TRANSNET SOC LIMITED - Statement on the reportable irregularities

Statement on the reportable irregularities

TRANSNET SOC LTD - ISSUER CODE: BITRA



19 July 2018



STATEMENT ON THE REPORTABLE IRREGULARITIES

As part of the year-end audit, Transnet’s external auditors submitted a report of potential
reportable irregularities to the Independent Regulatory Board of Auditors (IRBA), in line with
their professional obligations.

The reportable irregularities relate to:

1. Non-compliance and non-adherence to stipulated internal procurement processes and
   requirements of law in procurement contracts between Transnet and various service
   providers;
2. Non-compliance with various provisions of the Public Finance Management Act as
   amended; and
3. Contraventions of the Companies Act of South Africa (Act 71 of 2008).

In terms of the Audit Profession Act, the Board of Transnet had 30 days to make representations
to the external auditors of steps taken to mitigate the risks identified, after which the external
auditors are then required to report back to IRBA to confirm if:

1. No reportable irregularities are taking place; or
2. The suspected reportable irregularities are no longer taking place and that, where
   relevant, adequate steps have been taken to prevent the recurrence of the irregularities
   or recover any loss as a result thereof, or whether
3. The reportable irregularities are continuing.

There were thirteen irregularities that were reported; one of these is not a reportable irregularity
and seven of these are no longer taking place.

For the five “Reportable Irregularities” that are continuing, Transnet will be engaging the
National Treasury for approval to regularize the contracts.

In addition, monitoring and governance processes will be enhanced to identify non-compliance in
a timely manner, to enable corrective action to be taken before the conclusion of the
procurement process.

Disciplinary and remedial processes are, where appropriate, in some instances complete and in
others in progress.

There have not been any significant movements on the prices of our instruments and the spread
on the Transnet Bonds are stable.




__________________________
B E GOTHA
Head of Compliance: Transnet SOC Ltd (Treasury)
Date: 19 July 2018



Transnet SOC Ltd              Carlton Centre        P.O. Box 72501
Registration Number           150 Commissioner      Parkview, Johannesburg
1990/000900/30                Street                South Africa, 2122
                              Johannesburg          T +27 11 308 3001
                              2001                  F +27 11 308 2638

Directors: Dr PS Molefe (Chairperson) SI Gama* (Group Chief Executive) UN Fikelepi RJ Ganda Prof EC Kieswetter ME Letlape DC Matshoga V McMenamin Adv OM Motaung   www.transnet.net
Dr FS Mufamadi AP Ramabulana GT Ramphaka LL von Zeuner
MS Mahomedy* (Acting Chief Financial Officer)
*Executive
Group Company Secretary: NE Khumalo

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