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DENEL SOC LIMITED - Further update regarding disclaimer of audit opinion
Further update regarding disclaimer of audit opinion DENEL SOC LIMITED Registration number: 1992/001337/30 JSE Alpha Code: BIDEN ("Denel" or the "Company") FURTHER UPDATE REGARDING DISCLAIMER OF AUDIT OPINION 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 "Disclaimer"). 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 2019. 3. Investment in subsidiaries - inadequate evidence was provided to the auditors for "investment in associates" relating to the purchase of Turbomeca Africa Proprietary Limited ("Turbomeca") 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 2019. 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.