AUDITED ABRIDGED FINANCIAL STATEMENTS for the Year Ended 28 February 2018

AUDITED ABRIDGED FINANCIAL STATEMENTS for the year ended 28 February 2018

HIGHLIGHTS STEWARD BANK STEWARD

US$13.3m 1765/ PAGE 1 - 1765/ PAGE

US$7.1m 133% COST TO US$8.4m NET OPERATING US$32.7m 70% INCOME +125% LIQUIDITY Tier 1 Capital NON-FUNDED US$75.1m RATIO INCOME 2018 2017 INCOME 2018 2017 RATIO Strong growth in More than double to the transactonal based revenue +289% +87% minimum regulatory in line with strategic intent PROFIT BEFORE TAX NET INTEREST INCOME rato of 30% 49%

CHAIRMAN’S STATEMENT cash challenges. The cash shortages resulted in a signifcant growth CHIEF EXECUTIVE OFFICER’S STATEMENT year under review, we successfully signed up to 65% of our existng and unprecedented shif towards digital fnancial services with customers to our digital platorms, which include Square Mobile Converged technology solutons to solve every day problems signifcant pressure being exerted on banking platorms including our Sustained Growth in a Challenging Environment Banking, Kambudzi Banking and EcoCash Banking Services as part I feel honoured and privileged to present Steward Bank’s fnancial own. Having previously positoned ourselves as a digital frst fnancial Steward Bank has emerged as a signifcant player in the Zimbabwean of an initatve we have labelled The Digitsaton of Everything’. This results for the year ended 28 February 2018. It has been about four insttuton, the Bank migrated a signifcant number of its customers Banking Sector on the back of a technology driven banking model migraton was complemented by a natonwide fnancial inclusion years since we started on the journey to convert to digital banking. onto our electronic banking platorms to alleviate the cash shortages. since the acquisiton by the Econet Group in 2013. We are privileged and fnancial literacy campaign, educatng our customers on how to The Bank’s growth in those few years refects the progress we have The Bank successfully lobbied the Ministry of Finance to remove the to be one of only a few banks worldwide fully owned by a mobile interface with the Bank’s products and services without visitng the made with our core strategy of developing digital banking solutons fve (5) cents tax on all Point of Sale (POS) transactons with a value of network operator. As such, our core strategy remains the same, to be branch. We are aware our customers want optons when they engage for every Zimbabwean. Our results demonstrate that our income mix less than $10. The Bank also removed all fees for transactons below a mobile frst, high-growth digital bank with a diferentated business with our services, whether in any of our branches, on the Square is strongly aligned to the Telecommunicatons, Media and Technology $1 for its customers to encourage customers to embrace digital model which integrates our innovatve digital ofering delivered by an App, over the phone or online, our aim is to deliver faster, more (“TMT”) business model developed by our shareholder, Econet channels and reduce demand for cash. enthusiastc team of highly motvated “Stewards”. efcient and more secure platorms for our customers to execute Wireless Zimbabwe Limited. We believe in doing well by doing good their transactons with minimum fricton. and the Bank has made a signifcant social impact, improving the The Banking Sector witnessed a slowdown in Real Time Gross TRANSACTIONS DISTRIBUTION Setlement (RTGS) balances from a peak of $2.1 billion during the Our Contributon to the SME Sector CUSTOMER DEPOSITS course of the year down to $1.8 billion, largely a result of money 3% 2% One of the fastest growing segments for the Bank is the small and US $’000 market instruments such as savings bonds and treasury bills issued by medium sized enterprises (SMEs) which we believe is one of the most the Central Bank. Lending rates averaged 9.04% due to the high credit under-served market. In the same away, we have provided services 348,164 risk in the country. The Bank maintained its conservatve lending US $’000 8% to the previously unbanked individuals, we are commited to provide approach whilst extending support to our network of merchants, relevant solutons to the SME sector. The Bank contnues to support 144,632 141% Agents, SMEs and small holder farmers across the country. 18% Growth TOTAL ACCOUNTS Government eforts to contain the trade gap resulted in the trade 79% defcit for the year narrowing to $1.4 billion, from $2.1 billion in 90% 2017. Foreign Direct Investment (FDI) remained subdued on account of perceived country risk and a poor credit ratng. Politcal changes in November 2017 appear to have increased investor interest in the country. The new Government has made several policy changes 45% aimed at building confdence amongst investors. In the midst of Transactons Distributon by Transactons Distributon by 2017 2018 an uncertain economic environment, Steward Bank’s fnancial Platorm 2017 Platorm 2018 396,978 573,916 Growth in performance for the year ended 28 February 2018, detailed in the Customer livelihoods of its customers and fulflling the shareholder’s vision of Chief Executve Ofcer’s report, demonstrates our resilience and Agent Banking Branch Digital Banking Acquisiton improving access to fnancial services to everyone through low cost ability to unlock shareholder value in a challenging market. and scalable services ofered primarily on the mobile phone. -1% -10% +11% Regulatory Environment I am happy to report that the Bank recorded another year of sustained 2017 2018 Through the eforts of the Bank and its stakeholders, in collaboraton To encourage the shif to plastc money, the Central Bank, with the consensus of banks reduced transacton costs on all electronic growth across all business segments resultng from an integraton of this sector through our comprehensive, fully integrated and iconic with the monetary authorites, Steward Bank has made an cutng edge technologies, with our mobile-centric platorms and Zama Zama account. This SME account service is designed to assist immense contributon to fnancial inclusion in Zimbabwe. The platorms. The Regulator also tghtened its foreign currency Bank’s solutons, which complement those of our strategic partner, management and monitoring of sectorial payments made by the additon of a signifcant number of new retail and commercial small businesses with fnancial literacy training, access to markets, EcoCash, have assisted in managing the cash crisis in the country. Our banks on a weekly basis. The 2018 Monetary Policy Statement customers which has been detailed in the Chairman’s statement. technical and working capital facilites. Our Incubaton Pod, which is goal is to simplify our customer’s fnancial services experience and streamlined payments, prioritsing sectors such as Energy, Health run every week across diferent cites, has assisted our SME clients increase access to all our customers by putng a bank in everyone’s and Manufacturing to efectvely allocate scarce nostro funding. The Performance Overview with training and seminars on various business related topics to aid pocket. We contnue to distnguish ourselves from our peers through Bank contnues to support the Central Bank’s eforts in this regard by In the fnancial year under review, the Bank recorded a Proft Before their growth strategies and interacton with other business leaders. relentless innovaton and driving tmely and relevant solutons for allocatng foreign currency reserves to the priority sectors. Tax of $32.7 million due to the growth in revenue driven mainly by an our customer’s everyday fnancial challenges. increase in transactonal volumes on our digital platorms. Kwenga - Payment Soluton for Small Business Operators Future Prospects – Tech Driven Financial Services In January, 2018, the Bank introduced, Kwenga, a revolutonary low Our Financial Performance Steward Bank remains focused on providing customer centric Key Performance Indicators cost merchant payment soluton which increased our merchant The Bank registered signifcant growth across a number of key products and services to all Zimbabweans. Our stated goal is to network natonwide. The soluton provides previously excluded small indicators. In this fnancial year, we are privileged to have welcomed improve fnancial deepening through mobile and electronic payment Key Rato Financial Financial business operators and vendors with capabilites to accept electronic 176,000 new customers to the Bank, taking the total number of systems for the benefts of millions of Zimbabweans previously year ended year ended payments in light of the prevailing cash shortages. The market’s customers using our services to excluded from mainstream fnancial services. A signifcant investment 28 Feb 28 Feb acceptance of this product has been truly humbling. To date, we TOTAL ASSETS over 573,000. Our approach to is currently being deployed in upgrading and transforming our digital 2018 2017 have issued more than 10,000 Kwenga devices to taxi drivers, kombi delivering solutons to all our platorms to world class standards as part of the digitsaton of all our operators, hairdressers, vendors and various small businesses who customers is technology driven, services. In the next fnancial year, the Bank will focus on increasing Cost to Income Rato 49% 62% previously could not aford a conventonal POS machine to acquire 2017 relying largely on the digital its pace of digitsaton and integraton with the Econet Group’s Staf Costs to Income Rato 13% 20% card transactons. This soluton complements the progress made by platorms developed by Econet various technology initatves. Despite the headwinds ahead, we Net Interest Margin 7% 8% our colleagues at EcoCash in increasing merchant services across the Wireless Zimbabwe Limited, remain bullish about the Bank’s future prospects and confdent in Return on Equity 26% 9% country whilst also contributng to government eforts to increase our parent company. This has the ability of management and the Board to turn these challenges Prudental Liquidity Rato 70% 81% the use of plastc money within the informal sector. into opportunites. Loans to Deposit Rato 11% 40% US $’000 allowed us to achieve a reach and scale that otherwise would not Outreach Programmes to Smallholder Farmers 226,058 be possible using conventonal Awards and Recogniton The Bank’s net operatng income grew by 133% from the prior year In conjuncton with SNV Internatonal, Steward Bank partcipated banking processes and systems. The Bank and its management team received several accolades from largely as a result of: in a Food and Agriculture Organisaton (FAO) Rural Finance Project, We are extremely honoured to various bodies during the fnancial year under review, recognising A 125% increase in Non-Funded Income as a result of a surge aimed at providing afordable fnancial services to rural households, have become a bank of choice our commitment to providing outstanding service across all our in transactonal volumes on our electronic platorms following improving agricultural productvity, increasing incomes, improving for many Zimbabweans and look platorms and services. Some of the notable awards included: a system upgrade performed in June 2017 to increase capacity. food and nutriton security and reducing poverty in rural Zimbabwe. forward to welcoming those who Bank of the ear – Zimbabwe Investment Authority (ZIA) Transactonal banking remains the Bank’s core focus and Through this program approximately 100,000 new customers signed 2018 are yet to join us to the purple Bank of the ear (Innovaton Award) – Megafest ensuring that our customers complete transactons in real tme up on the Bank’s signature low KC account, the iSave account, family. Our customers appreciate Best Print Advert of the ear – Marketers Associaton of anytme and anywhere is one of our key objectves. with 60% simultaneously registered on Kambudzi Banking and 30% the convenience we provide. Zimbabwe (MAZ) An 87% growth in interest income supported by mortgage loan registered on mobile insurance, through our group partner, EcoSure. Website of the ear Winner – Marketers Associaton of disbursements, increased actvity on the interbank market and A total of $2 million was also disbursed to small holder farmers as As a result of more customers Zimbabwe (MAZ) investments in Held-to-Maturity Assets a result of the growth in part of the USAID Create Fund Program. US $’000 entrustng us with their business, Bank of the ear Runner Up – Marketers Associaton of our balance sheet within the fnancial year under reportng. Zimbabwe (MAZ) 460,710 our total assets grew 104% from Heartelt Thank ou $226.1 million in the previous year Outstanding Banking and Finance Leader of the ear - Steward Operatng expenses grew in line with business growth, a result of We are extremely honoured to receive the custom of hundreds of to $460.7 million in the year under Bank CEO - Megafest a signifcant investments in our digital Zimbabweans who have selected us as their Bank of Choice. As part review. Total deposits grew 141% These awards underline our commitment to providing extraordinary transformaton to accommodate our COST TO INCOME RATIO of our customer centric mind-set, our goal is contnuous innovaton, from $144.6 million to $348.2 service that meets the real needs of our customers. I would like to growing customer base and improve ofering digital fnancially inclusive services aimed at addressing the million as confdence in the Bank dedicate the awards to customers for their loyalty to our brand. on customer experience. The Bank’s diferent obstacles faced by our customers. We believe in ofering contnued to grow. The increase in Cost to Income Rato decreased simplifed banking solutons that are easily understood by our Growth 104% our deposits validates our business Grattude signifcantly from 62% in 2017 to customers and can be accessed by anyone when and where it suits model which is customer centric We greatly appreciate the support we contnue to receive from our 49% for the year under review, whilst them. and adapted to provide unparalleled customers who have honoured us with their business. We remain Return on Equity increased to 26% up 62% convenience to our customers. Net operatng income increased a bank for the people, frmly rooted in our commitment and ethos from 9% in the previous year due to I would like to extend my heartelt thanks to the Steward Bank team by 133% from $30.1 million to $70.3 million. As a result, the Bank - “Everyday Banking for Everyday People”. I would like to express the increase in revenue in the fnancial that I am honoured to lead. Innovaton is a culture at Steward Bank recorded a Proft Before Tax of $32.7million, up from $8.4million my extreme grattude to the shareholder for entrustng us with the year ended 28 February 2018 and and I have the privilege of being a part of a highly motvated team reported in prior fnancial year. vision to develop innovatve, fnancially inclusive products. I would increased efciency in service delivery. 2017 also like to thank my fellow Board Members for their guidance during that believe in making a diference through relentless innovaton The Bank’s Prudental Liquidity which is a part of the Econet Group’s DNA. Our commitment as The Bank experienced an unprecedented surge in the volume a period of exceptonal growth. Our most important asset remains Rato of 70% was above the RBZ’s the Stewards, whose commitment and hard work and exceptonal your Stewards in the coming year is to distnguish ourselves in how of transactons processed which required us to respond with a minimum requirement of 30%. The we serve our customers through our values of Hunhu, Excellence, signifcant investment to upgrade our technology platorms and sacrifce to support the business under challenging conditons 141% growth in the Bank’s customer has been the major diferentator. Lastly, I would like to thank the 49% Professionalism, Integrity and Innovaton, which we have coined systems. Following this investment in our technology platorms deposits during the period triggered the H.E.P.I.I Customer Campaign. We are honoured to be part of and upskilling of our Informaton and Communicatons Technology Regulator for the support and accommodaton of our constant requests on innovaton for the beneft of our customers. an increase in investments on Gross the Econet family, which includes the Cassava Fintech unit whose (ICT) unit, the Bank has experienced relatve stability on our system Interest Earning Assets during the presence across several African countries provides us with valuable afer the instability we encountered earlier in the fnancial year. 2018 Dividend period resultng in a 162% growth from strategic insights into a wider African market. Lastly, I would also like However, we contnue to make signifcant investments in our systems prior year. Proportonally, the Bank’s to thank the Steward Bank Board for steering us through a period of proportonate to the growth we are experiencing to increase our The Board does not recommend the declaraton of a dividend for the year ended 28 February 2018. Loan to Deposit Rato declined by 29 percentage points due to the unprecedented growth and the Reserve Bank of Zimbabwe for their absorptve capacity. growth in customer deposits against a decline in loans and advances. guidance and support. On behalf of the Board Keeping Abreast of a Challenging Economic Environment Putng Our Customers First The Zimbabwean economy sufered recurrent economic challenges, Bernard T.R. Chidero We are proud to be a part of every community we serve in and Dr Lance Shingai Mambondiani characterised by Balance of Payment defcits and nostro shortages, developing lastng relatonships with our customers. The Bank increased country risk, deterioratng asset quality and countrywide Board Chairman Chief Executve Ofcer 24 May 2018 contnues to launch revolutonary products and services. In the 24 May 2018

Directors: B.T.R. Chidzero (Chairman), T. Mpofu (Mrs.), J.H. Gould, K.V. Chirairo, K. Akosah-Bempah, N.N. Chadehumbe (Dr.), C. Maswi, P.M. Mbizvo (Dr.), J. Mungoshi, L.S. Mambondiani (Dr.)*, A. Chaavure*. * Executive. Registered Ofﬁce: 101 Union Avenue Building, 101 Kwame Nkrumah Avenue, Harare. www.stewardbank.co.zw AUDITED ABRIDGED FINANCIAL STATEMENTS for the year ended 28 February 2018 1765/ PAGE 2 - STEWARD BANK 2 - STEWARD 1765/ PAGE

CORPORATE GOVERNANCE STATEMENT the discharge of its dutes relatng to corporate accountability and associated risks in terms of STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME management, assurance and reportng. For the year ended 28 February 2018 The Board of Directors recognises the importance of good corporate governance and is commited to conductng the business of the Bank with integrity and in accordance with Board Assets and Liabilites Commitee 28 February 28 February accepted corporate practces through a comprehensive governance framework, in order to The Commitee is responsible for formulatng policies and procedures relatng to control of 2018 2017 safeguard stakeholders’ interests. The Board regularly reviews its structures and policies to cash fow, control of short-term borrowing capacity, management of liquid assets portolio, Notes US$ US$ ensure contnued adherence to the governing instruments and best practce to ensure its monitoring and managing structural exposures to changes in foreign exchange rates. The operatons remain compliant. Commitee also reviews the Bank’s balance sheet and recommends the optmal asset and Interest and related income 3 13,538,790 7,673,207 liability mix to be carried by the Bank. Interest and related expense 4 (242,223) (558,647) The Board is commited to the creaton and sustenance of shareholder value and is accountable to its shareholder as well as to all other stakeholders including the Bank’s employees, customers, Board Credit Commitee Net interest income 13,296,567 7,114,560 suppliers, regulatory authorites and the community from which it operates. The Board Credit Commitee oversees the Bank’s operatons relatng to credit risk. The Commitee is tasked with the overall review of the Bank’s lending policies, oversees the Non-interest income 5 63,065,080 27,995,521 As part of its commitment to inculcatng high ethical and professional standards, the Bank process of credit allocaton within the Bank and is also responsible for the approval of loans to subscribes to Deloite Zimbabwe’s Tip Ofs Anonymous. customers within its specifed limit. Impairment charge - Loans and advances 6 (6,027,568) (4,922,640) Compliance Board Remuneraton and Nominatons Commitee The Bank complied with the applicable laws and regulatons throughout the reportng period. - Loans and advances related to furniture The Board Remuneraton and Nominatons Commitee Commitee is responsible for establishing customers appropriate human resources strategies and policies for the Bank including remuneraton 8 (66,566) (80,745) The Bank’s Liquidity Rato stood at 70% as at 28 February 2018 against the minimum prescribed policies. It also has oversight of policies and practces that promote and support equal rato of 30%. opportunity and diversity. The Commitee has the responsibility of setng the remuneraton Net operatng income 70,267,513 30,106,696 terms for Senior Executves. The audited Financial Statements for the year ended 28 February 2018 were approved at a Operatng expenditure 7 (37,550,608) (21,695,550) meetng held on 24 May 2018. The Commitee also advises on and proposes to the Board, candidates for selecton and appointment of high quality and talented Directors who are able to meet the needs of the Bank Proft before tax 32,716,905 8,411,146 Board Responsibilites presently and in the future, and the ongoing evaluaton and review of the performance and The role of the Board includes inter alia, the approval and adopton of the strategic and annual efectveness of the Board and the Directors. Income tax expense 9 (10,262,657) (2,256,050) business plans, setng of objectves, review of key risks and performance areas, review of management’s performance against set criteria and objectves and determining the overall Board Informaton Technology Commitee Proft for the year 22,454,248 6,155,096 policies and processes to ensure the integrity of the insttuton’s risks and internal control The Board Informaton Technology Commitee formulates policies relatng to informaton management. technology strategic initatves. It monitors and reviews implementaton of the informaton Other comprehensive income technology projects, funding allocaton and performance reportng. The Commitee also Director Inducton and Capacity Development recommends Standards and Guidelines for informaton technology infrastructure procurement Other comprehensive income not to be The Board has in place a comprehensive inducton plan for on-boarding new Directors and and maintenance. reclassifed to proft or loss in subsequent contnued training on relevant topics. As part of the inducton programme, the Company periods: Secretary provides access to informaton in areas such as operatons, fnance, treasury and risk Board Performance Review Commitee Gain arising on revaluaton of property and management to assist the new Board member as required. This is a special sub Commitee of the Main Board which meets quarterly to oversee and equipment, net of tax 22,049 - monitor the Bank’s performance against the budget and recommends correctve acton as The Board partcipated in training workshops on Basel II, IFRS 9 - Financial Instruments, necessary. Total comprehensive income for the year 22,476,297 6,155,096 Financial and Risk Oversight and the Audit Commitee Forum. BOARD ATTENDANCE STATEMENT OF FINANCIAL POSITION Confict of interest As at 28 February 2018, the Main Board and Board Commitees held meetngs and the record As at 28 February 2018 The Board has in place a policy that manages confict of interest including situatonal and of atendance of each Director is as follows. 28 February 28 February transactonal confict. Directors disclose their interests on joining the Board and at every 2018 2017 meetng of the Directors they disclose any additonal interests and confrm or update their Main Board declaratons of interest accordingly. Notes US$ US$ Total Meetngs Total Meetng Board and Director Evaluaton Process Name of Director Designaton Held Atended ASSETS The insttuton carries out an annual Board of Director Evaluaton process as required by Independent Non-Executve the Reserve Bank of Zimbabwe Guidelines No. 01-2004/BSD Corporate Governance. The Bernard T.R. Chidzero* Chairman 4 4 Cash and cash equivalents 10 116,073,355 63,954,579 performance of the Board and Individual Directors in the previous year is assessed by the Board. Tracy Mpofu Non-Executve Director 4 3 Financial assets at fair value through proft or loss 11 852,284 173,607 Peter M. Mbizvo Non-Executve Director 4 4 Loans and advances to customers 12 32,824,221 52,586,744 Weaknesses and areas of concern identfed through this process and discussed in the Board Christopher Maswi Non-Executve Director 4 4 Loans and advances relatng to furniture meetngs with a view to mitgate and rectfy identfed weaknesses. The Board and Director Jonah Mungoshi Non-Executve Director 4 4 evaluatons for the year ended 28 February 2018 were duly and tmeously conducted. customers 13 - 994,336 Kwaku Akosah-Bempah Non-Executve Director 4 4 Financial assets held-to-maturity 14 250,276,433 54,505,121 John H. Gould Non-Executve Director 4 4 Board Compositon Other receivables 15 36,753,817 27,355,423 Nancy N. Chadehumbe Non-Executve Director 4 4 Non-current assets held for sale 16 130,000 - The Board is comprised of eleven Directors, nine non-Executve directors and two Executve Krison V. Chirairo Non-Executve Director 4 4 Directors i.e. the Chief Executve Ofcer and the Chief Finance Ofcer. The Board is led by an Investment property 17 5,437,400 5,437,400 independent, non- Executve Chairman. Lance Mambondiani Executve Director 4 4 Property and equipment 18 11,656,981 6,346,943 Alfred Chaavure Executve Director 4 4 Intangible assets 19 6,639,839 6,064,152 The Board considers that its membership should refect an appropriate balance between * Chairman Deferred tax asset 27 65,879 8,640,135 executves possessing extensive direct experience and expertse in the core business actvites Board Audit Commitee of the Bank and non-executve members who bring to the Board a broad range of general Total assets 460,710,209 226,058,440 commercial expertse and experience. The objectve is that the Board should be of a size and Total Meetngs Total Meetng compositon that is conducive to efectve decision making with the beneft of a variety of Name of Director Designaton Held Atended EQUITY AND LIABILITIES perspectves and skills. Kwaku Akosah-Bempah* Non-Executve Chairman 4 4 Christopher Maswi Non-Executve Director 4 4 EQUITY The Board considers that a diversity of skills, backgrounds, knowledge, experience, expertse and Nancy Chadehumbe Non-Executve Director 4 4 gender is required in order to efectvely govern the business. The Board and the Remuneratons * Chairman Share capital 20 4,077 4,077 and Nominatons Commitee work together to ensure that the Board contnues to have the Share premium 20 106,317,629 106,317,629 appropriate balance of skills, experience, independence and depth of working knowledge of Board Risk, Compliance And Capital Management Commitee Other reserves 21 3,410,732 3,899,036 the Bank’s business necessary to properly and efectvely discharge its responsibilites. Total Meetngs Total Meetng Accumulated loss (12,719,910) (35,174,158) Name of Director Designaton Held Atended During the fnancial year ended 28 February 2018, the Bank expanded its strategy and Nancy Chadehumbe* Non-Executve Director 4 4 Total equity 97,012,528 75,046,584 developed a strong focus on the ways in which digital technology and associated data can be Tracy Mpofu Non-Executve Director 4 3 utlised in its business. The Chief Technology Ofcer provides guidance and assists the Board on Krison Chirairo Non-Executve Director 4 4 LIABILITIES both strategy and implementaton in this emerging area. Peter Mbizvo Non-Executve Director 4 4 Deposits due to banks and customers 22 348,164,949 144,632,181 * Chairperson Board Commitees Loans and borrowings 23 1,771,125 280,000 The Board has established and delegated specifc roles and responsibilites to standing Board Assets and Liabilites Commitee Provisions 25 1,389,741 256,983 Other liabilites 26 12,371,866 5,842,692 Commitees, to assist it in discharging its mandate. The Commitees meet quarterly or as Total Meetngs Total Meetng necessary. Members of the Executve Commitee and other management atend meetngs of Name of Director Designaton Held Atended the various commitees by invitaton. Each Commitee acts within writen terms of reference Christopher Maswi* Non-Executve Director 4 4 Total liabilites 363,697,681 151,011,856 approved by the Board and reviewed annually or as necessary. Tracy Mpofu Non-Executve Director 4 4 Total equity and liabilites 460,710,209 226,058,440 Each Commitee has unrestricted access to executve management, all employees and Kwaku Akosah-Bempah Non-Executve Director 4 4 all Company records, tax and other fnancial advisers, legal advisers, and internal and external Peter Mbizvo Non-Executve Director 4 4 auditors, as required. * Chairman Board Credit Commitee The Chair of each Commitee (or a person nominated by the Chair of the Commitee for that purpose) reports to the Board at the Board’s next meetng on any maters relevant to the Total Meetngs Total Meetng Commitee’s dutes and responsibilites. Name of Director Designaton Held Atended Jonah Mungoshi* Non-Executve Director 4 4 The Bank’s Board Commitees were properly consttuted as at 28 February 2018. Krison Chirairo Non-Executve Director 4 4 Bernard Chidzero Non-Executve Director 4 3 Board Audit Commitee John Gould Non-Executve Director 4 4 All members of the Board Audit Commitee are independent, non-Executve Directors with * Chairman relevant fnancial and / or accountng experience and signifcant understanding of the Bank’s business. Board Remuneraton and Nominatons Commitee Total Meetngs Total Meetng The role of the Commitee is to provide an independent evaluaton of adequacy and efciency Name of Director Designaton Held Atended of the insttuton’s internal control systems, accountng practces, informaton systems and Peter M Mbizvo* Non-Executve Director 4 4 auditng processes. John Gould Non-Executve Director 4 4 Jonah Mungoshi Non-Executve Director 4 4 The Commitee meets with external auditors, without management being present, at least Bernard Chidzero Non-Executve Director 4 3 twice a year (and more frequently if required) to review the adequacy of existng external audit * Chairman arrangements and the scope of the external audit. Board Informaton Technology Commitee The Head of Internal Audit atends all meetngs of the Audit Commitee and reports on a regular Total Meetngs Total Meetng basis as to the adequacy and efectveness of the internal audit functon. The Commitee meets Name of Director Designaton Held Atended with the internal auditor at least twice a year, without management being present. Jonah Mungoshi* Non-Executve Director 4 4 The Audit Commitee reports to the Board afer each Commitee meetng on any mater Nancy Chadehumbe Non-Executve Director 4 4 relevant to its consideratons. John Gould Non-Executve Director 4 4 Bernard Chidzero Non-Executve Director 4 4 Board Risk, Compliance and Capital Management Commitee * Chairman The Board Risk, Compliance and Capital Management Commitee’s task is to ensure the quality, integrity and reliability of the Bank’s risk and compliance management. The Commitee focuses on the efectveness and appropriateness of the enterprise risk management framework, AUDITOR’S STATEMENT including but not limited to risk strategy, risk tolerance and risk governance. The Commitee has oversight on capital management and the overall compliance planning and management These fnancial results should be read in conjuncton with the complete set of fnancial framework. The Commitee also reviews the Bank’s risk exposures as it relates to capital, statements for the year ended 28 February 2018, which have been audited by Deloite & earnings and market consistent value at risk. Touche and an unmodifed audit opinion issued thereon. The auditor’s report on the fnancial results is available at the Bank’s registered ofce. The Commitee reviews and asses the integrity of the Bank’s risk control systems and ensures that risk policies and strategies are efectvely managed. It assists the Board of Directors in Deloite & Touche Harare, Zimbabwe

STATEMENT OF CHANGES IN EQUITY NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (CONTINUED) NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (CONTINUED) For the year ended 28 February 2018 For the year ended 28 February 2018 For the year ended 28 February 2018 Share Share Other Accumulated 2.2 Signifcant Accountng Judgements, Estmates and Assumptons capital premium reserves loss Total 28 February 28 February US$ US$ US$ US$ US$ The accountng policies applied in the preparaton of the audited fnancial statements are 2018 2017 consistent with those of the annual fnancial statements for the year ended 28 February US$ US$ 2018 Balance as at 29 February 2016 4,077 106,317,629 4,949,664 (42,379,882) 68,891,488 28 February 28 February 2018 2017 9 INCOME TAX EXPENSE Total comprehensive income - 6,155,096 6,155,096 US$ US$ Proft for the year - - - 6,155,096 6,155,096 9.1 Income tax reconciliaton Other comprehensive income - - - - - 3 INTEREST AND RELATED INCOME Accountng proft before income tax 32,716,905 8,411,146 Impairment allowance for loans and advances - - (1,050,628) 1,050,628 - Loans and advances to customers 6,263,555 4,237,173 Loans and advances relatng to furniture Taxaton at normal rate of 25.75% 8,424,603 2,165,870 Balance as at 28 February 2017 4,077 106,317,629 3,899,036 (35,174,158) 75,046,584 customers 10,685 1,823 Financial assets held-to-maturity 7,241,921 3,236,979 Originaton and reversal of temporary Total comprehensive income - - 22,049 22,454,248 22,476,297 Other 22,629 197,232 diferences 1,008,469 - Proft for the year - - - 22,454,248 22,454,248 Efect of non-deductble expenses: Other comprehensive income - - 22,049 - 22,049 13,538,790 7,673,207 - Donatons and entertainment expenses 53,510 23,507 Restatement of Other Reserves - - (510,353) - (510,353) 4 INTEREST AND RELATED EXPENSE - Other non deductble expenses 776,075 66,673 due to prior period Basel II 10,262,657 2,256,050 Balance as at 28 February 2018 4,077 106,317,629 3,410,732 (12,719,910) 97,012,528 Trading actvites 242,223 558,647 10 CASH AND CASH EQUIVALENTS STATEMENT OF CASH FLOWS 5 NON-INTEREST INCOME For the year ended 28 February 2018 10.1 Cash and balances with central banks 28 February 28 February 2018 2017 5.1 Fees and commission income US$ US$ Balances with the Reserve Bank of Zimbabwe 110,191,323 58,362,228 Net dealing gains 1,692,641 742,462 Balances with other banks 4,038,231 1,537,352 Cash balances 1,843,801 4,054,999 CASH FLOWS FROM OPERATING ACTIVITIES Net commissions 59,183,004 24,496,930 116,073,355 63,954,579 60,875,645 25,239,392 Proft before tax 32,716,905 8,411,146 5.2 Other 11 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Adjustments for: Fair value adjustment on fnancial instruments 678,677 (106,148) Fair value adjustment on investment property - 789,494 Listed equites: Change in operatng assets (191,017,334) (23,218,485) Sundry income 96,683 511,321 Opening balance 173,607 279,755 Change in operatng liabilites 209,506,298 54,495,659 Bad debts recovered 1,414,075 1,561,462 Other non-cash items 7,848,708 6,312,766 Net fair value gain/(loss) 678,677 (106,148) 2,189,435 2,756,129 Closing balance 852,284 173,607 Net cash generated from operatons 59,054,577 46,001,086 63,065,080 27,995,521 12 LOANS AND ADVANCES TO CUSTOMERS Taxaton paid - - 6 IMPAIRMENT ON LOANS AND ADVANCES 12.1 Total loans and advances Net cash infow from operatng actvites 59,054,577 46,001,086 Corporate loans 9,756,752 35,348,819 Small-to-Medium Enterprise loans 1,022,151 1,183,149 Allowance for credit losses charge 6,027,568 4,922,640 CASH FLOWS FROM INVESTING ACTIVITIES Consumer loans 27,605,264 20,470,407 38,384,167 57,002,375 7 OPERATING EXPENDITURE Purchase of property and equipment (7,553,378) (2,803,368) Less: Allowance for impairment losses (note 12.4) (3,797,839) (3,060,309) Purchase of intangible assets (873,550) (511,286) Less: Suspended interest (1,762,107) (1,355,322) Administraton expenses 18,454,677 8,924,471 32,824,221 52,586,744 Net cash outlow from investng actvites (8,426,928) (3,314,654) Amortsaton of intangible assets 476,526 357,996 Audit fees 120,752 147,775 12.2 Maturity analysis CASH FLOWS FROM FINANCING ACTIVITIES Depreciaton of property and equipment 2,094,372 1,231,997 Less than one month 8,085,904 11,305,000 Impairment of property and equipment - 250,064 Net increase/ (repayment) of loans and borrowings 1,491,127 (3,285,305) 1 to 3 months 549,990 1,437,734 Directors' remuneraton 141,748 127,278 3 to 6 months 258,074 914,256 - short-term benefts 141,748 127,278 Net cash infow/ (outlow) from fnancing actvites 1,491,127 (3,285,305) 6 months to 1 year 132,531 1,754,562 - other emoluments - - 1 to 5 years 11,234,605 39,918,179 Net increase in cash and cash equivalents 52,118,776 39,401,127 Loss on revaluaton of property - 152,670 Over 5 years 18,123,063 1,672,644 Occupancy expenses 1,543,386 1,176,708 Cash and cash equivalents at the beginning of the year 63,954,579 24,553,452 Professional expenses 2,892,361 1,663,227 Gross loans and advances 38,384,167 57,002,375 Staf costs 11,826,786 7,663,364 Cash and cash equivalents at the end of the year 116,073,355 63,954,579 - short term benefts 11,178,687 7,404,126 12.3 Sectorial analysis of utlisatons NOTES TO THE ABRIDGED FINANCIAL STATEMENTS - post - employment benefts 648,099 259,238 28 February 2018 28 February 2017 For the year ended 28 February 2018 US$ % US$ % 1 GENERAL INFORMATION 37,550,608 21,695,550 Steward Bank Limited (“the Bank”) was incorporated according to the laws of Zimbabwe Mining 25 0.0% 10,907 0.0% on 9 October 1970 and was registered as a commercial bank in March 2008. Its registered 8 LOANS AND ADVANCES RELATING TO FURNITURE Manufacturing 3,874,785 10.1% 23,109,867 40.5% ofce and principal place of business is 101 Union Avenue Building, 101 Kwame Nkrumah CUSTOMERS Agriculture 804,018 2.1% 1,317,531 2.3% Avenue, Harare. The Bank’s ultmate holding company is Econet Wireless Zimbabwe Distributon 1,697,065 4.4% 1,299,045 2.3% Limited. Interest income 10,685 1,823 Services and communicaton 7,058,800 18.4% 13,252,482 23.3% The principal business of the Bank is to provide retail and corporate banking services in Individuals 24,949,474 65.0% 18,012,543 31.6% the key economic centres of Zimbabwe Impairment charge on loans and advances (66,566) (80,745) 38,384,167 100% 57,002,375 100.0% Currency of Account Recovery of previously writen-of loans 1,295,357 1,416,870 These fnancial results are presented in United States dollars (“US$”) being the functonal Operatng proft relatng to furniture loans 1,239,476 1,337,948 28 February 28 February and reportng currency of the primary economic environment in which the Bank operates. 2018 2017 US$ US$ 2 BASIS OF PREPARATION 9 INCOME TAX EXPENSE 12.4 Allowance for impairment on loans and 2.1 Statement of compliance The components of income tax expense are as advances The Bank’s audited fnancial statements have been prepared in accordance with follows: Internatonal Financial Reportng Standards, (“IFRS”) and in a manner required by the Zimbabwe Companies Act ( Chapter 24:03), the relevant statutory instruments (“SI”) SI Current tax expense 1,687,953 - Opening balance 3,060,309 2,285,276 62/96 and SI 33/99 and the Zimbabwe Banking Act (Chapter 24:20). Deferred tax expense 8,574,704 2,256,050 Total income tax expense 10,262,657 2,256,050 Net charge for the period 6,027,568 4,922,640 These fnancial statements have been prepared under the supervision of A. Chaavure Loans and advances writen of (5,290,038) (4,147,607) (Associate Member of the Chartered Insttute of Management Accountants), Chief Finance Ofcer of Steward Bank Limited. Closing balance 3,797,839 3,060,309

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17 INVESTMENT PROPERTY 28 February 28 February 20 SHARE CAPITAL AND SHARE PREMIUM 2018 2017 Descripton of valuaton techniques used and key inputs to valuaton on investment Share capital: US$ US$ propertes: 28 February 28 February Valuaton Signifcant Range (weighted 2018 2017 2018 2017 13 LOANS AND ADVANCES RELATING TO technique observable inputs average) No. of Shares No. of Shares US$ US$ FURNITURE CUSTOMERS Implicit investment approach Comparable rentals Authorised Gross furniture loans 40,195 1,075,081 Ofce propertes (Refer below) per month per sqm $5 - $9 Residual method Net land for Ordinary shares of Allowance for credit losses (40,195) (80,745) Residental stands (Refer below) disposal 321,011 sq.m $0.0000001 each 70,000,000,000 70,000,000,000 7,000 7,000 10% Irredeemable Implicit investment approach non-cumulatve Net loans and advances relatng to furniture preference shares customers - 994,336 In arriving at the market value for property, the implicit investment approach was applied based on the capitalisaton of income. This method is based on the principle of US$1 each 10,000 10,000 10,000 10,000 that rentals and capital values are inter-related, hence, given the income produced 17,000 17,000 Reconciliaton of loans and advances relatng to by a property, its capital value can be estmated. Comparable rentals inferred from furniture customers: propertes within the locality of the property based on use, locaton, size and quality Issued Opening balance 994,336 1,622,598 of fnishes were used. The rentals were then adjusted per square meter to the letable areas, being rentals achieved for comparable propertes as at 28 February 2018. The Ordinary shares of Gross furniture loans 1,075,081 1,622,598 rentals are then annualised and a capitalisaton factor is applied to arrive at market $0.0000001 each 471,707,887 471,707,887 47 47 Allowance for credit losses (80,745) - value of the property, also inferring on comparable premises which are in the same 10% Irredeemable category as regards the building elements. non-cumulatve preference shares of US$1 each 4,030 4,030 4,030 4,030 Collectons/recoveries (1,034,886) (547,517) Residual approach In assessing the market value of the residental stands, the Residual Method was ap- 4,077 4,077 Impairment charge for the year (66,566) (80,745) plied. This method of valuaton is used to estmate the amount that is worth paying Subject to the provisions of secton 183 of the Companies Act (Chapter 24:03), the Write-of of loans and advances - - for land, or buildings, that is to be developed or redeveloped. The applicaton of the residual method of valuaton is based on the principle that the price to be paid for a unissued shares are under the control of the directors. Utlisaton of provisions 107,116 - property that is suitable for development is equal to the diference between (i) the Movements in share capital and share premium: computed value of the highest and best form of permited development and (ii) the total cost of carrying out that development. No. of Closing balance - 994,336 No. of prefer- Share Share Gross furniture loans 40,195 1,075,081 18 PROPERTY AND EQUIPMENT ordinary ence Capital premium Total shares shares US$ US$ US$ Allowance for credit losses (40,195) (80,745) Land and Leasehold Furniture Ofce Computer Motor Work in Total Buildings Improvements and Fitngs Equipment Equipment Vehicles Progress 29 February 14 FINANCIAL ASSETS HELD-TO-MATURITY US$ US$ US$ US$ US$ US$ US$ US$ 2016 471,707,887 4,030 4,077 106,317,629 106,321,706

At Cost or Reserve Bank of Zimbabwe Bonds and 28 February Valuaton: 2017 471,707,887 4,030 4,077 106,317,629 106,321,706 Treasury Bills: 29 February 2016 1,238,814 1,876,603 2,998,282 1,775,420 4,184,612 452,612 196,372 12,722,715 Additons 145,366 98,997 219,305 190,321 2,011,631 137,748 - 2,803,368 28 February Opening Balance 54,505,121 45,834,053 2018 471,707,887 4,030 4,077 106,317,629 106,321,706 Transfer from Additons 242,271,870 45,721,496 Work-in- Repayments received on maturity (49,793,963) (38,456,665) Progress ------311,485 311,485 21 OTHER RESERVES Revaluaton (184,180) ------(184,180) Accrued interest 3,293,405 1,406,237 28 February Revaluaton Regulatory Closing balance 250,276,433 54,505,121 2017 1,200,000 1,975,600 3,217,587 1,965,741 6,196,243 590,360 507,857 15,653,388 surplus reserve Total US$ US$ US$ 15 OTHER RECEIVABLES Additons - - 737,525 - 6,302,716 55,892 457,244 7,553,377 29 February 2016 - 4,949,664 4,949,664 Transfers from Work-in- Impairment allowance for loans and advances - (1,050,628) (1,050,628) Sundry receivables 22,911,426 23,984,959 Progress - - 114,521 - - 102,787 (395,971) (178,663) 28 February 28 February 2017 - 3,899,036 3,899,036 Amounts due from related partes 13,842,391 3,370,464 2018 1,200,000 1,975,600 4,069,633 1,965,741 12,498,959 749,039 569,130 23,028,102 Gain arising on revaluaton of property and equipment, net of tax 22,049 - 22,049 Closing balance 36,753,817 27,355,423 Accumulated Restatement of Other Reserves due to depreciaton prior period Basel II excess over IAS 39 and specifc provision - (510,353) (510,353) 16 NON-CURRENT ASSETS HELD FOR SALE impairment: 28 February 2018 22,049 3,388,683 3,410,732 29 February In January 2018, Management commited to a plan to sell vehicles that were Revaluaton surplus 2016 1,814 563,501 2,458,726 1,487,029 2,925,055 419,769 - 7,855,894 This reserve represents the surplus arising from the revaluaton of owner occupied recovered from a foreclosed loan facility. Accordingly, those vehicles are presented Depreciaton property. as non-current assets held for sale. Eforts to sell the vehicles have commenced and charge for the year 29,696 340,976 85,865 107,248 640,483 27,729 - 1,231,997 a sale is expected by June 2018. No impairment losses have been identfed on the Regulatory reserve Eliminated on This reserve caters for excess credit loss provisions that result from calculaton of non-current assets held for sale. revaluaton (31,510) ------(31,510) impairments on loans and receivables according to the expected credit loss model as Impairment - - - - 250,064 - - 250,064 required per Reserve Bank of Zimbabwe regulatons. The non-recurring fair value measurement of the assets has been categorised as a 28 February 2017 - 904,477 2,544,591 1,594,277 3,815,602 447,498 - 9,306,445 Level 2 fair value based on inputs to the valuaton technique. Depreciaton 22 DEPOSITS DUE TO BANKS AND CUSTOMERS charge for the year 29,696 427,503 151,557 149,532 1,296,681 39,403 - 2,094,372 28 February 28 February Valuaton technique Signifcant unobservable inputs 2018 2017 Eliminated on US$ US$ The fair value has been determined based Not applicable revaluaton (29,696) ------(29,696) on valuatons performed by an accredited 28 February independent valuer, as at 28 February 2018. 2018 - 1,331,980 2,696,148 1,743,809 5,112,283 486,901 - 11,371,121 Due to customers The professional independent valuer considered Current accounts 342,086,309 139,652,729 the open market value of the vehicles based on Net carrying Term deposits 6,078,640 4,979,452 the current mileage, engine capacity, year of amount: 348,164,949 144,632,181 At 28 manufacture and comparable market evidence for February At 28 February 2018, approximately $190.5 million or 54.5% of the Bank’s deposits due similar vehicles. 2018 1,200,000 643,620 1,373,485 221,932 7,386,676 262,138 569,130 11,656,981 to customers (At 28 February 2017: $68.0 million or 47.0%) represents balances owed At 28 to a related party entty in the telecommunicatons sector. February 28 February 28 February 2017 1,200,000 1,071,123 672,996 371,464 2,380,641 142,862 507,857 6,346,943 A concentraton of risk therefore exists in the event that the business of the counterparty 2018 2017 is adversely afected by changes in economic or other conditons. However, at 28 US$ US$ February 2018 the Bank’s management was not aware of any economic or other 19 INTANGIBLE ASSETS conditons that may adversely afect the business of the counterparty. 17 INVESTMENT PROPERTY Current Computer work in 22.1 Maturity analysis of deposits sofware progress Total US$ US$ US$ 28 February 28 February Opening balance 5,437,400 4,647,906 2018 2017 Fair value adjustments (Note 5.2) - 789,494 Cost: US$ US$ Less than one month 347,380,178 144,515,968 Closing balance 5,437,400 5,437,400 29 February 2016 8,304,317 1,417,142 9,721,459 1 to 3 months 784,771 116,213 Additons 404,774 106,512 511,286 348,164,949 144,632,181 Investment property comprises of buildings and undeveloped residental land. Transfer from Work in Progress - (311,485) (311,485) 28 February 2017 8,709,091 1,212,169 9,921,260 22.2 Sectorial analysis of deposits Additons 647,437 226,113 873,550 Investment property is stated at fair value, which has been determined based on 28 February 2018 28 February 2017 valuatons performed by an accredited independent valuer, as at 28 February 2018. Transfer from Work in Progress 187,532 (8,869) 178,663 28 February 2018 9,544,060 1,429,413 10,973,473 US$ % US$ % The professional independent valuer considered comparable market evidence based on lease and purchase transactons of similar buildings and residental stands. There Accumulated amortsaton and Financial 15,165,861 4.4% 21,183,141 14.6% impairment: Transport and was no rental income received during the period on Investment Property. telecommunicatons 236,321,183 67.9% 68,040,300 47.0% 29 February 2016 3,483,102 16,010 3,499,112 Mining 542,269 0.2% 15,021 0.0% Amortsaton charge for the year 357,996 - 357,996 Reconciliaton of fair value Manufacturing 8,407,777 2.4% 2,006,779 1.4% 28 February 2017 3,841,098 16,010 3,857,108 Investment propertes Amortsaton charge for the year 476,526 - 476,526 Agriculture 820,820 0.2% 435,719 0.3% Ofce Residental 28 February 2018 4,317,624 16,010 4,333,634 Distributon 3,338,266 1.0% 1,848,837 1.3% propertes stands Services 13,588,773 3.9% 15,366,565 10.6% US$ US$ Net carrying amount: At 28 February 2018 5,226,436 1,413,403 6,639,839 Government and parastatals 2,085,295 0.6% 898,447 0.6% At 28 February 2017 4,867,993 1,196,159 6,064,152 Individuals 63,272,696 18.1% 26,846,930 18.6% Opening Balance 800,000 4,637,400 Other 4,622,009 1.3% 7,990,442 5.6% Closing Balance 800,000 4,637,400 Intangible assets pertain to computer sofware. The Bank uses the expected usage of the asset to determine the useful life of intangible assets. 348,164,949 100% 144,632,181 100%

NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (CONTINUED) NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (CONTINUED) NOTES TO THE ABRIDGED FINANCIAL STATEMENTS (CONTINUED) For the year ended 28 February 2018 For the year ended 28 February 2018 For the year ended 28 February 2018 24 FAIR VALUE MEASUREMENT (CONTINUED) 23 LOANS AND BORROWINGS 29 RISK MANAGEMENT (CONTINUED) 28 February 2018 28 February 2017 28 February 28 February 29.1 Credit Risk 2018 2017 Carrying Fair Carrying Fair US$ US$ amount value amount value Credit risk is the risk that the Bank will incur a loss because its customers or counterpartes US$ US$ US$ US$ fail to discharge their contractual obligatons. The Bank manages and controls credit risk Lines of credit 1,771,125 280,000 Financial assets by setng limits on the amount of risk it is willing to accept for individual counterpartes and for geographical and industry concentratons, and by monitoring exposures in 1,771,125 280,000 Cash and cash equivalents 116,073,355 116,073,355 63,954,579 63,954,579 relaton to such limits. Financial assets at fair value through proft or loss 852,284 852,284 173,607 173,607 23.1 Maturity profle of loans and borrowings Loans and advances to The following tables analyse credit risk exposure to loans and advances in detail: 28 February 28 February customers 43,921,363 38,384,167 52,586,744 52,586,744 2018 2017 Neither past due nor impaired US$ US$ Loans and advances relatng to furniture loans - - 994,336 994,336 Grade B Past due Individu- Less than one month - - Grade A standard Grade C but not ally Financial assets held to maturity 250,276,433 250,276,433 54,505,121 54,505,121 high grade grade sub-standard impaired impaired Total 1 to 6 months - - US$ US$ US$ US$ US$ US$ Other receivables 36,753,817 36,753,817 27,355,423 27,355,423 6 months to 1 year 1,771,125 280,000 447,877,252 442,340,056 199,569,810 199,569,810 1 to 5 years - - At 28 February 2018: Individuals 15,231,101 1,594,344 5,699,466 492,228 1,932,335 24,949,474 1,771,125 280,000 Financial liabilites Deposits due to banks and Mining - - - - 25 25 customers 348,164,949 348,164,949 144,632,181 144,632,181 Manufacturing 2,179,026 - 313,133 - 1,382,626 3,874,785 24 FAIR VALUE MEASUREMENT Loans and borrowings 1,771,125 1,771,125 280,000 280,000 Agriculture 17,948 - 541,295 - 244,774 804,017 Other liabilites 12,371,866 12,371,866 5,842,692 5,842,692 The following table provides the fair value measurement hierarchy of the Bank’s assets Distributon 120,887 - 911,109 481,047 184,023 1,697,066 and liabilites. 362,307,940 362,307,940 150,754,873 150,754,873 Services 2,982,780 1,974,549 1,162,192 17,856 921,423 7,058,800 Quanttatve disclosures fair value measurement hierarchy for assets and liabilites as at 28 February 2018: 25 PROVISIONS 20,531,742 3,568,893 8,627,195 991,131 4,665,206 38,384,167 Fair value measurement using: Quoted 28 February 28 February 2018 2017 prices in Signifcant Signifcant At 28 February 2017: actve observable unobservable US$ US$ markets inputs inputs Individuals 9,437,281 - 3,566,929 3,048,679 1,959,655 18,012,543 Assets measured at fair Total (Level 1) (Level 2) (Level 3) value: Date of Valuaton US$ US$ US$ US$ Provisions 1,389,741 256,983 Mining 5,841 - 4,613 433 20 10,907 Investment propertes Manufacturing 76,096 - 11,975,570 9,213,468 1,844,733 23,109,867 (Note 17) Leave Pay and 28 February Agriculture - - 228,913 183,245 905,373 1,317,531 Residental stands 2018 4,637,400 - 4,637,400 - Provision for Demoliton costs Total Distributon 12,645 - 104,366 206,041 975,993 1,299,045 28 February US$ US$ Ofce buildings 2018 800,000 - 800,000 - Services 4,756,218 700,000 2,573,228 4,899,167 323,868 13,252,482 Total Investment property 5,437,400 - 5,437,400 - 14,288,081 700,000 18,453,619 17,551,033 6,009,642 57,002,375 Balance at 1 March 2017 256,983 256,983

Quoted equity shares Current provision 1,372,676 1,372,676 (Note 11) 29.2 Interest rate risk Telecommunicatons 28 February Amount utlised (239,918) (239,918) sector 2018 852,284 852,284 - - Interest rate risk arises from the possibility that changes in interest rates will afect Balance at 28 February 2018 1,389,741 1,389,741 future cash fows or the fair values of fnancial instruments. The Board has established There have been no transfers between Level 1 and Level 2 during the period. limits on the non–trading interest rate gaps for stpulated periods. The Bank’s policy Quanttatve disclosures fair value measurement hierarchy for assets and liabilites as 26 OTHER LIABILITIES at 28 February 2017: is to monitor positons on a daily basis and hedging strategies are used to ensure positons are maintained within the established limits. Fair value measurement using: 28 February 28 February Quoted 2018 2017 prices in Signifcant Signifcant US$ US$ actve observable unobservable The table below summaries the Bank’s interest rate risk exposure: markets inputs inputs Assets measured at fair Total (Level 1) (Level 2) (Level 3) TOTAL POSITION Non-inter- value: Date of Valuaton US$ US$ US$ US$ Sundry creditors and accruals 12,371,866 5,842,692 Up to 1 1 month to 3 months to est month 3 months 1 year 1 to 5 years bearing Total Investment propertes (Note 17) 27 DEFERRED TAX ASSET At 28 February 2018 US$ US$ US$ US$ US$ US$ 28 February Assets Residental stands 2017 4,637,400 - 4,637,400 - Accelerated Fair value Assessed Cash and cash 28 February wear and tear adjustments losses Other Total equivalents - - - - 116,073,355 116,073,355 Ofce buildings 2017 800,000 - 800,000 - Financial assets at fair Total Investment US$ US$ US$ US$ US$ value through proft property 5,437,400 - 5,437,400 - or loss - - - - 852,284 852,284 At 28 February Loans and advances to 8,085,904 549,991 390,605 23,797,721 - 32,824,221 customers Quoted equity shares 2017 534,294 666,418 (8,668,155) (1,172,692) (8,640,135) Charge/(Credit) Financial assets Telecommunicatons 28 February held-to-maturity 18,985,880 62,761,627 94,206,800 74,322,126 - 250,276,433 sector 2017 173,607 173,607 - - to proft for the year 922,077 8,523 8,668,155 (1,032,145) 8,566,610 Other receivables - - - - 36,753,817 36,753,817 Fair value hierarchy Charge Non-current assets The Bank uses the following hierarchy for determining and disclosing the fair value of recognised in held for sale 130,000 - 130,000 OCI for the year - 7,646 - - 7,646 fnancial instruments by valuaton technique; Investment property - - - - 5,437,400 5,437,400 Level 1: Quoted (unadjusted) prices in actve markets for identcal assets or liabilites. At 28 February 2018 1,456,371 682,587 - (2,204,837) (65,879) Property and Level 2: Other techniques for which all inputs which have a signifcant efect on the equipment - - - - 11,656,981 11,656,981 recorded fair value are observable, either directly or indirectly. Level 3: Techniques which use inputs which have a signifcant efect on the recorded fair Intangible assets - - - - 6,639,839 6,639,839 value that are not based on observable market data. 28 RELATED PARTY DISCLOSURES Deferred tax asset - - - - 65,879 65,879 28 February 28 February FAIR VALUES OF FINANCIAL INSTRUMENTS 27,201,784 63,311,618 94,597,405 98,119,847 177,479,555 460,710,209 The fair value of the fnancial assets and liabilites are included at the amount at which 2018 2017 the instrument could be exchanged in a current transacton between willing partes, other US$ US$ Liabilites and equity than in a forced or liquidaton sale. The following methods and assumptons were used to Deposits due to banks estmate the fair values: Compensaton of key management personnel and customers 347,380,178 784,771 - - - 348,164,949 - Cash and cash equivalents, loans and advances, deposits and other liabilites of the Bank: Loans and borrowings - - 1,771,125 - - 1,771,125 approximate their carrying amounts largely due to the short-term maturites of these instruments. Short-term benefts 1,571,626 1,356,945 Provisions - - - - 1,389,741 1,389,741 - Loans and advances excluding mortgages to staf approximate their carrying amounts largely due to the short-term maturites of these instruments. The fair value of 1,571,626 1,356,945 Other liabilites - - - - 12,371,866 12,371,866 mortgage facilites to employees is estmated considering (i) current or quoted prices Equity - - - - 97,012,528 97,012,528 for identcal instruments in the fnancial services sector and (ii) a net present value 29 RISK MANAGEMENT calculated from the average market yield rates with similar maturies and credit risk 347,380,178 784,771 1,771,125 - 110,774,135 460,710,209 factors. Risk is inherent in the Bank’s actvites, but is managed through a process of ongoing - Long-term fxed-rate and variable-rate receivables / borrowings are evaluated by the identfcaton, measurement and monitoring, subject to risk limits and other controls. Interest rate repricing Bank based on parameters such as interest rates, specifc country risk factors, individual This process of risk management is critcal to the Bank’s contnuing proftability and gap (320,178,394) 62,526,847 92,826,280 98,119,847 66,705,420 - creditworthiness of the customer and the risk characteristcs of the fnanced project. each individual within the Bank is accountable for the risk exposures relatng to his Based on this evaluaton, allowances are taken to account for the expected losses of Cumulatve gap (320,178,394) (257,651,547) (164,825,267) (66,705,420) - - these receivables. As at 28 February 2018, the carrying amounts of such receivables, or her responsibilites. The Bank is exposed to credit risk, liquidity risk, strategic risk, net of allowances, are not materially diferent from their calculated fair values. reputatonal risk and market risk. It is also subject to country risk and various operatng - The fair value of unquoted instruments, loans from banks and other fnancial liabilites risks. and obligatons under fnance leases are estmated by discountng future cash fows using rates currently available for debt on similar terms, credit risk and remaining maturites. - Fair value of fnancial assets at fair value through proft or loss are derived from quoted market prices in actve markets.

29 RISK MANAGEMENT (CONTINUED) 29 RISK MANAGEMENT (CONTINUED) 29 RISK MANAGEMENT (CONTINUED)

29.2 Interest rate risk (contnued) 29.3.3 Commitments and guarantees 29.5.2 Summary risk matrix – 30 November 2014 onsite examinaton (contnued) To meet the fnancial needs of customers, the Bank enters into various irrevocable Acceptable – management of risk is largely efectve but lacking to some modest degree. commitments and contngent liabilites. Even though these obligatons may not be While the insttuton might be having some minor risk management weaknesses, these Non-inter- recognised on the Statement of Financial Positon, they do contain credit risk and are have been recognized and are being addressed. Management informaton systems are TOTAL POSITION Up to 1 1 month to 3 months to est therefore part of the overall risk of the Bank. generally adequate. month 3 months 1 year 1 to 5 years bearing Total At 28 February 2017 US$ US$ US$ US$ US$ US$ The table below shows the Bank’s maximum credit risk exposure for commitments and Strong – management efectvely identfes and controls all types of risk posed by the Assets guarantees. relevant functonal areas or per inherent risk. The Board and senior management are actve partcipants in managing risk and ensure appropriate policies and limits are put Cash and cash equivalents - - - - 63,954,579 63,954,579 The maximum exposure to credit risk relatng to a fnancial guarantee is the maximum in place. The policies comprehensively defne the bank’s risk tolerance, responsibilites Financial assets at fair amount the Bank could have to pay if the guarantee is called upon. The maximum and accountabilites are efectvely communicated. value through proft exposure to credit risk relatng to a loan commitment is the full amount of the or loss - - - - 173,607 173,607 commitment. In both cases, the maximum risk exposure is signifcantly greater than the Overall Composite Risk: Loans and advances to amount recognised as a liability in the statement of fnancial positon. customers 9,949,679 1,437,734 2,668,818 36,857,869 1,672,644 52,586,744 Low – would be assigned to low inherent risk areas. Moderate risk areas may be Loans and advances assigned a low composite risk where internal controls and risk management systems 28 February 28 February relatng to are strong and efectvely mitgate much of the risk. furniture customers 994,336 - - - - 994,336 2018 2017 Financial assets US$ US$ held-to-maturity 8,266,676 25,540,768 17,057,215 3,640,462 - 54,505,121 Moderate – risk management systems appropriately mitgates inherent risk. For a given Other receivables - - - - 27,355,423 27,355,423 low risk area, signifcant weaknesses in the risk management systems may result in Investment property - - - - 5,437,400 5,437,400 Financial guarantees 30,000 10,000,000 moderate composite risk assessment. On the other hand, a strong risk management Property and equipment - - - - 6,346,943 6,346,943 Commitments to lend 6,115,684 46,800 system may reduce the risk so that any potental fnancial loss from the actvity would Intangible assets - - - - 6,064,152 6,064,152 have only a moderate negatve impact on the fnancial conditon of the organizaton. 6,145,684 10,046,800 Deferred tax asset - - - - 8,640,135 8,640,135 19,210,691 26,978,502 19,726,033 40,498,331 119,644,883 226,058,440 29.4 OTHER RISKS High – risk management systems do not signifcantly mitgate the high inherent risk. Thus, the actvity could potentally result in a fnancial loss that would have a signifcant Liabilites and equity impact on the bank’s overall conditon. Deposits due to banks 29.4.1 Operatonal risk Operatonal risk is the risk of loss arising from systems failure, human error, fraud or and customers 144,515,968 116,213 - - - 144,632,181 Directon of Overall Composite Risk: Loans and borrowings - - 280,000 - - 280,000 external events. When controls fail to operate efectvely, operatonal risks can cause Provisions - - - - 256,983 256,983 damage to reputaton, have legal or regulatory implicatons, or lead to fnancial loss. Increasing – based on the current informaton, risk is expected to increase in the next Other liabilites - - - - 5,842,692 5,842,692 The Bank cannot expect to eliminate all operatonal risks, but it endeavours to manage 12 months. Equity - - - - 75,046,584 75,046,584 these risks through a control framework and by monitoring and responding to potental 144,515,968 116,213 280,000 - 81,146,259 226,058,440 risks. Controls include efectve segregaton of dutes, access, authorisaton and Decreasing – based on the current informaton, risk is expected to decrease in the next reconciliaton procedures, staf educaton and assessment processes, such as the use Interest rate repricing 12 months. gap (125,305,277) 26,862,289 19,446,033 40,498,331 38,498,624 - of internal audit. Cumulatve gap (125,305,277) (98,442,988) (78,996,955) (38,498,624) - - Stable – based on the current informaton, risk is expected to be stable in the next 12 29.4.2 Compliance risk months. 29.3 Liquidity risk Compliance risk is the current and prospectve risk to earnings or capital arising from Liquidity risk is defned as the risk that the Bank will encounter difculty in meetng violatons of, or non-conformance with, law, rules, regulatons, prescribed practces, 30 CAPITAL MANAGEMENT obligatons associated with fnancial liabilites that are setled by delivering cash or internal policies, and procedures, or ethical standards. This risk exposes the insttuton another fnancial asset. Liquidity risk arises because of the possibility that the Bank to fnes and payment of damages. Compliance risk can lead to diminished reputaton, The objectve of the Bank’s capital management is to ensure that it complies with the might be unable to meet its payment obligatons when they fall due under both normal limited business opportunites, reduced expansion potental, and an inability to enforce Reserve Bank of Zimbabwe (RBZ) requirements. In implementng the current capital and stress circumstances. To limit this risk, management has arranged diversifed contracts. The Internal Audit and the Risk Department ensure that the Bank fully requirements, the RBZ requires the Bank to maintain a prescribed rato of total capital funding sources in additon to its core deposit base, and adopted a policy of managing complies with all relevant laws and regulatons. to total risk weighted assets. Risk weighted assets are arrived at by applying the assets with liquidity in mind and monitoring future cash fows and liquidity on a daily appropriate risk factor as determined by the RBZ to the monetary value of the various basis. The Bank has developed internal control processes and contngency plans for assets as they appear on the Bank’s statement of fnancial positon. managing liquidity risk. This incorporates an assessment of expected cash fows and the 29.4.3 Reputatonal risk availability of high grade collateral which could be used to secure additonal funding if Reputatonal risk is the current and prospectve impact on earnings and capital arising required. from negatve public opinion. This afects the insttuton’s ability to establish new Regulatory capital consists of: relatonships or services or contnue servicing existng relatonships. This risk may - Tier 1 Capital (“the core capital”), which comprises of share capital, share premium, 29.3.1 Liquidity ratos expose the insttuton to litgaton, fnancial loss, or a decline in its customer base. The retained earnings (including the current year proft or loss), the statutory reserve and Bank has a Business Development department whose mandate is to manage this risk. other equity reserves. 28 February 28 February 2018 2017 29.5 Reserve Bank Ratngs US$ US$ The core capital shall comprise not less than 50% of the capital base and portolio The Reserve Bank of Zimbabwe conducted an onsite inspecton of the Bank in November provisions are limited to 1.25% of total risk weighted assets. 2014 and the fnal ratngs that were determined on the Bank are detailed below: Loans to deposits rato 11% 40% - Tier 2 Capital (“supplementary capital”), which includes subordinated term debt, Net liquid assets to customer liabilites rato 70% 81% 29.5.1 CAMELS* Ratngs revaluaton reserves and portolio provisions. 29.3.2 Contractual maturites of undiscounted cash fows of fnancial assets and liabilites - Tier 3 Capital (“tertary capital”) relates to an allocaton of capital to meet market and CAMELS Component RBS** Ratngs 30/11/2014 operatonal risks. The table below summarises the maturity profle of the undiscounted cash fows of Capital Adequacy 1 - Strong the Bank’s fnancial assets and liabilites. Repayments which are subject to notce are treated as if notce were to be given immediately. However, the Bank expects that many Asset Quality 4 - Weak The Bank’s regulatory capital positon was as follows: customers will not request repayment on the earliest date the Bank could be required Management 2 - Satsfactory Earnings 4 - Weak to pay and the table does not refect the expected cash fows indicated by the Bank’s 28 February 28 February deposit retenton history. Liquidity 2 - Satsfactory 2018 2017 Sensitvity to Market Risk 2 - Satsfactory US$ US$ Less than 3 months to 1 to 5 Over 5 Composite Ratng 3 - Fair On demand 3 months 1 year years years Total US$ US$ US$ US$ US$ US$ *CAMELS is an acronym for Capital Adequacy, Asset Quality, Management, Earnings, Share capital 4,077 4,077 At 28 February 2018 Liquidity and Sensitvity to Market Risk. The CAMELS ratng system uses a scale of Share premium 106,317,629 106,317,629 1-5, where “1” is “Strong”, “2” is “Satsfactory”, “3” is “Fair”, “4” is “Weak” and “5” is Retained earnings (12,719,910) (35,174,158) “Critcal”. Financial assets: Deferred tax asset (65,879) (8,640,135) Cash and cash equivalents 116,073,355 - - - - 116,073,355 ** RBS stands for Risk-Based Supervision 93,535,917 62,507,413 Financial assets at fair value through proft or loss 852,284 - - - - 852,284 29.5.2 Summary risk matrix – 30 November 2014 onsite examinaton Less: Capital allocated for market and operatonal risk (4,531,362) (2,327,248) Loans and advances to customers 8,085,904 549,990 5,990,747 11,234,605 12,563,117 38,424,363 Advances to insiders (13,842,391) (3,370,464) Financial assets held to Guarantees to insiders (30,000) (10,000,000) maturity 18,985,880 62,761,627 94,206,800 74,322,126 - 250,276,433 Other receivables 36,753,817 - - - - 36,753,817 Credit Acceptable Stable Tier 1 capital 75,132,164 46,809,701 Total undiscounted fnancial Acceptable Stable assets 180,751,240 63,311,617 100,197,547 85,556,731 12,563,117 442,380,252 Low Acceptable Low Stable Tier 2 capital Foreign Financial liabilites: Exchange Low Acceptable Low Stable Other reserves 22,049 - Deposits due to banks and Acceptable Stable General provisions 3,388,683 3,899,036 customers 347,380,178 784,771 - - - 348,164,949 3,410,732 3,899,036 Loans and borrowings - - 1,771,125 - - 1,771,125 Acceptable Stable Total undiscounted fnancial Legal and liabilites 347,380,178 784,771 1,771,125 - - 349,936,074 Total Tier 1 and 2 capital 78,542,896 50,708,737 Acceptable Stable Net undiscounted fnancial Acceptable Stable assets/(liabilites) (166,628,938) 62,526,846 98,426,422 85,556,731 12,563,117 92,444,178 Tier 3 capital (sum of market and operatonal risk capital) 4,531,362 2,327,248 At 28 February 2017: KEY Financial assets: Total Capital Base 83,074,258 53,035,985 Level of Inherent Risk: Cash and cash equivalents 63,954,579 - - - - 63,954,579 Financial assets at fair value through Low – refects a lower than average probability of an adverse impact on a banking Total risk weighted assets 123,473,687 116,596,110 proft or loss 173,607 - - - - 173,607 insttuton’s capital and earnings. Losses in a functonal area with low inherent risk Loans and advances to would have litle negatve impact on the banking insttuton’s overall fnancial conditon. customers 11,305,000 1,437,734 2,668,818 39,918,179 1,672,644 57,002,375 Tier 1 rato 60% 40% Moderate – could reasonably be expected to result in a loss which could be absorbed Loans and advances relatng to Tier 2 rato 3% 3% furniture loans 994,336 - - - - 994,336 by a banking insttuton in the normal course of business. Tier 3 rato 4% 2% Financial assets held to maturity 8,266,676 25,540,768 17,057,215 3,640,462 - 54,505,121 High – refects a higher than average probability of potental loss. High inherent risk Total capital adequacy rato 67% 45% could reasonably be expected to result in signifcant and harmful loss to the banking Other receivables 27,355,423 - - - - 27,355,423 RBZ minimum requirement 12% 12% Total undiscounted fnancial insttuton. assets 112,049,621 26,978,502 19,726,033 43,558,641 1,672,644 203,985,442 Adequacy of Risk Management Systems: 31 EXTERNAL CREDIT RATINGS Financial liabilites: Deposits due to banks and Weak – risk management systems are inadequate or inappropriate given the size, Most recent Previous Previous customers 144,515,968 116,213 - - - 144,632,181 complexity and risk profle of the banking insttuton. Insttuton’s risk management ratng: ratng: ratng: systems are lacking in important ways and therefore a cause of more than normal October September September Loans and borrowings - - 280,000 - - 280,000 supervisory atenton. 2017 2016 2015 Total undiscounted fnancial liabilites 144,515,968 116,213 280,000 - - 144,912,181 The internal control systems will be lacking in important aspects partcularly as Net undiscounted fnancial indicated by contnued control exceptons or by the failure to adhere to writen policies Ratng agent: Global Credit Ratng Co (GCR) BBB BBB- BBB- assets/(liabilites) (32,466,347) 26,862,289 19,446,033 43,558,641 1,672,644 59,073,261 or procedures.