Economic Zones as identified by the Government of Botswana. To assist the Government in promoting these zones, the company marked down the values of these lands from their fair values that were earlier determined while forming part of investment properties and the write-down represented a loss on account of such mark down. 

## 3.0 Management Letter 

The following were some of the matters raised and the management responses thereto: 

## 3.1 Structural Defect on Block F of the Iconic Building 

It was observed that during the prior year, the investment property under construction, which was measured at cost in line with the requirements of International Accounting Standard 40, developed certain cracks and structural defects in one portion of the building. As at year-end, management had engaged engineering experts to determine the cause and remedy for these defects. As of 2 July 2018, the experts had issued a report on the cause and remedial actions to be taken to rectify the defects. Based on their assessment, the additional costs for the remedial actions were estimated to be approximately P24.61 million. To augment the resources and capital required to undertake the repairs and for the completion of the construction, the Government of Botswana had approved to fund these expenses intermittently. The company continued to engage with the legal experts to pursue the reimbursement of the above remedial costs from the service providers who were considered to be potentially at fault for these cracks and defects. Due to the technical complexities and administrative impracticalities surrounding the defects, it was not possible to determine if the additional costs would increase the value of the building significantly after the remedial measures and its costs. Once the building is completed, it is presumed that the fair value of the investment property can be reliably measured and the company shall effect any changes to the value including any impairment as is necessary after a valuation exercise is undertaken. 

In response management noted the observation and committed to closely monitor the remedial solution program and associated costs to ensure delivery within the approved time and budget. 

