Since 1951 ANNUAL REPORT 2017 CONTENTS 2 Corporate Information Financial Statements 2 Vision, Mission and Values 41 Six Year Financial Review 42 Financial Highlights To Shareholders 43 Report of the Directors 3 Notice to shareholders 46 Directors’ Statement of Responsibility 4 Shareholder Information 47 Extracts from the Report of the Independent Actuary Corporate Governance 49 Independent Auditor’s Report 6 Group Corporate Structure 57 Consolidated Statement of Financial Position 7 Company and Product Profile 58 Company Statement of Financial Position 11 Corporate Revolution Ladder 59 Statements of Profit or Loss and Other Comprehensive 13 Corporate Governance Report Income 19 Directorate 61 Consolidated Statement of Changes in Equity 21 Corporate Social Investment 2017 62 Company Statement of Changes in Equity 25 Acting Chairman’s Statement 63 Statements of Cash Flows 27 Group Chief Executive’s Report 64 Notes to Consolidated and Separate Financial 30 Economic Overview Statements Additional Information 162 Group Footprint 171 Detachable - Form of Proxy 1 Corporate Information ZB FINANCIAL HOLDINGS LIMITED Auditors Registered Office Deloitte & Touche Zimbabwe 21 Natal Road West Block Avondale Borrowdale Office Park Harare Borrowdale Road Telephone: +263 (0) 867 700 2001 Borrowdale E-mail: [email protected] P O Box 267 Facsimile: +263 - 4 - 251029 Harare Web address: www.zb.co.zw Zimbabwe Tel: +263 (0) 867 700 0261 Company Registration Number Fax: +263 - 4 - 852130 1278/89 Web address: www.deloitte.com Date of Incorporation Board of Directors 29 May 1989 Prof C Manyeruke (Chairman) R Mutandagayi (Group Chief Executive) Group Company Secretary F Kapanje (Group Finance Director) H R Nharingo O Akerele T S Bvurere P Chiromo A Z Mangwiro J Mutevedzi P B Nyoni Vision, Mission and Values Our Vision To be a leading global financial services Group. Our Mission Passionate focus on creation of unparalleled value for our stakeholders. Our Core Values Accountability Empathy Excellence Innovation Integrity ZBFH ANNUAL REPORT 2017 / TO SHAREHOLDERS NOTICE TO SHAREHOLDERS Notice is hereby given that the Twenty-Ninth Annual General Meeting of the shareholders of ZB Financial Holdings Limited will be held in the Board Room, Ground Floor, 21 Natal Road, Avondale, Harare, on Thursday 28 June 2018, commencing at 1030 hours to transact the following business: ORDINARY BUSINESS 1. Financial Statements and Statutory Reports To receive, consider, and adopt, if appropriate, the financial statements, and the reports of the directors and auditors for the year ended 31 December 2017. 2. Dividend To confirm the final dividend of 1,83 US cents per Ordinary Share as recommended by the Board. 3. Directorate 3.1. In terms of Article 68 of the Company’s Articles of Association, Messrs O. Akerele and P. B. Nyoni retire by rotation and, being eligible, offer themselves for re-election at the meeting. 3.2. In terms of Article 62 of the Company’s Articles of Association, Messrs A. Z. Mangwiro, J. Mutevedzi and Mrs P. Chiromo were appointed to the Board after the last Annual General Meeting of the Company, and retire at the end of the meeting. Being eligible, they offer themselves for election. 4. Remuneration of Directors To approve the remuneration of Directors for the past financial year. 5. External Auditors 5.1. To approve the remuneration to Deloitte & Touche (Zimbabwe), the Company’s Auditor for the past financial year’s audit in terms of Article 112 of the Articles of the Company. 5.2. To re-appoint Deloitte & Touche (Zimbabwe) as the Company’s auditor for the ensuing year. 6. Any Other Business To transact any other business as may be transacted at an Annual General Meeting. In terms of the Companies Act [Chapter 24:03], a member entitled to attend and vote at a meeting is entitled to appoint a proxy to attend and vote and speak in his stead. The proxy form must be delivered at the registered office of the Company not less than 48 hours before the meeting is scheduled to commence. A proxy need not be a member of the Company. By order of the Board H. R. Nharingo Group Secretary 5 June 2018 21 Natal Road Avondale HARARE 3 ZBFH ANNUAL REPORT 2017 / TO SHAREHOLDERS SHAREHOLDER INFORMATION ANALYSIS OF SHAREHOLDERS as at 31 December 2017 Shares held Number % Spread Shares Held % Holding 1 - 500 230 16.45 48 158 0.03 501 - 1000 466 33.33 267 671 0.15 1001 - 10000 358 25.61 1 494 092 0.85 10001 - 20000 209 14.95 2 945 165 1.68 20001 - 50000 79 5.65 2 112 668 1.21 50001 - 100000 9 0.64 555 170 0.32 100001 - 500000 26 1.86 5 402 372 3.08 500001 - 10000000 18 1.29 40 944 466 23.37 10000001 - 10000000000 3 0.22 121 420 880 69.31 Totals 1 398 100.00 175 190 642 100.00 ANALYSIS BY CATEGORY Shareholders Number % Spread Shares Held % Holding COMPANIES 132 9.45 149 972 199 85.60 FCDA RESIDENT AND NEW NON RESIDENT 20 1.43 3 542 551 2.02 INDIVIDUALS 1 188 84.98 12 889 513 7.36 INSURANCE COMPANIES 4 0.29 216 575 0.12 INVESTMENT, TRUST AND PROPERTY COMPANIES 12 0.86 3 145 560 1.80 NOMINEE COMPANY 25 1.79 2 226 239 1.27 NON RESIDENT TRANSFERABLE 3 0.20 48 153 0.03 PENSION FUNDS 14 1.00 3 149 852 1.80 Totals 1 398 100.00 175 190 642 100.00 TOP 10 SHAREHOLDERS Holder Name Shares Held % Holding NATIONAL SOCIAL SECURITY AUTHORITY 66 196 080 37.79 TRANSNATIONAL HOLDINGS LIMITED 37 557 060 21.44 ZB FINANCIAL HOLDINGS LIMITED 17 667 740 10.08 OLD MUTUAL LIFE ASSURANCE OF ZIMBABWE LIMITED 10 062 547 5.74 MASHONALAND HOLDINGS LIMITED 5 281 975 3.01 FINHOLD GROUP STAFF TRUST 5 273 438 3.01 GOVERNMENT OF ZIMBABWE 3 619 575 2.07 LHG MALTA HOLDINGS LIMITED 2 834 873 2.04 GURAMATUNHU FAMILY TRUST 2 633 917 1.50 MINISTRY OF FINANCE 2 009 157 1.15 Total Holding of Top 10 Shareholders 153 136 362 87.83 Remaining Holding 22 054 280 12.17 Total Issued Shares 175 190 642 100.00 4 CONTENTS Corporate Governance 6 Group Corporate Structure 7 Company and Product Profile 11 Corporate Revolution Ladder 13 Corporate Governance Report 19 Directorate 21 Corporate Social Investment 2017 25 Acting Chairman’s Statement 27 Group Chief Executive’s Report 30 Economic Overview ZBFH ANNUAL REPORT 2017 / CORPORATE GOVERNANCE GROUP CORPORATE STRUCTURE The Group’s business focus areas and significant entities operating thereunder are as follows:- ZB FINANCIAL HOLDINGS LIMITED Banking Insurance Strategic Operations Operations Investments ZB Associated ZB Reinsurance Services (Private) 100% ZB Bank Limited 100% Limited 100% Limited Mashonaland ZB Life Assurance Holdingss 75.33% ZB Building Society 75.33% Limited 34.72% Limited Cell Holdings ZB Transfer Secretaries (Private) 75.33% (Private) Limited 33.32% Limited ZB Capital (Private) 100% Limited 6 ZBFH ANNUAL REPORT 2017 / CORPORATE GOVERNANCE COMPANY AND PRODUCT PROFILE ZB Financial Holdings Limited (ZBFH) was incorporated in • Automated teller machines (ATMs) May 1989, as the holding company for a group of companies • Point of Sale (POS) machines providing commercial banking, merchant banking and other financial services since 1951. Corporate & Investment Banking • Agricultural financing The business of, products and services offered by its key • Loans operating subsidiaries are discribed below: • Overdrafts • Advisory services ZB Bank Limited • Corporate savings accounts • Corporate current accounts ZB Bank is the flagship operation of ZBFH. Banking • Asset finance operations commenced in 1951 when the Netherlands Bank • Premium finance of South Africa opened a branch in then Salisbury, now • Corporate mortgages Harare. These operations, which were sold to the Netherlands Bank of Rhodesia in August of 1967, maintained a steady Treasury and Investments growth through acquisitions and expansion of operations. • Fixed deposits The Company changed its name to Rhodesia Banking • Treasury bills Corporation Limited in 1972 and then Rhobank in 1979. After • Bankers acceptances the acquisition of a majority shareholding in the Company by • Savings deposit account the Government of Zimbabwe in 1981 the Company changed • Foreign currency accounts its name to Zimbabwe Banking Corporation Limited. The • Structured facilities Bank became a subsidiary of Zimbabwe Financial Holdings • Investments advisory services Limited (FINHOLD) in 1992 following a restructuring of • Project finance operations in which non-banking operations were removed from the Bank. The Bank was renamed ZB Bank Limited International Banking in 2006 following the adoption of a monolithic brand by • Correspondent banking the Group. The Bank provides retail banking and corporate • Commodity finance banking services. • Import and export finance • Exchange control and advisory services Products and Services • Clean documentary collections • Documentary letters of credit Retail Banking • Foreign lines of credit • Savings accounts • Current accounts ZB Building Society • Call banking • Bancassurance ZB Building Society was incorporated in Rhodesia • Personal loans (Zimbabwe) as Founders Building Society and received its • Mortgage loans, and trading licence in 1961. The Society changed its name • Home improvement loans to Intermarket Building Society and later to ZB Building Society, following the acquisition of a majority shareholding Micro-banking in Intermarket Holdings Limited (IHL) by ZBFH. • Micro business loans • Savings accounts The main business of the Society is the mobilization of • Advisory deposits from which it makes advances to the public and corporate bodies on the security of mortgages over Electronic banking immovable property, and loans to public and corporate • Internet banking bodies on the security of their deposits with the Society. • E-wallet 7 ZBFH ANNUAL REPORT 2017 / CORPORATE GOVERNANCE COMPANY AND PRODUCT PROFILE (CONTINUED) ZB Building Society (continued) ZB Capital (Private) Limited Products and Services ZB Capital (Private) Limited specialises in venture capital finance, corporate finance and advisory services.