Mutapa Fund warned over ‘significant uncertainty' in valuing unquoted state enterprises

Grant Thornton has warned that the Mutapa Investment Fund faces significant estimation uncertainty in valuing its unquoted subsidiaries and associates, many of which were transferred to the Fund through recent statutory instruments.

In an emphasis‑of‑matter section of the audit report, the auditors said the fair value measurements rely heavily on hypothetical assumptions about future revenues, margins, capital expenditure, discount rates and long‑term growth expectations.

The auditors said these assumptions are highly sensitive to changes and could materially alter the reported values of the investments.

Mutapa's portfolio includes more than USD 14.7 billion in subsidiaries and USD 80 million in associates, many of which are unlisted and operate in volatile economic conditions.

The auditors did not modify their opinion on this basis but said users of the financial statements should be aware of the high level of judgement involved.