DENEL SOC LIMITED - Further update regarding disclaimer of audit opinion

Further update regarding disclaimer of audit opinion

Registration number: 1992/001337/30
JSE Alpha Code: BIDEN
("Denel" or the "Company")


Noteholders are referred to the latest announcement released on SENS on 31 May 2019 in respect of
the disclaimer of opinion contained in the audit report for the year ended 31 March 2018 (the

In this regard, Denel is now in a position to provide further details as follow:

1.    Operating leases - insufficient audit evidence to support transactions relating to non-
      cancellable leases

      Denel has now provided sufficient evidence to its auditors and the auditors have indicated that
      this matter has been resolved and closed.

2.    Review of internal processes to ensure compliance to the PFMA

      The internal process review has been completed with an update to the policy dealing with the
      prevention, identification and disclosure of irregular, fruitless and wasteful expenditure and
      implementation thereof. Secondly, all senior managers and executives have attended PFMA
      training in order to ensure understanding of the legislation. Denel has further investigated all
      expenditure for the past three years to ensure that all irregular, fruitless and wasteful
      expenditure have been disclosed per legislation. To ensure completeness and accuracy, Denel
      contracted an external resource to interrogate the process followed in identifying and disclosing
      irregular expenditure. This process is underway and expected to be completed during June

3.    Investment in subsidiaries - inadequate evidence was provided to the auditors for
      "investment in associates" relating to the purchase of Turbomeca Africa Proprietary Limited

      The audit of Turbomeca is currently underway, however progress is slow due to system
      constraints at this entity. It is envisaged that the audit of Turbomeca will be completed in July

4.    Financial risk management / deferred tax and income tax

      It has been agreed with Denel's auditors that these disclosure matters will be audited on
      completion of all the other outstanding matters and at submission of 2018/19 financials.

A further update on the Disclaimer will be released by 31 August 2019.

25 June 2019

Debt Sponsor : Nedbank Corporate and Investment Banking

Date: 25/06/2019 02:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.