AFRICAN DAWN ANNUAL REPORT 2018 28 Independent Auditor’s Report To the shareholders of African Dawn Capital Limited Independent Auditor’s Report To the shareholders of African Dawn Capital Limited Report on the audit of the consolidated and separate financial statements Opinion We have audited the consolidated and separate financial statements of African Dawn Capital Limited (the Group and Company) set out on pages 35 to 95, which comprise the consolidated and separate statements of financial position as at 28 February 2018, and the consolidated and separate statements of profit or loss and other comprehensive income, the consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended, and notes to consolidated and separate the financial statements, including a summary of significant accounting policies. In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of African Dawn Capital Limited as at 28 February 2018, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report. We are independent of the Group and Company in accordance with the Independent Regulatory Board for Auditors’ Code of Professional Conduct for Registered Auditors (IRBA Code) and other independence requirements applicable to performing audits of financial statements in South Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material uncertainties related to going concern We draw attention to the directors’ report in the financial statements, which indicates that the Group and the Company incurred a net loss of R2.66million and R3.08million respectively during the year ended 28 February 2018. In addition, Note 1.18 indicates that material uncertainties relating to events or conditions exist which may cast significant doubt on the Group’s and Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matters described in the Material Uncertainties related to Going Concern section, we have determined the matters below to be key audit matters to be communicated in our report. The following key audit matters relate to the consolidated financial statements. Key audit matter How our audit addressed the key audit matter Impairment allowance of Trade Receivables At 28 February 2018, trade receivables amounted to R30.291million, against which an impairment allowance of R9.288million was recorded. This is disclosed in Notes 10 and 36 to the consolidated financial statements. Trade receivables are stated at amortised cost net of identified impairments. The methodology and assumptions used for estimating both the amount and timing requires significant judgement and estimation. These are key areas of estimation uncertainty as disclosed in Note 1.18. Our audit included obtaining, understanding and testing the relevance of the policy for impairment allowance of trade receivables. Our testing included the following procedures: • Comparing and recalculating the allowance for doubtful debt based on the client’s policy in order to ascertain the accuracy of the allowance calculated by the client. • Comparing the client’s ageing based on their policy to an ageing performed by our Computer Assisted Audit Techniques’ “CAATS” internal IT specialist. The ageing performed by the IT Specialist was based on last payment date as opposed to the ageing calculated based on a mix of status and payment date as per the client’s methodology. The differences identified prompted further investigation into the relevance of the client's credit policy and as such management engaged with an expert in this regard.
AFRICAN DAWN 2018 Annual Report
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