Annual Report 2021

Old Mutual Zimbabwe Limited
ANNUAL
REPORT 2021
DO GREAT THINGS EVERY DAY

Contents
Performance Results From Operations
4 Chairman’s Statement
21 Results From Operations
6 CEO’S review
8 Directors’ Report
Independent Auditors’ Report

Corporate Governance Report 22 Independent Auditors’ Report
9 Corporate Governance Report
Financial Statements
31 Group Statement of Profit Or Loss
Enterprise Risk Management 32 Group Statement of Comprehensive Income
33 Company Statement of Profit or Loss
14 Our approach to risk management 34 Group Statement of Financial Position
14 The risk governance structure 35 Company Statement of Financial Position
15 Compliance risk management framework 36 Group Statement of Changes in Equity
(including AML, CFT & CPF) 38 Company Statement of Changes in Equity
16 Overview of key risks 40 Group Statement of Cash Flows
20 Emerging trends & risks 41 Company Statement of Cash Flows
42 Notes to the Annual Financial Statements
Notice of the AGM

134 Notice of the Annual General Meeting
(AGM)
OLD MUTUAL ZIMBABWE LIMITED

Annual Report 2021 1
CONTACTS
Auditors:
Deloitte & Touche
West Block, Borrowdale Office Park, Borrowdale Road,
Borrowdale
Harare
Zimbabwe
Postal address:
P.O. Box 70
Harare
Zimbabwe
Registered office:
Mutual Gardens
100 The Chase (West)
Emerald Hill
Harare
Website
www.oldmutual.co.zw
Company Secretary
[email protected]
Certificate of incorporation no.

5684/1998
2
Annual Report 2021
PERFORMANCE
Chairman’s Statement
CEO’S review
Directors’ Report
CHAIRMAN’S STATEMENT
Old Mutual adheres to a Responsible

Business Framework which guides the
way we invest and conduct business.
The thrust is to ensure that we make a
positive impact on the customers and
the communities we serve. Our efforts in
2021 continued to be aligned to wider
efforts by the government and the rest
of the private sector to develop the
economy.
K.C. KATSANDE
Chairman
Economic Environment signs of remarkable resilience with strong demand being seen
The COVID-19 pandemic continued to be a dominant theme for industrial and high-end office space. As Old Mutual we
in 2021 although the economic impact was less severe than continued to pursue opportunities to invest in the property
in 2020. The country witnessed the second, third and fourth and infrastructure sectors.
waves of the COVID-19 pandemic during the year, resulting in
various lockdown restrictions that affected economic activity. Returns on fixed income securities were largely negative
Despite a commendable vaccination program driven by during the year despite the lower inflation. This resulted in
government, vaccine hesitancy seemingly curtailed efforts to diminished activity on the money market.
reach herd immunity in the year with a little over 31% of the
targeted population having been vaccinated by the end of Business Efforts
2021. We commend efforts embarked on by the government, 2021 challenged familiar ways of doing business, further
civil society and the private sector to ensure the effect of the increasing the imperative for greater adaptability and agility
pandemic was contained as much as possible. in the ways of doing business. Despite continued challenges
in the economic environment as well as the adverse impact
Government estimates 2021 economic growth to be 7.8%, of COVID-19, we remained committed to building a resilient
supported by a good agricultural season, improved mining business that delivers value to customers and shareholders.
output, increased industrial capacity utilisation and growth in
the construction sector. The Group continued to provide support to support its
customers across key economic sectors through lending,
Economic growth was complemented by a sustained investment, and the wide range of financial services that it
reduction in year-on-year inflation in 2021 under Monetary offers. Investments were made in a number of projects in
Policy measures that were designed to contain money sectors such as renewable energy, agriculture and tourism. The
supply. Annual consumer inflation closed the year at 60.7%, Group also continued to invest in the infrastructure sector in
compared to 348.6% for the year ended 31 December 2020. projects such as student accommodation to support tertiary
The official foreign currency market saw the local currency institutions, and buildings to support the manufacturing and
depreciating by 33%. The official exchange rate closed the distribution sector.
year at USD1:ZWL108.7 from USD1:ZWL81.8 at the start
of the year. Regulatory interventions through Statutory Old Mutual adheres to a Responsible Business Framework
Instrument (S.I) 127 of 2021 reflected concerns over the which guides the way we invest and conduct business. The
impact of the parallel market on the economy. The parallel thrust is to ensure that we make a positive impact on the
market continued to indirectly impact the pricing of assets in customers and the communities we serve. Our efforts in 2021
the economy while exerting pressure on operating costs and continued to be aligned to wider efforts by the government
business margins. and the rest of the private sector to develop the economy.
The Zimbabwe Stock Exchange (ZSE) All Share Index closed Our investment philosophy continued to be guided by
the period under review up by 311%. There was a notable Environment, Social and Governance (ESG) Principles. We seek
improvement in trading activity on the USD denominated to promote these principles amongst our business partners
Victoria Falls Stock Exchange (VFEX) following the listing of 3 and across our value chain in order to support sustainable
additional counters on the market during the year. growth into the future.
While the performance of the property market was affected

by the impact of COVID-19 on business, the sector showed
4
Annual Report 2021
Performance Business Reviews Corporate Governance Enterprise Risk Management Financial Statements
CHAIRMAN’S STATEMENT (CONT’D)
Financial Performance financial decisions. During 2021, this program was

The Old Mutual Zimbabwe Limited Group posted significant extended to and benefited 1 million people.
growth in the 2021 registering an inflation adjusted profit
after tax of ZWL28.8 billion up from ZWL10.5 billion achieved Appreciation
in the prior year. In historical cost terms, this translated to a On behalf of the Board, I would like to thank our customers for
profit after tax of ZWL35.6 billion up from ZWL11.1 billion their continued support. I also extend my appreciation to the
achieved last year. Group’s employees and management for their commitment
to continue to serve our customers, whilst at the same time
The Group sustained adequate capital, solvency, and ensuring that the business continued to adapt to changes in
liquidity levels to meet regulatory thresholds. We welcome the environment.
developments on the resolution of Legacy Debt. In terms of
the Finance Act number 7 of 2021, legacy debt that had been I also need to thank the wider industry which also recognised
registered with the Reserve Bank of Zimbabwe (RBZ) and the efforts and successes scored by several of our business
that meets certain criteria will now be assumed by Central units. In recognition of the Group’s efforts, the following
Government. Old Mutual carries a legacy debt amount of awards were received by Old Mutual Zimbabwe during the
USD96 million registered in terms of the requirements. The year:
Group will be working with the RBZ to have the legacy debt • Old Mutual was voted the biggest B2B brand in Zimbabwe
extinguished in terms of the Finance Act. at the Marketers’ Association of Zimbabwe’s 2021
Superbrands Awards.
The Group Chief Executive Officer’s report provides more • Old Mutual was ranked in the top 10 on the National
insights into the financial performance. Customer Satisfaction Index by The Chartered Institute of
Customer Management.
Dividend • Old Mutual Insurance Company (OMICO) was awarded
Based on the financial results for the year and balancing the Short-Term Insurance Company of the Year by the
with the need to maintain capital at certain levels to support Zimbabwe Independent in the 2021 Insurance Survey.
planned growth, a dividend of ZWL248 cents per share is • OMICO was the winner in the General Insurance category
proposed for the year. at the Contact Centre Service Excellence Awards.
• Old Mutual Investment Group (OMIG) was awarded the
Corporate Social Responsibility Initiatives 2021 Best Performing Asset Manager and Best Real Estate
In support of the national response to COVID-19, the business Fund by the Financial Markets Indaba (FMI).
continued to provide healthcare staff at a number of public • Old Mutual Life Assurance Company (OMLAC) was voted
and private hospitals with personal protective equipment the best Life Assurance Company in the Life Assurance
(PPE) and medical consumables. The extension of free life Sector at the Marketers Association of Zimbabwe’s 2021
cover to frontline healthcare practitioners continued into Super Brands awards.
2021. Old Mutual also ran a campaign in support of the • CABS was voted the first runner up in the Banking
ongoing National Immunisation Program. Sector and the seventh overall in the B2B category at the
Marketers Association of Zimbabwe’s 2021 Super Brands
Our innovation hub, Eight2Five, together with its partner the awards.
British Council continued the program to support budding • Old Mutual Finance (OMFIN) was awarded 2021 Fastest
entrepreneurs and successfully launched the 2021 Value Outreach Growing MFI of the Year by The Zimbabwe
Creation Challenge. This is a national initiative aimed at Association of Microfinance Institutions (ZAMFI).
identifying and supporting businesses and ideas that provide
innovative and sustainable solutions to Zimbabwe’s socio- Outlook
economic challenges. Economic growth is expected to continue into 2022. Inflation
and currency instability remain significant risks in the outlook.
In addition, the Group continued, through the Old Mutual It remains critical on the part of policy makers to sustain
Foundation Trust and other direct efforts by the business, to consistent policies into the future to promote confidence
embark on certain Community Investment initiatives. These amongst both local and international investors and business
include: operators. Equally important will be the efforts and measures
• Support extended to a number of public institutions to to promote stability on the currency market and to curb
rehabilitate certain infrastructure. For example, boreholes inflationary pressures. These efforts have been demonstrated
at multiple health centres and schools across the country in recent policy measures announced by the Ministry of
were rehabilitated. Support was also extended towards the Finance and the RBZ.
construction and equipping of the Lupane State University
Clinic. Commodity prices remain a key risk to economic growth
• Old Mutual partnered with the Traffic Safety Council of given the uncertainty in the global economy brought about
Zimbabwe and the Zimbabwe Republic Police to promote by the pandemic, and more recently the conflict between
road safety. Russia and Ukraine.
• Bursaries were granted to selected university students
studying Actuarial Sciences.
• The Old Mutual Women’s Network (OWN) campaign
enabled the procurement of some basic commodities for
the benefit of vulnerable members of the community at K. C. KATSANDE
identified institutions. Chairman
• An elaborate and well-structured Financial Literacy
training program continued to be rolled out, aimed at 30 March 2022
empowering individuals to make educated and informed

CEO’S REVIEW
In historical terms, the Group

recorded a profit before tax of
ZWL36.5 billion up 217% from
ZWL11.5 billion achieved prior
year.
SAMUEL MATSEKETE
Group Chief Executive Officer
Introduction An equivalent of USD27.8 million was deployed into

Our key initiatives for 2021 focused on: alternative (unlisted) investments in 2021. These investments
• Enhancing the value proposition to serve our customers increased the level of investments and support in critical
more effectively. economic sectors such as renewable energy, agro-exports,
• Accelerating the transformation of identified business and tourism. We registered significant progress on a number
areas to ensure the business continues to be fit for the of renewable energy projects, and despite COVID-19 related
future. disruptions, two of the projects were commissioned during
• Ensuring that the business sufficiently mitigates the risks the year. Similarly, Phase one of a flagship hotel in the Victoria
emanating from the external environment including the Falls in which we are a significant investor was commissioned
impact of COVID-19. and more land along the Zambezi River gorge, zoned for
tourism, was acquired for development into the future. In
Enhancing the Customer Value Proposition the property portfolio new buildings and infrastructure were
We continued to review our products in view of the changes constructed. These include warehouses to support players
in the environment and to respond to the needs of our in the manufacturing and distribution sector as well as the
customers. construction of student accommodation buildings in support
of efforts by tertiary institutions.
In the life company, the Guaranteed Fund continued to
declare bonuses monthly, thus passing value to participating In the banking business we grew the US dollar lending book to
clients frequently. Vesting conditions of the Guaranteed Fund support foreign currency generating activity in the economy.
were also reviewed in view of the level of returns generated This was backed by continuing lines of credit and a new Euro
by the fund’s assets, whilst also recognising that inflation 15 million facility established during the year. Our offering in
remains relatively high. The funeral product was enhanced, international payments, money transfer business and treasury
and an option was introduced to take the insurance cover in services was further strengthened. Retail loan products at
foreign currency. We piloted the funeral service offering at both CABS and Old Mutual Finance were reviewed to allow
one location during the year and this is now set to be scaled easier access, without compromising credit quality. Our
up. We launched the Flexi Term Plan product, designed to Custody and Trusteeship business continued to be of value
give customers more flexibility in adapting to the effects of to both local and international investors exploring investment
inflation. opportunities in various sectors of the Zimbabwean economy.
We extended our reach into the retail segment in the Pursuing Transformation
short-term insurance business. Under specially negotiated A key area of focus across the Group has been to continue
reinsurance arrangements, the general insurance business to adapt the business so that, whilst one eye is focused on
introduced risk covers in hard currency which broadened the effectively serving the current needs of customers, the other
ways in which insurance cover could be extended. focuses on ensuring that the business continues to be fit
for the future. The needs of our clients continue to evolve
As Old Mutual Investments Group, we listed on the Zimbabwe and so is our offering in response to the dynamic customer
Stock Exchange, the first Exchange Traded Fund (EFT). In its preferences.
first year the ETF returned 340% which compared favourably
against both the All-Share Index and inflation benchmarks.
6
Annual Report 2021
CEO’S REVIEW (CONT’D)
We launched the MyOldMutual digital platform during the Performance on the historical cost basis
year, allowing customers to insure and invest (on USSD and In historical terms, the Group recorded a profit before tax
WhatsApp), as well as access pension benefit statements and of ZWL36.5 billion up 217% from ZWL11.5 billion achieved
performing their banking transactions on WhatsApp. The prior year. Life and General insurance businesses net earned
performance of the MyOldMutual digital platform to date has premiums (NEP) grew by 251%, achieving NEP of ZWL8.9
been commendable with active digital users ahead of target. billion for the year ended 31 December 2021 up from ZWL2.5
We will continue to expand the breadth of services and billion in 2020. This growth was driven by a combination of
functionality that can be accessed on our digital platforms. increases in the nominal value of premiums as well as new
business inflows.
In addition to the MyOldMutual platform, we further
enhanced digital access to our products and services by Investment returns were ZWL126.4 billion up from ZWL49.7
launching the Eezy Credit product on mobile, enabling online billion achieved last year driven by significant gains on listed
USD transactions and configuring USD cash withdrawals on equities, investment properties and the translation of foreign
ATMs. CABS launched the Tap and Go Prepaid Mastercards. currency denominated investments.
The cards use the latest secure technology and for added
convenience, they allow customers to transact on point of sale Net interest income increased by 428% to ZWL4.9 billion
(POS) devices by simply tapping to pay without swiping their driven by growth in the interest earning assets. Fees and
cards. commission income grew by 237% to ZWL7.1 billion driven
by growth in volume of transactions in the digital space and
We made progress in automating more of our processes and an increase in nominal values of transactions.
replacing legacy systems with a view to optimise operating
efficiencies and support efforts to continuously improve Operating and administration expenses increased to ZWL8.3
customer experience. A review of the organisational design billion, an increase of 258% from prior year. Expenses continue
was done to ensure the structures across all operating units to be driven by inflationary pressures and the devaluation
effectively support our strategy and transformation agenda. of local currency impacting foreign currency denominated
expenses. The business also spent just under ZWL500 million
Defending the Business Against Emerging Risks Including the on a restructuring exercise completed in December 2021
Impact of COVID-19 resulting from the organisational design exercise undertaken.
COVID-19 and its associated risks remained significant in
2021. A fourth wave of the pandemic unfolded towards the Looking Ahead Into 2022
end of the year driven by the Omicron variant. In response As we look ahead into 2022, we remain focused on continuing
the business continued to prioritise the safety of customers, to adapt our offering to customers through strategic and
employees and the wider community. We escalated efforts to sustainable innovations, investments and partnerships that
support remote interactions with our current and prospective generate value for our customers and all our stakeholders. We
customers. will continue to pursue growth opportunities in support of our
integrated financial services offering.
Most of the Group’s employees have been enabled to work
from home to ensure continuity of service provision. Customers Appreciation
that need to physically access branches continue to be served We appreciate the unwavering support that we continue
under appropriate health protocols which promote the safety to receive from our growing base of valued customers
of customers and staff, including strict screening protocols, throughout the year. On behalf of management and all
regular sanitisation of workplaces and provision of personal colleagues in Old Mutual Zimbabwe, I would also like to
protective equipment (PPE) to staff. Ongoing reviews of our extend sincere appreciation to our Boards for the guidance
products and processes continued to factor in COVID-19 and steer they continue to give us, and to all our regulators
related and other emerging risks. for very productive engagements over diverse areas of our
business.
Financial Performance
Inflation Adjusted basis

The Group achieved an inflation adjusted profit before
tax of ZWL29.5 billion up from ZWL9.4 billion achieved in
2020. Inflation adjusted total assets increased by 69% from SAMUEL MATSEKETE
ZWL152.6 billion as at 31 December 2020 to ZWL258.2 billion. Group Chief Executive Officer
The nominal growth of 175% was higher than inflation of
60.7% for the year. 30 March 2022
The Group sustained adequate liquidity, capital and solvency

levels that met regulatory thresholds and support planned
growth into the future.

DIRECTORS’ REPORT
Responsibility the financial statements to the fact that prevailing market

The directors are responsible for the preparation and fair conditions in Zimbabwe have required the use of more
presentation of the Group’s full year financial statements, judgement than would normally be the case around areas
comprising the statement of financial position as at 31 such as property valuations and valuation of unlisted
December 2021; and the statements of profit or loss; investments.
comprehensive income; changes in equity and cash flows
for the year ended 31 December 2021; and the notes to the In the case of property valuations, for the 2021 financial year,
financial statements which include a summary of significant the business decided that the US Dollar valuations would no
accounting policies and other explanatory notes, in longer be appropriate. This is after considering factors such
accordance with International Financial Reporting Standards as the currency in which rental income is earned as well as
and the requirements of the Companies and Other Business market factors such as inflation. Accordingly, valuations in ZWL
Entities Act (Chapter 24:31). In addition, the directors are have been adopted. Market breadth however has been limited
responsible for preparing the Directors’ report. The directors thus increasing the level of reliance on level 3 valuation inputs,
are also responsible for such internal control as the directors where significant management and professional judgement
determine is necessary to enable the preparation of financial was required. Areas where significant judgement has been
statements that are free from material misstatement, whether applied include capitalisation rates where for industrial,
due to fraud or error, and for maintaining adequate accounting commercial, retail and office buildings, adjustment factors are
records and an effective system of risk management. The applied to rates implied from completed market transactions,
directors have assessed the ability of the Group to continue depending on factors such as location, occupancy levels and
as a going concern and have no reason to believe that the tenant mix.
business will not be a going concern in the foreseeable future.
With regards to the spot exchange rate, the board considers
Compliance with legislation the official exchange rate from the weekly auction overseen
These financial statements, which have been prepared on by the RBZ to be appropriate, as exchangeability has been
an inflation adjusted basis, are based on the application of demonstrated at that platform during the year in the
inflation indices on underlying accounting records which settlement of various external obligations by the Group.
were maintained on the historical cost convention (except for
fair value measurement where applicable). The statements In addition, there are a wide range of views in the market
agree with the underlying books and records and have been concerning economic variables such as inflation and
prepared in accordance with the accounting policies set out exchange rates. While management believe that these factors
in note 2, and comply with the disclosure requirements of the have been sufficiently considered in the full year financial
Companies and Other Business Entities Act (Chapter 24:31) statements and that the required accounting judgements
and the relevant regulations made there under, the Insurance are appropriate, additional disclosures and sensitivities
Act (Chapter 24:07), the Pension and Provident Funds Act have been provided and readers of the financial statements
(Chapter 24:09), the Microfinance Act (Chapter 24:29), the should pay close attention to these. Details of key accounting
Building Societies Act (Chapter 24:02), the Banking Act judgements and sensitivities are provided in Notes 2.3, 18,
(Chapter 24:20), the Asset Management Act (Chapter 24:26), and 25.2. The directors are of the view that the accounting
the Collective Investments Schemes Act (Chapter 24:19), and treatments as adopted are appropriate to the extent which
the Securities Act (Chapter 24:25). is practically possible given the peculiarities of the Zimbabwe
economic and regulatory environment. Users of the financial
Compliance with IFRSs statements are however encouraged to exercise due caution
The financial statements are prepared with the aim of and judgement.
complying fully with International Financial Reporting
Standards (IFRSs). IFRSs comprise interpretations adopted by Capital
the International Accounting Standards Board (IASB), which The issued share capital is made up of 249,035,156 “A” class
include standards adopted by the IASB and interpretations shares of ZWL0,0000032 each, 83,011,718 “B” class shares
developed by the International Financial Reporting of ZWL0,0000032 each, 1 redeemable preference share of
Interpretations Committee (IFRIC) or by the former Standing ZWL1.00 and 1 “A” redeemable preference share of ZWL1.00.
Interpretations Committee (SIC). The shares are owned by Old Mutual Zimbabwe Holdco
Limited (75%); as well as Indigenisation Trusts and various
Complying with IFRSs achieves consistency with the financial other shareholders (22.2%) and a strategic partner (2.8%). The
reporting framework adopted by the ultimate parent 1 redeemable preference share issued is owned by Old Mutual
company, Old Mutual Limited, which is incorporated in South (Zimbabwe) Dividend Access Trust and the 1 “A” redeemable
Africa. Using a globally recognised reporting framework also preference share by OML (Zimbabwe) Dividend Access Trust.
allows comparability with similar businesses and consistency
in the interpretation of the financial statements. The IFRS
Conceptual Framework, provides that in applying fair Directors
presentation to the financial statements, entities should go Mr KC Katsande* (Chairman)
beyond consideration of the legal form of transactions and Mr S Matsekete** (Group Chief Executive Officer)
other factors impacting on the financial statements to also Mr IT Mashinya** (Group Chief Operating Officer)
consider the underlying economic substance therein. Mr NTT Mudekunye** (Group Chief Financial Officer)
Mr C Chinaka
The directors are not aware of areas of non-compliance Mr A Daka
with IFRS in the financial statements for the year ended 31 Dr CL Dhliwayo
December 2021. However during 2020 compliance with IFRS Dr K Mandevani
could not be achieved due to the recognition of a receivable Mrs N Samuriwo
in connection with the legacy debt registered with the RBZ. Ms C Ross
*Mr K C Katsande was appointed the Board Chairman with

Accounting judgments
effect from 28 January 2021.
The directors would like to draw the attention of users of
**Denotes Executive Director.
8
Annual Report 2021
CORPORATE
GOVERNANCE
CORPORATE GOVERNANCE REPORT
Board and Board Committees The Audit Committee recommended at the annual general
The Board has (10) directors comprising three (3) executive meeting of 19 August 2021, the appointment of Deloitte &
directors and seven (7) non-executive directors, three (3) of Touche Chartered Accountants (Deloitte) to replace KPMG
whom are independent. Part of its role is to ensure that each Chartered Accountants (KPMG) as External Auditors for the
subsidiary company complies with its regulatory landscape, as Group. This change in auditors for the year ended 31 December
some of the entities are separately regulated by the Reserve 2021 from KPMG to Deloitte was in line with changes
Bank of Zimbabwe (RBZ), the Insurance and Pensions happening at the parent company level as well as the need to
Commission (IPEC) and / or the Securities and Exchange rationalise audit arrangements within the Zimbabwean Group.
Commission of Zimbabwe. Being the Controlling Company of
the Central Africa Building Society, OMZIL is also regulated by The Significant Matters relating to the annual financial
the RBZ. OMZIL also subscribes to the rules of the Financial statements are covered in the Directors’ Report which details
Securities Exchange (Finsec) as 25% of its shares are listed on OMZIL’s compliance with the International Financial Reporting
the Alternative Trading Platform operated by Finsec. Standards (IFRS). Detailed accounting policies which have
been applied in preparation of the annual financial statements
As at 31 December 2021, the operating subsidiaries of OMZIL are included in this annual report.
were as follows:
1. Old Mutual Life Assurance Zimbabwe Limited (OMLAC); The Audit Committee was satisfied with the performance of
2. RM Insurance Holdings Limited (RMIH), the holding the Group Chief Financial Officer and the Finance function and
company of Old Mutual Insurance Company (Private) effectiveness of the Chief Audit Executive and the arrangements
Limited (OMICO); for Internal audit. The Committee was also happy with the
3. Central Africa Building Society (CABS); effectiveness of the design and implementation of internal
4. Old Mutual Investment Group Zimbabwe (Private) Limited financial controls as OMZIL did not suffer any material financial
(OMIG); loss, fraud, corruption or error due to significant weakness in
5. Old Mutual Securities (Private) Limited (OMSEC); and the design, implementation or execution of internal financial
6. Old Mutual Finance (Private) Limited (OMFIN). controls during the year.
The Board adheres to the principles of corporate governance The arrangement in place for Combined Assurance is as covered
derived from the following: under the Risk section of this report. The Audit Committee was
a. The Companies and Other Business Entities Act [Chapter satisfied with the level of effectiveness of Combined Assurance
24:31]; within OMZIL. All three lines of assurance meet regularly and
b. The Banking Act [Chapter 24:20] and the Reserve Bank of coordinate their assurance activities to avoid duplication and
Zimbabwe Corporate Governance Guideline; to ensure focus is directed to areas that present material
c. The 2016 Insurance and Pensions Commission (IPEC) risk exposures to the Group. Combined Assurance reports
Directive on Governance and Risk Management for and minutes are tabled to the Group Risk & Compliance
Insurance Companies; Committee, covering progress updates on the delivery of the
d. The Zimbabwe National Code on Corporate Governance; combined assurance plan and findings and recommendations
e. The King IV Report on Corporate Governance and from the combined assurance activities.
f. The Old Mutual Group Governance framework.
Group Risk and Compliance Committee
The directors are aware that they may take independent The Committee reviews the management of risk and the
professional advice at the Company’s expense, if necessary, for monitoring of compliance effectiveness within the Group.
the furtherance of their duties. The Committee reviews the policies and overall process for
identifying and assessing business risks and managing their
Board Composition and Board Committees impact on the Group. The Chairman of this Committee is an
The Board has ten (10) directors comprising three (3) executive independent non-executive director.
directors, four (4) non-executive directors and three (3)
independent non-executive directors. The Board has three Group Remuneration and Nominations Committee
committees in place, that is, the Group Audit Committee, The role of the Group Remuneration and Nominations
the Group Risk and Compliance Committee, and the Group Committee is to oversee the appointment of directors to
Remuneration and Nominations Committee. the OMZIL Board and the Boards of its subsidiary entities as
well as ensuring that appropriate remuneration is applied for
Group Audit Committee management and staff in the Group. The Committee is chaired
The Group Audit Committee is responsible for reviewing the by an independent non-executive director.
principles, policies and practices adopted in the preparation
of the OMZIL Group accounts and to ensure that the annual Director Training
financial statements of the Group comply with all statutory, During the year 2021, Corporate Governance; Anti-money
regulatory and internal governance requirements. The Laundering and Counter-terrorism Financing (AML/CFT) and
Chairman of this Committee is an independent non-executive Environmental, Social, and Governance (ESG) training sessions
director. were conducted for the directors in the various OMZIL Group
subsidiaries.
10
Annual Report 2021
CORPORATE GOVERNANCE REPORT (CONT’D)
Board and Committee attendance

During the year ended 31 December 2021, the Board and its three committees met at least four times each.
OMZIL Board of Directors
Oct (Strategy
Feb May Aug Day) Nov
KC Katsande P P P P P
(Chairman)
S Matsekete P P P P P
(Group Chief Executive Officer)
IT Mashinya P P P P P
(Group Chief Operating Officer)
NTT Mudekunye P P P P P
(Group Chief Financial Officer)
C Chinaka P P P P P
(Non-Executive Director)
A Daka P P P P P
(Independent Non-Executive Director)
(Dr) C Dhliwayo P P P P P
(Dr) K Mandevani P P P P P
C Ross P P P P P
N Samuriwo P P P P A
Remuneration and Nominations Committee

Feb May July Nov
KC Katsande (Chairman) P P P P
C Chinaka A P A P
(Dr) K Mandevani P P P P
N Samuriwo P P P P

CORPORATE GOVERNANCE REPORT (CONT’D)
Board and Committee attendance (con’d)
Group Audit Committee

Feb May Aug Nov
A Daka (Chairman) P P P P
(Dr) C Dhliwayo P P P P
(Dr) K Mandevani - P P P
N Samuriwo P P P P
Group Risk and Compliance Committee

Feb May Aug Nov
(Dr) C Dhliwayo (Chairman) P P P P
A Daka P P P P
N Samuriwo P P P P
Key
- :Not yet appointed
P :Present
A :Apology
12
Annual Report 2021
ENTERPRISE RISK
MANAGEMENT
Our approach to risk management
The risk governance structure
Compliance risk management framework (including AML, CFT & CPF)
Overview of key risks
Emerging trends & risks
ENTERPRISE RISK MANAGEMENT
OUR APPROACH TO RISK MANAGEMENT
Old Mutual Zimbabwe Limited Group (‘OMZIL’) applies an integrated approach to managing current and emerging risks. Risk
management has been embedded throughout OMZIL and plays a key role in business strategy and planning to ensure sustained
and consistent returns for customers and shareholders. Core to our business is taking on calculated risks, optimising the risk-
return trade-off and effectively managing the risks within the Board set risk appetite limits. The thrust remains on providing
agility, responsiveness, and foresight to help the attainment of the Group’s objectives. To do this, we have implemented a
Group Enterprise-wide Risk Management Framework (‘the framework’).
The framework sets out how OMZIL organizes and applies its risk management practices to ensure that all activities are
conducted in line with the principles and limits mandated by the Enterprise Risk Management Policy (‘ERM Policy’).
The framework comprises the following major elements:
• Risk governance structure, covering the governance committees exercising oversight of the risk management activities;
• Risk governance documentation, i.e. policies and processes including the ERM Policy;
• Key risk management principles;
• Risk culture;
• Combined assurance;
• Risk control framework;
• Risk strategy and appetite framework, including limits;
• Compliance risk management;
• Management information systems;
• Line 2 Actuarial (within OMLAC); and
• Group Forensic Services (GFS).
The main objective of the framework is to align strategy, capital, process, people, technology, and knowledge in order to
evaluate, exploit business opportunities, manage uncertainties and threats in a structured and disciplined manner, ensuring
that risk and capital implications are considered when making strategic and operational decisions. A more detailed outline of
the OMZIL ERM Framework was covered in the 2019 and 2020 annual reports.
THE RISK GOVERNANCE STRUCTURE
The OMZIL Board remains ultimately responsible and accountable for ensuring that risk management and the internal control
systems are sound, adequate, and effective. The Board reviews the outcomes of the ERM process on an ongoing basis to deliver
on its roles and responsibilities in risk management. It ensures that clearly defined ERM roles and responsibilities for the Group
Chief Executive Officer and Business Unit Managing Directors, the management teams across the Group, sub-committees (at
management and board levels), and key functions, are in place, aligning the interests of management with those of customers
and shareholders, through appropriate performance contracting and remuneration structures. The Group risk governance
structure incorporates regulatory requirements for the subsidiary entities and the OMZIL group holding company. The figure
below depicts the OMZIL Risk Governance Structure, plus the other components of the OMZIL ERM Framework.
Figure 1: Enterprise Risk Management Framework & Risk Governance Structure
OMZIL Board & Business Unit (BU) Boards

Group & BU Board
Audit Committees
ERM Framework
Three Lines of Assurance
RISK CULTURE
Risk Strategy & Appetite

(Incl. metrics)
Policies, Processes, Standards
Group & BU Board Practices & Guidelines Line 1 Management Line 2 Risk & Compliance Line 3 Internal & External
Risk & Compliance Assurance Assurance Audit Assurance
Committees Stress Testing & Scenario Analysis
Risk identification and Guidance/Advice on Sound Independent assurance on
Risk Management Information management Risk& Control System the effectiveness of
Systems Controls implementation Compliance Advice & governance,
Process Owners Reviews Oversight and risk management and
Group & BU EXCOs, challenge to Line 1 compliance functions,
Compliance Framework
Combined Assurance Line 2 Actuarial GFS as well as the system
Forum, Stress & Scenario Combined Assurance Framework
of internal control.
Testing Committee,
Model Risk Committee
Shareholders, Regulators & Customers
14
Annual Report 2021
ENTERPRISE RISK MANAGEMENT (CONT’D)
The following section provides a snapshot of the OMZIL 2021 Compliance Risk Management Framework.
COMPLIANCE RISK MANAGEMENT FRAMEWORK (INCLUDING AML, CFT & CPF)
The OMZIL Group Compliance Management Framework, which is a key pillar of the ERM Framework outlines the principles
underlying the Compliance Programme and demonstrates an integrated and consistent approach to compliance risk
management. The major elements of the OMZIL 2021 Compliance Risk Framework are as depicted in the figure below:
Figure 2: Compliance Risk Management Framework
Conduct Risk & Ethics

Compliance Oversight of the Customer
Feedback and Complaints Resolution
Observance of TCF principles.
Compliance Policy, Plans Programs

Regulatory Compliance Policy plus Compliance
Mandate,AML, CFT & Sanctions Policy, Compliance
Risk Management Plans (Regulatory Universe),
Compliance Monitoring Plans, AML, CFT & Combatting
Proliferation Financing Risk Management &
Compliance Program.
Compliance Strategy
(Approach to Compliance Risk
Management &link with Business
Strategy).
Compliance Risk Appetite

/Preference
(Zero appetite for deliberate
Non-Compliance & Being Uninformed
of Regulatory Changes).
Compliance Risk Appetite

/Preference
(OMZIL & BU Boards, Board Risk &
Compliance Committees, EXCOs,
Independent Compliance function).
Compliance Culture
(embedded in operations,
includes training and
awareness)
The Compliance
The Compliance Framework
Frameworkwas revisedsoso
was revised that
that it remains
it remains relevant
relevant and adequate
and adequate to drive compliance
to drive compliance risk management
risk management in the Group in the
Group and
and thisthis version
version will
will be be rolled
rolled out in 2022.
out in 2022.
THE COMBINED ASSURANCE & THE THREE LINES OF ASSURANCE
As previously covered in prior annual reports, the Group’s combined assurance framework establishes the three lines of
assurance across all levels of the organization, focused on increased collaboration and sharing of information as well as
reducing duplication of activities. The combined assurance plan provides a consolidated view of all assurance activities in
relation to the key residual risks and controls in the business. Focus areas are identified through consideration of the control
environment, residual risk and the residual risk versus tolerance assessments. The execution of the plan is reported in each
Board Audit Committee; and the plan is adjusted from time to time to take into account any new risks which are prioritised or
other operational impacts.
The development and maintenance (annual review) of the combined assurance framework, which also forms a key part of the
risk management system, is the responsibility of the risk function with oversight and support provided by internal audit.
OMZIL Group is currently entrenching the ‘Building the STRUCTURE’ maturity level and moving towards the ‘Established &
EMBEDDED’ maturity level, which involves ensuring a consistent use of the assurance methodology across all lines of assurance,
formalising the line 1 assurance function and embedding risk culture, including combined assurance, across the organisation.

OVERVIEW OF KEY RISKS
The risk landscape was significantly influenced by the external environment, in particular, macro-economic impacts,
compounded by the COVID-19 pandemic. A detailed assessment of the top risks as at end of 2021 is provided below:
Table 1: OMZIL Top Risks

Risk Category &
Definition Impact Mitigating Actions
External Risk - Risks Macro-economic: The economy was under significant The Group is continuing with the strategy of
outside the control of the pressure from currency depreciation, with the sharpest defending key elements of the business and
Group which are difficult decline recorded in Q4 2021. This had pass-through ensuring value preservation for customers and
to predict or manage. effects on the levels of inflation. The impact on the Group’s shareholders, through investments in real assets. The
businesses was on the levels of operational expenses and performance of underlying assets directly influences
the need for regular review of pricing levels in order to asset-based fees and investment returns.
defend operating margins while remaining competitive.
The Group continues to seek opportunities to offer
Environmental: Business operations were negatively more customer-led solutions, through refining the
impacted by the COVID-19 pandemic as some staff customer value propositions using information from
members got infected and branches were closed market and customer engagements.
intermittently in line with the World Health Organisation
(WHO) protocols. The Group continues to encourage staff members
and customers to be vaccinated so as to achieve
Environment, Social and Governance (ESG) issues have immunity against future strains of the COVID-19
become topical and in response, the business developed virus. Operationalisation of the Group ESG Policy is
a policy for the management of ESG risks. the next action around adoption of ESG standards.
Competition: While competition in the market is intense, Residual climate change risk is managed through
the major Business Units within the Group remained risk transfer arrangements under insurance and
within the top 5 in their respective sectors. reinsurance schemes by the lending entities and the
short-term insurance business, respectively.
Climate Change Risk: The country had a favourable
rainfall pattern for the 2021/2021 farming season. For the On the adoption of emerging technologies, notably
2021/2022 agricultural season, forecasts remain optimistic. the Digital Currency, the Group will be guided by
The Group’s agricultural exposures through CABS, OMFIN legal and regulatory developments.
and OMICO (under the weather index product) will need
effective risk mitigation on an ongoing basis due to
increasingly unpredictable weather patterns.
Emerging Technologies: The RBZ is considering introducing

a Central Bank Digital Currency, instead of adopting
cryptocurrencies. The Group’s future strategy should therefore
take into account the risks and opportunities to be presented
by this development.
Market Conduct Risk- Equity & property volatility risk: The listed equities The business continues with the strategy of preserving
Risks relating to adverse market had a good performance with a full year return of value by investing in real assets, as guided by the Board
changes to the balance 311% ahead of the inflation level of 61%. Given the skew approved strategic asset allocations and customer
sheet or future earnings towards listed equities for the shareholder investment investment mandates. However, Old Mutual has also
resulting, directly and in- portfolio, shareholder investment returns for the year sought to mitigate the effects of market volatility by
directly, from fluctuations 2021outperformed the level of inflation. The property pursuing opportunities towards increasing exposure
in the market prices of market partially recovered during the year after the to alternative investments in the private equity and
financial instruments. COVID-19 lockdowns. Rental yields remained within infrastructure spaces.
internal targets.
For managing property risk, there is a strategy to
Foreign Exchange Rate Risk: The Group’s open currency dispose properties on a case-by-case basis from non-
gap position was positive as of 31 December 2020 and as of performing sectors of the property market.
31 December 2021. Within the context of a multicurrency
environment, management actions are, however, in place There is now a framework on the assumption of the
to reduce the net impact of currency risks on the Group, to blocked funds (legacy debt) by Government, subject to
within acceptable levels. validation and reconciliation of the amounts. This will
further positively impact the Group’s foreign currency
Interest rate risk: At the Group’s major lending business, net open position. To the greatest extent possible,
CABS, there was pressure on real returns. The microfinance management will aim to achieve the matching of
business experienced real returns as lending rates were foreign currency denominated liabilities with assets in
above inflation levels. There is pressure for deposit rates to the same currency.
continue increasing, in line with inflationary pressures.
Loan repricing in line with market trends and RBZ
guidelines, is being done, to mitigate the impact on
interest margins.
16
Annual Report 2021
Risk Category &

Liquidity Risk - The During the year under review, the Group remained able Asset allocation in the investment portfolio ensures
risk that available liquid to meet its short-term obligations within the set targets. availability of liquidity for the Group’s capital and
assets will be insufficient The revised RBZ’s Open Market Operations have resulted operating expenditure requirements.
to meet changing market in excess balances above the stipulated limits for banks
and business conditions, being converted to Non-Negotiable Certificates of Deposit Cash flow management strategies are also in place,
liabilities, funding of asset (NNCDs) at a rate of zero (0) percent with tenures ranging which include regular cash flow forecasting.
purchases, or an increase from five (5) to thirty (30) days. The liquidity risk indicators
in client demands for within CABS, however, remained within targeted ranges. The Group seeks to improve the hard currency liquidity
cash. position through introduction of USD products.
The Group also sources foreign currency from the

interbank and auction market.
There are Liquidity/Funding contingency arrangements

in place for all OMZIL Business Units, for cover under
stress conditions.
Legal and Regulatory The year 2021 witnessed a number of regulatory and The Group has an adequate Compliance Risk
Compliance Risk - The legislative developments encompassing the enactment Management Framework underpinned by a
risk of not applying of the Data Protection Act, Market Conduct directives compliance strategy, compliance program,
or conforming to the (e.g. IPEC’s Treating Customers Fairly Directive), Exchange operating model and a compliance management
laws, or breaching laws, Control regulations, Cyber Security regulations, Anti- system that is bolstered by a strong compliance
regulations or directives, Money Laundering, Countering the Financing of Terrorism risk management culture. There is oversight by the
resulting in fines, & Countering Proliferation Financing (AML/CFT/CPF) Boards and Risk & Compliance Board Committees
sanctions, reputational directives, risk-based capital management frameworks over regulatory compliance risk, setting a tone from
damage and/or financial and heightened regulations in the pensions and provident the top. The Group has zero appetite for deliberately
loss. funds industry. Implementation of adequate internal contravening regulations and legislation and for
compliance risk management controls translates to being blindsided by regulatory changes, with any
increased compliance costs including the requirement breaches requiring immediate implementation
for additional human resources. There were no material of remedial action plans to provide pathways
regulatory penalties, sanctions or fines for transgressing to full compliance. Regulatory obligations and
statutory obligations and regulatory requirements during requirements are tracked and monitored closely,
the year under review. On an ongoing basis we seek to and regulatory changes are managed through
respond to the need to ensure high compliance levels conducting impact assessments and determining
through a regular review of the adequacy of staffing in the the state of readiness to comply before the changes
compliance departments as well as conducting regular become effective. The Group’s compliance risk
staff training. management system has also incorporated ESG
components as a response to emerging compliance
issues. The Group continues to drive market conduct,
data protection and AML training processes and
procedures, as part of the compliance program.
Operational Risk - Risks The operational risk environment driven by rapid Proactive fraud detection capabilities are being
relating to failure of technological change and pressure on disposable incomes enhanced, through the implementation of a fraud
business operational have led to heightened fraud risks. External fraud cases detection system across the Group.
processes, workplace drastically reduced following the implementation of
safety, including loss and enhanced bank card fraud monitoring and detection Fraud Risk Assessments for proactive fraud risk
damage of the Group’s controls, by the Group’s ICT and GFS departments. detection and management, are being conducted
physical assets, property across the Group.
and facilities. It includes We continue to work closely with our third party outsourced
risks relating to fraud, services partners for alignment in the management of risks. The business is managing outsourcing risks by
theft, bribery, corruption enforcing adherence to performance standards as
or internal irregularities. Increased automation and digitalisation have required covered in the service level agreements (SLAs) with
ongoing review of processes, internal procedures and outsource partners.
controls. COVID-19 impacted business processes due the
intermittent opening and closure of some branches. The business is working on improving the model
risk environment under the oversight of the Model
Power outages persisted during the year, affecting to some Risk Committee and the Group Board Risk and
extent, the work from home (WFH) arrangement, adopted Compliance Committee.
in response to the persisting COVID-19 pandemic.
Implementation of the Control Environment
There were no material model risks that resulted in Improvement Program (CEIP) which is aligned to the
operational losses over the year 2021. COSO Internal Control Framework continues, with a
final delivery date of 2023.
WFH challenges are addressed through provision of

power back-up facilities for critical staff in the end-
to-to-end client servicing processes. In addition, the
hybrid work model was adopted effective 1 November
2021.

Risk Category &

Information Technology Information Security – Cybercrime: During the year there was Several software and operating system updates
Risk - Risks of loss due a notable increase in the number of reported vulnerabilities, (patches) that address security vulnerabilities were
to an inadequate or but the risk remained under control as there were no external released into the environment during the year. The
inefficient information attacks on the Group’s systems. The risk is heightened as the cybersecurity programme is continually updated
security, failure of systems economy witnesses increased interconnectivity of financial and aligns to the Old Mutual Limited programme.
and/or related processes. ecosystems and digitalisation, coupled with remote working A cybersecurity incidence response team is in place.
This includes the risk and adoption of advanced technologies. There are firewalls in place to protect the estate.
of failure to protect
the confidentiality, Technology/System Risk: System challenges were experienced Phishing simulations, cyber risk awareness campaigns
integrity, or availability of from key systems especially at the bank, adversely impacting for all staff, training and upskilling of ICT personnel on
information technology business operations, and customer experience, and some information security, are being done.
assets, whether electronic recurring risk events were witnessed. System availability
or otherwise, from was, however, largely above the 98% target during the year. Disaster recovery (DR) arrangements are in place.
unauthorised access, use, Reviews of DR processes to improve resilience and
disclosure, disruption, In the general insurance business, full migration of all availability are done.
modification, or products to the new system, Pure, from i90 is in progress
destruction. to manage technical debt, along with upgrade of the There is multi-factor authentication for all virtual
Group’s infrastructure to the supported software versions private network (VPN) connections.
and equipment, to within useful life.
Penetration tests for all public facing sites and interfaces
are conducted.
The system performance and uptime continues to

receive attention by the ICT team, in consultation with
system vendors.
Strategic Risk - The Innovation: New products and services were developed The Group continues to refresh the product and
risk that discretionary during the year mainly under the digital initiatives. service offering through innovation, especially
decisions are made that Automation of internal processes was done through the involving the continued implementation of Digital
adversely affect future implementation of various systems such as the Liquidity and Data initiatives.
earnings and/or the sus- Risk Management system at CABS and the adoption of
tainability of the business. robotic process automation for key processes across the There are plans in place for opening the Harare and
group, for efficient customer servicing. other branches for the Funeral Services business, in
2022.
Business Model/Concentration: The Group remained
cognisant of the need to remain future fit and continued OMLAC is also working on introducing automatic
to pursue the digital strategic thrust, through the premium escalating products.
embedment of the Digital and Data activities in the
operations and business planning objectives. The Group’s
businesses continued with the strategy of offering USD
products and services. Targets were met in the lending
and short-term insurance businesses.
The Funeral Services Business under the life company was

rolled out with the first branch in Bulawayo going live in
July 2021.
18
Annual Report 2021
Risk Category &

People Risk - Risks Performance & Productivity: The risk of employees failing There has been adoption of a hybrid working
relating to the business to meet the targets and standards set in performance arrangement where staff work from the office at least
workforce resourcing, contracts due to the COVID-19 pandemic impacts two days a week.
utilisation and their (including the remote working arrangements), and anxiety
productivity, skills, from economic challenges, remained under control, as Performance reviews are conducted for assessing
competencies and most targets were met. delivery of contracted goals.
behaviors to manage
and operate the business, Talent Attrition & Capacity: There was increased There is enforcement of the Code of Ethics, known as
including engaging with competition for skills from other players in the financial the Maadili Charter.
customers. services sector. A new emerging threat is from international
companies overseas which have adopted the work from For talent retention, there is continuous reviews of the
anywhere policy. As of 31 December 2021, the Group’s staff staff remuneration to remain competitive.
turnover rate, however, remained within risk limits. Key
positions were filled during the year. There are succession planning arrangements in place
for key positions to ensure continuity of business
Culture & Behaviour: There was an increase in the overall operations.
culture index score from 2020 – 2021 across all dimensions.
Critical skills development programmes are in place.
Health, safety, wellbeing, and morale: The pandemic and
current working from home arrangements continued to Management actions are being implemented to
impact on staff health, safety, and wellbeing. improve areas of concern as indicated through the
culture surveys.
Shortage of/Failing to acquire critical skills: The risk is
of unavailability/lack thereof of emerging skills such as There was implementation of wellness initiatives in
data scientists, digital experts etc., to ensure the business collaboration with medical services providers. Medical
is future fit to meet evolving customer requirements and support to employees affected by the pandemics was
to embrace new technologies/innovate, with impacts on provided.
business growth and market shares. This was considered
low during the period with the Group managing to hire Risks arising from the organisational design exercise
data scientists and digital experts as part of resourcing its will be managed through change management
Digital and Data function. programs, training and redeployments.
Organisational Design & Workforce: This concerns risks

that the Strategic Workforce Planning and Organisation
Design & Structure does not support or enable the
future strategy or evolving needs of the organisation
resulting in failure to meet business plan objectives and in
excessive staff costs. The business carried out a groupwide
organisational design exercise which informed skills
and processes streamlining with a view to rationalising
headcount and costs.
Market Conduct Risk - There is increased focus by IPEC on the Insurance TCF principles have been embedded in all product
Risks relating to decisions Industry’s adoption of the “Treating Customers Fairly” (TCF) development and customer engagement processes.
or behaviours that may principles. The focus on conduct risk is likely to become Customer complaints handling automation under
adversely impact fair more pronounced as distribution channels become Phase 2 is underway to allow for quicker resolution
customer outcomes or more digitalised with minimal direct contact with clients. of customer complaints.
market integrity. There are also legacy issues around loss of value due to
macro-economic factors where engagements have been
conducted with clients and regulators.
Insurance Risk - The As a significant player in both the life and general insurance The following measures are in place to manage
risk of adverse losses sectors, we need to ensure that underwriting practices the risk: Data driven pricing models and
due to inadequate ensure that risks are adequately priced to support the continuous repricing to ensure claims experience
underwriting, pricing, settlement of claims as they fall due, the raising of is closer to targeted; and reserves and reinsurance
reserving assumptions adequate reserves while supporting adequate margins for arrangements are in place to mitigate any likely
and/or volatile claims the business. This risk is heightened in an environment of increases in claims.
experience materially rapidly increasing costs, with inflation potentially resulting
impacting earnings and in levels of cover for policyholders being inadequate if Additional actions being taken given the multi-
capital. Insurance risk premiums do not keep up with inflation. currency environment include; matching
includes Life Insurance of currencies for claims and premiums and
risks (Mortality, Disability, reassessment of reinsurance arrangements to
Longevity and Life). determine the appropriate retention levels per risk
class versus the claims experience.

Risk Category &

Credit Risk - The While the overall Non-Performing Loans ratio remained The lending businesses continue to monitor the quality
risk of non-payment within appetite during the year, there is continuing pressure of credit assets, for both local and hard currency loans.
or settlement of on credit risk due to the persisting economic challenges
an obligation by a and the impact of COVID-19 on business. Adverse weather A cautious lending approach is continuing at CABS,
counterparty under the events may exacerbate risks to asset quality going forward. with loans advanced only to credit-worthy customers.
terms of an agreement,
or the change in value The lending businesses also track and follow up on
of a credit asset due to a repayments of all loans falling due.
deterioration in the credit
quality of a counterparty. OMFIN is pursuing diversification of the loan book to
spread risks across economic sectors.
Monthly reviews of counterparty limits are being done.
EMERGING TRENDS & RISKS

The OMZIL Group has developed a methodology for the effective management of emerging risks. This approach forms part
of the forward-looking assessments that the business conducts on an ongoing basis. Emerging risks are new or evolving risks,
conditions or trends, brought about by changes in the external environment, that are difficult to assess with certainty but could
have a significant impact on the business’ financial strength, sustainability, competitive position or reputation over the short to
long term. The business will continue to scan the environment, report and respond swiftly to any adverse changes in the risk
profiles of emerging risks. The key emerging risks that the Group is currently tracking are shown below.
New Pandemic Outbreaks: There is the risk of new pandemic outbreaks in the future with high mortality and requiring new
vaccines. Impacts will be on business resilience, viability and staff health. The Group will continue to observe WHO guidelines
and refine business resilience arrangements.
Extreme Weather Conditions & Geophysical Disasters: The number and intensity of the climate change induced extreme
weather events is increasing and therefore, exposure to this emerging risk is heightening. Impacts will be on the economy,
infrastructure and the Group’s agribusiness portfolios. The Group is implementing a Climate Change Programme to improve
response actions to the risks and opportunities.
Increased Mergers and Acquisitions (M&A) Activity: Recent competitor activity has shown increased M&A activity between
banks and insurance companies. This strengthens their positioning in the financial services sector, and increases their
competitiveness in attracting new investors through a wider integrated financial services model and stronger capital base.
The Group is continuously refreshing its product and service offerings to remain competitive, while evaluating new market
opportunities.
Heightened Risk of Non-Compliance with Emerging Laws & Regulations: Legal and regulatory changes are anticipated on
ESG factors (Including Climate Change); on Market Conduct related laws & regulations (especially in the asset management
space), on the digital currency and fintech operations and on changes to the Competition Act. This increases the risk of
failing to comply with these new requirements when they become effective, resulting in regulatory censure. The Group is
responding through proactive impact and readiness-to-comply assessments.
20
Annual Report 2021
RESULTS FROM OPERATIONS
In line with the rest of Old Mutual Limited Group, in addition to net profit after tax as per the Group statement of profit or loss,
(page 33) the Group also measures its performance based on results from operations.
A reconciliation between profit before tax and results from operations is shown below:
Reconciliation of IFRS Profit Before Tax to Results

from Operations Before Tax
Inflation adjusted Historical cost
audited unaudited
2021 2020 2021 2020
Group Group Group Group
ZWLm ZWLm ZWLm ZWLm
Profit before tax 29,507 9,446 36,474 11,516

Adjusting entries (20,443) (3,212) (28,595) (7,965)
Shareholder investment returns (22,839) (4,217) (28,505) (7,839)
Monetary loss - non-operating items 2,500 1,245 - -
Policyholder tax (104) (240) (90) (126)
Results from operations 9,064 6,234 7,879 3,551
Results from operations represents the view of the directors of Old Mutual Zimbabwe Limited of the core operating performance
of the Group.

INDEPENDENT AUDITORS’ REPORT
INDEPENDENT AUDITOR’S REPORT

To the Shareholders of Old Mutual Zimbabwe Limited
To the on
Report Shareholders of Old
the audit of the Mutual Zimbabwe
consolidated Limited
and separate inflation-adjusted financial statements
Report on the audit of the consolidated and separate inflation-adjusted financial statements
Opinion
Opinion
WeTohave audited the consolidated
the Shareholders of Old Mutualand separateLimited
Zimbabwe inflation-adjusted financial statements of Old Mutual Zimbabwe Limited (the
“Company”) and its subsidiaries (together the
We have audited the consolidated and separate inflation-adjusted “Group”) set out on pages 32 to 135,
financial which comprise
statements of Old group
Mutual and company Limited
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the audit financial
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statements inflation-adjusted
which comprise Group and statements
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adjusted other comprehensive
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position the as atgroup and company
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We have audited the consolidated and separate inflation-adjusted financial statements of Old Mutual Zimbabwe Limited (the
In our opinion, and
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relevant ourethical
audit responsibilities
of financial statementsin accordance with these
in Zimbabwe. Werequirements
have fulfilled and our the IESBA
ethical
code. We believe
responsibilities that the audit
in accordance with evidence we have obtained
these requirements and the IESBA is sufficient
code. We and appropriate
believe that theto provide
audit a basis
evidence we for
haveour opinion.
obtained is
sufficient and appropriate
We conducted our audittoinprovide
accordancea basis forInternational
with our opinion. Standards on Auditing (ISAs). Our responsibilities under those standards are
Key audit matters
further described in the Auditor’s Responsibilities for the Audit of the consolidated and separate inflation-adjusted financial statements
Keysection
auditofmatters
our report. areWe are independent
those matters that, of the
in Group in accordance
our professional with the International
judgement, were of most Ethicssignificance
Standards Board for Accountants’
in our audit of the
Internationaland
consolidated Code of Ethicsinflation-adjusted
separate for Professional Accountantsfinancial (including
statements International Independence
of the current period. These Standards)
matters (IESBAwere Code) togetherinwith
addressed the
context of ourrequirements
the ethical audit of the that consolidated
are relevant and to separate
our audit inflation-adjusted financial in
of financial statements statements
Zimbabwe.asWe a whole, and in forming
have fulfilled our ethical our
opinion thereon, in
responsibilities and we do not
accordance provide
with a separate opinion
these requirements and theonIESBAthese matters.
code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
21
22
Annual Report 2021
INDEPENDENT AUDITORS’ REPORT (CONT’D)
Key audit matter How the matter was addressed in the audit
Valuation of investment properties and owner-occupied properties
Refer to the accounting policy and disclosure notes 2.9 In evaluating the valuation of properties, we reviewed the
and 18. property valuations/calculations prepared by the internal and
independent valuers, with a particular focus on the market rental
The Group measures investment properties and owner- yields, exit capitalisation rates and land unit prices. Our procedures
occupied properties at fair value at each reporting also included the following:
date, which is determined using international valuation
techniques which include the income approach or the • Testing the entities’ controls relating to the determination of
direct comparison market approach. the fair values of the investment properties including controls
related to the appropriate review and approval of the investment
Given the minimal market data arising from a subdued property valuations.
and depressed property market, largely due to the
current economic constraints in Zimbabwe, these ZWL • Assessing the competence, capabilities and objectivity of the
valuations involve significant judgments and resultantly independent valuers.
have a high estimation uncertainty.
• Assessing the scope of the independent valuers’ work, terms of
These valuations also involve the use of valuation experts. the engagement and their independence and objectivity.
The assumptions with the most significant impact on the
property valuations were: • Conducting meetings with the internal and independent
valuation experts to obtain an understanding of the assumptions
• The market rental yields, which are based on employed in the valuation of investment properties.
unobservable market data. The rental yields are
estimated for each individual property. • Evaluating the appropriateness of the valuation methods used
to assess whether they were in line with acceptable industry
• The exit capitalisation rates, which are considered to practice and the requirements of IFRS.
be an all-risk yield rate and incorporate qualitative
aspects, notably occupancy, tenant mix, physical • Engaging a suitably qualified auditor’s expert to independently
attributes and property locations risk adjustments. assess the reasonableness and appropriateness of the valuation
models, methodologies and inputs used by the independent
• The land unit prices, which are adjusted based valuers on a sample basis.
on professional judgement relating to location,
town planning considerations, land area as well as • With respect to the inputs adopted in the ZWL valuation:
environmental factors.
- Obtaining an understanding of the build-up of the
All the above inputs are highly subjective and rely on an capitalisation rate including validating the base rate against
expert’s judgement. Furthermore, The external valuers observable transactions and evaluating adjustments made
have issued their valuation reports with a material to the capitalisation rate;
valuation uncertainty clause due to the ongoing impact - Verifying rental assumptions using independently obtained
of the COVID-19 pandemic on market activity and the market research; and
economy which results in more estimation uncertainty - Comparing the internal valuation outcomes of those of the
related to the fair values of the investment properties. independent valuers for a sample of properties. Differences
noted were assess against acceptable pre-determined
The valuation of investment property is considered to be a thresholds for reasonableness.
key audit matter due to the greater degree of subjectivity
and judgement included in the determination of the • Assessing whether the disclosures in the consolidated financial
fair value and economic consequences and ongoing statements are appropriate and in accordance with IFRS 13: Fair
uncertainty in the property market. Value Measurement and IAS 40: Investment property.
The valuation methodology was deemed to be appropriate

and in line with both International Valuation Standards as well
as IFRS 13. We consider the inputs to be highly subjective and
judgemental, however the judgements made were acceptable
in the current economic climate as disclosed in the sensitivity
analysis in note 18.
The disclosures are in terms of IFRS and appropriate.

Valuation and accounting of unquoted investments
Refer to the accounting policy and disclosure In evaluating the valuation of unquoted investments, our audit procedures
notes 2.13 and 22. incorporated the following:
The Group has unquoted investments which • Testing the design and implementation of key controls over the
include unlisted equities, public sector valuation process, including the Group’s review and approval of
securities, debentures and fixed deposits in the estimates and assumptions used for the valuation, including
money market securities. Due to the nature of authorisation and data input controls and benchmarking assumptions.
these investments, a reliable third-party price
may not be readily available and therefore the • Assessing a sample of the valuation assumptions with reference to the
valuation thereof involves the application of Group’s own valuation guidelines as well as industry practice where
expert judgement. this was available.
The valuation models involve judgement • Performing an evaluation of the methodology choice used and
depending on the observability of the inputs assessed the appropriateness of the selected pricing methodologies
into the valuation and further judgement with reference to IFRS and the Group’s own valuation guidelines and
in determining the appropriate valuation industry practice.
methodology.
• Engaging our internal valuation experts as part of our audit team to
Furthermore, the accounting treatments of test the inputs and assumptions used for significant unlisted entities
unlisted investments in which the Life Assurance by:
business’ (the “business”) investment holding
exceeds 20% involves significant judgement - Evaluating and challenging the appropriateness of the
in determining whether the business exerts methodologies applied, assumptions and inputs used in the
significant influence over those investments, and valuation by establishing their own range of the key assumptions
therefore, whether the investments should be and inputs, based on externally available metrics and wider
classified as Investments in Associates or Joint economic and commercial factors and using their knowledge and
Ventures in accordance with IAS 28 “Investments industry experience; and
in Associates and Joint Ventures” or whether - Evaluating the reasonableness of the directors’ inputs by comparing
there is control, thereby requiring the business the inputs to historical trends.
to recognise an investment in subsidiary and
the Group to consolidate the entity in line with • Our procedures in respect of the classification and accounting
IFRS 10 “Consolidated Financial Statements” in treatment of investments included among others:
cases where IFRS 9 “Financial Instruments” is
considered not applicable. - Evaluating the directors’ assessment of whether the Group exerts
significant influence or control over investees in which the business’
For the above reasons, the valuation of shareholding exceeds 20%, against the criteria in IAS 28 and IFRS
unquoted investments is considered a matter of 10; and
significance to the audit. - Evaluating whether unlisted investments are presented in
accordance with the relevant financial reporting standard in the
financial statements.
Assessing the disclosures in relation to unquoted investments as well as

the judgements and estimation applied to these balances and in terms
of IFRS.
We have considered the judgements, assumptions and disclosures to be

appropriate.
24
Annual Report 2021
Valuation of insurance contract liabilities
Refer to the accounting policy and disclosure notes In evaluating the valuation of the insurance contract liabilities, our
2.6 and 27. audit procedures incorporated the following:
The Group carries significant insurance contract • Testing the design and implementation of key controls over the
liabilities on its statement of financial position. valuation processes, including the assessment and approval of
the methods and assumptions adopted over the calculation of
The valuation of insurance contract liabilities involves insurance contract liabilities, as well as appropriate data access
significant judgements over uncertain future and amendment management controls over the actuarial
outcomes, mainly the ultimate total settlement value models.
of long-term insurance contract liabilities.
For long-term liabilities, our audit procedures incorporated the
The key inputs used to estimate these long-term following:
liabilities include the following:
- Economic assumptions, including valuation • Assessing the impact of developments within the life assurance
interest rates; business environment on the methodology and assumptions
- Expense inflation; used for calculating insurance contract liabilities.
- Effective interest rate; and
- Operating assumptions including mortality • Evaluating the analysis of the movement in insurance contract
rates, expenses and persistency (including liabilities, taking into consideration whether the movements are
consideration of policyholder behaviour). in line with the methodologies and assumptions used.
For the short-term insurance business, the determination • Obtaining confirmation from the respective Companies’ legal
of the IBNR reserve is an area that makes use of counsel around any litigation or claims by policyholders that are
significant qualitative and quantitative judgments and in dispute.
estimates due to the level of subjectivity inherent in the
estimation of the occurrence and severity of insurable • Engaging our internal actuarial specialists, as part of our audit
events that have occurred as at the end of the reporting team, to assist us in challenging the assumptions used and the
period, but not yet been reported to the short-term process followed for setting and updating the assumptions,
insurance business as at the reporting period end. particularly around the persistency, expense and mortality/
morbidity assumptions.
The key inputs used to estimate these short-term
liabilities include the following: • Challenging the assumptions used by the directors by comparing
the assumptions to external data.
- Past claims development manner into the
future; • Assessing the completeness of insurance contract liabilities and
- The impact of COVID19; and compliance with IAS 37 “Provisions, Contingent Liabilities and
- Economic assumptions. Contingent Assets” in relation to the results of the report on
the Commission of Inquiry established by the Government of
Because of the inherent susceptibility of insurance Zimbabwe
provisions to significant estimation uncertainty, we
considered the IBNR to be a key audit matter.
Due to the significant judgement involved, the

valuation of insurance contract liabilities is considered
a matter of most significance to our audit.

Valuation of insurance contract liabilities
For short-term insurance liabilities, our audit procedures
incorporated the following:
• Testing the design and implementation of key controls

over the valuation processes, including the assessment and
approval of the methods and assumptions adopted over
the calculation of insurance contract liabilities.
• Obtaining an understanding of how management and its

actuaries determined the amount of the published and
statutory IBNR reserve and the data and model used in
making the estimates.
• Engaging our own internal actuarial specialists, as part

of our audit team, to assist us in evaluating the work of
the business’ actuarial experts on the published and
statutory IBNR reserve amounts, which included the
testing of the principles and integrity of the data, models
and assumptions used by management and its actuaries
in the determination of the published and statutory IBNR
reserves.
• Challenging management and internal actuarial experts on

the reasonableness and financial impact of matters arising
from contradictory evidence and other findings from the
independent review. This also involved the consideration of
the impact of hyperinflation and exchange rate fluctuations
on the determined level of reserves.
• Performing a retrospective assessment of the current

year run off of the prior year’s published IBNR reserve by
comparing the actual claims which were processed in
the period subsequent to year end to the IBNR reserve
as at year end to evaluate the accuracy of the valuation
and the possible bias in the overall published IBNR reserve
determination.
• Assessing the impact of the capping of the published

IBNR reserve at a level of 7% against the independently
determined level of reserves and challenged management
on the adequacy thereof.
We have considered the judgements, methodologies and

assumptions approved by the directors to be appropriate
and the disclosures were in compliance with IFRS.
26
Annual Report 2021
Valuation of expected credit losses on financial assets
As detailed in notes 2.13 and 24, the Group reported In evaluating the valuation of expected credit losses on financial
expected credit losses of ZWL 1.495 billion on the inflation assets, our audit procedures incorporated the following:
adjusted statement of financial position.
• Reviewing the Group’s IFRS 9 based impairment
This was considered a key audit matter as the determination provisioning policy and compared it with the requirements
of the expected credit losses (ECL) requires significant of IFRS 9.
judgment. The models used to determine provisions are
complex and might not have taken into account all relevant • Obtaining an understanding of the robustness of internal
factors such as macroeconomic data for forecasts and the controls over financial reporting including critical inputs
data used for historical analysis might not be accurate. and the model used which support the Group assertions
Furthermore, the banking subsidiary adopted a new ECL with respect to completeness, compliance and consistent
model during the current year. application of the methodology.
Due to the judgement applied in determining the complex • Testing the design and implementation of controls with
ECL, we have determined this to be a key audit matter. respect to the determination of the expected credit losses.
Note 24 to the inflation adjusted financial statements • Involving our internal information technology experts to
provides detailed information with respect to the test design and implementation of controls with respect to
determination of the expected credit losses. the general information controls (GITCs).
• Testing the completeness and accuracy of loans and

advances, treasury bills, off balance sheet items, and other
financial assets included in the ECL calculations.
With the assistance of an auditors’ expert, performing an

independent assessment on the appropriateness of the model
by performing the following:
• Obtaining an understanding of the Group internal rating
models for financial assets to assess whether the rating
model was appropriate;
• Reviewing the appropriateness of the Group determination

of significant increase in credit risk and the resultant basis
for classification of exposures into various stages;
• For a sample of exposures, testing the appropriateness of

the staging;
• Testing assumptions used in the ECL calculations and

assessing them for reasonableness; and
• For a sample of exposures, testing the appropriateness of

determining exposure at default, and probability of default.
• Assessing the completeness of collateral recognised during

the period under review;
• Assessing the consistency of inputs and assumptions used

by management to determine expected credit losses; and
• Assessing whether the appropriate required disclosures

have been included and presentation requirements have
been properly reflected in the financial statements.
The valuation was found to be appropriate in terms of the

relevant accounting standards and management’s estimates
and judgements were deemed to be prudent.

Other matter
The inflation-adjusted financial statements of the Group and the Company for the year ended 31 December 2020 were audited
by another auditor who expressed an adverse opinion on those inflation-adjusted financial statements on 31 May 2021.
Other information
The directors are responsible for the other information. The other information comprises the Chairman’s statement, CEO’s
review,the Directors’ report, the Corporate Governance Report, the Enterprise Risk Management reports, the Results From
Operations, the Notice to the Annual General Meeting and the historical cost financial information, which we obtained prior
to the date of this auditor’s report and the Annual Report, which is expected to be made available to us after that date. The
other information does not include the consolidated and separate inflation-adjusted financial statements and our auditor’s
report thereon.
Our opinion on the consolidated and separate inflation-adjusted financial statements does not cover the other information
and we do not and will not express an audit opinion or any form of assurance conclusion thereon.
In connection with our audit of the consolidated and separate inflation-adjusted financial statements, our responsibility is
to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated and separate inflation-adjusted financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
Responsibilities of the directors for the consolidated and separate inflation-adjusted financial statements
The directors are responsible for the preparation and fair presentation of the consolidated and separate inflation-adjusted
financial statements in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the
Companies and Other Business Entities Act (Chapter 24:31), relevant sections of the Banking Act (Chapter 24:20), the Building
Societies Act (Chapter 24:02), the Securities and Exchange Act (Chapter 24:25), the Microfinance Act (Chapter 24:29) and
Insurance Act (Chapter 24:07) and for such internal control as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated and separate inflation-adjusted financial statements, the directors are responsible for assessing
the Group’s and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the Group and/or Company or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated and separate inflation-adjusted financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate inflation-adjusted financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and Company’s
internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
28
Annual Report 2021
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s and/or Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate inflation-
adjusted financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Group and/or Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated and separate inflation-adjusted financial
statements, including the disclosures, and whether the consolidated and separate inflation-adjusted financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the inflation-adjusted consolidated financial statements. We are responsible for the
direction, supervision and performance of the Group’s audit. We remain solely responsible for our audit opinion.
Report on other legal and regulatory requirements
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal control that we identify during our audit.
In fulfilment of the requirements of Section 193 of the Companies and Other Business Entities Act (Chapter 24:31
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
report toindependence,
regarding the shareholders as follows: with them all relationships and other matters that may reasonably be thought
and to communicate
to bear on193
Section our independence,
(1) (a) and where applicable, actions taken to eliminate threats or safeguards applied.
The consolidated
From and separate
the matters communicated with inflation-adjusted financialthose
the directors, we determine statements of the
matters that wereGroup
of mostare properlyindrawn
significance up in accorda
the audit
ofso asconsolidated
the to give a true and fairinflation-adjusted
and separate view of the state of the
financial Group’sofaffairs
statements at the
the current date
period ofare
and the consolidated
therefore and separate in
the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
financial
matter statements
or when, for the
in extremely rarefinancial year ended
circumstances, 31 December
we determine 2021.should not be communicated in our report
that a matter
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Section 193(2)
We have
Report no matters
on other toregulatory
legal and report inrequirements
respect of the Section 193(2) requirements of the Act.
In fulfilment of the requirements of Section 193 of the Companies and Other Business Entities Act (Chapter 24:31) (“the Act”),
Compliance
we report to thewith the Insurance
shareholders Act [Chapter 24:07]
as follows:
We also report to the shareholders that the life assurance business and general insurance businesses have not complie
Section 193 (1) (a)
Instrument
The 206
consolidated ofseparate
and 2019 asinflation-adjusted
read with the Insurance Act [Chapter
financial statements of the24:07],
Group arewhich stipulates
properly that
drawn up registeredwith
in accordance insurers shall
this Act so as to give a true
prescribed assets ratio of: and fair view of the state of the Group’s affairs at the date of the consolidated and separate inflation-
adjusted financial statements for the financial year ended 31 December 2021.
Section- 193(2)
fifteen per centum of the market value of total adjusted assets in the case of an insurer which carries o
We have no matters to report in respect of the Section 193(2) requirements of the Act.
business; and
Compliance with the Insurance Act [Chapter 24:07]
We also report to the shareholders that the life assurance business and general insurance businesses have not complied with
- Instrument
Statutory ten per 206
centum ofasthe
of 2019 market
read value
with the to total
Insurance adjusted
Act [Chapter assets
24:07], in the
which case of
stipulates anregistered
that insurer which
insurerscarries
shall on short
insurance
have a minimum business.
prescribed assets ratio of:
- fifteen per centum of the market value of total adjusted assets in the case of an insurer which carries on life assurance
business; and
- ten per centum of the market value to total adjusted assets in the case of an insurer which carries on short term
(non-life) insurance business.
___________________
___________________
Deloitte & Touche
Deloitte &
Registered Touche
Auditor
Registered
Per: Auditor
Charity Mtwazi
Partner
Per: Charity Mtwazi
PAAB Practice Certificate Number 0585
Partner
PAAB Practice Certificate Number 0585
Date: 30 March 2022
Date: 30 March 2022

FINANCIAL
STATEMENTS
Group Statement of Profit or Loss
Group Statement of Comprehensive Income
Company Statement of Profit or Loss and Comprehensive Income
Group Statement of Financial Position
Company Statement of Financial Position
Group Statement of Changes in Equity
Company Statement of Changes in Equity
Group Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Annual Financial Statements
GROUP STATEMENT OF PROFIT OR LOSS

FOR THE YEAR ENDED 31 DECEMBER 2021
Inflation adjusted *Historical cost

audited unaudited
2021 2020 2021 2020
Notes Group Group Group Group
ZWLm ZWLm ZWLm ZWLm
Revenue
Gross earned premiums 4 12,429 8,038 9,986 3,109
Outward reinsurance (1,248) (1,464) (1,121) (584)
Net earned premiums 11,181 6,574 8,865 2,525

Investment income (non-banking) 5 73,683 25,624 126,382 49,659
Banking interest and similar income 6 6,455 3,005 5,209 1,206
Fee income, commissions and income
from service contracts 7 8,910 5,076 7,069 2,097
Other income 8 4,974 3,722 4,815 2,253
Total revenue 105,203 44,001 152,340 57,740

Expenses
Claims and benefits (including change
in insurance contract provisions) 9 (53,518) (21,303) (96,098) (39,553)
Reinsurance recoveries 554 460 425 163
Net claims incurred (52,964) (20,843) (95,673) (39,390)

Change in provision for investment
contract liabilities 10 (6,348) (1,007) (7,696) (2,588)
Fees, commissions and other acquisition costs (3,638) (2,170) (2,894) (890)
Banking interest expense and similar expenses 6 (387) (760) (307) (277)
Impairment charges (975) (1,246) (970) (755)
Other operating and administration expenses 11 (10,297) (5,907) (8,326) (2,324)
Net monetary adjustment (1,087) (2,622) - -

Income tax (expense)/credit 12 (725) 1,017 (869) (380)

Profit for the year 28,782 10,463 35,605 11,136

Attributable to non-controlling interests 626 181 834 280
Attributable to owners of parent company 28,156 10,282 34,771 10,856
28,782 10,463 35,605 11,136
*The historical amounts are shown as supplementary information. As a result, the independent auditors have not expressed
an opinion on the historical financial information.

GROUP STATEMENT OF COMPREHENSIVE INCOME

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm

Profit for the year 28,782 10,463 35,605 11,136
Other comprehensive income

Items that will not be reclassified
to profit or loss (net of tax)
Property revaluation 1,441 613 3,642 2,930
Shadow accounting (842) (224) (1,622) (1,025)
Total other comprehensive income 599 389 2,020 1,905

Total other comprehensive income for the year 29,381 10,852 37,625 13,041
Total other comprehensive income

attributable to:
Owners of parent company 28,755 10,671 36,791 12,761
Non-controlling interests 626 181 834 280
29,381 10,852 37,625 13,041
Earnings per share

Basic and diluted (cents) 8,480 3,096 10,472 3,269
32
Annual Report 2021
COMPANY STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME


audited unaudited
2021 2020 2021 2020
Company Company Company Company
Notes ZWLm ZWLm ZWLm ZWLm
Revenue
Investment income 14 5,888 1,610 5,670 1,106
Other income 15 657 1,044 544 580
Total revenue 6,545 2,654 6,214 1,686

Expenses
Other operating and administration expenses 16 (1,487) (996) (1,286) (386)
Net monetary adjustment (1,014) (2,059) - -

Profit/(loss) before tax 4,044 (401) 4,928 1,300

Income tax (expense) 17 (194) (196) (226) (74)

Profit/(loss) and total other comprehensive
income/(loss) for the year 3,850 (597) 4,702 1,226

GROUP STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021

audited unaudited
2021 2020 2021 2020

Assets
Investment property 18 48,699 36,715 48,699 22,841
Property and equipment 19 10,302 8,465 8,696 4,236
Intangible assets 20 894 872 208 94
Deferred acquisition costs 39 41 34 17
Reinsurer contracts 21 331 349 307 172
Investments and securities 22 140,745 63,305 140,745 39,384
Deferred tax assets 31 3 3 9 7
Current income tax assets 101 96 101 63
Loans and advances 24 27,614 11,394 27,614 7,088
Other assets 25 17,033 19,468 14,686 10,770
Cash and cash equivalents 26 12,458 11,873 12,458 7,386
Total assets 258,219 152,581 253,557 92,058

Liabilities
Insurance contract liabilities 27 139,767 76,414 139,703 47,431
Investment contract liabilities 28 11,048 5,264 11,048 3,275
Provisions 30 617 744 617 464
Deferred tax liabilities 31 1,188 829 1,048 438
Current income tax liabilities 10 4 10 2
Amounts due to group companies 23 9,997 11,730 9,997 7,298
Amounts owed to bank depositors 32 24,781 20,955 24,781 13,037
Credit lines 33 9,730 5,069 9,730 3,154
Other liabilities 34 3,941 3,813 3,834 1,772
Total liabilities 201,079 124,822 200,768 76,871

Net assets 57,140 27,759 52,789 15,187

Shareholders’ equity
Share capital and premium - - - -
Non-distributable reserve - - 49 55
Revaluation reserve 3,074 2,475 4,378 2,358
Share based payment reserve 1,966 1,966 55 72
Retained earnings 50,944 22,788 47,131 12,360
Equity holders of the parent 55,984 27,229 51,613 14,845
Non-controlling interests 1,156 530 1,176 342
Total equity 57,140 27,759 52,789 15,187
……………………...………………………………. ……………………...……………………………….
DIRECTOR DIRECTOR
30 March 2022 30 March 2022
34
Annual Report 2021
COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021

audited unaudited
2021 2020 2021 2020
Assets
Investment property 43 45 38 45 25
Investments in subsidiary companies 44 4,623 4,541 183 126
Property and equipment 45 366 407 88 53
Intangible assets 2 3 1 -
Investments and securities 46 6,235 2,622 6,235 1,631
Amounts due by group companies 47 382 119 382 73
Other assets 48 8,723 10,850 8,723 6,750
Cash and cash equivalents 49 468 175 468 109
Total assets 20,844 18,755 16,125 8,767

Liabilities
Provisions 51 314 65 314 40
Deferred tax liability 52 122 119 47 11
Amounts due to group companies 47 9,422 11,413 9,422 7,101
Current tax payable 2 3 1 2
Other payables 53 103 124 103 77
Total liabilities 9,963 11,724 9,887 7,231

Net assets 10,881 7,031 6,238 1,536

Share capital and premium 54 - - - -
Non-distributable reserve - - 20 20
Share based payment reserve 3,862 3,862 63 63
Currency conversion reserve - - - -
Retained income 7,019 3,169 6,155 1,453
Total equity 10,881 7,031 6,238 1,536
……………………...………………………………. ……………………...……………………………….
DIRECTOR DIRECTOR
30 March 2022 30 March 2022

36
Annual Report 2021
Share Share based Regulatory Currency Equity holders Non-
Notes capital & Revaluation payment provisions Conversion Retained of the parent controlling Equity

Inflation adjusted audited premium reserve reserve reserve reserve earnings total interests total
ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm
2021
Shareholders’ equity at beginning of year - 2,475 1,966 - - 22,788 27,229 530 27,759
Profit for the financial year - - - - - 28,156 28,156 626 28,782

Shadow accounting - (842) - - - - (842) - (842)
Revaluation of property - 1,441 - - - - 1,441 - 1,441

Total Comprehensive income for the year - 599 - - - 28,156 28,755 626 29,381
Shareholders’ equity at end of year - 3,074 1,966 - - 50,944 55,984 1,156 57,140

2020
GROUP STATEMENT OF CHANGES IN EQUITY
Shareholders’ equity at beginning of year - 2,086 1,803 41 (369) 12,834 16,395 349 16,744
Profit for the financial year - - - - 10,282 10,282 181 10,463

Shadow accounting 10.1 - (224) - - - - (224) - (224)
Revaluation of property - 613 - - - - 613 - 613

Total Comprehensive income for the year - 389 - - - 10,282 10,671 181 10,852
Movement in share based payment reserve - - 163 - - - 163 - 163
Transfer between reserves - - - (41) 369 (328) - - -
Transactions with shareholders - - 163 (41) 369 (328) 163 - 163
Shareholders’ equity at end of year - 2,475 1,966 - - 22,788 27,229 530 27,759
Performance

Share Non- Share based Regulatory Currency Equity holders Non-
Notes capital & distributable Revaluation payment provisions conversion Retained of the parent controlling Equity
*Historical cost unaudited premium reserve reserve reserve reserve reserve earnings total interests total
Business Reviews
ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm
2021
Shareholders’ equity at beginning of year - 55 2,358 72 - - 12,360 14,845 342 15,187
Profit for the financial year - - - - - - 34,771 34,771 834 35,605
Shadow accounting - - (1,622) - - - - (1,622) - (1,622)
Revaluation of property - - 3,642 - - - - 3,642 - 3,642
Total Comprehensive income for the year - - 2,020 - - - 34,771 36,791 834 37,625
Movement in share based payment reserve - - - (17) - - - (17) - (17)
Movement in non distributable reserves - (6) - - - - - (6) - (6)
Transactions with shareholders - (6) - (17) - - - (23) - (23)
Shareholders’ equity at end of year - 49 4,378 55 - - 47,131 51,613 1,176 52,789
Corporate Governance
GROUP STATEMENT OF CHANGES IN EQUITY
2020
Shareholders’ equity at beginning of year - 55 453 62 6 (13) 1,511 2,074 62 2,136
Profit for the financial year - - - - - - 10,856 10,856 280 11,136
Shadow accounting - - (1,025) - - - - (1,025) - (1,025)
Revaluation of property - - 2,930 - - - - 2,930 - 2,930

Total Comprehensive income for the year - - 1,905 - - - 10,856 12,761 280 13,041
Movement in share based payment reserve - - - 10 - - - 10 - 10
Transfer between reserves - - - - (6) 13 (7) - - -
Transactions with shareholders - - - 10 (6) 13 (7) 10 - 10
Shareholders’ equity at end of year - 55 2,358 72 - - 12,360 14,845 342 15,187
Enterprise Risk Management
*The historical amounts are shown as supplementary information. As a result, the independent auditors
have not expressed an opinion on the historical financial information.
Annual Report 2021

Financial Statements
37
COMPANY STATEMENT OF CHANGES IN EQUITY
Share Non- Share based Currency

capital & distributable payment conversion Retained Equity
premium reserve reserve reserve earnings total
Inflation adjusted audited ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm
2021
at beginning of year - - 3,862 - 3,169 7,031
Changes in equity arising in the year
Profit for the financial year - - - - 3,850 3,850
Total comprehensive income - - - - 3,850 3,850
Shareholders’ equity at end of year - - 3,862 - 7,019 10,881

2020
at beginning of year - - 3,872 152 3,736 7,760

Loss for the financial year - - - - (597) (597)
Total comprehensive income - - - - (597) (597)

Movement in share based payment reserve - - (10) - - (10)
Transfer between reserves - - - (152) 152 -
Loss of interest in subsidiary - - - - (122) (122)
Shareholders’ equity at end of year - - 3,862 - 3,169 7,031
38
Annual Report 2021
COMPANY STATEMENT OF CHANGES IN EQUITY

Share Non- Share based Currency

capital & distributable payment conversion Retained Equity
premium reserve reserve reserve earnings total
*Historical cost unaudited ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm
2021
at beginning of year - 20 63 - 1,453 1,536
Profit for the financial year 4,702 4,702
Shareholders’ equity at end of year - 20 63 - 6,155 6,238

2020
at beginning of year - 20 66 4 288 378
Profit for the financial year - - - - 1,226 1,226

Movement in share based payment reserve - - (3) - - (3)
Transfer between reserves - - - (4) 4 -
Loss of interest in subsidiary - - - - (65) (65)
Shareholders’ equity at end of year - 20 63 - 1,453 1,536

GROUP STATEMENT OF CASH FLOWS

audited unaudited
2021 2020 2021 2020
Notes
ZWLm ZWLm ZWLm ZWLm

Cash flows from operating activities

Non-cash movements and
adjustments to profit before tax 60.1 (17,213) (5,707) (28,813) (5,672)
Changes in working capital 60.2 (9,443) 6,914 (316) 5,739
Taxation paid 60.3 (394) (381) (400) (255)

Net cash from operating activities 2,457 10,272 6,945 11,328

Cash flows from investing activities
Acquisition of financial assets (9,117) (7,397) (7,809) (7,064)
(Acquisition)/Disposal of investment property (628) 592 (542) 287
Acquisition of intangible assets (98) (1,510) (127) (521)
(Acquisition)/Disposal of property and equipment (1,454) 15 (966) 2

Net cash used in investing activities (11,297) (8,300) (9,444) (7,296)

Cash flows from financing activities
Credit lines received 14,144 15,742 10,964 3,500
Credit lines paid (5,661) (21,203) (4,388) (3,768)

Net cash generated from/(used in)
in financing activities 8,483 (5,461) 6,576 (268)
Net (decrease)/increase in cash

and cash equivalents (357) (3,489) 4,077 3,764
Net foreign exchange differences on

cash and cash equivalents 942 3,050 995 1,915
Cash and cash equivalents

at the beginning of the year 11,873 12,312 7,386 1,707
Cash and cash equivalents at the end of the year 12,458 11,873 12,458 7,386
40
Annual Report 2021
COMPANY STATEMENT OF CASH FLOWS


audited unaudited
2021 2020 2021 2020

Cash flows from operating activities
Profit/(Loss) before tax 4,044 (401) 4,928 1,300
Non-cash movements and
adjustments to profit before tax 61.1 (2,667) (1,281) (3,861) (1,198)
Changes in working capital 61.2 (148) (523) 65 144
Taxation paid 61.3 (186) (99) (188) (65)

Net cash from operating activities 1,043 (2,304) 944 181

Cash flows from investing activities
Acquisition of financial assets (939) (445) (728) (339)
Disposal of financial assets 338 1,258 258 226
Proceeds from disposal of property and equipment 3 11 5 1
(Increase)/disposal in investments in subsidiaries (82) 1,885 (57) 69
Acquisition of property and equipment (70) (461) (63) (61)

Net cash received from/(used in) investing activities (750) 2,248 (585) (104)

Net increase/(decrease) in cash and
cash equivalents 293 (56) 359 77

at the beginning of the year 175 231 109 32

at the end of the year 468 175 468 109

NOTES TO THE ANNUAL FINANCIAL STATEMENTS
1. General Information
Old Mutual Zimbabwe Limited (OMZIL), the Company, and its subsidiaries are incorporated in Zimbabwe. These
consolidated financial statements comprise the Company and its Subsidiaries (collectively the ‘Group’ and individually
‘Group companies’). The Group’s Subsidiaries and main activities are as follows:
- Central Africa Building Society (CABS) - mortgage lending and banking;
- Old Mutual Finance (Private) Limited (OMFIN) - micro finance lending;
- Old Mutual Life Assurance Company Zimbabwe Limited (OMLAC) - life assurance, pension and employee benefits
services, which in turn wholly owns Old Mutual Funeral Services (Private) Limited (OMFUN);
- Old Mutual Investment Group Zimbabwe (Private) Limited (OMIG) - asset management;
- Old Mutual Securities (Private) Limited (OMSEC) - licensed securities dealing firm;
- RM Insurance Holdings Company Limited (RMI), with an operating subsidiary, Old Mutual Insurance Company (Private)
Limited (OMICO) - short term insurer.
The holding company (OMZIL) is a 75% owned subsidiary of OM Zimbabwe Holdco Limited which is ultimately a wholly
owned subsidiary of Old Mutual Limited (OML), listed on the Johannesburg Stock Exchange.
2. Accounting Policies
2.1 Statement of compliance

The financial statements are prepared in compliance with International Financial Reporting Standards (IFRSs). IFRSs
comprise interpretations adopted by the International Accounting Standards Board (IASB), which includes standards
adopted by the IASB and interpretations developed by the International Financial Reporting Interpretations Committee
(IFRIC) or by the former Standing Interpretations Committee (SIC).
In February 2019, the Government of Zimbabwe issued Statutory Instrument 33 (S.I. 33) of 2019, which, based on our
legal interpretation, for accounting and other purposes, prescribed parity between the US Dollar and local currency as
at and up to the effective date of 22 February 2019, and also prescribed the manner in which certain balances in the
financial statements would be treated as a consequence of the recognition of the RTGS Dollar as currency in Zimbabwe.
It is the Group’s view that the prescribed parity in value between local currency and the USD did not accurately reflect
underlying market economic conditions between 1 October 2018 and 22 February 2019. The treatment resulted in a
misstatement of foreign currency transactions in the year ended 31 December 2018 up to 28 February 2019, and the
impact of the misstatement is included in the opening retained earnings balance of the 31 December 2020 comparative
year opening balances.
As a result of the hyperinflationary environment that started in 2019, the Group has determined that the impact of the
misstatement is no longer material for the 2021 financial year. These financial statements are compliant with IFRSs.
2.2 Basis of preparation

The financial statements provide information about the financial position, results of operations, and changes in the
financial position of the Group. The financial statements are prepared in Zimbabwe dollars. The symbols “$/ZWL” denote
Zimbabwe dollars unless explicitly indicated otherwise. They are based on the statutory records that are maintained
under the historical cost convention and restated to take into account the effects of inflation in accordance with the
International Accounting Standard 29 (IAS 29) “Financial Reporting in Hyperinflationary Economies”.
Since 2019 Zimbabwe has met the key indicators of being a hyperinflationary economy as described under IAS 29.
The inflation adjusted financial statements represent the principal financial statements of the Group. Historical cost
financial statements have been presented as supplementary information to the restated financial statements.
IAS 29 requires that the financial statements prepared in the currency of a hyperinflationary economy be stated in
terms of the measuring unit current at the balance sheet date, and that corresponding figures for previous periods be
restated in the same terms. The restatement of the historical cost numbers is based on the conversion factors derived
from the consumer price index (CPI) issued by the Zimbabwe National Statistics Agency (ZIMSTAT). We believe the
CPI best represents average price movements in the economy during the reporting period and have thus applied it
in preparation of these financial statements. The indices and conversion factors used to restate the accompanying
financial statements as at 31December 2021 are given below.
42
Annual Report 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONT’D)

2. Accounting Policies (cont’d)
2.2 Basis of preparation (cont’d)

Dates Indices Conversion Factors
31/12/2021 3,977.48 1.0000
31/12/2020 2,474.51 1.6074
31/12/2019 551.63 7.2105
The main procedures applied for the above-mentioned restatement are as follows:
i. All corresponding figures as of and for the year ended 31 December 2020 are restated by applying the change in
the index from 31 December 2020 to 31 December 2021.
ii. Monetary assets and liabilities that are carried at amounts current at balance sheet date are not re-stated because
they are already expressed in terms of the monetary unit current at the balance sheet date.
iii. Non-monetary assets and liabilities that are not carried at amounts current at the balance sheet date and components
of shareholders equity are restated by applying the change in the index from the date of the transaction or if
applicable from the date of their most recent revaluation to 31 December 2021. An impairment loss is recognised
in profit or loss if the remeasured amount of a non-monetary item exceeds its estimated recoverable amount.
iv. Property and equipment that is not current at the statement of financial position date is restated from the date of
initial application of hyperinflation conditions, that is, 1 January 2018 or from the transaction date if purchased after
1 January 2018. Depreciation and amortisation amounts are based on restated costs. Owner occupied buildings
are revalued annually at the balance sheet date, and therefore are being carried at amounts current at the balance
sheet date, are not restated. The depreciation amounts are based on the opening restated amounts.
v. Deferred tax is calculated on restated carrying amounts.
vi. Profit or loss items/transactions, except the depreciation and amortisation charges explained above and fair value gains
or losses, are restated by applying the change in the index from the date of the transaction to 31 December 2021.
vii. The effect of inflation on the net monetary position of the entity is included in the income statement as loss or gain
on monetary position.
viii. All items in the cash flow statement are expressed in terms of the measuring unit current at the balance sheet date.
To provide reliable and more relevant information about the effects of inflation on the fair value adjustments,
management adopted the methodology to consider the effects of inflation on the opening balance of assets and
liabilities which are measured at fair value. The change has no impact on the value of the assets and liabilities and net
result of the Group.
2.3 Critical accounting estimates and judgements

The preparation of financial statements requires management to make judgements, estimates, and assumptions that
affect the application of accounting policies and reported amounts of assets, liabilities, income, and expenses. Actual
results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future
periods affected.
Critical accounting estimates are those which involve the most complex or subjective judgement or assessments. The
areas of the Group’s business that typically require such estimates are life insurance contract provisions, determination
of the fair value for financial assets and liabilities and investment properties. Insurance contract accounting and key
assumptions made in determining insurance contract provisions are discussed in more detail in note 2.6.
2.3.1 Functional currency and determination of exchange rate

The Zimbabwe government gazetted Statutory Instrument 185 (S.I. 185) of 2020 on 24 July 2020. The regulation
requires sellers of goods and services to display, quote, and offer prices in both the Zimbabwean (ZWL) and foreign
currency at the ruling auction exchange rate. Due to the use of dual currencies in the economy and in the Group,
we are required to asses what the functional currency of the Group is in accordance with International Accounting
Standard (IAS) 21, Foreign Exchange Rates. The Group’s assessment was based on weighting the volume of the local
currency business against the foreign currency business. Foreign currency transactions recorded for the whole Group
constitute 2% of total transactions recorded for the financial years ending 31 December 2020 and 31 December 2021.
It is management’s view that this does not constitute a significant proportion of the transactions recorded during the
year. The general insurance subsidiary, OMICO, however has a higher volume of foreign currency business as compared
to other subsidiaries which constitute an average of 40%. OMICO’s source of funding is purely in ZWL, while other
business expenses are driven by ZWL cost structures. It is management’s view that for the subsidiary, foreign currency
business is material but not yet significant enough to override the local currency business. Resultantly, the Group and
its subsidiaries’ functional currency remains the ZWL.

2.3.1 Functional currency and determination of exchange rate (cont’d)

The weekly Reuters based foreign exchange auction system, overseen by the Reserve Bank of Zimbabwe (RBZ), was in
operation during the year. The economy is still, however, witnessing alternative foreign currency exchange rates that are
divergent from the auction determined exchange rate. In the financial year ending 31 December 2021, the exchange
rate premium from these alternative rates reached a high of 100%. Through the official foreign exchange market, the
Group has managed to perform the following foreign currency transactions:
• Through CABS the banking subsidiary, settle credit lines;
• Through all the Group’s entities, settle foreign payments to third party suppliers of goods and services; and
• Through all the Group’s entities, settle foreign payments to related party service providers.
It is management’s view that given that foreign currency transactions for the Group are being done using the auction
determined exchange rate, resultantly, the Group’s spot rate in accordance with IAS 21, is the Reuters auction foreign
exchange system determined exchange rate.
2.3.2 Other critical estimates and judgements

Valuation of investment properties, financial assets, and liabilities
The fair values of investment properties, financial assets, and liabilities are classified and accounted for in accordance
with the policies set out in section 2.9 and 2.13 below. They are valued on the basis of listed market prices in so far
as this is possible. If prices are not readily determinable, fair value is based either on internal valuation models or
management estimates of amounts that could be realised under current market conditions. The translation of the
foreign currency denominated assets and liabilities to local currency is based on the year-end exchange rate while
transactions are translated at the average exchange rate for the reporting period.
Investments where the Group holds 20% or more

The Group is required to make judgements on what constitutes an investment in associate. IAS 28 “Investments in
Associates and Joint Ventures” defines an associate as an entity in which the investor has significant influence. The
standard states that if an entity holds 20%, directly or indirectly of the voting power of the investee, it is presumed that
the entity has significant influence unless it can clearly be demonstrated that it is not the case. In determining significant
influence factors such as board representation, level of transactions and ability to exercise significant influence are also
considered. The Standard provides an exemption for venture capital organisations, mutual funds, unit trusts and similar
entities including investment linked insurance funds to measure investments in those entities at fair value through
profit or loss in accordance with IFRS 9 “Financial Instruments: Recognition and measurement”.

The Group has investment linked insurance funds which include investments in which the Group has more than 20%
disclosed on Note 22.5. These funds are backed by investment contracts with discretionary participating features and
meet the following characteristics:
- The policyholder has a clear understanding of the type of investments the Group invests in;
- There is a link between the investments and what the policyholders are entitled to;
- The valuation of the liability is based on the value of the assets; and
- The assets backing these liabilities are ring-fenced.
The Group has funds which operate like unit trusts and they also include investments in which the Group has more
than 20%. These funds where the Group holds 20% or more, which back policyholder liabilities, are accounted for in
terms of IFRS 9, at fair value.
Valuations of housing projects

Inventory comprises housing units/housing projects which are valued at the lower of cost or net realisable value of the
completed housing units. The significant judgement is the estimate of cost to completion used in determination of the
net realisable value. Management makes use of external valuations performed by external valuers for confirmation of
the determined net realisable value.
Valuation of treasury bills

Financial instruments comprise of treasury bills instruments. The valuation of treasury bills on initial recognition, and
the subsequent measurement thereof, has been identified as a complex area due to the fact that there are varying
views in the banking sector on the correct accounting treatment of these treasury bills, and due to the absence of an
active market with sufficient trades to inform the fair value of the treasury bills. The treasury bills are disclosed in note
22.6 and are recorded at amortised cost.
44
Annual Report 2021

2.3.2 Other critical estimates and judgements (cont’d)

Foreign denominated Legacy debts /Blocked funds
In June 2020, the RBZ invited all parties with Legacy Debts to apply for registration in order to guarantee settlement of
these debts at the rate of 1:1. The Group made applications relating to amounts incurred in USD between 2012 and 2018,
when the functional currency was USD and prior to the promulgation of SI 33 of February 2020, to providers of offshore
lines of credit as well as related parties within the wider Old Mutual Limited Group. CABS got approval for USD26.4m
owing mostly to loan repayments for offshore lines of credit and foreign suppliers of goods and services. OMZIL also
got approval for USD83.8m in respect of unremitted dividends (USD32.1m), obligations under the 2012 indigenisation
transaction (USD50m) and management fees (USD1,7m). CABS got additional approval for USD1.3 million whilst
an additional USD0.5 million in respect of management fees was also approved for other group subsidiaries. Upon
transferring local funds for the registration of legacy debts/blocked funds for the year ended 31 December 2020, a
legitimate expectation to receive cash flows under the arrangement was created and an asset was recognised on the
Group’s statement of financial position, reflecting the value of expected cash flows.
This statutory receivable has been fair valued on the assumption that a right to acquire an amount equivalent to
the debt registered at a future date now exists. The carrying value of the statutory receivable reflects management’s
assessment of the present value of the expected net cashflows to be received under this arrangement. The RBZ has
stated its intention to honour its commitment and has provided liquidity to support obligations that CABS has settled
to the tune of USD15m. In January 2022, Parliament passed the Finance Bill H.B 16 2022. The bill provides for the
Government to take responsibility for discharging the outstanding registered blocked funds on the RBZ’s balance
sheet. The terms of discharge of the blocked funds will be determined by the Minister of Finance and Economic
Development. Please refer to additional disclosures in note 25.2. For the 2021 financial year, the expected proceeds
under the arrangement are classified as a statutory receivable.
2.4 Scope of consolidation
2.4.1 Subsidiary undertakings

Subsidiary undertakings are those entities controlled by the Group. The financial statements of subsidiaries are included
in the Group financial statements from the date that control commences until the date that control ceases. Subsidiary
undertakings include structured entities that are created and designed so that voting or similar rights are not the
dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only,
and the relevant activities are directed by means of contractual arrangements. The results of subsidiary undertakings
acquired and disposed of during the year are included in profit or loss from the date of acquisition, up to the date of
disposal or control ceasing. Intra-Group balances and transactions, and all profits and losses arising from intra-Group
transactions, are eliminated in preparing the Group financial statements. Unrealised losses are not eliminated to the
extent that they provide evidence of impairment.
Non-controlling interests (NCI) are measured at their proportionate share of the values of the assets and liabilities
recognised at initial recognition in business combination. Changes in the Group’s interest in a subsidiary that do not
result in a loss of control are accounted for as equity transactions. The Group financial statements consolidate those of
the Company and its subsidiaries (together referred to as the Group). The parent company financial statements present
information about the Company as a separate entity and not about the Group.
2.4.2 Structured Entities

Control exists when the Group is exposed or has rights to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee. The Group remains exposed to the variability
of returns from the performance of the other entity. The Group considers evidence from its holding of debt or equity
instruments as well as other forms of involvement such as provision of funding, liquidity support, credit enhancement
and guarantees to the other entity. The Group financial statements include the assets, liabilities, and results of the
Group together with subsidiary undertakings controlled by the Group.
2.4.3 Loss of Control

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any
related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in the former subsidiary is measured as a financial asset at fair value when control is lost, or in terms of IAS 28
if it is an associate.

2.5 Revenue
Revenue comprises premium income from insurance contracts and investment contracts with a discretionary
participating feature, fee income from investment management contracts, commission income, banking interest income,
fees, and commission, non-banking interest income, dividend income, investment income, and fees for administration
and management of policyholder funds. Banking interest income and expense presented in the statement of profit or
loss and other comprehensive income include interest on financial assets and financial liabilities and all fees received
and paid measured at amortised cost calculated on an effective interest rate basis. Fees are included if they are integral
to the calculation of the effective interest rate. Fee and commission income from contracts with customers is measured
based on the consideration specified in a contract with a customer. Fees charged for management services provided
are recognised as revenue in profit or loss as the services are provided. Revenue is also accounted for in accordance with
the particular accounting policies as set out in section 2.6 and 2.13 below.
2.6 Insurance and investment contracts
2.6.1 Classification of contracts

Contracts under which the Group accepts significant insurance risk from another party (the policyholder), by agreeing
to compensate the policyholder or other beneficiary of a specified uncertain future event (the insured event) which
adversely affects the policyholder, are classified as insurance contracts. Insurance risk is risk which is distinct from
financial risk. Financial risk is the risk of a possible future change in one or more of a specified interest rate, security
price, commodity price, foreign exchange rate, index of prices or rates, a credit rating or credit index or other variable,
provided that in the case of a non-financial variable that the variable is not specific to a party to the contract.
Insurance risk is significant if, and only if, an insured event could cause an insurer to pay significant additional benefits
in any scenario, excluding scenarios that lack commercial substance. If significant additional benefits would be payable
in scenarios that have commercial substance, then significant insurance risk exists even if the insured event is extremely
unlikely or even if the expected present value of contingent cash flows is a small proportion of the expected present
value of all remaining contractual cash flows.
A contract that is classified as an insurance contract remains an insurance contract, until all rights and obligations
are extinguished or expire. Contracts under which the transfer of insurance risk to the Group from the policyholder
is not significant are classified as investment contracts. Contracts with a discretionary participating feature are those
under which the policyholder holds a contractual right to receive additional payments as a supplement to guaranteed
minimum payments. These additional payments, the amount or timing of which is at the Group’s discretion, represent
a significant portion of the total contractual payments and are contractually based on:
• the performance of a specified pool of contracts or a specified type of contract, and
• realised and/or unrealised investment returns on a specified pool of assets held by the Group.
Contracts with a discretionary participating feature may be classified either as insurance contracts or investment
contracts. In the case of the Group all contracts with a discretionary participating feature are accounted for in the same
manner as insurance contracts.
2.6.2 Premiums on contracts

Premiums and annuity considerations receivable under insurance contracts and investment contracts with a
discretionary participating feature are recognised gross of commission and exclude taxes and levies. Premiums in
respect of other insurance contracts and investment contracts with a discretionary participation feature are recognised
when due for payment. Outward reinsurance premiums are recognised when due for payment. Amounts received
under investment contracts other than those with a discretionary participating feature are recorded as deposits in
investment contract liabilities.
2.6.3 Revenue on investment management service contracts

Revenue from asset management consists of asset management fees, performance fees and administration fees. Fees
are recognised as revenue over time as the Group provides the services. When the Group receives up-front payments for
services to be rendered in the future, the payments are accounted for as contract liabilities (deferred revenue liabilities).
If the amount of the fee can be reliably estimated, the Group recognises revenue over time as the services are rendered.
If the fee cannot be reliably estimated, the recognition of fees-based variables are delayed until significant uncertainty
regarding the Group’s entitlement to the fee and the measurement of the fee have been resolved.
46
Annual Report 2021

2.6.4 Claims on contracts

Claims and benefits incurred under insurance contracts and investment contracts with a discretionary participating
feature include maturities, annuities, surrenders, pension commutations, withdrawal benefits, and death and disability
payments and are recognised in profit or loss.
Maturity and annuity claims are recorded as they fall due for payment. Death and disability claims and surrenders are
accounted for when notified. Reinsurance recoveries are accounted for in the same period as the related claim.
Amounts paid under investment contracts other than those with a discretionary participating feature are recorded as
deductions from investment contract liabilities. Claims incurred in respect of short-term insurance general business
consist of claims, and claims handling expenses paid during the financial year, together with the movement in the
provision for outstanding claims.
Claims outstanding comprise provision for the Group’s estimate of the ultimate cost of settling all claims incurred but
unpaid at the reporting date whether reported or not, and an appropriate prudential margin. Claims outstanding are
assessed by reviewing individual claims and making allowance for claims incurred but not yet reported, the effect of
both internal and external foreseeable events, such as change in claims handling procedure, inflation, judicial trends,
legislative changes and past experience and trends. Claim provisions for claims outstanding are discounted where
there is a particularly long period from incident to claims settlement and where there exists a suitable claims pattern
from which to calculate the discount.
2.6.5 Insurance contract liabilities and investment contracts with a discretionary participating feature
Insurance contract provisions are measured using the Financial Soundness Valuation (FSV) method as set out in the
guidelines issued by the Actuarial Society of South Africa (ASSA) in Standard of Actuarial Practice (SAP) 104 (version 8).
Under this guideline, provisions are valued using realistic expectations of future experience, with prescribed margins for
prudence and deferral of profit emergence.
Provisions for investment contracts with a discretionary participating feature are also computed using FSV method.
Surplus allocated to policyholders but not yet distributed (i.e. bonus smoothing reserve) related to these contracts is
included as a carrying value of liabilities. Investment options and guaranteed payments are computed on the prospective
deposit method, which produces reserves equal to the present value of future benefit payments. Derivatives embedded
in an insurance contract are not separated and measured at fair value if the embedded derivative itself qualifies for
recognition as an insurance contract. The entire contract is measured as described above.
The Group performs liability adequacy testing on its insurance liabilities (including investment contract liabilities with
discretionary participating features) to ensure that the carrying amount of its liabilities is sufficient in view of estimated
future cash flows. When performing the liability adequacy test, the Group discounts all contractual cash flows and
compares this amount to the carrying value of the liability. Where a shortfall is identified, an additional provision is
made. The provision estimation techniques and assumptions are periodically reviewed, with any changes in estimates
being reflected in profit or loss as they occur.
Whilst the directors consider that the gross insurance contract provisions and the related reinsurance recovery are
fairly recognised on the basis of the information currently available to them, the ultimate liability will vary as a result
of subsequent information and events, and may result in significant adjustments to the amount provided. The Group
applies shadow accounting in relation to certain insurance contract provisions, which are supported by owner-occupied
properties, on which unrealised gains and losses are recognised within other comprehensive income.
2.6.6 Investment contract liabilities

Liabilities for investment contracts without a discretionary participating feature are classified as financial liabilities at fair
value through profit or loss and are measured at fair value. For unit linked and market linked contracts, this is calculated
as the account balance, which is the value of the units allocated to the policyholder, based on the bid price value of the
assets in the underlying fund (adjusted for tax). For other linked contracts, the fair value of the liability is determined
by reference to the fair value of the underlying assets, and is in accordance with the FSV method, except that negative
dollar reserves arising from the capitalisation of future margins are not permitted. The fair value of the liability is subject
to the “deposit floor” such that the liability established cannot be less than the amount repayable on demand.

2.6.7 Acquisition costs on long-term insurance

Acquisition costs, disclosed as sales remuneration, comprise all direct and indirect costs arising from the sale of insurance
contracts. The FSV method, used to determine insurance contract provisions and provisions for investment contracts
with a discretionary participating feature, makes implicit allowance for the deferral of acquisition costs, therefore, no
explicit deferred acquisition cost asset is recognised in the statement of financial position for the contracts issued in
these areas.
2.6.8 Deferred acquisition costs in respect of investment management service contracts

Costs that are directly attributable to securing an investment management service contract are deferred if they can
be identified separately and measured reliably and it is probable that they will be recovered. The incremental costs of
obtaining a contract are those costs that the Group incurs to obtain a contract with the customer that it would not have
incurred if the contract had not been obtained.
2.7 Intangible assets

Intangible assets are measured at cost on initial recognition. Following initial recognition, intangible assets are carried
at cost less accumulated amortisation and impairment losses.
Intangible assets are amortised over their useful life and assessed for impairment whenever there is an indication that
the intangible asset may be impaired. The amortisation period and the amortisation method is reviewed at least each
financial year-end. Changes in expected useful life or the expected pattern of consumption of future economic benefits
embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, and treated
as changes in accounting estimates. Intangible assets are amortised over a period of 5 years using the straight-line
method.
The carrying value of capitalised development costs is reviewed for impairment annually when the asset is not yet in use
or more frequently when an indication of impairment arises during the reporting year.
Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the future economic
benefits embodied in the specific asset to which it relates. On derecognition of intangible assets the remaining carrying
amount of the asset is written down in profit or loss in the period of derecognition.
2.8 Investment in subsidiary companies

Investments in subsidiary companies are initially recognised at cost. Subsequent measurement is at cost less any
impairment.
2.9 Investment property

Investment property is real estate held to earn rentals and/or for capital appreciation. It does not include owner-
occupied property.
Investment properties are initially measured at cost and subsequently at fair value through profit or loss. Recorded
values are determined by internal professional valuers who perform valuations annually. The recorded values are tested
by comparing with values determined by three independent external valuers for a sample of properties accounting for
at least 65% of the total value of the property portfolio or for at least the top twenty five buildings by value and as well
as properties being valued for the first time.
An investment property shall be derecognised on disposal or when the investment property is permanently withdrawn
from use and no future economic benefits are expected from disposal.
The valuation methodology adopted is dependent upon the nature of the property. The income capitilisation method
was applied on all income producing properties. This method was applied on industrial, retail, and commercial
properties and offices. The direct comparison method was applied to land holdings and residential properties. Property
developments are valued in a similar manner to income generating assets except where information about future net
income cannot be determined with sufficient confidence, in which case fair value is estimated with reference to the
value of the land, and the cost of construction to date.
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2.9 Investment property (cont’d)

Surpluses and deficits arising from changes in fair value are reflected in profit or loss.
For properties reclassified during the year from property and equipment to investment properties up to the date of
change any revaluation gain arising is initially recognised in profit or loss to the extent of previously charged impairment
losses. Any residual excess is taken to the revaluation reserve. Revaluation deficits are recognised in the revaluation
reserve to the extent of previously recognised gains and any residual deficit is accounted for in profit or loss.
Investment properties that are reclassified to owner occupied property should be revalued at date of transfer, with
any difference recognised in profit or loss. Its fair value at date of reclassification becomes its fair value for subsequent
accounting.
2.10 Property and equipment
Owned assets
Owner-occupied property is recognised at revalued amounts, being the fair value at the date of the revaluation
less subsequent accumulated depreciation and accumulated impairment losses. Equipment, principally computer
equipment, motor vehicles, fixtures and furniture, are recognised at cost less accumulated depreciation and impairment
losses. Property under development is valued at cost.
Subsequent expenditure
Subsequent expenditure is capitalised when it can be reliably measured and will result in probable future economic
benefits. Expenditure incurred to replace a separate component of an item of owner-occupied property or equipment
is capitalised to the cost of the item and the component replaced is derecognised. All other expenditure is recognised
in profit or loss as an expense when incurred.
Revaluation of owner-occupied property

Owner-occupied property is recognised at fair value. Internal professional valuers perform valuations annually. The
procedures followed are as per note 2.9 and 18.
When an individual owner-occupied property is revalued, any increase or decrease in its carrying amount (as a result
of the revaluation) is recognised in other comprehensive income in a revaluation reserve, except to the extent that it
represents an increase that reverses a revaluation decrease previously recognised in profit or loss, or a decrease that
exceeds the revaluation surplus in which case the increase or decrease is recognised in profit or loss.
Derecognition
The carrying amount of an item of property and equipment is derecognised on disposal or when no future economic
benefits are expected from its use or disposal. On derecognition of equipment, any gain or loss on disposal, determined
as the difference between the net disposal proceeds and the carrying amount of the asset, is recognised in profit or loss
in the period of derecognition. In the case of owner-occupied property, any surplus in the revaluation reserve in respect
of the individual property is transferred directly to retained earnings.
Depreciation
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of items of owner-
occupied property and equipment that are accounted for separately.
In the case of owner-occupied property, on revaluation, any accumulated depreciation at the date of the revaluation is
eliminated against the gross carrying amount of the property concerned and the net amount restated to the revalued
amount. Subsequent depreciation charges are adjusted based on the revalued amount for each property. Land is not
depreciated.
Owner-occupied property is depreciated over a period of 50 years using the straight-line method. Leasehold property
is depreciated over a period of 20 years using the straight-line method. Motor vehicles, computer equipment, fixtures
and furniture are depreciated over 5 years using the straight-line method.
Residual values, useful lives and depreciation methods are re-assessed at each reporting date.

2.11 Taxation
The tax charge for the current year comprises current and deferred tax. Included within the tax charge are charges
relating to normal income tax, and taxes payable on behalf of policyholders. Income tax is recognised in profit or loss
except to the extent that it relates to items recognised directly to other comprehensive income or equity, in which case
it is recognised in other comprehensive income or equity.
Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred taxation is recognised in respect of temporary differences between the carrying amount of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred taxation provided
is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities using tax
rates enacted or substantively enacted at the reporting date. Deferred taxation is charged to profit or loss except to the
extent that it relates to a transaction that is recognised directly in equity or other comprehensive income. The effect on
deferred taxation of any changes in tax rates is recognised in profit or loss, except to the extent that it relates to items
previously charged or credited directly to equity or other comprehensive income.
Deferred-tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to
the extent that it is probable that future taxable income will be available, against which the unutilised tax losses and
deductible temporary differences can be used. Deferred-tax assets are reviewed at each reporting date and reduced to
the extent that it is no longer probable that the related tax benefits will be realised and such reductions are reversed
when the probability of future taxable profits improves.
2.12 Reinsurance
Reinsurance assets comprise contracts with reinsurers under which the Group is compensated for losses on one or
more contracts which are classified as insurance contracts. Reinsurance on contracts that do not meet this classification
is classified as financial assets. Anticipated reinsurance recoveries are disclosed separately as assets. Reinsurance and
other recoveries are assessed in a manner similar to the assessment of claims outstanding.
A reinsurance asset principally includes the reinsurers’ share of liabilities in respect of contracts with policyholders.
Amounts recoverable under reinsurance contracts are recognised in a manner consistent with the reinsured risks and in
accordance with the terms of the reinsurance contract. Reinsurance is presented in the statement of financial position
on a gross basis.
Reinsurance assets are assessed for impairment at each reporting date. An asset is deemed impaired if there is objective
evidence, as a result of an event that occurred after its initial recognition, that the Group may not recover all amounts
due, and that the event has a reliably measurable impact on the amounts that the Group will receive from the reinsurer.
2.13 Financial instruments

Recognition and derecognition
Initial recognition of financial assets
Under IFRS 9: Financial Instruments or ‘IFRS 9’ , there are three measurement classification as following:
• Amortised cost;
• Fair Value through Other Comprehensive Income (FVOCI) which may include debt or equity instruments; or
• Fair Value through Profit and Loss (FVTPL).
The classification of financial assets for the Group is based on whether the financial assets are equity instruments, debt
instruments held or derivative assets, and this is in line with the requirements of IFRS 9. Equity instruments held for
trading purposes and derivative assets are mandatorily categorised as financial assets at FVTPL. The classification and
measurement of debt instruments is dependent on the business model in which the financial asset is managed and
its contractual cash flow characteristics. Derivatives embedded in contracts where the host is a financial asset in the
scope of the standard are not accounted for separately. Instead, the hybrid financial instrument as a whole is assessed
for classification.
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2.13 Financial instruments (cont’d)

A debt instrument is classified as a financial asset at amortised cost if it meets both of the following conditions (and is
not designated as at FVTPL):
• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.

A debt instrument is measured at FVOCI if it meets both of the following conditions (and is not designated as at FVTPL):
• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
On initial recognition of an equity instrument that is not held for trading, the instrument may be irrevocably designated
at FVOCI. In such an instance, changes in the equity instrument’s fair value are recorded in other comprehensive
income (OCI). This election is made on an investment-by-investment basis.
All debt instrument financial assets not classified as measured at amortised cost or FVOCI are measured at FVTPL. On
initial recognition, the Group/the Company may irrevocably designate a debt instrument financial asset that otherwise
meets the requirements to be measured at amortised cost or at FVOCI or at FVTPL, if doing so, eliminates or significantly
reduces an accounting mismatch that would otherwise arise.
Transaction costs that are directly attributable to the acquisition of financial assets are expensed in profit or loss for
financial assets initially classified at FVTPL. For financial assets not classified at FVTPL, transaction costs are added to or
deducted from the fair value at initial recognition. On initial recognition, financial assets are measured at fair value.
Initial recognition of financial liabilities

On initial recognition, financial liabilities are measured at fair value plus, in the case of financial liabilities not classified at
FVTPL, transaction costs that are incremental and directly attributable to the issue of the financial liability. Transaction
costs of financial liabilities carried at FVTPL are expensed in profit or loss.
Subsequent measurement of financial assets

The following accounting policies apply to the subsequent measurement of financial assets.
Financial assets at These assets are subsequently measured at fair value. Net gains and losses, including any
FVTPL interest or dividend income, are recognised in profit or loss.
Financial assets at These assets are subsequently measured at amortised cost using the effective interest
amortised cost method. The amortised cost is reduced by impairment losses. Interest income, foreign
exchange gains and losses, and impairment are recognised in profit or loss. Any gain or loss
on derecognition is recognised in profit or loss.
Debt investments at These assets are subsequently measured at fair value. Interest income calculated using
FVOCI the effective interest method, foreign exchange gains and losses, and impairment
are recognised in profit or loss. Other net gains and losses are recognised in OCI. On
derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at These assets are subsequently measured at fair value. Dividends are recognised as income
FVOCI in profit or loss unless the dividend clearly represents a recovery of part of the cost of the
investment. Other net gains and losses are recognised in OCI and are never reclassified to
profit or loss.
Subsequent measurement of financial liabilities

Subsequent to initial recognition all financial liabilities at FVTPL are measured at fair value, except that any instrument
that does not have a quoted market price in an active market and whose fair value cannot be reliably measured is
stated at cost. Fair value movements attributable to changes in the credit risk of a financial liability designated at FVTPL
is recorded in other comprehensive income and not recycled to profit or loss. The balance of the fair value movement
is recorded in profit or loss. Other financial liabilities are measured at amortised cost.


Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position
when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either
to settle them on a net basis or to realise the asset and settle the liability simultaneously. Income and expenses are
presented on a net basis only when permitted under IFRS Standards, or for gains and losses arising from a Group of
similar transactions such as in the Group’s trading activity.
Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to the cashflows from the financial asset expire, or
it transfers those rights in a transaction in which substantially all of the risks and rewards of ownership of the financial
asset are transferred, or in which the Group neither transfers nor retains substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset.
On derecognition of a financial asset, the difference between the carrying amount of the asset and the sum of the
consideration received and any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.
Derecognition of financial liabilities

The Group derecognises a financial liability when the contractual obligations are discharged, cancelled or expire. The
Group also derecognises the financial liability when its terms are modified and the cashflows of the modified liability
are substantially different, in which case a new financial liability based on the new terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration
paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
Business model assessment

The Group makes an assessment of the objective of a business model across its various business units in order to
determine the appropriate classification basis of financial instruments. The Information considered includes:
Banking business
The stated policies and objectives for the portfolio and the operation of those policies in practice. In particular, whether
management’s strategy focuses on earning contractual interest revenue, maintaining a particular interest rate profile,
matching the duration of the financial assets to the duration of the liabilities that are funding those assets or realising
cash flows through the sale of the assets;
Indicators of what the business model is:

• the risks that affect the performance of the business model (and the financial assets held within that business
model) and how those risks are managed;
• how managers of the business are compensated – e.g. whether compensation is based on the fair value of the assets
managed or the contractual cash flows collected; and
• the frequency, volume and timing of sales in prior periods, the reasons for such sales and its expectations about
future sales activity. However, information about sales activity is not considered in isolation, but as part of an overall
assessment of how the business’s stated objective for managing the financial assets is achieved and how cash flows
are realised.
Financial assets that are held for trading or managed and whose performance is evaluated on a fair value basis are
measured at fair value through profit or loss because they are neither held to collect contractual cash flows nor held
both to collect contractual cash flows and to sell financial assets.
Assessment of whether contractual cash flows are solely payments of principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial recognition.
‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal
amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as profit margin. In assessing whether the contractual cash flows are solely payments of
principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the
financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that
it would not meet this condition. In making the assessment, the Group considers:
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Annual Report 2021


• contingent events that would change the amount and timing of cash flows;
• leverage features;
• prepayment and extension terms;
• terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse asset arrangements); and
• features that modify consideration of the time value of money – e.g. yearical reset of interest rates.
The business holds a portfolio of long-term fixed rate loans for which the entity has the option to propose to revise the
interest rate at yearly reset dates. These reset rights are limited to the market rate at the time of revision. The borrowers
have an option to either accept the revised rate or redeem the loan at par without penalty. The Group has determined
that the contractual cash flows of these loans are solely payments of principal and interest because the option varies
the interest rate in a way that is consideration for the time value of money, credit risk, other basic lending risks and costs
associated with the principal amount outstanding.
Insurance business
The business holds a portfolio of long-term fixed rate public sector securities, debentures and short term fixed deposits
in money market. Assessment determined that the contractual terms of these interest bearing securities give rise to
cashflows on specified dates that are solely payments of principal and interest on the principal amount outstanding.
The business elected to irrevocably designate interest bearing securities to be measured at fair value through profit or
loss in order to reduce the recognition inconsistency that would otherwise arise from measuring financial assets with
policyholder liabilities or recognising the gains and losses on them on different bases.
The business did not elect to measure equity instruments in other comprehensive income because they are underlying
assets that are held to back policyholder liabilities. The business did not hold financial assets at fair value through other
comprehensive income at the reporting date.
Rest of Group
The other businesses hold their interest bearing securities (debentures, fixed deposits in money markets and public
sector securities) to maturity for the purpose of collecting contractual cashflows. The cashflows of these investments
meet the SPPI (solely payments of principal and interest on principal amount outstanding) test and are classified at
amortised cost.
Equity investments (both listed and unlisted) and unit trusts investments are measured at fair value through profit or
loss. These businesses did not hold financial assets at fair value through other comprehensive income at the reporting
date.
Impairment of financial assets

The Group adopted the Expected Credit Loss (ECL) model and this applies to financial assets measured at amortised
cost (for example mandatory reserve deposits with central banks, reinsurers’ share of policyholder liabilities, loans and
advances, trade and other receivables, cash and cash equivalents, and corporate debt securities held by the Group) as
well as financial assets measured at FVOCI, but not to investments in equity instruments.
The ECL impairment loss allowance is an unbiased, probability-weighted amount determined by evaluating a range of
possible outcomes that reflects reasonable and supportable information that is available without undue cost or effort
of past events, current conditions and forecasts of forward-looking economic conditions. The ECL model is dependent
on the availability of relevant and accurate data to determine whether a significant increase in credit risk occurred
since initial recognition, the probability of default (PD), the loss given default (LGD), and the possible exposure at default
(EAD). Of equal importance is sound correlation between these parameters and forward-looking economic conditions.
ECL reflects the Group’s own expectations of credit losses. However, when considering all reasonable and supportable
information that is available without undue cost or effort in estimating ECL, the Group should also consider observable
market information about the credit risk of the financial instrument or similar financial instruments. In the absence of
sufficient data, management apply expert judgement within an established governance framework to determine the
required parameters. The expert judgement process is based on available internal and external information.


Financial assets measured amortised cost and FVOCI
In determining the ECL allowances for financial assets, the following significant judgements and estimates were
considered.
• In the absence of sufficient depth of data and the sophistication of credit risk management systems and protocols,
management applies expert judgement within a governance framework to determine the required parameters. The
expert judgement process is based on available internal and external information. Due to differences in availability
of data and maturity of credit risk management across the Group, different approaches are used to determine the
key parameters.
• Judgement is applied in identifying the qualitative and quantitative triggers and thresholds used to identify
significant increases in credit risk since initial recognition of the financial assets. Depending on the availability of
reasonable and supportable information without undue cost or effort, significant increases in credit risk is identified
through, amongst others, increases in behaviour scores, arrears aging, and portfolio assessments.
• In some instances the 12-month PDs are calculated by a behaviour scoring model that takes into account internal
and external information, where available. The ‘behaviour PDs’ are linked to empirical default rates. A specific
change in the behaviour score (and associated PD) indicates that the credit risk has increased significantly since
initial recognition. Identifying the specific change in the PD that would trigger a significant increase in credit risk
includes a degree of judgement. The behaviour scorecard is monitored and is recalibrated if necessary. Translating
12-months PDs into lifetime PDs requires management judgement and is based on the timing of defaults observed
historically. In low default, commercial and corporate portfolios PDs are calculated using a combination of internal
ratings, default experience and PD floors based on sovereign credit ratings for the jurisdiction.
• Various arrear aging thresholds are also used to determine whether a significant increase in credit risk took place
since initial recognition. Judgement is applied to determine the appropriate arrears threshold for different financial
assets. The Group also makes use of the rebuttable presumption that a significant increase in credit risk has taken
place when a financial asset is 30 days past due or one payment in arrears.
• The Group applies judgement in identifying default and credit-impaired financial assets. In making this judgement,
the Group considers the arrears category where the balance has been allocated to, whether the balance is in legal
review, debt review or under administration or expert judgement. Financial assets are credit impaired when one or
more events with a detrimental impact on the expected cash flows have taken place.
• A key judgement in determining the LGDs is the time period that the cash flows must be estimated for. The time
period is estimated based on historical data that can be volatile. When the cash flows are too volatile the time
period is capped to limit volatility. LGDs are influenced by estimates of the amounts to be recovered from the
realisation of collateral and the estimated costs to realise the collateral.
• The Group applies judgement in selecting the following macroeconomic factors: CPI inflation and unemployment
rate. Management applied judgement in determining the number of scenarios to be used, the probability assigned
to each scenario, and the time period used to estimate the impact of forward-looking information of the ECL losses.
By nature, the estimation of the values of macroeconomic factors in the near future is judgemental and subject to
uncertainty.
• In the absence of a reliable correlation between macroeconomic factors and ECL losses, the Group applies expert
judgement to decide whether a management overlay provision should be included in the measurement of ECL
losses.
Estimates regarding credit risk parameters and the impact of forward-looking information used in the calculation of the
ECL loss amount should be reviewed at each reporting date and updated if necessary.
The ECL loss amount depends on the specific stage where the financial instrument has been allocated to within the
ECL model:
• Stage 1: At initial recognition a financial instrument is allocated into stage 1, except for purchased or originated
credit impaired financial instruments.
• Stage 2: A financial instrument is allocated to stage 2 if there has been a significant increase in credit risk since
initial recognition of the financial instrument.
• Stage 3: A financial instrument is allocated to stage 3 if the financial instrument is in default or is considered to be
credit impaired.
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Annual Report 2021


Under IFRS 9, impairment loss allowances are measured on either of the following bases:
• 12-month ECLs: This is the portion of the lifetime expected credit losses that represent the expected credit losses
that result from default events on a financial instrument that are possible within the 12 months after the reporting
date (stage 1); and
• Lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial
instrument (stage 2 and 3).
The Reserve Bank of Zimbabwe (RBZ) also requires the Group to provide for provisions for loan losses rather than
impairment losses as determined in accordance with IFRS 9. Where the provision as per RBZ guidelines is higher than
the IFRS 9 impairment losses, the excess is treated as an appropriation of equity. The excess is transferred between
the Regulatory provision reserve and retained earnings and unwinds when the IFRS impairment is higher than the
regulatory provision as in accordance with the provisions of the Banking Regulations, 2000, Statutory Instrument 205 of
2000.
Group’s assessment
The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured
as twelve-month ECLs:
• Financial assets that are determined to have low credit risk at the reporting date; and
• Financial assets where credit risk (i.e. the risk of default occurring over the expected life of the financial instrument)
has not increased significantly since initial recognition.
The Group has elected to apply the IFRS 9 simplified approach in measuring expected credit losses for non-banking
business. This uses a provision matrix when determining the lifetime expected loss allowance for all trade receivables,
contract assets, and lease receivables and cash and cash equivalents.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and
when estimating ECLs, the Group considers quantitative and qualitative information, based on the Group’s historical
experience, credit assessment, and including forward-looking information. The Group’s assessment of a significant
increase in credit risk from initial recognition consists of a primary and secondary risk driver as follows:
• The primary risk driver aligns to the quantitative credit risk assessments performed, such as the credit score, credit
rating, probability of default or arrears aging of a financial instrument.
• The secondary risk assessment considers a broad range of qualitative risk factors based on a forward looking view
such as economic and sector outlooks. The secondary risk assessment can be performed on a portfolio basis as
opposed to a quantitative assessment which is done at a financial instrument level.
These primary and secondary risk drivers are included by the Group as part of the ongoing credit risk management.
When making a quantitative assessment, the Group uses the change in the probability of default occurring over the
expected life of the financial instrument. This requires a measurement of the probability of default at initial recognition
and at the reporting date.
A rebuttable assumption is that the credit risk, since initial recognition, has increased significantly if a financial
instrument is 30 days past due on any payments or is one payment in arrears. It is not anticipated that this assumption
will be rebutted.
The maximum period considered when estimating ECLs is the maximum contractual period over which the Group
is exposed to credit risk. The ECL calculation of a financial instrument takes into account both the contractual and
available behavioural repayment patterns over the relevant estimation period.
A financial asset is in default when the financial asset is credit-impaired or if the Basel definition of default is met. Where
applicable, the rebuttable presumption that default does not occur later than when a financial asset is 90 days past due,
is applied.


Measurement of expected credit losses
ECLs are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity
in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the
effective interest rate of the financial asset.
For presentation the ECL allowances are deducted from the gross carrying amount of the assets. ECLs are presented
separately in the consolidated income statement.
Significant judgments and estimates

In determining the ECL allowances for loans and advances the following significant judgements and estimates were
considered. The availability of information and the sophistication of credit risk management systems and protocols will
influence the judgements made and estimates considered.
• The Group applies judgement in determining whether a significant increase in credit risk took place since initial
recognition of financial assets at amortised cost. Judgement was applied in identifying the qualitative and
quantitative triggers and thresholds used to identify significant increases in credit risk since initial recognition of
the financial assets. Depending on the availability of reasonable and supportable information without undue cost or
effort, significant increases in credit risk is identified through increases in behaviour risk, arrears aging, and portfolio
assessments. The Group makes use of the rebuttable presumption that a significant increase in credit risk has taken
place when a financial asset is 30 days past due or one payment in arrears. The assessments are carried out on a
regular basis as part of the credit risk management activities of the Group.
• The Group applies judgement in identifying default and credit-impaired financial assets. The Group considers the
arrears category where the balance has been allocated to or whether the balance is in legal review, debt review or
under administration. Balances are considered to be in default when the balances have been past due for 90 days or
more or have been identified to be in default after applying expert judgement. Financial assets are credit impaired
when one or more events with a detrimental impact on the expected cash flows have taken place.
• The calculation of the ECL balance is primarily influenced by the stage allocation of the balance and the risk
parameters. The Group makes use of estimates of PDs, LGDs and EADs to calculate the ECL balance for financial
assets at amortised cost. Depending on the relevant information available, PDs are based on a behavioural scoring
model and historic default rate curves or are determined through internally developed statistical models. LGDs are
derived from a default recovery time series model that takes recency of payments into account or through internally
developed statistical models. EADs are determined with reference to expected amortisation schedules and taking
into account credit conversion factors as applicable for undrawn or revolving facilities.
• The ability to include forward-looking information in the measurement of ECL balances is dependent on the
existence of reliable and quantifiable correlation between forward-looking factors and changes in the ECL balance.
When such correlations do not exist and where applicable, management applies expert judgement to determine an
overlay provision to incorporate best estimates of the impact of forward-looking information. Any overlay provision
is based on available information and qualitative risk factors within a governed process.
Presentation of allowance for ECL in the statement of financial position

Loss allowances for ECL are presented in the statement of financial position as follows:
• Financial assets measured at amortised cost: as a deduction from the gross carrying amount of the assets;
• Loan commitments and financial guarantee contracts: generally, as a provision; and
• Where a financial instrument includes both a drawn and an undrawn component, and the Group cannot identify
the ECL on the loan commitment component separately from those on the drawn component the Group presents
a combined loss allowance for both components. The combined amount is presented as a deduction from the
gross carrying amount of the drawn component. Any excess of the loss allowance over the gross amount of the
drawn component is presented as a provision; and
• Debt instruments measured at FVOCI: no loss allowance is recognised in the statement of financial position because
the carrying amount of these assets is their fair value. However, the loss allowance is disclosed and is recognised in
the fair value reserve.
Write-off
Loans and debt securities are written off (either partially or in full) when there is no realistic prospect of recovery. This is
generally the case when the Group determines that the borrower does not have assets or sources of income that could
generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off
could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.
56
Annual Report 2021

2.14 Foreign currency translation

Foreign currency transactions are translated at the spot exchange rate at the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are translated into the relevant functional currency at rates of exchange
ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are recognised
at fair value are translated into the functional currency at foreign exchange rates ruling at the dates the fair values were
determined.
Non-monetary assets and liabilities denominated in foreign currencies that are recognised at historical cost are
translated into the functional currency at the rate of exchange ruling at the date of the initial recognition of the
asset and liability and are not subsequently translated. Exchange gains and losses on the translation and settlement
during the period of foreign monetary assets and liabilities are recognised in profit or loss as other income. Exchange
differences for non-monetary items are recognised in other comprehensive income when the changes in the fair value
of the non-monetary item are recognised in other comprehensive income and in profit or loss if the changes in fair value
of the non-monetary item are recognised in profit or loss.
Where the exchange rate is officially fixed by government, the Group will assess the extent to which immediate value
can be obtained at the official exchange rate. Where the lack of exchangeability is not significant in extent, assets and
liabilities will be translated at the official exchange rate. Where there is a significant lack of exchangeability which is
temporary in nature, the Group will use the first subsequent exchange rate at which exchangeability can be realised.
In instances where there is lack of exchangeability, in the Group’s judgement which is long term in nature, the Group
will estimate a premium or discount on the official exchange rate which faithfully presents the prevailing economic
circumstances taking into account observable market variables .
Sensitivities on the exchange rate are disclosed under Note 64.
2.15 Employee benefits

Employee benefits are all forms of consideration given by the Group in exchange for services rendered by employees.
(i) Post-employment benefits

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions
to defined contribution pension plans are recognised as an employee benefit expense in profit or loss as the related
service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund is available or
a reduction in future payments is probable.
(ii) Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer to those
benefits and when the Group recognises costs for restructuring. If the benefits are not expected to be settled wholly
within 12 months of the reporting date, then they are discounted. Termination benefits for voluntary redundancies
are recognised as an expense at the earlier of when the employee accepts the offer; and when a restriction on the
Group’s ability to withdraw the offer takes effect.
(iii) Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be estimated reliably.
(iv) Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees
have earned in return for their service in the current and prior periods determined using the projected unit credit
method. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss
in the period in which they arise.

2.16 Provisions
Provisions are recognised 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. The expense relating to any provision is presented in profit or loss net of any reimbursement.
Where the effect of discounting is material, provisions are discounted. The discount rate used is a pre-tax rate that
reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Future operating costs or losses are not provided for. Staff related provisions mainly comprise of bonus provisions, leave
pay provision and cash settled share based payments provisions. Other provisions are any provisions not related to staff
and are generally individually immaterial.
2.17 Share-based payments

Equity-settled share-based payment transactions
The services received from employees in terms of the Share Based Payment transactions, are equity settled and are
measured at the fair value of the equity instruments granted. The fair value of those equity instruments are measured
at grant date and are not subsequently re-measured. If the equity instruments granted vest immediately and the
employee is not required to complete a specified period of service before becoming unconditionally entitled to those
instruments, the services received are recognised in full on grant date in profit or loss, with a corresponding increase in
share based payment reserve.
Where the equity instruments do not vest until the employee has completed a specified period of service, it is assumed
that the services rendered by the employee, as consideration for those equity instruments, will be received in the future,
during the vesting period. These services are accounted for in profit or loss as they are rendered during the vesting
period, with a corresponding increase in share based payment reserve.
Cash-settled share-based payment transactions

The services received in cash-settled share-based payment transactions with employees and the liability to pay for those
services, are recognised at fair value as the employee renders services. Until the liability is settled, the fair value of the
liability is remeasured at each reporting date and at the date of settlement, with any changes in fair value recognised
in profit or loss for the period.
The fair value of the liability is measured at the fair value of the awards or options, by applying standard option pricing
models, taking into account terms and conditions on which the share awards or options were granted, and the extent
to which the employees have rendered services to date.
2.18 Leases
The Group assesses whether a contract is a lease in scope of IFRS 16: Leases, by determining whether the contract gives it
the right to use a specified underlying physical asset for a lease term greater than twelve months, unless the underlying
asset is of low value. Where the Group is a lessee and the lease is deemed in scope, it recognises a liability equal to the
present value of lease payments over the lease term, discounted using the incremental borrowing rate applicable in the
economic environment of the lease. The lease liability is recognised in ‘Other liabilities’. A corresponding right-of-use
asset equal to the liability, adjusted for any lease payments made at or before the commencement date, is recognised
in ‘Property, plant and equipment’. The lease term includes any extension options contained in the contract that the
Group is reasonably certain it will exercise.
The Group subsequently depreciates the right-of-use asset using the straight-line method over the lease term and
measures the lease liability using the effective interest method. Depreciation on the asset is recognised in ‘Depreciation
and amortisation’, and interest on the lease liability is recognised in ‘Interest expense’.
2.19 Impairment of non-financial assets

The carrying amounts of the Group’s other assets, other than financial assets and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated.
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Annual Report 2021

2.19 Impairment of non-financial assets (cont’d)

The recoverable amount is the greater of the fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessment of the time value of money and of the risks specific to the asset. For an asset that does not generate
largely independent cash flows, the recoverable amount is determined for the cash-generating unit to which the asset
belongs.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation if no impairment loss had been recognised.
Impairment losses are recognised in profit or loss
2.20 Sale and repurchase agreements

The Group enters into purchases (sales) of the investments under agreements to resell (repurchase) identical investments
at a certain date in the future at a fixed price. Investments sold under repurchase agreements continue to be recognised
in the statement of financial position and are measured in accordance with the appropriate and applicable accounting
policy. The proceeds from the sale of the investments are reported under deposits. The difference between the sale
and repurchase agreement is treated as interest and accrued over the life of the agreement using the effective interest
method. Securities lent to counterparties are also retained in the financial statements. Securities borrowed are not
recognised in the financial statements, unless they are sold to third parties, in which case the purchase and sale are
recorded with the gain or loss included in investment income. The obligation to return them is recorded at fair value as
a trading liability.
2.21 Dividends
Dividends payable to holders of equity instruments are recognised in the period in which they are declared.
2.22 Inventory
Inventory comprises largely of costs for the construction of houses for sale under housing projects. Inventory is measured
at the lower of cost or net realisable value. Net realisable value is the estimated selling price in the ordinary course
of business, less the estimated selling expenses. The cost of inventories is based on the first in first out principle and
includes borrowing costs capitalised in accordance with the Group’s accounting policies and expenditure incurred in
acquiring the inventories and bringing them to their existing location and condition. Additional disclosure in respect of
inventory are included in note 25.1.
2.23 Related parties

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence
over the other party in making financial and operational decisions. The Group has related party relationships with its
subsidiaries, fellow subsidiaries of Old Mutual Limited, company directors, other key shareholders and key management
personnel. Transactions and balances are reflected in note 38.
2.24 Share capital

Ordinary and preference share capital is classified as equity if they are non-redeemable by the holder, and if dividends
are discretionary. Coupon payments on preference share instruments are recognised as distributions within equity.
Preference share capital is classified as a liability if it is redeemable on a specific date or at the option of the holder or
if dividend payments are not discretionary. If the preference shares are non-redeemable by the holder and the entity
has an obligation to deliver cash (or other financial assets) which the entity cannot defer until liquidation then the
preference shares would be classified as a liability. Coupon payments thereon are recognised in profit or loss as an
interest expense.
2.25 Non-distributable reserve

When the Zimbabwean economy dollarised in 2009, a Financial Reporting Guidance was used to determine a foreign
currency opening statement of financial position on the date of change in functional currency from ZWL to USD. The
Group used the Guidance to translate the financial statements at the normalisation date to USD to be used as the
deemed costs in the opening statements of financial position at 1 January 2009. The surplus on the restatement of the
assets and liabilities was credited to non-distributable reserves in equity.

2.26 Segment reporting

The Group’s results are analysed and reported consistently with the way that the chief operating decision maker
(management and the executive directors) consider information when making operating decisions and also with
the basis on which resources are allocated and performance assessed by management and directors. The operating
segments are Life Assurance, General Insurance, Banking and Lending, Asset Management, and other (being the Holding
Company and other less significant Group entities).
There are four principal business activities from which the Group generates revenues. These are premium income (Life
assurance and General insurance), fee and commission income (Asset management) and banking interest and fee
income (Banking and Lending). In addition to this, investment returns are also earned on funds invested. The revenues
generated in each reported segment can be seen in the analysis of Profits and Losses in note 3.
2.27 Forthcoming requirements

Future amendments not early adopted in the 2021 annual financial statements.
At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRS
Standards that have been issued but are not yet effective:
Title Key requirements Effective Date

IFRS 17 Insurance Contracts IFRS 17 was issued in May 2017, and subsequently amended 1 January 2023
in June 2020, as replacement for IFRS 4 Insurance Contracts. (deferred from
It requires a current measurement model where estimates are 1 January 2021)
remeasured each reporting period. Contracts are measured
using the building blocks of:
• discounted probability-weighted cash flows
• an explicit risk adjustment, and
• a contractual service margin (‘‘CSM’’) representing the
unearned profit of the contract which is recognised as revenue
over the coverage period.The standard allows a choice between
recognising changes in discount rates either in the income
statement or directly in other comprehensive income. The
choice is likely to reflect how insurers account for their financial
assets under IFRS 9.
An optional, simplified premium allocation approach is

permitted for the liability for the remaining coverage for short
duration contracts, which are often written by non-life insurers.
There is a modification of the general measurement model
called the ‘variable fee approach’ for certain contracts written
by life insurers where policyholders share in the returns from
underlying items. When applying the variable fee approach the
entity’s share of the fair value changes of the underlying items
is included in the contractual service margin. The results of
insurers using this model are therefore likely to be less volatile
than under the general model.
IFRS 17 will affect the financial statements and key performance

indicators of all entities that issue insurance contracts or
investment contracts with discretionary participation features.
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Annual Report 2021

2.27 Forthcoming requirements (cont’d)

Classification of Liabilities The narrow-scope amendments to IAS 1 Presentation of 1 January 2023
as Current or Non-current – Financial Statements clarify that liabilities are classified as (deferred from
Amendments to IAS 1 either current or non-current, depending on the rights that exist 1 January 2022)
at the end of the reporting period. Classification is unaffected
by the expectations of the entity or events after the reporting
date (e.g. the receipt of a waiver or a breach of covenant). The
amendments also clarify what IAS 1 means when it refers to
the ‘settlement’ of a liability.
The amendments could affect the classification of

liabilities, particularly for entities that previously considered
management’s intentions to determine classification and for
some liabilities that can be converted into equity.
They must be applied retrospectively in accordance with the

normal requirements in IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors.
In July 2021, the Board agreed to publish an exposure draft in

the fourth quarter of 2021 that would modify the requirements
introduced by these amendments.
Property, Plant and Equipment: The amendment to IAS 16 Property, Plant and Equipment 1 January 2022
Proceeds before intended use – (PP&E) prohibits an entity from deducting from the cost of
Amendments to IAS 16 an item of PP&E any proceeds received from selling items
produced while the entity is preparing the asset for its intended
use. It also clarifies that an entity is ‘testing whether the asset
is functioning properly’ when it assesses the technical and
physical performance of the asset. The financial performance of
the asset is not relevant to this assessment.
Entities must disclose separately the amounts of proceeds and

costs relating to items produced that are not an output of the
entity’s ordinary activities.
Reference to the Conceptual Minor amendments were made to IFRS 3 Business Combinations 1 January 2022
Framework – Amendments to to update the references to the Conceptual Framework for
IFRS 3 Financial Reporting and add an exception for the recognition
of liabilities and contingent liabilities within the scope of IAS
37 Provisions, Contingent Liabilities and Contingent Assets. The
amendments also confirm that contingent assets should not
be recognised at the acquisition date.
Onerous Contracts – Cost The amendment to IAS 37 clarifies that the direct costs of ful- 1 January 2022
of Fulfilling a Contract filling a contract include both the incremental costs of fulfilling
Amendments to IAS 37 the contract and an allocation of other costs directly related to
fulfilling contracts. Before recognising a separate provision for
an onerous contract, the entity recognises any impairment loss
that has occurred on assets used in fulfilling the contract.


Annual Improvements to IFRS The following improvements were finalised in May 2020: 1 January 2022
Standards 2018-2020 • IFRS 9 Financial Instruments - clarifies which fees should
be included in the 10% test for derecognition of financial
liabilities.
• IFRS 16 Leases – amendment of illustrative example 13 to
remove the illustration of payments from the lessor relating
leasehold improvements, to remove any confusion about
the treatment of lease incentives.
• IFRS 1 First-time Adoption of International Financial
Reporting Standards – allows entities that have measured
their assets and liabilities at carrying amounts recorded
in their parent’s books to also measure any cumulative
translation differences using the amounts reported by the
parent. This amendment will also apply to associates and
joint ventures that have taken the same IFRS 1 exemption.
• IAS 41 Agriculture – removal of the requirement for entities
to exclude cash flows for taxation when measuring fair value
under IAS 41. This amendment is intended to align with the
requirement in the standard to discount cash flows on a
post- tax basis.
Disclosure of Accounting The IASB amended IAS 1 to require entities to disclose their 1 January 2023
Policies – Amendments to IAS 1 material rather than their significant accounting policies.
and IFRS Practice Statement 2 The amendments define what is ‘material accounting policy
information’ and explain how to identify when accounting
policy information is material. They further clarify that
immaterial accounting policy information does not need to
be disclosed. If it is disclosed, it should not obscure material
accounting information.
To support this amendment, the IASB also amended IFRS

Practice Statement 2 Making Materiality Judgements to
provide guidance on how to apply the concept of materiality to
accounting policy disclosures.
Definition of Accounting The amendment to IAS 8 Accounting Policies, Changes in 1 January 2023
Estimates - Amendments to Accounting Estimates and Errors clarifies how companies
IAS 8 should distinguish changes in accounting policies from changes
in accounting estimates. The distinction is important, because
changes in accounting estimates are applied prospectively to
future transactions and other future events, but changes in
accounting policies are generally applied retrospectively to past
transactions and other past events as well as the current period.
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Annual Report 2021

Deferred tax related to The amendments to IAS 12 Income Taxes require companies to 1 January 2023
assets and liabilities arising recognise deferred tax on transactions that, on initial recognition,
from a single transaction – give rise to equal amounts of taxable and deductible temporary
Amendments to IAS 12 differences. They will typically apply to transactions such as
leases of lessees and decommissioning obligations and will
require the recognition of additional deferred tax assets and
liabilities.
The amendment should be applied to transactions that occur

on or after the beginning of the earliest comparative period
presented. In addition, entities should recognise deferred tax
assets (to the extent that it is probable that they can be utilised)
and deferred tax liabilities at the beginning of the earliest
comparative period for all deductible and taxable temporary
differences associated with:
• right-of-use assets and lease liabilities, and
• decommissioning, restoration and similar liabilities, and the
corresponding amounts recognised as part of the cost of the
related assets.
The cumulative effect of recognising these adjustments is

recognised in retained earnings, or another component of
equity, as appropriate.
IAS 12 did not previously address how to account for the tax
effects of on-balance sheet leases and similar transactions and
various approaches were considered acceptable. Some entities
may have already accounted for such transactions consistent
with the new requirements. These entities will not be affected
by the amendments.

2.28 New and amended IFRS Standards that are effective for the current year
COVID-19-related Rent As a result of the COVID-19 pandemic, rent concessions have 1 June 2020/
Concessions – Amendments to been granted to lessees. Such concessions might take a variety 1 April 2021
IFRS 16 of forms, including payment holidays and deferral of lease
payments. In May 2020, the IASB made an amendment to
IFRS 16 Leases which provides lessees with an option to treat
qualifying rent concessions in the same way as they would if
they were not lease modifications. In many cases, this will result
in accounting for the concessions as variable lease payments in
the period in which they are granted.
Entities applying the practical expedients must disclose this

fact, whether the expedient has been applied to all qualifying
rent concessions or, if not, information about the nature of the
contracts to which it has been applied, as well as the amount
recognised in profit or loss arising from the rent concessions.
* The relief was originally limited to reduction in lease payments

that were due on or before 30 June 2021. However, the IASB
subsequently extended this date to 30 June 2022.
If a lessee already applied the original practical expedient,

it is required to continue to apply it consistently, to all
lease contracts with similar characteristics and in similar
circumstances, using the subsequent amendment. If a lessee
did not apply the original practical expedient to eligible lease
concessions, it is prohibited from applying the expedient in the
2021 amendment.
However, if a lessee has not yet established an accounting

policy on applying (or not) the practical expedient to eligible
lease concessions, it can still decide to do so.
Interest Rate Benchmark Re- In August 2020, the IASB made amendments to IFRS 9, IAS 1 January 2021
form Phase 2 – Amendments 39, IFRS 7, IFRS 4 and IFRS 16 to address the issues that arise
to IFRS 9, IAS 39, IFRS 7, IFRS 4 during the reform of an interest rate benchmark rate, including
and IFRS 16 the replacement of one benchmark with an alternative one.
The Phase 2 amendments provide the following reliefs:

When changing the basis for determining contractual cash flows
for financial assets and liabilities (including lease liabilities), the
reliefs have the effect that the changes, that are necessary as a
direct consequence of IBOR reform and which are considered
economically equivalent, will not result in an immediate gain or
loss in the income statement.
The hedge accounting reliefs will allow most IAS 39 or IFRS 9

hedge relationships that are directly affected by IBOR reform
to continue. However, additional ineffectiveness might need to
be recorded.
Affected entities need to disclose information about the nature

and extent of risks arising from IBOR reform to which the entity
is exposed, how the entity manages those risks, and the entity’s
progress in completing the transition to alternative benchmark
rates and how it is managing that transition.
Given the pervasive nature of IBOR-based contracts, the reliefs

could affect companies in all industries.
2.29 Comparative figures

As much as possible, comparative figures are reclassified in line with current year presentation. Where the changes
are significant, appropriate disclosures in line with IFRSs are made to provide the information around the change and
impact on prior period financial statements.
64
Annual Report 2021

3 Segment information - Life General Banking & Asset Holding Co Consolidation

Inflation adjusted audited Assurance Insurance Lending Management & Other Adjustments Total
ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm
A1 Statement of profit or loss
for the year ended 2021

Revenue
Gross earned premiums 9,337 3,664 - - - (572) 12,429
Outward reinsurance (126) (1,122) - - - - (1,248)
Net earned premiums 9,211 2,542 - - - (572) 11,181
Investment income
(non-banking) 67,814 1,520 - 262 7,225 (3,138) 73,683
Banking interest and
similar income - - 6,455 - - - 6,455
Fee income, commissions and
income from service contracts 344 248 7,516 1,470 579 (1,247) 8,910
Other income 1,714 316 3,117 86 233 (492) 4,974
Total revenue 79,083 4,626 17,088 1,818 8,037 (5,449) 105,203

Expenses
Claims and benefits (including
change in insurance contract
provisions) (51,789) (1,771) - - - 42 (53,518)
Reinsurance recoveries 42 512 - - - - 554
Net claims incurred (51,747) (1,259) - - - 42 (52,964)
Change in provision for
investment contract liabilities (6,348) - - - - - (6,348)
Fees, commissions and
other acquisition costs (880) (481) (2,263) (13) - (1) (3,638)
Banking interest payable and
similar expenses - - (619) - - 232 (387)
Impairment charges - - (975) - - - (975)
Other operating and
administration expenses (2,305) (997) (6,278) (1,062) (3,307) 3,652 (10,297)
Net monetary adjustment 957 (364) (1,031) (78) (689) 118 (1,087)

Profit before tax 18,760 1,525 5,922 665 4,041 (1,406) 29,507
Income tax expense (348) (10) (22) (136) (226) 17 (725)
Profit for the year 18,412 1,515 5,900 529 3,815 (1,389) 28,782

A2 Statement of profit or loss

Revenue
Outward reinsurance (80) (1,384) - - - - (1,464)
Investment income
(non-banking) 23,209 502 601 15 2,666 (1,369) 25,624
similar income - - 3,011 - - (6) 3,005
income from service contracts 163 156 4,668 935 - (846) 5,076
Other income 825 - 1,618 239 1,104 (64) 3,722
Total revenue 28,938 2,977 9,898 1,189 3,770 (2,771) 44,001

Expenses
provisions) (20,137) (1,197) - - - 31 (21,303)
Net claims incurred (20,127) (747) - - - 31 (20,843)
other acquisition costs (400) (209) (1,552) (9) - - (2,170)
Impairment charges - - (1,246) - - - (1,246)
Other operating and
administration expenses (1,463) (674) (3,583) (830) (1,650) 2,293 (5,907)
Net monetary adjustment (1,868) (885) (251) (96) (3,101) 3,579 (2,622)

Profit/(loss) before tax 4,073 462 2,475 254 (981) 3,163 9,446
Income tax expense 1,300 (26) (8) (46) (210) 7 1,017
Profit/(loss) for the year 5,373 436 2,467 208 (1,191) 3,170 10,463

3. Segment information - Life General Banking & Asset Holding Co Consolidation

Historical cost unaudited Assurance Insurance Lending Management & Other Adjustments Total
B1 Statement of profit or loss


Revenue
Outward reinsurance (100) (1,020) - - - (1) (1,121)
Investment income
(non-banking) 119,022 1,828 - 361 7,886 (2,715) 126,382
similar income - - 5,209 - - - 5,209
income from service contracts 280 196 5,949 1,189 467 (1,012) 7,069
Other income 1,674 316 3,747 64 278 (1,264) 4,815
Total revenue 128,420 4,199 14,905 1,614 8,631 (5,429) 152,340

Expenses
provisions) (94,722) (1,411) - - - 35 (96,098)
Net claims incurred (94,690) (1,018) - - - 35 (95,673)
other acquisition costs (687) (381) (1,814) - - (12) (2,894)
Impairment charges - - (970) - - - (970)
Other operating and
administration expenses (1,894) (773) (4,967) (879) (3,413) 3,600 (8,326)

Profit before tax 23,453 2,027 6,659 735 5,218 (1,618) 36,474
Profit for the year 22,973 2,018 6,637 612 4,952 (1,587) 35,605

B2 Statement of profit or loss

Revenue
Outward reinsurance (31) (553) - - - - (584)
Net earned premiums 2,025 663 - - - (163) 2,525
Investment income
(non-banking) 46,887 638 1,206 15 1,739 (826) 49,659
similar income - - 1,206 - - - 1,206
income from service contracts 69 58 1,964 341 - (335) 2,097
Other income 513 - 1,048 149 594 (51) 2,253
Total revenue 49,494 1,359 5,424 505 2,333 (1,375) 57,740
Expenses
provisions) (39,116) (451) - - - 14 (39,553)
Net claims incurred (39,111) (293) - - - 14 (39,390)
other acquisition costs (152) (111) (624) (3) - - (890)
Credit losses and
impairment charges - - (755) - - - (755)
Other operating and
administration expenses (644) (274) (1,345) (304) (750) 993 (2,324)
Profit before tax 6,999 681 2,410 198 1,583 (355) 11,516
Profit for the year 6,724 677 2,409 171 1,504 (349) 11,136
66
Annual Report 2021

3. Segment information - Life General Banking & Asset Holding Co Consolidation

C1
Statement of
financial position
as at 31 December 2021

Assets
Assets
Investment property 46,216 56 2,382 - 45 - 48,699
Property and equipment 3,512 161 6,088 175 366 - 10,302
Intangible assets - - 865 27 2 - 894
Deferred acquisition costs - 39 - - - - 39
Reinsurer contracts - 331 - - - - 331
Investments and securities 129,899 2,481 3,695 468 14,031 (9,829) 140,745
Deferred tax assets - - - 3 - - 3
Current income tax assets 20 67 - 14 - - 101
Loans and advances - - 27,614 - - - 27,614
Other assets 875 734 6,266 419 8,740 (1) 17,033
Cash and cash equivalents 2,243 262 11,499 132 538 (2,216) 12,458
Total assets 182,765 4,131 58,409 1,238 23,722 (12,046) 258,219

Liabilities
Insurance contract liabilities 138,842 925 - - - - 139,767
Investment contract liabilities 11,048 - - - - - 11,048
Provisions 185 9 - 101 315 7 617
Deferred tax liabilities 624 52 359 26 164 (37) 1,188
Current income tax payables - - 2 - 8 - 10
Amounts due to group companies 531 64 12 1 9,389 - 9,997
Amounts owed to bank depositors - - 28,195 - - (3,414) 24,781
Credit lines - - 9,777 - - (47) 9,730
Other payables 717 211 2,907 351 2,249 (2,494) 3,941
Total liabilities 151,947 1,261 41,252 479 12,125 (5,985) 201,079

Net assets 30,818 2,870 17,157 759 11,597 (6,061) 57,140

Share capital and premium 1,917 1 2,593 337 - (4,848) -
Revaluation reserve - - 3,074 - - - 3,074
Share based payment reserve 619 133 370 405 3,862 (3,423) 1,966
Currency conversion reserve 242 - - - 431 (673) -
Retained earnings 28,040 2,736 11,120 17 7,304 1,727 50,944
Equity holders of the parent 30,818 2,870 17,157 759 11,597 (7,217) 55,984
Non-controlling interests - - - - - 1,156 1,156
Total equity 30,818 2,870 17,157 759 11,597 (6,061) 57,140


C2 Statement of
financial position

Assets
Property and equipment 2,463 145 5,451 146 418 (158) 8,465
Intangible assets - - 860 10 3 (1) 872
Deferred acquisition costs - 40 - - - 1 41
Deferred tax assets - - - 3 - - 3
Current income tax assets 64 31 - 3 - (2) 96
Loans and advances - - 11,411 - - (17) 11,394
Other assets 989 665 6,741 212 10,859 2 19,468
Cash and cash equivalents 2,651 432 8,826 27 225 (288) 11,873
Total assets 94,460 2,880 40,898 658 20,707 (7,022) 152,581

Liabilities
Provisions 164 55 373 76 79 (3) 744
Deferred tax liabilities 350 50 318 5 138 (32) 829
Amounts due to group companies 429 6 20 (2) 11,277 - 11,730
Amounts owed to bank depositors - - 21,332 - - (377) 20,955
Credit lines - - 5,108 - - (39) 5,069
Other payables 259 581 2,642 147 1,374 (1,190) 3,813

Net assets 12,408 1,360 11,104 432 7,836 (5,381) 27,759

Share capital and premium 1,918 - 2,549 571 - (5,038) -
Share based payment reserve 241 84 369 93 1,270 (91) 1,966
Currency conversion reserve 535 - (1,357) (2) 325 499 -
Retained earnings 9,714 1,276 7,068 (230) 6,241 (1,281) 22,788
Non-controlling interests - - - - - 530 530
Total equity 12,408 1,360 11,104 432 7,836 (5,381) 27,759
68
Annual Report 2021


Historical unaudited Assurance Insurance Lending Management & Other Adjustments Total
D1 Statement of
financial position

Assets
Property and equipment 3,374 81 5,114 37 90 - 8,696
Intangible assets - - 199 9 - - 208
Deferred tax assets - - 2 7 - - 9
Loans and advances - - 27,614 - - - 27,614
Other assets 820 734 3,982 411 8,740 (1) 14,686
Cash and cash equivalents 2,243 262 11,500 132 536 (2,215) 12,458
Total assets 182,572 4,022 54,488 1,078 19,003 (7,606) 253,557

Liabilities
Provisions 185 9 6 102 315 - 617
Deferred tax liabilities 624 20 353 - 88 (37) 1,048
Current income tax liabilities - - 2 - 8 - 10
Amounts due to Group companies 531 64 12 1 9,389 - 9,997
Amounts owed to bank depositors - - 28,195 - - (3,414) 24,781
Credit lines - - 9,777 - - (47) 9,730
Other payables 716 213 2,768 348 2,249 (2,460) 3,834

Net assets 30,626 2,855 13,375 627 6,954 (1,648) 52,789
Share capital and premium 30 - 87 63 - (180) -
Non-distributable reserve 30 2 1 - 21 (5) 49
Share based payment reserve 4 1 6 2 63 (21) 55
Currency conversion reserve 15 - - (2) 10 (23) -
Retained earnings 30,547 2,852 8,903 564 6,860 (2,595) 47,131
Non-controlling interests - - - - - 1,176 1,176
Total equity 30,626 2,855 13,375 627 6,954 (1,648) 52,789


Historical unaudited Assurance Insurance Lending Management & Other Adjustments Total
D2
Statement of
financial position

Assets
Property and equipment 1,464 32 2,708 42 53 (63) 4,236
Intangible assets - - 95 - - (1) 94
Investments and securities 33,434 723 3,448 160 3,000 (1,381) 39,384
Deferred tax assets - - 2 5 - - 7
Loans and advances - - 7,099 - - (11) 7,088
Other assets 615 391 2,890 117 6,756 1 10,770
Cash and cash equivalents 1,649 269 5,491 17 140 (180) 7,386
Total assets 58,698 1,660 23,019 343 9,973 (1,635) 92,058

Liabilities
Provisions 102 34 232 47 49 - 464
Deferred tax liabilities 218 14 192 - 21 (7) 438
Amounts due to Group companies 267 4 12 (1) 7,016 - 7,298
Amounts owed to bank depositors - - 13,271 - - (234) 13,037
Credit lines - - 3,178 - - (24) 3,154
Other payables 159 362 1,088 92 855 (784) 1,772
Total liabilities 51,046 820 17,974 138 7,942 (1,049) 76,871

Net assets 7,652 840 5,045 205 2,031 (586) 15,187
Share capital and premium 30 - 57 54 - (141) -
Non-distributable reserve 30 2 2 - 21 - 55
Share based payment reserve 4 1 6 2 63 (4) 72
Currency conversion reserve 16 2 (38) (3) 10 13 -
Retained earnings 7,572 835 2,660 152 1,937 (796) 12,360
Equity holders of the parent 7,652 840 5,045 205 2,031 (928) 14,845
Non-controlling interests - - - - - 342 342
Total equity 7,652 840 5,045 205 2,031 (586) 15,187
70
Annual Report 2021


audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
4 Gross earned premiums

Gross premiums
Single 26 19 22 3
Recurring 311 142 252 52
Individual business 337 161 274 55

Single 3,096 1,622 2,566 729
Recurring 5,448 3,039 4,364 1,272
Group business 8,544 4,661 6,930 2,001

General insurance 3,548 3,216 2,782 1,053
Total gross premiums 12,429 8,038 9,986 3,109

Comprising:
Insurance contracts 1,063 940 879 380
Investment contracts with discretionary
participating features 7,818 3,882 6,325 1,676
General insurance 3,548 3,216 2,782 1,053
Total gross earned premiums 12,429 8,038 9,986 3,109

5 Investment income (non-banking)

Dividend income
Financial assets at fair value
through profit or loss 2,298 1,608 1,893 869
Interest income
Cash and cash equivalents 387 125 255 52
Net rental income
Investment property 952 966 738 421
Realised gains and losses
through profit or loss 4,348 4,233 3,555 2,553
Unrealised gains and losses
Investment property 11,356 5,353 25,572 18,701
through profit or loss 54,342 13,339 94,369 27,063
65,698 18,692 119,941 45,764
Total investment returns included
in statement of profit or loss 73,683 25,624 126,382 49,659


audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
6 Banking interest and similar income
Interest and similar income

Investments 160 222 119 98
Loans and advances 6,295 2,783 5,090 1,108
Total interest and similar income 6,455 3,005 5,209 1,206
Comprising:
Financial assets at amortised cost 6,455 3,005 5,209 1,206

Interest Expense:
Credit lines (301) (538) (236) (213)
Money market deposits (81) (213) (68) (61)
Savings and term deposits (5) (9) (3) (3)
Total interest expense (387) (760) (307) (277)
Comprising:
Financial liabilities at amortised cost (387) (760) (307) (277)

Net interest income 6,068 2,245 4,902 929

7 Fee income, commissions and income
from service contracts

Banking operations:
Commissions 3,223 1,889 2,695 774
Service fees 2,024 1,283 1,591 582
Administration fees 2,246 1,246 1,646 498
Total fee income and commission
from banking operations 7,493 4,418 5,932 1,854
Long term insurance business 344 95 280 39
Asset management business 1,073 563 857 204
8,910 5,076 7,069 2,097

The fee and commission income presented includes income of ZWL7.5 billion (2020: ZWL4,4 billion) related to financial
assets and financial liabilities not measured at FVTPL. These figures exclude amounts incorporated in determining the
effective interest rate on such financial assets and financial liabilities.
Asset management fees include fees earned by the Group on trust and fiduciary activities in which the Group holds or
invests assets on behalf of its customers.

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
8. Other income

Exchange gains 3,551 3,051 3,575 1,915
Other 1,423 671 1,240 338
4,974 3,722 4,815 2,253
72
Annual Report 2021


audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
9 Claims and benefits

Claims and benefits (including change
in insurance contract provisions):
Increase in insurance contract provisions 45,988 16,799 89,113 36,844
Gross claims expenses
(refer to analysis in note 9.1 below) 6,747 4,296 5,477 1,756
Shadow accounting to revaluation reserve 783 208 1,508 953
53,518 21,303 96,098 39,553

9.1 Analysis of claims expenses
Individual business 270 100 222 38
Death and disability benefits 81 21 65 11
Maturity benefits 9 20 7 6
Surrenders 180 59 150 21

Group business 5,217 3,030 3,450 1,281
Death and disability benefits 910 237 764 113
Pension commutations, maturities and
withdrawal benefits 2,906 1,687 1,514 679
Annuities 1,038 554 862 213
Surrenders 363 552 310 276
General insurance 1,260 1,166 1,805 437
Total claims and benefits 6,747 4,296 5,477 1,756

Comprising:
Insurance contracts 991 258 829 124
Investment contracts with discretionary
participating features 4,496 2,872 2,843 1,195
General insurance 1,260 1,166 1,805 437
Total claims and benefits payable 6,747 4,296 5,477 1,756

10. Change in provision for investment
contract liabilities

Investment contracts
Increase in investment contract liabilities 6,289 991 7,582 2,516
Shadow accounting to revaluation reserve 59 16 114 72
6,348 1,007 7,696 2,588
10.1 Shadow accounting
Insurance contracts 783 208 1,508 953
Investment contracts 59 16 114 72
Total 842 224 1,622 1,025

Shadow accounting is an adjustment, permitted by IFRS 4 ‘Insurance contracts’, to allow for the impact of recognising
unrealised gains or losses on insurance assets and liabilities in a consistent manner to the recognition of the unrealised
gain or loss on property that have a direct effect on the measurement of the related insurance assets and liabilities.


audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
11 Other operating and administration expenses

Administrative expenses 1,910 346 1,888 132
Office space costs 422 385 372 158
Fees and levies 4 156 3 62
Directors fees 81 38 66 13
Insurance 260 76 205 29
Actuarial and consultancy fees 218 78 179 29
Advertising and marketing 337 179 270 69
Software licensing 319 462 268 191
Depreciation and amortisation 1,078 835 265 99
4,629 2,555 3,516 782
Auditors’ remuneration
Statutory audit services - current year 279 193 247 120

Staff costs
Wages and salaries 3,678 1,969 2,992 840
Retirement defined contribution obligations 142 74 115 28
Social security costs 15 16 12 7
Bonus and incentive remuneration 269 451 262 281
Share based payments - 23 - 14
Other staff costs 547 364 459 146
4,651 2,897 3,840 1,316
10,297 5,907 8,326 2,324
12 Income tax expense

Normal income tax - Current tax expense
Shareholders 330 169 309 101
Policyholders 68 205 58 108
398 374 367 209
Deferred tax
Deferred tax expense/(income)
relating to the origination and reversal
of temporary difference 327 (1,391) 502 171

Shareholders 232 (110) 681 153
Policyholders 95 (1,281) (179) 18
327 (1,391) 502 171
Total income tax expense 725 (1,017) 869 380

Reconciliation of the effective tax rate % % % %
Standard rate of taxation 24.7 24.7 24.7 24.7
Adjusted for:
(23) (36) (23) (22)
Exempt income: interest income, dividends (9) (8) (9) (6)
Income taxed at other than tax rate (18) (37) (18) (19)
Income tax attributable to policyholder returns 1 (1) 1 (1)
Disallowable expenses: entertainment expenses,
management fees, unrealised losses 3 10 3 4

Effective tax rate % 2 (11) 2 3
74
Annual Report 2021

The overall effective tax rate for the Group is influenced by:
- OMLAC is taxed favourably in terms of a special formula as per the 8th schedule. Total expenses are disallowed and
only realised gains are taxed.
- CABS is exempt from income tax in terms of the 3rd schedule of the Income tax act. The expenses are also disallowed
as they are incurred to earn exempt income.
- OMZIL income is mainly fair value gains which are exempt from current tax and give rise to a deferred tax liability
only at 1.5%. Most of the expenses are disallowed because they are incurred to earn exempt income.

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
Tax on other comprehensive income
Property revaluation 30 105 106 43

13 Earnings and dividends per share

The calculation of basic earnings per share was based on the profit attributable to ordinary equity holders of the parent
divided by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average
number of ordinary shares adjusted for the effects of all potentially dilutive ordinary shares. The Group had no potentially
dilutive ordinary shares.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

audited unaudited
2021 2020 2021 2020
13.1 Basic and diluted (cents)

Earnings 8,480 3,096 10,472 3,269
Basic and diluted earnings attributable
to equity holders of the parent (ZWLm) 28,156 10,282 34,771 10,856

Number of shares used in
calculations (weighted)
Number of shares 332,046,874 332,046,874 332,046,874 332,046,874


audited unaudited
2021 2020 2021 2020
14 Investment income ZWLm ZWLm ZWLm ZWLm
Dividend income
Financial assets at fair value through profit or loss 105 70 86 38
Investments in subsidiaries 683 189 550 107
Interest income

Realised gains and losses
Financial assets at fair value through profit or loss 1,024 835 960 356
Unrealised gains and losses
Financial assets at fair value through profit or loss 4,034 484 4,023 567
Investment property 6 19 21 34
4,040 503 4,044 601
Total investment income included

in income statement 5,888 1,610 5,670 1,106

15 Other income

Management fee income 579 369 467 162
Foreign exchange gains 71 671 71 417
Other 7 4 6 1
657 1,044 544 580

16 Other operating and administration expenses

Administrative expenses 324 267 265 105
Directors fees 18 22 14 8
Asset management expenses 37 18 30 10
Impairment loss 442 370 442 139
Depreciation of property and equipment 108 64 23 7
929 741 774 269

Auditors’ remuneration

Statutory audit services - current year 53 33 53 20

Staff costs
Wages and salaries 202 127 162 53
Retirement obligations 10 4 9 2
Bonus and incentive remuneration 251 43 251 27
Social security costs 1 - 1 -
505 222 459 97
Total other operating and
administration expenses 1,487 996 1,286 386

76
Annual Report 2021


audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
17 Income tax expense

Normal income tax
Deferred tax 3 90 35 8
Current income tax 191 106 191 66
Total taxation charge 194 196 226 74

Reconciliation of taxation rate on profit before tax
% % % %
Standard rate of taxation 24.7 24.7 24.7 24.7
Adjusted for: (20) 24 (20) (19)
Exempt income: interest income, dividends,
unrealised gains (24) (56) (24) (27)
Disallowable expenses: entertainment expenses,
management fees, unrealised losses 4 80 4 8
Effective tax rate 5 49 5 6

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
18
Investment property

Carrying amount at beginning of year 36,715 31,887 22,841 4,422
Additions 390 71 302 37
Disposal (21) (662) (16) (324)
Improvements to existing properties 259 66 256 5
Gains from fair value adjustments 11,356 5,353 25,316 18,701
Carrying amount at end of year 48,699 36,715 48,699 22,841

Comprising:
Leasehold property 730 405 730 252
Freehold property 47,969 36,310 47,969 22,589
48,699 36,715 48,699 22,841
The fair value of freehold property leased to
third parties under operating leases 38,472 28,272 38,472 17,589
Rental income from investment property 2,531 1,882 2,018 824
Direct operating expenses arising from
rented-out investment property (1,579) (916) (1,280) (403)
952 966 738 421
The carrying amount of property is the fair value of property as determined annually, supported by internal professional
valuers, having an appropriate recognised professional qualification and recent experience in the location and category
of the property being valued. The recorded values are tested by comparing internal values with values determined
by three independent external valuers for a sample of properties accounting for at least 65% of the total value of the
property portfolio, or for at least the top twenty five buildings by value.
Key assumptions and considerations applied in the valuation process include:

• The underlying valuation has been prepared in ZWL, on account of a reducing rate of inflation and increased market
evidence of transactions in ZWL.
• 90% of rentals were invoiced in ZWL.
• ZWL rentals have a lower default risk as compared to USD rentals.
• Softer capitalisation rates were applied relative to previous USD valuations because of the valuation currency.
The Group changed the application of its valuation technique through:

• Reverting to the Direct Capitalisation Method (DCM) for income earning properties from the two stage Discounted
Cash Flow Method.
• Replacing the USD as the valuation currency with the ZWL.

The changes in the application of the valuation technique were brought about by:
• The year on year inflation for the ZWL having fallen to 60.7% in December 2021 from a high of 837.5% in July 2020
and 348.6% in December 2020.
• There has been an increase in observable market data in the form of valuation inputs that are now being obtained
in the functional currency, although overall market transactions are still low.
• Rental collection rates and void rates in the property portfolio have held steady compared to last year despite the
inflationary environment which has required upward adjustment of ZWL rentals.
• A USD valuation would require translation at the official exchange rate, while at the same time rental yields in ZWL
have been driven by factors that are not just limited to exchange rate movements.
• Going forward, historical USD capitalisation rates may be unreliable for valuations due to limited evidence of USD
transactions outside the residential market, which is a market where we have limited exposure. Most institutional
investors transact in ZWL with rent mostly accruing in ZWL.
• Most available USD data is from over 5 years ago when underlying economic conditions and currency factors were
very different from what prevails today.
Capitalisation rates were derived from the observed transactions and adjusted using building specific factors as well as
subject property performance.
The Group’s current lease arrangements, which are entered into on an arm’s length basis, and which are comparable to
those for similar properties in the same location, are considered. Rentals are reviewed regularly in response to inflation.
Key Valuation inputs

The table below sets out information about inputs used at year end in measuring investment properties categorised
under level 3 of the IFRS 13 fair value hierarchy. Level 3 is when unobservable inputs are used to measure fair value to
the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any,
market activity for the asset or liability at the measurement date.
Type of property Value Key unobservable inputs Inter-relationship between unobservable inputs and
ZWLm key fair value measurement
Office, Retail and Industrial 38,636 Office The estimated fair value would increase/(decrease) if:
Properties -Capitalisation rates: 4.5% to 7.5% > net rental income increased/(decreased)
Valuation approach: Income -Market rentals per m2: ZWL396 to ZWL799 > capitalisation rates were lower/(higher).
capitalisation -Vacancy rates: 13% to 73% > vacancies decreased/(increased)
Retail • The estimated fair value would decrease if the
-Capitalisation rates: 4.00% to 8.00% unobservable inputs changed the other way.
-Market rentals per m2: ZWL100 to ZWL1000
-Vacancy rates: 0% to 6.74%
Industrial
-Capitalisation rates: 6.50% to 8.00%
-Market rentals per m2: ZWL60 to ZWL468
-Vacancy rates: 0% to 4.74%
Residential • The estimated fair value would increase/(decrease)

Valuation approach: if prices for comparable properties increased/
Direct comparison/Market (decreased).
approach 35 Residential rent from ZWL22,000 to ZWL216,000
Land • The estimated fair value would increase/(decrease)

Valuation approach: if prices for comparable properties increased/
Direct comparison/Market (decreased).
approach 10,028 Land value per m2: ZWL4,500
2021 2020
ZWLm ZWLm
Fair Value Fair Value
Sensitivity analysis - valuation inputs movement movement
A 1% increase in capitalisation rates would decrease the fair value by: 9,315 6,068
A 1% decrease in capitalisation rates would increase the fair value by: (7,188) (4,747)
A 10% increase in market rentals per m2 would increase the fair value by: 4,352 2,858
A 10% decrease in market rentals per m2 would decrease the fair value by: (4,634) (3,039)
A 10% increase in average land values for land holdings per m2
would increase the fair value by: 737 555
A 10% decrease in average land values for land holdings per m2
would decrease the fair value by: (737) (555)
Landholdings constitute 20% of overall property value.
78
Annual Report 2021

19 Group property and equipment

Land & Motor Computer Fixtures Right of Total
19.1 Inflation Adjusted audited buildings vehicles equipment & fittings use asset 2021
ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm

Carrying amount at beginning

of year (1 January 2021) 6,331 484 1,300 300 50 8,465
Additions 137 482 356 359 202 1,536
Revaluation 1,309 - - - - 1,309
IFRS 16 adjustments - - - - 76 76
Disposals - - (21) - (61) (82)
Depreciation (87) (230) (585) (66) (34) (1,002)
Carrying amount at end of year 7,690 736 1,050 593 233 10,302

Cost/Valuation 7,690 1,393 3,161 1,138 315 13,697
Accumulated depreciation - (657) (2,111) (545) (82) (3,395)
Carrying amount at end
of year (31 December 2021) 7,690 736 1,050 593 233 10,302

of year (1 January 2020) 5,537 459 1,438 126 43 7,603
Additions 295 135 322 234 7 993
Revaluation surplus 573 - - - - 573
IFRS 16 restatement - - - - 41 41
Disposals - (8) (6) (2) - (16)
Depreciation (74) (102) (454) (58) (41) (729)
Carrying amount at end of year 6,331 484 1,300 300 50 8,465

Cost/Valuation 6,331 911 3,423 379 123 11,167
Accumulated depreciation - (427) (2,123) (79) (73) (2,702)
Carrying amount at end of year
(31 December 2020) 6,331 484 1,300 300 50 8,465

19.2 Historical cost unaudited

of year (1 January 2021) 3,925 82 159 47 23 4,236
Additions 83 453 326 133 107 1,102
Revaluation 3,746 - - - - 3,746
IFRS 16 adjustments - - - - 51 51
Disposals - (57) (21) (61) (48) (187)
Depreciation (64) (54) (85) (12) (37) (252)
Carrying amount at end of year 7,690 424 379 107 96 8,696

Cost/Valuation 7,690 492 494 152 132 8,960
Accumulated depreciation - (68) (115) (45) (36) (264)
Carrying amount at end
of year (31 December 2021) 7,690 424 379 107 96 8,696

of year (1 January 2020) 768 17 55 4 4 848
Additions 135 77 130 51 2 395
Revaluation surplus 3,048 - - - - 3,048
IFRS 16 Adjustments - - - - 28 28
Disposals - (2) (2) (1) - (5)
Depreciation (26) (10) (24) (7) (11) (78)
Carrying amount at end of year 3,925 82 159 47 23 4,236

Cost/Valuation 3,925 95 211 55 35 4,321
Accumulated depreciation - (13) (52) (8) (12) (85)
Carrying amount at end of year
(31 December 2020) 3,925 82 159 47 23 4,236

The carrying amount of owner-occupied property is the fair value of property as determined annually by internal
professional valuers, having an appropriate recognised professional qualification and recent experience in the location
and category of the property being valued. Fair values are determined by having regard to recent market transactions
for similar properties in the same location as the Group’s owner-occupied property every three months (see note 18).
The valuation techniques and significant unobservable inputs used in measuring the fair values of owner-occupied
properties are consistent with those applied to investment properties at the reporting date.
If the revalued land and buildings had been measured under the cost model the carrying amount in the current year
would have been ZWL59 million (2020 ZWL60 million).

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
20
Intangible assets

Carrying amount at beginning of year 872 468 94 9
Additions 162 510 132 106
Amortisation (76) (106) (13) (21)
Reclassification (64) - (5) -
Carrying amount at end of year 894 872 208 94

Cost/Valuation 2,219 2,121 242 115
Accumulated amortisation (1,325) (1,249) (34) (21)

Intangible assets comprise of right of use of software licences.

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
21 Reinsurer contracts

Provision for unearned premiums 186 223 162 94
Outstanding claims 145 126 145 78
Balance at end of year 331 349 307 172

21.1 Provision for unearned premiums:
Opening balance 223 353 94 20
Movement in unearned premiums reserve (37) (130) 68 74
Closing balance 186 223 162 94

21.2 Outstanding claims
Balance at the beginning of the year 126 254 78 35
Claims incurred and changes in previous estimates 49 735 82 398
Claims paid (30) (863) (15) (355)
Balance at the end of the year 145 126 145 78
80
Annual Report 2021


audited unaudited
2021 2020 2021 2020
22. Investments and securities ZWLm ZWLm ZWLm ZWLm
22.1 Analysis of investments

Equity securities - listed 117,853 48,054 117,853 29,896
-unlisted 15,771 8,245 15,771 5,129
Total equities (see note 22.3 below) 133,624 56,299 133,624 35,025
Unit trust investments 1,611 11 1,611 7
Treasury bills 3,845 3,539 3,845 2,202
Deposits and money market securities 1,665 3,456 1,665 2,150
140,745 63,305 140,745 39,384

22.2 Impairment on treasury bills, deposits and
money market securities
Loss allowance on 1 January (166) (50) (103) (7)
New investment securities- purchased (24) (247) (24) (102)
Investment securities that have matured 103 15 103 6
Inflation adjustment 63 116 - -
Balance as at 31 December (24) (166) (24) (103)
There were no investment and securities subject to Lifetime ECL.

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm

22.3 Spread of equity securities by sector
Commodities 14,150 14,499 14,150 9,020
Communications 13,001 2,520 13,001 1,568
Consumer 60,368 15,064 60,368 9,372
Financial 27,183 16,126 27,183 10,032
Property 2,063 753 2,063 469
Manufacturing 16,595 4,816 16,595 2,996
Mining 264 2,521 264 1,568
133,624 56,299 133,624 35,025

22.4 Movements of investment and securities
Opening balance 63,305 44,178 39,384 6,127
Fair value movements through profit or loss 68,323 17,697 93,552 29,669
Additions 14,862 11,700 11,593 5,125
Disposals (2,924) (3,222) (1,445) (445)
Maturities (2,821) (7,048) (2,339) (1,092)
Closing balances 140,745 63,305 140,745 39,384

22 Investments and securities (cont’d)
22.5 Investment in unlisted equities above 20% shareholding

2021 2020 2020
Inflation adjusted Inflation Historical
adjusted Cost
Investee % holding Value ZWLm ZWLm ZWLm

Takura Fund II (Limited Partner) “B Shares”
(held by Shareholders and OMLAC Main Fund) 39% 3,992 2,851 1,774
Africa Takura Ventures-Fund 1 “M Shares”
(held by Shareholders and OMLAC Main Fund) 26% - - -
Lake Harvest Aquaculture
(held by Shareholders and OMLAC Main Fund) 26% 16 6 4
Lobels Holdings Limited
(held by OMLAC Main Fund) 49% 2,398 1,545 962
Kupinga Renewable Energy
(held by OMLAC Main Fund) 40% 196 239 149
Closefin (held by OMLAC Main Fund) 21% 1,536 279 174
Plaza Bakery (held by OMLAC Main Fund) 49% 7 10 6
Zimcampus preference shares
Solgas ordinary shares (held by OMLAC Main Fund) 49% 5 7 5
Richaw Solar Tech ordinary shares
Harava Solar Park (held by OMLAC Main Fund) 27% 71 4 3
Takura Fund III (Limited Partner) “D Shares”
(held by Shareholders and OMLAC Main Fund) 74% 3,494 692 431
Tenpill (held by Shareholders and OMLAC Main Fund) 46% 2,066 971 604
Southern Property (Private) Limited
(held by OMLAC Main Fund) 20% 75 - -
Nedbank Zimbabwe Limited (held by Shareholders) 23% 418 95 59
Manica Boards and Doors (MBD)
15,550 7,424 4,622
All valuations were prepared in ZWL, which is the underlying functional currency for the investee companies. The Group
has accounted for unlisted investments of this nature on the basis of IFRS 9, as Financial Assets at Fair Value through
Profit or Loss, notwithstanding the percentage holding in each entity. The above investments which originate from
the investments of policyholder funds, with the exception of the investment in Nedbank Zimbabwe, are invested into
investment linked insurance funds and funds which operate like unit trusts which are managed on a fair value basis.
These funds back investment contracts with discretionary participating features and investment contracts.
Nedbank Zimbabwe has not been equity accounted, but has been fair valued as per IFRS 9. The Group is not
represented on the Nedbank Zimbabwe Board, does not have significant transactions with Nedbank Zimbabwe and as
such, the Directors do not believe that OMZIL is in a position to exercise significant influence over Nedbank Zimbabwe,
notwithstanding the size of the shareholding.
The Group has significant influence in MBD due to its shareholding and representation on the Board, however, the
Group applied the consolidation exemption per IAS 28 and measured the investment at fair value as the asset backs
investment-linked insurance contracts.

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
22.6 Treasury bills maturity analysis
On demand to 3 months 3,621 1,994 3,621 1,241
3 months to 12 months 224 1,531 224 952
1 year to 5 years - 14 - 9
Total 3,845 3,539 3,845 2,202

82
Annual Report 2021

Actual reported +/- 20% stock +/- 50% stock +/- 75% stock
22.7 Sensitivity analysis - Listed Equities 31 Dec 2021 movement movement movement
Equities - after increase 117,853 141,424 176,780 206,243

Equities - after decrease 117,853 94,282 58,926 29,463
Increase or decrease in fair value movement - 23,571 58,927 88,390
Impact on profit and NAV - 5,539 13,848 20,772

The Group has significant holdings in equities; consequently, movements in the market index will have a significant
impact on reported profits for the year.

23 Amounts due from or (to) group companies
Group 2021 2021 2021 2020 2020 2020

Amounts Amounts Net Amounts Amounts Net
due by due (to) Balance due by due (to) balance
Inflation adjusted audited

Old Mutual Limited (South Africa) - (9,997) (9,997) - (11,730) (11,730)
and its subsidiaries outside Zimbabwe
Historical cost unaudited

Old Mutual Limited (South Africa) - (9,997) (9,997) - (7,298) (7,298)
and its subsidiaries outside Zimbabwe

The amounts due from or to Group companies above are unsecured and are payable on demand.


audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
24 Loans and advances

Concentration - gross loans and advances
Housing 1,525 689 1,525 429
Unsecured personal loans 3,843 1,011 3,843 628
Commercial and industrial 23,741 10,589 23,741 6,588
Gross loans and advances 29,109 12,289 29,109 7,645
Less provision for impairment (1,495) (895) (1,495) (557)
Net loans and advances 27,614 11,394 27,614 7,088

Maturity analysis - gross and loans advances
3 months to 12 months 8,086 3,409 8,086 2,121
1 year to 5 years 16,904 6,675 16,904 4,153
Over 5 years 223 138 223 86
29,109 12,289 29,109 7,645
Non performing loans 65 51 65 32
Analysis of past due but not impaired
30 to 60 days past due 4 196 4 122
61 to 90 days past due 200 1,247 200 776
204 1,443 204 898
24.1
Sectoral analysis of loans and advances
The business monitors concentrations of credit risk on loans and advances by sector. An analysis of concentrations of
credit risk from loans and advances at the balance sheet date is shown below:

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
Sector
Agriculture 9,377 6,112 9,377 3,802
Construction, transport and communication 370 233 370 145
Distribution 6,246 1,347 6,246 838
Financial service 15 14 15 9
Manufacturing and mining 6,349 2,595 6,349 1,615
Mortgages 1,816 727 1,816 452
Private/individuals 4,120 1,142 4,120 710
Services 816 119 816 74
Total gross loans 29,109 12,289 29,109 7,645
84
Annual Report 2021

24 Loans and advances (cont’d)
24.2 Impairment and credit quality analysis

2021 Inflation adjusted audited
Subject to lifetime ECL
Subject to 12 month ECL Not credit impaired Credit impaired (excluding Total
purchased/originated)
Gross carrying Allowance for Gross carrying Allowance Gross carrying Allowance Gross carrying Allowance
amount ECL amount for ECL amount for ECL amount for ECL
ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm
As at 1 January 2021 10,120 (681) 1,905 (183) 264 (31) 12,289 (895)
21,683 (860) (121) (64) (98) (14) 21,464 (938)
Originations, purchases
and interest accruals 21,226 (1,404) 224 88 14 - 21,464 (1,316)
Repayments & other

derecognitions, excl
write-offs 547 105 (479) (107) (68) 2 - -
Transfer to 12 month
ECL (72) 45 138 (45) (66) - - -
Transfer to lifetime ECL

(not credit impaired) (18) 16 (4) - 22 (16) - -

(credit impaired) - 378 - - - - - 378
Inflation adjustment (3,824) 257 (719) 68 (101) 13 (4,644) 338
As at 31 Dec 2021 27,979 (1,284) 1,065 (179) 65 (32) 29,109 (1,495)
2020 Inflation adjusted audited

Gross carrying Allowance Gross carrying Allowance Gross carrying Allowance Gross carrying Allowance
amount for ECL amount for ECL amount for ECL amount for ECL
As at 1 January 2020 10,209 (193) 572 (12) 377 (214) 11,158 (419)
16,010 (1,268) 3,616 (360) 417 11 20,043 (1,617)
and interest accruals 19,617 (1,369) - - - - 19,617 (1,369)
Repayments & other

write-offs (831) 41 1,307 1 (50) 24 426 66
ECL 58 (5) (49) 3 (9) 2 - -

(not credit impaired) (2,371) 358 2,371 (358) - - - -

(credit impaired) (463) 19 (13) 7 476 (26) - -
Changes to model & risk

parameters used for ECL
calculation - (312) - (13) - 11 - (314)
Inflation adjustment (16,099) 780 (2,283) 189 (530) 172 (18,912) 1,141
As at 31 Dec 2020 10,120 (681) 1,905 (183) 264 (31) 12,289 (895)

24 Loans and advances (cont’d)
24.2 Impairment and credit quality analysis (cont’d)

2021 Historical cost unaudited
Gross carrying Allowance for Gross carrying Allowance Gross carrying Allowance Gross carrying Allowance
amount ECL amount for ECL amount for ECL amount for ECL
As at 1 January 2021 6,296 (424) 1,186 (115) 163 (18) 7,645 (557)
21,683 (860) (121) (64) (98) (14) 21,464 (938)
and interest accruals 21,226 (1,404) 224 88 14 - 21,464 (1,316)
Repayments & other

write-offs 547 105 (479) (107) (68) 2 - -
ECL (72) 45 138 (45) (66) - - -

(not credit impaired) (18) 16 (4) - 22 (16) - -
Changes to model &

risk parameters used
for ECL calculation - 378 - - - - - 378
As at 31 Dec 2021 27,979 (1,284) 1,065 (179) 65 (32) 29,109 (1,495)
2020 Historical cost unaudited

Gross carry- Allowance Gross carrying Allowance Gross carrying Allowance Gross carrying Allowance
ing amount for ECL amount for ECL amount for ECL amount for ECL
As at 1 January 2020 1,433 (42) 79 (2) 36 (15) 1,548 (59)
4,863 (382) 1,107 (113) 127 (3) 6,097 (498)
and interest accruals 5,968 (412) - - - - 5,968 (412)
Repayments & other

write-offs (260) 12 398 - (15) 7 123 19
ECL 18 (1) (15) (4) (3) 1 - (4)

(not credit impaired) (722) 109 728 (109) - - 6 -

(credit impaired) (141) 5 (4) 2 145 (6) - 1
Changes to model &

risk parameters used for
ECL calculation - (95) - (2) - (5) - (102)
As at 31 Dec 2020 6,296 (424) 1,186 (115) 163 (18) 7,645 (557)

86
Annual Report 2021


audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
25 Other assets
Accrued investment income 420 796 420 495

Agent debtors and prepayments 978 2,267 978 883
Inventory - capitalised project costs
(see note 25.1 below) 1,060 1,049 36 22
RBZ legacy debt statutory receivable
(see note 25.2 below) 9,812 13,088 9,812 8,142
Trade debtors 1,876 257 1,876 160
Banking settlement and other receivables 2,887 2,011 1,564 1,068
17,033 19,468 14,686 10,770

25.1 Inventory - Capitalised project costs
Opening balance 1,048 1,157 22 62
Additions 27 41 17 10
Cost of sales (15) (82) (3) (8)
Transfer to investment property - (68) - (42)
1,060 1,048 36 22

25.2 RBZ legacy debt statutory receivable
Principal amount 96 164 96 101
Fair value gain 9,716 12,924 9,716 8,041
Gross amount receivable 9,812 13,088 9,812 8,142

On the 24th of June 2019, the Government issued Statutory Instrument 142 (SI 142) which was followed up by the
Reserve Bank of Zimbabwe (“RBZ”)’s Exchange Control Directive RU/102 of 2019 which directed authorised dealers to
transfer to the RBZ, Zimbabwe Dollar balances at an exchange rate of ZWL1:USD1 in relation to foreign currency legacy
debts to be registered with the RBZ.
Legacy Debts registration process 2021 2020

Approved Approved
USD USD
External lines of credit 26 26

Amounts owing to related parties 84 84
Amounts owing to 3rd parties 1 -
Amounts settled (15) (9)
96 101
The Group made applications relating to amounts incurred in USD between 2012 and 2018, when the functional
currency was USD and prior to promulgation of SI 33 of February 2019, to providers of offshore lines of credit as well as
related parties within the wider Old Mutual Limited Group and other service providers.
Registration of the associated amounts under the RBZ blocked funds arrangement was completed with the transfer in
2019 and 2020 of amounts of ZWL111m to the RBZ at an exchange rate of USD1:ZWL1. CABS and OMZIL recognised
a foreign currency denominated financial instrument in the 2020 financial results in respect of the funds transferred to
the RBZ as a legitimate expectation to receive foreign currency had been created, with exchange gains and losses as
well as credit losses being recognised in the statement of profit or loss. For 2021 an asset also was recognised on the
Group’s statement of financial position for the statutory receivable. This asset has been fair valued on the assumption
that a right to acquire an amount equivalent to the debt registered at a future date now exists. The carrying value of the
asset reflects management’s assessment of the present value of the expected recoverable net cash flows to be received
under this arrangement.
The RBZ has stated its intention to honour its commitment and has facilitated liquidity to support obligations that
CABS has settled to the tune of USD15m since the debts were registered. We believe this supports the accounting
treatment adopted in recognising as an asset both for 2021 and 2020.
In 2022 Parliament passed the Finance Bill H.B 16 2022. The bill provides for the Government to take responsibility
for discharging the outstanding registered blocked funds on the RBZ’s balance sheet. The terms of discharge of the
blocked funds, and nature of any debt instrument to be issued, will be determined by the Minister of Finance and
Economic Development.


audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
26 Cash and cash equivalents
Cash at bank and on hand 12,458 11,873 12,458 7,386
The Group tested for impairment on cash and cash equivalents, considering forward looking information and credit risk
of counterparties, and concluded that the risk was low and impairment was not material.

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
27 Insurance contract liabilities
Outstanding claims 90 67 90 42
Future policyholders’ benefits
(see analysis of movement in provision below) 139,677 76,347 139,613 47,389
139,767 76,414 139,703 47,431

27.1 Future policyholders’ benefits
Movement in provision for insurance contracts
Balance at beginning of year 76,347 60,883 47,389 8,296
Inflows
Premium income 11,298 6,574 8,865 2,525
Investment income 60,967 14,640 90,471 39,726
Fee and other income 1,719 544 1,666 67
Outflows
Claims and policy benefits (6,193) (3,836) (5,052) (1,592)
Operating expenses (3,066) (3,006) (2,377) (1,176)
Taxation
Current tax (47) (205) (58) (108)
Deferred tax (21) 1,283 (32) (19)
Transfer to operating profit (1,327) (530) (1,259) (330)
Balance at end of year 139,677 76,347 139,613 47,389

27.2 Outstanding claims
Balance at beginning of year 67 51 42 7
New Claims 1,215 3,607 942 1,312
Payments (1,192) (3,591) (894) (1,277)
Balance at end of year 90 67 90 42
28 Investment contract liabilities

Liabilities at fair value through profit or loss 11,048 5,264 11,048 3,275

Movement in liabilities fair valued
through profit or loss
Balance at beginning of year 5,264 4,263 3,275 591
New contributions received 34 62 25 39
Withdrawals (80) (21) (62) (13)
Fair value movements 5,830 960 7,810 2,658
Balance at end of year 11,048 5,264 11,048 3,275
88
Annual Report 2021

29 Share-based payments

29.1 Indigenisation Transactions
In 2012 the Group entered into an Indigenisation transaction under the Indigenisation & Economic Empowerment
Act of 2008 (Chapter 14:33). OMZIL donated USD60 million to qualifying indigenous groups through trusts to acquire
OMZIL shares from the main shareholder Old Mutual Netherlands B.V. The shares were transferred to the various trusts
on 1 June 2012. The grants represent a share-based payment transaction as defined in IFRS 2, Share-based payments
transactions.

OMZIL may be called upon from time to time, to provide such funds as may be required by the Trustees of the various
trusts in their capacities as such, to defray the costs and expenses arising out of and in connection with the administration
of the trusts.

OMZIL Indigenisation Employee Share Scheme
This scheme operates for the benefit of all employees of the Group who met the qualification criteria set by management.
On 1 June 2012, an allocation was made by means of a once-off share award to the participants. The award is not
subject to any performance targets but employees are required to be in the service of Old Mutual during the vesting
period.
Participants took delivery of the shares after the vesting periods of two years (one-third), three years (one-third) and
four years (one-third) of participation in the scheme. The related expenses were recognised over the respective vesting
periods. All shares that were issued under this trust vested in 2016 and there are currently no shares outstanding to staff.

OMZIL Management Incentive Share Scheme
This scheme operates for the benefit of management and its primary purpose is to attract, reward, and retain senior
and middle management. Awards will be made annually on agreed terms and conditions with a vesting period of three
years. Participants receive dividends from the date of the award. Staff joining the Group after the allocation date also
participate in the scheme. There are currently no shares outstanding to staff.

OMZIL Clients Pension Ex-gratia Trust
This scheme operates for the benefit of client pensioners. Once off share awards were allocated to participants. These
vested immediately and were not subject to any conditions.

Youth Fund Trust
This scheme operates for the benefit of the youth population of Zimbabwe. It is administered in collaboration with the
Ministry of Youth, Sport, Arts and Recreation through the Zimbabwe Youth Council. The shares act as collateral to loans
accessed from CABS by young people as defined. These share awards vested immediately and were not subject to any
conditions.

Strategic Partner
The Strategic partner is Stiefel Investments (Private) Limited (Stiefel), an investment holding company and provider of
advisory services. The beneficiary persons behind Stiefel are Messrs L.E.M. Ngwerume and Todd Moyo, and Mrs Tracey
Mutaviri. Mr Ngwerume is a former Group Chief Executive Officer of OMZIL while Mrs Mutaviri is a non-executive director
of CABS. The purchase consideration of the shares was ZWL13 016 238 for 11 621 641 issued and fully paid up ‘B class’
shares at a price of ZWL1.12 per share. The amount funded (finance assisted) by the Group was ZWL12 755 913 after a
2% down payment of ZWL260 324 paid by Steifel.
29.2 Share-based payments reserve

The equity share-based payment reserve is maintained in the Group from the date of issue of the share awards.
On exercise of the share awards, settlement will be made through the structured entities controlled by Old Mutual
Zimbabwe Limited which are listed above in Note 29.1.
29.3 Cash-settled share-based employee compensation plans

Broad Based Employee Share Plan (BBESP)
In 2018, the Group granted share awards to all eligible employees as part of the primary listing of Old Mutual Limited
on the Johannesburg Stock Exchange (JSE). All permanent employees of the Group on the date of listing of Old Mutual
Limited were eligible to participate, provided that they were still permanently employed by the Group on the grant date
of 18 September 2018.
All participants received a fixed Rand value offer of R10 000 converted into the local currency after reducing the award
by the amount needed to cover the tax liability on the award for each employee in compliance with tax legislation
which states that share awards are taxable on grant. The actual number of shares granted to each employee was
calculated on the grant date using the price of the Old Mutual Limited share on the JSE.

29 Share-based payments (cont’d)
29.3 Cash-settled share-based employee compensation plans (cont’d)

Broad Based Employee Share Plan (BBESP) (cont’d)
The BBESP award was to be restricted for a period of two years from the grant date. Participants were entitled to receive
dividends in respect of the share awards during the restricted period. At the end of the restricted period, the value of
the vested share awards would be paid in cash to the participants. The BBESP awards were not subject to performance
conditions, however, the Award was subject to the condition that participants remained employed by the Group during
the restricted period.
Group Group
2021 2020
ZWLm ZWLm
The balance of the liability at the end of reporting period was as below:
Broad Based Employee Share Plan - -
- -

The fair value of services received in return for the BBESP was measured by reference to the fair value of share
entitlements granted over the service period. The fair value was measured using the closing price of the Old Mutual
Limited share on the JSE at each reporting date. The cash-settled share based payment liability was maintained in the
Group and remeasured at each reporting date during the period up to exercise of the share options, with changes in
fair value recorded in profit or loss.

Movements relating to share entitlements and awards during the year are as follows:

2021 2020
No of shares No of shares
Deferred delivery entitlements
Outstanding, at beginning of year - 398,647
Vested during the year - (389,957)
Forfeited during the year - (8,690)
Outstanding, at end of year - -
All the outstanding shares vested in September 2020 at the completion of the restricted period and the participants
were settled in cash the value of the shares on the vesting date, per the vesting conditions. The share price of the Old
Mutual Limited share on the JSE was applied to the total shares held by each participant. The share scheme was wound
up upon settlement of the outstanding obligations.
90
Annual Report 2021

30 Provisions
Employee
related
provisions Other Total
Group ZWLm ZWLm ZWLm
Inflation adjusted audited
2021
Balance at beginning of year 491 253 744
Amount utilised (289) (253) (542)
Charge 204 211 415
Balance at end of year 406 211 617

2020
Amount utilised (723) (404) (1,127)
Charge 892 605 1,497

2021
Charge 127 211 338
2020
Charge 426 184 610

Income
At Charge to statement
beginning equity charge At end
31 Deferred tax - Inflation adjusted - audited ZWLm ZWLm ZWLm ZWLm
Group
2021
Deferred tax liability
Shareholders 860 32 232 1,124
Policyholders (31) - 95 64
829 32 327 1,188
Deferred tax asset
Shareholders (3) - - (3)
(3) - - (3)
Aggregate deferred tax 826 32 327 1,185

Analysis of deferred tax Wear and tear 441
Capital gains 733
Assessed loss 11
1,185
2020
Shareholders 905 105 (150) 860
Policyholders 1,250 - (1,281) (31)
2,155 105 (1,431) 829
Deferred tax asset
Shareholders (46) - 43 (3)

Aggregate deferred tax 2,109 105 (1,388) 826
Capital gains 381
Assessed loss 2
826
Historical cost
2021
Shareholders 195 106 683 984
Policyholders 243 - (179) 64
438 106 504 1,048
Deferred tax asset
Shareholders (7) - (2) (9)
(7) - (2) (9)
Aggregate deferred tax 431 106 502 1,039
Capital gains 658
Assessed loss 10
1,039
2020
Shareholders 85 (43) 153 195
Policyholders 224 - 19 243
309 (43) 172 438
Deferred tax asset
Shareholders (7) - - (7)

Aggregate deferred tax 302 (43) 172 431
Capital gains 204
Assessed loss 4
431
92
Annual Report 2021

32 Amounts owed to bank depositors

In the Group’s banking business, the Group receives cash from bank depositors. The depositors receive interest on the
amounts owed depending on the value of the amount borrowed and the terms of the deposit.

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
Money market deposits 1,218 348 1,218 216

Savings deposits 23,563 20,607 23,563 12,821
24,781 20,955 24,781 13,037
Maturity analysis
3 months to a year 576 12 576 8
1 year to 5 year 609 68 609 42
Over 5 years 33 110 33 68
24,781 20,955 24,781 13,037
Concentration - value
Financial institutions 5,760 1,806 5,760 1,124
Companies 14,422 15,828 14,422 9,848
Individuals 4,599 3,321 4,599 2,065
24,781 20,955 24,781 13,037

Concentration - percentage % % % %
Financial institutions 23 9 23 9
Companies 58 76 58 76
Individuals 19 15 19 15
100 100 100 100

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
33 Credit lines
Trade and Development Bank (TDB) 2,749 820 2,749 510

Shelter Afrique 286 594 286 370
African Development Bank (AFDB) - 3,388 - 2,108
African Export-Import Bank (Afreximbank) 4,758 267 4,758 166
European Investment Bank (EIB) 1,937 - 1,937 -
Balance at end of the year 9,730 5,069 9,730 3,154
Maturity analysis
On demand to 3 months 633 1,024 633 637
3 months to 1 year 3,763 3,643 3,763 2,267
1 year to 5years 5,334 402 5,334 250
9,730 5,069 9,730 3,154

As security for the TDB Bank loan, the Group registered bonds and issued powers of attorney to register bonds (in the
event of default) over properties with a total value of ZWL4.99 billion as at 31 December 2021 (both investment proper-
ties and owner occupied properties). The Shelter Afrique loan is secured by a guarantee from OMZIL as well as a cession
of the performing loan book covering two times the exposure at any given time. The TDB facility expired in March 2021
and was renewed in October 2021. The AFDB facility expired in September 2021 while a new facility was acquired from
the European Investment Bank in August 2021.
34 Other payables
audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
Accruals and deferred income 587 1,177 484 177

Trade creditors 2,160 2,044 2,160 1,272
Foreign Creditors 1,066 12 1,066 8
Dividend payable 25 41 25 25
Kurera-Ukondla fund 8 12 8 8
Other liabilities (including settlement
control accounts) 95 527 91 282
3,941 3,813 3,834 1,772
35 Contingent liabilities

Commission of Inquiry
A commission of inquiry established by the Zimbabwean Government concluded its inquiry into the loss in value for certain
policyholders and beneficiaries upon the conversion of pension and insurance benefits after the dollarisation of the economy
in 2009. On 9 March 2018 the results of the Zimbabwean Government’s inquiry were made public. Although the Commission
believes that policyholders may have been prejudiced, and that government, regulators and the insurance industry played a
role in the loss of value, this finding is subject to review by the President and Cabinet. Furthermore, the Commission is yet to
determine a methodology for quantifying or allocating responsibility for this prejudice, and recommended that this be the
subject of a further independent process to determine a criteria for assessing prejudice as well as a basis for compensation,
which will also take into account the need to maintain stability and confidence in the industry. To date the process had not
officially commenced, as such we are not currently able to establish what impact the Commission’s findings will have on the
life business.
36 Post employment benefits obligations
The Group provides pension benefits to permanent employees and post-retirement benefits to qualifying employees.
Pension benefits have been designed, and are administered in accordance with the Pension and Provident Funds Act
(Chapter 24:09), and are defined contribution schemes.
The Old Mutual Staff Pension Fund

The Fund is a defined contribution plan registered to provide retirement benefits for the Group’s full-time employees.
National Social Security Authority Scheme

This scheme was promulgated under the National Social Security Authority Act 1989. The Group’s obligation under the
scheme is limited to specific contributions as legislated from time to time and is presently a maximum of 9% of the in-
sured amount provided by the National Social Security Authority. The employee and the employer contribute 50% each per
month.
Old Mutual Post Retirement Medical Aid Subsidy Fund

The fund is a defined contribution plan for the Group’s full-time employees. The subsidy is based on the applicable
contribution per member at the date of retirement.
94
Annual Report 2021

36 Post employment benefits obligations (cont’d)

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm

Contributions recognised as an expense for the year
- Old Mutual Staff Pension Fund 142 74 115 28
- National Social Security Authority Scheme 15 16 12 8
37 Capital commitments
Authorised 2,710 1,776 2,710 1,105

The Group is committed to incur capital expenditure and the commitments are expected to be settled in the year 2022.

For advances
Aggregate commitments due under advances
granted but not yet disbursed 3,800 99 3,800 61
38 Related party disclosures

Holding company and fellow subsidiaries and associates.
The Group’s immediate holding company is OM Zimbabwe Holdco Limited which holds 75% of the Group’s ordinary
shares. The ultimate holding company is Old Mutual Limited, incorporated in South Africa.
Other Group companies consist of fellow subsidiaries and associates.
Transactions and balances with holding company and fellow subsidiaries

Group
Inflation adjusted/ Inflation Historical
Historical adjusted cost
2021 2020 2020
ZWLm ZWLm ZWLm
Fellow related parties
Old Mutual Africa Holdings
Amounts due to as at 31 December (1,074) - -
Old Mutual Life Assurance Company (South Africa) Limited

Amounts due to as at 31 December - (957) (584)

Old Mutual Zimbabwe Holdco Limited
Amounts due to as at 31 December (3,498) (4,212) (2,625)

Old Mutual Finance (USD) Limited
Amounts due to as at 31 December (5,425) (6,561) (4,089)
Loans due by or to subsidiaries and other Group companies

Old Mutual Finance (U.K) Plc took over the amount previously owing to Old Mutual Netherlands. Loans due by or
to subsidiaries or other Group companies within Zimbabwe accrue interest at market related interest rates, and the
amounts are repayable on demand.

All the Group’s principal subsidiaries together with loans due by or to them are listed in Note 44 and 47.
Capital advances and amounts due by or to Group companies are disclosed in Note 47.

38 Related party disclosures (cont’d)
Key management personnel

Key management personnel and their close family members and entities which they control, jointly control or over
which they exercise significant influence are considered related parties to the Group.

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
Key management personnel remuneration
and other compensation
Short-term employee benefits 2 120 815 1 700 426
Share based payments - 2 - 1
Post-employment benefits 21 27 17 11
Severance pay 28 - 28 -
2,169 844 1,745 438
39 Unconsolidated structured entity

During 2012, Kurera-Ukondla Youth Fund was formed as part of conforming with the Indigenisation and Economic Empow-
erment Act, for the sole benefit of the Youth of Zimbabwe. OMZIL appointed Trustees who were responsible for overseeing
the trust’s activities. In 2021, the Kurera-Ukondla Youth fund was wound down and a new fund was created to replace it.
OMZIL has no interest in the profits or losses of the fund, all income and assets belongs to the Youth Fund and there is no
exposure.
40 Group statement of financial position
40.1
Categories of financial instruments
The analysis of assets and liabilities into their categories as defined in IFRS 9 ‘Financial Instruments: Recognition and
Measurement’ (IFRS 9) is set out in the following table. For completeness, assets and liabilities of a non–financial nature
or financial assets and liabilities that are specifically excluded from the scope of IFRS 9, are reflected in the non–financial
assets and liabilities category.
At fair value Non-financial
through At amortised assets/
Inflation adjusted audited profit or loss cost liabilities Total
At 31 December 2021 ZWLm ZWLm ZWLm ZWLm

Assets
Investment property - - 48,699 48,699
Property and equipment - - 10,302 10,302
Intangible assets 894 894
Deferred acquisition costs - - 39 39
Reinsurers’ share of insurance contract provisions - - 331 331
Investments and securities 134,901 5,844 - 140,745
Deferred tax assets - - 3 3
Current income tax assets - - 101 101
Loans and advances - 27,614 - 27,614
Other assets - 1,398 15,635 17,033
Cash and cash equivalents - 12,458 - 12,458
134,901 47,314 76,004 258,219
Liabilities
Insurance contract liabilities - - 139,767 139,767
Investment contract liabilities 11,048 - - 11,048
Provisions - - 617 617
Deferred tax liabilities - - 1,188 1,188
Current income tax liabilities - - 10 10
Amounts due to group companies - 9,997 - 9,997
Amounts owed to bank depositors - 24,781 - 24,781
Credit lines - 9,730 - 9,730
Other liabilities - 3,941 - 3,941
11,048 48,449 141,582 201,079
96
Annual Report 2021

40 Group statement of financial position (cont’d)
40.1 Categories of financial instruments (cont’d)

Inflation adjusted audited profit or loss cost liabilities Total
Assets
Intangible assets - - 872 872
Other assets - 17,825 1,643 19,468
56,310 48,087 48,184 152,581
Liabilities
Deferred tax liabilities - - 829 829
Credit lines - 11,730 - 11,730
5,264 41,567 77,991 124,822
At 31 December 2021

Assets
Intangible assets 208 208
Other assets - 1,398 13,288 14,686
134,901 47,314 71,342 253,557

Liabilities
Deferred tax liabilities - - 1,048 1,048
Credit lines - 9,730 - 9,730
11,048 48,342 141,378 200,768


Historical cost unaudited profit or loss cost liabilities Total
Assets
Current tax assets - - 63 63
Other assets - 9,748 1,022 10,770
35,032 28,574 28,452 92,058
Liabilities
Current tax payable - - 2 2
Credit lines - 3,154 - 3,154
3,275 25,261 48,335 76,871
40.2 Fair values of financial assets and liabilities

Determination of fair value
The best evidence of fair value is a quoted price in an active market. In the event that the market for a financial asset
or liability is not active or quoted prices cannot be obtained without undue effort, another valuation technique is used.
This is after:
- Assessing whether instruments are trading with sufficient frequency and volume such that they can be considered
liquid.
- The inclusion of a measure of the counterparties’ non-performance risk in the fair value measurement of loans and
advances, which involves the modelling of dynamic credit spreads.
- The inclusion of own credit risk in the calculation of the fair value of financial liabilities.
There have been no significant changes in the valuation techniques applied when valuing financial instruments. The
general principles applied to those instruments measured at fair value are outlined below:
Loans and advances

Loans and advances include mortgage loans, other asset-based loans, including collateralised debt obligations and
other secured and unsecured loans.
In the absence of an observable market for these instruments, the fair value is determined by using internally developed
models that are specific to the instrument and that incorporate all available observable inputs. These models involve
discounting the contractual cash flows by using a credit-adjusted rate.
98
Annual Report 2021

40.2 Fair values of financial assets and liabilities (cont’d)

Investments and securities
Investments and securities include listed and unlisted equity securities, pooled investments, and short term funds.
Pooled investments represent the Group’s holdings of shares/units in open-ended investment companies, unit trusts,
mutual funds, and similar investment vehicles. Pooled investments are recognised at fair value. The fair values of pooled
investments are based on widely published prices that are regularly updated or models based on the market prices of
investments held in the underlying pooled investment funds.
Other investment and securities that are measured at fair value are measured at observable market prices where
available. In the absence of observable market prices, these investments and securities are fair valued utilising one or
more of the following techniques: discounted cash flows, the applicable of an EBITDA multiple or any other relevant
technique.
Investment contract liabilities

The fair value of investment contract liabilities is determined with reference to the underlying funds that are held by the Group.
Other financial assets and liabilities

The fair values of other financial assets and liabilities are reasonably approximated by the carrying amounts reflected in
the statement of financial position as they are short-term in nature or re-price to current market rates frequently.
Fair value hierarchy

Level 1 – quoted market prices: financial assets and liabilities with quoted prices for identical instruments in active markets
Level 2 – valuation techniques using observable inputs: financial assets and liabilities with quoted prices for similar
instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial
assets and liabilities valued using models where all significant inputs are observable
Level 3 – valuation techniques using significant unobservable inputs: financial assets and liabilities valued using valuation
techniques where one or more significant inputs are unobservable.
The judgement as to whether a market is active may include, for example, consideration of factors such as the
magnitude and frequency of trading activity, the availability of prices, and the size of bid/offer spreads. In inactive
markets, obtaining assurance that the transaction price provides evidence of fair value or determining the adjustments
to transaction prices that are necessary to measure the fair value of the asset or liability requires additional work during
the valuation process.
The majority of valuation techniques employ only observable market data, and so the reliability of the fair value
measurement is high. However, certain financial assets and liabilities are valued on the basis of valuation techniques
that feature one or more significant market inputs that are unobservable and, for them, the derivation of fair value is
more judgemental. A financial asset or liability in its entirety is classified as valued using significant unobservable inputs
if a significant proportion of that asset or liability’s carrying amount is driven by unobservable inputs. In this context,
‘unobservable’ means that there is little or no current market data available for which to determine the price at which
an arm’s length transaction would be likely to occur. It generally does not mean that there is no market data available
at all upon which to base a determination of fair value (for example, consensus pricing data may be used). Furthermore,
in some cases the majority of the fair value derived from a valuation technique with significant unobservable inputs may
be attributable to observable inputs.
Financial assets and liabilities not measured at fair value

For items not measured at fair value the amounts presented in the financial statements closely approximate fair value.
This is largely due to unavailability of consistent assumptions in the market that can be used to determine fair value.

Analysis of instruments at fair value

Level 1 Level 2 Level 3 Total
ZWLm ZWLm ZWLm ZWLm
At 31 December 2021 -
Inflation adjusted/Historical cost
Financial assets measured at fair value
Investment and securities 117,853 1,611 15,771 135,235
Total financial assets measured at fair value 117,853 1,611 15,771 135,235

Financial liabilities
Investment contract liabilities - - 11,048 11,048
Total financial liabilities measured at fair value - - 11,048 11,048

Inflation Adjusted Audited - 2020

Investment and securities 48,054 - 8,245 56,299
Total financial assets measured at fair value 48,054 - 8,245 56,299

Investment Contract liabilities - - 5,264 5,264

Historical cost unaudited - 2020

Investment and securities 29,896 - 5,129 35,025
Total financial assets measured at fair value 29,896 - 5,129 35,025

Investment Contract liabilities - - 3,275 3,275
100
Annual Report 2021


The movement in level 3 instruments for the year can be analysed as follows:
Gains/losses Transfers Transfers
recognised into level 3 out of level
At 31 December 2021 Opening in profit or Purchases Sales and from other 3 to other Closing
Inflation adjusted balance loss and issues settlements categories categories balance
audited ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm

Designated (fair value through profit or loss) 8,245 7,526 - - - - 15,771
Total financial assets measured at fair value 8,245 7,526 - - - - 15,771
Inflation Adjusted Audited - 2020
Designated (fair value through profit or loss) 4,428 2,632 1,185 - - - 8,245
Total financial assets measured at fair value 4,428 2,632 1,185 - - - 8,245
At 31 December 2021

Designated (fair value through profit or loss) 5,129 10,642 - - - - 15,771
Total financial assets measured at fair value 5,129 10,642 - - - - 15,771
Historical cost Unaudited - 2020
Designated (fair value through profit or loss) 614 4,024 491 - - 5,129
Total financial assets measured at fair value 614 4,024 491 - - - 5,129

Key inputs and assumptions used in the valuation models include discount rates and price earnings ratio. The table
below sets out information about significant unobservable inputs used at year end in measuring financial instruments
categorised as level 3:
Valuation Technique Significant unobservable input Average range of unobservable inputs
Discounted Cash flow (DCF) Risk adjusted discount rate:

-Equity risk premium 22.86%
-Nominal free risk rate 15.67%
-Terminal growth rate 0%-3%
Price Earnings(PE) PE ratio/multiple: Discount applied

-Country risk discount 22.9%
-Marketability discount 17.4%
-Size discount 20%- 26.9%
Effect of changes in significant unobservable assumptions to reasonable possible alternatives

Favourable and unfavourable changes are determined on the basis of changes in the value of the financial asset or
liability as a result of varying the levels of the unobservable parameters using statistical techniques. When parameters
are not amenable to statistical analysis, quantification of uncertainty is judgemental. When the fair value of a financial
asset or liability is affected by more than one unobservable assumption, the figures shown reflect the most favourable
or most unfavourable change from varying the assumptions individually.
The valuations of the private equity investments are performed on an asset-by-asset basis using a valuation methodology
appropriate to the specific investment and in line with industry guidelines. In determining the valuation of the
investment the principal assumption used is the valuation multiples applied to the main financial indicators (such as
adjusted earnings). The source of these multiples may include multiples for comparable listed companies which have
been adjusted for discounts for non-tradability and valuation multiples earned on transactions in comparable sectors.
The valuations of asset-backed securities are determined by discounted cash flow models that generate the expected
value of the asset, incorporating benchmark information on factors such as prepayment patterns, default rates, loss
severities, and the historical performance of the underlying assets. The outputs from the models used are calibrated
with reference to similar securities for which external market information is available.


The following table summarises the significant inputs to value instruments categorised as Level 3 hierarchy in the
Group’s continuing businesses and their sensitivity to changes in the inputs used.
Sensitivity
Types of 31 December 31 December Valuation Significant 31 December 31 December

financial 2021 2020 Technique unobservable 2021 2020
instruments ZWLm ZWLm Used inputs ZWLm ZWLm
Investments and 16,465 5,129 Market PE Multiple Favourable Favourable

securities Approach Cost of equity 1,496 523
Discounted Terminal Unfavourable Unfavourable
Cash Flows Growth rate (1,496) (507)
41 Financial risk management
The Group is exposed to financial risk through its financial assets, financial liabilities, reinsurance assets, investment
contracts with discretionary participating features, and insurance liabilities. In particular, the key financial risk is that the
proceeds from its financial assets may not be sufficient to fund the obligations arising from its insurance and investment
contracts. The most important components of financial risk are interest rate risk, liquidity risk, equity price risk, currency
risk, and credit risk. These risks arise from open positions in interest rate (both fair value and cash flow interest rate risk)
and equity products, all of which are exposed to general and specific market movements.
Financial risk management strategy and policy

The principal technique of the Group is to match assets to the liabilities arising from insurance and investment contracts
by reference to the type of benefits payable to contract holders as well as seeking to maximise the return on shareholders’
funds, all within an acceptable risk framework.
The insurance contracts retain substantial exposures to the extent that the benefits payable to policyholders are not
linked to the performance of the underlying assets. These exposures include duration risk, credit risk, and market risk.
The notes below explain how financial risks are mitigated by the maintenance of sufficient capital.
Capital Adequacy 2021 2020

ZWLm ZWLm

Old Mutual Life Assurance Company Zimbabwe Limited (OMLAC)
Shareholders equity 30,626 7,651
Regulatory capital adequacy requirement 75 75
Central Africa Building Society (CABS)

Shareholders equity 13,375 5,041
Regulatory Capital 13,547 5,386
Total risk weighted assets 50,333 15,938
Capital adequacy ratio 27% 34%
Regulatory capital adequacy ratio 12% 12%

Old Mutual Investment Group Zimbabwe (Private) Limited (OMIG)
Shareholders equity 525 184

Old Mutual Securities (Private) Limited (OMSEC)

RM Insurance Holdings Limited (RMI)
Shareholders equity 2,855 838

Old Mutual Finance(Private) Limited (OMFIN)
Regulatory capital adequacy requirement 3 -
102
Annual Report 2021

41 Financial risk management (cont’d)
OMLAC
OMLAC is regulated by the Insurance and Pensions Commission (IPEC). The internal capital adequacy requirement
(CAR) has been calculated based on the Prudential Authority of South Africa’s Financial Soundness Standards for
Insurers Solvency Assessment and Management (SAM) framework. This provides a buffer against future experience
being worse than assumed, of which adverse investment experience is the most significant. For the Guaranteed Fund
product into which the majority of policyholder funds are invested, the shareholder’s support will only be called upon if
the Bonus Smoothing Reserve falls below negative 15% of the liabilities after reducing surrender values in accordance
with underlying asset values, reducing interim bonuses (if necessary to zero), declaring low or if necessary zero bonuses,
and if the circumstances warrant it, removing part or all of previously declared non vested bonuses to the extent
consistent with the Principles and Practices of Financial Management. The nature and extent of the action that would
be taken will depend on the severity of the decline in asset values and the circumstances at that time.
The investment resilience CAR is the single most significant component of the OMLAC’s CAR. The calculation of this
component is based on the asset profile and the proportion of vested and non-vested liabilities.
CABS
The Society’s lead regulator (Reserve Bank of Zimbabwe) sets and monitors capital requirements for the Society on
a quarterly basis through quarterly BSD1 Returns. As at 31 December 2021, RBZ required the Society to maintain a
minimum capital adequacy ratio of 12% as measured by the ratio of total capital to risk weighed assets, with effect from
31 December 2021 the required capital increased to a minimum of the equivalent of USD30 million.
OMIG
Securities and Exchange Commission (SEC) sets and monitors capital requirements for the company. The company
met the regulatory requirements regarding capitalisation. The amount of the surplus available to be distributed to the
shareholder, Old Mutual Zimbabwe Limited, is subject to available distributable reserves within the shareholders’ equity
and maintaining the minimum internal capital adequacy requirement.
OMSEC
The Securities Exchange Commission sets and monitors capital requirements for the company. The company met the
regulatory requirements regarding capitalisation.

RMI
Old Mutual Insurance Company (OMICO), RMI’s principal subsidiary, is regulated by the Insurance and Pensions
Commission (IPEC) which sets and monitors capital requirements for the company. The company met the regulatory
requirements regarding capitalisation.

OMFIN
The RBZ sets and monitors capital requirements for the company. The company met the regulatory requirements
regarding capitalisation.
Capital management policies

Capital is actively managed to ensure that the Group is properly capitalised and funded at all times, having regard to its
regulatory needs, with appropriate risk adjusted margins to allow prudent management of capital levels under stress
scenarios. The Group has a business planning process that runs on an annual cycle with regular updates to projections.
It is through this process, which includes risk and sensitivity analysis of forecasts, that the Group’s capital is managed.
Specifically, the Group has adopted the following capital management policies:
• Maintenance, as a minimum, of capital sufficient to meet the statutory requirements and such additional capital
as management believes is necessary to ensure that obligations to policyholders and depositors can be met on a
timely basis, including under stress scenarios.
• Maintenance of an appropriate level of liquidity at all times. The Group further ensures that it can meet its expected
capital and financing needs at all times, having regard to the business plans, forecasts, and any strategic initiatives.

Insurance risks
The Group controls its exposures through underwriting and re-pricing procedures to determine whether cover can be
provided and the pricing of such risk. Underwriting practice relies on regular review procedures to analyse actual loss
and expense experience.
Equity price risk

Equity price risk is the potential loss arising from changes in the value of equity securities. The Group’s investment
portfolio consists of equity securities, fixed income assets, and property. A substantial part of the equity portfolio consists
of listed counters. Non-listed investments are subjected to regular financial analysis and review, while exposure levels to
listed counters are regularly reviewed.
Credit risk
Credit risk is the risk that an asset, in the form of a monetary claim against a counterparty, may not result in a cash
receipt (or equivalent) in accordance with the terms of a contract.
The Group is exposed to credit risk through its money market investments, cash and cash equivalents and loans and
advances. Credit risk is managed by placing limits on exposure to a single counterparty or Groups of counterparties.
These limits are based on credit ratings of the counterparties conducted within the various operating companies. Credit
risk is monitored with reference to credit ratings with limits placed on exposure where credit risk is below acceptable
levels and through holding security from the counterparty.
Credit risk associated with property rentals is managed through a credit vetting process, the requirement for rental
deposits, and close monitoring of the tenants’ book.

audited unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
Overall credit risk

Short term funds and securities 5,844 7,007 5,844 4,359
Reinsurers’ share of insurance contract provisions 331 349 307 172
Cash and cash equivalents 12,458 11,873 12,458 7,386
18,633 19,229 18,609 11,917
Impaired
Gross amount 29,109 12,289 29,109 7,645
Allowance for impairment (1,495) (895) (1,495) (557)
Carrying amount 27,614 11,394 27,614 7,088
Impaired loans and securities

Impaired loans and securities are loans and securities for which the Group determines that it is probable that it will be
unable to collect all principal and interest due according to the contractual terms of the loan/securities agreement(s).
Past due but not impaired loans

Loans and securities where contractual interest or principal payments are past due, but the Group believes that
impairment is not appropriate on the basis of the level of security/collateral available and/or the stage of collection of
amounts owed to the Group.
104
Annual Report 2021

Exposure to counterparties
The Group is also exposed to counterparties arising from money market trading.
Loans and Advances Renegotiated

Restructuring of loans include extended repayment arrangements, modifications, and deferral of repayments.
Restructuring policies and practices are based on indicators and criteria that in the judgement of management, indicate
that repayments will most likely continue. These policies are kept under continuous review.
Allowances for impairment

The Group establishes an allowance for impairment based on the class of each loan and in line with IFRS 9 and the
Reserve Bank of Zimbabwe guideline on provisions.
Write off policy

The Group writes off a loan when the Credit Committee determines that the loans/securities are uncollectible. The
determination is reached after considering information such as the occurrence of significant changes in the borrower/
issuer’s financial position such that the borrower/issuer can no longer pay the obligation or that proceeds from collateral
will not be sufficient to pay back the entire exposure.
Collateral
The Group holds collateral against loans and advances to customers in the form of mortgage interest over property.
Estimates of fair value are based on the value of collateral assessed at the time of borrowing, and generally are not
updated except when a loan is individually assessed as impaired.
The Group holds collateral and other credit enhancements against certain of its credit exposures. The following table
sets out the principal types of collateral held against different types of financial assets.
Principal
31 December type of
Collateral held and other credit enhancements 2021 collateral held
Percentage of exposure subject to collateral requirements
Type of credit exposure
Treasury Bills 0% None
Fixed deposits* 100% Treasury Bills
Mortgage loans 100% Property
Corporate loans 100% Property and
guarantees
Consumer loans 85% Insurance
*Relates to CABS. Other Group subsidiaries’ exposure is managed through setting and regular review of limits on
counterparties.
The Group’s policy is to pursue timely realisation of the collateral in an orderly manner. The Group does not generally
use the non-cash collateral for its own operations.

Settlement risk
The Group’s activities may give rise to risk at the time of settlement of transactions and trades. Settlement risk is the
risk of loss due to the failure of a counterparty to honour its obligations to deliver cash, securities or other assets as
contractually agreed. The Group charges the maximum lending rate for all parties who fail to honour their obligations
on time. Settlement risk is also monitored through risk assessment of counterparties and capping of trading limits in
line with the risk profile of each institution.
Regulatory Loan Loss Provisioning

Provisioning is determined on the basis of account classification whereby provisions are uniformly determined for
specific grades. The Society establishes an allowance for impairment based on the class of each loan and in line with
the RBZ guidelines on provisions. The provisioning methodology is summarised below:

41
Financial risk management (cont’d)
Allowance for
Gross loans impairment Net loans
Class Type Provisioning criteria ZWLm ZWLm ZWLm
31 December 2021 - Inflation adjusted
Grade A,B,C Pass 1-2% general provision 21,744 483 21,261

Grade D,E,F,G Special mention 3-10% general provision 7,299 296 7,003
Grade H Sub standard 20% specific provision on
balance less security value 23 20 3
Grade I Doubtful 50% of total outstanding
Default Loss 100% of total outstanding
balance less security held 30 28 2
Portfolio total 29,109 839 28,270
31 December 2020


31 December 2020 - Historical cost unaudited


The Group also takes into account provisions requirement of IFRS 9 (Financial Instruments) and makes the most prudent
provisions for its loans and advances based on the two methods. Where the regulatory provisions are higher than the
IFRS 9 impairment, the excess is treated as an appropriation from retained earnings.

106
Annual Report 2021

Currency risk
The Group has exposure to effects of fluctuations in the prevailing foreign currency exchange rates on its financial
position and cash flows. To the extent possible, exchange rate risk on foreign payables is mitigated by generating
business which earns foreign currency.

The table below shows the Group’s exposure to foreign currency exchange risk.

USDm ZARm GBPm EUROm BWPm Total - ZWLm
At 31 December 2021
Cash and cash equivalents 34 99 1 2 5 4,810
At 31 December 2020
Cash and cash equivalents 17 3 - 2 1 1,556
The table below shows the Group’s closing exchange rates which were used in the financial statements.
USD ZAR GBP EURO BWP
At 31 December 2021 108.6660 6.8306 146.6828 122.9338 9.2312

At 31 December 2020 81.7866 5.5865 111.8345 100.4123 7.5738
Foreign currency risk

The Group has settlement exposure to foreign suppliers and creditors as well as related parties who require payments to
be made in foreign currency. Ability to settle is constrained by exchange control restrictions as well as the unavailability
of nostro funding.
2021 2020
ZWLm ZWLm
Foreign liabilities
Life Assurance 537 80
General Insurance - -
Banking 20,313 3,154
Holding Company and other 9,902 7,258
30,752 10,492

Of the amount disclosed above, the exposure to fellow Group companies was: 9,997 7,298
Interest rate risk

Interest rate risk is the risk that fluctuating interest rates will unfavourably affect the Group’s earnings and the value of
its assets, liabilities, and capital.

The individual life and employee benefits businesses have due regard to the nature of the liabilities. The interest rate
risk of such liabilities is managed by investing in available assets to ensure matching of current liabilities. Derivative
instruments are not used to manage the interest rate risk of these long term assets and liabilities.
Interest rate risk represents the price sensitivity of a fixed income security or interest-carrying asset to changes in interest
rates. This risk is controlled by careful monitoring of the level of interest-bearing investments.

The tables below set out the carrying amounts, by maturity, of the Group’s financial instruments that are exposed to
interest rate risk.
Repricing profile of financial assets and liabilities (including insurance) exposed to interest rate risk:
0 to 3 3 to 12 Over a
months months year Total
Inflation adjusted/historical - 2021 ZWLm ZWLm ZWLm ZWLm

Money market investments 3,621 224 - 3,845
7,517 8,310 17,127 32,954
Inflation adjusted audited - 2020

Money market investments 3,626 2,648 721 6,995
5,760 6,059 7,465 19,284


Money market investments 2,256 1,648 449 4,353
3,583 3,770 4,645 11,998
108
Annual Report 2021

Liquidity risk
Liquidity risk is the risk that cash may not be available at a reasonable cost to pay obligations when due. The tables
below set out the carrying amounts, by maturity, of the Group’s financial instruments that are exposed to liquidity risk.
Maturity profile of financial assets and liabilities exposed to liquidity risk:

0 to 3 3 to 12
months months Over a year Total
Inflation adjusted audited- 2021 ZWLm ZWLm ZWLm ZWLm
Cash & cash equivalents 12,458 - - 12,458

Investments and securities 9,514 17,902 113,329 140,745
Insurance contract liabilities (2,795) (18,170) (118,802) (139,767)
Amounts owed to bank depositors (23,563) (576) (642) (24,781)
Credit lines (633) (3,763) (5,334) (9,730)
Other liabilities - (2,842) (1,099) (3,941)
(1,323) 222 3,699 2,598

Credit lines (633) (3,763) (5,334) (9,730)
Other liabilities - (2,735) (1,099) (3,834)
(1,323) 338 3,754 2,769
Inflation adjusted audited-2020

Credit lines (1,025) (3,643) (401) (5,069)
Other liabilities - (3,748) (65) (3,813)
(1,726) (398) (17,554) (19,678)

Insurance contract liabilities (942) (6,002) (40,487) (47,431)
Credit lines (638) (2,267) (249) (3,154)
Other liabilities - (1,731) (41) (1,772)
(1,076) 352 (10,812) (11,536)
Investments and securities noted above also include listed equities as they are easily convertible to cash.


Management of liquidity risk

The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses
or risking damage to the Group’s reputation. The daily liquidity position of the Group is managed by the treasury
department in liaison with the relevant management.

Liquidity gap
The Liquidity gap is the difference between assets and liabilities in a given maturity period.
The banking business manages its contractual liquidity gap through treasury operations to acquire deposits of suitable
tenor and price from the market. As a contingency, the Group has also entered into liquidity support arrangements with
suitable counter parties, to which it has ready access, in need.
Exposure to liquidity risk

The key measure used by the Group for managing liquidity risk is the ratio of net liquid assets to deposits from customers.
For this purpose, net liquid assets are considered as including cash and cash equivalents and short term dealing and
investment securities for which there is an active and liquid market less any deposits from banks, other borrowing, and
liabilities maturing within the same short term period. Details of this ratio are given below:

2021 2020
Liquidity ratio (CABS) 44% 64%

Regulatory Minimum (CABS) 30% 30%

The banking business monitors liquidity risk by compliance with liquidity regulations of the Building Societies Act
(Chapter 24:02) as well as submission of monthly liquidity returns to the RBZ. In addition, the Group matches long term
lending to inflows into long term investments, and this is monitored through the Risk Management Committee.
Sensitivity analysis
A 20 percent movement of the listed equities as at 31 December 2021 would have changed equities by ZWL23,571
million and profit by ZWL5,539 million on the historical cost basis. The movement would represent a 15% impact on
profit and 10% impact on equity . This analysis assumes that all other variables remain constant.
42 Insurance risk management
The Group assumes insurance risk by issuing insurance contracts, under which the Group agrees to compensate
the policyholder or other beneficiary if a specified uncertain future event (the insured event) adversely affecting the
policyholder occurs. Insurance risk includes mortality risk.
For accounting purposes, insurance risk is defined as risk other than financial risk. Contracts issued by the Group may
include both insurance and financial risk; contracts with significant insurance risk are classified as insurance contracts,
while contracts with no or insignificant insurance risk are classified as investment contracts. The Group’s approach to
financial risk management has been described in Note 41.
Risk management objectives and policies for mitigating insurance risk

The Group effectively manages its insurance risks through the following mechanisms:
• Actuarial models, which use past experience and statistical models to calculate premiums and monitor claim
patterns.
• Guidelines for concluding insurance contracts and assuming insurance risks. These include underwriting principles
and product pricing procedures.
110
Annual Report 2021

42 Insurance risk management (cont’d)
• The mix of assets, which is driven by the economic environment. The management of assets and liabilities is closely
monitored to ensure that there are sufficient interest bearing assets to settle liabilities.
Terms and conditions of insurance contracts

The terms and conditions attached to insurance contracts determine the level of insurance risk accepted by the Group.
The following tables outline the general form of terms and conditions that apply to contracts sold in each category of
business and the nature of the risk incurred.
Policyholder
participation
investment
Category Essential terms Main risks Policyholders guarantees returns
Employee
Benefits
Rates are annually renewable Mortality Sum insured None
Group life
assurance
Regular benefit payments Underlying pricing interest
With-profit Longevity
participating in profits in return rate is guaranteed. Declared Yes, see below
annuity Investment
for consideration bonuses cannot be reduced
Retail Premium rates are guaranteed
Mortality Sum assured is guaranteed None
Life Plan but reviewable for new business
Funeral Premium rates are guaranteed
Mortality Sum assured is guaranteed None
Plan but reviewable for new business
General Accidental
Insurance Rates are reviewed at renewal damage or loss
Sum insured None
Property depending on loss ratio of the insured
insurance property
Legal liability
accidentally
Liability Limit of liability / sum
Rates are reviewed at renewal arising from None
policies insured
normal
operations
The extent of the Group’s discretion as to the allocation of investment return to policyholders varies based on the
type of contract. Where the contracts are pure risk type, there is no sharing of investment returns. For other contracts,
investment return is attributed to the policyholder. Declared bonuses may be either vesting and/or non-vesting (in
which case they can be reversed).
Smoothed bonus products constitute a significant proportion of the business. Particular attention is paid by ensuring
that the declaration of bonuses is done in a responsible manner, such that sufficient reserves are retained for bonus
smoothing purposes. Investment returns not distributed after deducting charges are credited to bonus stabilisation
reserves, which are used to support subsequent bonus declarations.
In addition to the specified risks identified above, the Group is subject to the risk that policyholders discontinue the
insurance policy through lapse or surrender.
Management of insurance risks

The table below summarises the variety of risks to which the Group is exposed and the methods by which it seeks to
mitigate these risks.
Risks Definition Risk management

Underwriting Misalignment of policyholders to the Experience is closely monitored.
appropriate pricing basis or impact of anti-
selection, resulting in a loss. Underwriting limits, health requirements, spread
of risks, and training of underwriters all mitigate
the risk.
Catastrophe Natural and non-natural disasters could Catastrophe excess of loss re-insurance treaty covers
result in increased mortality risk and all claims from one incident occurring within a
payouts on policies. specified period.

Summary of key valuation assumptions (statutory basis)

Below are the key actuarial valuation assumptions per product

Product 2021 2020

Old Mutual Funeral Plan
Valuation interest rate 7% 7%
Expense inflation 4% 4%
Effective interest rate for assurance 7% 7%
Mortality basis Zim 92 Zim92
Renewal costs per annum ZWL23 ZWL20
Lapse rates
Year 1 80% 80%
Year 2 40% 40%
Year 3 30% 30%
Year 4+ 8% 8%
Old Mutual Life Plan
Renewal costs per annum ZWL3,339 ZWL1,530
Lapse rates
Year 1 40% 40%
Year 2 20% 20%
Year 3 10% 10%
Year 4+ 2% 2%
Savings Plan
Renewal Costs per annum-premium paying ZWL3,548 ZWL1,626
Renewal Costs per annum-premium paid up ZWL3,548 ZWL1,626
Late rate:
Year 1 20% 20%
Surrender rate:
Year 2 10% 10%
Year 3 10% 10%
Year 4+ 10% 10%
Old Mutual Term Plan
Renewal costs per month ZWL3,548 ZWL1,626
Lapse rates
Year 1 40% 40%
Year 2 20% 20%
Year 3 10% 10%
Year 4+ 2% 2%
Pension Plus
Pension Plus interest rate
Valuing annuities 6% 6%
Valuing expenses 0% 0%
Mortality a(90) a(90)
Valuation interest rate per annum 6% 6%
After-retirement interest rate 4% 4%
Administration fee-per policy per annum ZWL48 ZWL48

Group Life Assurance reserves 2021 85% of premiums earned in
the last 2.8 months
2020 85% of premiums earned in
the last 2.8 months
112
Annual Report 2021

Sensitivity analysis on assumption changes

No sensitivity analysis was included due to the level of volatility of economic variables in the Zimbabwean economy.

43 Investment property
Audited Unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
Company
Carrying amount at beginning of year 38 72 25 10
Disposals - (53) - (19)
Net gain from fair value adjustments 7 19 20 34
Comprising:
Freehold property 45 38 45 25
The fair value of freehold property leased to third parties under operating leases is ZWL45m.

The carrying amount of investment property is the fair value of property as determined annually by internal professional
valuers, having an appropriate recognised professional qualification and recent experience in the location and category
of the property being valued. Fair values are determined by having regard to recent market transactions for similar
properties in the same location as the investment property. The Company’s current lease arrangements, which are
entered into on an arm’s length basis and which are comparable to those for similar properties in the same location,
are taken into account. Investment properties, being residential, were fair valued using the Comparison Approach. The
fair value of the Company’s properties are categorised into Level 3 of the fair value hierarchy (quoted prices of similar
assets).

44
Investment in subsidiary companies
Inflation adjusted Historical Cost
Audited Unaudited
Number of 2021 2021
issued ordinary and % Carrying value Carrying value
preference shares interest of shares of shares
Total ZWLm ZWLm
Unlisted - subsidiaries
Old Mutual Life Assurance Company
Zimbabwe Limited 13 184 355 100% 2,586 41
Central Africa Building Society 15 000 000 100% 1,328 21
Old Mutual Investment Group
Zimbabwe (Private) Limited 10 000 100% 344 40
Old Mutual Securities (Private) Limited 287 100% 47 24
Old Mutual Finance (Private) Limited 443 032 100% 70 49
RM Insurance Holdings Limited 940 520 58.63% 248 8
4,623 183
All the above companies have a year end of 31 December and their financial results have been consolidated and are
included in the Group financial statements from the effective date that the Group controls the entity.
The non-controlling interests share of profit for the financial year has been calculated on the basis of the Group’s
effective ownership in RM Insurance Holdings Limited, the principal subsidiary where a non-controlling interest exists.

Audited Unaudited
Number of 2020 2020
issued ordinary and % Carrying value Carrying value
preference shares interest of shares of shares
Total ZWLm ZWLm
Unlisted - subsidiaries
Zimbabwe Limited 13 184 355 100% 2,586 41
Central Africa Building Society 15 000 000 100% 1,328 21
Old Mutual Investment Group Zimbabwe
(Private) Limited 10 000 100% 344 40
Old Mutual Securities (Private) Limited 202 100% 35 16
RM Insurance Holdings Limited 940 520 58.63% 248 8
4,541 126
114
Annual Report 2021

44 Investment in subsidiary companies (cont’d)
The non-controlling interests share of profit for the financial year has been calculated on the basis of the Group’s
effective ownership in RM Insurance Holdings Limited and Old Mutual Securities (Private) Limited, being the principal
subsidiaries where non-controlling interests exist.
45. Property and equipment Right of Motor Computer Fixtures

Use Asset vehicles equipment and fittings Total
Company ZWLm ZWLm ZWLm ZWLm ZWLm
Inflation adjusted 2021
Carrying amount at beginning of year - 29 200 178 407
Additions 8 48 6 8 70
Disposals (3) - - - (3)
Depreciation charge for the year (1) (14) (51) (42) (108)
Carrying amount at end of year 4 63 155 144 366

Cost/Valuation 7 95 226 226 554
Accumulated depreciation (3) (32) (71) (82) (188)

Inflation adjusted audited 2020
Carrying amount at beginning of year 1 16 3 1 21
Additions - 29 216 216 461
Disposals - (11) - - (11)
Carrying amount at end of year - 29 200 178 407

Cost/valuation 2 49 220 218 489

Historical cost unaudited 2021
Carrying amount at beginning of year - 13 4 36 53
Additions 7 42 6 6 61
Disposals (3) - - - (3)

Cost/Valuation 4 57 10 49 120

Historical cost unaudited 2020
Carrying amount at beginning of year - 1 - - 1
Additions - 14 4 42 60
Disposals - (1) - - (1)
Depreciation charge for the year - (1) - (6) (7)

Cost/valuation 1 14 4 43 62
Accumulated depreciation (1) (1) - (7) (9)

46 Investments and securities

Audited Unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
46.1 Analysis of investments
At fair value through profit or loss
Equity securities
(see analysis in note 46.2 below) 6,168 2,605 6,168 1,621
Unit trusts 20 10 20 6
At amortised cost
Debentures 9 2 9 1
Deposits and money market securities 38 5 38 3
6,235 2,622 6,235 1,631

46.2 Spread of equity securities by sector
At fair value through profit or loss
Commodities 839 199 839 124
Consumer 2,536 894 2,536 556
Financial 1,195 920 1,195 572
Properties 45 39 45 25
Manufacturing 846 283 846 176
Mining - 2 - 1
Unlisted 707 268 707 167
6,168 2,605 6,168 1,621
46.3 Movements of investment and securities

Opening balance 2,622 2,157 1,631 299
Fair value movements through profit and loss 4,034 885 4,138 1,219
Additions 946 838 728 339
Disposals (1,367) (1,258) (262) (226)
6,235 2,622 6,235 1,631

Unquoted equities included in investments were measured at fair value.
116
Annual Report 2021

47 Amounts due from or (to) Group companies

Inflation adjusted/
Historical cost Inflation adjusted Historical cost
2021 2021 2020 2020 2020 2020
Company Due from Due to Due from Due to Due from Due to

Zimbabwe Limited 75 - 26 - 16 -
Old Mutual Zimbabwe Holdco Limited - (3,498) - (4,238) - (2,637)
Old Mutual Investment Group
Zimbabwe (Private) Limited 202 - 20 - 12 -
Old Mutual (Zimbabwe) Foundation Trust - (3) - - - -
Old Mutual Securities (Private) Limited - (3) - (7) - (5)
Old Mutual Insurance Company
(Private) Limited 64 - 2 - 1 -
Central Africa Building Society 24 - 47 - 29 -
Old Mutual Finance (USD) Limited - (5,425) - (6,573) - (4,089)
The OMZIL Client Pension Exgratia Trust 8 - 9 - 6 -
The OMZIL Indigenisation
Employee Share Trust - (3) - (1) - (1)
The OMZIL Management
Incentive Share Trust - (5) - (2) - (1)
Old Mutual Finance (Private) Limited 9 - 15 - 9 -
Old Mutual Africa Holdings - (485) - (592) - (368)
382 (9,422) 119 (11,413) 73 (7,101)
The amounts due from or to Group companies above are payable on demand.
Inflation Company
adjusted/ Inflation Historical
Historical cost adjusted cost
2021 2020 2020
48 Other assets ZWLm ZWLm ZWLm
Legacy debt statutory receivable 8,528 10,794 6,716

Dividend receivable 1 7 4
Other 194 49 30
8,723 10,850 6,750
49 Cash and cash equivalents

Cash at bank and on hand 468 175 109

50 Share-based payments

50.1 Share based payments reserve
The equity share-based payment reserve is maintained in the Company from the date of issue of the share awards.
On exercise of the share awards, settlement will be made through the structured entities controlled by Old Mutual
Zimbabwe Limited.
The movement of the reserve during the reporting period is included in the statement of changes in equity.
50.2 Cash-settled share-based employee compensation plans

In 2018, the Group granted share awards to all eligible employees as part of the primary listing of Old Mutual Limited
on the Johannesburg Stock Exchange (JSE). All permanent employees of the Group on the date of listing of Old Mutual
Limited were eligible to participate, provided that they were still permanently employed by the Group on the grant date
of 18 September 2018.
All participants received a fixed Rand value offer of R10 000 converted into the local currency after reducing the award
by the amount needed to cover the tax liability on the award for each employee in compliance with tax legislation
which states that share awards are taxable on grant. The actual number of shares granted to each employee were
calculated on the grant date using the price of the Old Mutual Limited share on the JSE.
The BBESP award was restricted for a period of two years from the grant date. Participants were entitled to receive
dividends in respect of the share awards during the restricted period. At the end of the restricted period, the value of
the vested share awards would be paid in cash to the participants. The BBESP awards were not subject to performance
conditions, however, the Award was subject to the condition that participants remain employed by the Group during
the restricted period.
The balance of the liability at the end of reporting period was as below:

Company Company
December December
2021 2020
ZWLm ZWLm

Broad Based Employee Share Plan - -
- -
118
Annual Report 2021

50 Share-based payments (cont’d)
50.2
Cash-settled share-based employee compensation plans (cont’d)
The fair value of services received in return for the BBESP was measured by reference to the fair value of share entitlements
granted over the service period. The fair value was measured using the closing price of the Old Mutual Limited share
on the JSE at each reporting date. The cash-settled share based payment liability was maintained in the Group and
remeasured at each balance sheet date during the period up to exercise of the share options, with changes in fair value
recorded in profit or loss.

Movements relating to share entitlements and awards during the year are as follows:
2021 2020
Number of Number of
Deferred delivery entitlements shares shares

Outstanding, at beginning of year - 1,873
Forfeited during the year - (1,873)
Outstanding, at end of year - -
All the outstanding shares vested in September 2021 at the completion of the restricted period and the participants
were settled in cash, the value of the shares, on the vesting date, per the vesting conditions. The share price of the Old
Mutual Limited share on the JSE was applied to the total shares held by each participant. The share scheme was wound
up upon settlement of the outstanding obligations.
51 Provisions

Employee
Company related
provisions Other Total
Inflation adjusted audited ZWLm ZWLm ZWLm
2021
Charge 261 53 314

2020
Charge 47 33 80

2021
Charge 261 53 314

2020
Charge 29 20 49

Income
At beginning statement At end
2021 charge 2021
52 Deferred tax liabilities - Inflation adjusted (audited) ZWLm ZWLm ZWLm
Company
Fair value adjustments 119 3 122
119 3 122
Analysis of deferred tax - capital gains 122
Income
2020 charge 2020
ZWLm ZWLm ZWLm
29 90 119
Income
Deferred tax liabilities - Historical 2021 charge 2021
ZWLm ZWLm ZWLm
11 36 47
Income
2020 charge 2020
ZWLm ZWLm ZWLm
4 7 11

2021 2020 2021 2020
53 Other payables Inflation Inflation Historical Historical
adjusted adjusted cost cost
ZWLm ZWLm ZWLm ZWLm
Dividend payable 25 40 25 25
Kurera-Ukondla Fund 8 13 8 8
Other liabilities 70 71 70 44
103 124 103 77

54 Share capital and premium

Authorised share capital ZWL ZWL ZWL ZWL
292 953 125 ordinary shares of
ZWL0.0000032 each 59 471 59,471 937 937
249 035 156 ‘A’ class ordinary shares of
ZWL0.0000032 each 50 586 50,586 797 797
83 011 718 ‘B’ class ordinary shares of
ZWL0.0000032 each 16 947 16,947 267 267
1 preference share of ZWL1 each 63 63 1 1
1 A preference share of ZWL1 each 63 63 1 1
Issued share capital
249 035 156 ‘A’ class ordinary shares of
ZWL0.0000032 each 50 586 50,586 797 797
83 011 718 ‘B’ class ordinary shares of
ZWL0.0000032 each 16 947 16,947 267 267
1 preference share of ZWL1 each 63 63 1 1
1 A preference share of ZWL1 each 63 63 1 1
67 659 67,659 1,066 1,066
120
Annual Report 2021

54 Share capital and premium (cont’d)
Subject to the limitations imposed by the Companies Act, the Articles of Association permit the directors to allot the
unissued share capital at their discretion without restriction.
These class ‘A’ and ‘B’ shares carry the same rights as the ordinary shares.
The redeemable preference share issued to Old Mutual (Zimbabwe) Dividend Access Trust is not transferable and carries
the following rights:
1. It would be entitled to a non-cumulative preferential annual dividend of ZWL100 (one hundred Zimbabwe dollars);
2. It shall be redeemable at any time at the discretion of Old Mutual Zimbabwe Limited;
3. It shall participate in Surplus Assets on liquidation, subject to a limit of ZWL1.00.
4. Subject to certain conditions, the directors of the company shall be entitled to declare such additional dividends in
respect of the Share as they may from time to time, in their discretion, determine, subject to the provisions of the
Scheme.
Subject to the requirements of any legislation that may from time to time compel the trustees of the Dividend Access
Trust to withhold any amounts (whether in respect of taxation or otherwise) they shall be obliged to pay any dividends
received by them as the shareholders of the preference share to the shareholders of Old Mutual Limited registered on
its Zimbabwe share register, pro-rata to their shareholding in that company.
The ‘A’ redeemable preference share was issued to the OML (Zimbabwe) Dividend Access Trust (OML DAT) and is not
transferrable and confers no rights to share in the assets of the Company during its continuation or on winding up other
than through dividend participation or redemption in terms of the articles.
Shares held by the entity

The number of shares held by the entity and its subsidiaries, including within policyholder funds is 43 588 177 shares.
No of shares No of shares
2021 2020
Opening balance 46 088 177 47 206 186

Disposed of (2 500 000) (1 118 009)
Closing balance 43 588 177 46 088 177
55 Post employment benefits obligation

The Company provides pension benefits to permanent employees and post-retirement benefits to qualifying employees.
Pension benefits have been designed and are administered in accordance with the Pension and Provident Funds Act
(Chapter 24:09) and are defined contribution schemes.
The Old Mutual Staff Pension Fund

The Fund is a defined contribution plan registered to provide retirement benefits for the Company’s full-time employees.
National Social Security Authority Scheme

This scheme was promulgated under the National Social Security Authority Act 1989. The Company’s obligation under
the scheme is limited to specific contributions as legislated from time to time and is presently a maximum of 9% of the
insured amount provided by the National Social Security Authority. The employee and the employer contribute 50%
each per month.
Old Mutual Post Retirement Medical Aid Subsidy Fund

The fund is a defined contribution plan for the Company’s full-time employees.

Audited Unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
Contributions recognised as an expense for the year
Old Mutual Staff Pension Fund 10 4 9 2
National Social Security Authority Scheme 1 - 1 -

56 Capital commitments
20 2021 2020
ZWLm ZWLm

Authorised 656 25
Authorised and contracted for - -

57 Related party disclosures

Holding company and fellow subsidiaries.
The Company’s immediate holding company is OM Zimbabwe Holdco Limited (UK) which holds 75% of the Group’s
ordinary shares. The ultimate holding company is Old Mutual Limited, incorporated in South Africa.

Other Group companies consist of subsidiaries, associates as well as other subsidiaries of Old Mutual Limited.

Transactions with holding company and other Group companies:

Audited Unaudited
2021 2020 2021 2020
Subsidiaries ZWLm ZWLm ZWLm ZWLm

Old Mutual Zimbabwe Holdco Limited
Nature of transactions
Amounts due to at end of year (3,498) (4,238) (3,498) (2,637)

Old Mutual Investment Group Zimbabwe
(Private) Limited
Nature of transactions: Asset Management Fees 36 15 30 7
Management Fee Income 79 56 63 24
Amounts due to at end of year 202 20 202 12

Central Africa Building Society
Nature of transactions; Bank charges 1 1 1 1
Management Fee Income 146 94 117 40
Management Fee Expense 11 14 9 5
Dividend received 483 167 350 100
Interest earned on Investments 2 1 2 1
Amounts due at end of year 24 47 24 29

Old Mutual Finance (Private) Limited
Nature of transactions: Management Fee Income 3 5 3 2
Amounts due to at end of year 9 15 9 9

Old Mutual (Zimbabwe) Foundation Trust
Amounts due at end of year (3) - (3) -

Old Mutual Finance (USD) Limited
Nature of transactions
Amounts due at end of year (5,425) (6,573) (5,425) (4,089)
122
Annual Report 2021

57 Related party disclosures (cont’d)

Audited Unaudited
2021 2020 2021 2020
Subsidiaries ZWLm ZWLm ZWLm ZWLm
Old Mutual Life Assurance

Company Zimbabwe Limited
Management Fee Expense 5 10 4 3

Old Mutual Securities (Private) Limited
Amounts due at end of year (3) (7) (3) (5)

Old Mutual Insurance Company (Private) Limited
Loans due by or to subsidiaries and other Group companies

Loans due from or to subsidiaries or other Group companies accrue interest at market related interest rates and are
repayable on demand.

All the Company’s principal subsidiaries together with loans due from or to them are listed in Note 44 and 47.
Capital advances and amounts due from or to Group companies are disclosed in Note 47.

Key management personnel
Key management personnel and their close family members and entities which they control, jointly control or over
which they exercise significant influence are considered related parties to the Group. Details of transactions are disclosed
in Note 38.

58 Company statement of financial position
58.1
Categories of financial instruments
The analysis of assets and liabilities into their categories as defined in IFRS 9 ‘Financial Instruments: Recognition and
Measurement’ (IFRS 9) is set out in the following table. For completeness, assets and liabilities of a non–financial nature
or financial assets and liabilities that are specifically excluded from the scope of IFRS 9 are reflected in the non–financial
assets and liabilities category.
At fair value At Non-financial
Inflation Adjusted Audited through amortised assets/
profit or loss cost liabilities Total

Assets
Investment property - - 45 45
Investments in subsidiary companies - - 4,623 4,623
Property and equipment - - 366 366
Investments and securities 6,188 47 - 6,235
Amounts due by group companies - 382 - 382
Other receivables - 195 8,528 8,723
Cash and cash equivalents - 468 - 468
6,188 1,092 13,564 20,844
Liabilities
Current income tax payable - - 2 2
Other payables - 103 - 103
- 9,525 438 9,963
At 31 December 2020

Assets
Investments in subsidiary companies - - 4,541 4,541
Other receivables - 10,850 - 10,850
2,615 11,151 4,989 18,755
Liabilities
Other payables - 124 - 124
- 11,537 187 11,724
124
Annual Report 2021

58 Company statement of financial position (cont’d)

Historical cost - Unaudited through At amortised assets/
profit or loss cost liabilities Total
Assets
Investments in subsidiary companies - - 183 183
Other receivables - 195 8,528 8,723
6,188 1,092 8,845 16,125
Liabilities
Other liabilities - 103 - 103
- 9,525 362 9,887
At 31 December 2020

Assets
Investments in subsidiary companies - - 126 126
Other receivables - 6,750 - 6,750
1,627 6,936 204 8,767
Liabilities
Other liabilities - 77 - 77
- 7,178 53 7,231

58.2 Fair values of financial assets and liabilities
Analysis of instruments at fair value Inflation adjusted/Historical cost


Investment and securities 5,481 - 707 6,188
Total financial assets measured at fair value 5,481 - 707 6,188

Inflation adjusted - Audited

Historical cost - Unaudited


The movement in level 3 instruments for the year can be analysed as follows:
Transfers
Inflation adjusted Gains/losses Transfers into out of level
audited Opening recognised in Purchases Sales and level 3 from 3 to other Closing
balance profit or loss and issues settlements other categories categories balance
At 31 December 2021 ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm
Financial assets
measured at fair value
Designated (fair value

through profit or loss) 268 439 - - - - 707
Total financial assets

measured at fair value 268 439 - - - - 707
At 31 December 2020
Financial assets

through profit or loss) 193 (151) 226 - - - 268

measured at fair value 193 (151) 226 - - - 268
126
Annual Report 2021

Transfers
Historical cost Gains/losses Transfers into out of level
unaudited Opening recognised in Purchases Sales and level 3 from 3 to other Closing
balance profit or loss and issues settlements other categories categories balance
At 31 December 2021 ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm ZWLm
Financial assets

through profit or loss) 167 540 - - - - 707

measured at fair value 167 540 - - - - 707
Financial assets

through profit or loss) 27 86 54 - - 167

measured at fair value 27 86 54 - - - 167
The level 3 investments consist of minority shareholdings in Nedbank Zimbabwe and Tenpill.
59 Company Financial risk management
Credit risk
Credit risk is the risk that an asset, in the form of a monetary claim against a counterparty, may not result in a cash
receipt (or equivalent) in accordance with the terms of a contract.

The Company is exposed to credit risk through its investment holdings (i.e. money markets, cash and cash equivalents)
and accounts receivable. Credit risk is managed by placing limits on exposure to a single counterparty, or Groups of
counterparties. Credit risk associated with property rentals is managed through a credit vetting process, the requirement
for rental deposits and close monitoring of the tenants’ book.

Audited Unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
Overall credit risk

Short term funds and securities 67 17 67 10
Other receivables 8,723 10,850 8,723 6,750
9,258 11,042 9,258 6,869

Management of credit risk
The Group has delegated the responsibility for the management of credit risk to the Credit Committee which is
responsible for oversight of the Group’s credit risk, including that of the Company.


59 Company Financial risk management (cont’d)

Audited Unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm

Exposure to credit risk

Legacy debt statutory receivable
Carrying amount 8,528 10,795 8,528 6,716
Liquidity risk
Liquidity risk is the risk that cash may not be available at a reasonable cost to pay obligations when due. The tables
below set out the carrying amounts, by maturity, of the Company’s financial instruments that are exposed to liquidity risk.
Maturity profile of assets and liabilities exposed to liquidity risk:

0 to 3 3 to 12 Over
months months a year Total
ZWLm ZWLm ZWLm ZWLm
Inflation adjusted/Historical cost - 2021
Cash and cash equivalents 468 - - 468
Other receivables 195 - 8,528 8,723
Other payables (70) - (33) (103)
1,832 4,996 8,495 15,323

Inflation adjusted audited - 2020
Other payables 4 (75) (53) (124)
2,851 (69) 10,741 13,523

Other payables 2 (46) (33) (77)
1,773 (43) 6,683 8,413
128
Annual Report 2021

59 Company Financial risk management (cont’d)
Management of liquidity risk

The Company’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions without incurring unacceptable
losses or risking damage to the Company’s reputation. The daily liquidity position of the Company is managed by the
treasury department in liaison with the relevant management.
Liquidity gap
The Liquidity gap is the difference between assets and liabilities in a given maturity period.
Foreign currency risk

The Company has settlement exposure to foreign suppliers and creditors, as well as related parties who require pay-
ments to be made in foreign currency. Ability to settle is constrained by exchange control restrictions as well as the
unavailability of nostro funding.

2021 2020
USDm USDm
Investments and securities 4 8

Other receivables 84 84
Cash and cash equivalents - -
Amounts owed to group companies (87) (87)
1 5
60 Notes to the Group statement of cash flows

Audited Unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
60.1 Non-cash movements and adjustments

to profit before tax
Depreciation and amortisation 1,078 835 265 99
Revaluation (surplus)/loss shadow accounting (842) 224 (1,622) 1,024
Net fair value gains for the year included
in profit before tax (79,679) (22,429) (118,868) (45,188)
Charges to provisions and post employment
benefits obligation (127) 901 153 932
Share-based payments charge - 23 (17) 14
Movement in policyholder liabilities 63,353 17,790 92,272 39,362
Unrealised exchange gains (996) (3,051) (996) (1,915)
(17,213) (5,707) (28,813) (5,672)
60.2 Changes in working capital

Insurance, other receivables and
amounts due from Group companies (13,785) (12,954) (24,442) (15,675)
Insurance, other payables and
amounts due to Group companies 8,005 16,272 24,278 21,547
Reinsurer’s share of insurance contract liabilities 18 258 (135) (117)
Deferred acquisition costs 2 26 (17) (16)
Inflation adjustment (3,683) 3,312 - -
(9,443) 6,914 (316) 5,739

60 Notes to the Group statement of cash flows (cont’d)

Audited Unaudited

Group 2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm

60.3 Taxation paid
Taxation payable at beginning of year 94 86 58 12
Income tax charge for the year (397) (373) (367) (209)
Taxation payable at end of year (91) (94) (91) (58)
(394) (381) (400) (255)

60.4 Dividends paid
Dividends payable at beginning of year (517) (517) (72) (72)
Dividends declared during the year - - - -
Dividends payable at end of year 115 115 72 72
- - - -
61 Company

61.1 Non-cash movements and adjustments to
profit before tax
Depreciation and amortisation 108 64 23 8
Net fair value (gains)/losses for the year included
in profit before tax (4,041) 721 (4,158) (1,241)
Charges to provisions and post employment
benefits obligation 249 26 274 35
Inflation adjustment 1,017 (2,092) - -
(2,667) (1,281) (3,861) (1,198)

61.2 Changes in working capital
Other receivables and amounts
due from Group companies 1,864 (10,681) (2,282) (6,784)
Other payables and amounts
due to Group companies (2,012) 10,158 2,347 6,928
(148) (523) 65 144
61.3 Taxation paid

Taxation payable at beginning of year 3 4 2 (1)
Income tax charge for the year (191) (106) (191) (66)
Taxation payable at end of year 2 3 1 2
(186) (99) (188) (65)
61.4 Dividends paid

Dividends payable at beginning of year (115) (517) (72) (72)
Dividends declared during the year - - - -
Dividends payable at end of year 72 115 72 72
- - - -
130
Annual Report 2021

62 Going concern

The consolidated and separate financial statements have been prepared on a going concern basis, which assumes that
the Group and the Company will continue in operation for the foreseeable future. The Group has recognised a historical
profit after tax of ZWL35.6 billion for the year ended 31 December 2021 (2020: ZWL11.1 billion) and, as at that date, total
assets exceeded total liabilities by ZWL52.8 billion (2020: ZWL 15.2 billion). The Company recognised a profit after tax of
ZWL4.7 billion for the year ended 31 December 2021 (2020: ZWL1.2 billion) and, as at that date, total assets exceeded
total liabilities by ZWL6.2 billion (2020: ZWL 1.5 billion). An assessment of the possible effects of COVID-19 on the going
concern of the Group is discussed in detail in Note 62.1.
For the Group, inflation adjusted total assets increased from ZWL152.6 billion in 2020 to ZWL258.2 billion as the nominal
growth in assets on the historical cost and fair value bases of accounting (175%) exceeded inflation for the 2021 full year
of 60.7%. The restated total equity of ZWL57.1 billion was higher than the restated comparable of ZW27.8 billion mainly
due to investments growth, increased lending and foreign exchange gains. As for the Company, inflation adjusted total
assets grew from ZWL18.8 billion in 2020 to ZWL20.8 billion. The restated total equity of ZWL10.9 billion was higher than
the restated comparable of ZWL7.0 billion.
Funds under management (FUM) for the asset management business were up by 207% to ZWL245.8 billion mainly due
to positive investment performance and foreign currency translation gains. The business core pillars and foundations
remained in place, as evidenced by growth in total customer numbers from 1.40 million to 1.47 million, the diversified
sources of revenue generated and positive operating margins in most business segments.
The financial position of the Group and the Company, their cash flows, liquidity position and borrowing facilities are
described above. In addition, Notes 2, 40, 41, 58 & 59 to the financial statements include the Group and Company’s ob-
jectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial
instruments and hedging activities; and its exposures to credit risk and liquidity risk. The Group has considerable finan-
cial resources together with long-term contracts with a number of customers and suppliers across different geographic
areas and industries. The Company also has adequate financial resources to continue in operation for the foreseeable
future.
We refer also to Note 25.2 on the Legacy debt statutory receivable from the Reserve Bank of Zimbabwe in connection
with certain obligations to related parties outside Zimbabwe. The directors have no reason to believe that the RBZ will
not support the discharge of the external obligations. This assertion is also supported by the recently passed Finance
bill H.B 16 2022 which provides for the discharge of legacy debts on the RBZ’s balance sheet by the Government of
Zimbabwe. The parent company, OML, has indicated that they will also support an orderly resolution of the matter in a
way that does not negatively impact on the financial stability of the Group in Zimbabwe. This is in the event that support
from the RBZ fails to materialise - something considered unlikely at this point.
The directors have thus assessed the ability of the Group and 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.
62.1 Impact of COVID-19 on the business

The Group’s business includes banking services, asset management, micro-finance, stockbroking, life assurance as well
as short term insurance. The measures adopted by the Government of Zimbabwe to help curb the spread of the
virus included periods of lockdown which meant that some of our staff had to work from home. The business has
managed to enable most staff members to work from home whilst also ensuring that necessary safety measures were
implemented at the workplace to protect staff that need to be physically present at the workplace as well as customers,
this has been done to ensure continuity of business operations. A significant amount had to be spent on IT hardware
and sanitary equipment, but some savings were realised in other areas of normal operations.
COVID-19 did not have a significant impact on the Group’s ability to continue to operate as a going concern. The claims
ratio in the life and short-term businesses remained consistent with previous reporting periods. Rental yields as well as voids
slightly improved during the period under review as the busines managed to achieve rent escalations due to regular reviews
effected during 2021. In 2020 there was a lag between inflation and the level of rental increases achieved which was not the
case in 2021. We managed to record positive net client cashflows during the year, while the performance of the Zimbabwe
Stock Exchange (ZSE) positively impacted Funds Under Management and management fees.

62 Going concern (cont’d)
62.1 Impact of COVID-19 on the business (cont’d)

CABS exercised selective lending and provided more lenient terms to clients that were negatively impacted by the
pandemic. Due to the need to exercise prudence, we have increased IFRS 9 loan loss provisions to cater for potential
deterioration in loan performance in the future due to the likely adverse impact that the pandemic will have on
some customers. Notwithstanding an increase in credit loss provisions, CABS remained profitable due to better than
expected revenue performance, particularly on non-funded income. The Non Performing Loan (NPL) ratio remained
within acceptable levels of below 5%. Assumption setting has a long term focus and changes in assumptions usually
require more than a single event. No untoward changes in mortality patterns attributable to COVID-19 were observed
during the period under review. The following table tracks some of the Group’s Key Performance Indicators over the past
three years.
Key Performance Indicator 2021 2020 2019
Claims ratio - Short-term Insurance 54% 45% 61%

Claims ratio - Long term Insurance 88% 58% 69%
Voids 16% 18% 17%
Rental yield 93% 92% 93%
Cost to income ratio 48% 41% 48%
Non Performing Loans ratio 0.2% 0.4% 2%

The Group put in place the following measures amongst others in order to protect margins and reinforce the liquidity
and capital adequacy position in the foreseeable future.
- management of client relations to maintain and grow the current portfolio
- continuing to introduce market relevant products in order to grow business volumes
- ensuring pricing levels remain sustainable and competitive with regular reviews in response to inflation
- proactive monitoring of facilities to mitigate migrations into a non-performing status
- critical credit assessment of new loan disbursements
- mobilisation of diverse deposits with staggered maturity profiles
- investing excess capital in real assets particularly the ZSE whose year on year growth in 2021 surpassed annual inflation
- taking advantage of opportunities available to generate more revenue in hard currency, especially USD
- careful management of cost to income ratios.
The Group managed to maintain a strong liquidity and capital position throughout the 31 December 2021 reporting
period.
Audited Unaudited
2021 2020 2021 2020
ZWLm ZWLm ZWLm ZWLm
63 Assets held under fiduciary capacity

Managed third party funds 91,078 23,716 91,078 14,775

Managed funds
The Group holds a custodianship responsibility in respect of assets owned by certain pension funds and private clients.
Funds under management represent assets being managed on behalf of investors and these are kept off balance sheet.
Total funds management (including Group funds) as at 31 December 2021 were ZWL245.8 billion (2020: ZWL80.0
billion).
132
Annual Report 2021

64 Currency Sensitivity Analysis
The table below is a sensitivity analysis of the effect of using different exchange rates to convert foreign currency
balances to local reporting currency. The scenarios presented compare the impact of using the closing rate at 1:108.6660;
Depreciated at 50% and 75%.
2021 2021 2021 2021
USDm ZWLm ZWLm ZWLm
31Dec 2021 Translated 50% 75%
Foreign currency denominated Assets/Liabilities @1:108.6660 Depreciation Depreciation
Assets
Investments and securities 96 10,432 15,648 18,256
Loans and advances 126 13,692 20,538 23,961
Other receivables 9 978 1,467 1,712
Cash and cash equivalents 165 17,930 26,895 31,378
Total assets 396 43,032 64,548 75,307
Liabilities
Long-term business policyholder liabilities 80 8,693 13,040 15,213
Borrowed funds 89 9,671 14,507 16,924
Amounts due to Group companies 92 9,997 14,996 17,495
Amounts owed to bank depositors 84 9,128 13,692 15,974
Other payables 13 1,413 2,120 2,473
Total liabilities 358 38,902 58,355 68,079
Net assets 38 4,130 6,193 7,228
The Group and its subsidiaries remain solvent and sufficiently capitalised at the different exchange rate sensitivities.

Refer to note 25.2 for the accounting treatment of other obligations to related parties outside Zimbabwe.

65 Subsequent events
65.1 Movement of fair value of listed shares

Subsequent to year end, the value of the Zimbabwe Stock Exchange (ZSE) all share index had increased by about
39%. This subsequent increase in ZSE price resulted in Group’s listed equities increasing by ZWL43.6 billion as at 28
February 2022, while profits for that period have been positively impacted by ZWL10.8 billion on a historical cost basis.
The Group’s subsidiaries remain well capitalised.
65.2 Dividend declaration

Subsequent to year end, the Company declared a dividend of ZWL823.6 million which translates to ZWL248 cents per
share out of the 2021 profits.

NOTICE OF THE ANNUAL GENERAL MEETING (AGM)
NOTICE is hereby given that the 24th Annual General Meeting vii. The Company’s share capital shall be redenominated into
of members of Old Mutual Zimbabwe Limited (the Company) Zimbabwe dollars (ZWL) at a parity rate to the United
will be held virtually at https://escrowagm.com/eagmZim/ States dollar.
Login.aspx on Wednesday 18 May 2022 at 1500 hours for the
purposes of transacting the following business: Appointment of Proxy
In terms of section 171 of the Companies and Other Business
AS ORDINARY BUSINESS Entities Act [Chapter 24:31] and Article 78 of the Articles of
Association of the Company, a member entitled to attend
Minutes of last Annual General Meeting and vote at a meeting is entitled to appoint a proxy to speak
1. To approve the minutes of the 23rd Annual General and vote in his stead. A proxy need not be a member of the
Meeting (AGM) that was held on 19 August 2021. Company, provided that a director or officer of the Company
may not be a proxy for a shareholder. Article 80 of the Articles
Financial Statements and Statutory Reports of Association of the Company requires that Forms of Proxy
2. To receive, consider and adopt the Corporate Governance reach the Company’s registered office or the office of the
Report, inclusive of the Report by the Audit Committee, Transfer Secretaries (Corpserve Transfer Secretaries Registrars
for the financial year ended 31 December 2021. (Private) Limited, 2nd Floor, ZB Centre, Kwame Nkrumah Ave,
3. To receive, consider and adopt the Financial Statements P O Box 2208, Harare, Zimbabwe) not less than forty-eight
and Directors’ and Auditors’ Reports for the financial year (48) hours before the date set for the Meeting. Alternatively,
ended 31 December 2021. Electronic Proxy forms, duly completed, signed and stamped
(in the case of a corporate shareholder) may also be emailed
Directorate to [email protected]. Article 81 of the Articles of
4. In terms of Article 106 of the Articles of Association, Association of the Company provides that an instrument
one-third of the Directors shall retire from office and are appointing a proxy shall be executed in any usual or common
eligible for re-election. Mr A Daka and Mrs N Samuriwo form.
retire by rotation and, being eligible, offer themselves for
re-election. Registration for the AGM
5. To confirm the remuneration of Directors amounting to As a result of the prevailing COVID-19 (2019 Coronavirus)
ZWL$14,168,380 for the year ended 31 December 2021. pandemic and the prevailing lockdown restrictions, we will
be conducting our Annual General Meeting virtually. Please
External Auditors contact Setfree Nhapi or Robert Mazvanara for assistance
6. To approve the External Auditors’ remuneration amounting with registration for the Annual General Meeting:
to ZWL$53,145, 898 for the year ended 31 December 2021. Email: [email protected] / [email protected].
7. To reappoint Deloitte as the Company’s auditors for the Landline: +263 242 758193
ensuing year. Cell phone: Setfree: +263 719 024972
Cell phone: Robert: +263 772 289768
Dividend
8. To confirm the payment of a final dividend of 2021 Annual Report
ZWL823,590,584.28 being, ZWL248.03 per share, for the Electronic copies of the Company’s 2021 Annual Report have
year ended 31 December 2021. been emailed to those shareholders whose emails are on
record.
AS SPECIAL BUSINESS
To pass the following special resolution, with or without The Annual Report will also be available on the company’s
modification: website at the following link https://www.oldmutual.co.zw/
9. The adoption and substitution of a new Memorandum about-us/financial-results from 29 April 2022.
and Articles of Association for the Company compliant
with the requirements of the new Companies and Other By Order of the Board
Business Entities Act [Chapter 24:31] including, among
other changes, the following: Hardlife R. Nharingo
i. Allow the holding of the meetings of members, and voting GROUP COMPANY SECRETARY
thereat through virtual or electronic means; Registered Office
ii. All references to the Companies Act shall now be to the Mutual Gardens
Companies and Other Business Entities Act [Chapter 100 The Chase (West)
24:31] or its successor legislation; Emerald Hill
iii. The articles shall be amended to reflect that the Company Harare
shall have a minimum of 7 and a maximum of 15 directors; ZIMBABWE
iv. The quorum at any meeting of the board shall be 3/5ths of
the total membership of the board; 27 April 2022
v. The quorum of a meeting of members shall be not less than
one-third of the votes of the shares entitled to so vote;
vi. A director or officer of the Company may not act as a proxy
for a shareholder; and
134
Annual Report 2021
NOTES


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Old Mutual Zimbabwe Limited

DO GREAT THINGS EVERY DAY

Independent Auditors’ Report

9 Corporate Governance Report

Notice of the AGM

OLD MUTUAL ZIMBABWE LIMITED

Certificate of incorporation no.

Old Mutual adheres to a Responsible

While the performance of the property market was affected

CHAIRMAN’S STATEMENT (CONT’D)

Financial Performance financial decisions. During 2021, this program was

OLD MUTUAL ZIMBABWE LIMITED

In historical terms, the Group

Introduction An equivalent of USD27.8 million was deployed into

CEO’S REVIEW (CONT’D)

Inflation Adjusted basis

The Group sustained adequate liquidity, capital and solvency

OLD MUTUAL ZIMBABWE LIMITED

Responsibility the financial statements to the fact that prevailing market

*Mr K C Katsande was appointed the Board Chairman with

CORPORATE GOVERNANCE REPORT (CONT’D)

Board and Committee attendance

OMZIL Board of Directors

Remuneration and Nominations Committee

OLD MUTUAL ZIMBABWE LIMITED

Board and Committee attendance (con’d)

Group Audit Committee

Group Risk and Compliance Committee

OUR APPROACH TO RISK MANAGEMENT

The framework comprises the following major elements:

THE RISK GOVERNANCE STRUCTURE

Figure 1: Enterprise Risk Management Framework & Risk Governance Structure

OMZIL Board & Business Unit (BU) Boards

Risk Strategy & Appetite

Shareholders, Regulators & Customers

ENTERPRISE RISK MANAGEMENT (CONT’D)

COMPLIANCE RISK MANAGEMENT FRAMEWORK (INCLUDING AML, CFT & CPF)

Figure 2: Compliance Risk Management Framework

Conduct Risk & Ethics

Compliance Policy, Plans Programs

Compliance Risk Appetite

Compliance Risk Appetite

THE COMBINED ASSURANCE & THE THREE LINES OF ASSURANCE

OLD MUTUAL ZIMBABWE LIMITED

OVERVIEW OF KEY RISKS

Table 1: OMZIL Top Risks

Emerging Technologies: The RBZ is considering introducing

ENTERPRISE RISK MANAGEMENT (CONT’D)

Risk Category &

The Group also sources foreign currency from the

There are Liquidity/Funding contingency arrangements

WFH challenges are addressed through provision of

OLD MUTUAL ZIMBABWE LIMITED

Risk Category &

The system performance and uptime continues to

The Funeral Services Business under the life company was

ENTERPRISE RISK MANAGEMENT (CONT’D)

Risk Category &

Organisational Design & Workforce: This concerns risks

OLD MUTUAL ZIMBABWE LIMITED