AFRICAN DAWN ANNUAL REPORT 2017 Independent Auditor’s Report To the shareholders of African Dawn Capital Limited continued A R3,397m impairment of the goodwill attributable to the acquisition of Knife Capital Proprietary Limited was accounted for in the statement of comprehensive income (disclosed in note 4). There were no impairments recognised with respect to the other intangible assets. 25 Fair value assessment of trade receivables Trade receivables comprise a significant portion of the liquid assets of the group. Accordingly, the estimation of the allowance for trade receivables is a significant judgement area and is therefore considered a key audit matter. How our audit addresses the key audit matter We focused our testing of the impairment of goodwill and other intangible assets on the key assumptions made by the directors. Our audit procedures included: • Critically evaluating the determination of the cash-generating units; • Evaluating whether the model used to calculate the fair value less costs to sell and value in use of the individual cash-generating units complies with the requirements of IAS36: Impairment of Assets; • Validating the assumptions applied and inputs in the respective models by comparing it to historical information and approved budgets; and • Subjecting the key assumptions to sensitivity analysis. We also focused on the adequacy of the Group’s disclosure about these assumptions to which the outcome of the annual impairment test is most sensitive, that is, those that have the most significant effect on the determinations of the recoverable amount of goodwill. We assessed the valuation of material long outstanding receivables by obtaining management’s assessment and policy. The assessment of the appropriateness of the allowance for trade receivables comprised challenging the appropriateness and reasonableness of the assumptions applied in the directors’ assessment of the receivable allowancee. Other information The directors are responsible for the other information. The other information comprises all information included in the Annual Report, including the Directors’ Report, the Audit Committee’s Report and the Company Secretary’s Certificate as required by the Companies Act of South Africa. Other information does not include the consolidated and separate financial statements and our auditor’s report thereon. Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the consolidated and separate financial statements The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.
AFRICAN DAWN 2017
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