We write to draw your attention to certain matters which we identified during our audit of the financial

statements of Armenian Evangelical School for the year ended 30 September 2014:

1) The schedule of end of service indemnity was not prepared by year end (30/09/2014) to support
the accounted provision, hence we are unable to evaluate whether it is sufficient to cover
employees’ indemnity as at 30/9/2014.

2) No Fixed asset register was prepared as at 30/09/2014 and the related depreciations were not
properly accounted for, in accordance with the Lebanese accounting principles.

3) During our review of the inventories owned by the school, we have noticed that no stock count
or evaluation was accounted for in the financial statement. It is to be mentioned that the
purchases of books and copybooks amount to $9’482 whereas the sales amount to $4’887 for
the referred to school year. Also note that the school uniform inventory was not evaluated by
year end nor appropriately accounted for in order to be fairly presented in the financial
statement.

4) It came to our attention that the salaries are not declared and the related taxes are not paid
since the year 1999. Hence a provision for taxes is to be accounted for, along with the related
penalties due.

5) Not all expenses have supporting or legal documents.

6) The lease contracts are not registered in the related municipality and are in no conformity with
the stamps and tax regulations.

7) We have not yet received a confirmation letter from ELB and Audi Bank as at 30/09/2014.

8) We urge you to reconsider the structure of the financial department and address fundamental
control weaknesses in order to avoid errors and future misstatement.