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AFDAWN AR FINAL 2019

AFRICAN DAWN ANNUAL REPORT 2019 Notes to the Financial Statements continued Annual Financial Statements For the year ended 28 February 2019 89 Interest rate risk The sensitivity analyses below has been determined based on the exposure to interest rates for non-derivative instruments at the statement of financial position date. For floating rate liabilities, the analysis is prepared assuming the amount of liability outstanding at the statement of financial position date was outstanding for the whole year. A 100 basis points increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates. If interest rates had been 100 basis points higher or lower and all other variables were held constant, the Group’s loss for the period would change by R 220,300 (2018: 169,210) company: R17,200 (2018: Rnil). A 100 basis points increase would increase revenue on unsecured lending by an estimated R292,500 (2018: R252,110). A 100 basis points increase would increase finance costs on borrowings linked to prime by an estimated R72,200 (2018: R82,900)(refer to note 17). A 100 basis points increase would increase interest income on cash and cash equivalents by an estimated R17,200 (2018: R3,000). 34. Change in estimate Property plant and equipment In the current period management have revised their estimate of useful lives. The useful lives now fall between 3 and 10 years. The effect of this revision has decreased the depreciation charges for the current period by R 28,498. Intangible assets In the current year the useful life of micro finance software was revised. The estimated useful life as between 5 and 10 years. The effect of this revision has decreased the amortisation for the current periods by R 84,325. 35. Reclassification error Change of statement of profit and loss from function to nature The statement of profit and loss and other comprehensive income has been reclassified from the functional basis to the nature basis to improve readability of the statements. Deemed interest Deemed interest income/(expense) has been reclassified into operating expenses as the amount relates to the impairment loss allowance in trade and other receivables. The effect of the above changes are indicated below: Statement of profit and loss and other comprehensive income Group 2018 R’000 As previously stated Adjustment Now stated Cost of sales (116) 116 - Gross profit 17,293 (17,293) - Deemed interest 433 (433) - Operating expenses (31,348) 317 (31,031) Operating loss (12,456) 12,456 - Company 2018 R’000 As previously stated Adjustment Now stated Gross profit 117 (117) - Operating loss (9,133) 9,133 -


AFDAWN AR FINAL 2019
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