INTEGRATED ANNUAL REPORT 2016 “So do not fear, for I am with you; do not be dismayed, for I am your God. I will strengthen you and help you; I will uphold you with my righteous right hand.” Isaiah 41:10 NIV Bible ABOUT THIS REPORT Our Commitment to Integrated Reporting Our commitment to value creation for our stakeholders, innovation and sustainability leadership made this publication the natural evolution in our communication with stakeholders. This marks our fifth year of integrated reporting covering corporate social investment, environmental issues and ethical reporting. Disclaimer - Forward-looking statements An integrated report includes certain ’forward-looking statements’. These forward-looking statements are necessarily about the future and therefore incorporate degrees of uncertainty. Consequently, future actual results and performance may differ from these statements. The forward-looking statements are current as of the date of publication of the integrated report. The Company makes no representation that the information will be publicly updated after release of this integrated report. Our business strategies are robust. We remain committed to taking the necessary decisions to protect and enhance value for the shareholders and other stakeholders. 1 Econet Wireless Zimbabwe Limited Integrated Annual Report 2016 CONTENTS OVERVIEW 3 Performance Highlights 3 Stakeholder Value Creation 4 New Products and Services 9 CORPORATE AND LEADERSHIP 10 Our Business 10 Corporate Profile 12 Company Profile 13 Chairman’s Statement to Shareholders 14 Chief Executive Officer’s Operations Review 18 Board of Directors 20 From the Directors 23 GOVERNANCE 26 Governance Statement 26 Risk Report 30 OUR STAFF AND COMMUNITY 37 Corporate Social Investment 37 Our Staff 40 Econet Coverage Map - February 2016 43 COMPLIANCE AND FINANCIAL REPORTING 44 Certificate by the Group Company Secretary 44 Directors’ Responsibility for Financial Reporting 46 Independent Auditors’ Report 47 Consolidated Statement of Financial Position 48 Consolidated Statement of Comprehensive Income 49 Consolidated Statement of Changes in Equity 50 Consolidated Statement of Cash Flows 51 Notes to the Financial Statements 52 Infrastructure, Policy Notes to the Consolidated Financial Statements 90 Innovation, ADMINISTRATION 111 Cost optimisation & Strategic Business Partnerships 112 Shareholder Analysis 113 Social responsibility Corporate and Advisory Information 114 2 Econet Wireless Zimbabwe Limited Integrated Annual Report 2016 OVERVIEW Performance Highlights 1. Earnings before interest, taxation, depreciation, impairment and amortisation (EBITDA). EBITDA for 2012 excludes once-off profit on disposal of investments. EBITDA includes share of profit/(loss) of associate. 2. Profit After Taxation 3. Average revenue per user per month 4. Capital expenditure 3 51 Econet Wireless Zimbabwe Limited | Integrated Annual Report 2016 Econet Wireless Zimbabwe Limited Integrated Annual Report 2016 Stakeholder Value Creation Our Value Drivers Transformation of the operating model In the period under review, the Group The focus on customer experience completed its project to mordenise the Our focus remains on delivering a network. This has improved internet seamless and simplified user experience access through 4G/LTE coverage in major for our customers, unlocking revenues and cities, towns and resort areas. Operating inculcating customer loyalty. In this regard efficiencies were achieved through a number of self-care deployments were aggressive cost optimisation initiatives. made to bring customer convenience. The MyEconet app, EcoCash app , Data Growing overlay services usage thresholds and data calculator Developing overlay services in order provide the customer with a seamless to diversify from voice, SMS and data experience and access to our diverse remains a key focus for the Group. Associate and subsidiaries portfolio of services, without the need to Services such as EcoHealth, Connected The Group has an associate and subsidiaries remember numerous short codes. Car, EcoFarmer and EcoSure are expected in diverse industry sectors such as financial to sustain revenue growth into the future. services, fibre optic transmission delivery, Investment in infrastructure and resources These overlay brands are fully explained financial transaction processing and The Group continues to invest in on page 9. The Group continues to pursue switching, all of which support our revenue infrastructure to develop the network. mobile financial services as a potential diversification strategy. Liquid Zimbabwe’s This will increase our coverage, improve growth frontier. International remittances fibre network expansion continues to provide our customer experience, keep pace with have, therefore been added to the a stable platform for growing data and voice technological developments and support EcoCash menu to increase convenience traffic. Synergies between Steward Bank and new products and services. to the customer. EcoCash enable the Group to offer unique financial products and services. 504 Econet Wireless Zimbabwe Limited | Integrated Annual Report 2016 Econet Wireless Zimbabwe Limited Integrated Annual Report 2016 OVERVIEW 5 51 Econet Wireless Zimbabwe Limited | Integrated Annual Report 2016 Econet Wireless Zimbabwe Limited Integrated Annual Report 2016 Infrastructure 6 Econet Wireless Zimbabwe Limited Integrated Annual Report 2016 7 Econet Wireless Zimbabwe Limited Integrated Annual Report 2016 EcoSure gives our customers the convenience and comfort of simple, affordable and reliable funeral cover. Customers access affordable funeral assurance packages via the phone with premiums ranging from as low as $0.50 (fifty cents) per month with pay outs ranging from $500 to $5 000 depending on the selected plan. Since its ground breaking launch in December 2014, EcoSure has transformed communities with more than one million previously underinsured Zimbabweans now having funeral insurance. EcoSure has gone even further and is increasingly attracting the interest of Burial societies and Corporates for the benefit of their members and employees respectively. 5088 Econet Wireless Zimbabwe Limited | Integrated Annual Report 2016 EconetEconet Wireless Wireless ZimbabweZimbabwe LimitedLimited IntegratedIntegrated AnnualAnnual ReportReport 20162016 OVERVIEW New Products and Services During the year, the Group in partnership with various international entities successfully launched diverse products and services aimed at adding value to our customers. Notable among these new innovations are the following; Ownai Ownai is a FREE Online market platform for Econet Wireless Zimbabwe subscribers to find, buy, place and sell a wide range of products and services online with ease and convenience. The zero-rated (free browsing) multi-channel platform offers a traditional website and mobile optimized site for smartphones. In future, it will also offer more sites for feature phones and USSD service and Android/iOS apps. Ownai will evolve into an online market with storefronts, EcoCash online payments, inventory management tools and order fulfilment. Ruzivo Ruzivo Digital Learning is an online interactive digital learning platform targeted at primary and secondary students in Zimbabwe. All our content is aligned to the Zimbabwean curricula. Grade 4, 5, 6 and 7 Mathematics and Science education content has been endorsed by the Ministry of Primary and Secondary Education, Curriculum Development Unit (CDU). Connected Home Econet Connected Home, is an innovative solution which enables customers to monitor, control and secure their homes and properties via their mobile phones. This service allows one to see live videos of what is going on in the home, using a cell phone from anywhere in the world. The system detects fire and water leaks that can damage or destroy property. EcoFarmer In keeping with the pioneering spirit, the business launched EcoFarmer as a pilot project. The business seeks to serve over 67% of Zimbabwe’s population who reside in the rural areas and mostly depend on agriculture through offering products, which improve access to information, market and financial services. Projects and initiatives are at various stages of implementation. EconetHealth EcoHealth leverages on the mobile phone platform to deliver innovative m-health solutions that transform lives of communities. EcoHealth Tips provides health information via the phone in selected languages. These innovative products have been positively received by consumers. The business will continue to innovate to make healthcare available to the majority of Zimbabweans at an affordable price. Connected Car Econet Connected Car gives Econet customers the power to manage and maintain their vehicles from their tablets, smartphones, any web portal or through the Econet Connected Car Mobile Application. Econet Connected Car offers Fleet Management Service, Personal Vehicle Management and Roadside Assistance. Econet Connected Car is the perfect affordable vehicle tracking solution for both corporates and individuals who want to be in control of their vehicles. 9 51 Econet Wireless Zimbabwe Limited | Integrated Annual Report 2016 Econet Wireless Zimbabwe Limited Integrated Annual Report 2016 Our Business Our Vision To provide world-class telecommunications to all the people of Zimbabwe. Our Mission To serve Zimbabwe by pioneering, developing and sustaining reliable, efficient and high-quality telecommunications of uncompromising world-class standards and ethics. Our Values