CHOPPIES ENTERPRISES LIMITED - Further announcement regarding delay in publication of financial results for the year ended 30 June 2018

Further announcement regarding delay in publication of financial results for the year ended 30 June 2018

Choppies Enterprises Limited
(Registration number 2004/1681)
JSE share code: CHP
BSE share code: CHOPPIES
ISIN: BW0000001072
Tax reference number: C08710401018
(“Choppies” or the “Company”)


FURTHER ANNOUNCEMENT REGARDING DELAY IN PUBLICATION OF FINANCIAL RESULTS FOR THE YEAR ENDED 
30 JUNE 2018, TRADING STATEMENT AND CAUTIONARY ANNOUNCEMENT

Shareholders are referred to the announcement released on Friday, 21 September 2018 and are
advised further as follows:

Delay in Publication of Audited Financial Statements for the Year ended 30 June 2018

In order to provide further clarity to shareholders on this matter, the Company advises that, in
relation to the current audit for the year ended 30 June 2018:

- The Company appointed new external auditors PricewaterhouseCoopers (PwC) on 31
  January 2018 and consequently the Board and the auditors have been reassessing a
  number of past accounting practices and policies. The reassessments currently being
  undertaken relate to historical purchase price allocations on business acquisitions,
  depreciation and amortization accounting, valuation of inventory and impairment
  assessments of property, plant and equipment, intangible assets and deferred tax assets.
  Such reassessments are ongoing, complex by nature and require careful analysis in order
  to determine the impact on prior and current periods.

- The Board and the Company’s auditors identified a number of matters relating to the
  current and earlier financial periods, which require independent verification and expert
  legal analysis and advice before the impact thereof on accounting recognition,
  measurement and disclosures (if any) can be determined. Certain transactions and
  business relationships hitherto were not made fully apparent and were therefore not
  sufficiently considered in preparation of historical annual financial statements. These
  include:

  - certain business acquisition transactions undertaken by the South African
    subsidiary during the 2017 and 2018 financial years.
  - ramifications of the well-publicised shareholder dispute in Zimbabwe. Already
    the actions of a Zimbabwe domiciled director of the Group’s Zimbabwean
    investee company is the subject of a police investigation for alleged theft.

While these independent verifications and expert legal analyses have been initiated, their
completion date and outcomes cannot be determined with any reasonable certainty at this stage,
impacting the finalization of the Company’s audited financial results for the year ended 30 June
2018. The Company is therefore unable to determine when it will be in a position to publish
audited financial results for the year ended 30 June 2018.

The board is reviewing these matters, meeting regularly with PwC and other advisers and will
continue to provide the shareholders with updates as these matters are progressed.

Trading Statement

The decrease in profitability referenced in the announcement of 21 September 2018 results
primarily from a combination of adverse trading conditions in South Africa, Mozambique and
East Africa and a material year-on-year increase in inventory losses identified through improved
stock count procedures employed during the last quarter of the financial year. The final results
for the current financial year may be further impacted by possible restatements on prior periods
and accounting for transactions still being verified. As set out above, the Group is not in a
position to make any reasonable estimate of the impact of these matters (if any), until the
necessary verifications, analyses and assessments are completed.

Cautionary Announcement

Given the matters referred to in this and the announcement of 21 September 2018, the
Company advises shareholders to exercise caution in the trading of the Company’s securities
until a further announcement is made.

27 September 2018

BSE Sponsoring Broker
African Alliance Botswana Limited

JSE Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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