(formerly Cassava Smartech Zimbabwe Limited)
(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 28 February 2022
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ECOC ASH HOLDINGS ZIMBA BW E LIMITED - 20 4 5 / PAGE 1
H I G H L I G H T S
Key Performance Indicators
Revenue | EBITDA | Profit before tax | Total assets |
ZW$29.9 billion | ZW$5.4 billion | ZW$3.7 billion | ZW$47.7 billion |
26% | 50% | 405% | 12% |
DIRECTORS: Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Miss 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 | www.ecocashholdings.co.zw | |
REGISTERED OFFICE: 1906 Liberation Legacy Way, Borrowdale, Harare. | |||
(formerly Cassava Smartech Zimbabwe Limited)
(Incorporated in Zimbabwe on 29 March 2012 under Company Registration Number 2487/2012) ZSE Alpha Code: EHZL.zw ISIN ZW0009012437
ECOC ASH HOLDINGS ZIMBA BW E LIMITED - 20 4 5 / PAGE 2
Audited Abridged Consolidated Financial Statements
For the year ended 28 February 2022
Chairperson's statement
INTRODUCTION
The financial year 2022 was yet another turbulent year for the global and local economy on account of the Covid-19 pandemic. Though the severity of the pandemic was curtailed through widespread vaccinations, lockdowns, decongestion of offices, and other mitigatory measures, many of our staff, customers, and families were and continue to be impacted. Our business has had to navigate an increasingly difficult local operating environment for the greater part of the year with the depreciation of the local currency, rising inflation, and the re-emergence of the parallel market all creating a cocktail of challenges that are impacting almost every business in the country.
The resilience of our strategy, the commitment of our staff, the support of our stakeholders, and the relevance of our products and services has allowed us to navigate these operational difficulties. We remain committed to providing digital solutions to the evolving needs of our diverse client base by bringing them the convenience they need.
REGULATORY ENVIRONMENT
The Board has oversight over the regulatory compliance of the Group. The Group continued to comply with all regulatory pronouncements issued throughout the financial year. The growth of our Mobile Money business has been severely constrained due to regulated transaction limits, regulated tariffs, and the continued suspension of some of our revenue-generating services.
OPERATIONS REVIEW
Product innovation remained a key priority and has allowed us to provide relevant digital solutions that address consumer needs. With the continued support of our stakeholders, we have launched several exciting products and solutions that include the automation of merchant settlements, self-care portal for EcoCash reset pin-reset, MARS laboratory tests for Covid-19, Vaya Services Fuel Monitoring, Vaya Smart Security, and improved KaShagi digital loans.
To drive our digital banking model, Steward Bank successfully deployed a new core banking system with enhanced features. Leveraging on the upgrade, our Square banking App was also upgraded as well as the online banking offer. The Bank also complied with the minimum capital requirement set by the regulator within the set timeline of 31 December 2021.
Our drive towards a superior customer experience and service culture saw us continuously invest in products and services designed to bring convenience, especially during the Covid-19 lockdowns and restrictions. Following these initiatives, our call centres saw a reduction in call-in traffic by over 90%.
FINANCIAL PERFORMANCE
The Group's financial results and the commentary have been prepared on an inflation-adjusted basis as required by IAS 29 "Financial Reporting in Hyperinflationary Economies". Financial statements prepared under the historical cost convention have only been presented as supplementary information. The Directors would like to advise users to exercise caution on their use of these audited abridged consolidated financial statements, due to the material and pervasive impact of the technical difficulties of reporting under International Accounting Standard (IAS) 29.
Despite the challenges prevalent in FY2022, EcoCash Holdings Zimbabwe Limited delivered a commendable performance once again, with the Group's revenue closing at ZWL29.9bn, 26% above the financial year 2021 performance of ZWL23.8 billion. The Fintech businesses remained the largest contributor to revenue, at 80% (2021: 77%). The contribution by the Insurtech business was at 14%, a slight decrease from the prior year's 15%, and Vaya Technologies closed the year at a contribution of 6%. Management will continue to adapt business units' operating models to both grow and diversify sources of revenue.
The Group's EBITDA margin improved from 15% to 18% because of the relentless focus on cost optimization. The Group will remain focused on revenue growth, operational efficiencies, and optimization of the balance sheet. During the year, 22% of the debenture holders exercised their option to redeem their debentures early in line with our balance sheet optimization strategy. Foreign currency exchange losses reduced from ZW$6.3 billion in 2021 to ZW$1.2 billion during the current year.
DIVIDEND DECLARATION
The Directors have decided not to declare a dividend for the period under review as they continue to assess the economic environment.
CORPORATE SOCIAL INVESTMENT CAPITAL
Investing in the communities in which we operate and promoting social transformation remains of paramount importance to us. The Group's vision of unlocking digital possibilities for community benefit was executed through the provision of access to world-class education materials through Higher Life Foundation in the past year. Consistent with our aim to provide support for essential health services, we invested in the provision of critical basic and large-scale,high-tech equipment, personal protective equipment, and training of healthcare workers through MARS and Higher Life Foundation.
OUTLOOK
The change in our name from Cassava Smartech to EcoCash Holdings reinforces our desire to use the Ecocash brand, our flagship brand as our primary identity.
The Group is optimistic about the future and will drive financial inclusion by leveraging the power of our digital platforms and partnerships. Our diversified group will continue to produce cutting-edge inclusive solutions and will expand our fintech solutions to agriculture, education, healthcare, and financial services, through the adoption of artificial intelligence (AI), big data, blockchain, and machine learning.
APPRECIATION
On behalf of the Board, I wish to express my sincere gratitude and appreciation to our customers, business partners, and our valued shareholders for their confidence in us, which will be deservedly rewarded over time. I would also like to extend my gratitude to the EcoCash Holdings Board of Directors, employees, management, and executive team for their passion, commitment, and dedication to achieving a high- performance culture and ensuring EcoCash Holdings thrives and continues to grow.
On behalf of the Board
Sherree Shereni
Board Chairperson
7 July 2022
Abridged Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 28 February 2022
INFLATION ADJUSTED | HISTORICAL* | ||||
2022 | 2021 | 2022 | 2021 | ||
Notes | ZW$'000 | ZW$'000 | ZW$'000 | ZW$'000 | |
Revenue | 29,929,399 | 23,750,299 | 22,719,851 | 10,146,386 | |
- Interest revenue calculated using | |||||
the effective interest method | 2,644,448 | 855,913 | 2,079,540 | 386,701 | |
- Non-interest revenue | 27,284,951 | 22,894,386 | 20,640,311 | 9,759,685 | |
Cost of sales and external services | |||||
rendered | (8,362,976) | (7,358,171) | (6,404,430) | (3,276,720) | |
Impairment on financial assets charge: | |||||
expected credit loss allowances | |||||
on loans and advances to bank | |||||
customers | (80,323) | (217,876) | (54,681) | (79,516) | |
Gross profit | 21,486,100 | 16,174,252 | 16,260,740 | 6,790,150 | |
Other income | 4,208,620 | 1,145,694 | 5,352,888 | 1,765,868 | |
Other expenses | (1,939,918) | (151,288) | (1,939,918) | (64,787) | |
General administrative expenses: | (18,487,519) | (17,357,127) | (13,362,273) | (5,814,443) | |
- Administration expenses | (15,611,883) | (11,752,274) | (12,196,505) | (5,220,465) | |
- Impairment on financial assets | |||||
charge: expected credit loss | |||||
allowances on items other than loans | |||||
and advances | (816,608) | (265,234) | (595,617) | (99,827) | |
- Depreciation, amortisation and | |||||
impairment | 6.1 | (2,568,116) | (3,999,055) | (1,210,737) | (345,431) |
- Foreign exchange gains / (losses) | |||||
arising from items other than | |||||
debenture related liabilities | 509,088 | (1,340,564) | 640,586 | (148,720) | |
Marketing and sales expenses | (1,927,823) | (1,557,256) | (1,498,765) | (663,577) | |
Foreign exchange losses arising from | |||||
debenture related liabilities | (1,239,791) | (6,306,249) | (1,061,072) | (2,050,580) | |
Gain on net monetary position | 1,946,604 | 7,257,608 | - | - | |
Profit / (loss) before net finance costs | 4,046,273 | (794,366) | 3,751,600 | (37,369) | |
Finance income | 15,826 | 13,859 | 12,800 | 8,250 | |
Finance costs | (387,917) | (424,045) | (285,470) | (190,506) | |
Profit / (loss) before taxation | 3,674,182 | (1,204,552) | 3,478,930 | (219,625) | |
Income tax (expense) / credit | (2,344,721) | (527,005) | (1,568,775) | 93,280 | |
Profit / (loss) for the year | 1,329,461 | (1,731,557) | 1,910,155 | (126,345) | |
Profit / (loss) for the year | |||||
attributable to: | 1,329,461 | (1,731,557) | 1,910,155 | (126,345) | |
Equity holders of EcoCash Holdings | |||||
Zimbabwe Limited | 1,123,436 | (1,488,633) | 1,671,487 | (227,977) | |
Non-controlling interest | 206,025 | (242,924) | 238,668 | 101,632 | |
Other comprehensive income for the | |||||
year | |||||
Items that may not to be reclassified | |||||
to profit or loss | |||||
Gain arising on revaluation of | |||||
property and equipment | 2,115,464 | 353,509 | 4,113,592 | 3,033,510 | |
Taxation effect of other | |||||
comprehensive income | (525,779) | (82,507) | (1,000,917) | (729,159) | |
Other comprehensive income for the | |||||
year, net of tax | 1,589,685 | 271,002 | 3,112,675 | 2,304,351 | |
Total comprehensive income / (loss) | |||||
for the year | 2,919,146 | (1,460,555) | 5,022,830 | 2,178,006 | |
Other comprehensive income | |||||
attributable to: | |||||
Equity holders of EcoCash Holdings | |||||
Zimbabwe Limited | 1,587,324 | 266,693 | 3,101,373 | 2,281,953 | |
Non-controlling interest | 2,361 | 4,309 | 11,302 | 22,398 | |
1,589,685 | 271,002 | 3,112,675 | 2,304,351 | ||
Total comprehensive income / (loss) | |||||
attributable to: | |||||
Equity holders of EcoCash Holdings | |||||
Zimbabwe Limited | 2,710,760 | (1,221,940) | 4,772,860 | 2,053,976 | |
Non-controlling interest | 208,386 | (238,615) | 249,970 | 124,030 | |
2,919,146 | (1,460,555) | 5,022,830 | 2,178,006 | ||
Basic and diluted earnings / (loss) | |||||
per share (ZW$) | 6.2 | 0.434 | (0.575) | 0.645 | (0.088) |
*The historical financial results have been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019.
DIRECTORS: Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Miss 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. | |
(formerly Cassava Smartech Zimbabwe Limited)
(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 28 February 2022
Abridged Consolidated Statement of Financial Position
As at 28 February 2022
INFLATION ADJUSTED | HISTORICAL* | ||||
2022 | 2021 | 2022 | 2021 | ||
Notes | ZW$ '000 | ZW$ '000 | ZW$ '000 | ZW$ '000 | |
ASSETS | |||||
Intangible assets | 2,971,619 | 2,224,627 | 684,994 | 639,883 | |
Property and equipment | 9,678,409 | 7,616,656 | 8,490,288 | 3,966,786 | |
Right of use assets | 143,562 | 367,637 | 43,306 | 37,162 | |
Investment properties | 1,888,757 | 1,819,560 | 1,888,757 | 1,095,410 | |
Inventory | 790,589 | 1,501,181 | 115,592 | 372,613 | |
Current tax assets | - | 108,428 | - | 65,276 | |
Amounts owed by related party | |||||
companies | 120,284 | 137,271 | 120,284 | 82,640 | |
Trade and other receivables | 6,886,411 | 6,458,190 | 5,953,961 | 3,174,773 | |
Loans and advances to bank | |||||
customers | 6,681,503 | 2,653,500 | 6,681,503 | 1,597,458 | |
Treasury bills and government | |||||
bonds | 5,843,761 | 1,666,286 | 5,843,761 | 1,003,136 | |
Financial assets at fair value through | |||||
profit and loss | 8 | 6,108,898 | 1,802,898 | 6,108,898 | 1,085,379 |
Assets held for sale | 522 | 2,443 | 522 | 1,471 | |
Mobile money trust bank balances - | |||||
restricted balances | 7 | 5,413,786 | 7,033,279 | 5,413,786 | 4,234,169 |
Cash and cash equivalents | 1,211,899 | 9,420,502 | 1,211,899 | 5,671,323 | |
Total assets | 47,740,000 | 42,812,458 | 42,557,551 | 23,027,479 | |
EQUITY AND LIABILITIES | |||||
Capital and reserves | |||||
Share capital and share premium | 142,586 | 142,586 | 2,591 | 2,591 | |
(Accumulated losses) / retained | |||||
earnings | (3,072,831) | (5,109,682) | 1,229,712 | (465,081) | |
Other reserves | 14,568,034 | 13,357,727 | 5,902,755 | 3,116,902 | |
Equity attributable to owners | |||||
of EcoCash Holdings Zimbabwe | |||||
Limited | 11,637,789 | 8,390,631 | 7,135,058 | 2,654,412 | |
Non-controlling interest | (30,887) | (239,273) | 400,432 | 150,462 | |
Total equity | 11,606,902 | 8,151,358 | 7,535,490 | 2,804,874 | |
Liabilities | |||||
Deferred tax liabilities | 2,224,065 | 1,154,873 | 1,498,199 | 458,672 | |
Lease liabilities | 61,120 | 73,943 | 61,120 | 44,515 | |
Provisions | 1,482,966 | 502,545 | 1,470,349 | 299,492 | |
Current tax liability | 103,635 | - | 96,625 | - | |
Loans and borrowings | 9 | 4,065,749 | - | 4,065,749 | - |
Amounts owed to related party | |||||
companies | 4,247,740 | 8,664,173 | 4,247,740 | 5,215,998 | |
Trade and other payables | 5,764,196 | 5,267,907 | 5,398,652 | 2,766,973 | |
Mobile money trust liabilities | 7 | 5,413,786 | 7,033,279 | 5,413,786 | 4,234,169 |
Deposits due to banks and | |||||
customers | 12,769,841 | 11,964,380 | 12,769,841 | 7,202,786 | |
Total liabilities | 36,133,098 | 34,661,100 | 35,022,061 | 20,222,605 | |
Total equity and liabilities | 47,740,000 | 42,812,458 | 42,557,551 | 23,027,479 |
Abridged Consolidated Statement of Changes in Equity
For the year ended 28 February 2022
INFLATION ADJUSTED | ||||||
Share | Attributable | |||||
capital | Other | to equity | Non- | |||
and share | Retained | reserves | holders of | controlling | ||
premium | earnings | (Note 23) | the entity | interest | Total | |
ZW$'000 | ZW$ '000 | ZW$ '000 | ZW$'000 | ZW$'000 | ZW$'000 | |
Balance at 1 March 2020 | 116,159 | 843,672 | 8,285,372 | 9,245,203 | (658) | 9,244,545 |
Loss for the year | - | (1,488,633) | - | (1,488,633) | (242,924) | (1,731,557) |
Other comprehensive | ||||||
income: | - | - | 266,693 | 266,693 | 4,309 | 271,002 |
Revaluation of property | ||||||
and equipment and | ||||||
intangible assets | - | - | 349,200 | 349,200 | 4,309 | 353,509 |
Taxation effect of other | ||||||
comprehensive income | - | - | (82,507) | (82,507) | - | (82,507) |
Total comprehensive | ||||||
income | - | (1,488,633) | 266,693 | (1,221,940) | (238,615) | (1,460,555) |
Transfers within and out of | ||||||
reserves | 26,427 | (4,464,721) | 4,805,662 | 367,368 | - | 367,368 |
Purchase of treasury shares | - | - | (7,192) | (7,192) | - | (7,192) |
Reclassification | - | - | (14,136) | (14,136) | - | (14,136) |
Restatement of ECL & | ||||||
right of use asset opening | ||||||
balances | - | 171,033 | - | 171,033 | - | 171,033 |
Impact of change in IAS 29 | ||||||
applicable start date | 26,427 | (4,635,754) | 4,826,990 | 217,663 | - | 217,663 |
Balance at | ||||||
28 February 2021 | 142,586 | (5,109,682) | 13,357,727 | 8,390,631 | (239,273) | 8,151,358 |
Profit for the year | - | 1,123,436 | - | 1,123,436 | 206,025 | 1,329,461 |
Other comprehensive | ||||||
income | - | - | 1,587,324 | 1,587,324 | 2,361 | 1,589,685 |
Revaluation of property | ||||||
and equipment | - | - | 2,113,103 | 2,113,103 | 2,361 | 2,115,464 |
Taxation effect of other | ||||||
comprehensive income | - | - | (525,779) | (525,779) | - | (525,779) |
Total comprehensive | ||||||
income | - | 1,123,436 | 1,587,324 | 2,710,760 | 208,386 | 2,919,146 |
Transfers within and out of | ||||||
reserves | - | 913,415 | (377,017) | 536,398 | - | 536,398 |
Purchase of treasury shares | - | - | (74,232) | (74,232) | - | (74,232) |
Impact of change in | ||||||
measurement model of | ||||||
intangible assets to cost | ||||||
model (Note 12) | - | 901,467 | (302,785) | 598,682 | - | 598,682 |
Restatement of equities at | ||||||
fair value through profit or | ||||||
loss | - | 11,948 | - | 11,948 | - | 11,948 |
Balance at | ||||||
28 February 2022 | 142,586 | (3,072,831) | 14,568,034 | 11,637,789 | (30,887) | 11,606,902 |
ECOC ASH HOLDINGS ZIMBA BW E LIMITED - 20 4 5 / PAGE 3
*The historical financial results have been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019.
Abridged Consolidated Statement of Cashflows
For the year ended 28 February 2022
INFLATION ADJUSTED | HISTORICAL* | ||||
2022 | 2021 | 2022 | 2021 | ||
Notes | ZW$ '000 | ZW$ '000 | ZW$ '000 | ZW$ '000 | |
Operating activities | |||||
Cash generated from operations | 27.2 | 4,596,175 | 1,193,178 | 6,211,288 | 9,161,668 |
Income tax paid | 27.3 | (1,977,836) | (778,489) | (1,295,399) | (434,015) |
Net cash flows generated from | |||||
operating activities | 2,618,339 | 414,689 | 4,915,889 | 8,727,653 | |
Investing activities | |||||
Finance income received | 4 | 15,826 | 13,859 | 12,800 | 8,250 |
Acquisition of intangible assets | 13 | (455,459) | (71,614) | (397,774) | (147,797) |
Net acquisition of financial assets at | |||||
fair value through profit or loss | 16 | (1,035,202) | (439,394) | (790,417) | (165,977) |
Net (acquisition) / disposal of | |||||
treasury bill and government bonds | 15.1 | (8,696,473) | 2,118,192 | (5,086,146) | (64,704) |
Proceeds from disposal of assets | |||||
held for sale | 2,045 | 10,074 | 1,372 | 2,610 | |
Purchase of property and equipment | 10 | (1,787,045) | (879,392) | (1,552,550) | (489,468) |
Proceeds on disposal of property | |||||
and equipment | 9,655 | 362 | 321 | 162 | |
Net cash (utilised in) / generated | |||||
from investing activities | (11,946,653) | 752,087 | (7,812,394) | (856,924) | |
Financing activities | |||||
Finance costs paid | 5 | (387,917) | (424,045) | (285,470) | (190,506) |
Repayment of lease liabilities | 32.1 | (37,633) | (33,163) | (27,162) | (20,112) |
Purchase of treasury shares | (74,232) | (7,192) | (70,670) | (3,856) | |
Net cashflows utilised in financing | |||||
activities | (499,782) | (464,400) | (383,302) | (214,474) | |
Net increase / (decrease) in cash | |||||
and cash equivalents | (9,828,096) | 702,376 | (3,279,807) | 7,656,255 | |
Cash and cash equivalents at the | |||||
beginning of the year | 16,453,781 | 15,751,405 | 9,905,492 | 2,249,237 | |
Cash and cash equivalents at the | |||||
end of the year | 27.4 | 6,625,685 | 16,453,781 | 6,625,685 | 9,905,492 |
Comprising: | |||||
Cash and cash equivalents - | |||||
restricted | 5,413,786 | 7,033,279 | 5,413,786 | 4,234,169 | |
Cash and cash equivalents - | |||||
unrestricted | 1,211,899 | 9,420,502 | 1,211,899 | 5,671,323 | |
Cash and cash equivalents at the | |||||
end of the year | 6,625,685 | 16,453,781 | 6,625,685 | 9,905,492 |
*The historical financial results have been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019.
HISTORICAL* | ||||||
Share capital | Other | Attributable | Non- | |||
to equity | ||||||
and share | Retained | reserves | controlling | |||
premium | earnings | (Note 23) | holders of | interest | Total | |
the entity | ||||||
ZW$'000 | ZW$ '000 | ZW$ '000 | ZW$'000 | ZW$'000 | ||
ZW$'000 | ||||||
Balance at 1 March 2020 | 2,591 | (251,127) | 839,591 | 591,055 | 26,432 | 617,487 |
(Loss) / profit for the year | - | (227,977) | - | (227,977) | 101,632 | (126,345) |
Other comprehensive | ||||||
income: | - | - | 2,281,953 | 2,281,953 | 22,398 | 2,304,351 |
Revaluation of property | ||||||
and equipment and | ||||||
intangible assets | - | - | 3,011,112 | 3,011,112 | 22,398 | 3,033,510 |
Taxation effect of other | ||||||
comprehensive income | - | - | (729,159) | (729,159) | - | (729,159) |
Total comprehensive | ||||||
income | - | (227,977) | 2,281,953 | 2,053,976 | 124,030 | 2,178,006 |
Transfers within and out of | ||||||
reserves | - | 14,023 | (4,642) | 9,381 | - | 9,381 |
Purchase of treasury shares | - | - | (3,856) | (3,856) | - | (3,856) |
Reclassification | - | (1,021) | (786) | (1,807) | - | (1,807) |
Restatement of ECL & | ||||||
right of use asset opening | ||||||
balances | - | 15,044 | - | 15,044 | - | 15,044 |
Balance at | ||||||
28 February 2021 | 2,591 | (465,081) | 3,116,902 | 2,654,412 | 150,462 | 2,804,874 |
Profit for the year | - | 1,671,487 | - | 1,671,487 | 238,668 | 1,910,155 |
Other comprehensive | ||||||
income | - | - | 3,101,373 | 3,101,373 | 11,302 | 3,112,675 |
Revaluation of property | ||||||
and equipment | - | - | 4,102,290 | 4,102,290 | 11,302 | 4,113,592 |
Taxation effect of other | ||||||
comprehensive income | - | - | (1,000,917) | (1,000,917) | - | (1,000,917) |
Total comprehensive | ||||||
income | - | 1,671,487 | 3,101,373 | 4,772,860 | 249,970 | 5,022,830 |
Transfers within and out of | ||||||
reserves | - | 23,306 | (315,520) | (292,214) | - | (292,214) |
Purchase of treasury shares | - | - | (70,670) | (70,670) | - | (70,670) |
Impact of change in | ||||||
measurement model of | ||||||
intangible assets to cost | ||||||
model (Note 12) | - | 11,383 | (244,850) | (233,467) | - | (233,467) |
Restatement of equities at | ||||||
fair value through profit or | ||||||
loss | - | 11,923 | - | 11,923 | - | 11,923 |
Balance at | ||||||
28 February 2022 | 2,591 | 1,229,712 | 5,902,755 | 7,135,058 | 400,432 | 7,535,490 |
*The historical financial results have been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019.
DIRECTORS: Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Miss 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. | |
(formerly Cassava Smartech Zimbabwe Limited)
(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 28 February 2022
Abridged Consolidated Segment Information
For the year ended 28 February 2022
INFLATION ADJUSTED | ||||||
Adjustment | ||||||
Mobile | Digital | Journal & | ||||
Money | Banking | InsurTech | Other | Eliminations | Total | |
ZW$'000 ZW$'000 | ZW$'000 | ZW$'000 | ZW$ '000 | ZW$'000 | ||
For the year ended 28 | ||||||
February 2022 | ||||||
Revenue | 17,312,761 | 5,158,497 | 4,206,553 | 1,672,994 | (1,065,854) | 27,284,951 |
Interest income from | ||||||
banking operations | - | 2,644,448 | - | - | - | 2,644,448 |
Finance costs | (171,875) | (8,218) | (96,393) | (532,987) | 421,556 | (387,917) |
Fair value adjustments on | ||||||
financial assets | 1,341,203 | 465,542 | 2,470,375 | 190,617 | (789,468) | 3,678,269 |
Depreciation, amortisation | ||||||
and impairment | (1,033,903) | (918,611) | (289,552) | (326,050) | - | (2,568,116) |
Segment profit / (loss) | 2,230,192 | 976,155 | 1,765,695 | (3,642,581) | - | 1,329,461 |
Segment assets | 15,936,208 | 28,751,016 | 6,464,174 | 20,102,451 | (23,513,849) | 47,740,000 |
Segment liabilities | 8,850,575 | 19,924,693 | 2,798,131 | 10,353,928 | (5,794,229) | 36,133,098 |
Analysis of additions | ||||||
during the year | ||||||
Additions to property and | ||||||
equipment | 342,173 | 1,384,094 | 40,759 | 20,019 | - | 1,787,045 |
Additions to intangible | ||||||
assets | - | 416,414 | 39,045 | - | - | 455,459 |
Additions to investment | ||||||
properties | - | 53,494 | - | - | - | 53,494 |
For the year ended 28 | ||||||
February 2021 | ||||||
Revenue | 14,281,351 | 4,148,428 | 3,668,742 | 1,705,962 | (910,097) | 22,894,386 |
Interest income from | ||||||
banking operations | - | 855,913 | - | - | - | 855,913 |
Finance costs | (160,051) | (13,360) | (25,619) | (317,536) | 92,521 | (424,045) |
Fair value adjustments on | ||||||
financial assets | 76,089 | - | 983,169 | - | (146,538) | 912,720 |
Depreciation, amortisation | ||||||
and impairment | (606,934) | (2,817,256) | (239,760) | (335,105) | - | (3,999,055) |
Segment profit / (loss) | 968,715 | (1,500,532) | (2,209,961) | 1,010,221 | - | (1,731,557) |
Segment assets | 16,631,557 | 22,877,491 | 4,308,562 | 19,477,578 | (20,482,730) | 42,812,458 |
Segment liabilities | 12,288,086 | 19,042,974 | 2,431,308 | 6,635,709 | (5,736,977) | 34,661,100 |
Analysis of additions | ||||||
during the year | ||||||
Additions to property and | ||||||
equipment | 346,524 | 367,106 | 18,934 | 146,828 | - | 879,392 |
Additions to intangible | ||||||
assets | - | 62,925 | - | 8,689 | - | 71,614 |
Additions to investment | ||||||
properties | - | 781,213 | - | - | - | 781,213 |
HISTORICAL* | ||||||
Adjustment | ||||||
Mobile | Digital | Journal & | ||||
Money | Banking | InsurTech | Other | Eliminations | Total | |
ZW$'000 ZW$'000 | ZW$'000 | ZW$'000 | ZW$ '000 | ZW$'000 | ||
For the year ended 28 | ||||||
February 2022 | ||||||
Revenue | 13,086,617 | 3,957,047 | 3,114,557 | 1,285,480 | (803,390) | 20,640,311 |
Interest income from | ||||||
banking operations | - | 2,079,540 | - | - | - | 2,079,540 |
Finance costs | (124,552) | (5,938) | (73,158) | (407,090) | 325,268 | (285,470) |
Fair value adjustments on | ||||||
financial assets | 1,562,061 | 579,780 | 2,651,356 | 167,626 | (739,790) | 4,221,033 |
Depreciation, amortisation | ||||||
and impairment | (603,239) | (359,257) | (174,779) | (73,462) | - | (1,210,737) |
Segment profit / (loss) | 3,123,049 | 2,041,994 | 1,971,077 | (5,225,965) | - | 1,910,155 |
Segment assets | 15,070,757 | 26,118,059 | 3,304,128 | 6,974,117 | (8,909,510) | 42,557,551 |
Segment liabilities | 8,551,725 | 19,184,442 | 2,390,109 | 10,690,015 | (5,794,230) | 35,022,061 |
Analysis of additions | ||||||
during the year | ||||||
Additions to property and | ||||||
equipment | 267,178 | 1,238,040 | 32,464 | 14,868 | - | 1,552,550 |
Additions to intangible | ||||||
assets | - | 365,797 | 31,977 | - | - | 397,774 |
Additions to investment | ||||||
properties | - | 40,792 | - | - | - | 40,792 |
For the year ended 28 | ||||||
February 2021 | ||||||
Revenue | 5,886,788 | 1,835,170 | 1,649,673 | 758,881 | (370,827) | 9,759,685 |
Interest income from | ||||||
banking operations | - | 386,701 | - | - | - | 386,701 |
Finance costs | (73,323) | (4,394) | (11,456) | (142,320) | 40,987 | (190,506) |
Fair value adjustments on | ||||||
financial assets | 45,807 | - | 799,113 | - | (61,933) | 782,987 |
Depreciation, amortisation | ||||||
and impairment | (87,392) | (187,686) | (38,522) | (31,831) | - | (345,431) |
Segment profit / (loss) | 583,185 | 386,423 | 884,372 | (1,980,325) | - | (126,345) |
Segment assets | 9,452,375 | 12,688,621 | 2,390,587 | 2,283,217 | (3,787,321) | 23,027,479 |
Segment liabilities | 7,321,041 | 11,348,555 | 1,076,252 | 3,930,524 | (3,453,767) | 20,222,605 |
Analysis of additions | ||||||
during the year | ||||||
Additions to property and | ||||||
equipment | 257,366 | 175,246 | 7,124 | 49,732 | - | 489,468 |
Additions to intangible | ||||||
assets | - | 146,222 | - | 1,575 | - | 147,797 |
Additions to investment | ||||||
properties | - | 36,192 | - | - | - | 36,192 |
*The historical financial results have been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019.
Notes to the abridged consolidated financial statements
For the year ended 28 February 2022
1. GENERAL INFORMATION
EcoCash Holdings Zimbabwe Limited ("EHZL" or "the Company") and its subsidiaries were demerged from Econet Wireless Zimbabwe Limited ("EWZL"), effective 1 November 2018.
These consolidated financial statements comprise the Company and its subsidiaries (collectively "the Group" and individually the "Group companies"). The Group's subsidiaries and main activities are as follows:
- EcoCash (Private) Limited - (mobile money transfer and payments services);
- Steward Bank Limited - (digital commercial bank);
- Econet Life (Private) Limited - (mobile based funeral and life assurance company)
- Econet Insurance (Private) Limited - (short-term insurance company);
- Econet Services (Private) Limited - (On-demand services, e-commerce, farming technology 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.
Notes to the abridged consolidated financial statements (continued) | 4 | |||||
1. | GENERAL INFORMATION (CONTINUED) | 20 4 5 / PAGE | ||||
- | ||||||
These abridged consolidated financial statements are presented in Zimbabwe Dollars ("ZW$"), which | E LIMITED | |||||
is the functional and presentation currency of the primary economic environment in which the Group's | ||||||
entities operate. | BW | |||||
ZIMBA | ||||||
The historical results have been presented as supplementary information, in line with the Public Accountants | HOLDINGS | |||||
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 | ASH | |||||
and these have been subjected to an audit by the auditors. | ||||||
ECOC | ||||||
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- | ||||||
compliance with IAS 21, 'The effects of foreign exchange rates' and IAS 16, 'Property, plant and equipment' | ||||||
and current year non-complianceswith IAS 29, 'Financial reporting in hyperinflationary economies' and | ||||||
IFRS 13, 'Fair value measurement'. Consequently, the Directors advise users of these abridged consolidated | ||||||
financial statements to exercise caution. | ||||||
The underlying 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 of 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 28 February 2022, 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 28 February 2022. | ||||||
3.1 | 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 28 February 2022 are as follows; | ||||||
CPI Index | Conversion Factor | |||||
28 February 2022 | 4,483.06 | 1.00 | ||||
28 February 2021 | 2,698.89 | 1.66 | ||||
1 March 2021 to 28 February 2022 Average | 3,415.67 | 1.31 | ||||
1 March 2020 to 28 February 2021 Average | 1,921.05 | 1.40 | ||||
Non-monetary assets and liabilities carried at historic 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. This prospective change in IAS 29 application start date has been detailed in Note 10.
4. AUDIT OPINION
The abridged consolidated financial statements should be read in conjunction with the complete set of audited consolidated financial statements for the year ended 28 February 2022 which have been audited by Deloitte & Touche in accordance with International Standards on Auditing and a modified opinion has been issued thereon. This opinion carries an adverse opinion with respect to;
- Unresolved matters from the prior year ended 28 February 2021 with carryover effects on the year ended 28 February 2022 and impact on comparability.
- Non-compliancewith IFRS 13, 'Fair value measurement' in determining of the value of Investment property, the property and equipment and unquoted investments measured at fair value through profit or loss.
- Non-compliancewith IAS 8, 'Accounting Policies, Changes in Accounting Estimates and Errors' on comparative information; prospective restatement in the current year of a prior period error on measurement of intangible assets.
- Non-compliancewith IAS 1, 'Presentation of Financial Statements' due to inability to separately present gross exchange gains and gross exchange losses for the banking subsidiary.
The auditor's report contains the following key audit matters;
- Valuation of suspense accounts.
- Interest and non-interest income recognition.
The Auditors' report on the consolidated financial statements is available for inspection at the Company's registered office and on the Zimbabwe Stock Exchange website. The engagement partner responsible for the audit was Mr Lawrence Nyajeka, PAAB Practice Certificate number 0598.
5. 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 certain qualifications 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.
DIRECTORS: Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Miss 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. | |
( f o r m e r l y C a s s a v a S m a r t e c h Z i m b a b w e L i m i t e d )
(Incorporated in Zimbabwe on 29 March 2012 under Company Registration Number 2487/2012) ZSE Alpha Code: EHZL.zw ISIN ZW0009012437
ECOC ASH HOLDINGS ZIMBA BW E LIMITED - 20 4 5 / PAGE 5
Notes to the abridged consolidated financial statements (continued)
6 | OTHER INFORMATION | |||||
INFLATION ADJUSTED | HISTORICAL* | |||||
2022 | 2021 | 2022 | 2021 | |||
ZW$'000 | ZW$'000 | ZW$'000 | ZW$'000 | |||
6.1 | Depreciation, impairment and amortisation | |||||
of property, equipment and intangible assets | (2,568,116) | (3,999,055) | (1,210,737) | (345,431) | ||
6.2 | Earnings / (losses) per share | |||||
Weighted number of ordinary shares for the | ||||||
purposes of basic and diluted earnings per | ||||||
share calculation ('000) | 2,590,577 | 2,590,577 | 2,590,577 | 2,590,577 | ||
Basic and diluted earnings / (loss) per share | ||||||
(ZW$) | 0.434 | (0.575) | 0.645 | (0.088) | ||
Headline earnings / (loss) per share (ZW$) | 0.509 | 0.242 | 0.649 | (0.081) | ||
Reconciliation of profits / losses for headline | ||||||
earnings per share | ||||||
Profit / (loss) for the year attributable to | ||||||
ordinary shareholders | 1,123,436 | (1,488,633) | 1,671,487 | (227,977) | ||
Adjustment for capital items (net of taxation): | ||||||
Loss on disposal of property and equipment | 1,941 | 8 | 1,402 | 2,153 | ||
Impairment of property and equipment | 17,653 | 10,621 | 5,638 | 11,470 | ||
Impairment of intangible assets | 174,295 | 11,209 | 2,820 | 3,351 | ||
Headline earnings / (loss) attributable to | ||||||
ordinary shareholders | 1,317,325 | (1,466,796) | 1,681,347 | (211,003) | ||
6.3 | Commitments for capital expenditure | |||||
Authorised and contracted for | 2,242,504 | 4,462,767 | 1,950,324 | 637,265 | ||
Authorised and not contracted for | 171,338 | 6,744,461 | 103,149 | 963,082 |
*The historical financial results have been presented as supplementary information, in line with the PAAB's recommendation set out in Pronouncement 01/2019.
The capital expenditure is to be financed from internal cash generation, extended supplier credits and bank credit.
-
FINANCIAL INSTRUMENTS - Mobile Money Trust Bank and Liabilities Balances
"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. - 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 28 February 2022 | ||||||||
Investment in financial assets | 6,108,898 | 5,943,022 | - | 165,876 | ||||
6,108,898 | 5,943,022 | - | 165,876 | |||||
At 28 February 2021 | ||||||||
Investment in financial assets | 1,802,898 | 1,684,318 | - | 118,580 | ||||
1,802,898 | 1,684,318 | - | 118,580 | |||||
HISTORICAL* | ||||||||
Total | Level 1 | Level 2 | Level 3 | |||||
ZW$ '000 | ZW$ '000 | ZW$ '000 | ZW$ '000 | |||||
At 28 February 2022 | ||||||||
Investment in financial assets | 6,108,898 | 5,943,022 | - | 165,876 | ||||
6,108,898 | 5,943,022 | - | 165,876 | |||||
At 28 February 2021 | ||||||||
Investment in financial assets | 1,085,379 | 1,013,992 | - | 71,387 | ||||
1,085,379 | 1,013,992 | - | 71,387 |
- LOANS AND BORROWINGS
The Group entered into a scrip loan agreement during the year and the loan matures in two years. The loan was received as equities in a listed entity and are repayable in equal number of the same equities received. The fair value movements on the equities are reported as other expenses. This loan is unsecured. - 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.
We continually evaluate the impact of the pandemic on our business over the short to medium term. The going concern assessment has been extended for the 12-month period commencing from the date of approval of these consolidated financial statements for issue and incorporated all available information on the operating environment and future risks and uncertainties on which sensitivity analysis were also made.
Notes to the abridged consolidated financial statements (continued)
-
GOING CONCERN (CONTINUED)
The fintech business unit, which is the Group's largest operating unit, constitutes about 80% of the total Group revenue. Within the fintech business unit, 72% of the revenue comes from the mobile money business unit, Ecocash and an analysis has been made on both the ability of the Group and the biggest cash generating unit, Ecocash, to continue as going concerns.
Macroeconomic uncertainties characterised by hyperinflation, rapid changes in policies and challenges in accessing foreign currency as well as global and local uncertainties created by the rollover impact of COVID-19 have resulted in a challenging operating environment for the Group. The Group will continue to adopt mitigatory measures, within the bounds of the country's laws, to minimise the adverse impacts of the challenging operating environment.
ZW$3.3 billion of the related party payables relate to debentures balances which were assumed pursuant to the demerger of the Group from Econet Wireless Zimbabwe Limited on 1 November 2018. The Group's 50% share of the 904 778 710 (2021: 1 166 906 618) unsecured redeemable debentures with an annual compounding coupon rate of 5% were issued at a subscription price of 4.665 US cents per debenture and these are accounted for as a long-term related party payable. The obligation is denominated in United States dollar and as such subject to exchange rate revaluation. Significant exchange rate movements have been experienced in the economy during the reporting period under review. As at 28 February 2022 the Group recorded exchange losses amounting to ZW$1.2 billion (2021: ZW$6.3 billion). The related party payable together with the accrued interest will mature in April 2023. Given the impact of the exchange rate fluctuations on the business performance, during the current financial year, a call was made to debenture holders for early redemption and 22% of debenture holders exercised the option. The Group will continue to implement measures to mitigate against exchange risk and strengthen performance.
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 as the Group's largest operating unit will continue to deliver positive results, comply with all capital ratios and the current capital requirements have been met. - CHANGE IN APPLICATION DATE OF IAS 29 - FINANCIAL REPORTING IN HYPERINFLATIONARY ECONOMIES
In February 2019, the Government of Zimbabwe issued Statutory Instrument (S.I.) 33 of 2019 which, among other things, prescribed parity between the US dollar and local mediums of exchange as at and up to the effective date of 22 February 2019 for accounting and other purposes. S.I. 33 also prescribed the manner in which certain balances were to be treated as a consequence of the recognition of the RTGS dollar / ZW dollar as currency in Zimbabwe. In our opinion and based on the guidance issued by the Public Accountants and Auditors Board (PAAB), the change in functional currency translation guidelines prescribed by S.I. 33 and adopted in preparing the consolidated financial statements for prior years to comply with statutory requirements were contrary to the provisions of IAS 21, 'The effects of changes in foreign exchange rates'.
In financial year 2020, the factors and characteristics to apply IAS 29, 'Financial reporting in hyperinflationary economies' were met in Zimbabwe. As a result, the Public Accountants and Auditors Board (PAAB) pronounced that entities reporting in Zimbabwe were required to apply the requirements of IAS 29 for reporting periods ended on or after 1 July 2019. Consequently, 2020 consolidated financial statements were prepared in accordance with IAS 29 as if the economy had been hyperinflationary from 1 March 2019. The Group adopted 1 March 2019 to apply IAS 29 as it was the commencement date of the prior year financial year and the immediate date after the adoption of the Zimbabwe dollar as the functional and reporting currency by the Group in accordance with S.I. 33. However, there was a general consensus amongst market participants that the date of change in functional currency should have been 1 October 2018. Based on the consensus, the changes in the general pricing power of the functional currency ought to apply from 1 October 2018. The Directors, however, chose to strictly comply with S.I. 33 in 2020.
The Directors in the prior year assessed that the cumulative effects of non-compliance with IAS 21 and its consequent impact on IAS 29 which all could not be accurately ascertained in prior years were in material respects recycled to retained earnings. As a result of the inability to accurately determine the prior year aforementioned specific effects, the cumulative effect arising from applying 1 March 2019 instead of 1 October 2018 as the IAS 29 application date were adjusted against opening equity components as disclosed on the statement of changes in equity prior period numbers. - PROSPECTIVE RESTATEMENT IN THE CURRENT YEAR OF A PRIOR PERIOD ERROR ON MEASUREMENT OF INTANGIBLE ASSETS
In prior years, computer software was carried at revalued amounts after initial recognition. However, as per current year assessment, this was noted as an error due to absence of an active market for the computer software from prior years.
The cumulative effects of the prior year revaluations have been corrected prospectively by including the necessary restatement adjustments as part of the current year movements between the opening and closing balances of the affected intangible assets, and related revaluation reserve, deferred tax and retained earnings. Equity component adjustments are disclosed on the statement of changes in equity.
The opening cost and accumulated amortisation for computer software had been overstated by an inflation adjusted amount of ZW$62 million and ZW$835 million respectively. The revaluation reserve thereof had been overstated by ZW$303 million and retained earnings had been understated by ZW$901 million. - EVENTS AFTER REPORTING DATE
Subsequent to year-end, the government introduced various measures to restore confidence, preserve value and restore macroeconomic stability. The measures included directives to banks on lending and interest rate guidelines, introduced the willing-buyer-willing seller exchange rate and also introduced higher capital gains taxation on short-term investments to curb speculative investments.
There has been a significant decline in the ZW$/USD foreign exchange rate from 124:1 as at 28 February 2022 compared to 403:1 as at 19 July 2022.
The above issues are considered to be non-adjusting events for purposes of IAS 10, 'Events after the reporting period' on the basis that the changes were substantially enacted after the end of the 28 February 2022 reporting period.
DIRECTORS: Mrs S.G. Shereni (Chairperson), Mr M.L. Bennett, Dr Z. Dillon, Miss 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. | |
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EcoCash Holdings Zimbabwe Ltd. published this content on 20 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 July 2022 06:53:02 UTC.