Vodacom Tanzania Public Limited Company

Annual Integrated Report

for the year ended 31 March 2023
Contents
1. Overview
01 Who we are
02 Vodacom Tanzania at a Glance
04 Chairman’s review
06 The value we impacted

2. Our business
08 Managing Director’s review
12 Our products and services
13 Our investment case
14 Our business model

3. Our business environment Vodacom Tanzania’s Annual

16 How we sustain value Report 2023
18 Our operating context
22 Our key relationships This is Vodacom Tanzania’s seventh annual report, and the sixth following
our listing on the Dar es Salaam Stock Exchange on 15 August 2017.
24 Our material risks and opportunities
Written primarily for current and prospective investors, this report provides
4. Our strategy
an overview of our business, business model and operating environment,
28 Our strategic priorities and reviews our strategy, operational and governance performance for the
28 Vigorously defend mobile financial year 1 April 2022 to 31 March 2023. Our reporting process has
30 Expand and escalate M-Pesa growth been guided by the principles and requirements contained in the
31 Relentlessly pursue Fixed International Financial Reporting Standards (IFRS), the Value Reporting
32 Innovate and lead Enterprise Foundation’s Integrated Reporting Framework, the Dar es Salaam Stock
32 Extract Wholesale value Exchange (DSE) Public Limited Company Rules 2022, and the Companies
33 Leveraging our brand position Act, 2002. Ernst & Young (‘EY’) assured our annual financial statements and
has provided an unmodified opinion (pages 83 to 85).
35 Our strategic enablers
35 Digital care and experience The Board has applied its collective mind to the preparation and
37 Technology leadership in network and IT presentation of the information in this report. The Board believes that this
38 Retain and develop a high performing team report addresses all material issues and presents a balanced and fair
account of the Group’s performance for the reporting period, as well as an
5. Our purpose accurate reflection of our core strategic commitments. The directors have
41 Digital society applied their judgement regarding the disclosure of Vodacom Tanzania’s
43 Inclusion for all strategic plans, and they have ensured that these disclosures do not place
44 Planet the company at a competitive disadvantage. The Board approved this annual
report on 13 July 2023.
46 Corporate Social Responsibility
Report (CSR) Signed on the Board’s behalf:
6. Our financial performance

7. Governance
54 Justice (Rtd) Thomas B Mihayo Philip Besiimire
Our leadership team
Chairman Managing Director
56 Corporate governance report
13 July 2023 13 July 2023
58 Corporate governance activities
60 Remuneration Report 2023

8. Consolidated annual financial statements

Delivering social value through
63 Report of the directors
our core purpose
81 Statement of directors’ responsibilities Vodacom Tanzania’s purpose is ‘connecting for a
82 Declaration by the head of finance better future’. The United Nations Sustainable
Development Goals (SDGs) provide a globally
83 Report of the independent auditor
agreed articulation of what that ‘better future’
86 Consolidated and separate
looks like, setting a clear long-term agenda to
financial statements
end poverty, protect the planet and ensure
9. Notice of annual general meeting prosperity for all by 2030. Vodacom Tanzania is
committed to harnessing its technology and
10. Additional information resources, as a leading African telco, in the
attainment of these goals, supporting
155 Share information governments, communities, businesses and
156 Corporate information individuals to build a better future. Through our
157 Definition of terms business of providing increased access to
159 Disclaimer reliable and accessible data, messaging, voice
and mobile money services, we are making a
valuable contribution to meeting national and
Where to find more information: global developmental objectives.
PG Find relevant information in this report. Vodacom Tanzania has identified and prioritized
www Read more on our website at the following eight SDGs where we believe we
www.vodacom.co.tz can make the most meaningful impact:
Who we are
Vodacom Tanzania is Tanzania’s Vodacom Tanzania listed on the
Dar es Salaam Stock Exchange on
leading communications company 15 August 2017. Vodacom Tanzania and
providing a wide range of services its subsidiaries (together ‘the Group’) are
majority owned by Vodacom Group
for consumers and enterprise

million
Limited, a company registered in South
including voice, data, messaging, Africa, which in turn is majority owned
by Vodafone Group PLC., a company
financial services, and Enterprise based in the United Kingdom.
solutions to over customers

Our purpose Our vision Our way

Why we exist Where and who we want to be How we operate

Digital society
Connecting people and things Earn customer
to the internet
To be a leading digital
1 loyalty

Inclusion for all company that empowers a

A digital future that is accessible connected society
to all Create the
2 future
Planet
Reducing our environmental
impact
Connecting for a better future Experiment –
3 learn fast

Get it done
To be the employer
of choice (The best place to work)
4 together

Our strategic priorities

Driving growth through new businesses while protecting the core

Expand and Relentlessly Innovate and Extract Leveraging on

Vigorously
escalate pursue lead Wholesale our brand
defend mobile
M-Pesa growth Fixed Enterprise value position

Technology leadership in Retain and develop a

Digital Care and Experience
network and IT high performing team

Improve the return on capital employed

01
Vodacom Tanzania
at a glance
Mara

Kagera
Mwanza Arusha

Shinyanga Killmanjaro

Kigoma Manyara
Tanga

Tabora
Singida
Katavi Dodoma
Iringa
Dar es salaam

Rukwa Mbeya

Morogoro Lindi
2G sites 4G sites Njombe
3 447 2 353
3G sites 5G sites Ruvuma Mtwara
3 096 231

4 years CAPEX 90 days customers Broadband coverage

(TZS billion) (million)
174 16.7 66.7% 68.0%
155 156 15.5 14.9 15.4
57.7%
122 52.0%

Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2020 Mar 2021 Mar 2022 Mar 2023

Total number of sites Total number of 4G sites 4G population coverage

3 357 3 388 3 447 2 353 56.2%
3 226
50.4%
1 963
1 820 41.8%
1 321 32.6%

Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2020 Mar 2021 Mar 2022 Mar 2023

02 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

03
Chairman’s review

It has been highly encouraging to see the Company back on a positive trajectory this year, after a challenging
period that largely resulted in subdued financial performances in recent times. With the Company generating
TZS44.6 billion in profit after tax, the Board is pleased to recommend that shareholders approve a final
dividend equivalent to 50% of our profit after tax – in accordance with our stated dividend policy.

I am particularly pleased with the manner in services. By investing in network infrastructure, enhanced by an encouraging improvement in
which the Company executed its strategy and increasing access to affordable smart-devices, the quality of dialogue with government on
strengthened its resilience, ultimately and developing innovative and affordable material issues affecting the ICT sector. This is
contributing to a strong set of results for the products and services in fin-tech, education, evidenced, for instance by the fruitful
year. As indicated in my previous annual health and agriculture, the Company is not engagements at a ministerial level regarding
review, this year was expected to be a only ensuring its long-term resilience and the impact of last year’s mobile money levies
challenging year, mainly due to uncertainties growth, but also making a hugely important on financial inclusion in Tanzania. Following
associated with the war in Ukraine, which has contribution to the Tanzanian economy. these discussions, we saw a series of
resulted in significant increases in energy reductions in the levies, with the maximum
costs. Additionally, a recurrence of COVID-19 Looking back at the past year, it is very
levy-band at the end of March 2023, 80% lower
restrictions specifically in China, led to the pleasing to see the positive impact that the
than maximum levy charged when levy was
re-emergence of supply chain disruptions company’s significant investment into network
introduced in July 2021. This has been to the
causing delays and price escalations in some infrastructure, and efforts made in driving
benefit of all, particularly consumers, and
of our critical imports. adoption of data and new services, particularly
emphasises the importance of constructive
in M-Pesa – lending, insurance and merchant
dialogue between business and government in
Our excellent financial and operational results payments. In addition to launching new
are testament to the quality of the Company’s services on our M-Pesa platform – a key driver finding solutions to fully realise the benefits of
purpose-led strategy and its ability to execute of financial inclusion – we have seen information technology in achieving the
on a deliberate plan aimed at connecting significant progress in digitising the agriculture, country’s developmental objectives.
people to a better future. Despite global health and education sectors. This follows From a governance perspective, there have
social-economic turbulences and a highly broadband coverage expansion, 5G roll out and been two new appointments this year to the
competitive market environment, the successfully completion of deployment of a Board. Following the resignation of Sitholizwe
Company performed well financially and new future-proof IoT platform, further (Sitho) Mdlalose as Managing Director in July
maintained its leading position in terms of supported by spectrum acquired in October 2022 who went to lead our larger sister
market share and customer net promoter 2022. In a particularly encouraging operating company Vodacom South Africa, we
score. Performance has also been aided by a development this year, we have seen a were pleased to appoint Philip Besiimire as the
more predictable regulatory environment, with significant increase in the number of Company’s new Managing Director, effective
significantly improved levels of engagement small-scale farmers registered on our M-Kulima
15 October 2022. Philip has an exceptional
with Government and closer alignment on platform, which is digitising the agriculture
track record of growing businesses and
goals, as together we strive to harness the value chain, offering an innovative digital
delivering strategic transformation, with more
sector’s potential to promote digital and solution to stakeholders including the
than 15 years’ experience of leadership and
financial inclusion. government. Availability of these advanced
commercial execution in the sector, working
technologies provides an important foundation
Underpinning the Company’s performance has with one of the largest telco companies in
for provision of transformative services, critical
been its visible commitment to delivering on Africa. We are already seeing the benefits of
for supporting Tanzania’s economic and social
its purpose and improving the lives of millions transformation. Philip’s leadership, energy and experience,
of Tanzanians by providing high quality which I am confident will help us further
communications and mobile financial services, Our ability to make these investments in strengthen the Company’s leadership position
with enhanced access to more inclusive digital infrastructure and service offerings has been in the sector. We were also delighted to

04 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

welcome Ms Kanini Mutooni as an outlook based on the encouraging signs of interactive and a tool driver of the company
independent non-executive director, and economic recovery, which follow the lifting through the executive team. And on their
member of the Audit, Risk and Compliance of global pandemic-related restrictions. This behalf, I would like to express our appreciation
Committee, effective September 2022. recovery comes amidst a shortfall of rain in to the executive team and all the employees
Ms Mutooni brings significant leadership the country, which has negatively impacted for their work and dedication in delivering very
experience at both an executive and board electricity production and agriculture, in pleasing performance. Finally, I would
level, as well as deep experience in investment addition to the global economic pressures encourage all of you, our stakeholders, to review
banking and impact investment. from the war in Ukraine. Not only these, but this annual report, reflect on performance and
also the global inflation outlook remains strategy, and give us feedback. Holding us to
Having conducted a Board performance account is valuable in helping us deliver on our
another area of potential macro-pressure.
evaluation last year, we are pleased that the purpose.
results indicate that we have a Board that Nonetheless, I am confident that the
brings a diversity in skills, experience, insight Company has the right strategy, leadership
and gender perspective to ensure that we team, and culture in place to navigate these
provide effective independent oversight of the uncertainties while remaining focused on
Company performance and strategic direction growth. Justice (rtd) Thomas B Mihayo
to hold the executive team to account on its Chairman
I wish to thank my colleagues on the Board 13 July 2023
fiduciary, ethical and social responsibilities.
for their continued insight and advice. I am
Looking to the immediate future, I am very happy that the Board has jointly and
cautiously optimistic about the economic severally become more inquisitive,

“Our excellent financial and

operational results are
testament to the quality of
the Company’s purpose-led
strategy and its ability to
execute on a deliberate plan
aimed at connecting people
to a better future”.

05
The value we impacted
Our performance
Customers Smartphone users M-Pesa customers

16.7 million 5.3 million 8.2 million

up 8.9% up 27.9% up 20.0%

Service revenue Mobile data revenue

TZS1 053.8 billion TZS273.7 billion

up 10.2% (underlying: 13.2%1) up 34.2%

M-Pesa revenue EBITDA

TZS357.1 billion TZS329.4 billion

up 8.4% (underlying: 16.6%1) up 9.7% (underlying: 15.1%1)

Profit after tax CAPEX

TZS44.6 billion TZS156.0 billion

(underlying: TZS5.6 billion ) 1
14.5% of revenue

1. Underlying performance includes an add back of TZS29.3 billion in service revenue, TZS16.3 billion in EBITDA and
TZS11.9 billion in profit after tax being impact of the levies in the first quarter of the year. Additionally, the underlying
performance excludes TZS50.9 billion tax expense saving from deferred tax asset recognition.

For our customers

Provision of critical Financial inclusion Launched Inclusive care Rated first in customer
connectivity enhancement initiatives to serve Net Promoter Score
services through M-Pesa customers requiring (NPS)
special care

Expanded our network coverage2 Extended our network: Launched country’s

first 5G network:
4G coverage 3G coverage 2G coverage rolling our 231 5G sites,
to enable advanced
adding 390 4G sites,
56.2% 85.0% 93.1% 228 3G sites, 59 2G sites, digital services and
enhanced customer
of population of population of population 283 kilometres of fibre
experience.
and enhancement of
up 5.8pp up 23.9pp up 0.2pp IT infrastructure.

2. Based on Vodacom Tanzania internal estimates.

06 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

For our shareholders

TZS22.3 billion
paid in dividends to equity
shareholders
In our community
A total of
TZS530 billion
TZS571.5 billion cash contributions to public
in dividends since listing in 2017 finances in taxes, levies, spectrum,
and regulatory fees

302 sites
built over ten years in support of
Government’s rural coverage
programme
For our employees
TZS537.1 billion
TZS65.2 billion spent on over 400 local suppliers
spent on employees, including and partner companies in Tanzania
salaries, training and skills
development More than

Provided self-development
TZS1.7 billion
spent on social investment1
online training to over

500 Indirect employment provided to over

employees
150 0002
Tanzanians
44%
female representation in Support to agricultural sector – over
management
3.1 million
farmers registered on M-Kulima
platform

Our life-saving M-mama program

is live and operational in
8 regions
including Zanzibar

1. Include CSI funded directly by Vodacom Tanzania and

injections from our related parent company through
Vodafone Foundation, a UK registered charity,
number 1193984.
2. Includes freelancers and M-Pesa agents.

07
Managing Director’s
review
Since joining the Company in October last year, I have been impressed by the quality of the management
team and staff, and the strong execution of the strategy. Personally, it has been an incredible privilege to be
afforded the opportunity to lead Vodacom Tanzania, one of the country’s largest companies and one that is
instrumental in a sector that plays a significant role in ensuring the smooth functioning of the Tanzanian
economy and the wellbeing of its citizens.

During the year under review, our purpose-led number of farmers registered to over performance indicators grew pleasingly in the
strategy faced ongoing macro challenges 3.1 million from 140 000 in the prior year, with year, despite the impact of intense market
associated with the war in Ukraine. Despite an impressive TZS4.6 billion of disbursements competition and the barring of service to
these obstacles, we accelerated our ‘Tech for made to farmers securely through M-Pesa 238 000 customers that hadn’t completed
Good’ initiatives to provide solutions to key during the year. The expansion of our M-Mama their multiple sim-ownership declaration. I will
societal challenges and meaningfully program to 14 regions is progressing well. We cover our strategy execution in detail later in
contributed to reducing the digital divide in are already live and operational in 8 regions, my review.
Tanzania. Pleasingly, we also reported a including Zanzibar. This service provides
significant year-on-year improvement in our emergency transport connecting mothers and From a financial performance perspective, we
financial performance. new-borns to vital life-saving healthcare in generated TZS1 053.8 billion of service
rural areas. revenue, up 10.2%, or 13.2%1 on an underlying
One of our key purpose driven interventions in basis. The growth was driven by a strong result
the year was to improve access to our services Consistent with our focus on bridging from mobile data, a recovery in M-Pesa and
for people with special needs, consistent with Tanzania’s digital divide, we invested accelerating fixed growth. The M-Pesa recovery
our ‘inclusion for all’ objective. Through TZS156.0 billion in network capacity, coverage was partially supported by reduction in
inclusive care initiatives, we made structural and IT infrastructure improvements. We government levies on mobile money transfer
changes to improve access for physically enhanced our broadband coverage with 390 and withdrawal transactions, following a
additional 4G sites and 228 new 3G sites. collaborative process to drive financial
challenged people across 80 of our retail
In September 2022, we announced a key
shops and service desks. We also introduced inclusion. We commend the government for
technology milestone with a launch of
dedicated counters for special needs reducing the levies as we believe that the
Tanzania’s first-ever 5G network, ending the
customers in our retail shops. In addition, we reduction will boost our contribution to
financial year with 231 sites supporting this
trained over 30 retail support personnel on financial inclusion through affordable M-Pesa
technology. In October 2022, we participated
basic sign language knowledge, who are services. In addition to the levy reduction,
in a spectrum auction conducted by the
placed in key customer service channels M-Pesa’s recovery was also supported by a
Tanzania Communications Regulatory
including WhatsApp video. In the last third of good uptake in our new revenue growth areas
Authority and successfully acquired four blocks
the financial year, these initiatives benefitted of low and mid-band spectrum for a price of comprising of lending, insurance, international
1 300 customers, showcasing our quest of US$63.2 million. This significant investment money transfers (IMT) and merchant services.
putting our customers at the centre of will accelerate our future network expansion In the year, the contribution of these new
everything we do. plans and help us unlock the growth potential growth areas to M-Pesa revenue exceeded
from products such as fixed-wireless access. 25%, more than double the prior year’s level.
Our M-Kulima and M-Mama services are prime
Our network investment, coupled with We generated TZS81.5 billion in operating
examples of how we can scale our ‘Tech for
smartphone adoption and investment in
Good’ solutions in partnership with profit, up 26.5%, or 51.7%1 on an underlying
spectrum supported 4G data usage growth
government. M-Kulima provides farmers with basis. The growth was supported by our strong
of 57.1%.
the benefits of digital agricultural services, revenue performance and cost containment
including; cashless electronic payments, In executing on our commercial strategy we initiatives, partly offset by 5.1% increase in
market information and weather forecasts. focused on customer experience through depreciation and amortisation reflecting
Through this mobile-first solution we personalisation. This was supported by investments in our network, IT infrastructure
continued to digitize farming communities, machine learning capabilities and multi- and newly acquired spectrum. It is pleasing to
while also providing the government with key product offerings. Pleasingly, our customer report a net profit after tax of TZS44.6 billion or
statistics for the agricultural sector. In close experience efforts were reflected in market TZS5.6 billion on an underlying basis2, a
collaboration and support from the ministry leadership of customer share and Net significant improvement from the loss of
responsible for agriculture, we accelerated the Promoter Score. Our key customer TZS20.3 billion in the prior financial year.

1. Underlying performance includes an estimated add back of TZS29.3 billion levy impact on service revenue and TZS16.3 billion on EBITDA.
2. Underlying performance includes an estimated add back of TZS11.9 billion levy impact on profit after tax and excludes TZS50.9 billion upside from deferred tax asset recognition.

08 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Executing our with the highest number of data users, and

relatively high levels of average revenue per
Firstly, we accelerated enrolment of
businesses that accept electronic payments
purpose-led strategy user (ARPU). Encouragingly, we ended the year
with an 8.9% growth in customer base to
through our merchant payments system.
Our merchant base reached 150 000, a
Upon joining Vodacom, it became immediately 16.7 million, and a 15.1% increase in number significant increase, with these merchants
apparent that the business was on a strong of data users to 8.7 million, of which 60.3% accepting payments worth over TZS6 trillion,
trajectory, with all business units trending were smartphone users, setting us up well for from over 2 million customers during the
positively and consistent with the growth success in other areas. This growth was year. Secondly, our lending products
ambitions. After reviewing the strategy, I supported by strengthening our capabilities in portfolio served more than 4 million
encouraged the Board to continue with the customer value management (CVM) and big customers, who benefitted from a trillion
existing ambitions, as I believe this to be the data analytics, increasing the number of worth of micro loans issued in the year.
right approach to deliver growth and value to smartphone users on our network by 27.9% The beneficiaries of micro loans included
our stakeholders. and maintaining a strong and well-incentivised 75 000 agents who received over
salesforce presence on the ground. TZS100 billion, which supported the agents
As reviewed in more detail throughout this
report – and briefly summarised below – we Commercial initiatives were well supported in fulfilling their short term financing needs.
have seen strong execution this year against by high quality of service1 and resilience in Thirdly, we continued to see a recovery of
the six strategic pillars and three underlying our network underpinned by our continued peer to peer and cash out transactions
strategic enablers. investment in network and supporting volume following the reduction of levies.
IT systems. We are proud that M-Pesa continues to play
Vigorously defend the a pivotal role in supporting the country’s
Expand and escalate social-economic development by
mobile business contributing to financial inclusion evidenced
We delivered a good performance in this
M-Pesa growth by an increase of 20% year on year to
strategic pillar, which saw us maintaining our M-Pesa is a critical service that gives us a 8.2 million customers. We continue to
leadership position in the market with 30%1 competitive differentiation advantage. During focus on the enhancement of our M-Pesa
customer market share. Pleasingly, we gained the year, we focused on adding products to our super-app and its adoption, which will
3.2pp of data users’ market share2 in the M-Pesa portfolio aimed at building a diverse provide an incredibly rich user-experience
strategically important Dar Es Salaam region, business while also expanding our contribution with access to many exciting products
the main economic hub in the country, to financial inclusion. and solutions.

1. According to TCRA report for the quarter to March 2023. Additionally, on page 47 of TCRA report, Vodacom was
the leading mobile network operator in terms of quality of service with a score of 96.83%, a 3.24pp lead gap.
2. Combined 3G and 4G data users per Facebook Analytics reports extracted in April 2022 and April 2023.

“We accelerated our

‘Tech for Good’ initiatives to
provide solutions to key
societal challenges and
meaningfully contributed to
reducing the digital divide in
Tanzania. Pleasingly, we also
reported a significant year-
on-year improvement in our
financial performance”.

09
Managing Director’s review continued

Relentlessly pursue Extract wholesale value

Our strategic enablers
fixed There remains work to be done for us to fully
realise the opportunities to monetise our Our pleasing performance on these
Our fixed business has performed satisfactorily, strategic ambitions is underpinned by our
assets in network, fibre, cloud and data centres.
with customers growing 68% in the year as we three key enablers: ensuring technology
We are continuing to identify partnership
continued to expand connectivity and leadership in network and IT, investing in
opportunities through joint ventures or special
communications solutions to businesses and retaining and developing a high
purpose vehicles, focusing on our fibre and
residential customers. After successfully performing team, and a relentless focus
tower infrastructure. We have successfully
launching the country’s first-ever 5G network on enhancing the customer experience.
on-boarded some new customers for our
in September 2022, and acquiring significant
recently modernised data centres, and are
blocks of low and mid-band spectrum in • This
 year, we invested TZS156.0 billion
looking to expand and attract large global
October 2022, we have expanded our fixed (14.5% of revenue) in network and IT
hosting companies that are seeking a foothold
wireless footprint in all the major cities. Our infrastructure, expanding our network
in Tanzania and Africa. Despite a muted
biggest use-case for 5G is in business-to- coverage and capacity, accelerating our
performance, I remain optimistic about
business, focusing on small to medium 4G roll-out and introducing 5G in
realising the potential from our wholesale
enterprises. Looking ahead, we anticipate priority areas, and further modernising
pillar in the new financial year.
strong growth in this segment off the back of the network to enhance cybersecurity.
a very pleasing performance in the second half
of this year. We also see great potential for Leveraging our brand • We have continued to prioritise the
learning and development of our
growth in fixed wireless to the home, where positioning employees, building the skills and
we are making positive inroads.
We have consolidated our strong brand capabilities needed for a future-fit
position and maintained our leading position in digital tech company, and instilling an
Innovate and lead headline NPS, NPS for combined network inclusive employee culture that values
Enterprise performance and overall customer care NPS. agility and innovation. While more work
An important contributor to the strength of the remains to be done on this front, it is
Building off our strong base as the leading
Vodacom brand is the widespread appreciation particularly pleasing to have achieved
provider of communications and data services
of the work the Company is doing to deliver on 44% representation of women in the
to the enterprise market in the country, we will
its purpose – to ‘connect for a better future’. leadership cohort.
seek to deepen our capabilities beyond mobile
We will keep working on enhancing ‘our share
connectivity to deliver advanced services in • It is worth mentioning that this year
of hearts’ and enriching our brand equity.
areas such as cloud hosting, security, and IoT, we received a number of accolades, in
as well as expanding into providing digital appreciation of our performance and
solutions to the country’s priority sectors of achievements in various service
agriculture, education and health. We see related indicators, evaluated by
valuable potential to scale up and customers and other stakeholders.
commercialise our IoT solutions, harnessing We maintained our leadership in terms
Vodafone’s recognised leadership in this area of the customer experience –
and building on our strong self-built fibre exemplified by our strong NPS scores –
footprint in the metropolitan areas, as well as and introduced further innovations to
leveraging off leased national long-distance enhance our digi-care channels and
assets. We recently finalised deployment of a automate our processes. This makes it
new IoT platform, making us the first Tanzanian easier for all customer-facing staff to
mobile network operator to have a locally make informed customer-related
available end-to-end IoT stack with all data decisions, as well as empowering
stored locally, offering exciting opportunities customers to increasingly perform
such as metering for utilities, and asset tasks on their own. We are very
tracking in mining and logistics. We made great intentional about making our services
progress this year in registering farmers in our easy to use and more transparent,
M-Kulima agricultural initiative in partnership as we believe these are essential
with the ministry of agriculture. More than components of a positive customer
3 million small-scale farmers are now experience.
registered on our platform, offering various
innovative solutions digitising the agriculture
value chain. We also have several other
products in the pipeline including solutions for
the health sector and fast-moving consumer
goods (FMCG) industries.

10 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Responding to a maintaining a laser sharp focus on attracting,

developing and retaining talent. With data
network infrastructure to address evolving
customer expectations and needs. Supported
dynamic operating scientists in high demand, and with new digital by our business partners and resources across
the wider Vodacom Group, we will continue to
skills needed in fin-tech and other digital areas,
context it is essential that we create an environment leverage our system of advantage powered by
that is fit for purpose, and recognises the our customer value management (CVM)
Our strategy has been designed to ensure that systems.
different mind-set needed to appeal to
the Company is well positioned to manage the
younger current and prospective employees. It is our commitment to continue delivering on
highly demanding challenges, and seize the
potentially rewarding opportunities, associated Recently, we have begun to see investors our social contract directly and through
with a very dynamic operating environment. putting increased pressure on companies’ ESG partnerships, including driving digital and
performance and disclosure. Fortunately – as financial inclusion. This is in line with our
In a highly regulated industry, it is important to purpose of connecting Tanzanians to a better
have regulatory and policy predictability. As I believe this report demonstrates – Vodacom
future by providing technological solutions to
our recent experience has shown, policy Tanzania has a strong track record of using its
social challenges.
interventions can have a profound impact on resources, technology and reach, to deliver on
our performance. We have been encouraged its purpose and promote digital inclusion and Our leadership team will remain focused on
by recent levels of dialogue with government, innovation in an environmentally and socially taking proactive actions to mitigate potential
the shared desire to stimulate investment in responsible manner. We will continue to impacts on our business performance from the
the country, and the visible positive impact of expand on our reports of this nature to ensure wide ranging effects of the war in Ukraine.
our collaborative partnerships in education, we address the public demand for information.
health and agriculture. In seeking sustainable
and mutually beneficial initiatives, it is critical
In responding to all of these challenges, we My appreciation
need to make significant new investments in
that we continue to engage constructively with At the end of my first six months at the helm of
people, systems and technology. With the
government to keep abreast of the policy Vodacom Tanzania, I would like to express my
need to deliver a visible return on the capital
priorities, build internal capability to anticipate sincere appreciation to the Board for entrusting
and respond to regulatory developments, and invested, and in the context of very low tariffs
me with this responsibility, and to all my
where possible to seek better alignment in and stiff competition; to succeed, we need to
colleagues on the executive team, the staff
terms of approach. continue to excel in the execution of our
across the company, and our shareholders and
strategy, supported by a committed and other stakeholders, for their contribution in
From a market landscape perspective, we engaged team. helping the Company to continue to positively
operate in a highly competitive market, with change lives through technology.
aggressive price competition from traditional Looking ahead, we will continue with our
MNOs, as well as increasing competition from commercial execution momentum and focus
non-traditional sources associated with the on managing our expenses to improve returns
significant speed of digital disruption. This new to our shareholders. At Vodacom, customer
competition – characterised for example by satisfaction is at the forefront of our strategic
the entry of banks into fin-tech – requires us to priorities. We are committed to further improve Philip Besiimire
continuously evolve and ensure our strategy customer experience through innovative and Managing Director
remains relevant while at the same time simplified products and investments in the 13 July 2023

11
Our products
and services
We have over 16.7 million active individual customers using our various products and services.

Consumer products and

M-Pesa Enterprise
digital services

Voice Deposits and withdrawals Mobility solutions

z Mobile Through over 125 000 agents and z Voice
bank transfers z Small medium enterprises
Data packages
Person-to-person transfers z Data
z Mobile broadband
z Mobile internet In country and international money z Internet of Things (Machine to
z Fixed transfers (IMT) Machine platform)
z Reverse Charge services
Messaging Self-Care z Bulk messaging
z SIM manager
z SMS and social media applications z M-Pesa Super-App
z Value Added Services (Closed user
Value added services Electronic payments group and Ring back tone)

z Media and entertainment (News z Virtual M-Pesa Visa card Fixed and wholesale solutions
and updates, Video and Music z Merchants (Lipa kwa Simu)
z Internet services
streaming, Gaming & Trivia) z Consumer to Business ‘C2B’
z Inter-branch capacity
z Education and advertisement z Business to Consumer ‘B2C’
z Hosting/co-location
(Silabu and SmartBango) z Business to Business ‘B2B’
z Cloud solutions
z Self-Care (My Vodacom app,
Website and Airtime Advance) Financial services z SIP services
z Digital solutions including
z Health (Afyacall and Elimika) z M-Pesa overdraft ‘Songesha’ M-Kulima and Connected schools
z Transport and Market place z Savings and loans (M-Pawa,
(Paisha) X-Pawa, M-Godi and Halal Pesa*)
z Group savings (M-Koba and
Customer Care
Changisha)
z Call centre z Agent Term Loans
z Service-desks z Insurance services
z Vodacom shops
z Self-care (My Vodacom app, USSD
code, M-Pesa app)
z DigiCare (customer support
through social media, website,
WhatsApp and a Live Chat app)
z Customer alerts (flash messages) * Halal Pesa savings account that abide to
Sharia law.
z Inclusive care and priority desks

12 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Our investment case

Vodacom Tanzania is a leading mobile network The opportunities for growth lie in growing our lead in
operator (MNO) in Tanzania with a strong purpose- mobile, expanding and scaling our new services in
led business model and a compelling track-record M-Pesa, and becoming the digital partner of choice in the
of effective management and quality execution in enterprise space. We are continuing to develop innovative
delivering on our strategy. Operating in a dynamic products and services, including in areas such as Internet
and rapidly digitising economy, we see exciting of Things (IoT) and fixed connectivity, building on our
opportunities to generate sustained revenue well-established differentiator as a leading global brand.
growth over the medium and long-term, while We are committed to delivering on our purpose –
making a substantial contribution to the country’s connecting for a better future – through the responsible
socio-economic development, as the country’s provision of improved voice and data connectivity, and
only publicly listed MNO. enhanced access to more inclusive digital services.

We have identified the following drivers

supporting our investment case:

z A proven strategic resilience supported by our diversified

transformative revenue streams.
z Tanzania has a young, growing population with significant scope for
further digital adoption, in both connectivity and the uptake of
mobile financial services.
z Tanzania has a relatively strong and stable GDP growth, which
creates demand for efficient supporting infrastructures including
connectivity and mobile financial services.
z We are the leading mobile operator in Tanzania, with over 90% voice
population coverage, and recognised as the preferred service
provider with a strong purpose-led brand and the largest mobile
money network.
z With the best data network across the country, and 5.3 million
smartphone users, a 60.3% penetration to data users, we are best
placed to benefit from increasing smartphone penetration and
mobile data uptake.
z We have significant opportunities to continue our leadership in the
provision of mobile financial services by further expanding our
M-Pesa ecosystem through innovative products and by providing
highly demanded technological solutions to the community.
z Our investments in artificial intelligence (AI), machine learning and
customer value management (CVM) systems positions us at the
leading operator in providing customized offers that grow revenue
and reduce the impact of price competition.
z We believe that market consolidation – achieved through merger-
integration and/or the failure of unprofitable operators – is inevitable
over the long-term; we have strong cash flow generation and a
robust balance sheet to support further strategic investments.
z We are part of the Vodafone Group, globally recognised for their
leadership in mobile financial services and innovative digital services
in emerging markets.
z Our continued investment in infrastructure supports delivery of our
business objectives and our purpose including social contract.

13
Our business model
What we do
We secure access to spectrum, invest in mobile and fixed networks and information technology (IT),
develop and distribute a wide range of products and services tailored to our market segments, and offer
a broad range of financial services through our M-Pesa ecosystem. Coupled with our excellent customer
care and brand programme, these activities enable us to ensure revenue growth and high levels of cash
generation, which is used to reinvest in the resources and relationships that we rely on to deliver on our
purpose: connecting for a better future.

Our value chain activities

Spectrum, network, and IT infrastructure Customer service
Most of our communication services depend ultimately on having Providing the best customer experience, and
access to spectrum. We strive to secure this access at a instilling a ‘customer first’ attitude, is an
competitive price through auctions, proactive engagement with important source of market differentiation for
government and the regulator, and/or through partnerships with, Vodacom, and a key strategic priority. We listen
or acquisitions of, existing spectrum rights-holders. Over the past to our customers, constantly seeking to deepen
seven years, we have invested over TZS1.0 trillion in expanding and our understanding of their needs to provide
upgrading our mobile network and the supporting IT infrastructure. targeted product and service offerings. Our
We have the largest nationwide data network in the country, with ambition is to provide a seamless, personalised,
4G coverage across the country and 5G in strategic locations one channel, digital customer experience, with
across the country, supported by our activities to continuously exceptional customer service being our
enhance our customers’ experience with our network. primary goal.

Procurement activities Sales and distribution

We manage a significant supplier landscape with total We use various sales and distribution channels
procurement spend in FY2023 of TZS690.9 billion. We are able including wholesale distributors, retailers,
to leverage off the global purchasing power and responsible franchise stores, direct sales partners, street
procurement practices of the Vodafone Procurement Company vendors and informal resellers. We have the
(‘VPC’), enabling the purchase of responsibly manufactured largest retail footprint in Tanzania, with 461
network equipment, handsets and other services on favourable nationwide retail points, more than 25 000
terms. This year, 22.3 % of purchases (TZS153.8 billion) were freelance distributors and 125 000 active
processed through VPC. We balance the benefits of global M-Pesa agents. This retail network is further
purchasing with our commitment to promoting economic supported by direct sales forces, independent
opportunities in Tanzania by promoting local procurement when dealers and agents, franchises, informal
feasible and appropriate. This year, more than 75% of total distribution channels and a nationwide network
procurement spend (amounting to TZS537.1 billion) was on of wholesale channels.
suppliers in Tanzania.
Managing our brand and reputation
Product and service development We build a brand with purpose, developing and
We are continually developing new products, services, and pricing maintaining a reputation as a company that is
models, informed by our segmented customer approach that leading Tanzania into the digital age and
caters for each customer’s needs, wants and behaviours in both improve lives through digital technology.
the consumer and enterprise markets. We place a strong emphasis We communicate our service offerings and
on protecting customer privacy, enhancing cybersecurity and maintain our strong brand presence through
mitigating the overall risk of data theft or loss. We have been our marketing and brand strategy, with iconic
implementing the ‘agile’ methodology across various departments Vodacom brand being an important driver of
to ensure we respond faster in a constantly changing environment. purchasing decisions for consumers and
We have been developing innovative products and services in enterprise customers. External reputation
various new streams, including IoT and financial and digital surveys regularly show Vodacom as one of the
services. We are deepening our use of machine learning and most recognised and trusted brands in Tanzania,
customer value management (CVM) platforms to deliver with our consistent NPS leadership and various
personalised offers to our customers, popularly known as industrial awards attesting to our brand
‘Just 4 You’ offers. strength.

14 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

How we create value

We generate profit by investing in our mobile and fixed networks to attract and retain consumer
and enterprise customers with compelling voice, data, messaging, financial and digital products,
and related services.
Our competitive differentiation lies in the reach and quality of our network and infrastructure, our
strong distribution channels, the innovation and range of our products and services, the quality of
our relationships with key stakeholders, our proven ability to manage costs, and the strength of the
globally recognised Vodacom brand.

Our revenues
Most of our revenue comes through selling mobile telecommunication and digital services to ‘pre-paid’ customers, as well as fee income from
providing mobile financial services to consumers and merchants. The balance of our revenue is generated from various other products and services
that we sell across both our consumer and enterprise customer bases. These include digital and financial services, fixed and IoT, all underpinned by
our Big Data, loyalty and CVM capabilities. We focus investment across our key strategic drivers – data both mobile and fixed, M-Pesa, digital and value
added services (VAS), and enterprise – all of which are expected to yield strong growth, significantly offsetting the decline of our more mature and
traditional revenue streams, such as mobile voice and messaging.

Service revenue FY23 FY22

Key revenue differentiators
Voice 26.9% 30.0%
z Globally recognized and established brand with a strong reputation
across Tanzania. Data 26.0% 21.3%
z Leading mobile finance service offering (M-Pesa), supported by M-Pesa 33.9% 34.5%
a world-class payment platform and highly innovative solutions.
Fixed 1.8% 1.6%
z Revenue diversification with a growing share of new revenue
streams (in mobile and fixed data, M-Pesa and digital). Other 11.4% 12.6%
z Superior network with extensive voice and data coverage,
and state of the art technology.
M-Pesa revenue FY23 FY22
z Largest retail footprint in Tanzania’s telecoms sector.
z Leading provider of fixed and mobile communications services New services 27.4% 13.0%
to Tanzania’s large-enterprise market.
Traditional services 72.6% 87.0%
z Demonstrated ability to harness machine learning and CVM
platforms to develop personalised offers that better suit customer
needs and behaviour.
z Ability to leverage off our relationship with Vodacom and Vodafone
to drive global best practice.
z Our best-in-class customer service support systems.

Our costs Key cost differentiators

We have a good track record of optimising expenses and converting z Proven track record of running effective cost saving initiatives.
revenue into cash flow. This track record is supported by a culture z Ability to optimise costs through efficient
of cost containment across the business through our cost use of Robotic Process Automation (RPA), investment in big
transformation initiatives. We have delivered considerable cost data, and artificial intelligence (AI).
savings in recent years by enhancing efficiencies in network z Leveraging global best practice on cost optimisation through
operating expenditure, renegotiating contracts, optimising publicity our relationship with Vodacom and Vodafone groups.
spend, and delivering a leaner, more efficient business through z Continuously upgrading and modernising our network to
organisational restructuring. Our resulting strong cash flow helps us deliver improvements in operating costs through more
to maintain a high level of capital re-investment, primarily in our efficient technologies and network innovation. Benefitting
network infrastructure, to maintain our strong competitive position from the purchasing power of the Vodafone Procurement
in network coverage, call quality and strong data speed. We continue Company (‘VPC’).
to allocate investments to directly support commercial strategies, z Robust governance processes for approving new or revised
and projects that enhance our customers’ experience. products and investments.

15
 How we sustain value
Investing in the resources and relationships impacting on value.

Critical inputs (2023)1 Our activities to sustain value

People, culture � 581 employees (2022: 560) z Competitive remuneration and personal
HC
and governance � Strong Board and robust governance systems development opportunities
Human and � Experienced executive team z TZS344.2 million invested in employee training
IC intellectual capital � Agile, performance-based, purpose-led culture and leadership development, including upskilling
� Service providers delivering efficiently and employees for digital transformation
effectively on agreed terms z Agile business processes implemented across
business units
z Various initiatives to further strengthen our
existing reputation as a quality employer
z Regular engagement with employees to foster strong
culture and ensure consistent delivery on targets
z Sustained focus on employee, contractor and
supplier safety

Quality � 16.7 million customers (up 8.9%) z  ontinued investment in ensuring network and
C
SRC
relationships � Constructive engagement with regulators, IT quality, strong positive customer experience,
with key informed by mutual trust and segmented products and services
stakeholders � Sustained levels of investor confidence z Regular and frank engagement with regulators,
Social and � Positive supplier relationships pursuing full compliance
relationship capital � Trusted brand and reputation z Continuing to participate actively in
government’s rural coverage agenda
z Regular investor communication
z Delivering societal value through connectivity
and digital services in areas such as inclusive
finance, education, health and agriculture
z Inclusive customer care initiatives
z Credible governance processes
z Corporate social responsibility programs

Network and IT � 3 447 base stations (up 1.8%) z  aintaining our network and IT leadership
M
MC
infrastructure � 2 338 km of self-built fibre (up 13.8%) through targeted investment
Manufactured � TZS156.0 investment in network (down 10.3%) z Upgrading and modernising our network
capital � US$63.2 million investment in spectrum and IT systems
z Further enhancing our IT and related systems
and processes to support machine learning
analytics and cyber security
z Acquired additional four blocks of low and mid
band spectrum, a critical resource for our
network expansion plans
z Launch of 5G technology

Financial � TZS1 724 billion market capitalisation (FY 2022: z Diversifying revenue streams
FC
capital TZS1 724 billion) z Employing smart capex deployments
� TZ54.9 billion free cash flow (over 200% increase) z Maintaining strong corporate governance
structures and finance team
z Realising benefits of purchasing power on network
equipment, devices and opex through VPC
z Leading in application of AI and CVM to increase
revenues and optimise costs

Natural resources � Radio spectrum: 700, 900, 1 800, 2 100, z S trong focus on energy efficiency and GHG
NC 2 300MHz bands for mobile, and 2 300 and mitigation across our network
Natural capital
3 500 for fixed 4G & 5G z Recycling handsets and network equipment
� 82.4GWh electricity (up 19.8%) z Identifying opportunities to use IoT to promote
� 9 020.5 kilolitres of fuel (up 46.4%) resource efficiency, for example through smart
� 31 114.6 kilolitres of water (up 15.7%) metering and vehicle tracking
� 31 963.2 tons of refrigerants and fire z Dematerialising by using smaller SIM cards
suppressants used (GHG contributor) (up 1.0%) and encouraging electronic recharges
� Plastics, paper and related inputs

1. Data for all inputs as at 31 March 2023.

16 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Value Value Value

created eroded sustained

Results of our activities (2023) Trade-offs

Maintained employee motivation, skills, and diversity through: Investing in attracting, retaining, and developing talent in the
T ZS65.2 billion in wages and benefits highly competitive digital space is one of the most significant
4  3.8% female representation in senior management costs to our business. While this impacts short-term financial
Sustained evidence of staff satisfaction: capital, it is an essential investment in generating longer-term
T op Employer award for seven consecutive years returns in all capital stocks. Our commitment to driving a digital
9 3% engagement index score in Spirit Beat survey company, and effectively harnessing the role of artificial
R
 easonable staff turnover at 6% intelligence (AI), may result in pressure on some existing
Increased uptake of Employee Assistance Program (EAP) support for staff traditional job functions (depleting human and social capital), but
also raises opportunities in new roles. Balancing efficiency gains
Health and safety performance
(improved financial capital) against the human and social costs of
N
 o work-related fatalities for eleven consecutive years
job cuts (human and social capital) is a persistent potential
C
 ommunity safety in partnership with National Traffic Police unit
trade-off.

Positive customer relations Maintaining quality relationships across all stakeholders may
L eader in consumer net promoter score (NPS) with 20-point gap require trade-offs in certain relationships as we balance
over nearest competitor competing stakeholders’ interests. For example, investing in
Various awards received for customer service biometric-based SIM Card registration devices required significant
Further progress in developing smarter personalised offerings short- and medium-term financial capital inputs, but enables us
following AI deployment to meet regulatory requirements, maintain customers, and
Our inclusive care initiatives aimed at serving people with special generate positive returns over the longer-term.
needs have benefitted over 1 300 customers
Generally positive government relations, supported for example by:
TZS1.5 trillion total cash contribution to public finances over last
three years
Enabling financial inclusion to more than 8.2 million M-Pesa
customers
Building
 302 Universal Communications Access Fund sites
in the past eleven years
V
 arious social investment initiatives

Positive results in most areas Building and maintaining our infrastructure requires significant
TZS156.0 billion CAPEX investment to address network and IT plans financial capital, and appropriate levels of human and intellectual
5
 9 new 2G sites capital, as well as certain natural capital inputs and outcomes. An
2 28 new 3G sites extensive network is a key basis for bridging the digital divide and
3 90 new 4G sites sharing the substantial social benefits of digital connectivity. As a
2 31 new 5G sites purpose-led organisation we have committed to reducing the
Network resilience supporting 26.0% growth in data carried in our environmental impacts associated with our network
network, with close to 70% carried in 4G network infrastructure and services. An important trade-off is balancing
1
 6 points lead gap on Combined network performance NPS the customer and regulatory calls to reduce prices and enhance
R
 ecognised as a leading company in Vodafone Group for quality, with the need to generate the financial capital needed for
cybersecurity
network investment.

26.5% increase in operating profit to TZS81.5 billion There is an important trade-off between the short-term interests
TZS63.3 billion operating Free cash flow of certain investors and other interest groups that seek to
Service revenue up 10.2% to TZS1 053.8 billion maximise short-term gains in financial capital, with our
EBITDA up 9.7% to TZS329.4 billion longer-term growth objectives that require investment of financial
Generated TZS44.6 billion profit after tax as opposed to a capital. Finding the right balance between the short-term and
loss in prior year long-term – and in different stakeholder interests – is a key focus
in our strategic decision-making.

Estimated 32 789 tonnes CO2 emissions from electricity, diesel Using and impacting natural resources – which sometimes
and refrigerants usage (scope 1&2) (down 10.2%) negatively affects human and social capital – is a key trade-off for
7
 59.4 tonnes of total GWP refrigerants and fire suppressants generating value across other capitals. As a purpose-led company
replenished (down 28.0%) we are committed to minimizing the environmental impacts of
Proportionate increase in energy consumption relative to increase our operations and activities, and to realizing the significant
in network elements including new technologies. potential for digital products and services to deliver positive
P
 revented over 29 tons of plastic waste, and over 172 tons of environmental outcomes.
paper usage

17
Our operating
context
The sectors we operate in – telecoms, digital, and financial services in an emerging market – poses a dynamic
operating context that presents both demanding challenges, as well as potentially rewarding commercial
opportunities for innovation and growth.
We have identified four broad trends that have a material impact on our business, all broadly similar to those identified in recent previous years.
By ensuring effective execution of our strategic commitments, we believe that the Company is well positioned to manage the risks and realise the
opportunities associated with each of these trends.

An uncertain global macro-economic environment

impacting a post-COVID recovery
Tanzania’s economy has shown good signs of economic recovery following the impact of the
pandemic, with tourism, mining and other services all benefiting from the lifting of global pandemic-
related restrictions. This recovery has been impacted however by global and local headwinds, including
the war in Ukraine, a volatile global macro-economic environment, and a shortfall in rainfall negatively
impacting local electricity production and agriculture.

The IMF has projected economic growth for the country of 5.2% in 2023, with inflation expected to
surpass the Bank of Tanzania’s target and reach around 5.3% by year-end despite price subsidies on
fuel and fertilizer. The current account deficit is projected to remain elevated in 2023 amid the
uncertain global environment. In the medium term, real GDP growth is projected to rebound to around
7%, inflation to return to less than 5%, and the current account deficit to moderate as the global
shocks subside and the authorities’ reforms start to pay off1.

The war in Ukraine has impacted global food and energy prices, heightened inflationary pressures, and
contributed to enhanced market uncertainty and volatility, all of which is constraining consumer spend
and general investor confidence.

Our response

z In the context of an uncertain global macro-economic outlook, we anticipate that consumer spend
in Tanzania will remain under pressure for the immediate future, further amplifying an already
intense price-based competitive environment. Heightened price-based competition and subdued
consumer spending, highlights the value of providing segmented personalised offers through our
customer value management systems CVM), relevant to our customers’ lifestyle and spend,
informed by big data analytics and supported by an effective cost containment programme.
z We strive to contribute towards economic growth and development stimulation, and mitigate
some of the underlying structural challenges by delivering on our core purpose of ‘connecting for
a better future’, through our activities in three broad areas: creating a digital society, driving
inclusion for all, and protecting our planet (see page 40). In our enterprise business we are
exploring exciting commercial opportunities to deliver strong social value in critical areas such as
health, education, and sustainable agriculture. By focusing on our social contract and core
purpose, the Company will continue to make a meaningful contribution to the UN SDGs and help
to enhance the underlying social and environmental conditions critical to economic
development and business success.

1. IMF Staff-Level Agreement on First Review of the Extended Credit Facility (February 2023).

18 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

A dynamic regulatory and policy environment

Mobile network operators tend to face high levels of regulatory scrutiny in almost all markets. This is unsurprising given the scale of the
contribution of the telecoms sector to a country’s economic growth and development. In Tanzania, our activities have been significantly impacted
in the recent past by various policy developments from our two main regulators – the Tanzania Communications Regulatory Authority (TCRA) for
GSM services, and the Bank of Tanzania (BoT) covering our digital financial services – with significant impacts associated with customer and SIM
registration requirements and levies on mobile money transfers and withdrawals.

We have recently seen a much more favourable regulatory environment and improved levels of dialogue. The most significant recent regulatory
and policy developments are listed below:

z SIM Card Registration: On 7 February 2020, new SIM Regulations were The Finance Act also re-defined the scope of the levy, to also
published, mandating biometric registration only and restricting the include withdrawal and transfers through banks which were
number of SIMs held per customer. Subsequently, on 1 July 2020, the earlier excluded. The levy, which was previously chargeable on
Tanzania Communication Regulatory Authority (TCRA) issued a public mobile transactions only, also became applicable to transfers
release that required customers who biometrically registered more than between mobile accounts, between bank accounts and across
one SIM card per service provider to verify their SIM cards ownership mobile and bank accounts. For withdrawals, the levy was
through their mobile phones. Furthermore, the TCRA and mobile network extended to capture withdrawals from automated teller
operators implemented an approval process that allowed customers to machines (ATM).
request for additional SIM cards by visiting service providers’ retail outlets
or an automated process through Unstructured Supplementary Service 1 October 2022: Through a special supplement to the National
Data (USSD). Customers are allowed to have more than one SIM card if Payment System (Electronic Money Transactions levy)
(Amendment Regulations) the maximum levy chargeable was
they follow the correct approval process. On 13 February 2023, Vodacom
set at TZS2 000, equivalent to 20% of the levy charged at
Tanzania barred 238 000 SIM cards that did not complete the multiple-
introduction. This decision further reduced end-user charges,
SIMs declaration process as per TCRA’s directives. Subsequent to barring,
and has meaningfully revived and accelerated our contribution
TCRA again permitted the usage of *106# and 100 to allow the barred
to the financial inclusion agenda, through the use of M-Pesa
customers to do verification through this process. As a result, over 30 000
services.
of the barred customers have successfully verified their SIM cards and
reactivated. We continue with efforts to recover barred customers. z Spectrum Auction: On 15 August 2022, the TCRA published
z Levies on airtime and mobile money transfers and withdrawals: a public notice inviting bids for licensing spectrum blocks
On 30 June 2021, the President approved the Finance Act, which included intended for international mobile telecommunication services
the amendments to the National Payment System Act (NPS Act) and through auction, which was held on 11 October 2022. The
Electronic & Postal and Communication Act (EPOCA) – introducing levies following spectrum frequencies were auctioned and assigned:
on mobile money transfer transactions and airtime recharges. For mobile one block of 2 x 10MHz in the 700MHz band; two blocks of
money transfer and withdrawal transactions, a transaction value 1 x 35MHz in the 2 300MHz band; three blocks of 2 x 15MHz
dependent levy of between TZS10 and TZS10 000 was implemented in the 2 600MHz band and one block of 1 x 20MHz in the
from 15 July 2021. Following our engagements and due consideration by 2 600MHz band (TDD), and four blocks of 1 x 40MHz in the
the government, the following amendments were implemented: 3 500MHz band (TDD). We participated and secured winning
3 September 2021: An initial 30% levy reduction, to a maximum levy bids for the one block of 700MHz, the two blocks of 2 300MHz
of TZS7 000. and the one block of 2 600MHz (TDD) for a total bid price of
US$63.2 million. The spectrum acquired is a critical strategic
1 July 2022: An additional 43% reduction to the maximum levy band resource for delivering value to shareholders and fulfilling our
was passed through the Finance Act 2022, marking a cumulative 60% purpose through our network expansion and widened product
reduction since the levy’s introduction. This reduction set the maximum portfolio objectives.
levy chargeable at TZS4 000.

Our response

z We continuously monitor changes to regulations and licencing z We have a robust governance processes and a strong culture of
requirements and engage regularly with the TCRA and other regulatory compliance across the company, administered through our dedicated
authorities to ensure compliance with all relevant regulatory Risk and Compliance department, which is charged with responsibility
requirements. for monitoring, evaluating and managing risks across the company.
z We have invested significantly in compliance awareness training across z We maintain proactive relations with government and relevant
the company and in our distribution channel to ensure that our regulatory bodies and tax authorities, informed by a shared
business units are sensitized, including through training programs such understanding of the need for inclusive economic development and
as the ‘Doing What is Right’ Programme on legislative and regulatory the important contribution of a profitable business sector. These
requirements, supported by an annual self-assessment. More than 93% engagements are undertaken individually, and through the Tanzania
of employees completed their training on DWR. Mobile Network Operators’ Association (TAMNOA).

19
Our operating context continued

Seizing commercial opportunities

A highly competitive market
in bridging the digital divide
Vodacom Tanzania operates in one of the most Tanzania offers significant opportunities for innovation and growth
competitive telecommunications markets in Africa, in developing and rolling out enhanced connectivity and new
with six mobile network operators (MNOs), as well as digital services. With a young and growing population, and
heightened competition from new sources, such as comparatively low levels of internet and smartphone penetration
the growing entry of banks into digital financial rate, there is huge scope for the Company to play a meaningful
services. Our three largest MNO competitors are role in promoting digital inclusion and bridging the digital divide.
continuing to drive very aggressive pricing, leading This can be achieved by facilitating access to essential services,
to one of the lowest effective voice and data prices including specifically by driving digitisation opportunities in
in Africa, which places sustained pressure on already finance, education, agriculture, e-commerce, and health.
tight operating margins.
For these opportunities to be fully realised, necessary investment
These low prices constrain our ability to drive our is required in both mobile and fixed data networks. For this to
ambitious revenue growth by undermining our happen, it is critical that data prices are stable and at a level that
capacity to make some of the necessary long-term justifies the investment required in network infrastructure and
investments in the highly capital-intensive digital products and services. Equally, we need also to address
infrastructure needed to drive a faster ‘digital challenges relating to the accessibility of digital services,
dividend’ in the country. particularly cost of smart devices, access to digital skills, and
levels of consumer awareness especially in rural areas.
Recognising the critical importance of facilitating digital inclusion
Our response and supporting long-term infrastructure investment, the
government has also made various valuable interventions to
z The strengthened competitive environment, support extension and availability of communication services.
sometimes from unexpected sources, highlights
the importance of remaining agile, in identifying
and realising opportunities for innovation. We Our response
continuously monitor existing and new competitors,
and are exploring opportunities for innovative z To realise the valuable commercial opportunities for digital growth
partnerships, including as part of a potential in Tanzania, we have overtly positioned the Company as a leading
consolidation within the sector. digital company that empowers a connected society by helping
z To compete effectively and deliver a differentiated to close the digital divide in Africa’s key economic sectors.
customer experience, we maintain a strong focus on z We are doing so by developing industry-specific digital products
the strength and reach of our network, the quality of and services – in fields such as education, healthcare, agriculture,
our customer care, the pricing and nature of our and financial services, and using new technologies such as IoT –
services and devices, backed by our strong brand to realise fresh opportunities for revenue growth, as well as
reputation. These are areas in which we have harnessing innovation to drive positive social and environmental
demonstrated competitive performance, as change.
evidenced for example by our sustained leadership z We continue to invest significantly in the networks and technology
in customer service NPS and network speed. of the future, fostering a company culture that attracts and
z To increase our relevance to customers, we continue develops the best digital talent, and redefining our approaches to
enhancing our personalised ‘Just for You’ offers, customer engagement.
providing customers with relevant services, z We actively participate in programs to support network roll out in
reflecting their usage behaviour through our strong the underserved areas in partnership with the government through
CVM and machine learning capabilities. the Universal Communications Service Access Fund (UCSAF).
z We are continuing to engage with the government z Whenever possible, we also invest in enablers such as our recent
through the regulator and other relevant stakeholders spectrum acquisition, as well as investment on the future-ready
on the importance of price stability to support human resources, to support our medium to long term
investments in this highly capital intensive industry. requirements.

20 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

21
Our key
relationships
Vodacom Tanzania’s ability to deliver long-term value
depends on the contribution and activities of a range of
different stakeholders, and on the quality of our
relationship with them. In the table below we briefly
outline those stakeholder groups who have a
substantive impact on our ability to create value; we
outline their contribution to value creation, our means Government and regulators
of engaging with them, and the stakeholders’ identified
priority interests relating to our business activities. Provide access to spectrum and operating licences,
the basis for creating value.
Means of engagement
z Participation in public forums.
z Engagement on draft regulations and bills.
z Engagement through industry bodies.
z Publication of policy engagement papers.
z Partnering on key programmes such as inclusive education,
inclusive growth in agriculture, and inclusive climate action.

Priority interests
z Ensuring spectrum is managed as a strategic resource.
z Regulatory compliance on issues such as customer
registration, mobile termination rates, service quality,
price, security and privacy, and safety, health and
environmental performance.
z Participating and promoting opportunities for economic
development.
z Contribution to the tax base.
z Industry development.
z Fair market development.
Customers

Provide the basis for revenue growth by purchasing

our products and services.
Investors and shareholders
Means of engagement
z Call centres, retail outlets and online. Provide the financial capital needed to sustain
z My Vodacom app, M-Pesa app, USSD code, self-help channels.
and grow.
z Weighted net promoter score (‘NPS’) feedback interviews and
focus groups. Means of engagement
z Social media interaction.
z Vodacom Tanzania website. z Investor interactions, including conferences and meetings.
z Annual and interim consolidated results.
Priority interests z Quarterly reports.
z Better value offerings. z Annual reports, preliminary announcement calls and AGM.
z Faster data networks and wider coverage. z Investor relations page in our website.
z Making it simpler and quicker to deal with us.
z Converged solutions for business customers. Priority interests
z Privacy of information. z Responsible practices to manage risks and opportunities
z Feedback on service-related issues. and ensure financial growth.
z Safety of M-Pesa transactions. z Sound corporate governance practices.
z Customised customer service. z Transparent executive remuneration.
z Managing the challenge of data-usage transparency. z Improved liquidity of shares.
z Readily available services. z Stable dividend policy.

22 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Employees Communities

Provide the skills and inputs needed to realise Provide a social licence to operate and strengthen
our vision. the socioeconomic context.
Means of engagement Means of engagement
z Internal website, ‘Workplace’. z Public participation where new base stations are needed.
z Newsletters, internal magazine, and electronic z Vodacom Tanzania corporate social responsibility initiatives
communication. in partnership with communities.
z Employee hotline/Speak Up line. z Social media pages.
z Engage App.
z Leadership road shows. Priority interests
z Engagement surveys. z Access to our communication services and services such
z Online training. as finance, health, and education.
z Executives’ discussions – ‘fireside chat’. z Free-to-use social media, health, education, and job sites.
z Health and welfare consultations as needed. z Responsible expansion of infrastructure.
z Responsible business practices.
Priority interests z Business existence continuity.
z Opportunities for personal and career development.
z Competitive remuneration.
z Knowledge sharing across the Group.
z Building the coaching capability of leaders.
z Better understanding of reward structures.
z Health and safety. Business partners
z Being heard.
z Safe working environment.
Custodians of our brand, and key to delivering the
best customer experience.
Means of engagement
Store, franchise and retail visits.
Suppliers z
z Management engagements.
z One-on-one business meetings.
z Training sessions on new products and services.
Affect our ability to provide products and services.
Priority interests
Means of engagement
z Fair treatment.
z Supplier forums. z Top management involvement with customers.
z Ongoing site visits. z Making it simpler and quicker to deal with us.
z Procurement processes (including tendering). z Being heard as partners.
z Audits.

Priority interests
z Timely payment and fair terms.
z Transparent and fair tender processes.
z Relevant health and safety standards, and environmental, Media
social and governance (ESG) expectations.
z A ‘fair’ share of the local purchases (local spend).
Have a potentially significant influence on other
stakeholders’ perceptions.
Means of engagement
z Face-to-face and telephonic engagement.
z Interviews with key executives.
z Media releases.
z Roundtables.
z Product launches.

Priority interests
z Being informed of key activities and offerings.
z Transparency on our performance.
z Evidence of responsible business performance.

23
Our material risks
and opportunities
Vodacom Tanzania PLC has a mature risk management enterprise risk management process supports the identification of
these risks. The risk appetite for each principal risk is reviewed and
framework that is aligned with Group requirements and
approved by the Board to enable informed risk-based decision-
guided by local regulatory risk management guidelines, making. The Board considers these risks when setting strategies,
under which our Risk Management Charter, as well as approving budgets, and monitoring progress against targets. Our
governance structures, are established. executive team regularly reviews our risk management processes to
better identify, assess, and monitor our material risks, ensuring that
We have a dedicated Risk and Compliance department responsible for we are responsive to the business environment dynamics.
managing our risk profile and mitigating potential impact. The department
has a role of ensuring business plans and priorities are implemented The Group’s risk heat map (Figure 1) sets out the top 10 principal risks
consciously of the potential risks. as identified through the risk management process; the heat map
depicts residual risk after considering mitigating risk factors. This is
Our material risks are identified through our Principal Risks Framework, supported by the risk and speed of impact report (Figure 2), reflecting
which provides the Executive Committee and Board with a robust the rate at which the Group would experience adverse impacts if the
assessment of the principal risks facing the Group. An embedded risk materialised.

Figure 1: Vodacom principal risks FY2023 Figure 2: Vodacom speed of impact FY2023
(impact versus likelihood)
Very high

2 1
2 1
High

4 3
High

8 6 8 5 4 3
Risk rating

5
Impact

Medium

9 7 6
9 7 10
Medium

10
Low
Low

Rare Possible Likely Highly likely >12 Months >6 <12 Months >6 Months

Likelihood Speed of impact

Slow (>12 months) Rapid (>6 <12 months)
External Internal
Very rapid (>6 months)

Risk
1 Cyber threats 6 Regulatory compliance
2 Taxation 7 M-Pesa platform
3 Technology resilience 8 Spectrum
4 Financial and economic 9 Third party management
conditions
5 Market disruption 10 Litigation

24 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Increased Decreased

The table below reviews the top 10 material risks as identified through
our risk management process, depicting the residual risks after
considering our mitigating risk factors.

(FY2022: 2)
1
Cyber threats
Risk trend Speed of impact
<6 months

Context
z An external cyber-attack, insider threat or supplier breach – malicious
or accidental – could result in service interruption and/or breach of
confidential data, with resulting negative impacts on our customer,
revenue and reputation and potential cost associated with fraud
and/or extortion.

Mitigating actions

z Strong security basics, including perimeter controls, infrastructure

(hygiene), protecting data leakage, preventing loss of availability,
controlling information between endpoints and the cloud.
z Cybersecurity policies and processes implemented, and cyber security
culture promoted.
z Cyber-privilege User Access Management, through Cyber-ark.
z Local cybersecurity monitoring and Cyber Intelligence Centre (CIC)
aggregates security monitoring.
z Vulnerability scanning and periodic penetration tests are performed.
z Implementation of log monitoring tools and discrepancies followed up.
z Control self-assessment: Over 10 000 control tests performed.
z Anonymization and pseudonymization of data projects are
implemented.
z End-point detection and response in place.

(FY2022: 4)
2
Taxation
Risk trend Speed of impact
<6 months

Context
z Changes in local or international tax rules, and/or challenges by the
tax authority, could expose us to liabilities.

Mitigating actions

z Systems in place to ensure efficient management of tax, ensuring

these stand up to any potential challenges by authorities.
z Active engagement with governments and tax authorities to ensure
good working relationships and help manage potential impacts of
legislative change.
z Expert tax advice sought as needed.
z Report publicly on tax issues.

25
Our material risks and opportunities continued

(FY2022: 5)
3 (FY2022: 1)
5
Technology resilience Market disruptions
Risk trend Speed of impact Risk trend Speed of impact
<6 months <6 months

Context Context
z A complete technology failure – in our network and IT z We face increasing competition from traditional and non-
infrastructure, IT platforms, or essential technology service traditional sources.
providers – resulting in a major impact on our customers, z Our ability to compete effectively depends on the capacity
revenues and reputation. and coverage of our network, the quality of our customers’
experience, and the pricing and nature of our services and
Mitigating actions devices.
z Proactively anticipating, and where necessary responding to,
z Implement technology resilience controls in line with
Vodafone’s Technology Resilience Policy (TRP). changing market conditions is essential to maintaining
z Conduct on-going Business Continuity Management (BCM)
revenue growth.
tests, and 24/7 IT and network monitoring. Mitigating actions
z Deploy security monitoring tools across our infrastructure.
z TRP plans are in place and reviewed annually. z Maintain competitor differentiation through our leadership in
the quality and speed of our network.
z Deliver a differentiated customer experience by continuously
reviewing the pricing and relevance of our products, services,
4 and devices, developing innovative propositions, and investing
 inancial and economic
F (FY2022: 7) in the quality of customer services, including through
advanced CVM capabilities.
conditions z Execute bundle rules and special offers regulations to stabilize
Risk trend Speed of impact market price aggression.
<6 months

Context
z The challenging macro-economic environment in Tanzania
(FY2022: 3)
6
could result in currency devaluation and an unstable Regulatory compliance
economy, placing pressure on consumer spending.
z Macro challenges associated with the war in Ukraine, currently Risk trend Speed of impact
driving increases in fuel and commodities prices, inflation, <6 months
foreign currency exchange volatility and supply chain
disruptions. Context
z Any breach of legal and regulatory requirements due to either
Mitigating actions not identifying requirements or inadequately assessing
current compliance requirements exposes Vodacom Tanzania
z Risk-averse interest rate, foreign exchange, and counterparty
to significant financial and reputational damage.
risk practices in place, aligned with Vodacom Group and the
cost containment programme. Mitigating actions
z Our cost containment programme ensures we have a robust
cost structure, capable of absorbing adverse indirect impacts z Continuous monitoring of changes to key laws, regulations,
from poor economic performance and/or changes to and licence requirements.
economic policies. z Ensure business units are sensitized, including through
training programmes such as the “Doing What is Right”
Programme on legislative and regulatory requirements.
z Annual self-assessment of the Compliance Matrix.
z Engage with regulators to seek clarity and sufficient time to
implement new requirements.

26 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Increased Decreased

7 (FY2022: 13)
9
M-Pesa platform (FY2022: 11)
Third-party management
Risk trend Speed of impact Risk trend Speed of impact
<6 months >12 months

Context Context
z Adverse financial regulation changes, failure of systems z Failure to manage Group’s third-parties and partners could
(including network failure) and processes could negatively have a reputational impact on the Group due to the third-party
impact operations, reputation and revenue of our M-Pesa actions that expose operations or customer data if not aligned
business. to Group’s processes.

Mitigating actions Mitigating actions

z Established a risk management and governance framework for z Robust Supply Chain Management (SCM) policy and
M-Pesa limited and introduced new risk management controls. procedures in place, enforced and monitored.
z Detective and preventive processes in place, such as the z Ensure that contracts agreed with all suppliers and partners,
maker-checker and fraud alert processes. comply with business continuity, confidentiality, privacy
z The Anti-Money Laundering team performs ‘Know Your and other requirements.
Customer’ compliance reviews to check compliance of the z Comprehensive due diligence process performed on new
newly registered agents and customers. partners during on-boarding process.
z Monitor agent activities to identify suspicious transactions. z Continue to ensure that service level agreements in place
z Check processed M-Pesa transactions against the approved and monitored.
transactions, to detect invalid and/or fictitious transactions.
z M-Pesa funds risk spread across seven banks in Tanzania,
including international banks.
z Established a mechanism for exchanging fraud information
(FY2022: 10)
10
with other MNOs for counter measures.
Litigation
Risk trend Speed of impact
<6 months

(FY2022: 10)
8 Context
Spectrum z An adverse outcome in any litigations could lead to financial
Risk trend Speed of impact loss, negative publicity and/or reputational damage.
6-12 months
Mitigating actions
Context z Proactive and regular engagement with the TCRA.
z Delays in obtaining additional spectrum, and/or unavailability
z Close monitoring of the progress of cases in arbitration/court,
of spectrum, would impede cost-effective expansion of managed by our external legal counsel.
Vodacom’s RAN, both for increasing capacity and for future
technology (such as 5G) to ensure network leadership.

Mitigating actions

z Continuing engagement with Government and regulators.

z Due diligence processes and business case analysis
undertaken for potential acquisitions and strategic
partnerships.
z Re-farm 1 800MHz spectrum for deployment of 4G services.

27
Our strategy

Our strategic priorities

Driving growth through new businesses while protecting the core

Expand and Relentlessly Innovate and Extract Leveraging on

Vigorously
escalate pursue lead Wholesale our brand
defend mobile
M-Pesa growth Fixed Enterprise value position

Technology leadership in Retain and develop a

Digital Care and Experience
network and IT high performing team

Improve the return on capital employed

Delivering on our strategy

Vigorously defend mobile

Tanzania offers significant potential for

Our 2023 performance
growth in the digital and internet-based
services sector, with the country’s young and Growing customer market share and revenue
urbanising population, coupled with the low
levels of smartphone penetration, fuelling In the context of intense market competition, we have seen pleasing results from our
growing demand for mobile digital and data strategies in defending our customer market share leadership and increasing data
services. revenue and data customers.

To capitalise on these opportunities, we are We maintained a strong focus this year in defending our overall market share
implementing various initiatives to get the most across the country, specifically in the strategic territories with significant penetration of
out of the opportunities to further grow our smart devices, data users, and the highest levels of ARPU. At year-end, we saw pleasing
customer market share. Our ambition is to progress with a maintained overall market leadership of 30.0%1, with solid inroads made
execute this through driving further uptake of in expanding market share in the challenger market while defending our position in
data to support bridging of the digital divide, our strongholds.
managing value perception and expanding our
Overall, we ended the year with a very pleasing 8.9% growth in our customer base
digital services portfolio. To expand our market
to 16.7 million customers in total. Data customers were up 15.1% to 8.7 million,
share, data uptake and ensure customer
reflecting the positive impact of our strategy to ensure we remain competitive and
stickiness, we focus on initiatives to increase
understand our customers’ needs. This enabled us to provide customers with relevant
smart devices penetration and use our big data
offers through customer value management (CVM).
systems to further provide hyper personalized
offers. It is our commitment to strive to always
remain competitive and relevant to our
customers while responsibly protecting the
market value.
1. Tanzania Communication Regulatory Authority quarterly statistics report as at March 2023

28 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Value Value Value

created eroded sustained

Data traffic was up 26.0% year-on-year, supported by 57.1% growth Providing reasons to consume data
in 4G traffic. The continuing strong demand for mobile data services
lends strong support to the investment case for increasing access to We are pleased with an improvement in data prices per megabyte,
affordable smartphones and data services, and for further enhancing which together with increased usage per customer underpinned by our
customers’ data experience through investment in our network. commercial execution led to a 17.0% improvement in data ARPU,
supporting overall data revenue growth.
Mobile data revenue increased 34.2% to TZS273.7 billion, with
contribution to service revenue increasing by 4.6pp to 26.0%, only 0.9pp We have continued to see pleasing performance this year in
off the historically dominant voice contribution. The continued growth in development, uptake, and monetisation of our various digital service
data users and revenue has assisted in offsetting the decline in mobile offerings in entertainment, education, agriculture, health, and transport.
voice revenue, which was down 1.2% year-on-year, an improvement from However, overall Digital and VAS revenue declined 1.0% year-on-year,
a 5.0% drop in FY2022. The drop in voice revenue reflects a 22.0% reflecting a strategic decision taken to address customers experience
year-on-year decline in average voice prices resulting from stiff market from some of the products’ design. We are confident of growth in the
competition. The impact of declining voice prices was partly offset by future after the transition period, supported by our partnership
an increase in both, the number of voice users and the average usage agreements with globally leading digital platforms, and further
per customer driven by our strong CVM and acquisition initiatives. enhancements in the customer experience and on our digital platforms.

In response to aggressive price competition, we have run various Airtime Advance Credit Service (ACS) continued to support
successful marketing campaigns highlighting the specific benefits of customers spend. This year, the amount borrowed increased by more
our world-class 4G and 5G network, addressing consumer perceptions than 28% compared to the previous year’s borrowing. Airtime advance
relating to data costs, and emphasising our significant contribution is critical in supporting service access to our customers when they are
to positively transforming lives. unable to finance payment for airtime.

Our Tuzo loyalty programme, which operates across both our We have continued to enhance the features and general user-
M-Pesa and GSM platforms, is the only fully functioning loyalty experience of My Vodacom App bringing simplicity in accessing our
programme in the Tanzanian telco sector, and remains an important various services. This year we added 15 new functions to My Vodacom
differentiator in improving customer retention. App, bringing the total to 56 value-adding features. In further improving
customer experience, we are working on integrating My Vodacom app
Accelerating smartphone adoption into the M-Pesa super-app.

Driving uptake of 4G devices, and increasing our 4G market share, is Delivering operational efficiencies
fundamental to delivering on our broader growth ambitions in terms of
data user and revenue growth. We made valuable progress this year in accelerating the number of
customers’ electronic recharges particularly via M-Pesa through various
This year we achieved solid growth of 27.9% in active smartphone
customer incentive schemes as well as changes to salesforce
users, ending the year with 5.3 million users, a 60.3% penetration to our
commissions. Our electronic recharges contribution to total recharges
data customer base, up 6.1pp year-on-year.
expanded by 7pp over that of the last financial year. This uptake is
We expanded our 4G market share1 by 3.7pp, a testament to the critical in reducing the costs associated with paper vouchers including
effectiveness of our commercial strategies. Our initiatives included production, distribution, and channel support incentives.
targeted smartphone campaigns, subsidised 4G entry-level devices,
Increased electronic recharges has also supported avoidance
innovative device financing schemes, and the compelling value
of an estimated usage of 172 tons of paper for producing vouchers,
propositions for customers and our sales team.
supporting environment protection in both forestry and wastes.

Ensuring personalisation through customer We have secured further efficiency gains by ensuring that we
value management and big data remain competitive yet cost-efficient in rewarding our distribution
channel partners. We continuously reprioritise elements of our
operational expenditure, and identifying opportunities for automation
This year’s strong growth in customer numbers and data revenue has
and efficiency optimisation through Agile squads.
been underpinned by the valuable progress made in further
strengthening our segmented offers, using our advanced CVM platform
powered by big data analytics as an important competitive differentiator.

Our strategy execution built on uptake of our ‘Just 4 You’

personalised offers, also resulted in a pleasing increase in average
number of days in a month, that a customer is active on our network.

We will continue to drive personalised propositions to meet customers’

diverse interests, with sustained strong uptake, to drive attachment and
grow market share.

1. Statistics based on Facebook analytics reports.

29
Delivering on our strategy continued

Expand and escalate M-Pesa growth

agents, improved their customers’ experience, and further strengthened
Our world-class mobile financial service offering, M-Pesa, financial inclusion. Overall, we achieved a pleasing growth in Songesha
continues to be a key driver of revenue growth and brand revenue, increasing its contribution to total M-Pesa revenue by 3.4pp.
differentiation, and plays a crucial role in promoting financial
inclusion and stimulating economic activity across Tanzania. We saw a double digit revenue growth this year in international
money transfers (IMT), with receipts from more than 200 destinations
M-Pesa is intended to grow further through building on success of and expanded remittances to include the Southern Africa Development
the existing traditional and non-traditional services in our current Community (SADC) region. This growth reflects successful commercial
M-Pesa product portfolio, while accelerating development of new execution, the addition of new partners in the remittance space, and
innovative products and services, and growing our active M-Pesa further expansion into the broader Tanzanian diaspora. Of the total IMT
customer base penetration. We intend to transition our M-Pesa App value, remittances grew 24.2% year-on-year.
into a Super App underpinned by world-class technology. The
Super App will continue to offer services ranging from loans and Our M-Pesa virtual cards aimed at easing customer’s online payments
savings, seamless QR and person-to-person transfers, to continued to perform well, with more than 216 000 active virtual cards and
entertainment and personalised shopping experiences, promoting payments worth over TZS65 billion processed during the year.
greater financial inclusion. M-Pesa service is backbone to As part of our commitment to driving financial inclusion in
our contribution to financial inclusion. Tanzania, this year, there has been a pleasing significant uptake in our
group savings M-Koba product, following a dedicated campaign of
awareness-raising and on-boarding. Launched three years ago, this
Our 2023 performance product enhances the levels of visibility, security, safety and trust
Following the significant challenges in the prior year – associated associated with traditional informal group savings schemes that are
with the Government’s levy on mobile money transfers and withdrawal popular, particularly among women across the country. The substantial
transactions – our M-Pesa business has continued a steady recovery this increase of over 200% in value processed on the platform and the
year, fuelled mainly by growth from new services specifically lending, growth in number of users reflects significant benefits in terms of
and insurance services, international money transfers and merchant promoting financial inclusion and women empowerment.
services. Although our traditional peer-to-peer transactions have not yet
fully recovered from the impact of the levies, the value of transactions Ensuring unrivalled merchants
in the new growth areas reflected an exceptional increase of close to
200%, with strong commercial execution in accelerating our new We have seen significant growth this year in our ‘Lipa kwa simu’
financial services playing a significant role in driving customer recovery merchant solution, an end-to-end payment platform for our customers
and ARPU. and businesses. We closed the financial year with over 150 000 active
merchants, significantly up from 40 000 at the start of the year,
We currently have 8.2 million 30-day active M-Pesa customers an reflecting successful execution of our goal to drive penetration of our
increase of 1.4 million or 20.0% year-on-year, served by our distribution merchants’ solutions.
network of more than 125 000 agents. M-Pesa continues to lead the mobile
financial service sector in the country, with a market share of 36.5%1. To put things in perspective, this year the platform facilitated
payments worth TZS6.1 trillion, an increase of over 200% on value
It was encouraging that the total number of transactions through processed in the prior financial year.
M-Pesa grew 22.5%, with value transacted increasing 13.3% year-on-year
to an average of over TZS5.9 trillion per month.
Becoming Tanzania’s true super-app
Scaling our digital financial services We made significant progress this year in developing and rolling
out a ‘one-stop shop’ in our significantly enhanced M-Pesa super-app.
We made pleasing progress this year in scaling and embedding new During the year we added several new mini-apps, enabling M-Pesa
products and services in the digital finance arena specifically lending customers to access a range of valuable new functionalities, including:
and insurance, achieving circa 100% growth year-on-year in terms of z Accessing various online merchants’ websites as ‘mini apps’.
value and revenue. The growth is driven by product adoption and z A direct link for making and tracking government payments.
attachment attained through effective commercial execution, including z Ability to pay multiple recipients (up to five) in a single transaction for
product enhancements and improved customer experience. either fixed or varying amounts.
We further expanded our insurance-related offerings, with some z Accessing an online marketplace’ for insurance services.
innovative new options including micro-health insurance and insurance z Watching DSTV shows through redirection.
premium financing. z Using fingerprints for access and transactions authentication instead
of a PIN.
Our pioneering ‘Songesha’ overdraft service to customers, and
agents – launched in FY 2021 – continued to perform well, with more To drive further penetration of the M-Pesa super-app and its various
than four million customers, close to 20% year-on-year growth. The total associated products and services, we have run several aggressive
value of overdrafts issued grew significantly to over a trillion shillings. marketing campaigns, all of which have contributed to a substantial
Songesha supported expansion of businesses of close to 100 000 68.5% growth in the number of active monthly users accessing the app
which is however still low. A continued increase in smartphone users is
expected support our ambitions in super app adoption.
1. Tanzania Communication Regulatory Authority’s quarterly communications statistics as at March 2023.

30 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Value Value Value

created eroded sustained

1 month active M-Pesa customers M-Pesa transactions value M-Pesa revenue

(thousand) (TZS trillion) (TZS billions)
49.8% 17.5% 13.9%
49.0% 17.8% -10.6% 35.0% 36.9% 33.9%
34.5%
43.1% 44.5%

6 685 7 395 6 833 8 197 58.9 69.2 61.9 70.4 358.2 356.8 320.6 357.1
Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2020 Mar 2021 Mar 2022 Mar 2023 Mar 2020 Mar 2021 Mar 2022 Mar 2023
1 month active % to total base M-Pesa transactions % YoY value growth M-Pesa revenue % To service revenue
M-Pesa customers value (TZS trillion) (million)

Relentlessly pursue Fixed

As part of our transformation from a traditional Telco to a The acquisition of the four blocks of low and mid-band spectrum in
digitised Tech Company, we have placed a strong strategic the government auction in October 2022, is also expected to further
focus on expanding our reach in fixed service. open opportunities and support our ambitions in driving fixed services.

There is a lot of untapped opportunities in the fixed service that we With the expanded reach and capacity of our fixed services in the
are looking forward to pursuing. We will tap the business country’s major cities, we grew our customers by approximately 68.0%,
opportunities through differentiation, providing our customers with with revenue up 27.3% year-on-year. This performance was achieved in
the best and secured data experience at homes and offices. the context of aggressive price competition, as well as a global supply
shortage of integrated circuits/microchips that resulted in delivery
delays of handsets and routers for fixed connectivity.
Our 2023 performance We made positive progress this year towards our goal of becoming
We made encouraging progress this year in driving scale and the largest provider of broadband services to the Tanzanian SME sector,
market share in our fixed services. We launched our 5G network, acquiring the largest share of new SMEs, and growing our SME customer
expanded our fixed-line LTE network to cover the major cities, further base year-on-year. This growth reflects the quality of our service
streamlined our customer on-boarding processes, and continued to offerings and superior network availability. It is also a result of our
leverage off our Pan-African presence and international partnerships streamlined customer on-boarding processes and compelling tariff
with leading digital solutions providers. plans, supported by a growing internal team and new reselling partners.

Our fixed wireless access service was mainly provided through 4G It was also pleasing that, during the year, we successfully renewed
for which we added 390 new 4G sites over the year. The roll out of 231 and maintained a significant portion of our customers, and acquired
new 5G sites in the second half of the financial year is a further boost in many new customers from the associated opportunities that arose.
driving our fixed services, providing better speeds and low latencies
hence improved customer experience.

31
Delivering on our strategy continued

Innovate and lead Enterprise

Vodacom Tanzania is the leading provider of communications We are continuing to drive uptake of our ‘connected education’ and
and data services to the large enterprise market in the country, ‘VodaShule’ platforms aimed at digitising the education ecosystem
serving multiple industry segments with a range of solutions through digital books, live boards, classrooms, and school management
that meet specific customer needs. solutions. This year, as part of our new partnership with Microsoft, we
started rolling out their Office 365 services to education institutes free
Building off this strong base – and harnessing our technical of charge. We also entered new partnerships with some major
expertise, recognised service levels and brand reputation – we universities, providing them with connectivity and related services.
believe our enterprise business provides valuable opportunities
for further revenue and customer growth. Our focus is on provision On health, we have been working with our various partners
of services that addresses advanced technological business including the ministry of health, to pilot new services that once
challenges and providing sector specific IoT solutions. concluded, will be rolled out.

Leading in new service areas

Our 2023 performance
This year, we delivered strong revenue growth in our IoT business.
We achieved another year of solid customer and revenue growth across
This is an emerging arena in which we see exciting potential to further
Enterprise. We had decent growth in our data revenue and positive
scale up and commercialise our IoT solutions, harnessing Vodafone’s
albeit lower voice revenue growth, off the back of our existing and new
recognised leadership in this area to grow the market in Tanzania. In
corporate accounts and service offerings.
doing so, we will help the Government deliver on its priority to digitise
the economy including the SMEs, as well as contributing to key social
Becoming the digital partner of choice in and environmental objectives towards improved livelihoods.
agriculture, education and health
During the financial year we finalised the deployment of our new
IoT platform, making us the first operator in Tanzania to have a locally
We have made significant progress in rolling out our ‘M-Kulima’
available end-to-end IoT stack with all data stored locally. This platform
platform, ending the year with more than 3.1 million small-scale farmers
will enable us to provide valuable tracking-related services, such as
registered on the platform, substantially up from 140 000 in the
metering for power and water utility companies, asset tracking in
previous financial year. This dramatic increase is a result of joint efforts,
logistics companies, and smart precision agriculture.
including a partnership with the Ministry of Agriculture, in a drive to
accelerate registration of farmers that has proven important not only to To deliver on our new and growing service offerings – relating to
us, but also in facilitating certain government activities. The platform our IoT platform, as well as the sector-specific services across Enterprise
is digitising the agriculture value chain by offering a complete digital – we have maintained a strong focus this year on deepening the digital
solution in farmers’ profiling, communication, financial transactions, and sector-specific skills within our team. Our aim is to ensure that we
pesticides and fertiliser loans, digital extension services, insurance and have the necessary specialists to develop and deliver digital solutions
education. In addition to delivering direct agricultural benefits, the in each of our targeted focus areas, both through our internal skills
initiative provides additional value in speed of payments and security to development initiatives and by recruiting talent in areas such as IoT,
the parties involved. To drive further uptake and realise opportunities big data analytics, and customer value management.
both economic and social, we are working closely with various partners,
piloting potential services that can be administered through the
M-Kulima platform.

Extract Wholesale value

Given the scale of our available assets in network, fibre, cloud

Our 2023 performance
and data centres, we are identifying opportunities to realise the This year we conducted a detailed assessment of our available
full potential of these assets in those instances when we have assets, and the identification of specific opportunities to utilise and
excess capacity. monetise excess capacity – specifically in terms of fibre, data centre
and hosting.
Our ambition is to extract wholesale value and monetise these
assets through mutually beneficial partnerships, sharing our We modernized and expanded the capacity in one of our data
network and data centres, and realising fibre co-build opportunities. centres, and successfully on-boarded several ISPs who are now using
This strategic objective is long-term in nature, and it may not this capacity to deliver services to their customers.
necessarily deliver immediate results.

32 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Value Value Value

created eroded sustained

Leveraging our brand position

Meeting our strategic objectives and delivering long-term Accelerating support to government
growth depends ultimately on the quality of our relationships
with our key stakeholders – our customers, government and We have historically been working with the government of Tanzania
regulators, investors, suppliers, the media, and the public. As on a range of initiatives, supporting the government to digitize many
outlined on page 10, we engage regularly with our stakeholders of its activities and services, as well as contributing actively to its
to ensure that we understand and appropriately address their commitment to bridge the digital divide and optimise the benefits of
priority interests, and to maintain our existing strong brand improved voice and data connectivity, and enhanced access to more
and reputation. inclusive digital services. This includes co-operation in areas around
rural communications coverage through UCSAF, M-Kulima farmers’
Our ambition is to continue to deepen brand loyalty in the hearts of digitisation through ministry responsible for agriculture and women and
our stakeholders, enhancing further the customer experience, and child health projects including our infamous M-Mama through ministry
meeting evolving stakeholders’ expectations by clearly delivering responsible for health.
on our Social Contract. We aspire Vodacom brand to be at the heart
of every stakeholder. Through use of M-Pesa, we have supported efficiency in
government-related payments in such areas as water and electricity
utilities. Our M-Pesa services including merchant payments, lending,
Our 2023 performance insurance, IMT and the traditional peer to peer transfers have proven
important in promoting financial inclusion, and contributing to key
We have had a pleasing year in terms of consolidating our strong social and environmental goals.
brand and market position, maintaining our overall market share
leadership this year, with 30.0% of customer market share. We also Our IoT services supports economic efficiency including for
maintained our leadership in mobile financial services sub-sector, with example facilitating energy and water efficiency through smart metering
M-Pesa customer market share of 36.5%1. and boosting agricultural productivity for example M-Kulima.

We were consistently rated first in terms of customer net promoter

Enhancing digital accessibility
score (NPS) throughout the year. We ended the year with strong lead
gaps over our closest competitor in headline NPS, NPS for combined As outlined in more detail on pages 41 and 42, we have continued
network performance and overall customer care NPS. to make significant investments to enhance digital accessibility by
Our strong brand positioning and performance earned us expanding the coverage and improving the quality of our network across
numerous external awards, recognising the quality of our customer the country, and by to driving smartphone penetration to enable more
service, the strength of our network, our commitment to innovation and people to access data and digital services. At year-end, 68%2 of the
social inclusion, quality of our financial reporting, and the work of our Tanzanian population was covered by Vodacom broadband, and we
human resources and marketing teams. ended the year with 5.3 million smartphone users in our customer base.

PG Read more on page 42.

Future proofing our network infrastructure
This year we invested TZS156.0 billion (14.5% of revenue) in our
Building a brand with a purpose network and IT infrastructure, to expand our network coverage and
upgrade capacity, support our 4G acceleration and roll-out of new 5G
Our purpose is to ‘connect for a better future’. We strive to use our
sites, and further modernize the network to enhance security and
technology, network, reach and resources, improve the lives of millions
resilience and drive operational efficiencies. Our objective is to ensure
of Tanzanians by connecting people and things to the internet, driving
that Tanzanians have access to reliable and widely available services
inclusion for all, and reducing our environmental impact. Our corporate
through our Vodacom brand.
social responsibility initiatives are democratising health and education,
empowering women and improving living standards in the society. As
reviewed in more detail on page 40, we have made significant progress
this year in delivering on purpose-led commitments in our three focus
areas: co-creating a Digital society, driving Inclusion for all, and
protecting our Planet. Through our activities in these three areas, we are
making a positive contribution to the UN Sustainable Development Goals,
Tanzania’s Vision 2025 and its national Five-Year Development Plan.
1. Both stats from Tanzania Communication Regulatory Authority’s quarterly
communication statistics as at March 2023.
2. Broadband service measured at the rate of 1 Mbps.

33
Delivering on our strategy continued
Leveraging our brand position continued

Vodacom Tanzania’s Awards 2022

Vodacom Tanzania received numerous national and international
accolades this year, recognising the collective efforts by our
management team and employees in improving digital access and
delivering quality communications and technological solutions to
Tanzanians.

z Three awards from Tanzania Digital Awards 2022: Best Customer

Care, for our effective use of digital technologies to create
innovative solutions and foster digital transformation for
customers; and Best Mobile Money App for our M-Pesa App; and
Innovative Telco Company of the Year.
z Two awards from Consumer Choice Awards Africa 2022: Most
Reliable and Quality Network Telecom Service Provider of
the Year, and Most Preferred Quality and Speed Internet
Service Provider.
z Two awards from Tanzania Trade Development Authority: Best
Telecommunication Exhibitor and first runner-up as Investor
for the year.
z Team of the Year 2022, awarded by the Tanzania Marketing
Science Association to Vodacom’s marketing team for its efficient
marketing choices in the country.
z Employer of the Year for 2022 in Talent Management and
Development, awarded by the Association of Tanzania
Employers.
z Employer award from Top Employers Institute, for our activities
positively impacting the community.
z Most Compliant Taxpayer in Telecommunication Sector in
Financial Year 2021/2022, awarded by the Tanzania Revenue
Authority for our good track record on tax compliance.
z Best Presented Financial Statements Award for 2021 in the
Trading and Distribution Category, awarded by the National
Board of Accountants and Auditors of Tanzania for the third
successive year.
z First place in telecommunication category, awarded at the
Ministry of Agriculture’s Nane 2022 Farmers Day celebration.
z Private Sector Outstanding Corporate Social Responsibility
award, awarded by the Tanzania Private Sector Foundation in
recognition of our social impact programmes across the country.
z Top 100 Executives list recognised two senior Vodacom officials
for their excellence and leadership capabilities: Ms Linda Riwa
(Director of Consumer Business Unit) and Ms Aileen Meena
(Head of Marketing and Enablement).

34 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Our strategic enablers Value

created
Value
eroded
Value
sustained

Digital care and experience

Fulfilling our purpose relies on maintaining and growing our Scaling digital care
customer base, by ensuring that customers have the best
possible experience across our multi-product ecosystem. We have continued to develop and enhance our digi-care
channels with the aim of reducing call centre volumes and
As part of our strategic goal of making ‘digital first’ the way we handling times, and to increase first-call resolution rates. This year,
work, we aim to combine the best of digital technology and we ran several initiatives to increase the uptake and effectiveness
personal interaction to evolve our customer experience and of our digital engagement channels:
support through a personalised omni-channel digital solution that
z We have been revamping our TOBi platform and chatbot
promotes inclusion and generates loyalty to our brand.
functionalities, increasing the use of machine learning to make
our chatbots more engaging and intuitive through additional
Our 2023 performance functionality and integration, ensuring that as far as possible
common account and service-related queries are effectively
We have had a decent year, achieving strong performance in various addressed, and when necessary, that customer queries are
areas across the business. In customer service, which is a customer channelled to the right agent. With the rollout of the new
facing role, we were pleased with overall proof points attained relating platform, we anticipate further improvements in usage and
to customer satisfaction. adoption rates.
z We have undertaken various educational and promotional
We were consistently rated first in terms of customer NPS
campaigns to encourage adoption of digital over more
throughout the year, ending the year with a solid lead over our closest
traditional channels, and stimulate a ‘digital first’ culture. This
competitor.
has contributed to a 7% year-on-year growth in volume of
We have continued to maintain overall market share leadership customer service issues handled through digital channels.
this year, a reflection of our strong customer acquisition and retention z We have extended the self-reversal functionality for erroneous
execution, including excellence in customer care which is the face M-Pesa transactions sent to other networks. This has improved
of the company. the customer experience, providing more control to the
customer and reduced demands on call-centre agents.
We received several external awards this year in recognition of the z Recognising that many customers prefer to speak to an agent,
quality of our customer service. as opposed to self-help, we have improved our IVR (Interactive
PG Read more on page 34. Voice Response) to make it easier for customers to access us,
but also with the messaging to encourage self-care. Although
this has promoted an overall 10% increase in calls, our belief is
that this will lead to a longer-term reduction in calls through a
more effective process of elimination.
z To further empower the customer, we have introduced a
self-care ticketing query facility, where a customer can now
track their tickets when they call on the IVR or when using
My Vodacom app.
z We have an agile squad that is supporting us in automating
some of our more repetitive processes. This year we expanded
the team, focusing particularly on the finance, customer service
and fraud units. We have now fully automated over 140
processes. This has contributed to improving customer
turn-around time, freeing up agents and staff for higher quality
customer and operational engagements, and delivering
valuable cost savings.

35
Our strategic enablers continued
Digital care and experience continued

Transforming the customer experience Inclusive care

This year, we introduced a Customer Experience Board – As part of our commitment to ‘inclusively’ serve our customers
comprised of all EXCO members – to help us accelerate our better, we have placed a particular focus this year on customers with
experience improvement decisions, ensuring that all relevant areas hearing and physical movement challenges. In a key development, we
of the business are aware of what is happening, and helping us to recruited eight customer service personnel fully conversant in sign
prioritize areas for improvement. language, and trained an additional thirty front line representatives
on basic sign language skills. We have also introduced access to sign
By challenging identified customer pain points through systems
language support via a WhatsApp video helpline stationed in the
stabilities and fixes, and running effective customer education
call centre.
initiatives, we have improved the customer experience in call centres,
with our touchpoint Net Promoter Score (tNPS) up 5pp, and with a We did physical upgrades constructing wheel chair ramps in more
service level average of 80% at year-end. Majority of customer than 80 Vodacom shops to ease customer access to our touchpoints as
queries are now resolved within six hours. well as installing priority desks for the disabled in our retail stores.
To further enhance our product offerings and customer
engagements, we have increased our use of machine learning, Creating expert agents
CVM technologies, and customer-centric go-to-market processes,
As we expand our product portfolio, we have continued to invest in
with the aim of informing the development of differentiated, highly
strengthening our agents’ skills to support our more sophisticated products
personalised offerings.
in the digital, financial, insurance and fixed space, with the aim of ensuring
We continued to provide customers with data management tips that customers are always attended to by a knowledgeable and confident
through our customer education platform (‘Ni Rahisi Tu’) to curb the agent. We have also leveraged on support tools to further empower our call
misperception of unknown depletion of megabytes bought, as well centre, enabling them to provide quality advice to customers as part of our
as empowering customers to manage their spend and usage. drive to cement an ‘ask once’ culture and improve first call resolution rates.
Through this platform, we are also encouraging and empowering
We have seen further strong uptake this year in our ‘SUPA Agent’
customers to self-service through our numerous self-care options.
programme, categorizing our agents into qualification classes based
on specific work quality and knowledge criteria. We have witnessed an
increasing number of agents graduating into higher class a reflection
of customer service excellence.

36 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Value Value Value

created eroded sustained

Technology leadership in network and IT

Connecting our customers for a better future requires The impact of efficient network operations and investment is
significant investment in network infrastructure and IT reflected in the strong performance in our KPIs relating to network
systems, as well as continued innovation to strengthen availability, dropped calls’ rate, accessibility, and data download and
cybersecurity, maintain customer privacy and to secure upload rates. At year end, we were once again Tanzania’s top-rated
operational efficiencies. We are strongly committed to operate service provider in terms of quality of service3 and maintained our lead
our network responsibly, reducing our environmental footprint. in overall network NPS, with a solid lead gap over our nearest
competitor.

Our 2023 performance Strengthening cybersecurity and maintaining

customer privacy
Investing in infrastructure to expand capacity,
coverage and resilience In line with the Vodafone Technology 2025 strategy, we have
continued to invest in strengthening and modernising our cyber
In FY2023, we invested TZS156.0 billion equivalent to 14.5% of security systems to ensure that customers enjoy our services securely,
revenue, on capital expenditure spent in network and IT infrastructure. reliably and without incident. Vodacom Tanzania was once again rated
This investment was used to expand our network coverage, upgrade the best market in the global Vodafone Group in terms of the
network capacity, roll-out 5G sites and fibre in priority areas, further implementation and effectiveness of our cyber security baseline
modernize the network to enhance security and resilience while also controls (CSB), and we were the first region in the Group to reach the
driving operational efficiencies. globally-set target for cybersecurity baseline controls.

An important highlight this year was the strategic acquisition of This year, in partnership with a global cybersecurity company, we
spectrum in the auction convened by the Tanzania Communications launched a Bug Bounty Programme, in which we offered monetary
Regulatory Authority in October 2022. Through our three winning bids, rewards to ethical hackers for successfully discovering and reporting a
we secured four blocks of low and mid-band spectrum for a total price of critical vulnerability in any of our externally facing applications. This has
US$63.2 million. This investment in spectrum is an important strategic already proved very effective in identifying and addressing potential
enabler, allowing us to further expand our 4G and 5G coverage to vulnerabilities.
support both mobile and fixed data services and upgrade capacity,
In terms of managing information security, we maintained
supporting our commitment to bridge the digital divide and deliver on
certification of ISO 27001 (Information Security Management System)
our purpose.
and are also fully compliant with the EU GDPR (General Data Protection
This year, we added 390 new 4G sites, bringing the total to 2 353 Regulation).
4G sites and increasing our reach to 56.2%1 of the country’s population,
up from 50.4%1 last year. We added 228 new 3G sites, reaching a total of Reducing our environmental impact and
3 096 3G sites, enabling us to provide 3G data services to around 85.0%1 securing operational efficiencies
of the population. We also added 59 new 2G sites, including 7 sites as
part of the government’s rural coverage programme, bringing our 2G As part of a Vodafone group-wide commitment to improve energy
coverage to 93.1%1 of Tanzania’s population. Our fibre network is now efficiency and reduce greenhouse gas emissions by 50% by 2025 (on a
over 4 500 kilometres and our 5G network has reached 231 sites. 2019 baseline), we have been realising opportunities to reduce energy
As a result of our cumulative investment in network coverage and usage in our data centres, and we are working with our network
capacity, 68%1 of the population is now covered by broadband2. Looking providers to accelerate grid connectivity to reduce usage of the more
to the year ahead, in addition to further upgrading our network capacity carbon-intensive diesel generators. This year, we also completed a gap
and expanding our coverage generally, we plan to expand our footprint analysis aimed at securing certification to ISO 50001 on energy
in certain strategic areas. We will also continue to support government’s management.
rural coverage initiatives through UCSAF projects As part of our cost containment programme, we have continued to
To provide for continuing growth in network traffic and address drive network and IT efficiencies, including consolidating network
specific instances of network congestion, we invested in various towers through our co-build and sharing strategy, delivering some of our
end-to-end capacity upgrades across the country, further enhancing the key IT products internally, and streamlining some of our internal
overall customer experience. We also made further progress this year in processes through increased digitisation and robotic process
modernising our radio network (RAN) by deploying new sites or automation (RPA).
changing existing base stations to single radio access network (SRAN).

During the year we successfully completed deployment of a new

1. Based on Vodacom Tanzania internal estimates.
future-proof IoT platform. We are now the only MNO in Tanzania with a 2. Measure at a rate of 1Mbps.
locally available end-to-end IoT stack with all data stored locally. 3. TCRA quarterly report for March 2023, page 47.

37
Our strategic enablers continued

Retain and develop a high performing team

To fulfil our core purpose and strategic objectives, we need Currently, all but two of our thirteen executives are Tanzanians,
access to diverse talent and future-ready skills, built on an resulting in an 84.6% level of local representation a director level (exco),
inclusive employee experience that fosters personal growth, up from 30.8% six years ago. This positive change is critical for local
and a culture that values agility, innovation, and customer empowerment as well as business sustainability though self-reliance
service. Vodacom Tanzania has always excelled in attracting, represented by localisation of the leadership team.
nurturing and retaining talent, and we take pride in consistently
In the context of a highly competitive market for skills –
being rated an employer of choice.
particularly in the digital technology field – our ability to attract and
Since launching our Spirit of Vodacom initiative in December 2019 retain the best talent is strengthened by being part of the Vodafone and
– developed in alignment with the Vodafone Group – we have Vodacom groups. This enables us to provide employees with access to
focused on deepening the ‘Spirit’ culture that fosters innovation, attractive global career development opportunities, including regional
teamwork and agile learning, while increasing individual and team and international assignments, short-term rotational secondments,
autonomy to encourage decision-making at a more decentralised structured mentoring programmes, and ongoing education and
level. These are all important attributes aimed at accelerating our leadership development opportunities. Currently, six Tanzanian
transformation from a Telco to a Tech Company. Vodacom employees are working on various assignments within
the Vodacom group family.

We are continuing to play our part in addressing the global gender

Our 2023 performance disparity in STEM careers by collaborating with government, the private
sector, and academia to encourage young girls to pursue STEM subjects.
Diverse talent and future-ready skills Since its launch, our #Codelikeagirl programme has engaged more than
1 700 girls aged 14-18, equipping them with coding skills and life skills,
We have continued to invest significantly this year in building the and inspiring them to consider ICT and STEM subjects. Participants
internal skills and capabilities needed to meet our ambition of being a attend a one-week training course, covering basic knowledge of
future-fit digital tech company. This year, around 500 employees computer languages and programme development including ‘HTML’
engaged in internal and external training opportunities, including and ‘CSS’, a computer language for web-page structuring.
specifically in such areas as block chain, Robotic Process Automation
(RPA), artificial intelligence (AI) and machine learning, big data and
analytics, IoT, cybersecurity, fintech, public cloud skills, digital media
Agile and efficient operating model
and 5G. In 2019, Vodacom Tanzania became the first International Business
As part of our goal of achieving skills transformation across the operation in the Vodacom Group to adopt Agile structures, principles,
identified core specialties, we have retained a strong focus on and tools. Since then, all our employees have been trained in Agile
encouraging employees to develop ‘#1MoreSkill’, with around 90% processes through the Vodafone University online portal.
of our staff undertaking training sessions this year aimed at developing We have now successfully launched seven Agile squads and trained
a new skill. 17 staff members as ‘Robotic Process Automation Citizens’. Using RPA,
Leadership development and senior management succession we have fully automated 103 processes, saving more than 140 000
planning remains a top priority. More than 250 of our executives and person-hours this year alone.
managers have received various leadership and management refresher Our various Agile interventions have enhanced the quality of
training over the past three years, with 66 leadership development engagement across business units and contributed to material
initiatives run this year. We have retained a particular focus on improvements in productivity and efficiency, as well as encouraging
developing female leaders, through participation in initiatives such as greater alignment and accountability on mutually agreed performance
the McKinsey Black Leadership Management Accelerator and the indicators.
nine-month Female Future Leaders Programme.

The positive impact of our skills development and succession

planning interventions is reflected both in the number of new senior
appointments made internally, as well as in the recruitment of our staff
to fill management positions elsewhere in the Vodafone group family.
This year, thirty promotions were made internally to management
positions, many of which were women. It is pleasing to report that our
target of 44% women in director and head of division positions has been
reached on schedule.

38 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Value Value Value

created eroded sustained

Digital and personalised experience

As part of our drive to become a digitally led company, we have continued We made further progress this year in contributing to the Vodafone
to automate and digitize our employee engagement activities, introducing group’s goal of being recognized as the world’s best employer for
best-in-class digital solutions to facilitate secure communication and women by 2025. We have introduced various strategies and initiatives
enhance collaboration and innovation across our dispersed workforce. towards this objective, including progressive provisions on parental
This includes fully digitising employee on-boarding, providing an online leave, and programmes to combat gender based violence and sexual
self-service exit clearance process, introducing ToBi chatbot functionalities harassment. These are supported by our leadership development and
for HR, and encouraging further uptake of our employee-focused mobile training programmes – including the graduate trainees – aimed at
app. This year, we achieved 58% active-user uptake on our Grow with increasing the representation of women across the organisation and at
Vodacom app, just short of our 60% target. the leadership level.

We are incredibly proud that Vodacom Tanzania maintained its top We further enhanced the employee value proposition, including
position this year across Vodacom and the Vodafone group for our Team securing staff discounts on relevant products and services.
Spirit Index and engagement scores. This affirms our success in fostering
the Vodacom culture and Spirit behaviours among all our employees on Our workplace initiatives have once again been recognised this
earning customer loyalty, creating the future, experimenting, learning year, with Vodacom Tanzania receiving the Association of Tanzania
fast, and getting it done together. Employers (ATE) Employer of the Year 2022 award for Talent
Management and Development, as well as the Top Employer Tanzania
and Top Employer Africa awards for the fifth consecutive year.

Health, safety and wellbeing

This year was Vodacom Tanzania’s eleventh consecutive year with We continued to execute our employee wellbeing programme,
zero work-related fatalities, reflecting the positive impact of our running various awareness sessions on issues such as mental health,
activities in embedding a strong safety culture. We are the first region nutrition, healthy lifestyles, and sound financial and investment
across the Vodafone group to achieve this, an achievement recognised management. We are pleased with the positive feedback received from
at a group level through this year’s Vodacom Group CEO award. employees regarding the importance and effectiveness of the wellbeing
initiatives undertaken.
We have maintained a strong focus on employee health and safety,
with a particular focus on embedding health and safety practices in our In addition to meeting all legally required policies, we have
supplier engagements, and in ensuring full safety compliance. We introduced progressive policies and procedures that address issues such
continue to use enhanced digital solutions to monitor high-risk activities as paternity leave and mandatory leave, diversity and inclusiveness, and
– such as driving, working at heights, and electrical works – supported employee speak up – whistleblowing rights.
by our various management engagements to ensure compliance with
the Vodacom Absolute Rules. Our well-being activities have been recognised across the group,
with Vodacom Tanzania awarded the first runner-up position in the
We have been sharing our best practice safety learnings across the Global Wellbeing challenge. The resulting award money was donated to
broader Vodafone group. As part of this, the digitised and fully a charity identified by employees, and help a girls’ school with books,
automated permit-to-work and journey management tools that we desks, chairs and solar panels.
developed last year have recently been rolled in the Vodacom markets
in South Africa, Kenya and Democratic Republic of Congo (DRC).
March March March March March
Our workforce performance indicators Unit 2023 2022 2021 2020 2019
Number of full-time employees Number 581 560 569 551 548
Female in EXCO % 38.5 38.5 36.4 30.8 36.4
Female (HoD and EXCO level) % 43.8 40.0 41.2 41.2 41.2
Female employees % 37.5 37.3 35.7 37.0 36.5
Local (Tanzanians) % in EXCO % 84.6 84.6 72.7 69.2 54.5
Total training spend (TZS bn) 0.3 0.2 0.7 1.0 0.7
Employee turnover % 6.0 10.5 6.7 6.7 8.9

39
Our purpose

Vodacom Tanzania’s purpose is to ‘connect for We believe that the most effective way we can
a better future’. We strive to improve the lives accelerate socioeconomic transformation and
of millions of Tanzanians by connecting contribute meaningfully towards national and
people and things to the internet, driving global development objectives is through the
inclusion for all, and reducing our responsible provision of improved voice and
environmental impact. data connectivity, and enhanced access to more
inclusive digital services.

As part of Vodafone and the Vodacom Group, we have committed to delivering on three broad focus areas aimed at
contributing meaningfully to the United Nations Sustainable Development Goals (UN SDGs):

Co-creating a Driving Protecting our Planet

Digital society Inclusion for all by reducing our
environmental impact

Through our activities in these three areas, we are making a positive contribution to the following eight SDGs:

40 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Value Value Value

Delivering on our purpose and social contract created eroded sustained

Digital society

Bridging the digital divide is critical to transforming Tanzania

from an agricultural economy to a knowledge-based,
semi-industrialised middle-income economy. By promoting
digital inclusion, the mobile telecoms sector is already
contributing significantly to the country’s developmental
goals. We have the potential to play a significant further role
by increasing access to critical services, driving productivity
gains across key business sectors, and facilitating inclusive
economic opportunities. We are continuing in our activities to
bridge the digital divide through our sustained investment in
extending communication services to underserved areas,
while facilitating affordability initiatives in smartphones
and providing low-cost price packages to democratize
Promoting financial inclusion
communications. We also strive to develop tailored digital
solutions that supports digitisation of businesses, We have made significant further strides this year in promoting
government services and critical sectors to resolve social financial inclusion through our various M-Pesa service offerings. Over
and environmental challenges. 8.2 million monthly active M-Pesa customers processing close to
1.5 billion transactions, worth over TZS70 trillion for the year are
connected to the formal financial services through M-Pesa. We are
Connectivity for all proud of this largest reach of any mobile financial services provider
in Tanzania.
This year, we invested TZS156.0 billion in expanding the coverage
and improving the quality of our network. We added seven new sites in Our M-Pesa service provides various valuable services, including
rural Tanzania and rolled out a total of 849 sites to further support money transfers, merchant payment solutions, personal and communal
access to data services, including the 231 new 5G sites. Among the new savings, short term loans, overdraft facilities and insurance services.
sites, 19 sites were rolled out in special-purpose areas1 in collaboration Through these services and their design, M-Pesa promotes some
with the government through the Universal Communications Service formalisation in financial dealings and a step in financial inclusion,
Access Fund (UCSAF). At year-end, we had 1 687 rural sites2, including critical especially for a significantly unbanked population.
302 sites2 built in collaboration with UCSAF over the past eleven years of z Through the M-Pesa wallet, our M-Pawa and X-Pawa customers have
our partnership. As a result of our investment in network coverage and ready access to a savings account service. During the year, total
capacity, 68%2 of the population is now covered by broadband. deposits into these services were more than TZS150 billion.
z Our M-Koba savings product, operated in partnership with the
We have continued to promote digital inclusion through our affordably Tanzania Commercial Bank (TCB), has been designed primarily for use
priced packages offered under our ‘Just 4 You’ umbrella, powered by our in communal savings and credits associations. Historically, members
CVM and machine learning platforms. Close to 8.0 million customers, of these associations have suffered from cash loss as a result of poor
monthly, use our Just 4 You offers. record keeping, insecure storage, theft and even dishonest practises
We also continued to facilitate service accessibility through our airtime by those entrusted to maintain the groups’ savings. By design,
credit advance service platform, which enables customers to access M-Koba has eliminated these risks. During the year, more than
telecommunications services, including data, by loaning airtime or bundles TZS150 billion deposits were made into M-Koba portfolio.
z We have enabled M-Pesa customers to access M-Pawa loans, as well
for repayment in their next recharge. This year, 8.2 million customers
benefitted from TZS72.5 billion airtime advance issued, an increase of 5.8% as overdrafts through our Songesha facility. During the year, over
over last year’s value. 4.4 million customers benefitted from our overdraft facility, which is
easily accessed and does not require any paper work or collateral.
We continued to drive smartphone affordability to enable more people z Our Songesha offering for agents benefitted almost 100 000 agents,
to access data and digital services. Despite challenge of increasing device with around a trillion shillings’ worth of overdraft and term loans
purchase price due to global microchips shortage, our efforts delivered a issued to finance their businesses and ensure service availability
27.9% increase in smartphone users to 5.3 million. We continue to work to customers.
with government and our partners to identify opportunities to stimulate
1. It should be noted that not all the sites built in collaboration with UCSAF are rural
smartphones’ demand and assist on affordability. sites, the basic criteria for funding is facilitating services to the underserved areas,
which are commercially unattractive – which could geographically be in urban areas.
2. Definition of a rural site is based on Vodacom’s internal criteria and not necessarily a
geographically rural area. The number of ‘rural sites’ may also change between
comparative years following internal reviews and reclassification.
3. Measured at 1 Mbps.

41
Delivering on our purpose and social contract continued
Digital society continued

Digitising critical sectors Digitising government

Our M-Kulima agricultural platform now links more than 3.1 million Through our M-Pesa payment solutions, supported by the
smallholder farmers to the agriculture value chain, providing access to willingness of the government of Tanzania to drive digitisation of
information, services, and markets via SMS and App, and enabling faster payments, we have made significant progress in facilitating electronic
and safer payments through M-Pesa. The significant increase in the payments in such areas as water and electricity utilities, education and
number of registered farmers from 140 000 in the last year, was due to city parking. Our customers easily access the options to effect
accelerated registration executed in collaboration with the government government payments in our M-Pesa super app, which provides direct
through the ministry of agriculture. The M-Kulima platform digitises the links to the government payments’ gateway – GePG. Apart from other
farming community while providing the government with a handy benefits, payment digitization is important for speed of transacting,
source of statistical data for the sector. Our current base includes safety, records keeping and tracking.
farmers in six regions across Tanzania, covering a range of crops,
including maize, beans, sunflower, tobacco, lentils, coffee, green gram, Our new IoT platform – the first locally available end-to-end IoT
grapes, and dairy. stack with all data stored locally – will help the government deliver
on its priority to digitise the economy in particular the SME sector.
Through our Connected Education platform, a commercial scheme The platform will also support solutions for other key social and
operated in collaboration with our partner ‘Opportunity education’, we environmental objectives, for example by facilitating energy and water
provide online classes, examinations, markings and other class-related efficiency through smart metering, or boosting agricultural productivity
activities. A total of 34 schools are registered in this scheme, which and livelihoods.
provides them with access to online educational materials approved by
the Tanzania Institute of Education. Educational institutions registered in
the scheme also gets tablets as part of the package to enable access to
the internet.

Through our E-Fahamu (instant schools) initiative, which is part of

our corporate social responsibility activities, we assist digitisation of
schools that would otherwise remain unconnected to the internet. We
collaborate with our partners Universal Communications Service Access
Fund (UCSAF), African Child Projects and the Tanzania Institute of
Education, to provide identified needy schools with facilities for students
and teachers to access online educational content. A total of 185 000
registered students are active in our portal. Our donations include
building and furnishing ICT labs (rooms), devices and free access to
the internet. During the year, we conducted an awareness campaign
reaching close to 400 000 students and 15 000 teachers, furnished
ICT labs in our legacy project in Mbeya and Dodoma, and donated
517 desktop computers, 23 printers, 22 televisions sets, 479 tablets and
183 routers. Our total spend in E-fahamu activities was close to
TZS1 billion1.

Our IoT solutions include several platforms that promote efficiency

and simplify users’ experience. These include services such as
connected smart power and water utility meters – that reduces the
need for in-person interaction and significantly improves customers’
billing efficiency and collections’ rate. The platform also supports asset
management solutions that improve asset utilisation efficiency and
provide maintenance alert and security enhancement through location
identification.
1. Include funding from both Vodacom Tanzania Public limited and funding by our
parent foundation – Vodafone foundation.

42 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Value Value Value

created eroded sustained

Inclusion for all

We are working to alleviate poverty and inequality in Tanzania Democratising health

through numerous initiatives that assist every citizen to have
equal access to services. Our initiatives include programmes on M-mama is a programme established in partnership with the
access to communications, democratising education and Vodafone Foundation and the government of the United Republic of
health, supporting technology start-ups and women Tanzania, aimed at reducing maternal deaths through the provision of
empowerment. The impact of our initiatives in these areas are emergency transportation for pregnant women to healthcare centres in
in addition to the significant benefits achieved through our rural areas. The programme which is already live and operational in
activities in promoting inclusive finance and agriculture 8 regions, was officially launched by the President of Tanzania in April
addressed under our Digital Society initiatives. 2022, and is in expansion phase to cover 14 regions. Since its initiation
in 2013 as a pilot, our flagship M-Mama programme has assisted more
than 19 000 expectant mothers and newly born infants mainly in the
Lake region areas of Mwanza and Shinyanga where it was piloted.
Inclusive access to our communications service
Through our corporate social responsibility projects, we
In supporting equal access to our services, we launched inclusive contributed towards health service by providing hygienic support to
customer care initiatives to support easy and convenient use of our secondary and primary schools in Mwanza, Rukwa and Manyara regions
services for customers with physical challenges. We are customer donating 52 pit latrines worth TZS169 million.
centric – for us it is critical that these customers access comfortably, all
the support services needed. In driving this, we launched our inclusive PG Read more on page 46.
care initiatives that included:

Constructing ramps to support wheel chair or non-stairs access

Supporting technology start-ups
in more than 80 shops across the country.
In year 2020, we launched the ‘Digital Accelerator Programme’ in
Introducing sign language customer service, in which eight sign partnership with Smart Lab, an experienced player in the start-up
language specialists were recruited, and over thirty existing employees domain. During the year, we supported and mentored the top 3 out of
in our touch points were trained on basic sign language skills. 13 shortlisted projects in fintech, education, health, media, e-commerce,
agriculture, tourism and cybersecurity. Our objective is to help young
Launching a WhatsApp video call customer service attended Tanzanians to transform their potentially game-changing product ideas
by a sign language specialist. into successful businesses that helps to create jobs and solve societal
challenges. Since inception, the programme has supported and
Providing special counters in our main outlets, dedicated for mentored 28 start-ups.
customers who needs special support.

These initiatives aim at ensuring that our customers get equal access to Women empowerment
our services regardless of their physical conditions. We are pleased that
in just four last months of the financial year, close to 1 300 customers This year, 564 girls participated in our successful #Codelikeagirl
were served under the inclusive care initiatives. programme, an initiative that aims to provide and expand technological
skillsets for 14-18-year-old girls, to stimulate the development of digital
Democratising education solutions for sustainable social and economic development, and to
encourage girls to consider ICT and STEM subjects. The participants to
Our reliable, high-quality data network across the country enables this programme are identified through local secondary schools. Since
Vodacom customers to have access to quality educational sources initiation, more than 1 700 young girls have attended the programme,
through the internet. Our extended coverage for high speed internet forming a growing young talent pool for technology.
accessed through mobile and fixed data services enables our customers PG Read more on page 38.
to access electronic libraries, online educational materials, lectures and
other supportive content. We are committed to continue providing the We are an equal opportunity employer and we live this spirit in our
best data services to support efficient transmission of online materials organisation. Our female employees make 39% of our Directors from
including the educational contents. 36% two years ago. In the next leadership level, female employees are
Also refer to Connected education and E-Fahamu initiatives already 45% of our heads of divisions an increase from 42% two years ago. We
PG reported under the Digital society pillar on page 42. are proud that in overall terms, 44% of our leadership team in Vodacom
Tanzania are female, up from 41% two years ago.
PG Read more on page 39.
43
Delivering on our purpose and social contract continued

Planet

We are minimising the environmental impact of our business activities by investing in climate-smart, energy-efficient networks and
solutions, reducing waste across our value chain, enhancing climate resilience through tree-planting, and ensuring compliance with
environment impact assessment requirements.

Climate change, energy, and water efficiency

We continue to drive energy and water efficiency initiatives, and contain our carbon footprint, by modernising our data centres and driving efficiencies
in our mobile network. During the year our energy consumption increased, mainly due to increased investments into new technologies particularly
4G and 5G (see page 16). However, our efforts in consistently undertaking steps to manage impact of our network operations to the planet is evident.
z We invested in initiatives to improve energy efficiency including upgrading of cooling systems and UPS leading to an estimated 792MGh saving in
electricity consumption.
z We have connected 87% of our network access sites to the grid up from 84% in the prior year, reducing the use of higher-impact diesel generators.
z We are currently in the process of completing ISO certification of our Energy Management Systems.

Waste reduction
Our longstanding focus on encouraging customers to switch from using scratch cards to adopting electronic recharges – such as M-Pesa, ATM
machines, and Vodafasta – has contributed to reducing an estimated 171.6 tons in paper-waste this year, resulting in a cumulative estimated reduction of
over a thousand tons of paper in the past seven years.

Our switch to smaller-sized SIM-cards with biodegradable material, has reduced plastic usage and plastic waste by an estimated 28.9 tons this
year, resulting in a total estimated reduction of 180 tons in plastic waste over the past seven years.

Biodiversity and climate resilience

This year, we continued with maintenance of our Kijanisha Dodoma Communities have benefited not only from the trees planted, but
‘greening’ project spending TZS140 million. The project is aimed at also through our continuous capacity building and entrepreneurship
increasing awareness and mobilising communities on climate change development programmes, helping community members – mainly
and biodiversity issues as well as maintaining the previous years’ planted youth and women – to realise economic opportunities through
trees. Since inception, this project which is undertaken in partnership environmentally sustainable activities in areas such as smart home
with the World Wide Fund for Nature (WWF) and the Dodoma City cookers and renewable energy.
Council, has planted 112 000 surviving trees in the capital of Dodoma.

March March March March March

Sustainability KPIs Unit 2023 2022 2021 2020 2019
Number of full-time employees Number 581 560 569 551 548
Number of full-time female employees Number 218 209 203 204 200
Female in EXCO % 38.5 38.5 36.4 30.8 36.4
Female (HoD and EXCO level) % 43.8 40.0 41.2 41.2 41.2
Female employees % 37.5 37.3 35.7 37.0 36.5
Total spend on employees (TZS bn) 65.2 63.8 61.6 57.7 59.4
Total training spend (TZS bn) 0.3 0.2 0.7 1.0 0.7
Work related fatalities Number Zero Zero Zero Zero Zero
Product and Service Responsibility (Customer NPS) Position 1st 1st 1st 1st 1st
Employees Engagement Index score % 93 85 86 86 85
Customer base (90 days) Number ('000) 16 735 15 368 14 861 15 513 14 133
M-Pesa users (monthly base) Number ('000) 8 197 6 833 7 395 6 685 6 989
Data users (monthly base) Number ('000) 8 748 7 603 7 695 7 687 7 892
CAPEX investment (TZS bn) 156.0 173.9 122.4 154.6 171.4
Total tax and levies paid to government (TZS bn) 530.0 516.9 429.7 434.8 391.5
Airtime advance to customers (TZS bn) 72.5 68.6 43.3 38.2 34.6
Total value transacted in M-Pesa (TZS tn) 70.4 61.9 69.2 58.9 50.0
Beneficiaries of Songesha overdraft Number ('000) 4 444 3 776 3 541 2 001
Rural sites (UCSAF) Number 302 283 260 217 199
Rural sites (Total) Number 1 687 1 680 1 660 1 570 1 518
Number of Customers in Rural sites Number 7 689 7 016 6 719 6 298 6 192
Customers in rural sites % 54 57 56 53 53
Paper usage saved by focusing on electronic recharges Tons 172 134 140 175 155
Plastic usage saved by using small size simcards Tons 29 15 22 30 31

44 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

45
Delivering on our purpose and social contract continued

Corporate Social Responsibility Report (CSR)

Guided by the UN Sustainable Development Goals, Tanzania’s Vision 2025 and its national Five-Year
Development Plan, our Corporate Social Responsibility function seeks to positively impact the lives of
underserved members of the Tanzanian community by leveraging Vodacom’s technological and digital
capabilities, infrastructure and partnerships to deliver pioneering projects in maternal health, education,
and environmental protection.

Our 2023 performance

Health – SDG 3 Education – SDG 4

(Good health and wellbeing) (Quality education)

Total spend this year of more than Total spend this year of close to

TZS500 million TZS1 billion

Our M-Mama programme, conducted in collaboration with the We have continued to provide support to numerous
Vodafone Foundation and the government of Tanzania, educational initiatives across the country. The projects are
provides emergency transportation for pregnant women and conducted in partnership with the government departments
new-borns in rural areas. The objective is to prevent and including UCSAF, various ministries including ministry of
reduce maternal deaths and child mortality by leveraging on education and vocational training and the ministry of science
mobile communications technology to trigger ambulance and technology, as well as with various non-governmental
service using community taxis as ambulance with government organisations including the African Child Projects.
ambulances where available.
Our major CSR initiative is E-Fahamu portal connectivity
The main deliverables to date are: project that provides free access to educational material.
z Being live and operational in eight of 14 intended regions. We have more than 185 000 registered students and 15 000
z Benefiting more than 19 000 people since inception registered teachers on the portal. During the year we donated
in 2013. 517 desktop computers, 479 tablets, 183 routers, 23 printers,
z Saving an estimated 700 lives through the programme. and 22 television sets.
z Investing more than US$8 million in the project since
inception. PG Read more on page 42.

#Codelikeagirl programme is another education-related

PG More details can be found on page 43.
initiative undertaken in collaboration with our human
We have project to promote hygiene in primary and secondary resources department to encourage girls aged between 14-18
schools in Mwanza, Rukwa and Manyara regions. Our objective years to develop coding skills and valuable life skills, and
is to create a conducive environment for students and encouraging them to consider the uptake of ICT and STEM
teachers to focus in studies and deliver good educational subjects. This year 564 girls attended the training to make it
performance. During the year, we donated 52 pit latrines in more than 1 700.
the programme, spending close TZS169 million.
PG Read more on page 38.

46 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Environmental protection – SDG 13

(Climate action)

Total spend this year of

TZS140 million
Since 2020, in partnership with the World Wide Fund for Nature (WWF) and the
Dodoma City Council, we have been jointly implementing the Kijanisha Dodoma
and Kijani Zaidi programmes, an ambitious tree-planting and educational
initiative to green Tanzania’s capital city. There are an estimated 112 000
flourishing trees out of 150 000 planted, delivered by more than TZS600 million
spent since project launch.

PG Read more on page 44.

Through our Vodacom Business Unit, we have continued to roll out our M-Kulima
digital agricultural platform that currently links more than 3.1 million smallhold
farmers to the agriculture value chain. Among many benefits, the platform
enables registered farmers to access information and extension services and
helps them to conduct responsible farming.

PG Read more on page 31.

Our strategic focus

In the next three years, we will focus on the following areas:

Reduction of infant mortality

Vodacom remains dedicated to reducing premature infant mortality by
providing equipment and technology, conducting capacity building initiatives,
and raising awareness among unskilled health workers. We actively engage in
public-private partnerships to combat infant mortality, collaborating with the
Vodafone Foundation, United States Agency for International Development
(USAID) and the Government of Tanzania through relevant ministries
responsible for Health, Local Government, and Information and Technology.
Following a review of the program, our M-mama will extend its reach to all
regions of Tanzania by October 2023.
Rural coverage
Our commitment to bridging the digital divide drives us to continue
supporting connectivity in underserved rural communities. By providing
affordable communication access, we promote inclusion for all, aligning
with our purpose.
Inclusive education
To foster inclusive and equal education, we will enhance technology and
internet access in government schools across Tanzania. Our goal is to increase
ICT learning opportunities for students in impoverished rural and urban
communities. By 2025, we aim to impact over one million students by
reaching 1 500 schools.
Climate change and biodiversity
We are actively involved in addressing climate change and biodiversity loss in
Tanzania. Our initiatives focus on community education regarding environmental
care, promoting smart agriculture and tree planting, facilitating access to clean
energy, and supporting workshops related to the climate change agenda.

47
Finance Director’s review
We have a strong track record of driving operational
efficiencies and limiting cost growth through various
transformational and tactical cost containment initiatives
aimed at delivering cost efficiency.
This year, we have had various cost pressures emanating from global headwinds
as well as operational headwinds. The increase in global fuel price contributed
significantly to the increase in energy cost, while chipset shortage led to an
increase in acquisition cost as well as devices cost. Operationally, the increase in
expenses was mainly contributed by the additional investments including new
technologies such as 5G and annual escalation of service contracts, particularly
relating to tower leases. We were pleased that, our cost containment measures
delivered more than TZS49 billion savings – which partially mitigated the
increase in expenses and delivered an improved company profitability.
Hilda Bujiku
Finance Director

Year-on-year
Consolidated 2023 2022 % Change
Service revenue (TZs m) 1 053 762 956 515 10.2
of which
Mobile voice revenue (TZs m) 283 547 286 985 (1.2)
M-Pesa revenue (TZs m) 357 136 329 557 8.4
Mobile data revenue (TZs m) 273 702 203 985 34.2
Digital & VAS revenue (TZs m) 35 797 36 294 (1.4)
Mobile incoming revenue (TZs m) 46 340 48 105 (3.7)
Fixed revenue (TZs m) 19 509 15 328 27.3
Revenue (TZs m) 1 073 018 971 025 10.5
EBITDA (TZs m) 329 398 300 341 9.7
EBITDA margin (%) 30.7 30.9 (0.2)pp
Capital expenditure (TZs m) 155 981 173 955 (10.3)
Capital intensity1 (%) 14.5 17.9 (3.4)pp
Customer market share2 (%) 1st 1st maintained
Active customers3 (thousand) 16 735 15 368 8.9
30 days’ active M-Pesa customers4 (thousand) 8 197 6 833 20.0
Active data customers5 (thousand) 8 748 7 603 15.1
MoU per month6 275 232 18.5
ARPU7 (shillings per month) 5 328 5 132 3.8
Number of employees 581 560 3.8
Number of sites
5G 231 – n/a
4G 2 353 1 963 19.9
3G 3 096 2 868 7.9
2G 3 447 3 388 1.7
Weighted NPS8 (position relative to competitors) 1st 1st maintained

1. Capital expenditure as a percentage of revenue.

2. Tanzania Communication Regulatory Authority’s quarterly communication statistics as at March 2023.
3. Active customers are based on the total number of mobile customers using any service during the last three months. This includes customers paying a monthly fee that entitles
them to use the service even if they do not actually use the service and those customers who are active while roaming.
4. 30 days’ active M-Pesa customers are the number of unique customers who have generated billable transactions during the past 30 days.
5. Active data customers are based on the number of unique users generating billable data traffic during the month. Also included are users on integrated tariff plans, or who have
access to corporate APNs, and users who have been allocated a revenue generating data bundle during the month. A user is defined as being active if they are paying a
contractual monthly fee for this service or have used the service during the reported month.
6. Minutes of use (‘MoU’) per month is calculated by dividing the average monthly minutes (traffic) during the period by the average monthly active customers during the period.
7. ARPU is calculated by dividing the average monthly service revenue by the average monthly active customers during the period.
8. The net promoter score (‘NPS’) is an index ranging from –100 to 100 that measures the willingness of customers to recommend an operator’s products or services to others. It is
used as a proxy for gauging the customers’ overall satisfaction with an operator’s product or service and the customers’ loyalty to the brand. For each operator, responses are
collected from customers who use its products or services as either the primary or alternative means of telecommunication (a ‘primary user’ or ‘alternative user’). Responses from
primary and alternative users are then weighted by the natural proportion of primary and alternative users for that operator in order to calculate the weighted NPS.

48 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Revenue
Service revenue grew 10.2% to TZS1 053.8 billion supported by a strong Fixed revenue2 increased 27.3% to TZS19.5 billion with contribution to
performance in data, M-Pesa and fixed revenue streams – a reflection of service revenue expanding, albeit still at a lower rate. The growth was
our strategic priorities. Our commercial execution focused on growing the underpinned by accelerated customer acquisition following increased
customer base through customer acquisition and retention, and investment in the infrastructure. We look forward to leverage on our
increased adoption of our transformative services in M-Pesa, while also investment to further expand on customer reach and capture
driving increased usage per customer and adoption across our services. opportunities in the fixed broadband market in both business and
During the year, we grew our customer base by close to 1.4 million consumer segments.
through both on the ground acquisition and segmented retention
initiatives, and sustained our customer market share leadership at 30.0%1. Total expenses3
Adjusting for the TZS29.3 billion estimated impact from the levy on Total expenses increased 10.0% to TZS740.3 billion. We realised
mobile money transfer and withdrawal transactions in the first quarter of TZS49.0 billion of savings from our cost transformation initiatives, which
the year, underlying service revenue grew 13.2%. assisted us in mitigating inflationary pressures associated with the global
Mobile voice revenue declined 1.2% to TZS283.5 billion reflecting energy prices and chipset shortages.
pressure on average revenue per customer (ARPU), which was partly Our direct expenses grew 16.8% to TZS349.5 billion, reflecting the
offset by growth in active customers. The ARPU decline of 9.4% was due service revenue growth and investment in customer acquisition and
to the continued impact of competitive pricing pressure on voice retention. The expenses to drive growth included subsidies on starter
bundles, leading to 22.0% decline in average price per minute, while packs and devices, and higher commissions and interconnect expenses
minutes of use expanded 16.0%. aimed at expanding our customer reach.
M-Pesa revenue growth was 8.4%, reaching TZS357.1 billion. This marks Operating expenses4 increased 4.6% to TZS390.8 billion largely due to a
a recovery in M-Pesa revenue to the levels last reported two years ago, 6.7% increase in other operating costs as a result of higher energy costs,
prior to the disruption from the levies on mobile money. Accounting for additional investment in new technologies including 5G and contractual
the estimated impact of the levies in the first quarter, the underlying prices escalation. Staff related expenses increased by 2.2% as a result
M-Pesa revenue growth for the year was 16.6%. This strong underlying of the increase in number of staff and salary adjustments, which were
performance reflects a good uptake of our new services in M-Pesa partly offset by our cost transformation initiatives. Publicity expenses
particularly lending, insurance, IMT and merchant payments. Revenue were down 9.7% as we realised cost savings from our cost containment
contribution from these services more than doubled to exceed 25%, initiatives.
offsetting the decline in our traditional peer-to-peer transfers and cash
out, a reflection of a considerable diversification built in our products
portfolio. The growth trends in M-Pesa performance indicators sets up
EBITDA
EBITDA increased 9.7% to TZS329.4 billion, as a result of good growth in
a positive outlook for the future of M-Pesa business and hence our
service revenue and cost containment measures which helped to
contribution towards financial inclusion. M-Pesa service is at the core
mitigate pressures on expenses. Adjusting for the TZS16.3 billion
of our purpose-led strategy in supporting financial inclusion agenda,
estimated levy impact, underlying EBITDA grew 15.1%.
contributing positively to the country’s social-economic development,
as well as individual customers and agents’ personal finances.
Capital expenditure5
Mobile data revenue was pivotal to our overall service revenue During the year, our capital expenditure was TZS156.0 billion, equivalent
performance and grew 34.2% to TZS273.7 billion, expanding the to 14.5% of our revenue. Investment in the latest technologies is critical
contribution to service revenue by 4.6pp to reach 26.0%. Data revenue for capacity expansion, supporting new services and overall improvement
growth was driven by a 16.6% increase in data ARPU and 15.1% growth in customer experience. In the second quarter of the year, we started
in customers, reflecting strong demand for data services supported by rolling out 5G sites, becoming the first operator to launch 5G technology
our continued investment into the network and the acceleration of in the country. In addition to the 5G roll out, we invested in widening our
smartphone adoption. The monthly average usage per customer broadband coverage, capacity enhancement, and modernization of our IT
increased 9.5% to 1.9 gigabytes driven by segmented offers under infrastructure. We rolled out 390 incremental 4G sites, 228 additional 3G
our ‘Just for You’ umbrella, supported by our world-class CVM and sites and 59 additional 2G sites to further extend our network coverage,
machine learning platforms. Smartphone users grew 27.9% to 5.3 million ending with 2 353 4G sites and 231 5G sites across the country. We also
equivalent to 60.3% penetration of our data customers, with growth deployed 283 kilometres of fibre, closing the year with more than
supported by investment in device subsidy and expanding our share of 4 5006 kilometres of fibre in our network. Investment in the data network
open market device sales. supported 26.0% increase in total traffic and a shift in data traffic from
Digital & VAS revenue, comprising of airtime advance credit service (ACS) 3G to 4G. Our 4G network carried close to 70% of our total data traffic
and value added services (VAS), declined 1.4% to TZS35.8 billion, with compared to less than 60% a year ago. Increasing data adoption and
revenue upside from higher product penetration offset by a strategic usage is also critical in realising our commitment to support creation
decision taken to address customers experience from some of the of an inclusive digital society.
products’ design.
Spectrum acquisition
Mobile incoming revenue declined 3.7% to TZS46.3 billion. The decline In October 2022, through three successful bids in a spectrum auction
was primarily due to 21.8% lower average incoming price per minute, conducted by the TCRA, we secured low and mid-band spectrum for the
following a 23.1% drop in mobile termination rate (MTR) from TZS2.6 to one available block of 700MHz, the two available blocks of 2 300MHz and
TZS2.0 per minute starting January 2022 in line with the regulatory glide one of the four blocks of 2 600MHz (TDD), for a total acquisition price of
path. The decline in price was partly offset by 23.3% higher incoming TZS143.1 billion (US$63.2 million payable in three tranches over an
minutes, driven by aggressive market competition in voice offers, and 18-month period). This acquisition is in line with our long-term strategy
growth in customers. and is critical in driving mid-to-long term shareholders’ value creation.

1. Tanzania Communication Regulatory Authority quarterly statistics report as at March 2023.

2. Fixed revenue was previously included under ‘Other revenue’. There is no impact on overall service revenue as a result of this disclosure change.
3. Excluding depreciation, amortisation and impairment losses.
4. Operating expenses includes staff expenses, publicity expenses and other operating expenses.
5. Excluding investment in Spectrum.
6. Include both on-built and leased fibre.
49
Finance Director’s review continued

Summarised consolidated financial statements

Summarised consolidated statement of profit or loss and other

comprehensive income
2023 2022 We generated TZS1.1 trillion revenue up 10.5%, largely
TZS m Audited Audited supported by 10.2% service revenue growth underpinned by
Revenue 1 073 018 971 025 good results in data, M-Pesa and fixed revenue – reflecting
good strategy execution. This performance has proven the
Total expenses (740 261) (672 665) resilience of our business, with emerging revenue streams
Direct expenses (349 470) (299 185) covering for some of declining revenue buckets.
Staff expenses (65 230) (63 823)
Publicity expenses (27 255) (30 184) During the year our total expenses increased 10.0% to
Other operating expenses (298 306) (279 473) TZS740.3 billion. This increase was partly mitigated by a
Depreciation and amortisation (248 306) (236 201) pleasing TZS49.0 billion savings realised from our cost
Net (charge)/release of credit losses transformation initiatives. The year had challenges from various
on financial assets (2 974) 2 275 cost pressures emanating from global headwinds as well as
operational headwinds. The increase in global fuel price
Operating profit 81 477 64 434 contributed significantly to the increase in energy cost, while
chipset shortage led to an increase in acquisition cost as well
Finance income 24,463 25 837 as devices cost. Our direct expenses grew 16.8% to TZS349.5
Finance costs (76 650) (85 544) billion, reflecting the service revenue growth and investment in
Net loss on foreign currency customer acquisition and retention. The expenses to drive
translation (2 939) (1 548) growth included subsidies on starter packs and devices, and
higher commissions and interconnect expenses aimed at
Profit before tax 26 351 3 179 expanding our customer reach. Operationally, the 6.7%
Income tax credit/(expense) 18 205 (23 442) increase in other operating expenses was mainly contributed
by the additional investments including new technologies such
Profit/(loss) for the year 44 556 (20 263) as 5G and annual escalation of service contracts, particularly
Other comprehensive income – – relating to tower leases. Staff related expenses increased by
2.2% reflecting the increase in number of staff and salary
Total comprehensive adjustments, partly offset by our cost transformation initiatives.
income/(loss) for the year, Publicity expenses were down 9.7% as we realised cost savings
from our cost containment initiatives.
net of tax1 44 556 (20 263)
Basic and diluted earnings Depreciation and amortisation charge increased 5.1% to
per share (TZS) 19.9 (9.1) TZS248.3 billion, reflecting additional investments made in
network, IT systems and newly acquired spectrum.
1. All attributable to the owners of the parent since there is no non-controlling
interest in the Group’s subsidiaries.
Net (charge)/release of credit losses on financial assets relates
to impairment charges on financial assets. The current year
increase is significantly attributable to the increase in
Earnings per share increased over 200% to TZS19.9 or TZS2.5 on receivables from airtime advance service in line with business
an underlying basis as a result of increased profit after tax, growth. Prior year decrease was driven by collection of
supported by operating profit growth and the recognition of a previously impaired financial assets.
deferred tax asset in relation to the GSM business.

Finance income declined 5.3% to TZS24.5 billion as a result

The tax credit of TZS18.2 billion (FY22: a tax expense of of lower interest income from M-Pesa cash balances partly
TZS23.4 billion) reflects the recognition of a TZS50.9 billion offset by higher interest income from cash investments. We
deferred tax asset in relation to the GSM business which reflects an also had lower interest income on M-Pesa balances due to
improved medium-term profitability outlook. The deferred tax reduced interest rates payable on trust balances in line with
asset offsets the tax expense incurred by our M-Pesa Limited regulated rates.
subsidiary which was also lower due to reduced profits, an impact
of the levy and increased operational costs.
Finance costs declined 10.4% to TZS76.7 billion due to a
decline in M-Pesa interest paid resulting from lower interest
income earned following reduced interest rates payable on
trust balances in line with regulated rates. We also had a
decrease in lease interest costs as a result of settlement of
matured obligations on the liabilities relating to the towers
lease.

50 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Summarised consolidated statement of financial position

2023 2022 The decrease is mainly driven by the depreciation charge,

TZS m TZS m partially offset by the investments made during the year.
Non-current assets 1 314 691 1 191 715
Property and equipment 965 176 1 014 626 The increase is mainly driven by TZS143 billion capitalised
Spectrum acquisition cost, partly offset by amortization
Intangible assets 210 233 76 681
cost during the year.
Capacity prepayments 40 339 44 582
Goodwill 1 639 1 639
The decrease is mainly driven by amortization of the
Income tax receivables 33 098 41 011 prepaid right of way fees for the fibre infrastructure, partially
Trade and other receivables 11 853 11 388 offset by additional investment as well as reallocation from
Deferred tax asset 52 353 1 788 long term capacity prepayment during the year.

Current assets 897 149 846 914

The decrease is due to settlements made on closed
Capacity prepayments 16 916 15 864 Corporate Income Tax assessments post mediation process.
Inventory 3 075 2 597
Trade and other receivables 115 771 112 570 The increase is mainly driven by the recognition of deferred
Income tax receivable 15 439 22 836 tax asset TZS50.9 billion during the year in relation to the
Mobile financial deposit 509 358 436 086 GSM business which reflects an improved medium-term
Cash and cash equivalents 236 590 256 961 profitability outlook.

Total assets 2 211 840 2 038 629 The decrease is due to settlements made on closed
Equity and liabilities Corporate Income Tax assessments post mediation process.
Equity 821 723 777 324
Share capital 112 000 112 000 The increase is driven by the recovery in M-Pesa business
post levy reduction.
Share premium 442 435 442 435
Capital contribution 27 698 27 698
The decrease is mainly driven by the TZS73.9 billion, initial
Retained earnings 239 590 195 191 50% payment made on the acquisition of new spectrum,
Non-current liabilities 400 225 451 764 partly offset by the improved cash generation from business
operations.
Lease liabilities 394 137 446 044
Government grants 20 143
The increase is driven by profit generated during the year
Trade and other payables – 378 driven by improved other business performance and
Provision 6 068 5 199 recognition of deferred tax asset.
Current liabilities 989 892 809 541
Lease liabilities 99 203 60 472 The increase is mainly driven by new lease contracts
acquired during the year, partly offset by payments made.
Licence payable 72 168 –
Trade and other payables 301 026 300 006
This relates to 50% price of spectrum acquired during the
Mobile financial payable 509 358 436 086 year, which is payable in two trenches in financial year 2024.
Government grants 513 1 218
Provisions 7 624 11 759
The increase is driven by recovery in M-Pesa business post
levy reduction.
Total liabilities 1 390 117 1 261 305

Total equity and liabilities 2 211 840 2 038 629

51
Finance Director’s review continued
Summarised consolidated financial statements continued

Summarised consolidated statement of cash flows

TZS m 2023 2022 The increase was driven by improved

Cash flows generated from operations 391 390 316 748 business performance and improved
collections from customers partly offset by
Income tax paid (17 050) (43 191) payments made to suppliers.
Interest paid on tax liabilities (277) (5 753)
Net cash flows generated from operating The decrease is primarily due to lower
activities 374 063 267 804 taxable profit in our M-Pesa business due to
an increase in operational costs.
Cash flows utilised in investing activities
Additions to property and equipment,
The decrease is mainly due to a once off
and intangible assets (228 263) (142 153)
interest paid last year in relation to the prior
Proceeds from disposal of property and equipment 500 6 years tax disputes that were settled.
Government grant received 4 143 4 991
Finance income received 7 792 7 219 The increase is mainly driven by increased
(Increase)/decrease in cash held in restricted capital investment including TZS73.9 billion,
deposits (73 272) 8 097 50% initial payment on spectrum acquisition
price.
Interest received from M-Pesa deposits 16 671 18 618
Net cash flows utilised in investing activities (125 885) (103 222)
Relates to funds received on completed
Cash flows utilised in financing activities projects for rural and special areas coverage
Dividend paid (203) (209) under the universal communications service
Interest paid on other borrowings amount (39) – access fund (UCSAF) projects during the year.
Interest paid on lease liabilities (57 098) (60 871)
Payment of lease liabilities – principal (48 140) (69 183) The increase is mainly driven by higher
M-Pesa deposits from customers post levy
Interest paid to M-Pesa customers (15 556) (20 043) reduction.
Net cash flows utilised in financing activities (121 036) (150 306)
Lower interest is due to reduced interest
Net increase/(decrease) in cash and cash rates payable on trust balances in line with
equivalents (19 402) 14 276 regulated rates.
Cash and cash equivalents at the beginning
of the year 256 961 244 257
This relates to payment of dividends
Effects of exchange rate changes on cash and declared in the prior years now claimed by
cash equivalents held in foreign currencies (969) (1 572) shareholders.
Cash and cash equivalents at the
end of the year 236 590 256 961 The decrease is mainly driven by expired
lease contracts, payment terms realignment,
and new lease contracts secured during the
year.

The decrease reflects lower interest earned

on M-Pesa trust balances in line with lower
regulated interest rates.

52 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

53
 Our leadership
team
We have a unitary Board with 12 directors, the majority Appointed in March 2018
of whom are non-executive directors. Our Chairman • Commercial strategist.
• Extensive telecoms technology
is an independent non-executive director. knowledge and emerging market
experience.
• Strategic leadership expertise.

Our Board Diego Gutierrez (47)

R

Chairman Appointed January 2022

Chairman of Nomination Committee • Financial planning and strategy
Appointed in November 2020 formulation.
• 12 years experience across the
• Legal expertise. Vodafone Group.
• Arbitrator.
• Government relations.

Thomas B Mihayo (76) Sudhersan Ramasamy (37)

N

Managing Director Vodacom Tanzania PLC Appointed in August 2017

• Extensive talent management knowledge
Appointed in October 2022 and experience.
Non-executive directors

• International leadership and operational experience. • Expertise in human resources best

• Strategic business transformation. practice.
• Commercial execution with an exceptional track • International operational experience.
Executive directors

record of growing businesses.

Matimba Mbungela (51)

R N
Philip Besiimire (47)
Appointed in April 2020
Finance Director Vodacom Tanzania PLC • Law and Public Policy experience.
• Corporate Governance expertise.
Appointed in January 2022
• Leadership and Stakeholder
• Strong financial expertise. Management.
• Experience in other emerging markets.

Nkateko Nyoka (60)

Hilda Bujiku (44)
Appointed in July 2022
• Astute business leader.
A ARCC Appointed in September 2022 • 19 years of finance, management, and
R RemCo • Financial and Venture Capital consulting experience, of which 13 have
expertise. been in telecommunications across both
N NomCo • Board member with international emerging and developed markets.
leadership experience. • Strong execution of innovative products
Independent non-executive directors

and offerings.

Sitholizwe Mdlalose (43)

Kanini Mutooni (47)
A
Appointed in April 2020.
Appointed in November 2017 • Diverse international financial experience.
• Financial expertise. • Strategic leadership expertise.
• Government relations. • M&A skills.
• Corporate governance expertise.

Raisibe Morathi (53)

Margaret Ikongo (66)
A R N

Appointed in November 2017 Appointed in April 2017

• Corporate governance expertise. • Corporate Governance expertise.
Secretary
Company

• Operational and strategy execution

experience.
• Financial expertise.

Thembeka Semane (47) Caroline Mduma (46)

A

54 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Executive Committee

Managing Director
Joined Vodacom in 2022

Philip Besiimire (47)

External Affairs Director and

Finance Director Vodacom Foundation
Joined Vodacom in 2012 Joined Vodacom in 2023

Hilda Bujiku (44) Zuweina Farah (37)

Consumer Business Unit Director Customer Service Director

Joined Vodacom in 2017 Joined Vodacom in 2012

Linda Riwa (36) Harriet Atweza Lwakatare (45)

M-Commerce Director Human Resources Director

Joined Vodacom in 2014 Joined Vodacom in 2018

Epimack Mbeteni (45) Vivienne Penessis (48)

Enterprise Business Unit Director Digital Director

Joined Vodacom in 2017 Joined Vodacom in 2002

Arjun Dhillon (43) Nguvu Kamando (48)

Network Director Risk and Compliance Director

Joined Vodacom in 2007 Joined Vodacom in 2020

Andrew Lupembe (50) Tax Agapinus (58)

Legal and Regulatory Director Billing and IT Director

Joined Vodacom in 2008 Joined Vodacom in 2003

Olaf Mumburi (47) Athumani Mlinga (54)

55
Corporate
governance
report
Statement of compliance
Vodacom Tanzania Public Limited Company (‘Vodacom
Tanzania’) is committed to the highest standards of
The following diagram shows Vodacom
business integrity, ethics and professionalism. Tanzania’s governance structure as at
31 March 2023
Corporate governance principles include discipline,
independence, responsibility, fairness, social responsibility,
transparency and the accountability of directors to all
stakeholders. These principles are entrenched in Board
Vodacom Tanzania’s internal controls and policy procedures Board committees
governing corporate conduct and are aligned with the
Capital Markets and Securities Authority’s guidelines on Remuneration Committee

corporate governance practices by public listed companies Audit, Risk and Compliance Committee
in Tanzania. Nomination Committee

Ethical leadership
The Board accepts collective responsibility for defining how ethics and
ethical behaviour should be implemented in Vodacom Tanzania. This
includes setting out the conduct of individual Board members, to ensure that
they act with integrity, competence, responsibility, accountability, fairness
and transparency. These characteristics set the tone from the top to support Managing director
an ethical culture within Vodacom Tanzania.
Executive Committee
Board leadership and committees External Affairs
Board Finance
Vodacom Tanzania has a unitary Board of 12 directors, of whom four
(including the Chairman) are independent non-executive directors, six are Customer Operations
non-executive (but not independent as they represent major shareholder), IT & Billing
and two are executive directors.
Enterprise Business Unit
The Board is satisfied that the balance of knowledge, skills, experience and
diversity on the Board is sufficient. Consumer Business Unit
Human Resources
The Board may meet for the dispatch of business, adjourn and otherwise
regulate its meetings as it deems fit. Board meetings are held periodically to Legal and Regulatory
review Vodacom Tanzania’s strategy, operational and financial performance,
as well as to provide oversight. Special Board meetings may be held as and Digital
when required. M-Commerce Business Unit
The Nomination committee regularly reviews Board and committee Risk and Compliance
succession to ensure we have the right skills and experience for the future.
Network
The Managing Director is responsible for ensuring that key management
personnel have the necessary skills, authority and resources to execute
Vodacom Tanzania’s strategy.

Accountability
The Board takes overall responsibility for Vodacom Tanzania’s success. Its role
is to exercise leadership and sound judgement in directing Vodacom Tanzania
to achieve sustainable growth and act in the best interests of its shareholders.

56 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

In line with best practice, the roles of Chairman and Managing

Director are separate. The Chairman is responsible for leading the
Board, while the Managing Director is responsible for the operational
management of Vodacom Tanzania.

The Board charter details the responsibilities of the

Board, which include:

Appointment of the Managing Director and Finance Director;

Effective oversight of Vodacom Tanzania’s strategic direction;
Approving major capital projects, acquisitions or divestitures;
E xercising objective judgment on Vodacom Tanzania’s
business affairs, independent from management;
E nsuring that appropriate governance structures, policies
and procedures are in place;
E nsuring the effectiveness of Vodacom Tanzania’s internal
controls;
Reviewing and evaluating Vodacom Tanzania’s risks;
Approving the annual budget and operating plan;
 pproving the consolidated annual and interim financial
A
results as well as all communications to shareholders;
Approving the senior management structure, responsibilities
and succession plans; and
Information and technology governance.

Directors
Vodacom Tanzania’s articles of association specifies that all directors
are subject to retirement by rotation and re-election by shareholders
at least once every three years.

Chairman
The articles of association requires the Board to elect the Chairman
annually. The Board re-elected Justice (rtd) Thomas B Mihayo to serve
as Chairman effective from November 2022. The Board is
comfortable that the Chairman is able to carry out responsibilities of
this position effectively. On the anniversary of his re-election, the
Board will consider his re-election as Chairman.

Independent advice
The Board recognises that there may be occasions where directors
consider it necessary to take independent professional advice.
This is done at Vodacom Tanzania’s expense, in accordance with
an agreed procedure.

57
Corporate governance
activities
Vodacom Tanzania PLC
Board meetings
The following table records the attendance of directors at the board meetings for the year.

5 May 12 Jul 3 Nov 7 Jan

2022 15 June 2022 25 Aug 2022 10 Nov 2023 15 Mar
Name of directors Special 2022 Special 2022 Special 2022 Special 2023
Justice (Rtd) Thomas B Mihayo
(Chairman) ü ü ü ü ü ü ü ü
Ms Margaret Ikongo ü ü ü ü ü ü ü ü
Ms Thembeka Semane ü ü ü ü ü ü ü ü
Ms Winifred Ouko X – – – – – – –
Mr Dejan Kastelic ü ü – – – – – ü
Mr Diego Gutierrez ü X ü ü X X ü ü
Mr Matimba Mbungela ü ü ü ü ü ü ü ü
Mr Nkateko Nyoka ü ü X ü ü ü ü ü
Ms Raisibe Morathi ü ü ü ü ü ü X ü
Mr Sitholizwe Mdlalose ü ü X ü ü ü X ü
Ms Hilda Bujiku ü ü ü ü ü ü ü ü
Mr Ramasamy Sudhersan ü ü ü ü ü ü ü ü
Ms Kanini Mutooni – – – – ü ü ü ü
Mr Philip Besiimire – – – – ü ü ü ü
Notes:
1. Winifred Ouko resigned as I-NED on 11 May 2022. 4. Kanini Mutooni appointed as I-NED on 1 October 2022.
2. Dejan Kastelic resigned as NED on 1 July 2022. 5. Sitholizwe Mdlalose appointed as NED on 1 July 2022.
3. Sitholizwe Mdlalose resigned as MD on 1 July 2022. 6. Philip Besiimire appointed as MD on 15 October 2022.

Audit, Risk & Compliance Committee meetings

The following table records the attendance of members at the ARC Committee meetings for the year.
5 May 12 Jul 2 Nov 7Jan
2022 15 June 2022 25 Aug 2021 10 Nov 2023 16 Mar
Name of members Special 2022 Special 2022 Special 2022 Special 2023
Ms Margaret Ikongo (Chairperson) ü ü ü ü ü ü ü ü
Ms Thembeka Semane ü ü ü ü ü ü ü ü
Ms Winifred Ouko ü – – – – – – –
Ms Kanini Mutooni – – – – ü ü ü ü
Notes:
1. Winifred Ouko resigned on 11 May 2022.
2. Kanini Mutooni’s appointment became effective on 1 October 2022.

58 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Remuneration Committee meetings

The following table records the attendance of members at the Remuneration Committee meetings for the year.
Name of members 14 Mar 2022 15 June 2022 25 Aug 2022 15 Mar 2023
Ms Winifred Ouko (Chairperson) ü – – –
Mr Diego Gutierrez ü X ü ü
Mr Matimba Mbungela ü ü ü ü
Margaret Ikongo (Interim Chairperson) – ü ü ü
Note:
1. Margaret Ikongo was appointed Interim Chairperson effective from May 2022.

Nomination Committee meetings

The following table records the attendance of members at the Nomination Committee meetings for the year.
Name of members 14 Mar 2022 8 Nov 2022 15 Mar 2023
Judge (Rtd) Thomas B Mihayo (Chairman) ü ü ü
Ms Margaret Ikongo ü ü
Ms Winifred Ouko ü – –
Mr Matimba Mbungela ü ü ü
Note:
1. Margaret Ikongo was appointed as a member effective from May 2022.

M-Pesa Limited
Board meetings
The following table records the attendance of directors at the M-Pesa Limited board meetings for the year.
Name of directors 13 June 2022 24 Aug 2022 9 Nov 2022 15 Mar 2023
Mr Sitoyo Lopokoiyit (Chairman) ü ü ü X
Mr Christopher Williamson ü ü X ü
Mr Olaf Mumburi ü ü ü ü
Mr Epimack Mbeteni ü ü ü ü
Ms Hilda Bujiku ü X ü ü
Mr Sitholizwe Mdlalose ü – – –
Mr Philip Besiimire X X X ü
Notes:
Sitholizwe Mdlalose resigned on 1 July 2022.
Philip Besiimire was appointed on 11 Nov 2022.

Audit, Risk & Compliance Committee meetings

The following table records the attendance of members at the ARC Committee meetings for the year.
Name of members 13 June 2022 24 Aug 2022 9 Nov 2022 15 Mar 2023
Mr Christopher Williamson (Chairman) ü ü X ü
Mr Olaf Mumburi ü ü ü ü
Hilda Bujiku ü X ü ü

59
Remuneration
report 2023
Letter from the Interim Chairperson of the Remuneration Committee

Dear Shareholders and other interested parties

It is my pleasure to present Vodacom Tanzania’s 2023
remuneration report on behalf of the Board. This report
provides a concise review of our remuneration
philosophy and policy for executive and non-executive
directors, and briefly describes how the policy has been
implemented over the year.

Margaret Ikongo
Interim Chairperson of the Remuneration Committee

Our role as the Remuneration Committee is to advise the Board on all Looking ahead, we recognise the continued work on retaining talent,
matters relating to the remuneration of executive directors, and to given the heightened competition for technical and leadership skills,
ensure that the Company provides remuneration that is fair and particularly from banks and new start-ups who have been hiring
responsible, and that will attract, retain, and motivate executives of the aggressively from our industry. I am confident, however, that we have
highest calibre, tasked with maximising long-term shareholder value by the systems and leadership team in place to ensure that we continue to
delivering on the Company’s strategic objectives. We continuously attract, develop and retain top talent. Our new managing director,
review our remuneration policies and practices to ensure full Philip Besiimire, has brought the same passion, energy and team
compliance with legislation and guidelines issued by the Capital Markets building spirit as his predecessor, and we are already seeing the benefits
and Securities Authority (CMSA), and to address shareholders’ interests. of his approach. This stands us all in good stead for the future.

Looking back on the Committee’s activities this year, it has been a good The Committee has considered the disclosure requirements of the
year in which we achieved almost all our targets. It has been particularly Capital Markets and Securities Act, 1994 and we are satisfied that the
encouraging in terms of building a positive team spirit, where we have following report complies with the guidelines on corporate governance
seen some very good achievements, with the Company maintaining its practices by public listed companies in Tanzania, while being conscious
top position across the Vodafone group for its Team Spirit Index and of disclosing individual or market sensitive information.
engagement scores. We have continued to make good progress this
year in promoting gender equality, ensuring effective succession I would like to thank my fellow committee members for their support
planning, and digitising our internal processes. I would also like to single this year.
out the Company’s excellent safety performance, with an eleventh year
of fatality-free performance. It is pleasing to see that these various
efforts have been recognised externally, with the Company receiving
Margaret Ikongo
numerous awards for its activities, including Top Employer certification
Interim Chairperson of the Remuneration Committee
for a sixth consecutive year.
13 July 2023

60 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

In accordance with the CMSA’s guidelines on On an annual basis, we conduct remuneration benchmarking and award increases in the GP
corporate governance practices by public listed according to the market, individual performance and potential. Individual performance and
companies in Tanzania, this report discloses potential assessment is determined through our talent management and performance
Vodacom Tanzania’s policies for remuneration for development processes. The outcome of these processes also influences the awarding of
the executive directors and non-executive short and long-term incentives in the future.
directors specifically the quantum and
component of remuneration for directors Our short-term incentive, in the form of an annual cash bonus, is linked to achieving
including non-executive directors on a financial, strategic and operational objectives and the executive’s performance against their
consolidated basis. objectives. The pool available for short-term incentives is determined by financial
performance of the Company against previously set and agreed targets.

Executive directors who are seconded to work for Vodacom Tanzania are subject to the
Our remuneration philosophy,
long-term incentive scheme of Vodacom Group Limited where an annual allocation of
policy and framework for the Vodacom Group Limited shares are made by their respective employer. This encourages
current year applicable to ownership and loyalty, and supports the Vodacom objective to retain valued employees.
executive directors Our aim is to The scheme is a full ownership scheme; as a result, participants receive dividends from the
attract, retain and motivate award date although the value of the shares can only be realised after a three-year vesting
period, to the extent that the vesting conditions have been met.
executives of the highest calibre,
while at the same time aligning Remuneration disclosure of executive and
their remuneration with
non-executive directors
shareholders’ interests and best
practice Executive directors remuneration – guaranteed pay
The remuneration for executive directors was reviewed taking into consideration market
benchmarking and risks associated with retention of key management personnel.
Our approach to reward is holistic, balanced
across the following elements: The disclosure presented in this annual report are based on awards to qualifying directors
z Guaranteed package (GP); where all remuneration decisions have been made in total compliance with the
z Variable short-term incentive (STIP); remuneration policy as approved previously by shareholders. There have been no known
z Variable long-term incentive (LTIP); deviations from policy in the current financial year.
z Various recognition programmes;
The disclosure of executive and non-executive directors’ remuneration is summarised in the
z Individual learning and development
table below, and also reported in Note 35 (Related parties) of the consolidated annual
opportunities; financial statements on page 129.
z Stimulating work environment; and
z Well-designed and integrated employee Directors Board ARCC Remco Nomco Total
wellness programme. TB Mihayo 150 000 150 000
M Ikongo 30 000 15 000 12 000 3 000 60 000
Executive directors adhere to a ‘total cost to K Mutooni 30 000 8 000 38 000
company’ philosophy, which we refer to as the T Semane 30 000 8 000 38 000
guaranteed package (GP). Contributions to D Gutierrez1 30 000 4 000 34 000
medical aid, retirement funding and insured M Mbungela1 30 000 4 000 3 000 37 000
benefits are included in the GP. N Nyoka1 30 000 30 000
S Mdlalose1 30 000 30 000
The above elements are underpinned and S Ramasamy1 30 000 30 000
reinforced by our performance development (PD) R Morathi1 30 000 30 000
and talent management processes. H Bujiku –
Our policy is to reward our executives for their P Besiimire –
contributions to our strategic, financial and 477 000
operating performance. To be a top employer in
our industry we need to attract, develop and 1.  Fees paid to Vodacom Group Ltd and not the individual director.
retain top talent and intellectual capital, both These amounts represent gross remuneration in US$, inclusive of all taxes (including withholding tax) and are
locally and internationally. payable in Tanzanian shillings for local directors, South African rand for South African directors and United
States dollar for other directors. Payments are made on a quarterly basis in arrears for a minimum of four
ordinary meetings per annum, three special board meetings and an AGM or any EGM as may be required. In the
event of resignation, directors are paid on pro-rated basis up to the resignation date.

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Consolidated annual financial
statements
Contents
63 Report of the directors
81 Statement of directors’ responsibilities
82 Declaration by the head of finance
83 Report of the independent auditor

Consolidated and separate financial statements

86 Consolidated and separate statements of profit or loss and
other comprehensive income
87 Consolidated and separate statements of financial position
88 Consolidated and separate statements of changes in equity
89 Consolidated and separate statements of cash flows
90 Notes to the annual financial statements

62 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Report of the directors

for the year ended 31 March 2023
Introduction
The directors present their report together with the audited consolidated and separate financial statements of Vodacom Tanzania Public Limited
Company (the ‘Company’), and its subsidiaries (together, the ‘Group’) for the year ended 31 March 2023. The Governing Board’s Report has been
prepared in accordance with the Tanzania Financial Reporting Standards (TFRS) No. 1, The Report by Those Charged with Governance.

Vodacom Tanzania PLC profile

Vodacom Tanzania is a Tanzania’s leading communications company providing a wide range of services for consumers and enterprise including voice,
data, messaging, financial services, and enterprise solutions to over 16.7 million customers (2022: 15.4 million).
Vodacom Tanzania was listed on the Dar es Salaam Stock Exchange on 15 August 2017. The Group is controlled by Vodacom Group Limited,
incorporated and domiciled in the Republic of South Africa which effectively owns and controls 75.00% (2022: 75.00%) of the Company’s issued
shares. The Group’s ultimate parent is Vodafone Group Plc, incorporated and domiciled in the United Kingdom.

Nature of business operations

The Group conducts the business of both a mobile network operator and mobile financial services provider in Tanzania. The Group provides other
communications services, including but not limited to those related with fixed line connectivity.
The group also offers comprehensive portfolio of access technologies and data solutions to help organizations of all sizes achieve the agility they
need to compete successfully in a connected world.

Core purpose
The core purpose is ‘connecting for a better future’. The United Nations Sustainable Development Goals (UN SDGs) provide the best articulation of
what that ‘better future’ looks like, setting a clear long-term agenda to end poverty, protect the planet and ensure prosperity for all by 2030. Vodacom
Tanzania is committed to playing its role, as a private sector company, in the attainment of these goals, supporting governments, communities,
businesses and individuals to build a better future. Through our core business of providing increased access to reliable and accessible data, messaging,
voice and mobile money services, we are making a valuable contribution to meeting national and global developmental objectives.

Our strategic priorities

Our strategic priorities are designed to drive growth through new businesses while protecting our core business with the priorities grouped into the
following key strategic pillars:
1. Vigorously defend mobile
2. Expand and escalate M-Pesa growth
3. Relentlessly pursue Fixed
4. Innovate and lead Enterprise
5. Extract Wholesale value
6. Leveraging our brand position
Vodacom Tanzania is a leading mobile network operator (MNO) in Tanzania with a strong purpose-led business model and a compelling track‑record
of effective management and quality execution in delivering on our strategy. Operating in a dynamic and rapidly digitising economy, we see exciting
opportunities to generate sustained revenue growth over the medium and long-term, while making a sustantial contribution to the country’s
socioeconomic development, as the country’s only publicly listed (MNO).

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Report of the directors continued

Operating and financial review

Performance highlights
Details of the results for the year are set out in the consolidated and separate statements of profit or loss and other comprehensive income.
Revenue
Service revenue increased by 10.2% to TZS1 053 762 million. The growth was driven by a strong result from mobile data, a recovery in M-Pesa and
accelerating fixed growth. The M-Pesa recovery was partially supported by reduction in government levies on mobile money transfer and withdrawal
transactions, following a collaborative process to drive financial inclusion. In addition to the levy reduction, the M-Pesa’s business recovery was also
supported by a good uptake in our new revenue growth areas comprising of lending, insurance, international money transfers (IMT) and merchant
services.
Voice revenue declined 1.2% to TZS283 547 million reflecting pressure on average revenue per customer (ARPU), which was partly offset by growth
in active customers. The ARPU decline of 9.4% was due to the continued impact of competitive pricing pressure on voice bundles, leading to 22.0%
decline in average price per minute, while minutes of use expanded by 16.0%.
M-Pesa revenue growth was 8.4%, reaching TZS357 136 million. This marks a recovery in M-Pesa revenue to the levels last reported two years
ago, prior to the disruption from the levies on mobile money. Accounting for the estimated impact of the levies in the first quarter, the underlying
M-Pesa revenue growth for the year was 16.6%. This strong underlying performance reflects a good uptake of our new services in M-Pesa. Revenue
from these new growth areas including lending and insurance services, merchant payment service and international money transfer service increased
by over 100%, with contribution to M-Pesa revenue more than doubling to exceed 25%. This helped offset the decline in traditional M-Pesa revenue
streams, such as peer-to-peer and cash out. During the year we continued driving the uptake of our Songesha overdraft to both customers and agents.
We served more than 4 million beneficiaries with this product, with over a trillion shillings in overdraft facilities issued. Our business is built on mutual
trust and empowerment of our customers and business partners including financial empowerment. In the year, close to 100 000 agents benefited
from over TZS800 billion issued in overdraft and term loans, representing an increase of almost three fold in funds issued. These loans support agents’
float availability and also supports their existing businesses.
By enriching our M-Pesa ecosystem, we continued accelerating our payments services including ‘business to consumers’, ‘consumer to businesses’
and the merchant payment solution. In the year, these payments options processed over TZS12 trillion in value, an increase of over 80%. We
continued driving adoption of our merchant payment solution to reach over 150 000 merchants who accept payments through M-Pesa, under the
‘Lipa kwa simu’ service. In addition to generating revenue for the Company, M-Pesa service is at the core of our purpose-led strategy to support
a financial inclusion agenda, contributing positively to the country’s social-economic development, as well as individual customers and agents’
personal finances. It was encouraging that M-Pesa customers increased 1.4 million in the past twelve month to 8.2 million, up 20.0%. The total
number of transactions grew 22.5% with value transacted increasing 13.3%, to an average of over TZS5.9 trillion per month. During the year, we
also continued deepening financial inclusion through international money transfer services. We extended our money transfer services to some of
the Southern African Development Community (SADC) countries capitalizing on the changes in the governing regulations. This extension partly
contributed to the 24.2% growth in value of money sent through our IMT service. The growth trends in M-Pesa performance indicators sets up a
positive outlook for the future of M-Pesa business and hence our contribution towards financial inclusion.
Mobile data revenue was pivotal to our overall service revenue performance and grew 34.2% to TZS273 702 million, expanding the contribution to
service revenue by 4.6pp to reach 26.0%. Data revenue growth was driven by a 16.6% increase in data ARPU and 15.1% growth in customers, reflecting
strong demand for data services supported by our continued investment into the network and the acceleration of smartphone adoption. The monthly
average usage per customer increased 9.5% to 1.9 gigabytes driven by segmented offers under our ‘Just for You’ umbrella, supported by our world-
class CVM and machine learning platforms. Smartphone users grew 27.9% to 5.3 million equivalent to 60.3% penetration of our data customers, with
growth supported by investment in device subsidy and expanding our share of open market device sales.
Digital & VAS revenue comprising of airtime advance credit service (ACS) and value added services (VAS), declined 1.4% to TZS35 797 million, with
revenue upside from higher product penetration offset by a strategic decision taken to address customers experience from some of the products’ design.
Mobile incoming revenue declined 3.7% to TZS46 340 million. The decline was primarily due to 21.8% lower average incoming price per minute,
following a 23.1% drop in mobile termination rate (MTR) from TZS2.6 to TZS2.0 per minute starting January 2022 in line with the regulatory glide
path. The decline in price was partly offset by 23.3% higher incoming minutes, driven by aggressive market competition in voice offers, and
growth in customers.
Messaging revenue grew 0.6% to TZS29 034 million, due to growth in SMS customers, partly offset by 9.8% lower ARPU attributed to pricing
pressure.

Total expenses
Total expenses increased 10.0% to TZS740 261 million. Our cost transformation initiatives were a success, delivering a cost saving of more than
TZS40 billion. Despite the 0.8% decline in direct expenses in line with the decline in revenue, the competitive pressure led to higher commission to
the distribution channels as well as interconnect cost. The savings realised from our cost transformation initiatives were offset by cost pressures in our
staff expenses and other operating expenditure. Staff expenses increased by 3.6% excluding the impact of a one off adjustment in the previous year
staff expenses declined 2.8% due to realised savings from business restructuring. Other operating expenses increased 7.5% driven by a tax settlement
in relation to excise duty assessments relating to previous years, higher legal fees related to tax cases mediation, as well as increased network costs
mainly from contractual price adjustments and network expansion. Excluding the once off costs, other operating expenses grew only by 2.1%,
reflecting the strong cost containment measures executed in the year.

64 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

EBITDA
EBITDA declined 9.7% to TZS329 398 million, as a result of good growth in service revenue and cost containment measures which helped to mitigate
pressures on expenses. The underlying performance reflected strong growth in service revenue and diligent cost containment.

Operating profit
Operating profit increased 26.5% to TZS81 477 million driven by an increase in EBITDA partly offset by 5.1% increase in the depreciation and
amortisation charge, reflecting additional investments made in network,IT systems and newly acquired spectrum.

Capital expenditure
During the year, our capital expenditure was TZS299 121 million including TZS143 140 million spent on the spectrum license acquisition
(2022: TZS173 956 million). Investment in the latest technologies is critical for capacity expansion, supporting new services and overall improvement
in customer experience. In the second quarter of the year, we started rolling out 5G sites, becoming the first operator to launch 5G technology
in the country. In addition to the 5G roll out, we invested in widening our broadband coverage, capacity enhancement, and modernization of
our IT infrastructure. We rolled out 390 incremental 4G sites, 228 additional 3G sites and 59 additional 2G sites to further extend our network
coverage, ending with 2 353 4G sites and 231 5G sites across the country. We also deployed 283 kilometres of fibre, closing the year with more than
4 500 kilometres of fibre in our network. Investment in the data network supported 26.0% increase in total traffic and a shift in data traffic from 3G to
4G. Our 4G network carried close to 70% of our total data traffic compared to less than 60% a year ago.
In October 2022, through three successful bids in a spectrum auction conducted by the TCRA, we secured low and mid-band spectrum for the
one available block of 700MHz, the two available blocks of 2300MHz and one of the four blocks of 2600MHz (TDD), for a total acquisition price of
TZS143 140 million (US$63.2 million payable in three tranches over an 18 month period). This acquisition is in line with our long-term strategy and is
critical in driving mid-to long-term shareholders’ value creation.

Tax: The tax credit of TZS18 205 million(2022: a tax expense of TZS23 442 million) resulted from the recognition of a TZS50 871 million deferred
tax asset in relation to the Company’s business which reflects an improved medium-term profitability outlook. The deferred tax asset offsets the tax
expense incurred by our M-Pesa Limited subsidiary, which was also lower year-on-year due to reduced profits, as a result of the levies on mobile money
and increased operational costs.

Cash and cash equivalents: Decreased 7.9% to TZS236 590 million. The decrease is primarily due to the TZS73 573 million initial 50% payment
of the spectrum acquired in an auction which is partly offset by an increase in collection due to higher revenue.

Retained earnings: Increased 22.7% to TZS239 590 million is mainly driven by improved profitability.
Lease liabilities: Decrease 2.6% to TZS493 340 million is mainly driven by payment made for the lease contracts partly offset by new additions in
line with the network expansion, annual contractual price adjustments and the interest charge for the year.

Our business environment

Our operating context
The industry we operate in – telecoms, digital and financial services in an emerging market, poses a dynamic operating context that presents both
demanding challenges, as well as potentially rewarding commercial opportunities for innovation and growth.
We have identified four broad trends that have a material impact on our business, all broadly similar to those identified in recent previous years.
By ensuring effective execution of our strategic commitments, we believe that the Company is well positioned to manage the risks and realise the
opportunities associated with each of these trends.

An uncertain global macro-economic environment impacting a post-COVID recovery

Tanzania’s economy has shown good signs of economic recovery following the impact of the pandemic, with tourism, mining and other services all
benefiting from the lifting of global pandemic-related restrictions. This recovery has been impacted however by global and local headwinds, including
the war in Ukraine, a volatile global macro-economic environment, and a shortfall in rainfall negatively impacting local electricity production and
agriculture.
The IMF has projected economic growth for the country of 5.2% in 2023, with inflation expected to surpass the Bank of Tanzania’s target and reach
around 5.3% by year-end despite price subsidies on fuel and fertilizer. The current account deficit is projected to remain elevated in 2023 amid the
uncertain global environment. In the medium term, real GDP growth is projected to rebound to around 7%, inflation to return to less than 5%, and the
current account deficit to moderate as the global shocks subside and the authorities’ reforms start to pay off.
The war in Ukraine has impacted global food and energy prices, heightened inflationary pressures, and contributed to enhanced market uncertainty
and volatility, all of which is constraining consumer spend and general investor confidence.

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Report of the directors continued

Our business environment continued

Our operating context continued
Our response:
a. In the context of an uncertain global macro-economic outlook, we anticipate that consumer spend in Tanzania will remain under pressure for the
immediate future, further amplifying an already intense price-based competitive environment. Heightened price-based competition and subdued
consumer spending, highlights the value of providing segmented personalised offers through our customer value management systems (CVM),
relevant to our customers’ lifestyle and spend, informed by big data analytics and supported by an effective cost containment programme.
b. We strive to contribute towards economic growth and development stimulation, and mitigate some of the underlying structural challenges by
delivering on our core purpose of ‘connecting for a better future’, through our activities in three broad areas: creating a digital society, driving
inclusion for all, and protecting our planet. In our enterprise business we are exploring exciting commercial opportunities to deliver strong social
value in critical areas such as health, education, and sustainable agriculture. By focusing on our social contract and core purpose, the Company
will continue to make a meaningful contribution to the UN SDGs and help to enhance the underlying social and environmental conditions critical
to economic development and business success.

A dynamic regulatory and policy environment

Mobile network operators tend to face high levels of regulatory scrutiny in almost all markets. This is unsurprising given the scale of the contribution
of the telecoms sector to a country’s economic growth and development. In Tanzania, our activities have been significantly impacted in the recent
past by various policy developments from our two main regulators – the Tanzania Communications Regulatory Authority (TCRA) for GSM services,
and the Bank of Tanzania (BoT) covering our digital financial services – with significant impacts associated with customer and SIM registration
requirements and levies on mobile money transfers and withdrawals.
We have recently seen a much more favourable regulatory environment and improved levels of dialogue. The most significant recent regulatory and
policy developments are listed below:
a. SIM Card Registration: On 7 February 2020, new SIM Regulations were published, mandating biometric registration only and restricting the
number of SIMs held per customer. Subsequently, on 1 July 2020, the Tanzania Communication Regulatory Authority (‘TCRA’) issued a public
release that required customers who biometrically registered more than one SIM card per service provider to verify their SIM cards ownership
through their mobile phones. Furthermore, the TCRA and mobile network operators implemented an approval process that allowed customers to
request for additional SIM cards by visiting service providers’ retail outlets or an automated process through Unstructured Supplementary Service
Data (USSD). Customers are allowed to have more than one SIM card if they follow the correct approval process. On 13 February 2023, Vodacom
Tanzania barred 238 000 SIM cards which did not complete the multiple-sims declaration process as per TCRA’s directives. Subsequent to barring,
TCRA again permitted the usage of *106# and 100 to allow the barred customers to do verification through this process. As a result, over 30 000
of the barred customers have successfully verified their SIM cards and reactivated. We continue with efforts to recover barred customers.
b. Levies on airtime and mobile money transfers and withdrawals: On 30 June 2021, the President approved the Finance Act, which included
the amendments to the National Payment System Act (NPS Act) and Electronic & Postal and Communication Act (EPOCA) – introducing levies on
mobile money transfer transactions and airtime recharges.
For mobile money transfer and withdrawal transactions, a transaction value dependent levy of between TZS10 and TZS10 000 was implemented from
15 July 2021. Following our engagements and due consideration by the government, the following amendments were implemented:
3 September 2021: An initial 30% levy reduction, to a maximum levy of TZS7 000.

1 July 2022: An additional 43% reduction to the maximum levy band was passed through the Finance Act 2022, marking a cumulative 60% reduction
since the levy’s introduction. This reduction set the maximum levy chargeable at TZS4 000. The Finance Act also re-defined the scope of the levy, to
also include withdrawal and transfers through banks which were earlier excluded. The levy, which was previously chargeable on mobile transactions
only, also became applicable to transfers between mobile accounts, between bank accounts and across mobile and bank accounts. For withdrawals,
the levy was extended to capture withdrawals from automated teller machines (ATMs).

1 October 2022: Through a special supplement to the National Payment System (Electronic Money Transactions levy) (Amendment Regulations) the
maximum levy chargeable was set at TZS2 000, equivalent to 20% of the levy charged at introduction. This decision further reduced end-user charges,
and has meaningfully revived and accelerated our contribution to the financial inclusion agenda, through the use of M-Pesa services.

Our response:
a. We continuously monitor changes to regulations and licencing requirements and engage regularly with the TCRA and other regulatory authorities
to ensure compliance with all relevant regulatory requirements.
b. We have invested significantly in compliance awareness training across the company and in our distribution channel to ensure that our business
units are sensitized, including through training programs such as the ‘Doing What is Right’ Programme on legislative and regulatory requirements,
supported by an annual self-assessment.
c. We have a robust governance processes and a strong culture of compliance across the company, administered through our dedicated Risk and
Compliance department, which is charged with responsibility for monitoring, evaluating and managing risks across the company.
d. We maintain proactive relations with government and relevant regulatory bodies and tax authorities, informed by a shared understanding of the
need for inclusive economic development and the important contribution of a profitable business sector. These engagements are undertaken
individually, and through the Tanzania Mobile Network Operators’ Association (TAMNOA).

66 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
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Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

A highly competitive market

Vodacom Tanzania operates in one of the most competitive telecommunications markets in Africa, with six mobile network operators (MNOs), as well
as heightened competition from new sources, such as the growing entry of banks into digital financial services. Our three largest MNO competitors are
continuing to drive very aggressive pricing, leading to one of the lowest effective voice and data prices in Africa, which places sustained pressure on
already tight operating margins.
These low prices constrain our ability to drive our ambitious revenue growth by undermining our capacity to make some of the necessary long-term
investments in the highly capital-intensive infrastructure needed to drive a faster ‘digital dividend’ in the country.
Our response:
a. The strengthened competitive environment, sometimes from unexpected sources, highlights the importance of remaining agile, in identifying
and realising opportunities for innovation. We continuously monitor existing and new competitors, and are exploring opportunities for innovative
partnerships, including as part of a potential consolidation within the sector.
b. To compete effectively and deliver a differentiated customer experience, we maintain a strong focus on the strength and reach of our network,
the quality of our customer care, the pricing and nature of our services and devices, backed by our strong brand reputation. These are areas in
which we have demonstrated competitive performance, as evidenced for example by our sustained leadership in customer service NPS and
network speed.
c. To increase our relevance to customers, we continue enhancing our personalised ‘Just for You’ offers, providing customers with relevant services,
reflecting their usage behaviour through our strong CVM and machine learning capabilities.
d. We are continuing to engage with the government through the regulator and other relevant stakeholders on the importance of price stability
to support investments in this highly capital intensive industry.

Seizing commercial opportunities in bridging the digital divide.

Tanzania offers significant opportunities for innovation and growth in developing and rolling out enhanced connectivity and new digital services. With
a young and growing population, and comparatively low levels of internet and smartphone penetration rate, there is huge scope for the Company to
play a meaningful role in promoting digital inclusion and bridging the digital divide. This can be achieved by facilitating access to essential services,
including specifically by driving digitization opportunities in finance, education, agriculture, e-commerce, and health.
For these opportunities to be fully realised, necessary investment is required in both mobile and fixed data networks. For this to happen, it is
critical that data prices are stable and at a level that justifies the investment required in network infrastructure and digital products and services.
Equally, we need also to address challenges relating to the accessibility of digital services, particularly cost of smart devices, access to digital skills,
and levels of consumer awareness especially in rural areas. Recognising the critical importance of facilitating digital inclusion and supporting
long-term infrastructure investment, the government has also made various valuable interventions to support extension and availability of
communication services.
Our response:
To realise the valuable commercial opportunities for digital growth in Tanzania, we have overtly positioned the Company as a leading digital company
that empowers a connected society by helping to close the digital divide in Africa’s key economic sectors.
a. We are doing so by developing industry-specific digital products and services – in fields such as education, healthcare, agriculture, and financial
services, and using new technologies such as IoT – to realise fresh opportunities for revenue growth, as well as harnessing innovation to drive
positive social and environmental change.
b. We continue to invest significantly in the networks and technology of the future, fostering a company culture that attracts and develops the best
digital talent, and redefining our approaches to customer engagement.
c. We actively participate in programs to support network roll out in the underserved areas in partnership with the government through the Universal
Communications Service Access Fund (UCSAF).
d. Whenever possible, we also invest in enablers such as our recent spectrum acquisition, as well as investment on the future-ready human
resources, to support our medium-to long-term requirements.

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Report of the directors continued

Group’s key relationships

Vodacom Tanzania’s ability to deliver long-term value depends on the contribution and activities of a range of different stakeholders, and on the
quality of our relationship with them. In the table below we briefly outline those stakeholder groups who have a substantive impact on our ability
to create value; we outline their contribution to value creation, our means of engaging with them, and the stakeholders’ identified priority interests
relating to our business activities.

Stakeholder value Means of engagement Priority interests

Customers: • Call centres, retail outlets and online. • Better value offerings.
Provide the basis for • My Vodacom app, M-Pesa app,USSD, self‑help • Faster data networks and wider coverage.
revenue growth by channels. • Making it simpler and quicker to deal with us.
purchasing our products • Weighted net promoter score (‘NPS’) feedback • Converged solutions for business customers.
and services interviews and focus groups. • Privacy of information.
• Social media interaction. • Feedback on service-related issues.
• Vodacom Tanzania website. • Safety of M-Pesa transactions.
• Customised customer service.
• Managing the challenge of data-usage transparency.
• Readily available services.

Government and • Participation in public forums. • Ensuring spectrum is managed as a strategic resource.
regulators: • Engagement on draft regulations and bills. • Regulatory compliance on issues such as customer registration,
Provide access to spectrum • Engagement through industry bodies. mobile termination rates, service quality, price, security and
and operating licences, the • Publication of policy engagement papers. privacy, and safety, health and environmental performance.
basis for creating value. • Partnering on key programmes such as • Participating and promoting opportunities for economic
inclusive education, inclusive growth in development.
agriculture, and inclusive climate action. • Contribution to the tax base.
• Industry development.
• Fair market development.

Investors and • Investor interactions, including conferences, • Responsible practices to manage risks and opportunities and
shareholders: meetings, and roadshows. ensure financial growth.
Provide the financial capital • Annual and interim consolidated results. • Sound corporate governance practices.
needed to sustain and grow. • Quarterly reports. • Transparent executive remuneration.
• Annual reports, • Improved liquidity of shares.
• Preliminary announcement call and AGM. • Stable dividend policy.
• Investor relations page in our website.

Employees: • Internal website, ‘Workplace’ • Opportunities for personal and career development.
Provide the skills and inputs • Newsletters, internal magazine, and • Competitive remuneration.
needed to realise our vision. electronic communication. • Knowledge sharing across the Group.
• Employee hotline/Speak Up line. • Building the coaching capability of leaders.
• Engage App • Better understanding of reward structures.
• Leadership road shows. • Health and safety.
• Engagement surveys. • Being heard.
• Online training. • Safe working environment.
• Executives discussions – ‘fireside chat’.
• Health and welfare consultations as needed.

Suppliers: • Supplier forums. • Timely payment and fair terms.

Affect our ability to provide • Ongoing site visits. • Transparent and fair tender processes.
products and services. • Procurement processes (including tendering). • Relevant health and safety standards, and environmental, social
• Audits. and governance (ESG) expectations.
• A ‘fair’ share of the local purchases (local spend).

Communities: • Public participation where new base stations • Access to our communication services and services such as
Provide a social licence to are needed. finance, health, and education.
operate and strengthen the • Vodacom Tanzania Corporate Social • Free-to-use social media, health, education, and job sites.
socioeconomic context. Responsibility in partnership with • Responsible expansion of infrastructure.
communities. • Responsible business practices.
• Social media pages • Business existence continuity

Business partners: • Store, franchise and retail visits. • Fair treatment.

Custodians of our brand, • Management engagements. • Top management involvement with customers.
and key to delivering the • One-on-one business meetings. • Making it simpler and quicker to deal with us.
best customer experience. • Training sessions on new products and services • Being heard as partners.

Media: • Face-to-face and telephonic engagement. • Being informed of key activities and offerings.
Have a potentially • Interviews with key executives. • Transparency on our performance.
significant influence • Media releases. • Evidence of responsible business performance.
on other stakeholders’ • Roundtables.
perceptions. • Product launches.

68 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

How we sustain value

The group invests in resources and relationships impacting on value as detailed below:

People, culture and governance: Human and intellectual capital

Critical inputs (2023) Our activities to sustain value Results of our activities (2023)

• 581 employees (2022: 564) • Competitive remuneration and personal Maintained employee motivation, skills, and
• A strong Board and robust governance development opportunities diversity through:
systems. • TZS344.2 million invested in employee
• Experienced executive team training and leadership development, • TZS65.2 billion in wages and benefits
• An agile, performance-based, purpose- including upskilling employees for digital • 43.8% female representation in senior
led culture. transformation management
• Service providers delivering efficiently • Agile business processes implemented • Sustained evidence of staff satisfaction:
and effectively on agreed terms. across business units • Top Employer award for seven consecutive
• Various initiatives to further strengthen our years
existing reputation as a quality employer • 93% engagement index score in Spirit Beat
• Regular engagement with employees to survey
foster strong culture and ensure consistent • Reasonable staff turnover at 35%
delivery on targets • Increased uptake of Employee Assistance
• Sustained focus on employee, contractor Program (EAP) support for stafHealth and
and supplier safety safety performance
• No work-related fatalities for eleven
consecutive years
• Community safety in partnership with
National Traffic Police unit

Trade-offs: Investing in attracting, retaining, and developing talent in the highly competitive digital space is one of the most significant costs to
our business. While this impacts short-term financial capital, it is an essential investment in generating longer-term returns in all capital stocks.
Our commitment to driving a digital company, and effectively harnessing the role of artificial intelligence (AI), may result in pressure on some
existing traditional job functions (depleting human and social capital), but also raises opportunities in new roles. Balancing efficiency gains
(improved financial capital) against the human and social costs of job cuts (human and social capital) is a persistent potential trade-off.

Quality relationships with key stakeholders: Social and relationship capital

Critical inputs (2023) Our activities to sustain value Outcomes (2023)

• 16.7 million customers, 8.9% increase • Continued investment in ensuring network Positive customer relations
from prior year. and IT quality, strong positive customer • Leader in customer net promoter score
• Constructive engagement with regulators, experience, and segmented products and (NPS) with 20-point gap over nearest
informed by mutual trust services competitor
• Sustained levels of investor confidence • Regular and frank engagement with • Various awards received for customer
• Positive supplier relationships regulators, pursuing full compliance. service
• Trusted brand and reputation • Continuing to participate actively in • Further progress in developing smarter
government’s rural coverage agenda. personalised offerings following AI
• Regular investor communication deployment
• Delivering societal value through • Over 1300 customers have benefited from
connectivity and digital services in areas our inclusive care efforts designed to serve
such as inclusive finance, education, people with special needs.
health and agriculture
Generally positive government relations,
• Inclusive customer care initiatives
supported for example by:
• Credible governance processes
• Corporate social responsibility programs • TZS1.5 trillion total cash contribution to
public finances over last three years
• Enabling financial inclusion to more than
8.2 million M-Pesa customers.
• Building 302 Universal Communications
Access Fund sites in the past eleven years
• Various social investment initiatives years

Trade-offs: Maintaining quality relationships across all stakeholders may require trade-offs in certain relationships as we balance competing
stakeholders’ interests. For example, investing in biometric-based SIM Card registration devices required significant short- and medium-term
financial capital inputs, but enables us to meet regulatory requirements, maintain customers, and generate positive returns over the longer-term.

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Report of the directors continued

How we sustain value continued

Network and IT infrastructure: Manufactured capital
Critical inputs (2023) Our activities to sustain value Outcomes (2023)

• 3 448 base stations (1.8%) increase • Maintaining our network and IT leadership Positive results in most areas:
• 2338 km of self-built fibre (up 13.8%) through targeted investment • Positive results in most areas
• TZS156.0 investment in network • Upgrading and modernising our network and • TZS156.0 billion CAPEX investment to
(down 10.3%) IT systems. address network and IT plans
• US$63.2 million investments in • Further enhancing our IT and related systems and • 59 new 2G sites
spectrum. processes to support machine learning analytics • 228 new 3G sites
and cyber security • 390 new 4G sites
• Acquired additional four blocks of low-and mid- • 231 new 5G sites
band spectrum, a critical resource for our network • Network resilience supporting 26.0%
expansion plans growth in data carried in our network, with
• Launch of 5G technology close to 70% carried in 4G network
• 16 points lead gap on Combined network
performance NPS
• Recognised as a leading company in
Vodafone Group for cybersecurity

Trade-offs: Building and maintaining our infrastructure requires significant financial capital, and appropriate levels of human and intellectual
capital, as well as certain natural capital inputs and outcomes. An extensive network is a key basis for bridging the digital divide and sharing the
substantial social benefits of digital connectivity. As a purpose-led organisation we have committed to reducing the environmental impacts
associated with our network infrastructure and services. An important trade-off is balancing the customer and regulatory calls to reduce prices
and enhance quality, with the need to generate the financial capital needed for network investment.

Financial capital
Critical inputs (2023) Our activities to sustain value Outcomes (2023)

• TZS1 724 billion market capitalisation • Our activities to sustain value • 26.5% increase in operating profit to
(FY 2022: TZS1 724 billion) • Diversifying revenue streams TZS81.5 billion
• TZ54.9 billion free cash flow (over • Employing smart capex deployments • TZS63.3 billion operating free cash flow
200% increase) • Maintaining strong corporate governance • Service revenue up 10.2% to
structures and finance team TZS1 053.8 billion
• Realising benefits of purchasing power • EBITDA up 9.7% to TZS329.4 billion
on network equipment, devices and opex • Generated TZS44.6 billion profit after tax as
through VPC opposed to a loss in prior year.
• Leading in application of AI and CVM to increase
revenues and optimise costs

Trade-offs: There is an important trade-off between the short-term interests of certain investors and other interest groups that seek to maximise
short-term gains in financial capital, with our longer-term growth objectives that require investment of financial capital. Finding the right balance
between the short-term and long-term – and in different stakeholder interests – is a key focus in our strategic decision-making.

Natural Resources: Natural capital

Critical inputs (2023) Our activities to sustain value Outcomes (2023)

• Radio spectrum: 700, 900, 1 800, Our activities to sustain value • Estimated 32 789 tonnes CO2 emissions
2 100, 2 300 MHz bands for Mobile, • Strong focus on energy efficiency and GHG from electricity, diesel and refrigerants
and 2 300 and 3 500 for fixed 4G & 5G mitigation across our network usage (scope 1&2) (down 10.2%)
• 82.4 GWh electricity (up 19.8%) • Recycling handsets and network equipment • 759.4 tonnes of total GWP refrigerants and
• 9 020.5 kilolitres of fuel (up 46.4%) • Identifying opportunities to use IoT to promote fire suppressants replenished (down 28.0%)
• 31 114.6 kilolitres of water (up 15.7%) resource efficiency, for example through smart • Proportionate increase in energy
• 31 963.2 tons of refrigerants and fire metering and vehicle tracking consumption relative to increase in network
suppressants used (GHG contributor) • Dematerializing by using smaller SIM cards and elements including new technologies.
(up 1.0%) encouraging electronic recharges • Prevented over 29 tons of plastic wastes,
• Plastics, paper and related inputs and over 172 tons of paper usage

Trade-offs: Using and impacting natural resources – which sometimes negatively affects human and social capital – is a key trade-off for
generating value across other capitals. As a purpose-led company we are committed to minimizing the environmental impacts of our operations
and activities, and to realizing the significant potential for digital products and services to deliver positive environmental outcomes.

70 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Dividends
The Company intends to pay as much of its after-tax profit as will be available after retaining such sums and repaying such borrowings owing to third
parties as shall be necessary to meet the requirements reflected in the budget and business plan, taking into account monies required for investment
opportunities. There is no fixed date on which entitlement to dividends arise and the date of payment will be recommended by the Board and
approved by the shareholders at the time of declaration, subject to the Dar es Salaam Stock Exchange (‘DSE’) listing requirements.
The Board will recommend a final dividend, in relation to the financial year ended 31 March 2023, for approval by the shareholders at the annual
general meeting. The Board’s recommendation will be in accordance with the dividend policy to pay out at least 50% of earnings after tax.

Solvency and liquidity of the group

The Board considers the Group to be solvent, within the meaning ascribed by the Companies Act, No 12 of 2002 of Tanzania. The Group had net
current liabilities of TZS92 743 million as at 31 March 2023 (2022: net current asset of TZS37 373 million). The group has made an assessment of its
liquidity position and is confident that sufficient funds will be available and accessible to meet all obligations as they fall due.

Capital structure and shareholding

The Group’s issued share capital is held in the percentages outlined below:
2023 2022
% %
Vodacom Group Limited 75.00 75.00
General public 25.00 25.00
100.00 100.00

As at 31 March 2023, the Group’s authorised share capital was TZS200 000 million comprising of 4 000 million ordinary shares with a par value of
TZS50 while the issued share capital was TZS112 000 million comprising of 2 240 000 300 ordinary shares with a par value of TZS50. There were no
changes in the authorised and issued share capital during the year.
The Group’s top ten shareholders up to 31 March 2023 are listed below:

2023 2022
Shareholder No. of shares % No. of Shares %
Vodacom Group Limited 1 680 000 200 75.0 1 680 000 200 75.0
BNYMSANV Re: BNYMLB Re: Government Employees Pension Fund 164 503 540 7.3 164 503 540 7.3
Public Service Social Security Fund 84 117 720 3.8 84 117 720 3.8
National Social Security Fund 55 999 990 2.5 55 999 990 2.5
SC (T) Nominee Re: Standard Chartered Bank Uganda Re: National
Social Security Fund 27 816 870 1.2 27 816 870 1.2
National Health Insurance Fund 23 475 000 1.0 23 475 000 1.0
Umoja Unit Trust Scheme 20 674 980 0.9 20 674 980 0.9
JPMCB-LB Oasis Crescent Equity Fund 16 602 210 0.7 16 602 210 0.7
Workers Compensation Fund. 14 882 350 0.7 14 882 350 0.7
JPMCB-LB Designated First Rand Bank Ltd 12 364 733 0.6 10 345 530 0.5
SCBT NOMINEE Re: SSB+T AC Re:FBL as a Trustee for Investec Africa
Fund-RNKP – 10 272 615 0.5
Total 2 098 672 283 93.7 2 088 016 025 93.2

The total number of shareholders by 31 March 2023 stood at 36 530 (2022: 36 427 shareholders).

Capital expenditure and commitments

During the year, the Group invested TZS299 121 million (2022: TZS173 955 million) in property and equipment, and intangible assets. The year’s
additions include TZS143 140 million spent on spectrum acquisition. This capital expenditure was funded by internally generated cash flows. As at
year end, TZS66 040 million of the total investment made was payable to capex creditors (2022: TZS64 541 million).
Further information on the Group’s property and equipment, and intangible assets is presented in Notes 15 and 16 to the consolidated and separate
financial statements.
Information about the Group’s commitments is presented in Note 32 to the consolidated and separate financial statements.

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Report of the directors continued

Business plans and future developments

We aspire to grow our business over the medium term by executing our purpose-led model and connecting Tanzanians for a better future, by providing
access to modern technologies, as well as offering technological solutions that will make us relevant to customers and society. We will invest in
our network and supporting infrastructures to support our growth ambitions and leverage our segmented multi-products approach, the system of
advantage. This approach combines our unique strength in connectivity, digital and financial services to deliver diversified and differentiated offerings
to our customers. As we execute our strategy, we remain committed to engaging with the government on all relevant matters relating to our business
objectives. We believe that financial and digital inclusion can drive positive societal change and support our growth ambitions. With our focus on
customer proposition, we will continue to expand our reach and deliver the best experience, including access to high-speed data services. We will
roll out our fixed-access services to both business and consumer segments and drive smartphone penetration to enable access to digital services,
including our M-Pesa super-app. Leveraging on our strategic M-Pesa Africa hub, we are committed to continue developing and rolling out innovative
and transformative M-Pesa services to make our customers’ lives better. Mindful of the weaker global macro outlook, we will also focus on cost control
to deliver strong profitability and generate value for our shareholders, as we target the following over the medium term:
• Mid-to high-single-digit service revenue growth.
• 13.0% – 16.0% capital expenditure as a % of revenue.
These medium-term targets assume a stable currency, regulatory and macroeconomic environment. These targets are on average, over the next three
years, excluding spectrum purchases, exceptional items, and any merger and acquisition activity.

Subsidiaries and other controlled entities

The consolidated financial statements include the Company’s wholly owned subsidiaries, that is, Vodacom Trust Limited which is a company limited by
guarantee and having share capital; M-Pesa Limited and Shared Networks Tanzania Limited (’sNT’), which are private limited liability companies having
share capital. The consolidated financial statements also include a consolidated structured entity, The Registered Trustees of M-Pesa (the ‘Trust’).

Vodacom Trust Limited

The principal activity of Vodacom Trust Limited was to act as bona fide trustees and/or any other like officers in order to protect and safeguard
all monies gained from and/or relating to M-Pesa cellular phone money transfer services for the benefit of the users of the M-Pesa services.
On 23 October 2018, the entity’s name was changed from M-Pesa Limited to Vodacom Trust Limited following approval and issuance of the certificate
of change of name by the Business Registration and Licensing Agency of Tanzania (‘BRELA’). The change of name was necessary to enable compliance
with the National Payment System Act, 2015.
The entity’s directors resolved to wind up the entity and the liquidator was appointed by the directors on 19 May 2020 winding up process were
initiated thereafter.
As at year end, the process to liquidate the company had not been finalized.

Shared Network Tanzania Limited (SNT)

On 19 July 2016, the Company acquired 100% of SNT’s issued share capital. SNT was a multi-operator core network wholesaler which held a license
for usage of spectrum in the 900MHz band in rural Tanzania. During 2019, the Group obtained approval from Tanzania Communications Regulatory
Authority (‘TCRA’) to reassign the spectrum that was held by SNT to the Company. During the year ended 31 March 2021, the directors resolved to
wind up of the entity after transferring its assets and liabilities to the Company. The net assets transfer was completed and a liquidator was appointed
thereon.
As at year end, the process to liquidate the entity had not been finalized.

Vodacom Tanzania Foundation

Following the amendment of the Companies Act, 2002 of Tanzania by Miscellaneous Amendment Act, No. 3 of 2019 which came into force on
30 June 2019, the authority to register entities which prohibit distribution of profits and which do not intend to promote commerce was transferred
from the Registrar of Companies (BRELA) to the Registrar of Non-Government Organizations (NGOs). Consequently, BRELA issued a public notice
stating that from 1 September 2019, the Registrar of Companies shall not maintain in the Registry of Companies records of any company which
prohibits distribution of profits and does not intend to promote commerce, and advised companies affected to communicate with the Registrar of
NGOs to be provided with guidance and directives on registration as NGOs as per the Miscellaneous Amendment Act, No. 3 of 2019.
Vodacom Tanzania Foundation, which was a company limited by guarantee, was affected by this change in law as it was incorporated as a company
limited by guarantee with no profit objective. Consequently, the entity was struck-off the BRELA register and another entity, Vodacom Tanzania
Foundation was registered with the registrar of NGOs under the-then Ministry of Health Community, Development, Gender, Elderly and Children in
accordance with the Non-Governmental Organization act of 2002 (revised 2005) and the Non-Governmental Organizations Amendments) regulations
of 2018 (together the "NGO Act and regulations") of Tanzania. The founding members resolved to wind up the foundation and appointed the liquidator
to oversee the process.
The entity’s liquidation was concluded on 19 January 2023.

72 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

M-Pesa Limited
M-Pesa Limited was incorporated on 26 October 2018. In accordance with the National Payment Systems regulations which became effective in July
2016, this entity applied for an Electronic Money Issuance (‘EMI’) licence which was issued by Bank of Tanzania (‘BoT’) on 13 March 2019. Following
the receipt of the EMI licence, the entity’s principal activities will be operating mobile financial services under the EMI regulations issued by BoT. The
entity started operating independent of the Company on 1 April 2020 with its own organization structure, staff and accounting records. The entity is
consolidated in the Group’s consolidated financial statements.

Registered Trustees of M-Pesa Trust Funds

The Registered Trustees of M-Pesa Trust Funds was incorporated under the provisions of The Trustees Incorporation Act, Cap 318 of Tanzania on
25 September 2019 with registration number 5656. The Trust is a non-profit making entity that has a mandate to fulfil its objectives in the best
interest of the beneficiaries of the funds in the trust accounts. The Trust’s activities include: overseeing and managing effectively the trust accounts;
ensuring safety of the beneficiaries of the funds in the trust accounts by setting up appropriate safeguard and remedy measures; ensuring the
separation and not commingle the trust account funds with any other funds or use it for any other operations.

Vodacom Tanzania Foundation

The Vodacom Tanzania Foundation manages the Group’s corporate social investments. Guided by the UN Sustainable Development Goals 2030,
Tanzania’s Vision 2025 and subsequent the National 5-Years Development Plan, its vision is to positively impact the lives of underserved members of
the Tanzanian community by leveraging Vodacom’s technological capabilities and its partnerships to deliver pioneering projects in education, health
and environmental protection as key long-term investment pillars for social impact intervention, while engaging in maternal health, reduction on
infant mortality and disaster management to facilitate sustainable cities.
Since 2004, the Foundation in collaboration with its parent unit ‘Vodafone Foundation’, has invested over TZS17 620 million (2022: TZS16 900 million)
and impacted millions of lives across Tanzania. Vodafone foundation contribution has been mostly focused on maternal health.
Following the decision to liquidate the company in the previous period, the Foundation’s activities are now carried out by the parent company during
the year.

Borrowings
The Group did not have any borrowings as at 31 March 2023 (2022: None).

Political and charitable donations

The Group did not make any political donations during the year (2022: None).

Parent and ultimate parent

The Group is controlled by Vodacom Group Limited, incorporated and domiciled in the Republic of South Africa which effectively owns and controls
75.00% (2021: 75.00%) of the Company’s issued shares. The Group’s ultimate parent is Vodafone Group Plc, incorporated and domiciled in the United
Kingdom.

Related party transactions

Transactions with related parties were conducted in the normal course of business. Details of transactions and balances with related parties are
included in Note 35 to the consolidated and separate financial statements.

Country of incorporation
The Company and its subsidiaries are incorporated and domiciled in the United Republic of Tanzania.

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Report of the directors continued

Directors and company secretary

The directors of the Company who served during the year and to the date of this report are:
In office as at Date of Date of In office at the
Title/name 1 April 2022 appointment resignation reporting date

Directors
Justice (Rtd) Thomas Mihayo  – – 
Margaret Ikongo  – – 
Thembeka Semane1  – – 
Winifred Ouko5  – 11 May 22 X
Matimba Mbungela1  – – 
Diego Gutierrez5  – – 
Nkateko Nyoka1  – – 
Dejan Kastelic2  – 30 June 22 X
Sudhersan Ramasamy3  – – 
Raisibe Morathi1  – – 
Sitholizwe Mdlalose4 X 1 Jul 22 – 
Kanini Mutooni5  1 Oct 22 – 
Executive
Sitholizwe Mdlalose4  – 1 Jul 22 X
Philip Besiimire7 X 15 Oct 22 – 
Hilda Bujiku  – – 
Company Secretary
Caroline Mduma  – – 
1. South African 2. Slovenian 3. Indian 4. British 5. Kenyan 6. Bolivian 7. Ugandan
All the other directors are Tanzanian nationals.

Directors interests
The directors do not hold any direct interest in the issued share capital of the Company or any of the subsidiaries.

Corporate governance
The Group is committed to the highest standards of business integrity, ethics and professionalism. Corporate governance principles include discipline,
independence, responsibility, fairness, social responsibility, transparency and accountability of directors to all stakeholders. These principles are
entrenched in the Group’s internal controls and policy procedures governing corporate conduct.

Board of directors
The Board takes overall responsibility for the Group’s success. Its role is to exercise leadership and sound judgement in directing the Group to achieve
sustainable growth and act in the best interest of the shareholders.
The non-executive directors contribute their extensive experience and knowledge to the Board’s committees. All committees operate under Board-
approved charters, which are updated from time-to-time to stay abreast of developments in corporate law and governance best practice. The Board
has three committees with specified delegated activities as detailed below.

74 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Remuneration Committee
The Remuneration Committee serves to enable and assist the Board to discharge its responsibilities by:
• Determining and agreeing the remuneration and overall compensation packages of executives, with the exception of seconded employees;
• Determining, agreeing and developing the Group’s overall remuneration policy and ensuring alignment with the remuneration policy of Vodacom
Group Limited;
• Ensuring that fair, competitive reward strategies and programmes are in place to facilitate the recruitment, motivation and retention of high
performing staff at all levels in support of realizing corporate objectives and to safeguard shareholder interest;
• Reviewing and recommending to the Board the relevant criteria necessary to measure the performance of executive management in discharging
their functions and responsibilities; and
• Developing and implementing a policy of remuneration philosophy.
The Remuneration Committee, which comprises non-executive directors, reports to the Board and met four times during the year.
Name Nationality Qualification
Ms. Margaret Ikongo Tanzanian a. Master of Business Administration, Open University, Tanzania.
(Interim Chairperson) b. International Certificate in Risk Management, Institute of Risk Management,
United Kingdom.
c. International Diploma in Risk Management and Graduate Member of the Institute
of Risk Management United Kingdom.
d. Associate Member of Chartered Insurance Institute, United Kingdom.
Mr. Diego Gutierrez Bolivian a. Major in Business Administration and Marketing, Gabriela Mistral University,
Santiago, Chile.
b. Master in Business Administration, Harvard Institute for International
Development (HIID), Catholic University, Lapaz, Bolivia.
Mr. Matimba Mbungela South African a. Bachelor of Administration, University of Venda, South Africa.
b. Post Graduate Diploma in Human Resources, University of Cape Town, South Africa.
c. Masters of Business Administration, University of KwaZulu-Natal, South Africa.

Outlined below is the attendance of committee members during the meetings held in the year:

Name Position 15 June 2022 25 Aug 2022 15 Mar 2023 Attendance %

Ms. Margaret Ikongo Interim Chairperson    100%
Mr. Diego Gutierrez Director X   100%
Mr. Matimba Mbungela Director    75%

Nomination Committee
The Nomination Committee serves to enable and assist the Board to discharge its responsibilities by:
• Considering other special benefits or arrangements of a substantive financial nature;
• Ensuring that the performance of Board members is reviewed;
• Reviewing the promotions, transfers and termination policies for the Group;
• Monitoring the size and composition of the Board;
• Reviewing the independent status of directors on an annual basis;
• Recommending individuals for nomination as members of the Board and its committees;
• Reviewing the Board succession plans;
• Determining the composition and effectiveness of the boards of the Group’s subsidiaries;
• Approving the nomination of individuals to the respective boards of the Group’s subsidiaries;
• Ensuring eligibility of Board members;
• Reviewing the structure of the Group to ensure that it is fit for purpose, delivering the strategy and long-term objectives of the business; and
• Ensuring compliance with applicable laws and codes.

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Report of the directors continued

Corporate governance continued

Nomination committee continued
Nomination Committee, which comprises non-executive directors, reports to the Board and met two times during the year:

Name Position Nationality Qualification

Justice (Rtd) Thomas B Chairman Tanzanian a. Degree in Law (LL.B), University of Dar es salaam, Tanzania.
Mihayo b. Arbitrator and Legal Consultant.
Ms. Margaret Ikongo Member Tanzanian a. Master of Business Administration, Open University, Tanzania.
b. International Certificate in Risk Management, Institute of Risk Management,
United Kingdom.
c. International Diploma in Risk Management and Graduate Member of the
Institute of Risk Management United Kingdom.
d. Associate Member of Chartered Insurance Institute, United Kingdom.
Mr. Matimba Mbungela Member South African a. Bachelor of Administration, University of Venda, South Africa.
b. Post Graduate Diploma in Human Resources, University of Cape Town,
South Africa.
c. Masters of Business Administration, University of KwaZulu-Natal,
South Africa.

Outlined below is the attendance of committee members during the meetings held in the year:
8 November 15 March
Name Position 2022 2023 Attendance %
Justice (Rtd) Thomas B Mihayo Chairman   100%
Ms. Margaret Ikongo Director   100%
Mr. Matimba Mbungela Director   100%

Audit, Risk and Compliance Committee (ARCC)

The ARCC is responsible for:
• Reviewing the Group’s consolidated interim results, preliminary results, annual report and annual consolidated and separate financial statements;
• Monitoring compliance with applicable statute and the DSE Rules;
• Reporting to the Board on the quality and acceptability of the Group’s accounting policies and practices, including, without limitation, critical
accounting policies and practices;
• Providing oversight of the annual financial reporting process;
• Considering the appointment and/or termination of the external auditors, including their audit fees, independence and objectivity and determining
the nature and extent of any non-audit services;
• Approving the internal audit plan for the year;
• Receiving and dealing appropriately with any complaints, internally and externally, relating either to the accounting practices and internal audit
or to the content or auditing of all entities within the Group’s annual consolidated financial statements or related matters;
• Reviewing and monitoring the management and reporting of tax-related matters;
• Monitoring the risk management function and processes and assessing the Group’s most significant risks; and
• Monitoring the effectiveness of the processes to create awareness and develop an understanding of relevant legislation and regulation to ensure
compliance by management.
The Audit, Risk and Compliance Committee, which comprises independent non-executive directors, reports to the Board and met eight times during
the year.

76 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Audit, Risk and Compliance Committee

Name Nationality Qualification
Ms. Margaret Ikongo Tanzanian a. Master of Business Administration, Open University, Tanzania.
b. International Certificate in Risk Management, Institute of Risk Management, United
Kingdom.
c. International Diploma in Risk Management and Graduate Member of the Institute of Risk
Management United Kingdom.
d. Associate Member of Chartered Insurance Institute, United Kingdom.
Ms. Thembeka Semane South African a. Post Graduate Diploma in Business Administration, University of Pretoria’s Gordon Institute
of Business Science, South Africa.
b. Certified Associate of the Institute of Bankers in South Africa.
Ms. Kanini Mutooni Kenyan a. Global Policy Executive Education-Harvard Kennedy School of Government.
b. Master’s in Business Administration (MBA) – Cass Business School, City University, London,
c. Securities Institute Diploma (UK)-Chartered Institute of Securities and Investment
Professionals.
d. Investment Management Certificate (UK) ACCA,
e. Chartered Association of Certified Accountants (UK),
f. Bachelor of Commerce (Hons) Catholic university, Kenya.
Outlined below is the attendance of committee members during the meetings held in the year:

5 May 15 June 12 Jul 25 Aug 3 Nov 10 Nov 19 Jan 16 Mar Attendance

Name Position 2022 2022 2022 2022 2022 2022 2023 2023 %
Ms. Margaret Ikongo Chairperson         100%
Ms. Winifred Ouko Member  N/A N/A N/A N/A N/A N/A N/A 100%
Ms. Thembeka Semane Member         100%
Ms. Kanini Mutooni Member N/A N/A N/A N/A     100%

Corporate Social Responsibility Report (CSR)

Guided by the UN Sustainable Development Goals, Tanzania’s Vision 2025 and its national Five-Year Development Plan, our Corporate Social
Responsibility function seeks to positively impact the lives of underserved members of the Tanzanian community by leveraging Vodacom’s
technological and digital capabilities, infrastructure and partnerships to deliver pioneering projects in maternal health, education, and environmental
protection.

Our 2023 performance;

Health – SDG 3 (Good health and well-being)
Total spend this year of more than TZS500 million
Our M-Mama programme, conducted in collaboration with the Vodafone Foundation and the government of Tanzania provides emergency
transportation for pregnant women and newborns in the rural areas. The objective is to prevent and reduce maternal deaths and child mortality by
leveraging on mobile communications technology to trigger ambulance service using community taxi as ambulance and government ambulances
where available. Main deliverables to date are:
a. Live and operational in 8 of 14 intended regions.
b. Over 19 000 beneficiaries since inception in 2013.
c. Saving an estimated 700 lives through the programme.
d. Over US$8 million, approximately TZS19 600 million spent in the project since inception.

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Report of the directors continued

Corporate Social Responsibility Report (CSR) continued

Education – SDG 4 (Quality Education)
Total spend this year of close to TZS1 billion
We have continued to provide support to numerous educational initiatives across the country. The projects are conducted in partnership with the
government departments including UCSAF, various ministries including ministry of education and vocational training and the ministry of science and
technology, as well as with various non-governmental organisations including the African Child Projects.
Our major CSR initiative is E-Fahamu portal connectivity project, which provides free access to educational material:
1. Over 185 000 registered students to-date
2. Over 15 000 registered teachers to to-date
3. Donations during the year
i. 517 desktop computers
ii. 479 tablets
iii. 183 routers
iv. 23 printers
v. 22 television sets
#Codelikeagirl programme is another education related initiatives undertaken in collaboration with our human resources department to encourage
girls aged between 14-18 years to develop coding skills and valuable life skills, and encouraging them to consider the uptake of ICT and STEM
subjects. This year 564 girls attended the training to make it more than 1 700.

Environmental protection – SDG 13 (Climate Action)

Total spend this year of TZS140 million
Since 2020, in partnership with the World Wide Fund for Nature (WWF) and the Dodoma City Council, we have been jointly implementing the Kijanisha
Dodoma and Kijani Zaidi programmes, ambitious tree-planting and educational initiatives to green up the Tanzania’s capital city:
a. An estimated 112 000 surviving trees out of 150 000 planted.
b. More than TZS600 million spent since project launch. Through our Vodacom Business Unit, we have continued with rolling out our M-Kulima
digital agricultural platform that currently links more than 3.1 million smallholder farmers to the agriculture value chain. Among many benefits,
the platform enables registered farmers to access information and extension services. Supporting the farming community help them to conduct
responsible farming.
Contingent liabilities
Tax matters
The Group’s future tax charge, effective tax rate and profit before tax could be affected by several factors including tax reforms conducted in Tanzania
and the resolution of open tax disputes with the Tanzania Revenue Authority (“TRA” or the “tax authority”) and/or tax courts. The Group is committed
to acting with integrity and transparency in all tax matters including a policy of full transparency to the tax authority and the payment of all taxes
properly due under the relevant tax laws in Tanzania. The Group is regularly subject to audits and examination by the tax authority of its direct and
indirect tax filings. The consequence of such reviews is that in some instances, disputes can arise with the tax authority over the interpretation or
application of certain tax rules where these tax laws are ambiguous and subject to a broad range of interpretations. To address and manage this tax
uncertainty, good governance is fundamental to the Group’s business sustainability.
The major tax positions taken are thus subject to review by executive management and reported to the Board. The Group has support from external
advisors supporting the positions taken in respect of the significant tax matters which support the application and interpretation of the tax legislation.
The Group has considered all matters in dispute with the tax authority and has accounted for any exposure identified if required.
During the year the Group has managed to resolve long outstanding tax disputes which were disclosed as contingent items in relation to the following
issues:

• Capital allowances of telecommunication equipment

Through the practice notice issued in December 2022, the tax authority (TRA) clarified the proper classification of telecommunication equipment
with the active equipment classified under class 1 and passive equipment being classified under class 6. This clarification aided in the resolution
of long-standing disagreements on the subject. The previously reported dispute on this matter has been resolved.

• Withholding tax on satellite, international roaming and undersea cable services

During the year, the Group managed to resolve all the pending disputes in relation to the chargeability of withholding tax on payments in relation
to the roaming and foreign services received. The previously reported dispute on this matter has been resolved.
However, the Group shall maintain part of the Transfer pricing exposure as a contingent matter as detailed below:

• Transfer pricing
The Group, as part of a multinational enterprise, makes extensive use of services provided by associated entities in a value adding manner
and applies the arm’s length principle, in the taxation context, in such undertakings. These intercompany transactions are documented in the
Group’s transfer pricing documentation which is done in accordance with the requirements of local Transfer Pricing Regulations and Organization
for Economic Cooperation and Development (“OECD”) guidelines. The TRA conducted a transfer pricing audit for the 2018 to 2020 tax years
for Vodacom Tanzania Public Limited Company and 2021 for M-Pesa Limited, the audit has resulted in certain disputed items in terms of the
methodology and other Transfer Pricing aspects used to support the taxation arm’s length principle.

78 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Litigation and other claims contingencies

The Group is currently involved in various legal proceedings and has, in consultation with its legal counsel, assessed the possible/probable outcome of
these proceedings. Following this assessment, the Group’s management has determined that adequate provision has been made in respect of these
legal proceedings as at year end.
The Group is subject to claims under contracts signed with other parties. Disputes can arise with other parties over the interpretation or application of
contractual provisions. These disputes may not necessarily be resolved in a manner that is favourable to the Group, and the resolution of the disputes
could result in an obligation to the Group. Management has assessed that no provision for claims is warranted as at year end.

Regulatory matters
SIM Card Registration
On 7 February 2020, new SIM Regulations were published, mandating biometric registration only and restricting the number of SIMs held per
customer. Subsequently, on 1 July 2020, the Tanzania Communication Regulatory Authority (‘TCRA’) issued a public release that required customers
who biometrically registered more than one SIM card per service provider to verify their SIM cards ownership through their mobile phones.
Furthermore, the TCRA and mobile network operators implemented an approval process that allowed customers to request for additional SIM cards by
visiting service providers’ retail outlets or an automated process through Unstructured Supplementary Service Data (USSD). Customers are allowed to
have more than one SIM card if they follow the correct approval process.
On 13 February 2023, Vodacom Tanzania barred 238 000 SIM cards which did not complete the multiple-SIM declaration process as per TCRA’s
directives. Subsequent to barring, TCRA again permitted the usage of *106# and 100 to allow the barred customers to do verification through this
process. As a result, over 30 000 of the barred customers have successfully verified their SIM cards and re-activated. We continue with efforts to
recover barred customers.

Other matters
Levies on mobile money transfers and withdrawals and airtime.
On 30 June 2021, the President approved the Finance Act, which included the amendments to the National Payment System Act (NPS Act) and
Electronic & Postal and Communication Act (EPOCA) – introducing levies on mobile money transfer transactions and airtime recharges. For
mobile money transfer and withdrawal transactions, a transaction value dependent levy of between TZS10 and TZS10 000 was implemented from
15 July 2021.
Following our engagements and due consideration by the government, the following amendments were implemented:
• 3 September 2021
An initial 30% levy reduction, to a maximum levy of TZS7 000.
• 1 July 2022
An additional 43% reduction to the maximum levy band was passed through the Finance Act 2022, marking a cumulative 60% reduction since the
levy’s introduction. This reduction set the maximum levy chargeable at TZS4 000. The Finance Act also re-defined the scope of the levy, to also
include withdrawal and transfers through banks which were earlier excluded. The levy, which was previously chargeable on mobile transactions only,
also became applicable to transfers between mobile accounts, between bank accounts and across mobile and bank accounts. For withdrawals, the
levy was extended to capture withdrawals from automated teller machines (ATM).
• 1 October 2022
Through a special supplement to the National Payment System (Electronic Money Transactions levy) (Amendment Regulations) the maximum levy
chargeable was set at TZS2 000, equivalent to 20% of the levy charged at introduction. This decision further reduced end-user charges, and has
meaningfully revived and accelerated our contribution to the financial inclusion agenda, through the use of M-Pesa services.

Spectrum auction
On 15 August 2022, the TCRA published a public notice inviting bids for licensing spectrum blocks intended for international mobile telecommunication
services through auction, which was held on 11 October 2022. The following spectrum frequencies were auctioned and assigned: one block of 2 x 10
MHz in the 700 MHz band; two blocks of 1 x 35 MHz in the 2300 MHz band; three blocks of 2 x 15 MHz in the 2600MHz band and one block of 1 x 20
MHz in the 2600 MHz band (TDD), and four blocks of 1 x 40 MHz in the 3500 MHz band (TDD). We participated and secured winning bids for the one
block of 700MHz, the two blocks of 2300MHz and the one block of 2600MHz (TDD) for a total bid price of US$63.2 million, equivalent to TZS143.1
billion.
The spectrum acquired is a critical strategic resource for delivering value to shareholders and fulfilling our purpose through our network expansion and
widened product portfolio objectives. The spectrum allocation is payable in instalments; 50% on spectrum assignment, 25% in April 2023, and 25%
in October 2023. The deferred payment has been discounted to it’s present value as it contains a significant financing component. The total cost of
the licence was capitalised under Intangible assets and a licence payable recognised in respect of deferred payment obligations. The capital amount
recorded was discounted to reflect a present value of the asset and the interest expense will be recognised over the credit period. The interest expense
is the difference between the cash price equivalent and the total instalment payments for the transaction.

79
Report of the directors continued

Other matters continued

Deferred tax recognition
During the year, the company made a decision to recognize deferred tax assets to the extent of what could be utilized by the profit forecast
within the next five years. The company recognized a total of TZS50 871 million, made up of deferred tax asset on unused tax losses amounting
TZS10 954 million, and other deductible timing differences TZS39 917 million

Events after the reporting period

The events after the reporting period are disclosed in Note 42 to the consolidated and separate financial statements. The Board is not aware of any
other matter or circumstance arising since the end of the reporting period, not otherwise dealt with herein, which requires adjustment to or disclosure
in the consolidated and separate financial statements.

Auditor
Group’s External Auditor
Ernst & Young (EY)
EY House, Plot No. 162/1, Mzinga Way
14111 Oysterbay, P.O. Box 2475, Dar es Salaam, Tanzania
Office: +255 22 292 7868 Fax +255 22 292 7872, Cell: 255 654 818 513, Website: http://www.ey.com
Firm‘s registration number: 151. TIN number: 100-149-222
Ernst & Young the auditor for the financial year 2023, has expressed willingness to continue in office and is eligible for re-appointment. A resolution
proposing the re-appointment of Ernst & Young as auditor of the Group for the year ending 31 March 2023 will be put to the Annual General Meeting.
Partner’s PF Number: FCPA 1227

Consolidated and separate financial statements

The consolidated and separate financial statements for the year ended 31 March 2023 were approved and authorised for issue by the Board on
15 June 2023.
By order of the board

Justice (Rtd) Thomas B Mihayo Philip Besiimire

Chairman Managing Director

80 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Statement of directors’ responsibilities

for the year ended 31 March 2023
The Companies Act, 2002 No.12 of Tanzania requires directors to prepare consolidated and separate financial statements for each financial year that
present fairly, in all material respects, the financial position and results of the Group and the Company. A further requirement is that the directors
ensure that the Group and the Company keep proper accounting records that disclose, with reasonable accuracy, the financial position and results
of the Group and of the Company. The directors are also responsible for safeguarding the assets of the Group and the Company and hence taking
reasonable steps for the prevention and detection of fraud, error and other irregularities.
The directors accept responsibility for the consolidated and separate financial statements, which have been prepared using appropriate accounting
policies supported by reasonable and prudent judgments and estimates, in conformity with International Financial Reporting Standards (“IFRS”)
and the requirements of the Companies Act, 2002 No.12 of Tanzania. The directors are of the opinion that the consolidated and separate financial
statements present fairly, in all material respects, the state of the financial affairs of the Group and the Company and of the Group’s and the
Company’s financial results in accordance with IFRS and the requirements of the Companies Act, 2002 No. 12 of Tanzania. The directors further
accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of the consolidated and separate financial
statements, as well as designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the consolidated
and separate financial statements that are free from material misstatement whether due to fraud or error.
Nothing has come to the attention of the directors to indicate that the Group and the Company will not remain a going concern for at least twelve
months from the date of this statement.
The consolidated and separate financial statements for the year ended 31 March 2023 were approved and authorised for issue by the Board of
Directors on 15 June 2023.

Justice (Rtd) Thomas B Mihayo Philip Besiimire

Chairman Managing Director

81
Declaration by the head of finance
for the year ended 31 March 2023
The National Board of Accountants and Auditors (NBAA) according to the power conferred to it under the Auditors and Accountants (Registration) Act
No. 33 of 1972, as amended by Act No. 2 of 1995, requires financial statements to be accompanied with a declaration issued by the Head of Finance
responsible for the preparation of the financial statements of the entity concerned.
It is the duty of a professional accountant to assist the Board of Directors to discharge the responsibility of preparing financial statements of an entity
showing true and fair view of the entity’s financial position and performance in accordance with IFRS and the requirements of the Companies Act, 2002
No.12 of Tanzania.
Full legal responsibility for the preparation of financial statements rests with the Board of Directors as stated under the Statement of Directors’
Responsibilities on the previous page.
I, Robin Kimambo, being the Head of Finance Operations of Vodacom Tanzania Public Limited Company hereby acknowledge my responsibility of
ensuring that consolidated and separate financial statements for the year ended 31 March 2023 have been prepared in compliance with IFRS and the
requirements of the Companies Act, 2002 No.12 of Tanzania.
I thus confirm that the consolidated and separate financial statements give a true and fair view position of Vodacom Tanzania Public Limited Company
as on that date and that they have been prepared based on properly maintained financial records.

Robin Kimambo
NBAA Membership No: ACPA 4168
Head of Finance Operations
Date: 15 June 2023

82 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Ernst & Young Tel: +255 22 2924040/41 /42

EY House Fax: +255 22 2924043
Plot No. 162/1, Mzinga Way E-mail: [email protected]
14111 Oysterbay www.ey.com
P.O. Box 2475 TIN: 100-149-222
Dar es Salaam, Tanzania VRN: 10-007372-Z

Independent auditor’s report

To the shareholders of Vodacom Tanzania Public Limited Company

Report on the audit of the consolidated and separate financial statements
Opinion
We have audited the consolidated and separate financial statements of Vodacom Tanzania Public Limited Company (the ‘Company’) and its subsidiaries
(together, the ‘Group’) set out on pages 86 to 147, which comprise the consolidated and separate statements of financial position as at 31 March 2023, and
the consolidated and separate statements of profit or loss and other comprehensive income, consolidated and separate statements of changes in equity
and consolidated and separate statements of cash flows for the year then ended, and notes to the consolidated and separate financial statements, including
a summary of significant accounting policies.
In our opinion, the accompanying consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate
financial positions of the Group and the Company as at 31 March 2023, and the consolidated and separate financial performance and the consolidated and
separate cash flows of the Group and the Company for the year then ended in accordance with International Financial Reporting Standards (IFRSs) and the
requirements of the Companies Act, 2002 of Tanzania.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the consolidated and separate financial statements section of our report. We are independent of the Group and
the Company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA
Code) together with the ethical requirements that are relevant to our audit of the consolidated and separate financial statements in Tanzania, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial
statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a
whole , and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our
audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated and separate financial statements section of
our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of
the risks of material misstatement of the consolidated and separate financial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provided the basis for our audit opinion on the accompanying consolidated and separate financial statements.

Key audit matter How our audit addressed the key audit matter
Accounting for uncertain tax positions
The Group is required to comply with a number of taxes including Our audit procedures included, but were not limited to:
income taxes, Value Added Tax, excise duty and payroll taxes, among • Understanding the Group’s processes for recording and assessing
others. of tax provisions and contingent liabilities.
As disclosed in Note 33 to the consolidated and separate financial • Determining the completeness and reasonableness of the
amounts recognized as tax liabilities and contingent liabilities,
statements, the Group had open tax assessments as at year-end. The
including the assessment of the matters in the correspondence
open tax assessments were significant to our audit because the amounts
with tax authorities and reports of the Group’s external tax
involved are significant to the consolidated and separate financial consultants, and the evaluation of the related tax exposures.
statements. Furthermore, determination of the related provisions and • Including in our team tax specialists to analyse the tax positions
contingent liabilities requires management and the directors to make and to evaluate the assumptions used to determine tax
significant judgements and estimates in relation to interpretation and provisions and contingencies.
application of tax laws and regulations. • Assessing relevant historical and recent rulings and judgements
passed by the tax authorities and courts in considering any
We also considered that the disclosures on uncertain tax positions in
precedent.
Note 33 are significant to the understanding of the Group’s and the
• Assessing the adequacy of the Group’s disclosures in respect of
Company’s tax positions. uncertain tax positions.

83
Report of the independent auditor continued

Independent auditor’s report (continued)

To the shareholders of Vodacom Tanzania Public Limited Company

Report on the audit of the consolidated and separate financial statements (continued)
Other information
Other information consists of the information included in the Corporate Information (Page 156), Directors’ Report (Page 63-80), Statement of Directors’
Responsibilities (Page 81) and the Declaration by the Head of Finance (Page 82), which we obtained prior to the date of this report, and the Annual Report,
which is expected to be made available to us after that date, other than the consolidated and separate financial statements and our auditor’s report
thereon .The directors are responsible for the other information.
Our opinion on the consolidated and separate financial statements does not cover the other information and we do not and will not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated and separate 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 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 financial statements
The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with
International Financial Reporting Standards and the requirements of the Companies Act, 2002 of Tanzania, and for such internal control as the directors
determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group’s and the Company’s ability to
continue as going concerns, 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 the Company or to cease operations, or have no realistic alternative but to do so. The Directors are
responsible for overseeing the Group's and Company's financial reporting process.

Auditor’s responsibilities for the audit of the consolidated and separate financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate 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 consolidated and separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated and separate 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 the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the
directors.
• 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 the Company’s ability to continue as going
concerns. 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 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 the Company to cease to
continue as going concerns.
• Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether
the consolidated and separate 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 consolidated and separate financial statements. We are responsible for the direction, supervision and performance of the Group audit. We
remain solely responsible for our audit opinion.

84 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Report of the independent auditor continued

Independent auditor’s report (continued)

To the shareholders of Vodacom Tanzania Public Limited Company

Report on the audit of the consolidated and separate financial statements (continued)

Auditor’s responsibilities for the audit of the consolidated and separate financial statements (continued)
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.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the consolidated and
separate financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.

Report on other legal and regulatory requirements

This report, including the opinion, has been prepared for, and only for, the Company's members as a body in accordance with the Companies Act, 2002 of
Tanzania and for no other purposes.
As required by the Companies Act, 2002 of Tanzania, we report to you, based on our audit, that:
• We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit;
• In our opinion, proper books of account have been kept by the Group and the Company, so far as appears from our examination of those books;
• The Directors’ Report is consistent with the consolidated and separate financial statements;
• Information specified by law regarding directors’ remuneration and transactions with the Group and the Company is disclosed; and,
• The Group’s and the Company’s consolidated and separate statements of financial position and consolidated and separate statements of profit or loss
and other comprehensive income are in agreement with the books of account.

The partner in charge of the audit resulting in this independent auditor’s report is Dr. Neema Kiure.

85
Consolidated and separate statement of profit
or loss and other comprehensive income
For the year ended 31 March 2023
Group Company
TZS m Notes 2023 2022 2023 2022
Revenue 6 1 073 018 971 025 807 796 654 768
Direct expenses 7 (349 470) (299 185) (190 164) (166 771)
Staff expenses 8 (65 230) (63 823) (45 916) (42 046)
Publicity expenses (27 255) (30 184) (10 666) (17 738)
Other operating expenses 9(a) (298 306) (279 473) (261 477) (244 423)
Depreciation and amortisation 9(b) (248 306) (236 201) (241 857) (229 496)
Net credit (losses)/gain on financial assets 9(c) (2 974) 2 275 (2 978) 2 281
Operating profit/(loss) 81 477 64 434 54 738 (43 425)
Finance income 10 24 463 25 837 4 401 2 729
Dividend income 10 – – 157 009 –
Finance costs 11 (76 650) (85 544) (59 925) (66 952)
Net loss on foreign currency transactions 12 (2 939) (1 548) (2 901) (1 554)
Profit/(loss) before tax 26 351 3 179 153 322 (109 202)
Income tax credit/(expense) 13(a) 18 205 (23 442) 28 189 8 826
Profit/(loss) for the year 44 556 (20 263) 181 511 (100 376)
Other comprehensive income – – – –
Total comprehensive profit/(loss) for the year, net of tax 44 556 (20 263) 181 511 (100 376)
TZS TZS
Basic and diluted earnings/(loss) per share 14 19.89 (9.05)

86 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Consolidated and separate statements

of financial position
as at 31 March 2023
Group Company
TZS m Notes 2023 2022 2023 2022
ASSETS
Non-current assets 1 314 691 1 191 715 1 285 561 1 157 539
Property and equipment 15 965 176 1 014 626 961 391 1 006 885
Intangible assets 16 210 233 76 681 188 309 53 173
Capacity prepayments 17 40 339 44 582 40 339 44 582
Goodwill 18 1 639 1 639 – –
Income tax receivables1 13(d) 33 098 41 011 33 098 41 011
Trade and other receivables2 19 11 853 11 388 11 053 11 388
Investment in subsidiary – – 500 500
Deferred tax asset 13(e) 52 353 1 788 50 871 –
Current assets 897 149 846 914 324 111 210 639
Capacity prepayments 17 16 916 15 864 16 916 15 864
Inventory 20 3 075 2 597 3 075 2 597
Trade and other receivables 19 115 771 112 570 113 391 112 241
Income tax receivable 13(d) 15 439 22 836 10 653 20 843
Mobile financial deposit 21 509 358 436 086 – –
Cash and cash equivalents 22 236 590 256 961 180 076 59 094

TOTAL ASSETS 2 211 840 2 038 629 1 609 672 1 368 178

Group Company
TZS m Notes 2023 2022 2023 2022
EQUITY AND LIABILITIES
Equity 821 723 777 324 764 164 582 653
Share capital 23 112 000 112 000 112 000 112 000
Share premium 23 442 435 442 435 442 435 442 435
Capital contribution 24 27 698 27 698 27 698 27 698
Retained earnings 239 590 195 191 182 031 520
Non-current liabilities 400 225 451 764 400 225 451 764
Lease liabilities 25 394 137 446 044 394 137 446 044
Government grants 26 20 143 20 143
Trade and other payables 27 – 378 – 378
Provisions 28 6 068 5 199 6 068 3 619
Current liabilities 989 892 809 541 445 283 333 761
Lease liabilities 25 99 203 60 472 99 203 60 472
Licence payable 29 72 168 – 72 168 –
Trade and other payables3 27 301 026 300 006 267 432 260 312
Mobile financial payable 21 509 358 436 086 – –
Government grants 26 513 1 218 513 1 218
Provisions 28 7 624 11 759 5 967 11 759

Total liabilities 1 390 117 1 261 305 845 508 785 525
TOTAL EQUITY AND LIABILITIES 2 211 840 2 038 629 1 609 672 1 368 178
The consolidated and separate financial statements on pages 86 to 147 were approved and authorized for issue by the Board of Directors on
15 June 2023 and were signed on its behalf by:

Justice (Rtd) Thomas B Mihayo Philip Besiimire

Chairman Managing Director

Notes:
1. These are deposits with TRA in respect to objected assessments for corporate tax as well as tax refundable from revised assessments.
2. Trade and other receivables as at 31 March 2023 include contract assets amounting to TZS5 712 million of which TZS3 662 million is current and TZS2 050 million is non-current
(March 2022: current TZS2 207 million and non-current TZS1 044 million).
3. Mobile financial payables relate to amounts due to M-Pesa customers including interest payable.

87
Consolidated and separate statements
of changes in equity
for the year ended 31 March 2023

Group
Share Capital
Share capital premium contribution Retained
TZS m (Note 23) (Note 23) (Note 24) earnings Total
At 1 April 2022 112 000 442 435 27 698 195 191 777 324
Total comprehensive income for the year – – – 44 556 44 556
Transactions with owners:
Dividends declared – – – (157) (157)
At 31 March 2023 112 000 442 435 27 698 239 590 821 723

At 31 March 2021 112 000 442 435 27 698 215 454 797 587
Total comprehensive loss for the year – – – (20 263) (20 263)
At 31 March 2022 112 000 442 435 27 698 195 191 777 324

Company
Share Capital
Share capital premium contribution Retained
TZS m (Note 23) (Note 23) (Note 24) earnings Total
At 1 April 2022 112 000 442 435 27 698 520 582 653
Total comprehensive income for the year – – – 181 511 181 511
At 31 March 2023 112 000 442 435 27 698 182 031 764 164

At 31 March 2021 112 000 442 435 27 698 100 896 683 029
Total comprehensive loss for the year – – – (100 376) (100 376)
At 31 March 2022 112 000 442 435 27 698 520 582 653

88 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Consolidated and separate statements of cash flows

for the year ended 31 March 2023

Group Company
TZS m Notes 2023 2022 2023 2022
Cash flows generated from operating activities
Cash flows generated from operations 39(a) 391 390 316 748 293 115 190 418
Income tax paid 13(d) (17 050) (43 191) (4 579) (5 051)
Interest paid on tax liabilities (277) (5 753) – (5 753)
Net cash flows generated from operating activities 374 063 267 804 288 536 179 614
Cash flows utilised in investing activities
Additions to property and equipment, and intangible assets 39(b) (228 263) (142 153) (227 353) (142 153)
Proceeds from disposal of property and equipment 500 6 499 6
Proceeds from transfer of assets to subsidiary (M-Pesa Limited) – – – 5 825
Government grant received 26 4 143 4 991 4 143 4 991
Finance income received 7 792 7 219 4 401 2 729
Dividend income received – – 157 009 –
Net movement in mobile financial deposits (73 272) 8 097 – –
Interest received from M-Pesa deposits 10 16 671 18 618 – –
Net cash flows utilised in investing activities (272 429) (103 222) (61 301) (128 602)
Cash flows utilised in financing activities
Dividend paid 14 (203) (209) (46) (209)
Interest paid on other borrowings (39) – (39) –
Interest paid on lease liabilities 25 (57 098) (60 871) (57 098) (60 871)
Payment of lease liabilities – principal 25 (48 140) (69 183) (48 140) (69 183)
Interest paid to M-Pesa customers (15 556) (20 043) – –
Net cash flows utilised in financing activities (121 036) (150 306) (105 323) (130 263)

Net (decrease)/increase in cash and cash equivalents (19 402) 14 276 121 912 (79 251)
Cash and cash equivalents at the beginning of the year 22 256 961 244 257 59 094 139 923
Effects of exchange rate changes on cash and cash equivalents held
in foreign currencies 12 (969) (1 572) (930) (1 578)
Cash and cash equivalents at the end of the year 22 236 590 256 961 180 076 59 094

89
Notes to the annual financial statements
for the year ended 31 March 2023
1. General information
Vodacom Tanzania Public Limited Company (the ‘Company’) is incorporated in Tanzania as a limited liability company and is domiciled
in Tanzania. The principal activities of the Group are disclosed in the Directors’ Report. The address of its registered office and place of
business are disclosed under the Corporate Information presented on page 156.

2. i. Basis of preparation
The consolidated and separate annual financial statements of the Company and its subsidiaries (together the ‘Group’) are prepared in
accordance with International Financial Reporting Standards (‘IFRS’) and IFRS Interpretations Committee (‘IFRIC’) interpretations as issued
by the International Accounting Standards Board (‘IASB’), and those sections of the Tanzania Companies Act, No.12 of 2002 applicable to
financial reporting under IFRS and the requirements of the Dar es Salaam Stock Exchange PLC Rules, 2022. The consolidated and separate
financial statements are prepared on a going concern basis.
For purposes of the Tanzania Companies Act, No.12 of 2002, the statement of financial position is equivalent to the balance sheet while the
profit and loss account is presented in the statement of profit or loss and other comprehensive income.
The preparation of the consolidated and separate financial statements in conformity with IFRS requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the date of consolidated and
separate financial statements and the reported amounts of revenue and expenses during the reporting period. Refer to ‘Critical accounting
judgments and estimates’ in Note 5 for the disclosures on the Group’s critical accounting judgments and estimates, Actual results could
differ from those estimates. The 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 if the revision affects only that period or in the period of the revision
and future periods if the revision affects both current and future periods.
Amounts in the financial statements are stated in Tanzanian Shillings (TZS), rounded to the nearest million (TZS m), except when otherwise
indicated. The significant accounting policies are consistent in all material respects with those applied in the previous period except where
new and amended IFRS and interpretations have been adopted during the reporting period.

ii. Going Concern

The consolidated and separate financial statements are prepared on a going concern basis. In making this assessment, the Directors
considered a wide range of information relating to present and anticipated future conditions, including future projections of profitability,
cash flows, capital and other resources. The directors are satisfied that the Group and Company can generate and otherwise have access to
sufficient resources necessary to continue in business for the foreseeable future. Furthermore the directors are not aware of any material
uncertainties that may cast significant doubt upon the group’s and company’s ability to continue as going concern.

3. Significant accounting policies

a) Accounting convention
The consolidated and separate annual financial statements are prepared on a historical cost basis, except where otherwise disclosed.

b) Consolidation
Basis of consolidation
The consolidated annual financial statements incorporate the annual financial statements of the Company and its subsidiaries for the year
ended 31 March 2023. The Company and all subsidiaries have the same reporting period and apply the same accounting policies.

Business combinations
Acquisitions of subsidiaries are accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the
fair values, at the date of exchange, of assets given, liabilities incurred by the Company to the former owners of the acquiree, and equity
instruments issued by the Company in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as
incurred.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree
and the fair value of the Company’s previously held equity interest in the acquiree, if any, over the net fair value of the acquisition-date
amounts of the identifiable assets acquired and liabilities assumed.
Where applicable, the consideration transferred includes any asset or liability resulting from a contingent consideration arrangement,
measured at its acquisition-date fair value. Changes in fair value that qualify as measurement period adjustments are adjusted
retrospectively, with corresponding adjustments against goodwill. Changes in fair value that do not qualify as measurement period
adjustments are adjusted prospectively, with the corresponding gain or loss being recognised in profit or loss.
Components of non-controlling interests that are current ownership interests and entitle their holders to a proportionate share of the
acquiree’s net assets in the event of liquidation are measured at the acquisition date at either:
• Fair value; or
• The non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.
The choice of measurement basis is made on an acquisition-by-acquisition basis.
All other components of non-controlling interests are measured at their acquisition-date fair values, unless another measurement basis is
required by IFRS.

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Accounting for subsidiaries

A subsidiary is an entity controlled by the Company. Control is achieved where the Company has existing rights that give it the current
ability to direct the activities that affect the Company’s returns and exposure or rights to variable returns from the entity. The results of
subsidiaries are included in the statement of profit or loss and other comprehensive income from the effective date of acquisition or up to
the effective date of disposal. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with those used by the Company. Investments in subsidiaries are measured at cost in separate financial statements.
Where control is lost, any interest retained by the Group is remeasured to fair value. The profit or loss on disposal is calculated as the
difference between the aggregate of the fair value of the consideration received and the fair value of any retained interest;
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
The consolidated financial statements include the Company’s fully owned subsidiaries which are Shared Networks Tanzania Limited, and
M-Pesa Limited, which are private limited liability companies having share capital. The consolidated financial statements also include a
consolidated structured entity, The Registered Trustees of M-Pesa Trust Funds, which is a trust incorporated under the provisions of The
Trustees Incorporation Act, Cap 318 of Tanzania.

c) Operating segments
The Group determines its operating segments according to the major business activities that the Group undertakes, the entity components
are regularly reviewed by the Group Executive Committee and whether discrete financial information is available.
Segment information is reconciled to the consolidated and separate annual financial statements. The measure reported by the Group
is in accordance with the significant accounting policies adopted for preparing and presenting the consolidated and separate financial
statements.
The segment assets and liabilities comprise of all assets and liabilities of the different segments that are employed by the segment and
that either are directly attributable to the segment or can be allocated to the segment on a reasonable basis.
Capital expenditure on property and equipment and intangible assets is allocated to the segments to which it relates.

d) Revenue recognition
When the Group enters into an agreement with a customer, goods and services deliverable under the contract are identified as separate
performance obligations (‘obligations’) to the extent that the customer can benefit from the goods or services on their own and that the
separate goods and services are considered distinct from other goods and services in the agreement. Where individual goods and services
don’t meet the criteria to be identified as separate obligations they are aggregated with other goods and/or services in the agreement until
a separate obligation is identified. The obligations identified will depend on the nature of individual customer contracts, but might typically
be separately identified for mobile handsets, other equipment provided to customers and services provided to customers such as mobile
and fixed line communication services. Where goods and services have a functional dependency (for example, a fixed line router can only
be used with the Group’s services), this does not, in isolation, prevent those goods or services from being assessed as separate obligations.
The Group determines the transaction price to which it expects to be entitled to in return for providing the promised obligations to the
customer based on the committed contractual amounts, net of sales taxes and discounts. Where indirect channel dealers, such as retailers,
acquire customer contracts on behalf of the Group and receive commission, any commissions that the dealer is compelled to use to
fund discounts or other incentives to the customer are treated as payments to the customer when determining the transaction price and
consequently are not included in contract acquisition costs.
The transaction price is allocated between the identified obligations according to the relative standalone selling prices of the obligations.
The standalone selling price of each obligation deliverable in the contract is determined according to the prices that the Group would
achieve by selling the same goods and/or services included in the obligation to a similar customer on a standalone basis. Where standalone
selling prices are not directly observable, estimation techniques, maximising the use of external inputs, are used. Refer to Note 5 ‘Critical
accounting judgements and estimates’ for further details.
Revenue is recognised when the respective obligations in the contract are delivered to the customer and payment remains probable.
Revenue for the provision of services, such as mobile airtime and fixed line broadband, is recognised when the Group provides the related
service during the agreed service period.

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3. Significant accounting policies continued

d) Revenue recognition continued
Revenue for device sales to end customers is generally recognised when the device is delivered to the end user customer. For device sales
made to intermediaries such as indirect channel dealers, revenue is recognised if control of the device has transferred to the intermediary
and the intermediary has no right to return the device to receive a refund; otherwise revenue recognition is deferred until sale of the device
to an end user customer by the intermediary or the expiry of any right of return.
When the Group has control of goods or services prior to delivery to a customer, then the Group is the principal in the sale to the customer.
As a principal, receipts from, and payments to, suppliers are reported on a gross basis in revenue and operating costs. If another party has
control of goods or services prior to transfer to a customer, then the Group is acting as an agent for the other party and revenue in respect
of the relevant obligations is recognised net of any related payments to the supplier and recognised revenue represents the margin earned
by the Group. Refer to Note 5 ‘Critical accounting judgements and estimates’ for further details.
When revenue recognised in respect of a customer contract exceeds amounts received or receivable from a customer, at that time a
contract asset is recognised. Contract assets will typically be recognised for handsets or other equipment provided to customers where
payment is recovered by the Group via future service fees. If amounts received or receivable from a customer exceed revenue recognised
for a contract, for example if the Group receives an advance payment from a customer, a contract liability is recognised.
When contract assets or liabilities are recognised, a financing component may exist in the contract. This is typically the case when a
handset or other equipment is provided to a customer up-front but payment is received over the term of the related service agreement,
in which case the customer is deemed to have received financing. If a significant financing component is provided to the customer, the
transaction price is reduced, and interest revenue is recognised over the customer’s payment period using an interest rate reflecting the
relevant central bank rates and customer credit risk.

Other income
Dividends from investments are recognised when the Company’s right to receive payment has been established.
Interest is recognised using the amortised cost method with reference to the principal amount receivable and the effective interest
rate applicable.

Revenue presentation: Gross versus Net

Where the Group’s role in a transaction is that of principal, revenue is recognised on a gross basis. This requires revenue to comprise the
gross value of the transaction billed to the customer, after trade discounts, with any related administrative fees charged as an operating
cost. Where the Group’s role in a transaction is that of an agent, revenue is recognised on a net basis, with revenue representing the
margin earned.

Contract-related costs
When costs directly relating to a specific contract are incurred prior to recognising revenue for a related obligation, and those costs
enhance the ability of the Group to deliver an obligation and are expected to be recovered, then those costs are recognised on the
statement of financial position as fulfillment costs and are recognised as expenses in line with the recognition of revenue when the related
obligation is delivered.
The direct and incremental costs of acquiring a contract including, for example, certain commissions payable to staff or agents for acquiring
customers on behalf of the Group, are recognised as contract acquisition cost assets in the statement of financial position when the related
payment obligation is recorded. Costs are recognised as an expense in line with the recognition of the related revenue that is expected to
be earned by the Group. Typically, this is over the customer contract period as new commissions are payable on contract renewal. Certain
amounts payable to agents are deducted from revenue recognised (see above).

e) Commissions
Intermediaries are awarded cash incentives by the Group to connect new customers and upgrade existing customers.
For intermediaries who do not purchase products and services from the Group, such cash incentives are accounted for as an expense.
Cash incentives to other intermediaries are also accounted for as an expense if:
• The Group receives an identifiable benefit in exchange for the cash incentive that is separable from sales transactions to that
intermediary; and
• The Group can reliably estimate the fair value of that benefit.
Cash incentives that do not meet these criteria are recognised as a reduction of the related revenue.
Distribution incentives paid to service providers and dealers for exclusivity are deferred and expensed over the contractual relationship
period.

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f) Property and equipment

Property and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Land and buildings in
which the Group occupies more than 25% of the floor space or for which the primary purpose is the service and connection of customers
are classified as property, and equipment.
Assets in the course of construction are carried at cost less any impairment loss. Depreciation of these assets commences when the assets
are ready for their intended use.
The cost of property and equipment includes directly attributable incremental costs incurred in the acquisition and installation of such
assets, as well as the present value of the estimated cost of dismantling, removal or site restoration costs if applicable, so as to bring the
assets to the location and condition necessary for them to be capable of operating in the manner intended by management.
The cost of small parts as well as repairs and maintenance costs are recognised in profit or loss as incurred.
Depreciation is recognised in profit or loss on a straight-line basis over the shorter of the lease term if applicable or the estimated useful life
and ceases at the earlier of the date the asset is classified as held for sale or the date it is derecognised. Depreciation is not ceased when
assets are idle.
Useful lives, residual values and depreciation methods are reviewed on an annual basis with the effect of any changes in estimate
accounted for on a prospective basis.
Property and equipment acquired in exchange for non-monetary assets is measured at fair value unless the exchange transaction lacks
commercial substance or the fair value of neither the asset received nor the asset given up is reliably measurable. If the acquired item is not
measured at fair value, its cost is measured at the carrying amount of the asset given up.
An item of Property and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from
continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of Property and equipment is determined as the
difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

g) Intangible assets
The following are the main categories of intangible assets

Goodwill
Goodwill is initially recognised at cost and subsequently stated at cost less accumulated impairment losses, if any. Goodwill is not
amortised but is tested for impairment on an annual basis. Goodwill is denominated in the currency of the acquired entity.

Intangible assets with a finite useful life

Intangible assets with finite lives are stated at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation
is recognised in profit or loss on a straight-line basis over the estimated useful life and commences when the intangible asset is available for
use and ceases at the earlier of the date the asset is classified as held for sale or the date it is derecognised. Useful lives and amortisation
methods are reviewed on an annual basis with the effect of any changes in estimate accounted for on a prospective basis.
The Group’s intangible assets with finite useful lives are as follows:

Licences
Licenses which are acquired to yield an enduring benefit are amortised from the date of commencement of usage rights over the shorter of
the economic life or the duration of the license agreement.

Computer software
Expenditure incurred to develop, maintain and renew internally generated trademarks and patents is recognised as an expense in the period
it is incurred. Computer software that is not considered to form an integral part of any hardware equipment is recorded as an intangible
asset. Software integral to a related item of hardware equipment is accounted for as property and equipment.
An intangible asset is derecognised on disposal or when no future economic benefits are expected from use or disposal. Gains or losses
arising from derecognition of an intangible asset measured as the difference between the net disposal proceeds and the carrying amounts
of the asset are recognised in profit or loss when the asset is derecognised.

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3. Significant accounting policies continued

h) Impairment of tangible and intangible assets
An impairment loss is recognised immediately in profit or loss if the recoverable amount of an asset is less than its carrying amount.
Recoverable amount is the higher of an asset’s fair value less cost of disposal and value in use. In assessing value in use, the estimated
future cash flows from continuing use and ultimate disposal of the asset are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future
cash flows have not been adjusted.
Assets that do not generate cash inflows largely independent of those from other assets are grouped at the lowest levels for which there
are separately identifiable cash flows; known as cash-generating units. If the recoverable amount of the cash-generating unit is less than
the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the cash-
generating unit and then to the other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit.
Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised
estimate of its recoverable amount not to exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset or cash-generating unit in the prior period. A reversal of an impairment loss is recognised immediately in profit or
loss. Goodwill impairment losses are not reversed.
As a large owner of infrastructure and consumer of energy, the Group has exposure to the changes in the climate related risks such as
energy cost increases, asset damage and service disruption. The long range plans used in the Group’s impairment testing include forecast
energy costs and other costs that are embedded in the planning process to deliver the Group’s carbon reduction targets.
The long range plans also include capex in relation to the Group’s extensive and ongoing network maintenance program, and support the
Group’s use of durable and energy efficient infrastructure. Furthermore, the Group already has in place and will continue to develop strong
reactive controls to manage the unpredictable impacts of future climate-related risks. Climate change, therefore, is not expected to have a
material impact on the outcome of the Group’s impairment testing and the Group will continue to refine its approach to modelling climate-
related risks and opportunities in the value in use calculations.

Property and equipment, and intangible assets with a finite useful life
The Group annually reviews the carrying amounts of its property and equipment, and intangible assets with finite useful lives in order to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amounts of the assets are estimated in order to determine the extent, if any, of the impairment loss.

Intangible assets not yet available for use and goodwill

These are tested annually for impairment and when events or changes in circumstances indicate that the carrying amount may not be
recoverable.

i) Inventory
Inventory is stated at the lower of cost and net realisable value. Cost is determined by the first-in, first-out method and comprises direct
materials and where applicable, those overheads that have been incurred in bringing the inventories to their present location and condition.
Net realisable value is determined using expected future selling prices of inventory items less the estimated costs of completion and the
estimated costs necessary to make the sale. If the selling price of the inventory will be below cost, it is then reduced to the net realisable
value. Inventory write down is part of direct expenses.

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j) Leases
As a lessee
When the Group leases an asset, a right of use asset is recognised for the leased item and a lease liability is recognised for any lease
payments due at the lease commencement date. The right of use asset is initially measured at cost, being the present value of the lease
payments paid or payable, plus any initial direct costs incurred in entering the lease and dismantling costs (if not recognised as part of a
restoration asset), less any lease incentives received. The right of use assets are recognised under property and equipment.
Right of use assets are depreciated on a straight-line basis from the commencement date to the earlier of the end of the asset’s useful life
or the end of the lease term. The lease term is the non-cancellable period of the lease plus any periods for which the Group is ‘reasonably
certain’ to exercise any extension options (see below).
The useful life of the asset is determined in a manner consistent to that for owned property and equipment. If right-of-use assets are
considered to be impaired, the carrying value is reduced accordingly.
Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date and are
usually discounted using the incremental borrowing rates of the Group or where determinable, the rate implicit in the lease is used. Lease
payments included in the lease liability include:
• fixed payments and in-substance fixed payments during the term of the lease reduced by any lease incentives;
• variable lease payments that depend on an index or a rate;
• amounts expected to be payable by the lessee under residual value guarantees;
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease; and
• The exercise price of a purchase option if the lessee is reasonably certain to exercise that option.
After initial recognition, the lease liability is recorded at amortised cost using the incremental borrowing rate. It is remeasured when:
• there is a change in the residual value guarantee;
• there is a change in future lease payments arising from a change in an index or rate (e.g. an inflation related increase);
• the Group’s assessment of the lease term changes;
• lease modifications occur that are not treated as separate leases.
Any change in the lease liability as a result of these changes also results in a corresponding change in the recorded right-of-use asset.

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3. Significant accounting policies continued

k) Foreign currencies and translation of foreign currencies
The consolidated and separate financial statements are presented in TZS, which is the Group’s functional and presentation currency. The
functional and presentation currency of the consolidated subsidiaries and structured entity is also TZS. Items included in the financial
statements of each entity are measured using that functional currency.

Transactions and balances

Transactions in foreign currencies are initially recorded at the foreign exchange rates prevailing at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are retranslated into the functional currency of the Group at the rates prevailing
at the reporting date. Exchange differences on the settlement or translation of monetary assets and liabilities identified as being part of
operating activities are included in operating profit, while exchange differences on the settlement or translation of monetary assets and
liabilities which are not considered as being part of operating activities are included in gains or losses on re-measurement and disposal of
financial instruments in profit or loss in the period in which they arise.
Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when
the fair value was determined. Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated. When
a gain or loss on a non-monetary item is recognised directly in other comprehensive income, any exchange component of that gain or
loss is recognised directly in other comprehensive income. When a gain or loss on a non-monetary item is recognised in profit or loss, any
exchange component of that gain or loss is recognised in profit or loss.

l) Expenses
Expenses are recognised as they are incurred. Prepaid expenses are deferred and recognised in the periods to which they relate.

m) Employee benefits
Post-employment benefits
The Group contributes to a defined contribution fund for the benefit of employees. Contributions to the fund are recognised as an expense
as they fall due. The Group is not liable for contributions to the medical aid of the retired employees.

Short-term and long-term benefits

The cost of all short-term employee benefits, such as salaries, employee entitlements to leave pay, bonuses, medical aid and other
contributions, are recognised in profit or loss in the period in which the employee renders the related service.
The Group provides for long-term employee benefits payable to eligible employees during the period in which the employee renders the
related service and is accounted for in the year in which they arise.

Share-based payments
The Group has share-based payment compensation plans for certain eligible employees.
Equity-settled share-based payments
Equity-settled shared-based payments are measured at the grant date fair value of the equity instruments granted and are expensed on a
straight-line basis over the vesting period. The annual expense is based on the Company’s estimate of the shares that will eventually vest,
adjusted for the effect of non-market vesting conditions.
Cash-settled share-based payments
Cash-settled share-based payment liabilities are initially measured at fair value and subsequently remeasured to fair value at each reporting
date as well as at the date of settlement, with any changes in fair value recognised in profit or loss. The expense is recognised on a straight-
line basis over the vesting period, with a corresponding increase in the liability.

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n) Tax
The income tax expense represents the sum of the current tax and deferred tax. Current and deferred tax are recognised in profit or loss,
except when they relate to items recognised in other comprehensive income or directly to equity, in which case, current and deferred tax is
also recognised directly in other comprehensive income or in equity.
Tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and
when they either relate to income taxes levied by the same tax authority on either the same taxable entity or on different taxable entities
which intend to settle the current tax assets and liabilities on a net basis.

Current taxation
Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of profit or loss
and other comprehensive income because some items of income or expense are taxable or deductible in different years or may never be
taxable or deductible. The Group’s liability for current tax is calculated using tax rates and laws that have been enacted or substantively
enacted by the end of the reporting date.

Deferred tax
Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences between the carrying
amounts of assets and liabilities in the consolidated and separate financial statements and the corresponding tax bases used in the
computation of taxable profit. It is accounted for using the liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that the deductible temporary differences will reverse in the foreseeable future and taxable profits will be available
against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition, other than in a business
combination, of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities
are not recognised to the extent that they arise from the initial recognition of goodwill.
A deferred tax asset for the carry forward of unused tax losses and tax credits is only recognised to the extent that it is probable that future
taxable profit will be available against which the unused tax losses and tax credits can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting date and adjusted to reflect changes in the probability
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised, based
on tax rates that have been enacted or substantively enacted by the reporting date. The applicable statutory rate at the reporting date is
disclosed in Note 13.

Value Added Tax

Revenues, expenses and assets are recognised net of the amount of Value Added Tax, except where the Value Added Tax incurred on a
purchase of assets or services is not recoverable from the taxation authority, in which case the Value Added Tax is recognised as part of the
cost of acquisition of the asset or as part of the expense item as applicable or receivables and payables that are stated with the amount of
Value Added Tax included. The net amount of Value Added Tax recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the consolidated and separate statements of financial position.

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3. Significant accounting policies continued

o) Financial instruments
Financial assets and financial liabilities, in respect of financial instruments, are recognised on the Group’s and Company’s statements
of financial position when the Group and the Company become party to the contractual provisions of the instrument.
All financial assets and liabilities are initially measured at fair value, including transaction costs except for those classified as at fair value
through profit or loss which are initially measured at fair value, excluding transaction costs. At initial recognition, financial assets that do not
contain significant component are measured using transaction price.
The fair value of a financial instrument on initial recognition is normally the transaction price unless the fair value is evident from
observable market data.

Financial assets, excluding derivative financial instruments

Financial assets are recognised and derecognised on trade-date where the purchase or sale of the financial asset is under a contract whose
terms require delivery of the instrument within the timeframe established by the market concerned.
Subsequent to initial recognition, these instruments are measured as follows:
Financial assets that are debt instruments, are classified based on how they are managed by the business and the nature of their
contractual cash flows.
All other investments, including trade receivables, are held to collect contractual interest and principal repayments and are stated at
amortised cost using the effective interest method, less any impairment.

Trade and other receivables, included in financial assets stated at amortised cost
Trade and other receivables mainly consist of amounts owed to the Group by customers and amounts paid in advance to suppliers by
the Group. This also includes contract assets which represent an asset for accrued revenue in respect of goods or services delivered to
customers for which a trade receivable does not yet exist.
Trade receivables represent amounts owed by customers where the right to payment is conditional only on the passage of time. Trade
receivables that are recovered in installments from customers over an extended period are discounted at market rates and interest revenue
is accreted over the expected repayment period. Other trade receivables do not carry any interest and are stated at their nominal value. The
carrying value of all trade receivables and contract assets recorded at amortised cost is reduced by allowances for lifetime estimated credit
losses. Estimated future credit losses are first recorded on the initial recognition of a receivable and irrecoverable amounts are based on the
ageing of the receivable balances and historical experience. Individual balances are written off when management deems them not to be
collectible.

Impairment of financial assets

The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash
flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. For receivables that do not
involve a significant financing component, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not
track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group assesses
the individual receivable or portfolio of receivables on each reporting date based on its historical credit loss experience, relationship and
forward-looking factors specific to the debtor or portfolio and the economic environment.
The Group considers a financial asset to be in default when contractual payments are 90 days past due. However, in certain cases, the Group
may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the
outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written
off when there is no reasonable expectation of recovering the contractual cash flows.

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Financial assets carried at amortised cost

For financial assets carried at amortised cost, with the exception of trade and other receivables, the amount of the impairment loss is the
difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s
original effective interest rate. For trade and other receivables and contract assets, the amount of the impairment loss is the irrecoverable
amount estimated by management based on assumptions about risk of default and expected loss rates. Refer to Note 19 for further
disclosures.
The carrying amount is reduced directly by the impairment loss, with the exception of trade receivables and contract assets, where the
carrying amount is reduced through the use of an allowance account.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring
after the impairment loss was recognised, the previously recognised impairment loss is reversed, either directly or by adjusting the
allowance account, through profit or loss. The carrying amount of the financial asset at the date the impairment loss is reversed will not
exceed what the amortised cost would have been had the impairment loss not been recognised.

Financial liabilities (excluding derivative financial instruments) and equity instruments

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements
entered into and the applicable definitions. An equity instrument is any contract that evidences a residual interest in the assets of the
Group after deducting all of its liabilities and includes no obligation to deliver cash or other financial asset. Equity instruments issued by the
Group are recorded at the proceeds received, net of direct issuance costs.
Subsequent to initial recognition, financial liabilities are measured as follows:
• Borrowings are subsequently stated at amortised cost, using the effective interest rate method. Any difference between the proceeds
net of transaction costs and the settlement or redemption of borrowings is recognised over the term of the borrowings.
• Trade and other payables (excluding liabilities created by statutory requirements, revenue charged in advance, deferred revenue and
reduced subscriptions) as well as dividends payable are not interest bearing and are subsequently stated at their nominal values.

Offsetting of financial instruments:

Where a legally enforceable right of offset exists for recognised financial assets and financial liabilities and there is an intention to settle the
liability and realise the asset simultaneously or to settle on a net basis, all related financial effects are offset, and the net amount is reported
in the consolidated and separate statements of financial position.

p) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that the
Group will be required to settle that obligation and the amount of obligation can be reliably estimated. The expenses relating to provisions
are presented in profit or loss in the period in which they are incurred.
Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the reporting date and are
discounted to present value where the effect of the time value of money is material.

99
Notes to the financial statements continued

3. Significant accounting policies continued

q) Government grants
The Group may be entitled to receive grants from national or regional government which are primarily for the purpose of purchasing
property and equipment (‘capital grants’). Government grants are recognised when there is reasonable assurance that the Group will
comply with any condition on which payment or retention of the grant is dependent and the grant will be paid.
It is the Group’s policy to deduct capital grants from the cost of the assets acquired which will result in the depreciation expense for the
related assets being reduced during the useful life of the related assets. In the event that a capital grant becomes repayable, the cost of the
related assets is increased by the amount of the repayment and cumulative depreciation that would have been recognised in profit or loss
had the repaid amount not originally been recorded will be recognised immediately in profit or loss.
Government grants related to income are recognised in profit or loss on a systematic basis over the periods in which the Group recognises
the related costs as expenses, for which the grant is intended to compensate.

r) Current versus non-current classification

The Group presents assets and liabilities in the consolidated and separate statements of financial position based on current/non-current
classification. An asset is current when it is either:
• Expected to be realised or intended to be sold or consumed in the normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within 12 months after the reporting period
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting
period.
All other assets are classified as non-current.
A liability is current when either:
• It is expected to be settled in the normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within 12 months after the reporting period
• There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current.

100 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
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4. New accounting pronouncements

A number of amendments have been issued by the IASB, effective for periods commencing on or after 1 April 2022. These
pronouncements are not expected to have a material impact on the consolidated and separate income statement, consolidated and
separate statement of financial position, or consolidated and separate cash flow statement.

New accounting pronouncements adopted on 1 April 2022

The following new accounting pronouncements, none of which were considered by the Group as significant on adoption, were adopted by
the Group to comply with amendments to IFRS:
• Amendments to IFRS 3 relating to the reference to the Conceptual Framework;
• Amendments to IAS 16 relating to proceeds before intended use;
• Amendments to IAS 37 relating to costs of fulfilling a contract;
• Amendments to IFRS 1 relating to a subsidiary as a first-time adopter;
• Amendments to IFRS 9 relating to fees in the ‘10 per cent’ test for derecognition of financial liabilities; and
• Annual improvements to IFRS standards 2018 – 2020
None of the above standards had a material impact on the Group.

New accounting pronouncements to be adopted on or after 1 April 2023

• IFRS 17 Insurance Contracts and Amendments to IFRS 17 Insurance Contracts;
• Amendments to IAS 8 relating to definition of accounting estimates;
• Amendments to IAS 1 and IFRS Practice Statement 2 relating to disclosure of accounting policies; and
• Amendments to IAS 12 relating to deferred tax associated with assets and liabilities arising from a single transaction.
The Group’s financial reporting will be presented in accordance with the above new pronouncements, issued by the IASB, from 1 April 2023
or later where relevant, as the pronouncements become effective.

New accounting pronouncements to be adopted on or after 1 April 2024

• Amendments to IAS 1 relating to the classification of liabilities as current or non-current and non-current liabilities with covenants;
• Amendment to IFRS 16 relating to lease liability in a sale and leaseback; and
• Amendments to IFRS 10 and IAS 28 relating to sale or contribution of assets between an investor and its associate or joint venture4
The Group continues to assess the impact of these new accounting pronouncements; the changes are not expected to have a material
impact on the consolidated and separate income statement, consolidated and separate statement of financial position or consolidated and
separate cash flow statement.

Note:
4. The International Accounting Standards Board (IASB) postponed the effective date of this amendment indefinitely pending the outcome of its research project on the equity method
of accounting

101
Notes to the financial statements continued

5. Critical accounting judgements and estimates

The Group prepares its financial statements in accordance with IFRS as issued by the IASB, the application of which often requires
management to make judgements when formulating the Group’s and the Company’s financial position and results. Judgements, including
those involving estimations, made in the process of applying the Group’s accounting policies are discussed below. Management considers
these judgements to have a material effect on the consolidated and separate financial statements.
The determination of estimates requires the exercise of judgements based on various assumptions and other factors such as historical
experience, current and expected economic conditions. Although estimates are based on management’s best knowledge of current
events and actions they may undertake in the future, actual results ultimately may differ from these estimates. Accounting estimates and
the underlying assumptions are reviewed on an ongoing basis. The discussion below should also be read in conjunction with the Group’s
significant accounting policies in Note 3.
Management has discussed the critical accounting judgements and estimates, and associated disclosures with the Company’s Audit, Risk
and Compliance Committee.

a) Involvement in subsidiaries
Judgment is required in the assessment of whether the Company has control or significant influence in terms of the variability of returns
from the Company’s involvement in the investee or structured entity, the ability to use power to affect those returns and the significance of
the Company’s involvement in the investee or structured entity. The Company classified its investments and structured entities considering
this assessment of control or significant influence. Refer to Note 3(b) for further disclosures on the consolidated entities.

b) Impairment of non-financial assets reviews

Management undertakes an annual impairment test for goodwill and intangible assets not yet available for use. For assets with finite useful
lives, impairment testing is performed if events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. The Group does not have intangible assets with infinite useful lives.
Impairment testing is an area involving management judgments, requiring assessment as to whether the carrying amounts of assets can
be supported by the higher of their fair value less cost of disposal and value in use. The Group uses parties with the relevant expertise to
determine the assets’ fair value and cost of disposal.
Value in use is calculated as the net present value of future cash flows derived from assets using cash flow projections which have been
discounted at appropriate discount rates. In calculating the net present value of the future cash flows, certain assumptions are required to
be made in respect of highly uncertain matters including management’s expectations of:
• Growth in EBITDA, calculated as earnings before interest, taxation, depreciation, amortisation, impairment losses, profit/loss on disposal
of property and equipment, intangible assets and investments;
• Timing and quantum of future capital expenditure;
• Long-term growth rates; and
• The selection of appropriate discount rates to reflect the risks involved.
The Group prepares and annually approves formal five-year management plans, which are used in the value in use calculations.
Changing the assumptions selected by management, in particular the discount rate and growth rate assumptions used in the cash flow
projections, could significantly affect the Group’s impairment evaluation and consequently its results.
The Group’s review includes a sensitivity analysis of the key assumptions related to the cash flow projections.
Refer to Notes 18 for more information on the impairment assessment for goodwill. Other non-financial assets are disclosed in
Notes 15 and 16.

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c) Revenue recognition and presentation

Revenue recognition under IFRS 15 necessitates the collation and processing of very large amounts of data and the increased use of
management judgements and estimates to produce financial information. The most significant critical accounting judgement and the key
sources of estimation uncertainty are disclosed below.

Determination of standalone selling price

Where the Group doesn’t sell equivalent goods or services in similar circumstances on a standalone basis, it is necessary to estimate
the standalone price. When estimating the standalone price, the Group maximises the use of external inputs. Methods for estimating
standalone prices include determining the standalone price of similar goods and services sold by the Group, observing the standalone
prices for similar goods and services when sold by third parties or using a cost-plus reasonable margin approach (which is sometimes
the case for handsets and other equipment). Where it is not possible to reliably estimate standalone prices due to lack of observable
standalone sales or highly variable pricing, which is sometimes the case for services, the standalone price of an obligation may be
determined as the transaction price less the standalone prices of other obligations in the contract. The standalone price determined for
obligations materially impacts the allocation of revenue between obligations and impacts the timing of revenue when obligations are
provided to customers at different times – for example, the allocation of revenue between handsets, which are usually delivered up-front,
and services which are typically delivered over the contract period. However, it is considered that there is no significant risk of material
adjustment to the carrying value of contract-related assets or liabilities in the 12 months after the reporting date if these estimates
were revised.

Presentation: gross versus net

Determining whether the Group is acting as a principal or as an agent requires judgement and consideration of all relevant facts and
circumstances. When deciding the most appropriate basis for presenting the revenue or related costs, both the legal form and substance of
the agreement between the Group and its business partners are reviewed to determine each party’s respective role in the transaction. Such
judgements impact the amount of reported revenue and operating expenses but do not impact reported assets, liabilities or net cash flows
from operating activities.
Refer to Note 6 for further disclosures on revenue.

d) Taxation
Recognition of deferred tax assets
The recognition of deferred tax assets, particularly in respect of tax losses and tax credits, is based upon whether it is probable that there
will be sufficient and suitable taxable profits in the relevant legal entity to utilise the assets in the future. Management therefore exercises
judgement in assessing the future financial performance of the particular entity in which the deferred tax asset is to be recognised.
Refer to Note 13 for further disclosures on deferred tax.

Direct and indirect tax liabilities

The calculation of the Group’s direct and indirect tax liabilities necessarily involves judgments, including those involving estimations, in
respect of certain matters where the tax impact is uncertain until a conclusion has been reached with the tax authority or, as appropriate,
through a formal legal process. The final resolution of some of these items may give rise to material gains, losses and/or cash flows. The
Group uses in-house tax experts when assessing uncertain tax positions and seeks the advice of external professional advisers where
appropriate. Provisions are recognised for uncertain tax positions when the Group has a present obligation as a result of a past event and it
is probable that there will be a future outflow of economic benefits from the Group. Provisions are measured using the most likely outcome.
The resolution of issues is not always within the Group’s control and it is often dependent on the efficiency of the legal processes in the
relevant tax jurisdictions in which the Group operates. Issues can, and often do, take many years to resolve. Payments in respect of tax
liabilities for an accounting period result from payments on account and on the final resolution of open items. As a result, there can be
substantial differences between the taxation charge to profit or loss and tax payments.
Refer to Note 34 for further disclosures on tax matters.

103
Notes to the financial statements continued

5. Critical accounting judgements and estimates continued

e) Leases – IFRS 16
Lease identification
Whether the arrangement is considered a lease, or a service contract depends on the analysis by management of both the legal form and
substance of the arrangement between the Group and the counter-party to determine if control of an identified asset has been passed
between the parties; if not, the arrangement is a service arrangement. Control exists if the Group obtains substantially all of the economic
benefit from the use of the asset, and has the ability to direct its use, for a period of time. An identified asset exists where an agreement
explicitly or implicitly identifies an asset or a physically distinct portion of an asset which the lessor has no substantive right to substitute.
The scenarios requiring the greatest judgement include those where the arrangement is for the use of fiber or other fixed
telecommunication lines. Generally, where the Group has exclusive use of a physical line it is determined that the Group can also direct the
use of the line and therefore leases will be recognised. Where the Group provides access to fiber or other fixed telecommunication lines to
another operator on a wholesale basis, the arrangement will generally be identified as a lease, whereas when the Group provides fixed line
services to an end-user, generally control over such lines is not passed to the end-user and a lease is not identified.
The impact of determining whether an agreement is a lease, or a service contract depends on whether the Group is a potential lessee or
lessor in the arrangement and, where the Group is a lessor, whether the arrangement is classified as an operating or finance lease. The
impact for each scenario is described below where the Group is potentially:
A lessee: The judgment impacts the nature and timing of both costs and reported assets and liabilities. A lease results in depreciation and
interest being recognised and an asset and a liability being reported; the interest charge will decrease over the life of the lease. A service
contract results in operating expenses being recognised evenly over the life of the contract and no assets or liabilities being recorded, other
than trade payables, prepayments and accruals.
An operating lessor: The judgment impacts the nature of income recognised. An operating lease results in lease income being recognised
whilst a service contract results in service revenue. Both are recognised evenly over the life of the contract.
A finance lessor: The judgment impacts the nature and timing of both income and reported assets. A finance lease results in the lease
income being recognised at commencement of the lease and an asset (the net investment in the lease) being recorded.

Lease term
Where leases include additional optional periods after an initial lease term, significant judgement is required in determining whether these
optional periods should be included when determining the lease term. The impact of this judgment is significantly greater where the Group
is a lessee. As a lessee, optional periods are included in the lease term if the Group is reasonably certain it will exercise an extension option
or will not exercise a termination option. This depends on an analysis by management of all relevant facts and circumstances including
the leased asset’s nature and purpose, the economic and practical potential for replacing the asset and any plans that the Group has in
place for the future use of the asset. Where a leased asset is highly customised, either when initially provided or as a result of leasehold
improvements, or it is impractical or uneconomic to replace, then the Group is more likely to judge that lease extension options are
reasonably certain to be exercised.
Where extension options are included, a higher value of the right-of-use asset and lease liability will be recognised. The normal approach
adopted for determining the lease term by asset class is described below.
Between 5 and 10 years for land and buildings (excluding retail), with terms at the top end of this range if the lease relates to assets that
are considered to be difficult to exit sooner for economic, practical or reputational reasons;
• Where leases are used to provide internal connectivity, the lease term for the connectivity is aligned to the lease term or useful
economic life of the assets connected; and
• The customer service agreement length for leases of local loop connections or other assets required to provide fixed line services to
individual customers.
In most instances, the Group has options to renew or extend leases for additional periods after the end of the lease term which are assessed
using the criteria above.
After initial recognition of a lease, the Group only reassesses the lease term when there is a significant event or a significant change
in circumstances, which was not anticipated at the time of the previous assessment. Significant events or significant changes in
circumstances could include merger and acquisition or similar activity, significant expenditure on the leased asset not anticipated in the
previous assessment, or detailed management plans indicating a different conclusion on optional periods to the previous assessment.
Where a significant event or significant change in circumstances does not occur, the lease term, and therefore lease liability and right of use
asset value, will decline over time.

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Determining the lease term of contracts with renewal and termination options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend
the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not
to be exercised.
The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating whether
it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that
create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses
the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to
exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the
leased asset).
The Group included the renewal period as part of the lease term for the leases recognised. The Group typically exercises its option to renew
for leases because there will be a significant negative effect on operations if a replacement asset is not readily available.

Estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure
lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the
funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects
what the Group ‘would have to pay’, which requires estimation when no observable rates are available, such as when the Group does not
enter into similar financing transactions, or when they need to be adjusted to reflect the terms and conditions of the lease, for example,
when leases are not in the Group’s functional currency.
The Group estimates the IBR using observable inputs, such as market interest rates, when available, and is required to make certain entity-
specific estimates, such as the Group’s credit rating.
Refer to Note 25 for further disclosures on leases.

f) Non-current assets held for sale

The Group exercises judgement in estimating the amount of time that a sale transaction of a non-current asset or disposal group (the
‘asset’) will take to be completed, when determining whether the asset qualifies to be classified as held for sale under IFRS 5, “Non-current
Assets Held for Sale and Discontinued Operations”.

g) Provisions and contingent liabilities

The Group exercises judgments in measuring the exposure to contingent liabilities relating to pending litigation or other outstanding
claims subject to negotiated settlement, mediation, arbitration or government regulation, as well as other contingent liabilities. Judgments,
including those involving estimations, are necessary in assessing the likelihood that a pending claim will succeed, or a liability will arise, and
to quantify the possible range of the financial settlement.
Refer to Notes 28 and 33 for further disclosures on provisions and contingent liabilities.

105
Notes to the financial statements continued

5. Critical accounting judgements and estimates continued

h) Business combinations
The amount of goodwill initially recognised as a result of a business combination is dependent on the allocation of the consideration
transferred to the fair value of the identifiable assets acquired and the liabilities assumed. The Group uses external parties with the requisite
expertise to determine the acquisition-date fair values of certain identifiable assets acquired. The fair value of assets is determined by
discounting estimated future net cash flows generated by the assets, where no active market for the assets exists. The use of different
discount rates as well as assumptions for the expectation of future cash flows would change the valuation of the asset.
Allocation of the consideration transferred affects the Group’s results as property and equipment as well as intangible assets with
finite useful lives are respectively depreciated and amortised, whereas goodwill are not. This could result in differing depreciation and
amortisation charges based on the allocation.
Refer to Note 18 for further disclosures on goodwill.

i) Intangible assets with a finite useful life

Intangible assets with finite useful lives comprise licenses and computer software. These assets arise from purchases and from acquisitions
as part of business combinations. The relative size of the Group’s intangible assets with finite useful lives makes the judgments surrounding
the estimated useful lives critical to the consolidated and separate financial positions and performance. The useful lives used to amortise
intangible assets relate to the future performance of the assets acquired and management’s judgment of the period over which economic
benefits will be derived from the assets. The residual values of intangible assets are estimated to be zero. At 31 March 2023, the Group’s
intangible assets with finite useful lives amounted to TZS210 233 million (2022: TZS76 681 million) and represented 9.50% (2022: 3.76%)
of the Group’s total assets.

Estimation of useful lives

The basis for determining the useful lives for the various categories of intangible assets is as follows:
Licenses
The estimated useful life is, generally, the term of the license, unless there is a presumption of renewal at a negligible cost. The license
term reflects the period over which the Group will receive economic benefits. For technology-specific licenses with a presumption of
renewal at a negligible cost, the estimated useful life reflects the Group’s expectation of the period over which the Group will continue
to receive economic benefits from the license.
Computer software
For computer software licenses, the useful life represents management’s view of the expected period over which the Group will receive
benefits from the software, but not exceeding the license term. For unique software products controlled by the Group, the life is based
on historical experience with similar products as well as anticipation of future events, which may impact the life, such as changes in
technology.
The estimated useful lives of intangible assets with finite useful lives are as follows:

2023 2022
Years Years
Licences 3 – 25 3 – 25
Computer software 3–6 3–6
Refer to Note 16 for further disclosures on intangible assets.

106 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
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j) Property and equipment

Property and equipment represent a significant proportion of the Group’s and Company’s total asset base. Therefore, the estimates and
assumptions made to determine their carrying amounts and related depreciation are critical to the Group’s and the Company’s financial
position and performance.

Estimation of useful life and residual value

The charge in respect of periodic depreciation is derived after estimating an asset’s expected useful life and the expected residual value.
Increasing an asset’s expected life or its residual value would result in a reduced depreciation charge to profit or loss.
The Group re-assesses the residual value of every item of property and equipment annually. In determining residual values, the Group
uses management’s best estimate for residual values and third-party confirmation. Management has determined that there is no active
market for the following assets within the network infrastructure and equipment category: radio, transmission, switching, SIM centers and
community services, and therefore these assets have no residual value. At the end of the useful life, the value of these assets is expected to
be nil or insignificant.
The estimation of useful lives is based on certain indicators such as historical experience with similar assets as well as anticipation of future
events, which may impact the lives, such as changes in technology. The useful lives will also depend on the future performance of the
assets as well as management’s judgment of the period over which economic benefits will be derived from the assets.
Network infrastructure is only depreciated over a period that extends beyond the expiry of the associated license under which the operator
provides telecommunications services if there is a reasonable expectation of renewal or an alternative future use for the asset.
The estimated useful lives of depreciable property and equipment are as follows:

2023 2022
Years Years
Buildings included in land and buildings 25 – 50 25 – 50
Leasehold improvements 1–5 1–5
Network infrastructure and equipment 3 – 20 3 – 20
Other assets 2–5 2–5
Refer to Note 15 for further disclosures on property and equipment.

k) Provision for expected credit losses for trade receivables and contract assets
The Group uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision rates are based on days past due
for groupings of various customer segments that have similar loss patterns, that is, by product type, customer type and rating, and coverage
by deposits and other forms of credit insurance.
The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate the matrix to adjust the
historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (i.e. gross domestic product)
are expected to deteriorate over the next year which can lead to an increased number of defaults, the historical default rates are adjusted.
At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed. The
assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate.
The amount of ECLs is sensitive to changes in circumstances and forecasted economic conditions. The Group’s historical credit loss
experience and forecast of economic conditions may also not be representative of customer’s actual default in the future.
The information about the ECLs on the Group’s trade receivables and contract assets is disclosed in Note 36.

107
Notes to the financial statements continued

6. Revenue
Group Company
TZS m 2023 2022 2023 2022
Major products/service lines
Customer service revenue 975 057 882 384 704 568 561 338
Mobile interconnect 46 340 48 105 46 340 48 105
Fixed service revenue 19 509 15 328 19 509 15 328
Other service revenue 12 856 10 698 18 123 15 487
Service revenue 1 053 762 956 515 788 540 640 258
Equipment revenue 16 030 13 060 16 030 13 060
Other non-service revenue 2 486 922 2 486 922
Revenue from contracts with customers 1 072 278 970 497 807 056 654 240
Interest income recognised as revenue 740 528 740 528
1 073 018 971 025 807 796 654 768
Total future revenue from contracts with customers with performance obligations not satisfied at 31 March 2023 is TZS5 712 million
of which TZS3 662 million is expected to be recognised within the next year, with the remaining TZS2 050 million to be recognised in
the following 12 months (2022: TZS3 258 million of which TZS2 319 million is expected to be recognised within the next year, with the
remaining TZS939 million to be recognised in the following 12 months).
Customer service revenue comprises of mobile contract revenue and mobile prepaid revenue.
Equipment revenue and other non-service revenue are recognised at a point in time while the service revenue is recognised over time.
Revenue is further disaggregated per revenue stream as follows:

Group Company
TZS m 2023 2022 2023 2022
Mobile voice revenue 283 547 286 985 283 547 287 191
M-Pesa revenue 357 136 329 557 1 928 –
Mobile data revenue 273 702 203 985 273 762 204 301
Digital & VAS revenue 35 797 36 294 35 797 36 219
Mobile incoming revenue 46 340 48 105 46 340 48 105
Messaging revenue 29 038 28 861 113 697 36 925
Fixed revenue 19 509 15 328 19 509 15 328
Other service revenue 8 693 7 400 13 960 12 189
Service revenue 1 053 762 956 515 788 540 640 258
Non-service revenue 19 256 14 510 19 256 14 510
1 073 018 971 025 807 796 654 768

7. Direct expenses
Group Company
TZS m 2023 2022 2023 2022
Interconnect costs (37 793) (34 531) (37 793) (34 531)
Business managed services costs (369) (294) (369) (294)
Mobile prepaid airtime commission costs (62 331) (57 776) (68 979) (62 574)
M-Pesa commission costs (141 880) (126 627) – –
Regulatory fees (46 357) (42 380) (39 076) (35 411)
Mobile other costs (24 179) (13 106) (8 882) (10 808)
Acquisition costs (25 806) (21 210) (24 310) (19 892)
Retention costs (9 533) (5 816) (9 533) (5 816)
Stock obsolescence (charge)/release (Note 20) (1 222) 2 555 (1 222) 2 555
(349 470) (299 185) (190 164) (166 771)

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8. Staff expenses
Group Company
TZS m 2023 2022 2023 2022
Wages and salaries, including other termination benefits (51 322) (49 361) (33 972) (30 253)
Share based compensation (Note 8.1) (150) (437) (150) (437)
Pension costs – defined contribution plans (3 104) (4 245) (2 433) (3 653)
Restructuring costs5 – 312 – 312
Skills and Development Levy (1 877) (1 648) (1 612) (1 413)
Bonus expense (8 777) (8 444) (7 749) (6 602)
(65 230) (63 823) (45 916) (42 046)

8.1 Share based compensation

Vodacom Group Limited Forfeitable Share Plan (FSP)
This share-based payment arrangement is accounted for as an equity-settled share-based payment transaction by Vodacom International
Limited (VIL), an employer company for the Vodacom Tanzania Public Limited Company staff who are part of the scheme, since the Group
has no obligation to settle the share-based payment transaction.
Under the FSP, awards of Vodacom Group Limited shares are granted to executive directors and selected employees of the Vodacom Group
Limited. The vesting of these shares is subject to continued employment, and is conditional upon achievement of performance targets,
measured over a three-year period, for directors, senior management and other selected employees. The fair value of the share awards on
grant date were measured using the quoted market price of a Vodacom Group Limited share without adjusting for expected dividends and
non-market performance conditions. Market conditions are adjusted for.
The Company reimburses the cost incurred by VIL through monthly invoices in the form of cost recovery with no future obligation.

9. Other operating expenses

Group Company
TZS m 2023 2022 2023 2022
(a) Other operating expenses and income
Network operating expenses (190 564) (167 341) (183 669) (160 067)
Amortisation of government grants (Note 26) 345 1 716 345 1 716
Office administration expenses (65 307) (70 359) (37 626) (45 723)
Other recoveries and expenses (10 848) (13 170) (8 162) (10 089)
Amortisation of capacity prepayments (Note 17) (16 353) (14 345) (16 353) (14 345)
Auditors’ remuneration (625) (574) (501) (455)
Audit fees (625) (568) (501) (449)
Other charges – (6) – (6)
Gain on disposal of property and equipment and intangible assets 386 6 386 6
Loss on de-recognised lease liabilities and right of use assets – (24) – (24)
Capacity leases and right of way expenses (12 403) (9 616) (12 403) (9 616)
Foreign exchange losses (2 217) (5 046) (2 774) (5 106)
Donation to charitable activities (720) (720) (720) (720)
(298 306) (279 473) (261 477) (244 423)
(b) Depreciation and amortisation
Depreciation (Note 15) (225 869) (220 894) (222 916) (217 433)
Amortisation (Note 16) (22 437) (15 307) (18 941) (12 063)
(248 306) (236 201) (241 857) (229 496)
(c) Net credit gains/(losses) on financial assets
Expected credit losses – Trade receivables (Note 19) (2 874) 2 295 (2 878) 2 301
Expected credit losses – Contract assets (Note 19) (100) (20) (100) (20)
(2 974) 2 275 (2 978) 2 281

Note:
5. This relates to the residual amount of provision following the settlement of compensation to the retrenched staff in the financial year 2021.

109
Notes to the financial statements continued

10. Finance and dividend income

Group Company
TZS m 2023 2022 2023 2022
Interest income from cash and investments in government
treasury bills 7 792 7 219 4 401 2 729
7 792 7 219 4 401 2 729
Interest income from M-Pesa cash balances 16 671 18 618 – –
Dividend income (Note14) – – 157 009 –
24 463 25 837 161 410 2 729
The interest income is earned on amounts deposited with banks. Interest income is recognised using the effective interest rate method.

11. Finance costs

Finance costs include interest on the lease liabilities recognised. The recognized finance costs, which are all recognised using the effective
interest method, are detailed below:

Group Company
TZS m 2023 2022 2023 2022
Interest charge on lease liabilities (Note 25) (57 098) (60 872) (57 098) (60 872)
Interest on bank overdrafts (39) – (39) –
Interest on licence debt (2 222) – (2 222) –
Interest on taxation expense (277) (5 753) – (5 753)
Interest expense on site restoration obligation (Note 28) (566) (327) (566) (327)
(60 202) (66 952) (59 925) (66 952)
Interest expense: M-Pesa customers (16 448) (18 592) – –
(76 650) (85 544) (59 925) (66 952)

12. Net loss on foreign currency translation

Group Company
TZS m 2023 2022 2023 2022
Lease liabilities (Note 25) (1 971) 24 (1 971) 24
Cash and cash equivalents (968) (1 572) (930) (1 578)
(2 939) (1 548) (2 901) (1 554)

13. Income tax

a) Income tax (expense)/credit
Group Company
TZS m 2023 2022 2023 2022
Current income tax expense: (32 359) (23 841) (22 682) 8 826
– In respect of the current year (32 359) (32 901) (22 682) –
– In respect of prior years – 9 060 – 8 826
Deferred tax credit on origination and reversal of temporary
differences 50 564 399 50 871 –
– In respect of the current year (1 581) (1 280) (1 274) –
– In respect of the prior year 52 145 1 679 52 145 –

Total income tax (expense)/credit 18 205 (23 442) 28 189 8 826

b) Components of deferred tax credited to profit or loss

Group Company
TZS m 2023 2022 2023 2022
Property and equipment capital allowances (10 852) 854 (11 288) –
Tax losses (10 955) – (10 955) –
Provisions and deferred income (28 757) (1 253) (28 628) –

(50 564) (399) (50 871) –

110 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

c) Factors affecting the tax expense for the year

Group Company
TZS m 2023 2022 2023 2022
Expected income tax expense on profit before tax at the Tanzania
statutory tax rate 7 905 954 45 997 (32 761)
Adjusted for:
– Non-deductible expenditure6 4 340 6 823 3 376 6 777
– Non-taxable gaming cost/(income) (333) 398 (47 437) 398
Net tax credit recognised from prior period – Holding Company (42 108) – (42 108) –
– Deferred tax asset not recognised for tax losses and net
deductible timing differences (Note 13g). – 25 585 – 25 585
– Deferred tax credit not recognised – subsidiary – 421 – –
Alternative minimum tax – Holding Company 4 046 – 4 046 –
Withholding tax from – Subsidiary Company 7 937 – 7 937 –
Prior year adjustment – Subsidiary Company 8 (10 739) – (8 825)
(18 205) 23 442 (28 189) (8 826)
The Tanzania statutory tax rate is 30% (2022: 30%). The Group’s effective tax rate is (69.09)% (2022: 737.40%). The Company’s effective tax
rate is (18.40)% (2022: 8.08%).
The effective tax rate of (69.09)% in the current year is significantly lower than the statutory rate of 30.0% largely due to recognised
deferred tax asset relating to prior years from the Company.

d) Income tax receivable

Group Company
TZS m 2023 2022 2023 2022
Opening balance 63 847 44 498 61 854 47 977
Current income (tax expense)/credit (32 359) (23 841) (22 682) 8 826
Total tax paid 17 050 43 191 4 579 5 051
Additional tax deposits – 4 580 – 4 580
Current income tax paid 17 050 38 611 4 579 471
Withholding tax deducted at source 2 105 2 536 372 471
Tax paid 14 945 36 075 4 207 –

Closing balance 48 537 63 847 43 751 61 854

Maturity analysis
Non-current: 33 098 41 011 33 098 41 011
Pending tax matters 33 098 41 011 33 098 41 011
Current: 15 439 22 836 10 653 20 843
Current tax receivable 15 439 22 836 10 653 20 843

48 537 63 847 43 751 61 854

The additional tax deposits relate to deposit payments made to the revenue authority to allow filing of objections to disputed income tax
assessments. The deposits are expected to be recovered on resolution of the disputed income tax assessments through cash refund and/or
offset with undisputed tax liabilities.
The tax credit for the Company relates to the refund accrued to the Company in respect of prior year Income taxes following revised
assessments of prior year taxes with Tanzania Revenue Authority (TRA).

Note:
6. Non deductible expenditure includes charitable donations, dispute losses, fines and penalties.

111
Notes to the financial statements continued

13. Income tax continued

e) Components of the recognised deferred tax asset
Group Company
TZS m 2023 2022 2023 2022
Capital allowances (10 294) 558 (11 288) –
Tax losses (10 955) – (10 955) –
General provisions (31 104) (2 346) (28 628) –
Net deferred tax liabilities (52 353) (1 788) (50 871) –

f) Reconciliation of the recognised net deferred tax asset balance

Group Company
TZS m 2023 2022 2023 2022
At the beginning of the year (1 788) (1 389) – –
Credit to profit or loss (50 565) (399) (50 871) –
At the end of the year (52 353) (1 788) (50 871) –

g) Components of deferred tax assets not recognised

Group Company
TZS m 2023 2022 2023 2022
Capital allowances – 12 466 – 12 466
Unrealized Foreign exchange Losses – (4 389) – (4 389)
Provisions and deferred income – 9 555 – 9 555
Tax losses – 34 513 – 34 513
– 52 145 – 52 145

14. Basic and diluted earnings/(loss) per share

Earnings/(loss) per share calculations are based on earnings and the weighted average number of ordinary shares outstanding as set out
below:

Group Company
2023 2022 2023 2022
Basic and diluted earnings/(loss) per share (TZS) 19.89 (9.05) 81.03 (44.81)
Earnings/(loss) attributable to the shareholders (TZS m) 44 556 (20 263) 181 511 (100 376)
Weighted average number of equity shares outstanding (Millions) 2 240 2 240 2 240 2 240
Dividend declared during the year (TZS m) 157 – – –
Dividend per share (TZS) declared during the year 0.07 – – –
Out of dividend declared in the prior years, TZS46 million was paid during the year. In addition during the year M-Pesa limited Board of
Directors declared and paid dividends amounting to TZS157 167 million, of which TZS157 010 million was paid to the parent company
(Vodacom Tanzania PLC) and TZS157 million to a minority shareholder (Vodacom Group Limited).

112 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

15. Property and equipment

Network
Leasehold land infrastructure &
& buildings equipment Other assets Total
Group TZS m TZS m TZS m TZS m
Net book value as at 1st April 2021 26 338 1 010 463 4 425 1 041 226
Cost 37 874 2 201 470 11 628 2 250 972
Accumulated depreciation (11 536) (1 191 007) (7 203) (1 209 746)
Additions – 193 420 218 193 638
Disposals – cost – (16 091) (4 081) (20 172)
Accumulated depreciation on disposed assets – 16 034 4 081 20 115
Depreciation charge for the year (1 518) (217 774) (1 602) (220 894)
Increase in provision for site restoration obligation – 713 – 713
Net book value as at 31st March 2022 24 820 986 765 3 041 1 014 626
Cost 37 874 2 379 512 7 765 2 425 151
Accumulated depreciation (13 054) (1 392 747) (4 724) (1 410 525)
Additions – 174 473 2 759 177 232
Disposals – cost (22) (179 198) (1 843) (181 063)
Accumulated depreciation on disposed assets 22 179 089 1 843 180 954
Depreciation charge for the year (640) (224 154) (1 075) (225 869)
Transfer to intangible assets – costs – (1 008) – (1 008)
Increase in provision for site restoration obligation – 304 – 304
Net book value as at 31 March 2023 24 180 936 271 4 725 965 176
Cost 37 852 2 374 083 8 681 2 420 616
Accumulated depreciation (13 672) (1 437 812) (3 956) (1 455 440)

Included in the net book value balance of network infrastructure and equipment is the cost of assets under construction (work in progress
or WIP) of TZS24 418 million (2022: TZS31 063 million). The cost of these assets was not depreciated during the year (2022: Nil).

113
Notes to the financial statements continued

15. Property and equipment continued

Network
Leasehold land infrastructure &
& buildings equipment Other assets Total
Company TZS m TZS m TZS m TZS m
Net book value as at 1 April 2021 26 338 1 000 178 4 426 1 030 942
Cost 37 874 2 162 464 11 644 2 211 982
Accumulated depreciation (11 536) (1 162 286) (7 218) (1 181 040)
Additions – 193 420 218 193 638
Disposals – cost – (16 091) (4 081) (20 172)
Accumulated depreciation on disposed assets – 16 034 4 081 20 115
Depreciation charge for the year (1 518) (214 313) (1 602) (217 433)
Increase in provision for site restoration obligation – 713 – 713
Transfer to subsidiary (M-Pesa Limited)7 – (918) – (918)
Net book value as at 31 March 2022 24 820 979 023 3 042 1 006 885
Cost 37 874 2 339 588 7 781 2 385 243
Accumulated depreciation (13 054) (1 360 565) (4 739) (1 378 358)
Additions – 174 473 2 759 177 232
Disposals – cost (22) (179 203) (1 843) (181 068)
Accumulated depreciation on disposed assets 22 179 089 1 843 180 954
Depreciation charge for the year (640) (221 201) (1 075) (222 916)
Increase in provision for site restoration obligation – 304 – 304
Net book value as at 31 March 2023 24 180 932 485 4 726 961 391
Cost 37 852 2 335 162 8 697 2 381 711
Accumulated depreciation (13 672) (1 402 677) (3 971) (1 420 320)

Included in the net book value balance of network infrastructure and equipment is the cost of assets under construction of
TZS24 418 million (2022: TZS31 063 million). The cost of these assets was not depreciated during the year (2022: Nil).
During the year, the reassessment of useful lives of network assets was undertaken in accordance with Company’s accounting policies with
the net impact of a decrease in depreciation charge for the current year of TZS5 078 million (2022: TZS18 500 million). The future periods
are expected to be impacted in a similar manner until when the useful lives are otherwise re-assessed and revised.
No property and equipment were pledged as collateral against borrowings at year-end (2022: None)

Note:
7. The prior year amounts were enlarged to reflect cost and accumulated depreciation of assets disposed. This change does not have an impact on reported NBV.

114 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Land occupancy rights and buildings (carrying value)

Group Company
TZS m 2023 2022 2023 2022
Plot No. 49-53, Block M, Mbezi Juu, Dar es Salaam, Tanzania,
Certificate of Title No. 49468 (acquired in May 2007) 7 176 7 460 7 176 7 460
Plot No. 43, Kwale Road, Dar es Salaam, Tanzania, Certificate
of Title No. 186031/10 (acquired in May 2001) 2 121 2 161 2 121 2 161
Plots No. 1 & 2, Block B, NCC Link Area, Dodoma Municipality
(acquired in July 2005) 1 005 1 045 1 005 1 045
Plot No. 1999, Block M, Forest Area, Mbeya Municipality
(acquired in April 2000) 615 658 615 658
Nyegezi Hill, Mwanza (acquired in October 2009) 592 627 592 627
Moshono Hill, Arusha (acquired in July 2009) 610 646 610 646
12 119 12 597 12 119 12 597
The above land occupancy rights and buildings excludes leased components which are disclosed in property and equipment schedules for
both Group and Company.

Right-of-use assets
The Group’s and Company’s property and equipment include the following right of use (ROU) assets recognised.

Network
Leasehold land infrastructure
& buildings & equipment Other assets Total
Group TZS m TZS m TZS m TZS m
As at 01 April 2021 10 581 457 928 1 646 470 155
Additions – 41 077 – 41 077
De-recognised right of use assets – (58) – (58)
Depreciation (1 078) (84 383) (1 336) (86 797)
As at 31 March 2022 9 503 414 564 310 424 377
Additions – 30 470 2 523 32 993
Depreciation (200) (84 332) (847) (85 379)
As at 31 March 2023 9 303 360 702 1 986 371 991
Network
Leasehold land infrastructure
& buildings & equipment Other assets Total
Company TZS m TZS m TZS m TZS m
As at 31 March 2021 10 581 457 928 1 646 470 155
Additions – 41 077 – 41 077
Reclassifications between categories – depreciation (2 042) 3 991 (1 949) (58)
Depreciation (1 078) (84 383) (1 336) (86 797)
As at 31 March 2022 9 503 414 564 310 424 377
Additions – 30 470 2 523 32 993
De-recognised right of use assets – – – –
Depreciation (200) (84 332) (847) (85 379)
As at 31 March 2023 9 303 360 702 1 986 371 991

115
Notes to the financial statements continued

16. Intangible assets

Computer
Licences software Total
Group TZS m TZS m TZS m
Net book value as at 31 March 2021 40 174 30 419 70 593
Cost 53 141 85 428 138 569
Accumulated amortisation (12 967) (55 009) (67 976)
Additions – 21 395 21 395
Amortisation (3 626) (11 681) (15 307)
Net book value as at 31 March 2022 36 548 40 133 76 681
Cost 53 141 106 823 159 964
Accumulated amortisation (16 593) (66 690) (83 283)
Additions 143 140 11 841 154 981
Amortisation (7 602) (14 835) (22 437)
Disposals – costs – (21 343) (21 343)
Accumulated depreciation on disposed assets – 21 343 21 343
Transfer from property and equipments – costs – 1 008 1 008
Net book value as at 31 March 2023 172 086 38 147 210 233
Cost 196 281 98 329 294 610
Accumulated amortisation (24 195) (60 182) (84 377)

Computer
Licences software Total
Company TZS m TZS m TZS m
Net book value as at 31 March 2021 22 921 25 827 48 748
Cost 29 391 71 498 100 889
Accumulated amortisation (6 470) (45 671) (52 141)
Additions – 21 395 21 395
Amortisation (2 222) (9 841) (12 063)
Transfer to subsidiary (M-Pesa Limited) – (4 907) (4 907)
Net book value as at 31 March 2022 20 699 32 474 53 173
Cost 29 391 87 986 117 377
Accumulated amortisation (8 692) (55 512) (64 204)

Additions 143 140 11 841 154 981

Amortisation (6 198) (12 743) (18 941)
Disposals – costs – (21 343) (21 343)
Accumulated depreciation on disposed assets – 21 343 21 343
Transfer to subsidiary (M-Pesa Limited) – costs – (905) (905)
Transfer to subsidiary (M-Pesa Limited) – accumulated amortisation – 1 1

Net book value as at 31 March 2023 157 641 30 668 188 309
Cost 172 531 77 579 250 110
Accumulated amortisation (14 890) (46 911) (61 801)

116 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

17. Capacity prepayments

The Company entered into long-term (10 year) agreements with the Tanzania Telecommunication Company Limited (‘TTCL’) and the
National Information and Communication Technology Backbone (‘NICTBB’) for the provision of 1 Synchronous Transport Module (‘sTM’)
level-16 fibre optic capacity between various points of presence. Over the years, the capacity increased to 2xSTM level-16 and 3xSTM
level-4.
The Company also made prepayments under NICTBB, Seacom, Zantel and Vodacom group fibre company (PanSA) leased line contracts
for the provision of undersea fibre capacity. These were converted from short-term to long-term whereby the Company made an upfront
payment for services over a 10-year period.
The movement in capacity prepayments are shown below:

Group Company
TZS m 2023 2022 2023 2022
At 1 April 60 446 59 747 60 446 59 747
Additions 13 162 15 044 13 162 15 044
Amortisation for the year [Note 9(a)] (16 353) (14 345) (16 353) (14 345)
At 31 March 57 255 60 446 57 255 60 446
Non-current 40 339 44 582 40 339 44 582
Current 16 916 15 864 16 916 15 864
57 255 60 446 57 255 60 446

18. Goodwill
On 19 July 2016, the Company acquired 100% of Shared Networks Tanzania (SNT). SNT held a license to use spectrum in the 900MHz band
in rural Tanzania. A cash payment of TZS24 246 million was made following the acquisition and the goodwill generated on acquisition is as
shown below:

Group
2023
Consideration transferred TZS m
Net consideration 24 246

Assets acquired, and liabilities assumed at the date of acquisition

Group
TZS m
Fair value of net assets acquired 22 258
Goodwill arising on acquisition
Cash consideration 24 246
Less: Fair value of identifiable assets acquired (22 258)
Goodwill arising on acquisition 1 988

Group
TZS m 2023 2022
At 1 April 1 639 1 639
Impairment charge for the year – –
At 31 March 1 639 1 639

The movement in the impairment of goodwill was as follows:

Group
TZS m 2023 2022
At 1 April 349 349
Impairment charge for the year – –
At 31 March 349 349
The goodwill impairment testing done at year-end indicated no impairment charge (2022: TZS Nil). In conducting the impairment
assessment of the goodwill, an election was made to compare the carrying amount of the Cash Generating Unit (CGU) to which the
goodwill is allocated and fair value less costs of disposal as the recoverable amount. The spectrum asset is fundamental to the CGU’s
revenue generation and therefore, an election was taken during the impairment assessment of the goodwill to compare the CGU’s fair value
less costs of disposal as the recoverable amount and the carrying amount (total equity). The fair value less disposal costs was calculated
using the company’s most recent market capitalization and compared to the carrying amount of equity. The fair value is 113.5% of the
carrying amount of the equity (March 2022: 119.4%).

117
Notes to the financial statements continued

19. Trade and other receivables

Group Company
TZS m 2023 2022 2023 2022
(a) Non – current
Contract assets – long term 2 161 1 076 2 161 1 076
Expected credit losses (Contract Assets) (111) (32) (111) (32)
Contract assets (net) 2 050 1 044 2 050 1 044
Deposits in relation to indirect taxes 9 803 10 344 9 003 10 344
11 853 11 388 11 053 11 388
(b) Current
Trade receivables 95 795 93 802 89 917 90 836
Expected credit losses (38 979) (38 276) (38 903) (38 197)
Trade receivables (net) 56 816 55 526 51 014 52 639
Prepayments 27 164 33 013 22 563 30 705
Intergroup receivables (Note 35)8 4 333 7 317 27 363 16 165
Contract assets 3 762 2 286 3 762 2 286
Expected credit losses (Contract Assets) (100) (79) (100) (79)
Contract assets (net) 3 662 2 207 3 662 2 207
Other receivables 23 796 14 507 8 789 10 525
115 771 112 570 113 391 112 241
Other receivables mainly relate to prefunding for customs clearance, deposit for International money transfer clearing account and other
advances.
Included in contract assets is capitalised commission costs amounting to TZS123 million (2022: TZS105 million) which is amortised on a
straight line basis over the contract life.
Trade and other receivables mainly consist of amounts owed to us by customers and amounts that we pay to our suppliers in advance. Also,
within this note are contract assets which represent an asset for accrued revenue in respect of goods or services delivered to customers for
which a trade receivable does not yet exist.
Out of the contract assets balance for prior year representing unsatisfied performance obligations, TZS3 873 million has been recognised
as revenue in the current year (2022: TZS2 090 million).
The trade receivables and contract assets are stated net of expected credit losses based on the management’s assessment of the
counterparty’s creditworthiness. All receivables are individually tested for impairment. For details on the Company’s and Group’s credit risk
management processes and the carrying amounts of the Company’s and Group’s trade and other receivables as well as contract assets
which are denominated in different currencies refer to Note 36.

Group Company
TZS m 2023 2022 2023 2022
At 1 April (38 276) (42 285) (38 197) (42 212)
Bad debts written off 2 171 1 734 2 171 1 734
(Charge)/release to profit or loss [Note 9(c)] (2 874) 2 275 (2 878) 2 281
At 31 March (38 979) (38 276) (38 904) (38 197)
Trade receivables are stated at cost which normally approximates fair value due to short term maturity. Generally, no interest is charged on
trade receivables. For non-current contract assets, the carrying amount also approximate the fair value.
Below is the ECL movement for contract assets:

Group Company
TZS m 2023 2022 2023 2022
At 1 April (111) (82) (111) (82)
Write offs – 20 – 20
Release/(charge) to profit or loss [Note 9(c)] (100) (49) (100) (49)
At 31 March (211) (111) (211) (111)

Note:
8. These balances are considered to have low credit risk, due to low assessed probability of defaults. Accordingly, no impairment has been done for these balances

118 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

20. Inventory
Group Company
TZS m 2023 2022 2023 2022
Goods held for resale 3 075 2 597 3 075 2 597
3 075 2 597 3 075 2 597
The inventory is stated net of the following provision for valuation allowance:

Group Company
TZS m 2022 2021 2022 2021
At 1 April (1 656) (4 211) (1 656) (4 211)
(Increase)/decrease in provision (Note 7) (1 222) 2 555 (1 222) 2 555
At 31 March (2 878) (1 656) (2 878) (1 656)
The cost of inventories recognised as an expense(direct expenses) during the year ended 31 March 2023 was TZS28 572 million
(2022: TZS22 623 million). This relates to the release in provision during the year following the sale of stock items procured in prior years.

21. Mobile financial deposits and payables

Group
TZS m 2023 2022
Mobile financial deposits 509 358 436 086
Mobile financial payables (509 358) (436 086)
The M-Pesa service allows users to deposit money into an account stored to their cellphone number, to send balances using PIN-secured
SMS text messages to other users, including sellers of goods and services, and to redeem deposits for regular money.
Mobile financial deposits are the deposits made by all customers in exchange for electronic mobile money and the unrestricted interest
earned on the funds, which will be utilised upon approval if required. This cash is held in restricted accounts with reputable financial
institutions, and measured at amortised cost.
Upon recognition of the Mobile financial deposits, the Group recognises a corresponding current liability, owed to the Mobile financial
customers for the deposits made.
Mobile financial payables due to customers are primarily composed of saving deposits and amounts payable on demand. Deposits due to
customers only include financial instruments classified as liabilities at amortised cost. The carrying amount of the deposits and payables
approximates fair value due to their short term nature.

22. Cash and cash equivalents

Group Company
TZS m 2023 2022 2023 2022
Cash at bank and on hand 236 503 256 914 179 989 59 047
M-Pesa balances 87 47 87 47
Bank and cash balances presented in the statement
of financial position 236 590 256 961 180 076 59 094
Cash and cash equivalents presented in the
statement of cash flows 236 590 256 961 180 076 59 094
The fair value of cash and cash equivalents approximates the carrying amount due to the short-term maturity.

119
Notes to the financial statements continued

23. Share capital and premium

The Group is controlled by its parent Vodacom Group Limited, which, as at 31 March 2023, owned 75% of the Company’s issued shares with
the remaining 25% of the issued shares held by the public. In March 2022, the ownership composition was the same.

Group Company
TZS m 2023 2022 2023 2022
Authorised ordinary shares – number 4 000 000 000 4 000 000 000 4 000 000 000 4 000 000 000
Par value (TZS) 50 50 50 50
Authorised capital (TZS m) 200 000 200 000 200 000 200 000
Issued shares – number 2 240 000 300 2 240 000 300 2 240 000 300 2 240 000 300
Issued share capital (TZS m) 112 000 112 000 112 000 112 000
Share premium
25% shares issued in IPO – number 560 000 075 560 000 075 560 000 075 560 000 075
Share premium per share (TZS) 800 800 800 800
Share premium proceeds (TZS m) 448 000 448 000 448 000 448 000
IPO cost (TZS m)9 (5 565) (5 565) (5 565) (5 565)
Share premium (TZS m) 442 435 442 435 442 435 442 435

24. Capital contribution

Group Company
TZS m 2023 2022 2023 2022
At 1 April 27 698 27 698 27 698 27 698
At 31 March 27 698 27 698 27 698 27 698
The capital contribution entitles the shareholders to additional returns on their investment in the form of future dividends. It will be realised
by the shareholders once their equity investment in the Company is disposed of.

Note:
9. Costs which were deductible from the equity raised through the IPO and included: authorised collecting agency fees, lead receiving bank fees, lead advisor’s and sponsoring broker’s
fees, central securities depository fees, printing, and various other fees.

120 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

25. Lease liabilities

The Group has the following lease arrangements:
• Leases of office furniture and fittings with Paloma Park Limited. This lease arrangement bears interest at a fixed rate of 2.62% per annum
over the lease term of 8 years. The lease payments are made on a monthly basis.
• 3 449 lease contracts for telecommunication towers with various vendors (2022: 3 351). These leases generally have terms of 5 to 12 years.
• 32 lease contracts for properties (2022: 35) and 32 lease contracts for motor vehicles (2022: 21) that have lease terms of 2 to 8 years.
Set out below are the carrying amounts of lease liabilities and the movements during the year:

Group Company
TZS m 2023 2022 2023 2022
At 1 April 506 516 534 679 506 516 534 679
Additions for the year 32 993 41 077 32 993 41 077
Accretion of interest (Note 11) 57 098 60 872 57 098 60 872
Translation differences (Note 12) 1 971 (24) 1 971 (24)
De-recognised lease liabilities – (34) – (34)
Payments – principal (48 140) (69 183) (48 140) (69 183)
Payments – interest (57 098) (60 871) (57 098) (60 871)
At 31 March 493 340 506 516 493 340 506 516

The carrying amount is due as follows:

Non-current 394 137 446 044 394 137 446 044
Current 99 203 60 472 99 203 60 472
493 340 506 516 493 340 506 516

The following are the amounts recognised in profit or loss in respect to lease liabilities under IFRS 16:

Group Company
TZS m 2023 2022 2023 2022
Depreciation of right of use assets (Note 15) 85 379 86 797 85 379 86 797
Interest expense on lease liabilities 57 098 60 872 57 098 60 872
Expense relating to short-term leases 448 448 448 448
Expenses relating to low-value assets 71 71 71 71
142 996 148 188 142 996 148 188
Expenses relating to short-term leases are staff benefit costs included under payroll cost and low-value items relate to office equipment
and are included in the Other Operating expenses.

121
Notes to the financial statements continued

25. Lease liabilities continued

The Group had the following cash outflows relating to lease liabilities:

Group Company
TZS m 2023 2022 2023 2022
Payments relating to the recognised lease liabilities 105 238 130 054 105 238 130 054
Payments for short-term leases 448 448 448 448
Payments for low-value assets 71 71 71 71
105 757 130 573 105 757 130 573
The Group also had non-cash additions to right-of-use assets and lease liabilities of TZS32 993 million during the year
(2022: TZS41 077 million).
The Group has no future cash outflows relating to leases that have not yet commenced.
The maturity analysis of the minimum lease payments is presented under Note 36.3, liquidity risk management.
The Group has lease contracts that include extension and termination options. These mainly comprise of telecommunication site lease
contracts which are evaluated as having a lease term of 12 years, being the period during which the Group is reasonably certain that the
lease contracts will not be terminated. However, the lease contracts are automatically renewable for periods of 5 years up to a maximum of
4 terms, that is, option to renew for 20 years beyond the 12-year lease term considered in determining the lease liability.
The extension and termination options are negotiated by the Group to provide flexibility in managing the leased-asset portfolio and align
with the Group’s business needs. These options are used to limit the period to which the Group is committed to individual lease contracts
and to maximise operational flexibility in terms of using the leased assets. The Group’s management and directors exercise significant
judgement in determining whether these extension and termination options are reasonably certain to be exercised (see Note 5). The
Group’s directors and management have assessed that the undiscounted potential future rental payments relating to periods following
the exercise date of extension and termination options that are not included in the lease terms used in determining the lease liabilities
recognised cannot be reasonably estimated without undue cost and effort as they are subject to significant uncertainty over future
telecommunication network planning in the longer term. The significant uncertainty arises from factors such as technological change,
business strategy, mergers and acquisitions in the sector, competitive actions and regulatory environment which could affect the number
of sites required and the site leasing market rates. Moreover, the lease agreements provide for adjusting, every 5 years during the extension
period, the monthly lease payments in respect of each leased telecommunication site to the lower of the average rate and applicable
market rate at the date of adjustment.

26. Government grants

This relates to grants received from Universal Communication Service Access Fund (UCSAF) for the construction of network infrastructure
with a view to provision network telecommunication services in under-served areas of the country. The UCSAF identifies locations which
need network coverage and float tenders for the Mobile Network Operators (MNOs) to apply. The MNO which wins the tender is awarded
the grant to build the network infrastructure in the specified locations. The MNO is required to provide telecommunication network services
in the locations for a minimum period of five years from the commencement of the service provisioning.
The following are the unamortized amounts:

Group Company
TZS m 2023 2022 2023 2022
At 1 April 1 361 1 618 1 361 1 618
Received during the year 4 143 4 991 4 143 4 991
Amortised during the year (Note 9a) (345) (1 716) (345) (1 716)
Amounts matched with cost of funded assets (4 626) (3 532) (4 626) (3 532)
At 31 March 533 1 361 533 1 361

Non-current 20 143 20 143

Current 513 1 218 513 1 218
533 1 361 533 1 361
The Group accounts for the grants received as cash flows from investing activities since the cash flows are compensating and reimbursing
the Group for investing in the telecommunication sites.

122 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

27. Trade and other payables

Group Company
TZS m 2023 2022 2023 2022
Non-current
Deferred income – 378 – 378
– 378 – 378

Group Company
TZS m 2023 2022 2023 2022
Current
Trade payables 25 683 21 192 25 692 21 156
Capital expenditure creditors 66 040 64 541 66 040 64 541
Sales Tax payables 5 973 19 075 5 973 10 832
Accruals 139 372 128 630 129 388 121 697
Deferred revenue 23 502 22 904 23 502 22 834
Other payables 27 637 28 367 9 033 7 309
Payables to related parties (Note 35) 12 819 15 297 7 804 11 943
Total trade and other payables 301 026 300 006 267 432 260 312
Mobile financial payables 509 358 436 086 – –
Current trade and related payables are stated at cost which normally approximates fair value due to short-term maturity.

28. Provisions
The Group is currently involved in various legal proceedings and has, in consultation with its legal counsel, assessed the outcome of these
proceedings to have the total probable exposure. Further, the Group provides for other expenses including asset retirement obligations,
restructuring and others. Other provisions significantly relate to provision for marketing expenses. Movement in these provisions is
explained in the table below:
Group Company
TZS m 2023 2022 2023 2022
Opening balance 16 958 24 558 16 958 24 558
Site restoration obligation 5 199 4 159 5 199 4 159
Legal/regulatory 1 607 2 353 1 607 2 353
Restructuring – 2 582 – 2 582
Other 10 152 15 464 10 152 15 464
Additions/charge to profit or loss
Site restoration obligation – addition 304 713 304 713
Site restoration obligation – charge to profit or loss 566 327 566 327
Legal/regulatory 2 512 630 2 298 630
Restructuring – – – –
Others – charge to profit or loss 1 443 3 209 – 3 209
4 825 4 879 3 168 4 879
Released to profit or loss
Legal/regulatory (3 089) (1 251) (3 089) (1 251)
Restructuring – (312) – (312)
Marketing fees (4 987) – (4 987) –
(8 076) (1 563) (8 076) (1 563)
Utilised against payments during the year
Legal/regulatory (15) (125) (15) (125)
Restructuring – (2 270) – (2 270)
Other – (2 354) – (2 354)
(15) (4 749) (15) (4 749)
Transfers to accruals
Others – (6 167) – (6 167)
– (6 167) – (6 167)
At 31 March 13 692 16 958 12 035 16 958
Site restoration obligation 6 069 5 199 6 069 5 199
Legal/regulatory 1 015 1 607 801 1 607
Restructuring – – – –
Other 6 608 10 152 5 165 10 152
Closing balance 13 692 16 958 12 035 16 958

123
Notes to the financial statements continued

28. Provisions continued

Group Company
TZS m 2023 2022 2023 2022
Comprising of:
Non-current
Site restoration obligation 6 068 5 199 6 068 5 199
Current
Legal obligation 1 014 1 606 801 1 606
Marketing fees – 4 987 – 4 987
Restructuring costs – – – –
Tax assessments and disputes 6 610 5 166 5 166 5 166
7 624 11 759 5 967 11 759
Total provisions 13 692 16 958 12 035 16 958
According to the nature of the provisions, the timing of settlement is uncertain.

29. Licence payables

On 15 August 2022, the TCRA published a public notice inviting bids for licensing spectrum blocks intended for international mobile
telecommunication services through auction, which was held on 11 October 2022.
The following spectrum frequencies were auctioned and assigned: one block of 2 x 10 MHz in the 700 MHz band; two blocks of 1 x 35 MHz
in the 2300 MHz band; three blocks of 2 x 15 MHz in the 2600MHz band and one block of 1 x 20 MHz in the 2600 MHz band (TDD), and four
blocks of 1 x 40 MHz in the 3500 MHz band (TDD). We participated and secured winning bids for the one block of 700MHz, the two blocks
of 2300MHz and the one block of 2600MHz (TDD) for a total bid price of US$63.2 million, equivalent to TZS143 140 million. The spectrum
acquired is a critical strategic resource for delivering value to shareholders and fulfilling our purpose through our network expansion and
widened product portfolio objectives.
The spectrum allocation is payable in installments; 50% on spectrum assignment, 25% in April 2023, and 25% in October 2023. The
deferred payment has been discounted to it’s present value as it contains a significant financing component.
The total cost of the licence was capitalised under Intangible assets and a licence payable recognised in respect of deferred payment
obligations. The capital amount recorded was discounted to reflect a present value of the asset and the interest expense will be recognised
over the credit period. The interest expense is the difference between the cash price equivalent and the total installment payments for the
transaction.
Set out below are the carrying amounts of licence payables and the movements during the year:

Group Company
TZS m 2023 2022 2023 2022
At 1 April – – – –
Additions for the year 69 565 – 69 565 –
Interest expense 2 222 – 2 222 –
Translation differences 381 – 381 –
At 31 March 72 168 – 72 168 –

30. Borrowings
The Company had no borrowing at the end of the year (2022: Nil).

Bank overdrafts
The Group has an unsecured bank overdraft facility with Citibank Tanzania Limited of US$ 14.5million (2022: US$14.5 million) which
attracts interest at SOFR+4.25%. During the year the Group utilised the overdraft facility of US$ 8.5 million (2022: Nil). In addition, the Group
has a standby letter of credit and guarantee facility of US$2 million and a pre-settlement exposure facility for spot and forward foreign
exchange transactions of US$3.3 million (2022: Nil).

124 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

31. Interest in other entities (subsidiaries and other entities) – Company

The Company has interests in the following entities:

M-Pesa Limited
The Company owns 99.90% of M-Pesa Limited. M-Pesa Limited numbers are consolidated to form Group’s financial statements.
Following the receipt of the EMI licence, the Company’s principal activities are operating mobile financial services under the EMI regulations
issued by BoT. The Company’s activities are regulated under the National Payment Systems Act, 2015 and the related Payment Systems
(Electronic Money) Regulations, 2015
In 2021, M-Pesa Limited shareholders paid up the issued share capital of TZS500 million in line with the capital requirements stipulated in
the National Payments Systems Regulations.
Below is an extract from the separate financial statements of M-Pesa Limited:

TZS m 2023 2022

Statement of financial position
Total assets 89 932 218 768
Net assets 39 421 175 128
Statement of profit or loss and other comprehensive income
Total income 364 502 336 505
Total expenses (343 044) (259 478)

The Registered Trustees of M-Pesa Trust Funds

The principal activity of the Trust is to hold and manage, in trust, funds in the Trust bank accounts for the benefit of the subscribers of the
‘M-Pesa’ mobile financial services. The numbers of the Trust are consolidated to form Group’s financial statements.
The Trust is a non-profit making entity that has a mandate to fulfil its objectives in the best interest of the beneficiaries of the funds in
the trust accounts in accordance with the requirements of the applicable laws and regulations of The United Republic of Tanzania and
principles of best practice.
Below is an extract from the separate financial statements of The Registered Trustees of M-Pesa Trust Funds:

TZS m 2023 2022

Statement of financial position
Total assets 518 678 451 922
Net assets – –
Statement of profit or loss and other comprehensive income
Total income 16 671 18 618
Total expenses (16 671) (18 618)

Vodacom Trust Limited

This entity is limited by guarantee with share capital. The principal activity of the entity was to act as bona fide trustee and/or any other like
officers in order to protect and safeguard all monies gained from and/or relating to M-Pesa cellular phone money transfer service for the
benefit of the users of the said service.
On 23 October 2018, the entity’s name was changed from M-Pesa Limited to Vodacom Trust Limited following approval and issuance of the
certificate of change of name by BRELA. The change of name was necessary to enable compliance with the National Payment System Act,
2015. The entity’s directors resolved to wind up the entity and the liquidator was appointed by the directors on 19 May 2020.
As at year end, the process to liquidate the entity had not been finalised.

125
Notes to the financial statements continued

31. Interest in other entities (subsidiaries and other entities) – Company continued
Vodacom Tanzania Foundation.
Following the amendment of the Companies Act, 2002 by Miscellaneous Amendment Act, No. 3 of 2019 which came into force on
30 June 2019, the authority to register entities which prohibit distribution of profits and which do not intend to promote commerce was
transferred from BRELA to the Registrar of Non-Government Organisations (‘NGOs’). Consequently, BRELA issued a public notice stating
that on 30 August 2019, the Registrar of Companies shall not maintain in the Registry records of any company which prohibits distribution
of profits and does not intend to promote commerce, and advised the companies affected to communicate with the Registrar of NGOs to
be provided with guidance and directives on registration of NGOs as per the Miscellaneous Amendment Act, No. 3 of 2019. The Foundation
was affected by this change in law as it was incorporated as a company limited by guarantee with no profit objective. Consequently, the
Foundation was struck off the Registry of Companies on 30 August 2019. Another entity, Vodacom Tanzania Foundation, was registered
with the Registrar of NGOs under the "then" Ministry of Health, Community Development, Gender, Elderly and Children in accordance with
the Non-Governmental Organisations Act of 2002 (revised 2005) and the Non-Governmental Organisations (Amendments) Regulations of
2018 (together, the “NGO Act and Regulations”) of Tanzania.
The founding members resolved to wind up the foundation and appointed a liquidator to oversee the process. The dissolution of the entity
was completed on 19 January 2023.

Shared Networks Tanzania Limited (‘sNT’)

On 19 July 2016, the Company acquired 100% of SNT’s issued share capital. The entity’s financial information are consolidated and form
part of Group’s financial statements. SNT was a multi-operator core network wholesaler which held a license for usage of spectrum in the
900MHz band in rural Tanzania. During the financial year 2019, the Group obtained approval from Tanzania Communications Regulatory
Authority (‘TCRA’) to reassign the spectrum that was held by SNT to the Company.
During the year ended 31 March 2021, the directors resolved to wind up the entity after transferring its assets and liabilities to the
Company. The net assets transfer was completed and a liquidator was appointed thereon.
As at year end, the process to liquidated the entity has not been finalized.
Below is an extract from the SNT financial statements:

TZS m 2023 2022

Statement of financial position
Total assets 2 462 2 462
Net liabilities (24 306) (24 306)
Statement of profit or loss and other comprehensive income
Revenue – –
Total expenses – –

32. Commitments
Group Company
TZS m 2023 2022 2023 2022
Lease commitments (Note 36.3) 659 242 693 982 659 242 693 982
Capital expenditure contracted for but not yet incurred (including
property and equipment and intangible assets) 30 046 35 580 30 046 35 580
Other (including sports and marketing commitments) 58 883 87 649 58 883 87 649
748 171 817 211 748 171 817 211

126 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

33. Contingent liabilities

Tax matters
The Group’s future tax charge, effective tax rate and profit before tax could be affected by several factors including tax reforms conducted in
Tanzania and the resolution of open tax disputes with the Tanzania Revenue Authority (“TRA” or the “tax authority”) and/or tax courts. The
Group is committed to acting with integrity and transparency in all tax matters including a policy of full transparency to the tax authority
and the payment of all taxes properly due under the relevant tax laws in Tanzania. The Group is regularly subject to audits and examination
by the tax authority of its direct and indirect tax filings. The consequence of such reviews is that in some instances, disputes can arise with
the tax authority over the interpretation or application of certain tax rules where these tax laws are ambiguous and subject to a broad range
of interpretations. To address and manage this tax uncertainty, good governance is fundamental to the Group’s business sustainability.
The major tax positions taken are thus subject to review by executive management and reported to the Board. The Group has support from
external advisors supporting the positions taken in respect of the significant tax matters which support the application and interpretation of
the tax legislation. The Group has considered all matters in dispute with the tax authority and has accounted for any exposure identified if
required.
During the year, the Group has managed to resolve long outstanding tax disputes which were disclosed as contingent items in relation to
the following issues.

Capital allowances of telecommunication equipment

Through the practice notice issued in December 2022, the tax authority (TRA) clarified the proper classification of telecommunication
equipment with the active equipment classified under class 1 and passive equipment being classified under class 6. This clarification aided
in the resolution of long-standing disagreements on the subject. The previously reported dispute on this matter has been resolved.

Withholding tax on satellite, international roaming and undersea cable services

During the year, the Group managed to resolve all the pending disputes in relation to the chargeability of withholding tax on payments in
relation to the roaming and foreign services received. The previously reported dispute on this matter has been resolved.
However, the Group shall maintain part of the Transfer pricing exposure as a contingent matter as detailed below:

Transfer pricing
The Group, as part of a multinational enterprise, makes extensive use of services provided by associated entities in a value adding manner
and applies the arm’s length principle, in the taxation context, in such undertakings. These intercompany transactions are documented in
the Group’s transfer pricing documentation which is done in accordance with the requirements of local Transfer Pricing Regulations and
Organization for Economic Cooperation and Development (“OECD”) guidelines.
The TRA conducted a transfer pricing audit for the 2018 to 2020 tax years for Vodacom Tanzania Public Limited Company and 2021 for
M-Pesa Limited, the audit has resulted in certain disputed items in terms of the methodology and other Transfer Pricing aspects used to
support the taxation arm’s length principle.

Litigation and other claims contingencies

The Group is currently involved in various legal proceedings and has, in consultation with its legal counsel, assessed the possible/probable
outcome of these proceedings. Following this assessment, the Group’s management has determined that adequate provision has been
made in respect of these legal proceedings as at year end.
The Group is subject to claims under contracts signed with other parties. Disputes can arise with other parties over the interpretation or
application of contractual provisions. These disputes may not necessarily be resolved in a manner that is favourable to the Group, and the
resolution of the disputes could result in an obligation to the Group. Management has assessed that no provision for claims is warranted as
at year end.
Refer to Note 28 for further disclosures.

127
Notes to the financial statements continued

34. Other matters

Regulatory matters
SIM Card Registration
On 7 February 2020, new SIM Regulations were published, mandating biometric registration only and restricting the number of SIMs
held per customer. Subsequently, on 1 July 2020, the Tanzania Communication Regulatory Authority (‘TCRA’) issued a public release that
required customers who biometrically registered more than one SIM card per service provider to verify their SIM cards ownership through
their mobile phones. Furthermore, the TCRA and mobile network operators implemented an approval process that allowed customers to
request for additional SIM cards by visiting service providers’ retail outlets or an automated process through Unstructured Supplementary
Service Data (USSD). Customers are allowed to have more than one SIM card if they follow the correct approval process.
On 13 February 2023, Vodacom Tanzania barred 238 000 SIM cards which did not complete the multiple-SIM declaration process as
per TCRA’s directives. Subsequent to barring, TCRA again permitted the usage of *106# and 100 to allow the barred customers to do
verification through this process. As a result, over 30 000 of the barred customers have successfully verified their SIM cards and
re-activated. We continue with efforts to recover barred customers.

Other matters
Levies on mobile money transfers and withdrawals and airtime
On 30 June 2021, the President approved the Finance Act, which included the amendments to the National Payment System Act (NPS Act)
and Electronic & Postal and Communication Act (EPOCA) – introducing levies on mobile money transfer transactions and airtime recharges.
For mobile money transfer and withdrawal transactions, a transaction value dependent levy of between TZS10 and TZS10 000 was
implemented from 15 July 2021. Following our engagements and due consideration by the government, the following amendments were
implemented:
• 3 September 2021:
An initial 30% levy reduction, to a maximum levy of TZS7 000.
• 1 July 2022:
An additional 43% reduction to the maximum levy band was passed through the Finance Act 2022, marking a cumulative 60% reduction
since the levy’s introduction. This reduction set the maximum levy chargeable at TZS4 000. The Finance Act also re‑defined the scope of
the levy, to also include withdrawal and transfers through banks which were earlier excluded. The levy, which was previously chargeable
on mobile transactions only, also became applicable to transfers between mobile accounts, between bank accounts and across mobile
and bank accounts. For withdrawals, the levy was extended to capture withdrawals from automated teller machines (ATM).
• 1 October 2022:
Through a special supplement to the National Payment System (Electronic Money Transactions levy) (Amendment Regulations) the
maximum levy chargeable was set at TZS2 000, equivalent to 20% of the levy charged at introduction. This decision further reduced
end-user charges, and has meaningfully revived and accelerated our contribution to the financial inclusion agenda, through the use
of M-Pesa services.

Spectrum auction
On 15 August 2022, the TCRA published a public notice inviting bids for licensing spectrum blocks intended for international mobile
telecommunication services through auction, which was held on 11 October 2022.
The following spectrum frequencies were auctioned and assigned: one block of 2 x 10 MHz in the 700 MHz band; two blocks of 1 x 35 MHz
in the 2300 MHz band; three blocks of 2 x 15 MHz in the 2600MHz band and one block of 1 x 20 MHz in the 2600 MHz band (TDD), and four
blocks of 1 x 40 MHz in the 3500 MHz band (TDD). We participated and secured winning bids for the one block of 700MHz, the two blocks
of 2300MHz and the one block of 2600MHz (TDD) for a total bid price of US$63.2 million, equivalent to TZS143 140 million.
The spectrum acquired is a critical strategic resource for delivering value to shareholders and fulfilling our purpose through our network
expansion and widened product portfolio objectives.
The spectrum allocation is payable in instalments; 50% on spectrum assignment, 25% in April 2023, and 25% in October 2023. The
deferred payment has been discounted to it’s present value as it contains a significant financing component.
The total cost of the licence was capitalised under Intangible assets and a licence payable recognised in respect of deferred payment
obligations. The capital amount recorded was discounted to reflect a present value of the asset and the interest expense will be recognised
over the credit period. The interest expense is the difference between the cash price equivalent and the total instalment payments for the
transaction.

Deferred tax recognition

During the year, the Company made a decision to recognize deferred tax assets to the extent of what could be utilized by the profit
forecasted within the next five years. The company recognized a total of TZS50 871 million, made up of deferred tax asset on unused
tax losses amounting TZS10 954 million, and other deductible timing differences TZS39 917 million.

128 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

35. Related parties

The Group’s related parties are its ultimate parent, immediate parent, shareholders with significant influence, subsidiaries, other related
companies including sister companies and key management personnel including directors.

Group Company
TZS m 2023 2022 2023 2022
Balances with related parties
Trade and other receivables
Vodafone Group Plc (Ultimate parent) 2 148 5 249 2 148 5 249
Vodacom Group Limited (Immediate parent) 2 185 2 068 2 185 2 068
M-Pesa Limited – – 21 623 7 787
Registered Trustees of M-Pesa – – 1 407 1 061
4 333 7 317 27 363 16 165

Trade payables
Vodafone Group Plc (Ultimate parent) (5 316) (5 616) (5 316) (5 616)
Vodacom Group Limited (Immediate parent) (2 561) (8 330) (2 329) (6 198)
M-Pesa Limited – – (159) (129)
M-Pesa Africa (4 942) (1 351) – –
(12 819) (15 297) (7 804) (11 943)
The amounts due from/(to) related parties are interest free. All the balances due from/(to) related parties are due on demand and are
unsecured.

Transactions with related parties

Group Company
TZS m 2023 2022 2023 2022
Vodafone Group Plc and its subsidiaries
Revenue 6 832 5 221 6 832 5 221
Direct costs (1 216) (1 234) (1 216) (1 234)
Other operating expenses (2 775) (4 541) (2 775) (4 541)
2 841 (554) 2 841 (554)
Vodacom Group Limited subsidiaries – Mozambique, DRC,
Mauritius and Lesotho
Revenue 15 568 15 568
Direct costs (107) (189) (107) (189)
Other operating expenses (512) (2 239) (512) (2 239)
(604) (1 860) (604) (1 860)
Vodacom Group Limited – South Africa
Revenue 4 969 4 924 4 969 4 924
Direct costs (2 150) (2 108) (2 150) (2 108)
Other operating expenses (13 224) (13 112) (10 322) (11 060)
(10 405) (10 296) (7 503) (8 244)
Key management compensation
Short-term employee benefits (6 552) (8 958) (6 552) (8 185)
Share based compensation10 (150) (437) (150) (437)
Long-term employee benefits (1 788) (654) (1 788) (603)
(8 490) (10 049) (8 490) (9 225)
Non-executive directors
Non-executive directors’ fees (1 212) (1 193) (1 103) (1 088)
(1 212) (1 193) (1 103) (1 088)
Executive directors
Short-term employee benefits (2 733) (5 156) (2 733) (5 156)
Long-term employee benefits (252) (753) (252) (753)
(2 985) (5 909) (2 985) (5 909)

Note:
10. In prior year, this balance was disclosed in short term employee benefits. The overall split does not have an impact on prior year financial statements.

129
Notes to the financial statements continued

36. Risk management policies and objectives

36.1 Financial instruments carrying amounts
The Group and Company hold the following financial instruments measured at amortised cost:

Group Company
TZS m 2023 2022 2023 2022
Financial assets
Trade receivables 56 816 55 526 51 014 52 639
Other receivables 9 601 3 298 8 342 1 760
Cash and bank balances (Note 22) 236 503 256 914 179 989 59 047
M-Pesa balances (Note 22) 87 47 87 47
Mobile financial deposits 509 358 436 086 – –
Intergroup receivables 4 333 7 317 27 363 15 104
TOTAL 816 698 759 188 266 795 128 597

Financial liabilities
Trade payables (25 683) (21 192) (25 692) (21 156)
Accruals (139 372) (128 630) (129 388) (121 697)
Lease Liabilities (493 340) (506 516) (493 340) (506 516)
Intergroup payables (Note 35) (12 819) (15 297) (7 804) (11 943)
Capital expenditures creditors (66 040) (64 541) (66 040) (64 541)
Licences payables (72 168) – (72 168) –
Asset restoration Obligation payables (6 068) (5 199) (6 068) (5 199)
Other payables (13 393) (9 889) (2 391) (2 484)
Mobile financial payables (509 358) (436 086) – –
TOTAL (1 338 241) (1 182 151) (802 891) (733 536)
The Group did not have financial instruments measured at fair value.
During the year, disaggregation was done to other receivables and other payables to improve the disclosure. The overall change did not
have an impact on prior year reported numbers in the statement of financial position. Both current year and prior year numbers include
only financial instruments.

130 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

At the reporting date, the interest rate profile of the Group’s and Company’s financial assets and liabilities was as follows:

Fixed interest Non-interest

rate Variable interest bearing Total
Group 2023 TZS m rate TZS m TZS m TZS m
Financial assets
Trade receivables – – 56 816 56 816
Other receivables – – 9 601 9 601
Cash and bank balances – – 236 503 236 503
M-Pesa balances – – 87 87
Mobile financial deposits 509 358 – – 509 358
Intergroup receivables – – 4 333 4 333
509 358 – 307 340 816 698
Financial liabilities
Trade payables – – (25 683) (25 683)
Lease liabilities (493 340) – – (493 340)
Other payables – – (13 393) (13 393)
Accruals – – (139 372) (139 372)
Licences payables (72 168) – – (72 168)
Asset restoration Obligation payables (6 068) – – (6 068)
Capital expenditure creditors – – (66 040) (66 040)
Intergroup payables – – (12 819) (12 819)
Mobile financial payables (509 358) – – (509 358)
(1 080 934) – (257 307) (1 338 241)

Fixed interest Non-interest

rate Variable interest bearing Total
Group 2022 TZS m rate TZS m TZS m TZS m
Financial assets
Trade receivables – – 55 526 55 526
Other receivables – – 3 298 3 298
Cash and bank balances 41 180 – 215 734 256 914
M-Pesa balances – – 47 47
Mobile financial deposits 436 086 – – 436 086
Intergroup receivables – – 7 317 7 317
477 266 – 281 922 759 188
Financial liabilities
Trade payables – – (21 192) (21 192)
Lease liabilities (506 516) – – (506 516)
Other payables – – (9 889) (9 889)
Accruals – – (128 630) (128 630)
Capital expenditure creditors – – (64 541) (64 541)
Asset restoration Obligation payables (5 199) – – (5 199)
Intergroup payables – – (15 297) (15 297)
Mobile financial payables (436 086) – – (436 086)
(947 801) – (239 549) (1 187 350)
Mobile financial payables include interest due to agents and customers. In prior year, interest balance was disclosed as interest due to
customers.

131
Notes to the financial statements continued

36. Risk management policies and objectives continued

36.2 Interest rate profile
Company
Fixed interest Non-interest
rate Variable interest bearing Total
2023 TZS m rate TZS m TZS m TZS m
Financial assets
Trade receivables – – 51 014 51 014
Other receivables – – 8 342 8 342
Cash and bank balances – – 179 989 179 989
M-Pesa balances – – 87 87
Intergroup receivables – – 27 363 27 363
TOTAL – – 266 795 266 795
Financial Liabilities
Trade payables – – (25 692) (25 692)
Lease liabilities (493 340) – – (493 340)
Other payables – – (2 391) (2 391)
Licences payables (72 168) – – (72 168)
Asset restoration Obligation payables (6 068) – – (6 068)
Accruals – – (129 388) (129 388)
Capital expenditure creditors – – (66 040) (66 040)
Intergroup payables – – (7 804) (7 804)
TOTAL (571 576) – (231 315) (802 891)

Fixed interest Non-interest

rate Variable interest bearing Total
2022 TZS m rate TZS m TZS m TZS m
Financial assets
Trade receivables – – 52 639 52 639
Other receivables – – 1 760 1 760
Cash and bank balances 41 180 – 17 867 59 047
M-Pesa balances – – 47 47
Intergroup receivables – – 16 165 16 165
TOTAL 41 180 – 88 478 129 658
Financial Liabilities
Trade payables – – (21 156) (21 156)
Lease liabilities (506 516) – – (506 516)
Other payables – – (2 484) (2 484)
Accruals – – (121 697) (121 697)
Capital expenditure creditors – – (64 541) (64 541)
Asset restoration Obligation payables (5 199) – – (5 199)
Intergroup payables – – (11 943) (11 943)
TOTAL (511 715) – (221 821) (733 536)

132 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

36.3 Financial risk management

Market risk
The Group’s normal operations, its sources of finance and changing market conditions expose it to various financial risks which highlight
the importance of financial risk management. The principal financial risks faced by the Group are foreign currency, interest rate, credit and
liquidity risks.
A treasury division of Vodacom Group Limited provides the Group with support to access both domestic and international financial
markets and manage foreign currency, interest rate and liquidity risks. Treasury operations are conducted within a framework of policies
and guidelines authorised and reviewed by the Vodacom Group Limited board. There has been no significant change during the reporting
period, or since the end of the reporting period, to the types of financial risks faced by the Group, the measures used to gauge these risks
or the objectives, policies and processes for managing the risks.
The Group’s activities expose it to the risks of fluctuations in foreign currency exchange rates and interest rates. Market risk exposures are
measured using sensitivity analyses which show how profit and retained earnings for the year would have been affected by a small adverse
change in the relevant risk variable that were reasonably possible at the reporting date. Sensitivity analyses are for illustrative purposes only
as, in practice, market rates rarely change in isolation.
There were no changes in the methods and assumptions used in preparing sensitivity analysis as at year-end.

Foreign currency risk

Various monetary items exist in currencies other than the Group’s functional currency. The table below discloses the net currency exposure
(net carrying amount of foreign-denominated monetary assets/(liabilities) of the Group. The Group is mainly exposed to the United States
dollar (‘US$’) and to a lesser extent to the Euro (‘€’) and South African rand (‘R’).

133
Notes to the financial statements continued

36. Risk management policies and objectives continued

36.3 Financial risk management continued
31 March 2023
Group
TZS m US$ € R
Financial assets
Trade and other receivables 4 802 920 –
Cash and cash equivalents 17 091 256 338
21 893 1 176 338
Financial liabilities
Trade and other payables (77 535) (37 107) (1 134)
Net Gap (55 642) (35 931) (796)

31 March 2022
US$ € R
Financial assets
Trade and other receivables 5 700 935 –
Cash and cash equivalents 23 163 1 370 1 149
28 863 2 305 1 149
Financial liabilities
Trade and other payables (8 190) (29 492) (1 622)
Net Gap 20 673 (27 187) (473)

31 March 2023
Company
TZS m US$ € R
Financial assets
Trade and other receivables 4 802 920 –
Cash and cash equivalents 17 091 256 338
21 893 1 176 338
Financial liabilities
Trade and other payables (77 535) (37 107) (1 134)
Net Gap (55 642) (35 931) (796)

31 March 2022
US$ € R
Financial assets
Trade and other receivables 5 700 935 –
Cash and cash equivalents 23 163 1 370 1 149
28 863 2 305 1 149
Financial liabilities
Trade and other payables (8 190) (29 492) (1 622)
Net Gap 20 673 (27 187) (473)

134 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

The analysis below discloses the Group’s sensitivity to the specified percentage change in its functional currency, TZS, against the foreign
currencies which it is exposed to. The management’s assessment of a reasonable possible change in foreign currency exchange rates is
based on estimated foreign exchange rate differentials. This analysis includes outstanding foreign-denominated monetary items only and
adjusts their translations at the reporting date with the specified percentage change.

Group
TZS m US$ € R
2023
% change 5 4 1
(Loss)/profit after tax and equity – (TZS m) (544) 913 3

2022
% change 3 9 4
(Loss)/profit after tax and equity – (TZS m) (468) 1 628 12
Company
TZS m US$ € R
2023
% change 5 4 1
(Loss)/profit after tax and equity – (TZS m) (544) 913 3

2022
% change 3 9 4
(Loss)/profit after tax and equity – (TZS m) (468) 1 628 12

Interest rate risk

The Group’s interest rate profile consists of lease liabilities, interest and deposits due to Vodacom Trust Limited (M-Pesa) customers and
agents, which exposes the Group to interest rate risk and may be summarised as follows:

Group Company
TZS m 2023 2022 2023 2022
Mobile financial deposits 509 358 436 086 – –
509 358 436 086 – –

Mobile financial payables (509 358) (436 086) – –

Licences payables (72 168) – (72 168)
Asset restoration Obligation payables (6 068) (5 199) (6 068) (5 199)
Lease liabilities (493 340) (506 516) (493 340) (506 516)
(1 080 934) (947 801) (571 576) (511 715)

Interest rate sensitivity analysis

As per the interest rate profile, the Group is not exposed to interest rate risk because it holds no financial instruments with variable
interest rates.

135
Notes to the financial statements continued

36. Risk management policies and objectives continued

36.3 Financial risk management continued
Credit risk
The carrying amounts of financial assets, are shown net of any impairment losses, and represent the Group’s maximum exposure to credit
risk. The Group’s policy is to deal with credit worthy counterparties only and to obtain sufficient collateral, where appropriate, to mitigate
the risk of financial loss from defaults. The Group uses publicly available financial information, the financial standing of counterparties
and the Group’s own trading records in order to determine the credit quality of a counterpart. Contractual arrangements are entered into
with other mobile network operators in line with any regulatory requirements and industry normal business practice. Credit exposure is
further controlled by defining credit limits per counterparty which are periodically reviewed and approved by the credit risk department.
The Group’s exposure and credit ratings are continuously monitored, and the aggregate value of transactions concluded is spread amongst
approved counterparties. In determining the recoverability of trade receivables, the Group considers changes in credit quality.
The Group’s largest customer represents 24.2% (2022: 16.1 %) of the total trade receivables balance. With the exception of the
aforementioned, the credit risk for trade and other receivables is generally limited due to the customer base being large and unrelated in
conjunction with stringent credit approval processes. The average credit period for trade receivables is 30 days (2022: 30 days). The Group
has not renegotiated the terms of any of its financial assets which resulted in them not being past due or impaired.
The credit risk associated with cash and cash equivalents and financial assets are limited as they are placed with high credit quality financial
institutions.
The following is the aging analysis of trade and other receivables (excluding prepayments, deposits and deferred costs) that are past due
including ECL allowances as at year end.
Group:
The following table provides information about the exposure to credit risk and ECL allowances for super dealers as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 100.00% 7 7 No
31 – 60 days 100.00% – – No
61 – 90 days 100.00% – – No
91 – 120 days 100.00% 49 49 Yes
121 – 180 days 100.00% 14 14 Yes
> 180 days 100.00% 30 385 30 385 Yes
Total 30 455 30 455
The following table provides information about the exposure to credit risk and ECLs for super dealers as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 100.00% 32 32 No
31 – 60 days 100.00% 45 45 No
61 – 90 days 100.00% – – No
91 – 120 days 100.00% – – Yes
121 – 180 days 100.00% – – Yes
> 180 days 100.00% 30 271 30 271 Yes
Total 30 348 30 348

136 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

The following table provides information about the exposure to credit risk and ECLs for prepaid airtime distributors as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 1.05% 1 613 17 No
31 – 60 days 7.49% 67 5 No
61 – 90 days 22.21% 21 5 No
91 – 120 days 44.18% – – Yes
121 – 180 days 70.39% – – Yes
> 180 days 100.00% 1 001 1 001 Yes
Total 2 702 1 028

The following table provides information about the exposure to credit risk and ECLs for prepaid airtime distributors as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 1.43% 3 077 44 No
31 – 60 days 6.22% – – No
61 – 90 days 15.67% 134 21 No
91 – 120 days 32.73% – – Yes
121 – 180 days 54.14% 157 85 Yes
> 180 days 100.00% 303 303 Yes
Total 3 671 453
The following table provides information about the exposure to credit risk and ECLs for postpaid customers as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 3.16% 11 189 354 No
31 – 60 days 17.39% 103 18 No
61 – 90 days 33.21% 720 239 No
91 – 120 days 64.74% 366 237 Yes
121 – 180 days 85.81% 350 300 Yes
> 180 days 98.47% 90 89 Yes
Total 12 818 1 237
The following table provides information about the exposure to credit risk and ECLs for postpaid customers as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 3.58% 9 652 346 No
31 – 60 days 20.45% 19 4 No
61 – 90 days 37.70% 849 320 No
91 – 120 days 70.64% 576 407 Yes
121 – 180 days 98.91% 245 242 Yes
> 180 days 100.00% 319 319 Yes
Total 11 660 1 638

137
Notes to the financial statements continued

36. Risk management policies and objectives continued

36.3 Financial risk management continued
Credit risk continued
The following table provides information about the exposure to credit risk and ECLs for interconnect customers as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 0.46% 397 2 No
31 – 60 days 5.63% – – No
61 – 90 days 10.75% – – No
91 – 120 days 19.88% – – Yes
121 – 180 days 60.22% 1 1 Yes
> 180 days 97.07% 2 2 Yes
Total 400 5
The following table provides information about the exposure to credit risk and ECLs for interconnect customers as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days – 1 200 – No
31 – 60 days 10.86% 223 24 No
61 – 90 days 23.24% – – No
91 – 120 days 36.72% – – Yes
121 – 180 days 61.65% – – Yes
> 180 days 70.72% 3 2 Yes
Total 1 426 26
The following table provides information about the exposure to credit risk and ECLs for advance credit customers as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 15.41% 3 461 533 No
31 – 60 days 100.00% 590 590 No
61 – 90 days 100.00% 460 460 No
91 – 120 days 100.00% 422 422 Yes
> 120 days 100.00% 1 870 1 870 Yes
Total 6 803 3 875
The following table provides information about the exposure to credit risk and ECLs for advance credit customers as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 13.73% 1 662 228 No
31 – 60 days 100.00% 410 410 No
61 – 90 days 100.00% 275 275 No
91 – 120 days 100.00% 228 228 Yes
> 120 days 100.00% 1 944 1 944 Yes
Total 4 519 3 085

138 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

The following table provides information about the exposure to credit risk and ECLs for other debtors as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 11.35% 298 34 No
31 – 60 days 29.82% 564 168 No
61 – 90 days 46.58% 219 102 No
91 – 120 days 69.61% – – Yes
121 – 180 days 92.23% – – Yes
> 180 days 100.00% 2 075 2 075 Yes
Total 3 156 2 379
The following table provides information about the exposure to credit risk and ECLs for other debtors as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 10.64% 1 589 169 No
31 – 60 days 30.08% 123 37 No
61 – 90 days 49.51% – – No
91 – 120 days 66.86% 1 1 Yes
121 – 180 days 82.74% 21 17 Yes
> 180 days 100.00% 2 502 2 502 Yes
Total 4 236 2 726
Company
The following table provides information about the exposure to credit risk and ECLs for super dealers as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 100.00% 7 7 No
31 – 60 days 100.00% – – No
61 – 90 days 100.00% – – No
91 – 120 days 100.00% 49 49 Yes
121 – 180 days 100.00% 14 14 Yes
> 180 days 100.00% 30 385 30 385 Yes
Total 30 455 30 455
The following table provides information about the exposure to credit risk and ECLs for super dealers as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 100.00% 32 32 No
31 – 60 days 100.00% 45 45 No
61 – 90 days 100.00% – – No
91 – 120 days 100.00% – – Yes
121 – 180 days 100.00% – – Yes
> 180 days 100.00% 30 271 30 271 Yes
Total 30 348 30 348

139
Notes to the financial statements continued

36. Risk management policies and objectives continued

36.3 Financial risk management continued
Credit risk continued
The following table provides information about the exposure to credit risk and ECLs for prepaid airtime distributors as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 1.05% 1 613 17 No
31 – 60 days 7.49% 67 5 No
61 – 90 days 22.21% 21 5 No
91 – 120 days 44.18% – – Yes
121 – 180 days 70.39% – – Yes
> 180 days 100.00% 1 001 1 001 Yes
Total 2 702 1 028
The following table provides information about the exposure to credit risk and ECLs for prepaid airtime distributors as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 1.43% 3 077 44 No
31 – 60 days 6.22% – – No
61 – 90 days 15.67% 134 21 No
91 – 120 days 32.73% – – Yes
121 – 180 days 54.14% 157 85 Yes
> 180 days 100.00% 303 303 Yes
Total 3 671 453
The following table provides information about the exposure to credit risk and ECLs for postpaid customers as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 3.16% 11 189 354 No
31 – 60 days 17.39% 103 18 No
61 – 90 days 33.21% 720 239 No
91 – 120 days 64.74% 366 237 Yes
121 – 180 days 85.81% 350 300 Yes
> 180 days 98.47% 90 89 Yes
Total 12 818 1 237
The following table provides information about the exposure to credit risk and ECLs for postpaid customers as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 3.58% 9 652 346 No
31 – 60 days 20.45% 19 4 No
61 – 90 days 37.70% 849 320 No
91 – 120 days 70.64% 576 407 Yes
121 – 180 days 98.91% 245 242 Yes
> 180 days 100.00% 319 319 Yes
Total 11 660 1 638

140 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

The following table provides information about the exposure to credit risk and ECLs for interconnect customers as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 0.46% 397 2 No
31 – 60 days 5.63% – – No
61 – 90 days 10.75% – – No
91 – 120 days 19.88% – – Yes
121 – 180 days 60.22% 1 1 Yes
> 180 days 97.07% 2 2 Yes
Total 400 5
The following table provides information about the exposure to credit risk and ECLs for interconnect customers as at 31 March 2022.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days – 1 200 – No
31 – 60 days 10.86% 223 24 No
61 – 90 days 23.24% – – No
91 – 120 days 36.72% – – Yes
121 – 180 days 61.65% – – Yes
> 180 days 70.72% 3 2 Yes
Total 1 426 26
The following table provides information about the exposure to credit risk and ECLs for advance credit customers as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 15.41% 3 461 533 No
31 – 60 days 100.00% 590 590 No
61 – 90 days 100.00% 460 460 No
91 – 120 days 100.00% 422 422 Yes
> 120 days 100.00% 1 870 1 870 Yes
Total 6 803 3 875
The following table provides information about the exposure to credit risk and ECLs for advance credit customers as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 13.73% 1 662 228 No
31 – 60 days 100.00% 410 410 No
61 – 90 days 100.00% 275 275 No
91 – 120 days 100.00% 228 228 Yes
> 120 days 100.00% 1 944 1 944 Yes
Total 4 519 3 085

141
Notes to the financial statements continued

36. Risk management policies and objectives continued

36.3 Financial risk management continued
Credit risk continued
The following table provides information about the exposure to credit risk and ECLs for other debtors as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 11.35% 298 34 No
31 – 60 days 29.82% 564 168 No
61 – 90 days 46.58% 219 102 No
91 – 120 days 69.61% – – Yes
121 – 180 days 92.23% – – Yes
> 180 days 100.00% 2 000 2 000 Yes
Total 3 081 2 304
The following table provides information about the exposure to credit risk and ECLs for other debtors as at 31 March 2023.

Weighted average Gross carrying Loss

loss rate amount allowance Credit
Age Bracket % TZS m TZS m impaired
1 – 30 days 10.64% 1 589 169 No
31 – 60 days 30.08% 123 37 No
61 – 90 days 49.51% – – No
91 – 120 days 66.86% 1 1 Yes
121 – 180 days 82.74% 21 17 Yes
> 180 days 100.00% 2 423 2 423 Yes
Total 4 157 2 647
The following table provides information about the exposure to credit risk and ECLs for contract assets as at 31 March 2023 for both Group
and Company.

Weighted average Gross carrying Loss

Split loss rate amount allowance
Current 3.63% 3 873 141
Non-current 3.63% 1 927 70
Total 5 800 211

The following table provides information about the exposure to credit risk and ECLs for contract assets as at 31 March 2023 for both Group
and Company.

Weighted average Gross carrying Loss

Split loss rate amount allowance
Current 3.42% 2 319 79
Non-current 3.42% 939 32
Total 3 258 111
The change in credit risk disclosure during the year is necessary in order to provide more information and disclosures.

142 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Liquidity management
The Group ensures that adequate funds are available to meet its expected and unexpected financial commitments through undrawn
borrowing facilities. At the end of the reporting date, the Group had US$14.5 million (TZS33 930 million) (2022: US$14.5 million
(TZS 33 640 million)) undrawn foreign-denominated borrowing facilities to manage its liquidity. The Group uses bank facilities under
the normal operating cycle to manage short-term liquidity. The Group raises funds in bank markets and ensures a reasonable balance
is maintained between the period over which the assets generate funds and the period over which the respective assets are funded to
manage long-term liquidity. Liquidity on long-term borrowings is managed by maintaining a varied maturity profile thereby minimising
refinancing risk.
The tables below disclose the maturity profile of the Group’s non-derivative financial liabilities and those financial assets used for managing
liquidity risk. The tables have been drawn up based on the earliest date on which the Group can be required to settle or can require
settlement. The amounts disclosed in the table are the contractual undiscounted cash flows at the year-end.

Group <1 2-5 5+

TZS m Year Years years Total
2023
Financial liabilities
Lease liabilities (133 708) (386 239) (139 295) (659 242)
Accruals (139 372) – – (139 372)
Intergroup payables (12 819) – – (12 819)
Capital expenditure creditors (66 040) – – (66 040)
Licences payables (73 710) – – (73 710)
Asset restoration Obligation payables (5 498) (2 707) (12 895) (21 100)
Mobile financial payables (509 358) – – (509 358)
Other payables (13 393) – – (13 393)
Trade payables (25 683) – – (25 683)
(979 581) (388 946) (152 190) (1 520 717)

Financial assets
Trade receivables 56 816 – – 56 816
Other receivables 9 601 – – 9 601
Cash and bank balances 236 503 – – 236 503
M-Pesa balances 87 – – 87
Mobile financial deposits 509 358 – – 509 358
Intergroup receivables 4 333 – – 4 333
816 698 – – 816 698

143
Notes to the financial statements continued

36. Risk management policies and objectives continued

36.3 Financial risk management continued
Liquidity management continued
Group <1 2-5 5+
TZS m Year Years years Total
2022
Financial liabilities
Lease liabilities (124 754) (424 103) (145 125) (693 982)
Accruals (128 630) – – (128 630)
Intergroup payables (15 297) – – (15 297)
Capital expenditure creditors (64 541) – – (64 541)
Mobile financial payables (436 086) – – (436 086)
Asset restoration Obligation payables (5 474) (2 829) (14 078) (22 381)
Other payables (9 889) – – (9 889)
Trade payables (21 192) – – (21 192)
(805 863) (426 932) (159 203) (1 391 998)
Financial assets
Trade receivables 55 526 – – 55 526
Other receivables 3 298 – – 3 298
Cash and bank balances 256 914 – – 256 914
M-Pesa balances 47 – – 47
Mobile financial deposits 436 086 – – 436 086
Intergroup receivables 7 317 – – 7 317
759 188 – – 759 188

144 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Company <1 2-5 5+

TZS m Year Years years Total
2023
Financial liabilities
Lease liabilities (133 708) (386 239) (139 295) (659 242)
Accruals (129 388) – – (129 388)
Intergroup payables (7 804) – – (7 804)
Capital expenditure creditors (66 040) – – (66 040)
Licences payables (73 710) – – (73 710)
Asset restoration Obligation payables (5 498) (2 707) (12 895) (21 100)
Other payables (2 391) – – (2 391)
Trade payables (25 692) – – (25 692)
(444 231) (388 946) (152 190) (985 367)
Financial assets
Trade receivables 51 014 – – 51 014
Other receivables 8 342 – – 8 342
Cash and bank balances 179 989 – – 179 989
M-Pesa balances 87 – – 87
Intergroup receivables 27 363 – – 27 363
266 795 – – 266 795
2022
Financial liabilities
Lease liabilities (124 754) (424 103) (145 125) (693 982)
Accruals (121 697) – – (121 697)
Intergroup payables (11 943) – – (11 943)
Capital expenditure creditors (64 541) – – (64 541)
Asset restoration Obligation payables (5 474) (2 829) (14 078) (22 381)
Other payables (2 484) – – (2 484)
Trade payables (21 156) – – (21 156)
(352 049) (426 932) (159 203) (938 184)
Financial assets
Trade receivables 52 639 – – 52 639
Other receivables 1 760 – – 1 760
Cash and bank balances 59 047 – – 59 047
M-Pesa balances 47 – – 47
Intergroup receivables 16 165 – – 16 165
129 658 – – 129 658

37. Capital management

The Group manages it’s capital to ensure that entities within the Group will be able to continue as going concern while maximising return to
shareholders. Capital is monitored on the basis of net debt to adjusted equity. Net debt comprises interest bearing borrowings, non‑interest
bearing borrowings, derivative financial instruments and cash and cash equivalents. The Group’s strategy is to maintain a net debt to
adjusted equity ratio of below 150%. These internal ratios establish levels of debt that Group should not exceed other than for relatively
short periods of time and they are reviewed on a semi annual basis to ensure they are being met. The net debt to adjusted equity ratio at
the reporting date are as follows;

Group Company
TZS m 2023 2022 2023 2022
Cash and bank balances – (Note 22) 236 590 256 961 180 076 59 094
Borrowings – – – –
Equity (821 723) (777 324) (764 164) (582 653)
Net debt to equity ratio (%) (28.79) (33.06) (23.57) (10.14)

145
Notes to the financial statements continued

38. Immediate and ultimate parent companies

The Group is controlled by its parent, Vodacom Group Limited, which is incorporated and domiciled in South Africa, and as at
31 March 2023, owns 75% (2022: 75%) of the Company’s shares. The ultimate parent is Vodafone Group Plc., which is incorporated and
domiciled in the United Kingdom.

39. Statement of cash flows notes

(a) Cash generated from operations
Group Company
TZS m Note 2023 2022 2023 2022
Profit/(loss) before tax
Adjusted for: 26 351 3 179 153 322 (109 202)
Finance income 10 (24 463) (25 837) (161 410) (2 729)
Finance cost 11 76 650 85 544 59 925 66 952
Net gain on foreign currency translation 12 2 939 1 548 2 901 1 554
81 477 64 434 54 738 (43 425)
Adjusted for:
(Gain)/loss on disposals of property plant and equipment
and de-recognised lease liabilities 9(a) (386) 18 (386) 18
Depreciation and amortisation 9(b) 248 306 236 201 241 857 229 496
Charge/(release) on financial assets 9(c) 2 974 (2 275) 2 978 (2 281)
Amortisation of capacity prepayments 9(a) 16 353 14 345 16 353 14 345
Increase/(decrease) in provision for inventory 20 1 222 (2 555) 1 222 (2 555)
Amortisation of government grant 26 (345) (1 716) (345) (1 716)
Government grants applied against funded assets 26 (4 626) (3 532) (4 626) (3 532)
Decrease in legal and marketing fees provision (3 832) (5 657) (5 489) (5 657)
Cash flows from operations before working capital
changes 341 143 299 263 306 302 184 693
Payment for capacity contracts 17 (13 162) (15 044) (13 162) (15 044)
(Increase)/decrease in inventory – gross (1 700) 4 137 (1 700) 4 137
(Increase)/decrease in trade and other receivables (10 783) 17 556 (7 936) 20 596
Increase/(decrease) in trade and other payables 75 892 10 836 9 611 (3 964)
Cash generated from operations 391 390 316 748 293 115 190 418

(b) Additions to property and equipment, and intangible assets

Group Company
TZS m Notes 2023 2022 2023 2022
Additions to property and equipment 15 177 237 193 638 177 231 193 638
Less: Right of use assets additions 15 (32 993) (41 077) (32 993) (41 077)
Additions to intangible assets 16 154 981 21 395 154 077 21 395
Property and equipment (Capex investment) 299 225 173 956 298 315 173 956
Changes in capital expenditure creditors (1 016) (31 803) (1 016) (31 803)
Changes in licenses payables (69 946) – (69 946) –
Property and equipment cash additions 228 263 142 153 227 353 142 153

146 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

40. Operating segments

In order to identify operating segments, management identifies components:
• that engage in business activities from which it may earn revenues and incur expenses;
• whose operating results are regularly reviewed by the Group Executive Committee; and
• for which discrete financial information is available.
Based on management’s analysis, there are no separate business segments for which discrete financial information, as required, is available.
In addition, the Group operates within the same geographical area, the United Republic of Tanzania, therefore no separate geographical
segments exist. Entity wide segment information is the same as that presented in the consolidated and separate financial statements.
There are no revenues from transactions with a single external customer that amount to 10% or more of the Group’s revenue.

41. Net current liability position

The Group had a net current liability position of (TZS92 743 million) as at 31 March 2023 (2022: net current asset of TZS37 373 million).
The Group will adapt to market conditions in order to maintain an optimal capital structure, commensurate with the level of risk which one
would expect from an emerging market telecommunication entity.

42. Events after the reporting period

The Board is not aware of any additional matter or circumstance arising since the end of the reporting period, not otherwise dealt with
herein, which significantly affects the financial position of the Group or the results of its operations or cash flows for the period.

147
148 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Notice of annual
general meeting
VODACOM TANZANIA PUBLIC LIMITED COMPANY
(Incorporated in the United Republic of Tanzania)
(Registration number 38501)
(ISIN: TZ1996102715 Ticker code: VODA)
(‘Vodacom Tanzania’ or ‘the Company’)

Notice is hereby given that, the seventh annual general meeting of the Company for the year ended 31 March 2023 will be held virtually on
Friday 22 September 2023 at 10:00am to conduct the following business:

1. Confirmation of minutes
To confirm minutes of the sixth annual general meeting held on 22 September 2022.

Ordinary resolution number 1

“RESOLVED THAT the minutes of the sixth annual general meeting held on 22 September 2022 be and are hereby confirmed.”

Copies of the minutes are obtainable from the Company’s website www.vodacom.co.tz/investors

2. Adoption of audited consolidated annual financial statements

To receive, consider and adopt the audited consolidated annual financial statements for the year ended 31 March 2023.

Ordinary resolution number 2

“RESOLVED THAT the audited consolidated annual financial statements of the Company, together with the independent auditors’ report and
directors’ report for the year ended 31 March 2023, be and are hereby received and adopted.”

Copies of the full audited consolidated annual financial statements for the year ended 31 March 2023 are obtainable
from the Company’s website www.vodacom.co.tz/investors

3. Election and re-election of a director

To elect by way of separate resolutions:

3.1 Mr Philip Besiimire as executive director, having been appointed since the last annual general meeting of the Company, is in accordance
with article 86 of the Company’s articles of association in respect of casual vacancy on the Board obliged to retire at this annual general
meeting. Having so retired, Mr P Besiimire is eligible for election as a director. His profile appears on page 151.

3.2 Mr Thomas B Mihayo and Ms Thembeka Semane are obliged to retire by rotation at this annual general meeting in accordance with the
provisions of articles 104 and 105 of the Company’s articles of association. Having so retired, Mr TB Mihayo and Ms T Semane are eligible
for re-election as directors. Their profiles appear on page 151.

Ordinary resolution number 3

“RESOLVED THAT Mr Philip Besiimire be and is hereby elected as an executive director of the Company.”

Ordinary resolution number 4

“RESOLVED THAT Mr Thomas B Mihayo be and is hereby re-elected as an independent non-executive director of the Company.”

Ordinary resolution number 5

“RESOLVED THAT Ms Thembeka Semane be and is hereby re-elected as an independent non-executive director of the Company.”

4. Appointment of Ernst & Young as auditors of the Company

To appoint Ernst & Young Inc., as nominated by the Company’s Audit, Risk and Compliance Committee, as independent auditors of the Company,
to hold office until the conclusion of the next annual general meeting of the Company.

Ordinary resolution number 6

“RESOLVED THAT Ernst & Young Inc. be and are hereby appointed as the auditors of the Company to hold office until the conclusion of the next
annual general meeting of the Company.”

149
Notice of annual general meeting continued

5. Appointment of members of the Audit, Risk and Compliance Committee

To re-elect, by way of separate resolutions and in accordance with article 32(f) of the Company’s articles of association, Mesdames Margaret
Ikongo, Thembeka Semane and Kanini Mutooni to continue serving as members of the Audit, Risk and Compliance Committee and considered
to be financial experts for this purpose. Their profiles appear on page 151 and 152.

Ordinary resolution number 7

“RESOLVED THAT Ms Margaret Ikongo be and is hereby re-elected to serve as a member of Audit, Risk & Compliance Committee.”

Ordinary resolution number 8

“RESOLVED THAT, subject to approval of resolution no. 5, Ms Thembeka Semane be and is hereby re-elected to serve as a member of
Audit, Risk & Compliance Committee.”

Ordinary resolution number 9

“RESOLVED THAT Kanini Mutooni be and is hereby re-elected to serve as a member of Audit, Risk & Compliance Committee.”

6. Dividend
To approve a final gross dividend of TZS9.95 per ordinary share for the financial year ended 31 March 2023 as recommended by the directors.
The dividend will be paid on or before Monday 16 October 2023 to the shareholders recorded in the register as at the close of trading on
14 August 2023.

Ordinary resolution number 10

“RESOLVED THAT the dividend of TZS9.95 per ordinary share for the year ended 31 March 2023 be and is hereby approved.”

7. Approval of the directors’ remuneration

To approve the non-executive directors’ remuneration of US$ 477 000 until the conclusion of the next annual general meeting of the Company,
enabling the Company to attract and retain persons of the capability, skills and experience required to make a meaningful contribution to the
Company. No increase in fees has been proposed.

Ordinary resolution number 11

“RESOLVED THAT the level of non-executive directors’ remuneration of US$ 477 000 be and is hereby approved on the basis set out as follows:
Proposed fee Current fee
US$1 US$
Board Chairman 150 000 150 000
Board Member 30 000 30 000
ARCC Chairperson 15 000 15 000
ARCC Member 8 000 8 000
Remco Chairperson 12 000 12 000
Remco Member 4 000 4 000
Nomco Member 3 000 3 000
1. These amounts represent gross remuneration, inclusive of all taxes (including withholding tax) and are payable in Tanzanian shillings for local directors, South African rand
for South African directors and United States dollar for other directors. Payments are made on a quarterly basis in arrears for a minimum of four ordinary meetings per
annum, three special board meetings and an AGM or any EGM as may be required.

8. Special Business
8.1 Acquisition of Smile Communications Tanzania Limited
To approve the acquisition of 100% of the issued shares in Smile Communications Tanzania Limited, subject to approvals being issued by the
Tanzanian Fair Competition Commission and the Tanzania Communications Regulatory Authority as well as there being no objection being
obtained by the Capital Markets and Securities Authority and the Dar es Salaam Stock Exchange for the acquisition, on terms acceptable to the
parties involved.

Special resolution number 1

“RESOLVED THAT the acquisition of 100% of the issued shares in Smile Communications Tanzania Limited be and is hereby approved”.

8.2 Investing in joint ventures

To approve investing into joint ventures with strategic partners to carry out fibre installation and provide related services as well as accelerate
tower infrastructure in rural areas in order to grow fixed and mobile footprints in Tanzania while optimising investment costs.

Special resolution number 2

 “RESOLVED THAT an investment into a joint venture for purposes of carrying out fibre installation and providing related services in Tanzania be
and is hereby approved”.

Special resolution number 3

“RESOLVED THAT an investment into a joint venture for purposes of accelerating tower infrastructure and provide related services in rural areas
in Tanzania be and is hereby approved”.

150 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Profile of directors for re-election and election

Executive Director
Managing Director – Vodacom Tanzania
Independent non-executive chairman Member of Vodacom Tanzania PLC
Chairman of the Nomination Committee Executive Committee

Thomas B Mihayo (76) Philip Besiimire (47)

z Degree in Law (LL.B) from University of Dar es Salaam, Tanzania. z Master’s in Business Administration, Business School
z Arbitrator and Legal Consultant. of Netherlands (BSN), Netherlands
z Bachelor of Arts in Social Sciences, Makerere University,
Justice Mihayo was appointed as an independent non-executive Kampala, Uganda
director of Vodacom Tanzania in November 2020. He is the President
of the Tanzania Retired Judges Associations. He is also Commissioner Philip was appointed as the Managing Director of Vodacom Tanzania
of the National Electoral Commission. Justice Mihayo is an Advocate PLC effective 15 October 2022. He joined Vodacom from MTN
of the High Court and Courts subordinate thereto save Primary South Africa where he was the Chief Sales, Distribution and Regional
Courts. He has over 35 year of experience working in various courts Operations Officer since 2019. He held various senior roles at MTN
in Tanzania. He served as Principal Corporation Counsel with the including Executive Regional Operations in South Africa, Chief
Tanzania Legal Corporation and then Registrar of the LART Loans Executive Officer in South Sudan, Chief Marketing Officer in Zambia
Recovery Tribunal and finally for seven years as Judge of the High and Chief Marketing Officer and Acting Chief Executive Officer in
Court of Tanzania. Justice Mihayo served as Chairman of the Board of Swaziland. He has over 15 years’ experience in leadership and
Directors of the Tanzania Tourist Board. He also served as Board commercial execution (marketing, consumer, enterprise and mobile
Member of the Public Procurement Regulatory Authority and financial services) working with one of the largest telco companies
President of the Media Council of Tanzania. Thereafter, he served as a in Africa.
Council Member in the Tanganyika Law Society and was President
thereof for two terms of one year each.

Independent Non-Executive Director Independent Non-Executive Director

Chairperson of the Audit, Risk and Member of Audit, Risk and Compliance
Compliance Committee and a financial Committee and a financial expert
expert on this committee on this committee

Margaret Ikongo (66) Thembeka Semane (47)

z Master’s in Business Administration, Open University, Tanzania. z Master’s in Business Administration; Monash University;
z International Certificate in Risk Management, Institute of Risk z Post Grad Diploma in Business Administration;
Management, United Kingdom. University of Pretoria – Gordon Institute of Business Science.
z International Diploma in Risk Management and Graduate z Bachelor of Commerce in Financial Accounting;
Member of the Institute of Risk Management United Kingdom. University of Transkei (the current Walter Sisulu University)
z Associate member of Chartered Insurance Institute, United Kingdom. z Certificated Associate of the Institute of Bankers – CAIB (SA)

Margaret was appointed as an independent non-executive director of Thembeka was appointed as an independent non-executive director
Vodacom Tanzania in November 2017. She is also a board member of Vodacom Tanzania in November 2017. She is an experienced
of Actuarial and Risk Consulting, and Metrolife and Meticulus business executive proficient in corporate strategy development,
Insurance. Previously, Margaret sat on the Boards of NMB Plc and business systems implementation, high value project financing,
AAR Insurance Tanzania as well as the Board of Trustees of the compliance and monitoring, corporate governance and financial
National Social Securities Fund. Margaret has extensive financial and management. She is a director at Linea consulting (Pty) Ltd, a
corporate governance expertise which were gained from her career regulatory committee member of ACASA and ATNS, reporting to
in the insurance industry where she was Managing Director of the South Africa’s Minister of Transport, as well as a councillor at ICASA.
National Insurance Corporation for a period of ten years. Margaret Thembeka serves as a board member of the Department of Human
was also an advisor to the Commissioner of the Tanzania Insurance Settlements’ EAAB, where she also serves as the chairperson of its
Regulatory Authority as well as the Acting Head of the Technical finance and investment committee as well as being a member of the
Directorate. audit and risk committee and human resources and remuneration
committee. She is a board member and a member of both the audit
& risk management committee and remuneration committee of
South African National Parks. Furthermore, Thembeka is a member of
the South African Heritage Resource Agency and the Sol Platjie
Municipality’s audit, risk and performance management committee.

151
Notice of annual general meeting continued

Profile of directors for Record date

The record date for shareholders to be registered in the books of the Company for
re-election and election purposes of being entitled to participate, speak and vote at the annual general meeting is
continued Friday 15 September 2023.

Participation by electronic means

The annual general meeting will be held in full electronic format in accordance article 29
Independent
Non Executive Director and 63 of the Company’s articles of association. Shareholders who will be on the register
Member of Audit, Risk on the record date will received SMS notification with meeting credentials. The annual
and Compliance Committee general meeting will be streamed live via a link using a web enabled device with
and a financial expert on compatible web browser (smart phone/tablet/iPad). For more information, please visit
this committee the Company’s website https://vodacom.co.tz/investors

Kanini Mutooni (47) Shareholders will be liable for their own network and data charges. The Company will not
be held accountable in the case of the loss of network connectivity or network failure due
to insufficient airtime/internet connectivity/power outages/electronic participation
z Harvard Kennedy School of Government-
channel malfunction which could prevent a shareholder from participating in the
Global Policy Executive Education.
electronic annual general meeting.
z Master’s in Business Administration (MBA),
Cass Business School, City University, Shareholders are encouraged to submit any questions concerning the resolutions
London. proposed as set out in this notice of annual general meeting in advance of the annual
z Securities Institute Diploma (UK)-Chartered general meeting by emailing their questions to [email protected]
Institute of Securities and Investment by no later than 10:00am Tuesday 19 September 2023. These questions will be
Professionals.
addressed via the electronic participation channel at the annual general meeting.
z Investment Management Certificate (UK)
Submission of questions in advance will however not preclude a shareholder from asking
z ACCA, Chartered Association of Certified
a question at the electronic meeting.
Accountants (UK).
z Bachelor of Commerce (Hons) Catholic
University, Kenya. Voting and Proxy
Only shareholders are entitled to attend, speak and vote at the annual general meeting.
Kanini was appointed as an independent
non-executive director of Vodacom Tanzania in Shareholders may appoint a proxy to attend, speak and vote in their stead. A proxy
October 2022. She is the Managing Director of need not be a shareholder of the Company. A duly completed form of proxy, obtained
Draper Richards Kaplan Foundation responsible from the company’s website, along with DSE Depository receipt, personal identification
for the Africa portfolio. She also serves as a (National ID/ Voters ID/ Driver ID) and contact details must be emailed to
board director for Financial Sector Deepening [email protected] or delivered for the attention of the Company
Africa (FSDA); MCE Social Capital, the United Secretary at 7 Floor, Vodacom Tower, Ursino Estate, Plot 23, Bagamoyo Road,
Nations Capital Development Fund, Africa Dar es Salaam, Tanzania not later than 10:00am Tuesday 19 September 2023. The
Enterprise Challenge Fund, Amref Health completion of a form of proxy does not preclude any shareholder attending the annual
Innovation and CDC UK PLC. Kanini is the general meeting.
former Board Chair of The Global Innovation
Fund, a $250M investment vehicle supported Voting shall be conducted in accordance with the Company’s memorandum and articles
by the UK, US, Canadian, Australian and of association. An ordinary resolution to be approved at the annual general meeting must
Swedish Governments. She also worked at the be supported by more than 50% of the voting rights of shareholders, whereas a special
Board level in leadership positions at resolution must be supported by the holders of not less than 75% of the voting rights.
investment banks in London and the US, such
Shareholders holding shares, but not in their own name must furnish their custodians or
as Bank of America-Merrill Lynch and Dresdner
broker with their instructions for voting at the annual general meeting. If your custodian
Kleinwort Benson.
or broker, as the case may be, does not obtain instructions from you, it will be obliged to
act in accordance with your mandate furnished to it.

Shareholders are encouraged to continuously monitor the Company’s website for updates
relating to the annual general meeting.

By order of the Board.

Caroline M Mduma
Company Secretary
31 August 2023

152 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Form of proxy
Vodacom Tanzania Public Limited Company
(Incorporated in the United Republic of Tanzania)
(Registration number 38501)
(ISIN: TZ1996102715 Ticker code: VODA)
(‘Vodacom Tanzania’ or ‘the Company’)

Section A – To be completed by all shareholders

Full Name

CDS Account Number Number of shares held in the Company

Section B – Only shareholders who wish to appoint individual(s) other than the Chairman as a proxy should complete this section
I (We), the person(s) named in Section A above, with the CDS Account Number and Number of shares held in the Company shown in Section A above,
do hereby appoint (see note 1 & 2)

or failing him/her,

or failing him/her,
the Chairperson of the annual general meeting as my(our) proxy to attend and speak and vote for me(us) on my(our) behalf at the virtual annual
general meeting which will be held on Friday 22 September 2023 for the purpose of considering and, if deemed fit, passing the ordinary and special
resolutions to be proposed and at each adjournment of the meeting and to vote for or against the ordinary and special resolutions or to abstain from
voting in respect of the shares in the issued capital of the Company registered in my(our) name(s).
Section C – To be completed by all shareholders
Please indicate with an “x” in the applicable space, how you wish your votes to cast.
Unless otherwise directed the proxy specified in Section B above will vote as he or she thinks fit.
For Against Abstain
1 Ordinary resolution number 1
Confirmation of minutes of the annual general meeting held on 22 September 2022
2. Ordinary resolution number 2
Adoption of consolidated annual financial statements for the year ended 31 March 2023
3. Ordinary resolution number 3
Election of Philip Besiimire as an executive director
4. Ordinary resolution number 4
Re-election of Thomas B Mihayo as an independent non-executive director
5. Ordinary resolution number 5
Re-election of Thembeka Semane as an independent non-executive director
6. Ordinary resolution number 6
Appointment of Ernst & Young Inc. as auditors of the Company for the year ending March 2024
7. Ordinary resolution number 7
Re-election of Margaret Ikongo as a member of Audit Risk & Compliance Committee
8. Ordinary resolution number 8
Re-election of Thembeka Semane as a member of Audit Risk & Compliance Committee
9. Ordinary resolution number 9
Re-election of Kanini Mutooni as a member of Audit, Risk & Compliance Committee
10. Ordinary resolution number 10
Approval to pay a dividend of TZS9.95 per share for the financial year ended 31 March 2023
11. Ordinary resolution number 11
Approval of the non-executive directors’ remuneration of US$ 477 000
12. Special resolution number 1
Approval to acquire 100% of the issued shares in Smile Communications Tanzania Limited
13. Special resolution number 2
Approval to enter into a joint venture and carry out fibre installation and provide related services
14. Special resolution number 3
Approval to enter into a joint venture and accelerate tower infrastructure and provide related services

Signed this day of September 2023

Signature: Signature:
Completed forms of proxy must be lodged with the Vodacom Tanzania PLC Company Secretary office by no later than 10:00am
Tuesday 19 September 2023.

153
Notes to the form of proxy
1. A member entitled to participate and vote at the annual general meeting may appoint one or more proxies to attend, vote and speak in his/her
stead at the annual general meeting. A proxy need not be a member of the Company. In the case of a member being a corporate, the proxy
form must be completed under its common seal or under the hand of an officer or attorney duly authorised in writing.

2. Please insert an ‘X’ in the relevant space according to how you wish your votes to be cast. However, if you wish to cast your votes in respect of a
lesser number of shares than you own in the Company insert the number of shares held in respect of which you wish to vote. Failure to comply
with the above will be deemed to authorise the proxy to vote or to abstain from voting at the annual general meeting as he/she deems fit in
respect of all the shareholder’s votes exercisable at the meeting. A shareholder or his/her proxy is not obliged to use all the votes exercisable by
the shareholder or by his/her proxy, but the total of the votes cast and in respect of which abstention is recorded may not exceed the total of
the votes exercisable by the shareholder or by his/her proxy.

3. A shareholder may insert the name of a proxy or the names of two alternative proxies of the shareholder’s choice in the space/s provided, with
or without deleting “the Chairman of the annual general meeting” but any such deletion must be initialled by the shareholder. The person
whose name stands first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion
of those whose names follow.

4. Duly signed forms of proxy and a copy of the shareholder’s depository receipt may be scanned and emailed to [email protected]
or deposited for the attention of the Company Secretary at 7th Floor, Vodacom Tower, Ursino Estate, Plot 23, Bagamoyo Road, Dar es Salaam,
Tanzania by no later than 10:00am Tuesday 19 September 2023.

5. Any alterations or corrections made to this form of proxy must be initialled by the signatory/ies.

6. A minor must be assisted by his/her parent or guardian unless the relevant documents establishing his/her legal capacity are produced.

7. The Chairman of the annual general meeting may accept any form of proxy which is completed other than in accordance with these notes if he
is satisfied as to the manner in which the shareholder wishes to vote.

8. Where there are joint holders of shares:

z Any one holder may sign this form of proxy; and

z The vote of the senior shareholder (for that purpose, seniority will be determined by the order in which the names of the shareholders appear
in the company’s register) who tenders a vote (whether in person or by proxy) will be accepted to the exclusion of the vote(s) of the other
joint shareholders.

Ms Caroline Mduma
Company Secretary
7th Floor, Vodacom Tower, Ursino Estate,
Plot 23, Bagamoyo Road,
PO Box 2369,
Dar es Salaam,
E-mail: [email protected]

154 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Share information
Total shareholding # of shares % holding

Vodacom Group Limited 1 680 000 200 75.0%

Government Employees Pension Fund (Public Investment Corporation SOC Limited,
the Republic of South Africa) 164 503 540 7.3%
Institutional Investors (East Africa) 250 752 782 11.2%
Institutional Investors (Rest of the World) 50 122 663 2.2%
Others 94 621 115 4.3%

2 240 000 300 100.0%

% institutional
Institutional investors other than Vodacom Group
holding
Tanzania 47.9%
PIC 35.3%
Uganda 6.0%
Other International investors 10.8%
100.0%

155
Corporate information
Vodacom Tanzania Public National Bank of Commerce Limited

Limited Company Sokoine Drive & Azikiwe Street

P.O. Box 1863
(Incorporated in the United Republic of Tanzania) Dar es Salaam, Tanzania
Registration number: 38501 NMB Bank Plc
(ISIN: TZ1996102715 Share Code: VODA)
Ohio street/Ali Hassan Mwinyi Road
P.O. Box 9213
Dar es Salaam, Tanzania
Directors
TB Mihayo (Chairman)1 CRDB Bank Plc.
P Besiimire (Managing Director)2
Azikiwe street
H Bujiku (Finance Director)1
P.O. Box 268
S Mdlalose3
Dar es Salaam, Tanzania
D Gutierrez4
M Ikongo1 Standard Chartered Bank Tanzania
M Mbungela5
N Nyoka5 International House
R Morathi5 Shaaban Robert St/Garden Avenue
S Ramasamy6 P.O. Box 9011
T Semane5 Dar es Salaam, Tanzania
K Mutooni7
1
Tanzanian. 2 Ugandan. 3 British. 4 Bolivian. External legal counsel
5
South African. 6 Indian. 7 Kenyan.
IMMMA (Advocates)

Company secretary Plot 357, IMMMA House

United Nations Road, Upanga
Caroline Mduma
P.O. Box 72484
15th Floor, Vodacom Tower
Dar es salaam, Tanzania
Ursino Estate, Plot 23, Bagamoyo Road
P.O. Box 2369, Dar es Salaam, Tanzania Lawhill
14112 Regent Estate Mikocheni
Registered office and Place of business Historia Street, Plot 311 House No 96
15th Floor, Vodacom Tower P.O. Box 105646
Ursino Estate, Plot 23, Bagamoyo Road Dar es salaam, Tanzania
P.O. Box 2369, Dar es Salaam, Tanzania
Transfer secretary
Auditor CSD & Registry Company Limited
Ernst & Young Dar es Salaam Stock Exchange
EY House Plot No 162/1 TZ 3rd Floor, Kambarage House
14111 Mzinga Way, Oysterbay Peninsular Plot 6, Ufukoni Street
P.O. Box 2475 P.O. Box 70081
Dar es Salaam, Tanzania Dar es Salaam, Tanzania

Main bankers Sponsoring licenced dealing member

Citibank Tanzania Limited Orbit Securities Company Limited

Citibank House
Plot 1962, Toure Drive, Oysterbay
External communications
P.O. Box 71625 Zuweina Farah
Dar es Salaam, Tanzania
Investor Relations
Albert Maneno, Neema Munuo
[email protected]
www.vodacom.co.tz/investors

156 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Definition of terms
2G 2G networks are operated using global system for mobile (‘GSM’) technology which offers services such as
voice, text messaging and low speed data. In addition, our network supports general packet radio services
(‘GPRS’), often referred to as 2.5G. GPRS allows mobile devices to access online data services such as the
internet and email.

3G A cellular technology based on wide band code division multiple access delivering voice and faster
data services.

4G Technology that offers even faster data transfer speeds than 3G/HSPA.

5G Fifth-generation wireless is the latest iteration of cellular technology, engineered to greatly increase the
speed and responsiveness of wireless networks.

Active customers Active customers are based on the total number of mobile customers using any service during the last three
months. This includes customers paying a monthly fee that entitles them to use the service even if they do
not actually use the service and those customers who are active while roaming.

Active data customers Active data customers are based on the number of unique users generating billable data traffic during the
month. Also included are users on integrated tariff plans, or who have access to corporate access point
names (‘APNs’), and users who have been allocated a revenue generating data bundle during the month.
A user is defined as being active if they are paying a contractual monthly fee for this service or have used
the service during the reported month.

30 day active M-Pesa 30 day active M-Pesa customers are the number of unique customers who have generated billable
customers transactions during the past 30 days.

ARPU ARPU is calculated by dividing the average monthly service revenue by the average monthly active
customers during the period.

Capital Markets and Capital Markets and Securities Act, Cap. 79 of the Laws of the United Republic of Tanzania (Act No. 5
Securities Act of 1994), as amended from time to time.

Churn Churn is calculated by dividing the annualised number of disconnections during the period by the average
number of monthly customers during the period.

Cloud services Services where the customer has little or no equipment at their premises and all the equipment and
capability associated with the service is run from the Vodacom network and data centres instead.
This removes the need for customers to make capital investments and instead they have an operating cost
model with a recurring fee.

Companies Act Companies Act, Cap. 212 of the Laws of the United Republic of Tanzania (Act No. 12 of 2002), as amended
from time to time.

Customer value The delivery of perceived value to identifiable customer segments that results in a profitable return for the
management (‘CVM’) company.

EBIT Earnings before interest, taxation, impairment losses, profit/loss on disposal of investments, profit/loss from
associate and restructuring cost.

EBITDA Earnings before interest, taxation, depreciation and amortisation, impairment losses, profit/loss on disposal
of investments, property, plant and equipment, and intangible assets, profit/loss from associate and
restructuring cost.

EPOCA The Electronic and Postal Communications Act, Cap. 172 of the Laws of the URT (Act No. 3 of 2010) as
amended from time to time.

Free cash flow Cash generated from operations less additions to property, plant and equipment and intangible assets,
proceeds on disposal of property, plant and equipment and intangible assets, tax paid, net finance charges
paid or received. Free cash flow excludes movements in amounts owed to M-Pesa customers.

GSM Association An organisation which represents the interests of mobile operators globally, uniting nearly 800 operators
with almost 300 companies in the broader mobile ecosystem.

IIRC International Integrated Reporting Council.

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Definitions continued

Internet of Things (‘IoT’) The network of physical objects embedded with electronics, software, sensors, and network connectivity,
including built-in mobile SIM cards, that enables these objects to collect data and exchange
communications with one another or a database.

Mobile broadband Mobile broadband allows internet access through a browser or a native application using any portable or
mobile device such as smartphone, tablet or laptop connected to a cellular network.

Mobile customer A mobile customer is defined as a subscriber identity module (‘SIM’) which has access to the network for any
purpose, including data only usage.

Mobile termination rate A per minute charge paid by a telecommunications network operator when a customer makes a call to
(‘MTR’) another mobile or fixed network operator.

MoU Minutes of use per month is calculated by dividing the average monthly minutes (traffic) during the period
by the average monthly active customers during the period.

Operating free cash flow Cash generated from operations less additions to property, plant and equipment and intangible assets other
than licence and spectrum payments and purchases of customer bases, net of proceeds on disposal of
property, plant and equipment and intangible assets, other than licence and spectrum payments and
disposals of customer bases. Operating free cash flow excludes movements in amounts owed to M-Pesa
customers.

PABX A private automatic branch exchange (‘PABX’) is an automatic telephone switching system within a private
enterprise.

RAN Radio access network is the part of a mobile telecommunications system which provides cellular coverage
to mobile phones via a radio interface, managed by base stations installed on towers and rooftops across
the coverage area, and linked to the core nodes through a backhaul infrastructure which can be owned,
leased or a mix of both.

Roaming Allows customers to make calls, send and receive texts and data on other operators’ mobile networks,
usually while travelling abroad.

Smartphone penetration The number of smartphones and other smart devices used on our network during a month divided by the
total number of mobile customers which used any service during the same period.

SME Small to medium-sized enterprise.

SoHo Small office-home office.

Spectrum The radio frequency bands and channels assigned for telecommunication services.

Vodacom Group Vodacom Group Limited and each of its subsidiary companies.

Vodacom Tanzania or Vodacom Tanzania Public Limited Company.

the Company
Vodafone Group Plc Vodafone Group Plc and each of its subsidiary companies.

VPN A virtual private network (‘VPN’) is a network that uses a shared telecommunications infrastructure, such as
the internet, to provide remote offices or individual users with secure access to their organisation’s network.

Weighted NPS The net promoter score (‘NPS’) is an index ranging from –100 to 100 that measures the willingness of
customers to recommend an operator’s products or services to others. It is used as a proxy for gauging the
customers’ overall satisfaction with an operator’s product or service and the customers’ loyalty to the brand.
For each operator, responses are collected from customers who use its products or services as either the
primary or alternative means of telecommunication (a ‘primary user’ or ‘alternative user’). Responses from
primary and alternative users are then weighted by the natural proportion of primary and alternative users
for that operator in order to calculate the weighted NPS.

WiMAX Worldwide Interoperability for Microwave Access (‘WiMAX’) technology is a broadband wireless data
communications technology which is able to provide high speed data over a wide area.

158 Vodacom Tanzania Public Limited Company Annual Integrated Report for the year ended 31 March 2023
 Consolidated Notice of
Our business Our financial annual financial annual general Additional
Overview Our business environment Our strategy Our purpose performance Governance statements meeting information

Disclaimer
Non-IFRS Forward-looking statements
information This announcement, which sets out the consolidated results of the Group for the
twelve months ended 31 March 2023, contains ‘forward-looking statements’, which
The auditor’s report does not necessarily cover have not been reviewed or reported on by the Group’s auditors, with respect to the
all of the information contained in this Group’s financial condition, results of operations and businesses and certain
announcement, which sets out the consolidated information relating to the Group’s plans and objectives. In particular, such forward-
financial results of Vodacom Tanzania Public looking statements include statements relating to: The Group’s future performance;
Limited Company (‘the Company’) and its future capital expenditures, acquisitions, divestitures, expenses, revenues, financial
subsidiaries (together ‘the Group’) for the twelve conditions, dividend policy, and future prospects; business and management strategies
months ended 31 March 2023. Shareholders are relating to the expansion and growth of the Group; the effects of regulation of the
therefore advised that in order to obtain a full Group’s business by the government in the country in which it operates; the Group’s
understanding of the nature of the auditor’s work expectations as to the launch and roll out dates for products, services or technologies;
they should obtain a copy of that report together expectations regarding the operating environment and market conditions; growth in
with the accompanying financial information customers and usage; and the rate of dividend growth by the Group.
from the registered office of the Company. This
announcement contains certain non-IFRS Forward-looking statements are sometimes, but not always, identified by their use of a
financial measures which have not been date in the future or such words as ‘will’, ‘anticipates’, ‘aims’, ‘could’, ‘may’, ‘should’,
reviewed or reported on by the Group’s auditors. ‘expects’, ‘believes’, ‘intends’, ‘plans’ or ‘targets’ (including in their negative form).
The Group’s management believes these
By their nature, forward-looking statements are inherently predictive, speculative and
measures provide valuable additional
involve risk and uncertainty because they relate to events and depend on
information in understanding the performance of
circumstances that may or may not occur in the future. There are a number of factors
the Group or the Group’s businesses because
that could cause actual results and developments to differ materially from those
they provide measures used by the Group to
expressed or implied by these forward-looking statements. These factors include, but
assess performance. However, this additional
are not limited to, the following: changes in economic or political conditions in markets
information presented is not uniformly defined
served by operations of the Group; greater than anticipated competitive activity; higher
by all companies, including those in the Group’s
than expected costs or capital expenditures; slower than expected customer growth
industry. Accordingly, it may not be comparable
and reduced customer retention; changes in the spending patterns of new and existing
with similarly titled measures and disclosures by
customers; the Group’s ability to expand its spectrum position or renew or obtain
other companies. Additionally, although these
necessary licences; the Group’s ability to achieve cost savings; the Group’s ability to
measures are important in the management of
execute its strategy in fibre deployment, network expansion, new product and service
the business, they should not be viewed in
roll-outs, mobile data, Enterprise and 4G and 5G networks expansion; changes in
isolation or as replacements for or alternatives
foreign exchange rates, as well as changes in interest rates; the Group’s ability to realise
to, but rather as complementary to, the
benefits from entering into partnerships or joint ventures and entering into service
comparable IFRS measures. Refer to the
franchising and brand licensing; unfavourable consequences to the Group of making
‘Operating and financial review’ section of this
and integrating acquisitions or disposals; changes to the regulatory framework in which
announcement for details relating to service
the Group operates; the impact of legal or other proceedings; loss of suppliers or
revenue, EBITDA and earnings per share.
disruption of supply chains; developments in the Group’s financial condition, earnings
and distributable funds and other factors that the Board takes into account when
Trademarks determining levels of dividends; the Group’s ability to satisfy working capital and other
requirements; changes in statutory tax rates or profit mix; and/or changes in tax
Vodafone, the Vodafone logo, M-Pesa, Vodacom,
legislation or final resolution of open tax issues. All subsequent written or oral
Connected Farmer and Vodafone Supernet are
forward-looking statements attributable to the Company, to any member of the Group
trademarks of Vodafone Group PLC (or have
or to any persons acting on their behalf are expressly qualified in their entirety by the
applications pending). M-Fundi, M-Shamba,
factors referred to above. No assurances can be given that the forward-looking
M-Pawa and Vodacom Faraja are trademarks of
statements in this document will be realised. Subject to compliance with applicable law
Vodacom Tanzania Public Limited Company (or
and regulations, the Company does not intend to update these forward-looking
have applications pending). Other product and
statements and does not undertake any obligation to do so.
company names mentioned herein may be the
trademarks of their respective owners.

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