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Left in the cold

Choppies BSEL suspenion remains despite releasing financial statements

Despite finally releasing its long overdue financial results for the year ended 30June 2018, Choppies Enterprise Limited remains suspended from trading its shares on the Botswana Stock Exchange Limited (BSEL).

The supermarket chain’s failure to release its audited financial statements for 2018 led to its suspension from the BSEL last November.

The long wait ended last Friday, when Choppies at last went public with their finances, declaring a loss of P445 million, as audited by Pricewaterhousecoopers (PwC).

However, this was not enough to see the company’s suspension lifted, as Choppies is still to satisfy other equity listings requirements.

These include the submission of the company’s unaudited financial statements for the half-year ended 31 December 2018 and the audited financial statements for the year ended 30 June 2019.

Meanwhile, PwC have abstained from forming an opinion pertaining to the consolidated and separate financial statements of Choppies Enterprise Limited and its subsidiaries.

The audit enterprise says it is unable to express opinion on the financial statements because it has not been able to obtain sufficient appropriate audit evidence to provide an opinion.

In auditing Choppies financial statements, PwC indicated that it relied heavily on the forensic and legal reports conducted on the company.

It notes that from these reports, there are a number of instances where no definitive conclusions could be drawn.

Furthermore, PwC says it has identified material and pervasive misstatements in the financial information of Choppies’ South African subsidiaries for the period ended 30 June 2018.

While the identified misstatements have been adjusted in the consolidated financial statements, PwC feels the nature and significance of these errors have increased the risk of further undetected misstatements.

After exploring all possible avenues to obtain the required level of audit evidence, PwC says it was unable to come to a conclusion as the accounting systems and processes did not create an environment that supported its ability to acquire sufficient and appropriate audit evidence.

Furthermore, PwC says multiple misstatements relating to the prior period were identified in Choppies group’s Botswana and South African subsidiaries.

In conclusion, the audit company says the potential interaction of multiple uncertainties contained in both the forensic and legal reports and their possible cumulative effect on the financial statements has resulted in it being unable to form an opinion on Choppies financial statements.

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