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AFRICAN DAWN ANNUAL REPORT 2020

Independent Auditor’s Report

To the shareholders of African Dawn Capital Limited continued

Impairment of Investments in subsidiaries (Note 1.3 and Note 5) In evaluating the recoverable amount of investments in subsidiaries we
performed various procedures including the following:
As per IAS 36 Impairment of Assets, the Company is required to • Utilised an auditors expert in assessing the reasonability of the
annually test the carrying value of the investment in subsidiaries discounted cash flow model used for the value in use calculator
for impairment when there is an indicator of impairment. This as well as the key inputs into the model such as the pre-tax
is performed using discounted cash flow models for the various discounted rate, revenue growth rates and terminal growth rate
investments. against external market data;
• Tested the mathematical accuracy of the discounted cash flow
Due to the value of the investment in subsidiaries representing more
than 50% of the total assets as at 29 February 2020 as well as the model used;
significant judgement used in the inputs into the discounted cash flow • Performed a sensitivity analysis on the key assumptions applied;
models, this has been considered to be a key audit matter. • Considered the reasonableness of the assumptions used, including
managements’ growth forecast and WACC;
Based on the impairment testing performed by management no
impairment were required relevant to the Investments in subsidiaries. We evaluated the relevant disclosure of the Company for compliance
with IFRS.
Other Information
The directors are responsible for the other information. The other information comprises the information included in the document titled “Annual
Financial Statements for the year ended 29 February 2020”, which includes the Directors’ Report, the Audit and Risk Committee’s Report and the
Group Company Secretary’s Certificate as required by the Companies Act of South Africa which we obtained prior to the date of this report and
the Annual Report which is expected to be made available to us after the date of this report. 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.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the group’s and the company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group and / or the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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