Voluntary Disclosure of Fraud ADvTECH Limited (Incorporated in the Republic of South Africa) (Registration number 1990/001119/06) Share code: ADH ISIN: ZAE000031035 ("ADvTECH" or “the company” or “the group”) Voluntary disclosure of fraud As a result of changes being implemented through the restructuring of the finance and administrative functions in the schools division, the company has uncovered incidents of fraud. This was perpetrated by a financial manager in the schools division head office and took place over a period of three years beginning in 2015. The amounts were not easily identified as they were not individually significant. Whilst not material, in the interest of transparency, the directors have decided to voluntarily disclose this to the market. These activities have resulted in an over-statement of revenue, an understatement of costs and the theft of cash. The cash component amounts to R5million, of which approximately R2million should be recovered as the company has secured a court order freezing the service provider’s bank account, with whom the financial manager colluded. The balance should be recoverable through our insurers. In aggregate, the misstatements and cash loss amount to R48.1million resulting in a R35.5million after tax impact on the reported figures for the period as reflected below: 12 months to 12 months to 6 months to 6 months to Total 31 December 31 December 30 June 31 December Amount 2015 2016 2017 2017 R’m R’m R’m R’m R’m Revenue overstated - (9.3) (5.1) (2.5) (16.9) Expenses understated (6.5) (31.2) (including the cash loss of R5million) (6.7) (15.1) (2.9) Operating profit overstated (6.7) (24.4) (8.0) (9.0) (48.1) Tax effect 1.9 6.6 2.0 2.1 12.6 Profit after Tax effect (4.8) (17.8) (6.0) (6.9) (35.5) Upon discovery of these discrepancies, a thorough and comprehensive investigation was undertaken which documented the full extent of these activities. Criminal charges have been laid against the financial manager and the colluding external service provider. These charges are being vigorously pursued. The impact of this occurrence will be accounted for in the 2017 annual financial statements. ADvTECH CEO, Roy Douglas said: “Management deeply regrets this occurrence. They resulted mainly from head office book entries and will not impact delivery, fees or quality at any of our schools. Management remains committed to the highest levels of corporate governance and to ensuring that any deviations will not be tolerated. We will pursue this matter to the full extent of the law.” The amounts referred to above and included in the table have not been audited or reviewed by the group’s auditors. 1 December 2017 Johannesburg Sponsor: Bridge Capital Advisors Proprietary Limited Date: 01/12/2017 07:30:00 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.