Blue Label Telecoms Integrated Annual Report 2019

10 Blue Label annual financial statements 2019 Independent auditor’s report to the shareholders of Blue Label Telecoms Limited continued Overall group materiality R77 600 000. How we determined it 0.3% of consolidated revenue. Rationale for the materiality benchmark applied Consolidated revenue was selected as the benchmark because, in our view it is the benchmark against which the performance of the Group can be consistently measured, as it is an indicator of market share which is considered to be the key objective and focus of the Group’s business model and users. We chose 0.3% based on our professional judgement and after consideration of the range of quantitative materiality thresholds that we would typically apply when using revenue to compute materiality. The considerations included taking cognisance of the intended users and distribution of the financial statements, the financial covenants held over the Group’s debt as well as the inherent risk of the entity. How we tailored our Group audit scope We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates. The Group is made up of five segments, African distribution, International distribution, Mobile, Solutions and Corporate which operate across eight countries and four continents. The Group’s main operating subsidiaries and associates are located in South Africa. In establishing the overall audit approach to the Group audit, we determined the type of work that needed to be performed at the local operations by ourselves, as the Group’s engagement team, or component auditors from other PwC network firms and firms external to PwC operating under our instructions. The Group’s operations vary in size. In total, 17 components were identified to be in full scope for Group reporting purposes due to their financial significance and risk characteristics. Detailed Group audit instructions were communicated to all components in scope, including Cell C Limited’s and Oxigen Services India’s component auditors, and comprehensive audit approach and strategy planning meetings were held with all reporting component teams before commencing their respective audits. Throughout the audit, various calls and discussions were held with the teams of the significant components. We also visited the component audit teams responsible for the audit of Cell C Limited as well as Blue Label Mexico. We assessed the competence, knowledge and experience of the component auditors, including the component auditors of Cell C Limited and Oxigen Services India and evaluated the procedures performed on the significant audit areas to assess the adequacy thereof in pursuit of our audit opinion on the consolidated financial statements. Where the work was performed by the component auditors, we determined the level of involvement we needed to have in the audit work at these operations to be able to conclude whether sufficient, appropriate audit evidence has been obtained as a basis for our opinion on the consolidated financial statements as a whole. Analytical procedures were performed over all components not in scope to assess whether any risks exist that would require additional audit procedures.