Econet AR 2011

experience a whole
new world
Behold I make all things new

Revelations 21 v 5 (KJV)
Experience a whole new world

A world of endless possibilities. This is a world where data, voice and video coverage serve our needs. different but often concurrent communication
Econet Wireless Zimbabwe Limited Annual Report 2010
Contents
experience a whole new world
Financial Highlights Organisational Vision Board of Directors Econet Corporate Profile Chairman's Statement to the Shareholders Chief Executive Officers Operations Review Corporate Social Investment Directors Report
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12
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Directors Responsibility for Financial Reporting Corporate Governance Financial Statements Detachable Proxy Form for Annual General Meeting Supplementary Information
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Econetworld. A strong brand to drive our data offering.

features.
www.econetworld.co.zw
Econetworld comes to life as the data portal offering the latest
GPRS EDGE 3G 4G
news, music, sports and entertainment among many exciting
Financial Highlights
TRADING RESULTS
SUMMARY (US$)
2010
Total Revenue - Cellular network operations - Other services Earnings before interest, taxation, depreciation, impairment and amortisation Profit before taxation Profit attributable to shareholders Cash generated from operations Capital expenditure Share Performance Basic earnings per share (US$) Basic diluted earnings per share (US$) Market price per share 28 February 2010 (US cents) Number of shares in issue at 28 February 2010 Market capitalisation at 28 February 2010 (US$) Ratios Return on shareholders' equity Shareholders' equity Debt to shareholders' equity
347 092 651 15 684 321 179 285 617 148 122 147 113 209 756 129 909 998 160 148 716 0.66 0.66 485 163 786 300 794 363 555 89% 165 485 596 75%
subscribers 3 500 000

Connected Capacity
Subscribers (thousands)
1 200
3 500
250
450
640
654
2005
2006
2007
2008
2009
2010
We have delivered a solid performance due to our significant investment in network equipment. The frontiers of communication have been expanded. Everyone, everywhere, now connected. A new world has been created. Over 3.5 million people are now talking.
Organisational Vision
Our Vision To provide telecommunications to all the people of Zimbabwe. Our Mission To serve Zimbabwe by pioneering, developing and sustaining reliable,
world-class standards and ethics.

OUR VALUES The values we hold in common are: Pioneering
efficient and high-quality telecommunications of uncompromising
field. To remain the leader in the field, we shall relentlessly pursue innovative solutions and constantly grow our knowledge base, with an uncompromising passion for excellence. Professionalism
We are a company committed to finding the best way forward in the fast moving and highly competitive technology
In 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 all levels, we will carry out our duties skillfully and diligently. Personal
Each one is an intrinsically valuable member of the organisation, irrespective of their gender, race or position. We will
Internally we will always remember that we are a company made up of individuals. These people are the Company.
always show concern for each other in an atmosphere that is open and stimulates personal development, job satisfaction and a sense of responsibility. We believe in working in teams, in effective and confident co-operation, in environments where honesty, praise, constructive criticism and fair reward have their place.
Who we are inside the Company shall reflect who we are externally. Our relationship with our customers will enthuse that makes them true stakeholders in Econet Wireless.
with warmth and a genuine desire to meet their needs. We will reach out to customers in a holistic and organic way
The business will continue innovating to meet the evolving needs of our customers; hence the investment in new technologies such as GPRS, 3G, Wi-Fi and Wi-Max. With our inspired brands, we foresee a bright future. We are moving ahead with renewed vigour and refreshed confidence, to open new frontiers of communication.
With the introduction of 3G, we have entered a new world of communication, where the mobile phone has now become more than just a tool for communication. It has become a gateway for the transmission of essential, possibly life-saving information.
Board of Directors
As at 28 February 2010
T. Nyambirai Chairman
S. T. Masiyiwa Executive
C. Fitzgerald Non-Executive
T.P. Mpofu (Mrs) Non-Executive
D. Mboweni Chief Executive Officer
J. G. B. Pattison Executive
P.J. Campbell Non-Executive
J. Myers Non-Executive
K.V. Chirairo Finance Director
A. N. H. Eastwood Non-Executive
Econet Corporate Profile

ECONET WIRELESS ZIMBABWE LIMITED internet access and transaction processing services. EWZL, which is listed on the Zimbabwe Stock Exchange (ZSE), is Zimbabwe's Econet Wireless Zimbabwe Limited (EWZL) is the holding company of businesses involved in cellular operations, provision of
employs in excess of 1 500 staff. SUBSIDIARIES
leading technology company. It is one of the largest quoted companies in terms of market capitalisation, and directly and indirectly
Econet Wireless (Private) Limited Econet Wireless (Private) Limited is EWZL's cellular network operator, with a subscriber base of 3 500 000 as at 28 February 2010. EW Capital Holdings (Private) Limited EW Capital Holdings (Private) Limited is EWZL's investment vehicle through which the Group holds a variety of investments,
carefully selected with the twin objectives of growing earnings and preserving value for shareholders.
(inclusive of a 6% shareholding in the form of convertible instruments).
Pentamed Investments (Private) Limited EWZL through wholly owned Pentamed Investments (Private) Limited, holds 69% of Mutare Bottling Company (Private) Limited
Zimbabwe.
customers. It has a presence in all major cities and towns and has embarked on an extensive fibre optic project throughout
Data Control and Systems (1996) (Private) Limited T/A Ecoweb Ecoweb is an internet service provider in Zimbabwe, offering broadband and dial-up services to both corporate and individual
one of the world's leading manufacturers of smart card-based point-of-sale systems.
institutions and telecommunications operators access to cutting edge technology to enhance customer service, in partnership with
convergence of banking, information technology and telecommunications. The company provides local and international financial
Transaction Payment Solutions (Private) Limited The company is a leading provider of financial transaction switching, point of sale and value-added services, that exploit the
We have delivered solid performance as a result of our strong brands. The launch of econetworld has enriched the user experience and created a whole new world of endless possibilities.
Chairmans Statement to the Shareholders

INTRODUCTION The Econet brand is synonymous with innovation, perseverance and a relentless pursuit of excellence. Econet Wireless aims to remain the undisputed leader in the telecommunications market in Zimbabwe. The increase from 1.2 million to the current 4 million subscribers is a firm testimony of that intent. located in Bulawayo and the other two in Harare. Close to 200 base stations were commissioned during the same period. Although the network upgrade resulted in service disruptions, this exercise was necessary to improve network quality and performance. Econet has now established itself as the network with the widest coverage as illustrated by the coverage map below (diagram 2).
INVESTMENT REVIEW In the financial year ended 28 February 2010 equipment worth US$ 160.1 million was purchased. The planned investment of US$ 300 million in the next financial year, is a clear demonstration of the strong belief by the business in the future prospects of the Zimbabwean economy. The value added statement for the financial year ended 28 February 2010 is reflected below (diagram 1).
Telecommunications is a key contributor to economic development because it provides more efficient and effective access to information, business partnerships and markets. The country's mobile penetration rate improved from below 15% to about 40% largely as a result of Econet's investment in network equipment.
Diagram 1 VALUE ADDED STATEMENT

13%
OPERATIONS REVIEW Econet's switching capacity increased with the commissioning of two more switch centres during the financial year ended 28 February 2010. The business now has three switch centres; one is
2%
Econet launched a state of the art highly integrated Call Centre Of the total value added for the financial year solution. The equipment is capable ended 28 February 2010 of US$ 362.8 CHAIRMAN OF THE BOARD of offering multimedia options to million, over U$ 63.3 million, representing access the call centre i.e. telephone, email, SMS, faxing and 17% of the value added was distributed to the Government in the internet for Econet's customers convenience. Customer care form of various taxes and levies. US$ 244.5 million, which personnel are being trained in key service competences in order represents 68% of the value created was reinvested in the to improve the service excellence. business to fund long term assets and working capital expenditure. 13% was paid back to the providers of finance by Econet was recognized as a leading telecommunications way of capital and interest repayments as well as dividends. The operator in Africa by being awarded the prize for The Best Voice business invested US$ 7.0 million in various social investment Operator in Southern and Eastern Africa by Africa Telecom People programmes, representing 2% of the value added. Arguably, this Awards of France. In the same period Otherways Management is the largest social investment spend by any corporate entity in Consultants of France awarded the business the Global Award for Zimbabwe. Perfection, Quality and Ideal Performance.
Data services through GPRS and EDGE were extended to all areas where Econet has coverage. 3G capacity, which was initially restricted to Harare, is being deployed to all other major cities, resort towns and the main ports of entry. The business expects the additional capacity to be commissioned before the commencement of the FIFA 2010 Soccer World Cup which is being hosted by South Africa in June/July 2010.
TAWANDA NYAMBIRAI
FINANCIAL PERFORMANCE The Group's performance includes the results of its subsidiary companies. The Group's operating subsidiaries are Mutare
17%
Diagram 2 COVERAGE MAP FOR EXISTING NETWORK FEBRUARY 2010
68%
GPRS, EDGE & GSM NATIONAL COVERAGE 3G COVERAGE
(WHEN OUT OF 3G COVERAGE YOU WILL STILL BE COVERED VIA GPRS)
Paid to providers of Finance
Value invested in social programmes
Invested in funding long-term assets and working capital Paid to Government
10
Highlights
Subscribers
Investment
*4.0 Million
CAPEX/EBITDA
FINANCIAL REPORTING The Group changed its functional currency from the Zimbabwe Dollar to the United States Dollar with effect from 1 January 2009.
Revenue for the year ended 28 February 2010 was US$ 362.8 million. This revenue performance was achieved as a result of the significant investment in network infrastructure. This investment enabled the business to increase the subscriber base by 233% from 1.2 million subscribers to the current 4 million subscribers. The Group achieved an EBITDA of US$ 179.3 million, a margin of 49% of revenue. The network investment resulted in the statement of financial position totals increasing by 116% to US$ 392.7 million as at 28 February 2010.
Bottling Company (Private) Limited which is in the beverages sector; Transaction Payment Solutions (Private) Limited which provides electronic payment solutions and Data Control and Systems (1996) (Private) Limited t/a Ecoweb, an internet access provider.
* Subscribers as at 31 March 2010
89%
Basic earnings per share Total dividend per share
US$ 160.1 million
in long term assets
Revenue
US$ 362.8 million
US$ 0.66
US$ 0.14
CORPORATE SOCIAL INVESTMENT In line with the Group's broad corporate social investment policy, the Group continued to play a significant role in the community through its social investment vehicles.
Having considered the recommendations of the Zimbabwe Stock Exchange, the Zimbabwe Accounting Practices Board and the Public Accountants and Auditors Board, the Group has opted not to show certain comparative information. The audit opinion on the Group's financial statements is modified in respect of the non-disclosure of this comparative information.
OUTLOOK The network expansion drive continues to be the main focus of the business in order to increase subscriber capacity and network quality. To meet the needs of increasingly complex financial reporting and risk management requirements, the Group has commenced the implementation of Oracle Financials, a best of breed Enterprise Resource Planning system that is used extensively by telecommunications operators. The Group will also commission a new fraud and revenue assurance system during the upcoming financial year in order to improve revenue assurance.
Over 50 000 economically disadvantaged students have been assisted through the Group's Corporate Social Investment initiatives to attain educational qualifications at pre-tertiary level. During the period under review two students, who were exposed to the International Baccalaureate programme, were awarded scholarships to study at Harvard University. The Group assisted with funding which resulted in opening of the University of Zimbabwe Medical School. As a result, 275 students were able to progress with their studies. The Group's scholarship fund continues to assist over 360 students with impeccable academic credentials by funding their tertiary education.
APPRECIATION I would like to extend my sincere appreciation to our customers for their loyalty and for bearing with us during the network upgrade. I would like also to extend my appreciation to all our business partners and various stakeholders who have assisted us in achieving this performance. I applaud management and staff for the sterling work they have done during the financial year just ended. To the Board, I extend my gratitude for the vision and insight that has resulted in the growth of the business.
T. Nyambirai CHAIRMAN OF THE BOARD 28 May 2010
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Chief Executive Officers Operations Review

INTRODUCTION Mobile telephones have created many The increase in switching capacity improved the competitive number of base stations has and the installation of a significant OPERATIONS REVIEW
areas. It is in these previously unreached the greatest social and economic impact. It is the intention of the Group to extend its from access to telecommunications. communities that mobile telephony will have
expensive to deploy over large geographical
where fixed line technology was too
people especially in developing countries
This has transformed the lives of many
innovations that were otherwise not possible.
coverage to allow more people to benefit
significant investment in infrastructure.
during the year under review is a result of this
2010. The financial performance achieved
mobile market to 73% as at 28 February
million subscribers and its share of the
increase its subscriber base to about 3.5
Wireless Global enabled the business to
A facility of US$ 93.9 million from Econet
embarked on is unprecedented in Zimbabwe.
The level of investment that the Group has
minimize service disruptions electrical power. resulting from the unavailability of FINANCIAL HIGHLIGHTS
deployment strategy which will
implementing a generator
The business is in the process of
operational efficiency and reliability.
the next financial year, will increase
network, which will be executed in
anticipate that optimisation of the
market leadership position. We
as the business consolidates its
experienced will continue unabated
station infrastructure that has been
rapid pace of deployment of base
advantage of the business. The
negotiated. These additional funds will result in the expansion of the existing capacity and the improvement of the quality of the network.
New loan facilities are in the process of being
DOUGLAS MBOWENI
CHIEF EXECUTIVE OFFICER
million and the Earnings before, Impairment and Armortisation Interest, Tax, Depreciation,
28 February 2010 was US$362.8
Revenue for the 12 months ended
The level of investment that the Group has embarked on is unprecedented in Zimbabwe. A facility of US$ 93.9 million
quality earnings profile.
Most of the Group's earnings are cash earnings, reflecting a high
347.1 million, representing 96% of the overall Group revenues.
of profitability was the mobile business which contributed US$
earnings per share for the period was US$0.66. The largest driver
were US$ 179.3 million, a margin of 49%. The Group's basic
from Econet Wireless Global enabled the about 3.5 million subscribers and its share of the mobile market to 73% as at 28 February
business to increase its subscriber base to
region.
businesses and is not dissimilar to other network operators in the
reflective of the level of leverage required to fund mobile
reinvested in the business. The debt to equity ratio of 75% is
million. Most of the internally generated cash flows were
Net cash generated from operating activities was US$ 106.9
2010. The financial performance achieved during the year under review is a result of this significant investment in infrastructure.
lending at lower risk adjusted rates of interest.
with debt providers and its shareholding structure to facilitate
The Group has been able to leverage on established relationships
for the period relative to net debt were less than 6% per annum.
margin. This reflects a high interest cover. Average interest costs
before, Interest, Tax, Depreciation, Impairment and Armortisation
Interest costs at US$ 4.9 million, represented 2.7% of the Earnings
12
INNOVATIONS
of fibre technology to improve quality and reliability of the network. INTERNAL TRANSFORMATION
broadband to Zimbabwe in a cost effective and efficient manner. The base station configurations will also take advantage of the availability
network roll out project that will result, ultimately, in a connection to the undersea cable. This will bring the benefits of high speed
The introduction of mobile and fixed broadband services remains an area of strategic focus for the business. The Group embarked on a fibre
will enhance the Group's ability to leverage the value of its people and systems to enhance profitability as the business continues to grow. DISTRIBUTION
deliver appropriate shareholder return. The planned investment in revenue and fraud assurance as well as enterprise risk planning systems
The rapid growth that the business has experienced needs to be well managed in order to ensure effective utilization of resources and to
increasing the number of retail outlets selling airtime. OUTLOOK
effective and efficient airtime distribution. The company has also strengthened its relationship with key strategic partners thereby
the business deployed point-of-sale terminals in partnership with Transaction Processing Solutions (Private) Limited in order to achieve cost
Econet increased its distribution and retail presence through the opening of new shops in Gweru, Chitungwiza and Chinhoyi. In addition,
customers and build strong brand loyalty.
Zimbabwe. The Group will continue to invest and focus on product development and service innovation to continue to excite our
is a key strategic imperative. With a mobile penetration rate of 40%, there is still significant demand for communication services in
The improvement of the customer service experience, through staff training, information systems enablement and more efficient processes
D. Mboweni 28 May 2010
Chief Executive Officer
13
Corporate Social Investment
THE JOSHUA NKOMO SCHOLARSHIP FUND continues to fund the nations most gifted students.
14
We remain firm in our belief that a company's success cannot be measured on financial performance alone. Our success also lies in the positive transformation of our communities. We believe that every business has a responsibility beyond its basic responsibility to its shareholders; it is a responsibility to the people of the communities in which it serves. As a pioneering company, we are moving beyond corporate social responsibility to social innovation. Econet believes that technology that does not transform lives is irrelevant. We must provide a service that contributes meaningfully to the improvement of the lives of members of the communities that we serve. Our social role is therefore constantly being reviewed in order to remain relevant to our communities. National Healthcare Trust Zimbabwe (NHTZ) In 2008, our social responsibility role took on a more direct and urgent role. Under our health and welfare programme, Econet provided financial and logistical support to teams of dedicated health workers that were involved in fighting the cholera epidemic that affected the country during the latter part of 2008. We employed our wide airtime distribution network to spread awareness by printing anti-cholera messages on our recharge cards. Our involvement in fighting the cholera crisis opened our eyes to the urgent need to make our intervention in health care more focused. Econet therefore established the National Healthcare Trust Zimbabwe in December 2008. The Trust's immediate task was the procurement of essential medicines and equipment needed for delivery of basic healthcare services, and the provision of key support in the areas of communication. Rather than merely reacting to crisis, the Trust will implement a more proactive and sustained strategy for the rehabilitation and long-term maintenance of Zimbabwe's health sector. The Trust seeks to build and maintain capacity within the health sector in Zimbabwe.
Environment During the year, Econet also came up with a comprehensive Environmental and Waste Management Policy. Econet believes environmental awareness is now more than just a factor of social responsibility, but rather a business imperative. Joshua Nkomo Scholarship Fund The Joshua Nkomo Scholarship Fund continued with its valuable work in the provision of funding to the nation's most gifted students. There was fresh focus on supporting maths and science students as part of the Group's contribution to the development of technology in Zimbabwe. The Capernaum Trust The Capernaum Trust was established in 1996 to transform the lives of orphaned children in economically disadvantaged situations. The Trust continued its work to offer hope and inspiration to orphaned children. In the face of greater demand for welfare intervention, the Trust's work continued in the provision of scholarships, food packs and life skills training to over 26 000 orphans nationwide. Our involvement goes beyond the provision of material support, as the trust runs a deliberate and planned programme designed to empower beneficiaries with life skills and activities to restore their self-esteem and groom them into inspired leaders. HIV/AIDS POLICY Econet is convinced that HIV and AIDS have the potential to waste valuable trained human resources and reduce productivity. We continue to recognise the huge impact of HIV and AIDS on the wellbeing of our employees. This includes their welfare outside the workplace, where staff face the burden of committing effort and resources to care and provide for family members. Policies and structures therefore continue to be followed to address this concern. Econet Wireless continues to provide anti-retroviral drugs for the infected employee and other members of their immediate family. Through the Live 2 Love programme, the Company continued to encourage open dialogue among staff on HIV/AIDS. By encouraging open debate on HIV and AIDS, we help remove the stigma attached to HIV and AIDS and increase access to critical information on the pandemic.
15
Directors Report
The directors have pleasure in presenting their twelfth Annual Report and the Audited Financial Statements of Econet Wireless Zimbabwe Limited and its subsidiaries for the year ended 28 February 2010. In the report Group refers to Econet Wireless Zimbabwe Limited and its subsidiary companies.
Change of name of Company Following the approval by members at the Annual General Meeting held on 30 September 2009 and subsequent approval by the Registrar of Companies, the Company changed its name from Econet Wireless Holdings Limited to Econet Wireless Zimbabwe Limited. The change was with effect from 21 January 2010. Principal Activities The Group's principal activities remained the same during the year, that is, the provision of cellular services, provision of internet access services, transaction processing services and mobile banking services.
Consolidated Results The Group's financial results and its activities during the year are adequately covered in the statements of the Chairman and the Chief Executive Officer.
The Group also retained its investments in its subsidiaries companies, however, there were some changes in the level of investments in some of the entities. Where appropriate it also continued to oversee the management of these companies.
Dividends An interim dividend of US$0.08 per share for the half-year ended 31 August 2009 was declared by the board at its meeting held on 23 September 2009. Shareholders were given the option of either receiving their interim dividend in cash or in the form of additional shares. The final dividend of US$0.06 will be paid in cash.
Share Capital The authorised share capital of the Group remained unchanged during the year. The issued share capital changed following the scrip dividend and the share buy-backs and now stands at 163 786 300 shares made up of 73 069 615 Class A shares and 90 716 685 ordinary shares. Reserves The movements in the reserves of the Group are shown in the Statement of Changes in Equity.
Directors Messers D Mboweni and K V Chirairo will retire by rotation at the Group's Annual General Meeting and, being eligible, will offer themselves for re-election. Dr J Myers was appointed to the board on 27 May 2009. His appointment was confirmed at the Annual General Meeting held on 28 September 2009. Mr A H N Eastwood has expressed his wish to retire from the Board. He will not be standing for re-election at the next Annual General Meeting. The Board wishes to express its deep appreciation to Mr A H N Eastwood for the long and valuable contribution he has made to the Company since his appointment to the Board in January 2001. At the Annual General Meeting shareholders will be asked to approve payment of the directors' fees and the re-appointment of Directors.
Funding requirements The Group increased its interest bearing debt during the current financial year in order to finance its network expansion. Details of the Group's borrowings are disclosed in note 28 of the financial statements. Borrowing Powers The details of the Group's borrowing powers are set out in Note 35 to the financial statements.
Interest of Directors Details of the interest of the directors in the ordinary shares of the company are detailed in note 24.5 of the financial statements.
Capital commitments Details of the Groups capital commitments are set out in note 36 of the financial statements.
Pension Fund The Group's pension fund 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. The assets and funds of the scheme are administered in accordance with the rules of the pension fund. Corporate Social Investment Commitment to the economic and social development of the country remained firmly in place during the year. The commitment finds its roots in the Group's own commitment to Christian values and the Group's wish to uphold and improve the quality of life of the people of Zimbabwe. The Group's Econet in the Community programme saw it continuing with its social investment initiatives in education, environmental matters, health and social welfare and religious organisations.
Auditors Shareholders will be asked to approve the remuneration of the auditors for the year ended 28 February 2010.
Donations to Political Parties The Group does not , as a matter of policy, contribute to any political party.
By order of the Board
Deloitte & Touche stepped down as the Group's auditors with effect from 30 October 2009, after having served the Group for ten years. Ernst & Young were duly appointed as the Group's auditors with effect from the same date.
28 May 2010
T Nyambirai CHAIRMAN OF THE BOARD
D. Mboweni CHIEF EXECUTIVE OFFICER
C A Banda GROUP COMPANY SECRETARY
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Directors Responsibility For Financial Reporting

Econet Wireless Zimbabwe Limited ('the Group') and the companys abridged annual financial statements. The directors are responsible for the preparation, integrity and fair presentation of the consolidated annual financial statements of
and 26.
were valid and appropriate. The report of the auditors on the consolidated annual financial statements is presented on pages 25
and committees of the board. The directors believe that all representations made to the independent auditors during their audit
unrestricted access to all financial records and related data, including minutes of meetings of shareholders, the board of directors
The consolidated annual financial statements have been audited by the independent auditing firm Ernst & Young which was given
the company will not be a going concern in the foreseeable future based on forecasts and available cash resources.
basis has been adopted in preparing these annual financial statements. The directors have no reason to believe that the Group nor
application of these accounting policies is supported by reasonable and prudent judgements and estimates. The going concern
policies which have been consistently applied, as modified, where necessary, by the impact of new and revised standards. The
accordance with the disclosure requirements of the Companies Act (Chapter 24:03). They are based on appropriate accounting
disclosed in these financial statements for the reasons stated in note B1.2. The financial statements have been prepared in
the exception that certain comparative information required by IAS 1 (Presentation of Financial Statements) has not been
prepared using International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board with
The consolidated annual financial statements for the year ended 28 February 2010 presented from page 27 to 61 have been
material breakdowns and implement timely corrective action .
employees with the necessary segregation of authority and duties. Processes are in place to monitor internal controls to identify
safeguard, verify and maintain accountability of assets. These controls are monitored throughout the group by management and
absolute assurance as to the reliability of the consolidated and company abridged annual financial statements and to adequately
The directors are also responsible for the Group's system of internal controls. These are designed to provide reasonable, but not
The consolidated annual financial statements were approved by the board of directors on 28 May 2010.
28 May 2010
K.V. Chirairo FINANCIAL DIRECTOR
17
Corporate Governance
and financial reporting. Transparency, responsibility and accountability as set out in the Principles for Corporate Governance in The Group and its subsidiaries have continued to embrace the principles of good corporate governance in their business operations
Directors of Zimbabwe.
part and parcel of the Group's culture and way of doing business. The Group also retained its membership of the Institute of
Zimbabwe: Manual of Best Practice, the Cadbury Report of the United Kingdom and the King Reports of South Africa remained
THE BOARD OF DIRECTORS Composition and appointment The Board membership stood at 10 during the year, consisting of 4 executive and 6 non-executive directors, with a wide range of business and industry expertise. A non-executive director chairs the Group's Board. Appointment of the non-executive directors is on the basis of their skills and experience or expertise in their respective fields, the
Association.
election by shareholders. All directors retire by rotation and stand for re-election as provided for in the Company's Articles of
ultimate objective being to have in place a variety of skills and experience on the Board. The non-executive directors are subject to
Accountability and delegated functions The Board of Directors is accountable for the Group's welfare and general outlook and assumes overall responsibility for the Group's and has responsibility for the following specific areas:
prosperity and in the process, uphold the interests of the Group's shareholders and stakeholders. The Board formulates key policies review and approval of the Group's strategic business plans, incorporating operating and capital expenditure budgets; setting of corporate objectives and performance targets; review and approval of major acquisitions and disposals; reviewing the share capital of the Group and subsidiaries and recommending alteration thereof; reviewing annual financial statements and significant changes in accounting policies; and monitoring and reviewing the Group's overall performance.
strategic development. It provides leadership and sound judgement in directing the Group to achieve its objectives and sustainable
subsidiary companies. It reviews and ratifies the appointment of directors to the boards of its subsidiary companies.
In the execution of its responsibilities the Board delegates certain specific responsibilities to various committees and the boards of
Rights To facilitate the exercise of their responsibilities all directors have unrestricted access to management, including the Group authority, where necessary, to seek independent professional advice at the Group's expense. Company Secretary, and to the Group's records and other information as and when they so require. The directors also have
Directors' names The following are the directors who served during the year: Mr T Nyambirai (Chairman), Mr S T Masiyiwa, Mr P J Campbell, Mr R Chidembo (resigned 27 May 2009), Mr K V Chirairo, Mr A H N Myers (appointed 27 May 2009). Eastwood, Mr C Fitzgerald, Mr D Mboweni, Mrs T P Mpofu, Mr J G B Pattison, Mr Z M T Wazara (resigned 27 May 2009) and Dr J
Directors' interests As is the practice, directors are required each year to indicate in writing whether they have any material interest in any contract of contract of significance to which the Group was a party during the year, other than their service contracts. disclose their other business interests. With the exception of Mr T Nyambirai, none of the directors had a material interest in any
significance with the Company or any of its subsidiaries, which could give rise to a conflict of interest. Directors are also required to
established a business relationship with TN Bank Limited which is a subsidiary of TN Holdings Limited. Details of related party transactions are disclosed in note 30.
partner in Mtetwa and Nyambirai Legal Practitioners, a firm that provides legal services to the Group. During the year the Group
Mr Nyambirai is the Group Chief Executive Officer of TN Holdings Limited, which is one of the Group's financial advisors. He is also a
18
The Group Company Secretary All directors have access to the advice and services of the Group Company Secretary. Directors' remuneration The remuneration of directors and senior executives is reviewed by the Audit and Remuneration Committee. The Committee is
director.
constituted of non-executive directors, with executive directors sitting in as ex-officio members, and is chaired by a non-executive BOARD COMMITTEES
within defined terms of reference set by the Board. below.
The Board has appointed a number of committees to which it has delegated some of its responsibilities. The committees operate
The attendance record of the members of the Econet Wireless Zimbabwe Limited Board and Board Committee meetings is set out Audit and Remuneration Committee The Audit and Remuneration Committee of the Group and its subsidiary companies is constituted of non-executive directors and
financial policy and control. It meets not less than four times a year.
to advise the Board on financial management and other governance issues and to facilitate Board decisions on matters relating to
chaired by a non-executive chairman. Two executive directors sit in as ex-officio members. The Committee's overall responsibility is
International Financial Reporting Standards.
conjuction with the Group's external auditors to ensure financial discipline within the Group and the observance by the Group of
The Committee ensures the Group delivers meaningful and transparent reporting of its financial results. The Committee works in
Members of the Audit and Remuneration Committee are: Mr P J Campbell (Chairman), Mr K V Chirairo, Mr A H N Eastwood, Mr C Fitzgerald, Mrs M Harris, Mr D Mboweni and Mrs T Mpofu. Investments Committee The Investments Committee is responsible for the review of the Group's investments and making recommendations on these to the
products. It also examines the technical aspects of acquisitions, mergers and reconstructions. K V Chirairo, Mrs M Harris, Mr D Mboweni, Mrs T P Mpofu, Mr J G B Pattison and Dr J Myers.
BOARD AUDIT AND REMUNERATION COMMITTEE 5
Board for consideration and approval. It evaluates potential investments, expansion and development of the network and new
Members of the Investment Committee are: Mr S T Masiyiwa (Chairman), Mr C Fitzgerald, Mr P J Campbell, Mr A H N Eastwood, Mr
Meetings held
J.G.B. Pattison
J. Myers
T.P. Mpofu
D. Mboweni
K.V. Chirairo
C. Fitzgerald
A.H.N. Eastwood
P.J. Campbell
T. Nyambirai
S.T. Masiyiwa
INVESTMENTS COMMITTEE 3
LOANS COMMITTEE
N/A 4 5
N/A
N/A 3 3
N/A 3 3
N/A
N/A
N/A
3 3 3
N/A
N/A
19
Corporate Governance (continued)

Loans Committee The Committee reviews the Group's major loans obligations, both local and foreign, and puts forward recommendations on the servicing of these obligations. The members of the Committee are: Mr A H N Eastwood (Chairman), Mr P J Campbell, Mr K V Chirairo, Mr C Fitzgerald, Mrs M Harris, Mr D Mboweni and Mrs T P Mpofu. INVESTOR RELATIONS Effective communication with the public and shareholders continues to remain a primary policy of the Group. The Group's executive meets with shareholders and investment analysts at least bi-annually after the release of the Group's results. The Group's Annual Report and other corporate publications are available on the corporate website www.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 annual financial statements and directors' report. If and whenever necessary the board calls for Extraordinary General Meetings to deal with specific issues. The levels of proxy votes lodged for and against each resolution are disclosed at each meeting, together with details of abstentions. EMPLOYMENT AND EQUITY PRACTICES A communications system is in place within the Group through which employees are kept informed of the Group's financial performance and matters affecting their welfare. Communications are done through regular briefings, presentations, electronic mailings and the corporate website. The Group is an equal opportunity employer. All applications for employment are given full and fair consideration; this includes applications from disabled persons. Career development and promotion of disabled people is, as far as possible, the same as that of other employees. The development of skills and expertise remains a major policy of the Group. Secondment of skilled and professional employees to overseas and regional operations takes place on a regular basis. Observance of the highest standards of ethical behaviour by the directors and the Group's employees remains one of the pillars of the Group's culture. The policy ensures that business practices are conducted with the highest levels of integrity and professionalism. INSIDER TRADING The Group complies with the Zimbabwe Stock Exchange listing rules in relation to transactions by directors and employees in securities issued by the Group. Directors and employees or their nominees or members of their immediate family are prohibited from dealing in the Group's securities at anytime when they are in possession of unpublished, price-sensitive information. T he Group operates a closed period prior to the publication of its interim and annual results, during which directors and employees of the Group may not deal in securities of the Group. In terms of policy, directors and employees who wish to transact in the shares of the Group, even outside of the Group's closed or blocked period, are required to obtain the clearance of the Chairman. INTERNAL CONTROLS Internal controls comprise methods and procedures adopted by management to achieve the objective of safeguarding assets, preventing and detecting errors and fraud, ensuring the accuracy and completeness of accounting records and the preparation of accurate reliable financial statements. The Board confirms that the internal control procedures have been in place throughout the year to identify and eliminate the stated risks.
20
have been identified.
attends the meetings of the Audit and Remuneration Committee at which he submits a report on the systems and risks that would
The Group has an internal audit function which monitors, and reports on, the internal control systems. The head of the function
INDEPENDENCE OF AUDITORS the Group for audit-related services. Whenever necessary the Group calls upon the services of other firms to assist with non-audit The Group's Audit and Remuneration Committee confirms the independence of the Auditors, Ernst & Young, who are engaged by
management consultancy work. GOING CONCERN
foreseeable future. Accordingly they have prepared the financial statements on the basis of the Group as a going concern. By order of the Board
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the
28 May 2010
K.V. Chirairo FINANCIAL DIRECTOR
21
TRANSACTION PAYMENT SOLUTIONS has made it possible for electronic payments to be more widely accepted. The business will continue innovating to meet the evolving needs of our vigour and refreshed confidence, to open new frontiers of communication. customers; hence the investment in new technologies such as GPRS, 3G, Wi-Fi and Wi-Max. With our inspired brands, we foresee a bright future. We are moving ahead with renewed
22
2010 Financial Statements
Econet Wireless Zimbabwe Limited
24 25 27 28 29 30 31 32 62
Certificate by Company Secretary Report of the Independent Auditors Consolidated Statement of Comprehensive Income Consolidated Statements of Financial Position Company Statements of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Supplementary Information Detachable proxy form for the Annual General Meeting
23
Certificate by Company Secretary

In my capacity as Group Company Secretary, I confirm that, in terms of
returns are true and correct.
Registrar of Companies, the returns required under the Act and the
the Companies Act (Chapter 24:03), the Group has lodged with the
CHARLES A. BANDA
GROUP COMPANY SECRETARY 28 May 2010
CHARLES A. BANDA
GROUP COMPANY SECRETARY
24
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF ECONET WIRELESS ZIMBABWE LIMITED
which comprise the Company and consolidated statements of financial position at 28 February 2010, and the consolidated We have audited the accompanying financial statements of Econet Wireless Zimbabwe Limited as set out on pages 27 to 61,
policies and other explanatory notes.
flows for the year then ended, and the notes to the financial statements, which include a summary of significant accounting
statement of comprehensive income, the consolidated statement of changes in equity and consolidated statement of cash
Directors' Responsibility for the Financial Statements with International Financial Reporting Standards ( IFRS ) and in the manner required by the Companies Act (Chapter 24:03). The company's directors are responsible for the preparation and fair presentation of these financial statements in accordance
Exchange (ZSE) in July 2009. Auditor's Responsibility
Accountants and Auditors Board (PAAB), the Zimbabwe Accounting Practices Board (ZAPB) and the Zimbabwe Stock
Consequence of
Directors have elected to comply with the guidance in the Joint Media Statement On The Impact On Financial Reporting as a The Change In Functional Currency ( 'the Financial Reporting Guidance') issued jointly by the Public
applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. The
fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and
This responsibility also includes: designing, implementing and maintaining internal controls relevant to the preparation and
misstatement.
plan and perform the audit to obtain reasonable assurance on whether the financial statements are free from material
accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
financial statements.
and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
considers internal controls relevant to the entity's preparation and fair presentation of the financial statements in order to
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
Zimbabwe Stock Exchange and the Zimbabwe Accounting Practices Board in July 2009.
the guidance and recommendations on audit reports issued jointly by the Public Accountants and Auditors Board, the
provisions of the Companies Act (Chapter 24:03) and the relevant Statutory Instruments (SI 33/99 and SI 62/96), as set out in
Our audit report has been modified in the manner in which we report on the compliance of these financial statements with
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our modified opinion.
A member firm of Ernst & Young Global Limited
25
(continued)
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF ECONET WIRELESS ZIMBABWE LIMITED
statement of changes in equity and consolidated statement of cash flows Non-compliance with IAS 1: Presentation of Financial Statements information will be misleading for reasons stated in note B1.2. Modified opinion
Basis for modified opinion on the comparative consolidated statement of comprehensive income, consolidated
The Directors have not presented all the required comparative information as required by IAS 1 because they believe the
Financial Reporting Standards.
the results of the Group operations of Econet Wireless Zimbabwe Limited at 28 February 2010 in accordance with International
financial statements, in all material respects; give a true and fair view of the financial position of the Company and Group and
In our opinion, except for the effects of non-compliance with IAS 1 (Presentation of Financial Statements) the consolidated
Report on other legal and regulatory requirements the Companies Act (Chapter 24:03) and Statutory Instruments (SI 33/99 and SI 62/96) due to the inability to comply with IAS 1. In our opinion, the financial statements have not been properly prepared in compliance with the disclosure requirements of
in as far as is practicable, in the Zimbabwean economic environment, at the date of the change of functional currency. Emphasis of matter
their new functional currency in a manner that is consistent with the principles of International Financial Reporting Standards,
Practices Board to assist preparers of financial statements in converting their financial statements from Zimbabwe Dollars into
issued jointly by the Public Accountants and Auditors Board, the Zimbabwe Stock Exchange and the Zimbabwe Accounting
In our opinion, the Company has complied, in all material respects with the Financial Reporting Guidance. This guidance was
variations in values depending on factors and assumptions used.
judgements and estimates relate to the Directors' valuation of property, plant and equipment. This may result in significant
estimation uncertainties with respect to the values of property, plant and equipment as at 28 February 2009. These
Without further modifying our opinion, we draw your attention to note S1, which details the significant judgments and
Ernst & Young 28 May 2010
Chartered Accountants (Zimbabwe) Harare, Zimbabwe
26
Consolidated Statement of Comprehensive Income

for the year ended 28 February 2010
All figures in US$ Revenue Cost of sales and external services sold Gross profit Other income Foreign currency gains Operating costs -General administrative expenses -Marketing and sales expenses -Network expenses -Other expenses Profit before interest, taxation, depreciation, impairment and amortisation Depreciation and amortisation Impairment of property, plant, equipment and investment property Profit from operations Finance income Finance costs Share of profit of associate Fair value gain recognised on disposal of interest in former associate Profit on disposal of investment in associate Profit before taxation Taxation Profit for the year Other comprehensive income Exchange differences arising on translation Reversal on revaluation Fair value gain on available-for-sale investments Taxation effect of other comprehensive income Other comprehensive income for the year, net of taxation Total comprehensive income for the year Profit for the year attributable to: Equity holders of Econet Wireless Zimbabwe Limited Non-controlling interests Total comprehensive income attributable to: Equity holders of Econet Wireless Zimbabwe Limited Non-controlling interests 7 NOTES 2 2010 362 776 972 (72 469 513) 290 307 459 1 186 993 166 097 291 660 549 (82 595 132) (16 496 550) (10 977 630) (2 305 620) 179 285 617 (21 110 647) (7 496 290) 150 678 680 472 885 (4 903 297) 1 089 844 722 715 61 320 148 122 147 (34 912 391) 113 209 756 (88 700) (128 000) 5 076 133 1 565 692 6 425 125 119 634 881 114 645 631 (1 435 875) 113 209 756 121 132 041 (1 497 160) 119 634 881 9 9 9 9 0.66 0.66 0.66 0.66
3 5 6 16 16
Basic profit per share (dollars) Headline profit per share (dollars) Diluted basic profit per share (dollars) Diluted headline profit per share (dollars)
27
Consolidated Statements of Financial Position

as at 28 February 2010
All figures in US$ ASSETS Non-current assets Property, plant and equipment Investment property Intangible assets Deferred taxation assets Held-to-maturity investments Investment in associate Available-for-sale investments Total non-current assets Current assets Inventories Trade and other receivables Equipment deposits Financial assets at fair value through profit or loss Cash and cash equivalents Total currents assets Total assets EQUITY AND LIABILITIES Equity attributable to owners of Econet Wireless Zimbabwe Limited Share capital and share premium Other reserves Equity attributable to owners of Econet Wireless Zimbabwe Limited Non-controlling interests Total equity Non-current liabilities Deferred taxation liabilities Long-term interest bearing debt Total non-current liabilities Current liabilities Trade and other payables Provisions Deferred revenue Short-term interest bearing debt Taxation Total current liabilities Total liabilities Total equity and liabilities NOTES 2010 2009
10 11 12 13.1 15 16 17
267 536 571 293 600 1 573 300 1 937 742 4 162 668 21 371 066 296 874 947 8 678 279 30 545 189 42 600 012 46 892 13 923 748 95 794 120 392 669 067
137 269 131 699 600 29 561 3 047 094 2 240 923 1 414 552 8 897 012 153 597 873 2 781 629 17 774 829 2 238 103 18 703 5 550 606 28 363 870 181 961 743
20 21 22 19 29.3
24.1
12 861 502 150 307 499 163 169 001 2 316 595 165 485 596 35 697 603 91 763 217 127 460 820 22 767 484 6 125 865 7 525 212 46 944 097 16 359 993 99 722 651 227 183 471 392 669 067
85 057 986 85 057 986 3 813 755 88 871 741 41 302 705 9 055 965 50 358 670 22 601 914 1 516 316 3 319 606 13 759 080 1 534 416 42 731 332 93 090 002 181 961 743
13.2 28
25 26 27 28
T. NYAMBIRAI 28 May 2010
CHAIRMAN OF THE BOARD
D. MBOWENI
K.V. CHIRAIRO
FINANCE DIRECTOR
28
as at 28 February 2010
Company Statements of Financial Position

All figures in US$ ASSETS Non-current assets Property, plant and equipment Investment in subsidiaries Total non-current assets Current assets Intercompany balances Loan to subsidiary Bank and cash Total assets EQUITY AND LIABILITIES EQUITY Equity attributable to owners of EWZL Total capital and reserves LIABILITIES Current liabilities Intercompany liabilities Other payables Total equity and liabilities NOTES 2010 2009
14.1
260 000 34 576 487 34 836 487 485 277 1 783 179 19 116 37 124 059
260 000 34 576 487 34 836 487 3 830 687 604 099 39 271 273
14.2 14.2
(4 408 184)
39 271 273
14.2
41 531 149 1 094 37 124 059
39 271 273
The principal information has been stated in the consolidated financial statements; therefore no statement of cashflows, statement of changes in equity or statement of comprehensive income is provided for the company.
T. NYAMBIRAI 28 May 2010
CHAIRMAN OF THE BOARD
D. MBOWENI
K.V. CHIRAIRO
FINANCE DIRECTOR
29
Consolidated Statement of Changes in Equity

Share capital and Share premium Other reserves 85 057 986 114 645 631 (88 700) (66 715) 6 641 825 6 486 410 121 132 041 Equity holders of the parent 85 057 986 114 645 631 (88 700) (66 715) 6 641 825 6 486 410 121 132 041 Noncontrolling interest 3 813 755
Balance at 28 February 2009 Comprehensive income Profit for the year Other comprehensive income Exchange differences arising on translation Reversal on revaluation Fair value gain on available-for-sale investments Total other comprehensive income Total comprehensive income
All figures in US$
Total 88 871 741 113 209 756 (88 700) (128 000) 6 641 825 6 425 125 119 634 881
(1 435 875) (61 285) (61 285) (1 497 160)
Transactions with equity holders of Econet Wireless Zimbabwe Limited Scrip dividend 12 861 502 Cash dividend Share buy-back Total transactions with equity holders of Econet Wireless Zimbabwe Limited 12 861 502 Balance at 28 February 2010 12 861 502
(12 861 502) (507 198) (42 513 828) (55 882 528) 150 307 499
(507 198) (42 513 828) (43 021 026) 163 169 001
2 316 595
(507 198) (42 513 828) (43 021 026) 165 485 596
recognised in the statement of comprehensive income.
comprehensive income. Where a revalued financial asset is impaired, the portion of the reserve that relates to that financial asset is also
asset is sold, the portion of the reserve that relates to that financial asset is effectively realised and recognised in the statement of
change in functional currency that occurred from Zimbabwe dollars to United States dollars in January 2009. Where a revalued financial
comprehensive income net of distributions to the equity holders of the Company and a currency translation reserve which arises from the
Other reserves- consist of reserves arising from the revaluation of property and available-for-sale financial assets, all components of total
30
Consolidated Statement of Cash Flows

All figures in US$ Operating Activities Cash generated from operations Taxation paid Net cash from operating activities Investing activities Finance income Acquisition of intangible assets Acquisition of available-for-sale financial assets Acqusition of held-to-maturity investments Purchase of property, plant and equipment Proceeds on disposal of property, plant and equipment. Proceeds on disposal of associate Net cash used in investing activities Financing activities Finance costs Dividends paid Share buy-back Proceeds from borrowings Repayment of borrowings Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 29.3 NOTES 29.1 29.2 2010 129 909 998 (23 016 872) 106 893 126 261 049 (1 761 291) (4 402 026) (1 709 909) (160 148 716) 980 428 292 535 (166 487 930) (4 903 297) (507 198) (42 513 828) 171 027 962 (55 135 693) 67 967 946 8 373 142 5 550 606 13 923 748
31
Notes to the Consolidated Financial Statements

A A.1 GENERAL INFORMATION The Company was incorporated in Zimbabwe on 4 August 1998 and its main operating subsidiary on 23 August 1994. The address of its registered office and principal place of business is Econet Park, 2 Old Mutare Road, Msasa, Harare. The main business of the Group is mobile telecommunications and related value added services. The ultimate holding Company for the Group is Econet Wireless Global Limited. These financial statements are presented in United States dollars being the currency of the primary economic environment in which the Group operates. The Group changed its functional currency from Zimbabwe dollars on 1 January 2009. A.2 B B.1 Except where specific reference is made to "the Company", the notes disclosed in the financial statements pertain to the Group. BASIS OF PREPARATION The basis of preparation of these financial statements is International Financial Reporting Standards Statement of Compliance
B 1.1 Non-disclosure of certain comparative information The financial statements have been prepared in conformity with International Financial Reporting Standards, promulgated by the International Accounting Standards Board (IASB), which includes standards and interpretations approved by the IASB as well as International Accounting Standards and Standing Interpretations Committee (SIC) interpretations issued under previous constitutions (IFRSs), with the exception that certain comparative information has not been disclosed as required by IAS 1 (Presentation of Financial Statements). The comparative information that has not been disclosed pertains to the statements below: Statement of comprehensive income; Statement of cash flows; and Statement of changes in equity. B 1.2 Reasons for non-disclosure of certain comparative information The economic environment prevailing during the previous financial year deteriorated to such an extent that the accounting fraternity in Zimbabwe, as represented by the Public Accountants and Auditors Board (PAAB), the Zimbabwe Accounting Practices Board (ZAPB) and the Zimbabwe Stock Exchange (ZSE) arrived at the conclusion that compliance with International Financial Reporting Standards was no longer possible under the prevailing economic circumstances, at that time, for entities that applied the Zimbabwe Dollar as their functional currency. This decision was arrived after considering the following issues: (i) the indices used for financial reporting in Zimbabwes hyperinflationary economy ceased to be published after July 2008 because prices could not be obtained for the basket of goods that was used to determine the general consumer price index as the majority of formal sources of supply did not have the requisite goods that were required for input into the basket;
(ii) attempts to convert Zimbabwean Dollars (ZWD) to other recognised currencies gave rise to unreliable and misleading results because of the wide spread of exchange rates available in the economy; (iii) attempts to determine ZWD fair values using present value/discounting models were severely hampered by inconsistent and unrealistic discount (interest) rates giving rise to unreliable and misleading results; (iv) the general level of price volatility was very high due to inefficiencies in the market resulting from shortages of goods as well as price controls which rendered the normal function of market efficiencies redundant in determining fair price levels between willing buyers and willing sellers; the Zimbabwe Stock Exchange (ZSE) did not operate from mid-November 2008 to mid-February 2009 which meant that there were no ZWD market-observable prices. The effects of these economic circumstances on the prior year financial information is considered to be material and pervasive to the comparative information for the statement of comprehensive income, statement of changes in equity and the statement of cash flows for that period. Therefore, the Directors have decided not to show comparative information for this period because it is potentially misleading. B1.3 Disclosure of comparative information for the statement of financial position The Group changed its functional currency on 1 January 2009. This date coincides with the effective date that was approved by the Exchange Control Authorities for the mobile business to charge for its services in United States Dollars. Subsequent to this approval, general approval was given for all entities to trade in foreign currency on 29 January 2009. This means that by the time the Group reported on 28 February 2009 all its assets and liabilities were denominated in a stable foreign currency. For this reason the Director's believe that the comparative statement of financial position is a fair reflection of the financial position of the Group as at 28 February 2009. Therefore the Directors have presented comparative information for the statement of financial position.
32 Econet Wireless Zimbabwe Limited Annual Report 2010
C C.1
ADOPTION OF NEW AND REVISED STANDARDS Standards and Interpretations effective in the current period- Adopted In the current year, the Group has adopted all of the revised Standards and Interpretations applicable to the Group issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to its operations and effective for the accounting periods beginning on or after 1 January 2009. The adoption of these new and revised Standards and Interpretations did not have a material impact on the financial statements of the Group. IFRIC 18: Transfers of assets from Customers (effective 1 July 2009) IFRS 2 Share-based payment revised ( effective 1 January 2009) : The IASB issued an ammendment to IFRS which clarifies the definition of vesting conditions and prescribes the treatment for an award that is cancelled. The group adopted this ammendment as of 1 January 2009. It did not have an impact on the financial position or performance of the Group. IFRS 3 Business combinations (revised) and IAS 27 Consolidated and separate Financial statements ammended (early adopted): The Group adopted the revised standard from 1 March 2009. IFRS 3 (revised) introduces significant changes in the accounting for business combinations occuring after this date. Changes affect the valuation of non-controlling interest, the accounting for transaction costs, the inital recognition and subsequent measurement of a contingent consideration and business combinations achieved in stages. IFRS 7 Financial instruments revised (effective 1 January 2009): The ammended standard requires additional disclosures about fair value measurement and liquidity risk. Fair value measurements related to items recorded at fair value are to be disclosed by source of inputs using a three level fair value hierachy, by class, for all financial instruments recognised at fair value. In addition, a reconciliation between the beginning and ending balance for level 3 fair value measurements is now required as well as significant transfers between levels in the fair value hierachy. IFRS 8 Operating segments revised (effective 1 January 2009): IFRS 8 replaced IAS 14 (Segment Reporting) upon its effective date. The group concluded that the operating segments determined in accordance with IFRS 8 are the same as the business segments previously identified under IAS 14. IFRS 8 disclosures are shown in note 1. IAS 1 Presentation of financial statements (effective 1 January 2009): The revised standard separates owner and non-controlling changes in equity. The statement of changes in equity includes only details of transactions with owners, with non-owner changes in equity presented in the statement of comprehensive income. The statement of comprehensive income, which is introduced in the standard, presents all items of recognised income and expense, either in one single statement, or in two linked statements. The group has elected to present one statement. IAS 23 Borrowing Costs revised (effective 1 January 2009): The revised IAS 23 requires capitalisation of borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset. The Group's previous policy was to expense borrowing costs as they were incurred. In accordance with the transitional provisions of the ammended IAS 23, the Group has adopted the standard on a prospective basis. Therefore , borrowing costs are capitalised on qualifying assets with a commencement date on or after 1 January 2009. IAS 32 Financial instruments: Puttable Financial Instruments and obligations arising on liquidation (effective 1 January 2009): The standards have been amended to allow a limited scope exception for puttable financial instruments to be classified as equity if they fulfil a number of specified criteria. The adoption of these ammendments did not have any impact on the financial postition or the performance of the Group.
C.2
Standards and interpretations issued but not effective- Not adopted At the date of the authorisation of these financial statements, the following Standards and Interpretations, which are applicable to the Group, were either issued or revised but not yet effective. These standards have not been early adopted as they do not have a material effect on the financial statements. IFRIC 9 Reassessment of Embedded Derivatives and IAS 39 Financial Instruments: Recognition and Measurement (effective for periods ending on or after 30 June 2009). IFRIC 16 (amended) Hedges of a Net Investment in a Foreign Operation (effective 1 July 2009). IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective 1 July 2009). IFRS 1 First-time Adoption of International Financial Reporting Standards: Measurement of the cost of investments in subsidiaries, jointly controlled entities and associates when adopting IFRS for the first time (effective1 July 2009). IFRS 2 Share-based Payment: Group Cash settled Share based payment Transactions (effective 1 January 2010) IFRS 5: Non-current Assets Held for Sale and Discontinued Operations (Revised). Effective from 1 July 2009. IFRS 9: Financial Instruments (effective 1 January 2013). IFRS 5: Non-current Assets Held for Sale and Discontinued Operations (Revised). Effective from 1 July 2009. IAS 7 Statement of Cash Flows: Classification of expenditures on unrecognised assets (effective 1 January 2010).
Econet Wireless Zimbabwe Limited Annual Report 2010 33
Notes to the Consolidated Financial Statements (continued)

C.2 C Standards and interpretations issued but not effective- Not adopted (Continued) IAS 17 Leases: Classification of leases of Land and buildings (effective 1 January 2010). IAS 36 Impairment of assets: Unit of accounting for goodwill impairment testing ( effective January 2010). IAS 39 Financial instruments: Recognition and Measurement- Eligible Hedged items (effective 1 July 2009). ADOPTION OF NEW AND REVISED STANDARDS (Continued)
D.1
D.2
Non-controlling interests in the net assets of consolidated subsidiaries (excluding goodwill) are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non- controlling interests' share of changes in equity since the date of the combination. Losses applicable to the non-controlling interest are applied even if that results in a deficit in the balance of the non-controlling interest.
A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.
All intra-Group transactions, balances and income and expenses are eliminated in full on consolidation.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. If a subsidiary company uses different accounting policies from other group companies, then for consolidation purposes the accounting policies and accounting treatment of that subsidiary are adjusted to be consistent with other group companies.
The results of subsidiaries acquired or disposed of during the year are included in the income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Subsidiaries are consolidated from the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.
Basis of consolidation - IAS 27 The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to the end of February of each year. For consolidation purposes, control is achieved where the Company has the power to govern the financial and operating activities of an entity so as to obtain benefits from its activities.
Subsequent measurement Acquisitions or disposal of non-controlling interests in subsidiaries without a change in control are accounted for as transactions between shareholders in equity. There is no remeasurement to fair value of net assets acquired that were previously attributable to non-controlling interest.
Acquisition of interests from non-controlling interest Acquisitions of non-controlling interests in subsidiaries are accounted for as transactions between shareholders. There is no remeasurement to fair value of net assets acquired that were previously attributable to non-controlling interests.
Business combination achieved in stages In a business combination achieved in stages, the previously held equity interest in the acquiree is remeasured at its acquisition date fair value. Any resultant gain or loss is recognised in profit or loss. If a previously remeasurement gain or loss was recognised in other comprehensive income, that gain or loss is recognised as if the previously-held equity interest had been disposed of.
At acquisition - measurement of a non-controlling interest The non-controlling interest in the acquiree is initially measured at the non-controlling interest's proportion of the net fair value of assets, liabilities and contingent liabilities recognised.
At acquisition - measurement of goodwill (see also policy note F.1 below) Goodwill arising on acquisition is recognised as an asset and initially is measured at cost, being the excess of the consideration transferred, excluding directly related expenditure, over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised less the non-controlling interest (measured at fair value or their proportion of the net asset) less the fair value of the acquirers previously held interest in the acquiree if it is a step acquisition. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in comprehensive income.
If the business combination is achieved in stages, the acquisition date fair value of the acquirers previously held equity interest in the acquiree is remeasured to fair value as at the acquisition date through profit and loss. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with IAS 39 either in profit or loss or as change to other comprehensive income. If the contingent consideration is classified as equity, it shall not be remeasured until it is finally settled within equity.
At acquisition - measurement The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred for the acquisition of a business is measured as the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquirees identifiable net assets. Acquisition costs incurred are expensed. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 (revised) are first assessed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date and recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held-for-sale in accordance with IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" which are recognised and measured at fair value less costs to sell.
BUSINESS COMBINATIONS - IFRS 3 (REVISED) Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. Applying the acquisition method requires (a) identifying the acquirer; (b) determining the acquisition date; (c) recognising and measuring the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree; and (d) recognising and measuring goodwill or a gain from a bargain purchase.
The directors anticipate that all of the above Standards and Interpretations will be adopted in the Group's financial statements for the period commencing 1 March 2010 and that the adoption of the Standards and Interpretations will not have a material impact on the financial statements of the Group in the period of initial application.
D.3 E
F.1
F.2
F.3
Internet licence Licence fees represent the cost of acquisition of a Class 'B' Internet Access Provider licence. The licence is amortised on a straight line basis over 8 years. The carrying amount of the licence is reviewed annually and written down for permanent impairment where it is considered necessary. Project development costs Project development costs are recognised as an expense in the period in which they are incurred except where it is reasonably anticipated that these costs will be recovered through future commercial activity, in which case the costs are capitalised. Assessments of carrying values are done regularly and if there is an indication that the asset has suffered an impairment loss, an impairment is recognised immediately in profit or loss.
An impairment loss is recognised in profit and loss and is not reversed in subsequent periods.
Impairment of goodwill For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, then the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
On disposal of a subsidiary, associate or jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit and loss on disposal.
Negative goodwill arising on acquisition represents the excess of the fair value of the net identifiable assets acquired over the cost of the acquisition. Negative goodwill in excess of the fair values of the non-monetary assets acquired is immediately recognised in profit or loss.
Goodwill- IFRS 3 Goodwill arising on consolidation represents the excess of the cost of an acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary, associate or jointly-controlled entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
Recognition and measurement Intangible assets are recognised when (a) it is probable that future economic benefits will flow to the entity from the intangible asset, and (b) the cost of the intangible asset can be reliably measured.An intangible asset is initially measured at cost.
INTANGIBLE ASSETS- IAS 38 Intangible assets are identifiable non-monetary assets without physical substance. Intangible assets in these financial statements comprise: Goodwill; and the cost of a Class 'B' Internet Access Provider licence held by subsidiary company Data Control and Systems (1996) (Private) Limited.
Intra-group transactions Where a Group company transacts with an associate of the Group, profits and losses are eliminated to the extent of the Groups interest in the relevant associate.
Associate losses Losses of an associate in excess of the Groups interest in that associate are not recognised. Additional losses are provided for, and a liability is recognised, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.
Subsequent measurement: Investments in associates are carried in the statement of financial position at cost adjusted for post-acquisition changes in the Groups share of the net assets of the associate, less any impairment in the value of individual investments.
At acquisition - initial measurement: Any excess of the cost of acquisition over the Groups share of the net fair values of the identifiable net assets of the associate at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the Groups share of the net fair values of the identifiable net assets of the associate at the date of acquisition (i.e. discount on acquisition) is credited to profit and loss in the period of acquisition.
The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting, except when the investment is classified as held-for-sale. There are no investments in associates which are held-for-sale in these financial statements.
INVESTMENT IN ASSOCIATES - IAS 28 An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
Investments in subsidiaries Investments in subsidiaries in the company financial statements are initailly recognised at cost. Subsequently the investments are carried at cost less accumulated impairments.
F.4
Impairment of other intangible assets At each reporting date, the Group reviews the carrying amounts of its other intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

F.4 F Impairment of other intangible assets (Continued) Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired, an impairment loss is recognised immediately in profit or loss. INTANGIBLE ASSETS- IAS 38 (Continued)
Measurement On initial recognition, PPE are measured at cost.
Recognition PPE are recognised as an asset when (a) it is probable that future economic benefits associated with the item will flow to the entity, and (b) the cost of the item can be reliably measured.
PROPERTY, PLANT AND EQUIPMENT (PPE) - IAS 16 Property, plant and equipment are tangible assets that (a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and (b) are expected to be used for more than one financial period.
If the carrying amount or ultimate cost of the qualifying asset exceeds its recoverable amount or net realisable asset, then the carrying amount is impaired accordingly.
A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale.
BORROWING COSTS - IAS 23 (REVISED) Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised on qualifying assets with commencement dates on or after 1 January 2009.
A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years.
Recoverable amount is the higher of fair value less cost to sell and value in use. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than the carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
The method of depreciation of the assets is reviewed at each financial year end and, if a different method gives rise to a more accurate depreciation charge, the changes resulting from the change in method are accounted for as a change in accounting estimate according to IAS 8. Depreciation is charged to profit or loss.
The estimated useful lives of the assets are reviewed at each financial year end and, if expectations differ from expectations at the end of the previous financial year, the changes are accounted for as a change in accounting estimate according to IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors).
Depreciation Depreciation is charged so as to write off the value of assets over their estimated useful lives, using the straight line method.
Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for intended use.
Assets in the course of construction for production or for other purposes not yet determined are carried at cost less any recognised impairment loss. Costs include professional fees and, for qualifying assets, borrowing costs (see policy note G above).
All other plant and equipment is subsequently stated at cost less accumulated depreciation and subsequent accumulated impairment losses.
A decrease in the carrying amount arising on the revaluation of property is charged to profit or loss to the extent that it exceeds the balance, if any, held in the property revaluation reserve relating to a previous revaluation of the asset. Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred to retained earnings.
Accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Any revaluation increase arising on the revaluation of property is credited to the revaluation reserve in the Statement of Changes in Equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to the profit and loss to the extent of the decrease previously charged.
Buildings
Revaluations are performed by suitably qualified independent professional appraisers on the following bases: Depreciated replacement cost
Property is subsequently measured at their revalued amounts, being fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity that the carrying amount does not differ materially from that which would be determined using fair values at the statement of financial position date.
36
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which the economic benefits from the leased assets are consumed.
The Group as Lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
The Group as Lessor Lease income from operating leases is recognised on a straight-line basis over the lease term.
The Group only has operating leases, as both lessor and lessee.
An operating lease is a lease which is not a finance lease. All the risks and benefits of ownership are effectively retained by the lessor .
A finance lease is a lease that transfers substantially all the risks and rewards of ownership of an asset to the lessee.
LEASES - IAS 17 A lease is an agreement in which the lessor conveys to the lessee, in return for payment, the right to use an asset for an agreed period of time.
An impairment loss is recognised immediately in profit or loss.
Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. This write-down is an impairment loss.
Value in use is estimated after taking account of all relevant factors, particularly reasonable and supportable cash flow projections under prevailing economic conditions; most recent management budgets/forecasts up to 5 years forward; estimated asset useful lives and residual values; and other related and relevant factors.
Recoverable amount is the higher of an asset's or a cash-generating unit's fair value less costs to sell and its value in use. In determining the recoverable amount of assets, expected cashflows are discounted to their present values using risk-adjusted pre-tax discount rates, and taking account of all relevant known factors.
IMPAIRMENT OF PPE AND INVESTMENT PROPERTY ASSETS - IAS 36 The residual values of PPE and investment property are reassessed each year taking into account age, usage and obsolescence. The carrying amount is compared to its recoverable amount.
Gains or losses on derecognition of investment property are recognised in profit or loss.
Gains or losses on disposal or retirement of investment properties are measured as the difference between the net disposal proceeds and the carrying amount of the asset at the date of disposal or retirement.
Derecognition An investment property is derecognised either on disposal, when withdrawn from use, when no future economic benefits are expected from its use or disposal.
Measurement Investment property is measured initially at its cost. Subsequently, investment property is stated at its fair value as determined by independent professional valuers. Gains or losses arising from changes in the fair value of investment properties are included in profit or loss for the period in which they arise.
Recognition Investment properties are recognised when; (a) it is probable that future economic benefits associated with the investment property will flow to the entity, and (b) the costs of the acquisition or construction of the investment property can be reliably measured.
INVESTMENT PROPERTIES - IAS 40 Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties still being developed are also classified in accordance with the provisions of IAS 40.
On the disposal or retirement of revalued PPE, the attributable revaluation surplus remaining in the revaluation reserve is transferred directly to retained earnings. No transfer is made from the revaluation reserve to retained earnings except when an asset is derecognised.
The gain or loss arising on derecognition of PPE is the difference between the net disposal proceeds, if any, and the carrying value of the asset. The gain or loss is included in profit or loss at the time the item is derecognised.
Derecognition of PPE PPE is derecognised when; (a) the asset is disposed of or retired from use, or (b) when no future economic benefits are expected from its use or disposal.
PROPERTY, PLANT AND EQUIPMENT (PPE) - IAS 16 (Continued)

L INVENTORIES - IAS 2 Inventories are assets; (a) held for sales in the ordinary course of business; (b) in the process of production for such sale; or (c) to be consumed in the production process or the rendering of services.
M.1
Contract products Connection fees Revenue is recognised on the date of activation.
REVENUE RECOGNITION - IAS 18 Revenue, which excludes Value Added Tax, cash discounts and sales between Group companies, represents the invoiced value of goods and services supplied by the Group. The Group measures revenue at the fair value of the consideration received or receivable. Revenue is recognised only when it is probable that economic benefits associated with the transaction will flow to the Group and the amount of revenue and associated costs incurred, can be measured reliably. If necessary, revenue is split into separately identifiable components. The main categories of revenue and bases of recognition for the Group are:
Obsolete and slow moving inventories are identified and written down to their estimated economic or realisable value.
Write downs to net realisable value and inventory losses are expensed in the period in which they occur.
The basis of determining cost is the weighted average method.
Net realisable value represents the estimated selling price less all estimated costs incurred in the marketing, selling or distribution, where applicable.
Cost comprises all costs necessary to bring the inventories to their present location and condition.
Inventories are measured at the lower of cost or net realisable value.
M.2
Internet services Subscriptions Subscriptions revenue is recognised on a straight-line basis over the period to which it relates.
Starter packs Revenue is recognised on the date all risks and rewards associated with the starter-packs are transferred to the purchaser.
Pre-paid products Airtime Revenue is recognised when a customer utilises the airtime, at which point the risks and rewards have been transferred. Upon purchase of an airtime voucher the customer receives the right to make outgoing voice calls and to use the short message service to the value of the voucher. Revenue is deferred until such a time as the customer uses the airtime.
Airtime Revenue is recognised on the usage basis.
Access charges Revenue is recognised in the period to which it relates.
M.3
M.4
Dividend income Dividend income from investments is recognised when the shareholders' rights to receive payment have been established.
Interest income Interest income is accounted for on a time basis by reference to the principal outstanding and at the effective interest rate applicable which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's carrying amount.
Services Revenue is recognised on the accrual basis in accordance with the substance of the agreement.
Other revenue and income Other sales Revenue is recognised on the date all risks and rewards associated with the sale are transferred to the purchaser.
Service revenues Revenue is recognised on the accrual basis in accordance with the substance of the agreement.
Automated transaction services Software and hardware sales Revenue is recognised when goods are delivered and ownership has passed.
Services Revenue is recognised on the accrual basis in accordance with the substance of the agreement.
38
N N.1
N.2
Deferred tax Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if temporary differences arise from goodwill or from initial recognition of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of the deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantially enacted by the reporting date.
TAXATION - IAS 12 Income tax expense represents the sum of the tax currently payable and deferred tax.
Equity-settled share-based payment transactions with other parties are measured at their fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of equity instruments granted, measured at the date the entity obtains the goods or the counterparty rendered the service.
For equity-settled share-based payment transactions with employees, the fair value determined at the grant date of the equity-settled share-based payment is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the equity instruments that will eventually vest. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to the equity-settled employee benefits reserve. This policy is applied to all equity-settled share-based payments granted after 7 November 2002.
SHARE-BASED PAYMENTS - IFRS 2 Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
Short-term benefits The cost of all short-term employee benefits, such as salaries, employee entitlements to leave pay, bonuses, medical aid and other contributions, are recognised during the period in which the employee renders the related service. The Group recognises the expected cost of bonuses only when the Group has a present legal or constructive obligation to make such payment and a reliable estimate can be made.
Payments to defined contribution retirement benefit schemes are charged as an expense when they fall due. Payments to state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes where the Groups obligations under the schemes are equivalent to those arising in a defined contribution retirement benefit scheme.
Retirements benefits are provided for Company employees through an independently administered defined contribution fund and the National Social Security Authority (NSSA).
Short-term employee benefits - benefits due to be settled within 12 months after the end of the period in which the employees rendered the related services; Post-employment benefits - benefits payable after the completion of employment; and Post-employment benefit plans -These are benefit plans which are formal or informal arrangements providing post-employment benefits for one or more employees. Such plans (or funds) may be defined contribution funds or defined benefit funds.
EMPLOYEE BENEFITS - IAS 19 Employee benefits are all forms of benefits given in exchange for services rendered by employees. These are classified as:
The deferred tax balances for the current year are significant because the opening income tax values have not yet been established. Due to this no allowances have been claimed for a large part of assets relating to the year ended 28 February 2009.
The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be available in the future, against which the reversal of temporary differences can be deducted. Recognition, therefore, involves judgement regarding the future financial performance of the particular legal entity or tax group in which the deferred tax asset has been recognised. Historical differences between forecast and actual taxable profits have not resulted in material adjustments to the recognition of deferred tax assets.
Deferred tax is calculated at the tax rates that are expected to apply in the periods when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
39

Q Q.1 FINANCIAL INSTRUMENTS - IAS 39 Financial instruments comprise financial assets and financial liabilities
Financial Assets Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held to maturity investments, available for sale financial assets or as derivatives designated as hedging instruments in an effective hedge as appropriate. The group determines the classification of its financial assets at initial recognition.
Q.1.1 Held-to-maturity investments Non derivative financial assets with fixed or determinable payments and fixed maturities are classified as held-to-maturity when the Group has the positive intention to hold it to maturity. After initial measurement, held-to-maturity investments are measured at amortised cost using the effective interest method, less impairment.
A financial asset other than a financial asset held-for-trading may be designated as at FVTPL upon initial recognition if: such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis. Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.
Financial assets at fair value through profit or loss (FVTPL) Financial assets are classified as at FVTPL where the financial asset is either held-for-trading or it is designated as at FVTPL. A Financial asset is classified as held for trading if: it has been acquired principally for the purpose of selling in the near future; or it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of shortterm profit-taking; or
Subsequent measurement The subsequent measurement of financial assets depends on their classification as follows:
The Group's financial assets include cash and short-term deposits, trade and other receivables, loan and other receivables, quoted and unquoted financial instruments.
All financial assets are recognised initally at fair value plus, in the case of investments not at fair value through profit or loss , directly attributable transaction costs.
Q.1.2 Available-for-sale financial (AFS) financial assets Available-for-sale financial investments include equity and debt securities. Equity investments classified as available-for-sale are those, which are neither classified as held-for-trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.
Income is recognised on an effective interest rate basis for debt instruments other than those assets designated as at FVTPL.
Effective interest rate method The effective interest rate method is a method of calculating the amortised cost of a financial asset and of allocating interest over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period.
Q.1.3 Loans and receivables Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest rate method less any impairment. Interest income is recognised by applying the effective interest rate, except for short term receivables when the recognition of interest would be immaterial.
For a financial asset reclassified out of the available-for-sale category, any previous gain or loss on that asset that has been recognised in equity is amortised to profit or loss over the remaining life of the investment using the effective interest rate method
The Group evaluated its available for sale-financial-assets whether the ability and intention to sell them in the near term is still appropriate.
Dividends on AFS equity instruments are recognised in profit or loss when the Group's right to receive the dividends is established.
After initial measurement, available-for-sale financial investments are subsequently measured at fair value with unrealised gains or losses recognised as other comprehensive income in the available-for-sale reserve until the investment is derecognised at which time the cumulative gain or loss is recognised in other operating income, or determined to be impaired, at which time the cumulative loss is recognised in the income statement in finance costs and removed from the available-for-sale reserve.
40
Q.1.4 Impairment of financial assets The group assesses at each reporting date whether there is any objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if and only if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset ( an incurred 'loss event') and that loss event has an impact on the estimated future cashflows of the financial asset or the group that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Q.1.5 Financial assets carried at amortised cost For financial assets carried at amortised cost the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
FINANCIAL INSTRUMENTS - IAS 39 (Continued)
Q.1.6 Available-for-sale financial investments For available-for-sale financial investments, the Group assesses at each reporting date whether there is objective evidence that an investment or a group of investments is impaired. In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. Significant is to be evaluated against the original cost of the investment and prolonged against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of comprehensive income is removed from other comprehensive income and recognised in the statement of comprehensive income. Impairment losses on equity investments are not reversed through the statement of comprehensive income; increases in their fair value after impairment are recognised directly in other comprehensive income. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of comprehensive income. In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in the statement of comprehensive income.
The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in the income statement. Loans together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a future write-off is later recovered, the recovery is credited to finance costs in the income statement.
If there is objective evidence that an impairment loss has incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial assets original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate.
Q.2
Q.1.7 Derecognition of financial assets A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised either when the rights to receive cash flows from the asset have expired or the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cashflows in full without material delay to a third party under a pass-through arrangement . This will be either when the Group has transferred substantially all the risks and rewards or the group has neither transferred nor retained substantially all the risk and rewards of the asset, but has transferred control of the asset. Financial liabilities Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss , loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge as appropriate. The Group determines the classification of its financial liabilities at initial recognition.
Future interest income continues to be accrued based on the reduced carrying amount of the asset and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the statement of comprehensive income, the impairment loss is reversed through the statement of comprehensive income.
Q.2.1 Financial liabilities at fair value through profit and loss (FVTPL) Financial liabilities are classified as at FVTPL where the financial liability is either held-for-trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if: it has been incurred principally for the purpose of repurchasing in the near future. it is a part of an identified portfolio of financial instruments that the Group manages together and has a recent actual pattern of shortterm profit-taking.

Q Q.2.1 Financial liabilities at FVTPL (continued) A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if: such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or the financial liability form part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or Financial liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial liability. FINANCIAL INSTRUMENTS - IAS 39 (Continued)
Q.2.2 Other financial liabilities Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.
Q.3
Q.2.3 Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.
Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised on an effective yield basis.
S.1
Useful lives of property, plant and equipment A review of the estimated remaining lives of all network equipment was performed using the engineering expertise within the business. This review considered the following factors, at a minimum; the age of the equipment, technological advancements, current use of the equipment, and planned network upgrade programmes. The determination of the remaining estimated useful lives of the network equipment is deemed to be a significant area of judgment due to its highly specialised nature.
Residual values of property, plant and equipment During the year management assessed the residual values of property, plant and equipment. Residual values of each asset category have been assessed by looking at the fair value of the asset after taking into account age, usage and obsolescence. These residual values are reassessed each year and adjustments are made where appropriate.
Land and Buildings Land and buildings were valued by independent professional valuators. The valuation required the application of professional judgment in making the relevant assessments of the appropriate gross replacement cost.
Network Equipment Subsequent to the change in functional currency on 1 January 2009 the directors established the original United States Dollar cost of network equipment at the dates when it was acquired since major components of network equipment were acquired in United States Dollars. The directors made a key assumption that the original cost represented the gross replacement cost of these assets and this was then applied in determining the depreciated replacement cost which was used as the deemed cost.
Property, plant and equipment - IAS 16 Property, plant and equipment represents a significant proportion of the asset base of the Group, being 68 % (75% in prior year) of the Groups total assets in the year under review. Therefore, the estimates and assumptions made to determine their carrying value and related depreciation are critical to the Groups financial position and performance.
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Measurement of segment information The amount reported for each operating segment is the measure reported to the chief operating decision maker for the purposes of allocating resources to the segment and assessing its performance.
The group has identified the chief executive officer as the chief operating decision maker.
Reportable segments are identified based on the information about the components of the entity that management uses to make decisions about operating matters. This identification of operating segments is on the basis of internal reports that are regularly reviewed by the entitys chief operating decision maker in order to allocate resources to the segment and assess its performance.
Identification of segments The Group discloses its operating segments according to the entity components regularly reviewed by the Group Chief executive. These values have been reconciled to the consolidated annual financial statements. The measure reported by the Group is in accordance with the accounting policies adopted for preparing and presenting the consolidated annual financial statements.
OPERATING SEGMENT INFORMATION- IFRS 8 The Group identifies segments as components of the Group that engage in business activities from which revenues are earned and expenses incurred (including revenues and expenses relating to transactions with other components of the same entity).The segments' operating results are regularly reviewed by the entitys chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.
Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.
S.2
S.2.1 Licences The estimated useful life is, generally, the term of the licence, unless there is a presumption of renewal at negligible cost. Using the licence term reflects the period over which the Group will receive economic benefit. For technology specific licences with a presumption of renewal at negligible cost, the estimated useful economic life reflects the Groups expectation of the period over which the Group will continue to receive economic benefit from the licence. The economic lives are periodically reviewed, taking into consideration such factors as changes in technology. Historically, any changes to economic lives have not been material following these reviews.
Estimation of useful life The useful life used to amortise intangible assets relates to the future performance of the assets acquired and managements judgement of the period over which economic benefit will be derived from the asset. The basis for determining the useful life for the most significant categories of intangible assets is as follows:
Intangible assets - IAS 38 Intangible assets include the licences, and development costs. These assets arise from both separate purchases and from acquisition as part of business combinations. On the acquisition of mobile network operators, the identifiable intangible assets may include licences, customer bases and brands. The fair value of these assets is determined by discounting estimated future net cash flows generated by the asset, where no active market for the assets exist. The use of different assumptions for the expectations of future cash flows and the discount rate would change the valuation of the intangible assets.
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (Continued)
S.3
S.2.2 Capitalised software The useful life is determined by management at the time the software is acquired and brought into use and is regularly reviewed for appropriateness. For computer software licences, the useful life represents managements view of expected benefits over which the Group will receive benefits from the software, but not exceeding the licence term. For unique software products controlled by the Group, the life is based on historical experience with similar products as well as anticipation of future events, which may impact their life, such as changes in technology. Historically, changes in useful lives have not resulted in material changes to the Groups amortisation charge. Impairment reviews - IAS 36 IFRS requires management to undertake an annual test for impairment of indefinite lived assets and, for finite lived assets, to test if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
S.4 S.5
S.6
OPERATING SEGMENTS The principal activities set out below are the basis on which the Group reports its primary segment information. For management purposes, the group is organised into business units based on their products and services and has five reportable segments as follows: Cellular Network Operations Econet Wireless (Private) Limited provides cellular network services which forms the main business of the Group.
Deferred revenue Revenue for cellular network services is recognised when the airtime is utilised by the customer. The unused air time as at 28 February 2010 has been deferred from revenue until the airtime has been used by the customers. The deferred revenue portion is determined by both IT related checks and arithmetical formulae to identify the portion of revenue to be deferred.
EWG installment sale agreement The interest rate applied to the facility to discount the future payments is based on Econet Wireless Zimbabwe Limited weighted cost of borrowing as management assessed this as the interest rate reflective of the Groups cost of borrowing. The interest is based on various interest arrangements on facilities with ZTE of China and African Export Import Bank. Refer note 28 for the borrowings schedule.
Provision for impairment of accounts receivable The provision for impairment is based on an estimate of the recoverability of accounts receivable and subject to estimation . Refer to note 21 for the basis of determining impairment loss provisions.
Impairment testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at an appropriate rate.
Management monitors the operating results of its business units seperately for the purposes of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit and is measured consistently with operating profit or loss in the consolidated fianancial statements.
No operating segments have been aggregated to form the above reportable operating segments .
Investments Econet Wireless Capital Holdings (Private) Limited is the investment vehicle through which the Group has a variety of investments listed on the Zimbabwe Stock Exchange.
Beverages Mutare Bottling Company (Private) Limited provides beverage services to both individual and corporate clients.
Transaction Processing Systems Transaction Payment Solutions (Private) Limited provides financial transaction switching, point of sale and value added services that exploit the convergence of banking, information technology and telecommunications. The company provides local and international financial institutions and telecommunications operator access to cutting edge technology .
Internet Services Ecoweb provides broadband and dial up services to both corporate and individual customers with a presence in all the major cities and towns in the country.

Cellullar Network Operations Internet Services Transaction Processing Systems Investments Adjustments and and Beverages Administration eliminations
All figures in US$
Total
OPERATING SEGMENTS (Continued)
Segment information for the year ended 28 February 2010 Revenue 347 092 651 Depreciation 19 467 705 Impairment of property, plant, equipment and investment property 3 470 800 Amortisation of intangibles Share of profit of associate Fair value gain on disposal of interest in former associate Segment profit 113 276 400 Acquisition of segment non-current assets Segment assets Segment liabilities 159 671 286 395 466 640 218 030 928
5 026 999 395 833 190 236 921 777 2 411 475 5 540 148 3 256 232
2 305 888 360 978 27 316 (340 612) 1 206 796 4 852 242 4 847 199
8 730 608 663 579 4 025 490 (1 671 872) 330 359 14 371 347 5 658 591
5 000 1 089 844 722 715 1 024 063 4 402 026
(379 174) -
362 776 972 20 893 095 7 496 290 217 552 1 089 844 722 715 113 209 756 168 021 942 392 669 067 227 183 471
58 510 122 (86 071 432) 46 885 466 (51 494 945)
Notes 1 Inter-segment revenues are eliminated on consolidation. 2 Profit for each operating segment does not include intercompany revenues. 3 Expenditure on non-current assets consists of additions to property, plant and equipment, intangible assets, investment properties, held-to-maturity investments and available-for-sale investments.
All figures in US$

REVENUE Revenue is made up of : Local airtime Interconnection fees-local Interconnection fees-foreign International airtime- Roaming Data - Internet services Other sales
2010
268 062 777 42 593 874 27 924 402 8 511 598 5 026 999 10 657 322 362 776 972
PROFIT FROM OPERATIONS Profit from operations is arrived at after taking the following income/(expenditure) into account:Increase in allowance for impairment of trade receivables Auditors remuneration Audit fees - subsidiaries - company Depreciation of property, plant and equipment Amortisation of intangible assets Impairment of property, plant, equipment and investment property Loss on disposal of property, plant and equipment Profit on disposal of associate Employee benefits Compensation to Directors and key management: - For services as directors - For management services (34 701 604) (739 000) (709 000) (30 000) (20 893 095) (217 552) (7 496 290) (789 463) 61 320 (27 089 611) (2 038 929) (139 020) (1 899 909)
44
4.
All figures in US$
Before tax amount
Tax benefit
Net-of-tax amount
DISCLOSURE OF TAX EFFECTS RELATING TO EACH COMPONENT OF OTHER COMPREHENSIVE INCOME Available-for-sale financial assets Foreign currency translation reserve Revaluation of property, plant and equipment Other comprehensive income 5 076 133 (88 700) (128 000) 4 859 433 1 565 692 1 565 692 6 641 825 (88 700) (128 000) 6 425 125
All figures in US$

5 FINANCE INCOME Income from investment in bank deposits 6 FINANCE COSTS Interest on loans and bank overdrafts 7 EXCHANGE GAINS Realised forex gains Unrealised forex gains
2010
472 885
(4 903 297)
150 654 15 443 166 097
TAXATION Current income taxation Deferred taxation (note 13) Withholding taxation Taxation expense Tax rate reconciliation Profit before tax Reconciliation of tax charge: Normal tax at 30.9% Net disallowable income/(expenses) Withholding taxation Effect of change in tax rate Taxation expense (35 388 920) 2 930 058 (2 453 529) (34 912 391) 148 122 147 (45 769 744) (3 460 595) (2 453 529) 16 771 477 (34 912 391)
On the 2nd of December 2009 the Zimbabwe basic corporate tax rate was reduced from 30% to 25%, with effect from the tax year commencing on the 1st of January 2010. The relevant deferred tax balances have been remeasured and deferred tax expected to reverse in the year to 28 February 2011 has been calculated at the effective corporate tax rate that will apply of 25.75%.
45

All figures in US$
9
2010
EARNINGS PER SHARE 114 645 631 789 463 (243 944) 115 191 150
Profit for the year attributable to ordinary shareholders Adjustment for capital items (gross of tax): Loss on disposal of property, plant and equipment Tax effect on adjustments Headline earnings attributable to ordinary shareholders Basic earnings basis The calculation is based on the profit attributable to ordinary shareholders and the number of shares in issue for the year which participated in the profit of the Group. Fully diluted earnings basis The calculation is based on the profit attributable to ordinary shareholders and the number of shares in issue after adjusting to assume conversion of share options not yet exercised (as applicable). There were no instruments with a dilutive effect at the end of the financial year. Headline earnings Headline earnings comprise of basic earnings attributable to ordinary shareholders adjusted for profits, losses and items of a capital nature that do not form part of the ordinary activities of the Group, net of their related tax effects. Number of shares Weighted number of ordinary shares for the purposes of basic and diluted earnings per share Basic profit per share (dollars) Headline profit per share (dollars) Diluted basic profit per share (dollars) Diluted headline profit per share (dollars)
174 205 022 0.66 0.66 0.66 0.66
10
All figures in US$
PROPERTY, PLANT AND EQUIPMENT At cost or valuation
Land and buildings
Network equipment
Office equipment
Motor vehicles
Capital work-in progress
Total
At 28 February 2009 Additions Disposals Transfers At 28 February 2010
21 427 200 9 087 450 15 438 30 530 088
111 700 209 94 107 225 31 286 433 237 093 867
6 656 531 6 784 228 (195 018) 551 724 13 797 465
3 409 897 2 981 826 (1 824 686) 4 567 037
35 350 536 47 187 987 (31 853 595) 50 684 928
178 544 373 160 148 716 (2 019 704) 336 673 385
46
All figures in US$

10
Land and buildings
Network equipment
Office equipment
Motor vehicles
Capital work-in progress
Total
PROPERTY, PLANT AND EQUIPMENT (Continued) Accumulated depreciation and impairment At 28 February 2009 Charge for the period Impairment Disposals At 28 February 2010 Carrying value At 28 February 2010 At 28 February 2009 (253 976) (7 090 290) (7 344 266) (41 266 745) (18 942 335) (60 209 080) (1 205 619) 6 097 (1 199 522) (8 497) (491 165) 115 716 (383 946) (41 275 242) (20 893 095) (7 090 290) 121 813 (69 136 814)
23 185 822 21 427 200
176 884 787 70 433 464
12 597 943 6 656 531
4 183 091 3 401 400
50 684 928 35 350 536
267 536 571 137 269 131
As at 28 February 2010 land and buildings were revalued by an independent professional valuer on the basis of depreciated replacement cost. Other plant and equipment is carried at original cost less accumulated depreciation and impairment, where applicable. Debt is collateralised over Zimbabwean based network equipment. The fair value of the related debt is US$ 138.7 million. Refer to note 28 for the breakdown of loan facilities with collateralised debt. The reconciliation of the carrying value between the 2008 and 2009 balances has not been disclosed for reasons stated in note B1.2.
All figures in US$

11 INVESTMENT PROPERTY At 28 February 2009 Impairment At 28 February 2010
2010
2009
699 600 (406 000) 293 600
699 600 699 600
Investment property pertains to industrial and residential properties leased to third parties. The Group's investment properties were valued by an independent professional valuer at 28 February 2010 on the basis of open market value. Rental income pertaining to investment property recognised in the statement of comprehensive income for the year amounted to US$46 303. The Directors are of the opinion that the value of investment property is not in exceess of its recoverable amount.
47

All figures in US$
12 INTANGIBLE ASSETS At 28 February 2009: Cost Accumulated amortisation Carrying value Movement for the year: Additions Amortisation At 28 February 2010: Cost Accumulated amortisation Carrying value 21 693 (9 265) 12 428 1 735 494 (190 236) 1 757 187 (199 501) 1 557 686 27 479 (10 346) 17 133 25 797 (27 316) 53 276 (37 662) 15 614 49 172 (19 611) 29 561 1 761 291 (217 552) 1 810 463 (237 163) 1 573 300
Licences
Computer software
Total
Intangible assets pertain to licences held by Data Control and Systems (1996) (Private) Limited and computer software held by Transaction Payment Solutions (Pvt) Limited. The Group uses the expected usage of the asset to determine the useful life of intangible assets. At 28 February 2010 the licences had an estimated remaining useful life of 6 years and 2 months and the computer software had a remaining useful life of between 2 months to 4 years.
All figures in US$

13 DEFERRED TAXATION The following are the major deferred tax liabilities and assets recognised by the Group, and the movements thereon, during the current period. 13.1 Taxation asset At 28 February 2009 Charge to profit for the year At 28 February 2010 13.2 Taxation liability At 28 February 2009 Credit to profit for the year Credit to other comprehensive income At 28 February 2010 13.3 Net deferred tax asset/(liability) At 28 February 2009 Credit to profit for the year (note 8) Credit to other comprehensive income At 28 February 2010
Property, plant and equipment
Deferred revenue
Other
Total
39 514 712 (4 037 407) 35 477 305 (39 514 712) 4 037 407 (35 477 305)
3 047 094 (1 109 352) 1 937 742 3 047 094 (1 109 352) 1 937 742
1 787 993 (2 003) (1 565 692) 220 298 (1 787 993) 2 003 1 565 692 (220 298)
3 047 094 (1 109 352) 1 937 742 41 302 705 (4 039 410) (1 565 692) 35 697 603 (38 255 611) 2 930 058 1 565 692 (33 759 861)
48
All figures in US$

14 INVESTMENT AND LOANS IN SUBSIDIARIES
COMPANY
Percentage
2010
2009
14.1 Cost of investments Econet Wireless (Pvt) Ltd (Cellular network operator in Zimbabwe) Data Control & Systems (1996) (Pvt) Ltd t/a Ecoweb (Internet service provider) Transaction Payment Solutions (Pvt) Ltd (Computer data processing service provider) Econet Wireless Capital Holdings (Pvt) Ltd (Investment company) Pentamed Investments (Pvt) Ltd (Investment company) Total investments in subsidiaries 14.2 Net loans to/(from) group companies Econet Wireless (Pvt) Ltd Pentamed Investments (Pvt) Ltd Econet Wireless Global Limited Total loans (from)/to subsidiaries Total investments and loans in subsidiaries
100% 100% 84.3% 100% 100%
3 133 903 21 692 108 25 200 186 6 220 598 34 576 487
3 133 903 21 692 108 25 200 186 6 220 598 34 576 487
(41 531 149) 1 783 179 485 277 (39 262 693) (4 686 206)
3 345 410 604 099 485 277 4 434 786 39 011 273
The directors are of the opinion that the costs of the investments in subsidiaries are not in excess of their recoverable amounts. Loans and other group balances are unsecured, interest free and have no fixed terms of repayment.
All figures in US$

15 HELD-TO-MATURITY INVESTMENTS At 28 February 2009 Additions Interest At 28 February 2010
2010
2 240 923 1 709 909 211 836 4 162 668
Held-to-maturity investments comprise of foreign currency bearer bonds with a face value of US$2 452 759 and an investment with a local financial institution amounting to US$1 709 909. The bearer bonds yield interest at a rate of 6.8% per annum.
49

COMPANY
16
All figures in US$
INVESTMENT IN ASSOCIATES
2010
Details of the Groups associates are as follows; Name of the associate Interest in Africa First ReNaissance Corporation Limited (AFRE) The movement in investment in associate was as follows: Opening balance Share of profit /(loss) of associate Fair value gain on disposal of interest in associate Disposal Reclassification to available-for-sale investments (note 17) Closing balance 1 414 552 1 089 844 722 715 (231 216) (2 995 895) -
During the year under review, the entity disposed part of its shareholding in AFRE to reduce the effective holding from 21.8% to below 20% as at 28 February 2010. The remaining investment in AFRE was reclassified to available-for-sale financial assets because the investment no longer meets the criteria for recognition as an associate.
17
All figures in US$
2010
AVAILABLE-FOR-SALE INVESTMENTS Listed investments Opening balance Additions Fair value gain/(loss) Disposal Reclassification from associate (note 16) Reclassification to held-to-maturity investments Closing balance 8 897 012 4 402 026 5 076 133 2 995 895 21 371 066
Included in listed investments are shares in Kingdom Meikles Africa Limited (Kingdom Meikles) The carrying value of these shares as at 28 February 2010 was US$14 244 696 (2009 US$6 474 862). EWZL ("the sellers") reached an agreement with a consortium ("the purchasers") for the disposal of part of its portfolio of Kingdom Meikles Africa Limited shares. Pursuant to this agreement 24 537 480 Kingdom Meikles shares were disposed at a price of US$ 0.71 per share on 1 October 2009. The purchasers, as security for payment of the purchase consideration ceded all rights and title to the shares to the sellers pending final payment. The shares are held in trust by a nominated third party until full settlement of the purchase price. Payment by the purchasers is due on or before 30 September 2010 ("the completion date"). However the sellers at their sole discretion have the right to extend the completion date. In the event that the purchaser fails to settle the amount due for the shares by the completion date the seller is entitled to charge interest at the London Interbank Offered Rate plus 6%, compounded on a monthly basis. The Group will remain with 1,361,968 shares in Kingdom Meikles after the above mentioned sale agreement, these shares have remained designated as available-for-sale financial assets. Kingdom Meikles last traded on the Zimbabwe Stock Exchange at a price of US$ 0.55. This is the price that has been used to fair value the shares as there is no reliable measure of the value of these shares at the statement of financial position date. Kingdom Financial Holdings Limited scheme of arrangement On the 24th of October 2007, Kingdom Financial Holding Limited (KFHL) issued a circular relating to the scheme of arrangement between KFHL and its shareholders. This scheme of arrangement was for the legal matters in which KFHL was involved, namely Kingdom Stockbroker's (Pvt) Ltd vs National Social Security Authority and Kingdom Bank Limited vs Saturn Trading Investments. In this scheme of arrangement, 850 000 Econet Wireless Zimbabwe Limited shares were set aside by KFHL as a provision for potential loss against these cases. In the event of the cases being won by KFHL, the shareholders of KFHL at the time of the arrangement would receive the fair value or the actual shares in proportion to their shareholding at the time the scheme was established. The case was subsequently ruled in favour of Kingdom Financial Holdings Limited and as such Econet Wireless Zimbabwe Limited is entitled to approximately 34% of the total shares under the scheme of arrangement .
50
All figures in US$

18 Set out below is a comparison by class of the carrying amounts and fair value of the Groups financial instruments that are carried in the financial statements. FAIR VALUES OF FINANCIAL INSTRUMENTS
Carrying amount 2010
Fair value 2010
Financial liabilities Interest-bearing loans and borrowings Trade and other payables Total
Financial assets Trade and other receivables Available-for-sale financial investments Cash and cash equivalents Financial assets at fair value through profit or loss Held-to-maturity investments Total
30 545 189 21 371 066 13 923 748 46 892 4 162 668 70 049 563 138 707 314 22 767 484 161 474 798
30 545 189 21 371 066 13 923 748 46 892 4 162 668 70 049 563 138 707 314 22 767 484 161 474 798
Fair value of quoted notes and bonds is based on price quotations at the reporting date. The fair value of unquoted instruments, loans from banks and other financial liabilities, obligations under finance leases as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. Fair value hierarchy As at 28 February 2010, the Group held the following financial instruments measured at fair value: Fair value of available-for-sale financial assets are derived from quoted market prices in active markets.
Long-term fixed-rate and variable-rate receivables / borrowings are evaluated by the Group based on parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken to account for the expected losses of these receivables. As at 28 February 2010, the carrying amounts of such receivables, net of allowances, are not materially different from their calculated fair values.
Cash and cash equivalents, trade receivables, trade payables, and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique; Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
All figures in US$
As 28 February 2010
Assets measured at fair value Financial assets at fair value through profit or loss Available-for-sale financial assets Held-to-maturity financial assets Cash and cash equivalents Trade and other receivables Total Liabilities measured at fair value Interest-bearing loans and borrowings Trade and other payables Total
Total
46 892 21 371 066 4 162 668 13 923 748 30 545 189 70 049 563
Level 1
46 892 21 371 066 13 923 748 35 341 706 -
Level 2
4 162 668 30 545 189 34 707 857 138 707 314 22 767 484 161 474 798
Level 3
-
138 707 314 22 767 484 161 474 798
During the reporting period ending 28 February 2010 there were no transfers between Level 1 and Level 2 fair value measurements and no transfers into and out of Level 3 fair value measurements.
51

All figures in US$
19 Opening balance Fair value gain Closing balance FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
2010
2009
20
Investments held at fair value through profit or loss comprise of equity investments in Old Mutual Life Assurance Company Zimbabwe Limited and Interfresh Limited. The fair value is based on the Zimbabwe Stock Exchange published price. Merchandise Spares, stationery and other inventory Closing balance INVENTORIES
18 703 28 189 46 892
18 703 18 703
21
The directors are of the opinion that the inventory amounts are recorded at values that are not in excess of their recoverable amounts. All inventories are expected to be recovered within 12 months. Trade receivables Interconnect debtors Intercompany receivables Allowance for impairment losses Closing balance TRADE AND OTHER RECEIVABLES
4 477 734 4 200 545 8 678 279
485 197 2 296 432 2 781 629
22
Refer to Q1.3 for the Group's accounting policy on trade and other receivables. Prepayments for network equipment CAPITAL AND RESERVES EQUIPMENT DEPOSITS
Before accepting any new individual customer, the Group conducts trade reference checks to establish the credit history of the applicant . The Group also conducts enquiries with credit bureaus specifically on individuals, companies and their directors.
Ageing of impaired trade and other receivables 30-Current 60-90 90-120 120+ Total
The significant increase in the provision for impairment losses is due to the provision for local interconnect balances.
Balance at the beginning of the year Impairment losses provided Closing balance
Movement in the allowance for impairment losses
There is a concentration of credit risk associated with Interconnect Debtors .
25 856 009 40 216 331 5 716 506 (41 243 657) 30 545 189
4 828 021 12 585 379 6 903 482 (6 542 053) 17 774 829
(6 542 053) (34 701 604) (41 243 657)
(6 542 053) (6 542 053)
1 988 885 2 297 801 2 179 383 34 777 588 41 243 657
2 601 222 3 940 831 6 542 053
23
Equipment deposits pertain to payments made in advance for the acquisition of network equipment. Refer to note 24.1 for issued share capital and reserves Other reserves
42 600 012
2 238 103
23.2 Asset revaluation reserve The asset revaluation reserve is used to record increases in the fair value of property and decreases to the extent that such decrease relates to an increase on the same asset previously recognised in equity.
23.1 Available for sale reserve This reserve records fair value changes on available-for-sale financial assets.
52
All figures in US$

24 SHARE CAPITAL
2010
2009
The share capital of the Group is reflected as nil because authority has not yet been sought from the Registrar of Companies to change the value of nominal share capital from Zimbabwe Dollars to United States Dollars. At the next annual general meeting Shareholders will be requested to approve the redenomination of the nominal share capital from Zimbabwe Dollars to United States Dollars. Group and company Authorised 300 000 000 (2009-300 000 000) Shares consisting of: 200 000 000 (2009- 200 000 000) Ordinary shares of $nil each 100 000 000 (2009-100 000 000) Class "A" shares of $nil each 24.1 Issued and fully paid 90 716 685 Ordinary shares of $nil each 73 069 615 Class "A" shares of $nil each
All figures in US$

Movement in share capital Balance at 28 February 2009 Issue of shares (includes scrip and allotment) Shares cancelled Balance at 28 February 2010
Number of shares
Share capital
Share premium
169 292 579 5 367 581 (10 873 860) 163 786 300
12 861 502 12 861 502
24.2 Class "A" shares On 1 July 2003, Econet Wireless Zimbabwe Limited ("EWZL") entered into an arrangement with Dunstone (Private) Limited, to acquire its 100% owned subsidiary Econet Wireless Capital Holdings (Private) Limited (EWCH). Under the arrangement, EWZL issued 739 843 680 (73 984 368 after share consolidation) Class "A" shares in exchange for 999 000 EWCH shares. These shares rank parri passu in all respects with the existing issued ordinary shares with the exception that, in the event of EWZL becoming the owner of Econet Wireless (Private) Limited ("EWL") shares, and deciding to distribute the shares to its members, the Class "A" shares will not participate in the distribution of the EWL shares. 24.3 Scrip dividend and allotment During the year the Group issued 4 159 690 shares through a scrip dividend and alloted 1 207 891 shares. 24.4 Share buy-backs Under the authority granted at the Annual General Meeting of 28 September 2009 the Directors were authorised to purchase the Company's own shares on the market. The units purchased were 6% of the previously issued share capital of the Company with the nominal value of $nil for a total consideration of US$ 42 513 828. These shares were subsequently cancelled.
24.5 Directors' shareholding At 28 February 2010, the Directors held directly and indirectly the following number of shares in the Company. As at that date there were no outstanding share options granted to the Directors. S.T. Masiyiwa T. Nyambirai A.H.N. Eastwood C. Fitzgerald P.J. Campbell D. Mboweni T.P. Mpofu J. Pattison K Chirairo J. Myers Total
Ordinary Shares
73 069 615 73 069 615
4 502 132 14 431 10 412 1 069 901 806 449 1 046 132 220 052 143 023 52 985 7 865 517
53

Ordinary Shares
24.5 Directors' shareholding (Continued) S.T. Masiyiwa T. Nyambirai R. Chidembo A. Eastwood C. Fitzgerald P.J. Campbell D. Mboweni T.P. Mpofu J. Pattison Z. Wazara K Chirairo Total
24
SHARE CAPITAL (Continued)
73 883 893 73 883 893
4 891 075 10 302 821 596 8 990 1 028 449 834 688 1 019 757 228 619 2 672 023 135 823 11 651 322
All figures in US$

25 TRADE AND OTHER PAYABLES Local trade accounts payable Foreign trade accounts payable Equipment Short term intercompany payables Direct deposits Other payables
2010
2009
7 103 528 2 257 462 1 779 112 3 220 529 8 406 853 22 767 484
6 422 816 5 252 435 8 000 000 473 992 2 452 671 22 601 914
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period on purchases is 7 days. After this period escalations are negotiated in relation to inflation. The Group has financial risk management policies in place to ensure that all payables are settled within the agreed credit timeframe. Provisions are required to be recorded when the Group has a present legal or constructive obligation as a result of past events, for which it is probable that an outflow of economic benefits will occur, and where a reliable estimate can be made of the amount of the obligation. A reliable estimate being the amount that the Group would rationally pay to settle the obligation at the statement of financial position date. Various uncertainties can result in obligations not being considered probable or estimable for significant periods of time. As a consequence, potentially material obligations may have no provisions and a change in facts or circumstances that result in an obligation becoming probable or estimable can lead to a need for the establishment of material provisions. In addition, where estimated amounts vary from initial estimates the provisions may be revised materially, up or down. The Group records provisions for legal contingencies when the contingency is probable of occurring and the amount of the loss can be reasonably estimated. Liabilities provided for legal matters require judgements regarding projected outcomes and ranges of losses based on historical experience and recommendations of legal counsel. Litigation is however unpredictable and actual costs incurred could differ materially from those estimated at the statement of financial position date. 26 PROVISIONS Provisions The provisions balance is made up of the following: 6 125 865 1 516 316
All figures in US$

Licence fees provision Warranties provision-terminals Bonus and commissions Leave pay
Balance at 28 February 2009

1 080 878 59 055 205 659 170 724 1 516 316
22 964 957 212 532 1 878 764 937 063 25 993 316
Current provision
(20 739 489) (59 055) (585 223) (21 383 767)
Utilised provision
Balance at 28 February 2010
3 306 346 212 532 2 084 423 522 564 6 125 865
The licence fees provision is the liability payable to Post and Telecommunication Regulatory Authority of Zimbabwe which is based on cellular network revenue.
54
27
All figures in US$
2010
2009
DEFERRED REVENUE 7 525 212 3 319 606
Prepaid deferred revenue The deferred revenue arises from the unused prepaid airtime and product support fees. The directors are of the opinion that the carrying amounts approximate the fair values of the services to be provided. 28 INTEREST BEARING DEBT At 28 February 2009 Additions during the year Repayments At 28 February 2010 Long-term portion Short-term portion
22 815 045 171 027 962 (55 135 693) 138 707 314 91 763 217 46 944 097 138 707 314
Initial facility limit Amount paid to date Amount Amount due Current between interest due in 1 year 1 to 5 years rate
16 326 868 18 739 954 (12 251 777) 22 815 045 9 055 965 13 759 080 22 815 045
Financier
Effective date
Interest obligation
Less
Total
Stanbic Bank
Licence upgrade 25-Jun-09
Global Limited
Econet Wireless
Import Bank
African Export
Import Bank
African Export
ZTE of China
ZTE of China
ZTE of China
ZTE of China
ZTE of China
31-Mar-08 07-Aug-08
15-Nov-07 29-Apr-08 06-Oct-09
04-May-09 12 000 000 29-Dec-09 50 000 000 30-Apr-09 88 300 350 188 783 696 2 000 000 1 729 167
8 254 179
5 000 000
6 500 000
6 773 712
8 226 288
2 775 000 4 142 857 21 828 174 45 557 047 2 000 000 137 856 -
4 066 425
4 231 161
6 375 574
All figures in US$
Current on obligation
Security terms
11 126 44 000 366 000 86 710 6 564
21 673
5 622
7 901 143 50 366 000
8 340 889
2 231 564
2 444 701
2 564 224
1 856 336
6 329 714
4 007 447
1 489 897
1 957 988
2 055 714
1 856 336
1 571 429
4 333 442
741 667
486 713
508 510
2.99% Equipment Purchased +3.25% + 4% 5% LIBOR LIBOR Foreign receivables & Foreign receivables &
5.31% Equipment Purchased
366 000 50 000 000
Network equipment
Network equipment n/a
02-Dec-09
555 665 143 782 314 46 944 097 96 838 217 138 707 314 46 944 097 91 763 217 5 075 000 -
13 970
66 472 176 28 369 895 38 102 281 1 591 311 13 970 497 136 13 970 1 094 175 -
n/a Equipment Purchased
Net loans
Afrexim deposit account
5 075 000
The weighted average cost of capital for the Group as at 28 February 2010 was 5.63% based on the effective interest charged on the various facilities available to the Group as at that date. The borrowing powers of the directors are as disclosed in note 35. Summary of borrowing arrangements African Export Import Bank (AFREXIM Bank) In terms of the conditions of this loan, the Group requires the approval of the bank to incur further borrowings and to declare dividend payments. The agreement also requires that all the Group's foreign revenues are to be deposited into a collection account held with the Bank or a nominated agent of the bank. ZTE The facilities highlighted in the schedule above have been applied to the expansion of the cellular network. All the facilities are repayable within 5 years from the reporting date. Econet Wireless Global The details of this facility are disclosed in note 31.
55

All figures in US$ 2010
148 122 147 20 893 095 217 552 7 090 290 789 463 (28 189) 34 701 604 25 993 316 (1 089 844) (722 715) (61 320) 406 000 4 430 412 4 205 606 244 947 417
29
CASH FLOW INFORMATION
Profit before tax Adjustments for: Depreciation Amortisation of intangible assets Impairment of property, plant and equipment Loss on disposal of property, plant and equipment Fair value gains on financial assets at fair value through profit or loss Increase in provision for impairment of trade receivables Increase in other provisions Share of profit from associate Fair value gain recognised on disposal of interest in former associate Profit on disposal of associate Impairment loss on fair value adjustment of investment property Net finance costs Increase in deferred revenue Cash generated by operations before working capital changes 29.1 Adjustments for working capital changes Increase in inventories Increase in trade and other receivables Increase in trade and other payables Utilisation of provisions Cash generated from operations 29.2 Taxation paid Opening balance of liability Add: current taxation charge for the year Add: withholding taxes paid Less: closing balance of liability Taxation paid 29.3 Cash and cash equivalents Short term investments Bank balances and cash
(5 896 650) (87 833 873) 76 871 (21 383 767) (115 037 419) 129 909 998
1 534 416 35 388 920 2,453 529 (16 359 993) 23 016 872 594 708 13 329 040 13 923 748
56
All figures in US$

30 RELATED PARTY TRANSACTIONS Transactions between the Company and its subsidiaries, which are related party transactions, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between Group Companies and other related parties are disclosed below. 30.1 Transactions Liquid Telecommunications Operations Limited Liquid Telecommunications Operations Limited Total Liquid Telecommunications Operations Limited Member of Econet Wireless Global Group Member of Econet Wireless Global Group Sales Cost of sales
2010
27 924 402 (22 968 806) 4 955 595
Worldstream Systems and Services Member of Econet Wireless Global Group Worldstream Telelogistics Member of Econet Wireless Global Group Worldstream Telelogistics Member of Econet Wireless Global Group Total Worldstream Telelogistics/ Worldstream Systems and Services Econet Wireless Global Econet Wireless International Limited Econet Wireless Global TN Financial Holdings Limited Mtetwa & Nyambirai Legal Practitioners 30.2 Balances Liquid Telecommunications Operations Limited Econet Wireless Global Econet Wireless Global TN Financial Holdings Limited Worldstream Systems and Services Worldstream Systems and Services Worldstream Telelogistics Worldstream Telelogistics Econet Wireless International Limited Member of Econet Wireless Global Group Member of Econet Wireless Global Group Member of Econet Wireless Global Group Common Director Common Director
Expense - Marketing cost Expenses - Cost of sales Expenses - Consultancy fees
8 163 426 401 591

435 155
Acquisition of equipment Expense- Management fees Expense- Interest Expense-Transaction fees Expense-Legal services
86 243 760 2 248 167 2 056 591 714 005 8 706
Member of Econet Wireless Global Group Member of Econet Wireless Global Group Member of Econet Wireless Global Group Common Director Member of Econet Wireless Global Group Member of Econet Wireless Global Group Member of Econet Wireless Global Group Member of Econet Wireless Global Group Member of Econet Wireless Global Group
Receivable Interest bearing debt Receivable Investments Receivable Payable Receivable Inventory Payable
4 770 148 (66 472 176) 485 277 2 304 617 2 583 210 (341 497) 156 684 632 261 (174 373)
The interconnection services were provided at the Groups approved price list. The amounts outstanding from related companies are unsecured and will be settled in cash. No guarantees have been given or received and no expense has been recognised in the period for bad or doubtful debts in respect of amounts owed by related parties. 30.3 Compensation of key management personnel The remuneration of directors and other members of key management during the year was as follows: Short-term benefits Post-employment benefits Total 2 038 929 2 038 929
57

31 EWG EQUIPMENT SUPPLY AGREEMENT Econet Wireless Zimbabwe Limited entered into an agreement with Econet Wireless Global Limited (EWG), a related party, for the supply of telecommunications equipment, engineering and technical services. The transaction was classified as a related party transaction requiring shareholder approval in terms of the Zimbabwe Stock Exchange Listing Requirements due to the fact that EWG is the majority shareholder of EWZL and it was also the owner of the telecommunications equipment. Shareholders approved the transaction at the Extraordinary General Meeting held on 27 March 2009. Salient terms and conditions of the agreement Price and payment terms: US$ 93 874 133 payable in twenty five (25) monthly instalments. The first instalment for a cash amount of US$ 21 828 174. The subsequent twenty four installments are comprised of a monthly cash amount of US$ 2 153 689 and US$ 848 226 in 352 693 new EWZL ordinary shares listed on the Zimbabwe Stock Exchange. Excluding the first payment of US$ 21 828 174 the monthly installments shall commence at the end of the thirteenth (13) month from the month of the first payment. Tenure: The period of the instalments is three (3) years, inclusive of an instalment period of eleven (11) months during which the installation, construction and commissioning of the equipment shall take place. The last payment under the instalment sale agreement is due on 28 February 2012. Ownership: Ownership and title to the equipment passes on payment of the first instalment of US$ 21 828 174. Other salient information The deposit of the equipment of US$ 21 828 174 was paid in the financial year ended 28 February 2010 and therefore ownership and title of the equipment passed from EWG to EWZL. The remaining instalments are due in the year ending 28 February 2011 and subsequent years as reflected in Note 28. Effect of the time value of money At initial recognition the liability to EWG in terms of this agreement and the corresponding value of the equipment was recorded in the financial statements at US$ 86 483 849. This amount represents the present value of the deferred future repayments on the facility at an implicit interest rate of 5.63%. The difference between the purchase price and the present value of future payments of US$ 7 347 968 has been treated as a finance cost that will be recognised over the term of the agreement. The finance costs recorded in the current year statement of comprehensive income arising from this agreement is US$ 2 056 591. The agreement does not provide for any financing cost on the purchase of the equipment. The interest rate implicit in the financing arrangement has been determined by reference to the average borrowing rate of EWZL. (As per Note 28). 32 GROUP EMPLOYEE BENEFITS Econet Wireless Group Pension Fund The contributions are made through monthly deduction by the Company on members' salaries and remitted to the Fund. National Social Security Authority Scheme This is a defined contribution scheme promulgated under the National Social Security Act of 1989. The Company's obligation under the scheme are limited to specific contributions legislated from time to time. 33 FINANCIAL RISK MANAGEMENT
33.1 Capital risk management The Groups objectives when managing capital are: to safeguard the entitys ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk. The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. Consistently with others in the industry, the Group monitors capital on the basis of the debt-to-adjusted capital ratio. This ratio is calculated as net debt divided by adjusted capital. Net debt is calculated as total debt (as shown in the statement of financial position) less cash and cash equivalents. Adjusted capital comprises all components of equity (ie share capital, share premium, non-controlling interests, retained earnings, and revaluation reserve) other than amounts accumulated in equity relating to cash flow hedges, and includes some forms of subordinated debt. The debt-to-adjusted capital ratios at 28 February 2010 and at 28 February 2009 were as follows:
58
33
All figures in US$
FINANCIAL RISK MANAGEMENT (Continued)
2010
2009
33.1 Capital risk management (continued) Total debt Less: cash and cash equivalents Net debt Total equity Debt-to-adjusted capital ratio (i) Debt is defined as long- and short-term borrowings, as detailed in note 28.
138 707 314 13 923 748 124 783 566 165 485 596 75%
22 815 045 5 550 606 17 264 439 88 871 741 19%
(ii) Equity includes all capital and reserves of the Group. At the reporting date, there was significant concentration of credit risk on the interconnect balances owing to the company. Refer to note 21. 33.2 Financial risk management objectives The Group's Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the group through internal risk reports which analyses exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Group's Audit Committee, consisting of executive and non-executive directors, meet on a regular basis to analyse, amongst other matters, currency and interest rate exposures and re-evaluate treasury management strategies against revised economic forecasts. Compliance with Group policies and exposure limits is reviewed at quarterly Board meetings. A Loans Review Committee is also in place to review the loans structure of the company on a regular basis. The Group has a dedicated committee of the Board which reviews the loan exposures on a regular basis and monitors repayment plans. The Group has been able to meet its obligations in the current financial period and the Directors believe that appropriate measures have been implemented to ensure that the Group has the ongoing capacity to meet its obligations arising from these exposures. 33.3 Interest rate risk management Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group invests in money market instruments which are subject to changes in interest rates on the local money markets. The Groups policy is to adopt a non-speculative approach to managing interest rate risk and to only invest in instruments that are approved by the Investments Committee of the Board of Directors. Approved funding instruments include; bankers acceptances, call loans, overdrafts, foreign loans and where appropriate, long-term loans. The Group has borrowings that are subject to both fixed interest rates and floating interest rates. Details of the Groups borrowings are described in note 28. The Board of Directors has a committee that is dedicated to reviewing the loan exposures and repayment plans for the Groups external borrowings. The Committee that reviews the loan exposures meets on a regular basis and uses various models to project the Groups risk exposures and proposes methods to deal with the risk arising in an appropriate manner. This committee also approves the term sheets for such borrowings, and ensures that the interest rate exposure of the Group is appropriately managed. The sensitivity of the Groups statement of comprehensive income to the changes in interest rates on its material exposures is apparent from the information disclosed in note 33.3.1 below. The Directors, at the reporting date, were not aware of any information or events that may have a significant impact on the reported profit and loss of the Group or that would result in material changes in the structure of the Groups statement of comprehensive income, therefore no sensitivity analysis of the Groups exposure to interest rate risk has been prepared. 33.3.1Econet Wireless Global instalment sale agreement - Sensitivity analysis The entity entered into a deferred payment arrangement with Econet Wireless Global valued at US$93.9 million. The interest rate applied to discounting the future cash outflows arising from the transaction is the weighted average cost of borrowing for Econet Wireless Zimbabwe Limited of 5.63% .The interest recorded in the statement of comprehensive income for the year ended 28 February 2010 is US$ 2 056 591. The full interest for the facility to the date of the final payment based on the implied cost of borrowing above is US$ 7 347 968. The following reflects the interest rate sensitivity on the implicit interest rate of 5.63%.
59

33 FINANCIAL RISK MANAGEMENT (continued)
33.3.1Econet Wireless Global instalment sale agreement - Sensitivity analysis (continued)
All figures in US$

If interest rate goes up by 4% to 9.63% If interest rate goes down by 4% to 1.63%
Adjusted interest
8 399 365 1 660 607
Future interest at current rate

5 291 377 5 291 377
Movement gain/(loss)
(3 107 988) 3 630 770
33.4 Other price risks Other price risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk and currency risk) whether those changes are caused by factors specific to the individual financial instrument or to its issuer or factors affecting all similar financial instruments traded in that market. The Group invests in tradable securities that are quoted on the Zimbabwe Stock Exchange and maintains two portfolios for these investments, a trading portfolio and a long-term investment portfolio. The Investments Committee of the Board of Directors is responsible for evaluating investment opportunities and authorising strategic and short-term investments of the Group. This Committee consists mainly of non-executive Directors and meets regularly to evaluate the risk exposures and to propose mitigating mechanisms to limit the Groups exposure. 33.5 Credit risk management Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group's exposure and the credit ratings of its counterparties are continuously monitored and the credit exposure is controlled by counterparty limits that are reviewed and approved regularly. Financial assets, which potentially subject the group to concentrations of credit risk, consist principally of cash, short-term deposits, trade receivables and intercarrier receivables and payables. The Groups cash equivalents are placed with high quality financial institutions. Trade receivables are presented net of the allowance for impairment losses. Credit risk with respect to debtors is limited due to the widespread customer base and ongoing credit evaluations to maintain credit worthiness of the customers. Where appropriate, trade receivables are converted onto the prepaid service. Intercarrier receivables and payables are regulated by interconnect contracts. Intercarrier receivables and payables for foreign cellular traffic are managed through a reputable foreign finance house which ensures the net monthly outstanding amounts are collected from the foreign interconnect partners. 33.6 Financial risk management The schedule below shows the composition of the bank and cash balances at at the respective year end in United States dollars at at the reporting date. Bank and cash balances- US$
2010 Bank and cash balances Short term deposits Closing balance 2009 Bank and cash balances Short term deposits Closing balance
Euro
Rand
USD
Pound
Total
21 714 21 714
21 998 21 998
13 282 899 594 708 13 877 607
2 429 2 429
13 329 040 594 708 13 923 748
5 549 786 820 5 550 606
60
33
33.7 Liquidity risk management Ultimate responsibility for liquidity risk management rests with the board of directors, which has built an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. 34 Refer note 28 for the group's remaining contractual maturities on loans. GOING CONCERN
FINANCIAL RISK MANAGEMENT (continued)
35
The Directors have assessed the ability of the company to continue operating as a going concern and believe that the preparation of these financial statements on a going concern basis is still appropriate In terms of the Company's Articles of Association, the directors may exercise the powers of the Company to borrow up to 200% of the aggregate of: the issued share capital and share premium or stated capital of the Company and: the distributable and non-distributable reserves, including unappropriated profits of the Company reduced by any adverse amount reflected in the statement of comprehensive income, excluding goodwill, revaluation reserves arising prior to 28 February of each year, provision for taxation, deferred tax, and any balance standing to the credit of the tax equalisation account. BORROWING POWERS
The current borrowings are within the limit. 36
All figures in US$
CAPITAL COMMITMENTS
2010
-
The capital expenditure is to be financed from internal cash generation, extended supplier credits and bank credit 37 38 39 CONTINGENT ASSETS AND LIABILITIES
Authorised and contracted
APPROVAL OF FINANCIAL STATEMENTS SUBSEQUENT EVENTS
The directors are not aware of any contingent assets or liabilities at the reporting date.
The financial statements were approved by the board of directors and authorised for issue on 28 May 2010.
It is with this strategic perspective in mind that, the Company has recapitalized Ecoweb and Transaction Payment Solutions (Private) Limited (TPS) under the arrangements described below. These arrangements were concluded with Liquid Telecommunications Holdings Limited (Liquid), a member of the Econet Wireless Global Group, after 28 February 2010 and are therefore disclosed as a non-adjusting post balance sheet event in the annual financial statements:
To ensure the efficient management of the backbone infrastructure, and to improve the capacity and the technical capability of this infrastructure the Company has restructured its operations such that Data Control and Systems (1996) (Private) Limited (which trades as Ecoweb), a licensed wholly owned subsidiary of the Company will now focus primarily on the management of the fibre optic network transmission infrastructure, while EWPL focuses on the provision of voice and broadband service products. The fibre optic infrastructure will not completely replace the existing microwave infrastructure but will complement the current backbone infrastructure.
Econet Wireless (Private) Limited ("EWPL) a wholly owned subsidiary of Econet Wireless Zimbabwe Limited (EWZL or the Company) has built its network using microwave transmission backbone infrastructure. The microwave transmission backbone infrastructure cannot cope with the increasing demands of the enlarged subscriber base. The introduction of third generation mobile technology has also increased the complexity and the technical capabilities required of the network transmission infrastructure.
The Company entered into an agreement with Liquid in terms of which Liquid agreed to subscribe for 49% of the issued share capital of Ecoweb for a total consideration of US$ 5,903,040, being the highest amount of a valuation range independently determined by an international firm of accountants. Liquid undertook to use its own financial and technical resources to develop a fibre optic transmission system in the place of the microwave transmission backbone to support the mobile network on the basis that such additional capital and any loans granted to Ecoweb will not result in the further dilution of the Company's shareholding in Ecoweb. Liquid has the appropriate expertise in constructing and operating such transmission systems and will therefore have a management contract over the operations of Ecoweb on commercial terms that have been determined on an arms-length basis. The subscription for Ecoweb shares by Liquid is subject to the approval of the Reserve Bank of Zimbabwe, the Postal and Telecommunications Regulatory Authority of Zimbabwe, and the Listing Committee of the Zimbabwe Stock Exchange. The Company has also agreed to the subscription for new shares in TPS by Liquid for U$ 426 000 on the basis of an independent valuation which was performed by an international firm of accountants. This will result in Liquid having a 49% stake in TPS. This will enable TPS to roll out a significant number of electronic payment terminals. Liquid will have a management contract over the operations of TPS. The transaction is subject to the approval of the Reserve Bank of Zimbabwe and that of the Listing Committee of the Zimbabwe Stock Exchange.
Supplementary Information
Econet Wireless Zimbabwe Limited
63 64 65 67 68
Shareholders and Other Information Shareholder Analysis Financial Diary Notice to Members Corporate and Advisory Information Our Strategic Business Partnerships
Detachable Proxy Form for Annual General Meeting
Weve built our business around the pillars of mobility, data and Internet Protocol to provide the fully integrated, everywhere connectivity that our customers want and expect.
62
Shareholders Analysis
SHAREHOLDERS ANALYSIS AS AT 28 FEBRUARY 2010 Size of shareholding Number of Shareholders % of total Shareholders Issued Ordinary shares % of total Share capital
100 001 - 500 000 10 000 001 Total
50 001 - 100 000
10 001 - 50 000
5 001 - 10 000
1 001 - 5 000
501 - 1 000
201 - 500
101 - 200
0 - 100
1 287
1 573
4 066
226
188
817
668
14.30%
17.47%
45.16%
500 001 - 1 000 000
71 15 20 9 003
71
2.51% 0.79% 0.17% 0.22% 100%
2.09%
9.07%
7.42%
1 313 854 14 663 025 10 973 040 50 899 823 163 786 300 73 069 615 4 977 429
1 743 961
454 359
386 381
202 935
134 381
0.79%
4 967 497
3.04% 8.95% 31.08% 100% 6.70% 44.61%
3.03%
0.80%
1.06%
0.28%
0.24%
0.12%
0.08%
1 000 001 - 10 000 000
0.01%
Top shareholders
Class A
Class of shares Ordinary
Total
% of total share capital
Other Total
Christian Community Partnership Trust 73 069 615
Kingdom Nominees (Private) Limited
Afre Corporation Limited
Econet Employees Beneficiary Trust
Pearl Properties (2006) Limited
Pressforth Investments (Private) Limited
Ewanpeak Investments (Private) Limited
Hellikop Investments (Private) Limited
First Mutual Life - Policyholders
Fed Nominees (Private) Limited
Datvest Nominees (Private) Limited
Ramtell Investments (Private) Limited
Renaissance Securities Trading Limited NNR
Northunderland Investments (Private) Limited
Austin Eco Holdings Limited-NNR
Old Mutual Zimbabwe Limited
Old Mutual Life Assurance Company of Zimbabwe Limited
Barclays Zimbabwe Nominees (Private) Limited
Stanbic Nominees (Private) Limited
Econet Wireless Global Limited
73 069 615
10 542 646
11 208 945
3 898 305
1 046 132
1 048 017
1 069 901
1 138 162
1 445 828
1 729 254
2 109 989
2 152 001
2 221 453
4 358 058
4 831 317
7 350 337
10 542 646
11 208 945
76 967 920 7 350 337
46.99%
29 953 131 90 716 685
867 101
878 319
927 489
967 220
973 080
1 046 132
1 048 017
1 069 901
1 138 162
1 445 828
1 729 254
2 109 989
2 152 001
2 221 453
4 358 058
4 831 317
29 953 131 163 786 300
867 101
878 319
927 489
967 220
973 080
18.29% 100%
0.53%
0.54%
0.57%
0.59%
0.59%
0.64%
0.64%
0.65%
0.69%
0.88%
1.06%
1.29%
1.31%
1.36%
2.66%
2.95%
4.49%
6.44%
6.84%
63
Financial Diary
30 July 2010 September 2010 October 2010 28 February 2011 April 2011 May 2011 June 2011 June 2011
Twelfth Annual General Meeting of Shareholders, Econet Park, Harare Interim results, analyst briefing and interim dividend record date Interim dividend payment Financial year end Financial results, analyst briefing and dividend record date Annual Report 2011 publication and dividend declaration
Dividend payment
Thirteenth Annual General Meeting of Shareholders, Econet Park, Harare
64
Notice to Members
staff canteen, at the registered office of the Company at Econet Park, 2 Old Mutare Road, Msasa, Harare, Zimbabwe on Friday 30 July 2010 Notice is hereby given that the Twelfth Annual General Meeting of the members of Econet Wireless Zimbabwe Limited, will be held in the
at 10.00 a. m. for the following purposes: Ordinary Business 1.
To consider and adopt the following resolutions: Financial Statements and auditors thereon. To receive and adopt the financial statements for the year ended 28 February 2010, together with the report of the directors
2.
Dividends
per share for the half year and a final dividend of US$ 0.06 per share. 3. Election of Directors
To appove a total dividend of US$0. 14 per share for the year ended 28 February 2010, made up of an interim dividend of US$0. 08
T o re-elect Messrs D Mboweni and K V Chirairo as directors of the Company.
Company's Annual General Meeting and, being eligible, offer themselves for re-election. election. He was appointed to the Board in January 2001. 4. 5. Directors' Remuneration Auditors
In accordance with Article 81 of the Company's Articles of Association Messrs D Mboweni and K V Chirairo retire by rotation at the
Shareholders are advised that Mr A H N Eastwood has indicated his wish to retire from the Board. He will not be standing for re-
To approve the fees paid to the directors for the year ended 28 February 2010.
auditors for the ensuing year. 6. 6.1 Special Business
To approve the auditors' remuneration for the previous year and to consider re-appointing Messrs Ernst & Young as
T o consider and if thought fit, to adopt, with or without amendment, the following resolutions:
As an Ordinary Resolution: Share Buy-back shares in such manner or on such terms as the directors may from time to time determine, provided that the repurchases are not That the Company, as duly authorized by Article 10 of its Articles of Association, may undertake the purchase of its own ordinary
acquired shall not exceed 10% (ten percent) of the Company's issued share capital.
immediately preceding the date of the repurchase and also provided that the maximum number of shares authorized to be
made at a price greater than 5% above the weighted average of the market value for the securities for the five business days
from the date of this resolution. 6.2 As a Special Resolution:
be created: and further that this authority shall expire at the next Annual General Meeting, and shall not extend beyond 15 months
That a capital redemption reserve fund, appropriated out of the reserves standing from time to time in the books of the Company,
Re-denomination of Share Capital
to US$ 3 000 000 divided into 200 000 000 ordinary shares and 100 000 000 class A shares of US$ 0.01 each.
re-denominated from Z$300 000 comprising of 200 000 000 ordinary shares and 100 000 000 class A shares of ZW$ 0.001 each
To resolve as a Special Resolution, with or without amendments, That the authorised share capital of the Company be and is hereby
65
Notice to Members (continued)

That the issued share capital be and is hereby redenominated to US$1 637 863 divided into 90 716 685 ordinary shares and 73 069 615 class A shares of US$0.01 each. That the directors be and are hereby authorized to transfer from other reserves an equivalent amount of the nominal value to fund the above redenomination of the issued shares. That the directors be and are hereby authorized to maintain an appropriate level of distributable and non-distributable reserves as may be determined by the directors from time to time. That pursuant to this resolution, the Memorandum and Articles of Association of the Company be amended accordingly. 7. Any Other Business To transact such other business as may be transacted at an Annual General Meeting.
NOTE: A member of the Company entitled to attend and vote at this meeting is entitled to appoint a proxy to speak and, on a poll, vote in
meeting.
his/her stead. A proxy need not be a member of the Company. Proxy forms should be forwarded to reach the office of the transfer secretaries at least 48 hours before the commencement of the
By Order of the Board
C A BANDA
GROUP COMPANY SECRETARY
66
Corporate and Advisory Information

Incorporated in the Republic of Zimbabwe
Company registration number 7548/98

Registered Office Econet Park, 2 Old Mutare Road, Msasa, Harare, Zimbabwe
Mtetwa and Nyambirai Legal Practitioners
Legal Advisor to the Company
E-mail: info@econet.co.zw Company Secretary
Fax:+263- 4-486120
Telephone: +263-4-486121/6, +263-91-222 500
Avenue, Harare, Zimbabwe
4th Floor, 101 Union Avenue Building,101 Kwame Nkrumah,
Website: www.econet.co.zw Charles Alfred Banda Auditors
Econet Park, 2 Old Mutare Road, Msasa, Harare, Zimbabwe
Harare, Zimbabwe
Cnr. Sam Nujoma Street/Robert Mugabe Way
4th Floor, Goldbridge North, Eastgate
First Transfer Secretaries (Private) Limited
Registrars and Transfer Secretaries
Ernst & Young
Chartered Accountants (Zimbabwe) Harare, Zimbabwe Principal Bankers
Angwa City, Cnr Julius Nyerere Way/ Kwame Nkrumah Avenue
African Export-Import Bank Limited Egypt
World Trade Centre, 1191 Corniche EL-Nil, Cairo 11221
TN Bank Limited
Avenue, Harare, Zimbabwe
2nd Floor, 101 Union Avenue Building, 101 Kwame Nkrumah
Renaissance Merchant Bank Limited Harare, Zimbabwe CBZ Bank Limited Sapphire House
8th Floor, Karigamombe Centre,56 Samora Machel Avenue
Speke Avenue / Angwa Street, Harare, Zimbabwe
67
Our Strategic Business Partnerships

The opportunities in the market have made it imperative to broaden our relationship with key partners.
This has enabled the business to deliver value to our stakeholders and has promoted accelerated growth.
AFREXIMBANK
68
Proxy Form for the Annual General Meeting

Friday, 30 July 2010, at 10.00 a.m. by hand to: The Group Company Secretary For the Twelfth Annual General Meeting of the Company to be held at Econet Park, 2 Old Mutare Road, Msasa, Harare, Zimbabwe, on
Econet Wireless Zimbabwe Limited, No. 2 Old Mutare Road, Msasa, Harare, Zimbabwe.
The Group Company Secretary
or by post to:
Econet Wireless Zimbabwe Limited, P.O Box BE 1298 Belvedere, Harare, Zimbabwe
I/We................................................................................................................................................................................................. Being the registered holder/s of.......................................................................................................................................................... Ordinary shares in Econet Wireless Zimbabwe Limited do hereby appoint-: 1.............................................................................................................................................................................or failing him/her 2.................................................................................................................................................................................or failing
voting.
Company which will be held at Econet Park, 2 Old Mutare Road, Msasa, Harare to vote for me /us on my/ our behalf or to abstain from
him/her the Chairman of the Annual General Meeting, as my/our proxy to act for me/us at the Twelfth Annual General Meeting of the
1. 2.
Adoption of 2010 Annual Financial Statements together with the reports of the Directors and Auditors Appointment of Directors Approval of dividend recommended by the Company's Directors Approval of Directors' remuneration
IN FAVOUR OF
AGAINST
ABSTAIN
4.
3. 5.
6.1 Share buy-back
Appointment of Auditors and approval of their remuneration
6.2 Redenomination of share capital (Kindly tick where appropriate.)
Signature of Shareholder .................................................................................

PLEASE NOTE
Date......................................................................
If the address on the envelope of this letter is incorrect, please fill in the correct details below and return to the Secretary.
Name............................................................................................................................................................................................... Address............................................................................................................................................................................................ ........................................................................................................................................................................................................
Explanatory notes to resolutions for Annual General Meeting

1. Shareholders may insert the name of a proxy or the name of two alternative proxies of the shareholder's choice
follow. 2.
whose name has not been deleted shall be entitled to act as proxy to the exclusion of those whose names
deletion must be initialed by the shareholder. The person whose name appears first on the form of proxy and
in the space provided, with or without deleting the Chairman of the Annual General Meeting, but such
shareholder at the Company's annual general meeting . 3.
the proxy form in the form of a Board resolution confirming that the proxy has been appointed to represent the
The authority of the person signing a proxy or representing an institutional shareholder should be attached to
meeting. 4.
Econet Park, 2 Old Mutare Road, Msasa, Harare, Zimbabwe, not less than 24 hours before the time of the
Forms of proxy must be lodged at or posted to be received at the registered office of the Company Secretary,
in terms therefor should the shareholder wish to do so. 5.
the Annual General Meeting and speaking and voting in person thereat to the exclusion of any proxy appointed
The completion and lodging of this form of proxy shall not preclude the relevant shareholder from attending
shareholder wishes to vote. 6.
other than in accordance with these instructions, provided that he is satisfied as to the manner in which a
The Chairman of the Annual General Meeting may accept a proxy form which is completed and /or received
Any alteration or correction to this form must be initialed by the signatory/signatories.
Notes
Notes

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experience a whole

Behold I make all things new

Experience a whole new world

Econet Wireless Zimbabwe Limited Annual Report 2010

Econetworld. A strong brand to drive our data offering.

Econetworld comes to life as the data portal offering the latest

news, music, sports and entertainment among many exciting

Econet Wireless Zimbabwe Limited Annual Report 2010

subscribers 3 500 000

Econet Wireless Zimbabwe Limited Annual Report 2010

world-class standards and ethics.

efficient and high-quality telecommunications of uncompromising

Econet Wireless Zimbabwe Limited Annual Report 2010

Econet Wireless Zimbabwe Limited Annual Report 2010

T.P. Mpofu (Mrs) Non-Executive

D. Mboweni Chief Executive Officer

Econet Wireless Zimbabwe Limited Annual Report 2010

P.J. Campbell Non-Executive

K.V. Chirairo Finance Director

Econet Wireless Zimbabwe Limited Annual Report 2010

Econet Corporate Profile

employs in excess of 1 500 staff. SUBSIDIARIES

(inclusive of a 6% shareholding in the form of convertible instruments).

one of the world's leading manufacturers of smart card-based point-of-sale systems.

Econet Wireless Zimbabwe Limited Annual Report 2010

Econet Wireless Zimbabwe Limited Annual Report 2010

Chairmans Statement to the Shareholders

Diagram 1 VALUE ADDED STATEMENT

Diagram 2 COVERAGE MAP FOR EXISTING NETWORK FEBRUARY 2010

Paid to providers of Finance

Value invested in social programmes

Invested in funding long-term assets and working capital Paid to Government

Econet Wireless Zimbabwe Limited Annual Report 2010

* Subscribers as at 31 March 2010

Basic earnings per share Total dividend per share

US$ 160.1 million

in long term assets

US$ 362.8 million

T. Nyambirai CHAIRMAN OF THE BOARD 28 May 2010

Econet Wireless Zimbabwe Limited Annual Report 2010

Chief Executive Officers Operations Review

expensive to deploy over large geographical

where fixed line technology was too

people especially in developing countries

This has transformed the lives of many

innovations that were otherwise not possible.

coverage to allow more people to benefit

significant investment in infrastructure.

during the year under review is a result of this

2010. The financial performance achieved

mobile market to 73% as at 28 February

million subscribers and its share of the

increase its subscriber base to about 3.5

Wireless Global enabled the business to

A facility of US$ 93.9 million from Econet

embarked on is unprecedented in Zimbabwe.

The level of investment that the Group has

deployment strategy which will

The business is in the process of

operational efficiency and reliability.

the next financial year, will increase

network, which will be executed in

anticipate that optimisation of the