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Investments and loans due from subsidiaries
Key Audit Matter
Our response
The financial statements of Autoneum Holding Ltd as
at December 31, 2016, include investments in the
amount of CHF 361.9 million, current loans due from
subsidiaries in the amount of CHF 34.7 million and
non-current loans due from subsidiaries in the
amount of CHF 253.0 million (thereof CHF 10.6
million subordinated). The company annually reviews
investments and loans due from subsidiaries for
impairment on an individual basis.
The impairment assessment of investments and
loans due from subsidiaries requires significant
management judgment, in particular in relation to the
forecast earnings and growth rates as well as
discount rates, and is therefore a key area that our
audit was concentrated on.
Our audit procedures included, amongst others,
evaluating the methodical and mathematical accuracy of
the model used for the impairment tests as well as the
appropriateness of management’s assumptions.
This comprised:
—
Agreeing forecasts used in the impairment tests
to current expectations of management.
—
Challenging the robustness of key assumptions
on a sample basis, based on our understanding of
the commercial prospects of the respective
entities.
In relation to evaluating the discount rates used, our
internal valuation specialists assisted us by comparing
the relevant inputs to industry and economic forecasts.
For further information on investments and loans due from subsidiaries refer to the following:
—
Note 4, Loans and receivables due from subsidiaries
—
Note 5, Investments
Responsibility of the Board of Directors for the Financial Statements
The Board of Directors is responsible for the preparation of the financial statements in accordance with the
provisions of Swiss law and the company’s articles of incorporation, and for such internal control as the Board of
Directors determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the entity’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 Board of Directors either intends to liquidate the entity or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 Swiss law and Swiss Auditing Standards will 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
financial statements.
As part of an audit in accordance with Swiss law and Swiss Auditing Standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
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Autoneum
Financial Report 2016
Financial Statements of Autoneum Holding Ltd