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STEINHOFF INVESTMENT HOLDINGS LIMITED - Steinhoff Investments - Further Update On Financial Reporting Timeline

Release Date: 23/03/2020 15:30
Code(s): SHFF     PDF:  
 
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Steinhoff Investments - Further Update On Financial Reporting Timeline

Steinhoff Investment Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1954/001893/06)
JSE Code: SHFF
ISIN: ZAE000068367

STEINHOFF INVESTMENTS - FURTHER UPDATE ON FINANCIAL REPORTING TIMELINE
Steinhoff Investment Holdings Limited (“Steinhoff Investments” or the “Company”) (together with
its subsidiaries, the “Group”)

Introduction and background

Steinhoff Investments, a wholly owned subsidiary of Steinhoff International Holdings N.V., is the
issuer of variable rate, cumulative, non-redeemable, non-participating preference shares with a
capital value of ZAR1.5 billion. The preference shares are listed on the Johannesburg Stock
Exchange (“JSE”). Following the events of December 2017, Steinhoff Investments was unable to
publish its Consolidated Financial Statements for the year ended 30 September 2017 by the
requisite date, namely 28 February 2018. The listing of the preference shares was therefore
suspended by the JSE, effective 1 March 2018, and this suspension remains in place. Steinhoff
Investments Consolidated Financial Statements for 2018 and 2019 have also not yet been
published.

Despite the suspension of the listing, the Company has continued to pay dividends every six
months as set out in the Preference Share terms.

Complexity

The underlying reasons for the delay in publishing the Company’s Consolidated Annual Financial
Statements are complex and result from a number of inter-related historical factors. The
complexity that is causing the delay for this company is multi-faceted and starts with the restated
consolidated financial statements for the earlier years. During those reporting periods the
Steinhoff International N.V. group carried out various complex internal group reorganisations that
impact the consolidated financial statements of Steinhoff Investments for the underlying periods
but which had no effect on the overall Steinhoff N.V. group financial statements as they are viewed
as common control transactions for accounting purposes. The detail of these internal
reorganisations was therefore not audited at Steinhoff Investments level as part of the Steinhoff
N.V. audit.

In addition, the accounting restatements that were required following completion of the forensic
investigation in 2019 were also processed at Steinhoff International N.V. group level only and
similarly need to be calculated and audited for each financial year down to each reporting entity
within the multi-national group. The combination of these factors has made the process of
finalising outstanding Consolidated Financial Statements for Steinhoff Investments extremely
challenging. The Company stand-alone financial statements have been prepared and are not in
themselves a reason for the delay in releasing the Consolidated Financial Statements.

Process update

The Company has been engaging with various regulators, including the Johannesburg Stock
Exchange (JSE) and the Companies and Intellectual Properties Commission (CIPC), to try and find a
solution to these challenges, and will continue to do so. Steinhoff Investments has simultaneously
engaged with its external auditors, external legal counsel and technical IFRS advisors to ascertain
how it may meet the JSE’s publication and other relevant legal requirements in order to complete
and publish the outstanding financial statements and / or lift the suspension currently imposed by
the JSE on the listing of the Company’s perpetual preference shares.

Unfortunately, to date it has not been possible to identify a practical solution to these challenges,
and, despite the Company’s best efforts, there remains a substantial body of work to complete and
then to audit Steinhoff Investments Consolidated Annual Financial Statements for these
outstanding years. These tasks remain complex and the date of their completion is currently
uncertain.

Good progress has been made in completing the accounting build-ups required to enable
preparation of the consolidated financial statements for Steinhoff Investments for the years up to
and including 2019 and this project is continuing. However, addressing the Steinhoff Investments
accounting challenge is only one element of the substantial workload currently being addressed by
the finance team, whose responsibilities also include the broader Steinhoff group, and the
preparation of the 2019 Consolidated Financial statements for Steinhoff International N.V..

Revised plan and timetable for Steinhoff Investments

In order to provide investors with the most recent financial information, Steinhoff Investments
intends to publish its 2019 Consolidated Financial Statements during May 2020. As the 2019
Consolidated Financial Statements may be impacted by any prior year adjustments that may flow
through from the currently unaudited prior year consolidated financial statements, shareholders
must be cautioned that the audit report in respect of these 2019 consolidated financial statements
may include disclaimers in respect of certain of the opening balances. It is Steinhoff Investments’
current intention that the financial statements for the earlier years will then be released before
the end of 2020.

Steinhoff Investments will update the market in due course regarding expected publication dates.

JSE Sponsor: PSG Capital
Stellenbosch, 23 March 2020

Date: 23-03-2020 03:30:00
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