Trading Statement DENEB INVESTMENTS LIMITED Registration number: 2013/091290/06 (Incorporated in the Republic of South Africa) JSE share code: DNB ISIN: ZAE000197398 (“Deneb” or the “Company”) TRADING STATEMENT In terms of para 3.4(b) of the JSE Listings Requirements, listed companies are required to publish a trading statement as soon as the board of directors is satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported on next will vary by 20% or more when compared to those of the prior reporting period. Shareholders are advised that the Group’s results contain a prior year adjustment and that comparative balances accordingly differ to those previously reported. In addition, the financial results have been retrospectively adjusted for discontinued operations. The prior year adjustment relates to a change in the accounting treatment of Government Grants: - During the prior periods, the grants were deemed to be earned through compliance with their conditions and meeting the envisaged obligations. Where the qualifying conditions gave rise to future envisaged obligations, the benefits were allocated against the historic costs of complying with the conditions as well as the future related obligations. Where no envisaged obligations were identified, the grants were recognized in other income when there was reasonable assurance that the entity will comply with all the conditions attached to the grants and that the grants will be received. - During the current financial year, the Group’s new auditors believe that the relevant statement should be interpreted differently and that the above accounting treatment was incorrect. It is their view that if the benefit derived from the grant is used to acquire a depreciable asset, the benefit should be matched against the depreciation expense related to those assets, with the balance being reflected as deferred income in the statement of financial position. Accordingly, the results for the comparative period ending 31 March 2017 have been restated as follows: Previously reported Restated Basic earnings per share 15 cents 10 cents Continuous operations 15 cents Discontinued operations (5) cents Headline earnings per share 10 cents 5 cents Continuous operations 10 cents Discontinued operations (5) cents Deneb shareholders are advised that the results for the year ended 31 March 2018 are expected to be within the following range: Restated 31 March 2018 expected 31 March 2017 range Basic earnings per share (EPS) 10 cents 0 cents to 2 cents Continuous operations 15 cents 19 cents to 22 cents Discontinued operations (5) cents (19) cents to (20) cents Headline earnings per share (HEPS) 5 cents (2) cents to (4) cents Continuous operations 10 cents 13 cents to 16 cents Discontinued operations (5) cents (15) cents to (20) cents The financial results have been impacted by the following material items: - Discontinued operations In September 2017 we communicated to stakeholders our intention to restructure the office automation business and Winelands Textiles. In all material aspects, these restructures have been completed. Costs of R83 million relating to these businesses have been debited to the statement of profit and loss. - Deferred taxation The Group recognized R87m of deferred tax credits in the statement of profit and loss for certain businesses where performances have improved to the extent that we now expect them to record taxable profits for the foreseeable future. Further details will be included in our results announcement scheduled for release on SENS by end of May 2018. The financial information on which this trading statement have been based has not been reviewed or reported on by the Group’s external auditors. Cape Town 21 May 2018 Sponsor PSG Capital Date: 21/05/2018 02:00:00 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.