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1.2 Monetisation of passive infrastructure
IFRS 5 deals with non-current assets held for sale and discontinued operations and IAS1 -

presentation of financial statements requires assets and liabilities to be classified as current and
non-current. We have taken a decision to avail towers for immediate sale in its present
condition. A suitable buyer, Sidoms, has been identified and a sales contract has been initiated

to signal the sale will be completed within one year. Appointment of legal advisers to review the
contract indicates an action to complete the plan and hence unlikely significant plan changes
will be made. Accordingly, we have stopped depreciating the towers now classified as held for

sale. The carrying amount and fair value are equal at S$20 billion, less the cost to sell being the
legal fees of S$5 million resulting in $19,995 billion. We have therefore recognised an

impairment loss of $5 million and will follow on with a quantitative and qualitatively disclosure.

1.3 Operating lease with Towerdom

IAS 10 Events after the reporting period and IAS 1 are applicable. We entered into a lease
st
agreement with Towerdom on the 1 of January 2016, indicative of conditions that arose after
the reporting date. The associated costs are S$2400m (S$200m p/month * 12) and of a material

nature as it exceeds S$2,242 (1.4% of turnover S$160,154m) and must therefore be disclosed
by way of a note, as the event occurred post the reporting date. Accordingly no specific
adjustment was warranted in the 2015 financials.

1.4 Goodwill impairment

IAS 38 Intangible assets and IFRS 3 Business combinations are applicable. Management has
tested Goodwill for impairment and since it has been found to be impaired, the amount of
impairment being S$4862m has been debited to the Statement of Profit and Loss and credited

against Goodwill in the Statement of Financial Position reducing it to reflect the expected future
economic benefit post impairment.

2. Principal audit risk concerns

Our interim results for the period ending June 2015 was released just before the fine was

announced at which point our market cap was S$350 billion. The 25% nose dive shortly after
the announcement points to a semi-strong form efficiency (Efficient Market Hypothesis) of the
Sadimba Stock Exchange suggesting share prices reflect all past and publicly available

information. This sudden market shock raises the question as to why the prospect of a fine was
not disclosed to the market at the time of release of the interim results (Also see s5 on ethics).
The International Standard on Review Engagements (ISRE) 2410, Review of Interim Financial

Information Performed by the Independent Auditor of the Entity requires auditors to ONLY
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www.charterquest.co.za | Email: thecfo@charterquest.co.za