Letshego : UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023

LETSHEGO AFRICA HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

Letshego Africa Holdings Limited

Condensed Consolidated Financial Statements 31 December 2023

TABLE OF CONTENTS
	Page No
Directors' Report	2
Statement of Directors' Responsibility	3
Condensed Consolidated Statement of Financial Position	5
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income	6
Condensed Consolidated Statement of Changes in Equity	7
Condensed Consolidated Statement of Cash flows	8
Segmental Information	9 - 10
Significant Accounting Policies	11 - 14
Notes to the Condensed Consolidated Financial Statements	15 - 31

Letshego Africa Holdings Limited

Condensed Consolidated Financial Statements 31 December 2023

DIRECTORS' REPORT

For the year ended 31 December 2023

The Board of Directors is pleased to present their report to Shareholders together with the unaudited condensed consolidated financial statements for the year ended 31 December 2023.

1. Financial results
   The condensed consolidated financial statements adequately disclose the results of the Group's operations for the year ended 31 December 2023.
   Impact of IAS 29 Financial Reporting in Hyperinflationary Economies
   During the second half of the year the Group classified Ghana as a hyperinflationary economy, following EY Global's assessment of the economy of Ghana to be hyperinflationary as at 31 December 2023 and thereafter. Consequently, the results of the Group's activities in Letshego Ghana Savings and Loans PLC have been prepared in accordance with IAS 29 Financial Reporting in Hyperinflationary Economies . The impact of this on the Group's financial results, which is a net loss of approximately P130.4 million, is outlined in Note 36 of the condensed consolidated financial statements. The Institute of Chartered Accountants of Ghana have not classified Ghana as a hyperinflationary economy.
   Prior period error
   In 2023, it was determined that during the financial years 2019 to 2022, the calculation of the Expected Credit Loss Allowances was incorrect due to the inclusion of a discount factor to Stage 3 exposures at default. This error was corrected retrospectively in accordance with IAS 8 Accounting policies, changes in accounting estimates and errors as outlined in Note 1 of the condensed consolidated financial statements and has had the impact of reducing opening retained earnings by approximately P72.6 million. The change in the calculation methodology also had an impact of increasing current year expected credit losses recognised in profit or loss by approximately P128.2 million.
   Financial assets at fair value through other comprehensive income
   The Group had an equity investment in a financial services organisation with a service platform to offer financial products to individuals and micro and small enterprises in Africa and Europe. During the year, the financial services organisation undertook a restructuring and recapitalisation process, which culminated in the winding down of the organisation and its existing operations being transferred into a new entity, following a capital raising exercise in the new entity. The Group invested approximately P11 million to acquire equity securities in the new entity during the capital raising process and as a result of the winding down of the financial services organisation that the Group had an initial investment in, the investment was deemed to be impaired at 31 December 2023. This resulted in an amount of P43.1 million relating to the carrying amount of the initial investment being recognised as a loss in fair value of the investment in other comprehensive income in the current year, as outlined in Note 9 of the condensed consolidated financial statements. This amount, including a fair value loss of P13.1 million also related to the investment, which was reflected as an opening balance in a fair value reserve were then transferred to retained earnings upon derecognition of the initial investment. The latest valuation of the business at May 2023 was between US$176m and US$236m. The Group holds 1.5% in this equity investment.
2. Change Of Name
   On the 8th of December 2023, Letshego Holdings Limited changed its name to Letshego Africa Holdings Limited to reiterate the Group's differentiating Pan African presence and reach across the continent's emerging markets.
3. Directors
   The below are changes that took place during the current year:

Retirement:
Director's name	Designation	Retirement Date
Gerrit Van Heerde	Non-Executive Director	Retired on 30 August 2023

1. Independent auditors
   Ernst and Young 2nd Floor, Plot 22 Khama Crescent Gaborone, Botswana
2. Company secretary and registered office
   Gorata Tlhale Dibotelo Tower C, Zambezi Towers
   Plot 54352, Central Business District Gaborone, Botswana
3. Transfer secretaries
   PricewaterhouseCoopers (Pty) Ltd Plot 50371
   Fairgrounds Office Park Gaborone, Botswana
4. Attorneys and legal advisors
   Armstrongs Acacia House Plot 53438
   Cnr Khama Crescent Extension and PG Matante Road Gaborone, Botswana
5. Company registration
   Registration Number: UIN BW00000877524

Letshego Africa Holdings Limited	2
Condensed Consolidated Financial Statements 31 December 2023

STATEMENT OF DIRECTORS' RESPONSIBILITY

For the year ended 31 December 2023

The directors of Letshego Africa Holdings Limited (formerly Letshego Holdings Limited) are responsible for the condensed consolidated financial statements and all other information presented therewith. Their responsibility includes the maintenance of true and fair financial records and the preparation of these condensed consolidated financial statements using the framework principles, and the recognition and measurement principles of IFRS and contain the presentation and disclosures required by IAS 34 Interim Financial Reporting .

All companies within the Group maintain systems of internal control which are designed to provide reasonable assurance that the records accurately reflect its transactions and to provide protection against serious misuse or loss of the Group's assets. The directors are also responsible for the design, implementation, maintenance and monitoring of these systems of internal financial control. Nothing has come to the attention of the directors to indicate that any significant breakdown in the functioning of these systems has occurred during the year under review.

The going concern basis has been adopted in preparing the condensed consolidated financial statements. The directors have no reason to believe that the Group will not be a going concern in the foreseeable future based on forecasts and available cash resources.

The Board of Directors have reviewed and approved the accompanying condensed consolidated financial statements, set out on pages 5 to 31, for issue on 21st March 2024, which were signed on their behalf by:

……………………………	………..……………………………
P Odera	A Monyatsi
Group Board Chairman	Group Chief Executive

Letshego Africa Holdings Limited

Condensed Consolidated Financial Statements 31 December 2023

3

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 December 2023

		At	At	At
		31 December	31 December	1 January
		2023	2022	2022
		(Unaudited)	(Restated)*	(Restated)*
	Note	P'000	P'000	P'000
ASSETS
Cash and similar instruments	3	1,401,824	1,020,771	1,413,500
Investment securities	4	866,718	692,101	859,496
Financial assets at fair value through profit or loss	5	952,610	1,178,969	826,092
Advances to customers	6	13,487,892	12,654,857	11,920,346
Insurance contract assets	7	105,549	92,150	125,344
Other receivables	8	333,672	257,471	191,131
Financial assets at fair value through other comprehensive income	9	11,038	43,107	71,499
Income tax receivable		108,436	81,454	134,767
Property and equipment	10	104,812	116,761	172,822
Right-of-use assets	11	89,241	101,654	98,756
Intangible assets	12	398,710	305,798	30,040
Goodwill	13	30,591	31,910	67,715
Deferred tax assets		218,999	142,685	80,990
Total assets		18,110,092	16,719,688	15,992,498
LIABILITIES AND EQUITY
Liabilities
Financial liabilities at fair value through profit or loss	14	980,519	1,201,095	808,621
Customer deposits	15	1,537,984	1,120,827	1,175,586
Cash collateral	16	15,853	18,476	21,522
Income tax payable		116,133	82,029	81,510
Trade and other payables	17	796,541	585,578	868,924
Lease liabilities	18	97,972	97,953	99,646
Borrowings	19	9,626,301	8,027,840	7,380,768
Deferred tax liabilities		18,903	339	5,168
Total liabilities		13,190,206	11,134,137	10,441,745
Shareholders' equity
Stated capital	20	917,909	899,571	882,224
Hyperinflation translation adjustment**		83,920	-	-
Foreign currency translation reserve		(662,550)	(492,653)	(557,341)
Legal reserve		377,121	313,780	265,244
Fair value adjustment reserve		-	(13,144)	15,248
Share based payment reserve		34,832	42,474	39,907
Retained earnings		3,725,823	4,366,646	4,460,033
Total equity attributable to equity holders of the parent company		4,477,055	5,116,674	5,105,315
Non-controlling interests		442,831	468,877	445,438
Total shareholders' equity		4,919,886	5,585,551	5,550,753
Total liabilities and equity		18,110,092	16,719,688	15,992,498

*During the financial year under review, the Group corrected a prior period error related to the computation of expected credit losses. Refer to Note 1 for the accounting implications resulting from the restatement of the Group's previously reported financial statements as a result of the error. During the year, the Group also adopted IFRS 17: Insurance contracts for the first time. Refer to the 'New Standards, Interpretations and Amendments adopted by Group' for the accounting implications resulting in the restatement of the Group's previously reported financial statements upon adoption of the new Standard.

**During the second half of the year, the Group adopted IAS 29: Financial Reporting in Hyperinflationary Economies in relation to its Ghana subsidiary. The indicated amount represents the difference between the closing equity and reserves of the Ghanaian subsidiary for the previous financial year (whereby the Ghanaian local currency was considered stable and the equity and reserves balances were not restated), and the effect of translating these at the closing price index and exchange rate at the reporting date. Refer to Note 36.

Letshego Africa Holdings Limited

Condensed Consolidated Financial Statements 31 December 2023

5

31 December

2022

(Restated)

P'000

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 December 2023

Note

12 months 12 months ended ended

31 December

2023

(Unaudited)

P'000

Interest income at effective interest rate	21	3,424,947	3,145,672
Interest expense at effective interest rate	22	(1,690,430)	(1,376,678)
Other interest expense	22.1	(12,244)	(12,524)
Net interest income		1,722,273	1,756,470
Fee and commission income	23	57,028	89,554
Other operating income	24	256,141	251,937

Insurance revenue	25	286,519	295,491
Insurance service expense	25	(85,316)	(107,625)
Insurance service result		201,203	187,866
Operating income		2,236,645	2,285,827
Expected credit losses	26	(456,591)	(216,076)
Net operating income		1,780,054	2,069,751
Employee costs	27	(611,604)	(585,939)
Other operating expenses	28	(1,046,989)	(799,927)
Total operating expenses		(1,658,593)	(1,385,866)
Profit before taxation		121,461	683,885
Taxation		(270,260)	(332,311)
(Loss)/profit for the year		(148,799)	351,574
Attributable to :
Equity holders of the parent company		(201,049)	287,875
Non-controlling interests		52,250	63,699
(Loss)/profit for the year		(148,799)	351,574
Other comprehensive (loss)/income, net of tax
Other comprehensive income that may be reclassified to profit or
loss in subsequent periods:
Foreign currency translation differences arising from foreign operations		(180,058)	75,425
Other comprehensive income that will not be reclassified to profit or
loss in subsequent periods:
Fair value loss on financial asset designated at fair value through
other comprehensive income	9	(43,107)	(28,392)
Total comprehensive (loss)/income for the year		(371,964)	398,607
Attributable to :
Equity holders of the parent company		(414,053)	324,171
Non-controlling interests		42,089	74,436
Total comprehensive (loss)/income for the year		(371,964)	398,607
Weighted average number of shares in issue during the year (millions)		2,155	2,147
Dilution effect - number of shares (millions)		114	133
Number of shares in issue at the end of the year (millions)		2,175	2,149
Basic (loss)/earnings per share (thebe)		(9.3)	13.4
Diluted (loss)/earnings per share (thebe)		(8.9)	12.6

NOTE: The diluted EPS has been calculated based on the total number of shares that may vest in terms of the Group's long term staff incentive scheme.

Letshego Africa Holdings Limited

Condensed Consolidated Financial Statements 31 December 2023

6

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2023
	Stated capital	Hyperinflation	Retained	Share-based	Fair value	Foreign	Legal	Non-	Total
		translation	earnings	payment	reserve of	currency	reserve	controlling
		adjustment*		reserve	financial assets	translation		interest
					at FVOCI	reserve
	P'000	P'000	P'000	P'000	P'000	P'000	P'000	P'000	P'000
Balance at 1 January 2022 as previously stated	882,224	-	4,421,568	39,907	15,248	(557,341)	265,244	439,152	5,506,002
Adjustment on correction of error (Note 1)	-	-	38,465	-	-	-	-	6,286	44,751
Balance as at 1 January 2022 (restated)	882,224	-	4,460,033	39,907	15,248	(557,341)	265,244	445,438	5,550,753
Total comprehensive income for the year
Profit for the year	-	-	287,875	-	-	-	-	63,699	351,574
Other comprehensive income, net of income tax
Fair value adjustment of financial asset	-	-	-	-	(28,392)	-	-	-	(28,392)
Foreign currency translation reserve	-	-	-	-	-	64,688	-	10,737	75,425
Transactions with owners, recorded directly in equity
Allocation to legal reserve	-	-	(48,536)	-	-	-	48,536	-	-
Recognition of share based payment reserve movement	-	-	-	19,914	-	-	-	-	19,914
New shares issued from long term incentive scheme	17,347	-	-	(17,347)	-	-	-	-	-
Dividends paid by subsidiary to minority interests	-	-	-	-	-	-	-	(50,997)	(50,997)
Dividends paid to equity holders	-	-	(332,726)	-	-	-	-	-	(332,726)
Balance at 31 December 2022 (restated)	899,571	-	4,366,646	42,474	(13,144)	(492,653)	313,780	468,877	5,585,551
Total comprehensive loss for the year
Loss for the year	-	-	(201,049)	-	-	-	-	52,250	(148,799)
Other comprehensive loss, net of income tax
Fair value adjustment of financial asset	-	-	-	-	(43,107)	-	-	-	(43,107)
Foreign currency translation reserve	-	-	-	-	-	(169,897)	-	(10,161)	(180,058)
Transactions with owners, recorded directly in equity
Hyperinflation restatement adjustment* (Note 36)	-	83,920	-	-	-	-	-	-	83,920
Allocation from legal reserve	-	-	(63,341)	-	-	-	63,341	-	-
Recognition of share based payment reserve movement	-	-		10,696	-	-	-	-	10,696
New shares issued from long term incentive scheme	18,338	-	-	(18,338)	-	-	-	-	-
Dividends paid by subsidiary to minority interests	-	-	-	-	-	-	-	(68,135)	(68,135)
Dividends paid to equity holders	-	-	(320,182)	-	-	-	-	-	(320,182)
Transfer to retained earnings	-	-	(56,251)	-	56,251	-	-	-	-
Balance at 31 December 2023 - Unaudited	917,909	83,920	3,725,823	34,832	-	(662,550)	377,121	442,831	4,919,886

*During the second half of the year the Group adopted IAS 29: Financial Reporting in Hyperinflationary Economies in relation to its Ghana subsidiary. The indicated amount represents the difference between the closing equity and reserves of the Ghanaian subsidiary for the previous financial year (whereby the Ghanaian local currency was considered stable and the equity and reserves balances were not restated), and the effect of translating these at the closing price index and exchange rate at the reporting date. Refer to Note 36.

Letshego Africa Holdings Limited

Condensed Consolidated Financial Statements 31 December 2023

7

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 December 2023

		12 months	12 months
		ended	ended
		31 December	31 December
		2023	2022
		(Unaudited)	(Restated)
		P'000
	Note	P'000
Operating activities
Profit before taxation		121,461	683,885
Adjustments for :
: Interest income		(3,424,947)	(3,145,672)
: Interest expense		1,702,674	1,389,202
: Amortisation, depreciation, and loss on disposals		116,508	90,029
: Impairment and write off charge - advances to customers		609,125	362,619
: Impairment and write off (reversal)/charge - investment securities		(9,266)	36,027
: Impairment and write off charge - goodwill		-	35,805
Movement in working capital and other changes	29	(1,145,666)	(1,273,218)
Cash used in operations		(2,030,111)	(1,821,323)
Interest received		3,424,947	3,145,672
Interest paid		(1,690,430)	(1,376,678)
Income tax paid		(320,888)	(345,004)
Net cash flows used in operating activities		(616,482)	(397,333)
Investing activities
Purchase of treasury bills	4	(165,351)	-
Proceeds from disposal of treasury bills		-	131,370
Purchase of equity securities in financial assets	9	(11,038)	-
Purchase of property and equipment	10	(26,052)	(71,520)
Purchase of intangible assets	12	(120,026)	(222,531)
Net cash flows used in investing activities		(322,466)	(162,681)
Financing activities
Dividends paid to equity holders and subsidiary non-controlling interest		(388,317)	(383,723)
Repayment of principal portion of lease liabilities		(35,556)	(45,997)
Repayment of interest portion of lease liabilities	18	(12,244)	(12,524)
Proceeds from borrowings		3,449,546	3,425,610
Repayment of borrowings		(1,919,648)	(2,778,539)
Net cash flows generated from financing activities		1,093,781	204,827
Net movement in cash and similar instruments		154,833	(355,187)
Cash and similar instruments at the beginning of the year		994,582	1,355,294
Effect of exchange rate changes on cash and cash equivalents		(15,771)	(5,525)
Cash and similar instruments at the end of the year	3	1,133,644	994,582

Letshego Africa Holdings Limited

Condensed Consolidated Financial Statements 31 December 2023

8

LETSHEGO AFRICA HOLDINGS LIMITED

SEGMENTAL INFORMATION

For the year ended 31 December 2023

Reportable segments

												Holding
31 December 2023	Botswana	Namibia	Mozambique	Lesotho	Eswatini	Kenya	Rwanda	Uganda	Tanzania	Nigeria	Ghana	Company or	Total
												eliminations*
	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000
Operating income	652,609	543,276	475,566	91,178	112,438	132,200	22,472	176,403	145,918	67,734	217,819	(400,968)	2,236,645
Segment profit/(loss) before taxation	159,327	287,089	311,371	19,078	33,982	(37,489)	2,297	24,780	9,557	15,350	(62,880)	(641,001)	121,461
Taxation - consolidated													(270,260)
Loss - consolidated													(148,799)
Gross Advances to customers	3,845,720	3,506,060	2,542,221	507,733	628,914	602,407	177,103	579,435	502,204	145,898	1,308,094	-	14,345,789
Impairment provisions	(356,218)	(31,424)	(14,353)	(26,730)	(53,088)	(125,003)	(2,135)	(52,350)	(75,496)	(19,685)	(101,415)	-	(857,897)
Net Advances	3,489,502	3,474,636	2,527,868	481,003	575,826	477,404	174,968	527,085	426,708	126,213	1,206,679	-	13,487,892
Total assets
4,000,402	5,067,530	3,063,770	517,404	618,509	566,204	190,891	573,140	627,605	158,544	1,679,328	1,046,765	18,110,092
Borrowings
1,782,885	2,283,919	658,295	183,232	263,331	365,735	-	341,331	-	-	513,573	3,234,000	9,626,301
Total liabilities
2,278,883	3,093,005	1,299,354	205,392	300,161	424,637	68,394	357,894	67,480	46,189	1,323,866	3,724,951	13,190,206
												Holding
31 December 2022	Botswana	Namibia	Mozambique	Lesotho	Eswatini	Kenya	Rwanda	Uganda	Tanzania	Nigeria	Ghana	Company or	Total
												eliminations
	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000	P '000
Operating income	710,990	565,913	444,404	81,908	108,284	107,757	19,948	158,278	154,456	81,632	207,446	(355,189)	2,285,827
Segment profit/(loss) before taxation	474,781	320,083	264,490	39,779	55,928	5,109	2,555	36,136	16,976	11,240	3,419	(546,611)	683,885
Taxation - consolidated													(332,311)
Profit - consolidated													351,574
Gross Advances to customers	3,335,195	3,605,877	2,094,444	430,432	564,812	635,150	150,069	535,146	469,824	203,061	1,107,850	-	13,131,860
Impairment provisions	(125,566)	(14,592)	(10,095)	(17,097)	(34,597)	(59,265)	(1,369)	(26,396)	(68,831)	(26,596)	(92,599)	-	(477,003)
Net Advances	3,209,629	3,591,285	2,084,349	413,335	530,215	575,885	148,700	508,750	400,993	176,465	1,015,251	-	12,654,857
Total assets	3,839,752	4,535,745	2,408,945	424,478	564,534	655,665	174,657	589,361	661,923	239,528	1,398,338	1,226,762	16,719,688
Borrowings	1,802,404	1,895,734	259,818	62,670	221,105	394,747	-	322,640	-	-	686,142	2,382,580	8,027,840
Total liabilities	2,423,918	2,356,578	896,555	76,732	236,096	435,978	53,927	333,271	67,938	58,006	1,068,194	3,126,944	11,134,137

*Included in Holding Company or eliminations are intragroup charges between the Holding Company and subsidiary entities.

Letshego Africa Holdings Limited	9
Condensed Consolidated Financial Statements 31 December 2023

LETSHEGO HOLDINGS LIMITED

SEGMENTAL INFORMATION (continued)

For the year ended 31 December 2023

Disaggregated revenue information

Holding

Botswana

Namibia

Mozambique

Lesotho

Eswatini

Kenya

Rwanda

Uganda

Tanzania

Nigeria

Ghana

company or

Total

eliminations

P '000

P '000

P '000

P '000

P '000

P '000

P '000

P '000

P '000

P '000

P '000

P '000

P '000

31 December 2023

Interest income at effective interest rate Interest expense at effective interest rate Other interest expense

Net interest income

Fee and commission income

Other operating income

Net insurance service result**

Operating income

31 December 2022

Interest income at effective interest rate Interest expense at effective interest rate Other interest expense

Net interest income

Fee and commission income

Other operating income

Net insurance service result**

Operating income

787,803	564,652	659,293	104,995	147,262	166,525	39,085	226,715	139,032	69,448	658,497	(138,360)	3,424,947
(228,107)	(252,178)	(238,189)	(14,765)	(35,765)	(58,097)	(17,488)	(52,109)	(1,450)	(3,719)	(500,766)	(287,797)	(1,690,430)
(1,125)	(568)	(5,198)	(214)	(463)	(815)	(309)	(255)	(390)	-	(166)	(2,741)	(12,244)
558,571	311,906	415,906	90,016	111,034	107,613	21,288	174,351	137,192	65,729	157,565	(428,898)	1,722,273
1,081	24,476	10,860	370	-	12,804	821	-	2,611	613	3,392	-	57,028
92,957	5,691	48,800	792	1,404	11,783	363	2,052	6,115	1,392	56,862	27,930	256,141
-	201,203	-	-	-	-	-	-	-	-	-	-	201,203
652,609	543,276	475,566	91,178	112,438	132,200	22,472	176,403	145,918	67,734	217,819	(400,968)	2,236,645
756,665	504,165	558,649	102,964	133,886	147,381	24,411	193,550	136,662	85,379	654,527	(152,567)	3,145,672
(167,656)	(160,660)	(170,734)	(12,091)	(28,525)	(60,465)	(8,693)	(39,492)	(514)	(5,090)	(540,692)	(182,065)	(1,376,678)
(2,000)	(526)	(2,579)	(1,225)	(544)	(1,491)	(285)	(303)	(105)	-	(500)	(2,966)	(12,524)
587,009	342,979	385,336	89,648	104,817	85,425	15,433	153,755	136,043	80,289	113,335	(337,598)	1,756,470
(2)	34,906	16,416	-	-	8,966	1,994	-	395	1,098	25,699	82	89,554
123,983	162	42,652	(7,740)	3,467	13,366	2,521	4,523	18,018	245	68,412	(17,673)	251,937
-	187,866	-	-	-	-	-	-	-	-	-	-	187,866
710,990	565,913	444,404	81,908	108,284	107,757	19,948	158,278	154,456	81,632	207,446	(355,189)	2,285,827

*Included in Holding Company or eliminations are intragroup charges between the Holding Company and subsidiary entities.

**The Group adopted IFRS 17: Insurance contracts for the first time during the year under review. Previously the outcome of insurance arrangements that fall within the scope of the new Standard were reflected in 'Other operating income'.

Letshego Africa Holdings Limited	10
Condensed Consolidated Financial Statements 31 December 2023