Our BusinessOur VisionTo provide telecommunications to all the people of Zimbabwe. Our BusinessOur MissionTo serve Zimbabwe by pioneering, developing and sustaining reliable, efficientand high-quality telecommunications of uncompromising world-class standards.Our ValuesThe values we hold in common:-PioneeringWe are a Group committed to finding the best way forward in the fast moving and highly competitive technologyfield. To remain leader in the field, we shall relentlessly pursue innovative solutions and constantly grow ourknowledge base with an uncompromising passion for excellence.ProfessionalismIn everything we do both within Econet and in the community we always work in a customer and objective-oriented manner with clearly defined goals in terms of quality of service. In all our professional areas and at alllevels we carry out our duties skillfully and diligently.PersonalInternally we always remember that we are a Group made up of individuals. These people are the Group. Eachone is an intrinsically valuable member of the organisation irrespective of their gender, race or position. We willalways show concern for each other in an atmosphere that is open and stimulates personal development, jobsatisfaction and a sense of responsibility. We believe in working in teams in effective and confident co-operationin environments where honesty, praise, constructive criticism and fair reward have their place.Who we are inside the Company reflects who we are externally. Our relationship with our customers enthuseswith warmth and a genuine desire to meet their needs. We reach out to customers in a holistic and organic waythat makes them true stakeholders in Econet Wireless. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 3
Life Changing ConnectivityBusiness PartnaThe country’s premium contract package from the country’s leading cellular network that is smarter,dependable and well connected. It is a post-paid package that gives you choice and unlimited network accesswith a lot of Value Added Services like Mobile Data, Roaming, Conference Calling, Unlimited Talk Time, SmartPhones, Voicemail, Vehicle Tracking , a High Value Loyalty Programme, Corporate Account Management anda lot more. With a flexible and convenient 30 day post-paid billing cycle subscribers receive their bills once amonth via email or SMS alerts. It is the ideal package for the business individual.
Corporate ProfileHolding CompanyThe ultimate Holding Company of Econet Wireless Zimbabwe Limited is Econet Wireless Global Limited whichowns a number of international telecommunications companies. This integrated annual report incorporates the Our Businessresults of all the subsidiaries and associates of Econet Wireless Zimbabwe Limited.Econet Wireless Zimbabwe LimitedEconet Wireless Zimbabwe Limited (EWZL) is the holding company of businesses involved in cellular operations,provision of internet access and transaction processing services in Zimbabwe. EWZL, which is listed on theZimbabwe Stock Exchange (ZSE), is Zimbabwe’s leading technology company. It is one of the largest quotedcompanies in terms of market capitalisation and directly and indirectly employs in excess of 15 000 people.Subsidiary CompaniesEconet Wireless (Private) LimitedEconet Wireless (Private) Limited is EWZL’s cellular network operator with a base of 6 409 000 subscribers asat 29 February 2012.EW Capital Holdings (Private) LimitedEW Capital Holdings (Private) Limited is EWZL’s investment vehicle through which the Group holds a variety ofinvestments carefully selected with the twin objectives of growing earnings and preserving value for shareholders.Pentamed Investments (Private) LimitedEWZL through wholly-owned Pentamed Investments (Private) Limited holds 69% of Mutare Bottling Company(Private) Limited (inclusive of a 6% shareholding in the form of convertible instruments).Transaction Payment Solutions (Private) LimitedThe Company is a leading provider of financial transaction, switching, point of sale and value-added services thatexploit the convergence of banking, information technology and telecommunications. The Company provideslocal and international financial institutions and telecommunications operators access to cutting-edge technologyto enhance customer service in partnership with one of the world’s leading manufacturers of smart card-basedpoint-of-sale systems.Associate CompanyData Control and Systems (1996) (Private) Limited t/a Liquid Telecom ZimbabweLiquid is a registered internet access provider in Zimbabwe and is a leading data, voice and Internet Protocolprovider in the country. The company supplies wholesale and retail fibre-optic and satellite services throughoutZimbabwe.Previously a subsidiary, this company became an associate during the year on change in shareholding. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 5
Shareholder Value Delivery ReportSince the dollarization of the Zimbabwe economy in January 2009, through a combination of carefully craftedoperational strategies, the Group has managed to grow earnings per share at an annualised rate of 23%. TheGroup also resumed the return of cash to shareholders (a) in the form of dividends and (b) through a number ofprudent share buy-backs.The following concerted efforts were the key drivers to the value delivered to shareholders over the period:Securing long-term fundingThrough engaging international financial institutions and telecommunication equipment suppliers, the Groupmanaged to secure substantial debt facilities in an economic environment that posed a challenge for the majorityof local businesses.Investment in infrastructure and resourcesApproximately $614 million was invested in infrastructure to expand network coverage and improve networkquality since 2009, resulting in a growth of the Group’s subscribers from 1.2 million to 6.4 million subscribers.The Group also invested in the acquisition of various systems, which include an enterprise resource planningsystem geared at improving internal processes through the integration of internal and external managementinformation throughout the organisation.The focus on customer experience through delivery of superior productsFollowing the rapid growth in the take up of the Group’s voice and SMS services, Econet introduced broadbandinternet access to its subscribers late in 2010. Since then, there has been continuous investment in expandingthe mobile data network and introducing additional services to subscribers through evolving technologies. In2011, EcoCash, a mobile money transfer and payment platform was launched. The Group continues to developadditional products and services within the areas of energy, health, agriculture and finance.The acquisition of non-core investments as a hedge to preserve valueDuring the hyperinflationary environment preceding the introduction of foreign currencies as legal tender inZimbabwe, the Group made a strategic decision to hedge against the loss in value of cash resources by acquiringnon-core listed and unlisted investments. The subsequent disposal of some of these investments at a profit inUnited States Dollars during the current financial year under review unlocked significant shareholder value.Reducing investor uncertainty through the provision of value-relevant informationAs a result of the constant adherence to the latest International Financial Reporting Standards and best practicein financial reporting, the Group continued to provide better disclosure of its activities through its annual reports,interim financial results publications, as well as presentations to the financial market. This practice has culminatedin the Group publishing its first integrated annual report, providing investors with insights on the sustainability ofthe Group’s business.6 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
Share performance since dollarisation Our Business The Group has maintained an average cash dividend of approximately 12 cents per share since 2010. In addition to this, in February 2011, the Group also distributed a dividend in specie (6 cents per share) to shareholders in the form of shares in Meikles Africa Limited and Kingdom Financial Holdings Limited. Through a combination of carefully crafted operational strategies, the Group has managed to grow earnings per share at an annualised rate of 23% since the dollarisation of the Zimbabwe economy in 2009. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 7
Life Changing Connectivity ECONET BROADBAND @ WORK The company has built a robust network infrastructure of both voice and data to ensure end-to-end connectivity. The network uses the latest 3G and WiMAX technologies, and is linked together by a fibre-optic transmission system, with satellite back-up to ensure reliability. Econet broadband @WORK service offers you fast, reliable Internet access that caters for businesses of all sizes. From SME to big corporate, Econet has the data packages and technologies that will work for you.@ WORK
Financial Performance HighlightsREVENUE COMPOSITION Our Business1 Earnings before interest, taxation, depreciation, impairment and amortisation2 Profit after taxation3 Average revenue per user4 Capital expenditure ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 9
Chairman’s Statement to Shareholders Introduction The Group maintained its market leadership and sustained over 70% of the mobile market share. Subscribers increased by 16% during the year to close at 6.4 million. The country’s mobile penetration rate increased to 74% from 66% during the period under review. Zimbabwe has now surpassed the mobile penetration of many countries in the region, largely due to the investment made by Econet. Investment review In the last three financial years the business invested US$614.0 million into the network. This investment has widened the competitive gap by increasing the market share to over 70% in just under four years. The business has also been able to consolidate and expand its service offerings based on latest technologies and now commands the most extensive data and voice coverage and capacity in the country. During this capital intensive investment period the core and radio elements of the network were expanded to cater for more than six million subscribers from an initial capacity of 1.2 million subscribers in 2009. The microwave transmission network was also upgraded to fibre optic transmission which is more reliable and provides better quality transmission for both data and voice services. As demand for electronic transactions and internet use increases, the investment in the broadband infrastructure has become a fundamental platform for economic growth and social transformation. The rapid growth in data subscribers to over 2 million highlights the growing relevance of data services in social and business interactions. Operations review EcoCash, a Mobile Money Transfer (MMT) product was launched during the year and has achieved unprecedented success. Over one million subscribers were registered in less than six months since the launch of the product. To a great extent, the success of this product was due to the extensive network coverage that was deployed by the business. This and other innovative achievements were realized due to the ability of the business to access funding at a time when other businesses in the country were not able to access capital. The network expansion strategy pursued by the business has resulted in accelerated growth and a significant increase in the competitive gap. Enhancing customer experience continues to be a key strategic focus area. While a comprehensive national distribution network has been developed through New Generation shops as well as through the franchise, dealer and agent channels, more innovative initiatives are being implemented to bring convenience to the subscriber. An example of such innovation is the capability of subscribers to purchase airtime from their mobile devices using the EcoCash wallet anytime and anywhere within10 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
the Econet coverage area. Work is ongoing to expand the customer service centres and call center facilities soas to provide ease of access to the Company’s products and services to its extensive subscriber base. Networkquality is constantly being monitored and optimization work is undertaken whenever and wherever necessary in Our Businessorder to eliminate network inefficiencies and enhance the customer experience.Awards for excellenceIn recognition of its pioneering initiatives in the area of customer service, Econet was awarded the 2011 AfricaFrost & Sullivan (F&S) Award for customer value enhancement following a recent analysis of the broadbandcommunications in Africa. In yet another show of confidence, Econet was awarded the best customer serviceaward out of 119 local organisations that participated in a well publicised customer service perception surveyconducted by an independent local research firm.Financial performanceRevenue for the year was US$ 611.1 million, representing growth of 24% from the previous year. The EBITDAincreased by US$ 48.1 million to US$ 290.8 million, an increase of 20%. Profit after tax for the year was US$165.7million compared to US$141.0 million for 2011, an increase of 18%. Total assets increased by US$174.9 millionto US$812.4 million, an increase of 27.4%. The debt to equity ratio was 65%, an improvement from 86 % in theprevious year.The Group sold its investments in African First Renaissance Limited (AFRE) and Rainbow Tourism Group (RTG).This is the culmination of a well executed strategy that saw the business invest excess cash in non-core assets topreserve shareholder value when the economy was hyperinflationary. These investments have now been realisedwith a good return for the shareholder.Data Control and Systems (1996) (Private) Limited’s results for the year ended 29 February 2012, have beenaccounted for as an associate.Corporate social investmentThe Group continues to be a major driver of economic activity and social transformation through its contribution tofiscal revenues, introduction of life changing innovations, as well as its corporate social investment initiatives. Thebusiness remains committed to making a difference in the lives of the less privileged across the country throughthe provision of material and financial support. More than 50,000 disadvantaged children have benefited througheducational sponsorships by Capernaum Trust. In recognition of those students who excel academically, JoshuaNkomo Scholarship Fund (“JNSF”) provided a platform to assist over 500 such students. National Healthcare TrustZimbabwe (“NHTZ”) continues to provide health related services to under-serviced communities and to respondto various crises.OutlookDue to the massive investments that the business has made the future looks bright. The products introducedby the business are experiencing exponential growth. Value enhancing services that leverage on the business’innovative culture and its extensive network infrastructure will continue to be pursued in order to satisfy thesubscriber’s changing needs. Initiatives to enhance customer experience will continue to be executed.Looking ahead, Econet is set to consolidate its market leadership position through value creation and preservation,innovation and continuing to fulfill its customer promise of uncompromised quality and reliability which affords aunique and compelling service experience.AppreciationOnce again, I would like to thank our shareholders, strategic partners, customers and other stakeholders fortheir continued support. I would also like to thank management and staff for their unwavering commitment andsterling work in delivering a good set of results. I convey my appreciation to my fellow Board members for theirvision, wise counsel and support in taking the Group to new heights of performance and ushering in a new era intelecommunications in Zimbabwe.T. NyambiraiCHAIRMAN OF THE BOARD20 APRIL 2012 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 11
Life Changing ConnectivityECOCASHEcoCash, our mobile money transfer and payment system, has promoted financial inclusion in Zimbabwe byconnecting the rural to the urban population. It has also opened a new world of financial transactions to ourunbanked population.
Through EcoCash, we are redefining the mobile experience and transforming the way people transact inZimbabwe. Our customers are now able to pay for goods and services, including airtime, using their mobile.
Chief Executive Officer’s Operations Review Introduction The strong financial performance delivered to date is due to improved operational performance and the introduction of innovative products and services designed to meet customer needs. Investments made into the business enabled the introduction of products such as EcoCash, a Mobile Money Transfer service and Multimedia Messaging Services. These innovations have given the business a strong competitive advantage and this will drive growth into the future. Operations review Over 1 million customers were registered for Mobile Money Transfer within 6 months of launch. This acquisition rate is higher than that achieved by other operators offering similar services. The demand for the service remains very high. This product has transformed the way Zimbabweans transact and will be developed further to enable bill and merchant payments. Customers continue to adopt data services in increasing numbers throughout the country. Data services have been enhanced through the introduction of a wide range of affordable smartphones and tablets. Over 2 million customers are connected to data services and this growth is expected to increase as more customers gain access to data enabled devices. The penetration of broadband has increased to over 20% of the total market, a notable achievement within 18 months of launch. The Buddie Bonus Points Loyalty Program is constantly being enhanced and free services such as Missed Call Alert, Call Me Back and Econetmail, continue to help promote better customer loyalty. The Group intends to introduce more life-changing , products and services on an ongoing basis. The Group’s coverage and capacity remain the best in the country. The business deployed more efficient energy solutions to power the network infrastructure and reduce network down times. 14 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
The Group delivered exceptional financial performance in the financial year ended 29 February 2012. Earningsper share increased from US$0.83 to US$1,00 per share, an increase of 20%. The business secured additional Our Businesscredit facilities that were used for network expansion with significant focus on the 3G capability of the network.Operational cash flows remained strong. The business generated net cash flows from operating activities ofUS$246,4 million, an increase of 17% from the previous year.Loan funding that is required for capital projects for the upcoming financial year has already been secured. Inthe period under review all loan commitments were serviced in line with the loan covenants. Prudent financialguidelines have been put in place to ensure that the Group is able to service all its commitments.Internal transformationImproved internal systems have helped deliver one of the best customer services in the country. These effortshave been recognised by an independent survey in which the Company won the award for the “Best CustomerServices Company in Zimbabwe”. Efforts to optimise internal processes will continue with a view to improveoperating efficiencies and effectiveness. The growth of the Group will continue to be driven by its investment inpeople, processes and systems.OutlookThe business will be focusing of the following key areas:• Connecting more data subscribers and increasing revenue contribution of this key category;• Continuing aggressive customer acquisition for EcoCash and increasing service utilization;• Improving network coverage and capacity in order to improve quality of service;• Increasing airtime, mobile devices, accessories and EcoCash distribution centres and sales points;• Improving the customer service experience; and • Maintaining market leadership and growing share of customer spend.The business is well positioned to continue to deliver value to its shareholders through commitment and focus onprofitable product areas. Innovation in all areas will be instrumental in meeting the business revenue growth andcost optimisation targets.D. MboweniChief Executive Officer20 April 2012 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 15
Life Changing Connectivity ECONET BROADBAND ON THE GO Is a mobile broadband service that allows you to access the Internet on your handheld device or laptop. ON THE GO is broadband connectivity that’s available anytime, anywhere. This service is powered by GPRS, EDGE or UMTS technologies depending on your location and access device.ON THE GO
Directors’ StatementThe Directors have pleasure in presenting their fourteenth Annual Report - the first integrated annual report - andthe Consolidated Audited Financial Statements of Econet Wireless Zimbabwe Limited for the year ended 29February 2012. In the report “Group” refers to Econet Wireless Zimbabwe Limited and its subsidiary companies. Our BusinessWe remain committed to doing business successfully, based on our business ethics and values.Principal ActivitiesMarket reviewThe Group’s core business continued to be the provision of cellular services, provision of internet access services,transaction processing services and mobile banking services. Econet further consolidated its position as themarket leader, as reflected in the Chairman’s and the Chief Executive Officer’s statements.Human capitalThe Directors are pleased to report on the extremely competent performance of our staff in all aspects of thebusiness. The Group would not have been able to achieve the high levels of performance and market leadershipwithout the wholehearted contributions of staff at all levels.The Directors are confident that the Group’s very ambitious expansion programme, made possible by the newly-raised funds, will proceed as planned because of the professionalism and technical competence of the Group’semployees and its technical and strategic partners. The expansion programme will further change the lives ofZimbabweans and the Group’s employees play a pivotal role in making this possible.New developmentsThe Group will be introducing more new products to the Zimbabwean economy along with the expansion of thenetwork according to its capital expenditure programme.Consolidated ResultsThe Group’s financial results and its activities during the year are fully covered in the Chairman’s Statement andthe Chief Executive Officer’s Statement.DividendsThe Board declared an interim dividend of 11.8 US cents per share for the half-year ended 31 August 2011. No finaldividend was declared for the year ended 29 February 2012.Share CapitalThe Company’s authorized and issued share capital is disclosed in Note 23 of the Consolidated Annual FinancialStatements.DirectorsIn accordance with Article 81 of the Company’s Articles of Association, at least one third of the directors mustretire and offer themselves for re-election at each annual general meeting. Messrs T. Nyambirai, J.G.B. Pattisonand Dr. J. Myers so retire. Being eligible, they offer themselves for re-election.Mr. P.J. Campbell resigned as a director with effect from 31 July 2011. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 17
Life Changing Connectivity ECONET BROADBAND @ HOME Is a WiMAX based service that offers you fast, reliable internet access in your home. The service is also suitable for “home-based” businesses that require dependable high-speed data access.@ HOME
At the Annual General Meeting shareholders will be asked to approve payment of the directors’ fees and the re-appointment of the retiring directors. Our BusinessCapital commitmentsDetails of the Group’s capital commitments are set out in Note 35 of the financial statements.Directors’ InterestsDetails of the interests of the directors in the shares of the Company are set out in Note 23.5 of the financialstatements.Register of MembersThe Register of Members of the Company is open for inspection to members and the public, during businesshours, at the offices of the Company’s transfer secretaries, First Transfer Secretaries (Private) Limited.Borrowing PowersThe details of the Group’s borrowing powers are set out in Note 34 to the financial statements.Pension FundThe Group’s pension fund scheme, which is a defined contribution scheme, is administered by a Board of Trustees.The Trustees manage the assets of the pension fund, which are held separately from those of the Group. Theassets and funds of the scheme are administered in accordance with the rules of the pension fund.Corporate Social InvestmentContributing to the country’s economic and social development remains a key component of the Group’s objectives.Through various initiatives and activities the Group fulfilled this commitment during the year. Further details of theexcellent work the Trusts are doing to influence and change the lives of so many Zimbabweans may be found inthe “Our People, Our Community” section of this integrated report.Donations to Political PartiesThe Group does not, as a matter of policy, contribute to any political party.AuditorsErnst & Young Chartered Accountants (Zimbabwe) continued as the Group’s auditors during the year. Shareholderswill be asked to approve the remuneration of the auditors for the year ended 29 February 2012, and to approvetheir reappointment, for the ensuing year.By order of the BoardT. Nyambirai D. Mboweni C. A. BandaCHAIRMAN CHIEF EXECUTIVE OFFICER GROUP COMPANY SECRETARY20 April 2012 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 19
Corporate Governance StatementCommitment to good corporate governance remains a key aspect of the Group’s culture. The Group observesand adheres to the principles of good corporate governance. This way the Group attains the ultimate objective ofresponsible corporate behaviour and full accountability to its shareholders and stakeholders.THE BOARD OF DIRECTORSComposition and appointmentThe Board comprised ten (nine since 31 July 2011) Directors made up of four executive and six (five since 31 July2011) non-executive directors. The Board is chaired by a non-executive director, thus ensuring a separation ofpower and authority, in line with best corporate practice. Appointments of the non-executive directors are madewith due attention to the need to have within the board a diverse range of skills, knowledge and expertise.The election of non-executive directors is subject to confirmation by shareholders. In terms of the Company’sArticles of Association and the Companies Act (Chap 24:03) at least one third of the directors must retire at everyannual general meeting and, if eligible, can stand for re-election. Also, a director appointed during the course ofthe year must retire at the annual general meeting and, if eligible, stand for re-election.Accountability and delegated functionsThe Board has the ultimate responsibility of upholding and promoting the Group’s strategic and sustainabledevelopment. To achieve these goals the Board focuses on the following key areas:• reviewing of the Group’s strategic objectives• reviewing and approving of the Group’s capital expenditures and investments• monitoring and ensuring observance of governance principles in the Group• reviewing risk management and internal controls• reviewing and approving the Group’s budget• reviewing and approving annual financial statements and all notices to shareholders and stakeholders.The Board meets formally at least four times a year to review the Group’s performance. In the execution of itsresponsibilities the Board delegates certain specific responsibilities to various committees and the boards ofsubsidiary companies.RightsTo facilitate the exercise of their responsibilities all Directors have unrestricted access to management, includingthe Group Company Secretary, and to the Group’s records and other information as and when they so require.The directors may, should they deem it necessary, consult independent advisors and obtain from them expert orindependent professional advice. Such consultations shall be made at the Group’s expense.Directors’ NamesThe following are the directors who served during the year:Mr. T. Nyambirai (Chairman), Dr. S.T. Masiyiwa, Mr. P.J. Campbell, Mr. K.V. Chirairo, Mr. C. Fitzgerald,Mr. D. Mboweni, Mrs. T.P. Mpofu, Mrs. B. Mtetwa, Dr. J. Myers and Mr. J.G.B. Pattison. Mr. P.J. Campbellresigned on 31 July 2011, however, he continues to provide his services as a consultant to the Group and is invitedto attend Board meetings and to chair certain committees.Directors’ InterestsIn compliance with good corporate governance, directors are required each year to indicate in writing whether theyhave any material interest in any contract of significance with the Group or any of its subsidiaries, which could giverise to a related conflict of interests. Directors are also required to disclose their other business interests. With theexception of Mr. T. Nyambirai and Mrs. B. Mtetwa, none of the directors had a material interest in any contract ofsignificance to which the Group was a party during the year, other than their service contracts.22 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
Mr Nyambirai is the Group Chief Executive Officer of TN Holdings Limited, which includes TN Financial Services,one of the Group’s financial advisors and TN Bank Limited, one of the Group’s bankers. He is also a partner inMtetwa and Nyambirai Legal Practitioners, a firm that provides legal services to the Group. Mrs Mtetwa is a senior Cor po r ate G overnancepartner in Mtetwa and Nyambirai Legal Practitioners.The Group Company SecretaryAll directors have access to the advice and services of the Group Company Secretary.BOARD COMMITTEESIn order to assist it in the execution of its responsibilities, the Board has appointed a number of committees.The committees operate within defined terms of reference set by the Board. The board committees share withthe main board the authority to take independent professional advice at the Company’s expense when deemednecessary to do so. The committees are chaired by non-executive directors. They submit reports to the mainboard on the committee’s deliberations and findings.Audit CommitteeThe Committee continued with its role of reviewing the Group’s internal control systems and accounting policieswith a view to ensuring their adequacy and effectiveness. It also reviews the audited annual and interim financialstatements, in preparation for their publication. The Committee also oversees the Group’s risk managementpolicies and procedures and ensures these are fully implemented and observed.The Committee works closely with the Group’s internal and external auditors. The external auditors and the headof internal audit have unrestricted access to the committee and its chairman and attend audit committee meetings.The following constituted the committee during the year: Mr. P.J. Campbell (Chairman), Mr. K.V. Chirairo,Mr. C. Fitzgerald, Mrs. M. Harris, Mr. D. Mboweni and Mrs. T.P. Mpofu.Investments CommitteeThe Investments Committee’s role is to review the Group’s existing and proposed investments and makerecommendations on these to the Board.Members of the committee were: Mr. C. Fitzgerald (Chairman), Mr. K.V. Chirairo, Mrs. M. Harris, Mr. D. Mboweni,Mrs. T.P. Mpofu, Mr. J.G.B. Pattison, Mrs. B. Mtetwa and Dr. J. Myers. ** Mr. P.J. Campbell chairs the Audit, Loans and Related Parties Committees as a special advisor and consultantto the Board. Since his resignation, he attends Board meetings by invitation. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 23
CORPORATE GOVERNANCE STATEMENT (continued)Loans CommitteeThe Committee reviews the Group’s major loans obligations, both local and foreign, and puts forwardrecommendations on the servicing of these obligations.The members of the Committee were: Mr. P.J. Campbell (Chairman), Mr. K.V. Chirairo, Mr. C. Fitzgerald,Mrs. M. Harris, Mr. D. Mboweni and Mrs. T.P. Mpofu.Investor RelationsThe Group is fully cognisant of the value of engaging with the various stakeholders. The engagements offer theGroup the opportunity to cultivate beneficial investor relations by keeping stakeholders and potential investorsproperly informed of the business and its operations.Two meetings are held with investment analysts each year, one after the release of the Group’s half-year resultsand the other after the release of the full year results, at which a full briefing of the Group’s performance is given.The Group’s Integrated Annual Report and other corporate publications are available on the corporate websitewww.econet.co.zw.At the Group’s Annual General Meeting each substantial issue is put to the meeting for discussion and /or noting.The meeting is also presented with, and asked to adopt, the Group’s financial statements and Directors’ statement.Employment and equity practicesA key aspect of the business is ensuring that its employees fully understand its operations and in turn that theemployees are able to interact with its customers in a professional and informed manner. Systems are in place toensure effective communication so as to provide the employees with direction and pertinent information on theGroup’s activities and strategic initiatives.The Group is an equal opportunity employer. Career development and promotion of disabled people is, as far aspossible, the same as that of other employees. All employees are accountable for adherence to equal opportunityand anti-discrimination policies. The promotion of tolerance and the fostering of good relations among employeesremains an ongoing initiative in the Group.The Group recognises the need to continuously develop skills, and accordingly efforts towards providing employeeswith opportunities for growth and development and in the process to achieve team effectiveness remain part ofthe Group’s growth strategy.As it has to interact with so many stakeholders the Group has adopted as part of its culture observance of thehighest standards of ethical behaviour by its directors and its employees. The Group encourages employeesto conduct themselves with integrity and professionalism, with a view to achieving excellence in customersatisfaction, quality of products and services, optimization in the use of assets, employee development and soundrelationships with regulatory authorities.Insider tradingThe Group complies with the Zimbabwe Stock Exchange Listing Rules in relation to transactions by directorsand employees in securities issued by the Group. Directors and employees or their nominees or members oftheir immediate family are prohibited from dealing, either directly or indirectly, in the Group’s securities at anytime when they are in possession of unpublished, price-sensitive information regarding the Group’s business oractivities.24 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
The Group operates a closed period prior to the publication of its interim and annual results. No director or employeeof the Group may deal in the securities of the Group during the closed period. In terms of policy, directors andemployees who wish to transact in the shares of the Group, even outside of the Group’s “closed or blocked Cor po r ate G overnanceperiod”, are required to obtain the clearance of the Chairman of the Board of Directors.Independence of AuditorsThe Group’s Audit Committee confirms the independence of the Auditors, Ernst & Young Chartered Accountants(Zimbabwe), who are engaged by the Group for audit-related services. Whenever necessary the Group calls uponthe services of other firms to assist with non-audit management consultancy work.Going concernThe Directors have a reasonable expectation that the Group has adequate resources to continue in operationalexistence for the foreseeable future. Accordingly, they have prepared the financial statements on the basis thatthe Group is a going concern.By order of the BoardT. Nyambirai D. Mboweni K.V. ChirairoCHAIRMAN OF THE BOARD CHIEF EXECUTIVE OFFICER FINANCE DIRECTOR 20 April 2012 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 25
Life Changing ConnectivityONLY BUDDIE GIVES YOU MORE!Buddie, our prepaid package keeps you in touch with friends and family in so many ways.Only Buddie gives you more value for money, more talk time, more convenience whenyou travel and so much more fun, ensuring that you stay connected always.
Our Products and ServicesServices Our BRANDS, O URVoiceWe are the largest carrier of mobile voice traffic in Zimbabwe and ranked as one of the best in the region. Weprovide domestic, international and roaming voice services for both prepaid (Buddie) and postpaid (BusinessPartna) customers.MessagingWe offer customers convenience through SMS and MMS for both prepaid and postpaid customers. NETWORKOverlay servicesContent-based services such as mobile newspaper service (Headlines via daily SMS) and caller ringback toneshave been introduced with a range of content to follow.DataDemand for mobile data is being accelerated by the wide range of state of the art devices such as smartphones,tablets, good network speed and a wide variety of applications. As at February 2012, the percentage of datasubscribers on Econet Broadband was over 30% and the business will continue to offer bundles with competitivepricing to stimulate demand.ProductsBuddie – It’s more than a friend, it’s a BuddieBuddie is Econet’s prepaid product. The product has in excess of 6 million subscribers or “Buddies” to whom weare thankful for their loyalty as the friendship continues to evolve. Buddie unveiled a massive campaign dubbed“Buddie Gives You More” which explains the various services and benefits that a customer enjoys on their Buddieline. There are many exciting services under the Buddie brand, which are aimed at making the lives of customersmore convenient whilst offering them more VALUE, CONNECTIVITY and TALKING TIME.Econet Business SolutionsThis is the umbrella brand for all of Econet’s High Value Propositions targeting the business consumer. Thebrand has a variety of offers covering fixed and mobile communication solutions and data solutions for corporatecustomers of all sizes and these include:Business Partna PremiumThe country’s premium contract that is smarter, dependable and well connected. It is a contract line that gives youchoice and unlimited network access with a lot of Value Added Services like Mobile Data, International Roaming,Conference calling, Unlimited Talk time, Smart Phones, Voicemail and Vehicle Tracking.Business Partna SelectThis contract package provides subscribers with total control of monthly usage by allowing subscribers to tailormake usage patterns. This is a 24 month renewable contract package that comes with a free handset.Business Solutions TeamThis team comprises trained sales staff as well as technical support staff whose main role is to provide totalcommunication solutions to all of Zimbabwe’s industry and commerce. The goal for the Sales team is to developand maintain mutually beneficial relationships with the organization’s portfolio of current and potential clients andis allocated to the Zimbabwean market by industry and region. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 27
OUR PRODUCT & SERVICES (continued)TelemetryThese are device tracking service and Point of Sale communication solutions offered in partnership with otherservice providers. Econet Wireless provides the communication solutions for Vehicle tracking devices to varioustracking companies. Point Of Sale devices are also offered to various registered banks and financial institutions inan effort to improve the general public’s ability to transact.Econet BroadbandEconet broadband provides instant and affordable high speed access to the internet. It utilizes an independentgateway and has its own source of International bandwidth; this means the Group can provide world classconnectivity. For a child it means access to education, for a doctor it means access to world-class researchresources, for a student it means easy access to long distance learning opportunities, for family and friends itmeans they do not have to miss a moment anywhere in the world.To ensure the different needs of every Zimbabwean are met, Econet Broadband provides three different packages:ON THE GO, @HOME and @ WORK.On the GoAllows our customers fast access to mobile broadband on their handheld device or laptop. ON THE GO isbroadband connectivity that’s available anytime and anywhere. This service is powered by GPRS, EDGE or UMTStechnologies depending on your location and access device.@HomeThis service offers customers fast, reliable internet access in the comfort of their homes. This service is alsosuitable for small businesses that require dependable high speed data access.@WorkEconet Broadband is a WiMAX based service that offers business customers of all sizes fast reliable Internetaccess. This broadband offering works best for corporates requiring highly flexible service at their head office orbranches, small local Internet Service Providers and cyber cafes, small to medium enterprises and recreationalestablishments.EcoCash Mobile Money – Your phone Your WalletEconet launched EcoCash Mobile Money in 2011. EcoCash is an innovative mobile payment solution that enablessubscribers to complete simple financial transactions through a mobile handset. This service enables subscribersto send money anywhere in Zimbabwe, and for them to purchase prepaid airtime for themselves or another Econetsubscriber. EcoCash also facilitates the purchase of merchandise from shops or vendors that accept EcoCash.This is really a convenient service that has made it easy to send money to remote locations in the country. Anexciting set of EcoCash functionalities will be released in future phases of development.Registration is simple and done through EcoCash Agents. Once one is registered, one can send money at anytime. Receiving money is just easy. If a subscriber is registered for EcoCash, all they have to do is to take the codethey receive via SMS to any EcoCash agent to redeem their cash.28 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
To date EcoCash has built the widest distribution network with more than a thousand Agents countrywide andmore than a million customers. This has been done in line with Econet’s strategy of promoting financial inclusion Our BRANDS, O URin Zimbabwe and bringing relevant financial products to all Zimbabweans irrespective of their location.Areas of new product or service development going forward include offerings for the agricultural sector plusfinancial and health based services.DevicesEnsuring that our services are available through multiple platforms, we have made arrangements with various key NETWORKplayers in the industry to supply us with various devices.Smartphones, tablets, and laptopsDuring the year we have had the latest Nokia, Apple, Huawei and Samsung smartphones, tablets and laptops onsale to our customers to ensure they have a full enjoyment of our services.Econet Branded handsetsWe have Econet branded handsets available to the market. These come in various models to cater for the differentneeds of our customers.Other devices and accessoriesOver and above the handsets, we supply a range of innovative devices. We have USB stick modems, wirelessmodems, accessories, solar lanterns, solar phones and solar chargers.DistributionDirect channelsWe have 53 Econet branded shops around Zimbabwe. Currently, Econet products can be found in over 1 600branded and non-branded retail outlets across the country. The business segment is serviced through a team ofdedicated sales people.Indirect channelsThis includes third party service providers, independent dealers, distributors and retailers across the country. Weclosed the year with 73 dealers who are operational. In an effort to reward performance and enhance loyalty at thedealer level, we offer the dealers competitive discounts and commissions. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 29
Life Changing ConnectivityEconet Coverage Map - February 2012Econet is getting everyone connected everywhere. Econet has the widest voice and data coverage as a resultof the massive investment in network infrastructure.
Our networkNetwork Capacity Upgrade and Evolution Our BRANDS, O URThe business continued with the massive network rollout that resulted in the increase of data subscription by150% to 2.1 million subscribers. For the 2G network, subscriptions increased by 25% to 6.4 million subscribers. NETWORKThe business embarked on a massive upgrade of the data network to cope with the massive uptake of mobilebroadband services by deploying more 3G Base stations and expanding the data core network and transmissionnetworks.Evolution to Internet Protocol (IP) technology has been embraced and implementation on the central nodes is atan advanced stage, having completed 70% of the migration to IP. IP is also being deployed into the transmissionnetwork. This makes the network more efficient and allows more compatibility with emerging technologies.Rollout of sites and other infrastructure continued resulting in massive increases in both network coverage andcapacity. Due to continued power outages, generators and battery rollout has been intensified. Going forward, theGroup is also looking into alternative sources of power such as solar energy.Quality of Experience ImprovementIn an endeavor to improve customer Quality of Experience (QoE) across the network, the business adopted andimplemented a single Intelligent Network (IN) and Home Location Register (HLR). Radio network optimization isongoing. This has resulted in the improvement of various performance measures on the network.To gain more insight into issues affecting customer experience, a probe-based tool was procured and commissionedin the last quarter of the financial year. This tool will give end-to-end visibility of network performance and problemsacross all nodes and handsets. This tool will allow accurate diagnosis and resolution of performance issues on thenetwork.Cost Management and Operational EfficiencyAs the network continues to grow geographically and in complexity, the costs associated with operating andmaintaining the network have grown and we have put in place measures to reduce the growth of operationalcosts. Various initiatives were undertaken to manage the costs associated with running diesel engine generators.Remote site monitoring is also being deployed. This allows interaction with remote devices such as generators onsites and limits truck-rolls, hence fuel consumption and maintenance whilst allowing personnel time to be usedmore effectively allowing greater network availability. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 31
Human CapitalEconet Wireless strives to be an employer of choice by attracting, developing and retaining high calibre staff thatare motivated and focused to achieve our corporate objectives. Our aim is to promote productivity by creating aharmonious and conducive working environment.As part of a global company, our strategy is to recruit people who have the competencies to manage businessesacross different countries and cultures. Our development initiatives are a blend of both local and internationallearning and development programmes.Key HR IssuesOperational efficienciesThe business, in line with international trends, strives to achieve high levels of operational efficiencies. Thisobjective has been achieved through the implementation of various systems, key among them being the EnterpriseResource Planning (ERP-Oracle) which was implemented in 2010.Head count analysisThe business has seen a steady growth in head count since February 2009. The growth is in line with the networkexpansion and development which the business has experienced. However, we have managed to maintain a headcount increase within our targets and within acceptable benchmarks. The table below shows the head countgrowth from February 2009 to 2012.32 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
Employee RelationsThe organization has enjoyed good employee relations with its staff. Our PeEqual OpportunitiesThe organization promotes a working environment where all employees feel valued in order for them to fullycontribute to the success of the business. Career opportunities are based on ability and merit. The businessstrives to ensure that females are accorded equal opportunity as their male counterparts based on ability and ople, O UR COMMmerit.Communication Policy and StructuresEconet Wireless believes it is vital to keep staff informed about issues that affect the Group and themselves. Asa result, the Group has established a range of communication processes that will ensure open and effective two-way communication throughout the Group. UNITYNon-discriminationThe business does not discriminate between its staff or prospective employees on the basis of race, tribe, gender,age, disability, religion, marital status, colour, ethnicity or national origin. The business gives equal opportunity forall.PEOPLE DEVELOPMENT - “Developing leaders with global impact”OverviewOur employee development objective is driven by our Learning Academy’s pay-off line: “Developing leaders withglobal impact”. In line with this objective, we invested $1 million in employee development initiatives during thefinancial year ended 29 February 2012. This investment assisted us to achieve 8,112 participant training days, givingus an average of 10 training days per staff member for the year. This figure is above the international benchmarkof five training days per staff member per year in line with the Chartered Institute of Personnel Development. Wehave also implemented a learning Return on Investment methodology to ensure that we validate the added valueby people development initiatives.Following the stabilization of the economy in 2009, major development activities were focused on internallyfacilitated and less expensive product knowledge training. Our objective from 2011 has been to expose our staffto best practice and this will require aggressive investment into human resources development.Leadership DevelopmentAs the business entered the consolidation stage, the need to sharpen leadership skills across all levels becameimperative. Pursuant to the foregoing, a ten-month Supervisory Management Programme was launched during theyear. A total of 51 supervisors were enrolled. Our focus for the coming year is to continue to sharpen managementand leadership competencies by running targeted management and executive development programmes acrossthe Group.As part of our efforts to create a continuous talent and leadership pipeline from lower levels, 14 graduate learnerswere engaged during the year and underwent intensive training. The graduate traineeship programme is one ofthe interventions aimed at assuring leadership continuity for the Econet Group.We also believe in proactive talent identification and nurturing. We undertake work-related learning programmeswhere we identify high grade students from tertiary educational institutions to undergo on-the-job work-relatedlearning. Thirty-three students were enrolled into the programme for the year. We also believe that the programmeis part of corporate social responsibility as well as contributing to national manpower development. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 33
HUMAN CAPITAL (continued)NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)Organisational Effectiveness, Transformation and ChangeDuring the year, we continued to monitor the local and global environment in order to continuously align ourbusiness to best practice. As part of efforts to ensure business processes optimisation, we started the process ofrealigning our structures in line with the Enhanced Telecom Operations Map (eTOM - a methodology for businessprocess optimization for the telecoms industry). These changes will see an improvement in organisationalefficiencies and customer responsiveness particularly by way of leveraging resources, achieving synergies, andavoiding duplication of efforts.We have also restructured our governance model in order to create more accountability, empowerment,communication and engagement. We now have in place governance bodies at different levels of our organisationalstructure with strict reporting in terms of relevant Key Performance Indicators (KPIs). Governance bodies alsoensure continuous communication and engagement of staff at various levels in order to update them of keydevelopments within the business. The governance bodies also assist in soliciting staff feedback on areas ofimprovement.At Econet, we believe focused customer management will be one of the major determinants of organisationalsuccess. To achieve this objective, we launched phased customer service excellence interventions across thebusiness. To date, we have seen positive results through an improvement in customer service as staff members,particularly customer-facing staff, are now able to respond to customer needs in relatively shorter time-frames.This has resulted in customer retention and consolidation of our market leadership as reflected by our marketshare.Performance managementWe have a robust internally developed performance management system in place, in which we ensure continuousalignment of employee performance and career aspirations with overall business objectives and strategy. Over theyears, we have created a performance culture where fair reward and recognition takes place. As part of efforts tocreate a high performance culture, we provide performance-based long term and short term incentives based onboth individual and company performance.34 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
Safety, Health and Environment1. Our Commitment We are committed to the maintenance of highest standards of Safety, Health and Environmental management in pursuit of business excellence and corporate social responsibility. Our commitment is Our Pe ople, O als COMM Our Financi UR based on our strong belief in the prevention and protection of our human capital, customers, brand and the community from environmental impacts caused by our products, by-products, activities and operations. In order to ensure the fulfillment of this commitment, the business in 2010 adopted and declared a Safety, Health and Environmental Policy consistent with local legislation and international best practice, which is targeted at achieving our corporate objectives. Our Safety, Health and Environmental Policy and Programmes are intended to: • ensure employee wellness and quality of working life; • protect and preserve the ecosystem for the Group’s operations; • improve compliance with legislative and regulatory requirements; UNITY • improve risk management, reduce pollution, minimize waste and ensure energy conservation; and • improve community goodwill and enhance corporate social responsibility objectives.2. Overview of our Safety, Health and Environment Performance The business has seen the steady entrenchment of a safety, health and environment culture through advocacy and training. This initiative has resulted in the integration of safety, health and environment in the planning, design and implementation of projects and activities across the business resulting in improved compliance and performance. The business continues to develop and implement risk management programmes to eradicate and minimise exposures and liabilities. The risk management programme encompasses the following: • Regulatory risks, due to failure to fully comply with safety, health and environmental legislation and regulations, such as environmental pollution through generator emissions; • Infrastructural risks and liabilities; • Gaseous emissions and community noise due to continued dependence on generators for power back-up. The business is currently installing silent generators and is also looking into alternative sources of power such as solar energy; • Contractors risks, liabilities and management. On-going safety, health and environmental training and enforcement of legal responsibilities are being carried out for all contractors; and • Human capital risks and liabilities. Strategic operational interventions have been developed to eliminate and minimise risk and exposures to our human capital, infrastructure, the general public and the community.3. Occupational Safety Performance The business over the years has seen the decline of occupational exposures due to safety, health, environmental and culture entrenchment being consistently implemented in the business in line with policy. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 35
SAFETY, HEALTH AND ENVIRONMENT COMMITMENT (continued) The business continues to implement driver training and reduced travel times through deployment of staff in all strategic centres as part of operational interventions to reduce travel distances. The following safety management programmes were reviewed, strengthened and implemented: • Defensive Central Mechanical and Engineering Department proficiency driving training. A total of 238 staff members were trained in the year under review out of a targeted 253. The target for the next financial year is 300 staff members with most of the training being refresher training; • A total of 120 line managers and supervisory staff members where trained on safety, health and environmental legislation out of a possible 150 in order to ensure effective compliance. The target for the 2012/13 financial year is for the remaining line managers to be trained; • A 100% issuance of adequate and appropriate personal protective clothing and equipment to Projects, Networks and visitors was achieved in the year under review; • Enforcement of statutory requirements and the company safety, health and environmental policy, e.g. statutory inspections of lifting appliances, provision of protective clothing and its use; and • Quarterly risk assessments were carried out to determine risk exposures and provide recommendations to ensure implementation to address and prevent sub-standard conditions and practices.4. Occupational Health Performance (Employee Wellness Programme) The burden of illness has been increasing with a total of 208 out of 1447 staff members reported off sick sometime during the course of the year resulting in 1678.5 days lost. The sickness absenteeism rate stood at 14%. The Econet Employee Wellness Programme (EEWP) initiative was launched. The programme is focusing on the improvement of the quality of working life. Periodic health assessments are performed for drivers, riggers and food handlers in compliance with the law and our employee wellness intervention to enable earlier detection of diseases and for disease management. An Executive Health Risk Assessment programme targeted at the Executive team to assess the burden of and susceptibility to stress and debilitating health factors was initiated. The Executive team went through a regime of health risk assessment and health training which include among others; • Cardiovascular risk assessments; • Early detection of chronic conditions such as cancer, diabetics, and HIV/AIDS; • Cholesterol and body mass index assessments; • Healthy eating and exercise; and • Chronic disease management. Our strategic business aim is to ensure that employees know their health status which enables them to make healthy lifestyle choices for the benefit of the business and themselves. The company remains committed to implementing programmes to ensure minimisation of the impact of the HIV/AIDS pandemic to individuals, their families and the business through the “Live to Love” programme. In ensuring effective delivery of this strategic intervention the “Live to Love” programme was reviewed to also include chronic conditions and cover staff members on short-term contracts.36 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
5. Environmental Performance Our environmental effort and carbon footprint in 2012 covered the following strategic aspects; • The continued safe disposal and recycling of used lead based batteries, oil, scrap metal and copper Our Pe cables. This was achieved through the sale of such wastes to contracted recycling companies in compliance with our policy and environmental obligations. Such recycling companies must comply with the Group’s environmental policy and the Environmental Management Act; ople, O UR COMM • Investing in green energy through the production, sale and use of solar powered products and infrastructure which include solar lanterns, phones and base stations; • The implementation of ozone friendly initiatives in conformance with climatic change requirements on refrigerants for air conditioning equipment and electrical transformers for new projects. The business will be embarking on decommissioning of all non-ozone friendly substances to ensure compliance by 2015; UNITY • The continued engagement and collaboration with competent authorities on safety, health and environment in an effort to ensure voluntary compliance and adherence to best practices; • Continuously carrying out environmental impact assessments for all environmentally sensitive sites especially on national museums and monuments; and • The procurement of equipment compliant with Environmental Management Agency requirements especially low gaseous and noise-emitting generators.6. Compliance review We are committed to continuously improving our legal performance through regular reporting, audits and inspections both internally and by external agencies in our effort to ensure compliance and corporate social responsibility. The business complied with key reporting requirements which included the following; • Bi-annual submissions on environmental considerations as part of business compliance reporting to the Post and Telecommunication Authority of Zimbabwe (POTRAZ); and • Implementation of recommendations made by independent statutory inspectors and other competent authorities. No prosecutions, exhibition notices or fines were received during the year under review. Our safety, health and environmental commitment will be strengthened through collaboration and adherence to advice provided by competent authorities. The following operational legal advice/notices were issued during the year. • The registration of generators (passive emitting appliances) with the Environmental Management Agency through the monitoring of emissions using multigas meters; • The procurement and installation of self-bunded fire resistant fuel tanks on base stations in compliance with requirements of the Fire Departments; and • The procurement, licensing and use of specialist re-fueling tankers in compliance with regulatory authorities such as the Environmental Management Agency. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 37
SAFETY, HEALTH AND ENVIRONMENT COMMITMENT (continued)7. Strategic focus for 2013 The following strategic intervention will be implemented in order to ensure the effective development of safety, health and environmental culture in the business; • Continued formal training on safety, health and environment as part of our SHE culture entrenchment programme as well as consistently implementing and promoting our policy; • Making sure SHE issues are continuously highlighted on the strategic agenda; • Delegation of safety, health and environmental legal responsibilities across the business through review and inclusion into job descriptions of all staff members, especially for line managers; • The full implementation of the health risk assessments (HRA) of all staff members in the 2012/13 financial year as part of Econet Employees Wellness Programme (EEWP); • The regularisation of all outstanding compliance issues and implementation of voluntary compliance initiatives particularly monitoring and registration of generators and fuel tanks; • Training of staff members and all contractors on safety, health and environment to ensure legal awareness; and • The installation of equipment and power sources that reduce our carbon footprint.38 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012
Enterprise Risk ManagementThe risk management department is headed by the Chief Risk Officer who reports directly to the Audit CommitteeChairman and to the Chief Executive Officer. The risk management process is integrated within the day-to-dayactivities of Econet Wireless Zimbabwe. The Group has developed a system of risk management and internal Our Pecontrol that delivers:• A demonstrable system of risk management; ople, O UR COMM• A commitment by management to the process;• A demonstrable system of risk mitigation activities and documented risk communication strategies;• A documented system of internal control and risk management; and• An alignment of assurance efforts to the risk profile.The risk department is comprised of five independent and objective units in the area of Fraud and RevenueAssurance, Internal Audit, Information Security, Corporate Risk and Safety, Health and Environment. Regular UNITYreporting of risks to the Board helps the Board in fulfilling its risk management responsibilities.Econet’s risk appetite differs from project to project and is governed by a risk retention policy. The process ofrisk management in the Group is guided by a risk framework which is based on best practice risk managementprocedures. The Directors have the responsibility of ensuring that adequate risk management processes areimplemented in all areas of the business in line with the risk framework.The Group has an enterprise business risk register and has a matrix approach to evaluating and profiling risk issues.This approach requires a rating of the probability and likelihood of the risk occurring and measuring the potentialimpact on the business of the risk events. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 39
Life Changing ConnectivityCORPORATE SOCIAL INVESTMENTEconet believes its future depends on the sustainable development of our communities. We remain firm inour belief that a company’s success cannot be measured on financial performance alone. We believe the truemeasure of a successful company is its ability to positively transform its communities.
Corporate Social InvestmentAs part of our ‘Changing your life’ social responsibility commitment, Econet has established The Higher LifeFoundation, which manages three Trusts under the leadership of the Executive Chairperson. Our Pe• Capernaum Trust for orphaned and disadvantaged children;• Joshua Nkomo Scholarship Fund for academically gifted Zimbabwean students;• National Healthcare Trust Zimbabwe for promoting a healthy Zimbabwe; ople, O UR COMMEach of these Trusts is, in its own way, changing the lives of Zimbabweans.Capernaum Trust (established 1996)Capernaum Trust’s vision is to transform orphaned children into “History Makers” with a leadership orientedmindset for global impact. With over 41 000 “History Makers” on the programme, Capernaum Trust is raisingyoung leaders in order to transform the continent of Africa. The Trust has a holistic approach to the care of the UNITYchildren, with visits being done on a regular basis. Through a project known as “Know your Flock,” CapernaumTrust ensures each child is known by name and that no child is simply a statistic.During the year the Trust embarked on an exciting and innovative project of establishing 15 state of the art resourcecentres and libraries in selected schools across Zimbabwe. These centres are equipped with computers, internetand e-learning facilities. Through the use of technology, children who previously had no access to educationalopportunities are now able to access learning facilities. The use of technological interventions in improving thelearning environment has resulted in an increase in the ‘O’ level examinations pass rate by 17% in the past year.Joshua Nkomo Scholarship Fund (JNSF) (established 2005)The Joshua Nkomo Scholarship Fund is supporting 500 academically talented students on a full scholarship basis.In addition, these students are equipped with leadership skills and career guidance. The vision of JNSF is topromote and equip students who demonstrate high academic excellence and community involvement to helpthem transform their communities and the nation.Scholarships are awarded to students drawn from all provinces based on their record of high academic excellenceand community leadership. Leadership and mentoring courses are held to equip the students with life skills. In linewith the Econet ethos of giving back to the community, the students are actively involved in various communityengagement projects such as donating cash and in kind to orphanages out of their own resources and holdingcareer guidance at schools that would ordinarily not have access to career guidance. The Trust will continue tofocus on increasing the scope of its community engagement projects.During the year, 480 children were under the scholarship programme, up from 373 in the previous year. To date wehave over 30 ‘Joshualites’ in Ivy League American colleges which include Yale, Harvard, Massachusetts Instituteof Technology, Columbia and University of Pennsylvania, amongst others. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 41
Life Changing ConnectivityCAPERNAUM TRUSTThe Trust continued its work to offer hope and inspiration to orphaned children. Beyond material support, theTrust empowers beneficiaries with life-changing skills and activities designed to restore their self-esteem andgroom them into “history makers”.
Life Changing Connectivity THE JOSHUA NKOMO SCHOLARSHIP FUNDThe Trust was established to develop inspiring leaders and community builders through the provision ofcomprehensive, nation-wide educational scholarship to academically-gifted students from the ten provinces of Zimbabwe. To date, over 500 students have benefited from this life changing leadership program.
Life Changing ConnectivityNATIONAL HEALTHCARE TRUST ZIMBABWEThe Trust continued in its proactive and sustained strategy for the rehabilitation and long-term transformationof Zimbabwe’s health sector. The Trust builds and maintains capacity within the health sector through trainingand reequipping our public healthcare institutions.
National Health Care Trust Zimbabwe (established 2008)The objective of the National Healthcare Trust Zimbabwe is to be the “Partner of choice” in all programmesaimed at responding to national healthcare crisis, such as cholera and typhoid, as well as building and maintainingcapacity in the national healthcare delivery system. Over the last three years, the Trust engaged in widespreadactivities beneficial to the nation at large. Our PeActivities of TrustThe Trust is dynamic and each year, it plans and executes its programmes according to the demands of the healthdelivery sector. The programmes executed included the following: ople, O UR COMMResponding to national outbreaks The Trust responded to the following outbreaks; measles, typhoid, diarrheal outbreaks and swine flu(H1NI). Theresponse was through the procurement of drugs, equipment for use in clinics, logistical support, human resourcesmobilization and raising awareness.Human Resources Development UNITYIn the year under review, 250 medical students were assisted with school fees. Voluntary Health Workers andEnvironmental Health Technicians were trained and equipped with bicycles and motor bikes in order to improvetheir effectiveness in the various communities they operate in.The Trust invested in a virtual learning hall at the University of Zimbabwe. This hall will give the medical studentsaccess to world class lectures through the use of technology.Infrastructure Improvements 24 primary healthcare centres have been refurbished and equipped with maternity beds and autoclaves.Water sanitation and waste managementTo improve access to clean water, five boreholes were drilled and eleven were rehabilitated. Twenty two doubleventilated pit latrines were constructed and thirty two incinerators were installed at various health centres.Outreaches/free clinics Outreaches were held with various implementation partners such as Celebration Health, Christian MedicalFellowship of Zimbabwe, Zimbabwe Medical Association and the Anglican Church. A total of seven thousandpeople accessed medical health care from these outreaches.Emergency Operations CentreThe Trust procured and fitted information technology and audio visual equipment and obtained internet connectivityfor the Emergency Operations Centre. This contribution will improve the surveillance and control of diseaseoutbreaks. ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 45
From humble roots, Econet today is one of the largest companies on the Zimbabwe Stock Exchange. Throughour pioneering innovation, we are inspiring budding entrepreneurs and large companies to fulfil their owndreams. With our integrated range of product and services, Econet provides innovative business solutions toevery business model, from the growing home industry to the conglomerate.2012 Consolidated Financial Statements47 Director’s Statement of Responsibility48 Certificate by Company Secretary49 Independent Auditor’s Report50 Consolidated Statements of Financial Position51 Consolidated Statements of Comprehensive Income52 Consolidated Statements of Changes in Equity53 Consolidated Statements of Cash Flows54 Notes to the Consolidated Financial Statements118 Supplementary Information Detachable Proxy Form for Annual General Meeting
Directors’ Responsibility For Financial ReportingThe Board of Directors is responsible for the accurate presentation of the financial statements and relatedinformation. The Board is satisfied with the integrity of the information provided. The Group’s independentexternal auditors, Messrs Ernst & Young, have audited the financial statements and their report appears on page Our Financi als49 of this annual report.The Directors’ responsibility includes maintaining the systems of internal control. The systems seek to providereasonable assurance as to the accuracy and reliability of the financial systems as well as safeguard and maintainaccountability over the Group’s assets.The Directors have reviewed the performance and financial position of the Group up to the point of signing of thefinancial statements and are satisfied that it is a true reflection of the Group’s position. They have also assessedthe Group’s budgets and are satisfied that the Group will continue as a going concern.The financial statements set out on pages 50 to 117 were approved by the Board of Directors on 20 April 2012 andsigned on its behalf by:T. Nyambirai D. Mboweni K. V. ChirairoCHAIRMAN OF THE BOARD CHIEF EXECUTIVE OFFICER FINANCIAL DIRECTOR20 April 2012 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012 47
Certificate by Company Secretary In my capacity as Group Company Secretary, I confirm that, in terms of the Companies Act (Chapter 24:03), the Group has lodged with the Registrar of Companies, the returns required under the Act and the returns are true and correct. C. A. Banda GROUP COMPANY SECRETARY 20 April 201248 ECONET WIRELESS ZIMBABWE LIMITED | Integrated Annual Report 2012