Chobe : INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF CHOBE HOLDINGS LIMITED

Firm of Chartered Accountants	Tel: [phone]
2nd Floor	Fax: [phone]
Plot 22, Khama Crescent	Email: [e-mail]
PO Box 41015	Partnership registered in Botswana
Gaborone, Botswana	Registration No: 10829
	VAT No: PO3625401112
	www.ey.com

Independent Auditor's Report

To the Shareholders of Chobe Holdings Limited

Report on the Audit of the Consolidated and Separate Financial Statements

Opinion

We have audited the consolidated and separate financial statements of Chobe Holdings Limited ("the Company") and its subsidiaries ("the Group") set out on pages 8 to 81, which comprise the consolidated and separate statements of financial position as at 29 February 2024, and the consolidated and separate statements of 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 the notes to the consolidated and separate financial statements, including a summary of material accounting information.

In our opinion, the consolidated and separate financial statements give a true and fair view of the consolidated and separate financial position of the Group and Company as at 29 February 2024, and of its consolidated and separate financial performance and of its consolidated and separate cash flows for the year then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board and the requirements of the Companies Act (CAP 42:01).

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 International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated and separate financial statements in Botswana. We have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated and separate financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated and separate financial statements.

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The Key Audit Matter applies to the audit of the consolidated and separate financial statements.

Key Audit Matter								How the matter was addressed in the audit
Impairment assessment of investments in
subsidiaries (separate financial statements) and	Our procedures included, with the involvement of our valuation
related goodwill (consolidated financial statements)	specialists, the following:
The Group recognised goodwill of P 67,963 thousand	►	We evaluated the appropriateness of management's valuation
(2023: P 67,963 thousand) at the reporting date,		models used to determine the fair value of each cash
comprising 10% (2023: 12%) of the Group's total		generating unit (CGU) by comparing these to the nature of the
assets. The Company recognised investments in		CGU's operations and our own knowledge of the valuation
subsidiaries of P103,058 thousand (2023: P101,627		models and models applied by similar organisations operating
thousand) at	the	reporting	date,	comprising	89%		in the same economic sector and geographical area.
(2023: 93%) of the Company's total assets.
		► We tested the mathematical accuracy of the valuation models
The impairment assessments are inherently uncertain
	used and compared the values calculated from the models to
and are subject to significant estimates, assumptions,		the amounts	included	and disclosed	in	the	financial
and judgements	by	the	Group	and	Company.
	statements.
Furthermore, the models used by the Group and
Company to determine impairments are complex, and	►	We performed a sensitivity analysis on the key assumptions
certain	inputs	used in	these	models are	not	fully		and estimates used in the valuation models to determine the
observable.
									impact on the valuation headroom for likely changes in these
The investments in subsidiaries and related goodwill		assumptions and estimates.
arose mostly from the acquisition of operating camps	►	The carrying value of the investments in subsidiaries were
and related lease holding/concessionaire companies.
	compared to the carrying value of the operating camps and
These	operating	camps		and	related	lease
		related lease holding/concessionaire companies	CGUs to
holding/concessionaire companies are considered the
	identify impairment indicators.
Cash Generating Units (CGUs) which generate
independent separately	identifiable	cash-flows, and	►	We assessed the reliability of management's estimation of
which forms the basis of identifying any impairment
	future cash flows from the operating camps and related lease
indictors related to the investment in the subsidiaries
	holding/concessionaire companies CGUs where we compared
and the related goodwill.
											these against past projections vs actual results, approved
The Group and Company use discounted cash flow		budgets for the Group and Company and we tested the
valuation models to calculate the value in use of the		reasonability of the underlying assumptions in determining the
operating	camps	and	related	for	lease		growth and discount rates against published rates and rates
holding/concessionaire	companies	CGUs	both		used by similar organisations operating in the same economic
goodwill	and	investments	in subsidiaries. These
	sector and geographical area.
discounted cash flow models include the following
significant estimates from which future cashflows are	►	We assessed the reasonableness of the significant estimates
generated:										used in the discounted cash flow model related to occupancy
∙ Expected revenue growth rates				base levels and rates, revenue growth rates and expected
			capital expenditure where we compared these with actual
∙	Expected	operating	expenditure,	including
	performance achieved in prior years and after the reporting
	allocation of central Group costs
				date as well as performance achieved by similar camps in the
∙	Expected capital expenditure
				Group.
∙	Expected occupancy rates
∙	Forecasted period	linked to the underlying	►	For the significant estimates used in the discounted cash flow
	lease agreements
							model related	to central group costs,	we	reviewed the
∙	Discount rates
							reconciliation at Group level of the central Group costs to
In addition, the investments in subsidiaries also include		ascertain the accuracy and completeness of the recharge of
the acquisition of an aviation company. This is also		costs incurred at head office level and the allocation thereof
considered a CGU which generates independent		to the respective camps.
separately identifiable cash-flows. The Group and		We assessed the reasonableness of the forecasted period used
Company use a fair value less costs to sell valuation	►
model to calculate the value in use of its aviation CGU.		in the discounted cash flow models by comparing these to the
The fair values of the aircraft, derived from values for		remaining land lease periods on which the CGUs operate.
similar aircrafts, form the basis of this model.		►	We calculated an independent range of the weighted average
Based on the Group and Company's assessment of the		cost of capital rate used as the discount rate in the discounted
goodwill as well as the underlying operations of the		cash flow models where we obtained independently sourced
respective subsidiaries, no impairment indicators were		data such as risk-free rates in the market, country risk
identified, and no impairments were required to be		premium, cost	of debt,	market risk	premium,	beta of
recognised for the investment in the subsidiaries or for

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Key Audit Matter		How the matter was addressed in the audit
the goodwill.		comparable companies and capital structure of the industry's
The impairment assessments of the goodwill	and	comparable companies and other macro-economic inputs. We
compared our independently calculated discount rate to the
investments in subsidiaries was considered to be a key
discount	rate		used by	management	and performed	a
audit	matter due to the level of judgement	and
sensitivity	analysis	for	likely changes	in these rates	to
assumptions applied in calculating the fair value of the
determine the impact on the valuation headroom per CGU.
cash generating units.
Disclosures with respect to goodwill and investments in	► For the aviation CGU, we compared the Group's estimated
market values of the aircraft to the estimated selling prices
subsidiaries are disclosed in:		obtained from external sources.
∙ Note 1.2(e) - Investments in subsidiaries		► We assessed	the	adequacy of the	disclosures of the
	accounting policy
		assumptions and judgments applied in assessing the
∙ Note 1.6(a) - Goodwill accounting policy
	impairment of investment in subsidiaries and goodwill for
∙ Note 2.2 - Critical accounting estimates and	compliance with	IFRS Accounting Standards as issued by the
	assumptions - Impairment of assets		International Accounting Standards Board.
∙	Note 12 - Goodwill
∙ Note 15 - Investments in subsidiaries

Other Matter

The consolidated and separate financial statements of Chobe Holdings Limited for the year ended 28 February 2023, were audited by another auditor who expressed an unmodified opinion on those financial statements on 30 May 2023.

Other Information

The directors are responsible for the other information. The other information comprises the information included in the 81- page document titled "Chobe Holdings Limited Consolidated and Separate Financial Statements for the year ended 29 February 2024", which includes the Corporate Information, the Group Structure and the Directors' Report including the Approval of Financial Statements as required by the Companies Act (CAP 42:01) obtained prior to the date of this report and the Chobe Holdings Limited's Integrated Report which is expected to be made available to us after that date. The other information does not include the financial statements and the 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 IFRS Accounting Standards as issued by the International Accounting Standards Board and the requirements of the Companies Act (CAP 42:01) and for such internal control as the directors determine is necessary to enable the preparation of the 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 and 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 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

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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.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group and Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors' use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and/or Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group and /or Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable actions taken to eliminate threats or safeguards applied.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Ernst & Young

Practicing member: Francois J Roos

Membership number: CAP 0013 2024

Certified Auditor

Gaborone

30 May 2024

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