)
Purchases of treasury shares                                                                             (141 295)           (57 939)     (171 941)
Finance lease payments                                                                                    (33 817)           (44 173)      (50 401)
Dividends paid                                                                                           (311 665)          (252 987)     (253 019)
Net (decrease)/increase in cash and  cash equivalents                                                  (1 164 737)           120 247       572 752
Foreign currency translation                                                                              (39 863)           (16 856)      (15 600)
Cash and cash equivalents at the beginning  of the period                                               2 506 551          1 949 399     1 949 399
Cash and cash equivalents at the end of the period                                                      1 301 951          2 052 790     2 506 551


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
for the six months ended 31 January 2018

1 Reporting entity
EOH Holdings Limited ('the company') is a holding company domiciled in South Africa, listed on the JSE Limited under the category Technology: Software and Computer
Services. The condensed consolidated financial statements of the company comprise the company and its subsidiaries (together referred to as 'the Group' or 'EOH')
and the Group's interests in associates and joint ventures. 

2 Statement of compliance
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting, 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,
the Listings Requirements of JSE Limited and the Companies Act of South Africa.

3 Basis of preparation
The accounting policies applied in the presentation of the condensed consolidated financial statements are consistent with those applied for the year ended 31 July
2017, except for the new standards that became effective for the Group's financial period beginning 1 August 2017.

The condensed consolidated financial statements have not been audited or reviewed by the Group's external auditors.

The condensed consolidated financial statements have been prepared on the historical cost basis, under the supervision of John King CA(SA), Group Financial
Director.

4 Changes in accounting policies
The Group adopted the amendments to IAS 7 - Statement of Cash Flows, including any consequential amendment to other standards, with a date of initial application
of 1 August 2017.

The adoption of the amended standard did not have a significant impact on the Group's condensed consolidated financial statements.

                                                              Figures in Rand thousand            Notes    Unaudited at      Reviewed at    Audited at
                                                                                                        31 January 2018  31 January 2017  31 July 2017
5  Property, plant and equipment
   Opening balance                                                                                              677 719          492 221       492 221
   Additions                                                                                                    117 454           94 104       271 740
   Acquired in business combinations                                                                18           13 517           74 275       131 987
   Foreign currency translation                                                                                  (1 381)             136          (227)
   Disposals                                                                                                    (42 489)         (12 837)      (47 313)
   Depreciation                                                                                                 (81 571)         (65 356)     (170 689)
   Closing balance                                                                                              683 249          582 543       677 719

6  Goodwill
   Opening balance                                                                                            4 625 403        3 894 720     3 894 720
   Acquired in business combinations                                                                18          347 998          440 703       743 561
   Foreign currency translation                                                                                 (30 292)          (6 529)      (12 878)
   Disposals                                                                                                   (607 984)               -             -
   Closing balance                                                                                            4 335 125        4 328 894     4 625 403

7  Intangible assets
   Opening balance                                                                                            1 449 296        1 249 522     1 249 522
   Additions                                                                                                    124 509          129 712       284 419
   Acquired in business combinations                                                                18          126 716          126 815       186 236
   Foreign currency translation                                                                                  (7 807)          (3 427)        5 727
   Disposals                                                                                                   (378 010)               -             -
   Amortisation                                                                                                (120 469)        (128 182)     (276 608)
   Closing balance                                                                                            1 194 235        1 374 440     1 449 296

8  Equity-accounted investments
   Opening balance                                                                                              847 917          626 085       626 085
   Additions                                                                                                          -          132 690       219 678
   Foreign currency translation                                                                                 (91 758)         (39 267)      (37 087)
   Share of equity-accounted profits                                                                              6 371           35 179        39 241
   Closing balance                                                                                              762 530          754 687       847 917


Figures in Rand thousand                                                                  Unaudited at      Reviewed at       Audited at
                                                                                       31 January 2018  31 January 2017     31 July 2017
9  Other financial assets
   Other financial assets carried at fair value through profit or loss                          84 000          163 739           78 959
   Investment in 9% of Gibela Rail Transport Consortium Proprietary Limited                     39 462           27 462           39 462
   Enterprise development loans                                                                 92 027           58 847           92 201
    The loans' maturity dates range between one and five years.
   Vendor loans and receivables                                                                 63 969           76 117           58 270
    The loans' maturity dates range between one and five years.
   CA Incorporated Limited - multi-year contracts                                                4 276            3 639            3 477
    The loans' maturity dates range between one and two years.
   Loans to related parties                                                                    106 756           52 488           82 624
    These loans are interest-free and repayable  on demand
   Interest-free loan repayable before 31 October 2018                                         128 000                -                -
   Return of shares issued to former shareholders                                               87 575                -                -
   Loans repayable in three to five years bearing interest at a rate of 10% per annum          277 675                -                -
   Other loans and receivables                                                                     330            5 712              275
    The loans are unsecured, interest-free and have  no fixed terms of repayment
                                                                                               884 070          388 004          355 268
   Non-current other financial assets                                                          477 952          284 771          214 156
   Current other financial assets                                                              406 118          103 233          141 112
                                                                                               884 070          388 004          355 268
   Financial instruments
   Loans and receivables                                                                       760 608          196 803          276 309
   Financial assets carried at fair value through profit  or loss                              123 462          191 201           78 959
                                                                                               884 070          388 004          355 268

Figures in Rand thousand                                                                   Unaudited at      Reviewed at       Audited at
                                                                                        31 January 2018  31 January 2017     31 July 2017
10  Inventory
    Finished goods                                                                              434 164          492 453          568 024
    Consumables                                                                                   6 666           29 022           23 308
    Work in progress                                                                             41 359           27 563           28 396
                                                                                                482 189          549 038          619 728
    Inventory write-downs                                                                       (13 797)         (16 433)         (19 964)
                                                                                                468 392          532 605          599 764

    Cost of goods sold during the year amounted to:                                           1 380 626        1 128 892        2 478 318

11  Trade and other receivables
    Financial instruments                                                                     5 624 339        4 077 589        4 867 742
    Trade debtors                                                                             3 805 760        3 003 711        3 416 075
    Work in progress                                                                          1 743 841          999 243        1 368 571
    Other receivables                                                                            74 738           74 635           83 096
    Non-financial instruments                                                                   296 963          198 601          264 955
    Prepayments                                                                                 213 359          172 768          218 411
    VAT receivable                                                                               37 961           20 934           24 724
    Other receivables                                                                            45 643            4 899           21 820

                                                                                              5 921 302        4 276 190        5 132 697

Figures in Rand thousand                                                                   Unaudited at      Reviewed at       Audited at
                                                                                        31 January 2018  31 January 2017     31 July 2017
12  Other financial liabilities
    Interest bearing liabilities                                                              3 529 770        2 592 906        3 298 497
    Interest bearing bank loans secured by trade receivables                                  2 964 406          465 251        2 681 237
    Unsecured interest bearing bank loans                                                       529 793        2 076 618          544 578
    Interest bearing bank loans secured by  certain property                                     35 571           51 037           72 682
    Non-interest bearing liabilities                                                            902 981        1 240 183        1 242 595
    Vendors for acquisition                                                                     824 129        1 169 217        1 167 453
    Other non-interest bearing liabilities                                                       78 852           70 966           75 142

                                                                                              4 432 751        3 833 089        4 541 092
    Non-current financial liabilities                                                         3 115 042        2 222 378        3 017 416
    Current financial liabilities                                                             1 317 710        1 610 711        1 523 676
                                                                                              4 432 752        3 833 089        4 541 092
    Financial instruments
    Measured at amortised cost                                                                3 608 623        2 663 872        3 373 639
    Financial liabilities carried at fair value through profit or loss                          824 129        1 169 217        1 167 453
                                                                                              4 432 752        3 833 089        4 541 092
    Vendors for acquisition                                                                     824 129        1 169 217        1 167 453
    Non-current financial liabilities                                                           151 008          467 234          230 616
    Current financial liabilities                                                               673 121          701 983          936 837


13  Trade and other payables
    Financial instruments                                                                     1 728 437        1 322 743        1 758 664
    Trade payables                                                                              952 657          717 332        1 113 313
    Other accrued expenses                                                                      734 961          591 056          643 839
    Other payables                                                                               40 819           14 355            1 512
    Non-financial instruments                                                                   595 823          530 351          707 983
    VAT                                                                                         128 495          104 488          119 645
    Payroll accruals                                                                            467 328          425 863          588 338

                                                                                              2 324 260        1 853 094        2 466 647

Figures in Rand thousand                                                                         Unaudited at       Reviewed at    Audited at
                                                                                              31 January 2018  31 January 2017*  31 July 2017
14  Operating profit before interest
    EBITDA from continuing operations
    Operating profit before interest and equity-accounted profits from continuing operations          784 184           837 837     1 735 542
    Equity-accounted profits                                                                            6 371            35 179        39 241
    Amortisation from continuing operations                                                           131 265           150 615       321 474
    Depreciation from continuing operations                                                            82 600            66 729       173 961
    Impairment of assets                                                                                    -                 -         9 784
                                                                                                    1 004 420         1 090 360     2 280 002
    Operating profit before interest after taking into account, the following:
    Amortisation                                                                                      120 470           128 182       276 608
    Amortisation included in cost of sales                                                             19 895             9 880        20 257
    Amortisation not included in cost of sales                                                        100 575           118 302       256 351
    Depreciation                                                                                       81 571            65 356       170 689
    Depreciation included in cost of sales                                                             24 667            26 706        69 431
    Depreciation not included in cost of sales                                                         56 904            38 650       101 258
    Employee costs                                                                                  2 812 211         2 402 007     5 314 775
    Employee costs included in cost of sales                                                        1 687 145         1 463 310     3 338 117
    Employee costs not included in cost of sales                                                    1 077 090           895 897     1 881 667
    Share-based payments expense                                                                       47 976            42 800        94 991
    Impairments of assets                                                                                   -                 -         9 784
    Foreign exchange loss                                                                              24 791            13 182        20 720
    Fair value (gain)/loss on remeasurement of contingent consideration*                              (14 617)            8 391       (35 764)
    Fair value (gain) through profit or loss                                                           (5 041)           (4 449)      (20 089)
    Loss/(gain) on disposal of subsidiaries and property, plant and equipment                         384 251            (1 489)        3 007
    Gain on bargain purchase on acquisition  of business                                               (7 988)                -             -
    Operating lease charges                                                                           166 677           114 751       231 540
    Operating lease charges on immovable property                                                     157 009           106 759       211 575
    Operating lease charges on movable property                                                         9 668             7 992        19 965

* The comparative amounts for 31 January 2017 have been reclassified following recommendations emanating from the JSE's proactive monitoring process. The
impact resulted in no change to profit before taxation nor cash flows from operating activities. An amount of R27,8 million was reclassified from 'finance costs'
to 'operating expenses' under 'fair value loss/(gain) on remeasurement of contingent consideration'.

15 Disposal of discontinued operation
The Group disposed of the GCT Group of companies ('GCT'), namely, Grid Control Technologies Proprietary Limited, Forensic Data Analysts Proprietary Limited and
Investigative Software Solutions Proprietary Limited to BVI (the former shareholders) on 31 October 2017 as a result of significant under achievement of profits
warranted.

The unwinding involved selling back the companies to the former shareholders for a net amount of R365 million, which is equal to the cash originally paid and the
value adjusted EOH shares originally transferred. The unwinding resulted in a non-cash, once-off reduction in consolidated earnings of R386 million. This once-off
loss has been recognised in the statement of profit or loss.

The profit/(loss) for the period from the discontinued operation is analysed as follows:
Figures in Rand thousand                                                                           3 months ending     6 months ended  12 months ended
                                                                                                   31 October 2017    31 January 2017     31 July 2017
    Profit for the period                                                                                    7 290             31 947           49 602
    Non-cash, once-off, after-taxation accounting loss on disposal of subsidiaries                        (399 740)                 -                -
                                                                                                          (392 450)            31 947           49 602
    The results of the GCT Group for the relevant periods were as follows:
    Revenue                                                                                                 84 327            214 658          361 462
    Cost of sales                                                                                          (40 009)          (102 618)        (184 347)
    Gross profit                                                                                            44 318            112 040          177 115
    Operating expenses                                                                                     (31 782)           (65 933)        (130 911)
    Investment income                                                                                       (1 530)             1 198            2 422
    Finance costs                                                                                             (881)               447            1 065
    Profit before taxation                                                                                  10 125             47 752           49 691
    Taxation                                                                                                (2 835)           (15 805)             (89)
    Profit for the period                                                                                    7 290             31 947           49 602
    The net cash flows incurred by the GCT Group for the relevant periods were as follows:
    Net cash flows from operating activities                                                               (39 145)             9 973           45 896
    Net cash flows from investing activities                                                                 1 990             (6 065)         (12 835)
    Net cash flows from financing activities                                                                (1 965)             2 718            1 668
    Net cash flows                                                                                         (39 120)             6 626           34 729
    The net assets of the GCT Group at the date of  disposal were as follows:
    Net assets de-recognised                                                                               345 025
    Goodwill                                                                                               604 593
    Total net asset value                                                                                  949 618
    Consideration
    Return of EOH shares issued to former shareholders                                                      87 575
    Receivable from former shareholders                                                                    277 675
                                                                                                           365 250
    EOH shares forfeited                                                                                    74 549
    Vendors for acquisition released                                                                       123 531
                                                                                                           563 330
    Non-cash, once-off, accounting loss before taxation                                                   (386 288)
    Capital gains taxation on disposal of subsidiaries                                                     (13 452)
    Non-cash, once-off, after-taxation  accounting loss                                                   (399 740)

Figures in thousands                                                                                 Unaudited for       Reviewed for  Audited for the
                                                                                                 the six months to  the six months to     12 months to
                                                                                                   31 January 2018    31 January 2017     31 July 2017
16  Stated capital
    Issued
    Reconciliation of the number of shares in issue (000):
    Opening balance                                                                                        150 095            140 752          140 752
    Shares issued for cash                                                                                       -              3 757            3 757
    Shares issued as a result of the acquisition  of businesses                                              1 503              2 282            4 160
    Shares issued to the Group share  incentive/retention schemes                                              411              1 269            1 426
    Shares in issue at year end                                                                            152 009            148 060          150 095
    Less:
    Treasury shares held in the Group share  incentive schemes                                              (2 370)            (2 568)          (2 066)
    Treasury shares held by wholly owned subsidiaries of the Company that will not be cancelled             (5 616)            (3 773)          (4 494)
                                                                                                           144 023            141 719          143 535

Figures in Rand thousand                                                                             Unaudited for       Reviewed for  Audited for the
                                                                                                 the six months to  the six months to     12 months to
                                                                                                   31 January 2018    31 January 2017     31 July 2017
    Stated capital
    Opening balance                                                                                      3 333 678          2 263 307        2 263 307
    Shares issued for cash1                                                                                      -            580 904          580 904
    Shares issued as a result of the acquisition  of businesses2                                           156 182            314 973          581 598
    Shares issued to the Group share  incentive/retention schemes3                                           7 768             26 986           32 307
    Treasury shares4                                                                                      (120 955)           (65 439)        (124 438)
                                                                                                         3 376 673          3 120 731        3 333 678
1 At fair value
2 In terms of purchase and sale agreements
3 In terms of the Group share incentive/retention schemes
4 Average price paid for treasury shares amounts to R110,08 per share

Figures in Rand thousand                                                                              Unaudited at        Reviewed at       Audited at
                                                                                                   31 January 2018    31 January 2017     31 July 2017
17  Cash generated from operations
    Profit before taxation from:                                                                           273 575            844 913        1 635 181
    Continuing operations                                                                                  649 736            797 161        1 585 490
    Discontinued operations                                                                               (376 161)            47 752           49 691
    Adjustments for:
    Amortisation of intangible assets                                                                      120 470            128 182          276 608
    Depreciation of property, plant and equipment                                                           81 571             65 356          170 689
    Foreign exchange loss                                                                                   14 477              2 892           20 720
    Impairment of assets                                                                                         -                  -            9 784
    Loss/(profit) on disposal of subsidiaries and property, plant and equipment                            384 251             (1 489)           3 007
    Gain on bargain purchase on acquisition  of business                                                    (7 988)                 -                -
    Fair value (gain)/loss on remeasurement of contingent consideration                                    (14 617)             8 391          (35 764)
    Fair value (gain) through profit or loss                                                                (5 041)            (4 449)         (20 089)
    Share-based payments expense                                                                            47 976             42 800           94 991
    Investment income                                                                                      (34 199)           (29 982)         (72 743)
    Share of profits of equity-accounted investments                                                        (6 371)           (35 179)         (39 241)
    Finance costs                                                                                          177 429            104 192          258 549
    Other non-cash items                                                                                    22 922             (7 973)          (3 372)
    Cash generated before changes in working capital                                                     1 054 455          1 117 654        2 298 320
    Working capital changes net of effects of disposal of subsidiaries                                    (995 074)          (624 585)        (984 256)
    (Increase) in inventories                                                                              (37 195)           (34 049)         (97 177)
    (Increase) in trade and other receivables                                                             (349 293)          (194 224)        (527 870)
    (Increase) in work in progress receivables                                                            (375 270)          (139 010)        (508 336)
    (Decrease)/increase in payables                                                                       (232 760)          (175 840)         314 377
    (Decrease) in deferred income                                                                             (556)           (81 462)        (165 250)

    Cash generated from operations                                                                          59 381            493 069        1 314 064

Figures in Rand thousand                                                                                     Total
                                                                                                              2018
18  Acquisition of businesses
    Fair value of assets and liabilities acquired
    Property, plant and equipment                                                                           13 517
    Intangible assets                                                                                      126 716
    Other financial assets                                                                                   7 229
    Inventory                                                                                                9 645
    Trade and other receivables1                                                                           129 539
    Cash and cash equivalents                                                                               41 025
    Other financial liabilities                                                                            (47 058)
    Finance lease payables                                                                                    (967)
    Net deferred taxation liabilities                                                                      (32 277)
    Net current taxation payables                                                                           (1 671)
    Trade and other payables                                                                               (72 165)
    Deferred income                                                                                        (11 977)
    Net assets acquired                                                                                    161 556
    Non-controlling interests measured at their share of the  fair value of net assets                       2 854
    Amount capitalised                                                                                     164 410
    Gain on bargain purchase                                                                                (7 988)
    Goodwill                                                                                               347 998
    Purchase price                                                                                         504 420
    Cash consideration paid                                                                                (57 792)
    Less: Cash and cash equivalents acquired                                                                41 025
    Net cash outflow on acquisition                                                                        (16 767)
    Consideration payable
    Cash paid                                                                                              (57 792)
    Shares issued2                                                                                         (11 832)
    Cash to be paid                                                                                       (194 949)
    Shares to be issued                                                                                   (239 847)
    Total consideration                                                                                   (504 420)

1 The gross contractual value of trade and other receivables for all acquisitions was R134 million.
2 Shares are issued at fair value at the effective date.

Figures in Rand thousand                                  Total
                                                           2018
Contribution to trading results for the period
Revenue                                                 386 193
Profit before taxation*                                  56 645
Contribution had the effective date been 1 August 2017
Revenue                                                 420 102
Profit before taxation*                                  61 423

* Shown after the effect of amortisation on identifiable assets of R9,2 million (2017: R21,6 million).

Acquisition related costs of R10 million (2017: R25 million) are included in operating expenses in the statement of profit or loss and other comprehensive income.

During the six months under review, EOH consolidated and complemented its existing services with strategic acquisitions. EOH acquired several businesses to bolster
the Group's ICT applications technology capabilities. The total purchase consideration for these acquisitions is R504 million, consisting of R253 million in cash
and 2 618 317 EOH shares. In all instances 100% of the shares were acquired. No acquisitions were individually material and therefore the consolidated impact has
been presented.

The contribution to the trading results of businesses acquired has been accounted from the effective date of the business combination. In determining the purchase
consideration paid, the profit history of the relevant business and its growth prospects in the EOH Group are considered. The fair value of shares issued as part of
the purchase price was determined based on the share price at the effective date. The accounting of these subsidiaries and businesses is based on best estimates and
provisional fair values. The Group has not yet completed its assessment of the fair value of all identifiable assets, liabilities and/or contingent liabilities. The
fair values will be accurately determined within 12 months from the date of acquisition. Goodwill relates primarily to future profits of these businesses and the
anticipated synergies that the businesses bring to the Group.

19 Financial instruments
The Group does not have any financial instruments that are subject to offsetting. All short-term receivables and payables carrying amounts approximate their fair
values due to their short-term nature.

Figures in Rand thousand                  Unaudited for       Reviewed for      Audited for
                                      the six months to  the six months to    the 12 months
                                        31 January 2018    31 January 2017  to 31 July 2017
  Financial assets
  Loans and receivables:
  Other financial assets                        760 608            224 265          236 847
  Finance lease receivables                     221 702            268 316          244 221
  Trade and other receivables                 5 624 339          4 077 590        4 867 742
  Cash and cash equivalents                   1 301 951          2 052 790        2 506 551
  Fair value through profit or loss:
  Other financial assets - level 1               84 000            163 739           78 959
  Other financial assets - level 3               39 462                  -           39 462
                                              8 032 062          6 786 700        7 973 782

Fair value through profit or loss:
Financial assets measured at fair value through profit or loss, in terms of the hierarchy, are classified as level 1 based on quoted prices (adjusted) in active
markets for similar assets that the Group can access at the measurement date and as level 3 where the valuation technique used is based on unobservable inputs for
the asset.

Other financial assets

Other financial assets (level 1) relate to investments for which the fair value is determined by reference to the performance of indices in the active market.

Other financial assets (level 3) relate to a non-controlling interests in unlisted businesses. The valuation is based on a discounted cash flow model which has been
adjusted for risk inherent in the investees' nature of operations. At 31 January 2018 the carrying value of the level 3 financial asset, based on the directors'
evaluation, is R39,5 million.

Figures in Rand thousand                                           Unaudited          Unaudited        Reviewed at       Audited at    Audited at
                                                                 for the six        for the six    31 January 2017     31 July 2017  31 July 2017
                                                                   months to          months to            Level 1          Level 3       Level 1
                                                             31 January 2018    31 January 2018
                                                                     Level 3            Level 1
Reconciliation of movement:
Balance at the beginning of  the  period                              39 462             78 959            165 529                -       165 529
Transfer from loans and receivables                                        -                  -                  -           25 983             -
Disposal                                                                   -                  -             (6 239)               -       (94 659)
Net changes in fair value                                                  -              5 041              4 449           13 479         8 089
Balance at the end of the  period                                     39 462             84 000            163 739           39 462        78 959

Figures in Rand thousand                                       Unaudited for       Reviewed for      Audited for
                                                           the six months to  the six months to    the 12 months
                                                             31 January 2018    31 January 2017  to 31 July 2017
Financial liabilities
Measured at amortised cost:
Other financial liabilities                                        3 608 623          2 663 872        3 373 639
Finance lease payables                                               104 365             99 082          106 781
Trade and other payables                                           1 728 437          1 322 743        1 758 664
Fair value through profit or loss:
Vendors for acquisition - level 3                                    824 129          1 169 217        1 167 453
                                                                   6 265 554          5 254 914        6 406 537

Fair value through profit or loss:
Financial liabilities measured at fair value through profit or loss, in terms of the hierarchy, are classified as level 3 as the valuation techniques used are based
on unobservable inputs for the liability.

Vendors for acquisition
The vendors for acquisition balance relates to the contingent consideration where business combinations are subject to profit warranties. The profit warranties
allow for a defined adjusted value to the consideration payable in the event that the warranted profit after tax is not achieved, or in the event that it is
exceeded, an agreed sharing of the surplus. The fair value of the contingent arrangement is initially estimated by applying the income approach assuming that the
relevant profit warrant will be achieved. Subsequent measurement uses the income approach to calculate the present value of the expected settlement payment using
the latest approved budgeted results and reasonable growth rates for the remainder of the relevant warranty periods taking into account any specific circumstances.
Profit warrant periods normally extend over a 24-month period.

Upwardly revised performance expectations would result in an increase in the related liability, limited to the terms of the applicable purchase agreement.

Unobservable inputs include budgeted results based on margins and revenue growth rates historically achieved by the various segments. Changing such inputs to
reflect reasonably possible alternative assumptions does not significantly change the fair value of the vendors for acquisition liability. EOH has an established
control framework with respect to the measurement of fair values. This includes a valuation team that reports directly to the Group Financial Director who oversees
all significant fair value measurements.

Vendors for acquisition
Figures in Rand thousand                                   Unaudited for the  Reviewed for the  Audited for the
                                                               six months to     six months to     12 months to
                                                             31 January 2018   31 January 2017     31 July 2017
  Reconciliation of movement:
  Balance at the beginning of the period                           1 167 453         1 284 763        1 284 763
  Raised through business combinations                               194 949           288 173          559 934
  Raised as investments in joint ventures and  associates                  -            33 800          152 203
  Acquisitions of remaining non-controlling interests                 54 432                 -           14 279
  Foreign exchange effects                                           (16 908)          (16 356)         (10 812)
  Net changes in fair value                                          (14 617)            8 391          (35 764)
  Discharged to vendors                                             (561 180)         (429 554)        (797 150)
  Balance at the end of the period                                   824 129         1 169 217        1 167 453

20 Related-party transactions
The Group entered into various sale and purchase transactions with related parties, in the ordinary course of business, on an arm's length basis. The nature of
related-party transactions is consistent with those reported previously, none of which were individually significant. Loans to related parties are interest free
with no fixed repayment terms but repayable on demand. These loans are working capital loans to support organic growth in associates and joint ventures.

21 Events after the reporting date
There have been no significant events between the reporting date and the date of authorisation other than the change in the directorate, effective 12 March 2018.

22 Directorate
During the period since 1 August 2017, Asher Bohbot was appointed as non-executive Chairman with effect from 12 March 2018.

Tebogo Maenetja was appointed as an executive director with effect from 12 March 2018.

Sandile Zungu resigned as non-executive Chairman with effect from 12 March 2018.

Grathel Motau resigned as a non-executive director with effect from 12 March 2018.

CORPORATE INFORMATION

Directorate
Non-executive
Asher Bohbot (Chairman) (Appointed 12 March 2018)
Rob Sporen* (Lead Non-executive Director)
Pumeza Bam
Lucky Khumalo
Tshilidzi Marwala
Moretlo Molefi
Sandile Zungu (Resigned 12 March 2018)
Grathel Motau (Resigned 12 March 2018)

Executive
Zunaid Mayet (Chief Executive Officer)
John King (Group Financial Director)
Rob Godlonton
Brian Gubbins
Ebrahim Laher
Jehan Mackay
Tebogo Maenetja (Appointed 12 March 2018)
Johan Van Jaarsveld
* Dutch

Group Company Secretary
Adri Els

Registered address
Block D, EOH Business Park
Osborne Lane, Bedfordview, 2007
PO Box 59, Bruma, 2026
Telephone: +27 (0) 11 607 8100

Website: http://www.eoh.co.za

Investor e-mail: eohir@kris.co.za

Auditors
Mazars (Gauteng) Inc.
Registration number: 2000/026635/21
Erasmus Forum A, 434 Rigel Avenue South, Erasmusrand, Pretoria, 0181

Sponsor
Merchantec Capital
Registration number: 2008/027362/07
2nd Floor, North Block, Hyde Park Corner Office Towers
Corner 6th Road and Jan Smuts Avenue
Hyde Park, 2196
PO Box 41480, Craighall, 2024

Transfer secretaries
Computershare Investor Services Proprietary Limited
Registration number: 2004/003647/07
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
PO Box 61051. Marshalltown, 2107

Date: 28/03/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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