CIM FINANCE. INTEGRATED REPORT 2022 | 95 INDEPENDENT AUDITOR’S REPORT To the Shareholders of Cim Financial Services Ltd Report on the Audit of the Consolidated And Separate Financial Statements (Cont’d) Key Audit Matters (Continued) Audit Response • We carried out test of controls around the impairment process, governance, approval and implementation of the ECL model. • We used our IT Specialist and discussed with management to assess the completeness, accuracy and validity of data and inputs used during the development and application of the ECL models scoped ; CFA and Cards, Personal Loans, Finance Leases and Factoring. • We assessed the competence, independence and integrity of the management’s credit specialist. • We obtained and tested loan arrears reports and ensured all those arrears exceeding 90 days past due were included in the impaired portfolio category for specific impairment assessment. • We assessed proper staging of all financial asset portfolios. • We obtained explanation for customers on caution lists and assessed their staging. • We engaged with our credit specialist and: - Gained an understanding of the nature of the underlying loans in the loan portfolio. - Reviewed the updated ECL methodology for compliance with IFRS 9 Financial Instruments principles and best practice. - Reviewed and reperformed the management ECL revisedmodel calculations for accuracy and consistency with theupdated ECL methodology. - Obtained the appropriatemanagement data and perform the relevant procedures to prepare the management data for the challenger ECLmodel using independent inputs (PD, LGD, EAD, CCF and forward-lookingmacro-economic factors). - Held regular discussions withmanagement to understand and resolve the differences arrived at based on managagement’s calculations and the challenger model. • We reviewed minutes of Risk Management Committee to identify any matter relating to ECL such as inputs used in calculation of post-model management adjustments. • We performed an analytical review and analysed year on year variances and movement in ECL and linked to movement in gross loans and obtained explanations from management. • Where exposures are collateralised, we evaluated the Company’s legal rights to the collateral, as well as the appropriateness of the valuations of the collateral in relation to ECL determination, and the linking of collateral to the corresponding accounts. We reviewed the reconciliation and allocation of the General Ledger balances to which the impairment parameters are applied. • We also reviewed and assessed the completeness of the disclosures in the Financial Statements for compliance with International Financial Reporting Standards including disclosure on significant inputs. Other Information The directors are responsible for the other information. The other information comprises the information included in the Integrated Report report, but does not include the consolidated and separate financial statements and our auditor’s report thereon. We have obtained prior to the date of this auditor’s report the statement of compliance, the corporate governance report, the other statutory disclosures, and the statement of directors’ responsibilities in respect of the presentation of the consolidated and separate financial statements and the company secretary’s certificate. All other information in the Integrated Report will be made available to us after that date. Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express 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, 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 Directors and Those Charged with Governance 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 in compliance with the requirements of the Mauritian Companies Act 2001, 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 frommaterial misstatement, whether due to fraud or error. Inpreparing the consolidatedandseparatefinancial statements, the directors are responsible for assessing the Group 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 the Company or to cease operations, or have no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group and the Company’s financial reporting process.
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