Ann: GENERAL: DIL: Timing for release for Prelimi

• Release Date: 30/08/13 11:24
• Summary: GENERAL: DIL: Timing for release for Preliminary Half Year
• Price Sensitive: No
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DIL
30/08/2013 09:24
GENERAL

REL: 0924 HRS Diligent Board Member Services INC (NS)

GENERAL: DIL: Timing for release for Preliminary Half Year

30 August 2013

Diligent Board Member Services, Inc. ("Diligent")
Timing for release of Preliminary Half Year Announcement and Half Year Report
and use of a US Auditor

According to the NZX Listing Rules, Diligent is required to release its
preliminary half year announcement no later than 29 August 2013 and its half
year report no later than 30 September 2013.  As a result of its previously
announced restatement and reaudit process, Diligent has applied to the NZX
for a waiver to allow it to meet an extended timetable for providing its
preliminary half year announcement and half year report.  NZX has now advised
Diligent that while it will not grant a waiver from the applicable rules it
will take no action in respect of Diligent's delay in providing its
preliminary half year announcement by 28 October 2013 and its half year
report by 29 December 2013.

Diligent has previously advised the market that it will restate its financial
statements for the fiscal years ended December 31, 2010, 2011 and 2012 and
the fiscal quarter ended March 31, 2013.  Diligent is not in a position to
finalise its preliminary half year announcement and half year report for 2013
until this restatement process is completed.  The process of restating and
reauditing financial statements for three years is reasonably time consuming.
As previously advised, the need to restate historical financial statements
does not affect total revenues ultimately earned or to be earned, the amount
or timing of cash received or to be received from individual customer
agreements.  Income earned in a period may however move to a different
period. If that occurs, this would impact on the net income and tax payable
in that period and subsequent periods.

Diligent is focused on completing the restatement process and announcing its
preliminary half year announcement as soon as possible.  Until the necessary
restatement adjustments are finalized, the Company is not in a position to
provide certain financial information such as any sales or revenue-related
information.  However, Diligent will endeavour to provide selected operating
highlights for the Company's third quarter in the first two weeks of October.

Diligent is working with its new US independent registered public accounting
firm, Deloitte & Touche LLP (Deloitte) to complete the restatement and
re-audit of its historical financial statements.  Deloitte was appointed
Diligent's auditor at its annual meeting on 25 June 2013 by a resolution
supported by 99.90% of votes cast by shareholders.  Given that Deloitte is a
limited liability partnership, Deloitte cannot register under the New
Zealand, Auditor Regulation Act.  Accordingly, Deloitte is not and cannot be
licensed under that Act.  Diligent therefore also sought a waiver from NZX's
Listing Rule that would require the auditor engaged in the restatement of its
financial statements for the year ending December 31, 2012 to be licensed
under the Auditor Regulation Act.  This is the same issue Diligent faced
earlier in 2013, in respect of its past auditor HRR. NZX has advised Diligent
that it will not grant a waiver from the applicable rule but will take no
action against Diligent for non-compliance with it.

Similarly, Diligent also sought a no action letter from the FMA in relation
to the fact that Deloitte cannot be licensed under the Auditor Regulation
Act.  The FMA has issued Diligent a no action letter in respect of its
financial statements for the year ending December 31, 2012. Unless the law is
changed, Diligent will apply for further waivers or no-action letters from
both NZX and the FMA in the future.
Forward Looking Statements

This document contains forward-looking statements within the meaning of the
safe harbor provision of the Securities Litigation Reform Act of 1995. Terms
such as "expect," "believe," "continue," and "intend," as well as similar
comments, are forward-looking in nature. These forward-looking statements
include statements regarding the Diligent's intent to restate certain prior
period financial statements and the errors that resulted in the Audit
Committee reaching the decision that these historical financial statements
could no longer be relied upon. There can be no assurance that the Diligent's
Board of Directors, Audit Committee, management or independent registered
public accounting firm will not identify additional issues in connection with
the restatement or reaudit, or that these issues will not require additional
corrections to the Diligent's prior period financial statements. These
statements are subject to risks and uncertainties, including the risk that
additional information may become available in preparing and reauditing the
financial statements and may require the Diligent to make additional
corrections, the time and effort required to complete the restatement of the
financial statements, the ramifications of the Diligent's potential inability
to timely file periodic and other reports with the Securities and Exchange
Commission, and the risk of litigation or governmental investigations or
proceedings relating to these matters. In addition, as disclosed in our prior
filings, our Special Committee investigation identified a number of instances
in which we were not, or may not have been, in compliance with applicable New
Zealand and US regulatory obligations and such instances may expose us to
potential regulatory actions and/or contingent liabilities; certain of our
past stock issuances and stock option grants may expose us to potential
contingent liabilities, including potential rescission rights; we are subject
to New Zealand Stock Exchange Listing Rules and compliance with securities
and financial reporting laws and regulations in the US and New Zealand and
face higher costs and compliance risks than a typical US public company due
to the need to comply with these dual regulatory regimes; as of December 31,
2012 we identified material weaknesses in our internal control over financial
reporting and concluded that our disclosure controls were not effective; we
must address the material weaknesses in our internal controls, which
otherwise may impede our ability to produce timely and accurate financial
statements; our business is highly competitive and we face the risk of
declining customer renewals or upgrades; and we may fail to manage our growth
effectively. Please refer to Diligent's Annual Report on Form 10-K for the
Fiscal Year ended December 31, 2012 filed with the Securities and Exchange
Commission for further information.

Investor inquiries:  Media inquiries:

Sonya Joyce
Ph: + 64 4 894 6912  Geoff Senescall
Ph: + 64 21 481 234
End CA:00240449 For:DIL    Type:GENERAL    Time:2013-08-30 09:24:47