Financial Statements 189 Company Statement of Financial Position 190 Company Statements of Changes in Equity 191 No Tes to Company Only Financial Statements
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Contents 116 Independent auditor’s report Financial 126 Consolidated statement of comprehensive income 127 Consolidated statement of financial position statements 128 Consolidated statement of changes in equity 129 Consolidated statement of cash flows 130 Notes to consolidated financial statements 189 Company statement of financial position 190 Company statements of changes in equity 191 No tes to company only financial statements Airtel Africa plc Annual Report and Accounts 2020 115 © 2020 Friend Studio Ltd File name: AuditorsXReport_v52 Modification Date: 22 May 2020 10:18 am Financial statements Independent auditor’s report to the members of Airtel Africa plc Report on the audit of the financial 2. Basis for opinion We conducted our audit in accordance with International Standards on statements Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities 1. Opinion for the audit of the financial statements section of our report. We are independent of the Group and the parent company in In our opinion: accordance with the ethical requirements that are relevant to our audit • the financial statements of Airtel Africa plc (the ‘parent of the financial statements in the UK, including the Financial Reporting company’) and its subsidiaries (the ‘Group’) give a true and fair Council’s (FRC’s) Ethical Standard as applied to listed public interest view of the state of the Group’s and of the parent company’s entities, and we have fulfilled our other ethical responsibilities in affairs as at 31 March 2020 and of the Group’s profit for the accordance with these requirements. The non-audit services provided year then ended to the Group and parent company for the year are disclosed in note 8.1 to the financial statements. We confirm that the non-audit services • the Group financial statements have been properly prepared prohibited by the FRC’s Ethical Standard were not provided to the in accordance with International Financial Reporting Standards Group or the parent company. (IFRSs) as adopted by the European Union and IFRSs as issued by the International Accounting Standards Board (IASB) We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. • the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the 3. Summary of our audit approach Companies Act 2006 Key audit matters The key audit matters that we identified in the • the financial statements have been prepared in accordance current year were: with the requirements of the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the • Going concern IAS Regulation. • Impairment of goodwill • Prepaid revenue We have audited the financial statements which comprise: • Classification of legal and regulatory cases • the consolidated statement of comprehensive income Materiality The materiality we have used for the • the consolidated and parent company statement of financial Group financial statements is $30m which position represents 5.0% of profit before tax, 2.0% • the consolidated and parent company statements of changes of underlying earnings before interest, tax, in equity depreciation and amortisation (EBITDA) or 0.3% of total assets. • the consolidated statement of cash flows • the related notes 1 to 36 of the consolidated financial statements Scoping Our scope covered 17 components. Of these, • the related notes 1 to 10 of the parent company financial nine were full-scope audits, five were subject statements to specific procedures on certain account balances by component audit teams or the The financial reporting framework that has been applied in their Group audit team and the remaining three preparation is applicable law and IFRSs as adopted by the European were subject to analytical review procedures. Union and, as regards the parent company financial statements, as These covered 100% of Group profit before applied in accordance with the provisions of the Companies Act 2006. tax, EBITDA and total assets. 116 Airtel Africa plc Annual Report and Accounts 2020 © 2020 Friend Studio Ltd File name: AuditorsXReport_v52 Modification Date: 22 May 2020 10:18 am 4. Conclusions relating to going concern, principal risks and viability statement 4.1. Going concern We have reviewed the directors’ statement in note 2.2 to the financial statements about whether Going concern is the basis they considered it appropriate to adopt the going concern basis of accounting in preparing them and of preparation of the financial their identification of any material uncertainties to the Group’s and company’s ability to continue to statements that assumes do so over a period of at least 12 months from the date of approval of the financial statements. an entity will remain in We considered as part of our risk assessment the nature of the Group, its business model and related operation for a period of risks including, where relevant, the impact of the COVID-19 pandemic and Brexit, the requirements of at least 12 months from the applicable financial reporting framework and the system of internal control. We evaluated the the date of approval of the directors’ assessment of the Group’s ability to continue as a going concern, including challenging the financial statements. underlying data and key assumptions used to make the assessment, and evaluated the directors’ We confirm that we have plans for future actions in relation to their going concern assessment. nothing material to report, We are required to state whether we have anything material to add or draw attention to in relation to add or draw attention to in that statement required by Listing Rule 9.8.6R(3) and report if the statement is materially inconsistent respect of these matters. with our knowledge obtained in the audit. Our challenge of the directors’ going concern assessment and related disclosures have been identified as a key audit matter, which is discussed below in section 5.2. 4.2. Principal risks and viability statement Based solely on reading the directors’ statements and considering whether they were consistent Viability means the ability with the knowledge we obtained in the course of the audit, including the knowledge obtained in the of the Group to continue over evaluation of the directors’ assessment of the Group’s and the company’s ability to continue as a the time horizon considered going concern, we are required to state whether we have anything material to add or draw attention appropriate by the directors. to in relation to: We confirm that we have • the disclosures on pages 56-62 that describe the principal risks, procedures to identify emerging nothing material to report, risks, and an explanation of how these are being managed or mitigated add or draw attention to in • the directors’ confirmation on page 56 that they have carried out a robust assessment of the respect of these matters. principal and emerging risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity • the directors’ explanation on pages 63 and 64 as to how they have assessed the prospects of the Group, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions We are also required to report whether the directors’ statement relating to the prospects of the Group required by Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit. 5. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Airtel Africa plc Annual Report and Accounts 2020 117 © 2020 Friend Studio Ltd File name: AuditorsXReport_v52 Modification Date: 22 May 2020 10:18 am Financial statements Independent auditor’s report to the members of Airtel Africa plc continued 5.1. Going concern Key audit matter The Group made a profit before tax of $598m during the year ended 31 March 2020 and was in a net current liability description position of $817m at 31 March 2020. As set out in notes 23 to the financial statements, at 31 March 2020, the Group had committed facilities of $505m and uncommitted facilities of $363m. Net debt was $3.2bn. Subsequent to 31 March 2020, uncommitted facilities of $265m were converted into committed facilities. Net debt of $3.2bn includes $1.8bn of bonds which include cross-default clauses with the Group’s majority shareholder, Bharti Airtel Limited. There would be a covenant breach on these bonds should Bharti Airtel Limited (or any of their subsidiaries) default on any debt in excess of $50m. The $1.8 billion of bonds includes a $828m bond due for repayment in May 2021 and a $505m bond which includes an incurrence covenant which requires Bharti Airtel Limited‘s credit rating to be assessed as investment grade by at least two credit rating agencies; when breached this can reduce the ability of the Group to raise additional debt.