According to Denel's Group CEO, Denel's first intention was to play a role in the provision of defence capabilities. Over the past year, Denel improved the performance of its defence and security businesses. No non- core capabilities were continued or established, and Denel managed to maintain all of its key strategic capabilities. There was an improvement in access to local markets. Denel spent R835 million on research and development, which represented approximately 22% of the Group's revenue. This would contribute to the company's intellectual property. Denel's debt/equity position was a concern. The Group's debt amounted to R1.8 billion. For the financial year under review, Denel's sales margin was 52% and there was an improvement in productivity. Denel was pleased to say that it had achieved a level-4 Broad-Based Black Economic Empowerment (BBBEE) status.