3.0 Management Letter 3.1  Structural Defect on Block F of the Iconic Building  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. The following were some of the matters raised and the management responses thereto:  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.  129 