EcoCash Zimbabwe : FY24 Results & Audit Opinion

(Incorporated in Zimbabwe on 29 March 2012 under Company Registration Number 2487/2012)

ZSE Alpha Code: EHZL.zw ISIN ZW0009012437

Audited Abridged

Consolidated Financial Statements

for the year ended 29 February 2024

H I G H L I G H T S

Revenue

Increased by

64%

ZW$875 billion

Key Performance Indicators (Continuing Operations)
Gross Profit		Profit after Tax		Basic earnings per share
Increased by		Increased by		Increased by
63%		423%		357%
ZW$758 billion		ZW$287 billion		ZW$88.17

Digitally

Empowering

People

F I NT E C H

DIGITAL PLATFORMS

INSURTECH

Chairperson's statement

OPERATING ENVIRONMENT

FY24 was a pivotal year for EcoCash Holdings, characterized by a drive to consolidate and expand our services, building on the efforts and achievements of the preceding year. During the year, EcoCash Holdings navigated a dynamic operating environment characterized by evolving market trends and regulatory changes. We remained agile and adaptive, capitalizing on emerging opportunities while addressing challenges to sustain our leadership in the digital financial services sector. Our dedication to delivering cutting-edge solutions and customer- centric services has positioned us at the forefront of the evolving digital financial landscape.

KEY DEVELOPMENTS

Scheme of Reconstruction

The EGM to consider and approve the proposed scheme of reconstruction was held on the 17th of April 2024. The shareholders approved the scheme of reconstruction where all non-banking assets will be transferred from EcoCash Holdings Zimbabwe Limited to Econet Wireless Zimbabwe Limited. The Scheme of Reconstruction will not result in the delisting of EcoCash Holdings Zimbabwe Limited from the Zimbabwe Stock Exchange.

Subject to regulatory approval, only the banking unit, Steward Bank, will remain under EcoCash Holdings and has been classified as Continuing Operations in the audited Financials under review. Businesses transferring to Econet have been classified as Discontinuing Operations and are shown separately in the Financial Statements in line with IFRS 5 "Non- current Assets Held for Sale and Discontinued Operations".

OPERATIONS REVIEW

Continuing Operations

Digital Banking

The financial year under review reflects a decade of Steward Bank promoting digital financial inclusion through pioneering products and services in the Zimbabwean market. The bank has been at the forefront of competitiveness in the banking industry pushing boundaries to provide innovative banking solutions.

The banking services division has observed considerable growth in the adoption of USD banking services. Notably, VISA card transaction values achieved a 115% increase affirming the bank's position as a market leader.

The increasing prevalence of USD transactions in the economy has been followed by considerable growth in FCA accounts. To further enhance the USD banking experience for customers, Steward Bank introduced

the FCA Debit card, providing added convenience for local USD transactions. This addition aligns with our commitment to offering seamless and accessible banking services. The Point of Sale (POS) network saw improved devices distributed throughout our network of merchant partners for acquiring both local currency and USD transactions on the same POS device.

The launch of the Agent Portal to support the agency banking model during the year has significantly improved access for Steward Bank customers. With the integration of USSD services, the Agent Portal enables customers to access banking services through a simple mobile device, expanding the reach of our services to 130 locations and improving customer experience.

Steward Bank is fully compliant with the Tier 1 capital requirements prescribed by the Reserve Bank of Zimbabwe.

Discontinued Operations

Mobile Money

The mobile money business experienced consistent growth in customer base, transaction volumes and values particularly for USD transactions, due to the efficient distribution network, enhanced customer experience, and sustained innovation. EcoCash also reintroduced Kashagi loans in USD, making the loan application process instant and hassle-free. The mobile money partnership network expanded significantly, enabling various sectors such as agriculture, corporates, NGOs, and pensions to process payroll and cash disbursements conveniently. Integration of USD payments rails with partners and banking institutions further strengthened EcoCash's value proposition, providing customers with a wider range of services and benefits.

Insurtech

EcoSure, the life insurance division, witnessed growth in the core funeral value proposition and relaunched the "Enda Education Cover" to provide comprehensive coverage for your child's education in case of unfortunate events. The year saw the introduction of "Airtime Cover," a unique bundled product that bundles airtime and data purchases with life insurance cover. The company has seen significant growth in USD policies, on account of synergies realized from the uptake of the USD EcoCash wallet.

The short-term insurance business, Moovah, has forged strategic partnerships to enhance the efficiency of insurance claim resolutions, particularly for vehicles. The number of customer touch points for vehicle insurance has increased from 150 to 250 by the end of FY24, resulting in an increase of our market share. The goal is to provide exceptional service standards and convenience for our customers, with partnerships benefiting key sectors such as mining, manufacturing, tourism, and agriculture.

Other business segments

Vaya Technologies has focused on nurturing anchor businesses in Healthtech, Agritech, and On-Demand Services. They have expanded their offerings and delivered innovative solutions in these sectors. One of Vaya Technologies' recent launches, 'Asset Track,' is an IoT-powered solution that has contributed to a 32% growth in connections. Vaya Technologies is committed to enhancing and optimizing products and services in these sectors, driven by a strong belief in the potential and opportunities they offer.

FINANCIAL PERFORMANCE

On the 5th of April 2024, Statutory Instrument 60 of 2024 was gazetted where the Reserve Bank of Zimbabwe issued a new currency, Zimbabwe Gold (ZiG), which replaced the Zimbabwe Dollar. This report has been presented in ZW$ which is the reporting currency for the year ended 29 February 2024.

The report of the Directors is based on inflation- adjusted financial statements, which are the primary financial statements. Historical financial statements have been presented as supplementary information. To comply with International Accounting Standard 29

• Financial Reporting in Hyperinflationary Economies (IAS 29) in the preparation of our financial statements, the Group estimated and applied inflation rates for the year ended 29 February 2024 based on the Total Consumption Poverty Line published by ZIMSTAT. The Directors caution users of the financial statements on the usefulness of these reported inflation -adjusted financial results, in light of distortions that arise when reporting in a hyperinflationary economy.

The results for Ecocash Holdings continuing operations exclude the businesses transferring to EWZL in line with IFRS 5 "Non-Current Assets Held for Sale and discontinued operations.

EcoCash Holdings recorded revenue of ZW$874.7 billion for the period, a 64% increase from the prior period's ZW$534.1 billion. Profit for the year was ZW$287.3 billion, a 423% increase from prior year loss of ZW$89 billion. Foreign exchange losses from debentures reduced by 40% compared to prior year following the settlement of the debentures during the year. The Group is confident that the Bank's contribution will grow next year on the back of the Bank's diversification strategy.

The loss for the year from discontinued operations was ZW$42.1 billion, a reduction from the previous year's position of ZW$151.6 billion due to the cost optimisation that increased operational efficiencies.

The business continues to leverage on technology to strengthen the control environment in line with the combined assurance model.

DIVIDEND DECLARATION

The Directors have decided not to declare a dividend for the period under review as they continue to assess the economic environment.

SUSTAINABILITY

The Group maintains a steadfast dedication to upholding the principles of the Global Reporting Initiative ("GRI") protocol. This dedication aligns with internationally recognized frameworks for responsible business conduct, including the UN Global Compact's ten principles. Our commitment extends to ensuring long-term sustainability by adhering to robust environmental, social, and governance (ESG) practices. Our ESG approach is aligned with the relevant Sustainable Development Goals ("SDGs"). We are committed to sustainable development within our operating environment. As we strive for long- term business success, we persistently reinforce our sustainability practices and values throughout our operations, continuously seeking improvement.

BUSINESS OUTLOOK

Post the Scheme of Reconstruction, the Bank, which will be the remaining unit under EcoCash Holdings, is poised to drive a digital banking expansion as it invests in technologies to enhance operational efficiencies and increase the product offering to customers. These technological innovations will necessitate a parallel scaling up of the Bank's underlying systems and processes and grow shareholder value.

The businesses being transferred to EWZL post the scheme of reconstruction will leverage on the MNO customer base and technologies to scale up and increase operating efficiencies through leveraging on synergies.

APPRECIATION

On behalf of the Board, I extend heartfelt gratitude to our customers, business partners, shareholders, and other stakeholders for their unwavering support. I would also like to extend my gratitude to the EcoCash Holdings employees, management, executive team, and my fellow directors for their effort during the year under review. Their unwavering passion, commitment, and dedication has been pivotal to ensuring our continuous growth and prosperity.

On behalf of the Board

Sherree Shereni

Board Chairperson

24 June 2024

DIRECTORS: Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Ms E.T. Masiyiwa, Mr C. Maswi, Mr D. Musengi,

Mr H. Pemhiwa, Mr D.T. Mandivenga, Mr E. Chibi*, Mrs T. Nyemba*. * Executive. | COMPANY SECRETARY: Mrs C.R. Daniels

REGISTERED OFFICE: 1906 Liberation Legacy Way, Borrowdale, Harare.

www.ecocashholdings.co.zw

(Incorporated in Zimbabwe on 29 March 2012 under Company Registration Number 2487/2012) ZSE Alpha Code: EHZL.zw ISIN ZW0009012437

Audited Abridged Consolidated Financial Statements For the year ended 29 February 2024

Abridged Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 29 February 2024

	INFLATION ADJUSTED	HISTORICAL COST*
		2023		2023
	2024	ZW$ '000	2024	ZW$ '000
Notes	ZW$ '000	Restated**	ZW$ '000	Restated**
Continuing Operations
Revenue	874,707,786	534,101,367	182,235,861	22,214,861
- Interest revenue calculated using
the effective interest method	200,077,614	236,514,981	41,629,273	10,073,284
- Non-interest revenue	674,630,172	297,586,386	140,606,588	12,141,577
Cost of sales and external services
rendered	(83,632,837)	(45,383,179)	(18,940,298)	(1,978,465)
Impairment on financial assets charge:
expected credit loss allowances on
loans and advances to bank customers	(33,293,529)	(23,216,541)	(33,293,529)	(1,241,669)
Gross profit	757,781,420	465,501,647	130,002,034	18,994,727
Other income	126,117,057	112,002,237	614,298,166	18,671,813
Other expenses	(398,580,254)	(89,484,210)	(50,568,727)	(1,031,671)
General administrative expenses:	(1,309,301,048)	(227,908,371)	(131,298,214)	(9,429,996)
- Administration expenses	(716,045,230)	(412,872,826)	(148,617,483)	(16,964,516)
- Impairment on financial assets
charge: expected credit loss
allowances on items other than
loans and advances	(39,107,690)	(38,453,037)	(39,642,081)	(3,165,710)
- Depreciation, amortisation and
impairment	(93,734,256)	(75,304,508)	(14,376,753)	(1,609,462)
- Foreign exchange (losses) / gains
arising from items other than
debenture related liabilities	(460,413,872)	298,722,000	71,338,103	12,309,692
Marketing and sales expenses	(60,048,455)	(32,937,273)	(11,745,809)	(1,344,083)
Foreign exchange losses arising from
debenture related liabilities	(350,525,206)	(586,052,671)	(79,216,601)	(22,101,579)
Gain on net monetary position	1,671,053,344	506,929,298	-	-
Profit before net finance costs	436,496,858	148,050,657	471,470,849	3,759,211
Finance costs	(30,378,592)	(49,155,265)	(3,600,258)	(1,080,329)
Profit before taxation	406,118,266	98,895,392	467,870,591	2,678,882
Income tax expense	(76,686,078)	(36,327,231)	(47,186,606)	(3,126,061)
Profit / (Loss) for the year	329,432,188	62,568,161	420,683,985	(447,179)

Abridged Consolidated Statement of Profit or Loss and Other Comprehensive Income (continued)

For the year ended 29 February 2024

		INFLATION ADJUSTED	HISTORICAL COST*
			2023		2023
		2024	ZW$ '000	2024	ZW$ '000
	Notes	ZW$ '000	Restated**	ZW$ '000	Restated**
Discontinued operations
(Loss) / Profit for the year from
discontinuing operations	(42,092,328)	(151,597,059)	(39,225,790)	1,400,692
Profit / (Loss) for the year	287,339,860	(89,028,898)	381,458,195	953,513
Other comprehensive income for
the year Items that may not to be
reclassified to profit or loss	60,316,918	375,686,484	534,810,433	29,255,112
Gain arising on revaluation of
property and equipment	82,104,723	498,642,109	715,131,727	38,750,465
Taxation effect of other
comprehensive income	(21,787,805)	(122,955,625)	(180,321,294)	(9,495,353)
Comprehensive income for the year	347,656,778	286,657,586	916,268,628	30,208,625
Profit / (Loss)	for the year
attributable to:	287,339,860	(89,028,898)	381,458,195	953,513
Equity holders of parent	293,671,284	(72,155,715)	371,340,831	866,650
Non-controlling interest	(6,331,424)	(16,873,183)	10,117,364	86,863
Other comprehensive income
attributable to:	60,316,918	375,686,484	534,810,433	29,255,112
Equity holders of parent	59,810,982	372,535,242	529,656,895	28,973,204
Non-controlling interest	505,936	3,151,242	5,153,538	281,908
Total comprehensive income for the
year		347,656,778	286,657,586	916,268,628	30,208,625
Earnings per share attributable to
owners of the parent in the financial
statements
Basic and diluted earnings / loss per
share (ZW$)	7	88.168	(34.366)	117.048	0.368
Headline earnings / (loss) per share
(ZW$)	7	87.970	(12.970)	117.019	0.446

*The historical cost financial information is unaudited and has been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019. The audited inflation adjusted results represent the primary financial information required by IAS 29 and in respect of which the auditors have expressed their opinion.

**Comparatives have been restated as per par 34 of IFRS 5.

Abridged Consolidated Statement of Financial Position

As at 29 February 2024

		INFLATION ADJUSTED		HISTORICAL COST*
		2024	2023	1 March 2022	2024	2023	1 March 2022
	Notes	ZW$ '000	ZW$ '000	ZW$ '000	ZW$ '000	ZW$ '000	ZW$ '000
ASSETS
Intangible assets		167,300,295	178,041,698	179,631,315	4,182,270	1,181,335	684,994
Property and equipment		336,892,590	843,525,400	585,049,905	287,210,788	43,232,014	8,490,288
Right of use assets		16,660,677	13,225,570	8,678,177	693,144	421,275	43,306
Investment property		395,572,000	413,236,461	114,173,431	395,572,000	22,100,747	1,888,757
Inventories		25,584,931	33,771,833	47,790,303	1,734,976	730,666	115,592
Current tax assets		16,249,678	-	-	16,249,678	-	-
Amounts owed by related party companies		1,562,465	2,838,371	7,302,614	1,562,465	151,802	120,284
Trade and other receivables		165,671,972	515,741,069	416,276,489	114,445,878	22,793,338	5,954,483
Loans and advances to bank customers		426,803,977	522,575,302	403,890,004	426,803,977	27,948,416	6,681,503
Treasury bills and government bonds		158,276,467	228,634,678	353,249,363	158,276,467	12,227,859	5,843,761
Financial assets at fair value through profit and loss	8	165,752,221	199,323,891	369,276,618	165,752,221	10,660,257	6,108,898
Insurance contract assets		-	-	55,286	-	-	915
Reinsurance contract assets		-	44,132,119	57,996,608	-	1,963,859	949,520
Cash and cash equivalents		351,760,377	753,264,724	400,515,865	351,760,377	40,286,167	6,625,685
Total assets from Continuing operations		2,228,087,650	3,748,311,116	2,943,885,978	1,924,244,241	183,697,735	43,507,986
Assets in disposal group classified as held for sale		1,539,745,308	-	-	1,185,653,338	-	-
Total assets		3,767,832,958	3,748,311,116	2,943,885,978	3,109,897,579	183,697,735	43,507,986
EQUITY AND LIABILITIES
Capital and reserves
Share capital and share premium		164,755,039	8,619,185	8,619,185	156,138,477	2,591	2,591
(Accumulated losses) / Retained earnings		(17,235,811)	(310,907,095)	(195,260,968)	372,481,888	1,141,057	994,130
Other reserves		1,310,208,203	1,252,948,995	880,622,720	562,509,845	34,840,150	5,902,755
Equity attributable to owners of parent		1,457,727,431	950,661,085	693,980,937	1,091,130,210	35,983,798	6,899,476
Non-controlling interest		19,136,998	24,962,486	(3,225,878)	16,228,152	957,250	376,820
Total equity		1,476,864,429	975,623,571	690,755,059	1,107,358,362	36,941,048	7,276,296
			-	-		-	-
Liabilities
Deferred tax liabilities		122,903,464	158,715,712	134,442,424	63,414,086	7,572,077	1,498,198
Lease liabilities		6,918,848	15,433,804	3,694,639	6,918,848	825,432	61,120
Provisions		-	28,375,338	106,962,918	-	1,756,213	362,939
Corporate tax liability		-	61,308,083	6,264,621	-	3,278,884	96,625
Loans and borrowings		1,214,402	121,099,676	245,770,361	1,214,402	6,476,663	4,065,749
Amounts owed to related party companies		80,779,868	598,327,735	256,771,522	80,779,868	31,999,814	4,247,741
Trade and other payables		232,272,266	475,171,609	209,114,529	232,272,266	25,013,350	5,567,836
Mobile money trust liabilities	9	-	345,417,787	327,257,818	-	18,473,663	5,413,786
Deposits due to banks and customers		727,520,120	862,114,188	771,923,849	727,520,120	46,107,663	12,769,841
Insurance contract liabilities		-	106,723,613	190,895,968	-	5,252,928	2,146,129
Reinsurance contract liabilities		-	-	32,270	-	-	1,726
Total liabilities from continuing operations		1,171,608,968	2,772,687,545	2,253,130,919	1,112,119,590	146,756,687	36,231,690
Liabilities in disposal group classified as held for sale		1,119,359,561	-	-	890,419,627	-	-
Total liabilities		2,290,968,529	2,772,687,545	2,253,130,919	2,002,539,217	146,756,687	36,231,690
Total equity and liabilities		3,767,832,958	3,748,311,116	2,943,885,978	3,109,897,579	183,697,735	43,507,986
*Comparatives are not restated as per IFRS 5 PAR 40 which exempts the restatement of comparatives in the Statement of Financial Position.
**The Group is presenting a statement of financial position as at 1 March 2022 to reflect the initial application of IFRS 17, Insurance contracts.
DIRECTORS: Mrs S.G. Shereni (Chairperson),	Mr M.L. Bennett, Dr Z. Dillon, Ms E.T. Masiyiwa, Mr C. Maswi, Mr D. Musengi, Mr H. Pemhiwa,	www.ecocashholdings.co.zw

Mr D.T. Mandivenga, Mr E. Chibi*, Mrs T. Nyemba*. * Executive. | REGISTERED OFFICE: 1906 Liberation Legacy Way, Borrowdale, Harare.

(Incorporated in Zimbabwe on 29 March 2012 under Company Registration Number 2487/2012) ZSE Alpha Code: EHZL.zw ISIN ZW0009012437

Audited Abridged Consolidated Financial Statements For the year ended 29 February 2024

Abridged Consolidated Statement of Cashflows

For the year ended 29 February 2024

	INFLATION ADJUSTED	HISTORICAL COST*
		2023		2023
	2024	ZW$ '000	2024	ZW$ '000
	ZW$ '000	Restated**	ZW$ '000	Restated**
Operating activities
Cash generated from operations	98,666,411	361,189,832	437,335,446	26,184,216
Corporate tax paid	(131,399,448)	(14,336,506)	(78,633,101)	(708,740)
Net cash flows (utilised) / generated from
operating activities	(32,733,037)	346,853,326	358,702,345	25,475,476
Investing activities
Dividends received	-	117,929,942	-	4,464,085
Investment income received	7,496,828	8,270,377	1,115,037	378,772
Acquisition of investment property	(36,566,063)	(56,956,264)	(6,889,654)	(1,072,607)
Acquisition of intangible assets	(15,121,507)	(3,822,678)	(3,560,433)	(192,112)
Net acquisition of financial assets at fair value
through profit or loss	(836,773)	(1,539,020)	(836,773)	(705,807)
Proceeds from disposal of assets held for sale	-	31,558	-	522
Purchase of property and equipment	(90,292,870)	(27,045,064)	(20,507,433)	(1,175,800)
Proceeds on disposal of property and
equipment	-	24,023	-	423
Net cash (utilised) or generated from investing
activities	(135,320,385)	36,892,874	(30,679,256)	1,697,476
Financing activities
Interest on lease liability paid	(1,871,499)	(1,588,238)	(348,528)	(49,351)
Proceeds from rights issue	1,010,314,472	-	165,750,504	-
Repayment of Debenture liability	(942,457,533)	-	(154,618,008)	-
Rights offer expenses	(67,856,939)	-	(11,132,496)	-
Proceeds from loans and borrowings	-	32,140,539	-	1,718,943
Repayment of loans and borrowings	-	(14,628,131)	-	(963,663)
Finance costs paid	(28,507,093)	(41,173,246)	(3,251,731)	(1,831,123)
Lease repayments	(6,370,891)	(2,096,207)	(1,268,160)	(118,813)
Net cashflows utilised in financing activities	(36,749,483)	(27,345,283)	(4,868,419)	(1,244,007)
Net (decrease) / increase in cash and cash
equivalents	(204,802,905)	356,400,917	323,154,670	25,928,945
Cash and cash equivalents at the beginning
of the year	557,106,919	203,421,116	29,149,344	3,365,629
Expected credit losses (ECL)	(543,637)	(2,715,114)	(543,637)	(145,230)
Cash and cash equivalents at the end
of the year	351,760,377	557,106,919	351,760,377	29,149,344

**Comparatives have been restated as per par 34 of IFRS 5.

Abridged Consolidated Statement of Changes in Equity

For the year ended 29 February 2024

			INFLATION ADJUSTED
				Attributable
	Share capial		Other	to equity	Non-
	and share	Retained	reserves	holders of	controlling
	premium	earnings	(Note 22)	the entity	interest	Total
	ZW$'000	ZW$ '000	ZW$ '000	ZW$'000	ZW$'000	ZW$'000
Balance at 1 March 2022
as previously reported	8,619,185	(185,749,476)	880,622,720	703,492,429	(1,867,093)	701,625,336
Effect of initial application
of IFRS 17	-	(9,511,492)	-	(9,511,492)	(1,358,785)	(10,870,277)
Restated balances as at
1 March 2022	8,619,185	(195,260,968)	880,622,720	693,980,937	(3,225,878)	690,755,059
Profit for the year	-	(72,155,715)	-	(72,155,715)	(16,873,183)	(89,028,898)
Impact of IFRS 17
restatement	-	(4,480,395)	-	(4,480,395)	(640,056)	(5,120,451)
Other comprehensive
income:	-	-	372,535,242	372,535,242	3,151,242	375,686,484
Revaluation of property
and equipment net of tax	-	-	372,535,242	372,535,242	3,151,242	375,686,484
Total comprehensive
income	-	(76,636,110)	372,535,242	295,899,132	(14,361,997)	281,537,135
Transfers within and out
of reserves	-	(39,010,017)	(208,967)	(39,218,984)	42,550,361	3,331,377
Non-controlling interests
share of capitalisation of
a subsidiary	-	-	-	-	3,331,377	3,331,377
Transfer from reserves to
non-controlling interests	-	(39,010,017)	(208,967)	(39,218,984)	39,218,984	-
Restated balance at
28 February 2023	8,619,185	(310,907,095)	1,252,948,995	950,661,085	24,962,486	975,623,571
Profit/(loss)for the year	-	293,671,284	-	293,671,284	(6,331,424)	287,339,860
Other comprehensive
income	-	-	59,810,982	59,810,982	505,936	60,316,918
Revaluation of property
and equipment net of tax	-	-	59,810,982	59,810,982	505,936	60,316,918
Total comprehensive
income	-	293,671,284	59,810,982	353,482,266	(5,825,488)	347,656,778
Transfers within reserves	156,135,854	-	(2,551,774)	153,584,080	-	153,584,080
Issue of shares	156,135,854	-	-	156,135,854	-	156,135,854
Purchase of treasury
shares	-	-	(2,551,774)	(2,551,774)	-	(2,551,774)
Balance at
29 February 2024	164,755,039	(17,235,811)	1,310,208,203	1,457,727,431	19,136,998	1,476,864,429

Abridged Consolidated Statement of Changes in Equity (continued)

For the year ended 29 February 2024

			HISTORICAL COST*
	Share			Attributable
	capial		Other	to equity	Non-
	and share	Retained	reserves	holders of	controlling
	premium	earnings	(Note 22)	the entity	interest	Total
	ZW$'000	ZW$ '000	ZW$ '000	ZW$'000	ZW$'000	ZW$'000
Balance at 1 March 2022
as previously reported	2,591	1,229,712	5,902,755	7,135,058	400,432	7,535,490
Effect of initial application
of IFRS 17	-	(235,582)	-	(235,582)	(23,612)	(259,194)
Restated balances as at
1 March 2022	2,591	994,130	5,902,755	6,899,476	376,820	7,276,296
Profit for the year	-	866,650	-	866,650	86,863	953,513
Impact of IFRS 17
restatement	-	(647,097)	-	(647,097)	(64,858)	(711,955)
Other comprehensive
income:	-	-	28,973,204	28,973,204	281,908	29,255,112
Revaluation of property
and equipment net of tax	-	-	28,973,204	28,973,204	281,908	29,255,112
Total comprehensive
income	-	219,553	28,973,204	29,192,757	303,913	29,496,670
Transfers within and out
of reserves	-	(72,626)	(35,809)	(108,435)	276,517	168,082
Non-controlling interests
share of capitalisation of
a subsidiary				-	168,082	168,082
Transfer from reserves to
non-controlling interests	-	(72,626)	(35,809)	(108,435)	108,435	-
Restated balance at
28 February 2023	2,591	1,141,057	34,840,150	35,983,798	957,250	36,941,048
Profit/(Loss)for the year	-	371,340,831	-	371,340,831	10,117,364	381,458,195
Other comprehensive
income	-	-	529,656,895	529,656,895	5,153,538	534,810,433
Revaluation of property
and equipment net of tax	-	-	529,656,895	529,656,895	5,153,538	534,810,433
Total comprehensive
income	-	371,340,831	529,656,895	900,997,726	15,270,902	916,268,628
Transfers within reserves	156,135,886	-	(1,987,200)	154,148,686	-	154,148,686
Issue of shares	156,135,886	-	-	156,135,886	-	156,135,886
Purchase of treasury
shares	-	-	(1,987,200)	(1,987,200)	-	(1,987,200)
Balance at
29 February 2024	156,138,477	372,481,888	562,509,845	1,091,130,210	16,228,152	1,107,358,362

*The historical cost financial information is unaudited and has been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019. The audited inflation adjusted results represent the primary financial information required by IAS 29 and in respect of which the auditors have expressed their opinion.

Abridged Consolidated Segment Information

For the year ended 29 February 2024

		INFLATION ADJUSTED
			Adjustment
	Digital	Holding	Journal &
	Banking	Company	Eliminations	Total
	ZW$ '000	ZW$'000	ZW$ '000	ZW$'000
For the year ended 29 February 2024
Interest income	200,077,614	-	-	200,077,614
Non interest income	745,885,404	-	(71,255,232)	674,630,172
Finance costs	(1,871,499)	(28,507,093)	-	(30,378,592)
Fair value adjustments on financial assets	56,334,824	89,570,776	-	145,905,600
Depreciation, amortisation and impairment	(93,734,256)	-	-	(93,734,256)
Segment profit / (loss)	68,503,209	326,498,338	(65,569,359)	329,432,188
Segment assets	2,152,643,630	1,199,418,592	(1,123,974,572)	2,228,087,650
Segment liabilities	1,154,507,392	156,535,787	(139,434,211)	1,171,608,968
Analysis of additions during the year
Additions to property and equipment	15,121,507	-	-	15,121,507
Additions to intangible assets	-	-	-	-
Additions to investment properties	836,773	-	-	836,773
For the year ended 28 February 2023
Interest income	236,514,981	-	-	236,514,981
Non interest income	354,322,863	-	(56,736,477)	297,586,386
Finance costs	(1,588,457)	(41,173,265)	-	(42,761,722)
Fair value adjustments on financial assets	(55,458,114)	8,832,801		(46,625,313)
Depreciation, amortisation and impairment	(75,304,508)	-	-	(75,304,508)
Segment profit / (loss)	278,994,814	(18,743,903)	(197,682,750)	62,568,161
Segment assets	2,465,147,204	1,258,618,726	(635,111,273)	3,088,654,657
Segment liabilities	1,520,056,445	1,585,353,605	(332,722,505)	2,772,687,545
Analysis of additions during the year
Additions to property and equipment	27,052,648	-	-	27,052,648
Additions to intangible assets	1,871,499	-	-	1,871,499
Additions to investment properties	56,964,123	-	-	56,964,123
		HISTORICAL COST*
For the year ended 29 February 2024
Interest income	41,629,273	-	-	41,629,273
Non interest income	154,204,462	-	(13,597,874)	140,606,588
Finance costs	(348,527)	(3,251,731)	-	(3,600,258)
Fair value adjustments on financial assets	102,719,266	57,829,110	-	160,548,376
Depreciation, amortisation and impairment	(14,376,754)	-	-	(14,376,754)
Segment profit / (loss)	553,409,333	(171,951,141)	-	381,458,192
Segment assets	1,892,214,585	42,536,629	(10,506,973)	1,924,244,241
Segment liabilities	1,100,607,121	156,535,787	(145,023,318)	1,112,119,590
Analysis of additions during the year
Additions to property and equipment	20,507,433	-	-	20,507,433
Additions to intangible assets	3,560,433	-	-	3,560,433
Additions to investment properties	6,889,654	-	-	6,889,654
For the year ended 28 February 2023
Interest income	10,073,284	-	-	10,073,284
Non interest income	14,427,403	-	(2,285,826)	12,141,577
Finance costs	(49,351)	(1,831,123)	800,145	(1,080,329)
Fair value adjustments on financial assets	698,164	446,038	446,037	1,590,239
Depreciation, amortisation and impairment	(1,609,461)	-	-	(1,609,461)
Segment profit / (loss)	26,180,855	(19,937,421)	(6,690,613)	(447,179)
Segment assets	123,746,719	11,720,172	(18,473,663)	116,993,228
Segment liabilities	79,881,243	37,350,291	(22,267,152)	94,964,382
Analysis of additions during the year
Additions to property and equipment	1,175,959	-	-	1,175,959
Additions to intangible assets	192,112	-	-	192,112
Additions to investment properties	1,072,607	-	-	1,072,607

*The historical cost financial information is unaudited and has been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019. The audited inflation adjusted results represent the primary financial information required by IAS 29 and in respect of which the auditors have expressed their opinion.

*The adjustment journal and elimination amounts relates to intercompany transactions between continuing and discontinued units.

DIRECTORS: Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Ms E.T. Masiyiwa, Mr C. Maswi, Mr D. Musengi, Mr H. Pemhiwa,

Mr D.T. Mandivenga, Mr E. Chibi*, Mrs T. Nyemba*. * Executive. | REGISTERED OFFICE: 1906 Liberation Legacy Way, Borrowdale, Harare.

www.ecocashholdings.co.zw

29 February 2024

28 February 2023

1 March 2023 to 29 February 2024 Average

1 March 2022 to 28 February 2023 Average

BASIS OF PREPARATION

Application of IAS 29 - Financial Reporting in Hyperinflationary Economies

In the current year, because it is still reporting in the currency of a hyperinflationary environment, the Group has applied the requirements of IAS 29 and is presenting inflation adjusted consolidated financial statements as its primary financial statements.

The PAAB issued Pronouncement 01/2019 in October 2019 prescribing application of inflation accounting for reporting periods ended on or after 1 July 2019. Historical cost financial results have been presented as supplementary information, and the auditors have not expressed an opinion on those historical results.

The conversion factors used to restate the underlying historical numbers for the consolidated financial statements for the year ended 29 February 2024 are as follows;

These consolidated financial statements comprise the Holding Company and its subsidiary (collectively "the Group" or the "Group companies"). The group's subsidiary is Steward Bank Limited which is a digital commercial bank:

Following the approval of the Scheme of Reconstruction at an EGM held on the 17th of April 2024 all non banking units will be transfered from EHZL to EWZL. Below is a list of entities and their main activities, which were subsidiaries of the Group and are now classified as a disposal group held for sale to Econet Wireless Zimbabwe as at 29 February 2024;

- EcoCash (Private) Limited - (mobile money transfer and payments services);

- Econet Life (Private) Limited - (mobile based funeral and life assurance company) - Econet Insurance (Private) Limited - (short-terminsurance company);

- Vaya Technologies Zimbabwe (Private) Limited (formerly Econet Services (Private) Limited) - (On-demandservices, e-commerce,farming technology, connected lifestyle and digital education services);

- Maisha Health Fund (Private) Limited - (medical aid service provider); and - MARS (Private) Limited - (medical air and road rescue services).

EHZL and its subsidiaries are incorporated in Zimbabwe. EHZL's registered office is 1906 Liberation Legacy Way (formerly Borrowdale Road), Harare. The ultimate holding company for the Group is Econet Global Limited, which is registered in Mauritius.

These abridged consolidated financial statements are presented in Zimbabwe Dollars ("ZW$"), which is the presentation currency of the Group.

The historical results have been presented as supplementary information, in line with the Public Accountants and Auditors Board ("PAAB") recommendation set out in Pronouncement 01/2019. The inflation adjusted results represent the primary financial information required by International Accounting Standard ("IAS") 29, 'Financial Reporting in Hyperinflationary Economies', and these have been subjected to an audit by the auditors.

2. STATEMENT OF COMPLIANCE

The abridged consolidated financial statements have been prepared in compliance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRSs"), as issued by the International Accounting Standards Board (IASB) and interpretations developed and issued by the International Financial Reporting Standards Interpretations Committee ("IFRS IC") except for non-complianceIAS 21, 'The Effects of Changes in Foreign Exchange Rates'. Consequently, the Directors advise users of these consolidated financial statements to exercise caution.

The underlying abridged consolidated financial statements have been prepared in accordance with the disclosure requirements of the Securities and Exchange (Zimbabwe Stock Exchange Listings Requirements) Rules 2019, the Companies and Other Business Entities Act (Chapter 24:31), the Banking Act (Chapter 24:20), the Insurance Act (Chapter 24:07), the Medical Services Act (Chapter 15:13), and related regulations.

These abridged consolidated financial statements do not include all the information and disclosures required to fully comply with IFRSs and should be read in conjunction with the Group's complete consolidated financial statements for the year ended 29 February 2024, which are available for inspection at the Company's registered office.

3. ACCOUNTING POLICIES

The principal accounting policies of the Group have been applied consistently in all material respects with those of the previous period, unless otherwise stated and except for the adoption of new standards and amendments that became effective for the year ended 29 February 2024.

For the year ended 29 February 2024 1.

Audited Abridged Consolidated Financial Statements

Notes to the abridged consolidated financial statements

4.

4.1

GENERAL INFORMATION

(Incorporated in Zimbabwe on 29 March 2012 under Company Registration Number 2487/2012) ZSE Alpha Code: EHZL.zw ISIN ZW0009012437

For the year ended 29 February 2024

	7. EARNINGS PER SHARE
Corporate information			INFLATION ADJUSTED	HISTORICAL COST*
2024	2023	2024	2023
EcoCash Holdings Zimbabwe Limited ("EHZL" or "the Company") and its subsidiaries were demerged from
		ZW$ '000	ZW$ '000	ZW$ '000	ZW$ '000
Econet Wireless Zimbabwe Limited ("EWZL"), effective 1 November 2018.

Continuing operations

Discontinued operations

Profit / (loss) for the year attributable to ordinary shareholders

329,432,188	62,568,161	420,683,985	(447,179)
(42,092,328)	(151,597,059)	(39,225,790)	1,400,692
287,339,860	(89,028,898)	381,458,195	953,513

Adjustment for capital items (net of tax):

Index Conversion Factor

270,996.361.00

14,493.4518.70

63,771.064.25

10,835.361.34

Non-monetary assets and liabilities carried at historical cost have been restated to reflect the change in the general price index from 1 October 2018 to the end of the reporting period. Monetary assets and liabilities, and non-monetary assets and liabilities carried at revalued amounts have not been restated as they are presented at the measuring unit current at the end of the reporting period. Items recognised in the statement of profit or loss have been restated by applying the change in the general price index from the dates when the transactions were initially earned or incurred. A net monetary adjustment was recognised in the statement of profit or loss. All items in the statement of cash flows are expressed in terms of the general price index at the end of the reporting period.

On the 3rd of March 2023, the Government of Zimbabwe through the Ministry of Finance and Economic Development ("MoFED") promulgated Statutory Instrument ("S.I.") 27 of 2023. Through S.I. 27, the old benchmark headline Consumer Price Index ("CPI") that was being published month on month since 2019, tracking ZW dollar inflation was discontinued effective February 2023. A blended CPI was introduced which is a weighted average based on the use of Zimbabwean dollars and United States dollars. The Group concluded that the blended CPI did not meet the criteria for the application of IAS 29 and an estimate was determined from February 2023 to February 2024 which meets the IAS 29 criteria.

1. INTERPRETATION OF FINANCIAL STATEMENTS PREPARED UNDER HYPERINFLATIONARY CONDITIONS In as much as all reasonable care and attention has been taken by the Directors to present information that is meaningful and relevant to the users of the financial statements, it is not always possible to present this information in a way that is not contradictory to International Financial Reporting Standards when reporting is impacted by multiple factors in the environment, including but not limited to the legislative framework and economic variables affecting companies operating in Zimbabwe. This has resulted in a qualification to these financial statements. Economic variables changed at an extremely fast pace during the period under consideration. These circumstances require care and attention by users of financial statements in their interpretation of financial information presented under such conditions.
2. INDEPENDENT AUDITOR'S OPINION
   The abridged consolidated financial statements should be read in conjunction with the complete set of audited consolidated financial statements for the year ended 29 February 2024 which have been audited by BDO Zimbabwe Chartered Accountants in accordance with International Standards on Auditing and a modified opinion has been issued thereon. This opinion carries a qualified opinion with respect to;
   Non-compliance with IAS 21, 'The Effects of Changes in Foreign Exchange Rates ', in the determination of the functional currency for some of its subsidiaries, namely Econet Insurance (Private) Limited, Econet Life (Private) Limited, Maisha Health Fund (Private) Limited and Mars (Private) Limited.
   The audit report also includes key audit matters. The key audit matters were on:
3. • Implementation of IFRS 17,
   • Revenue recognition,
   • Determination of expected credit loss and
   • Valuation of property, equipment and investment property.

The auditor's report on the consolidated financial statements is available for inspection at the Ecocash Holdings Zimbabwe Limited's registered offices and on the Zimbabwe Stock Exchange website. The engagement partner responsible for the audit was Mr. Gilbert Gwatiringa PAAB Practice Certificate number 0475.

Profit on disposal of property and equipment	(645,868)	(65,706)	(93,528)	(12,637)
Impairment of property and equipment	-	55,494,958	-	213,397
Headline earnings / (loss) attributable
to ordinary shareholders	286,693,992	(33,599,646)	381,364,667	1,154,273
Weighted average number of ordinary
shares for the purposes of basic and diluted
earnings per share	3,259,002,528	2,590,577,241	3,259,002,528	2,590,577,241
Basic earnings / (loss) per share (ZW$)	88.168	(34.366)	117.048	0.368
Headline earnings / (loss) per share (ZW$)	87.970	(12.970)	117.019	0.446
Diluted basic earnings / (loss) per share
(ZW$)	88.168	(34.366)	117.048	0.368
Diluted headline earnings / (loss) per share
(ZW$)	87.970	(12.970)	117.019	0.446

*The historical financial information is unaudited and has been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019. The audited inflation adjusted results represent the primary financial information required by IAS 29 and in respect of which the auditors have expressed their opinion.

8. FINANCIAL INSTRUMENTS

Financial instruments are disclosed in the abridged consolidated statement of financial position at their carrying amount which approximates their respective fair value.

Fair value hierarchy

The Group is guided by the following hierarchy as fair value measurement criteria for assets measured using the fair value model. The hierarchy levels 1 to 3 are based on the degree to which the fair value is observable:

• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and
• Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.

			INFLATION ADJUSTED
	Total		Level 1	Level 2	Level 3
	ZW$ '000		ZW$ '000	ZW$ '000	ZW$ '000
At 29 February 2024
Investment in financial assets	256,365,378		235,898,679	-	20,466,699
Transfers to disposal group held for sale	(90,613,157)		(82,618,857)	-	(7,994,300)
	165,752,221		153,279,822	-	12,472,399
At 28 February 2023
Investment in financial assets	199,323,891		183,411,048	-	15,912,843
	199,323,891		183,411,048	-	15,912,843
			HISTORICAL COST*
	Total	Level 1	Level 2	Level 3
	ZW$ '000	ZW$ '000	ZW$ '000	ZW$ '000
At 29 February 2024
Investment in financial assets	256,365,378	235,898,679	-	20,466,699
Transfers to disposal group held for sale	(90,613,157)	(82,618,857)	-	(7,994,300)
	165,752,221	153,279,822	-	12,472,399
At 28 February 2023
Investment in financial assets	10,660,257	9,809,205	-	851,052
	10,660,257	9,809,205	-	851,052

*The historical financial information is unaudited and has been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019. The audited inflation adjusted results represent the primary financial information required by IAS 29 and in respect of which the auditors have expressed their opinion.

9. MOBILE MONEY TRUST BALANCES

1. "Mobile money trust bank balances - restricted balances" and "Mobile money trust liabilities" represent restricted and reserved cash balances held in trust for the EcoCash customers.

2. DISPOSAL GROUP HELD FOR SALE
   On 16 January 2024, the Group publicly announced the decision of its Board of Directors to sell EcoCash (Private) Limited (mobile money business), VAYA Technologies, Econet Insurance, Econet Life, MARS Zimbabwe and Maisha Health to Econet Wireless Zimbabwe. On 17 April 2024, the shareholders of the Company approved the plan to sell the subsidiaries. The sale is expected to be completed within 12 months from the reporting date. At 29 February 2024, these subsidiaries were classified as disposal groups held for sale and as discontinued operations. These discontinued operations will no longer be presented in the segment note.
3. GOING CONCERN
   The Board regularly considers and records the facts and assumptions on which it relies to conclude that Ecocash Holdings will continue in operational existence into the foreseeable future at each reporting date.
   The Group's operations will continue in FY25 despite the transfer of non-banking assets to Econet Wireless Zimbabwe due to the group's drive on digital banking expansion as it invests in technologies to enhance operational efficiencies and increase the product offering to customers. The introduction of the Zimbabwean Gold, ZiG also brought stability to local currency transactions which strengthened the capital position of digital banking operations. The group will continue to find additional avenues of increasing shareholder value in the upcoming financial year
   The Directors have assessed the ability of the Group to continue operating as a going concern for the 12 months period subsequent to the date of authorisation of the financial statements. The Directors believe that the preparation of these financial statements on a going concern basis remains appropriate.
4. EVENTS AFTER REPORTING DATE
   Proposed scheme to dispose non-banking assets to Econet Wireless Zimbabwe Limited
   The EGM to consider and approve the proposed scheme of reconstruction was held on the 17th of April 2024. The shareholders approved the scheme of reconstruction where all non-banking assets namely EcoCash (Private) Limited, Econet Insurance (Private) Limited, Econet Life (Private) Limited, VAYA Technologies (Private) Limited, MARS Zimbabwe (Private) Limited and Maisha Health Fund (Private) Limited will be transferred from EcoCash Holdings Zimbabwe Limited to Econet Wireless Zimbabwe Limited in exchange for the total consideration of ZW$ 509 billion (equivalent to 521,861,057 Econet Shares) payable partly in Econet Treasury Shares and partly in cash and cash equivalents. The Scheme of Reconstruction will not result in the delisting of EcoCash Holdings Zimbabwe Limited from the Zimbabwe Stock Exchange.
   Subject to regulatory approval, only the banking unit, Steward Bank, will remain under EcoCash Holdings. As such the businesses transferring to Econet have been classified as discontinued operations in line with IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" at the reporting date.
   Introduction of a new national currency
   On the 5th of April 2024, the Reserve Bank of Zimbabwe (RBZ) introduced the Zimbabwean Gold (ZiG), a new currency that replaced the Zimbabwean Dollar (ZWL). This saw all ZWL balances converted to ZiG at a conversion rate of 2,498.7242. The new currency did not affect the business position as at 29 February 2024, thereby making it a non-adjusting event.

DIRECTORS: Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Ms E.T. Masiyiwa, Mr C. Maswi, Mr D. Musengi, Mr H. Pemhiwa,

Mr D.T. Mandivenga, Mr E. Chibi*, Mrs T. Nyemba*. * Executive. | REGISTERED OFFICE: 1906 Liberation Legacy Way, Borrowdale, Harare.

www.ecocashholdings.co.zw

TEL/FAX: [phone]	Kudenga House
CELL: [phone]/7/8/9	3 Baines Avenue
[e-mail]	P.O. Box 334
WWW.BDO.CO.ZW	Harare
	Zimbabwe

INDEPENDENT AUDITOR'S REPORT

TO THE SHAREHOLDERS OF ECOCASH HOLDINGS ZIMBABWE LIMITED

Qualified opinion

We have audited the inflation adjusted consolidated financial statements of EcoCash Holdings Zimbabwe Limited and its subsidiaries (the Group), which comprise the inflation-adjusted consolidated statement of financial position as at 29 February 2024, and the inflation adjusted consolidated statement of comprehensive income, inflation adjusted statement of changes in equity and inflation-adjusted statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, except for the matter discussed in the basis for Qualified Opinion section of our report, the inflation-adjusted consolidated financial statements present fairly, in all material respects, the inflation adjusted financial position of EcoCash Holdings Zimbabwe Limited and its subsidiaries as at 29 February 2024, its inflation-adjusted financial performance and inflation- adjusted cash flows for the year then ended in accordance with International Financial Reporting Standards.

Basis for Qualified Opinion

Non-compliance with International Accounting Standard 21 (IAS 21), The Effects of Changes in Foreign Exchange Rates

The Group has not complied with the requirements of International Accounting Standard 21 (IAS 21), The Effects of Changes in Foreign Exchange Rates , in the determination of its functional currency for some of its significant subsidiaries, namely Econet Insurance (Private) Limited, Econet Life (Private) Limited, Maisha Health Fund (Private) Limited and Mars (Private) Limited. Based on our assessment using the guidance in IAS 21, the functional currency for the respective subsidiaries changed during the financial year to United States dollar, however, management continued to use the Zimbabwe dollar as the functional currency. This resulted in distortions to the financial information of the respective subsidiaries.

The distortions affect the following line items: Loss from discontinued operations, Assets held for sale and Liabilities associated with assets held for sale in the statement of financial position. Had the functional currency been changed in compliance with IAS 21, the amounts reclassified and accounted for under International Financial Reporting Standard 5 (IFRS 5)-Non-current assets held for sale and discontinued operations would have been materially different from those reported in these inflation adjusted consolidated financial statements. The effect of the non-compliance with IAS 21 could not be quantified but is considered to be material to the financial statements.

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for

Professional Accountants (IESBA) (Parts A and B), together with other ethical requirements that are relevant to our audit of the financial statements in Zimbabwe, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit of the inflation- adjusted consolidated financial statements of the Group for the current period. These matters were addressed in the context of our audit of the inflation-adjusted consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion, we have determined the matters described below to be key audit matters to be communicated in our report: -

BDO Zimbabwe,a Zimbabwean partnership, is a member of BDO International Limited, a UK company limited by guarantee and forms part of the International BDO network of independent member firms .

A list of partner names is available for inspection at our registered office, No. 3 Baines Avenue,Harare.

2

Key audit matters

Audit responses

IFRS 17 - Insurance Contracts - Implementation and Reporting

The new standard, IFRS 17 - "Insurance Contracts" ('IFRS 17'), which

became effective for reporting periods beginning on or after 1 January 2023

Our procedures on the application of IFRS 17 included assessing:

was adopted by the Group's Insurtech entities on 1 March 2023. IFRS 17

•

Whether

the

measurement

method

selected

is

replaces IFRS 4 - "Insurance Contracts". Since the Standard required

appropriate under IFRS 17;

retrospective application, the Insurtech entities applied IFRS 17 to

• Whether the calculations are applied in accordance with

insurance contracts issued and reinsurance contracts held as at 1 March

the method and are mathematically accurate;

2022. The adoption of IFRS 17 is described in Note 32 to the inflation

• Whether judgements have been applied consistently and

adjusted consolidated financial statements, in accordance with the

adjustments to the models are consistent with the

accounting policies outlined in the same note.

objectives of IFRS 17 and are appropriate in the

Initial implementation of IFRS 17 required the Insurtech entities to make

circumstances; and

•

Appropriateness

of

significant

assumptions

and

the

estimates for previous accounting periods as well as the current period as

completeness and accuracy of data used.

IFRS 17 was applied on a full retrospective basis for all contracts measured

• Obtaining an understanding and evaluating the design

under the Premium Allocation Approach (PAA). This was impracticable for

and implementation of management's controls over the

one product measured under the General Measurement Model (GMM) for

adoption

of

IFRS 17

accounting

policies

and

the

which

the modified

retrospective approach was

utilised. Under

both

significant estimates and assumptions used in the

approaches, items in the opening statement of financial position and

determination of the Group's insurance contracts.

comparative information were restated.

•

Evaluating,

with

the

assistance

of

external

actuarial

Applying IFRS 17

involves inherent

risk factors

such as significant

experts,

the

related

accounting

policies

and

actuarial

methodologies to assess compliance with IFRS 17. The

complexity and subjectivity associated with the selection and application of

methodologies included classification of contracts in terms

the methods, assumptions and

data

used in developing accounting

of the three

different

measurement

approaches

(the

estimates, and the degree of estimation uncertainty. These factors include:

General

Measurement

Model, the Premium

Allocation

• Increased estimation uncertainty, complexity and subjectivity in

Approach and the Variable Fee Approach); the transition

the actuarial models required to produce estimates of future cash

and valuation approaches and the wide range of financial

flows on an expected present value basis, determine the risk

and non-financial assumptions.

adjustment, and determine and track the Contractual Service

• On the transition approaches applied in the calculation of

Margin (CSM) over time.

the CSM,

evaluating the

Group's assessment of

the

•

Increased

complexity

and

subjectivity

in

developing

the

availability

of

reasonable

and

supportable

historical

assumptions underpinning the actuarial models.

information

required

by

the

full retrospective

approach

•

An increase in the granularity and volume of data required to

and the

appropriateness

of

simplifications, under

the

apply IFRS 17, including data not previously utilised by insurers,

modified retrospective approach, or fair value approach

and the need to enhance systems and

information flows to

applied and where applicable test underlying contracts

capture this data.

and data.

•

Enhanced

disclosure requirements relating to estimates,

•

Assessing the appropriateness and consistency of key

including a number of complex reconciliations from the opening to

assumptions (both new and revised) considering industry

the closing of several components of insurance and reinsurance

and other

external

sources of

benchmarking where

liabilities/assets.

applicable, and knowledge of the products and the

This required the application of significant auditor judgment and involved

requirements of IFRS 17.

• Testing the completeness and accuracy of data used in

specialised actuarial

skills and knowledge to assist in

evaluating

and

the calculation of the transition balances to underlying

assessing management's judgements and assumptions.

source systems on a sample basis.

Accordingly, we have identified the initial application of IFRS 17 as a key

• Considering whether the associated transition disclosures

in the financial statements are in compliance with IFRS 17

audit matter. The critical accounting judgements and impact of the initial

and with the methodologies and assumptions approved by

application of IFRS 17 are set out in Note AA to the inflation adjusted

the directors.

consolidated financial statements.

Determination of Expected Credit Loss of the Bank

The Bank's expected credit loss (ECL) on advances and sundry receivables

We assessed and tested the design and operating effectiveness of

amounted to ZWL 79,684,784,296.26. The determination of impairment

the controls over individual and collective impairment calculations

loss is an inherently uncertain process involving various assumptions and

including the quality of underlying data and systems.

factors including the financial condition of the counterparty, expected future

cash flows, observable market prices and expected interest rates. The use

For loans and advances provisions calculated on an individual basis

of different modelling techniques and assumptions could produce

we tested the assumptions underlying the impairment identification

significantly different estimates of provisions. The determination of the ECL

and quantification including forecasts of future cash flows, valuation

is a key area of judgement for management.

of underlying collateral and estimates of recovery on default.

We therefore considered the fair statement of expected credit losses as a

For provisions calculated on a collective basis we tested, with the

key audit matter.

assistance of internal IFRS 9 experts, the underlying models

including the model approval and validation process.

We tested the appropriateness and accuracy of the inputs to those

models, such as recovery and cure rates, and where available,

compared data and assumptions made to external benchmarks.

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	We tested the accuracy and completeness of the receivables aging
	analysis with regards to the sundry debtors and circulated
	confirmation letters to confirm balances owed to the Bank.
Completeness, occurrence, and accuracy of revenue
Some revenue streams of the Group are characterised by high volumes of
transactional data which is generated in a highly automated environment.	We performed the following procedures to
The likelihood that small errors may become significant on aggregation is	address this matter:
high due to the risk of automated replication. There are also different fee
charges for the various service types, and these were subject to frequent	•	Obtained an understanding of the revenue cycle and our
changes during the year in response to the hyper-inflationary operating		information systems auditors, tested the design,
environment. The frequent changes to standing data increases the risk of		implementation and operational effectiveness of general
errors. We therefore considered the completeness, occurrence and		and application controls relevant to the revenue cycle.
accuracy of revenue to be a key audit matter.
	•	Wrote scripts which enabled us to extract data from the
		revenue information systems and recomputed revenue
		100%.
	•	Reviewed access logs to the standing data in the revenue
		systems and verified that all tariff changes were
		authorised and timeously updated.
	•	Reviewed the revenue ledgers for unusual or unexpected
		entries. We also reviewed the exception reports which are
		generated by the revenue systems.
	•	Assessed the appropriateness of the revenue recognition
		criteria for compliance with the requirements of IFRS 15.
Valuation of Property, Equipment, and Investment property
The Group held investment property valued at ZWL 403,672,000,000 and
property and equipment valued at ZWL 821,473,179,000 as at 29 February	The Group applied the requirements of International Financial
2024.	Reporting Standard 13 (IFRS 13) Fair Value Measurement and
	International Accounting Standards 21 (IAS	21) The Effects of
A valuation exercise was carried out at year end. The valuation of property,	Changes in Exchange Rates in the valuation of its assets.
equipment, and investment property was performed by independent	We performed the following procedures to address this matter:
valuers.
The determination of the value of property, equipment, and investment	•	Obtained an understanding of the approach followed by
	the independent valuers and directors.
property was considered to be a matter of significance due to:	•	Evaluated the independent valuers' work by assessing
Inherent subjectivity of the key assumptions and judgements that underpin		their competence, independence,	capabilities and
	industry experience.
the process thereon due to the heightened uncertainties in the economic
•	Reviewed the valuation methods used and assessed
environment.		whether they are appropriate and consistent with the
		reporting requirements.
Subjectivity of the process that involved making a choice of the exchange	•	Evaluated the principles and the integrity of the models
	used, in accordance with generally accepted valuation
rates to apply in the prevailing economic environment.
	methodologies in the economic environment at hand.
	•	Assessed the inputs in the valuation model for accuracy,
		completeness and reasonableness.
	•	Assessed the reasonableness of the spot exchange rate
		used in the valuation process in the context of disparities
		on available foreign exchange rates.

Responsibilities of the Directors for the inflation-adjusted consolidated financial statements

The Directors are responsible for the preparation and fair presentation of these inflation-adjusted consolidated financial statements in accordance with the International Financial Reporting Standard (IFRSs) and supporting regulations. The responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of inflation-adjusted consolidated financial statements that are free from material misstatement, whether due to fraud or error;

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selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

In preparing the inflation-adjusted consolidated financial statements, the Directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless they intend to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the inflation-adjusted consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the inflation-adjustedconsolidated financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditors' 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 ISAs 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 those inflation-adjusted consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the inflation-adjusted consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
• Evaluate the overall presentation, structure and content of the inflation-adjusted consolidated financial statements, including the disclosures, and whether the inflation-adjusted consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and based on the audit
  evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the inflation-adjusted consolidated financial
  statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However future events or conditions may cause the Group to cease to continue as a going concern.

We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Directors with a statement that we have complied with the relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Directors, we determine those matters that were of most significance in the audit of the

inflation adjusted consolidated financial statements for the current year and are therefore key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare

circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on legal and regulatory requirements

The accompanying financial statements were not prepared in accordance with the requirements of section 273 of the Companies and Other Business Entities Act (Chapter 24:31) due to non-compliance with IAS 21, The Effects of Changes in Foreign Exchange Rates.

The audit engagement partner on the audit resulting in this independent auditor's report is Gilbert Gwatiringa.

………………………………………………………………..

BDO Zimbabwe Chartered Accountants

Kudenga House

3 Baines Avenue

Harare

Gilbert Gwatiringa CA(Z)

Partner

PAAB Practicing Certificate No. 0475

Registered Public Auditor

28 June 2024

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